Bill Allowing Grocery Stores to Opt-Out of Bottle and Can Redemption Alive After Legislative Deadline

A bill that would allow grocery stores to opt-out of redeeming cans and bottles remains a live round following this week’s second legislative “Funnel.”  Most proposals that didn’t pass the House or Senate, plus committee in the opposite chamber by Friday, are “dead” for the rest of session.  The main exceptions are bills dealing with taxes, spending and government oversight.  The opt-out bill, SF 520, passed out of subcommittee last week.  Because it’s under consideration by the tax-writing Ways and Means Committee, it’s safe until session adjourns. 

In addition to the retailer opt-out provision, the bill would increase the handling fee paid to redemption centers. Currently, beverage distributors pay redemption centers a one-cent handling fee for every container they process.  SF 520 would double the fee to two cents, with retailers on the hook for the extra penny.  Recent analysis by Iowa State University economist Dr. Dermot Hayes, however, found that it would take a three-cent handling fee to keep rural redemption centers in business.  It would also take a three-cent fee to spur the opening of new redemption centers outside urban areas.

The measure would also authorize some of the state’s beer distributors to launch a proprietary automated system.  This “Droppett” program would automatically deposit refunds into special online accounts set-up by consumers.  Unlike redemption centers however, Droppett would be exempt from the requirement to immediately return deposits.

With the second Funnel concluded, lawmakers will now shift toward hashing out the budget and working on various tax proposals.  The legislative session is tentatively scheduled to conclude on Friday, May 3.  But, it’s not unusual for legislators to continue working for several weeks beyond that point.