Culver Bottle Bill Proposal Iced by Democratic Leaders in Legislature

An expansion of the bottle-deposit law, a keystone of Gov. Chet Culver’s Condition of the State address earlier this year, was declared dead Thursday by Democratic leaders in the state legislature, who said the bill was unlikely to pass — or even to reach the floor for debate.

“When it was all said and done, I don’t think there’s a way to reach consensus in the Legislature,” Senate Majority Leader Mike Gronstal, D-Council Bluffs, told reporters during a press briefing on Thursday.

Culver told cheering lawmakers three weeks ago during his Condition of the State address that the current law requiring refundable deposits on many bottles and cans sold in Iowa had proven effective for controlling litter and encouraging recycling. He said that he wanted to expand the law to include more types of drink containers, double the deposit fee to ten cents, and keep two pennies of that money to fund conservation programs and pay redemption centers that process the empty cans.

In addition, the Democratic leadership said they wouldn’t pursue a bill supported by Culver that would change the rules on how corporations pay income taxes by closing a loophole that allows multi-state companies to avoid state taxes. Pro-business groups said the plan would hurt Iowa’s chances of recruiting big employers.The decision to kill the bills came as a surprise to statehouse observers, because Democrats control the governor’s office and both chambers of the legislature. Together, the two initiatives were expected to generate nearly $100 million in new revenues for the state.

Culver’s proposed bottle bill was widely criticized — particularly by Republican legislators and pro-business groups — when it was first proposed.  It would have required Iowans to pay a dime per bottle at the time of purchase, but  eight cents would have been remitted at the time the containers were redeemed. One penny was slated to go to the state to increase funding to the Resource Enhancement and Protection program and another penny would be used to compensate redemption centers.

Most of the state’s grocers and beverage distributors opposed the proposal. Grocers have expressed frustration over the law because of the costs and hygiene issues associated with processing cans; wholesalers said the bottle bill is already a bookkeeping nightmare and the new two cent fee would make the situation worse.

In addition, some wholesalers in border counties have said that it would be practically impossible to ensure that out-of-staters wouldn’t import cans into the state to take advantage of the extra nickel deposit.

During a question-and-answer session, Gronstal downplayed the decision to ice the bill and said the governor’s staff had been consulted before the announcement was made.

“We’re not very far away from the governor on this budget,” he said.

Culver proposals a part of a $6.4 billion budget for the 2008-09 fiscal year.

During the session, Democrats said they would increase spending for education and health care, while decreasing spending in other areas. Noticeably absent in the preliminary proposal was spending plans for infrastructure and employee pay increases.