First Regular Session Sixty-eighth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 11-0139.01 Thomas Morris HOUSE BILL 11-1244 HOUSE SPONSORSHIP Fischer, Gardner D., Hullinghorst, Kefalas, Kerr A., Pabon, Ryden, Solano, Tyler, Wilson SENATE SPONSORSHIP Newell and Schwartz, Steadman House Committees Senate Committees Health and Environment A BILL FOR AN ACT Concerning the recycling of consumer electronic devices, and, in connection therewith, requiring video display device manufacturers to register with the department of public health and environment, implement recycling programs, and file periodic reports; requiring recyclers of electronic devices to be certified by the department of public health and environment; and incrementally banning the disposal of covered electronic devices in landfills within a specified time. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill creates the "Consumer Electronics Recycling Act" (act). Manufacturers of eligible electronic devices must implement recycling programs for those products, including educating the public about the programs. Manufacturers are not permitted to sell certain covered electronic devices without an identifying label. Manufacturers must also recycle their market share allocation of their respective markets in Colorado. Manufacturers are required to register with, pay an annual registration fee to, and submit annual reports to the department of public health and environment. The solid and hazardous waste commission must adopt rules to regulate manufacturers' recycling programs, including a tradable recycling credit program, and implement a phased-in ban of the disposal of covered electronic devices in landfills. Processors of eligible electronic devices must be certified, pay the department an annual fee, and comply with recycling and processing standards established by the commission. Collectors must be registered. Retailers may not sell or offer to sell a covered electronic device unless the device is labeled with the manufacturer's brand name and the manufacturer has a recycling plan. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Article 17 of title 25, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PART to read: PART 3 ELECTRONIC DEVICE RECYCLING 25-17-301. Short title. This part 3 shall be known and may be cited as the "Consumer Electronics Recycling Act". 25-17-302. Legislative declaration. (1) The general assembly hereby finds that consumer electronic devices and other consumer products may contain hazardous materials as well as components and materials that are valued as commodities. It is important to create a viable means of recycling these materials for all Colorado citizens through a model of extended producer responsibility in partnership with manufacturers who sell these products within the state. This will eliminate the threat to our environment posed by burying or incinerating harmful materials and prevent the export of toxic materials to countries with insufficient environmental controls in place to recycle them safely. Engaging manufacturers' fiscal and ethical responsibility for management of the products they design and manufacture will encourage manufacturers to make products that are easier to repair, recycle, and reuse. (2) Further, the general assembly's intent in enacting this part 3 is to foster economic growth within this state by creating opportunities for local companies to collect and process materials covered by this part 3. Recycling, reuse, and reconditioning of old electronic devices captures value present in the devices to the benefit of Colorado's citizens and environment by keeping both toxic and valuable materials out of landfills, and thus creating jobs and strengthening local economies. (3) The general assembly finds that consumers currently bear almost all of the costs of recycling electronic devices and that these costs should be shared between consumers and manufacturers more equitably as is currently being done in many other states. Engaging manufacturers as part of the solution results in a system of recycling electronic devices that supports the creation of local jobs and reduces toxic materials in our waste stream. (4) The general assembly declares that the purpose of this part 3 is to establish a comprehensive and convenient electronics recycling and reuse program. The purposes of this program are to: (a) Ensure that consumer electronics products are responsibly reused, reconditioned, or recycled to promote resource conservation through the development of an effective and efficient system for collecting and recycling such products; (b) Require manufacturers to offer a recycling service for certain electronic devices that is convenient and imposes little or no cost on consumers; and (c) Provide education and information to consumers for making informed decisions as well as assurances that their recycled electronic devices are recycled responsibly. 25-17-303. Definitions. As used in this part 3, unless the context otherwise requires: (1) "Brand" means a symbol, logo, word, or mark that identifies a covered electronic device, rather than any of its components. (2) "Collect" or "collection" means the recovery, after manufacture and distribution or initial sale, of an eligible electronic device. The term includes collection through a mail-back program, collection site, collection event, or curbside or home collection. (3) "Collector" means a person that receives an eligible electronic device from a consumer and arranges for delivery of the device to a recycler. (4) "Commission" means the solid and hazardous waste commission created in section 25-15-302. (5) "Consumer" means a natural person who has purchased an eligible electronic device primarily for personal or home business use. (6) (a) "Covered electronic device" means a device that is marketed by a manufacturer for use by a consumer and that is: (I) A television or computer monitor, including a laptop computer, electronic book, notebook computer, or other device determined by the commission by rule, that contains a cathode ray tube or flat panel screen with a screen size that is greater than four inches measured diagonally; or (II) A central processing unit. (b) "Covered electronic device" does not include: (I) A device that is part of a motor vehicle or any component part of a motor vehicle assembled by, or for, a vehicle manufacturer or franchised motor vehicle dealer, including replacement parts for use in a motor vehicle; (II) A device, including a touch screen display, that is functionally or physically part of or connected to a system or equipment designed and intended for use in any of the following settings, including diagnostic, monitoring, or control equipment: (A) Industrial; (B) Commercial, including retail; (C) Library checkout; (D) Traffic control; (E) Security, sensing, monitoring, or counterterrorism; (F) Border control; (G) Medical; or (H) Governmental or research and development; (III) A device that is contained within any of the following: (A) A clothes washer or dryer; (B) A refrigerator or refrigerator and freezer; (C) A microwave oven or conventional oven or range; (D) A dishwasher; or (E) A room air conditioner, dehumidifier, or air purifier; or (IV) Either of the following that does not contain a video display area greater than four inches measured diagonally: (A) A telephone; or (B) A device capable of using commercial mobile radio service as defined in 47 CFR 20.3. (7) "Department" means the department of public health and environment. (8) "Eligible electronic device" means a computer, peripheral, printer, facsimile machine, digital video disc player, video cassette recorder, covered electronic device, or other electronic device specified by rule promulgated by the commission that is sold to a consumer by means of retail, wholesale, or electronic commerce. (9) (a) "Manufacturer" means a person, in business or no longer in business but having a successor in interest, that, irrespective of the selling technique used, including by means of distance or remote sale: (I) Manufactures or has manufactured a covered electronic device under its own brand name for sale in this state; (II) Assembles or has assembled a covered electronic device that is for sale in this state under the assembler's brand name and uses parts manufactured by others; (III) Resells or has resold in this state, under its own brand name, a covered electronic device produced by other suppliers, including a retail establishment that sells covered electronic devices under its own brand name; (IV) Manufactures or manufactured a cobranded covered electronic device for sale in this state that carries the names of both the manufacturer and a retailer; (V) Sells at retail a covered electronic device acquired from an importer that is the manufacturer as described in subparagraph (VI) of this paragraph (a) and elects to register with the department pursuant to section 25-17-305 (3) in lieu of the importer as the manufacturer for those devices; or (VI) Imports or has imported a covered electronic device into the United States that is sold in this state; except that, if the imported covered electronic device is manufactured by any person with a presence in the United States meeting the criteria of a manufacturer under subparagraph (I), (II), (III), or (IV) of this paragraph (a), that person is the manufacturer. For purposes of this subparagraph (VI), a person has a "presence" if the person performs activities conducted under the standards established for interstate commerce under the commerce clause, article I, section 8, clause 3, of the United States constitution. (b) When more than one person is within the definition of a manufacturer of a brand of a covered electronic device, one or more of the persons may assume responsibility as, and satisfy the obligations of, a manufacturer under this part 3 with respect to covered electronic devices bearing that brand. If no person assumes responsibility as, and satisfies the obligations of, a manufacturer under this part 3 with respect to covered electronic devices bearing that brand, the department may consider any one or more persons within the definition to be the manufacturer of that brand. (c) "Manufacturer" does not include a manufacturer: (I) Of covered electronic devices that the commission determines are of such a character that the devices would not be used by a consumer unless the manufacturer also manufactures one or more covered electronic devices that are of such character as to be used by a consumer; or (II) That sells fewer than two hundred covered electronic devices to consumers in Colorado annually. (10) "Market share" means a manufacturer's prior calendar year's sales of covered electronic devices in weight, expressed as a percentage of the total of all manufacturers' prior year's state sales weight for all covered electronic devices, based on a state population proration derived from national sales data. (11) "Materials of concern" means any of the following: (a) Any device, including a fluorescent light or tube, that contains mercury or polychlorinated biphenyls; (b) A battery; (c) A cathode ray tube or leaded glass; and (d) A whole circuit board. (12) "Peripheral" means a keyboard, mouse, or any other device that is sold exclusively for external use with a computer and provides input or output into or from a computer. (13) "Person" means an individual, business entity, partnership, limited liability company, corporation, not-for-profit corporation, association, governmental entity, public benefit corporation, or public authority. (14) "Processing for reuse" means any method, technique, or process by which eligible electronic devices that would otherwise be disposed of or discarded are instead separated, processed, and returned to their original intended purposes or to other useful purposes as eligible electronic devices. (15) "Program year" means a full calendar year beginning on or after January 1, 2012. (16) "Recycle" or "recycling" means processing, including disassembling, dismantling, shredding, and smelting, an eligible electronic device or its components to recycle a useable component, commodity, or product, including processing for reuse. "Recycling" does not include any process defined as incineration under applicable laws or rules. (17) "Recycler" means a person who processes eligible electronic devices for recycling, reuse, or resale, but does not include telecommunications carriers, telecommunications manufacturers, or commercial mobile service providers with an existing recycling program. (18) "Retailer" means a person who owns or operates a business that sells covered electronic devices directly to a consumer, including through sales outlets, catalogs, or the internet, whether or not the seller has a physical presence in this state. (19) "Sell", "offer for sale", or "sale" means any transfer or offer or solicitation of a transfer, for consideration, of title to a covered electronic device in or into this state. The term includes resales and transactions conducted through sales outlets, catalogs, or the internet or any other similar electronic means, but does not include financing or leasing. 25-17-304. Applicability - liability. (1) The collection and recycling provisions of this part 3 apply to eligible electronic devices used and recycled by consumers in this state. (2) Nothing in this part 3 exempts any person from liability he or she would otherwise have under applicable law. 25-17-305. Manufacturers - sale prohibition - reporting - registration - fees - recycling plan - market share allocation - penalties. (1) Prohibition on sale without brand label. Effective January 1, 2012, a manufacturer shall not sell a covered electronic device in this state unless the manufacturer includes the manufacturer's name and brand, whether owned or licensed by the manufacturer, on the covered electronic device. (2) Annual reports. Effective January 1, 2013, each manufacturer shall annually report to the department, on or before a date and in a format established by rule promulgated pursuant to section 25-17-308 (7), the following: (a) A list of all of the brands the manufacturer is using on its covered electronic devices, regardless of whether it owns or licenses the brand; (b) The total weight of eligible electronic devices received by the manufacturer's recycling program from consumers in this state during the previous program year; (c) The processes and methods used to recycle the eligible electronic devices received from consumers, with documentation verifying proper collection and recovery of recycled material resulting from those processes and methods, including documentation that each collector and recycler used in the manufacturer's recycling program is currently certified pursuant to section 25-17-306; (d) The identity of any collector or recycler with whom the manufacturer contracts for the collection or recycling of eligible electronic devices received from consumers. The identity of a recycler includes the addresses of that recycler's recycling facilities. The identity of a collector or recycler reported under this paragraph (d) is exempt from disclosure pursuant to the "Colorado Open Records Act", article 72 of title 24, C.R.S. (e) The manufacturer's credits received, if any, for working with local government programs, businesses, and nonprofit organizations and in hard-to-serve areas. (3) Registration and fee. By January 1, 2012, each manufacturer shall register with the department pursuant to, and pay to the department a registration fee determined by, rules promulgated pursuant to section 25-17-308 (7). The department shall transmit the fees to the state treasurer, who shall deposit them in the electronics recycling cash fund created in section 25-17-308 (9). (4) Recycling program - market share allocation - collection systems. (a) Effective January 1, 2013, a manufacturer shall: (I) Not sell or offer for sale any covered electronic device in this state unless the manufacturer has adopted and is implementing a recycling plan approved by the department under which the manufacturer offers to collect from consumers and recycle each covered electronic device that is labeled with the manufacturer's brand and any eligible electronic device that imposes little or no cost on the consumer; (II) Annually collect and recycle or arrange for the collection and recycling of its market share allocation of eligible electronic devices by participating in and financing an eligible electronic device recycling program. (b) (I) Each manufacturer's recycling plan must offer eligible electronic device collection services that are reasonably convenient and available and designed to meet the collection needs of consumers in all regions of this state. (II) Systems that can be used, alone or together, to meet the convenience requirements of this paragraph (b) include: (A) Mail-back systems: A manufacturer or its designee may offer a system by which the consumer may return eligible electronic devices through the mail or by common-carrier shipment; (B) Physical collection sites: A manufacturer or its designee may keep open and staffed one or more physical collection sites at which consumers may return eligible electronic devices; (C) Collection events: A manufacturer or its designee may hold one or more collection events at which consumers may return eligible electronic devices; or (D) Curbside or in-home collection: A manufacturer or its designee may provide curbside collection or in-home collection services to residential units. In such cases a charge may be levied for the collection portion only of such service. (c) Wherever possible, manufacturers shall work with existing local government programs, businesses, and nonprofit organizations to accommodate consumers. Manufacturers offering collection services are encouraged to use existing collection infrastructure for handling eligible electronic devices. Such infrastructure may include electronics recyclers and repair shops, municipal or local government transfer stations, recyclers of other commodities, reuse organizations, not-for-profit corporations, retailers, or other suitable operations. (d) Each manufacturer shall, as part of its recycling plan, inform its customers in this state about where and how to return and recycle eligible electronic devices. Each manufacturer shall include collection and recycling information prominently on its web site and shall provide such information to the department. The manufacturer may also include such information in the eligible electronic device's packaging or in printed literature accompanying the sale of the eligible electronic device. Each manufacturer must provide consumers with information on protecting or deleting the data contained on the eligible electronic device being offered for recycling. (5) Immunity for data security. Manufacturers, collectors, recyclers, and their licensors are not liable in any way for personal or financial data or other information that a consumer may leave on an eligible electronic device that is collected or recycled. (6) Fines. The commission shall fine a manufacturer that does not meet its market share allocation annually, beginning with the second program year, in the amount of fifty cents per pound for every pound not recycled. The department shall transmit the fine to the state treasurer, who shall deposit it in the recycling resources economic opportunity fund created in section 25-16.5-106.5 (1). 25-17-306. Collectors and recyclers - registration - certification - fee - compliance. (1) A person shall not act as a collector on or after January 1, 2012, unless the person has registered with the department as a collector. A person shall not act as a recycler on or after January 1, 2012, unless the person has been certified by the department as a recycler. By January 1, 2012, each recycler shall pay to the department an annual certification fee determined by rules promulgated pursuant to section 25-17-308 (7), in an amount that is sufficient to cover the department's direct and indirect administrative costs associated with implementing this part 3 with regard to recyclers. The department shall transmit the fees to the state treasurer, who shall deposit them in the electronics recycling cash fund created in section 25-17-308 (9). (2) A recycler shall comply with the certification and sound environmental management rules promulgated pursuant to section 25-17-309. A collector shall comply with the sound environmental management rules promulgated pursuant to section 25-17-309. 25-17-307. Retailers - conditions upon sale - data security. (1) Effective January 1, 2012, a retailer shall not sell a covered electronic device in Colorado unless: (a) The device has a label that complies with section 25-17-305 (1); and (b) The manufacturer has registered with the department and is included on the state list of manufacturers with recycling plans. (2) A retailer is not liable in any way for personal or financial data or other information that a consumer may leave on a covered electronic device that is collected or recycled. 25-17-308. Department's and commission's duties - rules - fund - repeal. (1) Education. The department or its contractor shall educate consumers about the collection and recycling of eligible electronic devices, the removal of data from a covered electronic device being offered for recycling, and implementation of the landfill ban pursuant to section 25-17-310. The department may award grants from the electronics recycling cash fund created in subsection (9) of this section to local governments for public education about local collection and recycling opportunities and benefits. (2) Web site. The department shall host, or designate another person to host, a web site about eligible electronic device recycling for consumers, with information about the removal of data from a covered electronic device being offered for recycling, links to manufacturers' collection and recycling plans, and information about and links to information about collection events, collection sites, and community recycling programs for eligible electronic devices. Inclusion on the state's web site is not a determination by the state that a manufacturer's recycling plan or actual recycling are in compliance with this part 3 or other laws. (3) Enforcement. (a) The department may conduct audits and inspections to determine compliance under this part 3. The department and the state attorney general, as appropriate, shall enforce this part 3 and assess fines against any manufacturer, retailer, collector, or recycler for failure to comply with this part 3. The department shall transmit the fines to the state treasurer, who shall credit them to the recycling resources economic opportunity fund created in section 25-16.5-106.5 (1) (a). (b) The attorney general may enjoin a violation of the sales prohibitions of this part 3 in an action brought in the name of the state. (4) Market share allocation notification. (a) By August 30 of each year beginning in 2012, the department shall notify each manufacturer of the manufacturer's market share allocation. A manufacturer's market share allocation is the weight in pounds of eligible electronic devices required to be recycled by the manufacturer during the next program year. The department shall calculate the market share allocation for each manufacturer as the percentage of the manufacturer's market share of covered electronic devices that the manufacturer is required to recycle to meet the department's recycling goals for the next program year. (b) The department shall set the market share allocation for manufacturers during the first program year such that the program achieves a goal of recycling three pounds of eligible electronic devices per capita per year within Colorado. During each subsequent program year, the department shall incrementally increase the statewide recycling goal pursuant to rules promulgated by the commission to eventually achieve, to the extent practicable, one hundred percent diversion of the total combined market share of all manufacturers from Colorado's solid waste stream. (5) Financial and proprietary information. Financial and proprietary information submitted to the department under this part 3 is exempt from public disclosure pursuant to the "Colorado Open Records Act", article 72 of title 24, C.R.S. (6) Annual report. (a) The department shall compile the information received from manufacturers, collectors, and recyclers and summarize it, after redacting all financial and proprietary information, in a report to the health and environment committee of the house of representatives and the health and human services committee of the senate, or their successor committees, by April 1 of each year, beginning in the third program year. (b) This subsection (6) is repealed, effective July 1, 2016. (7) Rules - tradable credits. (a) By January 1, 2012, the commission shall adopt such rules as are necessary to implement this part 3. (b) (I) The rules must include credits to be allocated to manufacturers that collect more than the minimum amount of eligible electronic devices required to be collected in a given year. The department shall allocate the credits based on the following criteria: (A) A credit equal to one and one-half multiplied by the amount of eligible electronic devices collected using recyclers located in Colorado; (B) A credit equal to one and one-half multiplied by the amount of eligible electronic devices collected using collection opportunities located in rural areas. For purposes of this sub-subparagraph (B), "rural area" means a county, but not a city and county, in this state that, as of July 1, 2009, has a population of not more than one hundred fifty thousand people and, if the county's population exceeds twenty thousand people, has a growth rate that does not exceed the statewide average for the 2008-2009 period by more than twenty-five percent as defined in the two most recent decennial censuses. (C) A credit equal to one and one-half multiplied by the amount of eligible electronic devices collected and processed for reuse by the manufacturer or its processors; and (D) A credit equal to one and one-half multiplied by the amount of eligible electronic devices donated for reuse by the manufacturer to a primary or secondary public education institution or to a not-for-profit entity that is established under section 501 (c) (3) of the federal "Internal Revenue Code of 1986" and whose principal mission is to assist low-income children or families or to assist the developmentally disabled in Colorado. This sub-subparagraph (D) applies only to eligible electronic devices for which the manufacturer has received a written confirmation that the recipient has accepted the donation. Copies of all written confirmations must be submitted in the annual report required under section 25-17-305. (II) A manufacturer may sell or trade the credits allocated to the manufacturer to another manufacturer that collects less than the minimum percent required to be collected in a given year to offset the shortfall. (c) The rules must establish, as needed: (I) Criteria for the grant program established pursuant to subsection (1) of this section; and (II) Registration and certification fees for manufacturers, collectors, and recyclers in an amount sufficient to cover the department's direct and indirect administrative costs associated with implementing this part 3 with regard to those entities. The fees for manufacturers must be tiered and based on manufacturers' market share. (8) No implied fees. The department shall not assess any fee, including an advanced recycling fee, certification fee, registration fee, or other fee, on consumers, manufacturers, retailers, collectors, or recyclers except as specified in sections 25-17-305 (3) and 25-17-306 (1). (9) Cash fund. The department shall transmit all fees collected pursuant to this part 3 to the state treasurer, who shall credit them to the electronics recycling cash fund, which fund is hereby created in the state treasury. The state treasurer shall credit all interest derived from the investment of revenues in the fund to the fund. The department shall use the revenues credited to the fund to implement this part 3. 25-17-309. Sound environmental management standards - certification - rules. (1) All eligible electronic devices collected pursuant to this part 3 must be collected and recycled in a manner that complies with all applicable federal, state, and local laws and requirements. (2) (a) The commission shall adopt rules no later than January 1, 2012, that establish minimum standards for collectors and recyclers of eligible electronic devices. In establishing standards, the commission shall require that any exports of eligible electronic devices with materials of concern do not violate laws in importing and transit countries, throughout final disposition. Collectors and recyclers shall not use prison labor. The rules must require minimum on-site hazard and worker protections, pollution insurance coverage, adequate controls for eligible electronic devices that are to be reused, and specific requirements for the chain of custody for materials of concern. (b) A collector or recycler that meets the standards established pursuant to paragraph (a) of this subsection (2) shall be considered as a certified collector or recycler. The department may choose to accept third-party certifications in lieu of its own certification. (c) The department shall adopt procedures for the ongoing evaluation of collectors and recyclers. 25-17-310. Landfill ban - rules. (1) By January 1, 2012, the commission shall promulgate a rule to ban the disposal of eligible electronic devices from landfills in this state. The rule must: (a) Take a stepped approach to allow electronics recycling infrastructure to develop in more rural areas; and (b) Take full effect within five years after the effective date of the rule. SECTION 2. 25-16.5-106.5 (1) (a), Colorado Revised Statutes, is amended to read: 25-16.5-106.5. Recycling resources economic opportunity fund - creation - repeal. (1) (a) The recycling resources economic opportunity fund is hereby created in the state treasury, referred to in this section as the "fund". The fund shall consist consists of: (I) (A) Moneys collected for the fund pursuant to sections 25-16-104.5 (3.9) (a) and 25-17-202 (3) (a) (VI) and credited to the fund in accordance with section 25-16-104.5 (3.9) (b). This sub-subparagraph (A) is repealed, effective July 1, 2011. (B) Effective July 1, 2011, moneys collected for the fund pursuant to section 25-16-104.5 (3.9) (a) and credited to the fund in accordance with section 25-16-104.5 (3.9) (b); (II) Any moneys appropriated to the fund by the general assembly; and (III) All other moneys that may be available to the fund, including moneys made available from gifts, grants, or bequests; and (IV) Fines transferred pursuant to section 25-17-308 (3) (a). SECTION 3. Act subject to petition - effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 10, 2011, if adjournment sine die is on May 11, 2011); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part shall not take effect unless approved by the people at the general election to be held in November 2012 and shall take effect on the date of the official declaration of the vote thereon by the governor.