Rep. Brian Lohse

House District 30

This year, I filed House File 2205, which repeals Iowa’s bottle deposit law, or as I prefer to call it, the state nickel sales tax. If you buy beverage cans and bottles in Iowa regularly, semi-regularly or even once, you are directly affected by this sales tax, imposed by the state, but collected and retained by a private entity.

The nickel deposit was enacted approximately 40 years ago, with the intention of inspiring recycling efforts among private consumers and keeping roadside ditches clean. If we were to take a look at the data, I’m confident the numbers would reflect that this program has been successful. So successful, as a matter of fact, that it's quickly becoming a victim of its success.

For starters, in Iowa, the number of non-retail redemption centers (locations, other than grocery or convenience stores, where consumers can redeem their bottles and cans) is declining at a rapid rate. Between 2018 and 2019, in one year alone, that number declined from about 60 locations to only around 45.

This forces consumers to take their cans to retail redemption centers. As the owner of a small-town grocery store, I can assure you that grocery stores and convenient stores are the wrong kind of facility to mix with a redemption center. Grocery stores are regulated by health and safety standards; private consumers are not.

In the almost six years that Brick Street Market & Cafe has been open, our staff has seen objects, materials, substances, and carcasses, all too disgusting to name, in the cans and bottles returned to the store.

The bottom line: The bottle deposit law unfairly subjects grocery and convenient stores to possible health code violations, and indeed, some have been cited and fined.

Additionally, the numbers show that Iowans are participating in redemption programs at a declining rate, year-by-year, opting instead for recycling bins. On average, only 77% of all glass, aluminum and plastic cans and bottles sold in the state of Iowa are being redeemed for the consumer’s nickel.

As the number of Iowans actively redeeming cans continues to fall, the reduction of non-retail redemption centers available to consumer should be expected to continue. There simply are not enough redeemed cans and bottles to keep these redemption centers in business. This, in turn, results in those Iowans still choosing to participate in redemption programs to take their cans to grocery and convenience stores, which, as I’ve stated, are poor locations for such programs.

Most problematic is where your nickel ends up. If you buy a can of Pepsi, you pay the grocery store a nickel. When you return that can to a redemption center, that nickel goes back in your pocket. However, if you choose instead to place that can in a recycle bin, you forego that nickel. That unredeemed nickel does not end up in your pocket or the pocket of the grocery or convenience store, or even into any state fund. That nickel ends up in the pocket of the soda, liquor or beer distributor.

Each year, these distributors pocket about $28 million worth of your unredeemed nickels.

HF2205 is the most productive solution to these problems. The bill provides for a three year phase out of the bottle deposit law. During that phase out period, the unredeemed nickels will be returned by the distributors to the state and directed toward public-serving funds.

Ninety percent of the collected nickels will go toward expanding recycling programs and recycling awareness and education. Eighty-four percent of Iowans are currently covered by a recycling program. We need to incentivize improving that number.

The remaining 10% of the unredeemed nickels will be deposited into a fund that bolsters current homeless housing programs. This three year period would also give both non-retail and retail redemption centers and recycling companies time to adjust their facilities as needed.

At the conclusion of the three-year period, the nickel tax will be ended. Please feel free to continue to contribute the nickels you currently pay to distributors to your favorite local charity.

STATE REP. BRIAN LOHSE, R-Bondurant, represents House District 30, which includes Bondurant and Altoona. He can be reached by phone at 515-519-2347, by email at brian.lohse@legis.iowa.gov, or by mail at PO Box 67, Bondurant, Iowa, 50035.