POINTS TO KEEP IN MIND
1. ABELPRO is only a tool  for  evaluating settlement offers in the
cost recovery process.  ABELPRO  was developed for use in
negotiation not litigation.  If  you are already in litigation,
EPA does not recommend that  you  unilaterally reduce the cost
sought based on the ABELPRO  analysis.  In addition, arguments
about the validity of ABELPRO  should be avoided as they will tend
to slow down the proceedings.
2. ABELPRO may not be able to determine an amount that an RP is
100% able to pay even when the cleanup cost entered is very low.
If this is the case the model is telling you that the RP is
probably in bad financial shape regardless of the added burden of
a cleanup cost.
3. Because ABELPRO is based on tax return information the results
tend to be conservative.  Therefore, we would prefer that you
didn't input penalties or costs of compliance such as tank
upgrade, etc.. into the model.  We believe these costs can be
reflected in the settlement negotiations if the implementing
agency so chooses.

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                                                  EPA 510-F-92-003


             USING ABELPRO IN UST COST RECOVERY CASES
     ABELPRO is an spreadsheet computer program adapted from the
EPA ability-to-pay computer program ABEL.  ABELPRO uses tax
return information to assess small businesses' ability to pay
civil penalties or other costs. The Office of Underground Storage
Tanks (OUST) believes ABELPRO can be beneficial to State UST
programs by helping them determine a responsible party's (RP)
ability to pay LUST Trust Fund cleanup costs.

     ABELPRO analyzes data in two phases. Phase I produces
financial ratios based solely on the tax information provided.
The ratios are then compared to threshold values for small
businesses. The comparison gives the user a general sense of the
overall financial condition of the RP.  Phase I uses balance
sheet information incorporating tangible and intangible assets.

     Phase II is based solely upon cash flow and does not
consider net worth or assets.  Phase II goes one step further
than Phase I by giving the user a range of probabilities that the
RP can pay various dollar amounts.  For example, the Phase II
analysis might say there is a 80% chance the RP can pay $25,000,
a 70% chance they can pay $30,000, etc.  Cleanup costs are added
to the model in Phase II to produce these probabilities.

     ABELPRO is good at determining obvious ability-to-pay and
obvious inability-to-pay, but it is less accurate at predicting
the ability-to-pay of borderline cases.  If Phase I arid Phase II
of ABELPRO produce contradictory results, or the Phase ir results
are inconclusive, it might be prudent to use a financial analyst
to study the RPs financial papers in detail.  This decision will
have to be made on a case by case basis.  Since ABELPRO uses tax
form information to predict ability-to-pay, it should be kept in
mind that the results' are going to be more conservative than an
analysis made by a trained financial analyst who would evaluate
 the complete financial picture of an RP.

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