    [Senate Hearing 107-995]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 107-995

                       INTERSTATE WASTE AND FLOW CONTROL

    =======================================================================

                                    HEARING

                                   before the

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                       ON

    S. 1194, A BILL TO IMPOSE CERTAIN LIMITATIONS ON THE RECEIPT OF OUT-OF-
    STATE MUNICIPAL SOLID WASTE, TO AUTHORIZE STATE AND LOCAL CONTROLS OVER
                       THE FLOW OF MUNICIPAL SOLID WASTE

       S. 2034, A BILL TO AMEND THE SOLID WASTE DISPOSAL ACT TO IMPROVE
      CERTAIN LIMITS ON THE RECEIPT OF OUT-OF-STATE MUNICIPAL SOLID WASTE

                                   __________

                                 MARCH 20, 2002

                                   __________

      Printed for the use of the Committee on Environment and Public Works

                                     _____

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                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                          one hundred seventh congress
                                 second session
                      JAMES M. JEFFORDS, Vermont, Chairman
    MAX BAUCUS, Montana                  BOB SMITH, New Hampshire
    HARRY REID, Nevada                   JOHN W. WARNER, Virginia
    BOB GRAHAM, Florida                  JAMES M. INHOFE, Oklahoma
    JOSEPH I. LIEBERMAN, Connecticut     CHRISTOPHER S. BOND, Missouri
    BARBARA BOXER, California            GEORGE V. VOINOVICH, Ohio
    RON WYDEN, Oregon                    MICHAEL D. CRAPO, Idaho
    THOMAS R. CARPER, Delaware           LINCOLN CHAFEE, Rhode Island
    HILLARY RODHAM CLINTON, New York     ARLEN SPECTER, Pennsylvania
    JON S. CORZINE, New Jersey           BEN NIGHTHORSE CAMPBELL, Colorado
                     Ken Connolly, Majority Staff Director
                     Dave Conover, Minority Staff Director

                                C O N T E N T S

                                  ----------

                                 MARCH 20, 2002

                               OPENING STATEMENTS

    Baucus, Hon. Max, U.S. Senator from the State of Montana.........     5
    Buyer, Hon. Steve, U.S. Representative from the State of Indiana.    34
    Clinton, Hon. Hillary Rodham, U.S. Senator from the State of New
      York...........................................................    12
    Jeffords, Hon. James M., U.S. Senator from the State of Vermont..     1
    Levin, Hon. Carl D., U.S. Senator from the State of Michigan.....    33
    Smith, Hon. Bob, U.S. Senator from the State of New Hampshire....    33
    Specter, Hon. Arlen, U.S. Senator from the State of Pennsylvania.     2
    Voinovich, Hon. George V., U.S. Senator from the State of Ohio...     7
    Warner, Hon. John W., U.S. Senator from the Commonwealth of
      Virginia.......................................................    10

                                   WITNESSES

    Allan, Leslie, deputy commissioner for Legal Affairs, New York
      City Department of Sanitation..................................    20
        Prepared statement...........................................    46
    Anderson III, Harold J., chief counsel, Solid Waste Authority of
      Central Ohio...................................................    18
        Prepared statement...........................................    38
        Responses to additional questions from:
            Senator Clinton..........................................    45
            Senator Smith............................................    41
    Burnley, Robert G., director, Virginia Department of
      Environmental Quality..........................................    15
        Prepared statement...........................................    34
    Hess, David, secretary, Pennsylvania Department of Environmental
      Protection.....................................................    17
        Prepared statement...........................................    36
    Parker, Bruce, president and chief executive officer, National
      Solid Waste Management Association.............................    22
        Prepared statement...........................................    47
        Responses to additional questions from:
            Senator Clinton..........................................    53
            Senator Jeffords.........................................    52
            Senator Smith............................................    52

                              ADDITIONAL MATERIAL

    Letter, Edward R. Hamberger, Association of American Railroads...    66
    Map, NSWMA Research Bulletin 02-01, Interstate Shipment of
      Municipal Solid Waste in 2000 (CRS, 2001)......................    51
    Statements:
        Doughty, Joyce, director, Fairfax County Division of Solid
          Waste Disposal & Resource Recovery.........................    64
        DuBoff, Scott M., on behalf of the Local Government Coalition
          for Environmentally Sound Municipal Solid Waste Management.    54
        Lennon, Mark and Patrick Pinkson-Burke, Planning and
          Community Assistance Section, Waste Management Division,
          New Hampshire Department of Environmental Services.........    60
        McMahon, Michael E., chairman, New York City Council
          Committee on Sanitation and Solid Waste Management.........    66
    Text of bills:
        S. 1194, Solid Waste Interstate Transportation and Local
          Authority Act of 2001......................................68-115
        S. 2034, Municipal Solid Waste Interstate Transportation and
          Local Authority Act of 2002...............................116-177

                       INTERSTATE WASTE AND FLOW CONTROL

                                  ----------

                           WEDNESDAY, MARCH 20, 2002

                                   U.S. Senate,
                     Committee on Environment and Public Works,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 10:05 a.m., Hon.
    James M. Jeffords (chairman of the committee), presiding.
        Present: Senators Jeffords, Baucus, Clinton, Warner,
    Voinovich, and Specter.

    OPENING STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM
                          THE STATE OF VERMONT

        Senator Jeffords. The hearing will come to order.
        I would like to begin today by thanking all of the
    witnesses that are participating in today's hearing. The issues
    of interstate waste and flow control engender strong, divergent
    views. I acknowledge the challenges that my friends from
    Montana and Pennsylvania face. I also recognize that my friends
    from New York and New Jersey confront the opposing pressures.
        The issues pit our Constitution's Commerce Clause and the
    economic benefits resulting from the free flow of goods against
    the States' rights and the desire of local communities to
    decide their own fate. There is no right side and there is no
    easy answer. These are issues that neither the courts nor
    Congress have been able to solve. Unfortunately, I do not bring
    a magic solution myself to the concerns being raised today.
    There is no doubt that these issues are important enough to
    warrant a thorough discussion.
        While I am pleased that we could fulfill the wishes of
    several committee members by conducting this hearing, I also
    recognize that we have a long way to go before we reach greater
    agreement. Until such time, we remain stymied by the issues
    that our witnesses will raise today in their testimony.
        In the context of today's discussion, it is also important
    to recognize two issues that merit the committee's further
    attention: waste reduction and recycling. In Vermont, solid
    waste plans must demonstrate high level of recycling, and trash
    districts can charge fees to help pay for recycling programs.
    Pennsylvania's recycling efforts, as outlined in Mr. Hess'
    testimony, also serve as a model for other States that they
    should look at and hopefully follow.
        This summer I plan to conduct a hearing on recycling.
    Specifically, I would like to examine legislation to institute
    a national bottle recycling program as well as Federal
    activities regarding procurement of recycled content products.
        I, unfortunately, will not be able to remain with you this
    morning. While I hand over the gavel to Senator Baucus, I would
    like to recognize Senator Specter, who has an opening
    statement. You may proceed.
        [The prepared statement of Senator Jeffords follows:]
      Statement of Hon. James M. Jeffords, U.S. Senator from the State of
                                    Vermont
        Good morning. I'd like to begin by thanking all of our witnesses
    for participating in today's hearing.
        The issues of interstate waste and flow control engender strong
    divergent views. I acknowledge the challenges that my friends from
    Montana and Pennsylvania face. I also recognize that my friends from
    New York and New Jersey confront opposing pressures.
        These issues pit our Constitution's Commerce clause and the
    economic benefits resulting from the free flow of goods against States'
    rights and the desires of local communities to decide their own fate.
    There is no right side and there is no easy answer. These are issues
    that neither the courts nor Congress has been able to solve.
        Unfortunately, I do not bring a magic solution to the concerns
    being raised today. There is no doubt that these issues are important
    enough to warrant a thorough discussion. While I am pleased that we
    could fulfill the wishes of several committee members by conducting
    this hearing, I also recognize that we have a long way to go before we
    reach greater agreement. Until such time, we remain stymied by the
    issues that our witnesses raise in their testimonies.
        In the context of today's discussion, it is also important to
    recognize two issues that merit this committee's further attention:
    waste reduction and recycling. In Vermont, solid waste plans must
    demonstrate a high level of recycling, and trash districts can charge
    fees to help pay for recycling programs. Pennsylvania's recycling
    efforts, as outlined in Mr. Hess' testimony, also serve as a model that
    other States should follow.
        This summer, I plan to conduct a hearing on recycling.
    Specifically, I would like to examine legislation to institute a
    national bottle recycling program, as well as Federal activities
    regarding procurement of recycled-content products.
        Thank you.

    OPENING STATEMENT OF HON. ARLEN SPECTER, U.S. SENATOR FROM THE
                         STATE OF PENNSYLVANIA

        Senator Specter. Thank you very much, Mr. Chairman. I thank
    you for convening this hearing on this very important subject.
        It is a matter of national importance because there are
    many States which have been recipients of out-of-state waste,
    to their disadvantage, and there are many States which need to
    find outlets for their waste, but there needs to be some
    orderly control as to what is happening.
        I have introduced legislation, the Solid Waste Interstate
    Transportation and Local Authority Act of 2001, denominated as
    Senate bill 1194. I understand that my distinguished colleague
    from Ohio, Senator Voinovich, has introduced legislation just
    yesterday, which I have not had an opportunity to review, but I
    have an instinct that we are heading along the same line, and
    can try to accommodate the interests of our States and the
    interests of all the States.
        I would ask unanimous consent, Mr. Chairman, that my full
    statement be introduced in the record.
        Senator Baucus [assuming the chair]. Without objection.
        Senator Specter. I will summarize it because we have a very
    distinguished panel of witnesses here.
        The problem has arisen because the Supreme Court of the
    United States has held repeatedly that a State like
    Pennsylvania or Ohio may not restrict waste, garbage coming
    into the State, because of the Interstate Commerce Clause, but
    the Congress has full authority to legislate on this matter and
    to grant the States the authority to limit waste to whatever
    authority the Congress decides ought to be done. There is no
    bar to that kind of legislation. It does not take a
    Constitutional Amendment for this legislation to take effect.
        There are 37 States which import solid waste, including 13
    States represented on this committee: Ohio, Virginia, Oregon,
    New Jersey, Nevada, New York, New Hampshire, Connecticut,
    Missouri, Montana, Idaho, California, and Pennsylvania.
        The legislation which I have proposed would give the States
    the authority to legislate on the waste which comes into the
    State. It became a matter of striking importance to me one day
    in 1989 when I was in Scranton and there was an enormous semi
    which was loaded with garbage, and the smell went almost to the
    Ohio border. It went beyond the New York border, and it went
    beyond the New Jersey border. I am not sure which, New York or
    New Jersey, had imported it.
        As you might imagine, there's a contested rivalry. Senator
    D'Amato and I could agree on most things--we had that long
    unguarded border, southern New York and northern Pennsylvania--
    but we used to fight like hell when it came to the issue of
    garbage and trash coming in, and there are differences now,
    which are understandable, on a State level.
        But it seems to me that when we have the issue of flow
    control which gives municipalities some control over where the
    trash is going to be disposed of, so that you can have these
    expensive systems, and there are very tough requirements for
    liners and methodology for receiving this waste, that it ought
    to be subject to State control. The States ought to have the
    authority to delegate some authority to the local government,
    as we see it, in accordance with principles of federalism.
        It is always a challenging matter to figure out what the
    Founding Fathers had in mind. Once the Supreme Court has
    spoken, even on a divided Court, that's that, but I have grave
    doubts that the Founding Fathers thought that New Jersey and
    New York ought to have free reign to come into Pennsylvania to
    dispose of their garbage and trash.
        Well, that is a very short statement of my views. I hope we
    can find a way to work it out. In 1994, we came within a hare's
    breath of having this issue resolved. I was on a train heading
    back to Pennsylvania on the last day of the Session, when the
    Conference Report was supposed to be acted on by the Senate. In
    accordance with our very sound rules, any one of 100 can tie
    something up, and at the last minute there was a Senator's
    objection, and the legislation failed. It came back. It was
    enacted most recently in 1995 by a 94 to 6 margin. So I am
    hopeful that we can move this hearing and move a markup.
        Now that the distinguished Senator from Virginia has
    arrived, I think I will repeat my statement because I know it
    will be of great interest to him, since Virginia is burdened
    like Pennsylvania and Ohio are, with waste which comes into the
    State. I think Senator Warner will agree with Senator Voinovich
    and me that we ought to have some regulation on it.
        Thank you very much, Mr. Chairman.
        [The prepared statement of Senator Specter follows:]
        Statement of Hon. Arlen Specter, U.S. Senator from the State of
                                  Pennsylvania
        Mr. Chairman, I thank you for agreeing to hold this hearing today.
    The interstate shipment of solid waste and the inability of localities
    to use flow control authority are problems of national significance and
    are top priorities for millions of Pennsylvanians and for me. Thirty-
    seven States imported municipal solid waste in recent years, including
    thirteen States represented on this committee: Pennsylvania, Virginia,
    Ohio, Oregon, New Jersey, Nevada, New York, New Hampshire, Connecticut,
    Missouri, Montana, Idaho, and California.
        My legislation, The Solid Waste Interstate Transportation and Local
    Authority Act of 2001, (S. 1194) would allow these States and their
    local communities to have a voice in determining how much trash can be
    imported without threatening the environment. My bill has been referred
    to this committee and it is a very high priority of mine to see it
    considered by the committee in a markup at the earliest possible date
    after this hearing and scheduled for consideration by the full Senate
    promptly.
        Congressional action is imperative because of rulings by the U.S.
    Supreme Court on the issue of trash shipments. Beginning in 1978 with
    the Philadelphia v. New Jersey decision, in which the Court stipulated
    that New Jersey could not close its borders to trash from Pennsylvania,
    and in subsequent decisions, the Court has struck down State laws
    restricting the importation of solid waste from other jurisdictions
    under the Interstate Commerce Clause of the U.S. Constitution. The only
    remaining solution is for Congress to enact legislation conferring such
    authority on the States, which would then be Constitutional.
        Congress came very close to enacting legislation to address this
    issue in 1994, and the Senate passed interstate waste and flow control
    legislation in May 1995 by an overwhelming 94-6 margin, only to see it
    die in the House of Representatives.
        It is time that the largest trash exporting States bite the bullet
    and take substantial steps toward self-sufficiency for waste disposal.
    The legislation passed by the Senate in the 103d and 104th Congresses
    would have provided much-needed relief to Pennsylvania, which is by far
    the largest importer of out-of-state waste in the nation. According to
    the Pennsylvania Department of Environmental Protection, 3.9 million
    tons of out-of-state municipal solid waste entered Pennsylvania in
    1993, rising to 4.3 million tons in 1994, 5.2 million in 1995, 6.3
    million tons in 1996 and 1997, 7.2 million tons in 1998, and a record
    9.8 million tons in 2000, which are the most recent statistics
    available.
        According to the Congressional Research Service, twenty States had
    increased imports of municipal waste in 2000, with the largest
    increases occurring in Pennsylvania and Michigan. The increases in
    these two States, 2.6 million and 1.1 million tons respectively, total
    more than the entire increase nationally. Fully 52 percent of total
    municipal waste imports are disposed in just three States:
    Pennsylvania, Virginia and Michigan and Pennsylvania remains the
    largest waste importer by far with out-of-state waste accounting for
    half of my State's trash disposal and 30 percent of the national total
    for interstate shipments.
        Most of the trash imported into Pennsylvania came from New York and
    New Jersey, with New York responsible for 48 percent and New Jersey
    responsible for 40 percent of the municipal solid waste imported into
    Pennsylvania in 2000.
        This is not a problem limited to one small corner of my State.
    Millions of tons of trash generated in other States find their final
    resting place in more than 50 landfills throughout Pennsylvania. Now,
    more than ever, we need legislation which will go a long way toward
    resolving the landfill problems facing Pennsylvania, Virginia, Michigan
    and similar waste importing States.
        I have met with county officials, environmental groups, and other
    Pennsylvanians to discuss the solid waste issue specifically, and it
    often comes up in the public open house town meetings I conduct in all
    of Pennsylvania's 67 counties. I came away from those meetings
    impressed by the deep concerns expressed by the residents of
    communities which host a landfill rapidly filling up with the refuse
    from States that have failed to adequately manage the waste they
    generate.
        This issue was highlighted for me in 1988 when I was traveling near
    Scranton, Pennsylvania and noticed a large waste truck on the side of
    the road emitting a terrible odor. I found out that the truck was
    bringing waste from outside the State. Upon my return to Washington, I
    discussed the problem with my late colleague, Senator John Heinz, and
    in 1989 we introduced legislation to address the issue. Subsequently, I
    joined former Senator Dan Coats along with cosponsors from both sides
    of the aisle to introduce legislation which would have authorized
    States to restrict the disposal of out-of-state municipal waste in any
    landfill or incinerator within its jurisdiction. I was pleased when
    many of the concepts in our legislation were incorporated in the
    Environment and Public Works Committee's reported bills in the 103d and
    104th Congresses, and I supported these measures during floor
    consideration.
        During the 103d Congress, we encountered a new issue with respect
    to municipal solid waste--the issue of waste flow control authority. On
    May 16, 1994, the Supreme Court held (6-3) in Carbone v. Clarkstown
    that a flow control ordinance, which requires all solid waste to be
    processed at a designated waste management facility, violates the
    Commerce Clause of the United States Constitution. In striking down the
    Clarkstown ordinance, the Court stated that the ordinance discriminated
    against interstate commerce by allowing only the favored operator to
    process waste that is within the town's limits. As a result of the
    Court's decision, flow control ordinances in Pennsylvania and other
    States are considered unconstitutional.
        I have met with county commissioners who have made clear that this
    issue is vitally important to the local governments in Pennsylvania and
    my office has, over the past years received numerous phone calls and
    letters from Pennsylvania counties and municipal solid waste
    authorities that support waste flow control legislation. Since 1988,
    flow control has been the primary tool used by Pennsylvania counties to
    enforce solid waste plans and meet waste reduction and recycling goals
    or mandates. Many Pennsylvania jurisdictions have spent a considerable
    amount of public funds on disposal facilities, including upgraded
    sanitary landfills, state-of-the-art resource recovery facilities, and
    co-composting facilities. In the absence of flow control authority, I
    am advised that many of these worthwhile projects could be jeopardized
    and that there has been a fiscal impact on some communities where there
    are debt service obligations.
        In order to fix these problems, my legislation would provide a
    presumptive ban on all out-of-state municipal solid waste, including
    construction and demolition debris, unless a landfill obtains the
    agreement of the local government to allow for the importation of
    waste. An exemption to the ban would exist if the facility already has
    a host community agreement; or for the amount of out-of-state waste
    specified in standing contracts, for the life of the contract or the
    period ending 3 years after the date of enactment. Further, my bill
    would provide State governments the authority to place a limit on the
    amount of out-of-state waste received annually. It would also provide a
    ratchet authority to allow a State to gradually reduce the amount of
    out-of-state municipal waste that may be received at facilities.
        These provisions will provide a concrete incentive for the largest
    exporting States to get a handle on their solid waste management
    immediately. Additionally, to address the problem of flow control, my
    bill would provide local governments the authority to direct that their
    waste be disposed of in designated facilities. This would be a narrow
    fix for only those localities that constructed facilities before the
    1994 Supreme Court ruling and who relied on their ability to regulate
    the flow of garbage to pay for their municipal bonds and address their
    stranded costs.
        In conclusion, the two most popular words of any speech, I would
    like to welcome David Hess, Secretary of the Pennsylvania Department of
    Environmental Protection, who will be testifying today. He will likely
    address many of the issues I have raised with more particularity. His
    presence here emphasizes the importance of this issue to Pennsylvania.
    This is an issue that affects many States, and I urge my colleagues to
    support this very important legislation. Thank you, Mr. Chairman.

      OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE
                            STATE OF MONTANA

        Senator Baucus. Thank you, Senator. I appreciate your
    statement and also reminding us of how close we were to passing
    legislation. I remember that moment vividly, and I regret that
    we did not pass it at that time. It was very close, but it
    didn't happen.
        Senator Specter. Mr. Chairman, if I just might say one more
    word, we are having simultaneously a meeting of the Defense
    Appropriations Subcommittee with CIA Director George Tenet. So
    I am going to have to excuse myself after a few moments.
        Senator Baucus. Thank you, Senator.
        I would like, frankly, all of us to focus even more
    centrally on just how this is really a very simple issue and it
    is a very simple answer, at least in my judgment. The issue,
    very simply, is: Should a State or a town have the right to
    decide whether it wants to host a landfill or a garbage dump or
    a site that accepts garbage, or should they have no say
    whatsoever? That is, should a State or community have some say
    in whether garbage is located, dumped, or received in that
    community. I think the answer to that question is very clear.
    Of course, they should. It is just that simple.
        My personal view is, although I very much understand the
    pressures that other big States have, particularly New York,
    that that's not a problem that they should, frankly, dump onto
    other States. With the States having the right to say no, then
    the larger States will find a way to deal with their needs, a
    way that makes more sense and that is much more sensitive to
    the interests of people in other States, that is, the receiving
    States.
        But until legislation is passed giving States the right to
    say ``no'', then there will be very little incentive for the
    producing States, that is, the garbage-producing States, to
    come up with the incentives that are necessary to work out an
    accommodation or a proper solution.
        I will never forget several years ago when a Minneapolis
    firm was contemplating sending garbage out to Montana, to
    eastern Montana. I have forgotten the volume and how many
    railroad cars it would be or trucks it would be, particularly
    railroad cars rumbling through these small towns in Montana on
    the way to a site just outside of Miles City, but it was
    massive. It was a very large number. At the appropriate time I
    can go back and find out just what that volume was.
        I am not going to prolong the issue. To me, it just is very
    simple; that is, States should have the right, municipalities
    should have the right to say ``no'', because then the producing
    States will have the incentives to try to figure out a way to
    more properly deal with the garbage that they create.
        [The prepared statement of Senator Baucus follows:]
      Statement of Hon. Max Baucus, U.S. Senator from the State of Montana
        Thank you, Mr. Chairman for holding this hearing today on the issue
    of interstate shipments of waste.
        I have always regarded this issue in very simple terms. Should a
    State or town have the right to decide whether it wants to host a big
    landfill or garbage dump that accepts garbage from other States? Or,
    should they have no say whatsoever. Mr. Chairman, the answer is also
    simple. People should have the right to say ``no.'' It's high time
    Congress gave them that right.
        As Mr. Burnley from Virginia States in his testimony, landfills
    consume open space and can threaten our quality of life and the
    environment. With big landfills come big trucks, dust, traffic, noise,
    and stink. In the past and I'm sure in the future, with big landfills
    have come big messes that States and local communities must find some
    way to clean up. These are not trivial concerns.
        Mr. Chairman, I do understand that this issue isn't as simple as it
    sounds. I know that some States with large metropolitan populations are
    struggling with the enormous problem of trash disposal. But, solving
    one's trash problem by dumping one's garbage on unsuspecting or even
    unwilling towns in another State is not a real solution. Montana had a
    scare a few years back, when a proposal was made to accept out-of-state
    garbage from as far away as Minneapolis at a landfill near Miles City,
    Montana. This would have meant thousands of railroad cars and trucks
    full of garbage rolling through rural Montana towns.
        If a town wants that landfill, if they think that it's a good
    economic opportunity, then that should be a decision made by the local
    community and the State. The community should have every right to say
    ``no'' if they don't want another State's garbage in their back yard,
    and States should be able to look out for the health and well-being of
    their citizens and their environment. States and local communities can
    accept the burden of handling their own garbage; they shouldn't be
    forced to bear that burden for anyone and everyone.
        Mr. Chairman, almost every time a State or local community has
    tried to restrict waste imports in order to protect the health and
    well-being of its citizens, they usually lose in court because they're
    found to be in violation of the Commerce Clause of the Constitution.
    This just isn't fair.
        This committee has struggled with this issue for almost a decade.
    I've introduced good, common sense legislation in the past that gave
    communities the right to determine their own character and protect
    themselves from out-of-state garbage. Congress almost enacted this
    bill, but we failed to reach a consensus at the last minute. This
    committee has raised the issue every Congress since then, but we've
    accomplished nothing. It's about time we finally did something.
        I would like to thank the Senator from Pennsylvania, Senator
    Specter, for introducing his bill, S. 1194. I think he provides a good
    starting point for discussing this issue with our witnesses today and I
    look forward to hearing their testimony. Thank you, Mr. Chairman.

        Senator Baucus. I would like now to turn to others who
    might want to give statements. Senator Warner from Virginia.
        Senator Warner. I thank the chair very much.
        Senator Baucus. Senator Voinovich, do you want to----
        Senator Voinovich. I was here first.
        Senator Baucus. Yes, right, Senator Voinovich was ahead. We
    have an early bird rule in this committee, and the Senator from
    Ohio was the early bird.

      OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. SENATOR
                         FROM THE STATE OF OHIO

        Senator Voinovich. Mr. Chairman, I want to thank the
    committee for holding this hearing. This is a problem that has
    plagued my State for many, many years. I am particularly happy
    to welcome Harold Anderson from the Solid Waste Authority of
    Central Ohio, who will testify about the importance of flow
    control.
        While interstate waste has long been viewed as a Midwest
    problem, two non-Midwest States, Pennsylvania and Virginia, are
    now importing more garbage than the State of Ohio. Each year
    Ohio receives over a million tons of municipal solid waste from
    other States. Over the last 4 years that level has increased to
    almost 2 million tons of municipal garbage. That is a 63
    percent increase over what we were getting in 1997.
        Forty percent of the waste that was imported into Ohio in
    2000 came from two States, New York and New Jersey. These are
    the same two States that Midwest governors were asked by
    congressional leaders in 1996 to negotiate an agreement on
    interstate waste provisions. The governors of the importing
    States quickly came to an agreement with Governor Whitman of
    New Jersey, and I was involved in that negotiation. We began
    discussions with New York, but these were put on hold
    indefinitely in the wake of their May 1996 announcements to
    close the Fresh Kills landfill.
        I might also say that I was very much involved in the 1994
    legislation and was very disappointed that we passed both
    Houses and then at the tail-end died. Another year we got bills
    passed out of the Senate and in the House, and Representative
    Solomon from New York kept it from going to the Floor in the
    House to be voted on. So this is a subject that has been around
    this Congress for many, many years, and one that most people
    have been able to understand, but for some reason one or two
    people have been able to frustrate the majority of the people
    that are involved.
        The thing that bothers me is that we have developed a very,
    very active recycling program in Ohio. We really do a great job
    of recycling, and we are very jealous about our landfills
    space. It is very, very frustrating to local municipalities and
    districts when they are very good citizens in terms of
    recycling and then seeing their landfills being filled up from
    out-of-state waste.
        I recall in 1996 a situation where we had to issue a permit
    to this company to build a landfill in Stuebenville, Jefferson
    County. It was very clear that they were going to bring in some
    million and a half tons of garbage from Canada. I couldn't do a
    thing about it. Thank God the company lost the bid for the
    Canadian garbage, and then the person that came in and asked
    for the permit came back and said, ``Well, we don't need the
    permit anymore.'' But it was strictly meant to provide space
    for out-of-state, out-of-country garbage in that particular
    case.
        So I am going to ask that my statement be included in the
    record.
        Senator Baucus. So ordered, without objection.
        Senator Voinovich. But this has got to be a problem that
    this Congress tackles this year. Hopefully, because you,
    Senator Warner, and you, Senator Specter, are involved in this,
    perhaps we can get this done, but it will take a great deal of
    time, because there are some forces there that really don't
    want this to happen.
        The other part of my bill deals with flow control, which,
    again, is controversial. But there are hundreds of districts
    throughout the United States who issued bonds to build sold
    waste treatment facilities, and the way they were able to
    guarantee the payment of those bonds was that they could
    control the garbage, so they would have enough garbage coming
    in that they would get the tipping fees that they could pay the
    bonds.
        Well, in the Carbone case, the Supreme Court ruled that you
    can't do that. So all these communities are out there and
    trying to figure different ways of handling their bondholders.
    Many of them have had to raise taxes to guarantee those bonds.
    That is another thing that I think that needs to be addressed
    in this legislation.
        So I am anxious to work with my colleagues to see if there
    is some way that we can bird-dog this, grab a hold of it, not
    let it go, and get it done, understanding that we have a whole
    lot of other priorities that need to be addressed, but action
    on this is long overdue.
        [The prepared statement of Senator Voinovich follows:]
     Statement of Hon. George V. Voinovich, U.S. Senator from the State of
                                      Ohio
        Mr. Chairman, I want to thank you for conducting this hearing today
    on a problem that has plagued my State of Ohio as well as many other
    States nationwide for a number of years now--the uncontrolled amounts
    of trash that other States are dumping on us.
        I'd particularly like to welcome Harold Anderson from the Solid
    Waste Authority of Central Ohio who will testify about the importance
    of flow control.
        While interstate waste has long been viewed as a Midwest problem,
    two non-Midwest States, Pennsylvania and Virginia, have passed Ohio in
    the volume of out-of-state waste they receive.
        Each year, Ohio receives well over one million tons of municipal
    solid waste from other States. Over the last 4 years, annual levels of
    waste imports have been steadily increasing, and estimates for 2000
    indicate that Ohio imported approximately 1.8 million tons of municipal
    solid waste, a 63 percent increase over the amount of solid waste
    imported in 1997. While these shipments are not near our record level
    of 3.7 million tons in 1989, I believe an import level of nearly two
    million tons of trash is still entirely too high.
        Mr. Chairman, roughly 40 percent of the waste that was imported
    into Ohio in 2000 came from 2 States--New York and New Jersey. These
    are the same 2 States that Midwest Governors were asked by
    Congressional leaders in 1996 to negotiate an agreement on interstate
    waste provisions. The Governors of the importing States quickly came to
    an agreement with Governor Whitman of New Jersey--the second largest
    exporting State--on interstate waste provisions. We began discussions
    with New York, but these were put on hold indefinitely in the wake of
    their May 1996 announcement to close the Fresh Kills landfill.
        Because it is cheap and because it is expedient, communities in
    many States have simply put their garbage on trains, trucks, or barges
    and shipped it to whatever facility in whatever State--anything to keep
    from dealing with it themselves. However, State and local governments
    that have acted responsibly to implement environmentally sound waste
    disposal plans and recycling programs like we've done in Ohio have been
    subjected to a tidal wave of trash from these communities in other
    States. And while States like Ohio have worked to develop comprehensive
    disposal plans--like I set up when I was Governor of Ohio--the only
    disposal plan in effect in some States is to load up the trucks and
    move them out. Unfortunately, without a specific delegation of
    authority from Congress, such activity can continue in perpetuity, or
    until we run out of space.
        Mr. Chairman, I have been working since 1990 to let our States have
    the right to control interstate shipments of trash.
        I was amazed, that even though I was Governor of the State of Ohio,
    I could do nothing to stop the millions of tons of trash that were
    being brought into my State. The Federal court system prevented me from
    doing what I thought necessary to preserve Ohio's environment. Barring
    that avenue, I tried to reason with Governors of other States; those
    who exported to Ohio. Nothing happened. We made our case to Congress,
    and we got nowhere. All the while, the major trash hauling companies
    continued to bring the waste to Ohio.
        So, today, we're no further along than we were when I first took up
    this issue 12 years ago. I think we need to change that by enacting
    comprehensive legislation that puts power back into the hands of
    Governors--and, through them, local officials--to make the decisions
    that affect their States and localities.
        Yesterday, I introduced S. 2034, which is legislation that reflects
    the 1996 agreement on interstate waste and flow control provisions that
    my State, along with Indiana, Michigan and Pennsylvania, reached with
    then-Governor Whitman, whose own State of New Jersey is a large
    exporter of trash.
        In fact, the provisions of my bill are consistent with the National
    Governor's Association's long-standing policy, which was adopted by all
    the nation's Governors. This policy, which was adopted in 1990, states
    that Governors must be able to act on their own initiative to limit,
    reduce or freeze waste import levels at existing and future facilities.
        For Ohio, the most important aspect of my bill is the ability for
    States to limit future waste flows through ``permit caps.'' This
    provision provides assurances to Ohio and other States that there is a
    genuine need for new facilities and that they won't be built primarily
    for the purpose of receiving out-of-state waste.
        This is particularly necessary because it gives States the ability
    to consider where waste comes from during the permitting process. As
    Governor I dealt with a situation in 1996 in which Ohio EPA had to
    issue a permit for a new landfill because Ohio could not deny the
    permit based solely on where waste originated. This new landfill would
    have taken in 5,000 tons of garbage a day--approximately 1.5 million
    tons a year--from Canada alone. This would have doubled the amount of
    out-of-state waste entering Ohio. Thankfully, this landfill company
    lost its bid for Canadian trash business. Following that, the applicant
    asked that their permit be rescinded because there wasn't a need for
    the facility in the State.
        Unfortunately, efforts to place reasonable restrictions on out-of-
    state waste shipments have been perceived by some as an attempt to ban
    all out-of-State trash. On the contrary, we are not asking for outright
    authority for States to prohibit all out-of-state waste, nor are we
    seeking to prohibit waste from any one State.
        We are asking for reasonable tools that will enable State and local
    governments to act responsibly to manage their own waste and limit
    unreasonable waste imports from other States. Such measures would give
    States the ability to plan facilities around their own needs.
        One other thing that our witnesses will discuss today--including
    Mr. Anderson--is re-establishing the ability of States and communities
    to enact flow control for solid waste. As my colleagues know, flow
    control allows States or communities to designate where solid waste
    generated within their jurisdictions must be taken for processing,
    treatment or disposal. The bill that I have introduced includes a
    provision to restore flow control provisions to what they were prior to
    the 1994 Supreme Court decision in Carbone v. Clarkstown. Doing so will
    give States and localities an important tool to make sound choices
    regarding the disposal of their own solid waste within that community
    or State.
        Mr. Chairman, I would like to thank you for bringing the issue of
    interstate shipment of waste once again to the attention of this
    committee, and it is my hope that the full Senate will have the
    opportunity to consider my legislation during this session of Congress.
        States like Ohio should not continue to be saddled with the
    environmental costs of other States' inability to take care of their
    own solid waste. We, in Ohio, have worked hard to address our own needs
    with recycling and waste reduction programs to preserve our environment
    for future generations. It is time for other States to step up to the
    plate and do the right thing also.
        I thank the witnesses for appearing today, and I look forward to
    their testimony.
        Thank you, Mr. Chairman.

        Senator Baucus. Senator Warner.

    OPENING STATEMENT OF HON. JOHN W. WARNER, U.S. SENATOR FROM THE
                        COMMONWEALTH OF VIRGINIA

        Senator Warner. Thank you, Mr. Chairman. I think it is
    important that this committee has held this hearing this
    morning because this is my 24th year in the Senate, and my
    colleague from Pennsylvania, give or take a year, has been here
    about the same time. We have worked on this issue every year
    we've been here. As you say, our distinguished colleague from
    Ohio, we have gotten it down to the one yard line, only to see
    a single or two or three persons throw that final block and
    stop it.
        If you look back in history, when the Founding Fathers put
    together the United States, we united, but we remained
    sovereign to a large degree in our States. We really only came
    together to have a common currency, keep the enemy from coming
    over the ramparts, and to deliver the mail. But when we put in
    the Interstate Commerce Clause, none of us recognized that we
    would be here today in 2002 fighting this issue. It's just
    wrong. It offends basic fairness.
        Virginia is the second largest recipient of the discard
    from other States. Hundreds upon hundreds of trailer trucks
    come down from distant places dripping, leaking, causing
    congestion, accidents on the highway, and proceed to several
    landfills in remote parts of our State that have, by virtue of
    their local government, accepted this waste, and totally
    circumvented a series of governors of our State who have
    courageously fought to try to limit this and to control it.
        So it is not just a matter of environmental concern. It is
    also a matter of the transportation system and others who share
    the highways. And now one State is going to barge large
    quantities into our State, coming down the Atlantic coastline,
    up the Chesapeake Bay, and I might add with these barges, some
    of which thus far have been shown to leak, up the Chesapeake
    Bay, and into a port that will then truck it the distance to
    the repositories.
        Now the Congress and this committee have forged a program
    for years and taken Federal tax dollars to clean up the
    Chesapeake Bay, and now the leaky barges will be proceeding up
    that very Bay, and we are having a struggle preserving our fish
    and shellfish and everything else that migrates into the
    oceans. I tell you, we've got to stop this thing.
        Each State is obligated to take care of its own waste.
    Virginia takes care of its, and I don't see why we shouldn't
    have the authority to regulate this in a manner to protect our
    own environment in the State of Virginia and to protect those
    avenues of transportation, be they the road system and/or the
    water system.
        I see our distinguished colleague from New York. I think
    I'll start from the beginning such that you can hear every
    word.
        [Laughter.]
        Senator Clinton. I don't want to miss a word, Mr. Chairman,
    today.
        Senator Warner. I'm sorry, but I say to you most
    respectfully--and you know my respect for you as a Senator; I
    think you have been very effective for your State--but I hope
    you are less effective on this issue than you have been on some
    others in your career here in the U.S. Senate.
        Because why should Virginia continue to receive--we are now
    second in the Nation as a repository, and I daresay your
    beloved, and, indeed, the world's beloved Big Apple is the
    biggest exporter. So I am anxious to hear your comments on this
    issue, and I will patiently wait.
        I thank the chair.
        [The prepared statement of Senator Warner follows:]
    Statement of Hon. John W. Warner, U.S. Senator from the Commonwealth of
                                    Virginia
        Mr. Chairman, I want to thank you for scheduling our hearing this
    morning. I join in welcoming our witnesses who will share their
    individual experiences with us.
        The transport and disposal of waste across State lines is an issue
    that I have worked on for over 10 years.
        The problem has not gone away, and over time, has only worsened.
    States are charged, under Federal law, with the requirement to ensure
    that there is adequate, long-term capacity to dispose waste generated
    IN-STATE.
        This critical planning cannot be fully formed by States unless they
    have the necessary authority to manage all municipal solid waste,
    regardless of where it originates.
        The current practice of allowing each local government to decide to
    accept out-of-state waste in a piecemeal fashion does not allow for
    responsible solid waste planning. Neither does it promote sound
    environmental protection of our natural resources and open space.
        One cannot deny that there are potential long-term consequences to
    our environment from these landfills, particularly our underground
    drinking water supplies. Trading off environmental damages for short-
    term financial gains is not acceptable.
        It is time for the Federal Government to act to give States this
    modest authority. I pledge to continue working with this committee to
    move legislation forward.

        Senator Clinton. I am so glad I'm here.
        [Laughter.]
        Senator Baucus. Thank you very much, Senator.
        Senator if you wish to make a statement, you are certainly
    recognized to do it, or if you want to wait until a later date,
    it is up to you.
        Senator Clinton. I'm happy to abide by whatever the
    sequencing is, Mr. Chairman.
        Senator Baucus. Well, the sequence has come to you.
        Senator Clinton. It's my turn? All right. Thank you very
    much.
        Senator Warner. Would the chair indulge me that, for the
    record, I am co-sponsor of the legislation of both the Senator
    from Pennsylvania and the Senator from Ohio.

    OPENING STATEMENT OF HON. HILLARY RODHAM CLINTON, U.S. SENATOR
                       FROM THE STATE OF NEW YORK

        Senator Clinton. Well, thank you very much. I know that
    this is the last few days before the recess, so I, like
    everyone, have three committee meetings being held
    simultaneously. So I will come and go, but it is in no way a
    statement on my part about the importance of this issue.
        I am very pleased to be here because this is an important
    matter. I thank the committee for holding this hearing.
        I want to welcome our New York witness, New York City
    Department of Sanitation's Deputy Commissioner for Legal
    Affairs, Ms. Leslie Allan. I may not be able to stay for her
    entire testimony, but I want to thank her for being here and
    for representing the city of New York.
        Now, as I am sure we will hear, and probably many of us
    already know, this week marks the 1-year anniversary of the
    closing of the Fresh Kills landfill. I understand that the
    closure of Fresh Kills has created a heightened level of
    concern for the States that are the major importers of waste. I
    want to say from the beginning that, while we may disagree on
    what should or could be done legislatively at the Federal level
    with respect to the issue of interstate shipments of waste, I
    think we all do agree that all States, all communities, all
    individuals need to manage waste responsibly, safely, and in an
    environmentally-sound manner, whether we are talking about
    transport, re-use, recycling, or disposal.
        As the Nation's largest exporter of municipal solid waste,
    I believe that New York State and New York City have shown
    their commitment to ensuring that waste generated within our
    borders is disposed of safely and responsibly. Now both the
    State and the city--and I want to underline this, because I
    think this is a critical point--both the State and the city of
    New York require valid and legally-binding host community
    agreements before entering into any contracts for waste
    disposal. In other words, the city is only exporting waste to
    those host communities that have agreed up front they are
    willing to take it, and they can meet certain standards in
    doing so.
        I am also concerned that there is a basic misunderstanding
    that somehow our waste, which of course we do generate a lot--
    we have a lot of people. You know, New York City has had a
    population increase in the last 10 years, 8 million strong.
    Yet, we do not export to any community without a host community
    agreement.
        I think that New York State also deserves some recognition
    for its recycling rate of over 40 percent. Therefore, our State
    is in the top five in the country for recycling.
        So I think that we know that we've got to do what needs to
    be done with respect to the waste we create. I would like it if
    we would turn the clock back, go back to the 1950s, and we
    didn't have so much packaging and so much unnecessary waste,
    but, you know, that is one person's opinion.
        Waste disposal is obviously not cheap. We do have to do it
    right. It has to be done in an environmentally-appropriate
    manner. Those communities that accept the responsibility to
    receive waste that is generated from beyond their own borders
    are doing so freely, contracting on the basis on what they
    believe is obviously a good arrangement for them and for the
    exporter and the companies that run these operations.
        So, Mr. Chairman, I thank you for holding this hearing.
    Again, I would just emphasize that we do have a lot of waste.
    We create a lot of waste. Our Nation as a whole creates way too
    much waste. I wish we could do more on that, but, in the
    meantime, New York is following a procedure which I think is
    well-founded both in law and in practicality by only sending
    waste where we can get an agreement that it is to be received
    and handled in an appropriate manner.
        [The prepared statement of Senator Clinton follows:]
     Statement of Hon. Hillary Rodham Clinton, U.S. Senator from the State
                                  of New York
        Thank you, Mr. Chairman.
        I apologize to my colleagues and to today's witnesses for being
    late. Unfortunately, as is often the case here in the Senate, all three
    of the committees on which I sit have business this morning.
        I have both a business meeting in the HELP Committee and a very
    important Budget Committee markup this morning--which both directly
    conflict with each other, and with this hearing.
        So, I'm trying to be in three places at once this morning.
        Mr. Chairman, in the interest of time, I will submit my full
    statement for the record.
        But if I could, I would just like to take this opportunity to
    welcome our New York witness--New York City Department of Sanitation's
    Deputy Commissioner for Legal Affairs, Ms. Leslie Allan.
        Thank you for being with us here today, Ms. Allan, and for so ably
    representing the city of New York.
        As you all probably know, this week marks the 1-year anniversary of
    the closing of the Fresh Kills Landfill.
        I know that the closure of Fresh Kills has created a heightened
    level of concern for the States that many of my colleagues here on this
    committee represent.
        Let me just say that while we may disagree on what should be done
    legislatively at the Federal level with respect to the issue of
    interstate shipments of waste, I think we all do agree that all States,
    all communities, and all individuals, for that matter, need to manage
    waste responsibly, safely, and in an environmentally sound manner--
    whether we are talking about transport, reuse, recycling, or disposal.
        As the nation's largest exporter of municipal solid waste, I
    believe that New York State (and New York City as well) has shown its
    commitment to ensuring that waste generated within its borders is
    disposed of safely and responsibly, and will continue to do so.
        Both the State and the City require valid and legally binding Host
    Community Agreements before entering into any contracts for waste
    disposal--in other words, the City is only exporting waste to those
    host communities that have agreed up front and willingly to take it.
        In addition, both New York State and New York City have shown a
    strong commitment to recycling.
        Recent reports show New York State with a recycling rate of over 40
    percent--which I think puts the State in the top five for recycling.
        And New York City has had a very ambitious recycling program in
    place, which we all hope will be up and running again very soon.
        Let's face it. New York State, and New York City in particular, is
    one of the largest consumer markets in the nation.
        We, in New York, consume the goods grown, developed, processed, and
    manufactured in your States, and will continue to do so--just as we
    hope others around the country will continue to use and enjoy New York
    products as well.
        And when we consume, we create waste; and waste disposal is not
    cheap.
        According to a story last month in the New York Times, the city's
    Independent Budget Office has projected that the sanitation budget for
    the City could rise by over 60 percent from 1997 to 2004--that's
    millions and millions of dollars that would probably go to outside
    businesses and communities.
        In closing, let me reiterate that I believe all States and all
    communities need to manage waste responsibly, safely, and in an
    environmentally sound manner.
        But I do not know that controlling interstate shipments of waste is
    the solution, or that it will help us to all achieve our collective
    objective.
        I believe that New York State/New York City has and will continue
    to commit itself to ensuring that waste generated within its borders is
    disposed of safely and responsibly, and with the willingness and
    acceptance of the Host Community.
        With that, I would just like to ask that the testimony of Mr.
    Michael E. McMahon, Chairman of the New York City Council Committee on
    Sanitation and Solid Waste Management, be entered into the record.
        Thank you.

        Senator Baucus. Thank you very much, Senator.
        We will now proceed to the witnesses. Before I do, there
    are some Closeup students in the audience from Montana. They
    are from Deer Lodge in Montana.
        This is a good lesson in democracy. Here we've got some
    Senators who don't want the waste and others, ``Hey, we're
    doing a good job; we've got agreements with the host
    communities, and why not?''
        I would like you to stand, you students, from Powell County
    High School in Deer Lodge, MT. You're seeing it. This is how
    this place works. It won't be entirely clear to you, but this
    is what happens.
        [Laughter.]
        Thanks an awful lot. I appreciate it.
        [Applause.]
        Senator Warner. Mr. Chairman----
        Senator Baucus. Sure.
        Senator Warner [continuing]. Could I join you in welcoming
    these students? I am one who frequently visits Deer Lodge to go
    trout fishing. It is one of the most beautiful trout streams in
    America, and your lovely communities up there, many of which
    have restored the old buildings that date way back into the
    1800s. You're fortunate to live in that part of America. It is
    a great State.
        As you see, here's your Senator here this morning
    conducting a hearing of tremendous significance to a number of
    States. He is also chairman of the Finance Committee. Of
    course, I believe in further reduction of taxes, and I will
    leave it to him as to exactly his viewpoints on that.
        [Laughter.]
        Senator Baucus. I'll remember that, Senator, at the
    appropriate time.
        Senator Warner. You might ask that question of him.
        [Laughter.]
        Senator Baucus. All right, thank you. And it is true,
    Senator Warner visits our State very often for lots of reasons,
    including trout fishing.
        OK, why don't Mr. Parker, all of you, come up, our panel
    here? Our panel consists of Mr. Robert Burnley, who is director
    of the Virginia Department of Environmental Quality; Mr. David
    Hess, secretary of the Pennsylvania Department of Environmental
    Protection; Mr. Harold Anderson, who is the chief counsel of
    the Solid Waste Authority of Central Ohio; Ms. Leslie Allan,
    deputy commissioner for Legal Affairs, New York City Department
    of Sanitation, and Mr. Bruce Parker, president and CEO of
    National Solid Waste Management Association.
        Let's begin in the order in which I introduced all of you,
    with Mr. Burnley. We are going to ask each of you to adhere to
    our 5-minute rule. Your statements will automatically be
    included in the record. You needn't worry about that. But if we
    could restrict ourselves to 5 minutes, we would deeply
    appreciate it.
        Mr. Burnley.

     STATEMENT OF ROBERT G. BURNLEY, DIRECTOR, VIRGINIA DEPARTMENT
                        OF ENVIRONMENTAL QUALITY

        Mr. Burnley. Thank you, and good morning, Mr. Chairman and
    members of the committee. I am Bob Burnley, director of
    Virginia's Department of Environmental Quality. I certainly
    appreciate the opportunity to be here with you this morning and
    speak about Virginia's concerns regarding interstate waste.
        Governor Warner and I are concerned about interstate waste
    because landfills consume open space and threaten the quality
    of our environment. While every State has a responsibility to
    ensure adequate and safe waste disposal capacity for its
    citizens, Virginia should not be forced to assume these long-
    term costs and increase risks for other States. We should not
    have our hands tied as we attempt to protect ourselves from the
    onslaught of garbage from other States.
        Virginia is second in the Nation in the amount of out-of-
    state waste received. Over the last decade, the amount of out-
    of-state waste imported to Virginia has more than doubled. In
    2000, we imported 4.5 million tons of solid waste. That
    represents more than 20 percent of Virginia's total waste
    stream. Our landfill permits consume approximately 10 acres in
    Virginia. This capacity will last until the year 2014 if
    disposal volumes remain constant. If, however, Virginia is not
    able to cap the flow of waste from other States, we may be
    forced to provide additional landfill space at a much earlier
    date.
        The Environmental Protection Agency acknowledges that,
    despite our best technology, all landfills will eventually
    leak. Actually, in Virginia one of our modern subtitle D
    landfills, one of our most modern landfills, has already shown
    indications that it is contaminating groundwater, less than 10
    years after it was constructed.
        Virginia has enacted very stringent requirements for the
    siting, monitoring, and operation of its landfills, more
    stringent than those established by the EPA. Despite our best
    efforts, however, to protect Virginia's environment, we do not
    know what will happen in 20 or 30 years from now. Common sense
    tells us that, the larger the landfill and the more waste we
    are forced to accept, the greater the risk of groundwater
    contamination and other pollution.
        Unfortunately, Virginia has already suffered the
    consequences of uncontrolled shipments of out-of-state waste.
    The Kim-Stan Landfill in western Virginia was originally
    operated as a local landfill, but was later purchased by
    private interests. In the subsequent months they began
    importing waste from other States, increasing the volume
    significantly. Literally hundreds of tractor-trailers filled
    with trash traveled the back roads of rural Allegheny County
    every day. The owners of that landfill soon filed for
    bankruptcy, and the landfill is now a Superfund site.
        The Commonwealth has already expended its taxpayer dollars
    to investigate and contain the contamination. Neither the
    generators nor the generating State have borne any of these
    costs. We hope our enhanced landfill regulations will prevent
    this type of environmental catastrophe from happening in the
    future, but the fact remains that no one is certain the current
    landfill designs are adequate to protect and to provide long-
    term environmental protection.
        Another concern is our inability to enforce against
    generators who send their waste to Virginia facilities.
    Virginia prohibits certain types of waste from its landfills
    that are allowed municipal solid waste streams from other
    States. Without the ability to limit imports from these States,
    Virginia is forced to expend more of its State-funded
    compliance resources at landfills accepting waste from other
    States. When violations are found, we have no authority to
    pursue enforcement against the source of the waste if they are
    outside Virginia.
        In 1998 and 1999, the Department of Environmental Quality
    found illegal wastes in loads of trash coming from New York
    City. In the resulting litigation, the court found that it
    would be impossible for the New York City transfer station to
    adequately screen the trash to prevent these banned wastes from
    making their way to Virginia unless the volumes were
    significantly curtailed. The Federal courts, however, have
    prevented us from imposing any limits or caps on the disposal
    of these wastes because it would violate the Commerce Clause of
    the Constitution.
        As Senator Warner mentioned, every day trains filled with
    garbage travel Virginia's railways, many parking along the way
    while they wait their turn at the landfill. Tractor-trailers
    filled with garbage work their way through the crowded
    interstate system and across rural Virginia. At least one of
    Virginia's operators plans to use barges to import garbage.
    Each barge will bring approximately 250 tractor-trailer loads
    of trash across the Chesapeake Bay and up the James River.
    Virginia has tried to protect itself by imposing disposal caps,
    by regulating large trash trucks, and imposing restrictions on
    barges, but the Federal courts have blocked these efforts.
        The Commonwealth seeks the authority to control the manner
    in which our----
        Senator Baucus. Mr. Burnley, I'm going to have to ask you
    to wrap up your statement as best you possibly can.
        Mr. Burnley. OK.
        Senator Baucus. You can summarize if you wish.
        Mr. Burnley. We are asking Congress to grant States the
    ability to control the importation of garbage. We want that
    authority to be simple and flexible enough to meet the needs of
    other States, and we would love to have an opportunity to work
    with this committee and others as that legislation is
    developed.
        Senator Baucus. Thank you very much, Mr. Burnley.
        Senator Warner. Could I join in thanking Mr. Burnley and
    thanking the Governor of Virginia, coincidentally, Governor
    Warner, to strongly support the desires of a vast majority of
    Virginians to obtain this type of relief from the Congress of
    the United States.
        Senator Baucus. Thank you, Senator.
        Mr. Hess.

    STATEMENT OF DAVID HESS, SECRETARY, PENNSYLVANIA DEPARTMENT OF
                        ENVIRONMENTAL PROTECTION

        Mr. Hess. Mr. Chairman, thank you, and, members of the
    committee, thank you for being here. I want to particularly
    thank Senator Specter for his terrific opening statement today.
        I am David Hess. I am Secretary of the Department of
    Environmental Protection, here representing Governor Mark
    Schweiker. I also had the pleasure of representing Tom Ridge
    last year, and Pennsylvania has been here since the late
    Governor Casey, to press our case for authority for States to
    control the importation of waste.
        We have been struggling with this issue for some time. I
    think just a quick glance at some of the numbers for
    Pennsylvania will tell the story.
        We, last year, imported 12.2 million tons, 12.6 million
    tons of waste. That was just a little bit less than half of the
    waste that was disposed in Pennsylvania, and most of that was
    from New York and New Jersey. As long as States take the out-
    of-state, out-of-mind attitude toward garbage and export an
    unlimited quantity of garbage to their neighbors, as was
    pointed out, there is no incentive to deal with the issue, and
    no incentive to develop facilities of their own. The most
    recent court decisions regarding Virginia's statutes just
    simply underscore once again the need for Congress to act on
    this important issue.
        Pennsylvania supports Senator Specter's legislation and
    Congressman Greenwood's legislation. We are asking for
    something I think that's very simple, four things:
        No. 1, give Pennsylvania's communities the ability to allow
    the disposal of imported waste through host community
    agreements, community control over the process.
        No. 2, impose a freeze on waste imports immediately, with a
    predictable schedule to follow for reducing imports over time.
        No. 3, allow States to impose a percentage cap on the
    amount of imported waste that a new facility could receive.
        And, No. 4, allow States to consider in-state capacity as
    part of the permitting process.
        While we wait for congressional action, Pennsylvania has
    not been standing still. We have been moving forward with our
    efforts to create safer communities that have been impacted by
    waste imported from other States. We have created the world's
    largest curbside recycling program, serving over 10 million
    residents. We now have over 12 years of capacity available for
    the disposal of waste at current limits, and we have some of
    the toughest environmental standards for constructing landfills
    in this country.
        Recently, the Mayor of New York, Mayor Bloomberg, announced
    an 18-month suspension of their recycling program. Although
    this proposal is expected to save the city in the neighborhood
    of $57 million, what we expect is that the burden of more waste
    coming into Pennsylvania will be the result.
        At the same time, you have initiatives in Philadelphia by
    Mayor Street to re-energize the recycling program in that city,
    and I had the pleasure of kicking off that process this week
    with the Mayor and Commissioner Johnson. Other people are
    expanding their recycling operations. We don't want yet more
    garbage coming to Pennsylvania because the city is cutting back
    on its commitments.
        In addressing our own waste capacity issues, Governor
    Schweiker has proposed a 2-year moratorium on all new or
    expanded landfill permits. We've also supported standards for
    creating host community agreements. There is also legislation
    pending in our general assembly to increase the recycling $2 to
    $7 per ton of waste coming into Pennsylvania.
        Last year we had to initiate the largest environmental
    enforcement effort we have ever undertaken in the State's
    history, called Operation Clean Sweep, to deal with unsafe
    trucks, leaking waste trucks, all across the State. Five DEP
    State police officers, PennDOT officers, and others were out
    inspecting trucks for an entire week. We found over 11,000
    violations in those trucks. We issued over $2 million worth of
    fines. That is just one indication of the kind of issues that
    we get involved in because of the imported waste issue.
        Our democracy is built on the foundation of empowering
    people to make choices. It is also built on the concept of
    fairness. The citizens of the Commonwealth are asking Congress
    for a fair and equitable opportunity to make reasonable
    decisions with regard to waste entering our communities from
    out of the State. This is the missing piece of legislative
    authority that will allow us to better manage and control
    almost half the waste disposed in our State.
        Pennsylvania has worked with a variety of Senators and
    Representatives in Congress over the years to try to address
    this issue, and we look forward to working with you as you
    again tackle this important issue for Pennsylvania.
        Senator Baucus. Thank you very much, Mr. Hess.
        Mr. Anderson.

      STATEMENT OF HAROLD J. ANDERSON, CHIEF COUNSEL, SOLID WASTE
                       AUTHORITY OF CENTRAL OHIO

        Mr. Anderson. Mr. Chairman, members of the committee, my
    name is Harold Anderson, and I am chief counsel of the Solid
    Waste Authority of Central Ohio, also known as SWACO. I am
    testifying on behalf of SWACO and the Local Government
    Coalition for Environmentally Sound Municipal Solid Waste
    Management.
        We commend Chairman Jeffords for holding this important
    hearing. We would also like to thank Senators Voinovich and
    Specter for introducing bills to address the issue of flow
    control and interstate waste. We would like to thank Senator
    Warner for sponsoring both of those bills.
        My testimony will address flow control and interstate waste
    transport. Before turning to those points, however, let me tell
    you about SWACO. We own one of the 10 largest public landfills
    in the United States. SWACO strongly embraces recycling and
    other environmentally-friendly programs. In fact, SWACO
    recently took over a recycling program for the 700,000
    residents of the city of Columbus. SWACO also strongly embraces
    partnerships with the private sector, and our public landfill
    is operated by Waste Management, Inc.
        Our coalition supports S. 1194. That bill protects stranded
    investment by providing limited grandfather authority for the
    use of flow control. Flow control is a mechanism which allows
    local governments to meet debt obligations in a fiscally-
    responsible manner. As the term implies, a local government
    will control the flow of municipal solid waste by selecting and
    designating by ordinance a specific facility or set of
    facilities for municipal solid waste processing and disposal.
        Unfortunately, in the Carbone case, the U.S. Supreme Court
    ruled that the flow control ordinance at issue in the case
    violated the Commerce Clause. I should note that, prior to the
    Carbone decision, flow control was repeatedly validated by
    Federal court decisions from the 1970s to the 1990s.
        The consequences confronting communities throughout the
    Nation due to the loss of flow control authority and the
    absence of Federal legislation such as Senate bill 1194 have
    been quite serious. SWACO is a case in point. We have over $150
    million in stranded investment in a waste-to-energy facility
    that was closed on the heels of the Carbone decision. After the
    Carbone ruling, we laid off 250 employees and had to impose a
    $7-per-ton fee, a waste tax, on all municipal solid waste
    that's generated in Franklin County. We had to take that action
    to generate sufficient revenue to meet our debt obligations, in
    the absence of flow control authority.
        On a national scale, the principal rating agencies, Moody's
    and Standard and Poor's, have downgraded a considerable number
    of bonds for public solid waste facilities since Carbone, and
    the estimated value of that is over $3.5 billion. This is a
    significant strain on local government.
        I would also like to emphasize that, because we have made
    significant financial sacrifices to meet our obligations, we
    have not defaulted on our bond obligations. Unfortunately, the
    absence of such a default has led some to suggest that we do
    not need flow control legislation. This suggestion is only
    correct if you are to conclude that the better approach is to
    increase local taxes to meet those financial obligations
    undertaken years ago. That position contradicts Federal policy,
    which was announced more than a decade ago, which discourages
    the use of general taxation to fund solid waste management.
        S. 1194 is narrow legislation that protects public
    investment made in reliance on flow control, is self-limited,
    and does contain a sunset provision. Senate bill 1194 is not
    anti-competitive, nor is it anti-private enterprise. The
    tipping fees that SWACO charges for the use of its facilities
    are set at a level to recover only the cost of providing those
    services, and in fact flow control does not increase prices.
    U.S. EPA concluded in a post-Carbone report to Congress that
    the tipping fees paid in flow control-reliant communities, when
    broken down into their component parts, are comparable to those
    for non-flow-controlled facilities.
        Turning to interstate waste transportation, SWACO strongly
    supports legislation that will provide communities with
    appropriate means to husband their finite resources and waste
    management capacity. The interstate waste transportation
    legislation before this committee addresses a serious national
    problem. Ohio is a case in point. Communities across our State
    have serious concerns with trash from outside Ohio being
    disposed in our State. This local concern has resulted in a
    large----
        Senator Baucus. I would ask you to summarize, please, Mr.
    Anderson.
        Mr. Anderson. Thank you, Senator.
        This has resulted in a large number of bills in Ohio's
    statehouse, bills ranging from moratoriums on landfills to
    study commissions. This is a Federal issue. It is not a State
    issue. We need Federal legislation on this matter.
        Thank you.
        Senator Baucus. Thank you. Thank you, Mr. Anderson, very
    much.
        Ms. Allan.

       STATEMENT OF LESLIE ALLAN, DEPUTY COMMISSIONER FOR LEGAL
            AFFAIRS, NEW YORK CITY DEPARTMENT OF SANITATION

        Ms. Allan. Mr. Chairman and members of the committee, my
    name is Leslie Allan, and I am Deputy Commissioner for Legal
    Affairs at the New York City Department of Sanitation. On
    behalf of Mayor Bloomberg, I appreciate the opportunity to
    testify today on the pending interstate waste legislation. The
    bill could clearly have a profound impact on New York City's
    day-to-day municipal solid waste operations.
        In 1996, as you know, Mayor Giuliani and Governor Pataki
    agreed to close the Fresh Kills landfill by December 31, 2001.
    That decision was the city's first step toward embarking on a
    new environmentally-sound course to manage its solid waste. It
    is important for the committee to recognize from the outset
    that New York City closed Fresh Kills responsibly and
    appropriately, with due consideration for the States and the
    communities that have chosen to accept the city's waste.
        On March 21, about a year ago, New York City sent the last
    barge of Department-collected waste to Fresh Kills, thereby
    completing a five-phase program initiated in July 1977 which
    required that all of the city's exported waste be disposed of
    in communities that have expressly chosen to accept it through
    valid, legally-binding host community agreements.
        The city's plan mandates that we only export to willing
    jurisdictions. The Mayor does not see any need for legislation
    to require New York City to do that which it already does.
        In exporting its residential waste, the city is exercising
    nothing more than the right that the Constitution extends to
    cities and States nationwide to responsibly, efficiently, and
    environmentally handle their solid waste management in a
    heavily-regulated and highly-competitive private sector
    business. The courts have consistently upheld municipal solid
    waste shipments as a commodity in interstate commerce, and over
    the years communities have relied on the certainty that these
    decisions provide for protecting long-term free market plans to
    manage solid waste.
        This is especially important in a landscape where more
    rigorous environmental protections required under subtitle D of
    the Resource Conservation and Recovery Act, RCRA, have
    compelled communities to replace their old small landfills with
    large, costly, state-of-the-art regional facilities that comply
    with the Federal statute. In this context, the right to
    transport solid waste across State lines complements the basic
    reality that different regions have varying different disposal
    capacities regardless of State lines. Areas such as New York
    City and Chicago, which lack adequate space for landfills and/
    or are prohibited from incinerating their waste, may be located
    closer to better and more cost-effective facilities in other
    States. These facilities need the additional waste generated
    elsewhere to pay for part of the increased cost of complying
    with RCRA.
        Although the closure of Fresh Kills affects primarily the
    city's residential waste, the private market is as essential to
    the management of that waste as it is to the management of the
    city's commercial waste. For years the city's commercial
    businesses have relied on private haulers to export waste from
    New York. For many communities and States, the municipal waste
    disposal fees by these haulers are an important revenue stream.
    The city believes that each locality has the right to decide
    whether to accept or reject out-of-state solid waste, not
    because of Federal legislation, but because of locally-decided
    host community agreements.
        The fact is that the city, in securing contracts for the
    disposal of its residential waste, has relied exclusively on
    host community agreement sites and has, thus, furthered a
    partnership that benefits both the importer and the exporter.
    For the Nation's largest and most densely-populated city of 8
    million people, composed of three islands and a peninsula, the
    ability to send waste to newer, more advanced regional
    facilities located outside the city's boundaries acknowledges
    the very environmental demographic and geographic realities
    that made closing Fresh Kills necessary.
        For the local governments that have opted to import our
    waste, the revenue generated through host fees, licensing fees,
    and taxes has substantially enhanced the local economy,
    improved area infrastructure, paid for school construction,
    paid for paving roads, and assisted the communities in meeting
    their own waste management needs. Clearly, many other
    jurisdictions nationwide share New York's approach. Forty-two
    States import and 46 States and Washington, DC export municipal
    solid waste.
        For the city and the businesses it selects to handle its
    municipal solid waste disposal, certainty and the long-term
    security of waste management arrangements are fundamental to
    making New York a viable place to live and work.
        Senator Baucus. I have to ask you to wrap up, too, Ms.
    Allan.
        Ms. Allan. We cannot afford to disrupt those contracts and
    agreements, and we enthusiastically endorse host community
    agreements, but right now we use only sites that have host
    community agreements.
        Senator Baucus. Thank you very much.
        Mr. Parker.
        Senator Warner. Mr. Chairman, could I ask--I've got a group
    of students also that joined us today.
        Senator Baucus. Sure, absolutely.
        Senator Warner. They're standing in the back of the room.
    They have been selected as Virginia Leaders for the Right
    Choices. They are here to discuss with me today the risks
    linked with alcohol and drugs. Thank you for coming.
        Senator Baucus. Well, thank you. Thank you very much for
    attending.
        [Applause.]
        Mr. Parker.

       STATEMENT OF BRUCE PARKER, PRESIDENT AND CHIEF EXECUTIVE
          OFFICER, NATIONAL SOLID WASTE MANAGEMENT ASSOCIATION

        Mr. Parker. Mr. Chairman, Senators Warner, Voinovich, and
    Clinton, I appreciate the opportunity to be here today. My name
    is Bruce Parker, and I'm the president of the National Solid
    Waste Management Association. We represent all the private
    companies in the United States, large and small, that every day
    pick up and put down, recycle, and process and dispose of solid
    waste.
        Before I begin, Senator Warner, I wanted to carry on with
    your athletic metaphor. I guess I'm the blocker on the one yard
    line today. I think that the story that I have to tell
    represents my helmet and armor because I think it is a story
    that has never been or has not been as clearly articulated as
    the other side, and I am happy to do that today.
        The message I want to leave you with is very simple, and
    that is that borders have no legitimate role in managing solid
    waste or any commodity, for that matter, in interstate
    commerce. They make neither economic nor environmental sense.
    They are contrary to the trend toward bigger and better
    facilities, toward more innovative and flexible facilities. For
    these reasons, NSWMA and its members oppose on principle S.
    1194, and for that matter, any legislation that would authorize
    Congress to restrict, impede, or otherwise prevent the free
    transportation of garbage in interstate commerce.
        In spite of all the impassioned language that everybody has
    heard and the demonization of garbage moving in interstate
    commerce, the reality is quite simple. Every day--and if you
    look at that chart right there that we have prepared, if you
    would please--every day trash moves across State borders in a
    very extensive and intricate web of transactions, mostly
    between contiguous States, and also involving both imports and
    exports.
        As a matter of fact, out of all the waste generated in the
    United States that moves in interstate commerce, we are talking
    about 30 million tons, which only constitutes about 7 percent.
    We are only talking about less than 10 percent that is actually
    disposed of.
        According to the Congressional Research Service's latest
    update on its report on interstate commerce, 46 States exported
    garbage and 42 States imported garbage. Only one State neither
    imported or exported. Twenty-four States, the District of
    Columbia, and Ontario exported more than a thousand tons. At
    the same time, 28 States imported more than 100,000 tons. Ten
    States, ranging in size from Vermont to New York, exported more
    than 15 percent of their waste.
        Garbage, like recyclables or raw materials or finished
    products, doesn't pay any attention to artificial State
    restrictions, like cars or tomatoes, when it moves in
    interstate commerce. Let me just give you the broader context,
    if I may, why this has happened.
        The result of all this is clearly related to Federal and
    State environmental policy. In 1990, this country had 10,000
    landfills. Today we have less than 2,600. Why? Because Federal
    EPA and Congress, Congress particularly, promulgated the
    Resource Conservation and Recovery Act, subtitle D. That act
    basically put all the substandard landfills out of business.
    Between, I think, 1993 and 1998, 51 percent of the substandard
    landfills in all the States were closed down.
        States also required even more strict environmental
    standards because they have their right under RCRA to do that:
    financial assurance, double liners; you name it, and my members
    have complied with it. So environmental policy has dictated
    better environmental protection and protection of human health.
        Let me just talk a moment also about the fact of contiguous
    States. There are many communities that rely upon landfills not
    in their own State because they're more closely related to
    landfills in other States. Chicago is a perfect area. Illinois
    has abundant landfill, but the counties around Chicago, they
    can go north, they think, up to Illinois, and they can go south
    to Indiana. It makes more sense. They're going to good, state-
    of-the-art facilities.
        Last, host community agreements, some of the speakers have
    talked about those. There are many communities in every single
    State that takes out-of-state waste that look upon this as any
    type of industrial activity. It is an opportunity for jobs, and
    it is an opportunity for revenue.
        In the State of Virginia, the great State of Virginia, as a
    matter of fact, there are communities, poorer communities, that
    have relied on garbage coming in, environmentally well-suited
    landfills, to protect public health and the environment. Those
    monies pay for schools, for roads, for recreational facilities,
    as well as in Pennsylvania.
        I just testified yesterday in Cleveland about some
    comparable bills, and I will tell you that many of the public--
    I beg your pardon, in Lansing, MI; excuse me, Senator--many of
    the communities in Lansing, MI, the public communities are also
    accepting out-of-state waste as well as in other States.
        And I will end my remarks by just talking about flow
    control in one paragraph, if I may. In 1995----
        Senator Baucus. A short paragraph.
        Mr. Parker. Very short. I talk quickly. I'm from the East.
        [Laughter.]
        In 1995, the New York State Conference of Mayors and
    Municipal Officials testified in this very same room against
    flow control, stating that, ``Flow control adds unnecessary
    spending to a village or a city's bottom line,'' and giving
    examples of cities wasting money on county authority disposal
    schemes they had no control over.
        In 1997, Congressman Pascrell testified here against flow
    control, citing his experience as Mayor of Paterson, New
    Jersey, and the bipartisan opposition to it. One of those
    members was Jim McGreevy, then Mayor, who is the current
    Governor of New Jersey, of Wood-Ridge at that time. Pascrell
    testified that flow control ``allows governments to create
    monopolies which leads to costs sometimes up to an extra 40
    percent being dumped on consumers.'' And trust me, things have
    not changed. The more innovative communities that built
    facilities with flow control have found ways to lower taxes,
    lower costs, and be more efficient in doing it.
        Thank you, sir.
        Senator Baucus. Thank you very much, Mr. Parker. I will ask
    my first question of you.
        Of course, the legislation we are talking about doesn't
    prohibit a State from accepting garbage from another State,
    does it? It provides that a governor of a State can decide at
    its own discretion whether or not to accept. It would just seem
    to me that, given the discretion of a State whether or not,
    that that would encourage the exporting State to work out some
    agreement with the tentative importing State. So perhaps under
    some terms the importing State would say, ``Yes, that's a
    pretty good idea,'' listening to the concerns, say, of a host
    community.
        Of course, the host community should not--most people in
    the State decide the fate of so many other people in that
    State. There could be many, many people in the State who don't
    want that garbage to go through their town on the way to the
    host community. In addition, many States like to have some
    sense of their own economic development and plan it in some way
    themselves.
        Of course, what you are advocating would prohibit that. It
    would, in a sense, say that some outlier could come on in,
    irrespective of the State economic development plan, if a local
    community wanted to do something a bit different. Frankly, what
    it might do--that is, this legislation--is encourage States to
    spend more time with those local communities that want some
    economic development.
        So I just don't understand the argument that you're
    essentially making that States should not have the ability, at
    their own discretion, to say ``no'', which, as we know, in the
    practical world probably will mean sometimes ``no,'' sometimes,
    ``well, no, but--'' and some other arrangement. Whereas, on the
    alternative, when States have no authority to say ``no'',
    there's less incentive to work out an accommodation among
    States and among State governments along with their
    communities.
        I just don't understand at all why--the better approach is
    to try to work out these agreements, and that would happen with
    legislation that would give States discretion.
        Mr. Parker. May I answer that, sir?
        Senator Baucus. Absolutely.
        Mr. Parker. Thank you so much. The bills we are talking
    about, first of all, begin with a prohibition. There's a
    complete ban, and then there's exceptions to that ban.
        It is interesting because Mr. Hess, who is from
    Pennsylvania, testified today, as well as he did last August
    before the House, that he is for host community agreements. The
    problem with these bills is that what you see is not really
    what you get. There are so many exceptions. There's ratchets.
    There's caps. There's reopeners. Basically, companies who have
    relied upon contracts, who have relied upon the Commerce
    Clause, who have built these large facilities in response to
    environmental policy, would essentially be stripped down. So
    these bills are fatal in that regard. They really give you a
    lot less than what you get.
        Really, I'm sympathetic to this. I live in Scranton, PA, as
    I said. There are huge mega-landfills there. The trucks that
    Senator Specter talked about, I see those myself.
        But, you know, this is an equity question. It is not an
    environmental question. It is not a health question. It is not
    about trucks. There are other ways of dealing with those
    things.
        States right now, even if they allow garbage to come in, in
    their whole solid waste plan with giving permits and zoning
    requirements, and so forth and so on, there are less
    restrictive means of doing that than closing the----
        Senator Baucus. But you're avoiding my central question.
    The central question is: What's wrong, as a general rule, for
    States having the discretion to say ``no''? What's wrong with
    giving them discretion, not a prohibition, discretion? With all
    the attendant consequences that I mentioned earlier?
        Mr. Parker. For the same reason that the Constitution
    doesn't give Pennsylvania the discretion to keep cars made in
    Detroit out if they have a BMW factory in Pennsylvania.
        Senator Baucus. That's not right. That's not right.
    Congress could pass a law so stating, and it would be
    constitutional.
        Mr. Parker. That's true, but what's the difference? There's
    still a commodity of----
        Senator Baucus. There are many commodities that are
    regulated by the Commerce Clause, many, many, many commodities
    that transfer. We've got rails. We've got highways.
        Mr. Parker. With due respect, sir, I don't know of any
    prohibition of a commodity.
        Senator Baucus. Well, I'm just talking about, I haven't
    researched this, but I know that Congress many, many times
    affects interstate commerce by passing Federal legislation.
    This would be a way to affect interstate commerce in a way that
    allows States to have some control over their own destiny,
    whereas currently with respect to this commodity they
    effectively do not.
        All right, I am going to have to leave. Senator Warner,
    thank you very much for taking over.
        Senator Warner [presiding]. OK, I'll take over the chair.
        Senator Voinovich, by the early bird, you're next to the
    questioning.
        Senator Voinovich. Well, thank you, Mr. Chairman.
        I would like to know----
        Senator Warner. First, we ought to thank Senator Baucus for
    really conducting a good, vigorous, and thorough hearing on
    this, and Senator Jeffords.
        Senator Baucus. Thank you.
        Senator Voinovich. Mr. Anderson, because of the Carbone
    decision, you lost flow control, and as a result of that, you
    had to impose an additional tax on the people in your
    jurisdiction to satisfy the bondholders, is that correct?
        Mr. Anderson. That's correct, Senator.
        Senator Voinovich. How would this legislation impact upon
    you?
        Mr. Anderson. I guess the most helpful way to view this is
    kind of an analogy. We went out, SWACO went out and got a
    mortgage to build a house. We secured that mortgage based on
    our job----
        Senator Voinovich. Yes, I understand that, and then the
    people that were paying the mortgage disappeared on you, so you
    had to make up for it. The question is, if this passed, how
    would it help you currently? Would you be able to then regain
    flow control from the jurisdictions that you had?
        Mr. Anderson. What it would do would be to allow us to
    reduce the debt by exercising that grant of authority. It would
    also allow us at the same time to be able to continue the
    recycling programs that we carry out and reduce the tax burden
    on the residents in our community.
        Senator Voinovich. But the communities that were taken out
    of your flow control are now being serviced by probably some
    companies that Mr. Parker represents, right?
        Mr. Anderson. Yes, sir.
        Senator Voinovich. So what had happened, then, is those
    jurisdictions who are now with some other company that disposes
    of their garbage would then have to come into your
    jurisdiction, so that you could capture their tipping fees to
    help pay the bonds that they originally were supposed to pay?
        Mr. Anderson. Senator, I believe under S. 1194 if the
    private waste companies and those public entities entered into
    those contracts in good faith, the bill allows for those
    contractual relationships to continue until they terminate. At
    the time they terminate, then we would----
        Senator Voinovich. And at that stage of the game you would
    take over?
        Mr. Anderson. Yes.
        Senator Voinovich. OK. I just wanted to get that clear, so
    everyone understands.
        Ms. Allan, I like your name because my wife's maiden name
    was Allan, and there aren't too many A-L-L-A-Ns. There are a
    lot of A-L-L-E-Ns. So you must have some Scot background.
        Ms. Allan. I think I do.
        [Laughter.]
        Senator Voinovich. I would like, and you don't have to give
    this to me now, I would like to have a report on the number of
    landfills closed in the State of New York and the number of
    landfills opened in the State of New York. The reason I would
    like that is, it has been my impression over the years--and I
    have been dealing with this problem now since 1990. My first
    commercial, when I ran for the governorship, was how I was
    going to stop out-of-state waste coming into the State of Ohio.
    At that time I said that we were bringing in some bad stuff, at
    that time, oh, medical waste, and all of the people who were
    carrying it said, ``Oh, no, no.'' Well, about 2 months after my
    commercial ran, a truck tipped over in Lancaster, OH. It was
    just full of medical waste. It was from New Jersey, and I got a
    hold of Governor Florio at the time, and we entered into an
    agreement to stop that from happening.
        Anyhow, we have been at this a long time, but over the
    years my feeling has been that the State of New York has not
    really stepped up to the table as a State in dealing with their
    own garbage problem, and that it has been a lot easier for that
    problem to be hoisted off on Virginia, Ohio, Pennsylvania, and
    other States. I would be interested in the maintenance of
    effort. So I would like a report on that from you.
        Ms. Allan. Well, I will have to contact the State about
    that, and they will get back to you. That is a State issue.
        What I can say about the city is that in the first 6 months
    of fiscal year 2002, July 2001 to January 2002, New York City
    exported only .1 percent of its residential waste to Ohio. So
    New York City itself is not unduly burdening Ohio, I don't
    think. We've brought in a total of, an average of 9 tons a day
    and a total of 1,740 tons in that 8-month period.
        I would also like to say that the way New York City's
    process works, we contract with private companies to export the
    waste, and we have to take the lowest bidder. So we don't have
    any control over the destinations of the waste that the
    contractors are providing, except that we do a very extensive
    field interview, field inspection, integrity review of the
    landfill operators. We review the host community agreements. We
    review the permits. We review the environmental impact
    statements. We say to the vendors, ``You cannot take waste to
    this, that, or the other landfill because it's not up to the
    state-of-the-art.''
        But, apart from that, it is the contractors with whom we
    bid, with whom we contract, and we have to take the lowest bid.
    So the contractors decide whether they are going to take it to
    Ohio or to Pennsylvania or to Virginia. It is not the city of
    New York.
        Senator Voinovich. Yes, I understand that. I would like to
    make it clear to Mr. Parker and others that we allow States in
    my bill to freeze out-of-state waste at 1993 levels. This bill
    does not require an absolute ban on out-of-state waste. In
    fact, it has a limit on what the legislature can do. They have
    to at least allow that 20 percent of landfill can be from out-
    of-state. It does give some discretions to local communities,
    if they, indeed, want to go forward and have it, that they've
    got to get permission from the State.
        But the fact is, and you're right, Mr. Parker, it does go
    through a series of things, but this is not an outright ban on
    out-of-state waste. It basically is giving the States more of
    an opportunity to control something that is a valuable resource
    to the respective States. Communities, if you don't have to
    worry about your garbage problem and you just can continue to
    expand and expand and expand--it also deals with--it gets into
    the issue of competitiveness between one State and another.
    Landfill capacity becomes something very important. It is just
    like a community with water. If you don't have the water, you
    can't expand. if you don't have a way to dispose of your
    garbage, if you don't recycle it, then that has some limitation
    on your density and what you can do. It is a side of this thing
    that I think some people really don't recognize, but I sure do
    as a former governor interested in economic development and
    planned developments of areas of our State.
        Enough of my comments.
        Senator Warner. I would like to get a question or two.
        Senator Voinovich. Go ahead, Mr. Chairman, yes.
        Senator Warner. I have to tell you, I respect you, Ms.
    Allan, but I'm going to get a little tougher with you. Our
    research shows New York has done almost, the city has done
    almost nothing to try and build recycling plants. I was just
    told that one has been shut down for 18 months. Is that
    correct?
        Ms. Allan. Recycling plants?
        Senator Warner. Yes.
        Ms. Allan. Well, no, I don't think that's correct. The
    city, just like with our export, we contract with private
    companies----
        Senator Warner. Listen, I know you can skirt all these
    little laws with how you contract, but the fact of the matter
    is, what is the city doing or not doing to try and consume,
    either through recycling or to exporting somewhere within the
    State, some of its waste?
        Ms. Allan. Well, the city has a very extensive recycling
    program. In fact, it's got one of the best recycling programs
    in the country. We collect--and I had the tonnage, but we
    collect--last year we collected 425,000 tons of paper, which we
    sent to recyclers. They recycled it. The city was paid $5
    million. There is a market for recyclable paper. They make it
    into corrugated cardboard, and it is a viable recycling
    material.
        Senator Warner. That's fine.
        Ms. Allan. Now metal, glass, and plastic, New York, as you
    know, has a very strong bottle bill, so that the aluminum
    bottles and cans from carbonated beverages are removed from the
    waste stream before sanitation ever gets a hold of them.
        Senator Warner. Because there, again, there's a profit
    return on that, I would assume.
        Ms. Allan. Yes, that goes to the bottlers and to the
    individuals who return it.
        Senator Warner. Fine.
        Ms. Allan. But the remaining metal, glass, and plastic,
    which is unwashed applesauce jars and unwashed spaghetti jars
    and bottles of water, et cetera, make up approximately a
    thousand tons a day of the city's total waste stream, which is
    over 18,000 tons.
        Senator Warner. All right, well, let's just----
        Ms. Allan. We are putting an 18-month suspension on the
    collection of that because it is right now costing us $56
    million to collect 1,000 tons of metal, glass, and plastic.
    It's an infeasible program, and we have to improve it.
        Senator Warner. So you did close it down for 18 months?
        Ms. Allan. We are planning on suspending recycling of
    metal, glass, and plastic----
        Senator Warner. Because it is too expensive?
        Ms. Allan. Because it doesn't work.
        Senator Warner. Well, you said too expensive.
        Ms. Allan. Because there are no markets. Because Waste
    Management, which is----
        Senator Warner. All right.
        Ms. Allan [continuing]. Is one of our recyclers, has told
    us that they crush the glass and take it to landfills to use it
    for cover. That is not a market use of the glass.
        Senator Warner. Fine. Market is one thing. I'm talking
    about our State, which is the recipient of an enormous amount
    of your waste. It is simply cheaper for you to ship it to
    Virginia than to try and process it somewhere in the environs
    of New York City, is that correct? Bottom line?
        Ms. Allan. No, I don't think that's correct, sir, with all
    due respect. The studies that we have done of our recycling
    show that approximately 40 percent of what we recycle ends up
    as residue or garbage. That is being exported along with the
    rest of the garbage. It's not recyclable. It is not usable
    materials.
        As for what we send to Virginia, in the first 6 months of
    this year we sent 260,000 tons of waste to Virginia, which was
    only 13 percent of our waste stream, and which, in fact, if we
    took away a thousand tons a day, or added a thousand tons a
    day, it would not have a significant impact, considering that
    we send waste to about 25 or 30 landfills.
        Senator Warner. Well, you say 13 percent ``is only.'' I
    think that is a lot coming our way.
        What have you done by way of trying to find a landfill? Can
    you say that there's not a square mile of area in the State of
    New York which cannot be adopted for landfill purposes?
        Ms. Allan. No, I can't say that, sir, and I know that
    Commissioner Doherty has started talking to the State about
    siting a landfill in New York for New York City. Again, what
    kinds of facilities New York State has is a matter for the
    State. It is not a matter for the city. New York State is the
    one that permits its landfills and decides where they're going
    to be sited. New York City has no authority over the siting of
    landfills in New York State.
        Senator Warner. Fine, you can duck and run all you want,
    but there's a simple concept: You've got a very large State,
    and there's got to be areas in which landfills can be put, and
    put in a safe and environmentally-compatible way. This is
    simply a battle between the rich and the poor, and that's what
    it comes down to. Your State is a prosperous State. Your city
    is a very prosperous city, albeit suffering a frightful
    tragedy, but we're about to vote, I think it's today, on a
    supplemental to the Federal taxpayers who are trying to
    reimburse the city significantly for 9-11. I just put that down
    as an aside.
        But the fundamental thing, it is the rich versus poor. We
    do have some remote counties in our State which have resorted
    to taking in the waste to try to meet their financial needs.
    That's a fact. I am sure that if there were other ways to
    achieve their financial needs, they wouldn't do it. But this is
    a fact; they're taking it. And that's true in other
    jurisdictions.
        But it is cheaper for you to export than to try and, within
    your own State framework and Federal framework of environmental
    laws, either recycle or provide landfills, and no one can come
    in this hearing room and tell me to my satisfaction that there
    isn't a square mile of land somewhere in that great State which
    could be converted to landfill and begin to accept some of the
    waste, whether it is from the city or other parts of New York.
    It's a simple fact of the matter.
        Ms. Allan. Yes, sir, and if I could say one thing, the
    three landfills that our vendors, our contractors are using in
    Virginia, all three are state-of-the-art landfills, built with
    State permits, after full environmental impact statements, and
    with host community agreements, and with very stringent
    conditions that we comply with. So nothing in this bill about
    host community agreements and permitting would affect those
    landfills except for the State to be telling the locality,
    ``You can't take New York City's waste,'' and we consider that
    to be a problem with the Commerce Clause.
        Senator Warner. Well, fine. I recognize that you are
    working within the confines of existing laws. I and others are
    doing the very best we can to bring about some equity in that
    legal framework.
        But, Mr. Burnley, to you, clearly, they are working within
    the existing framework of law, but the State has no voice,
    almost no voice whatsoever in this interstate transportation of
    waste. And, as a consequence, the State is incurring expenses
    to manage these landfills--why don't you expand on that?--which
    you're paying out of the pockets of the State taxpayer.
        Mr. Burnley. That's true. Increased compliance efforts,
    there are more inspections. We are having to spend those very
    scarce resources that we have for environmental protection in
    places that we really would prefer not to.
        We are also having to clean up trucks, truck wrecks that
    are spilling garbage. We are having to spend a great deal of
    time and effort and money on trying to figure out a way to
    regulate barge traffic on the Chesapeake Bay that is going to
    be carrying garbage. All of those things, we could be using
    that time and those scarce resources for other environmental
    issues.
        Senator Warner. I have a great familiarity with the
    Chesapeake Bay, and having been the former Secretary of the
    Navy, I know of some accidents we have had in shipping in that
    area, serious ones. If one of those barges with the capacity
    of--what did you indicate?
        Mr. Burnley. Two hundred and fifty tractor-trailers.
        Senator Warner. Fine. If it were to be sunk, as a
    consequence of an accident in fog or other navigation
    probabilities, what kind of environmental problem would we be
    faced with?
        Mr. Burnley. Well, as you know, Senator, the Chesapeake Bay
    is already facing a lot of challenges already. You mentioned
    fish and shellfish and other water quality issues. That would
    obviously exacerbate those problems. Who knows what kind of
    efforts would be necessary to recover the garbage and what kind
    of environmental impacts it would have, but it would be
    significant.
        Senator Warner. Now I would be glad to allow any of the
    witnesses to respond to some of the points I made here today,
    if you want to expand on them. Anyone wish to be recognized for
    that purpose?
        Mr. Hess.
        Mr. Hess. Mr. Chairman, thank you. The issue of host
    community agreements has come up several times, and I think
    that is an important issue. In fact, we had in 1999 done a
    survey of our communities that are hosting various waste
    facilities. As a result of that survey, we found that 47 of
    those communities did not want in fact, to accept out-of-state
    waste. Ten of them did. I don't think anyone is saying we're
    going to close the door to waste imports. I think we have a
    regional responsibility.
        We shared that information with the Mayor's office at the
    time in New York City, and did not hear anything back. Some of
    those facilities were clearly getting waste from New York City,
    where they did not want that waste. I would welcome the
    opportunity to share that list and any other information with
    the representative here from New York City. We can do an
    accounting of what the host communities agreements do say.
        Senator Warner. Senator Voinovich, I must depart, and if
    you would just accept the chair, and continue this hearing. We
    thank all of you for coming, but this is a tough issue, and the
    battle is not over, folks.
        Senator Voinovich [presiding]. Thank you, Mr. Chairman.
        Mr. Hess, you had an opportunity to hear Mr. Parker's
    testimony. Would you like to comment on it? He makes a point
    that we have a lot of garbage flowing back and forth over State
    borders. I know in our State we have some garbage that flows
    out of Cincinnati over into Kentucky.
        What's your response to what Mr. Parker has to say in terms
    of why his organization is opposed to this?
        Mr. Hess. Well, I think, again, the numbers in our case
    speak for themselves. Forty-seven percent or so of the waste
    that's disposed in Pennsylvania comes from out-of-state,
    primarily from New York and New Jersey, but from 18 other
    States as well. I think it comes down to a fundamental issue of
    fairness and incentives for those States to develop facilities
    that can take care of waste there.
        We have never taken the position, all the way back to the
    late Governor Casey, of closing our borders. We recognize that
    there is a reasonable responsibility, but, frankly, being
    dumped on to that extent is not acceptable to Pennsylvania, has
    not been under Republican or Democratic governors.
        Senator Voinovich. So your theory is that, if we were able
    to get our legislation passed, that the legislation that I
    have, there's a lot of flexibility here. It basically says that
    communities that have approved it can continue to approve it,
    if they want to. It says that any expansions over since 1993
    would have to be approved by the local community. We say we can
    still provide 20 percent imports. So it gives you some
    flexibility.
        I think the most difficult thing in the legislation is
    that, if you want to build a brand-new landfill site, that
    there's got to be some need for that landfill site for the
    respective community. It can't be built like the one they
    wanted to build in Jefferson County, to bring in garbage that I
    think Waste Management wanted to bring in from Canada, and just
    basically said we're not going to become the garbage dump for
    Canada.
        Mr. Hess. I think, Senator, the host communities' wishes on
    these issues need to be heard. I think the one thing that I've
    heard in going to communities that have landfills is that they
    feel pretty powerless against the landfill operators. I think
    giving them a voice, giving them a choice, is something that
    would be a tremendous relief to those communities. Congress
    does have the authority to do that.
        Senator Voinovich. So it is your theory, or you have facts
    to back it up, that many of the landfills in your State that
    are taking in 47 percent of the garbage from out-of-state got
    permits and are receiving this waste, but the communities in
    which the waste is coming into are in opposition to it?
        Mr. Hess. Some of them have agreed, but there are others
    that have not. As I said, we would be glad to share that
    information with the city.
        Senator Voinovich. What would you say to those that have
    agreed to do it?
        Mr. Hess. That is really their choice. I think that is one
    of the main points that we're concerned about. They don't now
    have a choice of where their waste comes from. That can only be
    given by Congress through legislation like yours and Senator
    Specter's. That is something I think that is extremely
    important to them. Again, we would be happy to share that
    information with the city.
        Senator Voinovich. Do you see a--let's put it this way:
    Have you seen recently a large increase of out-of-state waste
    coming into your State?
        Mr. Hess. We have, if you look at the numbers. Again, since
    everyone began to talk about this in approximately 1989,
    Pennsylvania imported about 3.4 million tons of waste from
    other States. Right now, as I mention in my remarks, last year
    that was up to 12.6.
        Senator Voinovich. You're way above what we are taking in.
        Mr. Hess. This is one category where we don't want to be
    No. 1 any longer, Senator.
        Senator Voinovich. This would also put some pressure on
    some of the States to start to face up to the responsibility
    that they have to make more landfills available. That is why I
    am very interested to see, get the information from the State
    of New York about what they are doing in terms of handling
    their own problem.
        It is real easy if you've got a company that comes in, gets
    the contract, and they're low bidder, and no one has to worry
    about it except the State where the stuff is going. There ought
    to be some kind of requirement of maintenance of effort by
    States to handle their own garbage. Maybe we ought to look at
    that percentage that you've got to handle yourself before you
    are going to be able to shift it into somebody else's backyard.
        Well, I want to thank the witnesses very much for being
    here today. This will conclude the hearing.
        [Whereupon, at 11:40 a.m., the hearing was adjourned,
    subject to the call of the chair.]
        [Additional statements submitted for the record follow:]
        Statement of Hon. Bob Smith, U.S. Senator from the State of New
                                   Hampshire
        Mr. Chairman, thank you for holding this hearing today. Interstate
    waste and flow control are issues that have spanned the duration of
    almost five chairmen of this committee. With all that has happened in
    the past year or so, it is almost comforting that the more things
    change, the more they stay the same. In 1995, Senator John Chafee and I
    worked hard to pass an interstate waste/flow control bill. The House
    took a more free market approach and legislation was never signed into
    law. In hindsight, that may have been the right outcome, in particular
    as it relates to flow control.
        Because of the promise of flow control, facilities were sited on an
    unconstitutional premise that a local government could mandate a market
    for itself. In 1994, the Supreme Court affirmed the unconstitutionality
    of flow control in the Carbone decision. With this decision came a cry
    for help from the local communities who feared, absent flow control,
    they would be forced to default on bonds that had been issued to
    finance the construction of waste management facilities. We heard
    testimony to that effect in 1995. It is now 7 years later, flow control
    has still not been signed into law, and all of the talk of massive doom
    has not come to fruition. I do acknowledge that it has not been easy on
    many communities without the ability to exercise flow control
    authority, but no one ever said that competing in the free market was
    supposed to be easy. I do not believe that the Federal Government
    should be about mandating market streams, or allowing others to mandate
    a market stream where healthy competition already exists. We should be
    advocating open markets and consumer choice, not contracting and
    restricting. The need for flow control implies the inability to compete
    in a free market system--which means residents would be paying prices
    higher than they would otherwise be paying. It is, in essence, an added
    tax on top of paying for waste management services for anyone who lives
    within these jurisdictions. But when forced to compete, the majority of
    communities have risen to the occasion by charging competitive rates,
    streamlining operational costs and seeking alternative sources of
    revenues. I commend these communities for responding with innovation
    and good old American ingenuity. Now, if localities need to raise
    additional revenue, they can do so without compromising the free market
    mechanism. If localities want to impose a tax on their citizens, they
    should do so directly, rather than hiding it in Federal flow control
    legislation.
        With regard to interstate waste restrictions; this issue remains a
    complex divergence of open markets and States rights. Many States,
    including New Hampshire, both import and export significant amounts of
    waste. In 2000, my State exported 54,000 tons while importing 255,000
    tons. Towns across New Hampshire are uneasy with current and proposed
    imports. I understand their concerns and have worked to find a fair
    solution. First and foremost, we must be assured that ALL waste is
    being managed in an environmentally sound manner. We must seek
    creative, innovative and cooperative solutions to these issues without
    having to put artificial constraints on what is a free market. Absent
    legislation that is agreeable to all regions of the country, history
    has proven that having any legislation signed into law is almost an
    insurmountable task. As of yet, I am not convinced that any legislation
    before us contains the answer. I look forward to the testimony of our
    witnesses. Thank you.
                                   __________
        Statement of Hon. Carl D. Levin, U.S. Senator from the State of
                                    Michigan
        I am pleased to testify before this committee on this important
    legislation. The Senate has expressed its will on this issue over and
    over again by overwhelming votes. However, we have been unable to enact
    a law that would give states and local governments control over their
    own jurisdictions, and over their own land. In Michigan, my counties
    and townships have plans for waste disposal and have invested a lot of
    money to dispose of their waste locally. Those plans and those
    investments are disrupted when contracts are entered into without
    consideration by State, county, or local governments of the impact of
    those contracts.
        In Michigan, we are facing a totally unsustainable situation with
    regard to the importation of waste from other states and Canada. Waste
    received from states outside Michigan increased 16 percent in fiscal
    year 2001, while imports from Canada rose 40 percent. Over the past 2
    years, imports from Canada have risen 152 percent and now constitute
    about half of the imported waste received at Michigan landfills.
    Currently, approximately 1,300 truckloads of waste come in to Michigan
    each week from Canada. And this problem isn't going to get any better.
    These shipments of waste are expected to continue as Toronto and other
    Ontario sources phaseout local disposal sites. On December 4, 2001, the
    Toronto City Council voted 38-2 to approve a new solid waste disposal
    contract that would ship an additional 1.25 million tons of waste per
    year to the Carleton Farms landfill in Wayne County, Michigan,
    beginning in January 2003. In addition, two other Ontario communities
    that generate a combined 385,000 tons of waste annually have signed
    contracts to ship their waste to Carleton Farms.
        Based on current usage statistics, the Michigan Department of
    Environmental Quality estimates that Michigan has capacity for 15-17
    years of disposal in landfills. However, with the proposed dramatic
    increase in the importation of waste, this capacity is less than 10
    years. The Michigan Department of Environmental Quality estimates that,
    for every 5 years of disposal of Canadian waste at the current usage
    volume, Michigan is losing a full year of landfill capacity.
        The environmental impacts on landfills, including groundwater
    contamination, noise pollution and foul odors, are exacerbated by the
    significant increase in the use of our landfills from sources outside
    of Michigan. Congressional inaction is harming our constituents who are
    powerless to do anything about this.
        The EPA has stated that our lack of domestic laws in this area
    hinders international efforts to control shipments of Canadian
    municipal waste into Michigan. This legislation would resolve this
    problem by giving control to the states to determine whether or not
    they want to accept out-of-state waste.
        I am pleased that the Senate Environment and Public Works Committee
    has hearings planned on this issue and I look forward to working with
    my colleagues on both sides of the aisle to get this important
    legislation passed and signed into law.
                                   __________
     Statement of Hon. Steve Buyer, U.S. Representative from the State of
                                    Indiana
        Mr. Chairman. I am very grateful that this committee is holding a
    hearing today on the troublesome issue of interstate waste shipments.
        Small towns in my home State of Indiana and other similar states
    have been overtaken by thousands of tractor trailers, loaded with out-
    of-state municipal waste. In 1998 almost 2.2 million tons of out-of-
    state municipal solid waste was disposed at facilities within Indiana,
    mostly landfills. Most of those landfills are in my congressional
    district. Those 2.2 million tons represented 30 percent of the total
    amount of waste disposed in Indiana's landfills.
        While 1998 was a peak year for Indiana, the level of out-of-state
    trash coming into Indiana from States that refuse to deal with their
    own trash is still unacceptably high.
        Indiana has accepted the responsibility to address the disposal
    needs for trash generated in Indiana. The State has 61 solid waste
    management districts to address our own waste. Indiana currently has 17
    years of in-State capacity based on current disposal rates. However,
    the threat of unlimited quantities of out-of-state trash could quickly
    undo the good that the State of Indiana and its citizens have planned.
    The primary goal for Indiana is to protect our State's disposal
    capacity and our natural resources and environment. It is impossible
    for the State and local communities to plan if it can be undone by
    unlimited, uncontrolled out-of-State trash.
        Imported trash creates environmental problems, safety problems, and
    community development difficulties. States should have some ability to
    address these needs without running afoul of the Commerce clause. That
    is why I have cosponsored H.R. 1213, the Solid Waste Interstate
    Transportation Act.'' This bill would give the State of Indiana the
    tools it needs to ensure that its environment is not despoiled by the
    actions of other States that are not so responsible. This idea is not
    new. The House passed similar legislation in the 103rd Congress by an
    overwhelming vote. The Senate has passed similar legislation as well.
        I urge this committee to move forward to give States the necessary
    tools to protect their environments and their communities.
                                   __________
       Statement of Robert G. Burnley, Director, Virginia Department of
                             Environmental Quality
                                  introduction
        Good morning Mr. Chairman and members of the committee. I am Bob
    Burnley, Director of Virginia's Department of Environmental Quality. I
    appreciate the opportunity to speak to you about Virginia's concerns
    about interstate waste.
        solid waste management and interstate waste disposal in virginia
        Governor Warner and I are concerned about interstate waste because
    landfills consume open space and threaten the quality of our
    environment. While every state has a responsibility to ensure adequate
    and safe waste disposal capacity for its citizens, Virginia should not
    be forced to assume these long-term costs and increased risks for other
    states. We should not have our hands tied as we attempt to protect
    ourselves from the onslaught of garbage from other states.
        Virginia is second in the Nation in the amount of out-of-state
    waste received. Over the last decade, the amount of out-of-state waste
    imported to Virginia has more than doubled. In 2000, Virginia imported
    4.5 million tons of solid waste. This represents more than 20 percent
    of Virginia's total waste stream.
        Landfill permits consume approximately 10,000 acres in Virginia.
    This capacity will last until 2014 if disposal volumes remain constant.
    If, however, Virginia is not able to cap the flow of waste from other
    states, we may be forced to provide additional landfill space at a much
    earlier date.
        The U.S. EPA acknowledges that, despite our best technology, all
    landfills will leak eventually. Virginia has enacted very stringent
    requirements for the siting, monitoring and operation of its landfills,
    more stringent than those established by EPA. Despite our best efforts
    to protect Virginia's environment, however, we do not know what will
    happen 20 or 30 years from now. Common sense tells us that the larger
    the landfill and the more waste we are forced to accept, the greater
    the risks of ground water contamination and other pollution.
        Unfortunately, Virginia has already suffered the consequences of
    uncontrolled shipment of out-of-state waste. The Kim-Stan Landfill in
    western Virginia was originally operated as a local landfill but was
    later purchased by private interests. In the subsequent months they
    began importing waste from other states, increasing the volume
    significantly. Hundreds of tractor-trailers filled with trash traveled
    the back roads of rural Allegheny County each day. The owners soon
    filed bankruptcy and the landfill is now a Superfund site. The
    Commonwealth has already expended millions of its taxpayer dollars to
    investigate and contain the contamination; neither the generators nor
    the generating state have borne any of these costs. We hope our
    enhanced landfill regulations will prevent this type of environmental
    catastrophe from happening in the future, but the fact remains that no
    one is certain that current landfill designs are adequate to provide
    long-term environmental protection.
        Another concern is our inability to enforce against generators who
    send their waste to Virginia facilities. Virginia prohibits certain
    types of waste from its landfills that are allowed in the municipal
    solid waste streams of other states. Without the ability to limit
    imports from these states, Virginia is forced to expend more of its
    state-funded compliance resources at landfills accepting wastes from
    other states. When violations are found, however, we have no authority
    to pursue enforcement against the source of the waste if they are
    outside Virginia.
        In 1998 and 1999, DEQ found illegal wastes in loads of trash coming
    from New York City. In the resulting litigation, the Virginia State
    Courts found that it would be impossible for a New York City transfer
    station to adequately screen the trash to prevent these banned wastes
    from making their way to Virginia's landfills unless the volumes were
    significantly curtailed. The Federal courts, however, have prevented us
    from imposing any limits or caps on the disposal of these wastes
    because it would violate the Commerce Clause of the Constitution.
        Every day, trains filled with garbage travel Virginia's railways,
    many parking along the way while they wait their turn at the landfill.
    Tractor trailers filled with garbage work their way through the crowded
    interstate system and across rural Virginia. At least one of Virginia's
    landfill operators plans to use barges to import garbage. Each barge
    will bring approximately 250 tractor-trailer loads of trash across the
    Chesapeake Bay and up the James River. Virginia has tried to protect
    itself by imposing disposal caps, regulating large trash trucks, and
    imposing restrictions on trash barges; but the Federal courts have
    blocked these efforts.
                                virginia's goals
        The Commonwealth seeks the authority to control how our natural
    resources are consumed and protect the long-term welfare of our
    citizens. In order to do this, we are asking Congress to grant states
    the ability to control the importation of garbage. This authority
    should be simple and flexible enough to meet the needs of all states,
    without basing it upon the solid waste management system of one
    particular state.
        For example, some of the legislation being considered would
    authorize states to cap waste imports at 1993 levels. Virginia first
    collected verifiable information on waste imports in 1998. The
    Department of Environmental Quality has been working with Senator
    Warner and other members to identify these concerns and I hope that we
    will be able to address them before any action is taken.
        I applaud the committee for continuing its efforts to address this
    issue. Thank you for the opportunity to present Virginia's concerns
    about interstate waste disposal. I would be happy to work with you and
    your staff to move such legislation forward. This concludes my prepared
    remarks, and I will be happy to answer any questions.
                                   __________
       Statement of David E. Hess, Secretary, Pennsylvania Department of
                            Environmental Protection
        Chairman Jeffords, Senator Smith, members of the committee my name
    is David Hess, and I am the Secretary of Pennsylvania's Department of
    Environmental Protection. I am here today on behalf of Governor Mark
    Schweiker to talk to you about an issue of great importance to the
    Commonwealth of Pennsylvania--interstate waste.
        Pennsylvanians have been struggling with this issue for more than a
    decade. In 1988, we faced a garbage crisis with only 18 months of total
    disposal capacity to the present with an ever increasing flood of waste
    from outside our borders almost doubling the millions of tons of
    garbage disposed of in our state every year. We solved our problem by
    building a statewide waste management infrastructure through a
    Commonwealth-wide recycling program and sound, scientifically based
    landfill standards.
        Just a quick glance at our waste management statistics underscores
    our concern. Disposal figures in 2001 indicate that 26.6 million tons
    of waste was disposed in Pennsylvania waste facilities. Of this, nearly
    half--12.6 million tons or 47.3--percent was imported from at least 20
    states.
        Over the past 7 years, Governor Ridge, Governor Schweiker, previous
    DEP Secretary Jim Seif and I visited many Members of Congress to urge
    you to resolve this issue. Our message has been simple and consistent--
    pass Federal legislation giving communities a voice in deciding whether
    trash from other states should be disposed of in their communities.
        As long as states can export unlimited quantities of trash to their
    neighbors, there is no incentive to deal with this reality by creating
    their own waste management infrastructure.
        For a number of years, states have attempted to regulate the
    movement of waste across their borders, only to be denied that right by
    the courts.
        Earlier this month, the U.S. Supreme Court refused to review the
    lower court decision that the Commonwealth of Virginia's solid waste
    laws regulating out-of-state waste unduly interfered with interstate
    commerce.
        This most recent court action underscores the need for Congress to
    act on this issue and provide states with the ability to manage the
    importation of municipal waste from other states.
        Our resolve in finding a regional solution to our waste issues
    remains unchanged, but Federal legislation remains the only key to
    reducing unwanted trash imports.
        The people of Pennsylvania are asking Congress to give them a voice
    in deciding whether trash from other states should come to their
    communities for disposal. We are not seeking to build a fence around
    our borders to turn back every waste truck, or to turn our backs on the
    legitimate needs of our neighbors. We are not asking for Federal money.
    We are simply asking the Congress to give the states the authority to
    place reasonable limits on unwanted municipal waste imports in a
    planned, balanced and predictable manner.
        Specifically, Pennsylvania is seeking Federal legislation that
    gives us some basic tools:
        1. Give Pennsylvania's communities the ability to allow the
    disposal of imported waste through host community agreements, which
    would address concerns such as operating hours, truck traffic, noise
    and litter before permits are issued;
        2. Impose a freeze on waste imports immediately, with a predictable
    schedule for reducing imports over time;
        3. Allow states to impose a percentage cap on the amount of
    imported waste that a new facility could receive; and
        4. Allow states to consider in-state capacity as part of the
    permitting process.
        In numerous decisions dating back to 1978, the U.S. Supreme Court
    has ruled that the transportation and disposal of municipal waste is
    interstate commerce, protected by the Constitution, and that states do
    not have the authority to limit the flow of waste across state lines,
    until Congress grants them that authority.
        There have been a number of legislative efforts that squarely
    address the interstate waste commerce question and present a fair and
    equitable solution to both importing as well as exporting states.
        Legislation introduced by Senator Specter (S. 1194--June 18, 2001)
    and a similar bill by Congressman Greenwood (HR 1213--March 27, 2001)
    incorporate similar provisions that Pennsylvania supports. We have also
    supported legislation sponsored by Senators Voinovich and Bayh, and
    have worked in the past with Senator Warner and former Senator Robb.
        While we wait for Congressional action, Pennsylvania has moved
    forward in our efforts to strive for cleaner, safer communities, and
    environmentally educated citizens.
        Pennsylvania has created a world-class recycling program that
    serves over 10 million residents in over 1,485 communities, and has
    resulted in Pennsylvanians recycling over 32 percent of all waste they
    generated, diverting one-third of our trash from disposal.
        In 1988, we recycled 167,000 tons of materials. Today, we recycle
    more than 3.4 million tons--more than twenty times as much! Recycling
    diverts materials destined for disposal, and at the same time, provides
    jobs and infuses over $20 billion annually into Pennsylvania's economy.
    There are currently more than 3,200 recycling and reuse businesses in
    the Commonwealth, which employ more than 81,000 people. And the lessons
    we've learned on environmental responsibility are invaluable.
        Materials that were once considered unusable and unrecyclable are
    building better and safer roads. We have begun pilot projects that
    incorporate the use of recycled plastics in 'plasphalt', glass cullet
    for pipe backfill along roadways, and shredded tires as light weight
    fill in highway bridge approaches.
        Playgrounds and recreational trails are constructed from discarded
    tires from waste tire piles that at one time blighted Pennsylvania's
    landscape.
        Composting of household organic waste diverts 21 percent of food
    waste and other organic material from the municipal waste stream adding
    up to 2.2 million tons annually.
        And we have 12 years of permitted disposal capacity to continue to
    meet the waste disposal needs of the Commonwealth using the nation's
    toughest environmental standards.
        We don't back down from our responsibilities. We know what the
    responsible thing to do is and we do it. However, the same cannot
    always be said of our neighbors.
        Recently in his proposed budget, Mayor Michael Bloomberg of New
    York City announced the 18-month suspension of metal, glass and plastic
    recycling programs. Although their proposal is expected to save the
    city an estimated $57 million, the real costs are assumed by other
    states like Pennsylvania. Clearly, if this proposal is passed,
    Pennsylvania will receive even more waste.
        We sincerely hope the city of New York recognizes the hard work we
    have done in Pennsylvania to make our recycling program one of the best
    in the nation, and rejects any proposal aimed at lessening their
    environmental responsibilities at the costs of others. We have reason
    to believe that they will and that they will continue their commitment
    to waste reduction and recycling.
        The city plans to make recommendations to Governor Pataki and the
    New York legislature regarding ways to reduce waste exports and the
    siting of new landfills outside of New York City. We are committed to
    being a good neighbor as demonstrated by our partnership with New
    York's city and state officials in managing waste and demolition debris
    disposal in the wake of the tragic events of September 11th.
        In addressing Pennsylvania's waste capacity issues responsibly,
    Governor Schweiker has initiated and supported legislation introduced
    in the General Assembly that proposes a landfill moratorium on new
    permits, limits landfill capacity, and supports host community
    agreements that address concerns such as landfill operating hours,
    truck traffic, noise and litter.
        Trash truck safety is an important component of the overall waste
    importation dilemma. The increase in truck traffic due to the
    transportation of waste over state lines has resulted in more traffic
    accidents, roadside littering, leaking loads and wear-and-tear on our
    highways. Trucks hauling trash make over 600,000 trips a year in
    Pennsylvania alone.
        New tough truck safety legislation has also been introduced that
    will establish a comprehensive authorization program for waste hauling
    vehicles that operate in Pennsylvania. A complete review of the
    transporter's compliance history will also be required, before a
    written authorization is issued. The bill also establishes civil and
    criminal penalties for persons who violate the provisions of the
    written authorization and continue to have environmental and safety
    violations.
        In an unprecedented effort to reduce the high rate of safety and
    environmental violations of trash haulers, our agency, in conjunction
    with PennDOT and the PA State Police, launched ``Operation Clean
    Sweep''--surprise trash truck inspections at every landfill and major
    incinerator in the state for 8 days straight during May 2001. Over 500
    inspectors from all three agencies participated.
        ``Operation Clean Sweep'' identified hundreds of unsafe trash
    trucks--86 percent of the trash trucks had safety violations and more
    than one-third of the trucks were removed from service as unsafe
    vehicles. During ``Operation Clean Sweep'' we inspected more than
    40,000 trucks, which resulted in over 11,000 safety and environmental
    violations issued.
        Our democracy is built on the foundation of empowering people to
    make choices. It is also built on fairness.
        The citizens of the Commonwealth of Pennsylvania are asking
    Congress for a fair and equitable opportunity to make responsible
    decisions with regard to waste entering our communities from out of
    state--this missing piece of legislative authority will allow us to
    better manage and control almost half of the waste disposed of in our
    state.
        Senators, you have the power to provide that missing piece.
    Pennsylvania has toiled over the past 14 years to provide a
    comprehensive and accountable waste management system to manage the
    wastes our citizens generate. We have developed successful programs to
    reduce the amount of waste that needs to be managed and permitted
    landfill capacity to deal with the remainder. My agency has worked
    diligently to ensure the waste industry improves its compliance and
    safety records. The Pennsylvania General Assembly has worked to develop
    equitable solutions for transportation safety and host community
    protections. Your help will result in a complete approach to managing
    waste rather then a partial solution Pennsylvania's efforts alone would
    deliver.
        Pennsylvania looks forward to a positive response from Congress and
    stands ready to work with you on developing legislation that will
    assure equitable, cost effective and reliable waste disposal for all
    communities.
                                   __________
        Statement of Harold J. Anderson III, Chief Counsel, Solid Waste
                           Authority of Central Ohio
        Chairman Jeffords and members of the committee:
        My name is Harold Anderson and I am Chief Counsel of the Solid
    Waste Authority of Central Ohio (``SWACO''). I am testifying on behalf
    of SWACO and the Local Government Coalition for Environmentally Sound
    Municipal Solid Waste Management (``Coalition''), a joint effort by a
    number of cities, counties, solid waste management authorities and
    related associations concerned with municipal solid waste flow control,
    interstate waste transportation and other municipal solid waste issues.
        We commend you, Chairman Jeffords, for holding this hearing, and
    for allowing the long-standing issues of interstate waste and flow
    control to again be brought before the committee. We also thank Senator
    Voinovich for a very similar bill that we understand is expected to be
    introduced in the near future. And last, but certainly not least, we
    also want to extend sincere appreciation to Senator Specter for
    sponsoring S. 1194, as well Senators Wyden, Warner, Stabenow and
    Santorum for their co-sponsorship of the bill.
                                   background
        My testimony will briefly address flow control and interstate waste
    transportation. Before turning to those points, first let me tell you
    about SWACO. We are among the ten largest public waste management
    authorities in America. SWACO strongly embraces recycling and other
    environmentally friendly programs. In fact, SWACO recently took over
    the recycling program for the 700,000 residents of the city of
    Columbus. SWACO strongly embraces partnerships with the private sector.
    Our public landfill is operated by Waste Management, Inc.
        Our Coalition supports S. 1194. The bill would protect stranded
    investment by providing limited grandfather authority for the use of
    ``flow control.'' These are investments that many communities and other
    public bodies made in direct response to Federal mandates arising under
    the Resource Conservation and Recovery Act and parallel state laws that
    give local governments primary responsibility to assure adequate long-
    term capacity to manage in an environmentally sound manner all of the
    municipal solid waste generated within their respective jurisdictions.
        ``Flow control'' is a mechanism that allows local governments to
    meet that obligation in a fiscally responsible manner. As the term
    implies, a local government will ``control the flow'' of municipal
    solid waste by selecting--and designating by ordinance--a specific
    facility (or set of facilities) for municipal solid waste processing,
    disposal, etc.
        Providing that capacity or infrastructure will often require
    significant financial commitments which are, in turn, secured through
    revenue bonds and similar flow control-dependent financial
    arrangements. In fact, since 1980 over $20 billion in state and local
    bonds have been issued in reliance on flow control authority for the
    construction of solid waste facilities.
        Unfortunately, in the Carbone case the Supreme Court ruled that the
    flow control ordinance at issue in the case violated the Commerce
    Clause. I should hasten to note that prior to Carbone flow control had
    repeatedly been validated by Federal court decisions spanning more than
    two decades from the 1970's into the 1990's, and statutes in more than
    20 states authorized local governments to employ flow control. In fact,
    in previous hearings before this committee, Moody's Investors Service,
    Inc., testified, and I quote, that ``[p]rior to the Carbone decision,
    Moody's viewed the state and local flow control laws and ordinances as
    valid, binding and enforceable.''
                       the impact of the carbone decision
        The consequences confronting communities throughout the Nation due
    to the loss of flow control authority and the absence of Federal
    legislation such as S. 1194 include steep declines in waste deliveries
    and resulting bond downgrades, increased taxes to offset declines in
    tipping fee revenue, termination of recycling and other environmentally
    essential programs, employee layoffs and terminations, depletion of
    cash reserves, and ever-increasing upward pressure on tipping fees as
    the unavoidable fixed cost burden of waste management infrastructure is
    shared by fewer and fewer users.
        My agency, SWACO, is a case in point. We have over $150 million of
    stranded investment in a waste-to-energy facility that was closed on
    the heels of the Carbone decision. After the Carbone ruling we laid off
    250 employees and had to impose a $7 per ton fee--a waste tax--on all
    municipal solid waste generated in Franklin County. We had to take that
    action to generate sufficient revenue to meet our debt obligations in
    the absence of flow control authority.
        In terms of the bond downgrades that I mentioned a moment ago, the
    principal rating agencies, Moody's and Standard and Poor's, have
    downgraded a considerable number of bonds (at least 22), and the total
    outstanding solid waste debt for public agencies that has been
    downgraded or placed on credit watch for potential downgrading since
    Carbone is estimated at over $3.5 billion.
        Compounding these difficulties is the spillover effect for other
    public investment needs. Specifically, when a flow control-reliant
    community goes to the bond market to finance essential needs such as
    schools, roads, public safety facilities, wastewater treatment plants,
    etc., the interest rate that it must pay is likely to be higher due to
    the instability that results from the absence of Federal flow control
    legislation. Those additional costs are ultimately borne by the local
    taxpayers.
        I must also emphasize that we have not defaulted on our bonds and,
    like many other local governments, we have made significant financial
    sacrifices to meet our obligations. Along with other communities and
    public bodies, we will continue to do everything within our ability to
    avoid the truly debilitating impact of a bond default.
        Unfortunately, the absence of such a default has led some to
    suggest that we ``do not need'' flow control legislation. That
    suggestion would be correct if--and only if--one also concludes (which
    we do not) that the better approach is to increase local taxes to meet
    financial obligations undertaken a number of years ago in good faith
    reliance on flow control authority. Aside from its unfairness, that
    position would contradict Federal policy announced more than a decade
    ago to discourage use of general taxes to fund solid waste management.
    And surely no one would seriously suggest that flow control-reliant
    communities must endure an Orange County-type default to justify
    congressional action.
           s. 1194 provides narrow protection for stranded investment
        S. 1194 is narrow legislation that protects reliance interests. The
    bill provides ``grandfather'' authority for use of flow control by
    communities with stranded investment (or contractual obligations)
    undertaken in reliance on the previous availability of flow control. In
    that regard, just as stranded cost protection for a utility recognizes
    that industry restructuring ``changed the rules of the game'' in terms
    of a utility's ability to recover various prudently incurred
    investments from the past, the Carbone decision ``changed the rules''
    for local governments that had previously relied on flow control to
    secure their investments in the waste management infrastructure needed
    to serve their communities.
        The authority provided by S. 1194 is also self-limiting. By that I
    mean it is confined to recovery of a narrow list of expenses for waste
    disposal and recycling facilities (e.g., principal and interest on
    bonds and ``put or pay'' contract obligations). As a result, the flow
    control authority provided by S. 1194 will only be used where necessary
    and only for as long as necessary.
        In addition, the bill protects the interests of non-flow controlled
    facilities by making the exercise of flow control subordinate to post-
    1994 contractual relationships that would be impaired by the exercise
    of flow control.
        Finally, the bill contains a firm ``sunset'' provision that limits
    its protection (i) to investments and contractual obligations
    undertaken in 1994 or earlier and (ii) only for the duration of such
    investments or obligations as they stood in 1994. Put another way,
    under this legislation, flow control authority can be re-instituted
    only for communities that had relied on flow control before May 1994,
    and once pre-Carbone obligations are satisfied a community's authority
    under the bill terminates.
        flow control is not anti-competitive or anti-private enterprise
        It should also be emphasized that flow control is not anti-
    competitive or anti-private enterprise. In considering this point it is
    important to bear in mind that the tipping fees--user fees--charged for
    municipal solid waste management services in communities that rely on
    flow control are limited to recovering the costs of those services
    (recycling, household hazardous waste collection, composting, public
    education, etc.). Moreover, communities that rely on flow control also
    rely to the maximum extent possible on private enterprise for their
    waste management infrastructure. SWACO and the other members of the
    Coalition submitting this statement are a case in point. The clear
    majority of the recycling/waste management facilities with respect to
    which our members would exercise flow control authority are privately
    owned and/or operated.
     flow control does not increase the overall cost for waste management
                                    services
        Nor does flow control increase prices or result in the imposition
    of higher costs for a given category of service. The local governments
    that have relied on flow control adhere to competitive bidding
    requirements that make cost a prime consideration in selecting among
    alternative waste management facilities or vendors. Tipping fees in
    communities that rely on flow control will almost always recover, in
    addition to the cost to dispose of non-recyclable waste, the costs of
    other essential services such as recycling, household hazardous waste
    collection, etc. Nevertheless, U.S.EPA concluded in its post-Carbone
    report to Congress on flow control that when the tipping fees paid in
    those communities are broken down into their component parts, the
    resulting prices are comparable to those for non-flow controlled
    facilities.
                        interstate waste transportation
        Finally, I also want to commend your bills, Senators Specter and
    Voinovich, for addressing the issue of interstate waste transportation.
    SWACO strongly supports legislation that will provide communities with
    appropriate means to husband the finite natural resources and waste
    management capacity in their states and facilitate more effective local
    planning for waste management needs. We believe that host community
    agreements play a fundamental role in this matter and want to make sure
    that our communities have appropriate control over waste imports from
    other states. In the long run, this will benefit both importing and
    exporting states by increasing the importance of waste reduction and
    minimization programs and encouraging comprehensive planning by state
    and local governments.
        The interstate waste transportation legislation before this
    committee addresses a serious national problem. Ohio is a case in
    point. Communities across our state have serious concerns with trash
    from outside Ohio being disposed in our state. This local concern has
    resulted in a large number of bills being introduced in Ohio's
    Statehouse ranging from moratoriums on landfill construction to
    commissions to study the issue. Each of these bills, while well
    intentioned, are bad public policy that will increase the cost for
    taxpayers while doing nothing to help the environment.
        SWACO is part of a coalition of public and private waste companies
    and business customers that advocate against these bills in the Ohio
    Statehouse. Our message to members of the Ohio General Assembly is
    simple: the concerns of local communities regarding out of state waste
    needs to be resolved in the Congress and not the Statehouse.
        In conclusion, I certainly appreciate the opportunity to appear
    before the committee this morning, and I sincerely hope we can finally
    resolve these issues. We stand ready to help.
        Thank you.
                                     ______

    Responses by Harold Anderson to Additional Questions from Senator Smith
        Question 1. In your testimony, you state: ``These are investments
    that many communities . . . and other public bodies [made] in direct
    response to Federal mandates arising under (RCRA) and parallel states
    laws that give localities primary responsibility to assure adequate
    longterm capacity to manage in an environmentally sound manner all of
    the (msw) generated within their respective jurisdictions.'' Could you
    please note the citation in RCRA, or any other Federal statute, where
    there is an expressed mandate on localities to assure long-term
    capacity to manage msw generated within any local jurisdiction?
        Response. Section 1002(a)(4) of RCRA, 42 U.S.C. Sec. 6901(a)(4),
    states that ``the collection and disposal of solid wastes continue to
    be primarily the function of State, regional, and local agencies.'' In
    furtherance of that policy, sections 4002 and 4003 of RCRA, 42 U.S.C.
    Sec. Sec. 6942 and 6943, prescribe detailed state and local
    responsibilities for solid waste management planning. In fact, such
    planning is one of RCRA's principal objectives. See 42 U.S.C.
    Sec. 6902(a)(1) (``The objectives of this chapter are to promote the
    protection of health and the environment and to conserve valuable
    material and energy resources by providing technical and financial
    assistance to State and local governments and interstate agencies for
    the development of solid waste management plans''). One of RCRA's
    planning priorities is, in turn, assurance of adequate capacity to meet
    the affected communities' ``present and reasonably anticipated future
    needs.'' Id., Sec. Sec. 6941, 6942(b).
        Referring to these same statutory provisions, the U.S.
    Environmental Protection Agency has emphasized that RCRA ``places great
    emphasis on State, regional, and local planning and contains numerous
    provisions concerning the scope and content of State plans.'' Report to
    Congress on Flow Control and Municipal Solid Waste, EPA 530-R-95-009
    (March 1995, at 1-2) (cited below as ``Report to Congress on Flow
    Control''). As EPA explains, to satisfy RCRA's criteria, ``State plans
    must provide for adequate recycling and disposal capacity and must
    address [waste management] facility planning and development.'' Id. at
    1-3; see also, Congress of the United States, Office of Technology
    Assessment, Facing America's Trash: What Next For Municipal Solid
    Waste? 340, 348 (enactment of RCRA ``was a clear movement toward more
    direct Federal involvement in solid waste management;'' ``[t]o plan an
    effective MSW strategy, the responsible political jurisdiction needs to
    be able to predict the approximate amount of MSW to be handled and
    provide sufficient capacity'').

        Question 2. How many communities have had to default on bonds due
    specifically to the absence of flow control authority? Please list
    these communities.
        Response. Mr. Anderson's testimony did not suggest that any
    community defaulted on solid waste bonds due to the absence of flow
    control authority. To the contrary, Mr. Anderson (at pp. 3-4) referred
    to his own solid waste management agency, the Solid Waste Authority of
    Central Ohio (SWACO), and

            emphasize[d] that we [SWACO] have not defaulted on our bonds
            and, like many other local governments, we have made
            significant financial sacrifices to meet our obligations. Along
            with other communities and public bodies, we will continue to
            do everything within our ability to avoid the truly
            debilitating impact of a bond default.

        We are not aware of any bond payment defaults, although there have
    been (and continue to be) various technical defaults on bonds, that is,
    violations of bond indenture requirements for minimum reserves
    sufficient to meet near-term bond payment obligations and other
    standard requirements for the protection of bondholders. Communities in
    the latter category include several in New Jersey, such as the
    Pollution Control Financing Authority of Camden County, the Passaic
    County Utilities Authority and the Atlantic County Utilities Authority.
    To avoid the certainty of payment defaults for a number of New Jersey
    communities, the state has diverted over the past several years more
    than $200,000,000 of tax revenue to support pre-Carbone public debt
    obligations undertaken in direct reliance on the availability of flow
    control authority. New Jersey noted this point in a recent brief filed
    with the Supreme Court: ``over $200,000,000 has already been expended
    from the [New Jersey] State Treasury to prevent defaults on public debt
    obligations'' due to the loss of flow control authority. See Brief of
    Amicus Curiae State of New Jersey at 2, United Haulers Association, et
    al. v. Oneida-Herkimer Solid Waste Management Authority, et al. (brief
    filed December 7, 2001), Supreme Court of the United States (No. 01-
    686).

        Question 3. Has the absence of flow control reduced tipping fees?
        Response. While reducing tipping fees is one of the responses that
    communities have pursued to cope with the loss of flow control
    authority, such reductions have typically been accompanied by a number
    of austerity measures. The latter have included, to mention a few
    examples, cancellation of recycling and other environmentally essential
    programs, employee layoffs and terminations and depletion of cash
    reserves (these impacts and others in more than fifty communities
    across the Nation are detailed in the record of previous hearings
    before the Environment and Public Works Committee). See Hearing on
    Transportation and Flow Control of Solid Waste Before the Senate
    Committee on Environment and Public Works, 105th Cong. 77-80 (1997)
    (statement of Randy Johnson, Chair, Board of County Commissioners,
    Hennepin County, Minnesota). But these austerity measures do not solve
    the financial difficulties that have resulted from the loss of flow
    control authority. That is because many of the financial obligations
    that communities undertook in reliance on the previous availability of
    flow control are fixed obligations that cannot be avoided or reduced.
    That has meant increased taxes or diverting taxes from other high
    priority needs.\1\
    ---------------------------------------------------------------------------
        \1\ Nor is a lower tipping fee somehow a litmus test for sound
    municipal solid waste management policy. The New Hampshire Department
    of Environmental Services (DES) addressed this precise point in its
    November 1995 report entitled The Cost of Flow Control. The New
    Hampshire DES explained that the recycling, household hazardous waste
    collection and other services that are supported by tipping fees in
    flow controlreliant communities ``lead to increased diversion of
    materials to recycling and composting programs, to a typically
    significant reduction in the volume of waste requiring ultimate
    disposal (which extends facility life, and/or reduces the number of
    disposal facilities required to serve a given population), and to the
    diversion from disposal facilities of many of the most toxic
    constituents in MSW.'' Id. at 1. The DES also noted that it is ``the
    duty of public authorities to respond to public (and frequently
    legislative) mandates to provide these services.'' Id. at 4 (the DES
    report is discussed below at pp. 6-8 and a copy accompanies this
    letter).
    ---------------------------------------------------------------------------
        An example is the previously noted $200,000,000 in taxes in New
    Jersey, which is expected to approach $1,000,000,000 over the next 10
    to 15 years due to the loss of flow control. Another example is Mr.
    Anderson's own agency, SWACO. Facing over $150 million of stranded
    investment in a waste-to-energy facility that was closed as a result of
    the Carbone decision, SWACO was forced (after having had to terminate
    more than 250 employees) to impose a $7 per ton fee--a waste tax--on
    all municipal solid waste generated in Franklin County, Ohio (the
    Columbus metropolitan area). A similar example in the immediate
    vicinity of Washington is Fairfax County, Virginia. Due to the loss of
    flow control, Fairfax County will have to spend $5.5 million in tax
    revenue in fiscal year 2002 to support solid waste facility bonds that
    were issued in reliance on flow control authority. Over the next 9
    years, it is projected (absent Federal legislation to grandfather pre-
    Carbon solid waste bonds and similar obligations) that $40,000,000 to
    $50,000,000 in Fairfax County taxes will be required for that purpose.
    As Fairfax County's March 20, 2002 testimony to the Environment and
    Public Works Committee emphasized, those are ``dollars that could be
    used for schools, public safety, human services, and roads.''\2\
    ---------------------------------------------------------------------------
        \2\ The loss of flow control authority also has a spillover effect
    for other public investment needs. When a flow control-reliant
    community goes to the bond market for any of a broad range of general
    obligation-public infrastructure financing needs, such as schools,
    roads, public safety facilities, etc., the interest rate that it must
    pay is likely to be evaluated as having more risk and consequently a
    higher cost due to the absence of Federal flow control legislation.
    Those additional costs are borne by local taxpayers.

        Question 4a. You state in your testimony, in support of the need
    for flow control, there is a Federal policy that discourages the use of
    general taxes to fund solid waste management. Your conclusion seems to
    imply that financial obligations could not be met absent flow control
    or the imposition of other taxes, and that the latter would violate
    Federal policy. Further documentation was provided after the hearing to
    support this assertion--specifically the testimony of then-EPA
    Administrator William Reilly before this committee on September 17,
    ---------------------------------------------------------------------------
    1999 was cited. Mr. Reilly's testimony states in part:

            ``. . . the first thing for local and municipal governments to
            do is to make certain that the prices charged for waste
            services reflects the direct and indirect costs, including the
            cost of land used, closure and postclosure costs, and other
            relevant costs. . . . It is just commonsense, and good economic
            sense that those responsible for solid waste costs pay the
            costs of these activities. . . . Full cost and variable rate
            pricing mechanisms send the appropriate market signals to
            households and go a long way toward encouraging cost effective
            waste minimization and recycling. We believe that State and
            local community use of market-based approaches such as variable
            pricing, should be pursued aggressively. . . .''

        After reading the full testimony of Mr. Reilly, it appears that the
    policy espoused before this committee by Mr. Reilly endorses free
    market mechanisms, but not necessarily flow control. Mr. Reilly seems
    to begin with the premise of a free market system (contrary to flow
    control) that would then employ full and variable fees based on the
    volume of msw generated by each household as a means to impact
    generation behavior. Your testimony appears to oppose using general tax
    revenues for waste management purposes as a means to raise prices via a
    guaranteed market and monopoly pricing. Mr. Reilly's testimony
    discourages the use of general revenue so the consumer will understand
    the full cost of the service, as well as encouraging variable pricing
    as a free market mechanism allowing the user to reduce their fees by
    reducing volume. This policy is to allow the taxpayer to lower their
    cost via free market mechanisms, while your testimony appears to seek
    justification to remove any free market options for that same taxpayer
    and raise their fees for service.
        Response. As explained above and in Mr. Anderson's testimony (pp.
    3-4), pre-Carbone public debt and other financial obligations
    undertaken in reliance on flow control authority must continue to be
    satisfied to avoid bond payment default. Absent sufficient revenue from
    user fees, the only alternative for meeting such obligations is to
    increase taxes or divert existing sources of tax revenue. Federal
    policy recommendations in 1990 (and subsequently) discouraged such use
    of general taxes to fund municipal solid waste collection and disposal
    services, and favored user fees that recover the full cost of solid
    waste collection and disposal directly from the waste generator (such
    user fees are commonplace for communities that rely on flow control).
    Those policy recommendations included the September 1991 Senate EPW
    testimony of former EPA Administrator William Reilly and EPA's
    ``Handbook For Solid Waste Officials'' (Variable Rates In Solid Waste:
    Handbook For Solid Waste Officials, USEPA, Office of Solid Waste and
    Emergency Response, EPA/530-SW-90-084A (September 1990)). Neither Mr.
    Reilly's testimony or the corresponding portion of the Handbook For
    Solid Waste Officials refer to flow control (pro or con). Instead, they
    criticized the use of local property taxes to fund solid waste
    collection and disposal services and advocated reliance on user fees.
    In the absence of flow control authority, many communities have been
    forced to rely on taxes, contrary to the policy referred to above.
        With all due respect to Senator Smith, the suggestion in his
    question that ``a free market system [is] contrary to flow control''
    and that proponents of S. 1194 and S. 2034 ``seek justification to
    remove any free market options for . . . taxpayer[s] and raise their
    fees for service'' is simply incorrect. In considering this point it
    should be emphasized that the tipping fees charged for municipal solid
    waste management services in communities that rely on flow control are
    based on the costs of the various solid waste management services
    provided. In that regard, it bears particular emphasis that when
    properly analyzed on an equivalent services basis, flow control-reliant
    communities do not pay more for the waste management services they
    receive than non-flow control communities. In fact, referring to this
    precise point in its Report to Congress on Flow Control, EPA explained
    that ``[w]hen the tipping fee [paid in a flow controlreliant community]
    is broken down into its component parts, prices are usually comparable
    for facilities sited in similar locations and built about the same
    time.'' Id. at 57 (quoting Moody's Public Finance, Perspectives on
    Solid Waste, August 16, 1993, p. 3). A very similar conclusion was
    reached by the New Hampshire DES in its November 1995 report, supra,
    The Cost of Flow Control at 2-4 (the DES report is further discussed
    below).
        In addition, flow control-reliant communities procure their waste
    management services through competitive bidding in the private
    marketplace. Put another way, communities that rely on flow control
    also rely to the maximum extent possible on private enterprise for
    their waste management infrastructure. Mr. Anderson's agency, SWACO, is
    a case in point. SWACO contracts with Waste Management, Inc., and a
    number of other private sector entities for a broad range of services,
    including most of the services required for the day-to-day operation of
    SWACO's landfill. From a national perspective, such public-private
    partnerships are the norm for communities that have relied on flow
    control. Thus, as EPA emphasized, ``it is noteworthy that the private
    sector has an ownership or operational role for 84 percent of WTE
    [waste-to-energy] throughput, including most of the larger WTEs.''
    Report to Congress on Flow Control at III-58. State and regional
    statistics show the same pattern. As an example, the Pennsylvania Waste
    Industries Association, which represents private companies engaged in
    the operation of landfills, transportation of solid waste, recycling
    and related services, has estimated that its members provide 75 percent
    of all of the municipal waste processing and disposal services within
    Pennsylvania.
        Finally, and again with all due respect to Senator Smith, the
    suggestion (in his question) that proponents of S. 1194/S. 2034 ``seek
    justification to remove any free market options for . . . taxpayer[s]
    and raise their fees for service'' disregards the fact that in a flow
    control-reliant community, as with any other community, the decision to
    provide particular solid waste management services is ultimately made
    by duly elected officials and the citizens they serve. Flow control has
    nothing to do with--and no elected official has the objective of--
    simply ``rais[ing] their fees for service.'' To the contrary, the
    purpose of flow control is to have sufficient revenue to support the
    solid waste management services that the community has selected. Put
    another way, and as explained in more detail in the next section of
    this letter, the tipping fees assessed in flow control-reliant
    communities and the integrated waste management services provided in
    those communities are directly related and one cannot be viewed in
    isolation from the other.

        Question 4b. Do private sector providers of waste management
    services factor all costs, including cost of land used, closure and
    postclosure, in determining the price they charge for their service
    (consistent with Mr. Reilly's testimony)?
        Given that non-government entities do not have the ability to tax,
    isn't their only option in recovering their cost to charge full cost
    for services?
        Response. The two questions quoted immediately above are closely
    related and we address them together. They have also been addressed by
    EPA in its Report to Congress on Flow Control and by the New Hampshire
    DES in its November 1995 report, supra, The Cost of Flow Control.
        First, flow control-based tipping fees will almost always recover,
    in addition to the cost to dispose of non-recyclable waste, the costs
    of environmentally essential ``integrated waste waste management (IWM)
    programs (e.g., recycling, public education, household hazardous waste
    collection, composting and others).'' The Cost of Flow Control at 1. As
    EPA has emphasized, such recycling and related services ``generally do
    not lend themselves to generation of their own revenues.'' Report to
    Congress on Flow Control at ES-11, III-80. The New Hampshire DES
    recognized the same point. As DES explains, unlike a private non-flow
    controlled facility whose ``tipping fee is exactly that--the cost to
    dump rubbish into a landfill or into the pit of an incinerator,'' the
    tipping fees charged at facilities that rely on flow control typically
    fund a range of very important integrated waste management (IWM)
    services that have been selected by the affected communities.\3\
    ---------------------------------------------------------------------------
        \3\ The New Hampshire DES further explains this point as follows:
    The public typically views IWM programs funded through [flow control-
    based] tipping fees as a ``free'' addition to locally provided waste
    management service. As a result, they tend to use these programs more
    heavily than if recycling, HHW [household hazardous waste] collection,
    composting, and other IWM programs were billed on a fee-for-service
    basis.
    ---------------------------------------------------------------------------
        The Cost of Flow Control at 1. DES also noted that these programs
    ``lead[] to increased diversion of materials to recycling and
    composting programs,'' ``significant[ly] reduc[e] the volume of waste
    requiring ultimate disposal'' and ``diver[t] from disposal facilities .
    . . many of the most toxic constituents in MSW.'' Id.
        The New Hampshire DES' report was prepared in response to a so-
    called ``study'' of the cost of flow control commissioned by a waste
    company that opposed flow control (Browning-Ferris Industries). The
    study concluded that flow control-reliant communities pay more for
    waste management services than non-flow control communities. As DES
    noted, however, the waste company's study was based on a ``false
    comparison'' of tipping fees at flow-controlled and non-flow-controlled
    facilities, which had the effect of substantially inflating the tipping
    fees charged at the flow controlled facilities. The Cost of Flow
    Control at 4. DES explained this point as follows:

              To yield an accurate comparison of tipping fees at public,
            flowcontrolled disposal facilities against those at private
            facilities, the [waste company's study] should have identified
            and eliminated the costs of IWM programs at the flow-controlled
            facilities, or added the cost of comparable IWM programs to the
            reported tipping fees at private facilities. Failing to do so,
            [the study] ignored what is probably the single most important
            variable that differentiates public, flow-controlled facilities
            from private disposal sites. The study compares apples to
            watermelons, and the comparison is invalid.

    Id. at 2 (emphasis added); see also id. at 4 (``omitting the cost of
    integrated waste management service provided by public, flow-controlled
    facilities unfairly inflates the reported `tipping fees' charged by
    these facilities, and results in a false comparison of disposal costs
    at the public compared to the private facilities (which offer no such
    services).''). As an example of these errors, the waste company's study
    compared the tipping fees charged at Medina, Ohio's modern recycling
    facility with the cost of waste disposal at landfills in the same
    region of Ohio. Aside from the fact that it generally costs more at
    this time to recycle rather than landfill waste (which has nothing to
    do with flow control), the New Hampshire DES concluded that when
    properly analyzed Medina's flow control-based tipping fees for
    comparable services were actually lower than the non-flow controlled
    facilities the waste company's study had used for comparison (in fact,
    based on a proper comparison, costs were lower for at least two of the
    three flow-controlled facilities examined by the New Hampshire DES).
    Id. at 3-4.\4\
    ---------------------------------------------------------------------------
        \4\ The study also ignored the difference between the tipping fees
    charged at (i) flow controlled facilities that are subject to long-term
    contractual arrangements with corresponding capacity assurance and
    price stability and (ii) the spot market tipping fees at non-flow-
    controlled facilities (for which there are no corresponding capacity
    commitments or price stability). That difference in fees reflects a
    fundamental difference in the two service arrangements and is essential
    for consideration when analyzing the cost impact of flow control. A
    principal reason why local governments rely on flow control is to
    facilitate long-term, price-stable arrangements for the development and
    financing of waste management facilities and to avoid the substantial
    price fluctuation and capacity uncertainty that is a characteristic of
    the spot market.
    ---------------------------------------------------------------------------
        We should also note in passing that the two questions we address in
    the preceding text seem to imply that private sector (non-flow-
    controlled) providers necessarily set their prices to recover their
    full costs. The New Hampshire DES disagrees, and explains in The Cost
    of Flow Control (at 2) that ``private facilities typically set prices
    to maintain cash-flow and market share--and are often willing and able
    to operate at a short-term loss.''

        Question 4c. Do you believe that Mr. Reilly's testimony of
    September 17, 1991, endorses a policy of mandated flow control or a
    policy of full pricing, variable pricing and free market mechanisms?
        Response. As explained above, Mr. Reilly's September 1991 testimony
    did not address flow control. His testimony is significant for present
    purposes because he was critical of using property taxes or similar
    general taxes to support solid waste collection and disposal services.
    Instead, he favored user fees that recover the full direct and indirect
    costs of solid waste generation and disposal (the full cost/variable
    cost pricing to which Senator Smith's question refers). But due to the
    loss of flow control authority, many flow control-reliant communities
    that had previously employed such user fees (i.e., fees that fully
    recover all direct and indirect costs) have been required (out of
    necessity and contrary to Mr. Reilly's suggested policy) to use general
    taxes in order to meet pre-Carbone financial obligations.

        Question 5. Should the taxpayer have a choice of reducing their
    costs by reducing volume and seeking the lowest cost option for
    managing their waste?
        Response. Local voters and taxpayers have the right to choose among
    alternative solid waste management strategies. Communities that rely on
    flow control will select, through their elected local governments, a
    strategy that emphasizes protection of the environment and cost
    efficiency for the long-term. Some will disagree with that choice, and
    such differences of opinion can be expected for nearly all matters of
    public policy. The flow control provisions of S. 1194 and S. 2034
    accommodate those differing viewpoints by limiting the use of flow
    control to a very narrow set of expenses (e.g., payment of debt service
    on bonds and recycling and household hazardous waste program expenses,
    etc.) and carefully confining the authority to the necessary term
    (e.g., the bond repayment period) and no longer.
                                     ______

      Response by Harold Anderson to an Additional Question from Senator
                                    Clinton
        Question. In your testimony, you mention a ``Federal policy
    announced more than a decade ago to discourage use of general taxes to
    fund solid waste management.'' Please provide a citation for this
    policy and any further details available regarding this policy.
        Response. EPA's ``Handbook For Solid Waste Officials'' (Variable
    Rates In Solid Waste: Handbook For Solid Waste Officials, USEPA, Office
    of Solid Waste and Emergency Response, EPA/530-SW-90-084A (September
    1990)), criticized the use of local property taxes to fund solid waste
    management services. The criticism was based on the concern that such
    use of property taxes fails to give ``residents any incentive to reduce
    their waste.'' Id., Volume I--Executive Summary 2 (emphasis in
    original). The Handbook continues by noting that ``In fact, with the
    property tax method, residents never even see a bill, and generally
    have no idea how much it costs to remove their garbage every week.
    Areas with [this] method [] of payment have often had to resort to
    mandatory recycling programs in order to try to reduce their amount of
    garbage.'' As an alternative to use of property taxes, the Handbook
    encourages volumebased user fees. Id. at 2-3.
        Following publication of the Handbook, former EPA Administrator
    William K. Reilly testified before the Senate Environment and Public
    Works Committee to provide ``EPA's views on solid waste management''
    and RCRA reauthorization. See William K. Reilly, Administrator, U.S.
    Environmental Protection Agency, Statement Before the Subcomm. on
    Environmental Protection of the Senate Comm. on Environment and Public
    Works 1 (September 17, 1991). Among other things, Administrator Reilly
    explained that the prices charged by local governments for waste
    management services should recover all direct and indirect costs. He
    then stated that the practice in which the costs of waste management
    services are ``typically hidden--in our property taxes'' should be
    discouraged. As an alternative, he said such costs should instead be
    recovered through volume-based user fees because ``[f]ull cost and
    variable rate [volume sensitive] pricing mechanisms send the
    appropriate market signals to households and go a long way toward
    encouraging cost-effective waste minimization and recycling.'' As Mr.
    Reilly emphasized, the alternative he recommended ``is just common
    sense, as well as good economic sense.'' Id. at 12-13.
                                   __________
     Statement of Leslie Allan, Deputy Commissioner for Legal Affairs, New
                       York City Department of Sanitation
        Mr. Chairman and members of the committee, my name is Leslie Allan,
    and I am Deputy Commissioner for Legal Affairs at the New York City
    Department of Sanitation. On behalf of Mayor Bloomberg, I appreciate
    the opportunity to testify today on pending interstate waste
    legislation--bills that could clearly have a profound impact on the
    City's day-to-day municipal solid waste operations.
        In 1996 Mayor Giuliani and Governor Pataki agreed to close the
    Fresh Kills landfill by December 31, 2001. That decision was the City's
    first step toward embarking on a new, environmentally sound course in
    the management of its solid waste. It is important for the committee to
    recognize from the outset that New York City closed Fresh Kills
    responsibly and appropriately, with due consideration for the states
    and their communities that have chosen to accept the City's waste. On
    March 22, 2001, just about 1 year ago, New York City sent its last
    barge of Department collected waste to Fresh Kills, completing a five-
    phase program initiated in July 1997, requiring that all of the City's
    exported waste be disposed of in communities that expressly choose to
    accept it through valid, legally binding Host Community Agreements.
    Since this plan mandates that the City only export to willing
    jurisdictions, the Mayor does not see a need for legislation to require
    New York City to do that which it already requires of itself.
        In exporting its residential waste, the City is exercising nothing
    more than the right the Constitution extends to cities and states
    nationwide--responsible, efficient, and environmentally sound solid
    waste management through heavily regulated and highly competitive
    private sector businesses. The courts have consistently upheld MSW
    shipments as a commodity in interstate commerce, and over the years
    communities have relied on the certainty these decisions provide for
    protecting long-term, free market plans to manage solid waste. This is
    especially important in a landscape where the more rigorous
    environmental protections required under Subtitle D of the Resource and
    Conservation and Recovery Act (RCRA) have compelled communities to
    replace old, small landfills with larger, costlier, state-of-the-art,
    regional facilities that comply with the law. In this context, the
    right to transport solid waste across state lines complements the basic
    reality that different regions have varying disposal capacities
    irrespective of state lines. Areas such as New York City and Chicago,
    lacking adequate space for landfills and/or prohibited from waste
    incineration, may be located closer to better and more cost-effective
    facilities in other states. These facilities need the additional waste
    generated elsewhere to pay for part of the increased cost of RCRA
    compliance.
        Although the closure of Fresh Kills affects only the City's
    residential waste, the private market is as essential to the management
    of that waste as it is to disposing of the City's commercial waste. For
    years the City's businesses have relied on private haulers to export
    waste from New York. For many communities and states, MSW disposable
    fees are an important revenue stream. The City believes that each
    locality has the right to accept or reject the disposal of solid waste
    not by Federal legislation, but by locally decided Host Community
    Agreements.
        The fact is that the City, in securing contracts for waste disposal
    exclusively at Host Community Agreement sites, has furthered a
    partnership that benefits importer and exporter alike. For the nation's
    largest and most densely populated city of eight million people-
    comprised of three islands and a peninsula--the ability to send waste
    to newer, more advanced regional facilities located outside the City's
    boundaries acknowledges the very environmental, demographic, and
    geographical realities that made closing Fresh Kills necessary. For the
    localities that have opted to import our waste, the revenue generated
    through host fees, licensing fees, and taxes has substantially enhanced
    the local economy, improved area infrastructure, paid for school
    construction, paved roads, and assisted host communities in meeting
    their own waste management needs. Clearly, there are many other
    jurisdictions nationwide that share New York's approach, since 42
    states import and 46 states and Washington, DC, export municipal solid
    waste.
        For the City and businesses it selects to handle MSW disposal,
    certainty and the long-term security of waste management arrangements
    are fundamental to making New York a viable place to live and work. Any
    disruption to the contracts and agreements providing the City's waste
    disposal framework could interfere with the City's day-to-day
    operations. This is why the City enthusiastically supports the
    importing community's right to negotiate a Host Community Agreement
    most suited to its particular needs, and to spell out in detail all of
    the provisions that make waste disposal from out-of-state acceptable to
    that locality. Conversely, the City will rely on private sector bidding
    to select the most competitive price for disposal. Once formally agreed
    to, however, these agreements and contracts must be inviolate in order
    to preserve the mutual interests of both importers and exporters.
        In that regard, the City has not pre-determined where its municipal
    solid waste will be disposed. Instead, it has put into place measures
    that ensure each bidder has all of the requisite environmental permits,
    along with a Host Community Agreement that verifies the receiving
    jurisdiction's approval of the disposal facility and its acceptance of
    the imported waste and applicable fees. Furthermore, the existing
    authority that states have in permitting solid waste facilities in
    accordance with their own regulatory mandates, zoning ordinances, and
    land use provisions, suggests even less cause for Federal intervention
    through legislation to restrict exports.
        In closing Fresh Kills landfill, the City looked to the private
    sector and the competitive free market to shape the future availability
    of disposal sites. In July 1997, when the City began the first phase of
    diverting waste from the landfill, The New York Times reported that
    certain local officials were ready to welcome New York's waste because
    it made ``good economic sense.'' Robert E. Wright, president of the
    Connecticut Resource Recovery Authority, which oversees and is part
    owner of that state's incinerators, told the press, ``I guess we
    probably have a more favorable eye on New York than some more distant
    states.'' Of some jurisdictions The Times reported further, ``. . .
    where counties have spent millions of dollars to build incinerators,
    local officials generally are eager for any guaranteed flow of trash.''
        New York City, one of the largest consumer markets in the nation,
    is not solely dependent on exporting MSW through private disposal
    markets to close Fresh Kills. Although we are currently retooling our
    residential recycling program, it continues to be one of the most
    ambitious in the nation. New York City's recycling program is the only
    large city program that requires 100 percent of its households--
    including multi-family dwelling residents to recycle. Moreover, the New
    York City Mayoral Directive to all City agencies to reduce workplace
    waste and establish accountability measures for waste reductions have
    reduced further the daily tonnage of export.
        The City's residents are huge consumers of goods manufactured in
    and shipped from other states, and the waste generated by packaging
    materials is significant. For that reason, the Mayor supports Federal
    legislation that would limit packaging or require manufacturers to use
    some percentage of recycled content in packaging material. Such
    requirements would have tremendous--and measurable--effect on the
    quantity of exported solid waste. Despite the City's best waste
    reduction and recycling efforts, however, the City will still need to
    dispose of a substantial amount of its waste outside its boundaries. I
    am confident that the capacity, the market, and the desire to
    accommodate the City's waste at out-of-state disposal sites will exist
    in the foreseeable future. To that end, New York City, successfully
    closed Fresh Kills by relying on free market, private sector solutions
    predicated on the strength of Host Community Agreements.
        On behalf of Mayor Bloomberg, I thank the committee and underscore
    the City's interest and commitment in addressing Congress' concerns
    regarding the interstate transport of municipal solid waste.
                                   __________
       Statement of Bruce Parker, President & CEO, National Solid Wastes
                             Management Association
        Mr. Chairman, on behalf of the private sector solid waste
    management industry, I appreciate the opportunity to testify today on
    proposed interstate waste and flow control legislation. I am Bruce
    Parker, President and CEO of the National Solid Wastes Management
    Association (NSWMA). NSWMA represents companies that collect and
    process recyclables, own and operate compost facilities and collect and
    dispose of municipal solid waste (MSW). NSWMA members operate in all
    fifty states.
        The solid waste industry is a $43 billion industry that employs
    more than 350,000 workers. We are proud of the job we do and the
    contribution our companies and their employees make in protecting the
    public health and the environment. America has a solid waste management
    system that is the envy of the world because of our ability to
    guarantee quick and efficient collection and disposal of trash in a
    manner that fully conforms with state and Federal waste management laws
    and regulations.
        Our members provide solid waste management services in a heavily
    regulated and highly competitive business environment. Thus, we are
    critically interested in proposals, such as restrictions on the
    interstate movement of MSW, that would change that regulatory or
    competitive environment, increase the cost of waste disposal and
    threaten the value of investments and plans companies have made in
    reliance on the existing law.
        The message I want to leave with you is this: restricted borders
    have no legitimate place in managing trash or any other product in our
    economy. They do not make economic or environmental sense. They are
    contrary to the concept of open borders; contrary to the evolution to
    bigger, better, more environmentally sound disposal facilities;
    contrary to our desire to keep disposal costs for taxpayers low; and
    contrary to the trend toward more innovative and protective waste
    management facilities.
        In the balance of this statement, I will share with you our reasons
    for concern and opposition to S. 1194, the ``Solid Waste Interstate
    Transportation and Local Authority Act of 2001.'' I will discuss the
    background and context as we see it, and the flaws in the proposed
    legislation.
                       the scope of interstate movements
        Interstate waste shipments are a normal part of commerce. In spite
    of all the impassioned language you have heard from a few states
    denouncing garbage that moves across state lines, the reality is
    simple: every state except Hawaii exports or imports garbage or both
    and none are harmed in the process.
        According to ``Interstate Shipment of Municipal Solid Waste: 2001
    Update,'' which was released by the Congressional Research Service
    (CRS) last July, 30 million tons of MSW crosses state borders. This
    equals approximately 7 percent of the garbage generated in the United
    States and less than 11 percent of what is disposed (generation and
    disposal estimates are based on the same state solid waste data base
    used by the CRS in estimating waste imports and exports).
        These shipments form a complex web of transactions that often
    involve exchanges between two contiguous states in which each state
    both exports and imports MSW. In fact, the vast majority of exported
    MSW, more than 80 percent, goes to a disposal facility in a neighboring
    state. According to the CRS report, 24 states, the District of Columbia
    and the province of Ontario exported more than 100,000 tons of solid
    waste last year. At the same time, 28 states imported more than 100,000
    tons. Fifteen states imported and exported more than 100,000 tons.
        The CRS report documents interstate movements of MSW involving 49
    of the 50 states. Forty-six states, the District of Columbia and one
    Canadian province export and 42 states import. Attached is ``Interstate
    Movement of Municipal Solid Waste'' (NSWMA Research Bulletin 02-01)
    which contains extensive information on this subject, including a map
    showing the movement of solid waste among the states that is based on
    the data in the CRS report.
        Moreover, while some states are the biggest exporters based on
    tonnage, several small states and the District of Columbia are highly
    dependent on waste exports. In addition to Washington, DC, which
    exports all of its MSW, Connecticut, Illinois, Maryland, Missouri, New
    Jersey, New York, Rhode Island, Vermont and West Virginia export more
    than 15 percent of their solid waste. The reality is that MSW moves
    across state lines as a normal and necessary part of an environmentally
    protective and cost effective solid waste management system. Like
    recyclables, raw materials and finished products, solid waste does not
    recognize state lines as it moves through commerce. In fact, the United
    States has benefited both environmentally and economically from the
    free market for waste disposal and recyclables.
        CRS cites a number of reasons for interstate movements. These
    include enhanced disposal regulations and the subsequent decline in
    facilities. In addition, CRS notes that in larger states ``there are
    sometimes differences in available disposal capacity in different
    regions with the state. Areas without capacity may be closer to
    landfills (or may at least find cheaper disposal options) in other
    states.''
                         the role of regional landfills
        The CRS report notes that the number of landfills in the US
    declined by 51 percent between 1993 and 1999 as small landfills closed
    in response to the increased costs of construction and operation under
    the Resource Conservation and Recovery Act (RCRA) Subtitle D and state
    requirements for more stringent environmental protection and financial
    assurance. The number of landfills in the early 1990's was nearly
    10,000 while today there are about 2,600 and the total number continues
    to decline as small landfills close, and communities in ``wastesheds''
    turn to state-of-the-art regional landfills that provide safe,
    environmentally protective, affordable disposal.
        Construction and operation of such facilities, of course, requires
    a substantial financial investment. By necessity, regional landfills
    have been designed in anticipation of receiving a sufficient volume of
    waste from the wasteshed, both within and outside the host state, to
    generate revenues to recoup those costs and provide a reasonable return
    on investment.
        It was widely recognized that the costs to most communities of
    Subtitle D-compliant ``local'' landfills were prohibitive. The
    development of regional landfills was entirely consistent with all
    applicable law, and was viewed and promoted by Federal and state
    officials and ensuing regulatory policy as the best solution to the
    need for economic and environmentally protective disposal of MSW.
        These regional landfills provide safe and affordable disposal as
    well as significant contributions to the local economy through host
    fees, property taxes, and business license fees. Additional
    contributions to the communities include free waste disposal and
    recycling services, and in some cases assumption of the costs of
    closing their substandard local landfills. These revenues and services
    enable the host communities to improve and maintain infrastructure and
    public services that would otherwise not be feasible.
     both the public and the private sectors oppose interstate restrictions
        NSWMA is not alone in opposing restrictions on interstate waste.
    The Solid Waste Association of North America (SWANA), which represents
    both public and private sector solid waste management professionals,
    also opposes these restrictions. At its mid-year meeting last summer,
    SWANA's International Board of Directors voted unanimously to approve a
    policy statement that supports ``the free transboundary movement of
    solid waste''.
        Public sector waste managers and private sector waste management
    companies agree that they can't do their job and protect the public
    health and the environment while having their hands tied by artificial
    restrictions based on state lines.
                            host communities benefit
        MSW also moves across state lines because some communities invite
    it in. Many communities view waste disposal as just another type of
    economic activity, as a source of jobs and income. As noted above,
    these communities agree to host landfills and in exchange receive
    benefits, which are often called host community fees, that help build
    schools, buy fire trucks and police cars, and hire teachers, firemen
    and policemen and keep the local tax base lower.
                              the broader context
        The legislation currently proposed on this issue, S. 1194, would
    radically disrupt and transform the situation I have described. For
    that reason, as well as the precedential nature of some of the
    provisions, let me suggest that you consider this legislation in a
    broader context.
        The applicability of the Commerce Clause to the disposal of out-of-
    state waste is well established by a long line of U.S. Supreme Court
    decisions spanning more than a quarter of a century. As you probably
    know, the original decision protected Pennsylvania's right to export
    its garbage to a neighboring state. The Court has consistently
    invalidated such restrictions in the absence of Federal legislation
    authorizing them.
        Throughout this period, private sector companies did what
    businesses do: they made plans, invested, wrote contracts, and marketed
    their products and services in reliance on the rules which clearly
    protected disposal of out-of-state MSW from restrictions based solely
    upon its place of origin.
        In this fundamental sense, the interstate commerce in waste
    services is like any other business, and proposed legislation to
    restrict it should be evaluated in the broader context of how you would
    view it if its principles and provisions were made applicable to other
    goods and services, rather than just garbage.
        Consider, for example, parking lots. Suppose a state or local
    government sought Federal legislation authorizing it to ban, limit, or
    charge a differential fee for parking by out-of-state cars at privately
    owned lots or garages, arguing that they were using spaces needed for
    in-state cars, and that the congestion they caused was interfering with
    urban planning, etc. Or suppose they asked for authority to tell
    privately owned nursing homes or hospitals that they couldn't treat
    out-of-state patients because of the need to reserve the space,
    specialized equipment, and skilled personnel to meet the needs of their
    own citizens. Similar examples can easily be identified--commercial
    office space for out-of-state businesses, physicians and dentists in
    private practice treating out-of-state patients, even food or drug
    stores selling to out-of-state customers.
        I would hope that in all of these cases, you would respond to the
    proponents of such legislation by asking a number of questions before
    proceeding to support the restrictions: What kind of restrictions do
    you want? Are they all really necessary? Can you meet your objectives
    with less damaging and disruptive means? What about existing
    investments that were made in reliance on the ability to serve out-of-
    state people? What about contracts that have been executed to provide
    that service? Would authorizing or imposing such restrictions be an
    unfunded mandate on the private sector providing those services, or on
    the public sector outside the state that is relying on them? Would such
    restrictions result in the diminution of the value of property
    purchased in reliance on an out-of-state market, and thereby constitute
    a ``taking''? Will the restrictions be workable and predictable? I
    respectfully suggest that you ask the same questions about the proposed
    legislation involving restrictions on interstate MSW.
                            the proposed legislation
        The proposed legislation, S. 1194, fails to protect host agreements
    and investments. Nor does it preserve an opportunity to enter and grow
    in a market that demands economic and protective waste disposal. And it
    also fails to provide predictability about the rules that will apply to
    interstate shipments of waste. The array of discretionary authorities
    for Governors to ban, freeze, cap, and impose fees, and then change
    their minds over and over again, promises to result in chaos and a
    totally unpredictable and unreliable market and waste disposal
    infrastructure. In the worst case, hasty state action to ban or limit
    imports could lead to a public health crisis in exporting states if
    their garbage has no where to go.
                                  flow control
        NSWMA opposes restoration of flow control because it's too late to
    put Humpty Dumpty back together again. In the 8 years since the Carbone
    decision, landfills and transfer stations have been constructed, trucks
    have been bought, people have been hired, contracts have been written,
    and both the consumers and providers of waste services have experienced
    the benefits of a competitive market. These investments and
    arrangements cannot be undone, nor should they be. The facilities that
    benefited from an uncompetitive monopolization of local solid waste
    management have learned to compete in a free market. They have become
    more efficient and competitive as a result of the rigors of the free
    market system. Why would anyone want to replace a competitive system
    with uncompetitive monopolies?
      restricting or prohibiting the importation of canadian waste raises
    serious questions about american obligations under international trade
                                   agreements
        S. 1194 would also restrict the importation of MSW form Canada and
    in so doing, raises serious questions about American responsibilities
    under the North American Free Trade Agreement, the General Agreement
    and Tariffs and Trade and the Canada-U.S.A. Agreement on the
    Transboundary Movement of Hazardous Waste (amended to include solid
    waste).
        MSW may not be everyone's favorite commodity, but it is covered by
    the same free trade provisions that protect paper and cars and
    television sets. If we could close our borders to Canadian solid waste,
    what would prevent Canada from closing its borders to American
    hazardous waste? American exports of hazardous waste to Canadian
    disposal facilities have increased dramatically over the last 5 years.
    If Michigan can ban Canadian MSW, why can't the Canadians be allowed to
    ban Michigan hazardous waste?
                                   conclusion
        Thank you, Mr. Chairman. That concludes my statement.

        [GRAPHIC] [TIFF OMITTED]

    Responses by Bruce Parker to Additional Questions from Senator Jeffords
        Question 1. Does a free market for waste disposal services provide
    the lowest cost for consumers?
        Response. The economic history of the United States shows that free
    markets always provide the lowest costs and the most efficient services
    for consumers.

        Question 2. What is the impact on the environment?
        Response. NSWMA recognizes that environmental regulations are
    necessary to guarantee that disposal facilities are operated in a
    manner that is protective of public health and safety. NSWMA has a long
    record of advocacy in favor of EPA promulgating regulations for
    municipal solid waste landfills under Subtitle D and a strong record in
    favor of fair and consistent enforcement of those regulations.
        If EPA's Subtitle D regulations are properly enforced the
    environmental and public health impacts of disposal facilities are
    minimal. The solid waste industry supported EPA when it promulgated the
    regulations because we believe protecting public health and the
    environment is absolutely essential. A Subtitle D disposal facility is
    highly engineered with an impermeable bottom liner, a leachate
    collection and removal system, a gas collection venting or removal
    system, a low permeability cap after closure, and a continuous
    monitoring system until after the post-closure period. It should be
    noted that each of the seven facilities in Virginia that receive
    exported waste are state-of-the-art Subtitle D facilities.

        Question 3. What less disruptive means can Congress utilize to
    incentivize all states to effectively manage their solid waste?
        Response. Placing restrictions on the interstate movement of solid
    waste is inherently disruptive. Bans or limits on imports of solid
    waste could lead to so-called exporting states suffering disruption in
    their waste management needs and potential health problems as local
    governments and haulers in those states attempt to find regulated
    disposal facilities. As noted in our written testimony, 10 states,
    ranging in size from Vermont to New York, export at least 15 percent of
    their waste (based on Congressional Research Service data). Because it
    can take 7 or 8 years to site, permit and construct a Subtitle D
    landfill, these states would be hit particularly hard by any limits on
    the interstate movement of solid waste.
        Many of the so-called exporting states also have strong recycling
    programs. New Jersey and New York have two of the highest statewide
    recycling rates in the country. The Federal Government could help these
    two states, along with the other 48 states, by further encouraging
    recycling through market development activities. For instance, the
    Federal Government could help recycling markets by increasing its use
    of recycled content products.

        Question 4. Do private sector providers of waste management
    services factor all costs, including cost of land used, closure and
    post-closure, in determining the price they charge for their service.
        Response. We are not privy to how members of NSWMA or other private
    sector firms price their services. However, all fixed and variable
    costs must be included in the tip fee in order for a facility to cover
    its costs. Disposal facilities cannot stay in operation if they are
    unable to cover their costs. As to closure and post-closure costs,
    normal enforcement of the financial assurance provisions of the
    Subtitle D regulations should guarantee that those costs are included
    in the tipping fee.
                                     ______

      Responses by Bruce Parker to Additional Questions from Senator Smith

        Question 1. Does a free market for waste disposal services provide
    the lowest cost for consumers?
        Response. The economic history of the United States shows that free
    markets always provide the lowest costs and the most efficient services
    for consumers.

        Question 2. What is the impact on the environment?
        Response. NSWMA recognizes that environmental regulations are
    necessary to guarantee that disposal facilities are operated in a
    manner that is protective of public health and safety. NSWMA has a long
    record of advocacy in favor of EPA promulgating regulations for
    municipal solid waste landfills under Subtitle D and a strong record in
    favor of fair and consistent enforcement of those regulations.
        If EPA's Subtitle D regulations are properly enforced the
    environmental and public health impacts of disposal facilities are
    minimal. The solid waste industry supported EPA when it promulgated the
    regulations because we believe protecting public health and the
    environment is absolutely essential. A Subtitle D disposal facility is
    highly engineered with an impermeable bottom liner, a leachate
    collection and removal system, a gas collection venting or removal
    system, a low permeability cap after closure, and a continuous
    monitoring system until after the post-closure period. It should be
    noted that each of the seven facilities in Virginia that receive
    exported waste are state-of-the-art Subtitle D facilities.

        Question 3. What less disruptive means can Congress utilize to
    incentivize all states to effectively manage their solid waste?
        Response. Placing restrictions on the interstate movement of solid
    waste is inherently disruptive. Bans or limits on imports of solid
    waste could lead to so-called exporting states suffering disruption in
    their waste management needs and potential health problems as local
    governments and haulers in those states attempt to find regulated
    disposal facilities. As noted in our written testimony, 10 states,
    ranging in size from Vermont to New York, export at least 15 percent of
    their waste (based on Congressional Research Service data). Because it
    can take 7 or 8 years to site, permit and construct a Subtitle D
    landfill, these states would be hit particularly hard by any limits on
    the interstate movement of solid waste.
        Many of the so-called exporting states also have strong recycling
    programs. New Jersey and New York have two of the highest statewide
    recycling rates in the country. The Federal Government could help these
    two states, along with the other 48 states, by further encouraging
    recycling through market development activities. For instance, the
    Federal Government could help recycling markets by increasing its use
    of recycled content products.

        Question 4. Do private sector providers of waste management
    services factor all costs, including cost of land used, closure and
    post-closure, in determining the price they charge for their service.
        Response. We are not privy to how members of NSWMA or other private
    sector firms price their services. However, all fixed and variable
    costs must be included in the tip fee in order for a facility to cover
    its costs. Disposal facilities cannot stay in operation if they are
    unable to cover their costs. As to closure and postclosure costs,
    normal enforcement of the financial assurance provisions of the
    Subtitle D regulations should guarantee that those costs are included
    in the tipping fee.
                                     ______

     Responses by Bruce Parker to Additional Questions from Senator Clinton
        Question 1. In your testimony you indicated that the construction
    and operation of environmentally sound landfill facilities requires a
    substantial financial investment. Can you please tell us a little bit
    more about the scale of such financial investments, as well as the time
    and resources needed to site and permit these facilities?
        Response. Prior to EPA's promulgation of the municipal solid waste
    (MSW) landfill criteria under RCRA part 258 (commonly referred to as
    the Subtitle D regulations) in 1991, many landfills operated with
    minimal or no environmental protections. Those landfills that were
    built with liners, leachate control systems and other technologies
    designed to protect public health and the environment, were at a
    competitive disadvantage with these unlined dumps. This competitive
    disadvantage was caused by the cost of installing environmentally
    protective technology and operating the facility in a protective manner
    as opposed to the cost of just digging a hole, throwing garbage in and
    eventually covering the site.
        EPA's Subtitle D regulations raised the environmental standards for
    all MSW landfills by requiring criteria for siting, operating,
    designing (including liners and leachate collection systems), and
    monitoring groundwater. These regulations also require that corrective
    action be taken if necessary to clean up contamination from the
    facility, that for at least 30 years after the landfill closes
    monitoring and corrective action must continue, and that funds will be
    available to ensure that these activities are performed.
        The cost of meeting the Federal standards is substantial. Landfill
    experts estimate that predevelopment costs alone can be as much as $10
    million. These costs include, for example, site selection studies, land
    purchase, environmental assessments, hydrogeologic analyses,
    engineering fees, and licensing and permit review fees. Construction
    costs, which would include the liners and leachate collection systems,
    can be 500,000 per acre. When the other costs of owning and operating a
    Subtitle D compliant MSW landfill are taken into account, the total
    costs are commonly $100 million and may approach $300 million.
        Because the siting process can be long, involving extensive public
    review of applications and a thorough permitting process at the state
    level, 7 or 8 years can elapse between the time the facility operator
    commits to building a landfill at a particular site and the facility is
    fully permitted and operating.

        Question 2. Does that in any way explain why we are seeing the
    consolidation of this industry and the substantial decrease in the
    number of landfills in the United States?
        Response. In the preamble to the Subtitle D regulations, EPA noted
    that the higher cost of the more environmentally protective facilities
    was likely to lead to fewer, but larger facilities. This prediction has
    proven to be true. Many small facilities closed because their owners--
    whether public or private sector--were unable to make the necessary
    improvements to comply with the Subtitle D regulations. These higher
    costs undoubtedly hastened the consolidation in the solid waste
    industry as companies combined to provide the financial resources to
    build and operate landfills. The higher costs also explain the decrease
    in the number of landfills, which has declined substantially from
    approximately 10,000 in 1990 to 2600 today. Of necessity these new
    regional facilities are larger both in size and in-take volume, than
    the old unlined facilities of the past. The higher costs imposed by EPA
    regulations require economies of scale that the old unlined facilities
    did not need to have, and therefore, the large regional facilities are
    dependent on larger geographic areas from which to obtain waste.
    However, even though the number of landfills has declined
    substantially, the construction of new, larger, regional facilities has
    lead to more disposal capacity than was available in 1991. According to
    recent studies, the average national landfill capacity was about 11
    years in the late 1980's. By the mid-1990's, national landfill capacity
    rose to about 14 years and presently stands at more than 18 years.

        Question 3. Understanding the kinds of investments that are
    required, why do communities choose to allow the construction and
    operation of such facilities? What are the benefits to these
    communities that must somehow out-weigh the costs?
        Response. Host communities work with private sector companies for a
    wide variety of reasons. In many cases, the host community operated an
    unlined dump that caused environmental harm and must be closed and
    cleaned up. Private sector landfill companies have the expertise to
    clean up these facilities. In many cases, the company agrees to clean
    up the old site as part of the host community agreement. Other benefits
    include free garbage collection and disposal for the host community and
    per ton fees paid to the host community that are used for such purposes
    as buying police and fire equipment, building new schools, hiring new
    teachers and public safety officers. These communities view the
    landfill as a viable and important form of economic development.

        Question 4. In your testimony you ask the question, ``can you meet
    your objectives with less damaging and disruptive means''? What do you
    see as the ``objectives'' that pending legislative proposals are trying
    to address, and do you believe that we can meet these objectives with
    less damaging and disruptive means?''
        Response. The phrase in the testimony was meant as a rhetorical
    question. In fact, any attempt to limit or restrict the movement across
    state lines would be disruptive and inflict needless cost on the
    residents of exporting jurisdictions. According to Congressional
    Research Service data, ten states, ranging in size from Vermont to New
    York, export 15 percent or more of their solid waste. Since it takes 7
    or 8 years to site, permit and build a Subtitle D landfill, these
    states would be severely harmed by disruptions in their access to
    environmentally protective disposal facilities. In addition, local
    jurisdictions stand to lose their host community benefits when waste
    volume declines.
                                   __________

        Statement of Scott M. DuBoff on Behalf of the Local Government
      Coalition for Environmentally Sound Municipal Solid Waste Management
        This statement is submitted on behalf of the Local Government
    Coalition for Environmentally Sound Municipal Solid Waste Management
    (Coalition) for inclusion in the Environment and Public Works
    Committee's March 20, 2002 hearing record in the above-referenced
    matter. The Coalition consists of cities, counties and solid waste
    management authorities concerned with municipal solid waste flow
    control legislation and other solid waste management issues. The
    Coalition's members are committed to long-term waste management
    solutions that provide full protection for public health and the
    environment at reasonable costs.
        The Coalition strongly supports the flow control provisions of S.
    1194, the ``Solid Waste Interstate Transportation and Local Authority
    Act of 2001,'' and S. 2034, the ``Municipal Solid Waste Interstate
    Transportation and Local Authority Act of 2002.'' This statement
    addresses the continuing need for--and very strong equitable arguments
    justifying--the narrow ``grandfather'' authority that the bills would
    provide for uses of flow control authority that were in effect at the
    time of the Supreme Court's Carbone decision (C. & A. Carbone v. Town
    of Clarkstown, 511 U.S. 383 (1994)). In addition, we respond to
    incorrect statements concerning flow control made by one of the
    witnesses at the March 20 hearing.
                                 i. background
        The narrow flow control provisions of S. 1194 and S. 2034 (which
    are identical in the two bills) consist of the following:

              The bills would establish limited ``grandfather'' protection
            for communities with stranded investment (or contractual
            obligations) undertaken in reliance on the previous
            availability of flow control authority.
              That authority is self-limiting such that it will be used
            only where necessary and only for the period necessary. More
            specifically, that authority is confined to recovery of a
            narrow list of expenses for waste disposal and recycling
            facilities (e.g., principal and interest on bonds and ``put or
            pay'' contract obligations) and could only be relied upon where
            waste flow to a designated facility is not otherwise
            sufficient--absent use of this legislative authority--to meet
            those expenses.
              The ``Interim Contracts'' provision in each of the bills
            further limits the narrow authority provided, and protects the
            interests of non-flow controlled facilities, by making
            reinstatement of flow control authority subordinate to
            conflicting waste delivery agreements entered after a
            community's post-Carbone suspension of flow control authority.
              Finally, the bills each contain a firm ``sunset'' clause that
            (i) limits the authority provided to investments and
            contractual obligations undertaken in 1994 or earlier and (ii)
            only for the duration of such financial or contractual
            obligations as in effect in 1994 (e.g., the provisions for bond
            repayment in effect in 1994).

        As the term implies, ``flow control'' is a mechanism that allows
    local governments to implement their choices for managing locally
    generated municipal solid waste in an environmentally sound and
    fiscally responsible manner. A local government will ``control the
    flow'' of such waste by selecting a specific facility (or set of
    facilities) for processing, disposal, etc., of locally generated
    municipal solid waste. To effectuate its choice, the local government
    will adopt an ordinance or regulation which ``designates'' those
    facilities for management of such locally generated waste and requires
    their use by waste haulers.
        As noted above, S. 1194 and S. 2034 would protect the stranded
    investment that has resulted from the Carbone decision by providing a
    very limited grandfather provision for the use of flow control. These
    are investments that many communities and other public bodies made in
    direct response to Federal mandates arising under the Resource
    Conservation and Recovery Act (RCRA) (see 42 U.S.C. Sec. 6901(a)(4))
    (management of municipal solid waste ``continue[s] to be primarily the
    function of State, regional, and local agencies'') and parallel state
    laws that give local government entities such as the Coalition members
    primary responsibility for assuring adequate long-term capacity to
    manage all of the municipal solid waste generated within their
    respective jurisdictions. State laws routinely parallel RCRA's
    recognition of state and local governmental responsibility for
    municipal solid waste management.\1\
    ---------------------------------------------------------------------------
        \1\ For example, in Ohio each county (or solid waste management
    district) is responsible for certifying the availability of sufficient
    solid waste management (e.g., disposal) capacity to serve the county's
    residents for a 10-year period. Ohio Rev. Code Sec. 3734.53(A).
    Similarly, in Pennsylvania, counties and municipalities have
    responsibility for assuring adequate solid waste disposal capacity. 53
    Pa. Stat. Sec. Sec. 4000.303(a), 4000.304(a). Most state codes have
    similar provisions. See e.g., Conn. Gen. Stat. Sec. 22a-220
    (responsibility of each municipality to arrange for solid waste
    collection and disposal); Or. Rev. Stat. Sec. 268.317 (giving
    metropolitan service districts extensive solid waste disposal
    authority); Tenn. Code Ann. Sec. 68-211-906 (solid waste authorities
    comprised of county and municipal governments have exclusive authority
    regarding solid waste collection within their boundaries); Wash. Rev.
    Code Sec. 35.21.120 (``A city or town may by ordinance provide for the
    establishment of a system or systems of solid waste handling for the
    entire city or town or for portions thereof'').
    ---------------------------------------------------------------------------
        In that regard, it should also be noted that acquiring the long-
    term sources of environmentally-sound and price-stable capacity that a
    community will designate for management of its municipal solid waste
    will often require significant financial commitments. Those commitments
    are, in turn, secured through revenue bonds and similar flow control-
    dependent financial arrangements. In fact, since 1980 over $20 billion
    in state and local bonds have been issued in reliance on flow control
    authority for the construction of waste management facilities including
    state-of-the-art, environmentally-protective recycling and resource
    recovery (e.g., waste-to-energy) facilities and landfills.
                     ii. the impact of the carbone decision
        Prior to the Supreme Court's Carbone decision flow control had been
    repeatedly validated by Federal court decisions spanning more than 15
    years from the late 1970's into the 1990's (and statutes in more than
    20 states have authorized local governments to employ flow control). In
    fact, in previous hearings before this committee, Moody's Investors
    Service, Inc., testified that ``[p]rior to the Carbone decision,
    Moody's viewed the state and local flow control laws and ordinances as
    valid, binding and enforceable.'' See Hearing on Transportation and
    Flow Control of Solid Waste Before the Senate Committee on Environment
    and Public Works, 105th Cong. 307, 311 (1997) (cited hereafter as ``S.
    Hrng. 105-72''). Unfortunately, in Carbone the Supreme Court ruled that
    the flow control ordinance at issue in that case, which required use of
    a designated waste transfer facility to the exclusion of other
    facilities, violated the Commerce Clause. The Court's decision has
    spawned scores of additional lawsuits and prolonged litigation for many
    flow controlreliant local governments, and that is only part of the
    troubling impacts that followed.
        More specifically, the consequences confronting communities
    throughout the Nation due to the loss of flow control authority and the
    absence of Federal legislation include steep declines in waste
    deliveries and resulting bond downgrades, increased taxes to offset
    declines in tipping fees (i.e., the fees paid to process or dispose of
    the portion of the waste stream that cannot be recycled), termination
    of recycling and other environmentally essential programs, employee
    layoffs and terminations, depletion of cash reserves, increasing upward
    pressure on tipping fees as the unavoidable fixed cost burden of waste
    management infrastructure is shared by fewer users, and more recently,
    even technical default on bonds (e.g., violating bond indenture
    requirements for minimum cash reserves sufficient to meet near term
    bond payment and other financial obligations). In terms of taxes, in
    one state alone more than $200,000,000 of tax revenue has been diverted
    since Carbone to fund local solid waste bond payment obligations that
    had previously been funded by flow control-based user fees. See Brief
    of Amicus Curiae State of New Jersey at 2, United Haulers Association,
    et al. v. Oneida-Herkimer Solid Waste Management Authority, et al.
    (brief filed December 7, 2001), Supreme Court of the United States (No.
    01-686) (``over $200,000,000 has already been expended from the [New
    Jersey] State Treasury to prevent defaults on public debt obligations''
    due to the loss of flow control authority).
        The number of bond downgrades (at least 22 in total) by the
    principal rating agencies (Moody's Investors Service, Inc. and Standard
    and Poor's Corporation) is also troubling, and Moody's has placed many
    additional solid waste bond issues in the ``unstable-credit watch''
    category due specifically to the absence of flow control legislation.
    The absence of such legislation also affects solid waste bonds that are
    secured by general obligation guarantees or bond repayment insurance as
    back-up security where there was previous reliance on flow control.
    Nationally, the total outstanding debt issues of local public agencies
    that have been downgraded or placed on credit watch for potential
    downgrading by rating agencies since Carbone is over $3.5 billion.
        Compounding these difficulties is the spillover effect for other
    public investment needs. When a flow control-reliant community goes to
    the bond market for any of a broad range of general obligation-public
    infrastructure financing needs, such as schools, roads, bridges, public
    safety facilities, etc., the interest rate that it must pay is likely
    to be adversely affected, that is, the bond issue will be evaluated as
    having more risk and consequently have a higher cost due to the absence
    of Federal flow control legislation. Those additional costs are
    ultimately borne by the local taxpayers.\2\
    ---------------------------------------------------------------------------
        \2\ During the March 20 hearing, Coalition witness Harold Anderson,
    Chief Counsel of the Solid Waste Authority of Central Ohio (SWACO),
    identified the tax increases and other adverse impacts sustained by
    SWACO and the communities it serves as a result of the Carbone
    decision. Similar impacts in more than fifty other communities across
    the Nation are detailed in the record of previous hearings before the
    committee. See S. Hrng. 105-72, sera, at 77-80 (statement of Randy
    Johnson, Chair, Board of County Commissioners, Hennepin County,
    Minnesota). On the other hand, the written testimony submitted at the
    March 20 hearing by witness Bruce Parker, president of an association
    of companies engaged in waste hauling and landfill operations opposed
    to flow control, suggests (pp. 910) that local governments responded to
    Carbone by ``learn[ing] to compete in a free market'' and ``becom[ing]
    more efficient.'' While we would certainly agree that very few, if any,
    business or government entities could legitimately claim that they have
    achieved all possible efficiencies, Mr. Parker's statement is not
    otherwise valid. In fact, if his suggestion were correct, a necessary
    corollary would be that the required increases in local taxes,
    termination of environmentally essential recycling programs and other
    harsh measures that followed in the wake of Carbone were somehow a sign
    of ``efficiency.'' That was obviously not the case.
    ---------------------------------------------------------------------------
        We must also emphasize that it would be a mistake to assume (or
    suggest) that the absence of bond payment defaults is an indication
    that ``all is well.'' Such a conclusion not only disregards the fact
    that many local governments have already made significant financial
    sacrifices in order to meet their obligations but also further
    disregards the fact that local governments will do everything within
    their ability to avoid either a bond rating downgrade or the truly
    debilitating impact of a bond default.
        A final point regarding the impact of the Carbone decision: Surely
    the preferred policy outcome should not be one in which, due to the
    absence of flow control authority, local governments are forced, as
    examples, to terminate recycling programs, lay off employees or
    increase taxes. Nevertheless, it has been suggested (by legislative
    opponents) that because some local governments may have these
    alternatives available they ``do not need'' flow control legislation.
    That suggestion would be correct if--and only if--one also concludes
    (which we do not) that the better approach is to increase local taxes
    in order to meet financial obligations undertaken a number of years ago
    in good faith reliance on flow control authority.\3\
    ---------------------------------------------------------------------------
        \3\ In addition to the financial and environmental impacts
    discussed above, an often overlooked indirect impact of Carbone has
    been a reduced ability for local governments to meet their long-term
    solid waste management planning obligations due to uncertainty
    regarding waste volumes generated and disposal sites utilized. The
    result has at times been vague planning documents that fall short of
    the comprehensive solid waste management objectives set forth in RCRA
    and parallel state laws.
    ---------------------------------------------------------------------------
        iii. s. 1194 and s. 2034 provide narrow protection for stranded
                                   investment
        The preceding points demonstrate the need for the stranded cost
    protection that S. 1194 and S. 2034 would provide. In considering this
    matter it should be noted that in the utility context ``stranded
    costs'' refers to prudent investments a utility made as a regulated
    monopoly, but which would cause the utility's rates to exceed the
    market-based prices that prevail in a competitive (deregulated) market.
    The public policy underlying that protection is sometimes referred to
    as the ``regulatory compact'': Utilities undertook the investments
    necessary to serve their customers' needs, and in exchange enjoyed
    regulated monopoly status and rates sufficient to recover their
    prudently incurred costs. The advent of retail competition, however,
    changed ``the rules of the game'' by taking away the assured customer
    base that a utility previously enjoyed as a regulated monopoly. In such
    circumstances stranded cost protection is intended to keep the utility
    whole by assuring recovery of prudently incurred costs that may not be
    recoverable in a competitive market. In short, utility restructuring
    legislation ``changes the rules of the game,'' and stranded cost
    recovery provides a transition to assure fair treatment of investment
    decisions that were made under the old rules.
        Flow control is precisely the same situation. Thus, in many states
    local governments have by law been given primary responsibility for
    assuring adequate capacity to dispose of all municipal solid waste
    generated in their communities. See n. 1, above. Local governments
    responded in various ways to meet that responsibility. Many entered
    contracts for long-term waste disposal, while others built facilities
    (most often in partnership with private vendors) to serve their
    communities. Both approaches required significant financial
    commitments, which are often secured through flow control-dependent
    revenue bonds or put-or-pay contracts, as had been entirely permissible
    prior to the Carbone decision. But Carbone ``changed the rules'' for
    local governments that had previously relied on flow control, which is
    directly analogous to the situation electric utilities confront with
    restructuring legislation. And just as the need for a reasonable
    transition for stranded cost recovery has been recognized in the
    utility restructuring context, it should also be recognized in solid
    waste legislation. That is the purpose of the limited grandfather
    provisions for flow control in S. 1194 and S. 2034.
     iv. flow control does not increase costs for waste management services
    A. The Facts
        It should also be emphasized that flow control does not increase
    prices or result in the imposition of higher costs for a given category
    of service. The local governments that rely on flow control adhere to
    competitive bidding requirements which make cost a prime consideration
    in selecting among alternative waste management facilities or vendors.
    And the fact that some flow control-reliant communities may have
    tipping fees that are higher than the tipping fees at an another
    disposal facility does not undermine that conclusion in any way.
        Following up on the preceding point, flow control-based tipping
    fees will almost always recover, in addition to the cost to dispose of
    non-recyclable waste, the costs of environmentallyessential waste
    management services such as recycling, household hazardous waste and
    yard waste collection services. As EPA has emphasized, such recycling
    and related services ``generally do not lend themselves to generation
    of their own revenues.'' See U.S. Environmental Protection Agency,
    Report to Congress on Flow Control and Municipal Solid Waste, EPA 530-
    R-95-009 (March 1995, at ES-11) (cited below as ``Report to Congress on
    Flow Control''). Moreover, as EPA has also recognized, when properly
    analyzed on an equivalent services basis, flow controlreliant
    communities do not pay more for the waste management services they
    receive than nonflow control communities. Referring to flow control-
    reliant communities, EPA noted that ``[w]hen the tipping fee [paid in
    those communities] is broken down into its component parts, prices are
    usually comparable for facilities sited in similar locations and built
    about the same time.'' Id. at 57 (quoting Moody's Public Finance,
    Perspectives on Solid Waste, August 16, 1993, p. 3).
        Furthermore, the approach of combining the costs of other solid
    waste management programs in a composite user fee charged for disposal
    of municipal solid waste is the preferred--and very sound--public
    policy. In that regard, the policy that EPA began recommending more
    than a decade ago was to discourage use of general taxes to fund solid
    waste management services. For example, EPA's ``Handbook For Solid
    Waste Officials'' (Variable Rates In Solid Waste: Handbook For Solid
    Waste Officials, USEPA, Office of Solid Waste and Emergency Response,
    EPA/530-SW-90-084A (September 1990)), pointedly criticized the use of
    local property taxes to fund solid waste management services. The basis
    for the criticism was that such use of property taxes fails to give
    ``residents any incentive to reduce their waste.'' Id., Volume I--
    Executive Summary 2 (emphasis in original). The Handbook continues by
    noting that ``[i]n fact, with the property tax method, residents never
    even see a bill, and generally have no idea how much it costs to remove
    their garbage every week. Areas with [this] method[] of payment have
    often had to resort to mandatory recycling programs in order to try to
    reduce their amount of garbage.'' As an alternative to such use of
    property taxes, the Handbook encourages volume-based user fees. Id. at
    2-3.
        Following publication of the Handbook, former EPA Administrator
    William K. Reilly testified on this matter (as well as other RCRA
    reauthorization topics) before the Senate Environment and Public Works
    Committee. See William K. Reilly, Administrator, U.S. Environmental
    Protection Agency, Statement Before the Subcommittee on Environmental
    Protection of the Senate Comm. on Environment and Public Works 1
    (September 17, 1991). Among other things, Administrator Reilly
    explained that the prices charged by local governments for waste
    management services should recover all direct and indirect costs. He
    then stated that the practice in which the costs of waste management
    services are ``typically hidden--in our property taxes'' is poor
    policy. As an alternative, he said such costs should instead be
    recovered through volumebased user fees. That is the approach followed
    by flow control-reliant communities and, as Mr. Reilly emphasized, that
    approach ``is just common sense, as well as good economic sense.'' Id.
    at 12-13.
    B. Falsehoods and Misconceptions
        1. Costs. At the March 20 hearing, witness Parker (see n. 2, above)
    suggested that flow control increases costs to consumers by 40 percent.
    Mr. Parker referred to 1997 testimony before the Senate Environment and
    Public Works Committee as the source for his 40 percent figure, and the
    1997 testimony, in turn, referred to a study commissioned by a waste
    company that opposed flow control (Browning-Ferris Industries) as the
    basis for the figure.\4\ That ``study'' was entirely invalid, however,
    and laden with distortion that portrayed flow control as more
    expensive.
    ---------------------------------------------------------------------------
        \4\ Although Mr. Parker attributed the 40 percent figure to
    Congressman William Pascrell's March 18, 1997 testimony, the figure was
    not mentioned by Mr. Pascrell, but rather by witnesses John Broadway
    and Grover Norquist. See S. Hrng. 105-72, supra, at 91, 92.
    ---------------------------------------------------------------------------
        In that regard, the State of New Hampshire, Department of
    Environmental Services (DES), was asked to evaluate the waste company's
    so-called ``study.'' DES' report (at p. 4) found that the study was (i)
    ``flawed in its assumptions, reported results, and conclusions,'' (ii)
    based on ``[m]isleading use and reporting of statistics'' and (iii) as
    consequence the study had lost ``any standing it might otherwise claim
    as a meaningful contribution'' to evaluation of these matters (the New
    Hampshire DES' report is attached to this statement). In particular,
    the study made a false comparison of tipping fees at flow controlled
    and non-flow controlled facilities. The result was to inflate
    substantially the tipping fees charged at the flow controlled
    facilities. That was a fundamental error because, as the New Hampshire
    DES explained,

            omitting the cost of integrated waste management service
            provided by public, flow-controlled facilities unfairly
            inflates the reported ``tipping fees'' charged by these
            facilities, and results in a false comparison of disposal costs
            at the public compared to the private facilities (which offer
            no such services).

    Id.
        As a further example of these errors, the study attempted to
    support its claim that flow control costs more by comparing the tipping
    fees charged at Medina, Ohio's modern recycling facitity with the cost
    of waste disposal at landfills in the same region of Ohio. Without
    belaboring the obvious, it costs more to recycle rather than landfill
    waste, and that has nothing to do with flow control.\5\
    ---------------------------------------------------------------------------
        \5\ The so-called study also ignored the difference between the
    tipping fees charged at (i) flow controlled facilities that are subject
    to long-term contractual arrangements with corresponding capacity
    commitments and price stability and (ii) the spot market tipping fees
    at non-flow controlled facilities (for which there are no corresponding
    capacity commitments or price stability). That difference in fees
    reflects a fundamental difference in the two service arrangements and
    is essential for consideration when analyzing the cost impact of flow
    control. Thus, a principal reason why local governments rely on flow
    control is to facilitate long-term, price-stable arrangements for the
    development and financing of waste management facilities and to avoid
    the substantial price fluctuation and capacity uncertainty that is a
    characteristic of the spot market.
    ---------------------------------------------------------------------------
        We should also note that witness Parker's written testimony
    suggested (pp. 9-10) that ``it's too late'' to provide grandfather
    authority for the pre-Carbone uses of flow control that S. 1194 and S.
    2034 would protect because subsequent to Carbone ``contracts have been
    written, people have been hired,'' etc., which ``cannot be undone.''
    Mr. Parker's concern is addressed in the ``Interim Contracts''
    provision of each of the bills. That provision, which was included in
    previous versions of this legislation at the request of waste hauling
    companies, would make reinstatement of flow control authority under
    either bill subordinate to conflicting waste delivery agreements
    entered after a community's post-Carbone suspension of flow control
    authority and prior to enactment of either S. 1194 or S. 2034. See sec.
    3 of S. 1194, proposed Sec. 4012(g) of title 42; sec. 5 of S. 2034,
    proposed Sec. 4014(g) of title 42.
        2. Impact on Competition. It should also be emphasized that flow
    control is not anticompetitive or anti-private enterprise. In
    considering this point it is important to bear in mind that communities
    which on flow control also rely to the maximum extent possible on
    private enterprise for their waste management infrastructure. The
    members of the Coalition submitting this statement are a case in point.
    The clear majority of the recycling/waste management facilities with
    respect to which our members exercise flow control authority are
    privately owned and/or operated. National trends are fully consistent.
    Thus, as EPA has emphasized, ``it is noteworthy that the private sector
    has an ownership or operational role for 84 percent of WTE [waste-to-
    energy] throughput, including most of the larger WTEs.'' See Report to
    Congress on Flow Control at III-58. State and regional statistics show
    the same pattern. For example, the Pennsylvania Waste Industries
    Association, which represents private companies engaged in the
    operation of landfills, transportation of solid waste, recycling and
    related services, has estimated that its members provide 75 percent of
    all of the municipal waste processing and disposal services within
    Pennsylvania. A key factor here has been complementary public-private
    relationships for which flow control is a principal component.
        Finally, the tipping fees charged for municipal solid waste
    management services in communities that rely on flow control are based
    on cost and are the result of competitive bidding in the private
    marketplace for the necessary waste management services. Those fees
    recover the costs of various solid waste management services that are
    provided--recycling, household hazardous waste collection, composting,
    public education, resource recovery (waste-to-energy), etc. Such
    tipping fee-derived revenues do not cross-subsidize non-solid waste
    management services. Moreover, S. 1194 and S. 2034 specifically limit
    the use of flow control-derived revenues to payment of debt service on
    bonds (or similar contractual obligations) for eligible facilities,
    necessary operations and maintenance expense for those facilities and
    recycling, composting and household hazardous waste program expenses.
    Thus, as noted above, the authority the bills provide is self-limiting
    and will be invoked only where necessary and only for the period
    necessary. In short, that authority will be used only where waste flow
    to a designated facility during the term of the above-described
    obligations is not otherwise sufficient--absent use of such legislative
    authority--to meet the expenses specified in S. 1194 and S. 2034.
                                 v. conclusion
        In conclusion, the Coalition appreciates the opportunity to provide
    the foregoing views to the committee. We respectfully urge the
    committee to proceed expeditiously with consideration of S. 1194 and S.
    2034, and we pledge our full efforts to assist in that process.

                                   __________

       Statement of Mark Lennon and Patrick Pinkson-Burke, Planning and
    Community Assistance Section, Waste Management Division, New Hampshire
                      Department of Environmental Services
    ``The Cost of Flow Control'': Critical Review of the National Economic
         Research Associates Analysis, Commissioned by Browning-Ferris
                                   Industries
                                  introduction
        Browning-Ferris Industries (BFI) recently commissioned National
    Economics Research Associates (NERA) to estimate the costs (if any)
    passed onto consumers as a result of flow control. The resulting study,
    ``The Cost of Flow Control,'' was released in May 1995.
        The study, which concludes that, in general, flow control adds
    significantly to the cost of solid waste management in the U.S., has
    been given wide circulation, and has been used to support a number of
    arguments against flow control (e.g., Woods and Aquino. ``Late Breaking
    News,'' Waste Age, June 1995, page 12). Because of the interest of New
    Hampshire's Congressional delegation in this issue--and in particular
    New Hampshire Senator Bob Smith's sponsorship of flow control
    legislation--the N.H. Department of Environmental Services (DES)
    undertook a critical review of the assumptions, methodologies, results,
    and conclusions of the NERA study. DES's analysis finds that the NERA
    study is flawed in a number of areas. These flaws cast serious doubt,
    and in some cases appear to reverse, the NERA conclusions about the
    economic impacts of flow control.
        In presenting these results, it is not DES's intention to advocate
    for or against a specific position in the flow control debate. Instead,
    the Department hopes that its analysis of the NERA report will
    contribute to a full, fair, and accurately grounded debate about the
    merits of flow control, which is perhaps the most important solid waste
    issue which will be considered by Congress and the Nation in this or
    the coming year.
                                    critique
    Costs Compared in Public (Flow-Controlled) vs. Private Facilities
        The study accurately points out that flow control is used by local
    governments for two primary reasons: (1) to protect financial
    investments in solid waste facilities, and (2) to generate revenue that
    finances integrated waste management (IWM) programs (e.g., recycling,
    public education, household hazardous waste collection, composting, and
    others). Having recognized that public facility tipping fees typically
    fund IWM programs while private facility fees do not, the NERA study
    ignores both the cost and waste management implications of this fact in
    its econometric model and case studies.
        The public typically views IWM programs funded through tipping fees
    as a ``free'' addition to locally provided waste management service. As
    a result, they tend to use these programs more heavily than if
    recycling, HHW collection, composting, and other IWM programs were
    billed on a fee-for-service basis. This behavior leads to increased
    diversion of materials to recycling and composting programs, to a
    typically significant reduction in the volume of waste requiring
    ultimate disposal (which extends facility life, and/or reduces the
    number of disposal facilities required to serve a given population),
    and to the diversion from disposal facilities of many of the most toxic
    constituents in MSW.
        The private facilities cited in the NERA study, on the other hand,
    do not offer any of these IWM services. Their ``tipping fee'' is
    exactly that--the cost to dump rubbish into a landfill or into the pit
    of an incinerator.
        To yield an accurate comparison of tipping fees at public, flow-
    controlled disposal facilities against those at private facilities, the
    NERA model and case studies should have identified and eliminated the
    costs of IWM programs at the flow-controlled facilities, or added the
    cost of comparable IWM programs to the reported tipping fees at private
    facilities. Failing to do so, NERA's econometric analysis and case
    studies have ignored what is probably the single most important
    variable that differentiates public, flow-controlled facilities from
    private disposal sites. The study compares apples to watermelons, end
    the comparison is invalid.
    The Difference Between Cost and Price
        A second flaw in the economic calculations reported by NERA is that
    they fail to differentiate between tipping prices and the actual costs
    incurred by private firms to construct and operate disposal facilities.
    The study notes that ``disposal charges are . . . failing as disposal
    facilities compete for more business'' (a fact largely attributable to
    the success of publicly-funded and operated source reduction and
    recycling programs). However, such decreases in the price of MSW
    disposal do not reflect a change in the underlying cost to provide
    disposal services; on the contrary, the costs to construct and operate
    a disposal facility in compliance with RCRA and other regulations are
    almost certainly increasing, the distinction can be critical, because
    while public facilities must set prices to cover all relevant capital
    and operating costs (including those of associated IWM programs),
    private facilities typically set prices to maintain cash flow and
    market share--and are often willing and able to operate at a short-term
    loss in order to insure longer term success. Thus, although the prices
    charged by public and private facilities may differ, it is unlikely
    that underlying costs vary as much--the private facility tipping fees
    quoted in the NERA report may understate the actual costs of operating
    these facilities profitably. This situation may change, perhaps
    dramatically, when disposal markets change and the private facilities
    see the opportunity to recoup additional costs and increase profits.
    Reporting of Statistical Output
        A third significant flaw in NERA's report is its treatment of the
    statistical output of its econometric model. In tables and figures
    which compare tipping fees with and without flow control at different
    facility types, NERA reports price differences as if they were
    statistically certain, but gives no information at all about the actual
    statistical reliability of these results. For example, the study
    reports a ``statistically significant'' relationship between flow
    control and tipping fees, but provides no information about whether
    other variables analyzed had a similar or greater impact on tipping
    fees, nor upon its use of the term ``statistically significant'' in
    this case. At a minimum, the study should have reported R-squared
    values, confidence intervals, and probability values for all of the
    independent variables used in its regression analysis. Going further--
    especially given the sweeping nature of its conclusions regarding the
    cost impacts of flow control--NERA should have provided the complete
    statistical output of its model (similar to that provided in its
    ``Regression Output Example'') to allow readers to make an independent
    analysis of the statistical validity and implications of NERA's
    reported results.
    Calculation of Mileage Costs for MSW Transportation
        In its case study analysis, NERA's calculation of disposal costs at
    private facilities include a calculation of the cost to transport MSW
    to each facility cited. This calculation is flawed in two respects:
        First, the reported costs are based on one-way transportation to
    the disposal facility. Because solid waste vehicles rarely backhaul a
    revenue generating load, these are inaccurate--round-trip costs are the
    true (and universally reported) measure of the cost to transport MSW to
    a disposal facility. All transportation costs to private disposal
    facilities reported in the NERA study should therefore be doubled.
        Second, NERA's cost data are based on mileage figures ($0.057/ton-
    mile) published in April 1991, and are outdated. More recent data
    suggest that the cost per mile of transporting solid waste by highway
    in the United States (in 22-ton trailer loads) ranges from
    approximately $1.45 per mile to as much as $2.10 per mile, with an
    average of approximately $1.77 per mile. This equates to a value of
    $0.081 per ton-mile, 42 percent greater than the figure used in the
    NERA study (Paul Ligon, Tellus Institute, Boston, MA, telephone
    communication, June 16, 1995). This cost tends to increase with shorter
    hauls, and increase proportionately with loads smaller than 22 tons.
                                the case studies
        To evaluate the impacts of these flawed assumptions on the results
    and conclusions of the NERA study, we recalculated their reported costs
    using more complete tipping fee data and current transportation costs.
    Although all three of the public, flow-controlled facilities reported
    that their ``tipping fees'' cover a wide range of IWM programs in
    addition to MSW disposal (Table 1), only one facility (The Onondaga
    County, NY, Resource Recovery Authority, or OCRRA) was able to provide
    separate budget data for these ancillary programs. Our analysis
    therefore concentrates on this facility.
        The Onondaga County (NY) Resource Recovery Authority (OCRRA) (Table
    2) operates a waste-to-energy Incinerator and recycling center: that
    have been operational since November 1994. OCRRA charges $99/ton for
    waste brought to its facility. Based on current budget figures, eleven
    percent of this disposal fee, or $10.89/ton, is dedicated to an
    integrated waste management program that includes recycling, battery
    collection, household hazardous waste collection, and public education.
    In addition, the monthly proceeds from the sale of electricity are
    returned to haulers in the form of a rebate. This rebate has varied
    from a minimum of $5.50 per ton to as much as $15.50 per ton. In recent
    months the rebate has been $7.50 per ton. With these corrections, the
    ``tipping fee'' at OCRRA--that is, the charge to dispose of rubbish
    that is directly comparable to the tipping fees NERA cites for
    alternative disposal facilities--is $80.61 per ton (with current rebate
    levels)
        The ``competing'' disposal facilities cited by NERA are private
    facilities. The tipping fees at these facilities cover disposal only,
    and do not include the suite of IWM services offered by OCRRA. In
    addition, at least one of these facilities (the Charles Point Resource
    Recovery facility) requires a plant upgrade to bring it into compliance
    with State and Federal environmental requirements, while the OCRRA
    facility is in full compliance with these laws and regulations (K.
    Markussen, NY Dept. of Environmental Conservation, personal
    communication). Using the appropriate round-trip mileage to these
    facilities and the more up-to-date average hauling cost of $0.081 per
    ton mile, the average disposal costs at the alternative facilities
    increases to $89.47/ton (compared to the $73.69 reported by NERA), with
    a range of $76.34/ton to $106.87/ton. Only one of the seven alternative
    facilities cited by NERA in fact offers a total fee (for disposal plus
    hauling) that is less than OCRRA's current $80.61 and OCRRA's tipping
    fee is in fact $8.86 less than the average of the seven alternative
    private facilities. This savings stands in stark contrast to the
    supposed $19.81 average tipping fee penalty reported in the NERA study.
        The remaining two facilities analyzed by NERA (Metro Park East
    Landfill and Transfer Station, Des Moines, IA, and Medina County
    Materials Recovery Facility, OH) were unable to provide complete
    accounting data on the cost of the integrated waste management services
    included in their disposal fees. However, based on the range of IWM
    services they offer (Table 1), one can assume that the portion of their
    disposal fees devoted to IWM are similar to that reported by OCRRA, and
    that the ``tipping'' portion of their disposal fees should be reduced
    accordingly. Even without complete accounting data from these
    facilities, however, one can reach the following two conclusions:
        At the Des Moines public facility, NERA reports a savings to users
    of $4.26 per ton compared to competing private disposal facilities.
    When more accurate transportation cost estimates are included in the
    analysis, this savings increases to $15.19 per ton, even without
    accounting for the portion of Des Moines costs attributable to IWM
    (Table 3). If these additional cost elements were subtracted from the
    Des Moines ``tipping fee,'' the savings to users of this facility would
    be even greater.
        At the Medina County public facility, NERA reports a cost penalty
    to users of $20.99 per ton compared to disposal costs at competing
    private facilities. More accurate transportation cost data, combined
    with a recent reduction in the Medina County facility's disposal fee,
    cut this cost differential by more than half, to $8.70 per ton. Given
    the extent of integrated waste management services included in the
    Medina County MRF disposal fee (see Table 1), one can infer that this
    cost differential would be eliminated or reversed if IWM costs were
    excluded from the ``tipping fee'' reported by NERA.
                                   conclusion
        The NERA study is flawed in its assumptions, reported results, and
    conclusions. Misleading use and reporting of statistics undermines the
    validity and credibility of the results reported from NERA's
    econometric analysis. In both its modeling and case study analysis,
    NERA confounds tipping prices with the actual cost of providing MSW
    disposal, a decision which has the inevitable effect of creating an
    apparent price advantage for privately operated facilities. Erroneous
    assumptions about the cost of transporting MSW to alternative disposal
    facilities unfairly deflate the reported cost of using these
    facilities. Meanwhile, omitting the cost of integrated waste management
    services provided by public, flow-controlled facilities unfairly
    inflates the reported ``tipping fees'' charged by these facilities, and
    results in a false comparison of disposal costs at the public compared
    to the private facilities (which offer no such services). Omission of
    any discussion of these services in they NERA report also ignores the
    valid societal goals that are supported by source reduction, recycling,
    HHW collection, and other aspects of integrated waste management, and
    the duty of public authorities to respond to public (and frequently
    legislative) mandates to provide these services.
        The NERA study ignores or misinterprets these critical aspects of
    solid waste management. In doing so, it vacates any standing it might
    otherwise claim as a meaningful contribution to the ongoing debate
    about flow control and control broader waste management issues in this
    country.

    Table 1.--Integrated Waste Management Costs Covered by `` Tipping Fees''
          at Public, Flow-controlled Facilities Cited in the NERA Study
    ------------------------------------------------------------------------
                                                Costs included in ``tipping
                    Facility                               fee''
    ------------------------------------------------------------------------
    Onondaga County (NY) Resource Recovery    MSW Disposal; Ash Disposal;
     Authority \1\.                            Recycling; Household Battery
                                               Collection; Household
                                               Hazardous Waste Collection;
                                               Public Education (Note:
                                               Proceeds from sale of
                                               electricity are also returned
                                               to haulers as a rebate--see
                                               text)
    Des Moines (IA) Metro Park East Landfill  MSW Disposal; Recycling;
     and Metro Park Transfer Station \2\.      Household Hazardous Waste
                                               Collection; Composting;
                                               Public Education; Setaside
                                               for Future Construction of
                                               New Landfill
    Medina County (OH) Material Recovery      Collection of Recyclables:
     Facility \3\.                             Operation of MRF; Collection;
                                               Transportation, and Disposal
                                               of MSW at Private
                                               incinerator; Battery
                                               Collection; Household
                                               Hazardous Waste Collection;
                                               Composting: Public Education;
                                               Setaside for Future
                                               Construction of New Landfill
    ------------------------------------------------------------------------
    Notes:
    \1\ Source: Andy Brigham, OCRRA, personal communication, June 14, 1995.
    \2\ Source: Landfill Manager, Des Moines Metro Park East Landfill,
      personal communication, June 12, 1995.
    \3\ Source: Ken Holtz, Medina County MRF, personal communication, June
      20, 1995.

               Table 2.--Comparative Disposal Costs: Onondaga County, NY and Competing Private Facilities
    ----------------------------------------------------------------------------------------------------------------
                                                                 Disposal                           Total     NERA
                                                                 Fee only  Cost per   Roundtrip   cost ($/    total
         Name of disposal facility                Type            ($/ton)  ton/mile    distance     ton)    cost ($/
                                                                    \1\     ($) \2\  (miles) \3\   3+(4x5)  ton) \4\
    ----------------------------------------------------------------------------------------------------------------
    1. Onondaga County Res. Recovery     IN....................    $80.61     0.081           0     $80.61    $83.50
     Fac..
    2. Charles Point R&R Facility Inc..  IN....................     53.75     0.081         370      83.72     64.26
    3. Modern Landfill.................  LF....................     58.26     0.081         300      82.56     66.78
    4. Energy from Waste/Am. Ref-Fuel,   IN....................     60.00     0.081         300      84.30     68.52
     Niagra.
    5. WMI/High Acres Sanitary LF......  LF....................     65.00     0.081         140      76.34     68.98
    6. Am. Ref-fuel WTE Inc............  IN....................     69.00     0.081         420     103.02     80.93
    7. Adirondack Resource Recovery      IN....................     85.00     0.081         270     106.87     92.67
     Facility.
    8. Average Disposal Costs at           ....................                                      89.47     73.69
     Alternate Facilities.
    9. Disposal Savings from Flow          ....................                                      $8.96  ($19.81)
     Control (Row 8-Row 1).
    ----------------------------------------------------------------------------------------------------------------
    Sources and Notes:
    Based upon the NERA study entitled ``the Cost of Flow Control'', dated May 3, 1995.
    \1\ Tipping few at Onondaga is actually $99.00/ton. This includes recycling services, composting, battery
      program and HHW collections. These programs are 11% of the total budget. If removed, the tipping fee is
      lowered to $88.11/ton. In addition, Onondaga rebates the vale of electricity back to the haulers every month.
      This has ranged from a minimum of $5,50/ton to a high of $15.50/ton. The current rebate of $7.50 would lower
      the tipping fee to $80.61 for actual disposal fees only--and to $91.50 for all services. (per private
      conversation with Andy Brigham. OCRRA, 6/14/95) All other facilities are privately owned and offer minimal
      integrated waste management services.
    \2\ Per conversation with the Tellus Institute in Boston, hauling costs in the U.S. range from $1.45/mi to $2.10/
      mi depending upon local labor, insurance, and operating costs. This is based upon round trip mileage. The
      average cost would be $1.775/22 tons, or $.081/ton/mile. June 16, 1955.
    \3\ Round trip mileage based upon the doubling of miles listed in the NERA case studies.
    \4\ The final column list the total costs that NERA calculated. This is provided for comparison purposes only.

                  Table 3.--Comparative Disposal Costs: Des Moines, IA and Competing Private Facilities
    ----------------------------------------------------------------------------------------------------------------
                                                                  Tipping                           Total     NERA
                                                                 fee only  Cost per   Roundtrip   cost ($/    total
         Name of disposal facility                Type            ($/ton)  ton/mile    distance     ton)    cost ($/
                                                                    \1\     ($) \2\  (miles) \3\   3+(4x5)  ton) \4\
    ----------------------------------------------------------------------------------------------------------------
    1. Metro Park East Landfill........  LF....................    $25.OO     0.081           0     $25.00    $25.00
    2. Delaware Co. Sanitary Landfill..  LF....................      7.50     0.081         270      29.37     15.17
    3. North Dalas Sanitary Landfill...  LF....................     14.00     0.081          60      18.85     15.70
    4. Cerro Gordo Co. LFN, Iowa.......  LF....................     16.00     0.081         220      33.82     22.25
    5. Dickson Co. Sanitary LF.........  LF....................     18.00     0.081         300      42.30     26.52
    6. Tri-County Disposal TS..........  TS....................     18.00     0.081         320      43.92     27.09
    7. Ames-Story Environmental Corp.    LF....................     28.71     0.081          60      33.57     30.41
     LF.
    8. Palo Alto Co. Sanitary LF.......  LF....................     28.00     0.081         240      47.44     34.82
    9. Winnebago Co. Sanitary LF.......    ....................     30.00     0.081         260      51.06     37.39
    10. Cass Co. Sanitary LF...........    ....................     50.00     0.081         140      61.34     53.98
    11. Average Disposal costs at          ....................                                      40.19     29.26
     Alternate Facilities.
    12. Savings from Flow Control (Row     ....................                                   $15.19 \     $4.26
     11-Row 1).                                                                                         5\
    ----------------------------------------------------------------------------------------------------------------
    Sources and Notes:
    Based upon the NERA study entitled ``the Cost of Flow Control'', dated May 3, 1995.
    \1\ Tipping few at Onondaga is actually $26.00/ton. This fee includes recycling services, composting, a battery
      program and HHW collections. These programs are inseparable from the tipping fee. This facility is publicly
      owned. (per conversation with Des Moines Metro Park East LF Mgr. 6/12/95). All other facilities are privately
      owned and operated and do not offer integrated waste mangement.
    \2\ Per conversation with the Tellus Institute in Boston, hauling costs in the U.S range from $1.45/mi to $2.10/
      mi depending upon local labor, insurance, and operating costs. This is based upon round trip mileage. The
      average cost/mi would be $1.775/22 tons, or 5.081/ton/mile. June 16, 1955.
    \3\ Round trip mileage based upon the doubling of miles listed in the NERA case studies.
    \4\ The final column list the total costs that NERA calculated. This is provided for comparison purposes only.
    \5\ This is the minimum savings. Metro LF disposal fees include the cost of IWM. If these costs were excluded
      from the Metro disposal fees, the actual ``tipping fees'' for disposal only would be less than $25.00/ton and
      the savings would be even greater when compares with the competing private facilities.

         Table 4.--Flow Control in Medina County, OH Provides Integrated Services At The Extra Cost of $8.70/ton
                                        (Includes Composting, Recycling, and HHW)
    ----------------------------------------------------------------------------------------------------------------
                                                                  Tipping                           Total     NERA
                                                                 fee only  Cost per   Roundtrip   cost ($/    total
         Name of disposal facility                Type            ($/ton)  ton/mile    distance     ton)    cost ($/
                                                                    \1\     ($) \2\  (miles) \3\   3+(4x5)  ton) \4\
    ----------------------------------------------------------------------------------------------------------------
    1. Medina County MRF...............  TS....................    $52.50     0.081           0     $52.50    $58.00
    2. American LF.....................  LF....................     25.00     0.081          90      32.29     27.56
    3. Mahoning LF.....................  LF....................     25.00     0.081         120      34.72     28.41
    4. City of East Liverpool LF.......  LF....................     26.01     0.081         140      37.35     29.99
    5. RC Miller TS....................  TS....................     28.71     0.081          70      34.38     30.70
    6. BFI/Carbon Limestone Sanitary LF  LF....................     30.00     0.081         100      38.10     32.84
    7. BFI/Lorain Co. LF...............  LF....................     34.47     0.081          40      37.71     35.61
    8. Laidlaw/Cherokee Run-             LF....................     30.00     0.081         220      47.82     36.25
     Belletontaine LF.
    9. Athens-Hocking LF...............  LF....................     30.00     0.081         240      49.44     38.82
    10. Laidlaw/Williams Co. LF........  LF....................     31.00     0.081         280      53.68     38.95
    11. WMI/Evergreen Recycling/         LF....................     35.55     0.081         180      50.13     40.66
     Disposal LF.
    12. Royalton Rd Sanitary LF........  LF....................     43.50     0.081          30      45.93     44.35
    13. Northern OH Waste TS...........  TS....................     46.60     0.081          30      49.03     47.45
    14. Doherty LF.....................  LF....................     47.50     0.081         140      58.84     51.48
    15. Average Disposal Costs at          ....................                                      43.80     37.01
     Alternate Facilities.
    16. Extra Cost of Integrated Waste     ....................                                       8.70     20.99
     Mgt (Row 1-Row 15).
    ----------------------------------------------------------------------------------------------------------------
    Sources and Notes:
    Based upon the NERA study entitled ``the Cost of Flow Control'', dated May 3, 1995.
    \1\ Tipping few at Medina Co. MRF as of 7/1/95 is actually $62.50/ton. This includes recycling services,
      composting, battery program, public education and HHW collections. These programs are inseparable from the
      tipping fee. This facility is publicly owned. All other facilities are privately owned and operated and offer
      minimal integrated waste management services.
    \2\ Per conversation with the Tellus Institute in Boston, hauling costs in the U.S range from $1.45/mi to $2.10/
      mi depending upon local labor, insurance, and operating costs. This is based upon round trip mileage. The
      average cost/mi would be $1.775/22 tons, or $.081/ton/mile. June 16, 1995.
    \3\ Round trip mileage based upon the doubling of miles listed in the NERA case studies.
    \4\ The final column list the total costs that NERA calculated. This is provided for comparison purposes only.

                        ____________________________________________________
    Statement of Joyce Doughty, Director, Fairfax County Division of Solid
                       Waste Disposal & Resource Recovery
                                  introduction
        Mr. Chairman, members of the committee, thank you very much for the
    opportunity to present testimony on the Solid Waste Interstate
    Transportation and Local Authority Act of 2001, (S. 1194), a very
    important piece of legislation before this committee. My name is Joyce
    Doughty, and I am the Director of Solid Waste Disposal & Resource
    Recovery for Fairfax County, Virginia.
        S. 1194 is an imperative piece of legislation for Fairfax County,
    Virginia, as well as to communities around the nation. Today, I come
    before you to specifically comment on one provision of S. 1194,
    Congressional Authorization Of State And Local Municipal Solid Waste
    Flow Control.
     consequences of carbone inc. v. town of clarkstown, new york (no. 92-
                                     1402)
        Let me start off by briefing the committee on the situation that
    Fairfax County faces. Municipal solid waste management was a major
    concern for Fairfax County in the 1980's. With rapidly dwindling
    landfill disposal capacity in the County, and in the region, Fairfax
    County developed a comprehensive solid waste management system which is
    centered around a state-of-the-art waste-to-energy facility. This
    system came with a price.
        Fairfax County pro-actively implemented and engineered a solution
    to its needs, building a large waste-to-energy facility. Fairfax County
    entered into an agreement with the firm of Covanta Fairfax, Inc., to
    develop the project. The facility cost over $200 million, which was
    paid for by issuing $252 million in bonds which have been refinanced,
    however $163 million remains outstanding. The bonds have a net annual
    debt service of approximately $20 million. Bonds will remain
    outstanding until February 2011.
        The County has relied on the solid waste fees charged for use of
    this facility to generate revenue to pay off those bonds, and to also
    pay for other solid waste programs, not just disposal. The County
    provides services to its citizens that are both civically and
    environmentally desirable. Included are programs that do not generate
    any, or sufficient, revenues to pay for themselves such as recycling
    education, household hazardous waste collection, citizen's recycling
    and disposal facilities, hauler vehicle inspection, permitting, and
    enforcement. The County relied on solid waste flow control to direct an
    adequate amount of waste to the facility and set tipping fees adequate
    to support the solid waste management system needs. These fees turned
    out to be higher than those charged by mega-landfills later developed
    that do not have such environmental and civic responsibilities.
        However, in 1994 the U.S. Supreme Court placed Fairfax County's,
    and other communities', flow control authority in question in the case
    of Carbone Inc. v. Town of Clarkstown, New York (No. 92-1402). The
    Court found that municipal solid waste is an article of commerce; thus,
    state and local flow control mandates of the type questioned in this
    case violated the commerce clause of the U.S. Constitution.
        The perceived loss of flow control resulted in a steady stream of
    waste, generated in Fairfax County, being shipped down Virginia's
    highways to privately owned megalandfills. Fairfax County took various
    actions to regain control through both legal and financial methods.
    Tipping fees were drastically reduced to compete with the large private
    landfills, resulting in decreased revenues. In order to offset the loss
    of revenues the County has taken both internal and external steps to
    reduce its costs. The County has also applied operating reserves,
    originally intended to be used for capital purchases and as
    environmental reserves, to operating costs. In fiscal year 2002, the
    reserve funds were exhausted and the County was forced to subsidize the
    solid waste system with $5.5 million from the County's General Fund. At
    this level, over the course of the next 9 years the County could spend
    $40 to 50 million from the General Fund to subsidize the program. Thus,
    dollars that could be used for schools, public safety, human services,
    and roads, would be used to assist paying for solid waste including the
    waste-to-energy facility.
        Flow Control provisions of S. 1194 will allow communities from
    around the Nation to resume full use of flow control authorization to
    repay debts that were established before the Supreme Court ruled in the
    Carbone case. It is difficult for a jurisdiction such as Fairfax
    County, and others nationwide, to develop long-term solid waste
    management programs that are environmentally responsible, when the
    ``rules of the game'' can be changed at any time.
               impact of flow control on the solid waste industry
        In 1992, Congress directed the U.S. Environmental Protection Agency
    (EPA) to develop and submit a report to Congress on solid waste flow
    control as a means of municipal solid waste management. The EPA\1\
    found that flow control played a limited role in the solid waste market
    as a whole. However, flow control authority played the largest role in
    financing and funding of waste-to-energy facilities. The EPA also found
    that flow control provided for an administratively effective mechanism
    for local governments to plan for and fund their solid waste management
    systems. Allowing local governments to control the disposition of
    locally generated municipal solid waste allows planners to more
    accurately determine how much waste has to be managed and how effective
    local waste management plans are, further explaining flow control as an
    effective tool for planning and management.
    ---------------------------------------------------------------------------
        \1\ The report was published by the EPA in March 1995 (EPA530-R-95-
    008)
    ---------------------------------------------------------------------------
        Solid waste flow control is of critical importance to Fairfax
    County, Virginia and we urge you to move proposed flow control
    legislation forward. Interstate waste transport legislation is linked
    to flow control legislation in S. 1194. While the interstate waste
    transport portion of the legislation has been at the forefront of
    discussions, we believe that it is critical that flow control
    provisions remain linked to the legislation. The consequences of
    passing an interstate waste bill without flow control could be
    financially devastating to Fairfax County and other municipalities
    around the nation. If private mega-landfills cannot import waste from
    outside the state they will look more closely within the state
    boundaries for alternate sources of waste, and will further undercut
    the ability of local governments to effectively plan and finance solid
    waste programs.
        S. 1194 does not authorize flow control for every community in the
    nation. S. 1194 simply states that communities that had relied on flow
    control, before 1994, to finance debt on the construction of a solid
    waste facility will be able to resume using full flow control measures
    until all publicly funded bonds are paid off. This legislation does not
    authorize new uses of flow control.
        We thank you for your time and would be willing to answer any
    questions that the committee has.

                                   __________

    Statement Michael E. McMahon, Chairman, New York City Council Committee
                    on Sanitation and Solid Waste Management
        Chairman James M. Jeffords and members of the committee, I am
    Michael E. McMahon and represent the North Shore of Staten Island in
    the New York City Council. I am also the Chairperson of the Council's
    Committee on Sanitation and Solid Waste Management.
        As a Staten Islander I believe I am uniquely qualified to as a
    stake holder to state to you that solid waste management including the
    landfill of garbage is a regional issue and the transporting of waste
    across state lines is an activity which must be protected by the
    interstate commerce clause. I implore you to take no steps and
    entertain no action that would limit the protections of the interstate
    commerce clause as they relate to the movement of trash to landfills,
    especially since those protections were recently affirmed by the
    Supreme Court of the United States.
        As you are well aware, the people of Staten Island have suffered
    for more than 50 years the noxious effects of the Fresh Kills Dump,
    which finally closed in March of last year. It was an illegal, unlined,
    unprotected dump and violated Federal, state and city laws. In order to
    keep this dump closed, the city of New York has developed an interim
    and long-term plan for the handling of its waste. An integral part of
    this plan is the export of solid waste to out-of-state landfills. These
    sites are environmentally sound and legal. They are lined and provide
    economic benefit to the area in which they are located. They are a good
    resource to urban areas irrespective of state boundaries.
        Of course, the city of New York must develop and adhere to a solid
    waste management plan that not only exports its trash, but is founded
    on the principles of reusing, recycling, and reducing our trash. I
    commit to you that the City Council of New York City will work on a
    plan to realize these goals. But even when we adhere to environmentally
    sound practices, the City will need to export a portion of its solid
    waste. The density of our population and the direction of rail lines as
    they exist require interstate export. This export will only be to
    landfills that are legally operated and welcome the trash.
        In conclusion, it is respectfully requested that the export and
    transport of solid waste is a protected activity under the interstate
    commerce clause and I urge you on behalf of all New Yorkers to maintain
    this protection.
        Thank you.
                                   __________

                             Association of American Railroads,
                                         Washington, DC, April 9, 2002.
    Hon. James M. Jeffords, Chairman
    U.S. Senate,
    Washington, DC.
        Dear Mr. Chairman: The Association of American Railroads (AAR)
    submits the following comments in connection with the committee's March
    20, 2002 hearing on interstate waste. AAR opposes legislation to
    restrict the interstate transportation of municipal solid waste, or to
    ban it outright in the absence of a host community agreement. Although
    well intentioned, such legislation would diminish opportunities to
    optimize environmental protection, impose an inappropriate burden on
    interstate commerce, and unnecessarily distort consumer markets.
        America's railroads play a key role in the safe and efficient
    transportation of municipal solid waste to state-of-the-art disposal
    facilities. In many cases, these sophisticated facilities have replaced
    smaller, local landfills that were forced to close because they failed
    to comply with stringent new environmental requirements. As the
    committee heard from New York City Department of Sanitation's Leslie
    Allan,

            . . . the more rigorous environmental protections required
            under Subtitle D of the Resource and Conservation and Recovery
            Act (RCRA) have compelled communities to replace old, small
            landfills with larger, costlier, state-of-the-art, regional
            facilities that comply with the law. In this context, the right
            to transport solid waste across state lines complements the
            basic reality that different regions have varying disposal
            capacities irrespective of state lines. . . . Areas such as New
            York City and Chicago, lacking adequate space for landfills
            and/or prohibited from waste incineration, may be located
            closer to better and more cost-effective facilities in other
            states. These facilities need the additional waste generated
            elsewhere to pay for part of the increased cost of RCRA
            compliance.

    This testimony offers a compelling example of the necessity of
    interstate waste shipments, and the mutual benefits that inure to the
    geographic areas involved.
        For these reasons, AAR opposes S. 1194, introduced by Senator Arlen
    Specter, and S. 2034, introduced by Senator George Voinovich. Enactment
    of such legislation would impede the free market and limit the
    availability of environmentally--beneficial, cost-effective waste
    management options. In the end, the Nation would be less well off
    because of the barriers the measures would erect to the free flow of
    commodities across state lines.
        Under the Constitution, Congress is vested with the power to
    ``regulate Commerce . . . among the several states.'' Consistent
    adherence to this principle has helped to create a seamless U.S.
    economy and the finest transportation network in the world. The
    enactment of interstate waste prohibitions and limitations would
    balkanize waste management and create a troubling precedent that
    Congress might subsequently choose to extend to other commodities.
        Moreover, this balkanization of waste management along state and
    local lines would sharply drive up consumer costs. Under the proposed
    legislation, states might be forced to replicate facilities that
    already exist in other jurisdictions. These new landfills might not be
    as environmentally protective as larger, regional facilities because
    the cost structure of advanced sites often depends on substantial
    economies of scale. Furthermore, by cutting off access to multi-state
    supplies of municipal solid waste, the bill would make investment in
    large regional facilities less likely in the future.
        Public officials must focus on how to ensure that solid waste is
    managed in the most environmentally responsible manner. Railroads agree
    that the answer lies in allowing solid waste to flow to the best new
    regional facilities, as provided for in legally--binding host community
    (or other) agreements, which incorporate state-of-the-art technology
    and that meet or exceed Environmental Protection Agency regulations.
        AAR appreciates this opportunity to submit comments on S. 1194 and
    S. 2034. I respectfully request that my statement be made a part of the
    record in connection with the March 20, 2002 hearing before the
    committee on this legislation.
                Sincerely,
                                           Edward R. Hamberger.