Trash Reduction Act of 2015

To amend the Internal Revenue Code of 1986 to impose a retail tax on carryout bags, and for other purposes. 1. Short title This Act may be cited as the Trash Reduction Act of 2015 2. Imposition of tax on carryout bags (a) General rule Chapter 31 D Carryout Bags Sec. 4056. Imposition of tax. 4056. Imposition of tax (a) General rule There is hereby imposed on any retail sale a tax on each carryout bag. (b) Amount of tax The amount of tax imposed by subsection (a) shall be $0.10 per carryout bag. (c) Liability for tax The retailer shall be liable for the tax imposed by this section. (d) Definitions For purposes of this section— (1) Carryout bag (A) In general The term carryout bag (B) Exceptions Such term does not include— (i) any reusable bag that is distributed to a customer without charge during a limited duration promotional event, (ii) any bag manufactured for use by a customer inside a store to package bulk items such as fruit, vegetables, nuts, grains, candy, or small hardware items, such as nails and bolts, (iii) any bag that contains or wraps frozen foods, prepared foods, or baked goods when not prepackaged, (iv) any bag manufactured for use by a pharmacist to contain prescription drugs, and (v) any bag manufactured to be sold at retail in packages containing multiple bags intended for use as garbage, pet waste, or yard waste bags. (2) Reusable bag The term reusable bag (A) (i) made of cloth or other machine washable fabric, or (ii) made of a durable plastic that is at least 2.25 millimeters thick, and (B) is specifically designed and manufactured for multiple use. (3) Limited duration promotional event A limited duration promotional event shall not be treated as including any day in a calendar year if limited duration promotional events taken into account under paragraph (1)(B)(i) have occurred on 7 or more preceding days during such calendar year. (e) Special rules (1) Pass through of tax The tax imposed by subsection (a) shall be passed through to the customer and shall be separately stated on the receipt of sale provided to the customer. (2) 1st retail sale; use treated as sale For purposes of this section, rules similar to the rules of subsections (a) and (b) of section 4002 shall apply. . (b) Plastic carryout bag recycling program Subchapter B of chapter 65 of such Code is amended by adding at the end the following new section: 6433. Qualified plastic carryout bag recycling program (a) Allowance of credit If— (1) tax has been imposed under section 4056 on any carryout bag, (2) a retailer provides such bag to a customer in a point of sale transaction, (3) in the case of a carryout bag made of paper, such paper consists of not less than 40 percent post-consumer recycled content, (4) such retailer has in effect at the time of such transaction a qualified plastic carryout bag recycling program, and (5) such retailer has kept and can produce records for purposes of this section and section 4056 that include the total number of carryout bags purchased and the amounts passed through to the customer for such bags pursuant to section 4056(e), the Secretary shall pay (without interest) to such retailer an amount equal to the applicable amount for each such bag used by the retailer in connection with a point of sale transaction. (b) Applicable amount For purposes of subsection (a), the applicable amount is $0.04. (c) Qualified plastic carryout bag recycling program For purposes of this section— (1) In general The term qualified plastic carryout bag recycling program (A) to the extent the retailer provides carryout bags (as defined in section 4056) made of plastic to customers— (i) passes through the tax imposed by section 4056 and tracks the total number of bags purchased and amount of tax passed through pursuant to section 6433(a), (ii) has printed or displayed on each such bag, in a manner clearly visible to a customer, the words PLEASE RETURN TO A PARTICIPATING STORE FOR RECYCLING (iii) uses bags that are 100-percent recyclable, and (iv) uses bags that are made of high-density polyethylene film marked with the SPI resin identification code 2 or low-density polyethylene film marked with the SPI resin identification code 4, (B) places at each place of business at which retail operations are conducted one or more plastic carryout bag collection bins which are visible, easily accessible to the customer, and clearly marked as being for the purpose of collecting and recycling plastic carryout bags, (C) recycles the plastic carryout bags collected pursuant to subparagraph (B), (D) maintains for not less than 3 years records (which shall be available to the Secretary) describing the collection, transport, and recycling of plastic carryout bags collected, (E) makes available to customers within the retail establishment reusable bags (as defined in section 4056(c)(2)) which may be purchased and used in lieu of using a single-use carryout bag, and (F) meets the definition of section 4056(d)(3). (2) Recycling program The term recycling program . (c) Establishment of trust fund Subchapter A of chapter 98 of such Code (relating to trust fund code) is amended by adding at the end the following: 9512. Carryout bag trust fund (a) Creation of trust fund There is established in the Treasury of the United States a trust fund to be known as the Carryout Bag Trust Fund Trust Fund (b) Transfers to trust fund There is hereby appropriated to the Trust Fund an amount equivalent to the amounts received in the Treasury pursuant to section 4056. (c) Expenditures from trust fund Amounts in the Trust Fund shall be available, as provided by appropriation Acts, for making payments under section 6433. (d) Transfer to land and water conservation fund (1) In general The Secretary shall pay from time to time from the Trust Fund into the Land and Water Conservation Fund provided for in title I of the Land and Water Conservation Fund Act of 1965 amounts (as determined by the Secretary) equivalent to the aggregate of the transactions on which tax is imposed under section 4056 aggregate amounts determined on the basis of $0.06. (2) Special rule regarding amounts transferred Amounts transferred to the Land and Water Conservation Fund under paragraph (1) shall not be taken into account for purposes of determining amounts to be appropriated or credited to the fund under section 2(c) of the Land and Water Conservation Fund Act of 1965 ( 16 U.S.C. 460l–5(c) . (d) Study Not later than December 31, 2017, the Comptroller General of the United States shall conduct a study on the effectiveness of the provisions of this Act at reducing the use of carryout bags and encouraging recycling of such bags. The report shall address— (1) measures that the Comptroller General determines may increase the effectiveness of such provisions, including the amount of tax imposed on each carryout bag, and (2) any effects, both positive and negative, on any United States businesses. The Comptroller General shall submit a report of such study to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate. (e) Clerical amendments (1) The table of subchapters for chapter 31 of such Code is amended by inserting after the item relating to subchapter C the following new item: Subchapter D. Carryout bags. . (2) The table of sections for subchapter B of chapter 65 of such Code is amended by adding at the end the following new item: Sec. 6433. Qualified plastic carryout bag recycling program. . (3) The table of sections for subchapter A of chapter 98 of such Code is amended by adding at the end the following new item: Sec. 9512. Carryout bag trust fund. . (f) Effective date The amendments made by this section shall take effect on July 1, 2016.

Summary: Trash Reduction Act of 2015 This bill amends the Internal Revenue Code to require retailers to pay a $0.10 excise tax on each carryout bag provided to a consumer. A "carryout bag" means a bag of any material, commonly plastic or kraft paper, which is provided to a consumer at the point of sale to carry or cover purchases, merchandise, or other items. Reusable bags and certain other bags used for specified purposes are exempt from such tax. The bill allows retailers who establish a qualified plastic carryout bag recycling program a rebate for each recyclable bag used by the retailer. The bill establishes the Carryout Bag Trust Fund to hold tax revenues generated by this Act and directs the Department of the Treasury to make payments from such Trust Fund for the qualified plastic carryout bag recycling program and to the Land and Water Conservation Fund established by the Land and Water Conservation Fund Act of 1965. The Government Accountability Office must study and report to Congress on the effectiveness of this Act in reducing the use of carryout bags and encouraging recycling of such bags.