'Green' Retailing: National Bag Tax Proposed for U.S.United States Congressman
Jim Moran, (
pictured above in front of the U.S. Capital), a ten-term House Democrat who represents Virginia's 8th District, yesterday introduced new federal legislation -- the "Plastic Bag Reduction Act of 2009" -- into the U.S. House of Representatives that would levy a 5-cent per bag charge or tax to consumers for each single-use carrier bag they request at grocery stores and other retail outlets in order to encourage reusable bag use, his office announced on Earth Day 2009, which was yesterday.
In the case of grocery stores, the fee would apply to both single-use plastic carrier bags and paper grocery sacks.
The legislation is
H.R. 2091. It amends the Internal Revenue Code of 1986 to impose a retail tax on single-use carryout bags, and for other purposes.
H.R. 2091, the Plastic Bag Reduction Act of 2009," is currently in two House committees: Ways and Means and the Committee on Natural Resources. The legislation will be discussed and debated in both committees for a period to be determined by the Speaker of the House, Nancy Pelkosi, Democrat from San Francisco.
H.R. 2091 is the first federal bag tax bill to be been introduced in the U.S. Congress.
Under the legislation, a "single-use carryout bag" includes a grocery sack, dry-cleaning bag, take-out food bag, retail bag, membership or wholesaler bag, or service station bag used by a retail seller at the point of sale with a customer, according to
Congressman Moran, who is a ten-term (20 years) Member of the U.S. House of Representatives. The fee would be charged at the retail point-of-purchase, according to the Congressman's press spokesperson, Austin Durrer.
If the just-introduced bill passes the U.S. House and then the U.S. Senate in its present form, and is signed into law by President Obama, it would take effect on January 1, 2010. The proposed legislation also calls for the per bag tax to automatically rise to 25-cents a bag on January 1, 2015.
Out of the 5-cents charged to the customer, retailers can apply for a tax credit of one cent per bag for carrying out a qualified carryout bag recycling program. Additionally, one cent will be transferred to the Land and Water Conservation Fund which is used to clean up the environment. Another cent would be made available for state and local trash reduction and watershed protection programs. The remaining two cents would go towards reducing the national debt.
When the per bag tax increases to 25-cents a bag in 2015, the amounts above would increase as well in equal proportions.
In announcing the new legislation yesterday, Earth Day 2009, Congressman Moran said in explaining his reasoning behind sponsoring the legislation: "Our environment is literally choking on plastic bags. Whole swaths of our oceans, in some places up to 580 square miles – 13 times the size of the Commonwealth of Virginia -- have become floating landfills. Ingested marine debris, particularly plastic bags, are killing thousands of birds, turtles, marine mammals, fish, and squid each day."
The Congressman from Virginia added: "Equally disturbing, as these plastics break down, toxic chemicals are being released into the environment. Some environmentalists believe we may be witnessing the negative repercussions locally in the Potomac and Anacostia Rivers with the advent of inter-sex fish (80% of the male bass in the Potomac River were found to have female reproductive organs in recent study). While research is limited, it doesn't take a leap of faith to conclude that humans may be adversely affected if this trend continues."
In further explaining why he is proposing the new legislation the Congressman said: "Scientists are becoming alarmed about massive 'garbage patches' that are building up in nearly all of the world's oceans. Ocean currents and winds are slowly bringing debris -- estimated to be 10 percent of the world's plastic production -- to the center of five major ocean gyres in the North and South Atlantic, North and South Pacific, and the Indian Oceans.
The best-known patch consists of an estimated 100 million tons of plastic debris that has accumulated inside a circular vortex of currents known as the North Pacific gyre. It is estimated to be anywhere from 270 square miles to almost 580 square miles -- between six and thirteen times the size of the Commonwealth of Virginia -- depending on how it is measured."
Continuing, Congressman Moran added: "To add to the environmental degradation, as plastic items break down, any toxic additives they contain -- including flame retardants, antimicrobials, and plasticizers -- may be released into the environment. Many of these chemicals may disrupt the endocrine system -- the delicately balanced set of hormones and glands that affect virtually every organ and cell. In marine environments, excess estrogen has led to discoveries of male fish and seagulls with female sex organs.
People once viewed our rivers and oceans as limitless resources, believing that garbage in our watersheds and along our coasts did little harm. Those rose colored glasses are now gone. Plastic bags pose a serious threat to the environment, animal life and possibly even human health. The time has come to implement a national program that encourages the use of reusable bags instead of plastic," Congressman Moran said.
Global bag ban and bag fee lawsA number of countries throughout the world have enacted laws either banning outright or charging a per bag fee or tax on single-use plastic carrier bags. Many other nations are currently proposing such laws.
For example, China, the most-populous nation in the world, banned plastic bags in 2008.
Ireland imposed a per bag fee on the single-use plastic carrier bags in 2002. The government of Ireland announced recently that there has been a 94% reduction in the use of the bags since it enacted the bag fee law in 2002.
Below is a select list of other countries and cities that have either banned single-use plastic bags completely or imposed a bag fee law:
• Denmark imposed a fee in 1994
• South Africa banned plastic bags in 2003.
• Rwanda banned plastic bags in 2006.
• Tanzania banned plastic bags in 2006.
• Bangladesh banned plastic bags in 2002.
• Bhutan banned plastic bags in 2005.
• Zanzibar Islands banned plastic bags in 2006.
• South Australia has a ban set to go into in May, 2009.
• Dehli, India banned plastic bags in 2009.
Additionally, Canada and the United Kingdom currently are debating proposing either plastic bag ban or a per bag fee legislation in their respective legislative bodies, as are a number of other countries.
More than one Canadian municipality has already either banned or put a tax on the plastic bags.
Additionally, Loblaws, Canada's largest grocery chain, said last week it plans to charge customers for each single-use plastic carrier bag they request in the chain's stores.
On Earth Day 2008, Austin, Texas USA-based Whole Foods Market, Inc. stopped offering single-use plastic carrier bags in its 297 natural foods supermarkets in the U.S., Canada (6 stores) and the United Kingdom (5 stores). [Read our April 21, 2008 story here:
Earth Day 2008: Whole Foods Market, Inc. Becomes the First Major U.S. Food and Grocery Retailer to Stop Using Single-Use Plastic Carrier Bags Tomorrow.]
Earlier this month Whole Foods Market announced that in the year since eliminating the single-use plastic carrier bags in its stores, the natural grocery chain has seen reusable bag use by its customers triple.
The natural foods grocer also estimates that in the year it's prevented 150 million single-use plastic carrier bags from going into landfills by eliminating the use chainwide. [See our April 9, 2009 piece here:
Competitor News: One Year Since Eliminating Plastic Bags in Stores Whole Foods Market Says Reusable Bag Use Tripled; 150 Million Bags Out of Landfills.] Whole Foods offers customers free paper grocery sacks which are made from at least 50% post-consumer recycled paper and are 100% recyclable.
The British government earlier this month launched a national public relations campaign to encourage consumers to use reusable bags as part of a voluntary effort to reduce the use of single-use plastic carrier bags in the nation. British supermarkets offer only single-use plastic and not paper grocery sacks.
Food, grocery and other retailers in the United Kingdom, including number one Tesco, which owns and operates Fresh & Easy Neighborhood Market in the Western U.S., pledged two years ago that they would reduce the volume of the thin plastic bags they distribute in their stores by at least 50% as part of a voluntary-single-use bag reduction program they agreed on with the British government. British Prime Minister Gorden Brown has said if the retailers don't reach that goal by the end of 2009 that it's likely the Labour Party will propose, and he will support, a bag fee law of some kind at the end of this year.
We suspect that once the British Labour Party, which Brown heads, hears about the U.S. federal bag fee legislation, that will serve as an added motivator to one or more Labour Members of Parliament to introduce a bag fee bill sooner rather than later, despite the ongoing industry-government voluntary bag reduction scheme. Such national "green" laws are far more common in the United Kingdom than they are in the U.S. And we doubt Britain's liberal members of the Labour party will want to be upstaged by Democrats across the pond in the former colony when it comes to being first in passing single-use plastic carrier bag legislation.
Local bag ban and bag fee legislation growing trend in U.S.As we mentioned earlier, Congressman Moran's bill is the first time federal legislation on the bag issue has been proposed in Congress. But that hasn't stopped cities, counties and even states in the U.S. from either having already passed, or they are at present considering proposing, single-use bag ban or fee laws.
San Francisco, California was the first major U.S. city to ban the single-use plastic carrier bags, doing so in 2007.
A number of U.S. cities have followed San Francisco's lead, including nearby Palo Alto in the Bay Area and Manhattan Beach, in Southern California, although that city's bag ban law is being challenged in the courts by a plastic bag industry trade group and therefore has yet to be implemented. It was set to go into law in late 2008 but the trade group's lawsuit halted its implementation.
Seattle, Washington enacted a 20-cent per bag fee on the single-use plastic carrier bags in the summer of 2008. [Read our August 1, 2008 piece here:
Bag Bans and Fees: Seattle, Washington Imposes 20-Cent Fee On Single-Use Plastic Carrier Bags; Bans the Use of Foam Meat Trays in Supermarkets.]
And legislators in New York City and Washington, D.C. are currently debating bag fee laws in their respective cities, as are elected leaders in many other cities in the U.S. doing.
A bill that would put a 25-cent per bag fee or tax on single-use plastic carrier bags and paper grocery sacks was recently introduced in the California State Assembly, as we reported in this April 16, 2009 story:
Two New Bills in California State Assembly Would Put 25-Cent Per Bag Fee on Both Single-Use Plastic and Paper Carrier Bags.
Political bag battle?Expect to see an intense political battle, at least initially, between the single-use plastic bag industry and the Democrats in Congress who are supporting Congressman Moran's proposed legislation.
The single-use plastic carrier bag industry's trade association has been challenging plastic bag ban laws in various U.S. cities. It won a two-year battle against the city of Oakland, California, preventing the city from enacting its bag ban.
The industry is currently challenging the Manhattan Beach, California single-use plastic bag ban law which was to have been enacted in late 2008. A judge ruled that the law can't be implemented pending a decision on the bag industry's lawsuit against the city.
We are told Democrat Speaker of the House Nancy Pelosi (D-San Francisco) supports Congressman Moran's bill, and that there is likely a strong Democrat majority in the House that will support the legislation. The Democrats have a significant majority in the House. Therefore if the Speaker gets behind the bill passage, or the passage of a revised version, defeating the legislation will be difficult.
Expect Republican opposition, and perhaps opposition from a handful of moderate Democrats. On the other hand, some Democrats and Republicans who normally might not support the legislation for political and ideological reasons might support Congressman Moran's bill because one of the negative effects from the patchwork quilt of local bag ban and bag fee laws is that there is no uniformity on the issue. The laws differ from state-to-state, city-to-city. It's a negative to some members of Congress and to retailers but not to local governments or residents who generally like having their own, local laws, otherwise the laws wouldn't pass in the cities.
For example, the single-use plastic carrier bags are banned in San Francisco but have a 20-cent fee on them in Seattle, which is just two states away.
Big chain retailers like Wal-Mart, Safeway, Kroger and others that have stores throughout the U.S. hate this.
For example, Safeway has stores in San Francisco and Seattle. Only paper grocery sacks can be used in the chain's San Francisco stores. But in its Seattle stores plastic bags are fine, but have a 20-cent per bag fee.
And free plastic and paper bags are both fine for Safeway for its stores in Oakland, which is just across the Bay Bridge from San Francisco. But in next door to Oakland Berkeley, which is likely to pass a plastic bag ban or fee law this year, it will be a paper only town for Safeway for its stores in the city, if and when that law is passed. That's the patchwork quilt.
As more cities enact more bag ban or bag fee laws the patchwork quilt grows -- bag bans in some cities, bag fee laws in others, no laws in the rest. As a result of this patchwork quilt of legislation we might even see the U.S. retail food and grocery industry and its trade association, the Food Marketing Institute (FMI), support some sort of national bag fee law.
And it might actually be smart for the single-use plastic bag industry to support federal bag fee or tax legislation.
Doing so might prevent numerous state's, counties and cities from enacting outright single-use plastic carrier bag ban laws or passing bag fee laws that charge a much higher tax than 5-cents per bag because a federal law would already be in place.
In fact, in those U.S. cities where bag fee laws have been passed, the per bag fee ranges from a low of 15-cents -to- a high of 25-cents or slightly more, which is three -to- five times the amount proposed in Congressman Moran's federal bill. And we have yet to see a proposed municipal bag fee law in the U.S. that is less than 15-cents per bag. And we know that when it comes to government taxes or fess there is one constant -- those fees and taxed always eventually increase.
Congressman Moran's bill doesn't raise the 5-cent per bag fee to 25-cents until 2015.
Because the U.S. operates on a federalist system that allows for what's called "home rule" (states, counties and cities can pass local laws with certain limits), even if the federal bag fee legislation passes, U.S. state's, counties and cities can still enact their won local laws, including outright bag bans.
Additionally, the passage of any federal legislation like Congressman Moran's bill does not invalidate any current (or future) local laws such as San Francisco's, Palo Alto's or those in any other city, county or state.
Fresh & Easy Buzz Linkage - Related stories:>April 23, 2009:
Strategy Session: The In-Store Reusable Bag-Sharing Program -- A Way For Grocers to Significantly Increase Reusable Bag Use Among Shoppers>April 22, 2009:
Earth Day 2009: California-Based Grocers Conducting A Myriad Of Reusable Bag Promotions Today; Other 'Green' Activities For Earth Day>April 9, 2009:
Competitor News: One Year Since Eliminating Plastic Bags in Stores Whole Foods Market Says Reusable Bag Use Tripled; 150 Million Bags Out of Landfills>April 21, 2008:
Earth Day 2008: Whole Foods Market, Inc. Becomes the First Major U.S. Food and Grocery Retailer to Stop Using Single-Use Plastic Carrier Bags Tomorrow>April 8, 2009:
News & Analysis: Tesco's Fresh & Easy Gets Reprieve As Manhattan Beach, California Plastic Bag Ban Law Held Up By Plastic Bag Industry Group's Lawsuit>March 19, 2009:
Another Tesco Fresh & Easy Future Market City Bans the (Plastic) Bag: No Plastic Carrier Bags In Palo Alto, CA Supermarkets Starting September 18th>March 7, 2009:
Analysis & Commentary: The Seven Retail Operations Changes Tesco's Fresh & Easy Neighborhood Market Needs to Make to Help it Get On the Success Track>December 7, 2008:
Fresh & Easy Offers New Definition of 'Double Bagging;' Says Sales of Reusable Bags Has Doubled Since Introducing its 99-Cent Bag in October>August 13, 2008:
Tesco to Offer Shoppers Free Plastic Bags in UK Stores Only if Requested; Still Offering Plastic Bags-Only in Fresh & Easy USA Stores; No Paper Option>August 1, 2008:
Bag Bans and Fees: Seattle, Washington Imposes 20-Cent Fee On Single-Use Plastic Carrier Bags; Bans the Use of Foam Meat Trays in Supermarkets>July 23, 2008:
Plastic or Plastic: Single-Use Plastic Carrier Bag Bans in California Cities Threatening Tesco Fresh & Easy's Free 'Plastic Bag-Only' Policy>September 25, 2008:
Competitor News: Wal-Mart Joins Tesco, Others in Announcing A Plastic Bag Reduction Program of its Own>April 20, 2008:
Earth Day 2008: California Bag-Fee Bill AB 2058 Passes California State Assembly Natural Resource Committee; Next Stop Appropriations Committee>April 21, 2008:
Earth Day 2008: City of Los Angeles, CGA and Southern California Grocery Chains Partner in Major Reuseable Shopping Bag Giveaway Promotion>April 18, 2008:
Earth Day 2008: New Issues Are Beginning to Emerge With Growing Consumer Use of Reusable Shopping Bags: Worker Injuries, Shoplifting, 'Double-Bagging'>April 24, 2008:
Legislation: Oakland, California's Plastic Grocery Bag Ban Law Not in the 'Bag' Yet>April 13, 2008:
California State Assembly Natural Resource Committee to Vote on Statewide 25-cent Single-Use Plastic Carrier Bag-Fee on Monday>March 15, 2008:
UK 'Banish The (Plastic) Bags' Campaign Update: Morrison's Latest to Make Announcement; Tesco Holds Firm>March 5, 2008:
Britain's 'Banish The (Plastic) Bag' Campaign and Tesco: London Street Artist 'Celebrates' the Tesco Plastic Bag; More UK Retailers to Charge Bag Fee>March 8, 2008:
More UK Retailers Jump On The 'Banish The (Plastic) Bag' Campaign.
>March 4, 2008: "
Message From Across the Pond: Tesco is Right Square in the Middle of the 'Banish the (Plastic) Bags' Campaign in the United Kingdom>May 1, 2008:
Green Retailing Report: UK Supermarket Chain Waitrose Creates A 'Reusable-Bag Only' 'Green' Checkout Lane in One of Its Stores>April 21, 2008:
Earth Day 2008: Massachusetts'-Based Stop & Shop Supermarket Chain and General Mills Launch Free Reusable Shopping Bag Cross-Promotion For Earth Day[Follow Fresh & Easy Buzz around on Twitter.com at www.twitter.com/freshneasybuzz.]
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