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June 1, 2009

The Business Review

Court order delays changes to bottle bill

A federal judge has delayed all changes to the state’s “bottle bill” law until April 1, 2010.

The court order, issued May 29 by U.S. District Judge Thomas Griesa, is a key victory for beverage companies, distributors, convenience stores and grocery chains. All those groups had been fighting changes to the recycling law made in April in the state’s 2009-10 budget that would have put a five-cent deposit on bottled water.

“I feel wonderful that we were able to put this off until April,” said Adam E. Madkour, CEO of Saratoga Spring Water Co. “I consider it a victory to some extent. I feel as if our government should do a better job...to protect your rights.”

Saratoga Spring Water Co. is stuck with about 4 million blue bottles that were made with a New York-specific universal product code (UPC) to comply with the new law, which was supposed to take effect today.

He said he’s researching whether he can sell those bottles in other states. If not, he will inventory them and see what happens next April.

The state estimated the new law would have generated $115 million in revenue this fiscal year. That revenue is now in jeopardy, since the law now cannot take effect until next year.

The bottle bill was created in 1982 to promote recycling. Under the law, consumers pay a deposit of 5 cents per bottle on beverages such as beer and carbonated soft drinks, money that they can reclaim if they recycle the empty containers at certain stores.

In the state budget, legislators instituted deposits on bottled water, and made several other changes, including:

• requiring distributors to return 80 percent of unclaimed deposits to the state (distributors currently keep all unclaimed deposits).

• requiring bottles to have a unique, New York-specific bar code, so recyclers know which bottles qualify for the 5-cent redeemable deposits.

• increase the handling fees that distributors pay to grocery and convenience stores from 2 cents a container to 3.5 cents a container.

All those changes had been scheduled to take effect today.

On May 19, the International Bottled Water Association and Nestle Waters North America sued New York in U.S. District Court in Manhattan.

They argued that the new rules were unconstitutional because they impacted commerce in other states. They also argued that state officials did not give the industry enough time to comply.

On May 27, Griesa, the judge, issued an verbal injunction against the law.

His written order from May 29 supersedes the injunction, and prevents any part of the new bottle bill from taking effect until the start of the state’s next fiscal year.

Griesa, in his two-page order, says that delaying the law’s start date will “allow persons subject to the amendments sufficient time to comply with the law’s requirements.”

Environmentalists criticized the ruling.

“New York state can appeal the decision, and we hope for the sake of the environment that it does,” said Environmental Advocates of New York, based in Albany. “It’s not over until it’s over. But for now, there’s no bigger [or] better for New York’s bottle bill.”

A call to the office of state Attorney General Andrew Cuomo was not immediately returned.

At least three bills have been introduced in the state Legislature that would have delayed provisions of the law. Two of the three bills would eliminate the requirement for a New York-specific bar code.

So far, none has been voted on in the Senate or Assembly.


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