Oregonians could see bottle deposit windfall under bill
SALEM — Under a bill proposed in the House, Oregonians who redeem bottle and cans could get an unexpected windfall when the deposit jumps from 5 cents to a dime April 1.
The House Committee on Energy and Environment voted unanimously Wednesday to advance a bill that would, starting April 1, refund 10 cents on all containers covered by Oregon's bottle bill — even if purchasers paid only the 5-cent deposit.
Oregon has had a 5-cent deposit on certain beverage containers since 1972, first introduced to deal with the state's litter problem.
Retailers pay distributors the deposit when they purchase beverages; that deposit is passed to customers at the cash register. Customers in turn then can return bottles and cans for a full deposit refund.
In 2011, the Legislature passed a law requiring the deposit increase to 10 cents should the rate of return dip below 80 percent for two consecutive years. Unredeemed deposits are kept by distributors.
In both 2014 and 2015, the return rate was below 80 percent, and so the deposit will double April 1.
Under the proposed law, containers that don't have the correct deposit amount on the label will be allowed in stores until Sept. 1, 2018.
It's not clear how the bill will pencil out, though.
"Can you kind of describe how this will work and why this seems to work OK?" Rep. Phil Barnhart, D-Eugene, said during the committee hearing Wednesday. "I don't think we have a bunch of opponents coming in here because they have to come up with a nickel they didn't collect."
Paul Romain, an attorney and lobbyist for the Oregon Beer and Wine Distributors Association, acknowledged that money could be lost.
He said Barnhart's inquiry was the "big 64,000-dollar question, except it's more than $64,000."
"Whenever you start a system, you have a transition period," Romain said. "It's a risk, frankly, that the industry has to take to make the transition."
Rep. Cliff Bentz, R-Ontario said the bill was "necessary to allow the transition, even though the program has big holes in it."
Romain said the group he represents also initially resisted the deposit increase.
Michigan, the only other state with a 10-cent deposit, had a 94.2 percent return rate in 2014, according to the Michigan State Treasury.
A lobbyist for the Brewers Guild also testified in support of the bill.
The Oregon Liquor Control Commission is responsible for administering the bottle deposit program.
Although the agency didn't take an official stance on the legislation, its administrative policy and process director, Jesse Sweet said the bill would create a "grace period" in the transition to the 10-cent deposit and provide "necessary flexibility" for retailers.
Starting Jan. 1., 2018, the state is also going to require deposits on additional types of beverage containers — such as kombucha.