US seeks new Superfund tax on oil, chemical industries

21 June 2010 21:43  [Source: ICIS news]

Chems could be taxedWASHINGTON (ICIS news)--The Obama administration on Monday formally asked Congress to revive a special environmental tax on oil and petrochemical producers and importers, but industry leaders quickly challenged the revenue bid as short-sighted.

The Environmental Protection Agency (EPA) sent a letter to Congress urging federal legislators to approve pending legislation that would reinstate the so-called Superfund tax to provide additional cash for clean-up work at contaminated sites across the country.

The Superfund law - the colloquial name for the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980 - was established to enforce contamination clean-up and remediation at waste dumps and other sites, with the costs borne by those most responsible for the pollution - or by taxpayers in instances where direct responsibility could not be established.

A special corporate tax was established to generate additional revenue for the main taxpayer-sourced Superfund, but that so-called Superfund tax was allowed to expire after 15 years at the end of 1995.

Legislation introduced earlier this year in both the US Senate and House would revive the Superfund tax beginning in January 2011 and continue for six or seven years.

In its formal appeal on Monday for Congress to revive the Superfund tax, the EPA said it should be re-instated for a 10-year period.

The agency said a revived Superfund tax - targeting oil and petrochemical producers and those who import products that use hazardous materials as feedstock - was necessary “to ensure that parties who benefit from the manufacture or sale of substances that commonly cause environmental problems at hazardous waste sites, and not taxpayers, help bear the cost of cleanup when responsible parties cannot be identified”.

But American Chemistry Council (ACC) president Cal Dooley said the EPA’s call for a new Superfund tax was short-sighted, would harm the nation’s economy and was unwarranted.

“The fact is, since the taxes expired in 1995, responsible parties have continued paying for the cleanup of Superfund sites and continue to reimburse EPA for all of its cleanup costs,” Dooley said.

America’s chemical makers and others targeted by the Superfund tax have paid for site remediation several times over,” he said, adding: “We paid for sites for which we were responsible, we helped pay for ‘orphan’ sites where we were not the responsible party, and we paid corporate taxes such as the Corporate Environmental Income Tax.”

“It would be inappropriate and unfair to impose Superfund taxes on companies with no responsibility for site contamination,” Dooley said.

He argued that a new Superfund tax “will simply give our foreign competitors, who don’t pay the tax, yet another advantage”.

“We’ll see the loss of US market share, the importation of finished products, the loss of American jobs and even the tax revenue Congress was seeking in the first place,” Dooley added.

The council also contends that the country’s environment would not necessarily benefit from additional revenues raised by a new Superfund tax because there had been no historical correlation between remediation taxes and actual work done on contaminated sites.

The EPA’s call for a new Superfund tax likely would be discussed at Tuesday’s Senate hearing on the agency’s supervision and management of site cleanups.

Hill sources said that the Gulf oil spill might provide some additional momentum for those who want to revive the tax. 

In addition, Congress is under increasing public pressure over the mounting US budget deficits and national debt, so members of Congress are desperate to find some additional sources of tax revenue that would not anger consumers at large.

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