Amicus Curiae Brief — A. A. & M. Carting Service, Inc. v. Town of Babylon

MOTION FILED

6) 95-1208

MAR 1 199%

No.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1995

A. A. & M. CARTING SERVICE, INC.; FARMINGDALE

CARTING, INC.; NATALE PEPE WASTE CORP.; PGS

CARTING CO., INC.; JOSEPH S. CELANO; MARIANNE

CELANO,; JC INDUSTRIES, INC.; C.B.S. RUBBISH CO., INC.;

FARMINGDALE INDUSTRIAL PARK ASSOCIATION;

MINERSFUEL COMPANY, INC.; and RESOURCES

CONSERVATION CORP.,

Petitioners,

vs.

TOWN OF BABYLON, NEW YORK, COMMERCIAL

GARBAGE DISTRICT NO. 2, also known as Commercial Waste

Collecting and Recycling District; TOWN BOARD OF THE

TOWN OF BABYLON; RICHARD H. SCHAFFER; and

BABYLON SOURCE SEPARATION COMMERCIAL, INC.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

MOTION FOR LEAVE TO FILE BRIEF AMICUS CURIAE

AND BRIEF OF AMICUS CURIAE NEW YORK STATE

CONFERENCE OF MAYORS AND MUNICIPAL OFFICIALS

IN SUPPORT OF PETITION FOR WRIT OF CERTIORARI

DONNA M. C. GILIBERTO

General Counsel

Counsel of Record

NEW YORK STATE CONFERENCE OF

MAYORS AND MUNICIPAL OFFICIALS

Attorney for Amicus Curiae

119 Washington Avenue

Albany, New York 12210

(518) 463-1185 |

No.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1995

A. A. & M. CARTING SERVICE, INC.; FARMINGDALE

CARTING, INC.; NATALE PEPE WASTE CORP.; PGS

CARTING CO., INC.; JOSEPH S. CELANO; MARIANNE

CELANO; JC INDUSTRIES, INC.; C.B.S. RUBBISH CO., INC.;

FARMINGDALE INDUSTRIAL PARK ASSOCIATION;

MINERSFUEL COMPANY, INC.; and RESOURCES

CONSERVATION CORP.,

Petitioners,

vs.

TOWN OF BABYLON, NEW YORK, COMMERCIAL

GARBAGE DISTRICT NO. 2, also known as Commercial Waste

Collecting and Recycling District, TOWN BOARD OF THE

TOWN OF BABYLON; RICHARD H. SCHAFFER; and

BABYLON SOURCE SEPARATION COMMERCIAL, INC.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

MOTION FOR LEAVE TO FILE BRIEF AMICUS CURIAE

The New York State Conference of Mayors and Municipal

Officials (“NYCOM”) respectfully moves this Court,

pursuant to Rule 36.3, for leave to file the attached brief

amicus curiae in support of the petition for certiorari in this

case. The consent of attorney for the petitioners has been

obtained. The consent of attorneys for the respondents was

requested and received.

NYCOM is a _ not-for-profit, voluntary membership

association for the cities and villages of the State of New

York, which has as its goal the promotion of efficient

municipal government. NYCOM’s current membership

consists of all of the State’s 62 cities and 496 of its 558

villages, thereby representing the great majority of such

municipalities.

In cooperation with cities and villages, NYCOM advocates

and supports legislation, participates in litigation and provides

information and education beneficial to the administration of

municipal affairs and opposes legislation detrimental to cities

and villages and the people therein. NYCOM also has a vital

interest in the outcome of this and other cases dealing with the

issue of flow control because such decisions have begun to

chip away at the United States Supreme Court decision in C

& A Carbone, Inc. v. Town of Clarkstown, 114 S. Ct. 1677,

399 L.Ed.2d 128 (1994) with the ultimate and substantial

effect of depriving NYCOM members of the ability to

contract freely for solid waste disposal services inside and

outside of New York. This ability to contract freely is

essential to the effective functioning of local governments.

NYCOM has, on numerous occasions, expressed its

opposition to flow control legislation to the former and

current governors of New York State and to the State’s

legislative and congressional members. On March 1, 1995 and

March 23, 1995 NYCOM Executive Director Edward C.

Farrell delivered testimony before the U.S. Senate Subcom-

mittee on Superfund, Waste Control and Risk Assessment,

and the U.S. House of Representatives Subcommittee on

Commerce, Trade and Hazardous Materials, respectively, on

the issue of congressional authorization of flow control.

Amicus App. A-1 and A-11.

Opposition to federal and state legislation which would

authorize enactment of flow control provisions is a prominent

plank of NYCOM’s 1996 Legislative Program. NYCOM’s

primary aim is to safeguard those municipalities and public

agencies obtaining “flow control” powers from using them to

raise general fund revenues by mandating the disposal of solid

waste at “tipping fee” rates higher than the municipalities’

actual disposal costs.

The authority to enact local flow control legislation has

been granted to nearly half of New York’s counties and to a

smaller number of towns, cities and villages. NYCOM

members represent that level of government most directly

involved in the collection of solid waste, and which thereby

are most directly affected by flow control legislation.

NYCOM was an amicus curiae in the case of Town of

North Hempstead v. Village of Westbury, 618 N.Y.S.2d 226

(N.Y. App. Div. 1994), appeal withdrawn, 647 N.E.2d 455

(N.Y. 1995) which involved the constitutionality of a flow

control ordinance in the Long Island, New York town of

North Hempstead. Most notably, NYCOM was among the

amici curiae in C & A Carbone, Inc. v. Town of Clarkstown,

114 S. Ct. 1677, 399 L.Ed.2d 128 (1994) in which the United

States Supreme Court invalidated a flow control scheme

virtually identical to the one at issue in the present case.

In the months following the Carbone decision we have

witnessed three decidedly different courses of conduct. On the

positive side, the Carbone decision provided cities and

villages with what they were seeking at the beginning: a seat,

as well as a voice, at the negotiating table. In other cases, it

resulted in lower and more responsible rates for garbage

disposal. Where the Carbone decision was adhered to, we saw

the return of competition to the garbage disposal business as

those who previously used flow control for their own

economic gain were forced to reevaluate their finances.

The negative course of conduct has included various

attempts to undermine, circumvent, and subvert the Carbone

decision, either by ignoring the decision of this Court, or by

enacting a new regulatory/contractual scheme such as in the

Town of Babylon. While in some cases, the failure to adhere

to Carbone can be blamed on ignorance, in most cases, this

failure has been deliberate.

iv

The third course of conduct was undertaken by proponents

of flow control who heeded Justice O’Connor’s concurrence

in Carbone, and mounted a fierce congressional campaign to

authorize states to permit flow control legislation. Proponents

enjoyed a major victory when the U. S. Senate passed a bill

on May 16, 1995 - the first anniversary of the Carbone

decision. However, this effort, which spanned almost two

years, was Lrought to an end on January 31, 1996 when the

House of Representatives rejected flow control by a 272-149

vote.

This case raises an important issue for NYCOM members.

NYCOM represents that level of government - cities and

villages - most directly involved in the collection of solid

waste, and thereby the most directly affected by flow control.

Flow control has been hailed by some as a necessary planning

tool guaranteeing a steady flow of waste to a specific solid

waste facility to finance the costs of that facility. In most

cases, it is NYCOM’s members which are subsidizing these

expensive facilities through corresponding increases in the

local real property tax. Traditionally, local governments in

New York rely upon the local real property tax as their main

source of revenue and the primary method for financing solid

waste disposal. Approximately 65 percent of the cities and

villages are currently financing their disposal costs through

municipal taxes, while another 15 percent impose user fees.

Flow control adds unnecessary spending to a city or village’s

bottom line. While in New York, counties and some towns

are legislatively charged with solid waste planning, that

charge does not require that the county or town become the

ultimate disposal site for all of the garbage generated within

the jurisdiction. Additionally, flow control deprives local

governments of the ability to contract freely for solid waste

disposal services inside and outside of New York. This ability

to contract freely is essential to the effective functioning of

local governments.

The judgment below, if allowed to stand, will act as a

“green light” to the owners and operators of solid waste

facilities to continue to flaunt the Court’s decision in

Vv

Carbone, despite the recent action of Congress. Without

further direction, the Court can anticipate that the district and

appellate courts will continue to carve out exceptions to

| Carbone based upon local situations and conditions. We

respectfully suggest that the Court cannot permit flow control

proponents to evade Carbone through the “backdoor” when

Congress has clearly chosen not to provide this authority

through the legislative “front door”.

NYCOM submits that the judgment below is wrong and,

unless reversed, will provide a road map to municipalities

| seeking to evade the Carbone decision and to continue to

force trash to go to a local facility.

NYCOM therefore urges this Court to grant the petition for

certiorari in this case and to accept the attached brief to assist

the Court in its resolution of this matter.

Respectfully submitted, |

DONNA M. C. GILIBERTO

General Counsel

Counsel of Record

NEW YORK STATE CONFERENCE

OF MAYORS AND MUNICIPAL

OFFICIALS

119 Washington Avenue

Albany, NY 12210

(518) 463-1185

Attorney for Amicus Curiae

vii

TABLE OF CONTENTS

Page

TAREE, OF AU TIRE Be ccccscsccccsssccvesscvsocsessssevens iX

INTEREST OF AMICUS CURIAE.............::cccccsseceee l

SUMMARY OF ARGUMENT .............:cssscseseeeeseeees 3

IIIT ind tik ccicecheipunccaitiaccnineusieetgbcnateaetinnacteeisinite 4

IIT sh css ssss sincnokassdcaheariannacnaeciosdicdagunnnetnnenss 9

TABLE OF AUTHORITIES

Cases:

Atlantic Coast Demolition & Recycling, Inc. v.

Board of Chosen Freeholders, 48 F.3d 1417 (3d

8 RRS TIES Oe ee 6n.1, 7n.4

Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 104 S.

Ct. 3049, 82 L.Ed.2d 200 (1984) o..cccccceceseeeee. 8

Ben Oehrleins & Sons & Daughter, Inc. v.

Hennepin County, 867 F. Supp. 1430 (D. Minn.

RES HEHAA SOE Rene re ee eT NCC 6n.1, 7n.4

Blue Circle Cement, Inc. v. Board of County

Comm rs, 27 F.3d 1499 (10th Cir. 1994) .000000000.... 6n.1, 7n.4

Bonollo Rubbish Removal, Inc. v. Town of Franklin,

886 F. Supp. 955 (D. Mass. 1995) .........cccccccceceseee. 6n.1, 7n.4

C & A Carbone, Inc. v. Town of Clarkstown, 114 S.

Ct. 1677, 399 L.Ed.2d 128 (1994) ooo occccecceeeeeeeee passim

(Town of ) Clarkstown v. C & A Carbone, Inc., 617

N.Y.S.2d 482 (N.Y. App. Div. 1994)... ill,

6n.2, 7n.4

Davis Clarkco Landfill Company v. Clark Cty Solid

Waste Management Dist., 653 N.E.2d 646 (Ohio

ar ares cnineiecsnassdealepaiadiaaiabiasesdsiiaieenictididhetcaniaemtiactsadl 6n.2, 7n.4

Delaware County v. Raymond T. Opdenaker &

Sons, Inc., 652 A.2d 434 (Pa. Commw. Ct. 1994).6n.2, 7n.3

Empire Sanitary Landfill, Inc. v. State, 645 A.2d

413 (Pa. Commw. Ct. 1994) occ ececccceeeeeeeeee 6n.2, 7n.4

Environmental Waste Reductions, Inc. v. Reheis,

887 F. Supp. 1534 (N.D. Ga. 1995) 0... eee 6n.1, 7n.4

Grand Central Sanitation, Inc. v. City of Bethlehem,

1994 WL 613674 (E.D. Pa. 1994) oceans 6n.1;7n.3

Cases: Page

Harvey & Harvey, Inc. v. County of Chester, 68

F.3d 788 (3d Cir. 1995), petition for cert. filed,

64 U.S.L.W. 3510 (U.S. Jan. 16, 1996) (No. 95-

8 EEF Picsceccsqcsssetesaninienmnntienissiiisiatecssninintancstiaidinatinnaastiol 6n.1, 7n.3

Hughes v. Oklahoma, 441 U.S. 322, 336, 99 S. Ct.

ee TR eee 8

Hunt v. Washington State Apple Advertising

Comm'n, 432 U.S. 333, 97 S. Ct. 2434, 53

Rn UE GAIT T iicccnserceiinintaieenniidinendibaniinanntiganes 8

Kleenwell Biohazard Waste and General Ecology

Consultants, Inc. v. Nelson, 48 F.3d 391 (9th Cir.

1995), cert. denied, 115 S. Ct. 2580 (1995)........... 6n.1, 7n.4

National Solid Wastes Management Ass'n v. Meyer,

63 F.3d 652 (7th Cir. 1995), petition for cert.

filed, 64 U.S.L.W. 3486 (U.S. Dec. 18, 1995)

BO, Sr cccnicnncenicsestittiniscatinniaiiatanipasaiiaiiail 6n.1, 7n.4

National Solid Wastes Management Ass'n v.

Williams, 877 F. Supp. 1367 (D. Minn. 1995) ......6n.1, 7n.4

(Town of ) North Hempstead v. Village of Westbury,

618 N.Y.S.2d 226 (N.Y. App. Div. 1994), appeal

withdrawn, 647 N.E.2d 455 (N.Y. 1995) ...........+.+ 6n.2, 7n.4

Oregon Waste System v. of

Environmental Quality, 114 S. Ct. 1345 (1994)... 8,9

Philadelphia v. New Jersey, 437 U.S. 617, 98 S. Ct.

BaB 0, DU Cede SEO COOP rrteeemenemnene 8

Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S. Ct.

ee 8,9

Pine Ridge Recycling, Inc. v. Butts County,

Georgia, 855 F. Supp. 1264 (M.D. Ga. 1994).......6n.1, 7n.4

xi

Cases: Page

R & R Disposal Carting, Inc. v. Town of

Clarkstown, 620 N.Y. S.2d 215 (N.Y. 1994) ........ 6n.2, 7n.4

Southcentral Pennsylvania Waste Haulers Ass'n v.

Bedford-Fulton-Huntingdon Solid Waste Auth.,

877 F. Supp. 935 (M.D. Pa. 1994)............cccceeeeeres 6n.1, 7n.4

SSC Corp. v. Town of Smithtown, 66 F.3d 502 (2d

Cir. 1995), cert. denied, 64 U.S.L.W. 3380 (U.S.

Feb. 20, 1996) (No. 95-782) ...........ccccseerreeneereeeeees 6n.1, 7n.3

USA Recycling, Inc. v. Town of Babylon, 66 F.3d

1272 (2d Cir. 1995), petition for cert. filed, 64

U.S.L.W. 3534 (U.S. Jan. 30, 1996) (No. 95-

Vince Refuse Serv., Inc. v. Clark County Solid

Waste Management Dist., No. C-3-93-319, 1995

WL, 253121 (B.D. Oii0) ....0..-cccccocccecoscccccseccrecssceees 6n.1, 7n.3

LEGISLATIVE MATERIALS

H.R. Res. 349, 104th Cong. 2d Sess. (1996) ............. 5

S. 534, 104th Cong. Ist Sess. (1995) ...........c-ccceeeeees 5

No.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1995

A. A. & M. CARTING SERVICE, INC.; FARMINGDALE

CARTING, INC.; NATALE PEPE WASTE CORP.; PGS

CARTING CO., INC.; JOSEPH S. CELANO; MARIANNE

CELANO, JC INDUSTRIES, INC.; C.B.S. RUBBISH CO., INC.;

FARMINGDALE INDUSTRIAL PARK ASSOCIATION;

MINERSFUEL COMPANY, INC.; and RESOURCES

CONSERVATION CORP..,

Petitioners,

vs,

TOWN OF BABYLON, NEW YORK, COMMERCIAL

GARBAGE DISTRICT NO. 2, also known as Commercial Waste

ing and Recycling District; TOWN BOARD OF THE

TOWN OF BABYLON; RICHARD H. SCHAFFER; and

BABYLON SOURCE SEPARATION COMMERCIAL, INC.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF AMICUS CURIAE OF THE NEW YORK STATE

CONFERENCE OF MAYORS AND MUNICIPAL

OFFICIALS IN SUPPORT OF PETITIONERS

INTEREST OF AMICUS CURIAE

_NYCOM is a not-for-profit, voluntary membership asso-

government. NYCOM’s current membership consists of all of

ee

2

administration of municipal affairs and opposes legislation

detrimental to cities and villages and the people therein.

NYCOM has a vital interest in the outcome of this and

other cases dealing with the issue of flow control in the post-

Carbone era since NYCOM members represent that level of

government most directly involved in the collection of solid

waste, and which thereby are most directly affected by flow

control legislation. NYCOM was among the amici curiae in C

& A Carbone, Inc. v. Town of Clarkstown, 114 S. Ct. 1677,

399 L.Ed.2d 128 (1994).

In the months following the Carbone decision we have

witnessed three decidedly different courses of conduct. On the

positive side, the Carbone decision provided cities and vil-

lages with what they were seeking at the beginning: a seat, as

well as a voice, at the negotiating table. In other cases, it re-

sulted in lower and more responsible rates for garbage dis-

posal. Where the Carbone decision was adhered to, we saw

the return of competition to the garbage disposal business as

those who previously used flow control for their own eco-

nomic gain were forced to reevaluate their finances.

The negative course of conduct has included various at-

tempts to undermine, circumvent, and subvert the Supreme

Court’s ruling, either by ignoring the decision of this Court,

or by enacting a new regulatory/contractual scheme such as in

the Town of Babylon. While in some cases, the failure to ad-

here to Carbone can be blamed on ignorance, in most cases,

this failure has been deliberate.

The third course of conduct was undertaken by proponents

of flow control who heeded Justice O’Connor’s concurrence

in Carbone, and mounted a fierce congressional campaign to

authorize states to permit flow control

enjoyed a major victory when the U. S. Senate passed a bill

on May 16, 1995 - the first anniversary of the Carbone deci-

was brought to an end on January 31, 1996 when the House of

Representatives rejected flow control by a 272-149 vote.

3

This case raises an important issue for NYCOM members.

NYCOM represents that level of government - cities and vil-

lages - most directly involved in the collection of solid waste,

and thereby the most directly affected by flow control. Flow

control has been hailed by some as a necessary planning tool

guaranteeing a steady flow of waste to a specific solid waste

facility to finance the costs of that facility. In most cases, it is

NYCOM’s members which are subsidizing these expensive

facilities through corresponding increases in the local real

tax. Traditionally, local governments in New York

rely upon the local real property tax as their main source of

revenue and the primary method for financing solid waste

disposal. Approximately 65 percent of the cities and villages

are currently financing their disposal costs through municipal

taxes, while another 15 percent impose user fees. Flow con-

trol adds unnecessary spending to a city or village’s bottom

line. While in New York, counties and some towns are legis-

latively charged with solid waste planning, that charge does

not require that the county or town become the ultimate dis-

posal site for all of the garbage generated within the jurisdic-

tion. Additionally, flow control deprives local governments of

the ability to contract freely for solid waste disposal services

inside and outside of New York. This ability to contract freely

is essential to the effective functioning of local governments.

SUMMARY OF ARGUMENT

The amicus will argue that Congress has spoken and that

despite their best efforts, there will be no legislative solution

for flow control proponents. As a result of Congress’ defeat of

a flow control authorization bill, it is now more important

than ever that the Court not permit localities to flaunt its’ de-

cision in Carbone. What Congress and this Court would not

allow through the front door should not be accomplished

through the back door by localities and the lower courts.

ments, i ing the Town of Babylon, have recognized that

their local laws directing solid waste to a specific facility are

4

invalid under the Commerce Clause, and have sought to find

new ways to defray their financial commitments to the opera-

tors of local solid waste management facilities. Rather than

pursue the politically unpopular solution offered by the Court

in the form of general taxes or municipal bonds, municipali-

ties like the Town of Babylon have chosen to perpetuate a

regime that continues to direct solid waste to a chosen facility.

Certain of the district and appellate courts have been sym-

pathetic to the arguments presented by municipalities like the

Town of Babylon. Such a posture has resulted in piecemeal

and inconsistent application of Carbone. The amicus will ar-

gue that the Court needs to send a clear message to the district

and appellate courts which have upheld local waste flow plans

that replace local laws of the type invalidated in Carbone with

regulatory requirements and/or contractual schemes designed

to ensure that local waste continues to go to a local disposal

facility.

ARGUMENT

I

CONGRESS’ DEFEAT OF FLOW CONTROL

REQUIRES THIS COURT TO ADDRESS

LOCAL GOVERNMENT EVASION OF

CARBONE

When this Court held the Town of Clarkstown’s flow con-

trol ordinance constitutionally invalid under the Commerce

Clause in the Carbone decision, it provided, in a concurring

opinion written by Justice O'Connor, an opportunity for a

legislative solution to flow control. In Justice O’Connor’s

words: “It is within Congress’ power to authorize local im-

position of flow control. Should Congress revisit this area,

and enact legislation providing a clear indication that it in-

tends States and localities to implement flow control, we will,

of course, defer to that legislative judgment.” Carbone, supra

at 1692.

Shortly after this Court issued the Carbone decision, flow

control proponents mounted a fierce campaign for legislation

——

;

5

providing congressional authorization for states to implement

flow control. On the one-year anniversary of the Carbone de-

cision - May 16, 1995 - the U. S. Senate passed flow control

authorization legislation grandfathering waste facilities built

or planned with flow control at the time of this Court’s deci-

sion in Carbone. S. 534, 104rd Cong., Ist Sess. (1995). Ef-

forts in the U.S. House of Representatives to introduce an

identical bill failed and a narrow bill which would grandfather

facilities existing or financed at the time of the Carbone de-

cision was introduced. A House of Representatives resolution

providing for the consideration of the Senate bill was defeated

in the House on January 31, 1996 by a vote of 272-149. H.R.

Res. 349, 104th Cong., 2d Sess. (1996).

The House of Representatives’ defeat of a legislative solu-

tion to flow control sends a strong message to the 104th

Congress that flow control legislation is unnecessary and not

forthcoming in the near future.

Inasmuch as Congress’ action has foreclosed a legislative

solution to flow control, it can be expected to heighten the

activity of flow control proponents to craft new and additional

regulatory and/or contractual solutions and to seek support for

these mechanisms through the courts. For this reason it is vital

that the Court grant this petition and address local government

evasion of its decision in Carbone. Without such action at this

time, the Court can be assured that the issue of flow control

will continue to consume the time and effort of the lower

courts, as well as this Court’s calendar with petitions for writs

of certiorari.

It

INCONSISTENT LOWER COURT

DECISIONS ON FLOW CONTROL REQUIRE

THIS COURT TO CLARIFY ITS HOLDING

IN CARBONE

Since this Court’s decision in Carbone, there has been a

plethora of cases in the federal district and appellate courts

dealing with the constitutional validity of waste management

plans of states and localities. To date, the Carbone decision

has been cited as authority in at least 15 reported federal

opinions’ dealing with Commerce Clause challenges and at

least six reported state court opinions” dealing with solid

waste issues and Commerce Clause challenges. Of these 21

decisions, 15 occurred in the flow-control setting; of those,

six distinguished Carbone or questioned its application in

' Atlantic Coast Demolition & Recycling, Inc. v. Board of Chosen Free-

holders, 48 F.3d 1417 (3d Cir. 1995); Ben Oehrleins and Sons and

Daughter, Inc. v. Hennepin County, 867 F.Supp. 1430 (D. Minn. 1994);

Blue Circle Cement, Inc. v. Board of County Comm'rs, 27 F.3d 1499

(10th Cir. 1994); Bonollo Rubbish Removal, Inc. v. Town of Franklin, 886

F. Supp. 955 (D. Mass. 1995); Environmental Waste Reductions, Inc. v.

Reheis, 887 F. Supp. 1534 (N.D. Ga. 1995); Grand Central Sanitation,

Inc. v. City of Bethlehem, 1994 WL 613674 (E.D. Pa. 1994); Harvey &

Harvey, Inc. v. County of Chester, 68 F.3d 788 (3d Cir. 1995), petition for

cert. filed, 64 U.S.L.W. 3510 (U.S. Jan. 16, 1996) (No. 95-1127); Kleen-

well Biohazard Waste and General Ecology Consultants, Inc. v. Nelson,

48 F.3d 391 (9th Cir. 1995), cert. denied, 115 S. Ct. 2580 (1995); Na-

tional Solid Waste Management Ass'n v. Meyer, 63 F.3d 652 (7th Cir.

1995), petition for cert. filed, 64 U.S.L.W. 3486 (U.S. Dec. 18, 1995) (No.

95-1079); National Solid Waste Management Assoc'n v. Williams, 877 F.

Supp. 1367 (D. Minn. 1995); Pine Ridge Recycling, Inc. v. Butts County,

Georgia, 855 F. Supp. 1264 (M.D. Ga. 1994); Southcentral Pennsylvania

Waste Haulers Ass'n v. Bedford-Fulton-Huntington Solid Waste Author-

ity, 877 F. Supp. 935 (M.D. Pa. 1994); SSC Corp. v. Town of Smithtown,

66 F.3d 502 (2d Cir. 1995), cert. denied, 64 U.S.L.W. 3380 (U.S. Feb. 20,

1996) (No. 95-782); USA Recycling, Inc. v. Town of Babylon, 66 F.3d

1272 (2d Cir. 1995), petition for cert. filed, 64 U.S.L.W. 3534 (U.S. Jan.

30, 1996) (No. 95-1223); Vince Refuse Service, Inc. v. Clark County Solid

Waste Management Dist., No. C-3-93-319, 1995 WL 253121 (S.D. Ohio).

* Town of Clarkstown v. C & A Carbone, Inc., 617 N.Y.S.2d 482 (N.Y.

App. Div. 1994); Davis Clarkco Landfill Co. v. Clark Cty Solid Waste

Management Dist., 653 N.E.2d 646 (Ohio 1995); Delaware County v.

Raymond T. Opdenaker & Sons, Inc., 652 A.2d 434 (Pa. Commw. Ct.

1994); Empire Sanitary Landfill, Inc. v. State, 645 A.2d 413 (Pa. Commw.

Ct. 1994); Town of North Hempstead v. Village of Westbury, 618

N.Y.S.2d 226 (N.Y. App. Div. 1994), appeal withdrawn, 647 N.E.2d 455

(N.Y. 1995); R & R Disposal Carting, Inc. v. Town of Clarkstown, 620

N.Y.S.2d 215 (N.Y. 1994).

7

upholding state and municipal flow-control schemes’, while

nine decisions followed Carbone in recognizing challenges to

waste-flow laws’. The remaining six cases dealt with solid

waste issues generally; of these, two distinguished or declined

to apply Carbone in turning aside challenges to the waste

plans at issue’, while four opinions cited Carbone in recogniz-

ing challenges to the solid waste plans.°

> Harvey & Harvey, Inc. v. County of Chester, 68 F.3d 788 (3d Cir. 1995),

petition for cert. filed, 64 U.S.L.W. 3510 (U.S. Jan. 16, 1996) (No. 95-

1127); SSC Corp. v. Town of Smithtown, 66 F.3d 502 (2d Cir. 1995), cert.

denied, 64 U.S.L.W. 3380 (U.S. Feb. 20, 1996) (No. 95-782); USA Re-

cycling, Inc. v. Town of Babylon, 66 F.3d 1272 (2d Cir. 1995), petition for

cert. filed, 64 U.S.L.W. 3534 (U.S. Jan. 30, 1996) (No. 95-1223), Vince

Refuse Serv., Inc. v. Clark County Solid Waste Management Dist., No. C-

3-93-319, 1995 WL 253121 (S.D. Ohio 1995); Grand Central Sanitation,

Inc. v. City of Bethlehem, No. 94-59-28, 1994 WL 613674 (E.D. Pa.

1994); Delaware County v. Raymond T. Opdenaker & Sons, Inc., 652

A.2d 434 (Pa. Commw. 1994).

* National Solid Wastes Management Ass'n v. Williams, 877 F. Supp.

1367 (D.Minn. 1995); Atlantic Coast Demolition & Recycling, Inc. v.

Board of Chosen Freeholders, 48 F.3d 701 (3d Cir. 1995)1 Ben Oehrieins

& Sons & Daughter, Inc. v. Hennepin County, 867 F. Supp. 1430 (D.

Minn. 1994); Bonollo Rubbish Removal, Inc. v. Town of Franklin, 886 F.

Supp. 955 (D. Mass. 1995); Southcentral Pennsylvania Waste Haulers

Ass'n v. Bedford-Fulton-Huntingdon Solid Waste Auth., 877 F. Supp. 935

(M.D. Pa. 1994); R & R Disposal Carting, Inc. v. Town of Clarkstown,

620 N.Y.S. 2d 215 (N.Y. 1994); Town of Clarkstown v. C & A Carbone,

Inc., 617 N.Y.S.2d 482 (N.Y. App. Div. 1994); Town of North Hempstead

v. Village of Westbury, 618 N.Y.S.2d 226 (App. Div. 1994); Empire

Sanitary Landfill, Inc. v. State, 645 A.2d 413 (Pa. Commw. Ct. 1994).

> Kleenwell Biohazard Waste & General Ecology Consultants, Inc. v. Nel-

son, 48 F.3d 391 (9th Cir.), cert. denied, 115 S. Ct. 2580 (1995); Blue

Circle Cement, Inc. v. Board of County Comm'rs, 27 F.3d 1499 (10th Cir.

1994).

® National Solid Wastes Management Ass'n v. Meyer, 63 F.3d 652 (7th

Cir. 1995), petition for cert. filed, 64 U.S.L.W. 3486 (U.S. Dec. 18, 1995)

(No. 95-1079); Environmental Waste Reductions, Inc. v. Reheis, 887 F.

Supp. 1534 (N.D. Ga. 1994); Pine Ridge Recycling, Inc. v. Butts County,

855 F. Supp. 1264 (M.D. Ga. 1994); Davis Clarkco Landfill Co. v. Clark

County Solid Waste Management Dist., 653 N.E.2d 646 (Ohio 1995).

Of those rejecting Carbone, the most notable is the present

case, which deals with the creation by the Town of a com-

mercial garbage district within its boundaries which licensed a

single private company to collect all waste generated within

this new district pursuant to a contract with the Town. The

appellate court reversed the lower court and ruled that the

Town’s plan did not discriminate against or impose any undue

burden on interstate commerce.

This Court has clearly established a two-step process for

evaluating the validity of a statute under the Commerce

Clause. Carbone, 114 S.Ct. 1677; Oregon Waste System v.

Department of Environmental Quality, 114 S. Ct. 1345, 1347

(1994). In a Commerce Clause challenge, the burden is ini-

tially on the plaintiff to show that the legislation is discrimi-

nating against interstate commerce on its face or in its purpose

and effect. Hughes v. Oklahoma, 441 U.S. 322, 336, 99 S. Ct.

1727, 1736, 60 L.Ed.2d 250 (1979). The first step of the

evaluation is to determine whether the regulation of interstate

commerce discriminates against interstate commerce or favors

in-state economic interests over their out-of-state counter-

parts. Carbone, 114 S. Ct. at 1682; Oregon Waste System, 114

S. Ct. at 1347. If an ordinance so discriminates, it is virtually

per se invalid unless the municipality can show that the ordi-

nance advances a “legitimate local purpose that cannot be

adequately served by reasonable nondiscriminatory alterna-

tives;” such purposes are to be strictly scrutinized by the

Court. Oregon Waste System, 114 S. Ct. at 1347.

In addition, when it is shown that a law was enacted with a

purpose to discriminate against interstate commerce, strict

scrutiny is also required. A regulation may be discriminatory

on its face, in its purpose or effect. Bacchus Imports, Ltd. v.

Dias, 468 U.S. 263, 270, 104 S. Ct. 3049, 3054-55, 82

L.Ed.2d 200 (1984); Philadelphia v. New Jersey, 437 U.S.

617, 98 S. Ct. 2531, 57 L.Ed.2d 475 (1978); Hunt v. Washing-

ton State Apple Advertising Comm'n, 432 U.S. 333, 352-53,

97 S. Ct. 2434, 2446-47, 53 L.Ed.2d 383 (1977).

If a regulation is not discriminatory, but rather regulates

evenhandedly, then the Court must apply the Pike balancing

:

H

t

9

test and determine whether the burden on interstate commerce

is clearly excessive in relation to the putative local benefits.

Carbone, 114 S. Ct. at 1682; Oregon Waste System, 114 S.

Ct. 1347; Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.

Ct. 844, 847, 25 L.Ed.2d 174 (1970).

It is submitted that in the present case, the court, while us-

ing the two-part analysis, sought to carve out an exception for

the subject municipal scheme by stretching the envelope of

analysis as outlined in the aforementioned cases.

Inasmuch as the Court of Appeals decision in the present

case - as well as the inconsistent opinions of other federal

courts on post-Carbone flow control cases - provides munici-

palities with a framework for evading this Court’s decision in

Carbone, granting of this petition and review of the judgment

of the Court of Appeals is necessary.

CONCLUSION

For the reasons stated above, this Court should grant the

petition for certiorari and reverse the decision below.

Respectfully submitted,

DONNA M. C. GILIBERTO

General Counsel

Counsel of Record

NEw YORK STATE CONFERENCE

OF MAYORS AND MUNICIPAL

OFFICIALS

119 Washington Avenue

Albany, NY 12210

(518) 463-1185

Attorney for Amicus Curiae

March 1, 1996

APPENDIX

A-l

Testimony of Edward C. Farrell

Executive Director

New York State Conference of Mayors

and Municipal Officials

INTERSTATE TRANSPORTATION OF

SOLID WASTE AND FLOW CONTROL

Hearing before the

United States Senate Committee on

Environment and Public Works

Subcommittee on Superfund, Waste Control

and Risk Assessment

Subcommittee Chairman: Sen. Robert C. Smith

Ranking Minority Member: Sen. Frank Lautenberg

Wednesday, March 1, 1995

9:00 o’clock a.m.

Dirksen Senate Office Building

Room 406

Washington, D.C.

I am Edward C. Farrell, Executive Director of the New

York State Conference of Mayors and Municipal Officials

(NYCOM), which represents villages and cities in New York

State.

I wish to extend my thanks to Senator Robert C. Smith,

Chairman of the Senate Subcommittee on Superfund, Waste

Control and Risk Assessment and to Senators Lautenberg,

Chafee and Baucus, and to all of the members of the Commit-

tee and Subcommittee for the opportunity to offer testimony

at this hearing exploring the issue of flow control.

I am testifying before you today because NYCOM repre-

sents that level of local government - cities and villages -

most directly involved in the collection of solid waste, and

thereby the most directly affected by flow control. Accord-

ingly, we have a very different view of flow control than you

may have heard from national local government associations.

A-2

Therefore, 1 want to state for the record, that the New York

State Conference of Mayors opposes the imposition of flow

control. Further, we ask that this Subcommittee and Congress

take no action with regard to the imposition of flow control.

As you know, flow control refers to the statutory authority

of a planning unit or municipality to exercise control over the

flow of solid waste generated, originated, or brought within

its jurisdiction. In the case of a county, multi-county, or re-

gional facility, jurisdiction is granted over the flow of solid

waste in the cities, towns and villages in that county. In the

case of a town, jurisdiction is granted over the flow of solid

waste in the villages in that town.

Flow control is not a new issue in New York. Since 1975,

the New York State Legislature has enacted 38 special state

laws enabling localities and solid waste management planning

units to enact loca! flow control laws.

Flow control has been hailed by some as a necessary plan-

ning tool guaranteeing a steady flow of waste to a specific

solid waste facility to finance the costs of that facility. In most

cases, it is NYCOM’s members - cities and villages - which

are subsidizing these expensive facilities through correspond-

ing increases in the local real property tax.

The issue of flow control came to the forefront in May,

1994 when the United States Supreme Court issued a sweep-

ing decision which invalidated flow control legislation as

violative of the Commerce Clause of the U.S. Constitution.

NYCOM served as an amicus curiae, along with the Long

Island villages of Westbury, Mineola, and New Hyde Park, in

C & A Carbone, Inc. v. Town of Clarkstown, on behalf of the

hauler. We became involved in that case because our mem-

bers are actively involved in the collection of solid waste, and

thereby the most directly affected by flow control.

Traditionally, local governments in New York rely upon

the local real property tax as their main source of revenue and

the primary method for financing solid waste disposal. Ap-

proximately 65 percent of the villages and cities are currently

A-3

financing their disposal costs through municipal taxes, while

another 15 percent impose user fees.

Flow control adds unnecessary spending to a village or

city’s bottom line. While in New York, counties and some

towns are legislatively charged with solid waste planning, that

charge does not require that the -ounty or town become the

ultimate disposal site for all of the garbage generated within

the jurisdiction.

The cost and its effect on municipal budgets can best be

illustrated by the following examples.

The Phantom Facility

Beginning in 1986 and continuing to date, the Long Island

villages of Westbury, Mineola ad New Hyde Park, which

maintain their own municipal sanitation collection depart-

ments, plus three other sizable villages with similar operations

and about 25 other villages of varying sizes, which utilize pri-

vate carters or public sanitary districts to collect residential

solid waste, have been subjected to the Town of North

Hempstead’s Flow Control Law. The Town imposed, and the

Town Solid Waste Authority reseives, tipping fees for all

solid waste collected by the villages and other public and pri-

vate solid waste collectors. Thest fees have no necessary or

legal relationship to the Authority’s actual disposal functions

and costs. The fees act as a revenje stream, transferring up to

$2 million per year to the Town.

Even though flow control is ustally justified in the name of

financing construction of solid wiste facilities adequate to a

municipality’s long term needs, the Town and Authority

never implemented the original plan to build its own solid

waste facility after five years of fhw control. The Town and

the Authority abandoned all such plans in early 1992 and sub-

contracted all solid waste functins, even though they had

spent two and one-half years devdoping the plan, purchased

460-acres of property for $34 millin, and pledged tipping fee

revenues in a secured bank loan.

RAD Pah AG

A-4

The end result is that these Long Island villages have ex-

perienced tipping fee increases from $66 per ton in 1990 to

$104 per ton in 1992.

The villages and others in North Hempstead have been

isolated from the solid waste disposal market and have been

precluded from dealing with other governmental and private

entities - such as American Ref-Fuel located in the neighbor-

ing Town of Hempstead - which would provide disposal

services at a cost of at least $15 to $30 per ton below the

Town’s monopoly rates.

When the three villages defied North Hempstead’s flow

control law by contracting with American Ref-Fuel, they were

subsequently sued by North Hempstead. NYCOM served as

an amicus curiae in that case. Ultimately, the Court of Ap-

peals upheld the validity of the State and Town of North

Hempstead flow control laws.

The Village of Monticello

In 1992 Sullivan County was granted flow control. This

was done to ensure that Sullivan County would capture all of

the business within the county in order to make payments on

the landfill construction bonds.

Due to its proximity to Pennsylvania and other solid waste

landfills, the Village of Monticello has access to markets

where tipping fees range from $25 to $40 per ton. Presently,

Sullivan County charges $60 per ton to use the county land-

fill.

The Village of Monticello is now paying a tipping fee of

$360,000 per year to the county. Costs continue to rise and

required the Village Board to double the commercial sanita-

tion rate and institute a monthly residential sanitation fee to

cover tipping fee costs.

The bottom line is that flow control deprives local govern-

ments of a basic tenet of municipal home rule authority: the

ability to make decisions on the local level in the best interest

of the local citizenry. The ability to contract freely is essential

hs Tila Aa Dit ia i Ra lea

A-5

to the effective functizning of local governments. Municipal

officials have a fiduciary duty to negotiate contracts and

spend local funds judiciously, in accordance with our State

Constitution. Municipal officials are constrained by the com-

petitive bidding provisions of the New York State General

Municipal Law. These provisions assure the prudent and eco-

nomical use of public moneys for the benefit of all the inhabi-

tants of the state and facilitate the acquisition of facilities and

commodities of maximum quality at the lowest possible cost.

Flow control flies in the face of these provisions and replaces

them with a costly, inefficient, and anti-competitive mandate.

In May 1992 NYCOM called the attention of the State

Legislature and the Governor to three bills which would grant

flow control to specific counties. At that time, we stated that

none of the special laws enacted to date, nor the three bills

which were before the Legislature, provided local govern-

ments within those counties or towns any safeguards or pro-

tection from abuse of that flow control authority. We asked

that future special state laws authorizing municipal flow con-

trol provide local governments within those jurisdictions with

protection against price gouging, provide municipalities the

authority to honor existing contracts with waste haulers, and

require formal prior notification and negotiation between the

level of municipal government seeking flow control and the

localities within that jurisdiction. Neither the Legislature nor

the Governor addressed our concerns before these bills were

enacted.

Mr. Chairman, you will hear many groups and individuals

testify today. Several will suggest that by striking down the

Clarkstown law, the Supreme Court created a crisis for mu-

nicipally-operated solid waste facilities. Perhaps it is more

appropriate to question why in the 70’s and 80’s did states

embark on policies to build facilities which are backed by

revenue bonds, only to find out that these facilities are un-

competitive in the open marketplace of the 90’s?

I submit, Mr. Chairman, that the crisis that many in the

solid wasse community perceive we are in today was in fact

A-6

created by particular State policies concerning solid waste. In

New York, the perceived need for flow control was precipi-

tated by the State’s active policy to close landfills.

Since 1986, there has been a net loss of 244 landfills, or 83

percent of the active landfills. In 1993 alone, 35 landfills

closed. There were 50 municipal solid waste landfills remain-

ing in New York as of December 31, 1993. During approxi-

mately the same period, roughly 12 new landfills were

opened.

We must not forget that in 1988, the New York State De-

partment of Environmental Conservation re-wrote its regula-

tions concerning solid waste disposal. At that time DEC

boasted of the fact that the new regulations were now the

most stringent in the county - and accordingly disposai costs

would increase by 1/3. Having the cadillac of regulations may

work in a monopoly, but perhaps they are not well suited to a

free enterprise situation.

What are the alternatives now that the U.S. Supreme Court

has held that flow control laws violate the Commerce Clause?

The Court noted that if special financing were needed to en-

sure a transfer station’s survival, the municipality may subsi-

dize the facility through general taxes or municipal bonds.

But, the Court said, having elected to use the open market to

earn revenues for a project, a municipality may not employ

discriminatory regulation to give that project an advantage

over rival businesses from out of state.

What is the effect of the Carbone decision in New York

State? A number of planning units have reduced tipping fees

to a competitive level to retain current business and attract

new customers. In the case of solid waste authorities, several

are actively negotiating with the municipalities under their

jurisdiction to subsidize their costs and foster cooperation.

Some planning units and municipalities have chosen to ignore

the high court’s decision and are continuing to enforce flow

control. They are facing lawsuits by industry and others.

A-7

We understand that there are two legislative initiatives in

Congress which address the issue of flow control authoriza-

tion.

The first bill, H.R. 24 (Smith/Pallone) / S. 398

(Lautenberg) would “grandfather” local laws, plans or agree-

ments containing flow control authority that existed prior to

May 15, 1994, the date of the Carbone decision. This legisia-

tion is very broad as it would provide protection to some fa-

cilities that did not even exist or were not planned prior to

May 15, 1994. Pursuant to this bill, a community would have

three years to designate a facility, and then an unspecified

amount of time to construct it, after which flow control could

be chosen by the local government in perpetuity. Addition-

ally, this proposal provides that up to 49% of flow control

revenues can be used for municipal services unrelated to mu-

nicipal solid waste management.

The second initiative, the Richardson/Fields amendment of

1994, is more restrictive, and would grandfather only those

facilities that were actually constructed or for which permits

were obtained and contracts executed for construction, or for

which revenue bonds were sold prior to May 15, 1994. Pursu-

ant to this proposal, flow control authority would last only for

the life of the facility that was built or in development before

May 15, 1994. After that time, free market principles would

apply.

We support neither of these proposals. We ask that this

Subcommittee and Congress take no action with regard to the

imposition of flow control. We ask that Congress take no ac-

tion on the aforementioned proposals.

The end of flow control does not mean the end of munici-

pally-operated solid waste facilities. It does, however, mean

the end of monopolistic prices for waste services and the re-

turn to a free market system. The Carbone decision is but

nine months old, it is premature to do anything but assess its

effects nationwide.

A-8

The real issue that needs to be addressed is how do we re-

tire the bonds that have been issued on the debt of uncom-

petitive facilities? If Congress enacts flow control, and New

York State follows suit, bonds issued for New York facilities

will continue to be retired by increases in the local real prop-

erty tax. This is a practice which we find unacceptable. There

are alternatives such as state subsidies which could make up

the difference between what is viable in the marketplace and

the funds necessary to retire the debt.

State financial assistance for solid waste facilities is not

unprecedented. In the past, New York State has provided

funds for the construction of such facilities. It would not be

extraordinary for New York to use state funds to retire the

bonds on these same facilities. The assistance would not have

to be 100 percent of the outstanding debt, but could rather re-

flect the difference between a competitive tipping fee and the

outstanding obligation. The State offers a broad tax base from

which to help finance such a program, including various in-

come, corporate, sales and business use taxes, to name a few.

Of course, if the federal government is interested in providing

funds for this purpose, we would be most appreciative.

It is clear that bonds issued on the debt of uncompetitive

facilities cannot be allowed to default. New York State will

not allow this to happen. However, we cannot allow the mar-

gin in the marketplace between economic reality and these

bonds to continue to grow. Each State must look at its own

policies which brought about this occurrence. We do not need

Federal assistance - in the form of flow control - in this mat-

ter. Individual State policies brought us to this point, and it is

a reexamination of those policies, along with State financial

assistance, which will result in a solution.

We would also like to address the issue of an interstate

waste ban. In 1994, Congress considered H.R. 4779

(Boucher) The Local Government Interstate Waste Control

Act, which would prohibit owners or operators of landfills,

incinerators, or other waste disposal facilities from receiving

le ge, ee ee ee ee es ele ee Oe

A-9

municipal solid waste generated outside their state unless they

obtain authorization from the affected local government.

NYCOM opposed that legislation, and continues to oppose

such a measure. Our position had the support of the New

York Congressional delegation. Twenty-one New York mem-

bers from both sides of the aisle signed a delegation letter op-

posing interstate restrictions during the 103rd Congress. All

members of the New York Congressional delegation opposed

the restrictions during House floor action last year.

We understand that states that seek to limit the interstate

transportation of waste argue that some states should not be

the dumping ground for others. The simple fact is that most

states and the District of Columbia both import and export

solid waste. In 1992, for example, 47 states exported waste

and 42 states imported waste for other parts of the country.

Interstate trade in waste occurs because communities and

waste disposal companies are always looking for the least ex-

pensive and most efficient means of handling trash. Some-

times this means using a local incinerator or recycling facility,

in other cases, it means hauling the waste to a landfill, per-

haps one across state lines.

Enactment of an interstate waste ban would wreak havoc

with any state’s ability to dispose of its waste and would re-

sult in higher local property taxes to finance new disposal ca-

pacity to replace out-of-state markets. For New York, those

out-of-state markets represent 20 percent of our waste stream.

Such legislation would fly in the face of Congress’ current

theme and action with regard to unfunded mandates. At a time

when Congress and the Administration are rethinking the

burden of mandates they impose on local governments, and

limiting Federal management of local affairs, interstate mu-

nicipal solid waste restrictions are contrary to those princi-

ples.

Interstate waste restrictions violate the Commerce Clause

of the U.S. Constitution and have been repeatedly struck

down by the courts. Limiting the transport of municipal solid

A-10

waste across state lines is anti-competitive and just doesn’t

make a lot of sense. Besides, what makes garbage so special?

Once you allow local governments to define commerce, why

stop with garbage? Why not ban radioactive material, gaso-

line, chemicals and other certainly more dangerous sub-

stances? Or perhaps move on to prohibit alcohol or cigarettes

from entering a community.

Simply put, the transportation of garbage to a licensed dis-

posal facility is a legitimate public and private activity. We

see not reason for Congressional action in this matter.

Finally, interstate disposal restrictions would also hurt

municipal solid waste disposal facilities in other states that

depend upon imports for profit. Their investments and the

size of their facilities have been based on the expectation of

receiving out-of-state municipal solid waste. Restrictions

would damage their business and leave little likelihood of re-

placing lost revenue with that generated from in-state waste.

I would like to thank Chairman Smith, Senators Lauten-

berg, Chafee and Baucus, and the members of the Subcom-

mittee for providing NYCOM with the opportunity to testify

here today. We stand ready to assist you in resolving this is-

sue.

A-I1

Testimony of Edward C. Farrell

Executive Director

New York State Conference of Mayors

and Municipal Officials

CONGRESSIONAL AUTHORIZATION OF

FLOW CONTROL

Hearing before the

United States House of Representatives

Committee on Commerce

Subcommittee on Commerce, Trade and

Hazardous Materials

Subcommittee Chairman: Rep. Michael G. Oxley

Ranking Minority Member: Rep. W.J. “Billy” Tauzin

Thursday, March 23, 1995

9:30 o’clock a.m.

Rayburn House Office Building

Room 2123

Washington, D.C.

I am Edward C. Farrell, Executive Director of the New

York State Conference of Mayors and Municipal Officials

(NYCOM), which represents villages and cities in New York

State.

I wish to extend my thanks to Rep. Michael G. Oxley,

Chairman of the House Subcommittee on Commerce, Trade

and Hazardous Materials and to Reps. Tauzin, Bliley, and

Dingell, and to all of the members of the Committee and Sub-

committee for the opportunity to offer testimony at this hear-

ing exploring the issue of flow control.

I am testifying before you today because NYCOM repre-

sents that level of local government - cities and villages -

most directly involved in the collection of solid waste, and

thereby the most directly affected by flow control. Accord-

ingly, we have a very different view of flow control than you

may have heard from national local government associations.

A-12

Therefore, I want to state for the record, that the New York

State Conference of Mayors opposes the imposition of flow

control. Further, we ask that this Subcommittee and Congress

take no action with regard to the imposition of flow control.

As you know, flow control refers to the statutory authority

of a planning unit or municipality to exercise control over the

flow of solid waste generated, originated, or brought within

its jurisdiction. In the case of a county, multi-county, or re-

gional facility, jurisdiction is granted over the flow of solid

waste in the cities, towns and villages in that county. In the

case of a town, jurisdiction is granted over the flow of solid

waste in the villages in that town.

Flow control is not a new issue in New York. Since 1975,

the New York State Legislature has enacted 38 special state

laws enabling localities and solid waste management planning

units to enact local flow control laws.

Flow control has been hailed by some as a necessary plan-

ning tool guaranteeing a steady flow of waste to a specific

solid waste facility to finance the costs of that facility. In most

cases, it is NYCOM’s members - cities and villages - which

are subsidizing these expensive facilities through correspond-

ing increases in the local real property tax.

The issue of flow control came to the forefront in May,

1994 when the United States Supreme Court issued a sweep-

ing decision which invalidated flow control legislation as

violative of the Commerce Clause of the U.S. Constitution.

NYCOM served as an amicus curiae, along with the Long

Island villages of Westbury, Mineola, and New Hyde Park, in

C & A Carbone, Inc. v. Town of Clarkstown, on behalf of the

hauler. We became involved in that case because our mem-

bers are actively involved in the collection of solid waste, and

thereby the most directly affected by flow control.

Traditionally, local governments in New York rely upon

the local real property tax as their main source of revenue and

the primary method for financing solid waste dis-

posal.Approximately 65 percent of the villages and cities are

A-13

currently financing their disposal costs through municipal

taxes, while another 15 percent impose user fees.

Flow control adds unnecessary spending to a village or

city’s bottom line. While in New York, counties and some

towns are legislatively charged with solid waste planning, that

charge does not require that the county or town become the

ultimate disposal site for all of the garbage generated within

the jurisdiction.

The cost and its effect on municipal budgets can best be

illustrated by the following examples.

The Phantom Facility

Beginning in 1986 and continuing to date, the Long Island

villages of Westbury, Mineola and New Hyde Park, which

maintain their own municipal sanitation collection depart-

ments, plus three other sizable villages with similar operations

and about 25 other villages of varying sizes, which utilize pri-

vate carters or public sanitary districts to collect residential

solid waste, have been subjected to the Town of North

Hempstead’s Flow Control Law. The Town imposed, and the

Town Solid Waste Authority receives, tipping fees for all

solid waste collected by the villages and other public and pri-

vate solid waste collectors. These fees have no necessary or

legal relationship to the Authority’s actual disposal functions

and costs. The fees act as a revenue stream, transferring up to

$2 million per year to the Town.

Even though flow control is usually justified in the name of

financing construction of solid waste facilities adequate to a

municipality’s long term needs, the Town and Authority

never implemented the original plan to build its own solid

waste facility after five years of flow control. The Town and

the Authority abandoned all such plans in early 1992 and sub-

contracted all solid waste functions, even though they had

spent two and one-half years developing the plan, purchased

460-acres of property for $34 million, and pledged tipping fee

revenues in a secured bank loan.

- A-14

The end result is that these Long Island villages have ex-

perienced tipping fee increases from $66 per ton in 1990 to

$104 per ton in 1992.

The villages and others in North Hempstead have been

isolated from the solid waste disposal market and have been

precluded from dealing with other governmental and private

entities - such as American Ref-Fuel located in the neighbor-

ing Town of Hempstead - which would provide disposal

services at a cost of at least $15 to $30 per ton below the

Town’s monopoly rates.

When the three villages defied North Hempstead’s flow

control law by contracting with American Ref-Fuel, they were

subsequently sued by North Hempstead. NYCOM served as

an amicus curiae in that case. Ultimately, the Court of Ap-

peals upheld the validity of the State and Town of North

Hempstead flow control laws.

The Village of Monticello

In 1992 Sullivan County was granted flow control. This

was done to ensure that Sullivan County would capture all of

the business within the county in order to make payments on

the landfill construction bonds.

Due to its proximity to Pennsylvania and other solid waste

landfills, the Village of Monticello has access to markets

where tipping fees range from $25 to $40 per ton. Presently,

Sullivan County charges $60 per ton to use the county land-

fill.

The Village of Monticello is now paying a tipping fee of

$360,000 per year to the county. Costs continue to rise and

required the Village Board to double the commercial sanita-

tion rate and institute a monthly residential sanitation fee to

cover tipping fee costs.

The bottom line is that flow control deprives local govern-

ments of a basic tenet of municipal home rule authority: the

ability to make decisions on the local level in the best interest

of the local citizenry. The ability to contract freely is essential

A-15

to the effective functioning of local governments. Municipal

officials have a fiduciary duty to negotiate contracts and

spend local funds judiciously, in accordance with our State

Constitution. Municipal officials are constrained by the com-

petitive bidding provisions of the New York State General

Municipal Law. These provisions assure the prudent and eco-

nomical use of public moneys for the benefit of all the inhabi-

tants of the state and facilitate the acquisition of facilities and

commodities of maximum quality at the lowest possible cost.

Flow control flies in the face of these provisions and replaces

them with a costly, inefficient, and anti-competitive mandate.

In May 1992 NYCOM called the attention of the State

Legislature and the Governor to three bills which would grant

flow control to specific counties. At that time, we stated that

none of the special laws enacted to date, nor the three bills

which were before the Legislature, provided local govern-

ments within those counties or towns any safeguards or pro-

tection from abuse of that flow control authority. We asked

that future special state laws authorizing municipal flow con-

trol provide local governments within those jurisdictions with

protection against price gouging, provide municipalities the

authority to honor existing contracts with waste haulers, and

require formal prior notification and negotiation between the

level of municipal government seeking flow control and the

localities within that jurisdiction. Neither the Legislature nor

the Governor addressed our concerns before these bills were

enacted.

Mr. Chairman, you will hear many groups and individuals

testify today. Several will suggest that by striking down the

Clarkstown law, the Supreme Court created a crisis for mu-

nicipally-operated solid waste facilities. Perhaps it is more

appropriate to question why in the 70’s and 80’s did states

embark on policies to build facilities which are backed by

revenue bonds, only to find out that these facilities are un-

competitive in the open marketplace of the 90’s?

I submit, Mr. Chairman, that the crisis that many in the

solid waste community perceive we are in today was in fact

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created by particular State policies concerning solid waste. In

New York, the perceived need for flow control was precipi-

tated by the State’s active policy to close landfills.

Since 1986, there has been a net loss of 244 landfills, or 83

percent of the active landfills. In 1993 alone, 35 landfills

closed. There were 50 municipal solid waste landfills remain-

ing in New York as of December 31, 1993. During approxi-

mately the same period, roughly 12 new landfills were

opened.

We must not forget that in 1988, the New York State De-

partment of Environmental Conservation re-wrote its regula-

tions concerning solid waste disposal. At that time DEC

boasted of the fact that the new regulations were now the

most stringent in the county - and accordingly disposal costs

would increase by 1/3. Having the cadillac of regulations may

work in a monopoly, but perhaps they are not well suited to a

free enterprise situation.

What are the alternatives now that the U.S. Supreme Court

has held that flow control laws violate the Commerce Clause?

The Court noted that if special financing were needed to en-

sure a transfer station’s survival, the municipality may subsi-

dize the facility through general taxes or municipal bonds.

But, the Court said, having elected to use the open market to

earn revenues for a project, a municipality may not employ

discriminatory regulation to give that project an advantage

over rival businesses from out of state.

What is the effect of the Carbone decision in New York

State? A number of planning units have reduced tipping fees

to a competi tive level to retain current business and attract

new customers. In the case of solid waste authorities, several

are actively negotiating with the municipalities under their

jurisdiction to subsidize their costs and foster cooperation.

Some planning units and municipalities have chosen to ignore

the high court’s decision and are continuing to enforce flow

control. They are facing lawsuits by industry and others.

isiicinicisinictenieesininenitatennieaemmniail

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We understand that there are several legislative initiatives

in the House of Representatives which address the issue of

flow control authorization. We would like to discuss H.R.

1085 and H.R. 1180.

The first bill, H.R. 1085 (Smith), also known as the

“systems” bill, would “grandfather” local laws, plans or

agreements containing flow control authority that existed

prior to May 15, 1994, the date of the Carbone decision. This

legislation is very broad as it would provide protection to

some facilities that did not even exist or were not planned

prior to May 15, 1994. Pursuant to this bill, a community

would have three years to designate a facility, and then an un-

specified amount of time to construct it, after which flow

control could be chosen by the local government in perpetu-

ity. Additionally, this proposal provides that up to 49% of

flow control revenues can be used for municipal services un-

related to municipal solid waste management.

The second initiative, H.R. 1180 (Upton), also known as

the “facilities” bill, is more restrictive, and would grandfather

only those facilities for which revenue bonds were sold prior

to May 15, 1994. Pursuant to this proposal, flow control

authority would last only for the life of the facility that was

built or in development before May 15, 1994. After that time,

free market principles would apply. This proposal also pro-

vides congressional authorization for restrictions on the re-

ceipt of out-of-State municipal solid waste and for State

control over transportation of municipal solid waste.

We oppose any form of legislation which would result in

congressional authorization of flow control, therefore, we op-

pose the aforementioned proposals. We ask that this Sub-

committee and Congress take no action with regard to the

imposition of flow control. We ask that Congress take no ac-

tion on the aforementioned proposals.

The end of flow control does not mean the end of munici-

pally-operated solid waste facilities. It does, however, mean

the end of monopolistic prices for waste services and the re-

turn to a free market system. The Carbone decision is but

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nine months old, it is premature to do anything but assess its

effects nationwide.

The real issue that needs to be addressed is how do we re-

tire the bonds that have been issued on the debt of uncom-

petitive facilities? If Congress enacts flow control, and New

York State follows suit, bonds issued for New York facilities

will continue to be retired by increases in the local real prop-

erty tax. This is a practice which we find unacceptable. There

are alternatives such as state subsidies which could make up

the difference between what is viable in the marketplace and

the funds necessary to retire the debt.

State financial assistance for solid waste facilities is not

unprecedented. In the past, New York State has provided

funds for the construction of such facilities. It would not be

extraordinary for New York to use state funds to retire the

bonds on these same facilities. The assistance would not have

to be 100 percent of the outstanding debt, but could rather re-

flect the difference between a competitive tipping fee and the

outsianding obligation. The State offers a broad tax base from

which to help finance such a program, including various in-

come, corporate, sales and business use taxes, to name a few.

Of course, if the federal government is interested in providing

funds for this purpose, we would be most appreciative.

It is clear that bonds issued on the debt of uncompetitive

facilities cannot be allowed to default. New York State will

not allow this to happen. However, we cannot allow the mar-

gin in the marketplace between economic reality and these

bonds to continue to grow. Each State must look at its own

policies which brought about this occurrence. We do not need

Federal assistance - in the form of flow control - in this mat-

ter. Individual State policies brought us to this point, and it is

a reexamination of those policies, along with State financial

assistance, which will result in a solution.

While we understand that this issue will be the subject of a

second hearing, we would also like to address the issue of an

interstate waste ban. In 1994, Congress considered H.R. 4779

(Boucher) The Local Government Interstate Waste Control

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Act, which would prohibit owners or operators of landfills,

incinerators, or other waste disposal facilities from receiving

municipal solid waste generated outside their state unless they

obtain authorization from the affected local government.

NYCOM opposed that legislation, and continues to oppose

measures such as H.R. 1180, which combines flow control

authority with a waste ban. During the last session of Con-

gress, our position had the support of the New York Con-

gressional delegation. Twenty-one New York members from

both sides of the aisle signed a delegation letter opposing in-

terstate restrictions during the 103rd Congress. All members

of the New York Congressional delegation opposed the re-

strictions during House floor action last year.

We understand that states that seek to limit the interstate

transportation of waste argue that some states should not be

the dumping ground for others. The simple fact is that most

states and the District of Columbia both import and export

solid waste. In 1992, for example, 47 states exported waste

and 42 states imported waste for other parts of the country.

Interstate trade in waste occurs because communities and

waste disposal companies are always looking for the least ex-

pensive and most efficient means of handling trash. Some-

times this means using a local incinerator or recycling facility,

in other cases, it means hauling the waste to a landfill, per-

haps one across state lines.

Enactment of an interstate waste ban would wreak havoc

with any state’s ability to dispose of its waste and would re-

sult in higher local property taxes to finance new disposal ca-

pacity to replace out-of-state markets. For New York, those

out-of-state markets represent 20 percent of our waste stream.

Such legislation would fly in the face of Congress’ current

theme and action with regard to unfunded mandates. At a time

when Congress and the Administration are rethinking the

burden of mandates they impose on local governments, and

limiting Federal management of local affairs, interstate mu-

nicipal solid waste restrictions are contrary to those princi-

ples.

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Interstate waste restrictions violate the Commerce Clause

of the U.S. Constitution and have been repeatedly struck

down by the courts. Limiting the transport of municipal solid

waste across state lines is anti-competitive and just doesn’t

make a lot of sense. Besides, what makes garbage so special?

Once you allow local governments to define commerce, why

stop with garbage? Why not ban radioactive material, gaso-

line, chemicals and other certainly more dangerous sub-

stances? Or perhaps move on to prohibit alcohol or cigarettes

from entering a community.

Simply put, the transportation of garbage to a licensed dis-

posal facility is a legitimate public and private activity. We

see not reason for Congressional action in this matter.

Finally, interstate disposal restrictions would also hurt

municipal solid waste disposal facilities in other states that

depend upon imports for profit. Their investmenis and the

size of their facilities have been based on the expectation of

receiving out-of-state municipal solid waste. Restrictions

would damage their business and leave little likelihood of re-

placing lost revenue with that generated from in-state waste.

I would like to thank Chairman Oxley, Reps. Tauzin, Bliley

and Dingell, and the members of the Subcommittee for pro-

viding NYCOM with the opportunity to testify here today.

We stand ready to assist you in resolving this issue.