Bill Allowing Grocery Stores to Opt-Out of Bottle Redemption Advances, Includes Key Changes

A bill that would allow grocery stores to opt-out of redeeming cans and bottles is one step closer to the Senate floor.  SF 520 passed out of subcommittee Tuesday following testimony by numerous stakeholders.  Ways and Means Committee Chair Randy Feenstra (R-Hull) headed the subcommittee.  Vice Chair Dan Dawson (R-Council Bluffs) and Sen. Joe Bolkcom (D-Iowa City) rounded out the group. 

Initially a much narrower measure, the subcommittee amended SF 520 to bring it in line with more sweeping legislation introduced by Feenstra, SSB 1225.  The revised bill would allow a grocery store or other retailer to immediately stop redeeming cans and bottles if they provide notice to the Iowa Department of Natural Resources (DNR).  However, they could only do so if there is an alternative redemption option within 10 miles of their store, including a “dealer-agent.” 

The “dealer-agent” designation is new, and would apply to a proprietary program created by the state’s beer distributors.  Under their “Droppett” system, a consumer would set up an online account and leave their cans and bottles at a satellite location.  At a later, unspecified time, machines would count and sort the containers.  Afterward, the deposit would be applied to the online account.  In contrast, redemption centers and participating retailers would still be required to turn over deposits immediately.

The amendment to SF 520 would also increase the handling fee paid to redemption centers.  Currently, beverage distributors pay redemption centers one cent for every container they process.  Under this measure, the fee would be doubled to two cents per bottle or can.  SF 520 initially called for distributors to pay the extra penny.  Now, like SSB 1225, the amended bill would require retailers to cover the extra cent.

SF 520 now advances to the full Ways and Means Committee for consideration.  During Tuesday’s subcommittee, lawmakers stressed that the bill remains a work in progress, and they welcome feedback and alternative solutions from all Iowans.