A STATE'S RIGHT TO CONTROL HAZARDOUS CHEMICAL WASTE FROM OTHER STATES
Donald J. Stierman, Ph.D. - 1989
Ohio officials have declared that the State may not restrict imports from other States of hazardous chemical wastes for disposal in Ohio because our Federal Constitution protects "interstate commerce".
The reasoning is flawed. A state is within its rights - and, moreover, has a duty - to restrict or heavily tax hazardous chemical wastes entering the state for landfill disposal. The State of Ohio should claim a state's right to protect its land and future. Citizens of Ohio should insist that their elected officials defend Ohio citizens and their industries.
Although it may be difficult to prove legally that hazardous wastes are not open to commerce and therefore not protected by the Constitution, land within a State used for the disposal of hazardous waste is certainly subject to State regulation and taxes. "Waste" is something that is commonly discarded - something of insufficient value to save, reprocess, or otherwise use. Hazardous wastes can not be an object of exchange, sale or use under any circumstances and are clearly not a commodity.
The value of a hazardous waste landfill does not reside in material discarded at that landfill but, rather, in the value of the land on which a landfill is located. The service of accepting custody of hazardous waste for landfill disposal can not be performed without using land. Use of land for disposal of hazardous wastes is unique among commercial or industrial activities in that it destroys the value of the land while yielding no wealth. The consequence is diametrically opposite to American tradition and philosophy. Our private property laws have evolved from the concept of rights based on land improvement and on land values enhanced by development. The singular situation of chemical waste landfills requires an equally unprecedented legal status.
Once a chemical waste landfill site is filled and closed, the property has no use nor exchange value. It can never be used for any residential, agricultural, industrial, recreational or commercial purpose. The landfill becomes a permanent liability, at best property of no value, but more often a threat to public health. Because this land does not cross state lines and because custody of the wastes and land is ultimately abandoned by the operator, a state has the authority and responsibility to regulate use of this land. One California chemical landfill was closed by a county that revoked a zoning variance when offsite ground water contamination was detected. The owner stopped paying taxes on the land, so it was confiscated. However, it proved difficult to sell this public nuisance at a tax sale and California has since paid millions of dollars to mitigate hazards posed to citizens living downstream. In this case, government attorneys have sued the operators and users under the 1980 CERCLA legislation. However, a jury recently found the State of California negligent in regulating this site and therefore required to share in the clean-up costs.
There are two fundamental issues here. First, because the value lies in the land and not in material transported, the commodity is land and not waste. Because land does not cross state lines, Constitutional law involving interstate commerce should not apply and the state has the right to regulate intrastate chemical wastes. Second, if a state fails to act in a reasonable manner to protect its land by appropriate regulatory decisions, it may be difficult to collect damages in a court of law. This second point regarding a state's option to decide whether or not to grant permits and thus share the responsibility implies the right to pass and enforce appropriate legislation. In several California decisions, local government has been held responsible for property damage that would not have occurred had warnings of geologic hazards been heeded.
A hazardous waste landfill remains a perpetual threat and imposes two liabilities on local government. First, once the landfill reaches capacity, it generates no further income and has no basis for assessment of property taxes. It cannot be sold to private developers nor converted to a public facility (although I did overhear a politician comment that one closed landfill "would be a great place for that new prison"). Second, the landfill must be maintained and monitored forever. Unlike urban garbage in sanitary landfills, chemicals in most hazardous waste landfills do not decompose over several decades into relatively harmless materials. Law requires operators to maintain and monitor a chemical waste landfill for 30 years following closure, but it may be difficult to enforce such compliance if an owner, having dispersed or exhausted assets, declares bankruptcy.
States that have not accepted the responsibility of siting disposal sites within their borders operate, under current standards, at an industrial economic advantage. For example, if industry in Pennsylvania can dispose of wastes in Ohio, Ohio incurs the long-term expense. Pennsylvania industry can sell products for which Ohio will pay some of the long-term costs. This does not benefit Ohio in terms of industrial investment or employment. The "Internalization of Costs" principle is the concept that all costs of the product, including the costs of waste disposal, should be paid by the users. It is not fair to require someone who does not use the product or otherwise benefit to pay part of the costs. A state benefits from industry operating in that state because industry generates taxes and provides employment. Granting a permit to operate a landfill incurs liability. A state may deem the risks and long-term costs associated with a hazardous waste landfill acceptable if needed to serve local industry.
Laws exist that recognize change in value resulting from exploitation of resources residing in land. Texas collects tax at the wellhead on oil and gas produced, whether sold intrastate or interstate. As a result, Ohio users of Texan oil and gas pay Texas taxes, allowing that state to avoid income taxes and provide a "competitive" low-tax environment to attract industry. For decades, Federal laws included an "oil depletion allowance" to compensate owners of oil wells for the loss of value in their property as they produced and sold the oil it held. Similar laws have dealt with minerals and timber. These principles should now be applied in the hazardous waste field, where space is being harvested. Because it is the space and not the wastes that have value, it is proper that the loss of land value is fully paid for by those who benefit, by those who destroy the land's value in order to dispose of wastes produced by their actions.
There is one further argument supporting the rights of State government to
regulate hazardous chemical waste disposal. Decisions on how best to regulate hazardous
chemical wastes need to balance largely local concerns - competitiveness of local industry
and protection of local water resources. Federal law should establish minimum
requirements. One requirement should involve each state's responsibility to maintain
within its boundaries procedures sufficient to safely and permanently deal with all wastes
generated within that state. There is currently little incentive for states with no
disposal operations to encourage waste generators to recycle, reprocess or reduce the
amount of wastes shipped out of state. Regulations might be patterned after laws regarding
disposal of low-level radioactive wastes that require states to enter into compacts with
other states for use of a single disposal site or to set up their own sole use disposal
site. While such regulations do not eliminate conflicts between state and local government
regarding waste disposal, they do make government more accountable and force our leaders
to make the tough decisions.
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Testimony presented at a Hearing before the Subcommittee on Transportation and
Hazardous Materials of the Committee on Energy and Commerce,
House of Representatives, One Hundred First Congress, August 9, 1989 (Serial No. 101-89,
pp. 151-153).