PROGRAM BllL:I 2 6 7

2010

GOVERNOR'S PROGRAM BILL

MEMORANDUM

AN ACT to amend the tax law, in relation to real estate transfer tax deposits into the environmental protection fund; to amend the environmental conservation law, in relation to the recycling, reuse and safe handling of electronic equipment sold in the state of New York; in relation to hazardous waste program fees and surcharges; and in relation to penalties for enforcement of violations; to repeal section 72-0403 of the environmental conservation law relating to hazardous waste program surcharges; and making appropriations for the support of government

Purpose:

This bill would provide sufficient funding to maintain operations at all New York State parks and historic sites, including all Department of Environmental Conservation (DEC) campgrounds in the Adirondacks and Catskills. In addition, this bill would appropriate $134 million for environmental projects from the Environmental Protection Fund (EPF). This bill would also establish a state-wide electronic equipment reuse and recycling program, the funds from which would be used for the purposes set forth in this bill.

Summary of provisions:

Section 1 of this bill would provide $134 million to support State Fiscal Year (SFY) 2010-11 EPF spending, and $11.2 million for the operation of State parks and campgrounds, under the jurisdiction of the Office of Parks, Recreation and Historic Preservation (OPRHP) and DEC, and require that a certificate of approval be issued by the Director of the Budget before any expenditure ~an be made from these appropriations.

Section 2 ofthis bill would amend Tax Law § 1421 to reduce the amount of real estate transfer tax (RETT) revenu~ deposited into the EPF beginning in fiscal year 2010-11 from $199.3 million to $119.1 million in order to align the revenues with the reduction in EPF appropriations. The bill also removes references related to RETT deposits made to the EPF in previous fiscal years.

Sections 3 through 5 of this bill would enact the Electronic Equipment Recycling and Reuse Act and create a new Title 26 in ECL Article 27 to establish a state-wide electronic equip~ent reuse and recycling program as follows:

ECL § 27-2601 would establish definitions for terms used in the title, including "covered electronic equipment," "computer peripheral," "small electronic equipment," "electronic

waste," "electronic waste collection site," "electronic waste consolidation facility," "electronic waste recycling facility," and "manufacturer."

ECL § 27-2603 would require manufacturers to accept for recycling or reuse electronic waste for which it is the manufacturer from consumers in the State and accept one piece of electronic waste if offered by a consumer, with the purchase of a piece of equipment of the same type beginning April 1,2011. Manufacturers would also be required to take their market share of electronic waste, by weight, as determined by DEC based on the three year average of annual sales in the State .

. This section would also establish a statewide recycling or reuse goal. More specifically:

• For the period April I, 2011 through December 31,2011, the statewide recycling or reuse goal would be 75% of three pounds per capita.

• For calendar year 2012, the statewide recycling or reuse goal would be four pounds per capita.

• For calendar year 2013, the statewide recycling or reuse goal would be five pounds per

capita. . ..

• For calendar year 2014 and thereafter, the statewide recycling or reuse goal would be the base weight multiplied by the goal attainment percentage.

• The base weight is the average of the total amount of weight of electronic waste collected for recycling and reuse in the prior three years.

• The goal attainment percentage ranges from 90-110% based on the relationship of base weight to the prior years statewide recycling or reuse goal.

Each manufacturer would be assigned a proportion of the statewide recycling or reuse goal based on the weight of that manufacturer's market share of sales. This section would also establish recycling surcharges for the failure of manufacturers to meet such standards.

Beginning in calendar year 2014, a manufacturer also would be able to bank, trade or sell credits for the amount of electronic waste it collects in excess of its annual obligation. Such credits would account for a maximum of twenty-five percent of a manufacturer's obligation in a calendar year. A manufacturer that fails to accept its required weight of electronic waste, in the absence of a waiver from DEC, would be subject to a recycling surcharge based on the percent of electronic waste it collected.

ECL § 27-2605' would establish registration requirements for manufacturers of covered electronic equipment sold in the State, and require each manufacturer of covered electronic equipment to register with the DEC by January 1, 2011, pay a $5,000 registration fee; and require any person who becomes a manufacturer after January 1,2011 to register with DEC before selling or offering for sale covered electronic equipment in the State. This section would also prescribe manufacturer responsibilities under Title 26. In summary, this section would prohibit a manufacturer from selling or offering for sale in the State covered electronic equipment unless the manufacturer:

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• Maintains an electronic waste acceptance program through which the manufacturer, either directly or through an agent or designee, accepts e-waste from consumers in the State for recycling or reuse.

• Accepts electronic waste from consumers in the State through methods that are available and reasonably convenient to such consumers.

• Accepts electronic waste free of charge from consumers. Manufacturers would be allowed to charge businesses with 50 or more employees, and not-for-profit corporations with 75 or more employees except such corpor-ations designated under § 501(c)(3) of the

Internal Revenue Code. .

• Accepts, manages and recycles electronic waste in a manner that complies with all applicable laws, rules and regulations.

• . Maintains a public education program to inform consumers in the State about the manufacturer's electronic waste acceptance program, which must include a toll-free telephone number and internet website, to provide written information in the product manual on how to return the manufacturer's covered electronic equipment for reuse or

. recycling and, for appropriate manufacturers, to provide instructions to consumers to on how to destroy personal or confidential information contained in any computer, harddrive orother covered electronic equipment with internal memory, and to make such information available for dissemination by retailers of the manufacturer's products at the time of purchase.

Manufacturers would be permitted to work collectively to satisfy the requirements of this section, subject to the same requirements for individual manufacturers.

ECL § 27-2607, as ofJanuary 1, 2011, would: (1) require retailers to make available information provided by manufacturers on the manufacturers' electronic waste acceptance programs; and (2) prohibit a retailer in the State from selling or offering for sale any covered electronic equipment in the State unless such manufacturer and the manufacturer's brands are registered with DEC. .

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ECL § 27-2609 would require that each piece of covered equipment bearing the manufacturer's brand have an affixed label identifying the manufacturer.

ECL § 27-2611 would establish prohibitions on the disposal of electronic waste in the State. Beginning April 1,2011, a manufacturer, retailer, owner or operator of an electronic waste collection site, electronic waste consolidation facility or electronic waste recycling facility would be prohibited from disposing electronic waste at a solid or hazardous waste management facility in the State. Beginning January 1,2012, any person except an individual or household would be prohibited from disposing of electronic waste at a solid or hazardous waste management facility in the State and waste haulers would be required to provide educational information on the proper disposal of electronic waste. Beginning January 1, 2015, individuals and households would be prohibited from disposing electronic waste at a solid or hazardous waste management facility. Finally, beginning January 1,2012, an owner or operator ofa solid or hazardous waste management facility in the state would be required to educate users of the facility of the proper methods of recycling of electronic waste and to conspicuously post signs at such facility stating that electronic waste may not be disposed there.

ECL §27-2613 would establish minimum standards for electronic waste collection sites, electronic waste consolidation facilities and electronic waste recycling facilities located in the State.

ECL § 27-2615 would: (1) authorize DEC to promulgate rules and regulations necessary for implementation of this title and require DEC to promulgate regulations on reuse, electronic waste acceptance credits, recycling surcharge waivers, and acceptable methods for the determination of sales data; (2) require DEC to maintain and post on its website a list of all registered manufacturers and a list of each manufacturer's brands; and (3) authorize DEC to waive the recycling surcharges payable under ECL § 27-2603 based on a manufacturers application.

ECL § 27-2617 would require manufacturers to submit an annual report beginning March 1, 2012, which would include information for DEC to assess compliance with Title 26. This section would also require manufacturers to pay a $3,000 annual reporting fee. DEC would be required, on or before April 1, 2012 and biennially thereafter, to report to the Governor, Temporary Presidentof the Senate and the Speaker ofthe Assembly on the implementation of Title 26. Such report would include (i) an evaluation of the electronic waste stream in the state and the availability of electronic waste for recycling and reuse, (ii) an evaluation of the electronic waste acceptance, collection, recycling and reuse conducted pursuant to Title 26, (iii) an evaluation of compliance and enforcement of Title 26, (iv) recommendations for amendments to Title 26, and {v) a discussion of opportunities for business development in the state related to electronic waste acceptance, collection, recycling and reuse.

ECL § 27-2619 would establish the preemptive effect of the new law. Specifically, this section would provide that jurisdiction in all matters pertaining to electronic waste recycling and reuse, including the obligations of manufacturers, retailers, electronic waste collection sites, electronic waste consolidation facilities, and electronic waste recycling facilities, is vested exclusively in the State, and any provision of any local law, ordinance or regulation governing such matters shall be preempted upon the effective date of the Act.

ECL § 27-2621 would require fees and charges paid pursuant to under Title 26 be deposited in the EPF.

Sections 6, 7 and 8 of this bill would amend Environmental Conservation Law (ECL) § 72-,0402, and repeal § 72-0403, to consolidate two separate sliding scale fees paid by hazardous waste generators into a single fee of $130 per ton, and to generate approximately $2 million in revenues to fund EPF project expenditures.

Sections 9 and 10 of this bill would amend ECL'§ 72-0201 to make conforming changes· relating to sections 3 and 4 of the bill, and to provide that $2 million of the hazardous waste generator fees would be deposited into the EPF.

Sections 11 through 17 of this bill would amend various sections of Article 71 of the ECL to make modest increases in the fines and penalties, both civil and criminal, for violations of law

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Section 18 of the bill would provide for severability of the act.

applicable to mineral resources, wetlands and air pollution. A portion of these fines would be deposited into the EPF.

Section 19 of the bill would provide the effective date.

The State Finance Law § 92-s created the Environmental Protection Fund. Project and program funding is authorized by ECL Article 54, pursuant to appropriations.

Existing law~

Title 7 (Solid Waste) and Title 9 (Hazardous Waste) ofECL Article 27 authorize DEC to regulate the storage, disposal, transport and treatment of solid and hazardous wastes in an environmentally sound manner, and to encourage recycling, recovery and reuse of all solid and hazardous waste to conserve resources and reduce waste. Title 21 ofECL Article 27 regulates mercury-containing consumer products, which includes some used electronics.

This is a new bil1.

Legislative history:

Statement in support:

This bill would provide necessary funding to allow 178 State Parks and 35 Historic Sites to remain open in SFY 2010-11 while providing "a like amount of general fund support through the reduction of the real estate transfer tax deposit.

New Yorkers look to State parks for affordable family fun, healthful recreation and a place of rest. Parklands shelter countless species of plants and animals, provide for irreplaceable vistas and ecosystems, and provide incredible historic and cultural resources. The State park system is also a sound and pragmatic economic investment, contributing to the vitality and quality of life of local communities and directly supporting New York's tourism industry.

This bill would also provide necessary funding for environmental projects and programs from the Environmental Protection Fund in SFYI0-11. The EPF supports projects administered by DEC and other agencies to protect open space, undertake capital projects and provide grants to municipalities, non-for-profits and schools for critical environmental projects supporting State environmental goals. One of the key programs funded by the EPF is stewardship. At a total of $16.2 million in this bill, Stewardship funds would be used to help DEC and OPRHP manage New York's 4.5 million acres of public land, including 3 million acres of constitutionally protected forest preserve in the Adirondack and Catskill Parks, 750,000 acres of state forest and unique areas, 200,000 acres of wildlife management areas, 610,000 acres of working forest easement lands, and 178 state parks and 35 historic sites. Active management is required to ensure that the many millions of people who hunt, fish, hike, go camping, and observe wildlife are able to access these special places and connect with nature.

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Other categories within the EPF fund successful programs for: municipal recycling and household hazardous waste programs; assessment and recovery of compensationfor natural resource damages to the Hudson River; water quality improvements; the Oceans and Great Lakes initiative; South Shore Estuary Programs; Invasive Species; Land Acquisition; Waterfront Revitalization; Municipal Parks; Farmland Protection; and, Zoos, Botanical Gardens and Aquariums.

Modest increases in the fees and fines proposed in this bill would help to maintain necessary revenues for these important programs.

Over the last twenty years, the world has entered the digital age. The sale of electronics in the U.S. has increased from 61 million units in 1987 to more than 426 million units in 2007. This growth in sales, coupled with rapid technology development that leads to more immediate obsolescence, has facilitated a dramatic growth of the nation's electronics waste stream. The U.S. Environmental Protection Agency (EPA) estimates that the amount of electronic waste entering the waste stream almost doubled between 1999 and 2007, from 7.7 to 14.9 pounds per person per year. While the amount of material collected for recycling has increased somewhat in the last few years; the rate of electronic waste or "e-waste" that has been diverted from the waste stream has remained small. EPA estimates that 10 percent of electronics generated were ultimately recycled in 2000 as compared to 13.6 percent in 2007.

The proliferation of e-waste has created a new challenge for waste management. The presence of certain hazardous constituents in once useful electronic equipment, such as lead, cadmium, mercury and other hazardous constituents makes proper management of e-waste essential to protecting public health and the environment. For example, televisions and computer monitors_with glass screens (CRTs) often contain lead, while those with flat panel screens can contain mercury. Electronic components can contain a variety of hazardous chemicals and compounds.

Currently a comprehensive system for managing the rapidly growing problem of e-waste does not exist in New York State. In the absence of a comprehensive State-wide recycling law, consumers are left with a patchwork oflocal collection options, voluntary programs sponsored by a few manufacturers, and the disposal of a significant amount of e-waste. Collection events hosted by municipalities are expensive, infrequent, and do not effectively address collection in all areas of the State.

In addition, many of the components of electronics are valuable, and can be recycled or reused, materials, including ferrous and non-ferrous metals, precious metals and even glass. Disposal of e-waste wastefully discards these materials.

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This bill proposes to establish a comprehensive State-wide electronic equipment reuse and recycling program using a product stewardship model. The product stewardship model encourages the cost of end-of-life management to be incorporated into the product prices, ensuring that both the product user and manufacturer to playa role in reducing waste. As manufacturers are required to collect, reuse and recycle their own covered electronic equipment,

they will be encouraged to develop (1) products containing fewer hazardous constituents, (2) more reusable components, and (3) products that are ultimately designed with the'environment in mind. Establishing this electronic waste recycling model would provide New York State consumers with an environmentally sound end-of-life management alternative for their e-waste. In addition, an increase of recoverable materials will be realized from the recycling of electronic waste. Recovered materials will in tum be reused in new electronic equipment or other products, decreasing the need for new raw materials. Also, as electronic wastes are diverted from landfills, limited landfill capacity will be saved.

The establislnnent of an electronic equipment reuse and recycling program should be considered this year because attention to the issue of e-waste at the local, state, and national level has been growing. To date, nearly twenty other states have adopted electronic waste recycling laws. In addition, television signals recently switched from analog to digital, which will likely result in an increased number of New York consumers purchasing high definition televisions and discarding older cathode ray tube (CRT) televisions, and spike in the e-waste stream. Establishing a comprehensive electronic equipment reuse and recycling program will protect the health, safety, and welfare of all the citizens of New York State, as well as enhance and maintain the quality of the environment.

This bill would take effect immediately, and be deemed to have been in full force and effect on and after April 1, 2010.

Budget implications:

Proposed new funding critical to keeping parks operating will be offset by reductions to the overall EPF appropriations and additional revenues. Deposits into the EPF from the Real Estate Transfer Tax will be reduced commensurate with the reduced appropriation level of $134 million. Deposits into the EPF from modest increases in fees and fines set forth in this bill would help support this level of funding.

Effective date:

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