Committee reviews draft 2.2 changes to bottle‑bill definitions and fair‑compensation rules

The Natural Resources & Energy Committee on April 20 examined draft 2.2 of a proposed update to the state’s bottle‑bill framework, focusing on new definitions and a framework for paying redemption centers.

Michael Grady of the Legislative Council summarized the most significant edits, including a new definition of "dealer" to subsume "retailer," a newly prominent definition of "deposit initiator" ("the first distributor or manufacturer to collect a deposit on a beverage container sold to any person within the state"), and a clear definition of "point of redemption," which may include manual sorting, mechanical sorting or bag drops. "Deposit initiator is currently used for the unclaimed deposits and return of them to the state," Grady said, noting the term will replace older language referencing "distributor or manufacturer."

The draft also adds a definition of "fair compensation" and requires a producer responsibility organization (PRO) plan to include agreements that cover "reasonable cost of operating redemption services and a reasonable rate of return." Committee members pressed staff on whether "rate of return" necessarily implies profit and how to define "reasonable" costs. "I don't think it necessarily means profit," Grady responded, adding that negotiation and ANR review are designed to prevent payment for "unreasonable" expenses.

Members discussed operational detail the bill leaves to negotiation: how to allocate shared staff time between storefront and redemption activities, how automation (reverse‑vending or sorting machines) affects labor costs, and whether a fixed handling fee or negotiated regional rates would better preserve redemption capacity. One member asked whether a floor or flat fee would ensure enough redemption centers "stay in business to meet the goals of the bill"; staff and other members warned a single flat fee could blunt incentives for technological investment and would not reflect the diversity of center sizes and costs.

The draft includes dispute resolution language requiring binding third‑party review for compensation disputes and a reporting requirement: after the plan has been effective for two and a half years, the PRO must submit a report describing how fair compensation was adjusted or document why no adjustment was necessary.

Staff also walked through the plan approval and timeline the bill anticipates: an entity may apply to be the PRO starting Jan. 1, 2027; PRO plans are expected before April 1, 2028; and full implementation is targeted for 2029. ANR will have 90 days to accept or deny a plan and a PRO has 60 days to resubmit if denied. Committee members expressed concern about interim gaps — for example, whether a redemption center might close between negotiation and implementation — and asked about backstops and stakeholder involvement. Grady said stakeholder conversations are expected between the PRO and redemption‑center operators before plans reach the committee.

Other technical edits reviewed included the redemption‑rate definition (the number of containers redeemed divided by containers sold, explicitly excluding unredeemed municipal or recycling collections), confidentiality protections for PRO plan materials, and a reordering of definitions such as retailer/dealer for clarity. The committee paused the review with plans to continue the definitions at a later meeting.

What happens next: Committee members asked staff to return with clearer language and examples for how fair compensation will be calculated and how stakeholder input will be recorded; no final statutory language was adopted in this session.