EPA Supports Reinstating “Polluter Pays” Provision of CERCLA

On June 21, 2010, the U.S. Environmental Protection Agency sent a letter to Congress in support of reinstating the lapsed Superfund “polluter pays” taxes. Superfund is the common name for the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), a United States federal law designed to clean up sites contaminated with hazardous substances.

 

Advocates of the tax claim it would provide a predictable source of funding and shift the burden of cleanup costs from taxpayers to the parties who benefit from the manufacture or sale of substances that typically cause hazardous waste problems. The Superfund taxes expired on December 31, 1995. Since the expiration of the taxes, Superfund program funding has been largely financed from General Revenue transfers to the Superfund Trust Fund. Congress has appropriated about $1.2 billion a year for hazardous-waste cleanups, but “polluter pays” advocates estimate that $3 billion a year is needed. 

 

The administration is proposing to reinstate the taxes as they were last in effect on crude oil, imported petroleum products, hazardous chemicals, and imported substances that use hazardous chemicals as a feedstock, and on corporate modified alternative minimum taxable income. Under the administration’s proposal, the excise taxes and corporate environmental taxes would be reinstated for a period of 10 years beginning in January 2011. 

 

Critics of the tax counter that, under current law and practice, polluters already clean polluted sites when the federal government identifies the responsible parties. The "polluter pays" tax simply forces law-abiding companies who practice sound environmental practices (and their customers) to assume responsibility for the actions of others. Even in cases where some of the polluters are no longer around to pay for site cleanup, CERCLA authorizes EPA to collect “orphan shares” from those parties who are financially capable of assuming responsibility. Thus, the necessity of such a tax is questionable. Given the current state of the economy and the desire to keep industrial jobs in the U.S., reinstating “polluter pays” at this time may not be advisable. 

This article was authored by Chris M. Hunter, Jackson Kelly PLLC. For more information on the author see here.