Lawmakers want to follow the money as bottle bill debate fizzes up again

This year's proposals to overhaul the bottle bill would allow grocers to opt out of the system and force distributors to reveal how much money they pocket when customers don't return to get their container deposits. (Photo by Dennis Young via Pixabay)

The Iowa Legislature needs to fix the state’s decades-old bottle and can deposit law this year, or crush it, a key lawmaker said this week. 

Proposed legislation would force distributors to reveal how much money they pocket from customers who don’t return cans and bottles to get their deposits back. And there is talk of letting grocers and other retailers simply opt out of the “bottle bill” system. Both ideas have critics.

“We’re either going to kill this bill completely or fix it and not push it down the road one more year,” said Sen. Craig Williams, R-Manning, who served on a subcommittee that approved Senate Study Bill 1087 this week. That bill would force distributors to reveal how much money they keep when customers don’t return containers to get their deposits back. 

“Unfortunately, we’re not getting really good information,” Williams said. “But we’re going to fix it if I have anything to say about it. We’re going to fix this once and for all.”

His comments came as grocers, redemption center operators and beverage wholesalers squared off in a couple of subcommittee meetings.

They debated this year’s proposals to rework an anti-litter law that has applied a nickel deposit to soda, beer and wine bottles and cans since 1979, when many of today’s beverage offerings weren’t on the market yet.

The nickel deposit hasn’t changed, and neither has the penny paid by distributors to the various redemption systems at stores and elsewhere that take the cans and bottles to recyclers. Adjusted for inflation, that nickel would be 18 or 19 cents today. Talk of doubling or tripling the handling fee has gone nowhere over the years.

In a typical Legislature, efforts to change the anti-litter measure get about as far as a customer staring at a broken or closed can redemption machine. Governors of both parties have supported the existing law over the years and it continues to enjoy broad public support. But grocers have long argued, so far without success, that filthy cans and bottles have no place at their stores. They’ve also offered to help pay for a different recycling system.

In recent months, bottle bill opponents have tried bypassing the Legislature. The Iowa Grocery Industry Association has petitioned the Iowa Department of Natural Resources multiple times in recent months, so far unsuccessfully, in an attempt to make it easier for grocers to send customers and their beverage containers to a redemption center.

The association has challenged DNR’s redemption center rules in court. It also has collected a list of other businesses — sporting goods stores, hardware and lumber operations, convenience stores — that sell beverages but illegally decline to take bottles and cans back from customers seeking their deposits.

At the same time, DNR has argued that it is up to lawmakers, not the agency, to decide how the bill should be enforced. And a representative of the Iowa Attorney General’s Office, Nathan Blake, this week objected to language in Senate Study Bill 1087 that would require the attorney general to handle enforcement. “You’re left with a situation where you’re either not enforcing it, or you’re hauling people into court,” Blake said. 

The attorney general’s office said it could only take cases to court, making DNR’s administrative penalty structure a better bet.

Money left on table, but how much?

Senate Study Bill 1087 has nothing to do with the age-old debate over raising the deposit or adding new containers to the list covered by the bill, said Sen. Carrie Koelker, R-Dyersville, who led a subcommittee meeting.

“We’re not having this meeting to decide if (the deposit) should be five cents or six cents or eight cents, or if it (is applied to) sports drinks,” Koelker said. “This bill is talking about the money that is pretty much left on the table by those people who paid the deposits and they did not go back and receive that money back. So there is a windfall that could be to the tune of $1 million, I’ve heard up to $27 million or $23 million. We don’t know the exact figure, but no matter how much, it’s dollars at the table that does deserve a hearty conversation.” 

Distributors also get money by selling the scrap aluminum and glass, the Iowa Department of Natural Resources reports. 

Those companies pushed back on the idea of requiring an accounting of money from unredeemed containers, suggesting the move could violate their trade secrets. 

Lobbyist David Adelman, who represents the Iowa Wholesale Beer Distributors Association, called the accounting language a “poison pill.”

“We believe the bill is a nonstarter,” Adelman said.  

But lobbyist Chip Baltimore, representing Fareway Stores, disagreed. “This bill is sunshine,” Baltimore told a legislative subcommittee. “It’s the public’s money, after all.”

The Iowa Beverage Association, the Iowa Wholesale Beer Distributors Association, and Doll Distributing were among those with lobbyists registered in opposition. Fareway Stores Inc, FUELIowa and Kwik Trip Inc. supported the bill. 

Lawmaker: Deposit system ‘broken’

A second bill that advanced this week, Senate Study Bill 1160, would allow beverage sellers such as grocery stores to opt out of the bottle bill beginning in July 2022. It also would double the handling fee paid by distributors to two cents per container. 

“I feel like there is some momentum here so we can get to a solution,” said Sen. Chris Cournoyer, R-LeClaire, one of the members of the subcommittee that approved the bill.

Said Sen. Jesse Green, R-Harcourt, another subcommittee member: “I think everyone agrees the current bottle bill is broken.”

Senate Study Bill 1160 passed a subcommittee this week and is in the Senate Natural Resources and Environment Committee.

The Iowa Beverage Association, Iowa Wholesale Beer Distributors Association, Anheuser Busch and Doll Distributing were among those opposed to the bill. FUELIowa, representing convenience stores, the Iowa Grocery Industry Association, redemption centers and Kwik Trip Inc. were listed as in favor.

Consensus forming?

Marc Beltrame, lobbyist for FUELIowa, said discussions have revolved around fixing the system, not dumping it.

“I truly do believe that folks in the industry are coming at this from good faith,” Beltrame said. “They’re certainly coming at it through the lens of their own experience. We all know that we’ve seen countless study committees in 42 years. We’ve seen countless bills go to the scrap heap in 42 years.

“At least in the industry, I don’t think we’re that far apart from one another on trying to modernize the bottle bill. I don’t know anybody whose intention is to get rid of it,” Beltrame added.

That last line is eye-opening because the grocery industry for years backed legislation that would have ended the deposit program. In recent years, environmentalists have pushed to add containers not covered by the bill and to raise both the deposit and handling fees.

Grocers in recent months have supported using curbside recycling or a bolstered redemption center system, perhaps shifting to a system in which customers take the containers to a redemption center in a large bag that is scanned so the deposits can be returned to the customer’s online account.

Without a consensus between the two sides, the debate is unlikely to lose its fizz soon.