LEGISLATION: Localities Receive Little Support From Court Ruling

Opponents of flow control are not only savoring their victory in the Supreme Court, they're getting downright aggressive.

In May, the high court invalidated a municipal ordinance that required haulers to take garbage to a designated facility for processing and disposal because the regulation interfered with interstate commerce.

Unless Congress yields to pressure and passes a flow control law, a battle is quickly shaping up between traditional government involvement and free market competition in solid waste management.

Nowhere is this conflict more sharply focused and dramatic than in New Jersey, where state law created 22 solid waste management districts that have built or developed a waste management infrastructure of transfer stations, landfills and incinerators through revenue bonds totaling $1.6 billion of debt.

Under the law, county governments or special purpose authorities operate districts, which handle and dispose of solid waste under an elaborate facility designation plan overseen by state regulators. With deference to each district's plan, regulators decide about the coming and going of wastes within and between districts. Although the plans require all trash to be processed in New Jersey, local governments and haulers have no final say about where the trash goes. Ul

timately, each district's waste management facilities depend on a known and guaranteed waste flow.

In a case that is notable because the plaintiff is a local government, the borough of Haddan Heights filed suit in a federal district court to block state efforts to force the municipality to send its waste to an incinerator. Lawyers for Haddan Heights argued that the Carbone ruling invalidated the state's flow control laws; the borough said it would appeal.

Haddan Heights believes it can reduce its per-ton disposal costs from $90 to $50 by hauling its trash to Philadelphia. "The governor has asked local municipalities to be innovative in terms of cost savings, and we found one," said Haddan Heights' attorney. "We could save $65,000 in the last half of this year."

Atlantic Coast Demolition & Recycling Inc., Philadelphia, went to court last year to challenge New Jersey's flow control law. The judge ruled against Atlantic Coast last September, several months before the Supreme Court heard the Carbone case. The judge determined that the state's legitimate concerns outweighed any interference with interstate commerce. The company appealed the ruling to the Third Circuit Court of Appeals, where the case was on hold pending the Carbone outcome. Lawyers for Atlantic Coast have now asked the appellate court to rule in the company's favor based on Carbone.

Companies are citing the Carbone decision to attack the state's trash flow laws in several other cases pending in state courts, according to Deputy Attorney General Gail Lambert. Lambert argues that the Commerce Clause doesn't apply because the state is acting as a "market participant" and not as a market regulator. She argues that the state has no discriminatory intent, but a significant and legitimate public interest in its flow control system. Lambert cites the financial impact, anticipating potential losses to investors if bond ratings plummet because waste flow is not assured. She also warns of higher property taxes if governments lose disposal revenues but must still fund recycling and other programs.

In the midst of these cases, Sen. Frank Lautenberg (D-N.J.) has offered legislation to restore to state and local governments some of the flow control powers that the Carbone decision took away. Lautenberg's bill would protect flow control contracts and ordinances in effect prior to 1994 and would authorize future flow control arrangements for residential trash through a competitive designation process. Administration officials in New Jersey fault the Lautenberg bill for unduly restricting key waste management functions and programs.