84R3314 JAM-F
	By: Rodriguez of Travis	H.B. No. 2425

	A BILL TO BE ENTITLED
	AN ACT
	relating to water quality improvement and pollution reduction
	through beverage container recycling incentives; assessing a fee;
	providing penalties; creating a criminal offense.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle B, Title 5, Health and Safety Code, is
	amended by adding Chapter 376 to read as follows:
	CHAPTER 376. TEXAS BEVERAGE CONTAINER RECYCLING INCENTIVE PROGRAM
	SUBCHAPTER A.  GENERAL PROVISIONS
	Sec. 376.001.  DEFINITIONS.  In this chapter:
	(1)  "Beverage" means an alcoholic, nonalcoholic,
	carbonated, or noncarbonated drink prepared in liquid,
	ready-to-drink form and intended for human consumption. The term
	includes:
	(A)  beer;
	(B)  ale;
	(C)  malt liquor;
	(D)  other drinks produced by fermenting malt;
	(E)  wine coolers;
	(F)  soda;
	(G)  water, including mineral water and vitamin
	water;
	(H)  carbonated water, including carbonated
	mineral water;
	(I)  carbonated soft drinks;
	(J)  noncarbonated soft drinks and sport drinks;
	(K)  noncarbonated fruit drinks;
	(L)  energy drinks;
	(M)  coffee and tea drinks; and
	(N)  carbonated fruit drinks.
	(2)  "Beverage container" means a glass, metal, or
	plastic vessel that is hermetically sealed or capped and that
	contains a beverage at the time it is sold or offered for sale.
	(3)  "Consortium" means the Texas Beverage Container
	Recycling Consortium.
	(4)  "Consumer" means a person who purchases or
	receives a beverage in a beverage container for the person's own use
	or consumption. The term includes a lodging, eating, or drinking
	establishment if beverages are generally consumed on the
	establishment's premises and does not include a person who
	purchases the beverage from the establishment for consumption on
	the premises.
	(5)  "Distributor" means a person who distributes
	beverages in beverage containers to retail dealers.
	(6)  "Incentive program" means the Texas beverage
	container recycling program established under this chapter.
	(7)  "Infant formula" means any liquid food sold as an
	alternative for human milk for the feeding of infants.
	(8)  "Manufacturer" means any person who fills beverage
	containers for sale to distributors or retail dealers.
	(9)  "Medical food" means a food or beverage that is
	formulated to be consumed or administered under the supervision of
	a physician and that is intended for specific dietary management of
	diseases or health conditions for which distinctive nutritional
	requirements, based on recognized scientific principles, are
	established by medical evaluation. The term also includes any
	product that meets the definition of "medical food" under Section
	5(b)(3), the Food, Drug, and Cosmetic Act (21 U.S.C. Section
	360ee).
	(10)  "Redemption center" means an operation approved
	by the consortium to redeem beverage containers under this chapter
	and includes a manned operation or a mechanical device that accepts
	empty beverage containers and issues a cash refund or a redeemable
	credit slip with a value not less than the container's refund value.
	(11)  "Refund" means a payment by a redemption center
	under Section 376.201 to a person who presents a beverage container
	at the redemption center.
	(12)  "Retail dealer" means a person who sells a
	beverage in a beverage container to a consumer and includes the
	owner or operator of a beverage vending machine.
	Sec. 376.002.  TEXAS BEVERAGE CONTAINER RECYCLING
	CONSORTIUM. (a) The consortium is an association formed to
	administer the incentive program.
	(b)  The consortium consists of nine voting members
	appointed by the governor as follows:
	(1)  one distributor of alcoholic beverages;
	(2)  one distributor of nonalcoholic beverages;
	(3)  one recycler;
	(4)  one beverage retailer;
	(5)  one representative of the waste industry;
	(6)  one redemption center owner or operator;
	(7)  one container processor or remanufacturer;
	(8)  one representative of a municipality with a
	population of less than 10,000; and
	(9)  one representative of a municipality with a
	population of at least 10,000.
	(c)  The voting members serve staggered terms of two years
	with four or five members' terms, as applicable, expiring June 1 of
	each year.
	(d)  The voting members annually shall designate one member
	of the consortium to serve as presiding officer.
	(e)  The voting members shall appoint an executive director
	to oversee the consortium's operation under the supervision of the
	consortium.
	(f)  The executive director may employ personnel necessary
	to the operation of the consortium.
	(g)  The comptroller or the comptroller's designee and the
	chair of the Texas Commission on Environmental Quality or the
	chair's designee serve as ex officio nonvoting members of the
	consortium.
	Sec. 376.003.  ADMINISTRATION AND RULES.  (a)  In
	administering the incentive program, the consortium shall:
	(1)  after consultation with the comptroller and the
	Texas Commission on Environmental Quality regarding standards and
	requirements for redemption centers, enter into appropriate
	agreements approving redemption centers under Section 376.151;
	(2)  enforce compliance with the provisions of this
	chapter;
	(3)  develop and implement a marketing plan to provide
	information and educate consumers about the incentive program;
	(4)  conduct any audit of the incentive program the
	comptroller determines is necessary;
	(5)  develop an operating budget for the incentive
	program;
	(6)  ensure the solvency of the incentive program's
	account;
	(7)  develop a system for reimbursement of deposits and
	refunds and for distribution of handling fees;
	(8)  develop a system for monitoring the number of
	containers sold by distributors and the number of containers
	returned to redemption centers and curbside recycling centers;
	(9)  develop a system to prevent fraudulent use of the
	incentive program, including payment by voucher for the redemption
	of beverage containers if the consortium determines that vouchers
	will be an effective fraud prevention measure;
	(10)  administer an account as provided by Section
	376.105;
	(11)  adopt procedures and forms necessary to implement
	this chapter; and
	(12)  develop and maintain a publicly accessible
	website to provide information about the program, including
	redemption center locations.
	(b)  The comptroller, after consultation with the
	consortium, may adopt rules necessary to implement this chapter.
	Sec. 376.004.  CRIMINAL PENALTIES.  A person commits an
	offense if the person knowingly violates Section 376.051, 376.101,
	376.102, 376.201, or 376.204. An offense under this section is a
	Class C misdemeanor.
	Sec. 376.005.  REPORT TO LEGISLATURE.  Not later than
	November 1 of each year, the consortium shall submit a report to the
	lieutenant governor, the speaker of the house of representatives,
	the comptroller, the Texas Commission on Environmental Quality, and
	the committee in each house of the legislature that has primary
	jurisdiction over environmental matters about the progress and
	success of the incentive program.  The report must be submitted
	electronically in a format prescribed by the officer or entity to
	which the report is transmitted.
	SUBCHAPTER B. REFUND VALUE AND LABELING OF BEVERAGE CONTAINERS
	Sec. 376.051.  REFUND VALUE AND LABEL REQUIRED.  (a)  Except
	as provided by Subsection (b), a person may not distribute, sell, or
	offer for sale in this state a beverage container unless the
	container:
	(1)  has:
	(A)  a fluid capacity of less than 24 ounces and a
	refund value of five cents; or
	(B)  a fluid capacity of at least 24 ounces and a
	refund value of 10 cents; and
	(2)  is labeled as required by Section 376.052.
	(b)  A person may distribute, sell, or offer for sale in this
	state a beverage container that does not have a refund value if:
	(1)  the container has a fluid capacity of more than one
	gallon; or
	(2)  the container contains:
	(A)  a beverage that consists of milk or of 100
	percent fruit or vegetable juice; or
	(B)  medical food or infant formula.
	Sec. 376.052.  LABELING.  (a) A beverage container required
	to have a refund value under Section 376.051 that is distributed or
	offered for sale in this state must have legibly stamped, labeled,
	or embossed on the container:
	(1)  "TxR"; and
	(2)  other language as required by the consortium.
	(b)  A beverage container intended for sale in this state
	must be printed, embossed, stamped, labeled, or otherwise marked
	with a universal product code or similar machine-readable indicium.
	SUBCHAPTER C. COLLECTION OF DEPOSIT
	Sec. 376.101.  COLLECTION OF DEPOSIT BY DISTRIBUTOR AND
	RETAIL DEALER.  (a)  A distributor shall collect a deposit of 5 or 10
	cents, as established by Section 376.051, from a retail dealer for
	each beverage container that the distributor sells to the retail
	dealer.
	(b)  A retail dealer shall collect a deposit of 5 or 10 cents,
	as established by Section 376.051, from a consumer for each
	beverage container that the retail dealer sells to the consumer.
	(c)  A retail dealer who sells one or more beverage
	containers to a consumer for off-premise consumption shall list the
	beverage container deposit paid as a separate line item on a receipt
	given to the consumer. The deposit may not be included in any sales
	tax calculation.
	Sec. 376.102.  REMITTANCE OF DEPOSITS BY DISTRIBUTOR.  Not
	later than the fifth day of each month, a distributor shall remit to
	the consortium the deposits collected by the distributor under
	Section 376.101 during the preceding month.
	Sec. 376.103.  MONTHLY REPORT. (a)  Not later than the fifth
	day of each month, a distributor who collects a deposit under
	Section 376.101 shall report to the consortium, on a form approved
	by the consortium:
	(1)  the total amount of deposits collected during the
	preceding month; and
	(2)  the number of beverage containers sold during the
	preceding month separated by deposit amount and material of
	container.
	(b)  The consortium may require a distributor to include in
	the report required by Subsection (a) other information the
	consortium considers necessary.
	(c)  The information contained in the report required by this
	section is confidential and may not be disclosed by the consortium
	or an officer or employee of the consortium unless required by law.
	Sec. 376.104.  DONATIONS. A manufacturer or distributor who
	donates beverage containers covered by this chapter shall pay the
	requisite deposit for the donated beverage containers to the
	consortium using the method prescribed by the consortium.
	Sec. 376.105.  RECYCLING REFUND TRUST ACCOUNT.  (a)
	Deposits collected under this chapter shall be deposited to the
	credit of the recycling refund trust account maintained by the
	consortium. Money in the account may be allocated only for:
	(1)  reimbursements and handling fees paid to
	redemption centers or curbside recycling programs, as applicable;
	(2)  administration of this chapter;
	(3)  providing information and educating consumers
	about the incentive program;
	(4)  the purposes authorized under Subsections (b) and
	(c); and
	(5)  matching grants or low-interest loans to fund
	water quality, waste reduction, recycling, or curbside redemption
	programs.
	(b)  On the last day of each state fiscal biennium, the
	consortium shall send to the comptroller a fee in the amount
	necessary for the comptroller to fulfill the comptroller's
	obligations under this chapter.
	(c)  On the last day of each state fiscal biennium, the
	consortium shall send to the Texas Commission on Environmental
	Quality a fee in the amount necessary to reimburse that agency for
	the agency's participation in the program.
	(d)  On the last day of each state fiscal biennium, the
	consortium shall send to the comptroller a fee in the amount of two
	and one-half percent of the unencumbered balance of the account for
	deposit in the state treasury to the credit of the Texas Commission
	on Environmental Quality. Money deposited under this subsection
	may be appropriated only for the purposes of Section 361.014(b).
	The money must be allocated as provided by that subsection and each
	planning region shall include in the biennial report issued under
	that subsection information detailing how the money is spent.
	SUBCHAPTER D.  REDEMPTION CENTERS
	Sec. 376.151.  ESTABLISHMENT OF REDEMPTION CENTER
	AGREEMENTS.  (a)  To facilitate the return of empty beverage
	containers, a local government or independent entity may establish,
	own, and operate a redemption center at which empty containers may
	be returned for their refund value.
	(b)  The local government or independent entity must file an
	application for approval of a redemption center with the
	consortium.  The application must provide:
	(1)  the name, mailing address, telephone number,
	e-mail address, and title of the person responsible for the
	establishment and operation of the redemption center;
	(2)  the physical address of the redemption center;
	(3)  the applicant's federal tax identification number
	or social security number if a tax identification number is not
	required by federal law; and
	(4)  any additional information the consortium
	requires as necessary or convenient for the implementation of this
	section.
	(c)  The consortium shall approve a redemption center if it
	finds the redemption center will provide a convenient service to
	persons for the return of empty beverage containers.
	(d)  The consortium at any time may review its approval of a
	redemption center. After written notice to the person responsible
	for the establishment and operation of the redemption center and to
	each retail dealer located within a two-mile radius of the
	redemption center, the consortium may, after providing the owner or
	operator an opportunity for a hearing to verify facts and resolve
	the matter at issue, withdraw approval of a redemption center if the
	consortium finds the redemption center has violated any terms of
	the approval of the redemption center.
	(e)  The consortium and applicant shall establish the
	required hours of operation for a redemption center in the approval
	under Subsection (c).
	(f)  The consortium may not limit the number of redemption
	centers within a geographic area.
	(g)  To be eligible to receive handling fees and
	reimbursements for redemptions under Section 376.205, a redemption
	center owner and operator must complete a biennial training program
	established by the consortium.
	SUBCHAPTER E. BEVERAGE CONTAINER REDEMPTION
	Sec. 376.201.  USED BEVERAGE CONTAINER REDEMPTION.  Except
	as provided by Sections 376.202 and 376.203, and subject to any
	additional antifraud requirements developed by the consortium
	under Section 376.003(a)(9), a redemption center shall accept a
	used beverage container that has a refund value as established by
	Section 376.051 and shall pay the refund value of the container in
	cash, check, or, if permitted by consortium rule, voucher to the
	person presenting the container if the container is stamped,
	labeled, or embossed with "TxR."
	Sec. 376.202.  REFUSAL PERMITTED. A redemption center may
	refuse to accept for refund:
	(1)  a glass bottle that is broken;
	(2)  a used beverage container that contains part of
	its original contents or other foreign matter to the extent that it
	could present health or sanitation problems; or
	(3)  a used beverage container that is not legibly
	marked "TxR."
	Sec. 376.203.  REDEMPTION BY WEIGHT.  (a)  The consortium
	shall establish:
	(1)  a procedure and reimbursement rates for providing
	a reimbursement based on the weight and material of the beverage
	containers presented to be used in circumstances in which the
	number of containers is so large that counting the containers
	individually would be burdensome on a redemption center or curbside
	recycling program; and
	(2)  a handling fee to be paid to redemption centers for
	containers redeemed in the manner described by Subdivision (1).
	(b)  Not more than every six months the consortium may adjust
	the reimbursement rates described by Subsection (a).
	Sec. 376.204.  RECYCLING OF BEVERAGE CONTAINERS BY
	REDEMPTION CENTER AND CURBSIDE RECYCLING PROGRAM. A redemption
	center or curbside recycling program shall recycle the returned
	used beverage containers by:
	(1)  selling the material to a processor or other end
	user; or
	(2)  another method prescribed by the consortium.
	Sec. 376.205.  REIMBURSEMENT OF REDEMPTION CENTERS BY
	CONSORTIUM; HANDLING FEE.  (a) On submission of a completed invoice
	of refunds paid by a redemption center on a form adopted by the
	consortium, the consortium shall pay to the redemption center an
	amount equal to the redemption value established by Section 376.051
	or 376.203(a)(1), as applicable, plus a handling fee of:
	(1)  one and one-half cents for each beverage container
	redeemed by the redemption center under Section 376.201; or
	(2)  the amount determined under Section 376.203(a)(2)
	for beverage containers redeemed in the manner described by that
	section.
	(b)  The consortium shall reimburse a redemption center
	under Subsection (a) not later than the fifth working day after the
	date the consortium receives the invoice submitted by the
	redemption center.
	(c)  The consortium may adjust a handling fee to account for:
	(1)  changes in market conditions for recycled
	materials; and
	(2)  different market conditions for recycled
	materials based on population or geographic location.
	Sec. 376.206.  REIMBURSEMENT OF CURBSIDE RECYCLING PROGRAM
	BY CONSORTIUM.  (a)  On submission of a completed report, on a form
	adopted by the consortium, indicating the number or weight, as
	applicable, of beverage containers collected by a curbside
	recycling program that are covered under this chapter, the
	consortium shall pay to the curbside recycling program an amount
	equal to the redemption value established by Section 376.203.
	(b)  The consortium shall reimburse a curbside recycling
	program under Subsection (a) not later than the fifth working day
	after the date the consortium receives the invoice submitted by the
	curbside recycling program.
	Sec. 376.207.  REPORTING REQUIREMENTS. Each redemption
	center and curbside recycling program shall submit a report with
	the submission of the completed invoice required under Sections
	376.205 and 376.206, respectively, to the consortium, on a form
	approved by the consortium, that provides:
	(1)  the redemption value of beverage containers
	collected by the redemption center or curbside recycling program;
	(2)  the number or weight of beverage containers
	collected by the center or curbside recycling program; and
	(3)  an invoice or other documentation that provides
	proof that the collected recycled material was recycled in a manner
	described by Section 376.204.
	Sec. 376.208.  NOTICE.  The consortium must provide to each
	redemption center and curbside recycling program, as applicable,
	written notice at least 30 days before implementation of a change in
	rates under Section 376.204 or handling fees under Section 376.205.
	SECTION 2.  Section 151.007(c), Tax Code, is amended to read
	as follows:
	(c)  "Sales price" or "receipts" does not include any of the
	following if separately identified to the customer by such means as
	an invoice, billing, sales slip or ticket, or contract:
	(1)  a cash discount allowed on the sale;
	(2)  the amount charged for tangible personal property
	returned by a customer if the total amount charged is refunded by
	cash or credit;
	(3)  a refund of the charges for the performance of a
	taxable service;
	(4)  finance, carrying and service charges, or interest
	from credit extended on sales of taxable items under a conditional
	sales contract or other contract providing for the deferred payment
	of the purchase price;
	(5)  the value of tangible personal property that:
	(A)  is taken by a seller in trade as all or part
	of the consideration for a sale of a taxable item; and
	(B)  is of a type of property sold by the seller in
	the regular course of business;
	(6)  the face value of United States coin or currency in
	a sale of that coin or currency in which the total consideration
	given by the purchaser exceeds the face value of the coin or
	currency; [or]
	(7)  a voluntary gratuity or a reasonable mandatory
	charge for the service of a meal or food products, including soft
	drinks and candy, for immediate human consumption when the service
	charge is separated from the sales price of the meal or food product
	and identified as a gratuity or tip and when the total amount of the
	service charge is disbursed by the employer to employees who
	customarily and regularly provide the service; or
	(8)  a beverage container redemption deposit under
	Chapter 376, Health and Safety Code.
	SECTION 3.  (a)  Not later than September 1, 2016, the
	comptroller of public accounts, after consultation with the Texas
	Beverage Container Recycling Consortium and the Texas Commission on
	Environmental Quality, shall adopt any rules necessary to implement
	Chapter 376, Health and Safety Code, as added by this Act.
	(b)  The requirements of and penalties imposed by Chapter
	376, Health and Safety Code, as added by this Act, do not apply to
	any person before January 1, 2017.
	(c)  The remittance and report requirements imposed by
	Sections 376.102 and 376.103, Health and Safety Code, as added by
	this Act, do not apply to any person before March 5, 2017.
	(d)  The Texas Beverage Container Recycling Consortium may
	not adjust a handling fee under Section 376.205(c), Health and
	Safety Code, as added by this Act, until January 1, 2018.
	SECTION 4.  This Act takes effect September 1, 2015.