What the Hazardous Substance Designation of PFAS Chemicals Means for Local Governments

May 6, 2024 - (7 min read)

On April 19, the U.S. Environmental Protection Agency (EPA) released a final rule designating perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund law. PFOA and PFOS are two of the most widely used and widely studied PFAS chemicals.

NLC has been tracking this rulemaking since 2022 and sharing local government concerns with the EPA. While the recently finalized EPA drinking water regulation for PFAS creates an unfunded mandate for local governments, this CERCLA rule is likely to have significant economic impacts, as well as unintended consequences, for local governments. As such, the NLC urges Congress to act to protect local governments and provide additional resources.

What Does a CERCLA Designation Mean?

With this final rule, PFOA and PFOS are added to the list of over 800 hazardous substances regulated by the EPA. As with all the elements, compounds, mixtures, and solutions designated as hazardous substances, any entity that releases a substance over the allowed limit (in the case of PFOA and PFOS: one pound) needs certain notification and reporting steps.

This final rule does not contain any immediate or required actions for investigation or cleanup in the traditional sense.

CERCLA is a discretionary statute and decisions about whether to pursue enforcement action are made on a site-by-site basis based on whether releases pose an unacceptable risk to human health or the environment.

CERCLA allows EPA to take action and respond to and clean up contaminated sites without having to first make a separate finding that a release, or a threat of release, “may present an imminent and substantial danger.”

CERCLA enables EPA to pursue parties responsible for significant contamination for enforcement action and costs related to investigation, cleanup, or exposure mitigation, adhering to the “polluter pays” model. Holding polluters accountable and responsible will have benefits for communities.

Impacts on Local Government Operations

With the designation of PFOA and PFOS as hazardous substances, the rule will have significant financial implications, both direct and indirect, on local governments.

Although local governments do not cause or contribute to PFAS contamination in communities, it is possible that they will be swept up in the CERCLA liability chain through their water utilities and solid waste facilities. Local governments are owners and operators of water utilities and solid waste facilities that receive materials containing PFAS through the normal course of their operations. Local governments are “passive receivers” of media containing PFAS that are ubiquitous in the water supply, wastewater treatment process, stormwater, biosolids management, and solid waste streams.

Each of these public services is interdependent: landfills rely on wastewater treatment facilities for their leachate discharge; water and wastewater treatment facilities depend on landfills, agricultural land application, and compost facilities for biosolids management and disposal of spent water filtration systems. Management of these systems will become even more important as the Administration and states continue to prioritize standards for PFAS in drinking water and effluent discharges. Together, these sectors provide the infrastructure that communities rely on to reduce exposure to PFAS in the environment.

The hazardous substance designation is likely to disrupt this interdependence by driving each sector to revisit its acceptance of influent streams containing concentrations of PFOA and PFOS, thus leading to significant cost increases for local governments and impacting the ability to provide basic public services for residents and businesses in communities. For example:

There currently are no cost-effective techniques available to treat or remove PFOA or PFOS for the sheer volume of drinking water, wastewater, and landfill leachate managed daily by local facilities, as advanced treatment techniques at this scale are very costly. Undertaking additional treatment for PFOA and PFOS would add significantly to the costs of facility operation.

Drinking water and wastewater facilities must manage media containing concentrations of PFOA and PFOS generated from influent treatment. The management of biosolids via incineration or land application, for example, is under increasing scrutiny in many states, and any additional disruption to available disposal outlets could result in additional cost increases for wastewater treatment.

EPA’s Enforcement Discretion Policy

Along with the final rule, EPA released a PFAS Enforcement Discretion and Settlement Policy indicating how the Agency will make decisions to pursue or not pursue potentially responsible parties for response actions or costs under CERCLA to address the release or threatened release of PFAS.
Source: United States Environmental Protection Agency

EPA will focus its enforcement efforts on holding responsible those who significantly contribute to the release of PFAS into the environment.

The policy states, “EPA does not intend to pursue entities where equitable factors do not support seeking response actions or costs under CERCLA, including, but not limited to, community water systems and publicly owned treatment works, municipal separate storm sewer systems, publicly owned/operated municipal solid waste landfills, publicly owned airports and local fire departments, and farms where biosolids are applied to the land.”

However, the agency previously asserted that it lacks sufficient authority to shield passive receivers from lawsuits brought by manufacturers of PFAS and other parties responsible for site contamination. These third-party “contribution claims” would generate significant litigation costs on essential public services for lawful operations going back decades, shifting the CERCLA “polluter pays” principle to that of a “community pays” model in the absence of Congressional action.

Without Congressional action, local governments could be held liable for the entire cost of cleanup of a contaminated site, both on a prospective basis and for lawful activities going back decades. Regardless of EPA’s use of enforcement discretion in initiating remedial actions, CERCLA designation would result in third-party contribution and cost recovery claims, likely leading to substantial litigation costs for local governments.

Congress Needs to Act

Here are four ways Congress can support local governments.

1. NLC is advocating for liability protection for municipal drinking water, wastewater and stormwater utilities, landfills, solid waste facilities, airports, and fire departments. Such legislation is essential to ensuring adherence to a “polluter pays” model, rather than shifting the financial burden onto communities and taxpayers. Tell your Congressional delegation that municipal liability protection language must be included in any PFAS legislation.

2. While the Bipartisan Infrastructure Law provided record-high levels of funding for our nation’s water infrastructure, including $10 billion over five years for grants to address PFAS and other emerging contaminants in drinking water and wastewater, this funding is insufficient for local governments to clean up or treat PFAS in their communities, meet the requirements of the new PFAS drinking water regulation and comply with the forthcoming Lead and Copper Rule Improvements requirements the Agency is considering.

Therefore, Congress should provide additional direct funding for local governments to avoid creating an unfunded mandate that will disproportionately impact low-income residents and communities.

3. Local governments need additional tools and resources to implement and comply with federal PFAS regulations, including testing, monitoring, mapping, public education, treatment, risk assessment, and pursuit of alternative water supplies if necessary.

4. NLC continues to advocate for comprehensive federal action to prevent further pollution, contamination, and exposure to PFAS, including through source reduction as a key mechanism for keeping PFAS out of water systems, landfills, and the environment.

Local Governments Should Take Advantage of Available Funding

Local leaders should consider seeking funding now for projects that will help their communities address PFAS contamination and other needs. Funding for water infrastructure primarily flows through the states and the State Revolving Fund (SRF) programs. Local leaders should reach out to their state department of the environment or similar agencies to understand the timeline, process, and requirements.

Additionally, American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds can be used for water infrastructure projects, including treatment and technology upgrades to address PFAS contamination.
Source: NLC – ARPA 3-Year Anniversary Article

As a reminder, communities have until the end of 2024 to obligate their ARPA funds. This funding is available to communities now, without having to go through state agencies, and does not require loan repayment, as compared to the SRFs.