Article by Oliver A. Houck
In late 1984, Rollins Environmental Services disclosed plans to incinerate up to 2,500 pounds of polychlorinated biphenyls (PCBs) an hour at its facility in Baton Rouge, Louisiana. PCBs are well-publicized carcinogens; they are long-lasting, biocumulative in the food chain, mutagenic in tiny doses, and transmitted to infants through, among other means, the milk of their mothers. Rollins Environmental Services was no ordinary applicant. It had operated hazardous waste facilities in Louisiana for years and was cited for more than one hundred violations of environmental laws. Its plans for similar operations in New Jersey and Texas met with strong local opposition. More unusually, its plan met opposition in Louisiana as well.
The parish of East Baton Rouge passed an ordinance to ban the incineration of PCBs. An estimated 1,500 people appeared at one public hearing in ‘almost unanimous' opposition to a state permit for the Rollins burn. Irate residents in neighboring St. James Parish also protested a proposed storage site for the Rollins waste, leading that parish to seek the assistance of the state's Attorney General. As unusual as this public response may have been in a state not known for its qualms over industrial development, the Rollins matter presented no new perspective on the administration of Louisiana's economic and environmental laws; that is until Rollins's applications for three tax exemptions on its PCB operations, amounting to more than $2.5 million, came to light.
In an almost unprecedented decision, the Louisiana Board of Commerce and Industry, which administers the industrial tax exemption program, voted to defer Rollins's application. While the Secretary of Commerce cushioned the decision with the statement that ‘ w e are not going to make decisions on tax exemptions on the whim or fancy of the public,’ the Governor was less equivocal. A week prior to the Board's decision, he stated that Rollins could ‘forget its attempts to get a tax exemption’ for the incineration. In the heat over the Rollins proposal, the significance of the Board of Commerce and Industry's action and that of the Governor was largely overlooked. It was the first time in fifty years that Louisiana's leading program for industrial growth responded to an environmental concern.
The ten-year industrial tax exemption is the closest thing to a sacred cow in Louisiana. Embodied in the state constitution since before World War II, the program currently exempts up to two billion dollars worth of property per annum from local taxes, at a time when both the state and local governments face severe revenue shortfalls. The first legislative proposal to condition the exemption on compliance with environmental laws, introduced by then-Representative Ben Bagert of New Orleans in 1982, met with strong opposition from industry lobbyists and died quickly in committee. The Louisiana Association of Business and Industry (LABI) made defeat of any similar proposal one of its priorities for the following legislative session. LABI is joined by Louisiana's Department of Commerce, which has insisted that compliance with the state's environmental policies should be left to other, ‘more appropriate’ departments.
This Study questions that conclusion. Part II outlines the ten-year industrial exemption program and its increasingly questionable role in the economic development of the state. Part III surveys the human health aspects of industrial pollution in Louisiana, and the coincidence between environmental law violators and the beneficiaries of the ten-year exemptions. Part IV turns to the merits of conditioning the exemption upon compliance with environmental laws, considering, inter alia, the example provided by federal programs. The final sections review the legislative and the administrative authority to impose these conditions and propose a framework within which this authority should be exercised. Without unduly prejudging the conclusion, this author is convinced that, on the basis of the evidence and authority gathered here, such a conditioning process is not only highly desirable, but is required by law.
About the Author
Oliver A. Houck. Professor of Law, Tulane University School of Law; B.A. 1960, Harvard College; L.L.B. 1967, Georgetown University.
Citation
61 Tul. L. Rev. 289 (1986)