HP0778, LD 1055, item 1, An Act To Reduce Fraud in the Redemption of Beverage Containers

An Act To Reduce Fraud in the Redemption of Beverage Containers

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 38 MRSA §3102, sub-§§1-A and 20-A are enacted to read:

1-A. Auditor. "Auditor" means an initiator of deposit that conducts an audit of beverage containers pursuant to section 3107, subsection 3-A or a person authorized by an initiator of deposit to conduct an audit of beverage containers pursuant to section 3107, subsection 3-A.

20-A. Shell. "Shell" means a standard trade package made of fiberboard, wood or plastic designed for packaging, carrying or transporting beverage containers.

Sec. 2. 38 MRSA §3107, sub-§3-A is enacted to read:

3-A. Beverage container auditing. The parties to a commingling agreement may include in the agreement or in an amendment to the agreement provisions authorizing an initiator of deposit subject to the agreement to request or conduct an audit of beverage containers presented by a dealer or local redemption center to the initiator of deposit for pickup or payment of refund value. Such provisions must:

A. Require that dealers and local redemption centers label each bag, shell, box or other receptacle containing empty beverage containers covered by the agreement with the following information:

(1) The business name, initials or other identifying mark of the dealer or local redemption center; and

(2) The number of beverage containers contained within each bag, shell, box or other receptacle that are eligible for payment of refund value;

B. Require that, prior to conducting an audit of beverage containers at the place of business of a dealer or local redemption center, the auditor request that the dealer or local redemption center submit to an on-premises audit. If the dealer or local redemption center refuses to submit to an on-premises audit, the auditor may conduct an off-premises audit;

C. Require that an audit of beverage containers be conducted on at least 1,000 beverage containers presented for pickup or payment of refund value by a dealer or local redemption center or on at least 1,000 beverage containers contained within a reverse vending machine;

D. Provide that if the audit results demonstrate that the total number of beverage containers claimed to be contained within the audited bags, shells, boxes or other receptacles on the labels required under paragraph A exceeds the total number of beverage containers actually contained within the audited bags, shells, boxes or other receptacles by more than 3%, the audited dealer or local redemption center fails the audit and the initiator of deposit that requested or conducted the audit may withhold the deposit and handling fee for the balance of the discrepancy and may take action against the audited dealer or local redemption center as authorized under paragraph F;

E. Provide that if the audit results demonstrate that the total number of beverage containers claimed to be contained within the audited bags, shells, boxes or other receptacles on the labels required under paragraph A is less than the total number of beverage containers actually contained within the audited bags, shells, boxes or other receptacles, the initiator of deposit that requested or conducted the audit must reimburse the audited dealer or local redemption center the deposit and handling fee for the total number of beverage containers actually contained within the audited bags, shells, boxes or other receptacles;

F. Authorize an initiator of deposit that requests or conducts an audit to take the following actions with respect to an audited dealer or local redemption center that fails an audit under paragraph D:

(1) For the first failed audit by the dealer or local redemption center, the initiator of deposit must provide to the dealer or local redemption center a warning regarding the actions that may be taken under subparagraphs (2) to (4) as a result of any subsequent failed audits;

(2) For the 2nd failed audit by the dealer or local redemption center, the initiator of deposit may assess against the audited dealer or local redemption center the percentage of the discrepancy determined during the failed audit on all beverage containers picked up by the initiator of deposit at the failed audit;

(3) For the 3rd failed audit by the dealer or local redemption center, the initiator of deposit may assess against the audited dealer or local redemption center the percentage of the discrepancy determined during the failed audit on all beverage containers picked up by the initiator of deposit from the dealer or local redemption center within the 30 days following the failed audit; and

(4) For the 4th and any subsequent failed audit by the dealer or local redemption center, the initiator of deposit may assess against the audited dealer or local redemption center the percentage of the discrepancy determined during the failed audit on all beverage containers picked up by the initiator of deposit from the dealer or local redemption center within the 60 days following the failed audit.

In taking the actions authorized under subparagraphs (2) to (4), an initiator of deposit may consider only those failed audits of the dealer or local redemption center that were conducted by or at the request of the initiator of deposit within a one-year period prior to the failed audit for which the initiator of deposit seeks to take such authorized actions; and

G. Require an initiator of deposit that intends to take an action authorized under paragraph F, subparagraphs (2) to (4) against an audited dealer or local redemption center that failed an audit to provide written notice of the action, sent by certified mail to the dealer or local redemption center, containing, at a minimum, the date of the audit; the name of the initiator of deposit that requested the audit; the name of the auditor who conducted the audit; the name of the person who presented the audited beverage containers for pickup or payment of refund value on behalf of the dealer or local redemption center; the total number of beverage containers that were claimed to be contained within the audited bags, shells, boxes or other receptacles on the labels required under paragraph A; the total number of beverage containers that were actually contained within the audited bags, shells, boxes or other receptacles; the action to be taken under paragraph F, subparagraphs (2) to (4); and the following statement:

"You have 30 days from your receipt of this notice to contest the action described in this notice by filing a grievance with the Department of Environmental Protection. The filing must briefly describe the basis for the grievance and must include a copy of this notice, and copies of the filing must be provided to the initiator of deposit that requested the audit and to the auditor named in this notice."

The department shall adopt rules, which are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A, governing the conduct of a grievance hearing and the issuance of a decision on a grievance. The rules must provide an informal process for the conduct of grievance hearings and may not require compliance with strict evidentiary rules at such hearings; must require the auditor to demonstrate to the department's satisfaction that the dealer or local redemption center failed the audit that constitutes the basis for the proposed action; and must require the department to provide a written decision subsequent to the close of a grievance hearing to all parties to the hearing.

Sec. 3. 38 MRSA §3107, sub-§4, as enacted by PL 2015, c. 166, §14, is amended to read:

4. Registration of commingling agreements. Not later than 48 hours following the execution or amendment of a commingling agreement, including an amendment that adds an additional party to an existing agreement and an amendment that authorizes a beverage container auditing process pursuant to subsection 3-A, the parties shall file a copy of the commingling agreement or amendment with the department.

summary

This bill amends the State's bottle redemption laws to authorize initiators of deposit subject to a commingling agreement to include in the agreement authorization to conduct audits of beverage containers presented by a dealer or local redemption center for pickup or payment of refund value and to take certain actions against the dealer or local redemption center in the case of a failed audit. The bill also provides for a grievance process whereby a dealer or local redemption center may file a grievance with the Department of Environmental Protection to challenge an action taken by an initiator of deposit in the case of a failed audit.

HP0778 LD 1055	Session - 129th Maine Legislature		LR 1230 Item 1
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