On certification to the Superior Court, Appellate Division, whose opinion is reported at 190 N.J. Super. 131 (1983).
For affirmance -- Justices Clifford, Schreiber, Handler and Pollock, and Judge Fritz. For reversal -- None. The opinion of the Court was delivered by Clifford, J.
In this case we consider one aspect of the staggering problems associated with the release of hazardous substances into our environment. Cleanup and removal efforts have been authorized by the State through the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 to -23.11z (Spill Fund), and by the federal government pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.A. §§ 9601-9657 (Superfund). This appeal focuses on the taxing structures established by each of the foregoing Acts. More specifically, we address the issue of the constitutionality of Spill Fund -- that is, whether the tax imposed by the federal government to create Superfund effectively preempts the tax instituted by the State of New Jersey to establish Spill Fund.
Plaintiffs are five petroleum and chemical companies that are currently paying taxes into both Spill Fund and Superfund. After several unsuccessful attempts to have the federal courts determine the scope of section 114(c) of Superfund, 42 U.S.C.A. § 9614(c) (see Exxon Corp. v. Hunt, 4 N.J. Tax. 294, 299 n. 4 (1982), for a synopsis of those efforts), plaintiffs filed these
consolidated actions challenging the constitutionality of Spill Fund in light of section 114(c) of Superfund.*fn1
The parties filed cross-motions for summary judgment. Plaintiffs argued that the Spill Fund tax was preempted by section 114(c) of Superfund, which reads:
Except as provided in this chapter, no person may be required to contribute to any fund, the purpose of which is to pay compensation for claims for any costs of response or damages or claims which may be compensated under this subchapter. Nothing in this section shall preclude any State from using general revenues for such a fund, or from imposing a tax or fee upon any person or upon any substance in order to finance the purchase or prepositioning of hazardous substance response equipment or other preparations for the response to a release of hazardous substances which affects such State. [42 U.S.C.A. § 9614(c) (emphasis added).]
Plaintiffs maintained that the principal purpose of the state tax was to compensate hazardous-waste sites that might ultimately be compensated by Superfund, thereby contravening the above-emphasized language of section 114(c) of Superfund. Defendants, describing Spill Fund as a constitutionally-valid supplement to Superfund, argued that Spill Fund was aimed at providing compensation for those claims that were not receiving Superfund coverage.
Judge Evers granted defendants' motion for summary judgment in the Tax Court.*fn2 4 N.J. Tax. 294. Relying on the legislative history surrounding the enactment of Superfund, as well as on the scope and purposes of both Superfund and Spill Fund, Judge Evers concluded that the Spill Fund tax was not preempted by Superfund.
The court finds that Congress, through the adoption of [Superfund], has not put an end to the taxing powers of the states for hazardous substance cleanup,
containment and remedial purposes by putting another tax in its place. Rather, the court finds that [Superfund] permits a state to continue to avail itself of industry tax funds with the obvious limitation that a double tax could not be collected and expended on any one project. Such would be the practicalities of government where both state and nation have the same and yet separate, identifiable interests. [ Id. at 320.]
Moreover, Judge Evers alternatively held that even if Spill Fund tax monies could not be collected for general containment and cleanup purposes, "the [S]pill [F]und law nevertheless encompasses many other areas to which such monies could be devoted which are clearly outside the reach of § 114(c) and which may very well be of sufficient magnitude to sustain the [S]pill [F]und tax." Id. at 315. Thus, the court held that "even if § 114(c) of [Superfund] could be construed to preempt part of [S]pill [F]und, the * * * nonpreempted areas*fn3 are more than sufficient to sustain its continued validity." Id. at 320 (footnote added).
On plaintiffs' appeal the Appellate Division affirmed, "substantially for the reasons stated by Judge Evers in his written opinion * * *." 190 N.J. Super. 131, 132-33 (1983).*fn4 We granted
certification, 94 N.J. 607 (1983), to determine whether "the plain language of § 114(c) of Superfund preempt[s] the State of New Jersey from collecting taxes under the taxing provision of the [Spill Fund] as presently enacted", and now affirm.
Spill Fund was enacted in 1977, L.1976, c. 141, with the expressed legislative intent to
exercise the powers of this State to control the transfer and storage of hazardous substances and to provide liability for damage sustained within this State as a result of any discharge of said substances, by requiring the prompt containment and removal of such pollution and substances, and to provide a fund for swift and adequate compensation to resort businesses and other persons damaged by such discharge. [ N.J.S.A. 58:10-23.11a.]
This statute provides for the establishment of "a nonlapsing, revolving fund in the Department of the Treasury to carry out the purposes of this act." N.J.S.A. 58:10-23.11i. The fund's revenues are supplied by a tax "levied upon each owner or operator of one or more major facilities*fn5 * * * to insure compensation for cleanup costs and damages associated with any discharge of hazardous substances * * *." N.J.S.A. 58:10-23.11h(a) (footnote added).
In December 1980 Superfund was enacted in response to escalating national hazardous-waste problems. Congress provided for the establishment of a $1.6 billion fund over a five-year period*fn6 for the cleanup and removal of pollution caused by
the release of hazardous substances into the environment. Superfund imposes a tax to finance the federal fund, taxing chemical industries to acquire 87.5% of the funds necessary for cleanup efforts and relying on general federal revenues to account for the remaining 12.5% of the fund. 126 Cong.Rec. S14967-68 (daily ed. Nov. 24, 1980) (statement of Sen. Stafford).
The focal point of plaintiffs' preemption argument is that language of section 114(c) of Superfund that excludes contribution to any fund whose purpose is to pay compensation for claims "for any costs of response or damages or claims which may be compensated under this subchapter." 42 U.S.C.A. § 9614(c) (emphasis added). Plaintiffs maintain that through this section of Superfund, read in conjunction with Article VI, clause 2 ...