United States             Office of Solid Waste
                     Environmental Protection      and Emergency Response        EPA/530-SW-91-083
                     Agency                 (OS-305)                  August 1992

                     Offic* of Solid Waste
v>EPA         Environmental
                     Fact  Sheet
                     EPA Amends Regulations Related
                     To Third-Party Liability Coverage,
                     Closure, and Post Closure Care

                        The Enutronmental Protection Agency (EPA) is amending tts
                     requirements governingfinancial responsibility and assurance
                     far hazardous waste facilities. These amendments will modify
                     the regulations governing the use and Implementation of certain
                     financial instruments used tn demonstrating coverage for possible
                     liability claims, closure and. post-closure care costs.
       Background.

            Hie Resource Conservation and Recovery Act (RCRA) requires owners
       and operators of hazardous waste management facilities to demonstrate
       financial assurance to cover costs of facility closure, post-closure care, and
       third-party liability. EPA is amending several provisions of the financial
       assurance regulations:

            Third Party Liability: On September 1, 1988, EPA issued a final rule
            that expanded the financial instruments available to owners and  .
            operators wishing to demonstrate financial assurance for third-party
            liability and required reporting of third-party liability claims. Following
            challenges to portions of the rule. EPA agreed to propose and finalize
            amendments to the claims reporting requirement and letter of credit
            mechanism. The amendments were proposed on July 1, 1991.

            Closure and Post-Closure Care: The September 1988, rule made the
            non-parent corporate guarantee available to demonstrate financial
            responsibility coverage for third-party liability.  The Agency received
            a rulemaklng petition requesting that the regulations be amended to
            expand availability of the non-parent guarantee to closure and post-
            closure care.  EPA proposed to expand its applicability in the July
            1991 notice.

       Action

            Based on the July 1, 1991, proposal, EPA has signed and promulgated
       this rule.  As described above, it expands the financial assurance instruments
       and revises provisions related to third-party liability coverage.

-------
                                      -2-
       Thls rule Is being promulgated under RCRA and hence is only
 immediately applicable in states that do not have final authorization. In
 authorized states, the requirements will not be applicable until, and
 unless, the state revises its program to adopt equivalent requirements
 under state law.
The following box details these changes.
                Revisions To Third-Party Liability Coverage
            Former Regulations
  •established a reporting mechanism mat
  required owners and operators to report all
  liability claims made by third parties.

  •allowed for the use of a letter of credit, among
  other instruments, by owners and operators to
  demonstrate financial responsibility, for third
  party liability coverage.
           New Regulations
• revise the claims reporting requirement so
that only valid claims need be reported.
• allow the use of the standby trust fund with
letter of credit as an instrument to demonstrate
financial responsibility for third party liability.
               Expansion of Financial Assurance Instruments
            Former Regulations
  • allowed owners and operators to use the "non-
  parent corporate guarantee" for third-party
  liability coverage only. This mechanism allows
  a company other than the parent corporation to
  provide a guarantee if the company has a
  "substantial business relationship" with the
  owner or operator.
           New Regulations
• extend the availability of the non-parent
corporate guarantee to demonstrate financial
assurance for closure and post-closure care
costs.
 For More Information
       For further information, or to order a copy of the Federal Register
 notice, please call the RCRA Hotline Monday through Friday, 8:30 a.m. to
 7:30 p.m. EST.  The Hotline numbers are listed below. The national toll-
 free number is (800) 424-9346, or TDD (800) 553-9346 for the hearing
 impaired. In the Washington, D.C. area, the number is (703) 920-9810 or
 TDD (703) 486-3323.  Please send all written requests to the RCRA
 Information Center (OS-305), US Environmental Protection Agency, 401 M Street
 S.W., Washington, D.C. 20460.

-------