3EPA
Unittd State*
Environmental Protection
Agency
Off ice of
Solid W»«te and
Emergency Responee
DIRECTIVE NUMBER: 9834.13
TITLE: ' TR^NSMITT^>"OF " INTERIM POLICY ON' CERCLA..."
i
.APPROVAL DATE; .December 6, 1989
EFFECTIVE DATE: December 6, 1989
ORIGINATING OFFICE: OWPE
Q FINAL
D DRAFT
LEVEL OF DRAFT
ChA — Signed by AA or DAA
SB — Signed by Office Director
DC — Review & Comment
• ,*
i ,
REFERENCE (other documents):
OS WER OS WER OS WER
VE DIRECTIVE DIRECTIVE Dl
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*^ ^«» A ~ -'3 United States Environmental Protection Agency
JELPPA -.* V^' • Washington. DC 204«0
ocrM . OSWER Directive Initiation Reau
• • • Z Originator Information
Hunt of Contact Person > . •• t -^ Mad Code Office
Kathy MacKinnon. - ' 0'S-'510 OWPE
3. Title v. ,' .—
Transmittal of Irlnterim Policy on CERCLA..."
* * .
1. Directive Number
est 9834-13
Telephone Code
475-6771
•
4. Summary of Directive (include brief statement of purpose) •„
This memorandum establishes EPA''S, interim policy on settlements involving municipaliti
or municipal vastes under .Section 122 CERCLA as amended by SARA 1
•. _ >»•".' '
' ' *•/•••''
t * . «* •
5. Keyword*. , . ... • //•• , •.^;;'.I/
Settlements, "Municlpai'^wlstes, Municipalities
Sa. Does This Directive Supersede Previous Directive^)? ««,*; v .
- " ' *§^!*?- • No Yts w
, , ' tfl«VfV-U.-^ ^~~^
b. Does It Supplement Previous Dlnctive(s)?
1 • Y N^ Yes w
^
7. OraK Level
A- Signed by AA/DAA I 1 B- Signed by Office Director C-ForR
...«, l^»^J ' ' V ' — -'
hat directive (number, title)
hat directive (number, title)
ivlew & Comment I 1 D - In Development
8. Document to be distributed to States by Headquarters? I IYM [x|No
This Request Mt«ts OSWER Directives System Format Standards.
9. Signature of Lead Office Directives Coordinator . - *- .
^ « •
10. Name and Title of Approving Official , -
Oat*
Date ^
EPA Form 1315-17 (Rev. S-«7) Previous editions are obsolete^'
•. t
OSWER-- - OSWER OSWER O
VE DIRECTIVE DIRECTIVE DIRECTIVE
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
OEC-6
MEMORANDUM SOLID WASTE AND EMERGENCY SESPONSE
SUBJECT: Transmittal of "Interim Policy on CERCLA Settlements
Involving Municipalities and Municipal Wastes"
(•referred to as the "Municipal Settlement Policy")
FROM: Don R. Clay _
Assistant Administ
TO: Regional Administrators
Attached is a package containing the interim "Municipal
Settlement Policy" and other related documents as follows:
o The "Interim CERCLA Municipal Settlement Policy Fact
Sheet" which summarizes certain key provisions of the
interim policy.
o The "Interim Policy on CERCLA Settlements Involving
Municipalities or Municipal Wastes" which provides
guidance to the Regions on how to involve
municipalities and wastes in the Superfund settlement
process and other related issues.
o The "Federal Register Notice" which explains to the
public the process the Agency used for developing this
interim policy, the Agency's rationale for this interim
decision, and how they may provide the Agency with
formal comment.
Attachments
cc:
Directors, Waste Management Divisions, Regions I, IV, V, VII, and
viii
Director, Emergency and Remedial Response Division, Region II
Director, Hazardous Waste Management Division, Region III
Directors, Air and Waste Management Division, Regions II and VI
Director, Toxics and Waste Management Division, Region IX
Director, Hazardous Waste Division, Region X
CERCLA Branch Chiefs, Regions I - X
CERCLA Section Chiefs, Regions I - X
Regional Counsels, Regions I. - X
Regional Counsel Branch Chiefs, Regions I - X
Prinud on Rtcyeltd Paptr
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INTERIM CERCLA
MUNICIPAL SETTLEMENT
FACT SHEET
* -- *
\mj
DECEMBER 1989
OFFICE OF WASTE PROGRAMS ENFORCEMENT
I. INTRODUCTION
IV. NOTIFICATION
This fact sheet summarizes certain key provisions of
tit* "Interim Policy on CERCLA Settlements Involving
Municipalities or Municipal Wastes" COSHER Directive
19834.13); it doe* not cover all aspects of the interiia
policy nor provide definition* of key terms. The Municipal
Settlement Policy has been developed to provide the Region*
with national guidance on hou to involve municipalities and
municipal wastes (i.e., municipel solid waste (MSU) or
sewage sludge) in the Superfund settlement process. It also
addresses how the treatment of municipalities and municipal
wastes affects the treatment of private parties and certain
kinds of commercial, institutional, or industrial waates.
II. CERCLA LIABILITY
CERCLA doe* not provide an exemption from liability for
municipalities nor for municipal wastes. Municipalities may
be potentially responsible parties (PRPs) like private
parties if they fall within the categories of liability
specified under Section 107(a) of CERCU (e.g., if they are
owners/operators of facilities, or generators/transporters
of hazardous substances). Municipal wastes nay be
considered hazardous substances if they are covered under
the definition of hazardous substances in Section 101(14) of
CERCLA and if they are the subject of a release or
threatened release. The interim policy does not provide an
exemption from legal liability for any party or any
substance; potential liability continues to apply in all
situations covered under Section 107 of CERCU.
III. INFORMATION
GATHERING
All owners/operators and generators/transporters should
generally be included in the information gathering process
(e.g.. they should all generally receive Section 104(e)
information request letters). This includes municipal
owners/operators of facilities a* well a* municipal and
private party generators/transporters of municipal wastes.
Owners/operators; Both municipal and private party
past and present owners/operators should generally receive
notice letters.
Generators/transporters of municipal solid waste;
Municipal and private party generators/transporters of NSW
will not generally be notified as PRPs unless:
o the Region obtains site-specific information that
the MSU contains a hazardous substance; AND
o the Region ha* reason to believe that the
hazardous substance is derived from a commercial,
institutional, or industrial process or activity.
Notwithstanding this general policy, EPA may consider
notifying generators/transporters for MSW containing a
hazardous substance derived only from households in truly
exceptioneI situations where the total contribution of
commercial, institutional', and industrial hazardous waste by
private parties is insignificant when compared to the MSU.
Generators/transporters of sewage sludge; Municipal
and private party generators/transporters of sewage sludge
will not generally be notified a* PRPs unless:
o the Region obtains site-specific information that
the sewage sludge contains a hazardous substance;
o the Region has re**on to believe that the
hazardous substance is derived from a centnerciat,
institutional, or industrial process or activity.
Generators/transporters of trash from a commercial.
institutional, or industrial entity; Parties who are
generators/transporters of trash frost a commercial,
institutional, or industrial entity will not generally be
notified a* PRPs if such parties demonstrate to the Region
that:
o none of the hazardous substances contained in the
trash are derived from a commercial,
institutional, or industrial process or activity;
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a the amount and toxicity of the hezardous
•ubatancea contained in the traah do not
•xcaed thoe* which one would expect to find
In common household trash.
Generators/transporters of any other hazardous
t^itrstance. ind'Hine lOM*hezar*fr?*is jp**>*trial wastes?
Municipalities and private parties Mho are generators/
transporters of any hazardous substance or any subatance
that contains a hazardous substance (except those discussed
above) will generally be notified as PRPs. This includes
low-hazardous industrial wastes like certain paint sludges
and industrial waateweters.
V. SETTLEMENTS
The overall process and goals for reaching sett tenants
it sites involving mjnicipalities or sunicipel Maates is tfte
sane as for other Super-fund sites (e.g., to reach one
settlement agreement), although separate settlements like dj
ni minis sett laments nay be used where appropriate.
Nonetheless, there ere sone sett lament provisions that
lay be particularly suitable for municipal PRPs (e.g.,
delayed payments, delayed payment schedules, and in-kind -
contributions). These settlement provisions are not
routinely available to municipal PRPs, but nay be considered
nhere s municipality has successfully demonstrated to EPA
that they are appropriate. These settlement provisions may
« separate settlements or may be folded into a larger
-atttenant that includes private parties. Although these
-ettlement provisions may be particularly appropriate for
municipalities, they may be available to private parties,
-uch as certain saall businesses, where appropriate.
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si
1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, O.C. 20460
' OSWER DIRECTIVE
#9834.13
DEC -6 1989 OFe,CEOP
MEMORANDUM SOLID WASTE AND EMERGENCY RESPONSE
SUBJECT: Interim Policy on CERCLA Settlements Involving
Municipalities or Municipal Wastes
FROM: Don R. Cla
Assistant Administra
TO: Regional Administrators, Regions I - X
I. INTRODUCTION
A) Focus of Interim Policy
This memorandum establishes EPA's interim policy on
settlements involving municipalities or municipal wastes under
Section 122 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA or Superfund) as
amended by the Superfund Amendments and Reauthorization Act of
1986 (SARA). In particular, this interim policy indicates how
EPA will exercise its enforcement discretion when pursuing
settlements which involve municipalities or municipal wastes.
The municipal wastes addressed by this interim policy are
municipal solid waste (MSW) and sewage sludge as defined below.
This interim' policy has been developed to provide a consistent
Agency-wide approach for addressing municipalities and municipal
wastes in the Superfund settlement process.
1 This interim policy does not provide an exemption from
potential CERCLA liability for any party; potential liability
continues to apply in all situations covered under Section 107 of
CERCLA.
Priiutd on Rieycted Paper
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OSWER DIRECTIVE #9834.13
Although this interim policy focuses on municipalities and
municipal wastes, it addresses how private parties and certain
kinds of commercial, institutional, or industrial wastes will be
handled in the settlement process as well. It is important to
address private parties and certain kinds of commercial,
institutional, or industrial wastes in this interim policy
because private parties sometimes handle municipal wastes or
wastes of a similar nature and because municipal and private
party waste streams are sometimes co-disposed at sites,
particularly municipal landfills. The kinds of commercial,
institutional, or industrial wastes covered by this interim
policy include "trash from a commercial, institutional, or
industrial entity" and "low-hazardous industrial wastes" as
defined below.
There are three fundamental issues addressed by this interim
policy. First is whether to notify generators/transporters of
MSW or sewage sludge that they are considered to be potentially
responsible parties (PRPs) and to include them in the Superfund
settlement process. Such parties are usually municipalities,
although they may include private parties as well. Second is how
municipalities should be handled in the Superfund settlement
process when the decision is made to notify them that they are
PRPs under Section 107(a) of CERCLA. Third is how the treatment
of municipalities and municipal wastes under this interim policy
affects the treatment of private parties and certain kinds of
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OSWER DIRECTIVE #9834.13
commercial, institutional, or industrial wastes in the Superfund
settlement process.
Key questions specifically addressed as part of this interim
policy include the following: -
o Information Gathering; Should municipalities be
included in the Agency's information gathering process?
Should generators/transporters of MSW or sewage sludge
be included in the information gathering process?
o Notification: Should municipalities be notified that
they are PRPs? Should generators/transporters of MSW
or sewage sludge be notified as PRPs?
o Settlements: How should municipalities be handled in
the Superfund settlement process? What settlement
process and settlement tools should be used to
facilitate settlement involving municipalities or
municipal wastes?
o Private Parties; How does the treatment of
municipalities and municipal wastes affect the Agency's
treatment of private parties and certain kinds of
commercial, institutional, or industrial wastes?
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OSWER DIRECTIVE #9334.13
B) Kev Terns Used in Interim Policy^
The following defines the key terms used in this interim
policy:
o The term "municipalities'* refers to any political
subdivision of a State and may include cities,
counties, towns, townships, and other local
governmental entities.
o The term "municipal solid waste" refers to solid waste
generated primarily by households, but may include some
contribution of wastes from commercial, institutional
and industrial sources as well. As defined under the
Resource Conservation and Recovery Act (RCRA), MSW
contains only those wastes which are not required to be
managed as hazardous wastes under Subtitle C of RCRA
(e.g., non-hazardous substances, household hazardous
wastes (HHW), or small quantity generator (SQG)
wastes). Although the actual composition of such
wastes varies considerably at individual sites, MSW is
generally composed of large volumes of non-hazardous
substances (e.g., yard waste, food waste, glass, and
The definitions provided under this section are for the
purpose of this interim policy only. Where possible, this
interim policy includes already existing definitions used under
other Federal environmental programs (e.g., under the Resource
Conservation and Recovery Act or the Clean Water Act). However,
nothing in this interim policy affects the regulatory efforts of
these other programs.
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OSWER DIRECTIVE #9834.13
aluminum) and may contain small quantities of household
hazardous wastes (e.g., pesticides and solvents) as
well as small quantity generator wastes.3 Many
industrial solid wastes and some commercial and
institutional solid wastes are managed separately from
household wastes, but may enter the MSW waste stream.
The term "municipal landfill" refers to any landfill,
whether publicly or privately owned, that has received
municipal solid waste for disposal.
The term "sewage sludge" refers to any solid, semi-
solid, or liquid residue removed during the treatment
of municipal waste water or domestic sewage.4
The term "trash from a commercial, institutional, or
industrial entity" refers to waste which is very
All household wastes,, including household hazardous
wastes, are unconditionally exempt from the Federal hazardous
waste regulations promulgated under Subtitle C of RCRA (See 40
CFR Section 261.4 (b)(l)). With regard to non-household sources
of solid waste, if such waste is not a listed or characteristic
hazardous waste accumulated in quantities exceeding the small
quantity generator limitations (i.e., less than 100 kg/month of
hazardous wastes and less than 1 kg/month for acute hazardous
wastes), such waste is not required to be managed in a RCRA
Subtitle C hazardous waste treatment, storage, or disposal
facility (See 40 CFR Section 261.5). "Household hazardous
wastes" refers to those wastes which are generated by households
and would be managed as hazardous wastes under RCRA Subtitle C if
they were generated by a non-household in quantities exceeding
the small quantity generator limitations.
4 The definition of sewage sludge is contained in the
National Pollutant Discharge Elimination System Sewage Sludge
Permit Regulations published in the Federal Register as a final
rule May 2, 1989 (See 40 CFR Part 122.2).
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OSWER DIRECTIVE #9834.13
similar to the MSW that is derived from households.
This term covers only those wastes that are essentially
the same as what one would expect to find in common
household trash. This term does not include hazardous
substances that are derived from a commercial,
institutional, or industrial process or activity.
o The term "low-hazardous industrial wastes" refers to
high volume wastes that contain small quantities of
hazardous substances derived from an industrial,
commercial, or institutional process or activity.
Examples may include certain paint sludges or
industrial wastewaters.
II. CZRCLA LIABILITY
Important questions have been raised about whether
municipalities may be PRPs and whether municipal wastes (i.e.,
MSW and sewage sludge) may be considered hazardous substances
under CERCLA.
A) Municipalities as PRPs
The statute does not provide an exemption from liability for
municipalities. Municipalities may be PRPs like private parties
if municipalities fall within the categories of liability
specified under Section 107(a) of CERCLA. In general, Section
107(a) establishes liability for past and present owners or
operators of facilities as well as generators or transporters of
hazardous substances for the release or threatened release of
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OSWER DIRECTIVE #9834.13
hazardous substances. Such parties may be liable for the costs
of responding to a release or threatened release of hazardous
substances as well as for resulting damages to natural resources.
The specific categories of liable parties under Section 107(a)
are: -. r --•
1. the owner and operator of a vessel or a facility,
2. any person who at the time of disposal of any hazardous
substance owned or operated any facility at which such
hazardous substances were disposed of,
3. any person who by contract, agreement, or otherwise
arranged for disposal or treatment, or arranged with a
transporter for transport for disposal or treatment, of
hazardous substances owned or possessed by such person,
by any other party or entity, at any facility or
incineration vessel owned or operated by another party
or entity and containing such hazardous substances,
[commonly referred to as "generators"5], and
4. any person who accepts or accepted any hazardous
substances for transport to disposal or treatment
Persons who fall into this category are commonly referred
to as "generators," although liability under this Section extends
beyond "true generators" of hazardous substances to include
persons who arranged for the disposal or treatment of hazardous
substances owned or possessed by such party or another party.
The term "generator" is used throughout this document to refer to
any party who is potentially liable under Section 107(a)(3).
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OSWER DIRECTIVE 19834.13
facilities, incineration vessels, or sites selected by
such person [commonly referred to as "transporters'1].
Section 107(a) describes liable parties as "persons" and the
definition of "person" under Section 101(21) includes municipal-
ities and political subdivisions of a State. . Municipalities may,
therefore, be PRPs as part of CERCLA's broad definition of who is
potentially liable.
B) Municipal Wastes as Potential CERCLA Hazardous
Substances
Similarly, the statute does not provide an exemption from
liability for municipal wastes. Municipal wastes may be
. considered hazardous substances if they are covered under the
definition of hazardous substances in Section 101(14} of CERCLA.
As indicated under the definitions of MSW and sewage sludge,
these municipal wastes are generally characterized by large
volumes of non-hazardous substances and may contain small
«
quantities of household hazardous or other wastes, although the
actuaj, composition of the waste streams vary considerably at
individual sites. To the extent municipal wastes contain a
hazardous substance that is covered under Section 101(14) of
CERCLA and there is a release or threatened release, such
municipal wastes may fall within the CERCLA liability framework.
III. INFORMATION GATHERING
The Regions should include all municipal and private party
owners/operators and generators/transporters in the information
8
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OSWER DIRECTIVE #9834.13
gathering process, including the generators/transporters of
municipal wastes. This means that municipal owners/operators as
well as municipal generators/transporters should generally
receive Section 104(e) information request letters and should
otherwise be fully included in the information gathering process
like private parties. Information obtained through such letters
or through other means is important for determining (among other
things) whether it is appropriate to notify a party as a PRP,
including whether to notify a generator/transporter of MSW or
sewage sludge as discussed below.6
IV. NOTIFICATION OF POTENTIAL RESPONSIBILITY
A) Owners/Operators
The same approach will be used for both municipalities and
private parties when determining whether to notify them as
owners/operators. Specifically, such parties will generally be
notified where they were past owners or operators of facilities
at the time of disposal of hazardous substances, or they are
present owners or operators of facilities where hazardous
substances have been released or there is a threatened release.
6 The Regions may accept and consider credible site-
specific information from any party to supplement their own
information gathering efforts as appropriate.
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OSWER DIRECTIVE #9834.13
B) Generators/Transporters
1. Municipal solid waste: Municipalities and private
parties will be treated the same when determining whether to
notify them as PRPs when they are genera tors/transporters of MSW.
Specifically, such parties will not generally be notified unless:
o the Region obtains site-specific information that the
MSW contains a hazardous substance;8 Aj£Q
o the Region has reason to believe that the hazardous
substance is derived from a commercial, institutional,
or industrial process or activity.
This means that EPA will not generally notify municipalities or
private parties who are generators/transporters of MSW if only
household hazardous wastes (HHW) are present, unless the truly
exceptional situation discussed below exists. The general policy
7 The categories of wastes discussed below, i.e., relating
to municipal solid waste, sewage sludge, trash from a commercial,
institutional, or industrial entity, and low-hazardous industrial
wastes, are defined in the "Introduction" to this interim policy
(See I.B.).
8 The term "site-specific" information refers to
information pertaining to a particular Superfund site. "Site-
specific" information does not generally include, for example,
"general studies" conducted by EPA or other parties which draw
general conclusions about whether MSW or sewage sludge typically
contain a certain percentage of hazardous substances, unless the
"general study" includes "site-specific" information obtained
from the PRP or Superfund site in question. "General studies"
may nonetheless be used to supplement "site-specific"
information.
10
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OSWER DIRECTIVE #9834.13
of not notifying parties who are generators/transporters of HHW
extends to "HHW collection day programs" as well.9
This also means that such parties may be notified as PRPs if
the MSW contains hazardous substances from non-household sources.
Non-household sources include, but are not limited to. small
quantity generator (SQG) wastes from commercial or industrial
processes or activities, or used oil or spent solvents from
private or municipally-owned maintenance shops.
Notwithstanding the above general policy, there may be
truly exceptional situations where EPA may consider notifying
generators/transporters of MSW which contains a hazardous
•
substance derived only from households. Such notification may be
appropriate where the total contribution of commercial,
institutional, and industrial hazardous waste by private parties
to the site is insignificant when compared to the MSW.10 In this
The term "HHW collection day programs" refers to programs
that have generally been sponsored by municipalities or community
organizations whereby residents voluntarily remove their HHW from
their household waste. The HHW is then typically disposed of in
a RCSA Subtitle C hazardous waste facility and the household
waste is typically disposed of in a RCRA Subtitle D solid waste
facility.
10 The Regions should consider both the volume and the
toxicity of the commercial, institutional, and industrial
hazardous waste when determining whether it is insignificant when
compared to the MSW. In determining whether the volume is
insignificant, the Regions should consider the total volume of
such waste contributed by all private parties. In determining
whether the toxicity is insignificant, the Regions should
consider whether such waste is significantly more toxic than the
MSW and whether such waste requires a disproportionately high
treatment and disposal cost or requires a different or more
costly remedial technique than that which otherwise would be
11
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OSWER DIRECTIVE #9834.13
situation, the Regions should seriously consider notifying the
generators/transporters of MSW containing a hazardous substance
from households as PRPs and include them in the settlement
process where it would promote either settlement or response
action at the site.
2. Sevaae sludge; Municipalities and private parties will
be treated the same when determining whether to notify them as
PRPs when they are generators/transporters of sewage sludge.
Specifically, such parties will not generally be notified unless:
o the Region obtains site-specific information that the
sewage sludge contains a hazardous substance; AND
o the Region has reason to believe that the hazardous
substance is derived from a commercial, institutional,
or industrial process or activity.
3. Trash from a commercial, institutional, or industrial
entity t Parties who are generators/transporters of trash from a
commercial, institutional, or industrial entity will not
generally be notified as PRPs if such parties demonstrate to the
Region that:
o none of the hazardous substances contained in the trash
are derived from a commercial, institutional, or
industrial process or activity; AND
technically adequate for the site.
12
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OSWER DIRECTIVE #9834.13
o the amount and toxicity of the hazardous substances
contained in the trash does not exceed that which one
would expect to find in common household trash.
4. Anv other hazardous substance, including low-hazardous
industrial wastes; Municipalities or private parties who are
generators/transporters of "any other hazardous substance" will
generally be notified as PRPs if the Region obtains information
that the substance is hazardous or that it contains a hazardous
substance. This includes notification of private parties who are
the generators/transporters of low-hazardous industrial wastes.
"Any other hazardous substance" in this category refers to any •
hazardous substance covered under Section 101(14) of CERCLA other
•
than hazardous substances that may be contained in MSW, sewage
sludge, or trash from a commercial, institutional, or industrial
entity (as discussed under IV.B.l., IV.B.2., or IV.B.3. above).
The generators/transporters of hazardous substances that may be
contained as part of the waste streams discussed under IV.B.l.,
IV.B.2., or IV.B.3. should be addressed as specified above.
V. SETTLEMENTS
A) Settlement Process
Once the notification decision is made, the general goal and
overall process for reaching settlement at sites involving
municipalities or municipal wastes is the same as for other
sites. The general goal remains to negotiate with PRPs to reach
one settlement agreement that provides complete resolution of all
13
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OSWER DIRECTIVE #9834.13
pending CERCLA claims, and is consistent with both applicable
statutory requirements and EPA's Interim CERCLA Settlement
Policy.11 This means that at sites where both municipal and
private PRPs exist, EPA will attempt to include both types of
parties in one settlement agreement.
Although one settlement agreement is the goal for each site,
separate settlement agreements may be used at any site to
facilitate settlement, where appropriate. This includes sites
involving municipalities or municipal wastes. Separate
settlements are not automatically available to municipalities and
are generally available to such parties under the same conditions
as for private parties. Examples of separate settlements are
Section 122(g) de minimis settlements and cash-outs which may be
used when they are consistent with applicable statutory
requirements and existing EPA guidance.12
B) Settlement Provisions That Mav Be Particularly Suitable
for Certain Municipalities
As indicated, once parties are notified as PRPs, the overall
process and goals for reaching settlement at sites involving
municipalities or municipal wastes is the same as for other
Superfund sites. Nonetheless, there are some settlement
provisions (e.g., delayed payments, delayed payment schedules,
11 "interim CERCLA Settlement Policy", February 5, 1985,
50 FR 5034.
12 For example, see "Interim Guidance on Settlements with
De Minimis Waste Contributors," June 30, 1987, 52 FR 24333.
14
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OSWER DIRECTIVE #9834.13
and in-kind contributions) that may be particularly suitable for
facilitating settlement with certain municipal PRPs because they
take into account a municipality's status as a governmental
entity.13
Such settlement provisions are not routinely available to
municipalities. As a general rule, they may be considered where
a municipality has successfully demonstrated to EPA that they are
appropriate (e.g., where valid ability to pay or procedural
constraints that affect the timing of payment exist). These
settlement provisions may be embodied in separate settlements or
they may be folded into a larger settlement that includes private
parties. In addition, although these settlement provisions may
•
be particularly suitable for municipalities, they may also be
available to private parties, such as certain small businesses,
where appropriate.
The following discusses how delayed payments, delayed
payment schedules, and in-kind contributions may be used:
1. Delayed payment: If a municipality has demonstrated
difficulty providing a lump-sum payment upfront for past costs or
In some circumstances a municipality's governmental
status may impose practical constraints on its ability to carry
out its legal obligation as a PRP under CERCLA. For example, a
municipality may need to hold a special vote involving its
legislative body or its citizens to gain approval to issue a bond
or arrange other financing to cover cleanup costs at a Superfund
site where it is a PRP. These settlement provisions are designed
to take into account these types of unavoidable constraints that
may exist.
15
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OSWER DIRECTIVE #9834.13
for cleanup needs, the settlement could be structured to allow
the municipality to pay at a specified future date. This would
allow the municipality time to raise the money needed to cover
its contribution. This may include an interest payment.
2. Delayed payment schedules (payments over time); An
alternative to a delayed payment is to allow a delayed payment
schedule where the settlement is structured to allow the
municipality to pay over time based upon a predetermined schedule
of payments. The payment schedule would be adjusted in such a
way that the discounted present value of the payment would be
greater than or equal to the settlement.14
3. In-kind contributions; The settlement could be
«
structured to allow for an in-kind contribution, especially where
a municipality can provide only a portion of its share of costs
or is unable to provide a monetary payment. In-kind
contributions may be made in conjunction with or in lieu of cash.
Factors the Regions may use in considering the appropriateness of
an in-kind contribution may include the overall financial health
of the municipality, the amount of the municipality's share, the
14 Delayed payment schedules may include "structured
settlements" which are settlements paid over time generally
through an annuity. EPA is currently developing guidance, titled
"Interim Guidance on the Use of Structured Settlements Under
CERCLA," which will establish criteria for evaluating whether a
particular site is a good candidate for a structured settlement.
EPA expects to issue this interim guidance in the Spring of 1990.
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OSWER DIRECTIVE #9834.13
value of the in-kind contribution, and the effect of the in-kind
contribution on the overall effort to achieve settlement.
One mechanism for allowing an in-kind contribution could be
a "carve-out" order when, for example, the municipal PRP has
agreed to provide the operation and maintenance at the facility.
Other in-kind contributions could include the use of trucks and
equipment to carry out cleanup activities, the installation of
fences and the provision of other security measures to control
public access to the site, or the use of the municipality's
sewage treatment plant.
C) Contribution Protection
Nothing in this interim policy affects the rights of any :
party in seeking contribution from another party, unless such
party has entered into a settlement with the United States or a
State and obtained contribution protection pursuant to Section
113 (f) of CERCLA.15
VI. DISCLAIMER
This interim policy is intended solely for the guidance of
EPA personnel. It is not intended and can not be relied upon to
create any rights, substantive or procedural, enforceable by any
party in litigation with the United States. The Agency reserves
15 Under Section 113 (f), where EPA determines that
settlement is in the best interests of the Federal government,
CERCLA provides contribution protection to the settling parties
for matters covered by the settlement. This may include a party
who has not been notified as a PRP by EPA but wishes to settle
its potential CERCLA liability.
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OSWER DIRECTIVE #9834.13
the right to act at variance with this policy and to change it at
any time without public notice.
VII. FOR niRTHKR INFORMATION
For further information or questions about this interim
policy, the Regions may contact Kathleen MacKinnon in the Office
of Waste Programs Enforcement at FTS-475-9812. Inquiries by
other persons' should be directed to Ms. MacKinnon at
202-475-6771.
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DEC-6 1989
OSWER DIRECTIVE
#9834.13
FEDERAL REGISTER NOTICE
Superfund Program; Interim Municipal Settlement Policy
AGENCY: Environmental Protection Agency
ACTION: Request for Public Comment
SUMMARY: The Agency is publishing the "Interim Policy on CERCLA
Settlements Involving Municipalities or Municipal Wastes"
(referred to as the Municipal Settlement Policy) today to inform
the public about this interim policy and to solicit public
comment. This interim policy focuses on settlements involving
municipalities or municipal wastes under Section 122 of the
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 (CERCLA or Superfund) as amended by the Superfund
Amendments and Reauthorization Act of 1986 (SARA). It also -
addresses how the treatment of municipalities and municipal
wastes affects the treatment of private parties and certain kinds
of commercial, institutional, or industrial wastes in the
Superfund settlement process as well.
DATE: Comments must be provided no later than 60 days after
publication of this interim policy.
ADDRESS: Comments should be addressed to Kathleen MacKinnon,
U.S. Environmental Protection Agency, Office of Waste Programs
Enforcement, Guidance and Oversight Branch (OS-510), 401 M
Street, S.W., Washington, D.C. 20460.
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OSWER DIRECTIVE #9834.13
FOR FURTHER INFORMATION CONTACT: Kathleen MacKinnon at the above
address or at (202) 475-6771.
SUPPLEMENTAL INFORMATION:
The following supplemental information is provided to assist
the public in reviewing and commenting on EPA's interim policy:
I. Effective Date of Interim Policy and Role of Public
Comment
II. Purpose of Interim Policy
III. Focus of Interim Policy
IV. Why Settlement Involving Municipalities or Municipal
Wastes Is An Issue
V. Discussion of Interim Policy
A. Public Input
B. EPA Consideration of Competing Public- Interests
I. Effective Date of Interim Policy and Role of Public Comment
This interim policy is effective immediately. However/ the
Agency emphasizes that this is an interim policy and that there
is an important role for public comment. We are providing the
public with 60 days to review and submit comments in writing.
Based upon public comment or on our experience in implementing
the interim policy, the Agency may address additional issues or
•• ••*',..""" * '
revise the interim policy accordingly.
-,'-' **.'
IT- Purpose of Interim Policy
The primary purpose of this interim policy is to provide
interim guidance to EPA Regional offices on how they should
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OSWER DIRECTIVE #9834.13
exercise their enforcement discretion in dealing with
municipalities and municipal wastes in the Superfund settlement
process. An additional purpose is to provide municipalities and
private parties who may be potentially liable under Section
107(a) of CERCLA with information about how EPA will handle them
in the settlement process. We believe this interim policy is
important for establishing a national framework that will help
facilitate our ability to reach settlements and will ensure that
sites involving municipalities or municipal wastes are addressed
consistently throughout the country.
III. Focus of Interim Policy
The interim policy focuses on how EPA will proceed in
attempting to reach settlements at sites involving municipalities
or municipal wastes. Focusing on settlements means the interim
policy indicates how EPA will attempt to reach voluntary
agreements for responsible party financing and/or cleanup of
sites involving municipalities or municipal wastes. Nothing in
the interim policy affects any party's potential legal liability
under CERCLA. Any decision EPA makes in exercising its
enforcement discretion under this interim policy does not mean
that potential CERCLA legal liability no longer applies. In
particular, nothing in the interim policy precludes a third party
from initiating a contribution action.
Focusing on settlements involving municipalities or
municipal wastes means that the primary intent of the interim
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OSWER DIRECTIVE 19834.13
policy is to address questions about how EPA should handle
municipalities or municipal wastes in the Superfund settlement
process. However, in the process of addressing those questions
we found it necessary to address other issues relating to private
parties and certain kinds of commercial, institutional, or
industrial wastes. We have addressed these related issues
because private parties sometimes handle municipal wastes,
^private parties generate some waste streams that are similar in
nature to municipal wastes, and municipal and industrial wastes
are sometimes co-disposed at the same site (particularly
municipal landfills).
Specific questions that have been examined by EPA as part of
this interim policy relate to who should be included in the
information gathering process, who should be notified as
potentially responsible parties, how municipalities should be
handled in the settlement process, and how the treatment of
municipalities and municipal wastes affects the Agency's
treatment of private parties and certain kinds of commercial,
institutional, or industrial wastes.
IV. Why Settlement Involving Municipalities or Municipal Wastes
Is An Issue
Involving municipalities and municipal wastes in the
Superfund settlement process is an issue because questions have
been raised about how such parties and wastes should be treated
in the settlement process. Until the development of this interim
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OSWER DIRECTIVE #9834.13
policy, EPA had not addressed these questions from a national
perspective. This issue is important because there are a
significant number of proposed and final sites on the National
Priorities List (NPL) that involve municipalities or municipal
wastes, and EPA expects more of these sites to be added to the
NPL in the future.
EPA has identified 320 (about 25%) of the 1219 proposed and
final NPL sites that may involve municipalities or municipal
wastes. Of those sites, 236 (about 20%) have been classified as
municipal landfills. EPA defines a municipal landfill as any
landfill, either publicly or privately owned, which has received
municipal solid waste. Although it is difficult to accurately
predict how many of those sites involving municipalities or
municipal wastes may be added to the NPL, historically about 20%
of each NPL update has included municipal landfills. Municipal
landfills are particularly complex sites to address because they
typically involve multiple responsible parties (sometimes
hundreds of different parties), multiple sources of wastes (often
municipal and industrial wastes), as well as diverse waste
streams (in terms of amount and toxicity).
V. Discussion of Interim Policy
:?%;---
In thefpevelopment of this interim policy, EPA has examined
a variety of issues and options for addressing these issues.
We have also made an effort to provide meaningful opportunities
for interested parties to participate in the debate about
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OSWER DIRECTIVE #9834.13
municipal settlements. EPA has listened to all sides of the
debate and has attempted to develop an approach that is both fair
and manageable.
A. Public Input
Throughout the development of this interim policy, EPA has
established and maintained an extensive dialogue with a full
range of interested parties. For example, in March of 1988
EPA sponsored a Municipal Settlement Conference attended by over
100 representatives from State and local governments and
organizations: industry, environmental, and other groups; as well
as Congressional staff. EPA sought input from all interested
parties to facilitate our efforts to develop a fair assessment of
the issues, particularly from municipal and industrial
representatives who are most directly affected by the interim
policy. Both municipalities and private parties are affected by
this interim policy because, as mentioned above, both
municipalities and private parties handle municipal waste,
private parties generate waste streams that have similar
characteristics to municipal waste streams, and municipal and
industrial waste streams are often co-disposed at individual
sites.
As a followup to this conference, EPA established the
Municipal Settlement Discussion Group. The discussion group met
in June, August, and October of 1988 and was generally comprised
of the same groups and interests that participated in the March
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OSWER DIRECTIVE #9834.13
conference. All discussion group meetings were open to the
public and a notice of each meeting was published in the Federal
Register.
The purpose of this dialogue has been for EPA to inform the
public about the issues that the Agency is addressing as part of
our effort to develop the Municipal Settlement Policy. At the
same time, the Agency has sought to stimulate the public debate
about these issues by providing a public forum for the exchange
of ideas. The conference and discussion group activities have
been conducted as an information exchange and public debate
exercise. EPA has not requested recommendations nor attempted to
•
reach a consensus among the various parties. Minutes of all
meetings have been prepared and are available to the public upon
request.
A final meeting of the discussion group is expected to be
held in January 1990, before the close of the 60 day public
comment period. The purpose of this meeting will be to discuss
the interim policy and to further facilitate public comment. A
notice of this meeting will be published in the Federal Register.
Minutes of this meeting will be kept and made available to the
public upon request.
B. EPA Consideration of Competing Public Interests
Input from the public has played an important role in EPA's
development of this interim policy. Within the context of
CERCLA's statutory language and objectives, EPA has considered
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OSWER DIRECTIVE #9834.13
the competing interests and objectives of the various parties
interested in this issue, especially municipalities and private
parties who are directly affected by the interim policy. EPA has
developed an interim policy which the Agency believes is
appropriate, is in the interests of the public, and is fair to
both municipalities and private parties as well as one which can
be managed and implemented by EPA's Regional offices. The
following examples highlight how EPA considered competing
interests on key issues. The discussion below only summarizes
(and sometimes paraphrases) certain key aspects of the interim
policy; readers should refer to the interim policy itself for an
•
indication or clarification of how EPA will proceed.
1. Treatment of municipalities as owners/operators; Some
interested parties expressed uncertainty about whether potential
CERCLA liability should apply to municipal owners/operators of
facilities where hazardous substances are present. In addition,
there are different views about how municipal owners/operators
should be handled in the settlement process. For example, some
municipal representatives have suggested that when potential
owner/operator liability applies that municipalities should be
given "special treatment" (e.g., provided with an early
opportunity to meet with EPA to resolve their potential
liability). Industry representatives have indicated that
municipal owners/operators should be handled the same as other
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OSWER DIRECTIVE #9834.13
PRPs and should be part of the larger settlement process that may
involve other parties, including private parties.
EPA's interim policy clarifies that municipal owners/
operators may be potentially liable just like private parties,
and that such parties will generally be notified and handled in
the same manner during the settlement process as private parties.
2. Treatment of generators/transporters of municipal
wastes and certain kinds of commercial, institutional, or
industrial wastes; There are different views on whether the
generators/transporters of municipal wastes (e.g., municipal
solid waste and sewage sludge) (usually municipalities) should be
notified that they are considered to be potentially responsible
parties and brought into the Superfund settlement process.
Municipalities and some States do not believe it is appropriate
to include the generators/transporters of municipal wastes as
potentially responsible parties. Industry representatives have
generally taken the opposite view.
EPA's approach to this issue is as follows: when the source
of the municipal waste is believed to come from households,
regardless of^whether household hazardous waste may be present,
•vllissf
the general^policy is to exclude such municipal wastes from the
Superfund settlement process, unless the Region obtains site-
specific information that the municipal solid waste or sewage
sludge contains a hazardous substance from a commercial,
institutional, or industrial process or activity.
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OSWER DIRECTIVE #9834.13
The only exception to this general policy is that EPA may
consider bringing generators/transporters of municipal solid
waste that contains a hazardous substance derived only from
households into the settlement process as potentially responsible
parties if the total privately generated commercial,
institutional, and industrial waste at the site is insignificant
compared to the municipal solid waste. EPA expects this
exception to be sparingly applied.
When we are dealing with industrial wastes (including low-
hazardous industrial wastes), the generators/transporters of the
wastes will generally be notified as potentially responsible
parties because the source of the waste is a commercial,
institutional, or industrial process or activity.
One question raised by the interim policy relates to how EPA
will handle trash from a commercial, institutional, or industrial
entity which is very similar to municipal solid waste that is
derived from households. Although the source of the waste in
this situation- is not households, when the generator/transporter
shows EPA that its waste is very similar to that generated by
households and that it is not the result of a commercial,
institutional, or industrial process or activity, the
generator/transporter generally will not be notified as a
potentially responsible party by EPA and brought into the
Superfund settlement process.
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OSWER DIRECTIVE #9834.13
In carrying out this approach, EPA is exercising its
enforcement discretion in determining whether we will treat
generators/transporters as potentially responsible parties for
certain categories of wastes. EPA believes this approach is fair
and manageable. For example, this approach treats municipalities
and private parties that handle the same waste streams in the
same manner (e.g., municipal generators/transporters of municipal
solid waste are treated the same as private party generators/
transporters of such waste).
This approach also treats different waste streams in a
logical and consistent manner. A key factor in -determining
whether to notify generators/transporters of municipal solid
waste, sewage sludge, trash from a commercial, institutional, or
industrial entity, or low-hazardous industrial wastes is tied to
whether a hazardous substance is present that is derived from a
commercial, institutional, or industrial process or activity.
Finally, this approach is one that can be effectively
managed and implemented by EPA's Regional offices. For example,
based on our experiences at Superfund sites, especially municipal
landfills, we believe that it is generally not a cost-effective
use of our enforcement resources to pursue those generators/
transporters whose only contribution at a Superfund site appears
to have been substances that may have been contaminated only with
relatively small quantities of household hazardous waste (e.g.,
municipal solid waste). The resource-intensive nature of
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OSWER DIRECTIVE #9834.13
obtaining sufficient evidence to demonstrate the presence of
household hazardous waste as well as the potentially increased
transaction costs of settlement and/or litigation far outweigh
the possible benefit the Government may derive from obtaining
cleanup costs from such parties. The Agency believes that its
enforcement resources are better spent on pursuing other
potentially responsible parties to achieve the cleanups needed to
effectively implement the Superfund program and to protect human
health and the environment.
3. Role of municipalities in the settlement process;
There are also different views on the appropriate treatment of
municipalities vis-a-vis private parties in the settlement
process (i.e., whether municipalities should receive "special
treatment1* because they are governmental entities).
Municipalities generally -believe they should be treated
differently than private potentially responsible parties while
industry generally believes they should not.
EPA believes that municipalities and private parties should
generally be handled in the same manner in the settlement
process. Handling municipalities and private parties the same
means that EPA will seek information in appropriate circumstances
from all parties, including municipalities. This also means that
all parties who are owners/operators of facilities will generally
be notified as potentially responsible parties.
12
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OSWER DIRECTIVE 19834.13
Relating to municipal solid waste or sewage sludge, all
parties who are generators/transporters (either municipalities or
private parties) are generally exempt from notification unless we
obtain site-specific information that the waste contains a
hazardous substance from a commercial, institutional, or
industrial activity or process. In instances relating to
notification as a potentially responsible party, we focus on the
nature/source of the waste, not whether the party is a
municipality or private party.
The interim policy also handles municipalities and private
parties essentially in the same manner once they are notified as
potentially responsible parties by attempting to negotiate and
settle with such parties as one group, unless separate
settlements such as de minimis settlements pursuant to Section
122(g) of CERCLA are appropriate. Nevertheless, EPA does
recognize that municipalities have unique characteristics as
governmental entities which EPA may take into account when
designing specific settlements (e.g., by considering delayed
payments, delayed payment schedules, or in-kind contributions
under appropriate circumstances).
Date Don R. Cfcay, /Assistant
Administrator, Office of Solid
Waste and Emergency Response
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