HF 842

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/08/2021 02:11pm

A bill for an act
relating to environment; establishing carpet stewardship program; amending
Minnesota Statutes 2020, section 115A.142; proposing coding for new law in
Minnesota Statutes, chapter 115A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [115A.141] CARPET PRODUCTS; STEWARDSHIP PROGRAM;
STEWARDSHIP PLAN.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the following terms have the
meanings given:
new text end

new text begin (1) "blended carpet" means carpet with a nonuniform face fiber, which is manufactured
with multiple polymer types, fiber types, or both, in the face of the constructed material;
new text end

new text begin (2) "brand" means a name, symbol, word, or mark that identifies carpet, rather than its
components, and attributes the carpet to the owner or licensee of the brand as the producer;
new text end

new text begin (3) "carpet" means a manufactured article that is affixed or placed on the floor or building
walking surface or used as a decorative or functional building interior or exterior feature,
and is primarily constructed of a top visible surface of synthetic face fibers or yarns or tufts
attached to a backing system derived from synthetic or natural materials. Carpet includes,
but is not limited to, blended carpet, nylon carpet, PET carpet, polypropylene carpet, PTT
carpet, wool carpet, commercial or residential broadloom carpet, modular carpet tiles, and
artificial turf. Carpet includes a pad or underlayment used in conjunction with a carpet.
Carpet does not include handmade rugs, area rugs, or mats;
new text end

new text begin (4) "discarded carpet" means carpet that is no longer used for its manufactured purpose,
and may include carpet that is being evaluated for reuse and directed to reuse, as defined
in this section;
new text end

new text begin (5) "distributor" means a person who buys or otherwise acquires carpet from another
source and sells or offers to sell that carpet to retailers and installers in this state;
new text end

new text begin (6) "nylon carpet" means carpet made with a uniform face fiber made with either nylon
6 or nylon 6,6;
new text end

new text begin (7) "PET carpet" means carpet made from polyethylene terephthalate;
new text end

new text begin (8) "producer" means a person that:
new text end

new text begin (i) has legal ownership of the brand, brand name, or cobrand of carpet sold in the state;
new text end

new text begin (ii) imports carpet branded by a producer that meets the specifications of item (i) when
the producer has no physical presence in the United States;
new text end

new text begin (iii) if items (i) and (ii) do not apply, makes unbranded carpet that is sold in the state;
or
new text end

new text begin (iv) sells carpet at wholesale or retail, does not have legal ownership of the brand, and
elects to fulfill the responsibilities of the producer for the carpet;
new text end

new text begin (9) "polypropylene carpet" means carpet made from polypropylene;
new text end

new text begin (10) "program year" means a calendar year;
new text end

new text begin (11) "PTT carpet" means carpet made from polytrimethylene terephthalate;
new text end

new text begin (12) "recycling" means the process by which discarded carpet is collected and processed
into raw materials or products. Recycling includes only discarded carpet that is an output
of a recycling facility destined for an end market or reuse and does not include all discarded
carpet accepted by a recycling facility. Recycling does not include:
new text end

new text begin (i) energy recovery or energy generation by means of combusting discarded carpet; and
new text end

new text begin (ii) any disposal or use of discarded carpet within the permitted boundaries of a disposal
facility;
new text end

new text begin (13) "recycling rate" means the percentage of discarded carpet that is managed through
recycling or reuse, as defined in this section, and is calculated by dividing the amount of
discarded carpet that is collected and recycled or reused by the total amount of discarded
carpet generated over a program year. To determine the annual recycling rates required by
this section, the amount of discarded carpet generated must be calculated using a standard
recognized methodology based on annual sales, replacement rate, and the average weight
of carpet and must be approved by the agency;
new text end

new text begin (14) "retailer" means any person who sells or offers carpet for sale at retail in the state
that generates sales tax revenue;
new text end

new text begin (15) "reuse" means donating or selling discarded carpet back into the market for its
original intended use, when the carpet retains its original purpose and performance
characteristics;
new text end

new text begin (16) "sale" or "sell" means the transfer of title of carpet for consideration, including:
new text end

new text begin (i) a remote sale conducted through a sales outlet, catalog, website, or similar electronic
means; or
new text end

new text begin (ii) a lease through which carpet is provided to a consumer by a producer or retailer;
new text end

new text begin (17) "stewardship assessment" means the amount added to the purchase price of carpet
sold in the state that is necessary to cover the cost of collecting, transporting, processing,
and marketing discarded carpet by the stewardship organization operating under a product
stewardship plan;
new text end

new text begin (18) "stewardship organization" means a single organization exempt from taxation under
Section 501(c)(3) of the federal Internal Revenue Code of 1986 (United States Code, title
21, section 501(c)(3)) that is established by producers in accordance with this section to
develop, implement, and administer a product stewardship program under this section;
new text end

new text begin (19) "stewardship plan" means a detailed plan describing the manner in which a product
stewardship program under subdivision 2 will be implemented; and
new text end

new text begin (20) "wool carpet" means carpet made from wool.
new text end

new text begin Subd. 2. new text end

new text begin Product stewardship program. new text end

new text begin A producer of carpet sold in the state must
participate in the stewardship organization to implement and finance a statewide product
stewardship program operated under an agency-approved product stewardship plan that
manages carpet by reducing carpet's waste generation, promoting its reuse and recycling,
and providing for negotiation and execution of agreements to collect, transport, and process
carpet for recycling and reuse.
new text end

new text begin Subd. 3. new text end

new text begin Requirement for sale. new text end

new text begin On and after January 1, 2024, no producer, distributor,
or retailer may sell carpet or offer carpet for sale in the state unless the carpet's producer
participates in the product stewardship organization to implement and finance a statewide
product stewardship program operated under a stewardship plan approved by the agency.
new text end

new text begin Subd. 4. new text end

new text begin Requirements for stewardship plan. new text end

new text begin (a) On or before January 1, 2023, initially
and on or before each July 1 in a year when the stewardship plan is required to be updated
under paragraph (b), the stewardship organization must submit a stewardship plan to the
agency and receive agency approval of the plan. A stewardship plan must include all elements
required under subdivision 5.
new text end

new text begin (b) At least every three years, the stewardship organization operating a product
stewardship program must update the stewardship plan and submit the updated plan to the
agency for review and approval.
new text end

new text begin (c) It is the responsibility of the stewardship organization to notify the agency within
30 days of any significant changes or modifications to the plan or its implementation. Within
30 days of the notification, a written plan revision must be submitted to the agency for
review and approval.
new text end

new text begin (d) Upon agency approval of the stewardship plan, the stewardship organization must
comply with and implement the contents of the approved plan.
new text end

new text begin Subd. 5. new text end

new text begin Stewardship plan content. new text end

new text begin The stewardship plan must contain:
new text end

new text begin (1) certification that the product stewardship program will accept all discarded carpet
regardless of which producer produced the carpet and its individual components;
new text end

new text begin (2) contact information for the individual and the entity submitting the plan and for all
producers participating in the product stewardship program;
new text end

new text begin (3) a description of the methods by which discarded carpet will be collected in all areas
in the state without relying on end-of-life fees, including an explanation of how the collection
system will be convenient and adequate to serve the needs of small businesses and residents.
The stewardship program must include an operating collection site located in each county
of the state by January 1, 2025. Subject to approval by the agency, the stewardship program
may propose an alternative to a collection site location in each county that is convenient
and adequate to collect discarded carpet generated in each county;
new text end

new text begin (4) a description of how the adequacy of the collection program will be monitored and
maintained;
new text end

new text begin (5) the names and locations of collectors, transporters, and recycling facilities that will
manage discarded carpet;
new text end

new text begin (6) a description of how the discarded carpet and the carpet's components will be safely
and securely transported, tracked, and handled from collection through final recycling and
processing;
new text end

new text begin (7) a description of the method that will be used to reuse, deconstruct, or recycle the
discarded carpet to ensure that the product's components, to the extent feasible, are
transformed or remanufactured into raw materials or finished products for use;
new text end

new text begin (8) a description of the promotion and outreach activities that will be used to encourage
participation in the collection and recycling programs and how the activities' effectiveness
will be evaluated and the program modified, if necessary;
new text end

new text begin (9) evidence of adequate insurance and financial assurance that may be required for
collection, handling, and disposal operations;
new text end

new text begin (10) performance goals, including an estimate of the percentage of discarded carpet that
will be collected, reused, recycled, and disposed during each of the three years of each
stewardship plan. The program must achieve at a minimum, a 15 percent recycling rate in
program year 2023 and must include and meet escalating performance goals for each
subsequent year. The performance goals must be based on:
new text end

new text begin (i) the most recent collection data available for the state;
new text end

new text begin (ii) the amount of carpet disposed of annually;
new text end

new text begin (iii) the weight of the carpet that is expected to be available for collection annually; and
new text end

new text begin (iv) actual collection data from other existing stewardship programs.
new text end

new text begin A stewardship plan must state the methodology used to determine these goals. The agency
must review and may adjust the recycling rate and performance goals, based on information
included in the stewardship plan and annual reports, other information provided by the
stewardship organization, and economic and any other relevant information;
new text end

new text begin (11) a discussion of the status of statewide collection infrastructure, processor capacity,
and end markets for discarded carpet and what, if any, additional statewide collection
infrastructure, processor capacity, and end markets are needed to improve the functioning
of the program and meet increasing performance goals;
new text end

new text begin (12) carpet design changes that will be considered to reduce toxicity, water use, or energy
use or to increase recycled content, recyclability, or carpet longevity;
new text end

new text begin (13) a discussion of market development opportunities to expand the use of recovered
carpet, with consideration of expanding processing activity near areas of collection;
new text end

new text begin (14) a financial plan that demonstrates sufficient funding to carry out the stewardship
plan, including the administrative, operational, and capital costs of the plan, and payment
of incentive payments to carpet collectors, processors, and end use markets to assist with
the implementation of this section;
new text end

new text begin (15) annual budgets showing revenue and expenditure projections for the current program
year and for the next three years of the program;
new text end

new text begin (16) a process by which the financial activities of the stewardship organization related
to the implementation of the plan are subject to an annual independent audit, which shall
be reviewed by the agency;
new text end

new text begin (17) baseline information, for the most recent three-year period for which data is available,
on the number of square feet and pounds of carpet sold in this state, by type of carpet pursuant
to subdivision 1, clause (3);
new text end

new text begin (18) a discussion of the feasibility, cost, and effectiveness of labeling the backside of
new carpet with the polymer type or nonpolymer material used to manufacture the carpet
to assist processors in more easily identifying the type of discarded carpet collected for
processing;
new text end

new text begin (19) a description of a mandatory program to train carpet installers on properly managing
discarded carpet so that it can be reused or recycled under this section; and
new text end

new text begin (20) a summary of the consultation process that identifies the consulted stakeholders,
the stakeholder comments raised in the consultation process, and the stewardship
organization's responses to those comments as required under subdivision 7.
new text end

new text begin Subd. 6. new text end

new text begin Stewardship assessment. new text end

new text begin (a) On and after July 1, 2023, a producer must add
a stewardship assessment fee of four cents per square foot to the purchase price of nylon
carpet, polypropylene carpet, and wool carpet, and six cents per square foot to the purchase
price of PET carpet, PTT carpet, blended carpet, and any other types of carpet sold by the
producer in this state. The assessment added under this section must be remitted by the
producer on a quarterly basis to the stewardship organization.
new text end

new text begin (b) The assessment must be added by the producer to the purchase price of all carpet
sold by producers to a Minnesota retailer or distributor or otherwise sold for use in this
state. The assessment must be clearly visible on all invoices or functionally equivalent
billing documents as a separate line item and must be accompanied by a brief description
of the assessment.
new text end

new text begin (c) If the amount of the assessment is too low to properly fund the stewardship program,
the stewardship organization must submit a plan update to the agency to increase the
assessment, subject to agency review and approval in accordance with this section before
the assessment is increased.
new text end

new text begin (d) On and after January 1, 2027, if a fund balance greater than one-half of the program's
annual operating cost is reached, the stewardship organization must submit a plan update
to the agency to reduce the assessment, subject to agency review and approval in accordance
with this section before the assessment is reduced.
new text end

new text begin (e) The assessment fee must be deposited by the stewardship organization into a Federal
Deposit Insurance Corporation (FDIC) insured financial institution, and, if for any reason
this section is repealed, the entire assessment fund balance must be transferred by the
stewardship organization to the state to be deposited into the environmental fund.
new text end

new text begin (f) A stewardship assessment must not be used to pay for any penalties assessed under
this section or for the final disposal or incineration of discarded carpet.
new text end

new text begin Subd. 7. new text end

new text begin Consultation required. new text end

new text begin (a) The stewardship organization must consult with
stakeholders, including retailers, installers, collectors, recyclers, local government, customers,
and citizens, during development of the stewardship plan; solicit stakeholder comments;
and incorporate stakeholder comments regarding the plan to the extent feasible before
submitting a plan to the agency for review.
new text end

new text begin (b) The stewardship organization must invite comments from local governments,
communities, and citizens to report their satisfaction with services, including education and
outreach, provided by the product stewardship program. The information must be submitted
to the agency and used by the agency in reviewing proposed updates or changes to the
stewardship plan.
new text end

new text begin Subd. 8. new text end

new text begin Agency review and approval. new text end

new text begin (a) Within 90 days after receiving a proposed
stewardship plan, the agency must determine whether the plan complies with subdivision
5 and is sufficient to achieve the goals and requirements of this section. If the agency
approves a plan, the agency must notify the applicant of the plan approval in writing. If the
agency rejects a plan, the agency must notify the applicant in writing of the reasons for
rejecting the plan. An applicant whose plan is rejected by the agency must submit a revised
plan to the agency within 60 days after receiving notice of rejection.
new text end

new text begin (b) Any proposed changes to a stewardship plan must be approved by the agency in
writing.
new text end

new text begin Subd. 9. new text end

new text begin Plan availability. new text end

new text begin All draft stewardship plans must be placed on the agency's
website for at least 30 days before agency approval and made available at the agency's
headquarters for public review and comment. All approved stewardship plans must be placed
on the agency's website while the plan is in effect.
new text end

new text begin Subd. 10. new text end

new text begin Conduct authorized. new text end

new text begin The stewardship organization that organizes collection,
transport, and processing of carpet under this section is immune from liability for the conduct
under state laws relating to antitrust, restraint of trade, unfair trade practices, and other
regulation of trade or commerce only to the extent that the conduct is necessary to plan and
implement the organization's chosen organized collection or recycling system.
new text end

new text begin Subd. 11. new text end

new text begin Education materials. new text end

new text begin (a) Producers of carpet or the stewardship organization
must provide retailers, installers, and consumers with educational materials regarding the
stewardship assessment and product stewardship program. The materials must include, but
are not limited to, information regarding available end-of-life management options for carpet
offered through the product stewardship program and information that notifies consumers
that a charge for operating the product stewardship program is included in the purchase
price of carpet sold in the state.
new text end

new text begin (b) Each distributor or retailer must provide the educational materials referenced in this
subdivision to carpet installation contractors and consumers at the time of purchase or
delivery or both.
new text end

new text begin Subd. 12. new text end

new text begin Retailer and distributor responsibilities. new text end

new text begin (a) On and after January 1, 2024,
no carpet may be sold in the state unless the carpet's producer is participating in an approved
stewardship plan.
new text end

new text begin (b) Any retailer or distributor may participate, on a voluntary basis, as a designated
collection point pursuant to a product stewardship program under this section and in
accordance with applicable law.
new text end

new text begin (c) No retailer or distributor shall be found to be in violation of this section if, on the
date the carpet was ordered from the producer or its agent, the producer was listed as
compliant on the agency's website, as provided in subdivision 15.
new text end

new text begin (d) Nothing in this section prohibits a retailer or distributor from selling their inventory
of carpet existing prior to January 1, 2024.
new text end

new text begin Subd. 13. new text end

new text begin Stewardship reports. new text end

new text begin Beginning March 31, 2025, and each March 31
thereafter, the stewardship organization must submit an annual report to the agency describing
the product stewardship program. At a minimum, the report must contain:
new text end

new text begin (1) a description of the methods used to collect, transport, and process carpet in all
regions of the state;
new text end

new text begin (2) the weight of all carpet collected in the seven-county metropolitan area and in the
remainder of the state and a comparison to the performance goals, recycling rates, and
collection infrastructure established in the stewardship plan and, if appropriate, an explanation
stating the reason or reasons performance goals were not met;
new text end

new text begin (3) the amount of discarded carpet collected in the state by method of disposition,
including reuse, recycling, and other methods of processing, including the amount collected
but not reused or recycled, and its methods of ultimate disposition;
new text end

new text begin (4) identification of the facilities processing carpet and the weight processed by type of
carpet listed in subdivision 1, clause (3), at each facility;
new text end

new text begin (5) an evaluation of the program's funding mechanism and budget for each program
year, including a copy of the independent audit;
new text end

new text begin (6) samples of educational materials provided to consumers and an evaluation of the
effectiveness of the materials and the methods used to disseminate the materials;
new text end

new text begin (7) a description of progress made toward achieving carpet design changes in order to
achieve the goals listed in subdivision 5, clause (12);
new text end

new text begin (8) an assessment of how the stewardship organization is achieving the goals of this
section and the goals established in the stewardship plan, including a discussion of each of
the required elements of the stewardship plan under subdivision 5;
new text end

new text begin (9) data necessary to determine whether the amount of the stewardship assessment will
be sufficient to achieve the goals of this section and the goals established in the stewardship
plan and will properly fund the stewardship program; and
new text end

new text begin (10) other information that the agency may request for the purposes of determining
compliance under this section.
new text end

new text begin Subd. 14. new text end

new text begin Sales information. new text end

new text begin Sales information provided to the commissioner under
this section is classified as private or nonpublic data, as specified in section 115A.06,
subdivision 13.
new text end

new text begin Subd. 15. new text end

new text begin Agency responsibilities. new text end

new text begin The agency must provide on its website a list of all
compliant producers and brands participating in stewardship plans that the agency has
approved and a list of all producers and brands the agency has identified as noncompliant
with this section.
new text end

new text begin Subd. 16. new text end

new text begin Local government responsibilities. new text end

new text begin A city, county, or other public agency
may voluntarily participate by serving as a designated collection point by providing education
and outreach, or by using other strategies to assist in meeting product stewardship program
recycling obligations. A city, county, or other public agency providing voluntary assistance
must be reimbursed for all of its expenses by the stewardship organization.
new text end

new text begin Subd. 17. new text end

new text begin Administrative fee. new text end

new text begin (a) The stewardship organization submitting a stewardship
plan must pay the agency an annual administrative fee. The agency must set the fee at an
amount that is adequate to cover the agency's full costs of administering and enforcing this
section.
new text end

new text begin (b) Fees collected under this subdivision are subject to section 16A.1285.
new text end

new text begin (c) The agency must identify the direct program development or regulatory costs it incurs
under this section before the first stewardship plan is submitted and must establish a fee in
an amount adequate to cover those costs, which must be paid by the stewardship organization.
new text end

new text begin (d) The stewardship organization must pay the agency's administrative fee under
paragraph (a) on or before July 1, 2023, and annually thereafter, and the agency's onetime
development fee under paragraph (c) on or before July 1, 2023. Each year after the initial
payment, and notwithstanding paragraph (b), the annual administrative fee may not exceed
five percent of the aggregate stewardship assessment collected under subdivision 6 for the
preceding calendar year.
new text end

new text begin Subd. 18. new text end

new text begin Account created. new text end

new text begin A carpet stewardship account is created as an account in
the special revenue fund. All fees collected by the agency from the stewardship organization
under this section must be deposited in the account. Any earnings from assets of the account
must be credited to the account. Money in the account is appropriated to the commissioner
for the purposes of this section.
new text end

new text begin Subd. 19. new text end

new text begin Duty to provide information. new text end

new text begin Any producer, distributor, retailer, stewardship
organization, or other person must furnish to the agency any information which that person
may have or may reasonably obtain that the agency requests for the purposes of determining
compliance under this section.
new text end

Sec. 2.

Minnesota Statutes 2020, section 115A.142, is amended to read:

115A.142 REPORT TO LEGISLATURE AND GOVERNOR.

As part of the report required under section 115A.121, the commissioner of the Pollution
Control Agency deleted text begin shall deleted text end new text begin must new text end provide a report to the governor and the legislature on the
implementation of deleted text begin section deleted text end new text begin sections 115A.141 and new text end 115A.1415.