CONTAINERS, BEVERAGE;

You asked (1) what happens to the money distributors receive from unredeemed bottle deposits, (2) if unredeemed deposit money is identifiable, and (3) what is the Connecticut Resources Recovery Authority’s (CRRA’s) proposal for unredeemed deposit money?

SUMMARY

Under the bottle bill, which the legislature enacted in 1978, beer and carbonated soft drink distributors and bottlers keep the money from unredeemed bottle deposits (also known as unclaimed deposits and escheats). Distributors state that they treat the money like other revenue and do not segregate it, which they say does not make it readily identifiable.

The CRRA proposed that it receive 68% of unredeemed deposits, a figure it bases on the amount of returnable bottles and cans it estimates to have processed. The state, or towns that the CRRA does not serve, would receive the rest of the deposit revenue, according to the proposal.

BOTTLE DEPOSIT SYSTEM

Connecticut’s deposit system works at follows:

1. retailers pay beverage container distributors $ . 05 for each beer or carbonated soft drink container that the distributors deliver;

2. the consumer then pays the retailer $ . 05 for each beer or carbonated soft drink container that he purchases from the retailer;

3. the retailer or redemption center pays the consumer $ . 05  for each container that he returns;

4. the distributor reimburses the retailer or redemption center $ . 05 for each beer and carbonated soft drink container, plus a handling fee of $ . 015 on each beer container and $ . 02 on each carbonated soft drink container, that consumers return;

5. the distributor keeps the $ . 05 for each unclaimed deposit.

For more information, see the attached Department of Environmental Protection (DEP) summary or see: Bottle Bill FAQ. (The DEP website does not include the fact that Hawaii enacted a bottle bill in 2002, bringing to 11 the number of states that have enacted such a bill).

CRRA’S PROPOSAL

CRRA proposed legislation in its December 31, 2002, “Steering Committee Report to the Board of Directors and the General Assembly” that would allow it receive and use 68% of state unclaimed bottle and can deposit revenue to support its operations, with the state or other towns that it does not serve receiving the other 32%. CRRA would use a portion of the unredeemed bottle and can revenue for “quality of life projects” in cities that host CRRA facilities, according to the report, but it does not state how much. Public Act 02-46 required CRRA to submit the report.

According to the report, CRRA estimates that it has processed between 9 and 12 million redeemable bottles and cans at its waste processing facilities over time. The report also states that large percentages of the recyclable material CRRA processes are redeemable containers.

Processing these bottles and cans, the report argues, (1) increases the cost of operation and maintenance; (2) creates slag, which can cause operational problems (such as boiler outages); and (3) may cause cans to combust, creating more material to dispose of as landfill.

Projected Revenue

The report cites an Office of Fiscal Analysis (OFA) fiscal note that projected Connecticut would receive $ 16. 4 million for a 12-month period based on its population being approximately half that of Massachusetts, which received $ 31 million in unredeemed deposits in 2001. But the report does not mention that OFA’s projections for potential revenue in the first year of such a program run between $ 5 million and $ 15 million, depending (1) on whether or not a system would be in place that allowed the program to operate for 12 months and (2) if there would be full compliance by all manufacturers and distributors.

Attached is a copy of the proposed legislation from the CRRA report.

JRH: ro