Amd §§27-1007, 27-1012, 27-1013 & 27-1015, En Con L
Increases the handling fee paid by a deposit initiator to a dealer or operator of a redemption center from three and one half cents to five cents per container; decreases the amount of quarterly payments a deposit initiator must pay the commissioner of taxation and finance from eighty to forty-seven percent of the balance of initiator's refund value account; provides for registration as a redemption center.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3375AREVISED 3/25/24
SPONSOR: Woerner TITLE OF BILL:
An act to amend the environmental conservation law, in relation to
registration as a redemption center and the handling fee paid to any
dealer or operator of a redemption center
PURPOSE OR GENERAL IDEA OF BILL:
This bill would increase the handling fee paid to any dealer or operator
of a redemption center from three and half cents to five cents and
permit deposit initiators to retain fifty-three percent of the balance
outstanding accumulated in the refund value account due to unredeemed
bottle deposits.
SUMMARY OF PROVISIONS:
Section 1: Amends subdivision six of section 27-1007 of the environ-
mental conservation law to direct deposit initiators to pay a five cent
handling fee for each beverage container accepted by the deposit initi-
ator from a dealer or operator of a redemption center.
§ 2: Amends subparagraphs a and c of subdivision four of section 27-1012
of the environmental conservation law to permit deposit initiators to
retain fifty-three percent of the balance outstanding in the refund
value account at the close of each quarter.
§ 3: Adds a new subdivision one to section 27-1013 of the environmental
conservation law and renumbers the remaining subdivisions accordingly.
Paragraph (a) of subdivision one requires redemption centers to register
annually with the state as a condition of operation, provided that
redemption centers in business before April 1, 2024, need not submit a
renewal application prior to the December 31st next succeeding the
effective date of the legislation. Applications shall be submitted in a
form prescribed by the commissioner which shall, at a minimum, require
certain specified information. Pursuant to paragraph (b), applications
for registration and renewal shall be deemed approved if the department
fails to act on such within thirty days of submission. Paragraph (c)
authorizes the commissioner to deny an application for registration or
renewal after due notice and opportunity of hearing and such a revoca-
tion is subject to review under article 78 of the Civil Practice Law and
Rules. Paragraph (d) prohibits receipt of a handling fee by any person,
firm or corporation which is not registered with the commissioner, and
if one has been received, it shall be promptly refunded. Paragraph (e)
requires the commissioner to promulgate rules and regulations governing
audits in connection with pick ups of redeemed beverage containers. Such
rules shall contain minimum specified parameters. The department shall
conduct such audits upon the request of a distributor, deposit initi-
ator, redemption center or dealer, provided such requests shall be
limited to no more than ten per calendar year with respect to each pick
up agent or redemption center with which the requester conducts pick up
transactions. Requests for audits must be made upon no less than two
business days' notice to the department.
§ 4: Adds technical amendments to subdivision 2 of section 27-1015 of
the environmental conservation law and amends subdivision 3 to also
apply to redemption centers and dealers by prohibiting distributors,
deposit initiators, redemption centers and dealers from knowingly
returning a beverage container for its refund value more than once.
Following a hearing or opportunity to be heard, a subsequent violation
shall result in a civil penalty of not less than $1,000 nor more than
$5,000, an amount equal to two times the amount of money received as a
result of the violation, and a revocation of the subject redemption
center's registration or a withholding of an equivalent amount from the
subject distributor's, deposit initiator's or dealer's refund value
account. Subdivision four is amended to add a civil penalty for a subse-
quent violation of up to $50,000 following a hearing or opportunity to
be heard. New subdivision 4-a adds new civil penalties, following a
hearing or opportunity to be heard, of up to $25,000 (up to $50,000 for
a subsequent violation, plus revocation of the redemption center's
registration) for willful tender to a deposit initiator by a redemption
center of more than forty-eight empty beverage containers for which the
redemption center knows or should reasonably know that no deposit was
paid in New York state. New subdivision 4-b addresses shortfalls discov-
ered through audit of pick up transactions. Pursuant to subdivision (a),
if there is a discrepancy of ten percent or more, then the deposit
initiator which requested the audit may withhold up to fifty percent (up
to one hundred percent for a subsequent violation) of the handling fee
otherwise due to a redemption center. Subdivision (b) authorizes a
redemption center which discovers a shortfall of ten percent or more
through audit of pick up transactions to receive one hundred fifty
percent (up to two hundred percent for a subsequent violation) of the
handling fee otherwise due to the redemption center.
§ 5: Establishes the effective date as April 1, 2024.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
Amendments to section 27-1013 of the environmental conservation law
require redemption centers to register with the department, require
annual renewal of such registrations, establish consequences for failure
to register, and establish parameters permitting distributors, deposit
initiators, redemption centers or dealers to initiate a defined number
of audits per calendar year of empty beverage container. Amendments to
section 27-1015 of the environmental conservation law establish and
apply civil penalties equally to distributors, deposit initiators,
redemption centers and dealers for specified violations, including know-
ingly returning a beverage container for its refund value more than once
and significant discrepancies in the count of empty beverage containers
upon audit.
JUSTIFICATION:
The New York State Returnable Container Act (the "Bottle Bill") became
law in 1982 and has been keeping billions of bottles out of landfills
and off roadsides ever since. In the beginning, the law assigned a 5T
bottle deposit on consumers, assessed a 1T handling fee to beverage
companies, and permitted beverage companies to retain 100% of unredeemed
bottle deposit revenues. The handling fee was - and continues to be -
the sole source of revenue for the small business redemption centers
needed to collect and sort empty bottles in communities throughout the
state. When the original handling fee amount proved insufficient to
support the redemption centers, the legislature increased the fee toand
2T in 1983 and 1998, respectively. Over the course of 27 years, beverage
companies retained more than $2 billion in unredeemed bottle deposit
revenues. Then, in 2009, the "Bigger, Better Bottle Bill" raised the
handling fee to 31-.T and adjusted the allocation of unredeemed bottle
deposit revenues to 20% to the beverage companies and 80% to the State
General Fund.
Now, twelve years later, while the sole revenue source (the handling
fee) has remained static, operational costs for small business redemp-
tion centers have continued to rise, including increased wage expenses,
associated payroll taxes, insurance premiums, and rents. During 2023
alone, nearly fifty redemption centers closed.
Redemption centers cannot be allowed to fail. There are hundreds of
small business redemption centers across the state, each of which
handles approximately 3.5 million empty bottles annually, for a state-
wide total of more than 3.1 billion bottles per year. In communities
lacking a grocery store or other large-scale redemption site, their
convenience and efficiency are indispensable; collectively, small busi-
ness redemption centers have helped New York consistently sustain a
statewide bottle return rate of over 60%. Beyond their contributions to
recycling and local employment, small business redemption centers also
play a vital role in the lives of community members, supporting communi-
ty fundraising activities through bottle drives conducted by PTAs, Boy
and Girl Scout troops, travel sports teams, and others. This bill does
not raise consumer costs.
PRIOR LEGISLATIVE HISTORY:
2022 - A.8517/S.8242 - referred to environmental conservation
FISCAL
IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
The re-allocation of unredeemed bottle deposit revenues between the
State General Fund and the beverage companies offsets the costs of
increasing the handling fee. Based on information received from the
Department of Taxation & Finance, we anticipate New York's loss of unre-
deemed bottle deposits to be approximately $50 million per year.
EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law.
