Res. No. 745
Resolution calling on the New York State Legislature to pass, and the Governor to sign, A.3469, legislation establishing the Bottle Redemption Fraud Task Force.
By Council Members Williams and Louis
Whereas, Originally enacted on June 15, 1982, The New York State Returnable Container Act, also known as The Bottle Bill, has proven to be an effective tool for decreasing litter and increasing recycling rates across New York State; and
Whereas, The Bottle Bill has helped reduce New York State’s roadside container litter by 70% over the course of its existence, with 6.4 billion containers recycled statewide in 2022, a redemption rate of approximately 70%, according to the New York State Department of Environmental Conservation (DEC); and
Whereas, That law requires manufacturers and certain distributors of covered beverages, referred to as deposit initiators, to collect a refundable deposit of at least $0.05 from retailers, who recoup the cost by collecting deposits from the end customer; and
Whereas, That law further requires certain retailers of covered beverages to accept returns of empty containers, refunding deposits for returned containers, and requires beverage distributors to reimburse retailers for the cost of collecting and recycling empty containers via a small handling fee per container; and
Whereas, $0.04 of every uncollected $0.05 deposit is remitted to the New York State Department of Taxation and Finance (DTF), netting approximately $117,000,000 in revenue in 2022, the bulk of which is transferred to the State’s General Fund, with $23,000,000 currently dedicated to the State’s Environmental Protection Fund each year; and
Whereas, It is unlawful to sell covered beverages in New York State for which a container deposit has not been initiated, and to sell containers that are not clearly marked with the New York State deposit information; and
Whereas, According to the DEC, New York State is estimated to be losing tens to hundreds of millions of dollars in revenue a year due to underreporting of deposits and other fraudulent abuses of the bottle redemption process; and
Whereas, Bottle Bill related fraud can include practices such as transporting and selling filled beverage containers from non-deposit states, redemption of bottles for which a deposit has not been initiated, tampering with reverse vending machines used to collect container returns, deposit initiators not registering with DTF, and failure to report, or underreporting sales of covered beverage containers; and
Whereas, In 2018 a joint investigation between DEC and DTF found that a single beverage distributor’s fraudulent sale of millions of containers for which no deposit had been initiated deprived the state of an estimated $4,000,000 dollars in revenue; and
Whereas, In October of 2023, DEC announced the formation of a statewide joint effort with DTF, the Department of Agriculture and Markets, State Liquor Authority, and other relevant entities to investigate claims of bottle bill fraud, prosecute instances of fraud, and establish strategies for the prevention of bottle bill fraud; and
Whereas, A.3469, sponsored by State Assembly Member Alicia Hyndman, would establish a bottle bill fraud task force to conduct a comprehensive study to provide the Governor and New York State Legislature with information on fraud, enforcement, and reporting requirements related to the New York State Returnable Container Act; and
Whereas, The task force would be comprised of 15 members, chaired by the State Attorney General or a designee, and include commissioners of relevant state agencies or their designees, members appointed by the district attorneys association of the State of New York, by the Governor and leaders of each house of the State Legislature, and include representatives of deposit initiators, redemption centers, wholesale distributors, and retailers, and a municipality; and
Whereas, The task force would be authorized to audit any reverse vending machine, and to consult with any organization, government entity, or person necessary for the production of its report to the Governor and New York State Legislature; and
Whereas, The task force report would contain a review of relevant laws, regulations, and civil and criminal penalties related to the Bottle Bill, and also discuss the need for interagency coordination on public outreach campaigns and fraud prevention initiatives, fiscal impacts of bottle redemption fraud, current enforcement efforts, and legislative recommendations to address bottle redemption fraud; and
Whereas, Fraudulent abuses of New York’s bottle redemption program threaten the program’s financial viability by forcing redemption centers to issue refunds on containers for which no deposit has been collected, and deprives New York residents of millions of dollars in funds for environmental programs and state initiatives every year; now, therefore, be it
Resolved, That the Council of the City of New York calls on the New York State Legislature to pass, and the Governor to sign, A.3469, legislation establishing the Bottle Redemption Fraud Task Force.
NRC
LS#18611
2/5/25