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Mr. Chairman, on behalf of the private sector solid waste management

industry, I appreciate the opportunity to testify today on proposed interstate

waste legislation. I am Bruce Parker, Executive Vice President of the National

Solid Wastes Management Association (NSWMA). NSWMA represents private

sector companies that collect and process recyclables, own and operate compost

facilities and collect and dispose of municipal solid waste. NSWMA members

operate in all fifty states.

The solid waste industry is a $43 billion industry that employs more than

350,000 workers. We are proud of the job we do and proud of the contribution

our companies and their employees make in protecting the public health and the

environment. America has a solid waste management system that is the envy of

the world because of our ability to guarantee quick and efficient collection and

disposal of trash in a manner that fully conforms with state and Federal waste

management laws and regulations..2

Our members provide solid waste management services in a heavily

regulated and highly competitive business environment. Like all businesses, we

are keenly interested in proposals, such as restrictions on the interstate

movement of MSW, that would change that regulatory or competitive

environment, increase the cost of waste disposal and threaten the value of

investments and plans we have made in reliance on the existing law.

The message I want to leave with you is this: restricted borders have no

legitimate place in managing trash or any other product in our economy. They do

not make economic or environmental sense. They are contrary to the concept of

open borders; contrary to the evolution to bigger, better, more environmentally

sound disposal facilities; contrary to our desire to keep disposal costs for

taxpayers low, and contrary to the trend toward more innovative, flexible, waste

management facilities.

In the balance of this statement, I will share with you our reasons for

concern and opposition to H. R. 1213, the "Solid Waste Interstate Transportation

of 2001", H.R. 1214, the "Municipal Solid Waste Flow Control Act of 2001" and H.

R. 1927, the "Solid Waste International Transportation Act of 2001". I will discuss

the background and context as we see it, and the flaws in the proposed

legislation. In particular, detailed comments on H.R. 1213 are set forth in an

attachment to this statement.

Interstate waste shipments are a normal part of commerce. In spite of all

the impassioned language you have heard from a few states denouncing.3

garbage that moves across state lines, the reality is simple: most states import

and export garbage and none are harmed in the process.

According to "Interstate Shipment of Municipal Solid Waste: 2001

Update", which was released by the Congressional Research Service (CRS) in

mid-July, 30 million tons of MSW crosses state borders. This equals

approximately 13% of the garbage generated in the United States and about

18% of the garbage disposed of in the United States.

These shipments form a complex web of transactions that often involve

exchanges between two contiguous states in which each state both exports and

imports MSW. In fact, the vast majority of MSW, more than 80%, goes to a

disposal facility in a neighboring state. According to the CRS report, 24 states,

the District of Columbia and the province of Ontario exported more than 100,000

tons of solid waste last year. At the same time, 28 states imported more than

100,000 tons. Fifteen states imported and exported more than 100,000 tons.

The CRS report documents interstate movements of MSW involving 49 of

the 50 states. Forty-six states, the District of Columbia and one Canadian

province export and 42 states import. Attached is a map showing the movement

of solid waste among the states based on the data in the CRS report.

Moreover, while some states are the biggest exporters based on tonnage,

several small states and the District of Columbia are highly dependent on waste

exports. In addition to Washington, DC, which exports all of its MSW, Maryland,

New Jersey and Vermont export the highest percentage of solid waste. The

reality is that MSW moves across state lines as a normal and necessary part of

an environmentally protective and cost effective solid waste management.4

system. Like recyclables, raw materials and finished products, solid waste does

not recognize state lines as it moves through commerce.

CRS cites a number of reasons for interstate movements. These include

enhanced disposal regulations and the subsequent decline in facilities. In

addition, CRS notes that in larger states "there are sometimes differences in

available disposal capacity in different regions with the state. Areas without

capacity may be closer to landfills (or may at least find cheaper disposal options)

in other states."

The CRS report notes that the number of landfills in the US declined by

51% between 1993 and 1999 as small landfills closed in response to the

increased costs of construction and operation under the Resource Conservation

and Recovery Act (RCRA) Subtitle D and state requirements for more stringent

environmental protection and financial assurance. The number of landfills in the

early 1990s was nearly 10,000 while today there are about 2,600 and the total

number continues to decline as small landfills close, and communities in

"wastesheds" turn to state-of-the-art regional landfills that provide safe,

environmentally protective, affordable disposal.

Construction and operation of such facilities, of course, requires a

substantial financial investment. By necessity, regional landfills have been

designed in anticipation of receiving a sufficient volume of waste from the

wasteshed, both within and outside the host State, to generate revenues to

recoup those costs and provide a reasonable return on investment..5

It was widely recognized that the costs to most communities of Subtitle D-compliant

"local" landfills were prohibitive. The development of regional landfills

was not only entirely consistent with all applicable law, it was viewed and

promoted by Federal and State officials and policy as the best solution to the

need for economic and environmentally protective disposal of MSW.

These regional landfills provide safe and affordable disposal as well as

significant contributions to the local economy through host fees, property taxes,

and business license fees. Additional contributions to the communities include

free waste disposal and recycling services, and in some cases assumption of the

costs of closing their substandard local landfills. These revenues and services

enable the host communities to improve and maintain infrastructure and public

services that would otherwise not be feasible.

NSWMA is not alone in opposing restrictions on interstate waste. The

Solid Waste Association of North America (SWANA), which represents public

sector solid waste managers, also opposes these restrictions. At its mid-year

meeting last summer, SWANA’s International Board of Directors voted

unanimously to approve a policy statement that supports "the free transboundary

movement of solid waste".

Public sector waste managers and private sector waste management

companies agree that they can’t do their job and protect the public health and the

environment while having their hands tied by artificial restrictions based on state

lines..6

MSW also moves across state lines because some communities invite it

in. Many communities view waste disposal as just another type of industrial

activity, as a source of jobs and income. As noted above, these communities

agree to host landfills and in exchange receive benefits, which are often called

host community fees, that help build schools, buy fire trucks and police cars, and

hire teachers, firemen and policemen and keep the local tax base lower.

The proposed legislation before you would radically disrupt and transform

the situation I have described. For that reason, as well as the precedential

nature of some of the provisions, let me suggest that you consider those bills in a

broader context.

The applicability of the Commerce Clause to the disposal of out-of-State

waste is well established by a long line of U.S. Supreme Court decisions

spanning more than a quarter of a century. As you probably know, the original

decision protected Pennsylvania’s right to export its garbage to a neighboring

state. The Court has consistently invalidated such restrictions in the absence of

Federal legislation authorizing them.

Throughout this period, private sector companies did what businesses do:

they made plans, invested, wrote contracts, and marketed their products and

services in reliance on the rules which clearly protected disposal of out-of-State

MSW from restrictions based solely upon its place of origin.

In this fundamental sense, the interstate commerce in waste services is

like any other business, and proposed legislation to restrict it should be evaluated.7

in the broader context of how you would view it if its principles and provisions

were made applicable to other goods and services, rather than just garbage.

Consider, for example, parking lots. Suppose a State or local government

sought Federal legislation authorizing it to ban, limit, or charge a differential fee

for parking by out-of-State cars at privately owned lots or garages, arguing that

they were using spaces needed for in-State cars, and that the congestion they

caused was interfering with urban planning, etc. Or suppose they asked for

authority to tell privately owned nursing homes or hospitals that they couldn’t

treat out-of-State patients because of the need to reserve the space, specialized

equipment, and skilled personnel to meet the needs of their own citizens. Similar

examples can easily be identified--commercial office space for out-of-State

businesses, physicians and dentists in private practice treating out-of-State

patients, even food or drug stores selling to out-of-State customers.

I would hope that in all of these cases, you would respond to the

proponents of such legislation by asking a number of questions before

proceeding to support the restrictions: What kind of restrictions do you want?

Are they all really necessary? Can you meet your objectives with less damaging

and disruptive means? What about existing investments that were made in

reliance on the ability to serve out-of-State people? What about contracts that

have been executed to provide that service? Would authorizing or imposing

such restrictions be an unfunded mandate on the private sector providing those

services, or on the public sector outside the State that is relying on them? Would

such restrictions result in the diminution of the value of property purchased in

reliance on an out-of-State market, and thereby constitute a "taking"? Will the.8

restrictions be workable and predictable? I respectfully suggest that you ask the

same questions about the proposed legislation involving restrictions on interstate

MSW.

The proposed legislation before you (H.R. 1213, H.R. 1214 and H.R.

1927) fail to protect host agreements, investments or contracts. None of the bills

preserves an opportunity to enter and grow in a market that demands economic

and protective waste disposal. And none of the bills provides predictability about

the rules that will apply to interstate shipments of waste. The array of

discretionary authorities for Governors to ban, freeze, cap, and impose fees, and

then change their minds over and over again, promises to result in chaos and a

totally unpredictable and unreliable market and waste disposal infrastructure. In

the worst case, hasty state action to ban or limit imports could lead to a public

health crisis in exporting states if their garbage has no where to go. As noted

earlier, attached to this statement is a detailed analysis of the many flaws that I

see in the provisions of H. R. 1213.

Finally, let me comment briefly on H.R. 1214, which would restore flow

control authority, and on H.R. 1927, which would allow states to prohibit the

importation of MSW form Canada and Mexico, signatories with the United States

to the North American Free Trade Agreement.

NSWMA opposes restoration of flow control because it’s too late to put

landfills and transfer stations have been constructed, trucks have been bought,.9

people have been hired, contracts have been written, and both the consumers

and providers of waste services have experienced the benefits of a competitive

market. These investments and arrangements cannot be undone, nor should

they be. The facilities that benefited from an uncompetitive monopolization of

local solid waste management have learned to compete in a free market. They

have become more efficient and competitive as a result of the rigors of the free

market system. Why would anyone want to replace a competitive system with

uncompetitive monopolies?

H. R. 1927, the Solid Waste International Transportation Act of 2001,

would allow states to ban solid waste from other countries. This legislation is

aimed directly at Canadian exports. As such, it is inconsistent with the national

treatment requirement of the North American Free Trade Agreement (NAFTA)

which provides that Mexico, Canada and the United States must treat goods from

one another in a manner that is no less favorable than that accorded to

domestically produced like products. This requirement of national treatment

extends to states.

MSW may not be everyone’s favorite commodity, but it is protected by the

same free trade provisions that protect paper and cars and television sets. If we

could close our borders to Canadian solid waste, what would prevent Canada

from closing its borders to American hazardous waste? American exports of

hazardous waste to Canadian disposal facilities have increased dramatically over

the last five years. If Michigan can ban Canadian MSW, should not the

Canadians be allowed to ban Michigan hazardous waste?.10

Thank you, Mr. Chairman. That concludes my statement.

Attachments.11

HR 1213 would abrogate contracts, diminish the value of private property

and investments, void decisions by local governments, increase the cost of waste

disposal, and disrupt existing and planned arrangements for waste disposal

services. These problems are illustrated by the provisions discussed below in the

order in which they appear in the bill.

Federal ban on receipt of out-of-State (OOS) municipal solid waste (MSW)

unless the landfill or incinerator is exempted from the ban (1) as a result of a

Host Community Agreement (HCA) approving receipt of OOS MSW, (2)

because it has a permit authorizing its receipt, or (3) because it has entered into

a binding contract for a specific quantity of OOS MSW. All three of these

purported exemptions are either much more limited than they appear or entirely

illusory, as discussed below.

The ban is apparently effective immediately upon enactment of the new

section. As a result, every community in the nation that hosts a facility without an

HCA, permit or contract for receipt of OOS MSW will be required by Federal law

to expend the time and money to conclude an HCA in accordance with the

elaborate and extensive requirements of proposed new section 4011(c), if it

wants the facility to be able to receive OOS waste. This Federal requirement to

spend time and money would be imposed even if the community had no desire to

limit receipt of OOS MSW. The immediate effectiveness of the ban means that

the flow of OOS MSW to facilities in those communities will be immediately and

entirely cut off until they conclude the HCA process.

Moreover, even those communities that have concluded an HCA or host

facilities that have permits or contracts will be at risk as well, since there is no

provision for resolving potential disputes about whether the facility is exempt from

the ban. What agency enforces the ban? What is the penalty for violation of the

ban? What courts have jurisdiction over disputes about the validity of HCAs,

permits, or contracts? What happens to the flow of waste while the dispute is

pending in the courts?

federal ban are contingent on the facility being in "compliance" with Federal and

State laws and regulations (subsection (e)) and with all of the terms and

conditions of a permit authorizing receipt of OOS MSW (subsection (d)(1)(A)), as

well as the terms and conditions of the HCA (subsection (b) and (c)). This is a

giant loophole, since the terms are not defined. Unless they are adequately

defined, arbitrary and capricious action by State officials could lead to closure of

a facility to all OOS MSW because of a litter violation, a one-day delay in filing of

a required report, or other minor infraction. Moreover, there is no mechanism for.12

disputing the alleged non-compliance or any requirement that it be proven. A

mere allegation of non-compliance would appear to suffice.

states to enact laws governing the entry by an affected local government into an

HCA. There is no requirement that such laws be consistent, or not inconsistent,

with the provisions of the section. Thus, for example, a State might enact a law

requiring approval of a proposed HCA by the governor or legislature of that State,

or impose other requirements that would effectively preclude HCAs.

contracts entered into before March 27, 2001 are explicitly protected from the

ban by subsection (d)(1)(B)). In addition to the fact that this means that no

subsequent contracts would be protected, even if the bill is not enacted for more

business planning and cash flow considerations will ensure that this will almost

never be the case, the protection is illusory. Moreover, even if there is permitted

capacity for the total volume of waste to be received during the life of the

contract, the subsection establishes a new federal law of contracts that denies

protection to contract renewals and extensions, even if they are not "novations"

of the contract, and even if they would be protected under state law.

(f) would allow a State or affected local government to freeze at 1993 levels the

amount of OOS MSW that an unprotected facility may receive. These are the

facilities that are exempt from the ban because they received OOS MSW in

1993, but they do not have the required HCAs or permits authorizing receipt of

OOS MSW.

A fundamental question arises as to whether a State could freeze receipts

at facilities that do not have the requisite HCAs, permits, or contracts that would

exempt them from the ban. The text of the subsection (a) Federal ban applies to

all facilities unless they are specifically exempted. Thus, what facilities would be

subject to the freeze rather than the ban?

In addition, for those facilities that are subject to the freeze, as is the case

with exemptions from the ban, the exemptions are more apparent than real

because a facility with an HCA is protected only if it had permitted capacity at the

time of entering into the HCA to receive all of the OOS MSW authorized by the

The owner or operator of the facility must be able to document the "identity

of the generator" of OOS MSW that was received in 1993. Assuming that this

requires the names of each person from whom such waste was collected, it.13

imposes an impossible burden and guarantees that all facilities will be subject to

the ban, not the freeze.

granted by other provisions of the bill for facilities with HCAs, permits, or "naked

grandfather" status to receive OOS MSW by giving State permitting officials the

power to deny permits for construction of new facilities and expansions of

existing facilities if the officials determine that there is no local or regional need

for the facility. Subsection (k) "immunizes" such a denial from lawsuits based on

the Commerce Clause.

The effect of this text would be to allow a State to discriminate against

OOS MSW by denying permits for landfills or incinerators that would receive

waste from outside the State, since the local area or region in the State would not

"need" a facility for that out-of-State waste. This would make a nullity of any

protection that might otherwise be gained from the rest of the bill, In the midst of

widespread efforts to eliminate barriers to entry so as to promote competitive

markets in virtually every sector of the economy, this proposal would move in

would be given a monopoly, free from competition from "unneeded" capacity.

Moreover, how will the central planners pick which facility gets a permit when and

if they decide that new capacity is needed? .

by other provisions of the bill. It authorizes any State to adopt a law that caps the

amount of OOS MSW that may be received under permits issued after

enactment at 20 percent of all MSW received annually. This would be a severe

problem for regional landfills and incinerators for which there would simply not be

sufficient in-State waste to sustain adequate operations.

Subsection (b)(2) exempts from the caps receipts at facilities that entered

MSW that may be received. Since few, if any, HCAs specify an amount, the

effect of this paragraph is to deny any protection to pre-enactment HCAs.

Moreover, since it makes no mention of post-enactment HCAs, it appears that

they would be of no value in escaping a 20 percent cap, even if they did specify

an amount. The combined effect of these provisions is to eliminate any reason to

negotiate HCAs after enactment, and to so severely curtail operations as to

eliminate existing regional facilities with HCAs.

allows States with comprehensive recycling programs to freeze receipts of OOS

MSW at the levels facilities received in 1995, the year before Wisconsin’s law

waste authorized by the HCA—a null set..14

local government" that is authorized to enter into an HCA and thereby exempt a

facility from the ban and perhaps the freeze on its receipt of OOS MSW.

The text defines affected local government as the planning entity in all

cases unless there is none authorized by State law, rather than the elected

officials of the city, town, etc. with whom HCAs have traditionally been entered.

This failure to recognize any but the planning body is artificial and a radical

departure from all previous versions of proposed legislation on this subject,

including the texts of H.R. 4779 that passed the House September 28, 1994, S.

2345 that passed the Senate September 30, 1994, S. 2345 that passed the

House by unanimous consent on October 7, 1994, and S. 534 that passed the

Senate on May 16, 1995. All of these texts allowed HCAs with either entity

before enactment.

governments before enactment of any legislation. Their decisions on behalf of

the people most directly affected by OOS MSW would be vetoed by the Federal

legislation requiring that the time and money spent on public hearings and

deliberations be cast aside, and that they effectively beg for approval from the

MSW planning body to decide and determine their own best interests.

"MSW" includes C&D waste from "structures".

The effect of this text would be to subject all C&D waste to an unworkable

regime that will increase the costs of its disposal for the following reasons:

"structure"? Is the pavement at a drive-in food store or gas station, or the

parking lot for an apartment building or store included as debris from

"structures" when they and their associated buildings are constructed,

repaired, or demolished? What about mixed loads from those sources, or

from the sites of the Florida hurricane, Los Angeles earthquake, or Midwest

floods?

and covered by a ban or limit when it arrives in a truck at the landfill?

of the MSW covered by the bill hazardous waste listed under section 3001, but

waste regulated under the Toxic Substances Control Act is not excluded. The

failure to expressly do so suggests that receipt of OOS TSCA-regulated waste at

any landfill or incinerator is subject to the bans and limits of the bill..15

this problem, industrial, non-hazardous waste is not excluded from coverage

under the bill. Subsection (m)(3)(B)(v) excludes only that industrial waste that is

sent to a "captive" facility owned by the generator or its affiliate. All other non-hazardous

industrial waste generated by manufacturing or industrial processes

would be subject to the bans and limits of the bill. The result would be a drastic

reduction in the amount of industrial waste moving in competitive interstate