On remand from the Supreme Court of the United States, whose opinion is reported at 475 U.S. ,
For modification and remandment -- Justices Stein, Clifford, Handler and Pollock and Judges Pressler and King. Opposed -- none. The opinion of the Court was delivered by Stein, J.
This case is before us for the second time. Initially, we affirmed the judgment of the Appellate Division upholding the Tax Court's determination that the tax imposed by the New Jersey Spill Compensation and Control Act, L. 1976, c. 141 (codified as amended at N.J.S.A. 58:10-23.11 to -23.24, -23.34) (Spill Act), was not pre-empted by the federal government's adoption of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, Pub.L. No. 96-510, 94 Stat. 2767 (codified as amended at 42 U.S.C.A. §§ 9601-9675) (CERCLA). Exxon Corp. v. Hunt, 97 N.J. 526 (1984).
The United States Supreme Court, affirming in part and reversing in part, concluded that the tax levied by the Spill Act was imposed for certain purposes that were pre-empted by CERCLA, as well as for other purposes not pre-empted by CERCLA. Exxon Corp. v. Hunt, 475 U.S. 355, 106 S. Ct. 1103, 89 L. Ed. 2d 364 (1986). Accordingly, the Supreme Court remanded the matter to this Court to determine "the state law question whether, or to what extent, the non pre-empted provisions of the statute are severable from the pre-empted provisions," id. at 376, 106 S. Ct. at 1116, 89 L. Ed. 2d at 382, "and for further proceedings not inconsistent with this opinion." Id. at 377, 106 S. Ct. at 1117, 89 L. Ed. 2d at 383.
We then remanded the matter to the Tax Court to develop a record and to make recommended findings, otherwise retaining jurisdiction. N.J. (1986). Pursuant to our order, the Tax Court has submitted the following recommended findings:
1. The decision of the United States Supreme Court should not be applied prospectively but should be retroactive to July 16, 1982 with respect to expenditures made on preempted removal purposes and to September 8, 1983 as to preempted remedial expenses.
2. The non-preempted purposes of the Spill Act are severable from the purposes found to be preempted by the United States Supreme Court.
3. Plaintiffs' claims for refunds should not be defeated by reason of their failure to comply with the procedural requirements of N.J.S.A. 54:49-14.
4. Following an accounting, (and plenary hearing if necessary) to determine the amount of monies paid for material purchased and services rendered for
preempted removal purposes on or after July 16, 1982 and for preempted remedial purposes on or after September 8, 1983 to March 10, 1986, (date of the United States Supreme Court decision), the Legislature should be permitted a reasonable period of time to reimburse the fund for the preempted amounts expended.
(a) If, following such reimbursement, the amount of the fund exceeds the cap established by the Legislature, such excess should be paid to plaintiffs.
(b) Should the required reimbursement not be made, the amount of preempted expenditures should be refunded to plaintiffs.
(c) Such refunds should be made in proportion to the tax paid by each plaintiff to the total tax collected.
5. Defendants should not be enjoined from enforcing payment of the spill fund tax by plaintiffs. [ N.J. Tax , (Tax Ct. 1986) (slip op. at 38, 39).]
We now modify and, as modified, adopt the recommended findings of the Tax Court.
The procedural history and facts pertinent to the pre-emption issue are set forth in the prior opinions of this Court and the United States Supreme Court. They need be restated here only to the extent necessary to frame the unique issue that confronts us in respect of the Supreme Court's remand.
The purpose of the Spill Act, enacted in 1977, was to finance prevention and cleanup of oil spills and hazardous substance discharges because of their adverse effects on the state's environment and economy. N.J.S.A. 58:10-23.11a. The Act levied an excise tax on major chemical and petroleum facilities within the state, and the proceeds of the tax have been deposited into a permanent fund (Spill Fund) to implement the legislative goals. N.J.S.A. 58:10-23.11h. The Spill Fund may be expended primarily to clean up discharges of hazardous substances, to compensate third parties for economic losses resulting from such discharges, and for research and administrative costs. N.J.S.A. 58:10-23.11 o. Tax collections during Spill Fund fiscal years from 1978 through 1985 averaged slightly less than 10 million dollars annually.
Congress enacted CERCLA in 1980, providing for the establishment over a five-year period of a 1.6 billion dollar trust
fund, commonly known as Superfund. 87.5% of Superfund was raised primarily by federal excise taxes on petroleum and chemicals,*fn1 and the balance by appropriations from general revenues. Superfund's resources may be expended for two primary purposes: the first, "governmental response," encompasses both "removals" of released hazardous substances in the nature of a "short term" cleanup, 42 U.S.C.A. § 9601(23), and "remedial action," to achieve a "permanent remedy" for released hazardous substances. 42 U.S.C.A. § 9601(24). Secondly, Superfund may pay claims, consisting either of reimbursement to private parties for hazardous substance cleanup costs consistent with the national contingency plan, or reimbursement to the federal or a state government to compensate for damages to natural resources. 42 U.S.C.A. § 9611(a)(2)-(3). Unlike Spill Fund, Superfund resources cannot be used to clean up oil spills or to compensate third parties for economic losses caused by hazardous substance discharges.
The pre-emption issue that was resolved by the Supreme Court's decision concerned the proper interpretation of § 114(c) of CERCLA, 42 U.S.C.A. §§ 9614(c). That section, since repealed in its entirety by § 114(a) of the Superfund Amendments and Reauthorization Act of 1986 (SARA), Pub.L. 99-499, 100 Stat. 1652 (codified at 42 U.S.C.A. § 9614(c)), provided as follows:
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.
The New Jersey Attorney General's contention was that the pre-emption language should be construed to prohibit only payments to a fund to be used for purposes that are actually compensated by Superfund. The Supreme Court rejected that construction and concluded that § 114(c) pre-empted "any fund intended, in whole or in part, to pay for the same types of expenses that may be paid by Superfund," 475 U.S. at 370, 106 S. Ct. at 1113, 89 L. Ed. 2d at 379, whether or not Superfund actually paid such expenses.
With respect to the parameters of pre-emption the Court's opinion implicitly acknowledged that CERCLA itself does not set forth criteria for determining which removal and remedial expenses and which natural resource claims "may be compensated" by Superfund. Accordingly, since such criteria are set forth in the National Contingency Plan (NCP) required by CERCLA to be revised to reflect its provisions, 42 U.S.C.A. § 9605(a)(8)(B), the Court held that "the NCP provides the appropriate measure of whether a given expenditure constitutes 'costs of response or damages or claims which may be compensated' by Superfund." 475 U.S. at 375, 106 S. Ct. at 1116, 89 L. Ed. 2d at 382.
The Court conceded that CERCLA did not pre-empt expenditures authorized by the Spill Act for the following purposes: to compensate third parties for damage resulting from hazardous substance discharges; to pay personnel and equipment costs; to administer the fund itself; and to conduct research. Id. at 375, 106 S. Ct. at 89 L. Ed. 2d at 382. In addition, the Court specifically excluded the required State contribution to the cost of remedial actions, 42 U.S.C.A. § 9604(c)(3)(C), from those costs that "may be compensated" by Superfund.
The Court concluded that the Spill Act was pre-empted by § 114(c) of CERCLA to the extent that the Act authorized expenditures, beyond the mandatory state share, "for remedial
costs for sites on the National Priority List, or for removal costs that are eligible for Superfund compensation under the terms of the NCP." 475 U.S. at 376, 106 S. Ct. at 1116, 89 L. Ed. 2d at 382.
Recommendations of the Tax Court
No testimony was elicited in the course of the remand proceedings before the Tax Court. As a result, the record on remand consists solely of affidavits and exhibits submitted by the parties ...