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.
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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.
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