STAND. COM. REP. NO. 3252

Honolulu, Hawaii

RE: S.B. No. 2721

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred S.B. No. 2721, S.D. 1, entitled:

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

begs leave to report as follows:

The purpose and intent of this measure is to optimize the effectiveness of audits of the Deposit Beverage Container Program by requiring the Department of Health to develop and implement a risk-based selection process in choosing which redemption centers and distributors to audit.

Your Committee received testimony in support of this measure from the Department of Health, Hawaii Food Industry Association, and American Beverage Association. Your Committee received testimony in opposition to this measure from Reynolds Recycling, Inc.

Your Committee finds that fraud exists in the Deposit Beverage Container Program because redemption centers and distributors are not required to provide supporting records for the money paid for the redemption of recyclable material and the amount requested as reimbursement from the Department of Health. However, audits of the Deposit Beverage Container Program are inefficient, as the audits can only reveal a small or negligible difference between the amount of money that should have been reimbursed and the amount actually reimbursed. This measure will optimize these audits and ensure that all eligible beverage containers being redeemed are accurately accounted for and appropriately reimbursed.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2721, S.D. 1, and recommends that it pass Third Reading.

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

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KARL RHOADS, Chair