PA 10-25—sSB 127

Environment Committee

Finance, Revenue and Bonding Committee

AN ACT CONCERNING THE ACCOUNTING SYSTEM FOR REDEEMED BEVERAGE CONTAINERS

SUMMARY: This act makes the Department of Revenue Services (DRS), instead of the Department of Environmental Protection (DEP), commissioner the primary administrator for bottle deposit initiators. (A “deposit initiator” is the first distributor to collect the deposit on a beverage container sold to a person in the state. ) It requires (1) holding bottle bill deposits in a special trust fund for the state; (2) quarterly reporting on account balances, credits, and withdrawals; and (3) initiators to pay outstanding balances quarterly. The act also eliminates the state treasurer's right to examine records and allows both DEP and DRS to file a complaint with the attorney general to institute action.

The act also requires that the reimbursement of refund values for redeemed bottles be computed using the Internal Revenue Service (IRS) cash receipts and disbursements accounting method. It allows the DRS commissioner to accept an alternate accounting method if a deposit initiator petitions for one. The act treats any required payments as a tax for the purpose of specified sections.

EFFECTIVE DATE: July 1, 2010

REGULATIONS

The act eliminates the DEP commissioner's sole authority to adopt regulations governing deposit initiators. Instead, it allows the DRS commissioner, in consultation with the DEP commissioner, to adopt such regulations.

SPECIAL TRUST FUND AND ACCOUNTING METHODS

The act requires holding bottle bill deposits in a special trust fund for the state. It eliminates the requirement that the DEP commissioner adopt written accounting policies and procedures for reimbursement of refund values for redeemed bottles and instead requires that such reimbursements be computed using the IRS cash receipts and disbursements accounting method. It also allows deposit initiators to petition the DRS commissioner for an alternate accounting method. The petitioner must file his or her return with (1) a statement of objections and (2) the proposed alternative accounting method, with supporting details and proof, that the petitioner believes is proper and equitable. The DRS commissioner must promptly notify the petitioner whether the alternative method is accepted as reasonable and equitable and, if so, adjust the return and pay any necessary reimbursements.

QUARTERLY REPORTING

The act also requires deposit initiators to submit, beginning October 31, 2010, a quarterly report for the immediately preceding calendar quarter to the DRS commissioner. Reports must be filed electronically by the last day of the month after the quarter closes. The report, on a DRS-prescribed form, must include:

1. the special account balance at the beginning of the quarter for which the report is prepared;

2. all deposits credited during that quarter, including refund values paid;

3. all interest, dividends, or returns received;

4. all withdrawals, service charges, and overdraft charges; and

5. the balance at the close of the quarter.

OUTSTANDING BALANCE PAYMENT AND PENALTIES

Beginning October 31, 2010, a deposit initiator must electronically transfer the outstanding balance in the special account attributable to the previous calendar quarter to the DRS commissioner for deposit in the General Fund. If the required payment is not paid by the due date, the deposit initiator will be fined the greater of 10% of the amount due or $50. The amount due and unpaid bears interest at 1% per month from the due date. Penalties or interest cannot be paid with funds in the special account.

RIGHT TO EXAMINE RECORDS AND FILE COMPLAINTS

The act transfers the state treasurer's right to examine accounts and records of deposit initiators to the DRS commissioner. It allows both the DEP and DRS commissioners to file a complaint with the attorney general to institute action. Under current law, only the DEP commissioner can do so. The act applies provisions of the law relating to inspection of records, deficiency assessments, penalties, refunds, hearings, and appeals to these provisions.

OLR Tracking: JKVR: PF: DF