8-7-524. Recycling transactions — Definitions.

8-7-524. Recycling transactions — Definitions. (a) The purposes of this section are: (1) To promote the reuse and recycling of scrap material in Arkansas while protecting human health and the environment; (2) To promote the goals of the Arkansas Pollution Prevention Act, § 8-10-201 et seq., and related Arkansas legislation intended to encourage recycling; (3) To create greater equity in the statutory treatment of recycled material versus virgin materials; (4) To remove the disincentives and impediments to recycling in Arkansas created as an unintended consequence of certain liability provisions contained in this subchapter; and (5) To incorporate into this subchapter amendments to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, Pub. L. No. 96-510, adopted by the United States Congress in 1999 in Pub. L. No. 106-113, thus ensuring that Arkansas law does not contain more stringent provisions than federal law. (b)(1) As provided in subsections (c)-(f) of this section, a person who arranged for recycling of recyclable material shall not be liable under § 8-7-512(a)(3) or § 8-7-512(a)(4) with respect to the recyclable material. (2) Nothing in this section shall be deemed to affect the liability of a person under § 8-7-512(a)(3) or § 8-7-512(a)(4) with respect to material that is not recyclable material as defined in subsection (c) of this section. (c)(1) As used in this section, “recyclable material” means scrap paper, scrap plastic, scrap glass, scrap textiles, scrap rubber other than whole tires, scrap metal, or spent lead-acid batteries, spent nickel-cadmium batteries, and other spent batteries, as well as minor amounts of material incident to or adhering to the scrap material as a result of its normal and customary use prior to becoming scrap. (2) However, “recyclable material” does not include: (A) Shipping containers of a capacity from thirty liters (30 l) to three thousand liters (3,000 l), whether intact or not, having any hazardous substance, but not metal bits and pieces or hazardous substance that form an integral part of the shipping container, contained on or adhering thereto; or (B) Any item of material that contains polychlorinated biphenyls at a concentration in excess of fifty parts per million (50 ppm) or any new standard promulgated pursuant to applicable federal laws. (d) Transactions involving scrap paper, scrap plastic, scrap glass, scrap textiles, or scrap rubber other than whole tires shall be deemed to be arranging for recycling of recyclable material, if the person who arranged for the transaction by selling recyclable material or otherwise arranging for the recycling of recyclable material can demonstrate by a preponderance of the evidence that all of the following criteria were met at the time of the transaction: (1) The recyclable material met a commercial specification grade; (2) A market existed for the recyclable material; (3) A substantial portion of the recyclable material was made available for use as feedstock for the manufacture of a salable new product; (4) The recyclable material could have been a replacement or substitute for a virgin raw material, or the product to be made from the recyclable material could have been a replacement or substitute for a product made, in whole or in part, from virgin raw material; (5) For transactions occurring ninety (90) days or more after the date of enactment of this section, the person exercised reasonable care to determine that the facility where the recyclable material was handled, processed, reclaimed, or otherwise managed by another person, i.e., a consuming facility, was in compliance with substantive, not procedural or administrative, provisions of any federal, state, or local environmental law or regulation or compliance order or decree issued pursuant thereto, applicable to the handling, processing, reclamation, storage, or other management activities associated with recyclable material; and (6) As used in this subsection, “reasonable care” shall be determined using criteria that include: (A) The price paid in the recycling transaction; (B) The ability of the person to detect the nature of the consuming facility's operations concerning its handling, processing, reclamation, or other management activities associated with recyclable material; and (C)(i) The result of inquiries made to the appropriate federal, state, or local environmental agency regarding the consuming facility's past and current compliance with substantive, not procedural or administrative, provisions of any federal, state, or local environmental law or regulation or compliance order or decree issued pursuant thereto, applicable to the handling, processing, reclamation, storage, or other management activities associated with the recyclable material. (ii) For the purposes of this subsection, a requirement to obtain a permit applicable to the handling, processing, reclamation, or other management activity associated with the recyclable material shall be deemed to be a substantive provision. (e)(1) Transactions involving scrap metal shall be deemed to be arranging for recycling, if the person who arranged for the transaction by selling recyclable material or otherwise arranging for the recycling of recyclable material can demonstrate by a preponderance of the evidence that at the time of the transaction the person: (A) Met the criteria set forth in subsection (d) of this section with respect to the scrap metal; (B) Was in compliance with any applicable rules or standards regarding the storage, transport, management, or other activities associated with the recycling of scrap metal that the Arkansas Pollution Control and Ecology Commission promulgates after the enactment of this section and with regard to transactions occurring after the effective date of those rules or standards; and (C) Did not melt the scrap metal prior to the transaction. (2) For purposes of subdivision (e)(1)(C) of this section, melting of scrap metal does not include the thermal separation of two (2) or more materials due to differences in their melting points, referred to as “sweating”. (3) Except for scrap metals that the United States Environmental Protection Agency or the commission excludes from this definition by regulation, as used in this subsection, “scrap metal” means: (A) Bits and pieces of metal parts, such as bars, turnings, rods, sheets, or wire; or (B) Metal pieces that may be combined together with bolts or soldering, such as radiators, scrap automobiles, or railroad box cars, which when worn or superfluous can be recycled. (f) Transactions involving spent lead-acid batteries, spent nickel-cadmium batteries, or other spent batteries shall be deemed to be arranging for recycling, if the person who arranged for the transaction by selling recyclable material or otherwise arranging for the recycling of recyclable material can demonstrate by a preponderance of the evidence that at the time of the transaction: (1) The person: (A) Met the criteria set forth in subsection (d) of this section with respect to the spent lead-acid batteries, spent nickel-cadmium batteries, or other spent batteries, but did not recover the valuable components of such spent lead-acid batteries, spent nickel-cadmium batteries, or other spent batteries; and (B) With respect to transactions involving lead-acid batteries, was in compliance with applicable federal regulations or standards and Arkansas environmental rules or standards, and any amendments thereto, regarding the storage, transport, management, or other activities associated with the recycling of spent lead-acid batteries; (2) With respect to transactions involving nickel-cadmium batteries, federal regulations or standards and Arkansas environmental rules or standards were in effect regarding the storage, transport, management, or other activities associated with the recycling of spent nickel-cadmium batteries, and the person was in compliance with applicable regulations, rules, or standards or any amendments thereto; or (3) With respect to transactions involving other spent batteries, federal regulations or standards and Arkansas environmental rules or standards were in effect regarding the storage, transport, management, or other activities associated with the recycling of those other spent batteries, and the person was in compliance with applicable regulations, rules, or standards or any amendments thereto. (g)(1) The exemptions set forth in subsections (d)-(f) of this section shall not apply if the person: (A) Had an objectively reasonable basis to believe at the time of the recycling transaction: (i) That the recyclable material would not be recycled; (ii) That the recyclable material would be burned as fuel, or for energy recovery or incineration; or (iii) For transactions occurring before ninety (90) days after the date of the enactment of this section, that the consuming facility was not in compliance with a substantive, not procedural or administrative, provision of any federal, state, or local environmental law, rule, or regulation or compliance order or decree issued pursuant thereto, applicable to the handling, processing, reclamation, or other management activities associated with the recyclable material; (B) Had reason to believe that hazardous substances had been added to the recyclable material for purposes other than processing for recycling; or (C) Failed to exercise reasonable care with respect to the management and handling of the recyclable material, including adhering to customary industry practices current at the time of the recycling transaction designed to minimize, through source control, contamination of the recyclable material by hazardous substances. (2) For purposes of this subsection, an objectively reasonable basis for belief shall be determined using criteria that include: (A) The size of the person's business; (B) Customary industry practices, including customary industry practices current at the time of the recycling transaction designed to minimize, through source control, contamination of the recyclable material by hazardous substances; (C) The price paid in the recycling transaction; and (D) The ability of the person to detect the nature of the consuming facility's operations concerning its handling, processing, reclamation, or other management activities associated with the recyclable material. (3) For purposes of this subsection, a requirement to obtain a permit applicable to the handling, processing, reclamation, or other management activities associated with recyclable material shall be deemed to be a substantive provision. (h) Nothing in this section shall be deemed to affect the liability of a person under § 8-7-512(a)(1) or § 8-7-512(a)(2). (i) The commission is authorized to promulgate additional rules concerning this section. (j) The exemptions provided in this section shall not affect any concluded judicial or administrative action or any pending judicial action initiated by the State of Arkansas before enactment of this section. (k)(1) Any person who commences an action in contribution against a person who is not liable by operation of this section shall be liable to that person for all reasonable costs of defending that action, including all reasonable attorney's and expert witness fees. (2) As used in this subsection, “person” does not include an agency, board, commission, or department of the State of Arkansas. (l) Nothing in this section shall affect: (1) Liability under any other federal, Arkansas, or local statute, rule, or regulation promulgated pursuant to any such statute, including any requirements promulgated by the Arkansas Pollution Control and Ecology Commission under the Arkansas Hazardous Waste Management Act of 1979, § 8-7-201 et seq.; or (2) The ability of the Arkansas Pollution Control and Ecology Commission to promulgate rules under any other statute, including the Arkansas Hazardous Waste Management Act of 1979, § 8-7-201 et seq. (m) Nothing in this section shall be construed to: (1) Affect any defenses or liabilities of any person to whom subdivision (b)(1) of this section does not apply; or (2) Create any presumption of liability against any person to whom subdivision (b)(1) of this section does not apply.