Minnesota – Waste Generator Surcharges

Minnesota exhibits a unique example of a waste surcharge, where fees are collected at the generator level instead of at the disposal site. First introduced in 1997, Minnesota’s solid waste surcharges, called the Solid Waste Management Taxes, target household, commercial, and industrial waste generators. These taxes intend to incentivize participation in recycling and composting programs. The fee schedule is mandated by Minnesota Statute 297H “Solid Waste Management Taxes.” For mixed municipal solid waste, the tax is applied at the generator level, levying 9.75% of the total bill for households, and 17% of the total bill for commercial waste generators. Taxes on household and commercial generators are billed directly by their waste collection providers. For non-mixed municipal solid waste (e.g. construction debris, industrial waste, and infectious waste), the surcharge is applied at a rate of 60 cents per cubic yard of waste disposed at a landfill or incinerator.

The tax generates about $90 million per year, 70% of which goes into the state’s environmental fund, and the remaining 30% is deposited into a general fund. 

“Subd. 2. Allocation of revenues. (a) $33,760,000, or 70 percent, whichever is greater, of the amounts remitted under this chapter must be credited to the environmental fund established in section 16A.531, subdivision 1.
(b) The remainder must be deposited into the general fund.”

According to Tom King, a Tax Specialist at the Minnesota Department of Revenue, the generator tax is efficient with good compliance rates and has not resulted in opposition from individual generators, who generally accept the tax as an integral part of their waste disposal costs. The seemingly under-the-radar status of this tax thus requires adequate education on and accessibility to waste diversion pathways for waste generators.

 

State Environmental Fund

The environmental fund was established in the Minnesota Statutes in 1991, currently codified under 16A.531, subdivision 1. In addition to revenue from the Solid Waste Management Taxes, the environmental fund also receives funding from other environmental fees and legislative appropriations. The fund supports landfill monitoring and clean up, environmental monitoring by the Pollution Control Agency, and grants from the Governor’s Select Committee on Recycling and the Environment (SCORE grants) to counties to facilitate recycling efforts.

 

SCORE Recycling Grants

The Governor’s Select Committee on Recycling and the Environment (SCORE) was established in 1989 (MN Statute 115A.557), initiating a source of state funding to assist counties in meeting state recycling and waste reduction goals. As of 2014, the Twin Cities metropolitan area will be required to recycle 75% of all generated solid waste, including organics, by 2030. The rest of the state is presently required to recycle 35% of all generated solid waste, including organics. In 2021, $17.75 million was distributed to counties through SCORE grants in order to meet waste diversion goals. In return, counties must submit annual reports on how the money was spent, and the resulting achievements in solid waste management practices.

SCORE grant money is distributed biannually, proportionally based on county population, in order to facilitate recycling and waste reduction efforts as follows: 3

“Subd. 2. Permissible expenditures. (a) A county receiving money distributed by the commissioner under this section may use the money only for the development and implementation of programs to:
(1) reduce the amount of solid waste generated;
(2) recycle the maximum amount of solid waste technically feasible;
(3) create and support markets for recycled products;
(4) remove problem materials from the solid waste stream and develop proper disposal options for them;
(5) inform and educate all sectors of the public about proper solid waste management procedures;
(6) provide technical assistance to public and private entities to ensure proper solid waste management;
(7) provide educational, technical, and financial assistance for litter prevention;
(8) process mixed municipal solid waste generated in the county at a resource recovery facility located in Minnesota; 
(9) compost source-separated compostable materials, including the provision of receptacles for residential composting;
(10) prevent food waste or collect and transport food donated to humans or to be fed to animals; and
(11) process source-separated compostable materials that are to be used to produce class I or class II compost, as defined in Minnesota Rules, part 7035.2836, after being processed in an anaerobic digester, but not to construct buildings or acquire equipment.”

While the recycling grants support county recycling and waste diversion programs, they do not cover the whole costs of local programs. It should also be noted that funding has not kept pace with present prices and inflation, as noted by Timothy Farnan, Principal Planner at the Minnesota Pollution Control Agency.4

 

Provision for Organics Diversion and Recycling

In 2014, the funding for SCORE grants was expanded, thus Minnesota Statute 115A.557 was amended to include a provision that 50% of any grant money above the amount received by the seven Twin City metropolitan counties in fiscal year 2014 must be spent on organics recycling and food waste reduction. 

“(b) Beginning in fiscal year 2015 and continuing thereafter, of any money distributed by the commissioner under this section to a metropolitan county, as defined in section 473.121, subdivision 4, that exceeds the amount the county was eligible to receive under this section in fiscal year 2014: (1) at least 50 percent must be expended on activities in paragraph (a), clauses (9) to (11); and (2) the remainder must be expended on activities in paragraph (a), clauses (1) to (7) and (9) to (11), that advance the county toward achieving its recycling goal under section 115A.551.”

Hennepin County, one of the seven metropolitan counties, elects to use 50% of its total SCORE grant money, instead of just 50% of additional funding on top of FY14 levels, exclusively on organics recycling and food waste reduction programs. Hennepin County received $3.6 million in 2021, and Minneapolis’ city-sponsored organics recycling program received $1.3 million of these funds to offset almost one-third of its total organics program budget ($4.1 million in 2020). This program includes a weekly organics pickup service and ample drop-off sites

According to Timothy Farnan, although this additional funding provision originally only focused on composting, stakeholders advocated for expanded eligibility for projects for which this funding can be used. This provision has since expanded to include food rescue, education on organic waste reduction and diversion, waste to animal feed processing, and anaerobic digestion. This input has informed and encouraged Minnesota’s efforts to steer grant money towards waste prevention and diversion as preferable alternatives to recycling and composting, as noted by Timothy. For example, food waste prevention and food rescue have taken greater priority over composting in statewide and local waste management efforts.

 

More Information

 

1 Personal Communication. Tom King. Revenue Tax Specialist, Minnesota Department of Revenue. Phone Call. September 8, 2021.
2 Personal Communication. Ben Knudson. Recycling Specialist, Hennepin County Environment and Energy Department. Email. September 9, 2021.
3 Note that while Minnesota considers “resource recovery facilities” (which are usually incinerators that capture and convert a portion of their emissions into energy) as part of their waste reduction and diversion efforts, ILSR does not agree with counting recovery/incineration as a waste reduction strategy.
4 Personal communication. Timothy Farnan. Principal Planner, Minnesota Pollution Control Agency. Phone Call. September 24, 2021.
5 Personal communication. Kellie Kish. Recycling Coordinator, City of Minneapolis. Email. October 26, 2021.
6 Personal communication. Timothy Farnan. Principal Planner, Minnesota Pollution Control Agency. Phone Call. September 24, 2021.

 

—————————————

Original post from December 14, 2021

Follow Sophia Jones:
Sophia Jones

Sophia Jones is a Policy Fellow with ILSR’s Composting for Community initiative, where she researches, analyzes and supports the building of US policy that advances local composting. Her background in sustainable development and agriculture reflects her interest in solutions-based, community-led development initiatives.