oEPA
United States
Environmental Protection
Agency
Office of
Solid Waste and
Emergency Response
DIRECTIVE NUMBER: 9477.07(84)
V
TITLE: Determination of a Facility's Operating Life
APPROVAL DATE:
EFFECTIVE DATE:
ORIGINATING OFFICE:
E FINAL
12-3-84
12-3-84
Office of Solid Waste
D DRAFT
STATUS:
[ ] A- Pending OMB approval
f I B- Pending AA-OSWER approval
[ ] C- For review &/or comment
[ ] D- In development or circulating
REFERENCE (other document*):
headquarters
OSWER OSWER OSWER
VE DIRECTIVE DIRECTIVE Dl
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PARTS 264 AND 265 SUBPART H - FINANCIAL RESPONSIBILITY DOC: 9477.07(84)
Key Words: Operating Life, Financial Responsibility Requirements
Regulations: 40 CFR 264.143(a)(3) , 264.145(a)(3), 265.143(a)(3) , 265.145(a)(3),
264.112(a)(l), 265.112(a)(l), 264.142(a), 265.142(a)
Subject: Determination of a Facility's Operating Life
Addressee: William H. Taylor, Chief, Enforcement Section, Region VI
Originator: George A. Garland, Chief, Financial Responsibility and Assessment
Branch
Source Doc: #9476.07(84)
Date: 12-3-84 .
Summary:
For purposes of payments into the trust fund [§264.143(a)(3) , 264.145(a)(3),
265.143(a)(3), and 265.145(a)(3)], the operating life of a facility ends in ths
year in which the owner or operator currently expects to close the facility.
The expected year of closure should be identified in the closure plan. If EPA
believes that the facility's operating life is less than that stated in the
closure plan, the Agency may require the owner or operator to change the closure
plan.
For permitted facilities, operating life should be based on permitted
capacity which may include unbuilt capacity. For interim status facilities,
operating life should be based on the capacity described in Part A of the'
facility's permit application.
The pay-in period to the trust fund must be calculated for the facility as
a whole. If there is more than one unit, the end of the facility's operating
life is the year that the last unit will close.
The preamble to the March 19, 1985, proposed rule requested comments on
whether the trust fund provisions should be applied on a waste management unit
basis rather than on a facility basis as is now required. [See 50 FR 11078.]
A tank or surface impoundment which can be refilled and/or where wastes
are treated is operating until the year the owner or operator indicates he
expects to close the facility.
Waste stored in tanks prior to recycling should be considered a liability.
The owner or operator of a recycling facility may continue to recycle
wastes during the closure period as a legitimate closure activity. His closure
cost estimate must reflect the labor and materials necessary for recycling .that
waste and an estimate of the cost to dispose of waste which cannot be recycled
with existing treatment capacity in the 90 days of closure.
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'Continued from Do'cument 9477.07(84)
The March 19, 1985, proposed rule would require that the closure cost
estimate be based on third-party costs. This suggests that the closure cost
estimate must incorporate the full costs of a third party handling all wastes
on-site at the time of closure, assuming the maximum inventory [§265.112(b)(2)
and 264.112(b)(2)]. Although an owner or operator may recycle wastes at closure,
the costs of handling time off-site would be the basis of the cost estimate
under the proposed rule.
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^tOST% 9477.07 (84)
£' ^* ^ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
| ^l/^.* WASHINGTON, D.C. 20460
V«*X
OFFICE OF
SOLID WASTE AND EMERGENCY RESPONSE
MEMORANDUM
SUBJECT: Determination of a Facility's Operating Life
FROM: George A. Garland, Chief
Financial Responsibility and Assessment Branch (WH-562B)
TO: William H. Taylor, Chief
Enforcement Section, Region 6
This memo addresses the questions raised by the State of
Oklahoma in their letter to Region 6 dated September 6, 1984.
Most of these questions concern how one determines the operating
life of a facility for the purpose of calculating the trust fund
pay-in-period. As requested, I also address the separate issue
of how to treat recycling in the closure cost estimate.
1. How does one calculate a facility's operating life for
determing the pay-in-period for the trust fund?
For permitted facilities , "payments into the trust fund
must be made annually by the owner or operator over the term of
the initial RCRA permit or the remaining operating life of the
facility as estimated in the closure plan, whichever period is
shorter" (§§264.143(a)(3) and .145(a)(3)). For interim status
facilities, "payments into the trust fund must be made annually
by the owner or operator over the 20 years beginning with the
effective date of these regulations or over the remaining operat-
ing life of the facility as estimated in the closure plan, which-
ever period is shorter" (§§265.143(a)(3) and .145(a)(3)).
For purposes of this requirement, the operating life of a
facility must be presumed to end in that year in which the owner
or operator currently expects to close his facility. His expected
year of closure should be identified in his closure plan.
EPA should be able to determine, after reviewing the facil-
ity's operating record, whether the owner or operator's estimate
of the year he expects to close his facility is reasonable. If
EPA believes that the facility's operating life is less than
that stated, we may require the owner or operator to change the
closure plan.
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2. Should a facility's operating life be determined based on
existing, permitted unbuilt, or unpermitted unbuilt capacity?
The capacity of both permitted and interim status facilities
to store or dispose of wastes for the purpose of determining the
facility's operating life should be based on "the maximum extent
of operation which will be unclosed during the life of the facil-
ity" as required in the closure plan under §§ 264.112(a)(1) and
265.112(a)(1).
Thus, for permitted facilities, operating life should be
based on permitted capacity which may include unbuilt capacity.
Operating life will not be based on unpermitted capacity. If
the owner or operator later decides to increase capacity at a
permitted facility by building additional units or expanding
existing units, he must modify his permit.
For interim status facilities, operating life should be
based on the capacity described in Part A of the facility's
permit application. If the owner or operator later decides to
increase capacity beyond what is stated in the Part A, the owner
or operator must modify his Part A and his closure plan.
3. Are payments to the trust fund based on each individual
unit or the facility as a whole?
Sections 264.143(a)(3), 264.1 45(a)(3), 265.143(a)(3), and
265.145(a)(3) state that the payments into the trust fund must be
made over the remaining operating life of the facility (if less
than the permit life or 20 years). We cannot interpret "facility"
as it is used here' to mean "unit". Thus, the pay-in-period to
the trust fund must be calculated for the facility as a whole.
If the facility has more than one unit, the end of the facility's
operating life for purposes of calculating the trust fund pay-in
period will be that year when the owner or operator expects to
close the last unit (assuming this period is less than the permit
life or 20 years).
4. How does one determine the operating life of a tank or
surface impoundment which can be refilled?How do treatment
processes affect operating life?
During the operating life, the level of waste in a tank or
an impoundment may vary. Filling and emptying is part of a tank
or impoundment's normal operating life. Wastes may be treated,
sludges may settle out, liquids may evaporate or be drained off,
sludges may be dredged out and disposed of. While the level of
waste in a tank or impoundment may fluctuate, the facility is
still operating until the.year the owner or operator has indicated
he expects to close the facility.
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Prior to the time the facility receives its final volume of
waste, the owner or operator should be able to determine the
year he expects to close based on the treatment or other storage
and disposal processes he employs. If he plans to operate longer
than he'had originally intended, he must modify his closure plan.
5. Should waste stored in tanks prior to recycling be considered
a salable asset or liability for disposal?
Section 265.142(a) states that the cost estimate "must equal
the cost of closure at the point in the facility's operating life
when the extent and manner of its operation would make closure
the most expensive". Since EPA has no guarentee that there will
be a market for wastes stored prior to recycling and that these
wastes will be in a salable condition when recycled, such wastes
should be considered a liability.
As discussed in the January 12, 1984 memo from John Skinner
to James Scarbrough on closure cost estimates based on third
party costs, the owner or operator of a recycling facility may
continue to recycle wastes during the closure period as a legiti-
mate closure activity. While the owner or operator need not
include the cost of disposing of that inventory of waste that he
anticipates will be eliminated because of recycling during
closure, his cost estimate must reflect the labor and materials
necessary for recycling that waste. It is important to point
out that recycling may only continue for 90 days after the final
receipt of waste unless an extension of the closure period is
granted by the Regional Administrator. The cost estimate must
also include a reasonable estimate of the cost to dispose of that
amount of waste which cannot be recycled with' existing treatment
capacity in the 90 days of closure.
of
If you have further question, please contact Alyce Ujihara
my staff at 382-4784.
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