House Bill 1765-First Edition

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2005

H 1

HOUSE BILL 1765

Short Title: Electronics Waste/Mgmt. Plans/Manf. Tax.		(Public)
Sponsors:	Representatives Hackney; Glazier, Harrison, Luebke, and Weiss.
Referred to:	Environment and Natural Resources, if favorable, Finance.

May 12, 2005

A BILL TO BE ENTITLED

AN ACT to establish a recycling program for certain electronic devices, To require manufacturers of electronic devices to either (1) develop and implement product management plans for the proper reuse or RECYCLING of discarded electronic devices and to pay an annual program fee or (2) To pay a tax on the sale of electronic devices sold in the state in order to fund the program, and to provide local governments with funds to enable them to recycle electronic devices.

Whereas, the leaching into groundwater of lead from cathode ray tubes and other forms of electronic waste in landfills is a major 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 70% of the toxic heavy metals found in solid waste landfills; and

Whereas, local government‑operated programs are an efficient way to divert electronics waste 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 handling collected cathode ray tubes and other electronics waste; and

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

Whereas, the responsibility for the environmentally sound management and product stewardship of end‑of‑life electronic devices ought to be substantially borne by the manufacturers of electronic devices; 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 set out in G.S. 105‑164.3 apply to this Article, except that the term 'sale' does not include lease or rental.

(b) The definitions set out in G.S. 130A‑309.91 apply to this Article.

"§ 105‑187.61. Tax imposed.

A privilege tax is imposed on a manufacturer of electronic devices who does not comply with the provisions of G.S. 130A‑309.92 for electronic devices that are sold by the manufacturer in this State. An excise tax is imposed on a manufacturer of electronic devices who does not comply with the provisions of G.S. 130A‑309.92 for electronic devices purchased outside the State for storage, use, or consumption in this State. The rate of the privilege tax and the excise tax is one percent (1%) of the retail cost of the electronic devices. These taxes are in addition to all other taxes.

"§ 105‑187.62. Administration.

The privilege tax this Article imposes on a manufacturer of electronic devices 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 2005.

"§ 130A‑309.90. Title.

This Part may be cited as the 'North Carolina Electronics Recycling Act of 2005'.

"§ 130A‑309.91. Definitions.

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

(1) Electronic device. – A computer central processing unit whether sold alone or with accessories; computer monitor; laptop computer; and television with a video display that has a viewable area greater than nine inches when measured diagonally.

(2) Manufacturer. – Any person, firm, association, partnership, corporation, governmental entity, organization, combination, or joint venture that is the last person in the production or assembly process of an electronic device that is sold in this State.

"§ 130A‑309.92. Management of electronic devices; product management plans.

(a) A manufacturer of electronic devices sold within this State shall develop a product management plan prepared pursuant to this section and submit the plan to the Department for review and approval. Manufacturers of electronic devices may develop and submit a plan either individually or as part of a group of manufacturers. Manufacturers of electronic devices who do not comply with the requirements of this section must pay the privilege or excise tax as provided by G.S. 105‑187.61 and submit a notice to the Department of their intention to pay the tax in lieu of implementation of a product management plan.

(b) No electronic device shall be sold in this State unless the device is labeled with the following information or is accompanied by written material to be provided to the user of the device that contains the following information: (i) a notice of the prohibition on the disposal of electronic devices under G.S. 130A‑309.10(f)(9); and (ii) a toll‑free telephone number or the address of an Internet site so that consumers of electronic devices can obtain information and instructions about properly discarding the electronic devices through the manufacturer's program.

(c) The product management plan prepared and submitted pursuant to this section shall include at a minimum all of the following:

(1) Provisions under which the manufacturer finances the collection; transportation; and reuse, recycling, treatment, or disposal of electronic devices that are discarded in this State in a manner that is consistent with all requirements of State law and that is designed to achieve the following recovery rates:

a. Within three years after the implementation of the plan, a number of electronic devices equal to at least fifty percent (50%) of the number of the manufacturer's electronic devices sold at retail annually in this State shall be collected for reuse or recycling.

b. Within six years after the implementation of the plan, a number of electronic devices equal to at least seventy‑five percent (75%) of the number of the manufacturer's electronic devices sold at retail annually in this State shall be collected for reuse or recycling.

c. Within 10 years after the implementation of the plan, a number of electronic devices equal to at least ninety percent (90%) of the number of the manufacturer's electronic devices sold at retail annually in this State shall be collected for reuse or recycling.

(2) Provisions for meeting the labeling requirements under subsection (b) of this section.

(3) Provisions for consumer education that include educational activities designed to ensure that consumers of electronic devices are informed of all of the following:

a. The prohibition on the disposal of electronic devices under G.S. 130A‑309.10(f)(9).

b. The dangers of improper disposal of electronic devices.

c. The available options for properly discarding electronic devices including those under the manufacturer's program.

d. The responsibility of consumers of electronic devices to ensure the reuse, recycling, or proper disposal of electronic devices.

(4) Provisions for providing information to persons who recycle or disassemble the manufacturer's electronic devices that are designed to ensure that the recycling or disassembly is conducted in a manner that protects worker health and safety and that is environmentally sound.

(5) Provisions that ensure all of the following:

a. That an electronic device collected under the plan that is not in working order is not exported to any country that is not a member of the Organization for Economic Cooperation and Development.

b. That an electronic device collected under the plan that is in working order is not exported to any country that is not a member of the Organization for Economic Cooperation and Development unless the manufacturer or a person participating in the manufacturer's program certifies to the Department that the electronic waste is in working order and is destined for direct reuse.

(6) Provisions to ensure that return of electronic devices by consumers for recycling or reuse is at least as convenient as the purchase and delivery of new electronic devices by consumers through either:

a. Return of an electronic device to a location where the device is sold for recycling, at no cost to the consumer.

b. Processes for mail or shipment of an electronic device to a recycler, at no cost to the consumer.

(d) A manufacturer who develops and implements a product management plan pursuant to this section shall maintain records of:

(1) The number of electronic devices that were sold in the State in the previous year.

(2) The number and weight of electronic devices collected in the State in the previous year for reuse and recycling.

(3) The weight and description of collected material that is reused and recycled from recovered electronic devices.

(4) The capture rate of electronic devices for reuse and recycling based on State sales.

(e) Each manufacturer shall provide to the Department an annual report on its product management plan. The report shall include, at a minimum:

(1) The information required by subsection (d) of this section.

(2) Information on the end markets for major constituents of the recovered electronic devices.

(3) Other information the Department requires.

(f) A manufacturer who implements a product management plan under this section shall pay an annual program fee of twenty thousand dollars ($20,000) to the Department to cover the Department's costs of administering this section. The Department shall credit the fee proceeds to the Electronics Recycling Account.

(g) The Department shall review a product management plan within 120 days after receiving the plan. The Department may approve or disapprove the entire plan or may approve part of the plan and disapprove the remainder of the plan. If the Department approves the plan in its entirety, the manufacturer shall begin implementation of the plan within 30 days unless the Department approves a later implementation date. If the Department disapproves the plan in its entirety, the Department shall notify the manufacturer of the reasons for the disapproval. The manufacturer shall submit a revised product management plan within 30 days. If the Department approves a product management plan in part, the manufacturer shall implement the approved parts of the product management plan within 30 days unless the Department approves a later implementation date and shall submit a revision of those parts of the plan that are disapproved within 30 days. Any part of a product management plan that is not approved or disapproved within 120 days shall be deemed approved, and the manufacturer shall begin implementation within 30 days. A producer shall fully implement its plan no more than 12 months after the Department approves the plan.

(h) The Department may review an approved product management plan and recommend or require the manufacturer to modify the plan at anytime upon finding that the approved product management plan as implemented no longer meets the requirements of this Part.

"§ 130A‑309.93. Local governments; electronics recycling programs.

(a) 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 electronic 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 electronic 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 electronic 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 electronic devices under that contract.

(b) Reimbursements to units of local government under this section shall be paid only from funds in the Electronics Recycling Account. This section shall not be construed to obligate the General Assembly to appropriate funds for reimbursements.

"§ 130A‑309.94. Local governments; use of reimbursements from Electronics Recycling Account.

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

(1) Collection and transportation of discarded electronic devices.

(2) Recycling processing fees.

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

"§ 130A‑309.95. 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 and the annual program fee imposed by 130A‑309.92(f).

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

(1) Ninety percent (90%) for reimbursement of units of local government as provided in G.S. 130A‑309.93.

(2) Six percent (6%) for supplemental grant funding to units of local government to help initiate local programs, enhance existing local electronics recycling services, and public education programs on the environmental benefits of electronics recycling.

(3) Four percent (4%) to the Department for the administration of the program pursuant to G.S. 130A‑309.97.

"§ 130A‑309.96. Effect of local ordinance.

This Part preempts any local ordinance regarding the management of discarded electronic devices 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‑309.97. Duties of Department.

(a) Public Education. – The Department shall develop and implement a program to educate the public on the environmental benefits of electronics recycling. 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) Supplemental Grant Program. – The Department shall develop and implement a supplemental grant program, utilizing the funds allocated pursuant to G.S. 130A‑309.95(b)(2), to encourage the establishment of electronics waste recycling programs and to enhance existing programs.

(d) 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 electronic devices in compliance with all applicable laws for the protection of the environment. This criteria shall favor the recycling of electronic devices within the United States.

(e) Certification and Approval of Manufacturer's Product Management Plans. – In accordance with G.S. 130A‑309.92, the Department shall certify and approve a product management plan submitted by a manufacturer of electronic devices.

"§ 130A‑309.98. 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 electronic devices in the State for the fiscal year ending the preceding 30 June. The description of the management of electronic devices shall include all of the following information:

(1) An evaluation of the implementation of the Electronics Recycling Act of 2005.

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

(3) The amount of fees collected under G.S. 130A‑309.92(f) during the period covered by the report.

(4) 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.

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

"§§ 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:

…

(14) A description of the management of electronic waste in the State, as required by G.S. 130A‑309.98."

SECTION 4. G.S. 130A‑309.93, as enacted by Section 2 of this act, reads as rewritten:

"§ 130A‑309.93. Local governments; electronics recycling programs.

A unit of local government that contracts with a recycling processor certified by the Department pursuant to G.S. 130A‑309.97(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 electronic 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 electronic 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 electronic 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 electronic devices under that contract."

SECTION 5. 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 6. 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 7. Sections 1, 2, 3, 5, 6, and 7 of this act become effective 1 January 2006. Section 4 of this act becomes effective 1 July 2009. 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 2006.