Fiscal Note
Fiscal Services Division
SF 2378 – Beverage Container Control, Bottle Bill (LSB5962SV.3)
Staff Contact: Austin Brinks (515.725.2200) austin.brinks@legis.iowa.gov
Fiscal Note Version – Final Action
Description
Senate File 2378 adds high alcoholic content beer and canned cocktails to the definition of
“beverage” in Iowa Code section 455C.1. The Bill also defines “participating dealer” and
“mobile redemption system.” The Bill raises the handling fee associated with redeeming empty
beverage containers to three cents when paid to a redemption center or participating dealer. A
distributor who pays the one-cent handling fee for beer may claim a refund of the barrel tax paid
by the distributor of one cent for each eligible beverage container accepted. The Bill requires
the registration of universal product codes (UPCs) for each beverage container in a format
determined by the Iowa Department of Revenue (IDR), effective November 15, 2023.
The Bill allows a dealer to refuse to accept empty beverage containers if any of the following
apply:
• The dealer holds a food establishment license under Iowa Code chapter 137F to prepare or
serve food, has a certified food protection manager as required by the Food and Drug
Administration, and sells time or temperature control for food safety as defined in Iowa Code
section 137F.2.
• The dealer has entered into an agreement with a mobile redemption system and the dealer
provides adequate space, utilities, and Internet connection to operate the mobile redemption
center, and the agreement does not require additional payment to the dealer or mobile
redemption center.
• The dealer’s place of business is in a county with a population of more than 30,000 people
and is within 10 miles of a redemption center or mobile redemption system, or the place of
business is in a county with 30,000 or fewer people and within 15 miles of a redemption
center or mobile redemption system.
Section 19 of the Bill allows a dealer to refuse to accept beverage containers before January 1,
2023, if a dealer meets the requirements of entering into an agreement with a mobile
redemption center or being within range of a redemption center with the required population
sizes. This section is effective upon enactment.
A dealer who refuses to accept beverage containers must display on the front door of the place
of business a notice that says the dealer does not accept the containers, as well as provides the
location of the nearest redemption center or mobile redemption system. The Bill also requires
the Department of Natural Resources (DNR) to create an electronic method for the public to
locate redemption centers and mobile redemption systems.
The Bill creates a civil penalty of $2,000 for violations of Iowa Code chapter 455C and allows
the DNR to issue compliance orders, subject to judicial review, that carry a civil penalty not to
exceed $2,000 per day of violating the compliance order. The Bill also creates a civil penalty for
which a violation consists of a person knowingly attempting to redeem a beverage container that
is not properly marked as required by Iowa Code section 455C.5(1). The civil penalty is not to
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exceed $10 per improperly marked container redeemed, but not to exceed $5,000 per
attempted transaction.
The Bill creates a Bottle Bill Fund under the control of the DNR. This Fund consists of moneys
collected from the civil penalties established in the Bill as amended and is to be used for the
administration and enforcement of Iowa Code chapter 455C and to reimburse the Attorney
General for costs incurred for enforcing the chapter. The Bill allows any remaining amount of
refund value or handling fees possessed by a distributor after the distributor has made all
necessary payments to be the property of the distributor.
The Bill also requires the Legislative Fiscal Committee to meet in the interim preceding the 2026
regular Legislative Session. At this meeting, the Committee shall review the enforcement of
Iowa Code chapter 455C, including the collection of civil penalties, the report provided by the
Attorney General, how many redemption centers have been approved by the DNR, the
adequacy of the reimbursement amount, and any other information the committee deems
important. The Committee must submit a report to the General Assembly on its findings and
recommendations no later than July 31, 2026. The Attorney General is also required to submit
a report to the General Assembly, detailing any legal proceedings that arise under Iowa Code
chapter 455C after the civil penalties in this Bill are enacted, prior to the required meeting of the
Legislative Fiscal Committee.
Background
Currently, when a dealer or redemption center accepts a beverage container from a consumer,
the dealer or redemption center is required to pay the consumer the five-cent refund value of the
beverage containers in a timely manner. Distributors pay a one-cent handling fee to a dealer or
redemption center in addition to the refund value of the beverage container. Anyone may
establish a redemption center subject to the approval of the DNR by submitting an application to
the DNR. The DNR may approve a redemption center if the DNR finds that the redemption
center provides a convenient service to consumers for the return of empty beverage containers.
The DNR may withdraw approval if the Environmental Protection Commission finds the
redemption center to be out of compliance with the DNR’s approving order or finds that the
redemption center no longer provides a convenient service to the public. Anyone may open a
redemption center that has not been approved by the DNR, but an unapproved redemption
center does not relieve a dealer of the responsibility of redeeming any empty beverage
container if the dealer sells that kind and brand.
Under current Iowa Code section 455C.12, violating refund requirements results in a simple
misdemeanor, which carries a fine of at least $105 but not to exceed $855. The court may
order imprisonment not to exceed 30 days in lieu of a fine or in addition to a fine. In FY 2021,
there was one conviction for violation of Iowa Code chapter 455C.
Assumptions
• The DNR will require 2.5 full-time equivalent (FTE) positions to address and enforce
violations of Iowa Code chapter 455C.
• There will be an unknown increase in revenue to the Bottle Bill Fund created due to civil
penalties associated with compliance orders.
• The DNR will incur a one-time information technology (IT) expense for the development of a
database of redemption center locations.
• There may be additional costs incurred by the IDR for the creation and maintenance of a
UPC database; however, the impact is expected to be minimal.
• There will be an unknown decrease to the General Fund due to refunds distributed from the
beer barrel tax paid by distributors.
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Fiscal Impact
Table 1 shows the cost of 2.0 FTE Environmental Specialist positions required to maintain the
databases required in the Bill as amended and to address violations of Iowa Code chapter
455C. The table also includes 0.5 FTE position for an Attorney 2 position for the legal
enforcement of administrative orders and a one-time IT expense for the development of the
required database.
Revenue from the civil penalties shall be deposited into the Bottle Bill Fund. It is unknown how
many civil penalties may be incurred; therefore, the amount of revenue that will be deposited
into the Fund is unknown.
Net General Fund revenue will decrease due to refunds of beer barrel taxes paid by distributors;
however, this decrease is unknown, but likely to be significant.
Sources
Legislative Services Agency
Department of Natural Resources
Iowa Department of Revenue
/s/ Holly M. Lyons
June 24, 2022
Doc ID 1291730
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in
developing this fiscal note is available from the Fiscal Services Division of the Legislative Services
Agency upon request.
www.legis.iowa.gov
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Statutes affected:
Introduced: 123.136, 455C.2, 455C.3, 455C.5, 455C.6, 455C.12A, 455C.16
Reprinted: 123.136, 455C.2, 455C.3, 455C.5, 455C.6, 455C.12, 455C.12A, 455C.16
Enrolled: 22.7, 455C.2, 455C.3, 455C.5, 455C.6, 455C.12, 455C.16