Hawai'i's largest retailers will have to collect empty bottles and redeem the 5-cent deposit to consumers under a proposal that is closer to becoming law this year than ever before.

In previous years, retailers have successfully opposed any move to force them to operate bottle redemption centers at the stores where people buy the beverages.

State lawmakers have given preliminary approval to a plan (HB 574) that would require retailers with interior space of more than 75,000 square feet, such as Costco, to become redemption centers.

The measure is headed for a House-Senate conference committee and must be passed before the scheduled May 7 adjournment of this year's Legislature before it can be sent to Gov. Linda Lingle for her consideration.

State Sen. Mike Gabbard, who serves as chairman of the Senate Energy and Environment Committee, said it's too early to say if the measure will succeed, but he's hopeful that it will.

"It's pretty clear to me that the people of Hawai'i are asking us to do more to protect our environment through recycling and other efforts," Gabbard said. "Ultimately, it's about making recycling even more convenient for consumers."

Gabbard said requiring big-box retailers to have redemption centers would help. "The biggest complaint that people have about the current deposit beverage container law is that it's humbug to have to go to a separate place to redeem bottles and cans," he said.

BURDEN TO RETAILERS

Retail Merchants of Hawaii opposes the plan. President Carol Pregill said "given the state of our economy, this is not the time to burden retailers with additional costs."

Pregill said the current redemption rate is high and the system seems to be working without forcing retailers "to become garbage collectors" and deal with sanitation, storage and operating issues.

"This will totally decimate their business," she said.

Redemption rates have climbed from only 41 percent in the six months after the January 2005 launch of the program to more than 80 percent in the last half of 2008, said Karl Motoyama of the Department of Health's Office of Solid Waste Management.

Pregill did not have a list of which retailers would be required to accept bottles, but one of them would clearly be Costco.

The popular big-box retailer now has seven Hawai'i stores, including Iwilei, a perennial top sales location for the Washington state-based chain.

Costco CEO Jim Sinegal had not heard of the proposal until this week but didn't think much of it.

"That's kind of a dumb limit," Sinegal said, referring to the rule applying only to stores with at least 75,000 square feet of space. "We don't like to be singled out like that. That's not very fair."

"We shouldn't have to take back 100 percent of the bottles when we don't come near all of the distribution," Sinegal said.

Sierra Club Hawai'i chapter director Robert Harris supports having retailers become redemption centers.

"The single best way to ensure easy, convenient redemption for Hawai'i's consumers is to mandate that grocery stores and retailers of a certain size take back the bottles and cans that they sell, just like every other deposit-law state," he said.

PUBLIC SUPPORT

Hawai'i's bottle law has proven to be an overwhelming success for the environment, with 3 billion bottles and cans being diverted from Hawai'i's landfills, Harris said.

"Beyond waste diversion, the new recycling law reduced litter, created jobs and provided new opportunities for churches, charities and schools to fundraise," Harris said.

But the program can be improved, Harris said. "Residents have rightfully complained about the cumbersome redemption process, with infrequent redemption centers and spotty hours of operation and service," he said.

A recent Department of Health study indicated 29 percent of respondents would prefer to redeem their containers at stores or the place where the bottles were bought, Harris said.

Twenty-seven percent of respondents complained that it was "too much of a hassle" to redeem containers.

The state's largest redemption company is Reynolds Recycling, whose president, Terry Telfer, opposes the bill. He said it could ultimately threaten the survival of the more than 110 centers.

Reynolds invested "millions and millions" since the program was created, he said. The system is working and the number of jobs at his company alone has climbed from 18 four years ago to 127.

REDEMPTION ON RISE

Telfer said the only way to raise the redemption rate higher than what it is now would appear to be raising the deposit.

He said no other state in the U.S. with a 5-cent deposit has reached an 80 percent return rate. Michigan adds a 10-cent deposit to achieve 90 percent redemption, Telfer said.

Hawai'i consumers are charged a 5-cent refundable deposit on labeled beverage containers, plus a nonrefundable 1-cent fee to pay recyclers for redemption center operations.

With or without redemption at big-box retailers, the return rate in Hawai'i is on the rise.

The difficult economy — rising unemployment, downturn in tourism and overall recession — appears to have pushed up redemption rates to a record high.

Although the official numbers won't be calculated until the end of June, the approximately 80 percent redemption rate over the last six months of 2008 was the highest ever.

"It's significantly higher than the 72 percent we had" between July 2007 and June 2008, said the Department of Health's Motoyama.