Announcement of and Request for Comment on Municipal Solid Waste
Settlement Proposal
[Federal Register: July 11, 1997 (Volume 62, Number 133)]
[Notices]
[Page 37231-37234]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11jy97-93]
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ENVIRONMENTAL PROTECTION AGENCY
[FRL-5856-7]
Announcement of and Request for Comment on Municipal Solid Waste
Settlement Proposal
SUMMARY: EPA is publishing the ``Municipal Solid Waste Settlement
Proposal'' to inform the public about this proposal and to solicit
public comment before developing a final policy. This proposal
describes a methodology for calculating appropriate settlement
contributions for municipal owner/operators (O/Os) and municipal and
other generators/transporters (G/Ts) of municipal sewage sludge and
municipal solid waste (collectively referred to as MSW) at co-disposal
landfills under the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (CERCLA or Superfund), 42 U.S.C. 9601 et seq.
The purpose of this proposal is to provide a fair, consistent, and
efficient settlement methodology for resolving the potential liability
of municipal O/Os and MSW G/Ts at co-disposal Superfund sites.
Specifically, EPA is proposing settlements based upon a unit cost
formula for contributions by MSW G/Ts and a settlement range, based on
historical data, for municipal O/Os of co-disposal sites.
DATES: Comments must be submitted no later than August 25, 1997.
ADDRESSES: Comments should be addressed to Leslie Jones, U.S.
Environmental Protection Agency, Office of Site Remediation
Enforcement, Policy and Guidance Branch (2273A), 401 M Street, S.W.,
Washington, D.C. 20460.
FOR FURTHER INFORMATION CONTACT: Leslie Jones, phone: (202) 564-5144;
fax: (202) 564-0091.
EPA Proposal for Municipality and MSW Liability Relief at CERCLA Co-
Disposal Sites
Background
Currently, there are approximately 250 landfills on the National
Priorities List (NPL) that accepted both municipal solid waste (MSW)
and other wastes, such as industrial wastes, containing hazardous
substances (commonly referred to as ``co-disposal'' landfills). Co-
disposal landfills comprise approximately 23% of the sites on the NPL.
Many of these landfills are or were owned or operated by municipalities
in connection with their obligation to provide necessary sanitation and
trash disposal services to residents and businesses. The number of co-
disposal sites on the NPL, and the problems associated with co-disposal
of MSW and industrial wastes, have prompted EPA to address issues
facing municipal owner/operators (O/Os) and MSW generators/transporters
(G/Ts) at Superfund sites.
For the purposes of this proposal, EPA defines municipal solid
waste as solid waste that is generated primarily by households, but
that may include some contribution of wastes from commercial,
institutional and industrial sources as well. Although the actual
composition of such wastes varies considerably at individual sites,
municipal solid waste is generally composed of large volumes of non-
hazardous substances (e.g., yard waste, food waste, glass, and
aluminum) and may contain small quantities of household hazardous
wastes (e.g., pesticides and solvents), as well as conditionally exempt
small quantity generator wastes (i.e., a listed or characteristic waste
under RCRA that is exempt from permitting because it is accumulated in
quantities of less than 100 kilograms (kg)/month for hazardous waste
and less than 1 kg/month for acute hazardous waste, 40 C.F.R. 261.5).
Sewage sludge is defined as any solid, semi-solid, or liquid
residue removed during the treatment of municipal waste water or
domestic sludge. For purposes of this proposal, municipal solid waste
and municipal sewage sludge are collectively referred to as MSW; all
other wastes and substances are referred to as non-MSW. The term
municipality refers to any political subdivision of a state and may
include a city, county, town, township, local public school district or
other local government entity.
On December 12, 1989, EPA issued the ``Interim Policy on CERCLA
Settlements Involving Municipalities and Municipal Wastes'' (the ``1989
Policy'') to establish a consistent approach to certain issues facing
MSW G/Ts and municipalities. The 1989 Policy assists EPA in determining
whether to exercise its enforcement discretion to pursue MSW G/Ts as
potentially responsible parties (PRPs) under Section 107(a) of CERCLA.
The 1989 Policy provides that EPA generally will not identify an MSW G/
T as a PRP for the disposal of MSW at a site unless there is site-
specific evidence that the MSW contained hazardous substances derived
from a commercial, institutional or industrial process or activity. The
1989 Policy recognizes that, like private parties, municipal O/Os may
be PRPs at Superfund sites. The 1989 Policy identified several
settlement provisions, however, that may be particularly suitable for
settlements with municipal O/Os in light of their status as
governmental entities.
Notwithstanding EPA's 1989 Policy, MSW G/Ts have sometimes been
drawn into CERCLA contribution litigation. PRPs that contributed large
quantities of hazardous substances at co-disposal landfills have
sometimes sought to spread the cost of their CERCLA liability among
large numbers of other parties, including those whose only contribution
was MSW.
Numerous studies have demonstrated that hazardous substances are
typically present in MSW in very low concentrations. The overwhelming
majority of landfills at which MSW alone was disposed do not experience
environmental problems of sufficient magnitude to merit designation as
Superfund Sites. In the Agency's experience, with only the rarest of
exceptions, MSW landfills do not become Superfund Sites unless other
types of wastes containing hazardous substances, such as industrial
wastes, are co-disposed at the facility.
[[Page 37232]]
In addition, the cost of remediating MSW is typically much lower
than the cost of remediating industrial waste. In 1992, EPA performed a
comparative analysis of the cost of remediating a representative MSW
site versus the cost of remediating a representative industrial waste
site. At that time, EPA found that on a per-acre basis, the estimated
cost of remediating MSW was significantly lower than the cost of
remediating industrial waste. Although costs have changed somewhat
since 1992 and EPA continues to learn more about remediating different
kinds of waste sites, the Agency does not believe that there has been a
radical shift in the relative cost of remediating MSW versus industrial
wastes.
Introduction and Application
This proposal will provide revised national guidance on how to
involve MSW G/Ts in the CERCLA settlement process and more detailed
guidelines for Agency settlements with municipal O/Os. This proposal
applies to municipal O/Os and to municipal and private MSW G/Ts. This
proposal encourages settlements by setting forth a fair and efficient
method for calculating an equitable and reasonable settlement
contribution for such parties. Such settlements should encourage
settlements with and reduce transactions costs for all parties at a
site and should reduce third-party litigation. Specifically, this
proposal contains a unit cost formula for contributions by MSW G/Ts and
a presumptive settlement percentage and range, based on historical
data, for municipal O/Os of co-disposal sites. In addition, a final
policy will provide guidelines for evaluating a municipality's ability
to pay.
This proposal builds on the 1989 Policy with respect to generators
and transporters of MSW. The Agency will continue its policy of not
identifying such parties as PRPs at Superfund Sites. As in the 1989
Policy, this proposal does not apply if there is site-specific evidence
that the MSW contained hazardous substances derived from a commercial,
institutional or industrial process or activity. In recognition of the
strong public interest in reducing the burden of contribution
litigation, however, EPA is proposing to supplement the 1989 policy by
offering settlements to any such MSW G/Ts that wish to resolve their
potential Superfund liability and to obtain contribution protection
pursuant to Section 113(f) of CERCLA.
This proposal does not apply to MSW G/Ts who also generated or
transported any non-MSW containing a hazardous substance, except to the
extent that a party can demonstrate that the MSW was completely and
continually segregated from the non-MSW prior to and during disposal at
the site. Such a party would be required to demonstrate to EPA's
satisfaction that segregation occurred. In considering claims of
segregated waste, EPA will consider whether the MSW and non-MSW were
delivered to the site in separate loads and/or separate packaging,
disposed of in separate units of the landfill, handled, packaged and
disposed of separately within the disposing facility, and other
relevant information. Where such segregation of waste is demonstrated,
this proposal applies only to the MSW component of that waste stream;
the party's liability for non-MSW would continue to be addressed under
applicable EPA CERCLA policies (e.g., EPA's de minimis policy).
To address concerns that this proposal may result in the indirect
inclusion in contribution litigation of MSW parties who have
contributed small amounts of MSW, and in an effort to prevent creation
of transaction costs for parties that EPA has tried to protect from
lawsuits through the de micromis policy, EPA intends to amend the
existing de micromis policy to modify the volumetric cut-off for MSW G/
Ts.
This proposal is designed for co-disposal sites on the NPL. Co-
disposal sites contain both MSW and non-MSW. Although this proposal has
its most direct application at co-disposal sites with multiple, viable
non-de minimis G/Ts, EPA may elect to apply all or part of a final
policy to other appropriate sites. Because this proposal is a draft and
is subject to public comment before finalization, EPA will not apply it
until the proposal is issued as a final policy.
EPA does not intend in any circumstances to reopen settlements
already entered into or to reconsider Unilateral Administrative Orders
(UAOs) issued prior to issuance of this policy. At sites for which
prior settlements have been reached but where MSW parties are subject
to third party litigation, EPA will recommend that the principles set
forth in the final policy be followed by the private litigants to reach
a settlement involving the MSW parties. To the extent that such a
settlement is not reached, the U.S. may settle with MSW G/Ts based on
the formulas established in this proposal and place those settlement
funds in a site-specific special account. At sites where no parties
have settled to perform work, where the U.S. is seeking to recover
costs from private parties, and where the private parties have
initiated contribution actions against municipalities and other MSW G/
Ts, the U.S. will seek to apply the most expeditious methods available
to resolve liability for those parties pursued in third-party
litigation, including, in appropriate circumstances, application of
this proposal. In no circumstances does EPA intend to bestow a benefit
on recalcitrant parties.
This proposal is intended for settlement purposes only and,
therefore, the formulas contained in this proposal are relevant only
where settlement occurs. Except as specifically provided below, this
proposal will not supersede any of EPA's existing policies (e.g.,
orphan share, residential homeowner, etc.), and is intended to be used
in concert with those policies. For example, those parties eligible for
orphan share compensation under EPA's orphan share policy will continue
to be eligible for such compensation.
Procedure
EPA believes that this proposal can promote global settlements at
co-disposal sites. In some cases, site circumstances may warrant a
series of settlement negotiations with different parties. Because this
proposal is designed to achieve fair and equitable settlements,
settlements with the U.S. will generally provide contribution
protection for settling parties and require parties settling under this
proposal to waive contribution claims against all other PRPs at the
site. In addition, the U.S. will accept settlements from parties based
on limited ability to pay, where appropriate. Where beneficial to
settling parties, the U.S. will place the proceeds of settlements under
this proposal into a special account to help fund cleanup at the site.
MSW Generator/Transporter Settlements
One purpose of this proposal is to facilitate settlements with MSW
G/Ts who seek settlements with the U.S. This proposal recognizes the
differences between MSW and the types of wastes that typically give
rise to the environmental problems at Superfund Sites. Consistent with
the 1989 Policy, EPA will generally not actively pursue MSW G/Ts absent
site-specific evidence that the MSW contained a hazardous substance
derived from a commercial, institutional or industrial process or
activity. However, in recognition of the fact that the potential for
small amounts of hazardous substances in MSW may result in contribution
claims against MSW G/Ts, EPA intends to use its enforcement discretion
to offer
[[Page 37233]]
settlements based on the process and formulas contained in this
proposal to parties that have not been issued special notice letters
but that wish to enter settlement negotiations with EPA. It will be
incumbent upon such parties to notify EPA of their desire to enter into
settlement negotiations pursuant to this proposal. Absent the
initiation of settlement discussions by an MSW G/T, EPA may not take
steps to pursue settlements with these parties.
Proposed G/T Methodology
EPA's proposed methodology for calculating settlement offers to MSW
G/Ts requires multiplying the known or estimated quantity of MSW
contributed by the G/T by an estimated unit cost of remediating MSW at
a representative MSW-only landfill. This method provides a fair,
reasonable and efficient means of completing settlements with MSW G/Ts
that reflects a reasonable approximation of the cost of remediating
MSW.
The unit cost methodology is based on the costs of closure/post-
closure activities at a ``clean'' MSW landfill (i.e., a RCRA Subtitle D
landfill, not subject to RCRA corrective action or CERCLA response
authorities) and increased slightly if certain site conditions exist.
EPA's estimate of the cost per unit of remediating MSW at a
representative MSW-only landfill is $3.05 per ton.1 That
unit cost is derived from the cost model in EPA's ``Regulatory Impact
Analysis for the Final Criteria for Municipal Solid Waste Landfills,''
(RIA) and then adjusted to reflect 1997 dollars. The Subtitle D
landfill cost model was run to extract only the costs associated with
closure/post-closure activities (thus excluding siting and operational
costs). The closure criteria specified in the Solid Waste Disposal
Facility Criteria (40 CFR. pt. 257-258) include a final cover system
that minimizes erosion and infiltration with an erosion layer underlain
by an infiltration layer. Post-closure requirements consist of cover
maintenance, maintenance and operation of a leachate collection system,
groundwater monitoring, and maintenance and operation of a gas
monitoring system, all to be conducted for 30 years.
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\1\ This cost will be adjusted over time to reflect inflation.
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Of the Subtitle D landfill types addressed in the RIA, EPA selected
the type most representative of the landfills encountered within the
Superfund program: a closed, unlined, 55.53-acre landfill. Regions may
increase the unit cost not to exceed $3.25/ton if the presence of one
or more of the following factors exist:
Shallow aquifer beneath the landfill.
Unusually high annual rainfall in the area.
Cold ambient air temperature in the area.
Affected groundwater beneath the site is classified as
drinking water.
Low-permeability cover material (e.g., clay) is
unavailable onsite.
The presence of one or more of these factors may result in greater
closure/post-closure costs at any MSW-only landfill due to the
additional precautionary and monitoring technology generally utilized
in those instances.
In the instance where a party's contribution is known in cubic
yards rather than tons, the following density conversion scales should
be used to convert the site-specific cubic yard data into tons:
(1) Loose refuse (``curbside'')--100 lbs./cu. yd.;
(2) Refuse in a compactor truck--550 lbs./cu. yd; and
(3) Refuse in a landfill (after degradation and settling)--1200
lbs/cu. yd.2
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\2\ ``Estimates of the Volume of MSW and Selected Components in
Trash Cans and Landfills,'' Franklin Assoc., the Garbage Project
(1990); prepared for the Council for Solid Waste Solutions.
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In the instance where a party's contribution is MSS, Regions should
use a conversion formula of 8.33 pounds/gallon.3
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\3\ ``Final Guidance on Preparing Waste-in Lists and Volumetric
Rankings for Release to Potentially Responsible Parties (PRPs) Under
CERCLA,'' OSWER Directive 9835.16 (Feb. 22, 1991).
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In order to use such density conversions, Regions should first
identify whether the MSW cubic yard ``waste-in'' data represents MSW at
the time of collection from places of generation, or MSW at the time of
transport in or disposal by a compactor truck. Next, Regions should
convert the cubic yards to pounds (tons) by multiplying either 100 (for
curbside MSW) or 550 (for compactor truck MSW) times the number of
cubic yards that a G/T contributed. For cases where site-specific
conversion information is already available, Regions may use those
conversions rather than the presumptive conversion scales provided in
this proposal.
Once the adjusted unit cost is established, the Region will
multiply that cost/ton by an individual G/T's quantity contribution to
produce a total settlement amount for that party. In order to be
eligible for settlements under this proposal, an MSW G/T must provide
all information requested by EPA to estimate the quantity of MSW
contributed by such party. EPA may solicit information from other
parties where appropriate to estimate the quantity of a particular G/
T's contribution of MSW. Where the party has been forthcoming with
requested information, but the information is nonetheless imperfect or
incomplete, EPA will construct an estimate of the party's quantity
incorporating reasonable assumptions.
MSW G/Ts settling pursuant to the final policy will be required to
waive their contribution claims against other parties at the site. In
situations where there is more than one generator or transporter
associated with the same MSW, the settling party will not be required
to waive its contribution claims for that waste against any non-
settling parties associated with the same waste.
Municipal Owner/Operator Settlements
A second purpose of this proposal is to provide a consistent
methodology for constructing proposals for municipalities that are
potentially liable as past or present owners or operators of co-
disposal landfills. Pursuant to this proposal, the U.S. will offer
settlements to municipal O/Os of co-disposal facilities who wish to
settle; those municipal O/Os who do not settle with EPA will remain
subject to site claims by EPA and other parties.
EPA recognizes that some of the co-disposal landfills listed on the
NPL are or were owned or operated by municipalities in connection with
their governmental obligation to provide basic sanitation and trash
disposal services to residents and businesses. In many cases
municipalities opened the landfills initially solely to serve their own
communities. EPA believes that those factors, along with the non-profit
status of municipalities and the unique fiscal planning considerations
that they face, warrant a national settlement policy that provides
municipal O/Os with reasonably consistent and equitable settlements.
Proposed O/O Methodology
EPA proposes 20% of total response costs for a site as a baseline
presumption to be considered as settlement amount for an individual
municipal O/O to resolve its liability at the site. Regions will have
the discretion to deviate from the presumption (not to exceed 35%)
based on a number of site-specific factors. The 20% baseline is an
individual cost share and pertains solely to a municipal O/O's
liability as an O/O. EPA recognizes that, at some sites,
[[Page 37234]]
there may be multiple liable municipal O/Os and the Region may
determine that it is appropriate to settle for less than the
presumption for an individual O/O. A group or coalition of two or more
municipalities with the same nexus to a site, at the same time or
during continuous operations under municipal control, should be
considered a single O/O for purposes of developing a cost share (e.g.,
two cities operated together in joint operations or in cost sharing
agreements). In cases where a municipal O/O is also liable as an MSW G/
T, EPA would offer to resolve such liability for an additional payment
amount developed pursuant to the MSW G/T settlement methodology.
EPA proposes the 20% baseline settlement contribution on the basis
of several considerations. EPA examined the data from past settlements
of CERCLA cost recovery and contribution cases with municipal O/Os at
co-disposal sites where there were also PRPs who were potentially
liable for the disposal of non-MSW, such as industrial waste. In
examining that data, EPA considered that such historical settlements
also typically reflected resolution of the municipality's liability not
only as an owner/operator, but also as a generator or transporter of
MSW. Under the final policy, such liability will be resolved through
payment of an additional amount, calculated pursuant to the MSW G/T
methodology. The 20% baseline does not reflect this separate basis for
liability and the respective additional payment.
The 20% baseline figure also reflects the requirement that
municipal O/Os that settle under the final policy will be required to
waive all contribution rights against other parties as a condition of
settlement. By contrast, in many historical settlements, municipal O/Os
retained their contribution rights and hence were potentially able to
seek recovery of part of the cost of their settlements from other
parties.
In addition, the 20% baseline figure reflects EPA's evaluation of
public interest considerations relating to municipalities. For example,
Section 122(e)(3) of CERCLA authorizes the President to perform
``nonbinding preliminary allocations of responsibility'' for the
purpose of promoting settlements and to include ``public interest
considerations'' in developing such allocations. EPA believes it is in
the public interest to consider collectively: the unique public health
obligation of municipalities to provide waste disposal services to
their citizens; the municipalities' non-profit status; and the unique
fiscal planning considerations for municipalities that require multi-
year planning.
Under this proposal, the Regions may adjust the settlement in a
particular case upward from the presumptive percentage, not to exceed a
35% share, based on consideration of the following factors:
(1) Whether the municipality performed specific activities that
exacerbated environmental contamination or exposure (e.g., the
municipality permitted the installation of drinking wells in known
areas of contamination);
(2) Whether the O/O received operating revenues net of waste system
operating costs during ownership or operation of the site that are
substantially higher than the O/O's presumptive settlement amount
pursuant to this policy; and
(3) Whether an officer or employee of the municipality has been
convicted of performing a criminal activity relating to the specific
site during the time in which the municipality owned or operated the
site.
The Regions may adjust the presumptive percentage down based on
whether the municipality, on its own volition, made specific efforts to
mitigate environmental harm once that harm was evident (e.g., the
municipality installed environmental control systems, such as gas
control and leachate collection systems, where appropriate; whether the
municipality discontinued accepting hazardous waste once groundwater
contamination was discovered; etc.). The Regions may also consider
other equitable factors at the site.
Financial Considerations in Settlement
In all cases under this proposal, the U.S. will consider municipal
claims of limited ability to pay. Municipalities making such claims are
required to provide Regions all necessary documentation relating to the
claim. Recognizing that municipal O/Os may be uniquely situated to
perform in-kind services at a site (e.g., mowing, road maintenance,
structural maintenance), EPA will carefully consider any forms of in-
kind services that a municipal O/O may offer as partial settlement of
its cost share.
Steven A. Herman,
Assistant Administrator, Office of Enforcement and Compliance
Assurance.
[FR Doc. 97-18247 Filed 7-10-97; 8:45 am]
BILLING CODE 6560-50-P
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