Vermont ponders tax break for a polluter
At a time when the state is facing a painful budget shortfall and the governor is proposing to slash funding for everything from children's health care to housing and land conservation, one would think the Legislature would be zealously guarding every penny of tax revenue. Yet the House has just passed a bill exempting "mining waste" from the state's $6 per ton solid waste facility franchise tax. How come? The answer reveals much about the current state of environmental regulation in Vermont.
The principal beneficiary of this exemption is Omya Inc., a Swiss-based multinational corporation that operates a mineral processing facility in Florence, just north of Rutland, producing calcium carbonate used in paper, paints, and plastics. Omya generates over 100,000 tons of waste per year. The waste contains about 600 tons of industrial chemicals. These chemicals include aminoethylethanolamine (AEEA), a toxic substance linked to birth defects. The waste also releases metals such as arsenic, a human carcinogen, into the groundwater. The label "mining waste" is misleading. This is contaminated industrial waste, not rubble from a granite quarry.
Unfortunately, Omya has been operating in violation of Vermont's solid waste laws for decades. Instead of putting its waste in a certified disposal facility Omya simply dumps it into the old quarries and open pits on its property, where it comes into direct contact with the groundwater. The Agency of Natural Resources has yet to take any enforcement action to abate this pollution.
In 2005, Omya got the Legislature to put a temporary moratorium on the requirement to pay the solid waste tax or permit fees. In return, the Legislature required that Omya fund an independent study of the impacts of its waste disposal on groundwater and public health. This study took almost two years and cost Omya $2.5 million. The final report was submitted to the legislature on Feb. 19. It contains both bad news and good news.
The bad news is that the report confirms that groundwater under Omya's site is contaminated with arsenic and AEEA in concentrations that exceed the safe levels for drinking water under state and federal law. The report also found AEEA in a spring located off Omya's property, raising questions about how it got there and where else it might be found if one were inclined to look.
The good news is that AEEA was not detected in any of the drinking water wells that were checked, and the arsenic that was found in wells outside of Omya's boundaries was below regulatory standards. However, as the report makes clear, the fact that no one's well has been contaminated at this point has more to do with pure dumb luck than anything Omya has done to prevent it. The report urges further investigation and close monitoring to ensure that these chemicals do not show up in someone's tap water. This is tricky because AEEA is highly soluble, and its movement through fractured bedrock is hard to trace.
In most states, conduct like this would merit a strong enforcement response with an order to stop dumping and start cleaning up, a stiff penalty, and payment of natural resource damages for contaminating groundwater that is classified as a potential source of drinking water. Nature isn't making aquifers like this anymore and Vermonters should be outraged that a private company would be allowed to ruin one under the nose of the regulators, let alone be rewarded for it by receiving a tax break. Worse, there is presently no assurance that the State of Vermont won't be left holding the bag on the contamination problem should Omya decide to pack up and leave some day.
The hastily passed House bill (H.558) does not even require that Omya assume financial responsibility for the problems documented in the study. The solid waste law requires that operators of waste disposal facilities provide financial assurance in the form of an escrow account or other dedicated source of revenue to insure that the citizens of Vermont do not get stuck with the bill for cleaning up pollution like this. To date, Omya has not provided any such financial assurance.
The "Omya bill" now moves to the Senate, where it should get closer scrutiny. Perhaps some form of tax relief is appropriate for the mining industry, but Omya should not get a free pass. At a minimum, the Senate should insist that Omya establish a fund adequate to ensure that the site is cleaned up and a long-term monitoring program is created to provide security for the public and private drinking water supplies that the company has unlawfully put at risk.
Patrick Parenteau is a professor of law and senior counsel to the Environmental and Natural Resources Law Clinic at Vermont Law School. He formerly served as commissioner of the Vermont Department of Environmental Conservation under Gov. Madeleine Kunin.