HOUSE OF REPRESENTATIVES	H.R. NO.	168
TWENTY-SEVENTH LEGISLATURE, 2013
STATE OF HAWAII

HOUSE RESOLUTION

requesting the Office of the auditor to conduct a management and financial audit of the glass advance deposit fee special account in the environmental management fund for fiscal year 2012-2013 to determine whether a change in the glass advance deposit fee is justified and necessary.

     WHEREAS, the Department of Health has supported measures, including S.B. No. 1131 (Regular Session of 2013), which propose an increase in the Glass Advance Deposit Fee charged to consumers from 1.5 cents per glass container to 3 cents per glass container for containers containing 12 ounces or less determined by weight or volume or 6 cents per glass container containing greater than 12 ounces determined by weight or volume; and

     WHEREAS, the Department of Health claims that the increase in the Glass Advance Deposit Fee is required to pay for glass recovery program costs incurred by the counties; and

     WHEREAS, the proposed increase in the Glass Advance Deposit Fee will impose additional costs upon consumers and businesses; and

     WHEREAS, the Office of the Auditor's recent audit of the Hawaii Deposit Beverage Container Deposit Special Fund dated June 30, 2010, found that the Deposit Beverage Container Fund is susceptible to fraud, may be operating inefficiently, and may have unreliable redemption reporting rates; and

     WHEREAS, the Office of the Auditor's report also found that an overstated redemption rate may lead program management to conclude erroneously that a higher container fee is justified and necessary to continue to operate the program; and
     WHEREAS, the issues raised in the Office of the Auditor's report regarding the Deposit Beverage Container Deposit Special Fund established pursuant to Part VIII of Chapter 342G, Hawaii Revised Statutes (HRS), poses general concerns as to whether there may be similar issues in the management of the Glass Advance Deposit Fee Special Account in the Environmental Management Fund established pursuant to Part VII of Chapter 342G, HRS; and

     WHEREAS, a financial and management audit of the Glass Advance Deposit Fee Special Account in the Environmental Management Fund would assist the Legislature in determining whether the proposed increases in the Glass Advance Deposit Fee are justified and necessary; and

     WHEREAS, the State has a significant interest in ensuring that the receipts of the Glass Advance Deposit Fee are being used appropriately by the expending agencies; now, therefore,

     BE IT RESOLVED by the House of Representatives of the Twenty-seventh Legislature of the State of Hawaii, Regular Session of 2013, that the Office of the Auditor is requested to conduct a management and financial audit of the Glass Advance Deposit Fee Special Account in the Environmental Management Fund for fiscal year 2012-2013 to determine whether a change in the Glass Advance Deposit Fee is justified and necessary; and

     BE IT FURTHER RESOLVED that the Office of the Auditor is requested to report findings and recommendations to the Legislature no later than 20 days prior to the convening of the Regular Session of 2014; and

     BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Acting Auditor, Director of Health, Director of the Department of Environmental Services of the City and County of Honolulu, Director of the Department of Environmental Management of the County of Maui, County Engineer of the Department of Public Works of the County of Kauai, and Director of the Department of Environmental Management of the County of Hawaii.

OFFERED BY:

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Report Title:

Glass Advance Deposit Fee; Environmental Management Fund; Auditor Report