Bill that would fund upgrades to local recycling equipment with unreturned bottles clears House

LANSING, Mich. - Legislation to compensate beverage companies to update their recycling equipment using unreturned recyclables deposit funds passed Tuesday in the Michigan House.

Unredeemed money from the 10-cent per container bottle return is currently divided between the state and retailers operating bottle return locations. The state’s Cleanup and Redevelopment Trust Fund, which mainly funds cleanup efforts for certain contamination sites, gets 75% of the money and 25% is given to the retailers.

The proposed legislation would offer beverage distributors a half-cent per bottle tax credit for every container eligible for the bottle return, a measure that would cost the state $20 million annually, according to the House Fiscal Agency. The legislation would also allow distributors to receive funds from the unredeemed bottle returns if the annual value is greater than $50 million through 2022.

Michigan is one of 10 states with deposits on recyclable cans and bottles.

The state shut down recycling collections for about three months earlier in the pandemic with restrictions on how many cans could be returned in one trip. Lawmakers now expect that many of the containers stacked up in garages and basements around the state will be returned, while others already have been diverted to landfills. Both factors pose issues for beverage companies because they are responsible for collecting the recycled remains.

Bill sponsor Rep. Kevin Hertel testified in the state House Regulatory Reform Committee in March that the fund has never reached $50 million a year, It was $43 million in 2019 and $42.8 million the year before, but with the expected influx of returns, he said it’s only fair that distributors who play an important role in recycling those materials should get financial help to accommodate the state’s needs.

Overall, Michigan needs to update its recycling rules and support recycling efforts, Tom Emmerich, chief operating officer of Schupan & Sons Recycling, told the state House Regulatory Reform Committee last month.

"We need to make significant investments in the current system to keep it going and keep it running as efficiently as possible so that the citizens of Michigan and the retailers who would benefit from the distributors' efforts don’t see a hiccup or any reduction in level of service," Emmerich said.

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It’s common sense to invest in the bottle return system while maintaining investments in cleaning up contaminated sites, said Spencer Nevins, president of the Michigan Beer & Wine Wholesalers Association.

"Our members have spent millions of dollars to purchase large, expensive equipment — which takes up valuable warehouse space — to process returnables, without seeing a dime from the state," Nevins said.

Several environmental groups have expressed opposition to the legislation, including the Michigan League of Conservation Voters. Nick Occhipinti, government affairs director for the Michigan League of Conservation Voters, said in a news release in March that it is irresponsible to strip money away contamination cleanup efforts.

"This legislation effectively is another attack on critical funds for contaminated site cleanup that come from unreturned bottle deposits," Occhipinti said. "We need more money to fight contamination in our drinking water, rivers, streams, lakes, and land, and we urge lawmakers in the House to oppose this misguided legislation."

The Whitmer administration opposes the bills because they take funds away from redevelopment in the state, said Jill Greenberg, spokeswoman for the Michigan Department of Environment, Great Lakes, and Energy. The legislation now goes to the Senate. If approved, it would go to Gov. Gretchen Whitmer before it could become law.