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Battles over water rights have erupted in several towns, and bills propose a tax on and more regulation of bottlers.

By NOEL K. GALLAGHER, Staff Writer February 6, 2009

After 146 years of doing business in Maine, Poland Spring is fighting battles on three fronts these days -- over test wells in Shapleigh, a proposed tax that would cost the company $7 million a year, and a state Supreme Court case over a pumping station in Fryeburg.

"Where have we done harm or where have we caused issues that have caused people to take drastic steps like this?" asked Mark Dubois, natural resource director for Poland Spring, a subsidiary of Nestle Waters North America.

Poland Spring is the third-leading brand of bottled water in the country, behind Aquafina (Pepsi) and Dasani (Coke), and employs about 800 Maine residents.

The tax legislation is one of 14 bills introduced this session concerning large-scale extraction of groundwater. Not all of the bills' final language is available, but the titles address such topics as providing municipal authority over large-scale groundwater extraction and putting groundwater in the public trust.

All this activity comes close on the heels of a multiyear effort to tighten water regulations, said Andrew Fisk, director of Land and Water Quality at the Maine Department of Environmental Protection.

In 2007, the state enacted a law that increased oversight and applied more uniform regulations to commercial water extraction in Maine. It was the result of years of negotiation between state officials, citizen water activists – led by James Wilfong, founder of H2O for ME – and Poland Spring representatives.

The new law requires a more public review of extraction permit applications, regulates the impact of commercial extraction on the watershed, sets sustainability standards, and started a new watershed and drinking water management program.

"We thought it was going to be quiet" this legislative session, Fisk said. "I was surprised there were so many bills."

Fisk said he and other state officials have been asked to brief legislators on groundwater regulations in light of the numerous bills.

"People are asking good questions. We're not saying people shouldn't be asking questions, (but) we should be precise and talk about specific aspects of the issue," such as groundwater recharge issues, the impact of truck traffic and the environmental impact of using plastic bottles, Fisk said.

"Bottled water has certainly animated the conversation in the last several years," he said.

Activists have maintained that the 2007 law was just a start. Other issues include taxing extracted groundwater and ending the law of "absolute dominion," which dates to the late 1800s and allows landowners to extract as much water as they want. Groundwater, activists say, should be considered the same as surface water, which under Maine law is in the public trust.

Both of those proposals are before the Legislature this year.

Rep. Jon Hinck, D-Portland, introduced the penny-a-gallon tax bill. It would cost Poland Spring $7 million a year, increasing costs 18 percent, Dubois said.

"This reduces our ability to compete in a very competitive market," he said.

Hinck, an environmental lawyer, said he introduced the bill as a "fiscal equity issue." Poland Spring is a good business for Maine, he said, and should be able to handle the cost.

"We're talking about a twelfth of a cent per bottle," Hinck said. The tax money generated would be divided – 25 percent for the local municipality hosting the facility, 25 percent to state groundwater protection activities and 50 percent to reduce other Maine taxes.

On the judicial front, Poland Spring has a case pending before the Maine Supreme Judicial Court arguing that it should be allowed to build a water pumping station in Fryeburg. The Planning Board blocked it, saying it did not conform to the town's comprehensive development plan. Justices heard arguments on the case in January but have not yet issued a ruling.

Finally, at the municipal level,...