How it works, what it does, why it matters
If you're new to deposit-return, we recommend you watch the TennCan Explainer video on our home page, or this longer video (right). (Note: We compiled it ourselves back in 2011, so it's a little rough, not to mention outdated at some points. But the basics are still pretty much intact.
A quick tour of TennCan
The deposit for all covered beverages is 5 cents.
The deposit applies to soft drinks, beer/malt beverages, plain and flavored water, energy drinks, sports drinks, iced teas, iced coffees and juices. It does not apply to milk, wine or liquor, nor to dietary supplements marketed as meal replacements (e.g., Ensure or Boost).
The deposit applies to containers made of glass, plastic, aluminum or other metal, regardless of size.
Returns are to independent, certified redemption centers that operate primarily on scrap revenues plus an "overhead allowance" of 1.6¢ per container from the program fund. This allowance comes mainly from scrap revenues and unclaimed deposits.
Redemption centers sell the sorted containers directly to certified scrap processors. Neither grocers nor bottlers have anything to do with redeeming, recycling or otherwise handling the empties.
Redemption centers may be owned by any qualifying entity, including individuals, nonprofits, businesses, scrap dealers, processors, manufacturers, MRFs, curbside recyclers and local governments.
Redemption centers may be storefront, mobile, automated (e.g., reverse vending machines), electronic (e.g., "drop-and-go" kiosks) and portable (e.g., microsite trailers outside grocery stores).
"Depots" are a type of expanded redemption center accepting non-deposit glass (at a minimum) and other nondeposit recyclables.
Every redemption center must either be itself a nonprofit entity, or have an informal but ongoing beneficial relationship (e.g., hosting donation bins or bottle drives) with one or more such entities.
The program will be overseen by the commissioner of the Department of Environment and Conservation, with input from an advisory committee made up of bottlers, manufacturers, recyclers, redemption centers, local governments, nonprofits, consumers and other stakeholders. The state's solid waste disposal regulatory board will promulgate rules and hear appeals. The Division of Solid Waste Management will be in charge of operations and the Department of Revenue will manage accounting, but either agency may contract with a third party to carry out management and accounting functions.
The program ensures the uninterrupted funding of the state's existing litter program. Beverage distributors pay a "litter grants fee" of 1/8¢ per container, which replaces the litter tax they have been paying since the early 1980s.
The program may accept and pursue outside grants and donations.
If a redemption center or processor detects fraud and the case is successfully prosecuted, the center or processor is "rewarded" with half of any fines collected, less court costs.
If market forces fail to provide adequate redemption centers, the program is responsible for filling the gap. Most likely this will involve finding a local retailer or nonprofit agency willing to host a privately owned "microsite" (portable redemption centers that fit into two parking spaces).
Moneys in the program fund that are not needed to fund the program may be used to provide grants to local governments for recycling, litter control and related activities. At no point may they revert to the General Fund.
TennCan: What it
will and won't do
It will reduce beverage container litter by as much as 80% and overall litter volume by an estimated 40%.
It will increase our current recycling rate for beverage containers from 10% to a projected 80% more, keep 200,000 tons of recyclables out of our landfills each year, and ensure that $50 million worth of high-quality glass, plastic and aluminum is returned to the manufacturing stream.
It will ensure uninterrupted funding of Tennessee’s existing litter grants program, including funding for Keep Tennessee Beautiful and regular deployment of inmate litter crews from the county jails.
It will create 500 or more small businesses (“certified redemption centers”) and an estimated 1,800 fulltime-equivalent jobs (1,600 net).
It will provide the quantity and quality of feedstock manufacturers in Tennessee and throughout the Southeast are clamoring for.
It will lead to higher recycling rates for nondeposit recyclables such as food jars and detergent jugs, because many redemption centers will become “depots” to accept and sell such items.
It will benefit existing scrap buyers by increasing volume, revenue and market demand; and benefit paper mills by removing costly contamination from bales of paper and cardboard.
It will make curbside recycling more cost-effective and it will encourage curbside providers to become certified redemption centers and/or certified processors.
It will save taxpayers millions of dollars annually, by reducing costs for picking up litter, relieving some of the burden on underperforming recycling programs, and collecting, hauling and landfilling municipal solid waste.
It will generate millions of dollars for nonprofits and community causes, partly through donated refunds, and partly by encouraging nonprofits to open their own redemption centers.
What this bill won't do
It won't turn grocery stores into garbage dumps. Grocers may take back empties only if they become certified to do so, and only if they open a separate redemption center.
It won't suppress beverage sales nor increase beverage prices. If anything, it will help hold prices down in the long run, by holding down the energy and raw material costs of producing new containers.
It won't create mountains of unmarketable material, because there is always a strong market for the high-quality scrap from deposit programs—even glass.
It won't affect Tennessee’s existing efforts to control litter—except to ensure that there is less of it.
It won't attract crippling levels of fraud from adjacent states. Tennessee can expect that, at most, 3% to 5% of redeemed containers will be from out of state or otherwise illicit, a level of noncompliance easily absorbed by the number of eligible containers that are not redeemed. And every redeemed container represents revenue for redemption centers, jobs for workers and raw material for manufacturers.
It won't penalize lower-income residents. In one professional public-opinion survey, some of the strongest support—more than 93 percent—came from Tennesseans whose household income was less than $15,000 a year .