Reinstatement of Superfund Tax Provisions Supported By EPA

The U.S. Environmental Protection Agency (“EPA”) announced today that it has sent a letter to Congress in support of reinstating the lapsed Superfund chemical feedstock taxes. Passed in 1980, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”) established a fund to be used to finance governmental response activities, pay certain claims arising from the response activities of private parties, and to compensate governmental entities for damages caused to natural resources. The money for the Superfund was generated by special taxes 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. The taxes expired in 1995 and, despite several bills introduced to reinstate them, the taxes have never been reauthorized.

If reinstated, the taxes would provide a stable, dedicated source of revenue for the CERCLA program and, according to EPA, increase the pace of Superfund site cleanups. “Since the beginning of this administration we have made it clear that we support the reinstatement of the polluter pays system for the Superfund program,” said Mathy Stanislaus, assistant administrator for EPA’s Office of Solid Waste and Emergency Response. “Our taxes should be paying for teachers, police officers and infrastructure that is essential for sustainable growth — not footing the bill for polluters. Today, we are formalizing our call to Congress to pass this important legislation and ensure responsible steps to keep our communities clean. In the meantime, EPA is taking action to better manage the Superfund program to increase cleanups and enhance transparency, accountability, and community input in agency decision-making.”

Since the expiration of the taxes, the Superfund has been largely financed from General Revenue transfers, thus placing the burden of cleanup costs on taxpayers. EPA is proposing to reinstate the taxes as they were last in effect. Under EPA’s proposal, the taxes would be reinstated for a period of 10 years beginning in January 2011.