West Sites Update: Defeat of LD 7, A Bill to Equalize Premiums on Motor Vehicle Oil

By Virginia Putnam and Phillip Buckley

A bill that would have impacted the revenue generated by the Waste Oil Disposal Site Program to fund cleanup of the contaminated West Sites was introduced this session and defeated.

In June 2011, Rudman Winchell reported on the resolution of the George West Environmental Sites in Plymouth, Ellsworth, Casco, and Presque Isle after Governor LePage signed into law LD 1434, An Act to Streamline the Waste Oil Disposal Site Program. LD 1434 resulted in a mechanism to fund the cost of cleanup of these various environmental sites in Maine. The law cancelled all loans taken out by the PRPs (Potentially Responsible Parties ) at the Plymouth West Site which is the most complicated and expensive site in the State. It paid back the out of pocket costs that the PRPs had incurred at the site over a period of many years.

Under the Waste Oil Disposal Site Program, a premium is imposed on the sale of waste motor oil sold in the State. The premium structure was negotiated and carefully calculated by members of the stakeholder group convened by the Maine State Legislature to ensure sufficient revenue. The premiums are paid monthly to the state tax assessor and those funds are transferred to the Finance Authority of Maine. The DEP is in the process of being reimbursed for costs it incurred for the Ellsworth, Casco and Presque Isle sites. The PRPs at these sites will be released from liability after the DEP receives $3,500,000.00 from FAME.

During this legislative session, Representative Harvell introduced LD 7, A Bill to Equalize the Premiums Imposed on the Sale of Motor Vehicle Oil. Under this bill, all motor vehicle oil would be taxed at 35 cents per gallon. A hearing on LD 7 was held before the Joint Committee on the Environment and Natural Resources on February 14, 2013. Representatives from FAME, DEP, the Maine Automobile Dealers’ Association and Pine State Trading testified against this bill.

A FAME representative testified that the changes proposed under this bill would adversely impact one half of the revenue collected monthly. This would impact the amount of revenue collected annually and transferred to the DEP. Following a work session on February 21, 2013, the committee voted 9 to 2 ought not to pass. The Majority Ought Not to Pass Report was accepted by the House and Senate in April 10 and 23, respectively.