L.L. 1996/042

Enactment date: 6/3/1996

Int. No. 676-A

By the Speaker (Council Member Vallone), Council Members Fisher, Koslowitz, O'Donovan, Michels, Freed, Malave-Dilan, Henry, Dear and Eristoff (by the request of the Mayor and the Public Advocate); also Council Members Leffler, Povman, Abel, Fields, Lasher and Powell IV

A Local Law to amend the administrative code of the city of New York, in relation to commercial waste removal

Be it enacted by the Council as follows:

Section 1. Legislative findings. The council hereby finds that the carting industry has been corruptly influenced by organized crime for more than four decades; that organized crime's corrupting influence over the industry has fostered and sustained a cartel in which carters do not compete for customers and in which customers are compelled to enter into long-term contracts with onerous terms, including "evergreen" clauses; that the anti-competitive effects of this cartel have resulted, with few exceptions, in the maximum rates established by the department of consumer affairs effectively being the only rate available to businesses; that businesses often pay substantially higher amounts than allowed under the maximum rate because carters improperly charge or overcharge for more waste than they actually remove; that organized crime's corrupting influence has resulted in numerous crimes and wrongful acts, including physical violence, threats of violence, and property damage to both customers and competing carting firms; that a situation in which New York city businesses, both large and small, must pay a "mob tax" in order to provide for removal of trade waste is harmful to the growth and prosperity of the local economy.

The council further finds that recent indictments have disclosed the pervasive nature of the problem, the structure of the cartel, and the corruption it furthers through the activities of individual carters and trade associations, and that law enforcement must be coupled with new and expanded regulatory efforts on the city's part. The council further finds that despite the efforts of city agencies to regulate the industry under existing laws and regulations, private carting companies have continued to engage in various illegal and anti-competitive practices. The council further finds that unscrupulous businesses in the industry have taken advantage of the absence of an effective regulatory scheme to engage in fraudulent conduct, such as the creation of a lucrative illegal landfill, and to actively discourage new firms from entering the industry.

The council therefore finds and declares that in order to provide for the more efficient and lawful conduct of businesses in the carting industry and to protect the public interest, it is necessary to establish a New York city trade waste commission that shall be responsible for the licensing and regulation of businesses in the carting industry.

Enactment of this chapter is intended to enhance the city's ability to address organized crime corruption, to protect businesses who utilize private carting services, and to increase competition in the carting industry with the aim of reducing consumer prices.

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[Consolidated provisions are not included in this Appendix A]

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§ 8. The provisions of this local law shall be severable and if any phrase, clause, sentence, paragraph, subdivision or section of this local law, or the applicability thereof to any person or circumstance, shall be held invalid by any court of competent jurisdiction, the remainder of this local law and the application thereof shall not be affected thereby.

§ 9. No action or proceeding, civil or criminal, pending at the time when this local law shall take effect, brought by or against the city or any agency or officer, and no administrative proceeding brought by the department of consumer affairs, shall be affected or abated by the adoption of this local law or by anything herein contained; but all such actions or proceedings may be continued notwithstanding that functions, powers and duties of any agency or officer party thereto may by this local law be assigned or transferred to another agency or officer.

§ 10. Whenever by or pursuant to any provision of this local law functions, powers or duties may be assigned to the New York city trade waste commission which have been heretofore exercised by any other agency or officer, any officers and employees in the classified city civil service who are engaged in the performance of such functions, powers or duties may be transferred to such commission without further examination or qualification, and shall retain their respective civil service classifications and civil service status.

§ 11. Notwithstanding any other provision of this local law: (i) a contract to provide trade waste collection, removal or disposal entered into prior to the effective date of this local law shall terminate on the date provided therein or shall be deemed to terminate no later than two years following such effective date, whichever date is earlier; (ii) a contract entered into on or after the effective date of this local law shall not exceed two years in duration; and (iii) provided, further, that any contract entered into by a trade waste removal business required to be licensed pursuant to section 16-505 of the administrative code of the city of New York as added by section two of this local law, that has not received a license from the New York city trade waste commission as established by section two of this local law, whether entered into prior to or on or subsequent to the effective date of this local law, shall as of thirty days following such effective date be terminable by either party thereto upon thirty days written notice and shall, if entered into on or subsequent to the effective date of this local law, contain prominent notice of such right of termination. Notwithstanding any other provision of this section, a business may apply to the commission to waive the determination clause requirement with respect to identified contracts. Such application shall contain the information prescribed in a form issued by the commission and shall be accompanied by a statement why a waiver would not be inconsistent with the purposes of this act. In determining in its discretion whether a waiver of the termination requirement would be consistent with the purposes of this act, the commission shall consider background information concerning the business and its principals and the full circumstances surrounding the negotiation or administration of such contracts, including but not limited to the form and content thereof. Application of the termination clause requirement set forth herein in regard to a business that submits a waiver application within thirty days following the effective date of this local law, together with such additional information and compliance with requirements as may be specified by the commission, shall be suspended pending the determination by the commission whether to grant such waiver.

§ 12. Notwithstanding any provision of law to the contrary, the New York city trade waste commission established by section 16-502 of the administrative code of the city of New York as added by section two of this local law may enter into an agreement with the department of sanitation pursuant to section 16-523 of such code as added by section two of this local law for such department to conduct trade waste removal in a special trade waste district designated by the commission pursuant to subdivision a of such section, where the department of sanitation has responded to a request for proposals to conduct trade waste removal in a special trade waste district pursuant to such section. In the event that the department responds to such request for proposals, the commissioner of sanitation shall take no part in the process of selection of a licensee or licensees pursuant to such section. The provisions of paragraph (6) of subdivision d of such section shall not apply to an agreement with the department of sanitation to conduct trade waste removal in a special trade waste district.

§ 13. Subchapter 18 of chapter 2 of title 20 of the administrative code of the city of New York is REPEALED, except that the department of consumer affairs shall retain the authority provided in such subchapter in relation to: (i) the issuance of permits for the removal of waste generated in the course of operation of a business by the owner, lessee or person in control of such business establishment until the adoption of rules governing registration therefor promulgated by the commission pursuant to chapter 1 of title 16-A of the administrative code as added by section two of this local law; (ii) the regulation of the removal or disposal of such waste by a business who is a permittee pursuant to such subchapter until the expiration of the permit issued pursuant to such subchapter in accordance with the provisions set forth in section fourteen of this local law; and (iii) enforcement of the provisions of such subchapter and any rules promulgated pursuant thereto regarding the conduct of businesses who possess licenses pursuant to such subchapter that are valid on the effective date of this local law until the expiration of such licenses in accordance with the provisions set forth in section fourteen of this local law; and provided further that the rates for the removal, collection or disposal of trade waste set forth fo rules of the department of consumer affairs promulgated pursuant to such subchapter shall remain in effect until the New York city trade waste commission as established by section 16-502 of the administrative code as added by section two of this local law has fixed new rates or has determined that fixed rates shall not apply. Notwithstanding any provision of this section, such trade waste commission may, at any time subsequent to the effective date of this local law, notify the department of consumer affairs that the commission is prepared to assume responsibility for the functions described in paragraphs (ii) and (iii) of this section and may, at any time thereafter, assume jurisdiction over such functions.

§ 14. This local law shall take effect immediately, subject to the following provisions: (i) with respect to a business other than a trade waste broker required by this local law to register with the commission: any permit for the removal and disposal of waste generated in the course of operation of a business by the owner, lessee or person in control of such business issued pursuant to the provisions of subchapter 18 of chapter 2 of title 20 of the administrative code as repealed by section thirteen of this local law that is valid on the effective date of this local law or that is issued subsequent to such date pursuant to the provisions of such section thirteen shall, unless earlier revoked pursuant to the provisions of such subchapter in accordance with the authority provided in such section thirteen, remain valid and upon payment of the renewal fee or fee therefor be deemed extended as follows: (1) where the permittee has submitted an application for registration, in the form and containing the information required by the commission, until the applicant has been registered by the commission; (2) where the permittee does not submit such application, or submits an application that is not in the form or does not contain the required information, until the date required for the submission of such application in the rules promulgated by the commission pursuant to chapter 1 of title 16-A of the administrative code as added by section two of this local law; and (ii) with respect to trade waste brokers, no enforcement of the registration requirements of this local law shall take place for thirty days following the effective date of rules promulgated pursuant to this local law, provided that, with respect to a trade waste broker who was operating such a business as of the effective date of this local law and whom the commission has required to submit to fingerprinting and disclosure requirements pursuant to section 16-507 of the administrative code as added by section two of this local law, no enforcement shall take place unless or until such broker has failed to submit the fingerprints and the required information, in the form and manner and by the date required by the commission, or the commission has denied the application for registration; and provided further (iii) with respect to a business required by this local law to possess a license issued by the commission: (a) where such business possesses a license issued pursuant to former subchapter 18 of chapter 2 of title 20 of the administrative code as repealed by section thirteen of this local law that is valid on the effective date of this local law such license shall, unless revoked earlier pursuant to the provisions of such subchapter, remain valid and upon payment of the renewal fee therefor be deemed extended as follows: (1) where such business has submitted fingerprints and an application, in the form and containing the information required by the commission, until such application has been denied or a new license has been granted; and (2) where such business does not submit such fingerprints or application, or submits an application that is not in the form or does not contain the required information, until the date required for the submission of such application in rules promulgated by the commission pursuant to chapter 1 of title 16-A of the administrative code as added by section two of this local law. The fee paid for a license or a permit deemed extended pursuant to this section shall be applied to the fee for a new license or registration issued by the commission, or where the commission denies such new license or registration, such fee shall be prorated to the actual time the license or permit has remained valid and any remainder shall be refunded to the applicant; (b) notwithstanding any provisions to the contrary of section 16-511 of the administrative code as added by section two of this local law, the commission may, in its discretion, require such business to enter into a contract with an independent auditor or an independent monitor, in the manner set forth in such section, at the time such business submits and application to the commission or at any time thereafter; (c) upon the application of a business that has not previously been licensed pursuant to such subchapter 18, the commission may, in its discretion, permit the operation of such business pending a license determination, provided that such business has submitted an application in the form and containing the information required by the commission.