July 20, 2019
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Tax for bottled water companies faces struggle in Maine Legislature

| BDN
| BDN
Victoria P. Kornfield

AUGUSTA, Maine — Western Maine lawmakers are rallying against a bill that seeks to tax companies that bottle water when they extract more than 1 million gallons a year from a groundwater aquifer.

The bill, LD 16, sponsored by state Rep. Victoria Kornfield, D-Bangor, which would apply a penny-per-gallon tax on companies that bottle water in containers smaller than five gallons, directs the money collected from the tax back to a variety of sources, including the local towns that host a bottling plant.

The bill was aired before the Legislature’s Taxation Committee on Monday, but faces further scrutiny from that panel in the days ahead.

“It is becoming increasingly clear that worldwide, the demand for fresh water grows by the day,” Kornfield said in her prepared statements on the bill.

Lawmakers, both Democrats and Republicans, who are opposed to the measure say it’s worded to impact just one company: Poland Spring, which is owned by Switzerland-based Nestle. The company has bottling plants in Poland, Kingfield and Hollis.

State Sen. Tom Saviello, R-Wilton, said the bill attacks a company that provides higher-paying jobs and produces a commodity using a renewable resource. Saviello’s senate district includes the Poland Spring bottle facility in Kingfield, which employs about 70 workers.

He said the state has never taxed renewable resources, and it shouldn’t start now.

“We do not tax any other renewable natural resource,” Saviello said. “If we tax the extraction of water, we should tax the cutting of trees to be used for lumber, the harvest of lobsters, the use of water for any commercial purpose.”

Saviello also said the bill is counter to Maine law, which gives water rights to the owner of the land the water is on. He said long-standing case law in Maine supports the landowner’s right to access water as their own, and it’s not a resource the state should start taxing.

“More importantly for me is, this is a manufacturing facility that uses a renewable natural resource in a rural area where we don’t have good-paying jobs,” Saviello said. “This provides good-paying jobs, it involves companies that are involved and supportive of their communities.”

Saviello said all but two of the jobs first hired at the Kingfield plant went to local people. “And the other two were people from southern Maine,” he said.

But Kornfield argues the measure isn’t about whether Poland Spring, or its parent company, Nestle, is a “good or a bad” company.

“This is not even about whether people should drink bottled water or what happens to the plastic bottles after they finish drinking,” Kornfield said.

She said the measure was about acknowledging that the “intrinsic value of water is greater than its commercial value and that we, in the state of Maine, have been naive about giving away a precious resource at a tiny price, when people all over the state could and should benefit from a tax on this resource.”

Kornfield’s bill would direct 50 percent of the money raised from the tax to K-12 public schools, 25 percent to the state’s environmental cleanup fund and 25 percent to the municipality where the water is extracted.

Other bills offered in 2009 and 2011 that sought to enact similar taxes were defeated by the Legislature.

State Sen. Linda Valentino, D-Saco, also offered testimony in opposition to the bill. Valentino’s district includes Poland Spring’s bottling facility in Hollis, she said.

She said that in 2014 alone, Poland Spring donated more than $550,000 to important causes and charitable organizations around the state. She also noted the company employs hundreds of Maine workers in an non-polluting industry that brings millions of dollars into the state’s economy.

“We should be thankful to have companies such as Poland Spring,” Valentino said. “We should not penalize them.”

The Taxation Committee will hold a work session on the measure in the days ahead and will vote making a recommendation to the full Legislature on whether the bill should be passed into law or rejected.

 



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