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NEWS from the Office of the New York State Comptroller
Contact: Press Office 518-474-4015

DiNapoli Calls For Stepped Up Enforcement of State's Bottle Bill

December 20, 2017

The state Department of Taxation and Finance should increase monitoring and compliance with New York's returnable container deposit law to recover all the funds the state is entitled to from bottlers and beverage distributors, according to an audit released today by State Comptroller Thomas P. DiNapoli.

"New York's landmark bottle bill motivated New Yorkers to recycle more and protect our environment. Unredeemed deposits also provide a dedicated funding source for the state's Environmental Protection Fund," DiNapoli said. "My auditors found the state Department of Taxation and Finance's oversight over the program can be improved so environmental programs are not getting shortchanged. The department needs to do a better job collecting the money that could be used to protect and preserve our state's natural resources, parkland, waterways and beaches."

New York's Returnable Container Act, known as the "bottle bill," was enacted in 1982 to reduce litter, ease the burden on solid waste collection and disposal and encourage recycling. It requires a 5 cent deposit on soda, beer, bottled water and certain other beverage containers. Bottlers, distributors, dealers and certain retailers (deposit initiators) must register with the department and collect the initial deposit. When a bottle or can is not returned, the unclaimed deposit is held by the deposit initiator, who must remit 80 percent of any unclaimed bottle deposits to the state on a quarterly basis.

Deposit initiators are required to file quarterly reports detailing deposits, withdrawals and other information with the department. The department uses the data to calculate the state's share of unclaimed deposits. By law, $23 million, plus certain penalties for violations of the deposit law go to the Environmental Protection Fund (EPF), with most of the remainder deposited in the state's General Fund. In addition, in any year that the state collects more than $122.2 million in unclaimed deposits, the excess funds also go to the EPF.

The department collected $109.5 million in unclaimed deposits in 2015 and $102.7 million in 2016.

DiNapoli's auditors analyzed quarterly reports submitted by deposit initiators during the audit period of April 2014 through February 2017. The department had 515 registered deposit initiators, including 356 active and 159 inactive. Of the active deposit initiators, 39 did not file a return for any quarter during the audit period and eight were missing one or more quarterly returns. The audit found that although the department sent notices to deposit initiators who failed to file their quarterly report, it did not issue penalties and took no further action.

Auditors also found the department does not have procedures to verify data in the quarterly reports. Auditors identified questionable information in the quarterly reports that may be errors or fraudulent reporting. For example:

  • Some reports showed collections and redemptions that were not in 5 cent increments;
  • Some deposit initiators reported the same redemption percentage for each quarterly filing; and
  • Some deposit initiators reported significantly higher bank account service charges, which reduce the required remittance amount. For example, one deposit initiator reported no deposits collected or distributed during four quarters, but claimed over $500 in service charges each quarter.

DiNapoli's recommendations for the department include:

  • Assess and collect penalties on initiators that fail to file quarterly reports;
  • Improve monitoring of deposit initiator reporting, including those that are registered but do not file quarterly reports and those that report no deposit collections but report distributing redemptions;
  • Improve the penalty process, including automating the penalty assessment process and ensuring penalties are assessed for all deposit initiators that file late reports; and
  • Require deposit initiators to submit supporting documentation with their quarterly reports to support their reported amounts.

The department generally agreed with the audit's findings. Department officials told auditors they have begun to develop procedures to identify questionable returns. To aid in its review, the agency plans to require deposit initiators to submit supporting documentation with their quarterly filings, including weekly bank account balances and bank statements. Further, it has selected several deposit initiators to be audited. The department's full response is included in the audit.

Read the report, or go to:

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