Phosphate Tax Awaits Governor's Signature TAMPA (WUSF) - The fear of another Piney Point disaster-in-waiting has galvanized both state lawmakers and the phosphate industry to back a tax increase.

The hike in the phosphate severance tax is being looked at as a way to pay for the ongoing cleanup at Piney Point, where millions of taxpayer dollars are being spent to prevent an environmental catastrophe.

When Mulberry Phosphates declared bankruptcy two years ago, state environmental officials were forced to dip into the severance tax monies to ship millions of gallons of wastewater into the Gulf of Mexico.

The cost of the cleanup has been estimated at around $70 million during the next several years. But there is only around $40 million left in the fund. The severance tax is charged on phosphate that is mined to pay for the cost of reclamation after mines are closed.

Diana Youmans is a spokeswoman for IMC-Agrico, one of the state's biggest phosphate miners. Even though the company would pay a large amount of money over the life of the tax, Youmans says both IMC and the industry's trade group, the Florida Phosphate Council, supports the bill.

YOUMANS: IMC has supported this phosphate bill in the form that it passed. We worked hard with the council and with the other members of the council to see what we could do to encourage its passage. We feel that Piney Point is a complete anomaly to our industry, but we know that there is concern while the funds for the old lands trust fund has been used to pay for the work that has been done, we know that fund needs to be replenished.

Youmans also says that the company supports the bill because it would benefit rural counties such as Hardee County, where much of the mining is concentrated.

YOUMANS: It was especially important to IMC that counties where the mining occurs would increase and further, counties that were designated rural areas of critical economic concern would receive even additional money so that they can do some economic development that would be important to them after mining.

But some environmental advocates say the bill is watered-down. Glenn Compton is with Manasota-88, an environmental watchdog group.

He says the state Department of Environmental Protection had originally proposed more stringent regulations than was contained in the bill.

COMPTON: Companies that are in charge of phosphogypsum stack management would have to post a bond, provide cash up front, or provide proof of insurance in case they were to go bankrupt, to cover the actual cost of the closure of the stack. Instead, what the legislature has done was basically to allow the phosphate companies only to use their balance sheets to show that they're financially secure.

Compton says the bill's language would leave the state at the mercy of accountants working for phosphate companies.

COMPTON: It's nothing different than what was required of the the Mulberry Corporation at Piney Point, and what ultimately happened was the Mulberry Corporation walked away and left the taxpayers with the mess to clean up.

Officials with the Florida Phosphate Council say the Piney Point situation was an anomaly, and the industry is stable. He says the council backed the bill as a way to replenish the trust fund for reclamation, as well as providing revenue for the counties where phosphate is mined.

Andy Ellis is director of communications for the Phosphate Council. He says there is no need for the more stringent financial guarantees, such as companies having to post a bond or pay for insurance in case of bankruptcy.

ELLIS: Right now, I think we're still kind of analyzing how the rule will effect and what influences the rule will have on our industry. And until we have a chance to fully digest that, we're going to wait and see.

Officials with the state DEP are still working on stronger financial provisions that could include insurance or companies having to post a bond. They will hold another public hearing on the requirements Wednesday morning at Bee Ridge Park in Sarasota. Steve Newborn, WUSF 89.7 News. © Copyright 2012, WUSF