Bill would change bottle law enforcement

Posted Feb. 16, 2010, at 7:11 p.m.

AUGUSTA, Maine — Lawmakers will consider emergency legislation this session to crack down on companies not complying with Maine’s bottle deposit law, a move that could generate millions of dollars for the state treasury.

“We won’t know for sure how much until the bill is a law and [Maine] Revenue Services is providing information to the Department [of Agriculture],” said Rep. John Martin, D-Eagle Lake, the sponsor of the bill for Gov. John Baldacci. “I don’t think there is any doubt, based on what we know is out there, that this will generate significant monies.”

Last year, state officials were surprised when they got a check from a company for unredeemed bottle deposits of nearly $1 million, nearly as much as is usually collected in a year. The company’s identity is confidential under state law.

“And that [confidentiality] has been the problem,” Martin said. “Revenue Services can’t tell what they know about who is not following the law.”

He said the way the state enforces the law is unnecessarily complicated. The Department of Agriculture is responsible for registering companies that must collect deposits, and the labels that must be used on the containers. The Maine Revenue Services collects the payments.

Hal Prince, director of the Division of Quality Assurance & Regulations at the Department of Agriculture, agreed. He said current law does not allow Maine Revenue Services to share the information it has from companies on deposits they have collected but have not returned to the state.

“Anybody that does not have their containers in a commingling agreement is supposed to report to Maine Revenue Services those unclaimed deposits, those that were paid but not redeemed by the consumers,” he said. “Those are supposed to be reported monthly to Revenue Services.”

Prince said current law prevents Maine Revenue Services from telling his office the names of those companies, many of which are based out of state. He said Martin’s bill would allow the sharing of that information and would authorize his office to ban a company’s sales in the state.

“This gives the Department of Agriculture the authority to pull those products from the shelves until the company complies with the law,” he said.

Prince said complying with the law would require companies to register with his office, file the labels used on the products and pay any past-due obligations to Maine Revenue Services.

Maine’s bottle deposit law requires consumers to pay a deposit on all beverage containers except dairy products and unprocessed cider. While most consumers turn in used containers and get their deposit money back, every year millions of containers are not returned, and that money is supposed to go to the state.

Martin believes that not all of the deposits on the estimated 1 billion containers sold in Maine each year are being accounted for, and the proposed legislation will make sure the state is getting what it is owed.

“I don’t think it’s right to have most businesses following the law and have some that don’t,” Martin said. “This is the law, and companies should be following it.”

Compliance has been a thorny issue and difficult to determine. In a report to the Legislature’s Business, Research and Economic Development Committee in 2008, the Agriculture Department said it could not answer the question of how many companies were not complying with the state laws after trying to obtain information from bottlers and distributors at the direction of the panel.

“The majority of the industry’s participation in responding to the survey questions was insufficient to reach any reliable conclusions. Many responses lacked sufficient data and there was no means to verify the data that was reported,” the study said. “The Department is unable to make any recommendation based on the findings of this report.”

The Agriculture Department report did indicate that there are containers that are not being registered with the state, and that with an overall increase in the number of containers, the value of the unredeemed deposits is in the millions of dollars.

Lawmakers rejected a proposal Martin made last year to audit compliance going back several years. That proposal was criticized by Maine bottlers and distributors for being overreaching.

Cheryl Timberlake, executive director of the Maine Beer and Wine Wholesalers Association, could not be reached for comment on Martin’s new proposal.

Prince said his agency has stepped up enforcement to make sure companies register as initiators of deposits and register the labels they use. In a 2008 audit, one large distributor in southern Maine had 30 percent of its containers unregistered.

He said nearly 600 companies are registered with the state under the deposit law. He said they range from multinational companies with many different types of containers covered by the law to small companies with a few containers.

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