Establishes the bottle redemption fraud task force to provide the governor and the legislature with information on the fraud, enforcement, and reporting requirements related to the New York state returnable container act.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3469
SPONSOR: Hyndman TITLE OF BILL:
An act to establish the bottle redemption fraud task force; and provid-
ing for the repeal of such provisions upon the expiration thereof
PURPOSE:
This legislation will conduct a study to evaluate the fraud, enforce-
ment, and reporting requirements of the Returnable Container Act.
SUMMARY OF PROVISIONS:
Section 1: Establishes the "bottle redemption fraud task force".
Section 2: Establishes the task force members, determines the level of
compensation to members and explains how the task force will fill any
vacancies.
Section 3: Requires that the task force submit a report to the governor,
president pro temp of the senate, and the speaker of the assembly. This
report will encompass: a review of appropriate law, evaluate the need
for coordination between programs, review the fiscal impact of fraudu-
lent bottle redemptions including those caused by transhipping fraud,
evaluation of enforcement, and make recommendations for legislative,
regulatory, and enforcement policies to address fraudulent bottle
redemptions.
Section 4. Effective date.
JUSTIFICATION:
Since the implementation of the bottle redemption program, bad actors
have abused the system set up to promote recycling. Reports have stated
that every year, there are about $100 million in unclaimed deposits and
an estimated $200 million to $300 million a year in fraud. A majority of
this fraud is caused by trans-shipping practices, which is when bad
actors haul beverage containers from other states where no nickel depos-
it was collected in New York for the container. These fraudulently
redeemed beverages cause our environmental programs to be shortchanged.
However, even with these reports of fraud, the State has failed to prop-
erly address these issues. Further, if the state fails to address these
issues prior to the expansion of the returnable container act, the fraud
associated with the act will also expand.
These issues of fraud have made it clear for the need of a specific task
force to determine the impact of that fraud on the State has become
clear. By creating this task force, New York can specifically uncover
two important facts: one, how much money this fraud is costing New York
State; and two, whether organized criminal enterprises constitute a key
part of this fraud. This task force aims to accomplish set out proposals
to combat the threats to the Returnable Container Act by evaluating the
current laws for weaknesses and determining the fiscal impact that fraud
by bad actors has on the bottle redemption program. It will also allow
disparate agencies to begin to coordinate and work together to solve
this unchecked problem. The information gathered will better inform the
legislature on how to best reduce fraud and it will address overall
solid waste issues going forward.
LEGISLATIVE HISTORY:
2023-24: A2603
2020: S7821, Kaminsky. Died on Calendar.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
3469
2025-2026 Regular Sessions
IN ASSEMBLY
January 27, 2025
___________
Introduced by M. of A. HYNDMAN -- read once and referred to the Commit-
tee on Environmental Conservation
AN ACT to establish the bottle redemption fraud task force; and provid-
ing for the repeal of such provisions upon the expiration thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The legislature hereby establishes the bottle redemption
2 fraud task force (referred to hereinafter as the "task force") to
3 conduct a comprehensive study of the fraud, enforcement, and reporting
4 requirements related to the New York state returnable container act.
5 § 2. (a) Such task force shall consist of fifteen members that shall
6 be appointed as follows: the state attorney general or their designee;
7 the commissioner of the department of taxation and finance or their
8 designee; the commissioner of the department of environmental conserva-
9 tion or their designee; the state comptroller or their designee; the
10 chair of the state liquor authority or their designee; the commissioner
11 of the department of agriculture and markets or their designee; one
12 member shall be appointed by the district attorneys association of the
13 state of New York; two members shall be appointed by the temporary pres-
14 ident of the senate and two members shall be appointed by the speaker of
15 the assembly, one shall be an individual who represents a municipality,
16 one shall be an individual who represents a deposit initiator, one shall
17 be an individual who represents a redemption center, and one shall be an
18 individual who represents a wholesale distributor; and four members
19 shall be appointed by the governor, one shall be an individual who
20 represents a deposit initiator and one shall be an individual who
21 represents a retailer.
22 (b) The task force shall be chaired by the attorney general or their
23 designee thereof.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07041-01-5
A. 3469 2
1 (c) Members of the task force shall receive no compensation for their
2 services but shall be reimbursed for their actual expenses incurred in
3 the performance of their duties in the work of the task force.
4 (d) Appointed members shall, to the greatest extent practicable have
5 by education or experience, knowledge of organized retail theft.
6 (e) The task force is authorized to audit any reverse vending machine.
7 § 3. Appointments shall be made within 60 days of the effective date
8 of this act. Any vacancies in the membership of the task force shall be
9 filled in the same manner provided for in the initial appointment.
10 § 4. The task force may consult with any organization, government
11 entity, or person, in the development of its report required under
12 section five of this act.
13 § 5. On or before one year after the effective date of this act, the
14 task force shall submit to the governor, the temporary president of the
15 senate and the speaker of the assembly a report containing, but not
16 limited to, the following information based on available data:
17 (a) A review of laws and regulations regarding the New York state
18 returnable container act and relevant civil and criminal penalties
19 related to the act;
20 (b) The need for interagency coordination of public education,
21 outreach, and prevention programs for retail stores, redemption centers,
22 municipalities, agents acting on behalf of the deposit initiators that
23 provide pickup services, and any other identified entities;
24 (c) The fiscal impact of fraudulent bottle redemptions and deposits in
25 the state of New York;
26 (d) The status of current enforcement efforts and recommendations on
27 what could be done to improve enforcement, including the addition of
28 more employees;
29 (e) A review of inter-state bottle redemption fraud, including, to the
30 extent practicable, information on the number of containers that origi-
31 nate from out-of-state shipments and a review of the practice of redeem-
32 ing beverage containers purchased out-of-state; and
33 (f) Recommended legislative, regulatory and enforcement solutions to
34 address fraudulent bottle redemptions and deposits, including, but not
35 limited to, inter-state initiatives.
36 § 6. This act shall take effect immediately and shall expire 24 months
37 after it shall have become a law when upon such date the provisions of
38 this act shall be deemed repealed.
