Legislative Analysis
Phone: (517) 373-8080
BOTTLE LAW REVISIONS http://www.house.mi.gov/hfa
House Bill 5422 (H-1) as reported from committee Analysis available at
Sponsor: Rep. Jim Lilly http://www.legislature.mi.gov
House Bill 5423 (H-5) as reported
Sponsor: Rep. Brandt Iden
House Bill 5424 as reported House Bill 5425 as reported
Sponsor: Rep. John Chirkun Sponsor: Rep. Tim Sneller
1st Committee: Regulatory Reform
2nd Committee: Ways and Means
Complete to 12-6-20
SUMMARY:
Taken together, the bills would do the following:
• Require a distributor to originate a 10-cent deposit on sales to a dealer of
nonrefillable containers of a nonalcoholic beverage and to maintain a record of the
deposits.
• Create enhanced criminal penalties, based on the value of the filled beverage
containers of nonalcoholic beverages, for a distributor who violated the above
provisions with the intent to defraud and cheat.
• Create the Bottle Bill Enforcement Fund; include an allocation to the new fund in
the required distribution of money from the Bottle Deposit Fund; and direct money
designated to the new fund to state and local law enforcement.
House Bill 5422 would add a new section to the beverage container deposit law (the
Initiated Law of 1976) to require a distributor that sells to a dealer a nonrefillable container
that contains a beverage (not including beer, ale, or other malt drink of whatever alcoholic
content, or a mixed wine drink or mixed spirit drink) to originate a 10-cent deposit on that
container at the time of sale to the dealer. In addition, the distributor would have to maintain
a record of that deposit for purposes of the required annual filing under section 3a of the
act. (The annual report pertains to deposits originated and refunds granted on beverage
containers.)
Under the act, a dealer means a person who sells or offers for sale to consumers
within this state a beverage in a beverage container, including an operator of a
vending machine containing a beverage in a beverage container. A distributor
means a person who sells beverages in beverage containers to a dealer within this
state, including a manufacturer who engages in such sales.
Proposed MCL 445.574c
House Fiscal Agency Page 1 of 7
 House Bill 5424 would amend the beverage container deposit law to provide enhanced
criminal penalties for a distributor that, with the intent to defraud or cheat, failed to fulfill
the requirements of HB 5422 (originate a 10-cent deposit on a nonrefillable, nonalcoholic
beverage container and maintain a record of deposits).
Currently, a dealer, distributor, manufacturer, or other person that violates the act is subject
to a fine of not less than $100 or more than $1,000 and is liable for the costs of prosecution;
each day a violation occurs is a separate offense. This penalty would remain unchanged.
Under the bill, a distributor who violated the provisions of HB 5422 with the intent to
defraud and cheat would be subject to the following penalties based on the value of the
filled beverage containers of nonalcoholic beverages purchased in another state:
• For a value of less than $200, a misdemeanor punishable by imprisonment for up
to 93 days or a fine of up to $500 or three times the value, whichever is greater, or
both imprisonment and a fine.
• For either of the following, a misdemeanor punishable by imprisonment for up to
one year or a fine of up to $2,000 or three times the value, whichever is greater, or
both imprisonment and a fine:
o Value of at least $200 but less than $1,000.
o Value of less than $200 and the distributor has one or more prior convictions
for violating the provisions of HB 5422 with the intent to defraud and cheat.
• For either of the following, a felony punishable by imprisonment for up to five
years or a fine of up to $10,000 or three times the value, whichever is greater, or
both imprisonment and a fine:
o Value of at least $1,000 but less than $20,000.
o Value of at least $200 but less than $1,000 and the distributor has one or
more prior convictions (with some exceptions) for violating the provisions
of HB 5422 with the intent to defraud and cheat.
• For either of the following, a felony punishable by imprisonment for up to 15 years
or a fine of up to $15,000 or three times the value, whichever is greater, or both
imprisonment and a fine:
o Value of at least $20,000 but less than $50,000.
o Value of at least $1,000 but less than $20,000 and the distributor has two or
more prior convictions (with some exceptions) for a violation of the
beverage container deposit law.
• For either of the following, a felony punishable by imprisonment for up to 15 years
or a fine of up to $25,000 or three times the value, whichever is greater, or both
imprisonment and a fine:
o Value of at least $50,000 but less than $100,000.
o Value of at least $20,000 but less than $50,000 and the distributor has two
or more prior convictions (with some exceptions) for a violation of the
beverage container deposit law.
• For either of the following, a felony punishable by imprisonment for up to 20 years
or a fine of up to $35,000 or three times the value, whichever is greater, or both
imprisonment and a fine:
o Value of $100,000 or more.
House Fiscal Agency HBs 5422 (H-1), 5423 (H-5), 5424, and 5425 as reported Page 2 of 7
 o Value of at least $50,000 but less than $100,000 and the distributor has two
or more prior convictions (with some exceptions) for a violation of the
beverage container deposit law.
For the purposes of the above penalties, the values of filled beverage containers of the
nonalcoholic beverages purchased in another state in separate incidents pursuant to a
scheme or course of conduct within any 12-month period could be aggregated to determine
the total value involved in a violation.
A prosecuting attorney who intended to seek an enhanced sentence based on the
defendant’s having one or prior convictions would have to include on the complaint and
information a statement listing the prior conviction or convictions. Determination of a
defendant’s prior conviction or convictions would be made by the court, without a jury, at
sentencing or at a separate hearing for that purpose before sentencing. Existence of a prior
conviction could be established by any relevant evidence, including one or more of the
following:
• A copy of the judgment of conviction.
• A transcript of a prior trial, plea-taking, or sentencing.
• Information contained in a presentence report.
• The defendant’s statement.
If a sentence under the bill was enhanced by one or more prior convictions, those prior
convictions could not be used to further enhance the sentence for the conviction under
section 10, 11, or 12 of Chapter IX (Judgment and Sentence) of the Code of Criminal
Procedure, which provides for sentencing enhancement under the habitual offender
provisions.
MCL 445.574
House Bill 5425 would amend the Code of Criminal Procedure to place the felony penalties
contained in HB 5424 for a violation of HB 5422 into the sentencing guidelines portion of
the act. The crime classifications and levels for failure of a distributor, with intent to
defraud, to originate and maintain a record of deposits, based on the value of certain
containers, or a repeat offense, would be as follows:
• Value of $1,000 to $20,000: Class E felony against public order with a maximum
term of imprisonment of 5 years.
• Value of $20,000 to $50,000: Class C felony against public order with a maximum
term of imprisonment of 15 years.
• Value of $50,000 to $100,000: Class C felony against public order with a maximum
term of imprisonment of 15 years.
• Value of more than $100,000: Class B felony against public order with a maximum
term of imprisonment of 20 years.
MCL 777.14h
House Fiscal Agency HBs 5422 (H-1), 5423 (H-5), 5424, and 5425 as reported Page 3 of 7
 House Bill 5423 would amend the beverage container deposit law to reallocate money
from the Bottle Deposit Fund and create the Bottle Bill Enforcement Fund.
The amount paid to the Department of Treasury by underredeemers (manufacturers or
distributors who collect more deposits than paid out refunds for returned containers) is
currently designated for disbursement as follows: 75% to the Cleanup and Redevelopment
Trust Fund and 25% to dealers based on the number of empty returnable containers handled
by a dealer.
Under the bill, money from the Bottle Deposit Fund would be disbursed as follows:
• 75% to be disbursed as follows:
o The first $1.0 million to the Bottle Bill Enforcement Fund for disbursement
to the Department of State Police (MSP) and county and local law
enforcement agencies for use in enforcing the act and investigating
violations. MSP and county and local law enforcement agencies could apply
for disbursements from the fund, and the Department of Treasury would
have to disburse the funds in a manner determined by the Department of
Treasury.
o Any amount greater than $1.0 million to the Cleanup and Redevelopment
Trust Fund.
• 25% to dealers [this is the current disbursement to dealers].
The bill would create the Bottle Bill Enforcement Fund in the Department of Treasury as
a revolving fund administered by the department. Money deposited in the fund would not
revert to the general fund. Disbursements from the fund would have to be used as described
above.
MCL 445.573c
Effectiveness provisions
House Bills 5422 and 5425 are both tie-barred to HB 5424. House Bill 5423 is tie-barred
to HB 5422. House Bill 5424 is tie-barred to HB 5423. A bill cannot become law unless
each bill to which it is tie-barred is also enacted into law.
Each bill would take effect 90 days after its enactment.
FISCAL INFORMATION:
House Bill 5422 would have no fiscal impact on state or local government.
House Bill 5423 would increase administrative costs for the Department of Treasury by an
indeterminate, but likely negligible, amount. It is estimated that the department would be
able to absorb any marginal costs under current appropriation levels.
The bill would have a significant fiscal impact on the Department of State Police (MSP)
and on county and local law enforcement agencies, by offering an additional revenue
House Fiscal Agency HBs 5422 (H-1), 5423 (H-5), 5424, and 5425 as reported Page 4 of 7
 source for such entities. The bill would allocate the first $1.0 million of the revenue from
unclaimed bottle deposits for the Bottle Bill Enforcement Fund. This funding would
present a new revenue source for the MSP and other law enforcement agencies. Since the
bill specifies that disbursements from the fund would be made after application, a potential
distribution allocation is presently indeterminate.
House Bill 5423 would reduce revenue for the Department of Environment, Great Lakes,
and Energy. Under current law EGLE receives 75% of revenue from unclaimed bottle
deposits in the Cleanup and Redevelopment Trust Fund and dealers receive the remaining
25% of revenue. The department distributes its share of revenue for non-petroleum
remediation and redevelopment activities and for the growth of the trust fund.
Under the bill the department would receive 75% of unclaimed bottle deposits minus the
aforementioned first $1.0 million deposited to the Bottle Bill Enforcement Fund. The
department’s share would continue to be to be credited to the Cleanup and Redevelopment
Trust Fund. The remaining revenue would continue to be distributed to dealers (25%).
Below is a comparison of current law and the bill.
Current law:
Unclaimed bottle deposit revenue
Cleanup & Redevelopment Dealers (25%)
Trust Fund (75%)
HB 5423 (H-5):
Unclaimed bottle deposit revenue
Cleanup & Redevelopment Dealers (25%)
Trust Fund (75%) minus
first $1.0 million to Bottle
Bill Enforcement Fund
The bill is unlikely to affect costs for EGLE; however, the bill would reduce revenues
funding the costs.
The bill would have no fiscal impact on local governments.
House Fiscal Agency HBs 5422 (H-1), 5423 (H-5), 5424, and 5425 as reported Page 5 of 7
 House Bill 5424 would have an indeterminate fiscal impact on the state and on local units
of government. The number of convictions that would result under the various provisions
of the bill is not known. Violations could be either misdemeanors or felonies, depending
on the circumstances. New misdemeanor convictions would increase costs related to
county jails and/or local misdemeanor probation supervision. Costs of local incarceration
in county jails and local misdemeanor probation supervision, and how those costs are
financed, vary by jurisdiction. New felony convictions would result in increased costs
related to state prisons and state probation supervision. In fiscal year 2019, the average cost
of prison incarceration in a state facility was roughly $39,400 per prisoner, a figure that
includes various fixed administrative and operational costs. State costs for parole and
felony probation supervision averaged about $3,800 per supervised offender in the same
year. Those costs are financed with state general fund/general purpose revenue. The fiscal
impact on local court systems would depend on how provisions of the bill affected
caseloads and related administrative costs. Increased costs could be offset, to some degree,
depending on the amount of additional court-imposed fee revenue generated. Any increase
in penal fine revenue would increase funding for public and county law libraries, which are
the constitutionally designated recipients of those revenues.
House Bill 5425 is a companion bill to HB 5424 and amends sentencing guidelines. The
bill would not have a direct fiscal impact on the state or on local units of government.
POSITIONS:
Representatives of the following entities testified in support of the bills:
• Midwest Independent Retailers Association (2-4-20)
• Michigan Soft Drink Association (3-4-20, and indicated support 12-2-20)
• Michigan Beer and Wine Wholesalers (3-4-20)
A representative of the Michigan Environmental Council testified in support of HB 5423.
(12-2-20)
The following entities indicated support for the bills:
• Michigan Chamber of Commerce (3-4-20)
• Michigan Licensed Beverage Association (2-4-20)
• Michigan Manufacturers Association (2-4-20)
• Police Officers Association of Michigan (2-4-20)
• Schupan and Sons (3-4-20)
• UBCR, LLC (3-4-20)
• Michigan Retailers Association (support “with amendment”) (2-4-20)
The Michigan Sheriffs Association indicated support for HBs 5422 to 5424 “in concept.”
(2-4-20)
The Michigan United Conservation Clubs indicated support for HBs 5422, 5424, and 5425.
(3-4-20)
The Teamsters indicated support for HB 5425 (2-4-20) and for HBs 5423 and 5424 (3-4-20).
House Fiscal Agency HBs 5422 (H-1), 5423 (H-5), 5424, and 5425 as reported Page 6 of 7
 Representatives of the Department of Treasury testified to a neutral position, with concerns,
on the bills. (2-4-20)
The Michigan Recycling Coalition indicated a neutral position on the bills. (2-4-20)
Representatives of the Department of Environment, Great Lakes, and Energy testified to a
neutral position, with concerns, on the bills (2-4-20) and testified in opposition to HB 5423 as
introduced (3-4-20).
A representative of the Michigan Municipal League testified in opposition to the bills.
(3-4-20)
Representatives of the Michigan League of Conservation Voters testified in opposition to HB
5423. (2-4-20)
The following entities indicated opposition to HB 5423 (3-4-20):
• Sierra Club