[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
            RAILROAD-OWNED SOLID WASTE TRANSLOAD FACILITIES

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

                                (110-77)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

             RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 16, 2007

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
Vice Chair                           DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon             THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois          HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of   JOHN J. DUNCAN, Jr., Tennessee
Columbia                             WAYNE T. GILCHREST, Maryland
JERROLD NADLER, New York             VERNON J. EHLERS, Michigan
CORRINE BROWN, Florida               STEVEN C. LaTOURETTE, Ohio
BOB FILNER, California               RICHARD H. BAKER, Louisiana
EDDIE BERNICE JOHNSON, Texas         FRANK A. LoBIONDO, New Jersey
GENE TAYLOR, Mississippi             JERRY MORAN, Kansas
ELIJAH E. CUMMINGS, Maryland         GARY G. MILLER, California
ELLEN O. TAUSCHER, California        ROBIN HAYES, North Carolina
LEONARD L. BOSWELL, Iowa             HENRY E. BROWN, Jr., South 
TIM HOLDEN, Pennsylvania             Carolina
BRIAN BAIRD, Washington              TIMOTHY V. JOHNSON, Illinois
RICK LARSEN, Washington              TODD RUSSELL PLATTS, Pennsylvania
MICHAEL E. CAPUANO, Massachusetts    SAM GRAVES, Missouri
JULIA CARSON, Indiana                BILL SHUSTER, Pennsylvania
TIMOTHY H. BISHOP, New York          JOHN BOOZMAN, Arkansas
MICHAEL H. MICHAUD, Maine            SHELLEY MOORE CAPITO, West 
BRIAN HIGGINS, New York              Virginia
RUSS CARNAHAN, Missouri              JIM GERLACH, Pennsylvania
JOHN T. SALAZAR, Colorado            MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California      CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois            TED POE, Texas
DORIS O. MATSUI, California          DAVID G. REICHERT, Washington
NICK LAMPSON, Texas                  CONNIE MACK, Florida
ZACHARY T. SPACE, Ohio               JOHN R. `RANDY' KUHL, Jr., New 
MAZIE K. HIRONO, Hawaii              York
BRUCE L. BRALEY, Iowa                LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania          CHARLES W. BOUSTANY, Jr., 
TIMOTHY J. WALZ, Minnesota           Louisiana
HEATH SHULER, North Carolina         JEAN SCHMIDT, Ohio
MICHAEL A. ACURI, New York           CANDICE S. MILLER, Michigan
HARRY E. MITCHELL, Arizona           THELMA D. DRAKE, Virginia
CHRISTOPHER P. CARNEY, Pennsylvania  MARY FALLIN, Oklahoma
JOHN J. HALL, New York               VERN BUCHANAN, Florida
STEVE KAGEN, Wisconsin
STEVE COHEN, Tennessee
JERRY McNERNEY, California
LAURA A. RICHARDSON, California

                                  (ii)

?

     SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

                   CORRINE BROWN, Florida Chairwoman

JERROLD NADLER, New York             BILL SHUSTER, Pennylvania
LEONARD L. BOSWELL, Iowa             THOMAS E. PETRI, Wisconsin
JULIA CARSON, Indiana                WAYNE T. GILCHREST, Maryland
GRACE F. NAPOLITANO, California      STEVEN C. LaTOURETTE, Ohio
NICK LAMPSON, Texas                  JERRY MORAN, Kansas
ZACHARY T. SPACE, Ohio, Vice Chair   GARY G. MILLER, California
BRUCE L. BRALEY, Iowa                HENRY E. BROWN, Jr., South 
TIMOTHY J. WALZ, Minnesota           Carolina
NICK J. RAHALL II, West Virginia     TIMOTHY V. JOHNSON, Illinois
PETER A. DeFAZIO, Oregon             TODD RUSSELL PLATTS, Pennsylvania
JERRY F. COSTELLO, Illinois          SAM GRAVES, Missouri
EDDIE BERNICE JOHNSON, Texas         JIM GERLACH, Pennsylvania
ELIJAH E. CUMMINGS, Maryland         MARIO DIAZ-BALART, Florida
MICHAEL H. MICHAUD, Maine            LYNN A. WESTMORELND, Georgia
DANIEL LIPINSKI, Illinois            JOHN L. MICA, Florida
JAMES L. OBERSTAR, Minnesota           (ex officio)
  (ex officio)

                                 (iii)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................   vii

                               TESTIMONY

Buttrey, Hon W. Douglas, Vice Chairman, Surface Transportation 
  Board..........................................................    11
Chasey, Hon. Kathy, Mayor, Mullica Township, New Jersey..........    37
Foley, Hon. Brian X., Town Supervisor, Brookhaven, New York......    37
Jones, III, Robert, Managing Principal, New England Transrail, 
  LLC............................................................    55
Lautenberg, Hon. Frank, a United States Senator from the State of 
  New Jersey.....................................................     3
Marturano, Thomas, Director of Natural Resources and Solid Waste, 
  New Jersey Meadowlands Commission..............................    55
McMorrow, Hon. Barbara, Freeholder, Freehold, New Jersey.........    37
Mulvey, Hon. Francis P., Commissioner, Surface Transportation 
  Board..........................................................    11
Murphy, Hon. Patrick, a Representative in Congress from the State 
  of Pennsylvania................................................     3
Nottingham, Hon. Charles D. ``Chip,'' Chairman, Surface 
  Transportation Board...........................................    11
Pallone, Jr., Hon. Frank, a Representative in Congress from the 
  State of New Jersey............................................     3
Pizzo, Hon. Joseph W., City Solicitor, Township of Bensalem, 
  Pennsylvania...................................................    37
Schmidt, Hon. Gregory, Mayor, Village of Croton-On-Hudson, New 
  York...........................................................    37
Skacel, Wolfgang, Assistant Commissioner, New Jersey Department 
  of Environmental Protection....................................    55

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Bishop, Hon. Timothy H., of New York.............................    68
Costello, Hon. Jerry F., of Illinois.............................    69
Hinchey, Hon. Maurice D., of New York............................    71
Oberstar, Hon. James L., of Minnesota............................    75
Pallone, Jr., Hon. Frank, of New Jersey..........................    77
Rahall, II, Hon. Nick J., of West Virginia.......................    79
Smith, Hon. Christopher H., of New Jersey........................   110

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Buttrey, Hon. W. Douglas.........................................   124
Chasey, Hon. Kathy...............................................   125
Foley, Hon. Brian X..............................................   129
Jones, III, Robert W.............................................   132
Marturano, Thomas................................................   141
McMorrow, Hon. Barbara...........................................   176
Mulvey, Hon. Francis P...........................................   179
Nottingham, Hon. Charles D.......................................   197
Schmidt, Hon. Gregory J..........................................   214
Skacel, Wolfgang.................................................   220

                       SUBMISSIONS FOR THE RECORD

Rahall, II, Hon. Nick J., a Representative in Congress from the 
  State of West Virginia:

  Eric Hsu, ``3 Railroad Dump Stations Closed,'' The Record, 
    April 28, 2007...............................................    81
  New York Susquehanna and Western Railway Corporation v. 
    Jackson, 500 F.3d 238 (3rd Cir. 2007)........................    82
Jones, III, Robert, Managing Principal, New England Transrail, 
  LLC, additional statement......................................   138
Marturano, Thomas, Director of Natural Resources and Solid Waste, 
  New Jersey Meadowlands Commission; Skacel, Wolfgang, Assistant 
  Commissioner, New Jersey Department of Environmental 
  Protection, response to question from Rep. Rahall..............   171
Marturano, Thomas, Director of Natural Resources and Solid Waste, 
  New Jersey Meadowlands Commission, additional statement........   174
Nottingham, Hon. Charles D. ``Chip,'' Chairman, Surface 
  Transportation Board, response to question from Rep. Hall......    33
Nottingham, Hon. Charles D. ``Chip,'' Chairman, Surface 
  Transportation Board; Buttrey, Hon W. Douglas, Vice Chairman, 
  Surface Transportation Board, responses to questions from the 
  Subcommittee...................................................   211

                        ADDITIONS TO THE RECORD

Joseph DiGirolamo, Mayor, Township of Bensalem, Pennsylvania, 
  written statement..............................................   252

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            RAILROAD-OWNED SOLID WASTE TRANSLOAD FACILITIES

                              ----------                              


                       Tuesday, October 16, 2007

                  House of Representatives,
    Committee on Transportation and Infrastructure,
       Subcommittee on Railroads, Pipelines, and Hazardous 
                                                 Materials,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:03 a.m., in 
Room 2167, Rayburn House Office Building, Hon. Corrine Brown 
[Chairwoman of the Subcommittee] Presiding.
    Ms. Brown. Will the Subcommittee on Railroads, Pipelines 
and Hazardous Materials come to order?
    The Subcommittee is meeting today to hear testimony on 
railroads, on solid-waste transload facilities. I want to thank 
Mr. Murphy, who is here, and others--Mr. Frank Pallone, who, I 
am sure, is on his way--and many of the Northeastern Members 
have been closely monitoring this issue and requested today's 
hearing.
    Americans are producing more waste than ever. In 1960, the 
United States generated 88 million tons of municipal solid 
waste. In 2005, the amount has grown to nearly 246 million 
tons, or 4.5 pounds per person per day.
    As a result, it is harder than ever to get rid of our 
trash. There are many reasons for this. The consolidation of 
the waste-management industry, the challenge of constructing 
new landfills and the closing of older landfills are making it 
harder for States and municipalities to deal with the growing 
problem.
    Rail is an important transportation mode for the solid-
waste industry. Its importance is increasing as the distance to 
landfills from our cities and communities grows longer and fuel 
costs continue to rise.
    However, there is a growing concern in the Northeast that 
some railroads are using Federal preemption standards to shield 
themselves from important State and local environmental laws 
and still are merely transloading waste by taking it from 
trucks and placing it on railcars. Some railroads in the 
Northeast are operating like transfer stations--putting waste 
on the ground, sorting it, bailing it and processing it before 
it goes to the rail sites.
    Solid-waste companies that do this work are required to 
comply with State and local environmental laws, while the 
railroads, which are doing the same work, claim that they are 
not subject to these laws because of Federal preemption 
standards.
    I believe that we should not interfere with interstate 
commerce, because we do not want a patchwork of State and local 
regulations. But it is clear that someone needs to authorize 
the manpower to ensure that railroads operating waste-transfer 
stations are not posing a health or an environmental risk to 
the communities where they are operating.
    I am looking forward to today's hearing and to the 
witnesses in learning how we can protect communities from harm 
without creating further problems in the disposing of municipal 
solid waste.
    Before I yield to Mr. Shuster, I ask that the Members be 
given 14 days to revise and to extend their remarks and to 
permit the submission of additional statements and material by 
Members and witnesses.
    Without objection, so ordered.
    I ask unanimous consent that Mr. Rahall be allowed to 
participate in today's hearing and to sit and ask questions of 
the witnesses.
    Without objection, so ordered.
    With that, I will now yield to Mr. Shuster for his opening 
statement.
    Mr. Shuster. Madam Chair, I would like to ask unanimous 
consent that Mr. LoBiondo, a Member of the Full Committee, be 
allowed to sit on the Subcommittee today and to ask questions 
and to give his opening statement.
    Ms. Brown. Without objection.
    Mr. Shuster. Okay. Thank you.
    Well, good morning. I would like to welcome you all to this 
Railroad Subcommittee hearing on railroad waste facilities.
    This is the second hearing we have held on the subject 
since 2006, and there still seems to be a misunderstanding 
concerning the ICC Termination Act. That law gives the Surface 
Transportation Board exclusive jurisdiction over railroad 
facilities such as freight yards, side tracks and waste-
transload facilities, but despite what some people say, the ICC 
Termination Act does not preempt all States and local laws.
    First of all, the ICC Termination Act only applies to 
legitimate railroads and to legitimate rail carriers. If a 
company is not a legitimate railroad, case closed; there is no 
preemption. State and local laws still apply. Even if the 
operator is a legitimate railroad, most State and local laws 
still apply.
    If you look at the case law, Federal preemption for 
railroad waste facilities is actually fairly limited. While 
communities are not allowed to have upfront permitting 
requirements, they can still enforce their local codes. Local 
codes for electrical, building, fire, plumbing, sanitation and 
rodent control still apply even if the site is run by a 
railroad. The only limitation is that local codes cannot 
discriminate against railroads or burden interstate commerce.
    Unfortunately, some people have used phony preemption 
claims to evade legitimate local regulations. People have 
claimed to be railroads even when they do not own a single 
train. People have claimed to be exempt from local health and 
safety regulations, when that was never the intent of the 
Federal law. These people hire sharp lawyers, file endless 
legal proceedings, and make money every day until the courts 
finally shut them down.
    When local communities are forced to spend millions 
litigating against shady companies running waste sites, 
something is wrong with the system. I am interested to hear 
today what the STB has done to prevent such abuses from 
occurring and whether enough has been done to do that.
    Thank you, Madam Chairman, for holding this hearing, and I 
yield back.
    Ms. Brown. Thank you.
    I am pleased to welcome today Mr. Patrick Murphy from 
Philadelphia.
    You have the floor, sir.

TESTIMONY OF HON. PATRICK MURPHY, A REPRESENTATIVE IN CONGRESS 
  FROM THE STATE OF PENNSYLVANIA; HON. FRANK PALLONE, JR., A 
 REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY; HON. 
FRANK LAUTENBERG, A UNITED STATES SENATOR FROM THE STATE OF NEW 
                             JERSEY

    Mr. Murphy. Madam Chairwoman and Ranking Member Shuster, 
thank you very much for the opportunity to speak to you today.
    I also would like to thank the rest of the Subcommittee for 
giving me the opportunity to speak on an issue of great 
importance, not just to my district but to districts all over 
our country.
    It is my privilege to introduce to you Bensalem Township's 
solicitor, Joe Pizzo.
    Joe, if you could stand up.
    We originally planned on having Mayor Joe DiGirolamo, the 
mayor of Bensalem in Bucks County, Pennsylvania, from my 
district, to testify today, but unfortunately, the mayor could 
not make the rescheduled hearing. We are disappointed that the 
mayor could not make it, but I am pleased that Mr. Pizzo is 
here to represent Mayor DiGirolamo and Bensalem Township.
    Joe Pizzo is Bensalem's solicitor. No one knows the details 
of Bensalem's fight against the proposed waste-transfer station 
better than Joe. He has been a consistent and forceful advocate 
for the citizens of Bensalem. I want to take this opportunity 
to thank him for his efforts and to thank him for agreeing to 
come before this Committee on such short notice. He knows our 
community. He will give a critical local perspective on just 
how damaging these facilities can be. Joe will give the details 
of Bensalem's fight against a rail company that is attempting 
to build a trash facility in the township.
    So I want to take this time to urge the passage of 
Congressman Frank Pallone's Clean Railroad Act. I am a 
cosponsor of his bill, which would exclude solid-waste disposal 
from the jurisdiction of the Surface Transportation Board. We 
are pushing for this so that State and local governments can 
protect their citizens and regulate solid-waste transfer 
stations built next to interstate freight rail lines.
    This legislation is urgently needed for many reasons. I 
think that it is wrong that this legal loophole is allowing 
rail companies to run roughshod over State and local laws and 
the will of a community. These laws are there for a reason, and 
in Bensalem's case, the construction of this trash facility 
would destroy a year-long revitalization process for an 
economically depressed area.
    Secondly, this is simply an issue of fairness. By refusing 
to close this loophole, we are putting waste-management 
companies that play by the rules at a severe disadvantage to a 
select few rail companies that do not care about the risks 
posed to local citizens by these facilities.
    Lastly, Congress has a responsibility to stand up to the 
executive branch on this issue. When Congress created the 
Surface Transportation Board, it was never intended to allow 
decisions by the STB to be used to override the wishes of 
cities and towns across our country. Certainly, the STB was not 
to be used as a means of suppressing the health and the 
environmental regulations of State and local governments. Yet, 
this is exactly what is happening.
    This is not a partisan issue. Mayor DiGirolamo is a 
Republican, and, as you know, I am a Democrat, but we are 
working together on this issue because it is what is right for 
our community.
    With that, I would like to thank again the Chairwoman and 
the Ranking Member for giving me the opportunity to testify 
today. And I would be happy to answer any questions that you 
may have.
    Ms. Brown. Thank you.
    Now, Representative Pallone from New Jersey is the person 
who has requested this hearing and who has been very persistent 
about making sure that we have this hearing today, so I will 
turn it over to Mr. Pallone.
    Mr. Pallone. Thank you.
    First of all, I want to thank you, Chairwoman Brown and 
also Ranking Member Shuster, for having this hearing today. And 
I know that I did ask many times for the Chairwoman to conduct 
a hearing, and I appreciate the fact that we are having it. It 
is really an important issue for not only New Jersey and 
Pennsylvania but, I believe, throughout the country as the 
problem gets worse, which I think it, in fact, will.
    As you know, Senator Lautenberg has introduced this bill in 
the Senate. I do believe that he will probably be here a little 
later to testify. But what we are seeing is that the problem 
that started in a few States now is just getting worse around 
the country.
    The problem is that you have, not all, but some waste 
handlers and railroad companies that are trying to exploit this 
loophole in the Federal law in order to set up unregulated 
waste-transfer facilities. Imagine if you have, you know, a 
pile of this garbage that has absolutely no State regulation. I 
mean, that is basically what we are seeing.
    Under the Interstate Commerce Commission Termination Act, 
the Surface Transportation Board, as you know, has exclusive 
jurisdiction over, "transportation by rail carriers and the 
ability to grant Federal preemption over other laws at any 
level, whether it be local, State or Federal, that might impede 
such transportation." But I do not believe that it was the 
intention of Congress that such authority extend to these kinds 
of facilities. It was only for transportation by rail, not to 
the operation of facilities that are just sited next to rail 
operations or that have a business connection to a rail 
company. And I think that is the key. This was not the 
intention of Congress, but they have been exploiting it. They 
have been using this loophole to build or plan waste-transfer 
stations next to rail lines and to avoid any regulation.
    In New Jersey, we have about 15 railroad waste-transfer 
facilities that have been proposed or that are now operating in 
the State, one of which handles hazardous waste. Now, some of 
these companies have gone before the STB to seek the Federal 
preemption of a host of environmental and public-health laws 
that apply to every other waste-transfer facility. So what you 
have is the ones that are next to the rail line being exempt 
from all of the State laws. The others that are competing with 
them, that are not there, are having to fulfill all of their 
obligations. So it is a total inequity, if you will.
    Now, 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. And as I said, the word is spreading. 
These waste-transfer stations have sprung up or are being 
proposed, not only New Jersey, Massachusetts, Pennsylvania, and 
in New York. And in all of these instances, certain waste 
haulers are trying hard to avoid environmental regulations.
    There is no other way to change this, as far as I know, 
other than for Congress to take action and to pass this bill. 
There is no indication that the STB, you know, through their 
own regulation, is going to change the situation. We do have to 
act.
    I mentioned that Senator Lautenberg has the companion bill 
in the Senate. The bill simply amends the act to say that 
solid-waste management and processing are excluded from the 
jurisdiction of the STB, and then, of course, States would have 
the authority to regulate these waste-transfer stations just as 
they do any other in their State.
    I am just summarizing, Madam Chairwoman. You have my full 
statement for the record, but I just wanted to sort of 
visualize--I wish I did have a visual here--visualize six 
stories of waste sitting next to a rail line in your own 
community, with no oversight from the State or local 
authorities. That is what we are facing right now if we do not 
pass this bill.
    If I could, I want to mention that you have four witnesses 
today from New Jersey who are friends of mine. One is the 
freeholder in Monmouth County, Barbara McMorrow, who is from my 
own county. Another is the Mullica Township mayor, Kathy 
Chasey, who is also here. We have representatives from our 
State Department of Environmental Protection and from the New 
Jersey Meadowlands Commission. So I also appreciate not only 
bringing up the bill today but in letting these New Jersey 
witnesses testify.
    Thank you.
    Ms. Brown. Thank you very much.
    The Senator has just arrived, and I want to welcome Senator 
Frank Lautenberg from New Jersey.
    Senator Lautenberg, thank you very much for traveling all 
the way from the other side of the chamber to be with us today. 
We are honored. And I will turn the statements over to you. The 
floor is yours, sir.
    Senator Lautenberg. Thank you very much, Madam Chairman. It 
is nice to see you in that position.
    I think it is fair to say that we are all concerned with 
this subject. Even though every State is not affected by it 
presently, there is real interest in continuing this process in 
States that have not yet experienced it.
    Now, I serve as Chairman of the Senate Subcommittee on 
Surface Transportation and Merchant Marine Infrastructure, 
Safety and Security of the Senate Commerce Committee. Now, my 
Subcommittee has sole jurisdiction over railroads. One issue of 
great importance to our Subcommittee involves the processing of 
solid waste in open piles on railroad property without regard 
for the effects it has on the surrounding communities.
    Generally speaking, solid waste is an environmental hazard 
and must be handled properly. Under Federal guidelines issued 
by the EPA, States typically regulate the handling of solid 
waste, but there is a loophole in Federal law that says, if you 
are a railroad, you are exempt; these State environmental laws 
cannot apply.
    Well, recently, railroads have been taking advantage of 
this loophole and operating unregulated solid-waste processing 
facilities on their property. There have been fires at these 
sites, reports of dust and debris blowing in the wind from 
them, terrible odors, and the potential pollution of our water 
resources by runoff from these piles of waste.
    Now, despite opportunities for the courts and the Surface 
Transportation Board to resolve this obvious problem, the 
loophole is alive and well. And we have to pass legislation to 
close it and allow New Jersey and other States to protect the 
health of their residents through the effective regulation of 
solid-waste processing.
    Now, I want to emphasize to the Committee that this is not 
just a New Jersey problem. Again, it is viewed with interest by 
many processing organizations, railroads. And solid-waste sites 
are being proposed all over the Northeastern United States, and 
I am certain that we will soon see more sites all over the 
country. Just picture it, a dump site out in the open; just 
throw your trash there and leave it behind.
    That is why I introduced the Clean Railroads Act of 2007. 
And I am proud that my colleague from New Jersey, Congressman 
Frank Pallone, is the author of this legislation in the House. 
Now, our legislation would make it clear that solid-waste 
processing facilities, even if they happen to be located on or 
next to a rail line, are not given any special reprieve for 
meeting State environmental standards. Importantly, our bill 
would still preserve the uniform Federal regulation of railroad 
transportation that is so important to interstate commerce.
    The bottom line is, however, that States should regulate 
solid-waste processing because they know what is best to 
protect the workers, the residents and the environment. The 
Clean Railroads Act of 2007 will assure this protection.
    The Senate Commerce Committee has already reported out 
revised language from my bill as part of a larger package on 
railroad safety legislation. We are going to continue to work 
with interested parties to perfect that language reported out 
by the Committee. And I hope that this Subcommittee will take 
up and pass the Clean Railroads Act as quickly as possible, so 
that Congress can speak with a single voice and act to resolve 
this problem.
    I thank you, Madam Chairman, for the opportunity to be here 
and to present our view.
    Ms. Brown. Thank you, Senator.
    I yield to Mr. Oberstar, who is the full Chair of this 
Committee.
    Mr. Oberstar?
    Mr. Oberstar. Thank you, Madam Chair, and thank you, Mr. 
Shuster, for holding this hearing and for the time that it 
takes to invest in setting up such a hearing.
    I want to thank Mr. Pallone, our colleague; Mr. Murphy; and 
especially Senator Lautenberg. We have a very special 
friendship and a professional association and respect for one 
another. It goes back over 20-some years.
    I recall, in this very Committee room, I was Chair of the 
Subcommittee on Investigations and Oversight, holding hearings 
on proposals to end the smoking on-board aircraft, and Senator 
Lautenberg just came into the Committee room. He just walked in 
and walked up and said, "Can I testify?" I said, "Of course."
    Senator Lautenberg. I know better now.
    Mr. Oberstar. Of course. He did not send a letter. He did 
not send staff or anything formal. He just said, "I just feel 
so strongly about it."
    Our then-Committee Chairman, Mr. Howard from New Jersey, 
was astonished. He was a heavy smoker, and he had said, "Well, 
if you pass this legislation limiting smoking or preventing 
smoking, then I cannot fly anymore. I have to drive or take a 
train." Senator Lautenberg just gave his straight, unabashed, 
unreserved testimony about the evils of smoking on-board 
airplanes, including a great respect for flight attendants.
    I remember that testimony so well. It was from the heart, 
it was candid, it was forceful, it was fact-filled. A week or 
so later, we had an 11-hour markup in this Committee room, and 
we started at 10:30 that morning and went until nearly 11 
o'clock or 10 o'clock that night, and lost by one vote. But 
then when the appropriations bill for transportation came to 
the House floor, it was Mr. Durbin who offered an amendment 
based on our hearings----
    Senator Lautenberg. Right.
    Mr. Oberstar. --and Senator Lautenberg's testimony. And it 
passed overwhelmingly on the House floor, as I knew it would. 
And since then, we have had clean airplane interiors.
    Senator Lautenberg. Thanks very much.
    If I may for a second, I did not realize--I was fairly new 
in the Senate at the time--I did not realize that running the 
risk of developing wrath from such a powerful Committee 
Chairman might come around and bite me. But the issue made its 
own way. And today, Mr. Oberstar, when I get on an airplane--
and sometimes modesty prevents me from really shouting it 
outloud--I say, "Well, you cannot smoke on airplanes because I 
wrote the law," and younger people will say, "No, you never 
could smoke on airplanes."
    Mr. Oberstar. It has been that long.
    Senator Lautenberg. So, anyway, we made sure of that. And I 
am delighted to be with here with my colleagues from the House.
    Mr. Oberstar. Once again, you come to us with a valid cause 
and an earnest advocacy and based on health concerns. And we 
ought to move this legislation, and we will very much pursue 
and accept your recommendations.
    Senator Lautenberg. Thank you very much.
    Ms. Brown. Mr. Shuster would like to make a comment.
    Mr. Shuster. Thank you, Madam Chair.
    I appreciate all of you being here today. This is an issue 
that was never intended under the law, but it has taken on its 
own life because of the litigation that continues to arise.
    When it comes to waste, Pennsylvania is the number-one 
importer of trash. So, as we move down the road, that is 
something that I want to make sure that we are looking at, 
because, year in and year out, the State of Pennsylvania tries 
to fight this importation of trash from many other States, much 
of it coming from New Jersey.
    It is something that we want to look at, but we have 
always--I am not a constitutional attorney or a lawyer, so I 
cannot sit up here and state with real authority on the 
interstate commerce clause. But that has been something that 
Pennsylvania has not been able to overcome, and hence, a lot of 
trash gets imported into Pennsylvania.
    So it is something that I want to make sure that I am 
looking at closely, not only this issue on the transfer 
stations but, you know, where trash is coming and going and how 
we allow our States to have some say in this matter.
    So I appreciate all three of you being here today. Thank 
you.
    Ms. Brown. Thank you all very much for your testimony.
    Now Mr. Rahall has an opening statement.
    Mr. Rahall?
    Mr. Rahall. Thank you, Madam Chair, for recognition and for 
holding today's hearing.
    I believe this is probably the second time in less than a 
month that we have had the pleasure of receiving testimony from 
the upcoming panel, the board members of the STB. I believe it 
is also the second issue on which we have heard strong 
disagreement and debate from within the board, itself. And that 
is probably a good thing, as we air our grievances and bring on 
the debate.
    Some, today, say there is a disagreement regarding what 
specific activities are covered by the Federal preemption 
clause. Some of our witnesses today would say that a waste-
transload facility is not covered. However, the ICC Termination 
Act is very clear when it defines the preemption clause to 
cover dropping off cargo, loading it onto trains and the 
shipping of cargo.
    The 3rd Court of Appeals recently stated in its decision of 
September 4th, 2007, that facilities engaging in the receipt, 
storage, handling and interchange of rail cargo fit within the 
plain text of the Termination Act's preemption clause.
    I would ask, Madam Chair, that the 3rd Circuit'sdecision be 
made a part of the record. May that be made part of the record?
    Ms. Brown. Without objection.
    Mr. Rahall. One further item, Madam Chair.
    There is also disagreement, of course, over how well a 
State like New Jersey or Massachusetts can protect their 
citizens through the exemption, given health and safety 
concerns.
    Madam Chair, according to an article published on April 28, 
2007, by New Jersey's The Record, three solid-waste transfer 
stations operated by New York, Susquehanna, and Western Railway 
Corporation were shut down because of a lack of adequate fire 
safety sprinklers. So it does show that these health and safety 
concerns are currently being considered. And I would ask that 
that article be made a part of the record as well.
    Mr. Rahall. If States do not have the authority to enforce 
their health and safety regulations, I would ask, under whose 
authority did New Jersey shut down these facilities that are 
referenced in the attached article?
    I would also point out that restricting STB's jurisdiction 
on railroad-owned waste-transfer facilities could very well set 
off a dangerous precedent. If we allow one type of commodity to 
have the Federal exemption removed, where does it stop? Are 
there not similar concerns associated with other products, such 
as paint or pesticides?
    Again, Madam Chair, thank you for allowing me to make these 
comments. And I ask that the two referenced articles be made a 
part of the record.
    Ms. Brown. Thank you, Mr. Rahall. Your statements and 
articles will be submitted to the record, without objection.
    Now, Mr. LoBiondo from New Jersey.
    Mr. LoBiondo. Thank you, Madam Chair, very much for holding 
the hearing today and for the opportunity to make a brief 
statement.
    I am very pleased that you have chosen to allow Mayor Kathy 
Chasey from Mullica Township, which is in my district, the 2nd 
Congressional District of New Jersey, to be testifying a little 
bit later on today.
    Mayor Chasey and the residents of Mullica Township have 
been through a very agonizing period over the last few years. 
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 concerned with the impact the facility would have on the 
environment and on the quality of life of its residents. 
Concern quickly turned to outrage after the township was 
informed that existing Federal law preempts any local or State 
laws on zoning ordinances or environmental regulations.
    Mullica joined with the State of New Jersey to fight the 
proposed facility in Federal court. On December 5th, the court 
imposed an injunction, barring the development of the facility 
until the court could resolve whether the National Parks and 
Recreations Act of 1978 conflicted with the preemption 
standards in the Interstate Commerce Commission Act of 1995.
    The National Parks and Recreation Act established the 
Pinelands National Reserve, 1.1 million acres of pine forest, 
the development of which requires the approval of a joint 
Federal and State commission. Fortunately, Mullica falls nearly 
in the center of the pinelands, and the conflicting Federal 
laws ultimately helped Mullica dodge the bullet. Unfortunately, 
other small towns in New Jersey and across the Northeast have 
not been so lucky. That is why it is critical for this 
Committee to move legislation to clarify the STB's preemption 
authority.
    I want to thank Congressman Frank Pallone. I am thrilled to 
be working with him and other members of our delegation on the 
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 the 
railroad and which pose a threat to our environment and quality 
of life, such as waste-transfer stations, should not be granted 
approval without the consent of local residents.
    Madam Chair, once again, I thank you very much for the 
opportunity to be here and for Mayor Chasey to be here.
    Ms. Brown. Thank you.
    Mr. John Hall?
    Mr. Hall. Thank you, Madam Chair, for having this important 
hearing and for allowing my participation today, and also for 
inviting Mayor Gregory Schmidt of the Village of Croton-on-
Hudson, in my district, who is on the third witness panel 
today.
    Mayor Schmidt, would you stand up for a second? Thank you. 
We are looking forward to your testimony.
    Dr. Schmidt is a chiropractor by trade and has served as 
mayor since 2005. Prior to that, he served as a village trustee 
for 3 years and has maintained an active relationship with 
civic groups like the Croton Chamber of Commerce and the Croton 
Rotary Club.
    As he will show in a few moments, his participation in the 
civic life of a community that has wrestled with the issue 
before us today makes him well-suited to testify about the 
impact of legal loopholes that allow for the preemption of 
health and environmental standards governing municipal waste 
facilities.
    As the testimony of the mayor and other witnesses will soon 
make clear, the legal framework that grants the STB exclusive 
jurisdiction over rail facilities has left a loophole large 
enough to drive a garbage truck through. Although procedures 
vary by State, the process for building a municipal waste 
facility is usually a lengthy one that ensures public interest 
is served by requiring local zoning and approval, as well as 
health and environmental certifications. In order to circumvent 
that process, some waste carriers and railroads have been 
collocating waste facilities with rail infrastructure to avail 
themselves of the sole jurisdiction afforded to the STB.
    Congress gave the STB this jurisdiction in order to make 
sure that our Nation's critical railways would be able to 
effectively meet transportation needs, not to help waste 
companies and railroads dodge rules that were meant to protect 
the public.
    The STB has never been intended to and is currently not 
equipped to evaluate the impacts of solid-waste storage and 
transfer on the public health and the surrounding environment. 
As a result, these facilities and the waste they contain end up 
in a legal no man's land, with little or no oversight.
    Unfortunately, local ecosystems, groundwater supplies and 
air quality do not pay much attention to the regulatory ins and 
outs of rail law. Unregulated waste can present the same threat 
to local health regardless of whether they are connected to a 
rail line by a few hundred feet of track.
    Often, these small communities, like Croton-on-Hudson, that 
host these sites have concerns about their impact but lack of 
financial resources or the legal recourse to protect the health 
of their own citizens. That is why we need to make sure the 
regulations match the reality. That is why I am proud to be a 
cosponsor of Congressman Pallone's legislation. And today's 
effort is a strong step forward in that effort.
    I thank the mayor for his testimony, and I thank the 
honorable Chairwoman for holding this hearing.
    I yield back.
    Ms. Brown. Thank you.
    I would ask that the first panel to come forward, please.
    Good morning.
    I am very pleased to introduce and welcome our witnesses 
this morning.
    Our first witness is Chairman Charles Nottingham.
    Mr. Nottingham, while you had recently testified for the 
first time before the Full Committee, this is your first time 
testifying before the Subcommittee. We are very pleased to have 
you here today.
    Our second witness is the Vice Chair of the STB, W. Douglas 
Buttrey.
    Mr. Buttrey, at our last hearing on this issue, you were 
the Chairperson, and I hope you will not be afraid to lend Mr. 
Nottingham direction on this issue where you feel it is 
appropriate.
    Our final witness for the panel, who is a former person who 
worked with the Committee, is Mr. Mulvey.
    We are always happy to see you, and we are happy that you 
are here today.
    I ask that you limit your oral statements to 5 minutes. 
However, your entire written statements will appear in the 
record.
    Mr. Chairman?

   TESTIMONY OF HON. CHARLES D. "CHIP" NOTTINGHAM, CHAIRMAN, 
  SURFACE TRANSPORTATION BOARD; HON W. DOUGLAS BUTTREY, VICE 
CHAIRMAN, SURFACE TRANSPORTATION BOARD; HON. FRANCIS P. MULVEY, 
           COMMISSIONER, SURFACE TRANSPORTATION BOARD

    Mr. Nottingham. Good morning, Chairwoman Brown and Members 
of the Subcommittee.
    My name is Charles Nottingham, and I am Chairman of the 
Surface Transportation Board. I do appreciate the opportunity 
to appear before this Subcommittee today to address how the STB 
regulates rail-related solid-waste transload facilities.
    From a personal perspective, I just want to note that I did 
grow up in northern New Jersey. I still spend a lot of time 
there and will be there later this week, and am very aware of 
the environmental sensitivities and concerns related to this 
issue and to others.
    Turning to the specific issue at hand, the express Federal 
preemption contained in the STB's governing statute gives the 
STB exclusive jurisdiction over "transportation by rail 
carriers." To qualify for preemption, two tests must be met: 
The operation must be rail transportation, and it must be 
conducted by a rail carrier.
    Congress has defined the term "transportation" broadly to 
include all of the facilities used for and services related to 
the movement of property by rail, expressly including, the 
"receipt, delivery, transfer and transit, storage and handling 
of property." Thus, under our statute, transportation is not 
limited to the movement of a commodity while it is in a 
railcar, but includes activities such as loading and unloading 
material from railcars and temporary storage.
    However, manufacturing and commercial activities that occur 
on property owned by a railroad that are not part of or are 
integral to the provision of rail service are not part of 
transportation. Therefore, these activities do not qualify for 
Federal preemption and are subject to the full panoply of State 
and local regulation.
    Even where an activity is transportation and preemption 
applies, the Board has made clear that there are limits. The 
Board has never interpreted the statute to mean that it 
preempts all other law. Rather, where there are overlapping 
Federal statutes, they are to be harmonized with each statute 
given effect to the extent possible. Nor is all State and local 
regulation affecting rail carriers preempted. Rather, States 
retain certain police powers to protect public health and 
safety. These powers include requiring railroads to comply with 
local fire, electrical and building codes, to allow local 
government to inspect their facilities, and to share their 
plans with the community when they are undertaking an activity 
for which a nonrailroad entity would require a permit.
    It is also important to keep in mind that preemption 
applies both to cases that require STB licensing authority and 
also to some that do not.
    First, if a project involves building a new rail line into 
what would be a new service area for the railroad, it requires 
a license from the Board.
    Second, if a project involves a new carrier seeking to 
acquire or operate an existing rail line, the new carrier must 
also obtain authority from the Board, usually in a summary 
class exemption process. The Board has become increasingly 
concerned recently that this process does not always provide 
enough information about a pending proposal to allow us to 
handle our regulatory responsibilities effectively and 
efficiently.
    We recently initiated a rulemaking proceeding to consider 
whether to increase the information required from all of those 
seeking to use the class exemption procedures to acquire, lease 
or operate rail lines. In some cases, the Board has stayed or 
delayed the effectiveness of a notice invoking a class 
exemption to allow a more searching inquiry and to solicit 
further evidence.
    For example, we recently held up the proposal of Ashland 
Railroad to lease and operate 1 1/2 miles of currently unused 
track in Freehold, New Jersey, and to develop a transload 
facility on that track because we needed to obtain additional 
information. After the railroad, Ashland, failed to adequately 
respond to specific questions about the nature of the proposed 
operations and the potential impacts to wetlands and water 
supply, the Board rejected Ashland's request for authority.
    We hope that our rulemaking procedure will improve this 
process and lessen the need for stay requests. And we look 
forward to receiving comments from all of the witnesses before 
you today.
    In the third and final category, there are those activities 
that, although part of rail transportation, may not be subject 
to STB licensing. These activities include making improvements 
to existing railroad operations, such as adding track or 
facilities at existing railroad locations, including transload 
facilities where materials are transferred between truck and 
rail, to better serve the needs of railroad service territory.
    Because no Board license is required in these types of 
cases, there is no occasion for the STB to conduct a formal 
environmental review or to impose specific environmental 
conditions. However, Federal environmental laws continue to 
apply, and State and local police powers are not preempted. In 
addition, any interested party, community, State or local 
authority concerned may bring their concerns to the Board via a 
declaratory order request. Alternatively, they can go directly 
to court.
    Just last week, the Board issued an order related to a 
project in Yaphank, New York, requiring the entity constructing 
facilities to immediately cease that activity and to either 
obtain Board authorization for the activity or a Board decision 
finding that the activity does not require our approval. We 
have also increased our inspection activity, where we send our 
staff directly to the facilities to find out what is going on 
on the ground.
    Finally, some States have adopted regulations that 
accommodate Federal preemption but allow them to inspect and 
impose other requirements on rail-related waste facilities 
under the police powers they do retain. For example, New Jersey 
has regulations, known as the 2-D regulations, that shield the 
carrier from the need to comply with zoning and other 
preconstruction, environmental and land-use permits but impose 
a number of other requirements on rail-related solid-waste 
facilities that are meant not to impede the continued flow of 
interstate commerce.
    The Board has never been asked to formally address the New 
Jersey regulations, and we are not currently a party to the 
litigation pending in the Federal courts regarding them. But I 
would say it would be consistent with everything the Board has 
said about the scope of preemption that States can apply their 
regulations to rail-related waste facilities so long as the 
regulations are not applied in a discriminatory manner and the 
regulations do not unreasonably interfere with a railroad's 
right to conduct its operations. Therefore, personally, I would 
not object to New Jersey implementing its 2-D regulations or to 
other States adopting or implementing similar regulations.
    While the statutory and regulatory issues presented in 
these types of cases are quite complex, the public interest and 
policy considerations involved in these controversies require 
policymakers to balance several important and often conflicting 
policies. And in conclusion, I will just run through them very 
quickly.
    It is such policy balancing as: How do we promote and 
expand the national rail network when local property owners, 
competing solid-waste facilities that are not located close to 
a railroad, and local and State governments seek to regulate 
rail operations? How can rail service help our country meet a 
growing demand for the transportation of material that some 
might view as controversial or a flat-out nuisance or worse? 
How can reasonable State, local and Federal health, safety and 
environmental safeguards for this type of rail transportation 
be implemented and imposed?
    What protections should rail operators have, legitimate 
rail operators, if local, State and Federal regulation become 
unreasonable and tantamount to the flat-out zoning of the 
national rail network? I believe that last point deserves 
continued attention because there seems to be a presumption, 
which I hope we can get into in some of the Q&A, that there 
would never be a case where a community just did not want a 
rail operation regardless of what it is carrying. We do see 
those tensions everywhere.
    I appreciate the opportunity to be here with you today and 
to address these questions. Please be assured the Board is 
focused very earnestly and diligently on these issues, and we 
will continue to do so. And I look forward to receiving any 
questions you might have.
    Ms. Brown. I ask unanimous consent that Mr. Tim Bishop be 
allowed to participate in today's hearing and to sit and ask 
questions of the witnesses. Without objection.
    Mr. Buttrey?
    Mr. Buttrey. Good morning, Chairwoman Brown, Ranking Member 
Shuster and Members of the Subcommittee.
    My name is Douglas Buttrey. I have had the privilege to 
serve as a member of the Surface Transportation Board since May 
28, 2004. Currently, I am the Board's Vice Chairman. I 
appreciate the opportunity to appear before the Subcommittee 
today, as you conduct this hearing on the railroad's solid-
waste transload facilities.
    The Board's Chairman, Charles Nottingham, has submitted 
testimony which discusses key issues before the Board and which 
summarizes recent significant Board decisions and actions on 
this matter. The Chairman's testimony covers everything I would 
have said accurately and in detail. Rather than duplicating 
coverage of the same topics, I will instead associate myself 
and endorse the Chairman's formal filed testimony. And I stand 
ready to respond to any questions the Committee may wish to 
address to me.
    Thank you very much.
    Ms. Brown. Mr. Mulvey?
    Mr. Mulvey. Thank you. Good morning, Chairwoman Brown, 
Chairman Oberstar. Thank you, Member Shuster and other Members 
of the Committee. I want to thank you for this opportunity to 
speak on railroad-owned solid-waste transload facilities.
    This agency was last called before this Subcommittee on 
this issue in May of 2006, when my colleague Doug Buttrey 
Chaired the Board. I want to commend Vice Chairman Buttrey for 
his testimony at that hearing. I would also like to take this 
opportunity, however, to update the Subcommittee on 
developments that have transpired at the Board in the 17 months 
since his testimony.
    The Board has recently taken a more assertive stance toward 
cases involving waste, but I believe we need to do more to 
prevent them from becoming cases in the first place. In a more 
proactive manner, we need to exercise the full range of our 
powers to deal with the situations that confront us, and there 
may be a need for clarification of the railroad preemption law 
by the Congress.
    In Attachment B to my testimony today, I have listed the 
various cases involving municipal solid waste or construction 
and demolition debris that have come before the Board in the 
past 17 months. The titles of these cases show that they come 
to the Board in many different guises and that entities and 
their representatives will go to great lengths to obtain the 
Federal preemption of solid-waste-related rail projects.
    A review of the Board's decisions confirms that we have 
become increasingly concerned about the tactics used in this 
bubble of cases and have become more cautious in permitting 
certain projects to move forward, as the Chairman has 
indicated. Indeed, just this last week, the Board initiated a 
proceeding to examine whether or not more information might be 
warranted up front in situations where an entity, seeking 
authorization from the Board, intends to provide facilities for 
the transportation or the transloading of municipal solid 
waste.
    Next, as you are aware, the Board held an oral argument 
this past April in an important and controversial preemption 
case, known as the New England Transrail, which you will hear 
from later on in this hearing. It was highly unusual for the 
Board to hold such a hearing in a nonrate case. On July 10th of 
this year, the Board issued its decision on which of the NET's 
proposed waste-related activities would be preempted from local 
regulation if NET were to be authorized as a railroad. I issued 
a strong dissent describing my views and reasoning. Let me 
further elaborate on those views today.
    First, let me take a moment to reassure you that I am and 
always have been an ardent supporter of Federal preemption. 
Congress and the courts have long recognized that there is a 
need to regulate railroad operations at the Federal level in 
order to avoid a patchwork quilt of State and local regulations 
that could impede an efficient flow of commerce. The Act, 
especially as amended by the Interstate Commerce Commission 
Termination Act of 1995, is one of the most pervasive and 
comprehensive of Federal regulatory schemes. The ability to 
preempt local laws is one of the prized benefits of receiving 
Board authority to build and run a railroad.
    In the rail transportation arena, the purpose of Federal 
preemption is to protect the flow of interstate commerce. 
Commodities such as MSW, C&D debris and hazmats must move by 
rail because of their physical characteristics. But because 
preemption applies to our rail universe and only to, quote, 
"transportation by rail carriers," end quote, and because the 
determination of what is "transportation" and who is a "rail 
carrier" is within the Board's jurisdiction, we should be 
exceedingly careful of how we exercise that discretion.
    In considering the spectrum of MSW-related activities that 
an entity conducts, we have the discretion to determine at what 
point transportation and, thus, preemption begins. I regret 
that my colleagues and I disagreed about where this precise 
point was in New England Transrail, but I recognize that in any 
fact-bound determination, such as in that case, there may be 
disagreements. I dissented in the Transrail case not only on 
the facts of that particular case but also on policy grounds. 
Based on the inherent qualities of municipal solid waste, I 
believe its handling should not be accorded Federal preemption 
as integrally related to rail transportation.
    MSW is an atypical commodity. A comprehensive scheme of 
State and local law exists to protect the environment and the 
health and safety of local populations in the vicinity of MSW 
handling and disposal facilities. There is a critical reason 
that the power to regulate the handling of solid waste has been 
delegated by the EPA to the States, and that is because the 
States and localities are in the best position to protect the 
health and safety of their citizens and to understand the 
impacts of handling MSW in their areas.
    Differing jurisdictions have different rules about what 
commodities should be kept out of the waste stream through 
recycling or through other special collections and through the 
disposal of yard waste and appliances. These same governments, 
then, are in the best position to determine how to handle the 
MSW that is generated in their areas and how to deal with 
noncompliant materials when the rules are not followed. And 
they often are not followed.
    Unfortunately, while the Board typically harmonizes its 
interpretation and implementation of the IC Act with other 
Federal laws, there is no Federal law to be harmonized here 
precisely because the States have been delegated the authority 
and the responsibility to regulate in the area of MSW handling.
    Finally, let me tell you what my New England Transrail 
dissent was not intended to do. My dissent focused narrowly on 
MSW. I did not object to the majority's findings with respect 
to C&D debris. The primary danger with that commodity is that 
it might contain asbestos, where the removal and disposal are 
governed by EPA and OSHA regulations. I also did not intend to 
disturb the delicate balance between local regulation and the 
enforcement of health and safety laws on the one hand and the 
Federal preemption of local laws on the other, except with 
regard to MSW.
    In conclusion, I am troubled by the recent uptick in 
assertions by entrants into the MSW industry that they are rail 
carriers subject to the Board's jurisdiction. What concerns me 
is these firms' attempts to blend the nature of the operations 
to offer both rail carrier service as well as waste processing 
and to use their putative status as rail carriers to shield 
their waste-processing operations from the reach of State and 
local environmental laws. This tactic is manipulative and 
abusive of the Board's jurisdiction and powers, and it 
highlights a method of evading the law that I cannot support.
    Either these entries are truly rail carriers providing 
transportation so their activities warrant Federal preemption, 
or they do not have rail carrier status and are subject to 
State and local regulations. They cannot have it both ways. If 
the Board's existing interpretation of the Act cannot stop this 
practice, then it is time for the Congress to step up and do 
so.
    Thank you for the opportunity to testify today. I look 
forward to answering any questions you may have.
    Ms. Brown. Thank you very much.
    Mr. Oberstar, Chairman of the Full Committee.
    Mr. Oberstar. Thank you, Madam Chair.
    I regret having to intercede here, but I have to go to 
another Committee function, a Committee meeting on transit 
issues.
    I think, Mr. Nottingham, you overstate the case, in 
worrying about Federal--when you include Federal along with 
State intervention on this particular issue about zoning, that 
the Federal Government is not going to do zoning, that the 
Federal Government agency is not going to intercede to do 
zoning. I think that is an overstatement. I understand the 
railroads' and the Board's longstanding concern for Federal 
preemption, an issue that, in some respects, should be subject 
to reconsideration.
    Without addressing the issue of State action or State 
authority to regulate in the public health interest, what would 
be your reaction to EPA's having primary jurisdiction over 
solid-waste disposal facilities on railroad properties, as they 
have had in all other circumstances?
    Mr. Nottingham. Mr. Chairman, would you like me to take a 
crack at that? Thank you for the question.
    First, if I could, I will just address your first point. 
With all due respect, I hope I did not say that there are any 
proposals currently pending that I have seen that----
    Mr. Oberstar. You were not talking about current proposals, 
but you expressed a worry that Federal involvement and, 
certainly, State involvement could result in the zoning of rail 
activities. Without touching the State issue, I do not see how 
a Federal Government agency would be involved in zoning. I 
think that is an overstatement.
    Mr. Nottingham. I do not know of any Federal agency that is 
proposing----
    Mr. Oberstar. Address the other matter for me, please.
    Mr. Nottingham. Yes, sir. And I would be happy to revisit 
later the zoning question, because it is very important.
    We would be happy to partner--in fact, we do partner with 
the EPA currently in probably the biggest and most exhaustive 
record we have developed in the history of the Board on this 
issue, which is the New England Transrail case that we had an 
11-hour hearing on. We actually put that project on hold until 
the EPA finishes a very exhaustive, remedial feasibility and 
investigative process that, the last time we checked, has no 
schedule per se. It may go for quite some time. In fact, that 
project is probably one of the most regulated projects in the 
world.
    Mr. Oberstar. But, in the end, if the EPA comes to a 
conclusion the Board does not like, who has the prior 
authority?
    Mr. Nottingham. We would defer to the EPA on their whole 
range of expertise, which, on that parcel, it is fairly fact-
specific there. That happens to be an old Superfund site, so 
especially in a situation like that--and then we would, of 
course, expect that on transportation and interstate commerce 
matters the EPA would give us some deference. And in that 
spirit, I think we can continue to work well with them, and I--
--
    Mr. Oberstar. Is that established by regulatory action by 
the Board?
    Mr. Nottingham. Not that I am aware of. It is just 
something the statute anticipates. And the way we have always 
interpreted it is that all Federal laws and statutes and their 
implementing agencies have full jurisdiction in these matters.
    Mr. Oberstar. Thank you.
    Mr. Mulvey, what would be your reaction to having EPA 
preeminent authority in such matters?
    Mr. Mulvey. Well, the EPA, theoretically, would. The EPA 
has purposefully delegated that authority to the States and 
localities, because they are the ones who have the expertise in 
this area. They are the ones who understand----
    Mr. Oberstar. But the EPA delegates authority only where 
there is a State plan, only where there has been a prior 
approved plan by the EPA, not just delegating willy-nilly. And 
I do not think the Board has any sort of plan to accept the 
delegation of authority.
    Mr. Mulvey. That is true. I was referring that the EPA 
generally relies upon State and local regulations to govern 
solid-waste facilities, but there are not any specific EPA 
regulations governing municipal solid waste. They expect the 
local governments to do it; they have the on-the-ground 
expertise. This is why I am so concerned that there is not this 
Federal law regarding these facilities to harmonize with. It is 
only the States' and local laws. And those are being preempted 
in some cases and, therefore, cannot be enforced.
    Mr. Oberstar. Thank you, Madam Chairman.
    Ms. Brown. Thank you.
    Mr. Shuster?
    Mr. Shuster. Thank you very much, Madam Chair.
    My concern about this law is that it is sort of a Trojan 
horse. All of a sudden, the Federal law takes, and there is no 
preemption, and communities will stop these transfer sites from 
being in their communities.
    You know, I understand that it is not the best thing that 
you want in your community, a transfer site or a dump. But the 
reality is that we are all producers of garbage. Everybody in 
this room today is going to throw something in a trash can, 
every one of the 300 million people. So we have got to take the 
personal responsibility to say we are going to have to have a 
transfer station in a community. We are going to have to have 
sites where we bury the garbage underground.
    As I said to the three members previously, Pennsylvania is 
the number-one importer of trash in the country. As of 2005, we 
have taken in 10 million tons of trash, more than any other 
State. And it is my view that, if Pennsylvanians create the 
trash, Pennsylvanians ought to deal with it. The same should be 
for New Jersey and all across this country.
    So, again, I am concerned that this bill--and the Chairman, 
I think, just talked to you, Mr. Chairman, about zoning. It is 
my concern you used this law, this Federal law, and you will 
have the ability to use Federal law to create zoning and say, 
"Okay, well, our community is not going to have this site."
    Could you talk a little bit more about the zoning you are 
talking about?
    Mr. Nottingham. This has always been, really, at the core 
of this policy concern, which is, how much complete land use 
and zoning control should State and localities have over rail 
operations? Understandably, it is a very delicate issue. Nobody 
would prefer or choose to, most likely--I might be, you know, 
the exception. I choose to live two blocks from the main CSX 
line because I love railroading and I like to be near a 
station. But let's face it, most people would prefer not to 
live adjacent to a noisy, active rail line or facility, no 
matter what it is carrying, not to mention things that are far 
more hazardous than what we are talking about today, that move 
through right--you know, in the not-too-distant past, right by 
this building, there was hazmat and chemicals and what have 
you.
    To answer your question, this is at play right now in 
pending legislation. My understanding is this body has an 
amendment coming to the floor, perhaps this week, on the rail 
safety bill that has the words "any Federal or State agency" in 
it. It does not say "Environmental Protection Agency." It is 
"any" agency, which, to me, means your local zoning board, your 
land use board. What you will see happen is folks will say, "We 
just do not want you. We do not care how upstanding you are, 
how much due diligence you have done, how much security, how 
many protections you put in place. You are just not welcome 
here in our community."
    In the Senate, we have seen that language move with very 
specific amendments to actually specifically call that out and 
say "not including zoning and land use." So it is playing out 
right before our eyes. We see one bill in the Senate, Senator 
Lautenberg's bill, to address that concern. It takes a very 
thoughtful approach, by the way. Then we have a bill racing to 
the floor of the House that actually says any agency at the 
State or local level can regulate. And I do not see how that 
does not play out to be a flat-out denial just for zoning or 
land-use reasons.
    Mr. Shuster. Which is a concern of mine. Would you care to 
comment.
    Mr. Mulvey. I agree. I don't believe that the purpose is to 
allow zoning in such a way that it precludes establishing a 
solid waste facility to transfer to a rail to move it out, and 
that is important. The laws need to be narrowly drawn to be 
very specific, as I think both the Lautenberg and the Pallone 
bill do.
    Mr. Shuster. I think it is extremely important, because 
again I see all kinds of unintended consequences occurring, 
because again nobody wants to live near a landfill. The reality 
is we got to put the garbage somewhere and communities have to 
step up and take care of their own waste. I don't know that you 
mentioned this, but the notification for these permits. My 
understanding is before there was no notification and then in 
the last several months you have put that into effect, that 
there has to be notification given so that these people can't 
just go out there and just operate. Is that accurate and how is 
that working?
    Mr. Nottingham. Sir, that is an active area. We are trying 
to sharpen our ability to regulate as we speak. We have 
announced a new rulemaking procedure where very much the focus 
of that is going to be to gather increased information. But in 
the meantime we are not waiting for that because rulemaking 
procedures, as we all know, can take time as we get the public 
comment and everything. We very much have within our current 
powers and we are much more proactively enforcing this than 
probably may have happened in the past demanding information. 
It is not enough for someone to say, hey, we are a rail 
carrier, trust us and stamp approved.
    So repeatedly if you ask, and most of the controversies you 
will hear about from panels today, please ask the question, did 
the controversial transload facility ever open and did the STB 
play a positive role in preventing it from opening, I think you 
will hear over and over again, whether it be Freehold or 
Croton-on-Hudson or other situations, actually the concerned 
controversial project never came into existence. So if 
something is working out there, but it would, of course, 
understandably drive local and State officials crazy, I 
understand it, is these folks can aggressively try to race 
forward and bluff everybody and say back off, we are railroad, 
you can't regulate it. Unfortunately, too many local 
governments and States back off and don't implement their 
police powers, and that is why I made sure in my testimony to 
talk about the very thoughtful New Jersey 2D regulations that I 
think specifically respect zoning and land use, but actually do 
provide thoughtful regulation. So this Board at least 
personally is not against healthy and robust amounts of State 
and local regulation.
    Mr. Shuster. Just so I understand, notification has only 
been occurring in the last several months?
    Mr. Nottingham. No. I think that might be unfair. And I 
will let my four colleagues who have a little more history 
address this. But I think it is fair to say we have much more 
aggressively questioned supposed railroads for more 
information, and very often they back off and retreat. It is 
interesting. They run for the hills, so to speak, and then they 
come back with the same attorneys a week later under a 
different name, which is what we have seen happen recently, and 
we again ask for all their information. So it is a real 
challenge.
    Mr. Shuster. When you shine the light on the cockroaches, 
they run away.
    Ms. Brown. Thank you. I have a question. Mr. Nottingham, 
how many rail solid waste transloading facilities are currently 
operating that are preempted from State and local environmental 
regulations?
    Mr. Nottingham. My understanding is we do not have that or 
keep that information at the Board. It is a question we get. We 
got that from the Wall Street Journal recently. It is a 
question we get very often. And we get most of our information 
on that, frankly, from trade associations that represent the 
waste business and through testimony we received at our long 
hearing on that one case up in New England. But my 
understanding is we do not have any detailed information or 
records on who out there--on any given day a rail facility 
today could stop carrying trash or start carrying trash and we 
might very well not know it.
    Ms. Brown. Mr. Mulvey, do you know the answer?
    Mr. Mulvey. I don't know the answer to that either. We do 
know, however, there has been a real uptick in the number of 
applications before us to construct these facilities. And we do 
know also that the MSW has become a growing and increasingly 
important commodity for railroads to carry. It is concentrated 
in the Northeast, but I don't have the number of facilities 
that are preempted in front of me, no, sorry.
    Ms. Brown. Mr. Nottingham, the STB stated in the New 
England transrail decision that the Federal preemption does not 
entirely preempt States' police powers such as ensuring that 
the railroad comply with certain health and safety rules. Using 
the recent New England transrail decision as an example, how 
would State police powers apply for solid waste transloading 
facilities?
    Mr. Nottingham. Thank you for that very important question. 
In my view those powers, let us face it, the police powers are 
some of the broadest powers we have in our country. What could 
be more powerful than the ability to go onto someone's property 
and protect public health and safety? It is the most 
fundamental, most powerful governmental power I can think of. 
It has been a mystery to me why more jurisdictions and States 
don't use it more aggressively. Some are learning. And I 
understand it is hard when you get sharp lawyers saying, hey, 
there are 19 reasons you can't touch our operation, and people 
think we are going to get sued and we are a small village or 
town. So I understand the challenge, but they are broad.
    First of all, fire inspection and compliance, code 
compliance, electrical, some of the things you heard today. We 
had a witness who came to our hearing from I believe a State 
entity saying we can't even regulate for fire code. And that is 
just not the case. And so the powers are broad. When you hear 
about these mountains or these eight stories high of trash, to 
me that is a police power concern about piles of trash possibly 
blowing over, falling over, catching on fire, and those 
operations ought to be regulated.
    Ms. Brown. Do you think the police, is that fire or is that 
environmental? I am concerned that we don't have a composite to 
know how many applications, who is applying on a daily basis. 
Do you have the staff to deal with the inspections and to 
process the applications? How many people do you actually have 
working in this area?
    Mr. Nottingham. Our staff is about 140 total. Of course 
they don't all work in this area. In the environmental area we 
probably have a small unit. I know we do. It is somewhere 
between six and 10 people, depending how broadly we expand. We 
bring in other people, too, so at any given time we can have 20 
people working on related issues from applications that come in 
and inspections. We do conduct field inspections.
    I am not here today asking for more staff, but I would be 
happy to have that conversation. We are not of course the front 
line police power investigator. That is and always should be 
the local government and supported and backed up by the State 
governments. We totally support that and think that should be, 
frankly, taken advantage of more often.
    And police powers is a very old legal concept. It is not 
just about the police department. But anything that is a 
pressing public safety problem that is playing out that can 
hurt somebody, you can pretty much come up with a police power 
reason to go visit that location and check into it and regulate 
it.
    Ms. Brown. Would you like to respond, Mr. Mulvey?
    Mr. Mulvey. The problem of course is that is why we are 
here today. It is not clear what powers the States actually 
have over these facilities which are preempted by ICCTA and the 
Interstate Commerce Act. So that is where I think we may need 
some clarification as to what the States and localities can do. 
Where does transportation begin and where do the police powers 
come into play in the public health and safety by controlling 
things like how high the trash can go and whether or not there 
are adequate provisions for the control of vermin and odors and 
the like.
    Ms. Brown. Mr. Buttrey, would you like to respond?
    Mr. Buttrey. Madam Chairwoman, I would agree with what the 
Chairman has said and what Mr. Mulvey has said. The Board is 
very vigilant in this area. We have assured Members of the 
Senate and Members of the House that we will continue that 
vigilance as time goes by. I can't speak for boards that will 
follow us. You will have to probably stay close to the 
situation when people follow us in these positions to make sure 
that they are enforcing the law. But I think Chairman 
Nottingham pointed out very eloquently that the police powers 
of the State, under the Constitution those powers are reserved 
for the States, and I would encourage localities around the 
country to be very vigilant about facilities that are proposed 
or that some may even try to go into operation without the 
proper approval, ours or anyone else's.
    State Authorities are the people on the scene, on the 
ground in those locations, and unfortunately we are not. We 
don't have that kind of staff and resources to do that, and we 
certainly depend on them. But I can tell you and I can assure 
you after having dealt with this issue for some number of 
months now that the three people sitting before you right now 
are going to make sure that to the extent that we have the 
authority to do so the public health and safety is going to be 
protected.
    Ms. Brown. Do you have a concern that we don't know how 
many operators have applied?
    Mr. Buttrey. We don't have that database at the Board. That 
would be something that the local communities, the Association 
of Counties, the cities, the Association of Mayors, other 
national organizations may have the ability to monitor. State 
legislatures may have the database available to them. We do 
not. We certainly have the information on the applications that 
have been presented to the Board for approval by institutions 
or organizations that want to engage in this activity, which I 
think we all agree is going to have to take place somewhere. We 
certainly know that and we keep up with that.
    We can certainly provide that for the record and would be 
happy to do so. But as far as having a database that tracks 
this sort of thing nationwide, we do not.
    Mr. Mulvey. I provide an attachment, Attachment B to my 
testimony, which does have the pending and recently decided STB 
cases involving MSW, but these are only the more recent ones. 
The first case that I dissented on when I came to the Board was 
one involving MSW and one I was very familiar with. It was 
extending a rail line into the Staten Island Fresh Kills 
Landfill. What we decided was that it was not a line of 
railroad, that it was a spur track so we didn't regulate it. 
But then we turned around and we preempted the States of New 
Jersey and New York from regulating it. Now, this is a case 
where there were important wetlands in the area and because of 
our ruling nobody was protecting them. This has been a problem 
for quite some time now and it is one that is growing.
    Ms. Brown. Thank you. Mr. Hall.
    Mr. Hall. Thank you, Madam Chair. No questions at this 
time. Thank you.
    Ms. Brown. Mr. LoBiondo.
    Mr. LoBiondo. Thank you. Just the one question for Chairman 
Nottingham. The STB has ruled that while State and local laws 
may be preempted, Federal laws, including environmental laws, 
must be harmonized, I think was the word that was used, with 
the ICC Termination Act. Can you tell me how the STB harmonizes 
overlapping Federal environmental laws and regulations?
    Mr. Nottingham. Well, I think the thinking there is that 
each Federal agency that has an area of expertise or is charged 
by statute with implementing certain public policies. For 
example, the EPA in many cases, and the STB on the interstate 
commerce side, needs to have its governing statutes and 
regulations apply. And also the harmonizer worked with the 
sister Federal agency to make sure that hopefully all the 
public policy goals that Congress envision in the statutes can 
proceed. In other words, in most cases there is no reason why--
in my mind, in every case there is no reason why a thoughtful, 
environmentally conscientious and safe rail facility can't 
advance and would advance the interstate commerce provisions of 
the act and, working with EPA, that EPA can do its job and 
protect the public from harm or health.
    So we do--it is not as if--the reason I made that point is 
sometimes you will hear that the Interstate Commerce 
Termination Act or the STB trumps all law. At the Federal 
level, it does not whatsoever. We work with our sister agencies 
to harmonize those laws and give each its full effect while 
trying to work to advance each agency's objectives.
    Mr. LoBiondo. Thank you.
    Ms. Brown. Mr. Bishop.
    Mr. Bishop. Thank you. Madam Chair, thank you very much for 
allowing me to participate in this hearing. Mr. Nottingham, I 
have a question for you.
    In your written testimony you indicate that the STB does 
not require a formal environmental review and does not impose 
specific environmental conditions. You also--I believe I heard 
you in response to Chairman Oberstar's questions arguing 
against the imposition of a local role with respect to 
environmental standards, and you are concerned about that 
becoming a zoning issue that the Federal Government has no role 
in.
    We have a situation in my district. The town supervisor and 
the town affected is going to testify on the next panel. We had 
a rail company purporting to conduct--I mean, construct a spur. 
And they claimed a Federal exemption when they did not have 
one. And by the way, the STB has involved themselves in this 
case. And you have issued a ruling which is very helpful, and I 
thank you for that. But before the STB became involved they 
clear-cut 20 acres of property and began a sand mining 
operation. Now, they did so in their view under the cover of a 
Federal exemption, and that Federal exemption by current law 
does not include the imposition of environmental standards or 
environmental conditions.
    If the Federal Government does not take that role and the 
local government is preempted from taking the role, how does a 
municipality, a local government, protect itself against the 
kind of unscrupulous behavior that we are clearly witnessing in 
our district on Long Island?
    Mr. Nottingham. A lot of good questions there, Congressman. 
And we have been spending quality time, I can assure you, 
focused on your district in the very case and controversy you 
mentioned. And that will be with us I expect for a little while 
as we play out the legal process that we are currently in the 
midst of.
    Our agency, as you mentioned, we have been proactive, 
responding in a matter of days as we learn the facts. I have to 
be careful because it is a pending case. I won't speak to the 
merits or demerits of the case. I will say that just in 
general, because you point out one example, it is in my view 
always unfortunate when a local government yields, no questions 
asked or with minimal questions, to a supposed railroad 
lawyer's statement that we have preemption, back off. Because 
in many cases we find out that is a bluff. What localities need 
to know is they can petition us for a declaratory order or they 
can go to court and get a declaratory order. They do not have 
to take some proposed railroad lawyer's word for it.
    Mr. Bishop. If I can just interrupt for a second. In the 
case in which we are discussing in my district, the activity 
began before the town was approached at all. And the activity, 
again, began under the cover of this presumed preemption. And 
so I guess my question is if the preemption, and I understand 
the reason for the preemption, but if it yields this kind of 
unintended consequence and yet the STB would take the position 
that we don't want to impose a local role with respect to rail 
facilities, there has to be some other governmental mechanism 
that would prevent this kind of outrageous behavior from taking 
place. Now, whether it is the EPA or some other governmental 
intervention, don't you agree that we have a situation that 
with all governmental agencies acting appropriately has yielded 
a result that is unacceptable? If that is the case under 
existing law, then we have to change existing law? Doesn't that 
just make sense?
    Mr. Nottingham. I agree with you that the status quo, the 
way these controversies have played out and the way local 
governments and neighbors have had some of their rights 
trampled, is not acceptable. There are a number of ways we can 
get on top. We are doing everything we can at the Board. I 
think Congress is well within your rights to play a strong role 
in this field. I do urge caution. Look at all the consequences, 
because we are all concerned about increased truck traffic and 
we are all concerned about the possibility of legitimate--
remember, for every one of these controversies there are 
probably 50 legitimate law abiding, environmentally 
conscientious railroad operators who handle some trash. It 
could be a little bit, it could be a fair amount, it could be 
in containers.
    But getting back to your question, earlier you mentioned 
that the Board provides no formal environmental review nor 
conditions. That is absolutely not the case, and I do want to 
correct that. In a number of proceedings and fact scenarios we 
can provide enormous, and we do, conditions; NEPA review, 
denial. But there are certain cases where you have an existing 
railroad who tries to say I am just improving my facility and 
taking on a new line of business called trash where there is 
not that automatic STB. Someone has got to petition us or a 
complaint has got to be filed.
    Mr. Bishop. I am almost out of time, but doesn't your 
written testimony say that the STB is not required to conduct 
environmental review or impose environmental conditions? I 
think what I heard you say is that you may impose them, but you 
are not required to, is that correct?
    Mr. Nottingham. I think my testimony references about three 
or four types of ways these cases and controversies come to us. 
In only one of those types do we not have a proactive, in 
advance, opportunity to look at the environmental issues and 
also put in conditions or denial. And that is when an existing 
railroad decides to take on trash for the first time and we 
don't know about it. So just there is a very minority, discrete 
area. In the vast majority of situations we have pretty broad 
authority.
    Again, localities, in answer to your question about 
somebody--I am not going to speak about the controversy in your 
district that is pending with us--but if in another place in 
the country someone were to run roughshod over a State's land 
use and other laws under the guise, ill-gotten guise and 
erroneous guise that there is some kind of a preempted 
railroad, there should be enormous State and local 
repercussions that come down on that. I would expect there 
would be fines, penalties, license revocations at the State and 
local level, all the things that you do if an apartment 
building operator just starts knocking down apartment buildings 
without a permit or anything else.
    Mr. Bishop. I thank you for that.
    Ms. Brown. Mr. Bishop, you can finish.
    Mr. Bishop. Thank you, Madam Chair. Mr. Mulvey, you wanted 
to comment on that.
    Mr. Mulvey. Well, we do have a Section on Environmental A 
nalysis, but it doesn't do the kind of inspections and the 
kinds of monitoring that a State environmental agency would do. 
What our group does is if they are constructing a new track or 
abandoning a track we make sure that that construction or 
abandonment is done in an environmentally sound manner. But we 
don't go in and actually inspect the way solid waste is handled 
and enforce State and local laws governing the processing and 
the handling of solid waste. Chairman Nottingham talked about a 
railroad taking on and building a track. Well, building a 
track, we would look at that, the way the track was built or 
the way the facility was built, to make sure it complied with 
effects on wetlands or whether an historical marker was moved. 
That is what our staff does. But our staff is not trained to 
monitor municipal solid waste activities as would be a State 
environmental agency.
    Mr. Bishop. Thank you, Madam Chair.
    Ms. Brown. Mr. Rahall.
    Mr. Rahall. Thank you, Madam Chair, and thank you, Board 
members, for being with us once again. My first question 
concerns the health and safety concerns. Are they not the same 
if the commodity was something other than solid waste, such as 
paint, cosmetics, LNG, ethanol, wine, gasoline, coal, nuclear 
materials, automobiles, et cetera, et cetera, et cetera?
    Mr. Nottingham. I am concerned that while trash might be 
high on the nuisance scale of most citizens, things you don't 
want to live or spend quality time around, boy, that list can 
be long when you really look at what goes on in our interstate 
rail system and you look at that we would depend on rail to 
move nuclear waste, to move hazardous waste, to move chemicals, 
pesticides, fertilizers. In the old days of course it was 
livestock, and a lot of early ICC cases are about, well, we 
can't live near the cow pen while the cows get loaded onto the 
railroad. There is some real concern that you will have bills 
every year, if not multiple bills peeling away at the 
importance of preemption in the Federal Interstate Commerce 
Act. In saying that, I do not suggest that State and local 
government shouldn't be given wide latitude to regulate in this 
area, but it has got to have a limit to it. And there should be 
some consideration of what rights a legitimate, honest railroad 
has if they become subject to unreasonable overregulation; 
i.e., you are not welcome in our community, go away, no matter 
how good you are.
    In the pending bill you will see there is really no 
recognition that there ought to be a safety valve or a way for 
a legitimate railroad, clean railroad to actually protect its 
rights. And that is really where many of my concerns lie.
    Mr. Rahall. Any others?
    Mr. Mulvey. Some of these, in fact, some of the ones you 
mentioned, like paint, for example, is in fact in the mix of 
the solid waste stream and in fact is one of the problems with 
some of the landfills and some of the storage. Paint has 
chemicals in it that can leach into the groundwater, et cetera, 
and cause problems. Others of the ones you mention are 
regulated by the Federal laws, like nuclear materials, et 
cetera. But there are a set of, unlike some of the other ones, 
like automobiles, for example, there are existing steps of 
State and local laws, especially State laws, aimed specifically 
at the solid waste stream. And it is one of those areas where, 
as I said before, the EPA has delegated the responsibility to 
the States to regulate.
    So MSW is somewhat unique from the other ones. But I do 
share your concern that we need to be very, very careful that 
this is not taken too far and winds up applying to things it 
should not apply to and thereby interferes with interstate 
commerce.
    Mr. Nottingham. Mr. Rahall, if I could just add one point 
that I think will be particularly of interest to you. I know 
where you come from, sir. I spent a lot of time with former 
Secretary Mineta when I was at Federal Highways helping improve 
your good highway network in your beautiful part of the world 
in West Virginia. This is not an academic discussion. We have 
battled communities in the U.S. Courts of Appeals in one large 
case related to the DM&E Railroad. The argument put forward was 
that the transportation of coal is such a, I'll paraphrase it, 
such a public problem that coal would move in commerce because 
we should get rid of coal as an energy source. That that new 
railroad_and we all want more rail competition, we spent 
quality time on that issue together in this room just a couple 
weeks ago_that that new railroad should be denied the right to 
enter the business because it was going to handle coal, because 
there was a supposed problem when our Nation's whole energy 
policy is premised that we are going to have a healthy amount 
of coal in play. And so thankfully we won that case, but it 
took years, it took thousands of man-hours, hundreds of 
thousands of taxpayer dollars to win that case and it was back 
and forth.
    And so that is just an example. This is not an academic 
discussion. You will have people thinking up any argument they 
can to just shut down a railroad. It will have competition 
implications, it will chase traffic onto the highways via 
trucks. And personally I am not one that enjoys sitting behind 
a trash truck on the interstate, as occasionally things 
unfortunately blow out, and I am pro transportation, I am pro 
truck transportation too, but given the choice I sure would 
rather see it loaded onto a railcar. I think right now only 10 
percent, we are told by some of the trade associations, 
actually moves by rail.
    Mr. Rahall. How are these local health and safety concerns 
addressed now?
    Mr. Nottingham. Well, it is somewhat--you have heard the 
word "patchwork" today earlier. It varies. Some of the 
jurisdictions you will hear from today deserve a lot of credit 
for being the most proactive. And they have given this a lot of 
thought. New Jersey in developing its, what I call the 2D 
regulations, which take into consideration that they are not 
going to zone out of existence just because something is 
unpopular in a community. But reasonable, in my personal view, 
regulations. Police powers. They can petition us. They can go 
to court. And in large measure the courts and the STB decisions 
have been very consistent. You won't see lots of disagreement--
because we are just reading statute. And Commissioner Mulvey 
mentioned legitimate public policy concerns that he has. But we 
have to be a little careful as decision makers of cases to not 
overemphasize public policy when we are interpreting statute, 
because the plain words mean something. The words are in 
statute; handling, storage. These are all things that many 
communities would like to see regulated out of existence. They 
don't want trash handled or stored or in many cases even to 
move in any way through their community.
    Mr. Rahall. Yes?
    Mr. Buttrey. Congressman Rahall, the Chairwoman I think was 
out of the room when the gentleman from Long Island was asking 
one of his questions. And he had asked the question well, how 
do you stop these people, unscrupulous people from engaging in 
these activities that happen to be near a railroad. And if he 
had asked me the question I think I would have suggested to him 
that some local sheriffs deputies with 9mm firearms out there 
at the gate would probably solve that problem until the United 
States Supreme Court had ruled on it, and they would sit there 
until they did. That would be what would happen in a community 
if I was concerned about it. That is exactly what I would do to 
stop it until the Federal Court--they are raising a Federal 
issue. It will be solved at the Federal level. It will be 
solved in the Federal Courts, the District Courts, the Courts 
of Appeals, the United States Supreme Court. And until the 
United States Supreme Court told me to remove those security 
guards, those public security guards that is exactly where they 
would stay until it settled. That is sort of the way we handle 
those things where I come from.
    Mr. Mulvey. There is also voluntary compliance. Most of the 
people who are involved in this, especially the existing 
railroads, are good corporate citizens, and they work with 
communities and they try to solve the problem. There is this 
whole issue of this regulatory gap. And I recall when I was 
working for the Committee we had a problem in Minnesota with a 
railroad that had a property where they were storing containers 
and they were stacking these containers very high. And the 
children in the area were playing in these containers and the 
local governments could not do anything about it because 
regulating what went on on that property was the jurisdiction 
of the STB. And we don't really have any laws regarding, rules 
regarding what they can do on these yards in these areas. But 
finally the community, working with the railroad, solved the 
problem, the containers were taken down, the community was 
satisfied. But it did take some public pressure and it did take 
voluntary compliance and the railroad eventually coming out as 
a good corporate citizen. And that is what we have to rely upon 
in some of these cases.
    Mr. Rahall. Thank you, Madam Chair. May I have permission 
to submit additional questions for the record?
    Ms. Brown. Yes, sir, you may. You know this is a very 
sensitive area and it is a balance, trying to come up with the 
adequate balance. I guess I have a couple of more questions.
    Can your staff, Mr. Chairman, conduct field inspections of 
solid waste transloading facilities? How frequently do they do 
that? And then any other members who would like to respond to 
that.
    Mr. Nottingham. Yes, we can. Yes, we do. We have been doing 
that with increasing frequency in the last year or so. But I 
don't want to overstate that. We typically do it upon 
complaint, we hear about a problem. And then we also check 
first with the local and State governments to see, hey, is 
there a need for someone else to inspect, have you been there? 
We recently sent staff, for example, to I think it is a 
community in New Jersey called Hainesport where there have been 
a lot of complaints that the local papers had picked up. The 
internet is a great thing, so we can now do what we couldn't do 
30 years ago probably which is quickly keep track of every 
local paper and put in some key words and hopefully keep up 
with some of the controversies, and we do do that. And when our 
staff got to the facility at question in Hainesport it turned 
out the State of New Jersey had been there frequently. There 
was not a problem. Unfortunately, there was a neighbor who 
didn't like living next door, and there is probably more to his 
perspective than I could ever offer today.
    But we do do inspections. We can. We are happy to do more. 
And if need be, we will redeploy more staff to do more. And if 
we have to, we will of course come to the Congress to talk 
about resources, but resources are not blocking our ability to 
inspect at this time.
    Ms. Brown. Mr. Buttrey, I would have a concern that we want 
the police to go in and lock down the facility. What I would 
hope that we would have in place before that point, we would 
have an organized way to stop a person before they get to that 
point. I mean we should have a procedure in place that we 
could, a review process or working with the local communities. 
And even though we have the greatest respect for everyone here, 
you know, Mr. Nottingham, how much I respect you, but the point 
is that just like me I am here today, it is important that we 
have a law in place that we can follow through a procedure. And 
of course I am a rail lover also. But the point--and I don't 
want this waste to be on trucks because that is even more 
dangerous to the community. So the question is what is the, I 
don't want to say balancing act, but what is the best way to do 
what we need to do and also protect the community?
    I don't know whether or not you have seen the bill that is 
moving forward. And I would like to know how it will affect 
you. Because the key is that we have the law in place. Because 
we are interchangeable. We are here today, may be gone 
tomorrow.
    Mr. Nottingham. Madam Chairman, thank you for the 
questions. First and foremost, I would urge anyone who cares 
about this area or practices in this area or local residents, 
states, local communities, take every advantage of the tools we 
currently have. Go to court and ask for an emergency injunction 
to stop a facility. Come to us, that would be my first piece of 
advice, and ask for an emergency declaratory order. We handle 
those. We turn them around quickly.
    Mr. Bishop mentioned that case that was literally 
unfolding. Within days we were basically able to shut that 
facility down. And it will be shut down until we are convinced 
that it is actually a legitimate rail operation that deserves 
preemption. And so you've got the STB, you have got the court 
system already there, and of course you do have the full 
panoply of police powers.
    But I understand. It is still a difficult situation because 
someone can wake up one day and find out that a business has 
bought a piece of rail line in their community and is talking 
about bringing in a trash transload facility. And it is not put 
up for referendum, there are processes that have to be 
followed. And it is understandably downright frustrating if you 
live in those areas. I do think some of the proposed--you 
mentioned the proposed legislation. Take a very good look at 
whether zoning and land use is spelled out and addressed in the 
pending bills and whether honest, clean railroads have an 
opportunity to be protected if there actually is an overreach. 
Those are the two missing things. The Senate bill actually does 
account for and recognize that they are not talking about 
zoning or giving zoning authority, which is a big improvement, 
I believe.
    Ms. Brown. Mr. Mulvey, do you want to respond to that?
    Mr. Mulvey. I agree with the Chairman on this issue. We 
need to make sure that the bills are very specific and are 
narrowly tailored so that they don't take into account zoning, 
for example.
    Ms. Brown. Mr. Shuster. 
    Mr. Shuster. What is your general sense of the awareness 
level out there with State and local governments to the fact 
that you don't displace all Federal agencies in what you do? Do 
you generally feel, I am sure you haven't really measured it, 
but what is your general sense--Mr. Buttrey, you have been on 
the Board I think the longest. What is your sense of that?
    Mr. Buttrey. Mr. Shuster, I think the awareness level is 
probably dangerously low. It concerns me how low it is. In 
fact, as I go out around the country occasionally to speak to 
groups who want to know about the Board and how we operate, I 
find out that this whole area of regulation and law is a very 
esoteric area. And people are unaware of the fact that they 
have this resource called the Surface Transportation Board to 
bring concerns to. We have a Consumer Advocacy Office that 
spends their days and probably some nights worrying about these 
concerns and dealing with these concerns that are brought to 
them.
    The health and safety area is one that I think there 
happens to be, whether we like it or not, and we don't like it, 
there happens to be some bad actors in this area. There are bad 
actors all around of one kind or another, and this area is not 
immune from that. Which goes to what the Congressman from Long 
Island was talking about; that people who are unscrupulous, who 
are bad actors will go out and start these activities without 
getting the proper approvals or authority to do so. And 
unfortunately we don't find out about it, the STB doesn't find 
out about it until it shows up in a newspaper article or until 
somebody makes a phone call or until some local county attorney 
or city attorney or maybe even someone from the Attorney 
General's office of the State calls up and says what in the 
world is going on here, these people are telling us that you 
authorized these activities, is that true? And unfortunately, 
and I hate to admit this, but unfortunately we don't know about 
every single one of these activities that are going on because 
by definition if these people are bad actors they are not going 
to come and get the proper approvals.
    Mr. Shuster. And sort of on the flip side of that, the 
general population isn't aware of these legal issues and 
wouldn't expect them in many cases?
    Mr. Buttrey. Right. And I don't want to give you the 
impression that I think all the people who are in this business 
are bad actors. They are obviously not. There are very 
reputable people in this business doing everything exactly 
right, but unfortunately that is not the case in every case.
    Mr. Shuster. Again the flip side, somewhere in the court 
system they should be very aware of this, how frequently or how 
often are they coming to you and referring to you an expert 
legal opinion on what you guys do at the Board? Is that 
happening? Are the courts doing that? Or are they just winging 
it out there and interpreting things the wrong way?
    Mr. Mulvey.
    Mr. Mulvey. As I said, we have a number of cases before us. 
And the courts often do defer to the Board. We are thought to 
have the expert opinion and the expert backgrounds on these 
issues. There are a couple of cases now where the courts have 
had this before them and the Court of Appeals has remanded a 
case recently to the District Court for reconsideration. It is 
an active area right now. And I think, as I said before, it is 
growing. We haven't had that many cases, but as I pointed out 
in my testimony, there has been a growing number of them and 
people do contact us and ask us what our authority is. Douglas 
talked about going around the country talking about the Board 
and what the Board does. And I can second that, that very often 
we talk to people who have shippers, rail shippers and don't 
know what the Board actually does or knows that they have this 
group available to them for assistance if they have a problem 
with a railroad. It never ceases to amaze me that we have not 
been more successful in getting out the word that you can come 
to the Board, you can get help from the Board, we can use our 
good offices to help shippers and others solve their problems.
    Mr. Shuster. And you used the word "often." Does that 
mean--it would seem to me common sense from a judge, and I got 
all these cases, many different, I would go to the experts. Is 
it happening a majority of the time? The courts coming to you?
    Mr. Mulvey. I couldn't really judge whether it is a 
majority of the time. Maybe, Chip, do you have a better sense 
of that?
    Mr. Nottingham. Just to give us sort of a quick overview 
how this looks as far as a litigation caseload perspective, we 
currently have three active cases with us now, actively with us 
now. One is right in Mr. Bishop's district. And the courts were 
probably tracking at any given time four, five, six or seven 
active cases or cases that are in some level of activity. One 
of the most prominent right now is the Third Circuit has sent 
back I believe to the Federal District Court a case involving 
the New York Susquehanna, looking at the New Jersey 2D regs 
that I spoke of. But we do--it is not unusual for a court to 
send parties back to us for a finding on what is transportation 
or commerce. But it doesn't happen every week.
    Mr. Shuster. In those three prominent cases have they come 
to you and said give us your expert opinion?
    Mr. Nottingham. Those I believe all came to us directly. In 
other words, people of course can bring, and we encourage, 
bring a petition for a declaratory order to us directly. But 
you have the courts there as well. And some people do either or 
both.
    Mr. Shuster. Thank you very much. I yield back.
    Ms. Brown. Mr. Hall.
    Mr. Hall. Thank you, Madam Chair. Mr. Nottingham, I just 
wanted to follow up on your comment to Mr. Bishop that the 
project in his district wouldn't go forward until the company 
had proven that they were actually a railroad business. And I 
am curious, I know it is something that is under consideration 
now and that you may not be able to comment directly on it, but 
what percentage of the time does the company eventually approve 
that they are a railroad business and eventually receive a 
permit for preemption?
    Mr. Nottingham. In my limited, about 14-month tenure at the 
Board I believe that in the majority of cases and controversies 
we have actually--through asking questions, through pursuing 
our regulatory oversight, we have actually seen the proposed 
project not go forward, which is a long way of saying you don't 
see the controversial trash transload facility opening. How 
many have actually opened after going through our procedures? 
Let me get back to the record when I say----
    Mr. Hall. My question is not whether they went forward, 
because unfortunately many of these businesses decide it is not 
profitable or they fold and go under, but how many receive the 
go-ahead from your agency?
    Mr. Nottingham. If I could, let me get back to you on the 
record because I want to make sure we get that right. The cases 
are all different. Some people come in and say, oh, I am just 
building an exempt spur, but we find out that they are based in 
one State 1,000 miles away and they have never done business in 
this new State and the whole spur exemption we presume has some 
meaning about building out your existing system, not five 
States over. So that is a very active area. But again I want to 
reiterate that nothing I have said today or will say today 
speaks to the merits or demerits of any pending case. Only 
because I don't want to recuse myself, although that would free 
up my schedule a lot.
    [Information follows:]

    [GRAPHIC] [TIFF OMITTED] T8517.008
    
    Mr. Hall. Right. In the case of Croton-on-Hudson there is a 
company that had 32 miles of track 300 miles away from the 
village and nonetheless was supplying for a--entered into a 
sublease for this little spur in the town of Croton-on-Hudson 
and was claiming preemption. It turned out that they didn't go 
into business either, but it wasn't because the Transportation 
Surface Board made a decision to prevent that. It was just the 
way things worked out, I assume businesswise. But in the 
meanwhile it cost the village $1.2 million in legal fees.
    Now, in the Hudson Valley, the 19th District of New York, 
one of the top issues that people are concerned about is 
property tax. And basically what this does is it forces a 
municipality to raise money in really the only way that they 
can raise it, which is by taxing their property owners to pay 
for legal fees. And in this case they are still facing the 
specter of another company coming in and trying to do the same 
thing and having another million dollars go out the door.
    I don't see this as a case where the police or court 
options that you spoke of before helped because they lost their 
court case. I don't believe that it is practical to expect a 
small town police force to sit with firearms at the entrance to 
the property, nor do I think that that is how we should resolve 
these issues in our supposedly civilized society.
    So the question really is isn't this a case in which there 
needs to be something other than harmonizing, which sounds to 
me like a softer version of mitigation. A transfer station, an 
incinerator of solid waste landfill in New York State has to go 
through an environmental quality review process that makes sure 
that the environment and the people are protected. And I don't 
hear from the existing law, the existing structure, that that 
exists.
    Mr. Nottingham. Mr. Hall, please know that we were actively 
monitoring the controversy in Croton-on-Hudson and we stood 
ready to get involved as the facts and case presented itself. I 
am glad that it was able to be resolved in a way to the town's 
liking. And I do regret, I think anyone would, that so much 
money would have been a trigger in the court costs, and that is 
a real problem. I don't know if any of the pending bills would 
stop those kind of disputes from arising and the court costs, 
but that is a problem.
    I will say, you raised property taxes as a concern, and I 
do think somewhere in here, and this Committee is probably the 
best Committee in the Congress to be able to keep an eye on the 
big picture, there are costs of course. There are costs of 
course that we all pay to handle our trash, and we all create 
it. We had a case, the New England Transrail case you will hear 
about later, where on the record a nonrail trash transload 
operator stated that it took 4-1/2 years to get a permit to go 
into business in Massachusetts. Now, there is a cost to that. 
And so we have got to find a balance here because we are going 
to be paying one way or another, whether it is increased truck 
traffic on the interstate wearing out our bridges, an issue of 
deep concern to this Committee, or whether it is increased cost 
to the consumer for handling trash. So just the idea of keeping 
all the costs and benefits before us is critical.
    Mr. Hall. I would agree with that. In closing, I would just 
say that I am not opposed to trash being moved by rail. I don't 
think anybody here is. But I do believe that there are some 
sites that--I mean the Bensalem testimony that we are going to 
hear in the next panel is one, for instance, where local 
concerns and local planning obviously run afoul of this 
particular site. I don't know what percentage of the time that 
happens.
    But anyway, I thank the Chair for allowing me to ask some 
questions and yield back.
    Ms. Brown. Thank you very much, panel. And I know that you 
will get additional questions. And is there any closing remarks 
that you would like to make?
    Mr. Nottingham. I would just say thank you, Madam Chair, 
for the time today and the thoughtful questions.
    Just quickly, we have heard Bensalem mentioned and you will 
hear about the Bensalem case. That is a case where the Board 
actually denied the project and stopped it. And so we do always 
try to keep track. There are controversies and then there are 
typically Board, very often Board denials and strong action. 
Please know this Board is very concerned about this issue. We 
are not here to say don't do anything, or everything is fine, 
because that is not the case. But do please be careful. Look at 
all the costs and benefits of the pending bills. And we stand 
by. We have not been asked to provide any technical assistance 
on any of the bills. We stand ready to do that in a completely 
straightforward, professional way. And any time you ask we will 
provide that assistance.
    Ms. Brown. Thank you. And I guess I would like to know how 
the amendment that is moving forward will affect what you all 
do that is going to be attached to my railroad safety bill 
tomorrow. I mean it has been made in order, so I would like to 
know your opinions.
    Mr. Nottingham. Because that is moving so quickly, 
tomorrow, I believe you said.
    Ms. Brown. It is not moving quick enough for me, but okay.
    Mr. Nottingham. Right. That is why I mentioned that a 
couple of times today, because we may not have the luxury of 
sending you something in U.S. mail. Of course we will deliver 
anything to you that you need. But let me just say real 
quickly, look at the provisions. It is a very short bill. There 
is a bridge and then the longest section of the bill that 
references regulation by any local, I believe I am paraphrasing 
here, I have got it in my notebook over behind, but any local 
or State agency. And I read that as including land use and 
zoning. Bring it on. And the real likelihood that you will see 
controversial projects stopped, not because of environmental 
concerns, but of more "not in my backyard" concerns. And I know 
that is not what the good witnesses you will hear today, 
because these are some of the more thoughtful leaders on this 
issue, have on their mind.
    I worry about the people that are not in the room today, 
the folks we have had to fight in the U.S. Court of Appeals who 
didn't want coal to move because they felt coal was a nuisance, 
and all of the other disputes that we will have. And please 
take a good look at the Senate compromise language that 
actually says we are not including zoning and land use here. 
That language is absent from the amendment, the Pallone 
amendment, that is pending.
    Thank you.
    Ms. Brown. Yes, sir. Would you please get me your comments 
in writing. And Mr. Mulvey, do you want to?
    Mr. Mulvey. I just want to thank you for having us here 
today. I agree with Chairman Nottingham. We need to be very, 
very careful. The Lautenberg bill does specifically mention 
zoning. I know that there have been changes in the Pallone bill 
which have been--we are not talking about not preempting 
transportation of solid waste, simply the handling of it. But I 
think looking at it carefully, making sure that we know what we 
are doing and we don't in any way impede the flow of commerce, 
which is not the purpose, it is to protect the public health 
and safety.
    With respect to Mr. Hall's concern about what the STB has 
done in certain cases recently, at the back of my testimony 
there are the 2007 cases that we have that have now been 
decided. There are five of them listed there. And you will see 
in four cases the project did not go forward. And the one case 
that went forward was an acquisition of one railroad by 
another, and that was not what we were looking into doing.
    Ms. Brown. I want to thank you again. Mr. Shuster, do you 
have any final remarks? I want to thank you very much for your 
informative testimony today. And we will be working together as 
we move forward in this process. Thank you very much.
    Panel III, will you please come forward?
    I want to say good morning. It is still morning. We have 
about 5 more minutes. Good morning. I am happy to introduce our 
second panel today. Our first witness is the Mayor, Gregory 
Schmidt, from the village of Croton-on-Hudson from the State of 
New York, is that correct?
    Mr. Schmidt. Madam Chair, yes, that is correct. I am Dr. 
Gregory Schmidt, and thank you for having me here today. I am 
the Mayor of the village of Croton-on-Hudson in the State of 
New York.
    Ms. Brown. Just one second. Let me finish introducing the 
other panelists and then we will get started.
    Our second witness is Mr. Joseph Pizzo, who is the City 
Solicitor for Bensalem, Pennsylvania. And our third witness is 
Mayor Kathy Chasey, from Mullica Township in New Jersey. And 
our fourth witness is Brian Foley, the Town Supervisor of 
Brookhaven, New York. And our final witness is from Freehold, 
New Jersey, Mrs. Barbara McMorrow.
    I would like to remind all of the witnesses that you have 5 
minutes. However, your entire written statement will appear in 
the record. And if you would like to make any corrections in 
those pronunciations of those names, you are welcome. The 
second person, you can correct this. I have a different person.
    Mr. Pizzo. Yes. It is Joseph Pizzo.
    Ms. Brown. Oh, that is right. Someone mentioned that the 
Mayor could not come.
    Mr. Pizzo. That is correct.
    Mr. Shuster. Madam Chair, I think that the staff is going 
to try to get a new name tag, so we don't screw it up.
    Ms. Brown. Okay. Thank you.
    Mr. Pizzo. My name is only slightly less difficult than 
Mayor DiGirolamo's.
    Ms. Brown. Mr. Bishop is going to introduce Mr. Foley 
first.

   TESTIMONY OF THE HON. GREGORY SCHMIDT, MAYOR, VILLAGE OF 
  CROTON-ON-HUDSON, NEW YORK; THE HON. JOSEPH W. PIZZO, CITY 
 SOLICITOR, TOWNSHIP OF BENSALEM, PENNSYLVANIA; THE HON. KATHY 
CHASEY, MAYOR, MULLICA TOWNSHIP, NEW JERSEY; THE HON. BRIAN X. 
  FOLEY, TOWN SUPERVISOR, BROOKHAVEN, NEW YORK; AND THE HON. 
       BARBARA McMORROW, FREEHOLDER, FREEHOLD, NEW JERSEY

    Mr. Bishop. Thank you very much, Madam Chair. And once 
again thank you for letting me participate in this hearing. It 
is my pleasure to welcome to Capitol Hill my friend and my 
partner and government supervisor, Brian Foley, of the town of 
Brookhaven, which is the largest town in the First District of 
New York. He has been an elected official on Long Island for a 
long time now. He has represented the Seventh Legislative 
District of Suffolk County since 1993.
    In 2005, he was elected to be the Supervisor of the town of 
Brookhaven, and since that time he has undertaken a very 
ambitious and I would say very successful reform agenda to turn 
around a great many serious problems that have existed in the 
town of Brookhaven for a long, long time. He has been a leader 
on environmental issues and a leader in preserving wetlands and 
open space.
    And it is with great pleasure that I welcome him here to 
Capitol Hill, and I look forward to his testimony.
    Ms. Brown. Now we will start with you, Mr. Mayor.
    Mr. Schmidt. Hi. I am Dr. Gregory Schmidt. I am the Mayor 
of the village of Croton-on-Hudson in New York. We are a small 
suburb in the northern part above New York City. We are about 
8,200 people, 4.5 square miles. And we find ourselves besieged 
with solid waste operators masquerading as railroads and 
abusing Federal law to prevent us from protecting the health 
and safety of our residents. We don't think that is what 
Congress had in mind when it created the STB.
    You have my testimony, but I am going to give a little 
brief synopsis of what has been going on in our community. Our 
situation involves a 10-acre parcel of land that is owned by 
Greentree Realty, whose primary owner belongs to the estate of 
an associate of the Genovese organized crime family. This piece 
of property has been used over many years for various things. 
But about 10 years ago, 1,600 feet of rail track was installed 
in order to load processed waste onto railcars which would then 
be disposed of. Solid waste companies are trying to use this 
1,600 feet of track to avoid State and local regulations, which 
are the privilege enjoyed by legitimate railroad companies. And 
again we don't think that is what Congress had in mind when it 
created the STB.
    About in year 2000, Greentree leased to a company called 
Metro Enviro. It is a private company. They operated a C&D 
transfer station under special permit from the village. They 
had an appalling compliance record over that time. They 
exceeded waste limits, they falsified records, they accepted 
unacceptable material at the site, and they failed to train 
their personnel.
    In 2003, the village ordered them to be shut down because 
of the violations of the special permit. In 2005, after 2-1/2 
years of litigation at the cost of three-quarters of a million 
dollars, the State's highest court finally upheld our decision 
and the facility closed. But then Greentree leased the property 
to NIR, Northeast Interchange Railway, which is not a railroad, 
just a waste handler. And they claimed that they were a 
railroad. And again 2-1/2 years of litigation between the 
village, Greentree and NIR.
    And finally, a New York State Supreme Court judge ruled 
that they couldn't open up without first obtaining a special 
permit from the village, ruling that the village has the right 
to impose conditions necessary to prevent harm to the community 
and to the environment. NIR attempted to evade this by going to 
the STB and filing notice of exemption. The STB--we challenged 
this. The STB finally ruled that they wanted more information 
on this. And we expected to see that application from the STB. 
It never occurred.
    Instead, what happened was NIR's attorney called us and 
told us there was a new entity on the block, BSOR, Buffalo 
Southern Railroad. They had subleased the property and claimed 
that all village authority was exempted by the ICCTA, 
Interstate Commerce Transportation Act, and they were filing a 
temporary restraining order against us in Federal Court. We had 
never heard of Buffalo Southern, and we found out that they 
were a rail company 300 miles away in Buffalo. And we were 
stymied when that Federal Court granted a primary injunction.
    So there is confusion out there in the courts as to what is 
supposed to happen with this. BSOR, Buffalo Southern, 
threatened massive operations of solid waste and other 
materials under the cover of being a railroad. The village 
would have no regulations over this, no enforcement whatsoever. 
But for business reasons that we don't understand, BSR 
disappeared from the scene. But the village fears are far from 
over. In negotiating with the owner to purchase the property, 
Greentree, the owner, keeps telling us that other railroads are 
in the wings ready to come in and take over this operation.
    I just want to say that the village, the County of 
Westchester and the State of New York have worked tirelessly 
for decades to remove the influence of organized crime from the 
waste industry, and we have been successful. This has resulted 
in a waste industry that is regulated on many different levels 
by local, county and State government. Allowing railroads or 
railroads masquerading as transfer stations to perform the 
handling of waste would completely undermine the gains we have 
made.
    Madam Chairman, our little village has spent $1.2 million 
defending ourselves in court from these solid waste operators 
who are disguised as railroads claiming Federal immunity from 
our control. We don't think that is what Congress had in mind 
when it created the STB, and we call upon Congress to correct 
that. Thank you.
    Ms. Brown. Thank you.
    Mr. Pizzo?
    Mr. Pizzo. Yes, good morning, Congresswoman and Ranking 
Member. My name, again, is Joseph Pizzo. I am the township 
solicitor for the Township of Bensalem, a community of some 
60,000 people, located in southeast Pennsylvania. We are 
located along the Delaware River, north of Philadelphia.
    I am here on behalf of our mayor, Joseph DiGirolamo. He 
thanks you for the opportunity to address the Committee, and he 
apologizes that he could not be here today when the hearing was 
rescheduled because of the passing of Congresswoman Davis, for 
whom we express our condolences to you all. His schedule would 
not allow him to be here today.
    His testimony, I believe, summarizes an issue that our 
township has been battling for several years now and goes back 
over many, many years of planning for our Delaware River 
Waterfront.
    What we have been confronted with for the past several 
years is the possible establishment of a construction 
demolition transfer facility along our Delaware River 
Waterfront in violation of numerous State, county and township 
regulations. We are a typical suburban community, but because 
of our unique location along the Delaware River, we have a rich 
history, dating back to the early days of our country. Names 
like Wharton, Biddle, Drexel and Bickley all lived along our 
riverfront, and their mansions still exist there today. 
Washington's troops camped along our Delaware Riverfront, and 
there are monuments to those brave soldiers there today.
    Because of our location on the Delaware River, during the 
19th century and the first half of the 20th century, industry 
located there; it thrived there. But in the latter half of the 
20th century, almost all of that industry moved out. It is 
virtually gone now, and that area of our riverfront lays 
fallow. But because of our location on the Delaware River, a 
renaissance is under way. Years of planning have led to a 
rebirth in this area, one that will give our river back to the 
people of Bensalem.
    As the mayor's written testimony sets out at length, there 
have been years of study involving our riverfront at the county 
level, at the township level and at the State level. And we 
have an opportunity today that might not come again for 
decades, if not centuries. Our leaders have tried to do it 
right. We sought input from businesses, from residents, from 
civic organizations. Committees were formed, they met, they put 
together plans, they put together proposals, one of which I 
have here, for the Bucks County Waterfront Revitalization Plan. 
Objectives were set out; means and methods to achieve those 
objectives were set out. And they are all contained in this 
plan and in our township open space plan and in our township 
comprehensive plan.
    Once this roadmap was made, the township went about doing 
what it said it was going to do. We created new zoning 
districts for our riverfront. Land was rezoned and acquired. $7 
million was invested in the cleanup of contaminated sites along 
our Delaware River that used to house industry, chemical plants 
and the like.
    Today, there is a plan on board to revitalize 40 acres of 
our riverfront. It would house 500 units of housing. It would 
house shops. It would house restaurants. It would have a 
marina. It is the linchpin of the redevelopment of the four 
miles of riverfront that we have.
    But let me tell you what is immediately going to be across 
the street from that site: the trash transfer station.
    It is projected, using their numbers that they submitted to 
the township, that up to 2,000 tons of construction and 
demolition debris a day would be traveling to that site, 7 days 
a week, 12 hours a day, from 6:00 a.m. to 6:00 p.m. How would 
it get there? By truck. Twenty six trucks per hour would be 
coming to that site, each carrying up to 10 tons of 
construction and demolition debris. The loading of that debris, 
once it is dumped at that site off of those trucks, would occur 
for 16 1/2 hours a day, from 4:00 a.m. in the morning until 
8:30 in the evening.
    By the way, if there are not enough railcars available or 
the dump that they intend to take it to cannot accommodate 
them, they are going to carry some of that waste back out of 
there by truck, up to 200 tons per day.
    That is what is going to be across the street from our 
river, less than 1,000 feet from it.
    These trucks have only one way in and one way out of this 
facility, a two-lane road, one way in each direction, called 
"State Road," a small State road that in no way can handle this 
kind of traffic.
    This facility has been turned down by the township. It has 
been turned down by our State Department of Environmental 
Protection for siting reasons, for siting reasons for a trash 
facility. It does not comply with our local zoning. It does not 
comply with our local land use. It does not comply with our 
vision for our township. It does not comply with State siting 
regulations. It does not fit at all. It just does not fit.
    It has been the subject of litigation at the zoning hearing 
board level, at our county common pleas court level, at our 
commonwealth appellate court level, and at our State 
Environmental Hearing Board. It runs completely contrary to 
everything that we have planned for this part of our township.
    We thought we had them on the run until this June. All of a 
sudden, the landscape changed, and all of our plans, if you 
will pardon the pun, were about to be derailed. A company 
called JP Rail, doing business as Southern Railroad Company of 
New Jersey, filed a verified Notice of Exemption with the 
Surface Transportation Board. We did not know what it was, but 
we knew it did not sound good, and we were right. In a 
nutshell, we were told that Southern Railroad was going to do 
an end-run around years and years of planning and numerous, 
numerous State, local and county regulations. We were told they 
could establish this facility, that all they had to say was, 
"We are a railroad, and we want to do it." If they could 
convince the STB of those two things, they could do it free and 
clear of any of our local land-use or zoning plans. If STB 
agreed, they would be allowed to locate and operate this 
facility, and we would be powerless to stop them or to even 
regulate any aspect of their regulation.
    I have heard talk today about health and safety police 
powers. Please, they are important, but it is of little solace 
to the people of our community if we have to tell them that, as 
to those 26 trash trucks an hour coming by your front doors 
into this facility, we cannot stop that, but rest assured, they 
are going to comply--they are going to have enough sprinklers 
in that building when they are dumping that trash in that 
building. Police powers are important, but the siting 
regulations, the land-use regulations are equally as important.
    As to the discussion about getting trucks off the street, 
again, these trucks are going to be coming to our facility from 
the five-county Philadelphia area, again, according to the 
hauler, using all of the interstate highways to get to our 
little corner of the world to then put it on railcars.
    Ms. Brown. Excuse me. Your time is up. We are going to have 
a question-and-answer period where you will be able to 
elaborate longer.
    Mr. Pizzo. Thank you.
    Ms. Brown. Did you want to make a closing statement?
    Mr. Pizzo. If I could----
    Ms. Brown. Yes, sir.
    Mr. Pizzo. --and I appreciate the opportunity.
    The fate of our community is, to some extent, in the hands 
of this austere body. Years of planning, years of thought, 
millions of dollars of investment, thousands of hours of 
planning and caring will have been spent for nothing if this 
facility can just, willy-nilly, on a moment's notice, come in 
and undo everything that we have done.
    On behalf of the citizens who I represent and the community 
I am proud to call home, thank you for your consideration of 
our plight.
    Ms. Brown. Thank you.
    Mr. Pizzo. Thank you.
    Ms. Brown. Ms. Chasey?
    Ms. Chasey. Thank you very much.
    I wish to thank Chairwoman Corrine Brown and the 
Subcommittee for allowing this hearing in order to document the 
need for a legislative fix to eliminate the 11-year loophole in 
the ICCTA regulations that allow the operations of unregulated 
solid-waste facilities.
    Mullica Township is 56 square miles, and we are located in 
the heart of the 1.1 million acres of the Pinelands National 
Preserve. There are 2,200 existing homes with 6,000 residents. 
We have no public sewer or water, thus are relying fully on 
personal wells and septic systems. Our tax ratables are 
compromised of 98 percent residential and 2 percent commercial.
    Although we have 10 miles of State highway Route 30 running 
through Mullica, we have no industrial parks, shopping centers, 
banks or even a strip mall. We also 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.
    As a member of the Atlantic County Solid Waste Advisory 
Committee, I am familiar with the procedure that the owner of a 
solid-waste company must follow in order to start up or to 
expand their operation, including the involvement of the State 
DEP, the local town and the County Freeholder Board. In 
Mullica's case, the starting point and added layer of the 
Pinelands 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. Imagine my shock in finding out there exists 
Federally exempted 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--no applications, no public involvement, 
no limits in regard to the number of trucks, tonnage or 
materials, including possible hazardous waste. These are 7-
days-a-week, 365-days-a-year operations with the ability to run 
24 hours a day without the obligations to the districts they 
reside in and without the normal and accepted permitting 
process it would afford their neighbors.
    As I learned about these sites and the laws that govern 
them, I realized quickly that this is not a local issue but a 
national one. If it could happen in my town, it can and does 
occur anywhere.
    In Mullica's case, the railroad company was to lease the 
property for $1 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 4 1/2 years, to build 
up over $1 million in unpaid 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 was find $199,000. According to 
DEP documents, he has frequently failed to comply with the 
conditions of his solid-waste permit. The DEP finally denied 
his permit renewal application, terminated his existing permit 
and revoked his authority to operate his solid-waste facility 
in 2005, but he retains his hauling license. This is the same 
individual who is to operate the Mullica transrail facility 
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 from any 
other towns up to that point. We were very lucky. Because we 
are 100 percent Pinelands, we had the full weight of the 
Pinelands Commission and the State's Attorney General's Office 
to deal with the legal strategy, along with our town solicitor 
and the Atlantic County legal staff. The fight took a great 
emotional toll on me, on our governing body and on the 
residents of our town, who, of course, had to bear the 
financial impact of this battle. I was personally named in the 
lawsuit the railroad company filed in Federal court regarding 
intergovernmental plans and the mayor's efforts to frustrate 
and to block the project.
    Our town has a successful story for this individual 
property. The railroad withdrew their complaint this year on 
March 26, 2007, and the judge signed a consent order 
permanently banning the construction of a solid-waste facility 
on this site. I made a promise that I would continue to do what 
I could to protect other towns from going through the horrors 
of these unregulated sites.
    Those of us seeking relief in the form of regulation, where 
these exempted operations are concerned, are not NIMBYs. We are 
not saying, "We do not 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. This is not about the railroad 
or the trucking industry. It is about a normally much-regulated 
industry and what happens when those regulations are not 
enforced consistently.
    With respect to solid waste, we are asking that laws be 
distributed fairly and without prejudice, that the solid-waste 
industry, as a whole, be required to operate in an 
environmentally responsible manner under State and local 
control. 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 laws. Although there have been a few 
encouraging court rulings regarding this exemption recently, 
they are expensive to achieve, site-specific and always open to 
appeal. The number of towns that are grappling with this 
problem are growing daily, and the protests of their residents 
are becoming louder.
    I am convinced that the only solution is a legislative one. 
We need clear and concise rules to implement, not a constantly 
changing interpretation of what is unreasonable interference 
and what is not. Please give us the tools we need to ensure the 
health and safety of our constituents and the ability to 
regulate solid-waste operations uniformly on a State and local 
level.
    Thank you.
    Ms. Brown. Mr. Foley?
    Mr. Foley. Thank you. Good afternoon, Chairwoman Brown, 
Ranking Member Shuster and honorable Members of the Committee. 
My name is Brian Foley. I am the elected supervisor of the Town 
of Brookhaven in our State of New York.
    Brookhaven is a town with approximately 484,000 residents 
located in Central Long Island. In my capacity as supervisor, I 
am on the front lines of land-use regulation and enforcement. 
Land-use, zoning and environmental controls are critical tools 
of preserving the local environment and the quality of life for 
the taxpayers of our town.
    I appreciate the Committee's allowing me to speak on the 
important topic of railroad preemption and its effect on local 
municipalities. The purpose of my testimony today is to speak 
in favor of the legislation that has been proposed to close the 
loophole that has been used to try and avoid State and local 
controls for the siting of waste facilities at railyards. I 
will supply the Committee will local newspaper accounts that 
describe in detail what has come to pass in the Town of 
Brookhaven.
    The area in question is a 28-acre site within the township. 
And in July of 2007, prior to the owner of the property 
invoking the shield of railroad preemption, this was an 
undeveloped, 28-acre parcel of land. Now, 18 acres of this site 
have been clearcut, and newspaper accounts indicate that over 
42,000 cubic feet of sand were mined without any environmental 
review under the National Environmental Policy Act or New 
York's State Environmental Quality Review Act.
    That is correct, ladies and gentlemen. There was no level 
of government, be it Federal, State or local, that had given 
any environmental approval for this work. The owners 
represented that they were exempt from local regulations and 
subject solely to the exclusive jurisdiction of the Federal 
Surface Transportation Board. And because of the uncertainty 
that currently exists in this area of Federal law, those 
representations were initially deemed to be credible. Yet, it 
was recently learned that they had never submitted their 
actions to the jurisdiction of the Surface Transportation 
Board. These same owners and individuals, therefore, have not 
filed the appropriate procedures to qualify for Federal 
preemption.
    However, the current climate of uncertainty has emboldened 
scrupulous operators and has led to the situation that the Town 
of Brookhaven now confronts. This uncertainty about the scope 
of Federal presumption has allowed alleged railroad operators 
to claim that Federal statute preempts all State and local laws 
that might apply to the construction rail facilities, no matter 
how attenuated they are from actual railroad operations.
    On Long Island, the "railroad" has traditionally meant our 
commuter railroad. We never envisioned that a company that 
adjoins a railroad and constructs a few hundred feet of 
railroad track could change itself into a waste-disposal 
facility that was free from all Federal, State and local 
environmental review and permitting requirements.
    These materials from a waste-disposal facility contain 
contaminants that can be harmful to the environment and to the 
public health. For that reason, State and local governments 
have adopted comprehensive regulations that govern the way 
waste can be processed, and they often impose ongoing 
monitoring requirements to ensure that the waste-disposal 
process does not cause harm to our environment or to the 
public's health.
    Solid waste has traditionally been in the domain of State 
and local governments. While Congress has adopted a legal 
framework for regulating solid waste, the Federal Government 
has never assumed a large role in this area, and as a result, 
there are very few Federal regulations that deal with solid-
waste transfer stations. Regulation in this area, rather, has 
been left to State and local governments, which have very ably 
filled this regulatory gap.
    For example, in the Town of Brookhaven, we have regulations 
that govern, among other things, the zoning and site plans for 
waste-transfer facilities in an attempt to ensure that they are 
sited in the appropriate places and that adequate mitigation 
measures are taken.
    Our role is also complemented by the New York State 
Department of Environmental Conservation Chapter 360 
regulations that review the environmental impacts of the 
operation of a transfer station. In the case of waste 
facilities that invoke railroad preemption, they claim to be 
governed by the Surface Transportation Board, a Federal agency 
that does not have any type of permit application or site 
selection process. Additionally, this board does not have the 
ability to conduct a meaningful environmental or health impact 
review or to ensure compliance with engineering or design 
standards. As I understand it, this board's staff is limited to 
no more than 150 employees by appropriation, and only a small 
number of these employees are responsible for conducting 
environmental reviews nationwide.
    So what has resulted? What has resulted is a regulatory gap 
that I do not believe was ever really intended, a gap that 
creates a situation where no level of government is policing 
the activities of these facilities that, by their very nature, 
pose significant risks to our environment. Given these risks, 
immediate and decisive actions are warranted by Congress.
    So, in conclusion, given the scarce resources of the 
Federal Government in this area and given the limited reach of 
Federal laws involving waste-transfer facilities, there must be 
a role for State and local governments in the area of 
regulating waste-transfer facilities. In almost all of the 
cases that I have seen or heard, including the situation that 
has evolved in my town, the rail activities are merely 
secondary, or incidental, to the primary business, which is the 
processing and the storage of solid waste.
    For that reason, I would respectfully urge you to adopt an 
amendment, the Interstate Commerce Commission Termination Act, 
to provide that rail facilities that process solid waste are 
not entitled to Federal preemption.
    Thank you.
    Ms. McMorrow. Madam Chairwoman and Members of the 
Subcommittee, thank you for the opportunity to speak on behalf 
of the residents of Monmouth County, New Jersey. I am Barbara 
McMorrow, an elected county freeholder.
    This spring, Ashland Railroad Company in Monmouth County 
applied to the Surface Transportation Board for an exemption to 
operate a solid-waste transfer station on previously abandoned 
railroad tracks adjacent to a stream and just a stone's throw 
from farms and homes. That stream, which parallels the train 
tracks, is a tributary of the Manasquan River, part of the 
watershed that comprises the drinking water for thousands of 
people. I was shocked to learn that a loophole in the law 
exists to allow railroad companies to operate solid-waste 
transfer stations without any regulation by State or local 
government.
    I joined Congressman Pallone, DEP Commissioner Lisa Jackson 
and State Senator Ellen Karcher in April to protest the 
application to operate this unregulated solid-waste transfer 
station and offered my support as a county elected official in 
this fight to protect our residents and our environment.
    I have closely followed the application filed by Ashland 
Railroad Company, learning as much as I could from our county 
solid-waste expert, Larry Zaayenga, and a great local citizen 
advocacy group, the Sludge Busters. We were together at a 
meeting in August when we learned that the Surface 
Transportation Board had dismissed the application of the 
Ashland Railroad Company to operate a solid-waste transfer 
station in Freehold Township.
    This temporary respite does not mean that our fight is 
over, because the Surface Transportation Board rejected without 
prejudice the application of Ashland Railroad. That means that 
Ashland Railroad can reapply using the lessons learned from 
their rejected application, can gain an exemption and can 
operate an unregulated solid-waste transfer station.
    Unlike our State law that requires the counties to include 
any solid-waste facility in its county solid-waste plan before 
any application is accepted by the New Jersey DEP, there is 
nothing in the law that would require the Surface 
Transportation Board to even notify the township or the county 
if Ashland Railroad resubmits an application. That means if any 
of us blink who are advocates for the people and the 
environment in Monmouth County, the opportunity to oppose this 
plan is missed.
    For your information, a regulated solid-waste station does 
exist without any problems just across the road from the 
proposed Ashland site.
    It appears that the Surface Transportation Board does not 
have the interest of our residents foremost. In July, the 
Surface Transportation Board ruled that railroads that load, 
unload, handle and store solid waste do not have to be 
regulated by State or local agencies. I believe that all solid 
waste must be regulated at the State and local levels, 
regardless of its proximity to railroad tracks.
    New Jersey has suffered greatly from this loophole. We have 
had solid-waste piles next to railroad tracks that have 
polluted the air, ground and water. These unregulated piles 
have grown so high that they have caused power blackouts. They 
emit arsenic and mercury, two dangerous chemicals that are 
otherwise strictly regulated under the law. These stations 
operate in open air with no building, so the chemicals and 
particulates are airborne, wreaking more havoc on residents and 
on the environment.
    Furthermore, property values surrounding an unregulated 
solid-waste transfer station plummet, while hundreds of trucks 
that will travel to and from these unregulated waste stations 
will cause additional pollution, hazards to the citizenry and 
damage to roads.
    New Jersey law requires all solid-waste transfer stations 
to be in closed buildings. If hazardous waste is detected, the 
buildings have to utilize negative airflow to protect the 
environment and citizens. Additionally, New Jersey law only 
allows solid waste to be at a transfer station for a maximum of 
24 hours. Unregulated solid-waste transfer stations, ones that 
are granted an exemption under the loophole in the law, can 
leave solid waste as long as they choose, allowing significant 
damage to the environment.
    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. I believe that 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 
that have a business connection to a rail company. We cannot 
allow hazardous waste to be unregulated due to a loophole in 
Federal law.
    How many Members of this Subcommittee would want to wake up 
one morning and find that they are living near an unregulated 
solid-waste transfer station? That could happen because of the 
loophole in this law. This is why I am before you today, to 
urge the passage of the Clean Railroads Act of 2007 and to 
preserve the integrity of the environment for our future 
generations.
    Thank you for allowing me this opportunity to address this 
Committee.
    Ms. Brown. Thank you all for your testimony.
    Mr. Shuster?
    Mr. Shuster. Thank you, Madam Chair.
    I think I said this earlier, I said it frequently, that I 
am not an attorney. But the attorneys tell me we need to make 
real certain that--most of you or, I think, all of you may have 
something pending before the STB or before the courts. Just be 
aware of the Pillsbury Doctrine, which I did not know about 
before today.
    The Pillsbury Doctrine says to subject an administrator to 
a search and an examination as to how and why you reached a 
decision in a case still pending before him and to criticize 
him for reaching the wrong decision sacrifices the appearance 
of impartiality.
    So be very careful, I think, of what you say, and I am 
going to be very careful of what I ask. I would not want to 
jeopardize anybody's case.
    I guess just a general question to all of you is--and I 
guess Mr. Pizzo is the only one whom I would guess would not 
want that transfer station there.
    Because you have a development going on. So for you guys, 
it is not a question of, "We want it to be regulated and 
properly administered." Yours is, "It screws up our whole 
economic development plan and causes serious problems to the 
development." Is that correct?
    Mr. Pizzo. That is absolutely correct. As some of the other 
members of the panel have said, this is not about the 
railroads. In our community in particular, we have had the 
Northeast Corridor, the range from Philadelphia to New York, 
since 1839. There are four or five sets of tracks that run 
right smack dab through the heart of our town. They have been 
there for 150 to 175 years. We have a good relationship with 
the railroads. Cornwall Heights station was in our community. 
We fought to keep an Amtrak stop there. We have one of the 
largest parking rights in the regions.
    This is not animus between the townships and the railroads. 
This is, we have a plan. We have laid out, as the law requires 
us to do, a zoning plan for the township, a comprehensive plan 
for the township. We have gone the extra step for this region, 
which, again, has laid barren and fallow and underused for all 
of these years. We said, this is what we are going to do to fix 
it and to clean up the contamination and to give it back to our 
people.
    Then literally in the middle of the night, something gets 
filed with the STB, and years of planning are all for naught, 
because these guys can operate a trash-transfer station there 
because they are affiliated with or purport to be a railroad, 
period.
    Mr. Shuster. Would any of the others like to comment?
    Would you allow it, Mr. Schmidt, in your case, if they were 
operating properly or----
    Mr. Schmidt. My community is also one of those communities 
that we have had a C&D transfer station in our community.
    Mr. Shuster. I am sorry. You have?
    Mr. Schmidt. We had one. We shut it down. I was elected 
because I fought to get that place closed down, and the reason 
why we are trying to get that closed down and end it is--let me 
paint you a picture of our community.
    We are Croton, and we are on the Hudson River. The Hudson 
River is a heritage river. Our entire western boundary is the 
Metro North train line that runs along the riverfront from New 
York City to Albany. Within those three miles of riverfront, we 
have a Superfund site that is an old county landfill that was 
operating for probably 40-plus years that is a Superfund site. 
It was Band-Aided; they put a cap over it to keep the rain from 
running through it, but it leaches out into the Hudson River 
all the time.
    We have Metro North, the railroad. They also have a 
railyard there. That is where they service a lot of their 
equipment. We already have that relationship with the railroad, 
in the sense that we know that they do certain operations out 
there that we have no control over, okay? They run diesel 
engines all night long because they have to keep them running 
in the wintertime. It is noisy in our community because of 
that. You can smell the diesel fumes throughout our community. 
We asked them politely if they can shut those things down 
whenever they can. They do the best they can to shut those 
down.
    They are in the process of a major capital improvement out 
there. They are rebuilding their entire facility out there. As 
a courtesy, they came to us and talked to us about what was 
going on out there. I understand we have no control of zoning 
rules and regulations, as to what they are doing out there.
    We also have a CSX switching yard along that riverfront. We 
already have commodities coming through our communities. 
Municipal solid waste in sealed cars that routinely come there 
are parked there for days before they are taken out.
    Completing the picture on our river and just up the road is 
Indian Point, a nuclear power plant, and I am sure you have 
heard controversy about that. Then just a little bit beyond 
that is Charles Point, the county incinerator.
    My little community, again, is 4.5 square miles. I feel 
like we have done our share. We have had these facilities in 
our backyard. That is not the only reason we want this shut 
down, but it is a part of the reason. I was elected to really 
protect my residents, and quality of life is what it is all 
about.
    We have a waste-transfer facility that operates in an 
adjacent community. It operates within the law and all that 
kind of stuff. The one that we had in our community operated by 
special permit. Even with those rules and regulations, even 
with their making millions of dollars a year, they still 
violated the permit because they accepted material that they 
were not supposed to accept at that facility.
    And anyone who thinks that C&D is an innocuous material has 
never looked in a dumpster that has come from a construction 
site. You have no idea what is in there, but we do know there 
is asbestos in there, because any building that is torn down 
that was built before the 1950s has asbestos in it. It has lead 
in it. There is possible mercury in it. Tires get in there. 
Refrigerators get in there. Compressors get in there, car 
parts, whatever. This has to be regulated.
    Mr. Shuster. My time has expired, so I would just like to--
all you can give me is a "yes" or "no," because the Chairwoman 
is going to move on.
    This is "yes" or "no." If they operate according to the 
laws of the State, are you willing to leave them there, "yes" 
or "no"?
    Ms. Chasey. If they operate as a regular solid-waste 
facility? Yes, I believe that is all we are asking for.
    Mr. Shuster. I am sure Mr. Bishop is going to ask you a 
question that you will be able to expound on, but just for me, 
"yes" or "no." If they operate properly, you do not want them 
there, "yes" or "no"?
    Mr. Foley. It is really not a "yes" or "no" answer. They 
have to abide by all appropriate local, county and State 
regulations.
    Mr. Shuster. Right.
    Mr. Foley. If they so do and if their siting in the 
appropriate location passes muster with all of the local 
regulations, as well as the State regulations, and if they go 
through that process--that is what we are saying. Go through 
the process, and if it passes muster through that process, they 
can then be sited at the appropriate place.
    Mr. Shuster. All right.
    Ms. McMorrow. At the location which I referred the Ashland 
Railroad Company, no, absolutely not. Other ones would have to 
be decided on a case-by-case basis if they were regulated.
    Mr. Shuster. Thank you very much.
    Ms. Brown. Mr. Bishop?
    Mr. Bishop. Thank you very much, Madam Chair.
    Supervisor Foley, I have a question for you. But first, let 
me thank you, on behalf of the constituents we both represent, 
for how quickly and how forcefully you have responded to the 
situation that exists in Yaphank.
    My question is this: Under normal circumstances, if a 
project were taking place in the Town of Brookhaven that was 
going to encompass some 18 to 20 acres--and pick the project: a 
subdivision, a senior citizens' facility--what kinds of 
environmental and site plan reviews would that project be 
subjected to?
    Mr. Foley. Thank you for the question, Congressman. I would 
also like to thank you for quickly interceding on our behalf 
with the Surface Transportation Board.
    Certainly, in our township, we spoke earlier about our time 
in office and that we are ones to try to encourage businesses 
to move into our town and the like, by virtue of the fact that 
we have almost half-a-million people. There are a number of, 
let's say, solid-waste issues and so forth. We are not saying 
no to railroads, nor are we saying no to these facilities. What 
we are saying is they have to go through the process.
    To answer your question more directly, if there is any 
large subdivision proposal for something in the neighborhood of 
28 to 30 acres, it goes through a whole regulatory review 
process. There is not an automatic "no" to it, nor is there an 
automatic "yes" to it. It is reviewed at staff level, both in 
the Planning Department as well as in our Building Department. 
It is reviewed by our Law Department, as well. Once it goes 
through that review process, it requires any kinds of 
variances. Then it would come before our Zoning Board of 
Appeals. Or, if, in fact, there is a change of zone that needs 
to be accomplished or at least attempted, then it comes before 
the town board. The town board has the power of reserve solely 
to itself for change of zones.
    So there is an involved process that one would undertake in 
order for, let's say, a 28- to 30-acre piece of land to be 
used, whether for business purposes or for residential 
purposes. There is a lot of oversight, a lot of review. I would 
not say that it is cumbersome. I think it is important, 
because, as was mentioned earlier, it is part and parcel of our 
responsibilities locally to ensure the quality of life for 
those particular communities.
    So I think that gives you a bit of an overview of some of 
the processes that would take place in our township and of the 
different departments that would review it. It does not mention 
the fact that the county health department would also be 
involved with this.
    But even with all of that said and given where we live, 
there are many businesses and residential proposals that still 
come our way. The regulations are there not necessarily to say 
"no" but more to have, let's say, transparency brought to the 
process and that, through transparency, there can be 
accountability, which is completely missing from the current 
situation as it relates to these Federal preemption laws.
    Mr. Bishop. I do not want to put words in your mouth, but 
what I hear you saying is, if there were a local role, that 
that local role would be undertaken in good faith with the 
recognition of the responsibilities that townships have for the 
disposal of their waste.
    Mr. Nottingham, in his testimony, he was saying that his 
fear was that, if there were a local role, we would be engaged 
in NIMBYism, and the local role would simply be an opportunity 
for the local government to say "no." You are saying that is 
not the case.
    Mr. Foley. That is definitely not the case. As a matter of 
fact, there is closer scrutiny of our zoning codes and the like 
when there are regulations regarding waste-transfer facilities. 
We realize that, you know, given the size of our township and 
given that we live on an island, that these are realities. But 
what we are saying is go through the process, go through the 
State process, go through the local process. If, in fact, a 
municipality would say "no" when regulations say otherwise, 
then we would be brought to court.
    I would like to, at some point, get to the point about this 
rather cavalier attitude of some, saying local governments can 
go to court to challenge these railroads.You know, with a 
municipality of my size, which is larger than any upstate city, 
we have the financial wherewithal to take these companies to 
court, but small municipalities in this country do not. And it 
is a rather intimidating situation of David versus Goliath.
    To answer your question directly, it is not an immediate 
"no." It goes through the regulatory process. If it passes 
muster through that process, then the answer will be "yes." If 
it does not pass muster through that regulatory process, which 
is very transparent and open for all to see and to scrutinize, 
then the answer would be "no."
    Mr. Bishop. Okay. Thank you very much.
    Thank you, Madam Chair.
    Ms. Brown. Thank you.
    Mr. LoBiondo?
    Mr. LoBiondo. Thank you.
    I just have one question for Mayor Chasey: What did it cost 
Mullica for this?
    Ms. Chasey. Mullica spent over $100,000. But that would 
have been close to $1 million if we did not have the State 
Attorney General's Office, legal counsel from the Pinelands 
Commission--and who else was involved?
    Mr. LoBiondo. What is your population again?
    Ms. Chasey. Our population is 6,000 people.
    Mr. LoBiondo. Pretty small.
    Thank you.
    Ms. Brown. Mayor Schmidt, who currently handles the solid 
waste coming out of your village? Do you have a preference for 
the transportation mode of train or trucks?
    Mr. Schmidt. The facility in our community was a C&D 
transfer station. You are asking about our waste that is 
generated in our community----
    Ms. Brown. Yes, sir.
    Mr. Schmidt. --and how that is handled?
    Ms. Brown. Yes.
    Mr. Schmidt. Throughout the entire County of Westchester, 
which we are a part of, all of our municipal solid waste is 
trucked to the county facility up at Charles Point, which is 
the county incinerator. That is where all municipal solid waste 
generated in the county is taken to. Some C&D also goes up 
there.
    Our issue, really, is with the C&D transfer station that 
existed within our community that a railroad is trying to come 
in and take over and to operate under the guise of being a 
railroad. That is what our issue is with the C&D transfer 
facility. Again, yes, all of the material is being trucked into 
this facility. It travels through our village streets to get to 
this facility, and then it is hauled out by railcars. That is 
how it was operating before.
    Ms. Brown. In your testimony, you stated that the Buffalo 
Southern Railroad cancelled its lease before it could begin the 
operation of hauling solid waste out of your village due to the 
problems faced by previous rail carriers attempting to start 
operation in the village.
    Why do you think that the interests are still there to try 
to use this facility?
    Mr. Schmidt. This is a very lucrative business, and that is 
one of my compelling arguments in here, that the county did an 
incredible job of getting the waste industry on a level playing 
field to make sure that everybody was playing at the same level 
so that it was a competitive market. If you allow somebody to 
come in under the guise of operating as a railroad to operate a 
facility with no local rules and regulations and not having 
them follow all of those steps to get there, they are going to 
undermine all of the other legitimate operators out there. 
That, I believe, is the most compelling reason for making sure 
that they have to play on the same field as everybody else.
    As far as I am concerned, the collection, sorting, 
processing of waste is a local, county and State 
responsibility. Once it is determined that that remaining waste 
is to be disposed of, at that point, it could be loaded on 
railcars and shipped out. Up until that point, it is a local 
responsibility. We have the ability to watch that. The county 
has the ability to watch that, and the State has the ability to 
watch that. The Federal Government does not have the ability to 
be there and to watch that.
    That is why we shut down the facility that was operating 
there. We gave them every opportunity. We gave them extension 
after extension when their permit expired. They kept violating 
and violating.
    It is a very lucrative business, and that is why they want 
to be in this business. It is worth millions. And the wrong 
people are using this loophole, and those are the people who 
use loopholes, the wrong people, to get in there. That is why 
we need to close this.
    Ms. Brown. Mr. Pizzo, did your area attempt to block the 
verification Notice of Exemption by the Southern Railroad 
Company of New Jersey that allowed them to develop the 
transloading facilities? What was the outcome of the effort?
    Mr. Pizzo. We were preparing to file with the STB when the 
STB, as the Chairman indicated during his testimony, of its own 
accord, rejected the petition for various deficiencies. They 
were rejected by the STB without prejudice to refile.
    So, much like in the case of one of the other panelists, we 
are essentially holding our breath, waiting for the day when 
that application is cleaned up, the T's are crossed and the I's 
are dotted, and it is refiled with the STB.
    Ms. Brown. Has the Southern Railroad Company of New Jersey 
attempted to work with the community in addressing your 
concerns? What has been the outcome of these efforts?
    Mr. Pizzo. I am glad you asked that question, particularly 
because, in response to Mr. Shuster's question, I did not want 
it to sound as though our township was taking a "not in our 
backyard" position.
    We have miles and miles of rail track in our township. We 
have an ample amount of heavily, industrially zoned property. 
If this sort of use came to one of those sites that were zoned 
for it, it would certainly be treated just like any other 
properly zoned and appropriately sited use.
    In this case, this land is not zoned for industry. It does 
not meet our township's siting requirements. It does not meet 
State siting requirements because of its proximity to a school.
    We had been dealing for 2 years with a company called HJH. 
They had come into the township as a trash operator, wanting to 
site a C&D facility there, and they were told, "It does not 
fit. This is not the site for it. It is not zoned for it. The 
land use does not work." Our State Department of Environmental 
Protection said the same thing: "under State siting regulations 
for a trash facility, this does not work at this location. You 
are going to have to fix it. You are going to have to move it, 
because you cannot put it there."
    They then went out, and our understanding is, based on the 
documents that were filed with the STB, they have made some 
arrangement between HJH and Southern Rail for Southern Rail, I 
guess, to buy the property and lease it back to the trash 
hauler--or there is some other arrangement--and thereby doing 
the end run around us. Two years of land-use planning, zoning 
and all of the legal requirements were met. And when they kept 
hitting a roadblock each way along the way because it did not 
work at that site, they then went, found a rail carrier and 
said, "Hey, let's do it this way. It is quick, it is fast, it 
is easy, and we are going to be in."
    Ms. Brown. But did you all try to block it?
    Mr. Pizzo. Again----
    Ms. Brown. You did not know about it?
    Mr. Pizzo. This was filed in June by a company we had never 
heard of. We had never heard of Southern Rail.
    Ms. Brown. I am trying to find the procedure here. Did you 
get a notice that this was going on?
    Mr. Pizzo. No.
    Ms. Brown. No notice to the community. So you were in no 
position to block it, because you did not know anything about 
it.
    Mr. Pizzo. We, fortunately, were notified by people here in 
Washington, D.C. They came to us and said, "By the way, do you 
know that this was filed for a piece of property in your 
township?" we otherwise had no idea. Many of us had no idea 
what the Surface Transportation Board was or what it did or how 
it functioned, because, in our little corner of the world, it 
really never came into play. The railroads and the township got 
along fine.
    Ms. Brown. Okay. So you did not try to block it. I am 
trying to find----
    Mr. Pizzo. No. We were preparing to. We were given notice 
that it was filed back in June. We were calling in the troops. 
We were ready to throw everything but the kitchen sink at it. 
The STB turned around and rejected the application----
    Ms. Brown. Okay.
    Mr. Pizzo. --because, on its face, it did not comply, I 
guess, with STB standards.
    Ms. Brown. So, in this case, the system worked?
    Mr. Pizzo. The system worked, but my understanding, 
Congresswoman--and it is only my understanding--is that they 
were bounced on technicalities, that their paperwork did not 
meet all of the requirements. It did not have the mile markers 
for the train tracks. It did not have a site map showing, you 
know, in different distances what was where. But they were not 
told, "Oh, no, you cannot go there because you are not a rail 
carrier." They were told, "Cross your T's, dot your I's and 
refile it." That is what they were told.
    So the system worked in that what they gave the STB was not 
what it should have been, but it does not stop them from 
cleaning up the paperwork, refiling it and going through that 
process. Believe me, you know, we have the horses ready to roll 
if something gets refiled again.
    Ms. Brown. Okay. They have just called for a vote, and so 
this is really, kind of, the end of this panel. I want to thank 
you all.
    Would anyone like to make brief closing remarks? We have 
four votes, and then we have the last panel.
    Yes, ma'am?
    Ms. Chasey. Can I just say something really quickly?
    When the STB was asked how many of these facilities exist, 
they will never have a count of how many of these facilities 
exist, because if there is an existing siting and an operating 
train, they do not have to make an application to the STB in 
order to put a solid-waste facility in there. The STB has no 
say in it. They can just set up and operate. You know, I think 
they have to get an exemption.
    Mr. Foley. Well, just on that note, too, I think what is 
also required is, if I might say, just as we asked for, let us 
say, improved intergovernmental interaction between ourselves 
and State government, I think, in this particular case, when 
there are cases that come before the STB, they should certainly 
notify local communities, number one, local governments.
    Number two, in the cases just mentioned by Ms. Chasey where 
there is, in fact, no notification to the Surface 
Transportation Board, there has to be some methodology that is 
developed through this legislation that would bring greater 
light to this area of Federal law and also greater light as to 
who and what the Surface Transportation Board is. I mean, you 
have a panel of folks here who, historically, because we are 
from the Northeast, have some of the oldest railroads in the 
country, and many of us are very pro-railroad. But I think what 
gets our dander up is when these loopholes are exploited that 
can potentially impact the health and welfare of our residents.
    So there has to be a way to try and bring not only more 
transparency to the process but to also develop a protocol, if 
you will, where the Surface Transportation Board has a more 
active role in working with localities about these things, not 
so much for us to automatically say no, but to make us aware of 
it. And then we can use our good auspices, along with the State 
government's and the Federal Government's, to see what is in 
the best interest of all concerned.
    At this point, I have been involved in politics and in 
government for over 25 years. The first time I ever heard of 
the Surface Transportation Board was no more than several 
months ago. You know, given the amount of railroads that we 
have in the Northeast and given, particularly in our case, that 
we would like to see more railroads because of the limited 
highways that we have on our island, I think this is now an 
opportunity for the Committee, if I may say so, along with the 
relevant Federal agencies, to step things up so there is 
greater interaction and so that we can see more use of the rail 
but in ways that are not injurious to local communities.
    Ms. Brown. Yes, ma'am?
    Ms. McMorrow. Yes, I would just like to say that I do not 
believe any of us is against railroads. In fact, I know that, 
in my county, we are very pro-railroad. We have a large 
commuting segment of our community that goes to New York every 
single day and uses our railroads. We also spend millions of 
dollars in our county for farmland preservation and open space.
    What I am most concerned about, as I mentioned before, is 
the notification process while we are working to hopefully, I 
beseech you, close this loophole. While we are waiting for that 
to happen, it is very important that somehow notification to 
local, county and State governments be put in place, so that, 
while we are all holding our breath on some of these 
reapplications, we at least will have the opportunity to once 
again speak up and be counted. If, in my case, the Ashland 
Railroad Company goes forward again, I would be able to once 
again rally the troops to stop it.
    Ms. Brown. We have to stand adjourned. We have only about 7 
minutes to vote.
    We do not have any more questions. So, if you have 
additional comments, I am going to let you put them in the 
record.
    We have about 25 minutes in which we will be voting, and 
then we will come back with the panel in about 30 minutes, at 
about 1:30 or 1:45. So I am going to dismiss this panel, and we 
will let the third panel come up when we come back.
    But if you have any additional comments, you can submit 
them into the record. We really appreciate your testimony, and 
we definitely will take it into consideration.
    Thank you very much.
    [Recess.]
    Ms. Brown. I am pleased to welcome the fourth panel, 
because another Committee is supposed to have this room at 
2:00, so we are going to see how it proceeds. But the first 
witness for this panel is Mr. Robert Jones, Managing Principal 
of New England Transrail. Our second witness is Mr. Thomas 
Marturano, Director of Natural Resources and Solid Waste of the 
New Jersey Meadowlands Commission. And our third witness is Mr. 
Wolfgang Skacel, Assistant Commissioner for the New Jersey 
Department of Environmental Protection.

  TESTIMONY OF ROBERT JONES, MANAGING PRINCIPAL, NEW ENGLAND 
TRANSRAIL, LLC; THOMAS MARTURANO, DIRECTOR OF NATURAL RESOURCES 
    AND SOLID WASTE, NEW JERSEY MEADOWLANDS COMMISSION; AND 
WOLFGANG SKACEL, ASSISTANT COMMISSIONER, NEW JERSEY DEPARTMENT 
                  OF ENVIRONMENTAL PROTECTION

    Ms. Brown. Thank you and welcome. Let me remind you to 
please limit your oral testimony to 5 minutes; however, your 
entire written statement will appear in the record. I now 
recognize Mr. Jones for your testimony. Mr. Jones.
    Mr. Jones. Thank you Madam Chair, Ranking Member Shuster, 
Members of the Subcommittee. My name is Rob Jones. I am 
managing member of New England Transrail, a company 
headquartered in Clifton, New Jersey. And I am very pleased to 
have the opportunity to testify at today's hearing. Thank you 
for inviting me to appear.
    Perhaps the biggest contribution I can make to the 
Subcommittee's examination today of the issue of railroad-owned 
solid waste transloading facilities is to explain our project 
and the effort that we have made to address the legal and 
practical issues that have come up. The benefit of that 
analysis may be especially useful if the Committee considers 
taking up legislation in this area.
    Transrail petitioned the Surface Transportation Board for 
authority to acquire and rehabilitate existing track, construct 
new track, and to operate as a rail carrier in Wilmington, 
Massachusetts. We also propose to build a state-of-the-art 
multicommodity transloading facility and to use the current 
best management practices for the operation of that facility. 
Attached to my testimony is a rendering of our proposal.
    Our railroad operation will transport a variety of 
commodities, including sand, gravel, plastic resins, plastic 
pellets, liquids, rock salt, aggregates, wood chips, coal fly 
ash, soda ash, liquified natural gas, corn sweeteners, 
vegetable oil, biofuels, coal, lumber, construction stone, 
sheet metal, cosmetic products and municipal solid waste, and 
construction and demolition debris. We will transport that rail 
traffic for about one mile, literally the last mile, and then 
interchange it with connecting carriers that will continue 
moving the commodity to its final destination.
    The concept of our proposed facility being what some refer 
to as "the last mile" is significant. As the Members of this 
Committee know very well, the last mile is a frequent missing 
element in transportation infrastructure. In our case the area 
where we propose to operate near Wilmington is underserved by 
rail providers, and we hope to provide the missing link.
    In recent years shortline railroads have found 
opportunities to provide quick, responsive customer service, 
often in underserved markets, providing transportation services 
that have largely been neglected by the larger Class I 
railroads. One of these markets is in the last-mile 
transportation of bulk; i.e., non-containerized solid waste. 
These facilities provide services to unload, sort, store and 
reload that commodity onto rail cars which are sent away from 
local communities on the interstate rail network. Handling and 
transporting trash by rail keeps it off the already congested 
streets and highways and provides a safer, more efficient way 
of getting the commodity to its final destination.
    The practice of receiving, unloading, sorting, storing and 
reloading is no different than the activities that railroads 
have been engaging in for more than a century under the 
jurisdiction of the ICC and later the Surface Transportation 
Board. The Federal Courts, and indeed the board itself, have 
repeatedly affirmed this position. Here it is the same process 
with simply a different commodity, nothing more.
    Under current law, the exclusive jurisdiction of the STB 
has limits; however, as the STB and the Federal courts have 
made clear, State and local health and safety laws are not and 
have never been preempted. In fact, the only State and local 
laws that are clearly preempted are economic regulations and 
State or local siting preclearance or permitting requirements 
that could be used to deny a railroad's ability to conduct its 
operations.
    In addition, Federal environmental laws must be harmonized 
with the jurisdiction of the board. That is the law as it 
stands today.
    It is very unfortunate that a few operators of transloading 
facilities have argued an overbroad interpretation of existing 
law to preclude enforcement of local health and safety 
requirements. That mistaken premise has taken on a life of its 
own and has ultimately led, I believe, to this hearing.
    Changing Federal law is not the answer to cleaning up the 
problems at a few transloading facilities, for one very simple 
reason. The power to clean up those facilities already exists 
at the State and local level.
    Let me offer a few suggestions that might benefit this 
Committee as it considers how to assist State and local 
authorities.
    First, the STB may need stronger oversight of transloading 
facility compliance with State and local rules and regulations. 
We believe the STB fully understands the problem and is already 
committed to that goal.
    Second, local enforcement authorities need to have a better 
understanding of their rights, of their legal rights to enforce 
health and safety laws.
    Finally, operators of these facilities need to recognize 
their responsibility to be good corporate citizens and to work 
with State and local authorities to reach reasonable 
accommodations.
    In closing, I would like to remind the Committee of the 
importance of preemption in the context of rail transportation. 
Members of this Committee have been strong supporters of 
preemption, because undoubtedly you recognize that the Federal 
Government relies on that principle to prevent patchwork 
regulation by the State and local authorities over rail 
transportation because it is essential to interstate commerce. 
Carving out a single commodity from the jurisdiction of the 
board is the first step towards such patchwork regulation.
    This Committee has not chosen to do that before and it is 
not appropriate now. If this Committee were to alter the 
board's jurisdiction, it will effectively prohibit companies 
like ours from constructing and operating transloading 
facilities capable of handling solid waste and many other 
products in the last mile of the interstate rail network.
    Thank you for the opportunity to appear before you today. I 
will be pleased to answer any questions.
    Ms. Brown. Mr. Marturano.
    Mr. Marturano. First of all, I thank the Committee for 
affording the New Jersey Meadowslands Commission an opportunity 
to address this critical issue.
    I am a professional engineer. I have been involved in the 
solid waste field my entire life. The solid waste industry is 
more from the old days when almost every town had its own dump, 
to now when large lined regional landfills or resource recovery 
plants process our waste in an environmentally responsible 
manner. This evolution has taken place at the State or local 
level because ultimately how much waste is generated per capita 
and where and how it is disposed of is a local decisions.
    Ms. Brown. Excuse me; will you pull your mike a little 
closer?
    Mr. Marturano. Recycling has profoundly impacted the per 
capita disposal rate and it has no Federal counterpart. In 
fact, the only real Federal regulation of most solid waste has 
to do with the large regional landfills and nothing pertaining 
to the handling processing or the transferring of the waste.
    The fact is most people in this room put their solid waste 
on the curb twice a week and it magically disappears. You don't 
give it a second thought because you know that some local 
government official knows where it is going and has planned for 
its disposal in an environmentally safe manner. There is no 
danger of you being named as a potentially responsible party. 
This system works well. It is efficient and everyone involved 
gets to sleep at night.
    Approximately 5 years ago this system started to unravel. 
In a two-mile stretch of track, five separate open dumps 
started to begin operating in my district. When most people 
look at the photos of these rail solid waste facilities, they 
think they are either 30 years old or that they are fake. It is 
inconceivable to most people today that, in today's enlightened 
environmental atmosphere, that anyone could think that dumping 
thousands of tons of waste on the ground could be acceptable. 
These open dumps were located in close proximity to warehouses, 
hotels, industries and sometimes residents that relied on the 
presence of consistent regulations to protect their investment 
in their property. Zero consideration was given to the local 
infrastructure ability to service these facilities. Yet when 
some caught fire, local first responders were called. We tried 
to reason with the operators, but to no avail.
    The NJMC and the DEP were left with no choice but to try 
and regulate the facility through litigation. It is only 
because of our regional planning agency that we have been 
moderately successful. The communities where you find these 
facilities do not have the resources to protect their residents 
in the court. Ultimately, we were successful in getting 
structures built so at least the waste was being dumped within 
a building. Unfortunately, because the railroad still insisted 
that they were answerable to no one in the State the structures 
were built without acknowledgment of the international building 
code. They did this even though they knew there had been 
several fires in the open dumps and there had been a major fire 
in one of the buildings--if there had been a major fire in one 
of the buildings any of the firemen would know that the 
building code requires all buildings of that size to have 
sprinkler systems which protect the structure, allowing first 
responders the time necessary to ensure that no one remained 
inside. No such protection existed and there were no defined 
fire engines for the workers inside.
    This disaster in waiting could have been avoided with a 
regulated facility. I realize that in the greater scheme of 
things before Congress, the handling of solid waste is 
relatively insignificant, and that is exactly the point. The 
proper regulation of solid waste cannot be done from afar. It 
is a daily on-the-ground endeavor. For the welfare of the 
people immediately surrounding the facility and for our 
environment it has to be done.
    Solid waste is not like coal, lumber, stone or sand. When 
these items show up at a rail transload facility, everyone 
knows exactly what is going to be off-loaded or dumped from 
those delivery trucks. The inspector of such a facility would 
see the same commodity being loaded, and loaded with numbing 
consistency. At a solid waste transloading facility not only is 
each day's material different, each load is different as well. 
Also unlike the other ones, no one--not the hauler, not the 
facility operator nor the railroad--knows what is about to be 
dumped out the back of that onto the tipping floor.
    In a regulated facility provisions are made for loads which 
are smoldering or contain hazardous waste. Likewise, an 
operational manual is prepared so that all employees know what 
to do and who to call in the event of a catastrophic load.
    I could go on and on what I have witnessed being dumped 
from a garbage truck. Instead, suffice it to say the reason I 
still do this after all these years is the beauty and challenge 
that comes from solid waste's infinite variability. It is a 
game of cat and mouse that can be played out at any time a 
generator or hauler tries to knowingly or unknowingly slip 
something by the regulators, and it is our job to prevent it.
    We are not opposed to the movement of solid waste by train. 
In fact the NJMC has undertaken proposals to move waste by 
barge, truck, and rail. Furthermore, the NJMC was one of the 
first planning agencies to specifically create an intermodal 
zone as part of our master plan. We just want the facilities to 
be properly permitted and regulated on an ongoing basis so as 
not to majorly impact the adjacent properties.
    As I think you are beginning to realize, this really has 
nothing to do with the rights of railroads. Those rights are 
not being questioned. Rather, it is about the long history of 
how solid waste is handled in our country and whether we can 
afford a new way of doing business in which nobody is watching.
    Ultimately, the success of a private solid waste facility 
is determined by its economics. As you can imagine with five 
facilities located within two miles of each other, the 
competition among them for waste is intense.
    Now, suppose that a load of demolition from an interior 
renovation shows up at a new facility. From the outside the 
load appears to be carpet, ceiling tile, sheetrock. Once 
dumped, it becomes apparent that the center load is comprised 
of the fluorescent light bulbs which were taken down as part of 
the renovation.
    What happens now? The operator is not equipped to segregate 
the waste and transport that waste by truck, nor is there money 
available to cover the cost of transporting the bulbs to a 
hazardous waste facility. My guess is that since there is no 
enforcement risk or risk of losing the nonexisting facility 
permit, the waste is loaded into the train car and no records 
exist that even indicate the bulbs were there. Neither the rail 
company nor the receiving landfill will know that the waste 
they accepted was more than just demolition waste. The only 
true loser in this scenario is the environment and several 
States.
    If the facility were regulated and permitted, the scenario 
is much less likely to recur because they would be subject to 
fines and possible revocation of the operating license. The 
risk outweighs the short-term financial gain. Not so in a 
facility that, in effect, regulates itself.
    Finally, I would like to comment on the economics of 
regulated versus nonregulated solid waste transfer facilities. 
The railroads have said that their main objective to being 
regulated at the local level is the economic consequence of 
regulation will make the facility noncompetitive. This 
conclusion is simply not supported by the facts.
    Within the same two miles that we have the five separate 
dumps, we have a fully licensed transfer facility that 
transports waste by truck. The only significant difference from 
this facility and the permitted rail facility is, in one case, 
the waste travels from the western landfill by truck carrying 
22 to 24 tons, and the other travels in 100-ton rail cars. Both 
sides of this debate stipulate that it more economical to ship 
waste by rail versus a truck. Therefore, assuming the cost to 
build a fully permitted transfer station versus a fully 
permitted transrail facility are equal, the transrail will 
always be the cheaper alternative to delivering the waste to a 
landfill.
    We are presented with the unique opportunity to resolve 
this problem before solid waste processors across the country 
decide to get off the fence and join the small but growing 
number in the Northeast who are trying to establish this new 
unregulated way of doing business. After all, why submit to the 
bother of following rules when you don't have to?
    Hopefully this issue can be resolved with the legislative 
clarification. Thank you.
    Ms. Brown. Mr. Skacel.
    Mr. Skacel. Thank you, Chairwoman Brown and Members of the 
Committee, for inviting New Jersey to testify on rail-
affiliated solid waste transfer facilities. In our efforts to 
ensure safe operation of these facilities I would also like to 
thank Congressman Pallone for his leadership by bringing 
attention to the severe environmental and public health impacts 
of railroad-owned solid waste transload facilities.
    My name is Wolfgang Skacel and I am the Assistant 
Commissioner for Compliance and Enforcement at the New Jersey 
Department of Environmental Protection. New Jersey supports the 
movement of solid waste by rail, which reduces traffic 
congestion, fuel consumption, and air emissions from diesel 
trucks. But these environmental benefits must and can be had 
without the current harmful impacts of an unbridled industry 
that threatens to return us to an era of open waste dumps.
    New Jersey has the highest number of Superfund sites in the 
Nation and is still recovering from a legacy of indiscriminate 
dumping of waste and the influence of criminal elements in the 
waste business. Consistent with Congress' proclamation in RCRA, 
the Resource Conservation and Recovery Act, that solid waste 
management is primarily the responsibilities of the State, New 
Jersey implements and enforces a strong solid waste management 
program. Our goals have been to prevent the routine creation of 
new contaminated sites, to ensure the use of environmental 
controls at waste operations, and to exclude entities with 
organized crime connections, disqualifying felony convictions 
or poor environmental compliance histories from the industry.
    I just need to note for a minute that you heard earlier 
testimony about some of the entities that have been showing up 
at various sites. Well, we deal with the same entities. And 
when we knock them out of the business it is amazing how they 
show up as railroad sites. Our progress has been threatened by 
waste operators and railroads abusing the preemption provision 
of ICCTA, the Interstate Commerce Commission Termination Act, 
by claiming they are exempt from all State and local law, 
including vital public health and environmental regulations.
    State health safety and environmental laws, however, are 
often the only safeguards against harmful pollution to our 
water, air, and land resources caused by the mismanagement of 
solid waste.
    Railroads are taking us a step backwards in environmental 
protection. Waste is not innocuous. Construction and demo 
debris, for example, can contain any number of hazardous, 
toxic, or even radioactive materials such as copper and arsenic 
and building lumber, mercury in light bulbs, lead paint, 
pesticides, PCBs and sealants and adhesives, asbestos in 
insulation, roofing and siding materials.
    Think of the myriad of environmental and quality-of-life 
impacts that the unregulated handling of such waste can cause 
in a neighborhood of your constituents. The STB simply does not 
have the expertise, staff or regulatory tools available to 
properly regulate the waste industry or to address the many 
serious consequences of mismanaging solid waste.
    I have 150 people in the Department of Environmental 
Protection that are devoted to dealing with solid waste. You 
have 150 people in the Surface Transportation Board to deal 
with all of the Surface Transportation Board's issues. You are 
not able to do the job with that kind of staffing. More 
importantly, the Surface Transportation Board has no regulatory 
authority over the ancillary facilities once the railroad is 
established.
    You asked a question earlier from the Chairman of the STB 
how many rail facilities are there. In New Jersey there were 
four that were shut down. There are currently 12 that are 
operating and there are eight more that are proposed. A lion's 
share of these facilities are right here in New Jersey.
    Leaving the recognized rail carriers to their own devices 
has proven to be dangerous because as railroads argue, they are 
free to operate open waste dumps. And they have. As shown in 
the photographs we have prepared, a handful of waste facilities 
actually dumped, sorted, processed and transferred garbage out 
in the open air. The open-air operations and even operations 
enclosed by walls and a roof have allowed clouds of 
contaminated dust to blow off site, pump leachate into 
adjoining wetlands, short-circuited transmission lines, caused 
fire and a roof collapse, and allowed contaminated storm water 
runoff to seep into the ground and reach ground surface waters 
of New Jersey.
    To protect against these problems, New Jersey adopted 
regulations that set forth basic measures to protect against 
hazardous dust from polluting our air, toxic metals and 
chemicals from contaminating drinking water supplies, wetlands 
and other important natural resources from being wantonly 
destroyed, rats and other vermin from being attracted, and 
increased risk of fire from endangering our citizens, nearby 
businesses, and community assets.
    All waste transfer in New Jersey must meet these same 
standards and more. Yet under the broad claims of preemption, 
railroads have resisted even these minimum operating standards. 
Those are commonly referred to as the 2D standards, broadly 
challenging the State's authority to enforce State solid waste 
in any State law. But solid waste management has always been 
and continues to be the State's responsibility.
    What we now ask is for your help in recognizing this 
primary responsibility of the States and affirming the State's 
authority to regulate solid waste activities and to address the 
problems attendant with waste management.
    I thank the Committee for its continued interest in this 
effort on this pressing issue, and request that the Committee 
continue to keep the testimony open so that we can submit 
additional testimony at a later date. I am also happy to answer 
any questions you may have. Thank you.
    Ms. Brown. Thank you.
    Mr. Shuster.
    Mr. Shuster. Thank you. Mr. Skacel, is that right?
    Mr. Skacel. Skacel.
    Mr. Shuster. Skacel, thank you.
    The permitting process in New Jersey, you described it a 
little bit. Can you talk a little bit what actually has to be 
filed and the cost to somebody filing that?
    Mr. Skacel. It is essentially a two-phase process. The 
first phase begins with a county plan inclusion. And the second 
phase is to actually file a permit application, have it 
reviewed and approved. The approximate cost, I do not know what 
the cost for a county plan inclusion is. I guess it would vary 
by county. Approximate application, depending on the nature of 
the facility and the size of the facility, assuming the largest 
facility for solid waste, you are probably talking in the 
neighborhood of $100,000 permit application fee.
    Mr. Shuster. And does the New Jersey Department of 
Environmental Protection have a stated policy on the hauling of 
waste? Would you rather see more of it go towards trains moving 
it, or trucks, or no preference? How do you view that?
    Mr. Skacel. We are certainly in favor of moving waste by 
rail. The issue is not moving the waste by rail. The issue is 
the nature and the way these facilities are operated in New 
Jersey. The issue isn't the railroad. The issue is really the 
operators that set themselves up, that align themselves as 
railroad facilities. The railroads just don't seem to be able 
to have any sort of control over their operations.
    Mr. Shuster. Did you want to say something, Mr. Marturano?
    Mr. Marturano. The only thing I would say is one of the 
ways you qualify for preemption is if you are an actual rail 
facility. We heard that from the STB. Obviously, those five 
facilities within two miles of each other, they are not all 
rail facilities, they were never rail facilities. Each one was 
operated by an individual hauler under the guise of being a 
rail facility. They were never rail facilities, they should 
never have qualified for even a hint of preemption. What 
company of any kind would put five distinct facilities within 
two miles of each other if you really and truly owned all five 
of them? It was a charade from the beginning, it is still a 
charade that goes on today.
    Mr. Shuster. Has the STB involved itself in those five 
facilities that you know of?
    Mr. Marturano. Not that I am aware of, no.
    Mr. Shuster. Do you believe--earlier we heard members of 
the STB talk about notification. Do you believe that would help 
solve a lot of the problems, if people had put notice in the 
STB that they were going to do this and sort of shed light on 
their operation?
    Mr. Marturano. No, I don't believe it would matter one bit. 
Because all five of these facilities popped up when the STB's 
powers were in effect. The NYS&W Railroad felt it didn't need 
to notify the STB or anyone that they were starting these 
transload operations, even though as you see from these 
pictures it was literally dumping garbage on the ground, 
because it was no different than had it been lumber. It could 
have been a lumberyard, so therefore they don't need to go to 
STB to open a new lumber yard. We don't need to go to STB to 
dump 5,000 yards of waste on the ground and start putting it 
into gondolas.
    It is just not apples and apples. Garbage is never a 
commodity, it was never a commodity. Those other things that 
the rail hauled, those are commodities. People worry about 
losing them. Look at the pictures of these cars as they go in 
the rail cars. They are heaped above the water line of the 
cars. They are heaped that way because if you follow the rail 
lines you will find the waste falling off these cars. They 
refuse to tarp them because, as you move, you lose some of it. 
And when you get to the other end, you pay less to dispose of 
it because you lost some of it along the way.
    I can take you to rail lines right now in New Jersey that 
have debris littering the sides of those rail lines from 
people--and not all operators are the same--overzealous 
operators who top these things with the hope that the vibration 
will send some of the waste over the side. They gain 
economically by thwarting the environmental issue.
    And that is what has been at the crux of this from the very 
beginning. It is a way around doing what you should do. There 
are perfectly legitimate rail operators out there that handle 
the waste legitimately and in an environmentally conscious way. 
That is what we should be encouraging, not this.
    Mr. Shuster. Mr. Jones, I understand that you filed an 
appeal with the United States First Circuit Court. Someone is 
shaking their head; is that accurate?
    Mr. Jones. That is not us.
    Mr. Shuster. Okay. It must be a different company. Are you 
a railroad?
    Mr. Jones. We have an application, a petition pending 
before the Surface Transportation Board right now to become a 
railroad in Wilmington, Massachusetts.
    Mr. Shuster. What will you have to do going through that 
process to become a railroad? Do you own locomotives?
    Mr. Jones. We do not. As soon as we are provided with the 
authority to operate, we will procure locomotives and rail cars 
and other machinery that would be required.
    Mr. Shuster. So presently, no locomotives?
    Mr. Jones. That is a massive investment to make without 
having the operating authority.
    Mr. Shuster. Are you actually operating now as a rail 
transfer station?
    Mr. Jones. No. I have in the past been involved in those 
kinds of developments. Most notably there is one in Newark, New 
Jersey that is up and operating right now. It is owned by 
Canadian Pacific.
    Mr. Shuster. Canadian Pacific is operating that?
    Mr. Jones. They are indeed. They use a contract operator.
    Mr. Shuster. How does that facility operate in Newark, New 
Jersey, Mr. Marturano?
    Mr. Marturano. Well, again, this goes back to that issue: 
Is a contract operator who used to be a hauler, is that the 
same as a railroad operating the facility? That is the question 
that somebody has got to answer, because that is the scam that 
is being done. You hire people--and that was our case in North 
Bergen. They are all haulers, some of them which have been 
debarred from operating in some states. They are all haulers. 
They got in, they started operating again. That is not a rail 
operator. Just because you sign a piece of paper, you hire an 
old hauler, now he is suddenly a railroad employee. That is 
ridiculous. But that is the scam that has been perpetrated here 
is that you hire these people and then all of a sudden they 
became a railroad. And they are covered under the same umbrella 
that the legitimate rails like Canadian Pacific and all the 
real legitimate ones. They should be protected. No one doubts 
that.
    But don't give an umbrella to somebody who has a fleet of 
trucks that he picks up garbage; was a railroad that doesn't 
own any piece of railroad equipment in his life, and all of a 
sudden he is a railroad, because you signed a piece of paper 
saying they will now act as my agent. No, that is ridiculous.
    Mr. Shuster. Thank you. I see my time has expired.
    Ms. Brown. Mr. Jones, in your testimony you stated that 
local health and safety laws are not and have never been 
preempted. Yet, today I have heard a number of examples where 
railroads are clearly violating State and local health and 
safety laws without repercussions. Can you better explain what 
laws you are referring to and why they are not enforced through 
previous examples?
    Mr. Jones. Yes ma'am. We believe that there has been an 
overbroad interpretation by some of these folks that are 
calling themselves railroads to get around having to comply 
with local and State regulations. It is spelled out very 
clearly in the law that if it is health- and safety-related, 
the railroads have to comply just like anybody else does.
    That trash mountain that showed up at the facilities Mr. 
Marturano just described, the States are fully empowered to go 
out there and shut that down on day one. As a matter of fact, 
that kind of operation should never have come into existence in 
the first place. And they only came into existence because they 
have used the notice of exemption proceeding.
    Whereas the Surface Transportation Board and all of the 
localities that govern these types of facilities, or the 
localities in which they intend to exist, they don't find out 
about it until after the fact.
    Ms. Brown. Mr. Jones, I think you have a picture that you 
want to put up.
    Mr. Jones. Yes ma'am I have several. I mentioned----
    Ms. Brown. Mr. Shuster, if you take a look at this, I think 
this is the site in New Jersey. Will you all take a look at 
this. Where is this picture here; where is that?
    Mr. Jones. That picture is of New York and Susquehanna rail 
yard in North Bergen, New Jersey. That is the infamous trash 
mountain that Mr. Lautenberg spoke about this morning. As you 
can see, it is on open ground, it is open air, it is exposed to 
the potential for fires. You got power lines running across the 
top of it. That is something that should have never come into 
existence.
    Ms. Brown. Now, what kind of permit does this have?
    Mr. Jones. I believe they did that with a notice of 
exemption, being an existing railroad. Unlike someone like us, 
we could never create anything like that, because we would be a 
new build railroad, and we had to apply under a different 
proceeding, the petition proceeding, which was accompanied by 
an environmental review, an up-front environmental review. So 
there was no potential for us to sneak through in the dark of 
night. Everybody knew what we were doing on day one.
    Ms. Brown. Mr. Skacel, would you like to respond?
    Mr. Skacel. Just to clarify, there was no notice of 
exemption. This is an existing railroad. New York Susquehanna 
and Western operated this. They simply decided we are going to 
set up this operation. There was no requirement for notice or 
anything else to the Surface Transportation Board. And I think 
the one point that I consistently hear almost as a common theme 
throughout all this testimony is we talk about health and 
safety. There is another factor here that we are not covering, 
and I heard it in Congressman Shuster's opening remarks as 
well. We talked about fire code, electrical code, building 
code, plumbing code. What about the environment? Where is the 
code that protects the environment? And throughout this entire 
process there is no reference to the environment. And that is 
what this issue has been about all along.
    Mr. Jones points to the Canadian Pacific facility in 
Newark. If we were to see a picture of that facility, you would 
see that that facility doesn't have air pollution controls. It 
has what they refer to as a misting system where the theory is, 
if you create enough mist, the particles become so heavy that 
everything will fall to the ground. If you are lucky it falls 
within the facility. Most of the time it is a wind tunnel 
effect. It blows right out of that facility and onto the ground 
and into the environment.
    Again, there are insufficient controls. And why are there 
insufficient controls? Because the Surface Transportation Board 
is not requiring it, and we are unable to require anything 
further.
    Ms. Brown. We have about 5 more minutes before we have to 
get out of this room. I think I did have one thing.
    Mr. Jones. We can't get our computer equipment to work 
properly here. There we go. But we do have a rendering of what 
we are building in the state of Massachusetts. It is nothing 
like these mountains of trash that you have seen. It is not an 
open-air facility, as was described this morning by Mr. 
Lautenberg and Mr. Pallone. We have storm water controls so 
there won't be any leachate running through mountains of waste. 
All of our roads are paved. There won't be any mud in the 
streets. All of our storm water detention basins are lined. We 
have odor control in our building, dust control, local dust 
control. We have dust collection, as well as a droplet system. 
We will also be using odor neutralizers. And we are just 
properly sited. We are 1,300 feet away from the nearest 
sensitive receptor, with commercial and industrial activities 
between us and them. So we are a much different facility.
    Ms. Brown. I understand. Are you following the EPA best 
practices as far as you develop this facility?
    Mr. Jones. I believe that we are. Moreover, when problems 
arise in other jurisdictions, we pay attention; we do a little 
bit of research. We looked at the--in the Susquehanna case, the 
Attorney General's complaint. He outlined very clearly what 
some of the adverse impacts were that were associated with the 
facilities in New Jersey. And we designed all of them right out 
of it. And because there was an up-front environmental review, 
the public had an opportunity to comment on our submissions. So 
we had to respond to that comment.
    Ms. Brown. Let me just say that one of the things, you 
know, it seems like you follow like maybe a different procedure 
and you all are complying. But basically it is like a "trust 
me." It is not that we have guidelines in order. And in 
listening to the--I don't know whether or not they have the--
they couldn't even tell me today how many plants were out 
there. That concerns me. In what community?
    Mr. Jones. We can get out of the "trust me" with one simple 
change to the process: Make everybody do what Transrail had to 
do. Eliminate the notice of exemption proceeding. Make 
everybody that is handling this type of cargo do a petition; 
file a petition which involves much more extensive information, 
including an environmental review, an up-front environmental 
review, along with a filing of convenience and public 
necessity.
    Ms. Brown. What about the continuous monitoring? You are 
going to have the last word. What about the continuing 
monitoring? Because with the 100-plus, they are responsible for 
the entire country. And they only have about six or seven 
people, period, that work in this area.
    Mr. Jones. Well, I only know that because we are filing an 
environmental review--because we are doing that and nobody else 
is, none of the facilities in New Jersey certainly did--that 
will allow the Surface Transportation Board to condition--
condition, place conditions on any approval that is granted to 
us. And in doing so, as they so eloquently put on page 17 of 
their jurisdictional decision on July 10th, that they could use 
that, create conditions that would force us to have to comply 
with all of the regulations or some of the regulations, 
certainly those that are applicable to rail transloading 
facilities that may be common to rail transloading in the State 
of Massachusetts. It is a normal sold waste regulation. So they 
would have, the State of Massachusetts would have the ability 
to monitor. We don't have any opposition to that. We would 
welcome it.
    Ms. Brown. Now you have the last word.
    Mr. Marturano. In the question to this--and this is a great 
pictorial of what the site plan looked like--but the fact is if 
a railroad that owns that line wanted to open up one of these 
open dumps a mile from Mr. Jones' facility, it can. And it 
doesn't have to spend all this money that Mr. Jones is spending 
doing it the right way. They don't have to spend that, because 
there is no regulatory force to make them spend it. They could 
open that up.
    And we have talked about economic competition. There will 
be economic competition. There will be someone who is trying to 
do it the right way, as I believe Mr. Jones is. Someone can 
open that facility tomorrow, dump on the ground, and take his 
customers away the next day.
    Ms. Brown. Is that correct, Mr. Jones? That is a yes-or-no 
question, Mr. Jones.
    Mr. Jones. I believe so.
    Ms. Brown. Mr. Skacel, do you have any final comments?
    Mr. Skacel. Just that don't lose track of the fact that it 
is more than just the exemption process that needs to be 
followed here. It is the follow-through.
    Even once you go through all of this process--and I agree 
the presentation looks really great--but it is the day-to-day 
operations, the follow-up that needs to happen, and currently 
the way it occurs there is none. The Surface Transportation 
doesn't do it, we have attempted to do it at every juncture in 
this whole process, and we have spent millions of dollars 
trying to get to this point. We are unsuccessful to date in 
having the ability to control these types of sites.
    Ms. Brown. Thank you. And in closing, let me just say that 
the record will remain open for 2 weeks, 14 days, so that you 
can add any additional information that you want to share with 
us.
    And I want to say that someone that is an owner stopped me 
in the hall and said that he would like to submit information 
for the record. So I think the record is open to take testimony 
from anyone that wants to make a point on what we are 
discussing. So I just want you to know that.
    And I want to thank you very much for your testimony, and 
sorry that we didn't have as much time, but obviously we are 
going to have some follow-up and lots of discussion. It is a 
concern. And this process is moving forward. We are going to 
have a bill on the floor that has some elements here, that will 
be up tomorrow. And then the Senate has some information in 
theirs, and we will go to conference. And so we will be working 
through the process.
    And thank you very much for your testimony. Thank you very 
much.
    [Whereupon, at 2:30 p.m., the Subcommittee was adjourned.]

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