United States
       Environmental Protection
       Agency
Office of Solid Waste   July 1982
and Emergency Response  SW - 942
Washington, DC 20460
       Solid Waste
&EPA  Using Compensation
       and Incentives
       When Siting
       Hazardous Waste
       Management Facilities

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          OTHER EPA HANDBOOKS IN  THIS  SERIES

Using Mediation When Siting Hazardous Waste Management Facilities—A Hand-
book
  Discusses the new approach of using an independent environmental mediator to
  help people resolve their differences. Describes what mediation is, what it can be
  expected to accomplish, how to know when it is needed, and whom to go to for
  assistance

Consulting with the Public When Siting Hazardous Waste Management Facilities—
A Handbook
  Discusses techniques to help developers and State agencies communicate more
  effectively with the public.

Identifying Potential New Sites for Hazardous Waste Management Facilities—A
Handbook
  Discusses criteria and procedures that can be used to narrow the universe o1
  possible facility locations to those with  the  most potential  for withstanding
  intensive environmental review.
  This handbook was prepared by Urban Systems Research and Engineering,
Inc., Cambridge, Massachusetts, under contract number 68-01-5034.
  Publication does  not signify that the contents necessarily reflect the views of
the j U.S. Environmental  Protection  Agency. Identification of specific sites or
facilities does not represent endorsement by either the contractor or the Agency
of those establishments or the technologies employed. Mention  of commercial
products does not constitute endorsement by the U.S. Government. Errors and
omissions are the sole responsibility of the authors.
  Questions concerning this report should be addressed to: Curtis  Haymore, U.S.
EPA,  401  M Street, SW., Office  of Solid Waste (WH-562), Washington, D.C.
20460

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  Using Compensation
  and Incentives
  When Siting
  Hazardous Waste
  Management Facilities
  A Handbook
   This handbook (SW-942) was prepared by
 Robert McMahon, Cindy Ernst, Ray Miyares, and
  Curtis Haymore for the Office of Solid Waste
        US. F, y, Mr-".-""it,-! Fro1;\ ;,':>;i Agency
        Rrg-on V :.;rr,•..••,/
        230 Soutn U.J,,.Jorn Sir-set
        Chicago, Illinois  60604

U. S. ENVIRONMENTAL PROTECTION AGENCY
             1982

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   Acknowledgments
     This handbook is a product of the combined efforts of Urban Systems Research
   and Engineering,  Inc ; EPA's Office of Solid  Waste; State agencies; and private
   individuals concerned about the siting of hazardous waste management facilities.
     Curtis Haymore served as EPA's Project Officer. In addition to his important
   contributions to the text, his guidance and direction were essential in ensuring that
   the handbook would be useful to States and to developers of hazardous waste
   management facilities. At USR&E,  Isabel Reiff and Robert McMahon served as
   Project Directors for the research effort. Susan Farrell, Sharon Appel, and Mary Jo
   Holin were the principal researchers. Robert  McMahon is the principal author of
   the handbook. Cindy Ernst and Ray Miyares made significant contributions, and
   Jim Hudson and Steve Thomas served as internal reviewers at USR&E. Jo
   Bachelder and Ellen Kane typed the numerous drafts of the handbook.
     A number of State hazardous waste agencies and private developers participat-
   ed in  the  research and  review  of  the  handbook. Their contributions  and
   cooperation are appreciated. Michael O'Hare, formerly of the MIT Energy Impacts
   Project, made important contributions in the area of compensation theory and
   techniques,  and his work provided an excellent foundation for the project. The
   significant work of MIT in the field of compensation is reflected in the bibliography.
   Mr. O'Hare's review comments were constructive and are appreciated. Any errors
   are, of course, the sole responsibility of the authors.
U,S.  Environments! Protection Agency
         For sale by the Superintendent of Documents, U.S. Government Printing Office
                              Washington, D.C. 20402

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Contents
Chapter 1. Introduction 	 1
    Why Is Siting Controversial?	 1
    What Can Be Done? 	 3
Chapter 2. Compensation Techniques	 5
    Monetary Payments 	 5
    In-Kind Replacement/Restoration Actions 	 8
    Contingency Funds and Insurance  	 11
    Land Value Guarantees	 14
Chapters. Incentives	 17
Chapter 4. State Roles 	20
    Should States Directly Provide Compensation or Incentives
    for Private HWMFs? 	 20
    What State Financing Methods Could Be Used? 	 22
    Should States Require Private Facility Developers to Provide
    Compensation or Incentives?	  22
Chapter 5. Binding Agreements	27
    Model Agreement Between a Community and a Facility Owner 	 27
    Model Agreement Between a Facility Owner and an Individual 	 32
Appendix A. Mitigation Techniques 	37
    Introduction  	 37
    Facility Design Changes	 37
    Facility Operation Changes	 38
    Selecting Mitigation Alternatives 	 39
Appendix B.  Examples of State Compensation Legislation 	43
    Connecticut (Public Law 80-472) 	 43
    Kentucky (KRS, Chapter 68) 	 43
    Massachusetts (Chapter 21D of the General Laws)	 44
                                 iii

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Appendix C. Bibliography	47
    Compensation Concepts, Strategies, and Implementation
    Considerations	 47
    Compensation Case Studies and Examples 	 51
                                 iv

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Chapter  1
Introduction
  This handbook is one in a series designed to improve the process of siting new
facilities to manage hazardous waste. Participants in this process need to be aware
of all  the technical facts, all the difficult, but necessary,  trade-offs,  and all the
techniques that can be used to address local concerns. This handbook discusses
two of those techniques: compensating people  and communities for costs they
bear because of a facility in their locality, and providing incentives to localities for
hosting a facility to manage hazardous waste. No attempt is made to recommend a
plan for participants  to  follow,  particularly  regarding the complex  process of
negotiating. The handbooks on consulting with the public and on environmental
mediation will discuss some  of those techniques in greater detail. This handbook
provides information on  compensation and  incentives without prejudging  their
usefulness in specific siting situations; it attempts to show how these techniques
can be valuable in overcoming many siting problems. The techniques discussed
assume that the facility already meets all Federal and State requirements.
               WHY  IS SITING CONTROVERSIAL?

  Adverse effects occur when the characteristics of a specific facility interact with
the conditions existing at the site where the facility is located. Thus, a facility with a
capacity of 200,000 gallons per day may stimulate 40 trucks coming and going to
the facility each day.  Site-specific access conditions and land use characteristics
will influence the  severity of this traffic impact  and the  perception of  its
significance.  There  may  be  few  adverse  effects in  a heavily industrialized
community with existing good access to the facility. In a suburban location, on the
other hand, traffic may be a critical issue.
  Obviously,  the effects of a facility to manage hazardous waste are very  site
specific and  depend on  local  concerns. In  general,  however,  the  public is
concerned about environmental quality, health, quality  of life, economic  issues,
and burdens to public services.  Potential effects include those shown in Exhibit 1.
These  impacts may  affect surrounding landowners, the host community, and
neighboring  communities.  Even  when  public concern centers  on identifiable
potential effects  of facilities, the community often views these effects differently
from "experts." The public emphasizes the uncertainty of risks and questions the
ability of Government, industry officials,  or anyone to  ensure long-term safety.

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     Exhibit 1.  Potential Adverse Effects Associated with Hazardous Waste
                                  Facilities
                                     s&tting, and cftgngos in visual
                                                  *
                S^5SIS^S^^*^~  •^^t?*«?.^^^^^       • '       '•
                                                                   *C;^'
              ovttncuuw  '  ., .. f i .  *. ,!„ 1 !>' S*\* .' *t ,  '  ','     .    , ? ,V
  The  construction of hazardous waste management facilities  (HWMFs) also
provides positive benefits to individuals, groups, the community, and society as a
whole.  For example, properly regulated facilities help eliminate "midnight dump-
ing" and provide environmentally sound disposal. These benefits,  however, often
are distributed outside of the host community. Like other controversial facilities,
such as prisons,,,power plants, and airports, HWMFs have widespread societal
benefits and concentrated local costs and impacts.

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                       WHAT CAN  BE  DONE?

  Many of the adverse effects listed in Exhibit 1 can be prevented or reduced; that
is, they can be  mitigated.  Mitigation  represents the  first line  of  defense in
addressing local concerns and will reduce the need to provide compensation and
incentives. Mitigation may involve, for example,  redesigning a facility to provide
extra  protection against ground-water pollution or noise.  For a more  detailed
discussion of mitigation, see Appendix A.
  Compensation and incentives may be used to respond to any remaining adverse
effects by redistributing the costs and benefits that result from a hazardous waste
facility. Compensation and incentives are not required by the Resource Conserva-
tion and Recovery Act (RCRA),  but may make  hazardous waste facilities more
acceptable to the host and neighboring communities.
  Compensation is  a tool for developers and States to repay (not exclusively
monetarily) individuals, local governments,  and groups for facing unavoidable,
intangible, and unpredictable adverse effects It is a means of dealing with impacts
that  remain  unmitigated even   after  strict regulatory  requirements are  met.
Compensation does not generate new costs: it redistributes siting burdens back to
the generators of hazardous waste.
  Incentives  (as  used  in  this  handbook) provide benefits  above the  costs
associated with a hazardous waste facility. If people are fully compensated for the
impacts of a facility,  incentives will make them better off than they were before the
facility siting. It is a technique that may make facilities desirable by demonstrating a
developer's or State's goodwill.
  The distinction between incentives and compensation, however, is not always
possible to make. It is almost impossible, for example, to determine the  precise,
"correct" amount of compensation to apply in a siting situation. The distinction
can be useful in deciding what  response to make in many situations. Exhibit 2,
using  some typical impacts, illustrates the difference between the techniques.
  Compensation and incentive payments are never bribes, secret contracts to act
against  the  public   interest for personal gam  Compensation  and incentive
payments are public agreements to accept a benefit in exchange for  bearing the
burden of a local hazardous waste facility.

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           Exhibit 2.  Sample Response* to Typical  Facility Impacts




j^Slll'lS:^^

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Chapter  2
Compensation   Techniques
  Why compensate? All potential adverse effects of a new facility cannot be
eliminated, even with strict regulatory requirements and additional mitigation. The
remaining  impacts  result  from  technical problems,  such  as the difficulty of
predicting the type  and magnitude of impacts because of a lack of knowledge;
uncertainty, because some occurrences, such as tornadoes  and truck accidents,
occur by chance; and economic reasons, because it may be cheaper to pay for
some consequences than  to analyze, estimate, and avoid them. Compensation
guarantees that no citizen is penalized by those remaining impacts for living in a
community that provides a service for an entire State or region.
  Compensation addresses unavoidable effects, intangible effects, and uncertain
effects. Unavoidable effects may include increased traffic in the vicinity of the
hazardous waste facility or the destruction of valued open space. Intangible effects
are difficult to measure—community image and the quality of  life, for example.
Effects caused by uncertainty, such as risk-related issues, are difficult to  predict
reliably
  The four types of  techniques applicable to compensating for these effects from
siting HWMFs are the following:

•  monetary payments
•  in-kind replacement of affected resources or services
•  contingency funds and insurance
•  land value guarantees and payments

  Each of these four techniques is discussed below.
                     MONETARY PAYMENTS

  Compensation can be in the form of a cash payment to an affected individual,
group, or community. (Monetary payments for land value declines are discussed
later.) These payments are in addition to any applicable Federal requirements.
  Monetary payments to an affected individual or community provide the recipient
with a great deal of flexibility. They allow the recipient to decide how to deal with
the costs suffered  because of  the  HWMF. In  this sense,  they are easier  to
administer than other forms of compensation. While giving the recipient flexibility,
monetary payments are also more susceptible to accusations of "buying off" the
recipient. It is particularly important to have a direct  connection between the
burden of the recipient, the payment,  and the disbursement of the payment  to
offset the burden.

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  Monetary payments are generally best suited to effects that are measurable and
for  which costs can be  defined. For example, if a  community  will  need two
additional local  health agents to monitor the HWMF, these costs are easily
calculated and can be compensated. Negative community image and risk are not
as  easily priced, but are  still  suitable for  specific  monetary payments.  The
Connecticut and Kentucky waste-based tipping fees  (see the case example in
Exhibit 3) illustrate the suitability of monetary payments for dealing with these
intangible effects. These approaches  recognize the  great difficulty  in defining
impacts and costs and, therefore, simply assume that adverse effects are related to
the amount of revenues generated at a HWMF and charge compensation based on
gross receipts The host community then deals with the issue of distributing these
revenues to compensate  its  citizens for both tangible and intangible adverse
consequences.
  Monetary compensation can be either a one-time or a continuing  payment. One-
time payments are in cash (or its equivalent)  and are sometimes made through a
device called "tied impact payments" that are linked to certain identified impacts.
States may "earmark" funds to  communities, for example,  so that they can be
used only for  certain activities like road improvements or recreation. Developers
can also earmark funds through  their agreements with communities. Developers,
for  example,  can even  offer  to  reimburse communities  for consultant  and
administrative expenses necessary to evaluate and  respond to the developers'
proposal. One-time payments are also appropriate when purchasing property at
fair market value. This method contrasts with land value guarantees discussed in
the fourth part of this chapter. Continuing payments may take the following forms:

•   Property Tax Payments. Taxes above those normally required  for property of
    comparable value because of  higher tax rates, higher assessment percentages,
    or accelerated payments
•   Payments  in Lieu of Taxes: For both publicly and privately owned/operated
    facilities, these are negotiated payments  that address the specific costs  of a
    facility.  In  the case  of a private facility, they  may be the sole source of
    payments.  Payments  in lieu  of taxes for  a publicly owned/operated facility
    generally require enabling legislation.
•   Gross Receipts Taxes:  These taxes are  paid to communities in addition to
    normal property taxes and may be paid through a negotiated arrangement or
    set formula (see Connecticut example in Exhibit 3).
                   Exhibit 3. Monetary Compensation Payments
   .•.v-':V.£^^«&^^
   •: •.--"' -liiL', &°~h<*j^&^°^.9jfe*.%i&^

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     Exhibit 3.  Monetary Compensation Payments—Continued
                 !0.^,'p9^acftt^M^.,fM5rattsfc«®'•_._,,.„. .„_.„,,_-,,.  .  .   ,
                 '";;^'''"" ''""''  "" '"'"""'  '''''"'V^'*«^^;:3i^i^fe>;,'v" '

                                         '! cQrr^a^^^f^;:':f"'; i •:
Tipping Fees: These are fees that are levied on the facility and are based on
each  unit of waste (truckload, pound, cubic yard,  gallon) accepted  at the
facility.
Adjustments to State-Local Aid Formulas: Slates have assistance programs to
funnel aid to communities  that can be adjusted and used  as a transfer
mechanism  for monetary payments.  In addition to these specific programs,
many States provide general revenues to localities based on population, local
tax base assessments, and other factors. The presence of a facility may affect
the community's share from these funds.

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  Of all the payment schemes, tipping fees and facility taxes are the easiest to
negotiate, calculate, and collect.  The other approaches are more responsive to
actual  impact costs,  but  often  require  difficult  calculations and  distribution
schemes. Landfills, which  have a limited  lifespan, will, of course, produce less
revenue from tipping fees than incinerators, processing, or transfer facilities unless
the fees are correspondingly greater.
  The costs of continuing payments must  be calculated differently from one-time
payments. Payments in the future are worth less than their face value today and
must be adjusted when comparing the two approaches. This process of finding the
present value of future payments (called  discounting) is illustrated in Exhibit 4.
  Some communities may come to depend on continuing payments as a source of
revenue. In these cases, the community may be more willing to reach  compro-
mises to keep facilities open or to approve expansions.
  Because the  magnitude of effects  may change,  communities  may  want
monetary  payment  schemes  reviewed after  a period of time.  A  conversion
provision can be included  in the  basic agreement requiring a periodic review to
renegotiate the terms  and conditions  of the  monetary payment scheme.  An
example is contained  in the model  binding agreement in Chapter  5. Although
compensation agreements based on continuing payments offer a document that
may be easier to negotiate, additional one-time payments can be negotiated as
needed.
  There are several combinations of providers and recipients  involving the State
and the private developer as potential providers, and communities, individuals, and
groups as recipients  The monetary  payment  transfer mechanism will  vary
depending on the provider and recipient Exhibit 3 illustrates the appropriateness
of particular mechanisms for different combinations of provider and recipient.
  The  above comments indicate the complex trade-offs between the different
types of monetary payments  A combination or mix of monetary  payments is
probably a useful approach to consider in developing compensation schemes. See
Exhibit 5 for an example.
           Exhibit 4.  Present Value of Future Monetary Payments
    interest (find the multiplication factor in the table below):
                    *                  *
    agree t»

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      Exhibit 4.  Present Value of Future Monetary Payment*—Continued
             1 host community to up-
    grade access road  '       /
   V v '•"•• .•  .  ,,  '   '          .'. '  $425,000
                                         $80,008   :  f :••   i "•': f >
                                          4&tooQ  :  ::; '..'»^:
    Tipping foetohosl community
    tipping fee to neighboring commu-
  Praswrt Value (assuming a 20-year planning period and 1O
   ''
                                 m     10%
         5  /••••«;«#   -4.21*   3.9W   3.971
        W...  •" Z?l!£--7.300   &7W   @.14$   8.01$  <4.^,-'«p?>,
        JO  , '  IZJKt  .t1,47fl   ft«8   8.S13   «^f-
        W"r-    *&«8»  -13.^15  -11,lOtt.-  9,427
        to " '.          t$.7m  ta.m•• •  SMS
      IN-KIND REPLACEMENT/RESTORATION  ACTIONS

  Instead of providing a monetary payment to a community or an affected party,
the provider can offset the burdens it imposes by replacing the affected resource
or service. See Exhibit 6 for examples. Again, this compensation is beyond Federal
requirements.  This technique is most  appropriate  for  those  impacts  that  a
developer or the State is able to provide directly. For a private developer, this ability
may  be limited. In general, the HWMF developer will be better able to provide
nonconstruction-related items, such as training and property

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     Exhibit 5.  Example of Joint State/Developer Monetary Payments for a
                              Private HWMF
  The major advantage of in-kind compensation  is that it is visibly linked with
specific  effects, unlike monetary payments  that seem less directly connected.
Second, it is particularly effective in muting bribery or payoff criticisms. Some of
the drawbacks to this technique include the following:

•  In-kind replacement actions are less able to address intangible issues, such as
   quality of life and community stigma problems. The mere presence of a facility
   in a community may raise the community image problem. A developer can do
   very little to compensate directly for this issue using in-kind replacements.
•  The developer or the State may not be able to provide some of the in-kind
   services and resources shown in the examples; it may be a lot easier to simply
   pay the host community money
•  The host community may not want the provider involved in replacing resources
   or services. Communities may wish to handle these functions themselves.
•  Similarly, an affected resident may also prefer to receive straight  monetary
   payments rather than some comparably valued resource.
•  Some in-kind services and resources lend themselves to one-time compensa-
   tion,  but other service impacts of the HWMF may be recurring and require long-
   term continuing cost commitments.
                                  10

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             Exhibit 6.  In-Kind Replacement/Restoration Actions
                               OVA) us^ this techn(fM in
                                to ^^sr
                                M«M»!lWlir toft* **»'

     Devetoper or   Repaving or
     State
                  specialized
                  firemen and police
                  Raptecingar
                  fjMOg property,
           CONTINGENCY FUNDS  AND INSURANCE

  Contingency funds and insurance  are  promises to pay for adverse conse-
quences that cannot be reliably predicted and are unlikely to occur. As discussed
previously,  even with strict  regulation,  some  risk  will  always remain. The
contingency funds and insurance discussed in this section would be in addition to
any that might be required by law and would provide communities with additional
assurance that should an accident or  default occur, adequate money will be
available  to compensate for  adverse impacts. Contingency arrangements for
property value losses are discussed in the next section because of their special
importance in  HWMF siting.
                                   11

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  Contingency  funds  can guarantee operator performance or  protect against
unexpected events Performance requirements could include operating, maintain-
ing, and closing a facility using standards that exceed legal requirements. The cost
of meeting these requirements can be often calculated in advance. Unexpected
events, such as accidents, fires, and spills, on the other hand, cannot be predicted,
but their occurrence might pose significant environmental or public health issues.
This section focuses on financial arrangements for unexpected events; alternative
contingency and performance mechanisms are briefly described because they are
sometimes used interchangeably  Some of the mechanisms are:

•  Letter of Credit. This is an irrevocable engagement by a bank, at the request of
   a hazardous waste facility operator, that it will honor demands for payment by a
   regulatory agency   Letters of credit are generally  limited  to performance
   requirements, such as closing a facility

•  Surety Boner. This  mechanism is a  contract by which a surety company is
   answerable for the  default or debts of a facility operator. The surety company
   agrees to  satisfy  these  responsibilities if  the operator does not act  in
   accordance with the terms of the surety bond

•  Hazardous Waste Trust Fund:  This is a versatile financial mechanism that can
   fund the operation or  maintenance of a facility, the cleanup of accidents, or the
   payment of personal damage claims.

•  Emergency Response Fund This technique funds the cleanup of accidents and
   pays damages  related  to unexpected hazardous waste events.

•  Liability Insurance'  This is  a  means for  covering the costs associated  with
   accidental and  unexpected occurrences in the operation of a facility. Rather
   than pay continuing  fees into a trust or emergency fund, operators pay a
   premium to an insurer who guarantees financial responsibility for paying claims
   brought against the insurer

  There  are a  number  of ways of financing contingency funds.  They can  be
supported by States or developers, or both. The funds can be financed by one-
time payments, payments that continue over a period of years, or by supplemental
payments as they are needed Contingency funds and  insurance  can cover a
single facility or many facilities For example, a Slate could appropriate one  lump
sum from its general fund or appropriate an incremental amount annually. A  State
could have bond issues on a one-time only or periodic basis Alternatively, a  State
could tax hazardous  waste generators, transporters, or  facility operators. The
facility owner could also make a lump-sum payment before opening the facility,
pay into a State-operated fund on a waste processed basis, reimburse the fund for
expenditures, or a combination  of the above  The examples  cited in  Exhibit 7
illustrate some of these arrangements.
   Regardless  of  the  financing  approach used for contingency funds,  State-
operated funds offer a distinct advantage over developer-operated funds. Devel-
oper-operated funds  require a mechanism for determining when  the  situation
warrants expenditures from the fund, and what those expenditures should be. This
could be decided by a third  party, such as a court,  the State, or a  mediator.
 Instead, the community and developer could negotiate whenever an event occurs.
                                   12

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               Exhibit 7.  Contingency Funds and Insurance
Case Examples:
  New JtaWK estt&istwd' a spiff compensation fund in W?6 (Chapter
  of *e Xte* * «?M ^wended Chapter 73, Acts of 1$8Q), tt -is ,a
  lapsing revolving fund financed by a per-barrel tax on all hazardous
  waste fadUQS in the State. The fund authorizes the Department of Envi-
  ronmental rtatapw fgBP) to take remedial actions if the discharger
  does not && scion, OEP has wide discretion in responding to events,
  Any dSsgftiifger who tags to comply w* a ,B£P direcVve to latte for
  three fees the eost of removal. Money may be disbursed from the fund
  for a number of purposes, Including waste removal costs and damage
  costs (including loss of income, damage to real or personal property,
  restoration of n$tunit resources, or loss of fax revenue), Tftf l«f$ c«n_,
  also tie used to pay for cleanup of sites that  are abandbneti or pose an
  imminent hazard. Revenues to date are between  $10 and $16 million   •
  per year*~-wftuiiy aH of tt from tax levies. Revenues are expected K>
  increase to 150 wfflten per year in the near future. As the fund has
  beewtm more publicized, more claims are being made by persons affect-
  ed by hazardous waste accidents. There is a  $1.5 million limitation per
  site on the fund.
  Tennessee requires applicants to post a performance bond to ensure
  availability of funds in the event of abandonment, insotvefley, or Qtftef
  inabilities of the applicant to meet site requirements. All forfeited bonds
  are dsp?s^W in a special Hazardous  Waste Trust Fund that the
  can draw on, ftwiete can be used for removal and disposal of
  wastes,  reclamation of sites,  detoxification, and perpetual care of aban-
  doned sttes. Third-party claims cannot be made against the fund.
  Michigan established a Hazardous Waste Service Fund (Act 64, Section
  43) i& afcw Urn Sfa* fo deal with hazardous waste emergeneie&.  The
  Sfato is aytaftsef to spend money upon a tinding of "actual or potan-
  M&^Fmmenta) damage, " Seed money in the form of a $1 million
  appropriation was used to establish  the fund;  Costs are to be recovered
  by litigation against responsible parties. The Department of Natural Re-
  sources fe in, ffffi. pro/Bess of promulgatJng rules to determine methods of
  payment from the fund.
                                        Recipients
                                          Abutting
                  Host Communities      Communities        fndMOuals
                 Bwf jynef for       emergency        Personal
                 perpetual            response fund     insutanca
                 monitoring                            Emergency
                 Emergency                            response fund
                 response fund                         g^ guarantees
                                                       insurance pools
                                                       Hazardous waste
                                                       t&rnpensmjrt
                                                       fund
                                   13

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«"* Insurance— Continued
         , .ic-    ??ntll!9el*;:y,
In this case, however, valuable response time may be lost and the potential for
tension between the community and hazardous waste facility operator increases.
  Experience with contingency funds has been almost exclusively with State-
operated funds. This arrangement has worked well in those States with funds.  It
has avoided the  problem of developer discretion  in using the funds and has
allowed  for remedial response as well as payment of damage claims. The real
problems with State-operated funds have arisen with attempts to obtain developer
reimbursement of the funds.

                    LAND VALUE GUARANTEES
  While empirical  evidence is fragmentary and often conflicting, a noisome facility,
such as a HWMF, is likely to stimulate some degree of property value loss in  a
certain area around the facility, depending on the uses of adjacent land. Such
impacts are also possible, to a lesser extent, along routes heavily traveled by waste
haul vehicles Changes in property values reflect many of the other impacts raised
in this handbook—noise, traffic, risk, and odors. As these impacts are unlikely to
be completely mitigated, some type of guarantee to reimburse for property value
declines is likely to be a common compensation request in new hazardous waste
facility siting The virtues of land value guarantees are (1) that the expected cost to
the facility operator is low, because he believes he is unlikely to cause significant
property value declines, and  (2)  that property owners  are  protected against
potentially large losses. See Exhibit 8 for land value guarantee examples.
  A corollary  impact to property value  effects  suffered by  individuals and
corporations is the tax base loss in a community. Decreased property values mean
lower tax  receipts  and revenues for a  community. This  section discusses
alternatives for compensating property value and tax base losses.
                                   14

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                   Exhibit 8.  Land Value Guarantees
  £to'f^ «6era(fens for moW^ the capital of Alaska from Juneau,
 .{qpHptttt '*''   '   '*'""""  "	      'v  	" "~"
 $«K*J*? <
                            mti boum
                           «s»«e«s it ptoptety vatet
                               art
                           w
                           5
                    value,  then
                     :»e ^qp^^ tt 1$
                      &e sxemiseti, FeppwtK ******
   ftoittf       .    , Gosmfrtte    .
              J3fcu£? -iilM*' n*"^c<*w# i>a&&Aa /%£ fft<9     l%*t/ f$ffmtm&fif>& 'jff* \&%l£&s Iktus^.'
              f'fff ~frrC7 ^7fE»3«W*i i)F5«*Pi?' W* If q!r     tiGiy tJffll&if^tX.&A? «•( VpCn#EK an9p^-
              fwfufe (axes on the lost value
                               on the lost    Guarantee current value (or'
              value, adjusted for inflation      index value to inflation) only if
                                             pay the difference between
                                             the sale price and the current
                                             (tor                  '
Ib fi^w». I=^»»T|? $»^» Oi<*»w,   To SrfafeWj ^«** *¥««    .«,

  i^'^f^^ct^x^sw         4   ,lMee^}Ot»ts^sr^^.^^t
  (*»»«* |««#«fafl«rt v^«    boundo^               jr.  >
  and housing price index; conip&fe     Consider adjacent landowners
                                      taw#»wie*s ?W|l^E

           : unaffected by facility        developer
  Negotiate value                      reWbursw
                                   15

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                Exhibit 8.  Land Value Guarantees— Continued

   When to Cerrpertsate                MeOwds to fasum

  There are two means for compensating property value losses of individuals:
purchase of the affected property at fair market value; or some method of cash
compensation reflecting the decreased property value. States are not appropriate
providers of this type of compensation because it may require purchasing property
for the primary purpose of making restitution to  individuals for non-State actions
(unless the State is the developer). Compensation should probably be paid only
once, generally after the facility is in operation but  before a fixed period has
elapsed. The single compensation payment reduces the  administrative load and
avoids double-counting Delaying compensation payments until after the facility is
in operation avoids the payment of short-term property value losses generated by
construction. Finally, a time limit on compensation claims (for example, 5 years)
reduces the administrative load, minimizes problems of calculating land  inflation
over long periods, and decreases uncertainties about costs.
  Only those individuals who owned property before the introduction of the HWMF
should be eligible for compensation for property value losses. Once a  facility is
introduced into an area, property values will adjust to reflect the impact of that
facility; thus, individuals who purchase homes in the impacted area after the facility
is introduced will already have been implicitly compensated by the market through
the reduction in the price they pay for that home. In short, if an individual with full
knowledge chooses to  purchase a  home next to  an HWMF,  the State  or a
developer should probably not be obligated to  compensate that individual for
having made that choice unless conditions have changed.
  Accompanying property value losses are tax base losses to a community. If the
impact area surrounding  a  new HWMF  declines in total property value, for
example,  by $80,000,  and the  local tax  rate is $1.50  per  $100 of assessed
valuation (and assuming 100 percent assessments), the locality will lose $1,200 in
tax revenues the first year, and corresponding amounts each following year. When
these amounts are significant, it may be appropriate for the developer to pay the
locality the present value of  the stream  of lost  property taxes, and deduct that
amount from the compensation given to individual property owners. Alternatively,
the developer could choose to make continuing,  as-needed payments rather than
a one-time cash payment.
                                   16

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Chapter  3
Incentives
  Why use incentives? Unlike mitigation or compensation techniques that address
costs or impacts incurred in the siting of a HWMF, incentives need not be directed
at specific impacts  Incentives (as used in  this handbook) are benefits in addition to
compensation, which addresses  specific adverse effects. Incentives may  induce
participants to resolve a siting controversy when compensation alone  might fail.
  There are obviously a fine definitional line and often little operational difference
between compensation  and incentives.  The examples shown  in  Exhibit 9  are
representative of  incentives.  Undoubtedly,  additional variations  on  donation
recipients and on the types of additional public services and amenities could be
provided in a particular community.
  In situations where the developer or State has responsively addressed adverse
effects using  mitigation and compensation, incentives may be appropriate given
the following considerations.

•  The use of incentives  can  demonstrate  commitment to  a community by
   showing that the developer or State is willing to perform beyond the minimum
   requirements Thus, if the loss of open space is an issue, then providing more,
   or better quality,  parkland than  was lost would be an incentive that might
   resolve the dispute
•  Incentives  that are  unrelated to impacts  should be based  on  a  careful
   assessment of needs in the community An offer to donate land for a park may
   have no strategic or goodwill  value if the area  has adequate  recreation
   resources An offer to accept local  industrial  waste for free, however, may be
   done for  little  cost  to  the  developer and  have tremendous  political and
   economic value in a community  where local  industry finds  it difficult  or
   expensive to dispose of its hazardous waste. Similarly, a rural  area with few
   public amenities or services is more apt to positively respond to such incentives
   as donated police equipment, firetrucks, or recreation facilities.
•  The goodwill from using incentives  during the operation of a facility is an
   important factor in keeping a facility in  business.

  The most  important consideration in the use of  incentives is  their potential to
raise suspicions that the facility is worse than it  really is, or that the developer is
somehow acting unethically. There may be a greater likelihood that  incentives will
be accepted if the community or potential recipient suggests them first
  The facility developer  or State has considerable flexibility in using incentives. A
provider must essentially make a judgment on what the siting market requires in
                                    17

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                    Exhibit 9.  Incentive Techniques
           toe,- Used a»«^.*^iM** »t
           waste c^sposal facility in an abandorwa ml^le silo complex in
' the use of its first aid equipment; and the use of its well water to local

' any of these offers since the Grandview site began operations in 1973.
 facility in 1977 in a nearby missile silo complex in Bruheau,  Idaho. It

 and is contemplating alternative uses for the site.  The success in getting
                ,t.t                 ,
  Con's successful use of incentives at its GranoView site. During the
  operation of its Grandview site, Wes-Con
 ,	,„,	  ,f	!,t> *5i>9 tjfO&IM.. fhgJI^-ttifaKMP^tPlifefr fia$
 an estimated value of $5,000 per year. In
  Chemical Waste Management, Inc.,  which operates a disposal facility in
  Livingston, Alabama, donated an artttulance to the community Kansas
  Industrial Environmental Services,  which operates & land disposal facility
                                                       '    **
  Bod's ftome Sewce,  wh/ch operafes a rwardmx watfe landfill in Wright
       "
 (tei^JW   ..  f*tete <«*>os».ft>r   Jd» i& mtst      WHt*a*pfrai>i*
                                           e1**'^         fiema f
                                         '   ';,      .. :)f»cfcw»d..    * to/sat iKiali^sse®*
                Public services
                firetruck,  parks,    ,f
                tww^n '•areas,'.
                road improvements .
                municipal bonds at
 'generally unrelated to' specific impacts.


                                  18

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                  Exhibit 9.  Incentive Techniques—Continued
                                                          'i'°
                   recreation areas,
                   Additional State
                   funding in other
                             of a
terms of the type and amount of incentive. How much should the provider pay in
incentives? It is not possible to answer that question here, but two factors should
be considered:

•  Long-term monetary payments to the community (tied to the amount of waste
   being disposed) that are in addition to compensation may be more expensive
   than one-time incentives such as the donation of public amenities.
•  In-kind services will generally be the least expensive incentives, and may have
   an equal strategic value. These include free disposal services to local industries
   and the sharing of facilities and equipment (for example, firetrucks).

  It is generally inappropriate for the States to  require a private developer to
provide benefits beyond what is required to compensate for actual adverse effects.
Although States have wide latitude in  what they can require of a private developer,
as discussed in Chapter 4, requirements for incentives are not likely to be favorably
received by a developer who has carefully provided a fair compensation package.
Private developers generally oppose  States' requiring incentives from developers.
They  feel  that incentives  are  basically  a concern of the developer  and the
community. The private sector  is not opposed,  however,  to States'  providing
incentives to supplement the private  developers' incentives. As seen in Exhibit 9,
there  are  a number of  potential opportunities for the State  to use incentives in
HWMF siting. If States provide incentives, they should be careful to explain to the
public the legitimate State purpose involved.
                                    19

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Chapter 4
State   Roles
  States face difficult decisions in their attempt to site new facilities to ensure that
adequate capacity is available to treat and dispose of hazardous waste. The role
each State chooses for itself will be tailored to the problems it faces and its ability
to address them. When considering the  usefulness of providing compensation or
incentives to communities and individuals, Slates can provide an atmosphere that
allows and perhaps encourages them, can require them of developers, can directly
provide them, or can assume a passive role. This chapter discusses the two active
State roles and the important issues States should consider in implementing either
approach. Although the approaches are discussed separately, States can use
some combination of approaches to suit their special needs. Appendix B contains
the legislative language from several State laws that provide for compensation and
incentives
  SHOULD STATES DIRECTLY PROVIDE COMPENSATION
           OR INCENTIVES FOR PRIVATE  HWMFs?

  Do States have the legal authority to provide compensation or incentives? The
power to tax and spend in the public interest is a fundamental right possessed by
every State. States are free to determine what goods and services they will provide
and how they will be financed. Indeed, States routinely make payments to citizens
and communities in pursuit of a wide range of public goals. Highway and school
aid, urban rehabilitation, welfare grants, and tax abatements are all forms of Stale
expenditures. In each of these areas there is no legal doubt that such expenditures
are authorized.
  In general, the test of State power to spend is not whether the State will benefit
from the expenditure, but whether the public interest is served. Although the courts
will normally not interfere with a determination that the public purpose is served by
compensation  or  incentive  expenditures, States can  ensure the  validity  of
compensation and incentive expenditures by structuring arrangements so that
payments  are  made after all  State  regulatory approvals are obtained.  This
approach will help to ensure that the public interest is indeed being served by the
State expenditure.
  Do States expose themselves to added liability  by directly providing compensa-
tion or incentives? Providing compensation or incentives to facilitate the siting of a
HWMF will not  normally subject the State to liability for damages even if that
decision  proves to  have  unexpected consequences  for the  community  or
                                  20

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neighboring property owners.  Under the rule of sovereign immunity, the courts
have held that a State is immune from liability for its acts, particularly if the acts
involve  discretion. The  decision to provide compensation or incentives  to  a
community to facilitate  the  siting of  a hazardous waste facility  is the type of
discretionary activity that immunity rules protect. Unless a State expressly binds
itself to  guarantee the safety of a HWMF, it will be immune from suit. This is true
even if the State was negligent in making its decision.
  Several  reasons follow why  States  may want to  provide compensation and
incentives directly.
•  State provision of compensation and incentives may be an effective induce-
   ment to both developers and communities in aiding the siting of facilities that
   benefit the State as a whole.
•  Any  State provision  of  compensation or incentives  may  help to resolve
   differences between communities and the developer and thus help to shorten
   the siting process.
•  State authority to override local vetoes is not a panacea. Even in States with
   these provisions, compensation and incentives may still play an important role
   in resolving siting issues
•  State compensation or incentives  may be the only way in  those States with
   strong home rule laws that States can get facilities sited.
•  State provision of incentives or compensation may lessen  the perception of
   unethical payoffs between the developer and a community.

  Several reasons why States may want to avoid directly providing compensation
and incentives follow:

•  State provision of compensation and  incentives may be viewed by private
   developers  as public interference with  the competitive  structure  of the
   hazardous waste facility industry within a State and among States.
•  Some view direct State involvement as an unnecessary subsidy of the private
   sector. In short, compensation costs are considered to be part of the cost of
   doing business and are, therefore, the responsibility of the private sector.
•  State involvement may set a political precedent for payments for other public
   and private facilities. This  concern has been voiced by a  number  of  State
   hazardous waste officials. If States wish to limit this possibility, special language
   can  be written in the compensation legislation  that argues the extraordinary
   circumstances surrounding hazardous waste facility siting.
•  State compensation or incentive payments may undermine the credibility of the
   State regulatory role in the  siting and operational review of HWMFs. This is an
   important argument and one that is of concern to many State hazardous waste
   agencies. The fact that States would be providing compensation and incentives
   to communities and individuals rather than to developers minimizes, however,
   potential conflict of interest in State roles. There is also precedent for State aid
   to and regulation of a particular party. For example, States subsidize municipal
   wastewater treatment plants and the same State agencies regulate them. States
   provide a number of subsidies, such as economic development loans to private
   industry, and also regulate  their activities.  One  precaution that  States could
   implement to minimize conflict-of-interest charges is to have a State agency
   separate  from the regulating agency  be responsible for the compensation
   activities
                                    21

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   Many States are constitutionally prohibited from making long-term monetary or
   special privilege commitments. Thus, annual payments would have to be
   legislatively enacted each year.
   Although State-provided compensation or incentives will help to relieve some of
   the economic  burden  on private developers, it does  allow generators of
   hazardous waste to escape part of the cost of handling their waste and to place
   it  on  others.  Unless a separate tax is imposed on  waste  facilities,  the
   opportunity to induce generators to produce less waste is lost.
  WHAT STATE  FINANCING METHODS  COULD BE  USED?

  Three sources for financing State-provided compensation or incentives are the
following:

•  State moneys from the general funds
•  fees or taxes on private facility operators or waste generators
•  grants or loans from Federal agencies

  These approaches are summarized in Exhibit 10.
  A number of specific State statutory  constraints,  such  as limits on bonding,
affect the finance decision. States should also consider the equity and hazardous
waste disposal market impacts of their financing decision Sole reliance on State
general funds burdens all of the State residents and may act as a subsidy to out-of-
State hazardous waste generators who dispose in the facility associated with the
compensation. These effects can be eliminated by a State-imposed tax or fee on all
hazardous waste facilities or by having similar programs in adjacent States.
  Because of potential inter-State effects in hazardous waste disposal, States may
want to consider formal inter-State compensation and incentives arrangements, for
example, agreement on the  levels of compensation and incentives and  their
requirements, and joint funding of common compensation funds. These arrange-
ments could be made through separate memoranda of understanding among State
agencies,  through regional commissions,  or through special,  newly developed
hazardous waste commissions. RCRA expressly allows for inter-State agreements
and organizations for hazardous waste management.
       SHOULD  STATES REQUIRE PRIVATE FACILITY
      DEVELOPERS  TO PROVIDE COMPENSATION OR
                            INCENTIVES?

   In general, States have the power  to require  private developers to provide
 compensation. In the absence of a statutory provision expressly  limiting  such
 power, an agency or board, authorized by State  law to issue permits for siting
 HWMFs,  may impose certain conditions on its approval of applications for such
 permits. Among these may be a requirement to compensate the community or
                                  22

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Exhibit 10. Alternative Financing Methods lor State-Provided
                      Compensation
These bonds are   These are
backed by the     suitable for
"full faith and      compensation
ewwr'oftfw   ,   mttwoim
issuer and are     one-time capital
                                                             -
                                               towet interest rates
            revenues from
            48»r
                                   capable of being
                                   J(&tuH**f*4u**«& ,*b4&feift£
                                   pMMIpKfHp^r '«


                                   this mechanism.
                  funds may   These
            4$M» IWJ 9    ,  » «««fi*®  *  l   i»(«W>.4l*«*%
                              compensation
                    such as
                      ancf, "  aa»Jes«*«|ir "«j|^
                          ',  that can be used
                             ''for,
                              from disposers or
                                    to
                              capita} and
                                          ImStSjf,-
                                   pvfibSffiaM&ff $&£  c
                                  , J^^rf^^PK *^^^  ^ ' "c
                                   <^BP^nm^lQ''^Bjjra^ife jKji*
                                  t *«'W^((pWHqp, ^gj^i^TOp ^w*»
                           23

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Exhibit 10.  Alternative Financing Methods for State-Provided
                Compensation—Continued

 **gtfw*     :  .  CWtoKp   . ; ::u^s/ift»n(ist .'..,•>

                        of     ffiase af» pfse.^
             are dsrived        to i
             strictiyfrom    <    farMi^u^-Ut      
-------
individual property owners for losses they will suffer as a result of the facility's
location.
  Indeed,  courts have approved "required dedications" of land  and money to
compensate for the adverse consequence of a development when such dedica-
tions were  made conditions of permit issuance. The only limit that  has  been
placed on such requirements is that the funds or other property demanded must
be intended for a purpose related to the use to which the property will be put, and
must not be so great as to be regarded as unreasonably onerous in light of that
use. Thus,  as long as compensation requirements are limited  to payments that
approximate the likely damages that will be caused by the facility, they are likely to
be legally permitted.
  The  fact that permitting authorities have considerable latitude in formulating
compensation requirements does  not  mean  that their discretion is unfettered,
however. Their powers are  limited  by  principles  of  due process and equal
protection,  as well  as by the provisions of any State administrative procedure act
that applies. A board's actions may thus be overturned, for example,  if compensa-
tion conditions are imposed in some instances and not in others, unless there is a
rational explanation of this difference.
  In the absence of discrimination  or specific  arbitrary and capricious conditions
that violate constitutional or administrative law principles,  a permitting  authority
may feel  free  to  impose  conditions  requiring  payment of  compensation in
proportion to the damages actually expected to be imposed by the facility.
  Both  Connecticut and Kentucky have recently  passed legislation  requiring
private facility developers to provide compensation to communities  on  a formula
basis. Massachusetts, also, has passed legislation requiring developer-provided
compensation, but has left  the  amount to be  negotiated between the developer
and the community. Several  positive features of  States' requiring developers to
provide compensation are-

•   Requirements  for compensation and  incentives will force  hazardous wastn
    generators to "internalize" more of the costs of producing their products and to
    tend to make business decisions that better  serve the public interest.
•   State requirements for developer-provided  compensation or  incentives tend to
    legitimize the  concepts  Specific State requirements in the amount  of the
    payments, such as those mandated in Connecticut and Kentucky, tend to mute
    charges of bribery or illegal payoffs.
•   State requirements  are also likely to standardize the negotiation process and
    therefore  provide some  "ground rules" to help speed  up the siting process.

  In addition to these  supportive arguments,  a number of concerns have been
voiced by States and the private sector about State compensation and incentive
requirements:

•   New facilities  may  be  at a competitive disadvantage  compared to existing
    facilities, perhaps making  new sites financially  unattractive. One solution is to
    establish an incentives and  compensation fund, supported  by both new and
    existing facilities. In either case, increased enforcement may be necessary to
    ensure that illegal dumping does not increase.
•   Specific monetary payment  requirements may make it difficult for facilities to
    obtain private capital financing Specific formula approaches  are,  in effect,
    continuing liens on a facility's revenues.
                                   25

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•  Requirements for specific types or amounts of compensation remove some of
   the flexibility of the developer and recipient  to reach mutually agreeable
   solutions.
•  It is generally  inappropriate for the State to require a developer to provide
   benefits above that required to redress  actual or potential adverse effects.
   Incentive requirements appear to be questionable on legal grounds.

  Given the potential  controversial nature of State compensation requirements,
States should incorporate the views of private developers and the general public in
developing compensation programs.
                                    26

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Chapter 5
Binding  Agreements
  It will often be important to potential recipients that promised compensation or
incentives will be legally required, particularly if the obligations will continue into
the future.  Developers may also need a way to demonstrate their trustworthiness
and commitment. One method is for the developer to formally and legally pledge
his performance in a contract with the recipients. Where possible and appropriate,
the developer will generally prefer a promise of support or a promise to refrain from
opposition  from the recipient in exchange for the developer's pledge. In order to
guarantee  the performance of  both parties, a mechanism to  bind them to their
agreement is desirable.
  In siting HWMFs, two  points will color negotiations over compensation and
incentive agreements:

•  Agreements between local governments and developers to support the siting of
   a facility are, of course, not binding on the residents of communities. Thus, for
   some adverse impacts, the developer will have to develop agreements with
   individual residents or groups. Even agreements with groups may not prevent
   minority factions in the group from using legal means to oppose a facility siting.
•  Local governments cannot contract away their right to control hazardous  waste
   facilities, such as through zoning, occupancy permits, and building  permits.
   Thus, a developer will find it impossible to gain the promise he seeks most—a
   guarantee that he can build and operate his facility. Rather, the agreement is
   more of a mechanism for developers to demonstrate their commitment.

   In the following sections, two model agreements are discussed, one agreement
between a developer and a community, and one between a developer and a
private citizen
  MODEL AGREEMENT BETWEEN A COMMUNITY AND A
                         FACILITY  OWNER

  The annotated model agreement below sets forth section by section a number of
provisions for mitigation, compensation, and incentives to the "City of Zenith" for
potential and certain impacts of a HWMF  to be constructed and operated by
"Babbit Waste Systems, Inc." Therefore, care must be taken that the City of Zenith
gives consideration for all of these promises.
  In a contract  such as the model agreement, the necessary consideration might
conceivably take the form of a promise to accept the facility or not to oppose it.
                                  27

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Note that no such promise appears in this agreement. Even if one did appear, it
might be null  and void because  it exceeded the city's power, because a city
ordinarily may not contract away its  right  and duty to serve the public interest.
  Alternatively, the contract might include a promise to forgo any legal remedies
that may be available against the owner to obtain damages for the adverse impacts
of the facility That promise is also not  made in the model agreement (and indeed is
explicitly rejected in the proviso of paragraph IV.A.),  because few cities would
likely be willing to agree to it.
  Another alternative would be for the agreement to recite all of the harms possibly
to be suffered by the city and to state that the site owner's promises  are to
compensate for those  harms. This approach was not taken for two reasons: (1) in
reality, it would be merely another form of a promise of forbearance such as is
rejected in paragraph  IV.A , and (2) because many of the impacts recited would
not be actionable in  court (for  example, because they would not render the facility
a nuisance), a promise to forgo legal action might be illusory and thus not proper
consideration.
  A fourth alternative  is to tie certain promises to certain harms and thereby to
trade  forbearance from action for those harms only for the compensation agreed
to. This approach is  explicitly taken in  paragraph I.A. However, this is only a partial
solution, and the model agreement emphasizes this fact by reciting a list of harms
in the preamble much  longer than those to be compensated under paragraph I.A.
  The alternative selected, therefore,  is to make the entire agreement contingent
upon  some action by the city,  rather than any promise. That action is the passage
of a resolution supporting the site owner's application, but it could as well be a
resolution approving the site, if  such a resolution were part  of the necessary
regulatory procedure. Thus, paragraph V.A makes the compensation agreement a
unilateral contract that does not  go into effect until one  side—the city—has
completed its obligation under it. If the city does not pass the necessary resolution,
the contract is not effective. If it does, that action is adequate consideration for all
the promises made by  Babbit Waste Systems, Inc.
  Sections I,  II, and  III of the  model agreement contain a  few  examples  of
compensation, mitigation,  and incentives that can be included in the agreement.
Many more examples,  of course, could be devised
                         Model Compensation Agreement
                                   between

    The City of Zenith
    City Hall
    Room W1
    Zenith, Winnemac
                                     and
    Babbit Waste Systems, Inc
    101 Main Street
    Zenith, Winnemac
    WHEREAS Babbit Waste Systems, Inc  plans to build a hazardous waste
    management facility (HWMF) on a site that it owns in the City of Zenith, and
    that is located at	 ; and
                                    28

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WHEREAS the construction and operation of the HWMF will result in increased
traffic in the City of Zenith,  requiring additional expenditures by the City of
Zenith for traffic control and road maintenance; and

WHEREAS the construction and operation of the HWMF may result in odors,
noise, and/or air pollution and thereby cause damage to the residents of
Zenith and to public facilities owned by the City of Zenith; and
WHEREAS the construction and operation of the HWMF may result in adverse
impacts on the beauty and quality of the  environment of Zenith and thereby
lower property values and reduce  the property tax base of the City of Zenith;
and
WHEREAS the construction and operation of the HWMF may result in ground-
and/or  surface-water pollution and thereby cause damage to the public water
supply owned  and operated by the City of Zenith, and

WHEREAS the construction and operation of the HWMF will result in the need
for additional expenditures by the  City of  Zenith for public services, facility
inspections, and ground- and surface-water monitoring, and

WHEREAS the construction and operation of the HWMF may increase the risk
of other damages to residents of Zenith and/or to the City of  Zenith, and

WHEREAS Babbit Waste Systems,  Inc. has agreed to undertake the mitigation
measures specified in this agreement, and

WHEREAS Babbit Waste Systems,  Inc  has agreed to compensate the residents
of Zenith and  the City of  Zenith for such costs as are specified in this
agreement;
The parties  have agreed as follows:
/ Cash Compensation and Fees

   A Babbit Waste Systems, Inc shall pay the following amounts to the City
of Zenith as compensation for the costs that will be imposed on it by the
construction and operation of the HWMF

       (1) Upon approval of the site by the State Facility Siting Board:
$	, as capital for extensions  of local services;
       (2) Upon commencement of operation  of the HWMF
      	as compensation for start-up expenses connected with
extension of local services.

   B Babbit Waste Systems, Inc shall also pay the following amounts  to the
City of Zenith
      (1) During  the two (2) years  commencing on the first date of operation of
the HWMF,  a  fee of one dollar ($1 00) per wet metric ton of waste delivered to
the HWMF;

      (2) Thereafter, a fee as mutually agreed by the parties from  time to time;
provided that,  if the parties  are mutually  unable to agree on  a fee  at any time,
the fee  shall be set at an amount equal  to sixty cents ($.60) per wet metric
ton of waste times the number of whole  years that the HWMF has been in
operation
                                     29

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  Paragraph A of Section I contains conventional tied-impact  payments for  the
capital expenses and start-up costs of servicing the facility. Paragraph B sets up a
tipping fee and allows it to be renegotiated from time to time.


   //. Provision of Services and Other Compensation

     A.  Babbit Waste Systems,  Inc shall provide, without charge, disposal ser-
   vices for up  to	 kilograms per month of  hazardous wastes, as defined by
   the Resource Conservation and  Recovery Act, 42 U S C.  §6903(5), generated
   by any party or parties designated by the City  of Zenith.

      B.  Babbit Waste Systems, Inc. shall purchase the site located at
                     or an equivalent alternative  site mutually agreed upon by
   the parties, and construct thereon a recreational facility to be dedicated to the
   City of Zenith, as further specified in Appendix I to this agreement
  As an incentive, paragraph A of Section II promises free disposal services to the
City or its designee  Paragraph B promises to dedicate a recreational facility to the
City. This promise may be  regarded as  a compensation device, if there will be
some loss of  recreation in the city as a result of the facility; it may otherwise be
regarded  as an incentive. Note that the preamble says nothing about lost public
facilities as an impact  of the facility. Such a reference could, of  course, be
incorporated if it were needed.


   ///. Conditions of Construction and Operation

      A. Prior  to commencement of construction, Babbit Waste Systems,  Inc. shall
   purchase and maintain insurance coverage for liability to  third parties for
   personal injury and property damage in an amount not less than
   $	per occurrence.

      B. Waste shall be transported to the  HWMF only along  the route specified
   in Appendix II to this agreement No wastes shall be received at the HWMF
   except  during the hours of 9.00 a m to 5.00 p m  Mondays through Fridays
   No  more than	truckloads of waste shall be delivered to the
   HWMF per  day
   Paragraph A of Section III provides for liability insurance, in the event of third-
party damage  Paragraph B includes some  mitigation measures  that will  alter
operation of the facility.

   IV Additional Compensation in the  Event of Breach

      A. In  the event that any one or more of the conditions stipulated in  this
   agreement shall not be met, the City of  Zenith shall be entitled to further
   compensation for  the damage caused by breach of the said condition.  The
   compensation shall be determined according to the procedure described in
   paragraphs B,  C,  and D below, provided that  the City of Zenith's right to such
   further compensation shall not derogate from any right to other remedies that
   may be available  to it under law.
                                        30

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      6 In the event that a dispute shall arise over whether any one or more of
    the conditions stipulated in this agreement have been met,  the question shall
    be decided by a committee of three experts, appointed according to paragraph
    C below.  The decision of the said  committee shall be final and binding  on
    those parties

      C. The committee of experts shall  be  appointed as follows

         (1) In the event that Babbit  Waste  Systems, Inc. rejects a claim by the
    City of  Zenith that any one or more of the conditions in this agreement have
    not been  met,  the City of Zenith may demand that the claim be resolved by
    the committee

         (2) Within fifteen (15)  days  of written demand  to this effect by the  City
    of Zenith, each party shall appoint one member  of the committee

         (3) The third member, who shall act as  chairperson, shall be chosen by
    the two members  appointed  by the parties, and failing agreement between
    them, by	

      O. In the event that the  committee of experts  shall decide that one or more
    of the conditions stipulated in this  agreement have not been met, the additional
    compensation to which the  City of Zenith is entitled  under paragraph A. above
    shall be determined as follows-

         (1) The City of Zenith shall  submit a claim to  Babbit  Waste Systems,
    Inc, who shall respond  to that  claim  within ninety (90) days

         (2) If Babbit Waste Systems, Inc rejects the claim, representatives of
    both parties shall  meet,  together with  a mediator  who shall be named by  the
    chairperson of the committee of experts that determined that the condition had
    net been  met

         (3) With the help  of the said mediator, the parties shall negotiate in
    good faith and shall attempt to evaluate the further costs imposed on Zenith by
    breach  of the relevant condition

         (4) Should  the parties fail to reach agreement  on this matter,   the
    question shall be  submitted to arbitration  before an arbitrator who shall  be
    appointed by the  mediator

         (5) The arbitrator's decision,  which will be  final and binding on both
    parties,  will stipulate the sum of compensation  to be  paid, or services to be
    provided,  and the  time when such  compensation  will be paid or services pro-
    vided.
         (6) The arbitrator  shall determine which  of the parties shall pay the costs
    of the arbitration
  Section IV could be completely removed from the agreement without affecting
the  substantive  obligations  under it.  The  section  is  purely  procedural  and
establishes  a  mediation and  arbitration  procedure  for  handling  breaches  of
contract conditions. If this provision were omitted, such breaches would have to be
litigated  In either event, however, the same substantive rights would be at issue
                                       31

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   V.  Effective Dates

      A.  This agreement shall become effective and binding on the parties  when
   the application of Babbit Waste Systems, Inc  for approval of the site is
   approved by the State Facility Siting Board if, within one (1) month of the
   signing of this agreement, the Governing Board of the City  of Zenith shall have
   passed the resolution, contained in Appendix III of this agreement,  in support of
   the said application.

      B  This agreement may be terminated by either party if both of the following
   conditions are met'

         (1) Written notice of the termination, together with a  request for a stay
   of the proceedings on the application of Babbit Waste Systems, Inc. for
   approval of the site by the State Facility Siting Board, is received by the Board
   prior to its ruling on the application

         (2) Written notice of the termination  is delivered by hand to the other
   party at the office address provided in the heading of this agreement,  above.
  As  noted  above, Section  V transforms the model agreement into a unilateral
contract and solves the problem of consideration Paragraph A also states that the
agreement is not effective unless the site is approved.
  Paragraph B is designed to protect the site owner in the situation that the board
passes the required resolution but then either it or its members or other community
representatives take action  to undermine the effectiveness of  the resolution. In
such  a case, the site owner may terminate the agreement if he alerts the Siting
Board of the fact in time for it to delay its decision on the application until it has had
time to consider the effect of the lack of an agreement. The same paragraph also
protects either party in the event that anything else occurs to make the agreement
unsatisfactory during the  possibly long period  of  time between the filing of the
application for site approval and the ruling on it.
MODEL  AGREEMENT BETWEEN A  FACILITY OWNER AND
                            AN  INDIVIDUAL

  The  model  agreement  sets  forth a number  of  provisions  for  mitigation,
compensation, and incentives to "Samuel Dodswortn" for the potential and certain
impacts of a HWMF to be constructed and operated by "Babbit Waste Systems,
Inc."
  The  problem of securing proper "consideration" is not as difficult in private
compensation agreements as it is in agreements with local governments because
private parties may freely agree to support a hazardous waste facility in the future,
regardless of the public interests affected  Nevertheless, the best structure for a
private  compensation contract  is the  same  as for an agreement with  the
Government—a unilateral contract Such an agreement does not go into effect
unless one of the parties (here, Samuel Dodsworth) completes the  action that
constitutes the consideration for the other party's promises.
  Sections I,  II,  and III  of the model  agreement contain a few examples of
compensation,  mitigation, and incentives that can be  included in the agreement.
                                     32

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They differ, of course, from the items contained in the model agreement with the
City of Zenith. Some of the provisions, however, are similar.

                         Model Compensation Agreement

                                    between
   Babbit Waste Systems, Inc
   101 Main Street
   Zenith,  Winnemac
                                      and
   Samuel Dodsworth
   1 Rosebud  Lane
   Zenith,  Winnemac

   WHEREAS Babbit Waste Systems, Inc. plans to  build a hazardous waste
   management facility (HWMF) on a site that it owns,  located
   at	adjacent to property located at	that is owned
   by Samuel Dodsworth (the "abutting site")

   WHEREAS the  construction and operation  of the HWMF will result in increased
   traffic on Rosebud Lane in front of the abutting  site; and

   WHEREAS the  construction and operation  of the HWMF may result in odors,
   noise, and/or air pollution  and thereby cause damage to Samuel Dodsworth
   and to  the abutting site, and

   WHEREAS the  construction and operation  of the HWMF may result in adverse
   impacts  on  the beauty and quality of the environment of Zenith and thereby
   lower the property value of the abutting site; and

   WHEREAS the  construction and operation  of the HWMF may result in ground-
   and/or surface-water pollution and thereby cause damage to the well water
   presently used  to supply the  abutting site; and

   WHEREAS the  construction and operation  of the HWMF will result in the need
   for ground- and surface-water monitoring on the abutting site; and

   WHEREAS the  construction and operation  of the HWMF may increase the risk
   of other damages to Samuel  Dodsworth and/or to the abutting site; and

   WHEREAS Babbit Waste Systems, Inc has agreed to undertake  the mitigation
   measures specified in this agreement, and

   WHEREAS Babbit Waste Systems, Inc. has agreed to compensate Samuel
   Dodsworth for such  costs as are specified in this agreement;

   The parties  have agreed as follows

   /. Cash  Compensation and Fees

      A. Babbit Waste Systems,  Inc  shall pay Samuel  Dodsworth, upon approval
   of the site by the State Facility Siting Board, the amount of $	,
   as compensation for the annoyance, noise, odor, and other temporary impacts
   on the abutting site from construction of the HWMF.

      B.  Babbit Waste Systems, Inc. shall also pay Samuel Dodsworth the
   following additional amounts for so long as Samuel Dodsworth refrains from
   bringing suit for any property damage to the abutting site arising out of the
   operation of the HWMF-
                                      33

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         (1) During the two (2) years commencing on the first date of operation of
   the HWMF, a fee of $	per month;

         (2)  Thereafter, a fee as mutually agreed by the parties  from time to  time;
   provided that, if the parties are mutually  unable to agree  on  a fee at any time,
   the fee shall be set at $	per month
  Paragraph  A of Section I  contains a  single  lump-sum fee  stated  to be  a
compensation for the major construction impacts  of the facility. Paragraph B sets
up a monthly fee  in exchange for continued forbearance from bringing an action
for damages. This fee may be renegotiated from time to time.


   // Provision of Services and Other Compensation
      A  Babbit Waste Systems, Inc. shall provide,  without charge,  disposal
   services for up  to	kilograms per month of hazardous wastes, as defined
   by the Resource Conservation and Recovery Act,  42 U.S.C.  §6903(5),
   generated by Samuel Dodsworth.

      B  Babbit Waste Systems, Inc shall purchase from Samuel Dodsworth  for
   $	,  a buffer strip  designated as lot A on the plan attached as Appendix I
   to this agreement and shall plant thereon a hedge,  acceptable to  Samuel
   Dodsworth, and sufficient to  form a  visual screen between the HWMF and the
   abutting site.

      C. Babbit Waste Systems, Inc.  shall reimburse Samuel Dodsworth for the
   purchase and installation of ground- and surface-water monitoring devices, as
   specified in Appendix II to this agreement,  and shall further reimburse Samuel
   Dodsworth for monitoring services and maintenance of the said devices in an
   amount not to exceed  $	per year
   As an incentive,  paragraph A of Section  II  promises free disposal services to
Samuel Dodsworth. Paragraph  B promises  to create a buffer strip between the
facility and the abutting site. This promise is a mitigation device, peculiarly suited
for dealing with abutters. Another mitigation device appears in paragraph C, which
provides that Babbit Waste Systems, Inc. will  pay the costs of ground- and surface-
water monitoring on the abutting site.
   ///. Conditions of Construction and Operation

      A. No wastes will be stored or disposed of on the HWMF at locations less
   than	yards  from the abutting site or	yards from Rosebud Lane.

      B. Babbit Waste Systems,  Inc shall institute the practices specified in
   Appendix III to this agreement for the prevention of hazardous waste spills at
   the HWMF.
                                      34

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  Paragraph A of Section III provides for setbacks and sideyards, to mitigate the
impact of the facility further. Paragraph B includes additional mitigation measures
in the form of spill prevention practices.


   IV Compensation for Damages
      A  Babbit Waste Systems,  Inc. shall establish a fund of $	 that will
   be used to mitigate any effects of the HWMF on individual residents  of Zenith,
   with whom  Babbit Waste Systems, Inc  enters into agreements substantially
   similar to this agreement,  and to  compensate such residents for those
   decreases in property values  that result directly from construction and/or
   operation of the HWMF.

      B  Claims for mitigating measures and/or compensation for Samuel
   Dodsworth shall be decided by an assessment board of three people who shall
   be appointed in the manner specified in paragraph C  below

      C  The assessment board shall be appointed as follows'

         (1) Within  fifteen (15) days of submission of a claim  to Babbit Waste
   Systems, Inc., each party to  this  agreement shall appoint  one member of the
   board

         (2)  The third member,  who shall act as chairperson,  shall be  chosen by
   the two members appointed by the parties, and failing agreement between
   them,  by	

      D.  After affording Samuel Dodsworth and a representative of Babbit Waste
   Systems, Inc.  the opportunity to be heard on the claim, the assessment board
   shall determine Samuel Dodsworth's entitlement to compensation and/or
   mitigating measures. The  board may attach whatever conditions it deems
   appropriate to the award  of such compensation and/or mitigating measures.

      E  The liability of Babbit Waste Systems,  Inc  under this  agreement for all
   claims submitted by Samuel Dodsworth  shall be limited to the sum of the fund
   established under paragraph  A,  provided that  this fund shall in  no way restrict
   the legal liability of Babbit Waste Systems, Inc  for claims not submitted to the
   assessment board,  or  for claims  that cannot be met because of depletion of
   the fund
  Section IV,  unlike the similar one in the public compensation agreement, could
not be completely removed without affecting the  substantive obligations of the
parties The section establishes a procedure for handling claims  arising from
operation of the facility and creates a fund to compensate those claims. However,
the section permits compensation in instances where the harms caused are not
actionable in a court proceeding either as a breach of contract or as a tort. Note
that Samuel  Dodsworth  may pursue a  claim under  this procedure  without
disturbing his right to a monthly fee under paragraph I.B. Once the compensation
fund  is depleted,  however, he  cannot pursue a  remedy without forfeiting  his
monthly fee.
                                      35

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   V Effective Dates
     A  This agreement shall become effective and binding on the parties when
   the application of Babbit Waste Systems, Inc. for approval of the site is
   approved by the State Facility Siting Board if Samuel Dodsworth shall have
   cooperated with Babbit  Waste Systems, Inc. in any hearings before the said
   Board
     B  This agreement may be terminated by either party if both of the following
   conditions are met
        (1) Written  notice of the termination, together with a  request for a stay
   of the proceedings on the application  of Babbit  Waste  Systems, Inc. for
   approval of the site by  the State Facility Siting Board, is received by the Board
   prior to its  ruling  on the application
        (2) Written  notice of the termination is delivered  by hand to the other
   party at the office address provided in the heading of  this agreement, above.

  As noted  above  in the  previous agreement,  Section V transforms the model
agreement into a unilateral contract  and  solves the  problem  of consideration.
Paragraph A also  states that  the  agreement is not effective unless the site is
approved. Paragraph B is designed to protect the site  owner in the same manner
as the comparable  paragraph in the public compensation agreement. In addition,
this paragraph diminishes the ambiguity of the word "cooperated" in paragraph A.
A court would normally interpret "cooperate" to mean "reasonably cooperate" if
the issue were raised  before it. However, paragraph B allows Babbit Waste
Systems,  Inc. to terminate the agreement if it  believes that the quality of the
cooperation  it  is receiving is inadequate. Paragraph  B also allows Samuel
Dodsworth to terminate  the agreement if he believes  that the cooperation being
demanded is too burdensome. The practical impact of paragraph  B, if neither party
terminates the agreement, is  that this fact alone  is  strong  evidence that the
cooperation given was "reasonable."
                                     36

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Appendix  A
Mitigation  Techniques
                           INTRODUCTION

  Why mitigate'' Mitigation prevents or reduces adverse impacts. Even though
Federal and State regulations require facilities to lessen their possible impacts,
there are several reasons why mitigation above that required by regulatory review
processes may be appropriate in siting HWMFs.

•  It is often cost-effective to avoid impacts rather than to pay compensation or
   pay for the consequences of an avoidable accident.
•  Minimizing impacts will better enable the hazardous waste facility to develop a
   "good neighbor"  track record—which is especially important for staying in
   business
•  Mitigation minimizes  the problem of  estimating the cost of impacts  and
   negotiating compensation.
•  Mitigation may  be strategically  useful in  demonstrating commitment  and
   credibility when negotiating with local groups.

  Because mitigation is  very site-specific, this section  does  not cover  every
mitigation technique that may be appropriate in siting facilities, but it does provide
some examples for two generic  types of mitigation—changes in the design of
facilities and changes in  the  operation of facilities. Both types of mitigation are
appropriate for  a wide  range of potential impacts,  including traffic, noise, air
pollution, ground- and surface-water pollution, odors, overall risk problems, and
aesthetics.
  The  research  in EPA's Siting of  Hazardous Waste Management Facilities and
Public  Opposition suggests that disposal facilities that leave waste in place and
relatively intact (landfills, surface impoundments, and injection wells) tend to raise
more issues requiring mitigation  in the siting process than transfer and storage
stations or treatment and incineration facilities.
                  FACILITY  DESIGN CHANGES

  Changes to the facility design beyond those required by the permitting agency
may include  deletions, such as decreasing the size of the facility; modifications,
such as increasing the height of an incinerator  stack;  or  additions, such  as
purchasing additional  land to buffer neighboring properties. Facility changes also
                                   37

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encompass changes in the vehicles used to haul  hazardous waste to a facility,
such as the addition of a spill containment system. See Exhibit 1 1 for examples of
facility design changes.
  Some design changes, however, are potentially very costly and may render the
proposed facility financially unattractive  In addition, redesigning  major features of
the facility is more difficult and costly after detailed plans have been prepared. It is
especially important, therefore,  to  involve the local public  early in the  design
process so community concerns can be addressed.
  Except  where  a facility  is  State-owned,  facility design changes  beyond
permitting requirements are generally  inappropriate for States to  require and
impossible for States to provide  However, there are instances, particularly with
respect to offsite impacts, where it may be more practical and feasible for a State to
mitigate adverse impacts. For example, the State could purchase a buffer zone or
improve the access road to a site without compromising its regulatory responsibili-
ties  While State sharing of this type of mitigation would potentially relieve the
economic burden on the private sector, more appropriate State incentives could be
used to  deal with the issues that this mitigation technique is intended to resolve.
These include site banks and facility development loans to the  private  sector.
                    Exhibit 11.  Facility Design Changes
                                                                 of
                                                      '"''    '

                FACILITY  OPERATION  CHANGES

  Changes to the operation of a facility beyond the requirements of the permitting
agency encompass changes in the onsite operations, such as operating hours,
                                   38

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changes in offsite operations, such as waste hauling routes; and restrictions on the
types of waste allowed in the facility. When the State is the owner or the operator of
a facility, operation changes beyond  the requirements of the RCRA permit are
clearly legitimate mitigation measures for the  State  to provide.  As a means of
stimulating  further HWMF operating credibility,  the State may also require private
operators to fund third-party participation in monitoring.
  State  operational  requirements on private  developers,  however,  must  be
exercised with some caution  Although operational changes can be an effective
and  inexpensive  way of mitigating impacts, some  requirements—such as  in-
creased security and monitoring—are  not trivial. Unlike design changes, the costs
of which may be paid once by the developer, operational requirements may pose
recurring costs. See Exhibit 12 for examples of facility operation changes.
                   Exhibit 12.  Facility Operation Changes

                      ^-^;:^|i^^p.||^^»}p




                                                    .
         ^^^

   i^^^-ffijj^^                                      W

    expense) Is likely to be the most effective assurance of the developer's
                                    39

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               Exhibit 12.  Facility Operation Changes—Continued

     promises to the community. The implementation requirements for
     independent monitoring include; financing, a binding agreement,
     determining monitoring issues (e.g., ground-water, staff training,
     emergency containment systems), choosing the independent monitor
     (private laboratory, environment^ group, community representatives, a
     combination of these), and determining the frequency of monitoring and
     access to  the facility.
     Operating hour restrictions represent a useful technique for mitigating
     traffic-related noise impacts and traffic during sensitive hours such as
     evenings and weekends. There is precedent for this technique in  the
     planned restrictions on airport flight operations.
     Waste haul route changes offer opportunities to reduce traffic, traffic-
     related noise impacts, and risks associated with spills and accidents.
     Waste type restrictions at the facility may alleviate fears associated with
     the handling and disposal  of certain wastes. The Wes-Con facility in
     Grandv/ew, Idaho, does not accept kepones,  military poison gas, or
     pressurized gas, regardless of the suitability of fter site for these
     wastes.
            SELECTING MITIGATION  ALTERNATIVES

  Selecting the appropriate mitigation  alternative  is obviously not  a clear-cut
exercise. A hypothetical example is shown in Exhibit 13 to illustrate the difficulty in
selecting among possible alternatives  As seen  in this example, the selection and
evaluation  ot  mitigation  measures should consider a  number of  factors.  These
factors include'
•  cost
•  effectiveness
•  implementation feasibility
•  secondary effects

  In most  cases, mitigation measures will add costs to the overall project. The
magnitude of these costs,  of  course, depends on the  type  of impact  being
mitigated  It  is possible  to  minimize mitigation costs  by considering as  many
mitigation alternatives as possible. For example, in the truck traffic impact example
in Exhibit 13 the cost range is fairly large In general, as shown in the example, it is
easiest to compare costs when expressed in present-value form.
  Effectiveness refers to the ability of the proposed  mitigation measure to prevent
or reduce  the impact of  concern. The level and type of mitigation for a specific
impact beyond that required by local or State regulatory agencies may result from
the negotiation process between the developer, the State, the community, and the
parties affected  In  short, the  amount of mitigation  required may be a very
subjective issue
  Like any other project, mitigation measures may face implementation feasibility
constraints. These  may include legal authority  problems, administrative feasibility
                                     40

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Exhibit 13.  Mitigation Alternatives for Dealing with HWMF Truck Traffic
                   Impacts (Hypothetical Example)
Mitigation
Alternatives
A, flWbct
size of
facility









B. fteroute
baffle
along
afferent
higttmy(&)



C, Construct
tmnstsr
sraSw in
another
ares; um
tong+fafuf
trueks








D. Limit
operating
hours to
weeMays,
9-M a.m.
to S.-QQ
pM,


9 These sr» cost
•arid are express
for the facility.

Cost* Effectiveness
$3,iOQ,00Q VMH cirf truck
(tost profits) traffic by
SO96









$750,000 Will eliminate
(cosf of traffic in
repairing residential
alternative area; wilt
route) shift traffic to
rural route;
difficult to
enforce
$4,200,000 Will cut truck
traffic by
75%












$500,000 Will eliminate
(lost profits) truck traffic
during
sensitive
hours




>$ (
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issues,  and  political acceptability  problems. In  broad terms,  implementation
feasibility is concerned with the issues shown below:

      Implementation Feasibility Criteria                   Issues
     Legal authority                      Whether or not the implementation
                                        or institutional arrangements are
                                        legal

     Administrative capability               Whether the firm or public agency
                                        has necessary skills to perform
                                        required administrative responsibilities

     Political acceptability                 Whether the public supports the
                                        implementation scheme
Implementation feasibility may be particularly difficult to evaluate if the proposed
mitigation scheme  involves some  type of joint public/private arrangement  or
action.  For  example,  using the traffic impact example, Alternative  B involves
rerouting traffic along different highways to avoid residential areas. State and local
highway regulations, however,  may preclude the use of alternative routes. In this
case, implementing a rerouting alternative may simply be infeasible.
  Finally, an important issue to  consider is the indirect or secondary impact(s) that
may be induced by the mitigation measure. Simply put, a solution to one problem
may lead to another problem. The transfer station alternative (Alternative C) is a
good example This alternative essentially involves siting two  hazardous  waste
disposal facilities instead of one.  The additional facility may  require as  much
complex negotiation as the original disposal facility. The traffic rerouting alternative
may pose similar indirect impact issues, because the amount of traffic is not being
reduced, rather, the problem is only relocated. The  example illustrates the  trade-
offs that have to occur in responding to impacts. The most effective measure—the
transfer station alternative—is also the most expensive and is complicated by the
political  problems  of  siting  another  facility.  The  least expensive  option—the
limitations on operating hours—does not totally prevent the problem.
                                    42

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Appendix B

Examples  of  State  Compensation

Legislation


            CONNECTICUT (PUBLIC LAW 80-472)

  Sec. 12. (NEW) Within thirty days following the end of each calendar quarter, the
owner or operator of a hazardous waste disposal facility shall report to the chief
elected official of the municipality in which such facility is located and to the
commissioner of environmental protection, on a form furnished by said commis-
sioner, the number of gallons or cubic yards of hazardous waste received by such
facility in such calendar  quarter, and the gross receipts of such facility in such
calendar quarter. The owner or operator shall remit to the municipality, with such
form (1) payment in an amount equal to five cents per gallon or three dollars and
fifty cents per cubic yard for each gallon or cubic yard of hazardous waste
received in such quarter, or (2) payment in an amount determined in accordance
with the following table at the percentage applicable to each level of quarterly
gross receipts, whichever is greater:

                       Quarterly Gross Receipts
                                            Payment  as Per Cent
           Over            Not Exceeding       of Gross Receipts
$ 0
1,250,000
2,500,000
$1,250,000
$2,500,000

10.0
5.0
25
If a hazardous waste disposal facility is located in more than one municipality, such
owner or operator shall report to each such municipality and such payment shall
be made pro rata, based on the number of gallons or cubic yards of hazardous
waste disposed of in each such municipality.
               KENTUCKY (KRS, CHAPTER 68)

  The fiscal court of any county may license off-site waste management facilities
located within the county with the imposition of a license fee at a percentage rate
not to exceed two percent (2%) per annum of  the gross receipts of such a waste
                                43

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management facility owned or operated by self-employed individuals, partnerships,
or corporations. The proceeds from the license fee shall be used  to defray the
general  revenue requirements of  the  county  where the facility  is located. For
purposes of assessing the licensing fee provided for in this section,  off-site waste
management shall consist of establishing and operating a facility whose principal
purpose is  treatment, storage, disposal, or a combination of these  activities, but
shall not include  those treatment, storage, or disposal activities  which occur
incidental to or which are not otherwise distinguishable from a broader manufac-
turing operation at the site of said operation.
    MASSACHUSETTS (CHAPTER 21D OF  THE  GENERAL
                                 LAWS)

  Section 12.  No facility shall  be constructed, maintained or operated unless a
siting agreement shall have been established by the developer and the local
assessment  committee of a host community pursuant to sections twelve and
thirteen of this chapter and said agreement has been declared to be operative and
in full force and effect by the council. After said declaration by the council, a siting
agreement shall be a non-assignable contract binding upon the developer and the
host community, and enforceable against the parties in any court of competent
jurisdiction.
  The siting agreement shall specify the terms, conditions and  provisions under
which the facility shall be constructed, maintained and operated if the developer
chooses to construct, maintain  and operate a facility on said site,  including, but not
limited to the following terms, conditions, and provisions:

  1)   facility construction and maintenance procedures;
  2)   operating  procedures and  practices,  the  design of  the facility and  its
      associated activities;
  3)   monitoring procedures, practices and standards necessary to assure and
      continue to demonstrate that the facility will be operated safely;
  4)   the services to be provided the developer by the host community;
  5)   the compensation, services, and special benefits that will be provided to the
      host community by the developer,  and the timing and conditions of their
      provision,
  6)   the services and benefits to be provided to the host community by agencies
      of state government, and the timing and condition of their provision;
  7)   any provisions for tax prepayments or accelerated payments, or for payments
      in lieu  of taxes;
  8)   provisions for renegotiation of any of the terms, conditions, or provisions of
      the siting agreement, or of the entire agreement;
  9)   provisions for resolving any disagreements in the construction and interpreta-
      tion of the siting agreement that may arise between the parties; and
 10)  appendices of the compensation to  be paid abutting communities  estab-
      lished pursuant to the provisions of section fourteen of this chapter.

   The siting agreement may also include, but shall not be limited to, the following
 provisions:

  1)  provisions for  direct  monetary payments from the developer  to  the  host
                                   44

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     community in  addition to payments  for taxes and special services  and
     compensation for demonstrable adverse impacts;
 2)  provisions to assure the health, safety, comfort, convenience, and social and
     economic security of the host community and its citizens;
 3)  provisions to assure the continuing economic viability of the project;  and
 4)  provisions to assure the protection of the environment and natural resources.


  None of the terms, conditions and provisions of a siting agreement shall operate
to derogate in any way from  the requirements established by any general  or
special law.
  Any financial benefits received by host communities or abutting communities,
other than taxes on real or personal property, shall not be deducted from any
amounts of state assistance, reimbursements or distributions provided by general
and  special laws or under the  local  aid fund established  by  section two D of
chapter twenty-nine.
  Section  13. A siting agreement may be established (1) by the signature of the
chief executive officer of a host community who has been directed by a  majority
vote of the local assessment committee of said host community to sign  and the
signature of any officer of the developer expressly authorized by the developer to
sign said agreement, or (2) by arbitration pursuant to section fifteen of this chapter.
  Section  14. The chief executive officer of any abutting community may, within
sixty days of the determination by the  secretary and the council that a preliminary
project impact report is in their judgment in compliance  with applicable  law,
petition the council for the establishment of compensation to be paid by  the
developer to the abutting community for the demonstrably adverse impacts to be
imposed upon  said community by the  construction, maintenance and operation of
a hazardous waste facility in a host community.  As a condition precedent to the
filing of said petition, the chief executive officer shall agree in  writing on a form
prescribed by the council, and he is herewith given the authority to bind his city or
town to  such  an agreement,  that  his city  or  town  shall either accept  the
compensation to be determined by the council or the compensation established by
arbitration pursuant  to the procedures established in this section in full settlement
of any claims for demonstrably adverse impacts imposed by the current proposed
project. The chief executive officer shall also agree, as an  essential part of said
condition precedent, that he will sign  an agreement with the developer accepting
the amount established by the council or by  arbitration pursuant to this  section,
which agreement shall  be a nonassignable contract binding on the abutting
community and the developer, and enforceable as such in any court of competent
jurisdiction.
  The council, after due notice to the  developer, the local assessment committee,
and  the chief  executive officer of the abutting community  which has petitioned
shall conduct a public hearing to determine and establish the compensation to be
given to the abutting community by the developer. If the chief executive officer of
the  abutting  community or  the developer   is aggrieved  by the amount  of
compensation established by the council, either party may appeal to the council to
establish  an arbitration panel, which  shall  be comprised of three arbitrators, to
resolve the dispute. The council, upon such appeal, shall establish said arbitration
panel by appointing one arbitrator selected by the chief executive officer of the
abutting community, one arbitrator selected by the developer, and the third an
                                   45

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impartial  arbitrator, who shall  be selected  by the chief executive officer of the
abutting community and by the developer and who shall act as chairman of the
panel or, if the chief executive officer of the abutting community and the developer
agree, a single impartial arbitrator acceptable to the chief executive officer of the
abutting community and the developer.
  If an arbitration panel or single arbitrator has not been selected within thirty days
after an appeal for arbitration has been filed, the council shall appoint the arbitrator
or arbitrators necessary to complete the three person panel, which shall act with
the same force and effect as if the panel had been selected without the intervention
of the council.
  The arbitration panel by a majority vote or single arbitrator shall within forty-five
days after establishment determine the amount of compensation to be paid by the
developer to the abutting community. The council, upon request of the arbitration
panel or the single arbitrator, may extend the time for the conduct of arbitration.
  The arbitrators or arbitrator, subject to  appropriation, shall receive from the
council  such  compensation for each day  or part thereof for his  services as a
majority of the council shall establish. He shall also receive, subject to appropria-
tion, all reasonable expenses actually and necessarily incurred in the performance
of his official duties.
  The developer shall agree in writing on a form prescribed by the council that, as
a condition precedent to the establishment  of a siting agreement, he shall accept
the amount established by the council or by arbitration pursuant to this section as
the  amount  of  compensation he  shall  pay to  the abutting  community. The
developer shall also agree, as an essential part of said condition precedent, that he
will expressly authorize one of his officers to sign  an agreement  with the chief
executive officer  of  the abutting community,   which agreement shall  be  a
nonassignable contract binding on the developer and the abutting community and
enforceable as such in any court of competent jurisdiction.
  The provisions of chapter two hundred and  fifty-one shall govern the conduct of
arbitration proceedings pursuant to this section, including the provisions of said
chapter for judicial review of an arbitration award.
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Appendix  C
Bibliography
      COMPENSATION  CONCEPTS,  STRATEGIES, AND
             IMPLEMENTATION CONSIDERATIONS

Bacow, Lawrence S. Creating Markets for Development Externalities. MIT Energy
Laboratory Working Paper (MIT-EL-80-Q30WA), July 1980.
  This short paper (20  pp.) presents some of the reasons why compensation
  techniques are not used more often in the siting of controversial facilities. The
  author suggests how to overcome some of the obstacles in using compensation.

Bacow, Lawrence S., and Kretzmer, David.  Draft Legislation for an Energy Facility
Siting Process Incorporating Compensation. MIT Energy Impacts Project, Discus-
sion Paper No. 18, October 1979.
  In outlining legislation to guide energy facility siting, the authors advocate a
  siting procedure including compensation agreements between a community and
  facility for negative effects on the community  as a result of facility construction
  and operation An Energy Facility Review Board is also recommended to, among
  other things, ensure compensation agreements.

Bacow, Lawrence S., and Rose, Judah. Compensating Diffuse Interest Groups for
Social Costs. MIT Energy Impacts Project,  Document No. 14, Part B, September
1979.
  Discusses usefulness of compensation as a tool for assuaging the concerns of
  geographically diffuse opposition groups (public interest groups rather than
  directly affected residents) in siting energy facilities. Identifies key problems of
  opposition based on ideological benefits and the difficulty of binding compensa-
  tion recipients to contractual agreements under existing legal rules.

Becker, Jeanne Felbeck. The Use of Incentives and Compensation to Overcome
Public Opposition  to the  Siting of Hazardous  Waste Landfills.  University of
Wisconsin, Milwaukee, May 1980.
  This paper  explores compensation  and incentives specifically related to
  hazardous waste facility siting. Issues, objectives, techniques, and implementa-
  tion are all thoroughly considered. Additionally, hazardous waste management
  in Wisconsin is detailed.
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Blackburn,  Anthony J.,  et al.  A Comprehensive Policy to Ameliorate Adverse
Impacts of Transportation Facilities. Urban Systems Research & Engineering, Inc.,
for the Department of Transportation, 1975.
  Alternatives for the reduction of the adverse impacts of transportation facilities
  are reviewed, and techniques including tied and untied assistance payments for
  the treatment  of impacts are proposed. Draft legislation is outlined involving
  compensation to municipalities and  commercial and  residential  landowners.
  Detailed development and rationale for the compensation policy are presented.

Booz, Allen & Hamilton, Inc. Hazardous Waste Management Capacity Develop-
ment on the Delaware River Basin and New Jersey: A Program Strategy. Prepared
for  Delaware River Basin Commission  and N.J.  Department of Environmental
Protection, April 1980.
  Presents a hazardous waste development strategy incorporating some compen-
  sation techniques including  direct cash  payments to communities in  which
  facilities are located using tipping fees.

Brenner, Robert  D. Social, Economic  and Political Impacts of National  Waste
Terminal Storage Repositories.  Center for International Studies, Princeton Univer-
sity, January 1979.
  Mostly  deals  with  mitigating socioeconomic  impacts  associated  with the
  construction of nuclear waste storage facilities. Also critiques O'Hare's "auction
  method," arguing for up-front impact mitigation with cash compensation as a
  last resort.

Chemical Manufacturers Association. A Statute  for the  Siting, Construction and
Financing of Hazardous Waste Treatment,  Disposal, and Storage Facilities. No
date.
  This model siting legislation attempts to address  local needs and concerns and
  to provide a  mechanism for  selecting and authorizing acceptable sites for
  hazardous waste management. The key mechanism offered in the legislation is a
  council of State-oriented individuals and local citizens with the ultimate authority
  to approve a  site. The model legislation is presented with comments  and  a
  rationale for each section.

Clark-McGlennon Associates, Inc. Handbook series prepared for the New England
Regional Commission's TheSearch for Solutions. November 1980.

  Handbooks include:
  1.  A Decision Guide for Siting Acceptable Hazardous Waste Facilities in New
      England;
  2.  An Introduction to Facilities for Hazardous Waste Management: A Handbook
      on Siting Acceptable Hazardous Waste Facilities in  New England;
  3.  Criteria for Evaluating Sites for Hazardous Waste Management: A Handbook
      on Siting Acceptable Hazardous Waste Facilities in New England;
  4.  Institutional Arrangements for Developing Hazardous  Waste  Facilities in
      New England;
  5.  Negotiating to Protect Your Interests: A  Handbook on Siting Acceptable
      Hazardous Waste Facilities in New England.
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  The last  handbook listed  above  deals with compensation and negotiation
  techniques  for  hazardous  waste facility siting  with  an emphasis on the
  problems/perspectives of New England. It provides answers to many  basic
  questions concerning these techniques—their purpose, usefulness, rationale,
  and how they can be used successfully in the siting process.

Cole, R. J., etal. Compensation for the Adverse Effects of Nuclear Waste Facilities.
Battelle Memorial Institute,  Human Affairs Center, Seattle, Washington, July 1978.
  This paper  presents one  of  the most complete  analytical decisionmaking
  frameworks  for incorporating  compensation  into facility siting.  It concerns
  nuclear waste facilities, but the ideas are widely  applicable. Valuable as a
  complete checklist of issues to consider in developing a compensation program,
  although many of the individual issues are not well developed.

Ervin, D., and  Fitch,  J. B.  "Evaluating Alternative Compensation and Recapture
Techniques  for Expanded Public  Control of  Land  Use," Natural  Resources
Journal, Volume 19, No. 1,  January 1979.
  Thorough presentation  of three compensation techniques  based  on  the
  concepts of  "equity" (compensation for sufferers) and "recapture" (funds for
  compensation  should  come from windfall gains of "winners"). Techniques
  include transferable development rights, zoning by eminent domain,  and zoning
  auctions.

Farkas,  Alan  L.  Addressing Local Opposition  to  the  Establishment  of New
Hazardous Waste Disposal Sites. Booz, Allen  & Hamilton, Inc., January 1980.
  Assesses several roles for  States in siting hazardous waste facilities with a brief
  discussion of States directly providing or requiring private developers to provide
  compensation. Also considers incentives including statutes and  siting boards,
  postclosure  management,  public financing  of private  facilities,  and  public
  ownership of facilities.

Hagman,  Donald, and Misczynski,  Dean. Windfalls for Wipeouts: Land Value
Capture and Compensation. American  Society of Planning Officials,  Chicago,
1978.
  Long and detailed work defining and making policy arguments for mitigating
  impacts  and recapturing  benefits  in land  use projects. Includes in-depth
  discussion of models and specific case examples.

Kretzmer, David. Binding Communities to Compensation Agreements for Facilities.
MIT, Laboratory of Architecture and Planning, May 1979.
  A comprehensive discussion  of compensation agreements  between utility
  companies and the communities in which they are located,  addressing the
  questions of whether or  not a community can bind itself to a host facility and, if
  not, the kinds of compensation  agreements that can be formulated  instead.
  Presents a detailed analysis of the legal basis for compensation agreements, a
  potential legal  structure for the  formulation of binding agreements, and  a
  fictional case with a model compensation agreement.
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Mulch, Jerome E. "Feasible and Prudent Alternatives: Airport Development in the
Age of Public Protest," Public Policy, Winter 1976.
  This article describes the development of opposition to airports and the legal
  authority  behind  the  purchase  of  aviation easements,  the  use  of  airport
  assessment districts,  or  the  provision  of  sound  attenuation  materials  to
  communities. Specific costs for implementing various alternatives nationwide  as
  well as issues surrounding the cost efficiency and effectiveness of compensation
  are also discussed.

Mumphrey, A. J., and Wolpert, J.  "Equity Considerations and Concessions in the
Siting of Public Facilities," Economic Geography, Volume 49, April 1973.
  Ponders  a model examining comparative economic efficiency and equity  of
  potential  facility locations resulting in either direct payments or no payments at
  all. Includes discussion of technique selection and compensation rationale.

O'Hare, Michael. "Compensation  for  Development Impacts—Streamlining the
Development Process by Fair Division of the  Spoils,"  Environmental Comment,
September 1978.
  Recommends techniques such as direct monetary payments to affected parties,
  State tax credits, and grants to  local governments to ensure that real economic
  costs and net benefits are incorporated in facility costs.

O'Hare, Michael. "Not on  My Block You Don't—Facility Siting and the Strategic
Importance of Compensation," Public Policy, Volume 25, No. 4, Fall 1979.
  Outlines  characteristics  shared by all noxious facilities and describes specific
  compensation techniques.  Discussion of site selection through auction process
  where compensation costs are incorporated, including a detailed cost-benefit
  analysis  of development and a quantitative  method for determination of cost-
  effectiveness.

O'Hare, Michael, and Sanderson, Debra R.  "Fair Compensation  and the Boom-
town Problem," Urban Law Annual^ 977), pp.  101-133, 1977.
  Early exploration  of compensation techniques, primarily tunneling  funds  from
  the project sponsor to the town and individuals affected either directly or via
  State and Federal agencies. Many existing  laws and regulations providing for
  compensation are cited. Technique selection methods are also discussed.

Rivkin  Associates.   Socioeconomic   Impact  Analysis  for  Juneau  and  the
Matamuska-Susitna Borough. Prepared for the Capital Site Planning Commission,
February 1978.
  This study  presents an analysis of a proposed indemnification  scheme  to
  compensate Juneau property owners under a proposal that would shift the State
  capital from Juneau to Matamuska-Susitna.

Sanderson, Debra  R. Compensation in Facility Siting Conflicts, Part A: Facility
Siting, Social Costs and Public Conflict. MIT Energy Impacts Project, Document
No. 11, June 1979.
  Short introductory paper concerning the sources of opposition in siting energy
  facilities and how opposition is often related to the social costs triggered by the
  project. Types of compensation and problems associated with the evaluation of
  impacts are considered.

                                  50

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Sanderson, Debra R. Rationales for  Compensation  in  Energy Facility  Siting
Processes. MIT Energy Impacts Project, Discussion Paper No. 11, July 1978.
  Early discussion of the desirability of the compensation technique. Focuses on
  issues surrounding the use of compensation as a means of increasing equity, for
  dealing with social costs and demoralization costs associated with risks, and for
  strategic goals and economic efficiency.

Sanderson, Debra R., and O'Hare, Michael. Predicting the Local Impacts of Energy
Development. A Critical Guide to Forecasting Methods and Models.  MIT Labora-
tory of Architecture and Planning, prepared for the U.S.  Energy Research and
Development Administration, May 1977
  This study  offers an introduction  to mathematical predictive models for the
  "second-order" impacts of energy development. Includes a review of models
  and  their  uses for projecting employment,  population,  service and public
  revenue,  and  expenditure impacts. Critiques of the salient features  of 33
  projection models are also presented.

Susskind, Lawrence, and O'Hare, Michael. Managing the Social and Economic
Impacts of Energy Development. MIT  Laboratory of Architecture and  Planning,
December 1977.
  A study focusing on "boomtowns" including an introduction to the auction
  technique  where communities bid for a facility, i.e., they indicate the price at
  which they are willing to accept a proposed facility. The State compensation and
  siting legislation of Wyoming and North Dakota are also reviewed.

Urban Systems Research & Engineering, Inc. Buy Now, Fly Later: Land Banking
for Airport Development.  Prepared for the Department  of Transportation, March
1975.
  This study examines the economic, political, and legal factors influencing airport
  expansion and  thoroughly analyzes  the feasibility of  advance land acquisition
  (land banking) as a means of accommodating those factors.


      COMPENSATION CASE  STUDIES AND EXAMPLES

Bacow, Lawrence S., and Sanderson, Debra R. Facility Siting and Compensation:
A Handbook for Communities and Developers.  MIT Energy Laboratory Working
Paper (MIT-EL-80-037WP), September 1980.
  Using seven  case studies involving the siting  of controversial facilities, this
  handbook  examines several hypotheses concerning the use of compensation.
  The book is an excellent reference for examining the limitations of compensation
  and  for determining  which   types  of  siting  decisions lend  themselves  to
  compensation arrangements.

Brownstein, Alan, and Gregor, John.  "State Taxation Policies:  The Problem in
Siting Power Plants," Electric Perspectives, March 1978.
  Discussion of compensation provided by utilities in the form of taxes to host
  communities using Pennsylvania and New Jersey as examples. A State role in
  allocating utility tax payments according to a formula based on projected inputs
  is advocated  Provides an analogous structure for  hazardous waste facility
  compensation.

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Centaur Associates  Siting of Hazardous Waste Management Facilities and Public
Opposition. Prepared for the Environmental Protection Agency, 1979.
  This report includes more than 20 detailed case studies involving the siting of
  HWMFs and public  opposition Cases dealing with  compensation  techniques
  include Allied Chemical Case Study, SCA/Earthline (Wilsonville) Case Study,
  SCA/Earthlme (Bordertown) Case Study, and Wes-Con, Inc. Case Study.

Easton, Eric B. "Metro Denver's Siting Ordeal," Sludge Magazine, July-August
1978
  Describes the $1,800 performance bond required of Metro Denver, a regional
  wastewater district, for potential crop damage in its geotechnical testing of sites
  for a proposed sludge disposal area in Adams County, Colorado.

Fredman, Ben Medical Area Total Energy Plant. MIT Energy Impacts Project, MIT
Laboratory of Architecture and Planning, May 1979.
  Description  of  the  increasing  battle over an  energy  facility and  hospital
  expansion in an urban, poor neighborhood in Boston  Compensation included
  payment of $1.5 million to the City of Boston in lieu of taxes plus other provisions
  and services for people displaced by the project.

Higgs, Karen M. The  Northeast Massachusetts Resource Recovery Facility. MIT
Energy Impacts Project, MIT Laboratory of Architecture and Planning,  June 1979.
  Discussion of the selection of a site and design for a regional resource recovery
  facility in northeastern  Massachusetts Also includes an analysis of the limited
  success  of the compensation scheme consisting of  a  $1 /ton royalty to the
  community housing the facility and a $500/ton royalty to a community housing
  a temporary landfill.

McFall, Trudy Parson. "Housing Allocation Plans  Have Positive Implications for
Local Housing Authorities," Journal of Housing, February 1978.
  Describes housing allocation or "fair share" plans developed by regional/State
  planning  agencies  to  identify  distribution patterns  for subsidized  housing.
  Includes discussion of bonus subsidy and planning funds awarded to communi-
  ties with allocation plans.

Merwin, D. J , and Greene, M. A Framework for Monitoring Social and Economic
Impacts Associated with  the Construction of the Skagit Nuclear Project.  Battelle
Memorial Institute, Pacific Northwest Division, September 1977.
   Includes discussion of a utility-funded  impact  monitoring system and utility
   payments to Skagit County for law enforcement and education impacts through
   prepayment  of taxes.  Also discusses implementation  issues  including legal
   requirements and the calculation and distribution of compensation.

 Newkumet, L. J. "Philadelphia—EPA Consent Decree: Land-based Alternatives to
 Ocean Dumping," Sludge Magazine, July-August 1979.
   Discusses the creation of an "environmental trust fund" from penalties collected
   by EPA against sludge dumping violations by the City of Philadelphia.
                                   52

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Peele, E. Internalizing Social Costs in Power Plant Sitings: Some Examples for Coal
and Nuclear Plants in the United States. Oak -Ridge National  Laboratory, 1976.
  Describes the direct payment compensation  to Wheatland,  Wyoming, area
  counties impacted by a coal-fired power plant built by Missouri Basin Electric.
  Payments covered impact costs associated with construction work force and
  costs associated with Citizens Monitoring Committee. Legal requirements and
  the costs and financing of the compensation are also discussed.

Rose, Judah, and McKehnie,  Deborah. Pilgrim I and II: Siting Procedures and
Public Responses MIT Energy Impacts Project, Document No. 12, Part C, April
1979.
  This is an excellent case study that implicitly demonstrates the difficulty in using
  compensation to successfully combat all  public opposition. While the article
  does not deal with compensation attempts, the opposition illustrates how difficult
  a local compensation scheme to overcome public opposition may be.

Sanderson, Debra R. Compensation in Facility Siting Conflicts,  Part C: Negotiated
Compensation Agreements for Assessing Social Costs.  MIT Energy Impacts
Project, Discussion Paper No. 11, June 1979.
  An excellent short introductory piece on the progression from the identification
  of projected impacts to a negotiated compensation settlement. A case study of
  the attempt by Washington Public Power Supply System (WPPSS) to build five
  nuclear power plants in Washington is used, and a process is abstracted from
  this case and offered as an appropriate compensation negotiation model.

Swan, Raymond. "Indianapolis Project: From Lagoons to Landspreading," Sludge
Magazine, May-June 1978.
  Concerns compensation techniques for a sludge landspreading project includ-
  ing the operation of ground-water monitoring wells, sales of sludge fertilizer at
  low prices,  emergency spill containment systems on sludge-hauling trucks, and
  the purchase of a liability insurance policy to cover potential property damage or
  other losses.

Wondolleck, Julia M. The Montague Nuclear Power Plant: Negotiation, Information
and Intervention. MIT Energy Impacts Project,  Document No. 12, Part B, April
1979.
  Short paper detailing the history of the proposed Montague Nuclear Power Plant
  discussing  the utility's failure  to consider or to use compensation techniques.
  Also describes the concept of a "mitigation council" to determine compensation
  liability  when  impacts occur rather  than  at  the time  of  facility  plan-
  ning/construction.
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US.  Environment?! Protection  Agency
Region  V ! ! -:r;v
230  So:-:  .:•       -i
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DATE HUE

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United Stdtes
Environmental Pr
Agency
Official Business
Penalty for Private Use
$300
Special Fourth Class Rate
Book
Postage and Fees Paid
EPA
Permit No G-35
Washington DC 20460

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