March 11, 2010

Poland Spring feels the heat in AugustaState House: Hearings focus on water tax, corporate rights


— By . KIM

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Gregory Rec/Staff Photographer... Jen Wescott places labels in a labeling machine at the Poland Spring bottling plant in Hollis on Monday, May 4, 2009. The Hollis plant employees 400 people.

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Gregory Rec/Staff Photographer... A Wal-Mart truck passes by the Poland Spring bottling plant in Hollis on Monday, May 4, 2009.

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Staff Writer

The state Legislature is the focus of the battle over bottled water this week.

Poland Spring is fighting proposals ranging from a tax on bottled water to a bill that would let communities deny corporations their constitutional rights.

The proposals come as the water bottler contends with the recession, growing public distaste over plastic bottles and opposition to the company's activities in a number of Maine communities.

The Legislature's Taxation Committee will hold a public hearing today on a proposed penny-a-gallon tax on containers of five gallons or less. Half of the revenue would offset other taxes, 25 percent would go to watershed and water-quality protection, and 25 percent would go to the community where the water is extracted.

The tax is the most problematic of the proposals before the Legislature, said Mark Dubois, natural resource manager for Poland Spring. He said the tax would cost the company $7 million a year, 20 percent of its annual payroll.

''It simply puts Maine jobs at risk,'' Dubois said.

Poland Spring, a subsidiary of Nestle Waters North America, is the third-leading brand of bottled water in the country, behind PepsiCo's Aquafina and Coca-Cola's Dasani. The company employs 800 people in Maine.

The tax bill's sponsor, Rep. Jon Hinck, D-Portland, said the tax is ''absolutely not'' meant as a disincentive to bottle water in Maine. ''We don't want to hurt the golden goose. We don't want to hurt the company competitively,'' Hinck said.

He said raising revenue from a natural resource is a good alternative to reliance on sales and income taxes.

Steve Clarkin, a consultant to the Maine State Chamber, said the tax would have implications beyond Poland Spring. A few smaller water bottlers also would be affected, as would scores of suppliers and vendors that do business with the companies, Clarkin said.

He criticized the rationale for the tax, saying that other renewable resources, such as trees cut by loggers or surface water used by microbreweries, are not taxed.

''Why single out this sort of natural resource extraction for unique treatment? It just doesn't make sense,'' Clarkin said.

The Legislature's Natural Resources Committee will hold hearings today on other bills related to groundwater extraction. They include a proposal for a panel to study extraction's implications, and two bills to give groundwater the same status as surface water, which is considered part of the public trust.

On Wednesday, the State and Local Government Committee will consider a bill that would let cities and towns deny corporations constitutional rights.

The measure is related to water-extraction ordinances promoted by activists in several communities. The local ordinances would say that corporations doing business in the community do not have the protections found in the federal and state constitutions.

Residents of Newfield and Shapleigh have approved such measures in recent months. Selectmen in Wells voted against putting a measure on the ballot, but a petition drive gathered enough signatures to force a special town meeting on May 16.

''We're trying to protect our own aquifer here in southern Maine because we don't want to get in bed with Nestle. And we want the right as local people to protect our local resources,'' said Cynthia Howard of Biddeford, a member of Save Our Water.

Save Our Water fought a proposed 30-year contract between Poland Spring and the Kennebunk, Kennebunkport and Wells Water District. The company would have been able to draw as much as 250,000 gallons daily from Branch Brook in Wells. The district uses about 7 million gallons a day during peak periods. District trustees tabled the plan last summer.

Former Rep. Rick Burns, D-Berwick, who originally drafted the corporation bill, said the measure was inspired only in part by residents who were worried about a multinational corporation seeking water in their community. The larger issue, he said, is that corporations have gained protections meant for people.

''This is a bill that welcomes any business that wants to come into any municipality in the state of Maine,'' he said.

''It lays out the groundwork that the first order of business is respect for the community you come into.''

The state Attorney General's Office believes the bill is unconstitutional, said Kate Simmons, an office spokeswoman.

Chris Jackson, a lobbyist for the Maine State Chamber, characterized the bill as one of the most anti-business pieces of legislation he's seen in some time.

''Even if the bill doesn't pass, it still sends the wrong message to the business community when they see it show up,'' he said. ''It also sends the wrong message to businesses outside of Maine that may be thinking of coming to Maine at some point.''

Staff Writer Ann S. Kim can be contacted at 791-6383 or at:

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Additional Photos

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Gregory Rec/Staff Photographer... A case of Poland Spring water comes out of a conveyor belt on a packaging machine at the company's bottling plant in Hollis on Monday, May 4, 2009.


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