Vermont Legislature SmartTranscripts:

[Sen. Anne Watson (Chair)]: There it is. There it is.

[Sen. Seth Bongartz (Member)]: Right. Yeah.

[Sen. Anne Watson (Chair)]: We're good. Okay, good morning. This is Senate Natural Resources and Energy, and it is Wednesday, April 8. And we are starting today with hearing from folks on H-nine 15 about setting up a Senate Producer Responsibility Organization for Beverage Containers And we are joined this morning remotely by Ms. Collins, who is the president of the Container Recycling Institute. I don't know if you're there. Oh, maybe you are there. Oh, you're there. Hello. Good morning. Hello.

[Susan Collins (President, Container Recycling Institute)]: Good morning.

[Sen. Anne Watson (Chair)]: Thank you for joining us.

[Susan Collins (President, Container Recycling Institute)]: Thank you for having me. If it's time to start, I did send in a PowerPoint presentation, and I don't know if I can run that from my computer or what the logistics are there.

[Sen. Anne Watson (Chair)]: You don't find it. Did you just send it?

[Susan Collins (President, Container Recycling Institute)]: Yes. I did just send it.

[Sen. Anne Watson (Chair)]: Okay. You know, it's It's

[Susan Collins (President, Container Recycling Institute)]: 6 here. It's still dark.

[Sen. Anne Watson (Chair)]: I know, thank you for joining us at early, early hour.

[Susan Collins (President, Container Recycling Institute)]: Should I try to share it from my position?

[Sen. Anne Watson (Chair)]: Yeah, well, can you do that if I don't have it here? Maybe. I don't know. I've never done that, so we'll try. Yeah, she's not. I'll post it as soon as I get it.

[Susan Collins (President, Container Recycling Institute)]: Is this working?

[Sen. Anne Watson (Chair)]: Oh yes, we can see that.

[Susan Collins (President, Container Recycling Institute)]: All right, let's carry on then. Thank you again for having me. Good morning, everyone. And I am Susan Collins, President of the Container Recycling Institute. We're a nonprofit that has existed for thirty five years that studies the best practices regarding recycling of packaging materials. And I thought that since I would be leading off today, that it would be best to talk about the general benefits of beverage container deposit programs. This is the data from 2023, and you can see the 10 states around The US that do have beverage container deposit programs. At this time, they had redemption rates ranging from 38% to Yes? 86

[Sen. Anne Watson (Chair)]: So I'm wondering if your slides are advancing because we are still just seeing the first one.

[Susan Collins (President, Container Recycling Institute)]: I have no idea why that would be happening. It says my screen sharing is paused. Thank you for letting me know. Resume, let's see if that's working.

[Sen. Scott Beck (Clerk)]: There we go.

[Sen. Anne Watson (Chair)]: There it

[Susan Collins (President, Container Recycling Institute)]: is. Oh, thank you so much for telling me.

[Sen. Anne Watson (Chair)]: Yeah, no problem. Great.

[Susan Collins (President, Container Recycling Institute)]: So the I call these programs the rock stars of recycling because they achieve such high recycling rates. And I've been in recycling for thirty five years. There's nothing else that that I can no other type of program I that can can achieve these kinds of recycling rates.

[Sen. Anne Watson (Chair)]: There's a question in the room.

[Susan Collins (President, Container Recycling Institute)]: Oh yes, of course.

[Sen. Scott Beck (Clerk)]: For clarification, if you could go back to the previous slide.

[Susan Collins (President, Container Recycling Institute)]: Yes.

[Sen. Scott Beck (Clerk)]: You said that rock stars for high recycling rates, but your slide says redemption rates. Maybe this is just me, but I think of redemption as deposit return and recycling as you just recycle it as center. So I just wanna make sure I understand what you're saying here.

[Susan Collins (President, Container Recycling Institute)]: You're absolutely right. These are the redemption rates. They do also translate into the recycling of the materials, the physical recycling to Okay, new

[Sen. Scott Beck (Clerk)]: great. Thank you. I just wanna make sure I understood that.

[Susan Collins (President, Container Recycling Institute)]: Absolutely. All right, we'll carry on. So the other benefits of deposit systems besides the high recycling rates is that they provide clean recycled materials for manufacturing, enabling closed loop recycling. They create jobs and new businesses. They shift the end of life costs to producers, so no taxpayer money is spent on these programs. They reduce litter. Keep America Beautiful found 50% reduction of beverage container litter in the States that have deposit return programs. They conserve energy and natural resources and greenhouse gases and prevent other types of pollution from manufacturing new containers. And they're very popular with the public, 75 to 90% approval rates in public opinion polls. So, continuing on with these general facts about beverage container deposit systems, these are the recycling rates by deposit status in The United States. Very high recycling rates for deposit containers in The United States, and much, much lower recycling rates for containers that are not on deposit throughout The United States. Also, the economic benefits of bottle bills, the material itself, if you ton for ton, if you collect it through a different system where it's contaminated, of course, the contaminated material is worth less. PET plastic exhibits this, so does curbside glass. Curbside glass is it costs 20 to $40 a ton to recycle compared to deposit glass that has a $20 per ton scrap value. It has an actual positive value. So, the same exact material, if you handle it properly and it has no contamination, it can sell for a much higher price, and that brings more economic development to the state. There are benefits to the municipalities. In Massachusetts, several years ago, they did a study that estimated the cost savings to the municipalities for the current program, how much they're saving. And those cost savings come from reduced collection costs, reduced landfill costs, reduced processing costs, and reduced costs for pickup of litter. And then there are additional savings they didn't quantify from storm drain clean out. Internationally, these programs are taking off like crazy since 2017. What you see in blue is the places that had implemented these programs before 2017, and then implemented or pending 2017 to 2027 more than doubling. It'll be a tripling of these programs worldwide by 2030. And so, can see that the new programs there in yellow, I have some more highlights on this next one. This is showing the number of people covered by container deposit laws worldwide. Just this month, Singapore started their program last week and Portugal's program will begin at the end of this week. And then there were also recent program starts in the last year or so in Ireland, Hungary and Kosovo. So, these ideas are spreading like wildfire. Now getting to the specifics of H915, we wrote a letter that we took a careful look at the legislation and compared it to what we know about producer responsibility organization type legislation and the key elements that any type of legislation needs to have. And we found 20 points that we are recommending that be amended in the legislation from definitions to giving the proper authority to the state agency, just very common things that would be on any checklist for any producer responsibility law. We do want to point out that some mistakes have been made in Maine and Connecticut. Connecticut's Modernization Law required beverage distributors to form a PRO, but they did not do so. That all happened just in the last few years. Fortunately, there was a very strong fallback. The distributors were already required to have the individual responsibility of taking back containers. So, it didn't cause a collapse of the system. But I want to point that out that this, some of these same companies that are the beverage distributors in Vermont are the same as the beverage distributors in Connecticut, and this just happened in the last few years. So, there was modernization that was expected by the funding that was provided to the beverage distributors, but that did not happen. The only operational changes that happened in Connecticut were as a result of the grant funding that was provided by the state to redemption center operators and the redemption center operators themselves. In Maine, they're also struggling with this. The new law requires a PRO, but there have been many fits and starts on the implementation of that PRO and their producer responsibility organization stewardship plan. The program start date has been delayed. Our letter contains recommendations of amendments to the bill that will help you avoid these problems that they're experiencing in Maine and Connecticut. So these are the some of the key recommendations. Number one, there's a problem with the timing of the handling fee. Dropping the handling fee before the program is actually implemented would leave a gap in time between when the plan is approved and when it is implemented. Would probably cause the collapse of the system by having the redemption centers with no funding source. And so we've got specific recommendations in our letter on how to avoid that problem. The second one is that there's no plan B having to do with the formation of the PRO. The natural thing that exists in most producer responsibility programs in the world is that if there is no producer responsibility organization, then the responsibility falls back on all of the producers to implement every part of the producer responsibility plan. Or their own producer responsibility plan. We've also got an example here in Oregon of how producers had not joined the central organization and new penalties were put in place to encourage them to join. And you can see here that before the law, more than a 130 distributors in Oregon were not participating in the PRO. After the implementation of these new penalties, only 16 producers remained outside of the PRO. We've got the specific references to the specific Oregon statute so that you can mimic that if you choose. We've also got a recommendation to not allow the dissolution of the PRO as an option, Because again, that would just collapse the entire system and leave people probably paying deposits with no way to get them back. Again, our letter has specific recommendations on that. I want to point to a success story to give some hope here that this can be done. It can be done well with the right legislative language and the right program operator in place. Back in 2023, I participated in a recycling study tour that went to Lithuania, a very small country of only 3,000,000 people. Prior to having a deposit return system there, one third of the beverage containers were returned for recycling. And once they established the program, they quickly went to a 74% return rate and then reached a 92% return rate in 2023. They set up their entire program and got it operating within eighteen months, which was an incredible success story. They were very motivated and they did a fantastic job there. So, want to highlight that a hopeful way that you know reform can be achieved. And I'll stop here with our signature photo and on the following page I will say that we have contact information here. We have two websites with information on deposit return systems. You can access this information. Please feel free to contact us at any time with any questions that you have, and thank you very much. I'll stop sharing now.

[Sen. Anne Watson (Chair)]: Super, thank you so much. And so you referenced a letter, and this is something that hopefully you've also sent to our committee assistant? I don't have anything. Oh, okay. Apparently we have not gotten the presentation yet, but hopefully we'll either come through sooner or it might be worth I asked you again. Okay. Because I would love to see that. That'd be very helpful. I'm very grateful for the practical suggestions of like, here's how you fix the bill that you've got. I was interested in your one comment about that there is no plan B if the distributors don't form their own PRO. What I had interpreted as a plan B baked into the bill was if entities fail, if no producer responsibility organization is formed, then the secretary, basically the state can, as I understand it, put together a plan as a backup, but then the cost to join that is more than it would have cost them if they formed it on their own as a means to try to get people to join. Is that something that you're feeling like that's not a sufficient plan B, or there's holes there? I don't know if you have any thoughts on that.

[Susan Collins (President, Container Recycling Institute)]: From what I've seen over the years with the state agency in Vermont, I don't see an appetite for the state agency to take over an entire program like that. There's very little operational capacity to even provide enforcement on the existing So, I think there would be reluctance at best by the state agency and probably not success. It would be much more successful to do what the other programs in the world do, which is to say, if the producers are not able to do this by forming and properly operating a producer responsibility organization, then the responsibility falls to each of the producers individually. They all have to implement this. That is is where we have seen success in the past. Gives them sufficient motivation to work together rather than working independently. Although, we always like having that option because there will always be some producers that will have some unique method of operation where it makes more sense for them to take back their own containers in house, and you always want to give that opportunity to them if they have, you know, a much smaller operation or a very specific operation to do their own take back. Let them do that as long as they're fully responsible.

[Sen. Anne Watson (Chair)]: That is very helpful. It makes me wonder too about having a I mean, I'm very interested in what you're suggesting. It also makes me think about having a plan B and a plan C, you know, like the somehow, and this is something we can talk about, so I'm just brainstorming at this point, but thinking about if the state wants to come up with a PRO and say, this is what we're going do. But in the absence of that, if they don't do that, then maybe plan C is that every individual producer is responsible for taking back stuff on their own. But that might lead to some gray area of like, if are the state puts it together, but it's either not enforced or insufficient somehow that could be potentially problematic. So anyway, I'm thinking out loud here, but appreciate the suggestion. Yes, go ahead. I have some questions.

[Sen. Scott Beck (Clerk)]: So on our website, we have the Build As Introduced, and that's also a It's paper copy I

[Sen. Anne Watson (Chair)]: a committee. That's my So that's my It was the committee. So there was never

[Sen. Scott Beck (Clerk)]: There was no amendment?

[Sen. Anne Watson (Chair)]: No. Right. So this is the ads introduced is the same as as passed by

[Paul Burns (Executive Director, VPIRG)]: the house.

[Sen. Scott Beck (Clerk)]: Okay. I just wanna make sure I add that. Okay.

[Sen. Anne Watson (Chair)]: Think that when it comes like that

[Sen. Scott Beck (Clerk)]: No. It is possible. Certainly. It's a

[Paul Burns (Executive Director, VPIRG)]: little bit more than 27

[Sen. Ruth Hardy (Member)]: page bill, but

[Sen. Anne Watson (Chair)]: Yeah. Right. Right. Right. Okay.

[Sen. Scott Beck (Clerk)]: I'll make sure I have the right Yep. Copy.

[Sen. Anne Watson (Chair)]: Yep. Okay. Okay. Great. Any other questions for Ms. Collins? Okay. Well, thank you so much. Really looking forward to checking out your letter and the suggestions that you have there. And if for any reason that we don't receive it, we'll follow-up to say we can use that. So thank you so much.

[Susan Collins (President, Container Recycling Institute)]: Thank you for having me.

[Sen. Anne Watson (Chair)]: Yeah. Okay. And so we also are joined remotely by Brie Diley of Research Consulting and the Beverage Association of Vermont. Welcome.

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: Good morning. Thank you.

[Sen. Ruth Hardy (Member)]: Yes.

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: Chair Watson and vice chair Williams, my name is Bree Dietley. I'm a principal of Breezeway Consulting. I live and work in Somerville, Massachusetts, and I am representing here the Beverage Association of Vermont, which are the nonalcoholic beverage distributors and producers in the state. Coke and Pepsi are our main members, KDP and Polar Beverages as well. We I've been doing work on the bottle bill and research on bottle bills and activities around bottle bills for quite a few years dating back to the nineteen somethings. I've done a number of specific research projects in Vermont working in collaboration with DC, with DSM Environmental who's done a number of studies for the state. And I on a difference different side, I also am the general manager of the commingling program, the Vermont Commingling Group, which is the organization that manages the returns of about 84% of the returns that come back through the bottle bill today. That's a cooperative and LLC that the distributors got together to form and talk a little bit about what that organization does and how it sort of feeds into where we are what we're looking at here with with h nine fifteen. A number of years ago, several years ago, a group of stakeholders were convened by senator Bray, former chairman of this committee, to talk about reforms of the bottle bill. I was fortunate to be part of that group, along with VPERG and stakeholders, redemption centers, Tamara, and others, which worked on a bill that eventually, emerged in various forms, house one seventy five, house one fifty eight, which we supported as a a compromise measure amongst those stakeholders to move forward reforms. This bill shares a lot with that work and hopefully still has the support of a lot of the stakeholders that worked on those principles. Our sticking point ultimately with that bill was the lack of funding for us to implement the reforms and the technological changes that we feel are needed to sort of move the program forward. That's been addressed in part in this bill, and so I'm gonna talk about that as we as we go on. I think really important to understand where the bottle bill is today in Vermont. We, you know, the Vermont bottle bill is 55 old And frankly, despite incredible changes in how beverages are produced, distributed, how consumers behave, what the retail landscape is like, the Vermont bottle bill looks pretty much like it did fifty five years ago. Containers are largely managed by hand. Our commingling group in 2025 took back a 145,000,000 containers for returns. About a 133 of those were counted and sorted by hand. And that doesn't mean just that they came in the front door of a redemption center and were touched by the employee and then sorted. Those containers were sorted, were handled probably five or six times in the course of getting them into the recycling system. Technology has virtually not penetrated the redemption system in Vermont. It has the lowest rate of technology use of any bottle bill state in The US except for Hawaii. About 2% of the containers in Vermont go through a machine where the barcode is scanned to recognize and and identify who the distributor of that product was. Otherwise, we rely on manual sorting of those containers where the you go into a redemption center and you look at what the folks behind the counter are doing, they're taking them, they're counting them from you, and then they're throwing them into wooden or cardboard boxes by distributor, by size, by brand behind them. And most redemption centers have something like a 100 to a 125 boxes back there that they're manually putting those containers into. Those boxes get pulled up into bags. A driver comes to that facility, individually picks those bags up, scans them, identifies them. They go to a facility where they're individually taken off, dumped onto a conveyor belt, and then they're actually counted through an automated process. That's an incredible amount of handling. It's a very inefficient system, and one of the things that we hope that HFIT nine fifteen would be able to accomplish and that we're really advocating for is the implementation of much more technology in the system to reduce that amount of handling, to reduce the burden on redemption centers, to reduce their labor costs and their labor their obligations to hire folks to do that work. It's hard work. The number of sorts that have to be done behind that is really difficult, and it's really difficult keeping all of the brands of craft beer and, you know, Ma and Pa's special soda. And every week, there's something new coming into the market. And these poor folks standing back there trying to figure out which box to throw these into is really a crazy, crazy process and something that we really need to modernize. We I'll talk a little bit about how commingling addressed that. But in in level setting sort of where we are with the program today, I also wanna just keep the fraud issue in mind for you. Fraud is an issue that we deal with all the time in the redemption system, and even that our members deal with on the sales, front. A lot of folks leave the state to buy beverages. You know, as we know, a lot of retail business leaves Vermont to White River Junction and other places in the Connecticut River Valley to do their shopping because of, you know, fewer taxes, lower fees, no deposits in New Hampshire, and those containers come into the state. Research that's been done, including by

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: me and

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: others, have found that somewhere between 1218% of everything that gets redeemed in the state didn't originate in the state. That equates to something north of 30,000,000 beverage containers every year that are managed in Vermont's waste management system, but that were never purchased here. Awesome. And that means that the distributors are paying out refunds and handling fees and paying for charges to pick them up and manage them on containers that they never sold. So we have a chronic fraud problem as do most bottle bills, and it's something that I just want to have you keep in the back of your mind as as we talk through the the prospects for for this bill and the program. The coaming program, which I manage, came about back in 2008, and it came about because of these very same issues that I'm talking about. Having to do all of the sorting by distributor and by brand was really putting a lot of pressure on the redemption centers, and there was a lot of pressure from from them to do something about the level of sorting that was going on. And so the beverage distributors, the major distributors, at the time, Baker, Farrell, Calmont Beverages, and Berry, as well as, two Coke bottlers and two Pepsi bottlers that were in operation at that time got together and formed an organization and agreed that what they would do is allow for all of their brands to be mixed together at the redemption centers. So if you have a 12 ounce can, it doesn't matter if it's Coke, Pepsi, Bud, Miller, Corona, whatever. All those 12 ounce cans can go in the same 12 ounce can bin. And that eliminated fifty, sixty, 70 sorts that the redemption centers were doing, which made a really big difference, in in their operations. At the same time, the law was changed to allow for those distributors to pay a lower handling fee to the redemption centers for those commingled products because they'd reduced the amount of labor and effort that the redemption centers needed to put in to sort them. Today, that program, as I said, manages about 84% of the returns in the state. And, we do that through a cooperative arrangement where the producers give give me data each month on their sales, and then I use that sales data in conjunction with Tamara who does all the picking up and collecting in order to allocate out the cost of the system. It's been incredibly effective. I hear from redemption centers every time I'm out in the field visiting them. Can't you get the rest of the containers into the commingled system? And that's really kind of what our motivation was originally in getting together with senator Bray's group and in in in looking at this bill and supporting this bill is trying to find ways to reduce the sorting and simplify the process. But what we're trying to do here, I think, is is one more level of up from that, and that is to introduce and deploy technology in the pursuit of making this system work better, work more efficiently, and work more fairly. Our focus and and that you'll see in my written testimony, when it comes in, our focus is twofold here. One is on the governance of these programs, and we feel really good about, we felt very good about the compromises that were reached in the previous bills that carry forward into h 09/15 about the structure of the PRO. What the PRO really just does is consolidates the responsibilities and obligations of all of those distributors into one entity. And what that allows that single entity to do is to make much more efficient and coordinated decisions about how the system works. It's really hard for however many individual distributors there are registered in in in the deposit system today in Vermont, for them to coordinate and make, you know, simple decisions. I'm able to work with our six member companies in the Co Mingling Group because they're single points of contact. I can routinely get sales data from them. We can manage the system really well. But it's been very difficult to bring more companies into that system because it's diff difficult to wrangle those different different members. They all have different modes of distribution, and it's just been very complicated to do that. But a single organization that everyone is obligated to join is a very different situation, and that's that's really, you know, where we wanna see the system go. That is a best practice. Susan said the same. It's how other organizations around the world are are largely structured. The US is kind of unique in not having PROs run deposit systems. We really only have one in in The US, and that's at this point, and that's in Oregon. So, that governance is really important for us. And the second thing that I wanna spend the rest of my time talking about is the issue of investment, and technology. As I said before, we held out in opposition to house one fifty eight last session because that bill didn't provide for any funding for any technology and innovation in the system. We're talking about having to make pretty significant investments in programs. And some of you, you know, as many of you recall or know, several years ago, the state decided to take the unclaimed deposits away from the distributors and transfer them to environmental purposes, other environmental purposes in the state. Vermont joined a number of other US states that do take the unclaimed deposits away from distributors and use them for other purposes. That is not a common practice in the rest of the world. It's also not a common best practice that's outlined by organizations like Susan's or like Tamara or others who work in the space of deposit systems. These systems really should retain the unclaimed deposits within them to turn that money back into helping to fund the system. And that's the way these systems work all around the rest of the world. For various reasons, certain US programs have decided to pull that money out. And without access to that money, it makes it really hard to make investments. So, in this current bill, what you see is a compromise proposal where DEC would get a certain amount of money over several years from that environment fund, be able to provide up to 3 and a half million dollars of grants to this organization to make investments in technology. And that's really key for us because, our ability to to effectively put commingling into place for all of the distributors in the state and to make the whole system really not require any brand sorting anymore is to use technology to determine what's coming back instead of having people individually handle and count containers. So what we did was we went out to, some outside consultants who had experience with deposit systems around the world and said, hey. Here's the Vermont system. You know, I know a lot about it. Here are the parameters of the system. You know, what would you do? Give us give me more than a nap you know, cocktail napkin plan, but not quite a business plan. What could we do with, you know, some of the unclaimed deposit money to invest? And the answer came back to essentially build out a, technology forward system that would operate at the current redemption systems in current redemption centers,

[Paul Burns (Executive Director, VPIRG)]: Okay.

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: Focusing on the largest ones first and putting technology in those facilities that would automatically scan and and, process large quantities of those containers all at once. There's technology there with bulk reverse vending machines. Many of you are familiar with the machines in the in the foyer of the supermarket when you go that you can individually feed a bottle or can into. These are machines that you dump entire bags into. And in a matter of seconds, they've cleared out all of those containers, and you can dump another bag in. So it allows for a really high throughput. But what's happening behind the wall of the facility is every single one of those containers' barcodes is being read. And whose container that is and who's responsible for paying the fees on that is all being processed to through the technology and turned over to the PRO, to the organization that's running the system. That allows for a lot more integrity of the system. It allows for a lot more detail about who's which whose containers are actually coming back, and that's really how we see the plan moving forward to invest. And it's why the investment and the grant component of this bill is so important to us in ensuring the viability and practicality of the system going forward. Making the kinds of changes that we need to make to the system, whether it's relating to a single PRO instead of relating to the commingling group today, and then all of the individual distributors, all of that changed implementing technology, even retrofitting redemption centers to handle the technology, which would be the responsibility of the PRO, all of that's gonna be difficult. And we fully appreciate that. You know, we had input from the redemption centers as we developed the original compromise bills. You know, we know that change is gonna be difficult, but not making these changes really could have adverse consequences for the long term viability of this program. We can't just keep making people hand sort hundreds of millions of containers and and hope that we can, a, find the staff to do it and, you know, b, have trucks driving around the state that are just basically carting bags of air. You know, we've got full cans and full bottles that have been hand sorted that go into bags, that go into trucks. If that material was compacted in those machines at the point of redemption, that material could go consolidated in those trucks. You could put significantly more in those trucks. There'd be fewer trucks on the road. They wouldn't need as many drivers. We can really drive a lot of efficiency in the system if we have a centrally coordinated program to do it, and we have access to the funds to do it. So that's why we're supporting this bill. We do have some suggestions. They're fair they're fairly detailed. They're fairly minor that we we can talk to folks about, You know, some of Susan's suggestions with regard to changing the data on the handling fee, perfectly reasonable idea. You know? So I think there are some little tweaks, but the core elements of the bill, yeah, we support and think, are a natural next step in the evolution of the program here. Again, as someone who gets their hands dirty literally, if not figuratively, if not literally, in the commingling system, this is really something we need to do. Commingling was a great commingling bought us time. Commingling bought us fifteen years essentially of a lot of reduced sorting. But the redemption centers, you know, the space that it takes, the staff that it takes, we really need to address that. And until we do that, the program really can't move forward and be successful and frankly, and be be a good program for consumers to be something that consumers want to participate in. They don't have to wait as long for. There's a lot of innovation out there and a lot of technology that we can take advantage of. And so that's why I'm here on behalf of the members to support it. And I appreciate the time this morning and would be happy to answer questions about where we are today or where we'd like to see the program go.

[Sen. Anne Watson (Chair)]: Great. I think we have a couple of questions in the room. I'll send her back.

[Sen. Scott Beck (Clerk)]: Yeah. Great. Thank you. So first question is what is the cost of one of these machines, this bulk return machines?

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: They vary. The the you know, a $100,000. A lot of them are not paid for outright. Some of them were paid through lease arrangements. What we would wanna do would be to pay for them outright, you know, using using funds, that are provided through the grants. We didn't get for the purpose of this project that we did, the feasibility project, we didn't get quotes on equipment. We just use sort of generally available information to our consultants as to what those costs would be. But our idea is that those would be purchased outright by the organization and basically placed in the redemption centers. So, you know, this would be a this would be a grant. You know, the redemption center would simply be operating them. The PRO would be responsible for setting up the facilities, increasing their electric service, etcetera, that they would need reinforcing floors, you know, whatever would have to happen before you could put the machines in.

[Sen. Scott Beck (Clerk)]: Is there is there anything that prevents a Vermont redemption center from bringing in one of these machines on their own, you know, they just it's a good economic decision for them, and they maybe they just make that decision on their own. Is there anything that prevents them from doing that right now?

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: No. Just economics primarily.

[Sen. Anne Watson (Chair)]: So the economy is bad.

[Sen. Seth Bongartz (Member)]: I'm sorry?

[Sen. Scott Beck (Clerk)]: Are the economics bad? Is this

[Sen. Ruth Hardy (Member)]: would this be something that

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: There's there's there's kind of two issues. One is scale. You need to have a certain scale, a throughput of containers, at your facility to kind of make these work to pencil out financially. Okay. If if you're covering the cost of them. We have redemption centers in Vermont that handle a thousand containers a week, and we have redemption centers in Vermont that handle a thousand containers every fifteen minutes. Yeah. So the the what we're focusing on are those highest volume facilities where economics will pencil out for those facilities. And so there is there is a redemption center up in Hartwick, and I can't think of the name of it, that did pull that does have a bulk RVN.

[Sen. Seth Bongartz (Member)]: They're looking more so.

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: They've been they've been using that.

[Sen. Scott Beck (Clerk)]: As up there and check it out.

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: As you as you look in other states, and other jurisdictions, I was up in Quebec, at the end of last year. They're building out a whole new infrastructure there, very technology driven, with actually, they're setting up their own redemption centers instead of relying on on an independent operators, which is a much more expensive prospect. But the the machines that that they're putting in and the throughput, they have facilities that are handling 35,000,000 containers a a year. You know, the whole system in Vermont only handles a 180. So Vermont's system in general operates at a much lower scale than a lot of these technologies and machines were designed for. So, you know, we wanted to try to put a system in place that was Vermont scaled and Vermont sized and appropriate to that. And that's obviously has both economic and and physical constraints. There are redemption centers where there was no way that you could put some of these machines in. There's simply not space for them.

[Sen. Scott Beck (Clerk)]: Okay. Thank you.

[Sen. Seth Bongartz (Member)]: Of course.

[Sen. Anne Watson (Chair)]: Great. And the center leads.

[Sen. Ruth Hardy (Member)]: Thank you for the testimony. So I'm looking at the Breezeway Consulting and Beverage Association of Vermont. You actually in Vermont?

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: I'm in Massachusetts. I'm in Somerville, Massachusetts. I I do I'm a consultant. I work for the for the state association. I work for a number of state beverage associations around the country, but our LLC that runs the Coamington Group is actually a Vermont LLC that I formed, and I'm the general manager of that LLC. So I I technically run that business in Vermont on behalf of the six distributor members.

[Sen. Ruth Hardy (Member)]: Thank you.

[Sen. Seth Bongartz (Member)]: Mhmm. Yes, Senator. What happens with the machines when people kind of throw everything they have into the bag and chuck it in and a third of it doesn't barcode it because it shouldn't be done in the first place. Who's who's who's dealing with what gets left at the backside of the machine?

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: Yeah. That that stuff will it actually it just like it does with a if you go to, know, if you go to a price shopper and and do the same thing, if you put a a container in that isn't in their system, it will give it back to you. And the bulk machines do the same thing, only they give it back to you. So there's there's sort of a return tray that comes out to the side that says, hey. This this didn't work, and you get those back if you're standing there. Okay. So in in in this case, what what we're envisioning is these would not be it would probably not be the consumer doing the dumping of the bag. They would probably hand their bag or their box or whatever they come in with, to an attendant who would sort of dump those in, and those would come back, and those would be presented back to the customer. What often happens in that case, senator, is the, the facility will often take those materials anyway. They just won't offer a refund for them, and they're bagged separately. The pickup agent who went into Vermont is Tamara. Tamara will take those just as a scrap value product so that they don't end up, you know, outside on the street or wherever they might end up. Okay.

[Sen. Seth Bongartz (Member)]: So it's not liability for the redemption center?

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: It's not. No. The redemption center is never liable for

[Sen. Seth Bongartz (Member)]: Well, I just meant the handling. So I I get that they don't get paid. I just think it sounds like a bit of a liability if it's acute enough, but maybe not. Yeah. And people that it's

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: It it usually amounts to, you know, like, they might accumulate a bag of plastic bottles. People put water bottles or something in by accident. It you might accumulate a bag over the course of a week or two, and the driver will just sort of haul that off when he when he comes and give them, you know, a buck for it or something like that for the scrap value.

[Sen. Anne Watson (Chair)]: Okay. I want to follow-up on something that you mentioned about having some suggestions. You do have a set of suggestions, that is certainly welcome and would love to see that list. Assume you're sending your written testimony in to our committee assistant and

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: Yeah, Chris Rice, who is our representative for the Beverage Association, will submit the written testimony. Super.

[Sen. Anne Watson (Chair)]: Great, any other questions at this point? Okay, super. Well, thank you so much. Really appreciate I

[Bree (Bree) Dietly (Principal, Breezeway Consulting; representing Beverage Association of Vermont)]: appreciate your time. Thank you very much.

[Sen. Anne Watson (Chair)]: Thank you. Okay. And it looks like Mr. Smahaz from the CAM Manufacturing Institute is not able to join us this morning. I don't know if Michael Villanal is with us. So otherwise, I think we're going to take a little break. Yeah, we're to take a 10 break. We'll be back at ten.

[Paul Burns (Executive Director, VPIRG)]: Okay.

[Sen. Anne Watson (Chair)]: All right. Good morning. This is Senate Natural Resources and Energy, and we are going back from a brief. And again, are joined remotely by our next witness, Michael Noel from TOMRA. And yes, hello, welcome.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Hi there, Terry Watson. Hi everybody. Can you hear me okay?

[Sen. Anne Watson (Chair)]: Yeah. Yes, I think so.

[Sen. Ruth Hardy (Member)]: Okay, great.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Should I just jump into it?

[Sen. Anne Watson (Chair)]: Yes, go right ahead.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Okay, great. Excellent. Let me pull up some notes here. It's good. Hello, everybody. Chair Watson, members of the committee. I appreciate the opportunity to speak today on this important piece of legislation. I'm speaking on H915. I am a, my name is Mike Noel. I'm a Public Affairs Director at TOMRA. We are formally opposed to H-nine 15. Because of its current form, it's changed since I last testified in the House where we were largely in support. But I want to be clear, we support the overall objective of improving the program, and I can explain further on some of our more specific comments. By way of background, Tomer provides technology and services across Vermont's bottle bill system and has done so for decades. We provide reverse vending technology to stores and redemption centers, both the single feed machines you may have seen in grocery stores, and bulk feed machines where you can empty an entire bag in at once, and get repaid immediately. And you don't need to sort by material type. You can see an example of this technology today at Morrisville beverage. We also recently brought Clink into the Tomer family last year, who offers a popular bag drop redemption service, where you can drop off an entire bag at once of mixed containers and be paid back or donate your refunds to charity on your phone. In addition, Tomer provides container pickup services on behalf of all beverage distributors in Vermont, and processes those containers at our recycling facility in Essex. We also operate the clearinghouse that radically simplifies how deposit refunds and handling fees are exchanged between hundreds of distributors and stores and redemption centers in the state. Relevant to this conversation, I serve on the board of Maine's producer responsibility organization for their bottle bill, also known as the Cooperative. And TOMRA operates in all major deposit return systems around the world, including all 10 US states with such a program. So, I'm bringing some of that expertise to bear here when discussing this bill. We support the idea of modernizing Vermont's bottle bill. The program has seen better days, mostly due to neglect from not updating the law earlier, which has stifled public participation in innovation. But modernization needs to reflect the reality that Vermont is not starting from scratch. There is current infrastructure and jobs that rely on the system continuing to work. This includes about 100 locations statewide, or over 100 that take back cans and bottles, and put deposit money back in Vermonters pockets every day. As I mentioned, the recycling processing facility in Essex relies on the public's easy access to return their containers. The pickup processing and recycling of containers, the billing of hundreds of distributors, and the payment of these 100 plus redemption locations for different fees, all of this works, but it does so due to the way the law is written, and we need to be careful about a transition to a new entity, and be honest about the conflicts of interest at play. I don't mean to suggest that Tamara is immune from this. We do generate revenue from the program today and can see a pathway to doing that in the future. But recognizing conflicts of interest and designing guardrails accordingly is a normal and necessary part of policy design. Regarding H915, I will I'll send more detailed language recommendations after the hearing, but I'm just going to summarize here. Our opposition is mainly related to the handling fee. Vermont has an existing redemption network, and it remains viable because stores and redemption centers are paid a handling fee per container they take back. Without this, redemption centers would close. This bill proposes letting the beverage industry propose fair compensation to stores and redemption centers as long as DEC approves it. That is the amount for, and that would be the amount for at least the next five years. We understand the beverage industry's interest in reducing costs in the system, and even respect the wisdom of removing the handling fee from the statute where it is static, but there should be more detail here, So the legislature can be confident that this bill does not close redemption centers en masse. There's a few different options here from adding in an arbitration section like we see in Quebec, having a separate body set the compensation amount like we see in Alberta, or allowing redemption centers to appeal to BEC if their costs have, you know, been different than what is approved in the plan. But all we are asking for is the new compensation amount to be updated every two years. That's it. I think we can agree that costs do not stay static due to inflation. So neither should this fair compensation

[Paul Burns (Executive Director, VPIRG)]: amount.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: This is important if the legislature or Vermonters expect to see the clink bag drop service or bulk feed RVMs. It is hard to see how it would be Tom or technology if there's not a viable market for innovation fair compensation. The next topic is distributor approval. If you want to see redemption at transfer stations, and for monitors to get their money back from from a clink backdrop service or bulk RBMs, there would need to be a requirement for containers processed by this technology to be accepted by distributors and the PRO. We're not suggesting that any container redeemed through technology should be accepted, just legitimate containers. So, this section would make it clear that distributors are not expected to accept fraudulently redeemed containers, so similar to the language in Mainlaw. The second one is also related to technology. In order for containers to be accepted through redemption technology, it's not enough that distributors need to sign up with the PRO. They also need to actually send in their barcodes, their universal product code to the PRO, and for those codes to be made public. So, we as the technology provider can evaluate the container, accept it or reject it, and either help the PRO do the billing or do the billing ourselves. So, product registration needs to be added. The bill proposes allowing smaller retailers to refuse customers when they bring back containers. There's some logic to this as the PRO is required to ensure a convenience standard is met, suggesting that some retailers can drop out. But retailers should only be allowed to drop out of the system once the convenience standard has been implemented, not just once DEP approves a plan to implement the convenience standard, if you understand the nuance there. And then convenience and operating hours. The bill eliminates the minimum opening hours when Vermonters can get their deposit money back from a return location. So these minimum hours should remain, or should at least apply to the locations that are required under the convenience standard, unless, you know, perhaps a waiver is granted by the Secretary. The risk here is the PRO is the only one operating redemption centers or a redemption center in your county, and they can choose to keep it open for one hour a week, you know, in an extreme scenario. And there's nothing in the law that says they need to stay open longer than that. And then unless I read it wrong, the liquor section says the distributors only need to pay retailers a handling fee, but makes no mention of paying redemption centers a handling fee. So redemption centers will refuse liquor containers if they are not compensated for accepting them. And this is doubly important because the deposit value on liquor is 15¢, and Vermonters are likely to be angry if they can't get their deposit money back. The program's, sorry, the bill's performance targets are based on what's called a redemption rate. And this should be defined if the P- that's because if the PRO fails to reach the minimum redemption rate, it would be required to improve consumer convenience and patient efforts. I guarantee there will be disputes over what the statute means by redemption rate, because it is not defined in this bill. We strongly recommend adding a redemption rate definition like Connecticut and Maine have. The timeline is unnecessarily long. It will not take fifteen months to develop the first draft of the plan, for example. It may six months.

[Sen. Anne Watson (Chair)]: Mr. Noel? Yes. Sorry, go ahead. Yes. It's great that you're providing really specific suggestions, but we don't have your written testimony, and you're not referring to the places in the bill, so it's hard to follow what your suggestions are. Do you have your written testimony that you could submit? And could you at least tell us where in the bill you're talking about or when you're making suggestions? I

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: will be submitting detailed testimony to a section and even language recommendation. I just haven't done so yet. Okay. Is there a specific topic I brought up you'd like to know

[Sen. Anne Watson (Chair)]: what- Well, you've gone through a bunch of them. So I was gonna ask you about the first one, but then you've mentioned multiple things. So maybe I can just look at your written testimony, but I don't feel like I know the bill well enough yet to follow along with what your suggestions are. But just, I guess, carry on. And if you can just refer to specific sections from now on, that would be helpful.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Okay. I I'm just reviewing the language. I haven't memorized the different, like, section numbers or anything like that, unfortunately.

[Paul Burns (Executive Director, VPIRG)]: Okay.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: But I'm to you know, my

[Sen. Scott Beck (Clerk)]: my

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: formal testimony will have, you know, the exact language in there. I'm also

[Paul Burns (Executive Director, VPIRG)]: following on that's helpful.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: I believe I am wrapping up with two more comments here. There's a timeline, I believe it's towards the end of these two, these actually, I do recall these two points are about section fifteen thirty two, I believe, has to do with minimum plan requirements. There's a timeline in there, and when the producer responsibility organization needs to submit a plan, and then it says DEC approves the plan, and then implements the plan, and there's dates in there. That timeline is unnecessarily long. It will not take fifteen months to develop the first draft of the plan, for example. In Maine, that very that same step took six months, not fifteen months. So what takes more time is the state agency in the PRO to agree on the final plan. And I'll provide a recommended timeline in my testimony. And then the actual structure of plan approval process should follow best practices in terms of PRO oversight. So the bill should be very clear that DEC has the authority to send the plan back to the PRO for edits if it does not meet the minimum plan requirements set in

[Sen. Anne Watson (Chair)]: the

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: bill. So the PRO will be just just the nature of the industry, the PRO will be incentivized to put forward a first draft plan that does the bare minimum to comply. And then the state needs the authority to require edits, so the statutes intent is fulfilled. This has been a painful process in Maine, but ultimately, it is an important one. Otherwise, the PRO would submit a bare minimum plan, and it could be divorced from the requirements in the statute, and the state may not have the authority to require further edits. So it's an important piece. And I believe that's it. But again, our most important comment is on the handling fee, and how eliminating it without more clarity on what follows is extremely risky. Thank you. I'd be happy to answer any questions you have.

[Sen. Anne Watson (Chair)]: Great, thank you so much. Yes, certainly looking forward to getting your written testimony, even so these suggestions feel important and helpful. And I'm thinking about this last point that you've made about eliminating the handling fee without knowing what's next. And so in your written testimony, I mean, I feel like I've heard from folks today that the timeline for eliminating the handling fee may be problematic, that it may not be going to the right people, the requirement to pay books may not be going to the right entities, if it's the retailers versus if it's the redemption centers. And any other suggestions that you have around how the handling fee ought to be modified? I I was also hearing your suggestions around if it's negotiated and it must be a fair compensation approved by DEC, I'm appreciating the suggestions around having either some kind of arbitration process or a separate body that sets the amount or allowing an appeal process to DEC. I think those were all interesting suggestions. Anything else that you would recommend around the handling fee?

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Yeah, so I mentioned those other options just for like the committee's understanding that there could like, if in other jurisdictions where there is no state set handling fee and an amount static set in law, there's way more detail in the legislation or the regulations to spell out how this works. And I'm not aware of any example where it's just pay a fair compensation amount, state agency approves it or not. So and that's risky, because we're putting a lot of faith in the beverage industry and DEC and whatever administration is managing DEC to get a fair compensation amount. And so we're just raising that risk. Being said, we understand we want to be flexible. And so we are asking at a bare minimum that whatever that amount is, or that the approval process be required to update that handling fee amount every two years, which is the end, and just you can leave it at that. And the intention there is to assume that fair compensation amount would be adjusted to reflect essentially inflation and cost of doing business. If you want to go further or then there's more that can be done there. So for example, in Quebec, it's, you know, there's something in the law that says the PRO needs to pay for the full cost of redemption. And then it needs to agree on, I think it needs to establish contracts with each return location. And then if the two sides, meaning essentially the retailers there, and the dispute must go to arbitration. And there's a whole section in there that you could include. And that's flexible. And we understand the PRO in Quebec has come to a, you know, an agreement with the retailers, and they've set it up. It's a little different than Vermont, where there is independent redemption centers. So it wouldn't be sufficient just to cover a redemption centers cost. They're not nonprofits, they would need to be, you know, required to pay the cost and in a fair profit, or something of that sort, or reasonable profit margin, something like that. Otherwise redemption centers will close. So that's like one, you know, of arbitration. The other one is Alberta, which is, and Susan Collins is more of an expert on Alberta than I am, but there's a separate body that sets the, essentially the compensation amount to redemption centers regularly. Want to say it's every year or every other year. I'm not super familiar with who is on the separate body. I want to say it's quasi public, and that's just a way to kind of create some extra focus on whatever this compensation amount is, and make sure that there's some public representation on that board. And so it's not just we'll set it on a fair compensation amount, and that's what it is for five years. So I think you're picking up on that this is a tricky dynamic. Don't want to make it overly complex or government overreach, but some additional criteria should probably be in the law. And all we're asking for is that it should be updated every two years.

[Sen. Anne Watson (Chair)]: Where in the bill is the handling fee? I see it on page eight as related to the liquor, but I don't see it other places.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: I I just have the digital and word searching through it. Can get

[Paul Burns (Executive Director, VPIRG)]: I'm

[Sen. Anne Watson (Chair)]: a paper copy. You know

[Paul Burns (Executive Director, VPIRG)]: Mhmm. Let's see here.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Okay. So page four in the PDF, line eight to 10. Page four, line eight to 10.

[Sen. Anne Watson (Chair)]: That's the only place it's mentioned.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Well, it says that's where it shall not apply. Then

[Sen. Anne Watson (Chair)]: I'm just wondering where the setting of the handling fee is because we've dealt with this in other places where setting up fees is kind of our responsibility. Mhmm. So

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: it's page 14, line nine. Actually, line nine to 13.

[Sen. Seth Bongartz (Member)]: Okay. Oh,

[Sen. Anne Watson (Chair)]: right. This is about how the handling fee is set. I see. Okay. Susan Collins says section 15.2 B, lemonades can be removed using any. I didn't see that. Let me answer your questions. Yeah. It's like there's a v that, anyway, is not included. Yeah. And the She might have been a. I don't know.

[Sen. Ruth Hardy (Member)]: She's talking about page three.

[Paul Burns (Executive Director, VPIRG)]: Yeah.

[Sen. Seth Bongartz (Member)]: Well, it's just a pilot. Right? Yeah. Yeah. Mhmm.

[Paul Burns (Executive Director, VPIRG)]: Okay.

[Sen. Anne Watson (Chair)]: Great. Thank you. Any other questions at this point? Or comments? Okay. Yes. I'm just curious because you said, Mr. Noel, that you supported the bill originally, and then now you're not supportive of the current. And I'm wondering, I guess, I don't know, it's maybe not a question for you. I'm just wondering what changed or like why these changes were made that, and so we should hear from both all three of I'd say that my earlier,

[Sen. Scott Beck (Clerk)]: nothing's changed. We're still looking at the bill as introduced. Right? Yeah. So nothing's changed.

[Sen. Anne Watson (Chair)]: Oh, was that can you foresee me from us with the abuse?

[Sen. Ruth Hardy (Member)]: Yeah. Yeah.

[Sen. Anne Watson (Chair)]: That's it. And, yeah, but it was a committee bill. Okay, so I think we may be able to

[Paul Burns (Executive Director, VPIRG)]: question and answer.

[Sen. Anne Watson (Chair)]: Don't know if you want to speak to that at all, Mr. Noel, about what changed in the process that you know, made you go from supportive to unsupportive or

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Sure. So there was so maybe the maybe the the the link online discussing or or labeled as as introduced is, I think, well, there was multiple versions in the House Natural Resources Committee that was that were put forward. There was like a version 3.1, three point two, three point three. So the version I testified on was version 3.1. The public link has since been deleted. And now what is available is just this introduced version. The bill you see today is, I would say, like 90% similar to what was in 3.1. But the enormous change is that fair compensation language that I highlighted on the handling fee. Previously, the producer responsibility organization was essentially still required to pay the handling fee as set by statute. This says handling fee shall not be applied to any container models by the PRO, and essentially will be replaced with this fair compensation amount. So that's a, you know, it's fundamental change to how the system is funded. And I would, I mean,

[Sen. Anne Watson (Chair)]: if my

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: understanding is this was, well, I'm not going to comment on why it was removed. I think you can ask the department. So

[Sen. Scott Beck (Clerk)]: which version of it you were supportive of 3.1?

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Largely, we were more, you know, kind of just more, we didn't have strong opinions on it. We thought it could work. We had some of the programmatic, you know, adjustments that I flagged in the latter half of my testimony. But this one, just because it has such a, you know, I think it's possible it works out, but there's a 50% chance that it does not work out and it actually really scuttles the redemption network.

[Sen. Seth Bongartz (Member)]: So it

[Sen. Scott Beck (Clerk)]: was the committee work post version 3.1 that in your opinion is problematic?

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Yes. That changes.

[Sen. Scott Beck (Clerk)]: Right. Okay.

[Sen. Anne Watson (Chair)]: I understand. The recommendation is on page 14. Okay, sorry, I'm just having fun. And I think this is starting to sink in for me, because right now, redemption centers are compensated based on a handling fee per container. And this bill eliminates that per container compensation and just goes to the PRO compensating reduction centers based on some contract or negotiated agreement?

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Essentially, I mean, the bill doesn't even say that, doesn't even say contract, doesn't say negotiation. It just says the PRO shall propose in its plan how it will fairly compensate redemption locations and the state shall approve that plan. So everything else is left up to interpretation.

[Sen. Anne Watson (Chair)]: Okay. So there it's a fundamental shift in how redemption centers would be paid.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Yes. Yeah. And there's, again, there's some logic to doing that. You know, there's some arguments that, well, why would a PRO invest in, you know, say improvements or technology improvements at a given return location if they don't realize the cost, like, let's say the labor cost savings from a redemption center utilizing that technology. And that's, there's some argumentation, there's some validity to that argument, but it doesn't say that the, you know, the PRO needs to cover the cost of redemption and a fair profit margin. It doesn't it doesn't say it needs to be updated if inflation goes up. So there's just very little criteria there. Okay. And ultimately, there's a power imbalance here. The PRO will be able to put forward a good argument as to why the amount should be this. State agency isn't necessarily the expert on the program, so we'll say, well, that looks pretty good. We'll approve it. If that becomes too low, and that is approved for five years, then, you know, do redemption centers have a recourse at that point, not based on what's in the bill, they could just essentially close. So it's just, I think you can understand it's a bit vague.

[Sen. Ruth Hardy (Member)]: Okay.

[Sen. Anne Watson (Chair)]: Right, and so that is kind of the worst case scenario is that we try to modernize this law and ultimately end up killing, know, end up closing redemption centers. That would be quite awful.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Exactly. And I'm sure the legislature does not want to see that happen. We don't want to see that happen. So we're just, you know, raising that that that is a real risk.

[Paul Burns (Executive Director, VPIRG)]: So there,

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: you know, there should there should be some sort of guardrails here.

[Sen. Seth Bongartz (Member)]: Yeah. Senator Bowers. But the agency doesn't want a piece of clothes either. Right. There isn't a set up on the part of the agency to make this place.

[Sen. Anne Watson (Chair)]: Okay, thank you. It's been very helpful. Any other questions for Mr. Noel at this point or comments? Okay. Just want to see the written stuff. Yes. His suggestions in the bill. Okay, great. Well, you so much. Really appreciate it.

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Okay, thank you so much.

[Sen. Anne Watson (Chair)]: Okay, and so we're going to move to Mr. Burns for week.

[Paul Burns (Executive Director, VPIRG)]: Thank you, Madam Chair and members of the committee. For the record, my name is Paul Burns. I'm the executive director of EPERD, the Vermont Public Interest Research Group. I'm grateful for the opportunity to testify before you today. This is my twenty sixth legislative session with me, I've talked about the bill in most, maybe not every single one of those, but for a long time and had worked on it when I was a environmental advocate for Massachusetts for being here. So a long time on the bottle bill. And of course, I have been part of a lot of the conversations and negotiations that were discussed earlier by earlier witnesses. And I appreciate, I want to say the effort that and focus that this committee is putting on the issue today and that the House Environment Committee did before you. And it is worthy of your consideration. And like briefly, I would say, there really is, there's not consensus around this bill as written, but there's a large consensus that changes need to be made and disparate forces agree on a large chunk of what is here. And I view that as a very positive thing. And it is the result of literally years of conversation and negotiation and compromise. So I'm grateful again for the opportunity to be speaking to this issue. It is important to update the Bolivaro program passed originally in 1972, the same year that BPERD was founded. And while we support the thrust of this legislation, there are some specific areas that we'll talk about that we'd like to see improved as well. But just a bit more background first. Again, what is commonly noticed about those passed in April 1972, I believe. While we don't have exact numbers, a reasonable estimate based on what is the number of containers redeemed every year, reasonable estimate says that about 10,000,000,000 cans and bottles have been redeemed and recycled through Vermont's bottle bill program since it was passed. Line up end to end, these containers would scratch about 947,000 miles. Senator Beck, that's enough to go all the way to the moon and back twice. We're talking about the moon launch around the moon earlier. That's remarkable. Just containers redeemed and recycled in Vermont all the way to the moon and back twice. The material collected to the bottle bill, the glass, aluminum, plastic is of high quality and high value because it has been separated. It's not thrown in with a single stream recycling, which while convenient, the product is much less valuable and it's not as readily turned into new recycled products as bottle bill material. And most folks will readily agree to that. It's difficult sometimes to find markets for material that is put into your blue bed at curbside and consider for instance, there was a five year period that the Chitin Solid Waste District had illegally dumped what amounts to 18,000 tons of glass that they couldn't find a market for. That never happens with volatile material. So there's a huge difference when we think about, well, why not just put everything into your blue bin? Because we care about the environment and economically it's much better to recycle at the highest and best use these materials that people consume and then would like to see used again and be turned into another bottle again for instance. Consider bottle of glass, it's just one example. Scott DeFeith, who I know was scheduled to testify today wasn't available, but hopefully you'll hear from him again or at another time. He's the president of the Glass Packaging Institute. These are the people who actually recycle glass. As you know, the material recovery facilities in Vermont, they receive material, they separate it and they send it on to someone else for actual recycling. These are the people that take the glass for recycling. A few years ago in front of the Senate Finance Committee, his testimony, I'll just read you two sentences here. Please know that there is no comparison in the quality and breadth of end markets available to the glass collected through the bottle bill when compared with co mingled curbside glass. The recycling rate is higher, the cost to process is less, the markets are more robust and within the region, and the yield is far higher. So again, if you care about recycling and all the benefits that come from that, the bottle bill is an excellent program for us. It's also true that recycling glass bottles into new containers rather than creating a bottle out of virgin materials from scratch, it reduces air pollution, water pollution, energy usage, and climate emissions. Again, better to start with a bottle to turn it into a bottle again. In my ideal world, we would have reusable bottles again, and there are other benefits that come from that. Of course, we used to have bottles that were reusable. The only way to ever get there is probably through a bottle build program where you're taking them back in one piece. So that's a little bit further down the road. But it is also true that there are environmental benefits and economic benefits for recycling aluminum and PET plastics through the bottle bill as well. For instance, the Association of Plastic Recyclers recently said this on the topic quote, Auto bills significantly increased the supply of high quality post consumer plastic resources. No alternative mechanism has been identified to replace existing deposit laws that would provide a similar stream of consistent high quality, high volume supply. The plastics industry is saying this, I'm not often on the same page, but you know here they're saying if you want to think about creating recycled content, food grade recycled content, it's got to come from a bottle bill program basically. Earlier this year, the Association of Plastic Recyclers chief policy officer further emphasized this point, noting that approximately 60% of all PET plastic, that's soda bottles and water bottle plastic, collected for recycling in The US comes from the 10 states with a bottle bill. So 10 states producing 60% of the recycled content plastic because it is of a much higher quality than what you would get through a curbside program. Moving to the deposit, we just want to note the deposit was set at a nickel in 1972 and it remains 5¢ today. Of course, the buying power of the nickel has changed since 1972, it would be about 39¢ as we sit here today, but I did this last week calculation, but somewhere around 39¢ today. Still the promise of that deposit being returned, plus the understanding that recycling these clean containers is a good thing for our environment continues to produce pretty remarkable results in Vermont. So there is no increase in the deposit in this bill to be clear, and Vermonters still return these containers. Tens of thousands of Vermonters redeem containers regularly. In fact, about 72% of the containers that are covered by the law return for deposit each year. And the program has maintained remarkable public support as well. In the last two statewide polls that BPR commissioned on this, one about five years ago, the other about fifteen years ago, almost nine out of 10 Vermonters said they supported the current program. And five years ago, another 83%, so I think it was 87% supported the current program, I think 83% supported is standing and to include other containers that were not in the program. But after fifty four years, it is fair to say, could use an update, you've heard some of the reasons for that already. The program is not as efficient as it should be, and it's harder to redeem containers in Vermont. Redemption centers are in many cases struggling financially. They face rising costs, including a regularly increasing minimum wage, while income derived from the handling fees remained unchanged for years. Vermont's follow-up program has just really failed to keep pace in terms of modernization as other states have done, and H915 takes some important steps to update. Again, I want to stress there is nothing in this law to expand the scope of the law or to change the deposit, still through this legislation we can see important updates that will improve the overall function. Regarding the PRO, the producer responsibility organization. This was a suggestion from the Bennington District. Bree Dee, we mentioned it earlier, it was the former chair of this committee who brought five or six of us together in the last biennium to negotiate a way, a path forward. This wasn't our idea, but Viper ultimately agreed to it as part of those negotiations around the last legislation. We remain open and even supportive of this approach, as long as there are benchmarks for its success, strong incentives to spur participation in a backup plan if it does not succeed. We even agreed to the proposal in this bill to allow the PRO to receive a portion of the unclaimed deposits generated by the bottle bill program. As a reminder, for nearly fifty years, the beverage industry was allowed to keep all of the unclaimed deposits, also known as the sheets, that changed about seven years ago. We supported the general assembly pass the change in law so that those unclaimed deposits would go to the state instead of remaining with the beverage industry. But remember, in total, over those nearly fifty years, the industry probably collected in excess of $100,000,000 in those unclaimed deposits. So just keep that in mind when they say how important it is that they get this money now. They got a lot of money and for nothing in particular for it beyond you know running the program. There were no, it's not like the proposal in this bill to say we will reimburse you for specific technology improvements at redemption, nothing like that. It was just, they got all of those tens of millions of dollars for many years. As you know, the unclaimed deposits now amount to more than $3,000,000 a year and that money is used to help fund clean water programs in the state. H-nine 15 allows the PRO to seek reimbursement from the agency. Again, that's envisioned over a four year period at about 3.5 or up to $3,500,000 And we support this specific time bound use of a portion of the unclaimed deposits to go through the PRO, but ultimately to help make this program work better. And you've heard some of the reasons I won't go through those again now, but we think that's a great use of unclaimed deposits, help make the bottle bill program work better, help redemption centers work more efficiently. That also benefits consumers, making their cans and bottle beds. The faster process, it works well for everybody. So I think that makes sense. Small businesses, of course, receive some benefit under this proposal as well, small retailers. Those under 5,000 square feet would be exempted from the program. That's the first time ever since the bottle bill has been created that it would exempt small retailers from participation, so called mom and pop exemption. But the reason why retailers were in from the beginning was because the theory was we want to make it just as easy to return your containers as it was to buy them in the first place. And the way you do that is make sure that where you purchase them, they will also have some mechanism by which you can take them back. But the reality is certainly in recent years, the smaller stores are not taking the great number of containers. People are fortunate enough bringing garbage full, they're cornered bodega, and expecting them to take all of those containers. So to write them out, it was a compromise, but one that I think makes sense for the small business owners and it's not a huge change. It was already noted, of course, that some of the large interests in beverage industry, we went through some of the changes that will benefit them from this. There are also changes in this proposal to help redemption centers, including eliminating all of those sorts of the containers. That's a big one and it makes a lot of sense. And the improved technology available for some is going to be an important improvement as well. These changes, particularly the technology could help to alleviate some of the biggest challenges that redemption centers now face, which is finding enough entry level workers to allow their business to function. For our part, we're interested in consumer convenience, and we support provisions in the bill that would have all points of redemption be redemption centers, meaning that large retail grocery stores that are selling beverage containers could no longer turn away containers of beverage type that they don't sell. That's the law today. You'll have to take back those things you sell. They would become redemption centers. They'd have to take back anything. I think that is reasonable, especially as we're allowing smaller retails out of offices. It also has certain provisions about a certain number per County, three redemption centers per County, and at least one in municipalities of 7,000 or more like where we are here in Montpelier. That clear? You get some Or do you want to? Yes.

[Sen. Seth Bongartz (Member)]: And they can stay in without having machine and parking?

[Paul Burns (Executive Director, VPIRG)]: That's a good question. I don't know if it's contemplated here. I think that would be the expectation. That's an excellent question Senator might be looking into. This is not the exemption that's written in here, but I think there's been an understanding if you want to continue to take back, you could. My guess is that it would be that the provision that you don't have to take back everything, but I don't know. I don't think that's specifically addressed to you. So we do have some specific proposals for improvement here for this and-

[Sen. Anne Watson (Chair)]: In page numbers and sections.

[Paul Burns (Executive Director, VPIRG)]: I have, and we said, I heard you're coming back Senator. Physically checking something except that I am gonna follow-up, but I'm submitting it. In section fifteen thirty two, which is dealing with the stewardship plan and the minimum requirements, we believe the bill does not yet go far enough to guarantee an improved process and better convenience for consumers. So here I would say, remember that as part of those negotiations, I don't know, four or five years ago, whenever it was, where we were talking about a redemption center for every community of 7,000 or more should at least have its own redemption center. At that time we were talking and frankly thinking specifically about Montpelier, which had just lost its redemption center. And when I say redemption center here, I'm really talking about a business that was created primarily to take back cans and bottles. They may have had some retail too, but that was the function. Montpelier lost its redemption center, the building no longer exists. And under this law, it would make Shaw's 50 feet away from where the old redemption center was a redemption center, because it's larger than 5,000 square feet and it has a couple of reverse vending machines now. But that's declaring it to be a redemption center does not mean that it was convenient for consumers in the way that a traditional redemption center was, where people were lined up with bags full of cans and bottles and knew that even if they didn't have a high-tech machine, it was gonna go relatively quickly. This is a place set up to receive those kinds of things. And so I am a little concerned that when we talk about at least three redemption centers per county, we want to make sure that that process is one that actually works for consumers. It isn't just a grocery store with an RVM machine. That's not really going to be convenient in the way that I think we're envisioning and even for Montpelier. Not saying the Shaws couldn't do it, but do need upgrades to the equipment that would allow that to work. And so when we talk about at least three redemption centers per county, I think the question becomes, what does that mean? You know, what kind of facilities are we really talking about? So if this law does anything, I think it must improve the redemption experience for consumers. That's kind of our position here. It shouldn't get worse for consumers. And this is a conversation we're just having with Mr. Dwell. So in section fifteen thirty two, three d, page 15, lines five through 10, lays out election location standards. We urge you to consider strengthening these standards by requiring that redemption centers, yes, be accessible, but also open for business at least forty hours a week, and open on at least one weekend day. These are facets of consumer convenience that are not specifically addressed and I think could be helpful. As I've been talking with other stakeholders, some mentioned that, well, there may be facilities, I don't know, in the islands, they're only really open in the summer, and maybe there's some exemption process that could be included for the secretary of ANR to consider, know, really cases that it makes sense. They don't have to be open forty hours a week every week and on a weekend day. But I think for most, if that's the assumption, that that would be a helpful addition here. We also encourage some criteria, and it might have to work through this with ANR about certain minimum level of throughput that would be allowed or the capacity of that location, for instance. It's referenced in the bill, but not with kind of specificity that gives me creative comfort. And if RBMs reverse vending machines are used, they should have a phone number or other means of immediate reporting of the problems and malfunctions should be addressed promptly. And I don't know if you need to put in the bill that they have to be addressed within two days, but I think there should be some expectation that you can't have a machine that's not working for days and weeks. That just doesn't suit what I think Like you

[Sen. Anne Watson (Chair)]: EV chargers out there, for example?

[Paul Burns (Executive Director, VPIRG)]: Does but I guess it would be a disaster. I

[Sen. Anne Watson (Chair)]: think we have another part

[Sen. Ruth Hardy (Member)]: of the machine. So there are actually companies that own those machines that go around and plan to them and make sure that they're emptied out regularly or? Yes, it's AMRA who's in charge of a lot of that. I don't

[Paul Burns (Executive Director, VPIRG)]: know about the ownership or the leasing agreements and so forth, but yes, grocery stores, they don't generally own those, you know, that's a lease agreement. We just got we need to make sure, and I think it's entirely possible that the process works

[Sen. Seth Bongartz (Member)]: for consumers.

[Sen. Ruth Hardy (Member)]: We've got one in my shawls and where I live, and it's usually falling. So it's just falling, it's not

[Paul Burns (Executive Director, VPIRG)]: a malfunction, it's just So that really would be the responsibility of the PRO working with TAMA or whoever is collecting these things to ensure that that's processed, that you don't have that problem anymore. And I think the agency would say it's appropriate for the PRO to have that responsibility because the agency doesn't have the staffing to really provide that level of oversight. And that's maybe one of the reasons why we've been having that challenge now. So I'm open to the idea of this PRO that given the authority and the responsibility and have it work better. But part of it too is just even if functioning as expected, is it truly a redemption center that people could expect to bring a larger number of containers to and have it dealt with? And I'm worried a little bit that the language here is not clear enough to ensure that that is the case. Now want to say that, oh, there is one other provision in the bill. It's in the same section center, I don't have the line, but it talks about where there are the requirement of three redemption centers per county, at least one of which would allow for the immediate return of deposit. It seems to me that, I don't know, if we were only dealing with three per county, two of them should have immediate return of deposit and one of them would be the other kind. And the other kind, what many people are talking about is a bag deposit system. So a place where you can drop your bag and you've signed up for this service and your name and contact or code and so forth is on it. And you would have an account that it's updated once those cans and bottles are actually counter or go through a machine. I like the idea of bringing this technology to the state. And I can imagine for our County, Washington County, and maybe it is at the Casella transfer station that there is a process set up that where people could bring their bags, drop them off and leave, you know, and know that their account will be properly updated. It's time for Vermont to have that kind of technology it seems to me. And I think that would be something of a game changer for consumers in the state, at least in a lot of areas, we can have that kind of technology available. I'm not sure that there is enough throughput for every county to have this, but I have considered whether there should be a requirement that at least three counties in the first two years of the program should have a demonstration of this, should adopt a bag drop system because it doesn't call for it specifically in the legislation now. But why don't we do it and make sure that it can work for us here in Toronto? But I'm sure that it will because it does work in other places. But that would be another specific suggestion of the bill.

[Sen. Anne Watson (Chair)]: Because you're worried that, sorry,

[Sen. Seth Bongartz (Member)]: no go

[Sen. Anne Watson (Chair)]: ahead. It will tap in if

[Paul Burns (Executive Director, VPIRG)]: we- Yeah, why isn't it in the bill? Guess senator- You're just

[Sen. Anne Watson (Chair)]: worried that won't go get twenty first century technology.

[Paul Burns (Executive Director, VPIRG)]: If we're gonna support this, I'd like to know what we're getting for it, in particular for consumers. And it would give me a little more comfort to know that that is one thing for sure that at least some parts of the state may not be three counties, it may be more, but it's something like that. Think it makes sense.

[Sen. Anne Watson (Chair)]: And there's another question. So

[Sen. Ruth Hardy (Member)]: one of the municipalities in the district had a transfer station that people could just bring their bags and they sorted them, actually took them to the redemption center in each organization that wanted to be on the receiving end of that. They they went in a rotational series where somebody benefited every day. A lot of people don't wanna bother taking them to the Yeah. But they will to donate into a nonprofit or whatever.

[Paul Burns (Executive Director, VPIRG)]: On Front Porch Forum, at least in this area, you can find people who will come and collect your redeemables for their own purposes. But you know in other backdrop situations, you could have your account credited or you can leave it for another nonprofit entity, for instance, would be another way to go there. So I just think moving in that direction gives us one more opportunity for consumer convenience that we don't have today. And if this bill could help to bring that about it, that's a good thing.

[Sen. Anne Watson (Chair)]: Yeah, my understanding is these apps can say like, oh I want my cans to go to the Boy Scouts or whatever, to the four H club.

[Sen. Ruth Hardy (Member)]: Well transfer staging manager change. He went to the support board and said how long does this work? So we're not doing it.

[Paul Burns (Executive Director, VPIRG)]: That's too bad. Then of course there will have to be some negotiation about where these facilities can be and so forth, but I, which is another reason why I'd like to ensure, have a VA responsibility in PRO to make sure that at least some of these are set up and then we can learn from that and hopefully grow that process. But I do think that's different. And particularly given my kind of concerns about just declaring grocery stores to Butte Redemption Centers, that doesn't make me think that it's gonna be all that can be.

[Sen. Anne Watson (Chair)]: Yes, go ahead.

[Sen. Seth Bongartz (Member)]: So the other thing too here, think you've noticed that County on one hand could be a meeting list number because there are some counties where near the top off, you're gonna top off, you're not going to the other end of the county. But I assume there's a finding that talks about geographic distribution and for accessibility within counties because I know that there are places in Bennington County where people from one end might go to the other end, you know, place fear. Literally, yeah. That's true, assume that's true in these places, yeah.

[Paul Burns (Executive Director, VPIRG)]: Yes, Senator. But here I think is another area, particularly as we're about to move into the handling fee conversation and the importance of keeping our redemption centers open, viable, functioning, because where this bill grants the secretary of the agency of natural resources, this is something that came in very late in the house of consideration of the bill, grants the secretary the authority to change the minimum number or change the number. And to, I shouldn't say drop a low three, but to say I will exempt large retailers from having to comply to participate as well. That would be within the authority of the secretary. It's not something that I particularly support. However, examples are given, there are certain areas where large grocery stores are essentially across the street from each other. And does it really make sense for both of them to have to have a redemption center function? Maybe not, but I would then say that there should be tight criteria by which an exemption could be granted for a large retailer. It has to be within a mile or something like that, because otherwise, as you think about the handling fee negotiations between the PRO and the redemption centers, or even the grocers acting as redemption centers, it says that the PRO has an interest in ensuring that these facilities remain open and available. Otherwise they would have to open their own to meet the minimum standards. But there aren't too many counties that I think would have fewer than three redemption centers. If you began to consider, I should ask you, Senator, you considered every large grocer a redemption center, do we even have this county that doesn't have at least three now? Maybe nine grocers? Yes, larger than 5,000 square feet.

[Sen. Anne Watson (Chair)]: That's 6,000 square

[Paul Burns (Executive Director, VPIRG)]: That's That's 6,000 feet.

[Sen. Anne Watson (Chair)]: Work in Grand Isle.

[Sen. Ruth Hardy (Member)]: I mean Caledonia has Orleans, I don't know. I haven't seen the numbers. I haven't

[Paul Burns (Executive Director, VPIRG)]: seen the number. I think it'd be interesting for the conversation. And I guess my bigger point is if in larger counties, this is clearly have well in excess of three large retailers that would qualify. Does that mean the PRO can then negotiate very tough repayment fee? Well, we'll pay in 2¢ because we've already got our three. We know we're going to meet that standard. I hate to see, in other words, this bill used in any way to reduce the number of convenient redemption center opportunities that are available. And while I don't think that's necessarily done, he's nefarious, but I think the language here could potentially allow for that. And it does give a great deal of power to the PROs. So this brings me to the handling fee. We're very concerned about the proposal on page three to eliminate the handling fee and what implications that would mean for the redemption centers.

[Sen. Anne Watson (Chair)]: Handling fee?

[Paul Burns (Executive Director, VPIRG)]: That's the page three, lines seventeen, nineteen. It's just where it takes it out. It says it does not apply to the PRO, to any containers that are in this program. So going forward, it's an expectation that you no longer would have a set three and a half centimeter. That's all it does.

[Sen. Anne Watson (Chair)]: Okay, I know it's bad. Thank you

[Paul Burns (Executive Director, VPIRG)]: for that.

[Sen. Anne Watson (Chair)]: I'm a stick. Yeah, know all of it.

[Paul Burns (Executive Director, VPIRG)]: Thank you. But there is a significant imbalance of power between the professionals representing a PRO and redemption centers that are out there. Without more specificity, you've heard some of this conversation already, we're concerned about that negotiation process. Also, think this is really important. The rationale, I guess, for this provision to eliminate self handling fee is twofold. One, there's a belief among some that redemption centers are just making too much money under the current handling fee. And two, that the PRO needs a financial incentive to encourage investment in redemption centers, that investment from the new technology. But let's address the first point. There is no evidence that I've seen to back up the idea that redemption centers are raking in an offensive profit. And even if some of them are doing well, since when is it the state's job to put its thumb on the scale in favor of large beverage industry over hardworking retention centers? The fact is while we see no evidence justify the elimination of the set handling fee, there's plenty of reason to believe that it's a bad idea. One, consider for instance the costs of the redemption centers. The handling fee for co legal containers is 3.5¢ and it's been that since 2008. While that was a sustainable number maybe twenty years ago, it no longer in many cases covers the cost of doing business today. Adjusted for inflation 3 and a half cents in February would be worth 5.2¢ today. So meaning that the centers are operating at a significant loss compared to what the fee was this twenty eighteen years ago. Think about other expenses. The economic landscape for the state has changed significantly since then. While the fee, the handling fees remain frozen, primary costs of running the business, labor, rent, insurance, utilities have surged. The most significant driver of this gap is the minimum wage.

[Sen. Seth Bongartz (Member)]: I don't think you thought it was worth it.

[Paul Burns (Executive Director, VPIRG)]: I just want to point out, the minimum wage was $7.68 in 2008. In January, it went to 14.42. That's an increase of 87.7% while the handling fee has remained the same.

[Sen. Anne Watson (Chair)]: Can I ask the question? Because I agree with Senator Bongartz. I'm looking at this paragraph on page four and I'm trying to understand it. And this is one of things why I didn't quite understand where this was in the bill. So the handling fee right now is paid to anybody who handles the bottle. So the redemption centers, does it also go for non?

[Paul Burns (Executive Director, VPIRG)]: Grocers, anybody who's taking back.

[Sen. Anne Watson (Chair)]: Anybody who's taking back the, but if it's for, is there a handling fee for just the recycling of bottles that don't have the, that are not part of the bottle bill? No. Okay, so this is not going to wine bottles that are going through our regular system, or our other system, the blue bin system. This increasing it from 4 to 5¢ for co mingling programs?

[Paul Burns (Executive Director, VPIRG)]: Yeah, the idea there was, there was an incentive to encourage more of the beverage manufacturers to participate in the program that Radeepi was talking about that makes it easier so that they should all go in together. You shouldn't require that your brand remains separate. That's a hassle. That's a significant hassle. About 80, somewhere north of 80% of the containers are in the commingled agreement now, I believe in the state. But if these outliers continue to be problematic for redemption centers, anybody taking back these because they have to find a cardboard box for every single

[Sen. Anne Watson (Chair)]: one. I see, I see, okay. But then, so they're in, I don't understand why the house would be increasing the fee and then just, and then this line is saying, Oh, we're not.

[Paul Burns (Executive Director, VPIRG)]: That will all go away. The theory is that's only going be in place for a period of time that until this new law kicks in. Oh,

[Sen. Anne Watson (Chair)]: I see.

[Paul Burns (Executive Director, VPIRG)]: So that would be replaced.

[Sen. Anne Watson (Chair)]: I see. Okay, that was counterintuitive to me. I'm like, okay, we're gonna those two d events. Okay, that's helpful to understand. But yeah, I don't understand though why we would not pay the redemption centers still pay them the handling fee if they're part of the PRO program.

[Paul Burns (Executive Director, VPIRG)]: I would suggest you so, but I know there's another question, should you?

[Sen. Ruth Hardy (Member)]: Go ahead. Go ahead.

[Sen. Anne Watson (Chair)]: No, we'll we've got to do it. Yeah, we have. Yeah. So let me

[Paul Burns (Executive Director, VPIRG)]: say, Senator, that our suggestion would be to maintain a floor, a handling fee floor of 3 and a half cents that ought to be reviewed and perhaps adjusted every two years as Mr. Noel said, Mike Noel about, because you know, if you don't put in an automatic increase as we do for the minimum wage, then at least you should be reviewing. You should go in and can't expect these places to stay in business.

[Sen. Anne Watson (Chair)]: Well, with our, sorry to interrupt but I think we have other PROs, and you know a lot more about them than I do, that have fees involved. I think we just did one last year where there was some fee involved and they wanted to set a fee and we were like, heck, wait, wait, wait. It was a pain. Yeah. Thank you, Senator. And it was like, oh, wait, we're the fee setters. The legislature is, we're not gonna just let this PRO set a fee in the week. So it seems like consistent with what we've said in the past that at the very least there needs to be sort of some check-in on it.

[Paul Burns (Executive Director, VPIRG)]: Yeah, we're concerned with the language here now. This is what causes us not to support the bill as written, because I think it's handling fee is really for us, perhaps the most important thing to try to amend and get rid Recognize too that of all the extended producer responsibility programs, state runs. Paint is a little bit different, but none of them is the state giving money to the manufacturers to run the extended producer responsibility. Correct, just by definition, it's supposed to be their responsibility to do it. It's the cost of doing business. It's supposed to be borne by them. But in this case, again, because it's not just going to the beverage industry, it's going for these improvements. To me, in my mind, you can have the agency making these same investments and that would be a wonderful use of the home cleaning deposits to make sure that the process, you'll have the technology to work better. So the fact that it goes through the PRO, we're not gonna oppose that, but it's not really just giving it to the PRO as we did for nearly fifty years. Okay, so maybe can I?

[Sen. Anne Watson (Chair)]: Sure, well I just wanted to pause here a minute if there's any other, do you have any questions? Yes.

[Sen. Ruth Hardy (Member)]: So So I've talked to we got you started my district there. Also has a retail opportunity. He thinks that they should put a deposit on money bonds. And I don't wanna go there because I don't know, but because that's a lot of moving parts to me.

[Paul Burns (Executive Director, VPIRG)]: Senator, I would say that most states, nearly every state that has a bottle bill has expanded the scope since the laws were initially adopted. Maine's for instance, covers more than 90% of the beverage containers sold in Maine, where ours covers about 46% of the beverage containers sold here. However, there isn't broad enough agreement that this is the time to think about expansion or an increase in the deposit. So we are not proposing it. We're looking for a bill where there's largely a large area of consensus and some hope that we can get there on the parts where there's a little bit of disagreement now.

[Sen. Anne Watson (Chair)]: And if I can jump in on that as well, it's because I agree with you, but it also seems like it's worthwhile to try to like fix the system or get it out of of trouble that it's in right now, before an expansion happens. Yeah, and that was the logic. There was a bill a couple of years ago that did all of the things, and it was a little too much at one time. Cool. And

[Paul Burns (Executive Director, VPIRG)]: if these changes can, really it's an opportunity to provide benefits to nearly every interested stakeholder here from the beverage industry to small mom and pop stores, certainly consumers or environmental benefits, and I think to redemption centers if we can get this handling fee right, we'll make the whole thing work better and then you can consider what kind of updates or modernization budget. But yes, that's the idea. Now let me say with respect to handling fee, I do think if you allow negotiations between the PRO and individual induction centers to determine an increase in their handling fee, that might make sense. So you can have a floor, but I'm not suggesting that that necessarily needs to be because people have pointed out that the costs to run the redemption center are different in different places. And that is true. True put matters and all of these things. I just wouldn't want to go below the floor because I just don't think that makes sense for reasons that we've stated. Now on the second point, this is regarding the need for an incentive for the PRO to make these investments. I think that there's some merit and value to that, but that incentive could be provided simply by allowing negotiations for a lower handling fee as part of the agreement between the PRO and the redemption center that receives the new technology, because that new technology would be cost saving infrastructure for the redemption center owner. So they could say, well, your cost is going to go from maybe it's 4¢ a container down to 2¢ and you don't need to have all this labor. And that's a big hassle that you could avoid by having this I'd say then you can negotiate perhaps down from 3 and a half cents or at least leave open that possibility. All I'm saying is to preserve the incentive piece of the rationale for doing this, I think you could do it without getting rid of the whole handling fee. Just have that apply only to those situations. And I think it's envisioned somewhere between 20 and 30 when they have three and a half million and these machines cost a $100 at least, you know, negotiate only in those cases if you want to consider a possible lower gambling fee. All right, so those are specific recommendations of some language I think that we and others are going to submit there. Another issue that is worth noting though, and that is what happens if the PR doesn't form? And you heard that there are challenges in Connecticut and Maine has had some different challenges. The bill contains on page 11, line 11, if I have this correct, Senator, an assessment of 10% of the, an additional 10% on top of the cost of the stewardship plan, total cost of the stewardship plan.

[Sen. Anne Watson (Chair)]: I think it is page 12 by two. Okay, maybe

[Paul Burns (Executive Director, VPIRG)]: this, you can, might have a But then 10%, now we strongly recommend a higher assessment with the hopes that it will never be needed. So I think a 10% penalty in this case may be insufficient. The amount does not meaningfully incentivize participation nor does it reflect the added burden that would be placed on the agency if it really were required to step up for non compliant producers. So we urge the committee to consider a penalty assessment of 50 to 100% of the costs on non compliant producers. This could help Vermont to avoid the kind of foot dragging and failure from producers to create a tiara that we've seen in Connecticut as an example.

[Sen. Anne Watson (Chair)]: Can I ask about this? Wait, this language doesn't Oh, I see. The opening language is, if no producer responsibility or disinfection is formed, then this type of assessment will be, okay. Right. Which is the same as, or at least very similar to the language that we had in the household hazardous waste EPR.

[Paul Burns (Executive Director, VPIRG)]: Yeah, and you know that a chair under the federal of the federal supermodel has its waste sites, for instance, if responsible parties there don't have to clean up those sites, they face triple standards, triple the costs of cleanup. If EPA has to set in to do the cleanup in that case, you're gonna pay three times the cost of what it costs them to do that. So I'm not even going that high, but I do think something in excess of 10%. Mean, if you're gonna do it, that's great. This never comes into play, but why not have it be a little bit more of a meaningful incentive? My next point is one we've already discussed a little bit, that is the incentive session 1532B. I have it as page 14 lines, four through eight, but I'm not, maybe my copy is a little bit different, but fifteen thirty two B. And this is the agent, the ANR's power to alter the number of redemption points based on the adequacy of redemption service in a given area. So the minimum, again, is the three per count, and we talked about that. I just, I am a little concerned about the room given that could result in something that we don't want to see, which would be for fewer convenient redemption center options for consumers. So we are talking with the agency and others about some language there. And I just think that could be tight. As I say, I think stronger criteria for possible retailer exemptions, including proximity to other redemption centers is important. And I would go, I would have to be pretty tugged. Yes, if you're across the street or if you're within one mile, the secretary could grant an exemption. But honestly, it's not entirely clear here how that, it's not clear at all, how that process could work. So if you have all these brochures, is it just a mad race to request an exemption? And the last one to put in a request is the one that gets stuck running the redemption center? I don't know. And it's not really spelled out here. And just don't want to be in this place like 10 miles. That would perhaps take a lot of retailers out. You think about Burlington, Downtown Burlington and City Market, well they're within 10 miles of redemption center in Winooski. That's probably a dense enough area to have to have one of some sort. But I think the point here is that it deserves a closer look to ensure that we aren't going too far to create convenience for the businesses without considering convenience for consumers.

[Sen. Anne Watson (Chair)]: I mean, you think, just saying out loud, like some kind of criteria based on population density and distance between redemption centers? Because there's a difference between Downtown Burlington versus even Addison County versus North East Cape in terms of just distances.

[Paul Burns (Executive Director, VPIRG)]: Yeah, I think it's, what I've been hearing is the rationale for this. People are typically referring to Chitney County. Oh, this version is already processed. Okay, I get it, but if it's not ready processed, how far away is

[Sen. Anne Watson (Chair)]: basically Don't always refer to Chitney.

[Paul Burns (Executive Director, VPIRG)]: And that's my point is that, you know, that's the problem you want to deal with if you do that with a very tight circle. Otherwise, we really are talking about, I mean all the grocers now, unless they already have an exemption and there aren't that many to do, to take back cans and bottles today. And again, just think I would hate to see this law used become the reason why we end up having fewer, fewer and fewer redemption opportunities. So the point is made here. Okay. So I'm almost done here. I think my last point is that the PRO itself should be a nonprofit organization with board members representing some of the diverse interests that stakeholders have in the Bottle Go program. I would say you could have a redemption center owner on the board of the PRO as an example. There may be situations where as a board member, they would have to recuse themselves from certain decisions about handling fee for their business or something like that, of course. But this happens with nonprofit courts all the time, that people find ways to reduce themselves where But that is I think there's a broad agreement, but I don't think it's gotten into the bill unless I've missed it, that would actually have this be a nonprofit organization. I believe that's the way Maine's is kind of working now and it's at least worth considering, I think. As we have some concerns raised about the power and authority of the PRO, I think that would be ameliorated to some extent by having it be a nonprofit organization.

[Sen. Anne Watson (Chair)]: Is that how many other ones are that we have set up? I think I can't remember. Or paint and Stigdler. I'm I feel like that that sounds familiar. I couldn't say for sure, but that'd be a good Michael Brady question.

[Sen. Ruth Hardy (Member)]: Seems like a lot of runway on this bill. Do you obviously testify in the house? Several times. Okay. Yes.

[Paul Burns (Executive Director, VPIRG)]: But again, this bill, the conversation started in 2025, of course, because you can recall the last bill was passed in 'twenty three vetoed by the governor in 'twenty three. The votes took place in 'twenty four. I think that overrided and succeeded, so that took care of it for 'twenty four. But in 'twenty five, the conversation started in the House environment, but it even carried over to 'twenty six. So when we talk about versions of the bill, there were multiple versions, formal and informal, but as introduced, because it was committee bill, this is the one that he

[Sen. Seth Bongartz (Member)]: was born. Christie Morris standing on Florida, pouring out the bottle of the whistle by the end of the gun.

[Paul Burns (Executive Director, VPIRG)]: Exactly right. Exactly right. And it's done a great job. I think every

[Sen. Anne Watson (Chair)]: buy in that I've been here may have a different version of it.

[Paul Burns (Executive Director, VPIRG)]: I would say there are a number of other points, at least half dozen or more that others have raised, but we are in conversation with, and we'll submit some more testimony around those, but it's not worth the smaller points that we're getting into here now. But on the handling fee, Susan Collins mentioned that there's a timing issue there. I think that's true. It's just that I hope not to face that because if you keep a floor, you don't lose the whole thing. So that's why I didn't focus on that piece. But there are a number of good points raised by others who testified here today, but I'm really grateful that you're gonna hear from redemption center owners several tomorrow because their perspective, think is really the future. Thank you for the opportunity.

[Sen. Anne Watson (Chair)]: Thank you. Appreciate it. Any other questions at this point? And so it sounds like you're also going to follow-up with some written suggestions in it because I also heard language suggestions, which is also very helpful. So great. Happy to have it. Thank you so much. Thank you. Okay. Any thoughts or comments about what we've heard on the model also front this morning? Yes, stuff that we're done. Was Yeah, will say, I'm thinking very much about the timeline moving forward and how short it is. What I'm hearing is that, well, my sense is that we should have a new draft at some point, and we could create something like that in the spirit of like, it's easier to cross things out rather than add things. I don't want to move quicker than we are ready to move, and we're going hear more tomorrow. But I at least want to be other than I'm thinking about getting a new draft of the list based on what we're After tomorrow. After tomorrow. Yeah. So it would be for-

[Paul Burns (Executive Director, VPIRG)]: And we're getting three sets

[Sen. Seth Bongartz (Member)]: of written scriptures. Yeah. Stratum And might And those in front of us, people studying this.

[Sen. Anne Watson (Chair)]: Yeah. It might be helpful for us to have that conversation about what we want

[Paul Burns (Executive Director, VPIRG)]: to make

[Sen. Anne Watson (Chair)]: sure before we actually move forward for that. So if we can look at those, so just to talk about one thing that might be helpful is once we have all those written suggestions, to get lunch counsel in here and walk through the suggestions and see what makes sense, what do we want to do, and, have that be the spark for new to adopt.

[Sen. Seth Bongartz (Member)]: Yeah. Okay. That makes sense.

[Sen. Anne Watson (Chair)]: Okay. Great. Super. Thank you. Sounds okay. Cause you said, center of fact, it sounds like a thing. Okay, great. Okay, super. Now we did have a few folks cancel with us today, so we are running early. I did also have the on the agenda budget, though I'm not sure, or our budget letter, though I'm not sure that we have anything to add or change at this point. We really are only going to be hearing from the PUC about their budget to Lamar, and then we'll need to make some decisions. We can have conversation Friday, I suppose. That's our last day to.

[Sen. Ruth Hardy (Member)]: It does. We could take that's some way to take those three recommendations for change and consolidate them. Mhmm. We could actually have them all on one sheet of paper. For this bill? Yeah. We could get that.

[Sen. Anne Watson (Chair)]: That would be interesting. We've heard Susan Collins submitted her testimony and a brief event can, but still not. Think having them side by side would be helpful because I'd like to see, because they're all a little different and I wonder, you know, I don't know, they all have slightly different angles on the whole thing too.

[Sen. Seth Bongartz (Member)]: Section by section, those there.

[Sen. Anne Watson (Chair)]: Yeah, yes, that is.

[Sen. Seth Bongartz (Member)]: I

[Sen. Anne Watson (Chair)]: think it may be too much to try to consolidate all the recommendations into one document, but I think if we just take our time to walk through it and look at all the suggested changes. I guess I would just say too, like I'm very sympathetic to wanting to protect our retention centers and make sure that they are Don't need fewer. We really got a lot

[Sen. Ruth Hardy (Member)]: of research testing. I have. I just

[Sen. Anne Watson (Chair)]: reached out to one of the line is correct. So just to clarify, we do have four folks on the list for tomorrow, we're going to meet from Redemption Centers. Beverage Baron is in very, there's one from Putney, Lyndonville, and Brattleboro. Open to having more folks testify, that's lovely. These folks came up because they were on the house list. Okay, I just reached out to a redemption center in Bristol. Okay. And if he gets back to me and wants to testify, it looks good. I asked if we have written testimony. Okay. So let's, you know, continue to communicate about that if you have a question. No. If

[Sen. Ruth Hardy (Member)]: they can get the testimony to be done today, I can run through it and I can look at recommendations. You know, I should think at the last paragraph Mhmm. Where I'm gonna change this.

[Sen. Anne Watson (Chair)]: But Okay. So any other thoughts or comments about that from we're hearing from on reduction centers? Okay. I think that will, like walking through this, will probably need to happen next week. Yeah, because Scott, Keith Brady or he couldn't come today. Yeah, there's a few folks who had canceled today who wanted to testify, so.

[Sen. Seth Bongartz (Member)]: We get everything by Friday. Can't imagine.

[Sen. Anne Watson (Chair)]: As, so we've got written suggestions now from three of them, but you know, even as we get some from Michael Noel and from Paul Burns, would love printed copies of all of their written suggestions. Yeah, that'd be great. And I think we're looking to get those potentially by Friday. Sure. We're, yeah, as soon as they. Okay. Sounds good. Super. Okay. And no other comments? We don't have a ton of times on we won't have a ton of time on Fridays for the budget conversation. So one goal could be that for tomorrow, get the scope of what we want to include in our letter, and then Friday we can focus our conversation on prioritizing. Does that sound reasonable as a way to sort of step into that? For just the budget part? For just the budget letter, yeah. Okay, we're having a committee discussion tomorrow after we hear from you? Yes. Yep. So who should be in? And then that'll be the question for Thursday. And then for Friday, the budget will need, how do we order it? Okay. Do we This is still the Yes, and actually, now that I'm thinking about it. Two more people submit. I don't know if you have it on that sheet, but no. It's just fine yesterday. Yes, I do have an updated version which I could send to folks that has the information for Working Lands Coalition and Cert, Learn, Earn. I had included the Day of Safety Fund as a placeholder, but no one's really talked about that. So I'm happy to take that out for now since maybe not really. Well, there's a Dam Safety bill. Yes. And then that has 03/5100 and Well, dam safety bill is really about pilot or those emergency operations.

[Sen. Seth Bongartz (Member)]: And the dam safety fund

[Sen. Anne Watson (Chair)]: The Dam Safety Fund is a fund that we had capitalized last year to help with the repair and removal of dams. But at this point, I don't know that we, again, that was like a placeholder, but I'm again happy to take that out since we have And really not we wanted to hear from Eric Florian, who does his name, the He can't come of course until next week on Wednesday. Yes. But he was for on bill. Yeah. $7.78. Yeah, just, I didn't know if he was on Monday. Yeah. Oh, and we do have, the updated version does have the farm security fund ads as well. So those three things. Well, I think there were two more that Jacob had that were not included here. I think I've got those on the, so. He had something. He had something about the PFOS. PFOS, yes. Yeah. And then, the salt build, but that's our on this side. I think those were the two things. I still remember that there were two things that he, oh, chloride, oh, he had 300,000 for two additional FTEs for the DEC Rivers program to assist with the Blood Safety Act. That was another one that was not here. Everything else that it was the CAFOs and the DEC Rivers program that were the only two that were not captured here.

[Sen. Seth Bongartz (Member)]: What about this false name?

[Sen. Anne Watson (Chair)]: Don't have that on the list. Could do it. So did we take we'll hear about that over 03/25. '25?

[Sen. Seth Bongartz (Member)]: I think we I'm not sure about maybe

[Sen. Anne Watson (Chair)]: You didn't include that in the bill.

[Paul Burns (Executive Director, VPIRG)]: I

[Sen. Anne Watson (Chair)]: don't remember. I don't remember either. Well, I feel like if

[Sen. Seth Bongartz (Member)]: it about a month ago, thought we did.

[Sen. Anne Watson (Chair)]: I feel like if we did, it was not, it was sort of a side issue. It was not a good point. We could, Friday, get a little assessment about the municipal planning agreements, try to put that in before Friday if that's of interest. Is it do they not have more money that's Don't think so.

[Sen. Seth Bongartz (Member)]: It's such an important way to help Mhmm. To help. Mhmm. Mhmm. So without that, it's it's necessary. But I don't know the number. So I just came in because we're looking because I was thinking

[Mike (Michael) Noel (Public Affairs Director, TOMRA)]: Do you

[Sen. Anne Watson (Chair)]: have a sense of who you think might be a good person to speak

[Sen. Seth Bongartz (Member)]: to them?

[Sen. Anne Watson (Chair)]: Okay. Well, let's talk about that because we're running out of runway. But we if I if we could think of who could speak to that and get a little test or BLCT?

[Sen. Seth Bongartz (Member)]: Yeah. Yeah.

[Sen. Anne Watson (Chair)]: Yeah. Could be ACCD. I don't know.

[Paul Burns (Executive Director, VPIRG)]: Could be

[Sen. Seth Bongartz (Member)]: Okay. We could have. What's yeah.

[Sen. Anne Watson (Chair)]: Okay. I'm listening about that. I'm just that's weird. Okay. Are we well, I think we're done. I think we're done. And unless folks have other thoughts or comments on this. So tomorrow, who's in, who's out? Friday, prioritize.