U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

28–289 PDF 2006

IMPACTS OF RAILROAD-OWNED

WASTE FACILITIES

(109–74)

HEARING

BEFORE THE

SUBCOMMITTEE ON

RAILROADS

OF THE

COMMITTEE ON

TRANSPORTATION AND

INFRASTRUCTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MAY 23, 2006

Printed for the use of the

Committee on Transportation and Infrastructure

(
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-Chair

SHERWOOD L. BOEHLERT, New York

HOWARD COBLE, North Carolina

JOHN J. DUNCAN, JR., Tennessee

WAYNE T. GILCHREST, Maryland

JOHN L. MICA, Florida

PETER HOEKSTRA, Michigan

VERNON J. EHLERS, Michigan

SPENCER BACHUS, Alabama

STEVEN C. LATOURETTE, Ohio

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

FRANK A. LOBIONDO, New Jersey

JERRY MORAN, Kansas

GARY G. MILLER, California

ROBIN HAYES, North Carolina

ROB SIMMONS, Connecticut

HENRY E. BROWN, JR., South Carolina

TIMOTHY V. JOHNSON, Illinois

TODD RUSSELL PLATTS, Pennsylvania

SAM GRAVES, Missouri

MARK R. KENNEDY, Minnesota

BILL SHUSTER, Pennsylvania

JOHN BOOZMAN, Arkansas

JIM GERLACH, Pennsylvania

MARIO DIAZ-BALART, Florida

JON C. PORTER, Nevada

TOM OSBORNE, Nebraska

KENNY MARCHANT, Texas

MICHAEL E. SODREL, Indiana

CHARLES W. DENT, Pennsylvania

TED POE, Texas

DAVID G. REICHERT, Washington

CONNIE MACK, Florida

JOHN R. ‘RANDY’ KUHL, JR., New York

LUIS G. FORTUN ̃ O, Puerto Rico

LYNN A. WESTMORELAND, Georgia

CHARLES W. BOUSTANY, JR., Louisiana

JEAN SCHMIDT, Ohio

JAMES L. OBERSTAR, Minnesota

NICK J. RAHALL, II, West Virginia

PETER A. DEFAZIO, Oregon

JERRY F. COSTELLO, Illinois

ELEANOR HOLMES NORTON, District of

Columbia

JERROLD NADLER, New York

CORRINE BROWN, Florida

BOB FILNER, California

EDDIE BERNICE JOHNSON, Texas

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

ELIJAH E. CUMMINGS, Maryland

EARL BLUMENAUER, Oregon

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

LEONARD L. BOSWELL, Iowa

TIM HOLDEN, Pennsylvania

BRIAN BAIRD, Washington

SHELLEY BERKLEY, Nevada

JIM MATHESON, Utah

MICHAEL M. HONDA, California

RICK LARSEN, Washington

MICHAEL E. CAPUANO, Massachusetts

ANTHONY D. WEINER, New York

JULIA CARSON, Indiana

TIMOTHY H. BISHOP, New York

MICHAEL H. MICHAUD, Maine

LINCOLN DAVIS, Tennessee

BEN CHANDLER, Kentucky

BRIAN HIGGINS, New York

RUSS CARNAHAN, Missouri

ALLYSON Y. SCHWARTZ, Pennsylvania

JOHN T. SALAZAR, Colorado

JOHN BARROW, Georgia

(II)
SUBCOMMITTEE ON RAILROADS

STEVEN C. LATOURETTE, Ohio, Chairman

THOMAS E. PETRI, Wisconsin

SHERWOOD L. BOEHLERT, New York

JOHN L. MICA, Florida

SPENCER BACHUS, Alabama

JERRY MORAN, Kansas

GARY G. MILLER, California

ROB SIMMONS, Connecticut

TODD RUSSELL PLATTS, Pennsylvania

SAM GRAVES, Missouri

JON PORTER, Nevada

TOM OSBORNE, Nebraska

MICHAEL E. SODREL, Indiana

LYNN A. WESTMORELND, Georgia, ViceChair

DON YOUNG, Alaska

(ex officio)

CORRINE BROWN, Florida

NICK J. RAHALL II, West Virginia

JERROLD NADLER, New York

BOB FILNER, California

ELIJAH E. CUMMINGS, Maryland

EARL BLUMENAUER, Oregon

LEONARD L. BOSWELL, Iowa

JULIA CARSON, Indiana

PETER A. DEFAZIO, Oregon

JERRY F. COSTELLO, Illinois

EDDIE BERNICE JOHNSON, Texas

JAMES L. OBERSTAR, Minnesota

JOHN BARROW, Georgia

(ex officio)

(III)

(V)

CONTENTS

TESTIMONY

Page

Chasey, Kathy, Mayor, Mullica Township, New Jersey ....................................... 9

Buttrey, Hon. W. Douglas, Chairman, Surface Transportation Board, accompanied by Evelyn Kitay, Associate General Counsel, Surface Transportation

Board ..................................................................................................................... 9

Haines, William S., Jr., Deputy Director, Burlington County Board of Chosen

Freeholders ........................................................................................................... 9

Menendez, Hon. Robert, a U.S. Senator from New Jersey ................................... 5

Pallone, Hon. Frank, Jr., a U.S. Representative from New Jersey ..................... 7

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Barrow, Hon. John, of Georgia ............................................................................... 32

Cummings, Hon. Elijah E., of Maryland ............................................................... 51

Menendez, Hon. Robert, of New Jersey ................................................................. 59

Saxton, Hon. Jim, of New Jersey ........................................................................... 61

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Buttrey, Hon. W. Douglas ....................................................................................... 34

Chasey, Kathy .......................................................................................................... 44

Haines, William S., Jr ............................................................................................. 56

ADDITIONS TO THE RECORD

Cape May County Municipal Utilities Authority, Charles M. Norkis, P.E.,

Executive Director, statement ............................................................................. 61

Hinchey, Hon. Maurice D., a Representative in Congress from New York ........ 78

MassRecycle, Lisa Hayden, Legislative Analyst, letter, June 20, 2006 .............. 69

National Solid Wastes Management Association, Bruce J. Parker, President

and CEO, statement ............................................................................................ 71

New Jersey State League of Municipalities, Willaim G. Dressel, Jr., Executive

Director, letter, May 11, 2006 ............................................................................. 70

(1)

IMPACTS OF RAILROAD-OWNED WASTE

FACILITIES

Tuesday, May 23, 2006

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON RAILROADS, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, WASHINGTON, D.C.

The subcommittee met, pursuant to call, at 10:00 a.m., in Room

2167, Rayburn House Office Building, the Hon. Steven C.

LaTourette [Chairman of the subcommittee] presiding.

Mr. LATOURETTE. The Subcommittee on Railroads will come to

order this morning. Good morning, I want to welcome you all to

this morning’s hearing which is entitled the Impacts of RailroadOwned Waste Facilities.

Under the ICC Termination Act of 1995, the United States Surface Transportation Board has exclusive jurisdiction over railroad

facilities such as freight yards, truck to rail intermodal facilities,

and auxiliary tracks. Thus, Federal law preempts State and local

law regarding establishment and operation of such rail facilities.

However, this preemption only applies when the entity in question

is a rail carrier subject to STB jurisdiction. If the entity is not legally a rail carrier, then State and local law applies.

Now when you think of a rail carrier, you probably envision

chugging locomotives, rumbling freight trains, and tracks stretching beyond the horizon. But what if a company only owns a few

hundred feet of track, can it still legitimately claim to be a railroad? And what if that same company is engaged in the potentially

noxious business such as waste disposal? Should the ownership of

a short piece of railroad track equate to complete exemption from

State and local oversight? In my mind, the answer is no. Congress

established Federal preemption under the ICC Termination Act to

ensure the free flow of interstate commerce, not as a loophole to

allow sharp operators to escape legitimate local regulation.

At this morning’s hearing, I am going to have some questions for

Commissioner Buttrey about how we can assure that Federal preemption applies only to legitimate rail carriers. I am also looking

forward to hearing about the limitations of preemption under the

ICC Termination Act and the extent to which State and local laws

may still be applicable.

I want to welcome our other witnesses this morning: Mr. William

Haines, Jr., who is the Deputy Director of the Burlington County,

New Jersey Board of Chosen Freeholders and Ms. Kathy Chasey,

who is the Mayor of the Mullica—if I butcher that, I apologize, you

will hear from me later—Township in New Jersey. I want to thank

you for participating in this important Subcommittee hearing.
2

Before yielding to our guest Ranking Member Mr. Barrow of

Georgia, I want to request unanimous consent to allow 30 days for

members to revise and extend their remarks and to permit the submission of additional statements and materials by members and

witnesses. Without objection, so ordered.

It is now my pleasure to yield to Mr. Barrow for his opening remarks.

Mr. BARROW. Thank you, Mr. Chairman, for holding this hearing.

I want to welcome our guests and thank them for joining us today.

When Congress passed the Interstate Commerce Commission

Termination Act in 1995, we gave the Surface Transportation

Board exclusive jurisdiction over rail carrier transportation. The

reason we did that was to create a seamless rail transportation

network rather than to subject railroads to a patchwork of State

and local regulations that might hinder interstate commerce. However, Congress did not intend for this law to enable railroads to

shield themselves from State and local regulations when they are

engaging in activities that have nothing to do with rail transportation.

There was a case in Florida where a building material supplier

leased land from a short line railroad. West Palm Beach issued several notices of violations and cease and desist orders to the railroad

and the supplier for operating a business without a license and for

refusing to conform to the zoning ordinance. In response, both the

railroad and the supplier filed a complaint with the District Court,

seeking a judgment on whether the Interstate Commerce Commission Termination Act preempted West Palm Beach’s local laws.

Fortunately, in that case, the Court’s decision was obvious. There

was no preemption because the business had nothing to do with

rail transportation. However, in other cases, the outcome may not

be so obvious.

In my view, the line between what is preempted and what is not

preempted is a little thin. So I would, in closing, just caution the

Surface Transportation Board that, while we want to make sure

that local communities don’t unreasonably interfere with interstate

commerce, we need to make sure that interstate commerce doesn’t

ignore the legitimate concerns of local communities.

Thank you, Mr. Chairman. I look forward to hearing from the

witnesses and yield back the balance of my time.

Mr. LATOURETTE. I thank you, Mr. Barrow. I remarked to Mr.

Barrow when he came in, he has only been on the Committee about

a month, and he is already a Ranking Member. So, congratulations

to you in your elevation.

There is a lot interest, obviously, in this subject matter in the

States of New Jersey and New York, and this hearing comes about

at the request of a number of members, in particular Mrs. Kelly,

Mr. LoBiondo, Mr. Saxton, and our first panel as well.

I would now be happy to yield to Mrs. Kelly for any opening remarks that you choose to make.

Mrs. KELLY. First, let me thank you, Chairman LaTourette, for

holding this hearing and spotlighting an issue that is begging for

attention at the Federal level.

By manipulating the Interstate Commerce Commission Termination Act, waste hauling companies have been able to circumvent
3

local environmental safety and zoning regulations as well as State

laws by claiming to operate as a rail carrier, due to their company

operating near or on a small portion of a railway. The near placement of a company’s facilities near a rail line should not permit a

waste facility to evade State and local regulation, but that is exactly what is happening.

When I first brought this issue to your attention in my March

17th letter to you, I knew that this issue was not one that was exclusive to my New York-based District. If it is happening in Westchester and Orange Counties in New York, it is likely occurring in

other places in the United States. It seems that this perspective is

affirmed today as we see a wide range of municipalities represented here, both in person and in written testimony.

In two separate parts of my own Congressional District, local officials have had their safety and environmental regulations essentially bypassed by quasi-railroad operators. In Croton, New York,

in Westchester County, a railway requested an exemption from the

Surface Transportation Board to operate a waste transfer station

on a railway in the village. Such an exemption would have permitted the company to operate without it having to adhere to State

or local zoning and environmental laws. The site is owned by a

company with a long history of environmental abuses.

In August of last year, I wrote the STB on behalf of Croton officials, asking them to deny the exemption which they ultimately

and thankfully did. However, it appears that another company is

trying to take a similar strategy, forcing the village into the same

time consuming and costly process all over again. We can’t allow

this revolving door to continue to the detriment of our public health

and safety.

In a separate part of my District, a new rail company plans to

build a waste station that currently does not exist but which the

local and State governments are powerless to prevent because of its

planned proximity to railroad tracks. This scenario is equally disturbing because it suggests that a rail company could not only open

a waste transfer station wherever it chooses but that it could also

undermine waste facility operators that already have been good

neighbors and have respected State and local regulation. This scenario opens up a Pandora’s Box and removes any and all incentives

for waste haulers to adhere to local regulation by simply locating

their operations near train tracks or by building a couple hundred

feet on their own.

While we don’t want to return to the pre-Staggers era of overregulation of the railroads, we simply can’t accept the fact that

waste facilities can pop up in our communities with little or no

input from local and State officials.

I hope this hearing will produce a constructive dialogue that will

lead us toward a solution that will provide State and local Governments with input into the process that currently shuts them out.

The list of elected officials that are opposed to these two projects

include State Senators and assemblymen, supervisors, mayors,

councilmen, and board members, not to mention a vocal majority

of the public at large. Despite all that opposition, the current process leaves local officials with no voice at all.
4

I have introduced legislation that would ensure that local and

State environmental and safety regulations are adhered to by

waste haulers and rail operators. As Middletown Mayor Marlinda

Duncanson says in her statement, some of the affected towns have

long cooperative relationships with rail companies, and it is undoubtedly in the best interest of those rail companies, the waste

haulers, and the public at large that we work to ensure that the

companies operating in our communities continue to be good neighbors.

So I ask unanimous consent that the statements of Croton Mayor

Gregory Schmidt, Middletown Mayor Duncanson, and the testimony of Wawayanda Supervisor, John Razzano and Deputy Supervisor Dave Cole be submitted for record.

I look forward to the testimony of all of our witnesses, and I

thank you once again, Chairman LaTourette. This is an important

hearing. I appreciate your allowing me to be here.

Mr. LATOURETTE. Without objection, the gentlelady’s request will

be granted.

The Chair is advised that Mr. Boswell doesn’t have any opening

remarks.

Mr. LoBiondo?

Mr. LOBIONDO. Yes, Mr. Chairman, thank you very much for

holding this hearing and responding to our serious concerns. We

deeply appreciate it. I want to thank Mr. Saxton for joining with

me on behalf of South Jersey and also Senator Menendez and Congressman Pallone for being here today, something that I believe

has united the New Jersey delegation.

I am very pleased that we have Mayor Kathy Chasey of Mullica

Township, who will be testifying in a little while, and Freeholder

Bill Haines from Burlington Township. I have a port in Burlington

Township. Mr. Saxton and I share the geographic jurisdiction. I am

sure they will be able to give you some very compelling remarks.

Mayor Chasey and the residents of Mullica Township have been

through a very agonizing period over the last year. In the spring

of 2005, a local waste disposal company leased 20 acres of land adjacent to a short line owned and operated by a railroad company

for the purpose of establishing a 24 hour a day waste transfer facility. Needless to say, the township was very, very concerned with

the impact the facility would have on the quality of life for its residents. Concern turned to outrage very quickly after the township

was informed that existing Federal law preempts any local or State

laws, zoning ordinance, or environmental regulations.

Mullica Township joined with the State of New Jersey to fight

the proposed facility in Federal Court. In December of 2005, the

Court imposed an injunction barring the development of the facility

until the Court can resolve whether the National Parks and Recreation Act of 1978 conflicts with the preemption standard and the

Interstate Commerce Commission Act of 1995.

The National Parks and Recreation Act established the Pinelands National Reserve, 1.1 million acres of land, the development

of which requires the approval of a joint Federal and State commission. Fortunately, Mullica Township falls nearly in the center of

the Pinelands, and the conflicting Federal laws have granted the

township a temporary stay of execution that we hope will be made
5

permanent. In the interim, I am working with all of my colleagues

but especially Congressman Saxton of our delegation on legislation

we have introduced to remove the Federal preemption of waste

transfer facilities.

I understand the concerns our railroads have in reducing the

scope of Federal preemption, but facilities that are not integral to

the operation of a railroad, such as a waste transfer station, which

threaten the environment and local quality of life should not be

granted approval without the concurrence of the local residents.

I want to thank the Chairman again for holding this hearing,

and I am looking forward to the testimony.

Mr. LATOURETTE. I thank you, Mr. LoBiondo.

On our first panel today, we are joined by a colleague and a

former colleague. It is my pleasure to welcome for their testimony

today, first, Senator Robert Menendez, a former member of this

Committee, welcome back, and secondly, Representative Frank

Pallone, both of New Jersey.

Senator, thank you for making time to come over and see us, and

we look forward to hearing from you.

TESTIMONY OF THE HONORABLE SENATOR ROBERT MENENDEZ, A UNITED STATES SENATOR FROM THE STATE OF NEW

JERSEY

Senator MENENDEZ. Thank you, Mr. Chairman, and thank you

for the opportunity. I am glad to join with my colleagues here in

a united effort which I think transcends New Jersey. You will hear

a lot of New Jersey voices here today, but in fact this issue is far

beyond the confines of New Jersey.

I appreciate your and the Ranking Member’s focus on this, on an

issue that has severely impacted our State in recent years and

threatens to get a lot worse if action isn’t taken by the Congress.

And so, this hearing is incredibly important as we look at, I hope,

closing a glaring loophole in Federal law that puts all of our States

and Districts at risk, allows railroads to flout the critical Federal

and State and local environmental protections that keep our rivers

clean, our air clean, and our families healthy.

Now, my attention was first drawn to this when I had the privilege previously, as a member of this Committee and representing

the 13th Congressional District in New Jersey, when a small railroad began operating a solid waste transfer facility in one of our

communities for construction and demolition debris. Those sites

were open to the air, polluting the surrounding neighborhoods with

windblown debris. They had extremely poor storm water controls,

if any at all, allowing rain to leach through the trash piles and into

sensitive wetlands. The piles of trash at those sites could reach the

height of a three-story building, and at least on one occasion, they

caught fire.

It was inconceivable that these sites could actually be legal. Of

course, they really weren’t legal, at least not according to the State

which fined the operator $2.5 million. The county and local planning boards were sent impassioned pleas asking for help. But the

railroad claimed that because of the exclusive jurisdiction of the

Surface Transportation Board over railroad activities, they were ex-
6

empt from all State and local regulations regarding the handling

of solid waste.

Now, Mr. Chairman, I think all of us, when we look at Congress’

intent when it passed the Interstate Commerce Commission Termination Act in 1995, it created the Surface Transportation Board

and gave it broad authority over the rail transportation issues. I

don’t think that this was envisioned as being part of that focus.

However, despite the preemption of local regulations, I think Congress’ intent was very clear at the time ICCTA was passed, and in

that respect, the Congress did not intend to preempt Federal environmental statutes such as the Clean Air and Clean Water Acts.

There are a series of cases that my statement has in it, Mr.

Chairman, which I would ask consent to be included in the record

in its full.

The reality is that the EPA has virtually no regulatory regime

for solid waste facilities since that responsibility is supposed to be

handled by the States. In this case, however, the States are being

prevented from acting, leaving a regulatory hole that results in

harm to the environment and the families living in close proximity

to these waste transfer sites.

This is not a problem that is going away either. The New Jersey

Department of Environmental Protection reports that no less than

five new railroad-operated waste transfer sites opened just in the

past year. While most of them are in one community, you will hear

about others in different parts of the State as well.

Now, one of the challenges, and I know Congressman Pallone

will probably speak to this, is that companies continue to exploit

the loophole. One recycling company that wants to open a transfer

facility in Monmouth County has voluntarily brought their proposal

to the county’s Solid Waste Transfer Council, but said, if the council denies the application, they would ‘‘pursue a preemption facility

and form a union with a railroad, and under Federal law, all local

authority and control would be lost.’’ So, in essence, not only are

there those who are directly flouting the very intention that we

had, but there are those who are attempting to strong-arm local

authorities, and that is clearly not what Congress had in mind

when it passed the ICCTA.

It is obvious that voluntary actions will not be enough to protect

the health and safety of New Jersey residents and workers in these

facilities.

Finally, Mr. Chairman, it is my opinion that the operation of a

solid waste transfer facility is in no way integral to the operation

of a railroad. That question has not been settled by the Courts or

the Surface Transportation Board, but it can be settled unambiguously by the Congress. Last July when I was still in the House,

I joined members of both parties of our delegation including some

on this Committee to introduce H.R. 3577 that would explicitly

state that the Surface Transportation Board does not have exclusive preemption over the operation of solid waste transfer facilities

and that these facilities would be subject to local zoning and environmental regulations.

I don’t think we can stand idly by and allow railroads to exploit

an unintended loophole in Federal law at the price of the health

and well being of the constituents and our environment. So I com-
7

mend you, Mr. Chairman, for holding the hearing. I hope we will

see action.

We are pursuing this on the Senate side. I know Senator Lautenberg has the exact legislation that I introduced in the House. We

are aggressively pursuing it there, and I hope that together we can

preserve the essence of the preemption for the railroads as it relates to all legitimate issues that are in the operation of a railroad.

When they overreach and say that solid waste transfer stations are

part of that legitimacy, I think that they are flouting the intention

of the Congress. I appreciate your leadership in this regard.

Mr. LATOURETTE. Senator, without objection, your full statement

will be inserted in the record, and I want to thank you for taking

time from your duties on the other side of the Capitol to share your

thoughts with us.

Congressman Pallone, thank you for coming, and we look forward to hearing from you.

TESTIMONY OF THE HONORABLE FRANK PALLONE, JR., A

UNITED STATES REPRESENTATIVE FROM THE STATE OF

NEW JERSEY

Mr. PALLONE. Thank you, Mr. Chairman, and also our Ranking

Member Mr. Barrow, thank you also for holding this hearing and

for allowing me to testify before you today.

I did want to particularly make mention of the comments that

the Chairman made in his opening remarks where he said that

preemption should apply only to legitimate rail carriers. I think

that if legislation is passed that essentially implements what the

Chairman said in that remark, we will be very happy.

I would point out, however, that if you listened to Senator

Menendez’ comments with regard to the Red Bank proposal which

is in my District, I am sure you heard him say that one of the options of one of these private companies that is suggesting they can

utilize this preemption is that they would essentially tell the local

officials: Look, if you don’t approve this, then we will get together

with one of the rail carriers and have this operated under their

auspices.

So when we talk about how we are going to sort out legitimate

rail carriers and what they do, we have to be mindful of the fact

that there are those unrelated to rail who will try to somehow come

under the auspices of rail carriers, and we are going to figure out

how to deal with those kinds of loopholes that different people will

try to create. But I do appreciate your comments.

Obviously, today’s hearing highlights what has become a very

troubling issue throughout my home State of New Jersey, but as

some of the other members, like Mrs. Kelly, have mentioned, this

is a threat nationwide, I think, to our environment and to public

health. As you know, certain waste handlers and railroad companies have tried to exploit this loophole in Federal law in order to

set up unregulated waste transfer facilities.

Under the Interstate Commerce Commission Termination Act of

1995, the Surface Transportation Board has exclusive jurisdiction

over transportation by rail carriers and the ability to grant Federal

preemption over other laws at any level—local, State or Federal—

that might impede such transportation. This makes sense, and it
8

was obviously Congress’ intention in passing the ICCTA to ensure

that the STB would enforce compliance with the Commerce clause.

And I agree that local and State Governments should not have

the ability to unduly impede interstate rail operation, but Congress

intended such authority to extend only to transportation by rail,

not to the operation of facilities that are merely sited next to rail

operations or have a business connection to a rail company. Unfortunately, certain companies have exploited uncertainty regarding

Congressional intent to build or plan waste transfer stations next

to rail lines and avoid any regulation, giving them a competitive

advantage.

In New Jersey, there are approximately nine railroad transfer facilities operating under supposedly Federal preemption, one of

which actually handles hazardous waste, and some of these companies have gone before the STB to seek Federal preemption of a host

of environmental and public health laws that apply in every other

waste transfer facility. Even without applying for specific exemptions from the STB, companies have held up the threat of Federal

preemption as a way of getting local and State Governments to

back down on proposed regulations.

Now, word is spreading. This is getting worse, Mr. Chairman, in

my State. In my home District, Senator Menendez mentioned a

company called Red Bank Recycling is preparing to take advantage

of the possibility of preemption and move forward with a proposal

to build railroad sitings as well as facilities for transferring construction debris and separating recyclable materials.

Officials from the borough of Red Bank, the County Solid Waste

Advisory Council, and the State have all weighed in with my office,

expressing grave concerns about this proposal. The Red Bank proposal and others throughout the State have shown that certain

waste haulers are trying hard to avoid environmental regulations

and to site facilities in environmentally sensitive locations. One facility in Mullica Township—the Mayor is here—was stopped by a

court order before it could begin operations but would have been

located in the midst of the Pinelands region.

Unregulated waste transfer stations are not merely small operations that exist to move containerized waste from trucks to rail,

and that is why I brought this poster which is to my right. As you

can see from the poster, these facilities are large, they are dirty,

and often in the midst of heavily populated areas. The one picture

here in the poster is in North Bergen, New Jersey, and as you can

see clearly, it is right across the street from a McDonald’s and

other retail locations. This facility performs much of the same work

that you would expect to see at any large waste transfer station

with the exception that this particular station does not have to

comply with the State’s rigorous solid waste regulations.

Mr. Chairman, I don’t come before you to ask that Congress do

anything to interfere with the legitimate interstate movement of

freight rail. You mentioned that yourself, Mr. Chairman. In fact,

the freight rail industry itself does not see Federal preemption of

environmental laws as critical to their commerce. In a recent filing

with the STB, the Association of American Railroads noted that potential Federal loopholes under the ICCTA are being abused by
9

parties whose objective is something other than providing rail service. So they agree with us.

I simply want to ensure that these new waste facilities sited near

rail lines comply with the same regulations as every other facility

of this type, and that is why I introduced the bill H.R. 4821, legislation that was originally championed by our two State Senators.

It simply amends the law to say that solid waste management and

processing are excluded from the jurisdiction of the STB. This will

do nothing to impede interstate freight rail service but will ensure

that solid waste facilities next to rail lines fall under the same regulations as every other waste facility.

Again, I hope that we can pass legislation like this, and I appreciate your comments and the Committee’s attention. Thank you.

Mr. LATOURETTE. Congressman Pallone, thank you very much

for coming and sharing your thoughts with us as well. Unless

somebody has a question for the Congressman, you go with our

thanks. Thank you very much.

At this time, it is my pleasure to call up our next panel. We are

joined by the Honorable W. Douglas Buttrey, who is the Chairman

of the Surface Transportation Board, and he will be accompanied

this morning by Evelyn Kitay, who is the Associate General Counsel of the Surface Transportation Board.

Chairman Buttrey, thank you very much for coming to share

your thoughts with us this morning. Your entire statement will be

made part of the record, and we look forward to hearing from you.

Thank you for coming, sir.

TESTIMONY OF THE HONORABLE W. DOUGLAS BUTTREY,

CHAIRMAN, SURFACE TRANSPORTATION BOARD, ACCOMPANIED BY: EVELYN KITAY, ASSOCIATE GENERAL COUNSEL,

SURFACE TRANSPORTATION BOARD; WILLIAM S. HAINES,

JR., DEPUTY DIRECTOR, BURLINGTON COUNTY BOARD OF

CHOSEN FREEHOLDERS; TESTIMONY OF KATHY CHASEY,

MAYOR, MULLICA TOWNSHIP, NEW JERSEY

Mr. BUTTREY. Thank you, Mr. Chairman, and good morning. My

name is Douglas Buttrey. I am the Chairman of the Surface Transportation Board. I appreciate the opportunity to testify before you

today about Federal preemption for rail-related facilities, and I appreciate the fact that you are going to enter my entire testimony—

this will be a summary—in the record.

The express Federal preemption contained in the Board’s governing statute of 49 U.S.C. 10501(b) gives the Board exclusive jurisdiction over transportation by rail carriers. Congress has defined the

term, transportation, broadly to include all of the related facilities

and activities that are a part of rail transportation. The purpose of

preemption is to prevent a patchwork of otherwise well intentioned

local regulation from interfering with the operation of the rail network to serve interstate commerce.

Both the Board and the Courts have made clear, however, that

although the scope of the preemption is broad, there are limits.

While a literal reading of the statute would suggest that it preempts all other law, neither the Board nor the Courts have interpreted the statute in that manner. Rather, where there are overlapping Federal statutes, they are to be harmonized with each stat-
10

ute given effect to the extent possible. This is true even for Federal

statutory schemes that are implemented in part by the States such

as the Clean Air Act, the Clean Water Act, and the Solid Waste

Disposal Act.

When States or localities are acting on their own, certain types

of actions are categorically preempted regardless of the context or

basis of the action. This includes any form of permitting or preclearance requirement such as building, zoning, and environmental

and land use permitting, which could be used to deny or defeat a

railroad’s ability to conduct its rail operations or to proceed with

activities that the Board has authorized. Also, States or localities

cannot regulate matters directly regulated by the Board such as

rates or service or the construction operation and abandonment of

rail lines.

Otherwise, whether preemption applies depends on whether the

particular action would have the effect of preventing or unreasonably interfering with rail transportation. Types of State and local

measures that have been found to be permissible, even in cases

that qualify for preemption, include requirements that railroads

share their plans with the community when they are undertaking

an activity for which a non-railroad entity would require a permit,

or that railroads comply with local electrical, fire, and plumbing

codes.

In cases involving facilities that require a license from the Board,

an environmental review under NEPA, the Board addresses both

the transportation-related issues and any environmental issues

that are raised.

Even where no license is needed from the Board, there are several avenues of recourse for interested parties, communities, or

State and local authorities concerned that preemption is being

wrongly claimed to shield activities which do not qualify. Any interested party can ask the Board to issue a declaratory order addressing whether particular operations constitute rail transportation

conducted by a rail carrier.

Alternatively, parties are free to go directly to Court. It is worth

noting that the Board and the Courts have never reached different

conclusions regarding the availability of preemption for particular

activities and operations. Finally, in some cases, environmental

and safety concerns have been successfully resolved through consensual means by the railroad and the community working together to address their respective interests.

Given the strength and breadth of the preemption, the potential

for misuse is a definite concern. Cases involving solid waste transfer, storage, and/or processing facilities proposed to be located

along rail lines are especially controversial and often raise concerns

that the operations could cause environmental harm. In every case,

however, interested parties, communities, and State and local authorities concerned about a proposal have recourse to the Board or

to the Courts.

The inquiry into whether and to what extent preemption applies

in a particular situation is naturally a fact-bound question. There

have been only a few cases that have come before the Board involving solid waste facilities. The Board and the Courts will continue

to explore where the boundary may lie between traditional solid
11

waste activities and what is properly considered to be part of rail

transportation and what kinds of State and local actions are federally preempted in the individual cases that arise.

In conclusion, it is important to reiterate that both the Board

and the Courts have interpreted the preemption statute broadly.

There are limits on the preemption which is harmonized with other

Federal laws. The question of what constitutes transportation by

rail, according to the statute and precedent addressing the rights

of railroads and of State and local authorities, is still being fleshed

out by the Board and the Courts in individual cases. However, it

is clear that not all activities are entitled to preemption simply because the activities take place at a facility on rail-owned property.

Of course, cases involving preemption for railroad facilities are

likely to remain controversial. But even in cases that do not require review and approval by the Board, parties concerned that

preemption is being misused in a case involving a facility have

ways to raise their concerns at the Board or in the Courts.

I appreciate the opportunity to discuss these issues with you

today, and I will be happy to answer any questions that you may

have.

Mr. LATOURETTE. Chairman Buttrey, thank you very much for

coming here today and thank you also for your very concise statement. I think from the earlier panel with Senator Menendez and

Congressman Pallone, and I know we are going to hear from some

of our other colleagues, and in the opening statements of Mrs.

Kelly and Mr. LoBiondo, you get what the problem is as far as

these folks are concerned.

I just want to talk to you a little bit about the avenues. You said

several avenues of recourse. If a community determines that they

want to challenge some activity of one of these folks that are claiming preemption, it is my understanding that if they go to Court, the

Court may but doesn’t have to refer or ask the STB for a declaratory or an expert opinion. Is it your experience and is it the Board’s

experience that this is being done on a consistent basis so that we

have a consistent body of case law?

I think I heard you say that there has never been a disagreement

between what the STB has ruled and what the Courts have ruled.

Does that continue to be the case?

Mr. BUTTREY. That continues to be the case, Mr. Chairman.

Mr. LATOURETTE. You pointed to Section 10501(b) and indicated

that does not displace all other Federal and State law. The question that I think I have is in that instance, do you think that the

communities that are currently having these difficulties are aware

of the distinction between preemption for economic regulation on

the one hand and the fact that they retain jurisdiction, for instance, with police powers on the other? If not, what, if anything,

is the STB doing to increase the awareness of these communities

to that fact?

Mr. BUTTREY. Mr. Chairman, I think there is considerable confusion around the Country about what these rules are and are not.

I heard this morning from the Senator’s and the former Congressman’s testimony that would indicate that is still the case. So I

think this confusion is there. I am not sure exactly what the Board

could do. I think these hearings that you are having today will illu-
12

minate this issue to a great extent and bring it to the fore, which

I think is important.

I heard both the Senator and the former Congressman talk about

the fact that statements have been made to local communities

about the fact that if they couldn’t get their facility one way, they

would try to get it another by using the railroad preemption. I

think there is some misrepresentation there. I can’t help but believe that it is intentional misrepresentation, and people have been

misled about what the law is and is not. The line of Board precedent on this is very consistent. The line of Court decisions affirming those precedents is very consistent.

The Congress, I think, put preemption in place for a very good

reason, and I think they expect the Board and I think they expect

the Courts, in relating to what the Board decisions are, to build on

the foundation that they have laid with this preemption issue in

the statute.

I would have to say I think we have done a fairly good job of

building on the foundation that the Congress made for us to the

extent that people have said or groups or interests have said that

we have done a good job. At least the Courts have agreed with us

so far, and I would hope that in the future, when we make decisions in this area, that they would be sound decisions in keeping

with the statute and the intention of the preemption law and that

we would continue to have the affirmation of the Courts as we go

forward.

Mr. LATOURETTE. Let me ask you just a procedural question. If

a community were to file a claim relative to the facilities preemption, does the Board conduct a live hearing or do you do everything

based upon written pleadings and briefs?

Mr. BUTTREY. Generally, they are based on, they are obviously

based on written pleadings in that we function very much like a

special Court for railroads and shippers over at the STB. Generally

speaking, the record is brought forth from a complaining party,

whoever that party may be, and the decision is rendered based on

a written evidentiary record. We normally do not have oral arguments or hearings on these issues. They are usually done by written pleadings.

And I would add this, too, that these matters are given expedited

treatment. They are acted on quickly. As long as I am there, Mr.

Chairman, they will continue to be acted on quickly.

Mr. LATOURETTE. I appreciate that very much.

My last question is, and you correctly point out that the statute

indicates that in order to be subject to one of these preemptions,

it has to be a rail carrier providing rail transportation. Does the

Board ever take into consideration whether or not the party involved, the company involved is paying, for instance, into the railroad retirement system? Do you ever confer with the Railroad Retirement Board to determine whether or not we actually have a

railroad here or we have something else?

Mr. BUTTREY. I am not aware of that. I may refer to Ms. Kitay

here to see if she could clarify that, but I am not aware of any case,

maybe she is, where that has been the case. That would not, to me

anyway, initially anyway just on first blush, sound like something

that we would do, but Evelyn may know of another case.
13

Ms. KITAY. I don’t think we have ever looked into the railroad

retirement situation, but there is Board and Court precedent looking very carefully at whether the entity that holds itself out as a

rail carrier really is a rail carrier, and we have found that somebody just having the name, railroad, is not enough, for example.

Mr. LATOURETTE. As we approach sort of the 10 year anniversary of this thing, you have heard what the issue is. You know

what it is, the concerns among our members today. Is there any

suggestion as to a tweak of the statute that we need to do that

would clear this up a little bit so that we don’t have the confusion

that you talk about?

Mr. BUTTREY. Mr. Chairman, when this issue came up, I think

for the very first time to my knowledge anyway was last year, we

didn’t take a position on the legislation last year. We have not

taken a formal position this year about any amendments to the

law. What I would say is I think the gist of my testimony today

and both the verbal testimony and the written testimony would indicate that the system we have in place now seems to be working

pretty well. That is not to say, however, that there aren’t people

out there, interests out there in the Country who are very eager

to take advantage of what they perceive to be a loophole in the law.

I will tell you this: We take our environmental responsibilities at

the Board very seriously, and as I said before, as long as I am

there, we will continue to do that, and I can assure you of that.

Mr. LATOURETTE. I thank you. I thank you very much.

Mr. Barrow?

Mr. BARROW. Thank you very much, Mr. Chairman.

At the outset as a housekeeping matter, I believe that any statements or remarks of Congresswoman Corrine Brown might have

been covered by the unanimous consent.

Mr. LATOURETTE. It was, but we will make double sure.

Mr. BARROW. Good, and I also want to ask unanimous consent

that we allow Congressman Maurice Hinchey and the statement of

the National Solid Waste Management Association to be added to

the record of these proceedings as well.

Mr. LATOURETTE. Without objection.

Mr. BARROW. Thank you, sir.

Mr. Chairman, just at the outset, I want to clarify something

that the Chairman asked you a minute ago about this. He asked

a question about procedure, and I want to make sure we are at a

point of agreement because you said earlier that the findings and

the conclusions of the Courts are in remarkable agreement with

the findings and conclusions of the Board on the matter of the substantive scope of preemption in this area.

But I also heard him ask a slightly different question that gets

at the procedural morass that folks can find themselves in. I heard

him to ask whether or not the Courts consistently refer these matters to the Board, or whether or not the Courts sometimes decide

these issues for themselves or sometimes refer these issues to the

Board. As a matter of practice, do the Courts consistently refer

these matters to the Board, or do they sometimes decide these matters themselves?

Mr. BUTTREY. My experience, and I would stand corrected by my

counsel here, but my recollection of all the case law on the matter
14

that I have reviewed, and I have tried to diligently review it all,

the Courts have occasionally sought the Board’s review of this issue

and sometimes they do not. Sometimes they simply look at the case

law and look at the Board’s precedents and rule themselves without coming to the Board.

But we have a procedure at the Board called a declaratory order

that is a procedure that is very useful in this particular type of

case where the party, aggrieved party or interested party, could file

for a declaratory order similar to an application for declaratory

judgment in a regular Court.

Mr. BARROW. Well, that is a concern of mine that I have because

if the Court refers the matter to you or if the party initiates the

matter with you, your practice and procedure becomes the practice

and procedure that folks are stuck with.

You said that these proceedings were expedited. If you say they

are conducted normally, in fact in every instance you describe, on

a written record which has to be prepared and produced, that requires time. It isn’t as quick, for example, as a TRO in a Federal

Court. If the Federal Court has some question about preemption

and then refer it to you, they are stuck with a process that doesn’t

allow you to go in front of a Court in five days or to get a TRO.

You are stuck with the proceedings.

So how expedited is that actually? How quickly? What is the

fastest turnaround time someone has in getting a declaratory judgment, if you will, from you, that something is not preempted from

the time it is first initiated with you, either by a Court referring

it to you or by someone taking it to you in the first instance?

Mr. BARROW. I would have to refer to my counsel on that because

she is our chief litigator in these matters and would have a better

answer for that time frame involved.

Mr. BARROW. Does anybody know what the quickest turnaround

time has been?

Ms. KITAY. In the Croton-on-Hudson case, we issued a stay very

quickly. I can’t remember how many days it was, but I don’t think

that that has been a problem really, although it could be a potential problem. I think that in several other instances, including the

Pinelands case if I am not mistaken, the Court issued a stay very

quickly.

Mr. BARROW. Was the stay given effect?

Ms. KITAY. Yes.

Mr. BARROW. Was there a right of appeal from someone? What

right of appeal do they have if someone issues a stay, the stay before the Board?

Ms. KITAY. Well, if there is a stay before the Board, I believe that

on the Croton-on-Hudson case it was a temporary stay pending further pleadings, and then we issued a subsequent decision disallowing use of the expedited class exemption procedure in that case. I

think the first decision was issued in August, and the second decision in November.

Mr. BARROW. Has there been any instance in your knowledge,

your recollection, in which someone has asked for a stay, and a

stay wasn’t in effect throughout the entire time that the party was

asking for the stay?

Ms. KITAY. I am not aware of any situation like that.
15

Mr. BARROW. If the Board issues a declaratory judgment in favor

of the parties opposing the operation of the facility, can that be appealed, and if so, to whom?

Ms. KITAY. Yes, you go to the Courts of Appeal to appeal those.

Mr. BARROW. Right, and what happens with the stay then? It is

up to the Court. Then you have two bodies deciding whether or not

there will be a stay. You have the Board level, and then that can

be challenged. The separate unit, the case within a case, the lawsuit with a lawsuit that develops, though, is whether or not the

stay remains in effect while someone is arguing about the scope of

preemption.

Ms. KITAY. Well, the only case that we have ever stayed or been

asked to stay is the Croton-on-Hudson case. So we haven’t had that

much experience, but I don’t think these cases have languished for

years. I think, in fact, there has been recourse either at the Board

or in the Courts in every instance.

Mr. BARROW. Well, Mr. Chairman, I don’t want to trespass on

the other members’ time, but I will ask one last question.

If there is remarkable agreement between the Board and the

Courts with respect to the specific subject matter of waste transfer

facilities not be covered by the scope of preemption, why would

anyone object to making that clear and putting it in legislation that

will expedite this process and send a clear signal to the operators

they are not going to get away with this, to augment what you are

finding through the case by case common law approach, both at the

administrative level and the Courts, with specific legislation that

says what everybody agrees on? Should there be a problem with

that?

Mr. BUTTREY. Representative Barrow, I would answer your question by saying this. The preemption language in the statute is very

broad and covers a lot of different kinds of activities. I think that

we just have to be very cautious about whatever we do to make

sure that the preemption, the basic foundation of preemption is not

eroded to the extent—

Mr. BARROW. I quite agree.

Mr. BUTTREY.—that it could be chipped away piece by piece until

finally you have a situation where the Courts are saying, we really

don’t know what is going on here anymore.

Mr. BARROW. Well, right now, it is a fact-specific process that requires some sort of adjudication, some sort of common law process

in which the party has to fight it out and spend the resources to

do it on a subject matter where we are all in agreement. This is

an area that we might not want to recache the formula in coming

up with a general proposition that covers all cases that generates

a new level of uncertainty around its perimeter.

But if we can all agree that solid waste transfer facilities operated by folks who aren’t railroads on their property should not be

covered, why not just put that in there?

Mr. BUTTREY. If that is what the Congress chooses to do, that is

what the Congress chooses to do.

Mr. BARROW. It is an administrative problem.

Mr. BUTTREY. We would abide by the law whatever the law is.

We are going to follow the statute.

Mr. BARROW. Thank you.
16

Mrs. KELLY. If the gentleman would yield?

Mr. BARROW. Yes, ma’am. I don’t have any time to yield, but I

will be happy to.

Mrs. KELLY. With regard to the Croton decision which was in my

District, the problem is not the decision itself. The problem is that,

once a decision is rendered, then the company will sell to another

company and the local entities then have to go through the process

again. It becomes a chain reaction.

Mr. LATOURETTE. Well, I thank the gentleman, unless you have

an observation to make on that.

Mr. BARROW. No, thank you.

Mr. LATOURETTE. It is my pleasure now to yield five minutes to

Mrs. Kelly.

Mrs. KELLY. Thank you. I appreciate your yielding to me.

The problem is exactly as I described it. In the Croton decision,

the local entity, Croton-on-Hudson had tried repeatedly through

the Courts in every way possible to stop a very messy situation. We

finally got the decision, and it was rendered very quickly, much to

our astonishment and grateful astonishment I might say.

That decision, though, caused the company—it was Northeast

Interchange Railway, LLC—the Northeast Interchange Railway

went for sale. Another entity then will step in, buy it, and then the

local people have to go through the process again and the Board

has to go through the process again. Somewhere we need to

change. We need to break that chain.

I yield back the balance of my time.

Mr. LATOURETTE. Does the gentlelady want to ask any questions?

Mrs. KELLY. I would be delighted to ask a question about that

to Chairman Buttrey about that particular case. That was a class

exemption. It was a standing administrative suspension of an active STB regulation. It allowed a very truncated and short notice

process for a person claiming rail carrier status to do whatever

they wanted to do. In this Northeast Interchange Railway case, the

STB decided to withdraw the class exemption status of the transaction and require a full-blown normal application but only after

the local communities took up the burden of challenging the original class exemption.

So my question is basically this: Has the STB considered cutting

back the scope of these class exemptions in order to allow a better

look for the first time around of the proposed railroad action? And

second, isn’t it true that Association of American Railroads just recently filed a petition with the STB to reduce the scope of these

class exemptions?

Mr. BUTTREY. Representative Kelly, you have touched on a hot

point for me. Since coming to the Board about two years ago, there

are some due process issues that I think need to be addressed, and

this is one of them. I think your case awakened, if you will, an interest in both Board members, both myself and Vice Chairman

Mulvey, as a due process issue that needs to be addressed.

We have instituted or we are in the process now of instituting

a rulemaking proceeding to change that process, so the people in

the local communities have more of an opportunity, if you will, to

be aware of what is going on before it might be, but it is really not
17

too late necessarily because they would always have recourse to the

Courts or the Board to reverse a class exemption. But our effort is

to make the process more transparent, if you will, so that parties

would have notice of these things longer so they could have time

to respond before these things go into effect.

That is an ongoing process that we are involved in right now

which goes to the very heart of your question. What are we doing

to make sure these things don’t go into effect before it is so-called

too late because it is not really too late, but it is always hard to

undo something after it is already done than it is prevent it from

happening in the first place. So that is what we are trying to do.

Mrs. KELLY. Chairman Buttrey, would it help you if we were able

to put some legislative fix in there? Would that be helpful?

Mr. BUTTREY. We are actually doing it at the regulatory level

through the rulemaking process. It doesn’t even require legislation.

It is difficult to get legislation passed from time to time, depending

on what it is, and we intend to deal with this through the rulemaking procedure under the Administrative Procedure Act.

Mrs. KELLY. I assume you are working with our Chairman.

Mr. BUTTREY. Yes.

Mrs. KELLY. Thank you very much. I yield back. Thank you, Mr.

Chairman, for letting me participate.

Mr. LATOURETTE. I thank the gentlelady.

Mr. Cummings?

Mr. CUMMINGS. Thank you very much, Mr. Chairman.

Tell me something. How do these things get established? In other

words, do they have to come to you at all before they can just set

these things up wherever they get ready to?

Mr. BUTTREY. Generally speaking, we would not get involved in

it unless a complaint was filed with us about some activity where

a claim was being made that they were operating under the creation of the Act. A complaint would be filed either by a local community or by an individual. It can be filed by anybody. It can be

filed by a neighbor to this facility.

To use the example that was here just a few minutes ago, the

manager of a McDonald’s, the McDonald’s Corporation, if he is

upset about it, he can file with the Board for a declaratory order,

saying: Is this activity preempted or not? We would have to rule

on that.

Mr. CUMMINGS. So when the issue comes to you a little bit earlier you were talking about the stages. Is the issue normally whether this is a rail operation? Is that usually what it is all about? Do

you follow me?

In other words, it sounds like that is what the issue would almost have to come down to be. Is that normally the issue?

Mr. BUTTREY. There is a threshold question that needs to be answered. That is: Is this rail transportation by a rail carrier? Is this

activity part of rail transportation, or is it not?

Mr. CUMMINGS. When these facilities are established and they

are not getting any authority from the Federal Government, then

I guess it is a natural conclusion, a reasonable conclusion that they

are getting it from State and local.
18

Mr. BUTTREY. That would be the conclusion because the State

are administering the Clean Water Act, the Solid Waste Disposal

Act, and the Clean Air Act.

Mr. CUMMINGS. Then after they establish these things and they

are exempt, the problem is the State doesn’t have too much authority, is that right?

Mr. BUTTREY. Well, if the issue is presented to us and we rule

that they are not preempted, then the State would be able to shut

them virtually, I would think, immediately.

Mr. CUMMINGS. That is what I meant to say.

Mr. BUTTREY. Right, right.

Mr. CUMMINGS. Do you inspect these facilities for any reason?

Mr. BUTTREY. I am sorry. I didn’t catch that.

Mr. CUMMINGS. Do you inspect them?

Mr. BUTTREY. No, we do not inspect them. We do not have any

inspection personnel. We do not have any inspection authority. We

would make a determination of whether it is preempted or not

based on a written record that is before us, very much like a Court

would do.

Mr. CUMMINGS. That is about it? I mean that is about basically

what you do?

Mr. BUTTREY. That is correct.

Ms. KITAY. Can I just say something?

Mr. CUMMINGS. I would love to hear it.

Ms. KITAY. If the proceeding requires a license from the Board,

in other words, if it is a rail, if it is part of a proposal to construct

new line or possibly to acquire and operate new line, then they

need a license from the Board. If the facility is part of that proposal, it would be considered. In any case like that, the Board

would look at both the transportation aspects and the environmental aspects and generally would conduct an environmental review under the National Environmental Policy Act. As part of that

review, any communities could come in or any interested parties

concerned about the facility could come in, and the Board would

address those issues as part of its environmental review. Then the

Board typically would impose conditions on any grant of authority.

That is true for cases that require a license.

In cases that do not require a license, then we do exactly what

Chairman Buttrey said. We get involved either if requested by a

Court to address preemption issues or if somebody files a request

for a declaratory order at the Board. Then we look at whether this

is actually rail transportation by a rail carrier. But even if it constitutes rail transportation by a rail carrier and qualifies for preemption, the Board and the Courts have made it clear that Federal

environmental laws continue to apply and that some State and

local regulation also continue to apply as part of police powers that

the States retain. So there is not total preemption, regardless of

the circumstances.

Mr. CUMMINGS. And are those companies, many of them, I guess

they are saying to the State: You don’t have but so much authority

over me. Is that usually the issue?

Ms. KITAY. That is sometimes the issue. Now, New Jersey, for example, has passed regulations, I believe, that accommodate ICCTA

and do not incorporate zoning and permitting but do retain a lot
19

of other regulation that continues to apply to solid waste facilities

in that State. If there are disputes about what is or is not preemptive, that is where the declaratory order or the availability of going

to Court for relief applies.

Mr. CUMMINGS. Last question: When we have a situation where

like New Jersey, what they have done, is that something that

would be or have you found that is helpful to the New Jersey communities as something that perhaps other States need to be doing?

Ms. KITAY. To pass regulations?

Mr. CUMMINGS. Yes, yes, the ones New Jersey has done.

Ms. KITAY. I am surprised that other States haven’t passed regulations, but nobody has ever come in, and we don’t have any kind

of a record. I don’t know.

Mr. CUMMINGS. I understand. Thank you, Mr. Chairman.

Mr. LATOURETTE. I thank the gentleman.

Mr. LoBiondo?

Mr. LOBIONDO. Thank you. Thank you, Mr. Chairman.

Chairman Buttrey, what if the railroad leases the waste facility,

waste transfer facility from an entity that is not a railroad, would

that arrangement meet the definition of rail carrier and qualify the

facility for preemption?

Mr. BUTTREY. Well, as I said before, each one of these situations

is different in terms of the facts. We would have to look at the facts

of each case to see what was really going on here, and it would certainly depend on the complainant, whoever that complainant would

be to make that case to us.

But the statement that we have made all along here this morning is that if someone believes that they are going to be able to escape an environmental review on facilities like this, I think they

are going to be really surprised.

There have been significant misrepresentations made, it appears

to me, based on what I have heard this morning with some of these

companies about what their rights are and are not. I think when

those representations have been made, if they have been accepted

on face value by local communities, I think they need to go back

and take a look at that and review those because they may be, potentially at least, allowing something to take place that should not

take place.

Mr. LOBIONDO. I thank you. Can I just end with a brief comment, echoing the comments of my colleague from New York, Mrs.

Kelly, about the fear that if one company goes ahead and is denied,

then somebody else just follows up in their tracks. In the case of

in my District, and I think it is probably the same in Mr. Saxton’s

District, these small communities have very limited resources. To

be able to go through a list over and over again of people who are

just going to step up and cost the taxpayers money to fight the

same fight over again is a wrong road to go down.

Chairman Buttrey, I thank you very much.

Mr. LATOURETTE. I thank the gentleman very much. We are attempting to solve our audio difficulties.

Ms. Johnson, do you have any questions?

There being no other questions, I want to thank you very much,

Chairman, for coming and sharing your thoughts with us today. It

is obvious that you get the concern. I have to say the Chair is im-
20

pressed by your stated willingness to work through these cases in

an expeditious manner, and we look forward to hearing from you

again. So you go with our thanks. Thank you very much.

Mr. BUTTREY. Thank you.

Mr. LATOURETTE. I think maybe when we shut off that one

microphone, that was the offending microphone. So maybe we can

skip that for the remainder.

Our next panel we are lucky to have. I would like to call them

up. We have Mr. William S. Haines, Jr., who is the Deputy Director of the Burlington County Board of Chosen Freeholders. He is

going to be accompanied by our colleague, the Honorable Jim

Saxton this morning. Also I think we have referenced already Ms.

Kathy Chasey, who is the Mayor of Mullica Township in New Jersey, and she is not accompanied at the moment but I think will be

introduced by our colleague, Congressman LoBiondo.

First, Congressman Saxton, thank you very much for coming and

thank you for your interest and asking the Subcommittee to have

this hearing. We will yield to you to introduce your constituent and

any other comments you want to make. Thank you for being here.

Mr. SAXTON. Thank you very much, Mr. Chairman and Ranking

Member Barrow. I am here primarily to introduce my great friend,

Burlington County Deputy Director of the Board of Chosen

Freeholders, which incidentally are called different things in different States, but the Board of Chosen Freeholders in Burlington

County, of course, is the legislative group and administrative

group, for that matter, that runs the matters in Burlington County.

Before I actually introduce him, let me just say that I have some

written testimony which I would like to submit for the record.

Mr. LATOURETTE. Without objection.

Mr. SAXTON. Let me just briefly say a couple of things.

It was mentioned a little while ago that New York and New Jersey are here to demonstrate significant interest in this subject, and

there is very good reason for that. As you probably know, New Jersey is the most densely populous State in the Country, and the

area that Mrs. Kelly and her Republican and Democrat colleagues

who represent the greater New York area have is an even more

densely populated region than New Jersey. As a result of that, our

region produces tons and tons and hundreds of thousands of tons

of solid waste a day, and in a very short order, those hundreds of

thousands of tons turn into mountains of solid waste.

Over the years, this has been a huge problem for us contrasted

to the disposal of solid waste in a State like Wyoming where our

good friend, Barbara Cubin, hails from, where her entire state has

a population of something under 500,000, which is 250,000 less

than my District. And so, we have a unique situation in which I

would make the case that a one size fits all preemption policy is

really wrong-headed for the Country.

Because of that, the State of New Jersey—and I am sure the

State of New York as well, particularly the City of New York which

has such problems in this area—the State of New Jersey in the late

1970s passed a law called the Solid Waste Management Act for the

Sate of New Jersey. I say this to frame the situation so that my

friend Bill Haines’ comments and testimony will be put into this

context.
21

In 1977 or 1978, I can’t remember which, I was in the State Legislature, and we passed the Act, and we recognized that not only

did New Jersey have a unique situation but each county had a

unique situation. Some counties were more densely populated than

others. Other counties had good ways of managing solid waste in

place already. So the Solid Waste Management Act passed during

the 1970s gave each county the responsibility and the duty to put

in place a system to take care of their solid waste. In the case of Burlington County, we invested in our county $200

million to put that system in place, and in order to recoup a return

on that investment, we now have to process solid waste. We do it

in many wastes. Some of it is landfilled. Some of it is recycled. The

methane gas from that which is landfilled is used to heat hot

houses, to grow vegetables.

We have a good system. Aside from the fear of the environmental

damage that would come from an unregulated solid waste facility

carried out under the preemption law by the railroads, the citizens

of our county could be put to a great disadvantage if we don’t have

the solid waste to process through our $200 million investment.

This becomes a very real problem for a number of reasons for communities in the northeastern region that we represent.

With that, I would like to turn for more specific discussion of this

situation to my friend, Freeholder Bill Haines, who is the Deputy

Director of the Burlington County Board of Chosen Freeholders.

Bill presides over the county’s Resource Conservation Department

set up under the State Act and has been the key in crafting our

solid waste management plans for more than a decade. He has

been instrumental in creating and implementing the hugely successful Resource Recovery Complex in Burlington County, the $200

million investment. Overseeing the Division of Solid Waste Management has given Freeholder Haines firsthand knowledge of the

Federal preemption problem that we face today in Burlington

County.

Mr. LATOURETTE. Congressman Saxton, I want to thank you very

much not only for your interest but your excellent remarks, and

thank you for bringing Mr. Haines to us. Just before we hear from

Mr. Haines, I am glad you brought up this Freeholder business. I

got a letter from Congressman Frelinghuysen, and he said that

Freeholder Smith wanted me to do something, and I didn’t know

what the hell he was talking about. So I am glad you brought that

to light.

Mr. Haines, thank you very much for being with us, and we look

forward to hearing from you.

Mr. HAINES. Thank you, Mr. Chairman and members of the

Committee for providing me the opportunity for me to provide this

comment this morning. Thank you, Congressman Saxton, for inviting me to here today and for putting the situation in Burlington

County into context.

I appear before you today on behalf of the entire Burlington

County Board of Chosen Freeholders in support of H.R. 4930 sponsored by Congressman Saxton. We are a five-member board which

is charged with the administration of county government, and all

Freeholders are elected at large. Burlington County is geographically the largest county in New Jersey with a population of
22

450,000, and we are renowned for our pine barrens and our other

open spaces, but it is a situation within the population center of

our county that I wish to address.

Over the past several months, an entity known as Hainesport Industrial Railroad, LLC has been seeking to operate a waste transfer facility within an industrial park located in the municipality of

Hainesport Township. It has been a matter of discussion, debate,

and even negotiation between the railroad owner and local officials

as to the operating parameters as well as to the types of waste

which would be trucked into the industrial park, loaded onto railcars and shipped across the county to locations beyond New Jersey.

This proposal has been a source of public outcry, particularly

from residents whose homes border the industrial park. At the

same time, we are advised that local officials in other municipalities through which the railcars pass are girding for a fight and are

intent on protecting the health, safety, and welfare of their residents as well.

However, hanging over all discussion, all debate, and all negotiation is the phrase, Federal preemption. It is the rail owners trump

card where, as the Committee is aware, Federal law presently exempts rail carriers from State or local permitting requirements related to the processing and transporting of solid waste. Hainesport

Industrial Railroad received its verified notice of exemption from

the Federal Surface Transportation Board on May 10th, 2005.

From our position as county officials and from the viewpoint of

elected officials in our local communities, this type of exemption

and the Federal preemption that flows from it flies in the face of

what we have come to regard as home rule. It guts local governments’ abilities to fulfill their obligations to protect the health,

safety, and welfare of their residents. The siting of any type of

waste facility should not be taken lightly. The very nuisance and

health issues related to odors, dust, traffic, and noise invites scrutiny and demand that State regulations, county requirements, and

local ordinances be followed.

Our position is that no aspect of what we know as the regular

solid waste, zoning, and other recognized permitted processes

should be waived. Mr. Chairman, as a result of recent experiences

involving another waste facility, I cannot underscore enough the

importance of these permitting processes.

Presently, the Freeholder Board is engaged in a two-year legal

and administrative battle in concert with the State of New Jersey

to shut down another waste operation in our county. This

composting operation was granted a State permit, yet obnoxious

odors and other environmental complaints have resulted in dozens

of violations and hundreds of thousands of dollars in fines.

Ironically, unlike the Hainesport facility, this other operation is

located in a rural community, but the odor complaints have come

in on a regular basis from residents across the northern part of the

county. The State is methodically following legal procedures for lifting the permit and closing this facility while the residents continue

to suffer.

I only mention this because, again, it underscores the importance

of waste facilities meeting every standard of law that protects the

public, including the right of State and local governments to impose
23

their statutes and ordinances. This example also points out that

even when appropriate permitting processes are followed, facilities

can go bad, and addressing the problems are not simple.

While the actual siting of any commercial operation falls largely

on local government in New Jersey, when it comes to waste facilities, the county is also engaged. Under State law, all proposed

waste facilities and even proposed changes in operation and types

of waste accepted must be reviewed at the county level. This review

culminates in a public hearing before a Solid Waste Advisory Committee.

This advisory board hears testimony from the public and all interested parties, weighs those comments and the evidence provided,

and makes a recommendation to the state as to whether the proposed facility or change of operation should be granted. The advisory committee was originally created under State law with an eye

toward ensuring that counties have jurisdiction over their own

solid waste plans. It was the State’s sanctioning of the very home

rule that we seek to protect today. Because of existing Federal law,

not even this county advisory board is afforded the opportunity to

review the situation in Hainesport.

All of this considered, this brings me back to the proposal of the

Hainesport Industrial Railroad. I would be less than candid if I did

not represent to you that the primary operative for the Hainesport

Industrial Railroad is a respected businessman. He has made representations that his waste facility will comply with State environmental law.

But the bottom line is that late last week, Hainesport Township

officials found themselves in a situation, because of the Federal

preemption, that they were under pressure to make a deal. They

had no hammer, no ordinance, no regulation to match against

Hainesport Industrial Railroad. Facing what it foresaw as a difficult legal battle, Hainesport Township entered into an agreement

with the railroad purportedly limiting its operation to construction

and demolition waste. How well that agreement will stand the test

of time is already an item of public debate, and the specter of the

facility handling regular solid waste, garbage, at some time in the

future, or hazardous or medical waste or other types of waste still

generates grave concern.

I know that Burlington County is not alone, that other jurisdictions have faced similar dilemmas. It is a legitimate problem that

H.R. 4930 addresses, and w are grateful to Congressman Saxton

for introducing the legislation. Thank you very much.

Mr. LATOURETTE. I thank you very much, Mr. Haines.

The floor has just notified us that we have a series of votes, but

I think before we break to vote, I want to introduce, take a minute

to let Congressman LoBiondo introduce Mayor Chasey who is here

from Mullica Township. Mayor, we would like to hear your fiveminute testimony after Congressman LoBiondo introduces you to

us.

Mr. LOBIONDO. Thank you, Mr. Chairman.

I am very pleased that Mayor Chasey has taken the trip to be

with us today. Mullica is a small township experiencing the same

situation that Burlington County did. The mayor has been living

through a horror story on this. Mayor, thank you for being here.
24

Mr. LATOURETTE. Thank you very much, Congressman LoBiondo.

Mayor, if you would turn on the switch on your microphone, we are

anxious to hear from you. Thank you for coming.

Ms. CHASEY. I wish to thank Chairman LaTourette and this Subcommittee for allowing this hearing to examine the extent and

scope of the abuse by companies using the loophole in the Federal

law to operate unregulated waste facilities.

I am here today to share some of the personal experience that

we faced in Mullica Township when we discovered there was a plan

to construct one of these exempt waste sites. We have, running

through our town, 10 miles of east-west railroad track with a LICA

siding but no train stop. The track is owned by New Jersey transit,

a passenger line with a company by the name of JP Rail that

leases the trackage rights through there. This company was planning on building 1,000 feet of track on the property, but because

there is an existing siding at this site, the railroad did not have

to apply to the STB to expand their operation.

Being a member of the Atlantic County Solid Waste Advisory

Committee, I am familiar with the procedure the owner of a solid

waste company must follow in order to start up or expand their operation including the involvement of a DEP, the local towns, and

the County Freeholder Board. In Mullica’s case, the starting point

and added layer of the Pinelands regulation would be an integral

part of the procedure. When we were first made aware of the

transrail transfer station proposal, I felt safe in my knowledge of

the procedures in place.

It was only then did I find out that there exists federally-exempt

solid waste operations whose only criteria that need to be met is

that they are located next to or near a set of railroad tracks, an

operation that is proposing to move hundreds of tons of trash a day

and night that does not have to apply to any entity for anything,

no applications, no public involvement, no limits in regards to the

number of trucks, tonnage, or materials including possibly hazardous waste. These are seven days a week, 356 days a year operations running 24 hours a day without the obligations to the Districts they reside in that the normal and accepted permitting process would afford their neighbors.

As I learned about these sites and the laws that govern them,

I quickly realized that this is not a local issue but a national one.

If it could happen in my town, it can and does occur anywhere.

The proposed site in Mullica is a 30-acre parcel in a residential

zone. It is less than a quarter of a mile from our 800-student K

through eighth grade. There are 500 homes within a half of a mile

of the site with dozens of homes directly surrounding it, that being

the most condensed area of our town. There are also five residential facilities within a half-mile that house approximately 75 handicapped occupants, many of whom walk or wheelchair throughout

the area.

In Mullica’s case, the railroad company was to lease the property

for a dollar per year from the owner. The owner, not so ironically,

is a notorious South Jersey waste hauler. This waste hauler has

managed over the past four and a half years to build up over a million dollars in unpaid penalties and fines assessed by the DEP, the

county health department, and the neighboring town where his
25

trash business was operating. He pled guilty to two counts of illegal dumping in Mullica and has a $184,000 outstanding balance on

a $199,000 fine.

According to DEP documents, he has frequently failed to comply

with the conditions of his solid waste permit. The DEP finally denied his permit upon renewal application, terminated his existing

permit and revoked his authority to operate his solid waste facility

in 2005. This, however, will not take away his ability to run a railrelated solid waste operation. This is the same individual that the

railroad company contracted to run their businesses in Mullica

under two newly formed companies called Elwood Brokerage and

Elwood Transloading, LLC.

Mullica’s journey through the process of fighting our proposed

transrail transfer station was different than any other towns up to

that point. We were very lucky. Because we are 100 percent Pinelands, we have the full weight of the Commission along with the

State’s Attorney General’s Office to deal with the legal strategy.

Federal Judge Simandle’s December 23rd, 2005, decision to keep

the injunction that the Pinelands filed for in position until such a

time the railroad decides to continue the lawsuit to operate or drop

the development of our site has saved us untold misery. Although

we are more fortunate than our non-Pinelands neighbors, our relief

will never be more than temporary as long as the exemption stands

in the law.

Our fortune to date has not come without great emotional drain

on myself, our governing body, and the residents of our town who,

of course, had to bear our portion of the financial impact of this

battle. I was personally named as a witness in the railroads lawsuit concerning intergovernmental plans and my efforts to frustrate

and block their project.

The town is seeking relief in the form of regulation where these

exempted operations are concerned are not NIMBYS. We are not

saying we don’t want you in our town, so go to the next one. There

are laws in place now that prevent that from happening with regulated sites.

With respect to solid waste, we are asking that the laws be distributed fairly and without prejudice, that the solid waste industry

as a whole be required to operate in an environmentally responsible manner. When it comes to a private industry that operates on

a national level, there is only one practical solution. Anyone receiving and transporting solid waste needs to be regulated under the

same set of rules. The number of States and towns that are grappling with this issue are growing daily, and the time to act is now.

Mr. LATOURETTE. Mayor, thank you very much for your testimony.

As I indicated, there is a series of votes on the floor, and so we

will recess to accommodate those votes. There is at least two. We

hope to be back here within 15 or 20 minutes, and at that time,

we will ask the panel questions. Subject to the votes on the floor,

the Committee stands in recess.

[Recess.]

Mr. LATOURETTE. We are going to call the Subcommittee back to

order. I apologize for the length of time we have been gone, but

hopefully we won’t be interrupted again.
26

Again, Mr. Haines and Mayor, I want to thank you for your testimony.

Mr. Haines, I want to start with you. I asked Mr. Saxton, I said,

Hainesport isn’t named for your family, is it?

Mr. HAINES. Well, actually, we have been there forever and never

had ambition enough to move on. So, yes, it is family.

Mr. LATOURETTE. There you go, okay. I know you were in the

room when Chairman Buttrey testified. The way that I understood

his testimony is that there may be some confusion between what

we thought we were doing with Federal preemption when it came

to economic issues, and I thought I understood him to say that the

ICC Termination Act doesn’t preempt State and local environmental rules and regulations.

I would ask you two things. Have you ever heard that before,

and secondly, is that something that your legal counsel agrees with

at this moment in time?

Mr. HAINES. First, no, that isn’t something I had heard before.

Our counsel, our County Solicitor and other legal advice we solicited has advised us that while we may pursue and have pursued

this, in fact, we probably wouldn’t prevail.

Mr. LATOURETTE. Have you pursued it? Have you gone to the

STB on the Hainesport facility?

Mr. HAINES. Yes, we have. Our county solicitor contacted the

STB to express our concerns.

Mr. LATOURETTE. Can you just describe for us—the record is

pretty clear—what type of waste is going to be shipped from the

Hainesport facility?

Mr. HAINES. Right now, and the agreement was just reached

with Hainesport Township at the end of last week, Thursday I believe, and right now they are talking about construction and demolition, C and D waste, which would be the least noxious. I am sure

that the town felt that this was the best that they could do, but

my understanding is the agreement does not guarantee in perpetuity that other types of waste would not be used in that facility. So,

if perhaps, the railroad were flipped to someone else, they could

change the type of waste they could handle including garbage.

Mr. LATOURETTE. Sure. Have there been any studies done to

demonstrate how many trucks it is going to add to the community

in terms of going in and out of the facility? Do you have any traffic

estimates?

Mr. HAINES. No, I haven’t seen any of those figures.

Mr. LATOURETTE. Thank you.

Mayor, I thought I heard you say that the tracks are owned by

the New Jersey Transit in your situation, and they are leased by

New Jersey for a dollar a year?

Ms. CHASEY. No, the railroad is owned by New Jersey Transit.

JP Rail leased the trackage rights from New Jersey Transit from

Atlantic City to Winslow. The property, the 20-acre property involved, is owned by this trash hauler who was leasing the property

to JP Rail for a dollar per year.

Mr. LATOURETTE. So is the rail waste facility going to be operated by the railroad itself, or is it be subcontracted?

Ms. CHASEY. It is being subcontracted, and my understanding is

the STB rules state that it can be run by the railroad or an agent
27

thereof which allows them to hire subcontractors to run the operations.

Mr. LATOURETTE. My question is similar to the one that I just

asked Mr. Haines. I know you were in the room when Chairman

Buttrey testified.

Ms. CHASEY. Yes.

Mr. LATOURETTE. Is that the first time that you have heard that

local environmental regulations still apply, and does your legal

counsel tell you something else?

Ms. CHASEY. Yes, that is the first time I have heard that. I actually have a letter from Chairman Nober when he was there that

said that, indeed, environmental rules can apply as long as they

never interfere with the Interstate Commerce Act.

Mr. LATOURETTE. Right.

Ms. CHASEY. That will always supercede.

Mr. LATOURETTE. Then I think you mentioned in your case that

there was currently an injunction in place?

Ms. CHASEY. Yes.

Mr. LATOURETTE. What is the exact status of the case at this

point?

Ms. CHASEY. Until either the Pinelands pursues the case, which

they will not, or the railroad company pursues the case, the injunction does stay in place.

Mr. LATOURETTE. Thank you very much. I thank both of you.

Ms. CHASEY. Thank you.

Mr. LATOURETTE. Mr. Barrow?

Mr. BARROW. Thank you, Mr. Chairman.

Mr. Saxton, thank you for participating in this and bringing this

issue before us.

I just want to discuss briefly with you Chairman Buttrey’s concerns that we have a good general proposition in the segment of

preemption we have in the statute. We don’t want to be carving out

all kinds of exceptions because, sooner or later, the general proposition won’t be worth very much. You understand, don’t you, that

you have a great big old wall that has been built up. If someone

starts gnawing a little hole in the wall, if a rat starts gnawing a

hole in the wall, and you have a little place where some vermin can

get through, don’t you think it makes good sense to put a cat at

that hole rather than tear the whole wall down and try to build another wall? I think you can get a cat at every hole, don’t you?

Mr. SAXTON. I think that is a great analogy. In this case, nobody

at this table wants to interfere with interstate commerce, but everybody at this table understands what the New Jersey law is and

the expense and effort and sometimes real heartburn that goes

with administering the State law.

From my point of view, and I guess I could say from our point

of view, there are two issues here where we need some cats to

watch. One set of issues has to do with environmental concerns and

health concerns, and the other set of issues has to do with maintaining the facilities which have been very expensive and painful,

politically painful in some cases and personally painful in others,

to put in place.

Mr. BARROW. It seems to me that what we have is a situation

where right now the hole has been gnawed. The argument has
28

been thought up. The argument has been raised. Right now, folks

get to decide whether or not they want to go through the hole, and

they don’t know what they will find on the other side. Maybe they

will find a friendly Court. Maybe they will find a friendly Board.

Maybe they will find a hostile Court that will refer the matter to

a Board that is equally hostile, that drags things out. Then you

have a sham transaction. But you don’t know what is on the other

side of the hole.

It seems to me if you can put something on the other side of hole,

you know you are going to do a little better than what you have

right now. Right now, it is a game that the other side gets to play,

and a war of attrition is something the big guys are naturally going

to do a whole lot better at winning than the little guys, it seems

to me.

Mr. Haines, I want to follow up on a question that Chairman

LaTourette asked you. He asked you whether or not you had taken

your case to the Surface Transportation Board, and you said, yes.

What was the outcome? How did it come out?

Mr. HAINES. They have been certified that they are a rail operation, and they are eligible.

Mr. BARROW. It sounds to me like they ruled against you.

Mr. HAINES. Yes.

[The information received follows:]

But we did not actually file a formal legal action challenging the STB’s findings

on Hainsport Industrial Railroad per se. However, Burlington County was a

joint petitioner, along with the National Solid Wastes Management Association,

that challenged the STB’s federal preemption provided to another facility in

North Jesrsey. We felt a decision against that preemption would have impacted

the Hainsport case as well. However, the North Jersey facility closed permanently prior to the STB’s consideration of the matter, and the STB therefore

found the matter moot and denied our request for a declaratory order.

Mr. BARROW. Are you satisfied with the outcome in that case?

Mr. HAINES. No. We are considering pursuing it in Court at this

time, although it is a little cloudy now whether we want to, considering the fact that Hainesport Township has reached an agreement

the railroad.

Mr. BARROW. That leads me to another question, but Mayor, I

want to ask you a couple follow-up questions. Do you see a pattern

emerging here? Do you see something evolving? What is the pattern you see at work here?

Ms. CHASEY. Oh, the pattern I see is that these things are starting to crop up all over the place, and they are going to continue

to do so.

Mr. BARROW. In your particular case, was there any kind of ongoing working arrangement between the rail operator and the waste

hauler? Did they have anything going on before this?

Ms. CHASEY. Not before this, not before the railroad contracted

for the waste hauler to run the operation.

Mr. BARROW. Now the railroad has a vested interested in the

hauler being able to do what is clearly preempted, what we all

agree should be preempted. But the Courts have decided, whenever

they have reached the question, it ought to be preempted and until

the case we just talked about, are in remarkable unanimity with

the Board it is something not covered. It seems to me you have a

situation now where the railroads, who clearly don’t have a vested
29

interest in the underlying operation, now have an interest in the

deal.

Ms. CHASEY. Yes.

Mr. BARROW. That pays them money.

Ms. CHASEY. Absolutely.

Mr. BARROW. My grandmother taught me a long time ago that

it is very, very difficult to persuade anybody that there is anything

wrong until somebody puts a dollar in their pocket, and that is not

casting aspersions on anybody. That is just the way things are. Is

that a problem as you see it?

Ms. CHASEY. Absolutely. In the Court case, Mr. Fiorello, who was

the attorney for the railroad, said to Judge Simandle: But Judge,

you don’t understand how much money there is to be made here.

That is actually in the court transcript.

Mr. BARROW. That puts me in mind of the story of the lawyer

who was on the other side of a case once. The judge called him up

to the stand and said: Did you try to settle this case? The lawyer

of one side said: We have offered $5,000 to settle this case. The

judge said: Oh, we can’t settle for that. We have to do better than

that.

Well, listen, as a former county commissioner and former city

councilman, I know exactly what you are up against in terms of

dealing with a regulatory agency that claims exclusive right to deal

with the problem, but they have so many other things to do, even

if they give it their best effort, they can’t take care of your case as

quickly as you can and as quickly as you need it to be taken care

of. I also know that your arms are too short to box with railroad

and Federal regulatory agencies that just ain’t jumping as fast as

you need them to jump. So just know, us local government folks,

we need to stick together.

Ms. CHASEY. Yes.

Mr. BARROW. Thank you very much.

Ms. CHASEY. Thank you.

Mr. LATOURETTE. Thank you, Mr. Barrow.

Mr. LoBiondo?

Mr. LOBIONDO. Thank you again, Mr. Chairman.

For the Mayor, a couple questions, could you explain the normal

process a similar facility that would not qualify for the Surface

Transportation Board preemptions would have to follow if they

were to begin construction in Mullica Township? Can you also comment whether that process would involve review by the Pinelands

Commission?

Ms. CHASEY. Absolutely, that would be the first place they have

to go. Nobody begins construction on anything in a Pinelands town

unless they get a certificate of filing from the Pinelands Commission. That is the first entity they need to go to.

Mr. LOBIONDO. If this exemption were not granted, what would

a facility have to go through if they came to you? If they have to

come to you, what would they have to do to build this transfer station?

Ms. CHASEY. Well, besides the Pinelands, if they could get approval from the Pinelands, a regulated entity, they would also have

to be put in the county plan, the Atlantic County plan. It would

have to be not necessarily approved but kind of okayed by the local
30

municipality before it goes to SWAC. And then it goes from

SWAC—

Mr. LOBIONDO. SWAC is the Solid Waste Advisory Committee?

Ms. CHASEY. The Solid Waste Advisory Committee in Atlantic

County. Then it goes to the County Freeholder board, and it has

to be approved by the DEP. It has to be a licensed and approved

waste hauler.

Mr. LOBIONDO. Has this issue generated much interest in the

township?

Ms. CHASEY. Oh, very much interest.

Mr. LOBIONDO. And is it pretty evenly weighed out, or how

would you categorize it?

Ms. CHASEY. Overwhelming against the transfer station. There

might be a few people that are in the business that wouldn’t mind

seeing this happen there, but they have never come out publicly

and said so. They have only said privately.

Mr. LOBIONDO. To date, has the township had to expend any

monies fighting this?

Ms. CHASEY. Yes, last year, we had to do an emergency appropriation because we had not budgeted the money for $50,000. In

Mullica, that means two cents. We only had to spend $50,000 last

year because the State Attorney General’s Office took on the case

because of the Pinelands Commission. Again, we were very lucky

here. We would have spent 10 times that much.

We hired an environmental attorney; we hired an attorney very

familiar with the railroads, here from Washington, a Mr. Edward

Greenberg; and our own solicitor, the time that he put into it.

Mr. LOBIONDO. Do you feel that there is real potential that this

project could move forward if the Court finds that the regulations

that govern development in the Pinelands can be preempted?

Ms. CHASEY. Yes.

Mr. LOBIONDO. Mr. Chairman, if I could, I want to thank the

Mayor and Deputy Director Haines for being here, and again, Mr.

Saxton.

What you talked about a minute ago and what Mr. Barrow

talked about, I think really get to the heart of the problem of what

the intention really was to allow a railroad to enter into an agreement with an agent. I think what we have created here is a loophole that several locomotives can drive through, and I don’t think

that is right. Thank you.

Mr. LATOURETTE. Thank you, Mr. LoBiondo, and I want to thank

you for bringing the Mayor here. I want to thank Congressman

Saxton for bringing Mr. Haines. I also want to thank Congressman

Pallone and Senator Menendez for testifying, and I want to thank

Mrs. Kelly also for bringing this attention.

Just from the Chair’s perspective, I am not opposed to garbage

being hauled on trains. I think, as a matter of fact, places like

Cape Cod haul most of their waste out, and they don’t want the

garbage trucks on the road, and so they take most of their waste

out on trains. But, at least from the Chair’s perspective, when the

ICC Termination Act, railroads that were really railroads would

have an exemption, and railroads that aren’t railroads should still

be subject to State and local laws, especially when it comes to permitting waste facilities.
31

Again, I thought this was a good hearing. I want to thank you

for bringing it to our attention. I want to thank both of you for

traveling here from New Jersey. I now know what a Freeholder is,

and I appreciate that.

This hearing is adjourned, and you go with our thanks.

[Whereupon, at 12:15 p.m., the subcommittee was adjourned.]
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80Æ