United States Environmental Protection Agency
Solid Waste and Emergency Response (5305W)
November 1996

EPA530-F-96-018
                                                   
Office of Solid Waste
             

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
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 landfills have 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.  

     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 obligations 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 excercise 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 unnecessary expense in
providing environmental 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\Waste
Programs\FR-Waste\1996\11\27; this fact sheet is under EPA
Offices and Regions.  For additional information or 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), 401 M Street, SW, Washington, D.C. 20460.