Vermont Legislature SmartTranscripts:

[Speaker 0]: Welcome back to the House Environment Committee. We are continuing our discussion of the Bottle Redemption PRO and, learned an answer to a topic got information on a topic that had come up during testimony about handling fees, in the bill, which we did not have our legislative council in the room for when previous witness brought it up. So, Michael, could you please just let folks know about the increase in the handling fee that is in this bill for the non commingled? Sure.

[Michael O'Grady (Legislative Counsel)]: Page four, line five. For beverage brands that are part of the commingling, it's 3 and a half cents, and it's 5. It will now be 5¢ for those that are not part of a commingling program. And so the 3 and a half cents was 2,006, and the 4¢ for non commingled was 2,008.

[Representative Sarah "Sarita" Austin (Clerk)]: Thank you.

[Speaker 0]: With, you know, dual dual purpose on increasing it 1p, we just took took testimony that that would provide some level of relief, but also encourage people to join the commingling agreement, presumably.

[Representative Sarah "Sarita" Austin (Clerk)]: Right?

[Michael O'Grady (Legislative Counsel)]: I mean, that's the purpose of the higher fee for non commingle. It it's it's in a greater expense. So if you're looking to reduce your expense, you enter the commingling program.

[Speaker 0]: Alright. Do members have further questions or discussion? Representative Zach?

[Representative Larry Satcowitz (Ranking Member)]: Yes. Then that brings me to the question in the following sentences. The handling fee shall not apply to beverages that are covered by a stewardship plan approved by the secretary under this chapter. So how are how are those things connected then?

[Michael O'Grady (Legislative Counsel)]: But when you when ANR approves the stewardship plan, ANR is also approving their compensation and reimbursement with the redemption sites. So that is where compensation will occur, and it's no longer through the handling fee. It's through that compensation agreement between the PRO and the redemption as approved by ANR.

[Representative Larry Satcowitz (Ranking Member)]: So then this $5.04 to 5¢ increase would be from the time the bill is enacted until the time that the stewardship program will be stood up. Correct.

[Speaker 0]: Senator Morris.

[Representative Kristi Morris (Member)]: Thank you, Madam Chair. One of the main reasons for standing up the bottle redemption program fifty some odd years ago was because of the amount of roadside litter and trash. I'm concerned that if we were to do away with such program, I know that SPIL is not advocating to do that, but we would there's gonna be an uptick or a return to roadside trash. You don't think that's true, dissipating green up days in May, you can walk any roadside and see the fast food containers that are deposited on our roadsides because they don't add value. And I'm just afraid that this program, if we don't enhance this program, that we're gonna see a return to other containers that are beside the road. We're gonna lose the last speaker, not Michael, the previous speaker, spoke of the sports teams fundraising that the state sees. A lot of sports teams are returning their deposit containers for refunds to support their teams. And specifically in my town, where school budgets are voted down annually, sometimes multiple times before they're passed, the funding for sports teams is one of the first things that goes. So I'm concerned that sports teams are gonna pay the price if we don't stand up this program so that the redemption centers can be more profitable. I'm also concerned about the employees that would be lost. Dollars 16 an hour, we heard from the previous speaker. Maybe they're not high-tech jobs, maybe people with a four year education aren't working those jobs, but they're a job that some people can do. I'm concerned about the number of redemption centers around the state, the number of jobs that would disappear. Opportunities for employees, such as what they have. The last speaker referred to business laws. He said, Maybe I should just do a sandwich shop that's profitable and not do this. My question would be, why hasn't we done it if he's worth some money? Why hasn't that been done? And I think it is a convenience, and I think it is producing some revenue that is probably paying property taxes and such for the business location. And then finally, the Clean Water Fund, sheets. If we do away with the redemption program, we've lost our contribution through the sheets for the Clean Water Fund. We'd have to find other avenues for that. So, for that, I can support this bill in its attempt to stand up the PRO, find a way that they can work with our redemption centers, stand up more locations, and make it so that it can be profitable for And for those reasons, that'll support.

[Speaker 0]: Do you wanna add something? Yeah. Michael?

[Michael O'Grady (Legislative Counsel)]: The deposit's not going away. The deposit is still on the container. So the sports team that wants to go out and collect for fundraising, they can continue to do that. Similarly, because the deposit's not going away, the sheets, the unreturned beverage container deposits will still there will still be a sheets will the program with its greater convenience and and responsiveness reduce the number of the sheets, because more people are willing to engage with the system that's a possibility and no JFOs looking at that for purposes of the fiscal note but you're still gonna have a sheet.

[Representative Kristi Morris (Member)]: No. That was that was part of a debate from a previous conversation. My comment.

[Representative Sarah "Sarita" Austin (Clerk)]: Representative? Just a portion of the sheets are going to go away for four years, a percentage, right, and then be returned.

[Michael O'Grady (Legislative Counsel)]: Right. It's it's approximately 10% of the clean water fund. You know that varies.

[Representative Kristi Morris (Member)]: Mhmm.

[Michael O'Grady (Legislative Counsel)]: It's 3,500,000.0. It's what you settled on over four years. So Clean Water Fund is between 38 and 45 approximately every year.

[Representative Kristi Morris (Member)]: So you're

[Michael O'Grady (Legislative Counsel)]: dealing with a little about 10% or a little bit lower for four years total.

[Speaker 0]: Further discussion? Representative North.

[Representative Rob North (Member)]: So the current bill, as it states on page four, slide five, does give the redemption centers the extra 10, at least for the total containers. It's non co mingled containers. I'm sorry, non co mingled containers. Happened?

[Speaker 0]: They are part of a co mingled program. So

[Representative Kristi Morris (Member)]: do we know what percentage of the containers returned are Mhmm. We do. Part of our commingled versus non commingled? Roughly Yeah.

[Speaker 0]: I mean, I think it's, like, three quarters of maybe it's two thirds in the third, three quarters of right. Chris Rice, you're on the spot.

[Representative Rob North (Member)]: Chris Rice, MMR, the beverage association of Vermont. My recollection is that Brie testified, roughly 16% of the returns are outside of the coming linked grid. So do I understand from that then it's only that 16% to see an increase?

[Representative Kristi Morris (Member)]: Sorry. So it's about Sixth

[Representative Rob North (Member)]: 6 of a dollar. So a 6 of a cent increase for our reduction centers. Interesting to ask oh, could I ask one of our reduction center arms in the room if that would be a sufficient increase? Sure.

[Shane (Redemption Center Owner)]: Shane from lot of our reduction. We'll take all the cents we can get. And would it help? Absolutely. More money would absolutely help. 16%,

[Representative Kristi Morris (Member)]: we'll take it. In average, on 20 sixth of a cent on all containers.

[Shane (Redemption Center Owner)]: I think that's going to make a gigantic difference. Now that's headed in the right direction. One of the things to keep in mind is that's only for a few years until we go to the PFO.

[Representative Larry Satcowitz (Ranking Member)]: Yeah. I guess I'm thinking about the ultimate point of of the bill and hearing the fear that if we don't pass this bill, that more redemption centers will continue to find it's hard to find the labor and continue to find their costs go up to the point where not only are not are we not seeing new redemption centers opening in Vermont, but that the ones that we have existing flows and that people don't have places to bring back their bothers to, and that we start to lose that incentive to keep our roadways clear and to get those nickels back.

[Representative Rob North (Member)]: Alright. Representative North? Yeah. More of a comment or question. It's so the the plan that's gonna

[Representative Kristi Morris (Member)]: get

[Representative Rob North (Member)]: put together, the ANR has to approve that plan. DEC has to approve that plan. Is that plan going to identify exactly what the handling fees will be to start out with as part

[Representative Kristi Morris (Member)]: of its negotiation, or will it

[Representative Rob North (Member)]: just describe what the negotiation process would be? Will will we know when when ANR comes forward? Here's the plan. PROs are put in place, this

[Representative Kristi Morris (Member)]: is what we're

[Representative Rob North (Member)]: gonna approve. We'll have time. We, I believe, legislature has time to

[Representative Kristi Morris (Member)]: take a look at that

[Representative Rob North (Member)]: and see if that's gonna fall in line with the range of handling fees that would appear to keep a sentence afloat.

[Speaker 0]: I think there's I'm gonna ask Michael to take us to the section of the bill to put some definition to what you're asking. But I guess I would also say, I keep kind of feeling like there is a possibility that some redemption centers will do significantly better under this model. I think we're really focused on the unknowns and the fears, but I think that manufacturers and distributors are gonna need people to collect their product, and they're gonna have to fairly compensate them to do that, which is actually what we're taking testimony on now is not happening. So this is actually going to make this, hopefully, a better business for the ones who are in business today and provide some business opportunities in very much underserved areas of the state where we we have no redemption centers Yes. In certain locations. They're gonna need someone to do this work on their behalf.

[Representative Rob North (Member)]: Right. And that's why I was asking about the plan. Will we get to see the plan and see how that is going to sugar out before it actually gets

[Speaker 0]: We are not in line to approve the plan at this moment, but I'll let Michael speak to what the structure is.

[Michael O'Grady (Legislative Counsel)]: So there's two components that are responsive to your inquiry on page 14, line nine. As part of the fair operation and compensation, the plan has to satisfy all the following. It has to describe how all locations that redeem beverage containers are fairly compensated for their participation in the collection program. So that is something that ANR will approve. That will be part of the plan. The plan is a public document that goes out for public notice underneath ANR's public notice requirements. You won't, as the chair notice, won't be approving the plan. That's the authority delegated to ANR. But in addition to that fair compensation component on page 16, annually, at least annually, the PRO has to report to you where each redemption center participating in the plan is located. So they have to have a fair compensation component in the plan. They have to notify you where every redemption is generally five years in term. So you will have effectively a compensation plan for identified redemption centers for five years. That

[Representative Rob North (Member)]: will be not just available to us. Will able to

[Representative Kristi Morris (Member)]: have it publicly available to

[Michael O'Grady (Legislative Counsel)]: Before it's approved, it has to go out for public notice and comment. There's also opportunity for ANR to basically ask for revisions to the plan if they're not hitting redemption rates. In addition, A and R will, I expect, will have some of when they approve the PRO, we'll probably build into that approval some conditionary conditional authority for them to to ask for reopening of the plant. And so I I think you're gonna have opportunity. The public will have opportunity to review the plan. The redemption centers will have opportunity to review the compensation. You will be notified where redemption centers in the plan are located. And ANR has general oversight over the operation of the plan and can require revisions if redemption rates aren't being met.

[Speaker 0]: Matt Chapin, did you will want to add something?

[Matt Chapin (Director of Waste Management, ANR/DEC)]: So for the record, Matt Chapin, Director of Waste Management. I guess the only other thing I wanted to add was the plan will be submitted in April, on April 1. It will be while the legislature's in session. So it certainly could bring me in and navigate a walk through of those plan requirements.

[Speaker 0]: Other discussion or questions? Seeing any, is there a motion to approve this draft 6.1.

[Representative Larry Satcowitz (Ranking Member)]: Yeah. I'll move that we move to approve version 6.1.

[Representative Sarah "Sarita" Austin (Clerk)]: I'll second.

[Speaker 0]: Seconded. Moved by representative Zachowitz, seconded by representative Austin to approve draft 6.1 with a couple of the minor changes that are highlighted, and we'll remove the highlighting. Do we vote it? Okay. Is there further discussion? Not seeing any. Would the clerk please commence to call the roll?

[Representative Sarah "Sarita" Austin (Clerk)]: Yep. Representative Austin, yes. Representative Chittenden? Yes. Representative Hoyt?

[Representative Kristi Morris (Member)]: Yes.

[Representative Sarah "Sarita" Austin (Clerk)]: Representative Labor? Yes. Representative Logan? Yes. Representative Morris?

[Representative Kristi Morris (Member)]: Yes. Representative North? Yes. Representative Pritchard? No.

[Representative Sarah "Sarita" Austin (Clerk)]: Representative Sackowitz? Yes. Representative Chittenden? No. And then, right there's another shot. Yes.

[Speaker 0]: Thank you all. Let's take a break until 03:00. We're going to shift gears to the budget letter.