USEPA Finalizes PFAS CERCLA Designation Rulemaking
Last month, the U.S. Environmental Protection Agency (USEPA) finalized its Designation of Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as CERCLA Hazardous Substances. The rule goes into effect on July 8, 2024. Upon the final rule’s announcement, USEPA also published its PFAS Enforcement Discretion and Settlement Policy Under CERCLA outlining how the Agency intends to enforce the rule.

Under the final rule, covered entities are required to report a release of PFOA or PFOS at or above pound within 24-hours of the release to the National Response Center. The seven categories of entities that the rule identifies that may be subject to the rule are the following:

  • Manufacturers of PFOA and/or PFOS
  • Processors of PFOA and/or PFOS
  • Manufacturers of products containing PFOA and/or PFOS
  • Downstream users PFOA and/or PFOS products
  • Waste management facilities
  • Wastewater treatment facilities

It is also expected that within the above seven categories, biosolids management companies are to be captured. The Agency justifies the rule’s designation due to the documented adverse human health and environmental impacts caused by the chemicals. By designating the chemicals as hazardous under CERCLA, it allows the Agency to leverage the statute’s enforcement authorities to force timely cleanups of contamination paid by the primary responsible party (PRP).

The rule does not provide CERCLA liability exemption or protections to passive receivers that fall under the rule’s seven identified entity categories. This includes water and wastewater utilities, and biosolids management. In the rule, USEPA recognizes passive receivers’ liability concerns due to the designation absent liability exemptions. However, the Agency states it considered the designation’s quantifiable and qualitative costs and benefits related to these concerns and concluded that such concerns fail to outweigh the advantages. Further, the Agency states that when developing the rule, there was insufficient data to judge the chances of increased litigation or the ability to quantify the costs of such increase.

USEPA acknowledges that some parties that may not be primarily responsible, such as passive receivers, could become subject litigation. However, the Agency contends that the CERCLA liability framework, historic application of CERCLA, and the Agency’s discretionary enforcement policy mitigates the likelihood of this scenario. USEPA also emphasizes that the designation does not automatically “confer” liability and cites courts abilities to allocate costs based on a party’s contributions to a site.

On the issue of biosolids, USEPA dismissed providing CERCLA’s “normal application of fertilizer” exemption to biosolids. The Agency states it cannot exclude a hazardous substance based upon the use of a product and clarifies that the statutory exemption for the normal application of a fertilizer is made on a case-by-case basis because of the lack of clarity on the definition. The rule states that USEPA explicitly rejected requests to provide biosolids with an exemption because of concerns about overly broad or unintended liability created by the designation. The Agency justifies the denial stating that designation does not alter the liability framework and that the law’s guardrails and other constraints serve as protection for equitable clean-up share allocation or liability exposure.

USEPA’s Memorandum on PFAS Enforcement Discretion and Settlement Policy Under CERCLA

When USEPA announced the PFOA and PFOS CERCLA Designation Final Rule, the Agency also published its Memorandum on PFAS Enforcement Discretion and Settlement Policy Under CERCLA. The memorandum outlines how the Agency intends to enforce the final rule and is cited in the final rule to justify why the Agency did not provide liability exemption protections for passive receivers, including water and wastewater agencies and biosolids management.

The memorandum states that the Agency does not intend to pursue otherwise potentially responsible parties where equitable factors do not support seeking response actions or costs under CERCLA and lists the following categories:

  • Community water systems and publicly owned treatment works (POTWs) and acknowledges that they “do not manufacture PFAS nor use PFAS as part of an industrial process”;
  • Municipal separate storm sewer systems (MS4s) and acknowledges that “illicit discharges of non-stormwater wastes into the MS4”;
  • Publicly owned/operated municipal solid waste landfills and recognize that “these landfills may accept solid waste from POTWs that may be contaminated with PFAS, particularly sewage sludge and solid residues that result from treatment processes and filtration media”;
  • Publicly owned airports and local fire departments; and
  • Farms where biosolids are applied to the land and recognize that farms provide a “beneficial application of a product from the wastewater treatment process” and do not manufacture PFAS nor use PFAS as part of an industrial process.
    • This does not extend to the biosolids, or biosolids management companies, that were applied to the farms.

Important to keep in mind, the memorandum is not a regulation and does not create new legal obligations or limit or expand obligations under any federal, state, Tribal, or local law. As a result, while USEPA will not go after public water and wastewater utilities, the memorandum does not stop the ability of a third-party from going after a public water or wastewater utility.

Congressional Path Forward for CERCLA Liability Passive Receiver Protections Continues

Meanwhile in Congress, efforts continue in the House and Senate to resolve the issue of passive receiver liability. In the Senate, Committee on Environment and Public Works staff continue work to negotiate compromise language for passive receiver CERCLA liability language.

In the House, H.R. 7944, Water Systems PFAS Liability Protection Act, has been introduced and would establish CERCLA liability exemption for “protected entities” that would  prohibit the ability of a person, State, or Tribe to recover costs or damages under CERCLA from a protected entity arising from the release of PFAS chemicals that are designated as hazardous substances. The bill defines “protected entity” as a public drinking water, public or privately owned treatment works, municipality with a Clean Water Act 402 permit for stormwater, political subdivision or special district, or contractor performing management or disposal activities. In the event a covered protected entity does convey, transport, treat or dispose of a covered PFAS chemical, the bill qualifies that protected entity eligibility will only apply if the entity abides by all applicable laws at the time of the activity.

As of this writing, there is no clear path forward in either chamber on how Congress will resolve the issue.

 

Congressional Outreach Requested

CASA is requesting that our members take action in response to the recent USEPA PFOA and PFOS Hazardous Substances CERCLA Designation Final Rule. Unfortunately, the final rule lacks explicit liability protections for public water and wastewater utilities, as well as biosolids management. As a result, we urge all members to take a proactive stance by sending letters to your respective congressional House delegations, advocating for support of H.R. 7944, the Water Systems PFAS Liability Protection Act. You can access a template letter tailored for CASA members here. If you have any inquiries or need assistance, please don’t hesitate to reach out to Sarah Sapirstein at ssap@ensresources.com. We thank you in advance for your engagement!

 

New Cybersecurity Memorandum for Wastewater and other Critical Infrastructure Sectors
Last week, the President released the Security Memorandum on Critical Infrastructure Security and Resilience. The memorandum updates the federal government’s strategy on managing the cybersecurity of the nation’s critical infrastructure to ensure robust security standards are established that prevent, respond to, and mitigate against cybersecurity threats. In addition to strengthening U.S. critical infrastructure, the memorandum includes measures to address the increasing interdependencies among and between the nation’s critical infrastructure sectors. The memorandum’s directives and subsequent activities are effective immediately and governed by identified deadlines.

The memorandum applies to the sixteen critical infrastructure sectors. This includes water and wastewater infrastructure. The document outlines a comprehensive federal strategy that has the national security apparatus along with the Department of Homeland Security (DHS) as the key coordinating entities, with Sector Risk Management Agencies (SRMA) assigned to specific critical infrastructure sectors to be responsible for the day-to-day activities. For the water and wastewater sectors, the memorandum assigns the U.S. Environmental Protection Agency (USEPA) as the SRMA. Among the list of responsibilities and actions USEPA will have as the SMRA, include:

  • Act as the federal interface for setting priorities and sector specific activities like technical assistance, collaboration on an ongoing basis with sector owners/operators, promoting use of risk mitigation, and providing federal resources.
  • Lead outreach with sector owners/operators.
  • Establish and implement programs and services to support owners/operators, states, local, tribal interests to address planning and mitigation efforts related to risks. Specific directive to recommend sector measures to protect infrastructure.
  • Identify, assess, and set risk priorities that support cross-sector needs and national risk assessments.
  • Serve as lead for domestic incidents that primarily impact the sector.
  • Provide technical assistance to owners/operators to mitigate risks and collaborate on joint priorities.

Based on the SMRAs’ sector-specific and cross-sector risk assessments and management plans, DHS will develop and submit to President the National Infrastructure Risk Management Plan to identify ways to leverage available federal tools, resources, and authorities to limit national-level risks. Broadly the National Plan will:

  • Prioritize specific cross-sector risks with focus on new and emerging threats.
  • Identify innovative approaches to limit risks from new and emerging threats.
  • Identify risk mitigation strategies, especially for interdependent and interconnected assets and systems.
  • Fund sensible mitigation actions and investments across sectors.
  • Identify gaps in existing federal tools and authorities to respond to changing hazard landscape.

The policy is effective immediately. The memorandum details an extensive implementation timeline with various deadlines occurring over the next two years. In the near-term, the following deadlines are identified.

  • 30 days, SRMAs identify senior leader that serves as day-to-day coordinator and interface with sector stakeholders.
  • 45 days, DHS issues strategic guidance on national priorities that SRMA will use to design sector risk assessments and risk management plans.
  • 180 days, SRMAs in coordination with National Coordinator develop plans to execute SRMA responsibilities.
  • 1 year, CISA establishes or designates National Coordinator to support SRMAs.
  • 270 days and biennial thereafter, SRMA submits sector specific risk management plan to DHS.
  • 1 year and every two years, DHS submits risk management National Plan for approval.