The purpose of this Technical Information Release is to clarify that bottlers and distributors who were subject to the provisions of G.L. c. 94, § 323(c), (d) or (e) before and after January 1, 1990, may withdraw certain sums from their Deposit Transaction Funds in accordance with the Supreme Judicial Court's decision in Massachusetts Wholesalers of Malt Beverages, Inc. v. Commonwealth, 414 Mass. 411, 420 (1993) (hereinafter "Mass. Wholesalers II).

In 1989, the Legislature amended G.L. c. 94, §§ 321-327 (the so-called "bottle bill") by St. 1989, c. 653, §§ 68-72, 235-237 (the "amendments"), adding a number of sections to the bottle bill. Specifically, the amendments required bottlers and distributors to maintain, as of January 1, 1990, a "separate account to be known as the Deposit Transaction Fund ... [and to place] ... in said fund the refund value for all non-reusable beverage containers it sells ...." G.L. c. 94, § 323(h). In addition, such bottlers and distributors were required to turn over to the Commissioner of Revenue all "abandoned deposit amounts." See also 830 CMR 94.323.1(5).

The amendments required bottlers and distributors to place into their respective Funds as of January 1, 1990, an amount equal to the refund values for beverage containers sold during the last three months of 1989 (hereinafter the "retroactive funding provisions"). St. 1989, c. 653, § 237; see also 830 CMR 94.323.1(3). Under certain circumstances, the amendments permitted bottlers and distributors to gradually fund their Deposit Transaction Funds. St. 1989, c. 653, § 237; see also 830 CMR 94.323.1(7). The Legislature's intent in enacting the retroactive funding provisions was to have abandoned deposit amounts escheat to the Commonwealth immediately after the enactment of the amendments. See Mass. Wholesalers II, 414 Mass. at 420.

In Mass. Wholesalers II, the Supreme Judicial Court held that the retroactive funding provisions contained in St. 1989, c. 653, § 237, effected a taking of certain amounts deposited into the Deposit Transaction Funds. The Court went on to hold, however, that the retroactive funding provisions were severable from the remaining amendments. Id. at 419-20.

Under the Court's decision, bottlers and distributors were to begin depositing refund value amounts into their respective Deposit Transaction Funds as of January 1, 1990. Id. at 419. Instead of abandoned deposit amounts escheating to the Commonwealth as of January, 1990, such amounts begin escheating to the Commonwealth three months later. Id. Applying the amendments in this fashion, bottlers and distributors are only required to have an amount in their Deposit Transaction Funds equal to the unclaimed refund values for the most recent three month period. See id.

As a result of the Court's decision in Mass. Wholesalers II, bottlers and distributors who fully funded their Deposit Transaction Funds as of January 1, 1990, may withdraw from their Funds an amount equal to the refund values received for October, November and December 1989, less the abandoned deposit amounts for January, February and March 1990; provided, however, the remaining Deposit Transaction Fund balance equals at least the unclaimed refund values for the most recent three month period (December 1993, January and February 1994). Bottlers and distributors who partially funded their Deposit Transaction Funds based upon refund values received in October, November and December of 1989, may withdraw from their Funds an amount equal to the sum of their partial payments, less the abandoned deposit amounts for January, February and March 1990; provided, however, the remaining Deposit Transaction Fund balance equals at least the unclaimed refund values for the most recent three month period (December 1993, January and February 1994).

/s/Mitchell Adams
Mitchell Adams
Commissioner of Revenue

March 4, 1994

TIR 94-4