§9–2505.

    (a)    (1)    (i)    Beginning July 1, 2026, and each year thereafter, the producer responsibility organization approved under § 9–2502(a) of this subtitle shall file a registration form with the Department.

            (ii)    The registration form shall include:

                1.    A list of the producers participating in the producer responsibility organization;

                2.    A list of the brands of each producer participating in the producer responsibility organization;

                3.    A list of the covered materials of each producer participating in the producer responsibility organization; and

                4.    The name, address, and contact information of a person responsible for ensuring the producer responsibility organization’s and the member producers’ compliance with this subtitle.

            (iii)    At the time of filing the registration form, the producer responsibility organization shall pay to the Department an annual registration fee, as set by the Department, in an amount sufficient to cover:

                1.    In each year:

                A.    The costs of record keeping under this subtitle, not to exceed $1,000; and

                B.    The costs of developing and updating the list required under § 9–2508 of this subtitle;

                2.    As necessary, the costs of developing and implementing regulations in accordance with § 9–2511 of this subtitle; and

                3.    In 2028 and each year thereafter, the costs of registering service providers under § 9–2507 of this subtitle.

        (2)    (i)    On or after July 1, 2033, a nonprofit organization may request that the Department designate the nonprofit organization as an additional producer responsibility organization.

            (ii)    The Department may designate a nonprofit organization as an additional producer responsibility organization if the Department determines, in coordination with the advisory council established under § 9–2503 of this subtitle, that the designation of the additional producer responsibility organization is necessary to:

                1.    Increase recycling rates; or

                2.    Improve recycling services for a specific type of covered material.

            (iii)    If the Department approves the designation of an additional producer responsibility organization under this subsection, the producer responsibility organization shall:

                1.    Not later than 30 days after being approved by the Department and on or before July 1 each year thereafter, file a registration form with the Department containing the information required under paragraph (2)(ii) of this subsection and pay the annual registration fee described in paragraph (2)(iii) of this subsection; and

                2.    Coordinate with the producer responsibility organization established under paragraph (1) of this subsection, the Department, and local governments to ensure that:

                A.    Recycling services for residents of the State are provided in a seamless manner; and

                B.    Public outreach, education, and communication are provided in a consistent manner.

            (iv)    The producer responsibility organization established under paragraph (1) of this subsection and any additional producer responsibility organizations designated under this paragraph may create a representative organization to represent the participating producer responsibility organizations to implement the requirements of this subtitle.

        (3)    (i)    On or after July 1, 2026, and in accordance with the requirements of this subsection and any regulations adopted by the Department, a producer or group of producers may develop and operate an alternative collection program to collect and manage a type or types of covered material sold, offered for sale, or distributed for sale in or into the State by the producer or producers.

            (ii)    A producer that manages a type of covered material under an approved alternative collection program through reuse, recycling, or composting may wholly or in part offset the producer’s payment obligations under this subtitle.

            (iii)    An alternative collection program shall improve and provide a dedicated collection program for the applicable covered material.

    (b)    (1)    On or before July 1, 2028, and every 5 years thereafter, each producer shall, individually or as part of a producer responsibility organization, submit a producer responsibility plan to the Department for review and approval.

        (2)    Before submitting the plan required under this subsection to the Department, a producer or producer responsibility organization shall:

            (i)    Consult with the advisory council established under § 9–2503 of this subtitle; and

            (ii)    Consider the written recommendations of the advisory council and respond in writing to the advisory council.

        (3)    (i)    Except as provided in subparagraph (ii) of this paragraph, on or after a date established in regulations adopted by the Department under § 9–2511 of this subtitle, a producer may not sell, offer for sale, distribute, or import for sale or distribution covered materials for use in the State unless the producer, individually or as part of a producer responsibility organization, has an approved producer responsibility plan on file with the Department.

            (ii)    A producer is not required to submit a producer responsibility plan to the Department, individually or as part of a producer responsibility organization, if another person has agreed to assume responsibility under this subtitle for any covered material sold, offered for sale, or distributed in or into the State by that producer.

    (c)    (1)    A producer responsibility plan shall:

            (i)    Identify the producers covered by the plan, including the contact information for each participating producer and the producer responsibility organization;

            (ii)    Identify each brand of covered materials covered by the plan;

            (iii)    Require, in accordance with subsection (d) of this section, achievement within 5 years after the date on which the first version of the plan is approved and establish the following performance goals, as relevant and as appropriate, for each covered material type:

                1.    Recycling rates;

                2.    Composting rates;

                3.    Reuse rates;

                4.    Return rates;

                5.    The percentage of covered materials to be waste reduced;

                6.    The percentage of postconsumer recycled content that covered materials are required to contain, including the overall percentage for all covered materials as applicable, and not including compostable materials that cannot contain postconsumer recycled content due to unique chemical or physical properties or health and safety requirements that prohibit the introduction of postconsumer recycled content; and

                7.    Greenhouse gas reduction goals;

            (iv)    Describe, in accordance with subsection (e) of this section, the financing method that will be used to implement the plan;

            (v)    Describe how, for each covered material type, the producer responsibility organization will measure recycling, waste reduction, reuse, composting, and the inclusion of postconsumer recycled content;

            (vi)    Describe how the performance goals established under item (iii) of this paragraph will be met or exceeded;

            (vii)    Include proposals for exemptions from performance targets and statewide requirements for covered materials that cannot be waste reduced or made reusable, recyclable, or compostable due to federal or State health and safety requirements, identifying the specific federal or State requirement and their impact on the covered materials;

            (viii)    Describe infrastructure investments, including goals and outcomes and a description of how the process to offer and select opportunities will be conducted in an open, competitive, and fair manner, how it will address gaps in the system not met by service providers, and the potential financial and legal instruments to be used;

            (ix)    Explain how the program will be paid for by the producer responsibility organization through fees from producers, without any new or additional consumer–facing fee to members of the public, businesses, service providers, the State or any political subdivisions, or any other person who is not a producer, unless the fee is:

                1.    A deposit made in connection with a product’s refill, reuse, or recycling that can be redeemed by a consumer; or

                2.    A charge for service by a service provider, regardless of whether the service provider is registered;

            (x)    Describe activities to be undertaken by the producer responsibility organization during each year to:

                1.    Minimize the environmental impacts and human health impacts of covered materials, including assessing each covered material’s generation of hazardous waste, generation of greenhouse gases, environmental justice impacts, public health impacts, and other impacts;

                2.    Foster the improved design of covered materials;

                3.    Provide funding to expand and increase the convenience of waste reduction, reuse, collection, recycling, and composting services to covered entities;

                4.    Provide for reimbursement rates under subsection (e)(1)(ii) of this section to service providers for statewide coverage of covered services at an optimal level of convenience and service for applicable covered materials on the list established under § 9–2508 of this subtitle; and

                5.    Monitor to ensure that postconsumer materials are delivered to responsible end markets;

            (xi)    Include performance standards for service providers as applicable to the service provided, including:

                1.    Requirements that service providers must accept all required covered materials on the list established under § 9–2508 of this subtitle; and

                2.    Labor standards and safety practices, including safety programs, health benefits, and living wages;

            (xii)    Describe how the producer responsibility organization will treat and protect nonpublic data submitted by service providers;

            (xiii)    Include a description of how the producer responsibility organization will provide technical assistance to service providers in order to assist them in delivering covered materials to responsible end markets;

            (xiv)    Describe how stakeholder comments were considered in the development of the plan;

            (xv)    Describe how staffing and administering the implementation of the plan will be handled;

            (xvi)    Describe the actions taken or that will be taken for public outreach, education, and communication, taking into account that public outreach, education, and communication shall:

                1.    Promote the responsible end–of–life management of covered materials;

                2.    Provide information on how to prevent litter of covered materials;

                3.    Provide recycling and composting instructions that are, to the extent practicable:

                A.    Consistent statewide, taking into account differences among local laws and processing capabilities;

                B.    Easy to understand; and

                C.    Easily accessible; and

                4.    Provide for outreach and education that are:

                A.    Designed to achieve packaging materials management goals and requirements, including the prevention of contamination of covered materials;

                B.    Coordinated across programs to avoid confusion for consumers; and

                C.    Developed in consultation with local governments and other stakeholders;

            (xvii)    Describe, in accordance with subsection (f) of this section, the amount of funding that will be used for improving reuse, composting, and recycling in the State;

            (xviii)    Describe the process by which a service provider may request reimbursement for costs associated with transporting, collecting, and processing covered materials that are identified in the plan, including:

                1.    The process by which the request will be reviewed;

                2.    The process for approving or denying a request for reimbursement;

                3.    The schedule for providing reimbursement that includes reimbursement on at least a quarterly basis;

                4.    The process for providing reimbursement for multiple brands of covered materials; and

                5.    The process for resolving, through arbitration, disputes that arise between the producer responsibility organization and a service provider regarding the determination of reimbursement rates and payment of reimbursements;

            (xix)    1.    Provide the written recommendations from the advisory council provided under § 9–2503 of this subtitle and the producer responsibility organization’s written response to the advisory council; and

                2.    Describe how the written recommendations from the advisory council were considered and addressed in the development of the plan; and

            (xx)    Include any other information that is required by the Department.

        (2)    The performance goals established under paragraph (1)(iii) of this subsection do not apply to:

            (i)    Products packaged at establishments under mandatory inspection by the U.S. Department of Agriculture’s Food Safety and Inspection Service in accordance with the federal Meat Inspection Act, the federal Poultry Products Inspection Act, the federal Egg Products Inspection Act, or U.S. Department of Agricultural or U.S. Food and Drug Administration regulations related to cheese packaging;

            (ii)    Products packaged at facilities regulated under State meat and dairy inspection laws; or

            (iii)    For a period of 5 years after the date on which the first version of the plan is approved and established, with an optional extension of 5 years contingent on the development of recycling, including organics recycling, infrastructure capable of handling pathogen–contaminated packaging in a safe and effective manner, cheese, meat, and poultry prepared and packaged at retail locations such as grocery stores, butcher shops, or online retailers.

    (d)    Based on the results of the most recent statewide recycling needs assessment conducted under Chapter 465 of the Acts of the General Assembly of 2023 or § 9–1702.2 of this title, the Department, in coordination with a producer responsibility organization and via the approval of producer responsibility plans, shall establish performance goals for each covered material type using a baseline year that is informed by the statewide recycling needs assessment, including establishing recycling rate goals for each covered material type, at 5–, 10–, and 15–year intervals.

    (e)    (1)    The financing method that will be used by a producer responsibility organization to implement a producer responsibility plan shall:

            (i)    Provide the method for either direct investments or reimbursements for improving infrastructure for reuse, composting, and recycling in accordance with subsection (c)(1)(xvii) of this section, with priority given to the improvement of existing infrastructure;

            (ii)    Subject to paragraph (2) of this subsection:

                1.    Provide a methodology for reimbursement rates for covered services for covered materials, exclusive of exempt materials and producers;

                2.    Incorporate relevant cost information identified by the most recent needs assessment performed under Chapter 465 of the Acts of the General Assembly of 2023 or § 9–1702.2 of this title;

                3.    Be updated annually; and

                4.    Establish reimbursement rates equivalent to:

                A.    At least 50% of the cost per ton on or before July 1, 2028;

                B.    At least 75% of the cost per ton on or before July 1, 2029; and

                C.    At least 90% of the cost per ton on or before July 1, 2030, and each year thereafter;

            (iii)    Subject to paragraph (3) of this subsection, establish a fee structure for participating producers that is set in a manner to cover costs associated with:

                1.    Implementing the plan, including the administrative costs of a producer responsibility organization;

                2.    Reimbursing local governments or service providers for costs in accordance with item (ii) of this paragraph;

                3.    The administration, review, oversight, and enforcement of the plan by the Department; and

                4.    Implementing the strategy in the plan for improving reuse, composting, and recycling in the State in accordance with subsection (c)(1)(xvii) of this section;

            (iv)    1.    Describe the incentives to encourage participating producers to engage in waste reduction and recycling activities; and

                2.    Describe the disincentives to discourage designs or practices that increase the cost of managing packaging materials;

            (v)    Be evaluated by an independent financial auditor, as designated by the Department, to ensure that the costs of implementing the plan are covered; and

            (vi)    Meet any other requirement established by the Department by regulation.

        (2)    The reimbursement rate established under paragraph (1)(ii) of this subsection shall be based on the following, as applicable by service provided:

            (i)    A fixed amount for each ton of covered material collected by a service provider that reflects conditions affecting collection, recycling, and composting costs in the region or jurisdiction where the services were provided, including:

                1.    The number and size of covered entities;

                2.    Population density;

                3.    Collection methods employed;

                4.    The distance traveled to consolidation or transfer facilities, materials recycling facilities, reuse facilities, composting facilities, or responsible end markets;

                5.    Other factors that may contribute to regional or jurisdictional cost differences;

                6.    The proportion of covered compostable materials within all source–separated compostable materials collected or managed through composting; and

                7.    The general quality of covered materials recycled or composted by a service provider;

            (ii)    A fixed amount for each ton of covered material recycled or composted by a service provider in the previous calendar year based on:

                1.    The average costs associated with the transportation and processing, from a central location within a political subdivision, of collected covered material from the political subdivision to a materials recycling facility or composting facility;

                2.    The processing of, and removal of contamination from, covered materials by a materials recycling facility or composting facility;

                3.    The recycling or composting of covered materials less the average fair market value for that covered material based on the market indices for the region, updated monthly;

                4.    Costs associated with the management of contaminated materials removed from the collected covered materials; and

                5.    The proportion of covered compostable materials within all source–separated compostable materials collected or managed through composting;

            (iii)    An additional fixed amount per ton, in excess of the rate provided under subparagraph (ii) of this paragraph, for each covered material type not listed under § 9–2508 of this subtitle that was recycled or composted by a service provider in the previous calendar year, less the average fair market value for the covered material based on the market indices for the region, updated monthly;

            (iv)    A fixed amount for each ton of mixed recycling that is managed through a process that includes percentages of covered materials listed under § 9–2508 of this subtitle and additional covered materials, prorated for the values in item (ii)1 and 2 of this paragraph, based on the most recent waste characterization for mixed recycling ton averages;

            (v)    A fixed amount, based on population served, for administrative costs of service providers, including education, public awareness campaigns, and outreach program costs as applicable; and

            (vi)    A fixed amount for the cost of managing covered materials capable of refill or reusable covered materials and for the costs associated with collection, cleaning, sanitation, distribution, and management of contamination.

        (3)    (i)    Before establishing the fee structure for participating producers under paragraph (1)(iii) of this subsection, the producer responsibility organization shall:

                1.    Publish a proposed fee on its website; and

                2.    Allow 90 calendar days for public comment.

            (ii)    The fee structure established under paragraph (1)(iii) of this subsection shall be variable based on:

                1.    Costs associated with transporting, collecting, and processing covered materials;

                2.    An eco–modulation of fees, including establishing:

                A.    A higher fee for covered materials not listed under § 9–2508 of this subtitle or with low recycled content; and

                B.    A discounted fee for covered materials listed under § 9–2508 of this subtitle or with high recycled content; and

                3.    Any other factor, as determined by the Department.

        (4)    (i)    A producer responsibility organization shall retain any fee collected under this subsection in its own account.

            (ii)    The Department may request at any time an audit of the financial records of a producer responsibility organization.

        (5)    (i)    A service provider shall retain all revenue from the sale of covered materials.

            (ii)    Nothing in this subtitle may be construed to restrict a service provider from charging a fee for covered services of covered materials to the extent that reimbursement from a producer responsibility organization does not cover all costs of services, including:

                1.    Continued investment and innovation in operations;

                2.    Operating profits; and

                3.    Returns on investments required by a service provider to provide sustainability of the services.

    (f)    The funding that will be used for improving reuse, composting, and recycling shall include investment in market development and existing and future reuse, composting, and recycling infrastructure, giving priority to investment in existing infrastructure, including:

        (1)    Installing or upgrading equipment to improve the sorting of packaging materials at existing sorting and processing facilities;

        (2)    Mitigating the impacts of packaging materials on other commodities at existing sorting and processing facilities; and

        (3)    Capital expenditures for new technology, equipment, and facilities, based on the results of the most recent statewide recycling needs assessment conducted under Chapter 465 of the Acts of the General Assembly of 2023 or § 9–1702.2 of this title.

    (g)    The Department shall review:

        (1)    The producer responsibility plan required under subsection (b) of this section; and

        (2)    The work product of the independent financial auditor designated by the Department to evaluate the financing component of the producer responsibility plan under subsection (e)(1)(v) of this section.

    (h)    (1)    Within 120 days after receiving a proposed producer responsibility plan, the Department shall approve, approve with conditions, or reject the plan.

        (2)    In making a determination under paragraph (1) of this subsection, the Department shall consider whether:

            (i)    The producer responsibility plan complies with the requirements of this section, including whether the financing method will cover the costs of implementing the plan; and

            (ii)    The producer responsibility organization engaged sufficiently with stakeholders, including local governments, in developing the plan.

        (3)    Not later than 60 days after the date a producer responsibility plan is initially approved under this section, the entity that submitted the plan shall pay to the Department:

            (i)    The Department’s cost of reviewing the plan; and

            (ii)    The Department’s estimated costs of administering, overseeing, and enforcing the plan between the initial date of approval and the date of the initial annual report required under § 9–2509 of this subtitle.

    (i)    Implementation of an approved producer responsibility plan shall begin not later than 6 months after the date the producer responsibility plan is approved by the Department.

    (j)    (1)    Except as provided in paragraph (2) of this subsection and subject to paragraph (3) of this subsection, an approved producer responsibility plan shall expire after 5 years.

        (2)    A producer responsibility plan may continue after 5 years if it is renegotiated, renewed, or amended and approved by the Department in accordance with this subtitle.

        (3)    The Department may rescind approval of a producer responsibility plan at any time for good cause.

        (4)    If the Department rescinds an approval of a producer responsibility plan under paragraph (3) of this subsection, the producer or, if applicable, the producer responsibility organization may amend the plan and submit it to the Department for approval in accordance with this subtitle.

        (5)    If, based on the annual report submitted under § 9–2509 of this subtitle, the performance goals established under subsection (c)(1)(iii) of this section have not been achieved, the Department may:

            (i)    Require that a producer or producer responsibility organization amend the producer responsibility plan; and

            (ii)    Impose an administrative penalty on a producer or producer responsibility organization in accordance with § 9–2512 of this subtitle.

        (6)    If the Department requires a producer or producer responsibility organization to amend a producer responsibility plan under paragraph (5) of this subsection, the producer or producer responsibility organization shall cover the cost of the Department’s review and supplemental work on the plan.