ALBANY -- Return deposits on water bottles sold in New York will be collected starting June 1 under a new law signed by Gov. David Paterson.

The measure passed as part of the new state budget expands five cent deposits beyond carbonated beverages, wine coolers and beer. Iced tea and fruit drinks remain exempt. Starting April 15, the state will begin collecting 80 percent of unclaimed deposits, a move expected to generate more than $100 million this year.

Environmentalists say deposits will promote more recycling of the 3.2 billion water bottles sold annually in New York. The law raises the handling fee paid to retailers and redemption centers from 2 to 3.5 cents per container.

Bottlers who currently keep unclaimed deposits say prices will rise.