State & Local News Vol. 20, No. 3, Spring 1997 Environmental Law Update By Stephanie P. Brown Superfund Reform Would Cap Municipal Liability A bill being considered by the U.S. Senate would cap liability of owners and operators of "co-disposal" landfills, i.e., sites that mainly receive MSW and sewage sludge. The cap would vary depending upon, among other things, the size of the community that owns or operates the site, and whether the landfill is subject to RCRA Subtitle D regulations for MSWLFs. Also, the bill would exempt from liability arrangers and transporters of only MSW. See U.S. Senate Bill 8. Higher Ozone and PM Standards Proposed EPA has proposed more stringent NAAQSs for ozone and particulate matter that will result in subjecting more municipalities to Clean Air Act requirements. Low-level ozone, a respiratory irritant, results from reactions between VOCs and Nox. Geographic areas currently in non-attainment for ozone will become subject to stricter VOC and/or Nox emission controls, and certain areas now in ozone attainment will lose that status and become subject to such controls. The PM standard will reduce allowable emissions form 10 to 2.5 microns in diameter. EPA and affected states will need several years to classify areas and develop new control strategies. See 61 Fed. Reg. 65,716 and 61 Fed. Reg. 65,638 (Dec. 18, 1996). Municipal Combustor Rule Vacated A U.S. court of appeals has vacated EPA's NSPS for MWCs because the rule required facilities to determine their combustion capacity and thus, the applicability of the rule based upon the aggregate combustion of all units at a facility, rather than on a unit-by-unit basis. Among other things, EPA's 1995 NSPS (for new MWCs) and emission guidelines (for existing MWCs) require affected facilities to install costly MACT or other stringent environmental controls. EPA has sought reconsideration. See Davis County Solid Waste Management Dist. V. EPA, 101 F.3d 1395 (D.C. Cir. 1996). Seminole No Bar to Recoupment Claim Distinguishing the Supreme Court's 1996 Seminole Tribe of Florida v. Florida ruling, a federal district court has decided that a CERCLA defendant may assert a recoupment counterclaim against a plaintiff-state, regardless whether the counterclaim is viewed as a limited waiver of, or common law doctrine beyond, the state's Eleventh Amendment immunity. The decision would bar CERCLA contribution and indemnity claims under the Eleventh Amendment. See United States v. Iron Mountain Mines, Inc., 1996 WL 774761 (E.D. Cal. Dec. 27, 1996). County Ordinance Does Not Preempt EPA Standard A U.S. court of appeals has ruled that a county may not impose cleanup standards (for dioxin air emissions) for a CERCLA response undertaken pursuant to a consent decree. The court decided that, absent revision by EPA, such standards are frozen as of the date of the ROD which documents the Agency's selected remedy. See Missouri v. Indep. Petrochem. Corp., 1997 WL 1673 (8th Cir. 1997). Self-Insurance Test for Landfill Owners EPA has promulgated a rule under which local government MSWLF owners and operators may use a self-implementing financial test, rather than third-party instrument, to assure adequate funding for landfill closure and cleanup. This amendment to RCRA Subtitle D rules requires that governments satisfy several conditions, including a financial component, and public notice, recordkeeping, and reporting requirements. See 61 Fed. Reg. 60,328 (Nov. 27, 1996). Sewage Sludge Incinerator Standards Forthcoming EPA has announced its intention to issue a Clean Air Act NSPS and emission guidelines for SSI's that combust sludge from publicly owned treatment works. Also, EPA plans to remove SSIs from the list of Major Source Categories previously scheduled for rulemaking as sources of hazardous air pollutants. See 62 Fed. Reg. 1,868 (Jan. 14, 1997). Port Authority Not Subject to NEPA A federal district court has ruled that a port authority is not a "federal agency" and, thus, need not comply with NEPA, even though the authority was created with congressional approval. The court emphasized that the federal government neither participated in the decision-making of, nor provided funding to, the port authority. See Brooklyn Bridge Park Coalition v. Port Auth. of New York and New Jersey, 1997 Wl 14876 (E.D. N.Y. Jan. 14, 1997). County Broadens and Limits Pollution Exclusions New York's highest court has ruled that an absolute "pollution exclusion" clause bars insurance coverage for two towns that were sued for failing to prevent and abate illegal waste disposal, although the municipalities did not cause the pollution. In a contemporaneous decision, the court ruled that a pollution exclusion provision did not bar coverage for a village governments defense costs against claims arising from the discharge of raw sewage, because the claims alleged flood, not pollution, injuries. See Harrison v. Nat'l Union Fire Ins. Co., 89 N.Y.2d 308, 1996 WL 726781 , and Cedarhurst v. Hanover Ins. Co., 89 N.Y.2d 293, 1996 WL 726751 (Dec. 18, 1996). Federal Penalties Increased EPA has issued its final Civil Monetary Penalty Inflation Adjustment Rule, as mandated by the Debt Collection Improvement Act of 1996. The Act requires federal agencies to raise maximum civil penalties to keep pace with inflation. Under its new rule, EPA will increase almost all of its civil and administrative penalties by 10 percent, the maximum adjustment permitted by the Act. See 61 Fed. Reg. 69,360 (Dec. 3, 1996).