I’ve got several hundred rounds of ammunition that had been in storage and seem to have been damaged by moisture - the primers no longer fire, or fire slowly.
What is a safe and legal way to dispose of this? I assume throwing it in the dumpster is not an acceptable option.
Pull the lead, dump the powder, recycle the brass. Or give it to someone at the range who will do it.
It’s steel case non-reloadable ammo. 
I suppose I could pull the lead and just have fun with the powder…
Got any anthills that are bothering you? 
Check with your local police - I know some of the agencies up here occasionally have amnesty days where people can turn in ammo and weapons and get anything from a thank-you to goodies like movie tickets.
Or a free ride in the back of a police car
Why would you be arrested? Surrendering weapons to police agencies is a perfectly legal way to get rid of them her in CA.