Environment Committee

JOINT FAVORABLE REPORT

Bill No.:

HB-5618

Title:

AN ACT CONCERNING AN INCREASE IN THE HANDLING FEE FOR BOTTLE REDEMPTION CENTERS.

Vote Date:

3/22/2017

Vote Action:

Joint Favorable

PH Date:

3/13/2017

File No.:

383

SPONSORS OF BILL:

Rep. Joseph P. Gresko, 121st Dist.

Rep. Mary M. Mushinsky, 85th Dist.

Rep. Jonathan Steinberg, 136th Dist.

Rep. Diana S. Urban, 43rd Dist.

REASONS FOR BILL:

Connecticut has not changed the bottle handling fee per container in 34 years remaining at 1.5 cents for beer and other malt beverages, and 2 cents for soda and other beverages covered under the state's current bottle recycling system. This compensation is out of date and does not cover the cost of redemption. The absence of any increase in the handling fee has puts many redemption centers out of business over the last several years, and may put more redemption centers out of business in the future. This bill intends to help redemption centers by increasing the handling fee for beer from 1.5 cents to 2.5 cents, and from two cents to three cents for other beverage containers covered under the state's current bottle recycling system.

RESPONSE FROM ADMINISTRATION/AGENCY:

None Expressed.

NATURE AND SOURCES OF SUPPORT:

Pat Bourne, Executive Director, SARAH Inc.: SARAH is an agency providing services to over 600 children and adults with differing abilities throughout the state. One of SARAH's primary missions is to help people with differing abilities find and keep employment. It is estimated that 75-80% of people with disabilities are unemployed. To that end, SARAH Inc., created SARAH Recycles. SARAH Recycles is an innovative program where SARAH supported workers collect and process donated refundable bottles and cans. This program partners with municipalities, local businesses, and the public at large. Every nickel redeemed is turned into a paycheck for a SARAH supported worker. SARAH Recycles collects over one million donated bottles and cans annually.

Lori Brown, Executive Director, CT League of Conservation Voters: It is necessary to update this already successful law to ensure it remains viable. As times have changed and the cost of doing business has risen, neither the deposit incentive nor the program fees have kept pace. Unless the state updates the “Bottle Bill” in a way that encourages consumers to increase participation and allow redeemers to earn more per container, this important law will continue to be under attack by those who want to avoid producer responsibility and those who do not make enough money to cover the cost of handling the bottle redemptions.

Alicea Charamut, Lower River Steward, Connecticut River Watershed Council (CRWC): Thousands of volunteers deploy along the waterways in the Connecticut River Watershed to participate in the Connecticut River Watershed Council's Source to Sea Cleanup in order to remove 50 tons of trash each year. It is CRWC's goal to get out of the business of hauling trash out of our rivers. Connecticut's current Bottle Bill is in need of repair. Because the cost of doing business and providing services has certainly increased since the Bottle Bill was first enacted in 1980, the handling fee must be increased so that dealers and redemption centers can perform their responsibilities under the law.

Katharine Cohen, Executive Director, Connecticut Public Interest Research Group (ConnPIRG): Bottle bills are one of the most effective and simple recycling programs ever created. Bottle bills achieve higher recycling rates than residential recycling programs. By source separating, the quality of the recycled material is higher, thus creating more opportunities to use this recycled content and yielding greater value. The bottle bill handling fee should be updated to reflect the role redemption centers and retailers play in the collection of materials. Right now, the handling fee in Connecticut is 1.5 or 2 cents. If the state fails to update the handling fee, redemption centers may have to close down, which would be an impediment to our entire recycling program under the bottle bill.

Tim Devanney, Owner, Highland Park Markets: As the cost of paying employees to further handle the bottles increases, with the minimum wage, the actual loss on redeeming deposits continues to escalate. With the current handling fee of $0.0175 in Connecticut Highland Park Markets simply cannot cover such costs—this was the original intent of the handling fee. This proposal has a split handling fee of $0.025 for beer and $0.03 for soft drinks. Almost every other deposit bill state has a $0.035 handling fee. If retailers are going to operate in a bottle law environment going forward, it is appropriate after 38 years, to adjust the fees accordingly.

Shahil Kantesaria, Owner, Central Connecticut Redemption Center, New Britain, CT:

Supports the bill; however, recommends the following changes: (1) increase by July 1, 2017, handling fees to at least 3.5 cents per container. Dealers and redemption centers are in desperate need of relief to offset the ever rising cost of inflation and business operations that have been endured. It is not a sustainable business model to be running a redemption center with ever increasing cost and no change in the handling fee, and (2) the law should be modernized to include additional types of non-carbonated beverage containers.

Chuck Riegle, Senior Vice President of Government Affairs, TOMRA North America, Inc.:

Both Beverage Retailers (Dealers) and Redemption Centers perform significant functions in the deposit-return process, providing a convenient point of redemption for consumers to redeem used beverage containers for deposit, ensuring that containers that are redeemed are covered by the program, and separating used beverage containers. After New York raised their handling fee to 3.5 cents, beverage retailers invested in their redemption services, and entrepreneurs invested in siting almost, 1,000 more redemption centers. This increase in redemption centers allowed consumers and high-volume redeemers opportunities to select the location that served their needs best.

The Environment Committee received in excess of 25 additional similar testimonies supporting the bill because the removal of the refund value removes the incentive to recycle, hurts non-profits that rely on bottle and can drives, and removes the need for businesses and thus hurts jobs related to the recycling industry in Connecticut.

NATURE AND SOURCES OF OPPOSITION:

Kevin S. Dietly, Northbridge Environmental Management Consultants, Representing the American Beverage Association: This bill will make the deposit system larger, less efficient, and more costly than it already is for consumers and businesses. Connecticut has the dubious distinction of the worst-performing deposit program in the US. Only forty-nine percent of containers were returned in 2016, so Connecticut consumers pay a de facto 2.5 cent tax on every soft drink, beer, and water container they buy.

Mike Elmer, Director of Capabilities, Coca-Cola Bottling Company of Northern New England, (CCNNE): CCNNE has taken steps to reduce their environmental footprint, while being resourceful in how to reduce their operating expense in times of rising costs. The bottle bill is a grossly inefficient method of collecting a very small slice of the total recycling opportunity. Further, bottle/can redemption inhibits the ability of Connecticut towns to improve local recycling of all materials by depriving them of the tens of millions of dollars in scrap revenue, and sending the message that some plastic, glass and aluminum should be recycled differently from other plastic glass and aluminum.

Christopher Roos, President, Teamsters Local 1035: Local 1035 is troubled by the prospect of doubling the deposit from five to ten cents or raising the handling fee from two to three cents on soft drinks and water because those proposals would create a significant negative impact on the businesses that employ our members. With significant increased costs of doing business in the state, the jobs of Local 1035 members will be at stake.

James P. Toner, Jr., Director of Government Relations, International Bottled Water Association (IBWA): The International Bottled Water Association has always been a strong advocate for recycling and supports comprehensive, multi-industry approaches to recycling and solid waste management. However, this bill places an undue burden on distributors and manufacturers in Connecticut while doing little to actually increase recycling rates or provide support to the industry in the state. Instead of resorting to past plans of increasing the actual deposit (which would have a significant negative impact on recycling), this bill simply shifts the fiscal responsibility of Connecticut's redemption program on to distributors and manufacturers via an inequitable increase in the handling fee.

Reported by: Steve Smith / Ussawin R. Bumpen

Date: 3/29/2017