RELATING TO DEPOSIT BEVERAGE CONTAINER RECYCLING.

SB2474

THE SENATE

S.B. NO.

2474

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

RELATING
TO DEPOSIT BEVERAGE CONTAINER RECYCLING
.

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

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SECTION
1.
�
The legislature finds that, as an
island state with limited land space, Hawaii must limit waste generation or
face increasing and costly reliance on off-island waste disposal and recycling
management.
�
The legislature further
finds that in 2005, Hawaii implemented a deposit return program for certain
beverage containers that has performed better than curbside recycling programs,
but whose performance and convenience have declined over time, making it
difficult for many residents to redeem containers and obtain their deposit
refunds.

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The
legislature also finds that well-designed deposit return systems have been
proven to significantly reduce litter and packaging pollution by as much as
eighty per cent.
�
These programs achieve
recycling rates between eighty and ninety per cent and produce high-quality
materials that support closed-loop recycling and reduce reliance on virgin
resources.

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Accordingly,
the purpose of this Act is to update the deposit return program to improve
efficiency and performance, reduce burdens on retailers, expand convenient
redemption opportunities, and strengthen environmental and economic benefits
for the State by repealing the existing deposit beverage container program and
replacing it with a program administered by a recycling refund producer
responsibility organization.

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SECTION
2
.
�
Chapter 342G,
Hawaii Revised Statutes, is amended by adding a new part to be appropriately
designated and to read as follows:

"
Part

recycling refund producer responsibility
organization program

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�
342G-A
�
Definitions.
�

As used in this chapter, unless the context otherwise requires:

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"Brand" means a name,
symbol, word, logo, or mark that identifies an item and attributes the item and
its components, including packaging, to the brand owner of the item.

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"Brand owner" means a person or
entity that owns or licenses a brand or that otherwise has rights to market a
product under the brand, whether or not the brand's trademark is registered.

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"Consumer" means a person
who buys a beverage in a deposit beverage container for use or consumption and
pays the deposit.

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"Contracted redemption pick-up
operators" means affiliated or unaffiliated companies or organizations
that provide individualized valet or pick-up services of aggregated deposit
beverage containers for single-family or multifamily households.

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"Dealer" means a person that
engages in the sale of beverages in deposit beverage containers to a consumer
for off-premises consumption in the State.

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"Department" means the
department of health.

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"Deposit beverage" means
beer, ale, or other drink produced by fermenting malt; mixed spirits; mixed
wine; tea and coffee drinks regardless of dairy-derived product content; soda;
noncarbonated water; and all nonalcoholic drinks in liquid form that are intended
for internal human consumption and are contained in a deposit beverage
container.

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"Deposit beverage" does
not include:

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(1)
�
A liquid that is:

���������
(A)
�
A syrup;

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(B)
�
In a concentrated
form; or

���������
(C)
�
Typically added as
a minor flavoring ingredient in food or drink, such as extracts, cooking
additives, sauces, or condiments;

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(2)
�
A liquid that is a
drug, medical food, or infant formula as defined by the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 301 et seq.);

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(3)
�
A single serving
of one ounce or less of a dietary supplement as defined in the Dietary
Supplement Health and Education Act of 1994 (P.L. 103-417);

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(4)
�
A liquid that the
department finds to be the sole item of a meal or diet;

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(5)
�
Products frozen at
the time of sale to the consumer, or, in the case of institutional users such
as hospitals and nursing homes, at the time of sale to the users;

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(6)
�
Products designed
to be consumed in a frozen state;

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(7)
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Instant drink
powders;

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(8)
�
Seafood, meat, or
vegetable broths, or soups, but not juices; and

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(9)
�
Milk and all other
dairy-derived products, except tea and coffee drinks with trace amounts of
these products.

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"Deposit beverage
container" means the individual, separate, sealed glass, polyethylene
terephthalate, high density polyethylene, or metal container less than or equal
to sixty-eight fluid ounces, used for containing, at the time of sale to the
consumer, a deposit beverage intended for use or consumption in this State.

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"De minimis producer"
means a producer that:

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(1)
�
In its most recent
fiscal year introduced into commerce in the State less than one ton of deposit beverage
containers;

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(2)
�
Has a global gross
revenue, not including on-premises alcohol sales, for the prior fiscal year of:

���������
(A)
�
Until
, ,
less than $5,000,000; or

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(B)
�
Beginning
, ,
less than $5,000,000, as adjusted for inflation,

���������
adjusted for inflation by the
department on an annual basis
using the Consumer Price Index for Urban Wage
Earners and Clerical Workers published by the Bureau of Labor Statistics of the
federal Department of Labor, beginning
, .

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"Express redemption site"
means a designated return location that allows consumers to return deposit beverage
containers but do not provide cash handling on-site and instead may transport
deposit beverage containers to processing facilities and offer credits in the
form of refunds to a consumer's virtual account that is held by the producer
responsibility organization or their designee.
�
"Express redemption site" includes
bag-drop systems, reverse vending machines, or other redemption modalities that
enhance convenience and accessibility for consumers.

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"Full-service
redemption site" means a return location where consumers may return
deposit beverage contains to receive immediate refunds.

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"Person" means individual,
partnership, firm, association, public or private corporation, federal agency,
the State or any of its political subdivisions, trust, estate, or any other
legal entity.

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"Producer" means the brand
owner responsible for the brand visible on a deposit beverage container and that
is responsible for compliance with the requirements of this part for a deposit
beverage container that is introduced, either physically or via electronic commerce,
in the State.
�
"Producer"
includes the person that:

����
(1)
�
Is the importer of
record for the deposit beverage container into the United States for use in a
commercial enterprise that sells, offers for sale, or distributes the item in
this State; or

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(2)
�
First distributes
the deposit beverage container in or into this State.

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"Producer" does not
include government entities or charitable organizations or social welfare
organizations exempt from federal taxation under section 501(c)(3) or 501(c)(4)
of the Internal Revenue Code of 1986, as amended.

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"Recycling facility" means
all contiguous land and structures and other appurtenances, and improvements on
the land used for the collection, separation, recovery, and sale or reuse of
secondary resources that would otherwise be disposed of as municipal solid
waste and is an integral part of a manufacturing process aimed at producing a
marketable product made of postconsumer material.

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"Recycling refund producer
responsibility organization" or "producer responsibility
organization" means a nonprofit corporation that is exempt from federal
taxation under section 501(c)(3) of the Internal Revenue Code of 1986, as
amended, created by a group of producers to carry out the obligations of
producers under this part.

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"Redeemer" means a person,
other than a dealer or distributor, that demands the refund value in exchange
for the empty deposit beverage container.

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"Redemption center" means
an operation that accepts from consumers and provides the refund value for
empty deposit beverage containers intended to be recycled and ensures that the
empty deposit beverage containers are properly recycled.

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"Reverse vending machine"
means a mechanical device that accepts one or more types of empty deposit
beverage containers, issues a redeemable credit slip with a value not less than
the container's refund value.

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�
342G-B

�
Recycling refund producer responsibility
organization.
�
(a)
�
Each producer in the State shall register
with and be a member of a producer responsibility organization within six
months after a producer responsibility organization is approved by the
department and shall comply with all requirements under this part.

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(b)
�

A producer responsibility organization shall establish a schedule of
membership fees to be paid by members of the organization; provided that de
minimis producers shall not be required to pay membership fees.

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(c)
�

A producer responsibility organization shall be approved by the
department no later than one year after the effective date of this Act.

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(d)
�

The department shall develop and charge the producer responsibility
organization for the estimated costs of the department to implement,
administer, and enforce the requirements under this part no later than
, .

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(e)
�

A producer responsibility organization shall develop reporting
requirements for producers on the type and number of beverage containers sold
in the State.

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(f)
�
A producer
responsibility organization shall maintain a registry of all types of deposit
beverage containers introduced and redeemed in the State by all registered
producers.

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(g)
�

Beginning ,
, a producer responsibility organization shall submit
an annual report to the department that demonstrates its compliance with the
approved program plan and meets the criteria outlined in section 342G-D.

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(h)
�

A producer responsibility organization shall maintain a website that
includes a searchable database of current redemption sites and a list of all
brands and producers participating in the program.

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�
342G-C
�
Administrative fees; administrative costs.
�
The department shall set an annual
administrative fee to be paid by the producer responsibility organization

to
fund administrative, audit, and compliance activities associated with this
part.

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�
342G-D
�
Producer responsibility organization program
plan.
�
(a)
�
A producer responsibility organization shall
develop and submit a program plan for approval to the department every five
years.
�
The program plan shall include:

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(1)
�
A proposed list of
the types and sizes of deposit beverage containers included in the recycling
refund program;

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(2)
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The fee structure for
producer membership fees;

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(3)
�
A description of
the redemption network provided by the producer responsibility organization that
shall ensure convenient access for all redeemers;

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(4)
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A description of
how the producer responsibility organization intends to:

���������
(A)
�
Work with and
fairly compensate existing redemption centers; provided that the fair
compensation approach for existing redemption centers developed by the producer
responsibility organization shall be approved by the department;

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(B)
�
Develop new
redemption opportunities; and

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(C)
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Ensure convenience
standards are met;

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(5)
�
Operating
standards that independent redemption centers shall follow to be compensated by
the producer responsibility organization;

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(6)
�
Proposed
performance targets for the program and a description of how the producer
responsibility organization intends to achieve these performance targets;

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(7)
�
Planned education
and outreach activities to promote the program, ensure consumers know which deposit
beverage containers are redeemable, and provide consumers with convenient
access to redemption opportunities;

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(8)
�
A description of
how the producer responsibility organization plans to work with the department
to identify instances of fraud and prevent fraud in the program; and

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(9)
�
Incentives for
dealers and retailers that choose to act as certified redemption centers.

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(b)
�

The program plan shall be submitted after the department conducts
rulemaking pursuant to section 342G-R.

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�
342G-E
�
Department approval; program plan.
�
(a)
�
The department shall approve or deny a program
plan developed pursuant to section 342G-D no later than
days after submittal by a producer responsibility
organization.

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(b)
�

In approving a program plan, the department shall consider:

����
(1)
�
Whether the
producer responsibility organization describes operating standards and a
compensation mechanism that fairly includes independent redemption centers in
the redemption network; and

����
(2)
�
Whether the
program plan meets the convenience standards pursuant to section 342G-Q,
including whether the proposed redemption network:

���������
(A)
�
Accounts for the
total population, population density, and sales of deposit beverage containers
in regions of the State; and

���������
(B)
�
Includes a broad
range of entities that may opt to serve as a redemption location, including
municipal facilities, public spaces, institutions, schools, nonprofit
organizations, retailers, religious and charitable organizations, sporting
events, and recycling facilities.

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�
342G-F
�
Producer responsibility organization; fees.
�
(a)
�

In addition to setting and collecting membership fees under section
342G-B(b), the producer responsibility organization shall set and collect fees
on a frequency defined in the program plan.
�

The fees shall:

����
(1)
�
Vary based on the
total amount of deposit beverage containers each producer introduces in the
State; and

����
(2)
�
Reflect program
costs for each deposit beverage container type, net of commodity value for that
material type when used as a recycling material, as well as allocated fixed
costs that do not vary based on material type.

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(b)
�
After the first program plan, the recycling
refund producer responsibility organization shall consider incentivizing using
materials and design attributes that reduce the environmental impacts and human
health impacts of deposit beverage containers.

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�
342G-G
�
Beverage deposit; refund value.
�
(a)
�

By ,
, every deposit beverage container sold or offered for
sale for off-site consumption in the State shall have a refund value of 5 cents.
�
Each deposit beverage container shall have
the refund value clearly indicated on it as provided in section 342G-H.

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(b)
�

The refund value shall be stated on a receipt, invoice, or similar
billing document given to the consumer and shall not be embedded into the price
of the deposit beverage.
�
Deposit
beverage containers shall have a visible brand and universal product code to be
eligible for refund by a consumer.

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(c)
�

The refund value shall be the amount of the deposit required.
�
Once a refund value has been applied to a
deposit beverage container, the deposit on that deposit beverage container
shall not be changed and shall be paid to the producer responsibility
organization.

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(d)
�

The deposit on each filled deposit beverage container shall be paid by
the producer.

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�
342G-H
�
Deposit beverage container requirements.
�
(a)
�

Except as provided in subsection (b), every deposit beverage container
sold in the State shall clearly indicate the refund value of the deposit
beverage container and the word "Hawaii" or the letters
"HI".
�
The names or letters
representing the names of other states with comparable deposit legislation may
also be included in the indication of refund value.
�
The refund value on every deposit beverage
container shall be clearly, prominently, and indelibly marked by painting,
printing, scratch embossing, raised letter embossing, or securely affixed
stickers and shall be affixed on the top or side of the container in letters at
least one-eighth inch in size.

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(b)
�

Subsection (a) shall not apply to any type of refillable glass deposit
beverage container that has a brand name permanently marked on it and that has
the equivalent of a refund value of at least 5 cents, which is paid upon
receipt of the container by a dealer or deposit beverage distributor.

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(c)
�

A producer responsibility organization may describe through its program
plan how producers shall be required to label their deposit beverage containers
for identification under the program if additional containers are added to the
program.

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(d)
�

Containers that do not meet the definition of a deposit beverage
container shall not indicate "Hawaii" or "HI" on the
container.

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�
342G-I
�
Payment; producer data report.
�
(a)
�

Each producer shall regularly generate and submit to the producer
responsibility organization, as set by the producer responsibility
organization, a report on the net number of deposit beverage containers sold, donated,
or transferred by container size and type.
�

All information contained in the reports, including confidential
commercial and financial information, shall be treated as confidential and
protected to the extent allowed by state law.

����
(b)
�

Payment of the deposit beverage container fee pursuant to subsection (a)
shall be paid to the producer responsibility organization on a schedule set by
the producer responsibility organization.

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�
342G-J
�
Redemption centers.
�
(a)
�

Redemption centers shall:

����
(1)
�
Accept all types
of empty deposit beverage containers for which a deposit has been paid;

����
(2)
�
Verify that all deposit
beverage containers to be redeemed bear a valid Hawaii refund value;

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(3)
�
Pay to the
redeemer the full refund value in either cash or a redeemable voucher for all
deposit beverage containers, except as provided in section 342G-L;

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(4)
�
Ensure each
deposit beverage container collected is recycled through a contractual
agreement with an out-of-state recycler or an in-state recycling facility
permitted by the department; provided that this paragraph shall not apply if
the redemption center is operated by a recycler permitted by the department;
and

����
(5)
�
Remain open at
least thirty hours per week in high density population areas, of which at least
five hours shall be on Saturday or Sunday.

����
(b)
�

Redemption centers' redemption areas shall be maintained in full
compliance with applicable laws and the orders and rules of the department,
including permitting requirements if deemed necessary, under chapter 342H.

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�
342G-K
�
Reverse vending machine requirements.
�
(a)
�

Reverse vending machines may be used by redemption centers.
�
Reverse vending machines shall accept any
type of empty deposit beverage container and pay out the full refund value in
either cash or a redeemable voucher for those containers that bear a valid
Hawaii refund value.
�
The refund value
payments shall be aggregated and then paid if more than one deposit beverage container
is redeemed in a single transaction.
�
If
the reverse vending machine is unable to read the barcode then the reverse
vending machine shall reject the container.

����
(b)
�
The reverse vending machine shall be
routinely serviced to ensure proper operation and continuous acceptance of
empty deposit beverage containers and payment of the refund value.

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�
342G-L
�
Refusal or refund value payment for a deposit
beverage container.
�
Redemption
centers shall refuse to pay the refund value on any broken, corroded, or
dismembered deposit beverage container, or any deposit beverage container that:

����
(1)
�
Contains a
free-flowing liquid;

����
(2)
�
Does not properly
indicate a refund value;

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(3)
�
Contains a
significant amount of foreign material; or

����
(4)
�
Exhibits
characteristics of having been previously processed and baled.

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�
342G-M
�
Advisory committee.
�
The department shall convene an advisory
committee to assist in developing the rules needed to implement this
chapter.
�
The department shall select
members of the committee so as to obtain input on the state level as well as
assess the impact on each individual county, consumers, recyclers, and the
beverage industry.
�
Members of the
committee shall be appointed by the director and shall serve at the director's
pleasure.
�
A simple majority of the
committee members shall constitute a quorum for the purposes of recommending
rules and providing input to the director.

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�
342G-N
�
Sales prohibitions.
�
Beginning
, , no producer shall sell or
offer for sale in the State any deposit beverage container unless the producer
is registered with and in compliance with an approved recycling refund producer
responsibility organization pursuant to this part.

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�
342G-O
�
Third party audit.
�
The producer responsibility organization
shall hire a third-party auditor every other year to audit the organization.

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�
342G-P
�
Unredeemed deposits.
�
Any unredeemed deposits shall be held by
the producer responsibility organization and used for program operation and
system improvements.

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�
342G-Q
�
Redemption network convenience standards.
�
(
a)
�

The producer responsibility organization

shall propose in its
program plan a quantitative convenience standard, such as number of redemption
opportunities, for approval by the department, based on measurable criteria,
such as travel time and distance.

����
(b)
�

Additional convenience standard requirements shall include:

����
(1)
�
Appropriately
convenient and equitable access in urban, suburban, and rural areas, using
multiple redemption modalities, including independent redemption centers,
express redemption sites, full-service redemption sites, alternative redemption
options, and contracted redemption pick-up operators;

����
(2)
�
Proximity of
redemption opportunities to retail establishments associated with a majority of
beverage container sales in an area;

����
(3)
�
No additional
vehicle miles traveled for rural access;

����
(4)
�
Accessible and
convenient access for individuals relying on public transportation; and

����
(5)
�
Reasonable
opportunities for individuals to receive immediate deposit refunds.

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�
342G-R

�
Rules.
�

The department shall adopt rules pursuant to chapter 91
necessary for the purposes of this part.

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SECTION
3
.
�
Section 36-27,
Hawaii Revised Statutes, is amended by amending subsection (a) to read as
follows:

����
"
(a)
�
Except
as provided in this section, and notwithstanding any other law to the contrary,
from time to time, the director of finance, for the purpose of defraying the
prorated estimate of central service expenses of government in relation to all
special funds, except the:

����
(1)
�
Special
out-of-school time instructional program fund under section 302A-1310;

����
(2)
�
School
cafeteria special funds of the department of education;

����
(3)
�
Special
funds of the University of Hawaii;

����
(4)
�
Convention
center enterprise special fund under section 201B-8;

����
(5)
�
Special
funds established by section 206E-6;

����
(6)
�
Aloha
Tower fund created by section 206J-17;

����
(7)
�
Funds
of the employees' retirement system created by section 88-109;

����
(8)
�
Hawaii
hurricane relief fund established under chapter 431P;

����
(9)
�
Hawaii
health systems corporation special funds and the subaccounts of its regional
system boards;

���
(10)
�
Universal
service fund established under section 269-42;

���
(11)
�
Emergency
and budget reserve fund under section 328L-3;

���
(12)
�
Public
schools special fees and charges fund under section 302A-1130;

���
(13)
�
Sport
fish special fund under section 187A-9.5;

���
(14)
�
Neurotrauma
special fund under section 321H-4;

���
(15)
�
Glass
advance disposal fee established by section 342G-82;

���
(16)
�
Center
for nursing special fund under
section 304A-
2163;

���
(17)
�
Passenger
facility charge special fund established by section 261-5.5;

���
(18)
�
Solicitation
of funds for charitable purposes special fund established by section 467B-15;

���
(19)
�
Land
conservation fund established by section 173A-5;

���
(20)
�
Court
interpreting services revolving fund under section 607-1.5;

���
(21)
�
Trauma
system special fund under section 321-22.5;

���
(22)
�
Hawaii
cancer research special fund;

���
(23)
�
Community
health centers special fund;

���
(24)
�
Emergency
medical services special fund;

���
(25)
�
Rental
motor vehicle customer facility charge special fund established under section
261-5.6;

���
(26)
�
Shared
services technology special fund under section 27-43;

���
(27)
�
Automated
victim information and notification system special fund established under
section 353-136;

��
[
(28)
�
Deposit
beverage container deposit special fund under section 342G-104;

���
(29)
]

(28)
�
Hospital sustainability program special fund
under section 346G-4;

��
[
(30)
]

(29)
�
Nursing facility sustainability
program special fund under
section
346F-4
;

��
[
(31)
]

(30)
�
Hawaii 3R's school improvement fund under
section 302A-1502.4;

��
[
(32)
]

(31)
�
After-school plus program revolving fund
under section 302A-1149.5;

��
[
(33)
]

(32)
�
Civil monetary penalty special fund under
section 321-30.2;

��
[
(34)
]

(33)
�
Stadium development special fund under
section 109-3.5; and

��
[
(35)
]

(34)
�
Universal immunization purchase special fund
under section [
[
]325-133[
]
],

shall
deduct five per cent of all receipts of all other special funds, which
deduction shall be transferred to the general fund of the State and become
general realizations of the State.
�
All
officers of the State and other persons having power to allocate or disburse
any special funds shall cooperate with the director in effecting these
transfers.
�
To determine the proper
revenue base upon which the central service assessment is to be calculated, the
director shall adopt rules pursuant to chapter 91 for the purpose of suspending
or limiting the application of the central service assessment of any fund.
�
No later than twenty days prior to the
convening of each regular session of the legislature, the director shall report
all central service assessments made during the preceding fiscal year.
"

����
SECTION
4
.
�
Section 235-18, Hawaii Revised Statutes, is
repealed.

����
["
[�235-18]
�
Deposit beverage container deposit exemption.

This chapter shall not apply to amounts received as a deposit
beverage container deposit collected under part VIII of chapter 342G.
"]

����
SECTION
5
.
�
Section 445-231, Hawaii Revised Statutes, is
amended by amending the definition of "beer keg" to read as follows:

����
""Beer
keg" means a metal container used to hold five gallons or more of liquid
that is stamped, engraved, stenciled, or otherwise marked with the name of a
brewery manufacturer; provided that a deposit beverage container, as defined
under section [
342G-101,
]
342G-A
shall not be considered a beer
keg."

����
SECTION 6.
�
Section 708-835.8, Hawaii Revised Statutes,
is amended by amending subsection (2) to read as follows:

����
"
(2)
�

For the purposes of this section, "beer keg" means a metal
container used to hold five gallons or more of liquid that is stamped,
engraved, stenciled, or otherwise marked with the name of a brewery
manufacturer; provided that a deposit beverage container, as defined under
section [
342G-101,
]
342G-A,
shall not be considered a beer keg.
"

����
SECTION 7.
�
Chapter 342G, part VIII, Hawaii Revised
Statutes, is repealed.

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SECTION 8
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In codifying the new sections added by
section 2 of this Act, the revisor of statutes shall substitute appropriate
section numbers for the letters used in designating the new sections in this
Act.

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SECTION 9.
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Statutory material to be repealed is
bracketed and stricken.
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New statutory
material is underscored.

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SECTION 10.
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This Act shall take effect on July 1, 2026;
provided that any remaining balance in the deposit beverage container deposit
special fund shall lapse to the credit of the general fund.

INTRODUCED BY:

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Report Title:

Recycling;
Deposit Beverage Containers; Recycling Refund Producer Responsibility
Organization Program; Deposit Beverage Container Program

Description:

Repeals
the Deposit Beverage Container Program and replaces it with the Recycling
Refund Producer Responsibility Organization Program.

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