Michigan House Bill 5902 (2024) - (Introduced)

Packaging or packaging material means a discrete material or category of material, regardless of recyclability, including, but not limited to, paper, plastic, glass, metal, or multi-material, that is used for the containment, protection, handling, delivery, transport, distribution, or presentation of another product that is sold, offered for sale, imported, or distributed in this state.

Including, but not limited to, the following: PET or PETE, HDPE, PVC, LDPE, PP, PS, including expanded polystyrene, other plastic resin types not specifically identified, bioplastics, paper, cardboard, wood, glass, bimetal, steel, and other ferrous metals, aluminum and other nonferrous metals, mixed materials including laminates and packaging containing more than 1 of the materials listed and any other material used for consumer packaging.

Packaging does not include any of the following:

1. Medical devices and packaging that are included with products regulated as a combination product, or as a drug, medical device, or dietary supplement, by the United States Food and Drug Administration
2. Animal biologics, including vaccines, bacterins, antisera, diagnostic kits, and other products of biological origin, and other covered materials regulated by the United States Department of Agriculture under the virus-serum-toxin act
3. Packaging regulated by the federal insecticide, fungicide, and rodenticide act
4. A beverage container

Producer is an individual or entity that manufactures or uses in commercial enterprise a product sold, offered for sale, contained, protected, delivered, presented, or distributed in this state in or using packaging under the brand of the manufacturer.

If there is no brand of the manufacturer, the producer is an individual or entity that is not the manufacturer of the product, but is the owner or licensee of a trademark, regardless of whether the trademark is registered, under which a product is sold, offered for sale, contained, protected, delivered, presented, or distributed in MI in or using packaging.

If there is no brand or licensee, the producer is an individual or entity that imports into the United States or this state a product that is contained, protected, delivered, or presented in packaging, for use in commercial enterprise in MI.

Producer includes a franchisor of a franchise located in MI, but producer does not include the franchisee operating that franchise.

A producer is exempt if the producer realized less than $1,000,000.00 in total gross revenue during the prior calendar year or the producer sold, offered for sale, or distributed in this state products contained, protected, delivered, presented, or distributed in or using less than 1 ton of packaging material in total during the prior calendar year.

Within 1 year after promulgating rules the department shall select and enter into a contract with a nonprofit organization to operate the packaging reduction and recycling program for 10 years as the packaging reduction organization.

The PRO is a nonprofit organization exempt under 26 USC 501(c)(3).

The packaging reduction organization must reimburse local governments for operational costs of managing packaging material including collection, transportation, and processing.

Funds will reimburse local governments and private companies for the costs associated with the implementation of reduction, refill, and reuse programs and collection, transportation, and recycling of packaging materials.

Funds will cover education and outreach.

Funds will cover administration from the department and other state agencies, including administration of the packaging reduction and recycling program and the packaging reduction fund by the packaging reduction organization.

Funds may cover investment in any of the following: collection systems, transportation systems, reuse systems, washing systems, redistribution systems, technology for tracking and data collection, and capital expenditures on new and emerging technology focused on reusable and refillable packaging.

The department shall annually assess fees against producers. The fees shall be calculated based on the total amount, by weight, of each type of packaging material used to contain, protect, deliver, present, or distribute a product sold, offered for sale, or distributed in this state by the producer in the prior calendar year.

Fees will be incentivized for environmental factors. The department shall update and revise the fees every 3 years.

Fees shall incentivize an increase in the proportion of a producer's total packaging that is managed within a reuse and refill system. A fee shall not be assessed on packaging that is designed for reuse and refill and contained within a reuse or refill system.

Fees shall incentivize a reduction in the total packaging, as measured by weight and distributed by producers in this state. Weight reductions shall not be achieved by substituting plastic for other materials.

Fees shall incentivize a reduction in litter from packaging materials and a reduction in toxic substances in packaging materials.

Fees shall incentivize an increase in the proportion of a producer's total packaging that is recyclable as determined by an annual review and an increase in the proportion of a producer's total packaging that is ultimately recycled.

A producer shall do all of the following:

1. Beginning 2 years after the producer first registers with the packaging reduction organization, reduce the amount of packaging used to contain, protect, deliver, present, or distribute products that the producer sells, offers for sale, or distributes for sale into this state, by 10% by weight

2. Beginning 4 years after the producer first registers with the packaging reduction organization, reduce the amount of packaging used to contain, protect, deliver, present, or distribute products that the producer sells, offers for sale, or distributes for sale into this state, by 20% by weight.

3. Beginning 6 years after the producer first registers with the packaging reduction organization, reduce the amount of packaging used to contain, protect, deliver, present, or distribute products that the producer sells, offers for sale, or distributes for sale into this state, by 30% by weight.

4. Beginning 8 years after the producer first registers with the packaging reduction organization, reduce the amount of packaging used to contain, protect, deliver, present, or distribute products that the producer sells, offers for sale, or distributes for sale into this state, by 40% by weight.

5. Beginning 10 years after the producer first registers with the packaging reduction organization, reduce the amount of packaging used to contain, protect, deliver, present, or distribute products that the producer sells, offers for sale, or distributes for sale into this state, by 50% by weight.

The reductions shall be measured against the total amount of packaging the producer used to contain, protect, deliver, present, or distribute products the producer sold, offered for sale, or distributed in this state, during the first year the producer registered with the packaging reduction organization.

The reductions may be achieved by using any of the following strategies: (a) Elimination of packaging components. (b) Reduction of packaging components. (c) Using reuse and refill systems. (d) Packaging rightsizing, light weighting, and optimization.

The weight reductions required shall not be achieved by substituting plastic for other materials. If, when a producer enters the market, 50% or more by weight of its packaging is reusable and contained within a reuse and refill system, upon application from the producer, the department shall waive the packaging reduction requirements.

Any investments made must be approved by the department. The department shall approve or deny proposed investments within 90 days after receipt of a proposal. The department may approve a proposed investment if the proposed investment will meet all of the following requirements:

1. Increase the transition of packaging from non-reusable to reduced, reusable, or refillable packaging.

2. Increase access to reuse and refill infrastructure in this state.

3. Increase the capacity of reuse and refill infrastructure in this state.

4. Provide reuse and refill instructions that are, to the extent practicable, consistent statewide, easy to understand, translated into various commonly used languages, and easily accessible.

5. Provide for outreach and education that are both coordinated across programs or regions to avoid confusion for residents and developed in consultation with local governments and the public.

Beginning 1 year after the execution of a contract with the packaging reduction organization selected through the competitive bidding process, a producer shall not sell, offer for sale, or distribute in this state a product contained, protected, delivered, presented, or distributed in or using packaging unless the producer is both of the following: Registered with the packaging reduction organization and in full compliance with all requirements.

The department shall establish an office of inspector general. The office of inspector general shall evaluate the programs created by this part on an annual basis to ensure that it is properly functioning and that producers are in compliance with the requirements.

A packaging reduction fund is established in the state treasury. The state treasurer shall deposit in the fund producer payments, fines collected, and money and other assets received from any other source for deposit in the fund. The state treasurer shall direct the investment of money in the fund and credit interest and earnings from the investments to the fund. The department is the administrator of the fund for audits of the fund.

The packaging reduction organization shall annually submit a report to the department.

The department shall issue a notice of violation to, and, after providing an opportunity for a hearing, impose an administrative fine not to exceed $100,000.00 per day per violation on, any entity that violates a promulgated rule.

The department shall advise the attorney general of the failure of any person to pay an administrative fine imposed under this section. The attorney general shall bring an action in court of competent jurisdiction to recover the fine.

Each product line that is sold, offered for sale, or distributed in this state to consumers, through retail commerce, including through an internet transaction, and with respect to which a violation occurs, shall be considered the basis for a separate violation.

Any 10 citizens of this state may commence a civil action on their behalf against any individual or entity, including this state, the department, the packaging reduction organization, an individual or group of producers, and the office of inspector general, alleged to be in violation of the requirements of this part or rules promulgated under this part, for declaratory or equitable relief for the enforcement of this part or rules promulgated.

The packaging reduction organization shall prioritize investments for projects that will directly benefit environmental justice communities.

Education and outreach shall be provided to producers for inclusion on their packaging's label to inform consumers about the methods to responsibly reuse, recycle, or dispose of the packaging.

The packaging reduction organization shall conduct public outreach and provide consumers with educational and informational materials related to reducing the amount of packaging discarded, recycled, and disposed of in this state.

Education and outreach shall be coordinated with the various local governments in this state to incorporate electronic, print, web-based, and social media elements that a local government may elect to use, at its discretion, to provide education directly to its residents.

Recyclable describes a product or packaging material that, as determined though the annual review process, meets all of the following requirements:

1. Can be sorted by entities that process post-consumer materials discarded in this state
2. Has a consistent regional market for purchase by end users 25 in the production of new products
3. Can be recycled with minimal losses of material during processing and manufacturing
4. Recyclable does not describe material processed through chemical recycling

Recycling means the series of activities by which material is both of the following: Collected, transported, sorted, and processed and used in industrial feedstocks in place of virgin materials to manufacture new products with minimal loss of material quality and quantity, as determined through the annual review.

Recyclable does not describe material processed through chemical recycling.

Recycling does not include either of the following: Energy recovery, energy generation, or generation of toxic substances by any means, including, but not limited to, chemical recycling, incineration, or combustion and landfill disposal of discarded material or discarded product component materials, including the use of materials as landfill cover.

Beginning 2 years after the promulgation of rules, an individual or entity shall not sell, offer for sale, or distribute in this state packaging containing any of the following toxic substances:
An ortho-phthalate, bisphenol, per- or polyfluoroalkyl substance (PFAS), lead or a lead compound, hexavalent chromium or a hexavalent chromium compound, cadmium or a cadmium compound, mercury or a mercury compound, benzophenone or a benzophenone derivative, halogenated flame retardant, perchlorate, formaldehyde, toluene, antimony or an antimony compound, UV-328 (2-(2H-benzotriazol-2-yl)-4,6-ditert-pentylphenol), polyvinyl chloride, polystyrene, and polycarbonate.

Beginning 3 years after the promulgation of rules, and every 3 years thereafter, the department shall designate at least 10 additional toxic substances or families of toxic substances that shall no longer be sold, offered for sale, or distributed in this state for use in packaging unless it determines there are not at least 10 toxic substances sold, offered for sale, or distributed in this state for use in packaging. If the department determines there are not at least 10 such toxic substances remaining to be designated, it shall publish a detailed statement of its findings supporting the determination and designate those toxic substances that do remain.

Within 180 days after designating a toxic substance, the department shall promulgate rules to prohibit the newly designated toxic substance in packaging, with an effective date not later than 2 years after the designation.

Recycling rate, with respect to a type of packaging material, means the percentage obtained by taking the total weight of that type of packaging material recycled in this state in a given year, dividing by the total weight of that type of packaging material discarded in this state in that year, and multiplying the quotient by 100.

Recycling rate, with respect to all packaging material, means the percentage obtained by taking the total weight of all packaging material recycled in this state in a given year, dividing by the total weight of all packaging material discarded in this state in that year, and multiplying the quotient by 100.

Material losses of contaminants and residues accruing during collection, processing, and manufacturing of new products are not considered recycled and shall not be included in the dividend.

Consistent with applicable competitive bidding requirements, within 1 year after promulgating rules to implement, and every 5 years thereafter, the department shall issue a request for proposals to conduct a statewide packaging reduction, reuse, and recycling needs assessment to identify barriers to and opportunities for reducing, reusing, and recycling packaging materials. The first recycling needs assessment shall be completed within 180 days after the effective date.

The PRO shall reimburse the department and the state treasurer for the costs associated with conducting the needs assessment.

Reuse means the return of packaging back into the economic stream for use in the same kind of application intended for the original packaging, without effectuating a change in the original composition of the packaging, the identity of the product, or the components thereof.

Reuse and refill system means a program or set of mechanisms designed to facilitate multiple uses of packaging. A reuse and refill system may include, but is not limited to, deposits, incentives, curbside collection, collection kiosks, refill stations, dishwashing facilities, and redistribution networks.

Reusable or refillable packaging and containers means packaging material and containers that are specifically designed and manufactured to maintain their shape and structure and be materially durable for repeated sanitizing, washing, and reuse.

The packaging reduction organization shall conduct an annual review to determine whether products and packaging materials are recyclable.

The annual review shall be conducted in consultation with representatives of end markets, including recycled commodities brokers and manufacturers who purchase post-consumer material for use in manufacturing new products.

For the purposes of calculating producer payments and municipal reimbursements under this part, the department shall specify by rule a transitional period between the date the determination is finalized and the date it goes into effect.