SERVICE _ M" souri a in Iu1>fiflI'1Wiui mu 3 0 860591 Win -1 01 NONRETURHABLES: THE BOTTLE BILLS ISSUE BRIEF NUMBER IB74076 AUTHOR: Reisch, Mark Environment and Natural Resources Policy Division THE LIBRARY OF CONGRESS CONGRESSIONAL RESEARCH SERVICE HAJOR ISSUES SYSTEH RDATE ORIGINATED Qgggggzg DATE UPDATED ggggggeo FOR ADDITIONAL INFORMATION CALL 287-5700 0226 CRS- 1 IB7uo76 UPDATE-02/25/80 £§§Q§-2§ElE£$lQ§ Beverage containers, particularly for beer and soft drinks, form a highly visible segment of litter in the United States. Studies have estimated that beverage containers account for 20-32% by number and 62% by volume of total litter, and 7% of total municipal solid wastes generated in this country. The increased presence in the marketplace of nonreturnable beverage containers and the concomitant decline of refillable bottles have been blamed by many as major contributing factors to the litter problem. The most recent report on the issue predicts that by 1985 the total number of nonrefillable bottles and cans used for beer and soft drinks will have doubled over 1970 consumption. In addition, there are energy and economic considerationsv involved in the question: should Congress enact legislation requiring a refundable deposit to be paid on beverage containers? §éQ§§BQE!2-A§2.E9LlQX.A!AL1§l§ W Since August 1970, legislation has been introduced in Congress to control nonreturnable beverage containers. While a number of approaches have been put forth, including taxes and outright bans, the most frequent proposal is one that requires a refundable deposit on all beer and soft drink containers. Proponents of the legislation have felt that the dual incentives of increasing the cost of littering, and promoting the salvage of littered containers would substantially reduce the number of beer and soft drink containers discarded along the Nation's roadways and in its recreation areas. Little is known about litter rates, and litter collection cost data are fragmentary. One frequently quoted source put the number of discarded beverage containers at 2.2 billion for 1969 and expected this number to reach almost 4 billion by 1976. The National Center for Resource. Recovery has estimated public litter control costs for all littered items to be $1 billion annually, and the Federal Highway Administration has estimated the public expenditure for roadside cleanup to be $500 million. Pro-rating thesei figures for the beverage container share of litter only (20-32% by number) yields $200-320 million for cleanup in all places, and $100-160 million for roadside cleanup ascribable to beer and soft drink bottles and cans. Private expenditures are thought to be at least equal to the public outlay. The Bureau of the Census has reported that litter control takes the largest share of State solid waste management budgets. §2A-§-é§$lQE Several States have passed beverage container legislation. Beer and soft drinks are generally defined to include malt beverages and unflavored soda water and similar carbonated soft drinks. Except for Vermont, States having deposits also require that the refund value he clearly indicated .on the container. Provisions and dates of effectiveness of the States‘ legislation follow: ‘ CRS- 2 IB74076 UPDATE-02/25/80 ___ _§gy_g§__________ REUSABLE Litter Tax Pull Throw Plastic RECYCLABLE OR Q§gQ§;g on certain Tabs Away Holders BIODEGRADABLE Q§-:lQ-.REQQE§E§.------_._§Q§El§§-- CQ!1A£!§§§-._ Oregon x* x x 8 10/01/72 Vermont X X X X 09/01/731 Maine X X X 01/01/78 ‘ Michigan X** X 12/03/78 Iowa x*** X 07/01/79 Connecticut X X 01/01/80 South Dakota 1 X 07/01/78 ‘ Washington ' X O5/21/71 Colorado X 07/01/77 California X X 01/01/79 Virginia X X 07/O1/79 Minnesota 8 X O1/01/77 Hawaii X ' X 01/01/79- *Massachusetts X O6/01/79 Delaware 8 establishes a bottle bill commission to discuss with ad. 07/12/78 and Pa. regional litter control * $.02 deosit for containers used by more than one manufacturer ** $.05 deposit for containers used by more than one manufacturer *** also $.05 deposit on liquor bottles CBS- 3 IB7fl076 UPDATE-02/25/80 The Oregon experience has been widely observed; the reports do not always agree, partly because of different information-gathering techniques and assumptions. Most do agree that there have been great reductions in beverage itainer litter, as well as other litter, and that the law is enormously popular with the citizens. In the year following enactment, beer sales rose 1% compared to the historic growth rate of 5.3%; more recent data suggest a return to the historic level. Estimates of soft drink sales range from a slight drop to an increase of 10%. Refillable bottles are returned at rates of 80-95% (5-20 trips per bottle), and cans at rates averaging around 70%. Prices of soft drinks declined slightly in the first year of the law, and beer prices rose slightly; in neither case was the law thought to have much, if any, impact. Estimates of related job losses in Oregon during this period range from 75 to 252, excluding retail workers; one estimate of new retail jobs is 000. one report computed a net payroll increase of $1.6 million. Estimates of the impact on corporate operating profits and capital investment costs vary widely. one contract canner closed with a loss of 50-60 jobs. Bottle bill referenda were held in four States on Nov. 2, 1976. The proposal won in Maine with 58% of the vote, and in Michigan with 63%; it was defeated in Massachusetts with 50.4%, and in Colorado with 67%. In the 1978 elections voters rejected bottle bills in Nebraska (57% against) and Alaska (62% against). 1151-9 EA!-...l!2AQ..§ Having an 8% growth rate, beverage containers currently comprise about 7% of municipal solid waste. A mandatory deposit .would reduce the beverage ntainer share by 70-75%, or 5-6 million tons. A study prepared for the Environmental Protection Agency (EPA) examining the environmental impact of different containers showed that the returnable bottle making ten trips, compared to the three conventional nonreturnables (bimetallic can, aluminum can, and one-way bottle), provided a reduction int energy consumption of 60-71%, a reduction of atmospheric emissions of 58-71%, and a difference of waterborne wastes ranging from an increase of 1% to a reduction of 41%. An investigation commissioned by a large glass manufacturer revealed a reduction of energy consumption of (at least 62~72% for an all-returnable bottle system (15 trips) compared to seven other nonreturnable container systems. A mandatory deposit law would not ban nonreturnables, however, and they are sure to retain a share of the market. Thus, the actual energy savings would be something less than the figures above. EPA has estimated the energy savings to be the Btu equivalent of 92,000 barrels of oil per day. A study performed for EPA estimated that in 1969 a bottle law would have resulted in a loss of approximately 60,500 jobs nationally, and a gain of 60,800. Other. studies have also estimated a net gain in employment. Industry and labor dispute these figures with their own estimates that range to as many as 164,000 jobs eliminated. Projections of changes in net income also differ greatly. By phasing in such a system over several years, employment dislocations would be reduced.) Estimates of capital equipment 'andered obsolete and the cost of replacement are even more disparate. when this issue came before the Senate on June 30, 1976 (the first time; either chamber voted on it), much of the debate was on the lack of information about its potential impact and the desirability of yawaiting the cas— 4 IB7uo76 UPDATE-02/25/8'0 results of the study commissioned by the Federal Energy Administration (PEA). The PEA report appeared October 1st and concluded that if national mandatory deposit legislation were implemented in the late 1970s, by 1982 it would result in decreased energy consumption, increased capital investment requirements (fixed plant and equipment), and a net increase in jobs a ” total labor income. ‘ A National mandatory deposit legislation has been endorsed by the 0.5. Environmental Protection Agency (Senate hearings, may 7, 197a); the Citizens Advisory Committee on Environmental Quality ("Report to the President and the Council on Environmental Quality 197a"); the National Commission on Supplies and Shortages ("Government and the Nation's Resources: Report of the NCSS,“ December 1976); the National League of Cities (“National Municipal Policy 1975," adopted at annual business session Dec. 5, 1975); and the National Association of Counties (House hearings, Apr. 15, 1975). It has been opposed by the Bureau of Mines (House hearings, Apr. 17, 1975); and a Bureau of Domestic Commerce staff study has recommended against it ("The Impacts of National Beverage Container Legislation," October 1975), although the Department of Commerce has not adopted a formal position on the issue. sThe Consumer Product Safety Commission "supports efforts to promote reuse and recycling of empty beverage containers" as a means of reducing injuries associated with litter (May 17, 1977, letter from CPSC Chairman 5. John Byington to Office of Management and Budget Director Bert Lance). 0 The interagency Resource Conservation Committee, which was created by the Resource Conservation and Recovery Act, addressed the bottle bill issue in its final report to the President and Congress on July 13,) 1979. The 9-member Committee did not come up with a strong recommendation on the issue; four members came out in favor of national legislation, two were against such legislation, and three abstained. The Committee did recommend certain desi features for a national deposit system, if one (were to be adopted. They agreed that the legislation should include the following provisions: (1) all beer and soft drinks in sealed containers should be subject to the law, regardless of material used, with the EPA Administrator authorized to include other beverages and containers by regulation; (2) the minimum deposit should be 5 cents, raised in 1-cent increments indexed to the Consumer Price Index; (3) deposits should be uniform; (H) deposits should be imposed at the distributormwholesaler stage; (5) a 2-year lead time should be provided prior to implementation; (6) nonrefunded deposits retained by the; industry should not be taxed away; (7) pull-tabs should not be banned; and (8) cartons and carrying devices should not be regulated. The committee did not address whether State and local deposit laws should be preempted by Federal legislation, nor whether economic losses caused by a deposit law’ should be compensated. The General Accounting office, in a Dec. 7, 1977, report on the national effects of a bottle bill, said that litter and solid waste would be reduced, costs of handling returned containers would rise, and unclaimed deposits retained by industry would rise. Also there would be reductions in raw material consumption, energy use, and system costs for containers, and increased system costs for using more refillable bottles. If legislation is enacted, the report said, it should include: (1) a deposit on all beverage containers; (2) adequate lead time prior to implementation; (3) a public (education) program; (4) enhancedm access to retraining programs and unemployment compensation for areas with employment problems "resulting fry the legislation; (5) return of a portion of the unredeemed deposits to municipalities to clean up litter and solid) waste;- (6) monitoring of 'the effects of the law; and (7) a mechanism to encourage can recycling. CBS- 5 ~ IB74076 UPDATE-02/25/80 A July 1979 report from the Office of Technology Assessment, ggtg;igl§_anQ §nggqy_§rgm_§gg;g;pg;_ga§tg, considered the effects that mandatory beverage container deposit legislation would have on centralized gresource recovery stems and source separation programs. They found that a mandatory deposit system would reduce the revenue of an existing resource recovery plant by no more than 5%. For many systems, such as simple waterwall incineration, deposit legislation would have no effect on revenues. Beverage container ydeposit legislation might reduce potential revenues of a residential source separation program for newspaper, glass, and cans by as much as 25% and for a more comprehensive waste recycling program (with all form of paper and yard wastes included) by as much as 13%. §e9§le:i9n§-£92.zsée§al.Ea2ili:ie§ Section 209 of the 1970 Resource Recovery Act required the Environmental Protection Agency to "recommend to appropriate agencies and publish in the Federal Register guidelines for solid waste recovery, collection, separation, and disposal systems." These guidelines were made mandatory on Federal agencies by Section 211. on Nov. 13, 1975, pursuant to an agreement worked out between EPA and three environmental organizations that had brought suit against the agency, EPA published proposed guidelines requiring a 5-cent refundable deposit to be placed on each closed beverage container for vcarbonated beverages sold at Federal facilities. In the ensuing furor nearly 6000 comments on the regulations were received, over 200 congressional inquiries were made, EPA's authority to issue the guidelines was challenged (and rejected by the agency's General unsel and the Justice Department), and several bills were introduced to prohibit the promulgation of the regulations. when final publication of the guidelines occurred on Sept. 21, 1976, they were modified to clarify that_any type of container is acceptable for use in implementing a returnable beverage system as long as the containers are returned and either reused or recycled. They were also revised to allow exemptions at facilities where circumstances warranted. Implementation was to be no later than Sept. 21, 1977. 0n July 5, 1977, Secretary of the Interior Cecil D. Andrus announced that all areas of the National Park System that sell beverages in cans or bottles were putting the 5—cent refundable deposit into effect. The only exceptions were for beverages purchased for on-premises consumption, and for beverages purchased from cup—dispensing vending‘ machines. The Department of the Interior news release also said that a test program conducted from may to September 1976 at Yosemite National Park showed that 70% of the containers were returned. Thirty tons of recyclable aluminum, glass, and steel were recovered, compared to 1 ton of aluminum cans reclaimed in previous years when the return of containers was on a voluntary basis. The Department of Defense (DOD) conducted a 1-year test gof mandatory deposits at 10 military bases, after which a joint EPA-DOD task force recommended that they program not beu implemented. They found that "a randatory depoit system on military installations without a similar system ”. commercial off-base sales outlets resulted in an average dollar sales loss of 25.0% to the military installations.“ DOD will continue to implement state bottle bills in those states that have them. The task force also recommended that refillable (deposit—bearing) containers be made available at those CBS- 6 IB74076 UPDATE-02/25/80 installations where economics and consumer demand warranted. DOD accounts for over 95% of the beverages sold on federal facilities. on Sept. 28, 1977, the 0.5. Brewers Association and 12 brewers and beer distributors petitioned the U.S. Court of Appeals for the D.C. Circuit ** revoke BPA's beverage container guidelines for Federal facilities. The hex- industry disputed whether EPA initially had and retained the statutory authority to issue the mandatory guidelines. on Hay 23, 1979, the three-judge court ruled in EPA's favor, finding that the guidelines "appear to fall squarely within the mandate of Congress." L§§£§LA2lQ! S. 50 (Hatfield) Beverage Container Reuse and Recycling Act of 1979. Requires a refundable deposit of at least 5 cents, the refund value to be on the container's label; bans pop—tops; and exempts deposits from State taxes. Introduced Jan. 1a, 1979, and referred to Committee on Commerce, Science, and Transportation. (Identical or similar bills: H.B. 1n16, H.B. 2812) E13-'..AB.£1.'§§ 0.5. Congress. House. Committee on Interstate and Foreign Commerce. Subcommittee on Transportation and Commerce. Handatory Deposits on Beverage Containers -- Oversight. Aug. 10, 1978. Washington, 1979. "Serial No. 95-18a." -———-Waste Control Act of 1975. Hearings, 94th Congress, 1st session. Washington, U.S. Govt. Print. Off., 1975. 842 p. Hearings held April 8-11, 14-17, 1975. Serial No. 94-28. U.S. ‘Congress. Joint Economic Committee. Subcommittee on Fiscal Policy. The economics of recycling waste materials. Hearings, 92d Congress, 1st session. Washington, U.S. Govt. Print. Off., Nov. 8-9, 1971. 0.5. Congress. Senate. Committee on Commerce. Non—returnable Beverage Container Prohibition Act. Hearings, 93d Congress, 2d session. 6 Hearings held for may 6, 7, 1974 on S. 2062. 0.5. Congress.l Senate.‘ Committee on Commerce, science, and Transportation. Subcommittee for Consumers. Beverage Container Reuse and Recycling Act of 1977. Hearings, 95th Congress, 2d session. Washington, U.S. Govt. Print. off., 1978. 463 p. Hearings held Jan. 25, 26, and 27, 1978 on S. 276 SerialwNo.l95-102 CRS—-7 IB74076 UPDATE-O2/25/80 §§2Q§$§-&!2-Q9!§§§§§lQ§AL-2QQQ§§!I. Hatfield, Mark O. The Beverage Container Reuse and Recycling Act of 1979. Remarks in the Senate. Congressional Arecord [daily ed.] Jan. 15, 1979: 5153-5192. Inserted in the Record are the following: Environmental Action Foundation, "Bottles and Sense,“ p. 5153. U.S. Environmental Protection Agency, "Questions and Answers on Returnable Beverage Containers for Beer and Soft Drinks," July 1975, p. 3156. Dean Smith, "Oregon Bottle Bill Cuts Litter, According to Journal Survey," Oregon Journal, Oct. 26, 1976, p. 3159. U.S. Environmental Protection Agency and League of Women voters, "Price Comparison Survey of Beer and Soft Drinks in Refillable and Nonrefillable Containers," 1975, p. 5163. Don Waggoner, ”OregonFs Bottle Bill: Two Years Later," Hay 1975, p. 5163. Charles H. Gudger and Jack C. Bailes, “The Economic Impact of Oregon's ‘Bottle Bill,'" P- 5169. Oregon Dept. of Environmental Quality, "Oregon's Bottle Bill-the 1977 Report," p. 3172. Articles and statement on the Oregon experience, p. 5175-3179. I Federal Energy Administration, "Energy and Economic Impacts of Mandatory Deposits —- Executive Summary,“ September 1976, p. S160. U.S. General Accounting Office. "Potential Effects of a National uandatory Deposit on Beverage Containers -Chapter 6, Conclusions-and Recommendations," December 1977, p. S. 179. John D. Burlington, “Aluminum ‘Pop Tops‘ a Hazard to Child Health,“ Journal of the American medical Association, p. 5180. Penny Ward, “Deadly Throwaways —— Plastic Six-Pack Binders and Metal Pull Tabs Doom Wildlife,“ Defenders of Wildlife, June 1975, p. S181. Articles and editorials on the beverage container issue, p. S183-S192. Text of S. 50, Beverage Container Reuse and Recycling Act of 1979, p. 5192. OTHER CONGRESSIONAL ACTION 11/07/78 -- Voters in Alaska and Nebraska rejected bottle 9 ‘ mbills in statewide referenda. O7/12/78 -—-Delaware's Governor DuPont signed law creating 9 a commission to develop a regional solution with uaryland and Pennsylvania. O5/12/78 oa/12/73 09/28/77 07/12/77 07/05/77 06/16/77 05/25/77 11/02/76 10/21/76 09/21/76 06/30/76 Ofl/12/76 02/27/76 11/13/75 08/28/75 O6/OH/75 ON/30/75 03/02/74 09/01/73 cas- 8 IB74076 UPDATE-O2/25/80 Iowa's Governor Ray signed nickel deposit law, effective July 1979; liquor bottles also covered. Connecticut Governor Grasso signed into law a measure that requires deposits on soda and beer containers, effective January 1980. U.S. Brewers Association petitioned the U.S. Court of Appeals for the D.C. Circuit to revoke EPA's guidelines for Federal facilities. 9 Massachusetts banned pull-tabs, effective June 1, 1979. Dept. of Interior announced that all areas of the National Park System were putting the 5-cent deposit into effect. Hawaii banned pull-tabs and plastic containers. Oregon expanded its law, banning flip-tops on cans containing noncarbonated beverages (in addition to beer and soft drinks), effective Mar. 1, 1979. Bottle bill referenda held in four States: adopted in Maine (58% of vote) and Michigan (63%), rejected in Colorado (67%) and Hassachusetts (50.4%). Resource Conservation and Recovery Act passed; section 8002(j) established Resource Conservation Committee which is studying the issue. EPA promulgated final guidelines requiring a 5-cent deposit on all closed containers for carbonated beverages sold at Federal facilities. First Congressional vote on bottle bill. Senate defeated Hatfield Amendment by 60-26. Virginia banned pull-tabs, effective Jan. 1, 1979. South Dakota amended bottle law, permitting containers to be "recyclable" as well as “reusable or biodegradable"; 7 effective date extended to July 1, 1978. EPA proposed guidelines requiring deposits on bottles and cans sold at Federal facilities. California banned pull-tabs, effective Jan. 1, 1979. ninnesota banned pull-tabs, effective Jan. 1, 1977. Vermont enacted strengthening amendments, effective Jan. 1, 1977. ‘ A South Dakota enacted a bottle law prohibiting the sale of all containers not reusable or biodegradable--to become effective July 1, 1976. Vermont bottle law became effective. CBS- 9 IB74076 UPDATE-02/25/80 10/O1/72 —— Oregon bottle bill became effective. O9/O1/72 - Decision by Circuit Court declaring the Oregon Act constitutional. on/10/72 -—-Vermont bottle bill enacted. 01/00/72 —--A suit was filed in the Circuit Court of Oregon by container manufacturers, brewers, and soft drink manufacturers, claiming that the Oregon law was unconstitutional. O6/O1/71 —- Oregon bottle bill enacted. 10/26/70 -— Resource Recovery Act of 1970--emphasized the recycling and reuse of waste materials. O8/O3/70 -- First Federal bottle bill introduced. A22lIlQHAL-B§E§B§§Q§-5 URQ-§ Applied Decision Systems- Study of the effectiveness and impact of the Oregon minimum Deposit Law. Wellesley Hills, Mass. October 1974. Folk, Hugh (University of Illinois). Employment effects of the mandatory deposit regulation. Illinois Institute for Environmental Quality. November 1972. 27 p. Gudger, Charles M., and Jack C. Bailes. The Economic impact of Oregon's "Bottle Bill." Corvallis, The Oregon State University Press, March 197u. 73 p. A w Hannon, Bruce (University of Illinois). System energy and recycling: A study of the beverage industry. Center for Advanced Computation. January 5, 1972. 47 p. Midwest Research Institute. The national economic impact of a ban on non-refillable beverage containers. Kansas City, Mo. June 1971. Midwest Research Institute (Darnay and Franklin). The role of packaging in solid waste management: 1966-76. Prepared for Public Health Service, Department of Health, Education, and Welfare, 1969. 205 p. Minnesota State Planning Agency. Impacts of beverage container legislation in Minnesota-—a report to the Governor and the Legislature. January 197a. 1&0 p. knew York State Senate Task Force on Critical Problems. No deposit, no return...a report on beverage containers. Albany. February 1975. (The) question of mandatory deposit law for beverage containers: pro and con. Congressional digest. Washington, D.C., CBS-10 IB74076 UPDATE-O2/25/80 Congressional Digest Corporation. narch 1978. Available from,CRS.A Research Triangle Institute (Bingham and Mulligan). The beverage container problem: Analysis and recommendations. Prepared for the Environmental Protection Agency. September 1972. 197 p. Daniel B. Syrek. Litter Reduction Effectiveness. Sacramento, Institute for Applied Research, 1977. 2 vols. U.S. Dept. of Commerce. iBureau of Domestic Commerce. The impacts of national beverage container legislation; staff study. October 1975. 19 p. U.S. Department of Defense — Environmental Protection Agency Joint Executive Agency Task Force, Solid Waste Management and Franklin Associates, Ltd. Report to the Secretary of Defense on Department of Defense Test of Environmental Protection Agency Solid Waste Management Guildlines for Beverage Containers. Washington, DOD, 1979. U.S. Environmental Protection Agency. Resource and environmental profile analysis of nine beverage container alternatives. Washington, 1974. 178 p. 0.5.. Federal Energy Administration. Energy and economic impacts of mandatory deposits: final report. Washington, 1976. 733 p. U.S. General Accounting Office. Potential effects of a ynational mandatory deposit on beverage containers. Washington, Dec. 7, 1977. 91 p. D.S. Office of Technology Assessment. Materials and energy from municipal waste. Washington, 1979. 284 p. U.S. Resource Conservation Committee. Committee findings and staff papers on national beverage container deposits of the Resource Conservation Committee: second report to the President and Congress of the U.S. mandated by the Resource Conservation and Recovery Act of 1976 (P.L. 94-580). January 1978. 105p. 0.5. ‘Resource Conservation Committee. Choices for conservation: final report to the President and Congress of the United States. Washington, July 1979. 1ua p. and appendices. . Waggoner, Don. Oregon's bottle bill -two years later. Oregon Environmental Council. 1 vol. Hay 1974. (various pagings)