1.1 	A bill for an act
1.2 	relating to environment; enacting the Minnesota
1.3 	Electronics Recycling Act of 2005; authorizing
1.4 	rulemaking; providing penalties; amending Minnesota
1.5 	Statutes 2004, section 16C.03, by adding a
1.6 	subdivision; proposing coding for new law in Minnesota
1.7 	Statutes, chapter 116F.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2004, section 16C.03, is
1.10 	amended by adding a subdivision to read:
1.11 		Subd. 18.Contracts with retailers. (a) For the purposes
1.12 	of this subdivision, the definitions in section 116F.505 have
1.13 	the meanings given.
1.14 	(b) A public entity, as defined in section 16B.122, may not
1.15 	contract for the purchase or lease of a covered electronic
1.16 	device from a retailer or manufacturer which has not registered
1.17 	to collect the fee imposed under chapter 116F on its sales in
1.18 	Minnesota or to a destination in Minnesota.
1.19 	(c) Beginning on or after September 1, 2005, each retailer
1.20 	or manufacturer that is offered a contract to sell or lease a
1.21 	covered electronic device subject to a fee under chapter 116F to
1.22 	a public entity must submit to the public entity certification
1.23 	that the retailer or manufacturer is registered to collect fees
1.24 	and acknowledging that the contract may be declared void if the
1.25 	certification is false.
1.26 	
EFFECTIVE DATE. This section is effective for all
2.1 	contracts entered into on or after September 1, 2005.

2.2 	Sec. 2. [116F.505] DEFINITIONS.
2.3 		Subdivision 1.Scope. For the purposes of sections
2.4 	116F.505 to 116F.595, the following terms have the meanings
2.5 	given.
2.6 		Subd. 2.Computer. "Computer" means an electronic,
2.7 	magnetic, optical, electrochemical, or other high speed data
2.8 	processing device performing logical, arithmetic, or storage
2.9 	functions, but does not include an automated typewriter or
2.10 	typesetter, a portable handheld calculator or device, or other
2.11 	similar device.
2.12 		Subd. 3.Consumer. "Consumer" means a person who
2.13 	purchases a covered electronic device in a transaction that is a
2.14 	sale.
2.15 		Subd. 4.Corporation. "Corporation" means the
2.16 	not-for-profit organization established under section 116F.540.
2.17 		Subd. 5.Covered electronic device. "Covered electronic
2.18 	device" means a desktop or personal computer, computer monitor,
2.19 	portable computer, desktop printer, television, or video display
2.20 	device.  Covered electronic device does not include those items
2.21 	when they are:
2.22 	(1) part of a motor vehicle, or any component part of a
2.23 	motor vehicle assembled by or for a vehicle manufacturer or
2.24 	franchised dealer, including replacement parts for use in a
2.25 	motor vehicle;
2.26 	(2) part of a piece of industrial, commercial, or medical
2.27 	equipment, including monitoring or control equipment; or 
2.28 	(3) contained within a clothes washer, clothes dryer,
2.29 	refrigerator, refrigerator and freezer, microwave oven,
2.30 	conventional oven or range, dishwasher, room air conditioner,
2.31 	dehumidifier, or air purifier.
2.32 		Subd. 6.Manufacturer. "Manufacturer" means any person
2.33 	that:
2.34 	(1) manufactures a covered electronic device under its own
2.35 	brand;
2.36 	(2) manufactures a covered electronic device without
3.1 	affixing a brand;
3.2 	(3) resells a covered electronic device produced by other
3.3 	suppliers under its own brand and label; or 
3.4 	(4) imports a covered electronic device into the United
3.5 	States.
3.6 		Subd. 7.Monitor. "Monitor" means a separate visual
3.7 	display component of a computer, whether sold separately or
3.8 	together with a computer central processing unit or computer
3.9 	box, and includes a cathode ray tube, liquid crystal display,
3.10 	gas plasma, digital light processing, or other image projection
3.11 	technology, greater than nine inches when measured diagonally;
3.12 	its case; interior wires and circuitry; cable to the central
3.13 	processing unit; and power cord.
3.14 		Subd. 8.Office. "Office" means the Office of
3.15 	Environmental Assistance.
3.16 		Subd. 9.Portable computer. "Portable computer" means a
3.17 	computer and video display that can be carried by an individual.
3.18 		Subd. 10.Purchase. "Purchase" means the taking, by
3.19 	sale, of title or of the right to use.
3.20 		Subd. 11.Recycling. "Recycling" has the meaning given
3.21 	in section 115A.03.
3.22 		Subd. 12.Retailer. "Retailer" means a person who owns
3.23 	or operates a business that sells new covered electronic devices.
3.24 		Subd. 13.Reuse. "Reuse" means an operation by which a
3.25 	covered electronic device changes ownership to be used for the
3.26 	same purpose for which it was originally put on the market
3.27 	without additional processing or remanufacturing.
3.28 		Subd. 14.Sell or sale. "Sell" or "sale" means any
3.29 	transfer for consideration of title or of the right to use to a
3.30 	consumer, by lease or sales contract, including, but not limited
3.31 	to, transactions conducted through sales outlets, catalogs, or
3.32 	the Internet, or any other similar electronic means, and
3.33 	excluding wholesale transactions with distributors or dealers.
3.34 		Subd. 15.Television. "Television" means a stand-alone
3.35 	display system having a viewable area greater than nine inches
3.36 	when measured diagonally and able to adhere to any standard
4.1 	consumer video formats such as PAL, SECAM, NTSC, AND HDTV and
4.2 	has the capability of selecting different broadcast channels and
4.3 	support sound capability.
4.4 		Subd. 16.Video display device. "Video display device"
4.5 	means a device with an output surface having a viewable area
4.6 	greater than nine inches when measured diagonally that displays
4.7 	moving graphical images or a visual representation of image
4.8 	sequences or pictures, showing a number of quickly changing
4.9 	images on a screen in fast succession to create the illusion of
4.10 	motion, including, if applicable, a device that is an integral
4.11 	part of the display, and cannot be easily removed from the
4.12 	display by the consumer, that produces the moving image on the
4.13 	screen.  Displays typically use a cathode ray tube, liquid
4.14 	crystal display, gas plasma, digital light processing, or other
4.15 	image projection technology.

4.16 	Sec. 3. [116F.515] FEE; EXPENDITURE OF PROCEEDS.
4.17 	(a) Beginning on September 1, 2005, a fee of $10 is imposed
4.18 	upon every sale to a consumer in Minnesota of a new covered
4.19 	electronic device as required by section 116F.530.
4.20 	(b) A retailer that sells a new covered electronic device
4.21 	must collect at the time of sale the fee imposed under paragraph
4.22 	(a) for each new covered electronic device sold to a consumer in
4.23 	the state.
4.24 	(c) A retailer shall transmit all fees collected under this
4.25 	section, minus three percent of total fee revenues which may be
4.26 	retained by the retailer for administrative costs associated
4.27 	with collecting the fee, to the corporation on or before the
4.28 	last day of the month following each quarter, accompanied by any
4.29 	forms prescribed by the corporation.  If a covered electronic
4.30 	device for which the fee has been paid is returned to a retailer
4.31 	under warranty, the fee may be refunded, and the retailer may
4.32 	deduct the amount of the returned fee from the remittance to the
4.33 	corporation.
4.34 	(d) Fees collected by the corporation must be used only for
4.35 	the administrative cost of the corporation to perform its
4.36 	responsibilities under section 116F.540; to fund collection,
5.1 	transportation, and recycling of covered electronic devices; and
5.2 	to promote the collection and recycling of covered electronic
5.3 	devices and market development.  Fees may not be used to pay for
5.4 	activities associated with refurbishment and reuse of covered
5.5 	electronic devices, or for the collection, transportation, or
5.6 	recycling of covered electronic devices that are refurbished and
5.7 	reused.
5.8 	(e) The fee imposed under this section must be clearly
5.9 	identified separately on sales documents from the product price
5.10 	and is not included in the price for purposes of sales taxes.

5.11 	Sec. 4. [116F.520] OFFICE RESPONSIBILITIES.
5.12 	(a) Beginning on July 1, 2007, the office shall report to
5.13 	the legislature on a biennial basis regarding the progress on
5.14 	the implementation of sections 116F.505 to 116F.595, including
5.15 	recommendations for changes to sections 116F.505 to 116F.595
5.16 	that will ensure the most effective collection of electronic
5.17 	product recycling fees and whether the cap on the fee imposed
5.18 	under section 116F.515 should be adjusted.
5.19 	(b) The report must include the following:
5.20 	(1) a list of all parties participating in the system;
5.21 	(2) current collection, transportation, and recycling costs
5.22 	of covered electronic devices;
5.23 	(3) projected sales of covered electronic devices;
5.24 	(4) projected volume of returns of covered electronic
5.25 	devices;
5.26 	(5) actual collection rates during the previous 12-month
5.27 	period plus a yearly growth projection;
5.28 	(6) the total weight of covered electronic devices received
5.29 	during the preceding year by product category, together with the
5.30 	total weight of the products recycled in each product category;
5.31 	and 
5.32 	(7) any surplus funds carried forward.

5.33 	Sec. 5. [116F.525] PROHIBITIONS.
5.34 	(a) A person who is receiving reimbursement from the
5.35 	corporation under sections 116F.505 to 116F.595 must not impose
5.36 	a drop-off or other fee for the collection, transportation, and
6.1 	recycling of covered electronic devices.  Sections 116F.505 to
6.2 	116F.595 do not apply to end-of-life fees in effect for products
6.3 	not covered by those sections.
6.4 	(b) Retailers and manufacturers of covered electronic
6.5 	devices are prohibited from selling covered electronic devices
6.6 	in Minnesota unless they have registered with the corporation
6.7 	and they collect and remit the fees for covered electronic
6.8 	devices required by section 116F.515.

6.9 	Sec. 6. [116F.530] NOT-FOR-PROFIT CORPORATION.
6.10 	A corporation must be established by the office as a
6.11 	nonprofit corporation organized under chapter 317A that
6.12 	qualifies for tax exempt status under United States Code, title
6.13 	26, section 501(c)(3), to administer collected fee proceeds from
6.14 	the retail sale of covered electronic devices.  Retailers of
6.15 	covered electronic devices to consumers in Minnesota are
6.16 	considered to have consented to be members of the not-for-profit
6.17 	corporation.  The corporation shall submit a budget annually to
6.18 	the office and spend no more than five percent of the total fees
6.19 	collected under section 116F.515 for administrative expenses.

6.20 	Sec. 7. [116F.540] CORPORATION RESPONSIBILITIES AND
6.21 	STRUCTURE.
6.22 		Subdivision 1.Responsibilities. (a) The corporation
6.23 	must be governed and operated by a multistakeholder board for
6.24 	fulfilling the responsibility for management of a collection,
6.25 	transportation, and recycling system for covered electronic
6.26 	devices.
6.27 	(b) The corporation must serve, to the extent feasible, all
6.28 	consumers in the state.  The corporation must also rely
6.29 	primarily on existing collection and consolidation
6.30 	infrastructure for handling covered electronic devices to the
6.31 	extent this infrastructure is cost effective and meets the
6.32 	environmentally sound management requirements of section
6.33 	116F.545.
6.34 	(c) The corporation must receive funds collected by the
6.35 	retailers and administer the system for reimbursement of
6.36 	collectors and recyclers.
7.1 	(d) The corporation shall organize and coordinate public
7.2 	outreach.  The corporation shall utilize local and regional
7.3 	authorities to reach local residents and determine appropriate
7.4 	methods for education.
7.5 		Subd. 2.Structure. (a) The corporation shall use the
7.6 	funding for the sole purpose of carrying out the duties of
7.7 	sections 116F.505 to 116F.595.  In the event that expenses from
7.8 	collection, transportation, and recycling activities exceed
7.9 	revenues, the corporation may borrow up to ten percent of the
7.10 	projected annual net fee funds from outside sources.  Borrowed
7.11 	funds must be repaid within two years.
7.12 	(b) On April 1 of each year, the office shall report to the
7.13 	legislature on the implementation of the system during the
7.14 	previous year.  The report must identify the total weight of
7.15 	covered electronic devices received during the preceding year by
7.16 	product category, together with the total weight of products
7.17 	recycled in each product category.  The report must also include
7.18 	a list of all parties participating in the system.
7.19 	(c) The corporation must have a board of directors
7.20 	consisting of 11 members appointed by the director.  The board
7.21 	members shall be appointed for two-year terms, except that for
7.22 	the initial term, three members shall be appointed to one-year
7.23 	terms and four members shall be appointed to two-year terms.
7.24 	The director shall appoint a replacement if any vacancy occurs.
7.25 	The board shall consist of representatives from:
7.26 	(1) five manufacturers of covered electronic devices;
7.27 	(2) two retailers of covered electronic devices;
7.28 	(3) one environmental not-for-profit organization with
7.29 	experience in the recycling of covered electronic devices;
7.30 	(4) one for-profit organization with experience in the
7.31 	recycling of covered electronic devices; and 
7.32 	(5) two government representatives, including one from
7.33 	local government who shall be compensated pursuant to section
7.34 	15.059, subdivision 3.
7.35 	(d) The board shall hire a director who shall run the
7.36 	day-to-day operations of the corporation and report to the board
8.1 	at least once a year.
8.2 		Subd. 3.Coordinating contracts. The corporation shall
8.3 	encourage collectors, transporters, and recyclers of covered
8.4 	electronic devices to coordinate their efforts in order to
8.5 	minimize costs.  All contracts issued by the corporation for
8.6 	recyclers must be competitively bid under a process created by
8.7 	the corporation and may not prohibit or affect any contract,
8.8 	franchise, permit, or other arrangement regarding the collection
8.9 	or recycling of other solid or household hazardous waste.

8.10 	Sec. 8. [116F.545] ENVIRONMENTALLY SOUND MANAGEMENT
8.11 	REQUIREMENTS.
8.12 	(a) Covered electronic devices collected must be recycled
8.13 	or disposed of in a manner that is in compliance with all
8.14 	applicable federal, state, and local laws, regulations, and
8.15 	ordinances, and must not be exported for disposal in a manner
8.16 	that poses a significant risk to the public health or the
8.17 	environment.
8.18 	(b) The corporation shall establish performance
8.19 	requirements for recyclers eligible to receive funds from the
8.20 	corporation.  Recyclers shall, at a minimum, demonstrate
8.21 	compliance with the United States Environmental Protection
8.22 	Agency's Guidance on Environmentally Sound Management of
8.23 	Electronic Products as issued and available on the office's Web
8.24 	site in addition to any other requirements mandated by state law.
8.25 	(c) The office shall keep on file and update a list of
8.26 	recyclers approved to recycle covered electronic devices.  A
8.27 	copy of the list, including all changes to the list since the
8.28 	previous year, must be sent to the corporation annually for use
8.29 	in fulfilling its requirements under section 116F.540.
8.30 	(d) The office is authorized to remove from the list any
8.31 	recycler, who, as the result of an audit by the corporation or
8.32 	the office, has failed to meet the criteria established under
8.33 	paragraph (a) or who has been convicted of violating any
8.34 	federal, state, or local law related to the collection,
8.35 	transport, or processing of covered electronic products.
8.36 	(e) The corporation and its board may not be held
9.1 	financially liable for any violation of a federal, state, or
9.2 	local law by a recycler appearing on the list created and
9.3 	updated by the office.

9.4 	Sec. 9. [116F.550] LEVEL PLAYING FIELD PENALTIES.
9.5 	(a) Beginning September 1, 2005, a manufacturer may not
9.6 	offer for sale in Minnesota a covered electronic device unless a
9.7 	visible, permanent label clearly identifying the brand or
9.8 	manufacturer of that device is affixed to it and, if the
9.9 	manufacturer is also a retailer, the fee under section 116F.515
9.10 	is collected.
9.11 	(b) By July 15, 2005, manufacturers of covered electronic
9.12 	devices must notify retailers that the covered electronics
9.13 	device is subject to the fee in section 116F.515.
9.14 	(c) A violation of this section is subject to a civil
9.15 	penalty in the amount of $1,000 per violation.
9.16 	(d) The money collected and distributed shall be used to
9.17 	offset enforcement expenses.
9.18 	(e) Manufacturers and retailers, upon providing 60-day
9.19 	notice to the attorney general and to a retailer who is not
9.20 	collecting and remitting the fee in section 116F.515, or a
9.21 	manufacturer who is not complying with this section, have the
9.22 	right to sue that manufacturer or retailer for failure to
9.23 	collect or remit the fee to the corporation.  During the 60-day
9.24 	notice period, if the attorney general initiates action against
9.25 	the manufacturer or retailer, then the ability of the
9.26 	manufacturer to sue is extinguished.  The money collected by the
9.27 	attorney general must be used to offset enforcement expenses.
9.28 	Money in excess of the enforcement expenses shall be deposited
9.29 	with the corporation.  Manufacturers and retailers that
9.30 	successfully challenge a noncompliant manufacturer or retailer
9.31 	are entitled to receive their litigation costs as well as double
9.32 	the penalties assessed under paragraph (c).

9.33 	Sec. 10. [116F.560] MARKET DEVELOPMENT.
9.34 	The corporation shall establish a market development
9.35 	program to enhance existing and develop new end markets for
9.36 	remanufactured products and recycled materials.  No more than
10.1 	one percent of corporation funds may be spent on this program.

10.2 	Sec. 11. [116F.575] MANUFACTURERS.
10.3 	(a) Beginning September 1, 2005, a manufacturer must:
10.4 	(1) collect and remit the fee in section 116F.515 on all
10.5 	sales in which the manufacturer acts as a retailer;
10.6 	(2) make information available to consumers describing
10.7 	where and how to return, recycle, and dispose of covered
10.8 	electronic devices through the use of product operation manuals,
10.9 	industry or manufacturer Web sites, product labels, packaging
10.10 	inserts, or toll-free telephone numbers; and 
10.11 	(3) provide recyclers with information on the type and
10.12 	location of hazardous substances in the covered products.
10.13 	(b) Beginning January 1, 2007, a manufacturer must not
10.14 	offer for sale in the state any product or electronic device
10.15 	that is prohibited from being sold or offered for sale in the
10.16 	European Union on or after its date of manufacture, to the
10.17 	extent that Directive 2002/95/EC adopted by the European
10.18 	Parliament on January 27, 2003, and as amended thereafter by the
10.19 	Commission of European Communities, prohibits the sale due to
10.20 	the presence of heavy metals.  This prohibition does not include
10.21 	any product that contains a substance that is used to comply
10.22 	with consumer health or safety requirements that are required by
10.23 	Underwriters Laboratories, the federal government, or the state.
10.24 	(c) Beginning July 1, 2008, and annually thereafter,
10.25 	manufacturers shall make available to the public upon request a
10.26 	report that contains:
10.27 	(1) the total estimated amounts of lead, mercury,
10.28 	hexavalent chromium, cadmium, and polybrominated biphenyls
10.29 	(PBBs) contained in products sold within the state in the
10.30 	previous year;
10.31 	(2) the total estimated amounts of recyclable materials
10.32 	contained in covered electronic devices sold within the state in
10.33 	the previous year, and increases the use of those materials over
10.34 	previous years; and 
10.35 	(3) any efforts to design covered electronic devices for
10.36 	recycling and goals or plans for further increasing design for
11.1 	recycling.
11.2 	(d) In lieu of an individual report, manufacturers may
11.3 	submit the information in a collated report submitted via a
11.4 	trade association provided that information about an individual
11.5 	company can be made available to the office upon written request
11.6 	by the office.  The office may only make such a request for
11.7 	auditing purposes and not more than once during a five-year
11.8 	period.  The office may not make public any confidential
11.9 	business information claimed by the manufacturer in the report.
11.10 	(e) A report submitted to another state or to the federal
11.11 	government that contains the same information as required in
11.12 	this section must be accepted by the office in lieu of a
11.13 	separate report for the state.

11.14 	Sec. 12. [116F.580] REGULATORY AUTHORITY.
11.15 	The office may adopt rules for the purpose of administering
11.16 	sections 116F.505 to 116F.595.

11.17 	Sec. 13. [116F.590] PROGRAM REVIEW.
11.18 	On or after January 1, 2014, the office shall convene a
11.19 	stakeholder group to evaluate the program and make
11.20 	recommendations to the legislature by January 1, 2015, as to
11.21 	whether to:
11.22 	(1) continue or modify the fee under section 116F.515;
11.23 	(2) implement another financing alternative; or 
11.24 	(3) determine that no outside financing mechanism is
11.25 	required to ensure that the system is financially solvent.

11.26 	Sec. 14. [116F.595] FEDERAL PREEMPTION.
11.27 	Upon notification by the office that a national program to
11.28 	collect and recycle covered electronic devices is implemented,
11.29 	sections 116F.505 to 116F.595, to the extent that they are
11.30 	inconsistent with the national program, become inoperative.

11.31 	Sec. 15. EFFECTIVE DATE.
 11.32 	Except as otherwise specified, sections 1 to 15 are
11.33 	effective July 1, 2005.