State regulators have hit a new wrinkle in their efforts to clean up the notoriously dirty dry-cleaning business. Two years ago, legislators, with the support of many dry cleaners, passed a law that, among other things, imposed a new tax on the toxic solvent perchloroethylene. The tariff's purpose was twofold. First, it was meant to create a pool of money to encourage dry cleaners to clean up contaminated stores where the chemical cleaner had seeped into the surrounding environment. Second, it was supposed to discourage the use of the cleaner, known in the industry as "perc." The law also set deadlines for dry cleaners to acquire new technology to reduce the amount of perc needed. Initial reviews were promising. According to reports that the new law required dry cleaners to file, perc use has dropped dramatically. The law seems to be working. Last week, however, state officials and industry representatives met in Portland to discuss another possibility: Rather than curbing their reliance on the toxic cleaner, some unscrupulous dry cleaners may be using "bootleg" perc to avoid the tax. "We don't know the scope of the problem yet," says Bob Alexander of the Department of Revenue. "All we know is that the legitimate distributors are not involved. The established dry-cleaning suppliers are following the law." Alexander said the Department of Environmental Quality was tipped off to the potential scofflaws by other dry cleaners who complained about paying a $12.36-per-pound tax on perc while others are not. "It isn't fair to dry cleaners who are playing by the rules," says Richard DeZeeuw of the DEQ, which is administering the fund. Perhaps more important, the bootlegging also undermines a state cleanup fund just when the state is determining which contaminated site should be cleaned up first. Perc is a fire-retardant, degreaser and chlorinated solvent first used by dry cleaners during World War II. It's the chemical needed to "Martinize" clothes and is used by 85 percent of Oregon's dry cleaners. Perc runs through industrial dry-cleaning machines in much the same way soap and water sloshes through home washing machines, except that the same batch of solvent is captured, distilled and reused thousands of times. According to the DEQ, the average dry cleaner in Oregon uses 75 to 100 gallons of perc annually. Perc is a wonderful cleaner. The trouble is it's also extremely toxic. At high enough exposures, it causes nerve and organ damage and possibly cancer. Under the old technology, in which clothes are transferred between machines during the drying process, perc often escaped into the air and, even worse, onto the ground. When perc gets into ground water, it sinks to the bottom, making it extremely difficult--and expensive--to clean up. That's why the surcharge was imposed in Oregon. The new law works like this: When someone purchases perc from a supplier, a tax is collected if it is to be used for dry cleaning. The money is sent to the Department of Revenue and is then forwarded to the DEQ fund. Dry cleaners who have discovered contamination at their stores can apply for assistance from the fund. Before the law was passed, businesses had to pay for cleanup costs themselves. State officials aren't revealing specifics about their probe into bootlegged perc, but the suspicion is that the untaxed solvent comes from industrial wholesalers who normally sell the chemical to clean machinery. The wholesalers may unwittingly be selling the solvent to individuals who avoid the tax by failing to identify themselves as dry cleaners. Avoiding the tax is punishable by a fine. Although Alexander wouldn't name targets of the investigation, a representative of Tarr Inc., a Portland fuel and solvents company, said she sells 5-gallon cans of perc for $64.94 to anyone who asks. By contrast, a taxed 5-gallon can from Westport Supply, a Seattle-based dry cleaner supplier with a Portland office, costs $110.55. "Anytime you place a premium on a product, someone will find a way around it," says Steve Young, who owns Plaza Cleaners in Northwest Portland. "There has to be some sense of honor." If dry cleaners are illegally avoiding the tax, Young says, they are only hurting the industry. The clean-up fund, which was expected to generate $1.5 million by now, has received only $1 million. Given that in the worst cases cleanup costs at an individual site can reach $2 million, that money could disappear quickly. It's unclear what will happen if the fund runs dry. Nicole Cordan, an environmental lawyer who is on an advisory committee for implementing the new law, says one possible scenario is that taxpayers would end up stuck with the bill. "I'm afraid the state may end up with a lot of orphan sites on its hand," she says. |
