[Congressional Record Volume 141, Number 46 (Monday, March 13, 1995)]
[Senate]
[Pages S3842-S3848]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. CONRAD:
  S. 542. A bill to amend the Solid Waste Disposal Act to allow States 
to regulate the disposal of municipal solid waste generated outside of 
the State, and for other purposes; to the Committee on Environment and 
Public Works.


             interstate shipments of municipal solid waste
  Mr. CONRAD. Mr. President, today I am introducing legislation that 
would give States and local governments the power to regulate and, if 
they choose, reject interstate shipments of municipal solid waste.
  This is a problem Congress has grappled with now for years and it 
only grows more and more serious. An estimated 18 million tons of 
municipal solid waste travels across State lines each year. Landfills 
are filling up around the country and communities are searching for new 
places to send their trash.
  Where are they searching? Mr. President, they are searching in rural 
areas like my home State of North Dakota and, no doubt, they are 
looking in the State of the distinguished occupant of the chair, the 
State of Idaho.
  Mr. President, rural States like ours, where pollution has not 
spoiled the land, where small communities may be willing to take large 
amounts of money from a waste company in exchange for landfill space, 
are the places they are looking. Whether they want this imported waste 
or not, States are almost powerless to stop the flow of garbage across 
their borders.
  Mr. President, I can remember very well being involved in a debate on 
this matter a number of years ago, and the trash merchants had their 
lobbyists lining the Halls. I have never seen so many people off the 
Chamber of the Senate. The trash merchants want to ship this stuff 
someplace, and they are looking for States that are willing to take it.
  Mr. President, States ought to have an ability to say ``no.'' Waste 
is already coming to my State of North Dakota. We take industrial waste 
from General Motors plants from all around the country. We take 
municipal solid waste incinerator ash from Minnesota. A waste company 
continues its efforts to open a superdump in my State that would take 
garbage from Minneapolis-St. Paul. This one landfill, Mr. President, 
would receive almost twice as much garbage as is produced in my entire 
State. This situation is not unique. It is happening all over the 
country.
  States should be able to do something about it. They should be able 
to 
[[Page S3843]] regulate how much solid waste comes into the State so 
they can implement effective waste disposal policy. The Federal 
Government requires the States to manage and oversee solid waste 
disposal programs. States are required to issue permits, monitor 
existing sites, and enforce landfill regulation. Why, then, should 
States not also be able to regulate how much waste comes in from out of 
State? It only makes sense that they have this power.
  Mr. President, imported waste not only takes up precious landfill 
space, but it also puts a strain on services of the importing State 
without properly compensating that State. Waste trucks from out of 
State wear down the roads of the importing State, but the exporting 
community pays nothing. Similarly, States must spend money to run their 
solid waste program, but they get no additional payments for accepting 
out-of-State wastes. In other words, exporting communities are passing 
their waste problems, and the costs associated with them, on to 
importing States. This is not fair, and it should be changed.
  The bill I am introducing today takes strong steps to address the 
problems of interstate waste. First, it gives States the authority to 
regulate interstate waste. If a State wants to reject new solid waste 
shipments, my bill would allow that.
  Second, it requires that affected local governments formally approve 
of any waste import. This gives the communities the ability to veto 
proposed shipments of out-of-State wastes. Why should not those 
communities that are affected by waste shipments have the ability to 
say no?
  Third, it provides the opportunity for the area surrounding the host 
community to be involved in the decision to accept out-of-State wastes. 
A decision on siting a solid waste landfill, especially one that will 
take large amounts of imported waste, must be a collective one, and a 
small community alone should not be able to make a decision that will 
affect a much larger surrounding area.
  Finally, my bill requires that waste companies publicly release all 
of the relevant information about their proposed landfill before a 
community makes a decision on it. This information should include 
estimated environmental impacts and mitigation, economic impacts, 
planned expansion, financial disclosure, and records of past violations 
by the owner and operator of the disposal site. Waste companies hold up 
the promise of jobs and economic incentives, but they do not want to 
reveal the potential risks involved in their plan. In many cases, they 
may not even reveal their overall plans until it is too late to stop 
them. One practice I have seen involves having a local developer 
purchase the site and get a permit to dispose of modest amounts of 
solid waste. A big waste company then buys out the local party and 
aggressively expands the site's permit. The local community does not 
have a chance. This is not fair and cannot be allowed to continue. 
Communities must be able to make informed choices.
  Mr. President, how often have we seen it, where one of these trash 
merchants comes into a State and they spend lots of money up front, 
talking about the opportunities, talking about the jobs, talking about 
the good things, but failing to reveal the real plan, failing to tell 
how big the operation is really going to be? They fail to tell of past 
violations. We have seen companies go into States that are bad 
operators, that have a bad record, that have a bad reputation, but they 
do not reveal that. They do not talk about that before the community 
has a chance to vote.
  Mr. President, many of us believe that a local community ought to 
have a choice and it ought to be an informed choice. They ought to know 
the record, they ought to know the plan before they make a final 
decision.
  We have been working on the interstate waste problem in the Senate 
for many years now. During the years we have been debating this issue, 
the problem has not gone away. It has simply gotten bigger. The trash 
is still moving, and States and communities are almost powerless to 
stop it. It is time to enact interstate waste legislation into law.
  Congress came very close to passing an interstate waste bill in 1994. 
I hope we can build on the work that has been done and take quick 
action in 1995.
  I look forward to working with Chairman Chafee, Senator Baucus, 
Senator Coats, and others to move this matter forward.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 542

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. AUTHORITY TO REGULATE OUT-OF-STATE WASTE.

       (a) Amendment.--Subtitle D of the Solid Waste Disposal Act 
     (42 U.S.C. 6941 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 4011. AUTHORIZATION FOR STATES TO REGULATE MUNICIPAL 
                   SOLID WASTE GENERATED IN ANOTHER STATE.

       ``(a) Definitions.--In this section:
       ``(1) Affected local government.--The term `affected local 
     government' means the elected officials of a political 
     subdivision of a State in which a facility for the treatment, 
     incineration, or disposal of municipal solid waste is located 
     (as designated by the State pursuant to subsection (d)).
       ``(2) Affected local solid waste planning unit.--The term 
     `affected local solid waste planning unit' means a planning 
     unit, established pursuant to State law, that has--
       ``(A) jurisdiction over the geographic area in which a 
     facility for the treatment, incineration, or disposal of 
     municipal waste is located; and
       ``(B) authority relating to solid waste management 
     planning.
       ``(3) Municipal solid waste.--The term `municipal solid 
     waste'--
       ``(A) means refuse, and any nonhazardous residue generated 
     from the combustion of the refuse, generated by--
       ``(i) the general public;
       ``(ii) a residential, commercial, or industrial source (or 
     any combination of the sources); or
       ``(iii) a municipal solid waste incinerator facility; and
       ``(B) includes refuse that consists of paper, wood, yard 
     waste, plastic, leather, rubber, or other combustible or 
     noncombustible material such as metal or glass (or any 
     combination of the materials); but
       ``(C) does not include--
       ``(i) hazardous waste identified under section 3001;
       ``(ii) waste resulting from an action taken under section 
     104 or 106 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9604, 
     9606);
       ``(iii) material collected for the purpose of recycling or 
     reclamation;
       ``(iv) waste generated in the provision of service in 
     interstate, intrastate, foreign, or overseas air 
     transportation;
       ``(v) industrial waste (including debris from construction 
     or demolition) that is not identical to municipal solid waste 
     in composition and physical and chemical characteristics; or
       ``(vi) medical waste that is segregated from municipal 
     solid waste.
       ``(b) Authority To Regulate.--
       ``(1) In general.--Each State is authorized to enact and 
     enforce a State law that regulates the treatment, 
     incineration, and disposal of municipal solid waste generated 
     in another State.
       ``(2) Authorities.--A State law described in paragraph (1) 
     may include provisions for--
       ``(A) the imposition of a ban or limit on the importation 
     of municipal solid waste generated outside of the State; and
       ``(B) the collection of differential fees or other charges 
     for the treatment, incineration, or disposal of municipal 
     solid waste generated in another State.
       ``(c) Local Government Approval.--
       ``(1) In general.--Except as provided in paragraph (2) or 
     as otherwise provided under State law, the owner or operator 
     of a landfill, incinerator, or other waste disposal facility 
     in a State may not accept for treatment, incineration, or 
     disposal any municipal solid waste generated outside of the 
     State unless the owner or operator has obtained a written 
     authorization to accept the waste from--
       ``(A) the affected local government; and
       ``(B) any affected local solid waste planning unit 
     established under State law.
       ``(2) Exceptions.--
       ``(A) In general.--Paragraph (1) shall not apply with 
     respect to an owner or operator of a landfill, incinerator, 
     or other waste disposal facility that--
       ``(i) otherwise complies with all applicable laws of the 
     State in which the facility is located relating to the 
     treatment, incineration, or disposal of municipal solid 
     waste; and
       ``(ii) prior to the date of enactment of this section, 
     accepted for treatment, incineration, or disposal municipal 
     solid waste generated outside of the State.
       ``(B) Existing authorizations.--An owner or operator of a 
     facility described in paragraph (1) that, prior to the date 
     of enactment of this section, obtained a written 
     authorization from--
       ``(i) the appropriate official of a political subdivision 
     of the State (as determined by the State); and
     [[Page S3844]]   ``(ii) any affected local solid waste 
     planning unit established pursuant to the law of the State,

     to carry out the treatment, incineration, or disposal of 
     municipal solid waste generated outside of the State shall, 
     during the period of authorization, be considered to be in 
     compliance with the requirements of paragraph (1).
       ``(C) Facilities under construction.--If, prior to the date 
     of enactment of this section, an appropriate political 
     subdivision of a State (as determined by the State) and any 
     affected local solid waste planning unit established under 
     the law of the State issued a written authorization for a 
     facility that is under construction, or is to be constructed, 
     to accept for treatment, incineration, or disposal municipal 
     solid waste generated outside the State, the owner or 
     operator of the facility, when construction is completed, 
     shall be considered to be in compliance with paragraph (1) 
     during the period of authorization.
       ``(3) Expansion of facilities.--An owner or operator that 
     expands a landfill, incinerator, or other waste disposal 
     facility shall be required to obtain the authorizations 
     required under paragraph (1) prior to accepting for 
     treatment, incineration, or disposal municipal solid waste 
     that is generated outside the State.
       ``(4) Prior disclosure.--Prior to formal action with 
     respect to an authorization to receive municipal solid waste 
     or incinerator ash generated outside the State, the affected 
     local government and the affected local solid waste planning 
     unit shall--
       ``(A) require from the owner or operator of the facility 
     seeking the authorization and make readily available to the 
     Governor, adjoining Indian tribes, and other interested 
     persons for inspection and copying--
       ``(i) a brief description of the planned facility, 
     including a description of the facility size, ultimate waste 
     capacity, and anticipated monthly and yearly waste quantity 
     to be handled;
       ``(ii) a map of the facility site that discloses--

       ``(I) the location of the facility in relation to the local 
     road system and topographical and hydrological features; and
       ``(II) any buffer zones and facility units that are to be 
     acquired by the owner or operator of the facility;

       ``(iii) a description of the then current environmental 
     characteristics of the site, including information 
     regarding--

       ``(I) ground water resources; and
       ``(II) alterations that may be necessitated by or occur as 
     a result of the facility;

       ``(iv) a description of--

       ``(I) appropriate environmental controls to be used at the 
     site, including run-on or run-off management, air pollution 
     control devices, source separation procedures, methane 
     monitoring and control, landfill covers, liners, leachate 
     collection systems, and monitoring and testing programs; and
       ``(II) any waste residuals generated by the facility, 
     including leachate or ash, and the planned management of the 
     residuals;

       ``(v) a description of the site access controls to be 
     employed and roadway improvements to be made by the owner or 
     operator and an estimate of the timing and extent of 
     increased local truck traffic;
       ``(vi) a list of all required Federal, State, and local 
     permits required to operate the landfill and receive waste 
     generated outside of the State;
       ``(vii) estimates of the personnel requirements of the 
     facility, including information regarding the probable skill 
     and education levels required for jobs at the facility that 
     distinguishes between employment statistics for pre-
     operational levels and those for post-operational levels;
       ``(viii)(I) information with respect to any violations of 
     regulations by the owner or operator, or subsidiaries;
       ``(II) the disposition of enforcement proceedings taken 
     with respect to the violations; and
       ``(III) corrective action and rehabilitation measures taken 
     as a result of the proceedings;
       ``(ix) information required by State law to be provided 
     with respect to gifts, contributions, and contracts by the 
     owner or operator to any elected or appointed public 
     official, agency, institution, business, or charity located 
     within the affected local area to be served by the facility;
       ``(x) information required by State law to be provided by 
     the owner or operator with respect to compliance by the owner 
     or operator with the State solid waste management plan in 
     effect pursuant to section 4007;
       ``(xi) information with respect to the source and amount of 
     capital required to construct and operate the facility in 
     accordance with the information provided under clauses (i) 
     through (vii); and
       ``(xii) information with respect to the source and amount 
     of insurance, collateral, or bond secured by the applicant to 
     meet all Federal and State requirements;
       ``(B) provide opportunity for public comment, including at 
     least 1 public hearing; and
       ``(C) not less than 30 days prior to formal action--
       ``(i) publish notice of the action in a newspaper of 
     general circulation; and
       ``(ii) notify the Governor, adjoining local governments, 
     and adjoining Indian tribes.
       ``(d) Designation of Affected Local Government.--Not later 
     than 90 days after the date of enactment of this section, the 
     Governor of each State shall, for the purpose of this 
     section, designate the type of political subdivision of the 
     State that shall serve as the affected local government with 
     respect to authorizing a facility to accept for treatment, 
     incineration, or disposal of municipal solid waste generated 
     outside of the State. If the Governor of a State fails to 
     make a designation by the date specified in this subsection, 
     the affected local government shall be the public body with 
     primary jurisdiction over the land or use of the land on 
     which the facility is located.''.
       (b) Table of Contents.--The table of contents for subtitle 
     D of the Solid Waste Disposal Act is amended by adding after 
     the item relating to section 4010 the following new item:

``Sec. 4011. Authorization for States to regulate municipal solid waste 
              generated in another State.''.
                                 ______

      By Mr. HATFIELD:
  S. 543. A bill to extend the deadline under the Federal Power Act 
applicable to the construction of a hydroelectric project in Oregon, 
and for other purposes; to the Committee on Energy and Natural 
Resources.


          eugene water & electric board ferc license extension

  Mr. HATFIELD. Mr. President, today I am introducing legislation to 
allow the Federal Energy Regulatory Commission to grant the Eugene 
Water & Electric District, in Lane County, OR, an extension of its 
hydro project construction completion deadline.
  The subject of this license is a 21 megawatt hydroelectric project at 
the Blue River Dam, an existing Corps of Engineers flood control 
project. The Federal Energy Regulatory Commission granted the license 
for the project in November 1989. The deadline for completion is 
October 31, 1995. Construction has begun and EWEB has invested $4.5 
million to date.
  The Eugene Water & Electric Board, also known as EWEB, has asked for 
an extension to the construction completion deadline because its 
ability to complete construction has been, and will continue for some 
time to be, impeded by the ongoing fish mitigation efforts of the Corps 
of Engineers. These efforts are focused on minimizing temperature 
variations in the McKenzie River caused by both the Blue River and 
Cougar Dams. The corps' work will entail drawing down reservoirs to 
very low levels.
  I support this temperature control work being done by the corps. 
However, until the corps completes these fish mitigation improvements 
on Blue River Dam, the hydroelectric project currently licensed and 
being pursued by EWEB will be untenable. The corps is expected to first 
construct temperature control improvements at nearby Cougar Dam. This 
project is not expected to be completed until 2001. At that time, the 
corps will begin work on similar improvements at Blue River Dam, which 
it expects to finish by 2005.
  The legislation I am introduction today is designed to accommodate 
both the beneficial fish mitigation efforts being pursued by the corps 
and the ongoing hydroelectric project being pursued by EWEB. My 
legislation directs FERC, at the request of EWEB, to extend the time 
for completion of construction to the later of October 31, 2002, or a 
date 1 year after the corps completes construction of temperature 
control structures on the Blue River Dam. The legislation also requires 
EWEB to file a construction completion progress report with FERC each 
year until construction is completed.
  I look forward to working with members of the Senate Energy and 
Natural Resources Committee to ensure that this proposal receives 
prompt and thorough attention.
  Mr. President, I ask unanimous consent that the text of the bill and 
additional material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 543

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. EXTENSION OF DEADLINE FOR BLUE RIVER PROJECT.

       (a) Extension.--Notwithstanding the time period specified 
     in section 13 of the Federal Power Act (16 U.S.C. 806) that 
     would otherwise apply to the Federal Energy Regulatory 
     Commission project numbered 3109, the Commission shall, at 
     the request of the licensee for the project, extend the time 
     for completion of the construction of the project to the 
     later of--
       (1) October 31, 2002; or
       [[Page S3845]] (2) the date that is 1 year after the date 
     on which the Army Corps of Engineers completes construction 
     of water temperature control structures at the Blue River 
     Dam.
       (b) Reports.--The licensee for the project described in 
     subsection (a) shall file with the Federal Energy Regulatory 
     Commission, on October 31 of each year until construction of 
     the project is completed, a report on progress toward 
     completion of the project and of water temperature control 
     structures at the Blue River Dam.
                                                                    ____



                                Eugene Water & Electric Board,

                                    Eugene, OR, February 20, 1995.
     Hon. Mark O. Hatfield,
     U.S. Senate,
     Washington, DC.
       Dear Senator Hatfield: The Eugene Water & Electric Board 
     requests your help in seeking Congressional action which will 
     allow us to extend, by eleven years, the construction 
     completion deadline required by FERC on our Blue River 
     hydroelectric project. The Blue River Dam is one of two 
     facilities on the McKenzie River for which you have 
     introduced legislation to facilitate and clarify financing 
     for temperature control work by the Corps of Engineers. Due 
     to the Corps' construction schedule and recent changes in BPA 
     financing we are unable to meet the construction deadline of 
     October, 1995 as required in our FERC license. For us to 
     complete this project we will need additional time to 
     coordinate our construction schedule with that of the Corps.
       This is not a standard extension request and it is unlike 
     other legislation to extend construction deadlines for 
     hydroelectric projects. Timing problems, financial and 
     environmental considerations necessitate a longer extension 
     than those which have been granted to other licensees. Also, 
     unlike other licensees, EWEB has already started construction 
     on the project and seeks only an extension of the completion 
     deadline.


                          The Proposed Project

       For over a decade EWEB has been pursuing development of a 
     hydroelectric project at the existing Corps of Engineer's 
     flood control dam at Blue River. The project would generate 
     21 Mw, enough to provide power for 2000 homes annually. Our 
     license for the project was granted in November, 1989. The 
     deadline for completion is October 31, 1995. Construction 
     began with the fabrication of the turbine and other 
     associated equipment. Our investment to date is $4.5 million 
     and the license has a duration of 50 years. The attached 
     Briefing Document of January 26th describes the project in 
     detail.


                   Federal Actions Beyond Our Control

       The existing Corps flood control dams at Cougar and Blue 
     River Reservoir will be modified to alter temperature 
     variations (caused by the dams) which severely threaten 
     salmon fry. This will be accomplished by installing multi-
     level release port towers. Construction is scheduled first a 
     Cougar Reservoir as this is the larger project and it has a 
     greater impact on fish mortality. After completion of the 
     Cougar project in 2001
      the Corps will begin work on Blue River with a scheduled 
     completion date of 2005. Each year, over this four year 
     construction period, the Corps will have to draw down the 
     reservoir to very low levels. Generation from EWEB's power 
     plant would be substantially reduced as would the revenue 
     and operational benefits during the early years of the 
     project's operation. Also, EWEB's design for the 
     hydroelectric facility may have to be modified based on 
     the Corps design and operating plan.
       Our Blue River project was also accepted as a billing 
     credit project by BPA. Billing credits is a financial benefit 
     awarded by BPA in response to the Northwest Regional Power 
     Act to help utilities overcome the negative short-term 
     economics associated with developing new resources during the 
     early life of the project. Due to market changes and BPA's 
     growing financial problems negotiations on our billing 
     credit's contract was cancelled.
       The timing and sequence of the Corps projects along with 
     the loss of billing credits will make the project untenable.


                         environmental benefits

       A settlement agreement, approved by FERC and incorporated 
     into the license, was reached between EWEB, the Oregon 
     Department of Fish and Wildlife, the National Marine 
     Fisheries Service and the U.S. Fish & Wildlife Service. The 
     original fish mitigation plans for Blue River called for a 
     fish screen and bypass facility. The agencies determined that 
     only a fish barrier was needed at Blue River and the McKenzie 
     River could be better served by investing screen and bypass 
     costs into improving salmon habitat. As a result, EWEB will 
     contribute $2,200,000 to a trust fund for fish enhancement 
     rather than building a screen and bypass facility. 
     (Settlement Agreement attached).
       In addition, the project itself will benefit fish simply 
     through its construction. Currently, water released from the 
     reservoir passes through an outlet tunnel many feet below the 
     reservoir's surface. This results in rapid water 
     depressurization causing a fish mortality rate of 60%. We 
     would pressurize the tunnel by installing outlet gates 
     downstream. The transition from pressurized to depressurized 
     water will be slowed enough to reduce fish mortality by more 
     than half resulting in an overall survival rate exceeding 
     70%.


                         consultation with FERC

       Before approaching your office with this extension request 
     we spoke with Fred Springer, Director, Office of Hydropower 
     Licensing and Mark Robinson, Director, Division of Project 
     Compliance and Administration at FERC. They were clear that 
     although the Commission has the authority to extend 
     completion dates, an extension of an 11 year duration is 
     unusual. Extensions are usually granted when the applicant 
     can show diligence or continuous progress toward project 
     completion. We would be
      unable to make that showing, especially while the Corps work 
     is underway. Additionally, 11 years is a lengthy extension 
     compared to other extension requests which have been 
     granted by either legislative or administrative means. In 
     terms of financial factors, extensions may be granted when 
     the licensee needs more time to secure a power sales 
     contract or another means of financing. FERC acknowledges 
     the revenue losses we would incur by completing a project 
     we could only operate part time is a serious concern. 
     However, this too is an uncommon situation which falls 
     outside the generally accepted rationale for granting 
     construction extensions. According to FERC staff, these 
     circumstances are so unusual, that the Commission would be 
     hard pressed to give us a favorable ruling. FERC would 
     need a legislative directive to grant us the extension we 
     request.
       Consistent with the Regional Act, EWEB has aggressively 
     pursued conservation and renewable resources. As you consider 
     helping us with the Blue River project we ask you to note 
     that we have three others, all renewable resource projects, 
     with existing agreements or contracts with BPA. EWEB recently 
     learned that all three projects are at risk of being 
     abandoned by BPA due to continuing budget constraints. We 
     have made substantial investments in two of them. Regional 
     funding from BPA for conservation will also likely end 
     requiring EWEB to sustain local conservation investments 
     alone. Additionally, we are facing yet to be determined rate 
     impacts from BPA's reinvention. The combination of all these 
     actions at BPA and the Corps shifts significant obligations 
     to EWEB and its ratepayers. The increased financial 
     obligation for conservation and renewable resource 
     development makes it economically imprudent to proceed with 
     the Blue River Project under the current schedule even though 
     it may be one of the few resource options remaining at this 
     time.
       We thank you for your serious consideration of our request.
                                                Randy L. Berggren.
                                 ______

      By Mr. BUMPERS (for himself and Mr. Graham):
  S. 545. A bill to authorize collection of certain State and local 
taxes with respect to the sale, delivery, and use of tangible personal 
property; to the Committee on Finance.


                consumer and main street protection act
  Mr. BUMPERS. Mr. President, I come today to introduce a bill dealing 
with the mail-order catalog business. This issue has become almost an 
obsession with me over the past 2 years, and one of the reasons for 
that obsession is that, before I became Governor of Arkansas, I was a 
hardware, furniture, and appliance dealer, practicing law in a small 
town, raising cattle, doing anything to put bread on the table. And the 
biggest competitor I had was the Sears, Roebuck catalog. Sears, Roebuck 
was tough competition for me because they were big, had a much bigger 
variety of goods, and were reasonably cheap by comparative standards.
  But while Sears, Roebuck was tough competition, it was also fair 
competition. They bore the same burdens of doing business that I did. 
One of those burdens was collecting sales taxes. Because Sears, Roebuck 
had stores in every State in the Nation, they had to collect sales 
taxes on everything they sold through their catalog operation, just 
like I had to collect sales taxes on everything I sold in my hardware 
store. The reason Sears, Roebuck had to collect those taxes was that, 
under the law, if you have a physical presence in any State, you must 
collect sales tax on goods shipped into that State, even if the goods 
are sold through a catalog.
  Over the past few years, however, an entirely new situation has been 
developing in the competition between Main Street retailers and catalog 
operations. And that situation is not one of fair competition. What has 
been developing is that the catalog operations often limit their 
physical operations to one State, or a few States, and refuse to 
collect the taxes that are due on goods shipped into other States. This 
is increasingly significant because catalog sales are $100 billion a 
year. Fingerhut, one of the biggest mail-order houses in America, has 
annual sales in excess of $1 billion a year. They sent out 476 million 
catalogs in 1993 alone. Mr. President, bear in mind that Fingerhut is 
only one of several very large mail order operations. Lands' End, L.L. 
[[Page S3846]] Bean, some of the big ones, have similar sales figures. 
In all, there are around 7,500 mail-order houses in this country, and 
they are growing like mad.
  I daresay that on an average day, I get somewhere between 4 and 10 
catalogs in my mail chute every night. If you live in my home State of 
Arkansas and order something from L.L. Bean or Lands' End, the company 
collects no sales tax. That does not mean there is no sales tax in my 
State, because there is. But do you know who has the responsibility for 
remitting the tax to the State revenue department, Mr. President? The 
consumer. If you buy a $10,000 fur coat from a mail-order house, you 
are personally responsible for remitting the $500 tax on that purchase 
to the State revenue department. And it is not just mail-order houses 
that play this game. Sometimes, if you buy it in New York City, they 
will say, ``You have a southern accent; are you not from New York?'' 
``No, I am not; I am from Arkansas.'' ``Would you like for us to mail 
this to your home and save you $500?'' Of course, the consumer is going 
to say, ``Yes, I would like that.'' The company will then mail it to 
your home and not charge you one red cent of sales tax. But what the 
unsuspecting consumer does not know is that he or she does owe tax on 
that purchase, and that he or she is personally responsible for paying 
it to the State.
  My State imposes its sales tax on all goods, regardless of whether 
they are purchased in State or out of State. The 44 other States which 
have sales taxes also apply those taxes to both in-State and out-of-
State purchases. Technically, the tax on out-of-State goods is called a 
use tax, while the tax on in-State goods is called a sales tax. But for 
all intents and purposes, the use tax is identical to the sales tax. 
But because out-of-State companies usually refuse to collect the 
applicable use tax, the consumer does not even know there is a tax when 
purchasing merchandise via mail order.
  The Presiding Officer is from the great State of Idaho. Idaho has a 
sales tax, and Idaho applies that sales tax to goods shipped into the 
State, just like it does to goods sold by Idaho department stores. So 
if Idaho's sales tax is 4 or 5 percent, the person who buys a $10,000 
fur coat via mail order would be liable for $400 or $500 in sales 
taxes.
  Some people say, ``There is already a tax on mail-order sales. It is 
the use tax. What are you trying to do?''
  What I am trying to do is make sure that mail-order companies do not 
blind-side their customers. Consumers buy from mail-order companies 
thinking their sales are tax free, and then they learn otherwise after 
the fact. Last year in Florida, 19,000 people got notices in the mail 
that goods they bought from direct marketers were not tax free, as the 
company had lead them to believe. The furniture they bought in North 
Carolina or the merchandise they bought from Lands' End or L.L. Bean, 
they owed a tax on it. Admittedly, not every mail-order customer gets 
caught. Sometimes the State finds out about the purchase, and sometimes 
they do not. But when they do, the consumer has to pay.
  This is not a new tax. Of course, it is not. Think about it for a 
second. Why would any State have a tax structure that required Main 
Street merchants to collect sales tax and allowed out-of-State 
companies to ship the same merchandise into the State and collect 
nothing? No State would ever do that, and no State does it.
  Oh, how everybody's heart bleeds around here for the poor, small 
town, Main Street businessman. But when it comes to catalog operations, 
we give them a huge advantage, 5 to 8 percent or more, and nobody wants 
to stand up for the Main Street businessman.
  Recently the argument was made by one of the Senators from Maine that 
Maine does not have the problem I am describing because they have 
something that says on the State income tax return in Maine, ``List all 
your catalog purchases from last year.''
  Now, who knows what all they bought from catalogs last year? There 
are a lot of people who order something every other day from a mail-
order house, and of course they do not take the time to keep a record 
of every purchase. People just do not keep up with it.
  Do you know what Maine collected last year on that? You guessed it. 
Not much. Only around $1 million of the total $13 million they should 
have collected on out-of-State mail order purchases. But Maine is fat 
and happy because L.L. Bean is located there and L.L. Bean 
does around $1 billion a year in sales and they pay sales tax on every 
dime of merchandise sold to customers living in the State of Maine. It 
is those other 49 States that do not get anything.
  The direct marketing industry says, ``Oh, this is such a burden, 
Senator. You have got a city tax, you have got a county tax, you have 
got a State tax. Do you expect me to keep up with all of that?''
  No, I do not. And this legislation would allow mail-order companies 
the option of collecting a single blended rate for each State where 
they do business. Then the mail-order companies would simply send a 
quarterly payment to the State revenue department and let them 
distribute it to the local jurisdictions that have a sales tax.
  Do you want to hear a true anecdote? One of the finest Republican 
Senators to come to the U.S. Senate since I have been here is Senator 
Bob Bennett from the great State of Utah. Senator Bennett founded a 
mail-order company years ago. In a Small Business Committee hearing 
last year on this legislation, he said, ``The people in the company 
with me sat around the table with me and we debated this issue. Shall 
we or shall we not collect sales tax on our sales made to other 
States?'' He said the decision was almost unanimous, ``Yes, let's be 
good citizens and let's collect a sales tax.''
  Anybody who wants to make the argument about what a terrible burden 
this is on these mail-order houses, talk to Bob Bennett. He says, ``We 
punch a computer button at the end of the month, and that is it. It is 
no problem whatever to collect this sales tax. We do it and we do 
millions in business a year.'' So much for the burden. Another argument 
they make is, ``But, Senator, we do not require fire protection, law 
enforcement, all those things that your sales taxes go for.''
  That is true. But I will tell you what burden you do impose on other 
States. You contribute almost 4 million tons of waste to the landfills 
of this country annually. Talk to any mayor: ``Mayor, what is the 
biggest problem you have?'' ``Trying to find enough landfill to take 
care of our garbage.'' And here is a contributor of around 4 million 
tons a year that mayors have to find some method of disposing of. And 
the mail-order houses do not contribute one penny, except companies 
like Bob Bennett's.
  ``Well, we don't want to have to do this every month.'' Fine. My bill 
says you only have to remit every 3 months.
  Now, if that ``ain't'' a deal. I wish I had had that kind of 
opportunity when I was in business. If I did not pay my sales tax by 
the 20th of each succeeding month, I did not get a 2-percent discount.
  Mr. President, I have gone even further than that. In order to take 
care of some of these smaller mail-order houses, we have exempted in 
this bill, in the interest of being for small, fledgling businesses--
and, I must say, $3 million a year is not exactly my idea of small--we 
say, ``If you do less than $3 million a year of business, you do not 
have to mess with this bill.'' Of the 7,500 catalog companies in the 
United States, not very many of them do more than $3 million of 
business a year. Only 825 of the 7,500 mail-order houses in this 
country that would be covered by this bill.
  Mr. President, there is another element of unfairness besides the 
competitive advantage that these mail-order houses get. Some of them do 
advertising that is very offensive to me and I think it would be to any 
Senator.
  Here are a couple of charts. I do not know the name of this company. 
But here is what their ad says. ``Nobody beats our deal.'' ``No sales 
tax added outside of North Carolina.''
  Now, technically, that is correct. They do not add any sales tax. The 
poor consumer who buys that yacht, or whatever, is subject to a tax, 
but he is misled by this ad into believing that he will never have to 
pay any sales tax.
  Here it is, ``No sales tax added.'' Now, it is true they do not add 
it, but if a State you live in happens to catch you buying that, they 
can assess a sales tax against you.
  [[Page S3847]] I have some letters that I will put in the Record in a 
moment, Mr. President, from people from all over the country who have 
gotten the sad news that they thought they were buying $10,000 worth of 
furniture tax free.
 And the clerk that sold them assured them, ``We will ship this from 
North Carolina to Florida, and you will not have to pay sales tax on 
it.''

  But think about this. Wallcovering, Inc.--I blocked out the address 
of this company--here is their advertising: ``Discount wallcovering, 
the phone way.'' Now, all these mail order houses have their 1-800 
number listed on every page of their catalog. ``The phone way, save 33 
to 66 percent.''
  And what do you think? No sales tax outside of Pennsylvania. That is 
not the worst of it. A lot of them have advertised ``No sales tax.'' 
They do not say, ``No sales tax added,'' as they do here. They just say 
``No sales tax.'' A person getting ready to order wall covering, I 
promise, would assume that there is no sales tax.
  But that is not the worst of this firm. Listen to this: ``Stop in 
your neighborhood, write down the pattern number, and then call us.'' 
Use that poor stiff down on Main Street. Go into his store and shop. 
Get the model number, get the cover number, whatever, and then call our 
800 number and save the sales tax.
  I have never introduced a piece of legislation in this body, Mr. 
President, that I thought was more meritorious than this. When I 
offered this amendment on the unfunded mandates bill these mail order 
houses started sending telegrams to every single person they had ever 
sold 10 cents worth to and said ``Write your Senator. Tell them you 
don't want any more taxes. Tell them Senator Bumpers' proposal will 
cost them an arm and a leg.'' And a lot of people bought into that 
business about it being a new tax, and scared to death they will get a 
30-second spot running against them the next time they run, being a 
taxer and a spender.
  Ask the little shopkeeper in your hometown on Main Street what he 
thinks about it. Ask your Governor or your mayor how he or she feels 
about it.
  We had a music dealer in North Little Rock testify. This music dealer 
said, ``People come into our shop all the time, get model numbers off 
our musical instruments so they can order from a mail order house. They 
get it from a mail order house, it does not work, and then they bring 
it in here for repair, and they think we ought to repair it free 
because we sell that same product.''
  Now, Mr. President, if the Presiding Officer will pardon this odious 
comparison, it is just like mining law reform. It may not happen this 
year, may not even happen next year, but this is going to happen.
  Do Senators know who collects taxes in every single State? The Boy 
Scouts. When ordering Scout uniforms out of their catalog, order it 
from Florida, they collect the tax and send it to the State of Florida. 
If the Boy Scouts can do it, surely the Lands' End and L.L. Bean and 
all the others can do it.
  I am not going to bore Members with a bunch of catalogs. I keep a 
couple hundred in the office just for amusement. I am not going to bore 
Members with them, but that argument about how complex it is, it would 
take a Philadelphia lawyer to decipher the instructions on some of 
these mail order houses. Some of them do business in 25 States. If you 
live in this State, this State and this State, add 5 percent for sales 
tax; if you live in this State, add 4 percent sales tax, plus sales tax 
on the shipping charges; if you live in this State, allow 3 days for 
delivery; if you live in this State allow 2 days for delivery. And they 
talk about this being complicated.
  Mr. President, the reason I say this is an idea whose time has come, 
and it will pass ultimately, is because this business is growing a lot 
faster than the retail business in your hometown.
  So I always want to say to these people who say this is too 
burdensome, it is a new tax. All of those arguments we will hear when 
we debate this, they are the most specious arguments I have ever heard. 
I want to say to those people, what if everybody in the country decides 
to start ordering from mail order houses? Who will educate our 
children? Who will provide for fire protection and law enforcement and 
the landfills? If they continue to grow as fast as they are growing 
right now, compared to Main Street merchants, that is where we are 
headed.
  The Senator from Maine--do not misunderstand me--I am not quarreling 
with the Senator from Maine. They have L.L. Bean in their State doing 
almost $1 million a year. I understand we all protect our own local 
interests, but you want to say to a lot of those people, ``You are 
getting your sales tax from the biggest mail order house in the 
country, but nobody else is.''
  Is it fair for people to get this sudden notice when they thought 
they bought merchandise with no sales tax? Is it fair for them to 
suddenly get a notice from the State Revenue Department because their 
next door neighbor squealed on them for buying that oriental rug out of 
New York? It is patently unfair to the purchaser to suddenly find out 
that he owes a big tax bill that he was told by the mail order house 
that he would not have to pay.
  So far as the burden is concerned, I want Senators to listen to this. 
These are not my words. These are Fingerhut's words, last quarter of 
1993, Fingerhut in their annual report to their stockholders:

       To the extent that any States are successful in requiring 
     use tax collection the cost of the company's business, doing 
     business, could be increased although it does not believe any 
     increase would be material.
  Lands' End, probably the first quarterly report of 1994,

       Although collecting use taxes would likely influence the 
     buying decisions of some customers, the company believes 
     there would be no material adverse affects on financial 
     results.
  They are two of the biggest ones in the United States saying, ``We do 
not think the imposition of the collection of these sales taxes will 
affect our profits.''
  Finally, why are we doing this now? Because until 1992, we could not. 
In 1967 the Supreme Court said in the famous case of Bellas Hess, a big 
mail order catalog house, the Supreme Court said the States may not 
impose a tax on mail order catalog houses because it would constitute 
an undue burden on commerce, interstate commerce, as prohibited by the 
Constitution, and would also be a violation of the due process clause 
of the 14th amendment. That was in 1967. Nobody can do anything because 
the Supreme Court said they could not.
  In 1992 in the case of Quill versus North Dakota, the Supreme Court 
reversed half of that and said, ``We no longer believe that the 
imposition of a tax by the States on mail order houses is a violation 
of due process.'' Since the determination as to what burdens interstate 
commerce can be determined by Congress, it is now up to Congress to 
pass a law, if they choose, that allows the States to impose this tax 
on this roughly 825 mail order houses.
  So in 1992, the Supreme Court said, ``Congress, it's up to you. If 
you want to help the States and the States want to impose this sales 
tax collection burden on the mail order houses, like they do on that 
poor Main Street merchant, Congress is going to have to pass a law 
enabling them to do it.''
  So it has only been since that 1992 Supreme Court decision that we 
have had the authority to allow the States to do this.
  Mr. President, if we cannot pass this, I hope I do not hear anymore 
whining, groaning, moaning, and gnashing of teeth about unfunded 
mandates on the States when you refuse to help the States collect a 
legitimate tax to deal with unfunded mandates and a whole host of other 
problems.
  And if this bill does not pass, I hope I do not hear any moaning 
about the poor small business people in this country, how we ought to 
do something for the small business people. Everybody is always willing 
to do something for small business people as long as it does not affect 
big business people.
  Mr. President, I ask unanimous consent that a letter from Ray Jones, 
owner of Long Beach Yacht Sales, Long Beach, CA; a letter from Mamie R. 
Willis, Portland, TN, the sad recipient of a pretty good sized order 
only to find out that she owed the sales tax; White Furniture Co. in my 
own home State from Debbie White, who talks about how competitively 
unfair it is for her to have to charge sales tax on furniture sold all 
over town and people ordering furniture from mail order 
[[Page S3848]] houses and paying no sales tax; and finally a letter 
from an ordinary citizen, John Dix, who bought a house full of 
furniture in North Carolina, almost $10,000 worth, and suddenly was 
slapped with a tax bill of $700 that he and his wife never dreamed even 
existed. If you want to stop all of that, fine.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:


                                       Long Beach Yacht Sales,

                                 Long Beach, CA, January 18, 1994.
     Attention: Mr. Stan Fendley, Tax Council
     Hon. Senator Bumpers,
     Chairman, Committee on Small Business,
     Russell Senate Office Building, Washington, DC.
       Thank you, in advance, for your sponsorship of legislation 
     regarding the collection of interstate sales tax. This week 
     we lost a $240,000 deal as a result of a sales tax issue. 
     They buyer bought a boat in Oregon to avoid our local and 
     state sales tax. The vessel will be kept out of state for the 
     required period of time and will be subsequently brought into 
     California after the waiting period has elapsed. Based on our 
     local tax rate of 8.25% the resulting tax would have been 
     $19,800.
       Not only did we (and the State) lose this deal, but we also 
     lost the time and expenses involved in upselling the customer 
     to a more expensive boat (from $140,000 to $240,000), sea 
     trialing the boat and providing extensive consultation 
     regarding the product. The customer thanked us but basically 
     said for $19,800 he would have to make an economic choice to 
     buy elsewhere. We did not have the margin to discount the 
     product further to even attempt to compete.
       In todays economic environment it is tough enough to 
     succeed but without some form of a fair interstate sales tax 
     collection program we, as a responsible and law abiding 
     dealership, can not compete fairly against some of our out of 
     state competitors that are not required to collect sales tax 
     or tax at a significantly lower rate.
       Again, thank you for sponsoring this important piece of 
     legislation. Hopefully this will create a fair arena in which 
     we can compete. As always, please feel free to contact me 
     with any questions or comments that you may have.
           Sincerely,
                                                        Ray Jones,
     Owner.
                                                                    ____

                                  Portland, TN, September 8, 1994.
     Senator Dale Bumpers,
     Russell Senate Office Building, Washington, DC.
       Dear Senator Bumpers: When I moved from Nashville to a 
     small town a number of years ago, I discovered the 
     convenience of mail-order buying. I buy several hundred 
     dollars worth of merchandise per year. I am 75 years old and 
     can no longer drive to the city to shop. I know there are 
     probably thousands in my situation.
       Several months ago I heard on our local news that people 
     purchasing goods from mail order catalogs must pay State 
     sales and use tax on these items. That was news to me. I, and 
     I know many others, have always thought that merchandise 
     purchased outside our state was not subject to sales tax 
     unless such a vendor had a store within our state.
       Since I have always tried to be a law-abiding citizen, I 
     added up from my records all purchases made in recent years, 
     figured the sales tax, and mailed a check to the State 
     Department of Revenue. But what about those many people who 
     still do not know they are liable for these taxes? This 
     situation makes it unfair to those who are paying.
       I once ordered many Christmas gifts from catalogs. Now I am 
     inclined to send money to my out-of-town relatives, avoiding 
     the hassle of tax-record keeping.
       I believe it is the duty of mail order companies to collect 
     sales taxes due, just as other stores and grocers do. Modern-
     day computers certainly make it easy for them.
       I understand you are working on legislation to correct this 
     situation. I hope you will succeed.
           Sincerely yours,
     Mamie R. Willis.
                                                                    ____

                                          White Furniture Co.,

                                                 January 19, 1994.
     Senator Dale Bumpers,
     Dirksen Building, Washington, DC.
       Dear Senator Bumpers: I want to make you aware of an unfair 
     tax situation that has been occurring for years in the 
     furniture business. For quite some time we tried to ignore 
     this, but when you see or hear the results every day of the 
     week you have to finally stop and take notice.
       My family has a small retail furniture business in 
     Arkansas. We have paid taxes in the same small town for 
     years. Now we have customers who are being educated by 
     advertisers to shop their local retail stores for model 
     numbers and prices--then call North Carolina and order and 
     avoid paying our state sales taxes.
       I have personally lost individual sales in my area for 
     fifteen to twenty thousand dollars. We have found that the 
     larger sales are the ones that people do out of state because 
     of the high percentage of tax.
       I'm not crying about the prices; I would just like to have 
     a level playing field. We service our clients with free 
     delivery; we furnish the showrooms where they can touch and 
     feel the merchandise; we finance the merchandise locally, and 
     we employ Arkansas people to sell and deliver the furniture.
       Last year NBC did a travel segment and, on over 200 
     stations across our country, showed people how to take their 
     vacations in North Carolina, shop while they are there and 
     save enough in sales tax to pay for their vacation. Then CBS 
     did a week long special on ``Good Morning America,'' devoting 
     one day to furniture, one to cars, and another to clothes, 
     etc.
       I don't know about the other 49 states, but I do know that 
     our state could use the revenue from those lost sales taxes 
     for our schools, roads, and local government.
       I will be proud to support you in any effort you can make 
     to help our state collect these unpaid taxes.
           Thank you.
     Debbie White.
                                                                    ____

                              Hilton Head, SC, September 12, 1994.
     Hon. Dale Bumpers,
     Chairman, Committee on Small Business,
     U.S. Senate, Washington, DC.
       Dear Senator Bumpers: While on a trip to North Carolina a 
     few years ago, my wife and I visited a furniture store to 
     look for items for our winter home in Hilton Head, South 
     Carolina. As you are no doubt aware, North Carolina is the 
     furniture center of America. People come from all over 
     America to buy furniture in North Carolina, drawn by word of 
     mouth and various means of advertising.
       As we shopped at one store in High Point, my wife and I 
     found a number of furniture pieces that we were interested in 
     buying. While considering the purchase, we were told by the 
     sales staff that if this furniture were delivered to our home 
     in South Carolina, no sales tax would be collected. This 
     represented a savings of several hundred dollars, and became 
     one factor in our decision to make the purchase. 
     Subsequently, we concluded the purchase agreement, and the 
     furniture was delivered to our home in South Carolina a short 
     time later.
       Approximately four years after making that purchase, we 
     were surprised to receive a letter from the South Carolina 
     Department of Revenue informing us that the furniture we had 
     purchased in North Carolina was subject to South Carolina's 
     use tax. (South Carolina had learned about the purchase when 
     North Carolina audited the furniture company and shared the 
     audit information with South Carolina.) In addition to the 5 
     percent tax, we owed interest and penalties because we had 
     failed to pay the tax promptly. On our furniture of some 
     $10,000, the total we owed for tax, interest and penalties 
     was approximately $700.
       As you can imagine, we were shocked and upset at this news. 
     We had no idea that we owed tax on this purchase. Like most 
     consumers, we were accustomed to having sales taxes collected 
     at the time of purchase, and it seemed odd to expect the 
     customer to know when, where and how much tax to pay. And 
     because the furniture salesman had told us that no tax would 
     be ``collected,'' we assumed that no tax existed.
       I am not complaining about the tax itself. I certainly do 
     not enjoy paying taxes, but had we known about this tax at 
     the time of purchase, it wouldn't have been so bad. In that 
     case, we could have considered the tax as part of the cost of 
     the transaction and then made an
      informed decision about whether to make the purchase or not. 
     Indeed, it's quite possible that we would still have 
     bought the furniture. But we were blindsided. We were led 
     to believe that there was no tax, then told four years 
     later that there was a tax. That simply is not fair.
       The worst part of this situation is that we were expected 
     to pay interest and penalties. As I told the South Carolina 
     Department of Revenue, I felt that this was particularly 
     unreasonable since we didn't even know we owed the tax--and 
     they didn't know we owed the taxes for four years. In the 
     end, I won half the battle: they agreed to waive the 
     penalties, but we still had to pay the interest.
       I understand that the State of South Carolina cannot 
     control what North Carolina merchants tell their customers. 
     But the United States Congress can and should do so. I urge 
     you to pass legislation immediately correcting this situation 
     so that other consumers do not have the same bad experience 
     we had.
       In my opinion, you should require merchants who ship goods 
     to other states to inform those customers that taxes may 
     apply. The disclosure should be in writing, and the 
     customer's signature should be required. Any merchant who 
     fails to give the disclosure should have to pay 50 percent of 
     any penalties or interest that occur. I believe this would 
     discourage companies from failing to share important 
     information with the consumer.
       Thank you for the opportunity to share my thoughts with you 
     on this issue. I hope that you will move quickly to ensure 
     that other consumers aren't misled the way my wife and I 
     were.
           Sincerely,
                                                         John Dix.
     

                          ____________________