oEPA
              United Stat**
              Environmental Protection
              Agency
Off ic« of
Solid Wast* and
Em*rg*ncy R**pon*
                DIRECTIVE NUMBER:
                               990i.0
                TITLE:  Enforcement of Liability Requirements for
                     Operating RCRA Treatment* Storage, and
                     Disposal Facilities
                APPROVAL DATE:  October 29, 1986
                EFFECTIVE DATE:  October 29, 1986
                ORIGINATING OFFICE: OWPE/OECM
                C3 FINAL
                D DRAFT
                 LEVEL OF DRAFT
                     — Signed by AA or OAA
                   OB — Signed by Office Director
                 ,  DC — Review & Comment
               REFERENCE (other documents):
  OSWER      OSWER      OSWER
fE    DIRECTIVE   DIRECTIVE   Di

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             United States
             Environmental Protection
             Agency
              Office of .
              Solid Waste and
              Emergency Response
  &EPA
DIRECTIVE NUMBER:
                               9901,O
             TITLE:  Enforcement of Liability Requirements for
                    Operating RCRA Treatment, Storage, and
                    Disposal Facilities

             APPROVAL DATE: October 29, 1986

             EFFECTIVE DATE:  October 29, 1986

             ORIGINATING OFFICE:  OWPE/OECM

             Q FINAL

             D DRAFT

               LEVEL OF DRAFT

                 CJ A — Signed by AA or DAA
                 D 8 — Signed by Office Director
                 DC — Review & Comment

             REFERENCE (other documents):
S WER        OS WER       OS WER
   DIRECTIVE    DIRECTIVE    Dl

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                       United Slates Environmental Protection Agency
                              Washington, DC 20460
            OSWER Directive  Initiation Request
                                                                     1. Directive Number
                                                                          9901,0
                                   2. Originator Information
      Name of Contact Person
          Jackie Tenusak
                                           Office,
                                              'OWPE
             Telephone Code
                  475-8729
      3. Title
             ENFORCMENT OF LIABILITY REQUIREMENTS FOR OPERATING RCRA TREATMENT, STORAGE,
          AND DISPOSAL FACILITIES.
      4. S
                                          approach to. enforcing regulatory
        requirements for financial responsibility under RCRA at operating treatment,
        storage, and disposal facilities.  This memorandum addresses  enforcement against
        facilities that did not  lost interim status for failure to make  the required
        certifications on November 8, 1985.
      5. Keywords
         RCRA. LOIS, Disposal Facilities
      6a. Does This Directive Supersede Previous Directive(s)?
       b. Does It Supplement Previous Directive(s)?
                                            X No
                                              No
                                                 Yes   What directive (number, title)
                                                 Yes   What directive (number, title)
      7. Draft Level
           A-SignedbyAA/DAA
                          B - Signed by Office Director
C - For Review & Comment
D - In Development
8. Document to be distributed to States by Headquarters?
X

Yes


No
       This Request Meats OSWER Directives System Format Standards.
      9. Signature of Lead Office Directives Coordinator
                                                               Date
10. Name and TiUaof Approving Offici,
                                                                     Date
      EPA Form 1315-17 (Rev. 5-87) Previous ecitions are obsolete.
                                                                   I/
   OSWER           OSWER                OSWER               O
VE     DIRECTIVE          DIRECTIVE        DIRECTIVE

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                                                         990 1.C
           UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON, D.C. 20460
                             OCT29
MEMORANDUM
          Enforcement of Liability Requirements for Operating
           CRA Treatent, /torage, and Disposal Facilities
                           ^
             Winston Porjter, Assistant Administrator
           ffice of Solixl Waste and Emergency Response
                     - _     _
          Thomas L.- Adams Jr., Ass^Xtant Administrator
          Office of Enforcement and1 Compliance Monitoring
TO:       Waste Management Division Directors
          Regional Counsels
          Regions I - X


     This memorandum clarifies the Environmental Protection Agency's
(EPA's) approach to enforcing regulatory requirements for financial
responsibility under the Resource Conservation and Recovery Act
(RCRA) at operating treatment,, storage, and disposal facilities.
This memorandum addresses enforcement against facilities that did
not lose interim status for failure to make the required
certifications on November 8, 1985.

     Under the RCRA regulations, an owner or operator of a hazardous
waste treatment, storage, or disposal facility, or a group of such.
facilities, must demonstrate financial responsibility for bodily
injury and property damage to third parties caused by sudden
accidental occurrences arising from operations of the facility.
An owner or operator of a surface impoundment, landfill, or land
treatment facility, or group of such facilities, must also demon-
strate financial responsibility for bodily injury and property
damages to third parties caused by nonsudden accidental occurrences
(40 CFR §§264.147 and 265.147).

     EPA regions and states have requested guidance on how to
enforce these regulations at land disposal facilities that continued
operating after November 8, 1985.  EPA will continue to enforce
these regulations.   There is no exception to, or broad waiver by
EPA or authorized state programs of, the liability insurance
requirement.

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                                                          9901-0
                                -2-

     Therefore, operating land disposal facilities as well as
other hazardous waste treatment, storage, or disposal facilities
that have lost their insurance coverage and/or cannot demonstrate
financial responsibility for the liability requirement are subject
to enforcement for violations of this regulation.  1

     Regions and authorized states should initiate formal enforce-
ment against significant noncompliers, defined in the Strategic
Planning and Management System as those owners or operators of a
land disposal facility with major violations of ground-water
monitoring, closure, post-closure,  and financial responsibility.
The FY 1987 RCRA Implementation Plan (RIP) should be used to
determine the order in which enforcement action should be taken
against facilities that have no liability insurance.  The RIP
establishes a framework consisting of two components: a set of
high priority activities and a scheme for categorizing other
handlers into relative priority groups.  Enforcement personnel
are encouraged to consider various site specific factors while
focusing on significant noncompliers and high priority activities.
Further guidance about how individual facilities should be
addressed under our priority system can be found in the Enforce-
ment Response Policy.

     The terms of the final order developed when enforcement
action is taken.will depend upon the current situation of the
operating facility and its overall compliance status.  Generally,
the facility may be given from one to six months to come into
compliance with the financial responsibility requirements.  The
time should vary depending upon individual circumstances.  For
example,  if a facility has an application pending with an
insurance underwriter, we could give the facility enough time
to have the application processed.   Conversely, a facility with
a poor compliance history could be an appropriate candidate for
a limited period of time (one to three months).  If the facility
owner or operator does not obtain insurance in the timeframe
prescribed in the order, the facility should be compelled to
close.  Of course, other violations at the facility must be
addressed,  and necessary time periods and appropriate penalties
for lack of liability coverage as well as other violations
considered.

     We encourage enforcement personnel to require the facility
to have an alternative mechanism (i.e., a letter of credit) to
assure payment of liability judgments or settlements on a case-
by-case basis for this interim period of time prior to compliance
1 The regulations do provide, however, for adjustments in the
required level of financial responsibility, on risk-based consider-
ations.  40 CFR §§264.147(d), 265.147(d).  The unavailability
of insurance may not be cited as a reason to adjust financial
responsibility levels.

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                                                         9901-c

                                -3-

or closure.  We stress that this is an interim action only.  The
Agency may amend the liability regulations within the next year
to include the use of alternate mechanisms, which would offer a
more permanent solution to some companies.  The ultimate decision
regarding the remedy depends upon the status of the facility and
the judgment of the enforcement personnel.

     The regulatory change that allows a corporate guarantee to
be used became effective September 11, 1986.  If a State has a
corporate guarantee under an authorized program it can be used
at this time.  The corporate guarantee will not be effective in
the authorized States that have not adopted this mechanism by
legislation or regulation until they revise their programs accord-
ingly.  If an authorized state is in the process of amending its
regulation to allow the use of the corporate guarantee,  it may
allow a firm to use that mechanism as an interim remedy in an
order for a period not to exceed one year.  Thereafter,  unless
the State has made substantial progress toward adoption of a
final rule allowing the corporate guarantee and submission of it
to EPA for authorizaton, the facility should be closed.

     The states can also consider the regulatory authority that
allows them to assume responsibility for the liability requirement
(§264.150) for the facility whose capacity is critically needed,
or a situation where the state views the risk as minimal and wishes
to assume this responsibility.

     It is also imperative that closure and post-closure plans
and cost estimates be carefully reviewed at this time.  Even if
the facility is not compelled to close, it will still be necessary
to include additional requirements in the final order if the
owner/operator has not adequately addressed closure and post-closure
activities and/or cost estimates of closure and post-closure care.

     If you have any questions about this policy, or wish additional
information or assistance, please call Jackie Tenusak, Office
of Waste Programs Enforcement (OWPE) (475-8729) or Pamela Sbar,
Office of Enforcement and Compliance Monitoring (OECM) (382-3096).
We are also planning to have another conference call for Subpart
H contacts and Regional and State enforcement personnel to discuss
this policy,. .                             .

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