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F I S C A L   I M P A C T   R E P O R T

 

 

SPONSOR:

M. Garcia

 

DATE TYPED:

1/30/03

 

HB

72

 

SHORT TITLE:

Beverage Container Deposit Act

 

SB

 

 

 

ANALYST:

Maloy

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

 

 

See Narrative

Recurring

General Fund/OSF

 

SOURCES OF INFORMATION

 

Responses Received From

New Mexico Environment Department

 

SUMMARY

 

     Synopsis of Bill

House Bill 72 would establish a five cent ($.05) deposit fee on every beverage container sold in the state.  “Beverage container” means the individual, separate, sealed glass container containing beer or other malt beverage. 

Every “dealer” (a person in New Mexico who engages in the sale of beverages in beverage containers to a consumer) would be required to accept empty beverage containers of the type he sells from persons returning the containers.  The dealer must pay the person a refund of the deposit of not less than five cents ($.05).  Similarly, every “distributor” (a person who engages in the sale of beverages in beverage containers to a dealer) would be require to accept from a dealer an empty beverage container of the kind, size, and brand sold by the distributor, and to pay the dealer a refund of the deposit. 

Beverage containers could be rejected by dealers and distributors if they are not properly marked or are contaminated, and a dealer could refuse to accept anything more than 144 containers from an individual per day. 

The Environment Department would administer the Beverage Container Deposit Act, including investigating and resolving complaints through informal discussions, mediation, or public hearing.  The department would be empowered to assess administrative fines of up to $1,000 for violations of provisions requiring that containers be marked with the refund value or for failure of a dealer or distributor to refund deposits.  The department would be required to fine dealers $100 if they failed to display required signs.

FISCAL IMPLICATIONS

 

HB72 does not include an appropriation.  Existing staff and budget resources are to absorb the additional administrative and enforcement responsibilities for this refund / recycling program. 

 

ADMINISTRATIVE IMPLICATIONS

 

The additional administrative and enforcement responsibilities would weigh heavily on the solid waste program.  The department estimates approximately 10% of current staff resources would have to be diverted from “higher priority programs” to administer the bill’s requirements.  The program would be required to: draft and adopt needed administrative rules and regulations, educate dealers and distributors, develop and provide Notice signage to dealers, inspect and enforce the marking of containers, respond to refund complaints, hold administrative hearings, generate hearing findings and reports, and assess penalties for violations.  

 

The department estimates it would take not less than 18 months to establish the basic program framework needed to become operational.  Controversial administrative rules and regulations would need to be developed and approved by the Environment Improvement Board.

 

The cost for dealers and distributors to collect, store and transport to a recycling facility the containers presented for refund should be considered.  How are dealers and distributors who operate their businesses in areas of the State where a glass recycling facility is not readily available to be affected?  The market for recycled glass has been historically very weak, and the cost to transport glass from New Mexico to such markets exceeds the value of the glass. 

 

OTHER SUBSTANTIVE ISSUES

 

1.   The implications for dealers and distributors on other fronts are somewhat unpredictable.

 

Ø      Theoretically, the deposit / refund could present a fiscal “wash” for a dealer or distributor if just as many containers are presented for refund as are purchased.

 

Ø      Since many consumers are not diligent about recycling, a dealer or distributor may profit from the program if more containers are purchased than are presented for refund. 

 

Ø      Some dealers and distributors may bear a disproportionate burden if more containers are presented to their business for refund due to location or surrounding population of consumer.

 

2.   Attempts to reduce the waste stream and littler should be addressed comprehensively, as glass containers make up a very small proportion (less than 5%) of each.

 

ALTERNATIVES

 

A bill establishing a surcharge on waste disposal, to be used to increase diversion, recycling, and litter abatement efforts in a comprehensive manner, may be far more efficient in addressing the perceived goals of HB72.

 

POSSIBLE QUESTIONS

 

1.      Will consumers seek less costly beer and malt beverage products (can products) if the bottled  prices are increased for the $.05 deposit? 

 

2.      How would an increase in canned beverage sales affect the environment?

 

SJM/yr