international: Recycling The Landfill Tax

Adam D. Read, Paul S. Phillips and Alice Murphey

If you could determine how your tax money was spent, would you? For most folks, the answer is a resounding "Yes!" In the United Kingdom, however, the idea has yet to catch fire.

With the recent implementation of the landfill tax, Her Majesty's (HM) Customs and Excise expects to collect an additional pound450 million this year. Instead of watching the money "disappear" into the treasury though, HM Customs and Excise now offers landfill owners/operators the opportunity to funnel their tax money (as much as pound90 million) into environmental organizations.

These organizations are a "softener" for the industry and are intended to encourage movement up the European Union's waste hierarchy (reduction at the top and disposal at the bottom) by funding new technologies research and public education initiatives highlighting the benefits of reduction, reuse and recovery.

"The waste management industry is being given the opportunity to spend money on environmental improvements that would not otherwise be affordable," according to ENTRUST - the regulatory body created to guide the environmental organizations. "Both the waste industry and the environment will benefit from this innovative initiative."

A unique feature of the landfill tax is that landfill site operators may claim tax credits if they voluntarily contribute to approved environmental organizations that are:

* non-profit;

* from the private sector;

* independently audited;

* accountable to a regulatory body;

* created at a national, regional or local basis; and

* managed by a board of trustees.

Although landfill operators cannot benefit directly from their contributions to environmental trusts, they can claim a rebate of 90 percent from Customs and Excise, up to 20 percent of their total tax payments.

ENTRUST's goal is to enroll 450 environmental organizations within the first year. One important board task will be to ensure that landfill operators' contributions, qualifying for landfill tax credits, are spent on projects such as reclamation, remediation and restoration. This may include the creation of new wildlife habitats and public parks.

Given the possibilities though, the potential benefit of environmental trusts remains obscure to many key individuals working in the public and private sectors. According to a MORI poll, commissioned by U.K.-based Biffa Waste Systems, Britain's larger waste companies have a weak knowledge of the tax and its implications, while local authorities seem slightly more informed.

In fact, 86 percent of the polled companies knew nothing about the tax, while less than half of the polled local authorities acknowledged the role the bodies could play in landfill site remediation. After explanation, however, 70 percent of the private companies thought that the trusts would be fairly or very beneficial.

Optimistic that interest will increase, existing regional and local or-ganizations are setting up their own environmental trusts in the hope of attracting financing from disposal companies. County councils, educational institutions and local consultants also are seeking to initiate trusts and get involved in their operation. As it stands, HM Customs and Excise predicts that more than one-third of all contributions will be made available for research and education.

Despite the registration of 71 environmental bodies shortly after the landfill tax initiation and the tax credit system, however, virtually no money has been donated by landfill operators. Assessing comments made by company representatives, it appears that the disposal companies are unwilling to make the investment because the proposed projects appear to have little local benefit and no benefit (direct or indirect) to the companies themselves.

On the whole, none of the polled companies expected anything relating to environmental organizations to be initiated within the next six months, though many expect some headway within a year. Once the ball gets rolling though, the companies prefer that their money be used for building restoration (36 percent), research and education (35 percent) and land remediation (29 percent).

Amidst the controversy, however, there has been at least one success: Derby-based Business Environment Association (BEAM) is the first body to secure funding (pound1000 from Biffa Waste Systems) which will go towards an pound85,000, 18-month assessment of the impacts on the environment caused by a Heanor Gate, Derby-based industrial estate. In addition, BEAM has proposed six separate projects to ENTRUST, all of which have been approved, requiring a total funding of pound500,000.

Ultimately, if the majority of landfill owners/operators do not take advantage of the tax credits offered, HM Customs and Excise will remove the scheme's voluntary aspects. Disposal companies then will be forced to pay 20 percent of their tax payments into a central fund from which the treasury will distribute monies nationally, removing the plan's local emphasis and benefits. The choice, it seems, is theirs.

Loans The California Integrated Waste Management Board, Sacramento,has approved $2,221,134 in loans to Evergreen Glass, Stockton; MBA Polymers, Richmond; and Vision Recycling, Almeada County.

Merger Kenneth Johnston, president of Remediation Inc. (RI), and Charles Zitnick, CEO of Johnston Construction Co., have announced the merger of the two companies. RI is a chemical hazardous waste cleanup company. Its past work includes ground water and soil treatment facilities and contaminated soil removal. Johnston is a heavy construction contractor specializing in environmental projects such as leachate treatment and gas cogeneration plants. and fuel oil tank removal.

New Facility Allison Transmission announces the opening of its new customer training facility in Indianapolis, Ind. The 13,000-square-foot facility offerscourses on basic maintenance to more in-depth classes that cover hydraulic and electronic controls of the World Transmissions.

Re-Opening Med/Waste Inc., Opa Loca, Fla., has announced that its South Carolina waste incineration facility which suffered fire damage has been granted permission to reopen and resume normal operations by the S.C. Dept. of Health and Environmental Control.