Recording in progress.

Good morning, everyone.

I'm Charles Allen.

I'm the Ward 6 Council Member and Chair of the Council's Committee on Transportation and the Environment.

Today is Thursday, July 9th, 2026, and we're meeting both in room 123 of the John A.

Wilson building as well as of the Zoom virtual platform.

The time is now 9 44 a.m.

And I am calling to order this public round table of the committee.

I'll note we'd initially plan for this to be taking place in room 500.

The AV is out in that room, so we need to switch rooms.

So thanks for everyone's flexibility.

We'll have a little more intimate setting here as well for a good conversation today.

Today's round table is going to focus on Bill 26-58, which is the recycling, refund, and litter reduction amendment act, commonly referred to as the bottle bill.

Since the original public hearing on the bill was held by the Committee on Business and Economic Development on October 1st, 2025, as well as in conversations with wide variety of stakeholders, this committee took the rare step to share a revised draft of the bill that incorporates feedback to try and address some of the concerns that have been raised by local businesses and the industry while also preserving the bill's underlying and ultimate goal of reducing the number of recyclable containers that end up in the trash or in our waterways or other natural environments.

Today, we're going to hear again from many of our local businesses, brewers and distillers, distributors, subject matter experts on recycling and deposit programs, legislators from other jurisdictions, and environmental groups to receive additional feedback on this revised draft, which has been circulated to witnesses as well as posted on the council website.

Because not everyone has actually gone and read that.

Let me briefly outline where the revised draft differs from the introduced version.

There's three major categories for the changes that we have considered in updating the legislation.

First, in order to reduce burdens on retailers, we adopted the recommendation from this former CBED committee to exempt all hotels, restaurants, bars, and retail establishments with less than 2,000 square feet, or with on-premises consumption from the requirement to redeem containers on site.

We also capped the number of containers that may be redeemed at 250 per day, also consistent with CBED's recommendation to help address and prevent fraud, which is also the approach that's been taken in Connecticut's bottle law.

The committee also struck language that would have increased the bottle deposit after five years if redemption targets in the bill have not been met.

Second, to lower fees for small distributors, including brewers, distillers, and wine importers.

The revised draft exempts all distributors that distribute less than two million containers from paying registration fees into the stewardship program.

And distributors selling between two million and ten million containers per year would pay less than a cent per container.

These entities are exempted from paying into the bottle program, like our larger distributors.

However, small distributors must still register their products in the program, and the committee looks forward to testimony from our smaller distributors on whether this still creates a significant burden or not.

Among the other changes, the committee has also included language to ensure that communities and businesses will be guaranteed to have access to container collection across the district to allow bids and other nonprofit entities to partner with the bottle program and clarifies how large redemption centers will function as a part of the program.

Now, witnesses today were limited by invitation, but members of the public are still encouraged and are able to submit written testimony using the council's hearing management system at Limbs.dccouncil.gov backslash hearings.

I want to turn to colleagues for any opening statements they have before I call our first panel.

So we have the lead author of the bill, Councilmember Brianna Doe who's joined us, and I want to turn to you, Councillor Nadeau, for any opening statement you have.

Thank you so much, Mr.

Chairman.

Thank you for convening us today.

It is an honor actually to be here at this round table because uh this bill has been such a labor of love for so many of the people in the room here, and your stewardship of it, pun intended, is uh is so important at this critical juncture.

DC has a litter problem.

Rivers, streets, sidewalks, alleys, yards, and everything has a cost.

Disposing of a product or its packaging has a cost.

In the case of beverages with disposable containers, there's a huge cost, and it's been paid by taxpayers.

As chair of the public works and Operations committee, I've learned in great detail just how much the district has to budget to clean up litter.

By some metrics, we spend more money per mile to clean our streets than any other city in the country, and 80% of that litter is comprised of beverage containers.

Six hundred and seventeen million bottles and cans per year are distributed and sold in the district, and we are paying for every single one of them.

And it's no wonder that the big beverage industry doesn't want this bill.

They don't want to pay for the cost to clean up the mess they create.

They're throwing everything at the wall.

It'll cost consumers more for their beverages.

Categorically false.

They cannot point to a single study to back that up.

Consumers get back every cent they pay for the deposit.

Fraudsters will collect empty containers in Maryland and Virginia and bring them by the truckload to DC to redeem them, even though the legislation includes clear solutions to that issue.

This is the same industry that fought off a proposed bottle bill in the 80s by scaremongering people saying the people would get AIDS from the bottle redemption.

Disappointing?

Yes.

Surprising?

No.

In fact, the fact is that it is these large national corporations themselves that are fighting.

The fact that it's them fighting tells you everything you need to know.

There are no consumer focused groups telling us this will harm consumers because it won't.

No good government folks are worried about fraud because in the 10 states with bottle bills with more than 90 million residents, a quarter of the U.S.

population, it just doesn't happen much at all.

What does happen with bottle bills?

More than 80% of the litter on streets in parks, public trash cans, and our rivers disappear almost overnight.

People who struggle to find other work find a new way to earn side income, cleaning up on our public spaces in the process.

An entire industry of small entrepreneurs appears ready to haul away empties for businesses because there's an economic incentive for them, and because it makes the challenge of collecting and returning containers for grocery stores, small retail stores, restaurants, and bars so much easier.

Churches, high school theater clubs, softball teams hold bottle and can drives, raising money for their organizations and making it easier for households to easily get rid of their containers if they don't want or need to get their deposit back for themselves.

People have lived in states with beverage container redemption, look at this debate and wonder what we're even talking about.

I grew up in Michigan, which has had bottle and can deposit since 1978.

It was just a part of life.

We'd pay a deposit on the bottles and cans we purchased, throw the empties in a bag in the mud room, and from time to time bring them back to the grocery store and get our deposit back.

I don't want to dismiss the added requirements.

Businesses will have to adjust some aspects of how they operate.

And it is why we have worked so hard in our bill and now in this committee to make adjustments and exemptions to accommodate these realities.

So I once again want to thank Councilmember Allen and his committee staff for their deep drive dive into the legislation for the changes they've proposed.

And I love them all except one, but it's a significant one.

There's a provision in legislation, as we introduced it, that triggers an increase in the container deposit when the redemption rate drops below the target in the law for two years in a row.

The deposit is the backbone of the whole system.

It's what incentivizes people to return their empties and canners to collect bottles and cans on the street and makes the entrepreneurial industry of haulers and collectors work.

It is almost impossible to enact an increase because legislatures are afraid to do it.

In Massachusetts and New York, the deposit is just five cents, and they've never been able to successfully raise it since the implementation in the 70s and 80s.

Redemption rates that were over 80% have dropped to 34%, and it's not working anymore.

And that's because every time someone suggests an increase, the industry comes out swinging again and again.

So we must make sure that there's a clear and evidence-based process for actually increasing that value.

Otherwise, this law will die by attrition.

The bottom line today, though, is that a bottle bill will remove a significant amount of litter from our neighborhoods and parks and the Anacostia and Potomac Rivers.

The cost of beverages will remain the same.

Fraud will be minimal, especially when the industry sets its mind to making sure of it because they have the incentive.

Thank you, Mr.

Chairman.

Thank you very much.

I appreciate it.

All right, we're going to call our first panel of witnesses.

I do expect that we'll have other members that are going to join us over the course of the day.

We'll make sure we give them time for an opening statement as well.

So let me call our first panel.

This panel is going to be a combination of folks that are here in person as well as online.

But we have Christy Petchi, the executive director of Just Zero.

We have Representative Amy Sheldon, who's the chair of the Vermont House Committee on Environment, and I believe that Representative Sheldon may not be joining online at this exact moment, but we will, whenever we get Representative Sheldon back, we'll make sure we include her.

We have Ginny Farrell, who's the committee director of the New York State Assembly Environmental Conservation Committee.

Brendan Williams Keith, DC Association of Beverage Alcohol Wholesalers.

Mary Donovan, an economist with Elevated Insights Group, and Jordan Cotton, CEO and co-founder of Cotton and Reed.

Hey, Jordan.

Good morning to you all.

Thank you all for being here.

So Ms.

Patchy, I'm gonna turn to you to kick us off.

Good morning.

Thank you so much for having me, and thank you so much for holding this round table.

I think it's so important that you uh give everyone a chance to really fill in the details on this.

I want to thank uh not only the council but also all the folks in the community who have worked so hard on this bill.

Uh it is a bill.

I I read it again yesterday.

It is a bill that reflects really excellent and thoughtful leadership and also good policymaking.

And I say that as someone who's read bottle bills from all over the world.

So I really, you know, bravo.

I just want to uh start by saying that.

My name is Kirsty Petchi.

I'm the executive director of Just Zero.

We're a national nonprofit that works on solid waste issues, promoting zero waste practices across the country.

Uh what makes a bottle bill work, and the counselor already referred to a lot of the pieces that are really important, are four things.

You need to have the right containers.

Uh, you need it to be convenient for people to get their containers back.

The industry must be responsible for the end life of those containers.

They must be paying for it.

And then the deposit must be high enough and adjusted as needed so the containers come back.

Uh, that incentive is crucial.

Uh, this bill is excellent.

It will set up an amazing system that is not only smart, but it's really a fair system, and a lot of the changes that were recently made, especially make it chase make it very fair.

However, I do want to call out that the original version coming from Counselor Nodeau's office had a lot of fantastic ideas in it too.

And it's really just an excellent, excellent bill.

Um, very quickly, glass, plastic, and aluminum when sorted, are actually recyclable.

So it's really important that we can include all the beverage containers.

Many states refer to only soda or another, you know, or soda or beer, for instance, like we have in Massachusetts.

That's problematic.

You want it to be based on the containers, and you want it to be nips to three liters the way this one is.

The small little liquor bottles all the way up to three liters.

Fantastic job there.

The bagdrop, as well as retailers, as well as redemption centers and including the RBM system and having the DOEE have the authority to review all of that and make sure that's working properly.

Again, excellent, very very well done.

It should be very convenient.

Uh, enough lead time to get it set up if it's January 2028, so again, fantastic.

The handling fee at four cents should be enough, especially along with the other um the other uh registration fees that are included to actually pay for the system.

So, again, fantastic job on all that.

Um, the 10 cent deposit is definitely the right place to start.

Fantastic.

Again, we've seen in places like Michigan and Oregon, where we have a 10 cent deposit, that people are still bringing their bottles and cans back at high levels in the high 70s or 80%, you know, 80% plus percent level.

Um, I also want to call out a lot of the carve outs for fairness that I think are fantastic.

Uh, allowing uh smaller stores who have less than 2,000 square feet to not have to be resumption centers is fantastic.

Uh again, something that I believe uh Councillor Alan Chair Allen added to the bill, the less than two million dollar uh two million unit containers uh institutions not having to have to pay the registration fee.

Again, I think that's great, and I really am glad that you were thoughtful enough to put that in there.

I would like to mention too, which sometimes people don't realize this and get unless they get through the whole bill, that 25% of the unclaimed deposits are gonna go back to the stewardship organization.

Again, that is a way to balance the system out and make sure that it's working.

Um, the curbside piece also that the curbside uh systems can redeem containers as long as they're clean until 2030, but that doesn't count towards the redemption rate.

Again, that's a way to ease the system, and it is again very fair in a way to bring the waste industry to even things out for them, which I think again is well done.

Um, and then finally, that 75% of the unclaimed redemption fees are gonna go to the program again.

So I again a very fair and balanced bill, as well as one that was going to work really, really well, I think.

I am very confident about a lot of the provisions that have put in been put in here for an authority that DOEE has here in order to enforce this as well.

So, again, fantastic work.

The carve outs for fairness, every piece of this is good.

Uh, three things that I would like to call out.

One, as counselor Nadeau already mentioned, many times fraud is raised on in these bills by the industry.

Should prevent most, if not all of the fraud issues, you know, but where that would be concerned we would be concerned about.

For instance, the uh ability of the redemption center to ask for a license and registration from folks who are bringing in a lot of containers.

Uh the authority that do OE has, reporting, etc.

Um, and also actual enforcement power, which is something that Connecticut just instituted, you've already got that here.

So there's a whole list of fantastic anti-fraud measures that you've already put in here that I feel very confident are going to be excellent.

I would say that I'm not concerned with people with trucks bringing a lot of containers back fraud.

I'm much more concerned with the beverage industry underreporting what they're actually selling.

That is actually the kind of fraud that I would ask DOE to focus on more.

I think that that already is taken care of in this, but it's something to be aware of.

Two other quick points.

Um, as the council already said, there is no evidence that these systems decrease sale or decrease sales of beverages or increase the cost of beverages for consumers.

Um, as beverage industry says, but we have no reports or evidence that show that.

Uh, so I think that that is something that we should not be concerned about.

And then lastly, to reiterate what the counselor also said, the deposit is crucial to the system.

Vermont just increased the handling fee, but they were not able to increase the deposit, even though the um the uh Senate and House voted to do so twice.

The governor vetoed it twice.

Increasing a deposit is hard.

We've been trying to decrease the deposit increase the deposit in Massachusetts since 2009.

Uh we've increased the handling fee, but the deposit is the place that makes the system really work.

And there's a reason why the beverage company works so hard to make sure that it doesn't get increased.

They put a millions of dollars in Massachusetts into making sure it did not get increased.

So I would definitely reiterate that we need to have that be evaluated by DOEE and a trigger for when the redemption level has dipped below what it's supposed to be two years in a row, and a process with DOE.

So that would be it.

But otherwise, I just want to say Bravo, thank you so much.

That I'm done.

Thank you so much.

Great, great work.

Thank you very much.

Appreciate it.

Um, next let me turn to Ginny Farrell who's joining us on Zoom, uh, who is with the New York State Assembly Environment Conservation Committee.

Ms.

Farrell, thank you for joining us.

Thank you so much for having me.

Uh good morning, everyone.

And um, I think it's fantastic that DC is looking at doing a deposit container return.

Um New York has had one since 1982.

We did an update in 2009, and we've been trying to do an additional update that we've not been successful doing, but even with that, um, we have a 70% about it's just under 70% redemption rate.

It has made a significant difference in litter.

Um, another important thing to think about when you're looking at beverage container returns, a deposit system, is that you're actually getting better materials back.

So when you look at materials, uh DC has single stream recycling, but like a lot of places in New York, single stream recycling is not good for me to getting that material back, which you can then use for new bottles, cans, things like that.

Um, the best possible material recovery is through a deposit return system, which is beverage containers.

So that um even I guarantee you the different people that are creating bottles and cans right now, the materials that they want for their post-consumer recycled content is from deposit containers in other states because it is sorted, it's generally pretty clean, and it's a great way to do it.

When you get to something like glass, glass through single stream is basically not reusable, but through a deposit contain returner system, it's infinitely recyclable.

Um, the same thing with metals.

They are a slightly better.

You can get some quality materials through a single stream because metals are kind of easier to clean off and keep whole, but it's still not as good as you get through beverage container return.

And that's part of the cost savings for this, because if you think about it, how much does DC spend in solid waste?

A lot of beverage containers go directly into solid waste when you don't have a deposit on it.

Um I would assume that there's no landfills or incinerators in DC itself, so you have to export all of those at a tremendous cost.

That is just removed from the entire system.

So not only are you cleaning up litter, you're also saving the constituents of Washington, DC, a lot of money in solid waste.

Um the cost, there hasn't been any data that has shown that costs have gone gone up for the consumer.

Um packaging costs on a whole when it comes to the product are usually about 4% of the cost of the product.

Um that might be different with beverages because the beverage themselves is not a huge cost, but it's still a minor, minor part of the overall cost.

The system itself, when you get back that material, um, it it is it's just creates a better system.

So on a whole, while there's a lot of fear, I think, from um different groups going into a beverage container return system.

It's better for the environment, but it's also better when it comes to solid waste and actually keeping that material in the United States where you can easily move it from one place to another.

And when it comes to beverages, the because they're heavier, liquid is heavier, you don't have to ship them as far.

So there's a lot of savings across the board when you shift to a deposit container return system.

Um I will say the 10 cents is smart.

I wish we could move to that in New York State because every state that has moved to 10 cents has an over 90% return rate.

Um other states with a five cent hover between like 60 and 70 percent.

So um that's definitely a great thing, and it also helps create uh that we have a whole system of people that um rely on returning containers for their job.

That's what they do, and it's all part of a really great system.

So um, thrilled that DC is looking at this and moving in this direction and happy to be here.

Thank you.

Absolutely, thank you very much.

Um, and I know you're on Zoom, so if you're able to hang in there for a little bit, we'll come back with some questions in just a little bit.

Uh next, let me turn to Mr.

Williams Keefe.

Good morning.

Good morning.

My name is Brendan Williams Keith, and I'm testifying on behalf of the District of Columbia Association of Beverage Alcohol Wholesalers, the district's beer, wine, and spirits distributors.

We like many local community and business voices have serious and wide-ranging concerns with the bill, both as introduced and in the revised version circulated by the committee.

Bill 2658 would create a costly complicated and high risk redemption system at exactly the wrong time for the district.

The cost study prepared by Mary Donovan of Validated Insights Group makes clear that this is not a modest undertaking.

It's a new citywide logistics financial redemption compliance and enforcement program.

The study estimates 57.6 million dollars in startup costs and 38 million dollars in annual program costs before fraud losses and other unmodeled expenses.

This massive expense would be fronted by the district just as it works to navigate an impending $800 million fiscal cliff in FY28.

Supporters describe the program as cost neutral, but that's simply not the case.

The district would be the sole source of startup funds for the redemption organization, a new entity with no ability to borrow privately.

Again, cost estimates put this at 57 million to the district's general fund with no clear timeline on repayment.

DOE would oversee the system.

Other agencies would be pulled into licensing inspections, sanitation issues, compliance, complaints, audits, enforcement, fraud prevention.

If the system underperforms, fraud is higher than expensive, or if the stewardship organization cannot meet its obligations, the district will be asked to respond with operating funds.

DC is uniquely vulnerable to that outcome.

The bill also places performance or places disproportionate burdens on DC wholesalers.

In effect, wholesalers would become the bank, the compliance office, and the risk-bearing entity of the program for a program that they don't control.

The committee changes would impose new mandatory collection responsibilities on local distributors, uniquely disadvantaging DC-based operations, driving up costs that will invariably flow to consumers.

Under the bill, DC based distributors will be required to surrender their facilities to collect and redeem beverage containers from retailers and recycling collectors without limitation.

Our wholesalers will have to pay deposits twice and on beverages that we do not sell.

The amounts this amounts to a taking by the government, plain and clear, while members would be forced to carry all the risk.

Our members cannot control whether a consumer returns a container.

They cannot control whether a container was purchased in DC Maryland or Virginia.

They cannot control whether a retailer properly screens returns.

They cannot control whether fraud occurs.

They cannot control whether out of district distributors participate fully on time or at all.

Yet under this bill, DC-based wholesalers would be financially exposed to all these vulnerable, all these variables.

That is not a balanced and reasonable approach.

It's an open-ended mandate placed on a narrow group of local employers.

The revised committee print attempts to create carve outs for smaller retailers and distributors as defined by the bill.

But those changes don't cure the bill's fundamental flaws.

In fact, the revised print introduces new complexities and ambiguities that could further increase cost.

Section 104C, for example, appears to require that a quote retailer redemption facility or other person, unquote, be reimbursed for handling fees without clearly defining who those quote other persons are or how duplicative claims would be prevented.

The language could turn handling fee reimbursements into an open-ended cost driver, allowing multiple parties to seek payment for overlapping container handling activities.

The stewardship organization is supposed to pay handling fees, but it's unclear how those payments are funded when handling fees are expressly excluded from distributor membership fees.

Despite the committee's changes, the bill still creates a costly new redemption bureaucracy with highly questionable financial viability, still imposes big costs on local retailers, manufacturers, and distributors, still divert 75% of unclaimed deposits away from the operating system, still relies on a not yet created stewardship organization, still imposes wildly unrealistic redemption targets, and still leaves the district exposed to cross-border fraud and implementation risk at the very moment FY28 fiscal pressures intensify.

Meanwhile, critical services remain underfunded and dependent on contingent revenue.

Those programs serve residents facing eviction, young people at risk of violence, and the public workforce that keeps the district running.

So the question for the council is simple Should the district be mobilizing tens of millions of dollars to build a new redemption bureaucracy that harms local businesses and drives up costs of the register for district residents, or should that capacity be directed toward the services residents urgently need right now?

In our view, the answer is clear.

Advancing this bill at this fiscal moment would foist a duplicative, costly and burdensome unproven redemption scheme on the district to satisfy a small group of advocates.

It would privilege the demands of a narrow constituency over the needs of the residents, workers, and local businesses who are already carrying the weight of the district's affordability crisis.

For these reasons, DC ABAW respectfully urges the committee not to advance Bill 2658.

Thank you for the opportunity to testify.

Thank you very much.

Uh next, Ms.

Delvin, we'll go to you.

Good morning.

That should be better.

All right.

Councilman Allen.

Members of the council.

Thank you for the opportunity to be here today.

My name is Mary Donovan.

Sorry to interrupt you.

Could you pull the mic just a little closer?

We'll make sure that it picks you up.

There you go.

Actually, I talked too loud, but perfect not today.

You're just right.

My name is Mary Donovan.

I'm an economist and managing director of elevated insights group.

I authored a study on the cost, risks, and impacts of this bill.

So thank you for the opportunity to be here today and to share the key findings of our study and also comment on some of the amendments in the new bill that was recently released.

The bottom line of this bill is straightforward.

It is, it will create a costly system with significant fraud, liability, and solvency risks.

More specifically, our research found that the cost of the proposed system is substantial.

Now, you know this, but let's talk about what this requires.

It requires distributors to finance and participate in a nonprofit stewardship organization, which is responsible for managing financial transactions, operating redemption centers, coordinating collection and transportation, managing a complex IT system, preventing fraud, reporting out to DOEE, among other requirements.

Our analysis conservatively estimates that the program would require more than 57 million in startup funding.

And that is not including the cost to acquire or obtain the industrial land, which we know is hard to come across in the district.

Once launched, the program would cost an estimated $38 million dollars per year before fraud losses and expenses such as paying back DOEE and reimbursable costs.

The amended bill from my review does not cut the cost or reduce the cost in any way.

It only transfers the burden.

The next finding is that the program is indeed highly vulnerable to fraud.

Existing deposit programs have found that fraud is expensive to address and very significant.

Some states have reported having spent tens or even hundreds of millions of dollars on this issue.

As you know, the district is surrounded by state and federal jurisdictions without comparable programs.

This creates what we call a clear arbitrage risk.

Our analysis illustrates the financial losses at a range of levels.

So for example at 10% fraud the SO would spend 5.7 million annually on illicit refunds and some related handling fees that doesn't include the cost of enforcement or the added operating cost of processing those bottles.

At 25% fraud which is not unrealistic losses exceed 14 million.

At 50% fraud it's double that and just for context at 14 million fraud that's a 40% increase of our estimated program cost.

That's a very significant expenditure the next finding is related to the disproportionate liability facing DC's distributors.

Since most containers in DC are sold by out of district distributors if all firms participate in the program the estimated cost averages six cents per container but if out of district participation is delayed incomplete or difficult to enforce local distributors' costs could rise by over 280% to 23 cents per container the amended bill also requires DC's distributors to essentially become collection sites which increases the cost and adds to the logistical and financial complexities of the system these expenses could significantly compress or eliminate the profitability of DC's distributors.

The fourth finding is related to solvency.

The SO, the steward chip organization faces a real risk of insolvency and that risk increases as fraud rises and distributor participation declines.

The SO needs enough revenue reserves and retained unclaimed deposits to cover its expenses including operating cost, refund obligations, handling fees debt payments and fraud losses and our analysis shows a meaningful probability of insolvency even under relatively favorable conditions.

The final finding is that the program creates a fragmented and complex administrative financial and enforcement responsibilities for the district at a difficult time.

Even with the registration fees the reimbursed DOEE cost the district could face financial and capacity pressures fraud enforcement would compete with existing public safety needs at a time when MPD is experiencing significant staffing shortages.

So in closing let me reiterate the bill would have substantial startup and operating cost there is a big risk of fraud there's also a solvency risk.

The bill finally places disproportionate financial pressure on DC based distributors I'm happy to answer any questions about our research and thank you again for the opportunity to share it today.

Thank you very much.

Alright and uh last on this panel we're going to turn to Jordan Cotton who's the CEO and co-founder of Cotton and Reed.

Good morning.

Good morning my name is Jordan Cotton I own and operate Cotton and Reed rum distillers in Ward 5.

We've been producing rum in DC for 10 years now.

First I want to say that I support the overall goals of the legislation cleaning up the streets in my neighborhood would would definitely be a good thing.

As a small beverage producer, I have a few notes on implementation though that I would love to share.

First, for just a little bit of context on how the spirits industry is uh set up.

So a tiny handful of producers are responsible for about 95% of the volume in the spirits industry.

The thousands of small distilleries like me that have popped up around the country in the last decade, two decades kind of fight over the remaining scraps there.

So any regulation that imposes kind of a fixed burden across the board on producers of whatever size disproportionately burdens us because we don't have, you know, armies of compliance people to throw out problems.

We have me who already has too many problems.

So to that end, I have uh a couple different issues that I want to talk through in the bill.

First and most importantly, I um very much in support of and appreciate the exemption from the registration uh fee that is in this draft of the bill for producers under two million containers uh from the spirits industry standpoint, which is all I can speak to, that that threshold would set the burden at those large producers who are responsible for the bulk of those containers and um and waste um very much appreciate that.

Um, on the uh UPC point, um I appreciate that there's an option and that that's set up as kind of an incentive to provide a district-specific UPC.

Um, but uh depending on what the change in that fee is, depending on if you go for that, would have a really big impact on uh what our ultimate decision would be if that's applying to the registration fee as opposed to the stewardship membership organization fee, which was not clear to me uh from my read.

Um, so would want to have a better understanding of how that works.

Um, the uh stewardship organization membership um is uh one that I do have an issue with.

Uh all of us tiny producers that each of whom are rounding errors in terms of the number of containers out there constitute the vast majority of actual organizations that would be members of the stewardship organization.

So the stewardship organization would spend a lot of time, money, effort chasing around tiny tiny members who uh you know account for almost no containers out there on the street.

So um uh I would advocate if there was an option to um look at stewardship organization exemption for small producers as well, uh, because one that's a compliance burden for us, um reporting burden, and it's not clear in here what that the actual monetary burden would be as well.

But from the the organization standpoint, you'd be chasing around a lot of uh little guys like me.

Um let's see.

If there is an exemption or reduction in um fees for small producers in the stewardship organization, I would advocate writing that into the statute itself.

Ditto for um the diversity of organizations represented on the board of the stewardship organization, which is addressed in um to my eye, kind of broad vague terms in the statute says it should represent the diversity of the industry.

But uh I would be concerned as a small producer that uh without specific requirements that small local manufacturers be represented, uh we'd be boxed out by the the big guys um who would want to assess those fees across the board if that's not written in the statute.

Um let's see that addresses most of my my big issues with this.

So appreciate it, everybody.

Absolutely.

Thank you very much.

Um and then Mr.

Howton, I don't think we had your testimony submitted yet.

So if we could have two recommendations there, if we can make sure we get that as a submitted to the committee.

Definitely.

All right, fantastic.

Um all right, thank you everybody for your testimony.

Let me dig in for a little bit with some questions here.

Um I might kind of follow up and track and order the way Ray testified.

So um, Ms.

Patch, let me start with you.

Um of the largest concerns that we hear about bottle deposit programs overall is saying it's an added cost for both customers and small retailers.

Are there economic studies that you're aware of that confirm the cost of beverages are higher in states that have bottle bills?

Absolutely not.

Um container Recycling Institute, Susan Collins, uh and Reloop did a study looking at uh whether sales decreased, you know, which is a slightly different, but looked at whether sales decreased after deposit return systems were put in place around the world, or if the um deposit return systems uh changed or evolved or were modernized if there were changes.

Uh and sales did not decrease.

And there is no the reason for that is that there's no correlation between the systems being in place and an increase in the cost of beverages.

Um beverage industries, as uh the uh we heard from New York State, but the beverage industry's costs and how they set the cost for beverages is complicated, but it has more to do what the guy on the next shelf is doing than it does uh a small fee like this, and the packaging is a very small part of the can of the cost overall.

Um remember too that I was recently in a meeting with a large beverage producer in Massachusetts, and they told me, as we just heard from New York, that um they get a cent back for the materials for the bottle bill.

So again, the actual value of the material because it's so clean and because it's kept separate, is also another cost center.

So we do not know of uh a harm to the bit to the beverage industry.

And then also uh to this gentleman's point earlier, the beverage industry is made of up of whales and then tiny goldfish.

Um the big companies uh can handle this and it should be the ones to his point that are paying for most of the system.

Yeah, I guess um part of what we have wrestled with, and we have tried to reflect that in the revised draft, and that's why we have the hearing today to keep getting this stuff of feedback, is um using your whales and goldfish.

Um, the whatever we do for our local brewers, local distillers, the smaller companies, they don't have the same uh whale-like ability to spread out costs or impact.

So that's why, for example, trying to carve out the exemption on the stewardship fee.

Try so I I do believe there is a distinction from our from our smaller producers than the big ones.

And I I think that as we keep tackling this and as we hear the feedback today, we will we will continue to have to think through strategies that make this system work, but also not create uh an undue burden that then has to rest on the smaller folks that just don't have the same bandwidth.

Mr.

Cotton kind of touched on on that about uh everything from compliance officers and staffing to overall costs, right?

So that's that is a reality, I think, and we're gonna wrestle with that.

I I think you've done a good job at trying to thread that needle, but I would say, and again, you'd you'd want to look at the numbers and talk to DOEE about this for a minute too.

Um, but I would say that I am not concerned about the small distributors and producers paying into the system.

I think it's important to have their containers included, so that the containers say it's part of the redemption system, because you don't want to consume confuse consumers.

You want to make sure that people aren't thinking, oh, wait a minute, is this beer a local beer or a uh a nationally produced beer?

You know, you don't want them to think about that.

So all the containers should be in the dis in the system, but in my opinion, honestly, the small producers, if you said to me we're not charging the small producers not only for the registration fees, but also they're not going to be part or barely part, what however you wanted to do it for the handling fees, that's not honestly.

I think the numbers work out because I think what we're talking about 98% versus 2% isn't far from the truth.

Many of the company, many of the drinks that you think of as being independent drinks, I think honest tea was one of them, for instance, is then purchased by Coke or Pepsi.

Many of these beverages are actually the large company beverages, they just have a different label or a different formula in them.

So to me, uh you're in the right direction, and I think that that's more important than uh than having every person, you know, every small company, you know, into the system in that way.

Yeah.

Well, let me kind of if I can pull you in, Mr.

Croton on that.

Um, so I this morning, I I live four blocks away from Union Station.

Uh so this morning, as I walked from my house to jump on metro to come down here, I decided let me count how many bottles and cans do I see on my four-block walk.

It's 26 on the ground.

Not a single one of them was cotton reed.

Um you know exactly uh kind of the types of bottles and cans that I'm seeing, right?

Uh, none of them were our local uh producers, but um that was 26 in just four blocks.

Um, and that is an experience you're gonna see all over our city with just bottles and cans all over the sidewalk.

And I think we all have an interest in getting that type of litter out because we are going to pay for it uh in the river, we're gonna pay for it with our solid waste, we're gonna pay for it in so many other ways.

But let me just pull that thread a little more though, uh, Mr.

Cotton, about how do we how best do we try to distinguish between our smaller producers, which I want to support and continue to grow uh that that part of our economy that we have.

Um at the same time, I do think there's a reality that if I were if I'm collecting my bottles and my cans at home, I'm gonna come back to our redemption center.

There is at some point a burden that I put on me, the consumer, to say, alright, well, if I do a total exemption, then okay, this can uh of water or beer or whatever it is, this one I can go return, but this one I can't.

I'm concerned that we would ultimately have the consumers have a really hard time navigating which ones do I put in, which ones do I not.

I mean, you'd have to ask people to track which brand they're drinking and to know if that triggers or not.

But what are especially as just one of our local and great, but smaller uh producers.

What are some of the other ways that we need to think about the difference between you and, as you highlighted, the other ninety-five percent of the market?

Um, yeah, that's a great point.

It would be a challenge for people to try and sort through that at home.

And I'm I'm certainly not an expert on how these programs work.

I just know what what I'm dealing with all day every day.

Um but um yeah, in terms of how to think of us versus others, I think sometimes there can be a tendency to think of um alcohol brands a little bit monolithically.

Uh certainly from the the way we get approached to sponsor various things.

Uh, you know, people are like, yeah, we'll email Bacardi and we'll email Cotton and Reed.

And our marketing budget, you know, doesn't exist.

So um uh yeah, the the small alcohol brands of the district of the country are um, you know, our day-to-day is much more like that of a restaurant that's kind of scraping by and everybody's wearing a zillion hats and we're you know running around with our hair on fire all the time um more than we are like a you know Tito's or or what have you.

Um so uh uh is that answer your question?

Yeah, it's it's yeah, it does, and and that's part of what we're trying to really wrestle with here.

And I think you see that reflected a little bit in the revised draft, right?

Draw that distinction.

Um, but I also know I I'll likely hear more feedback over the course of the day around other ways to help distinguish between smaller and local brewers, distillers, and how we distinguish that through a policy.

Um I am gonna come back for a second round because I'm already out of my eight minutes, uh, because Miss Donovan and Mr.

Wimsky, if I have some questions for you as well.

But let me turn to Councilman Adot for a round of questions, and then I'm gonna come back with a second round after that.

Nope.

Apparently my mic's been on this whole time.

Oops.

Okay.

Um good thing I wasn't muttering to myself.

Thank you so much to this panel for your testimony.

Um, truly appreciate it.

Some of you have been involved with this um for years now, so appreciate all your participation.

Um Ms.

Hetchy, can you talk about what's happening to redemption rates in Massachusetts?

How much have they dropped and why?

So the redemption rate started off high in the early 80s.

Uh, even 10 years ago, it had gone down to about 67%, so about you know, close to 70%.

And now we're in 34, 32 percent.

Um, we also never included all the beverages to the point where we're just talking about.

It's much better for the consumer if all of the beverages that are in glass, plastic, and aluminum of certain sizes are included, regardless of whether you have the producer pay into the system.

And um that coupled with five cents just not being worth what five cents is worth now, has made us the lowest redeeming state in the country for a bottle bell.

It's still the best recycling system and program in Massachusetts, uh as far as not only quality of material but how much material we're getting back, but it's uh much less of a bottle bill than it should be.

Have you tried to increase the deposit?

Oh my, have we tried.

Yeah, I've been working to increase the bottle bill deposit in Massachusetts since 2009.

There was a ballot initiative in 2014 in which the beverage industry spent about 10 million dollars opposing the ballot initiative.

Um lobbyists have been working on both sides throughout.

It's been a it's been a battle royale.

And quite honestly, if the bill had been drafted to include all the containers in the first place, and also to have an automatic increase, or our handling fee, again, the part that pays for the movement of the materials, the handling fee is reviewed uh regularly by our Department of Environmental Protection and has been increased over time.

So that works.

There's no reason not to do that for a deposit, and it honestly I would not know as much about bottle bills as I do now if it weren't for that.

But unfortunately, and we've seen this across the country, Vermont, New York, this has been something that's been plaguing these systems for decades.

Why do you think that is?

Because I understand the resistance to setting the system up in the first place, right?

Nobody wants to have to pay for the litter they produce, it seems.

But I mean, the companies aren't paying the deposit.

So what's the problem with having the consumers pay a different deposit?

Why are they so opposed?

The deposit is the backbone of a system.

If you asked me to write a two-line bottle bill, it would say these are the containers included, and the second line would be a deposit.

If your redemption rate dips, increase the deposit automatically.

And that would be enough of a system, honestly, to work.

Stewardship organization is fine.

There was some discussion of the burden it's gonna be on stewardship organization.

Connecticut was given the opportunity to create a stewardship organization, and the industry decided not to two years ago.

We don't have one in Massachusetts.

There's lots of stuff in this bill that will be good and I think uh create a stronger system.

But the key points are deposit and what's being included.

Now, the other reason I think the beverage industry focuses on the deposit is it's very much easier to create a case for don't uh don't uh have a five cent, have a five cent deposit go to ten cents than it is don't increase the handling fee by a half a cent.

You know, that's not as compelling.

The but the handling fee is what the industry is actually paying for.

The deposit you pay in and you get back.

Yeah.

So it's it's really a marketing strategy and also understanding how important that incentive is to getting people to take their bottles and cans out of the trash and bring them in to be redeemed.

Thank you for that.

Ms.

Farrell, thank you so much for taking the time to testify today.

Truly appreciate it.

Um you mentioned some of the challenges New York State has had in trying to get the deposit amount increased.

Could you just briefly go into that a little bit more so we can understand the dynamics at play?

Um, industry bites uh any sort of changes.

And and some of it is a legitimate thing that there can be it's important to get input and feedback from across the board, but um I think a lot of the reasons why there's a pushback on the deposit is because it's, as was just said, it's an easier thing to understand and it's an easy way to kill the bill.

Um so I that's I I think there's a lot of different pushback with that.

Um when it comes to um actual individual legislators, the concerns can be about um how people can get back their deposit.

So if you are from a poorer place and they're like in New York State, we already have a system.

So if it's hard for people to get their bottles and cans redeemed, which it can be in very dense populated places that have expensive real estate like New York City, um, that can kind of shift the concept where you're concerned that you're gonna that your um constituents won't actually be able to get that deposit back.

So there are some pieces to that that do need to be thought through, but um, in general, what I would say with costs is if I went right now and grabbed uh like a Coca-Cola um and compared that cost to what you have in DC, it's probably the same thing, if not even slightly less where I am in Albany than it is in DC.

So I I don't think that the concerns about cost bear out at all.

Um, but there's a lot of concern about any change, I would say, and especially when it comes to industry and large industry because any changes um do they have to look at a much broader scale.

So I think that they are more likely to fight against things because for them there is a larger cost once that cost is that initial cost of changing the labeling or things like that is done.

I think it changes things slightly, but um there's certainly concern about that initial pushback.

Thank you.

I appreciate that so much.

Um Ms.

Donovan, thank you so much for sharing your research.

Um, can you tell us who funded the study?

Yes.

Um, I think I'm I'm too short for this.

Um the research is my own.

The funding for this research came from the DC Association for beverage alcohol wholesalers.

Thank you.

I appreciate it.

Yes.

Thank you, Mr.

Chairman.

Thank you.

Um Ms.

Farrell, I'm gonna ask you a quick question and I'm gonna turn back some of our other panels too.

Um, you talked in your testimony about um the quality of the return containers between single stream, which is what we have for just our general recycling, versus a bottle deposit return.

Why does that matter?

Why does it matter the quality of the container?

The well, it's the quality of the material that you get from the container.

So I mean, to be clear, the the container itself um that quality, I guess doesn't matter as much, but once you actually get the material, so when you look at single stream recycling where you put everything together, um it's also in the United States we're notorious over recyclers.

So we put in everything possible into that big giant recycling bin.

Um in my neighborhood, their giant blue bins, and we throw everything in, and there's a lot of contamination.

That contamination um gets into all of the different materials and it makes a lot of it quite frankly garbage.

So a lot of single stream recycling um it turns into garbage, or it is dramatically um reduces the quality of that material that you get from it.

So again, if you're talking, and glass is the best example.

So with glass with single stream recycling, because glass breaks, um, glass is taken out last.

So all of the detritus from your container, if there's still food in there, if somebody threw something else in, that becomes part of the quote unquote glass.

It's not at all usable for glass.

Um that then when you get a glass container, um, and I happen to have this is my glass container I'm drinking out of, that glass is infinitely recyclable if it is kept with other glass, um, and it's all broken together as glass, and you're able to keep as much contamination out of it as possible.

Single stream recycling just gives you a ton of contamination.

When you're separating the glass and you the way a deposit container return system is, that material is just kept beautifully.

So you're really able to use it over and over and over again.

So in the overall system, when we're looking at um solid waste and keeping things out of solid waste and actually using um that material again, which as our world changes and there's less materials, it becomes more and more important.

So even for something like glass, which comes from sand, we're running out of sand.

We need to recycle that glass to keep that that material there.

If it's part of single stream recycling, you can't use it for another container.

Okay effectively.

And then one other quick question for you.

Um New York obviously has uh, I'm sure you have small smaller brewers and distillers uh and an entire economy and marketplace there.

Does New York try to distinguish, or what are there any strategies that New York has used to try to look at this?

Uh, like how much of it, how much of an issue is this in New York in your conversations?

So it the interesting thing is um, so in New York, um wine and liquor is not part of our current um deposit return system.

So um our initial bottle bill was done in 1982.

There are many fewer beverages back then, and it also didn't include all beverages.

But wine and spirits are nearer breweries, would be right?

Correct.

So if you think about it, in 1982, there was probably like Budweiser and Jenny Premail.

And now like the larger growth of smaller breweries, things like that.

So they started where the deposit container return was already there.

So if you were a small brewer in New York State, you already had to work within the system.

It was expected of you to be part of that.

We have a different conversation when we've been trying to expand the bottle bill to include wine and liquor, because that is something where we're starting to look, especially in New York State, we have a very robust, amazing um winery and distilling, and um I recommend everybody try all of it.

And um, but it's it's a different, it is a different thing when you're a very small producer trying to figure out how to work into a system that you've never been part of.

So it has been a big conversation for especially our wineries, because a lot of them are farm-based wineries.

Um, but for our small brewers, it they just work in the system because that was the expectation going in.

So they plan for those costs when they became a small brewer.

Got it.

Okay, thank you.

Um, Miss Donovan, I wanted to turn a couple questions here.

Um, in your analysis, did you include any savings or is it all costs?

We looked at the cost, it's not a cost benefit analysis, it's a cost analysis.

Okay, so yeah, why did you not look at any savings the district would realize?

Because for this report, the scope of the project was to understand what the cost of the stewardship organization, not the whole cost of the program, right?

Because there's other players and they're retailers or COE, but what would the cost of the program be?

And there's no cost savings in the program for the stewardship organization itself.

But there are to the district.

Correct, but the scope was the stewardship organization.

Okay, all right.

That's helpful distinction.

Um I just want to note we're ignoring the potential savings there.

Um it also you shared it with us around nine o'clock this morning, so we have not been able to dig deep into it yet, but my staff has been trying to skim through it as quickly as possible.

Um it looks like your startup includes office leases, vehicle purchases, kind of a laundry list of a lot of costs or items.

Was there any analysis that would consider utilizing district resources or existing assets?

So the stewardship organization is a nonprofit, right?

That's set up by the distributors, and it was not assumed that they would have access to any DC resources as part of that progress process, right?

So, you know, if there is, we can address it.

And I will say this is, you know, it a very dense report.

There's a lot of information in here.

We went to great lengths to uh be intentional about the scope of what we looked at and those sources that we use to do it.

And if you'd like to sit down at any point in time, and potentially you may have better, we have public available data, right?

What's out there, what you have access to, we have access to.

Um, but if you have better information, I would be more than happy to reflect on how the information you have access to that I don't have might impact the numbers in our report.

Okay.

Well, yeah, and again, we just got it, so we're gonna dig through it and be able to come back on that.

Understood.

Um, I mean, I I think some of the assumptions it looks like if I've if I'm reading correctly, um, you're looking at a 40% fraud rate.

No, no, we use uh in our modeling, we're not projecting or predicting what the fraud rate will be in the district.

We are highlighting that there is a real risk of fraud.

And we lean.

And you how did you define fraud?

And what I mean by this is are you defining fraud as any container?

Uh somebody just they they bought a can of coke uh in Maryland in the morning, they came in to work in DC, they just kind of were gonna try to redeem that one container while while they were here.

Is that fraud, or are you defining fraud as I'm gonna try to put 250 containers in the back of my trunk from some other place?

I'm gonna drive in and try to jam them in the machine and get money back.

How did how did you define fraud?

So when we're referring to fraud, we're referring to a bottle that is redeemed for a deposit that was never paid for.

We're not differentiating between uh, you know, intentional or unintentional acts.

Uh we're just that's helpful to understand that.

Yeah, got it.

Um Mr.

Williams Keefe, I know from previous conversations, uh you've said there's there's no version of this bill that you're gonna support.

Um, are there changes in the revised bill?

Because I still think the conversation is worthy, even knowing you're I'm never gonna see you say we support this bill.

Um, are there ver are there things that have happened in the revised draft that you believe do address some concerns that you have raised at during your first uh testimony?

I think a lot of the uh changes made by the committee I understand, but I think that they actually make the system worse.

You're not gonna change the fundamental economics of there are X containers going through the system, and that will incur Y cost by narrowing who's covered in those costs, you're simply uh increasing the burden on those who are forced to participate.

Um as I discussed in my testimony, um, forcing local distributors, DC-based distributors to be redemption centers effectively puts a massive burden on a, you know, our industry at the in the beer, wine and spirits wholesalers, we're one of the the last distribution industries left in town, and we have to be here by licensure.

And so we would have to turn into garbage processing facilities, in addition to doing our core business, which is distributing the beer, wine, and spirits that support the hospitality industry here in town.

Um that is a material uh uh, you know, like uh worse, that's materially worse in the revised print.

Um, those the the you know, I think that just to return to um what was brought up earlier about cost increases not occurring.

This is again the fanciful magic waving of hands that we see across the board from advocates for the for the bill where an objection is raised, and uh as I understand our um colleagues in the non-alcoholic beverage industry will discuss cost at length.

But I I would just point to the fact that the you know um my friend to the left of me said that there exists no evidence and then pointed to um you know, uh in order to uh support her claim that cost doesn't increase, she says that sales don't decrease.

That's like saying rent doesn't increase because there are the same amount of renters in the district as as there were in years past.

That's that's non-responsive to the point.

But hold on.

I mean, I went and looked online, for example, all right.

Let me go to a states that have bottle bills, states that don't, since there's so much online shopping that exists right now.

It's the exact same price.

That's because you're sitting in the district of Columbia as you're purchasing that the system recognizes and assess taxes and fees based on your point of purchase.

Yes, it does.

And if you were to go through the product, council member?

Not in New York, no.

Did you purchase the product when you went online to look at it?

No, I did not purchase it in New York.

When when it's when you check out, it will determine where you are and assess the cost, the taxes and fees appropriately.

Because you're sitting in the District of Columbia, it knows exactly where you are, Councilmember Charles Allen, where when you're making that purchase, it's not gonna assess a deposit, you know, because it will not assign that that product to you being purchased.

So my product stays the same if I have a deposit, which I'm gonna be able to get back in return if I were in New York or in a bottle deposit state, but the cost of the product is the same.

So I know I'm way over time.

Let me turn to my um colleague for a second round.

Can I just could I just clarify?

You can clarify during my round.

Um, what I said very particularly and very explicitly is that there is no evidence of a difference.

Now this gentleman's client has a lot more wherewithal than just zero or any of the nonprofits or anybody anybody who's working in advocates as advocates for this system.

They have done all kinds of studies, and I've never seen one that proves the increased cost.

They claim it, but I've got not a single citation.

If you have a citation, please send it to me.

And very similarly, uh, can we keep America Beautiful looked at litter and they saw a litter decrease?

So I'm not saying that they're dishonest, but I am saying it's unsubstantiated that the cost increase.

If you have a citation, please send it along.

Thank you, Mr.

Chairman.

Okay, so I just want to talk about the cost of litter for a minute because that's I'm the chair of the Committee on Public Works and Operations.

DPW is no offense to my other agencies, the centerpiece of the committee, and I spend a lot of time talking about trash.

So Ms.

Donnelly, you talked about the startup costs.

What was it?

I think about 57 million.

Yeah.

I'm sorry.

And I apologize for that.

People getting people's names right is important.

So it's fine.

Um, so it's hard to sort of pull this number out because we have so many programs for picking up litter.

We have public litter cans that get emptied nightly.

We have clean teams, we have mechanical street sweeping, we have people who clean alleys, with people who hand clean streets, and then we have um uh trash traps in the river that we spend almost 200,000 on annually.

But we spend more than 20 million dollars a year cleaning up litter in the District of Columbia.

So my question is, who should pay for all the litter?

Should it be us?

Because we're not creating the litter, shouldn't it be the companies producing it?

I'm not gonna comment on who should pay, but I I will recognize that those programs that you identify, you will still have to do.

They will still need to exist.

You'll still have to spend that money.

Am I right?

I I mean right now it's by volume in a lot of ways because it's manually being done.

So I think our clean teams, for example, if they didn't have to spend as much time picking up litter, they could do other things like beautification.

I mean, those are good jobs, but I think um there is some there's a there's a sense of sort of demoralizing when you clean up a neighborhood and then you get there the next morning and it's already covered in litter.

Um, and uh people who don't get paid to do it, we're not even talking about like all the volunteers who spend their time walking around the community picking up trash.

So yeah, I think a lot of us would love to do anything else besides pick up bottles from the ground.

Yeah.

Um okay.

Well, I'm just thinking, I mean, my point is really I acknowledge there are costs to setting up the system.

There are also costs to not setting up the system.

And the cost we are bearing now are cost to our community, cost to our health, um, cost to our public spaces, and cost to our taxpayers.

So for me, I'd like to shift the burden to the polluters.

And um I think we can do that with the bill.

But I really appreciate you providing the cost analysis for that side because it does put in context um the things that we spend as well.

Thank you, Mr.

Chairman.

Thank you very much.

Um I appreciate everybody's testimony today.

Uh, we'll definitely take a look at the study uh once we were able to dig in deeper on it and we can follow up with that as well, and very much appreciate everybody's testimony today.

All right, thank you.

Thank you very much.

All right, let me move to panel number two now.

So I'm gonna call up Steve Carnes, who's the head of sales with DC Brow Brewing.

Thor Cheston, who's the co-founder of Wright Proper Brewing Company, and Chris Williams, who's the president and CEO of the Anacostia Watershed Society.

And we previously had Ms.

Genderson from uh Seller and Schneider's uh who contact us that she's unable to make it, so we're gonna follow up and get her testimony though for this panel.

So good morning to you all.

Uh Mr.

Cardins, if you're ready, we'll go with you first.

Uh then Mr.

Cheston after that, and then Mr.

Williams after that.

Uh if you'll push the buttons the red light comes on.

Okay, there you go.

Uh, I apologize for my first time.

I thought this was more of a round table, so it's kind of rectangular, but you know, testimony per se.

But uh so I am actually the uh director of operations for DC Browse, so I deal with you know procuring the materials, filling the cans, and getting them shipped to our distributor.

There were some questions that I had, so I don't know if I should wait till the end or about the the warning in the bill.

What would be helpful uh at least in a hearing context is if you've got questions or issues, kind of flag those.

Um we certainly I'm more than happy to also sit down after the hearing as well to kind of go into in deeper detail uh with specific questions you may have.

But uh what we most valuable is kind of hearing your feedback about either things that are unclear for you, recommendations you have, um, your feedback.

Okay.

Thank you.

Thank you.

So one of the questions is the clarification of uh a distributor.

So in the being part of the stewardship and paying into it, we are under the two million container cap, but it doesn't necessarily call out the difference between distributors or manufacturers.

Uh we do have a small tap room in northeast DC, which does have an on-premise consumption license through APCR.

So does that exclude us from on-site redemption?

Uh the big part of the bill, and I brought some prop, so to speak.

So, is the being to able to adhere to it.

So these are printed cans, so this in the lid cost us 20 cents.

If we were to have to reprint these, they would cost us a few thousand dollars that we feel is a little untenable.

This can would cost us with the label and the lid, the label on the can makes it less recyclable.

It costs us 30 cents a can, not the product itself, just packaging pieces, which is 50% more.

So that would add about $75,000 of cost in a given year.

We're a small manufacturer, we're in the district, we've always been in the district, we've always used cans because they're infinitely recyclable.

We care about the environment, and that's why we're a can brewing.

We always have been.

Uh, if we're to get new cans that have the uh DC, I believe it's called RF V is the wording.

I mean, just to get new cans, it'll cost us about three thousand dollars just for each can.

Okay, this is your new can.

Uh really the big thing are the lids.

This is what really drives deposit.

Uh some of my families work for PepsiCo for about 30 years, and in some research, they only have one different set of UPCs in the United States.

It's in New York, and that's through an independent bottler.

Every other deposit state that they're in, they use this 10 deposit laid.

So as far as you would ask before, what could we do?

Either the manufacturer needs to put DC on the lid, or we just use blank lids and we're not part of the system.

AK, all the local breweries would have just their UPC, and that wouldn't be at grocery store, it wouldn't come up as paying deposit.

I mean, that would really help us out.

And in the uh section 143, it says that finance information, including better, create incentives.

So, really, what is an incentive to create a UPC barcode, but going off of like I mentioned with PepsiCo, how big they are, and they only have one different UPC in the United States.

Um, and really as a DC resident, I've lived here on all since 1999.

I think the city's done a great job in cleaning the city up.

In 1999, the city did not look like it does today.

I think that's a fair, and you know, again, that's why we came out with cans because it's infinite recyclable.

Um, I know you mentioned 1980, I guess they tried to uh have a uh bottle bill here.

The last state was Hawaii in 2002.

And again, speaking as a DC resident, the performance targets for redemption seem a little high.

The first chunk is 75%.

Michigan's had a deposit since 1976, and they're only at a 75.6% redeem rate.

And as far as the recycling rate, I believe the first chunk is 70%.

Maine has the highest recycling rate at 72%.

But as been alluded before, that's deposit on everything.

That's wine, liquor, beer.

Um I appreciate the time, and hopefully that explained our kind of financial issues with the bill.

Thank you.

Absolutely.

I do have some questions I'll come back to, and I have some answers for some of your questions as well.

So when I get back, I'll I'll make sure I do that.

Ms.

Justin.

Uh thank you very much.

Um thank you for having me back.

Uh my name is Thor Cheston.

I'm the co-founder of Right Proper Brewing Company.

We've been in business here in Washington, DC for almost 13 years.

Um, so uh uh Steve and I uh we we are representatives of the only product that is manufactured in Washington DC and exported out of the state or state, we're not a state, we would love to be a state out of the city to any meaningful degree.

So that means that if you buy a product off a store shelf in another state and it says made in DC on it, it is almost guaranteed to be a beer and a beer that either Steve or I make.

We think there's tremendous value in defending and supporting the one industry that is keeping DC manufacturing alive.

I I think that without us, without losing with without manufacturing, with losing any sort of manufacturing base in the city, we actually lose part of the legitimacy in our argument for statehood if we don't have any sort of manufacturing base.

And I think we do need to pay attention to that, pay attention to a larger picture.

Um we are not the problem.

Uh, right proper, DC Brow, and Atlas Brewworks, the quote unquote big three of Washington, D.C.

breweries combined, sell to wholesalers who distribute approximately two million of their cans in Washington, D.C.

a year.

This equates to 0.33% of the 600 million single-served beverage containers sold in Washington, D.C.

each year.

That is one-third of one percent of the total.

We will never be able to have a DC-specific barcode.

The costs and logistics associated with maintaining separate inventories, anticipating packaging splits between DC and out of state distributors is well beyond our capabilities.

The language about incentives feels purposely vague and disenfranchises our industry because no DC manufacturer would have the ability to maintain DC only packaging inventories.

We would lose large partnerships like Trader Joe's, Whole Foods, Giant Food, Safeway, etc.

All regional and national companies that sell our products have centralized product code databases.

If we have to have DC specific UPC, have to have a specific UPC code for DC, we will not be able to sell to these companies out of state.

The UPC code idea was placed in the bill because I don't know why.

I don't know if there's like an elephant in the room that no one's really acknowledging.

Um I don't know if this is so because DC has to hit this magical 95% redemption rate.

Um, but the fact that those redemption rate goals are in the bill make makes me very nervous.

Um why are they in there?

Um I think someone needs to ask the question why does DC have to hit that hit that rate?

Um and I'm wondering if um it ha we have to hit that rate if because it otherwise the program itself is not financially viable.

Does that pay for for the program?

I think that really needs to be ironed out, and and we need to ask the question why that's in the bill.

Um I have heard the term registration fee, processing fee, stewardship fee, handling fee.

What's the difference?

What's the actual terminology?

We cannot incur any fee, nothing.

We can't pay for anything.

Nothing.

I didn't pay myself this for the I haven't paid myself in two months.

Myself what I use to pay my family.

I haven't paid myself.

So I cannot pay another government program.

Oh man, I gotta get oof, okay.

Okay, sorry.

Um I think we need to ask ourselves: does this bill anticipate an economic shortfall?

We have to look at the language of the bill and ask why language around redemption rates is in there, the focus on UPC, um, are what problems are they trying to solve?

Are they putting band-aids on uh uh, you know, this is we're trying to, this is these are programs that are meant for states, thousands and thousands of square miles.

You know, uh California has the fourth largest GDP in the world, you know.

So this is um, and we're trying to cram it into 67 square miles here.

Is that possible?

What what are the economic impacts of doing such a thing?

So we need to look at the bill and say, is the bill trying to put band-aids on a problem on some really really major problems?

So finally, as I said, we have no money.

Um we asked the city council to please recognize the economic reality facing small manufacturers in Washington, D.C., the combined cost of commercial real estate, taxes, licensing, permitting, and regulatory compliance has created an extraordinarily difficult environment for independent businesses.

Right now, D DOT assigned a permit cost to my uh streetery that would cost almost $7,000, which seems entirely arbitrary, that a DC department can just arbitrarily assign a dollar amount to a permit cost, it terrifies me.

And so if there is that much arbitrary decision making going on within this DC departments, I am terrified about the language in this bill, which is so incredibly vague and immediately disenfranchises my tiny little industry.

Despite years of improving operations and investing in our company, Wright Proper is currently forecasted to operate at a loss at a cash lossless company this year.

We simply do not have the financial capability to absorb another significant regulatory burden without jeopardizing our long-term viability.

We support the district's environmental goals and want to be part of the solution.

We simply ask that the legislation recognize the unique challenges facing local manufacturers and avoid entirely imposing any compliance requirements that disproportionately burden one of the district's few remaining manufacturing industries.

Thank you.

Thank you very much.

And Mr.

Williams.

Thank you, Mr.

Chair.

We've heard a lot of discussion and debate about this legislation, and we're gonna hear more.

And I think it's a healthy debate to have.

Parks and waterways.

But we can tackle this problem successfully, just like DC has tackled other pollution problems.

The Anacostia River was once considered one of the ten most polluted rivers in the United States.

And DC has taken some admirable big public policy swings to address this issue and to address the four horsemen of the apocalypse of pollution in the DC's waterways sediment, sewage, industrial pollutants, and trash.

In 2013, DOEE created groundbreaking revolutionary stormwater management regulations to tackle the issue of sediment.

The Clean Rivers Project, which is a multi-billion dollar project, has drastically cut down on the amount of sewage and polluted stormwater that's being dumped into the river.

The Anakosti River sediment project, which Councilmember Nadaux mentioned, is going to be getting into the water next year and starting to clean up the the heritage toxic industrial pollutants that are in the bed of the river.

And even in trash itself, a ban on styrofoam, the bag fee law have significantly reduced trash in the river.

But these river restoration programs, they represent billions of dollars of investments in restoring the Anacostia River to health, but they're undermined by the by not taking bold action to address one of the biggest remaining sources of trash pollution, and that's bottles and cans.

In my view, it's time for the district council and the district DC government to take another big swing.

And that big swing is this bottle bill.

And it's a promising swing.

It's it you we're gonna hit the ball because and we know that because bottle bills work.

Recycling rates are two, three, sometimes four times higher in bottle bill stage.

Beverage container litter in bottle bill states drops, has dropped by 69 to 84 percent.

So it is it is increased recycling and it is reduced pollution in the environment.

And this in turn reduces overall litter in these states by 30 to 64 percent.

Bottle bills work.

Imagine these kind of reductions were benefiting DC streets, DC parks, and DC streams.

It would be an absolute game changer for pollution in the district.

So I urge you, Mr.

Chair and members of the committee, to take another big swing and report favorably on B 2658, the recycling and refund litter reduction amendment of 2025.

Thank you very much.

Thank you very much.

I appreciate it.

Um, Mr.

Carnes, thank you very much for your testimony.

Um, couple of quick answers I can give for you.

Uh so with the revision that we have, for example, it makes clear for the uh your site with the on-premises consumption, that would mean that you are exempt from being a redemption center.

So we can give you that certainty there.

Um of the things that um that we're also looking at.

So this morning, uh, to as I was on my way in, I was like, let me go run down and check my fridge real fast.

And I pulled out one of my DC brownies sitting there.

So I can't remember the percentage that you said, Thor, but um I guarantee you you the two of you collectively represent more than whatever it was.0333% of my refrigerator.

One third of one percent.

So um, I looked at the top of the can and you're talking about that, and I've I've had conversations with uh with Justin Cox from Alice Brewworks about this as well.

So trying to understand your business, right?

Because while I want to take the big swing uh about how do we help reduce litter trash in our river and our community, I don't want that swing to knock out my local brewers and businesses.

So that's why we exempt uh, for example, from the stewardship uh costs and fees.

We're trying to think through different strategies to help address those different concerns.

Also learned a lot more about labeling than I ever thought possible.

Uh, and you live in that world every day.

So on the top of the can, um, you know, I see every state that has a bottle deposit.

Uh what would happen if DC passes uh a bottle deposit, what'll happen is they start manufacturing it with DC on it.

Uh so the the top that you would purchase, just like the ones you purchase right now have a California, they have every other state.

That that will be what happens.

So you would not have to create a separate DC demarcation on that because I think the industry changes uh based on which states have passed that.

Yeah, you know, I I can't tell them to do that, I guess, is more of our sense of small business.

I mean, I would imagine the manufacturer will if it passes and goes into law.

So what why the incentive for the DC specifically?

So I'm gonna come back to UPC in just one second, and just focus on that for a second.

So I think um I have a relatively high degree of confidence that that is kind of what that industry uh will change, and obviously we have to work on that to make sure, but in the same way every can you produce has California's redemption on it, it'll it'll do the same thing.

Um we also try to your point about replacing cans you've already printed.

So the lead time on this is so long.

Um, you know, again, meeting with a lot of our local folks, understanding uh, you know, you're purchasing six, eight, nine months' worth of cans in advance.

Um, so the legislation intentionally creates a very long um on-ramp to make sure, because it would be an unrealistic expectation in my mind to say you've already procured a product and spent the money and somehow it goes out the window.

So from a replacing that, that's try to be intentional with within the time frame here.

I mean, really the lid is key.

Because if if it's on the lid, then we don't have to change the can.

Right.

The UPC will be the UPC, and that's again, like I said, that's the way Pepsi does.

Agreed, but let's get back to the UPC now.

All right, so I I do believe the lid is the way that that problem gets solved in terms of demarking it.

Alright, so now UPC, Mr.

Cheston, can you you we're gonna jump in there on UPCs or something?

Yeah, why why the language in the bill regarding incentives for DC-specific UPCs?

So, this is where we're gonna continue to spend more time after this hearing getting this feedback, right?

So part of what the strategies around UPC is understanding how do we work with both a redemption and how do we know where uh things are sold.

I know from talking with you, talking with others, if it presents an operational challenge.

Impossibility, nothing's impossible, but it's a significant.

It's significant.

It would be very challenging to say, all right, you're gonna have to produce a stock of material that can only be sold in one jurisdiction, um, and it could become so cost prohibitive to do that, it becomes an impossibility.

But it that would be a very big challenge, and I recognize that.

So your I'm I'm hearing in your testimony, in the same way we tried to say, let me look at our local DC manufacturers, and let's exempt from the stewardship costs.

I'm kind of hearing you, but I don't think you explicitly said it, but I'm kind of hearing you say, we think at a certain volume and below, you should just exempt us all together.

So the flip side of that argument would be alright, uh if I'm collecting my my cans and my bottles and I'm gonna be a good resident here and I want to get my deposit back, I now have a bag that I'm taking back to a redemption center now, and I'm gonna have to figure out.

I I put that on the the resident now as to know if it's a right proper or DC Brow can, well, I'm not gonna get a deposit back on that, but I am on these other cans.

So the risk is do we create confusion within the recycling effort of which cans are not?

Or is it just when I go in and I put my can into the machine and it looks and says that's a right proper, that's DC Brow, I wasn't charged a deposit.

So I'm not getting a deposit back.

Yeah, I took coins to a coin star at Giant the other day and I had some Canadian coins, and they they were rejected, kicked back out.

I didn't go through the coins to look for Canadian coins.

I don't know how many Canadian coins you got in your pocket.

But yeah, but so the t the technology that exists around like most of these will be the the machines where you're putting them in.

And that both helps with fraud prevention, but also could work in a way that um if I have a right proper can, I'm just I didn't pay a deposit on it anyway, so I'm not getting a deposit back.

And it knows that by putting it through.

That's what I'm I mean, I just want to give you the chance to say it.

Is that your recommendation at whatever the the right number is?

That's your recommendation of how you're gonna protect our local businesses.

That our cans are unredeemable.

Yeah.

Okay.

And they do sell blank lids so that would cure that issue.

So to have no marking on the can, no marking on the lid, it'll just be a blank lid.

Right.

Yeah, I actually what our our best selling beers have gold lids that don't have any markings on them at all.

Okay.

Um, all right.

So that's part of what I want.

That's part of the feedback we're trying to get the hearing, right?

Just to kind of hear what would that look like?

What would be the operational concerns or considerations we have to think about with that?

And I think one of the arguments that would be in your favor for that is that in the same way um Mr.

Cotton talked about the simply the share of beverages that you represent, and obviously I want you to keep growing and get bigger and bigger and grow, but the reality is you represent such a tiny fraction of the overall marketplace of beverages that are sold, your third of one percent.

Is I think what you'd be arguing to me, right?

Yes.

Okay.

We essentially don't exist.

You do though, and I like that you exist.

Okay.

That to me is the type of consideration like we're we're wrestling with and trying to think through what is a way in which we we swing and big because we know that we can actually reduce trash, reduce litter, reduce pollution.

It it is clear that that will happen if we were to do this.

At the same time, I don't want a big swing where I'm gonna actually I'm gonna knock out something that I greatly value in our city, and I think that we do value in our city, and we want to see continue to grow.

So that's part of what we're gonna wrestle with.

Um I want to make sure, well, almost down to Mr.

Williams, let me just try to get back to you real fast then before my time is up, and I'll turn to Councillor Nadeau.

Um have we quantified like one of the things that why I asked the question earlier on the previous panel about savings, we spend a lot of your tax dollars on street sweeping, MS4 permits.

Um what's the risk if we don't meet our MS4 permit?

Um what's our risk every day?

Is it a I think it's a $50,000 fine every day for the district?

The taxpayers have to eat.

Uh up to $64,000 a day.

If the MS4 permit is not uh is not uh met, and if the requirements of the permit is not met, and then an action is brought, the fine could be sixty-four thousand dollars a day per violation.

It varies, of course, but that's the maximum.

Right.

Um we have an eight million dollar contract to incinerate trash that is not recyclable every year.

We're spending eight million taxpayer dollars to burn trash that we can't recycle.

Um those are to me, as I try to evaluate all of our cost benefits of any decision, and I think we've heard this from other states.

The we will we spend a lot of money on recycling programs that don't actually do what we need them to do.

Um, and we heard that kind of talked about with single stream and what the contamination effect is.

We spend a lot of money on street sweeping.

Again, and this is not an abnormal day.

Uh, just from my walk from my house to Metro this morning, uh, four blocks, 26 bottles and cans, not a single right proper DC brow camp, just to be clear.

Um, but 26 cans and bottles, you know, just on on the sidewalk and in the gutter, right?

That's four blocks.

Now magnify that across the full square mileage of DC like that that is a huge presence and problem.

Um that does put us at risk for our MS4 permit.

We spend millions and millions in that.

And so there is a savings here to the overall taxpayer as we think about it.

Um but testimony like what we're hearing from Wright Proper and DC Browse, exactly why we're trying to think this through.

Um, it's why I took the unusual step of saying, let's try a let's do a revised bill.

Now let's get more feedback on that one to be very deliberate in how we try to tackle this and make this stuff a consideration.

So I know I'm well over time here, so I'm gonna turn to Counselor Nadeau for her round of questions.

Thank you very much.

Thank you so much, Chairman.

This has been a great panel.

Um, and I especially want to thank our brewers um for being here because I think every time you come, we get to drill down a little bit more on um what it takes to make this program work for you as we're trying to do the bigger thing.

And I support any efforts that council member Allen um will make towards addressing your needs because uh from the outset when we drafted the bill, the goal was really never to get you guys.

It's it's to get the big guys.

So thank you for continuing to participate in this process until we get it right.

The big guys are also our partners.

I know.

So, Ray is holdings, they're I mean, they are our customer.

Like if I really look at where's where's our revenue coming from?

60% of our revenue comes from our one, our DC distributor, which is Reyes Holdings, which is premium.

They're they're our best customer.

They are an invaluable partner for us.

Um we work very hard for them and they work very hard for us.

And so, we can't not support their efforts, too, because they're they are they provide a valuable service to us.

You know, they handle sales they handle distribution things that we we don't we could never handle logistically.

And they have a tremendous amount of experience you know selling beer into the DC market they they have they are a wealth of knowledge and information that we could never dream of and so we need them to be healthy.

I understand and that actually wasn't who I was referring to but I get what you're saying so thank you.

Mr Williams thanks for the work that you've done.

And you've already spoken a lot to the issues that I'm most interested in.

But one thing I wanted to talk through with you.

So in 2010 DC enacted the the bag fee and the goal there was to get those plastic bags that litter up off the streets and out of the river.

And by all accounts it's been wild wild wildly effective right?

Yes it's been very effective.

There was a time when you took a cruise along the Anacostia River and you would literally see plastic bags hanging from the trees littering the shoreline floating in the water you don't see that much anymore both because of the bag fee law in DC and also jurisdictions around DC have also passed legislation to limit the use of plastic bags and it's been highly effective.

Yeah and we're and and even though um we we were ahead of the curve on that and then people followed suit across the region and I think that was was important and we've now seen progress in Maryland on their bottle bill which is encouraging as well because I think we'll all benefit when the region moves forward together.

So now that bags make up so little of the trash in the river we have pretty staggering statistics on plastic bags.

I mean plastic bottles.

Yeah as I said before the single most common piece of trash we pick up in our trash traps and cleanups is the plastic bottle we in our trash traps we sort out the trash we collect in our trash traps into 27 different categories so we have tremendous specifics on the relative amounts of trash we get in the trash traps.

And then in our cleanups we separate out the non-recyclables from material that is at one time recyclable plastic bottles, cans, glass bottles and in both instances we generally see that the the recyclable material or that at one time was recyclable oftentimes we pick it up it's no longer recyclable because of sun damage etc.

But the originally recyclable material is about sixty to seventy percent of what we pick up and the vast majority of all of the recyclable stuff we pick up are plastic bottles.

Okay.

And that's by volume by weight.

It's about 60% it's about 60 to 70% by volume.

By volume okay great that's helpful to understand I mean again just getting back to what's the cost of not doing this and um I mean the cost is the health of our river for one.

Yeah well you mentioned before that when you were talking about balancing costs that a lot of the workers in DC who now clean up trash could be doing other things that were constructive if a bottle bill like this was in place.

The same is true of my organization we spend a lot of time picking up plastic bottles aluminum cans glass bottles um and our volunteers do that and we would rather be spending that time doing other sorts of conservation measures to protect the watershed uh which is why the bottle what another reason why the bottle bill would be such a game changer for the river.

It's almost like you just can't get ahead right you're constantly doing the same thing over and over again.

Exactly that's exactly right and the we could we'll continue to pick these things up but we're never going to get ahead of it what we need what we need to have happen is those things don't get dropped in the first place and that's what the bottle bill will accomplish um to a great degree.

Yeah thank you so much appreciate your testimony thank you Mr Chairman Councilman Nadeau asked many of the questions I was going to ask you, Mr.

Williams.

I guess the only one, because I want to make sure this is the points driven home.

The bottle bill doesn't mean the bottles and cans the the person who uh who might throw it down uh doesn't entirely go away.

Those 26 bottles I saw this morning.

If all of a sudden each one of them actually now has value, the point is it will change behavior in the same way we saw simply a nickel change behavior uh with plastic bags uh and grocery shopping, but the behavior will change and that people will be less likely to toss because now this thing has value, and I don't walk around tossing nickels and dimes on the street, um, but it also creates value that um individuals will go collect those cans or bottles and pick them up, which reduces that right.

So that overall you believe there's a there's fewer items that ever even make their way in the first place into the Anacosta River.

Yes, that's correct.

Because we've assigned a value to it now.

Yes, that's that's the thing that isn't really talked about enough, I think, as far as the bottle bill is concerned.

Is what the bottle bill does, we talk about it as an incentive, which it is, of course.

But what it really does is it creates value.

All of a sudden, what was once a worthless piece of garbage has value.

So it's less likely to be dropped in the first place, it's gonna go into recycling to get that deposit back.

It's less likely to stay on the ground between your house and your metro stop because someone's gonna come along and pick it up and and um redeem it for a deposit.

And also, at the end of the day, bottle bills create value for even for beverage producers because they get more recyclable material, they get more material that's suitable for recycling in Bottle Bill States.

And in fact, Bottle Bill states, as was mentioned before, are major suppliers of the raw material to make new bottles and cans for the beverage industry.

Yeah, okay, excellent.

I really appreciate it.

Um I don't have any further questions at this time.

Um I know uh after the hearing um over the next few weeks and months, happy to follow up as well and sit back down again to kind of continue to work with you.

Um but appreciate it.

I appreciate it.

Thank you very much.

Absolutely, thank you.

All right, let me turn to our next panel.

Uh I'm gonna call Sean Townsend, who I saw over here, the president and CEO of the Restaurant Association Metropolitan Washington, Mary Quillian, the owners of Mr.

Henry's, who I saw back there, Chris Weiss, the executive director of the DC Environmental Network, and Vanessa Batters Thompson, the executive director of DC Appleseed.

All right.

Good morning to all of you.

Uh Mr.

Townsend, how about we'll let you kick us off and we'll just kind of go right down the line like that.

Alright, thank you.

Uh good morning, Chair Allen, and thank you for the opportunity to testify today.

I am Sean Townsend.

I have the pleasure of serving as the president and CEO of the Restaurant Association of Metropolitan Washington.

For more than a hundred years, excuse me.

RMW has represented the neighborhood restaurants, family-owned establishments, local brewers and distillers, and national brands that make DC's hospitality industry so vibrant.

RMW and our members share the goals behind this bill.

We support reducing litter, improving recycling, and creating a cleaner district.

We also appreciate your willingness to work with stakeholders throughout this process.

The revised committee print includes several meaningful improvements that respond directly to concerns raised by the restaurant industry.

Preserving the exemption for restaurants, hotels, and bars, reducing burdens on smaller distributors, strengthening fraud protections, and improving redemption logistics are all positive changes.

We appreciate that the committee listen.

However, while the revisions improve the mechanics of the bill, they do not resolve its central challenge.

It still raises costs throughout the beverage supply chain, and those costs ultimately fall on businesses and consumers.

The bill continues to exempt restaurants from serving as redemption centers, and that is an important protection.

But being exempt from operating a redemption center is not the same as being exempt from the cost of the program.

Our members would still pay a 10 cent deposit on nearly every beverage product they purchase, and recovering those deposits remain uncertain and operationally challenging.

Restaurants would still have to separate containers, store them safely, manage sanitation concerns, and rely on a collection system that is yet to be fully defined.

While the revised bill gives DOEE greater authority over collection standards, it still provides no guarantee that restaurants will have a practical way to recover those deposits.

The reduced registration fees for smaller distributors are also a positive step, but they do not address the primary cost driver, the deposit itself.

Roughly six cents per container sold.

Those costs don't disappear.

They're passed down through the supply chain, increasing costs for distributors, restaurants, and ultimately consumers.

We also remain concerned about the impact on craft beverage producers.

While the bill provides some relief, many small brewers, distillers, wineries, and specialty importers will still face new labeling, reporting, registration, and cash flow requirements.

Some may decide that the district is simply too costly a market, reducing consumer choice, and limiting opportunities for local businesses.

And finally, many key operational details, including the infrastructure of redemptions, collection logistics, and implementation remains subject to future rulemaking.

That uncertainty makes it difficult for businesses to understand the full operation and financial impact of this program.

Of course, we appreciate the improvements made by this committee and the engagement with stakeholders, but we remain concerned that the bill creates a costly new regulatory system without adequately addressing its impact on restaurants, beverage producers, distributors, and consumers.

We respectfully ask this committee to continue working with stakeholders before advancing this legislation.

We share the district's environmental goals, but we believe that we can that this can be achieved through practical solutions that improve recycling without placing additional burdens on an industry already facing significant economic pressures.

Chairman Allen, thank you for your leadership and for the opportunity to testify today.

Happy to answer any questions.

Thank you very much.

Good morning.

Thanks for having me.

My name is Mary Quillian.

Um I was born and raised in Washington, D.C.

My family has owned and operated Mr.

Henry's restaurant on Capitol Hill for 55 years.

Um I'm also president of Eastern Market Main Street, so I work with a lot of other restaurants and small retailers, including um liquor stores and wine stores on Capitol Hill.

So I wanted to thank you for having me.

Um and thank you for taking another crack at this.

Unfortunately, the changes actually didn't really address my chief concern, which is how bottles get picked up from restaurants and other hospitality industry.

As Sean noted, you know, the the keeping restaurants and bars and hotels out of being um redemption centers that was already in the bill, and that is retained, thankfully.

Um but the way it's done is by removing us from the definition of retailer, and then later where you've increased the department of economic and environment, DOEE.

Department of Economic Environment.

Anyway, whatever that stands for.

Environment energy.

Thank you.

Environment and energy.

Sorry, sorry.

I'm with acronyms, right?

All right, okay.

So you've you've increased DOEE's authority to suggest or govern the stewardship organization, and in directed the stewardship organization to work with retailers, main streets, uh bids, et cetera, et cetera.

The problem is the bills specifically removes the hospitality industry from the definition of retailer.

That's how it removes us from the burden of being redemption centers, and that's important.

We we like being a redemption center, that's a non-starter for the hospitality industry.

But we still have to have a way to get those bottles and cans, which we've now paid an extra 10 cents for, each one of them, back into the system and get our deposits back, if that makes sense.

Um, uh one of the things that should be looked at, and I didn't think about this early enough to ask, but the liquor, the alcohol distributors.

Um, I wonder what percent of the bottles and cans they sell into the city go to restaurants and bars and hotels.

My guess is that it's not insignificant.

And so, you know, when the devil is in the details, and right now the way this is written, technically, the hospitality industry does not have to be served by the stewardship organization in picking up the bottles and cans for for redumption.

And the problem is then I look at that as a business that's been around long enough to see the number of agencies and quasi agencies, city operated agencies and quasi-agencies.

I now deal with at least 10 different agencies, different portals, different systems, and adding one more to that.

Where I'm I guarantee you, if it's not spelled out, there's gonna be a way that the small businesses get burdened to deal with figuring out a way to get these bottles and cans back into the system, and it's gonna cost us.

And that's my biggest concern, right?

I wanna I want to help clean up the the rivers and the I don't have anything against the idea behind this and putting a putting a deposit on the bottles may do that.

I mean, there's evidence to show that that does, but from my operations, I'm worried about the logistics that aren't spelled out in here, and that we're going to slip through the cracks and it's gonna be one more expense on small businesses that are already struggling, right?

I'm down six and a half percent this year over last year, and last year I was down over 2024 in sales.

So, you know, dealing with one more DC agency, none of whom seem to work with each other, is I it I'm weary, I'm tired, and that's what worries me about this.

Um, so if I put on my D.C.

resident hat, because I'm a resident, um, I would very much like not a single piece of legislation to ever pass without an economic impact study done.

And I don't know that there's been an economic impact study on this legislation done.

And so I would really like to see that done.

Um, just so we all understand, and that and you all run it, not interest groups or you know, they've had to do that because there isn't any sort of understanding overall of the cost of this to the DC system and the DC residents.

So, um, okay, happy to answer questions.

Thank you.

Thank you.

Um, I will note uh we we have uh you may not have seen it, and I'll make sure that we follow up the.

We specifically added language actually in a different section of the bill to address that gap you're describing.

But I'll I'll come back to that one.

I want to make sure you have that.

Thank you.

Um Mr.

Weiss.

It's still morning.

Good morning, Chairperson.

Okay, Alan Councilwoman Nado, who has left, and and everyone.

I'm I'm Chris Weiss.

I direct the activities of the DC Environmental Network.

I am also the co-lead of the DC return refund and recycle coalition.

Now, for the record, because someone was suggesting we're a small group of advocates, we're a huge group of advocates.

And I want to share the many DC focused organizations from every corner of the district that are supporting the bill.

Our coalition includes the Anacostia Parks and Community Collaborative, Anacostia River Keeper, Anacosia Watershed Society, Beautify DC, KC Trees, City Wildlife, the Climate Reality Project, DC Appleseed, DC Environmental Justice Coalition, DC Environmental Network, DC Voters for Animals, Earth Day.org, Friends of Anacostia Park, Friends of Kenilworth, Aquatic Gardens, Friends of Kingman and Heritage Islands, Friends of Ox and Run, Friends of National Arboretum, Titanic Memorial Park, Institute for Local Self-Reliance, Green Spaces for DC, League of Women Voters of the District of Columbia, Nature Forward, Pope Branch Restoration Alliance, Potomac River Keeper Network, Rock Creek Conservancy, Sierra Club, Shepherd Park Weed Warriors, Surfrider Foundation, Ward Three Democrats, Ward Eight Woods, Washington Parks and People, and Zero Waste Coalition.

Our newest organization, because we get a new one almost every month, is Third Act, who are DC residents, age 60 and up, working for a sustainable planet and credible democracy.

These organizations represent thousands of district residents who believe a bottle bill is good for our environment and for our economy.

In addition, almost a thousand individuals have joined our campaign to help us push this bill forward.

Now, a lot of folks have said this already, but container deposit laws work.

According to the Ocean Conservancy, nearly 27% of the U.S.

population is covered by a deposit return system for beverage containers.

Despite representing just over a quarter of the country, these programs are responsible for more than 50% of aluminum can and glass bottle recycling and more than 60% of all pet bottles recycled in the U.S.

Because of these 10 states, we also have decades of data and deep understanding of how bottle bills work.

Despite the misinformation of large multinational beverage corporations like Coca-Cola, a few of which are represented here today.

Bottle bills do not increase the cost of beverage.

The Conservation Law Foundation clearly states there's a persistent myth that bottle bills financially burden consumers and communities.

The reality is these programs cost consumers nothing.

The deposit is fully refundable when consumers return the container.

It's up to the beverage producers to cover the costs associated with running the programs, not taxpayers.

Despite what the large corporations say or pay others to say, there's absolutely no data-driven reason why the district should not join the 10 states that recycle over 50% of all bottles recycled in the United States.

The bill as introduced has been described as the best in the country.

One thing that makes it so special is that Councilmember Nadeau and staff realized that states like Massachusetts and New York were stuck at their original 1970s redemption value of five cents and were trapped in an endless cycle of trying to increase their deposit to an amount that strengthens the incentive.

But each time they have tried to increase their deposit, big beverage companies and their billionaire owners have pushed back hard to defeat these efforts to make bottle bills more effective.

Councilmember Nadeau came up with a common sense, thoughtful, almost elegant provision to help DC avoid the pitfalls other bottle bill states have experienced.

The introduced bill, co-introduced by 11 council members, authorized DOE to raise the deposit by five cents.

But to do so, the district would have to go through a number of hoops.

To increase the deposit, the district would be required to show that required redemption rates were not met for two consecutive years between 2028 and 2023.

It also allowed a second regulatory review five years later to 2038.

Once the bill is passed, a container deposit redemption increase is not going to happen for some time.

While the council might very well pass a deposit as quickly as they might want to, we support the provisions in the introduced version of the bill that is better designed to help DC achieve its redemption targets and will also be far more likely to reap the environmental benefits of less pollution in our rivers and creeks.

It's time to pass a dot a DC bottle bill.

It's time for us to not be afraid of having the best container deposit law in the country.

Thank you very much.

Thank you very much.

And this battery.

Thank you for the opportunity to testify in support of the district's proposed bottle bill.

My name is Vanessa Batters Thompson, executive director of the DC Appleseed Center for Law and Justice, a nonpartisan organization making DC a better place to live and work, including nearly three decades advocating for the restoration of the Anacostia River.

That work is paying off.

The Anacostia River Sediment Project is moving forward.

The 11th Street Bridge and RFK Stadium Redevelopment are both on the horizon.

This bill is the next step.

And it doesn't force a choice between clean rivers and healthy businesses.

We can have both.

DC Appleseed supports the bottle bill because it will improve the district's environment while also supporting tourism and green job creation.

The proposed bill is carefully tailored to protect small businesses, and bottle bills are proven to reduce litter without relying on tax dollars.

The district should embrace this opportunity to burnish its reputation as a leader in sustainability and one of the country's premier destinations for sports, architecture, and outdoor spaces.

Litter isn't just an eyesore.

It's an environmental crisis playing out in our own backyard.

Chris Williams has already testified about the environmental benefits of this legislation.

In short, cleaner streets, parks, and rivers aren't a side effect of this law.

They are the point.

The proposed legislation incorporates best practices from existing bottle laws, bottle bill laws, including a 10 cent deposit proven to be drive far higher returns than five cents.

We encourage this committee to restore language included in the introduced version of this legislation that would permit DOEE to raise deposits five cents after five years if redemption targets aren't met, avoiding the outdated laws other states have gotten stuck with.

As council member Nadeau stated, bottle bills do not raise beverage prices for consumers.

Customers get their 10 cent deposit back upon redemption.

A 2011 Massachusetts study comparing prices across four states with and without bottle deposit laws.

Found, quote, no discernible effect on the retail price of beverages.

The authors of the study found that prices were remarkably consistent and sometimes even lower in bottle bill states.

DC Appleseed performed its own limited survey of common beverages, including Diet Coke and Water, across multiple states and found the existence of a bottle bill did not impact prices at all, and we did check out.

The survey is attached to my written testimony.

As Christy Petchi pointed out, neither do bottle bills hurt sales.

Market studies find no evidence that deposit laws reduce beverage sales.

Rather, sales fluctuate based on seasonal, economic, and competitive factors that have nothing to do with deposits.

While addressing environmental and consumer needs, the bottle bill's authors also prioritized minimizing negative impacts on local businesses.

During the drafting process, Councilmember Nadeau and her staff engaged extensively with the business community, and that input shaped the introduced legislation.

As you know, the committee print further reduces impacts on the business community by streamlining labeling requirements and limiting fees for mid-sized businesses in addition to exempting small businesses.

Reducing litter delivers economic benefits everywhere, but it's particularly crucial in the district, where tourism is central to our economy.

Within DC, tourism generates 11.9 billion in visitor spending, 2.4 billion in tax revenues, and 114,000 jobs.

Litter negatively impacts tourism, particularly around waterways.

A study conducted in the Lake Erie region of Ohio estimated that reducing litter in that locale would increase local tourism spending by 217 million dollars and add more than 3,700 jobs to that economy.

94% of Americans agree that litter negatively impacts their perception of businesses and tourism.

As the Anacostia Riverfront continues to develop with new dining, shopping, and recreation, a clean river is an economic asset in addition to an environmental one.

This legislation will also create new green jobs for DC residents, advancing the sustainable DC 2.0 plan's goal of growing sustainability and resilience industries.

The 10 states with bottle deposit laws show us what to expect.

In New York, the bottle return system directly employs over 3,000 people and indirectly supports nearly 2,500 more.

In many states, worker owned cooperatives handle collection and recycling, building an entirely new segment of our green economy.

This committee has a clear choice, proven policy backed by data from 10 states and countries around the world that cleans our river, protects small businesses, supports our tourism industry, and creates good jobs for DC residents, all without raising costs for consumers.

I urge the committee to report favorably on this legislation, and I would be happy to answer any questions.

Thank you for your time.

Thank you very much.

Thanks, everybody on this panel.

Let me work through a few questions here.

Mr.

Townsend, thank you for your testimony and recognizing that we made several changes.

One of the most important I know from the first hearing was just providing the clarity that I think you and the folks you were representing wanted to see around bars, restaurants, hotels with on-premises consumption not being a redemption center.

So I believe that we have clarified that and you noted that.

One of the things we attempted to do, so I'm going to kind of see what your thoughts are here.

The point of sale.

And one of the concerns we heard was, you know, how do we make sure that uh if I'm a if I'm a small business, I'm getting that that back.

So one of the additions that we added in is that the bottle deposit amount are held to the point of sale and they're reconciled within 30 days.

And the intent behind that was to make sure there wasn't just kind of this open-ended amount where folks are essentially you've paid a deposit, but you're not sure when you're getting it back, and again, making sure there's a quick turnaround on that.

Do you have any thoughts around that provision?

Trying to make very clear it's a it has to be reconciled within 30 days to help ensure again from a cash flow or anything else perspective of an impact on a small business.

I think that um, you know, just broadly speaking, you know, Mary is squeezed.

She's been squeezed for the past, you know, since the pandemic, and and I and I when I say Mary, I'm speaking of the industry uh as a whole, and so you know, this is just one more burden, and and we view it as a burden because it is one more thing that we have to ensure that we are doing to get to our bottom line that's already thin, right?

Like I know people say it all the time, it's not just the Drake punchline, but the margin is really thin, and we are already working with with very little, and so um with that being said if if that is the solution, I'm not sure how many of my members would um would agree with that.

Um, you know, I appreciate you know try you trying to always find common ground.

Um, but I'm just not sure how how do we still like to Mary's question, how do we ensure uh like who's picking this up?

Who's who's like who's redeeming it?

Are we relying on the operators or the restaurants to go and redeem it themselves, or is someone coming to get it?

And I keep hearing this this argument that there's no data that shows that this is going to have an incurred cost for businesses, but if we increase the labor in a restaurant, that does that does mean that it's gonna cost, right?

Um and so I just want to make sure that that's not lost.

And I promise after this hearing, we're gonna continue having more conversations and meeting on this uh till we're all just sick and tired of it.

Of course, we keep doing it.

Thank you.

Um, but I think the the idea behind that was again trying to specifically address what I think we heard you and others uh speak to.

So um I think that's important.

Obviously, DC's not alone.

A lot of other states already have this.

Was curious from your perspective and talking with your colleagues in other states that have bottle deposits.

Um I think the exemptions that we would be carving out thus far in the revised draft are are greater than we see in other states.

Um I am curious what impact you've had when you talk to to your parallels uh in other jurisdictions.

Um I guess the what I typically hear from folks is yeah, but they've had it there for 20 years, so that's just not a big deal there.

Um, other than that, what are some of the key differences you've heard from other jurisdictions when you talk to your colleagues?

Yeah, good question.

Uh Connecticut, Iowa, Massachusetts, and Oregon specifically.

Full disclosure, I've not talked to anyone else besides those jurisdictions.

Um intentionally because they um have some type of exclusion as it relates to uh beer, wine, and spirits.

So um I think it you know, for the most part, it works uh in the in those jurisdictions, but uh, you know, we've we've definitely suggested and recommended that um, you know, council member Nadeau take a look at uh those jurisdictions to see if it will be worth exploring the exclusion of uh wine and spirits.

Okay, but is there anything beyond just say let's exclude wine and spirits that you've heard from other jurisdictions?

The the re redemption, like it it goes back to the same idea of um, you know, ensuring that the redemption take takes place in you know a sufficient time and that the process is efficient.

Um but I think everyone that I spoke to talked about the sanitation piece.

And the cleanliness of it and what it would take for a restaurant to store um these these bottles and cans.

Okay.

So Miss Quillian, thank you for being here.

Let me turn to you now.

Um we can follow up after the hearing too, so I can try to point you directly to the the provision that I think addresses the gap you're identifying, but would welcome your feedback once you get a chance to take a look at that and see too.

But let me talk specifically kind of pack and write where Mr.

Townsend was.

So currently, like help me walk through your process, right?

So currently um you are paying for trash removal, right?

Yes, we have to we're required to pay for both trash removal, we also have to pay for cardboard removal, and we have to pay for um glass and aluminum or metal removal.

So we have all three of those, so we currently have to separate and put them in their respective containers.

Um help me understand, like as as a person who runs a business, right?

Like help me understand what you see operating differently, if you're already separating and you're putting glass and aluminum containers, help me understand operationally what changes for you.

So I mean, the those those dumpsters are not locked right now.

Um I suppose we could lock them, but as in your own.

Right.

I mean, so well, and that we're still going to have to have the recycle, I think, unless that's gonna change, and that comes to a different regulation that's probably out of DC Health.

You gotta help me out with that, right?

Too many agencies can't keep track of them all.

But so if my customer gets a corona and shoves a lime down the neck, that bottle, the way this is written, is no longer eligible for redemption.

So now do I put that bottle in the trash?

Or do I still have to put that bottle in a separate recycling that's different from the bottle return recycling?

So it's it the these are the issues, right?

It's the okay, where am I gonna store the deposit bottles and cans, and and if I don't have to then have a completely separate bottle and can recycling for the ones that I know the redemption isn't gonna take, then okay, I can replace my aluminum and glass recycling with just the deposit collection, and I guess I can put those in there, although I'm a little worried about the broken glass, because when you dump them in the dumpster for recycling, some of the glass breaks.

So I'm just you know, I'm I just thinking operationally through it.

I'm gonna have to find a place to store those probably behind a fence or in my basement, and that's just one more thing I've gotta store, and I'm I don't have the time or the labor to clean them out.

So now we've got open bottles in the basement or right or behind a fence right next to the restaurant.

We already have to have exterminators, of course.

Every restaurant has exterminators that come on a regular basis that deal with rodents and deal with insects, right?

Um, but this is going to be like uh it it's a source for those critters.

So that's the that's the thing.

I mean, we could put them in the yeah, anyway.

So I guess what I what I'm looking at is we don't see that in the states that uh restaurants in the states that have this.

And I don't know why.

I'm sorry, I don't operate a restaurant somewhere where they have that.

So let's look at that, right?

Right.

And that's what we're trying to do, right?

Is try to say, okay, how do we tease out absolutely legitimate operational concerns that a restaurant owner is going to say, okay, I gotta think about all these things.

I'm not discounting that at all.

But then what do we see in practice in jurisdictions with a bottle bill, and then how does that work operationally?

Um, and when a bottle and a can have a value and then also have a handling fee associated with it, then the market that gets created to say, we're gonna come pick up you you're not storing them in your basement, because I'm coming at the end of every you know, we're we're picking those things up because they now have value, you have a market relationship that and they're hauling those things away.

So I again I want to continue working with you and others after this hearing.

Um obviously somebody in New York uh drinks a corona with a lime as well.

Um and so how does that work, you know?

Like, so we'll those are the types of things we're working on as well to make sure that we answer legitimate questions, but also fortunately we have a track record in a whole bunch of other places about how they do this and and we have the opportunity to learn from that too.

Um, and I appreciate that.

And I'm sorry if I missed it.

I I did have to go through the I had to somebody's had to supply me with a red line because I don't have the technology to do the.

We will make sure that we follow up with you and point there, and then also have you tell us like if you're like okay, that addresses it, or if you say, I don't think that's that's the whole point here.

The changes I saw, I did not think addressed this issue, but we can talk offline about it.

Exactly.

Mr.

Weiss, let me turn to you.

You know, one of the things I hear loud and clear in your testimony, and it echoes a few others, is that increasing the value uh or the volatile deposit amount from 10 cents uh in the introduced version, there's a mechanism where it goes up.

Mm-hmm.

It sounds like there's not a mechanism now, of course, because you it was it's been taken out.

That's why I said the introduced version.

Right, right.

So what we heard the feedback around was if we need to make a change, you go through the legislative process if we're gonna do that.

We don't want just the department to to go off and make a change.

What I'm also hearing folks say is man, it's just politically it's hard to go in and make a change, and so other states have kind of gotten stuck a while.

Why it so let's say we go back to the introduced version and put that in.

Um DOEE at some point, I mean they they work for a mayor, so how is it any less political to have a department say they may make the change after the two consecutive years of declining redemption rates?

Um, because the end of the day, whoever the mayor is is gonna face the same political pressures to say, yep, I am increasing this from 10 to 15 cents.

How is it any less political or fraught with the pressure points that come with that?

You know, who really could answer this from experience is Kirsty.

And that and she, you know, she she had a meeting just the other day, she made a uh wonderful, and you should bring her back up to talk about that if you can't.

Yeah, I know.

Um but um I I just my experience.

So I've been working on bills here and and working with mayors here since 1998.

And um, you know, it it makes so much more sense to have a process within the agency that has oversight over this program to have them um uh through some very specific criteria.

And and and again, I I believe the way it's written, and maybe I'm I don't have it exactly right.

Kirsty can speak to that.

But um it is very unlikely we're gonna have an increase for five, ten, you know, even fifteen years from now, um, and and it might even be safer to have leave that decision making to the agency than to have it go go to the full council, which could maybe decide next week they if the bill had been passed to increase the deposit.

I think it you know they well, it takes longer than that through the legislative process, of course.

But I I just have this gut, and again, um maybe um Vanessa can add to that, but um I did it my experience here at the council is I'd rather have DOEE, which is an amazing, very respected agency that we've built.

We you uh you and and council member former council member Chan and others have built and and nurtured for many years.

I think they're they are best suited to to uh look at the facts and make a decision about this.

All right.

So I I guess the point I'm trying to make around this, and we'll keep wrestling with this and hear the feedback is um I love DOEE as well.

Um at the end of the day, the agency works for a mayor, and I think you and I would both agree, despite the excellence that we see in the department and the staff and the people that do the good work day in and day out.

You and I probably disagree with some decisions essentially made by the mayor through a department, right?

So I don't know if a let's have an agency make a rate change completely insulates from just the political reality that at the end of the day a mayor works uh agencies work for mayor, and that mayor, whomever that person is 10-15 years from now, um, would probably face the same political pressures.

Anyway, that's what we're doing.

Well, we're not in New York and and and you had mass on, I forget who was it New York or Massachusetts was one of the witnesses in the first panel.

And um, no matter the what the I it just feels to me that if Massachusetts and New York had had some kind of um ability, there are agencies to have ability to do that, they wouldn't have been sitting on a five percent deposit for decades.

And that's what we're looking at.

Um, Ms.

Batters Thompson.

I'll I have a different question for you, but if there's anything you wanted to add on that real fast.

Yeah, I do not think having the agency in charge of this completely insulates the process from political influence.

However, I do think it puts in place safeguards because we have a standard of review for administrative procedures in DC.

We have our own version of the administrative procedure act, which requires the agency to act in accordance with evidence.

As you well know, the council is not bound by those same requirements.

So the council is more directly in the 100% evidence-based.

100% evidence-based you are, sir.

Um, but you know, we uh can't guarantee that across the base.

And there is a basis for a lawsuit if the agency acts in a way that is arbitrary and capricious and not supported by the evidence.

There is no similar right of action for the council.

So that is my answer on why one is more politically insulated than the other.

That's helpful.

Thank you.

Um I want to come back to you as well.

You you did a great job of helping outline also the uh just what we are seeing in the river.

Um Appleseed has been um one of the the leaders in our work to help clean up the Anacostia and appreciate that.

Anything else you want to add about the risk, not just from a pollution perspective, but I'm kind of going at the financial risk.

Sure, right?

The financial risk of just sticking with the status quo for our green spaces, for our waterways.

I mean, like how much more street sweeping do we have to pay for?

How much more stormwater management are we having to pay for?

How many more trash traps?

What are our MS4 fines that we are facing?

Anything else you want to add about the financial risk to the district?

Yeah, I mean, there is a financial risk.

Quiz Chris Williams already spoke about the MS4 permit compliance issue, and frankly, we are getting closer in DC on an ongoing basis to violation of the terms of our MS4 permit, in part because the restaurant industry is not the only sector that is struggling financially in DC.

I would say the environmental sector has been hit incredibly hard by the reduction.

I know you have no idea what I'm talking about.

Every year for the last several years, both environmental nonprofits and government agencies handling things like street sweeping and cleaning our rivers is being cut.

It is a constant erosion.

But it's a kind word.

Sorry?

Cut is a kind word for what we've seen.

Yes.

There's other words we could use, but I don't think I need to use them with you.

The folks in this room are well aware of how tight things are at DOEE and DPW to the point where sweeping the bag fund every year, and council has to restore it.

That fund already pays for our cleanups.

So I want to be clear, while there is not no effort involved in this bill.

What it does do slightly is reallocates the effort required to deal with this huge number of bottles that are on our streets and our parks and our waterways, and just reallocates it to the sector that is economically benefiting from the distribution of the bottle versus that responsibility falling frankly on government agencies, nonprofits like ours.

Chris Williams has to raise funds to coordinate the volunteers who go out and dig these plastic bottles out of the river.

This is not a cost-free system as it exists.

And I want to emphasize that as DC has been thinking about how we move out of our economic challenge of the last several years and the reduction of the federal government sector in DC, we are banking heavily on increasing tourism.

Nobody wants to come see a monument with plastic cans or excuse me, aluminum cans and plastic bottles scattered all around it.

No one wants to go to a football game or a baseball game on a river that is just literally choked with litter.

We have all these fancy hotels at the wharf.

People will not continue to go there if our rivers are completely trashed.

We are close to having a swimmable, boattable, fishable Anacostia River.

And that river is becoming a huge engine for economic development, and that work has been going on a consistent basis since at least 1999.

This is the next step in making sure all the money, all the time, all the energy that has gone into improving the DC environment and making the Anacostia watershed attractive to investment, that we close that deal.

So I don't want this to be viewed as an environmental or economic boost issue because it's simply not that.

We have a lot of people in the room here today that may be impacted to some degree, and there are ways we can support them in ensuring they understand the law, that it's clear how they comply, and that we provide the pickup services, for example, that those folks need.

But I think what I would encourage you to do is keep looking for ways to get to yes with the people in this room and stop and and move us away from a conversation that pits environment against economy, because in DC, our environment, our monuments, our beauty is a huge part of our economy, and that is not being introduced in this discussion so far.

Yeah.

I really appreciate that.

And I think um perhaps not universally, but I think most people uh in this room that have come in constructively engaging in the bill recognize uh the value and importance of a healthy river, of a clean environment, and having a great local economy.

Um, I I will say I I hear most people, not all, but most people come in with the spirit of saying, all right, I we share some of the goals.

Here's how I'd recommend making changes, or here's how I recommend addressing one concern, but not saying just throw the whole damn thing out.

Uh and so I I appreciate that, and that's the job, and that's the goal that we're working on.

Mr.

Townsend, thank you.

Uh, I just I wanted to commend you on what you said.

Um, and we are, I believe, at the end of the day, uh, true partners in this work, and we all are trying to reach a common goal.

Um but just like the gentleman, um, I just want to know he ran off of a number of organizations and folks in the community that uh they are partner with and uh I just want to piggyback on what Thor said earlier about uh the big guys and the small guys being partners in our industry and that they help one another out.

And I just as we continue this conversation, I just want to make sure that we are sensitive to that uh in the hospitality industry as well, is that you know the small guys can't make it without the support of the in the infrastructure of the big guys and vice versa, and so we all need each other.

And if if the big guys, you know, quote unquote, if they are impacted, then that impacts the smaller guys as well.

Yeah, and then I'm uh I want to do uh Kelsey Donning Crawford has joined us online.

And Councilor Crawford, we were about to wrap up this panel.

I know you just jumped on those, so I was gonna say if you wanted to jump in with a round of questions, but I also recognize you just logged in, so you may have missed part of their testimony.

Um, but let me turn it over to you if you you had any questions you want to.

Yes, I good afternoon, everybody.

I have one question uh for both Ms.

Blood and Mr.

Townsend.

I did catch part of Ms.

uh testimony where you said you're still concerned about how bottles get picked up from retailers in the updated print.

And I heard chairperson Allen say that he's still planning to work with you uh to get this right.

Um but I did remember that when we had the seabed hearing, we talked a bit about how existing lease and settlement agreements may preclude some of the requirements that are in um that was in the initial bill and maybe in this print as well.

Have either of you, Mr.

Townsend, have you heard from members on the updated print and whether additional changes still need to be made?

And Miss Quillin, is there anything you want to share about your lease agreement or perhaps any settlement agreements that you may have and how that impacts the language in the revised print?

And this is specific to trash and pickup.

Uh thank you for the question, uh, Councilmember Crawford.

Um I have not specifically heard uh from members about this, but it's definitely something to uh keep in mind as we move forward in this conversation.

I don't know if Mary, if you've yeah, I mean, I don't I don't have anything in my settlement agreement that is specific to this, but it doesn't mean that there won't be in the future.

And so we just need to keep in mind that settlement agreements are definitely a way that ANCs.

I ask for things from small businesses like restaurants and garbage and rodent control are uh are of honestly they're they're things that the whole city has to work on, right?

I'm not I'm not trying to excuse small businesses from their part in this.

Um, but that is something to remember.

And um, and the one other thing to keep in mind, and I'm I'm sorry, I'm gonna steal five seconds here, is that even when you have a program that's cost neutral, it's actually not quite cost neutral to the small businesses, and that's because most people are paying for things with a credit card, and so that ten cent deposit on the bottle, the retailer has to pay a two percent commission on that ten cents that they don't get back when they get the bottle, when they get the 10 cents back on the bottle.

So just keep that in mind.

Thank you.

Is that a plug for the swag?

Thank you.

I will be joining us.

Thank you, Councilor Crawford.

Um, I think she said she was gonna be joining in the room in just a little bit.

So, um, all right, I don't have any further questions for this panel.

Thank you all very much.

Really appreciate it.

Thank you.

All right, let me call up our next panel of witnesses.

We have Susan Shore, who's the co-chair of the Zero Waste Committee with the DC Sierra Club.

Laura Nunn, who's the vice president of Friends of Kingman and Heritage Islands, Tiffany Harvey with State Association, official with DC Delaware DC Beverage Association, Bree Deatley, principal consultant with the American Beverage Association and Breezeway Consulting.

I think that's all for.

There we go.

All right, so uh Susan Shore, we're gonna follow that order, so I'll kick it off with you.

Um good afternoon.

My name is Susan Shore, as you mentioned.

Uh, and in addition to chairing the Zero Waste Committee for the Sierra Club DC chapter, I am a co-lead for the three RC for DC coalition.

Uh wanted to thank you, Councilmember Allen, uh, for the opportunity to testify uh and also for your support in uh co-introducing the bottle bill back uh in January 2025.

As has well been stated today, the district is inundated with bottle and can litter, but fortunately, bottle bills are a proven solution to beverage container litter.

In addition, the bottle bill will also lower recycling, trash, and cleanup costs for local government taxpayers and businesses by shifting these costs to big beverage companies whose packaging is littering our parks, neighborhoods, and waterways.

For example, we estimate that beverage containers constitute 20% of curbside recycling, so we can take that out of um the the cost for those services.

This legislation will also create new green jobs and entrepreneurship opportunities.

The committee print of the district bottle bill squarely addresses many of the concerns raised by businesses as we have heard today.

And the 3RC coalition conducted video interviews with some of these supporting businesses, which we would be happy to share with council members.

Their main message was very simple litter is bad for business.

This includes the owner of AMA, a restaurant, I think not too far from Capitol Hill.

She also submitted testimony to the October hearing, and I would invite you to take a look at her testimony, but she highlighted how this bill will also reduce trash hauling costs for restaurants who now no longer will can keep those bottles out of their trash.

We also talked with a manager of a small Portland, Oregon bar and bottle shop, whose business is pretty similar to some of the businesses who testified here earlier today.

And at the end of the interview, we asked him, is there anything that you would want people who are living in an area that is considering a bottle bill to know about legislate such legislation?

And he answered, it's easy and it makes sense.

He also said that he supported expansion of the Oregon bottle bill to include wine bottles.

We've studied bottle bills in other jurisdictions before approaching council, and the most important lesson we learned is one we've already heard today, is not to lock the deposit amount in the legislation requiring new legislation to amend the deposit value.

States, as we've heard, that set their deposit value at a nickel back in the 1970s have faced almost insurmountable pushback from big beverage companies when trying to amend their laws to increase the deposit to a dime.

And that's why states like New York and Massachusetts still have a five cent deposit and why the recycling rates are so much lower than states like Oregon that have a 10 cent deposit.

Section 14H of the district bottle bill that was co-introduced by 11 council members on January 15, 2025, authorized DOEE to raise the deposit value by five cents, but only if the bill's target redemption rates were not met for two consecutive years between 28 and 2020 and 2033.

It allowed a second regulatory review five years later.

We had proposed continuing this twice a decade review beyond 2020 2038, but the draft committee has uh print has stuck the uh struck this language, which we fear will have long-term and harmful consequences.

We're very concerned that in the absence of the stricken language, we will face the same fate as other states that have tried usually unsuccessfully to amend their laws to raise the deposit value.

Nobody wants a second prolonged and expensive bottle bill campaign, consuming the precious time of lawmakers, opponents, and advocates alike.

Instead, council should authorize DOEE in this bill to conduct periodic reviews of redemption rates to determine if a positive is warranted, and then only if warranted, increase the deposit value by a prescribed amount.

This sensible approach will ensure the district deposit return program continues to meet its redemption targets and protects the district from becoming polluted once again.

Doing so will ensure the kind of strong equitable bottle bill district residents want council to pass.

Voters just back pro-environment, people-powered candidates for mayor and council.

It's clear where voters stand and what they expect from their leaders.

They know bottle bills make sense, that bottle bills work, and I can't wait for a truly strong equitable district bottle bill to go into effect.

Thank you, Councilmember Allen, for the opportunity to testify.

Thank you very much.

Next, let me turn to Laura Nunn.

Good morning.

My name is Laura Nunn, and I'm one of the founding board members of the Friends of Kingman and Heritage Islands in World 7.

I'm here as a native Washingtonian to express my strong support for the DC bottle bill.

I believe DC needs to return to a bottle and can return system to not only address the needs of our disfavored communities that suffer disproportionately from litter in our parks and river, but especially for the well-being of our youth that rely on public spaces for education and recreation.

We've seen an explosion of single-use plastic containers, partly due to the increased reliance on bottled water.

Routinely, trash cans in our parks and public spaces are overflowing with cans and bottles, especially in our black and brown communities.

I grew up with parents that were active in the civil rights movement.

My mother believed that environmental justice is social justice.

I spent as much time in local parks and out on our rivers as I did in public meetings and protests.

My mother believed in it was critical that her children understood the importance of having access to nature.

She was optimistic that my future would be one of clean rivers and parks, and now that I have children of my own, it is important for me to continue that legacy.

I know that a bottle bill is a critical part of the solution.

What we need to keep in mind is that this process is nothing new to Native Washingtonians.

When I'm sitting at Langston Golf Course with my son or attending neighborhood gatherings, I often talk to seniors who remember fondly being able to return their bottles and cans for extra cash as youth.

They smile when they're reminded at how empowering it was to be self-sufficient in acquiring funds for small pleasures like candy and toys.

Many also recall helping their families, especially grandparents, by being responsible for returning those bottles.

My mother was raised in Michigan, so I too loved visiting my grandmother and helping her with bottle return.

It strengthened the bonds between our neighborhood businesses and their customers.

Kids were often returning bottles to the store where they wanted to make a purchase.

When I was young, young people had a variety of opportunities to earn money.

But today we no longer have some of those youth jobs like grocery store baggers and paper routes and those even babysitting isn't really available to young people as it was when I was young, which leaves many youth in poorer communities with limited means to acquire even small comforts.

But those same kids in DC have been empowered to address the impact of trash in their community in the classroom and also through programs offered outside of school at places like Kingman Island.

A strong bottle bill will be a critical tool in the effort already being made by students to improve their communities.

The bottle bill will make sure everyone is part of the effort to reduce trash in places our kids go to learn and grow.

As we know, these outdoor spaces are critical for mental health of our communities.

The mayor's office has a division of Clean City, which acknowledges this need and encourages it encourages its residents to adopt parks, blocks, and streams.

But the city has also struggled to provide the resources to the Department of Energy and Environment that funds many of the programs that help address litter in our communities.

The bill would bring balance after these losses while also lowering the cost for DPW on collecting trash and recycling.

The members of 3RC, the coalition of organizations supporting this bill, as Chris nicely listed out, understand the importance of including everyone in this critical conversation and have done an amazing job over the last three plus years reaching out to various communities across the city, especially those that are impacted by trash in Ward 7, 5, 7, and 8.

We've attended hundreds of events and meetings, including faith gatherings, community events, youth events, ANC meetings, we've been to the DC State Fair and Acostia Park Latesgate, Earth Day and MLK Day cleanups, and school STEM fairs.

We've spoken to residents of all ages and races, making sure any questions and concerns are addressed with facts and solutions.

And the response has been overwhelmingly positive.

Residents get this.

More often the response has been they don't understand why DC hasn't already implemented a bottle bill.

And another exciting benefit of the bill, as Vanessa brought up, is the potential for supporting our green economy and new small business opportunities.

We know how important it is to be a proactive and innovative if you want to see success.

The bottle bill provides new and exciting opportunities for our community to employ folks in a way that helps our community instead of harms it.

Our kids care about their futures, and we are obligated to support them.

So my support can't simply end with serving on the PTA.

It has extended to the efforts like the bottle bill, which will reduce reduce litter and increase recycling rates in our community.

Our kids deserve our help reducing trash in places they go to learn and grow.

Thank you.

Thank you very much.

Next, let me turn to Tiffany Harvey, and then we have Bree Deatley who's joining us on Zoom after that.

Thank you so much.

Good afternoon, Council members Crawford and Allen.

My name is Tiffany Harvey, and I'm here on behalf of the Maryland, Delaware, and District of Columbia Beverage Association.

Our members operate more than 25 facilities across Maryland, Delaware, and DC.

We testified in CBID back in October when B 2658 was hired.

We appreciate the opportunity to be before you today as well as all of the time you've spent updating the print.

But we do still have a few concerns, so we appreciate the opportunity.

Before I get into those concerns, I want to quickly talk through some of the relevant history about bottle deposit laws.

There are currently 10 states that have bottle deposit laws.

The majority of those were passed before curbside recycling was a thing.

The earliest passed in Oregon in 1971.

The most recent state to pass one was Hawaii in 2002.

States with bottle deposit laws regularly see legislation introduced to make changes to their existing programs.

Notably on June 17th of this year, Vermont passed a comprehensive overhaul of their existing deposit law program.

New York had to create a multi-agency effort led by the Department of Economic Conservation and Law Enforcement to try to curb millions of dollars being lost to fraud.

In 2024, Connecticut increased our deposit value from five cents to 10 cents, which was higher than their neighboring states.

The fraud was so bad that emergency legislation to permit law enforcement to aid in fraud prevention was signed into law days after introduction just earlier this year.

Delaware had a bottle deposit law that was revealed, repealed in 2010.

It's worth noting that your border states do not have bottle deposit laws.

Virginia saw introduction of a bottle deposit law in 2020, bottle deposit bill in 2022.

It was rejected.

They are currently in the process of conducting a comprehensive study to assess their recycling needs.

Maryland rejected various versions of bottle deposit legislation in 2011, 2012, 2013, 2014, 2016.

2021, 2023, 2024, 2025, and earlier this year in 2026.

I raise these bills because you know some of those legislators.

Those folks are not widely influenced by the beverage companies as though folks have testified today.

They make independent decisions after evaluating whether something can be implemented or not.

The other relevant point about those bottle states is that states across the country are not embracing bottle deposits as tools to do to assist in reducing litter in our waterways and communities.

There are some laws like EPR, extended producer responsibility, passing in states like Maryland, Minnesota, to name a few.

And industry has supported those legislations, that legislation, including the cost of producing and working through the implementation of those programs.

Earlier, I guess at the end of last year, December 8th, 2005, I was present while another committee here held a round table, and several of your colleagues raised concerns about and shared some frustrations along with residents about trash and recycling collection.

DPW was there.

And they testified that they are currently working to optimize their collection so that collection is more efficient and reliable.

DPW went on to testify that route optimization and recycling and trash has not been done in 10 to 15 years.

They're actively working to solve for problems and deliver improved collection of recyclables and trash.

As a council, you just awarded over half a million dollars, I think it was $650,000 in the budget to assist with addressing trash and recycling through the purchase of rat-resistant trash cans and recycling bins.

In addition to that, you actually are considering legislation aimed at addressing trash and litter in public spaces.

That's relevant because rather than trying to kind of force fit this bottle deposit law that only addresses bottles and cans, this body can focus on other ways to make your existing programs better, more robust, more efficient, uh, more efficient, delivering immediate solutions and quality of life to residents.

With that, I will wrap, and I think you're going to hear from the actual subject matter expert, which is Bree Dealy next.

Alright, excellent.

Thank you.

Then next, let me turn to Bree Deatley, who's joining us via Zoom.

Good afternoon, Chairman.

All right.

We can hear you.

We can hear you, but we can't see you yet.

That's unfortunate.

Here we go.

There we go.

Apologies.

My name is Bree Geatley.

Um I'm the principal of Breezeway Consulting in Somerville, Massachusetts.

And I am here representing the American Beverage Association and Tiffany's organization, the DC Beverage Association.

I am a subject matter expert on recycling and container deposit systems.

I have worked on deposit and return systems for 40 years since the implementation of the California law in 1986 and worked on all aspects of those programs.

I really want to use my time to kind of pull the camera back a little bit and focus on some sort of macro level issues about the uniqueness of a deposit return system in a jurisdiction like DC.

I believe there are inherent obstacles to implementing a practical and successful DRS in DC that result from its unique demographics and location.

So let me just turn quickly and primarily to the issue of fraud.

Ms.

Donovan earlier, I think gave a really elegant and nice definition of what we mean by fraud.

Fraud is really the collection of a refund on a container for which no deposit was collected.

And that's really what we're talking about here, and the opportunity for that, that the ability to collect a deposit on everything sold and to collect refunds only on things sold in the district is a unique challenge, especially in a jurisdiction like DC.

We've heard a lot today, and we talk a lot about redemption fraud, which is bringing containers in from outside the jurisdiction.

We've had a lot of conversations about UPC codes.

Let me just point out that in 55 years of operating redemption systems, border fraud has been a major issue in a number of jurisdictions, and there is no silver bullet to solving it.

UPC solutions are not practical, as was pointed out earlier by Mr.

Cheston.

So the only jurisdiction that doesn't have cross-border issues with deposits is Hawaii, and that's because they don't have borders.

But one of the really key issues that has not been addressed today is what I would call sales fraud.

And it's again, it's the number of containers that could be purchased outside of DC and brought in and eligible for redemption.

If you think of the large number of street vendors, of small grocery store owners, of delis, of sandwich shops, pizza shops, who go to Postcoes, warehouse stores, restaurant supply stores outside of the district to buy their beverages and bring them into their restaurants and stores every day.

Those containers are not going to have deposits on them, but they're going to be eligible for refund in the city.

That's going to create an enormous overhang of containers.

I've frankly been a little bit amused at the concern over the fact that the city might not hit its targets that are in the legislation.

I have no no concerns that DC won't readily blow over the top of 100% redemption rate.

And that has enormous financial consequences for this program, especially for the city, which is counting on unclaimed deposit revenue and product registration fees in order to fund its massive responsibilities to DOEE.

I'm really sorry that you're not hearing from a beer wholesaler on the border of Connecticut and New York right now.

It's also unfortunate there hasn't been more conversation about Connecticut's doubling of its deposit and the absolutely outrageous increase in the redemption rate that has occurred in Connecticut as a result of that.

Not one, but three major emergency pieces of legislation have been passed in Connecticut in the last session to try to address that problem, and nothing has gotten better yet.

The beer beer wholesalers who operate on the New York Connecticut border are running at 130, 140, 150% redemption.

Beers wholesaler testified in Hartford that he is tens of millions of dollars in debt just for paying out refunds and handling fees on containers that he never sold and never collected the deposit on.

That is a major problem and it's going to be a major problem in DC with this program.

Let me turn briefly to two additional issues beyond fraud.

One is the issue of siting.

We've talked a lot about retailers and stores and bars and restaurants taking back empties.

But there's a big emphasis in this bill on other forms of redemption and the operation of independent redemption centers.

Now I would point out that in an attempt to ease the burden on retailers, the bill attempts to shift the focus to these independent redemption centers, which have to be sited.

They have to go somewhere.

They have to be able to accommodate large parking lots.

They need large loading docks to be able to have trucks come in and pick them up.

And they need to overcome neighborhood resistance.

The NIMBY opposition to siting of redemption centers has been dramatic in a lot of places.

No one has ever tried to build a from scratch redemption system in this country since New York in 1982.

It's a big undertaking, and you should not underestimate the potential opposition to that, especially given some of the drug and other social issues that have arisen around those redemption centers in Oregon that are like that.

Finally, just to conclude with a comment or two on the legislation itself.

I've heard some folks say today this is the best piece of deposit legislation they've ever seen.

I've read hundreds of deposit bills in my 40-year career working on this issue.

I have to tell you that I find the bill somewhat schizophrenic in terms of its governance structure and who's responsible for what?

I can't really tell if this is a stewardship organization run system, a DOWE run system, a distributor-run system, and who's responsible for what.

As someone who has operational responsibilities for the system in Vermont, for example, I wouldn't know how to set this system up because I don't think the legislation is clear enough to do that.

Thanks very much for your time.

Absolutely.

Thank you very much for your testimony.

Um all right, let me work through a few questions here as well.

Um, I'll start with you.

Um of the big takeaways I'm hearing from your testimony again focuses on the um the diff the one of the distinct differences between the introduced version and the revised draft, and that is where we removed the section of where the agency can be able to, after two consecutive years.

I don't explain to you, you know it.

Um so I guess same question that I asked earlier.

Um, if that, if the intention behind that was both to use an evidence-based process by which making an adjustment, but also what I've heard several people say a recognition of a political challenge to get a legislative body to come back and increase.

Um why wouldn't a mayor have the same political uh challenge?

At the end of the day, an agency is going to make a recommendation, but a mayor has to accept it.

Um, and I would assume that mayor is going to face some political pressure uh one way or the other.

But is it just that the it it just it doesn't insulate it, but it reduces that political pressure by going with the agency route.

I think the the as Vanessa I think more elegantly explained than I than probably I can.

Um, you know, the the bill, in my view, sets out explicit guidelines that DOEE must follow that are coming from the authorization is coming from the council for them to do this, um, and uh if there is some objection to it, as Vanessa pointed out, there can be lawsuits that are brought to to resolve this, and that is not something that is possible for for the legislation the council would pass.

So, we just we have seen just how difficult it is, and you know how difficult this campaign has been.

Um, it has consumed a lot of your time.

I mean, think about all the time that you have spent talking with businesses trying to find solutions to them.

There's going to be a repeat of that.

There's going to be a repeat.

I have been working on this campaign for four years since we started doing brand audits so we could, you know, have evidence of the the kind of uh bottle and can pollution that exists, and who's whose uh bottles and cans are polluting the district.

So it's been a very intensive four years for me and for all of the my fellow members of 3RC, and it's taking the time of the opponents as well.

Not that I care that much about them, but I mean we're all spending a lot of our time on this, and I think it would be a far more streamlined um decision making process because the guidelines are spelled out in the law.

It can only happen every five years.

There has to be a failure to meet the redemption targets for two consecutive years within a five-year period, and it's well defines exactly how much the deposit increase can be.

So I I think that will protect us from yet another uh four-year campaign.

Got it.

Okay.

I mean, you know, I'm here for it, so we'll do the work.

But I hear your point.

Um and so in part part of what I think was really compelling with um with Vanessa's testimony was around, you know, creating a process that is an evidence-based process that goes through, and there is uh it's not an inherently political process.

There will be political impact on decisions, um, but it sets up a different kind of baseline.

So I thought that was a helpful way to um that she frame that.

One of the other questions I asked since you have been working on this campaign for a long time and you know everything backwards and forwards on this, um, outside separate from that element.

Part of what we have attempted to do, hear that feedback from the previous hearing, definitely hear feedback from a lot of our much smaller businesses that had different concerns, be it you know, the corner store about being a redemption site, um, the uh, you know, our local brewers, for example, that make up such a small share of the overall cans and bottles.

So we have created several um changes in this bill trying to be responsive to that type of feedback that we heard.

Do you feel like those are those are adequate or adequate's not the right word?

Do you feel like those are um acceptable uh changes that are that we're being responsive to that?

Do any of them give you concern or pause and say it may be well intended, but you're actually gonna accidentally undermine the whole program?

The biggest concern that we have is this loss, the the you know, the striking of the language related to the you know evidence-based process for increasing deposits.

That's our biggest concern.

Um, you know, the amendments that have made been made to accommodate businesses seem um balanced and sensible.

The other major concern, you know, what has driven this campaign from the very beginning, from my perspective, is to make sure that we not only have a strong bottle bill, but that we have an equitable bottle bill, and an equitable bottle bill means it has to be easy for all residents to be able to return their containers and get their deposit refunded.

Um, and so we do want to make sure that the bill provides adequate provisions for residents of wards seven and eight that have fewer retail options, that there are also going to be redemption facilities there.

But these can be things like bagdrop programs, um, and and perhaps Laura could speak to this.

She's just back from a trip to Maine that has a you know a robust bag drop program, and she could talk.

I I've also visited Maine as a tourist and seen a very small building in a parking lot of a modestly sized grocery store there that acts as a redemption center and seeing that it can be possible to stage those in parking lots and grocery stores.

We'll do well.

Here's what I'm gonna do since my time is ticking down.

I'll probably come back on a quick second round, so Ms.

I'll come back to you on that.

I did want to make sure I turned to Ms.

Harvey for a second before I run out of time on my first round.

Um, one of the things I want to try to make sure I understand.

So ABA supports recycling.

Correct.

Okay.

Um, so I know you have to every bottle back initiative, and we've talked about that.

Um I mean, the data is fairly clear though that in states where we have bottle bills, bottle laws, we will see a higher rate of that redemption and recycling than others.

And we had pretty good conversation earlier about some of the challenges we see with single stream recycling that takes place.

Specifically, you talked about your preference or recommendation is don't go the bottle bill route but go the EPR route.

Is that did I hear that correct?

So I just gave an example of alternatives that states some states have employed to address recycling concerns, and EPR takes a wider look at everything that goes in the blue bin as a as kind of like a holistic look at recycling.

Okay.

Do your members though, like one of the things I thought was interesting.

We heard the testimony earlier about the I'll use the word quality, and what I mean by that is the less contamination.

Um the quality of the recycled material is higher when it goes through a redemption process than in a single stream recycling.

So do your like do your members value the higher quality, meaning less contaminated uh recyclable material?

I would assume they would.

So I'm gonna let Brie answer that because she's a subject matter expert here.

But I will say that the members, right?

Um, I've been to their facilities uh where they they are doing the active work of recycling and seeing the changes that they've made um from their using colored plastics.

I mean, you think of some companies that they've switched to that, um, that they are making their bottles to be remade.

I mean, you talk about every bottle back, but the companies um they you can see the branding now, it says recycle me, whether it's aluminum, whether it's plastic, they are using RPET materials, which is the highest grade you can use.

Um, so that is what they're starting with is a higher quality and a higher grade.

So when they're getting those bottles back, it is bottles and cans that are made to be remade, is kind of the way that they're doing it.

So Bree, I don't know if you want to specifically.

Let me do I know I'm already a little over time, but Miss Dele, how about I'll ask you to respond to that.

Then I'll turn to Councillor Crawford for a round.

I'll come back with a couple of second round questions.

Yeah, thanks.

Um, with regard to aluminum and the you know, the prospect quality material we come to the difference in the the issue with um the issue with PET, which is our other main package, we use virtually no class in our industry, so um the PET is the other main issue for us.

And there is a difference um in terms of the amount of contamination when the material enters the system, that contamination can be cleaned up.

It's just that you you have a greater what we call yield loss in the process with a curve with curbside material.

That said, one of the reasons that we have supported EPR and and one of the things we have focused on a lot with EPR programs is improving the quality of the MERFs of the processing facilities.

If you have not invested in many jurisdictions and companies have not kept up with investments in MERS to be able to uh pull really high quality uh curbside material through, if you do that, if you've invested in optical sorting and you have robots on your line that are pulling PET bottles off, you're getting very high quality bales, and there are MERFs out there that are producing bales very close to the quality of uh deposit bales, but there's also a cost trade-off here.

You know, if you're talking about a system that costs four or five times as much to get that incremental change in quality, is that really worth it as a trade-off?

And I think for our companies in a lot of cases it's not.

We want to keep the deposit systems we have working well, but you know, a lot has changed since we passed the last one in 2002 in Hawaii.

And um we really want to, you know, keep the focus on the most efficient way so that we're not raising the cost of the system.

You know, this is gonna be a really expensive system borne by a relatively small number of wholesalers and distributors, not big companies off somewhere, their local wholesalers and distributors that are gonna pay those costs, and those costs will not vaporize out into space between them and the consumer.

Okay, all right.

Thank you.

I know over time.

So let me turn to Councilmer Crawford.

I'll come back with some second-round questions.

Thank you, Chairperson Allen.

And again, good afternoon to everyone.

Um Ms.

Harvey, you have been very consistent about the challenges that you expect the district to face if we move forward with a bottle bill program and other states around us, Maryland and Virginia do not have a comparable one in place.

Um, so one of the questions I want to ask you first is do you anticipate that there will be changes in distribution patterns or consumer purchasing behavior if the district adopts a program before Maryland or Virginia?

We do.

Um, and I again I Brie can probably speak to this more um significantly than I can, but I can tell you when there's not a can you pull your mic forward?

I can.

Thank you.

I can do that too.

Um, but when they're when your bordering states don't have battle deposit laws, what you're seeing is folks are, especially where we have such a transient area kind of in Maryland, Delaware, Maryland, DC, and Virginia.

Folks are their grocery carts at the point of sale, if they're purchasing beverages that would be captured in this um legislation, they will be cheaper at point of sale.

And now you have to go back and get your deposit and your your refund.

Um, but for folks who are navigating high cost um and increasing cost of living, they could take their entire grocery cart um across the line.

Um so that would be my kind of my initial answer to that.

So Brie, I would love to give you an opportunity to answer as well.

Yeah, we certainly see that um, you know, in in multiple jurisdictions.

Uh we see people do that.

We've seen it with the effect from beverage taxes.

Philadelphia was the most recent one that was studied really closely, where we saw significant migration, out migration of customers into the surrounding communities outside the Southern Philadelphia when they implemented a beverage tax and increases in sales outside, but the implication in that case is not is not that you create a potential liability.

With a deposit you do, you know, someone goes out and buys a container and then brings it back.

You're not talking a 10 cent differential in the price, you're talking a 20-cent differential because you can not only save the 10 by buying in Maryland, you get 10 back when you redeem it in the district.

So 20 cents on a container, $2 and or rather $4.80, you know, on a c on a case of beverages is pretty darn dramatic and a pretty strong incentive.

Um, anyone who is not supplying their small store or pizza shop with containers from outside is going to do that.

And just an anecdote, it's interesting.

You earlier um Representative Shell Sheldon from Maine was going to testify.

Um, I've done a lot of work in Maine because my uh responsibility is running a beverage co-op there that manages most of the redemptions in the state.

We've done multiple studies up there uh with sales data and with returns data, and for Vermont, which is has fewer people than DC does um spread over like 9,000 square miles.

Um, in Vermont, the state, our redemption system, our recycling system, and our disposal system manages 20% more containers than are sold in the state.

So I know how many containers are sold subject to deposit in Vermont, but our system manages 120% of what's that's that's Vermont, where the biggest border town is like White River Junction for New Hampshire.

Um put that in DC, you know, where the where there's 5.8 million people in the metro areas surrounding the district.

Um, yeah, the potential consequences are enormous and really unprecedented.

Thank you.

I also had some questions for the Vermont representative, um, but hopefully we can follow up in writing.

Uh I also saw in the committee print that there is a new tiered fee structure that exempts distributors selling fewer than two million containers annually from registration fees.

Um, Ms.

Harvey or Bree, from your perspective, does this meaningfully reduce the burden on smaller distributors, or are there still significant costs that remain outside of the registration fee?

And I would say there was some testimony earlier today um regarding some concerns that kind of linger, I think, from smaller distributors, but I don't want to speak for them.

Uh but I will pause uh given Bree's um expertise around the country and working in a space to see if she has any additional authors.

I again I would just I would just throw out there that so you have to realize that there's a whole package of costs that the distributors and wholesalers face.

The largest, of course, the elephant in the room is the handling fee, which is four cents and set to go up to five cents in a certain number of years.

I forget how many.

That's really what you care about.

There's also pickup and processing costs.

It it costs to send trucks around to all those locations to pick stuff up and has to go into a warehouse, it has to be processed, it has to be marketed.

Yes, you're gonna get a penny back on average across the board for that material, but those are not gonna cover those collection and processing costs, and they're certainly not going to cover the handling fee.

And so the registration fee, which as I recall is capped at like a penny and a quarter, is is really just like one piece of of a much larger.

I think you're looking at outlays of six, seven, even eight cents in some cases uh per container, in addition to the refund value.

So to be exempt from you know a penny of a seven or eight cent fee, it's like, well, thanks, but I'm still getting clobbered here.

Um and something's gonna have to happen with that expense.

And I I can tell you, I see invoices that go from wholesalers to retailers and from wholesalers to restaurants.

There are line items on those invoices in deposit states from distributors that have those costs on them.

They get passed on.

Now, whether that shows up in the beverage price or it shows up in the bread aisle or the dairy aisle or the produce aisle, I can't say because retailers set prices, not beverage distributors.

But that money doesn't vaporize.

It's it's out there, it's real, it's a cost that has to be covered.

Thank you.

We'll probably have to pick this up in my second round, but I do want to put the question on the table.

Um so I saw that in the committee's updates in the print.

Um, there were a few changes to prevent possible fraud, which focus mostly on capping the number of containers that can be redeemed per day.

And I've heard a lot, both in reviewing the research last year, but also a little bit today about UPC codes.

And I wanted to hear a bit more from New York and from Vermont on how they have navigated the challenges that arise with you unique, either unique UPC codes or specific labeling for states.

I'm often thinking about how porous our borders are, and I still can't wrap my head around how this is expected to work in the updated print, but just in the program overall.

So if you have any initial thoughts, I know I only have a minute and a half to share on this, that would be helpful.

Yeah, I'm happy to weigh in on it.

Let me lay a couple things out.

One the one of the most important things to understand the reason that it's voluntary in this bill is because it has been struck down mandating state-specific UPC codes, has been struck down in two federal courts in the Southern District of New York and in the Michigan federal district.

Um both states attempted legislation, uh passed legislation that required some kind of unique indicator on the container that it was only to be sold in that state, and those two federal courts struck that down.

That is no longer seen as a viable option from a practical perspective.

Um, you know, earlier you you heard the conversation from the um from the local brewer who talked about the impracticality of dual inventories, and and let me just put it from the perspective of a manufacturer, um, somebody who makes, you know, I don't know, Canada dry ginger.

If I'm making Canada Dry Ginger Ale and I want to make a DC coated Canada Dry Ginger Ale bottle, um, I'm gonna put a UPC code on that, it's gonna be manufactured in some facility, but then I'm the manufacturer, I don't control how that bottle gets to market.

I may have a bottler who sells it, but I may also sell it to Cisco and to a bunch of wholesalers and to a bunch of retail and resident or uh restaurant supply companies, they're all gonna use different networks.

They have warehouses in West Virginia and Maryland and Delaware.

Some of that comes into DC, some of it doesn't.

How do I know how many DC UPC coated bottles to send to each one of those distributors so that the right number ends up in DC over the course of a 12-month period?

That is absolutely impossible to execute.

And that's what you heard from the wholesaler earlier, the brewer earlier, and multiply that by four, five, six thousand SKUs that are sold in the beverage, in the beverage aisles, let alone all the beer brands and wine and liquor brands.

Um, it is a logistical nightmare beyond what I think anybody can imagine implementing.

Thank you.

Thanks.

Um, Ms.

Deal, I'm gonna come back.

I'll actually I'll pick up where Councilor Proford was on some of the fraud conversations because to me that that is a a real um issue that we are trying to wrestle with uh with this legislation.

So you would you would talk about Vermont, and so one of the things I think when you testified uh for the Vermont legislation recently, you talked about um I think 32 million containers were the the fraud in Vermont.

Yeah, that's the 15, 20% number that I referenced before.

Okay.

Is that per year or is that over a period of time?

That's per year.

Okay, all right.

That's on a base of about 240 million deposit containers sold if I remember right.

Got it, okay.

Thank you.

So one of the ways that we're trying to get at this in the legislation that you saw is to cap the number of containers at 250, and then also to give the ability for that redemption site to ask, ask for an ID, be able to see that.

I think that's stronger than what we see in other states and jurisdictions.

So I guess one, do you think that is stronger than what we've seen in other jurisdictions in terms of being able to cap daily in IDs?

And then why would why do you believe you well, I don't want to put words in your mouth.

Why do you think that might or might not work?

Okay.

So in terms of the number, um, there are several states that do have numbers, uh, caps on on the number of returns.

None is as low as 250.

Um I think you will find from many of the charitable and other type groups that typically support deposits, um, that they're going to say that's not high enough.

And of course, you have your output there by the you can supply your information and you can return, you know, more than 250 if you supply um information.

Um I think 250 is a is a pretty low number.

Um, that's not very many.

I could probably go to two refuse bins on the Capitol Mall and come up with 250 containers on a busy tourist day.

Um, but um, you know, that is gonna limit a lot what's gonna happen, but that doesn't mean that there isn't gonna be still a lot of traffic.

And remember the key thing here is when you're talking about redemption fraud the way we've defined it, you've got a numerator and a denominator of the redemption rate.

And what you're talking about limiting with the 250 is limiting the redemp the numerator.

That's limiting the number of containers that can come back into the system, which is still gonna be a lot.

Um, but you've also got the issue of the denominator shrinking because of the fact that what's reported as sold in DC is not what's coming in here.

You're gonna have an awful lot of containers that have been bought in the in the metro area that are going to come into the city um without having had the deposit generated on them in the first place.

And that's that's really the unique aspect of trying to have a DC island of deposits in in the in a sea of very dense population.

I mean, the the Connecticut, the Connecticut New York border, which is where I mean there's B-roll circulating all over the place of New York cars lined up in parking lots of Connecticut grocery stores with people in the morning at seven o'clock waiting to return their containers for an extra nickel.

Um the population density there is half what it is in the DMV.

Um the opportunity is just so big for both um both the numerator and the denominator to move in a way that's distorted.

I think you could I think you can turn yourself inside out trying to prevent fraud from both the sales and and other perspectives.

I just don't think you can overcome the very powerful incentive that uh the 10 cents a container is going to produce for various interests um legitimate and illegitimate, and where there's illegitimate interests involved, which there are in every deposit state, especially in metro areas, where there's a will, there's a way, and they will find a way to circumvent those systems.

Okay, all right, thank you.

Um Ms.

Nun, I did want to make sure I came back to you because Ms.

Shora talked about uh a different element to this.

I want to make sure we got a chance to talk about either um what you had seen in Maine and why you think that might be a useful strategy and tool here in the district.

Yeah, so if you wanted to respond to anything else, please feel free.

Thanks.

Uh thanks for this opportunity.

Um yeah, so um I went to high school in Michigan, so that's where I experienced the Michigan bottle deposit.

But having been back in the district um for now, you know, almost 30 years, I hadn't actively been um involved in the process.

Um, so while on vacation, I made a point of um we vacation in Maine every year, um, and I made a point of visiting the different um processes.

So we went to the grocery store, um Hannaford's, and they have the the clink bag drop system where you regist you register, you get uh, you know, your label, you put it on your bag, you put it in the um bins that are in the parking lot.

You don't have to interact with anyone, you just come in, drop it off, and then it appears in your account later.

Um, but I also um what I had shared with Susan was I also this trip, this trip last week, I went to the redemption center.

It's a very small um place.

Um there was only a handful of people there when I was there that morning.

Um I went in, put my bottles in the machine, walked out to the counter, got my little um receipt and redeemed it at the the um the attached liquor store.

It wasn't a huge space, it was relatively clean.

Um and then on the way back, we stopped in Massachusetts and I visited a Walmart there.

Um they have the RVMs.

Um and it was, you know, right when you walk in the door before you got to the um to the shopping cart area, it had a separate door.

You we just went in, put them in.

Um it, you know, it rejected um any um thing that wasn't supposed to be in.

I just they had a separate container for just other recycled materials next to it so that those could be handled.

Um and it was, you know, a relatively easy process.

Um and I I think uh it was kind of really eye-opening how unburdened these communities that I visited seemed by the process.

Um I didn't hear any complaints from any of the the stores, the the residents, you know, people just it was a way of life, everyone figured out a way to make it work.

Um there didn't seem to be um any concerns around fraud.

Uh, you know, I I went in, did my thing, came out.

Um so I just I I wanted to experience it firsthand because we're you know, we're kind of talking in a a bubble about DC, but I wanted to see, I wanted to visit different jurisdictions and see how it operated in real time.

So, okay, that's helpful.

I think it's important to be able to see what that customer experience uh feels like as well.

And I'm you know, my uh my wife's originally from Long Island, she tells me all the time about uh how easy it was growing up in New York and from a consumer perspective, or customer for resident, um, and especially I think we heard Councilman talk about this um, you know, for places where it's been in place for two decades.

Uh it's just not you don't even really think about it.

Uh there's a lot of people, it just it becomes part of what they do, what they do in their routine their household.

And I'll just add um what you know, we were we were there over the holiday weekend, so there's lots of beverages being consumed, and I noted that the house next to the house where we were staying, they just they didn't redeem their thing.

They just put them out in a plastic container, like a blue plastic container for anybody who wanted to redeem them, could feel free to take them.

Um, but you know, yeah.

Got it.

All right, thank you very much.

Um Counselor Crawford, any questions for second round?

Just a couple.

Um my first question is to Brie, uh, picking back up on the UPZ UPC and fraud issues.

Um if this bill were to move forward as is, I heard you already say the chairperson, um, Alan, that you would consider changing the cap on the containers.

Um you thought it was too low.

Are there any other alternatives that we could include in the bill around fraud?

Uh I guess I would I wouldn't cons I wouldn't say that I thought I would say I would just remark that the 250 is very low compared to what other jurisdictions do.

And I think that you would find pushback from canners and others who who want to sort of redeem containers as a business that that's gonna be very difficult for them to do that at that level.

Okay.

Um but um no, like I said, look, there's a there's an awful lot of smart people across the 90 million population uh in the 10 deposit states.

And like I said, with the exception of the folks in Hawaii who have the convenience of an ocean as their border, um no one has solved the problem the fraud problem.

And to to the point earlier about redemption and the simplicity of redemption and how you can go someplace and redeem a container.

One of the things that the industry and our partners in the retail side have done, I think relatively elegantly over the 50 years, 55 years of these systems, is to make these systems as seamless and easy as possible for consumers.

You don't see the ugly as a consumer, you only see the ugly when you get behind the wall at the redemption center, and you start to see what's in the bags, what's in the bins, what's in the in the cans, um, what goes on when the redemption center presents you a bag that they say has 320 cans in it and it only has 160.

Um what happens on the dock at the redemption center where somebody is switching out bags for bags that were previously redeemed, the ugly gets hidden from consumers and it gets picked up in the financial implications of the systems.

Um, those smart people have tried a lot of different things to control fraud.

Um looking at Maine, um, I manage uh the finances of a co-op in Maine.

Um, our redemption rate in southern Maine is 15 points higher than our redemption rate in northern Maine.

Northern Maine being essentially Bangor and up, southern Maine being basically Portland and the coast.

Um, that's because of New Hampshire, and it's because that's where people live on the other side of the border.

Um, there is no doubt that border fraud exists.

If you run across the southern tier of New York State, where basically not an awful lot of people, big and then being the biggest city, the redemption centers, I'm sorry, the beer wholesalers and and regional distributors along the southern tier also have well over a hundred percent redemption rates, whereas the statewide average is just under 70.

So it is a chronic problem.

There's a financial incentive to try to prevent it, but it's really hard.

It's it's a whack-a-mole situation, and um it's a very difficult challenge, and I cannot think there are no cities that have deposited.

There is no analogy to what DC is attempting to do here.

There was one city in the US, Columbia, Missouri, that had a city deposit system, and it repealed it in 2002 because it was untenable.

Um it it made no sense to maintain, and uh the the population dynamics of Columbia, Missouri are an awful lot different than that of the DMV.

So I'm just saying while I understand that the objective here and the benefits potentially of reducing litter and improving recycling rates, I think you have to look at alternatives because you're not gonna solve all those problems with a deposit.

You're still gonna have to run your skimmers, you're still gonna have to sweep your streets.

If you get rid of 10, 20, 30 percent of your litter, um KAB says beverage containers are 5.6% of all litter.

So, you know, 80%, whatever your numbers are, if you count it by volume, yeah, that's gonna be a really high number.

But you're still gonna have to incur a lot of those expenses.

This just isn't the right way to tackle the problems comprehensively.

Thank you, Bree.

Um I think my last question is more of a comment.

At the last hearing, we heard a lot from locations that would serve as redemption facilities, which are now called redemption centers, that they had concerns about effectively carrying large sums of deposit money on their balance sheets until containers are redeemed.

And so I did see that the committee revised the bill to include reconciliation within 30 days, and I just would be interested either at today's hearing or in follow-up conversations, whether this adequately addresses cash flow or if concerns still remain about that piece on reconciliation.

But thank you.

All right, thank you very much.

This has been a great panel, so thank you all very much.

Appreciate it.

All right, let me turn to our next and I think last panel.

Uh so I've got Jim Connolly, who is a board member with the AWS.

Mike Smaha, I hope I pronounced that correctly.

Uh VP of government relations with the Canned Manufacturers Institute, and Brian Vickers, a consultant with the Glass Packaging Institute.

And I think both Mr.

Smoha and Vickers are joining us on Zoom.

And Mr.

Connolly's here in person.

All right, Mr.

Conley, if you'll push the buttons, the red light comes on.

And when you I'm actually here representing my day job, which is I'm a realtor with long and foster real estate, so I want to speak from a business perspective, in addition to being a board member on the Anacostia Watershed Society.

But I, you know, real estate is an enormous uh revenue generator, economic driver for the district and for the whole country, really.

In the district, when we have a I work in residential real estate, there's also the commercial side, but with residential real estate, you know, when when homes buy, you know, transact when you have buyers and sellers, they have to pay uh transfer and recreation taxes.

And in the district, that averages about $500 million a year.

And then if you add the homeowners uh property insurance tax that they pay each year, that's about 2.2 billion just for the residential side.

So that's uh like 2.7 billion dollars just from residential real estate.

When you add that's a between 10 to 13 and a half percent of the district's uh total annual tax revenue.

If you add the commercial side, which I don't do, but that is a big driver in the district that it increases the total uh revenue tax revenue for the city to 25 to 30 percent.

So it's a significant amount of money.

And the reason I bring it up and why it's relevant to this bottle bill or the uh the you know, the well, I'm gonna call it the bottle bill, is because you know, I deal a lot with people who are looking to buy homes and to sell homes, and it's a very psychological process.

When people come into a neighborhood and they see trash on the streets, bottles and cans lying in the gutter, if it's in the rivers and streams, that creates a very negative psychological, it's almost a subconscious uh impact on them.

They might not realize that they say, I don't know why I don't like this neighborhood as much, even if it has the same kind of houses that we just left at in another neighborhood where it didn't have a lot of trash, but it's there, and that's a big driver for what makes people decide whether they want to live in that community or not.

And trash is a really a psychological toxin, it's a huge impact on uh the whole psyche of a community.

It lowers self-esteem, it brings property values down.

If you take it a step further, you probably have all heard of the broken window theory, where if you have a a building with a broken window, uh, you know, that kind of gives people so subtle psychological permission to start committing larger crimes.

And trash is a part of that.

If you see trash on the ground, people say, Oh, it's okay to throw stuff down.

They do, and then it just becomes more accepted, and then crime increases, and it's just this spiraling effect where it's tends to really decrease the quality of life in our communities.

So I think that's important for my business because that helps to drive people away from neighborhoods.

There's uh, you know, it helps decrease property values, it just brings down community self-esteem.

And our whole the whole real estate industry is trying to get people to move into neighborhoods to have you know sales where you know they can make money on the on the investment that they have, people can buy a home, start a family, etc.

So that's a very huge part of the reason why I support this bill, because it's all about creating good quality of life in our communities, and particularly for my business in real estate.

The other thing is, you know, I think it's a great opportunity.

It's worth money.

There's a bottle or a can on the street is money sitting there.

Somebody's gonna pick it up and redeem it.

Might not be you, might not be someone else, but somebody will pick it up.

So it's a incentive, it incentivizes our citizenry to engage in keeping our city clean and keeping our communities desirable and and worth you know wanting to invest in.

It also helps our rivers, and I'm speaking now from my position with Anacostia Watershed Society because every storm drain on the city street is connected to the nearest stream.

So when we have a rainstorm, it's like a broom, it pushes everything into that storm drain, it goes from a pipe through a pipe directly into the water.

So when you have all these bottles and cans floating in the water, not only does it impact the the wildlife that's there, but it's something that we see.

It definitely is something that drives people away.

I know we have had great success on the Navy Yard waterfront and the wharf, where we have all these restaurants, people love to come down and sit there.

Wouldn't it be great if uh, you know, suddenly this, you know, raft of trash comes by?

How would that impact the businesses?

Because keeping those bottles and cans out of the streams and the rivers just helps to promote business to promote quality of life.

So that's a my testimony is that I really believe this, in terms of from the business end of things on the real estate uh angle, it's vitally important because so much of what we do is subtle and psychological, but it makes enormous impact in the money and the revenues that come into the city and in the quality of life for everyone who lives in these neighborhoods.

Thank you.

Thank you very much, Mr.

Connolly.

Next, let me turn to Mike Smaha.

And Mike, I'm going to count on you to correct me if I mispronounce your last name there, please.

Mr.

Chairman, you pronounced it correctly, and uh so congratulations.

You did a great job.

Thank you.

All right.

Uh, well, good afternoon, um, chairman and members of the committee for the record.

My name is Mike Smaha.

I'm vice president of state affairs for the CAN Manufacturers Institute.

I'm also a Ward 5 resident.

CMI is the trade association representing U.S.

can manufacturers and their suppliers of can sheet.

Our members make beverage cans from recycled aluminum cans.

So I want to thank the committee's interest in this issue.

CMI supports the policy of recycling refunds for beverage containers, and I will be submitting comments on ways to improve the legislation and to address some of the concerns raised by key stakeholders.

Some of those suggestions include a phased-in approach to the increase for the deposit from five to ten cents.

Beginning at five cents eases consumers into a redemption behavior change and avoids a sudden price increase shock.

Keeping that deposit value at five cents for the first three years and then automatically increasing it to ten cents starting in year four might just make sense in terms of easing convenience and uh and addressing affordability issues, uh, beverage container labeling.

Um, instead of the phrase redeemable for value, CMI recommends using RB or redemption value.

RB is more aligned with other refund states, meaning a unique label for DC won't be required.

And Mr.

Chairman, you had mentioned or brought up uh the can lid earlier in today's hearing.

We uh we as can manufacturers really support the ability to put the deposit information on the label of the can on the side of the can and and not be required to incise the lid of the can.

And the reason is twofold.

First of all, when you look at that, the letters and the value that are incised in that lid are very tiny.

Second, um, the the act due to light weighting of the can, the lid itself is pretty thin.

So it makes it more difficult to incise that can in a deeper rate, and just makes it a little more difficult for consumers to see or read uh that information on the lid.

The requirement of uh 75% of unredeemed deposits going to DE or DOEE is too high.

CMI recommends providing all of the unredeemed deposits back to the organization, but with guardrails and requirements that those funds go back into the program for the following purposes.

For instance, covering DOEE's outstanding costs of overseeing and administering the program, consumer education about the program and how to participate, provide more consumer access to redemption options, financial incentives that encourage retailer participation, program and redemption center audits to identify and prevent program fraud and any additional activities that can increase program efficiency and address fraud, but also provide more ease and access for consumers to participate in the program.

I think would be um important ways for that the organization can invest in the program.

Regarding fraud prevention, CMI is pleased to see section 149 addressing fraud through daily limits on the number of containers that can be redeemed in one day, and additional reporting requirements for any entity redeeming more than 250 containers.

An audit schedule established by the DOEE is also essential.

But at the end of the day, it's up to the district to enforce the law.

Recycling refunds bring obvious environmental benefits and reduce litter to the district, but they're also smart domestic manufacturing policy.

Strengthening aluminum recycling is crucial for our national security and the economy.

Departments of Energy and Defense deem aluminum as a critical and strategic material for the country.

So recycling more aluminum is just the smart way to preserve these materials and reduce reliance on landfills.

So with that, I'll uh defer the rest or yield the rest of my time back to the panel, and I want to thank you guys for uh for the engagement and allowing us to speak today.

All right, fantastic.

Thank you very much.

And then next let me turn to Brian Vickers with the Glass Packaging Institute.

Hi.

Good afternoon, everyone.

Really appreciate the opportunity to put in some comments here.

Um we are still looking at some of the amendments and changes from the bill itself, and we'll have full comments submitted uh by the 23rd of July deadline.

Um GPI is the Glass Packaging Institute.

We represent the uh manufacturers of glass bottles and jars for food and beverages uh primarily, and some of our membership also includes glass recyclers.

Uh those are the folks that collect the glass from uh both MERFS and dedicated glass collection streams, put them into size uh and format and make them eligible to go back into uh a new bottle or jar as part of our manufacturing process.

Uh we have supported uh bottle bills over the years.

Uh, they provide the cleanest stream of material and glass for our manufacturers when glass is removed out of the recycling streams, particularly in single stream, it also increases the yields uh for fiber and other material collected curbside, so more of that can be recovered for their industries, which is which is helpful, obviously.

If you're looking at the district, uh a portion of DC taxpayer money goes to uh send trash it down uh primarily to Virginia, um, and some of the landfills there off 95 down Horton, close to where I live, uh, and that would reduce their cost as well as as less trash is headed out of the district to to the state of Virginia and to other jurisdictions.

Um we like the the obviously the idea that there could be potentially higher levels of quality glass uh able to be recovered from the district.

Uh, there's a strong market for it.

Um, it would be uh there's a market for Pennsylvania, there's end markets in Virginia too, uh, and glass that is clean and source separated as typically comes from container deposit programs, yields higher value on the commodity side, and there's always a demand that's never without a market, so to speak.

Taking a closer look at the legislation over the past couple of days and the beverage stewardship uh program, aligning a bit here with with Mike from CMI, uh making sure that the money goes back to the stewardship program to uh strengthen the program is is of utmost importance, and you know, with respect to the sales of the commodity value and the scrap value, it's unclear in the legislation where that money goes.

Uh, we looked uh to see if there's a way to support the distributors and the deposit initiators uh financially through the program, and then the supporting infrastructure that would be required, obviously, for the bill in terms of redemption centers and uh and other avenues for consumers to return the materials.

So, like I said, we're still going through it uh, but we obviously like the concept of recycling glass and as in a source-separated clean manner, which is found in the deposit programs and look forward to working with the council and committee moving forward.

Thank you.

All right, excellent.

Thank you, both all three of you very much.

Let me start a I'm gonna ask Mr.

Smaha, I'll ask you a question, and then uh Mr.

Vickers, it might be a very similar question to you as well.

But one of the things that we have heard is people saying, Well, the uh bottle bill is gonna increase costs, even though when we actually go compare, the costs are largely the exact same uh no matter if you're in a bottle state or not.

But from the standpoint of um aluminum suppliers, I'll start with you, Mr.

Smaha.

So, are aluminum suppliers saving money if there are more cans that are returning for recycling?

Like, is there uh does this allow for that product to come in and be recycled?

Does that end up saving money for the aluminum supplier itself?

It does, because the more UBCs or used beverage cans that are used to make can sheet here in the in the United States means that we don't have to import as much can sheet from places like Canada or other parts of the globe.

The tariffs that the current um Trump administration put on actually started back in 2018 has really been a pretty detrimental and and in and higher cost for uh for the industry.

So any ways to capture more material or remake it here in the United States versus imports will certainly benefit um uh reduce costs too at the end of the day.

Okay.

And then how does that, for you know, if I'm thinking about my uh my local DC brewer uh right there in Ward 5, you know, one of your neighbors then so how does that end up translating?

Are those savings passed on to the end purchaser of that recycled aluminum can?

That I don't know because that is contractual between the can supplier and uh and their customer.

Uh so unfortunately I can't get into any specifics around savings or costs, okay.

In theory, should it though?

I mean, if I'm redu I don't want to I don't want to just add more money to the aluminum supplier.

Uh, if we're creating something that helps the aluminum supplier be able to have uh a better supply of aluminum coming in to be recycled, shouldn't that in theory also help mean that my overall costs downstream are impacted?

Again, it depends on how the contract is uh is established, but I think any ways that you can reduce imported can sheet or the cost of importing by relying on domestically produced um will certainly help um the uh savings of the supply chain.

I mean, who knew that Trump's tariffs were actually all about just improving recycling?

So that's impressive.

Um all right, Mr.

Vickers.

Similar question for you on the glass side.

Um does so having better quality glass coming in to be recycled and reused.

Does that help save glass suppliers then money?

So that's a great question.

So obviously, as a traders association, we're not privy to, you know, due to the federal antitrust laws of you know, terms of pricing, whether it's for the sale of the bottles or the recycled material coming in.

I can tell you, does a couple things.

Um, it reduces the energy use at furnaces because the higher uh rate of recycled glass that is remelted with raw materials.

Uh they could turn the temperature down on the furnace and save energy costs that also saves uh or reduces the greenhouse gas emissions coming out of the plant itself.

So that is two major incentives for our companies to continue to try to procure as much recycled glass as possible coming in.

Um it also helps to extend the life of the furnace.

That's kind of like the engine of the glass house of the manufacturing facility.

Um and the longer that can be expended, um, the less downtime and less costs for rebuilds and reinvestment.

So those are three areas where using more recycled glass, in addition to reducing landfill and and disposal and associated transportation costs for the city uh really benefits uh the the glass container industry on the domestic side, and near currently everything here's made domestically, so um in terms of class, we have plants in Pennsylvania, plants in New Jersey, a plant in New Jersey, uh, and two in Virginia that would be able to readily take the glass coming out of any uh container deposit program within the city.

So that's kind of the on the benefit side, it's it's both environmental and it can be um obviously financial for the glass companies as well, right?

And currently, uh at least in the district, so our glass bottles uh that I put in that my blue bin and feel really proud of myself for for thinking I'm recycling it largely just gets crushed and ground down and put into a landfill.

Uh uh a good portion of them may.

I'm not exactly confident of where all of the bottles going right now and set up for recycling end up.

Um, but with uh with two landfills in Virginia where most of the trash, I believe, is going, um, and primarily to the one um uh South of Lorton and and Dumfries, I believe, uh there's a good chance that that recycled glass, which is of value, if separated and not crushed, is being lost to lamp fill.

That's a very distinct possibility.

Yeah, yeah.

Um you may not have visibility into this, but I'm just gonna ask anyway, because I'm curious.

Um so earlier we had uh someone give an example of um what are they supposed to do if someone who's enjoying a corona uh pops their lime into the bottom of the bottle.

Um does that contaminate the bottle in a way that it can no longer be recycled.

Do you do you know or have visibility into that?

I again I I gotta believe that uh people in New York probably push that lime to the bottom of the bottle as well.

Right.

So with respect to different um and I'm uncertain about the different RVM requirements, obviously, but a bottle with a lime in it, right?

That goes to a processor who is going to uh make sure it's uh you know chopped down to the right size, color sorted before it goes to the manufacturing outlet uh can absolutely be recycled.

Uh the lime itself uh when the bottle is broken down before it goes through the processing cycle uh could be uh removed and that bottle could very easily go back into a new container, um it's just uh different RVMs I believe have different requirements in terms of what should be put in them.

So depends on how it's redeemed in particular.

Okay, but I don't have an expectation that uh somebody on staff is sticking their finger in there to fish a lime out of the bottle.

Yeah, I I don't believe that happens.

Okay, got it.

All right.

I'm not advocating for somebody to have to stick their finger in the bottle either.

Um, okay.

Um Mr.

Conley was gonna come back to you.

I appreciate your testimony.

You kind of you wear a couple of hats here, so um, you've been a very active member and leader on the Anacostia River with AWS, but also kind of bringing in a little bit of the real transparency.

I don't disagree with you, and I think it's part of what we've heard advocated around um the litter uh cleanup and by assigning a value to those 26 bottles I've passed by on my four-block walk this morning to Union Station, um, I probably would see a lot less of them because they have a value now.

Um and so I think that that is intuitively what I hope most people can get.

It's a lot of double the details, obviously, of a program though.

From the from what we have to spend on the river, though, you talked about different costs from a real t real estate standpoint, but um the sheer amount you you've been on the river for a long time.

So the sheer amount of public tax dollar we have to spend on the river to be able to get those bottles and those cans and clean them out of the waterway um is immense.

What what have you seen in terms of and how do you feel about all our tax dollars going to constantly being removing those things?

Yeah, it's it's totally not necessary.

We can if we can incentivize the the prevention of the trash in the first place, it saves so much money and so much effort in the long run, and it improves our quality of life.

I know that uh earlier we were talking about the TMDL, the total maximum daily load for pollution in the Anacostia for trash, and we are in serious potential violation of that coming up, and that's millions of dollars that can be spent that could be saved from being spent in penalties from not being able to achieve those regulations.

Um, you know, I think just it is a responsibility of a city in general to keep the city streets clean with street sweeping and things like that.

But we have you know lots of people here who can join in and we can all do this together.

You know, the whole the whole saying that you know many hands make light work.

If we can incentivize it with this bottle bill, I think it's a great way to do it.

It's worked in so many other states.

I it can work here.

Yeah, okay.

Thank you.

Um, and then lastly, I look down my notes and reminded myself.

I need to uh go back to Mr.

Smaha on one thing.

Um, so I think actually for both you and Mr.

Vickers, you're gonna submit testimony with further recommendations to the committee, which I appreciate and look forward to to getting that.

I did want to note on the lid labeling, and thank you for kind of walking us through that a little bit.

The legislation doesn't require that it has to be on the lid.

Um it's hard for me to read the the tiny indent indented uh symbols on the on the lid as well, but we do want to give the you know the manufacturer the option, right?

So if that's what they choose to do, I don't want to be micromanaging this to say you you gotta have the lid or you don't have the lid, and it sounded like from some of our brewers that we heard from, some of their varieties do, some don't.

They could choose to put on the label.

Uh we have a whole process where they design labels and it has all kinds of required language on it.

So that's another uh way in which they design it.

They brought up a good point, of course.

I I don't want to be in a position where I say the stock you've already purchased and procured, you have to now toss it out.

So we do leave a fairly lengthy kind of on-ramp time to make sure that obviously they're able to go through that stock they have, they've got the transition time necessary.

So if they do choose to do a labeling change versus the lid label, you know, on the on the lid of the can empower them to make the choice as to what works best for their product.

Um I'd appreciate you walking through that.

Yeah, no, I love that.

And the fact that you uh provide that flexibility is important because of the 10 current deposit states, it's only the state of California that still requires the lid to be incised.

All the other states have moved to provide uh flexibility for where the deposit value information would be placed.

So I appreciate you guys doing that.

Okay, great, thank you.

Um, all right, that's been excellent uh suggestions, and I look forward to having both of you get your testimony in with further recommendations once you have a chance to digest the revised committee print um to be able to give us more feedback on it.

So thank you.

Um all right, that is gonna do it for all of our witnesses today.

I want to thank everybody.

Um I know this is a little different where we had a hearing, we could have just that was it and not do a second one.

I think there's immense value in having some revisions that were shared, get that feedback on it.

We are trying to get this done and get it done right.

Um so everybody's testimony was incredibly helpful in that process.

Um so thank you to all of our witnesses for testifying.

So this is going to conclude the committee's public round table on Bill 26-58, the recycling refund and litter reduction amendment act.

Want to thank our witnesses again for the conversation today.

Look forward to continuing those conversations to address lingering concerns as we finalize the legislation.

I also want to point out that our District department of Energy and Environment has been in the room all day.

Thank you very much, uh, so that they can hear the testimony as well, and sure that as we follow up when we work with the department, they are able to pull their thoughts together so that we can think through what implementation could look like.

The record for today's round table is going to close on Thursday, July 23rd, 2026.

So anybody who wants to can also submit written testimony to the council's hearing management system.

You can find that at Lims.dccouncil.gov backslash hearings until then.

The next meeting of the committee will be next Monday in room 500 for the public hearing on our legislation related to autonomous vehicles in the District of Columbia.

So there being no further business before the committee, the time is now one thirty-four p.m.

and this public round table of the Committee on Transportation and Environment is now adjourned.

Thank you, everyone.