[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]



 
               IMPACTS OF RAILROAD-OWNED WASTE FACILITIES

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

                                (109-74)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

                               RAILROADS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 23, 2006

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure




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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                      DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-    JAMES L. OBERSTAR, Minnesota
Chair                                NICK J. RAHALL, II, West Virginia
SHERWOOD L. BOEHLERT, New York       PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
WAYNE T. GILCHREST, Maryland         Columbia
JOHN L. MICA, Florida                JERROLD NADLER, New York
PETER HOEKSTRA, Michigan             CORRINE BROWN, Florida
VERNON J. EHLERS, Michigan           BOB FILNER, California
SPENCER BACHUS, Alabama              EDDIE BERNICE JOHNSON, Texas
STEVEN C. LaTOURETTE, Ohio           GENE TAYLOR, Mississippi
SUE W. KELLY, New York               JUANITA MILLENDER-McDONALD, 
RICHARD H. BAKER, Louisiana          California
ROBERT W. NEY, Ohio                  ELIJAH E. CUMMINGS, Maryland
FRANK A. LoBIONDO, New Jersey        EARL BLUMENAUER, Oregon
JERRY MORAN, Kansas                  ELLEN O. TAUSCHER, California
GARY G. MILLER, California           BILL PASCRELL, Jr., New Jersey
ROBIN HAYES, North Carolina          LEONARD L. BOSWELL, Iowa
ROB SIMMONS, Connecticut             TIM HOLDEN, Pennsylvania
HENRY E. BROWN, Jr., South Carolina  BRIAN BAIRD, Washington
TIMOTHY V. JOHNSON, Illinois         SHELLEY BERKLEY, Nevada
TODD RUSSELL PLATTS, Pennsylvania    JIM MATHESON, Utah
SAM GRAVES, Missouri                 MICHAEL M. HONDA, California
MARK R. KENNEDY, Minnesota           RICK LARSEN, Washington
BILL SHUSTER, Pennsylvania           MICHAEL E. CAPUANO, Massachusetts
JOHN BOOZMAN, Arkansas               ANTHONY D. WEINER, New York
JIM GERLACH, Pennsylvania            JULIA CARSON, Indiana
MARIO DIAZ-BALART, Florida           TIMOTHY H. BISHOP, New York
JON C. PORTER, Nevada                MICHAEL H. MICHAUD, Maine
TOM OSBORNE, Nebraska                LINCOLN DAVIS, Tennessee
KENNY MARCHANT, Texas                BEN CHANDLER, Kentucky
MICHAEL E. SODREL, Indiana           BRIAN HIGGINS, New York
CHARLES W. DENT, Pennsylvania        RUSS CARNAHAN, Missouri
TED POE, Texas                       ALLYSON Y. SCHWARTZ, Pennsylvania
DAVID G. REICHERT, Washington        JOHN T. SALAZAR, Colorado
CONNIE MACK, Florida                 JOHN BARROW, Georgia
JOHN R. `RANDY' KUHL, Jr., New York
LUIS G. FORTUNO, Puerto Rico
LYNN A. WESTMORELAND, Georgia
CHARLES W. BOUSTANY, Jr., Louisiana
JEAN SCHMIDT, Ohio

                                  (ii)



                       SUBCOMMITTEE ON RAILROADS

                  STEVEN C. LaTOURETTE, Ohio, Chairman

THOMAS E. PETRI, Wisconsin           CORRINE BROWN, Florida
SHERWOOD L. BOEHLERT, New York       NICK J. RAHALL II, West Virginia
JOHN L. MICA, Florida                JERROLD NADLER, New York
SPENCER BACHUS, Alabama              BOB FILNER, California
JERRY MORAN, Kansas                  ELIJAH E. CUMMINGS, Maryland
GARY G. MILLER, California           EARL BLUMENAUER, Oregon
ROB SIMMONS, Connecticut             LEONARD L. BOSWELL, Iowa
TODD RUSSELL PLATTS, Pennsylvania    JULIA CARSON, Indiana
SAM GRAVES, Missouri                 PETER A. DeFAZIO, Oregon
JON PORTER, Nevada                   JERRY F. COSTELLO, Illinois
TOM OSBORNE, Nebraska                EDDIE BERNICE JOHNSON, Texas
MICHAEL E. SODREL, Indiana           JAMES L. OBERSTAR, Minnesota
LYNN A. WESTMORELND, Georgia, Vice-  JOHN BARROW, Georgia
Chair                                  (ex officio)
DON YOUNG, Alaska
  (ex officio)

                                 (iii)

                                CONTENTS

                               TESTIMONY

                                                                   Page
 Chasey, Kathy, Mayor, Mullica Township, New Jersey..............     9
 Buttrey, Hon. W. Douglas, Chairman, Surface Transportation 
  Board, accompanied by Evelyn Kitay, Associate General Counsel, 
  Surface Transportation Board...................................     9
 Haines, William S., Jr., Deputy Director, Burlington County 
  Board of Chosen Freeholders....................................     9
 Menendez, Hon. Robert, a U.S. Senator from New Jersey...........     5
 Pallone, Hon. Frank, Jr., a U.S. Representative from New Jersey.     7

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Barrow, Hon. John, of Georgia....................................    32
Cummings, Hon. Elijah E., of Maryland............................    51
 Menendez, Hon. Robert, of New Jersey............................    59
Saxton, Hon. Jim, of New Jersey..................................    61

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

 Buttrey, Hon. W. Douglas........................................    34
 Chasey, Kathy...................................................    44
 Haines, William S., Jr..........................................    56

                        ADDITIONS TO THE RECORD

Cape May County Municipal Utilities Authority, Charles M. Norkis, 
  P.E., Executive Director, statement............................    61
Hinchey, Hon. Maurice D., a Representative in Congress from New 
  York...........................................................    78
MassRecycle, Lisa Hayden, Legislative Analyst, letter, June 20, 
  2006...........................................................    69
National Solid Wastes Management Association, Bruce J. Parker, 
  President and CEO, statement...................................    71
New Jersey State League of Municipalities, Willaim G. Dressel, 
  Jr., Executive Director, letter, May 11, 2006..................    70


               IMPACTS OF RAILROAD-OWNED WASTE FACILITIES

                              ----------                              


                         Tuesday, May 23, 2006

        House of Representatives, Subcommittee on 
            Railroads, Committee on Transportation and 
            Infrastructure, Washington, D.C.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2167, Rayburn House Office Building, the Hon. Steven C. 
LaTourette [Chairman of the subcommittee] presiding.
    Mr. LaTourette. The Subcommittee on Railroads will come to 
order this morning. Good morning, I want to welcome you all to 
this morning's hearing which is entitled the Impacts of 
Railroad-Owned Waste Facilities.
    Under the ICC Termination Act of 1995, the United States 
Surface Transportation Board has exclusive jurisdiction over 
railroad facilities such as freight yards, truck to rail 
intermodal facilities, and auxiliary tracks. Thus, Federal law 
preempts State and local law regarding establishment and 
operation of such rail facilities. However, this preemption 
only applies when the entity in question is a rail carrier 
subject to STB jurisdiction. If the entity is not legally a 
rail carrier, then State and local law applies.
    Now when you think of a rail carrier, you probably envision 
chugging locomotives, rumbling freight trains, and tracks 
stretching beyond the horizon. But what if a company only owns 
a few hundred feet of track, can it still legitimately claim to 
be a railroad? And what if that same company is engaged in the 
potentially noxious business such as waste disposal? Should the 
ownership of a short piece of railroad track equate to complete 
exemption from State and local oversight? In my mind, the 
answer is no. Congress established Federal preemption under the 
ICC Termination Act to ensure the free flow of interstate 
commerce, not as a loophole to allow sharp operators to escape 
legitimate local regulation.
    At this morning's hearing, I am going to have some 
questions for Commissioner Buttrey about how we can assure that 
Federal preemption applies only to legitimate rail carriers. I 
am also looking forward to hearing about the limitations of 
preemption under the ICC Termination Act and the extent to 
which State and local laws may still be applicable.
    I want to welcome our other witnesses this morning: Mr. 
William Haines, Jr., who is the Deputy Director of the 
Burlington County, New Jersey Board of Chosen Freeholders and 
Ms. Kathy Chasey, who is the Mayor of the Mullica--if I butcher 
that, I apologize, you will hear from me later--Township in New 
Jersey. I want to thank you for participating in this important 
Subcommittee hearing.
    Before yielding to our guest Ranking Member Mr. Barrow of 
Georgia, I want to request unanimous consent to allow 30 days 
for members to revise and extend their remarks and to permit 
the submission of additional statements and materials by 
members and witnesses. Without objection, so ordered.
    It is now my pleasure to yield to Mr. Barrow for his 
opening remarks.
    Mr. Barrow. Thank you, Mr. Chairman, for holding this 
hearing. I want to welcome our guests and thank them for 
joining us today.
    When Congress passed the Interstate Commerce Commission 
Termination Act in 1995, we gave the Surface Transportation 
Board exclusive jurisdiction over rail carrier transportation. 
The reason we did that was to create a seamless rail 
transportation network rather than to subject railroads to a 
patchwork of State and local regulations that might hinder 
interstate commerce. However, Congress did not intend for this 
law to enable railroads to shield themselves from State and 
local regulations when they are engaging in activities that 
have nothing to do with rail transportation.
    There was a case in Florida where a building material 
supplier leased land from a short line railroad. West Palm 
Beach issued several notices of violations and cease and desist 
orders to the railroad and the supplier for operating a 
business without a license and for refusing to conform to the 
zoning ordinance. In response, both the railroad and the 
supplier filed a complaint with the District Court, seeking a 
judgment on whether the Interstate Commerce Commission 
Termination Act preempted West Palm Beach's local laws. 
Fortunately, in that case, the Court's decision was obvious. 
There was no preemption because the business had nothing to do 
with rail transportation. However, in other cases, the outcome 
may not be so obvious.
    In my view, the line between what is preempted and what is 
not preempted is a little thin. So I would, in closing, just 
caution the Surface Transportation Board that, while we want to 
make sure that local communities don't unreasonably interfere 
with interstate commerce, we need to make sure that interstate 
commerce doesn't ignore the legitimate concerns of local 
communities.
    Thank you, Mr. Chairman. I look forward to hearing from the 
witnesses and yield back the balance of my time.
    Mr. LaTourette. I thank you, Mr. Barrow. I remarked to Mr. 
Barrow when he came in, he has only been on the Committee about 
a month, and he is already a Ranking Member. So, 
congratulations to you in your elevation.
    There is a lot interest, obviously, in this subject matter 
in the States of New Jersey and New York, and this hearing 
comes about at the request of a number of members, in 
particular Mrs. Kelly, Mr. LoBiondo, Mr. Saxton, and our first 
panel as well.
    I would now be happy to yield to Mrs. Kelly for any opening 
remarks that you choose to make.
    Mrs. Kelly. First, let me thank you, Chairman LaTourette, 
for holding this hearing and spotlighting an issue that is 
begging for attention at the Federal level.
    By manipulating the Interstate Commerce Commission 
Termination Act, waste hauling companies have been able to 
circumvent local environmental safety and zoning regulations as 
well as State laws by claiming to operate as a rail carrier, 
due to their company operating near or on a small portion of a 
railway. The near placement of a company's facilities near a 
rail line should not permit a waste facility to evade State and 
local regulation, but that is exactly what is happening.
    When I first brought this issue to your attention in my 
March 17th letter to you, I knew that this issue was not one 
that was exclusive to my New York-based District. If it is 
happening in Westchester and Orange Counties in New York, it is 
likely occurring in other places in the United States. It seems 
that this perspective is affirmed today as we see a wide range 
of municipalities represented here, both in person and in 
written testimony.
    In two separate parts of my own Congressional District, 
local officials have had their safety and environmental 
regulations essentially bypassed by quasi-railroad operators. 
In Croton, New York, in Westchester County, a railway requested 
an exemption from the Surface Transportation Board to operate a 
waste transfer station on a railway in the village. Such an 
exemption would have permitted the company to operate without 
it having to adhere to State or local zoning and environmental 
laws. The site is owned by a company with a long history of 
environmental abuses.
    In August of last year, I wrote the STB on behalf of Croton 
officials, asking them to deny the exemption which they 
ultimately and thankfully did. However, it appears that another 
company is trying to take a similar strategy, forcing the 
village into the same time consuming and costly process all 
over again. We can't allow this revolving door to continue to 
the detriment of our public health and safety.
    In a separate part of my District, a new rail company plans 
to build a waste station that currently does not exist but 
which the local and State governments are powerless to prevent 
because of its planned proximity to railroad tracks. This 
scenario is equally disturbing because it suggests that a rail 
company could not only open a waste transfer station wherever 
it chooses but that it could also undermine waste facility 
operators that already have been good neighbors and have 
respected State and local regulation. This scenario opens up a 
Pandora's Box and removes any and all incentives for waste 
haulers to adhere to local regulation by simply locating their 
operations near train tracks or by building a couple hundred 
feet on their own.
    While we don't want to return to the pre-Staggers era of 
over-regulation of the railroads, we simply can't accept the 
fact that waste facilities can pop up in our communities with 
little or no input from local and State officials.
    I hope this hearing will produce a constructive dialogue 
that will lead us toward a solution that will provide State and 
local Governments with input into the process that currently 
shuts them out. The list of elected officials that are opposed 
to these two projects include State Senators and assemblymen, 
supervisors, mayors, councilmen, and board members, not to 
mention a vocal majority of the public at large. Despite all 
that opposition, the current process leaves local officials 
with no voice at all.
    I have introduced legislation that would ensure that local 
and State environmental and safety regulations are adhered to 
by waste haulers and rail operators. As Middletown Mayor 
Marlinda Duncanson says in her statement, some of the affected 
towns have long cooperative relationships with rail companies, 
and it is undoubtedly in the best interest of those rail 
companies, the waste haulers, and the public at large that we 
work to ensure that the companies operating in our communities 
continue to be good neighbors.
    So I ask unanimous consent that the statements of Croton 
Mayor Gregory Schmidt, Middletown Mayor Duncanson, and the 
testimony of Wawayanda Supervisor, John Razzano and Deputy 
Supervisor Dave Cole be submitted for record.
    I look forward to the testimony of all of our witnesses, 
and I thank you once again, Chairman LaTourette. This is an 
important hearing. I appreciate your allowing me to be here.
    Mr. LaTourette. Without objection, the gentlelady's request 
will be granted.
    The Chair is advised that Mr. Boswell doesn't have any 
opening remarks.
    Mr. LoBiondo?
    Mr. LoBiondo. Yes, Mr. Chairman, thank you very much for 
holding this hearing and responding to our serious concerns. We 
deeply appreciate it. I want to thank Mr. Saxton for joining 
with me on behalf of South Jersey and also Senator Menendez and 
Congressman Pallone for being here today, something that I 
believe has united the New Jersey delegation.
    I am very pleased that we have Mayor Kathy Chasey of 
Mullica Township, who will be testifying in a little while, and 
Freeholder Bill Haines from Burlington Township. I have a port 
in Burlington Township. Mr. Saxton and I share the geographic 
jurisdiction. I am sure they will be able to give you some very 
compelling remarks.
    Mayor Chasey and the residents of Mullica Township have 
been through a very agonizing period over the last year. In the 
spring of 2005, a local waste disposal company leased 20 acres 
of land adjacent to a short line owned and operated by a 
railroad company for the purpose of establishing a 24 hour a 
day waste transfer facility. Needless to say, the township was 
very, very concerned with the impact the facility would have on 
the quality of life for its residents. Concern turned to 
outrage very quickly after the township was informed that 
existing Federal law preempts any local or State laws, zoning 
ordinance, or environmental regulations.
    Mullica Township joined with the State of New Jersey to 
fight the proposed facility in Federal Court. In December of 
2005, the Court imposed an injunction barring the development 
of the facility until the Court can resolve whether the 
National Parks and Recreation Act of 1978 conflicts with the 
preemption standard and the Interstate Commerce Commission Act 
of 1995.
    The National Parks and Recreation Act established the 
Pinelands National Reserve, 1.1 million acres of land, the 
development of which requires the approval of a joint Federal 
and State commission. Fortunately, Mullica Township falls 
nearly in the center of the Pinelands, and the conflicting 
Federal laws have granted the township a temporary stay of 
execution that we hope will be made permanent. In the interim, 
I am working with all of my colleagues but especially 
Congressman Saxton of our delegation on legislation we have 
introduced to remove the Federal preemption of waste transfer 
facilities.
    I understand the concerns our railroads have in reducing 
the scope of Federal preemption, but facilities that are not 
integral to the operation of a railroad, such as a waste 
transfer station, which threaten the environment and local 
quality of life should not be granted approval without the 
concurrence of the local residents.
    I want to thank the Chairman again for holding this 
hearing, and I am looking forward to the testimony.
    Mr. LaTourette. I thank you, Mr. LoBiondo.
    On our first panel today, we are joined by a colleague and 
a former colleague. It is my pleasure to welcome for their 
testimony today, first, Senator Robert Menendez, a former 
member of this Committee, welcome back, and secondly, 
Representative Frank Pallone, both of New Jersey.
    Senator, thank you for making time to come over and see us, 
and we look forward to hearing from you.

 TESTIMONY OF THE HONORABLE SENATOR ROBERT MENENDEZ, A UNITED 
          STATES SENATOR FROM THE STATE OF NEW JERSEY

    Senator Menendez. Thank you, Mr. Chairman, and thank you 
for the opportunity. I am glad to join with my colleagues here 
in a united effort which I think transcends New Jersey. You 
will hear a lot of New Jersey voices here today, but in fact 
this issue is far beyond the confines of New Jersey.
    I appreciate your and the Ranking Member's focus on this, 
on an issue that has severely impacted our State in recent 
years and threatens to get a lot worse if action isn't taken by 
the Congress. And so, this hearing is incredibly important as 
we look at, I hope, closing a glaring loophole in Federal law 
that puts all of our States and Districts at risk, allows 
railroads to flout the critical Federal and State and local 
environmental protections that keep our rivers clean, our air 
clean, and our families healthy.
    Now, my attention was first drawn to this when I had the 
privilege previously, as a member of this Committee and 
representing the 13th Congressional District in New Jersey, 
when a small railroad began operating a solid waste transfer 
facility in one of our communities for construction and 
demolition debris. Those sites were open to the air, polluting 
the surrounding neighborhoods with windblown debris. They had 
extremely poor storm water controls, if any at all, allowing 
rain to leach through the trash piles and into sensitive 
wetlands. The piles of trash at those sites could reach the 
height of a three-story building, and at least on one occasion, 
they caught fire.
    It was inconceivable that these sites could actually be 
legal. Of course, they really weren't legal, at least not 
according to the State which fined the operator $2.5 million. 
The county and local planning boards were sent impassioned 
pleas asking for help. But the railroad claimed that because of 
the exclusive jurisdiction of the Surface Transportation Board 
over railroad activities, they were exempt from all State and 
local regulations regarding the handling of solid waste.
    Now, Mr. Chairman, I think all of us, when we look at 
Congress' intent when it passed the Interstate Commerce 
Commission Termination Act in 1995, it created the Surface 
Transportation Board and gave it broad authority over the rail 
transportation issues. I don't think that this was envisioned 
as being part of that focus. However, despite the preemption of 
local regulations, I think Congress' intent was very clear at 
the time ICCTA was passed, and in that respect, the Congress 
did not intend to preempt Federal environmental statutes such 
as the Clean Air and Clean Water Acts.
    There are a series of cases that my statement has in it, 
Mr. Chairman, which I would ask consent to be included in the 
record in its full.
    The reality is that the EPA has virtually no regulatory 
regime for solid waste facilities since that responsibility is 
supposed to be handled by the States. In this case, however, 
the States are being prevented from acting, leaving a 
regulatory hole that results in harm to the environment and the 
families living in close proximity to these waste transfer 
sites.
    This is not a problem that is going away either. The New 
Jersey Department of Environmental Protection reports that no 
less than five new railroad-operated waste transfer sites 
opened just in the past year. While most of them are in one 
community, you will hear about others in different parts of the 
State as well.
    Now, one of the challenges, and I know Congressman Pallone 
will probably speak to this, is that companies continue to 
exploit the loophole. One recycling company that wants to open 
a transfer facility in Monmouth County has voluntarily brought 
their proposal to the county's Solid Waste Transfer Council, 
but said, if the council denies the application, they would 
``pursue a preemption facility and form a union with a 
railroad, and under Federal law, all local authority and 
control would be lost.'' So, in essence, not only are there 
those who are directly flouting the very intention that we had, 
but there are those who are attempting to strong-arm local 
authorities, and that is clearly not what Congress had in mind 
when it passed the ICCTA.
    It is obvious that voluntary actions will not be enough to 
protect the health and safety of New Jersey residents and 
workers in these facilities.
    Finally, Mr. Chairman, it is my opinion that the operation 
of a solid waste transfer facility is in no way integral to the 
operation of a railroad. That question has not been settled by 
the Courts or the Surface Transportation Board, but it can be 
settled unambiguously by the Congress. Last July when I was 
still in the House, I joined members of both parties of our 
delegation including some on this Committee to introduce H.R. 
3577 that would explicitly state that the Surface 
Transportation Board does not have exclusive preemption over 
the operation of solid waste transfer facilities and that these 
facilities would be subject to local zoning and environmental 
regulations.
    I don't think we can stand idly by and allow railroads to 
exploit an unintended loophole in Federal law at the price of 
the health and well being of the constituents and our 
environment. So I commend you, Mr. Chairman, for holding the 
hearing. I hope we will see action.
    We are pursuing this on the Senate side. I know Senator 
Lautenberg has the exact legislation that I introduced in the 
House. We are aggressively pursuing it there, and I hope that 
together we can preserve the essence of the preemption for the 
railroads as it relates to all legitimate issues that are in 
the operation of a railroad. When they overreach and say that 
solid waste transfer stations are part of that legitimacy, I 
think that they are flouting the intention of the Congress. I 
appreciate your leadership in this regard.
    Mr. LaTourette. Senator, without objection, your full 
statement will be inserted in the record, and I want to thank 
you for taking time from your duties on the other side of the 
Capitol to share your thoughts with us.
    Congressman Pallone, thank you for coming, and we look 
forward to hearing from you.

TESTIMONY OF THE HONORABLE FRANK PALLONE, JR., A UNITED STATES 
          REPRESENTATIVE FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman, and also our Ranking 
Member Mr. Barrow, thank you also for holding this hearing and 
for allowing me to testify before you today.
    I did want to particularly make mention of the comments 
that the Chairman made in his opening remarks where he said 
that preemption should apply only to legitimate rail carriers. 
I think that if legislation is passed that essentially 
implements what the Chairman said in that remark, we will be 
very happy.
    I would point out, however, that if you listened to Senator 
Menendez' comments with regard to the Red Bank proposal which 
is in my District, I am sure you heard him say that one of the 
options of one of these private companies that is suggesting 
they can utilize this preemption is that they would essentially 
tell the local officials: Look, if you don't approve this, then 
we will get together with one of the rail carriers and have 
this operated under their auspices.
    So when we talk about how we are going to sort out 
legitimate rail carriers and what they do, we have to be 
mindful of the fact that there are those unrelated to rail who 
will try to somehow come under the auspices of rail carriers, 
and we are going to figure out how to deal with those kinds of 
loopholes that different people will try to create. But I do 
appreciate your comments.
    Obviously, today's hearing highlights what has become a 
very troubling issue throughout my home State of New Jersey, 
but as some of the other members, like Mrs. Kelly, have 
mentioned, this is a threat nationwide, I think, to our 
environment and to public health. As you know, certain waste 
handlers and railroad companies have tried to exploit this 
loophole in Federal law in order to set up unregulated waste 
transfer facilities.
    Under the Interstate Commerce Commission Termination Act of 
1995, the Surface Transportation Board has exclusive 
jurisdiction over transportation by rail carriers and the 
ability to grant Federal preemption over other laws at any 
level--local, State or Federal--that might impede such 
transportation. This makes sense, and it was obviously 
Congress' intention in passing the ICCTA to ensure that the STB 
would enforce compliance with the Commerce clause.
    And I agree that local and State Governments should not 
have the ability to unduly impede interstate rail operation, 
but Congress intended such authority to extend only to 
transportation by rail, not to the operation of facilities that 
are merely sited next to rail operations or have a business 
connection to a rail company. Unfortunately, certain companies 
have exploited uncertainty regarding Congressional intent to 
build or plan waste transfer stations next to rail lines and 
avoid any regulation, giving them a competitive advantage.
    In New Jersey, there are approximately nine railroad 
transfer facilities operating under supposedly Federal 
preemption, one of which actually handles hazardous waste, and 
some of these companies have gone before the STB to seek 
Federal preemption of a host of environmental and public health 
laws that apply in every other waste transfer facility. Even 
without applying for specific exemptions from the STB, 
companies have held up the threat of Federal preemption as a 
way of getting local and State Governments to back down on 
proposed regulations.
    Now, word is spreading. This is getting worse, Mr. 
Chairman, in my State. In my home District, Senator Menendez 
mentioned a company called Red Bank Recycling is preparing to 
take advantage of the possibility of preemption and move 
forward with a proposal to build railroad sitings as well as 
facilities for transferring construction debris and separating 
recyclable materials.
    Officials from the borough of Red Bank, the County Solid 
Waste Advisory Council, and the State have all weighed in with 
my office, expressing grave concerns about this proposal. The 
Red Bank proposal and others throughout the State have shown 
that certain waste haulers are trying hard to avoid 
environmental regulations and to site facilities in 
environmentally sensitive locations. One facility in Mullica 
Township--the Mayor is here--was stopped by a court order 
before it could begin operations but would have been located in 
the midst of the Pinelands region.
    Unregulated waste transfer stations are not merely small 
operations that exist to move containerized waste from trucks 
to rail, and that is why I brought this poster which is to my 
right. As you can see from the poster, these facilities are 
large, they are dirty, and often in the midst of heavily 
populated areas. The one picture here in the poster is in North 
Bergen, New Jersey, and as you can see clearly, it is right 
across the street from a McDonald's and other retail locations. 
This facility performs much of the same work that you would 
expect to see at any large waste transfer station with the 
exception that this particular station does not have to comply 
with the State's rigorous solid waste regulations.
    Mr. Chairman, I don't come before you to ask that Congress 
do anything to interfere with the legitimate interstate 
movement of freight rail. You mentioned that yourself, Mr. 
Chairman. In fact, the freight rail industry itself does not 
see Federal preemption of environmental laws as critical to 
their commerce. In a recent filing with the STB, the 
Association of American Railroads noted that potential Federal 
loopholes under the ICCTA are being abused by parties whose 
objective is something other than providing rail service. So 
they agree with us.
    I simply want to ensure that these new waste facilities 
sited near rail lines comply with the same regulations as every 
other facility of this type, and that is why I introduced the 
bill H.R. 4821, legislation that was originally championed by 
our two State Senators. It simply amends the law to say that 
solid waste management and processing are excluded from the 
jurisdiction of the STB. This will do nothing to impede 
interstate freight rail service but will ensure that solid 
waste facilities next to rail lines fall under the same 
regulations as every other waste facility.
    Again, I hope that we can pass legislation like this, and I 
appreciate your comments and the Committee's attention. Thank 
you.
    Mr. LaTourette. Congressman Pallone, thank you very much 
for coming and sharing your thoughts with us as well. Unless 
somebody has a question for the Congressman, you go with our 
thanks. Thank you very much.
    At this time, it is my pleasure to call up our next panel. 
We are joined by the Honorable W. Douglas Buttrey, who is the 
Chairman of the Surface Transportation Board, and he will be 
accompanied this morning by Evelyn Kitay, who is the Associate 
General Counsel of the Surface Transportation Board.
    Chairman Buttrey, thank you very much for coming to share 
your thoughts with us this morning. Your entire statement will 
be made part of the record, and we look forward to hearing from 
you. Thank you for coming, sir.

   TESTIMONY OF THE HONORABLE W. DOUGLAS BUTTREY, CHAIRMAN, 
  SURFACE TRANSPORTATION BOARD, ACCOMPANIED BY: EVELYN KITAY, 
   ASSOCIATE GENERAL COUNSEL, SURFACE TRANSPORTATION BOARD; 
  WILLIAM S. HAINES, JR., DEPUTY DIRECTOR, BURLINGTON COUNTY 
BOARD OF CHOSEN FREEHOLDERS; TESTIMONY OF KATHY CHASEY, MAYOR, 
                  MULLICA TOWNSHIP, NEW JERSEY

    Mr. Buttrey. Thank you, Mr. Chairman, and good morning. My 
name is Douglas Buttrey. I am the Chairman of the Surface 
Transportation Board. I appreciate the opportunity to testify 
before you today about Federal preemption for rail-related 
facilities, and I appreciate the fact that you are going to 
enter my entire testimony--this will be a summary--in the 
record.
    The express Federal preemption contained in the Board's 
governing statute of 49 U.S.C. 10501(b) gives the Board 
exclusive jurisdiction over transportation by rail carriers. 
Congress has defined the term, transportation, broadly to 
include all of the related facilities and activities that are a 
part of rail transportation. The purpose of preemption is to 
prevent a patchwork of otherwise well intentioned local 
regulation from interfering with the operation of the rail 
network to serve interstate commerce.
    Both the Board and the Courts have made clear, however, 
that although the scope of the preemption is broad, there are 
limits. While a literal reading of the statute would suggest 
that it preempts all other law, neither the Board nor the 
Courts have interpreted the statute in that manner. Rather, 
where there are overlapping Federal statutes, they are to be 
harmonized with each statute given effect to the extent 
possible. This is true even for Federal statutory schemes that 
are implemented in part by the States such as the Clean Air 
Act, the Clean Water Act, and the Solid Waste Disposal Act.
    When States or localities are acting on their own, certain 
types of actions are categorically preempted regardless of the 
context or basis of the action. This includes any form of 
permitting or pre-clearance requirement such as building, 
zoning, and environmental and land use permitting, which could 
be used to deny or defeat a railroad's ability to conduct its 
rail operations or to proceed with activities that the Board 
has authorized. Also, States or localities cannot regulate 
matters directly regulated by the Board such as rates or 
service or the construction operation and abandonment of rail 
lines.
    Otherwise, whether preemption applies depends on whether 
the particular action would have the effect of preventing or 
unreasonably interfering with rail transportation. Types of 
State and local measures that have been found to be 
permissible, even in cases that qualify for preemption, include 
requirements that railroads share their plans with the 
community when they are undertaking an activity for which a 
non-railroad entity would require a permit, or that railroads 
comply with local electrical, fire, and plumbing codes.
    In cases involving facilities that require a license from 
the Board, an environmental review under NEPA, the Board 
addresses both the transportation-related issues and any 
environmental issues that are raised.
    Even where no license is needed from the Board, there are 
several avenues of recourse for interested parties, 
communities, or State and local authorities concerned that 
preemption is being wrongly claimed to shield activities which 
do not qualify. Any interested party can ask the Board to issue 
a declaratory order addressing whether particular operations 
constitute rail transportation conducted by a rail carrier.
    Alternatively, parties are free to go directly to Court. It 
is worth noting that the Board and the Courts have never 
reached different conclusions regarding the availability of 
preemption for particular activities and operations. Finally, 
in some cases, environmental and safety concerns have been 
successfully resolved through consensual means by the railroad 
and the community working together to address their respective 
interests.
    Given the strength and breadth of the preemption, the 
potential for misuse is a definite concern. Cases involving 
solid waste transfer, storage, and/or processing facilities 
proposed to be located along rail lines are especially 
controversial and often raise concerns that the operations 
could cause environmental harm. In every case, however, 
interested parties, communities, and State and local 
authorities concerned about a proposal have recourse to the 
Board or to the Courts.
    The inquiry into whether and to what extent preemption 
applies in a particular situation is naturally a fact-bound 
question. There have been only a few cases that have come 
before the Board involving solid waste facilities. The Board 
and the Courts will continue to explore where the boundary may 
lie between traditional solid waste activities and what is 
properly considered to be part of rail transportation and what 
kinds of State and local actions are federally preempted in the 
individual cases that arise.
    In conclusion, it is important to reiterate that both the 
Board and the Courts have interpreted the preemption statute 
broadly. There are limits on the preemption which is harmonized 
with other Federal laws. The question of what constitutes 
transportation by rail, according to the statute and precedent 
addressing the rights of railroads and of State and local 
authorities, is still being fleshed out by the Board and the 
Courts in individual cases. However, it is clear that not all 
activities are entitled to preemption simply because the 
activities take place at a facility on rail-owned property.
    Of course, cases involving preemption for railroad 
facilities are likely to remain controversial. But even in 
cases that do not require review and approval by the Board, 
parties concerned that preemption is being misused in a case 
involving a facility have ways to raise their concerns at the 
Board or in the Courts.
    I appreciate the opportunity to discuss these issues with 
you today, and I will be happy to answer any questions that you 
may have.
    Mr. LaTourette. Chairman Buttrey, thank you very much for 
coming here today and thank you also for your very concise 
statement. I think from the earlier panel with Senator Menendez 
and Congressman Pallone, and I know we are going to hear from 
some of our other colleagues, and in the opening statements of 
Mrs. Kelly and Mr. LoBiondo, you get what the problem is as far 
as these folks are concerned.
    I just want to talk to you a little bit about the avenues. 
You said several avenues of recourse. If a community determines 
that they want to challenge some activity of one of these folks 
that are claiming preemption, it is my understanding that if 
they go to Court, the Court may but doesn't have to refer or 
ask the STB for a declaratory or an expert opinion. Is it your 
experience and is it the Board's experience that this is being 
done on a consistent basis so that we have a consistent body of 
case law?
    I think I heard you say that there has never been a 
disagreement between what the STB has ruled and what the Courts 
have ruled. Does that continue to be the case?
    Mr. Buttrey. That continues to be the case, Mr. Chairman.
    Mr. LaTourette. You pointed to Section 10501(b) and 
indicated that does not displace all other Federal and State 
law. The question that I think I have is in that instance, do 
you think that the communities that are currently having these 
difficulties are aware of the distinction between preemption 
for economic regulation on the one hand and the fact that they 
retain jurisdiction, for instance, with police powers on the 
other? If not, what, if anything, is the STB doing to increase 
the awareness of these communities to that fact?
    Mr. Buttrey. Mr. Chairman, I think there is considerable 
confusion around the Country about what these rules are and are 
not. I heard this morning from the Senator's and the former 
Congressman's testimony that would indicate that is still the 
case. So I think this confusion is there. I am not sure exactly 
what the Board could do. I think these hearings that you are 
having today will illuminate this issue to a great extent and 
bring it to the fore, which I think is important.
    I heard both the Senator and the former Congressman talk 
about the fact that statements have been made to local 
communities about the fact that if they couldn't get their 
facility one way, they would try to get it another by using the 
railroad preemption. I think there is some misrepresentation 
there. I can't help but believe that it is intentional 
misrepresentation, and people have been misled about what the 
law is and is not. The line of Board precedent on this is very 
consistent. The line of Court decisions affirming those 
precedents is very consistent.
    The Congress, I think, put preemption in place for a very 
good reason, and I think they expect the Board and I think they 
expect the Courts, in relating to what the Board decisions are, 
to build on the foundation that they have laid with this 
preemption issue in the statute.
    I would have to say I think we have done a fairly good job 
of building on the foundation that the Congress made for us to 
the extent that people have said or groups or interests have 
said that we have done a good job. At least the Courts have 
agreed with us so far, and I would hope that in the future, 
when we make decisions in this area, that they would be sound 
decisions in keeping with the statute and the intention of the 
preemption law and that we would continue to have the 
affirmation of the Courts as we go forward.
    Mr. LaTourette. Let me ask you just a procedural question. 
If a community were to file a claim relative to the facilities 
preemption, does the Board conduct a live hearing or do you do 
everything based upon written pleadings and briefs?
    Mr. Buttrey. Generally, they are based on, they are 
obviously based on written pleadings in that we function very 
much like a special Court for railroads and shippers over at 
the STB. Generally speaking, the record is brought forth from a 
complaining party, whoever that party may be, and the decision 
is rendered based on a written evidentiary record. We normally 
do not have oral arguments or hearings on these issues. They 
are usually done by written pleadings.
    And I would add this, too, that these matters are given 
expedited treatment. They are acted on quickly. As long as I am 
there, Mr. Chairman, they will continue to be acted on quickly.
    Mr. LaTourette. I appreciate that very much.
    My last question is, and you correctly point out that the 
statute indicates that in order to be subject to one of these 
preemptions, it has to be a rail carrier providing rail 
transportation. Does the Board ever take into consideration 
whether or not the party involved, the company involved is 
paying, for instance, into the railroad retirement system? Do 
you ever confer with the Railroad Retirement Board to determine 
whether or not we actually have a railroad here or we have 
something else?
    Mr. Buttrey. I am not aware of that. I may refer to Ms. 
Kitay here to see if she could clarify that, but I am not aware 
of any case, maybe she is, where that has been the case. That 
would not, to me anyway, initially anyway just on first blush, 
sound like something that we would do, but Evelyn may know of 
another case.
    Ms. Kitay. I don't think we have ever looked into the 
railroad retirement situation, but there is Board and Court 
precedent looking very carefully at whether the entity that 
holds itself out as a rail carrier really is a rail carrier, 
and we have found that somebody just having the name, railroad, 
is not enough, for example.
    Mr. LaTourette. As we approach sort of the 10 year 
anniversary of this thing, you have heard what the issue is. 
You know what it is, the concerns among our members today. Is 
there any suggestion as to a tweak of the statute that we need 
to do that would clear this up a little bit so that we don't 
have the confusion that you talk about?
    Mr. Buttrey. Mr. Chairman, when this issue came up, I think 
for the very first time to my knowledge anyway was last year, 
we didn't take a position on the legislation last year. We have 
not taken a formal position this year about any amendments to 
the law. What I would say is I think the gist of my testimony 
today and both the verbal testimony and the written testimony 
would indicate that the system we have in place now seems to be 
working pretty well. That is not to say, however, that there 
aren't people out there, interests out there in the Country who 
are very eager to take advantage of what they perceive to be a 
loophole in the law.
    I will tell you this: We take our environmental 
responsibilities at the Board very seriously, and as I said 
before, as long as I am there, we will continue to do that, and 
I can assure you of that.
    Mr. LaTourette. I thank you. I thank you very much.
    Mr. Barrow?
    Mr. Barrow. Thank you very much, Mr. Chairman.
    At the outset as a housekeeping matter, I believe that any 
statements or remarks of Congresswoman Corrine Brown might have 
been covered by the unanimous consent.
    Mr. LaTourette. It was, but we will make double sure.
    Mr. Barrow. Good, and I also want to ask unanimous consent 
that we allow Congressman Maurice Hinchey and the statement of 
the National Solid Waste Management Association to be added to 
the record of these proceedings as well.
    Mr. LaTourette. Without objection.
    Mr. Barrow. Thank you, sir.
    Mr. Chairman, just at the outset, I want to clarify 
something that the Chairman asked you a minute ago about this. 
He asked a question about procedure, and I want to make sure we 
are at a point of agreement because you said earlier that the 
findings and the conclusions of the Courts are in remarkable 
agreement with the findings and conclusions of the Board on the 
matter of the substantive scope of preemption in this area.
    But I also heard him ask a slightly different question that 
gets at the procedural morass that folks can find themselves 
in. I heard him to ask whether or not the Courts consistently 
refer these matters to the Board, or whether or not the Courts 
sometimes decide these issues for themselves or sometimes refer 
these issues to the Board. As a matter of practice, do the 
Courts consistently refer these matters to the Board, or do 
they sometimes decide these matters themselves?
    Mr. Buttrey. My experience, and I would stand corrected by 
my counsel here, but my recollection of all the case law on the 
matter that I have reviewed, and I have tried to diligently 
review it all, the Courts have occasionally sought the Board's 
review of this issue and sometimes they do not. Sometimes they 
simply look at the case law and look at the Board's precedents 
and rule themselves without coming to the Board.
    But we have a procedure at the Board called a declaratory 
order that is a procedure that is very useful in this 
particular type of case where the party, aggrieved party or 
interested party, could file for a declaratory order similar to 
an application for declaratory judgment in a regular Court.
    Mr. Barrow. Well, that is a concern of mine that I have 
because if the Court refers the matter to you or if the party 
initiates the matter with you, your practice and procedure 
becomes the practice and procedure that folks are stuck with.
    You said that these proceedings were expedited. If you say 
they are conducted normally, in fact in every instance you 
describe, on a written record which has to be prepared and 
produced, that requires time. It isn't as quick, for example, 
as a TRO in a Federal Court. If the Federal Court has some 
question about preemption and then refer it to you, they are 
stuck with a process that doesn't allow you to go in front of a 
Court in five days or to get a TRO. You are stuck with the 
proceedings.
    So how expedited is that actually? How quickly? What is the 
fastest turnaround time someone has in getting a declaratory 
judgment, if you will, from you, that something is not 
preempted from the time it is first initiated with you, either 
by a Court referring it to you or by someone taking it to you 
in the first instance?
    Mr. Barrow. I would have to refer to my counsel on that 
because she is our chief litigator in these matters and would 
have a better answer for that time frame involved.
    Mr. Barrow. Does anybody know what the quickest turnaround 
time has been?
    Ms. Kitay. In the Croton-on-Hudson case, we issued a stay 
very quickly. I can't remember how many days it was, but I 
don't think that that has been a problem really, although it 
could be a potential problem. I think that in several other 
instances, including the Pinelands case if I am not mistaken, 
the Court issued a stay very quickly.
    Mr. Barrow. Was the stay given effect?
    Ms. Kitay. Yes.
    Mr. Barrow. Was there a right of appeal from someone? What 
right of appeal do they have if someone issues a stay, the stay 
before the Board?
    Ms. Kitay. Well, if there is a stay before the Board, I 
believe that on the Croton-on-Hudson case it was a temporary 
stay pending further pleadings, and then we issued a subsequent 
decision disallowing use of the expedited class exemption 
procedure in that case. I think the first decision was issued 
in August, and the second decision in November.
    Mr. Barrow. Has there been any instance in your knowledge, 
your recollection, in which someone has asked for a stay, and a 
stay wasn't in effect throughout the entire time that the party 
was asking for the stay?
    Ms. Kitay. I am not aware of any situation like that.
    Mr. Barrow. If the Board issues a declaratory judgment in 
favor of the parties opposing the operation of the facility, 
can that be appealed, and if so, to whom?
    Ms. Kitay. Yes, you go to the Courts of Appeal to appeal 
those.
    Mr. Barrow. Right, and what happens with the stay then? It 
is up to the Court. Then you have two bodies deciding whether 
or not there will be a stay. You have the Board level, and then 
that can be challenged. The separate unit, the case within a 
case, the lawsuit with a lawsuit that develops, though, is 
whether or not the stay remains in effect while someone is 
arguing about the scope of preemption.
    Ms. Kitay. Well, the only case that we have ever stayed or 
been asked to stay is the Croton-on-Hudson case. So we haven't 
had that much experience, but I don't think these cases have 
languished for years. I think, in fact, there has been recourse 
either at the Board or in the Courts in every instance.
    Mr. Barrow. Well, Mr. Chairman, I don't want to trespass on 
the other members' time, but I will ask one last question.
    If there is remarkable agreement between the Board and the 
Courts with respect to the specific subject matter of waste 
transfer facilities not be covered by the scope of preemption, 
why would anyone object to making that clear and putting it in 
legislation that will expedite this process and send a clear 
signal to the operators they are not going to get away with 
this, to augment what you are finding through the case by case 
common law approach, both at the administrative level and the 
Courts, with specific legislation that says what everybody 
agrees on? Should there be a problem with that?
    Mr. Buttrey. Representative Barrow, I would answer your 
question by saying this. The preemption language in the statute 
is very broad and covers a lot of different kinds of 
activities. I think that we just have to be very cautious about 
whatever we do to make sure that the preemption, the basic 
foundation of preemption is not eroded to the extent--
    Mr. Barrow. I quite agree.
    Mr. Buttrey.--that it could be chipped away piece by piece 
until finally you have a situation where the Courts are saying, 
we really don't know what is going on here anymore.
    Mr. Barrow. Well, right now, it is a fact-specific process 
that requires some sort of adjudication, some sort of common 
law process in which the party has to fight it out and spend 
the resources to do it on a subject matter where we are all in 
agreement. This is an area that we might not want to recache 
the formula in coming up with a general proposition that covers 
all cases that generates a new level of uncertainty around its 
perimeter.
    But if we can all agree that solid waste transfer 
facilities operated by folks who aren't railroads on their 
property should not be covered, why not just put that in there?
    Mr. Buttrey. If that is what the Congress chooses to do, 
that is what the Congress chooses to do.
    Mr. Barrow. It is an administrative problem.
    Mr. Buttrey. We would abide by the law whatever the law is. 
We are going to follow the statute.
    Mr. Barrow. Thank you.
    Mrs. Kelly. If the gentleman would yield?
    Mr. Barrow. Yes, ma'am. I don't have any time to yield, but 
I will be happy to.
    Mrs. Kelly. With regard to the Croton decision which was in 
my District, the problem is not the decision itself. The 
problem is that, once a decision is rendered, then the company 
will sell to another company and the local entities then have 
to go through the process again. It becomes a chain reaction.
    Mr. LaTourette. Well, I thank the gentleman, unless you 
have an observation to make on that.
    Mr. Barrow. No, thank you.
    Mr. LaTourette. It is my pleasure now to yield five minutes 
to Mrs. Kelly.
    Mrs. Kelly. Thank you. I appreciate your yielding to me.
    The problem is exactly as I described it. In the Croton 
decision, the local entity, Croton-on-Hudson had tried 
repeatedly through the Courts in every way possible to stop a 
very messy situation. We finally got the decision, and it was 
rendered very quickly, much to our astonishment and grateful 
astonishment I might say.
    That decision, though, caused the company--it was Northeast 
Interchange Railway, LLC--the Northeast Interchange Railway 
went for sale. Another entity then will step in, buy it, and 
then the local people have to go through the process again and 
the Board has to go through the process again. Somewhere we 
need to change. We need to break that chain.
    I yield back the balance of my time.
    Mr. LaTourette. Does the gentlelady want to ask any 
questions?
    Mrs. Kelly. I would be delighted to ask a question about 
that to Chairman Buttrey about that particular case. That was a 
class exemption. It was a standing administrative suspension of 
an active STB regulation. It allowed a very truncated and short 
notice process for a person claiming rail carrier status to do 
whatever they wanted to do. In this Northeast Interchange 
Railway case, the STB decided to withdraw the class exemption 
status of the transaction and require a full-blown normal 
application but only after the local communities took up the 
burden of challenging the original class exemption.
    So my question is basically this: Has the STB considered 
cutting back the scope of these class exemptions in order to 
allow a better look for the first time around of the proposed 
railroad action? And second, isn't it true that Association of 
American Railroads just recently filed a petition with the STB 
to reduce the scope of these class exemptions?
    Mr. Buttrey. Representative Kelly, you have touched on a 
hot point for me. Since coming to the Board about two years 
ago, there are some due process issues that I think need to be 
addressed, and this is one of them. I think your case awakened, 
if you will, an interest in both Board members, both myself and 
Vice Chairman Mulvey, as a due process issue that needs to be 
addressed.
    We have instituted or we are in the process now of 
instituting a rulemaking proceeding to change that process, so 
the people in the local communities have more of an 
opportunity, if you will, to be aware of what is going on 
before it might be, but it is really not too late necessarily 
because they would always have recourse to the Courts or the 
Board to reverse a class exemption. But our effort is to make 
the process more transparent, if you will, so that parties 
would have notice of these things longer so they could have 
time to respond before these things go into effect.
    That is an ongoing process that we are involved in right 
now which goes to the very heart of your question. What are we 
doing to make sure these things don't go into effect before it 
is so-called too late because it is not really too late, but it 
is always hard to undo something after it is already done than 
it is prevent it from happening in the first place. So that is 
what we are trying to do.
    Mrs. Kelly. Chairman Buttrey, would it help you if we were 
able to put some legislative fix in there? Would that be 
helpful?
    Mr. Buttrey. We are actually doing it at the regulatory 
level through the rulemaking process. It doesn't even require 
legislation. It is difficult to get legislation passed from 
time to time, depending on what it is, and we intend to deal 
with this through the rulemaking procedure under the 
Administrative Procedure Act.
    Mrs. Kelly. I assume you are working with our Chairman.
    Mr. Buttrey. Yes.
    Mrs. Kelly. Thank you very much. I yield back. Thank you, 
Mr. Chairman, for letting me participate.
    Mr. LaTourette. I thank the gentlelady.
    Mr. Cummings?
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Tell me something. How do these things get established? In 
other words, do they have to come to you at all before they can 
just set these things up wherever they get ready to?
    Mr. Buttrey. Generally speaking, we would not get involved 
in it unless a complaint was filed with us about some activity 
where a claim was being made that they were operating under the 
creation of the Act. A complaint would be filed either by a 
local community or by an individual. It can be filed by 
anybody. It can be filed by a neighbor to this facility.
    To use the example that was here just a few minutes ago, 
the manager of a McDonald's, the McDonald's Corporation, if he 
is upset about it, he can file with the Board for a declaratory 
order, saying: Is this activity preempted or not? We would have 
to rule on that.
    Mr. Cummings. So when the issue comes to you a little bit 
earlier you were talking about the stages. Is the issue 
normally whether this is a rail operation? Is that usually what 
it is all about? Do you follow me?
    In other words, it sounds like that is what the issue would 
almost have to come down to be. Is that normally the issue?
    Mr. Buttrey. There is a threshold question that needs to be 
answered. That is: Is this rail transportation by a rail 
carrier? Is this activity part of rail transportation, or is it 
not?
    Mr. Cummings. When these facilities are established and 
they are not getting any authority from the Federal Government, 
then I guess it is a natural conclusion, a reasonable 
conclusion that they are getting it from State and local.
    Mr. Buttrey. That would be the conclusion because the State 
are administering the Clean Water Act, the Solid Waste Disposal 
Act, and the Clean Air Act.
    Mr. Cummings. Then after they establish these things and 
they are exempt, the problem is the State doesn't have too much 
authority, is that right?
    Mr. Buttrey. Well, if the issue is presented to us and we 
rule that they are not preempted, then the State would be able 
to shut them virtually, I would think, immediately.
    Mr. Cummings. That is what I meant to say.
    Mr. Buttrey. Right, right.
    Mr. Cummings. Do you inspect these facilities for any 
reason?
    Mr. Buttrey. I am sorry. I didn't catch that.
    Mr. Cummings. Do you inspect them?
    Mr. Buttrey. No, we do not inspect them. We do not have any 
inspection personnel. We do not have any inspection authority. 
We would make a determination of whether it is preempted or not 
based on a written record that is before us, very much like a 
Court would do.
    Mr. Cummings. That is about it? I mean that is about 
basically what you do?
    Mr. Buttrey. That is correct.
    Ms. Kitay. Can I just say something?
    Mr. Cummings. I would love to hear it.
    Ms. Kitay. If the proceeding requires a license from the 
Board, in other words, if it is a rail, if it is part of a 
proposal to construct new line or possibly to acquire and 
operate new line, then they need a license from the Board. If 
the facility is part of that proposal, it would be considered. 
In any case like that, the Board would look at both the 
transportation aspects and the environmental aspects and 
generally would conduct an environmental review under the 
National Environmental Policy Act. As part of that review, any 
communities could come in or any interested parties concerned 
about the facility could come in, and the Board would address 
those issues as part of its environmental review. Then the 
Board typically would impose conditions on any grant of 
authority. That is true for cases that require a license.
    In cases that do not require a license, then we do exactly 
what Chairman Buttrey said. We get involved either if requested 
by a Court to address preemption issues or if somebody files a 
request for a declaratory order at the Board. Then we look at 
whether this is actually rail transportation by a rail carrier. 
But even if it constitutes rail transportation by a rail 
carrier and qualifies for preemption, the Board and the Courts 
have made it clear that Federal environmental laws continue to 
apply and that some State and local regulation also continue to 
apply as part of police powers that the States retain. So there 
is not total preemption, regardless of the circumstances.
    Mr. Cummings. And are those companies, many of them, I 
guess they are saying to the State: You don't have but so much 
authority over me. Is that usually the issue?
    Ms. Kitay. That is sometimes the issue. Now, New Jersey, 
for example, has passed regulations, I believe, that 
accommodate ICCTA and do not incorporate zoning and permitting 
but do retain a lot of other regulation that continues to apply 
to solid waste facilities in that State. If there are disputes 
about what is or is not preemptive, that is where the 
declaratory order or the availability of going to Court for 
relief applies.
    Mr. Cummings. Last question: When we have a situation where 
like New Jersey, what they have done, is that something that 
would be or have you found that is helpful to the New Jersey 
communities as something that perhaps other States need to be 
doing?
    Ms. Kitay. To pass regulations?
    Mr. Cummings. Yes, yes, the ones New Jersey has done.
    Ms. Kitay. I am surprised that other States haven't passed 
regulations, but nobody has ever come in, and we don't have any 
kind of a record. I don't know.
    Mr. Cummings. I understand. Thank you, Mr. Chairman.
    Mr. LaTourette. I thank the gentleman.
    Mr. LoBiondo?
    Mr. LoBiondo. Thank you. Thank you, Mr. Chairman.
    Chairman Buttrey, what if the railroad leases the waste 
facility, waste transfer facility from an entity that is not a 
railroad, would that arrangement meet the definition of rail 
carrier and qualify the facility for preemption?
    Mr. Buttrey. Well, as I said before, each one of these 
situations is different in terms of the facts. We would have to 
look at the facts of each case to see what was really going on 
here, and it would certainly depend on the complainant, whoever 
that complainant would be to make that case to us.
    But the statement that we have made all along here this 
morning is that if someone believes that they are going to be 
able to escape an environmental review on facilities like this, 
I think they are going to be really surprised.
    There have been significant misrepresentations made, it 
appears to me, based on what I have heard this morning with 
some of these companies about what their rights are and are 
not. I think when those representations have been made, if they 
have been accepted on face value by local communities, I think 
they need to go back and take a look at that and review those 
because they may be, potentially at least, allowing something 
to take place that should not take place.
    Mr. LoBiondo. I thank you. Can I just end with a brief 
comment, echoing the comments of my colleague from New York, 
Mrs. Kelly, about the fear that if one company goes ahead and 
is denied, then somebody else just follows up in their tracks. 
In the case of in my District, and I think it is probably the 
same in Mr. Saxton's District, these small communities have 
very limited resources. To be able to go through a list over 
and over again of people who are just going to step up and cost 
the taxpayers money to fight the same fight over again is a 
wrong road to go down.
    Chairman Buttrey, I thank you very much.
    Mr. LaTourette. I thank the gentleman very much. We are 
attempting to solve our audio difficulties.
    Ms. Johnson, do you have any questions?
    There being no other questions, I want to thank you very 
much, Chairman, for coming and sharing your thoughts with us 
today. It is obvious that you get the concern. I have to say 
the Chair is impressed by your stated willingness to work 
through these cases in an expeditious manner, and we look 
forward to hearing from you again. So you go with our thanks. 
Thank you very much.
    Mr. Buttrey. Thank you.
    Mr. LaTourette. I think maybe when we shut off that one 
microphone, that was the offending microphone. So maybe we can 
skip that for the remainder.
    Our next panel we are lucky to have. I would like to call 
them up. We have Mr. William S. Haines, Jr., who is the Deputy 
Director of the Burlington County Board of Chosen Freeholders. 
He is going to be accompanied by our colleague, the Honorable 
Jim Saxton this morning. Also I think we have referenced 
already Ms. Kathy Chasey, who is the Mayor of Mullica Township 
in New Jersey, and she is not accompanied at the moment but I 
think will be introduced by our colleague, Congressman 
LoBiondo.
    First, Congressman Saxton, thank you very much for coming 
and thank you for your interest and asking the Subcommittee to 
have this hearing. We will yield to you to introduce your 
constituent and any other comments you want to make. Thank you 
for being here.
    Mr. Saxton. Thank you very much, Mr. Chairman and Ranking 
Member Barrow. I am here primarily to introduce my great 
friend, Burlington County Deputy Director of the Board of 
Chosen Freeholders, which incidentally are called different 
things in different States, but the Board of Chosen Freeholders 
in Burlington County, of course, is the legislative group and 
administrative group, for that matter, that runs the matters in 
Burlington County.
    Before I actually introduce him, let me just say that I 
have some written testimony which I would like to submit for 
the record.
    Mr. LaTourette. Without objection.
    Mr. Saxton. Let me just briefly say a couple of things.
    It was mentioned a little while ago that New York and New 
Jersey are here to demonstrate significant interest in this 
subject, and there is very good reason for that. As you 
probably know, New Jersey is the most densely populous State in 
the Country, and the area that Mrs. Kelly and her Republican 
and Democrat colleagues who represent the greater New York area 
have is an even more densely populated region than New Jersey. 
As a result of that, our region produces tons and tons and 
hundreds of thousands of tons of solid waste a day, and in a 
very short order, those hundreds of thousands of tons turn into 
mountains of solid waste.
    Over the years, this has been a huge problem for us 
contrasted to the disposal of solid waste in a State like 
Wyoming where our good friend, Barbara Cubin, hails from, where 
her entire state has a population of something under 500,000, 
which is 250,000 less than my District. And so, we have a 
unique situation in which I would make the case that a one size 
fits all preemption policy is really wrong-headed for the 
Country.
    Because of that, the State of New Jersey--and I am sure the 
State of New York as well, particularly the City of New York 
which has such problems in this area--the State of New Jersey 
in the late 1970s passed a law called the Solid Waste 
Management Act for the Sate of New Jersey. I say this to frame 
the situation so that my friend Bill Haines' comments and 
testimony will be put into this context.
    In 1977 or 1978, I can't remember which, I was in the State 
Legislature, and we passed the Act, and we recognized that not 
only did New Jersey have a unique situation but each county had 
a unique situation. Some counties were more densely populated 
than others. Other counties had good ways of managing solid 
waste in place already. So the Solid Waste Management Act 
passed during the 1970s gave each county the responsibility and 
the duty to put in place a system to take care of their solid 
waste.
    In the case of Burlington County, we invested in our county 
$200 million to put that system in place, and in order to 
recoup a return on that investment, we now have to process 
solid waste. We do it in many wastes. Some of it is landfilled. 
Some of it is recycled. The methane gas from that which is 
landfilled is used to heat hot houses, to grow vegetables.
    We have a good system. Aside from the fear of the 
environmental damage that would come from an unregulated solid 
waste facility carried out under the preemption law by the 
railroads, the citizens of our county could be put to a great 
disadvantage if we don't have the solid waste to process 
through our $200 million investment. This becomes a very real 
problem for a number of reasons for communities in the 
northeastern region that we represent.
    With that, I would like to turn for more specific 
discussion of this situation to my friend, Freeholder Bill 
Haines, who is the Deputy Director of the Burlington County 
Board of Chosen Freeholders. Bill presides over the county's 
Resource Conservation Department set up under the State Act and 
has been the key in crafting our solid waste management plans 
for more than a decade. He has been instrumental in creating 
and implementing the hugely successful Resource Recovery 
Complex in Burlington County, the $200 million investment. 
Overseeing the Division of Solid Waste Management has given 
Freeholder Haines firsthand knowledge of the Federal preemption 
problem that we face today in Burlington County.
    Mr. LaTourette. Congressman Saxton, I want to thank you 
very much not only for your interest but your excellent 
remarks, and thank you for bringing Mr. Haines to us. Just 
before we hear from Mr. Haines, I am glad you brought up this 
Freeholder business. I got a letter from Congressman 
Frelinghuysen, and he said that Freeholder Smith wanted me to 
do something, and I didn't know what the hell he was talking 
about. So I am glad you brought that to light.
    Mr. Haines, thank you very much for being with us, and we 
look forward to hearing from you.
    Mr. Haines. Thank you, Mr. Chairman and members of the 
Committee for providing me the opportunity for me to provide 
this comment this morning. Thank you, Congressman Saxton, for 
inviting me to here today and for putting the situation in 
Burlington County into context.
    I appear before you today on behalf of the entire 
Burlington County Board of Chosen Freeholders in support of 
H.R. 4930 sponsored by Congressman Saxton. We are a five-member 
board which is charged with the administration of county 
government, and all Freeholders are elected at large. 
Burlington County is geographically the largest county in New 
Jersey with a population of 450,000, and we are renowned for 
our pine barrens and our other open spaces, but it is a 
situation within the population center of our county that I 
wish to address.
    Over the past several months, an entity known as Hainesport 
Industrial Railroad, LLC has been seeking to operate a waste 
transfer facility within an industrial park located in the 
municipality of Hainesport Township. It has been a matter of 
discussion, debate, and even negotiation between the railroad 
owner and local officials as to the operating parameters as 
well as to the types of waste which would be trucked into the 
industrial park, loaded onto railcars and shipped across the 
county to locations beyond New Jersey.
    This proposal has been a source of public outcry, 
particularly from residents whose homes border the industrial 
park. At the same time, we are advised that local officials in 
other municipalities through which the railcars pass are 
girding for a fight and are intent on protecting the health, 
safety, and welfare of their residents as well.
    However, hanging over all discussion, all debate, and all 
negotiation is the phrase, Federal preemption. It is the rail 
owners trump card where, as the Committee is aware, Federal law 
presently exempts rail carriers from State or local permitting 
requirements related to the processing and transporting of 
solid waste. Hainesport Industrial Railroad received its 
verified notice of exemption from the Federal Surface 
Transportation Board on May 10th, 2005.
    From our position as county officials and from the 
viewpoint of elected officials in our local communities, this 
type of exemption and the Federal preemption that flows from it 
flies in the face of what we have come to regard as home rule. 
It guts local governments' abilities to fulfill their 
obligations to protect the health, safety, and welfare of their 
residents. The siting of any type of waste facility should not 
be taken lightly. The very nuisance and health issues related 
to odors, dust, traffic, and noise invites scrutiny and demand 
that State regulations, county requirements, and local 
ordinances be followed.
    Our position is that no aspect of what we know as the 
regular solid waste, zoning, and other recognized permitted 
processes should be waived. Mr. Chairman, as a result of recent 
experiences involving another waste facility, I cannot 
underscore enough the importance of these permitting processes.
    Presently, the Freeholder Board is engaged in a two-year 
legal and administrative battle in concert with the State of 
New Jersey to shut down another waste operation in our county. 
This composting operation was granted a State permit, yet 
obnoxious odors and other environmental complaints have 
resulted in dozens of violations and hundreds of thousands of 
dollars in fines.
    Ironically, unlike the Hainesport facility, this other 
operation is located in a rural community, but the odor 
complaints have come in on a regular basis from residents 
across the northern part of the county. The State is 
methodically following legal procedures for lifting the permit 
and closing this facility while the residents continue to 
suffer.
    I only mention this because, again, it underscores the 
importance of waste facilities meeting every standard of law 
that protects the public, including the right of State and 
local governments to impose their statutes and ordinances. This 
example also points out that even when appropriate permitting 
processes are followed, facilities can go bad, and addressing 
the problems are not simple.
    While the actual siting of any commercial operation falls 
largely on local government in New Jersey, when it comes to 
waste facilities, the county is also engaged. Under State law, 
all proposed waste facilities and even proposed changes in 
operation and types of waste accepted must be reviewed at the 
county level. This review culminates in a public hearing before 
a Solid Waste Advisory Committee.
    This advisory board hears testimony from the public and all 
interested parties, weighs those comments and the evidence 
provided, and makes a recommendation to the state as to whether 
the proposed facility or change of operation should be granted. 
The advisory committee was originally created under State law 
with an eye toward ensuring that counties have jurisdiction 
over their own solid waste plans. It was the State's 
sanctioning of the very home rule that we seek to protect 
today. Because of existing Federal law, not even this county 
advisory board is afforded the opportunity to review the 
situation in Hainesport.
    All of this considered, this brings me back to the proposal 
of the Hainesport Industrial Railroad. I would be less than 
candid if I did not represent to you that the primary operative 
for the Hainesport Industrial Railroad is a respected 
businessman. He has made representations that his waste 
facility will comply with State environmental law.
    But the bottom line is that late last week, Hainesport 
Township officials found themselves in a situation, because of 
the Federal preemption, that they were under pressure to make a 
deal. They had no hammer, no ordinance, no regulation to match 
against Hainesport Industrial Railroad. Facing what it foresaw 
as a difficult legal battle, Hainesport Township entered into 
an agreement with the railroad purportedly limiting its 
operation to construction and demolition waste. How well that 
agreement will stand the test of time is already an item of 
public debate, and the specter of the facility handling regular 
solid waste, garbage, at some time in the future, or hazardous 
or medical waste or other types of waste still generates grave 
concern.
    I know that Burlington County is not alone, that other 
jurisdictions have faced similar dilemmas. It is a legitimate 
problem that H.R. 4930 addresses, and w are grateful to 
Congressman Saxton for introducing the legislation. Thank you 
very much.
    Mr. LaTourette. I thank you very much, Mr. Haines.
    The floor has just notified us that we have a series of 
votes, but I think before we break to vote, I want to 
introduce, take a minute to let Congressman LoBiondo introduce 
Mayor Chasey who is here from Mullica Township. Mayor, we would 
like to hear your five-minute testimony after Congressman 
LoBiondo introduces you to us.
    Mr. LoBiondo. Thank you, Mr. Chairman.
    I am very pleased that Mayor Chasey has taken the trip to 
be with us today. Mullica is a small township experiencing the 
same situation that Burlington County did. The mayor has been 
living through a horror story on this. Mayor, thank you for 
being here.
    Mr. LaTourette. Thank you very much, Congressman LoBiondo. 
Mayor, if you would turn on the switch on your microphone, we 
are anxious to hear from you. Thank you for coming.
    Ms. Chasey. I wish to thank Chairman LaTourette and this 
Subcommittee for allowing this hearing to examine the extent 
and scope of the abuse by companies using the loophole in the 
Federal law to operate unregulated waste facilities.
    I am here today to share some of the personal experience 
that we faced in Mullica Township when we discovered there was 
a plan to construct one of these exempt waste sites. We have, 
running through our town, 10 miles of east-west railroad track 
with a LICA siding but no train stop. The track is owned by New 
Jersey transit, a passenger line with a company by the name of 
JP Rail that leases the trackage rights through there. This 
company was planning on building 1,000 feet of track on the 
property, but because there is an existing siding at this site, 
the railroad did not have to apply to the STB to expand their 
operation.
    Being a member of the Atlantic County Solid Waste Advisory 
Committee, I am familiar with the procedure the owner of a 
solid waste company must follow in order to start up or expand 
their operation including the involvement of a DEP, the local 
towns, and the County Freeholder Board. In Mullica's case, the 
starting point and added layer of the Pinelands regulation 
would be an integral part of the procedure. When we were first 
made aware of the transrail transfer station proposal, I felt 
safe in my knowledge of the procedures in place.
    It was only then did I find out that there exists 
federally-exempt solid waste operations whose only criteria 
that need to be met is that they are located next to or near a 
set of railroad tracks, an operation that is proposing to move 
hundreds of tons of trash a day and night that does not have to 
apply to any entity for anything, no applications, no public 
involvement, no limits in regards to the number of trucks, 
tonnage, or materials including possibly hazardous waste. These 
are seven days a week, 356 days a year operations running 24 
hours a day without the obligations to the Districts they 
reside in that the normal and accepted permitting process would 
afford their neighbors.
    As I learned about these sites and the laws that govern 
them, I quickly realized that this is not a local issue but a 
national one. If it could happen in my town, it can and does 
occur anywhere.
    The proposed site in Mullica is a 30-acre parcel in a 
residential zone. It is less than a quarter of a mile from our 
800-student K through eighth grade. There are 500 homes within 
a half of a mile of the site with dozens of homes directly 
surrounding it, that being the most condensed area of our town. 
There are also five residential facilities within a half-mile 
that house approximately 75 handicapped occupants, many of whom 
walk or wheelchair throughout the area.
    In Mullica's case, the railroad company was to lease the 
property for a dollar per year from the owner. The owner, not 
so ironically, is a notorious South Jersey waste hauler. This 
waste hauler has managed over the past four and a half years to 
build up over a million dollars in unpaid penalties and fines 
assessed by the DEP, the county health department, and the 
neighboring town where his trash business was operating. He 
pled guilty to two counts of illegal dumping in Mullica and has 
a $184,000 outstanding balance on a $199,000 fine.
    According to DEP documents, he has frequently failed to 
comply with the conditions of his solid waste permit. The DEP 
finally denied his permit upon renewal application, terminated 
his existing permit and revoked his authority to operate his 
solid waste facility in 2005. This, however, will not take away 
his ability to run a rail-related solid waste operation. This 
is the same individual that the railroad company contracted to 
run their businesses in Mullica under two newly formed 
companies called Elwood Brokerage and Elwood Transloading, LLC.
    Mullica's journey through the process of fighting our 
proposed transrail transfer station was different than any 
other towns up to that point. We were very lucky. Because we 
are 100 percent Pinelands, we have the full weight of the 
Commission along with the State's Attorney General's Office to 
deal with the legal strategy.
    Federal Judge Simandle's December 23rd, 2005, decision to 
keep the injunction that the Pinelands filed for in position 
until such a time the railroad decides to continue the lawsuit 
to operate or drop the development of our site has saved us 
untold misery. Although we are more fortunate than our non-
Pinelands neighbors, our relief will never be more than 
temporary as long as the exemption stands in the law.
    Our fortune to date has not come without great emotional 
drain on myself, our governing body, and the residents of our 
town who, of course, had to bear our portion of the financial 
impact of this battle. I was personally named as a witness in 
the railroads lawsuit concerning intergovernmental plans and my 
efforts to frustrate and block their project.
    The town is seeking relief in the form of regulation where 
these exempted operations are concerned are not NIMBYS. We are 
not saying we don't want you in our town, so go to the next 
one. There are laws in place now that prevent that from 
happening with regulated sites.
    With respect to solid waste, we are asking that the laws be 
distributed fairly and without prejudice, that the solid waste 
industry as a whole be required to operate in an 
environmentally responsible manner. When it comes to a private 
industry that operates on a national level, there is only one 
practical solution. Anyone receiving and transporting solid 
waste needs to be regulated under the same set of rules. The 
number of States and towns that are grappling with this issue 
are growing daily, and the time to act is now.
    Mr. LaTourette. Mayor, thank you very much for your 
testimony.
    As I indicated, there is a series of votes on the floor, 
and so we will recess to accommodate those votes. There is at 
least two. We hope to be back here within 15 or 20 minutes, and 
at that time, we will ask the panel questions. Subject to the 
votes on the floor, the Committee stands in recess.
    [Recess.]
    Mr. LaTourette. We are going to call the Subcommittee back 
to order. I apologize for the length of time we have been gone, 
but hopefully we won't be interrupted again.
    Again, Mr. Haines and Mayor, I want to thank you for your 
testimony.
    Mr. Haines, I want to start with you. I asked Mr. Saxton, I 
said, Hainesport isn't named for your family, is it?
    Mr. Haines. Well, actually, we have been there forever and 
never had ambition enough to move on. So, yes, it is family.
    Mr. LaTourette. There you go, okay. I know you were in the 
room when Chairman Buttrey testified. The way that I understood 
his testimony is that there may be some confusion between what 
we thought we were doing with Federal preemption when it came 
to economic issues, and I thought I understood him to say that 
the ICC Termination Act doesn't preempt State and local 
environmental rules and regulations.
    I would ask you two things. Have you ever heard that 
before, and secondly, is that something that your legal counsel 
agrees with at this moment in time?
    Mr. Haines. First, no, that isn't something I had heard 
before. Our counsel, our County Solicitor and other legal 
advice we solicited has advised us that while we may pursue and 
have pursued this, in fact, we probably wouldn't prevail.
    Mr. LaTourette. Have you pursued it? Have you gone to the 
STB on the Hainesport facility?
    Mr. Haines. Yes, we have. Our county solicitor contacted 
the STB to express our concerns.
    Mr. LaTourette. Can you just describe for us--the record is 
pretty clear--what type of waste is going to be shipped from 
the Hainesport facility?
    Mr. Haines. Right now, and the agreement was just reached 
with Hainesport Township at the end of last week, Thursday I 
believe, and right now they are talking about construction and 
demolition, C and D waste, which would be the least noxious. I 
am sure that the town felt that this was the best that they 
could do, but my understanding is the agreement does not 
guarantee in perpetuity that other types of waste would not be 
used in that facility. So, if perhaps, the railroad were 
flipped to someone else, they could change the type of waste 
they could handle including garbage.
    Mr. LaTourette. Sure. Have there been any studies done to 
demonstrate how many trucks it is going to add to the community 
in terms of going in and out of the facility? Do you have any 
traffic estimates?
    Mr. Haines. No, I haven't seen any of those figures.
    Mr. LaTourette. Thank you.
    Mayor, I thought I heard you say that the tracks are owned 
by the New Jersey Transit in your situation, and they are 
leased by New Jersey for a dollar a year?
    Ms. Chasey. No, the railroad is owned by New Jersey 
Transit. JP Rail leased the trackage rights from New Jersey 
Transit from Atlantic City to Winslow. The property, the 20-
acre property involved, is owned by this trash hauler who was 
leasing the property to JP Rail for a dollar per year.
    Mr. LaTourette. So is the rail waste facility going to be 
operated by the railroad itself, or is it be subcontracted?
    Ms. Chasey. It is being subcontracted, and my understanding 
is the STB rules state that it can be run by the railroad or an 
agent thereof which allows them to hire subcontractors to run 
the operations.
    Mr. LaTourette. My question is similar to the one that I 
just asked Mr. Haines. I know you were in the room when 
Chairman Buttrey testified.
    Ms. Chasey. Yes.
    Mr. LaTourette. Is that the first time that you have heard 
that local environmental regulations still apply, and does your 
legal counsel tell you something else?
    Ms. Chasey. Yes, that is the first time I have heard that. 
I actually have a letter from Chairman Nober when he was there 
that said that, indeed, environmental rules can apply as long 
as they never interfere with the Interstate Commerce Act.
    Mr. LaTourette. Right.
    Ms. Chasey. That will always supercede.
    Mr. LaTourette. Then I think you mentioned in your case 
that there was currently an injunction in place?
    Ms. Chasey. Yes.
    Mr. LaTourette. What is the exact status of the case at 
this point?
    Ms. Chasey. Until either the Pinelands pursues the case, 
which they will not, or the railroad company pursues the case, 
the injunction does stay in place.
    Mr. LaTourette. Thank you very much. I thank both of you.
    Ms. Chasey. Thank you.
    Mr. LaTourette. Mr. Barrow?
    Mr. Barrow. Thank you, Mr. Chairman.
    Mr. Saxton, thank you for participating in this and 
bringing this issue before us.
    I just want to discuss briefly with you Chairman Buttrey's 
concerns that we have a good general proposition in the segment 
of preemption we have in the statute. We don't want to be 
carving out all kinds of exceptions because, sooner or later, 
the general proposition won't be worth very much. You 
understand, don't you, that you have a great big old wall that 
has been built up. If someone starts gnawing a little hole in 
the wall, if a rat starts gnawing a hole in the wall, and you 
have a little place where some vermin can get through, don't 
you think it makes good sense to put a cat at that hole rather 
than tear the whole wall down and try to build another wall? I 
think you can get a cat at every hole, don't you?
    Mr. Saxton. I think that is a great analogy. In this case, 
nobody at this table wants to interfere with interstate 
commerce, but everybody at this table understands what the New 
Jersey law is and the expense and effort and sometimes real 
heartburn that goes with administering the State law.
    From my point of view, and I guess I could say from our 
point of view, there are two issues here where we need some 
cats to watch. One set of issues has to do with environmental 
concerns and health concerns, and the other set of issues has 
to do with maintaining the facilities which have been very 
expensive and painful, politically painful in some cases and 
personally painful in others, to put in place.
    Mr. Barrow. It seems to me that what we have is a situation 
where right now the hole has been gnawed. The argument has been 
thought up. The argument has been raised. Right now, folks get 
to decide whether or not they want to go through the hole, and 
they don't know what they will find on the other side. Maybe 
they will find a friendly Court. Maybe they will find a 
friendly Board. Maybe they will find a hostile Court that will 
refer the matter to a Board that is equally hostile, that drags 
things out. Then you have a sham transaction. But you don't 
know what is on the other side of the hole.
    It seems to me if you can put something on the other side 
of hole, you know you are going to do a little better than what 
you have right now. Right now, it is a game that the other side 
gets to play, and a war of attrition is something the big guys 
are naturally going to do a whole lot better at winning than 
the little guys, it seems to me.
    Mr. Haines, I want to follow up on a question that Chairman 
LaTourette asked you. He asked you whether or not you had taken 
your case to the Surface Transportation Board, and you said, 
yes. What was the outcome? How did it come out?
    Mr. Haines. They have been certified that they are a rail 
operation, and they are eligible.
    Mr. Barrow. It sounds to me like they ruled against you.
    Mr. Haines. Yes.
    [The information received follows:]

        But we did not actually file a formal legal action challenging 
        the STB's findings on Hainsport Industrial Railroad per se. 
        However, Burlington County was a joint petitioner, along with 
        the National Solid Wastes Management Association, that 
        challenged the STB's federal preemption provided to another 
        facility in North Jesrsey. We felt a decision against that 
        preemption would have impacted the Hainsport case as well. 
        However, the North Jersey facility closed permanently prior to 
        the STB's consideration of the matter, and the STB therefore 
        found the matter moot and denied our request for a declaratory 
        order.

    Mr. Barrow. Are you satisfied with the outcome in that 
case?
    Mr. Haines. No. We are considering pursuing it in Court at 
this time, although it is a little cloudy now whether we want 
to, considering the fact that Hainesport Township has reached 
an agreement the railroad.
    Mr. Barrow. That leads me to another question, but Mayor, I 
want to ask you a couple follow-up questions. Do you see a 
pattern emerging here? Do you see something evolving? What is 
the pattern you see at work here?
    Ms. Chasey. Oh, the pattern I see is that these things are 
starting to crop up all over the place, and they are going to 
continue to do so.
    Mr. Barrow. In your particular case, was there any kind of 
ongoing working arrangement between the rail operator and the 
waste hauler? Did they have anything going on before this?
    Ms. Chasey. Not before this, not before the railroad 
contracted for the waste hauler to run the operation.
    Mr. Barrow. Now the railroad has a vested interested in the 
hauler being able to do what is clearly preempted, what we all 
agree should be preempted. But the Courts have decided, 
whenever they have reached the question, it ought to be 
preempted and until the case we just talked about, are in 
remarkable unanimity with the Board it is something not 
covered. It seems to me you have a situation now where the 
railroads, who clearly don't have a vested interest in the 
underlying operation, now have an interest in the deal.
    Ms. Chasey. Yes.
    Mr. Barrow. That pays them money.
    Ms. Chasey. Absolutely.
    Mr. Barrow. My grandmother taught me a long time ago that 
it is very, very difficult to persuade anybody that there is 
anything wrong until somebody puts a dollar in their pocket, 
and that is not casting aspersions on anybody. That is just the 
way things are. Is that a problem as you see it?
    Ms. Chasey. Absolutely. In the Court case, Mr. Fiorello, 
who was the attorney for the railroad, said to Judge Simandle: 
But Judge, you don't understand how much money there is to be 
made here. That is actually in the court transcript.
    Mr. Barrow. That puts me in mind of the story of the lawyer 
who was on the other side of a case once. The judge called him 
up to the stand and said: Did you try to settle this case? The 
lawyer of one side said: We have offered $5,000 to settle this 
case. The judge said: Oh, we can't settle for that. We have to 
do better than that.
    Well, listen, as a former county commissioner and former 
city councilman, I know exactly what you are up against in 
terms of dealing with a regulatory agency that claims exclusive 
right to deal with the problem, but they have so many other 
things to do, even if they give it their best effort, they 
can't take care of your case as quickly as you can and as 
quickly as you need it to be taken care of. I also know that 
your arms are too short to box with railroad and Federal 
regulatory agencies that just ain't jumping as fast as you need 
them to jump. So just know, us local government folks, we need 
to stick together.
    Ms. Chasey. Yes.
    Mr. Barrow. Thank you very much.
    Ms. Chasey. Thank you.
    Mr. LaTourette. Thank you, Mr. Barrow.
    Mr. LoBiondo?
    Mr. LoBiondo. Thank you again, Mr. Chairman.
    For the Mayor, a couple questions, could you explain the 
normal process a similar facility that would not qualify for 
the Surface Transportation Board preemptions would have to 
follow if they were to begin construction in Mullica Township? 
Can you also comment whether that process would involve review 
by the Pinelands Commission?
    Ms. Chasey. Absolutely, that would be the first place they 
have to go. Nobody begins construction on anything in a 
Pinelands town unless they get a certificate of filing from the 
Pinelands Commission. That is the first entity they need to go 
to.
    Mr. LoBiondo. If this exemption were not granted, what 
would a facility have to go through if they came to you? If 
they have to come to you, what would they have to do to build 
this transfer station?
    Ms. Chasey. Well, besides the Pinelands, if they could get 
approval from the Pinelands, a regulated entity, they would 
also have to be put in the county plan, the Atlantic County 
plan. It would have to be not necessarily approved but kind of 
okayed by the local municipality before it goes to SWAC. And 
then it goes from SWAC--
    Mr. LoBiondo. SWAC is the Solid Waste Advisory Committee?
    Ms. Chasey. The Solid Waste Advisory Committee in Atlantic 
County. Then it goes to the County Freeholder board, and it has 
to be approved by the DEP. It has to be a licensed and approved 
waste hauler.
    Mr. LoBiondo. Has this issue generated much interest in the 
township?
    Ms. Chasey. Oh, very much interest.
    Mr. LoBiondo. And is it pretty evenly weighed out, or how 
would you categorize it?
    Ms. Chasey. Overwhelming against the transfer station. 
There might be a few people that are in the business that 
wouldn't mind seeing this happen there, but they have never 
come out publicly and said so. They have only said privately.
    Mr. LoBiondo. To date, has the township had to expend any 
monies fighting this?
    Ms. Chasey. Yes, last year, we had to do an emergency 
appropriation because we had not budgeted the money for 
$50,000. In Mullica, that means two cents. We only had to spend 
$50,000 last year because the State Attorney General's Office 
took on the case because of the Pinelands Commission. Again, we 
were very lucky here. We would have spent 10 times that much.
    We hired an environmental attorney; we hired an attorney 
very familiar with the railroads, here from Washington, a Mr. 
Edward Greenberg; and our own solicitor, the time that he put 
into it.
    Mr. LoBiondo. Do you feel that there is real potential that 
this project could move forward if the Court finds that the 
regulations that govern development in the Pinelands can be 
preempted?
    Ms. Chasey. Yes.
    Mr. LoBiondo. Mr. Chairman, if I could, I want to thank the 
Mayor and Deputy Director Haines for being here, and again, Mr. 
Saxton.
    What you talked about a minute ago and what Mr. Barrow 
talked about, I think really get to the heart of the problem of 
what the intention really was to allow a railroad to enter into 
an agreement with an agent. I think what we have created here 
is a loophole that several locomotives can drive through, and I 
don't think that is right. Thank you.
    Mr. LaTourette. Thank you, Mr. LoBiondo, and I want to 
thank you for bringing the Mayor here. I want to thank 
Congressman Saxton for bringing Mr. Haines. I also want to 
thank Congressman Pallone and Senator Menendez for testifying, 
and I want to thank Mrs. Kelly also for bringing this 
attention.
    Just from the Chair's perspective, I am not opposed to 
garbage being hauled on trains. I think, as a matter of fact, 
places like Cape Cod haul most of their waste out, and they 
don't want the garbage trucks on the road, and so they take 
most of their waste out on trains. But, at least from the 
Chair's perspective, when the ICC Termination Act, railroads 
that were really railroads would have an exemption, and 
railroads that aren't railroads should still be subject to 
State and local laws, especially when it comes to permitting 
waste facilities.
    Again, I thought this was a good hearing. I want to thank 
you for bringing it to our attention. I want to thank both of 
you for traveling here from New Jersey. I now know what a 
Freeholder is, and I appreciate that.
    This hearing is adjourned, and you go with our thanks.
    [Whereupon, at 12:15 p.m., the subcommittee was adjourned.]
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