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Arkansas state legislators amended the waste fee statute in 2011, which cannot be imposed on residences or businesses subject to the Service Fee. Rather, it applies to a generator, transporter or disposal facility for any solid waste generated within the district or brought into the district for disposal. However, things can get complicated when waste generated in District A is disposed of in District B.
January 8, 2024
For the 10th consecutive year, Walmart is the world's largest company by revenue, according to the 2023 Fortune Global 500 list. Its base has always been Benton County, Arkansas. Back in 1962, brothers Sam and James Walton opened the first Wal-Mart Discount City, offering products at low prices and getting high-volume sales. After five years, the company had 18 stores in the state. In 1969, the business incorporated as Wal-Mart, Inc. A year later, it opened a home office and its first distribution center in Bentonville.
The state of Arkansas is divided into regional solid waste management districts. Each of them can evaluate its respective waste management needs, regulate landfills within its borders, and assess certain fees. Until 2011, a district could levy a Service Fee on each residence or business for which the district “[made] solid waste collection or disposal services available." During this period some districts charged fees other than the authorized Service Fee.
After several legal challenges, the state legislature amended the fee statute, in 2011, keeping the Service Fee and authorizing a Waste Assessment Fee of "no more than two dollars ($2.00) per ton of solid waste related to the movement or disposal of solid waste within the district." The Waste Assessment Fee cannot be imposed on residences or businesses subject to the Service Fee. Rather, it applies to a generator, transporter or disposal facility for any solid waste generated within the district or brought into the district for disposal.
Things can get complicated when waste generated in District A is disposed of in District B. Under the statute, the Waste Assessment Fee may be assessed by "[e]ither the district in which the solid waste was generated or a district in which the same solid waste is transported, stored, managed, or disposed" – but not both. The districts must “determine by interlocal agreement" how the fee will be assessed, administered and divided. If districts cannot agree on the division of the fees, then the fees must be divided equally between the districts.
Benton County Regional Solid Waste Management District (Benton) has no landfills within its boundaries. Much of the waste generated there ends up at the Eco-Vista Landfill, which is located in, and regulated by, Boston Mountain Regional Solid Waste Management District (Boston). Shortly after the 2011 amendment to the fee statute, Benton and Boston both adopted rules assessing a $1.50-per-ton Waste Assessment Fee. Both districts' rules called for the Waste Assessment Fee on waste generated in Benton and disposed of in Boston (referred to as interdistrict waste) to be divided evenly between the districts. The districts, however, signed a five-year interlocal agreement that allowed Benton to receive the entire $1.50-per-ton Waste Assessment Fee on interdistrict waste. Both districts' rules required Eco-Vista Landfill to collect the fee on all interdistrict waste it received.
After the five-year term of the interlocal agreement expired, Boston declined to renew it, choosing instead to exercise its statutory right to receive half of the Waste Assessment Fee on interdistrict waste. In response, Benton filed suit, claiming that, even without an interlocal agreement, it was entitled to the entire Waste Assessment Fee on interdistrict waste. In 2019, a state appeals court rejected Benton's argument that Boston was being unjustly enriched by receiving half of the Waste Assessment Fee and held that the two districts must share the fee on interdistrict waste.
Two months after that ruling, however, Benton's board approved new "emergency" rules purporting to reduce the Waste Assessment Fee from $1.50 per ton to $0.01 per ton and levy a Service Fee of $1.49 per ton. Under Benton's new requirements, when waste collected locally is disposed of outside the district, including in Boston at Eco-Vista Landfill, the hauler must pay both the Waste Assessment Fee and the Service Fee to Benton, unless the disposal facility itself agrees in writing to do so. Benton took the position that it was entitled to the entire $1.49-per-ton Service Fee and half of the $0.01-per-ton Waste Assessment Fee, even if it resulted in Boston receiving only a half cent per ton and unilaterally wiping out Boston's separate Waste Assessment Fee. Meantime, Boston's rules continued to provide that both Benton and Boston were entitled to receive $0.75 per ton of interdistrict waste.
Waste Management of Arkansas (WMA) collects waste generated in Benton and transports it to the Eco-Vista Landfill for disposal. Eco-Vista, LLC, a WMA affiliate, owns and operates the landfill. When Benton's new regulations became effective, Eco-Vista and WMA found themselves facing competing demands from the two districts. The new fee structure purported to reduce the Waste Assessment Fee – which Benton would supposedly split equally with Boston for waste disposed at the landfill – to $0.01 per ton of solid waste. It would also require the landfill to collect a Service Fee from Boston and remit it to Benton.
In July 2020, WMA and Eco-Vista filed suit seeking a determination that the changes adopted by Benton's board exceeded the district's statutory authority. After hearing argument regarding the plaintiffs’ motion for summary judgment, Circuit Judge John C. Threet ruled in favor of Eco-Vista and WMA, finding that Benton’s board "lacks the statutory authority to unilaterally supersede and replace Boston County RSWMD's Waste Assessment Fee of $1.50 per ton on waste generated in Benton County RSWMD and disposed within Boston Mountain RSWMD."
As for the Service Fee, Judge Threet held that Benton "may assess a service fee on residences and businesses for which the district makes solid waste collection or disposal services available" but "lacks statutory authority to assess the Service Fee on haulers and require haulers to collect and remit the Service Fee." A three-judge appellate panel agreed.
“The Fee Statute unambiguously requires the Waste Assessment Fee imposed on interdistrict waste to ‘be divided equally’ between Benton County RSWMD and Boston Mountain RSWMD in the absence of an interlocal agreement,” said the judges.“Benton County RSWMD seeks to circumvent this court's previous ruling requiring application of the plain language of the statute by renaming its Waste Assessment Fee to a Service Fee, leaving only a nominal Waste Assessment Fee to be shared by the districts. * * * [T]he plain and unambiguous language of the Fee Statute provides that Boston Mountain RSWMD has the right to assess a Waste Assessment Fee of up to $2.00 per ton on interdistrict waste and to keep half of that fee.”
The appeals court rejected Benton’s argument that Judge Threet’s decision was contrary to the fee statute, which allows "[e]ither the district in which the solid waste was generated or a district in which the same solid waste is transported, stored, managed, or disposed [to] assess the fee." The judges noted that the lower court did not hold that Benton lacks authority to assess a fee on interdistrict waste. Judge Threet had simply ruled that Benton had no business independently supplanting Boston's longstanding Waste Assessment Fee of $1.50 per ton with a nominal fee of $0.01 per ton. “Nothing in this holding is inconsistent with the Fee Statute, which does not explicitly address how a conflict in the fees assessed by the districts is to be resolved,” the panel continued.
The appeals court next made short work of Benton’s claim that it had statutory authority to assess a per-ton Service Fee on waste haulers and require them to collect and remit the Service Fee. “The plain language of the Fee Statute provides that the service fee is to be levied on residences and businesses for which the board makes solid waste collection or disposal services available – not on haulers,” the judges wrote. “Benton County RSWMD does not point to any language in the Fee Statute that authorizes it to levy a Service Fee on a per-ton basis against waste haulers. * * * If the legislature had intended to authorize districts to assess a Service Fee against waste haulers on each ton of solid waste generated within the district, it would have said so – or at least omitted the language specifically providing for the Service Fee to be levied against residences and businesses for which the district makes solid-waste services available.”
Benton County Regional Solid Waste Mgmt. Dist. v. Waste Management of Arkansas, Inc., et al., No. CV-22-142, Ark. Ct. App., Div. III, Nov. 29, 2023.
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