GENERAL SECTION

Superfund Reform Affects
Recycling Transactions

On November 29, 1999 President Clinton signed a Superfund Reform Bill entitled the Superfund Recycling Equity Act of 1999. The bill reduces the threat of CERCLA liability to encourage more recycling at all levels. This bill “seeks to correct the unintended consequence of CERCLA that actually discourages legitimate recycling.” In addition, the Act provides language to the effect that recycling is to be considered distinct from disposal or treatment activities, and consequently sending material for recycling is not to be considered the same as arranging for disposal or treatment. However, the persons arranging the recycling “are still responsible for investigating” or “required to investigate” the regulatory status of the receiving facilities.

OVERVIEW
The Superfund Recycling Equity Act has three major elements:

1. It creates a new CERCLA §127, which clarifies liability for recycling transactions.
2. It defines those “recycling transactions for which there is no liability by providing that only those persons who can demonstrate that they “arranged for the recycling of recyclable material” as defined by the criteria in Sections 127 (c) through (e) are not liable under Sections 107 (a)(3) or (a)(4).” The definition of “arranged for recycling” varies depending on the recyclable material involved.
3. A series of exclusions from the liability clarification are specified which provide that persons who arranged for recycling may still be liable under CERCLA Section 107 (a)(3) or (4) if the party bringing action against such a person can prove one of the criteria specified in 127 (e).
   

The bill defines “recyclable material” is Section 127(b) as “scrap paper, scrap plastic, scrap glass, scrap textiles, scrap rubber (other than whole tires), scrap metal, or spent lead-acid, spent nickel-cadmium, and other spent batteries, as well as minor amounts of material incident to or adhering to the scrap material as a result of its normal and customary use prior to becoming scrap.” The term “recyclable material” does not include:

1. “Shipping containers with a capacity of 30 L to 3,000 L having any hazardous substance (but not metal bits and pieces or hazardous substances that form an integral part of the container) contained in or adhering thereto; or”
2. “Any item of material that contained polychlorinated biphenyls at a concentration in excess of 50 parts per million or any new standard promulgated pursuant to Federal Laws.”
   

Section 127 provides for relief from liability for both retroactive and prospective transactions. However, an additional requirement is placed on prospective transactions. For prospective transactions, persons arranging for such transactions must “take reasonable care to determine the environmental compliance status of the facility to which the recyclable material is being sent.” A transaction would qualify for relief under §127, should a consuming facility’s compliance record indicate past non-compliance with the environmental laws, if at the time of the transaction, the person who arranged for the transaction exercised “reasonable care to determine that the consuming facility was in compliance with all applicable laws.” Compliance information regarding recycling/reclamation activities at the receiving facility must be obtained from regulatory agencies. However, the bill provides these “reasonable inquiries” with environmental agencies do not need to be made before every transaction.

SUMMARY
The Superfund Recycling Equity Act provides greater freedom from liability in recycling transactions. However, the Act sets certain requirements for these transactions, such as due diligence as to regulatory status of the receiving facility, which must be conducted by the persons arranging the recycling. A copy of the Act and some supporting materials can be found on the USEPA web site. If you have any questions about how these provisions may affect your facility, please contact Emily Covert or Jerry Lisiecki at the Payne Firm at (513) 489-2255 or via e-mail at eac@paynefirm.com and jbl@paynefirm.com.