SVI-32P
TRANSCRIPT
Public Meeting
of the Resource Conservation Committee
on Solid Haste Product Charge Issue
November 21, 1977, Portland, Oregon
This meeting was sponsored by the Resource Conservation Committee,
the Interagency Committee established under the Resource Conservation
and Recovery Act of 1976, and these proceedings (SW-32p) are reproduced
entirely as transcribed by the official reporter, with handwritten
corrections by the Office of Solid Waste.
RFFfl>r
U.S. Environmental Protection Agency
1978
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An environmental protection publication [SW-32p) in the solid waste management series.
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1 RESOURCE CONSERVATION COMMITTEE HEARINGS ON
2 THE SOLID WASTE PRODUCT CHARGE ISSUE
3
4
5
6
7
8
9 TRANSCRIPT OF PROCEEDINGS
10
11 BE IT REMEMBERED that the following proceedings were
12 taken before Frank R. Resales, a Notary Public for Oregon on
13 Monday, the 21st day of November, 1977, in the Bonneville Power
14 Administration Building, Portland, Oregon, beginning at the
15 hour of 9:00 a.m.
16
17 APPEARANCES
18 Mr. Edward Coate
19 Mr. Frank Smith
20 Mr. John Robinson
21 Ms. Sara Gordon
22 Mr. Seymour Fiekowsky
23 Mr. Harry Butler
24
25
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APPEARANCES
BOB PACKWOOD—U.S.Senator for Oregon
ROBERT KEESEE—Georgia-Pacific Corp.
RAY W. MCDUFFEE--Lincoln County Solid Waste Commission
KEVIN MULLIGAN—Portland Recycling Team
ROBERT N. WITTER—Weyerhaeuser Co.
PAUL NORR—Metropolitan Service District of Portland, Oregon
VERN WHEELWRIGHT—R.V. Wheelwright Co.
JUDY ROUPF—Oregon Recyclers
JEREMY BROTT—Santa Rosa Recycling Center
THOMAS C. DONACA—Associated Oregon Industries, Inc.
ROBERT SWANSON—Sierra Club
FRED A. STICKEL—Oregon Newspaper Publishers Association
VALERIE LEE—Dept. of Environmental Quality
JOSEPH RIPPEE—Potlatch Corp.
CAROL TODD—Univ. of Oregon Survival Center
STEVE HOKE—Univ. of Oregon Survival Center
BRIAN WILSON— Univ. of Oregon Survival Center
SAM BOWMAN--Glass Packaging Institute
THOMAS ETHAN —Northwest Food Processors
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1 MR. BUTLER: I would like to introduce Mr. Ed Coate,
2 Deputy Environmental Protection Agency Region 10, who is serving
3 as the chairman of this public meeting.
4 MR. COATE: Thank you. Harry. Good morning ladies anc
5 gentlemen. Senator Packwood, it's a pleasure to have you here.
6 I'd like to welcome you formally on behalf of Barbara Blum,
7 assistant administrator of the Environmental Protection Agency
> ^
8 who also serves as chairman, senior advisory group of the Resource
9 Conservation Committee.
10 As we said in our invitation, the purpose of this meeting
11 is to find out as much as we can about your thoughts on this
12 issue. We are here to listen. We are here to listen as careful
13 as we can to your suggestions and ideas. I'd like to reiterate
14 that you will be given full consideration on both your oral and
15 written comments that you submit. Please remember that the
16 Resource Conservation Committee is an interagency committee esta'b-
17 liahed by Congress for a two-year period. The purpose is to sti dy
18 a wide variety of public policy regarding research policy and
19 to make recommendations to Congress and the President.
20 This meeting here in Portland is the fourth in a series of
21 public meetings regarding various conservation issues. We plan
22 to hold additional meetings throughout next year regarding various
23 public policy issues on resource conservation. I think it is
24 very appropriate that we are here in Oregon. As we all know, w<
25 may-- started here and we hope this morning we will hear some
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1 good ideas that will lead us well on our way.
2 At this time, I'd like* to introduce the members of the panejl
3 here before you. On my far left is Frank Smith, Staff Director
4 of the Resource Conservation Committee. On my immediate left
5 is John Robinson, Executive Director of Resource Conservation
6 Committee. On my immediate right is Mr. Seymour Fiekowsky,
1 Assistant Director of the Office of Tax Analysis, Treasury Deparjt-
8 ment, and on my far right is Sara Gordon. With that, I welcome
9 you and turn It back to Harry.
10 MR. BUTLER: Just: a few more administrative remarks.
11 It is very important to us that every person here who desires
12 to speak is given an opportunity to speak, so we would ask that
13 each of the speakers try to highlight their remarks. Their full
14 statement will become part of the record and will be read by the
15 committee. If it's possible, please hold your remarks to approxi-
16 mately five minutes. After your remarks, the panel will ask any
17 questions if they have questions of you, and after all scheduled
18 speakers have spoken, we will also give an opportunity to anyone
19 who wishes to come to the ;x>dium to make a statement. If you axe
20 not on the agenda and wish to speak, would you please check with
21 the registration desk in tae back of the auditorium and they will
22 get the word to me and we will get you onto the agenda. Please
23 when you speak, both those of you speaking from the podium and
24 also those of you on the panel, please give your name and your
25 organization every time you speak and this helps everyone in the
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1 audience and also helps us to have a correct record of what is
2 said.
3 It gives me a great deal of pleasure to introduce our first
4 speaker. I first would like to beg the indulgence of the Georgla-
5 Pacific and ask that this speaker be allowed the opportunity to
6 speak first.
7 Our first speaker is Senator Bob Packvood from the state of
8 Oregon.
9 MR. PACKWOOD: Thank you, Mr. Butler. Let me thank thje
10 panel for taking the tine to come to Oregon. We are very proud
11 of our bottled beer heritage and are flattered you would hold
12 one of the public hearings in this state.
13 This Committee will make a recommendation to President
14 Carter on the Bottle Bill by November 30. There are two funda-
15 mental points that ought to be considered when you make this
16 recommendation. First, the Impacts of a national Bottle Bill
17 have been studied numerous times and the results are always the
18 same, POSITIVE. This single bill would save 60 to 80 thousand
19 barrels of oil per day, produce a net, and I underscore net,
20 Increase in jobs of 80 to 117 thousand, save millions of tons of
21 aluminum, steel and glass annually, reduce soft drink and beer
22 prices from $1.8 to $2.6 billion annually, cut back billions of
23 pounds of air, water and industrial solid wast pollution annuall)y,
24 and finally, stop the trashing of America's roadsides with over
25 3.5 billion cans of bottles every year.
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1 Those are impressive figures, and they are not mine or any
2 interest group's that has been working in favor of the national
3 Bottle Bill. Those are the figures generated by three federal
4 studies to date, the Federal Energy Administration, re Environ-
5 mental Protection Agency and the Department of Commerce. Since
6 you are in Oregon, the first state to adopt a Bottle Bill, you
1 will have a chance to determine what the actual impact has been
8 here. In Oregon, the results are the same, savings in every
9 category. And Oregonians Icve it. In fact, a survey of Oregon-
1° ians within the last two yeers showed that 90 percent of Oregon-
11 ians like the Bottle Bill. They are proud about the fact that
12 they are helping to save energy, stop litter and the needless
13 throwing away of precious materals.
14 But if you don't find that these three federal studies are
15 convincing enough, I have fcir you this morning one more study.
16 For the past year and one-half, the GeriS^al Accounting Office
17 has been studying the impacts of a national Bottle Bill. We ar<
18 all familiar with the GAO in this rood. It is the office withii
19 the Federal government that works independently of the Congress
20 and the Administration to audit government programs and propose<
21 legislation. Its reputation is high, its independence is unqu*s
22 tioned, its study results are sound. And this morning, I am
23 releasing the conclusions of the GAO study which reaffirms the
24 benefits of a national Bottle Bill. Let me take a moment to
25 describe how this study too's place.
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1 The General Accounting Office produced a draft paper some
2 months ago and circulated that among industry and environmental
3 groups. Presumably that proposed study has been seen by every
4 major opponent to this legislation. That is a highly unusual
5 practice. But, I believe the GAO did it to insure that the stud^y
6 could not be discredited because the industry was not fully
7 consulted.
8 The GAO report says that the energy savings, once we have
9 a national Bottle Bill In effect, will be roughly 60 to 80
10 thousand barrels of oil per day, that there will be a net increase
11 in jobs in the ranges already cited, that beverage container
12 litter will be reduced by 70 percent and that substantial natioijal
13 savings of materials will occur. Although you may be aware of
14 some of the results of the GAO study, I thought it important to
15 announce it today so that the public is again reminded that the
16 Bottle Bill concept is sound.
17 Now let me turn to the other point which I want to address
18 this morning, the Bottle Bill opposition. Ever since Oregon
19 passed its bill, the major brewing and soft drink bottlers, and
20 the can and bottle manufacturers have joined together in one of
21 the largest, most well financed campaigns to kill similar bottle
22 bills. The amount of money that has been spent, and the kinds
23 of tactics that have been used are staggering. And yet, despitf
24 the tens of millions of dollars and the erroneous information
25 and advertising that have been used sometimes, the Nation adoptejd
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1 two new bottle bill measures last fall: one in Michigan and in
2 Maine.
3 There are two conclusions that ought to be reached about
the merits of t'.ie Bottle Bill baaed on the unsuccessful efforts
of the opposition. First, according to the public campaign sperjd-
ing figures reported in Michigan and Maine, the Bottle Bill
opponents outspent the citizens groups by 10-15 times. For
every dollar that was spent in support of these unsuccessful
measures, up to IS times that was spent co thwart it, and money
10 didn't talk. Apart from these state referendum measures, the
11 ongoing campaign has been estimated by Joe doors of Coors Brewing
12 Company to approach $20 million annually.
13 Let me at this point congratulate the can and bottle industry
on what appears to be a change of position. The Aluminum Company
15 of America is quoted in Beverage Industry Magazine of October 6
16 as follows:
"We have for several years been very active in opposing
18 deposits at local and national levels. Our greatest concern
19 has been those proposals that discriminate against the aluminum
20 can and prevent it from competing in the marketplace. In addition
21 to opposing such proposals with all our energy, we also have
22 worked against uniform deposit proposals.
23 "However, we have become convinced that uniform deposits
are quite different from the discriminatory deposits that we
25 still oppose. While Alcoa will not actively support uniform
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8
1 deposit regulations now, we can see a number of reasons why we
2 should not object to a uniform deposit law. As a result, we
3 have modified our position to focus on discriminatory deposit
4 proposals.
5 "Public opinion data indicate that between two-thirds and
6 three-quarters of the U.S. public now support mandatory deposit
7 on beverage containers. Evidence of this has also become evidei
8 at the ballot box. The public in Michigan and Maine was strongly
9 favorable to deposit proposals on the ballot in those states lag
10 year. The citizens of Oregon are strongly behind the state's
11 "bottle bill," the nation's oldest deposit law, even though it
12 is discriminatory.
13 "The public favors deposits as a means of litter control.
14 While Alcoa feels this is at best only a partial measure and
15 does not think this is the most productive means of getting at
the litter problem, there is no question that littering of bevel
age containers does decline after deposits are imposed.
"Another prime motive offered for supporting deposits is
19 the public's growing interest in conserving materials and energj
20 Alcoa has been actively pursuing that course for some time throxgh
21 voluntary reclamation of aluminum cans. Today, about one in fovr
22 aluminum cans are being returned for recycling, thus saving maj
23 quantities of materials and energy. Where the aluminum can is
24 used widely, returns currently approach one in two. But we hav«
25 trouble seeing the national figure going beyond 50 percent throi gh
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1 voluntary recycling. Making all containers returnable through
2 uniform deposits, on the other hand, will dramatically increase
3 the percentage of returns."
4 In a registration statement with the Securities and Exchange
5 Commission, PepsiCo said, "Vhile it is not possible to predict
6 whether restrictive container legislation will be adopted in otter
7 states or at the federal level, PepsiCo believes that it will be
8 able to earn an adequate return on the investment which might
9 be required by it as a result of restrictive container leglsla-
10 tlon, and does not anticipate a material adverse impact on the
11 sales or profits of its soft, drink business if such legislation
12 is adopted."
13 Thank you for your time. I hope that while you are in
14 Oregon you will have a chance to research more thoroughly just
15 how well our law works.
16 MR. BUTLER: Is there any questions from the panel?
17 MR. PACKWOOD: Thank you very much again. Thank you,
18 Mr. Butler.
19 MR. BUTLER: Our next speaker is Mr. Matthew Hoover,
20 the Director of the Georgia-Pacific Company and with him is Mr.
21 Robert Keesee, an economist in their government affairs department.
22 MR. KEESEE: Thank you. I'm Bob Keesee for Georgla-
23 Pacific Corporation. I am Senior Economist, Government Affairs,
24 for Georgia-Pacific Corporation. We appreciate this opportunity
25 to be here today to talk about a subject which we believe shoult
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10
1 be thoroughly discussed and analyzed. We believe that the solic
2 waste problem can be more adequately addressed and resource recy
3 cling increased, but the imposition of a tax is the wrong technique
4 to accomplish it. The key to the solution of the nation's solic
5 waste problems lies in charging the disposer of the waste the
6 full cost of disposal. This Is not occurring in many geographic
7 areas. As the Environmental Protection Agency states:
8 "...three-fourths of U.S. communities finance their solid
9 waste management systems out of general tax revenues (mainly
10 property taxes) rather than through user fees. This means that
11 most households, and many commercial enterprises as well, never
12 see a. specific bill or charge of any kind for this service, as
13 they do, for example, for electricity or other public utility
14 services. Many cities that do employ user fee systems to finance
15 solid waste services charge lump-sum amounts that are not relate
16 to quantities handled.
17 "Though possibly justifiable from other viewpoints, all of
18 these practices involve the undercoating of services and/or the
19 noncharging (sic) of the economic costs to the waste producers
20 In the material flow system. By making the services appear cost-
21 less to those utilizing them, noncharging has the overall effect
22 of minimizing or negating any possible economic incentive towarcs
23 reducing waste generation or encouraging local public or privat*
24 resource recovery options."
25 This Is the core of the problem. Yet, federal efforts seet
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11
1 to ignore this key point in f«vor of a tax on packaging materials.
2 Such a tax opens a myriad of new problems, some of which we will
3 touch briefly here, but which we will cover in depth for the
4 written record. They all lead to the same conclusion— that thje
5 problem must be attacked at the point of disposal, not through
6 a tax on production.
7 There seems to be an assumption that user charges, metering
8 and other techniques to internalize the cost of disposal cannot
9 be effectively implemented. Yet, such techniques are used for
10 many services delivered directly to houses. Electricity, water,
11 natural gas are all in this czitegory. In fact, metering of
12 individual electricity use in apartment buildings was one of th«
13 key elements in the proposed national energy conservation progr«m.
14 It was recognized that individuals will use more if the costs
15 are not fully and directly borne. Others who will testify todaj
16 will no doubt point out that in this area private collection
17 agencies do meter trash disposal and many of us pay monthly bil]
18 based on the number of cans or bags we use. Much of what would
19 normally end up in the trash in the form of newspapers, lawn
20 clippings and the like disappear from the solid waste stream.
21 Requiring that the users directly pay the cost of disposal
22 would also serve to reduce th« total volume most dramatically
23 in those geographic areas where the costs of the system are highest.
24 This is the exact response that is desired, but the individual
25 must first have the incentive to reduce waste.
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1 Charging the full cost can have another significant benefi-
2 cial effect. By making everyone more aware of the cost measures
3 to reduce those costs, such as alternative markets and resource
4 recovery, can be explored and expanded upon.
5 Charging a tax on producers of the fiber used in packaging
6 and other paper products is not the proper approach. Not only
7 does the end user have no direct idea of the cost, but the actual
8 distribution of the funds becomes a massive problem. The list of
9 questions that you have posed for this hearing relates almost
10 entirely to this question of how and to whom to allocate the
11 revenues. As long as there are differences in cities, collections
12 systems, availability of local fill sites, population distribu-
13 tion, markets for recycled materials, and differences in local
14 funding, it will not be possible to develop a system which will
15 be equitable to all. If a Nebraska farmer can dispose of his
16 waste in an acceptable manner on his own property, why should he
17 pay a tax because a city in Illinois does not want to charge its
18 users the full disposal cost, using tax money to perpetuate a ays
19 tern which cannot be economically justified? Why should an Oregoi
20 lan who sorts out his or her newspapers pay a tax because other
21 cities fail to provide the market incentive to do the sorting?
22 Why should citizens in areas where the full costs are being met
23 pay because other areas will not implement the same process?
24 AS I stated earlier, we will cover a number of points and
25 make an indepth economic analysis of this issue in our full
12
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13
1 statement. I would like to nake a recommendation after briefly
2 covering two other points.
3 First, the idea of a product charge has been likened to an
4 effluent charge. We do not believe this comparison is valid.
5 Taxing a paper producer Insto.ad of the disposer la the same aa
6 levying a tax on a coalminer instead of the individual who actuajlly
7 releases the pollutant.
8 Second, the concept of ct tax has been compared to a system
9 such as the Oregon Bottle Bil1. This comparison is also invallc.
10 In the case of the Bottle Bill, the disposal problem Is addressed
11 through a charge levied directly on the individual who in turn
12 receives a refund for returning the bottle and, therefore, has
13 the economic Incentive to do so. In the case of a product
14 disposal tax, the individual has no incentive to reduce his wastje
15 volume.
16 There are numerous disposal systems throughout the country.
17 They run the gamut from private systems which charge full cost
18 to the disposer to some municipal systems which pay all disposal
19 costs from general revenues. It Is time for an analysis of these
20 different systems. Let's firid out how the volume and composititn
2i of solid waste varies with the size and location of the city,
22 types of metering system, ava.ilability of land fills, and the
23 degree of.'economic resource recovery available. Much of that
24 data Is probably already available. Portland and other areas
25 in Oregon could no doubt provide a mass of information. The
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1 dissemination of such information on how best to charge the costs
2 to the disposer, how to implement metering systems, how citizens
3 have responded to such systems, would be invaluable to munici-
4 palities who are groping with the problem. Once the allocation
5 of tsrue disposal costs is effectively handled, the answers to
6 the resource recovery aspect will follow.
7 MR. BUTLER: Any questions of the panel?
8 MR. ROBINSON: You mentioned that you felt the preferi
9 approach to this problem would be to get the local government tc
10 adopt user charge system in their accounting of the solid waste
11 disposal cost. Would you see this as an appropriate role for
12 the Federal government to acquire of local governments?
13 MR. KEESEE: I think at this point with the munici-
14 palities or at least some municipalities groping for an answer
15 to this problem, I would suspect that initially what they need
16 is information on how others are handling this problem, how
17 different types of metering systems are implemented, types of
18 problems small cities have compared to large cities in different
19 geographic areas and the like. The accomplishment of it would
20 be a great step forward to that. What happens after that, I
21 think, would be a secondary step, but the initial problem is
22 designed or has to be to grope somehow so that the disposer has
23 some idea of what these costs are.
24 MR. COATE: Any further questions? If not, then thanl
25 you very much.
ed
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| 15
1 MR. BUTLER: Our nisxt speaker this doming is Mr.
2 Inohue (phonetic) from Prove, Utah. Is Mr. Inohue in the audi-
3 enee?
4 This puts us a little b:Lt ahead of our schedule, so I would
5 call the next speaker and if the next speaker Isn't here, there
6 are some people who have askisd to be added and I know they are
1 here, so we might pick them up next.
8 The next speaker is Mr. George Wagner, the mill manager of
9 the American Can Company in llalsey, Oregon. Mr. George Wagner.
10 I guess he is not with tis also.
11 Then if I could, I would call Mr. Ray W. McDuffee of the
12 Lincoln County Solid Waste Commission.
13 MR. McDUFFEE: I did not expect to be on the rostrum
14 so early in the day. I thought I might have a chance to listen
15 to a number of other opinionii. I'm going to talk to a very limited
16 item here, an item which I referred to Senator Puckwood and an
17 item of which I have discussttd with Les AuCoin on two occasions.
18 I'm going to discuss without going back into the initial part of
19 my little written preparation here and I might say it's all in
20 my own handwriting. For a long time, I've been without a secre-
21 tary and I find that I write best when I write by hand. That's
22 the old-fashioned concept, I suppose, but when you are my age,
23 why, you go right on with thts things you've done all your life.
24 I'm going to talk about glasnes and ideal central packaging mat^r-
25 lal.
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16
1 Solid Waste Product Charge
2 1 A product's disposal cost has several interlocked aspects.
3 A. The cost, weight, fragility, reusability, recyclabilithr.
4 handling problems in shipment, handling problems in stores.
5 1. The cost of the basic material can be high as in
6 aluminum and "tins" because of the energy cost to begin
7 with and the fact that products of these materials are
8 not reusable, only recyclable. Because these metal
9 materials are not reusable they are much more likely
10 to be discarded, be very difficult to recycle.
11 2. Metal materials will require "touchy" rework (tide,
12 tools, mess, costs, wrapping problems, how credit return
13 (low value).
14 3. Metal materials will create problems of handling
15 and storage and "clearage (sic) from the front" in
16 stores.
17 4. Because metals are destroyed as forms in use they
18 present accumulation problems, especially in smaller
19 stores and communities, because not enough will be
20 available for economic handling and reshipping. For
21 this destruction reason the forms present charge asses
22 ament and refund problems. If an end is missing from
23 a can, a piece of an aluminum tray is missing, and so
24 on and on— how assess?
25 5. Plastics constitute even greater problems in hand-
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1 ling due to contamination, assessment of damage, limited
2 use; high petro-chemical cost.
3 6. Paper containers tend to be difficult to recycle.
4 They are not largely reusable to recycle. They are
5 not largely reusable. They tend to be mixtures of
6 metal and paper, their usefulness is destroyed by uae
7 one time; the value is so low that no charge can be
8 made or refunded.
9 7. Glass containers seem to present the broadest of
10 usages, the best reusability, the best recyclability.
11 2 Glass as an ideal "central" packaging material.
12 A. I use "central" here in the sense that it is the con-
13 tainers but not the total package.
14 B. We are now going into a changeover to the metric systejm
15 of weights and measures.
16 C. I believe that nationally, legislation to establish a
17 reasonably full series of containers, i.i terms of capacities
18 and shapes, based on the metric system can be accomplished
19 with the least disruption and, if carefully presented, as a
20 considerable part of the national energy saving program,
21 the most acceptable to a considerable majority of our peoplje.
22 Oh yes, we all know the uteel, aluminum, petro-chemical,
23 etc. forces will raise &..1 the hell they can.
24 D. These containers art! reusable and recylable. A suffi-
25 cient charge can be placed on each container to assure
17
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1 return of the great majority. Reusable-- they come clean
2 for glass is readily cleaned. A series of "universal" clo-
3 auras is needed.
4 E. The use of glass for all fruits and vegetables canned
5 or frozen; for trays for stored frozen meals, for stored
6 frozen fruits and vegetables; for fats and oils, and so on
7 is simple and easy. In all of these cases I believe it
8 fairly simple to design suitable delivery containers which
9 can be reused as storage for reusable containers and for
10 their return shipment and full again back again. As the
11 deliveries are made to the stores the returns take the placje
12 of the deliveries and go back to center.
13 F. For stores, of all kinds, glass will add some small
14 amount to their costs. As such matters now stand here in
15 Oregon our "bottle bill" points to low costs. With a
16 regular heavy flow of glass returnables, the flow can be
17 organized, cost lowered, return expedited. The store owrvei s
18 i have spoken to now take the bottle return as a matter of
19 course. Like all sensible managers, store managers must
20 keep track of costs and add handling charges to their salei
21 prices. Free enterprise, isn't it?
22 3 The use of glass would reduce the negative impacts that otl^er
23 types of materials have on the environment.
24 4 The use of glass due to returnables and recycling, would
25 significantly lower the energy costs to the nation; in terms of
18
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1 metals our dependence upon our own limited resources and upon
2 the large quantities of metal "ores" and of metals we now import
3 would be lessened and finite resources of both energy and metals
4 would be extended in time. The future? Look at tin— thirty
5 cents a pound when I was a kid— now $6.50 a pound.
6 5 All of us are aware that fortunes will be shaken and Jobs
7 lost or changed. This means proceed with caution, reduce the
8 impact by extension; but establish, and, time scale the changeovjer.
9 Then, see the schedule is met to the maximum reasonable extent.
10 6 The only added charges that should be permitted should be
11 those needed to amortize the cost, over a considerable period
12 of years and then done away with, of factory (cannery, brewery,
13 etc.) reworking and remachining; package rehandling design and
14 supply, etc. These costs the managers of the. making and handling
15 institutions must establish; the least government bureaucracy
16 would result if the businesses were let alone; to levy charges
17 is to set up a vast and expensive machine, be it by the nation,
18 by the states, or by localities.
19 7 I believe that the time of the standard series of resuable
20 glass containers can now be made to come to the great benefit
21 of all of us and it can fly on the energy problem and the metric
22 system— what wings I
23 Without further ado, I thank you all.
24 MR. COATE: Thank you. Mr. McDuffee. Could I ask you
25 to wait one minute.
19
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20
1 To start off with, as I understand your proposal, you would
2 expand the Bottle Bill to cover all containers.
3 MR. MeDUFFEE: I would. Not only that, I would also
4 say that many other containers that we have now should be redes ijgnee
5 into the uniform glass container business.
6 MR. COATE: Secondly, you would have the fee collectec
7 at the wholesaler at that point. My question, then, is how would
8 you see the distribution of the funds collected? Suppose they
9 go to the local sanitation commission or what?
10 MR. McDUFFEE: I have advocated to you that the State
be the recipient and the controller of the deposit monies. The
12 wholesaler will return to the State all of those deposits which
13 he himself cannot account for in his returnable billings.
14 MR. COATE: Would that money stay with the State or
15 go back to the landfill areas?
16 MR. McDUFFEE: It would be up to the State then to
17 allocate the usage of this fund based upon the State's own ne«di
18 for such funds. Now, this, you see, puts back into local centre
19 the items essential to promote the proper disposal of such thinj
20 within the state itself rather than trying to make this a part
21 of a great federal bureaucracy which would be a hell of a Job.
22 MR. COATE: On that last point, would you see state
23 legislation going forward or federal legislation?
24 MR. McDUFFEE: I believe that we should, in terns of
25 the containers, establish a federal series of standard containers
1
8
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21
1 and this not only means star.dard in the terms of size, but also
2 in terms of strength so they can be returned. We have many
3 different kinds and grades of glass containers and some can be
4 pretty feeble and not returnable. All of this must be in a federal
5 bill.
6 MR. COATE: Thank you. Are there any other questions
7 of the panel? If not, thank you very much, Mr. McDuffee.
8 MR. McDUFFEE: You are welcome. Thank you gentlemen.
9 MR. BUTLER: Before I call the next speaker, two minoi
10 administrative points. If you have not already done so, if you
11 did not leave a copy of your statement at the registration desk,
12 those of you making statements today, please leave it with the
13 registration desk or with Susan Mann at the head of the auditorium.
14 Secondly, if you have any name changes, if you are on the
15 agenda or someone else from your organization is listed on the
16 agenda and you will be speaking, would you also please tell the
17 registration desk so that with the introductions that name is
18 clear.
19 Our next speaker this morning is Mr. Jerry Mulligan from
20 the Portland Recycling Team.
21 MR. MULLIGAN: Good morning. I'm Kevin Mulligan with
22 the Portland Recycling Team. We've been In the recycling opera-
23 tion in Portland since 1970. We are the oldest and largest
24 recycling team. Currently, we have 25 full-time and 60 part-
25 time employees and this year, we will recyle approximately 9,00(
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1 tons of recyclable materials. I would like to address some of
2 the specific points brought up in the memorandum of October 20th
3 1977.
4 Concerning the first question, 1. We strongly recommend
5 that some form of Solid Waste Product Charge Legislation and
6 taxation be implemented, implemented as soon as administratively
7 feasible, and implemented at the Federal level.
8 The structure and nature of the manufacturing and packing
9 industry in the United States is nationally based, politically
10 powerful, and parochial in interest, through its distribution
11 systems, lobbying efforts by the Bottling and Brewing industries
12 to stop Beverage Container Legislation at the state level to
13 realize that this charge must come from the Federal level to be
14 workable and effective. Even in states that have successfully
15 passed Beverage Container Legislation there is considerable dif-
16 ferences in the law from state to state. This proposed legis-
17 lation has the capabilities to set major policy direction for
18 our solid waste problems in the upcoming decades and should,
19 therefore, be uniform throughout the United States and regulate<
20 and enforced at the Federal level.
21 However, we feel that the promotion and educational aspecti
22 of this legislation will ultimately determine the success or
23 failure of the program, and should be carried out by the local
24 and state governments. Schools will have to play a major role
25 in the education of the public about this law through student
22
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1 and adult education programs.
2 We also feel that the Resource Conservation and Recovery
3 Committee must give full attention and funding to the promotion
4 of this program through advertising, public service announcements
5 special training workshops and the like. Recyclers have found
6 that where Beverage Container Legislation has been introduced
7 there has been an increase in recycling activities because of
8 what we like to call the "piggyback effect". As people develop
9 the habit of returning cans and bottles for refunds, they begin
10 to develop an awareness of our other material and energy scarcity
H problems and consider lifestyle changes that will reduce this
12 wastefulness. Recycling has been the natural benefactor of thia
13 awareness. We feel that this same awareness will be a factor
14 in the success of Product Ch.irge Legislation.
15 Finally as part of the educational aspects of this Legisla-
16 tion we would like to see the price of a particular carton or
17 package included in the label. This would give consumers the
18 knowledge to become wise shoppers both economically and environ-
19 mentally. The first step in relieving our excessive packaging
20 and solid waste disposal problem is to let the American people
21 know exactly how much they are paying for this packaging and
22 disposal costs.
23 2. We feel that while l:here might be alternatives to Product
2* Charge Legislation these alternativeswould not be as successful,
25 nor would their impact be as dramatic as the proposed Product
23
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24
1 Charge approach. Therefore, we advise that the Resource Conser-
2 vation Committee recommend the legislation and implementation of
3 the Product Charge concept. We think that it is best to start
4 with a program that has the greatest potential for success with
5 positive impacts on pollution, energy, and material consumption.
6 3. The Portland Recycling Team coexists with a strong
7 Beverage Container Law and we find that it is not only a workablje
8 collection system to divert containers from the solid waste strt
9 but is also a strong solid waste awareness incentive. A well-
10 designed Beverage Container Law should encourage not Just recy-
11 cling but also the reuse of these containers. We feel that
12 unless the Product Charge Legislation is designed to provide
13 for recycling collection systems, and the reuse of products
14 before recycling, Beverage Container Laws and Product Charge
15 Legislation can, and must, coexist.
16 In fact, we feel that Product Charge Legislation and Beverage
17 Container Legislation are not only compatible, but would reinfoic
18 each other much the way that Container Legislation and recycling
19 now reinforce one another.
20 4. While it must be recognized that Product Charge Legislal-
21 tion is a form of "regressive" taxation, it must also be recognized
22 that all taxation plans intended for the American business and
23 manufacturing community will, ultimately, end up being paid out
24 of the pockets of the average American consumer and worker. To
25 ease some of this burden we urge the Resource Conservation Com-
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25
1 mittee to recommend to Congress a tax rebate for low income groups
2 affected by this legislation.
3 This form of taxation does have the one advantage of directly
relating to the consumptive habits of every consumer and sector
of the economy. The more wasteful consumers and manufacturing
sectors would suffer the greatest economic consequences.
5. The various economic consequences of resource conserva-
8 tion as it relates to Product Charge Legislation have been well
9 documented by numerous Environmental Protection Agency studies
10 and documents, therefore we Jo not feel the need to dwell on the a
11 here.
12 However, considering the question of compensation in the
13 private sector for economic Losses suffered by this legislation,
14 we feel that while this is a regrettable aspect of many acts of
15 legislation it is something that does occasionally occur, and thje
16 packaging and manufacturing Industries can, and will, learn to
17 live with it.
18 Given the lack of funding that now exists for environmental
19 problems and educational programs concerning these problems, we
20 feel that it would be a serious misdirection of priorities to
21 divert these funds from environmental concerns to the private
22 sector.
23 6. Once again, we feel that the Environmental Protection
24 Agency has provided considerable research and documentation on the
25 environmental impact which will occur as a result of Product
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26
1 Charge Legislation. However, we might add that with the passage
2 of Product Charge Legislation manufacturers would be encouraged,
3 through taxation and tax credits, and hopefully, the increased
4 discriminating tastes of the American consumer, to develop ecolc •
5 gically sound alternatives to the packaging materials now in use,
6 7. While additional research on any proposal or legislation
7 will always give us valuable input and data to consider the con-
8 sequences and alternatives, we feel that in the case of Product
9 Charge Legislation the time for action has arrived. Admittedly,
10 there are areas that are worthy of more research and consideration,
11 especially in the areas of how to effectively use and disperse
12 the collected revenues and the possible inclusion of other produjct
13 categories in the proposed Legislation.
14 We believe that revenues should go to local agencies and
15 governments to support the development of low technology, source
16 separation recycling programs. Additionally, we feel that it
17 would be a proper allocation of resources to provide research
18 grants and capitalization loans to manufacturers to allow them
19 the means and opportunities to develop recyclable alternatives
20 their present packaging systems and materials.
21 8. We feel this question has been addressed in several other
22 areas in this document. However, concerning the key elements of
23 interest to recyclers we would again like to stress our concern
24 for the inclusion of economic incentives in the Product Charge
25 structure to promote the reuse of materials. We feel that the
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27
1 taxation and tax credit system should be of such a type that
2 the reuse of materials, prior to recycling, is promoted to the
3 fullest extent.
4 Finally, we cannot stress enough the importance of alloca-
5 ting revenues to environmental problems and the development of
6 low technology recycling programs. We feel that for a successfv1
7 solid waste diversion and resource recovery program to work a
8 compatible and interrelated program of Product Charge taxation,
reuse incentives, beverage container laws and source separation
1° recycling programs must be developed and implemented.
11 9. We concur with the Environmental Protection Agency's
12 Fourth Report to Congress that an effective product materials
13 list for the Product Charge would include non-durable goods, pajer,
14 and packaging products. These products represent approximately (0
15 percent of our solid waste disposal materials, yet the impact oi
16 a product charge would not 'ae as economically severe on these
17 goods as, for instance, on durable goods. Also, recycling programs
18 and secondary materials markets already exist for most of these
19 products and the markets can easily expand to cover the increased
20 demands created by Product Charge Legislation.
21 Additionally, we would like to see the Resource Conservation
22 Committee undertake the task of prohibiting products that are
23 bi-material, such as certain food and soft goods packaging that
2* combines plastics, papers, and metals in their packaging. Theai
25 materials create tremendous source separation problems and
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28
1 therefore end up not being recycled.
2 Other problems that we can foresee with certain items and
3 materials on the Product Charge list would be those items that
4 are not effectively covered by either a charge based on tonnage
5 or unit pricing. Plastic wrapping would be the most glaring
6 example of this problem. The tonnage cost, as outlined by the
7 proposed Legislation, does not adequately cover the ecological,
8 environmental, and disposal problems that plastic wrap, and similar
9 products, presents. Nor does the proposed rigid container unit
10 pricing charge cover the particular problems created by certain
11 plastics and styrofoams. The Resource Conservation Committee
12 should look at these unique packaging materials and develop
13 specific policy that will correct these problems and loopholes.
14 10. The $26 per ton charge and $5 per thousand unit charge
15 for rigid containers seems like a reasonable and fair and equita >le
16 amount to begin the program. We should, however, not get fixed
17 to these prices if research and data shows that a higher, or
18 lower, price would be Justified to produce the wanted results.
19 The charge for certain packaging should be based on the unit so
20 as to not create undue favoritism and discrimination for lighter
21 weight materials such as plastics and aluminum, over alternative
22 packaging which might be more reusable and reclaimable, such as
23 glass.
24 11. We agree with the Environmental Protection Agency's
25 Fourth Report to Congress that the Product Charge should be levied
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1 as near as administratively possible to the raw material stage
2 of manufacturing. We recognize that this will be difficult with
3 certain products and materials, as there is no way of knowing if
4 they will eventually end up in the solid waste stream or enter
5 into the manufacturing of a durable, permanent product.
6 As a general rule of operation and policy, we feel that the
7 closer to the raw material ar.d bulk manufacturing stage a product
8 can be charged, the better. This will encourage waste resource
9 use throughout the economic and distribution systems, and will
10 create the necessary incentives to encourage the use of recyclable
11 materials and the development of secondary markets.
12 12. To encourage the use of recyclable materials the Product
13 Charge tax should definitely be reduced in relation to the amount
14 of recycled materials in the product. This would not only be
15 equitable and fair to those manufacturers and consumers who
16 develop environmentally sound products and habits, but will
17 encourage secondary materials markets, thus furthering the growti
18 and possibilities of our reclaimable resources.
19 The Product Charge tax reduction should be equal, on a per-
20 centage basis, to the amount of recycled materials in the produce
21 being taxed. For example, a product that contains 30 percent
22 recycled material should only be charged 70 percent of the current
23 taxation for similar products.
24 13. Given the magnitude and long range effects of this
25 legislation, the Product Charge program should be phased in over
29
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=30
1 time to ease the disruptive effects on the economy and secondary
2 materials markets. However, it must be recognized that too lengthy
3 of a phase in period would have the unwanted result of diluting
4 the meaning and effectiveness of the Product Charge.
5 We find the ten year, 10 percent phase in period, as commoijly
6 recommended by the Environmental Protection Agency, to be too
7 long. It should be noted that the Oregon Beverage Container Lav
8 was implemented with no phase in period whatsoever. The law wai
9 approximately one year from passage to enactment to give the
10 affected industries and distribution and collection systems
11 preparatory time to gear up for the change.
12 We feel that a more appropriate length of time for the Pro-
13 duct Charge implementation period would be five years, at 20
14 percent a year. This would give the manufacturing industry
15 sufficient time to convert to recycled materials and to allocate
16 the necessary capital and resources for the conversion, without
17 diluting the effectiveness of the program.
18 14. Though we have covered this issue previously, let us
19 reiterate our concern that the revenues from Product Charge
20 taxation be allocated for environmental education, the support
21 of secondary materials use, and development of recycling programs
22 on the local level.
23 While we foresee that certain aspects of this program can
24 best be served at the federal level, we believe that an effec-
25 tlve education and promotion program should originate, and will
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be most responsive, at the local and state level. We believe that
2 funds from this program should be distributed to local governments
3 for assistance with their solid waste disposal programs, but the
4 considerations here should be the extent and expediency with
5 which their governments act to develop source separation
6 and recycling programs.
7 In conclusion, we want to say that given the high demand fo|r
8 funding within the solid wast is management area, there should be
9 no consideration given to allocating Product Charge revenues in
10 the General Fund, or using those funds to compensate the private
11 sector for economic losses wh:Lch might be incurred as a result
12 of Product Charge Legislation.
13 MR. SMITH: I'm Frank Smith, Staff Director of the
Resource Conservation Committee.
15 I was Interested in your comment particularly on the develot-
16 ment of public education program of Doth adult and at lower leve
Most of the proponents of thiti consider one of the main areas of
18 the Product Charge approach and would theoretically work more or
19 less automatically within the market price system, so the people
20 would not have to make conscious decisions, but yet they would
21 be automatically influenced by higher prices for some things and
22 lower prices for other things, and this would be one of the main
23 virtues, and I wondered if you. could expand a little bit on what
24 aspect of the Product Charge s.pproach you think a public educa-
25 tion program should address. Just in general expand a little bi
31
Is.
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32
1 more on this aspect because It's one that hasn't come up, to my
2 knowledge.
3 MR. MULLIGAN: Well, I think educationally Just the
4 creation of the Product Charge gives us tremendous opportunities
5 for all types of solid waste awareness programs and educational
6 programs. As far as the Product Charge specifically, I would
7 think it would be regrettable to assume that just higher costs
8 will cause the American public and the American consumer to cut
9 down on their wastefulness and the excessive packaging which we
10 are now producing. I think various educational programs on
11 opportunities of buying in bulk, for instance, when you are talking
12 to the average consumer, we have grown to a period where our
13 economy is a conveniencing economy the one-atop-shop economy,
14 everything packaged in individual units. I think to reverse
15 that trend to have the wanted effects that prior charge hopefulljy
16 is seeking, we would want to re-educate the American consumer
17 to buying in bulk, buying in loose packaging, bring their own
18 packaging materials to the stores, to bulk food stores, large
19 meat handlers, produce handlers, et cetera, so that people will
20 have that opportunity to purchase their items in different quan-
21 Cities than they now have.
22 Mostly, I would like to see money from the Product Charge
23 revenues go into education to educate the public on all facets
24 of the solid waste program and specifically on low technology
25 home source separation recycling programs. We feel that those
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33
1 are the necessary programs tc effectively help our solid waste
2 management problems and that these revenues and this legislation
3 will create the funds and the awareness, put it on people's minds
4 and on the tips of their tongues to get out and start talking
5 about these issues. That is what I would like to see done with
6 the funds and the educational approach.
7 MR. ROBINSON: Mr. Keesee, this morning, from Georgia-
8 Pacific indicated he felt this particular solid waste problem,
9 the problem of excessive trash could be best addressed through
10 the use of a direct or user charge to, for example, the homeowner
11 and consumer to dispose of this trash as opposed to a product
12 charge levied at the— Would you care to comment on those two
13 alternatives?
14 MR. MULLIGAN: I would like to see a product charge
15 that taxes the manufacturer of those products to give them inceij-
16 tive to produce more environmentally sound, more recyclable
17 materials. On either approach, however, I think t address in
18 written testimony to the fact that it is a regressive tax and
19 that either one of those approaches is not going to be absorbed
20 by American manufacturers or American packaging companies. Thot
21 charges are going to be passed on to the consumer one way or th<
22 other. The further on down the line we can apply this tax, I
23 think we'll have the added benefits of creating more secondary
24 markets and more recyclable materials on down the line. In
25 either case, I think it will be passed on to the American consumer.
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1 Product Charge, I think, is a more effective program, woult
2 get to the source and would create the markets that recyclable
3 needs and the United States solid waste problems in the 70's anc
4 80's would need.
5 MR. ROBINSON: You would give it to the product recordjs-
6 MR. MULLIGAN: Yea.
7 MR. COATE: Thank you very much, Kevin, we appreciate
8 it.
9 MR. MULLIGAN: Thank you.
10 MR. BUTLER: Our next speaker this morning is Mr.
11 Robert Witter of the Weyerhaeuser Company.
12 MR. WITTER: Good morning. I'm so cold, I'm not sure
13 I can talk.
14 I am R. N. Witter, Jr., Land and Timber Resource Manager fojr
15 Weyerhaeuser Company, Tacoma, Washington. I am a professional
16 forester with over twenty years of experience in management of
17 private commercial forest land. My responsibilities include
18 timber appraisal, acquisitions, timber sales, the development
19 of forest management policy, including those related to environ'
20 mental protection, and the auditing of our compliance throughoul
21 our United States operations. I am testifying today on behalf
22 of the American Paper Institute. API represents the producers
23 of over 90 percent of all of the pulp and paper manufactured
24 in this country.
25 Your committee has already heard Mr. L.F. Laun, President
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1 of the American Paper Institute, testify in Washington as to
2 the many economic and environmental reasons why we oppose the
3 waste disposal tax concept. You have also heard Mr. J.T. Tracy
4 describe in Cincinnati the problems such a tax poses for the
5 independent recycler.
6 I am here at the request: of your committee to respond with
7 testimony on the question of how the proposed solid waste
8 product charge would affect i:he utilization of forest residuals
9 from logging and how that might impact forest management and
1° hence future timber supply. I will also point out significant
11 environmental and economic problems that could be caused by
12 the product charge and to correct a misconception that appears
13 to exist with respect to one of the stated goals of the product
14 charge, namely: "to conserve natural resources". I will limit
15 the testimony to the effects on typical Northwest forest opera-
16 tions utilizing data from my company's experience.
17 Lumber and Plywood Demand Determines the
18 Acreage and Volume of the Western Harvest
19 The total volume (biomaiis) on a typical acre of old growth
20 Douglas fir forest breaks do\m into about 65 percent stemwood
21 and 35 percent in tops, limba, foliage, stumps, roots and bark.
22 The precise breakdown will vary by stand. Recognize that the
23 35 percent in nonstemwood is left after harvest in the West und<
24 any foreseeable market conditions. For the remainder of this
25 testimony I will be referring to only the 65 percent represente*
35
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1 by the stetowood on the typical acre.
2 The stemwood is broken down into solid grade material (logs|)
3 suitable for manufacture of lumber and plywood and fiber or
4 residual waste material in varying amounts depending upon the
5 age and condition of the forest being harvested. The defective
6 portion (fiber or waste) ranges typically between 20-50 percent
7 of the stemwood. The total annual volume of the Western harvest
8 that is the total number of acres harvested, is determined by
9 the demand for logs needed to supply the lumber and plywood
10 facilities, not the need for chips by pulpmills. Whether or
11 not residuals or fiber log portion of the stemwood are used is
12 determined solely by the markets for pulp chips for domestic
13 pulpmills and the chip export market. The volume of fiber
14 material generated in the harvest of grade material has tradi-
15 tionally been surplus and of marginal value. In fact, the chip
16 requirements to the Western pulpmills and chip export market
17 are almost totally supplied by chips generated from the residua!
18 flows of the solid wood product conversion facilities, i.e., it
19 is a by-product of the converting process from those facilities,
20 Less than 10 percent of the chip supply during the last decade
21 was generated from chipping forest residuals. Therefore, the
22 utilization on any given acre in the West is a function of the
23 market for this very marginal material. Admittedly, some fores)
24 regions in the United States are different, but even their thin'
25 nings, topwood and other non-grade material from the harvest of
36
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1 those generally more thrifty non-defective stands is dependent
2 upon sufficient markets for primary fiber.
3 History of Forest Utilization in the West
4 This series of slides illustrates the significant changes
5 in wood utilization in the Pacific Northwest by Weyerhaeuser
6 during the past 30 years. There are changes in utilization
7 levels during economic cycles, but this presentation illustrates
8 trends through time. These examples come from Weyerhaeuser
9 operations in the Springfield Region in Oregon. The predominant
10 timber type in this region is Douglas fir with merchantable
11 stocking for these examples assumed to be 160 CCF/acre. (CCF
12 is symbol for cunit. A cunit is 100 cubic feet of solid wood.)
13 SLIDE ONE
14 This is representative of the large amount of wood fiber
15 that was left on the acre after harvesting In 1948. Several
16 factors were important in that time period:
17 (1) Sawmills were designed to convert the large, high
18 quality, old-growth Douglas ftr logs. These mills had lower
19 lumber recoveries and generated large amounts of slabs, end
20 trim, sawdust, etc., which were usually bogged and burned or
21 dumped. These mills could not convert small or low-quality logs
22 efficiently.
23 (2) Our pulpmill was not yet in operation and no other
24 major local or export markets for lower quality or smaller Doug!
25 fir logs, chips, or minor species material existed.
37
as
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38
1 The poor forest utilization of this time period impeded
2 regeneration, wasted fiber, was unsightly and left a significant
3 fire hazard.
4 SLIDE TWO
5 This represents how typical utilization levels had increased
6 by 1962. The linerboard mill at Springfield was in operation at
7 that time. Most of its chip requirements were obtained from solid
8 wood mill residuals and there were no financial incentives to
9 bring even more fiber off the acre. Also, domestic markets for
10 hemlock lumber and export markets for hemlock logs began to soll-
11 dlfy in the early 60's increasing the value. About 80 percent
12 of the merchantable volume on the acre was being brought in at
13 this time.
14 SLIDE THREE
15 By 1975 the financial incentives had developed because of
16 domestic markets and export chip value increases, enough to briijg
17 in 98 percent of the merchantable volume per acre. For this
18 example, that means about 157 CCF out of 160 CCF/acre available
19 were brought in.
20 SLIDE FOUR
21 This slide graphically illustrates the changes in wood
22 utilization on the example acre between 1962 and 1975. About
23 20 percent of the merchantable volume available (or 32 CCF/acre}
24 was left on the ground in 1962 versus 2 percent (or 3 CCF/acre)
25 in 1975.
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1 SLIDE FIVE
2 Here ve see what happened to the logs brought into our
3 mills during the 30-year period. Of the 160 CCF available/acre
4 in the example, only 36 CCF was recovered in marketable products
5 in 1948, mostly lumber. This is a 23 percent recovery level for
6 marketable products. Part of the waste was left on the acre,
7 part was burned in teepee burners (causing air pollution), and
8 the rest was disposed of in solid waste land fills.
9 In 1962, an average 93 CCF/acre was recovered in marketable
10 products, or a 59 percent recovery level. Logs were now being
11 used in plywood production and chips were being pulped for use l|n
12 the pulpmlll. About 50 percent of the waste was left on the
13 acre and the remainder was generated by the mills,
14 With all our log and chip markets expanded and prices (in
15 constant $) up significantly, 141 CCF/acre were recovered in
16 marketable products by 1975. This is an 88 percent recovery
17 level. About 20 percent of ttie total waste was left in the
18 woods and the remainder was generated in the milIn. The use
19 of logs for plywood and chips and sawdust for linerboard had
20 increased, and sawdust and shavings were also in demand by our
21 particleboard mill. Residual chips, shavings, and sawdust had
22 now become a very significant source of sawmill and plywood mil]
23 income. Note that most of the volume derived from the improved
24 utilization was used for fiber products.
25 NOTE: Scale on slide is cubit feet: 36 CCF - 3600 cubic ft.
39
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1 SLIDE SIX
2 This slide recaps the changes In wood recovery/acre that
3 we have just seen.
4 SLIDE SEVEN
5 This recaps the amount and origin of unutilized fiber for
6 the three example years.
7 SLIDE EIGHT
8 Here we see the value of products produced from one acre
9 for the selected years. This shows that product values per acre
10 harvested (in current $) have increased over 426 percent, these
11 financial incentives have resulted in increased utilization per
12 acre, but the value of the fiber products remains small.
13 SLIDE &I&E
14 Volume of residuals used was for fiber product markets.
15 CONCLUSIONS
16 In conclusion, markets have developed over time which have
17 enabled the use of previously wasted fiber from both the solid
18 wood products converting facilities and the acre from which the
19 wood fiber is harvested. If the value of chips or other low coajt
20 new material is artificially lowered by taxing their use, mer-
21 chantable fiber will be left on the acre (as lumber mill residuals
22 are an "automatic* input to the chips market because of their
23 lower cost) causing: waste on the acre and wasted mill residuals;
24 reduced regeneration practices which will reduce future timber
25 supply; reduced Justification for capital for regeneration and
40
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41
1 forest management; higher costs to lumber and plywood producers
2 that would have to be recovered tn higher lumber and plywood
3 prices; poor aesthetics; fire hazards for surrounding timberlanca.
As a result of the general economic downturn and severely
5 depressed pulp product market in late 1975, the volume of residvals
6 left in the forest above our corporate utilization standard
*
doubled. We were forced to relax the removal standard to a
8 piece 20" by 6" in diameter containing 50 percent sound chippabl<
9 volume. Unfortunately, chip markets in the West are still
10 depressed and our utilization is poor compared to the 1973-74
11 standard.
12 Summary - General Inpacts of Solid Waste Product Charge
13 Our analysis shows that the proposed product charge will ii
14 fact reduce demand growth for paper and paperboard packaging
15 products by forcing price increases to cover the tax. We also
16 agree that it will stimulate growth of use of post consumer
17 recycled fiber by providing a tax advantage, thereby reducing
18 further the demand for products recycled from forest and mill
residuals; that is it will cause substitution of one waste for
20 another. Although quantification is difficult, we believe this
21 could cause a reduction of nearly 4 percent in demand for wood
22 chips. You should realize that this will differentially impact
23 the more marginal situations and producers. By this I mean
24 that utilization will be more affected on a high cost operation
25 distant from the market and on acres harvested by non-integrate
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42
1 producers that do not have a downstream forest management incentive,
2 Four percent may seem small but it is in the neighborhood of five
3 to six cunits per acre on at least 125,000 acres annually clear-
cut in Western Washington and 130,000 clearcut acres in Western
5 Oregon. In total it could equal an incremental residual waste
6 of over 3.9 million tons of such material in the Douglas Fir
7 Region alone.
8 Effects of Lower Utilization
9 EPA's own exhaustive studies preparatory to implementation
1° of the water, air and solid waste laws vividly describe the
11 potential environmental effects of poor forest and mill utili-
12 zation. The effect of poor utilization is to leave an area in
13 a poorer appearing condition, it becomes a greater physical
14 impairment to big game, it represents a significant wildfire
15 risk to regeneration and adjacent timber crops, it increases
16 the cost of regeneration, it may reduce our ability to gain suf
17 ficient stocking to optimize yield from the next crop by
18 physically reducing adequate planting spaces and may further
19 reduce future timber supply by making given acres less operable
20 during the course of intermediate harvests during their
21 rotation. An essential practice to fire-proofing and providing
22 suitable site preparation for establishment of succeeding crops
23 in the West is to burn slash. If excessive volumes of slash
24 are left due to the lack of market these slash burnings can
25 become a significant air pollution problem, at least in appearar
ce.
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1 In the West, slash abatement for forest fire protection and
2 reforestation is required by 'law. If the removal of these resi-
3 duals is impaired by the market so that rather than receiving
4 a value they become an additional cost burden the added cost
5 will be borne by the public in the price of other products from
6 the forest, that,is lumber and plywood. Therefore, the product
7 charge will be inflationary on lumber and plywood prices and be
8 borne by the homeowner in the final analysis.
9 Summary. Conclusionii and Recommendations
10 I have tried to show a logic for concluding that the proposed
11 product tax will worsen forest utilization in the West and thus
12 waste forest resources rather than conserving them. It will not
13 decrease the number of acres harvested because the acres are not
14 harvested primarily for chip production. The proposed tax will
15 have an inflationary impact on lumber and plywood prices.
16 Your committee is to be commended for its sensitivity to a
17 need to understand the forest and mill residual issue. Our
18 industry sincerely appreciated your request for our opinion and
19 assistance. We realize there is far too little information
20 readily available about the overall economics of timber supply,
21 but as I believe you may appreciate from the testimony of others
22 at this hearing and from your contacts with the Forest Service
23 there is adequate information describing our industry's improve-
24 ment in utilization as marketfi for the residual material have
25 improved during the past two decades. I recommend you avail
43
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1 yourself of this information and make a thorough evaluation of
2 the impact of the proposed tax against the benefits that might
3 be realized in managing the municiple solid waste problem.
4 I realize that this has been a cursory review of the issue,
5 but I assure you that our industry stands ready to assist in the
6 development of more comprehensive data for your consideration.
7 MR. COATE: Thank you, Bob. I appreciate your coming
8 down this cool day and sharing our cool weather with us.
9 One question I have, is, are the examples shown on the scree i
10 representative of all of a typical operation throughout the Unit id
11 States in terms of waste product or only nonusable parts are
12 used for chips and for containers?
13 MR. WITTER: No, it isn't. The Northwest, or for that
14 matter, the whole Western Fir Region from the RockyMountains cleir
15 down to California and up into British Columbia is— the harves
16 is primarily of old-growth forest which contain a great deal of
17 what 1 term residual or you could call waste material. That's
18 different from the south or the northeast United States. The
19 south is already harvesting its third forest and so those forest^
20 are not very old like these are and they do not contain as much
21 rot and busted up material when the trees are felled, so, no,
22 other regions are different, but as I pointed out In my testltnon^.
23 even in the south or the northeast where you are dealing with
24 second and third-growth forests, the shift has been very dramatic
25 and it will continue to be very dramatic toward the use of resi-
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duals and the making of pulp and paper and those residuals in
those younger forests coming from the tops, the limbs, stumps an
the things that go on during the course of their rotation as
opposed to the more typical historic use ground rule, it's a
transition period and it will take years to occur, but it's on
its way because they are much more valuable for plywood than for
lumber than they are for pulp chips.
MS. GORDON: You mentioned that chipboard fell in late
1975 and remained low. Has this had any impact on the price of
MR. WITTER: I don't have the numbers with me. I guess
I really ought to say that I don't know. I would guess it would
not have had a direct impact during this particular economic
cycle because as the housing demand in the United States came
back to a very high level frcm a level that almost drove a lot
of us out of business, it wan so driven by the demand pull off
of the conversion or the supply that I don't think that the
effects of the loss of revenue from the chip market being down
was affecting the price of l\nnber and plywood. How, that isn't
always the case. Prior to this last economic cycle, the revemu
derived by particularly small mills, but all mills from the
value of chips when the chip market was high was a very important
component and all I'm trying to say is that the current price o:
lumber and plywood is driven by the demand pull off of a statis
conversion or production facility in the United States during a
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1 very high housing year.
2 MR. ROBINSON: If there was some sort of way devised
3 to account for or credit the use of by-product material such as-
4 how would you feel about the product charge concept?
5 MR. WITTER: You are almost asking me a personal question
6 because I am a forester, which i» my responsibility. I personally,
7 however, agreed with the gentleman from Georgia-Pacific from a
8 philosophical point of view, I think that source separation at
9 the user end and the price that user pays for the disposal. In
10 other words, if he or she does a good job of source separation
11 and for that is rewarded by a lower disposal cost or vice versa
12 that that is where the incentive will be.
13 MR. COATE: Thank you very much, Bob.
14 MR. BUTLER: Our next speaker is Mr. Paul Norr, a
15 Solid Waste Compliance Officer from the Metropolitan Service
16 District of Portland, Oregon.
17 MR. NORR: My name is Paul Norr. I am the Solid
18 Waste Compliance Officer of the Metropolitan Service District
19 of Portland, Oregon. Our address is 1220 S.W. Morrison, Room
20 300, phone (503) 248-5470. Prior to coming to the District, I
21 was employed as an attorney by the Public Utilities Commission ojf
22 Ohio and did work as a member of the staff of the Senate Com-
23 mittee on Labor and Public Welfare in Washington, D.C.
24 The MSD is a municipal corporation charged with managing
25 the disposal of all solid waste and liquid waste in the Portlanc
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47
metropolitan area. I am here today on behalf of the district
to ask for your help.
In short, we have too much garbage. We, as a local govern-
ment, would like the Committee to recommend to the President
and to Congress, a legislative package that will promote the
reduction, reuse, and recovery of waste materials. As a local
government, it is difficult for us to influence the amount and
types of materials that go into products and packages.
9 The district, referred to locally as MSD, was established
10 in 1970 by popular vote of the citizens of MSD under authority
11 of state law. Although our geographical area includes parts
12 of three counties, and includes 26 municipalities, we are cer-
13 tainly a local jurisdiction in comparison to the federal govern-
14 ment.
Local solid waste management has traditionally been approacled
16 from two directions: collection and disposal. Recently, efforts
have been directed toward incorporating resource recovery into
18 the management process. Collection, disposal and resource recovj-
19 ery all deal with the problen of what to do with waste once it
20 has already been generated. Thus, solid waste management now
21 only deals with the symptoms of the waste problem and does not
22 focus on the cause.
23 The cause of all our solid waste problems is that we, as a
2* collective group of people, generate materials of many shapes
25 and sizes without enough concern for what will happen to these
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materials once they have outlived their immediate usefulness.
And please do not lose sight of the fact that every piece of
3 these materials that we generate has to eventually go somewhere.
4 These wastes that we generate are really the end result
5 of an economic process. And, as you are well aware, the
economic process of production, distribution, and consumption is
increasing at a rate that is putting a serious drain on our
available energy sources, and in a manner that is negatively
impacting our environment.
10 The benefits of waste reduction, increased recycling and
11 reuse are obvious. A decrease in the amount of waste generated
12 means less need for new public landfills. Landfills are getting
13 costly to operate and new sites that are environmentally accep-
14 table are hard to find. And no one wants the new landfill in
15 their neighborhood. Further, less waste means less litter.
16 The Oregon Bottle Bill is a good example of this concept actuall
17 working. And the most important benefit of waste reduction is
18 that reuse or less use means that less energy will be used to
19 generate another round of waste.
20 The EPA manual entitled "Decision Makers Guide in Solid
21 Waste Management", published last year, on Page 118, discusses
22 four options in waste reduction: (1) product reuse; (2) reduced
23 material use in products; (3) increased product life; and (4)
24 decreased product consumption. All four of these options also
25 apply directly to packaging. We believe that product and pack-
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1 aging changes can promote all. four of these options.
2 The concept of adding a product disposal or recycling
3 charge to a product or package at the time of its sale is appro-
4 priate. Again, the Oregon Ilottle Bill shows this can work.
5 It forces the purchaser/user to pay for disposal regardless of
6 the method of disposal. (In other words, you can't avoid dis-
7 posal costs by putting it in someone else's trash can.) Also,
8 it allows a consumer to make an informed decision with regard
9 to disposal costs at the tim« of purchase by relating the costs
10 of disposal to the overall cost of the product. And perhaps mos
11 importantly, it forces a public awareness that when we consume
12 goods, we create waste, and that it does cost money to dispose
13 of or recycle that waste.
14 i would like to give you a brief example of how purchasers
15 of products often avoid disposal costs. MSB runs a scrap tire
16 program designed to control the flow of scrap tires from the
17 user to disposal. We find that the actual disposal costs are
18 absorbed primarily by either the scrap tire carrier, who goes
19 around and picks up the tiren , or by the processor, who grinds
20 the tires prior to landftiling or recycling. Neither of these
21 people have the capability to pass the cost back up the stream
22 to the person who is actually throwing the tires away. Tires
23 have a high disposal cost, and when an attempt is made to pass
24 that cost back to the disposing public, the public protests by
25 refusing to pay the high cose. Instead of getting the scrap
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1 tires into our controlled waste stream, we find the tires dumped
2 in a ravin* or along the highway in an isolated spot. It seems
3 to us that a product charge, wherein the product user pays for
4 disposal prior to use of the product, would help avoid this
5 type of public behavior.
6 There are indeed some problems with beginning any kind
7 of waste reduction activities. There are problems with
8 affecting consumer buying and waste generating habits. These
9 problems should not be minimized. The major problem for us at
10 MSD is that it is frustrating to attempt to influence public
11 waste generating habits at a local level. A number of city
12 and county solid waste management plans that we see from around
13 the country are in part based on the finding that local govern-
14 ments are not in a position to change consumer habits which creajte
15 the conditions of waste generation. We feel that a national
16 effort is needed.
17 I have seen statements published that predict that new
18 packaging requirements or taxes will force an alteration of
19 some of our production and distribution systems. This may be
20 true. But, if these systems can adjust, then there is no real
21 problem. If they can't adjust, then you should seriously ques-
22 tion at what energy and environmental costs we should continue
23 to use wasteful production and distribution systems. Our
24 resources are not infinite.
25 it has been suggested that product and packaging legislatidn
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1 will perhaps conflict with resource recovery efforts. We at
2 MSB conclude that this is not: the case. On the contrary,
3 waste reduction and resource recovery are highly compatible
4 efforts and should be used hand in hand in an attempt to
5 alleviate our solid waste problems. A sound solid waste plan -
6 particularly a national plan - should involve all possibly
7 beneficial programs, including reduction, reuse and recovery.
8 Only as a last possible alternative should we be putting any
9 more resources into the landfill and covering them with dirt.
10 As to the argument that product charges would make resource
11 recovery efforts economically unattractive, we say that there is
12 simply more garbage out there than we know what to do with.
13 Product charges, if the money comes back to the local level, can
14 help pay for resource recovery.
15 That brings me to the difficult question of how to collect
16 and what to do with the product or packaging charges. It seems
17 undesirable to have a big bureaucracy established to collect and
18 redistribute these funds. More money earmarked for local dis-
19 posal programs would certainly help us, but we have some concern i
20 about how a system like this ought to be administered. We would
21 prefer to see a uniform, national program administered on a stats
22 level - much like the collection of a state sales tax. The state
23 could then, perhaps with federal guidelines, direct the money
24 toward waste reduction, reuse, recovery, and disposal efforts.
25 We also suspect this would be a much more highly visible and
51
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1 better understood program if the money generated by the product
2 or packaging charge never left the state. In other words, we
3 are asking your help in establishing a national policy and
4 philosophy that can be administered on a state level.
5 In summary, the MSB of Portland recommends a national
6 product and package charge program that will promote the reduc-
7 tion, reuse and recovery of waste materials. As a local govern-
8 ment unit, we feel we are not in a position to influence consumer
9 habits on our own, although we would like to be an active parti-
10 cipant in a national program. We do feel, however, that the
11 collection and distribution of funds should be handled at the
12 state level.
13 Thank you for the opportunity to appear today. I'll be
14 happy to try to answer any questions you may have.
15 MR. COATE: Thank you, Paul.
16 MR. FIEKOWSKY: Mr. Norr, your agency is responsible
17 for collecting and disposal of solid waste?
18 MR. NORR: Actually only responsible for disposing.
19 The local Jurisdictions are responsible for the collecting.
20 MR. FIEKOWSKY: How is your activity financed?
21 MR. NORR: Right now, we are financed on the basis of
22 user fees. In order to finance our future programs, we are
23 having to consider alternative methods of financing, perhaps
24 Issuing bonds. We find that a user fee cannot wholly subsidize
25 or wholly fund our program. Trying to implement the user fees
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1 would probably be prohibitive on the basis of the user fees that
2 were implemented this year that were— we received a large number
3 of phone calls asking questions, complaints about why another
4 government unit had to be adding more disposal cost. This is
5 on the basis of nine cents per can. I can imagine what it would
6 be if we attempted to finance our entire program on the basis
7 of user fees.
8 MR. F1EKOWSKY: Well, you find it impractical to lmpos|e
9 user fees and you then suggest that a product charge Imposed at
some materials processing stage would serve the purpose of advising
11 consumersAthe cost of this waste. Could you explain how that
12 would happen if in fact you people would still have the responsi
13 bility of disposing of the waste?
14 MR. NORR: I suppose the way that I look at it is that
not enough concern is paid ta the cost of getting the product
16 Out of the house. People certainly consider the cost of getting
phadluc*-
17 the proWteflT into their house when they go shopping, and I'm not
18 sure the people make a very conscious effort. There was a little
19 bit of discussion about this before as to just what goes into
20 the cost that they pay when they have to buy the product. But
21 my experience indicates to me that the people are not concernec
22 at all about the cost of getting their product out of the house
23 when they go to purchase the product and having the fee front-
24 ended rather than back-ended would mean that that: cost would be
25 absorbed whether the buyer is actually consciously aware of it
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1 or not, that cost Is absorbed or the money is expended when the
2 product is purchased rather than waiting till the time it comes
3 to dispose and having a person decide perhaps they are not willing
4 to pay the high cost of disposal. I suspect that is why we find
5 a lot of trash dumped along the roadside or in a vacant spot•
6 MR. FIEKOWSKY: Let me ask you another question. Wouli
7 it be feasible for your agency to establish and set user charges
8 if there were some federal legislation which increased your auth-
9 ority and willingness to do so?
10 MR. NORR: Perhaps I'm not understanding you. The
11 mechanisms are not difficult to establish.
12 MR. FIEKOWSKY: The spokesman from Georgia-Pacific and
13 yourself both have addressed the question of making the waste
14 generater aware of the cost of it. The question becomes one of
15 where is it best to establish this cost? You haven't persuaded
16 me, for example, that putting a charge on materials which would
17 make them more expensive will in fact be conceived by any consuder
18 as the cost of disposing of this anymore than a consumer is less
19 likely to control the radial tire or retread. A radial is much
20 more expensive. He's perceived it as much more expensive, but
21 this has no affect on his activity to dispose of it. So whether
22 it's possible at the local level where the activity is undertaken
23 as by your agency to practically design a set of charges to
24 accomplish it: pick-up charges, meter charges, as the spokesman
25 from Georgia-Pacific said. Now, if it's true, it's very-- your
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1 clients will not like this. One possibility, for example, is
2 that with federal legislation, it increases your ability to do
3 this by the incentive to do this. My question in, do you believje
4 it's practical?
5 MR. NORR: The way I see things operating now, I see
6 that two decisions are made by the consumer and the two decisionjs
7 are made at two different points in time. One is the decision,
8 'Should I purchase the product and bring it into my house?' The
9 second decision is, 'I have 1:0 dispose of that product. How am
10 I going to dispose of that product and avoid the cost or minimize
11 the cost?' 1 suppose the way I understand it best is, if you can
12 combine both of those to on
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1 individual consumer. In other words, the garbage man has to pay
2 the fee at the landfill so that becomes a cost of doing business
3 and he passes that back up the stream. We have the capability
4 to make that fee as large as we want only we have to be aware of
5 the fact that we are dealing with people who are trying to dispo te
6 of the trash. But there is a general attitude that it's trash
7 and people don't like to pay money to get rid of that trash because
8 there is a limit on how much of a user fee we can impose before
9 we find the trash tossed in the street rather than going to the
1° landfill. Does that help answer you?
n MR. FIEKOWSKY: Let me see if I understand. In fact,
I2 as the spokesman from Georgia-Pacific says, there is— in this
13 area except for user fees for collection and disposal ultimately
of solid waste.
15 MR. NORR: Yes. The fees are actually on the disposal
16 and they only make their way into collection as the cost to the
17 collector.
18 MR. FIEKOWSKY: Thank you.
I9 MR. ROBINSON: Just following up a little bit further
20 on the points you were just talking about. Essentially what you
are saying is if you charged the full user fees, you may run int >
22 a surreptitious disposal problem?
23 MR. NORR: I'm certain we would. We find that now in
24 our tire disposal program that the tires that don't come in don*
25 come in because people don't like to pay a quarter or 50 cents
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1 to dispose of, so they toss it alongside the road.
2 MR. ROBINSON: There is another decision point. If
3 the product charge were to bis placed back to the producer level
4 and that's on the decision that the producer makes regarding
5 the use of recyclable material or secondary material versus virg
material. Do you have any thoughts on that?
7 MR. NORR: My inclinations are that th» use of recyclable
8 materials to the extent they can be used is far superior to the
9 use of virgin material. Senator Packwood gave some testimony
10 this morning that included sane figures on the types of energy
11 savings that are available through the use of recycled materials
12 rather than the use of virgin materials to the extent that we
13 can reuse recycled materials if we keep those materials from
14 getting into the landfill which means we have less of a need
15 for more landfill space.
16 MR. ROBINSON: One final question. One of the other
17 issues that we are considering right now with this committee
18 is that of beverage container products. Would you see the predict
19 charge as a substitute for the beverage container deposit? How
20 would you see this to relate?
21 MR. NORRs I understand them to be relatively similar
22 MR. ROBINSON: You are undoubtedly quite familiar wit!
23 the beverage return deposit because Oregon was the first state
24 in the union to implement such a bill. The product charge as ii
25 relates to containers would probably be a charge on the order o:
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a half a cent a container which would not be refundable. Are
those quite different concepts?
3 MR. NORR: It makes a lot of sense to me to say that
4 the materials that generate the least amount of waste or the
materials that are most easily recyclable should bear less of a
cost than the materials that generate a great deal of waste. I
can understand that kind of relationship. It also seems to me
that perhaps going one step further back to a previous question
that it's appropriate to take into consideration the amount of
10 recycled materials or reused materials that go into making up a
11 product when determining the amount of the fee. At that point, it
12 ceases to actually become a true disposal fee and in some sense
13 becomes an award for using recycled or reusable material for
14 making a product.
15 MR. ROBINSON: Thank you very much.
16 MR. SMITH: It's been pointed out in earlier testimony
17 that a very large part of the discussion of product charges
18 relates to what to do with the proceeds or revenues that the
19 Federal government would achieve by such a charge. You suggestejd
20 that the revenues should be— you and others have suggested
21 that these revenues would most appropriately be administered
22 at the state level.
23 Now, supposing the states decided to pass the revenues back
24 to the local jurisdictions, the amounts involved would be some-
25 thing on the order depending on how much was siphoned off for
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administrative costs for higher levels and how much was used for
various subsidies, but the 'Local jurisdictions under this direct
pass back or revenue sharing approach would be gaining something
on the order between*20 to $30 to $35 per ton of waste materials
Have you given much thought as to how local jurisdictions in
Oregon, say, would react to achieving this type of revenue source?
Would this be too much revenue for you to utilize in managing
solid waste?
MR. NORR: Absolutely not.
MR. SMITH: What :Lf suddenly all this was dumped on
you? How would you respond'? What would you do with it?
MR. NORR: Seems 1:0 us that any efforts that can be
made, I'll repeat again, toward the reduction, the reuse or the
recovery of waste materials are appropriate activities. I happen
to like the idea of education that Mr. Mulligan brought up before.
I think there is an awful lot that can be accomplished through
education. We are attempting to establish a resource recovery
plant. Any additional fundii that we can get to help establish
that kind of plan would certainly be welcome. It's difficult
to say exactly how we would use the money. To some extent, I
assume that if the charges are made on one end efficiently or
effectively flow through on the other end and to some extent that
would help us in our enforcement problems of actually getting
the waste into a solid program whereas people wouldn't have to
pay as much money to get ini:o the control stream and there is a
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greater incentive for them to comply with our regulation, so to
that extent, maybe our enforcement activity would be able to
go down. I'd like to emphasize, again, it seems to us appropriate
to handle this on a state effort and we have to refer to your
Judgment on an awful lot of this. However, we feel relatively
certain that at least here in Oregon that the funds might go to
a better use if we could handle it on a joint local and state
level rather than having to have the money go to a federal goverja-
ment and then come back to us.
MR. COATE: Thank you very much.
MR. BUTLER: Just to let you know that someone from thle
building management is trying to get some heat in this room. If
they aren't successful, we'll take a break and do group calis-
thenics .
Our next speaker is Mr. Vern Wheelwright of the R.V. Wheel-
wright Company.
MR. WHEELWRIGHT: Thank you for this opportunity to
appear before you to express my views and concerns relating to
possible solid waste product charge legislation.
To put my remarks into context, I am involved in resource
recovery in many ways. As a broker in wastepaper working with
recycling companies and paper stock dealers— as a member of
the Washington County Solid Waste Advisory Committee working
with refuse haulers, county and regional government, and citizen^-
and as a concerned citizen working for improved methods of
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resource recovery.
I am here today to speak in opposition to the proposed solil
waste product charge. Becauue I feel this is a negative solutioi-
not a positive solution. I feel very strongly that this approaci
is as wrong as that of a parisnt who tries to retrain a child by
punishment alone. I believe you would agree that: social scientists
have shown conclusively that this type of negative approach to
human behavior yields unsatiufactory results, both in children
and in corporations.
A far more successful approach is the positive substitution
of new behavior patterns, stimulated by incentives and rewards.
As examples of government action in both areas I would cite the
failure of "prohibition", and the success of the "DISC" legisla-
tion and most recently the astounding growth of the insulation
industry In response to cons'umer tax credits.
Also of great concern to me is the effect such legislation
will have in the government's operations area, or If you will,
the bureaucracy. If the solid waste product charge should becone
a part of law a whole new area of government would have to be
created in order to administer the program. This would include
people to investigate and decide which products would be taxed,
people to distribute Information, people to write the rules, pecjpl
to enforce the rules, people to collect the funds, people to die•
burse the funds— on and on, and all at the taxpayers' expense.
Most menacing of all the features of this proposed legis-
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1 1ation, though, is the precedent which is established. If we
2 tax one product, why not another. If we tax the manufacturer of
3 widgets $1 because his widget is not recyclable, should we tax
4 the manufacturer of newsprint, one of our most recyclable produces,
5 75 cents because only 75 percent of newspaper is recycled?
6 Once we start the system, where does it stop?
7 We can all be sure that the people within government will
8 not stop the movement, because past history shows us that once
9 funds flow to a new body from a new tax source, the new body
10 grows, fueling on new funds and demanding more.
H Finally, I feel that this negative approach will tend to
12 be inhibitive of industry-- that new products will fall to be
13 developed simply because of the manufacturers' fears of taxation
I4 or further restrictive legislation.
15 Having asked you to take a positive approach, it's appropriate
16 that I heed my own advice and include some positive thoughts.
17 To accomplish some of the things you seek to in the proposed
18 legislation, I would suggest that the committee look at ways to
19 strengthen the recycling industry as a whole. Although this
20 industry recovered over 15 million tons of wastepaper last year,
21 the technology involved can best be described as primitive.
22 There is a crying need for development of more effective recoverjy
23 equipment and systems geared to the small collectors and recycle
24 A tax Incentive with limited life could bring out considerable
25 new technology.
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1 In some cases the government seems to work at cross purpose)
2 with the recycling industry. By encouragement or subsidizing
3 the use of virgin products. If recycling companies had an incen-
4 tive to counteract depletion allowances and other incentives
5 provided for virgin materials more goods would be recycled. If
6 recyclables or recycled products moved at competetive freight
7 rates with virgin material, more recycled goods would move. The
8 key to recycling is and will be dollars, and if manufacturers
9 can use a virgin product at a lower cost, that's what they will
10 use. If recycling is more profitable, then that is the directio^j
11 the manufacturer will go.
12 Possibly an area for consideration would be development of
13 incentives for manufacturers who develop "round trip" or recy-
14 clable products with a market provided for the return of these
15 products.
16 In closing, I would point out that the consumer-taxpayer
17 will pay for disposal regardless of where the charge is placed.
18 The proposed measure would simply raise the price of the product
19 and add another segment of j;ovemment to our already overly
20 large system.
21 Americans will respond to incentives-- but they will only
22 react to taxes and penalties. A positive approach will unques-
23 tionably yeild a more desirable result.
24 I'll be happy to answer any questions you may have.
25 MR. COATE: Thank you, sir.
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1 MS. GORDON: It was stated earlier that the solid waste
2 products charge is compatible through recycling. Do you believe
3 that this is the case?
4 MR. WHEELWRIGHT: Many of my friends here in recycling
5 are probably surprised I'm here to speak in opposition to this.
6 I feel that recycling needs help. I feel that the charge placed
on the manufacturer is a negative solution and not a positive
solution and I think that this industry needs positive solutions
9 MR. ROBINSON: You mentioned that one of the positive
*" type solutions that you might propose would be to offset some of
11 the tax advantages of virgin materials now enjoy*relative to
12 secondary materials by adding a tax incentive to the secondary
13 material processors. Why would not the elimination of those
14 previous incentives do essentially the same purpose? Would you
15 favor, for example, the elimination of the depreciation allowanc
16 for virgin materials?
17 MR. WHEELWRIGHT: To quite an extent, yes.
18 MR. ROBINSON: One possible tax advantage that was
19 brought to my attention was of the capital gains treatment of
20 lumber which some people consider to be a tax break for the lumb ir
21 industry. Would you also favor the elimination of capital gains
22 MR. WHEELWRIGHT: I'm not in any way an authority on
23
taxes. I am not totally familiar with the tax incentives availa
24 to the lumber industry. I know they are there and I really can' :
25 ' speak to them.
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1 MR. ROBINSON: Thank you.
2 MR. SMITH: Going along with your assumption that
3 recycling needs to be helped, it seems there are two possibiliti
4 for intervention to help recycle. One is to try to stimulate
5 supply which is what I think you had in mind when you were talking
6 about tax incentives for recycling such as paper stock dealers
7 or people getting material out of the waste stream. The other
8 possibility is for subsidizing or providing some type of incentive
9 for the users on the demand siide, the market to utilize secondary
10 materials and I was wondering if you would follow up a little bit
11 with your attitude toward if demands were subsidized so there was
12 demand pulled and prices wer«> elevated, demand side prices were
13 elevated, do you think there would still be need for subsidies
14 on the supply side?
15 MR. WHEELWRIGHT: My concern lies largely with the
16 materials which are not recycled simply because it is not economft
17 cal. The gentleman who spok{> previously cited an example of
18 tires. I think nearly everyone would agree that used tire car-
19 casses have a lot of potential in recycling, but nobody has
20 taken the time or effort to find how to use those tires properly
21 They certainly can be used in better ways than in landfill. There
22 are several small companies which have come up with ways to use
23 small amounts of tires, but if there was an incentive to America^
24 industry to find a way to convert tires into usable fuel, you
25 can be certain that a great deal of money would be spent if therje
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1 was a hope of recapturing that from a tax incentive.
2 MR. SMITH: I guess perhaps a better way for me to
3 phrase the question is, do you think the supply side incentive
4 alone would be enough? In other words, would it be enough simp|ly
5 to provide incentives on the supply side, recovery plants, low
6 technology systems, other ways of getting materials out of the
7 waste stream and into the secondary material market, do you thinjc
8 that would be enough in itself or do we need
9 MR. WHEELWRIGHT: I think we have to work in every
10 segment of the industry from the time the consumer product gets
11 to the consumer, training the consumer, providing ways for the
12 consumer to recycle into the dealer system and then on back to
13 the manufacturer who uses the substitute product. Have I answer sd
14 your question?
15 MR. SMITH: That's fine.
16 MR. BUTLER: Our next speakers are Us. Judy Roumpf and
17 Mr. Jerry Powell of the Oregon Recyclers.
18 MS. ROUMPF: Mr. and Ms. Chairperson and committee
19 members: I am Judy Roumpf representing the Association of Orego i
20 I Recyclers. The Association is made up of educators, citizens,
21 government officials and recycling organizations, both profit
22 and non-profit, rural and urban throughout Oregon. Oregon
23 Recyclers' purpose is to further the concepts of reduction, reuss
24 and recycling of solid waste. The Association strongly supports
25 the implementation of a solid waste product charge. We have
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1 submitted in writing a detailed review of the many facets of
2 product charge legislation; ny oral comments will address three
3 points.
4 A product charge with reductions based on amount of recyclejd
5 content In a product would have a very positive effect on recy-
6 cling industries. Recycling efforts now often suffer from lack
7 of demand for recyclable material and inadequate prices to cover
8 the costs of handling. History shows that stable markets and
9 good prices are conducive to more recycling. The proposed product
10 charge would create a strong and steady demand by manufacturers
11 for recyclable materials. With higher prices paid for recyclabljes,
12 operation of recycling centers in areas distant from markets
13 would become feasible. Recent development of recycling collec-
14 tion systems by garbage haulers and local governments are encouzl-
15 aging. Many of these systems initiated on an experimental basisj
16 could become permanent as a result of the economic stability
17 brought on by the product charge.
18 Much development of recycling is dependent on capital.
19 Capital is needed to establish and expand collection systems,
20 redemption centers and reprocessing systems. Capital is needed
21 for energy recovery pursuits and the more traditional activities]
22 of solid waste management. Ihe demands already existing for
23 funding in the solid waste management area coupled with the
24 purpose for a product charge (i.e., to cover the cost of ultimate
25 disposal) make it imperative that the revenues generated by sue*
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1 a charge be earmarked for solid waste activities. Several opticns
2 for revenue dispersal within the solid waste realm exist. Funds
3 could be redistributed to local governments for continued opera-
4 tion of solid waste programs. Oregon Recyclers encourages that
5 funds be earmarked for establishing reuse and recycling collec-
6 tion and processing systems and educational programs. Another
7 option would be to create a grant or loan program for use in
8 industries levied a product charge to convert to reuse or recy-
9 cling systems.
10 The Association of Oregon Recyclers stresses that reuse
11 should occur before recycling. The continued use of a product
12 in its original state is even more environmentally sound than
13 reprocessing it into the same or similar product. Significant
14 energy and disposal savings have been realised through the use
15 of refillables in the beverage industry. Efforts in Oregon in
16 reuse are making gains. Recycling organizations in Eugene which
17 have been the sole supplier of containers to several local natuxal
18 juice companies are now expanding. And in Portland through the
19 cooperative efforts of government and a recycling firm a bottle
20 washing facility similar to the Berkeley, CA project is being
21 established. We are concerned that the product charge not creatje
22 such a demand for recyclable material that reuse is pre-empted.
23 Either the product charge should be structured to include an
24 economic incentive for reuse or a separate tax credit should be
25 established for those manufacturers who reuse.
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1 In summary, we advocate that you recommend implementation
2 of the solid waste product charge. We note that its effect on
3 recycling would be positive and significant. Derived revenues
4 should be earmarked for solid waste management activities. And
5 special emphasis should be placed on incentives for reuse of
^ products.
7 MR. COATE: Thank you very much.
8 MR. BUTLER: Our next speaker this morning is Jeremy
9 Brott.
1° MR. BROTT: Good rooming. I'd like to thank you for
H the opportunity to visit Portland and to speak before you, both
I2 of which I've been looking forward to.
13 THE PRODUCT CHARGE: A FIRST STEP
14 Packaging has become a serj.ous problem in America today. In
15 1975, Americans disposed of 41.7 million tons of containers and
16 packages-- 40 percent of the total product waste disposed of
17 that year.'- Since 1958, our total consumption of packaging
18 materials has more than doubled, increasing 63.5 percent per
19 capita in that period.^ Packaging is "the country's largest
20 single industrial user of paper and glass; it is one of the two
2t largest users of plastics; and it is the third largest user of
22 steel. lr3
The above, coupled with our increasing dependence on limited
resources, demonstrates our need to make conservation competitive
25 in the marketplace. In 1972 the United States was importing ovelr
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50 percent of 14 key raw materials, including cobalt, aluminum,
platinum, tin, nickle, and zinc.4 By 1985, the United States
could be dependent on imports for half of all its raw materials,
one government offical has said,'
Government has been promoting anti-conservation policies.
Raw materials enjoy the benefits of depletion allowances, capital
gains taxes, foreign tax credits, and favorable transportation
rates. Secondary materials benefit from none of these.
9 This value of the resources lost to the future should be
10 included in the cost of packaging. Since we are stealing these
11 resources from future generations, ve should pay these "larcenoujs
12 costs':'. To further assist conservation's competitiveness, con-
13 sumers should pay the full costs of the packaging bought at the
14 time of purchase, not when they pay a garbage bill, nor when
15 their property taxes finance another sanitary landfill.
16 Current government policy now stimulates consumption of
17 virgin materials; any new policy should be formulated to stimulate
18 conservation. Policies to increase the use of recycled materials
19 should be adopted. Incentives should be given to improve recycla-
20 bility of products.
21 While recycling is important, the primary goal should be
22 the reduction in packaging generated. Energy and materials con-
23 servation is best accomplished by developing marketing systems
24 that do not require inputs of either of these resources. When
25 a package is used, reuse should be optimized. Reuse of containers
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1 will lead to a reduction of raw materials consumption, air and
2 water pollution, and product energy use compared to recycling.
3 This third level of conservation, recycling, allows the reclrcu-
4 latlon of materials, but at a higher cost than the previous two.
5 A product charge should be implemented in order to facilita
6 recycling. It should be added to the cost of a package at the
7 design and manufacture step of production. Marketing decisions
8 regarding form, function and cast of packages are made at this
9 time. Having the changes added here will have the greatest impa
10 in conservation of resources. At this stage, the process is
11 still centralized, simplifying collection and monitoring of the
12 fee.
13 The EPA has demonstrated that by exempting recycled materia
14 a product charge will increase rates of recycling. This selec-
15 tivity has a positive effect 0:1 materials use, but more can be
16 accomplished. Reductions in the surcharge should be extended to
17 industries that standardize the content of their materials to
18 facilitate recycling. The plan tics market would benefit from
19 this. Because of the variety of plastics made today, there is
20 little market for consumer recycled plastics. Simplification
21 or standardization of additive;) could create more accessible
22 markets. Also, this could restrict the use of potentially hazar
23 dous additives (such as cadminum-based pigments) that limit the
24 uses of that recycled material,
25 Recycling can be facilitated by the favorable treatment of
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1 containers made of a single material. Package types like the
2 blister package or the wood-cardboard crate must be disassembled
3 before the different recyclable papers can be used. This adds
4 to costs and to a potential contamination problem, which weakens
5 markets for suppliers.
6 While recycling is a commendable first step, the reuse of
7 containers is a higher goal. The product charge would support
8 reuse, since the charge would apply only once, when the container
9 was manufactured, and not on subsequent refillings. The charge
10 should be compatible with any deposits that might be added to
11 the containers to further promote their return for reuse. The
12 multiple benefits from the reusable beverage container are
13 estimated by the EPA to include a 49 percent reduction in raw
14 materials consumed, 48 percent decrease in energy used, 72 percent
15 reduction in industrial solid waste, 46 percent reduction in
16 atmosphere emissions and a 20 percent reduction in the containeis
!7 contribution to post-consumer solid waste. Annual energy
18 savings of 1.4 trillion BTU's have been computed in connection
19 with Oregon's Bottle Bill.
20 Selection for standardized containers that can be interchanged
between different companies should also be included. This Stan-
22 dardization has several benefits. It simplifies the sorting an<
23 storage process for the retailer. The collection, cleaning and
24 availability of these bottles is a potential for local jobs.
25 Experience in Oregon shows that it promotes local and regional
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breweries, thus preserving local Jobs and production in an indus-
2 try which has become extremely centralized in recent years.^
3 The product charge is only one element of a wholifltic solu-
tion to solid waste problems. The entire packaging concept as ws
know it today needs to be questioned and reformed. The external
costs of disposal, resource depletion and packaging's contributisn
to our increasingly energy-intensive industries, need to be
Internalized into the market price of a product. By making con-
servation competitive through this intemalization of costs, we
10 can create a philosophy of packaging that not only serves the
11 present consumer, but also the future consumer, local Industry,
12 energy conservation and the environmental quality of our homes.
13 MR. COATE: Thank you very much. Any questions?
14 MR. ROBINSON: Right at the end there, you started
15 talking a little bit about the costs other than management cost.
16 In other words, those— are the pollution costs involved with
17 the money in processing of virgin material? Most previous pro-
18 posals relating to the product charge concept have stressed only
19 the solid waste collection disposal cost to be included in the
20 charge. Would I interpret what: you were just saying to mean tha|t
21 you think there is some additional charge that should be levied
22 over and above the solid waste management cost to adequately
23 internalize those?
24 MR. BROTT: What I think is, the product charge tax,
25 one of the externalities of the output as opposed to input. I
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1 personally would probably favor the elimination of depletion
2 allowances. The transportation rates at this point give a virgi^i
3 materials a competitive edge over recyclable materials rather
4 than the addition of additional charges to consumers and packaging
5 at this time.
6 MR. COATE: Thank you very much.
7 MR. BUTLER: We are a little bit ahead of schedule, so
8 I would like to insert one of the people who asked to be put on
9 the agenda, Mr. Thomas C. Donaca of the Associated Oregon Indus -
10 tries and the Oregon Retail Council.
11 MR. DONACA: My name is Thomas C. Donaca, General Counsel
12 of Associated Oregon Industries, Inc., and I appear here today
13 representing the Packaging Subcommittee of the Association's
14 Solid Waste Committee.
15 First, your initial notice of this most important meeting
16 was first sent out October 20, 1977. However, it was not sent
17 to us, and we only became aware of the meeting when another, out
18 of state, association called to determine if we were going to
19 testify. Upon being advised that AOI, the most important associl-
20 ation representing all sectors of the Oregon economy relating to
21 packaging, had not been invited they sent us a copy of their
22 invitation. We were unable to take any action until November 7.
23 Frankly, that is too short a time to provide responsive answers
24 to the questions you have raised. In view of the importance of
25 the issue and the lack of time which we have been given to pre-
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1 pare, we intend to advise our Congressional delegation of your
2 lack of concern about industry resident in the state in which yoji
3 intend to hold one of your three public hearings.
4 Second, we have tried, however, to be responsive in the
5 limited time available to your questions and we have attempted
6 to respond generally and in addition have devoted attention to
7 solutions and conditions in Oregon which are responsive to the
8 issue:
9 1. Through the questions you discuss a "charge" on consume:
10 products and packaging. That "charge" is a "tax" and we do
11 not agree that the probleas of solid waste diaposal will be
12 solved, or even alleviated, by the imposition of a tax on
13 all items of packaged goods, or their packagea only, We
14 therefore respectfully submit that you should recommend
15 against such a tax at the national level and you should not
16 urge state or local governments to promote such a concept.
17 2. We believe that alternatives to your product tax alreadb
18 exist in the form of increased energy, labor, transportatioi
19 and other costs which are generally causing increases in ths
20 cost of goods and their packaging. The person responsible
21 for the application of packaging is also sensitive to the
22 cost of his product in the marketplace. Thus, we believe
23 the market system is already providing the incentives, or
24 disincentives, if you will, to the continuation of a trend
25 to overpackaglng. However, there is little real prospect
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1 that the need for packaging will be reversed. More vegetables
2 will undoubtedly travel in plastic films; more drug prescri)-
3 tions will be recompounded; more flashlight batteries will
4 be capsuled on blister pack cards. As to the blister pack,
5 part of this issue is that the retailer would prefer not to
6 have it, the supplier would prefer not to have the added
cost, but one segment of our society has required it— shos-
8 lifters. Here the packaging cost is an attempt to ameliorate
9 another social problem.
10 3. The present shipping container, and other packaging,
11 have grown so rapidly in use because they reduce the costs
12 of distribution. Manufacturers, processors, wholesalers
13 and retailers, faced with ever-increasing costs and regula-
14 tione, have to demand safe and clean protective packaging
15 that fits into highly automated shipping and distribution
16 systems. They must insist on lower handling costs and on
17 dlsplayable, easily recognized units that fit into today's
18 mass marketing. The products you buy are cheaper because
19 of the use of containers. It is fine for all of us to drea
20 of the barrels, baskets and bundles of the old corner groce
21 but at today's wage levels few customers can afford to buy
22 that grocer's foods and sundries if they were hand-filled Ijn
23 a sack by a clerk. That is why corner grocers have virtually
24 disappeared and mass marketing has taken over. Thus a sales
25 tax on this vehicle of mass marketing, the container, woulc
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1 increase the cost of retail purchases.
2 4. Some have urged greater use of returnable containers.
3 Federal laws and regulations forbid the reuse of containers
4 for meat, meat products, and certain dairy products, for
5 health sanitary and inspection reasons. This tax would
6 increase the cost of theise items. But there are even more
^ compelling reasons for not taxing containers. The use of
8 returnable containers on a large scale would force all
9 retail stores to be colloction places for used packages,
10 awaiting shipment back to the manufacturer or processor.
11 Thus stores of all kinds would have to devote large areas
12 to the storage of what was once waste. Visual pollution
13 could invade our general shopping areas and potential con-
14 tamination of our food shopping areas. In Oregon, our
15 Bottle Bill has provided us with hard information on the
16 effects of returnable containers in this respect. We know
17 that our retail grocers already have a problem with return-
18 ables in unsightliness, possible contamination, and space
19 and manpower limitations. Any further burden placed on thea
20 is, in our opinion, untenable.
21 5. While paperboard (and paper) make up a substantial part
22 of solid wastes, they are not the urgent and compelling
23 reason for Oregon's solid waste problems. The ban on the
24 burning of wastes (which we endorse) has inflicted a veri-
25 table mountain of leaves, grass clippings, weeds, and other
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1 garden wastes which we have in abundance as well as construe
2 tion and wrecking debris, clog our landfills. We cannot
3 solve the problems of disposal of this type of solid waste
4 by inflicting a scattering of special taxes on popular frag-
5 ments of the problem. We must attack the whole problem in
6 a uniform manner,
7 6. We suggest that real solutions can be obtained through
8 programs tailored to meet local problems, taking into consi
9 deration existing conditions in the local area. In Oregon,
10 almost universally, solid waste collection is handled by
11 private collectors. The only function of government is to
12 franchise the collectors operational area and his conditions
13 of operation, to the extent this is done at all. The private
14 collector charges a fee for his services which include pickip
15 and transportation (approximately 80 percent of the user
16 charge) and disposal (approximately 20 percent of the user
17 charge). The collector out of user fees received pays a
18 "tipping" charge to defray the cost of operation of the dis
19 posal sites, absolute cost of disposal will rise, but we do
20 not anticipate a major change in the percentage allocation
21 as labor, equipment and fuel costs are also rising. Thus,
22 unlike many other areas of the country who subsidize garbage
23 collection on a municipal basis out of local tax collection^,
24 which are understandably hard to increase, Oregon has an
25 almost self-sufficient system based on user charges.
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1 Additionally, Oregon has given impetus to local government
2 efforts to upgrade disposal operations, including solid waste
3 operations, including solid waste separation facilities, by
4 creating, pursuant to Article XI-H (1969) of the Oregon Consti-
5 tution, ORS 468.195 to 468.265, the State Pollution Control Bond
6 Fund (See Exhibit A). Pursuant to this law, the state has estab
7 lished a 30 percent grant and 70 percent loan program for constrie-
8 tion of solid waste disposal facilities. Projects eligible for
9 assistance must meet the following criteria:
10 The project or facility :Ls part or parcel of or complementary
11 of a Department approved and locally adopted Solid Waste Management
12 Plan.
13 The project or facility has proven or demonstrated technica
14 feasibility.
15 The project or facility is within local economic constraint
16 and abilities to administer.
17 The project or facility icust be approved by the Department.
IS Priority of eligible projects for state assistance for plan
19 ning and construction of pollution control facilities for the
20 disposal of solid waste shall be based upon the following criteria:
21 A. The project or facility is replacing existing inadequat
22 or unacceptable methods of solid waste disposal and thereby
23 results in improved environmental quality.
24 B. The project or facility recovers resourceii from solid
25 wastes.
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1 C. The projected facility will establish improved solid
2 waste management practices.
3 D. The need for state assistance is demonstrated.
4 Under the grant program, almost all counties have completed
5 a comprehensive inventory of their solid waste disposal needs
6 and have, or will soon submit, a comprehensive plan for county-
1 wide disposal.
8 For the private sector the state has adopted the Pollution
9 Tax Credit Program which provides state income tax credits for the
10 use, recycling or preparation for use of solid waste. Tax credits
11 for qualifying facilities are in the amount of 5 percent per
12 year of the certified cost but not to exceed 50 percent of cost.
13 This provides relief over a 10-year period.
14 Also, in the Portland metropolitan area there has been
15 created, by vote of the people, the Metropolitan Service Distridt
16 which has as one of its major responsibilities, solid waste control,
17 One of its most successful programs to this time is its tire
18 disposal program. The tire program is based on franchising hauliers
19 of tires and charging all persons disposing of tires a fee. No
20 tax is involved. Also, there is a major metal shredder in Portland
21 and the Metropolitan Service District and local recyclers have
22 directed large volumes of abandoned and discarded old car bodies
23 and used appliances to the shredder and these have almost cease<
24 to be a problem. Shortly a major Industry, utilizing the fuel
25 fraction from a solid waste facility to be developed by MSD, witjh
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1 the use of Oregon Pollution Bond funds, will be producing about
2 25 percent of their steam needs and 20,000 kilowatts of electrici
3 power.
4 Laneyfcounty, too, has developed its own county-wide program
5 and we believe several other counties will develop similar plans
6 in the near future.
7 These regional programs financed by user charges, as well a
8 with planning and capital asuistance from the state, provide boti
9 stability and direction to our solid waste programs and have
10 created a situation in which regional problems can be solved.
11 in short we feel that the same measures that: are bringing
12 about proper sewage disposal and treatment in our state, should
13 be employed to bring about p::oper solid waste disposal and treat
14 ment. To do otherwise would be to fragment and weaken the attac
15 on the solid waste problem and must result in:
16 1. imposing a great cent on users of shipping containers;
17 2. forcing a higher co«t distribution system on our state1
18 economy;
19 3. forcing higher costfi on consumers;
20 4. complicating the disposal of solid wastes.
21 That ends my statement. If there are any questions or com-
22 nents, I'd be happy to respond.
23 MR. COATE: Thank you very much. I'm sorry you had
24 trouble getting informed.
25 MR. BUTLER: Our n
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1 Coordinator of Solid Waste Management Affairs, Sierra Club.
2 MR. SWANSOH: Good morning. I am indeed the National
3 Coordinator of Solid Waste Management Affairs. I'm based out of
4 Seattle, though I've dealt with many hearings in Washington, D.C.
5 based on a lot of different committee hearings. This is one
6 aspect of my solid waste work.
7 We believe within the Sierra Club structure that this type
8 of legislation will be a positive incentive for industry to take
9 some responsibility as to where solid wastes are going to be put.
10 For the longest time, local municipalities and local communities
11 have had to deal with the problem one way or the other at their
12 own cost. We've seen many years of waste products and convenience
13 packaging and convenience bottles and cans that have simply been
14 buried. We believe totally this type of legislation would put
15 some emphasis as to who is responsible for this type of product
16 going into the mainstream.
17 It was encouraging to see the Minnesota people come up with
18 some sort of law two years ago which would have done something
19 of this nature that would have studied products that were going
20 to be produced in that state and determine what would be in the
21 best public interest.
22 in most of my work, we try to determine what is in, not only
23 our members, but what is in the best public interest for solid
24 waste management and we believe totally that this type of product
25
would do four things: One would internalize the cost of collect
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5
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8
9
10
11
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and disposing of waste. This is what I alluded to earlier. This
is definitely a very positive effect. Anytime you can produce
a cost within a product that will eventually take care of its
ultimate disposal, you are talking about something which is much
more efficient and much more equitable to the total market systen
Two: Raise revenue to be distributed to the state and loca
level for better solid waste management. This is absolutely
necessary. It's a national problem, but it's also a very real
local and state problem and these funds that would be generated
could go for the most needed areas.
Three: Would create an incentive for the use of post-consumer
| waste through tax credit provisions. An awful lot has been talk]
about today about what is taxable and whether that's good or bad
I think what we are talking .ibout here 10 a very positive monetaj
input into the market system. This would be emphasized and stab
lized and stimulated, and aluo this is my fourth point: markets
for secondary materials. Aguin, this is an awfully important
aspect to any major comprehensive solid waste management system.
It's a stabilizer of secondary materials.
It was alluded to earlior today that recycling is a very
good thing, that using wood chips at the virgin level is a very
costly energy and if you use--- recycle the paper, you take old
newsprint, boxes and put that: in your marketplace, you are going
to sink money. I think this is a major point that should be
mentioned here. Anytime you increase the amount of secondary
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1 material into the market, you are going to be saving money and
2 energy. This has been shown in beverage container legislation
3 throughout the country. It's been proven in Oregon; it's been
4 proven in Washington through some of our studies, and some of
5 the industry studies to indicate they are not perfect, reclaiming
6 and recycling and rewashing about 60 percent of bottles they put
7 into our state.
8 Anytime that you can reuse or recycle, you are going to be
9 saving energy and money and this is one of the major pluses of
10 this type of legislation.
11 We believe that there should be a five-year rather than a
12 10-year duration. For implementing this type of legislation.
13 Obviously there needs to be some time. This type of thing requites
14 market changes and switching over from certain equipment and using
15 others. So we believe the five-year duration is certainly ade-
16 quate. We also believe that the charge that would be charged
17 all these individual manufacturers is definitely equitable.
18 You are dealing with $30— at least currently— per ton
19 for disposal of waste in major metropolitan areas and it varies
20 either side for rural areas. We feel that that type of basis
21 at $30 a ton for most products is definitely an equitable aysten
22 and using, I think it's five and one-half cents per container ii
23 certainly an equitable system. You are not charging too much.
24 You are not going to increase the coat of that product to the
25 consumer by any great degree at all and again that money that's
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1 going to be generated, going to be put back into the system to
2 create a better solid waste recovery system so you can deal with
3 the problem better.
4 Again, we recommend that you support Senator Hart's bill
5 and most of the provisions that we've alluded to earlier today tl(iac
6 stipulate the product charge; it's at a stable rate. We would
7 also, like I mentioned before, recommend that the five-year period
8 is better than 10. We also recommend that a continuous study
9 be done either through your committee or through some similar
10 body at the Cabinet level or at the Senate-Congrass level that
11 actually deals with continuous review of the effectiveness of
12 this type of product charge, its impact upon the solid waste
13 system as well as other charges, other systems like the Minnesota
14 law and how it impacted in the solid waste stream.
15 MR. COATE: Thank you. Any questions from the panel?
16 MR. FIEKOWSKY: Agiiin. to repeat the statement that opposing
17 the product charge would help minimize cost, and you also, at
18 the end of your statement, aiiserted that if there were product
19 charges levied on paper, it could improve the national average
20 cost of disposing. The affect this would have on the cost of
21 purchasing products packaged would be very trivial. I agree th<
22 contents are a hell of a lot more expensive than the packaging.
23 This being the case, how is !.t the consumer is made aware of th<
24 cost of disposing of the product? What effect will it have if
25 the prise of the product is jiubstantially changed? Will it not
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1 affect the purchase of this product?
2 MR. SWANSON: No. Again, the amount of money that's
3 going to be collected may be a small amount, but it's estimated
4 to be around $2 billion a year. That $2 billion could substantially
5 help out, like I mentioned, those most needed solid waste prograns
6 and thus reducing the cost to the consumer at that level. In
7 Seattle, we have a set rate that we all pay as residential owners
8 to deal with solid waste collection. Whether we produce one can
9 of waste or four cans, there is a certain charge that goes into
10 the major system flow. What I'm saying is, this $2 billion couljd
11 be a start to reduce some of those costs.
12 Anytime you do a national legislation of this type, people
13 become aware. All of us here today have become much more aware
14 of the outlook of this type of solid waste system, and what this
type of charge can do. It's just an ever-increasing educational
16 process for all of us and I think If you deal with the aspect,
17 you might even reduce the cost $1 a month to each consumer, say,
18 in Seattle.
19 You are dealing with some hard-core reality, an economic
20 base system that people will understand.
21 MR. FIEKOWSKY: We impose a product charge and collect
22 $2 billion. Let's just agree, for purposes of discussion, this
23 is not going to affect the amount of product purchased or the
24 volume of solid waste generated thereby because such trivial
25 change in the price people pay for packaged material
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1 MR. SWANSON: If I could disagree with you on one poirt
2 MR. FIEKOWSKY: What percentage change do you expect
3 the prices of packaged products will reflect as a result of a
4 product charge in the magnitude of $32 a ton for materials?
5 What magnitude of price change for products purchased by consumers
6 would you expect as a result of that?
7 MR. SWANSON: It certainly would be a relevant factor
8 pertaining upon the type of material you are talking about and
9 how much tax credit that particular manufacturer would be receiving.
10 I think one or two percent.
11 MR. FIEKOWSKY: Let's assume, to avoid the question
12 of whether the elasticity is one. one and a half or two percent,
13 let's just ignore that and 3Imply say that now we impose a tax
14 and collect $2 billion, but immediately the flow of materials is
15 the same. Consumers somehow through taxes or otherwise are going
16 to still be paying for the disposal of that property, but it is
17 true we have $2 billion of additional revenue obtained with respect
18 to the total flow. How doeii this save resources? I fail to see
19 how imposing a tax which is not related as a user charge to the
20 actual disposal of the product can be said to save materials.
21 MR. SWANSON: Again, because of the provision within
22 the legislation that allows for lessening the tax burden upon
23 those individual manufacturers who are using an increasing amounjt
24 of secondary materials, and one example that's mentioned to me
25 would he using 50 percent paper— consumer waste product withii
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the production market, you would be cutting down then that user
charge from whatever it might be, $35 to $32, cutting that in
half and again that providing a tax incentive means that person
is going to be using a great deal more of the replenished materials,
5 thus reducing the amount of solid waste that's going to be in
6 the solid waste stream, reducing the cost to the local solid
7 waste utility or whatever for disposing of that material. I'm
8 trying to answer your question. I hope I'm not missing the poir
9 MR. FIEKOWSKY: Let me see if I interpret what you say
10 There will be $2 billion of revenue. This tax revenue will then
11 be used to pay in subsidy through certain kinds of activity such
12 as recycling?
13 MR. SWANSON: It could.
14 MR. FIEKOWSKY: How is that different from not imposink
15 this tax, but— out of general tax revenue? What I'm trying to
16 ascertain for Us is how this differs from any ordinary tax. We
17 have tax on cigarettes, for example, and we can demonstrate this
18 more than covers the solid waste because of packaging cigarettes
19 We don't call that a product charge. We call that a sales tax
20 on cigarettes.
21 But my question to you is, how can we really distinguish
22 this proposal from a tax?
23 MR. SWANSON: Because of the simple fact that it's ear
24 marked. It means that what you get in would not go to a general
25 fund, would not go to paying something off that's happening in
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1 Washington, D.C., but would be directed for the individuals
2 throughout the nation that deal with specific solid waste problems
3 they have, and I think that's one of the major things that attracted
4 us to the measure in the first place, was that this type of levy
would be earmarked to reduce to the consumer the coat of dealing
6 with a solid waste product it all levels.
7 It's not a catch-all. I agree with the individuals who have
8 already said today that thin is not a pat solution for solid was
te
9 problems. It is a help. That is why it will be a part of a
10 comprehensive solid waste— national solid waste management
11 system just like beverage container legislation, we believe it
12 will do that type of thing. This will also be an advantage of
13 being able to deal with that: specific problem with specific
14 revenue and emphasize at th«s manufacturer end at least some rea-
15 ponsibility to this solid wuste problem rather than just producing
16 and producing convenience products without any regard as to who
17 will be dealing with the product after it's gone through the
consumer market.
19 MR. COATE: Thank you very much.
20 MR. BUTLER: Our next speaker is Mr. Fred A. Stickel,
21 Vice-President of the Oregon Newpaper Publishers Association.
22 MR. STICKEL: Good morning. I apologise. I heard
23 Don Hodel (phonetic) talk about the future energy problems in
24 the Northwest. I just didn't realize that the future is now.
25 My name is Fred A. Stickel. I am president and publisher
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1 of the Oregonian Publishing Company which publishes the two
2 largest newspapers in the State of Oregon, The Oregonian and The
3 Oregon Journal. I am appearing today not only on behalf of my
4 company, but also as vice-president of the Oregon Newspaper
5 Publishers Association.
6 The Association is the professional organization of all
7 daily and weekly newspapers in Oregon and has some 112 newspaper
3 members. Every newspaper in the state which can meet the Associ-
9 ation's membership requirements is a member.
10 The ONPA appreciates that this committee is on a "fact-
11 finding mission" and does not have conclusions already formed
12 regarding this complex problem of solid waste disposal. My
13 company and the Oregon Newspaper Publishers Association are
14 grateful for this opportunity to make our feelings known before
15 your committee decides on a particular course.
16 It is interesting that the committee has chosen Portland,
17 Oregon, as the site for one of the three hearings on this matter
18 of solid waste disposal. As you know, Oregon is famous for its
19 strong desire to protect the environment of this beautiful statej.
20 Probably no other state has done as much.
21 We have pioneered in legislation, such as the Oregon Bottle
22 Bill, which has become a model for other states, and the ban on
23 aerosol sprays containing fl/fiyrocarbons. We have cleaned up sue
24 important rivers as the Willamette which flows through our biggest
25 cities, Portland, Eugene, Salem, Corvallis, Albany.
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Industry and private citizens all have shown a great desire|
to keep our state clean and beautiful. It is rare to see refuse]
piled on sidewalks, or wastn paper blowing around our streets.
We have both volunteer and paid "litter patrols" on our roads anjd
highways. We have established recycling centers; our service
clubs, youth groups and churches are helping to finance their
good deeds by collecting paper, bottles, cans and other used
materials for recycling centers.
In other words, Oregon has an excellent track record in thi
area of solid waste control, and especially in recycling and
| reuse of old newspapers.
It is difficult to see why Oregonians, why Oregon industry
why the Oregon newspaper business should be penalized as we wouljd
be under any national solid waste charge program.
My comments go to four points:
1. Solutions to the solid waste problem should be found at]
the local level.
2. The newspaper industry, especially in Oregon, has taovedj
rapidly in recent years to recycle and reuse old newspapers and
thus should not be assessed charges for a problem that is being
solved through voluntary effort.
3. Imposition of a national program with heavy charges
will tend to discourage innovative solutions in the newspaper
industry.
A. Charges which might be as much as 10 percent of the
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1 current price of newsprint would be so burdensome that a major
2 portion, at least, would have to be passed along to readers— o<
3 consumers.
4 To the first point, I already have discussed in my opening
5 remarks how Oregon has pioneered in the field of protecting the
6 environment. Let me add that the state, the counties and the
1 cities have taken strong steps in this field. It would be a
8 shame to penalize this state by assessing severe charges against
9 industry because elsewhere in the country some problems are not
10 being solved.
11 Americans prefer as little governmental control of their
12 lives as possible. This is certainly one area where "big
13 government" can guide but should not control people on the home
14 front.
15 To the second point, the steps taken to control paper pol-
16 lutlon, let me talk for a moment about an industry program well
17 under way.
18 Within the newsprint industry a great and expensive effort
19 has been made to perfect a system of recycling old newspapers.
20 After a long research a formula for de-inking newspapers has bee^i
21 developed and there are already three mills— two in the east
22 and one in California-- with considerable experience in making
23 good newsprint out of de-inked newspapers— and in substantial
24 volume.
25 i shall use The Oregonian as an example. Our Sunday comic
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1 section is printed in its entirety on newsprint remanufactured
2 from old newspapers. This is not inconsiderable; it amounts to
3 approximately 2000 tons a year.
4 In our own state, the Oregon Newspaper Publishers Associati
5 and the Publishers Paper Company are working together toward
6 expanding the recycling of newsprint and waste paper. Publisher
7 Paper already has one such xecycling plant in operation right he
8 in Oregon and plans a second one.
9 Such recycled newsprint has two benefits for this industry:
10 1. It increases the supply. Just two or three years ago
11 supply was a critical problem for newspapers.
12 2. It saves the trees. For every ton of recycled newsprin
13 several trees will remain standing in our forests. This is
14 important in this area where we are trying to match the harvest
15 of timber with the growth of new trees.
16 To the third point, imposition of solid waste charges in th
17 newspaper industry would be a threat to further costly research
18 and development in this field of recycling and reusing newsprint
19 It would be financially discouraging to publishers to be charged
20 for a solid waste disposal program on the national level while
21 they were developing a much taore important program of recapture
22 of old newsprint within the industry.
23 It might be helpful to l:he committee to visit Publishers
24 Paper newsprint recycling mi:.l in Oregon City while you are here
25 or Garden State Paper Company's bigger mills in California and t
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1 east.
2 To the fourth point, concerning the financial burden which
3 would be placed on the newspaper industry, let me say that an
4 ONPA study recently concluded looking toward a voluntary recycling
5 program estimates newspapers of Oregon consume approximately
6 125,000 tone of newsprint a year.
7 It is our understanding that a $26 to $30-a-ton tax might
8 be levied as a solid waste product charge. This would mean an
9 extra expenditure of $3 to $4 million a year for our 112 daily
10 and weekly newspapers. My company alone would have to pay
11 around $1.600,000 for our 60.000 tons. This would have to be
12 passed along to our readers and/or our advertisers. It would
13 be too much to swallow.
14 In addition to the industry's program to encourage the
15 recycling and reuse of old newspapers, the general public is
16 also involved. There are so many reuse possibilities from
17 folding newspapers into fireplace logs, to cleaning windows, to
18 wrapping fish, to mulching your tomatoes.
19 The cost of newsprint has mounted rapidly in recent years.
20 The value of old newspaper has gone up accordingly.
21 A $20 per ton newsprint price increase has already been
22 announced by one maufacturer in the east. If this increase
23 spreads throughout the industry, the price paid by salvage
24 companies for waste newsprint— old newspapers-- will also
25 Increase. Presently, old newspapers can be sold to recyclers
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in the Northwest for $40 a ton— that's two cents a pound.
Eighty-four standard-size ne\»pages weigh one pound. Last
Sunday's Oregonian weighed four pounds. That's an eight-cent
value on the resale market. Why, that's more than the return
deposit on a beer bottle. No one should carelessly discard an
old newspaper. I'm beginnning to believe no one does.
We have collection depot:s and recycling centers all over
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Oregon. Citizens bring their old papers to these centers, or
Scout groups, Kiwanis Clubs, Lions Clubs, high school clubs and
the like are out gathering them to help raise funds for such
programs as youth camps, aid for the blind and school and church
activities.
Let me give you a personal example of how conscious Oregoni|ns
are of the importance of collecting newspapers:
A few days ago I happened to toss a copy of one of my own
newspapers into the garbage can. My wife heard me. "Why did
you do that?", Peggy asked. "I was all through with it", I said.
"Don't throw away any newspapers; I'm saving them for the
church drive!" she scolded me.
I should like to point out that the First Amendment to the
United States Constitution provides that Congress shall make no
law abridging the freedom of speech, or of the press.
In a broad sense, the imposition of such & tax as suggested
on the amount of newsprint utilized by a newspaper could be a
threat to the dissemination cf news through a free press to as
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1 many Americans as possible.
2 Every tax, such as this one which you suggest for solid
3 waste disposal, drives up the cost of newspapers, making them
4 less affordable to readers. Newspapers sell as cheaply as they
5 do for one reason: to provide information In depth to as many
6 Americans as possible.
7 This charge could well mean that nearly all newspapers would
8 have to Increase their subscription rate and that some, now
9 distributed free, would have to begin charging a circulation
10 fee. This extra financial burden could well mean the difference
11 to many families of reading or not reading a newspaper. This can
12 be substantiated.
13 The second question that your committee posed in announcing
14 this hearing today asked for possible alternatives to a national
15 solid waste charge program. I have the germ of an Idea: Let m«
16 call it "the Oregon Plan".
17 The Environmental Protection Agency might establish a
18 program within that agency to provide advice and counsel to
19 local government, private industry and citizen groups on solid
20 waste programs. It could serve as a clearing house of informa-
21 tion on how various communities have handled their solid waste
22 problems. It could provide guidance to local governments on
23 how to set up solid waste programs which might well need to
24 differ from one community to another. It could possibly be a
25 screening agency for local governments in seeking federal funds
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1 for solid waste programs. It could goad backward communities.
2 This would provide leadership from the Federal government
3 without requiring another federal invasion into local affairs.
4 It would be the carrot approach, not the stick.
5 Xn summary, I contend a national solid waste charge progran
6 is not necessary. Certainly, paper should not be a target. It
7 is recyclable, reusable and Is biodegradable. Any solid waste
8 program should be on the local level and Oregon has shown that
9 it can be done. Look around you while you are here. If we
10 can do the Job of protecting the environment here, anyone can
11 do it, anywhere.
I2 And without federal compulsion or unnecessary charges.
13 Thank you for this opportunity. 1 shall be happy to answer
14 any questions.
15 MR. ROBINSON: One question I would like to ask is,
16 most product charge proposal)) to date, including Senator Hart's
17 proposal, contain a credit for the use of recyclable material
IB against the product charge; presumably in some newspaper history
19 the charge Chat was levied would be reduced by the percentage
20 of recyclable paper that's uned in your product. It would seem
21 to me that would provide an Incentive for the recycling industry
22 rather than a threat in the recycling industry aa you postulated
23 earlier. I don't understand how it would be a threat if there
24 were that credit for the recycling material. Can you expand on
25 that?
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1 MR. STICKEL: I don't mean to be flip, but I'd like
2 to aee the size of the credit as opposed to the size of the char
3 MR. ROBINSON: If, for example, the charge were $30
4 a ton and you used 50 percent recyclable material, the charge
5 would be reduced by 50 percent?
6 MR. STICKEL: Well, the first answer that comes to my
7 mind, Mr. Robinson, is possibly a selfish one, but I'm fighting
8 every way I know how to hold down the cost of newsprint. I don1
9 think it's practical to say that all newsprint used and required
10 could be manufactured from recycled newsprint. You would still
11 have to have some virgin. Therefore, the credit would not match
12 the charge. In my own business, which is fairly average as far
13 as newspapers are concerned, the cost of newsprint represents
14 about 38 percent of our total cost of doing business. Anything
15 that happens to that in the terms of $1 or $2 or $3 has a tre-
16 mendous cost effect upon us.
17 Since the 70's, more particularly since 1972, we've had to
18 raise subscription rates three times; of the rapidly escalating
19 price of newsprint,that has had an effect on the circulation
20 of newspapers all across the country. That was the broad sense
21 I made to the First Amendment. I still feel that threat is sti]
22 there if this product charge was levied, there would be an incrc
23 sed cost to the newspaper.
24 MR. ROBINSON: Rather than as a threat to recycling it
25 MR. STICKEL: Yes.
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1 MR. ROBINSON: One other question. You were mentioning
2 that any price increases would have to be absorbed by either
3 readers or advertising. I don't know that much about the publis i-
4 ing business myself.
5 MR. STICKEL: Neither do I.
6 MR. ROBINSON: I doubt that. Approximately what percejit-
7 age of newspaper revenues are covered by advertising as opposed
" to subscription costs?
9 MR. STICKEL: I can't give you a specific answer to
10 that except to tell you that the circulation of newspapers is a
11 losing proposition if it were not underwritten by the advertising
12 revenues. I think that answers your question without giving
13 MR. ROBINSON: I thought there might be some sort of
14 national average.
15 MR. STICKEL: No. It would vary by paper size and alsjo
16 by subscription rate. We are a low rate newspaper.
17 MR. COATE: Thank you very much.
18 MR. BUTLER: Our next speaker is Ms. Valerie Lee from
19 the Department of Environmental Quality in Portland. Oregon.
20 MS. LEE: We are appreciative of this opportunity to
21 comment on the concept of the Solid Waste Product Charge. We
22 in Oregon have a great interest in the entire area of waste
23 reduction, and are actively involved in reducing the volumes
24 of waste that must be disposed of in this state.
25 To this end we have made source reduction a major goal of
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Oregon's draft Solid Waste Management Plan, calling for increase
2 in the amount of recycling, discouraging wasteful products and
3 packaging, and otherwise seeking to reduce the per capita genera
tion of waste. We view the product charge as one of several too
Ls
which may be effectively utilized to these ends, and one which
is deserving of the serious consideration that it is being given
here today.
Based on EPA studies to date there is little doubt that a
product charge which includes a credit for use of recycled mater-
10 ials will have significant effect on solid waste reduction by
11 stimulating increased recovery of materials for recycling. We
12 have not yet, however, explored the relative merits of different
13 source reduction measures or what an effective mix of such tech-
14 niques would be.
15 We caution that the effects of a product charge on product
16 design and on utilization of specific materials should be care-
17 fully assessed, and that the process for evaluating these impacts
18 should be comprehensive enough to satisfy those affected by suet
19 legislation that all implications have been examined. We look
20 forward to examining final EPA studies on product charge impact
21 and design considerations.
22 Given the information presently available, I would like to
23 address several points which we feel are significant in considex
24 ing the design of the product charge.
25 A. Legislation at the federal level is important to the viabil
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1 ity of so comprehensive a measure as the product charge, a
2 fact which the beverage industry is discovering with the
3 increasing number of differing state "bottle bills".
4 Since the Oregon experience has proven that the "bottl|e
5 bill" is tremendously effective in increasing the recovery
6 and recycling rate of buverage containers, those containers
7 which are regulated by Htate "bottle bill" appears to be
8 an excellent complement to the product tax, and we advocate
9 again here, as we have no often in the past, that deposit
10 legislation be enacted at the national level.
11 B. An examination of available information, including Senator
12 Hart's proposed bill, loads us to believe that a well-
13 designed product charge can have environmentally desirable
14 impacts on both the choice of materials utilized in making
15 affected products and on the ultimate recoverability and/
16 or disposability of thene products. With this in mind we
17 offer the following:
18 1. Credits and incentives for use of recycled material are
19 critical to the waste reduction effects of a product charge,
20 and should definitely be included in any such legislation.
21 According to EPA figures this provision would stimulate
22 more drastic waste reduction results than any other aspect
23 of the bill.
24 2. In connection with i:he credit for use of recycled mater-
25 ials we suggest that the Committee also consider establishing
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1 a requirement for labeling which would indicate what per-
2 centage of recycled material is contained in a product.
3 Labeling which would indicate a package's cost should also
4 be considered. This would have a greater affect on consumer
5 awareness and demand than the small price adjustment which
6 would result from the product charge, and would therefore
7 likely stimulate producers to employ greater efficiencies.
8 3. We suggest providing incentives (credits) for production
9 of products which are reusable and/or recyclable; and pro-
10 viding disincentives for products which present problems
11 for recyclability or recovery, or which create environmental
12 pollution or hazards in disposal.
13 C. EPA figures indicate that packaging and all paper products
14 under a product charge would impact a significant portion
15 of the solid waste stream with a minimum of administrative
16 costs. We feel, however, that certain products which by
17 their natures create especially difficult disposal problems
18 such as tires and oil, should also be included. While such
19 items may constitute a lesser segment of the waste stream,
20 they are a large part of the problem, and significant effor
21 to develop recycling programs as alternatives to landfillinj
22 for these products must be undertaken.
23 D. Deliberations about that characteristics should be used as
24 the basis for the charge, e.g. weight, unit, volume or valuje,
25 should include a thorough examination, as mentioned earlier,
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1 of what the effects of r.he alternatives will be on the use
2 of specific materials. For instance, it would appear that
3 some proposals which suggest taxing rigid containers by
4 unit, and all other mati.erals by weight, would give an
5 advantage to plastic packaging over paper where the plastic
6 is used as a wrap rather than in a rigid container. It
7 would be most unfortunate if the side effects of any sourc<
8 reduction policy resulted in increased use of non-renewabl«
9 resources. Given that certain levels of packaging are nee-
10 essary, we should utilisie renewable sources and materials
11 which are biodegradable, recyclable and reusable.
12 E. We have considerable interest in the distribution of reven4*»
13 which would be generated by the product charge. It seems
14 clear that revenues generated by a tax aimed at internalizing
15 the cost of disposal should be used for solving disposal
16 problems. While further examination of forthcoming EPA
17 studies are necessary, we are favorably inclined at this time
18 toward a plan to transfer monies to state and local govern-
19 ment, where the burden of solid waste management is carriec
20 Provisions for diverting; funds to particularly innovative
21 waste reduction and recovery approaches should also be
22 examined.
23 We at the DEQ look forward to providing continuing advice
24 on the product charge concept: as deliberations and studies pro-
ceed. We also look forward t:o the enactment of effective,
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1 comprehensive measures which will stem the prolific flow of
2 America's solid waste stream.
3 MR. COATE: Is the DEQ considering state legislation
4 to recommend to the governor to
5 MS. LEE: Right now, we are in the process of working
6 on a draft plan and included in that, if the final plan includes
some of the measures would be drafting of legislation that would
8 carry out the plan.
9 MR. ROBINSON: Mr. Witter from Weyerhaeuser Corporatioi
10 this morning indicated a strong concern on the part of their
11 industry that use of by-products in the manufacture of paper and
12 might be adversely effected by some sort of product charge that
13 was not included as some form of credit, given the importance of
14 that industry to certainly the State of Oregon, has your office
15 had any chance to look into ways that that might be mitigated
16 or ways of handling that problem?
17 MS. LEE: We haven't. Time hasn't really allowed that
18 and that is why we are sort of indicating this is our first cut
19 at it, but personal observation is, it's amazing how innovative
on
u we can get
21 MR. SMITH: One of the leading contenders as a way to
22 use the proceeds of a product charge would be essentially to pas
23 the money back on a per capita or other basis to state governmen|t
and allow state governments-- or as the administrator of revenus
25 sharing approach. Do you think state governments, and I presume
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1 it would be the solid waste nanagement branches of the state
2 government, do you think state governments are g<»nerally up to
3 the task of redistributing t'tiese monies to your local Juris-
4 dictions in an efficient and equitable kind of basis? Do you
5 think it would cause significant problems? What in general are
6 your ideas or comments about the state governments as a conduit
7 for these monies back to the local jurisdiction where the problens
8 exist?
9 MS. LEE: I'm not terribly familiar with other state
10 governments. All I understa-id is that Oregon is perhaps a step
11 ahead in terms of solid waste planning and we are currently—
12 a couple areas that come immediately to mind where it would be
13 very helpful to have more resource where we could assist them
14 to bring to bear on the problems are, for instance, in the areas
15 of tire and oil recycling whare the MSD has certain problems,
16 they are trying to administer and— but we already do that very
17 well.
18 MR. COATE: Thank you very much.
19 MR. BUTLER: I'll call one more speaker and then we'll
20 break for lunch and after luich, we have some three others at
21 least on the schedule and, as I said before, we'd like to provid^
22 everyone who is not on the schedule an opportunity to speak if
23 they wish.
24 Our next speaker is Mr. Joseph Rippee, Corporate Environmen:al
25 Engineer of the Potlatch Corporation, Wood Products, Western
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1 Division.
2 MR. RIPPEE: Thank you, Mr. Chairman. Potlatch Corpor
3 ation, we are a forest products industry and I won't plow the
4 same ground.
5 Our objection to the solid waste charge is essentially the
6 same as those others in the forest product industry, so rather
7 than do that, I've given Miss Mann a copy of my paper and I'll
8 let it go at that. I would answer any questions or comments
9 you might have, though.
10 We appreciate this opportunity to present our views on this
11 important issue to the forest products industry. Potlatch Cor-
12 poration is a manufacturer of pulp, paper, paperboard, tissue,
13 particleboard, plywood and lumber. We have operations in Idaho,
14 Minnesota, Arkansas, California, Pennsylvania, as well as severajl
15 other states.
16 Although we agree with the goal of conservation of energy
17 and resources, we do not agree with the solid waste product
18 charge. It was stated in the Resource Conservation Committee
19 Solid Waste Product Charge Legislation dated October 20, 1977
20 that "...If a product's disposal cost is a significant portion
21 of its value at some point in the production and distribution
22 chain, its incorporation could offset the type and amount of
23 resources used in consumer products and packaging. Depending
24 on how it is designed, a solid waste product charge could bring
25 about increased materials recycling and could lead to the con-
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servation of energy and natural resources..."
We believe this logic i« faulty and offer the following to
support our position:
1. Western pulpmills uiie largely sawmill residue for pulp.
This residue is related to lumber production not pulp productloi
Recycling more fiber would only require that the residue be bun ed
or landfilled. No fewer treus would be cut. The same logic
applies to thinning timber stands. Timber from mid-western and
southern tree farms should be. viewed as a crop raised specifically
10 for that purpose.
11 2. Existing government regulations such as FDA prevent
12 recycl$/3sf some post-consumer fiber into some grades of paper.
13 in addition, non-conpatibilil:y of the fiber with product qualitj
such as strength, brightness, shive content, freeness on the
15 machine, or type of coating will prevent utilization of the
16 recycled fiber. Other areas such as tissue, linerboard or cor-
17 rugating media or newsprint nay be able to use recycled fibers.
18 3. Major sources of po:it-consumer waste paper are from
19 large cities. Most large pu'.ping facilities are located in
20 remote areas away from the large cities.
21 4. New or amended pollution control regulations concerning
22 toxic or hazardous chemicals {jive rise to concern at the mill
23 level for introducing fibers of unknown or uncontrolled source
24 Into the system. Constituents from the waste fiber may find th
25 way into the waste streaa and present difficult and costly
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disposal problems.
5. Packaging has become an essential part of distribution
and marketing. It not only offers convenience to the shopper,
but it also includes greater sanitation, less cost, availability
of products out of season, ease of shipment and the consumer buys
only the product he wants. He does not have to dispose of
unwanted tops, hulls, vines, and other waste. This remains at
the processing plant for efficient disposal. This waste, if
received by the consumer, would place an even greater burden on
the municipal waste disposal systems.
6. Imposition of a solid waste tax to internalize costs
would not show a proportional reduction in solid waste disposal
cost. Placing the burden of the cost on the producer does not
address the problem. Studies have shown that collection costs
generally account for 70 to 85 percent of total solid waste man-
agement costs and labor accounts for 50 to 75 percent of collec-
tion costs. An increase in productivity of collection manpower
would be a much more effective way to reduce costs.
7. Internalizing cost does not consider that all consumers
are not necessarily served by collection services. Rural consuners
may dispose of their own waste. They would be required to pay
a higher price for commodities but would receive no credit for
disposal of the waste. The tax also disregards the use of solic
waste to produce energy. Both paper and packaging products
have high heat value.
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1 8. It is likely that costs attached to the product and
2 passed through to the customer would be marked up and increased
3 considerably by the time the product reached the consumer. It
4 is undesirable to create another government bureaucracy to collelct
5 revenues and dispense them to municipalities. It is believed
6 this system would not be nearly as efficient as the present sys-l
7 tern. In addition, there would be no incentive for the municipalj-
8 ity to economize or operate efficiently. As long as the money
9 was coming in, ways would be found to spend it with efficiency ok
10 necessity only a passing consideration.
11 9. Th« tax is discriminatory because it would tax paper
12 in all forms but other materials would be taxed only when neces-]
13 sary for packaging.
14 10. The tax would be regressive since its heaviest impact
15 would be on low income families.
16 11. The tax would favor lighter weight materials and creatle
17 shifts to products such as plastics that use a depletable nature 1
18 resource.
19 We believe that a better approach would be to incorporate
20 incentives to encourage recycling and conservation without resorting
21 to a product charge or tax. These incentives could include:
22 1. Additional tax credits; 2. fast write-off for recycling;
23 3. increase in industry R&D; 4. improve municipal collection
24 systems; 5. improve recycling freight rates; 6. provide goverit-
25 ment technology grants .
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1 These are only a few of the many options available that
2 offer a positive approach to the solid waste problem. All are
3 superior to the solid waste product charge.
4 Thank you for this opportunity to present our views.
5 MR. ROBINSON: I'll just ask, I guess, the same questions
6 I asked of Mr. Witter earlier this morning regarding the product
7 charge and ask you if you have some of the same concerns about
8 the by-product uses as he did.
9 If the charge were able to account for the use of by-producjts
10 or have it treated similar to recyclable material, would that
11 change your view of the product charge in any way?
12 MR. RIPPEE: I would answer that through my own persorlal
13 feelings and not necessarily the corporation. But the way I wovld
14 view it is, if you are looking at the cost, I think you have to
15 go back and look at the collection system from the waste and
16 from that standpoint, I would still be opposed to the charge
17 because I see the charges related to a great extent to the col-
18 lection and pickup of the waste material from the individual
19 household itself, so you see, I would still oppose that.
20 MR. SMITH: It wasn't exactly clear to me from Mr.
21 Witter's earlier testimony and perhaps you can clear it up.
22 With the concern of the respect to the utilization of foresjt
23 products residuals that less forest products would actually be
24 taken out of the forests in terms of leavings, there would be a
25 considerable loss of markets here which would cause more wood
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1 materials Co be left in the forest or that once the wood was har-
2 vested for basically plywood and lumber purposes, that then the
3 residuals pile up and the forest product industry's manufacturin £
4 facilities and would not havit a market or is it a combination of
5 both of these?
6 MR. RIPPEE: I think it's a combination of both. You
7 would have the materials left: in the woods, but you would also
8 have the slabs and things like that that go into chips. At this
9 point, we at Potlatch, have
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1 reasonableness of a product* charge, a fraction of the total out•
2 put which in fact gets into the solid waste stream?
3 MR. RIPPEE: Yes.
4 MR. COATE: Thank you very much.
5 MR. BUTLER: With that, we will break for lunch. We
6 have three more speakers after lunch. I'd like to break now
7 and reconvene at 1:30 and I assume that we'll probably have some
8 extra questions and answers at the end of the scheduled speakers
9 and be finished around 2:30 this afternoon. Thank you very much
10 and we'll see you at 1:30.
11 (The recess for lunch was taken at 12:30
12 p.m.)
13 (Whereupon the afternoon session of the
14 Resource Conservation Committee hearing
15 on Solid Waste Product Charge Legisla-
16 tion was resumed at 1:30 p.m. on Novemb
17 21, 1977.)
18 MR. BUTLER: Our first speakers for this afternoon are
19 from the University of Oregon Survival Center. Carol Todd, Mr.
20 Steve Hoke and Mr. Brian Wilson will be the three speakers.
21 MS. TODD: Good afternoon. As a native Oregonian and
22 I'm a fourth year student in the CSPA at the University of Oregon
23 I'm now speaking for the Survival Center of the University of
24 Oregon campus.
25 During the 1977 Session of the Oregon Legislative Assembly,
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1 several pieces of legislation were proposed to deal with the
2 issue of Solid Waste Management. Progress of such legislation
3 was halted by a belief that the incorporated ideas were already
4 being studied and implemented at the federal level. However,
5 only recently the Survival Center learned that the Resource
6 Conservation Committee is only now taking public testimony
7 throughout the country on how to resolve the question of the
8 general value of resource conservation policies, specifically
9 that of the Product Charge, a fee or excise tax levied on consumer
10 products or packaging. This Committee will make its recommenda-
11 tions to President Carter and the Congress in early 1978, and
12 thus the Survival Center of ttie University of Oregon would like
13 to present our views on this potential legislative initiative.
14 In the past, the State of Oregon has been inBtrumental in
15 providing the impetus necessary for the acceptance of environ-
16 mentally sound and feasible legislation reforms. The Oregon
17 Bottle Bill of 1971, the prohibition of pull tabs on metal
18 beverage containers, and the recent Oregon ban on sales of
19 selective products containing frojufcrocarbons, are examples of
20 recent legislation from this environmentally aware state that
21 have captured the interest and support of the nation. With
22 this record of environmental achievement noted, the Survival
23 Center believes that once again the nation can turn to Oregon
24 for direction on this vital Issue: Solid Waste Management.
25 With respect to the Oregon State Legislature and firm
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1 belief In the requirement that any alternative to the status quo
2 must produce the greatest public benefit with the least public
3 burden, we present our views.
4 Municipal solid waste Is a significant and growing problem,
5 amounting to over 150 million tons annually. The question
6 posed by this committee, on how to reduce this problem is
7 prioritized by the ever increasing quantity and cost of solid
8 waste disposal.
9 We believe that any development of legislation incorporating
10 a product charge must be levied at the national level. Despite
11 concerns over possible bureaucratic foul-ups, to be effectively
12 organized so as to dispose of a national problem— a national
13 plan must be implemented. While the structure should originate
14 at the federal level to allow for equalitative efficiency, we
15 believe the state governments should be given the responsibility
16 of promoting the concept among the citizenry. At this level,
17 the individual taxpayer is more likely to identify both the
18 educator and the local problem; for with all due respect to the
19 seat of our national government, a person residing in Oregon is
20 more apt to be motivated by pictures and statistics on Oregon's
21 problems than by those of the District of Columbia.
22 However, a single product charge application will not in
23 itself solve our dilemma, regardless of planned public educatior
24 Imp1ementation, on the federal level of related legislation,
25 such as a National Bottle Bill-- requiring beverage container
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1 deposits— will help increase consumer awareness to the issue of
2 reducing solid waste. In retrospect to our philosophy of gettinj
3 the greatest of benefits with the least in costs, the Oregon
4 Bottle Bill experience has be«n successful. In a Summary of
5 State Litter Laws Relative to Disposable Containers, prepared
6 by the Arkansas Legislative Council, October 12, 1973, the compiled
7 data read: "It was reported :hat by March 1973, the Oregon mar-
8 ket had experienced neither a decrease in sales nor an increase
9 in prices since the law had gone into effect." The benefits,
10 primarily of litter reduction, and increased consumer aware-
11 ness, are obvious; and as the report details, the benefits have
12 not required increased costs.
13 In response to the question on the social aspects and conse-
14 quences of product charge legislation, the price increase towards
15 the consumer is dependent upon his or her consumption. Intuitively,
16 the consigner who presently wantea more could feel more of a
17 burden than those who practice some forms of conservation and
18 recycling already; yet that would be their prerogative. However],
19 under existing law, only those consumers who reside in states that
20 have employed some relative form of legislation on solid waste
21 recovery and disposal requirclients have been able to accrue the
22 benefits. The Environmental Action Foundation estimates the
23 increased costs to the consumisr to be "about $8 per year for
24 the poorest families to $60 pi»r year for the richest."^
25 The Environmental Protection Agency also predicts an increase
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16
1 in employment if a national product charge program is created.*
2 This benefit alone, if announced to the general public, would
3 most probably bring in all the citizen support necessary for
4 the committee to recommend such legislative initiatives to Con-
5 gress. Unfortunately, it is once again apparent that only
6 those states now employing such requirements on solid waste are
7 allowing their citizens to reap the increased employment benefits.
8 The environmental impacts of such legislation can be viewed
9 in only positive regards. Obviously the more solid waste that
10 is returned to the manufacturing stage for recycling rather
11 than disposal into the environment will allow for a decreased
12 demand upon our dwindling natural resources and reduction of
13 the costs of disposal. While the trend towards such recycling i|a
14 becoming more accepted, progress at the state or local level is
15 excruciatingly slow. However, a national program of laws requir-
16 ing such environmentally sound practices would hasten our recovery
17 from a wasteful and ecologically disruptive society.
18 Another often stated concern relative to the product charge
19 is the degree of administrative costs. Through a five-year
20 phase-in period for charges and credits, and levying of the
21 actual product charge as near to the raw material stage as pos-
22 sible: we "will encourage wise resource use throughout the
23 economic system";^ allow easier and more efficient use of recycled
24 material; and minimize the administrative costs of the program.
25 In general, the costs are apparently greatly overshadowed
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1 by the benefits to both the environment and its populous. Yet
2 for all to appreciate and ga:Ln from these benefits, a national
3 program of solid waste management including product charge legi-
4 slation, must be established and administered at the federal
5 level, combined with state level public education.
6 MR. COATE: Thank you.
7 MR. BUTLER: Cur next speaker is Mr. Steve Hoke.
8 MR. HOKE: My name is Steve Hoke, and 1 too am a publile
9 affairs major from the University of Oregon. I am here represent:
10 ing the Survival Center at the University of Oregon.
11 In regards to the present system of solid waste management,
12 the Survival Center will present one basic contention against
13 the status quo, that of how producers are not presently provided
14 with any competitive incentive to minimize packaging and reduce
15 solid waste. Rather, under our current marketing, system, there
16 exists a competitive incentive to continually inadequately re-
17 design and increase the amount of packaging.
18 The Survival Center will further contend that the goal this
19 committee should establish in to bring about reductions in post-
20 consumer solid waste through placement of a product charge on
21 packaging materials.
22 Achievement of this goal, which will resolve those concerns
23 over the lackings of present policies, can be manifested through
24 national level product charge legislation, which places admini-
25 stration at the federal level yet allows for public education at
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1 the state level.
2 The key elements necessary for efficient and equitable impl
3 mentation of such a national program are:
4 1. A definition and identification of "excess;"
5 2. A determination of the range of packages that should
6 be taxed presently and in the future; and
7 3. A definition and identification of non-durable/durable
8 goods.
9 The Survival Center offers as a workable definition of
10 "excess", five basic questions for identification purposes:
11 1. Does the cost of the package exceed 25 percent of the
12 cost of the final product, taken into consideration that the
13 package may increase or decrease transportation costs?
14 2. Are package judgment criteria considered in relation
15 to possible alternatives for the product's package?
16 3. Is the resource used for packaging in scarce supply?
17 4. Is the packaging material environmentally detrimental
18 (non-biodegradable)?
19 5. What Is the degree of difficulty in disposal of that
20 package material?
21 In regards to the second legislative requirement, that of
22 determining the range of packages, or what product area that will
23 be initially covered by the product charge, the Survival Center
24 believes that non-durable goods would be an equitable and suf-
25 ficient beginning. Non-durable goods, such as paper products add
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L19
1 packaging, make up a significant proportion of the post-consumer
2 wastes while the economic impact of applying a product charge
3 on such materials would be received comparatively easier at firs
than if placed on durable goods. Present recycling centers
5 could be revamped to allow for the initial use increase while ot
ler
6 facilities are being constructed. Meanwhile, studies into the
7 economics of including durable goods under federal legislation
8 could be hastened with eventual adoption.
9 Therefore, this analysiu of what goods should be initially
10 covered mandates the need for that third and final key element
11 to national legislation, thai: of identifying and defining non-
12 durable and durable goods.
13 In actual application, Che method employed for levying
14 the product charge should be as near to the manufacturing proces
15 as administratively possible. The charge should be levied:
16 1. on non-durable packages by weight; or
17 2. where there is a high volume to weight ratio as in the
18 case of rigid containers, then the tax should be levied on a per
19 unit basis; and
20 3. a tax credit should be given for the use of secondary
21 materials and in relation to the recyclability arid reusability
22 of the product.
23 Adoption of such a national policy will accrue the additional
24 benefit of creating an incentive to the environmentally sound
25 redesigning of product packaging. Such redesigns will be influ-
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1 enced by Incentives for separation, increased recyclability,
2 and the allowing of the recycling tax credit.
3 The Survival Center further requests that the Committee
4 incorporate into its final report the findings from the Fourth
5 Report to Congress on Resource Recovery and Waste Reduction,
6 and also from House Bill 3182 of the 1977 session of the Oregon
7 State Legislature sponsored by Representatives Marx, Gustafson,
8 Kerana, Fadeley, Starr, Vian, Whiting and Senators W. Brown,
9 Kafoury, Wyers, and B. Roberts.
10 MR. COATE: Thank you. Is there any questions?
11 MR. BUTLER: Our next speaker is Mr. Brian Wilson.
12 MR. WILSON: Good day. I'm pleased to be here and I'n
13 glad you made It also.
14 As a fourth year economics major, and student at the Uni-
15 versity of Oregon, I wish to present toy ideas on product charge
16 legislation with respect to conventional economic theory. I
17 will apply my analysis to the specific issues of product charge
18 legislation and the macro effect on the economy.
19 Under our current system of waste collection and disposal,
20 the costs of these services are borne by the public without any
21 direct relationship to their use of the service and the quantity
22 of the waste stream generated. Further, and more Importantly,
23 the external or social cost of production of a goodiare not pai<
24 by the producer of the product, but rather by the public as a
25 whole, in the form of increased costs of solid waste management
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1 and an ever expanding mountain of garbage.
2 Given these two shortcomings of our economic system, there
3 results an inefficient allocation of resources and an inequitable
4 system of disposal costs. The inefficient allocation of our
5 primary resources is due to the fact that there Ls no pricing
6 mechanism to reflect the disposal costs of these valuable
7 resources. For those concerned individuals who voluntarily
8 reduce their consumption, reuse and recycle their post-consumer
9 wastes, the external costs are even higher.
10 For these and many other reasons, which I will allude to
11 later, I support the implementation of a product charge legislation
12 on a national level. In far too many instances, packaging is so
13 excessive that the package accounts for more of the total cost
14 to the consumer than does the good itself. As a result of the
15 levy of a product charge tax, the input quantity and cost of the
16 package into the final market price of the product may in fact
17 be lower than the tax levied on the package, resulting in a
18 lower priced product even after implementation of a product chaxjge
19 tax.
20 An extreme example of this would be elimination of the package
21 completely, which is becomirg increasingly popular in Oregon sujer-
22 markets. Bulk foods are offered at a significantly lower price
23 than the comparable foods which are packaged.
24 Implementation of product charge legislation on a national
25 level is essential as it will serve to minimize the expected
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22
1 economic dislocation. Given the structure of our production,
2 distribution, and marketing systems, investment and conversion b|y
3 industry will be stable and could be phased in gradually. For
4 example, the product charge could be phased in over a five-year
5 period, with 20 percent levied each year.
6 In regards to social impacts of such legislation, obviously
7 all sectors of society would be effected. Consumers would shift
8 their consumption patterns, and industry would suffer economic
9 dislocation in some sectors. However, I believe that there is
10 a misconstrued belief that environmental policies and social
11 policy concerns are mutually exclusive in their goals and
12 operations. On the contrary, I believe that we can implement
13 both environmentally sound and economically stimulating legis-
14 lation. The Oregon Bottle Bill is an excellent example. Employ-
15 ment has increased, litter and solid waste have been dramatically
16 reduced. A national Bottle Bill would further increase employ-
17 ment with only a small dislocation factor, with little or no
18 administrative costs after initial implementation.
19 Inevitably, some sectors of industry will suffer dislocatiojn.
20 However, I feel that we must suffer through some short-term
21 dislocation now, or face severe and prolonged economic chaos in
22 the long run if we fail to take action now on these pressing
23 issues.
24 There are many different possibilities for the use of the
25 revenues collected from product charge tax levy. My most important
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23
1 consideration would be to provide grants and/or low-interest
2 long-term loans (to aid in Industrial conversion) to those sec-
3 tors of the economy that suffer significant dislocation. Other
4 possibilities for use of these revenues include grants and/or
5 low-interest long-term loans to pilot recycling projects.
6 Revenues could also be used for improvement of solid waste man-
7 agement at the state and local level. Under no condition should
8 such revenues be transferred to the general fund, as the solid
9 waste problem is in dire need of funds for improvement.
10 it is my firm belief tfiat the benefit to society as a whole
11 by far outweigh the costs incurred by the Implementation of pro-
12 duct charge legislation. W«> have done enough research, the
13 problem is under our sinks tend piling up on our back doorsteps,
14 the time is now to act.
I
15 Aside from product charge legislation, there are alternativje
16 if not supplemental actions that can be implemented to further re-
17 duce environmental degradation and the costs of solid waste
18 management. Federal guidelines on packaging design regulation
19 would effectively eliminate many of our current problems, and
20 at the same time would have relatively low administration costs.
21 There would be no direct governmental intervention in the distri-
22 button and marketing systemii. Packaging regulation guidelines
23 could promote long run shift: toward a standardization of containers,
24 which would be 100 percent recyclable, saving energy and resour-
25 ces, and aiding in the simplification of the actual recycling
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1 process. A final, yet severe alternative would be the banning
2 of certain unwanted products. Bans are to be used with extreme
3 selectivity, as they invoke severe economic dislocation, and
4 are seldom Justified. However, another outstanding example
5 that we have here in Oregon is the ban on all beverage container]*
6 with pull tabs or detachable parts.
7 That basically is the body of my testimony and I'd like to
8 refer to a few pointsmade earlier by other people speaking and
9 in specific, Mr. Keesee of Georgia-Pacific stated that the dis-
10 poser of a product and many other people, there was a lot of
11 discussion on this, the disposer of the product should incur the)
12 full cost of the disposal. He alluded to the fact that in this
13 area, we have somewhat of a system that functions along those
14 lines, and then he went on to— maybe I'm unclear on this, but
15 I got the feeling he. associated this type of solid waste manage-]
16 ment with a reduction in our garden and newspaper, by-products,
17 and the connection between this is vague, if any at all, and wha|
18 is more important, we are talking about excessive packaging and
19 the combined— when you look at garden waste and newspapers,
20 they do not equal half of what packaging does in the solid waste]
21 stream, so, therefore, we are not getting to the point of the
22 issue here today.
23 Also another point, a representative of Oregon Industries,
4 I believe— I didn't catch his name— referred to the economic
25 of a tax system and that tax would be levied as close to the
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source of production as possible, and he seemed to put the idea
across that not only would that tax be passed on to the consumer
which obviously it would be, that is just a fact of the way our
system operates, but he seeraad to imply that not only would this
tax be passed on to the cons'imer, but it would be passed on and
multiplied at every level of-- maybe he's getting his cost of
handling mixed up with his economic theory, but it's just not so.
We were talking earlier about the severe hardship suffered
by retailers in regard to Bottle Bill legislation. What I do
10 not understand is the fact that under the provisions of the Oregjon
Bottle Bill, there is a provision that a redemption center can
12 be set up by individuals or the state and if it's severe hardship,
13 why has a redemption center not been set up? I look at the pos-
14 sibility for a redemption center being extremely-- we could set
15 up a redemption center further stimulating other sectors of the
16 economy and this would lead to increased employment and also
17 just increase recycling and reusability of the goods. That's
18 all. Thank you. Do you have any questions?
19 MR. FIEKOWSKY: You identified yourself as a fourth
20 year economic student and
21 MR. WILSON: Highly qualified.
22 MR. FIEKOWSKY: ---intermittently through your statement,
23 you made references to exceiisive packaging. What is your econ-
24 omic definition of excessive; packaging? What are the character-
25 istics?
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1 MR. WILSON: Well, I don't think I've come across a
2 economic definition of excessive packaging and right now, I don't
3 think I could answer that question. It just doesn't come to
4 mind. I'm kind of on the spot and I don't know how to answer.
5 MR. FIEKOWSKY: Don't we need some criteria if we are
6 going to evaluate policies?
7 MR. WILSON: Oh, yes, and I believe earlier in testimojny
8 by Steve Hoke, we outlined some possibilities for what we would
9 consider to be excessive.
10 MR. FIEKOWSKY: Well, that's quite true. You say you
11 think product charges will reduce excessive packaging, but since
12 we don't know what excessive packaging is, we are not going to
13 be in a position to evaluate a degree with which to cut the
14 excess.
15 MR. WILSON: Correct. I agree with you completely.
16 I just think that's one of the provisions we should incorporate
17 into this legislation. Before you can address a problem, you
18 have to define what the problem is, obviously. I mean, that's--
19 it seems obvious to me. Maybe I'm just going around in a circle
20 here.
21 MR. FIEKOWSKY: I'm glad it seems obvious to you. I
22 had noticed that this kind of tax has been supported on the grounds
23 that it would reduce excessive packaging. I think one of the
24 illustrations we-- you cited were some canned fruit where the
25 container cost more than the contents. Now, obviously, if I
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1 want fruit out of season, I'm going to have to have it in a con-
2 tainer and it may very well be that the container is worth more
3 than the contents, but if I value the contents at a total of 11,
4 one for the fruit and 10 for the container, there is no waste
5 whatever. This is how I get my fruit.
6 MR. WILSON: Right.
7 MR. FIEKOWSKY: I put a production and I'm going to
8 raise the cost of my food.
9 MR. WILSON: You are also going to cover the cost of
10 the disposal of that product.
11 MR. FIEKOWSKY: Th«>. question I would ask you then is,
12 how do we translate the taxed on the container into a charge for
13 the disposal of the can?
14 MR. WILSON: This question has obviously been raised
15 several times, I think, earlier in the day.
16 MR. FIEKOWSKY: Is the fact you are going to justify
17 the user charge as a measure of the resource cost: imposed by the
18 consumer when he disposes of his empty frnit can that in fact
19 there has to be some direct connection in the behavior of the
20 consumer between the taxes paid and the disposal of the can?
21 In other words, it ought to t>e free for him to dispose of the
22 can after he's— you've collected as a charge into the hands of
23 the agency that's going to remove and dispose of it?
24 MR. WILSON: You are saying there should be some effec
25 on the behavior of the consumer? I'm not necessarily saying
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1 MR. FIEKOWSKY: I don't know whether there will be.
2 MR. WILSON: Also the EPA estimated there was probably
3 one-half to maybe two percent at the highest increase in the
4 cost of goods to the consumer if this legislation was in fact
5 levied. So, therefore, I don't expect that to produce a large
6 shift in the consumption of goods, but it merely pays for the
7 cost of the disposal of the goods and the consumer may not inner-
8 ently choose when he's buying that goods that maybe he shouldn't
9 buy this because it's more expensive, so, therefore, maybe some
10 idea such as labeling how much the package does cost on the pack-
11 age, maybe that would be a good idea.
12 MR. FIEKOWSKY: Isn't the ideal solution of the probleb
13 in fact when the consumer of the fruit has finished his consump-
14 tion and has the can to dispose of, charge him the cost of dis-
15 posing that can.
16 MR. WILSON: Why should you charge him?
17 MR. FIEKOWSKY: That's a user charge. Now, he wants
18 the service of disposing of the can. He should be required to
19 pay the cost of disposing of it. That occurs after he's finishe|d
20 his consumption.
21 The question I've been asking various proponents of this
22 user charge is, how do you connect the imposition of the tax on
23 the manufacturer of a tinplate that goes into the manufacture of
24 the can into the recognition or assumption by the consumer of
25 the cost of disposing the can? He's paid the tax in advance.
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3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
129
He now has finished his cons-Jinption. The can still has to be
disposed of, so how has he prepaid for disposing of it if after
he has paid his tax, user charge, a need in resource cost of
disposing of the can remains. I'm asking the proponents to
describe a functional way to collect the tax and in fact reimburse
the agent who is going to have to dispose or recycle the can
that would make it a user charge.
MR. WILSON: It did clarify an issue for me, though,
because we were looking at this as a product charge and also
referring to it as a user charge in the disposal of solid waste.
Well, it seems to me now, working this through, they are one in
the sane. Am I correct? We are talking about the user who is
disposing of his product, paying for the price of his disposal.
Is that not what we are proposing here?
MR. FIEKOWSKY: Well, you are having to pay a tax. A
payment of the tax in fact does not facilitate the accomplishmen
of the disposal. That would be the user charge.
MR. WILSON: I just assumed rather than have your tin
cans piled up in your living room, you are going to
MR. FIEKOWSKY: And you have to pay this cost whether
you prepaid it or not?
MR. WILSON: I guess so. I'm confused. Is there any
other questions?
MR. COATE: Thank you very much.
MR. BUTLER: Our next speaker is Mr. Sam Bowman rep-
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1 resenting the Glass Packaging Institute.
2 MR. BOWMAN: Thank you Mr. Moderator and members of
3 the Resource Conservation Committee. I appreciate tge appearSKV
4 very briefly to offer a quick statement. I am Sam Bowman and
5 I am director for the Western States Trade Association of all
6 manufacturing of glass bottles and jars which we have some 18
7 factories on the coastal states.
8 I want to refer for your record to the statement made by
9 Senator Packwood this morning when he referred to findings anno-
10 unced by a government agency on a subject which is covered by
11 your agenda.
12 I want to read into your record our comment on this comment
13 on the report of the Government Accounting Office Study in this
14 recent report published by the United States Government Accounting
15 Office, GAO, on the effects of a national-- that it is a near
16 redundancy, that it includes no new information and the GAO acknaw-
17 leged that it failed to consider alternative systems which would
18 not be destructive economically and otherwise and still obtain
19 beneficial results.
20 We had hoped that the General Accounting Office report would
21 be a balanced objective report. Instead, they made little or no
22 independent investigation and even admitted by noting that "We
23 did not attempt to generate our own data." The report was per-
24 formed inhouae and the authors commenced with an initial fatal
25 mistake in that to our knowledge, they did not go to industry to
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1 obtain accurate baseline information from which they could then
2 construct a conclusion according to their own preference. Furthir-
more, when the Congress created the Resource Conservation Commit'
tee through the Recovery Act of 1976, it did not see fit to inclide
the General Accounting Officu as part of that committee, nor to
6 our knowledge did the Congreus authorize the GAO study. That's
our comment on the validity of that study. Thank you.
8 MR. COATE: Any questions?
MR. BUTLER: Our last scheduled speaker is Mr. Thomas
10 Ethan of the Northwest Food Processors Association.
11 MR. ETHAN: Good afternoon. I'm Thomas M. Ethan and
12 I'm the Assistant Manager of Technical Programs. The company I
work for is the Trade Association. By the way, 1 hope you realie
14 that normally the weather in Oregon is rain. We don't see the
15 sun very often.
Thank you for the opportunity to speak here today.
First, I would like to address the remark that was made tha|t
18 Nancy Fadeley had said that at times, the cost of a contents of
a can of fruit may exceed-- may be exceeded by the cost of the
20 container. After consulting briefly with one of my industry
21 representatives, we have arrived at a cost of seven to eight cer
22 per can for a 310 and about 25 to 30 cents for a number 1010.
23 We are not aware of any product which is worth less than seven
24 cents per can and, in fact, L would like to request this be sub-|
stantiated in some way in writing from the person who did make
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1 that comment. I'll speak with him afterwards.
2 Our Association feels this topic should be very thoroughly
3 discussed and analyzed. We feel there are a number of problems
4 which it attempts to address and may not necessarily solve.
5 We believe that increased levels of resource recycling can
6 be achieved. We do not feel that imposition of a tax is a correct
7 way to accomplish it. Let me go through some ideas here and I
8 must admit I'm speaking somewhat extemporaneously because I just
9 found out this morning, I was going to present some testimony.
10 First, the effect of a tax. According to one of my repre-
11 sentatives in Washington, D.C., a lobbyist for our national corp^r-
12 ation, the Environmental Protection Agency demonstrated to him
13 writing that the Increased cost of the price— or the increased
14 price of canned foods would be about 4.2 percent. The industry
15 average pre-tax profit on sales is about 4.4 percent. Therefor !,
16 we feel this will be— this increased cost will be reflected in
17 an increased price. Probably somewhat proportional to or maybe
18 100 percent of the increased cost of producing the item. We
19 feel that probably the people it is going to impact most directlr
20 are those who are least able to afford it, those who are on fixei
21 annual income, those on welfare, those who have relatively low
22 income. Anytime you hear a request for the fireman's relief aid
23 or fireman's relief fund or some of the, for example. Goodwill
24 Industries, if they are doing the food distribution, the first
25 thing they ask for is canned food. They don't ask for frozen
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1 food. They want either canned or dehydrated food. We feel some
2 of this is going to be reflected In very heavy Impact In the
3 optional spending monies of these people. We feel that the avail-
4 ability of perishable commodities is going to be directly impacted.
5 You spoke to your willingness to spend maybe considerably
6 more for a product out of season. If we are in a position where
7 we cannot directly pass on the increased costs, it may impact on
8 the availability of food In the off seasons. I'll speak to this
9 In just a moment in additional detail.
10 The intrinsic qualities have been spoken to. What does the
11 package Itself, what function does it have? One of the primary
12 problems that we have found, and I'm sure you've heard this 2700
13 times before, is pilferage problems. You have to be able to
14 package, you have to be able to unltlze, you have to be able to
15 transport the product. We feel these things are now self-evident.
16 The objectives of the legislature are desirable. However, we do
17 feel that the product itself does form and perform a usable func|-
18 tlon particularly in the food processing industry. Everyone is
19 afraid of problems of botullnlfc toxin. You would have to get in
20 a situation where there Is a food sanitation problem. We feel
21 these things can be more completely addressed by properly packa-
22 glng food and that Includes sans, plastics, paper packaging.
23 We feel that in fact this tax may increase the volume of waste
24 of food if food processing is eliminated as It would seem to be
25 the ultimate goal.
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1 Take, for example, the amount of corn that's processed in
2 the Northwestern United States. We are looking at several hundr|e
3 thousand tons of husks and cobs which have to be disposed of if
4 we are in fact going to eat the corn. The question is then, do
5, we ship fresh product via the transportation systems throughout
6 the United States and then have everybody dig a hole in their
7 backyard where they put in the cobs, et cetera, and allow them
8 to decay or do we send them to the city and allow them to take
9 care of the entire problem or do we localize the problems, as
10 the food processing industry has, and feed it to the cattle?
11 That way we not only get the corn, we also effectively utilize
12 the cob, the husk, the silk and not only for corn, but for beans],
13 peas and other commodities.
14 Senate Bill 650 in California was spoken to earlier this
15 morning. According to one report I read, 63 percent of the income
16 would go for collection and dissemination of the funds. If you
17 take that against the $17 million expected revenue that doesn't
18 leave an awful lot of money to take care of the disposal and
19 litter problems of the State of California.
20 In summary, we feel-- Northwest Food Processors Association
21 feels that the consumer should pay directly for disposing of his
22 waste by paying the actual disposal charges at the time the gar-
23 bage is collected and gotten rid of. Thank you.
24 MR. COATE: Thank you.
25 MR. ROBINSON: Most of the previous studies on this
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product charge assuming the design similar to Senator Sart's bill
indicates that price increases would result from such a product
charge would be on the order of a maximum of one to two percent,
although four percent might be— might in fact occur. Do you
really think that a price increase of that magnitude is liable
to eliminate packaging and create some of the catastrophic pro-
blems that you seem to be alluding to?
MR. ETHAN: I don't think I'm going to allude to the
elimination of packaging, but I do feel it is going to put a
10 pretty severe crimp in the industry. I think that the tax is
11 addressing the problem backwards like the example that was alludjed
12 to earlier, like charging the miners from the earlier pollution
13 problems.
14 MR. ROBINSON: You are food processors?
15 MR. ETHAN: Oh, yes, we are food processors.
16 MR. ROBINSON: Have you done any research to the more
17 precise effects of the impact on the industries that you are
18 concerned about? Do you have any details you might be able to
19 offer us to help us out?
20 MR. ETHAN: Not at this point in time. If you need
21 something specifically, I believe Jack Cooper of National Canner
22 Association specifically spoke to this.
23 MR. SMITH: You said something that seemed to contradi :t
24 some statements that were made earlier in terms of the way in
25 which prices are passed on from the manufacturer to a wholesaler
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1 to a retailer and to a consumer which your statement. I think,
2 suggested that the mark-up would not be, in fact, a multiple of
3 the charge, but would be a most equal charge. Did I mis Inter prejt
4 you or would you like to expand on that sort of comment? For
5 example, if a one-cent-a-can charge or half-a-cent-a-can charge
6 were placed at your level, would that be reflected to the consumjer
7 as a one-half-cent-a-can increase in price or would it be one,
8 two or three?
9 MR. ETHAN: It depends on how many steps that product
10 has to go through, but if the food processors pay half a cent a
11 can, I will reflect that as a cost to the wholesaler or distribu-
12 tor or broker.
13 Now, depending on how the broker handles the food chain at
14 that point, whether he goes through one or two more steps before
15 it gets to the retail market, it may in fact be more than a half
16 a cent a can. In fact, I would say it would most likely be more
17 because-- he would be starting at 44 cents a can for green beam,
18 so he would— he's going to make-- therefore, his increase is
19 going to be slightly more.
20 MR. SMITH: Has your industry actually done any concre
21 study of the impact of your raw material prices on final consume^
22 prices to indicate that this would in fact take place?
23 MR. ETHAN: Raw material prices?
24 ' MR. SMITH: Your can stock prices. Have you actually
25 studied this or is this really more of a personal intuition on
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your part?
MR. ETHAN: At this point in time, it Ls partial intu-
ition and partially study because we do know what most of the
costs are as associated with the cost of producing and processin
food and making it available to the public.
MR. SMITH: In the past, you have obviously had a number
of price increases on the cans that you use.
8 MR. ETHAN: Right.
9 MR. SMITH: Cans arid bottles that you use. Have you t
fact conducted any study or do you have any direct knowledge of
11 the degree to which these price increases to you were reflected
12 ultimately at the consumer's level?
13 MR. ETHAN: Our association does not. We are a original
14 association, but I could get that information, I'm sure, from
15 either
16 MR. SMITH: Jack Cooper would have that?
17 MR. ETHAN: He should have.
18 MR. SMITH: Seems l:o me that particular question is a
19 directly researchable question and
20 MR. ETHAN: It should be, but, again, you must realize
21 as relatively significant elasticity that you are dealing with
22 in the price of many food products, that's why a lot of the food
23 processing industry is having such a difficult time keeping up
24 with the increases in the pr:.ces of both labor and raw products.
25 MR. SMITH: Thank you.
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1 MR. COATE: Thank you very much.
2 MR. BUTLER: I'd like to open the floor now to any
3 statements anyone would like to make. So if you have a statemenjt
4 to make, would you please come forward and please state your
5 name and the organization you represent.
6 MR. POWELL: My name is Jerry Powell. My comments are
7 very short and specific and it's not about the total thing you
8 were considering today, but it's one short thing I'd like to
9 address, something I think Mr. Smith and Mr. Robinson have a
10 concern about that has to do with testimony earlier from the
11 Weyerhaeuser and what I do for a living a^what people in this
12 building do for a living.
13 I'm a little junk hauler, and recently we got-- there is
14 a bank here in town and we got-- we hauled part of the paper
15 Out of their recyclables and we got beat out of that account by
16 a company, so be it. There is a thousand people that work in
17 this building, 1,000 desks In this building are resource separa-
18 tion, paper recycling, and there is a paper company that hauls
19 that paper out. Now, where you work in Washington, D.C. or be
20 it Seattle or where ever, you will or you do now have the same
21 type of system offered to you and they are, again, a local company.
22 I mean a company will haul that out. I'd like you to note that
23 the person that beat me out of the account is the person that
24 hauls paper out of this building, the person that hauls paper out
25 of where you work, be it Seattle or Washington, D.C., is Weyer-
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haeuser and I would ask the question specifically is, if we see
the testimony-- which I got the impression the testimony basics
L39
Lly
said if the growth of secondary fibers will put a push on the
system which will create more slash in the forest, then why is
it the case only in the Pacific Northwest this most aggressive
paper secondary fiber pushed and high-grade papers putting out
by Weyerhaeuser? Actually, I guess I'm addressing a question at
an individual but through you, and I appreciate the opportunity
9 to make that comment.
10 MR. COATE: Bob Winter, would you care to reply to tha
11 MR. WITTER: That'll kind of like a wife-beating question
12 in the sense of regardless of the manner of how you answer it,
13 you are assumed to be guilty. But I think it's the kind of guil
14 that perhaps you and your panel are seeking.
15 if ve and other paper companies in the United States are
16 voluntarily, through the economic incentives that exist now,
17 aggressively pursuing the recycling of paper products, then it
18 raises to mind whether it makes sense to try to impose a govern-
19 ment system to do the same thing that we are apparently, according
20 to the last witness, are already doing. I would point out that
21 that market: allocation of where we express our interest is efficL
22 ent. Whereas one which is arbitrarily imposed and dislocates
23 one form of product for another form, one that causes the use of
24 non-renewable resources as opposed to renewable resources in
25 this case, one that imposes a very costly set of government
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1 agencies to administer and one in which almost sanctions inasmuch
2 as I've paid my license to throw something away anyway I want to/}
3 as opposed to giving the incentive to recycle has got to be wrong.
4 I personally believe that we can do both. We can, as we are now,
5 aggressively seek the recycling of paper products while at the
6 same time clean up the forest floor. But if that same market,
7 because of the product tax on renewable resource fibers is fore-
8 closed from the consumer because of the overall diminishment in
9 market, then you end up with the worst of all worlds. You have
10 diminished the market in total. You have loaded governmental
11 costs on top of that in the process and you have less use of a
12 waste product from the renewable resource of our forests and
13 third, you've used a nonrenewable resource perhaps for an altemja-
14 tive.
15 The gentleman is correct. Most of us are very aggressively
16 pursuing the use of recyclable fibers. We are also very aggres-
17 sively pursuing the use of the waste streams that are already in
18 our primary manufacturing processes and those waste streams are
19 very, very large, as I was attempting to demonstrate, and they
20 impede regeneration and, therefore, long-term timber supply, as
21 well as being very anaesthetic on the ground.
22 MR. ROBINSON: The non-renewable resources you were
23 referring to were
24 MR. WITTER: If the tax is applied the way in which
25 it's proposed now, it would be very possible to see the packaging
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1 disproportionately move toward non-renewable resources as opposed
2 to renewable resource material. Granted, you can't change the
3 configuration of what's been proposed at this point and perhaps
4 solve that problem, but I don't think you would want, for exampl
5 more oil-based commodities in a long-term sense used for cheaper
6 cost renewable resource commodities particularly if the latter 1
7 waste product as opposed to primary.
8 MR. ROBINSON: You are essentially talking about sub-
9 stitution of plastics for paper?
10 MR. WITTER: Right. But I think we need to emphasize
11 that in both cases what we are talking about in the manufacture
12 of most pulp and paper, certainly in the Northwest, to the tune
13 of about 90 to 95 percent is laade from waste streams from the
14 forest floor, not from the gr.ide material, round wood type material
15 that would be utilizable for boards and plywood and that's rela-
16 tively true in other forest regions. It may not be in the tremen-
17 dous volume of old, over-mature rotten material, but it is in
18 thinnings, tops, limbs, that i:ype of thing, BO those are waste
19 streams and the question is where are you going to waste them
20 not whether you are going to waste them if you don't use them fo|r
21 pulp and paper.
22 MR. COATE: Thank you very much.
23 Yes sir?
24 MR. McDUFFEE: Ray McDuffee, Lincoln County citizen.
25 I came up here to ask you a question about the term excessive.
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1 I felt, as I sat over there and listened to the rather confused
2 back and forth between two economists that we never arrived at
3 a definition of excessive. Does it mean you have too damn many
4 wrappers of paper around a product or does it mean that your
5 package costs more to package as it were than it should? What
6 were you talking about, sir?
7 MR. FIEKOWSKY: I'm glad to give you what I think
8 economists would call excessive waste and that is when the coat
9 of the material, in this case packaging, whether it's due to
10 too many layers of wrapping or an inappropriate grade of wrappinjg
11 costs more than it's worth in the sense that customers in the
12 long run are not going to be willing to pay that price and there
13 is a wasted resource in which shows up in this case in lower
14 profits of the seller, so you always try to package the goods in
15 a way that appeals to his customers and what I was asking about
16 was my suspicion that many of the proponents of the product
17 charge are proposing a subjective value-- they think the number
18 of layers of wrapping may be excessive or that the quality of
19 the wrapping may be excessive for their taste and this could verjy
20 well be in a market, but the economic definition is whether or
21 not on the average people who are buying this product are willing
22 to pay the price of the resource cost of the goods.
23 MR. McDUTTEE: Well, our mutual friend who stood up
24 here, I thought, had perhaps two things in mind. One was not
25 definite: The can costs more than the contents, subject to argt
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1 ment. But, of course, this might be considered an excessive cos:
2 However, I felt he was referring to, and this is the real reason
3 I came up here, he was referring to the fact that it is entirely
4 possible to sell many products in a package which will cost less
5 than it now costs. In other words, somebody-- Suppose you walk
6 in as you do or you used to— I haven't been in Europe now for
7 about since last spring-- but it used to be you went down to the
8 street where you bought your fresh fruit and vegetables. They
9 wrapped them up in a newspaper and that was all the packaging yoji
10 had. You went to a market someplace— well, in France-- and
11 you said, 'Well, I want to buy a loaf of bread.' So you went in
12 and you got a loaf of bread. You picked it up In your hand with
13 out any wrapping whatever. You saw them, you know, traveling
14 along the street on a bike wii:h a loaf of bread fastened on the
15 back with no wrapping. In England, you didn't buy any wrapping.
16 Any packaging from that term :Ls an excessive packaging which is
17 what I think he meant. Now, do you agree this is excessive
18 packaging if you can do it th« other way?
19 MR. FIEKOWSKY: Because there are many qualities to
20 the purchase of a loaf of bread, one might be you are finicky
21 about the number of hands that: have touched it. I think maybe
22 the question you've raised made by the gentleman speaking before
23 I'd like to ask him, is it hin opinion that members of this indu^
24 try are oblivious to the cost of packaging, that it's really
25 kind of irrelevant to them whether a can or container costs 20
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144
1 cents or five cents or— I think they are very sensitive to the
2 cost and in fact, they probably minimize it, but I'd like to have
3 him speak for himself if he is here.
4 MR. ETHAN: The food Industry has certain standards
5 that are established by a number of organizations including Food
6 and Drug, U.S. Department of Agriculture, the State Department
7 of Agriculture and there are many cases where we have no choice
8 but to follow the federal guidelines in packaging requirements.
9 I'm not familiar with the standard requirements for the bread
10 industry, but I do know that in the fruit and vegetable and potajto
11 industry, we do have very stringent requirements for packaging
12 food.
13 The question often arises in frozen foods, 'Why do you need
14 to have a very lightweight cardboard surrounded by a waxed paper
15 which is sealed?' That's so you don't get dehydrated food.
16 MR. FIEKOWSKY: It was his question. Does that make
17 your point for you? We are very cognizant of the problems rela-
18 tive to the price of the cans or the other wrapping and we are
19 a little uncomfortable, by the way, with Minnesota's laws.
20 MR. COATE: Thank you very much.
21 MR. McDUFFEE: I might just say that basically this is
22 not the answer I thought the young man was asking for. He was
23 saying is it not possible within the whole realm of the laws to
24 put packaging on a less expensive basis? In other words, instead
25 of having a double wrapping for many products, why can't you have
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Just a single wrapping instead of getting Post Toasties or Corn
Flakes in a double-sealed package, why can't you have a single
sealed package, pick it up arid put it in your bag and take it
away with you? Now, this is what he meant, I think. That would
5 be
6 MR. ETHAN: If I ms.y make a final comment on that.
Again, the food industry is faced with very stringent sanitation
requirements. Now, it's possible that a person could put out
Post Toasties In a single wrapped item, but for the majority of
10 canned or frozen, especially when you get into canned items, you
11 just don't-- I'll put it another way. You need to have the
12 durability of the additional packaging at times in order to get
13 it to the ultimate consumer with the least amount of food waste.
14 Food is something that is a pretty poor thing to end up wasting.
15 It's pretty important to us.
16 MR. COATE: Thank you.
17 MR. WILSON: I would like to address the Treasury
18 representative to try and clarify a point I'm confused on and
19 that is what the object of your questioning in regards to the
20 tax levied and the disposal of the product.
21 Now, are you trying to get to the point that that tax we
22 are talking about, that tax covering the cost of disposal so,
23 therefore, there should not be any other agency&ave to come
24 along and also pay them to dispose of it?
25 MR. FIEKOWSKY: Let's make a very simple numerical
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146
1 example. The can and its contents cost 10 cents to produce.
2 The product charge is imposed equal to one cent because it's
3 been established that on the average in the United States the
4 c cost is a cent to-- the purchaser pays 11 cents for the can,
5 presumably it's prepaid. He finishes consuming the contents
6 and here is a can that has to be disposed of. Either he will
7 pay a tax of one cent to dispose of it or somebody else will.
8 If the one cent was a prepayment, a prepayment of the charge,
9 the Federal government would collect the tax and somehow get
10 it into the hands of this person out here who is going to spend
11 a penny's worth of resources to dispose of it, and the question
12 he's asking people is, how do we feasibly make this connection?
13 How do we get the tax collected at the point where the can or
14 the tinplate is produced into the hands of the garbage collectorjs,
15 let's call them.
16 MR. WILSON: I was confused earlier or obviously over-
17 qualified as an economist, so what I was talking about, I said
18 that the tax is passed on to the consumer, but that is not mulct-
19 plied. I've recently been clarified as to the point that it is
20 otherwise. It's not maybe multiplied, but it does in fact increase,
21 so any way you pay this tax, the tax is collected and then you
22 have disposal on the other hand. And
23 MR. FIEKOWSKY: The point really is, if you don't have
2^ this, you pay your taxes and this way you pay for a service you
25 are going to get. It really isn't a user charge; it's just an
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L47
ordinary tax just like there is a tax on cigarettes. We can thiak
of all kinds of reasons why we think there ought to be a tax on
cigarettes, but none of then would be a user charge.
MR. WILSON: You are saying there is no way the revenujee
collected are going to be additionally allocated to the state
and local agencies?
MR. FIEKOWSKY: No. I haven't said there is no way.
I Just simply asked the proponents of the tax to suggest ways
in which this could be feasibly done. That's all.
MR. WILSON: Isn't that the point we are arguing around
is, how is that tax actually going to be passed to actually cover
the cost of collection?
MR. FIEKOWSKY: That's right.
MR. WILSON: I don't have a schematic diagram of the
channels we send the funds through, but we've talked to somebody
from the Municipal, whatever it is, Solid Waste Management and
they seem to have no qualms about being able to distribute the
funds on a state level. It looks like the argument is running
loose and people are getting nervous.
MR. FIEKOWSKY: No. The technical question is-- all
we are doing is collecting the tax, getting it down to the state
or local government and then distribute it to the trash collectors
who, in fact, carry out the service of disposing of the product,
and each step of the way there are these problems that have to
be resolved if this is to be a user charge and not the ordinary
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L48
1 tax of revenue sharing.
2 MR. WILSON: So Chen maybe the original tax that's
3 levied by the time it is allocated to the source where it will
4 be disposed of is not a covered cost of disposal.
5 MR. FIEKDWSKY: It may be revenue sharing.
6 MR. WILSON: I'm trying to get this clarified. I came
all the way from Eugene. I'm trying to get a little more exposure
to the issue, that's why I'm standing here trying to get it
clarified. Thank you very much.
10 MR. BUTLER: Yes, another statement.
11 MR. BROTT: I'd like to offer the food industry spokesl-
12 man, in talking about the California Bill 650, having administra-
13 tive process of 63 percent administrative costs associated with
14 California's SB 650 which was the anti-litter bill, and my dia-
15 cussion with the'State Solid Waste Commission, which is putting
16 together the implementation and spending of this money and is
17 anticipating spending approximately $8 million on litter, $4
18 million on resource recovery and about $4 million on recycling
19 out of the 16 or $17 million generated which doesn't leave more
20 than the usual one and a half to two percent for administrative
21 costs associated with this sort of money.
22 This is Senate Bill 650 from California and this is Sectiot
23 6805.2 and it reads: "Five percent of the state litter control,
24 recycling should be expended by the board and state and local
25 agencies for one: research and administrative support for littejr
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L49
1 collection, litter receptacles-- and energy recovery from waste
2 Two: maintenance of the solid waste management plans required
3 by Section 66780.5 and three: surveys of litter and solid waste
4 and composition of rate of deposit." I don't-- I haven't read
5 the bill completely, but it also does provide for operation and
6 capital expenses for recycling programs and being involved in
7 recycling, there is approximately $4 million available to recycling
8 permits and to capital permits in addition to that: and I'll have
9 i the exact details in my written presentation.
10 MR. BUTLER: Are th
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1 resenting the cost of disposing of materials once approved is
2 going to be a small part of the whole, that it's not going to
3 have that important of an effect. It might raise food prices
4 one percent. That's obviously not going to have a quantitative
5 effect.
6 MS. LEE: Well
7 MR. FIEKOWSKY: It would have a cost, and I would
8 expect he would not print less news or carry fewer ads, and I
9 doubt that a slight Increase in the price of The Oregonian would
10 affect the volume of issues each day, daily volume. You will
11 still have approximately the same amount of paper used.
12 MS. LEE: In that particular Instance Is what I might
13 imagine the revenues might go into, for instance, stepping up
14 recycling of newspapers, but there may be, do you not think,
15 Instances in which greater efficiencies could be achieved and
16 the tax would be an incentive to do it?
17 MR. FIEKOWSKY: It's truly a user charge. I'm afraid
18 I don't see the connection. With the user charge, we are dis-
19 posing of the solid waste and solid waste that we dispose of
20 could have been originally manufactured recycled material or
21 virgin material. It's the package that has to be disposed of.
22 MS. LEE: If that package is recycled rathjer than
23 landfilled, then we create source reduction. Then that's
24 MR. FIEKOWSKY: It should be burled or it should be
25 recycled or it should be burned, whichever is cheaper.
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1 MS. LEE: And this provides the kind of incentives
2 that will stimulate increased recovery in the state.
3 MR. FIEKOWSKY: Inherently, I don't think it does.
4 MS. LEE: I still con't understand what you don't undejr-
5 stand, but I think I've said all I can about it.
6 MR. ROBINSON: We should point out that the Resource
7 Conservation Committee is a means of getting as much information
8 from the public as possible. We have, by no means, agreed upon
9 any one position and that's the reason we are here. So anything
10 we can get from here on is appreciated and we'll all go back to
11 Washington, D.C. to argue about it.
12 MR. BUTLER: Would anyone else care to make a statemenjt?
13 If not, Mr. Coate.
14 MR. COATE: I just want to personally thank each of
15 you for taking your time to come here today and on behalf of
16 Barbara Blum and the Committee, thank you for your time. Sharing
17 your time is one of the most important things you can do, and
18 I think we've all learned a little bit here today and we'll take
19 it back and, as the previous gentleman said, we'll argue about
20 it from here on, and I reall> feel the comments you have made
21 will have an impact on that c.iscussion, so thank you again.
22 Thank you again and we'll see you another time here in Oregon.
23
24 (PROCEEDINGS: CONCLUDED)
25
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CERTIFICATE
STATE OF OREGON )
S3.
County of Multnomah )
I, Frank R. Resales, hereby certify that I am a
certified court reporter, that I reported in Stenotype the
testimony and other matters on the foregoing Transcript of
Proceedings; that the foregoing transcript, consisting of
pages numbered 1 to 151, inclusive, constitutes a full, true
and correct transcript of said Stenotype notes, and of the whole
thereof.
IN WITNESS WHEREOF, I have hereunto set my hand
this j 3 day of December, 1977, at Portland, Oregon.
f J -P -C' j ,
' ( t—«^.~* 1 | I | ^-v-A- '-
Frank R. Resales
Court Reporter
.52
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SENATOR BOB PACKWOOD
STATEMENT BEFORE THE PRESIDENT'S RESOURCE CONSERVATION
COMMITTEE
ON NOVEMBER 21, 1977
"AMERICA NEEDS A NATIONAL BOTTLE BILL"
This Committee will make a recommendation to
President Carter on the Bottle Bill by November 30.
There are two fundamental points that ought to be
considered when you make this recommendation. First,
the impacts of a national Bottle Bill have been
studied numerous times and the results are always
the same, POSITIVE. This single bill would save 60
to 80 thousand barrels of oil per day, produce a net,
and I underscore net, increase in jobs of 80 to 117
thousand, save millions of tons of aluminum, steel
and glass annually, reduce soft drink and beer prices
1.
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from $1.8 to $2,6 billion annually, cut back
billions of pounds of air, water and industrial
solid waste pollution annually, and finally,
stop the trashing of America's roadsides with
over 3.5 billion cans of bottles every year.
Those are impressive figures, and they are
not mine or any interest group's that has been
working in favor of the national Bottle Bill.
Those are the figures generated by three federal
studies to date, the Federal Energy Administration,
te Environmental Protection Agency and the Department
of Commerce. Since you are in Oregon, the first
state to adopt a Bottle Bill, you will have a chance
to determine what the actual impact has been here.
In Oregon, the results are the same, savings in every
2.
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category. And Oregonians love it. In fact, a
survey of Oregonians within the last two years
showed that 90 percent of Oregonians like the
Bottle Bill. They are proud about the fact that
they are helping to save energy, stop litter and
the needless throwing away of precious materials.
But if you don't find that these three federal
studies are convincing enough, I have for you this
morning one more study. For the past year and one-
half, the General Accounting Office has been studying
the impacts of a national Bottle Bill. We are all
familiar with the GAO in this room. It is the
office within the Federal government that works
independently of the Congress and the Administration
to audit government programs and proposed legislation.
Its reputation is high, its independence is unquestioned,
3.
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its steady results are sour.d. And this morning,
I am releasing the conclusions of the GAO study
which reaffirms the benefits of a national Bottle
Bill. Let me take a moment to describe how this
study took place.
The General Accounting Office produced a
draft paper some months aco and circulated that
among industry and environmental groups. Pre-
sumably that proposed study has been seen by every
major opponent to this legislation. That is a
highly unusual practice. But, I believe the GAO
did it to insure that the study could not be dis-
credited because the industry was not fully consulted.
The GAO report says that the energy savings,
once we have a national Bottle Bill in effect, will
4.
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be roughly 60 to 80 thousand barrels of oil per
day, that there will be a net increase in jobs in
the ranges already cited, that beverage container
litter will be reduced by 70 percent and that sub-
stantial national savings of materials will occur.
Although you may be aware of some of the results
of the GAO study, I thought it important to announce
it today so that the public is again reminded that
the Bottle Bill concept is sound.
Now let me turn to the other point which I want
to address this morning, the Bottle Bill opposition.
Ever since Oregon passed its bill, the major brewing
and soft drink bottlers, and the can and bottle
manufacturers have joined together in one of the
largest, most well financed campaigns to kill similar
5.
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bottle bills. The amount of money that has been
spent, and the kinds of tactics that have been
used are staggering. And yet, despite the tens
of millions of dollars and the erroneous infor-
mation and advertising that have been used sometimes,
the Nation adopted two new bottle bill measures
last fall: one in Michigan and in Maine.
There are two conclusions that ought to be
reached about the merits of the Bottle Bill based
on the unsuccessful efforts of the opposition.
First, according to the public campaign spending
figures reported in Michigan and Maine, the Bottle
Bill opponents outspent the citizens groups by
10-15 times. For every dollar that was spent in
support of these successful measures, up to 15 times
6.
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that was spent to thwart it, and money didn't
talk. Apart from these state referendum measures,
the ongoing campaign has been estimated by Joe
Coors of Coors Brewing Company to approach $20
million annually.
Let me at this point congratulate the can
and bottle industry on what appears to be a change
of position. The Aluminum Company of America is
quoted in leverage Industry Magazine of October 6
as follows:
"We have for several years been very active
in opposing deposits at local and national levels.
Our greatest concern has been those proposals <-hat
discriminate against the aluminum can and prevent
it from competing in the marketplace. In addition
7.
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to opposing such proposals with all our energy,
we also have worked against uniform deposit
proposals.
"However, we have becoire convinced that uniform
deposits are quite different from the ^discriminatory
deposits that we still oppose. While Alcoa will
not actively support uniform deposit regulations
now, we can see a number of reasons why we should
not object to a uniform deposit law. As a result,
we have modified our position to focus on discrimi-
natory deposit proposals.
"Public opinion data indicate that between
two-thirds and three-quarters of the U.S. public
now support mandatory deposits on beverage containers.
Evidence of this has also become evident at the ballot
8.
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box. The public in Michigan and Maine was strongly
favorable to deposit proposals on the ballot in
those states last year. The citizens of Oregon
are strongly behind the state's "bottle bill," the
nation's oldest deposit law, even though it is
discriminatory.
"The public favors deposits as a means of litter
control. While Alcoa feels this is at best only a
partial measure and does not think this is the most
productive means of getting at the litter problem,
there is no question that littering of beverage
containers does decline after deposits are imposed.
"Another prime motive offered for supporting
deposits is the nublic's growing interest in conserving
materials and energy. Alcoa has been actively pursuing
9.
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that course for some time through voluntary
reclamation of aluminum cans. Today, about
one in four aluminum cans are being returned for
recycling, thus saving major quantities of
materials and energy. Where the aluminum can is
used widely, returns currently approach one in
two. But we have trouble seeing the national
figure going beyond 50 percent through voluntary
recycling. Making all containers returnable through
uniform deposits, on the o^her hand, will dramatically
increase the percentage of returns."
In a registration statement with the Securities
and Exchange Commission, PepsiCo said,"While it is
not possible to predict whether restrictive container
legislation will be adopted in other states or at the
10.
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federal level, PepsiCo believes that it will be
able to earn an adequate return on the investment
which might be required by it as a result of
restrictive container legislation, and does not
anticipate a material adverse impact on the sales
or profits of its soft drink business if such
legislation is adopted."
Thank you for your time. I hope that while
you are in Oregon you will have a chance to research
more thoroughly just how well our law works.
11.
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COHPTROLLFR GENERAL '5 POTOJ7IAL tFFECTS OF A
RLPQR7 10 THE CJEiGEFSS H47JCK1AL HA&JATCRY DEPOSIT
OS BEVERAGE C&TTAINERS
Proposals for refundable deposits on all beverage containers have been
Introduced in the U-S, Congress since 1970. There is msb dlsagreensnt
about both the costs and benefit* of such legislation. This study
enalyzes the effects of a national mandatory deposit syst&s on the en-
vironment, the eeonosy, end the censmaer. It does not compare costs of
a Kcndstory deposit law to other »eans of achieving similar purported
benefits.
Sort: effects cf a laS.-Kf Story depart system are fairly certain. They
depsnd w the change frco a beverase systeci which, before legislation,
ha* 25 percent deposit container;, to a ij'Stea which would J-^ve 1S3
percent deposit containers. The:;e changes are:
--Litter End .so"! id wa^tc. Reductions woald be expected in
beveraqe contair.sr Utter., total litter, end
solid
costs to handle retumgd containers. R':t4i1ers, whole-
^1 ers, and beverage prodiEErs v^oul d fee handling slbest 4 tirr2
the deposit containers th«y do todsy. Eapty container handling
costs would rise.
^ not c"J3ir,sd by t"S consular. As not all containers would
be returned for deposit refund, Industry's income would rise,
Aoain, this is cue prisarily to the increase in deposit coverage
frcra 25 percent to 100 percent.
In addition to the fairly certain effects noted above, Xte?t ara ott)er
changes which could occur in less.er or greater ^counts depending on the
nirnber of new containers nanufaci.ured such as
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— reduced raw Baterial
— reduced energy use,
—reduced systea costs for containers, and
--increased systesa costs for using more refillable bottles,
Because industry would be free to select how it wished ta respond to
a eandatory deposit law, their decisions would determine tht size of the
above changes -
6AO calculated the econoraic costs of changing over frost the existing
container &\x. to a E!X sicrilar to the existing can/bottle six C#ix 1}
and the cost of changing over to a of* where refiHable bottles becasce tf
container (Hix II).
The beverage industry and retail store costs were less under Hi* I and
Mix 1! Curing a changeover period After f implementation of a aar/dstory
deposit system than the costs under a continuation of the existing beverage
systeE. The Incrtas&s in capital ancf labor costs to use jscre refillable
bottles would be offset by decreases in new container purchases and
Increases in Incase as retained deposits rose. Pr1c« to the consumer
would not necessarily fall unless breweries and bottlers pasifi
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The expected reduction in can *nd bottle output under &rth mxes I and II
would decrease employment and capital goods requirements.
The eDtploycsent effects of the Rwndatory deposit legislation were also
calculated on 9 worker j»sis. The- net change expected fetm a raandatory
deposit system which continued to aie cans extensively (Sly 1} was +24,000, '
and the net change if the rsff liable bottle dominated (Kfjr II) would be
+37,000. The losses in eajployjsent in both cases would be 1n the
container producing industries, with the gains in the beversge production
and distribution sectors > and the retail industry.
•AGENCY COfmTS
The Federal Fneray Administration, the Envirawienta! Protection Agency,
and the Council on Envirocinental Qaality agraed with east of the re-port.
The Department of Cc.'^erce would H5;e the Con5ress to ccfisidar sand-«tor>'
deposits as tMit one of several Interrelated options for solving the Nation's
solid waste disposal and materials recycling problems. Cosr»rce also
notes that the GAD assuspiicus s?9E optimistic.
GAO agrtes that a fgndatory deposit proposal is but oflt cf fchs options
available, Cir-phaslzing that 1t set out to analyze just this one optia."!-
The basis for CL40 assunipticns are carefully explair.edjift £fe= report and
are cinizwa, not optiaistSc, values.
OTHER
Coasnents froa industry associations, envircnpental groups, .and individuals
wert split basically betvfesn industry'- -generally & negative reaction —
and the others— general fy poiitfvc, «^ceuse of the cr€*f '^tantity of
naterial with nhich industry provr^.-d us, ws dealt b'lth z^sjc^r ar.d tcrrc-n
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in sy2?D2ry form In Appssdlx V. Industry
criticized GAQ's principal assumptions as too optinisttc. Tfc^y further
believe thdt th§ disruptions end increased costs resulting froa a
mandatory deposit law wuld far outweigh possible envirowsental benefits.
The GAO ccnrsents are presented In Appendix ¥,
If legislation f&f a mandatory dapostt on beverage ccntsinsrs i* s
It should Irsclu^? the following:
— Adcpc>slfc should be ir$ased on a]j^ besBr^ge cfevtiif,ers,
benefits result «ft?Ti ai> 0aft> esateiBer? as possih'a ssrc
for
— A lead-in psriod for iDplessnting the IsW to help industry csnvert
its facilities to the new systesn with fewer operating prfiblsiBS.
"Funds to wfary, the public about ins nesd to return
• -Enhanced access tc retaining prtjgrasss aid ii
tiat for areas *ilh esploysent probleES resulting f«ss the legis-
lation,
— Sams eoncy fron u?iredaac--2d deposits placed in a fund for municip-
alities to cleanup litter and solid waste,
Rt5 and snalj'ss^ of effects after Iff^leKsntatiDr. ss
the reSJiTiSibls csency is ir.fcrssed of the program's $•? f act I vs»=ss
and need for sny
t6 cnceurage can recycll
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U.S.
November 18, 1977
HOLD FOR RELEASE MONDAY AH'S
PACKWOOD UNLEASHES GOVERNMENT STUDY ON BOTTLE BILL
PORTLAND (Nov. 21) — Senator Bob Packwood (R-Ore) Monday
will unveil a major government study which reaffirms the benefits
of a national bottle bill.
The General Accounting Office's findings were made public
by the Oregon Senator during a public hearing at the Bonneville
Power Administration building in Portland before President Carter's
"Resource Conservation Committee".
Senator Packwood told the Committee that according to the
GAO report, the energy savings, once a national bottle bill is
in effect, would be roughly 60 to 80 thousand barrels of oil per
day. The Senator also said the study cites a net increase of
30,000 to 50,000 jobs and the saving of millions of tons of
aluminum steel and glass annually.
Senator Packwood, who is a member of the Senate Commerce
Committee which has jurisdiction over the bottle bill, said the
study further points to a reduction of soft drink and beer prices
from between $1.8 billion to $2.6 billion annually. This would
be a cut back in billions of pounds of air, water and industrial
solid waste pollution, he said. Senator Packwood is also a
cosponsor of a national bottle bill with Senator Mark Hatfield
(R-Ore). The bill puts a 5$ deposit on all beverage containers,
charged at the time of purchase and refunded on resturn.
"I challenge President Carter to come forward in support of
this vital legislation. Given the GAO's information, I don't see
how he can do anything less but endorse a national bottle bill and
push firmly for its passage," Senator Packwood said.
In testifying before the federal task force today, Packwood
also pointed an accusing finger at opponents of bottle bill
legislation. The Senator arg.ued that the major brewing and soft
drink bottlers, and the can c.nd bottle manufacture:rs have joined
together in one of the largest, most well financed campaigns to
kill bottle bills throughout the country.
"Despite the tens of mi] lions of dollars and the false
information and advertising that have been used sometimes,"
Packwood said, "the nation adopted two new bottle bill measures
last fall in Michigan and Maine."
Packwood concluded that for every dollar that was spent in
support of these successful measures, 11 to 15 times that amount
was spent to thwart them, and money didn't talk.
The hearing today in Portland was the last one held by the
Resource Conservation Committee before it makes its recommendations
to Carter. The Committee was organized by the President last June
to study the Bottle Bill anH the ow-rall. po]id waste problem.
-oOo-
For more information contact Lane Johnstrn [2D2J
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RESOURCE CONSERVATION COMMITTEE HEARINGS C
THE SOLID WASTE PRODUCT CHARGE ISSUE
BONNEVILLE POWER ADMINISTRATION BUILDING
NOVEMBER 21, 1977
My name is Robert Keesee. I am Senior Economist, Government Affairs,
for Georgia-Pacific Corporation. We appreciate this opportunity to be
here today to talk about a subject which we believe should be thoroughly
discussed and analyzed. We believe that the solid waste problem can be
more adequately addressed and resource recycling increased, but the
imposition of a tax is the wrong technique to accomplish it. The key to
the solution of the nation's solid waste problems lies in charging the
disposer of the waste the full cost of disposal. This is not occurring
in many geographic areas. As the Environmental Protection Agency states:
...'three-fourths of U.S. communities finance their solid waste
management systems out of general tax revenues (mainly property
taxes) rather than through user fees. This means that most house-
holds, and many commercial enterprises as well, never see a specific
bill or charge of any kind for this service, as they do, for example,
for electricity or other public utility services. Many cities that
do employ user fee systems to finance solid waste services charge
lump-sum amounts that are not related to quantities handled.
Though possibly justifiable from other viewpoints, all of these
practices involve the undercosting of services and/or the non-
charging (sic) of the economic costs to the waste producers in the
material flow system. By making the services appear costless to
those utilizing them, noncharging has the overall effect of mini-
mizing or negating any possible economic incentive towards reducing
waste generation or encouraging local public or private resource
recovery optionsJ
Fourth Report to Congress, Resource Recovery and Waste Reduction,
U. S. Environmental Protection Agency, 1977, p. 6.
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•2-
This is the core of the problem. Yet, federal efforts seem to ignore
this key point in favor of a tax on packaging materials. Such a tax
opens a myriad of new problems, :;ome of which we will touch briefly
here, but which we will cover in depth for the written record. They all
lead to the same conclusion—that the problem must be attacked at the
point of disposal, not through a tax on production.
There seems to be an assumption that user charges, metering and other
techniques to internalize the cost of disposal cannot be effectively
implemented. Yet, such techniques are used for many services delivered
directly to houses. Electricity, water, natural gas are all in this
category. In fact, metering of individual electricity use in apartment
buildings was one of the key elements in the proposed national energy
conservation program. It was recognized that individuals will use more
if the costs are not fully and directly borne. Others who will testify
today will no doubt point out that in this area private collection
agencies do meter trash disposal and many of us pay monthly bills based
on the number of cans or bags we use. Much of what would normally end
up in the trash in the form of newspapers, lawn clippings and the like
disappear from the solid waste stream.
Requiring that the users directly pay the cost of disposal would also
serve to reduce the total volume most dramatically in those geographic
areas where the costs of the system are highest. This is the exact
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response that is desired, but the individual must first have the incen-
tive to reduce waste.
Charging the full cost can have another significant beneficial effect.
By making everyone more aware of the cost measures to reduce those
costs, such as alternative markets and resource recovery, can be explored
and expanded upon.
Charging a tax on producers of the fiber used in packaging and other
paper products is not the proper approach. Not only does the end user
have no direct idea of the cost, but the actual distribution of the
funds becomes a massive problem. The list of questions that you have
posed for this hearing relates almost entirely to this question of how
and to whom to allocate the revenues. As long as there are differences
in cities, collection systems, availability of local fill sites, popula-
tion distribution, markets for recycled materials, and differences in
local funding, it will not be possible to develop a system which will be
equitable to all. If a Nebraska farmer can dispose of his waste in an
acceptable manner on his own property, why should he pay a tax because a
city in Illinois does not want to charge its users the full disposal
cost, using tax money to perpetuate a system which cannot be economically
justified? Why should an Oregonian who sorts out his or her newspapers
pay a tax because other cities fail to provide the market incentive to
do.the sorting? Why should citizens in areas where the full costs are
being met pay because other areas will not implement the same process?
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-4-
As I stated earlier, we will cover a number of points and make an
indepth economic analysis of this issue in our full statement. I would
like to mc\e a recommendation after briefly covering two other points.
First, the idea of a product charge has been likened to an effluent
charge. We do not believe this comparison is valid. Taxing a paper
producer instead of the disposer is the same as levying a tax on a
coalminer instead of the individual who actually releases the pollutant.
Second, the concept of a tax has beer compared to a system such as the
Oregon bottle bill. This comparison is also invalid. In the case of the
bottle bill, the disposal problem is addressed through a charge levied
directly on the individual who in turn receives a refund for returning
the bottle and, therefore, has the economic incentive to do so. In the
case of a product disposal tax, the individual has no incentive to
reduce his waste volume.
There are numerous disposal systems throughout the country. They run
the gamut from private systems which charge full cost to the disposer to
some municipal systems which pay all disposal costs from general revenues.
It is time for an analysis of these different systems. Let's find out
how the volume and composition of solid waste varies with the size and
location of the city, types of metering system, availability of land
fills, and the degree of economic resource recovery available. Much of
that data is probably already available. Portland and other areas in
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-5-
Oregon could no doubt provide a mass of information. The dissemination
of such information on how best to charge the costs to the disposer, how
to implement metering systems, how citizens have responded to such
systems, would be invaluable to municipalities who are groping with the
problem. Once the allocation of true disposal costs is effectively
handled, the answers to the resource recovery aspect will follow.
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Georgia-Pacific Corporation wo s 11 \-i\ih Aitm,t
November 28, 1977
Ms. Barbara Blum
Chairman, Senior Advisory Group /
Resource Conservation Committee v
401 "M" Street, S.W.
Washington D.C. 20460
Dear Ms, Blum:
At the November 21, 1977 Solid Waste Product Charge
hearings, I indicated that Georgia-Pacific wished to
expand on its statement. Enclosed is our full state-
ment for the record.
Sincerely,
. C f ,'.^"t> — * *-* '''- • * s-
' Robert H. Keesee ^
Senior Economist
Government Affairs Department
ds
enclosure
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ANALYSIS OF THE SOLID WASTE PRODUCT CHARGE ISSUE
GEORGIA-PACIFIC CORPORATION
NOVEMBER 28, 1977
Abstract
There is little argument that solid waste disposal represents a pressing
problem for some municipalities. There is also little argument that the
source of the problem is a market failure resulting from the fact that
many municipal governments do not appropriately price disposal services.
We believe that metering waste and charging consumers accordingly can
be, and in some locations already is, an effective means of overcoming
the market failure.
The market failure will not and cannot be corrected by a product disposal
charge. In fact, the charge will create new problems and inequities,
some of which have not been adequately considered.
We believe that a study of existing solid waste pricing techniques must
be conducted if the issue is to be rationally addressed.
Many communities are groping for solutions to the solid waste problem.
We believe that the solid waste problem can be adequately addressed and
resource recycling increased. The key, however, 1ies in charging the
disposer of the waste the_ full cost of disposal. This is not occurring
in many geographic areas and a tax will not remedy that situation.
-------
As the Environmental Protection Agency states:
... three-fourths of U.S. communities finance their solid waste
management systems out of general tax revenues (mainly property
taxes) rather than through user fees. This means that most house-
holds, and many commercial enterprises as well, never see a specific
bill or charge of any kind for this service, as they do, for example,
for electricity or other public utility services. Many cities that
do employ user fee systems to finance solid waste services charge
lump-sum amounts that are not related to quantities handled.
Though possibly justifiable from other viewpoints, all of these
practices involve the undercosting of services and/or the non-
charging [sic] of the economic costs to the waste producers in the
material flow system. By making the services appear costless to
those utilizing them, noncharging has the overall effect of mini-
mizing or negating any possible economic incentive towards reducing
waste generation or encouraging local public or private resource
recovery options.'
This is the core of the problem. Yet, the rationale for a product
disposal charge seems to ignore this key point in favor of a tax on
packaging materials. Such a tax opens a myriad of new problems, all of
which lead to the same conclusion: that the problem must be attacked at
the point of disposal, not by a tax on production.
There seems to be an assumption that user charges, metering, and other
techniques to internalize the cost of disposal cannot be effectively
implemented. Yet, such techniques are used for many services delivered
Fourth Report to Congress, Resource Recovery and Waste Reduction,
U. SY Environmental Protection Agency, 1977, p. 6.
-------
directly to houses. Electricity, water, natural gas are all in this
category. In fact, metering of individual electricity use in apartment
buildings was one of elements in the proposed national energy conservation
program. It was recognized that individuals will use more if the costs
o
are not fully and directly borne.
In the Portland area, private collection agencies do meter trash disposal
and most citizens pay monthly bills based on the number of cans or bags
used. As a result, much of what would normally end up in the trash in
2
Such excess resource consumption is typical where consumers do not
directly bear the full cost of their decisions. (Economists call
such a situation a "market failure."). For example, excessive
water consumption is typical in cities where there are no residen-
tial water meters such as in Sacramento, California.
In the case of unmetered water, not only is it likely that water
consumption will be greater, it is inevitable. Since there is no
penalty for excessive water usage, water becomes a free good and
additional usage of water as a substitute for other resources and
efforts will occur. The consumer believes that there is no economic
penalty for excessive watering of yards, allowing the water to run
continually while washing the car or for any other usages. Likewise,
the consumer foresees no reward for conserving because his use is so
small compared to total usage that any reduction by a single user
would never be reflected through a lower bill.
For exactly the same reasons as above, people tend to overcome solid
waste disposal services where such solid waste disposal is financed
out of the general tax base (through property taxes) or on a flat
fee basis (so much per month irrespective of how much one disposes).
-------
the form of newspapers, lawn clippings and the like disappears from the
•}
solid waste stream.
Requiring that the users directly pay the cost of disposal would also
serve to reduce the total volume most dramatically in those geographic
areas where the costs of the1 system are highest. This is the exact
consumer response that is de-sired, but the individual must first have
A statement for one private firm's refuse collection appears below.
September-October service provided two cans per week of refuse disposal
(a cost of about $.75 per can). The two extra charges represent an
extra can on September 5th and removal of a large quantity of moving
cartons on October 3rd. There is no evidence of a market failure, then,
in this example of private refuse disposal.
;r- • r, -n itt
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-------
the incentive to reduce waste. Also, by making everyone more aware of
the costs, measures to reduce those costs, such as alternative markets
and resource recovery, can be rationally explored and expanded upon. In
the Portland area, because of metered refuse disposal, decreased refuse
volumes and source separation for resource recovery are quite common.
Metering refuse as a solution to the market failure in solid waste
disposal is so obvious we are amazed that it has been overlooked.
Such metering of refuse and charging the full cost of disposal eliminates
the need for any extensive federal intervention or funding and may well
resolve what some representatives of local governments refer to as their
number one problem.
Charging a tax on producers of the fiber used in packaging and other
paper products is not the proper approach. Not only does the end user
have no direct idea of the cost, but the actual distribution of the
funds becomes a massive problem. The questions that were posed by the
Resource Conservation Committee for its hearings relate almost entirely
4
The tax provides no economic incentive for the consumer to reduce his
solid waste volume. In fact, there may be an incentive to actually
increase the volume of solid waste. Because of the added cost on
packaging, an incentive exists to substitute away from manufactured
packaging, irrespective of the solid waste implications of doing so.
For example, we may see consumers purchasing and disposing of
"natural packaging" (such as peapods, corn husks, and orange rinds)
instead of manmade packaging.
It might be the case that the true disposal cost of an orange juice
container is less than the true disposal cost of an equivalent number
of orange rinds. By imposing the cost on the container and not its
disposal, however, this cost advantage would never be apparent to the
consumer.
-------
to the issues of how and to whom to allocate the revenues. Unfortunately,
there are some real problems in this regard. As long as there are
differences in cities, collection systems, availability of local fill
sites, population distribution, markets for recycled materials, and
local funding, it will not be possible to develop a system which will be
equitable to all. If a Nebraska farmer can dispose of his waste in an
acceptable manner on his own property, why should he pay a tax because a
city in Illinois does not want to charge its users the full disposal
cost, using tax money to perpetuate a system which cannot be economically
justified? Why should an Oregonian who sorts out his newspapers pay a
tax because other cities fail to provide the market incentive to do the
sorting? Why should citizens in areas where the full costs are being
met pay because other areas will not implement the same process?
It is important to point out that regardless of the funding systems
currently being used, whether disposal costs are internalized or not,
local governments will be the beneficiaries of tax revenues paid by
someone. This revenue will be over and above what they are receiving
now.
For example, if revenues were redistributed on a per capita basis, the
federal government simply acts as a tax collector on behalf of the muni-
cipal government. If the revenues are redistributed based on actual
costs of disposal, then income redistribution from low cost disposal
areas to high cost disposal areas occurs. A number of possible redis-
tribution techniques can be discussed, but all will have built-in
inequities and involve the transfer of a new tax revenue. It should
be noted that none of the revenue transfer possibilities will, or even
can, force the consumer to bear the full cost of his disposal decisions.
-------
There are two other points which should be addressed because they are
often adduced as support for the Product Disposal Charge.
First, the idea of a product charge has been likened to an effluent
charge. We do not believe this comparison is valid. Taxing a paper
producer instead of the disposer is the same as levying a tax on a coal
miner instead of the individual who actually releases the pollutant.
Second, the concept of a tax has been compared to a system such as the
Oregon bottle bill. This comparison is also invalid. In the case of
the bottle bill, the disposal problem is addressed through a charge
levied directly on the individual who in turn receives a refund for
returning the bottle and, therefore, has the economic incentive to do
so. In the case of a product disposal tax, the individual has no
incentive to reduce his waste volume.
There are numerous disposal systems throughout the country. They run
the gamut from private systems which charge full cost to the disposer to
some municipal systems which pay all disposal costs from general revenues.
It is time for an analysis of these different systems.
Certainly, municipal solid waste disposal is a pressing problem and
industry is not interested in delaying a solution any longer than
absolutely necessary. But, as we have tried to point out, a rational
policy cannot be developed without the knowledge of how consumers respond
to price incentives at the disposal level. Let's find out how the
-------
volume and composition of solid waste varies with the size and location
of the city, types of metering system, availability of land fills, and
the extent of economic resource recovery. Much of that data is probably
already available. Portland and other areas in Oregon could no doubt
provide a mass of information. The dissemination of such information on
how best to charge the costs to the disposer, how to implement metering
systems, and how citizens have responded to such systems would be in-
valuable to municipalities who are groping with the problem. Once the
allocation of true disposal costs is effectively handled, the answers to
the resource recovery aspect will follow.
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WKILAM)
18U1NW Irving, Portend Oregon 97209 (503) 228-b37b
November 21, 1977
The Portla'id Recycling Team would like to subnit this paper to the
Resource Conservation Committee of thel'.nvironnental Protection Agency
as testimony of our position of the proposed Solid Waste Product Charge
Legislation.
This paper w 11 take a point by point look at the questions raised
ty the Resource Conservation Committee memorandum of October 20, 1917.
1. Wfe strongly recomnend that sor.e form of Solid Waste Product
Charge Legislation and taxation be implemented, implemented as soon ar
administratively feasible, and implemented at the Federal level.
Thr structure and nature of the manufacturing and -lackaging industry
in the United States is nationally based, politically powerful, and parochial
in interest, through its distribution systems, lobbying efforts, advertising
capabilities and ownership. Therefore, we find it imperative that Product
Charge Legislation originate at the Federal level as it is too large and
difficult a tack to be undertaken by local or state governnents.
'•'e need only look at the intensive lobbving efforis by the Uottlin,--
E. id 3rening industries to stop Beverage Container Legislation at the state
level bo realize that this charge must cone fron the Federal level to be
vorVable er,d effective. Even in states that have successfully pa<5t
_Beverag<: Container Legislation thcre is considerable differences in the
law fron state to slate. Thisnroposed legislation nas the capabilities
to set major rolic;r direction for our solid waste problems in th° nnconing
decades and should, therefore, be uniform throughout the United States trA
regulated and enforced at the Federal level.
-iowoverj we fesl that the proiiiction and educational asTccts of this
legislation will ultimately deteminfi the success or failure of the X3rop_rat?,
and should be carried cut by the local and state go 'ermnents. Schools will
ha-'« to play a najor role in the education of the public about this law
virough student and adjlt e-iucation programs.
We also feel that th° resource Conservation and Recovery Comittee
nuat give full attention and funding to the nronotion of i/his Drogram
through advertising, public service announcements, special trajninr;
wor«.shoT5s ar,d the like. Aecyclers ha-re found that where Beverage Container
Legislation has been introduced there has been a.i increase in recycling activities
because of what we like to call the ''piggyback efiect". As neonle dcveloo
the habit of returning cans and bottles for refunds, they begin to aevelot)
an awareness of our other ratcrial and -j-ieigy scarcity nroblens and coac'.der
lifestyle changes that rfj.ll reduce this wastefullness. Recycling has been
-------
Page 2.
the natural benifactor of V;>,s awareness. We fuel that this same awareness
will be a factor in the .XICCCSF of Product Charge Legislation.
Finally, as part of the educational aspects of this Legislation we
would like to see-the price of a particular carton or package included in
the label. This would give consumer;; the knowledge to become wise shoppers
both economically and environmentally. The first step in relieving our
excessive packaging and solid waste disposal problem is to let the American
people know exactly how much they are paying for this packaging and disposal
coFts.
2. We feel that while there might be elternati/fjs to rroduct Charpe
Legislation these alternatives would not be as succe.csA.l, nor would their
impact be as drf3f.at.iv as the nroposed Product "barge a^nroach. Therefore}
we advise that the Resource Conservation Co'-pii ttee recommend the legislation
and implementation of the Product Charge concept. V.'e think th-1 ^t is br.s.t
to start wi tl: a program that has the greatest potential for success with
positive impacts on pollution, energy, and material consumption.
3. The Portland Recycling Team coexists with a strong Beverage
Container Law and we find that it is not only a vsrkablt collection system
to divert containers from the solid waste stream, but is also a strong
solid waste awareness incentive. A well designed Beverage Cont,r. 'ner Law
should encourage not just recycling but also the reuse of these containers.
V.'e feel that, unless the Product Chirac Legis],ation is designed to nrovi'ie
for re-cycling collection systems, and the reuse of products be Tors- recycling,
Beverage Container Laws and Product Charge Legislation cpn, and nut-it,, coejdst.
In fact, we feel that Product Charge Legislation and 3evertge Container
Legislation are not only compatible, but would reinforce each othf-r much the
way that Container Legislation and recycling now reinforce one another.
U. While it must be recognized that Product Charge Legislation is a
form of "regressive" taxation, it nust also be recognized that all taxation
plans intended for the American business and manufacturing community will,
ultimately, end up being paid out of the pockets of the average American
consumer and worker. To ease some of this burden we urge the Resource
Conservation Comnittee to recommend to Congress a tax reoa^e for low
income grouos affected by this legislation.
This form of taxation does have the one advantage of d'rectly relating
to the consumptive habits of ever;/' consumer and sector of the economy.
The more wasteful consumers arid manufacturing sector? would suffer the
greatest economic consequences.
5>. Tiie various economic consequences of resource conservation as it
relates, to Product Charge Legislation have been w°ll documented by numerous
Environmental Protection Agency studies and documents, therefore; we Jo ::ot
feel the need to dwell on them here.
However, considering the question of compensation an the private sector
for economic, losses suffered by this legislation, we feel that while this
is a regretable aspect of many acts of legislation it :;s something that
does occasionally occur, and the ^sckaging ar.r.1 mauufactiirir.g industries
can, arid will, learn u> live with it.
Given the lack of funding that now exhists for en/ironme ital x>rcbler..s
and educational programs concerning fc'iese prooloins, ws frel th? i it woulc'
De a serious misdirection of priorities to divert these funds from envi-
ronmental concerns u> the private sector.
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Page 3.
6. Once again, we feel that the Environmental Protection Agency
has provided considerable research and documentation on the environmental
Impact which will occur as a result of Product Charge Legislation. However,
we night add that with the passage of Product Charge Legislation manufac-
tures would be encouraged, through taxation and tax credits, and hopefully,
the increased discrirtinating tastes of the American consumer, to develop
ecoiogicaly sound alternatives to the packaging materials now in use.
7. While additional research on any proposal or legislation will
always give us valuable input and data to consider the consequences and
alternatives, we feel that in the case of Product Charge Legislation
the tiMe for action has arrived. Admittedly, there are areas that are
worthy of r.ore research and consideration, especially in the areas of
how to effectively use and disperse the collected revenues and the
possible inclusion of other product catagories in the proposed Legislation.
Vie believe that revenues should go to local agencies and governments
to support the development of low technology, source separation recycling
programs. Additionally, we feel that it would be a urotier allocation of
resources to provide research grants and capitalization loans to manufac-
turers to allow them the means and opportunities to develop recyclable
alternatives to their present packaging systems and materials.
8. We feel this question has been addressed in several other areas
in this document. However, concerning the key elements of interest to
recyclers we would again like to stress our concern for the inclusion of
economic incentives in the Product Charge structure to promote the reuse
of materials. We feel that the taxation and tax credit system should be
of such a type that the reuse of materials, prior to recycling, is promoted
to the fullest extent.
Finally, we cannot stress enough the importance of allocating revenues
to environmental problems and the development of low technology recycling
programs. \le feel that for a successful solid waste diversion and resource
recovery program to work a compatible and interrelated program of Product
Charge taxation, reuse incentives, beverage container laws and source
separation recycling programs must be developed and implemented.
9. We concur with the Environmental Protection Agency's Fourth Report
to Congress that ar- effective product Materials list for the Product
Charge would include non-durable goods, paper, and packaging products.
These products represent apriroxamitely 80 percent of our solid waste
disposal materials, yet the impact of a product charge would not be as
economically severe on these goods as, for instance,1 on durable goods.
Also, recycling programs and secondary materials markets already exhist
for most of these products and the markets can easily expand to cover the
increased demands created by Product Charge Legislation.
Additionally, we would like to see the Resource Conservation Committee
undertake the task of prohibiting products t> at are bi-material, such as
certain food and soft goods packaging that conbines plastics, rarers, and
metals in their packaging. These materials create tremendous source sep-
aration problems and therefore end up not being recycled.
Other problems that we can foresee with certain items arid materials
on the Product Charge list would be those items that are not effectivaly
covered by either a charge based on tonnage cr unit pricing. Hastic wrap-
-------
Page
ping would be the most glaring exiireple of this problen. The tonnage cost,
as outlined by the proposed Legislation, does not adequately cover the
ecological, environmental, and disposal problems that plastic wrap, and
similar products,, presents. !Jor does the proposed rigid container unit
pricing charge co-<;er the particulf.r problems created by certain plastics
and styrofoams. The Resource Conservation Committee should look at these
unique packaging materials and develop specific policy that will correct
these problems and loopholes.
10. The $26 per ton charge and q>$ per thousand unit charge for rigid
containers seems like-a reasonable and fair and equitable snount to begin
the program, .is should, however, not get fi>ed to these prices if research
and data shows that a higher, or lower, price would be justified to produce
the wanted results. The charge for certain packaging should be based on the
unit so as to not create undue favoritism and discrimination for lighter
weight materials such as plastics and aluminum, over alternative packaging
which might be more reusable and reclainable, such as glass.
11. We agree with the Environsent?l Protection Ageucy's Fourth Report
to Congress that the ;roduct Charge should be levied as near as admin-
istratively possiole to the raw material stage of manufe-cturing. Vie recog-
nize that this will be difficult with certain products and ma&erials, as
there is no way of knowing if they w::31 eventually end ut> in tie solid
waste ".treat", or enter into the manufacturing of a durable, ^eniinsnt product.
As a general rule of operation and policy, we feol that the closir
to the raw "iaterial a^i bulk manufacturing stage a product can be charged,
the better. This will encourage waste resource u->e throughotit the economic
and distrioution systems, and will create the necessary incentives to encour-
age the use of recyclable materials and the development of secondary markets.
12. To encourage the \r;e of recyclable materials the Product Charge
tax should definitely be reduced in relation to the anount of recycled
materials in the t>roduct. This would not only be equitable and fair to
those manufacturers and consumers who develop environmentally sound pro-
ducts and habits, but will encourage secondary materials markets, thus
furthering the growth and possibilities of our reclainable resources.
The Product Charge tax reduction should be equal, on a percentage
basis, to tfe anount of recycled materials in thp product, being taxed.
For example, a product that, contains 30 percent recycled p.atsrial should
only be charged JG percent of Vie current taxation for similar products.
13. Given the magnitude a.id long range effects of t-.is legislation,
the Product Charge program should be phased in over time to base the dis-
ruptix's effects on the economy ana secondary materials markets. However,
it must be recognizel that too lengthy of a phase in period would have
the unwanted result of diluting the: meaning and effectiveness of the
Product Charge.
We find the tea year, 10 percent rhase in -period, as cororaonly rec-
oiiinended by the Envlronnent&l FroUctlon Agency, to be too long. It
should be noted that the Oregon Jeverage Containi;r lir. • b, I/ one yeir from
passage to enactment to give the aj'fectfd i"d')?trlt%' y -; ilstribution and
collection systems preparatory tiac to ;-,"tir tr. I'^i^.;,..^-^^.^.
We feel that a nore aprropriai.e le:v- v. <;Js« «wj- a^psrt •«i,^rCl
-------
implementation period would be five years, at 20 percent a year. This would
give the manufacturing industry sufficent tine to convert to T-ecycled
materials and to allocate the necessary capital and resources for the
conversion, without diluting the effectiveness of the program.
111. Though 'we have covered this issue previously, let us reiterate our
concern that the revenues from Product Charge taxation be allocated for
environmental education, the support of secondary materials use, and devel-
opment of recycling programs on the local level.
While we foresee that certain aspects of this program can best be
served at the Federal level, we believe that an effective education and
pronotion program should originate, and will be most responsive, at the
local and state level. 'Je bolie-e that funds fron this nroprar. should be
distributed to local governments for assistance with their solid waste
disposal programs, but the considerations here should be the extent and
expediency with which there governnents acts to develop source scoaration
and recycling programs.
In ccnclrsico, vie want to say that given the high demand for funding
within the solid waste management area, there should be no consideration
given to allocating Product Charge revenues in the General Fund, or using
these funds to compensate the private sector for economic losses which
r.ight be incurred as a result of Product Charge Legislation.
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TES1 IMONY
Bci'orc
Resource Conservation Committee
Section 8002(j)
Resource Conservation 5 Recovery Act
Portland, Oregon
November 21, 19-77
R. N. Witter, Jr.
Land § Timber Resource Manager
Weyerhaeus.er Company
Tacoma, Washington
oo&t^'
I am R. N. Witter, Jr., Land and Timber Resource Manager for
Weyerhaeuser Company, Tacoma, Washington. I am a professional
forester with over twenty year:, of experience in management of
private commercial forest land. My responsibilities include
timber appraisal, acquisitions, timber sales, the development
of forest management policy, including those related to
environmental protection, and the auditing of our compliance
throughout our United States operations. I am testifying
today on behalf of the American Paper Institute. AI'I represents
the producers of over 90$ of all of the pulp and paper manufactured
in this country.
Your committee has already heard Mr. L. F. Laun, President
of the American Paper Institute1, testify in Washington as
to the many economic and environmental reasons why we oppose
the waste disposal tax concept. You have also heard Mr. J. T. Tracy
describe in Cincinnati the problems such a tax poses for the
independent recycler.
-------
I am here at the request of your committee to respond with
testimony on the question of how the proposed solid waste
product charge would affect the utilization of forest residuals
from logging and how that might impact forest management and
hence future timber supply. I will also point out significant
environmental and economic problems that could be caused
by the product charge and to correct a misconception ttiat
appears to exist with respect to one of the stated goals of
the product charge, namely; "to conserve natural resources".
I will limit the testimony to the effects on typical Northwest
forest operations utilizing data from my company's experience.
Lumber and Plywood Demand Determines the
Acreage and Volume of the Western Harvest
The total volume (biomass) on a typical acre of old growth
Douglas fir forest breaks down into about 653 stcmwood and 35$
in tops, limbs, foliage, stumps, roots and bark. The precise
breakdown will vary by stand. Recognize that the 35$ in non-
stemwood is left after harvest in the West under any forseeable
market conditions. For the remainder of this testimony I will
be referring to only the 651 represented by the stcmwood on
the typical acre.
The stemwood is broken down into solid grade material (logs)
suitable for manufacture of lumber and plywood and fiber or
residual waste material in varying amounts depending upon
the age and condition of the forest being harvested. The
defective portion (fiber or waste) ranges typically between
20-504 of the stcmwood. The total annual volume of the
-------
-3-
Western harvest, that is the total number of acres harvested,
is determined by the demand foi logs needed to supply the
lumber and plywood facilities, not the need for chips by
pulpmills. Whether or not residuals or fiber log portion of
the stemwood are used is determined soley by the markets
for pulp chips for domestic pulpmills and the chip export
market. The volume of fiber material generated in the harvest
of grade material has traditionally been surplus and of marginal
value. In fact, the chip requirements to the Western pulpmills
and chip export market are almost totally supplied by chips
generated from the residual flews of the solid wood product
conversion facilities, i.e., it is a by-product of the converting
process from those facilities. Less than 101 of the chip supply
during the last decade was generated from chipping forest
residuals. Therefore, the utilization on any given acre in
the West is a function of the irarkct for this very marginal
material. Admittedly, some forest regions in the United
States are different, but even there thinnings, topwood and
other non-grade material from the harvest of those generally
more thrifty non-defective stands is dependent upon sufficient
markets for primary fiber.
History of Forest Utilization in the West
This scries of slides illustrates the significant changes in
wood utilization in the Pacific Northwest by Weyerhaeuser
during the past 30 years. There are changes in utilization
levels during economic cycles, but this presentation illustrates
trends through time. These examples come from Weyerhaeuser
operations in the Springfield Region in Oregon. The predominant
-------
-4-
timber type in this region is Douglas fir with merchantable
stocking for these examples assumed to be 160 CCF/acre.**
SLIDE ONE This is representative of the large amount of
wood fiber that was left on the acre after harvesting
in 1948. Several factors were important in that
time period:
(1) Sawmills were designed to convert the large,
high quality, old-growth Douglas fir logs. These
mills had lower lumber recoveries and generated
large amounts of slabs, end trim, sawdust, etc.,
which were usually bogged and burned or dumped.
These mills could not convert small or low-quality
logs efficiently.
(2) Our pulpmill was not yet in operation and
no other major local or export markets for lower
quality or smaller Douglas fir logs, chips, or
minor species material existed.
The poor forest utilization of this time period
impeded regeneration, wasted fiber, was unsightly
and left a significant fire hazard.
Note: CCF is symbol for cunit.
** A cunit is 100 cubic feet of solid wood.
-------
.
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-5-
SLIDE TWO This represents how typical utilization levels
had increased by 1962. The linerboard mill at
Springfield was in operation at that time. Most
of its chip requirements were obtained from solid
wood mill residuals and there were no financial
incentives to bring even more fiber off the acre.
Also, domestic markets for hemlock lumber and
export markets for hemlock logs began to solidify
in the early 60's increasing the value. About
80$ of the merchantable volume on the acre was
being brought in at this time.
SLIDE THREE By 1975 the financial incentives had developed
because of domestic markets and export chip
value increases, cnougli to bring in 981 of the
merchantable volume per acre. For this example,
that means about 157 CCF out of 160 CCF/acre
available were brought in.
SLIDE I-'OUR This slide graphically illustrates the changes
in wood utilization on the example acre between
1962 and 1975. About 20°i of the merchantable
volume available (or 32 CCI;/acrc) was left on
the ground in 1962 versus 2\ (or 3 CCF/acre) in 1975.
SLIDF. FIVE Here we see what happened to the logs brought into
our mills during the 30-year period. Of the 160 CCF
availalbe/acre in the example, only 36 CCF was
recovered in marketable products in 1948, mostly
lumber. This is a 23o recovery level for marketable
Note: Scale on slide is cubic feet: 36 CCF = 3(>00 cubic ft.
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products. Part of the waste was left on the
acre, part was hurned in teepee burner;, (causing
air pollution), and the rest was disposed of
in solid waste land fills.
In 1962, an average 93 CCF/acrc was recovered in
marketable products, or a 59$ recovery level.
Logs were now being used in plywood production
and chips were beini; pulped Cor use in the pulp-
mill. About 50t of the waste was left on the
acre and the remainder was generated by the mills.
With all our log and chip markets expanded and
prices (in constant $) up significantly, 141 CCH/
acre were recovered in marketable products by
1975. This is an 8fU recovery level. About
20$ of the total waste was left in the woods
and the remainder wes generated in the mills.
The use of logs for plywood and chips and sawdust
for linerboard had increased, and sawdust and
shavings were also in demand by our particle-
board mill. Residual chips, shavings, and sawdust
had now become a_ very significant source of
sawmill and plywood mill income. Note that
most of the volume derived from the improved
utilization was used for fiber products.
SLIDE SIX This slide recaps the changes in wood recovery/
acre that we have just seen.
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SLIDE SEVEN This recaps the amount and origin of unutilized
fiber for the three example years.
SLIDE EIGHT Here we see the value of products produced from
one acre for the selected years. This shows
that product values per acre harvested (in
current $) have increased over 426$. These
financial incentives have resulted in increased
utilization per acre, but the value of the
fiber products remains small.
SLIDE FIVE Volume of residuals used was for fiber product
markets.
CONCLUSIONS
In conclusion, markets have developed over time which have
enabled the use of previously wasted fiber from both the
solid wood products converting facilities and the acre from
which the wood fiber is harvested. If the value of chips
or other low cost new material is artificially lowered by
taxing their use, merchantable fiber will be left on the
acre (as lumber mill residuals are an "automatic* input to
the chips market because of their lower cost) causing:
waste" on the aero and wasted mill residuals
reduced regeneration practices which will
reduce future ti'nber supply
reduced justificition for capital for
regeneration and forest management
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higher costs to lumber and plywood producers
that would have to be recovered in higher
lumber and plywood prices
poor aesthetics
fire hazards for surrounding timberlands
As a result of the general economic downturn and severely
depressed pulp product market in late 1975, the volume of
residuals left in the forest above our corporate utilization
standard doubled. We were forced to relax the removal standard
to a piece 20' by 6" in diameter containing 504 sound chippable
volume. Unfortunately, chip markets in the West are still
depressed and our utilization is poor compared to the 1973-74
standard.
Summary - General Impacts of Solid Waste Product Charge
Our analysis shows that the proposed product charge will in
fact reduce demand growth for paper and paperboard packaging
products by forcing price increases to cover the tax. We
also agree that it will stimulate growth of use of post
consumer recycled fiber by providing a tax advantage, thereby
reducing further the demand for products recycled from forest
and mill residuals; that is it will cause substitution of
one waste for another. Although quantification is difficult,
we believe this could cause a reduction of nearly 44 in demand
for wood chips. You should realize that this will differentially
impact the more marginal situations and producers. By this
I mean that utilization will be more affected on a high cost
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-9-
operation distant from the maikct and on acres harvested
by non-integrated producers that do not have a downstream
forest management incentive. Fo'ir percent may seem small
but it is in the neighborhood of five to six cunits per
acre on at least 125,000 acres ainually clearcut in Western
Washington and 130,000 clearcut acres in Western Oregon.
In total it could equal an incremental residual waste of
over 3.9 million tons of such ma'erial in the Douglas I'ir
Region alone.
Effects of Lowor Utilization
EPA's own exhaustive studies preparatory to implementation
of the water, air and solid waste laws vividly describe the
potential environmental effects of poor forest and mill utili-
zation. The effect of poor utilization is to leave in area
in a poorer appearing condition, it becomes a gieatcr physical
impairment to bi}; game, it represents a significant wildfire
risk to regeneration and adjacent timber crops, it increases
the cost of regeneration, it may reduce our ability to gain
sufficient stocking to optimize yield from the next crop
by physically reducing adequate planting spaces and may
further reduce future timber supply by making given acres less
operable during the course of intermediate harvests during
their rotation. An essential practice to fire proofing
and providing suitable site preparation for establishment
of succeeding crops in the West is to burn slash. If excessive
volumes of slash arc left due to the lack of market these
slash burnings can become a significant air pollution problem,
at least in appearance.
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-10-
In the West, slash abatement for forest fire protection and
reforestation is required by law. If the removal of these
residuals is impaired by the market so that rather than receiving
a value they become an additional cost burden the added cost
will be borne by the public in the price of other products
from the forest, that is lumber and plywood. Therefore, the
product charge will be inflationary on lumber and plywood
prices and be borne by the home owner in the final analysis.
Summary, Conclusions and Recommendations
I have tried to show a logic for concluding that the proposed
product tax will worsen forest utilization in the West and
thus wdste forest resources rather than conserving them.
It will not decrease the number of acres harvested because
the acres are not harvested primarily for chip production.
The proposed tax will have an inflationary impact on lumber
and plywood prices.
Your committee is to be commended for its sensitivity to a
need to understand the forest and mill residual issue. Our
industry sincerely appreciates your request for our opinion
and assistance. We realize there is far too little information
readily available about the overall economics of timber supply,
but as I believe you may appreciate from the testimony of
others at this hearing and from your contacts with the Forest
•Service there is adequate information describing our industry's
improvement in utilization as markets for the residual material
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-11-
have improved during the past two decades. I recommend you
avail yourself of this information and make a thorough
evaluation of the impact of the proposed tax against the
benefits that might be real:zed in managing the municiple
solid waste problem.
I realize that this has beer a cursory review of the issue,
but I assure, you that our industry stands ready to assist
in the development of more comprehensive data for your
consideration.
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TESTIMONY OF THE
METROPOLITAN SERVICE DISTRICT OF PORTLAND, OREGON
PRESENTED BY
PAUL NORR
SOLID WASTE COMPLIANCE OFFICER
BEFORE THE RESOURCE CONSERVATION COMMITTEE
THE FEDERAL INTERAGENCY COMMITTEE ESTABLISHED UNDER
PUBLIC LAW 94-580
NOVEMBER 21, 1977
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My name is Paul Norr. I am the Solid Waste Compliance
Officer of the Metropolitan Service District of Portland,
Oregon. Our address is 1220 S,W. Morrison, Room 300, phone
(503) 248-5470. Prior to coming to the District, I was
employed as an attorney by the Public Utilities Commission of
Ohio and did work as a member of the staff of the Senate
Committee on Labor and Public Welfare in Washington, D.C.
The MSD is a municipal corporation charged with managing
the disposal of all solid waste' and liquid waste in the
Portland metropolitan area. I am here today on behalf of the
district to ask for your help.
In short, we have too much garbage. We, as a local
government, would like the Committee to recommend to the
President and to Congress, a legislative package that wiil
promote the reduction, reuse, and recovery of waste materials.
As a local government, it is difficult for us to influence
the amount and types of materials that go into products and
packages.
The district, referred to locally as USD, was established
in 1970 by popular vote of the citizens of MSD under authority
of state law. Although our geographical area includes parts
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Page 2
of three counties, and includes twenty-six municipalities,
we are certainly a local jurisdiction in comparison to the
federal government.
Local solid waste management has traditionally been
approached from two directions: collection and disposal.
Recently, efforts have been directed toward incorporating
resource recovery into the management process. Collection,
disposal and resource recovery all deal with the problem of
what to do with waste once it has already been generated.
Thus, solid waste management now only deals with the symptoms
of the waste problem and does not focus on the cause.
The cause of all our solid waste problems is that we,
as a collective group of people, generate materials of many
shapes and sizes without enough concern for what will happen
to these materials once they have outlived their immediate
usefulness. And please do not lose sight of the fact that
every piece of these materials that we generate has to
eventually go somewhere.
These wastes that we generate are really the end result
of an economic process. And, as you are well aware, the
economic process of production, distribution, and consumption
is increasing at a rate that is putting a serious drain on
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Page 3
our available energy sources, and in a manner that is negatively
impacting our environment.
The benefits of waste reduction, increased recycling and
reuse are obvious. A decrease in the amount of waste generated
means less need for new public landfills. Landfills are getting
costly to operate and new sites that are environmentally accep-
table are hard to find. And no one wants the new landfill in
their neighborhood. Further, less waste means less litter.
The Oregon Bottle Bill is a good example of this concept
actually working. And the most important benefit of waste
reduction is that reuse or less use means that less energy
will be used to generate another ::ound of waste.
The E.P.A. manual entitled "Decision Makers Guide in
Solid Waste Management", published last year, on page 118,
discusses four options in waste reduction: (1) product
reuse; (2) reduced material use in products; (3) increased
product life; and (4) decreased product consumption. All
four of these options also apply directly to packaging. We
believe that product and packaging changes can promote all
four of these options.
The concept of adding a product,disposal or recycling
charge to a product or package a-, the time of its sale is
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Page 4
appropriate. Again, the Oregon Bottle Bill shows this can
work. It forces the purchaser/user to pay for disposal regard-
less of the method of disposal. (In other words, you can't
avoid disposal costs by putting it in someone else's trash can.)
Also, it allows a consumer to make an informed decision with
regard to disposal costs at the time of purchase by relating the
costs of disposal to the overall cost of the product. And
perhaps most importantly, it forces a public awareness that
when we consume goods, we create waste, and that it does cost
money to dispose of or recycle that waste.
I would like to give you a brief example of how purchasers
of products often avoid disposal costs. MSD runs a scrap tire
porgram designed to control the flow of scrap tires from the
user to disposal. We find that the actual disposal costs are
absorbed primarily by either the scrap tire carrier, who goes
around and picks up the tires, or by the processor, who grinds
the tires prior to landfilling or recycling. Neither of these
people have the capability to pass the cost back up the stream
to the person who is actually throwing the tires away. Tires
have a high disposal cost, and when an attempt is made to pass
that cost back to the disposing public, the public protests by
refusing to pay the high cost. Instead of getting the scrap
tires into our controlled waste stream, we find the tires dumped
in a ravine or along the highway in an isolated spot. It seems
to us that a product charge, wherein the product user pays for
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Page 5
disposal prior to use of the product, would help avoid this
type of public behavior.
There are indeed some problems with beginning any kind
of waste reduction activities. There are problems with
affecting consumer buying and waste generating habits. These
problems should not be minimized. The major problem for us
at MSD is that it is frustrating to attempt to influence
public waste generating habits at a local level. A number
of city and county solid waste management plans that we see
from around the country are in part based on the finding that
local governments are not in a position to change consumer
habits which create the conditions of waste generation. We
feel that a national effort is needed.
I have seen statements published that predict that new
packaging requirements or taxes will force an alteration of
some of our production and distribution systems. This may
be true. But, if these systems cai adjust, then there is no
real problem. If they can't adjust, then you should seriously
question at what energy and environmental costs we should
continue to use wasteful production and distribution systems.
Our resources are not infinite.
It has been suggested that product and packaging legis-
lation will perhaps conflict with resource recovery efforts. We at
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Page 6
USD conclude that this is not the case. On the contrary,
waste reduction and resource recovery are highly compatible
efforts and should be used hand in hand in an attempt to
alleviate our solid waste problems. A sound solid waste
plan - particularly a national plan - should involve all
possibly beneficial programs, including reduction, reuse,
and recovery. Only as a last possible alternative should we
be putting any more resources into'the landfill and covering
thei.i with dirt. As to the argument that product charges
would make resource recovery efforts economically unattractive,
we say that there is simply more garbage out there than we
know what to do with. Product charges, if the money comes
back to the local level, can help pay for resource recovery.
That brings me to the difficult question of how to
collect and what to do with the product or packaging charges.
It seems undesirable co have a big bureacracy established to
collect and redistribute these iunds. More money earmarked
for local disposal programs would certainly help us, but we
have some concerns about how a system like this ought to be
administered. We would prefer to see a uniform, national
program administered on a state level - much like the col-
lection of a stata sales tax. The state could then, perhaps
with federal guidelines , direct the money toward wasts
reduction, reuse, recovery, and disposal efforts. We also
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Page 7
suspecb this would be a much more highly visible and better
understood program if the money generated by the product or
packaging charge never left the state. In other words, we
are asking your help in establishing a national policy and
philosophy that can be administered on a state level.
In summary, the MSD of Portland recommends a national
product and package charge program that will promote the
reduction, reuse, and recovery of waste materials. As a
local government unit, we feel we are not in a position to
influence consumer habits on our own, although we would like
to be an active participant .:n a national program. We do
feel, however, that the collection and distribution of funds
should be handled at the state level.
Thank you for the opportunity to appear today. I will
be happy to try to answer any questions you might have,
-------
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IHL ASSOCIATION OF
1817 N.W. IRVIfcG, POKTLAhD,OREGOU 97209
Oral testimony on Solid Waste Product Charge Legislation
Presented to the Resource Conservation Committee, Nov. 21, 1977-
Kr./Ms. Chairperson and committee members:
I am Judy Roumpf representing the Association of Oregon Recyclers.
The Association is made up of educators, citizens, government officials
and recycling organizations, both profit,and non-profit, rural and uroan
throughout Oregon. Oregon Recyclers1 purpose is to further the concepts
of reduction, reuse, and recycling of solid waste. The Association
strongly supports the implementation of a solid waste product charge.
We have sabmitted in writing a detailed review of the many facets of
product charge legislation; my oral comments will address three points.
A product charge with reductions based on amount of recycled content
in a product would have a very positive effect on recycling industries.
Recycling efforts now often suffer from lack of demand for recyclable mate-
rial and inadequate prices to cover the costs of handling. History shows
that stable markets ^nd gooc prices are conducive to more recycling. The
proposed product charge would create a strong and steady demand by manu-
facturers for recyclable materials. With higher prices paid for recyclables,
operation of recycling centers in areas distant from markets woulc. become
feasible. Recent development of recycling collection systems by garbage
haulers and local governments are encouraging, i-iany of these systems
initiated on an experimental basis could oecome permanent as a result of
the economic stability brought on by tne product charge.
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wuch development of recycling is dependent on capital. Capital is
needed to establish and expand collection systems, redemption centers and
reprocessing systems. Capital is needed for energy recovery pursuits and
the xore traditional activities of solid waste management. The demands
already existing for funding in the solid waste management area coupled
with the puroose for a product charge (i.e., to cover the cost of ultimate
disposal) mane it imperative that the revenues generated by such a charge
be earmarked for solid waste activities. Several options for revenue
dispersal within the solid waste realm exist. Funds could be redistributed
to local governments for continued operation of solid waste programs.
Oregon Recyclers encourages that funds be earmarked for establishing reuse
and recycling collection and processirg systems and educational programs.
Another option would be to create a grant or loan program for use in
industries levied a product charge to convert to reuse or recycling systems.
The Association of Oregon Hecyclers stresses that reuse should occur
before recycling. The continued use of a product in its original state
is even more environmentally sound th;tn reprocessing it into the same or
similar product. Significant energy and disposal savings nave been realized
through the use of refillables in the beverage industry. Efforts in Oregon
in reuse are making gains. Recycling organizations in Eugene which have
been the sole supplier of containers -o several local natural juice companies
are now expanding. And in Portland through the cooperative efforts of
government and a recycling firm a bottle washing facility similar to the
Berkeley, CA project is being established. We are concerned that the product'
charge not create such a demand for recyclable material that reuse is pre-empted.
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Either the product charge should be structured to include an economic
incentive for reuse or a separate tax credit should be established for
those manufacturers who reuse.
In summary, we advocate that you recommend implementation of the solid
waste product charge. We note that its effect on recycling would be
positive and significant. Derived revenues should be earmarked for solid
waste management activities. And special emphasis should be placed on
incentives for reuse of products.
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97209
Written review of Solid Waste Product Charge Legislation
Submitted to the Resource Conservation Committee, Nov. 21, 1977
Oral testimony of a different content also presented.
(The order of the following statements corresponds to the questions
developed by the Resource Conservation Committee October 20, 197?.)
The Resource Conservation Committee should strongly recommend that
legislation for a solid waste product charge be developed and passed.
Considering the present manufacturing and marketing systems, it is i-nperative
that a product charge be levied at the national level in order to be effec-
tive and equitable. State and Local governments should promote consumer
awareness of the product charge(
Beverage container deposit -egulations and the proposed product charge
both create consumer awareness of solid waste. Aside from that point the
concepts are quite different. A product charge is designed to levy fees
which would cover the cost of disposal and create economic incentives for
recycling. Beverage container deposit regulations provide a collection
system to divert containers fro'n the solid waste stream. And depending on
"bottle bill" design, not only recycling but also reuse of containers is
encouraged. Unless the product charge is redesigned to provide for recycling
collection systems and to encourage reuse of products before recycling,
beverage container deposits could coexist without conflict with the product
charge and both should be established. Federal, state and/or Local "bottle
bills" could be compatible with a national product charge.
Throughout this review points are raised which warrant further research.
Research should continue on a)effective use of the collected revenues,
b)a fee structure or tax credit which would encourage reuse before recycling,
and c)the combination of product characteristics that should be used as the
basis for the charge so that environmentally sound products are indeed
encouraged.
An effective product area initially for the product charge would be
on the non-durable goods, paper products and packaging, as researched by
EPA and summarized in the Fourth Report to Congress. These categories
represent a significant part of the waste stream, yet the impact of a
product charge would not be as economically severe on these products as,
for example, on durable goods. With the exception of scrap metal goods,
these are the products most frequently addressed by present recycling
efforts. Current collection sjstems could be expanded and improved to
respond to the demands for recycled material resulting from a product
charge.
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The amount of the product charge should approximate the cost of disposal.
This being the basis for the $26 per ton, it seems reasonable. In paper
products weight should be the basis for the charge. In packaging the
product characteristic on which to base an equitable charge is not as clear
cut. Charge based on unit would prevent undue favoritism to lighter weight
materials (such as plastic) over alternate packaging which might be more
reuseable and recyclable (such as glass). There are some disadvantages,
however, to a charge based solely on unit. There would be no disincentive
to excessive packaging in each unit. Further, it is known that less pack-
aging is used to enclose a certain amount of product in one container than
to enclose that same amount in many smaller containers. A strict unit
charge would not necessarily encourage the packaging and consumption of
products in bulk quantities. A unit charge is considered for rigid con-
tainers, but what about flexible materials such as plastic bags? Plastic
bags could be substituted for many rigid containers; the product charge
should be designed to discourage the use of environmentally unsound
packaging.
The Association of Oregon Recyclers recommends that criteria for a
product charge on packaging be established which would include the energy
demand, recycled content, reusability and recyclability of the material or
container in question. These criteria would be especially useful in evalu-
ating materials which can be used interchangeably in packaging. The criteria
should be applied not only to materials used in packaging but also to the
final package. 1'iaterials may individually be recyclable, but when combined
with other materials become contaminated for recycling. Dual material
packaging should be included in the product charge. The use of single
material packaging should be credited for it aids in source separation and
recycling processes.
The product charge should be levied as near the raw material stage as
administratively possible. It is recognized that for some materials it
would not be possible to calculate at the raw material level how much of
it goes into paper products or packaging. The charge should then be levied
at the first manufacturing level where it is possible to determine the use
of the material. Levied as early in the manufacturing process as possible
will encourage wise resource use throughout the economic system.
The product charge should most definitely be reduced in relation to
the amount of recycled material in the products covered by the charge.
The charge reduction should be equal on a percentage basis to the amount
of recycled material in the product (e.g., product charge on a product
containing ^0% recycled material would be reduced
The product charge should be phased in by the magnitude of the charge.
Too long a phase-in period would dilute the effectiveness of the charge's
waste reduction incentives. A 5-year period, however, would allow time
for industrial conversion to recycled materials before the full charge
would be levied. At the same time a yearly increase of 2Q~f> in the charge
is significant enough to encourage the waste-reducing activities a product
charge is meant to instigate.
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The concept of a product charge is to levy fees at the point of product
maufacture to cover the ultimate cost of disposal. It is imperaLive that
the revenues generated through a product charge be used for solid waste
management activities. Several option within the solid waste management
realm exist. Funds could be redistributed to local governments for con-
tinued operation of solid waste programs. Use of the money at the local
level depends on the existing mix of private and government activity in
solid waste management. Oregon Recyclers encourages that fund:; be ear-
marked for establishing reuse aid recycling collection and processing
systems and educational programs. Another option would be to create a
grant or loan program for use in industries levied a product charge to
convert to reuse or recycling systems. With the high demands for funding
in the solid waste management area, no consideration should be given to
placing product charge revenues in general funds.
Vital to any good program are effective administration and strict
compliance. Regulations necessary to enforce a solid waste product charge
should be included in the proposed legislation or in administrative orders.
Adequate funding must also be provided for effective enforcement.
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To: RESOURCE CONSERVATION COMMITTEE
SUBJECT: PRODUCT CHARGES LEGISLATION
From; PAUL SCOTT TREAS. ASSOCIATION OF OREGON RECYCLEPS,
MEMBER RESOURCE RECOVERY ADVISORY COMMITTEE, LANE COUNTY,
OREGON, EMPLOYED WITH NORTHWEST PAPER FIBERS.
Cn an individual level the economic consequences of
product charge legislation will vary from good for those
persons exercising a certain amount of environmental con-
cern in their purchasing practices to not so good for those
persons still buying non-recyclable packaging and one use
items. According to the Fourth Report to Congress even the
most wastefull families would only pay about 060 per year
more.
Recycling industries will no doubt enjoy a significant
increase in volumes of materials affected by product charges.
There will certainly be an increase in employment in these
fields.
Product charge legislation could result in very favor-
able environmental conditions,i.e. a reduction in the amount
of materials being landfilled, an increase in the volumes
of recycling industries, and energy savings corresponding
to these increases. An extended supply of natural resources
can also be expected.
To keep the costs of administering the program down I
go along with the view expressed in the Fourth Report to
Congress which states only paper products and non-paper
packaging should be included. These include the items most
recyclers are already handling so it would be only a matter
of expanding services already on line in order to take care
of increased volumes caused by a product charge.
Economic incentives should be employed to persuade
industries to switch to the use of recycled materials in
their manufacturing processes. This can be done by reducing
the product charge in relation to the amount of recycled
material in the product, '"re recyclability as well as the
potential for re-use of the finished product should also
be considered as resons for a reduction in the product
charge.
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Product charge legisls.tion put the responsibility of
waste reduction on the pocket books of those most wastefull.
It is with- that in mind thsit I do not endorse the rebate
of revenues to individual households through writeoffs on
tax returns. Instead I woul.d like to see the money allocated
to local governments for u;se in solid waste management with
percentages possibly earmarked for establishing recycling
programs as well as educating the public on solid waste
issues.
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THE PRODUCT CHARGE: A FIRST STEP
Testimony before the iteoouroc Conservation Cofflission
November 21, 1977
Portland, Oregon
Jeremy Brott
Santa Uosa Recycling Center
Representing Northern California
Becyclers
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THE PRODUCT CMRGkli K FIRST Sl'lit-
Packaging has become a serious problem in America today. In
19?1), Americans disposed of 1*1.7 million tons of containers and
packan:cn--'K)''> of the total product waste disposed of that year. •
Since 195B, our total consumption of packaging materials has more
than doubled, increasing 63.5,'° per capita in that period.
Packaging is "the country's largest single industrial user of paper
and glass; it is one of the two largest users of plastics! and it
is the third largest user of atee-1."
The above, coupled with our increasing dependence on limited
resources, demonstrates our need to make conservation competitive
in the marketplace. In 1973 the United States was importing over
W'» of !'*• key raw materials, incLudir.p cobalt, aluminum, platinum,
tin, nickle, and ?inc. By 1985, the United States could be
dependent on imports for half of all its raw materials, one govern-
ment offical has said.
Government has been promoting anti-conservation policies. Haw
materials enjoy the benefits of depletion allo.vanoes, capital ^ai
taxes, foreign tax credits, and favorable transportation rates.
Secondary materials benefit from none of these.
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-2-
This value of the resources lost to the future should be included
in the cost of packaging. Since we are stealing these resources
from future generations, we should pay these "larcenous costs".
To further assist conservation's competitiveness, consumers should
pa.y the full costs of the packaging bought at the time of purchase,
not when they pay a garbage bill, nor when their propertv taxes
finance another sanitary land fill.
Current government policy now stimulates consumption of virgin
materials! any new policy should be formulated to stimulate
conservation. Policies to increase the use of recycled materials
should be adopted. Incentives should be given to improve recyc-
lability of products.
While recycling is important, the primary goal should be the
reduction in packaging generated. Energy and materials conservation
is best accomplished by developing marketing systems that do not
require imputs of either of these resources. When a package is
used, reuse should be optimized. Keuse of containers will lead
to a reduction of raw materials consumption, air and water pollu-
tion, and product energy use compared to recvcling. 'I'his third
level of conservation, recycling, allows the recirculation of
materials, but at a higher cost than the previous two.
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-3-
A product charge should be implementod in order to facilitate
recycling. It should be added to the cost of a package at the
design and manufacture step of production. Marketing decisions
regarding form, function and cost of packages are made at this time.
Having the changes added here will have the greatest impact in
conservation of resources. At this stage, the process in still
centralized, simplifying collection and monitoring of the fee.
The EPA has demonstrated that by exempting recycled materials,
a product charge will increase rates of recycling. This selec-
tivity has a positive effect on materials use, but more can be
accomplished.. Reductions in the surcharge should be extended to
industries that standardize the content of their materials to
facilitate recycling. The plastics market would benefit from this.
Because of the variety of plastios made today, there is little
market for consumer recycled plastics. Simplification or standardi-
zation of additives could create more accessible markets. Also,
this could restrict the use of potentially hazardous additives
(such as cadminum-based pigments) that limit the uses of that
recycled material.
Recycling can be facilitated by the favorable trsat-nent. of containers
made of a single material. Package types like the blister-package
or the wood-cardboard crate must be disassembled before the dif-
ferent recyclable papers can be used. This adds to costs and to a
potential contamination problem, which weakens markets for suppliers.
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While recycling is a commendable first step, the reuse of containers
is a higher goal. The product charge would support rouse, since
the charge would apply only once, when the container was manu-
factured, and not on subsequent refiJlings. The charpe should
be compatible with any deposits that might be added to the con-
tainers to further promote their return for reuse. The multiple
benefits from the reusable beverage container are e^Umted by
the EPA to include a ^9;4 reduction in raw materials consumed, 48/<
decrease in energy used, 7Z'.'« reduction in industrial solid waste,
^6$ reduction in atmosphere emissions and a 20/j reduction in the
7
containers contribution to post-consumer solid waste.' Annual
energy savings of 1.4 trillion BTU's have been computed in con-
o
nection with Oregon's Bottle Bill.
Selection for standardized containers that can be interchanged
between different companies should also be included. This standardi-
zation has several benefits. It simplifies the sorting and storage
process for the retailer. The collection, cleaning and availia-
bility of these bottles is a potential for loral jobs. Experience
in Oregon shows that it promotes local and regional breweries,
thus preserving local jobs and production in an industry which has
become extremely centralized in recent'years.
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-s-
The product charge is only one element of a wholistic solution
to solid waste problems. The entire packaging concept as we know
it today needs to be questioned and reformed. The external costs
of disposal, resource depletion and packatcinr;1 s contribution to
our increasingly en»rK.y-intensive industries, need to be internali-
zed into the market price of a product. tt.y making conservation
competitive through this internal ization of co.-jts, we rar. create
a philosophy of packaging that, net only server; the present consumer,
but also the future consumer, local industry, energy conservation
and the environmental quality of our homes.
-------
1. Environmental Protection Agency, Kcao_urce iiep.o.'i.VUlX. a_nd. W.Tjte
Reduc tion, £ou_rlh Keport _Lo f-JiO^ress.. P. Is
2. Darnay, Arsen and William E. Franklin, rh<> Kp_Le o_f facka.i'i OP:
in. Solid WjiiiJie Management, 1J6£ to 19/'>. U.S. Department
of Health j liducatiori, and" Wo'ltare. l"9b9. pp. I0'>,106.
3. MilRrom, Dr. Jack and Dr. Aaron P.rod.y, £xecuJJ..ve. Su
in. Perspec Liv_e . A report to J'hertd Hoc Goiiraittee
. _
on Packaging. Arthur D, Little, Inc. f>burar/
p. S-8.
k. "Suppose Other Countries Cut Off U.S. Frrm i
-------
TESTIMONY OF ASSOCIATED JREGON INDUSTRIES, INC.
AND
THE OREGON DETAIL COUNCIL
To the Resource Cons;rvation Committee
RE: Solid Waste Produ:t Charge Legislation
Portland, Oregon -- November 21, 1977
My name is Thomas C. Donaca, General Counsel of Associated Oregon
Industries, Inc., and I appear here today representing the Packaging
Subcommittee of tne Association's Solid Waste Committee.
First, your initial notice of this most important meeting was
first sent out October 20, 1977. However, it was not sent to us, and
we only became aware of the meeting wnen another, out of state, association
called to determine if we were going to testify. Upon being advised that
AOI, the most important association representing all sectors of the Oregon
economy relating to packaging, had not been invited they sent js a copy of
their invitation. We were unable to take any action until November 7.
Frankly, that is too snort a time to provide responsive answers to the
questions you have raised. In view of the importance of the issue and
the lack of time which we have been given to prepare, we intend to advise
our Congressional delegation of your lack of concern about industry
resident in the state in which you intend to hold one of your three public
hearings.
Second, we have tried, however, 1.0 be responsive in the limited time
available to your questions and we have attempted to respond generally and in
addition have devoted attention to solutions and conditions in Oregon which
are responsive to the issue:
1. Throughout the questions you discuss a "charge" on consumer
products and packaging. That "c,large" is a "tax" and we do not agree
that the problems of solid waste disposal will be solved, or even
continued...
-------
-2-
alleviated, by the imposition of a tax on all items of packaged
goods, or their packages only. We therefore respectfully submit
that you should recommend against such a tax at the national level
and you should not urge state or local governments to promote such
a concept.
2. We believe that alternatives to your product tax already exist
in the form of increased energy, labor,transportation and other
costs which are generally causing increases in the cost of goods and
their packaging. The person responsible for the application of
packaging is also sensitive to the cost of his product in the market-
place. Thus, we believe the market system is already providing the
incentives, or disincentives, if you will, to the continuation of a
trend to overpackaging. However, there is little real prospect that
the need for packaging will be reversed. More vegetables will
undoubtedly travel in plastic films; more drug prescriptions will be
recompounded; more flashlight batteries will be capsuled on blister
pack cards. As to the blister pack, part of this issue is that the
retailer would prefer not to have it, the supplier would prefer not
to have the added cost, but one segment of our society has required
it—shoplifters. Here the packaging cost is an attempt to ameliorate
another social problem.
3. The present shipping container, and other packaging, have grown
so rapidly in use because they reduce the costs of distribution.
Manufacturers, processors, whoesalers and retailers, faced with ever-
increasing costs and regulations, have to demand safe and clean
protective packaging that fits into highly automated shipping and
continued...
-------
-3-
distribution systems. They must insist on lower handling costs and
on displayable, easily recognized units that fit into today's mass
marketing. The products you buy are cheaper because of the use of
containers. It is fine for all of us to dream of the barrels, baskets
and bundles of the old corner grocer; but at today's wage levels few
customers can afford to buy that grocer's foods and sundries if they
were hand-filled in a sack by a c'erk. That is why corner grocers have
virtually disappeared and mass marketing has taken over. Thus a sales
tax on this vehicle of mass marketing, the container, would increase
the cost of retail purchases.
4. Some have urged greater use of returnable containers. Federe.l
laws and regulations forbid the r;use of containers for meat, meait
products, and certain dairy products, for health sanitary and
inspection reasons. This tax would increase the cost of these items.
But there are even more compelling reasons for not taxing containers.
The use of returnable containers on a large scale would farce all
retail stores to be collection places for used packages, awaiting
shipment back to the manufacturer or processor. Thus stores of all
kinds would have to devote large areas to the storage of what was once
waste. Visual pollution could invade our general shopping areas and
potential contamination of our food shopping areas. In Oregon, our
bottle bill has provided us with nard information on tne effects of
returnable containers in this respect. Me know that our retail
grocers already have a problem wth returnables in unsightliness,
possible contamination, and spacsi and manpower limitations. Any
further burden placed on them is, in our opinion, untenable.
continued...
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-4-
5. While paperboard (and paper) make up a substantial part of
solid wastes, they are not the urgent and compelling reason for
Oregon's solid waste problems. Tne ban on the burning of wastes
(which we endorse) has inflicted a veritable mountain of leaves, grass
clippings, weeds, and other garden wastes which we have in abundance
as well as construction and wrecking debris, clog our landfills. We
cannot solve the problems of disposal of this type of solid waste
by inflicting a scattering of special taxes on popular fragments
of the problem. We must attack the whole problem in a uniform manner.
6. We suggest that real solutions can be obtained through programs
tailored to meet local problems, taking into consideration existing
conditions in the local area. In Oregon, almost universally, solid
waste collection is handled by private collectors. The only function of
government is to franchise the collectors operational area and his
conditions of operation, to the extent this is done at all. The
private collector charges a fee for his services which include
pickup and transportation (approximately 80% of the user charge) and
disposal (approximately 20% of the user charge). The collector out
of user fees received pays a "tipping" charge to defray the cost of
operation of the disposal site. As we move to more mechanical solid
waste separation at disposal sites, absolute cost of disposal will
rise, but we do not anticipate a major change in the percentage
allocation as labor, equipment and fuel costs are also rising. Thus,
unlike many other areas of the country who subsidize garbage collection
on 9 municipal basis out of local tax collections, wnich are understand-
ably hard to increase, Oregon has an almost self sufficient system
based on user charges.
continued...
-------
-5-
Additionally, Oregon has givea impetus to local government efforts
to upgrade disposal operations, including solid waste separation
facilities, by creating, pursuant to Article XI-H (1969) of the Oregon
Constitution, ORS 468.195 to 468.260, the State Pollution Control Bond
Fund (See Exhibit A). Pursuant to this law, the state hai established
a 30% grant and 70% loan program for construction of solid waste
disposal facilities. Projects eligible for assistance must meet
the following criteria:
The project or facility is part or parcel of or complementary
of a Department approved and locally adopted Solid Waste
Management Plan.
The project or facility has proven or demonstrated technical
feasibility.
The project or facility is within local economic constraints
and abilities to administer.
The project or facility must be approved by the Department.
Priority of eligible projects for state assistance for
planning and construction of pollution control facilities for
the disposal of solid waste shall be based upon the following
criteria:
A. The project or facility is replacing existing
inadequate or unacceptable methods of solid
waste dispcsal and thereby results in improved
environmental quality.
B. The project or facility recovers resources from
solid wastes.
continued...
-------
C. The projected facility will establish improved
solid waste management practices.
D. The need for state assistance is demonstrated.
Under the grant program, almost all counties have completed a
comprehensive inventory of their solid waste disposal needs and have,
or will soon submit, a comprehensive plan for county-wide disposal.
For the private sector the state has adopted the Pollution Tax
Credit Program which provides state income tax credits for the use,
recycling or preparation for use of solid waste. Tax credits for
qualifying facilities are in the amount of 5% per year of the certified
cost but not to exceed 50% of cost. This provides relief over a 10
year period.
Also, in the Portland metropolitan area there has been created,
by vote of the people, the Metropolitan Service District which has as
one of its major responsibilities, solid waste control. One of its
most successful programs to this time is its tire disposal program. The
tire program is based on franchising haulers of tires and charging all
persons disposing of tires a fee. Mo tax is involved. Also, there
is a major metal shredder in Portland and the Metropolitan Service
District and local recyclers have directed large volumes of abandoned
and discarded old car bodies and used appliances to the shredder and
these have almost ceased to be a problem. Shortly a major industry,
utilizing the fuel fraction from a solid waste facility to be
developed by M.S.D., with the use of Oregon Pollution Bond funds, will
be producing about 25% of their steam needs and 20,000 kilowatts of
electrical power.
continued...
-------
-7-
Lane County, too, has developed its own county-wide program and
we believe several other counties will develop similar plans in the near
future.
These regional programs financed by user charges, as well cis with
planning and capital assistance from the state, provide both stability
and direction to our solid waste programs and have created a situation
in which regional problems can be solved.
In short we feel that the same measures that are bringing about
proper sewage disposal and treatment in our state, should be employed
to bring about proper solid waste disposal and treatment. To do
otherwise would be to fragment and weaken the attack on the solid
waste prooletn and must result in
1. imposing a grea-: cost on users of shipping containers
and packaging;
2. forcing a higher cost distribution system on our
state's economy,
3. forcing higher costs on consumers;
4. complicating thu disposal of solid wastes.
Associated Oregon Industries, Inc.
2187 S. W. Main St.
Portland, OR 97205
phone: 227-5639
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Art.XI-G § 3
CONSTITUTION OF OREGON
Section 3. Sources of revenue. Ad
valorem taxes shall be levied annually upon
the taxable property within the State of
suant to this Article and the interest, there-
on The Legislative Assembly may provid,.
other revenues to supplement or replace, lu
Oregon in sufficient amount to provide for whole or m part, such tax levies
the prompt payment of bonds issued pur-
K V V 3 V
[Created through HJR No 8, [963
people Ma> 15, 1964!
is ), adojitt^i nv
EXHIBIT A
Sec 1. State empowered to lend credit for financing
pollution control facilities
2 Only facilities seventy percent self-supporting
and self-liquidating authorized
ARTICLE XI-H
POLLUTION CONTROL
Sec.
3 Authority of public bodies lo leccive funds
4 Source of revenue
5 Bonds
6 Legislation to effectuate Article
Section 1. State empowered to lend
credit for financing pollution control
facilities. In the manner provided by law
and notwithstanding the limitations con-
tained in sections 7 and 8, Article XI, of this
Constitution, the credit of the State of
Oregon may be loaned and indebtedness
incurred in an amount not to exceed, at any
one time, one percent of the true cash value
of all taxable property in the state.
(1) To provide funds to be advanced, by
contract, grant, loan or otherwise, to any
municipal corporation, city, county or agency
of the State of Oregon, or combinations
thereof, for the purpose of planning, acquisi-
tion, construction, alteration or improvement
of facilities for the collection, treatment,
dilution and disposal of all forms of waste in
or upon the air, water and lands of this
state, and
(2) To provide funds for the acquisition,
by purchase, loan or otherwise, of bonds,
notes or other obligations of any municipal
corporation, city, county or agency of the
State of Oregon, or combinations thereof,
issued or made for the purposes of subsection
(1) of this section.
(Created through H J R. No 14, 1969, and adopted by
people May 26, 1970]
Section 2. Only facilities seventy
percent self-supporting and self-
liquidating authorized. The facilities for
which funds are advanced and for which
bonds, notes or other obligations are issued
or made and acquired pursuant to thi5
Article shall be only such facilities as
conservatively appear to the agency desig-
nated by law to make the determination to
be not less than 70 percent self-supporting
and self-liquidating from revenues, gifts,
grants from the Federal Government, uatr
charges, assessments and other fees.
[Created through HJR No 14, 1969, and jdopM by
people May 26, 1970)
Section 3. Authority of public
to receive funds. Notwithstanding the
limitations contained m section 10, Article
XI of this Constitution, municipal corpora-
tions, cities, counties, and agencies of the
State of Oregon, or combinations thereof,
may receive funds referred to in section 1 of
this Article, by contract, grant, loan or
otherwise and may also receive such furxU
through disposition to the state, by sale, loan
or otherwise, of bonds, notes or other obliga-
tions issued or made for the purposes *M
forth m section 1 of this Article
tCreated through H J R No J4, I9G9. and 'adoptoi fcy
people May 26, 19701 <•'* -* — -
"':W«W'*>"i
Section 4. Sources of revenue.- Ad
valorem taxes shall be levied annually upon
all taxable property within the State of
Oregon in sufficient amount, to . provide,
together with the revenues, gifts, grants
from the Federal Government, user charges,
assessments and other fees referred to in
section 2 of this Article for the payment of
indebtedness incurred by the state and the
interest thereon. The Legislative Assembly
may provide other revenues to supplement
or replace such tax levies. -
[Created through H J R. No 14, 1969, and adopted by
people May 26, 19701
Section 5. Bonds. Bonds issued pur-
suant to section 1 of this Article shall be thrf
direct obligations of the state and shall be m
such form, run for such periods of time, and
bear such rates of interest, as shall be
provided by law Such bonds may be refund-
ed with bonds of like obligation
[Created through H J R No 14, 1969, and adopted by
people May 26, 1970]
-------
CONSTITUTION OF OREGON
ArtXIV (f 2
Section 6. Legislation to effectuate
Article. The Legislative Assembly shall
enact legislation to carry out the provisions
of this Article. This Article shall supersede
all conflicting constitutional provisions anc
shall supersede any conflicting provision of
a county or city charter or act of incorpora-
tion.
(Created through HJR No 14, 1969, dud ddupMl b>
people Ma> 26, 1970)
ARTICLE XII
STATE PRINTING
Section 1. State printing; State
Printer. Laws may be enacted providing fo~
the state printing and binding, and for this
election or appointment of a state printer,
who shall have had not less than ten years'
experience in the art of printing. The stati:
printer shaft receive such compensation as
may from time to 'ime be provided by law.
Until such laws shall be enacted the state
printer shall be elected, and the printing
.done as heretofore provided by this constitu-
tion and the general laws
[Constitution of 1859; Amendment proposed by SJR.
No 1, 1901, and adopted by people Jure 6, 1904,
Amendment proposed by initiative petition filed Feb 3,
1906, and adopted b> people June 4, 1906]
ARTICLE XIII
SAIARIES
Section 1. Salaries or other compensation ol
state officers. [Constitution of 1859, Repeal proposed
by S.J R No 12, 1955, and adopted b> people Kov 6,
19561
Sec 1. Seat of government
ARTICLE XIV
SEAT OF GOVERNMENT
Sec 2 Erection of state hous*> prior to 18f>5
Section 1 Seat of government, [Constitution cf
1S59, Repeal proposed by SJR No 41, 1957, and
adopted by people Nov 4, 1958 (present section 1 and
former 1958 section 3 of this Article adopted m lieu f
this Article adopted in lieu of former original sections 1
and 3 of this Article)]
Section 2. Erection of state house
prior to 1865. No tax shall be levied, or
money of the State expended, or debt con-
tracted for the erection of a State House
prior to the year eighteen hundred and sixty
five,—
Section 3. Limitation on removal of seat of
government; location of sWte institutions.
1 Constitution of 1859, Amendment proposed by SJR
No 1, 1907, and adopted by people June 1, 1903, Repeal
proposed by S J R. No 41, 1957, and adopted b\ pc-op!e
Nov 4, 1958 {present section 1 and former 1953 s^<-tion
3 of this Article adopted m lieu of this section and
former section 1 of this Article']
Section 3. Location and use ot state
institutions, [Created through SJR No 41. 3957,
adopted by people Nov 4, 1958 (this section, desigrated
as Section 2' by SJR No 41, 1957 and present
section 1 of this Article adopted in heu of farrier
original sections 1 and 3 of this Article), Repeal
proposed by SJR No. 9, 1971, and approved b> people
Nov 7, 1972]
-------
POLLUTION CONTROL
§ 468.210
of the facility properly allocable to the
prevention, control or reduction of air or
water pollution.
(2) The portion of actual costs properly
allocable shall be:
(a) Eighty percent or more.
(b) Sixty percent or more but less than
80 percent.
'c) Forty percent or more but less than
60 percent.
(d) Twenty percent or more but less than
40 percent.
(e) Less than 20 percent.
[Formerly 449 655, 1974 s s c 37 s.4]
STATE POLLUTION CONTROL
BONDS
468.195 Issuance of bonds author-
ized. In order to provide funds for the pur-
poses specified in Article XI-H of the Consti-
tution of Oregon, the commission, with the
approval of the State Treasurer, is author-
ized to issue and sell such general obligation
bonds of the State of Oregon, of the kind
and character and within the limits pre-
scribed by Article XI-H of the Constitution
of Oregon as, in the judgment of the com-
mission, shall be necessary. The bonds shall
be authorized by resolution duly adopted by
a majority of the members of the commission
rt a regular or special meetirig of the com-
mission. The principal amount of the bonds
outstanding at any one time, issued under
authority of this section, shall not exceed
$160 million par value
[Formerly 449 672]
468.200 Form and content of bonds;
refunding bonds. (1) At the request of the
commission, the Attorney General shall pre-
pare a form of direct, general obligation,
interest-bearing coupon bonds of the State of
Oregon to be sold in order to provide funds
for carrying out the purposes of Article XI-H
of the Constitution of Oregon and ORS
468 195 to 468 260 The bonds shall be 'num-
bered and shall be payable at such times and
m such amounts as shall be fixed by the
commission However, none of the bonds
shall mature sooner than six months nor
later than 30 years from issued date. The
bonds shall bear interest, payable semiannu-
ally, at such rates as the commission, with
the approval of the State Treasurer, deems
advisable.
12} In the discretion of the commission,
the bonds may be issued as provided by ORS
286 040. The bonds may be refunded either
prior to or at their maturity dates. In the
event of redemption or refunding prior to
maturity date, the commission is not re-
quired to redeem or refund bonds in the
order in which they were originally issued.
Refunding bonds may be sold in the same
manner as other bonds are sold under ORS
468.195 to 468.260. The issuance of refund-
ing bonds, their maturity dates and other
details, the rights of their holders and the
duties of the Governor, Secretary of State,
State Treasurer and of the commission with
respect thereto, shall be governed by the
other provisions of ORS 468.195 to 468.260
in so far as applicable. Refunding bonds may
be issued to refund bonds originally issued
or to refund bonds previously issued for
refunding purposes.
[Formerly 449 675]
468.205 Advertisement and sale of
bonds. With the approval of the State
Treasurer, the commission shall provide such
method as it considers necessary for the
advertisement of each issue of the bonds
mentioned in ORS 468.195 to 468260 before
they are sold. As approved by the State
Treasurer, the commission shall require such
deposit, with bids, as it considers advisable
and generally shall conduct the sale and
issuance of the bonds under such rules as
the commission may adopt.
[Formerly 449 677]
468.210 Execution of bonds; pay-
ment; deposit and destruction of paid
bonds; where bonds payable; payment of
costs of issuance. (1) All bonds issued un-
der ORS 468.195 to 468 260, including re-
funding bonds and the coupons appurtenant
thereto, shall be direct, general obligations
of the State of Oregon, in negotiable form,
and shall embody an absolute promise to pay
the amounts thereof m any com or currency
which, at the time of payment, is legal tend-
er for the payment of public and private
debts within the United States of America.
The bonds shall be executed with a facsimile
signature of the Governor and the Secretary
of State and the manual signature of the
State Treasurer. The bonds shall bear cou-
pons evidencing interest to become due for
each instalment thereof upon which shall be
printed the facsimile signatures of all said
officers.
(2) Not less than 20 days before the
payment of the principal or interest falls due
on any of the bonds, the department shall
prepare and submit to the State Treasurer,
for verification, a claim duly approved by
-------
i 468.215
PUBLIC HEALTH, SAFETY AND MORALS
the department for the amount necessary to
meet the payment thereof Upon s ich
verification, the department shall present
the claim m like manner as other claims
against the state are presented. The claim
shall be paid out of moneys provided by law
for its payment.
(3) All bonds and interest coupons that
are paid by the State Treasurer shall be
retained and then destroyed as provided in
ORS 238 120
(4) The principal of and the interest upon
all bonds issued under authority of ORS
468.195 to 468260, when due, shall be paid
at the office of the State Treasurer, 3Ut,
with the approval of the State Treasurer, the
commission may designate a fiscal agenc/ of
the State of Oregon in the City and Stafc; of
New York or such other fiscal agency of the
State of Oregon as may be designated by
law, as the place of payment of the bends
and of the interest thereon.
(5^ Interest and costs incurred in is-
suance of the bonds, including engineering,
legal and accounting and other financial
advisory services shall be paid upon approval
by the State Treasurer from the funds
derived from the sale of the bonds and the
capitalization of interest in the incurrence of
such costs is hereby authorized.
[Formerly 449 630; 1975 c.462 3 14)'
468.215 Pollution Control Fund. The.
money realized from the sale of each issue of
bonds shall be credited to a special fun! in
the State Treasury, separate and disunct
from the General Fund, to be designated the
Pollution Control Fund; which fund is here-
by appropriated for the purpose of carrying
out the provisions of ORS 468.195 to
468 260 It shall not be used for any ether
purpose, except that this money, with the
approval of the State Treasurer, may be
invested as provided by ORS 293.701 to
293.776, and the earnings from such in/est-
ments inure to the Pollution Control Sink-
ing Fund.
(Formerly 449 682]
468.220 Department to admin ster
funds; uses; limitations. (1) The depart-
ment shall be the agency lor the State of
Oregon for the administration of the Pollu-
tion Control Fund. The department is hereby
authorized to use the Pollution Control Fund
for one or more of the following purposes'
(a) To grant funds not to exceed 30
percent of total project costs for eligible
projects as defined in ORS 454 505 or sewer-
age systems as defined in ORS 468.700.
(b) To acquire, by purchase, o- otherwise,
general obligation bonds or other obligations
of any municipal corporation, city, county, or
agency of the State of Oregon, or combina-
tions thereof, issued or made for the purpose
of paragraph (a) of this subsection in an
amount not to exceed 70 percent of the total
project costs for eligible projects.
(c} To acquire, by purchase, or otherwise,
other obligations of any city that are author-
ized by its charter in an amount not to
exceed 70 percent of the total project costs
for eligible projects.
(d) To grant funds not to exceed 30
percent of the total project costs for facilities
for the disposal of solid waste
(e) To make loans or grants to any
municipal corporation, city, county, or
agency of the State of Oregon, or combina-
tions thereof, for planning of eligible projects
as defined in ORS 454 505, sewerage systems
as defined by ORS 468 700 or facilities for
the disposal of solid waste.
(f) To acquire, by purchase, or otherwise,
general obligation bond;> or other obligations
of any municipal corporation, city, county, or
agency of the State of Oregon, or combina-
tions thereof, issued or made for the purpose
of paragraph (d) of this subsection in an
amount not to exceed 70 percent of the total
project costs.
(g) To pay compensation required by law
to be paid by the- state for the acquisition of
real property for the disposal by storage of
environmentally hazardous wastes
(h) To dispose of environmentally hazard-
ous wastes by the Department of Environ-
mental Quality whenever the department
finds that an emergency exists requiring
such disposal.
(2) The facilities referred to in para-
graphs (a), (b) and (c) of subsection (1) of
this section shall be only such as appear to
the department to be not less than 70
percent self-supporting and self-liquidating
from revenues, gifts, grants from the Federal
Government, user charges, assessments and
other fees.
(3) The facilities referred to in para-
graphs (d) and (f) of 'subsection (1) of this
section shall be only such as appear to the
department to be not less than 70 percent
self-supporting and self-liquidating from
revenues, gifts, grants from the Federal
Government, user charges, assessments and
other fees.
(4) The department may sell or pledge
any bonds, notes or other obligations ac-
1352
-------
POLLUTION CONTROL
i 468.250
quired under paragraph (b) of subsection (1)
of this section.
.Foin'.erly 4496851
468.225 Investment yield orv undistri-
buted bond funds and revenues. All un-
distributed bond funds and revenues received
as payment upon agency bonds or other obli-
gations, if invested, shall be invested to pro-
duce an adjusted yield not exceeding 'the
limitations imposed by section 103, subsec-
tion (d) of the Internal Revenue Code of
1954, and amendments thereto in effect on
March 1, 1971
[Formerly 44" 6871
468.230 Pollution Control Sinking
Fund; use; limitation, tl) The commission
shall maintain, with the State Treasurer, a
Pollution Control Sinking Fund, separate
and distinct from the General Fund The
Pollution Control Sinking Fund shall provide
for the payment of the principal and interest
upon bonds issued under authority of Article
XI-H of the Constitution of Oregon and ORS
468 195 to 468 260 Moneys of the sinking
fund are hereby appropriated for such pur-
pose With the apprmal of the commission,
the moneys in the Pollution Control Sinking
fund may be invested as provided by ORS
293 701 to 293 776, and earnings from such
investment shall be c; edited to the Pollution
Control Sinking Fund
(2) The Pollution Control Sinking Fund
shall consist of all moneys received from ad
valorem taxes levied pursuant to ORS
468 195 to 468 260. all moneys that the
Legislative Assembly may provide in lieu of
such taxes, Ail Gainings on the Pollution
Control Fund, Pollution Control Sinking
Fund, and all other revenues demed from
contracts, bonds, notes or other obligations,
acquired, by the commission by purchase,
loan or otherwise, as provided by Article
XI-H ot the Constitution of Oregon and by
ORS 468 195 to 468 260
'3) The Pollution Control Sinking Fund
shall not be used foi any purpose other than
that for which the fund was created Should
a balance remain therein after the purposes
for vvhich the fund was created have been
fuliiHed or after a recer\e sufficient to meet
all existing obligations and liabilities of the
fund has been set aside the surplus remain-
ing may be trans!Vri",1 to the Pollution
Control Fund at the -ii, rtinn ot the commis-
468.235 Levy of taxes to meet bond
obligation authorized. Each year the De-
partment of Revenue shall determine the
amount of revenues and other funds that are
available and the amount of taxes, if any,
that should be levied m addition thereto to
meet the requirements of ORS 468 195 to
468 260 for the ensuing fiscal year Such
additional amount of tax is hereby leued
and shall be apportioned, certified to, and
collected by the several counties of the state
in the manner required by law lor the appor-
tionment, certification and collection of other
ad valorem property taxes for state purposes.
This tax shall be collected by the several
county treasurers and remitted in full to the
State Treasurer in the manner and the times
prescribed by law, and shall be credited by
the State Treasurer to the Pollution Control
Sinking Fund.
[Formerly 449 6921
468.240 Remedy where default oc-
curs on payment to state. If any municipal
corporation, city or county defaults on pay-
ments due to the state under ORS 468 195 to
468 260, the state may withhold any
amounts otherwise due to the corporation,
city or county to apply to the indebtedness.
[Formerly 4496941
468.245 Acceptance of federal funds.
The commission may accept assistance,
grants and gifts, in the form of money, land,
services or any other thing of value from the
United States or any of its agencies, or from
other persons subject to the terms and condi-
tions thereof, regardless of any laws of this
st^te in conflict with regulations of the Fed-
eral Government or restrictions and condi-
tions of such other persons with respect
thereto, for any of the purposes contemplated
by Article XI-H of the Constitution of Ore-
gon and by ORS 468 195 to 468 260 Unless
enjoined by the terms and conditions of any
such gift or grant, the commission may con-
vert the same or any of them into money
through sale or other disposal thereof
[Formerly 449695]
468.250 Participation in matching
fund programs with Federal Govern-
ment, il) The commission may participate
on behalf of the State of Oregon in any
grant program funded m part by an agency
of the Federal Government if the implemen-
tation of the program requires matching
funds of the state or its participation in ad-
ministering the program However, any
grant advanced by the commission to an
1353
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§ 468.255
PUBLIC HEALTH, SAFETY AND MORALS
otherwise eligible applicant shall not exceed
30 percent of the total eligible costs of the
project applied for, and further provided that
the project shall not be less than 70 percent
self-supporting and self-liquidating from
tho^e sources prescribed by Article Xl-H of
the Constitution of Oregon
<2> Subject to conditions imposed on
federall> granted funds, a municipal coipo a-
tion, city, county or agency of the State of
Oregon, or combination thereof, who is
eligible for federal funds for a project during
its construction or becomes eligible ;or
reimbursement for funds expended, if I he
project has been constructed and placed into
operation, shall apply for and pay to I he
commission such funds so received, or
otherwise made available to it, in stch
amounts as determined by the commission as
just and necessary, from an agency of the
Federal Government These funds shall first
be used to reimburse the State of Oregon for
the portion of any grant that was advanced
to the municipal corporation, city, county 01
agenc1- of the State of Oregon, or combi la-
tion thereof, for construction of the project
tnat exceeded the federal requirements for
state matching funds and any remainder
thereof shall be used to apply upon .he
retirement of any principal and interest
indebtedness due and owing to the State of
Oregon arising out of funds loaned for :he
project prior to federal funds becoming
available
(3) The refusal of a municipal corpc ra-
tion, city, county or agency of the State of
Oregon, or combinations thereof, to apply for
federal funds m such amounts as determi led
by the commission as just and necessary for
which it would otherwise be eligible, shall be
sufficient grounds to terminate any further
participation in construction of a facility by
the commission.
(4) The municipal corporation, city,
county or agency of the State of Oregon or
combinations thereof, shall consent to and
request that funds made available to K by
an agency of the Federal Government shall
be paid directly to the commission if re-
quired to do so under subsection (2^ of ;his
section
[Fu-reriy 149597]
463.235 Limit on grants and loans.
Any funds advanced b> the commission by
grant shall not exceed 30 percent of the total
project costs for eligible projects or for facili-
ties related to disposal of solid wastes, and
any obligation acquired by the commission
by purchase, contract, loan, or otherv'ise.
shall not exceed 70 percent of the total proj-
ect costs for eligible projects or for facilities
related to disposal of solid wastes
[Formerly 449 69~9I
468.260 Return of unexpended funds
to state required; use of returned funds.
Any proceeds unexpended after a project is
constructed and inspected, and af;er records
relating thereto are audited by the commis-
sion, shall be returned to the commission on
behalf of the State of Oregon to apply upon
the retirement of principal and interest in-
debtedness on obligations acquired by it from
a municipal corporation, city, county or
agency of the State of Oregon, or any combi-
nations thereof
[Formerly 449701!
COUNTY POLLUTION
CONTROL FACILITIES
Note: 468 263 to 463 27'i were not f.dded to ORS
chapter 468 by legislative action
468.263 Definitions for OKS 468.263
to 468.272. As used in ORS 468263 to
468272, unless the context reqtires other-
wise
(1) "Bonds" means revenue bonds or
other types of obligations, authorised bj ORS
468.263 to 468,272.
(2) "Pollution control facilities" or
"facilities" means any land, building or
other improvement, appurtenance, fixture,
item of machinery or equipment, and all
other real and personal property, whether or
not in existence or under construction at the
time the bonds are issued, which are to be
used in furtherance of the purpose of abat-
ing, controlling or preventing, altering,
disposing or storing of solid wasle, theimal,
noise, atmospheric or water pollutants,
contaminants, or products therefrom
(3) "Governing body' means the county
court or board of county commissioners.
[1974 55 C34 5 2]
468.264 Policy. The Legislative Assem-
bly finds
(1) That control of environmental dam-
age and general health and welfare of the
citizens of the State of Oregon is promoted
by encouraging the installation of antipollu-
tion devices, equipment and facilities
(2) That the methods of financing provid-
ed in ORS 468 263 to 468 272 wiil encourage
such installation.
[1974 ,3 c34sl)
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t\
TESTIMONY OF FRED A. STICKEL
VICE-PRESIDENT, OREGON IJEWSPAPEH PUBLISHERS ASSOCIATION
IN HEARINGS BEFORE THE RESOURCE CONSERVATION LOMMITTEE
NOVEMBER 21, 1977
BONNEVILLE PoVIER ADMINISTRATION KtDC,.
1002 il.ll. HOLLADAY
PORTLAND, OREGON
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My nanc is Fred ;.. Stickel. I an1 p res id en t and publisher of the
Oregonian Publibhin^ Comnanv ,,/hich publishes the two 1 ar ;est newspapers
in Che Slate of Oregon, The Oregonlan and Th.e Oregon Journal. I am
appearing today not only OP nuhalf of .ny t,oi\iar,y, but also as vn_c;-
presidenL of the Oregon !Nev;spape r Publi&hers Association.
The Assoc .ation is chu professional or janiza tion or all daily
and week! y now-jpapers in Oregon and has horao 112 newspaper nee bors.
Every nexu spape r in the b t.itc vhicii i. an nee- _ ihe As social ion ' s ^e .il^e; -
bnip requircnienLs LS a TUOU/JCI .
Tho CAP A app rue i ares t_l a t this coirn _ tteu is on a " Cac i~ find i n-.,
mission" and does not b^vo ^^\ elusions nlreaJ'- lor- xd re ^ardni rus
complex orobltm of so 1 id 'vast ^ disposal. L[\r ^onp'' t> a-id (he (.Tu^on
Newspaper Publ isbers \ssoc I a! i on a ce r;ratLl" ul for th s op DO rL\v\ i L T Co
make our tec-lings Known, bo f o V your LonvuLttje dn_iiK - on a pan i.culai'
course.
IL is inte res iinj; that the co.^.u ttee liab cl oscii Por t lane I; Ore" on ,
as tlio bice for one of ' l"j ' ;,"ec heirm.s on i,ru , natfor of soj n'
WLIS te d ibpo^al. AS irou K.IOX; , Oregon is famous for ' s s t roru' Ucs, j rt
to pro tec t the environment o t this beauti ful b i a to . jjrouan IA :-o o L] ^ r
s Late has doi;u as nuch.
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30 S W Fifth . Suite 2 • Portland Oregon 97201 • 503 2272526
We have pionccred in legislation, such as the Oregon Bottle
Bill, which has becoir.e a model for other states, and the ban on aerosol
sprays containing fluorocarbons. We have cleaned up such important
rivers as the Wi11amet ta which flows through our Diggeb t cities,
Portland , Eugene , S;> lerr, Corvall is , Albany.
Indus try and private citizens all have shown a grea J: desire to
keep our state clean and beautiful. It is rare to see refuse piled
on sidewalks , or waste papc r blowing around our s t ret_ ts . We Visve
both volunteer and paid "li tte r patrol s" on our roads and highways.
We have escab11shed recycling centers; our servi ce clubs, youth groups
and churches are lie 1 pine; to finance thoi r ;~;ood deeds by col lee t i ni/
paper, bottles, cans and o (her us^d aiate rials for rec\cling ceiter^.
In othe L T.jords, Oregon lias r,n excel 1 enc track record in t lie area
of solid waste control, and especially in recycling and re-use of old
newspapers.
it is difficult to see why Oregonians, why Ore -ron indus tr *, why
the Oxcgun newspaper bub i nc ss should be pc'ial ized as. we u\nild ^c unde. r
any national solid wasri. charge progran.
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2130 S W Fifth • Suite 2 « Portland, Oregon 97^01 • 503 ??7^2526
My comments go to four ooints:
1. Solutions to the solid waste problem should bo found a*; the
local level.
2. The newspaper industry, especially in Oregon, has moved
rapidly in recent years to recycle and reuse old newspapers arid :hus
Should not be assessed charges for a problem that is beinc solved
through voluntary effort.
3. Imposition of a national program with heavy charges vill tend
to discourage innovative solutions in the newspaper industry,
4. Charges which might be as much as ten per cent 01 the current
price of newsprint would he so burdensome that a ra ,or port ion, at
least, would have to be passed alon^ to readers--our consumers.
To the first point, 1 already have discussed in my ope ring
remarks how Oregon has pioneered In the fie Id of protecting the environ-
ment . Let me add that the state, the counties and l.he cit ..es have
taken strong steps in this ;ield. I'; would be a sha.Tie to penalize
this state by assessing scvure charges against ir.dujtry because
cIsewhere in the country some problems are not be in4 solved.
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,
"7 n
•?,
/O
Aincricait prefer as la LLlo ^ovc. cnme;iLa 1 cent rol o£ Lheir ii"i_s
as poiiS L bit- . Tli is is CL rtainl \r o'n. a i c-a who re "'-> - ^ 4Ov-ernrrcn ,_ " ^ a i
,;u idu i)ii t_ s Lou Id in • L ^ uiitr rol pcop " OH i_l if l'c;,io t ro't L ,
! o Llic Su'cor.J p j in t , L'U' s ^ ps taker L o co" ', 1*0 1 p^i>c / ;,o J iu , j oa ,
let n c Lalk for a no^icnt" abouL an i.xiu&tr tu-o riaiii -^c II ui'ci^r \^a/,
K7-- L inn L iic iiC'JSpi. in t lud Lib '_ r_ a gruaL ,r d t'rrijr •> L /..' L f o . ; IL..I
3uCu L aJ e i. j p»_ r i L c L a •- vs L ^n"ii o i ro L yc 1 1 .! ; o Id r.c • s i^apL ^ A , LL r a
lonc, n-. j^-arcii ,, i'on. ul, . _or dc- i ikiu. n j'^^papc i s ha-:- t c j: do ^ 1 oo.,d
av.d i:1 , -• i c art. a^ rc.-ti \ ti i roc .."ii 1 1 b- - t DO i i U;L ctis L oiid t ,TS L'
Ca 1 1 i. ^ /n id- -Tv -i tli ^oii s i d< p .1 > 1 c1 c ,4p LJ ~ L L'HL c- i r, , i; \ n r c L d , '^rJo p j" i ,1 1 jx' i
of do- i a^od nuv;spapi,-rb- - nud ^n sabij La.i uia ! - ;i L - :.,- .
I '^'ali use Hit. 0 (."., L-ait.i. a1, av era ,pio. OLT Sinc^i, c, ',-L
soc c kOH j ij pri " L "-d in > ! s o.i 1 i re i - o " in ws p r j 'i L i v - n>v M '" ca''i 1 *'• ; i ' ,\. .u ;,, L ; (, o a.T // :'na ^ ^ i '/
2000 , OIKS a year .
lu our J'.LI b t a L u , L. ";.<-• 0 i c "on \f.; j ?apt , [Ji, - ] 2 SUL : s A^ sot : j t iu '
the :x v !*c1 nir^ o i" rox, ^^r !•. L ai d
has onv, such rc^\vlin ' pla\it la -> L ra , ^.o,, -J";IL hi ro i Oro
D 1 ai\ ^ " s L c ond o r,\j ,
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Sueli recycled newspi irit has two bene f its for this i ndu 3try:
1. It increases the supply. Just two or three yeors ago supply
was a critical problem f01 newspapers,
2, It saves the treeS. For every Lon of recycled new^p rin t
several trees ui11 regain standing in our forests This is important
in this area ulu-re we are trying to natch the harvest of timber with
the \row th of new crees.
To the third point, \mposiLion of solid wastu charges ir the
newspaper indu^ L. LV would 'H a threat to fur the r cob tly resea rch and
develonnent in ill is field of recyc ting and re- using news or inL. It
would be 11 nane i ;il ly d i&t our agin;1; to puhl i shers tn bo charged lor a
solid wasu disposal program on thu national level while they ';erc
developing a much more important program of n-cap* urt- of old newspr L:iL
within the ir.dustry.
it might be helpful to the committee to visit Pu'Uisht > ;, Paper
newsprint rocye 1ing mil1 in Oregon City while \on a re he TL, o -
Garden State Papc r Conpanv' s hi ^ge r iiu 11 s in l.al 110 rn j a and L~'-,L- east.
To the fourth point, conce rn mg the i inancial burden v;h Lch would
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2130 5 W Fifth • Suite 2 • Portland, Oregon 97201 • 501 227-2526
be placed on the newspaper induscry, let me say that an ONPA study
recent ly concluded lookj r.ti toward a volun tary rec} cling program es timates
newspapers of Oregon consume approximately 125,000 L ons of r.ewspr in t
a year.
It is our understanding that a S26 to $30-a-ton tax might be
levied as a solid waste product charge. This would mean an extra
expendiLure of S3 to $4 mi1lion a year for our 112 daily and weekly
newspnpers. My company alone would have to pay around $ 1,600,000 for
our 60,000 tons. This would have io be passed a Ion? to our reads rs
and/or our advertisers. It would be too nuch to swallow,
111 addi t ion to the i nd us t ry ' t. p ro ' r,i;n L o en co-u ra'jt? the rec \ L 1 in ',
and rj-usc of old newspapers, the general public Is also involved.
There arc so many re-usu possibilities from rolL i n^ newspape rs into
fi rep 1 ace lo^s , to cleaa LUV, windows , lo wrapp inr; fish, to mule hi ng
your tomatoes,
The cost of iew sprint has taunted rapid ly in recent yea rs.
The \.'rUue o: old mwspapt r has rouc up accord j.'i ,ly.
A $20 pe r ton newsprin i price increase has already been announced
by one. 'iianuf ac ture r in the east. If th i s me rco.se spreads throughout
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A •"
Po.-tljnd, Oregon 9/2G, « S03 ?27-252
Che Indus Cry, Che price paid by salvage companies for waste newsprint--
old newspapers--will also increase. Present.ly, old newspapers can be
sold Co recyclers in the Nortruest Lor $40 a ton--!:hat1 s two cents a
pound . Ci^hty- four s tanda rd- size, news pages we ic h oi.e pou^d . Las t
Sunda> ' s Oregor.ian we ighed four pounds. Tnat's ar eight-cent value on
the re 3 ale- narke t. Wit /, mat' s irore than the re ti rr depos i L o i a
beer bottle. No one should carelessly discard an old newspaper. I1;-
beginning to believe no ore does.
We have collection cepots and recycling centers ali ov ^r Oregon.
Citizens bring their old papers to these centers, or Scout groups,
KiwanLS Club-3, Lions CluDs , high school clubs and the like are ouc
gaLh.L ring them to help ra_se funds for such programs as you ,~n camps,
aid i'or the bi ind and school anu churcli activities.
Le t me give you a p -' rsonai example of hot; c jnsc i on s Ore-: on i ans
are of the iinporcanco oi _ol Ice Lin,-; newspapers:
A few days ago ;' luippcnocl Lo toss a copy o£ one of my own r.ew-s-
pa[H' r'i ii~ i ("> I ]jo g,^ ro,i",o L;:^ . ri1 t« L fe lie a rd "ic_ . "'.Jii-/ d i J "uu do t he. L ?"
Peggy asked. "I was all through w i. Lh it", I .c aid.
"Don' t tlirow a'J.iy miy newspapers; I' i'i sav in ; Lhcm lor the chu rch
drive .' ' slso scoldc'd r.ie,
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^
ir5/
L should 1 ike to poin L out that the First Amerdment to the
United States Cons ti tut ion provides Lhat Congress shall make no law
abridging the freedom of speech, or of the press.
In a broad sense, the inposition of such a tax as suggested on
the amount of newsprint utilized by a newspaper could be a threat to
the dis semination of ncvs through a free press to as many Americans
as possible.
I:very tax, such as this one which you su^cst for solid wasi_e
disposal, d rives up the cost of newspape cs, making them less affordable
to readers. Newspapers sell as clieaply as they do for one reason;
to provide information in depth to as mary Amerioans as possible.
This char,Lrc could well mean that neai ly all neivt-pape rs would have
to increase tlifc i r subscript ion ra t-'O and that some, now distribviLed Cree,
^;ould have to begin charging a circulation fee.(^_This can be substantiated".
i^ _„
This extra finaneial burden could well mean Lhe difference to '
many Tamil ies of read J ny or not read in'"7, a new sp ape L .
The second QUOs t ion tha L your conru L tee posed j,n announc in1;
this hearing today asi-.ed for poss ible al te ma lives to a national sol j d
waste charge program. 1 have the germ of an idea: /_/: /" /*iL. C/?^./. / J~
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The Cnv i ronmenta 1 Pro t oc t ion '• ger:eY mi ght es.ablish a program
within that agency to p rov .de advice end counsel (;<> local gove rnnent,
private industry and citizen groups on solid waste programs, It could
serve as a clearing hoi se :> t in forma tion on bow various communa ties
have hand led the i_r solid wa s te problems. It could provid c guidance to
local goverumen ts on how t j set up solid was L t pro ;ranis whicl night
•well need to differ from one communi ty to another, IL could possibly
be a screening agency for local governments i.n seeking federal funds
for solid waste programs . It cocild goad back'.'ard comnmni 11e.s .
This would provide leadership from 'lie f <-di_ * al govc rnirujn t without
requiring anoL];er federal invasion ir.to local affairs. It uould be
the carrot approach, not t he slicV.
In summary, I cent cue a national sol id waste charge pro;, ram i s
not necessary. Certainly paper should not be a target. It is recyclable,
reusable and LE biodegradab] e. An> solid wa&,;. e p rogram should be on
the local level and Oregoi has shown that -L can oc done, Look around
you while vou afc he ro. ~Lt we can do Lho j ou o i pro tec t ing the environ"
rncnt here, anyor.e can do it, an_~where.
And wi thout f cde ral conpul sion or unr.ece ssa: y ciiargcs ,
Thank you for tr.is opporUmi ty. I shal 1 be- happy Lo answer any
ques tions.
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DEPARTMENT OF
ENVIRONMENTAL QUALITY
1234 S.W, MORRISON STREET • PORTLAND, ORE. 97205 • Telephone (503) 229-
November 21, 1^77
Test imony to the Resource Conservation Commi ttee
From: The Oregon Department of Environmental Duality
Subject: The Sol id Waste Product Charqe Concept
We are appreciative of this opportunity to comment on the concept of the Solid
Waste Product Charqe. We in Oregon have a qreat interest in the entire area
of waste reduction, and are actively involved in reducinq the volumes of waste
that must be disoosed of in this State.
To this end we have made source reduct i on
Waste Management Plan, callinq for me rea
major goal of Oregon's draft Sol id
Based on EPA studies to date there is little doubt that a product charqe which
Includes a credit for use of recycled materials will have significant effect on
sol id waste redact!on by stimulating increased recovery o^ materials for recycli nq.
We have not vet, however, explored the relative merits of difCerent source re-
ductlon measures or what an effective mix of such techniques would be.
We caution that the effects of a product charqe on product desiqn and on utiliza-
tion of specific materials should be carefullv assessed, and that the process for
evaluating these impacts should be comprehensIve enouqh to sat i sfy those affected
by such leqislatfon that all implications have been examined, ^'e 1ook forwa rd to
examining ffnal FPA studies on oroduct charqe impacts and desiqn considerations.
Given the information presently available, I would like to address several points
which we feel are siqnificant in considering the desiqn of the product charqe.
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A. Legislation at the Federal level is important to the viability of so com-
prehensive a measure as the product charge, a fact which the beverage
industry is discovering with the increasing number of differing state
"bottle bills".
Since the Oregon experience has prcven that the "bottle bill" is tremendously
effective in increasing the recovery and recycling rate of beverage con-
tainers, those containers which are regulated by state 'bottle bill" legisla-
tion should be exempt from the product charge. The "bottle bill" appears to
be an excellent complement to the product tax, and we advocate again here,
as we have so often in the past, that deposit legislation be enacted at the
national level.
B. An examination of available informjit ion, including Senator Hart's proposed
bill, leads us to believe that a w«-l 1-designed product charge can have
environmentally desirable impacts cm both the choice of materials utilized
in making affected products and on the ultimate recoverabi Iity and/or
disposabi1ity of these products. With this in mind we offer the following:
1. Credits and incentives for us;: of recycled material are critical to
the waste reduction effects o: a product charge, and should
definitely be included in any such legislation. According to FPA
figures this provision would stimulate more drastic waste reduction
results than any other aspect of the bill.
2. In connection with the credit for use of recycled materials we
suggest that the Committee also consider establishing a requirement
for labeling which would indicate what percentage of recycled
material is contained in a product. Labeling which would indicate
a package's cost should also oe considered. This would have a
greater affect on consumer awareness and demand than the small
price adjustment which would result from the product charge, and
would therefore likely stimulate producers to employ greater
eff i c i enc i es.
1. We suggest providing incentives (credits) for production of products
which are reusable and/or recyclable; and providing disincentives
for products which present problems for recyclabi1ity or recovery,
or which create environmental pollution or hazards in disposal.
C. EPA figures indicate that packaging and all paper products under a product
charge would impact a significant portion of the solid waste stream with a
minimum of administrative costs. We feel, however, that certain products
which by their natures create especially difficult disposal problems, such
as tires and oil, should also be included. While such items may constitute
a lesser segment of the waste stream, they are a large part of the problem,
and significant efforts to develoc recycling programs as alternatives to
landfill ing for these products must be undertaken.
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D. Deliberations aboutVfhat characteristics should be used as the basis for
the charge, e.g. weight, unit, volume or value, should include a thorough
examination, as mentioned earlier, of what the effects of the alternatives
will be on the use of specific materials. For instance, it would appear
that some proposals which suggest taxing rigid containers by unit, and
all other materials by weight, would give an advantage to plastic packag-
ing over paper where the plastic is used as a wrap rather than in a rigid
container. It would be most unfortunate if the side effects of any source
reduction policy resulted in increased use of non-renewable resources.
Given that certain levels of packaging are necessary, we should utilize
renewable sources and materials which are biodegradable, recyclable and
reusable.
E. We have considerable interest in the distribution of revenues which would
be generated by the product charge. !t seems clear that revenues generated
by a tax aimed at internalizing the cost of disposal should be used for
solving disposal problems. While further examination of forthcoming EPA
studies are necessary, we are favorably inclined at this time toward a
plan to transfer monies to state and local government, where the burden of
solid waste management is carried. Provisions for diverting funds to
particularly innovative waste reduction and recovery approaches should also
be examined.
We at the DEQ look forward to providing continuing advice on the product charge
concept as deliberations and studies proceed. We also look forward to the
enactment of effective, comprehensive measures which will stem the prolific
flow of America's solid waste stream.
VAL:mm
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Potl^tch
Potlatch Corporation
Wood Products, Western Division
STATEMENT
OF
POTLATCH CORPORATION
FOR rnHE RECORD OF
THE RESOURCE CONSERVATION COMMITTEE
SOLID WASTE PRODUCT CHARGE
Portland, Oregon
November 17, 1977
by
Joseph R. Rippee
Corporate Environmental Engineer
We appreciate this opportunity to present our views on this
important issue to the forest products industry. Potlatch Corporation
is a manufacturer of pulp, paper, paperboard, tissue, particleboard,
plywood and lumber. We have operations in Idaho, Minnesota, Arkansas,
California, Pennsylvania, as wel] as several other states.
Although we agree with the coal of conservation of energy and
resources, we do not agree with the solid waste product charge. It
was stated in the Resource Conservation Committee Solid Waste Product
Charge Legislation dated October 20, 1977 that "...IF a product's
disposal cost is a significant portion of its value at some point in
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- 2 -
the production and distribution chain, its incorporation could offset
the type and amount of resources used in consumer products and pack-
aging. Depending on how it is designed, a solid waste product charge
could bring about increased materials recycling and could lead to the
conservation of energy nnd natural resources..."
We believe this logic is faulty and offer the following to sup-
port our position:
1. Western pulpmills use largely sawmill residue
for pulp. This residue is related to lumber
production not pulp production. Recycling more
fiber would only require that the residue be burned
or landfilled. No fewer trees would be cut. The
same logic applies to thinning timber stands. Timber
from mid-western and southern tree farms should be
viewed as a crop raised specifically for that purpose.
2. Existing government regulations such as FDA prevent
recycle of some post consumer fiber into some grades
of paper. In addition, non-compatibility of the fiber
with product quality such as strength, brightness,
shive content, freeness on the machine, or type of
coating will prevent utilization of the recycled fiber.
Other areas such as tissue, linerboard or corrugating
media or newsprint may be able to use recycled fibers.
3. Major sources of post consumer wastepaper are from
large cities. Most large pulping facilities are
located in remote areas away from the large cities.
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4. New or amended pollution control regulations con-
cerning toxic or hazardous chemicals give rise to
concern at the mill level for introducing fibers
of unknown or uncontrolled source into the system.
Constituents from the waste fiber may find their
way into the waste stream and present difficult
and costly disposal problems.
5. Packaging has become an essential part of distribution
and marketing. It not on]y offers convenience to
the shopper, but it also includes greater sanitation,
less cost, availability of products out of season,
ease of shipment and the consumer buys only the
product he wants. He doe:; not have to dispose of
unwanted tops, hulls, vines, and other waste. This
remains at the processing plant for efficient disposal.
This waste, if received b{ the consumer, would place
an even greater burden on the municipal waste disposal
systems.
6. Imposition of a solid waste tax to internalize costs
would not show a proportional reduction in solid waste
disposal cost. Placing the burden of the cost on the
producer does not address the problem. Studies have
shown that collection costs generally account for
70 to 85 percent of total solid waste management costs
and labor accounts for 5C to 75 percent of collection
costs. An increase in productivity of collection
-------
- 4 -
manpower would be a much more effective way to
reduce costs.
7. Internalizing cost does not consider that all
consumers are not necessarily served by collection
services. Rural consumers may dispose of their
own waste. They would be required to pay a higher
price for commodities but would receive no credit
for disposal of the waste. The tax also disregards
the use of solid waste to produce energy. Both
paper and packaging products have high heat value.
8. It is likely that costs attached to the product
and passed through to the customer would be marked
up and increased considerably by the time the product
reached the consumer. It is undesirable to create
another government bureaucracy to collect revenues
and dispense them to municipalities. It is believed
this system would not be nearly as efficient as the
present system. In addition, there would be no
incentive for the municipality to economize or operate
efficiently. As long as the money was coming in,
ways would be found to spend it with efficiency or
necessity only a passing consideration.
9. The tax is discriminatory because it would tax paper
in all forms but other materials would be taxed only
when necessary for packaging.
-------
10. The tax would be regressive since its heaviest
impact would be en low income familites.
11. The tax would favor lighter weight materials and
create shifts to products such as plastics that
use a depletable natural resource.
We believe that a better approach would be to incorporate
incentives to encourage recyclirg and conservation without resorting
to a product charge or tax. These incentives could include:
1. Additional tax credits
2. Fast write-off for recycling
3. Increase in industry R & D
A . Improve municipaJ collection systems
5. Improve recycling freight, rates
6. Provide government technology grants
These are only a few of the many options available taat offer
a positive approach to the solid waste problem. AIL are superior
to the solid waste product change.
Thank you for this opportunity to present our views.
bcc: A. C. Dreshfield
J. Eves
J. A. Anderson
T. L. Maddock
-------
Potlatch Corporation
I I) >'• n ,li]f
."• -in' idiiiK' wi
1 'iii'iiiu r'fll "PilU'i
December 1, 1977
Ms. Susan B. Mann
Public Participation Liaison
Resource Conservation Committee (WH-463)
401 M Street SW
Washington, D.C. 20460
Dear Ms. Mann:
We would like to have the following information placed in the
record of testimoney presented at the November 21, 1977 Portland,
Oregon meeting of the Resource Conservation Committee.
As you may recall, I presented information at the meeting for
the Potlatch Corporation. Questions were asked by members of
the Committee at the end of my testimony. The information
presented herein addresses those questions and was obtained
from the American Paper Institute.
Production Trends - Paper and Paperboard
Domestic Production Apparent Consumption
Year (million tons) (million tons)
1972 59.5 64
1973 62.0 67
1974 61.1 66
1975 52.8 56
1976 60.5 64
The two sets of data do not agree because of exporting and importing
paper products. No clear growth rate is evident in part due to the
oil embargo and a recession. In fact, 1976 production was only
slightly higher than 1972 and less than either 1973 or 1974.
Values were available for the paper products consumed in 1974 and are
as follows:
Total consumption 66 million tons
Recycled into new products 14 million tons
Supplied as books, files, etc. 2 million tons
Discharged as waste to minicipal
and private sewers 5 million tons
Entering solid waste stream 37 million tons
-------
Susan B. Mann
December 1, 1977
Page 2
I hope these values will be helpful in your review. Please contact
me if there are questions concerning the information.
Sincerely,
^Joseph R. Rippee
Corporate Environmental Engineer
JRR/sg
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Survival Center
Suite "l, EMUU
Umversirv of Oregon
Eugene, Oregon 97403
503/686-4356
Testimony presented before the Federal Resource Conservation
Committee on November 21, 1977 in regards to the Solid Waste
Product Charge Issue.
During the 197'i Session of the Oregon Legislative Assembly,
several pieces of legislation were proposed to deal with the
issue of Solid Waste Management, Progress of such legislation
was halted by a belief that the incorporated ideas were already
being studied and implemented at the Federal level. However,
only recently the Survival Center learned that the Resource
Conservation Committee is only now taking Public testimony
throughout the country on how to resolve the question of the
general value of resource conservation policies, specifically
that of the Product Charge, a fee or Excise Tax levied on
Consumer Products or Packaging. This Committee will make its
recommendations to President Carter and the Congress in early
1978, and thus the Survival Center of the University of Oregon
would like to present our views on this potential legislative
initiative.
In the past, the State of Oregon has been instrumental In
providing the impetus necessary for the acceptance of environ-
mentally sound and feasible legislation reforms. The Oregon
Bottle Bill of 1971, the prohibition of pull tabs on metal
beverage containers, and the recent Oregon ban oft sales of
selective products containing Floro-carbons, are examples
of recent legislation from this environmentally aware State that
have captured the interest and support of the nation. With
this record of environmental achievement noted, the Survival
Center believes that once again the nation can turn to Oregon
for direction on this vital Issue: Solir. "waste Management.
-------
With respect to the Oregon State Legislature and firm belief in
the requirement that any alternative to the Status Quo must produce
the greatest public benefit with "he least public burden, we
present our views.
Municipal Solid Waste is a significant and growing problem,
amounting to over 150 million ton,; annually . The question
posed by this committee, on how to reduce this problem is
prioritized by the ever increasing quantity and cost of Solid
Waste disposal.
We believe that any development of legislation incorporating
a product charge must be levied at the national level. Despite
concerns over possible bureaucratic foul-ups, to be effectively
organized so as to dispose of a national prcblem-a national
plan must be implemented. While the structure should originate
at the Federal leveybo allow for equalitative efficiency, we
believe the State governments should be given the responsibility
of promoting the concept amoung the citizenery. At this level,
the individual tax payer is more likely to identify both the
educator and the local problem; for with all due respect tc the
seat of our national government, a person residing in Oregor is
more apt to be motivated by pictures and statistics on Oregon's
problems than by those of the District of Columbia.
However, a single product charge application will not in itself
solve our dilemma, regardkess of planned public education.
Implementation, on the Federal level of related legislation,
such as a National Bottle Bill- requiring beverage container
deposits-will help increase consumer awareness to the issue of
reducing Solid Waste. In retrospect to our philosophy of
getting the greatest of benefits with the least in costs, the
Oregon Bottle Bill experience has been successful. In a
Summary_ of State Litter Laws Relative to Disposable Containers,
prepared by the Arkansas Legislative Council, October 12, 1973,
the compiled data read: "It was reported that by March 1973,
the Oregon market had experienced neither a decrease in sales
nor an increase in prices since the law had gone into effect."
Environmental Action Foundation, Solid Waste Fact Sheet on:
Product Charges.
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The benefits, primarily of litter reduction, and increased
consumer awareness, are obvious; and as the report details,
the benefits have not required increased costs.
In response to question on the social aspects and consequences
of product charge legislation, the price increase towards the
consumer is dependent upon his or her consumption. Intuitively,
the consumer who presently wastes more could feel more of a burden
than those who practice some forms of conservation and recycling
already;yet that would be their p€F"ogative. However, under
existing law, only those consumers who reside in States that have
employed some relative form of legislation on Solid Waste
Recovery and Disposal requirements have been able to accrue the
benefits. The Environmental Action Foundation estimates the
increased costs to the consumer to be "about $8 per year for
the poorest families to $60 per year for the richest."
The Environmental Protection Agency also predicts an increase
in employment if a national product charge program is created.
This benefit alone, if announced to the general public, would
most probably bring in all the citizen support necessary
for the committee to recommend such legislative initiatives
to Congress. Unfortuneately , it is once again apparent that
only those States now employing such requirements on Solid Waste
are allowing their citizens to rean tne increased employment
Denef 1 ts .
The environmental impacts of such legislation can be viewed
in only positive regards. Obviously the more solid waste
that is returned to the manufacturing stage for recycling
ratner than disposal into the environment will allow for a
decreased demand upon our dwindling natural resources and
redaction of the costs of disposal. V.'nile the trend towards
sucn recycling is becoming more accepted, progress at the State
or iQcal level is excrutiatingly slow. However, a National
program of laws requiring such environmentally sound practices
would hasten our recovery from a wasteful and ecologically
disruptive society.
Another often stated concern relative to the product charge is
the d$,ree of Administrative costs. Througn a five y°ar phase-
in period for charges and credits, and levying of the actual
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product charge as near to the raw material stage as possible:
we "will encourage wise resource use throughout the economic
ij
system"; allow easier and more efficient use of recycled
material; and minimize the adrrinistrative costs of the program.
In general, the costs are apparently greatly overshadowed by
the benefits to both the environment and its populous. Yet
for all to appreciate and gain from these benefits, a national
program of Solid Waste Management including Product Charge
legislation, must be established and administered at the
Federal level, combined with State level public education.
Judy Roumpf; to the Association of Oregon Recyclers Board
members concerning Product charge. 11-8-77
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Survival Center
Part two s^TjEMuTF"
University of Oregon
Eugene, Oregon 97403
503/686-4356
In regards to the present system of Solid Waste Management/ the Survival
Center will present one basic contention against the Status Quo, that of how
producers are not presently provided with any competitive incentive to minimize
packaging and reduce solid waste. Rather, under our current marketing system,
there exists a competitive incentive to continually inadequately redesign and
increase the amount of packaging.
The Survival Center will further contend that the goal this committee should
establish is to bring about reductions in Post-Consumer Solid Waste through
Placement of a Product Charge on packaging materials.
Achievement of this goal, which will resolve those concerns over the
lackings of present policies, can be manifested through national level product
charge legislation, which places administration at the Federal level yet allows
for public education at the State level.
The key elements necessary for efficient and equitable implementation of
such a national program are:
1.)* A definition and identification of "excess;"
2.) A determination of the range of packages that should be taxed
presently and in the future; and
3.) A definition and identification of non-durable/ durable goods.
-------
part two, page two
The Survival Center offers as a workable definition of "excess," five
basic questions for identification purposes:
1.) Does the cost of the package exceed 25% of the cost of the final
product, taken into cons]deration that the package may increase
or decrease transportation costs?
2.) Are package judgement cr:.teria considered in relation to possible
alternatives for the prociuct's package?
3.) Is the resource used for packaging in scarce supply?
4.) Is the packaging materia . environmentally detrimental (non-
biodegradable)?
5.) What is the degree of difficulty in disposal of that package material?
In regards to the second legislative requirement, that of determining the
range of packages, or what product area that will be initially covered by the pro-
duct charge, the Survival Center believss that non-durable goods would be an
equitable and sufficient beginning. Non-durable goods, such as paper products and
packaging Bake-up a significant proportion of the post-consumer wastes while the
economic impact of applying a product caarge on such materials *rould be received
comparatively easier at first than if placed on durable goods. Present Recycling
Centers could be revamped to allow for the initial use increase while cither
facilities are being constructed. Meanwhile, studies into the economics of including
durable goods under Federal Legislation could be hastened with eventual adoption.
Therefore, this analysis of what goods should be initially covered mandates
the need for that third and final key element to national legislation, that of
identifying and defining non-durable ard durable goods.
In actual application, the method employed for levying the product charge
should be as near to the manufacturing process as administratively possible. The
charge should be levied:
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part two, page three
1.) on non-durable packages by weight; or
2.) where there is a high volume to weight ratio as in the case
of rigid containers, then the tax should be levied on a per unit
basis; and
3.) a tax credit should be given for the use of secondary materials
and in relation to the recyclability and reusability of the product.
Adoption of such a national policy will accrue the additional benefit of
creating an incentive to the environmentally sound redesigning of product packaging.
Such redesigns will be influenced by incentives for separation, increased re-
cyclability, and the allowing of the recycling tax credit.
The Survival Center further requests that the Committee incorporate into its
final report the findings from the Fourth Report to Congress on Resource Recovery
and Waste Reduction, and also from HOUSE BILL 3182 of the 1977 session of the
Oregon State Legislature sponsored by Representatives Marx, Gustafson, Kerans,
Fadeley, Starr, Vian, Whiting and Senators W. Brown, Kafoury, Wyers, and B. Roberts.
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Survival Center
Suite 1, EMI1 If
Universitv of Oregon
Fusrcnc, Oresion 97403
503/686-4356
Testimony presented before Resource Cor servation Committee on Solid Waste
Product Charge. November 2), ]977 Submitted by Bryan Wilson.
As a 4 year Economics major, and student at the University of Oregon, I
wish to present my ideas on product charge legislation with respect to
conventional Economic theory. I will apply my analysis to the speci.iic
issues of product charge legislation -ind the macro effect on the economy.
Under our current system of waste collection and disposal, the costs of
these services are borne by the publi: without any direct relationship to
their use of the service and the quantity of the waste stream generated.
Further, and more importantly, the external or social cost of production
of a good are not paid by the producer of the product, but rather by the-
public as a whole, in the form of increased costs of solid waste management,
andan ever expanding mountain of garbage.
Given these two shortcomings of our economic system, there results an
inefficient allocation of resources and an inequatable system of disposal
costs. The inefficienct allocation cf our primary resources is due to the
fact that there is no pricing mechanism to reflect the disposal costs of
these valuable resources. For those concerned individuals who voluntarily
reduce their consumption, reuse and lecycle their post-consumer wastes,
the external costs are even higher.
For these and many other reasons, wh;.ch I will allude to later, I support
the implementation of a product charge legislation on a national level.
In far too many instances, packaging is so excessive that the package
accounts for more of the total cost to the consumer that does the good
itself. As a result of the levy of a product charge tax, the input
quantity and cost of the package into the final market price of the product
may in fact be lower than the tax le/ied on the package, resulting in a
lower priced product even after implementation of a product charge tax.
-------
An extreme example of this would be elimination of the package completely,
which is becoming increasingly popular in Oregon supermarkets. Bulk foods
are offered at a significantly lower price than the comparable foods
which are packaged.
Implementation of product charge legislation on a national level is
essential as it will serve to minimize the expected economic dislocation.
Given the structure of our production, distribution, and marketing systems,
investment and conversion by industry will be stable and could be phased-
in gradually. For example, the product charge could be phased-in over a
five year period, with 20% levied each year.
In regards to social impacts of such legislation, obviously all sectors
of society would effected. Consumers would shift their consumption
patterns, and industry would suffer economic dislocation in some sectors.
However, I believe that there is a misconstrued belief that environmental
policies and social policy •• concerns are mutually exclusive in their goals
and orpeations. On the contrary, I believe that we can implement both
environmentally sound and economically stimulating legislation. The
Oregon Bottle Bill is an excellent example. Employment has increased,
litter and solid waste have been dramatically reduced. A national Bottle
Bill would further increase employment with only a small dislocation factor,
witn little or no administrative costs after initial implementation.
Inevitably, some sectors of industry will suffer dislocation. However,
I feel that we must suffer through some short term dislocation now, or
face severe and prolonged economic chaos in the long run if we fail to
take action now on these pressing issues.
There are many different possibilities for the use of the revenues collected
from product charge tax levy. My most important consideration would be to
provide grants and/or low intrest-long term loans(to aid in industrial conversion)
to those sectors of the economy that suffer significant dislocation. Other
possibilities for use of these revenues include grants and/or low intrest-long
term loans to pilot recycling projects. Revenues could also be used for
improvement of solid waste management at the State and local level. Under
no condition should shuch revenues be transferred to the general fund, as
the solid waste problem is in dire need of funds for improvement.
It is my firm belief that the benefit to society as a wnole by far outweigh
the costs incurred by the implementation of product charge legislation.
We have done enough research, the problem is under our sinks and piling up
on our back doorsteps, the time is now to act.
-------
Aside from product charge legislation, there are alternative if not
supplemental actions that can be implemented to further reduce
environmental degradation and the costs of solid waste management. Federal
guidlines on packaging design regulation would eddectively eliminate many
of our cerrent problems, and at the same time would have relatively low
administration costs. There would be no direct governmental intervention
in the distribution and marketing systems. Packaging regulation guidlines
could promote long run shift toward a standardization of containers,
stimulate reuse and recycling. An example would be the all steel can,
which would be ]00% recycleable, saving energy and resources, and aiding
in the simplification of the actual recycling process. A final, yet
severy alternative would be the banning of certain unwanted products.
Bans are to be used with extreme selectivity, as they invoke severe
economic dislocation, and are seldom justified. However, another outstanding
example that we have here in Oregon is the ban on all beverage containers
with pull tabs or detachable parts.
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NOVEMBER 23,1977
SUSAN B. MANN
PUBLIC PARTICIPATION LIAISON
RESOURCE CONSERVATION COMMITTEE (UJH-563)
Wl M STREET, WASHINGTON D.C. ?0460
I attended the Portland Oregon public hearing on Product Charge and
was pleased with the responce that I heard there bath from industry and
from the environmentalists. Mv arguments were well covered by what was said
at the hearing. One issue which did come up and was not satisf actorly answered
in my opinion uas "excess packaging". A member of the committee guestioned those
testifing on the matter but ggt no definite responce. I would like tn give my
opinion nn what I think excess packaoing is, and I hope it will be of snme help.
Excess packaginn is any packaging material which serves no purpose in the
transportinn , nrntectinn, or handling of the product. This type of packanino is
designed to help sell the product.. The theory goes that if a product stands
out from its competitors, the consumer will 'uy it eventhouah the other
products are almost identical in contends or purpose. Excess packaging comes in
the form of attractive wrapping, unnecessary closures, and shapes of the container.
Mrs. Butterworth, for example, is a unique shape bottle which supposidly attracts
the consumer to it.
The other cirteria I have for excess packaginn is any material used in
packagino a product which is not recycable but has a reoycable substitute.
Pringles Potato Chips for example, have a nonrecycable package which could
be packaged in a recycable cardboard container. Of course, the recycable material
must he available to the manufacturer and reasonabil ity orir-ed. The price uould
very likely bf> hgher than nonrecycable materials, but this could be passed on to
the consumer,
If I can be of any further help to the Committee I wilLgJadLy do so.
ERNEST L. FRAIM
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SONOMA
ENVIRONMENTAL CENTER
(Garbage Reincarnation inc )
PO BOX 704 COTATI,CA. 94928 [7071539-8384
November 29, 1977
Besource Conservation Committee
1*01 M Street, S.W.
Washington, D. C. 20W>0
Dea^ People:
This testimony is in rebuttal to the remarks of Mr. Thomas Ethan.
At the Portland hearing on November i'l, 1977 he stated that 6yf> of the
collected revenues for California's SB 650 were to be applied to adminis-
trative costs. This is not the case.
SB 650 explicitly lists where the collected tax monies are to be
allocated. Thirty percent goes to litter clean-up of recreational land
and public throughfares (Section 68013). Seven and one half percent is
used for litter control education, five percent for litter law enforcement,
and two and one half percent for the purchase, installation, mainterance
and replacement of litter receptacle!! (Sections 68048, 68(A9 and 68050).
Twenty percent is expended as grants or loans for the implementation of
the state research and development program for recovery of resources and
energy from wastes (Section 68046). Twenty-five percent is mandated as
money for grants for the creation or expansion of recycling centers (Section
68c47). Five percent is granted for the demonstration and evaluation of
projects which utilize and deliver recoverable materials and are not
recycling centers (Section 68051). Five percent is allocated for aclminis-
trative support (Section 68052).
California is establishing the framework to distribute funds which
would be collected by a product charge. While some areas may want to be
added to or eliminated, the existence of an administrative program can
serve as a model for other states. The law reasonably provides 5$ of the
total funds collected for administration, not the 63$ as was claimed.
Thank ,fou for your time;
t&
t/Jeremy' Brott
Santa Rosa Recycling Center
Your Donations A re Tax Deductible
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ATTENDEES Novemeber 21, 1977
Adams, Thomas C.
U.S. forest Service P.N.W.
P.O. Box 3141
Portland, Oregon 97208
Allen, David
Wyerhaeuser
Tacoma, Washington 98401
Aspitarte, Tom
Crown Zellerbach
904 N.W. Drake
Camas, Washington 98607
Bru, William R.
Dept. of Environmental Quality
1234 S.W. Morrison St.
Portland, Oregon 97205
Barnett, Steele
Western Forestry & Conservation Ass'n.
1326 American Bank Bldg.
Portland, Oregon 97205
Biggs, John
John Biggs Ass'n.
3116 County Club Loop N.W.
Olympia, Washington 98502
Blessinger, John A.
Aluminum Company of America
P.O. Box 120
Vancouver, Washington 98661
Bourcier, Lorraine
Recylcing Council of British Columbia
503-660 Fort Street
Victoria B.C., V8WIG8, Canada
Bowman, Sam R.
Glass Packaging Inst.
2172 Dupont Drive
Irvine, California 92713
Broti, Jeremy
Rep. No. Calif. Recyclers
Santa Rosa Recycling Center
P.O. Box 1074
Rohnert Park, CA. 94928
Butler, Don
KOIN TV
140 S.W. Columbia Street
Portland, Oregon 97209
Calkins, C.R.
American Paper Institute
1619 Mass. Avenue
Washington, D.C. 20036
Christensen, Kris
Portland Recycling Team
1801 N.W. Irving
Portland, Oregon 97209
Dell, John D.
U.S. Forest Service
P.O. Box 3623
Portland, Oregon 97208
Donaca, Thomas C.
Associated Oregon Industries
2187 S.W. Main
Portland, Oregon 97205
Duncanson, Mike
Lane Co.
Office of App. Tech.
Public Service Bldg.
Eugene, Oregon 97401
Ethen, Thomas M.
Nu Food Processors Ass'n.
2828 S.W. Corbett
Portland, Oregon 97201
Feigner, Ken
Environmental Protection Agency
1200 Sixth Avenue
Seattle, Washington 98101
Fiekowsky, Seymour
U.S. Treasury Dept.
15th & Pennsylvania Ave. N.W.
Washington, D.C. 20220
Fraim, Ernest
BRING Recycling
Box 885
Eugene, Oregon 97401
Glendering, Elaine
Dept. of Environmental Quality
1234 S.W. Morrison
Portland, Oregon 97205
Good, Richard A.
Boise Cascade Corp.
Box 1414
Portland, Oregon 97207
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Griffin, Rita
K6W Radio
1501 S.W. Jefferson
Portland, Oregon 97201
Himmel, Tom
Oregon Journal
1320 S.W. Broadway
Portland, Oregon 97201
Hohlt, Harold W.
Goodyear Tire & Rubber Co.
5615 N.E. Jessup Street
Portland, Oregon 97202
Irvine, Merle
Metropolitan Serv. Dist.
1220 S.W. Morrison
Portland, Oregon 97205
Jewett, Jerry
Washington State
Dept. of Ecology
Olympia, Washington 98504
Keesee, Robert
Georgia—Pacific
900 S.W. Fifth
Portland, Oregon 97204
Lee, Valerie
State of Oregon
Dept. of Environmental Quality
1234 S.W. Morrison Street
Portland, Oregon 97205
Mason, Arnie
KEX News Radion
2130 S.W. Fifth Avenue
Portland, Oregon 97201
Maxwell, Wayne
U.S. Forest Service
6th & Oregon Street
Portland, Oregon 97208
McDuffee, Ray W.
Lincoln Cnty. Solid Waste
Commission
Box 178
Seal Rock, Oregon 97376
McGuire, R.B.
Hanipac Inc.
P.O. Box 5346
Salem, Oregon 97302
Moore, W.T.
O.L.C.C.
9079 S.E. McLoughlin Blvd.
Portland, Oregon 97222
Mulligan, Kevin
Portland Recycling Team
1801 N.W. Irving
Portland, Oregon 97209
Norr, Paul
Metropolitan Serv. District
1220 S.W. Morrison, No. 300
Portland, Oregon 97204
Patterson, J.R.
Armear and Company
P.O. Box 19008
Portland, Oregon 97204
Perrin, Cheryl
Fred Meyer,lnc.
P.O. Box 42121
Portland, Oregon 97242
Phillips, David A.
Clackamas County P.W.D.
902 Abernethy Road
Oregon City, Oregon 97045
Powell, Jerry
Assoc. of Oregon Recyclers
1817 N.W. Irvine
Portland, Oregon 97209
Redman, Amelie
Yamhill Valley Reclyclers, Inc.
1134 Alpine Avenue
McMinnville, Oregon 97128
Rippee, Beatrice La
1713 11th Street
Lewiston, Idaho 83501
Rischmiller, Jennifer
Project Recycle
944 Dunsrnuir Road
Victoria B.C., Canada V9A5C3
Roumpf, Judy
Association of Oregon Recyclers
2110 West 18th Street
Eugene, Oregon 97402
Scottock, Lorie
Yamhill Valley Recyclers
127 Park Drive
McMinnville, Oregon 97128
Stickez, Fred A.
Oregon Newspaper Pub. Ass'n.
Portland, Oregon 97201
Swanson, Bob
Solid Waste Coordinator
Sierra Club
11351 N.E. 31st Slreet
Seattle, Washington 98125
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„, . Wilson, Otto J.
S Oregon Retail Council
1149 Court Street N.E.
Salem, Oregon 97301
Witter, R.N. Jr.
s Sam Wyerhauser Co.
iy .„ American Paper I nst.
150 S W. Jefferson Tacoma, Washington 98401
Portland, Oregon 97201
Turner, Michael
Lane Co.
Solid Waste Management
125 East 8th Street
Eugene, Oregon 97401
Van Bergen, George
U.S.B.A.
2120S.E. Monroe
Milwaukie, Oregon 97222
Walker, Bruce
BRING Recycling
P.O. Box 885
Eugene, Oregon 97401
Walsh, Ann
Crown Zellerbach Corp.
One Bush Street No. 1501
San Francisco, CA. 94104
Walz, James T.
Continental Can Co., U.S.A.
10200 N. Lombard
Portland, Oregon 97203
Wheelwright, R.V.
R.V. Wheelwright
14150S.W. 144th
Tigard, Oregon 97223
Williams, Roger
Oregon Newspaper Publishers
Ass'n.
2130 S.W. 5th Street
Portland, Oregon 97201
Willoughby, Janice
Yamhill Valley Recyclers
1841 Thomsen Lane
McMinnville, Oregon 97128
Wilson, Bryan S.
University of Oregon
Survival Center; Suite I EMNII
Eugene, Oregon 97403
Wilson, David
Continental Can Co.
10200N. Lombard
Portland, Oregon 97204
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