[Federal Register Volume 59, Number 200 (Tuesday, October 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25787]


[[Page Unknown]]

[Federal Register: October 18, 1994]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 258

[FRL-5092-8]

 

Financial Assurance Effective Date for Owners and Operators of 
Municipal Solid Waste Landfill Facilities

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) proposes to amend 
the Federal criteria for Municipal Solid Waste Landfills (MSWLFs) under 
subtitle D of the Resource Conservation and Recovery Act (RCRA) by 
delaying the effective date of subpart G, Financial Assurance, until 
April 9, 1996 for all MSWLFs.

DATES: Comments on this proposed rule must be received on or postmarked 
on or before December 19, 1994.

ADDRESSES: Written comments on this proposal should be addressed to the 
docket clerk at the following address: U.S. Environmental Protection 
Agency, RCRA Docket (5305), 401 M Street SW., Washington, DC 20460. 
Commenters should send one original and two copies and place the docket 
number (F-94-FADP-FFFFF]) in the comments. The docket is open from 9 
a.m. to 4 p.m., Monday through Friday, except for Federal holidays. 
Docket materials may be reviewed by appointment by calling (202) 260-
9327. Copies of docket material may be made at no cost, with a maximum 
of 100 pages of material from any one regulatory docket. Additional 
copies are $0.15 per page.

FOR FURTHER INFORMATION CONTACT: RCRA Hotline at 1-800-424-9346 (in 
Washington, D.C., call (703) 920-9810), or Dale Ruhter at (703) 308-
8192, Office of Solid Waste, U.S. Environmental Protection Agency, 401 
M Street SW, Washington, DC 20460.

SUPPLEMENTARY INFORMATION:

Preamble Outline

I. Authority
II. Background
III. Today's Action
IV. Economic and Regulatory Impacts
    A. Executive Order 12866
    B. Regulatory Flexibility Act
    C. Paperwork Reduction Act

I. Authority

    These amendments to part 258 are proposed under the authority of 
sections 1008, 2002, 4004, and 4010 of the Resource Conservation and 
Recovery Act (RCRA), as amended, 42 U.S.C. 6907(a)(3), 6912(a), 
6944(a), and 6949a(c).
    Please note that EPA has identified a typographical error in its 
recent final rule delaying the effective dater for certain subtitle D 
requirements, issued October 3, 1993 (58 FR 51546). That rule, which 
amended the authority citation to Part 258, incorrectly cited 42 U.S.C. 
6949(c) in the list of authorities for part 258. The correct citation 
is 42 U.S.C. 6949a(c). The Agency intends to issue a separate technical 
correction notice to correct this misprint.

II. Background

    On October 9, 1991, the Agency promulgated revised criteria for 
municipal solid waste landfills (MSWLFs), which established minimum 
Federal standards to assure that MSWLFs are designed and managed in a 
manner that is protective of human health and the environment, 
considering the practical capability of the MSWLFs (see 56 FR 50978). 
The minimum Federal standards include location restrictions, facility 
design and operating criteria, groundwater monitoring, corrective 
action, closure and post-closure care, and financial assurance 
requirements.
    The Agency proposed the MSWLF criteria, including financial 
assurance requirements, on August 30, 1988 (see 53 FR 33314). The 
purpose of the financial assurance requirements is to assure that 
adequate funds will be readily available to cover the costs of closure, 
post-closure care, and corrective action associated with MSWLFs. The 
Agency believes that these financial assurance requirements are an 
important part of the MSWLF criteria for two reasons. First, when an 
owner or operator does not have funds readily available to address the 
environmental needs at a facility, delays in addressing those needs can 
result. Second, if the owner or operator does not have funds to address 
environmental needs at its facilities, those needs would have to be 
addressed under federal or state programs, rather than by the party 
responsible for the facility. Such programs typically have limited 
funds available to address MSWLF environmental needs.
    In the August 30, 1988 proposal, rather than proposing specific 
financial assurance mechanisms, the Agency proposed a financial 
assurance performance standard. The Agency solicited public comment on 
this performance standard approach and, at the same time, requested 
comment on whether the Agency should develop financial test mechanisms 
for use by local governments and corporations.
    Commenters on the proposed rule argued that the proposed 
performance standard lacked sufficient detail to guide States in the 
development and implementation of requirements with any consistency 
among States, and that the Agency should develop specific mechanisms 
that could be used to demonstrate financial assurance. Commenters also 
supported the development of a local government financial test and a 
corporate financial test.
    In response to comment, the Agency promulgated several specific 
financial mechanisms in the October 9, 1991, final rule. Those 
mechanisms include trust funds, surety bonds, letters of credit, 
insurance, and State assumptions of responsibility (section 258.74). In 
addition, to retain States' flexibility in implementing the Subtitle D 
program, the Agency promulgated the financial assurance performance 
standard of section 258.74, which allows approved States to use any 
State-approved mechanism that meets that performance standard.
    Commenters on the August 30, 1988, proposal also supported the 
development of financial tests for local governments and for 
corporations. The financial tests would allow owners and operators to 
demonstrate that they can satisfy the goals of financial assurance on 
their own, and that they do not need to produce a third-party 
instrument to assure that the obligations associated with their 
landfill will be met. Because an owner or operator using a financial 
test would not have to secure a third-party instrument, the cost of 
financial assurance to the regulated community would decrease. The 
Agency agreed with commenters but, at the time the final MSWLF criteria 
were promulgated, the Agency had not completed the analyses necessary 
to propose those financial tests. Thus, in the October 9, 1991, 
preamble, the Agency announced its intention to develop both a local 
government and corporate financial test in advance of the effective 
date of the financial assurance provisions.
    In the final MSWLF criteria rule, the Agency promulgated an 
effective date of October 9, 1993 for most of the provisions of the 
rule. The Agency delayed the effective date of the financial 
responsibility provisions until April 9, 1994, in order to provide 
adequate time to promulgate a financial test for local governments and 
another for corporations before the effective date of the financial 
assurance provisions. The delayed effective date also was intended to 
provide owners and operators sufficient time to determine whether they 
satisfy the applicable financial test criteria for all of the 
obligations associated with their facilities, and obtain a guarantor or 
an alternate instrument, if necessary. The Agency also recognized that 
local governments, in particular, require notice of the requirements in 
order to plan their budgets for the upcoming year.
    The Agency then proceeded to conduct the necessary analysis, and 
develop a local government and corporate financial test for MSWLF 
owners and operators. However, the analysis needed to develop those 
financial tests took longer than anticipated. As a result, for most 
MSWLFs, the Agency extended the effective date of the financial 
assurance provisions to April 9, 1995 (see 58 FR 51536) to allow 
additional time to develop the financial tests.
    The financial tests will allow MSWLF owners and operators to 
demonstrate financial assurance for their closure, post-closure, and 
corrective action obligations. Owners and operators who meet the 
requirements of the financial tests will not be required to obtain a 
third-party financial assurance instrument1 for these obligations. 
A financial test for local governments was proposed on December 27, 
1993 (see 58 FR 68353). At the time of today's proposal the Agency is 
conducting analysis of comments submitted on the proposed local 
government test. The corporate test was proposed on October 12, 1994 
(see 59 FR 51523). The comment period for the corporate test expires on 
December 12, 1994. EPA will not be able to finalize these rules until 
some time after April 9, 1995.
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    \1\For a description of the third-party instruments available to 
MSWLF owners and operators see 56 FR 50978.
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III. Today's Action

    Although the Agency had anticipated that an extension to April 9, 
1995 would provide sufficient time to develop the financial tests, 
further delays have necessitated an additional extension. Therefore, 
this proposed rule would delay the current April 9, 1995 effective date 
for subtitle D financial assurance requirements by one year. EPA is not 
proposing any changes to the substantive requirements of the current 
subtitle D financial assurance provisions. The new effective date for 
the financial assurance requirements would be April, 9 1996.
    The Agency is proposing this extension for several reasons. First, 
the large volume of comments received on the December 27, 1993 proposed 
local government financial test proposal has required significant time 
to review and analyze. Therefore, the test will not be promulgated 
before the April 9, 1995 effective date. The corporate financial test 
was proposed on October 12, 1994 at 59 FR 51523. Promulgation of the 
corporate financial test will require at least one year.
    Second, commenters2 on the local government proposal expressed 
concern that there would not be adequate time between the promulgation 
dates of the financial tests and the April 9, 1995 effective date of 
the subtitle D financial assurance provisions. Commenters were 
concerned that the short period of time between the expected 
promulgation of the financial tests and the effective date would not be 
adequate for local governments to plan and budget for use of the 
financial test. Third, commenters are concerned that states would not 
have adequate time to adopt the financial tests into their state 
programs and, therefore, the financial test would not be available to 
qualified local governments.
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    \2\Please see comments LGFP-00004 and LGFP-00005 on the December 
27, 1993 proposed local government financial test (58 FR 68353) and 
the August 1, 1994 letter from the Virginia Association of Counties 
to Michael Shapiro located in the docket of this rulemaking. As a 
general matter, the Agency notes that approved states/Tribes have 
the flexibility to develop alternative financial mechanisms that 
meet the criteria specified in Sec. 258.74(1) for use by their 
owners and operators. However, the Agency believes that it is 
important to have these financial tests in place before the 
financial responsibility provisions become effective. EPA currently 
estimates that the additional year should enable EPA to finish 
promulgation of these tests and should ensure that owners and 
operators will have the opportunity to evaluate their needs based on 
these financial tests.
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    As a general matter, the Agency notes that approved states/Tribes 
have the flexibility to develop alternative financial mechanisms that 
meet the criteria specified in Sec. 258.74(1) for use by their owners 
and operators. However, the Agency believes that it is important to 
have these financial tests in place before the financial responsibility 
provisions become effective. EPA currently estimates that the 
additional year should enable EPA to finish promulgation of these tests 
and should ensure that owners and operators will have the opportunity 
to evaluate their needs based on these financial tests.

IV. Economic and Regulatory Impacts

A. Executive Order 12866

    Under Executive Order 12866, which was published in the Federal 
Register on October 4, 1993 (see 58 FR 51735), the Agency must 
determine whether a regulatory action is ``significant'' and, 
therefore, subject to OMB review and the requirements of the Executive 
Order. The Order defines ``significant regulatory action'' as one that 
is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or Tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlement, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    This action will not trigger any of the events described above and, 
therefore, the Agency has determined that this is not a significant 
action.

B. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. at the 
time an Agency publishes a proposed or final rule, it generally must 
prepare a Regulatory Flexibility Analysis that describes the impact of 
the rule on small entities, unless the Administrator certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. As a result of this action, small entities 
will not be required to meet the cost of compliance with subtitle D 
financial assurance for an additional year. Therefore, pursuant to 5 
U.S.C. 605b, we believe that this regulation will not have a 
significant impact on a substantial number of small entities.

C. Paperwork Reduction Act

    The Agency has determined that there are no new reporting, 
notification, or recordkeeping provisions associated with today's 
proposed rule.

List of Subjects in 40 CFR Part 258

    Environmental protection, Reporting and recordkeeping requirements, 
Waste treatment and disposal.

    Dated: October 6, 1994.
Carol M. Browner,
Administrator.

    40 CFR part 258 is proposed to be amended as follows:

PART 258--CRITERIA FOR MUNICIPAL SOLID WASTE LANDFILLS

    1. The authority citation for part 258 continues to read as 
follows:

    Authority: 42 U.S.C. 6907(a)(3), 6912(a), 6944(a), and 6949(c); 
33 U.S.C. 1345(d) and 1345(e).

    2. Section 258.70 is amended by revising paragraph (b) to read as 
follows:


Sec. 258.70  Applicability and effective date.

* * * * *
    (b) The requirements of this section are effective April 9, 1996.

    3. Section 258.74 is amended by revising paragraph (a)(5) to read 
as follows:


Sec. 258.74  Allowable mechanisms.

* * * * *
    (a) * * *
    (5) The initial payment into the trust fund must be made before the 
initial receipt of waste or before the effective date of the 
requirements of this section (April 9, 1996), whichever is later, in 
the case of closure and post-closure care, or no later than 120 days 
after the corrective action remedy has been selected in accordance with 
the requirements of Sec. 258.58.
* * * * *
    4. Section 258.74 is amended by revising the third sentence of 
paragraph (b)(1); by revising the second sentence of paragraph (c)(1); 
and by revising the second sentence of paragraph (d)(1) to read as 
follows:


Sec. 258.74  Allowable mechanisms.

* * * * *
    (b) * * *
    (1) * * * The Bond must be effective before the initial receipt of 
waste or before the effective date of the requirements of this section 
(April 9, 1996), whichever is later, in the case of closure and post-
closure care, or no later than 120 days after the corrective action 
remedy has been selected in accordance with the requirements of 
Sec. 258.58.* * *
* * * * *
    (c) * * *
    (1) * * * The letter of credit must be effective before the initial 
receipt of waste or before the effective date of the requirements of 
this section (April 9, 1996), whichever is later, in the case of 
closure and post-closure care, or no later than 120 days after the 
corrective action remedy has been selected in accordance with the 
requirements of Sec. 258.58.* * *
* * * * *
    (d) * * *
    (1) * * * The insurance must be effective before the initial 
receipt of waste or before the effective date of the requirements of 
this section (April 9, 1996), whichever is later, in the case of 
closure and post-closure care, or no later than 120 days after the 
corrective action remedy has been selected in accordance with the 
requirements of Sec. 258.58.* * *
* * * * *
[FR Doc. 94-25787 Filed 10-17-94; 8:45 am]
BILLING CODE 6560-50-P