A new law requiring retailers such as grocery and convenience stores to tack fees onto single-use bags goes into effect Jan. 1. Many small businesses will evade the fees altogether, but who is exempt and who isn’t may prove confusing for business owners and consumers.

The law in question is HB21-1162, Management Of Plastic Products, and is intended to push consumers away from single-use plastic and paper bags in favor of more environmentally friendly alternatives such as reusable cloth bags.

Starting in January, consumers will be charged a 10-cent fee at certain stores for every single-use plastic or paper bag they take while checking out at their grocery stores, as described in the law. But that is only the first of two steps. In 2024, single-use plastic bags will be banned from large retailers outright, plastic foam carryout containers commonly used in restaurants will also be banned, and paper bags will continue to carry the 10-cent fee.

The law is aimed at large retailers such as Walmart, City Market, Walgreens and other corporations with outlets all over the country, and it includes exemptions for small businesses, Tim Walsworth, executive director of the Durango Business Improvement District, said at a BID meeting on Thursday.

If a particular business has three or fewer locations in Colorado, operates solely in the state and is not part of a larger franchise or corporation, it doesn’t have to implement fees this January, he said. But if a business doesn’t meet the criteria for exemption, it must introduce fees next year.

The state law leaves it up to municipalities to ensure businesses are collecting fees for single-use bags, said Tommy Crosby, economic opportunity coordinator. Sixty percent of fees will be allocated to the city explicitly for sustainability efforts while the business gets to keep the remaining 40%.

A prime concern in Durango’s business community is that the law will cause confusion among business owners and consumers alike, said Marty Pool, Durango sustainability program manager. One store on Main Avenue might be exempt from bag fees while the store next door must implement them.

“I would say that is the single largest point of potential confusion here, both from a business standpoint and from a customer experience standpoint,” he said.

The city of Durango has tasked Pool with determining whether a city ordinance or policy could help identify businesses that qualify for exemption.

Crosby said one option at the city’s disposal is to create an ordinance that requires or allows businesses to register their exemption status with the city. BID board members agreed the simplest way to do so would be to integrate exemption into the business license renewal process, or something similar.

With such a system in place, businesses can quickly determine whether they must apply bag fees or not, and the city can quickly determine what businesses owe it collected fees, Crosby said.

Jack Llewellyn, executive director of Durango Chamber of Commerce, said he supports an opt-in program for businesses because it would be simpler than an opt-out program in which all businesses, regardless of their exemption status by state standards, are automatically mandated to collect fees.

“Businesses right now are having a hard enough time keeping up with everything that’s being asked of them – trying to keep employees, trying to hire employees, trying to have a full workforce – when you add another layer of tracking it just makes it more difficult,” he said.

He compared single-use bag fees to 27-cent delivery fees that businesses must track and allocate to the state in accordance with the state’s retail delivery fee that took effect in July.

“There’s a lot of those extra requirements that are being asked of business. I think, too, some things have been rolled out without fleshing out all the details,” he said.

Store representatives for City Market, Walmart and Walgreens were prohibited by their employers from commenting about the conundrum of how to adjust to upcoming fee requirements, and corporate media representatives did not respond to requests for comment.

But Pool said franchise leaders are surely sorting out the logistics among themselves. One question is how will single-use bags and fees be counted at self-checkout registers.

“I think there’s going to be some folks pretty high up the chain in Kroeger stores that are having this conversation,” he said.

It’s easy to imagine people self-reporting the number of single-use bags they take at self-checkouts, he said. And companies already have methods to incentivize honesty and track “cheating” customers who try to get away with not paying for all of their items at self-checkouts.

He said the benefit of having a statewide regulatory law is that it forces companies to figure out how to meet requirements. Meanwhile, city officials and local business owners can focus on their needs.

“We haven’t reached out to those (large corporate) stores yet because the law is going to impact them one way or another,” he said. “Right now, the city is very interested in hearing from city staff, business communities and members of the public. Is there anything that we feel like we should change to make this run smoother for Durango?”

One pitfall with any sort of local ordinance is that it might affect businesses that would otherwise not be affected by the state law, he said.

The Management of Plastic Products law allows municipalities to adopt their own ordinances to introduce further restrictions on single-use bags, higher fees or an official exemption registry or process, as long as the local law complies with the state law. In other words, the city can add to the state’s requirements but it cannot subtract from them.

“At the end of the day, what the city of Durango wants is for this to be implemented as smoothly as possible,” he said. “From a business owner standpoint and from a customer standpoint and from a city administrative standpoint.”

Restaurants are exempt from charging fees under the first phase of the Management of Plastic Products law, but in 2024 they will be restricted from supplying customers with plastic foam carryout boxes.

Walsworth said many restaurants have already moved away from using plastic foam or polystyrene containers, but not all of them have.

Dave Woodruff, president of the Durango chapter of the Colorado Restaurant Association, said adapting to a plastic foam-free landscape might prove challenging for some restaurant models.

“Styrofoam, while not great for the environment, (is) cheap and it does its job well,” he said. “But at the same time, those kinds of fixed costs are not ROI-intensive. There’s no return investment on to-go, it’s just an absorbed cost by the restaurant.”

Although some restaurants such as casual grab-and-go joints might find it difficult to find a solution, it’s just the reality of the situation, he said.

“The law was passed and we have to go with the flow on it,” he said.

That may be the case, but there are alternatives to plastic foam containers, he added.

“There’s a lot of paper products that can be utilized. There’s a lot of green packaging out there that are biodegradable. I think there’s a lot of great options, it’s just a matter of how do you incorporate some of those rising costs into your pricing structure for the restaurant,” he said.

At the end of the day, it will be up to each restaurant operator to find the best option for their business model, he said.

Pool is presenting his findings from outreach to Durango City Council on Tuesday. He hasn’t identified a specific policy or ordinance to pursue yet and welcomes public input, he said.

cburney@durangoherald.com