(1) (a) On or before June 1, 2023, producers or their designated agents shall establish a nonprofit organization to fulfill the requirements of this part 7 and shall provide notification to the department that includes: (I) The name, address, and contact information of a person responsible for ensuring the compliance of the nonprofit organization and participating producers with this part 7; (II) A list of participating producers; and (III) A description of the funding mechanism that the nonprofit organization will use to conduct the needs assessment. (b) Upon receipt of the notification given pursuant to subsection (1)(a) of this section, the executive director shall: (I) Acknowledge receipt of the notification; and (II) Designate the nonprofit organization as the producer responsibility organization to implement and administer the producer responsibility program for statewide recycling. (c) The organization designated by the executive director pursuant to subsection (1)(b)(II) of this section must have a governing board with voting members that represent a diverse range of producers by size and type and represent producers of different types of covered materials. The members of the governing board shall not have more than one member per corporate entity. The governing board of the organization shall include nonvoting members that represent trade associations for types of covered materials. The organization shall provide public notice of any board meetings at least seventy-two hours before the board meeting. (2) The producer responsibility organization shall: (a) Facilitate a needs assessment in consultation with the advisory board; (b) Consult with the advisory board in the development of the plan proposal prior to its submission, including in the development of the cost formulas for reimbursements to service providers pursuant to subsection (3)(a)(III) of this section; (c) Submit a plan proposal in accordance with subsection (4) of this section that covers a period of five years; and (d) Operate and administer the program in accordance with the final plan, the provisions of this part 7, and the rules adopted by the commission under this part 7. (3) (a) On or before September 1, 2023, the organization shall hire an independent third party approved by the executive director to conduct an assessment of the state's recycling needs. The organization shall issue a request for proposals in accordance with the provisions of the "Procurement Code", articles 101 to 112 of title 24, and any rules, for the selection of the independent third party. Prior to the commencement of the needs assessment, the organization shall consult with the advisory board on the scope of the needs assessment and provide any necessary recommendations to the third-party consultant conducting the needs assessment. The needs assessment shall be inclusive of and address the needs of all geographic areas of the state. At a minimum, the needs assessment must identify: (I) The service availability, capacity, performance, and gaps in recycling services provided to residential covered entities throughout the state and the prices paid for recycling services; (II) The documented recycling services costs incurred by public and private service providers to provide recycling services for residential covered entities; (III) Demographic factors and other variables to be considered in the development of reimbursement rates for service providers in accordance with subsection (4)(j) of this section; (IV) The levels of contamination at materials recovery facilities and compost facilities throughout the state and the impacts of contamination on those facilities; (V) The service availability, gaps, and recycling services costs associated with providing recycling services to nonresidential covered entities, with particular attention to small businesses, and which types and locations of nonresidential covered entities could be provided with recycling services that would increase statewide collection and recycling rates in a cost- effective manner; (VI) The processing capacity of existing infrastructure and the additional infrastructure needed to meet or exceed the convenience standards, reduce contamination, and improve the quality of recyclable materials and the projected scenarios for increasing the recycling rate and collection rate of covered materials, as identified pursuant to subsection (3)(a)(XIII) of this section; (VII) An evaluation of the opportunities and costs of various service methods to increase recycling rates overall for specific covered material types; (VIII) A proposed list of covered materials for inclusion in the minimum recyclable list and additional materials that may be collected in different geographic areas through curbside services, drop-off centers, or other means; (IX) The market conditions and opportunities for the use of recycled covered materials in the state and in different geographic areas of the state, including the transportation gaps and opportunities affecting access to markets; (X) Opportunities for the use of innovative new technologies, including artificial intelligence technologies, for the recycling and reuse of covered materials; (XI) The availability and scope of any reuse or refill systems in the state affecting the use of covered materials; (XII) Education needs in the state with respect to the education needs described in section 25-17-707; and (XIII) At least three projected scenarios for increasing the recycling rate and collection rate of covered materials in the state, including recycling rates and collection rates that the state could meet by January 1, 2030, and January 1, 2035, and the operating and capital costs needed to reach each projected scenario, including: (A) A review and assessment of the impact of the exemptions described in sections 25- 17-703 (13)(b), 25-17-703 (25)(b), and 25-17-713 on the feasibility and short-term and long- term success of the program; (B) A review and assessment of the impact of producer exemptions in other international and domestic extended producer responsibility programs implemented by a producer responsibility organization; and (C) A determination of whether any industry sector would be disproportionately impacted as a result of the exemptions described in subsection (3)(a)(XIII)(A) of this section; and (XIV) The capacity, costs, and gaps for compost facilities to process and recover compostable materials. (b) The organization shall consult with the advisory board throughout the needs assessment process and in determining which projected scenario identified pursuant to subsection (3)(a)(XIII) of this section to implement in its plan proposal. (c) On or before January 30, 2024, the organization shall report the results of the needs assessment to the advisory board and the executive director. The executive director shall post the results of the needs assessment on the department's website and provide public notice and an opportunity to comment on the results of the needs assessment. In finalizing the needs assessment, the executive director shall include in the needs assessment a summary of any comments received pursuant to this subsection (3)(c) and identify any significant changes made to the needs assessment based on such comments. (d) On or before March 15, 2024, the executive director shall submit and present the needs assessment to the joint budget committee or any successor committee. In the submittal and presentation, the executive director shall identify the projected scenarios identified pursuant to subsection (3)(a)(XIII) of this section and make a recommendation as to which projected scenario the plan proposal should incorporate. If the joint budget committee approves the executive director's recommendation, the organization shall implement that projected scenario in the plan proposal. If the joint budget committee does not approve the executive director's recommendation, the committee may propose legislation to direct the organization to implement a projected scenario identified pursuant to subsection (3)(a)(XIII) of this section. If the joint budget committee does not approve the executive director's recommendation, the organization shall not implement a scenario or plan without approval of the general assembly acting by bill. (e) On or before May 1, 2029, and on or before May 1 every five years thereafter, the organization shall hire an independent third party approved by the executive director to conduct an updated assessment of the state's recycling needs to reevaluate the program and identify any recycling service needs in the state that are not being met by the program. In consultation with the advisory board, the organization may modify the scope of an updated needs assessment by April 15, 2029, and on or before April 15 every five years thereafter. The organization shall report the results of the updated needs assessment to the executive director in accordance with the reporting requirements set forth in subsection (3)(c) of this section. The organization shall use the findings of the updated needs assessment to create an updated plan proposal and submit the updated plan proposal to the advisory board in accordance with subsection (4) of this section. In consultation with the advisory board and the organization, the executive director may waive the requirement to conduct an updated needs assessment under this subsection (3)(e). (4) On or before February 1, 2025, the organization shall submit a plan proposal for the program to the advisory board, that, except as set forth in subsection (4)(z) of this section, only addresses recycling services for residential covered entities. The plan proposal must cover a period of five years, and an updated plan proposal must be submitted to the advisory board on or before February 1 every five years thereafter. Any updated plan proposal must address recycling services for both residential and any applicable nonresidential covered entities, as identified in the needs assessment pursuant to subsection (3)(a)(V) of this section. In developing the plan proposal and any updated plan proposals, the organization shall solicit and consider input from the advisory board and provide opportunity for additional stakeholder input. To be approved, a plan proposal must: (a) Provide contact information for the organization and a representative of the organization; (b) Describe how the plan proposal will address and implement the findings of the needs assessment; (c) Describe the manner in which the organization solicited and considered input from stakeholders and the advisory board in developing the plan proposal. The organization must provide a summary of any comments about the plan proposal from the advisory board and additional stakeholders and identify changes made to the plan proposal based on the comments. (d) Describe how the organization will notify affected producers of their obligations under this part 7; (e) Describe how the organization will track compliance among producers and will collaborate with the executive director to bring producers into compliance; (f) Include a comprehensive list of the covered materials included in the program in accordance with this part 7; (g) Establish recycling practices that: (I) Meet or exceed the convenience standards; (II) Use open, competitive, and fair procurement practices when entering into contracts with service providers, and, when entering into contracts with private service providers, adopt a preference for service providers with strong labor standards and worker safety practices; (III) Ensure that any covered materials collected for recycling will be transferred to a responsible end market; and (IV) Use environmentally sound management practices; (h) Describe how the organization will work with newspaper publishers and magazine and periodical publishers to accept print or online advertising in lieu of all or a portion of the producer responsibility dues for newspapers, magazines, and periodicals circulated within the state; (i) Establish a funding mechanism that: (I) Does not exceed the direct and indirect costs of implementing the program, including the costs of: (A) Providing recycling services under the program through contracts with service providers or reimbursement of recycling services costs under the reimbursement rates proposed pursuant to subsection (4)(j) of this section; (B) Meeting the reporting requirements set forth in section 25-17-709 (2); (C) Conducting the needs assessment; (D) Developing and updating the final plan; (E) Implementing the education and outreach program set forth in section 25-17-707; (F) Reimbursing the department pursuant to section 25-17-715 for its costs in administering and implementing this part 7, including the costs of the advisory board; and (G) Reimbursing the department pursuant to section 25-17-715 for the costs of enforcing this part 7 pursuant to section 25-17-710; (II) Is funded through producer responsibility dues. The producer responsibility dues must vary by the type of covered material, whether or not the material is readily recyclable, and be based on the net recycling services costs for each covered material in the state. The organization may use up to five percent of the producer responsibility dues collected from producers for administration of the program, over the terms of the program, in accordance with generally accepted accounting principles, but the organization shall not use any producer responsibility dues collected from producers to pay employee bonuses. (III) Requires: (A) Any surplus money generated by the program to be placed back into the program for program improvements or a reduction in producer responsibility dues; (B) The organization to maintain a financial reserve sufficient to operate the program in a fiscally prudent and responsible manner; and (C) Annual updates to the producer responsibility dues schedule to reflect changes in program costs and relevant plan revisions and how the organization will solicit and incorporate input from all producers in setting and revising the annual producer responsibility dues schedule; (IV) Includes eco-modulation factors that lower producer responsibility dues to incentivize: (A) Reductions in the amount of packaging materials used for products; (B) Innovations and practices to enhance the recyclability or commodity value of covered materials; (C) High levels of postconsumer recycled material use; (D) Designs for the reuse and refill of covered materials; and (E) High recycling and refill rates of covered materials; (V) Includes eco-modulation factors that increase producer responsibility dues to discourage: (A) Designs and practices that increase the costs of recycling, reusing, or composting covered materials; (B) Designs and practices that disrupt the recycling of other materials; and (C) Producers from using covered materials that are not on the minimum recyclable list; and (VI) At the request of a producer or producers of a covered material, may include a special assessment paid by the producers of that covered material to cover system improvements that improve the collection and recycling of that covered material or facilitate the addition of the covered material to the list of readily recyclable materials; (j) Include reimbursement rates for one hundred percent of the net recycling services costs of the recycling services provided by service providers under the program consistent with the requirements of section 25-17-706. The reimbursement rates must: (I) Be calculated using an objective cost formula or formulas; (II) Incorporate the relevant cost information identified by the needs assessment pursuant to subsection (3)(a)(III) of this section; (III) Be calculated on a per unit basis such as per ton, per household, or other unit of measurement; and (IV) Take into account: (A) Regional recycling services costs; (B) Population density; (C) The number and types of households served; (D) The collection method used; (E) The revenue generated from covered materials; (F) The amount of inbound contamination and other factors affecting the quality of covered materials; and (G) Other demographic factors identified in the needs assessment pursuant to subsection (3)(a)(III) of this section; (k) Describe the process to evaluate and revise the objective cost formulas as necessary and using documented costs. If the plan proposal includes more than one objective cost formula for recycling services, the plan proposal must describe the conditions under which each formula will be applied. (l) Include a schedule of reimbursement rates for service providers that elect to participate in the program and be reimbursed by the organization for providing recycling services for the program and describe a process for updating the schedule periodically and as necessary; (m) Include a proposed budget and a description of the process used to determine producer responsibility dues, including a de minimis level in which no dues are charged and an optional flat rate for producers below a certain size to minimize the administrative and reporting costs of the producers and the organization; (n) Describe a plan that outlines, if the organization ceases to exist or ceases to administer the program, how any producer responsibility dues that have not been used to implement the program will be transferred to another organization designated by the executive director under subsection (1)(b)(II) of this section to administer the program or will be transferred to the fund to be managed by the department until transferred to another designated organization; (o) Include the minimum recyclable list established in accordance with section 25-17- 706 (1)(a); (p) Set targets for the minimum collection rates, minimum recycling rates, and minimum postconsumer-recycled-content rates for certain types of covered materials, including paper products, glass, metal, and plastic, that the state will strive to meet by January 1, 2030, and January 1, 2035; (q) Describe how the organization plans to continue to increase the state's minimum collection rates, minimum recycling rates, and minimum postconsumer-recycled-content rates after January 1, 2030, and January 1, 2035; (r) Describe how the organization will verify minimum postconsumer-recycled-content rates and how postconsumer-recycled-content rates will be calculated using weight and other metrics and describe any waivers from minimum postconsumer-recycled-content rates granted to a type or subcategory of covered materials and the criteria for evaluating such waivers, including food safety requirements, technological feasibility, or inadequate supply, and how often the waivers will be reviewed; (s) Describe how the organization will provide producers with the opportunity to purchase postconsumer-recycled materials from processors at market prices if the producer is interested in obtaining recycled feedstock to achieve minimum postconsumer-recycled-content rates; (t) Describe how the organization will reduce or offset the producer responsibility dues for any producer or group of producers that fund or operate a collection program that: (I) Covers a specific type of covered material that is not processed by materials recovery facilities; and (II) Has recycling rates that meet or exceed the minimum recycling rate target set forth in the plan proposal pursuant to subsection (4)(p) of this section; (u) Describe how the organization will work with service providers to: (I) Utilize and expand on existing recycling services and infrastructure and existing education and outreach programs; (II) Reduce contamination of covered materials delivered to materials recovery facilities and compost facilities by: (A) Requiring each materials recovery facility and compost facility participating in the program to report annually to the organization on contamination levels at each facility; and (B) Providing funding or other assistance to compost facilities to reduce the costs of managing or increase the effectiveness of efforts to manage contamination and to process and recover compostable packaging materials; (III) Invest in new or upgraded recycling infrastructure; (IV) Propose an approach to measure and report on the use of reusable and refillable covered materials and establish goals and strategies for increasing the use of reusable and refillable covered materials; (V) Mitigate the impacts of covered materials on other materials and equipment at sorting and processing facilities; (VI) Invest in market development for covered materials in the state; and (VII) Increase the recycling of collected covered materials; (v) Describe how the organization will work with and incentivize producers to reduce the packaging of products using covered materials through product design changes, the development or expansion of systems for reusable packaging, and product innovation; (w) Describe how the program will prioritize the use of end markets that return postconsumer recycled materials to their original product type; (x) Describe how the organization will evaluate and monitor the use of responsible end markets through methods such as processor contracts or financial incentives; (y) Describe how the organization will implement the education and outreach program set forth in section 25-17-707; (z) Describe a process and timeline, beginning no later than 2028, to expand recycling services to applicable nonresidential covered entities, as identified in the needs assessment pursuant to subsection (3)(a)(V) of this section; and (aa) Include any additional information required by the department. (5) (a) The advisory board shall review the plan proposal for compliance with this part 7. The advisory board shall consult with the organization throughout its review of the plan proposal. Within ninety days after the submission of the plan proposal to the advisory board, the advisory board shall either provide any recommended amendments to the plan proposal to the organization or, if the advisory board does not have any recommended amendments, forward the plan proposal to the executive director. The organization shall provide responsive answers to the advisory board's recommendations and submit the amended plan proposal to the advisory board within sixty days after its receipt of the recommended amendments. Within forty-five days after the submission of the amended plan proposal to the advisory board, the advisory board shall forward the amended plan proposal to the executive director with its recommendation for approval or rejection and, if applicable, a written explanation of the basis for recommending rejection of the plan proposal. Within eight days after receiving the plan proposal, the executive director shall post the plan proposal on the department's website and provide public notice and an opportunity to comment on the plan proposal. (b) (I) Within one hundred twenty days after receiving the plan proposal or amended plan proposal, the executive director shall: (A) Approve the plan proposal or amended plan proposal; or (B) Reject the plan proposal or amended plan proposal. (II) If the executive director rejects the plan proposal or amended plan proposal, the executive director shall notify the organization of the rejection and the reasons for the rejection, which reasons must be based on the failure of the plan proposal or amended plan proposal to comply with the requirements specified in subsection (4) of this section. The organization must submit a new plan proposal to the advisory board within sixty days after receiving the executive director's rejection. The new plan proposal must be reviewed by the advisory board and the new plan proposal or new amended plan proposal must be reviewed and approved or rejected by the executive director in accordance with subsection (5)(a) of this section and this subsection (5)(b). (c) (I) If the executive director approves the plan proposal or amended plan proposal pursuant to subsection (5)(b)(I) of this section, the executive director shall designate the plan proposal or amended plan proposal as the final plan and shall publish the final plan on the department's website. (II) The organization shall begin implementing the final plan within six months after it is approved. (6) (a) The organization may submit proposed amendments to the final plan annually to the advisory board for inclusion in the annual report under section 25-17-709 (2)(c). At least sixty days prior to the deadline to submit the annual report, the department may request that the organization submit an amendment to the annual plan to address a specific concern or aspect of the plan. At least thirty days prior to submitting the annual report pursuant to section 25-17-709 (2)(a), the organization shall consult with the advisory board on any proposed amendments to the final plan. The advisory board shall submit any proposed amendments to the executive director. The executive director shall approve or reject the proposed amendments based on the plan proposal requirements specified in subsection (4) of this section. (b) The organization shall continue to operate the program in accordance with the final plan pending the approval or rejection of a proposed amendment by the executive director. The executive director's rejection of a proposed amendment pursuant to this subsection (6) does not relieve the organization of its responsibility to continue to operate the program in accordance with the final plan. (7) The executive director shall enforce this part 7 in accordance with section 25-17-710 and the commission shall promulgate rules in accordance with article 4 of title 24 as may be necessary for the administration of this part 7 and the enforcement of this part 7 pursuant to section 25-17-710. Notwithstanding any law to the contrary, the organization may not make any determination as to a person's compliance with this part 7. (8) (a) On January 1, 2025, and each January 1 thereafter, as an alternative to participating in the program, a producer may submit to the advisory board an individual program plan proposal. A producer must notify the department of its intent to submit an individual program plan proposal by January 1, 2024, and by each January 1 thereafter. The individual program plan proposal must: (I) Comply with the requirements of subsection (4) of this section, as applicable; (II) Describe how the producer participating in the individual program plan proposal will contribute to the costs of the department in overseeing the program; (III) Describe how the producer will reimburse service providers that provide recycling services for the covered materials covered by the individual program plan proposal; and (IV) Describe any alternative collection programs run by the producer and its recycling rates. (b) The advisory board shall review and make recommendations on, and the executive director shall approve or reject, any individual program plan proposals in accordance with the procedures set forth in subsection (5) of this section. After the executive director approves the individual program plan proposal, the executive director shall designate the individual program plan proposal as the plan that the producer is authorized to implement and administer as an alternative to participating in the program. (c) The producer implementing a plan described in subsection (8)(b) of this section shall submit any amendments to the plan to the advisory board in accordance with subsection (6) of this section. The advisory board shall review and make recommendations on, and the executive director shall approve or reject, any amendments to the plan in accordance with subsection (6) of this section.
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