Sen. Robert Hartwell, chair of the Senate Natural Resources and Energy Committee, introduced the legislation to place a 10-cent fee on disposable carryout bags from retail and grocery stores.
According to the bill, S.205, retail stores include supermarkets, grocery, convenience and retail merchandise stores, and restaurants.
Hartwell said Friday some stores could be exempt, such as those already encouraging the use of non-disposable bags or those selling products that require specialty bags.
Retailers would receive one penny back on the fee and the remainder would go into a solid waste assistance account.
Testifying before the committee Friday, retail store representatives warned the fee could be bad for business.
"I'll be very honest with you," said Jim Harrison, president of the Vermont Grocers' Association, "we have a lot of members who are very concerned about adding a new fee on our customers."
Harrison told the committee retailers want to reduce the amount of waste generated from disposable bags. "I'm just getting a lot of push back that," he told the committee.
The committee discussed placing a fee on just plastic bags instead of paper. But Harrison said they should treat both bags equally. "Whether you ban plastic or just put a fee on plastic, would be really, really problematic from our members' standpoint," he said.
Paper uses more energy to ship due to its weight and volume, Harrison said. "And selfishly, they are a lot more expensive to the retailers. So, we would just increase the retailers' costs," he said.
Marc Sherman, owner Stowe Mercantile, which makes a 5-cent charity donation every time customers use their own bag, says the bill as proposed would put small retailers at a disadvantage with online and out-of-state stores.
Hartwell said a bill will come out of committee before crossover, but he's not sure what it will look like. He said the bill would likely include a tax on both plastic and paper and include a waiver for some retail stores.
Washington, D.C., enacted similar legislation in 2010, which has been the model for a similar House bill placing a 5-cent fee on disposable bags.
According the Vermont Public Interests Research Group, 78 percent of D.C. businesses reported the fee has had a positive or neutral impact on their business.