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IB97006: Solid Waste Issues in the 105th CongressJames E. McCarthy Environment and Natural Resources Policy Division Updated July 16, 1997CONTENTSSUMMARY
Amendments to the Resource Conservation and Recovery Act, the principal federal law governing solid and hazardous waste management, or other bills addressing solid waste issues are among the environmental concerns that could be on the agenda of the 105th Congress. Chief among these issues is whether states and local governments should be given authority to restrict interstate commerce in waste both by limiting imports and by designating where locally generated waste must be disposed ("flow control"). At least nine bills have been introduced addressing interstate shipment of waste or flow control, and the Senate Environment and Public Works Committee held a hearing March 18, 1997. In the 104th Congress, the Senate twice passed a bill addressing the issues (S. 534). Solid waste issues were a major public concern for much of the last decade. Since 1984, two- thirds of the nation's municipal landfills have closed; the burning of municipal solid waste to generate steam or electricity has increased sixfold; and nearly 9,000 local governments have begun curbside collection of recyclable materials. The lead role in solid waste management is played by state and local governments. They decide how waste will be managed -- whether by landfill, incineration, recycling, compost, or some combination -- and set standards for the resulting facilities. Funding, too, comes almost exclusively from state and local sources. Nevertheless, the federal government has played an increasing role in solid waste management, setting minimum national standards for landfills and incinerators under the Resource Conservation and Recovery Act and Clean Air Act, and promoting recycling through the use of federal procurement policy. Federal court rulings have also had a profound impact on waste management programs. In a series of cases, the courts have held that shipments of waste are protected under the interstate commerce clause of the Constitution. With few exceptions, a state may not prohibit waste shipments or impose special fees on out-of-state waste, nor may it designate where privately collected waste must be disposed. These decisions have had a broad impact on state and local ability to plan the future management of solid waste and to finance existing waste management programs. In overturning interstate waste and flow control laws, the courts have made clear that the Constitution does not prevent Congress itself from restricting commerce or from granting authority to states or local governments to do so. What is prohibited is state or local action in the absence of congressional authorization. Bills being considered in this Congress would provide such congressional authority under specified conditions. Beyond the interstate waste and flow control issues, the 105th Congress is expected to consider limited changes to the nation's waste management laws. Bills to exempt from hazardous waste management requirements certain wastes generated by remediation of old hazardous waste sites are one possibility, as are changes in the program designed to clean up Leaking Underground Storage Tanks (LUST). H.R. 688, a bill affecting EPA's discretion and expanding state authority over the use of LUST Trust Fund money, passed the House April 23. The Senate Environment and Public Works Committee held a hearing March 18 on interstate shipment of waste and flow control. Court cases involving flow control in Minnesota and New Jersey, and New York City's decision to begin exporting municipally collected garbage in 1997 and ultimately to close its one remaining landfill, are among factors prompting continued congressional interest in the issues. Both the House and Senate have passed bills in recent Congresses addressing interstate waste and flow control, but lack of agreement on specifics has prevented enactment. On April 23, the House passed H.R. 688 (Schaefer), a bill to require that EPA distribute to the states 85% of the money appropriated annually from the Leaking Underground Storage Tank Trust Fund, and broadening the allowable uses of the fund. Trends in Municipal Solid Waste ManagementSolid waste management has been a major public concern over the last decade, as local governments and private firms throughout the nation have upgraded waste management programs and facilities and dealt with myriad public pressures over waste issues. In the last decade, the nation has experienced revolutionary changes in the management of municipal solid waste. Two-thirds of the nation's landfills have closed, as regulations governing land disposal have tightened. Many land disposal facilities have been replaced by waste-to-energy plants, which increased their capacity to manage waste tenfold during the 1980s, and now manage 16% of the nation's municipal solid waste (MSW). But the growth of waste-to-energy has now itself stalled due to increased costs and environmental concerns. In the last 5 years, recycling and composting have been the fastest growing methods of waste management, accounting for 27% of waste management in 1995, up from 10% in 1986. Nearly 9,000 local governments have begun curbside collection of recyclable materials (Figure 3), and 3,300 have composting programs for yard waste. Implementation of these changes resulted in a substantial increase in the cost of waste management during the 1980s. More recently, however, in most areas of the country, the cost of waste disposal has leveled off or declined. The main reason for the leveling of prices has been the construction of huge regional landfills that enjoy economies of scale and contribute to a glut of disposal capacity in many areas. In most areas of the country, the lead role in transforming solid waste management has been played by state and local governments. State and local governments generally decide how waste will be managed -- whether by landfill, incineration, recycling, composting, waste reduction, or a combination thereof. States set standards for the resulting facilities. And funding for MSW programs comes overwhelmingly from state and local sources. Private waste management firms have also been active players, often under contract or franchise agreements with local governments, or in response to state mandates. Private firms manage most of the "commercial" waste (waste generated by stores, office buildings, apartment houses, and institutions), which comprises about 40% of what is called MSW. They also increasingly collect and manage residential waste, which comprises the remaining 60% of MSW. The Federal Role in MSW ManagementWhile state, local, and private initiatives have played the key role in transforming MSW management, the federal government has also played an important role in municipal solid waste management in recent years, setting minimum national landfill standards under the Resource Conservation and Recovery Act (RCRA), setting incinerator and landfill emission standards under the Clean Air Act, and promoting recycling through the use of federal procurement policy. These regulatory actions are summarized in the table, which shows both currently implemented and pending regulations affecting MSW management. Interstate Shipment of WasteFederal court rulings have also had a profound impact on local waste management programs. In a series of recent cases, including three Supreme Court decisions since 1992, federal courts have held that shipments of waste are protected under the interstate commerce clause of the Constitution. As a result, state and local governments may not prohibit private landfills from accepting waste from out-of-state, nor may they impose fees on waste disposal that discriminate on the basis of origin. Interstate shipment of waste has become more common in recent years. The reasons include local shortages of disposal capacity, particularly in the Northeast and on the West Coast; a national trend toward larger regional disposal facilities; until recently, differences in landfill standards, which contributed to regional differences in the cost of disposal; and the vertical integration and consolidation of the waste management industry. Vertically integrated firms offer full service waste management, from collection to transfer station to disposal. Increasingly, they ship waste to their own disposal site, even though that may be across a border, rather than dispose of it at an in-state facility owned by a rival. (For a further discussion of these factors, including state-by- state information on exports and imports, see CRS Report 97-349 ENR, Interstate Shipment of Municipal Solid Waste: 1997 Update.) As a result of increased shipments, states with adequate disposal capacity, or available land, have been groping for ways to limit or prevent it being used for disposal by others. Numerous methods have been tried, including moratoria on the construction of new landfills, fees on the disposal of out-of-state waste, bans on disposal of out-of-area waste, and various planning and capacity assurance requirements. As noted, however, many of these measures have been struck down under the interstate commerce clause of the Constitution, and others may be if and when they are reviewed by courts. Legislative IssuesShould Congress Grant States the Authority to Limit Out-of-State Waste?While the states may be prevented from regulating interstate commerce, the Constitution (in Article I, Section 8) expressly gives the power to regulate commerce to the Congress. This power can be used directly by the federal government or it can be used to authorize state and local governments to restrict interstate commerce under specified conditions. The latter approach was the principle behind S. 534, which was reported by the Senate Environment and Public Works Committee April 18, 1995 (S.Rept. 104-52), was passed by the Senate May 16, 1995, and was attached to legislation headed to a House-Senate conference (S. 1959) July 26, 1996. The bill provided authority to Governors, if requested by an affected local government, to restrict new shipments of municipal solid waste from out of state. Facilities that received MSW from out of state in 1993 would have been grandfathered, although the Governor could have limited the amount they accepted to that received in 1993, and in future years could have ratcheted down imports, unless they were governed by host community agreements. The bill also allowed fees of up to $1.00 per ton on imports of MSW, in some cases. The House Commerce Committee did not act on this issue in the 104th Congress. Its Subcommittee on Commerce, Trade and Hazardous Materials approved an unnumbered committee print, with amendments, May 18, 1995. The leadership of the full committee, however, was less enthusiastic about a bill that had the effect of restraining private enterprise, and never took up the bill. In blocking action, it was supported by exporting states, the private waste management industry, and groups supportive of free market solutions to national problems. The subcommittee bill (subsequently introduced as H.R. 2323) would have prohibited landfills or incinerators from accepting new shipments of MSW generated outside the state unless the shipments were authorized in a host community agreement with the affected local government. Like the Senate bill, it would have grandfathered most facilities that received out-of- state waste in 1993, and would have provided authority to freeze imports at 1993 levels and to ratchet down the level of future imports in some cases. There were, however, some key differences in the House and Senate approaches. These included: 1) the role of state and local governments (in the Senate bill, local governments could request the Governor to restrict imports, but could not take action themselves; in the House bill, local governments played the central role, deciding whether or not to allow new interstate waste shipments at local facilities); and 2) the basic structure of the authority (in the House version, a "presumptive ban" on new interstate waste shipments would have prevented new shipments unless the affected government in the receiving area gave permission; in the Senate bill, new waste shipments would have been allowed unless the Governor took action to stop them). These differences have contributed to the congressional stalemate. (For more information on the House and Senate bills in the last Congress, see CRS Report 95-682, Solid Waste Legislation in the 104th Congress: A Comparison.) In the 105th Congress, Senators Conrad, Baucus, Robb, and Coats have introduced interstate waste legislation (S. 384, S. 443, S. 448, and S. 463, respectively), and there are three House bills, H.R. 942 (Franks), H.R. 1346 (Gilchrest), and H.R. 1358 (Buyer). The Senate Environment and Public Works Committee held a hearing on the issue March 18. In addition, the Chairman of the Senate Environment Committee, Senator Chafee, has recently circulated a draft bill for comment. Its interstate waste provisions are nearly identical to S. 534 from the last Congress. As of mid-July, the bill had not been introduced. Should States and Localities Be Allowed to Control the Flow of Privately Collected Waste?Whether state and local governments can designate where privately collected waste must be disposed (through what are called "flow control" laws) has also been the subject of court challenges. In May 1994, in the case of C & A Carbone v. Clarkstown, the Supreme Court held that flow control also violates the interstate commerce clause. According to EPA, 39 states and the District of Columbia have enacted flow control laws or provide for it indirectly through home rule or planning authority. Since 1980, about $10 billion in municipal bonds have been issued to pay for the construction of solid waste facilities. In many of these cases, flow control authority was used to guarantee the investment. Flow control also has benefitted recycling facilities in cases where recycling is financed by fees collected at designated incinerators or landfills. In the process, however, it creates a monopoly and prohibits facilities outside the jurisdiction from offering competitive services. (For further information on flow control, see CRS Report 94-265 ENR, Flow Control of Solid Waste: Issues and Options, updated May 16, 1995.) In the wake of the Carbone decision, at least 18 bond issues valued at $2 billion have been downgraded by the rating services, some to a level below investment grade. In these and perhaps other cases, local governments have responded by cutting tipping (disposal) fees to remain competitive, raising revenues from new taxes or fees, and cutting elements of their solid waste programs. No local government has defaulted on a solid waste bond issue, but there has been a difficult adjustment in some cases. As a result, the National Association of Counties, National League of Cities, U.S. Conference of Mayors and many individual local governments have strongly advocated the restoration of flow control authority. As in the case of waste import restrictions, Congress could authorize the use of flow control, using its authority under the commerce clause. In the 104th Congress, Title II of S. 534, would have granted such authority. Specifically, the bill would have grandfathered flow control arrangements at facilities designated as of May 15, 1994 (the day prior to the Supreme Court decision). The authority would have expired at the end of the useful life of the designated facility or the completion of the schedule for payment of the facility's capital costs, whichever was later, but in no event later than 30 years after the date of enactment. During Committee markup and floor debate, the Senate broadened this grandfather to apply to additional facilities in at least eight states and to flow control arrangements that supported recycling programs in certain instances. The House bill, H.R. 2323, as approved by the Commerce subcommittee, contained similar provisions grandfathering facilities designated for flow control, but did not establish the 30-year sunset on its authority. Rather, flow control could have been exercised for the life of any existing grandfathered facility, including expansions. (For a summary and comparison of the House and Senate bills, see CRS Report 95-682, Solid Waste Legislation in the 104th Congress: A Comparison.) The House also voted on separate flow control legislation not attached to an interstate waste measure, in the 104th Congress. The bill, H.Res. 349 -- perhaps because it did not address interstate shipment of waste -- was soundly defeated. As the 104th Congress wound down, developments in New York, New Jersey, and Minnesota provoked new interest in both the interstate waste and flow control issues. On May 29, 1996, Governor George Pataki of New York and Mayor Rudolph Giuliani of New York City announced an agreement that will close New York City's one remaining landfill, Fresh Kills, in the year 2001. The city currently sends 13,200 tons of waste per day to the landfill, and there is little or no capacity in state to replace it upon its closure. A November 29 report by a task force established to consider implementation issues recommended that the city begin exporting waste in 1997, and the city has recently contracted to export 1,800 tons per day beginning in July 1997. In New Jersey, on July 15, 1996, a federal District Court overturned the state's flow control requirements in the case of Atlantic Coast Demolition & Recycling Inc. v. Atlantic County. The judge gave the state 2 years following the exhaustion of all appeals to develop regulations that do not discriminate against out-of-state disposal facilities. Without flow control, a large amount of New Jersey's waste may leave the state because of cheaper disposal elsewhere. In Minnesota, meanwhile, in March 1996, a federal court ruled in favor of a group of 12 waste haulers and processors who claimed that a county could be held liable for damages resulting from its enforcement of a flow control ordinance (Ben Oehrleins, Inc. v. Hennepin County). On August 28, a jury implementing the judge's ruling awarded three of the plaintiffs $7.1 million as compensation for the higher costs they were forced to pay as a result of the county's flow control scheme. The case has raised further concerns among local governments concerning the consequences of the loss of flow control authority. In the wake of these developments, affected interests have geared up for renewed debate on flow control and interstate waste issues in the 105th Congress. As mentioned, seven interstate waste bills have been introduced as of mid-July. Three bills, H.R. 943 (Franks), S. 443 (Baucus), and S. 899 (Dodd), address flow control. No action has been taken on any of these bills. RCRA Rifle Shot AmendmentsOver the past 2 years, both the Administration and leaders of the relevant congressional subcommittees have expressed support for narrowly focused amendments that might improve RCRA by clarifying its provisions or by removing certain high-cost, low-benefit requirements. Among these proposals, referred to as "RCRA rifle shot" amendments, were two provisions contained in P.L. 104-119 (H.R. 2036), the Land Disposal Program Flexibility Act, which: 1) exempted hazardous waste from RCRA regulation if it was treated to a point where it no longer exhibited the characteristic that made it hazardous, and was subsequently disposed in a facility regulated under the Clean Water Act or in a Class I deep injection well regulated under the Safe Drinking Water Act; and 2) allowed an exemption from ground water monitoring requirements for small landfills in arid and remote areas that show no evidence of ground water contamination. A second RCRA rifle shot bill that has been widely discussed but not acted upon, may receive attention in the 105th Congress. The goal of the legislation would be to speed cleanup of hazardous waste sites by exempting low-risk wastes from the remediation of such sites from hazardous waste management standards. S. 1274 (Lott) and S. 1286 (Smith) contained such provisions in the 104th Congress, as did Title IX of H.R. 2500 (Oxley), the Superfund reform bill approved by a House Commerce subcommittee November 9, 1995. Draft legislative language similar to these bills was the subject of further negotiations among interested parties, but the 104th Congress adjourned without addressing the issue. On June 5, 1997, the White House Council on Environmental Quality hosted a meeting of interested parties in an attempt to move this issue forward. Underground Storage TanksIn the 1980s, Congress amended RCRA to create a regulatory program for underground storage tanks. In addition, a trust fund was established to assist EPA and the states in ensuring the cleanup of contamination caused by leaking underground tanks. Roughly $1.6 billion was collected for this trust fund through taxes on gasoline and other motor fuels, before the taxing authority expired in December 1995. Through FY1997, only 40% of this money ($651 million) had been appropriated. About $1 billion remains in the fund, of which $60 million was appropriated for FY1997. The states also have trust funds, which provide almost $1.2 billion per year for underground storage tank cleanup. Unlike the federal fund, many of the state funds are used to reimburse tank owners for cleanup costs. Reimbursement claims against these state funds reached $2.8 billion in 1996; 19 state funds have claims exceeding balances. To provide additional resources to the states, legislation was introduced (and passed the House) in the 104th Congress that would have broadened the allowable uses of federal trust fund money, including allowing states to use the funds to reimburse financially distressed owners and operators for cleanup costs. The bill would also have required that at least 85% of appropriations from the fund go to the states. In this Congress, an identical bill, H.R. 688 (Schaefer), was reported April 17 (H.Rept. 105-58), and passed the House April 23. A companion bill, S. 555 (Allard), was introduced in the Senate April 10. These bills are opposed by EPA, which argues that using trust fund money to reimburse financially solvent owners would reduce the number of cleanups accomplished. The Agency also objects to the 85% allotment requirement; on average, it argues, it already meets the requirement, but it prefers to retain the flexibility to adjust over time to changes in appropriated funding. State and industry representatives support the measure. (For additional information, see CRS Report 97-471, Leaking Underground Storage Tank Cleanup Issues.) Congress has also considered legislation to reinstate the tax on gasoline and other motor fuels that feeds the Leaking Underground Storage Tank Trust Fund. As noted, the tax expired in December 1995. The President's FY1998 budget proposed reimposing the tax and both the House and Senate versions of the Reconciliation bill (H.R. 2014), now in conference, would do so. Other Tax IssuesSince 1980, Section 29 of the Internal Revenue Code has provided tax credits to producers of biofuels, a category that includes methane captured from landfills. According to industry sources there were 133 operating landfill gas-to-energy projects in the United States in 1994, with 79 additional projects planned. The number is growing rapidly, in part because of regulations promulgated March 12, 1996, under the Clean Air Act, requiring large landfills to capture and burn the gas that they generate. Combustion may be accomplished simply by flaring the gas, or the gas can be captured and used to produce useful energy. The latter approach is often more costly; as a result, solid waste officials argue that making energy recovery projects economically viable depends in many cases on the availability of tax credits. Section 29 credits, which are adjusted annually, amount to about $1.00 per million Btu of gas produced (or roughly one cent per kilowatt-hour of electricity). The credits will apply to production of gas through the year 2007. To qualify, a landfill has to sign a construction contract and place the project in service by specified dates. These dates have been modified four times since the credits were established. In the 104th Congress, provisions to extend the dates were first attached to the FY1996 budget reconciliation bill (H.R. 2491, the Balanced Budget Act of 1995), which was vetoed by the President December 6, 1995. Slightly different provisions were later enacted as part of the minimum wage bill, signed by the President August 20, 1996 (P.L. 104-188). The enacted provisions extend the placed-in-service date to June 30, 1998, and the contract-signed date to December 31, 1996. Affected landfills and energy companies have argued for further extensions to both the placed-in- service and contract-signed dates. However, the President, in his FY1998 budget submission, proposed rolling back the placed-in-service date to June 30, 1997, a move the Treasury estimated would raise $476 million in tax revenues. As of mid-July, it appeared unlikely that any change would be made. Neither the House nor the Senate Reconciliation bills (H.R. 2014 / S. 949) contained modifications to the Section 29 dates. Note: The principal federal law governing management of solid and hazardous waste is the Solid Waste Disposal Act. This law has been amended on eight occasions since its passage in 1965. The 1976 amendments, the Resource Conservation and Recovery Act (RCRA), were so comprehensive that the act has generally been referred to as RCRA since that time. This issue brief follows that convention, referring to RCRA, when the correct reference should be to the Solid Waste Disposal Act. H.R. 316 (Solomon) H.R. 360 (Towns) H.R. 398 (Bilirakis) H.R. 688 (Schaefer) H.R. 843 (Ford) H.R. 942 (Franks) H.R. 943 (Franks) H.R. 1041 (P. Kennedy) H.R. 1078 (Rivers) H.R. 1199 (Souder) H.R. 1346 (Gilchrest) H.R. 1358 (Buyer) H.R. 1393 (Rivers) H.R. 1586 (Rivers) National Beverage Container Reuse and Recycling Act of 1997. Similar to S. 215. Introduced May 13, 1997; referred to Committee on Commerce. H.R. 2102 (Talent) H.Res. 119 (Farr) S. 215 (Jeffords) S. 384 (Conrad) S. 443 (Baucus) S. 444 (Chafee) S. 445 (Chafee) S. 448 (Robb) S. 463 (Coats) S. 555 (Allard) S. 899 (Dodd) |
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