An Act To Reduce Fraud in the Redemption of Beverage Containers
Maine Legislature, Session 129, LD 1055
Committee: Environment and Natural Resources
Sponsors: BICKFORD, BELLOWS, AUSTIN, HARRINGTON, MOONEN, PIERCE, TIPPING, BLACK
Amends: 38 MRSA §3102, 38 MRSA §3107

Legislative Document
No. 1055
H.P. 778
House of Representatives, February 28, 2019
An Act To Reduce Fraud in the Redemption of Beverage Containers
Reference to the Committee on Environment and Natural Resources suggested and ordered 
printed.
ROBERT B. HUNT
Clerk
Presented by Representative BICKFORD of Auburn.
Cosponsored by Senator BELLOWS of Kennebec and
Representatives: AUSTIN of Gray, HARRINGTON of Sanford, MOONEN of Portland, 
PIERCE of Falmouth, TIPPING of Orono, Senator: BLACK of Franklin.
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.