Tennessee 2011 bill text

House Bill 289

Tennessee Beverage Container Recycling Refunds Act

The following text was found at http://www.capitol.tn.gov/Bills/107/Bill/HB0289.pdf
Its companion bill, Senate Bill 337, can be found at http://www.capitol.tn.gov/Bills/107/Bill/SB0337.pdf

HB0289
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HOUSE BILL 289
By McDonald
AN ACT to amend Tennessee Code Annotated, Title 68,
Chapter 211 and Chapter 616 of the Public Acts of
2010, relative to the Tennessee Beverage
Container Recycling Refunds Act.
WHEREAS, the general assembly finds that recycling is an important element of an
integrated solid waste management system that can protect and preserve natural resources,
conserve energy and reduce economic costs to residents, businesses and local governments
within the state; and
WHEREAS, the general assembly finds that reducing litter is important for promoting
tourism and recreation, reducing damage to farmers and enhancing the quality of life for
residents of this state; and
WHEREAS, the general assembly finds a need to expand participation in recycling
programs; to maximize the economic benefits of such programs to businesses, government and
residents; and to reduce litter; and
WHEREAS, the purposes of this act are to increase recycling rates for specified deposit
beverage containers, to encourage recycling in general, to reduce litter and to provide a
connection between manufacturing decisions and recycling program management; now,
therefore,
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 68, Chapter 211, is amended by adding
Sections 2 through 29 of this act as a new, appropriately designated part.
SECTION 2. This part shall be known and may be cited as the “Tennessee Beverage
Container Recycling Refunds Act.”
SECTION 3. As used in this part, unless the context otherwise requires:
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(1) “Administrative allowance” means an amount paid by the program to a certified
processor to defray the certified processor’s costs of complying with the administrative
requirements of the program, pursuant to Section 22;
(2) “Cancel” means to crush, flatten, shred or otherwise render a deposit
beverage container unfit for redemption;
(3) “Certified processor” means a facility designed for the collection, processing,
and sale or reuse of secondary resources that would otherwise be disposed of as
municipal solid waste, and that has been certified by the department to purchase,
quantify, document, cancel, process and reuse or sell for reuse deposit beverage
containers that have been collected at certified redemption centers;
(4) “Certified redemption center” means an operation that has been certified by
the department to accept empty deposit beverage containers from consumers; sort the
containers according to material type and, if applicable, color and size; pay no less than
the established refund value either to the consumer or to a recipient designated or
intended by the consumer; ensure that the properly sorted containers are received by a
certified processor; and, where authorized, cancel the empty containers. A certified
redemption center may be:
(A) A dedicated storefront facility;
(B) A portable microsite redemption center;
(C) A mobile redemption center;
(D) A reverse vending machine;
(E) A drop-off redemption center operating in conjunction with an
electronic certified processor; or
(F) A facility that is operated by and may be a part of:
(i) A grocery store, retailer or other business;
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(ii) A certified processor;
(iii) A nonprofit agency or facility, such as a homeless shelter; or
(iv) A recycling program operated by, on behalf of, or independent
of, a county, municipal or metropolitan government, including a recycling
convenience center, a waste transfer station, a materials recovery facility,
a curbside recycling program, a landfill or other recycling entity approved
by the commissioner;
(5) “Commissioner” means the commissioner of environment and conservation;
(6) “Comptroller” means the office of the comptroller of the treasury;
(7) “Consumer” means a person who buys a beverage in a deposit beverage
container for use or consumption and pays the deposit;
(8) “Container-recovery fee” means an amount paid to the state by a deposit
beverage distributor to provide uninterrupted funding of the county litter grants program
and defray the costs of initiating the deposit program;
(9) “Dealer” means a person who engages in the sale of beverages in deposit
beverage containers to a consumer for off-premises consumption in the state;
(10) “Department” means the department of environment and conservation;
(11) “Deposit beverage” means beer, ale or other drink produced by fermenting
malt; carbonated soft drinks; carbonated and noncarbonated water, including flavored
and sugared waters; tea and coffee drinks regardless of dairy-derived product content;
juices, including one hundred percent (100%) juices and juice blends; flavored malt
beverages and any other juice-based beverage with an alcohol content of not more than
seven percent (7%) by volume; and all nonalcoholic drinks in liquid form and intended for
internal human consumption that are contained in a deposit beverage container.
"Deposit beverage” does not include:
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(A) Any liquid that is:
(i) A syrup;
(ii) In a concentrated form; or
(iii) Typically added as a minor flavoring ingredient in food or
drink, such as extracts, cooking additives, sauces or condiments;
(B) Any liquid that is a drug, medical food or infant formula as defined by
the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301 et seq.;
(C) Any liquid that is designed and consumed only as a dietary
supplement and not as a beverage as defined in the Dietary Supplement Health
and Education Act of 1994, PL 103-417;
(D) Products frozen at the time of sale to the consumer, or, in the case of
institutional users such as hospitals and nursing homes, at the time of sale to the
users;
(E) Products designed to be consumed in a frozen state;
(F) Instant drink powders;
(G) Seafood, meat or vegetable broths, or soups, but not juices;
(H) Milk and all other dairy-derived products, except tea and coffee
drinks containing such products; and
(I) Wine and spirits;
(12) “Deposit beverage container” means an individual, separate and sealed
container that is not considered a refillable beverage container as defined in this section,
and that is made of glass, aluminum, steel, bimetal or plastic, including polyethylene
terephthalate (PET), high-density polyethylene (HDPE) and all other plastic types and
grades, in any size and used for containing, at the time of sale to the consumer, a
deposit beverage intended for use or consumption in this state;
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(13) “Deposit beverage container fund,” hereinafter the “fund,” means a fund
created in the state treasury by the department of revenue into which are deposited all
initial deposits, container-recovery fees, fines, interest, grants, donations and any
allocations made to the fund independent of this part and out of which are paid all
program costs, refund values, overhead allowances, administrative allowances, disposal
costs and other allocations;
(14) “Deposit beverage container program,” hereinafter the “program,” means an
administrative entity created within the division of solid waste management of the
department of environment and conservation to carry out the requirements of this part;
(15) “Deposit beverage distributor” means a person who engages in the sale of
beverages in deposit beverage containers to a dealer in this state, including any
manufacturer who engages in these sales. Deposit beverage distributor includes any
person who imports beverages from outside of this state for sale to dealers or
consumers in this state, and any federal agency and military distributors, but does not
include airlines and shipping companies that merely transport deposit beverage
containers;
(16) “Drop-off redemption center” means a certified redemption center, typically
located adjacent to a hosting grocery store or similar entity, and operating in conjunction
with an electronic certified processor as defined in this section. Drop-off redemption
centers accept bags containing deposit beverage containers from participating
consumers; provide the consumer with bar-coded labels to identify their bags; ensure
that the labeled bags are transported to and processed by an electronic certified
processor; and provide automated teller machines where participants may review their
redemption accounts and print credit slips to be redeemed or accepted as cash by the
host grocery store or similar entity;
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(17) “Electronic certified processor” means a type of certified processor
operating in conjunction with one (1) or more drop-off redemption centers. Electronic
certified processors automatically scan, sort, and cancel empty deposit beverage
containers that have been received from participating consumers at drop-off redemption
centers; electronically record all transaction information, including quantities, materials
and refund amounts due; and electronically post the refund amounts to consumers’
redemption accounts;
(18) “Fiscal year” means the twelve-month period beginning on any July 1 and
ending on the following June 30;
(19) “Import” means to buy, bring or accept delivery of deposit beverage
containers from an address, supplier or any entity outside of the state;
(20) “Importer” means any person who buys, brings or accepts delivery of
deposit beverage containers from outside the state for sale or use within the state;
(21) "Microsite redemption center” means a portable, attended roll-off trailer
designed and equipped to serve as a certified redemption center, and typically located in
the parking lot of a hosting grocery store or similar entity. Recycling refunds are typically
issued in the form of a credit slip to be redeemed or accepted as cash by the host
grocery store or similar entity;
(22) “Mobile redemption center” means a certified redemption center designed to
bring redemption services to residences, institutions, conventions, businesses and other
entities, either on a one-time or ongoing basis. Mobile redemption centers may operate
independently, or they may be operated in conjunction with another certified redemption
center or a certified processor;
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(23) “On-premises consumption” means consumption of a deposit beverage by a
consumer immediately and within the area under control of the establishment, including
bars, restaurants, passenger ships, and airplanes;
(24) “Overhead allowance” means an amount paid by the program to a certified
redemption center to defray routine or fixed operating costs, such as utilities and
insurance, pursuant to Section 21;
(25) “Person” means an individual, partnership, firm, association, public or
private corporation, federal agency, the state or any of its political subdivisions, trust,
estate or any other legal entity;
(26) “Refillable beverage container” means a beverage container that is intended
to be returned intact to the manufacturer or distributor to be washed, refilled and resold;
that is sold in a container which has a brand name permanently marked on it; and that
bears a manufacturers’ refund value of at least five cents (5¢); and
(27) “Reverse vending machine” means a self-service certified redemption
center, typically located adjacent to a grocery store or similar entity, into which a
consumer feeds empty deposit beverage containers. The machine electronically scans
the container’s bar code, sorts and cancels the container, records the transaction
information, and issues a refund either as cash, electronic credit, a donation to a
designated charity, or a credit slip to be redeemed or accepted as cash by the host
grocery store or similar entity.
SECTION 4.
(a) By September 1, 2011, all deposit beverage distributors operating within the
state shall register with the department of revenue in a manner and form prescribed by
the department of revenue. After September 1, 2011, any person who desires to
conduct business in the state as a deposit beverage distributor shall register with the
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department of revenue no later than thirty (30) days prior to the commencement of the
business.
(b) All deposit beverage distributors shall maintain records reflecting the
manufacture and importation of beverages in deposit beverage containers as well as in
refillable beverage containers. The records shall be made available, upon request, for
inspection by the department of revenue and the department of environment and
conservation; provided, that any proprietary information obtained by either department
shall be kept confidential and shall not be disclosed to any other person, except:
(1) As may be reasonably required in an administrative or judicial
proceeding to enforce this part or any rule adopted pursuant to this part; or
(2) Under an order issued by a court or administrative hearing officer.
SECTION 5.
(a) Beginning October 1, 2011, every deposit beverage distributor shall pay to
the department of revenue a container-recovery fee for each deposit beverage container
manufactured in or imported into this state. The fee shall be imposed only once on the
same deposit beverage container, and shall be implemented in phases as follows:
(1) From October 1, 2011, until June 30, 2012, the amount of the
container-recovery fee shall be one-quarter of one cent ($0.0025) per deposit
beverage container;
(2) From July 1, 2012, until June 30, 2015, the amount of the containerrecovery
fee shall be adjusted to thirty-five thousandths of one cent ($0.00035)
per deposit beverage container; and
(3) Beginning on July 1, 2015, the amount of the container-recovery fee
shall be adjusted to one-eighth of one cent ($0.00125) per deposit beverage
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container and shall remain at that level until changed by an act of the general
assembly.
(b) Payment shall be accompanied by an inventory report, in a manner and form
prescribed by the department of revenue, that identifies the number of beverages in
deposit beverage containers, by container size and type, manufactured in or imported
into the state during the reporting period.
(c) All inventory reports and payments shall be made monthly and received no
later than the fifteenth day of the month following the end of the reporting period.
(d) Payment shall be made by check, money order or electronic deposit to the
"Department of Revenue, State of Tennessee.”
(e) No local government shall impose or collect any assessment or fee on
deposit beverage containers for the same or similar purpose that is the subject of this
part.
SECTION 6.
(a) Beginning March 1, 2013, every deposit beverage distributor shall pay to the
department of revenue a deposit on each deposit beverage container manufactured in or
imported into the state.
(b) The deposit shall be five cents (5¢) and shall remain at that level until
changed by an act of the general assembly.
(c) Payment of the deposit shall be made simultaneously with, and according to
the same terms as, payment of the container-recovery fee as described in Section 5,
subsections (b) through (e).
SECTION 7.
(a) Beginning April 1, 2013, every deposit beverage distributor shall charge the
dealer or consumer a deposit equal to the refund value for each deposit beverage
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container sold in Tennessee. The deposit charge shall appear as a separate line item
on any invoice or sales receipt. None of the deposit charge shall be subject to any state
tax under title 67.
(b) Beginning April 1, 2013, every dealer shall charge the consumer at the point
of sale a deposit equal to the refund value for each deposit beverage container sold in
Tennessee, except on beverages intended for on-premises consumption. The deposit
charge shall appear as a separate line item on any sales receipt or invoice. None of the
deposit charge shall be subject to any state tax under title 67.
SECTION 8.
(a) Beginning April 1, 2013, every deposit beverage container sold in this state
shall have a Tennessee refund value of five cents (5¢). The refund value is the amount
of the deposit required. Once a refund value has been applied to a deposit beverage
container, the deposit on that container may not be changed and may not be collected
more than once.
(b) The refund value shall be clearly printed, embossed, stamped, labeled or
otherwise marked on the container, along with the word “Tennessee” or the letters “TN.”
The names or letters representing other states with comparable deposit legislation may
also be included in the indication of refund value. Other indications may be required as
specified in rules, and in a form and manner prescribed by the commissioner.
(c) Each deposit beverage container shall encode within the universal product
code, or similar machine-readable indicia, information regarding the size and type of
container and the refund value of the container in the states in which the container is
intended to be sold.
(d) Inventory already in circulation on April 1, 2013, shall be affixed or sold with
an adhesive sticker bearing the refund value of the container, the words "Tennessee" or
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the letters "TN," and a bar code bearing the redemption information. These stickers
shall be purchased from the department of revenue by the beverage distributors, who
shall pay the deposit value of five cents (5¢) per sticker.
(e) This section does not apply to any type of refillable beverage container.
SECTION 9.
(a) There is created a fund in the state treasury by the department of revenue to
be known as the “deposit beverage container fund,” referred to in this part as the “fund,”
into which shall be deposited all:
(1) Revenues generated from the container-recovery fee;
(2) Revenues generated from the deposit beverage container deposit;
(3) Interest generated by this fund;
(4) Monetary civil penalties assessed for violations of this part; and
(5) Any public or private grants, donations or allocations to the program
made independent of this act in support of its purposes.
(b) Monies in the fund shall be used to:
(1) Reimburse refund values for deposit beverage containers redeemed
by certified redemption centers pursuant to Section 17;
(2) Pay overhead allowances to certified redemption centers pursuant to
Section 21;
(3) Pay administrative allowances to certified processors pursuant to
Section 22;
(4) Reimburse disposal costs to certified processors pursuant to Section
20;
(5) Pay certified redemption centers or certified processors their share of
fines collected pursuant to Section 29;
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(6) Fund all administrative, accounting, auditing and compliance activities
associated with the deposit beverage container program;
(7) Employ personnel to oversee the implementation of the deposit
beverage container program, including permitting and enforcement activities; and
(8) Defray associated office expenses.
(c) Pursuant to Section 10, monies deposited in the fund shall also be used to:
(1) Reimburse the department of transportation for the loss of funding of
the existing county litter grants program provided for in §§ 41-2-123, 57-5-201,
and 67-4-402, and pursuant to Section 10(1);
(2) Reimburse local governments for any loss in additional revenue that
is not provided for in subdivision (c)(1) and that is attributable, pursuant to
Section 31, to the repeal of Chapter 616 of the Public Acts of 2010 relative to tax
increases imposed by Chapter 307 of the Public Acts of 1981, and extended by
Chapter 769 of the Public Acts of 1984, Chapter 33 of the Public Acts of 1987,
Chapter 30 of the Public Acts of 1991, Chapter 2 of the Public Acts of 1995,
Chapter 81 of the Public Acts of 1999; and Chapter 86 of the Public Acts of 2005.
(d) Monies deposited in the fund may also be used to:
(1) Establish and support certified redemption centers, including
microsite certified redemption centers, pursuant to Section 16;
(2) Support certified processors; and
(3) Provide grants to local governments for solid waste management,
recycling, curbside recycling, litter control and other programs and activities
related to the purposes of this part.
(e) Any monies remaining in the fund at the end of any fiscal year shall escheat
to the state, shall remain in reserve until expended for purposes authorized by or
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consistent with this act, shall not revert to the general fund on any June 30, and shall not
be allocated to any use, nor appropriated for any purpose, not specifically authorized by
this part. Any excess revenues from interest earned by such revenues shall not revert
on any June 30, but shall remain available for expenditure in subsequent fiscal years.
Any unexpended allocation from such reserve shall not revert to the general fund on any
June 30, but shall remain available for expenditure in subsequent fiscal years.
SECTION 10. The following annual allocations shall be made from the fund by the
department of revenue:
(1) A sum sufficient shall be allocated annually from the fund to reimburse the
department of transportation for the loss of funding of the existing county litter grants
program, including funding for litter education and eradication activities by county
governments and Keep Tennessee Beautiful, provided in §§ 41-2-123, 57-5-201, and
67-4-402.
(A) Payment shall be made annually to the department of transportation,
no later than September 1 of each year. The first payment shall be made no
later than September 1, 2012;
(B) The amount of payment shall be based on sales of malt beverages
and soft drinks in Tennessee during the preceding fiscal year, as determined by
tax returns filed with the department of revenue by manufacturers, bottlers,
importers or distributors of malt beverages and soft drinks;
(C) The payment amount shall be equal to the sum of the following
calculations:
(i) Fifty cents (50¢) per taxable barrel of thirty-one liquid gallons
(31 gals.) or partial barrel of malt beverage sold during the payment
period; and
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(ii) Four-tenths of one percent (0.4%) of taxable gross receipts of
soft drinks sold during the payment period; and
(2) A sum sufficient shall be allocated annually to reimburse local governments
for any loss in additional revenue that is not provided for in subsection (a) and pursuant
to Section 31, that is attributable to the repeal of Chapter 616 of the Public Acts of 2010
of the tax increases imposed by Chapter 307 of the Public Acts of 1981, and extended
by Chapter 769 of the Public Acts of 1984, Chapter 33 of the Public Acts of 1987,
Chapter 30 of the Public Acts of 1991, Chapter 2 of the Public Acts of 1995, Chapter 81
of the Public Acts of 1999; and Chapter 86 of the Public Acts of 2005.
SECTION 11.
(a) The deposit beverage container program shall be administered by the
division of solid waste management within the department of environment and
conservation, with accounting functions performed by the department of revenue.
(b) The commissioner shall create a separate administrative entity to meet the
administrative requirements of the deposit beverage container program. This entity shall
be known as the deposit beverage container program and may be established as
follows:
(1) The commissioner may create the entity within the division of solid
waste management, with dedicated positions funded by the deposit beverage
container fund; or
(2) The commissioner may contract the services of a third party to meet
the administrative requirements of the deposit beverage container program. The
costs for these services shall be reimbursed by the deposit beverage container
fund.
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(c) The commissioner of revenue may contract the services of a third party to
meet the accounting requirements of the deposit beverage container program. The
costs for these services shall be reimbursed by the deposit beverage container fund.
(d) The department may produce brochures, web sites, videos and other
promotional materials that the commissioner determines to be necessary to inform the
public about the goals, operations, benefits and outcomes of the deposit beverage
container program.
SECTION 12. The comptroller shall conduct a management and financial audit of the
deposit beverage container program for fiscal years 2012-2013 and 2013-2014, and for each
subsequent fiscal year ending in an even-numbered year. The comptroller shall submit the
audit report, including the amount of unredeemed refund value and recommendations, to the
general assembly and the departments of revenue, environment and conservation on or before
January 2 following the end of the preceding reporting period. The costs incurred by the
comptroller for the audit shall be reimbursed by the deposit beverage container fund. The
comptroller may contract the audit services of a third party to conduct the audit.
SECTION 13. The commissioner and the department of revenue are authorized to
promulgate rules and regulations to effectuate the purposes of this part. All such rules and
regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act,
compiled in title 4, chapter 5.
SECTION 14. Full implementation of the deposit beverage container program shall
commence on April 1, 2013.
SECTION 15. Every dealer shall post a clear and conspicuous sign at each public
entrance to the dealer's place of business, which specifies the names, addresses, phone
numbers and hours of operation of the closest certified redemption centers.
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SECTION 16. The commissioner shall promulgate by rule the definition of an
underserved area with regard to certified redemption centers. If an area is underserved
according to this definition, the department, with input from the affected county, shall use its
best efforts to see that a certified redemption center or microsite certified redemption center is
established in that area. If no other funding is available, monies from the deposit beverage
container fund may be used to establish and support the certified redemption center or microsite
certified redemption center.
SECTION 17.
(a) Prior to participating in the program, any redemption center wishing to
operate in Tennessee shall be certified by the department according to regulations
promulgated by the commissioner. These regulations shall require that all information
submitted to the department be under penalty of perjury. Applications for certification
shall be filed with the department in a form and manner prescribed by the commissioner.
(b) Municipal, metropolitan and county governments, nonprofit organizations,
dealers, businesses, existing scrap dealers and processors and individual persons are
eligible to apply for certification to operate a certified redemption center.
(c) The department shall establish criteria to determine the minimum number of
certified redemption centers needed to adequately serve each county based on
population density, population distribution, consultation with the respective counties and
other factors. The department may use these criteria in issuing certifications.
(d) The department may, at any time, review the certification of a certified
redemption center. After written notice to the person responsible for the establishment
and operation of the certified redemption center, the department, after it has afforded the
certified redemption center operator a hearing in accordance with the Uniform
Administrative Procedures Act, compiled in title 4, chapter 5, may withdraw the
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certification of the center if it finds that there has not been compliance with applicable
laws, rules, permit conditions or certification requirements.
(e) All certified redemption centers shall:
(1) Accept all types of empty deposit beverage containers on which a
Tennessee deposit has been paid;
(2) Accept deposit beverage containers from the public a minimum
number of hours or days per week, according to rules promulgated by the
commissioner;
(3) Maintain redemption areas in full compliance with applicable laws and
according to orders and rules established by the commissioner, including
permitting and certification requirements;
(4) Take reasonable actions to identify, and prevent payment of a refund
value for, any beverage container or other product on which a Tennessee deposit
has not been paid, including containers that the certified redemption center
knows, or ought to know, have been brought into Tennessee from another state;
(5) Determine the quantities of deposit beverage containers by manual
count, electronic scan, weight, volume or other method authorized by the
commissioner, and in a form and manner prescribed by the commissioner;
(6) Pay to the consumer, or to a charity or other recipient designated or
intended by the consumer, an amount not less than the established refund value
for all valid deposit beverage containers;
(7) Maintain a log of consumer transactions, including amounts donated
to a charity or another designated organization, and the name and address of the
charity or organization;
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(8) Sort, consolidate, and, if authorized by the department, cancel the
redeemed deposit beverage containers according to rules promulgated by the
commissioner;
(9) Take reasonable precautions to ensure that redeemed deposit
beverage containers are placed in a secure area while awaiting purchase by a
certified processor;
(10) Ensure that all redeemed deposit beverage containers are
purchased or received by a certified processor. If container material is
purchased, prices paid shall be consistent with prevailing market scrap values,
transportation costs and other factors, and the unit price and total amount paid
shall be noted on transaction receipts. If a container material has a market scrap
value of zero or less than zero, the negative value shall be noted on transaction
receipts, and the payment amount entered as zero;
(11) Provide to the certified processor, or the processor’s agent, a
shipping report, in a form and manner prescribed by the commissioner, and
including, but not limited to, the following information:
(A) The individual-unit quantities, by container type and
collectively, of all deposit beverage containers being received by the
certified processor, and whether quantities in each instance were
determined by manual count, electronic scan, weight, volume or a
combination of these methods;
(B) The amounts paid in refund values for the redeemed deposit
beverage containers, by container type and collectively;
(C) Weight tickets, if applicable;
(D) Printouts of electronic transaction logs, if applicable;
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(12) Prepare, maintain, and provide to the department upon request all
records and documentation of redemption activity, including, but not limited to,
consumer transaction logs, shipping reports, weight tickets, transaction receipts
received from certified processors, electronic transaction printouts as applicable
and any documents authorizing the canceling of redeemed deposit beverage
containers; and
(13) Provide to the department, in a form and manner prescribed by the
commissioner, and no later than October 1 of each year, a summary of
redemption center activity for the preceding fiscal year, including, but not limited
to, quantities of deposit beverage containers redeemed, by container type and
collectively; quantities of refillable deposit beverage containers redeemed; the
name of each certified processor receiving the containers; the dollar amount of
any charitable donations made: and the names and addresses of the recipient
charities.
(f) Any certified redemption center that wishes to cancel redeemed deposit
beverage containers as part of its regular handling procedures shall apply for and
receive authorization to do so from the department, and shall perform and document the
cancellations in a form and manner prescribed by the commissioner.
(g) Any certified redemption center that wishes to accept refillable beverage
containers from consumers shall:
(1) Pay to the consumer the manufacturer’s refund value for the refillable
beverage container;
(2) Record the transaction in the consumer transaction log;
(3) Ensure that the refillable beverage container is received by a certified
processor, a willing purchaser or the originating beverage distributor, who shall
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reimburse the manufacturer’s refund value to the certified redemption center.
The certified redemption center may negotiate with the receiving entity a
reasonable fee to cover the cost of accepting and handling these containers.
(h) The quantity of beverage containers, including refillable beverage containers,
redeemed by a certified redemption center shall be credited to the municipal or county
government where the certified redemption center is located, regardless of the location
of the certified processor that receives the containers, for purposes of calculating solid
waste diversion amounts and meeting regional solid waste reduction goals.
SECTION 18. Reverse vending machines may be used to satisfy the requirements of
Section 17, except that reverse vending machines are not required to accept refillable beverage
containers; provided, that:
(1) The machines accept all types of empty deposit beverage containers that
bear a valid Tennessee refund value;
(2) The machines pay out the full amount of the refund value in the form of cash,
credit slip, electronic credit or designated donation;
(3) The machines are monitored during operating hours by an attendant;
(4) The machines are routinely serviced to ensure proper operation and
continuous acceptance of containers and payment of refunds; and
(5) Should the reverse vending machine fail to accept, recognize or process a
Tennessee deposit beverage container that is otherwise valid, the attendant shall
manually accept the container and issue the appropriate refund value. The reverse
vending machine shall display a toll-free phone number and mailing address that the
consumer may contact if the conflict cannot be resolved or if no attendant is available.
SECTION 19. Certified redemption centers may refuse to pay the refund value on any
deposit beverage container that:
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(1) Is broken, corroded, dismembered or flattened;
(2) Contains a free-flowing liquid;
(3) Does not properly indicate a refund value; or
(4) Contains a significant amount of foreign material.
SECTION 20.
(a) Prior to participating in the program, processors shall be certified by the
department and registered with the department of revenue according to regulations
promulgated by the commissioner. These regulations shall require that all information
submitted to the department or to the department of revenue be under penalty of perjury.
Applications for certification shall be filed with the department in a form and manner
prescribed by the commissioner. Applications for registration shall be filed with the
department of revenue in a form and manner prescribed by the commissioner of
revenue.
(b) The department may at any time review the certification of a certified
processor. After written notice to the person of record responsible for the establishment
and operation of the certified processor, the department, after it has afforded the certified
processor operator a hearing in accordance with the Uniform Administrative Procedures
Act, compiled in title 4, chapter 5, may withdraw the certification of the facility if it finds
that there has not been compliance with applicable laws, rules, permit conditions, or
certification requirements.
(c) Certified processors shall:
(1) Accept from certified redemption centers all types of deposit
beverage containers that have been redeemed, quantified, sorted and, if
authorized, canceled in accordance with program rules, and that are
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accompanied by a shipping report prepared by the certified redemption center in
accordance with program rules;
(2) Perform a random sampling or samplings, in a form and manner
prescribed by the commissioner, of the redeemed deposit beverage containers,
to ascertain that they bear a valid Tennessee refund value;
(3) Independently determine quantities of each type of deposit beverage
container, either by manual count, electronic scan, volume, weight or a
combination of these methods, according to standards, averages and rules
prescribed by the commissioner; and document the quantities in a form and
manner prescribed by the commissioner;
(A) If a significant discrepancy exists between the quantities
determined by the certified processor and the quantities stated on the
shipping report prepared by the certified redemption center, or if a
random sampling of redeemed beverage containers shows a significant
proportion of beverage containers that do not bear a valid Tennessee
refund value, the certified processor may withhold payment to the certified
redemption center, or the department of revenue may withhold payment
to the certified processor, pending further investigation by the department,
according to procedures prescribed by the commissioner.
(B) The commissioner shall establish by rule what constitutes
“significant discrepancy” and “significant proportion” relative to this
subdivision (3);
(4) Cancel the redeemed deposit beverage containers, if they have not
already been canceled;
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(5) Process the containers as needed for remanufacturing or for sale to a
willing purchaser; except that:
(A) If, after making a good-faith effort, a certified processor is
unable to locate a willing purchaser or recipient for a specific beverage
container material, the certified processor shall submit to the department
a disposal request form, in a form and manner prescribed by the
department, that describes the material and quantities, details any efforts
made to find a willing purchaser or recipient and specifies the intended
manner and location of disposal. The material shall not be disposed of
without a written authorization to do so by the department, and shall be
available for and subject to inspection by the department;
(B) The certified processor may recover costs associated with
handling and disposing of the material by presenting to the department of
revenue a written request for reimbursement in a form and manner
prescribed by the commissioner and accompanied by the disposal
authorization and all associated receipts. The commissioner shall
establish by rule what constitutes “good-faith effort” relative to this
subdivision (5).
(6) Issue payment to certified redemption centers, as follows:
(A) The amount of payment shall be the sum of all of the following
amounts:
(i) The collective refund values of the redeemed deposit
beverage containers received from the certified redemption
center;
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(ii) The overhead allowance due, pursuant to Section 21;
and
(iii) Payment for the container materials in an amount that
reflects and is consistent with prevailing market scrap prices,
incurred transportation or delivery costs and other factors.
(B) Payment shall be made to the certified redemption center
within ten (10) business days, unless a significant discrepancy exists
pursuant to subdivision (c)(3), in which case payment may be withheld
pending the outcome of an investigation by the department, according to
procedures prescribed by the commissioner.
(7) Provide to the certified redemption center a transaction receipt,
prepared in a form and manner prescribed by the commissioner, and including,
at a minimum, the following information:
(A) The per-unit quantities, by container type and collectively, of
deposit beverage containers received from the certified redemption
center, and whether quantities in each instance were determined by
manual count, electronic scan, volume, weight or a combination of these
methods;
(B) The weight, by container type and collectively, of deposit
beverage containers received from the certified redemption center;
(C) The amounts paid in refund values to the certified redemption
center, by container type and collectively;
(D) The amount paid as overhead allowance to the certified
redemption center; and
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(E) The amounts paid in scrap values for each type of deposit
beverage container purchased from the certified redemption center.
Container material with a market value of zero or less than zero shall be
noted, and the payment entered as zero.
(8) Submit to the department of revenue, pursuant to Section 23 and in a
form and manner prescribed by the commissioner, a processor’s invoice for
reimbursement or payment of refund values, overhead allowance and
administrative allowance for each separate transaction with a certified
redemption center;
(9) For any refillable beverage containers received from the certified
redemption center, reimburse the manufacturer’s refund value to the certified
redemption center and ensure that the refillable beverage containers are
returned to the originating beverage distributor or sold to a willing purchaser.
The certified processor may negotiate a reasonable fee with the originating
distributor or willing purchaser to cover the cost of accepting and handling these
containers; and
(10) Maintain copies of all documentation, including, but not limited to,
shipping reports, weight tickets, transaction receipts, requests-for-disposal and
end-market information, and make them available, upon request, to the
departments of revenue and environment and conservation.
SECTION 21.
(a) Beginning April 1, 2013, the department of revenue shall pay to a certified
redemption center, by agency of a certified processor pursuant to Section 23(a)(2), an
overhead allowance for each transaction conducted in accordance with regulations and
standards established by the commissioner.
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(b) The amount of the overhead allowance shall be twenty percent (20%) of total
refund values paid during the period covered by the transaction, as reported to the
department of revenue in the processor’s invoice pursuant to Section 23(a)(1), and shall
remain at that level until changed by the commissioner in response to either of the
following conditions:
(1) If monies in the fund decrease to a level at which the fund can no
longer sustain in the long term an overhead allowance of twenty percent (20%) of
refund values, the percentage shall be reduced by the commissioner, in
consultation with the commissioner of revenue, and according to terms
promulgated by the commissioner by rule;
(2) If monies in the fund increase to a level at which the fund can sustain
in the long term an overhead allowance greater than twenty percent (20%) of
refund values, the percentage may be increased by the commissioner, in
consultation with the commissioner of revenue, and according to terms
promulgated by the commissioner by rule.
SECTION 22.
(a) Beginning April 1, 2013, the department of revenue shall pay to a certified
processor an administrative allowance for each transaction conducted in accordance
with regulations and standards established by the commissioner to defray the certified
processor’s costs of complying with the administrative requirements of this program.
(b) The amount of the administrative allowance shall be two percent (2%) of total
refund values paid during the period covered by the transaction, as reported to the
department of revenue in the processor’s invoice pursuant to Section 23(a)(1). If monies
in the fund increase to a level at which the fund can sustain in the long term an
administrative allowance greater than two percent (2%) of refund values, the percentage
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may be increased by the commissioner, in consultation with the commissioner of
revenue, and according to terms promulgated by the commissioner by rule. If monies in
the fund should subsequently decline to a level at which the fund can no longer sustain
the increase, the percentage may be reduced by the commissioner, in consultation with
the commissioner of revenue and according to terms promulgated by the commissioner
by rule, but in no case shall it be reduced below two percent (2%).
SECTION 23.
(a) Beginning April 1, 2013, for every completed transaction with a certified
redemption center, a certified processor shall submit to the department of revenue a
processor’s invoice for an amount equal to the sum of all of the following:
(1) The total amount of refund values paid by the certified processor to
the certified redemption center, pursuant to Section 20(c)(6)(A)(i);
(2) The overhead allowance paid by the certified processor to the
certified redemption center, pursuant to Section 21; and
(3) The administrative allowance due to the certified processor, pursuant
to Section 22.
(b) The processor’s invoice shall be accompanied by supporting documentation
that shall include, but not be limited to:
(1) A copy of the transaction receipt prepared by the certified processor;
(2) A copy of the shipping report prepared by the certified redemption
center; and
(3) Where applicable, a printout of any electronic transaction logs.
(c) The processor’s invoice shall be submitted to the department of revenue
within thirty (30) days following payment to a certified redemption center.
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(d) The department of revenue shall issue payment to the certified processor
within ten (10) business days of receipt of a properly submitted invoice, unless a
discrepancy is noted pursuant to Section 20(c)(3), in which case payment may be
withheld pending investigation by the department, according to procedures prescribed by
the commissioner.
SECTION 24. Deposit beverage distributors, certified redemption centers and certified
processors shall, upon request and under penalty of perjury, make their records available for
inspection by the departments of revenue, environment and conservation, duly authorized
agents of these departments, the comptroller, or the comptroller’s auditor.
SECTION 25. The department, in consultation with the department of revenue, shall
compile a report on the deposit beverage container program for each fiscal year, except that the
first report shall be for the period from October 1, 2011 through June 30, 2013. These reports
shall be delivered to the general assembly and the governor on January 2 following the end of
the preceding reporting period. Reports shall contain, but not be limited to:
(1) Performance indicators;
(2) Revenues and expenditures;
(3) Measures of effectiveness, including recycling rates and impacts on litter;
and
(4) Economic impacts, including numbers of certified redemption centers,
number of jobs supported or created, and tonnage, market value and end uses of
recovered materials.
SECTION 26.
(a) The commissioner shall convene an advisory committee to assist it in
developing any rules needed to implement this part. The commissioner shall select
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members of the committee so as to obtain input from state agencies, as well as from
representatives of any or all of the following:
(1) Bottlers;
(2) Consumers;
(3) Counties, including county sheriffs’ departments;
(4) Dealers;
(5) Distributors;
(6) Importers;
(7) Keep Tennessee Beautiful;
(8) Manufacturers and end-users;
(9) Municipalities;
(10) Nonprofit organizations;
(11) Recyclers, including scrap dealers and providers of curbside
recycling;
(12) Redemption centers;
(13) Redemption-service providers;
(14) Solid waste professionals; or
(15) Others as recommended by the commissioner.
(b) Members of the committee shall be appointed by the commissioner and shall
serve at the commissioner’s pleasure. A simple majority of the committee members
shall constitute a quorum for the purposes of recommending rules and providing input to
the commissioner.
SECTION 27. Except as provided otherwise in Section 29, any person who violates this
part or any rule adopted pursuant to this part shall be assessed a civil penalty of not more than
ten thousand dollars ($10,000) for each separate offense. This penalty shall be assessed by
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the commissioner pursuant to Section 28. Each day of each violation shall constitute a separate
offense. Any action taken to impose or collect the penalty provided for in this section shall be
made through administrative or civil actions.
SECTION 28.
(a) If the commissioner determines that any person has violated or is violating
this part, any rule adopted pursuant to this part, or any term or condition of a certification
or permit issued pursuant to this part, the commissioner may do any one (1) or more of
the following:
(1) Issue a field citation assessing a civil penalty and ordering corrective
action immediately or within a specified time;
(2) Issue an order assessing a civil penalty for any past or current
violation;
(3) Require compliance immediately or within a specified time; and
(4) Commence a civil action in chancery or circuit court in Davidson
County, to seek appropriate relief, including a temporary, preliminary or
permanent injunction against violations of this part, the imposition and collection
of civil penalties or other relief.
(b) Any order issued pursuant to this section may include a suspension,
modification or revocation of a certification or permit issued pursuant to this part and
shall state with reasonable specificity the nature of the violation.
(c) Any order issued under this part shall become final unless the person or
persons named in the order request, in writing and not later than twenty (20) days after
the notice of order is served, a hearing before the commissioner. Any penalty imposed
pursuant to this part shall become due and payable twenty (20) days after the notice of
penalty is served, unless the person named in the order requests in writing a hearing
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before the commissioner. Whenever a hearing is requested on any penalty imposed
pursuant to this part, the penalty shall become due and payable upon the issuance of a
final order confirming the penalty in whole or in part.
(d) Any hearing conducted pursuant to this section shall be conducted as a
contested case pursuant to the Uniform Administrative Procedures Act, compiled in title
4, chapter 5. If, after a hearing held pursuant to this section, the commissioner finds that
a violation or violations have occurred, the commissioner shall:
(1) Affirm or modify any penalties imposed or modify or affirm the order
previously issued; or
(2) Issue an appropriate order or orders for the prevention, abatement or
control of the violation involved, or for the taking of other corrective action as may
be appropriate.
(e) If, after a hearing on an order or penalty contained in a notice, the
commissioner finds that no violation has occurred or is occurring, the commissioner shall
rescind the order or penalty. Any order issued after a hearing may prescribe the date or
dates by which the violation or violations shall cease and may prescribe timetables for
necessary action in preventing, abating or controlling the violation.
(f) If the amount of any penalty is not paid to the department within thirty (30)
days after an order becomes final, the commissioner may institute a civil action in the
name of the state to collect the final penalty amount. In any proceeding to collect the
civil penalty imposed, the commissioner need only show that:
(1) Notice was given;
(2) A hearing was held or the time granted for requesting a hearing
expired without a request for a hearing;
(3) The civil penalty was imposed; and
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(4) The penalty remains unpaid.
(g) In connection with any hearing held pursuant to this section, the
commissioner shall have the power to subpoena the attendance of witnesses and the
production of evidence on behalf of all parties.
SECTION 29.
(a) The obligations to accept empty beverage containers and pay the refund
value as described in this part apply only to containers originally sold in this state as
filled deposit beverage containers.
(b) It is an offense for a person who, during any single transaction, tenders or
tries to tender to a certified redemption center more than twenty-four (24) empty
beverage containers that the person knows or has reason to know were not originally
sold in this state as filled deposit beverage containers. A violation of this subsection (b)
is a Class A misdemeanor with fines as provided in subsection (d).
(c) Certified redemption centers shall conspicuously display a sign in letters that
are at least one (1) inch in height with the following information: “WARNING: Persons
tendering containers for redemption that were not originally purchased in Tennessee
may be subject to a fine of the greater of one hundred dollars ($100) per container or
twenty-five thousand dollars ($25,000) for each tender.”
(d) A person who violates this section is subject to a fine of up to the greater of
one hundred dollars ($100) for each container or twenty-five thousand dollars ($25,000)
for each tender of more than twenty-four (24) containers.
(e) The balance of each fine collected pursuant to this section, after deducting
court costs, shall be placed in the deposit beverage container fund and shall remain in
the fund to be expended for activities authorized by this part; except, that if the violation
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was detected and reported by a certified redemption center or a certified processor, then
the fine shall be disposed of as follows:
(1) Fifty percent (50%) of the fine shall remain in the fund to be expended for
activities authorized by this part; and
(2) Fifty percent (50%) of the fine shall be awarded to the certified redemption
center or certified processor reporting the violation as an incentive to be vigilant for and
respond to illegal tenders or attempts to otherwise defraud the program.
SECTION 30. This part shall not be construed to be an appropriation of funds and no
funds shall be obligated or expended pursuant to this part unless such funds are specifically
appropriated by the general appropriations act.
SECTION 31. Chapter 616, Section 1, of the Public Acts of 2010 is amended by
deleting the language “June 30, 2016, or until June 30 of any year following the enactment of
any state or federal law which imposes mandatory deposits by consumers on beverage
containers sold in Tennessee” and by substituting instead the language “June 30, 2011.”
SECTION 32. This act shall take effect upon becoming a law, the public welfare
requiring it.