SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

SENATE, No. 2600

with committee amendments

STATE OF NEW JERSEY

DATED:  JUNE 18, 2018

      The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 2600, with committee amendments.

      As amended, this bill would establish a fee on the use of single-use carryout bags provided by certain types of stores to customers and dedicate revenue from the fee to the “Healthy Schools and Community Lead Abatement Fund.”

      Specifically, beginning on October 1, 2018, the bill would require each operator of a store to impose a $0.05 fee on a customer for each single-use carryout bag that is provided to the customer.  However, the bill provides that no fee would be charged if the customer is enrolled as a participant in the Supplemental Nutrition Assistance Program (SNAP), the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), or the Work First New Jersey program.  

      “Store” is defined in the bill as a drug store, supermarket, or retail establishment that has over 2,000 square feet of retail space or is part of a chain, and that provides carryout bags to its customers as a result of the sale of a product.  A “chain” is any business with 10 or more locations in the State or nationally and doing business under the same trade name or under common ownership or control, or as franchised outlets of a parent business.  “Single-use carryout bag” is defined as any bag that is not a reusable carryout bag, and would include single-use compostable and non-compostable plastic bags and paper bags.  However, as amended by the committee, the term “single-use carryout bag” would not include any non-handled bag intended to separate and prevent an item from damaging or contaminating another item.

      Under the bill, each store operator would be required to indicate the total number of single-use carryout bags provided to a customer and the total fee charged for the bags on the sales or other receipt given to the customer.  Store operators would retain $0.01 of the fee collected, and pay the remaining $0.04 to the Director of the Division of Taxation, in a manner prescribed by the director.  The director could use up to one percent of the revenues collected to defray the cost of administration of the bill.  The director would deposit the remaining revenues into the “Healthy Schools and Community Lead Abatement Fund” established in the bill.  Moneys in the fund would be used by the Department of Environmental Protection (DEP), in consultation with the Department of Education, the Department of Community Affairs, and the Department of Health, for lead abatement in schools and communities, including:  removal and replacement of water fountains, plumbing, and pipes that contain lead; stripping lead paint from schools and residential dwellings; and other lead abatement programs.

      The bill also would require the DEP to establish a public information program which addresses the harmful environmental effects caused by single-use carryout bags, and encourages consumers to use reusable carryout bags for retail shopping.  The public information program would include information on the fee charged for single-use carryout bags pursuant to the bill.

      Finally, the bill would supersede and preempt any municipal and county rules, regulations, codes, and ordinances concerning the regulation or prohibition of single-use carryout bags or fees charged for those bags, except that the bill would not supersede or preempt any municipal or county rule, regulation, code, or ordinance establishing a prohibition on single-use carryout bags adopted prior to the date the bill is enacted into law.

COMMITTEE AMENDMENTS

      The committee amendments to the bill:

      (1)  change the start date for the fee to October 1, 2018;

      (2)  delete the language that would have exempted any customer 65 years or older from the fee;

      (3)  amend the definition of “single-use carryout bag” to provide that the term does not include any non-handled bag intended to separate and prevent an item from damaging or contaminating another item; and

      (4)  provide that the bill would not supersede or preempt any municipal or county rule, regulation, code, or ordinance establishing a prohibition on single-use carryout bags adopted prior to the date the bill is enacted into law.

FISCAL IMPACT:

      The Office of Legislative Services (OLS) estimates that the bill would result in an indeterminate increase in revenues for the State.  The bill would require each operator of a store, as defined in the bill, to impose a $0.05 fee on a customer for each single-use carryout bag provided to the customer.  An operator would be required to remit $0.04 of the fee to the Director of the Division of Taxation in the Department of the Treasury for deposit into the “Healthy Schools and Community Lead Abatement Fund,” established in the bill.  The OLS is unable to determine the revenues that would be generated from the fee.  Such a determination requires information that is currently unavailable, such as the number of stores that would be required to impose a fee under the bill, the number of single-use carryout bags provided to customers by those stores, and the impact of the fee on single-use carryout bag consumption in the State.   

      The OLS notes that, under the bill, the director would be permitted to use up to one percent of the revenues collected from operators to defray the costs of administration and collection of the fees.  The OLS also notes that the DEP would incur an indeterminate cost to establish a public information program concerning single-use carryout bags and to prepare the annual report required under the bill.  The DEP would likely defray these costs with fees collected under the bill.