ATLANTA -- The Alabama Supreme Court recently ruled that the state can maintain its current fee structure for toxic waste disposal, preempting a potential $40 million annual drain on state revenues.

The July 11 ruling by the state high court reverses a circuit court judge's February ruling that Alabama must set the same rates for fees charged to bury waste both brought into and originating within the state. Judge Joseph D. Phelps of the Circuit Court of Montgomery County held that the $72-per-ton difference in the fees was invalid under the commerce clause of the U.S. Constitution.

Judge Phelps' ruling was in response to a lawsuit filed last year by Chemical Waste Management Inc., which named as defendants Gov. Guy Hunt, the Alabama Department of Revenue, and its director, James M. Sizemore.

"In enacting the additional fee, the Alabama Legislature was not banning the collection and acceptance of hazardous waste," the Supreme Court justices wrote in an 8-to-0 opinion. They said a higher out-of-state tax is justified given the "increased risk" posed to Alabama residents.

If the lower court decision had not been reversed, Alabama stood to lose about $40 million in annual revenues from the collection of the tax. The levy, passed last year by the Legislature to help the state balance its fiscal 1991 budget, had raised the charge on waste from outside Alabama's borders to $112 a ton from $22 -- while raising the rate on in-state waste to only $40.

"With this landmark ruling, the Supreme Court has upheld the right of the people of Alabama to protect the environment of this state and the health and well-being of our people by setting a high price for those who want to bring hazardous waste to Alabama," said Gov. Hunt in a statement.

But Grover Jacobs, assistant to state Finance Director George Robinson Swift, said the State Supreme Court's ruling does not mean a $45 million Alabama Public Health Finance Authority bond issue can now be sold. The authority had planned to offer the bonds backed by the waste fee collections last year, but had postponed the sale because of the court challenge.

Mr. Jacobs said that because Chemical Waste Management Co. has indicated it may appeal the case to the U.S. Supreme Court, state officials have decided not to pursue the issue as long as further litigation is a possibility.

A spokesman for Chemical Waste Management said the company would appeal the case to the U.S. Supreme Court.

Now that the state high court has ruled on the issue, there seems to be little sentiment among lawmakers to pass legislation that would set an $85-per-tone fee on both instate and out-of-state waste, according Mike Murphy, the state Senate's public information officer.

"I don't think you will see this happen now," Mr. Murphy said. "The budget is tight enough as it is, and the court ruling takes the pressure off."

The Legislature, which does not meet this week, will return on Monday, the last day of the 1991 session, to finalize action on the fiscal 1992 budget.

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