BILL REQ. #:  S-0824.1 

Read first time 02/17/11.   Referred to Committee on Environment, Water & Energy.

     AN ACT Relating to market share in electronic waste; amending RCW 70.95N.020, 70.95N.040, 70.95N.050, 70.95N.140, 70.95N.160, 70.95N.180, 70.95N.190, 70.95N.200, 70.95N.220, 70.95N.270, 70.95N.290, and 70.95N.300; and repealing RCW 70.95N.100 and 70.95N.110.

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

Sec. 1   RCW 70.95N.020 and 2006 c 183 s 2 are each amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Authority" means the Washington materials management and financing authority created under RCW 70.95N.280.
     (2) "Authorized party" means a manufacturer who submits an individual independent plan or the entity authorized to submit an independent plan for more than one manufacturer.
     (3) "Board" means the board of directors of the Washington materials management and financing authority created under RCW 70.95N.290.
     (4) "Collector" means an entity licensed to do business in the state that gathers unwanted covered electronic products from households, small businesses, school districts, small governments, and charities for the purpose of recycling and meets minimum standards that may be developed by the department.
     (5) "Contract for services" means an instrument executed by the authority and one or more persons or entities that delineates collection, transportation, and recycling services, in whole or in part, that will be provided to the citizens of the state within service areas as described in the approved standard plan.
     (6) "Covered electronic product" includes a cathode ray tube or flat panel computer monitor having a viewable area greater than ((four)) nine inches when measured diagonally, a desktop computer, a laptop or a portable computer, or a cathode ray tube or flat panel television having a viewable area greater than four inches when measured diagonally that has been used in the state by any covered entity regardless of original point of purchase. "Covered electronic product" does not include: (a) A motor vehicle or replacement parts for use in motor vehicles or aircraft, or any computer, computer monitor, or television that is contained within, and is not separate from, the motor vehicle or aircraft; (b) monitoring and control instruments or systems; (c) medical devices; (d) products including materials intended for use as ingredients in those products as defined in the federal food, drug, and cosmetic act (21 U.S.C. Sec. 301 et seq.) or the virus-serum-toxin act of 1913 (21 U.S.C. Sec. 151 et seq.), and regulations issued under those acts; (e) equipment used in the delivery of patient care in a health care setting; (f) a computer, computer monitor, or television that is contained within a clothes washer, clothes dryer, refrigerator, refrigerator and freezer, microwave oven, conventional oven or range, dishwasher, room air conditioner, dehumidifier, or air purifier; or (g) hand-held portable voice or data devices used for commercial mobile services as defined in 47 U.S.C. Sec. 332 (d)(1).
     (7) "Covered entity" means any household, charity, school district, small business, or small government located in Washington state.
     (8) "Curbside service" means a collection service providing regularly scheduled pickup of covered electronic products from households or other covered entities in quantities generated from households.
     (9) "Department" means the department of ecology.
     (10) "Electronic product" includes a cathode ray tube or flat panel computer monitor having a viewable area greater than ((four)) nine inches when measured diagonally; a desktop computer; a laptop or a portable computer; or a cathode ray tube or flat screen television having a viewable area greater than four inches when measured diagonally.
     (11) "Equivalent share" means the weight in pounds of covered electronic products identified for an individual manufacturer under this chapter as determined by the department under RCW 70.95N.200.
     (12) "Household" means a single detached dwelling unit or a single unit of a multiple dwelling unit and appurtenant structures.
     (13) "Independent plan" means a plan for the collection, transportation, and recycling of unwanted covered electronic products that is developed, implemented, and financed by an individual manufacturer or by an authorized party.
     (14) "Manufacturer" means any person, in business ((or no longer in business but having a successor in interest,)) who, irrespective of the selling technique used, including by means of distance or remote sale:
     (a) Manufactures ((or has manufactured)) a covered electronic product under ((its own brand names)) a brand it owns or is licensed to use for sale in or into this state;
     (b) Assembles ((or has assembled)) a covered electronic product that uses parts manufactured by others for sale in or into this state under the assembler's brand names;
     (c) Resells ((or has resold)) in or into this state under ((its own brand names)) a brand it owns or is licensed to use a covered electronic product produced by other suppliers, including retail establishments that sell covered electronic products under ((their own brand names)) brands they own or are licensed to use;
     (d) Manufactures ((or manufactured)) a cobranded product for sale in or into this state that carries the name of both the manufacturer and a retailer;
     (e) Imports ((or has imported)) a covered electronic product into the United States that is sold in or into this state. However, if the imported covered electronic product is manufactured by any person with a presence in the United States meeting the criteria of manufacturer under (a) through (d) of this subsection, that person is the manufacturer. For purposes of this subsection, "presence" means any person that performs activities conducted under the standards established for interstate commerce under the commerce clause of the United States Constitution; ((or))
     (f) Sells at retail a covered electronic product acquired from an importer that is the manufacturer as described in (e) of this subsection, and elects to register in lieu of the importer as the manufacturer for those products; or
     (g) Assumes the responsibilities of a manufacturer under this section.
     (15) "New entrant" means: (a) A manufacturer of televisions that have been sold in the state for less than ten years; or (b) a manufacturer of desktop computers, laptop and portable computers, or computer monitors that have been sold in the state for less than ((five)) two years. However, a manufacturer of both televisions and computers or a manufacturer of both televisions and computer monitors that is deemed a new entrant under either only (a) or (b) of this subsection is not considered a new entrant for purposes of this chapter.
     (16) (("Orphan product" means a covered electronic product that lacks a manufacturer's brand or for which the manufacturer is no longer in business and has no successor in interest.
     (17))) "Plan's equivalent share" means the weight in pounds of covered electronic products for which a plan is responsible. A plan's equivalent share is equal to the sum of the equivalent shares of each manufacturer participating in that plan.
     (((18))) (17) "Plan's ((return)) market share" means the sum of the ((return)) market shares of each manufacturer participating in that plan.
     (((19))) (18) "Premium service" means services such as at-location system upgrade services provided to covered entities and at-home pickup services offered to households. "Premium service" does not include curbside service.
     (((20))) (19) "Processor" means an entity engaged in disassembling, dismantling, or shredding electronic products to recover materials contained in the electronic products and prepare those materials for reclaiming or reuse in new products in accordance with processing standards established by this chapter and by the department. A processor may also salvage parts to be used in new products.
     (((21))) (20) "Product type" means one of the following categories: Computer monitors; desktop computers; laptop and portable computers; and televisions.
     (((22))) (21) "Program" means the collection, transportation, and recycling activities conducted to implement an independent plan or the standard plan.
     (((23))) (22) "Program year" means each full calendar year after the program has been initiated.
     (((24))) (23) "Recycling" means transforming or remanufacturing unwanted electronic products, components, and by-products into usable or marketable materials for use other than landfill disposal or incineration. "Recycling" does not include energy recovery or energy generation by means of combusting unwanted electronic products, components, and by-products with or without other waste. Smelting of electronic materials to recover metals for reuse in conformance with all applicable laws and regulations is not considered disposal or energy recovery.
     (((25))) (24) "Retailer" means a person who offers covered electronic products for sale at retail through any means including, but not limited to, remote offerings such as sales outlets, catalogs, or the internet, but does not include a sale or lease that is a wholesale transaction with a distributor or a retailer.
     (((26) "Return share" means the percentage of covered electronic products by weight identified for an individual manufacturer, as determined by the department under RCW 70.95N.190.
     (27))) (25) "Reuse" means any operation by which an electronic product or a component of a covered electronic product changes ownership and is used for the same purpose for which it was originally purchased.
     (((28))) (26) "Small business" means a business employing less than fifty people.
     (((29))) (27) "Small government" means a city in the state with a population less than fifty thousand, a county in the state with a population less than one hundred twenty-five thousand, and special purpose districts in the state.
     (((30))) (28) "Standard plan" means the plan for the collection, transportation, and recycling of unwanted covered electronic products developed, implemented, and financed by the authority on behalf of manufacturers participating in the authority.
     (((31))) (29) "Transporter" means an entity that transports covered electronic products from collection sites or services to processors or other locations for the purpose of recycling, but does not include any entity or person that hauls their own unwanted electronic products.
     (((32))) (30) "Unwanted electronic product" means a covered electronic product that has been discarded or is intended to be discarded by its owner.
     (((33))) (31) "White box manufacturer" means a person who manufactured unbranded covered electronic products offered for sale in the state within ten years prior to a program year for televisions or within five years prior to a program year for desktop computers, laptop or portable computers, or computer monitors.
     (32) "Market share" means the percentage of covered electronic products by weight identified for an individual manufacturer, as determined by the department under RCW 70.95N.190.

Sec. 2   RCW 70.95N.040 and 2006 c 183 s 4 are each amended to read as follows:
     (1) By January 1, 2007, and annually thereafter, each manufacturer must register with the department.
     (2) A manufacturer must submit to the department with each registration or annual renewal a fee to cover the administrative costs of this chapter as determined by the department under RCW 70.95N.230.
     (3) The department shall review the registration or renewal application and notify the manufacturer if their registration does not meet the requirements of this section. Within thirty days of receipt of such a notification from the department, the manufacturer must file with the department a revised registration addressing the requirements noted by the department.
     (4) The registration must include the following information:
     (a) The name and contact information of the manufacturer submitting the registration;
     (b) The ((manufacturer's brand names of)) list of brands under which the manufacturer manufactures or sells covered electronic products((, including all brand names sold in the state in the past, all brand names currently being sold in the state, and all brand names for which the manufacturer has legal responsibility under RCW 70.95N.100));
     (c) The method or methods of sale used in the state; and
     (d) Whether the registrant will be participating in the standard plan or submitting an independent plan to the department for approval.
     (5) The registrant shall submit any changes to the information provided in the registration to the department within fourteen days of such change.
     (6) The department shall identify, using all reasonable means, manufacturers that are in business or that are ((no longer in business but that have a successor in interest by examining best available return)) currently selling electronic devices using market share data, product advertisements, and other pertinent data. The department shall notify manufacturers that have been identified and for whom an address has been found of the requirements of this chapter, including registration and plan requirements under this section and RCW 70.95N.050.

Sec. 3   RCW 70.95N.050 and 2006 c 183 s 5 are each amended to read as follows:
     (1) A manufacturer must participate in the standard plan administered by the authority, unless the manufacturer obtains department approval for an independent plan for the collection, transportation, and recycling of unwanted electronic products.
     (2) An independent plan may be submitted by an individual manufacturer or by a group of manufacturers, provided that:
     (a) Each independent plan represents at least a five percent ((return)) market share of covered electronic products; and
     (b) No manufacturer may participate in an independent plan if it is a new entrant or a white box manufacturer.
     (3) An individual manufacturer submitting an independent plan to the department is responsible for collecting, transporting, and recycling its equivalent share of covered electronic products.
     (4)(a) Manufacturers collectively submitting an independent plan are responsible for collecting, transporting, and recycling the sum of the equivalent shares of each participating manufacturer.
     (b) Each group of manufacturers submitting an independent plan must designate a party authorized to file the plan with the department on their behalf. A letter of certification from each of the manufacturers designating the authorized party must be submitted to the department together with the plan.
     (5) Each manufacturer in the standard plan or in an independent plan retains responsibility and liability under this chapter in the event that the plan fails to meet the manufacturer's obligations under this chapter.

Sec. 4   RCW 70.95N.140 and 2006 c 183 s 14 are each amended to read as follows:
     (1) By March 1st of the second program year and each program year thereafter, the authority and each authorized party shall file with the department an annual report for the preceding program year.
     (2) The annual report must include the following information:
     (a) The total weight in pounds of covered electronic products collected and recycled, by county, during the preceding program year including documentation verifying collection and processing of that material. ((The total weight in pounds includes orphan products.)) The report must also indicate and document the weight in pounds received from each nonprofit charitable organization primarily engaged in the business of reuse and resale used by the plan. The report must document the weight in pounds that were received in large quantities from small businesses, small governments, charities and school districts as described in RCW 70.95N.090(5);
     (b) The collection services provided in each county and for each city with a population over ten thousand including a list of all collection sites and services operating in the state in the prior program year and the parties who operated them;
     (c) A list of processors used, the weight of covered electronic products processed by each direct processor, and a description of the processes and methods used to recycle the covered electronic products including a description of the processing and facility locations. The report must also include a list of subcontractors who further processed or recycled unwanted covered electronic products, electronic components, or electronic scrap ((described in section 26(1) of this act,)) including facility locations;
     (d) ((Other documentation as established under section 26(3) of this act;
     (e))) Educational and promotional efforts that were undertaken;
     (((f) The results of sampling and sorting as required in RCW 70.95N.110, including a list of the brand names of covered electronic products by product type, the number of covered electronic products by product type, the weight of covered electronic products that are identified for each brand name or that lack a manufacturer's brand, and the total weight of the sample by product type;
     (g))) (e) The list of manufacturers that are participating in the standard plan; and
     (((h))) (f) Any other information deemed necessary by the department.
     (3) The department shall review each report within ninety days of its submission and shall notify the authority or authorized party of any need for additional information or documentation, or any deficiency in its program.
     (4) All reports submitted to the department must be available to the general public through the internet. Proprietary information submitted to the department under this chapter is exempt from public disclosure under RCW 42.56.270.

Sec. 5   RCW 70.95N.160 and 2006 c 183 s 16 are each amended to read as follows:
     (1) Beginning January 1, 2007, no person may sell or offer for sale an electronic product to any person in the state unless the electronic product is labeled with the ((manufacturer's)) brand the manufacturer owns or is licensed to use. The label must be permanently affixed and readily visible.
     (2) In-state retailers in possession of unlabeled products on January 1, 2007, may exhaust their stock through sales to the public.

Sec. 6   RCW 70.95N.180 and 2006 c 183 s 18 are each amended to read as follows:
     (1) The department shall maintain on its web site the following information:
     (a) The names of the manufacturers and the ((manufacturer's)) brands being used by the manufacturer that are registered with the department under RCW 70.95N.040;
     (b) The names of the manufacturers and the ((manufacturer's)) brands being used by the manufacturer that are participating in an approved plan under RCW 70.95N.050;
     (c) The names and addresses of the collectors and transporters that are listed in registrations filed with the department under RCW 70.95N.240;
     (d) The names and addresses of the processors used to fulfill the requirements of the plans;
     (e) ((Return)) Market and equivalent shares for all manufacturers.
     (2) The department shall update this web site information promptly upon receipt of a registration or a report.

Sec. 7   RCW 70.95N.190 and 2006 c 183 s 19 are each amended to read as follows:
     (1) The department shall determine the ((return)) market share for each manufacturer in the standard plan or an independent plan by ((dividing the weight of covered electronic products identified for each manufacturer by the total weight of covered electronic products identified for all manufacturers in the standard plan or an independent plan, then multiplying the quotient by one hundred)) the following:
     (a) All manufacturers must report the total weight of products sold nationwide in the prior program year;
     (b) The department totals all the weights from all the manufacturers and that equals x; and
     (c) The department then multiplies the manufacturers' total weight of products sold nationwide by x and this equals the manufacturers' market share calculation, which is a percentage.
     (2) For the first program year, the department shall determine the ((return)) market share for such manufacturers using all reasonable means and based on best available information regarding ((return)) market share data from other states and other pertinent data.
     (3) For the second and each subsequent program year, the department shall determine the ((return)) market share for such manufacturers using all reasonable means ((and based on the most recent sampling of covered electronic products conducted in the state under RCW 70.95N.110)) and publically available data.

Sec. 8   RCW 70.95N.200 and 2006 c 183 s 20 are each amended to read as follows:
     (1) The department shall determine the total equivalent share for each manufacturer in the standard plan or an independent plan by dividing the ((return)) market share percentage for each manufacturer by one hundred, then multiplying the quotient by the total weight in pounds of covered electronic products collected in this state for that program year, allowing as needed for the additional credit authorized in subsection (3) of this section.
     (2)(a) By June 1st of each program year, the department shall notify each manufacturer of the manufacturer's equivalent share of covered electronic products to be applied to the previous program year. The department shall also notify each manufacturer of how its equivalent share was determined.
     (b) By June 1st of each program year, the department shall bill any authorized party or authority that has not attained its plan's equivalent share as determined under RCW 70.95N.220. The authorized party or authority shall remit payment to the department within sixty days from the billing date.
     (c) By September 1st of each program year, the department shall pay any authorized party or authority that exceeded its plan's equivalent share.
     (3) Plans that utilize the collection services of nonprofit charitable organizations that qualify for a taxation exemption under section 501(c)(3) of the internal revenue code of 1986 (26 U.S.C. Sec. 501(c)(3)) that are primarily engaged in the business of reuse and resale must be given an additional five percent credit to be applied toward a plan's equivalent share for pounds that are received for recycling from those organizations. The department may adjust the percentage of credit annually.

Sec. 9   RCW 70.95N.220 and 2006 c 183 s 22 are each amended to read as follows:
     (1) For an independent plan and the standard plan, if the total weight in pounds of covered electronic products collected during a program year is less than the plan's equivalent share of covered electronic products for that year, then the authority or authorized party shall submit to the department a payment equal to the weight in pounds of the deficit multiplied by the reasonable collection, transportation, and recycling cost for covered electronic products and an administrative fee. Moneys collected by the department must be deposited in the electronic products recycling account.
     (2) For an independent plan and the standard plan, if the total weight in pounds of covered electronic products collected during a program year is more than the plan's equivalent share of covered electronic products for that year, then the department shall submit to the authority or authorized party, a payment equal to the weight in pounds of the surplus multiplied by the reasonable collection, transportation, and recycling cost for covered electronic products.
     (3) For purposes of this section, the initial reasonable collection, transportation, and recycling cost for covered electronic products is ((forty-five)) twenty cents per pound and the administrative fee is five cents per pound.
     (4) The department may annually adjust the reasonable collection, transportation, and recycling cost for covered electronic products and the administrative fee described in this section. Prior to making any changes in the fees described in this section, the department shall notify the public, including all registered manufacturers, and provide a comment period. The department shall notify all registered manufacturers of any changes to the reasonable collection, transportation, and recycling cost or the administrative fee by January 1st of the program year in which the change is to take place.

Sec. 10   RCW 70.95N.270 and 2006 c 183 s 28 are each amended to read as follows:
     (((1))) By December 31, 2012, the department shall provide a report to the appropriate committees of the legislature that includes the following information:
     (((a))) (1) For each of the preceding program years, the weight of covered electronic products recycled in the state by plan, by county, and in total;
     (((b))) (2) The performance of each plan in meeting its equivalent share, and payments received from and disbursed to each plan from the electronic products recycling account;
     (((c))) (3) A description of the various collection programs used to collect covered electronic products in the state;
     (((d))) (4) An evaluation of how the pounds per capita recycled of covered electronic products in the state compares to programs in other states;
     (((e))) (5) Comments received from local governments and local communities regarding satisfaction with the program, including accessibility and convenience of services provided by the plans;
     (((f))) (6) Recommendations on how to improve the statewide collection, transportation, and recycling system for convenient, safe, and environmentally sound recycling of electronic products; and
     (((g))) (7) An analysis of whether and in what amounts unwanted electronic products and electronic components and electronic scrap exported from Washington have been exported to countries that are not members of the organization for economic cooperation and development or the European union, and recommendations for addressing such exports.
     (((2) By April 1, 2010, the department shall provide a report to the appropriate committees of the legislature regarding the amount of orphan products collected as a percent of the total amount of covered electronic products collected. If the orphan products collected exceed ten percent of the total amount of covered electronic products collected, the department shall report to the appropriate committees of the legislature within ninety days describing the orphan products collected and include recommendations for decreasing the amount of orphan products or alternative methods for financing the collection, transportation, and recycling of orphan products.))

Sec. 11   RCW 70.95N.290 and 2008 c 79 s 1 are each amended to read as follows:
     (1)(a) The authority is governed by a board of directors. The board of directors is comprised of eleven participating manufacturers, appointed by the director of the department. Five board positions are reserved for representatives of the top ten brand owners by ((return)) market share of covered electronic products, and six board positions are reserved for representatives of other brands, including at least one board position reserved for a manufacturer who is also a retailer selling their own private label. The ((return)) market share of covered electronic products used to determine the top ten brand owners for purposes of electing the board must be determined by the department by January 1, 2007.
     (b) The board must have representation from both television and computer manufacturers.
     (2) The board shall select from its membership the chair of the board and such other officers as it deems appropriate.
     (3) A majority of the board constitutes a quorum.
     (4) The directors of the department of ((community, trade, and economic development)) commerce and the department of ecology serve as ex officio members. The state agency directors serving in ex officio capacity may each designate an employee of their respective departments to act on their behalf in all respects with regard to any matter to come before the authority. Ex officio designations must be made in writing and communicated to the authority director.
     (5) The board shall create its own bylaws in accordance with the laws of the state of Washington.
     (6) Any member of the board may be removed for misfeasance, malfeasance, or willful neglect of duty after notice and a public hearing, unless the notice and hearing are expressly waived in writing by the affected member.
     (7) The members of the board serve without compensation but are entitled to reimbursement, solely from the funds of the authority, for expenses incurred in the discharge of their duties under this chapter.

Sec. 12   RCW 70.95N.300 and 2006 c 183 s 31 are each amended to read as follows:
     (1) Manufacturers participating in the standard plan shall pay the authority to cover all administrative and operational costs associated with the collection, transportation, and recycling of covered electronic products within the state of Washington incurred by the standard program operated by the authority to meet the standard plan's equivalent share obligation as described in RCW 70.95N.280(5).
     (2) The authority shall assess charges on each manufacturer participating in the standard plan and collect funds from each participating manufacturer for the manufacturer's portion of the costs in subsection (1) of this section. Such apportionment shall be based on ((return share,)) market share((, any combination of return share and market share, or any other equitable method)). The authority's apportionment of costs to manufacturers participating in the standard plan may not include nor be based on electronic products imported through the state and subsequently exported outside the state. Charges assessed under this section must not be formulated in such a way as to create incentives to divert imported electronic products to ports or distribution centers in other states. The authority shall adjust the charges to manufacturers participating in the standard plan as necessary in order to ensure that all costs associated with the identified activities are covered.
     (3) The authority may require financial assurances or performance bonds for manufacturers participating in the standard plan, including but not limited to new entrants and white box manufacturers, when determining equitable methods for apportioning costs to ensure that the long-term costs for collecting, transporting, and recycling of a covered electronic product are borne by the appropriate manufacturer in the event that the manufacturer ceases to participate in the program.
     (4) Nothing in this section authorizes the authority to assess fees or levy taxes directly on the sale or possession of electronic products.
     (5) If a manufacturer has not met its financial obligations as determined by the authority under this section, the authority shall notify the department that the manufacturer is no longer participating in the standard plan.
     (6) ((The authority shall submit its plan for assessing charges and apportioning cost on manufacturers participating in the standard plan to the department for review and approval along with the standard plan as provided in RCW 70.95N.060.
     (7)))(a) Any manufacturer participating in the standard plan may appeal an assessment of charges or apportionment of costs levied by the authority under this section by written petition to the director of the department. The director of the department or the director's designee shall review all appeals within timelines established by the department and shall reverse any assessments of charges or apportionment of costs if the director finds that the authority's assessments or apportionment of costs was an arbitrary administrative decision, an abuse of administrative discretion, or is not an equitable assessment or apportionment of costs. The director shall make a fair and impartial decision based on sound data. If the director of the department reverses an assessment of charges, the authority must redetermine the assessment or apportionment of costs.
     (b) Disputes regarding a final decision made by the director or director's designee may be challenged through arbitration. The director shall appoint one member to serve on the arbitration panel and the challenging party shall appoint one other. These two persons shall choose a third person to serve. If the two persons cannot agree on a third person, the presiding judge of the Thurston county superior court shall choose a third person. The decision of the arbitration panel shall be final and binding, subject to review by the superior court solely upon the question of whether the decision of the panel was arbitrary or capricious.

NEW SECTION.  Sec. 13   The following acts or parts of acts are each repealed:
     (1) RCW 70.95N.100 (Successor duties) and 2006 c 183 s 10; and
     (2) RCW 70.95N.110 (Covered electronic sampling) and 2006 c 183 s 11.