GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2003

H                                                                                                                                                    1

HOUSE BILL 878*

Short Title:     Establish Electronics Recycling Program.		(Public)
Sponsors:	Representatives Hackney;  Alexander, Luebke, and Weiss.
Referred to:	Finance.

April 7, 2003

A BILL TO BE ENTITLED

AN ACT to establish a recycling program for certain electronic devices and to impose a tax on those devices in order to fund the program and to provide local governments with funds to enable them to recycle electronic devices.

Whereas, the leaching of lead from cathode ray tubes in landfills is a concern for the future protection of human health and the environment; and

Whereas, the electronics waste stream is growing rapidly in volume and complexity and may account for as much as seventy percent (70%) of the toxic heavy metals found in solid waste landfills; and

Whereas, local government‑operated programs are an efficient way to divert electronics from disposal and to provide recycling services to citizens across the State; and

Whereas, the development of local programs is hindered by the high costs of marketing collected cathode ray tubes and other electronics; and

Whereas, no other system currently exists, either provided by electronics manufacturers, retailers, or others, to adequately serve North Carolinians and to divert large quantities of electronics from disposal; and

Whereas, it is already illegal for businesses to dispose of cathode ray tubes in landfills in North Carolina, but small- and medium-sized businesses lack practical electronics recycling options; and

Whereas, the recycling of electronic wastes recovers valuable materials for reuse and will create jobs and tax base in North Carolina; Now, therefore,

The General Assembly of North Carolina enacts:

SECTION 1.  Chapter 105 of the General Statutes is amended by adding a new Article to read:

"Article 5G.

"Electronics Recycling Tax.

"§ 105-187.60.  Definitions.

(a) The definitions in G.S. 105-164.3 apply to this Article, except that the term 'sale' does not include lease or rental.

(b) As used in this Article:

(1) 'Electronic device' means an item containing a cathode ray tube.

"§ 105-187.61.  Tax imposed.

A privilege tax is imposed on an electronic device retailer at a flat rate for each new electronic device that is sold by the retailer. An excise tax is imposed on a new electronic device purchased outside the State for storage, use, or consumption in this State. The rate of the privilege tax and the excise tax is ten dollars ($10.00). These taxes are in addition to all other taxes.

"§ 105-187.62.  Administration.

The privilege tax this Article imposes on an electronic device retailer is an additional State sales tax, and the excise tax this Article imposes on the storage, use, or consumption of a new electronic device in this State is an additional State use tax. Except as otherwise provided in this Article, these taxes shall be collected and administered in the same manner as the State sales and use taxes imposed by Article 5 of this Chapter. As under Article 5 of this Chapter, the additional State sales tax paid when a new electronic device is sold at retail is a credit against the additional State use tax imposed on the storage, use, or consumption of the same electronic device.

"§ 105-187.63.  Exemptions and refunds.

Except for the exemption provided in G.S. 105-164.13(17), the exemptions in G.S. 105-164.13 do not apply to the taxes imposed by this Article. The refunds allowed in G.S. 105-164.14 do not apply to the taxes imposed by this Article.

"§ 105-187.64.  Use of tax proceeds.

The Secretary shall distribute the taxes collected under this Article, less the Department of Revenue's allowance for administrative expenses, in accordance with this section. The Secretary may retain the Department's cost of collection, not to exceed two hundred twenty-five thousand dollars ($225,000) a year, as reimbursement to the Department. Each quarter, the Secretary shall credit the net tax proceeds to the Electronics Recycling Account.

"§§ 105-187.65 through 105-187.69: Reserved for future codification purposes."

SECTION 2.  Article 9 of Chapter 130A of the General Statutes is amended by adding a new Part to read:

"Part 2E. Electronics Recycling Act of 2003.

"§ 130A-309.90.  Title.

This Part may be cited as the 'North Carolina Electronics Recycling Act of 2003'.

"§ 130A-309.91.  Definitions.

Unless a different meaning is required by the context, the following definitions shall apply throughout this Part:

(1) Electronic device. – An item containing a cathode ray tube.

(2) Eligible device. – An electronic device owned and discarded by a household or business at a rate of no more than five per quarter or on which the owner of the electronic device can show proof that the electronics recycling tax has been paid.

"§ 130A-309.92.  Management of electronic devices.

A unit of local government that implements an electronics recycling program as a part of its solid waste management plan adopted pursuant to G.S. 130A-309.09A shall be eligible to receive reimbursement from the Electronics Recycling Account. The amount of the reimbursement shall be the amount equal to ten dollars ($10.00) for each eligible device recycled by the unit of local government for that quarter. The Department shall reimburse a unit of local government only after receiving a statement certified by the county finance officer that includes the number of eligible devices recycled by the unit of local government for that quarter. A unit of local government that receives reimbursement from the Electronics Recycling Account shall not charge a fee for the recycling of eligible devices. A unit of local government may contract with another unit of local government or a private entity in accordance with Article 15 of Chapter 153A of the General Statutes to provide for the recycling of discarded electronics. A contracting party that receives reimbursement from the Electronics Recycling Account shall not charge a fee for the recycling of eligible devices under that contract.

"§ 130A-309.93.  Use of reimbursements.

A unit of local government may use reimbursements from the Electronics Recycling Account to offset any of the following:

(1) Collection and transportation of discarded electronics.

(2) Recycling processing fees.

(3) Costs of educating citizens about its electronics recycling program.

"§ 130A-309.94.  Electronics Recycling Account.

(a) The Electronics Recycling Account is established within the Department. The Account consists of revenue credited to the Account from the proceeds of the electronics recycling tax imposed by Article 5G of Chapter 105 of the General Statutes.

(b) Funds in the Account shall be allocated and used as follows:

(1) Seventy-seven percent (77%) for reimbursement of units of local government.

(2) Ten percent (10%) for supplemental grant funding to units of local government to help initiate local programs, enhance existing local electronics recycling services, and encourage regionalization of local electronics programs.

(3) Seven percent (7%) for revolving loans for the development of private recycling businesses.

(4) Three percent (3%) for grants for research and development of more environmentally responsible electronics.

(5) Three percent (3%) to the Department for the administration of the public education and local government assistance program pursuant to G.S. 130A-309.96.

"§ 130A-309.95.  Effect of local ordinance.

This Part preempts any local ordinance regarding the management of discarded electronics to the extent, and only to the extent, that the local ordinance is inconsistent with this Part or the rules adopted pursuant to this Part.

"§ 130A-309.96.  Duties of Department.

(a) Public Education. – The Department shall educate the public on the environmental benefits of recycling electronics. This public education effort shall include point-of-sale education.

(b) Local Government Assistance. – The Department shall provide assistance to units of local government developing electronics recycling programs. As part of this assistance, the Department shall assist with the coordination of regional recovery efforts for electronics.

(c) State Term Recycling Contract. – The Department shall assist the Department of Administration in establishing a State term recycling contract with electronics recycling processors that may be used by local governments.

(d) Revolving Loan Fund Program. – The Department shall develop and implement a revolving loan fund program, utilizing the funds allocated pursuant to G.S. 130A-309.94(b)(3), for the development of private recycling businesses.

(e) Supplemental Grant Program. – The Department shall develop and implement a supplemental grant program, utilizing the funds allocated pursuant to G.S. 130A‑309.94(b)(2), to encourage and enhance the establishment of electronics recycling programs.

(f) Environmentally Responsible Electronics. – The Department shall develop and implement a grant program, utilizing the funds allocated pursuant to G.S. 130A‑309.94(b)(4), for research and development of more environmentally responsible electronics.

(g) Procurement Contracts. – The Department shall provide technical assistance to the Department of Administration and to units of local government in the development of procurement requirements for recycled content for electronics and preferential treatment of vendors and manufacturers that utilize environmentally responsible manufacturing processes or that utilize sustainable product stewardship programs.

"§ 130A-309.97.  Annual report.

The Department shall include in the report to be delivered to the Environmental Review Commission on or before 15 January of each year pursuant to G.S. 130A‑309.06(c) a description of the management of discarded electronics in the State for the fiscal year ending the preceding 30 June. The description of the management of electronics shall include all of the following information:

(1) An evaluation of the implementation of the Electronics Recycling Act of 2003.

(2) The amount of taxes collected and distributed under G.S. 105-187.61 during the period covered by the report.

(3) The beginning and ending balances of the Electronics Recycling Account for the period covered by the report and a list of reimbursements made from the Account for the period.

(4) Any other information the Department considers helpful in understanding the problem of managing electronics.

"§§ 130A-309.98 through 130A-309.99:  Reserved for future codification purposes."

SECTION 3.  G.S. 130A‑309.06(c) reads as rewritten:

"(c)      The Department shall report to the Environmental Review Commission on or before 15 January of each year on the status of solid waste management efforts in the State. The report shall include:

(1)       A comprehensive analysis, to be updated in each report, of solid waste generation and disposal in the State projected for the 20‑year period beginning on 1 July 1991.

(2)       The total amounts of solid waste recycled and disposed of and the methods of solid waste recycling and disposal used during the calendar year prior to the year in which the report is published.

(3)       An evaluation of the development and implementation of local solid waste management programs and county and municipal recycling programs.

(4)       An evaluation of the success of each county or group of counties in meeting the municipal solid waste reduction goal established in G.S. 130A‑309.04.

(5)       Recommendations concerning existing and potential programs for solid waste reduction and recycling that would be appropriate for units of local government and State agencies to implement to meet the requirements of this Part.

(6)       An evaluation of the recycling industry, the markets for recycled materials, the recycling of polystyrene, and the success of State, local, and private industry efforts to enhance the markets for these materials.

(7)       Recommendations to the Governor and the Environmental Review Commission to improve the management and recycling of solid waste in the State, including any proposed legislation to implement the recommendations.

(8)       A description of the condition of the Solid Waste Management Trust Fund and the use of all funds allocated from the Solid Waste Management Trust Fund, as required by G.S. 130A‑309.12(c).

(9)       A description of the review and revision of bid procedures and the purchase and use of reusable, refillable, repairable, more durable, and less toxic supplies and products by both the Department of Administration and the Department of Transportation, as required by G.S. 130A‑309.14(a1)(3).

(10)     A description of the implementation of the North Carolina Scrap Tire Disposal Act that includes the beginning and ending balances in the Scrap Tire Disposal Account for the reporting period, the amount credited to the Scrap Tire Disposal Account during the reporting period, and the amount of revenue used for grants and to clean up nuisance tire collection sites, as required by G.S. 130A‑309.63(e).

(11)     A description of the management of white goods in the State, as required by G.S. 130A‑309.85.

(12)     A summary of the report by the Department of Transportation on the amounts and types of recycled materials that were specified or used in contracts that were entered into by the Department of Transportation during the previous fiscal year, as required by G.S. 136‑28.8(g).

(13)     A summary of the reports by each State department, institution, agency, community college, and local school administrative unit authorized to purchase materials and supplies detailing the amounts and types of materials and supplies with recycled content that were purchased during the previous fiscal year and the progress toward reaching the goals under G.S. 143‑58.3, as required by G.S. 143‑58.2(f).

(14) A description of the management of electronics in the State, as required by G.S. 130A-309.97."

SECTION 4.  G.S. 130A‑309.94, as enacted by Section 2 of this act, reads as rewritten:

"§ 130A-309.94. Electronics Recycling Account.

(a)       The Electronics Recycling Account is established within the Department. The Account consists of revenue credited to the Account from the proceeds of the electronics recycling tax imposed by Article 5G of Chapter 105 of the General Statutes.

(b)       Funds in the Account shall be allocated and used as follows:

(1)       Seventy-seven percent (77%) Eighty-four percent (84%) for reimbursement of units of local government.

(2)       Ten percent (10%) for supplemental grant funding to units of local government to help initiate local programs, enhance existing local electronics recycling services, and encourage regionalization of local electronics programs.

(3) Seven percent (7%) for revolving loans for the development of private recycling businesses.

(4)       Three percent (3%) for grants for research and development of more environmentally responsible electronics.

(5)       Three percent (3%) to the Department for the administration of the public education and local government assistance program pursuant to G.S. 130A-309.96."

SECTION 5.  G.S. 130A‑309.96(d) is repealed.

SECTION 6.  G.S. 130A‑309.92, as enacted by Section 2 of this act, reads as rewritten:

"§ 130A‑309.92.  Management of electronic devices.

A unit of local government that contracts with a recycling processor certified by the Department pursuant to G.S. 130A-309.96(d) and that implements an electronics recycling program as a part of its solid waste management plan adopted pursuant to G.S. 130A‑309.09A shall be eligible to receive reimbursement from the Electronics Recycling Account. The amount of the reimbursement shall be the amount equal to ten dollars ($10.00) for each eligible device recycled by the unit of local government for that quarter. The Department shall reimburse a unit of local government only after receiving a statement certified by the county finance officer that includes the number of eligible devices recycled by the unit of local government for that quarter. A unit of local government that receives reimbursement from the Electronics Recycling Account shall not charge a fee for the recycling of eligible devices. A unit of local government may contract with another unit of local government or a private entity in accordance with Article 15 of Chapter 153A of the General Statutes to provide for the recycling of discarded electronics. A contracting party that receives reimbursement from the Electronics Recycling Account shall not charge a fee for the recycling of eligible devices under that contract."

SECTION 7.  G.S. 130A‑309.96, as enacted by Section 2 of this act, is amended by adding the following subsection to read:

"(h) Electronics Recycling Processor Certification. – The Department shall establish criteria for the certification of electronics recycling processors and shall implement a program to certify processors. This criteria shall require electronics recycling processors to recycle electronics in compliance with all applicable laws for the protection of the environment. This criteria shall favor the domestic recycling of electronics."

SECTION 8.  G.S. 130A‑309.10(f) reads as rewritten:

"(f)      No person shall knowingly dispose of any of the following solid wastes in landfills:

(1)       Repealed by Session Laws 1991, c. 375, s. 1.

(2)       Used oil.

(3)       Yard trash, except in landfills approved for the disposal of yard trash under rules adopted by the Commission. Yard trash that is source separated from solid waste may be accepted at a solid waste disposal area where the area provides and maintains separate yard trash composting facilities.

(4)       White goods.

(5)       Antifreeze (ethylene glycol).

(6)       Aluminum cans.

(7)       Whole scrap tires, as provided in G.S. 130A‑309.58(b). The prohibition against landfilling whole tires applies to all whole pneumatic rubber coverings, but does not apply to whole solid rubber coverings.

(8)       Lead‑acid batteries, as provided in G.S. 130A‑309.70.

(9) Electronic devices as defined in G.S. 130A-309.91."

SECTION 9.  G.S. 130A‑309.10(f1) reads as rewritten:

"(f1)    No person shall knowingly dispose of any of the following solid wastes by incineration in an incinerator for which a permit is required under this Article:

(1)       Antifreeze (ethylene glycol) used solely in motor vehicles.

(2)       Aluminum cans.

(3)       Repealed by Session Laws 1995 (Regular Session, 1996), c. 594, s. 17.

(4)       White goods.

(5)       Lead‑acid batteries, as provided in G.S. 130A‑309.70.

(6) Electronic devices as defined in G.S. 130A-309.91."

SECTION 10.  Sections 1, 2, 3, and 10 of this act become effective 1 January 2004.  Sections 4 and 5 of this act become effective 1 July 2006.  Sections 6, 7, 8, and 9 of this act become effective 1 January 2007.  The Department of Environment and Natural Resources shall make reimbursements to units of local government under Part 2E of Article 9 of Chapter 130A of the General Statutes, as enacted by Section 2 of this act, beginning on 1 July 2004.