Illinois House Bill 4258 (2022) - (Failed)

Packaging material is defined as a material used for the containment, protection, delivery, presentation, or distribution of a product at the time that the product leaves a point of sale with or is received by the consumer of the product.

There are a number of exclusions to the definition of packaging material. These include:

1. Packaging intended to be used for the long-term storage or protection for a period of at least 5 years.
2. Beverage containers subject to existing bottle deposit legislation.
3. Containers for architectural paint already covered under an effective stewardship program.

Producer is defined as the legal owner of a brand for a product sold, offered for sale, or distributed in the state that uses covered packaging material.

Producer is also a franchisor of a franchise located in Illinois, but does not include the franchisee operating that franchise.

Producer also includes a person who imports a product that uses covered packaging material into the state when the brand does not have a physical presence in the United States.

Producers are exempt if gross revenue within the state is less than $2 million in the previous year, or if the producer sold, offered for sale, or distributed products containing less than 1 ton of covered packaging material in the previous year.

501(c)(3) registered nonprofit organizations are excluded from the definition of producer.

The state will select a packaging stewardship organization via a competitive bid process. The state will enter into a contract with a packaging stewardship organization to operate the packaging stewardship program.

The stewardship organization is responsible for all financial costs of the program. The stewardship organization must reimburse local governments for operational costs of managing packaging material including collection and transportation.

Program funds will be used to reimburse municipalities for operational costs associated with managing packaging material including collection, transportation, and processing.

A portion of program funding will be used for efforts designed to improve recycling education in the state.

Funding will cover administration of the stewardship organization as well as government costs associated with administering and enforcing the stewardship program.

Program funds will be used to support investments in infrastructure.

Low-volume producers may elect to pay a flat fee in lieu of a material-specific producer payment. Low-volume producer means a producer that sold, offered for sale, or distributed for sale in or into the State products using more than one ton but less than 15 tons of packaging material in total in the previous year.

The agency will develop rules that determine payment calculations. This must include rules that require the amount of a producer's payment be designed to incentivize the use by producers of packaging material that is readily recyclable and disincentivize the use by producers of packaging material that is not readily recyclable.

The rules determining fee calculations must include consideration of modulated fees that encourage certain packaging characteristics, such as reusability and incorporation of recycled content.

Fee calculation may be structured to encourage the use of post-consumer recycled material in packaging material provided that such use does not increase the toxicity of packaging material.

Fee calculation may be structured to encourage the reuse of packaging materials.

Fee calculation may be structured to encourage design characteristics intended to reduce consumer confusion regarding recyclability and to reduce recycling contamination and any other incentives designed to support the management of packaging material consistent with the state's waste hierarchy.

Fee calculation may be structured to encourage the use of readily-recyclable material, as well as single-material packaging that includes prominent and easily understandable recycling or disposal instructions for consumers.

The program goals must include recycling access and collection rate goals for municipalities, overall program and material-specific recycling rate goals, packaging material litter reduction goals, and any other goals required by the state.

The program must include goals supporting an increased reuse by producers of packaging material and an increased amount of post-consumer recycled content in packaging material used by producers.

Material specific recycling rate goals will be set within the program.

Program funds expended on education and infrastructure will be proportional the the payments from fees for packaging material that is not readily recyclable and is not actually recycled. Proposals for infrastructure improvements will be evaluated by the state and funds awarded to applicants, with preference given to proposals that support the state's solid waste management hierarchy under section, promote a circular economy for packaging, increase the recyclability of packaging material that is not readily recyclable, and increase access to recycling infrastructure in the state.

Beginning one calendar year following the effective date of the stewardship organization's contract, a producer may not sell, offer for sale, or distribute for sale in or into the state a product contained, protected, delivered, presented or distributed in or using packaging material if they have not complied with this regulation.

This bill requires potential stewardship organizations to bid for a contract to operate the packaging stewardship program for the state. During the bidding process, bidders will submit a program proposal. The state will review the proposal and enter into a contract that must cover 10 years of operation of the packaging stewardship program.

The state will administer and enforce this regulation and adopt rules to implement, administer, and enforce this regulation.

The state will determine program rules to include the fee schedule, municipal reimbursement provisions, and distribution of funds to support investments in infrastructure and education.

Beginning one calendar year following the effective date of the contract, the stewardship organization must submit a report to the state and make the report available on a publicly accessible website.

Funds from the program will be awarded to support equitable recycling and education efforts in participating municipalities, particularly in those participating municipalities that have received minimal or no prior funding.

The stewardship organization bid must include a description of how the bidder intends to solicit and consider input from stakeholders, including producers, municipalities, environmental organizations, and waste management and recycling establishments, regarding the bidder's operation of the packaging stewardship program.

A producer or stewardship organization are protected from antitrust liability for actions taken in accordance with this regulation to the extent that the actions is necessary to plan and implement the required packaging stewardship program or alternative collection program.

A producer or group of producers may develop and operate an alternative collection program to collect and manage a type or types of packaging material. A producer that manages a type of packaging material under an approved alternative collection program may wholly or partially offset the producer's payment obligations under the packaging stewardship program with respect to that same type of packaging material only.