116 3rd St SE
Cedar Rapids, Iowa 52401
A bill significantly changing Iowa's 40-plus-year-old bottle and can deposit law is on the move in the Iowa Legislature. And in its current form, lawmakers should toss it into a recycling bin.
The bill, Senate File 368, would allow beverage retailers to opt-out of collecting containers and redeeming consumers' 5-cent deposits if the store is within 20 miles of a redemption center. That's going to mean a lack of convenience and long drives for many Iowans.
On the plus side, the bill does increase the handling fee paid to redemption centers from 1 cent per container to 2 cents, but only temporarily. The fee would drop to 1.5 cents in 2023.
The current system is handled without government intervention. Distributors collect the nickel deposit per container from retailers upon delivery of products. Retailers then charge consumers. Distributors collect empties from retailers and redemption centers, refunding the nickels paid out for returned containers and paying them the 1-cent handling fee.
Under the bill, the state Alcoholic Beverages Division would collect deposits, and nickels unclaimed for unreturned cans and bottles would go into a fund and be returned to taxpayers. Under current law it's distributors who keep proceeds from unreturned containers.
So retailers get their long-sought goal of getting out of the can redemption business, but not the beverage-selling business. Redemption centers get a temporary boost in handling fees, then a very small permanent boost. Distributors have their role largely taken over by a government agency and lose millions of dollars in unclaimed nickels.
But consumers are the biggest losers, especially in rural areas.
Troy Willard, owner of Can Shed redemption centers in Cedar Rapids, Hiawatha, Marion, Manchester and Iowa City, told lawmakers at a recent hearing that even with the small permanent boost in the handling fee, it is unlikely rural redemption centers would receive a volume of containers needed to become profitable.
There are still ways the SF 368 could be improved. The doubling of the handling fee could be made permanent in recognition of the critical role redemption centers would play. Retailers could help further subsidize local redemption operations, especially in smaller towns.
A House bill would shorten the distance requirement in counties with less than 30,000 people to 15 miles and to 10 miles in large counties. That's a step in the right direction.
And what this entire debate has ignored is the need to expand the law to include juices, sports drinks and other popular beverages.
The main focus of any bill should be consumer convenience and making sure containers get recycled, not tossed into landfills or ditches. Any changes that would hobble the deposit law should be dropped.
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