Part I

Adds new Part J, Extended Producer Responsibility, in Article 9 of GS Chapter 130A, providing as follows. Sets out and defines the terms collector, packaging material, postconsumer waste material, producer responsibility fund, fulfillment service provider, producer responsibility organization or organization, readily-recyclable, recycling rate, responsible producer or producer, reusable, and stewardship plan.

Requires responsible producers (as defined) to register with the Department of Environmental Quality (DEQ) before selling, offering for sale, or distributing in North Carolina a product contained, protected, delivered, presented, or distributed in or using packaging materials. Also prohibits responsible producers from selling, offering for sale, or distributing in the state a product that is contained, protected, delivered, presented, or distributed in or using packaging materials unless the producer participates as a member of a producer responsibility organization for which a stewardship plan is approved by DEQ and through that participation, meets the following requirements of the statute, effective October 1, 2025. Requires responsible producers to reduce the total amount of non-reusable packaging material used for containing, protecting, delivering, presenting, and distributing products sold, offered for sale, or distributed in North Carolina according to the specified schedule which first requires a reduction of 10% after two years following approval of the stewardship plan and builds up to 40% reduction after eight years following the approval of the stewardship plan. Requires responsible producers to ensure that all of their non-reusable packaging material in the aggregate, used for containing, protecting, delivering, presenting, and distributing the products it sold, offered for sale, or distributed in North Carolina is recycled at a rate set out in the specified schedule, under which 50% is to be recycled after five years following approval of the stewardship plan, building up to 90% after 12 years following approval of the stewardship plan. Requires responsible producers to ensure that all non-reusable packaging material used for containing, protecting, delivering, presenting, and distributing the products it sold, offered for sale, or distributed in North Carolina to incorporate, on average and in the aggregate, amounts of postconsumer waste materials at the rate set out in the specified schedule, under which 50% must be postconsumer waste material after five years following approval of the stewardship plan, building up to 90% after 12 years after the approval of the stewardship plan. 

Requires responsible producers to establish or join a producer responsibility organization (organization) to act as an agent on behalf of the producer for purposes of satisfying obligations under this Part. Requires the organization to have participation fees and sets out guidelines for those fees including requiring that fees provide producers with financial incentives to reward waste reduction and recycling compatibility innovations and practices and to discourage designs or practices that increase product management costs. Requires the organization to maintain a producer responsibility fund consisting of the payments received from responsible producers, to be used to reimburse participating collectors as required by statute; fund collection and convenience obligations; fund required outreach and education programs; fund the actual operating costs of the organization; and pay fees assessed by DEQ for implementing this Part. Sets out the schedule for paying participation fees. Requires responsible producers to provide the organization with all information necessary for determining the producer's compliance with the stewardship plan and for calculating the participation fees.

Requires each organization to develop and submit a stewardship plan to DEQ, to be updated every five years, or sooner if requirements are not being met or followed by the responsible producer or organization, or if circumstances have changed. Sets out 12 categories of information that must be included in the stewardship plan, including a comprehensive list of the packaging material products for which the producer or organization is responsible for under the plan, a description of how the packaging materials covered under the plan will be collected and managed using environmentally sound management practices, a proposal for implementing the outreach and education program in a manner that increases access to recycling throughout North Carolina, and a description of the process for collectors to recoup all reasonable activity-based costs from the organization for collecting, transporting, or sorting packaging materials covered under the plan. Requires the organization to give stakeholders and members of the public an opportunity to review and comment on the draft plan before it is submitted to DEQ. Allows the organization to prepare a revised plan and submit it to DEQ in response to changed circumstances. 

Requires DEQ to make a determination on the plan within 90 days. Sets out 10 factors that DEQ must consider in reviewing the plan. Requires the organization and its members to implement the approved plan no later than six months after it is approved.

Makes organizations responsible for calculating and dispersing funds for collectors that elect to be compensated by the organization for the recovery, recycling, and processing of packaging material. Requires collectors to provide for recycling of all recyclable packing material listed under a stewardship plan in order to be eligible for reimbursement. Sets out provisions for calculating the reimbursement rate.  Requires participating collectors to annually report to the organization on information necessary to determine the collector's incurred net costs. Prohibits participating collectors from charging fees to customers for reimbursable costs. Effective October 1, 2025.

Requires organizations to provide for widespread, convenient, and equitable access to collection opportunities for the packaging materials identified in the stewardship plans. Sets out conditions under which the organization must provide for curbside or multifamily recycling collection. Requires responsible producers to indicate on packaging material sold, offered for sale, or distributed for sale in North Carolina: (1) the percentage of postconsumer waste material content, (2) whether the packaging material is readily recyclable, and (3) whether the packaging material is compostable. Effective October 1, 2025.

Requires organizations to provide effective outreach, education, and communications to consumers in North Carolina on: (1) proper end-of-life management of packaging materials; (2) the location and availability of curbside and drop-off collection opportunities; (3) recycling and composting instructions that are consistent statewide, except as necessary to take into account differences among local ordinances and processing capabilities; easy to understand, and easily accessible. Sets out additional requirements for the outreach and education's design and content. Requires DEQ to evaluate these efforts and determine if changes are necessary. Effective October 1, 2025.

Requires organizations to report annually to DEQ on evaluating progress toward meeting the Part's requirements for the immediately preceding year; sets out information that must be included in the report. Sets out confidentiality requirements. Requires DEQ to publish on its website a list of responsible producers and organizations that are out of compliance.

Allows the Environmental Management Commission (EMC) to adopt rules setting fees for responsible producers and organizations to defray DEQ's administration costs.

Provides for enforcement of the part, including holding each responsible producer jointly and severally liable for payment of any penalty imposed on an organization.

Exempts the following responsible producers, except as otherwise provided, from this Part: (1) producers generating less than $2 million in gross revenue during the immediately preceding calendar year; (2)  producers selling, offering for sale, or distributing for sale in this state during the immediately preceding calendar year less than 1 ton of packaging material; and (3) producers conducting all of the packaging material sales in this state during the immediately preceding calendar year at a single point of retail sale that was not supplied or operated as part of a franchise.

Allows the EMC to adopt rules to implement this Part.

Unless otherwise specified, effective October 1, 2023.

Part II.

Adds new Part 2K, Ban Manufacture and Distribution of Certain Toxic Substances in Packaging Materials, in Article 9 of GS Chapter 130A, providing as follows.

Prohibits knowingly (1) manufacturing packaging material containing a covered toxic substance or (2) distributing, selling, or offering for sale, for use within North Carolina or for export from the state, any packaging material containing a covered toxic substance. Defines covered toxic substance as: ortho-phthalates, bisphenols, PFAS, lead and lead compounds, hexavalent chromium and compounds, cadmium and cadmium compounds, mercury and mercury compounds, benzophenone and its derivatives, halogenated flame retardants, perchlorate, formaldehyde, toluene, polyvinyl chloride, polystyrene, and polycarbonate.

Allows the Secretary of Environmental Quality to assess a civil penalty of no more than $5,000 for violations involving a hazardous waste and of up to $25,000 against a person who violates this Part. Sets out penalties for repeat offenses. Sets out procedures for determining the penalty amount and for notifying the person assessed a penalty. Allows for the filing of contested case petitions within 30 days of receipt of the notice. Sets out the process for filing a request for remission of civil penalties. Provides that if the penalty has not been paid within 30 days, the Secretary is to request the Attorney General to institute a civil action, which must be filed within three years of the date the final agency decision or court order was served on the violator.  Effective October 1, 2025.