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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