THE SENATE	S.B. NO.	2721
THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII

A BILL FOR AN ACT

Relating to the deposit beverage container program.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 342G, Hawaii Revised Statutes, is amended by adding a new section to part VIII to be appropriately designated and to read as follows:

"§342G-   Risk-based selection process; audit. (a) The department shall develop a risk-based process to select distributor and redemption center reports submitted to the deposit beverage container program for periodic audit. The department may hire personnel or external consultants to perform audits. In developing a risk-based process to monitor distributors and redemption centers, the department shall:

(1) Consider a variety of risk factors, including the amount of money transacted, prior audit findings, and the frequency of the distributor's or redemption center's prior audits;

(2) Require distributors to send monthly distribution report form supporting records, such as schedule of invoices, shipping documents, and point-of-sale reports, to the deposit beverage container program on a periodic basis; and

(3) Ensure that the audit process includes a risk assessment derived from distributor and redemption center data based on the reports submitted, including but not limited to performing analytics and trend analysis to target certain distributors and redemption centers with unusual fluctuations.

(b) The department shall:

(1) Summarize the results of distributor and redemption center audits and assess whether enforcement actions should be considered to ensure amounts that are being reported are appropriate;

(2) Consider conducting follow-up audits; and

(3) Consider public announcements of violations.

(c) The department shall modify the deposit beverage container requirements, including but not limited to requiring distributors to:

(1) Develop and submit to the program for approval an internal control process to ensure that accurate data is entered on the monthly distribution report and adequate records are maintained; and

(2) Obtain independent audits for years ending in odd-numbers.

(d) The deposit beverage container program shall require all redemption centers to install reverse vending machines or other type of mechanical devices approved by the program at all redemption center locations."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:

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Report Title:

Deposit Beverage Container Program; Auditor Recommendations; Risk-Based Selection Process; Distributors; Redemption Centers

Description:

Requires the department of health to implement the auditor's recommendations for the deposit beverage container program, including developing a risk-based selection process to select reports submitted by distributors and redemption centers for audit.

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