Minnesota House File 3911 (2024) - (Passed)

Covered material means packaging and paper products.

More specifically, covered material type is a singular and specific type of covered material, such as paper, plastic, metal, or glass, that can be categorized based on distinguishing chemical or physical properties, including properties that allow a covered materials type to be aggregated into a discrete commodity category for purposes of reuse, recycling, or composting and is based on similar uses in the form of a product or package.

Paper product means a product made primarily from wood pulp or other cellulosic fibers.

Exempted materials include:

1. Packaging for infant formula
2. Packaging for medical food
3. Packaging for a fortified oral nutritional supplement used by persons who require supplemental or sole source nutrition to meet nutritional needs due to special dietary needs
4. Packaging for a product regulated as a drug or medical device by the United States Food and Drug Administration, including associated components and consumable medical equipment
5. Packaging for a medical equipment or product used in medical settings that is regulated by the United States Food and Drug Administration, including associated components and consumable medical equipment
6. Drugs, biological products, parasiticides, medical devices, or in vitro diagnostics that are used to treat, or that are administered to, animals and are regulated by the United States Food and Drug Administration
7. Packaging for products regulated by the United States Environmental Protection Agency under the Federal Insecticide, Fungicide, and Rodenticide Act
8. Packaging used to contain liquefied petroleum gas and are designed to be refilled
9. Paper products used for a newspaper's print publications, including supplements or enclosures, that include content derived from primary sources related to news and current events
10. Paper products used for a magazine's print publication that has a circulation of less than 95,000 and that primarily includes content derived from primary sources related to news and current events
11. Packaging used to contain hazardous or flammable products regulated by the 2012 federal Occupational Safety and Health Administration Hazard Communication Standard
12. Packaging that is being collected and properly managed through a paint stewardship plan
13. Packaging exempted by the commissioner
14. Packaging distributed from producer to producer, used to contain a product, and the product is distributed to a commercial or business entity for the production of another product, and not introduced to a person other than the commercial or business entity that first received the product used for the production of another product.
15. Bound books
16. Unsafe or unsanitary paper products not accepted by recycling or composting facilities

Covered entity means a person or location that receives covered services for covered materials, including single-family and multifamily residences.

Schools, nonpublic schools, postsecondary education systems, and any location where education or child care is provided is a covered entity.

A nonprofit corporation with annual revenue less than $35,000,000 is a covered entity.

A state agency, political subdivision, public area, public entity, or other governmental unit is a covered entity.

Items sold in or with packaging at a physical retail location in this state: if the item is sold under a brand manufacturer, or lacks brand identification, the producer is the person who manufactures the item.

Items sold or distributed in packaging in the state via e-commerce, remote sale, or distribution:
Packaging used to directly protect or contain the item, the producer of the packaging is the person who manufactures the item.
Packaging used to ship the item to a consumer, the producer of the packaging is the person that packages the item to be shipped to the consumer.

Paper products that are magazines, catalogs, telephone directories, or similar publications, the producer is the publisher. If the paper product is sold under the manufacturer's own brand, the producer is the person that manufactures the paper product.

A person is the producer of a covered material as defined above except where another person has a mutually signed agreement with a producer that contractually assigns responsibility or in the case of a franchise, the producer is the franchisor, not the franchisee.

Items sold in or with packaging at a physical retail location in this state: If there is no brand manufacturer, the producer is the person licensed to manufacture the packaging under the brand or trademark. If there is no licensee, the producer is the brand owner.

For paper products: If there is no manufacturer's own brand, the producer is the owner or licensee of a brand of trademark, whether or not the trademark is registered in the state. If there is no licensee, the producer is the brand owner of the paper product.

Items sold in or with packaging a physical retail location in the state: If there is no brand manufacturer or licensee, the producer is the person who is the importer of record for the item into the United States for use in a commercial enterprise. If there is no importer, the producer is the person who first distributes the item into the state.

Items sold or distributed in packaging in the state via e-commerce, remote sale, or distribution: the producer of the packaging is the person that first distributes the item in or into this state if there is no brand manufacturer or person who packaged the item directly to a consumer.

For paper products: If there is no manufacturer or licensee, the producer is the person that first distributes the paper product into the state.

Producer does not include de minimis producers, a mill that uses any virgin wood fiber in the products it produces, or a paper mill that produces container board derived from 100 percent post-consumer recycled content and non post-consumer recycled content.

De minimis producer is a person that in their most recent fiscal year introduced less than one ton of covered material into this state or earned global gross revenues of less than $2,000,000.

State, a federal or state agency, a political subdivision, or other governmental unit are excluded from the definition of producer.

A registered 501(c)(3) charitable organization or 501(c)(4) social welfare organization is excluded from the definition of producer.

Producers must register with a Producer Responsibility Organization. More than one PRO may be established after the initial approval and stewardship plan, but they must establish a coordinating body.

Producer responsibility organization means a nonprofit corporation that is tax exempt under chapter 501(c)(3) of the federal Internal Revenue Code.

Producers are responsible for all costs. Municipalities that choose to retain control of operations are reimbursed. PRO is responsible for operations where municipal service is not provided.

Reimbursement rates must be established equivalent to net costs as established by a methodology in an approved plan as follows:

(1) no less than 50 percent of the net cost by February 1, 2029
(2) no less than 75 percent of the net cost by February 1, 2030
(3) no less than 90 percent of the net cost by February 1, 2031, and each year thereafter.

The cost coverage must include covered services, collecting, transferring, transporting, sorting, processing, recovering, preparing, or otherwise managing for purposes of waste reduction, reuse, recycling, or composting.

The cost coverage must include education and outreach.

Beginning January 1, 2029, as part of its annual registration with the commissioner, a producer responsibility organization must submit to the commissioner a registration fee, as determined by the commissioner. By October 1, 2028, and annually thereafter, the commissioner must provide written notice to registered producer responsibility organizations in writing of the amount of the registration fee. The fee if for the costs required to perform the commissioner's duties and to otherwise administer, implement, and enforce this act.

By January 1, 2032, the commissioner of the Pollution Control Agency must contract with a third party to conduct a study to identify the contribution of covered products to litter and water pollution in Minnesota. The PRO must cover the costs.

The cost coverage must include infrastructure investments including equipment or facilities for recycling, reuse, or composting, expansion or strengthening of demand for covered materials, and must be conducted in an open, competitive, and fair manner.

The PRO must collect a fee from each member producer that must vary based on the total amount of covered materials each producer introduces in the prior year calculated on a per-unit basis, such as per ton, per item, or another unit of measurement.

Fees must incentivize using materials and design attributes that reduce the environmental impacts and human health impacts of covered materials.

The fees must incentivize increasing the proportion of post-consumer material in covered materials.

The fees must incentivize increasing the amount of covered materials managed in a reuse system and prioritize reuse by charging covered materials that are managed through a reuse system only once, upon initial entry into the marketplace.

The fees must incentivize reducing the amount of packaging per individual covered material that is necessary to efficiently deliver a product without damage or spoilage and without reducing its ability to be recycled and paper used to manufacture individual paper products.

The fees must incentivize eliminating intentionally added toxic substances in covered materials.

The fees must incentivize enhancing the recyclability or compostability of a covered material.

The fees must incentivize increasing the amount of inputs derived from renewable and sustainable sources.

The commissioner must establish statewide requirements and the date by which they must be met for the recycling rate, composting rate, reuse rate, return rate, the percentage of covered materials introduced that must be waste reduced, and the percentage of post-consumer recycled content that covered materials must contain, including an overall percentage for all covered materials, as applicable, excluding compostable materials that cannot include post-consumer recycled content.

The commissioner must consult with the PRO on establishing statewide requirements, submit proposed statewide requirements for review by the board, and consider the board's recommendations before finalizing the statewide requirements. Every five years, the commissioner must review the statewide requirements.

After January 1, 2032, no producer may introduce covered materials unless covered services are provided for the covered materials through a program in a stewardship plan approved by the commissioner and the covered materials are: Reusable and capable of being managed through a reuse system that meets the reuse rate and return rate and capable of refill and supported by a refill system or included on the statewide list.

A PRO may petition the commissioner for a two-year extension to comply with the requirements. The PRO may petition the commissioner for additional annual extensions until January 1, 2040, if the PRO demonstrates that market or technical issues preventing compliance persist.

For the purpose of determining if performance targets are met, a stewardship plan must provide a methodology for measuring the amount of waste reduction of covered materials, for measuring the amount of recycled material at the point at which material leaves a recycling facility, for measuring the amount of reusable covered materials at the point at which reusable covered materials, and for measuring post-consumer recycled content across all producers for a covered materials type where producers may determine their post-consumer recycled content based on their United States market territory if state-specific post-consumer recycled content is impractical to determine.

Infrastructure investments in a stewardship plan must use the competitive bidding process and preference must be given to existing facilities, providers of services, and holders of service accounts in the state for waste reduction, reuse, collection, recycling, and composting of covered materials.

No producer or producer responsibility organization may own or partially own infrastructure to fulfill plan obligations except if the stake was held before enactment and was fully disclosed, as well as, if no service provider bids on the contract.

If a bottle deposit return system is enacted in the future it will be harmonized and ensure materials covered in that system are exempt or related financial obligations are reduced, colocation of drop-off collection sites is maximized, education and outreach is integrated, and waste reduction and reuse strategies are prioritized. A two year transition period must be included.

Producers must appoint a PRO by January 1, 2025. The PRO must register with the commissioner by July 1, 2026 and each January 1 thereafter.

The PRO must submit a stewardship plan to the commissioner by October 1, 2028 and every 5 years thereafter.

After January 1, 2029, no producer may introduce covered materials, either separately or when used to package another product, unless the producer enters into a written agreement with a producer responsibility organization to operate under an approved stewardship plan.

The commissioner must review and approve, deny, or request additional information for a draft stewardship plan or a draft plan amendment no later than 120 days after the date the commissioner receives it from a PRO.

The packaging product stewardship account is established as a separate account in the special revenue fund in the state treasury. Appropriations and transfers to the account and fees collected must be credited to the account. Money remaining in the account at the end of a fiscal year does not cancel to the general fund but remains in the account until expended.

A PRO must submit a written report to the commissioner by April 1, 2029 and annually thereafter.

A PRO that fails to meet a performance target approved in a stewardship plan must, within 90 days of filing an annual report, file with the commissioner an explanation of the factors contributing to the failure and propose an amendment to the stewardship plan.

A person that violates or fails to perform a duty is liable for a civil penalty not to exceed $25,000 per day of violation.

A PRO or producer that violates a provision of or fails to perform a duty is liable for a civil penalty not to exceed $25,000 per day of violation. For a second violation occurring within five years after the approval of a stewardship plan, a PRO or producer is liable for a civil penalty not to exceed $50,000 per day of violation. For a third or subsequent violation occurring within five years after the approval of a stewardship plan, a PRO or producer is liable for a civil penalty not to exceed $100,000 per day of violation.

The stewardship plan must include labor standards and safety practices, including but not limited to safety programs, health benefits, and living wages.

By January 1, 2032, the commissioner must contract with a third party that is not a producer or a PRO to conduct a study of the recycling, composting, and reuse facilities operating in the state, analyzing not limited to, but the following: working conditions, wage and benefit levels, and employment levels of minorities and women, the degree to which residents of multifamily buildings have less convenient access to recycling, composting, and reuse opportunities than those living in single-family homes, the degree to which residents and workers in environmental justice areas are impacted by emissions, toxic substances, and other pollutants from solid waste facilities. The PRO must cover costs of the study.

Education and outreach must assist producers in improving product labels as a means of informing consumers about refilling, reusing, recycling, composting, and other environmentally sound methods of managing covered materials.

Education and outreach must increase public awareness of how to use and manage covered materials in an environmentally sound manner and how to access waste reduction, reuse, recycling, and composting services.

Education and outreach must include measures to increase public awareness.

A PRO must submit a draft stewardship plan or draft amendment to the advisory board at least 60 days prior to submitting the draft plan or draft amendment to the commissioner. The PRO must address advisory board comments and recommendations prior to submission.

By January 1, 2025, the commissioner must establish and appoint the initial membership of the advisory board.

The membership of the board must consist of the following:

1. Two members representing manufacturers of covered materials or a statewide or national trade association representing those manufacturers
2. Two members representing recycling facilities that manage covered materials
3. One member representing a waste hauler or a statewide association representing waste haulers
4. One member representing retailers of covered materials or a statewide trade association representing those retailers
5. One member representing a statewide nonprofit environmental organization
6. One member representing a community-based nonprofit environmental justice organization
7. One member representing a waste facility that receives and sorts covered materials and transfers them to another facility for reuse, recycling, or composting
8. One member representing a waste facility that receives compostable materials for composting or a statewide trade association that represents such facilities
9. Two members representing an entity that develops or offers for sale covered materials that are designed for reuse or refill and maintained through a reuse or refill system or infrastructure or a statewide or national trade association that represents such entities
10. Three members representing organizations of political subdivisions, with at least one member representing a political subdivision outside the metropolitan area
11. Two members representing other interested parties or additional members of interests represented under clauses (1) to (10) as determined by the commissioner
12. One member representing the commissioner

The commissioner may not appoint members who are state legislators or registered lobbyists, members who are employees of a producer required to be members of a producer responsibility organization and must appoint members from all regions of the state.

"Recycling" has the meaning given in section 115A.03 except that recycling does not include reuse or composting, as defined in this act.

Section 115A.03 states "Recycling" means the process of collecting and preparing recyclable materials and reusing the materials in their original form or using them in manufacturing processes that do not cause the destruction of recyclable materials in a manner that precludes further use.

A producer responsibility organization that arranges collection, recycling, composting, waste reduction, or reuse services under this act may engage in anticompetitive conduct to the extent necessary to plan and implement collection, recycling, composting, waste reduction, or reuse systems to meet the obligations under this act, and is immune from liability under state laws relating to antitrust, restraint of trade, and unfair trade practices.

The stewardship plan must include an explanation of how the program will be paid for by the producer responsibility organization through fees from producers, without any new or additional consumer-facing fee to members of the public, businesses, service providers, the state or any political subdivisions, or any other person who is not a producer, unless the fee is a deposit made in connection with a product's refill, reuse, or recycling that can be redeemed by a consumer or a service charge by a service provider.

The commissioner must complete a preliminary assessment by December 31, 2025, and complete an initial needs assessment by December 31, 2026, and update the needs assessment every five years thereafter. The PRO

A service provider or other person with data or information necessary to complete a needs assessment must provide the data or information to the commissioner upon request. A service provider or other person providing the data or information may submit a written request to the commissioner that the data or information be classified as not public data.

By July 1, 2028, the commissioner must develop a list of covered materials determined to be recyclable or compostable statewide through systems where covered materials are commingled into a recyclables stream and a separate compostables stream. The commissioner must consult with the advisory board, producer responsibility organizations, service providers, political subdivisions, and other interested parties to develop or amend the recyclable or compostable covered materials lists and must review any requests. A producer may request and exemption, and the advisory board must review before the decision.

Reusable means capable of reuse. Reuse means the return of a covered material to the marketplace and the continued use of the covered material by a producer or service provider when the covered material is:
(1) intentionally designed and marketed to be used multiple times for its original intended purpose without a change in form
(2) designed for durability and maintenance to extend its useful life and reduce demand for new production of the covered material
(3) supported by adequate logistics and infrastructure at a retail location, by a service provider, or on behalf of or by a producer, that provides convenient access for consumers
(4) compliant with all applicable federal, state, and local statutes, rules, ordinances, and other laws governing health and safety.

Reuse rate means the share of units of a reusable covered material sold or distributed into the state in a calendar year that are demonstrated and deemed reusable in accordance with an approved stewardship plan

Refill means the continued use of a covered material by a consumer through a system that is:
(1) intentionally designed and marketed for repeated filling of a covered material to reduce demand for new production of the covered material
(2) supported by adequate logistics and infrastructure to provide convenient access for consumers
(3) compliant with all applicable federal, state, and local statutes, rules, ordinances, and other laws governing health and safety

A PRO must implement an alternative collection program for covered materials included on an alternative collection list. By July 1, 2028, the commissioner must complete a list of covered materials determined to be recyclable or compostable and collected statewide through systems other than the system required for covered materials on the list.