The “Bigger, Better Bottle Bill” Is Now The Law In New York

New York State’s budget process had the usual twists and turns and finger pointing as in past years.  This year, however, after serious lobbying by both sides of the “Bigger, Better Bottle Bill” debate, a new and very substantial change to New York’s returnable beverage container law was incorporated into the 2009 budget bill and signed into law by Governor Patterson.

The original bottle bill, enacted in 1982, regulated only carbonated soft drinks, beer and other similar beverages. Since that time, however, there has been an enormous explosion of the sale of non-carbonated drinks.  For example, water drink sales have grown to almost one quarter of all beverage containers sold in New York.  None of these drinks are sold in returnable containers and, as a result, there has been a glut of plastic and other bottles which are either recycled or simply tossed into the garbage and, ultimately, a landfill.  In addition, under the old law, unredeemed deposits on returnable containers, totaling millions of dollars per year, were kept by beer and soda companies.

The new bottle bill changes this situation completely.  The new law, which amends various sections of Title 10 of Article 27 of the Environmental Conservation Law, now requires deposits on certain water drinks, requires 80% of the unclaimed deposits to be returned to the State’s general fund and sets up bottle bill education and grant programs.

Specifically, the definition of beverage containers sold in New York with a 5 cent deposit now includes those containing water in addition to carbonated soft-drinks and beer.  Water is defined to include flavored water and nutritionally enhanced water but specifically does not include “a type of water to which a sugar has been added.”  As before, it is unlawful to sell any beverage container, including those newly covered under the law, unless a 5 cent deposit is collected at the time of sale and unless the container has a 5 cent refund value clearly marked on it.  Beverage dealers, defined as sellers of beverage containers for off-site consumption, must accept any empty beverage container which is sold or offered for sale by that dealer and pay the 5 cent refund value for each.

The new law also mandates the use of  “reverse vending machines” by certain larger chain stores.  A reverse vending machine is an automated machine which uses a laser scanner (or similar technology) to identify UPC bar codes, accept redeemable containers and issue a receipt for their total refund value. Beginning on March 1, 2010, beverage dealers which are part of a chain with ten or more stores in New York must install reverse vending machines.  The larger the square footage of the store, the greater number of reverse vending machines which are required.  Stores which do not meet this definition but are larger than 40,000 square feet and which don’t use reverse vending machines, must have a dedicated area for container redemptions which must be adequately staffed and must post a conspicuous sign describing where the redemption area is located within the store.  Stores under 10,000 square feet will be able to limit returnables to 72 “per visit, per redeemer, per day” if they have a written agreement with a nearby redemption center to accept larger quantities of containers on their behalf, but these stores must also set up two hour periods each day when people can redeem up to 240 containers.

All stores selling returnable containers must post a sign entitled the “New York Bottle Bill of Rights.”  This sign must list consumers’ rights under the new bottle bill including the right to return containers at any store which sells that type of beverage whether it was purchased there or not, the right to a refund without proof of purchase and the right to return containers on any day or hour, except the first and last hour of the store’s business day.

The law requires also imposes new requirements on “deposit initiators,” which are defined essentially as the original bottlers and any distributor who did not buy the containers from a bottler registered in New York.  Deposit initiators must accept and redeem all containers which it sells from any dealer or operator of a redemption center without any limitation on quantity.  The deposit initiator must pay the dealer or redemption center not only the 5 cent refund value and but also a 3.5 cent handling fee (increased from 2 cents under the old law) for each container.  Bottlers and distributors must also provide stores with sufficient number of bags or cartons for the handling, and packaging and pickup of  containers which were not redeemed in a reverse vending machine.  Bottlers and distributors are prohibited from imposing certain onerous conditions on dealers such as requiring that containers be counted at an off-site location.  The law prohibits anyone from knowingly redeeming a container for which no deposit was paid in New York, but requires the bottlers and distributors to accept and redeem any container that the dealer or redemption center accepted and redeemed.

Deposit initiators must now set up a separate, interest-bearing “Refund Value Account.”  All container deposits must be placed into this account which is held in trust for the State of New York.  Payments of refund are to be paid from this account.  Deposit initiators must file quarterly reports with the Department of Taxation and Finance which describe the account balance, the amounts credited and paid out from the account including refunds and service/handling charges.

One of the most significant new provisions of the Bigger Better Bottle Bill is that the bottlers and distributors must now refund a portion of the unredeemed deposits back to the State of New York.  Thus, at the end of each quarterly reporting period, they must pay 80% of the balance in the Refund Value Account to the Department of Taxation and Finance Department.  The remaining 20% can be withdrawn and kept by the deposit initiators.   In the event a deposit initiator pays out more in refunds than it collects in deposits during a quarterly period, it may apply to the State for a refund of the excess amount paid as long as the request is made within 12 months.  All monies paid to the State, except for funds reserved for paying anticipated refund requests, are to be directed into the State’s general fund.

By June 1, 2009 all deposit initiators must apply to the State Department of Taxation and Finance for a registration certificate which will be issued for three year, renewable periods.  The Commissioner of Taxation and Finance has the authority to revoke or not renew any such registration if the deposit initiator has violated the law or any applicable rules and regulations.   Deposit initiators have the right to notice and a hearing to challenge any proposed revocation or non-renewal. 

The law also establishes penalties for various violations and expands the list of governmental agencies which can enforce the law.  For example, an unregistered bottler or distributor which sells containers in New York may be fined $500 per day of violation up to $25,000. Failure to maintain accounts and other records required by the law is subject to fines up to $1000 per quarter.  Any person who “willfully” tenders more than 48 containers for a deposit refund which he or she knows or should know that no deposit was paid, is subject to a civil penalty of  $100 per container, up to a total of $25,000.  (Dealers and redemption centers must post signs warning customers that such violations are subject to this penalty.)  The Attorney General and the Departments of Agriculture and Markets, Taxation and Finance and Environmental Conservation all have authority to enforce the provisions of the new law.  In addition, local governments can adopt local laws or regulations providing for the enforcement of most of the key provisions of the law.

By June 1, 2009 deposit initiators must register new labels for containers offered for sale in NY which has a “New York State specific” bar code identifying the container as being offer for sale exclusively in New York.  This requirement is designed to prevent illegal redemption in New York of containers purchased outside of the state.  Such label registration must be renewed whenever the bar code is changed or when the size, composition or glass color of the container changes.

The new bottle bill also includes entirely new provisions creating a Bottle Bill Public Education Program and a Beverage Container Assistance Program.  The public education program is designed to disseminate information about the new law.  This program will publish information regarding the Bottle Bill of Rights, procedures for setting up a redemption center, the rights and responsibilities of bottlers, distributors, dealers and redeemers and general information about the benefits of recycling.  The Beverage Container Assistance Program will provide state grants to municipalities, certain not-for-profit organizations as well as distributors, dealers and redemption centers employing less than 50 people.  These grants will pay for up to 50% of the cost of the purchase of reverse vending machines or the purchase or rehab of property or buildings to be used to collect, sort or package empty beverage containers. 

Consumers, dealers, distributors and bottlers all face a lot of changes ahead under the Bigger Better Bottle Bill.  Change is good and hopefully all New Yorkers will benefit from the reduction of water bottles in our landfills and increased revenues from unclaimed deposits.