community-based research initiative - bottle bill … vicencio-garaygay, environmental advocate, was...

Community-Based Research InitiativeCollege of Arts and Sciences

Northeastern University

Renewing theMassachusetts Bottle BillConstant Goals, Changing Times

Professor David A. Rochefort, Project DirectorKaitlyn KenneyChristina BertuccioDaniel CabralMelissa MaturoDavid White

June 2003

An independent policy analysisin cooperation withMassachusetts Public Interest Research Group

ContentsPreface and Acknowledgments p. i

A Message from MASSPIRG p. iii

Executive Summary p. 1

1. Introduction p. 5

2. A History of the Massachusetts Bottle Bill p. 6

2.a. Origins of the Idea p. 62.b. Early Legislative Activity p. 82.c. The Referendum Battle of 1982 p. 92.d. Implementation and Revisions of the Law p. 92.e. Standoff p. 11

3. Understanding How the Bottle Bill Works p. 11

3.a. The Deposit/Redemption Cycle p. 113.b. Clean Environment Fund p. 14

4. Impacts of the Law p. 15

4.a. Economic Impacts p. 17

5. Operational Issues and Problems p. 19

5.a. Narrow Spectrum of Beverage Containers p. 195.b. Declining Value of the Deposit p. 195.c. Insufficient Handling Fees p. 205.d. Fraudulent Redemptions p. 205.e. Burdens on Business p. 215.f. Improper Uses of the CEF p. 225.g. Inadequate Program Administration p. 22

6. Current Legislative Proposals p. 23

7. Recommendations p. 26

List of Interviews p. 31

Sources Cited p. 33

Renewing the Massachusetts Bottle Bill i

Preface & AcknowledgmentsThis report results from a project that was undertaken as a cooperative endeavor between

faculty and students at Northeastern University and the Massachusetts Public Interest ResearchGroup.

A spirited movement has emerged in recent years to bring universities and their surroundingcommunities into active collaboration. Growing numbers of students are including communityservice as an integral part of their education, while new links are being forged between the leaders ofacademic institutions and neighborhood groups and agencies in planning local infrastructuredevelopment. Applied research is one of the most natural areas of town-gown collaboration, as datagathering and analysis increasingly are recognized as powerful tools for improving the quality of socialproblem solving and public affairs debate. As stated in a recent forum sponsored by the organizationMassINC, universities seem poised on the verge of a new era of “civic engagement” in which theirconsiderable intellectual resources are being put “in the service of the body politic.”

The project described in this report is part of a community-based research initiative (CBRI)that was established with the support of Northeastern University’s College of Arts and SciencesDistinguished Professor Program. It is the second of what is intended to be a series of studies onquestions of broad public policy significance within the Boston area. Our first report, which wasprepared in cooperation with the Massachusetts Association for Mental Health, Inc., was released inNovember of 2002 and examined the coverage of mental health topics by the Boston Globe andBoston Herald (“Good News, Bad News, and Points of View: An Analysis of Mental Health Coveragein Boston’s Two Major Newspapers”). This research focuses on the origins, development, andimplementation of the Massachusetts “bottle bill,” a program that is currently under review by boththe state legislature and the governor’s office. Although 2003 marks the twentieth anniversary of thebottle bill, the law remains almost as controversial as when it was first proposed, with manycontending claims about its impacts. Our aim in this report is to provide a description andassessment of the law that can help clarify the issues being debated in the political arena. We alsomake recommendations that we believe could improve the bottle bill’s effectiveness as public policy.

This project was carried out as part of a special community research seminar inNortheastern’s Political Science Department during the spring of 2003. The efforts of five studentresearchers—one doctoral student and four upper-level undergraduates—were coordinated toproduce an analysis based on diverse kinds of program data, including government documents,newspaper articles, scholarly studies, consultant reports, legislative testimony, and interviews. Whilethe students each were assigned specific topics to prepare, such as the legislative history of theprogram, operational details of the deposit/redemption cycle, administration of the program, and soon, all of the work was reviewed and revised together. Recommendations for reforming the bottlebill were also formulated by the group as a whole.

I am grateful for having had this opportunity to work with the Massachusetts Public InterestResearch Group and, particularly, for MASSPIRG’s receptivity to an independent analysis based on afresh and comprehensive look at the bottle bill. While sympathetic at the outset to the goal ofprotecting the state’s environment, we could offer no promises about where an assessment of thisspecific law would lead us, or what kinds of recommendations we would be making. At MASSPIRG,Dan Kohler, Assistant Organizing Director, facilitated the initial contact between our group and hisorganization. Iris Vicencio-Garaygay, Environmental Advocate, was our principal contact withMASSPIRG throughout the project, and she was unfailingly knowledgeable and supportive. Janet S.Domenitz, Executive Director of MASSPIRG, also met with us and provided her encouragement.

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For a research project like this to be grounded as it must be in political and programmaticrealities, interviews are a crucial resource. I want to express my appreciation to all those whogenerously shared their time and expertise in talking with us. A complete listing of our intervieweesappears at the end of this report. Not everyone we spoke with will agree with our conclusions andrecommendations. However, we have done our best to make sure that a myriad of viewpoints—frombusiness people, government administrators, environmentalists, recycling experts, and more—arerecorded in this document. Others who also kindly assisted us with information and contacts includePeter Allison, Branch Chief, Commercial Waste Reduction, Massachusetts Department ofEnvironmental Protection, Julie Bender, Administrator, Massachusetts Beverage Container Law,Massachusetts Department of Environmental Protection, Jennifer Gitlitz, Research Director,Container Recycling Institute, Peggy Harlow, Recycling Grant Manager, Massachusetts Departmentof Environmental Protection, and Tim Cahill, Senior Economist, Office of Tax Policy Analysis,Massachusetts Department of Revenue.

At Northeastern University, James Stellar, Dean of Arts and Sciences, has continued to showhis enthusiasm for this community-based research initiative. Likewise, I appreciate the backing ofTim Donovan, Associate Dean of Arts and Sciences, and Denis Sullivan, chair of the Political ScienceDepartment. Michael Dukakis, Distinguished Professor of Political Science, provided valuablecomments on a draft of the report. Chris Bosso, John Portz, Gordana Rabrenovic, and KristenSimonelli, members of the CBRI Advisory Board, made helpful suggestions at a meeting to discussthis project. Amy Richey did an excellent job of formatting the report for publication. She alsodesigned and maintains the CBRI web site (www.cbri.neu.edu). I invite all community groups andagencies in our audience to visit this site to learn about our activities and to propose future researchcollaborations to us.

We welcome all comments.

David A. RochefortArts & Sciences Distinguished ProfessorDepartment of Political ScienceNortheastern University

Renewing the Massachusetts Bottle Bill iii

A Message from MASSPIRGThis year marks the 20 th anniversary of the Massachusetts Bottle Bill, which not only

resulted in a recycling revolution in Massachusetts, but also sparked a group of activists to grow theorganization that is MASSPIRG today – a statewide, public interest advocacy group that works on arange of environmental and consumer issues.

Since the passage of the bottle bill, MASSPIRG has tackled many different environmentalissues. But for several years, a top priority has been the campaign to update the bottle bill. With thedramatic increase since the 1980s of new beverages on the market, it is high time to update the lawand include a deposit on these beverages. For example, bottled water, which is not covered by thebottle bill, is projected to be the most widely consumed beverage in the U.S. by the end of 2003,ahead of beer, coffee, and milk.

When the Community-Based Research Initiative of Northeastern University approachedMASSPIRG for research ideas, we asked them to focus on the bottle bill because of our interest in theissue and the lack of a current, comprehensive resource on the law. We clearly had our own agenda,but understood the independent nature of the Initiative’s research protocol. Students participating inthe Initiative conducted research independently of MASSPIRG, crafting their own set of questions,conducting interviews to get a holistic picture of the bottle bill and related issues, and drawing theirown conclusions about the future of the law.

The ever-increasing generation of solid waste and its impact on the environment and publichealth, combined with dramatically dwindling resources to protect the environment, necessitatesdecisive action at the state level. We knew that whatever conclusions were drawn by the Initiative’sresearch, there would be needed and relevant information brought to light. And now that the reportis complete, we are pleased to recommend it as a document that provides an accurate review of bottlebill history, a balanced examination of the law’s implementation, and a number of recommendationsthat are worthy of consideration by stakeholders and decision makers alike.

Janet S. DomenitzExecutive Director

Renewing the Massachusetts Bottle Bill 1

Executive Summary

The Massachusetts “bottle bill,” enacted in1982, is an anti-litter and recycling measurethat encourages consumers to return theirempty beer and soda containers through useof a $.05 deposit. The program has been verysuccessful in achieving its principal objectives,with nearly 18 billion cans and bottles beingreturned under the law between 1991 and2002. Yet the bottle bill remains controversialamong bottlers, distributors, and retailers.Changes in the beverage market place, as wellas within the operation of the program, alsoindicate a need for updating the law. Somepublic officials, including the governor, viewthe program as a way of generating revenuesto reduce the state’s deficit, although thiswould mean redirecting funds that are amainstay of local recycling programs.

As a contribution to the political debate overthe future of this program, this report tracesthe origins, purposes, and impacts of theMassachusetts bottle bill. Recommendationsare also made for reforming the law and howit is administered.

History of the MassachusettsBottle Bill

The bottle bill in Massachusetts was modeledafter a similar statute that was passed inOregon in 1971. A coalition includingMASSPIRG, the Massachusetts AudubonSociety, League of Women Voters, and othergroups began working toward a law as early as1973, but it would take nine years beforeenactment. Stiff opposition had to beovercome in the form of beverage industryand retail groups who warned about the bottlebill causing widespread negative economicimpacts. These groups also had a strong allyin Governor Edward King, who twice vetoedbottle bill legislation after it was passed by theMassachusetts House and Senate.

In 1982, once the legislature had overridden aveto by King, beverage industry activists

succeeded in placing a question on the stateballot requiring voters to give their approval ofthe new bottle law. Their hopes of repealwere disappointed, however, when the publicendorsed the measure by a vote of 60 percentto 40 percent. Attempts to delayimplementation of the law also failed.

An important change was made to the bottlebill in 1989. The law was amended to makeunredeemed, or unclaimed, deposits theproperty of the state. Beer wholesalers andsoft drink bottlers sued the state, but the StateSupreme Court and Supreme Judicial Courtruled against them. According to legislativeformula, the unclaimed bottle deposits were tobe divided between the state’s general fundand a new Clean Environment Fund (CEF)between Fiscal Years 1990 and 1995; after1995, the entire sum of the “escheat” went tothe CEF.

Understanding How the Bottle BillWorks

The Massachusetts bottle bill placed a $.05refundable deposit on all carbonated softdrinks and beer and malt beverages. Theprogram centers on a cycle of deposits andredemptions that links togetherbottlers/distributors, retail store operators, andconsumers.

In practice, most bottle bill deposits inMassachusetts are redeemed through twotypes of sites, redemption centers and largeretail dealers. Redemption centers arespecialized small businesses brought intobeing by the bottle bill program. They giverefunds for and sort empty beveragecontainers before delivering them tobottlers/distributors. Centers are reimbursedthe original $.05 deposit, plus an additional$.0225 handling fee for each return. Largeretailers generally lease reverse vendingmachines (RVMs) to manage redemptions bytheir customers. RVMs read bar codes on

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containers and provide refunds for allredeemable items that are brands sold in thestore. After the RVMs process returnedmaterials, the leasing company delivers theproduct to bottlers/distributors for payment,or it may itself sell materials that arerecyclable.

Under the 1989 escheat provision,bottlers/distributors must maintain a DepositTransaction Fund for unclaimed deposits.These funds are transferred to the Departmentof Revenue each month. According to law,this money goes into the Clean EnvironmentFund and must be used by the MassachusettsDepartment of Environmental Protection(DEP) for “programs and projects in themanagement of solid waste and forenvironmental protection.”

Impacts of the Law

According to DEP data, from 1991 to 2002an average of 1.5 billion containers per yearwas returned under the bottle bill. Recently,rates of return have fallen, reaching a level of67.4 percent in 2002. As unclaimed depositsrose, so too did the CEF fund, climbing to$35.2 million in 2002.

There is evidence that the bottle bill hassignificantly reduced litter on roadsides,beaches, hiking trails, riverways, and othersettings around the state. One study indicatesthat implementation of the law has alsocontributed to the reduction of glass-relatedinjuries among children. Container depositsare an effective means of encouraging thereturn of beverages consumed “on the go” thatare unlikely to become part of curbsiderecycling.

CEF funds have been devoted to a variety oflocal recycling, composting, and solid wasteprograms since 1989. They have also beenused to support innovative research focusedon developing new end-uses for recycledproducts.

The question of the economic impacts of thebottle bill is a thorny and contentious one.

Bottlers/distributors and retailers cite priceincreases and sales losses. These findings aredisputed by bottle bill proponents. A numberof studies and reports are summarized herethat assess the economics of deposit laws withdiffering conclusions. The message forpolicymakers is an ambiguous one.

Operational Issues and Problems

Based on our research and our conversationswith legislative staff, environmental advocates,bottlers, retailers, redemption centeroperators, municipal recycling coordinators,and other stakeholders, we have identified anumber of concerns about the operation ofthe bottle bill program.

The narrow spectrum of beverage containerscovered by the bottle bill excludes increasinglypopular drinks such as fruit drinks, bottledwater, iced tea, sports drinks, and winecoolers.

The value of the $.05 deposit adopted byMassachusetts in 1982 has eroded over time,reducing the incentive for consumers toredeem their empty containers.

The $.0225 handling fee specified in thebottle bill program is not sufficient to coverthe actual costs of redemption centers andretailers.

Fraudulent redemption of containerspurchased in non-bottle bill states like NewHampshire and Rhode Island costsMassachusetts government an estimated $8.2million and private bottlers/distributors anestimated $3.7 million per year.

The bottle bill imposes burdens on retailers inthe state in such areas as maintenance ofsanitation, loss of sales space, and costlysorting requirements. Bottlers/distributorsmust contend with higher delivery costs andthe management of recycled materials.

A substantial amount of the CEF has not beenused as intended under the law, going insteadto administrative costs inside DEP and other


DEP programs including Hazardous WasteClean-Up. Nor has all of the money accruingin the CEF been appropriated by the statelegislature for use by DEP and local recyclingprograms.

The bottle bill has also been weakened byinadequate administration. The Departmentof Environmental Protection, ExecutiveOffice of Environmental Affairs, Departmentof Revenue, and Attorney General’s Officehave not coordinated effectively theirrespective responsibilities under the law.Monitoring and enforcement of the bottle billhave also been somewhat lax.

Current Legislative Proposals

As of April 2003, nine bills had been filed inthe state legislature to revamp, or eliminate,the Massachusetts bottle bill. GovernorRomney also made a proposal as a rider in his2003-04 budget recommendations that wasrejected by lawmakers. Key features of theseten alternatives are compared and contrastedin this report. Most recently, in early June,Senator Nuciforo (Democrat, Pittsfield)introduced a bill calling for expansion in thekinds of containers encompassed by the law,an increase in handling fees, and a smallreimbursement to distributors for every unitredeemed.

Recommendations

We recommend the following twelve actionsbe taken as legislative and administrativereforms of the bottle bill program:

§ Update the Bottle Bill To IncludeBottled Water, Juice and VegetableDrinks, Sports Beverages, Iced Tea, andWine Coolers.

§ Maintain the Current $.05 Deposit, witha $.15 Deposit for Wine and LiquorBottles.

§ Raise the Handling Fee from $.0225 to$.0275.

§ Improve Anti-Fraud Measures.

§ Provide Assistance to Business.

§ Maintain the CEF but with a NewAllocation Formula (1/2 local recyclingprograms, 1/6 DEP administrative costs,1/6 low-interest loans to business, 1/6general revenues).

§ Mount a Bottle Bill Educational Effort.

§ Encourage Innovative RecyclingExperiments.

§ Increase the State’s AdministrativeCommitment to the Bottle Bill Program.

§ Require an Annual Bottle Bill Report.

§ Request a New State Auditor’s ReportThree Years after Bottle Bill Expansion.

§ Encourage More Research on the BottleBill.


1. IntroductionTwenty years ago, the Massachusetts

bottle bill was adopted amid great politicalcontroversy. Despite the law’s resoundingsuccess in meeting its primary objectives,today that controversy continues. Many ofthe original issues have persisted, with certainopponents maintaining their vehemence fromone legislative session to the next. Newdimensions and stakeholders have also cometo the fore, a reflection of the passage of timeand evolution of the program.

Although complex in some of itsoperational details, the design of the state’sbottle bill is based on a few straightforwardprinciples. Discarded cans and bottles are amajor source of trash that defiles ourcommunities while wasting precious naturalresources and energy. Consumers can beencouraged to recycle these containersthrough a small monetary incentive, ordeposit refund, for every beverage purchased.As the beverage industry and the public learnto conserve, new habits will take root, linkingthe two groups in a collaboration yielding far-reaching environmental and economicbenefits.

To a remarkable extent, this is just whathas happened in Massachusetts. Accordingto the state’s Department of EnvironmentalProtection (DEP, 2003), nearly 18 billioncans and bottles were returned by consumersunder the bottle bill from 1991 to 2002.Although the percentage of items redeemedhas been falling in recent years, this is astaggering amount of recycled material.Simply stated, the bottle bill represents ananti-litter effort of unprecedented scope, andit provides cost savings to taxpayers throughreduced container collections in local curbsiderecycling. It is also a boon to theenvironment due to the diversion of wastefrom public landfills and incinerators and dueto the reductions in energy use, toxic releases,and greenhouse gas emissions associated withproduct manufacturing from virgin materials(Gitlitz, 2002; see, also, www.container-recycling.org, 2003).

Because of a key change made in 1989,the bottle bill serves the environment in otherways as well. In that year, legislators decidedthat unclaimed deposits belonged to the stateand should be devoted to solid wastemanagement and environmental protectionactivities. Establishing a new kind ofsymmetry in the program, consumers whoneglect to return redeemable containersbecame contributors to a Clean EnvironmentFund. Each year, millions of dollars are paidout of this fund for local recycling,educational, and clean-up projects.

In 2003, however, the Massachusettsbottle bill faces a variety of circumstancesmaking for an uncertain future. For onething, the law has become outdated in itsfocus on soda and beer containers as consumerpreferences have shifted toward fruit and sportdrinks, bottled water, and iced tea. Due tothe effects of inflation, financial incentives inthe program have also declined, both forconsumers who must be motivated to reclaimtheir deposits and for retailers and redemptioncenters who receive small handling fees forfacilitating the redemption process.Meanwhile, other forms of recycling havebecome common across the state’smunicipalities, giving rise to disagreementabout the relationship between the bottle billand these programs.

Perhaps most significant, today’s bottlebill debate occurs against a backdrop ofserious malaise in the state’s finances.Following years of expenditure growthcombined with repeated tax reductions,Massachusetts officials have struggled to fill a$3 billion budget gap for fiscal year 2004(Klein, 2003). The fact that the bottle bill isrevenue-generating for the state has not goneunnoticed in this environment. A number ofpolicymakers, including, most notably, thegovernor, have proposed redirecting bottle-billdollars from environmental programs togeneral revenues. This elimination of CEFmunicipal grants at the same time that generalstate aid to cities and towns is being cut wouldhit hard on the local level.


The aim of this report is to provide aresource for understanding the origins,purposes, and impacts of the bottle bill at atime when it is undergoing legislative reviewand possible reformulation. Topics coveredinclude:

§ A brief history of the political conflictsurrounding enactment and implementationof the bottle bill

§ A description of how the bottle bill works,including the parts played by consumers,beverage manufacturers and distributors,retailers, and redemption centers

§ A summary of economic and other impactsof the law

§ An analysis of operational problems

§ A comparison of the many bottle billamendments and proposals now underexamination in the state legislature

§ A list of recommendations for reforming thebottle bill program

The proposals we are putting forward aremade on behalf of no particular constituencyor group. Rather, they represent conclusionsdeveloped through independent research thatwe believe could lead to the improvement ofpublic policy.

At the outset, it must be asked: Is there acredible alternative to the bottle bill inMassachusetts? The answer is “yes,” on paperat least, although it would involve anambitious reorientation of the state’s recyclingsystem. By improving and expandingresidential recycling in the state, incombination with new initiatives to collectcontainers of beverages consumed away fromhome, it should be possible to substitute atruly comprehensive program of solid wastemanagement for a reformed bottle bill. Thisis the thrust, for example, of one legislativeproposal backed by the Massachusetts FoodAssociation.

Yet this plan would require a substantialincrease in public and private funding forrecycling during the transition period after thebottle bill has been eliminated. Also veryoptimistic is the scenario for how such acomprehensive program would be sustainedonce transition funding is no longer available.At a time when the legislature is hard-pressedto find money to support existingcommitments—let alone bold newundertakings—an untested overhaul ofrecycling across the state seems very unrealisticpolitically. Thus, the question remains, howcan the current bottle bill be used to its bestpotential?

In studying this topic, we often heardMassachusetts described as a national leader inthe environmental movement. To the extentthat our proposals reflect a particular set ofvalues, it is the belief that this position ofleadership is one the state should strive topreserve. Making sound decisions for thebottle bill program consistent with theconstraints of current fiscal conditions iscrucial for accomplishing that goal.

2. A History of theMassachusetts Bottle Bill

2.a. Origins of the Idea

The nation’s first “bottle bill” wasadopted in Oregon in 1971. (An earlier lawpassed by Vermont in 1953 was laterrepealed.) The act placed a refundable depositof $.05 on containers of carbonated softdrinks and malted beverages. How theOregon bill became law is a true tale of theinfluence of the “little man” in Americanpolitics, as an eccentric outdoors enthusiastnamed Richard Chambers teamed withprogressive governor Tom McCall to clean upthe litter that was fouling their state’s beaches,hiking trails, and roadsides (Walth, 1994).

The idea for the law arose whenChambers read a newspaper item about theproposed banning of throwaway bottles and


cans in British Columbia. What followed wasa three-year campaign to convince lawmakersof the seriousness of Oregon’s own trashproblem and the practicality of a bottle-billsolution. National bottlers and brewers hadshifted to the use of nonreturnables afterWorld War II when steel and aluminumproduction boomed. Throwaway containersalso gave national beverage distributors anadvantage over small local beverage operationsby saving large companies the cost of long-distance return shipments of their bottles and

cans. The Oregon proposal sparked vigorousopposition from such groups as the Seven-UpBottling Company, The Brewers Institute,Glass Bottle Blowers Association, andReynolds Metals, who spent generously todefeat the legislation. When House Bill 1036passed in Oregon in May of 1971, it was asign of the persistence of the “ragtag” coalitionof supporters put together by Chambers andMcCall, as well as the emergence of a growingconservation and environmental movement inthe United States.

Table 1Massachusetts Bottle Bill Chronology

1971 Oregon becomes the first state to enact bottle bill legislation.1973 A coalition of bottle bill supporters, known as the Committee for a Massachusetts Bottle

Bill, is formed in an attempt to establish a bottle bill in Massachusetts.1976 A bottle bill initiative is placed on the Massachusetts ballot in November, but it is defeated

by less than 1 percentage point.1977 The bottle bill gains majority support in the Massachusetts House of Representatives, but

fails in the Senate.1978 As in 1977, majority support is gained in the House, but the bottle bill is once again

defeated in the Senate.1979 The bottle bill finally clears both houses, but is met with a veto by Governor Edward King.1981 The bottle bill again succeeds in both houses but is vetoed by Governor King in October.1981 An effort to override Governor King’s veto develops, and the veto is ultimately overridden

by both houses in November.1982 A campaign to repeal the bottle bill is spearheaded by a coalition of several beverage

industry-supported groups, which leads to a bottle bill referendum question being placedon the November ballot.

1982 Massachusetts voters approve the bottle bill by the margin of 60 percent to 40 percent.1983 The bottle bill is implemented on January 17, 1983.1983 Mass Container Recovery, Inc., a company formed to serve as the sole collection agent

for the majority of beer containers sold in Massachusetts, is brought to court by the statefor allegedly attempting to monopolize bottle collections. The Massachusetts SuperiorCourt rules in favor of the state.

1989 An escheat provision added to the Massachusetts bottle bill makes unredeemed, orabandoned deposits, officially the property of the state, to be placed in an account knownas the Clean Environment Fund.

1990 EOEA approves handling fee increase to $.03 then rolls it back to $.0225.1991 State Supreme Court affirms escheat provision, ruling against beer wholesalers and soft

drink bottlers who argued it was unconstitutional.1993 Supreme Judicial Court affirms decision on escheat provision.


National beverage and retail companieswho opposed Oregon’s bottle bill feared itwould be a catalyst inspiring similar legislationacross the country (Walth, 1994). In fact, tenstates to date have followed Oregon’s lead byenacting their own versions of deposit-returnprograms, and a number of others areconsidering bottle bill proposals (Gitlitz,2002, p. 25). Massachusetts was among thefirst to put this issue on the political agenda,although it took several years for legislation tobe approved. Largely unknown or forgotten,this history of the bottle bill’s adoption intoMassachusetts law is worth reviewing for itidentifies the forces mobilized by this issuewhile illustrating how perceived benefits andrisks of the program have been framed. (Seechronology of the law in Table 1.)

2.b. Early Legislative Activity

The history of the bottle bill inMassachusetts can be traced to 1973, whenMASSPIRG, the Massachusetts AudubonSociety, Friends of the Earth, and the Leagueof Women Voters formed a coalition knownas the Committee for a Massachusetts BottleBill (www.bottlebill.org/usa/states-massachusetts.htm, 2003). After several failedlegislative attempts, visible progress finally wasmade in 1976 when a bottle bill proposalcame within one vote of clearing committeeand reaching the floor of the legislature.Working in conjunction “with dozens ofother statewide and local organizations,” thecoalition placed a bottle bill initiative on theballot in November, 1976. Opposition wasstiff, however, especially from two groupsbacked by the beverage industry named theCommittee to Protect Jobs and Use ofConvenient Containers. The twocollaborated on a $2 million campaign thatsucceeded in defeating the bottle bill,although by a margin of less than one percent.

In 1977 and again in 1978, bottle billproposals garnered majority support in thestate House of Representatives then failed inthe Senate. In 1979, the bill finally clearedboth houses but was quickly met with a vetoby Governor Edward King. As an alternativeto the bottle bill, King established the

Corporation for a Cleaner Commonwealthwhich, funded by a coalition of businesses,hired youths to pick up litter. Bottle billproponents saw this as a diversionary tactic.

Once again in 1981, bottle bills clearedthe House and the Senate. This time,Governor King hesitated before responding tothe measure. A serious split developed withinKing’s own cabinet as State Economic AffairsSecretary Geroge Kariotis and StateEnvironmental Affairs Secretary John Bewickclashed over merits of the law. In the end,King sided with his economic advisor andexercised his veto a second time, calling thebill an embodiment of “everything that iswrong with big government” (Bradlee, 1981a,p. 1). The governor cited an increasedfinancial burden on families and negativeeffects on the state’s economy as reasons forhis action.

Immediately following King’s veto, anoverride effort took shape in the House ofRepresentatives. Intense lobbying on bothsides filled the short time betweenannouncement of the governor’s veto and theoverride vote. A call-in campaign, organizedprimarily by MASSPIRG, appeared to have asignificant effect on the outcome of thecontest and the override passed (Bradlee,1981b). Less than a week later, the Senatefollowed the House’s example. The bottle billbecame law on November 16, 1981 (Bradlee,1981c).

Officially titled “An Act Providing forEconomic Incentives For Consumers ToReturn Used Beverage Containers and ToEncourage the Conservation of Materials andEnergy through the Recycling and Reuse ofSuch Containers,” Chapter 571 of the Acts of1981 added seven new sections to Chapter 94of the General Laws of Massachusetts:

Section 321 defined specialized terms underthe law.

Section 322 established the refund value of$.05 per eligible container ($.10 for largecapacity containers but this was dropped in1983).


Section 323 set out the process of deposit andredemption.

Section 324 prohibited plastic rings or othernon-biodegradable holding devices forbeverages.

Section 325 discussed labeling of refundvalues on containers.

Section 326 vested administrative andregulatory authority under the law to theSecretary of Environmental Affairs.

Section 327 specified civil penalties forviolations of the bottle bill law.

Reflecting earlier arguments about the bill’spotential harm to employment in the state,this last section also created a special categoryof “bottle bill impacted persons,” referring toanyone who lost employment with a bottler in1983, and made them eligible for expandedunemployment benefits and job retraining.

2.c. The Referendum Battle of1982

Before most citizens of Massachusetts hada chance to become familiar with the details oftheir new bottle return law, beverage lobbyistsbegan gathering signatures for a public vote torepeal the measure. Among those leading thepush was the Massachusetts Beverage Industryand Labor Committee (Boston Globe, 1982a).After a legal skirmish over fraudulentsignatures in front of the State Ballot LawCommission, a petition was placed on theballot as Question 4 (Boston Globe, 1982b).Voters were asked to indicate whether theyapproved of the new law “regulating bottlesand cans” based on a brief summary of thestatute.

A heated political battle ensued. In July,soft drink manufacturers and conveniencestore owners announced they would form acoalition to launch an advertising campaignaimed at defeating the new law. Later,according to a Globe editorial writer, abottling industry group calling itself the Voter

Education Committee was assisted by “well-paid political consultants” in mounting a mailcampaign. Their message was that the bottlebill would “raise taxes, eliminate jobs, increasewater use, create health hazards, and impose aburden on consumers” (Boston Globe, 1982c,p. 18).

In October, community leaders fromdifferent parts of Boston held a “unityconference” for the bottle bill attended bythree Boston mayoral candidates and severalstate senators and representatives (Bradlee,1982). Numbered among bottle billsupporters across the state were teachers,senior citizens groups, and municipal officials,in addition to environmentalists. MASSPIRGinitiated a door-to-door campaign todistribute literature in the final weeks leadingup to the vote. Secretary of EnvironmentalAffairs John Bewick asked voters to supportthe bottle bill and “wage an all-out war onlitter and change the course of our throw-away society” (Boston Globe, 1982d, p. 24).

On November 1, 1982, Massachusettsvoters chose to keep the bottle bill by the largemargin of 60 percent to 40 percent. After astruggle dating back to the early seventies, thelaw finally was cleared for implementation,beginning January 17, 1983.

2.d. Implementation andRevisions of the Law

The repeal campaign quickly gave way,however, to efforts to slow implementation ofthe bottle bill. Supported by Pepsi Cola andother leaders of the anti-bottle bill movement,Senate Bill 1889 was introduced to preventthe law from taking effect until October 1,1983. One industry spokeswoman warned of“‘chaos’ if attempts were made to implementthe law on the current schedule” (Lockman,1982, p. 28). Another supermarket executiveadmitted bluntly, “We thought we were goingto win. I don’t think anyone in this businesshas done a darn thing to get ready for it”(Boston Globe, 1982e, p. 31). Bottle billproponents pointed out, however, that whenthe law initially was passed, its


implementation date had been set 14 monthsahead to allow businesses to adapt. One staterepresentative summarized the view of manyof his colleagues in saying, “Who’s responsiblefor the claimed need for a crash program? It’sthe industry, who tried to delay and scuttlethe program. They brought the problems onthemselves” (Boston Globe, 1982e, p. 31).Lawmakers defeated the proposed delay,determining that the program wouldcommence in January as planned.

Implementing regulations for the bottlebill were published by the Executive Office ofEnvironmental Affairs on December 16, 1982(301 CMR 4.00-4.09). The regulationshewed closely to the law, going into somewhatmore detail on such matters as the labeling ofrefunds on containers, the obligations ofdealers, distributors, and bottlers in theredemption process, and the limitedcircumstances under which bottle returnscould be refused due to their condition. Nearthe end of the 1982 legislative session, aproposal was introduced in the Senaterequiring distributors to return unclaimedbottle deposits to the state (Boston Globe1982f). Disagreement arose, however, overuse of the money, called “escheatage,” withsome legislators seeking to strengthen thestate’s student loan and scholarship programand others hoping to earmark it for elderlyprograms. Under intense pressure fromlobbyists for the bottlers, the proposal wasdefeated.

Several unanticipated issues surfaced inthe bottle bill’s early days. A case in point wasthe operation of Mass CRInc., or ContainerRecovery Inc. (Mohl, 1983a). The companywas formed in late 1982 to serve as the bottleand can collection agent for wholesalers sellingapproximately 63 percent of the beer in thestate. Wholesalers had hoped to use MassCRInc. to increase the efficiency of picking upempties and generate savings through bulkcollections. Attorney General Francis X.Bellotti filed suit in March of 1983 chargingthat the company had been formed bywholesalers to “fix, raise, maintain andstabilize” the price of beer in the state (Mohl,1983b, p. 1). The suit also stated that

formation of the company monopolized bottlecollections. The Massachusetts SuperiorCourt found for the state in all major aspectsof the case, ruling that wholesalers could notforce beer retailers to make their returnsthrough Mass CRInc. (Harvey and Mohl,1983).

Some retailers violated the bottle bill bylimiting hours during which returns would beaccepted or by requiring containers to bewashed out by consumers (Lehman andLockman, 1983). Numerous citizenscontacted the state’s Environmental AffairsOffice complaining about vending machineswithout posted information telling customerswhere to return containers. State officialsattributed such problems to a mix ofignorance and outright defiance of the law,and they worked to disseminate informationabout the program while cracking down onthe worst abuses.

In 1989, Massachusetts added an escheatprovision to the bottle bill. This amendment,which was implemented starting in 1990,made unredeemed, or abandoned, depositsofficially the property of the state. Revenuegenerated from the gathering of all unclaimeddeposits would now be placed in a “dedicated”account known as the Clean EnvironmentFund (CEF). Beer wholesalers and soft drinkbottlers sued the state, attacking the escheatprovision as unconstitutional and anuncompensated confiscation of their property.In 1991, the State Supreme Court decided thecourt case of Massachusetts Wholesalers ofMalt Beverages, Inc. vs. Commonwealth infavor of the state. The Supreme JudicialCourt affirmed the decision in 1993, writingthat Malt Beverage and Soft DrinkAssociation members were not entitled tounclaimed deposits because these fundsbelong to the “consumer until they escheat tothe Commonwealth” (Supreme JudicialCourt, 1993). According to legislativeformula, unclaimed bottle deposits were to bedivided between the state’s general fund andthe CEF between Fiscal 1990 and 1995; after1995, the entire sum of the escheat went tothe CEF.


Facing rising costs, redemption centersbegan calling for an increase in the $.02handling fee under the bottle bill during thelate 1980s (Massachusetts Association ofRedemption Centers, 1997). The ExecutiveOffice of Environmental Affairs agreed to a$.03 fee in 1990 only to see bottlers anddistributors launch a major protest against it.The increase was rolled back to one-quarter of$.01, fixing the new handling fee at $.0225per container.

2.e. Standoff

Recent legislative sessions have seencontinued debate over the bottle bill.Environmental groups argue for updating thebill to reflect consumers’ shifting tastes towardnon-carbonated beverages. Blocking such anexpansion have been beverage and retailgroups, who voice the familiar refrain that itwill “cost jobs, create sanitary problems, pushprices up, and bankrupt small businesses”(Boston Globe, 1997, p. A16). Yet die-hardopponents of the bottle bill have had nosuccess in their persistent attempts toeliminate the program.

Redemption centers want to increasehandling fees, saying it is unaffordable tooperate with the existing allowance.Dramatizing their cause, some have withheldfull refunds to consumers, returning only fourout of the five cents (Mohl, 1997). Othershave tried to organize a boycott byredemption centers and consumers againstbeverages in glass bottles, which require morelabor and storage space in their operations(Kessel, 2003).

All such legislative and politicalmaneuvering has amounted to little, however.Aside from the small increase in handling feesin 1990, the only substantial change in thebottle bill since its passage remains the escheatprovision and creation of the CEF in 1989.In part, this stalemate reflects a deadlock ofpolitical forces, but it also may be attributedto a relative lack of interest in this issueamong top political leaders in the state.When Governor Romney made his proposal

to revamp the program in March of 2003,that situation of inattention changedsuddenly, and a coalition of bottle billproponents has renewed its struggle to updatethe law with the support of a range oflegislators and citizens groups.

3. Understanding How theBottle Bill WorksSimilar to the programs of other states,

the bottle bill in Massachusetts centers arounda cycle of deposits and redemptions that linksconsumers and various business interests.State government supervises and regulates thiscycle. It is also the recipient of funds that aregenerated whenever the deposit/redemptioncycle is not completed. Figure 1 depicts themain steps of this cycle.

3.a. The Deposit/RedemptionCycle

The Massachusetts bottle bill placed a$.05 refundable deposit on all carbonatedbeverage containers. The process of placingdeposits and later redeeming the money isused as an incentive for consumers to recycle.The principal actors involved in this process,and their legal designations under Section 321of the bottle bill law, are as follows:

Bottler – any person who fillsbeverages to be sold to a distributoror retail dealer.

Distributor – any person who sellsbeverages to a retail dealer. Thisincludes bottling companies whodistribute their own products ratherthan contracting with a distributor.

Dealer – any person selling beverages.This includes, for example, grocers,liquor stores, convenience stores, andvending machine operators.


Consumer – anyone who purchases aredeemable beverage and pays the$.05 deposit at time of purchase.

The deposit/redemption cycle beginswhen a bottler/distributor places the $.05deposit on containers it sells to retail dealers.The dealer, or retailer, in turn, charges this$.05 deposit to consumers for each beveragecontainer purchased. When the consumerreturns the empty beverage container, he or

she will collect the $.05 deposit. Under theMassachusetts bottle bill, all retailers sellingredeemable beverages must accept emptycontainers for a deposit refund. For the laborthat has been put into collecting andreturning their containers,bottlers/distributors must pay a “handling fee”of $.0225 for each return received.

Figure 1The Deposit/Redemption Cycle

Sources: www.nvtech.com www.dnr.state.wi.us/org/cea/publications/clipart


In practice, most container deposits inMassachusetts are redeemed through twotypes of sites. First are “redemption centers,”or specialized small businesses defined underthe bottle bill statute for the purpose ofredeeming empty beverage containers.Second are large retail dealers, such as grocerymarkets and some liquor and conveniencestores, which often give consumers access to“reverse vending machines.” The redemptionprocess differs according to these locations.

Redemption centers may be locatedadjacent to liquor stores or, in many cases,exist independently. A redemption centersorts all beverage containers it receives bybrand, size, color, height, and type (aluminumcan or glass bottle). Once sorting is complete,the redemption center delivers emptycontainers to the appropriatedistributor/bottler and is reimbursed theoriginal $.05 deposit plus an additional$.0225 handling fee for each return.Redemption centers are required to registerwith the Department of EnvironmentalProtection and must maintain monthlybookkeeping of how many beveragecontainers are accepted and redeemed. Inorder for the consumer to redeem his or herdeposit at a redemption center, a beveragecontainer must be in good shape and capableof holding liquids. This means bottles cannotbe broken or chipped, and aluminum canscannot be crushed or pierced.

Redemption centers are beneficial becausethey increase the ease with which consumerscan return their containers. Massachusetts,unlike most states, generally does not allowbeer to be sold in supermarkets. Since the lawrequires retailers to refund beverage depositsonly for the brands they sell, opportunities arevery limited for consumers to redeem beer andsoda containers at a single retail site.Redemption centers accept all containers.They also place no limit on the number ofcontainers per person. Retailers, by contrast,need not accept more than 120 cans or 5 casesof empty containers per customer.

Reverse vending machines (RVMs) offeran automated method for accepting empty

beverage containers and refunding thedeposits. RVMs are generally located insupermarkets that have a large volume ofreturns. Under the bottle bill, dealers mustaccept containers “of the type, size and brandsold by the dealer within the past sixty days”(Massachusetts General Laws, chap. 94, sec.323b). The RVMs operate by reading barcodes on containers, using special recognitiontechnology to determine if the container isredeemable and if the beverage brand is soldin the store. If a container is accepted, theRVM refunds the consumer $.05 percontainer. Inside the RVMs, emptycontainers are processed by color (for glass)and by brand (for the distributor).Additionally, the material is crushed,flattened, or broken to save space. Allcompacted material is stored in bins at thebottom of the machine, which must beemptied periodically depending on thevolume of returns.

Two main companies in the Northeast,Tomra and Envipco, provide reverse vendingmachines. Tomra has the dominant share ofthe market in Massachusetts (www.tomra.no,2003). A Norwegian-based company, Tomrabegan operations in Europe with the purposeof recycling refillable bottles. It thenbranched out to North America and SouthAmerica. In Massachusetts, RVMs are leased,with Tomra providing the maintenanceservices. Generally, retailers use the handlingfees they receive for collecting returns as thefunding source to lease RVMs. RVMs offermany benefits to retailers in thedeposit/redemption cycle, including exchangeefficiencies, economies of space, and reducedmanual labor.

RVMs play an important administrativefunction in processing bottle and can returnsin Massachusetts by keeping computerizedrecords of the number of containers redeemedand the amount of money refunded. Tomraalso makes third-party pick-ups of emptybeverage containers from retailers, processingor baling collected material on behalf ofbeverage distributors. Distributors pay Tomrafor these services, in addition to reimbursingthe company for collected items. Under some


contracts, Tomra itself sells recyclablematerials and credits the distributor’s accountfor the value.

3.b. Clean Environment Fund

Under the state’s original bottle bill,bottlers/distributors kept all abandoneddeposits. The escheat provision of 1989directed abandoned deposits into the state’sClean Environment Fund (CEF). This fundis under the administration of the Departmentof Environmental Protection, with theDepartment of Revenue overseeing thetransfer of abandoned deposits frombottlers/distributors to the CEF.

The escheat provision requires allbottlers/distributors to maintain a DepositTransaction Fund for abandoned deposits. Bythe 10 th day of every month, thebottler/distributor must file a report with theCommissioner of Revenue detailing theprevious month’s transactions regardingnumber of deposits issued and number ofdeposits redeemed. By the last day of themonth, every bottler/distributor places all

abandoned deposits into the DepositTransaction Fund.

The Department of Revenue (DOR) isresponsible for completing an annual report ofbottle bill activity. In particular, thedepartment is required to maintain records ofbottle distribution, returns, andabandonment, and it regulates thosebottlers/distributors who do not comply withthe obligation to provide monthly reports andpayouts of unclaimed deposits. If abottler/distributor fails to pay the Departmentof Revenue for abandoned deposits, thecompany must pay interest of 1.5 percent onthe amount for every month it is late. For anabsolute failure to pay, a bottler/distributorfaces fines and penalties such as liens onproperty.

The primary objective in establishing theCEF was to ensure that any money generatedfrom the bottle bill would be devoted to“programs and projects in the management ofsolid waste and for environmental protection”throughout the state (Massachusetts GeneralLaws, Chap. 94, Sec. 323). Each year, CEFmoney must be appropriated to the Executive

Figure 2 Trends in Bottle Bill Returns

0

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Figure 3Bottle Bill Return Percentages

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Office of Environmental Affairs (EOEA) andthe Department of Environmental Protectionby the legislature when a final state budget ispassed. Both EOEA and DEP must act inaccordance with general specifications madeby the legislature regarding allocation of CEFfunds.

4. Impacts of the LawRedemption activities provide the most

directly measurable impacts of the bottle bill.Figure 2 shows trends in bottle bill returnsfrom 1991 to 2002 (Department ofEnvironmental Protection, 2003). Thenumber of bottles collected under theprogram ranged from 1.3 billion (1992) to1.7 billion (1995) during this period, with anaverage of 1.5 billion containers per year.

Rates of return are calculated as thepercentage of all beverages with depositsturned in for a refund. As seen in Figure 3,this number rose during the early part of theperiod but has fallen over the past severalyears.

Deposits abandoned by consumersrepresent the surplus revenues generated bythe program. Figure 4 shows that, afterfluctuating in the early 1990s, the moneyfrom unclaimed deposits rose sharply during

the late 1990s and early2000s, reaching $35.2million by 2002.

The bottle bill isresponsible for a largeproportion of all containerrecycling in the state.According to theDepartment ofEnvironmentalProtection, 66 percent ofthe 101 thousand tons ofglass, plastic, andaluminum containersrecycled in 1992 wasattributable to theprogram (cited in

Friedland and Perry, 1995, p. 1). The impactof the bottle bill is greatest in communitieswithout curbside recycling programs and inlarge cities where curbside programs are costlyto maintain and expand.

A variety of clean-up efforts indicate thatthe bottle bill has significantly reduced litteron roadsides, beaches, hiking trails, riverways,and other settings around the state (Friedlandand Perry, 1995). Two recent projects areespecially timely. On April 12, 2003, theMassachusetts Riverways Program organized aclean-up of Charles River near the HatchShell and the Metropolitan DistrictCommission’s Ice Rink in Nonantum.Volunteers removed all containers from asample of trash collected that day and dividedit into nonreturnable and returnable items.The ratio of the former to the latter was morethan 4 to 1 (Cohen, 2003a). Another clean-up was undertaken on Earth Day, April 26,2003, at four sites in Worcester (a wildlifesanctuary, large parking lot, public park, andreservoir). Again, the ratio of nonreturnableto returnable containers was slightly morethan 4 to 1 (Cohen, 2003b). Given thatdeposit containers currently account for three-quarters of beverage market sales inMassachusetts, these data strongly suggest thebottle bill has made it much less likely forbottles and cans covered by the law to end upas trash fouling the environment.


A public health effect of the bottle billwas highlighted by researchers affiliated withHarvard University who tracked emergencyroom visits by children with lacerations beforeand after the start of the program (Becker,Moore, and Wise, 1986). Glass-relatedlacerations occurring outside of the homedeclined sharply. While this was not acontrolled study, the researchers concludedthat, among other possible factors, theimplementation of container recyclinglegislation was associated with the reductionof glass-related injuries.

Since the bottle bill, as amended, isresponsible for the creation and maintenanceof the state’s Clean Environment Fund, CEFactivities provide another indicator ofprogrammatic impact. Approximately $30million in CEF funds have been used for localrecycling, composting, and solid wasteprograms since 1989 (Smith, 2003). A majorportion of this amount has been allocatedthrough the Department of EnvironmentalProtection’s Municipal Recycling IncentiveProgram (MRIP), a performance-based grantto help cities and towns meet waste banregulations and waste reduction goals set bythe state. Another CEF grant program

subsidizes equipment and technical assistancefor municipal recycling. In addition, CEFdollars have funded innovative research inMassachusetts focused on developing newend-uses for recycled products. For example,the Chelsea Center, a nationally recognizedprogram at the University of Massachusettsdevoted to research and education on the useof recyclables by manufacturers, has beensupported, in large part, by CEF funds.Recent cuts in CEF appropriations, however,have jeopardized such activities. MRIP is nowbeing funded on a half-year only basis whilethe Chelsea Center has announced its closuredue to lack of funding(www.chelseacenter.org, 2003).

In the political debate surrounding bottlebill legislation, some have argued that thegrowth of municipal recycling makes thebottle bill unnecessary. At times, the bottlebill has been portrayed as in conflict with, orredundant of, recycling on the local level. Tothe contrary, our information underscoreshow intertwined the bottle bill and municipalrecycling have become in Massachusetts. Thebottle bill diverts thousands of tons of refusefrom the local recycling stream. Althoughonly a small percentage of total municipal

Figure 4Unclaimed Deposits from the Bottle Bill

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solid waste, this material represents the fourthlargest category of products and packaging inthe waste stream and approximately half of alltypes of litter nationally (Friedland and Perry,1995; Container Recycling Institute, 2003).

The bottle bill also funds equipment,staff, and innovative recycling, reuse, andpublic education activities that are essential tomunicipal recycling programs. Incombination, these effects are so substantialthat one recycling coordinator we spoke withquestioned whether cities and towns couldmeet future state waste reduction goals in theabsence of the bottle bill. Residential curbsiderecycling programs do a particularly poor jobof capturing beverage containers that arepurchased “on the go” away from home.Thus, despite the increased number of suchprograms nationally, the wasting of aluminumcans has been increasing (Gitlitz, 2002). Thebottle bill has been a key element ofMassachusetts’ multifaceted recycling strategyfor the past two decades. With statepolicymakers tightening funding formunicipal recycling initiatives, it seemsdestined to continue to play this role.

4.a. Economic Impacts

The question of the economic impacts ofbottle bills is a notoriously thorny andcontentious one. As we have seen, predictionsof lost jobs, higher prices, higher taxes, andbroad economic burdens have been a part ofanti-bottle bill rhetoric for more than thirtyyears. Actual evidence related to this topic ismixed and of inconsistent quality from anevaluation-research standpoint.

Soft-drink industry representatives inMichigan have claimed that the net costs ofcomplying with that state’s beverage containerlaw exceeded $20 million in the first fifteenyears of the program (Dammann, 1993).Here in the Commonwealth, theMassachusetts Food Association testified tothe Joint Energy Committee that bottle billcompliance “forced an increase in prices for allproducts being sold to the consumer” (BottleBill Task Force, 2000, p. 3). To ourknowledge, the amount of that increase has

never been carefully documented. Part of thedifficulty, explains the Massachusetts FoodAssociation, is that bottle bill costs were“absorbed regionally” in the food industry,rather than in Massachusetts alone.

Data given to us from the MassachusettsAssociation of Malt Beverages do show adecline in beer sales in Massachusetts in theearly 1980s, just as sales were increasing inneighboring New Hampshire (Interview withJ. Stasiowski, May 13, 2003). This pair oftrends may indicate a negative impact onMassachusetts beer distributors due to theadoption of the bottle bill. However, 1983was also the year that the drinking age inMassachusetts was raised from 18 to 21. Alonger view of beer sales in the two states failsto show a consistent connection since thattime.

Bottle bill proponents dispute reports ofwidespread price increases in bottle bill states(Container Recycling Institute, 2003;Franklin, 1997). Moreover, they point tothousands of new jobs in redemption,distribution, and recycling. In Massachusetts,local redemption centers are a new category ofbusiness brought into existence by the bottlebill.

One of the most careful analyses ofindustry costs resulting from mandatorydeposit legislation was carried out by Lesserand Madhavan (1987), academic economistswho also served as members of a StateCommission on Returnable BeverageContainers in New York in the mid-1980s.Reviewing available research, they found adisparate range of estimated costs for beveragedistributors, with a “need for more data beforeany particular value, or values, can be acceptedwith confidence” (p. 124). Alsoindeterminate was the loss in profits thatcould be associated with consumptiondeclines due to bottle bills, estimated to fall ina range from 0 to 8 percent. Lesser andMadhavan concluded that, to assess the “pros”and “cons” of bottle bills economically, acost/benefit appraisal would need to factor inthe value to the public of a cleaner


environment and reduced costs of garbagecollection and clean-ups.

In 1997, the Department ofEnvironmental Protection contracted with theTellus Institute for an independent analysis ofthe costs and benefits of expanding the state’sbottle bill (Tellus Institute, 1997). TheInstitute calculated that retailers would faceadditional costs from having to sort and storean increased number and variety of emptycontainers. Distributors and bottlers wouldalso face added costs, especially if legislationrequired them to “pick up,” rather thansimply “accept,” all containers fromredemption centers. On the benefits side, thestate’s Clean Environment Fund would grow.For Massachusetts consumers, the Instituteestimated a per capita cost of $3.50 to $4 forexpanding the legislation, yet it offered noanswer to the bottom-line question of whetherthis amount was more or less than the cost ofachieving a similar rate of recycling usingalternative methods.

This latter issue was addressed in a secondreport completed by Tellus the following year(Tellus Institute, 1998). The research groupcompared the costs of an expanded bottle billagainst an “Alternative Recycling System” forcollecting and recycling beverage containers inevery workplace and in public outdoor placesthroughout the state. While the costs of thealternative system varied depending onoperational assumptions, even the lowestestimate was several times greater than thecost of an expanded bottle bill.

Around the same time these results werereleased, another economic analysis of bottle-bill expansion was completed for MASSPIRGby Sound Resource Management (Morris,1998). This study concluded that the currentbottle bill generated from $47-$72 million inbenefits for the state, while an expansionwould supplement this sum by an additional$15-$27 million.

Industry groups such as the MassachusettsFood Association have portrayed the costs ofcontainer recycling under the bottle bill asmany times higher than alternative curbside

programs (see also NorthbridgeEnvironmental Management Consultants,1997). A group known as “BEAR,” forBusinesses and Environmentalists Allied forRecycling, conducted a systematic analysis ofthe effectiveness of beverage containerrecovery. Guiding this project was a unique“multi-stakeholder” task force that includedenvironmentalists, major beverage andcontainer producers, governmentrepresentatives, recycling and wastemanagement companies, and others involvedin the “beverage container value chain.”According to BEAR’s (2002) final report,container deposit systems result in the highestrate of recovery of all recycling programsexamined. And, although deposit programshave the highest gross cost of all programs, thecomparison shifts dramatically when onecounts unredeemed deposits as a revenueproduced by bottle bills. Under thisaccounting method, the recycling cost percontainer is more than twice as great incurbside programs as in traditional depositsystems. Looked at another way, for just asmall additional cost compared to stateswithout bottle bills, deposit states haverecovery rates of recyclable containers that aremore than twice as great (www.container-recycling.org/projects/bear/cri-nsdaresponse-022002.pdf, 2003).

Plainly, in Massachusetts as elsewhere,bottle bills have complicated impacts that failto provide an unambiguous message forpolicymakers. How to balance private costsand public goods in a program like this is apolitical choice. At its inception, the bottlebill in Massachusetts was confirmed by voterreferendum. Although there have not beenmany polls on this subject since that time,those that have been done in Massachusettsand other states continue to suggest strongpublic support for the program (ContainerRecycling Institute, 2003; MASSPIRG,1996).


5. Operational Issues andProblemsThe Massachusetts bottle bill has proved

remarkably effective in achieving its principalgoal of reducing the litter of bottles and cansthrough recycling. At the same time, it hasgenerated substantial revenues forstrengthening important environmentalinitiatives throughout the state. To say thatthe bottle bill has been a great success in theseways, however, is not to claim that theprogram is without operational problems, northat all provisions of the original 1982 statuteremain well suited to the circumstances of2003. Our research and our conversationswith legislative staff, environmental advocates,bottlers, retailers, redemption centeroperators, municipal recycling coordinators,and other stakeholders identified a number ofconcerns that must be considered in a reviewof this program.

5.a. Narrow Spectrum ofBeverage Containers

When the bottle bill was written in theearly 1980s, the beverages covered by the lawwere defined as “soda water or similarcarbonated soft drinks, mineral water, andbeer and other malt beverages” (MassachusettsGeneral Laws, Chap. 94, Sec. 321). Sincethat time, the beverage market has changed asa result of product innovations, shiftingconsumer tastes, and active lifestylescharacterized by a larger work force, longerworking hours, and more people eating on therun (Gitlitz, 2002, p. 20). Today’s list ofpopular drinks includes fruit drinks, bottledwater, iced tea, sports drinks, and winecoolers. According to the beverage industry,the consumption of single-serve fruitbeverages alone increased 1,350 percentbetween 1990 and 1995 (Franklin 1997).Increasing sales of noncarbonated beverages,for the most part, do not represent asubstitution for carbonated beverages, butrather an expansion of consumption, one thathas been accompanied by greater use of plastic

bottles (Communication from J. Gitlitz,Container Recycling Institute, June 5, 2003).

The exclusion of a growing category of“alternative” beverages from the state’s bottlebill may be contributing to confusion amongconsumers as to which containers are eligiblefor return (Boston Globe, 2003, p. A10).When consumers litter these nonreturnablecontainers, it undermines the objectives of theoriginal bottle bill for environmental clean-upand resource conservation. To the extent thatthe containers are picked up in residentialrecycling, it also places an increasing burdenon financially strained local programs. A largeproportion of the new beverages is sold inglass bottles that are especially costly forhandling in curbside recycling programs.These containers present hazards to peopleand property when not disposed of properly.

5.b. Declining Value of theDeposit

Another issue in regard to updating thebottle bill concerns the $.05 deposit.Massachusetts, like all of the other bottle billstates, enacted the deposit without makingprovision for its changing value over time,neglecting to link the refund amount toinflation. Yet as a financial incentive, the realvalue of the deposit seems to be a pivotalfactor influencing consumer behavior.Ideally, consumers understand and supportthe goals of recycling, but this does not meanthey are immune to time and costconsiderations that factor in the trouble ittakes to return empty beverage containersmeasured against the reward for doing so.The $.05 deposit adopted by Massachusettslawmakers in 1982 was worth onlyapproximately $.025 by 2001. Recall that theMassachusetts law followed the example set byan Oregon statute passed in 1971. Judgedagainst this year as a baseline, the $.05 deposithas dropped in value to $.011, or by nearly 80percent (Gitlitz, 2002, p. 24).

Does this eroding value of a nickel depositreally have an impact on recycling rates? Itwould be wrong to view deposits as the single


determinant of bottle and can returns,excluding other issues such as the convenienceof making returns or public awareness of thebottle bill program and how it works.However, data collected by the ContainerRecycling Institute do show a relationshipbetween deposit amounts and recyclingamong bottle bill states, as well as a generaldecline in recycling rates as the value ofdeposits has fallen (Gitlitz, 2002, p. 24).Many observers believe that Massachusetts’own falling rates of return under its bottle bill,from 87 percent in 1995 to 67 percent in2002, may be connected to inadequatefinancial incentives for consumerparticipation.

5.c. Insufficient Handling Fees

The adequacy of handling fees in thebottle bill program has been an issue from asfar back as the late 1980s, when redemptioncenters began petitioning for an increase fromthe Executive Office of EnvironmentalAffairs. As already noted, although anincrease was granted in 1990, the amount waslimited to a quarter of one cent.

Redemption center operators maintain

their costs have continued to rise such that the$.0225 currently received for each containermakes it difficult for them to stay in business. Bottlers/distributors and their intermediarieshave implemented new practices that passalong “the cost of labor, transportation, andstorage” in several ways (MassachusettsAssociation of Redemption Centers, 1997, p.4). The original bottle bill statute gavedistributors and bottlers the choice of whetheror not to pick up empty containers.Following the state’s decision to collectunclaimed deposits and the $.0225 handlingfee increase, many redemption centers wererequired to bring in the “empties.” Deliverylocations for empty containers are few and caninvolve lengthy distances depending on wherea redemption center is situated. In addition,bottlers/distributors began to require centersto purchase the packaging for emptycontainers, to pay repeatedly for used packingmaterial, and to sort bottles by distributor aswell as color.

Redemption centers have been able to dolittle to resist these imposed costs, operating asthey do in a closed market without leverageover those purchasing their services. Packagestores, which rely on beer distributors forcredit and sales products, have no greaterbargaining power.

As a result of these cost increases, manyredemption centers lost profitability andbegan to close. According to Bob Renzi of theMassachusetts Association of RedemptionCenters, in 1992 there were about 180redemption centers across the state. In 1995,the numbers started to drop, and today thetotal is down to 60-70 redemption centers.The result has been a decrease in theavailability of sites where consumers canredeem their cans and bottles.

In 1999, DEP contracted with DSMEnvironmental Services, Inc., (DSM) toexamine the financial operations ofredemption centers in Massachusetts. Thisstudy supported the call from centers for ahandling-fee increase, concluding that the“average cost per container handled byMassachusetts redemption centers is 2.57cents” (DSM, 1999, p. 1). Redemptioncenters were found to be very important “inincreasing the recovery rate for beveragecontainers. Approximately 39% of allbeverage containers redeemed inMassachusetts in 1998 were redeemed byredemption centers” (DSM, 1999, p. 1).

5.d. Fraudulent Redemptions

“Fraudulent redemption” refers to theprocess by which the empty container of abeverage purchased in one state is redeemedfor a deposit refund in another. This problemis most likely to occur in areas where a bottlebill state, such as Massachusetts, borders anon-bottle bill state, such as New Hampshireor Rhode Island. Each time this fraudoccurs—whether by accident or intent—thestate’s CEF loses $.05 that would otherwisehave been counted as an unclaimed depositwhile bottlers and distributors unnecessarilypay a $.0225 handling fee. According to the


Massachusetts Office of the State Auditor(1998), anywhere between 10 and 25 percentof bottles and cans sold in Rhode Island andNew Hampshire are redeemed inMassachusetts. Fraudulent returns thusdeprive Massachusetts government of as muchas $8.2 million per year and privatebottlers/distributors of an estimated $3.7million per year.

Why do fraudulent redemptions occur?There are many reasons. One is thatcontainers sold in non-bottle bill states areseemingly marked as redeemable inMassachusetts, making it impossible todetermine by visual inspection a beverage’soriginal purchase point. Most bottlersdistribute their products regionally. Forreasons of space, time, or money, there is anunwillingness to separate inventory by state.

Another reason for fraudulent redemptionis the insufficiency of current containeridentification practices, which leads to thefailure of reverse vending machines to blockineligible returns. RVMs are designed toaccept containers based on their bar codes.When the bar code placed on a beveragecontainer is not state-specific, however, themachines have no means of discerning wherethat container was purchased. According toTomra, in the event that bar codes were to bemade state-specific, its equipment couldeffectively control fraudulent returns.

Two reports offer differing estimates ofthe possible impact of fraud if theMassachusetts bottle bill were to be expandedto include new kinds of beverage containers.The Tellus study of 1997 applied a range offraud estimates, from 5 to 20 percent. At thelow estimate, it found, fraud would not keepthe CEF from growing by $1.7 million; at thehigh end, fraud would reduce the CEF byabout $2 million but would not come close todepleting the fund. A second analysis, byNorthbridge consultants in 2003, reached adirer conclusion. Basing the calculations, inpart, on what happened in Maine after thatstate expanded its bottle bill, the studyindicated that the CEF could suffer a declineof anywhere between 11 and 93 percent of its

funds (Dietly, 2003). Projections like theseare, of course, hypothetical and no one can saywhich numbers have greater accuracy. Sufficeit to say that improving the response tofraudulent redemption needs to be acomponent of any credible expansion scenariofor the bottle bill in Massachusetts.

5.e. Burdens on Business

There is reason to believe that reports ofthe bottle bill causing widespread businesslosses in the state may have been exaggerated,judging by the economic impact data we havealready reviewed. Nonetheless, there is nodenying that the program imposes burdens onprivate businesses, specifically, retailers andbottlers/distributors. Appreciating how andwhy this is so is a necessary part ofunderstanding the bottle bill.

The Massachusetts Food Associationrepresents members of the food distributionindustry in Massachusetts. The president ofthis group, Chris Flynn, detailed for us someof the problems created for his members bythe bottle bill. Food distributors must addressa variety of sanitation issues associated withthe collection of redeemable containers. Forlarge stores, this has often meant buildingadditional storage space away from foodstorage facilities. Smaller stores have beenforced to give up valuable retail space.Additionally, all stores face a greater threat ofpest problems because of the “trash” beingkept on their premises. Flynn pointed outthat, according to the study of handling feesby DSM, the per-container cost ofredemption is higher for retailers than forredemption centers, at anywhere between$.034 and $.068. (The DSM report cautionsthat this analysis is based on complete costdata provided by only two retailers.) Flynnpredicted an expanded bottle bill wouldgreatly increase retailers’ costs because ofincreased sorting of different types ofcontainers and the need for complicated third-party pick-up arrangements.

We also spoke with John Stasiowski,president of another trade association, theMassachusetts Association of Malt Beverages.


Stasiowski underscored that beerbottlers/distributors face their own hardshipsas a result of the bottle bill, which hedescribed as “forcing his members into thetrash business.” He said bottlers/distributorsmust deal with many of the same sanitationissues as retailers, which leads to increasedcosts. The law also creates inefficiencies in thedistribution process. Delivery trucks mustdepart with enough empty space for theredeemed containers they pick up. Accordingto Stasiowski, fifteen beer distributors havegone out of business in Massachusetts sincethe early 1980s. He views this decline aslargely attributable to the bottle bill.

Louis Uva, Director of Recycling forPolar Beverages, the state’s largestindependent soft drink company, provided athird perspective on business burdens underthe bottle bill. He characterized themanagement of returned bottles and cans as“a business within a business” with costs toPolar for picking up, processing, andmarketing this material for resale. This “sub-business,” which is run as a distinct unitwithin the larger company, has become moreefficient over time, and it yields substantialrevenues to help offset some of the imposedexpenses of the bottle bill. Yet expensescontinue to outstrip revenues gained from thisinternal recycling operation.

5.f. Improper Uses of the CEF

The initial legislative intent was that CEFrevenues would be used in the following ways:not less than 50 percent for recycling,compost, or solid waste source reduction; notless than 20 percent for recycling and othersolid waste projects and programs; and notmore than 30 percent for other environmentalprograms. However, according to an analysisby Greg Smith (2003) of the Cape CodCommission, of the $100 million generatedfor CEF since 1990, only $30 million hasactually been allocated to recycling,composting, solid waste source reduction, andother innovative solid waste programs. Asmuch as $70 million has gone to other DEPprograms, including the Hazardous WasteSite Cleanup Oversight Program.

Similarly, in October of 1998, theMassachusetts Office of the State Auditor,Division of Local Mandates (1998),completed a review of the CEF anddetermined that, between 1990 and 1996,only 28 percent of expenditures hadsupported recycling. The remaining 72percent went toward employee compensationand other administrative costs of the DEP.This report did note an increase of CEFexpenditures for municipal recycling, to 35percent in 1998. Still, 65 percent of CEFmoney was being spent on other DEPprograms.

Municipal recycling coordinators wespoke with are well aware of this discrepancybetween intended and actual CEFappropriations. One stated that recyclingrates across the state could be improved iflocal programs received more CEF money.Another explained this money is essential ifmunicipalities are to maintain the existinginfrastructure of recycling programs andcomply with state recycling mandates andexpectations. Currently, city and townofficials feel they have to “jump throughhoops” to acquire funds from the DEP thatrightfully is theirs under the bottle bill statute.

In fact, no matter how much money isgathered in the CEF in any given year, noguarantee exists it will actually beappropriated for use. In fiscal year 2002,Governor Jane Swift implemented budget cutsthat reduced CEF appropriations by morethan $8 million. Recently, the RomneyAdministration held up CEF expenditures forthe second half of fiscal year 2003, creatingtremendous uncertainty among thoseresponsible for managing and planningrecycling initiatives on the local level.

5.g. Inadequate ProgramAdministration

Our research identified a number ofconcerns with regard to the administration ofthe bottle bill. Many participants believethere is a lack of coordination among the


different state agencies that are involved, aswell as deficient oversight of the program.

Poor coordination would seem to resultunavoidably from the diffusion ofadministrative responsibilities for thisprogram. While EOEA is responsible foroverall regulatory and policy implications ofthe bottle bill, DEP must attend to the “dayto day” issues of the program, and theAttorney General (AG) takes care of legalenforcement. Each of these departments,however, has an array of other responsibilitiesthat affects its ability to prioritize bottle bill-related problems in harmony with the othertwo involved agencies. For example, if DEPdiscovers a violation of the bottle bill (say, aretailer who is not refunding the $.05 depositamount), the actions it can take under currentlaw are limited to such things as issuingwarnings and notification of the AttorneyGeneral’s Office. In practice, the manycompeting priorities on the AG’s agenda makeit unlikely for such a relatively minor breachof state law to be addressed through formalcourt action.

Monitoring of the bottle bill program isalso lax at times. For example, althoughredemption center registration is supposed tobe handled by DEP, the department’s list ofcenters is often inaccurate and incomplete dueto lack of routine communication betweenDEP and redemption centers. TheDepartment of Revenue’s own accounting andauditing oversight of the bottle bill program isinconsistent in regard to verification of sales,returns, and/or abandoned deposits. To helpimprove this situation following the StateAuditor’s Report of 1998, DEP provided$150,000 to assist DOR in auditingabandoned deposit reports, resulting in thecollection of $7.5 million in late paymentsand penalties and interests (Communicationfrom P. Allison, DEP, June 11, 2003). Thisadministrative arrangement is nowjeopardized, however, by DEP budgetary cuts.

The 1998 State Auditor’s Report foundthat there is only one worker at DEP whospends 50 percent of his/her time on bottlebill issues and one part-time employee who

devotes an unspecified amount of time to theprogram. One worker at the DOR spends 50percent of his/her time on the bottle bill(Office of the State Auditor, 1998, pp. 11-12,17-18). (The report does not mention howmany workers and how much time is devotedto the bottle bill within EOEA.) This maynot be an adequate amount of administrativeresources for each agency to handle its ownbottle bill responsibilities while ensuringinterdepartmental coordination andcontinuity of service. In researching thisreport, it proved a challenge finding detaileddata on operational components of theprogram. Although mention was made of anannual bottle bill report, this document is notavailable to the public. Ultimately, data hadto be compiled from numerous sources,making it difficult to develop a comprehensivepicture of the program.

6. Current LegislativeProposalsAs of April 2003, nine bills had been filed

to revamp the Massachusetts bottle bill. Therange of proposals is broad, from repealing thelaw to expansion and more detailed regulationof the program. Each of these bills faces alegislative review procedure beginning withthe Joint Energy Committee, followed by theWays and Means Committees of eachchamber. Although it is highly unlikely thatmore than a few of these measures could makeit past the first committee review, the entiregroup of proposals merits at least briefanalysis, representing as it does the gamut ofcurrent political views on what the future ofthe bottle bill program should be.

Senate No. 372 (presented by SenatorBrewer, Democrat, Barre) – The firstgoal of this measure is to compelredemption centers to receive crushedaluminum cans, which they arecurrently allowed to refuse. The secondgoal is to require that any aluminumcan sold in the Commonwealth have abar code on the bottom.


Senate No. 381 (presented by SenatorPanagiotakos, Democrat, Lowell) –This measure specifically addresses theallocation of the Clean EnvironmentFund. If passed, all funds in said lineitem could be spent only on municipalcurbside programs; commercialrecycling programs; recycling incentiveprograms; grants to public institutions;and recycling education. The measurealso requires that the State Auditor’soffice oversee the spending of CEFfunds, regulate the redemption process,including the operations of redemptioncenters, and combat fraudulentredemption and underreporting ofescheatage. The State Auditor wouldfile an annual report about the CEFwith the Joint Energy Committee.Finally, if this bill were passed,Superfund monies would be used tooffset the cost of hazardous wastecleanup and any additional monies forthis purpose would be allocated fromthe General Fund, not the CEF.

Senate No. 382 (presented by SenatorPanagiotakos, Democrat, Lowell) –This bill makes many of the samerestructuring changes listed in SenateNo. 381. The proposal addresses fundallocations as well as specificadministrative tasks of the agenciesinvolved. Senate No. 382 would alsorequire the Commissioner ofEnvironmental Management and othersto make yearly reports to the legislatureon expenditures from the CEF.

Senate No. 383 (presented by SenatorRosenberg, Democrat, Amherst) –This proposal would make changes tothe handling fees that distributors paydealers. First, the handling fee wouldbe raised to a minimum of $.03 percontainer. Second, the agency thatoversees the law would be required toreview annually the handling fee andadjust it in accordance with theConsumer Price Index.

House No. 1080 (presented byRepresentative Petersen, Democrat,Marblehead) – This is one of the mostcomprehensive, and complicated,measures of the group. First, theproposal expands the bottle bill toinclude wine, spirits, and all non-alcoholic beverages with the exceptionof dairy products. It also specificallydefines “redemption centers,” requiringthat the Executive Office ofEnvironmental Affairs regulate thesebusinesses. The measure wouldincrease the handling fee paid toredemption centers by distributors to$.03 per container. Additionally, thebill addresses the problem of theredemption of containers purchasedout-of-state with new restrictions andadministrative penalties. Under thismeasure, CEF monies could be spentonly on recycling programs and theadministration of the bottle bill.Finally, the bill gives the Secretary ofEnvironmental Affairs administrativeresponsibility for bottle bill programs,including redemption centers.

House No. 336 (presented byRepresentative Kujawski, Democrat,Webster) – This proposal requires thatall new reverse vending machines in theCommonwealth be designed to identifycontainers that have been sold in thestate and are therefore eligible forredemption. Existing RVMs wouldhave to be refitted in order to complywith this regulation on a schedule set bythe Secretary of Environmental Affairs.

House No. 540 (presented byRepresentative Walrath, Democrat,Stow) – This measure would repeal thelaw requiring that all dealers acceptcontainers of the brand and size sold attheir location. Dealers would now beallowed to designate a licensedredemption center to receive containerson their behalf provided they post asign informing the public they nolonger accept containers and directingthem to the redemption center.


Distributors would be obligated to pickup containers from dealers or theirdesignated redemption center.

House No. 2953 (presented byRepresentative Garry, Democrat,Dracut) – The stated goal of thisproposal is to encourage recyclingwithin the Commonwealth. The billproposes many changes, but the mostimportant are the elimination of thebottle bill and redirection of CEFfunds. Essentially, this bill would endthe $.05 deposit on beverage containers.CEF spending would be used to expandrecycling programs, subject toappropriation by the legislature. Apublic/private partnership would becreated to improve the state’s solidwaste infrastructure. New revenueswould be raised from an assessment onthe beverage industry to fund thetransition from the bottle bill to anexpanded residential recycling program.

House No. 3146 (presented byRepresentative DiMasi, Democrat,Boston) – This proposal would end theexemption of fruit juice containers fromthe deposits required by the bottle bill.

In addition to these bills, GovernorRomney made a proposal for reforming thebottle bill as a rider in his 2003-04 budgetrecommendations that was subsequentlyrejected by the legislature. This “OutsideSection 124” would have expanded the bottlebill while eliminating the CEF. The measurerequired that a minimum $.05 deposit becollected on all beverage containers includingjuice, water, iced tea, sport drinks, and liquorcontainers. Alcoholic beverages sold incontainers larger than one pint would bemade subject to a $.15 deposit. Under thegovernor’s proposed budget, funds collectedunder the bottle bill would become part ofgeneral revenue, and subject to appropriationby the legislature.

Table 2 summarizes key features of theseten proposals.

As this report was being readied forpublication, another bottle bill proposal wassubmitted by Senator Nuciforo (Democrat,Pittsfield) calling for expansion in the kinds ofcontainers encompassed by the law, anincrease in handling fees, and a smallreimbursement to distributors for every unitredeemed.

Table 2Comparison of Bottle Bill Legislative Proposals

Feature S.3

72

S.3

81

S.3

82

S.3

83

H.1

080

H.3

36

H.5

40

H.2

953

H.3

146

Gov

erno

r’s

Eliminates bottle bill •Expands eligible containers • • • • •Increases deposit •Increases "handling fees" • •Regulates redemption centers • •Combats false redemptions • • •Eliminates CEF •Directs CEF expenditures • • • •Redirects CEF funds to the General Fund • •Addresses oversight of bottle bill/CEF • • • • •


7. RecommendationsWhen the bottle bill first came under

consideration in Massachusetts in the late1970s, many interest groups complained thatit would be impossible to implement andcould prove ruinous to businesses and theeconomy. Viewed from the vantage point ofthe law’s twentieth anniversary, it is clear thatthose fears were unwarranted. Indeed, thedominant assessment we heard from the manystakeholders spoken with for this project—including some who are unhappy withparticular facets of the program—is that thebottle bill, overall, works well.

Today, another generation of critics iswarning of the dangers of attempting toextend and improve the bottle bill. Theircontentions, which focus alternately onunmanageable costs and the ineffectiveness ofstate government, sound familiar themes.

However, this perspective neglects torecognize the tremendous amount ofexperience and knowledge that has beengained over the bottle bill’s twenty-yearhistory, expertise both inside and outside ofgovernment that can be used to correctdeficiencies in the law and adapt it to currenttimes. Based on our research, we arerecommending the following twelve actions betaken as legislative and administrative reformsof the program.

§ Update the Bottle Bill To IncludeBottled Water, Juice and VegetableDrinks, Sports Beverages, Iced Tea, andWine Coolers. By revising the definitionof “beverages” in the law in this manner,the bottle bill can be brought up to datewith changing consumption patterns.This will support the program’s anti-litterand recycling goals, reduce confusionamong consumers about which beveragesare eligible for redemption, and eliminatedisparities in the way producers ofdifferent types of beverages who usesimilar containers are treated underMassachusetts law.

§ Maintain the Current $.05 Deposit, witha $.15 Deposit for Wine and LiquorBottles. A strong case can be made that anickel isn’t worth what it once was, andthe time has come to increase the bottlebill deposit amount to $.10. The realityis, however, that few stakeholders seemready to make this change inMassachusetts at this time. Most bottlersand retailers promise it will lead to pricechanges (and more out-of-stateconsumption) at a time when thestruggling Massachusetts economy cannotabsorb these effects. In addition torecognizing the political downside ofproposing a $.10 deposit, supporters ofthe bottle bill seem uncertain of theadvisability of improving the redemptionrate by this method, as compared withother possible changes in the programsuch as more education. The danger alsoexists that a $.10 deposit could increasefraudulent redemptions, particularly whencombined with an expansion ofcontainers covered by the bottle bill. Acompromise position, which is consistentwith what the Romney Administrationhas proposed, is to keep the $.05 depositfor the majority of beverage containerswhile establishing a $.15 deposit forliquor and wine bottles greater than onepint. Large glass bottles of this kindrepresent one of the most costly items forlocal recycling programs to handle, andthey pose significant risks to people andproperty when discarded as litter. Thedecision as to whether the deposit shouldbe increased to $.10 can be re-evaluatedafter an expanded bottle bill has beenimplemented and its effectivenessassessed.

§ Raise the Handling Fee from $.0225 to$.0275. An increase of $.005 in handlingfees is reasonable for the bottle bill, basedon analysis of the actual costs incurred byredemption centers and retailers. Ahandling fee of $.0275 is still less than the$.03 amount approved, then rescinded,by EOEA in 1990. Maine and Vermont


specify a handling fee of $.03 in theirbottle bill programs. Providingredemption centers with a sufficientfinancial margin to stay in business shouldenhance redemption rates by givingconsumers greater access to redemptionservices.

§ Improve Anti-Fraud Measures.Developing more effective measures tocurb fraudulent redemptions is a criticalstep in limiting unnecessary handling feesfor bottlers/distributors and protectingthe CEF under an updated bottle bill.According to redemption industry expertssuch as the Tomra Corporation, use ofstate-specific labeling and bar codes onbeverage containers would be a reliablemeans for moving toward this goal. Yetbottlers/distributors resist this practice,saying that it conflicts with their regionalproduction and distribution operations.Under a compromise reached in NewYork, bottlers such as Pepsi and Cokeagreed to put state-specific markings ontheir top brands only, limiting newproduction requirements while combatingfraud for the largest group of beveragesthey sell. To determine the most suitableand acceptable methods of fraud controlin Massachusetts, there should be a six-month implementation delay after theadoption of an expanded bottle bill.During that time, we recommend that aTask Force of experts from the beverageindustry, retail sector, redemption centers,and state government be convened toformulate new fraud control practices.

§ Provide Assistance to Business.Bottlers/distributors and retailers make aprofit from selling beverages incontainers, and it is not unreasonable forthem to share in the social costs ofensuring that these containers do not endup as wasted resource materials and aslitter. Still, it is important that these coststo business be fair and proportionate, andthat no company be driven out of themarketplace due to the bottle bill. Noreform of the bottle bill that fails to takethe interests of businesses and their

employees seriously would—or should—have credibility inside the political arena.To minimize negative economic impacts,we recommend that a low-interest loanprogram be established to assist businessesin dealing with the challenges of makingthe transition to an updated bottle bill inMassachusetts. The new program shouldbe under the management of theDepartment of EnvironmentalProtection, perhaps as an adjunct to thedepartment’s current Recycling LoanFund. DEP would set participationrequirements based on evidence of costimpacts and economic need. Aftertransition, the fund can be continued toassist struggling businesses that couldbenefit from temporary help in meetingany bottle bill costs. We also recommendthat each year, DEP provide a financialreward, such as a percentage reduction ofthe Deposit Transaction Fund transferrequirement, for that bottler/distributoror retailer that comes up with the bestnew techniques for improving theefficiency and effectiveness of the depositredemption cycle.

§ Maintain CEF but with a NewAllocation Formula (1/2 local recyclingprograms, 1/6 DEP administrative costs,1/6 low-interest loans to business, 1/6general revenues). Proposals to eliminatethe CEF and redirect all of this money togeneral revenues amount to little morethan a raid on environmental programresources that are needed if the state’sown waste management goals are to bemet. CEF is a self-sustaining account thatdoes nothing to worsen state fiscalconditions and, in recent years, it hasdirectly contributed to deficit reduction.We recommend maintaining the CEF,but with a new allocation formula thatstabilizes how the fund is appropriated fordifferent purposes, including localrecycling programs, DEP administration,low-interest loans to business, and generalrevenues.

§ Mount a Bottle Bill Educational Effort.It has been many years since the bottle


bill was in the limelight in Massachusettsand broad public discussion of depositand redemption procedures took place.As a means of boosting the rate of bottleand can returns and informing consumersabout the meaning of bottle billexpansion, we recommend that DEPmount an educational program.Following the example of large-scalepromotional efforts in such areas as publichealth, public transportation, and literacyimprovement, the state needs to use avariety of media to communicate toconsumers both the environmentalbenefits of the bottle bill program and thepractical details of how to participate.

§ Encourage Innovative RecyclingExperiments. The recycling sector inMassachusetts is neither simple nor static.The bottle bill is one of numerousrecycling activities taking place underpublic and private auspices, and newrecycling technologies and organizationalstrategies are being developed all the time.We recommend that DEP encourageinnovative recycling experiments that canimprove the complementarity betweenthe bottle bill and other recyclingmethods in the state. Polar recyclingdirector Louis Uva outlined for us acreative plan in which his company mightconceivably partner with a city or town inmobilizing local citizens to turn in theirrefundable containers as a charitabledonation. Polar would then coordinatethe redemption of these returns and sharethe refunds with local officials. This isbut one example of a novel idea forboosting container recycling within aframework that links the bottle bill withlocal recycling capabilities, all under theguidance of bottling industry know-how.By using small grants and other forms oftargeted assistance, state governmentshould encourage integrative efforts ofthis kind across the evolving recyclingsector.

§ Increase the State’s AdministrativeCommitment to the Bottle Bill Program.Problems in the state’s current

administration of the bottle bill aredocumented in this report. Werecommend a new interdepartmentalbottle bill management group be formedunder the leadership of DEP. This groupshould meet regularly to centralizeoversight of the program. We alsorecommend the legislature give DEPexpanded enforcement authority, such asthe ability to impose fines, for dealingwith infractions of bottle bill regulations.Other coordination issues might also bemitigated by the RomneyAdministration’s confirmation of EOEAand DEP as lead cabinet agencies forimplementation of this law.

§ Require an Annual Bottle Bill Report.Related to the precedingrecommendation, we also call for anannual bottle bill report to be publishedby DEP. The document should beavailable to the public and designed to beresponsive to the interests of diverseaudiences and constituencies for theprogram. Included should be currentdata from multiple departmental sources,including deposit and redemption data,CEF expenditures, program violations,and supported local recycling activities.Benchmarks for future performance of theprogram in regard to rates of return, fraudcontrol, and administrative proceduresshould also be discussed.

§ Request a New State Auditor’s ReportThree Years after Bottle Bill Expansion.The 1998 State Auditor’s report made animportant contribution to the bottle billby providing objective analysis of selectedissues such as fraudulent redemption andproblems in state administration.However, that report is now five years oldand its focus too narrow to encompass therange of topics associated with an updatedbottle bill such as is being proposed here.We recommend the legislature requestanother State Auditor’s report becompleted three years after bottle billexpansion takes place to evaluate the newprogram and to facilitate a process ofcontinuous quality improvement.


§ Encourage More Research on the BottleBill. Policymaking for the bottle billsuffers from a lack of information aboutimportant aspects of the program. As anexample, although effectiveimplementation of the bottle bill dependson public understanding and support, nodetailed survey of public opinion on theprogram has ever been done inMassachusetts. Not enough is knownabout other nations’ deposit/return lawsand related container recycling efforts andtheir lessons for program improvements

in Massachusetts. We also learned thatdiscrepancies exist between the bottle billdata distributed by DEP and regionalsales numbers compiled by the ContainerRecycling Institute (Communicationfrom J. Gitlitz, CRI, June 5, 2003).Administrators and lawmakers shouldreach out to researchers in universities andother independent organizations toexamine such topics and disseminate theiranalysis and findings broadly.


List of Interviews

Marybeth Campbell, Senior Research Analyst, Representative John Binienda’s Office, April 28, 2003

Greg Cooper, Director of Waste Prevention Bureau, Department of Environmental Protection,May 2, 2003

Michael Costa, Legislative Aide, Senator Steven Tolman’s Office, May 16, 2003

Chris Flynn, President, Massachusetts Food Association, May 13, 2003

Risa Kaplan, Senior Policy Advisor, Governor’s Office, May 16, 2003

Randi Mail, Recycling Director, City of Cambridge, April 25, 2003

Bob Renzi, Massachusetts Association of Redemption Centers, April 25, 2003

Chuck Riegle, Director, Business Process Improvement/Government Affairs, Tomra NorthAmerica, May 9, 2003

John Stasiowski, President, Massachusetts Wholesalers of Malt Beverages, May 13, 2003

Claire Sullivan, Solid Waste Planner, South Shore Recycling Co-operative/MASS Recycle,April 25, 2003

Louis Uva, Director of Recycling, Polar Beverages, Inc., May 21, 2003

Iris Vicencio-Garaygay, MASSPIRG Environmental Advocate, April 10 and May 30, 2003


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www.bottlebill.org/usa/states-massachusetts.htm. 2003. “Bottle Bills at a Glance: Massachusetts.”www.chelseacenter.org. 2003. “Chelsea Center for Recycling and Economic Development.”www.container-recycling.org. 2003. “Container Recycling Institute.”www.container-recycling.org/projects/bear/cri.nsdresponse-022002.pdf. 2003. “CRI Responds to the

National Soft Drink Association’s Attack on the BEAR MSRPP Report.”www.tomra.no. 2003. “TOMRA: Helping the World Recycle.”

Community-Based Research Initiativewww.cbri.neu.edu

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