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Groups want to revamp Michigan's can, bottle deposit law: What it means

Michigan's 10-cent deposit law on beer, pop and other bottles and cans, enacted in 1976, has been wildly successful in getting those receptacles recycled, though the state still lags in overall recycling. But those involved in making, distributing and collecting those bottles and cans say the law needs revamping.

“Every year, millions of dollars that should be used on expanding and updating recycling infrastructure throughout the state goes into the department of Environment, Great Lakes and Energy’s budget — and it’s not entirely clear how it is spent,” Spencer Nevins, president of the Michigan Beer & Wine Wholesalers Association, said on Wednesday. “If we truly want to protect our Great Lakes, we must reinvest in this outdated program before it collapses under the weight of years of neglect.”

The organizations want a greater portion of the revenues from unredeemed bottle and can deposits to go to recycling programs, beverage distributors and police to help stop deposit fraud. But EGLE officials say doing so would take already insufficient funding away from programs to clean up contaminated sites statewide.

Michigan is typically a bottle and can recycling star, ranking third behind only much more populous California and New York. That's attributable to two key aspects of the state's program: its 10 cents per bottle or can deposit, much higher than most states' nickel or pennies in redemption value, and one of the most simple return systems in the country for consumers, allowing people to take their returnables not to a recycling site but to the stores where they purchased them.

Michigan returned more than 90% of its deposit bottles and cans for recycling every year until 2018, when the number dipped to 89%. Total refunds in Michigan have ranged from $346 million to $425 million per year since 2000, according to the Michigan Department of Treasury.

The state Treasury Department collects unclaimed deposits, known as escheat, with 75% of the money going to the state's Cleanup and Redevelopment Trust Fund and the other 25% returned to retailers. Michigan had a record $42.8 million in escheat in 2018 — and that number could soar this year, as residents for nearly three months were prohibited from returning bottles and cans because of Gov. Gretchen Whitmer's emergency orders in late March related to the COVID-19 pandemic. Redemptions resumed at large supermarkets and retailers with reverse vending machines in mid-June.

More than $80 million in bottles and cans accumulated unreturned in people's closets and garages during the COVID stoppage, and some of those returnables were likely discarded in trash as people ran out of room, industry representatives said.

At an online press conference Wednesday, representatives of Michigan's beer and soft drink wholesalers and manufacturers, as well as bottle and can recyclers and others, called for reworking the 75-25 split between EGLE and retailers, to enable infrastructure upgrades they see as necessary.

The groups support a package of bills introduced in the state House earlier this year, that call for a new split in the distribution of escheat:

The sponsors of those bills — Rep. Jim Lilly, R-Park Township; Rep. Tim Sneller, D-Burton; Rep. John Chirkun, D-Roseville, and Rep. Brandt Iden, R-Oshtemo Township — all count the Michigan Beer and Wine Wholesalers Association as among the leading contributors to their political campaigns and associated political action committees. The association has contributed more than $51,000 to the four lawmakers' campaigns or associated PACs within the past decade, according to the nonprofit Michigan Campaign Finance Network.

Among the desired infrastructure improvements are improved spaces for bottle and can storage, and greater implementation of reverse vending machines, into which a consumer feeds bottles and cans sent to a bin via conveyor belt, and the consumer is then given a redemption slip. Store employees can then roll full bins out to a storage area for pickup by semi-trucks.

“There’s no doubt Michigan’s bottle deposit system works,” said Shayna Schupan-Barry, government affairs director for Schupan and Sons Inc., the state's biggest collector of recycled bottles and cans. “Our state has an 89% recycling rate for containers, which is significantly higher than states that don’t have a bottle deposit system. But if we want this to continue, it’s imperative the state reinvest in Michigan’s bottle deposit law and ensure it is sustainable and successful for decades to come.”

Schupan and Sons has as subsidiaries UBCR LLC, the company that collects, transports and processes empty beverage containers for Michigan’s largest retailers, and TOMRA, the company providing reverse vending machines to take back bottles and cans at larger stores.

An EGLE spokesman on Wednesday said the agency appreciates the efforts of industry partners to combat bottle return fraud and administer the bottle return law. But EGLE opposes the proposal to take unclaimed bottle deposit money away from contaminated site cleanup and redevelopment in Michigan communities.

The annual funding currently supports 130 EGLE staff working on more than 100 contaminated sites across the state, including:

The money also provides matching funds for federal grants related to cleanups and pollution prevention, EGLE spokesman Nick Assendelft said.

"Michigan has approximately 24,000 contaminated sites, and resources to only fully address a small percentage of them," he said. "The loss of unclaimed deposit dollars will further diminish the state’s ability to protect the environment and keep Michiganders healthy."

Despite its success in bottle and can returns, Michigan ranks behind many other states in terms of overall recycling rates. It has the lowest recycling rate among states with bottle deposit laws, according to a 2013 report by Public Sector Consultants, a nonpartisan, Lansing-based consulting firm. One argument is that creating a separate loop for aluminum cans removes them as a relatively lucrative source of funding for overall recycling.

Contact Keith Matheny: 313-222-5021 or [email protected]

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