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January 1998		Final Report of the
SOLID WASTE FEES AND INCENTIVES
Study Committee
Published by the Iowa General Assembly -- Legislative Service Bureau

AUTHORIZATION AND APPOINTMENT:The Solid Waste Fees and Incentives Study Committee was established by the Legislative Council for the 1997 Interim and provided the following charge: "Conduct a comprehensive review of the goals, regulation, reporting, and status of statewide efforts to reduce and recycle solid waste. Evaluate the effectiveness of the statewide goals for waste stream reduction, incentives and penalties used to encourage planning areas to meet the goals. Review recycling programs, tonnage fees, and the programs funded by tonnage fees."

1. Overview.
The Solid Waste Fees and Incentives Study Committee was established following the 1997 Session of the General Assembly during which queries were made and concerns were raised regarding the status of local solid waste planning areas in reaching the solid waste reduction goals and the planning areas abilities to reach these goals.
Iowa Code Chapter 455D provides waste stream reduction goals for the state for the years 1994 and 2000. The baseline for these reduction goals is the waste stream as it existed on July 1, 1998. The waste steam reduction goals are stated in terms of goals for the local planning areas in the state. The goal for the state is to reduce the amount of materials in the waste stream by 25 percent by July 1, 1994, and by 50 percent by July 1, 2000.
When waste is unloaded at a sanitary landfill, a tipping fee is charged to the waste hauler by the sanitary landfill, which is usually stated in dollars per ton. A tonnage fee is included as part of the tipping fee established by a sanitary landfill. Tonnage fees are fees paid to the Department of Natural Resources by the operator of a sanitary landfill for each ton or equivalent volume of solid waste received and disposed of at the sanitary landfill. The tonnage fees are deposited in the Solid Waste Account of the Groundwater Protection Fund.
Currently, the tonnage fee is $4.25 per ton of solid waste. Of this fee, 95 cents is retained by the local government or landfill with the remainder being remitted to the department. If, at any time, the department determines a planning area has met or exceeded the 25 percent goal, the planning area must reduce the $4.25 tonnage fee by 50 cents. If, at any time, the department determines a planning area has met or exceeded the 50 percent goal, the planning area must reduce the tonnage fee by 50 cents, which is in addition to the 50 cent reduction for attaining the 25 percent goal. Both reductions in the tonnage fee are taken from the portion of the tonnage fees which would have been allocated to fund alternatives to landfills pursuant to Iowa Code section 455E.11, subsection 2, paragraph "a", subparagraph (1).
Information provided by the department indicates that, as of September 23, 1997, 38 of the 50 planning areas had achieved the 25 percent waste stream reduction level and two planning areas had already achieved the 50 percent reduction level. The reduction level for the entire state was 33 percent.
2. Committee Proceedings.
The Solid Waste Fees and Incentives Study Committee met on September 23, 1997, and November 14, 1997, in order to receive testimony and make recommendations.
a. First Meeting. The first meeting of the Solid Waste Fees and Incentives Study Committee was held on September 23, 1997, in the Supreme Court Chamber of the State Capitol Building, Des Moines, Iowa. The testimony received by the Study Committee is summarized as follows:
(1) Recycle Iowa. Ms. Leisha Barcus, Director, Recycle Iowa, discussed the goals and objectives of Recycle Iowa, a cooperative effort between the Iowa Department of Economic Development and the Iowa Department of Natural Resources. Recycle Iowa's goal is to assist in diverting waste from Iowa's landfills and to create positive economic activity in Iowa. Recycle Iowa's targeted customers include the state, its businesses, and local communities.
Program objectives listed by Ms. Barcus included the following:
  • Serving as the state's primary source of recycling information, education, and coordination; and comprehensively setting priorities and achieving objectives.
  • Establishing a uniform data collection process to target and prioritize industry recruitment, waste diversion, and manufacturing capacity improvement efforts.
  • Implementing an integrated information management system for the standardization of data.
  • Providing leadership and infrastructure for the purchase and use of recycled materials.
  • Administering the Iowa Buy Recycled Business Alliance, a program to get recycled materials out to consumers.
  • Providing leadership to the Iowa Waste Exchange.
  • Increasing the number of recycling industries in Iowa.
  • Advancing information and assistance on new manufacturing technologies and processes.
  • Assuring that state and local policies, regulations, and economic incentives encourage market expansion and support state goals.
(2) Department of Natural Resources. Ms. Teresa Hay, Administrator, and Mr. Garth Frable, Program Planner, Waste Management Assistance Division, Department of Natural Resources, provided the Study Committee with information regarding landfill tonnage fees, waste stream reduction goals, usage of landfill tonnage fees, cross-border migration of waste, public education efforts, waste tires, the system of penalties and incentives for achieving the waste stream reduction goals, and how moneys received by the department from tonnage fees are distributed and used.
(3) Iowa Waste Reduction Center. Mr. John Konefes, Director, Iowa Waste Reduction Center, described the center's activities. Mr. Konefes stated the mission of the center is to assist Iowa's small businesses to meet environmental regulations through prevention or reduction. He also stated the center focuses on applied research projects that find solutions for small businesses and conducts workshops to communicate those solutions. Services provided to small businesses are free and confidential.
(4) Solid Waste Operators. Three solid waste operators provided testimony to the Study Committee regarding their local landfill agencies and suggestions for changing the solid waste fees and incentives system.
Mr. Pete Duffy, Director, South Central Iowa Solid Waste Agency, expressed his concern that his agency may be economically moved to cease recycling efforts and, instead, pay the 50 cent penalty fee for failing to reach waste stream reduction goals. He suggested that the fees for failing to meet waste stream reduction goals should be eliminated and the state should implement programs to remove recycling products from the waste stream.
Mr. Randy Hartmann, Solid Waste Program Director, Great River Regional Waste Authority, stated that the landfill industry has been in the process of consolidating, which has made it difficult for small landfills to remain competitive. Mr. Hartmann suggested tonnage fees should be lowered so that they are competitive with those in Illinois and Missouri, and suggested the state should reconsider whether the 50 percent waste stream reduction goal is necessary.
Mr. Thomas Hadden, Executive Director, Metro Waste Authority, told the Study Committee that his agency is losing business due to the loss of flow control and his agency will have difficulty reaching the 50 percent waste stream reduction goal. He stated that his agency may have to begin charging residents a fee to support the recycling programs already in place.
(5) Iowa Recycling Association. Mr. Ron Bingham, Weyerhauser Company and member of the Iowa Recycling Association, identified the Iowa Recycling Association as a nonprofit association interested in promoting recycling activities in Iowa. The association gives members a forum for learning about recycling and waste reduction issues, affecting recycling efforts in the community and workplace, and accessing and sharing resources and information. The goal of the association is to educate members, the public, private business, and legislators on available recycling and on current program expansion needs.
(6) Private Recycling. Mr. John Ockenfels, President, City Carton Company, Inc., described his company as the largest independently owned and operated recycling company in the state, processing and marketing in excess of 160,000 tons per year of paper, tin, steel, glass, plastic, and fuel cubes. Mr. Ockenfels expressed his concern about the specter of government involvement and assistance versus competition with private enterprise services. He also expressed concern over landfill agencies that cover their costs of meeting the state's goals by competing directly with private companies to purchase and resell processed recyclable commodities. He encouraged the Study Committee to consider finding ways to fund and promote programs that enhance market development as a method for diverting recyclable material from landfills.
(7) Oil Filter Recycling. Mr. R. J. Baker, Executive Director, Cherokee Area Economic Development Corporation, Inc., appeared on behalf of oil recycling interests located in the Cherokee, Iowa, area. He provided the Study Committee with information relating to a motor vehicle oil filter recycling demonstration project conducted by the University of Northern Iowa which found that 6.6 million used motor vehicle oil filters are discarded annually in this state, leaching as much as 400,000 gallons of used oil into landfills. The study recommended that oil filters be banned from landfills and recycled. It also recommended documentation guaranteeing to consumers and vendors that the filters have been recycled. The interests Mr. Baker represents are investigating the purchase of a new continuous flow oven that bakes oil filters, removing 100 percent of the oil.
(8) Incontinence Products. Ms. Pam Berg and Ms. Karla Christensen, Mulberry Creek's Brief Encounters Service, described their business, which specializes in the rental of incontinent products to nursing homes, institutions and homebound individuals, and provides assessment, support, and training services to its customers.
b. Second Meeting. The second meeting of the Solid Waste Fees and Incentives Study Committee was held on November 14, 1997, in the Supreme Court Chamber of the State Capitol Building, Des Moines, Iowa. The testimony received by the Study Committee is summarized as follows:
(1) Solid Waste Operator. Mr. David Honkomp, Manager, Northwest Iowa Solid Waste Agency, noted that fees currently supporting activities by the Department of Natural Resources are needed by the local solid waste agencies to fund mandated programs. He questioned the cost-effectiveness of current solid waste disposal regulations; the need for department loans since local banks issue loans; the 25 percent waste stream reduction recycling goal; duplication in department programs; and whether the department is using its funding appropriately. Mr. Honkomp suggested the waste abatement table should be based on programs in effect in a planning area, not on a percentage of reduction; a 10-year site permit should be issued, to be amended as needed; comprehensive plans should be filed once or not at all; and that tonnage fees be referred to as taxes.
(2) Unit Based Pricing and Competition. Mr. Don Cell, Professor of Economics, Cornell College, provided the Study Committee with information regarding unit based pricing and competition between public and private sectors. Unit based pricing is an alternative pricing system where residents pay a price per container for the disposal of their trash, giving residents a clear incentive to use recycling to reduce the amount of trash generated.
Professor Cell noted that public and private sector landfills will have to compete in Iowa, and, in his opinion, state policy should not handicap their ability to do so, nor should the state protect the public sector landfills from competition.
Professor Cell recommended the state fund statewide workshops to explain to communities the mechanics of unit based pricing; shift the financing of recycling activities that do not have significant economies of scale from the public landfill to local communities; avoid handicapping transfer stations which may often have to pay a fee to landfills in an adjacent state; phase out the state tonnage fee and shift funding of worthy activities to the State General Fund; and replace landfill diversion goals with incentives based on unit based pricing and landfill fees that reflect but do not exceed full social costs.
(3) Local Viewpoint. Mr. Greg Fritz, Administrator for the City of Pocahontas and a representative on the Pocahontas County Solid Waste Commission, provided written testimony to the Study Committee which expressed concern about how penalties for the failure to reach waste stream reduction goals are assessed. He cited as unfair the practice of requiring all entities in a planning area to share in the payment of penalty tonnage fees when one or more of the entities has met the waste stream reduction goals and would not otherwise be required to pay a tonnage fee penalty.
(4) Motion on Waste Stream Reduction Penalties. Co-chairperson Senator Freeman moved the elimination of the 50 cent penalty for entities that have not reached the 25 percent waste stream reduction goal. The motion failed. Co-chairperson Representative Klemme requested the Department of Natural Resources to review all planning areas that have not reached the 25 percent waste stream reduction recycling goal and reevaluate the baselines of those planning areas.
(5) Waste Management Monitoring Committee. Ms. Kristie Hirschman, Facilitator for the Waste Management Monitoring Committee (WMMC), and Mr. Michael (Mick) Barry, a member of the WMMC, an ad hoc group consisting of participants from state and local government, solid waste planning agencies, and business industry. Mr. Barry provided information on the nine recommendations included in the WMMC's report titled "Protecting Iowa's Environment and Fostering Iowa's Economy." These recommendations included:
  • Enable the planning areas with an approved, updated, subsequent solid waste comprehensive plan to reduce their tonnage fees currently remitted to Landfill Alternatives Financial Assistance (LAFA) Program.
  • Appropriate funding for LAFA by either appropriating $6.75 million from the General Fund for LAFA or dedicate the revenue collected from the existing tax on the "sales, furnishing or service of nonresidential solid waste collection and disposal service" for LAFA.
  • Provide two years' operational support for the Recycle Iowa office and a waste reduction and recycling education coordinator.
  • Expand the tonnage fee to transfer stations. The fee would be applied to waste received by all transfer stations in the state. However, if the waste remains within the state, it would not be taxed at both the transfer station and the landfill.
  • Eliminate fee-exempt status on construction and demolition waste.
  • Require the Environmental Protection Division to determine a permitting fee schedule for the administration of permits to tonnage fee-exempt foundry sand and coal combustion residue disposal sites.
  • Request the Department of Natural Resources to evaluate design standards and criteria for nonmunicipal solid waste landfills.
  • Establish a "green ribbon committee" to address strategic issues of environmental protection, economic competitiveness, and program sustainability as they relate to the management of solid waste.
  • Reiterate support of the 50 percent goal as a permanent ongoing goal to progress toward sustainable environmental protection.
3. Recommendations.
The Study Committee adopted the following recommendations:
4. Materials on File in the Legislative Service Bureau.
a. Ms. Leisha Barcus filed a folder containing the following:
b. Ms. Teresa Hay filed the following:
c. Mr. John L. Konefes filed the following:
d. Mr. Pete Duffy filed the following:
e. Mr. Randy Hartmann filed the following:
f. Mr. Thomas Hadden filed the following:
g. Mr. Ron Bingham filed the following:
h. Mr. John Ockenfels filed a folder containing the following:
i. Mr. R. J. Baker filed the following:
j. Ms. Pam Berg and Ms. Karla Christensen filed a print copy of their testimony.
k. Northwest Iowa Area Solid Waste Agency Manager Mr. David Honkomp submitted a fact sheet.
l. Professor Don Cell of Cornell College, Mount Vernon, Iowa, presented the following:
m. The Written Testimony of Greg Fritz, City Administrator for the City of Pocahontas, Iowa.
n. Ms. Sharon Timmins, Bureau Chief of the Waste Management Assistance Division of DNR, provided the following:
o. Protecting Iowa's Environment and Fostering Iowa's Economy. Report of the Waste Management Monitoring Committee, November 14, 1997.

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