MEASURE'S PURPOSE: HB 174/GA establishes an environmental impact fee to be assessed on specific products and a tipping fee to be assessed on solid waste deposited in landfills to finance state and local programs related to solid waste disposal activities.

PROVISION/MECHANICS: HB 174/GA creates new sections of KRS 224 and amends KRS 30A, KRS 224, KRS 224A, KRS 109, KRS 431, KRS 512, and KRS 433 to establish the fund and method of distribution, set state requirements and procedures for compliance, and provides civil fines. Repeals KRS 109.062, KRS 109.320, KRS 224A.270, KRS 224A.280, and KRS 224A.290.

Section 1. Amends KRS 224.43-010 to express the policy of the Commonwealth.

Section 2. Creates a new section of Subchapter 43 of KRS Chapter 224 to provide definitions for Sections 2 to 4 of this Act.

Section 3. Creates a new section of Subchapter 43 of KRS Chapter 224 to provide that, beginning the effective date of this Act, fast-food retail establishments pay ½ of 1 cent ($0.005) for each beverage cup used and that distributors pay ½ of 1 cent ($0.005) for each container sold as an environmental impact fee, authorizes the Revenue Cabinet to establish administrative procedures for fee collection, establishes procedures relating to payments to be made monthly into the Kentucky Pride Fund (created in section 4 below); and provides up to $50,000 per year from the Fund for reimbursement of collection costs incurred by the Revenue Cabinet.

Provides that solid waste landfill operators pay $1.00 per ton of municipal solid waste disposed in the landfill beginning January 1, 2003.

Provides for a penalty of 10% of the amount due to be assessed on distributors, fast food retail establishments, retail establishments, or landfill operators that fail to make payment or file a return on or before the due date. An additional 5% penalty may be assessed for every month the payment is late.

Section 4. Creates a new section of Subchapter 43 of KRS Chapter 224 to establish the Kentucky Pride Fund and a distribution methodology as follows: $9 million to be retained by the Natural Resources and Environmental Protection Cabinet (with the exception that up to $50,000 shall be provided to the Revenue Cabinet for administrative costs) for the closure of abandoned landfills; $9 million to be distributed to counties for the cleanup of open dumps, with certain conditions; up to $10.5 million to be distributed to counties for anti-litter and litter control programs, universal collection programs, recycling, and solid waste infrastructure as identified in the county's solid waste management plan with certain conditions; and $1.5 million to be distributed to the Education, Arts, and Humanities Cabinet for the development and implementation of an environmental education master plan through the Environmental Education Council.

Provides that if the sum total collected exceeds $30 million in any given year, the surplus amount up to $10 million shall be divided between the Kentucky Parks Enhancement Fund (50%) and the Department of Fish and Wildlife Resources (50%) and defines the uses for that money. Any surplus funds beyond $10 million shall be divided between the Kentucky Pride Fund (60%), the Kentucky Parks Enhancement Fund (20%), and the Department for Fish and Wildlife Resources (20%).

Provides that the Natural Resources and Environmental Protection Cabinet require counties receiving assistance to provide a 25% match. Provides that the match may be in the form of "in-kind" services.

Section 5. Amends KRS 224.43-310 to provide that the Natural Resources and Environmental Protection Cabinet is responsible for oversight of open dump cleanup and abandoned landfill closure and the development of minimum standards for waste management plans. Provides that counties or waste management districts be required to make a report on March 1 of each year to the Cabinet relating to the status of solid waste management in its area and the costs of any projects undertaken in accordance with that plan.

Section 6. Amends KRS 224.43-315 to require that each county have a universal collection program by October 1, 2003. Provides that by October 1, 2003, all commercial collection services must register with the counties in which they provide service and continue to register annually as long as they provide that service. Provides that beginning January 1, 2004, all commercial collection services make an annual report to the counties in which they provide service and describes components of the report.

Section 7. Amends KRS 224.43-340 to require counties or solid waste districts to employ a solid waste coordinator who is specifically responsible for implementing the county's solid waste plan. Provides that the solid waste coordinator have powers to enforce criminal littering laws.

Section 8. Amends KRS 224.43-345 to provide that counties receiving moneys must conduct cleanups of county, state and federal roads within their jurisdiction at least three times per year. Provides that counties may use certain inmate labor to conduct cleanups of litter and illegal open dumps and may use funds received from the Kentucky Pride Fund for this purpose; and requires inmates to be paid not less than minimum wage. Provides that if Kentucky Pride moneys do not meet what is necessary to complete this task, the counties will not be held out of compliance.

Provides that cities receiving moneys must conduct cleanups of the city streets twice a year. Provides that if Kentucky Pride moneys do not meet what is necessary to complete this task, the counties will not be held out of compliance.

Provides that solid waste management plans be submitted to the Natural Resources and Environmental Protection Cabinet by October 1, 2002 and be updated every 5 years thereafter. Provides that the Cabinet has 120 days to approve or disprove solid waste management plans, and that plans with no determination after 120 days remain in effect until a determination can be made.

Section 9. Amends KRS 109.042 to provide that counties employ a solid waste coordinator and that the duties of the position be determined by the county or waste management district. Permits the Cabinet to adopt administrative regulations relating to solid waste coordinators.

Section 10. Amends KRS 109.056 to clarify language regarding the use of taxes related to solid waste collection and to provide that the cost of carrying delinquent payments may be used as part of that calculation. Provides that collection fees may be placed on property tax bills; provides for a low income waiver; and provides that if a household does not receive solid waste collection services for an extended period of time, the county or waste management district shall refund the overpayment or provide a credit for the following year. Provides that the charges applied to property tax bills as a result of this Act are no more than the amount necessary to provide the solid waste collection service.

Section 11. Amends KRS 109.059 to describe conditions in which a county or waste management district may require the use of a specific landfill and provides for certain exceptions.

Section 12. Amends KRS 109.300 to provide that counties or waste management districts use all authority granted by law to collect all service charges owed for the provision of solid waste collection services in order to adequately finance the universal collection program required under Section 6 of this Act.

Section 13. Amends KRS 109.310 to authorize procedures for collection of delinquent solid waste service charges as of January 1, 2004; requires delinquent payments must total six (6) months or more; provides for collection of late fees; and requires charges to be collected in the same manner as other county property taxes. Provides that any delinquent solid waste charges placed on property tax bills be increased by 20% and that the proceeds be retained by the county or waste management districts. Provides for a business waiver; provides that the owner of leased property be responsible for delinquent solid waste service charges; and provides that the tax bill clearly show that the charges on the property tax bill are not related to property value.

Section 14. Amends KRS 30A.190 to provide that 60% of all fines imposed under littering statutes be paid to the county in which the violation occurred and 40% be paid to the agency issuing the citation.

Section 15, 16, and 17. Amends KRS 433.753, KRS 433.757, and KRS 512.070 to allow for prepayment of littering offenses to the Circuit Clerk and to include solid waste coordinators in the list of those who can enforce criminal littering laws.

Sections 18 through 23. Amends KRS 109.0415, KRS 109.011, KRS 109.041, KRS 224A.011, KRS 224A.100, and KRS 431.100 to conform to the provisions of this Act.

Section 24. Creates a new section of Subchapter 43 of KRS 224 to provide that the venue for appeals of actions by the Finance and Administration Cabinet, Natural Resources and Environmental Protection Cabinet, or other state agency with regard to programs specified in this Act shall be the county that is the subject of the action.

Section 25. Repeals KRS 109.062, KRS 109.320, KRS 224A.270, KRS 224A.280, and KRS 224A.290.

FISCAL EXPLANATION: The actual fiscal impact of HB 174/GA is indeterminable due to the lack of data and the inability to accurately estimate the revenues that may be generated and, subsequently, expenditures relating to the Act. However, fiscal elements relating to the following sections are identified:

The amount of potential revenue to be generated by the tipping fee cannot be determined since the tonnage disposed in solid waste landfills across the state cannot accurately be predicted. In FY 2000-2001, approximately 5,300,000 tons of waste were collected, which would have resulted in $5,300,000 (5,300,000 tons of solid waste x $1/ton).

Section 4. HB 174/GA provides that, excluding the $50,000 collection costs to be provided to the Revenue Cabinet noted above, $9 million be retained by the Natural Resources and Environmental Protection Cabinet for the closure of abandoned landfills; $9 million be distributed to counties for the cleanup of open dumps, with certain conditions; up to $10.5 million be distributed to counties for anti-litter and litter control programs, universal collection programs, recycling, and solid waste infrastructure as identified in the county's solid waste management plan with certain conditions; and $1.5 million be distributed annually to the Kentucky Environmental Education Council to fund the master plan for environmental education.

HB 174/GA also provides that if the sum total collected exceeds $30 million in any given year, the surplus amount up to $10 million shall be divided between the Kentucky Parks Enhancement Fund (50%) and the Department of Fish and Wildlife Resources (50%). Any funds over $30 million that exceed $10 million shall be divided between the Kentucky Pride Fund (60%), the Kentucky Parks Enhancement Fund (20%), and the Department for Fish and Wildlife Resources (20%).

LRC 2002-0175-hb174-ga