f/EPA
530F96018
United States
Environmental
Protection Agency
Solid Waste and
Emergency Response
(5305W)
November 1996
Environmental
Fact Sheet
ASSURANCE MECHANISMS FINALIZED
FOR LOCAL GOVERNMENT OWNERS
OF MUNICIPAL SOLID WASTE
LANDFILLS
Background
The Environmental Protection
Agency (EPA) promulgated the Solid
Waste Disposal Criteria on October 9,
1991. These Criteria require owners
and operators of municipal solid waste
landfills (MSWLFs) to demonstrate
financial responsibility for the costs of
closure, post-closure, and corrective
action associated with their facilities.
The financial assurance requirements
were intended to ensure that adequate
funds are available to cover these costs.
The Criteria provide a number of
financial methods that owners and
operators can use to demonstrate
financial assurance.
Action
The Local Government Financial
Test was proposed December 27,1993
in response to comments from local
governments requesting flexibility in
meeting the financial assurance
requirements of the Criteria. The Test
allows local governments to meet their
financial assurance obligations for
closure, post-closure care and corrective
v>.
action pursuant to the Criteria by
demonstrating their financial strength.
The effective date for these financial
assurance requirements is now April 9,
1997 (small, dry, or remote 1andfin«
nave until October 9,1997 to comply).
A local government can make this
demonstration by showing that it has
issued a general obligation bond for
which it received an investment grade
rating. Alternatively, it can pass ratios
that address a local government's cash
holdings and debt obligations relative to
the size of its budget. In addition, a
local government cannot have an
excessive operating deficit for each of
the last two years and those obligations
that are assured cannot be too large
relative to the local government's total
budget. This latter approach—which
contrasts with a fixed requirement that
would, for example, allow only local
governments with a minimum of $10
million in revenues to use the financial
test—was adopted to allow all local
governments, however small, to use the
financial test for at least a portion of
their environmental obligations.
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Local governments must report
annually on whether they continue to
meet the conditions of the test and
inform the public that they are using
the test. Local governments that pass
the financial test can also assure obliga-
tions for other landfill owners and
operators if they choose to do so. We
estimate that 91 percent of local
governments can use their financial
strength to assure at least part of their
obligations and 54 percent can assure
all of their obligations using the local
government financial test.
This rule gives local governments
more flexibility to meet the financial
assurance requirements of the
Municipal Solid Waste Landfill
Criteria. Those local governments who
are eligible to excertise this option can
realize substantial cost savings in
complying with the Criteria. This rule
also gives state directors the authority
to waive the financial assurance
requirements for up to 12 months for
good cause in specific cases where the
April 9, 1997 effective date does not
provide sufficient time to comply with
these requirements and where such a
waiver will not adversely affect human
health and the environment. This is
consistent with the Administrator's
priorities to give flexibility to the
regulated community in meeting our
regulations and to eliminate unneces-
sary expense in providing environ-
mental protection.
For More Information
The Federal Register (FR) notice and
this Fact Sheet are available in
electronic format on the Internet system
through the EPA public access server.
The FR notice is under Rules,
Regulations, and Legislation; tins fact
sheet is under EPA Offices and Regions.
For additional informationfdr to order
paper copies of these documents, call
the RCRA Hotline at 1-800-424-9346 or
TDD 1-800-553-7672 (hearing
impaired).
Copies of documents applicable to
the rule may be obtained by writing:
RCRA Information Center (RIC), U.S.
Environmental Protection Agency,
Office of Solid Waste (5305W), 401M
Street, SW, Washington, D.C. 20460.
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