‘Take a measured loss’: Iowa lawmakers buckle down on the bottle bill

Iowa lawmakers say they’re ready to change the state’s long-suffering bottle redemption program – even if some stakeholders aren’t happy with the plan.

The Legislature created the bottle redemption system 4o years ago. But for years, participants in the system – beverage distributors, retailers and redemption centers – have been calling for changes, saying the current law is burdensome, expensive or otherwise flawed. Proposed bills on the issue have faltered at the Capitol each session.

Sen. Jason Schultz, R-Schleswig, said Monday lawmakers can’t keep looking for a solution “that lets everybody win.”

“I think we’re to the point where Iowans have to win and everybody else at the table may have to take a measured loss,” Schultz said. “We’re going to have to pick a position, we’re gonna have to make it work.”

Rep. Brian Lohse, R-Bondurant, said the House was also working toward a solution with all the stakeholders, “even if that was something they were uncomfortable doing.” House Republicans have not yet released their proposal.

“It doesn’t matter who says no,” Lohse said. “This is something we’ve just got to get off the table.”

A Senate subcommittee advanced Senate File 2122 on Monday. The bill, proposed by Sen. Ken Rozenboom, R-Oskaloosa, would:

• Create a 2-cent handling fee for redemption centers
• Allow retailers to opt out of taking returns if the store is within a 20-mile radius of a redemption center
• Require a universal product code label with the redemption value on all eligible containers
• Delegate the program to the Alcoholic Beverages Division instead of the Department of Natural Resources
• Start a state mechanism to recover the nickel from unredeemed cans. Rozenboom said up to $48 million goes unredeemed each year.

Schultz said repeatedly that he expects the bill to advance through the full Senate Ways and Means Committee.

“This is the best game in town, right now,” Schultz said, though he said the proposal was still open to amendments.

How does the bottle bill currently work?

Iowans pay an extra 5 cents on certain cans or bottles they purchase at the store. If they return that container to the store, they get the nickel back.

The store then gives the returned container to the distributor. Retailers receive 6 cents per item – 5 cents to reimburse up-front costs and an additional penny for handling fees. The distributors pay the handling fee and keep any money from unreturned deposits.

Redemption centers can also collect cans and bottles from customers and earn that extra penny on each container.

Stakeholders divided on Senate proposal

Grocery store lobbyists, who objected to a previous bottle bill proposal this session, were in favor of Rozenboom’s proposal. The most recent bill would allow grocers to opt out of accepting bottles and cans if a redemption center is within 20 miles of the store. 

“It really holds the promise of preserving the bottle bill and making sure that it’s strengthened for consumers long into the future,” former state Sen. Bill Dix said on behalf of Fareway stores.

Redemption centers objected to that change, raising concerns that fewer stores accepting containers would stress their businesses.

“I am understaffed and overwhelmed,” said Sheri Cunningham, owner of the Pella Redemption Center. 

Mick Barry, president of Mid America Recycling, said the 20-mile radius may cause difficulties for urban customers, as just one redemption center within the city could allow dozens of retailers to opt out of the program.

Some recycling advocates also argued for raising the deposit fee and expanding the law to non-carbonated beverages such as bottled water and sports drinks. Rozenboom said those additions would complicate the bill too much and those provisions could be revisited in the future.

Distributors protest government expansion

The remaining stakeholder group that opposed proposal was the beverage distributors, who stand to lose the money they collect from unredeemed deposits.

David Adelman, executive director and lobbyist for the Iowa Wholesale Beer Distributors Association, said the proposal would be costly for government and also cost jobs in the industry. He said the industry has made “significant investment” in its redemption process, including about $2oo,000 each for can crushers and sorters.

“So that’s basically what this bill is doing is removing private innovation and expanding government …” he said.

Editor’s note: This story has been updated to correct an editing error that misstated the cost for can crushers and sorters. Adelman said the equipment costs $200,000.