SB 3138: Department of Health; Deposit Beverage Container Program; Independent Audit; Deposit Beverage Distributor; Exemption; Frequency

A BILL FOR AN ACT

RELATING TO INDEPENDENT AUDITS OF DEPOSIT BEVERAGE DISTRIBUTORS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that the office of the auditor conducts a financial and program audit of the department of health's deposit beverage container program every other year.  The auditor's 2019 report to the legislature reported accounting exceptions in records provided by six of twenty-four deposit beverage distributors.  One of the recommendations made by the auditor was to increase deposit beverage distributors' accountability for information provided to the deposit beverage container program by requiring deposit beverage distributors to obtain independent audits for years ending in odd numbers.  The auditor's recommendation for deposit beverage distributors to obtain independent audits for years ending in odd numbers was adopted by the legislature in Act 12, Session Laws of Hawaii 2022.

     The legislature further finds that the independent audit requirement caused financial hardship to small businesses.  In some cases, the cost of obtaining an independent audit exceeded the amount of deposits and container fees paid by a distributor to the department of health.

     Therefore, the purpose of this Act is to amend the deposit beverage distributor independent audit requirement to mitigate the financial impact on small businesses.

     SECTION 2.  Chapter 342G, Hawaii Revised Statutes, is amended by adding a new section to part VIII to be appropriately designated and to read as follows:

     "§342G-    Independent audit.  (a)  Deposit beverage distributors who distribute at least seventy-five million deposit beverage containers in a calendar year ending in an even number shall obtain an independent audit for the calendar year after the calendar year ending in an even number.

     (b)  Deposit beverage distributors who distribute at least five million but fewer than seventy-five million deposit beverage containers in a calendar year ending in four or nine shall obtain an independent audit for the calendar year after the calendar year ending in four or nine.

     (c)  Deposit beverage distributors who distribute fewer than five million deposit beverage containers in a calendar year shall be exempt from the requirements of this section.

     (d)  At a minimum, each independent audit shall:

     (1)  Assess the accuracy of inventory reports and payments to the department required by section 342G-105;

     (2)  Assess the accuracy of fees collected in sales, transfers, or donations of deposit beverage containers to or from other deposit beverage distributors and dealers;

     (3)  Contain a certification that the independent audit is accurate to the best of the independent auditor's knowledge and ability; and

     (4)  Be submitted to the department by September 30 of the calendar year after the deposit beverage distributor is required to obtain the independent audit."

     SECTION 3.  Section 342G-101, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

     ""Distribute" means to manufacture beverages in deposit beverage containers in the State, or to import and engage in the sale of filled deposit beverage containers to a dealer or consumer."

     SECTION 4.  Section 342G-121.5, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§342G-121.5[]]  Risk-based [selection process;] audit.  (a)  The department shall develop a risk-based process to select, for periodic audit, certain deposit beverage distributor and redemption center reports submitted to the deposit beverage container program.  The department may hire personnel or external consultants to perform the audits.  In developing a risk-based process to audit certain deposit beverage distributor and redemption center reports, the department shall:

     (1)  Consider a variety of risk factors, including but not limited to the amount of money transacted, prior audit findings, and frequency of the deposit beverage distributor's or redemption center's prior audits;

     (2)  Require deposit beverage distributors to send monthly or semi-annual distribution reports and supporting records, such as schedules of invoices, shipping documents, point-of-sale reports, and other documentation as required by the department, to the deposit beverage container program; [and]

     (3)  Ensure that the audit process includes a risk assessment derived from deposit beverage distributor and redemption center data based on the reports submitted, including but not limited to carrying out analytics and trend analyses to target certain deposit beverage distributors and redemption centers having unusual fluctuations[.]; and

     (4)  Develop a web-based system to allow for online submission by deposit beverage distributors of the reports required by this chapter.

     (b)  The department shall:

     (1)  Summarize the results of the deposit beverage distributor and redemption center audits and assess whether enforcement actions should be considered to ensure that the amounts that are being reported are accurate;

     (2)  Consider conducting follow-up audits; and

     (3)  Consider publicly announcing violations.

     (c)  All deposit beverage distributors shall[:

     (1)  Develop] develop and submit to the deposit beverage container program for approval an internal control process to ensure that the monthly or semi-annual distribution report forms contain accurate data and that adequate records are maintained[; and

(2)  Obtain independent audits for years ending in an odd number]."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

Report Title:

Department of Health; Deposit Beverage Container Program; Independent Audit; Deposit Beverage Distributor; Exemption; Frequency

Description:

Limits the independent audit requirement under the State's Deposit Beverage Container Program to deposit beverage distributors who distribute 5 million or more deposit beverage containers a year.  Identifies frequency of obtaining and submitting independent audits based on quantities of deposit beverage containers distributed.  Defines "distribute" to include the manufacture, import, and sale of deposit beverage containers.  Creates minimum requirements for independent audits.  (CD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO INDEPENDENT AUDITS OF DEPOSIT BEVERAGE DISTRIBUTORS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that the office of the auditor conducts a financial and program audit of the department of health's deposit beverage container program every other year.  The auditor's 2019 report to the legislature reported accounting exceptions in records provided by six of twenty-four deposit beverage distributors.  One of the recommendations made by the auditor was to increase deposit beverage distributors' accountability for information provided to the deposit beverage container program by requiring distributors to obtain independent audits for years ending in odd numbers.  The auditor's recommendation for deposit beverage distributors to obtain independent audits for years ending in odd numbers was adopted by the legislature in Act 12, Session Laws of Hawaii 2022.

     The legislature further finds that the independent audit requirement caused financial hardship to small businesses.  In some cases, the cost of obtaining an independent audit exceeded the amount of deposits and container fees paid by a distributor to the department of health.

     Therefore, the purpose of this Act is to amend the deposit beverage distributor independent audit requirement to mitigate the financial impact on small businesses.

     SECTION 2.  Chapter 342G, Hawaii Revised Statutes, is amended by adding a new section to part VIII to be appropriately designated and to read as follows:

     "§342G-    Independent audit.  (a)  Deposit beverage distributors who distribute at least            deposit beverage containers in a calendar year ending in an even number shall obtain an independent audit for the calendar year after the calendar year ending in an even number.

     (b)  Deposit beverage distributors who distribute at least            but fewer than            deposit beverage containers in a calendar year ending in four or nine shall obtain independent audits for the calendar year after the calendar year ending in four or nine.

     (c)  Deposit beverage distributors who distribute fewer than            deposit beverage containers in a calendar year shall be exempt from the requirements of this section.

     (d)  At a minimum, each independent audit shall:

     (1)  Assess the accuracy of inventory reports and payments to the department required by section 342G-105;

     (2)  Assess the accuracy of fees collected in sales, transfers, or donations of deposit beverage containers to or from other deposit beverage distributors and dealers;

     (3)  Contain a certification that the independent audit is accurate to the best of the independent auditor's knowledge and ability; and

     (4)  Be submitted to the department by September 30 of the calendar year after the deposit beverage distributor is required to obtain the independent audit."

     SECTION 3.  Section 342G-101, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

     ""Distribute" means to manufacture beverages in deposit beverage containers in the State or to import and engage in the sale of filled deposit beverage containers to a dealer or consumer."

     SECTION 4.  Section 342G-121.5, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§342G-121.5[]]  Risk-based [selection process;] audit.  (a)  The department shall develop a risk-based process to select, for periodic audit, certain deposit beverage distributor and redemption center reports submitted to the deposit beverage container program.  The department may hire personnel or external consultants to perform the audits.  In developing a risk-based process to audit certain deposit beverage distributor and redemption center reports, the department shall:

     (1)  Consider a variety of risk factors, including but not limited to the amount of money transacted, prior audit findings, and frequency of the deposit beverage distributor's or redemption center's prior audits;

     (2)  Require deposit beverage distributors to send monthly or semi-annual distribution reports and supporting records, such as schedules of invoices, shipping documents, point-of-sale reports, and other documentation as required by the department, to the deposit beverage container program; [and]

     (3)  Ensure that the audit process includes a risk assessment derived from deposit beverage distributor and redemption center data based on the reports submitted, including but not limited to carrying out analytics and trend analyses to target certain deposit beverage distributors and redemption centers having unusual fluctuations[.]; and

     (4)  Develop a web-based system to allow for online submission by deposit beverage distributors of the reports required by this chapter.

     (b)  The department shall:

     (1)  Summarize the results of the deposit beverage distributor and redemption center audits and assess whether enforcement actions should be considered to ensure that the amounts that are being reported are accurate;

     (2)  Consider conducting follow-up audits; and

     (3)  Consider publicly announcing violations.

     (c)  All deposit beverage distributors shall[:

     (1)  Develop] develop and submit to the deposit beverage container program for approval an internal control process to ensure that the monthly or semi-annual distribution report forms contain accurate data and that adequate records are maintained[; and

     (2)  Obtain independent audits for years ending in an odd number]."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on July 1, 3000.

Report Title:

Department of Health; Deposit Beverage Container Program; Independent Audit; Deposit Beverage Distributor

Description:

Requires deposit beverage distributors to obtain independent audits at certain frequencies based on the amount of deposit beverage containers distributed.  Requires independent audits to assess specific criteria and report certain information.  Requires the Department of Health to develop a web-based system to allow online submission of reports.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO INDEPENDENT AUDITS OF DEPOSIT BEVERAGE DISTRIBUTORS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that the office of the auditor conducts a financial and program audit of the department of health's deposit beverage container program every other year.  The auditor's 2019 report to the legislature reported accounting exceptions in records provided by six of twenty-four deposit beverage distributors.  One of the recommendations made by the auditor was to increase deposit beverage distributors' accountability for information provided to the deposit beverage container program by requiring deposit beverage distributors to obtain independent audits for years ending in odd numbers.  The auditor's recommendation for deposit beverage distributors to obtain independent audits for years ending in odd numbers was adopted by the legislature in Act 12, Session Laws of Hawaii 2022.

     The legislature further finds that the independent audit requirement caused financial hardship to small businesses.  In some cases, the cost of obtaining an independent audit exceeded the amount of deposits and container fees paid by a distributor to the department of health.

     Therefore, the purpose of this Act is to amend the deposit beverage distributor independent audit requirement to mitigate the financial impact to small businesses.

     SECTION 2.  Chapter 342G, Hawaii Revised Statutes, is amended by adding a new section to part VIII to be appropriately designated and to read as follows:

     "§342G-    Independent audit.  (a)  Deposit beverage distributors who distribute at least seventy-five million deposit beverage containers in a calendar year ending in an even number shall obtain an independent audit for the calendar year after the calendar year ending in an even number.

     (b)  Deposit beverage distributors who distribute at least five million but fewer than seventy-five million deposit beverage containers in a calendar year ending in four or nine shall obtain independent audits for the calendar year after the calendar year ending in four or nine.

     (c)  Deposit beverage distributors who distribute fewer than five million deposit beverage containers in a calendar year shall be exempt from the requirements of this section.

     (d)  At a minimum, each independent audit shall:

     (1)  Assess the accuracy of inventory reports and payments to the department required by section 342G-105;

     (2)  Assess the accuracy of fees collected in sales, transfers, or donations of deposit beverage containers to or from other deposit beverage distributors and dealers;

     (3)  Contain a certification that the independent audit is accurate to the best of the independent auditor's knowledge and ability; and

     (4)  Be submitted to the department by September 30 of the calendar year after the deposit beverage distributor is required to obtain the independent audit."

     SECTION 3.  Section 342G-101, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

     ""Distribute" means to manufacture beverages in deposit beverage containers in this State, or to import and engage in the sale of filled deposit beverage containers to a dealer or consumer."

     SECTION 4.  Section 342G-121.5, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§342G-121.5[]]  Risk-based [selection process;] audit.  (a)  The department shall develop a risk-based process to select, for periodic audit, certain deposit beverage distributor and redemption center reports submitted to the deposit beverage container program.  The department may hire personnel or external consultants to perform the audits.  In developing a risk-based process to audit certain deposit beverage distributor and redemption center reports, the department shall:

     (1)  Consider a variety of risk factors, including but not limited to the amount of money transacted, prior audit findings, and frequency of the deposit beverage distributor's or redemption center's prior audits;

     (2)  Require deposit beverage distributors to send monthly or semi-annual distribution reports and supporting records, such as schedules of invoices, shipping documents, point-of-sale reports, and other documentation as required by the department, to the deposit beverage container program; [and]

     (3)  Ensure that the audit process includes a risk assessment derived from deposit beverage distributor and redemption center data based on the reports submitted, including but not limited to carrying out analytics and trend analyses to target certain deposit beverage distributors and redemption centers having unusual fluctuations[.]; and

     (4)  Develop a web-based system to allow for online submission by deposit beverage distributors of the reports required by this chapter.

     (b)  The department shall:

     (1)  Summarize the results of the deposit beverage distributor and redemption center audits and assess whether enforcement actions should be considered to ensure that the amounts that are being reported are accurate;

     (2)  Consider conducting follow-up audits; and

     (3)  Consider publicly announcing violations.

     (c)  All deposit beverage distributors shall[:

     (1)  Develop] develop and submit to the deposit beverage container program for approval an internal control process to ensure that the monthly or semi-annual distribution report forms contain accurate data and that adequate records are maintained[; and

(2)  Obtain independent audits for years ending in an odd number]."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on January 30, 2050.

Report Title:

Department of Health; Deposit Beverage Container Program; Independent Audit; Deposit Beverage Distributor

Description:

Limits the independent audit requirement under the State's Deposit Beverage Container Program to deposit beverage distributors who distribute 5,000,000 or more deposit beverage containers a year.  Identifies frequency of obtaining and submitting independent audits based on quantities of deposit beverage containers imported, manufactured, or distributed. Creates minimum requirements for independent audits.  Effective 1/30/2050.  (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO INDEPENDENT AUDITS OF DEPOSIT BEVERAGE DISTRIBUTORS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that the office of the auditor conducts a financial and program audit of the department of health's deposit beverage container program every other year.  The auditor's 2019 report to the legislature reported accounting exceptions in records provided by six of twenty-four deposit beverage distributors.  One of the recommendations made by the auditor was to increase deposit beverage distributors' accountability for information provided to the deposit beverage container program by requiring deposit beverage distributors to obtain independent audits for years ending in odd numbers.  The auditor's recommendation for deposit beverage distributors to obtain independent audits for years ending in odd numbers was adopted by the legislature in Act 12, Session Laws of Hawaii 2022.

     The legislature further finds that the independent audit requirement caused financial hardship to small businesses.  In some cases, the cost of obtaining an independent audit exceeded the amount of deposits and container fees paid by a distributor to the department of health.

     Therefore, the purpose of this Act is to amend the deposit beverage distributor independent audit requirement to mitigate the financial impact to small businesses.

     SECTION 2.  Chapter 342G, Hawaii Revised Statutes, is amended by adding to part VIII a new section to be appropriately designated and to read as follows:

     "§342G-      Independent audit.  (a)  Deposit beverage distributors who distribute at least seventy-five million deposit beverage containers in a calendar year ending in an even number shall obtain an independent audit for the calendar year after the calendar year ending in an even number.

     (b)  Deposit beverage distributors who distribute at least two million but fewer than seventy-five million deposit beverage containers in a calendar year ending in four or nine shall obtain independent audits for the calendar year after the calendar year ending in four or nine.

     (c)  Deposit beverage distributors who distribute fewer than two million deposit beverage containers in a calendar year shall be exempt from the requirements of this section.

     (d)  At a minimum, each independent audit shall:

     (1)  Assess the accuracy of inventory reports and payments to the department required by section 342G-105;

     (2)  Assess the accuracy of fees collected in sales, transfers, or donations of deposit beverage containers to or from other deposit beverage distributors and dealers;

     (3)  Contain a certification that the independent audit is accurate to the best of the independent auditor's knowledge and ability; and

     (4)  Be submitted to the department by September 30 of the calendar year after the deposit beverage distributor is required to obtain the independent audit."

     SECTION 3.  Section 342G-101, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

     ""Distribute" means to manufacture beverages in deposit beverage containers in this State, or to import and engage in the sale of filled deposit beverage containers to a dealer or consumer."

     SECTION 4.  Section 342G-121.5, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§342G-121.5[]]  Risk-based [selection process;] audit.  (a)  The department shall develop a risk-based process to select, for periodic audit, certain deposit beverage distributor and redemption center reports submitted to the deposit beverage container program.  The department may hire personnel or external consultants to perform the audits.  In developing a risk-based process to audit certain deposit beverage distributor and redemption center reports, the department shall:

     (1)  Consider a variety of risk factors, including but not limited to the amount of money transacted, prior audit findings, and frequency of the deposit beverage distributor's or redemption center's prior audits;

     (2)  Require deposit beverage distributors to send monthly or semi-annual distribution reports and supporting records, such as schedules of invoices, shipping documents, point-of-sale reports, and other documentation as required by the department, to the deposit beverage container program; and

     (3)  Ensure that the audit process includes a risk assessment derived from deposit beverage distributor and redemption center data based on the reports submitted, including but not limited to carrying out analytics and trend analyses to target certain deposit beverage distributors and redemption centers having unusual fluctuations.

     (b)  The department shall:

     (1)  Summarize the results of the deposit beverage distributor and redemption center audits and assess whether enforcement actions should be considered to ensure that the amounts that are being reported are accurate;

     (2)  Consider conducting follow-up audits; and

     (3)  Consider publicly announcing violations.

     (c)  All deposit beverage distributors shall[:

     (1)  Develop] develop and submit to the deposit beverage container program for approval an internal control process to ensure that the monthly or semi-annual distribution report forms contain accurate data and that adequate records are maintained[; and

     (2)  Obtain independent audits for years ending in an odd number]."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

Report Title:

Department of Health; Deposit Beverage Container Program; Independent Audit; Deposit Beverage Distributor

Description:

Limits the independent audit requirement to deposit beverage distributors who distribute 2,000,000 or more deposit beverage containers a year.  Identifies frequency of obtaining and submitting independent audits based on quantities of deposit beverage containers imported, manufactured, or distributed. Creates minimum requirements for independent audits.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 2762

Honolulu, Hawaii

RE:     S.B. No. 3138

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 3138, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO INDEPENDENT AUDITS OF DEPOSIT BEVERAGE DISTRIBUTORS,"

begs leave to report as follows:

     The purpose and intent of this measure is to reduce financial hardships to small businesses participating in the State's Deposit Beverage Container Program.

     Specifically, this measure:

     (1)  Repeals the requirement that every deposit beverage distributor must obtain a biennial independent audit, and instead provides that deposit beverage distributors who distribute:

          (A)  At least seventy-five million deposit beverage containers in a year must obtain an independent audit every two years;

          (B)  At least five million but fewer than seventy-five million beverage deposit containers in a year must obtain an independent audit every five years; and

          (C)  Fewer than five million deposit beverage containers are exempt from the independent audit requirement; and

     (2)  Establishes minimum requirements for independent audits.

     Your Committee received written comments in support of this measure from the Department of Health, Maui Brewing Company, Chamber of Commerce Hawaii, Hawaii Food Industry Association, Down to Earth Organic and Natural, Lanikai Brewing Company, Big Island Brewhaus LLC, Hawaii Liquor Wholesalers Association, and Hanalei Spirits Distillery Corporation.

     Your Committee received written comments on this measure from the Tax Foundation of Hawaii.

     Your Committee finds that current law requires deposit beverage distributors to obtain independent audits for years that end in odd numbers.  Your Committee further finds that this requirement has caused financial hardships for small businesses participating in the Deposit Beverage Container Program.  This measure attempts to mitigate the financial impact on small businesses by eliminating or reducing the frequency of required audits for smaller deposit beverage distributors.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3138, S.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

STAND. COM. REP. NO. 2291

Honolulu, Hawaii

RE:     S.B. No. 3138

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Health and Human Services, to which was referred S.B. No. 3138 entitled:

"A BILL FOR AN ACT RELATING TO INDEPENDENT AUDITS OF DEPOSIT BEVERAGE DISTRIBUTORS,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Limit the independent audit requirement under the State's Deposit Beverage Container Program to deposit beverage distributors who distribute two million or more deposit beverage containers a year;

     (2)  Identify the frequency of obtaining and submitting independent audits based on quantities of deposit beverage containers imported, manufactured, or distributed; and

     (3)  Create minimum requirements for independent audits.

     Your Committee received testimony in support of this measure from the Department of Health, Hawaii Food Industry Association, ABC Stores, Down to Earth Organic & Natural, and Meadow Gold Dairies Hawaii.

     Your Committee received testimony in opposition to this measure from the Hawaii Liquor Wholesalers Association and Reynold's Recycling.

     Your Committee received comments on this measure from the Maui Brewing Co., Tax Foundation of Hawaii, and Lanikai Brewing Company LLC.

     Your Committee finds that existing law requires all deposit beverage container distributors to obtain independent audits every year ending in an odd number.  Your Committee further finds that the independent audit requirement has caused financial hardship to small businesses.  In some cases, the cost of obtaining an independent audit exceeded the amount of deposits and container fees paid by a distributor to the Department of Health.  This measure strikes a balance between holding deposit beverage container distributors accountable through audits and alleviating the financial burden of these audits on the small business community.

Your Committee has amended this measure by:

     (1)  Clarifying that deposit beverage distributors who distribute fewer than five million, rather than two million, deposit beverage containers in a calendar year shall be exempt from the requirement of an independent audit;

     (2)  Inserting language to require the Department of Health to develop a web-based system to allow for online submission by deposit beverage distributors for required reports;

     (3)  Inserting an effective date of January 30, 2050, to encourage further discussion; and

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Health and Human Services that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3138, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3138, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Health and Human Services,