By MICHAEL VIRTANEN
Associated Press

ALBANY - Mandatory deposits on water bottles are expected to start this fall in New York, while the Paterson administration considers changes that would extend them to other beverages, including sugared water, iced tea and sports drinks.

"It's something we're seriously considering," said Judith Enck, chief environmental adviser to Gov. David Paterson, with backing from at least one major bottling company. Another possible addition to the law would make deposit bottles redeemable at all stores, not just those that sell a particular brand, which would make returns easier, she said.

The exception for water containing sugar has drawn sharp criticism, especially because Paterson's public-policy goals include battling obesity. Robert F. Kennedy Jr., prosecuting attorney for the Riverkeeper organization, who has his own water-bottling company, called the measure "an ugly sausage cooked up by lobbyists" that gives sugary drink producers an unfair competitive advantage.

The required nickel deposit plus the handling fee will raise retail prices more than $2 for a 24-pack of water, including grocery generic brands, said James Rogers, president of the Food Industry Alliance of New York State.

"That's where people will see the biggest difference," he said.

With nearly 2.5 billion bottles sold annually in the state, environmentalists mainly want to see the water-bottle deposits established. They're worried that tinkering, and business lobbying against deposits, could undermine their major legislative victory from April.

A federal injunction blocked the law this summer, though U.S. District Judge Hon. Deborah Batts is expected to lift it after a hearing Oct. 22. She warned water bottlers that they would need to show her why she shouldn't life the injunction.

"Water is about 25 percent of the overall beverage market," said Laura Haight, senior environmental associate for the New York Public Interest Research Group, adding that improvements could come later. "With the expansion, we're capturing about 90 percent of the beverages we believe should have deposits on them."

Earlier state laws required deposits on soda and other carbonated beverages, beer, and wine coolers, with a study showing they raised aluminum can recycling from less than 20 percent to more than 80 percent.

Eleven states have at least some mandatory bottle deposits, and legislation has been introduced in Congress, according to the Bottle Bill Resource Guide. Connecticut's water-bottle deposits take effect Oct. 1. In New York, exempt beverages includes milk, juice, wine and liquor.

Brian Flaherty, director of public affairs for Nestle Waters North America, a plaintiff in the federal lawsuit, said his organization is not challenging the deposits but needs time to set up new systems for labels, accounting and collecting returned bottles. He didn't know whether the group would ask the judge for an extension beyond Oct. 22. Its dozen brands include Poland Spring.

"We're doing everything we can to be ready," Flaherty said, adding they back expansion to other drinks. "There is absolutely no environmental basis to draw the line between different types of water, and frankly there is no basis to draw the line in putting water in but not sports drinks, not teas and other things."

Enck estimated sugared waters now comprise about 2 percent of the bottled water market. Their exemption resulted from a compromise with lawmakers and concerns that downstate stores had limited space and didn't want sugary bottle residues attracting vermin, though they already take soda and beer bottles, she said.

"Contrary to what Robert Kennedy said about the Legislature being in the thralls of sugar lobby, that's not how that decision came down," Haight said. It was done in closed-door budget negotiations, a deal that apparently surprised business opponents who weren't even talking about details, she said.

Batts in August permitted two key provisions of New York's new law to take effect, raising the handling fee from 2 cents to 3.5 cents per bottle for redemption centers and stores that take returns, and allowing the state to collect 80 percent of unclaimed deposits. New York officials recently issued rules with financial provisions retroactive to June 1, when the law was scheduled to take effect.

Hon. Thomas Griesa and Batts blocked another provision, requiring New York-specific codes on bottles, finding it a violation of the U.S. Constitution's commerce clause.