NEW YORK, NY March 30, 2009 —Under provisions of budget bills aimed at closing the state’s looming deficit, New York’s bottle law will be expanded, and the state will keep most of the nickels. Karen DeWitt has more.

REPORTER: The bill would extend the the five cent deposit now required on beer and soda to bottled water, says NYPIRG's Laura Height.

HEIGHT: In the past seven, eight years, the sales of water bottles have skyrocketed and that's the number one thing that people find when they do litter clean ups. So we're talking over three billion water bottles sold each year in New York.

REPORTER: The bill would also for the first time require that 80 percent of the unclaimed deposits go to the state's Environmental Protection Fund, which was raided by lawmakers earlier this year to help close the deficit.

Opponents including Coca-Cola bottlers are threatening to leave the state. They say thousands of jobs may be lost if the bill becomes law. Environmentalists argue an increased handling fee for stores and redemption centers will actually create more jobs. In Albany, I'm Karen Dewitt.