Sen. McCann floats bottle deposit law expansion, while environmentalists offer alternative

A plastic bottle tossed on a Lansing sidewalk. | Susan J. Demas

In a bid to modernize Michigan’s bottle deposit law, state Sen. Sean McCann (D-Kalamazoo) last week offered a proposal to place an expanded version of the so-called “bottle bill” before Michigan voters in 2026. 

The bottle bill was put forth as a ballot initiative and approved by Michigan voters in 1976. In its effort to reduce littering, the law places a 10-cent deposit on containers for soft drinks, soda water, carbonated natural or mineral water or other non-alcoholic carbonated drinks; beer, ale or other malt drinks as well as mixed-wine and mixed-spirit drinks. Upon returning the container to a retailer, the deposit is returned to the consumer. 

“Michigan’s ‘Bottle Bill’ has been one of the most successful public policy proposals ever enacted in our state and is our most widely used and accepted state conservation program,” McCann said in a statement.

“This unique proposal takes the most popular ideas to modernize our bottle deposit law and places the question before the voters. Our current law was initiated by the voters, and it feels fitting to give them the opportunity to transform recycling yet again in Michigan,” he said. 

The Bottle Deposit Fund, made up of the unclaimed deposits from the bottle bill, would also be restructured to include compliance reimbursement for the state manufacturers, distributors and dealer partners. The unclaimed deposits would also continue to fund environmental cleanups and redevelopment in the state. 

Under the current law, the first $1 million in unclaimed deposits collected each year goes to the Michigan State Police to ensure the bottle bill is enforced until that fund reaches a maximum of $3 million. Then 75% of the following collections goes toward environmental cleanup, redevelopment and education on pollution prevention. The last 25% is returned to retailers.

Under McCann’s proposal, 50% of those unredeemed deposits would be put toward environmental cleanup and redevelopment, while 5% would go to manufacturers, 20% to distributors and 25% to dealers and redemption centers. 

Alongside the proposal laid out in Senate Bill 1112, he introduced another policy, Senate Bill 1113, which would allocate $60 million in corporate income tax revenue to fund implementation and operations of the updated Bottle Bill should voters approve the measure in 2026. 

The effort also received support from the Michigan Beer & Wine Wholesalers Association.

“Michigan’s Bottle Bill has helped protect our environment for decades, thanks in large part to distributors who invest $60 million each year to recycle nearly two billion containers,” Spencer Nevins, president of the Michigan Beer & Wine Wholesalers Association said in a statement.

“Sen. McCann’s legislation is a vital step to ensure the program remains sustainable by providing necessary investment in the Bottle Bill. We’re proud to support this effort to build a stronger, more efficient, and consumer-friendly Bottle Bill system, reinforcing Michigan’s status as a leader in environmental stewardship,” Nevins said. 

However, the Michigan Environmental Council (MEC), a collective of 100 environmental organizations from across the state, says there’s a better way forward. The council argues McCann’s plan would divert a projected $75 million a year away from environmental programs toward businesses already profiting from the beverage industry.

“These are the people’s dimes, not industry profits,” Michigan Environmental Council President and CEO Conan Smith said in a statement. “Those lost funds won’t improve our Bottle Bill. Recycling won’t get easier. Environmental cleanups will get harder.”

With GOP former Gov. John Engler eliminating Michigan’s “polluter pay” program in 1995, the cost of environmental cleanups in the state has largely fallen on taxpayers. While Michigan’s bottle bill serves as the main source of funding for cleanup and remediation of contaminated sites, advocates have repeatedly called for additional funding to address the roughly 26,000 contaminated sites identified by the Department of Environment, Great Lakes and Energy (EGLE).

In an email to the Advance, Beau Brockett, the council’s communications manager, noted there are no requirements for industry stakeholders to use their portions of the unredeemed deposits for upgrades to their infrastructure. 

In turn, the council has offered its own proposal for a revamped bottle bill.

Under this proposal, the state would create a council of stakeholders tasked with overseeing the bottle return system, alongside expanding oversight of the program to the Michigan Department of Attorney General, providing $3 million in addition funding to Michigan State Police and the Office of Attorney General for anti-fraud and enforcement efforts. 

The Council’s proposal also requires EGLE to make data on the program’s performance publicly available and would subject all data and documents related to the bottle bill to the Freedom of Information Act (FOIA). 

While retailers are the only stakeholder at present who benefits from the unclaimed bottle deposits, the council proposes either a 1 cent handling fee on deposited containers, or earmarking a portion of the state’s corporate income tax revenue to ensure all stakeholders are reimbursed for their role in operating the returns system. 

“It would look like $18 [million] to distributors, $24 [million] to retailers, and $3 [million] to manufacturers to reimburse them for their operational costs,” Brockett said. 

While this proposal would remove enforcement funding and retailer reimbursements from the appropriations of the unclaimed deposits, the council says these should be replaced with a separate funding mechanism. 

It would also allocate the first $55 million or 27.5% of these unredeemed dimes, whichever is greater, to maintain support for ongoing environmental cleanup and redevelopment through the Cleanup and Redevelopment Fund, until the state’s Cleanup and Redevelopment Trust Fund reaches a balance of $1 billion. The next $75 million or 37.5%, whichever is greater, will also be put toward the Cleanup and Redevelopment Trust Fund until it reaches a balance of $1 billion. 

Once that $1 billion threshold is reached, interest and earnings from the trust fund will be used to fund the Cleanup and Redevelopment Fund and any revenue from unclaimed deposits will be put toward the resource recovery fund. 

The council’s proposal would also allocate the next $25 million or 12.5% of unclaimed deposits to the state’s Water Security Fund, which supports water affordability programs and is available to community suppliers to reduce water insecurity. Then $3 million or 1.5% would be used to fund reimbursements for nonprofits purchasing bottled water in bulk for distribution to Michigan residents facing water access challenges. 

According to Brockett, the final 21% of the unclaimed deposits would go to the program’s Resource Recovery Fund to build out new infrastructure and technology and upgrade systems. 

“We can have a better Bottle Bill,” Smith said. “We can collect more containers and provide more convenience with less litter and less hassle. We can give the people what they want, and we can do it all without a corporate giveaway.”

While speaking with the Advance on Friday, McCann said he’s been proud to work with Michigan Environmental Council alongside its members and other environmental organizations in the past. 

“I think we all are, you know, pulling in the same direction,” McCann said. 

While lawmakers have looked into a few variations of a funding structure for the bottle bill, it’s hard to find a perfect way of revamping that system, he said. 

“We’re still working on it, and I’m still open to ways to make it better.… I felt it was really important to start the conversation with the bill introduction,” McCann said. 

“We may have room to change and incorporate some things, like I know they feel this water security fund is really important to them, and that’s fine. We’re trying to see if we can make room for that,” McCann said before noting the importance of having the approval of having support from the wholesalers and retailers, as well. 

While there is limited time to pass the bills and place the proposal before voters, there is still plenty of time for the bill to change while moving through committee and both chambers of the Legislature.

“There’s still a long path here, granted in a short period of time. And so, you know, I’m listening to [stakeholders], we’re talking. And I think that I’m cautiously optimistic that we can work out these final few particulars,” McCann said.