STAND. COM. REP. NO. 1061-04

Honolulu, Hawaii

, 2004

RE: S.B. No. 1611

H.D. 2

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Finance, to which was referred S.B. No. 1611, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE DEPOSIT BEVERAGE CONTAINER PROGRAM,"

begs leave to report as follows:

The purpose of this bill is to fine-tune the Deposit Beverage Container Program. The amendments to the program made by this bill include:

(1) Exempting from the income tax, amounts received as a deposit beverage container (container) deposit;

(2) Requiring annual importer and manufacturer reports of containers imported or manufactured, and monthly deposit beverage distributor (distributor) sales reports;

(3) Specifying January 1, 2005, as the date monthly distributor payment of the container fee and deposits shall be made based on distributor sales reports;

(4) Specifying the method to be used to calculate amounts due from distributors, and payment procedures;

(5) Clarifying that the sign posted by dealers giving the closest redemption center location is to be at the dealer's primary public entrance;

(6) Authorizing the Department of Health (DOH) to regulate the number and locations of redemption centers, permit bidding for the right to operate a center, and set a minimum population requirement for a redemption center service area;

(7) Repealing the requirement that redemption centers crush or destroy all containers accepted at redemption;

(8) Requiring DOH to pay redemption centers handling fees within 60 days of receipt of redemption center collection reports; and

(9) Repealing statutory provisions establishing distributor container inventory report and payment requirements.

Prior to the public hearing, your Committee circulated a proposed H.D. 2 for the purpose of receiving testimony.

Testimony in support of the proposed H.D. 2 was received from the City and County of Honolulu Department of Environmental Services, County of Hawaii Department of Environmental Management, Hawaii Chapter of the Sierra Club, Windward Ahupuaa Alliance, Reynolds Recycling, Life of the Land, and several concerned individuals. Testimony in opposition was submitted by the Chamber of Commerce of Hawaii, Retail Merchants of Hawaii, Hawaii Food Industry Association, Anheuser Busch Companies, Pepsi Bottling Group Hawaii, Coca Cola Bottling Company of Hawaii, Big Save Inc., and Tamura's Wahiawa. The Tax Foundation of Hawaii provided comments.

Your Committee deleted the contents of S.B. No. 1611, H.D. 1, and inserted the language of the proposed draft.

As amended, this bill:

(1) Requires DOH to notify distributors in writing of the container fee amount and setting a schedule for recalculation of the fee based on redemption rates;

(2) Clarifies that the container fee does not apply to containers exported for sale outside of Hawaii;

(3) Delays from January 1, 2005, to July 1, 2005, the date on which distributors must charge dealers and consumers a deposit, and DOH must inform distributors of the amount of the container fee;

(4) Requires dealers to operate a container redemption center by July 1, 2005;

(5) Adds container refund value labeling requirements;

(6) Authorizes DOH to allow dealers to charge customers the deposit on an unspecified date, if the containers are labeled with the deposit value, the distributor has paid the deposit, and customers are informed that the containers are not redeemable until an unspecified date;

(7) Specifies that the monthly distributor report must contain the number of beverages in containers manufactured, imported, and exported during the month;

(8) Allows distributors who annually import or manufacture 100,000 or fewer containers to report and make payments on a semi-annual basis and removing the requirement that importers and manufacturers submit annual reports;

(9) Adjusts procedures for notice of changes in the recovery rate and handling fee, and removing specified deadlines for payment of the fee;

(10) Adjusts redemption center reporting requirements; and

(11) Adds a new definition for "redemption rate" under the Deposit Beverage Container Program.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1611, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1611, H.D. 2.

 

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________

DWIGHT Y. TAKAMINE, Chair