[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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                          WASHINGTON : 2004
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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

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



                            C O N T E N T S

                              ----------                              


                             MARCH 20, 2002

                           OPENING STATEMENTS

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

                               WITNESSES

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

                          ADDITIONAL MATERIAL

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


                   INTERSTATE WASTE AND FLOW CONTROL

                              ----------                              


                       WEDNESDAY, MARCH 20, 2002

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

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

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

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

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

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

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

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

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

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

    Senator Baucus. Senator Warner.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Mr. Parker. Mr. Chairman, Senators Warner, Voinovich, and 
Clinton, I appreciate the opportunity to be here today. My name 
is Bruce Parker, and I'm the president of the National Solid 
Waste Management Association. We represent all the private 
companies in the United States, large and small, that every day 
pick up and put down, recycle, and process and dispose of solid 
waste.
    Before I begin, Senator Warner, I wanted to carry on with 
your athletic metaphor. I guess I'm the blocker on the one yard 
line today. I think that the story that I have to tell 
represents my helmet and armor because I think it is a story 
that has never been or has not been as clearly articulated as 
the other side, and I am happy to do that today.
    The message I want to leave you with is very simple, and 
that is that borders have no legitimate role in managing solid 
waste or any commodity, for that matter, in interstate 
commerce. They make neither economic nor environmental sense. 
They are contrary to the trend toward bigger and better 
facilities, toward more innovative and flexible facilities. For 
these reasons, NSWMA and its members oppose on principle S. 
1194, and for that matter, any legislation that would authorize 
Congress to restrict, impede, or otherwise prevent the free 
transportation of garbage in interstate commerce.
    In spite of all the impassioned language that everybody has 
heard and the demonization of garbage moving in interstate 
commerce, the reality is quite simple. Every day--and if you 
look at that chart right there that we have prepared, if you 
would please--every day trash moves across State borders in a 
very extensive and intricate web of transactions, mostly 
between contiguous States, and also involving both imports and 
exports.
    As a matter of fact, out of all the waste generated in the 
United States that moves in interstate commerce, we are talking 
about 30 million tons, which only constitutes about 7 percent. 
We are only talking about less than 10 percent that is actually 
disposed of.
    According to the Congressional Research Service's latest 
update on its report on interstate commerce, 46 States exported 
garbage and 42 States imported garbage. Only one State neither 
imported or exported. Twenty-four States, the District of 
Columbia, and Ontario exported more than a thousand tons. At 
the same time, 28 States imported more than 100,000 tons. Ten 
States, ranging in size from Vermont to New York, exported more 
than 15 percent of their waste.
    Garbage, like recyclables or raw materials or finished 
products, doesn't pay any attention to artificial State 
restrictions, like cars or tomatoes, when it moves in 
interstate commerce. Let me just give you the broader context, 
if I may, why this has happened.
    The result of all this is clearly related to Federal and 
State environmental policy. In 1990, this country had 10,000 
landfills. Today we have less than 2,600. Why? Because Federal 
EPA and Congress, Congress particularly, promulgated the 
Resource Conservation and Recovery Act, subtitle D. That act 
basically put all the substandard landfills out of business. 
Between, I think, 1993 and 1998, 51 percent of the substandard 
landfills in all the States were closed down.
    States also required even more strict environmental 
standards because they have their right under RCRA to do that: 
financial assurance, double liners; you name it, and my members 
have complied with it. So environmental policy has dictated 
better environmental protection and protection of human health.
    Let me just talk a moment also about the fact of contiguous 
States. There are many communities that rely upon landfills not 
in their own State because they're more closely related to 
landfills in other States. Chicago is a perfect area. Illinois 
has abundant landfill, but the counties around Chicago, they 
can go north, they think, up to Illinois, and they can go south 
to Indiana. It makes more sense. They're going to good, state-
of-the-art facilities.
    Last, host community agreements, some of the speakers have 
talked about those. There are many communities in every single 
State that takes out-of-state waste that look upon this as any 
type of industrial activity. It is an opportunity for jobs, and 
it is an opportunity for revenue.
    In the State of Virginia, the great State of Virginia, as a 
matter of fact, there are communities, poorer communities, that 
have relied on garbage coming in, environmentally well-suited 
landfills, to protect public health and the environment. Those 
monies pay for schools, for roads, for recreational facilities, 
as well as in Pennsylvania.
    I just testified yesterday in Cleveland about some 
comparable bills, and I will tell you that many of the public--
I beg your pardon, in Lansing, MI; excuse me, Senator--many of 
the communities in Lansing, MI, the public communities are also 
accepting out-of-state waste as well as in other States.
    And I will end my remarks by just talking about flow 
control in one paragraph, if I may. In 1995----
    Senator Baucus. A short paragraph.
    Mr. Parker. Very short. I talk quickly. I'm from the East.
    [Laughter.]
    In 1995, the New York State Conference of Mayors and 
Municipal Officials testified in this very same room against 
flow control, stating that, ``Flow control adds unnecessary 
spending to a village or a city's bottom line,'' and giving 
examples of cities wasting money on county authority disposal 
schemes they had no control over.
    In 1997, Congressman Pascrell testified here against flow 
control, citing his experience as Mayor of Paterson, New 
Jersey, and the bipartisan opposition to it. One of those 
members was Jim McGreevy, then Mayor, who is the current 
Governor of New Jersey, of Wood-Ridge at that time. Pascrell 
testified that flow control ``allows governments to create 
monopolies which leads to costs sometimes up to an extra 40 
percent being dumped on consumers.'' And trust me, things have 
not changed. The more innovative communities that built 
facilities with flow control have found ways to lower taxes, 
lower costs, and be more efficient in doing it.
    Thank you, sir.
    Senator Baucus. Thank you very much, Mr. Parker. I will ask 
my first question of you.
    Of course, the legislation we are talking about doesn't 
prohibit a State from accepting garbage from another State, 
does it? It provides that a governor of a State can decide at 
its own discretion whether or not to accept. It would just seem 
to me that, given the discretion of a State whether or not, 
that that would encourage the exporting State to work out some 
agreement with the tentative importing State. So perhaps under 
some terms the importing State would say, ``Yes, that's a 
pretty good idea,'' listening to the concerns, say, of a host 
community.
    Of course, the host community should not--most people in 
the State decide the fate of so many other people in that 
State. There could be many, many people in the State who don't 
want that garbage to go through their town on the way to the 
host community. In addition, many States like to have some 
sense of their own economic development and plan it in some way 
themselves.
    Of course, what you are advocating would prohibit that. It 
would, in a sense, say that some outlier could come on in, 
irrespective of the State economic development plan, if a local 
community wanted to do something a bit different. Frankly, what 
it might do--that is, this legislation--is encourage States to 
spend more time with those local communities that want some 
economic development.
    So I just don't understand the argument that you're 
essentially making that States should not have the ability, at 
their own discretion, to say ``no'', which, as we know, in the 
practical world probably will mean sometimes ``no,'' sometimes, 
``well, no, but--'' and some other arrangement. Whereas, on the 
alternative, when States have no authority to say ``no'', 
there's less incentive to work out an accommodation among 
States and among State governments along with their 
communities.
    I just don't understand at all why--the better approach is 
to try to work out these agreements, and that would happen with 
legislation that would give States discretion.
    Mr. Parker. May I answer that, sir?
    Senator Baucus. Absolutely.
    Mr. Parker. Thank you so much. The bills we are talking 
about, first of all, begin with a prohibition. There's a 
complete ban, and then there's exceptions to that ban.
    It is interesting because Mr. Hess, who is from 
Pennsylvania, testified today, as well as he did last August 
before the House, that he is for host community agreements. The 
problem with these bills is that what you see is not really 
what you get. There are so many exceptions. There's ratchets. 
There's caps. There's reopeners. Basically, companies who have 
relied upon contracts, who have relied upon the Commerce 
Clause, who have built these large facilities in response to 
environmental policy, would essentially be stripped down. So 
these bills are fatal in that regard. They really give you a 
lot less than what you get.
    Really, I'm sympathetic to this. I live in Scranton, PA, as 
I said. There are huge mega-landfills there. The trucks that 
Senator Specter talked about, I see those myself.
    But, you know, this is an equity question. It is not an 
environmental question. It is not a health question. It is not 
about trucks. There are other ways of dealing with those 
things.
    States right now, even if they allow garbage to come in, in 
their whole solid waste plan with giving permits and zoning 
requirements, and so forth and so on, there are less 
restrictive means of doing that than closing the----
    Senator Baucus. But you're avoiding my central question. 
The central question is: What's wrong, as a general rule, for 
States having the discretion to say ``no''? What's wrong with 
giving them discretion, not a prohibition, discretion? With all 
the attendant consequences that I mentioned earlier?
    Mr. Parker. For the same reason that the Constitution 
doesn't give Pennsylvania the discretion to keep cars made in 
Detroit out if they have a BMW factory in Pennsylvania.
    Senator Baucus. That's not right. That's not right. 
Congress could pass a law so stating, and it would be 
constitutional.
    Mr. Parker. That's true, but what's the difference? There's 
still a commodity of----
    Senator Baucus. There are many commodities that are 
regulated by the Commerce Clause, many, many, many commodities 
that transfer. We've got rails. We've got highways.
    Mr. Parker. With due respect, sir, I don't know of any 
prohibition of a commodity.
    Senator Baucus. Well, I'm just talking about, I haven't 
researched this, but I know that Congress many, many times 
affects interstate commerce by passing Federal legislation. 
This would be a way to affect interstate commerce in a way that 
allows States to have some control over their own destiny, 
whereas currently with respect to this commodity they 
effectively do not.
    All right, I am going to have to leave. Senator Warner, 
thank you very much for taking over.
    Senator Warner [presiding]. OK, I'll take over the chair.
    Senator Voinovich, by the early bird, you're next to the 
questioning.
    Senator Voinovich. Well, thank you, Mr. Chairman.
    I would like to know----
    Senator Warner. First, we ought to thank Senator Baucus for 
really conducting a good, vigorous, and thorough hearing on 
this, and Senator Jeffords.
    Senator Baucus. Thank you.
    Senator Voinovich. Mr. Anderson, because of the Carbone 
decision, you lost flow control, and as a result of that, you 
had to impose an additional tax on the people in your 
jurisdiction to satisfy the bondholders, is that correct?
    Mr. Anderson. That's correct, Senator.
    Senator Voinovich. How would this legislation impact upon 
you?
    Mr. Anderson. I guess the most helpful way to view this is 
kind of an analogy. We went out, SWACO went out and got a 
mortgage to build a house. We secured that mortgage based on 
our job----
    Senator Voinovich. Yes, I understand that, and then the 
people that were paying the mortgage disappeared on you, so you 
had to make up for it. The question is, if this passed, how 
would it help you currently? Would you be able to then regain 
flow control from the jurisdictions that you had?
    Mr. Anderson. What it would do would be to allow us to 
reduce the debt by exercising that grant of authority. It would 
also allow us at the same time to be able to continue the 
recycling programs that we carry out and reduce the tax burden 
on the residents in our community.
    Senator Voinovich. But the communities that were taken out 
of your flow control are now being serviced by probably some 
companies that Mr. Parker represents, right?
    Mr. Anderson. Yes, sir.
    Senator Voinovich. So what had happened, then, is those 
jurisdictions who are now with some other company that disposes 
of their garbage would then have to come into your 
jurisdiction, so that you could capture their tipping fees to 
help pay the bonds that they originally were supposed to pay?
    Mr. Anderson. Senator, I believe under S. 1194 if the 
private waste companies and those public entities entered into 
those contracts in good faith, the bill allows for those 
contractual relationships to continue until they terminate. At 
the time they terminate, then we would----
    Senator Voinovich. And at that stage of the game you would 
take over?
    Mr. Anderson. Yes.
    Senator Voinovich. OK. I just wanted to get that clear, so 
everyone understands.
    Ms. Allan, I like your name because my wife's maiden name 
was Allan, and there aren't too many A-L-L-A-Ns. There are a 
lot of A-L-L-E-Ns. So you must have some Scot background.
    Ms. Allan. I think I do.
    [Laughter.]
    Senator Voinovich. I would like, and you don't have to give 
this to me now, I would like to have a report on the number of 
landfills closed in the State of New York and the number of 
landfills opened in the State of New York. The reason I would 
like that is, it has been my impression over the years--and I 
have been dealing with this problem now since 1990. My first 
commercial, when I ran for the governorship, was how I was 
going to stop out-of-state waste coming into the State of Ohio. 
At that time I said that we were bringing in some bad stuff, at 
that time, oh, medical waste, and all of the people who were 
carrying it said, ``Oh, no, no.'' Well, about 2 months after my 
commercial ran, a truck tipped over in Lancaster, OH. It was 
just full of medical waste. It was from New Jersey, and I got a 
hold of Governor Florio at the time, and we entered into an 
agreement to stop that from happening.
    Anyhow, we have been at this a long time, but over the 
years my feeling has been that the State of New York has not 
really stepped up to the table as a State in dealing with their 
own garbage problem, and that it has been a lot easier for that 
problem to be hoisted off on Virginia, Ohio, Pennsylvania, and 
other States. I would be interested in the maintenance of 
effort. So I would like a report on that from you.
    Ms. Allan. Well, I will have to contact the State about 
that, and they will get back to you. That is a State issue.
    What I can say about the city is that in the first 6 months 
of fiscal year 2002, July 2001 to January 2002, New York City 
exported only .1 percent of its residential waste to Ohio. So 
New York City itself is not unduly burdening Ohio, I don't 
think. We've brought in a total of, an average of 9 tons a day 
and a total of 1,740 tons in that 8-month period.
    I would also like to say that the way New York City's 
process works, we contract with private companies to export the 
waste, and we have to take the lowest bidder. So we don't have 
any control over the destinations of the waste that the 
contractors are providing, except that we do a very extensive 
field interview, field inspection, integrity review of the 
landfill operators. We review the host community agreements. We 
review the permits. We review the environmental impact 
statements. We say to the vendors, ``You cannot take waste to 
this, that, or the other landfill because it's not up to the 
state-of-the-art.''
    But, apart from that, it is the contractors with whom we 
bid, with whom we contract, and we have to take the lowest bid. 
So the contractors decide whether they are going to take it to 
Ohio or to Pennsylvania or to Virginia. It is not the city of 
New York.
    Senator Voinovich. Yes, I understand that. I would like to 
make it clear to Mr. Parker and others that we allow States in 
my bill to freeze out-of-state waste at 1993 levels. This bill 
does not require an absolute ban on out-of-state waste. In 
fact, it has a limit on what the legislature can do. They have 
to at least allow that 20 percent of landfill can be from out-
of-state. It does give some discretions to local communities, 
if they, indeed, want to go forward and have it, that they've 
got to get permission from the State.
    But the fact is, and you're right, Mr. Parker, it does go 
through a series of things, but this is not an outright ban on 
out-of-state waste. It basically is giving the States more of 
an opportunity to control something that is a valuable resource 
to the respective States. Communities, if you don't have to 
worry about your garbage problem and you just can continue to 
expand and expand and expand--it also deals with--it gets into 
the issue of competitiveness between one State and another. 
Landfill capacity becomes something very important. It is just 
like a community with water. If you don't have the water, you 
can't expand. if you don't have a way to dispose of your 
garbage, if you don't recycle it, then that has some limitation 
on your density and what you can do. It is a side of this thing 
that I think some people really don't recognize, but I sure do 
as a former governor interested in economic development and 
planned developments of areas of our State.
    Enough of my comments.
    Senator Warner. I would like to get a question or two.
    Senator Voinovich. Go ahead, Mr. Chairman, yes.
    Senator Warner. I have to tell you, I respect you, Ms. 
Allan, but I'm going to get a little tougher with you. Our 
research shows New York has done almost, the city has done 
almost nothing to try and build recycling plants. I was just 
told that one has been shut down for 18 months. Is that 
correct?
    Ms. Allan. Recycling plants?
    Senator Warner. Yes.
    Ms. Allan. Well, no, I don't think that's correct. The 
city, just like with our export, we contract with private 
companies----
    Senator Warner. Listen, I know you can skirt all these 
little laws with how you contract, but the fact of the matter 
is, what is the city doing or not doing to try and consume, 
either through recycling or to exporting somewhere within the 
State, some of its waste?
    Ms. Allan. Well, the city has a very extensive recycling 
program. In fact, it's got one of the best recycling programs 
in the country. We collect--and I had the tonnage, but we 
collect--last year we collected 425,000 tons of paper, which we 
sent to recyclers. They recycled it. The city was paid $5 
million. There is a market for recyclable paper. They make it 
into corrugated cardboard, and it is a viable recycling 
material.
    Senator Warner. That's fine.
    Ms. Allan. Now metal, glass, and plastic, New York, as you 
know, has a very strong bottle bill, so that the aluminum 
bottles and cans from carbonated beverages are removed from the 
waste stream before sanitation ever gets a hold of them.
    Senator Warner. Because there, again, there's a profit 
return on that, I would assume.
    Ms. Allan. Yes, that goes to the bottlers and to the 
individuals who return it.
    Senator Warner. Fine.
    Ms. Allan. But the remaining metal, glass, and plastic, 
which is unwashed applesauce jars and unwashed spaghetti jars 
and bottles of water, et cetera, make up approximately a 
thousand tons a day of the city's total waste stream, which is 
over 18,000 tons.
    Senator Warner. All right, well, let's just----
    Ms. Allan. We are putting an 18-month suspension on the 
collection of that because it is right now costing us $56 
million to collect 1,000 tons of metal, glass, and plastic. 
It's an infeasible program, and we have to improve it.
    Senator Warner. So you did close it down for 18 months?
    Ms. Allan. We are planning on suspending recycling of 
metal, glass, and plastic----
    Senator Warner. Because it is too expensive?
    Ms. Allan. Because it doesn't work.
    Senator Warner. Well, you said too expensive.
    Ms. Allan. Because there are no markets. Because Waste 
Management, which is----
    Senator Warner. All right.
    Ms. Allan [continuing]. Is one of our recyclers, has told 
us that they crush the glass and take it to landfills to use it 
for cover. That is not a market use of the glass.
    Senator Warner. Fine. Market is one thing. I'm talking 
about our State, which is the recipient of an enormous amount 
of your waste. It is simply cheaper for you to ship it to 
Virginia than to try and process it somewhere in the environs 
of New York City, is that correct? Bottom line?
    Ms. Allan. No, I don't think that's correct, sir, with all 
due respect. The studies that we have done of our recycling 
show that approximately 40 percent of what we recycle ends up 
as residue or garbage. That is being exported along with the 
rest of the garbage. It's not recyclable. It is not usable 
materials.
    As for what we send to Virginia, in the first 6 months of 
this year we sent 260,000 tons of waste to Virginia, which was 
only 13 percent of our waste stream, and which, in fact, if we 
took away a thousand tons a day, or added a thousand tons a 
day, it would not have a significant impact, considering that 
we send waste to about 25 or 30 landfills.
    Senator Warner. Well, you say 13 percent ``is only.'' I 
think that is a lot coming our way.
    What have you done by way of trying to find a landfill? Can 
you say that there's not a square mile of area in the State of 
New York which cannot be adopted for landfill purposes?
    Ms. Allan. No, I can't say that, sir, and I know that 
Commissioner Doherty has started talking to the State about 
siting a landfill in New York for New York City. Again, what 
kinds of facilities New York State has is a matter for the 
State. It is not a matter for the city. New York State is the 
one that permits its landfills and decides where they're going 
to be sited. New York City has no authority over the siting of 
landfills in New York State.
    Senator Warner. Fine, you can duck and run all you want, 
but there's a simple concept: You've got a very large State, 
and there's got to be areas in which landfills can be put, and 
put in a safe and environmentally-compatible way. This is 
simply a battle between the rich and the poor, and that's what 
it comes down to. Your State is a prosperous State. Your city 
is a very prosperous city, albeit suffering a frightful 
tragedy, but we're about to vote, I think it's today, on a 
supplemental to the Federal taxpayers who are trying to 
reimburse the city significantly for 9-11. I just put that down 
as an aside.
    But the fundamental thing, it is the rich versus poor. We 
do have some remote counties in our State which have resorted 
to taking in the waste to try to meet their financial needs. 
That's a fact. I am sure that if there were other ways to 
achieve their financial needs, they wouldn't do it. But this is 
a fact; they're taking it. And that's true in other 
jurisdictions.
    But it is cheaper for you to export than to try and, within 
your own State framework and Federal framework of environmental 
laws, either recycle or provide landfills, and no one can come 
in this hearing room and tell me to my satisfaction that there 
isn't a square mile of land somewhere in that great State which 
could be converted to landfill and begin to accept some of the 
waste, whether it is from the city or other parts of New York. 
It's a simple fact of the matter.
    Ms. Allan. Yes, sir, and if I could say one thing, the 
three landfills that our vendors, our contractors are using in 
Virginia, all three are state-of-the-art landfills, built with 
State permits, after full environmental impact statements, and 
with host community agreements, and with very stringent 
conditions that we comply with. So nothing in this bill about 
host community agreements and permitting would affect those 
landfills except for the State to be telling the locality, 
``You can't take New York City's waste,'' and we consider that 
to be a problem with the Commerce Clause.
    Senator Warner. Well, fine. I recognize that you are 
working within the confines of existing laws. I and others are 
doing the very best we can to bring about some equity in that 
legal framework.
    But, Mr. Burnley, to you, clearly, they are working within 
the existing framework of law, but the State has no voice, 
almost no voice whatsoever in this interstate transportation of 
waste. And, as a consequence, the State is incurring expenses 
to manage these landfills--why don't you expand on that?--which 
you're paying out of the pockets of the State taxpayer.
    Mr. Burnley. That's true. Increased compliance efforts, 
there are more inspections. We are having to spend those very 
scarce resources that we have for environmental protection in 
places that we really would prefer not to.
    We are also having to clean up trucks, truck wrecks that 
are spilling garbage. We are having to spend a great deal of 
time and effort and money on trying to figure out a way to 
regulate barge traffic on the Chesapeake Bay that is going to 
be carrying garbage. All of those things, we could be using 
that time and those scarce resources for other environmental 
issues.
    Senator Warner. I have a great familiarity with the 
Chesapeake Bay, and having been the former Secretary of the 
Navy, I know of some accidents we have had in shipping in that 
area, serious ones. If one of those barges with the capacity 
of--what did you indicate?
    Mr. Burnley. Two hundred and fifty tractor-trailers.
    Senator Warner. Fine. If it were to be sunk, as a 
consequence of an accident in fog or other navigation 
probabilities, what kind of environmental problem would we be 
faced with?
    Mr. Burnley. Well, as you know, Senator, the Chesapeake Bay 
is already facing a lot of challenges already. You mentioned 
fish and shellfish and other water quality issues. That would 
obviously exacerbate those problems. Who knows what kind of 
efforts would be necessary to recover the garbage and what kind 
of environmental impacts it would have, but it would be 
significant.
    Senator Warner. Now I would be glad to allow any of the 
witnesses to respond to some of the points I made here today, 
if you want to expand on them. Anyone wish to be recognized for 
that purpose?
    Mr. Hess.
    Mr. Hess. Mr. Chairman, thank you. The issue of host 
community agreements has come up several times, and I think 
that is an important issue. In fact, we had in 1999 done a 
survey of our communities that are hosting various waste 
facilities. As a result of that survey, we found that 47 of 
those communities did not want in fact, to accept out-of-state 
waste. Ten of them did. I don't think anyone is saying we're 
going to close the door to waste imports. I think we have a 
regional responsibility.
    We shared that information with the Mayor's office at the 
time in New York City, and did not hear anything back. Some of 
those facilities were clearly getting waste from New York City, 
where they did not want that waste. I would welcome the 
opportunity to share that list and any other information with 
the representative here from New York City. We can do an 
accounting of what the host communities agreements do say.
    Senator Warner. Senator Voinovich, I must depart, and if 
you would just accept the chair, and continue this hearing. We 
thank all of you for coming, but this is a tough issue, and the 
battle is not over, folks.
    Senator Voinovich [presiding]. Thank you, Mr. Chairman.
    Mr. Hess, you had an opportunity to hear Mr. Parker's 
testimony. Would you like to comment on it? He makes a point 
that we have a lot of garbage flowing back and forth over State 
borders. I know in our State we have some garbage that flows 
out of Cincinnati over into Kentucky.
    What's your response to what Mr. Parker has to say in terms 
of why his organization is opposed to this?
    Mr. Hess. Well, I think, again, the numbers in our case 
speak for themselves. Forty-seven percent or so of the waste 
that's disposed in Pennsylvania comes from out-of-state, 
primarily from New York and New Jersey, but from 18 other 
States as well. I think it comes down to a fundamental issue of 
fairness and incentives for those States to develop facilities 
that can take care of waste there.
    We have never taken the position, all the way back to the 
late Governor Casey, of closing our borders. We recognize that 
there is a reasonable responsibility, but, frankly, being 
dumped on to that extent is not acceptable to Pennsylvania, has 
not been under Republican or Democratic governors.
    Senator Voinovich. So your theory is that, if we were able 
to get our legislation passed, that the legislation that I 
have, there's a lot of flexibility here. It basically says that 
communities that have approved it can continue to approve it, 
if they want to. It says that any expansions over since 1993 
would have to be approved by the local community. We say we can 
still provide 20 percent imports. So it gives you some 
flexibility.
    I think the most difficult thing in the legislation is 
that, if you want to build a brand-new landfill site, that 
there's got to be some need for that landfill site for the 
respective community. It can't be built like the one they 
wanted to build in Jefferson County, to bring in garbage that I 
think Waste Management wanted to bring in from Canada, and just 
basically said we're not going to become the garbage dump for 
Canada.
    Mr. Hess. I think, Senator, the host communities' wishes on 
these issues need to be heard. I think the one thing that I've 
heard in going to communities that have landfills is that they 
feel pretty powerless against the landfill operators. I think 
giving them a voice, giving them a choice, is something that 
would be a tremendous relief to those communities. Congress 
does have the authority to do that.
    Senator Voinovich. So it is your theory, or you have facts 
to back it up, that many of the landfills in your State that 
are taking in 47 percent of the garbage from out-of-state got 
permits and are receiving this waste, but the communities in 
which the waste is coming into are in opposition to it?
    Mr. Hess. Some of them have agreed, but there are others 
that have not. As I said, we would be glad to share that 
information with the city.
    Senator Voinovich. What would you say to those that have 
agreed to do it?
    Mr. Hess. That is really their choice. I think that is one 
of the main points that we're concerned about. They don't now 
have a choice of where their waste comes from. That can only be 
given by Congress through legislation like yours and Senator 
Specter's. That is something I think that is extremely 
important to them. Again, we would be happy to share that 
information with the city.
    Senator Voinovich. Do you see a--let's put it this way: 
Have you seen recently a large increase of out-of-state waste 
coming into your State?
    Mr. Hess. We have, if you look at the numbers. Again, since 
everyone began to talk about this in approximately 1989, 
Pennsylvania imported about 3.4 million tons of waste from 
other States. Right now, as I mention in my remarks, last year 
that was up to 12.6.
    Senator Voinovich. You're way above what we are taking in.
    Mr. Hess. This is one category where we don't want to be 
No. 1 any longer, Senator.
    Senator Voinovich. This would also put some pressure on 
some of the States to start to face up to the responsibility 
that they have to make more landfills available. That is why I 
am very interested to see, get the information from the State 
of New York about what they are doing in terms of handling 
their own problem.
    It is real easy if you've got a company that comes in, gets 
the contract, and they're low bidder, and no one has to worry 
about it except the State where the stuff is going. There ought 
to be some kind of requirement of maintenance of effort by 
States to handle their own garbage. Maybe we ought to look at 
that percentage that you've got to handle yourself before you 
are going to be able to shift it into somebody else's backyard.
    Well, I want to thank the witnesses very much for being 
here today. This will conclude the hearing.
    [Whereupon, at 11:40 a.m., the hearing was adjourned, 
subject to the call of the chair.]
    [Additional statements submitted for the record follow:]
    Statement of Hon. Bob Smith, U.S. Senator from the State of New 
                               Hampshire
    Mr. Chairman, thank you for holding this hearing today. Interstate 
waste and flow control are issues that have spanned the duration of 
almost five chairmen of this committee. With all that has happened in 
the past year or so, it is almost comforting that the more things 
change, the more they stay the same. In 1995, Senator John Chafee and I 
worked hard to pass an interstate waste/flow control bill. The House 
took a more free market approach and legislation was never signed into 
law. In hindsight, that may have been the right outcome, in particular 
as it relates to flow control.
    Because of the promise of flow control, facilities were sited on an 
unconstitutional premise that a local government could mandate a market 
for itself. In 1994, the Supreme Court affirmed the unconstitutionality 
of flow control in the Carbone decision. With this decision came a cry 
for help from the local communities who feared, absent flow control, 
they would be forced to default on bonds that had been issued to 
finance the construction of waste management facilities. We heard 
testimony to that effect in 1995. It is now 7 years later, flow control 
has still not been signed into law, and all of the talk of massive doom 
has not come to fruition. I do acknowledge that it has not been easy on 
many communities without the ability to exercise flow control 
authority, but no one ever said that competing in the free market was 
supposed to be easy. I do not believe that the Federal Government 
should be about mandating market streams, or allowing others to mandate 
a market stream where healthy competition already exists. We should be 
advocating open markets and consumer choice, not contracting and 
restricting. The need for flow control implies the inability to compete 
in a free market system--which means residents would be paying prices 
higher than they would otherwise be paying. It is, in essence, an added 
tax on top of paying for waste management services for anyone who lives 
within these jurisdictions. But when forced to compete, the majority of 
communities have risen to the occasion by charging competitive rates, 
streamlining operational costs and seeking alternative sources of 
revenues. I commend these communities for responding with innovation 
and good old American ingenuity. Now, if localities need to raise 
additional revenue, they can do so without compromising the free market 
mechanism. If localities want to impose a tax on their citizens, they 
should do so directly, rather than hiding it in Federal flow control 
legislation.
    With regard to interstate waste restrictions; this issue remains a 
complex divergence of open markets and States rights. Many States, 
including New Hampshire, both import and export significant amounts of 
waste. In 2000, my State exported 54,000 tons while importing 255,000 
tons. Towns across New Hampshire are uneasy with current and proposed 
imports. I understand their concerns and have worked to find a fair 
solution. First and foremost, we must be assured that ALL waste is 
being managed in an environmentally sound manner. We must seek 
creative, innovative and cooperative solutions to these issues without 
having to put artificial constraints on what is a free market. Absent 
legislation that is agreeable to all regions of the country, history 
has proven that having any legislation signed into law is almost an 
insurmountable task. As of yet, I am not convinced that any legislation 
before us contains the answer. I look forward to the testimony of our 
witnesses. Thank you.
                               __________
    Statement of Hon. Carl D. Levin, U.S. Senator from the State of 
                                Michigan
    I am pleased to testify before this committee on this important 
legislation. The Senate has expressed its will on this issue over and 
over again by overwhelming votes. However, we have been unable to enact 
a law that would give states and local governments control over their 
own jurisdictions, and over their own land. In Michigan, my counties 
and townships have plans for waste disposal and have invested a lot of 
money to dispose of their waste locally. Those plans and those 
investments are disrupted when contracts are entered into without 
consideration by State, county, or local governments of the impact of 
those contracts.
    In Michigan, we are facing a totally unsustainable situation with 
regard to the importation of waste from other states and Canada. Waste 
received from states outside Michigan increased 16 percent in fiscal 
year 2001, while imports from Canada rose 40 percent. Over the past 2 
years, imports from Canada have risen 152 percent and now constitute 
about half of the imported waste received at Michigan landfills. 
Currently, approximately 1,300 truckloads of waste come in to Michigan 
each week from Canada. And this problem isn't going to get any better. 
These shipments of waste are expected to continue as Toronto and other 
Ontario sources phaseout local disposal sites. On December 4, 2001, the 
Toronto City Council voted 38-2 to approve a new solid waste disposal 
contract that would ship an additional 1.25 million tons of waste per 
year to the Carleton Farms landfill in Wayne County, Michigan, 
beginning in January 2003. In addition, two other Ontario communities 
that generate a combined 385,000 tons of waste annually have signed 
contracts to ship their waste to Carleton Farms.
    Based on current usage statistics, the Michigan Department of 
Environmental Quality estimates that Michigan has capacity for 15-17 
years of disposal in landfills. However, with the proposed dramatic 
increase in the importation of waste, this capacity is less than 10 
years. The Michigan Department of Environmental Quality estimates that, 
for every 5 years of disposal of Canadian waste at the current usage 
volume, Michigan is losing a full year of landfill capacity.
    The environmental impacts on landfills, including groundwater 
contamination, noise pollution and foul odors, are exacerbated by the 
significant increase in the use of our landfills from sources outside 
of Michigan. Congressional inaction is harming our constituents who are 
powerless to do anything about this.
    The EPA has stated that our lack of domestic laws in this area 
hinders international efforts to control shipments of Canadian 
municipal waste into Michigan. This legislation would resolve this 
problem by giving control to the states to determine whether or not 
they want to accept out-of-state waste.
    I am pleased that the Senate Environment and Public Works Committee 
has hearings planned on this issue and I look forward to working with 
my colleagues on both sides of the aisle to get this important 
legislation passed and signed into law.
                               __________
 Statement of Hon. Steve Buyer, U.S. Representative from the State of 
                                Indiana
    Mr. Chairman. I am very grateful that this committee is holding a 
hearing today on the troublesome issue of interstate waste shipments.
    Small towns in my home State of Indiana and other similar states 
have been overtaken by thousands of tractor trailers, loaded with out-
of-state municipal waste. In 1998 almost 2.2 million tons of out-of-
state municipal solid waste was disposed at facilities within Indiana, 
mostly landfills. Most of those landfills are in my congressional 
district. Those 2.2 million tons represented 30 percent of the total 
amount of waste disposed in Indiana's landfills.
    While 1998 was a peak year for Indiana, the level of out-of-state 
trash coming into Indiana from States that refuse to deal with their 
own trash is still unacceptably high.
    Indiana has accepted the responsibility to address the disposal 
needs for trash generated in Indiana. The State has 61 solid waste 
management districts to address our own waste. Indiana currently has 17 
years of in-State capacity based on current disposal rates. However, 
the threat of unlimited quantities of out-of-state trash could quickly 
undo the good that the State of Indiana and its citizens have planned. 
The primary goal for Indiana is to protect our State's disposal 
capacity and our natural resources and environment. It is impossible 
for the State and local communities to plan if it can be undone by 
unlimited, uncontrolled out-of-State trash.
    Imported trash creates environmental problems, safety problems, and 
community development difficulties. States should have some ability to 
address these needs without running afoul of the Commerce clause. That 
is why I have cosponsored H.R. 1213, the Solid Waste Interstate 
Transportation Act.'' This bill would give the State of Indiana the 
tools it needs to ensure that its environment is not despoiled by the 
actions of other States that are not so responsible. This idea is not 
new. The House passed similar legislation in the 103rd Congress by an 
overwhelming vote. The Senate has passed similar legislation as well.
    I urge this committee to move forward to give States the necessary 
tools to protect their environments and their communities.
                               __________
   Statement of Robert G. Burnley, Director, Virginia Department of 
                         Environmental Quality
                              introduction
    Good morning Mr. Chairman and members of the committee. I am Bob 
Burnley, Director of Virginia's Department of Environmental Quality. I 
appreciate the opportunity to speak to you about Virginia's concerns 
about interstate waste.
    solid waste management and interstate waste disposal in virginia
    Governor Warner and I are concerned about interstate waste because 
landfills consume open space and threaten the quality of our 
environment. While every state has a responsibility to ensure adequate 
and safe waste disposal capacity for its citizens, Virginia should not 
be forced to assume these long-term costs and increased risks for other 
states. We should not have our hands tied as we attempt to protect 
ourselves from the onslaught of garbage from other states.
    Virginia is second in the Nation in the amount of out-of-state 
waste received. Over the last decade, the amount of out-of-state waste 
imported to Virginia has more than doubled. In 2000, Virginia imported 
4.5 million tons of solid waste. This represents more than 20 percent 
of Virginia's total waste stream.
    Landfill permits consume approximately 10,000 acres in Virginia. 
This capacity will last until 2014 if disposal volumes remain constant. 
If, however, Virginia is not able to cap the flow of waste from other 
states, we may be forced to provide additional landfill space at a much 
earlier date.
    The U.S. EPA acknowledges that, despite our best technology, all 
landfills will leak eventually. Virginia has enacted very stringent 
requirements for the siting, monitoring and operation of its landfills, 
more stringent than those established by EPA. Despite our best efforts 
to protect Virginia's environment, however, we do not know what will 
happen 20 or 30 years from now. Common sense tells us that the larger 
the landfill and the more waste we are forced to accept, the greater 
the risks of ground water contamination and other pollution.
    Unfortunately, Virginia has already suffered the consequences of 
uncontrolled shipment of out-of-state waste. The Kim-Stan Landfill in 
western Virginia was originally operated as a local landfill but was 
later purchased by private interests. In the subsequent months they 
began importing waste from other states, increasing the volume 
significantly. Hundreds of tractor-trailers filled with trash traveled 
the back roads of rural Allegheny County each day. The owners soon 
filed bankruptcy and the landfill is now a Superfund site. The 
Commonwealth has already expended millions of its taxpayer dollars to 
investigate and contain the contamination; neither the generators nor 
the generating state have borne any of these costs. We hope our 
enhanced landfill regulations will prevent this type of environmental 
catastrophe from happening in the future, but the fact remains that no 
one is certain that current landfill designs are adequate to provide 
long-term environmental protection.
    Another concern is our inability to enforce against generators who 
send their waste to Virginia facilities. Virginia prohibits certain 
types of waste from its landfills that are allowed in the municipal 
solid waste streams of other states. Without the ability to limit 
imports from these states, Virginia is forced to expend more of its 
state-funded compliance resources at landfills accepting wastes from 
other states. When violations are found, however, we have no authority 
to pursue enforcement against the source of the waste if they are 
outside Virginia.
    In 1998 and 1999, DEQ found illegal wastes in loads of trash coming 
from New York City. In the resulting litigation, the Virginia State 
Courts found that it would be impossible for a New York City transfer 
station to adequately screen the trash to prevent these banned wastes 
from making their way to Virginia's landfills unless the volumes were 
significantly curtailed. The Federal courts, however, have prevented us 
from imposing any limits or caps on the disposal of these wastes 
because it would violate the Commerce Clause of the Constitution.
    Every day, trains filled with garbage travel Virginia's railways, 
many parking along the way while they wait their turn at the landfill. 
Tractor trailers filled with garbage work their way through the crowded 
interstate system and across rural Virginia. At least one of Virginia's 
landfill operators plans to use barges to import garbage. Each barge 
will bring approximately 250 tractor-trailer loads of trash across the 
Chesapeake Bay and up the James River. Virginia has tried to protect 
itself by imposing disposal caps, regulating large trash trucks, and 
imposing restrictions on trash barges; but the Federal courts have 
blocked these efforts.
                            virginia's goals
    The Commonwealth seeks the authority to control how our natural 
resources are consumed and protect the long-term welfare of our 
citizens. In order to do this, we are asking Congress to grant states 
the ability to control the importation of garbage. This authority 
should be simple and flexible enough to meet the needs of all states, 
without basing it upon the solid waste management system of one 
particular state.
    For example, some of the legislation being considered would 
authorize states to cap waste imports at 1993 levels. Virginia first 
collected verifiable information on waste imports in 1998. The 
Department of Environmental Quality has been working with Senator 
Warner and other members to identify these concerns and I hope that we 
will be able to address them before any action is taken.
    I applaud the committee for continuing its efforts to address this 
issue. Thank you for the opportunity to present Virginia's concerns 
about interstate waste disposal. I would be happy to work with you and 
your staff to move such legislation forward. This concludes my prepared 
remarks, and I will be happy to answer any questions.
                               __________
   Statement of David E. Hess, Secretary, Pennsylvania Department of 
                        Environmental Protection
    Chairman Jeffords, Senator Smith, members of the committee my name 
is David Hess, and I am the Secretary of Pennsylvania's Department of 
Environmental Protection. I am here today on behalf of Governor Mark 
Schweiker to talk to you about an issue of great importance to the 
Commonwealth of Pennsylvania--interstate waste.
    Pennsylvanians have been struggling with this issue for more than a 
decade. In 1988, we faced a garbage crisis with only 18 months of total 
disposal capacity to the present with an ever increasing flood of waste 
from outside our borders almost doubling the millions of tons of 
garbage disposed of in our state every year. We solved our problem by 
building a statewide waste management infrastructure through a 
Commonwealth-wide recycling program and sound, scientifically based 
landfill standards.
    Just a quick glance at our waste management statistics underscores 
our concern. Disposal figures in 2001 indicate that 26.6 million tons 
of waste was disposed in Pennsylvania waste facilities. Of this, nearly 
half--12.6 million tons or 47.3--percent was imported from at least 20 
states.
    Over the past 7 years, Governor Ridge, Governor Schweiker, previous 
DEP Secretary Jim Seif and I visited many Members of Congress to urge 
you to resolve this issue. Our message has been simple and consistent--
pass Federal legislation giving communities a voice in deciding whether 
trash from other states should be disposed of in their communities.
    As long as states can export unlimited quantities of trash to their 
neighbors, there is no incentive to deal with this reality by creating 
their own waste management infrastructure.
    For a number of years, states have attempted to regulate the 
movement of waste across their borders, only to be denied that right by 
the courts.
    Earlier this month, the U.S. Supreme Court refused to review the 
lower court decision that the Commonwealth of Virginia's solid waste 
laws regulating out-of-state waste unduly interfered with interstate 
commerce.
    This most recent court action underscores the need for Congress to 
act on this issue and provide states with the ability to manage the 
importation of municipal waste from other states.
    Our resolve in finding a regional solution to our waste issues 
remains unchanged, but Federal legislation remains the only key to 
reducing unwanted trash imports.
    The people of Pennsylvania are asking Congress to give them a voice 
in deciding whether trash from other states should come to their 
communities for disposal. We are not seeking to build a fence around 
our borders to turn back every waste truck, or to turn our backs on the 
legitimate needs of our neighbors. We are not asking for Federal money. 
We are simply asking the Congress to give the states the authority to 
place reasonable limits on unwanted municipal waste imports in a 
planned, balanced and predictable manner.
    Specifically, Pennsylvania is seeking Federal legislation that 
gives us some basic tools:
    1. Give Pennsylvania's communities the ability to allow the 
disposal of imported waste through host community agreements, which 
would address concerns such as operating hours, truck traffic, noise 
and litter before permits are issued;
    2. Impose a freeze on waste imports immediately, with a predictable 
schedule for reducing imports over time;
    3. Allow states to impose a percentage cap on the amount of 
imported waste that a new facility could receive; and
    4. Allow states to consider in-state capacity as part of the 
permitting process.
    In numerous decisions dating back to 1978, the U.S. Supreme Court 
has ruled that the transportation and disposal of municipal waste is 
interstate commerce, protected by the Constitution, and that states do 
not have the authority to limit the flow of waste across state lines, 
until Congress grants them that authority.
    There have been a number of legislative efforts that squarely 
address the interstate waste commerce question and present a fair and 
equitable solution to both importing as well as exporting states.
    Legislation introduced by Senator Specter (S. 1194--June 18, 2001) 
and a similar bill by Congressman Greenwood (HR 1213--March 27, 2001) 
incorporate similar provisions that Pennsylvania supports. We have also 
supported legislation sponsored by Senators Voinovich and Bayh, and 
have worked in the past with Senator Warner and former Senator Robb.
    While we wait for Congressional action, Pennsylvania has moved 
forward in our efforts to strive for cleaner, safer communities, and 
environmentally educated citizens.
    Pennsylvania has created a world-class recycling program that 
serves over 10 million residents in over 1,485 communities, and has 
resulted in Pennsylvanians recycling over 32 percent of all waste they 
generated, diverting one-third of our trash from disposal.
    In 1988, we recycled 167,000 tons of materials. Today, we recycle 
more than 3.4 million tons--more than twenty times as much! Recycling 
diverts materials destined for disposal, and at the same time, provides 
jobs and infuses over $20 billion annually into Pennsylvania's economy. 
There are currently more than 3,200 recycling and reuse businesses in 
the Commonwealth, which employ more than 81,000 people. And the lessons 
we've learned on environmental responsibility are invaluable.
    Materials that were once considered unusable and unrecyclable are 
building better and safer roads. We have begun pilot projects that 
incorporate the use of recycled plastics in 'plasphalt', glass cullet 
for pipe backfill along roadways, and shredded tires as light weight 
fill in highway bridge approaches.
    Playgrounds and recreational trails are constructed from discarded 
tires from waste tire piles that at one time blighted Pennsylvania's 
landscape.
    Composting of household organic waste diverts 21 percent of food 
waste and other organic material from the municipal waste stream adding 
up to 2.2 million tons annually.
    And we have 12 years of permitted disposal capacity to continue to 
meet the waste disposal needs of the Commonwealth using the nation's 
toughest environmental standards.
    We don't back down from our responsibilities. We know what the 
responsible thing to do is and we do it. However, the same cannot 
always be said of our neighbors.
    Recently in his proposed budget, Mayor Michael Bloomberg of New 
York City announced the 18-month suspension of metal, glass and plastic 
recycling programs. Although their proposal is expected to save the 
city an estimated $57 million, the real costs are assumed by other 
states like Pennsylvania. Clearly, if this proposal is passed, 
Pennsylvania will receive even more waste.
    We sincerely hope the city of New York recognizes the hard work we 
have done in Pennsylvania to make our recycling program one of the best 
in the nation, and rejects any proposal aimed at lessening their 
environmental responsibilities at the costs of others. We have reason 
to believe that they will and that they will continue their commitment 
to waste reduction and recycling.
    The city plans to make recommendations to Governor Pataki and the 
New York legislature regarding ways to reduce waste exports and the 
siting of new landfills outside of New York City. We are committed to 
being a good neighbor as demonstrated by our partnership with New 
York's city and state officials in managing waste and demolition debris 
disposal in the wake of the tragic events of September 11th.
    In addressing Pennsylvania's waste capacity issues responsibly, 
Governor Schweiker has initiated and supported legislation introduced 
in the General Assembly that proposes a landfill moratorium on new 
permits, limits landfill capacity, and supports host community 
agreements that address concerns such as landfill operating hours, 
truck traffic, noise and litter.
    Trash truck safety is an important component of the overall waste 
importation dilemma. The increase in truck traffic due to the 
transportation of waste over state lines has resulted in more traffic 
accidents, roadside littering, leaking loads and wear-and-tear on our 
highways. Trucks hauling trash make over 600,000 trips a year in 
Pennsylvania alone.
    New tough truck safety legislation has also been introduced that 
will establish a comprehensive authorization program for waste hauling 
vehicles that operate in Pennsylvania. A complete review of the 
transporter's compliance history will also be required, before a 
written authorization is issued. The bill also establishes civil and 
criminal penalties for persons who violate the provisions of the 
written authorization and continue to have environmental and safety 
violations.
    In an unprecedented effort to reduce the high rate of safety and 
environmental violations of trash haulers, our agency, in conjunction 
with PennDOT and the PA State Police, launched ``Operation Clean 
Sweep''--surprise trash truck inspections at every landfill and major 
incinerator in the state for 8 days straight during May 2001. Over 500 
inspectors from all three agencies participated.
    ``Operation Clean Sweep'' identified hundreds of unsafe trash 
trucks--86 percent of the trash trucks had safety violations and more 
than one-third of the trucks were removed from service as unsafe 
vehicles. During ``Operation Clean Sweep'' we inspected more than 
40,000 trucks, which resulted in over 11,000 safety and environmental 
violations issued.
    Our democracy is built on the foundation of empowering people to 
make choices. It is also built on fairness.
    The citizens of the Commonwealth of Pennsylvania are asking 
Congress for a fair and equitable opportunity to make responsible 
decisions with regard to waste entering our communities from out of 
state--this missing piece of legislative authority will allow us to 
better manage and control almost half of the waste disposed of in our 
state.
    Senators, you have the power to provide that missing piece. 
Pennsylvania has toiled over the past 14 years to provide a 
comprehensive and accountable waste management system to manage the 
wastes our citizens generate. We have developed successful programs to 
reduce the amount of waste that needs to be managed and permitted 
landfill capacity to deal with the remainder. My agency has worked 
diligently to ensure the waste industry improves its compliance and 
safety records. The Pennsylvania General Assembly has worked to develop 
equitable solutions for transportation safety and host community 
protections. Your help will result in a complete approach to managing 
waste rather then a partial solution Pennsylvania's efforts alone would 
deliver.
    Pennsylvania looks forward to a positive response from Congress and 
stands ready to work with you on developing legislation that will 
assure equitable, cost effective and reliable waste disposal for all 
communities.
                               __________
    Statement of Harold J. Anderson III, Chief Counsel, Solid Waste 
                       Authority of Central Ohio
    Chairman Jeffords and members of the committee:
    My name is Harold Anderson and I am Chief Counsel of the Solid 
Waste Authority of Central Ohio (``SWACO''). I am testifying on behalf 
of SWACO and the Local Government Coalition for Environmentally Sound 
Municipal Solid Waste Management (``Coalition''), a joint effort by a 
number of cities, counties, solid waste management authorities and 
related associations concerned with municipal solid waste flow control, 
interstate waste transportation and other municipal solid waste issues.
    We commend you, Chairman Jeffords, for holding this hearing, and 
for allowing the long-standing issues of interstate waste and flow 
control to again be brought before the committee. We also thank Senator 
Voinovich for a very similar bill that we understand is expected to be 
introduced in the near future. And last, but certainly not least, we 
also want to extend sincere appreciation to Senator Specter for 
sponsoring S. 1194, as well Senators Wyden, Warner, Stabenow and 
Santorum for their co-sponsorship of the bill.
                               background
    My testimony will briefly address flow control and interstate waste 
transportation. Before turning to those points, first let me tell you 
about SWACO. We are among the ten largest public waste management 
authorities in America. SWACO strongly embraces recycling and other 
environmentally friendly programs. In fact, SWACO recently took over 
the recycling program for the 700,000 residents of the city of 
Columbus. SWACO strongly embraces partnerships with the private sector. 
Our public landfill is operated by Waste Management, Inc.
    Our Coalition supports S. 1194. The bill would protect stranded 
investment by providing limited grandfather authority for the use of 
``flow control.'' These are investments that many communities and other 
public bodies made in direct response to Federal mandates arising under 
the Resource Conservation and Recovery Act and parallel state laws that 
give local governments primary responsibility to assure adequate long-
term capacity to manage in an environmentally sound manner all of the 
municipal solid waste generated within their respective jurisdictions.
    ``Flow control'' is a mechanism that allows local governments to 
meet that obligation in a fiscally responsible manner. As the term 
implies, a local government will ``control the flow'' of municipal 
solid waste by selecting--and designating by ordinance--a specific 
facility (or set of facilities) for municipal solid waste processing, 
disposal, etc.
    Providing that capacity or infrastructure will often require 
significant financial commitments which are, in turn, secured through 
revenue bonds and similar flow control-dependent financial 
arrangements. In fact, since 1980 over $20 billion in state and local 
bonds have been issued in reliance on flow control authority for the 
construction of solid waste facilities.
    Unfortunately, in the Carbone case the Supreme Court ruled that the 
flow control ordinance at issue in the case violated the Commerce 
Clause. I should hasten to note that prior to Carbone flow control had 
repeatedly been validated by Federal court decisions spanning more than 
two decades from the 1970's into the 1990's, and statutes in more than 
20 states authorized local governments to employ flow control. In fact, 
in previous hearings before this committee, Moody's Investors Service, 
Inc., testified, and I quote, that ``[p]rior to the Carbone decision, 
Moody's viewed the state and local flow control laws and ordinances as 
valid, binding and enforceable.''
                   the impact of the carbone decision
    The consequences confronting communities throughout the Nation due 
to the loss of flow control authority and the absence of Federal 
legislation such as S. 1194 include steep declines in waste deliveries 
and resulting bond downgrades, increased taxes to offset declines in 
tipping fee revenue, termination of recycling and other environmentally 
essential programs, employee layoffs and terminations, depletion of 
cash reserves, and ever-increasing upward pressure on tipping fees as 
the unavoidable fixed cost burden of waste management infrastructure is 
shared by fewer and fewer users.
    My agency, SWACO, is a case in point. We have over $150 million of 
stranded investment in a waste-to-energy facility that was closed on 
the heels of the Carbone decision. After the Carbone ruling we laid off 
250 employees and had to impose a $7 per ton fee--a waste tax--on all 
municipal solid waste generated in Franklin County. We had to take that 
action to generate sufficient revenue to meet our debt obligations in 
the absence of flow control authority.
    In terms of the bond downgrades that I mentioned a moment ago, the 
principal rating agencies, Moody's and Standard and Poor's, have 
downgraded a considerable number of bonds (at least 22), and the total 
outstanding solid waste debt for public agencies that has been 
downgraded or placed on credit watch for potential downgrading since 
Carbone is estimated at over $3.5 billion.
    Compounding these difficulties is the spillover effect for other 
public investment needs. Specifically, when a flow control-reliant 
community goes to the bond market to finance essential needs such as 
schools, roads, public safety facilities, wastewater treatment plants, 
etc., the interest rate that it must pay is likely to be higher due to 
the instability that results from the absence of Federal flow control 
legislation. Those additional costs are ultimately borne by the local 
taxpayers.
    I must also emphasize that we have not defaulted on our bonds and, 
like many other local governments, we have made significant financial 
sacrifices to meet our obligations. Along with other communities and 
public bodies, we will continue to do everything within our ability to 
avoid the truly debilitating impact of a bond default.
    Unfortunately, the absence of such a default has led some to 
suggest that we ``do not need'' flow control legislation. That 
suggestion would be correct if--and only if--one also concludes (which 
we do not) that the better approach is to increase local taxes to meet 
financial obligations undertaken a number of years ago in good faith 
reliance on flow control authority. Aside from its unfairness, that 
position would contradict Federal policy announced more than a decade 
ago to discourage use of general taxes to fund solid waste management. 
And surely no one would seriously suggest that flow control-reliant 
communities must endure an Orange County-type default to justify 
congressional action.
       s. 1194 provides narrow protection for stranded investment
    S. 1194 is narrow legislation that protects reliance interests. The 
bill provides ``grandfather'' authority for use of flow control by 
communities with stranded investment (or contractual obligations) 
undertaken in reliance on the previous availability of flow control. In 
that regard, just as stranded cost protection for a utility recognizes 
that industry restructuring ``changed the rules of the game'' in terms 
of a utility's ability to recover various prudently incurred 
investments from the past, the Carbone decision ``changed the rules'' 
for local governments that had previously relied on flow control to 
secure their investments in the waste management infrastructure needed 
to serve their communities.
    The authority provided by S. 1194 is also self-limiting. By that I 
mean it is confined to recovery of a narrow list of expenses for waste 
disposal and recycling facilities (e.g., principal and interest on 
bonds and ``put or pay'' contract obligations). As a result, the flow 
control authority provided by S. 1194 will only be used where necessary 
and only for as long as necessary.
    In addition, the bill protects the interests of non-flow controlled 
facilities by making the exercise of flow control subordinate to post-
1994 contractual relationships that would be impaired by the exercise 
of flow control.
    Finally, the bill contains a firm ``sunset'' provision that limits 
its protection (i) to investments and contractual obligations 
undertaken in 1994 or earlier and (ii) only for the duration of such 
investments or obligations as they stood in 1994. Put another way, 
under this legislation, flow control authority can be re-instituted 
only for communities that had relied on flow control before May 1994, 
and once pre-Carbone obligations are satisfied a community's authority 
under the bill terminates.
    flow control is not anti-competitive or anti-private enterprise
    It should also be emphasized that flow control is not anti-
competitive or anti-private enterprise. In considering this point it is 
important to bear in mind that the tipping fees--user fees--charged for 
municipal solid waste management services in communities that rely on 
flow control are limited to recovering the costs of those services 
(recycling, household hazardous waste collection, composting, public 
education, etc.). Moreover, communities that rely on flow control also 
rely to the maximum extent possible on private enterprise for their 
waste management infrastructure. SWACO and the other members of the 
Coalition submitting this statement are a case in point. The clear 
majority of the recycling/waste management facilities with respect to 
which our members would exercise flow control authority are privately 
owned and/or operated.
 flow control does not increase the overall cost for waste management 
                                services
    Nor does flow control increase prices or result in the imposition 
of higher costs for a given category of service. The local governments 
that have relied on flow control adhere to competitive bidding 
requirements that make cost a prime consideration in selecting among 
alternative waste management facilities or vendors. Tipping fees in 
communities that rely on flow control will almost always recover, in 
addition to the cost to dispose of non-recyclable waste, the costs of 
other essential services such as recycling, household hazardous waste 
collection, etc. Nevertheless, U.S.EPA concluded in its post-Carbone 
report to Congress on flow control that when the tipping fees paid in 
those communities are broken down into their component parts, the 
resulting prices are comparable to those for non-flow controlled 
facilities.
                    interstate waste transportation
    Finally, I also want to commend your bills, Senators Specter and 
Voinovich, for addressing the issue of interstate waste transportation. 
SWACO strongly supports legislation that will provide communities with 
appropriate means to husband the finite natural resources and waste 
management capacity in their states and facilitate more effective local 
planning for waste management needs. We believe that host community 
agreements play a fundamental role in this matter and want to make sure 
that our communities have appropriate control over waste imports from 
other states. In the long run, this will benefit both importing and 
exporting states by increasing the importance of waste reduction and 
minimization programs and encouraging comprehensive planning by state 
and local governments.
    The interstate waste transportation legislation before this 
committee addresses a serious national problem. Ohio is a case in 
point. Communities across our state have serious concerns with trash 
from outside Ohio being disposed in our state. This local concern has 
resulted in a large number of bills being introduced in Ohio's 
Statehouse ranging from moratoriums on landfill construction to 
commissions to study the issue. Each of these bills, while well 
intentioned, are bad public policy that will increase the cost for 
taxpayers while doing nothing to help the environment.
    SWACO is part of a coalition of public and private waste companies 
and business customers that advocate against these bills in the Ohio 
Statehouse. Our message to members of the Ohio General Assembly is 
simple: the concerns of local communities regarding out of state waste 
needs to be resolved in the Congress and not the Statehouse.
    In conclusion, I certainly appreciate the opportunity to appear 
before the committee this morning, and I sincerely hope we can finally 
resolve these issues. We stand ready to help.
    Thank you.
                                 ______
                                 
Responses by Harold Anderson to Additional Questions from Senator Smith
    Question 1. In your testimony, you state: ``These are investments 
that many communities . . . and other public bodies [made] in direct 
response to Federal mandates arising under (RCRA) and parallel states 
laws that give localities primary responsibility to assure adequate 
longterm capacity to manage in an environmentally sound manner all of 
the (msw) generated within their respective jurisdictions.'' Could you 
please note the citation in RCRA, or any other Federal statute, where 
there is an expressed mandate on localities to assure long-term 
capacity to manage msw generated within any local jurisdiction?
    Response. Section 1002(a)(4) of RCRA, 42 U.S.C. Sec. 6901(a)(4), 
states that ``the collection and disposal of solid wastes continue to 
be primarily the function of State, regional, and local agencies.'' In 
furtherance of that policy, sections 4002 and 4003 of RCRA, 42 U.S.C. 
Sec. Sec. 6942 and 6943, prescribe detailed state and local 
responsibilities for solid waste management planning. In fact, such 
planning is one of RCRA's principal objectives. See 42 U.S.C. 
Sec. 6902(a)(1) (``The objectives of this chapter are to promote the 
protection of health and the environment and to conserve valuable 
material and energy resources by providing technical and financial 
assistance to State and local governments and interstate agencies for 
the development of solid waste management plans''). One of RCRA's 
planning priorities is, in turn, assurance of adequate capacity to meet 
the affected communities' ``present and reasonably anticipated future 
needs.'' Id., Sec. Sec. 6941, 6942(b).
    Referring to these same statutory provisions, the U.S. 
Environmental Protection Agency has emphasized that RCRA ``places great 
emphasis on State, regional, and local planning and contains numerous 
provisions concerning the scope and content of State plans.'' Report to 
Congress on Flow Control and Municipal Solid Waste, EPA 530-R-95-009 
(March 1995, at 1-2) (cited below as ``Report to Congress on Flow 
Control''). As EPA explains, to satisfy RCRA's criteria, ``State plans 
must provide for adequate recycling and disposal capacity and must 
address [waste management] facility planning and development.'' Id. at 
1-3; see also, Congress of the United States, Office of Technology 
Assessment, Facing America's Trash: What Next For Municipal Solid 
Waste? 340, 348 (enactment of RCRA ``was a clear movement toward more 
direct Federal involvement in solid waste management;'' ``[t]o plan an 
effective MSW strategy, the responsible political jurisdiction needs to 
be able to predict the approximate amount of MSW to be handled and 
provide sufficient capacity'').

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

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

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

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

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

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

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

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

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

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

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

    Question 5. Should the taxpayer have a choice of reducing their 
costs by reducing volume and seeking the lowest cost option for 
managing their waste?
    Response. Local voters and taxpayers have the right to choose among 
alternative solid waste management strategies. Communities that rely on 
flow control will select, through their elected local governments, a 
strategy that emphasizes protection of the environment and cost 
efficiency for the long-term. Some will disagree with that choice, and 
such differences of opinion can be expected for nearly all matters of 
public policy. The flow control provisions of S. 1194 and S. 2034 
accommodate those differing viewpoints by limiting the use of flow 
control to a very narrow set of expenses (e.g., payment of debt service 
on bonds and recycling and household hazardous waste program expenses, 
etc.) and carefully confining the authority to the necessary term 
(e.g., the bond repayment period) and no longer.
                                 ______
                                 
  Response by Harold Anderson to an Additional Question from Senator 
                                Clinton
    Question. In your testimony, you mention a ``Federal policy 
announced more than a decade ago to discourage use of general taxes to 
fund solid waste management.'' Please provide a citation for this 
policy and any further details available regarding this policy.
    Response. EPA's ``Handbook For Solid Waste Officials'' (Variable 
Rates In Solid Waste: Handbook For Solid Waste Officials, USEPA, Office 
of Solid Waste and Emergency Response, EPA/530-SW-90-084A (September 
1990)), criticized the use of local property taxes to fund solid waste 
management services. The criticism was based on the concern that such 
use of property taxes fails to give ``residents any incentive to reduce 
their waste.'' Id., Volume I--Executive Summary 2 (emphasis in 
original). The Handbook continues by noting that ``In fact, with the 
property tax method, residents never even see a bill, and generally 
have no idea how much it costs to remove their garbage every week. 
Areas with [this] method [] of payment have often had to resort to 
mandatory recycling programs in order to try to reduce their amount of 
garbage.'' As an alternative to use of property taxes, the Handbook 
encourages volumebased user fees. Id. at 2-3.
    Following publication of the Handbook, former EPA Administrator 
William K. Reilly testified before the Senate Environment and Public 
Works Committee to provide ``EPA's views on solid waste management'' 
and RCRA reauthorization. See William K. Reilly, Administrator, U.S. 
Environmental Protection Agency, Statement Before the Subcomm. on 
Environmental Protection of the Senate Comm. on Environment and Public 
Works 1 (September 17, 1991). Among other things, Administrator Reilly 
explained that the prices charged by local governments for waste 
management services should recover all direct and indirect costs. He 
then stated that the practice in which the costs of waste management 
services are ``typically hidden--in our property taxes'' should be 
discouraged. As an alternative, he said such costs should instead be 
recovered through volume-based user fees because ``[f]ull cost and 
variable rate [volume sensitive] pricing mechanisms send the 
appropriate market signals to households and go a long way toward 
encouraging cost-effective waste minimization and recycling.'' As Mr. 
Reilly emphasized, the alternative he recommended ``is just common 
sense, as well as good economic sense.'' Id. at 12-13.
                               __________
 Statement of Leslie Allan, Deputy Commissioner for Legal Affairs, New 
                   York City Department of Sanitation
    Mr. Chairman and members of the committee, my name is Leslie Allan, 
and I am Deputy Commissioner for Legal Affairs at the New York City 
Department of Sanitation. On behalf of Mayor Bloomberg, I appreciate 
the opportunity to testify today on pending interstate waste 
legislation--bills that could clearly have a profound impact on the 
City's day-to-day municipal solid waste operations.
    In 1996 Mayor Giuliani and Governor Pataki agreed to close the 
Fresh Kills landfill by December 31, 2001. That decision was the City's 
first step toward embarking on a new, environmentally sound course in 
the management of its solid waste. It is important for the committee to 
recognize from the outset that New York City closed Fresh Kills 
responsibly and appropriately, with due consideration for the states 
and their communities that have chosen to accept the City's waste. On 
March 22, 2001, just about 1 year ago, New York City sent its last 
barge of Department collected waste to Fresh Kills, completing a five-
phase program initiated in July 1997, requiring that all of the City's 
exported waste be disposed of in communities that expressly choose to 
accept it through valid, legally binding Host Community Agreements. 
Since this plan mandates that the City only export to willing 
jurisdictions, the Mayor does not see a need for legislation to require 
New York City to do that which it already requires of itself.
    In exporting its residential waste, the City is exercising nothing 
more than the right the Constitution extends to cities and states 
nationwide--responsible, efficient, and environmentally sound solid 
waste management through heavily regulated and highly competitive 
private sector businesses. The courts have consistently upheld MSW 
shipments as a commodity in interstate commerce, and over the years 
communities have relied on the certainty these decisions provide for 
protecting long-term, free market plans to manage solid waste. This is 
especially important in a landscape where the more rigorous 
environmental protections required under Subtitle D of the Resource and 
Conservation and Recovery Act (RCRA) have compelled communities to 
replace old, small landfills with larger, costlier, state-of-the-art, 
regional facilities that comply with the law. In this context, the 
right to transport solid waste across state lines complements the basic 
reality that different regions have varying disposal capacities 
irrespective of state lines. Areas such as New York City and Chicago, 
lacking adequate space for landfills and/or prohibited from waste 
incineration, may be located closer to better and more cost-effective 
facilities in other states. These facilities need the additional waste 
generated elsewhere to pay for part of the increased cost of RCRA 
compliance.
    Although the closure of Fresh Kills affects only the City's 
residential waste, the private market is as essential to the management 
of that waste as it is to disposing of the City's commercial waste. For 
years the City's businesses have relied on private haulers to export 
waste from New York. For many communities and states, MSW disposable 
fees are an important revenue stream. The City believes that each 
locality has the right to accept or reject the disposal of solid waste 
not by Federal legislation, but by locally decided Host Community 
Agreements.
    The fact is that the City, in securing contracts for waste disposal 
exclusively at Host Community Agreement sites, has furthered a 
partnership that benefits importer and exporter alike. For the nation's 
largest and most densely populated city of eight million people-
comprised of three islands and a peninsula--the ability to send waste 
to newer, more advanced regional facilities located outside the City's 
boundaries acknowledges the very environmental, demographic, and 
geographical realities that made closing Fresh Kills necessary. For the 
localities that have opted to import our waste, the revenue generated 
through host fees, licensing fees, and taxes has substantially enhanced 
the local economy, improved area infrastructure, paid for school 
construction, paved roads, and assisted host communities in meeting 
their own waste management needs. Clearly, there are many other 
jurisdictions nationwide that share New York's approach, since 42 
states import and 46 states and Washington, DC, export municipal solid 
waste.
    For the City and businesses it selects to handle MSW disposal, 
certainty and the long-term security of waste management arrangements 
are fundamental to making New York a viable place to live and work. Any 
disruption to the contracts and agreements providing the City's waste 
disposal framework could interfere with the City's day-to-day 
operations. This is why the City enthusiastically supports the 
importing community's right to negotiate a Host Community Agreement 
most suited to its particular needs, and to spell out in detail all of 
the provisions that make waste disposal from out-of-state acceptable to 
that locality. Conversely, the City will rely on private sector bidding 
to select the most competitive price for disposal. Once formally agreed 
to, however, these agreements and contracts must be inviolate in order 
to preserve the mutual interests of both importers and exporters.
    In that regard, the City has not pre-determined where its municipal 
solid waste will be disposed. Instead, it has put into place measures 
that ensure each bidder has all of the requisite environmental permits, 
along with a Host Community Agreement that verifies the receiving 
jurisdiction's approval of the disposal facility and its acceptance of 
the imported waste and applicable fees. Furthermore, the existing 
authority that states have in permitting solid waste facilities in 
accordance with their own regulatory mandates, zoning ordinances, and 
land use provisions, suggests even less cause for Federal intervention 
through legislation to restrict exports.
    In closing Fresh Kills landfill, the City looked to the private 
sector and the competitive free market to shape the future availability 
of disposal sites. In July 1997, when the City began the first phase of 
diverting waste from the landfill, The New York Times reported that 
certain local officials were ready to welcome New York's waste because 
it made ``good economic sense.'' Robert E. Wright, president of the 
Connecticut Resource Recovery Authority, which oversees and is part 
owner of that state's incinerators, told the press, ``I guess we 
probably have a more favorable eye on New York than some more distant 
states.'' Of some jurisdictions The Times reported further, ``. . . 
where counties have spent millions of dollars to build incinerators, 
local officials generally are eager for any guaranteed flow of trash.''
    New York City, one of the largest consumer markets in the nation, 
is not solely dependent on exporting MSW through private disposal 
markets to close Fresh Kills. Although we are currently retooling our 
residential recycling program, it continues to be one of the most 
ambitious in the nation. New York City's recycling program is the only 
large city program that requires 100 percent of its households--
including multi-family dwelling residents to recycle. Moreover, the New 
York City Mayoral Directive to all City agencies to reduce workplace 
waste and establish accountability measures for waste reductions have 
reduced further the daily tonnage of export.
    The City's residents are huge consumers of goods manufactured in 
and shipped from other states, and the waste generated by packaging 
materials is significant. For that reason, the Mayor supports Federal 
legislation that would limit packaging or require manufacturers to use 
some percentage of recycled content in packaging material. Such 
requirements would have tremendous--and measurable--effect on the 
quantity of exported solid waste. Despite the City's best waste 
reduction and recycling efforts, however, the City will still need to 
dispose of a substantial amount of its waste outside its boundaries. I 
am confident that the capacity, the market, and the desire to 
accommodate the City's waste at out-of-state disposal sites will exist 
in the foreseeable future. To that end, New York City, successfully 
closed Fresh Kills by relying on free market, private sector solutions 
predicated on the strength of Host Community Agreements.
    On behalf of Mayor Bloomberg, I thank the committee and underscore 
the City's interest and commitment in addressing Congress' concerns 
regarding the interstate transport of municipal solid waste.
                               __________
   Statement of Bruce Parker, President & CEO, National Solid Wastes 
                         Management Association
    Mr. Chairman, on behalf of the private sector solid waste 
management industry, I appreciate the opportunity to testify today on 
proposed interstate waste and flow control legislation. I am Bruce 
Parker, President and CEO of the National Solid Wastes Management 
Association (NSWMA). NSWMA represents companies that collect and 
process recyclables, own and operate compost facilities and collect and 
dispose of municipal solid waste (MSW). NSWMA members operate in all 
fifty states.
    The solid waste industry is a $43 billion industry that employs 
more than 350,000 workers. We are proud of the job we do and the 
contribution our companies and their employees make in protecting the 
public health and the environment. America has a solid waste management 
system that is the envy of the world because of our ability to 
guarantee quick and efficient collection and disposal of trash in a 
manner that fully conforms with state and Federal waste management laws 
and regulations.
    Our members provide solid waste management services in a heavily 
regulated and highly competitive business environment. Thus, we are 
critically interested in proposals, such as restrictions on the 
interstate movement of MSW, that would change that regulatory or 
competitive environment, increase the cost of waste disposal and 
threaten the value of investments and plans companies have made in 
reliance on the existing law.
    The message I want to leave with you is this: restricted borders 
have no legitimate place in managing trash or any other product in our 
economy. They do not make economic or environmental sense. They are 
contrary to the concept of open borders; contrary to the evolution to 
bigger, better, more environmentally sound disposal facilities; 
contrary to our desire to keep disposal costs for taxpayers low; and 
contrary to the trend toward more innovative and protective waste 
management facilities.
    In the balance of this statement, I will share with you our reasons 
for concern and opposition to S. 1194, the ``Solid Waste Interstate 
Transportation and Local Authority Act of 2001.'' I will discuss the 
background and context as we see it, and the flaws in the proposed 
legislation.
                   the scope of interstate movements
    Interstate waste shipments are a normal part of commerce. In spite 
of all the impassioned language you have heard from a few states 
denouncing garbage that moves across state lines, the reality is 
simple: every state except Hawaii exports or imports garbage or both 
and none are harmed in the process.
    According to ``Interstate Shipment of Municipal Solid Waste: 2001 
Update,'' which was released by the Congressional Research Service 
(CRS) last July, 30 million tons of MSW crosses state borders. This 
equals approximately 7 percent of the garbage generated in the United 
States and less than 11 percent of what is disposed (generation and 
disposal estimates are based on the same state solid waste data base 
used by the CRS in estimating waste imports and exports).
    These shipments form a complex web of transactions that often 
involve exchanges between two contiguous states in which each state 
both exports and imports MSW. In fact, the vast majority of exported 
MSW, more than 80 percent, goes to a disposal facility in a neighboring 
state. According to the CRS report, 24 states, the District of Columbia 
and the province of Ontario exported more than 100,000 tons of solid 
waste last year. At the same time, 28 states imported more than 100,000 
tons. Fifteen states imported and exported more than 100,000 tons.
    The CRS report documents interstate movements of MSW involving 49 
of the 50 states. Forty-six states, the District of Columbia and one 
Canadian province export and 42 states import. Attached is ``Interstate 
Movement of Municipal Solid Waste'' (NSWMA Research Bulletin 02-01) 
which contains extensive information on this subject, including a map 
showing the movement of solid waste among the states that is based on 
the data in the CRS report.
    Moreover, while some states are the biggest exporters based on 
tonnage, several small states and the District of Columbia are highly 
dependent on waste exports. In addition to Washington, DC, which 
exports all of its MSW, Connecticut, Illinois, Maryland, Missouri, New 
Jersey, New York, Rhode Island, Vermont and West Virginia export more 
than 15 percent of their solid waste. The reality is that MSW moves 
across state lines as a normal and necessary part of an environmentally 
protective and cost effective solid waste management system. Like 
recyclables, raw materials and finished products, solid waste does not 
recognize state lines as it moves through commerce. In fact, the United 
States has benefited both environmentally and economically from the 
free market for waste disposal and recyclables.
    CRS cites a number of reasons for interstate movements. These 
include enhanced disposal regulations and the subsequent decline in 
facilities. In addition, CRS notes that in larger states ``there are 
sometimes differences in available disposal capacity in different 
regions with the state. Areas without capacity may be closer to 
landfills (or may at least find cheaper disposal options) in other 
states.''
                     the role of regional landfills
    The CRS report notes that the number of landfills in the US 
declined by 51 percent between 1993 and 1999 as small landfills closed 
in response to the increased costs of construction and operation under 
the Resource Conservation and Recovery Act (RCRA) Subtitle D and state 
requirements for more stringent environmental protection and financial 
assurance. The number of landfills in the early 1990's was nearly 
10,000 while today there are about 2,600 and the total number continues 
to decline as small landfills close, and communities in ``wastesheds'' 
turn to state-of-the-art regional landfills that provide safe, 
environmentally protective, affordable disposal.
    Construction and operation of such facilities, of course, requires 
a substantial financial investment. By necessity, regional landfills 
have been designed in anticipation of receiving a sufficient volume of 
waste from the wasteshed, both within and outside the host state, to 
generate revenues to recoup those costs and provide a reasonable return 
on investment.
    It was widely recognized that the costs to most communities of 
Subtitle D-compliant ``local'' landfills were prohibitive. The 
development of regional landfills was entirely consistent with all 
applicable law, and was viewed and promoted by Federal and state 
officials and ensuing regulatory policy as the best solution to the 
need for economic and environmentally protective disposal of MSW.
    These regional landfills provide safe and affordable disposal as 
well as significant contributions to the local economy through host 
fees, property taxes, and business license fees. Additional 
contributions to the communities include free waste disposal and 
recycling services, and in some cases assumption of the costs of 
closing their substandard local landfills. These revenues and services 
enable the host communities to improve and maintain infrastructure and 
public services that would otherwise not be feasible.
 both the public and the private sectors oppose interstate restrictions
    NSWMA is not alone in opposing restrictions on interstate waste. 
The Solid Waste Association of North America (SWANA), which represents 
both public and private sector solid waste management professionals, 
also opposes these restrictions. At its mid-year meeting last summer, 
SWANA's International Board of Directors voted unanimously to approve a 
policy statement that supports ``the free transboundary movement of 
solid waste''.
    Public sector waste managers and private sector waste management 
companies agree that they can't do their job and protect the public 
health and the environment while having their hands tied by artificial 
restrictions based on state lines.
                        host communities benefit
    MSW also moves across state lines because some communities invite 
it in. Many communities view waste disposal as just another type of 
economic activity, as a source of jobs and income. As noted above, 
these communities agree to host landfills and in exchange receive 
benefits, which are often called host community fees, that help build 
schools, buy fire trucks and police cars, and hire teachers, firemen 
and policemen and keep the local tax base lower.
                          the broader context
    The legislation currently proposed on this issue, S. 1194, would 
radically disrupt and transform the situation I have described. For 
that reason, as well as the precedential nature of some of the 
provisions, let me suggest that you consider this legislation in a 
broader context.
    The applicability of the Commerce Clause to the disposal of out-of-
state waste is well established by a long line of U.S. Supreme Court 
decisions spanning more than a quarter of a century. As you probably 
know, the original decision protected Pennsylvania's right to export 
its garbage to a neighboring state. The Court has consistently 
invalidated such restrictions in the absence of Federal legislation 
authorizing them.
    Throughout this period, private sector companies did what 
businesses do: they made plans, invested, wrote contracts, and marketed 
their products and services in reliance on the rules which clearly 
protected disposal of out-of-state MSW from restrictions based solely 
upon its place of origin.
    In this fundamental sense, the interstate commerce in waste 
services is like any other business, and proposed legislation to 
restrict it should be evaluated in the broader context of how you would 
view it if its principles and provisions were made applicable to other 
goods and services, rather than just garbage.
    Consider, for example, parking lots. Suppose a state or local 
government sought Federal legislation authorizing it to ban, limit, or 
charge a differential fee for parking by out-of-state cars at privately 
owned lots or garages, arguing that they were using spaces needed for 
in-state cars, and that the congestion they caused was interfering with 
urban planning, etc. Or suppose they asked for authority to tell 
privately owned nursing homes or hospitals that they couldn't treat 
out-of-state patients because of the need to reserve the space, 
specialized equipment, and skilled personnel to meet the needs of their 
own citizens. Similar examples can easily be identified--commercial 
office space for out-of-state businesses, physicians and dentists in 
private practice treating out-of-state patients, even food or drug 
stores selling to out-of-state customers.
    I would hope that in all of these cases, you would respond to the 
proponents of such legislation by asking a number of questions before 
proceeding to support the restrictions: What kind of restrictions do 
you want? Are they all really necessary? Can you meet your objectives 
with less damaging and disruptive means? What about existing 
investments that were made in reliance on the ability to serve out-of-
state people? What about contracts that have been executed to provide 
that service? Would authorizing or imposing such restrictions be an 
unfunded mandate on the private sector providing those services, or on 
the public sector outside the state that is relying on them? Would such 
restrictions result in the diminution of the value of property 
purchased in reliance on an out-of-state market, and thereby constitute 
a ``taking''? Will the restrictions be workable and predictable? I 
respectfully suggest that you ask the same questions about the proposed 
legislation involving restrictions on interstate MSW.
                        the proposed legislation
    The proposed legislation, S. 1194, fails to protect host agreements 
and investments. Nor does it preserve an opportunity to enter and grow 
in a market that demands economic and protective waste disposal. And it 
also fails to provide predictability about the rules that will apply to 
interstate shipments of waste. The array of discretionary authorities 
for Governors to ban, freeze, cap, and impose fees, and then change 
their minds over and over again, promises to result in chaos and a 
totally unpredictable and unreliable market and waste disposal 
infrastructure. In the worst case, hasty state action to ban or limit 
imports could lead to a public health crisis in exporting states if 
their garbage has no where to go.
                              flow control
    NSWMA opposes restoration of flow control because it's too late to 
put Humpty Dumpty back together again. In the 8 years since the Carbone 
decision, landfills and transfer stations have been constructed, trucks 
have been bought, people have been hired, contracts have been written, 
and both the consumers and providers of waste services have experienced 
the benefits of a competitive market. These investments and 
arrangements cannot be undone, nor should they be. The facilities that 
benefited from an uncompetitive monopolization of local solid waste 
management have learned to compete in a free market. They have become 
more efficient and competitive as a result of the rigors of the free 
market system. Why would anyone want to replace a competitive system 
with uncompetitive monopolies?
  restricting or prohibiting the importation of canadian waste raises 
serious questions about american obligations under international trade 
                               agreements
    S. 1194 would also restrict the importation of MSW form Canada and 
in so doing, raises serious questions about American responsibilities 
under the North American Free Trade Agreement, the General Agreement 
and Tariffs and Trade and the Canada-U.S.A. Agreement on the 
Transboundary Movement of Hazardous Waste (amended to include solid 
waste).
    MSW may not be everyone's favorite commodity, but it is covered by 
the same free trade provisions that protect paper and cars and 
television sets. If we could close our borders to Canadian solid waste, 
what would prevent Canada from closing its borders to American 
hazardous waste? American exports of hazardous waste to Canadian 
disposal facilities have increased dramatically over the last 5 years. 
If Michigan can ban Canadian MSW, why can't the Canadians be allowed to 
ban Michigan hazardous waste?
                               conclusion
    Thank you, Mr. Chairman. That concludes my statement.

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

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

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

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

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

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

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

    Question 4. Do private sector providers of waste management 
services factor all costs, including cost of land used, closure and 
post-closure, in determining the price they charge for their service.
    Response. We are not privy to how members of NSWMA or other private 
sector firms price their services. However, all fixed and variable 
costs must be included in the tip fee in order for a facility to cover 
its costs. Disposal facilities cannot stay in operation if they are 
unable to cover their costs. As to closure and postclosure costs, 
normal enforcement of the financial assurance provisions of the 
Subtitle D regulations should guarantee that those costs are included 
in the tipping fee.
                                 ______
                                 
 Responses by Bruce Parker to Additional Questions from Senator Clinton
    Question 1. In your testimony you indicated that the construction 
and operation of environmentally sound landfill facilities requires a 
substantial financial investment. Can you please tell us a little bit 
more about the scale of such financial investments, as well as the time 
and resources needed to site and permit these facilities?
    Response. Prior to EPA's promulgation of the municipal solid waste 
(MSW) landfill criteria under RCRA part 258 (commonly referred to as 
the Subtitle D regulations) in 1991, many landfills operated with 
minimal or no environmental protections. Those landfills that were 
built with liners, leachate control systems and other technologies 
designed to protect public health and the environment, were at a 
competitive disadvantage with these unlined dumps. This competitive 
disadvantage was caused by the cost of installing environmentally 
protective technology and operating the facility in a protective manner 
as opposed to the cost of just digging a hole, throwing garbage in and 
eventually covering the site.
    EPA's Subtitle D regulations raised the environmental standards for 
all MSW landfills by requiring criteria for siting, operating, 
designing (including liners and leachate collection systems), and 
monitoring groundwater. These regulations also require that corrective 
action be taken if necessary to clean up contamination from the 
facility, that for at least 30 years after the landfill closes 
monitoring and corrective action must continue, and that funds will be 
available to ensure that these activities are performed.
    The cost of meeting the Federal standards is substantial. Landfill 
experts estimate that predevelopment costs alone can be as much as $10 
million. These costs include, for example, site selection studies, land 
purchase, environmental assessments, hydrogeologic analyses, 
engineering fees, and licensing and permit review fees. Construction 
costs, which would include the liners and leachate collection systems, 
can be 500,000 per acre. When the other costs of owning and operating a 
Subtitle D compliant MSW landfill are taken into account, the total 
costs are commonly $100 million and may approach $300 million.
    Because the siting process can be long, involving extensive public 
review of applications and a thorough permitting process at the state 
level, 7 or 8 years can elapse between the time the facility operator 
commits to building a landfill at a particular site and the facility is 
fully permitted and operating.

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

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

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

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

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

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

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

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

                               __________

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

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


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


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


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

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

                               __________

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

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

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

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































































































































































































































                                
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