[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
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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
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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\
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\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\
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\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'').
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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\
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\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.
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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\
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\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.
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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.
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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\
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\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.