[Congressional Record Volume 141, Number 2 (Thursday, January 5, 1995)]
[Extensions of Remarks]
[Pages E31-E32]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


        ON THE INTRODUCTION OF THE COMMUNITY SOLVENCY ACT OF 1995

                                 ______


                       HON. CHRISTOPHER H. SMITH

                             of new jersey

                    in the house of representatives

                       Wednesday, January 4, 1995
  Mr. SMITH of New Jersey. Mr. Speaker, I rise today to introduce the 
Community Solvency Act of 1995. This bill represents the final product 
of a year's worth of negotiation and compromise between county and 
local governments, the waste industry, and the financial community. 
This legislation, which passed the House in the final hours of the 103d 
Congress enables communities in financial trouble to continue to treat 
and dispose of municipal solid waste in an efficient and cost effective 
manner, while, at the same time, protecting public health and safety 
and high environmental standards.
  While the House was able to take decisive action passing this exact 
text last year, Senate action was unfortunately obstructed. For this 
reason, we now revisit this issue and must move swiftly on this bill 
beginning today.
  As my colleagues will recall, local governing bodies nationwide 
suffered a tremendous blow last May when the Supreme Court ruled in C&A 
Carbone v Town of Clarkstown, New York that waste flow control 
authority violates the dormant commerce clause of the Constitution. As 
Justice Sandra Day O'Connor reminded us in her concurring opinion, 
Congress has implied that States and localities have this authority, 
but has never said so explicity.
  Communities nationwide have accumulated an outstanding debt of more 
than $10 billion assuming their ability to use flow control authority, 
only to have the Court take it away with the Carbone decision. But 
technologically advanced facilities require more money than many 
communities can afford. To meet their waste management responsibilities 
while protecting the environment and public health and safety, 
communities have turned to bond financing.
  These communities have accepted the responsibility of constructing, 
maintaining, and often operating transfer stations, landfills, waste-
to-energy facilities, composting stations, and other solid waste 
treatment sites. In many cases, these communities have even designed 
integrated solid waste management plans to meet the full solid waste 
needs of their residents. We should not punish them for their 
initiative.
  Furthermore, this $10 billion in debt jeopardizes far more than the 
communities' ability to meet solid waste management responsibilities. 
In fact, it jeopardizes many of their overall community bond ratings. 
At least two prominent credit rating agencies--Moody's Investors 
Service and Duff & Phelps Credit Rating Co.--have already begun the
 combined reassessment of more than 100 communities' credit standings 
as a direct result of the Court's decision. Duff & Phelps announced 
that, ``In its review of this issue, Duff & Phelps Credit Rating Co. 
found that Congress' inability to take action is triggering greater 
uncertainty in the solid waste sector and, in the long run, may weaken 
credit quality of solid waste facilities.''

  The debate continues, but the stakes are even higher now. The 
ultimate consequences of our inability to act decisively will be Orange 
County-like bankruptcies, higher municipal taxes, and outraged 
constituents nationwide. It is clearly up to Congress to address and 
remedy this situation. The Community Solvency Act is precisely the flow 
control language which the House passed on October 7, 1994. This 
language was supported by a wide coalition including private sector 
waste management companies; local government organizations, such as the 
National Association of Counties, the U.S. Conference of Mayors, and 
the League of Cities; recycling interests; and Wall Street 
representatives.
  Congress must move a legislative remedy to Carbone swiftly through 
the committee structure and the floor schedule to ensure financial 
security to struggling communities in each of our States. I urge my 
colleagues to take an 
[[Page E32]] active interest in this important issue by cosponsoring 
this common sense measure--the Community Solvency Act of 1995.


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