RELATING TO THE DEPOSIT BEVERAGE CONTAINER PROGRAM.

HB1610

HOUSE OF REPRESENTATIVES

H.B. NO.

1610

THIRTY-THIRD LEGISLATURE, 2026

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:

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SECTION
1.
�
The legislature finds that deposit
beverage distributors are subject to unnecessary administrative burdens
relating to auditing under the deposit beverage container program.
�
Currently, all deposit beverage distributors
are required to obtain independent audits in years ending in an odd
number.
�
The legislature further finds that
this independent audit requirement is in addition to a risk-based process for
auditing of deposit beverage distributors and redemption centers.
�
Removing the requirement for independent
audits will ensure that small and mid-sized businesses are not burdened by high
compliance costs while still maintaining effective oversight through the
risk-based process for auditing.

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Accordingly,
the purpose of this Act is to:

����
(1)
�
Require only selected
redemption centers to send monthly or semi-annual distribution reports and
supporting records to the deposit beverage container program
; and

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(2)
�
Repeal the
requirement
that deposit beverage distributors develop and submit an internal control
process to the deposit beverage container program and obtain independent audits
for years ending in an odd number
.

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SECTION
2
.
�
Section 342G-121.5, Hawaii Revised Statutes,
is amended to read as follows:

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"
[
[
]
�342G-121.5[
]
]
�
Risk-based selection process; audit.
�
(a)
�
The department shall develop a risk-based
process to select, for periodic audit, certain deposit beverage distributor and
redemption center reports submitted to the deposit beverage container program.
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The department may hire personnel or external
consultants to perform the audits.
�
In
developing a risk-based process to audit certain deposit beverage distributor
and redemption center reports, the department shall:

����
(1)
�
Consider a variety
of risk factors, including but not limited to the amount of money transacted,
prior audit findings, and frequency of the deposit beverage distributor's or
redemption center's prior audits;

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(2)
�
Require
selected
deposit beverage
distributors
and redemption centers
to send monthly or semi-annual
distribution reports and supporting records, such as schedules of invoices,
shipping documents, point-of-sale reports, and other documentation as required
by the department, to the deposit beverage container program; and

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(3)
�
Ensure that the
audit process includes a risk assessment derived from deposit beverage
distributor and redemption center data based on the reports submitted,
including but not limited to carrying out analytics and trend analyses to
target certain deposit beverage distributors and redemption centers having
unusual fluctuations.

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(b)
�

The department shall:

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

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(2)
�
Consider
conducting follow-up audits; and

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(3)
�
Consider publicly
announcing violations.

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[
(c)
�
All deposit beverage distributors shall:

����
(1)
�
Develop and
submit to the deposit beverage container program for approval an internal
control process to ensure that the monthly or semi-annual distribution report
forms contain accurate data and that adequate records are maintained; and

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(2)
�
Obtain
independent audits for years ending in an odd number.
]"

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SECTION
3.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

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SECTION 4.
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This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

Deposit
Beverage Container Program; Deposit Beverage Distributors; Redemption Centers;
Internal Control Process; Independent Audits; Repeal

Description:

Requires only
selected redemption centers to send monthly or semi-annual distribution reports
and supporting records to the Deposit Beverage Container Program.
�
Repeals the requirement that all deposit
beverage distributors develop and submit an internal control process to the Deposit
Beverage Container Program and obtain independent audits for years ending in an
odd number.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.