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Iowa's bottle bill was not an election year topic on the campaign trail. But it reaches more prominence during the coming Iowa legislative session. We dive into the issues surrounding Iowa's longtime bottle bill on this edition of Iowa Press.

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Funding for Iowa Press was provided by Friends, the Iowa PBS Foundation. The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. Iowa PBS is supported in part by Wells Fargo. Fuel Iowa is a voice and a resource for Iowa's fuel industry. Our members offer a diverse range of products including fuel, grocery and convenience items. They help keep Iowans on the move in rural and urban communities. Together we Fuel Iowa. Small businesses are the backbone of Iowa's communities and they are backed by Iowa banks. With advice, loans and financial services, banks across Iowa are committed to showing small businesses the way to a stronger tomorrow. Learn more at IowaBankers.com.

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For decades Iowa Press has brought you politicians and newsmakers from across Iowa and beyond. Celebrating nearly 50 years of broadcast excellence on statewide Iowa PBS, this is the Friday, January 1 edition of Iowa Press. Here is David Yepsen.

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Yepsen: When Iowa passed its version of a bottle bill in 1978, Governor Robert Ray signed a perceived compromise between environmental groups, public park users and private industry. Iowans paid an extra 5 cents per can or bottled beverage to encourage recycling and make way for cleaner parks and roads that were once filled with trash. But in recent years, grocery stores have pushed back on the state mandate that they provide on-site can and bottle redemption and during the COVID-19 epidemic in 2020 some grocers stopped the redemption process all together. So to gather more insight on Iowa's bottle bill controversies we're joined by Michelle Hurd, President of the Iowa Grocery Industry Association and Troy Willard, Owner of the Can Shed redemption centers in the Cedar Rapids and Iowa City areas and a member of the Iowa Recycling Association.

Yepsen: Welcome to you both. Thanks for taking time to be with us to talk about this issue.

Thank you.

Thanks for having us.

Yepsen: Also joining the conversation across the table is Kay Henderson, News Director at Radio Iowa.

Henderson: Michelle Hurd, I'll start with you. I've gone to the grocery store, I bought a six pack, I paid 5 cents a can. What happens next, just briefly?

Hurd: So briefly just starting at the very beginning, when retailers purchase products that are in the bottle deposit law they pay 5 cents to the distributor. The retailers then charge the consumer 5 cents. And then the consumer when they redeem their product either at the redemption center or grocery store they receive their 5 cents back. And then the redemption center or the grocery store then will return the containers to the distributor where they receive the 5 cents and a 1 cent handling fee. So that is kind of how the, when you follow the nickel in the bottle deposit law.

Yepsen: Troy Willard, how do you explain the bottle bill?

Willard: Yeah, essentially the same way. IT's a cycle where each participant, whether you are the manufacturer, distributor, retailer, consumer of that product is playing a role in making sure this nickel is passing through the system but the container as well is making sure it's going to get recycled.

Yepsen: And we've tried to give a little overview of how it works. But I want you, starting with you Troy Willard, describe what is wrong with the bottle bill and what should the legislature do about it?

Willard: Well, you mentioned it was passed in 1978, implemented in 1979. And things really with the bill have not changed over time. And obviously there's, whether you're looking at the cost associated with handling the containers, whether it's a retailer or a redemption center, the penny that they are reimbursed for that isn't enough to cover that. And we've seen issues with the types and brands of beverages that people are consuming and the way the law was written originally didn't foresee the types of beverages we have. So there's a lot of beverages out there now that don't fall under the definition of a beverage container under the law. That could be fixed.

Yepsen: Michelle Hurd, same question to you. What is wrong with the bottle bill? And what should the legislature do about it?

Hurd: Well, I think we all have had a conversation about the bottle bill, many conversations over the years, and I think one thing that we all could recognize is that the bottle bill currently is not operating optimally. I shared Troy's, I understand where he's coming from with the 1 cent handling fee, we operate our redemption portion on the same 1 cent handling fee and have for 40 years. In addition to that, our industry has talked over the years about our safety and sanitation concerns. Operating a redemption center inside a grocery store where their primary concern is providing clean stores and providing consumer safe food is problematic. So I think that is one issue that we like to talk about. In addition, I think we also have a law that is not uniformly applied or enforced. There are several issues there that I'd love to talk about. One is dealer inequity. As Troy talked about what has changed over 40 years and in an increasingly competitive environment. We have more retailers that are looking to be in the food and beverage sales business. So, by example, 40 years ago you might not have had dollar stores that sell beverages that are contained in the bottle deposit law or maybe hardware stores. They are now directly across the street from your hometown grocer competing and not playing by the same rules or being held to the same standard. I think those are a couple of things we'd like to talk about.

Yepsen: Excuse me, what is the standard you want them to have?

Hurd: Well, all dealers, according to the law, need to redeem containers that they sell. And so if they sell them they need to redeem them. I think you'd find often that there are folks in the dollar store format and hardware stores that consumers may not realize that they're not your grocery store but they sell the beverage containers, they should also have to redeem.

Yepsen: Right.

Henderson: Troy Willard, what is the preferred option, if the legislature is going to tackle this issue and either redo or get rid of the bottle bill, what is the preferred option of your interest group?

Willard: As far as the place of return?

Henderson: Correct.

Willard: So, one of the key elements to a successful bottle bill is the number of opportunities or points of redemption you have to return them. And all in the vein of consumer convenience. The old adage is that if you buy it you should be able to take it back there. So I think everybody understands the sanitation concerns. Our business model is we want to make it more convenient than any place else to bring it to us. And so we think there is a role and certain ideas out there that are being implemented in other states that can keep the success rate up or make it better and make the retailers not be the focal point of those concerns.

Henderson: So walk us through what that would be.

Willard: I typically like to use Oregon as a model. Ten years ago Oregon started a drop system, a depot system, where they worked in conjunction with the retailers and came up with brick and mortar places to be the focal point of the returns for people and then they have also expanded those services into a network of drop sites where it didn't make sense to have brick and mortar locations and they use technology, they're using the web, they're using apps, people are dropping off their containers at their convenience and then just waiting for the money to come back into their account in a few days after somebody has a chance to pick that stuff up and count it and give them credit for it. So I think that has a lot of potential.

Yepsen: Michelle Hurd, we're talking in this state about crafting a compromise between grocery store owners and people who run redemption stores and consumers. So there are a lot of moving political parts here, a lot of ideas that could go into that compromise. So we want to go through some of these ideas. The first one is, why not raise the deposit to a dime? If you, in 1978 5 cents is today worth inflation adjusted 17 cents. I've seen higher figures. So that is -- but the bottle deposit has not kept rack. So what is wrong with raising it, raising the deposit to a dime?

Hurd: I think one of the things we've seen in some of the research we've conducted is that the last poll we took three or four years ago the majority of Iowans did not support increasing the deposit to 10 cents. And it's also important to point out that states such as Michigan that do have the 10 cents, while they do have the best redemption rate, Michigan is at the bottom as far as litter, their litter in their ditches. So I don't think that you also see the correlation between an increase to 10 cents and the actual impact it has on the overall performance with litter.

Yepsen: Troy Willard, what do you think of doubling the deposit?

Willard: Doubling the deposit certainly has an impact on the recovery rates. Oregon, again, went through this exercise a few years ago when they went from a nickel to a dime and they saw approximately a 20% increase in the return rates. You've got to be careful though just because yes, we want to see the highest return rate possible, but it's kind of like a Rubik’s cube, you start messing with things and it fixes it on one side and you look at the other and you've got another problem to deal with there.

Yepsen: That's a good way to describe the political problem with this. What happens to the money that is not redeemed? I buy a can of pop and I don't take the can back, what happens to that?

Willard: Yeah, so the distributors are the initiators of the deposit, so everything they sell they collect a nickel for. And if people don't return that to a store or to a redemption center to get their nickels back they basically get to keep that as a, I don't know, unintended windfall.

Yepsen: So that makes them a winner. That gives them a profit. What do you think of that idea?

Hurd: You're right, I think there's a lot of conversations about the unclaimed deposit money. We have a highly complex system and one that I think is part of, has been an obstacle with moving forward with this issue. As Troy mentioned, you have the Rubik’s cube and you start pulling one string and you have unintended consequences way down the line. I think there is money in the system that could be used to put towards the solution.

Yepsen: Kay wants to have a question about another piece of the cube.

Henderson: Mr. Willard, you mentioned that not every beverage container is currently part of the "bottle bill". What would happen if, for instance, water bottles were included?

Willard: You'd see a huge jump in the number of containers we'd have to handle. I'm not sure exactly what year it happened but here recently bottled water has surpassed soda in the amount of sales. And when you look at a Mr. Pibb bottle and a Dasani bottle right next to each other you're going, they're the same bottle, why are we not handling them the same way?

Yepsen: So you'd be okay with expanding the list of items of what would be covered?

Willard: Yeah, whole-heartedly.

Henderson: Would the grocery industry?

Hurd: I think we'd have a couple of concerns. I think one thing I have read here recently has been the concern that some of the redemption centers have had with the volume here recently. And I would suspect that you might have the same problem if you increase your volume with water bottles. I think from our perspective redeeming in the grocery store, expanding the containers would be very concerning for us just from the standpoint of space. A lot of times even some of our grocers have to rent facilities, have to rent places just to accommodate the materials that are currently included in the bottle deposit law. So I think if you expand that, I think from a space standpoint it would be extremely problematic for grocery stores to accommodate that. And in addition I think when you have 83% of Iowans have access to recycling you're asking those folks to take those out of their bins, pay a 5 cent deposit and take them back somewhere else for redemption. So I think some Iowans would have a hard time with losing the convenience of putting those on their curb.

Henderson: You brought up a question that is on our list. One option is to just get rid of the bottle bill and have people recycle. What do people who live in the middle of a five mile section and they're the only people who live there and they don't have a garbage truck who comes and collects their recyclables, what do they do?

Hurd: I think that is one of the things that we worked on four years ago. The bottle bill was enacted, as we talked about, to address litter. And now we're trying to make it a recycling solution. So four years ago we worked on a bill that would have eliminated the bottle deposit law, you wouldn't have paid your 5 cents, consumers would have kept their 5 cents and it would have helped fund access to recycling in some of those communities right now, not the 83% that currently have recycling, but focus on the areas that need more access. So we really, again, we're focused on trying to place the funds in the places we could that really need that additional access to recycling.

Yepsen: Don't grocers have some responsibility here to the community? You guys make money off of these products, particularly alcohol. Isn't part of selling that something that you ought to take some responsibility for, for cleaning up the trash?

Hurd: I think grocery stores are obviously an important part of all communities and we do take our role and responsibility in all of this very seriously.

Yepsen: Then why have you opposed this all this time?

Hurd: Over the years we have continued to try to be a part of the solution. I think there is a misperception that the grocery industry is trying to just purely scrap the bill, when in fact we have not. We have worked on legislation to expand recycling that would have eliminated the bottle deposit law but in the end would have expanded recycling options in Iowa. But also the last two years we did work on a bill, if we're going to keep the bottle deposit law in place we have supported a bill that would have increased funding to the redemption centers. We full-heartedly support expansion and a broad network of redemption centers across the state of Iowa. Quite frankly that helps our industry access some relief. So we have also supported bills and provided legislation that would help fund redemption centers as well.

Yepsen: I gather, Troy Willard, you would be comfortable with a plan to expand the number of redemption centers. The compromise could easily be raise the deposit, expand the list of items, give the grocers what they want, what they've always wanted, get them out of being the garbage dump that they don't like to be, and then give your industry some of this additional money and fund redemption centers.

Willard: Yeah, there certainly needs to be more money in the system to make it a viable financial model. And it all goes back to, again, the convenience for a consumer to do that. And a lot of factors that go into that are the population base, the number of containers that they're drinking, if it's an expanded bill or the bill as it currently sits, and you've got to have the participation. Raising the deposit encourages participation but you also need to make sure you're increasing the handling fee as well because that is the only way that redemption centers are going to make it.

Henderson: Well, tell us how many redemption centers there are today compared to 20 years ago.

Willard: Oh, it's far, far less. There has never been a really good, solid number to go to. The DNR website a lot of times the number that they list a lot of times are already out of business by the time that is hitting the website. It's certainly under 100. We've seen more of a decline here lately. It used to be in the past that somebody would try to replace somebody that went out of business but now we're just finding that there's these deserts out there because people are, can see that it's not a smart thing to get into right now.

Henderson: And is it a desert because of population density?

Willard: That's part of it. Again, good economic model in there would bring back some of these places and a lot of times it's going to be a local small business, entrepreneur, somebody that is doing it or somebody that is doing it for some type of charitable work in the community or something like that.

Henderson: The Governor is trying to find more money for water quality and environmental protection projects. Would the grocery industry be open to using some of this deposit fee for something other than actual processing of the cans and directing it toward environmental programs?

Hurd: We did support, we talked a little bit earlier about the piece of legislation that we worked on I believe it was four years ago, it did keep that 1 cent handling fee in place and did actually go to help fund programs like you're talking about whether it's expanding recycling, incentivizing, making progress on the diversion rate and all those environmental programs. We would support that, we supported that then and I think that we would be interested in looking at legislation that would address that as well.

Yepsen: Troy Willard, my friend Lee Rood at the Des Moines Register had an excellent series here recently about his bill and in it she reported some are talking about setting up a redemption center for every 25,000 people. That would give you about 10 of them in the Des Moines area. But as Kay said, there's some areas where there are not very many people. Is that a good metric for us to use, let's set up one redemption center for every 25,000 Iowans?

Willard: I know some of the systems they have put in place recently in Australia, they have shot for one for every 12,000 people. I think --

Yepsen: Do you know that it is in Oregon?

Willard: I don't know that they quantify it that way. Each individual state or country or providence is doing this stuff, they kind of cater it to what their needs are.

Yepsen: What about how many redemption centers would we need?

Hurd: I think currently if you look at, we've talked a lot about access and I talked about the lack of enforcement of our law right now, currently according to the Iowa law there are supposed to be, the beer wholesalers are supposed to provide a recycling facility in every county seat in the state of Iowa. I'm not sure that that's happening right now.

Yepsen: What do we have to do to enforce that? I see Fareway says we're not taking any more cans back. It's a misdemeanor penalty. How do we get corporations to obey the law?

Hurd: I think there are a number of different ways in which the law is not being enforced right now. I talk about the dealer inequity. There are dealers out there that have never redeemed cans and bottles. You also have, I mentioned that the beer wholesalers need to have a recycling facility in each county seat. The convenience standard, which is the distance in which a retailer needs to be from a redemption center in order to utilize and get the relief from a redemption center, that has never been properly defined.

Yepsen: What do you think?

Willard: There's a lot there. Specifically to the requirement for a beer wholesaler for every 25,000 people, actually the way that statute or that part of the statute reads that is supposed to be for smashed containers that aren't eligible to be redeemed. So basically when a container comes to us it's supposed to be intact, it's supposed to be able to stand on its own, it's supposed to be able to hold liquid, you're supposed to be able to read the embossing on it that says it is deposit eligible. So that section is just basically saying hey, if you've got a smashed can, if it's roadkill, if someone has mishandled it, we want to make sure these get recycled and they should go back to the beer wholesalers. So it's really not the beer wholesaler's responsibility to have a redemption center in each site to bring any type of nickel containers back to.

Yepsen: One of the societal benefits that occurs and it was one of Bob Ray's arguments for doing this, I remember him talking about it, people don't just go out and pick up the can, they also pick up the cigarette pack and the potato chip bag and it cleans up Iowa's roadway. And boy, if you ever drive through Illinois you can sure see the difference in the ditches and roadways there. So, Troy, what about that argument for strengthening and expanding the bottle bill that it has that ancillary benefit that Bob Ray saw?

Willard: It certainly is. If you're going to compare studies on litter you've got to make sure you're comparing apples to apples. Some studies they're looking at walking the roadways and it's a 300 foot zone that they're doing their piece counts on, some other places it's only a 15 foot zone. So you've got to make sure that when you're looking at the data that you're comparing apples to apples. I think it stands to reason that the people that are going and doing the walks and picking the stuff up on the roadside certainly have maybe just a different mindset morally about whether or not litter and picking up stuff is something that they should be doing. So they're doing the right thing.

Henderson: Michelle Hurd, I'm not going to ask you to place a bet here, but do you think this issue will be resolved in the courts? Or do you think it will be resolved by legislators, lawmakers?

Hurd: I think we have tried for many, many years to take it up to the Capitol and to find a compromise and we will continue in our industry -- there are more than just Troy and I and the redemption centers involved in this issue. And I think you can see by the people that are here continuing to have the conversation we continue to want to work towards a legislative solution. However, if we can't reach that we do have some administrative actions currently taking place where we are looking to try to have the law uniformly applied and enforced, some of the topics that I talked about with the dealer inequity, the convenience standard not being properly defined.

Yepsen: You mentioned enforcement is difficult. Forget the misdemeanor, the government has a way of imposing sanctions on all kinds of behavior. Why don't we say that a grocery store that doesn't want to take cans back, we're going to jerk your liquor license? That will get their attention.

Hurd: I think that there have been a number of dealers that have not been participating in this law for many, many years and I think whatever they look to do it needs to be enforced equally amongst all.

Yepsen: Troy Willard, how about a civil fine? Fine the corporation for not redeeming --

Willard: There certainly doesn't seem to be much teeth in the way that it's set up now and there's much more important things that county attorneys and local law enforcement people need to be working with. So I think how they go about enforcing any of the issues that any of the parties have could be better handled.

Henderson: Would it be helpful to have a federal bottle bill? There is some discussion, a tiny bit about that, so that you particularly in border communities you get rid of the discussion, hey did they buy this in Burlington or did they buy this over in Illinois?

Hurd: You bring up a good point. We certainly do see issues in the border where there's a competitive disadvantage from a pricing standpoint and there's also fraud that happens at the border. People that live or operate businesses on the border community are at a price disadvantage, the product certainly costs more because of the system, the cost of the system in addition to consumers having to pay the 5 cent deposit here that they don't across the border. You also have folks that buy product, don't pay the deposit and come here in Iowa to claim the deposit. So I think that as far as the conversation about that would eliminate any competitive disadvantage at the border, but I think that there are states that feel that they're doing a good job. One example would be I believe it's Washington currently has number 1 in litter prevention and they don't have a bottle deposit law. So would they want to have the cost associated with a bottle law when they're currently already performing well?

Yepsen: And I have to interrupt you, we're out of time. Thank you both for being here, appreciate it.

Hurd: Holy cow, you're right.

Willard: It did fly.

Yepsen: And we'll be back next week with another edition of Iowa Press at our regular times, 7:30 Friday night and again at Noon on Sunday. So for all of us here at Iowa PBS, I'm David Yepsen. Thanks for joining us today.

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Funding for Iowa Press was provided by Friends, the Iowa PBS Foundation. The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. Iowa PBS is supported in part by Wells Fargo. Fuel Iowa is a voice and a resource for Iowa's fuel industry. Our members offer a diverse range of products including fuel, grocery and convenience items. They help keep Iowans on the move in rural and urban communities. Together we Fuel Iowa. Small businesses are the backbone of Iowa's communities and they are backed by Iowa banks. With advice, loans and financial services, banks across Iowa are committed to showing small businesses the way to a stronger tomorrow. Learn more at IowaBankers.com.

Iowa Bankers Association
Associated General Contractors of Iowa