Beverage companies push changes to Michigan’s ‘bottle bill’ amid pandemic

Industry wants to siphon off $ going to environmental cleanup

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Michigan’s “bottle bill” has survived for five decades, but the COVID-19 pandemic has inspired beverage industry companies to lobby for changes in who gets the profits from unredeemed deposits.

The landmark 1976 law is a product of Republican former Gov. William Milliken and Michigan first lady Helen Milliken, who worked to get the initiative on the ballot. It’s considered a key part of the environmental legacy of Michigan’s longest-serving governor, who died last year at 97.

The bill, which establishes a 10-cent deposit for cans and bottles of beverages such as beer and soft drinks, is considered a national model for keeping waste in recycling bins and out of the environment. In 2018, Michiganders recycled their returnables at a rate of 89%. For years before that, rates have been more than 90%. 

The bill has been mostly immune to subsequent attempts to change it. Some Republican lawmakers tried to repeal it in 2018, but that failed amid pushback from environmental groups. 

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But now beverage companies, which have long opposed the law, are renewing efforts to alter it during the COVID-19 pandemic. 

Bottle returns were halted in Michigan in March because of coronavirus. Residents racked up a subsequent $80 million in returnables before the restriction was lifted in June, with some choosing not to return bottles or cans altogether and get deposits redeemed. On top of previous efforts, the beverage industry is now seeking a chunk of those unredeemed deposits.

Michigan retailers currently receive 25% of those unredeemed deposits. The state retains the other 75% and puts them in the state Treasury’s cleanup and redevelopment trust fund. 

But a number of people who manufacture, distribute and collect bottles and cans want to alter those percentiles, saying the bottle law doesn’t require the state Department of Environment, Great Lakes and Energy (EGLE) to put millions of dollars in unclaimed deposits collected each year toward recycling or improving infrastructure. 

It’s “not entirely clear” how EGLE spends that money, said Michigan Beer and Wine Wholesalers Association President Spencer Nevins. 

Derek Bajema, president of the Michigan Soft Drink Association, wants more money to be set aside to investigate bottle fraud, a scheme of bringing in out-of-state bottles and cans and returning them in Michigan to profit off the state’s 10-cent refund law. 

Bottles and cans piled up? You can return them soon.

But an EGLE spokesperson says the trust fund supports 130 staff working on more than 100 contaminated sites in Michigan. 

One such site is the Electro Plating Services (EPS) site in Madison Heights, where green, sludgy contaminants containing hexavalent chromium were found oozing onto I-696 in December.

EGLE spokesperson Jill Greenberg wrote in an email to the Advance that Michigan has approximately 24,000 contaminated sites and resources to only fully address a small percentage of them.

The chunk the state currently gets is distributed in several ways: 80% goes to the Cleanup and Redevelopment Fund, which funds cleanup at contaminated sites, 10% goes to a community fund that emphasizes public education on pollution prevention and another 10% remains in the state treasury’s trust fund. The trust fund collects 10% per year until it reaches a cap of $200 million.

Beverage companies want that divided up differently — some to distributors, some to amp up recycling programs and some to police to combat “bottle fraud” in Michigan

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Several companies put support behind a package of House bills that acts as an update to the bottle bill. The bills were referred earlier this year to the House Regulatory Reform Committee and have since stalled. 

House Bill 5422 is sponsored by state Rep. Jim Lilly (R-Park Twp.), HB 5423 is from state Rep. Brandt Iden (R-Oshtemo), HB 5424 is from state Rep. John Chirkun (D-Roseville) and HB 5425 is from state Rep. Tim Sneller (D-Burton).

In effect, the legislation would re-allocate the following funds from unredeemed bottle deposits with:

  • 50% to EGLE
    • The first $25 million to the Cleanup and Redevelopment Trust Fund
    • The next $5 million to the Renew Michigan fund to support local recycling programs
    • Any amount greater than $30 million to the Cleanup and Redevelopment Trust Fund
  • 25% to retailers
  • 20% to beverage distributors, who are charged with implementing and overseeing the bottle bill
  • 5% to law enforcement to combat deposit fraud

But EGLE and conservation advocates say the legislation would strip money away from efforts to clean up Michigan’s water systems.

“The proposed legislation regarding distribution of bottle return funds would take money away from contaminated site cleanup and redevelopment in Michigan communities,” Greenberg said. “The loss of unclaimed deposit dollars would further diminish the state’s ability to protect the environment and keep Michiganders healthy.”

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The state’s focus on cleaning up contaminated sites, including newly detected areas with per- and polyfluoroalkyl (PFAS) — chemicals that have been linked to cancer — is too important for money to be moved elsewhere, said Nick Occhipinti, a lobbyist with the Michigan League of Conservation Voters (LCV). 

The bottle bill could use updates, he said. But that has to be done from a conservation perspective and probably not during a time when the state budget is in crisis from a global pandemic, he added.

“Just pulling money from the unclaimed bottle returns from the public sector to the private sector is not serious public policy and it’s unfair to the public interest,” Occhipinti said.

Several Democrats have tried for years to expand the law, saying it’s outdated with the explosion of bottled water and energy drinks in recent decades.

In 2019, lawmakers again introduced a bill package to expand the 10-cent deposit to include non-carbonated beverages, excluding milk. However, HB 5306 sponsored by Rep. Jon Hoadley (D-Kalamazoo) and SB 701 from Sen. Sean McCann (D-Kalamazoo) are still sitting in Regulatory Reform committees and no action has been taken. 

“Michigan’s bottle deposit law is one of our great state’s most successful policies,” McCann said last year. “… This legislation would build on that success and lead to even greater participation.”