Topic:
BEVERAGE CONTAINERS; BOTTLE BILLS; LEGISLATION; RECYCLING; STATE BUDGETS;
Location:
CONTAINERS, BEVERAGE;

OLR Research Report


November 24, 2008

 

2008-R-0637

BACKGROUNDER: CONNECTICUT AND THE BEVERAGE CONTAINER REDEMPTION LAW

By: Joseph R. Holstead, Associate Analyst

This OLR Backgrounder discusses Connecticut's beverage container redemption law (CGS 22a-243 et seq.), also known as the “bottle bill,” in light of the governor's recent proposal to have the state keep unclaimed bottle deposits (which currently go to distributors and bottlers) for budget deficit mitigation. It also addresses Connecticut's and other states' bottle bill laws.

GOVERNOR RELL'S DEFICIT MITIGATION PLAN

The governor is proposing that money from unreturned beverage containers escheat to the state as part of her FY 09 Deficit Mitigation Plan. As a result, the governor anticipates the state will collect $13.8 million in FY 09 (partial year) and $24.4 million per year beginning in FY 10.

CONNECTICUT'S BOTTLE BILL

Connecticut's bottle bill requires consumers to pay a 5 deposit fee on bottles and cans of beer and other malt beverages, soda water, and carbonated soft drinks (CGS 22a-244). Connecticut's law is considered “regular” because it applies to select carbonated beverage containers, while “expanded” bottle bills typically apply to non-carbonated bottled drinks, including water and juice. Bills to expand or change the bottle bill are perennial in the Environment Committee.

The Nickel Deposit Process in Connecticut

The deposit system works as follows:

1. a retailer (dealer) pays beverage container distributors 5 for each beer or carbonated soft drink container that the distributors deliver;

2. the consumer pays the dealer 5 for each beer or carbonated soft drink container that he or she purchases from the dealer;

3. the dealer or redemption center pays the consumer 5 for each container that he or she returns;

4. the distributor reimburses the dealer or redemption center 5 for each beer and carbonated soft drink container returned, plus a handling fee of 1.5 on each beer container and 2 on each carbonated soft drink container; and

5. the distributor keeps the 5 for each unclaimed deposit.

The law defines a “distributor” as anyone who sells beverage containers to a state dealer, including (1) any manufacturer who also sells and (2) a dealer who sells beverages containers on which no deposit has been collected before retail sale (CGS 22a-243).

Unclaimed Deposits

An unclaimed deposit refers to the nickel that a consumer chooses not to redeem (i.e., a consumer buys a soda bottle, but instead of returning it once empty to the retailer or redemption center for a nickel, he or she places it in a recycling bin or throws the bottle in the trash).

Under current law, distributors keep the unclaimed nickels. Representatives of the distributors state that they use the unclaimed deposits to offset expenses (e.g., trucking costs and handling fees) associated with collecting bottles that consumers have returned. For example, during a February 28, 2007 Environment Committee public hearing, Kevin Dietly, representing the Connecticut Food Association (CFA), stated in his testimony on SB 1289 that distributors use the unclaimed nickels “to offset the handling fee and their own trucking expenses, et cetera.” Dietly is a principal at Northbridge Environmental

Consultants in Westford, MA. The following link is to the February 28, 2007, Environment Committee public hearing testimony: http://search.cga.state.ct.us/dl2007/chr/doc/2007ENV00228-R001015-CHR.doc

Over the years, the legislature and the governor have looked at the funds from unclaimed deposits as a potential revenue stream (e.g., 1991's SB 766). To derive an estimated revenue amount, the governor's current deficit mitigation plan took historical data from Massachusetts (which has a bottle bill and keeps unclaimed deposits) on revenue it collected from unclaimed deposits. It adjusted the amount for the population and personal income differences between the two states, according to an October 30, 2008 report by the legislature's Office of Fiscal Analysis (OFA). In the past, OFA has done a similar computation for estimated deposit revenue from unclaimed deposits based on Massachusetts' numbers. In 2005, for example, OFA completed a fiscal note estimating $20 million per year from unclaimed deposits on SB 61, which sought to use unclaimed deposits for the state to fund a campaign finance reform proposal.

Although the governor's current plan does not specify costs to administer the program, OFA anticipates that there will be one-time and ongoing costs to administer this program. Similarly, in 2005, OFA estimated a one-time cost of approximately $275,000 for DEP to set up the program to account for unclaimed deposits. See the OFA fiscal note on 2005's SB 61 at:

http://search.cga.state.ct.us/dl2005/fn/doc/2005SB-00061-R02-FN.doc

To see OFA's report on the governor's FY 09 deficit mitigation plan, visit the following link:

http://www.cga.ct.gov/ofa/Documents/Misc/2008/Summary%20of%20Gov%20Deficit%20Mitigation%20Plan%20FY%2009.pdf.

RECENT PROPOSALS

Since at least 1991, Connecticut legislators have debated bills to expand the application of the bottle bill law to non-carbonated beverage containers. More recently, see for example, SB 192 in 2006, SB 1289 in 2007, and sSB 357 in 2008. During this time the committee has also considered bills, or provisions within expansion bills, to (1) allow the state to keep unclaimed bottle deposits (also know as escheats, as discussed above) and (2) increase the deposit amount from 5 to 10 (see for example SB 1030 in 2003 and HB 6590 in 2007).

Most recently, during the 2008 legislative session, the Environment Committee considered sSB 357, AAC the Expansion of the Beverage Container Redemption Provisions to Include Noncarbonated Beverages. The bill proposed to expand the law to include non-carbonated drinks (e.g., non-carbonated water, and sports and tea drinks) and raise the handling fee to 3 for all redeemed containers except beer and other malt beverages.

The committee favorably reported the bill March 14, 2008, which died after the Senate passed a strike-all amendment that added a section on land use. Click the following links for a copy of the bill analysis and the text of the bill as JF'ed by the Environment and Planning and Development committees:

(1) http://cgalites/2008/BA/2008SB-00357-R000441-BA.htm and

(2) http://cgalites/2008/TOB/s/pdf/2008SB-00357-R02-SB.pdf.

Proponents of Bottle Bill Expansion

Advocates of an expanded bottle bill in Connecticut argue that doing so would decrease litter and increase recycling. They note that Connecticut's law only applies to beer and other malt beverages, soda water, and carbonated soft drinks because the law was passed 30 years ago (PA 78-16, which became effective, January 1, 1980), when Americans' beverage consumption patterns were different (i.e., before the widespread availability and popularity of non-carbonated bottled water and sports, fruit, energy, and tea drinks). See for example page 151 of the March 10, 2008 Environment Committee public hearing transcript that included SB 357 at: http://search.cga.state.ct.us/dl2008/chr/doc/2008ENV00310-R000930-CHR.doc.

Additionally, in 2007, Environment Connecticut estimated that adding non-carbonated beverage containers to the redemption law could result in 300 million more bottles being recycled annually in the state. (Environment Connecticut is a statewide, citizen-based environmental advocacy organization.)

Opponents of Expansion

Opponents of bottle bill expansion, on the other hand, argue that expanded curbside programs or anti-litter education would be more effective in reducing litter than expanding the bottle bill and (see page 250 of the March 10, 2008 transcript). Representatives of distributors have argued that the cost to distributors would be significant. Also, a large Connecticut recycling company testified that the potential loss of water and other bottles from the recycling stream would result in a loss

of rebates to the many towns that the company serves, and the company's revenue (see pages 166-168 of the March 10, 2008 transcript).

Additionally, many grocery stores also oppose an expansion because it would mean that customers would redeem many more bottles, which could create space and sanitary problems. (See page 40 of the March 10, 2006 Environment Committee public hearing transcript on SB 192 at: http://search.cga.state.ct.us/dl2006/chr/doc/2006ENV00310-R001900-CHR.doc.)

BOTTLE BILL LAWS IN OTHER STATES

Eleven states have bottle bill laws. Of these, three (California, Hawaii, and Maine) have expanded laws. Oregon will join these three states beginning January 1, 2009, when bottled water will be covered under its law (Or. Stat. 459A.700).

Deposit Fees

The 11 states' bottle bill law deposit fees vary. Seven states have a straight 5 deposit fee. However, Michigan has a 10 fee on all bottles its law covers; California has a 10 fee on bottles that are larger than 24oz; Vermont has a 15 fee on liquor bottles, and Maine has a 15 fee on wine and liquor bottles, according to the Container Recycling Institute's (CRI) Bottle Bill Resource Guide. The other four bottle bill states not yet referenced are Delaware, Iowa, Massachusetts, and New York.

Unclaimed Deposits

For unclaimed deposits, California, Hawaii, Massachusetts, Maine, and Michigan keep the funds. California uses them for program administration and grants to nonprofits. Hawaii, Maine, and Massachusetts keep the funds for program administration and other costs, and Michigan retains 75% of the funds for environmental programs and the rest goes to retailers. For your reference, Table 1 below is a copy of the CRI's Bottle Bill Resource Guide, which breaks out information on the 11 states' bottle bill laws.

TABLE 1: CRI's 11 State Bottle Bill Law Comparison

State

Purpose

Dates

Beverages Covered

Containers Covered

Amount of Deposit

Redemption Rate(a)

Reclamation System

Unredeemed Deposits

Handling Fee

History

California

California Beverage Container Recycling and Litter Reduction Act (AB 2020)

To encourage recycling and reduce litter

Enacted 9/29/1986 Implemented 9/1/1987

beer, malt, wine & distilled spirits coolers, all non-alcoholic beverages except milk

Aluminum. glass, plastic and bi-metal. Exempts refillables

(10: >24oz.) and (5: <24oz.)

overall 61%; aluminum 73%; glass 58%; PET 46%; HDPE 51% (f)

State certified redemption centers, registered curbside operations, dropoffs

Property of state: used for program administration and grants to non-profits

Beverage manufacturers pay Processing Fees to offset recyclers costs when the cost of recycling exceeds the value of material. Processing Payments (1.8 per container) paid by state to redemption centers. [b]

Amended in 1990, 2000, 2004, and 2007

       

Notes: Containers are returned to licensed redemption centers, not to retailers; Refund value determined by weight for more than 50 containers

Connecticut

Beverage Container Deposit and Redemption Law

Litter reduction and recycling

Enacted 4/12/78; Implemented 1/1/80

Beer, malt, carbonated soft drinks, carbonated mineral water

Any individual, separate, sealed glass, metal or plastic bottle, can, jar or carton containing a beverage. [e]

5

No statistics available

Retail stores and redemption centers

Retained by distributor/bottler

Beer 1.5, other beverages 2

Amended in 1983 and 1986

       

Notes: "Dislocation fund" for workers who lost their jobs due to bottle bill

Delaware

Beverage Container Regulation

Litter Control Act/ Beverage Container Regulation

Enacted 6/30/82, Implemented 1/15/83

Beer, malt, ale, soft drinks, mineral water, soda water

All beverage containers under 2qt. Excludes aluminum

5

No statistics available

Retail stores and redemption centers

Retained by distributor/bottlers

20% of deposit (1)

 

       

 

Hawaii

Solid Waste Management; Deposit Beverage Container Law (Act 176)

To increase participation and recycling rates for specified deposit beverage containers, provide a connection between manufacturing decisions and recycling program management, and reduce litter.

Enacted 6/25/02, Implemented 1/1/05

Beer, mixed spirits, mixed wine, coffee & teas, carbonated soft drinks, water. Excludes dairy, wine, and liquor

Metal, glass, PET, or HDPE container containing sixty-four fluid ounces or less

5

No statistics available

State certified redemption centers (RC), [c]

Property of state: used for program administration

1-1.5 non-refundable container fee (added to price of beverage) paid to the state. See note [d]

Expanded in 2007

       

Notes: Redemption centers must submit reports regularly, Refund may be calculated by weight

Iowa

Beverage Container Deposit Law

Litter Control

Enacted 4/1/78, Implemented 6/2/79

Beer, carbonated soft drinks & mineral water, wine coolers, wine & liquor

any sealed glass, plastic, or metal bottle, can, jar or carton containing a beverage

5

overall 93% (g)

Retail stores and redemption centers

Retained by distributor/bottlers

1, paid by distributor to retailer or redemption center

 

       

Notes: Wine/liquor containers included; deposit containers were banned from landfills in 1990; if agreement exists w/licensed center, retailer can refuse containers

-Continued-

Massachusetts

Beverage Container Recovery Law

To provide an economic incentive for consumers to return used beverage containers and encourage conservation of materials and energy through recycling and reuse

Enacted 6/4/81, Implemented 1/1/83

Beer, malt, carbonated soft drinks, & mineral water

any sealable bottle, can, jar, or carton of glass, metal, plastic, or combo. Excludes biodegradables.

5

overall 68.6% (h)

Retail stores and redemption centers

Property of state general fund

2.25

Amended in 1990 and 2003

       

Notes: Wholesalers must file monthly reports w/Dept. of Revenue re: deposit & refund, Survived repeal by referendum effort in 1982 by a 60% to 40% vote.

Maine

Maine Returnable Beverage Container Law

Reduce litter and solid waste generation, create incentives for recycling and reuse

Enacted 1//2/76, Implemented 6/1/78

All beverages except dairy products and unprocessed cider

all sealed containers made of glass, metal or plastic, containing 4 liters or less, excluding aseptics

Wine/liquor: 15 All others: 5

No statistics available

Retail stores and redemption centers; Dealers may refuse containers if they have an agreement with a nearby redemption center

Property of state

3.5 (3 if qualified commingling agreement) (m)

Amended in 1980, 1990, 1991, 1993, 2003

       

Notes: Distributors who initiate deposits have the obligation to pick up containers from the dealers they deliver to or from the licensed redemption center that serves those dealers. There is a per container fine of $100 for tendering containers purchased out of state for redemption.

Michigan

Michigan Beverage Container Law

To reduce roadside litter, clean up the environment, and conserve energy and natural resources

Enacted 11/2/76, Implemented 12/3/78

Beer, soft drinks, carbonated & mineral water, wine coolers, canned cocktails

Any airtight metal, glass, paper, or plastic container, or a combination, under 1 gallon

10

overall 97.3% (i)

Retail stores

75% to state for envt'l programs, 25% to retailers

None

Amended in 1989

       

Notes: Only state with a 10 cent deposit

New York

New York State Returnable Container Law

Reduce litter, ease burden on solid waste facilities and encourage recycling activity

Enacted 6/15/82, Implemented 7/1/83

Beer, malt, carbonated soft drinks & mineral water, wine coolers

airtight metal, glass, paper, plastic, or combination of the above, under 1 gallon

5

(beer 77.4%) (soft drink 61.6%); (overall 70.2%) [j]

Retail stores and redemption centers

Retained by distributor/ bottlers

2

Amended in 1983 and 1998

       

Notes: Requires reporting of containers sold and redeemed by bottlers and distributors

Oregon

The Beverage Container Act

To reduce litter and increase recycling

Enacted 7/2/71, Implemented 1/01/72

Beer, malt, carbonated soft drinks, & bottled water (beginning in 2009)

Any individual, separate, sealed glass, metal or plastic bottle, can, jar containing a beverage

Standard refillable: 2; all others 5

Retail stores

Retained by distributor/ bottlers

none

overall 84% (k)

Expanded 1/1/08

       

Notes: Only deposit law without a handling fee

Vermont

Beverage Container Law (1972), Solid Waste Act (1987)

Reduce litter, increase recycling, reduce waste disposal costs, create local jobs and save energy

Enacted 4/7/72, Implemented 7/1/73

Beer, malt, carbonated soft drinks, mixed wine drinks; liquor

Any bottle, can, jar or carton composed of glass, metal, paper, plastic or any combination (Biodegradables excluded)

liquor: 15 All others: 5

overall 90-95% (l)

Retail stores and redemption centers, If retailer is located conveniently near a licensed center and thereby gains state approval, retailer may refuse containers

Retained by distributor/bottlers

3.5

Expanded in 1991

       

Notes:

-Continued-

All States

 

 

Notes: Food Stamps: Food stamp benefits can cover the entire cost of items such as eligible drinks in returnable bottles, including the bottle deposit. [n]

Footnotes

[a] Rates are for time periods indicated in the notes.

[b] Very large & small volume centers exempted (eligible centers process minimum avg. of 60,000 containers/mon). Max payment per center: $2300/month (127,778 units) AB 3056 provides for a gradual increase in the handling fee appropriation, to avoid future shortfalls in handling fee payments. Requires the Dept to conduct a cost survey during 2007, and every two years thereafter, to determine future handling fee payments. Effective 7/1/08 the Department will determine the amount of the handling fee to be paid for each beverage container by subtracting the cost per container (for recycling centers that do not receive handling fees) from the costs per container of those that do receive handling fees. There will be no monthly or annual cap on payments.

[c] Retailer exemptions vary depending on local population density, proximity to a redemption center, and store size.

[d] Fee funds redemption center operations. Fee based on the previous quarter's recycling rate: if previous quarter's rate is less than 70%, the fee is 1/container, otherwise 1.5

[e] Prohibits metal containers with removable tabs and containers with non-biodegradable holders (i.e. plastic 6-pack rings) from being sold in the state

[f] Source: California Department of Conservation, Division of Recycling, 11/04 (Jan.-June 2004 rates). 

[g]Source: Iowa DNR, Waste Management Division, as per phone conversation with Jeff Geerts on 8/29/01 (year 2000 estimate). 

[h] Source: Massachusetts Department of Environmental Protection, MA Bottle Bill Return Rates Chart (Jan.-Sept., 2004). 

[i] Source: Michigan Department of Treasury, Bottle Deposit Information Chart, 1990-2003.pdf (year 2003 preliminary rates). 

[j] Source: New York State Dept. of Environmental Conservation, Beverage Container Deposit & Redemption Statistics (October 1, 2001 to September 30, 2002). 

[k] Source: Oregon Department of Environmental Quality, as per e-mail communication from Peter Spendelow on 8/2/01 (year 2000 estimate). 

[l] Source: Vermont Solid Waste Division, as per phone conversation with Cathy Stacey on 9/24/01 (year 2000 estimate). 

[m] Source: Statutes of Maine: Title 32: Chapter 28: Section 4-c (http://janus.state.me.us/legis/statutes/32/title32sec1866.html)

[n] Source: The Food Stamp Program: Training Guide for Retailers. USDA Food and Nutrition Service. December 2002 (http://www.dss.state.va.us/pub/pdf/ebt_retguide.pdf) 

SOURCE: CRI's Bottle Bill Guide - http://www.bottlebill.org/legislation/usa/allstatestable.htm

JH:ts