IBWA Regulatory Update—U.S. Focus
The International Bottled Water Association (IBWA) occupies a unique position as an organization representing domestic and international interests of the U.S. bottled water industry. In the U.S. and around the world, the industry is faced with a number of opportunities and challenges that can impact the way bottled water is sourced, produced, sold and marketed.
The IBWA is looking ahead to the many state legislative challenges the bottled water industry will encounter in the coming months. 2006 proved to be one of the busiest legislative sessions in recent years, and 2007 looks to be even more demanding as legislators are certain to revisit key tax and groundwater usage initiatives.
State Bottled Water Taxes
This year, six states—New Hampshire, Maine, Mississippi, West Virginia, Pennsylvania and Texas—considered excise, sales or severance taxes specifically targeting the bottled water industry. These tax initiatives range from bottled water excise taxes to withdrawal fees to removal of bottled water tax exemptions.
New Hampshire will likely reconsider beverage tax legislation that could place an excise tax of $0.02 for containers up to and including 1 gal and $0.05 for containers larger than 1 gal to raise funds for dam and groundwater restoration and other resource projects. In Maine, a severance tax of $0.20 per gal nearly made it before the legislature through an aggressive ballot initiative but failed to get the signatures necessary. Proponents fell only a few hundred votes shy of the signatures necessary to have the measure approved for the ballot. The group is determined to severely curtail the ability of the bottled water industry to operate in the state and is currently working on a new ballot initiative that would remove landowners’ rights to reasonable use of their groundwater.
Legislators in Mississippi and West Virginia considered bottled water excise taxes that, while failing to pass in last year’s legislative sessions, are very likely to return once their legislatures reconvene. The legislatures of Pennsylvania and Texas both considered removing the sales tax exemption for bottled water for property tax relief and school finance fixes. Neither legislature passed a bottled water tax this session; however, the industry’s success in the marketplace has increased its appeal to lawmakers as a means to fund a bevy of programs at the state level. The industry should expect this type of legislation to continue.
Water Usage Limits & Fees
Also during the last legislative season, nine states considered groundwater withdrawal legislation that could have a negative impact on the bottled water industry, especially should they return. Many of the bills specifically targeted the bottled water industry, despite the industry’s infinitesimal use of groundwater (0.020%). While forsaking science and other critical steps necessary to develop long-term, comprehensive groundwater management policies, activists have instead focused on the bottled water industry as a rallying point for their initiatives.
New Hampshire saw two separate bills that would have placed a moratorium on large groundwater withdrawal permits for bottled water. Both bills failed to pass in committee, but only by a close 10 to 13 vote. In addition, New Hampshire Gov. John Lynch signed legislation in June that would codify most of the current practice within the New Hampshire Department of Environmental Services for permitting large quantity withdrawals. The new laws also include “public trust” language, which could be defined in such a way that it would restrict property owners’ rights to the reasonable use of their groundwater. While those measures failed to gather sufficient support to pass, further examination of the public trust doctrine is expected next session.
In Vermont, a bill was passed to include a permit requirement for groundwater withdrawals in excess of 50,000 gpd. Next year, Vermont lawmakers also may look at the public trust doctrine and consider ground-water “diversions.”
In Maine, as mentioned previously, a failed ballot initiative would have placed a $0.20 per gal severance tax on bottled water. This spawned a new initiative that will focus on four central points to groundwater policy: ownership, control, sustainability and citizen equity. The group has indicated that it will pursue public trust, or changing the ownership of groundwater from a private property to common ownership of groundwater for the citizens of Maine.
In Michigan, Gov. Jennifer Granholm signed a bill that establishes a permitting process for new or increased withdrawals of 250,000 gpd for bottling water facilities and defines bottling water in containers of less than 5.5 gal as a “consumptive use” and not a “diversion.”
In Georgia, legislation failed to pass that would have required any person seeking to make an interbasin transfer of more than 100,000 gpd to apply for a regulatory permit. Water users receiving water as the result of the proposed interbasin transfer would have been required to implement water conservation procedures and demonstrate that there were no feasible or practicable cost-effective alternatives to the interbasin transfers. The bill also further defined “consumptive” versus “non- consumptive” users of water.
In Florida, in the waning days of the legislative session, legislation used by the House and Senate as a “catch-all” bill included language that would have required the Florida Department of Environmental Protection to collect a report from each water management district in the state on how much water is being extracted each month for resale in bottled water containers. The language was removed from the bill, but state lawmakers will continue to single out the bottled water industry as the source of their groundwater issues.
In Ohio, legislation was introduced that would ratify the Great Lakes-St. Lawrence River Basin Water Resources Compact (Annex 2001). IBWA supports the inclusion of legislative intent language to help ensure that water used in products, including bottled water, is considered a consumptive use.
On a related note, IBWA is an outspoken advocate of the National Uniformity for Food Act, which provides for a single set of national food safety standards and warning requirements for packaged foods. This will help the bottled water industry—and other food industries—provide consumers with a single set of food safety standards that are developed in cooperation with state policymakers, and that are based on a consensus interpretation of the entire body of scientific evidence. This is the same standard used in other federally regulated areas of food and medicine, including meat, poultry, eggs, nutrition labeling, health claims, pesticide residues, and drugs and medical devices. IBWA is a member of the National Uniformity for Food Coalition.