SB3138 • 2026

RELATING TO INDEPENDENT AUDITS OF DEPOSIT BEVERAGE DISTRIBUTORS.

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: KOUCHI (Introduced by request of another party)
Last action: 2026-05-08
Official status: Enrolled to Governor.
Effective date: Not listed

Plain English Breakdown

The bill's effective date is unknown as it has been enrolled to the Governor and no further executive action is shown.

Independent Audits for Beverage Distributors

This bill changes the rules about when beverage distributors need to get independent audits based on how many containers they distribute.

What This Bill Does

Limits independent audit requirements to deposit beverage distributors who sell at least 2 million deposit beverage containers a year.
Sets different frequencies for obtaining and submitting independent audits depending on the number of containers distributed.
Defines 'distribute' as including making, importing, or selling beverages in deposit containers.
Creates minimum standards that independent audits must meet.

Who It Names or Affects

Deposit beverage distributors
The Department of Health

Terms To Know

distribute: to manufacture, import, or sell beverages in deposit containers
independent audit: a review by an outside expert to check the accuracy of financial and program information provided by beverage distributors

Limits and Unknowns

The bill does not specify when it will take effect.
It is unclear how many small businesses will be exempt from audits.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

CD1

Hawaii published version CD1

Plain English: SB3138 CD1 THE SENATE S.B.

SB3138 CD1 THE SENATE S.B.
NO.
3138 THIRTY-THIRD LEGISLATURE, 2026 S.D.
1 STATE OF HAWAII H.D.

HD1

Hawaii published version HD1

Plain English: SB3138 HD1 THE SENATE S.B.

SB3138 HD1 THE SENATE S.B.
NO.
3138 THIRTY-THIRD LEGISLATURE, 2026 S.D.
1 STATE OF HAWAII H.D.

SD1

Hawaii published version SD1

Plain English: SB3138 SD1 THE SENATE S.B.

SB3138 SD1 THE SENATE S.B.
NO.
3138 THIRTY-THIRD LEGISLATURE, 2026 S.D.
1 STATE OF HAWAII A BILL FOR AN ACT RELATING TO INDEPENDENT AUDITS OF DEPOSIT BEVERAGE DISTRIBUTORS .

Bill History

2026-05-08 S
Enrolled to Governor.
2026-05-08 S
Received notice of passage on Final Reading in House (Hse. Com. No. 888).
2026-05-06 H
Received notice of Final Reading (Sen. Com. No. 816).
2026-05-06 H
Passed Final Reading as amended in CD 1 with none voting aye with reservations; none voting no (0) and none excused (0).
2026-05-06 S
Passed Final Reading, as amended (CD 1). Ayes, 25; Aye(s) with reservations: none . 0 No(es): none. 0 Excused: none.
2026-05-01 H
Forty-eight (48) hours notice Wednesday, 05-06-26.
2026-05-01 H
Reported from Conference Committee (Conf Com. Rep. No. 103-26) as amended in (CD 1).
2026-05-01 S
48 Hrs. Notice (as amended CD 1) 05-06-26.
2026-05-01 S
Reported from Conference Committee as amended CD 1 (Conf. Com. Rep. No. 103-26).
2026-04-30 H
The Conference Committee recommends that the measure be Passed, with Amendments. The votes were as follows: 4 Ayes: Representative(s) Lowen, Perruso, Amato, Matsumoto; Ayes with reservations: none; 0 Noes: none; and 0 Excused: none.
2026-04-30 S
The Conference committee recommends that the measure be PASSED, WITH AMENDMENTS. The votes of the Senate Conference Managers were as follows: 2 Aye(s): Senator(s) San Buenaventura, Moriwaki; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) McKelvey.
2026-04-27 H
Conference Committee Meeting will reconvene on Thursday 04-30-26 10:00AM in conference room 325.
2026-04-24 H
Bill scheduled for Conference Committee Meeting on Monday, 04-27-26 10:00AM in conference room 325.
2026-04-23 S
Received notice of change in conferees (Hse. Com. No. 812).
2026-04-22 H
Received notice of Senate conferees (Sen. Com. No. 723).
2026-04-22 S
Senate Conferees Appointed: San Buenaventura Chair; Moriwaki Co-Chair; McKelvey.
2026-04-22 H
House Conferees Added: Representative Amato added as Conferee.
2026-04-21 S
Received notice of appointment of House conferees (Hse. Com. No. 800).
2026-04-21 H
House Conferees Appointed: Lowen, Perruso Co-Chairs; Matsumoto.
2026-04-16 H
Received notice of disagreement (Sen. Com. No. 710).
2026-04-16 S
Senate disagrees with House amendments.
2026-04-16 S
Received from House (Hse. Com. No. 752).
2026-04-14 H
Passed Third Reading with Representative(s) Amato voting aye with reservations; none voting no (0) and none excused (0). Transmitted to Senate.
2026-04-10 H
Deferred one day 04-14-26.
2026-04-10 H
Reported from FIN (Stand. Com. Rep. No. 2046-26), recommending passage on Third Reading.
2026-04-07 H
The committee on FIN recommend that the measure be PASSED, UNAMENDED. The votes were as follows: 16 Ayes: Representative(s) Todd, Takenouchi, Hartsfield, Hussey, Keohokapu-Lee Loy, Kitagawa, Kusch, Lee, M., Miyake, Morikawa, Perruso, Templo, Yamashita, Alcos, Reyes Oda; Ayes with reservations: Representative(s) Gedeon; Noes: none; and Excused: none.
2026-04-02 H
Bill scheduled to be heard by FIN on Tuesday, 04-07-26 2:00PM in House conference room 308 VIA VIDEOCONFERENCE.
2026-03-30 H
Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Lowen, Perruso, Quinlan excused (4).
2026-03-30 H
Reported from EEP (Stand. Com. Rep. No. 1435-26) as amended in HD 1, recommending passage on Second Reading and referral to FIN.
2026-03-24 H
The committee on EEP recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 5 Ayes: Representative(s) Lowen, Perruso, Chun, Kusch, Matsumoto; Ayes with reservations: none; 0 Noes: none; and 2 Excused: Representative(s) Kahaloa, Quinlan.
2026-03-23 H
Bill scheduled for decision making on Tuesday, 03-24-26 11:00AM in conference room 325 VIA VIDEOCONFERENCE.
2026-03-19 H
The committee(s) on EEP recommend(s) that the measure be deferred until 03-24-26.
2026-03-16 H
Bill scheduled to be heard by EEP on Thursday, 03-19-26 9:40AM in House conference room 325 VIA VIDEOCONFERENCE.
2026-03-10 H
Referred to EEP, FIN, referral sheet 16
2026-03-10 H
Pass First Reading
2026-03-06 H
Received from Senate (Sen. Com. No. 114) in amended form (SD 1).
2026-03-06 S
Report Adopted; Passed Third Reading. Ayes, 24; Aye(s) with reservations: Senator(s) Rhoads. Noes, 0 (none). Excused, 1 (Senator(s) Ihara). Transmitted to House.
2026-03-05 S
One Day Notice 03-06-26.
2026-03-05 S
Reported from WAM (Stand. Com. Rep. No. 2762) with recommendation of passage on Third Reading.
2026-03-02 S
The committee(s) on WAM recommend(s) that the measure be PASSED, UNAMENDED. The votes in WAM were as follows: 13 Aye(s): Senator(s) Dela Cruz, Moriwaki, DeCoite, Elefante, Hashimoto, Inouye, Kanuha, Kidani, Kim, Lee, C., Richards, Wakai, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none.
2026-02-25 S
The committee(s) on WAM deferred the measure until 03-02-26 10:01AM; Conference Room 211 & Videoconference.
2026-02-23 S
The committee(s) on WAM will hold a public decision making on 02-25-26 10:55AM; Conference Room 211 & Videoconference.
2026-02-17 S
Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM.
2026-02-17 S
Reported from HHS (Stand. Com. Rep. No. 2291) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM.
2026-02-06 S
The committee(s) on HHS recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in HHS were as follows: 4 Aye(s): Senator(s) San Buenaventura, McKelvey, Keohokalole, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Kanuha.
2026-02-03 S
The committee(s) on HHS has scheduled a public hearing on 02-06-26 1:00PM; Conference Room 225 & Videoconference.
2026-02-02 S
Referred to HHS, WAM.
2026-01-28 S
Passed First Reading.
2026-01-28 S
Introduced.
2026-01-26 S
Pending Introduction.

Official Summary Text

RELATING TO INDEPENDENT AUDITS OF DEPOSIT BEVERAGE DISTRIBUTORS.
Department of Health; Deposit Beverage Container Program; Independent Audit; Deposit Beverage Distributor; Exemption; Frequency
Limits the independent audit requirement under the State's Deposit Beverage Container Program to deposit beverage distributors who distribute 5 million or more deposit beverage containers a year. Identifies frequency of obtaining and submitting independent audits based on quantities of deposit beverage containers distributed. Defines "distribute" to include the manufacture, import, and sale of deposit beverage containers. Creates minimum requirements for independent audits. (CD1)

Current Bill Text

Read the full stored bill text

SB3138

THE SENATE

S.B. NO.

3138

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

RELATING
TO INDEPENDENT AUDITS OF DEPOSIT BEVERAGE DISTRIBUTORS
.

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

����
SECTION 1.
�
The legislature finds that the office of the
auditor conducts a financial and program audit of the department of health's
deposit beverage container program every other year.
�
The auditor's 2019 report to the legislature
reported accounting exceptions in records provided by six of twenty-four
deposit beverage distributors.
�
One of
the recommendations made by the auditor was to increase deposit beverage
distributors' accountability for information provided to the deposit beverage
container program by requiring deposit beverage distributors to obtain
independent audits for years ending in odd numbers.
�
The auditor's recommendation for deposit
beverage distributors to obtain independent audits for years ending in odd
numbers was adopted by the legislature in Act 12, Session Laws of Hawaii 2022.

����
The
legislature further finds that the independent audit requirement caused
financial hardship to small businesses.
�

In some cases, the cost of obtaining an independent audit exceeded the
amount of deposits and container fees paid by a distributor to the department
of health.

����
Therefore,
the purpose of this Act is to amend the deposit beverage distributor
independent audit requirement to mitigate the financial impact to small
businesses.

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

����
"
�342G-
���
��
Independent audit.
�
(a)
�

Deposit beverage distributors who distribute at least seventy-five
million deposit beverage containers in a calendar year ending in an even number
shall obtain an independent audit for the calendar year after the calendar year
ending in an even number.

����
(b)
�
Deposit beverage distributors who distribute
at least two million but fewer than seventy-five million deposit beverage
containers in a calendar year ending in four or nine shall obtain independent
audits for the calendar year after the calendar year ending in four or nine.

����
(c)
�
Deposit beverage distributors who distribute
fewer than two million deposit beverage containers in a calendar year shall be
exempt from the requirements of this section.

����
(d)
�
At a minimum, each independent audit shall:

����
(1)
�
Assess the accuracy of inventory
reports and payments to the department required by section 342G-105;

����
(2)
�
Assess the accuracy of fees
collected in sales, transfers, or donations of deposit beverage containers to
or from other deposit beverage distributors and dealers;

����
(3)
�
Contain a certification that the
independent audit is accurate to the best of the independent auditor's
knowledge and ability; and

����
(4)
�
Be submitted to the department by
September 30 of the calendar year after the deposit beverage distributor is
required to obtain the independent audit.
"

����
SECTION
3.
�
Section 342G-101, Hawaii Revised
Statutes, is amended by adding a new definition to be appropriately inserted
and to read as follows:

����
"
"Distribute"
means to manufacture beverages in deposit beverage containers in this State, or
to import and engage in the sale of filled deposit beverage containers to a
dealer or consumer.
"

����
SECTION
4.
�
Section 342G-121.5, Hawaii Revised
Statutes, is amended to read as follows:

����
"[
[
]
�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.
�
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;

����
(2)
�
Require deposit beverage distributors
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

����
(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.

����
(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;

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

����
(3)
�
Consider publicly announcing
violations.

����
(c)

�
All deposit beverage distributors shall[
:

����
(1)
�
Develop
]
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

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

����
SECTION
5.
�
Statutory material to be repealed is bracketed
and stricken.
�
New statutory material is
underscored.

����
SECTION
6.
�
This Act shall take effect upon its
approval.

INTRODUCED BY:

_____________________________

BY REQUEST

Report Title:

Department
of Health; Deposit Beverage Container Program; Independent Audit; Deposit
Beverage Distributor

Description:

Limits
the independent audit requirement to deposit beverage distributors who
distribute 2,000,000 or more deposit beverage containers a year.
�
Identifies frequency of obtaining and
submitting independent audits based on quantities of deposit beverage
containers imported, manufactured, or distributed. Creates minimum requirements
for independent audits.

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