STAND. COM. REP. NO.914-02

Honolulu, Hawaii

, 2002

RE: S.B. No. 2266

S.D. 1

H.D. 1




Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii


Your Committee on Energy and Environmental Protection, to which was referred S.B. No. 2266, S.D. 1, entitled:


begs leave to report as follows:

The purpose of this measure is to enact a curbside recycling program.

Your Committee finds that chapter 342G-3, Hawaii Revised Statutes states that the goal to reduce the solid waste stream prior to disposal was twenty-five per cent by January 1, 1995 and fifty per cent by January 1, 2000. Presently, Hawaii's solid waste stream diversion is barely at twenty-five per cent, failing to meet stated statutory goals.

Curbside recycling can encourage some participation to help waste stream diversion; however, in most states curbside participation rarely exceeds fifty per cent and current trends show a decline in these programs and participation. Further, your Committee finds that it is not necessary for this concept to be adopted through state statute as each county already has the authority to address and implement curbside recycling as part of its integrated solid waste management plan. The city and county of Honolulu implemented such a demonstration program, which was found to be cost-prohibitive, and the county of Maui will be initiating a curbside program shortly.

Further, your Committee finds that a proven, successful way to boost recycling rates is through the establishment of a beverage container deposit and redemption program. States that have implemented such a program have beverage container recovery rates averaging eighty per cent and have seen litter decrease by sixty-nine to eighty-three per cent. Approximately 800,000,000 beverage containers - glass, plastic, and aluminum cans - are imported, consumed, and discarded in Hawaii. A large number of these containers end up in our landfills. These types of beverages are often consumed away from the home or by tourists and therefore may not be captured through a residential curbside recycling program.

Your Committee also finds that each county faces major landfill siting problems. Solid waste diversion is the only way to extend the life of existing landfills as we continue to seek viable options. While it is important to stress the education component of a "reduce, reuse, and recycling" ethic, education alone cannot accomplish this goal. A beverage container deposit and redemption system provides a financial reward for promoting this kind of ethic and equally distributes the responsibility of proper waste disposal between the distributor, retailer, consumer, and government. A theoretical article by British economist, Ian M. Dobbs, addresses an analysis on fees for the combination of litter reduction and waste management objectives as described in "bottle laws". He states that the private use of waste-generating products imposes two types of costs on society; litter-related costs, and the costs of proper waste management. When private activity imposes costs on other members of society, economists often recommend imposition of a tax to reflect those costs and provide an incentive to reduce the costly behavior. Dobbs argues that no single tax can simultaneously provide the correct incentive for reduction of both litter and waste management costs. Instead, he shows that the theoretically ideal solution is a combination of a disposal tax on products when they are sold, and a subsidy or refund when they are returned for proper disposal. The tax should be equal to the social cost imposed by littering, while the subsidy should be the difference between the cost of littering and the cost of proper disposal of the item. Dobb's combination of disposal tax and subsidy closely resembles a "bottle law's" combination of deposits and refunds.

Your Committee finds that this "theory" has been applied and proven to work in ten other States and one municipality to improve recovery and recycling rates and reduce litter at a reasonable cost. Therefore, your Committee has amended the bill by:

(1) Removing the contents of the bill;

(2) Inserting a framework to implement a beverage container deposit and redemption system statewide.

Specifically, the bill imposes a two cent deposit beverage container fee to be paid by the beverage container importer, and a five cent deposit beverage container refund fee for each glass, plastic, and aluminum beverage containers containing sixty-four ounces or less, except those sold for on-premises consumption. The fees are to be deposited into the beverage container deposit special fund. The fund shall be used to reimburse refund values and pay handling fees to redemption centers, and may also be used to:

(1) Fund administrative, audit, and compliance activities associated with collection and payment of the deposits and handling fees of the deposit beverage container fee and deposit program;

(2) Conduct recycling education and demonstration projects;

(3) Promote recyclable market development activities;

(4) Support the handling and transportation of the deposit beverage containers to end-markets;

(5) Hire personnel to oversee the implementation of the deposit beverage container fee and deposit program, including permitting and enforcement activities; and

(6) Fund associated office expenses.

The bill also provides for the redemption of empty beverage containers and establishes the requirements for recycling facilities and redemption centers.

As affirmed by the record of votes of the members of your Committee on Energy and Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2266, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2266, S.D. 1, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Energy and Environmental Protection,