OSWER Directive Initiation Request
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382-2199
LUST Trust Fund Cooperative Agreement Guidelines
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Summary el O«cl--« (*Ov«* bn* lUtmcnt O« pu>pos*|
This Directive consolidates and updates all previously issued program
policy guidelines for the Leaking Underground Storage Tank Trust Fund.
It provides information to assist States and EPA Regional Offices in
negotiating, awarding, and overseeing Trust Fund Cooperative Agreements
_, tates, Regions. CostTecovery,
Pndcrground Storage Tanks. LUST Trust Fund. Cooperative Agreements
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OSWER OSWER OSWER O
VE DIRECTIVE DIRECTIVE DIRECTIVE
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OSWER DIRECTIVE 9650.10
LUST TRUST FUND
COOPERATIVE AGREEMENT GUIDELINES
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF UNDERGROUND STORAGE TANKS
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OSWER DIRECTIVE 9650.10
TABLE OF CONTENTS
ISSUE SECTION
OVERVIEW OF THE LUST TRUST FUND I
APPLICABILITY OF 40 CFR PART 31 GRANT REGULATIONS IX
STATE COST SHARE REQUIREMENTS Ill
ALLOWABLE COSTS , IV
TRUST FUND USE AT GOVERNMENT FACILITIES V
SOLVENCY OF OWNERS AND OPERATORS VI
STATE PROGRAM APPROVAL AND COOPERATIVE AGREEMENTS VII
A. Linking of Trust Fund with State Program
Approval Process
B. Relationship of the Trust Funa to EPA's
Transition Strategy
'STATE UST PROGRAMS AND COOPERATIVE AGREEMENTS VIII
A. State Capabilities
B. State Certification of Authority
C. State Program Work, Plan
D. Federal Oversight - Program Appraisal Strategy
Exhibit 1: FY 89 Activities Reporting Requirements
for U.S. EPA Office of Underground
Storage Tanks "
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OSWER DIRECTIVE 9650.10
TABLE OF CONTENTS (continued)
SECTION
CORRECTIVE ACTIOH IX
A. Compliance with Corrective Action Regulation*
B. Guidance for Conducting Federal-Lead Underground
Storage Tank Corrective Actions
C. State's Priority System for Addressing UST Releases
PUBLIC PARTICIPATION X
STATE'S QUALITY ASSURANCE PROGRAM XI
ADMINISTRATIVE REQUIREMENTS FOR A STATE COOPERATIVE
AGREEMENT APPLICATION „ XII
COST RECOVERY POLICY FOR THE LEAKING UNDERGROUND STORAGE
TANK TRUST FUND (OSWER DIRECTIVE 9610.10) APPENDIX A
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OSWER DIRECTIVE 9650.10
I. OVERVIEW OF THE LOST TRUST FUND
In October 1986, Congress amended Subtitle I of the Resource
Conservation and Recovery Act (RCRA) to provide EPA, and States
with Cooperative Agreements, new enforcement and corrective
action authorities to respond to actual or suspected releases
from petroleum USTs. Under the amendments, EPA, or States with
Cooperative Agreements, may undertake any of the following
actions, or direct tank owners and operators to do so:
o Test tanks for leaks when a leak is
suspected;
o Investigate a site to evaluate the source and
extent of petroleum contamination;
o Assess how many individuals may have been
exposed to petroleum contaminants and the
seriousness of exposure, and estimate
resulting health risks;
o Clean up contaminated soil and water;
o Provide safe drinking water to residents at
the site of a tank leak; and
o Provide for temporary or permanent relocation
of residents.
The 1986'amendments to RCRA also provide a Federal Trust Fund
to finance the cleanup of petroleum releases from underground
storage tanks (USTs). This Trust Fund, financed through an
excise tax of 1/10 of one cent per gallon on motor fuels, is
expected to raise $500 million over a five year period. However,
there are some guidelines that a State must follow before using
Trust Fund dollars. When a leak or spill is discovered, the
States should first seek to identify the tank's owner or operator
and direct him to perform the cleanup at his expense. A State
should only rely oh Trust Fund dollars to clean up a site when
they cannot identify a responsible tank owner or operator who
will undertake corrective- action properly and promptly. Even
when the Trus*. rind is used, tank owners or operate'-- are liable
to the State for costs incurred, and are subject to cost recovery
actions. * .
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OSWER DIRECTIVE 9650.10
II. APPLICABILITY OP 40 CFR PART 31 GRANT REGULATIONS
In a joint effort with other Federal agencies, EPA has
recently revised and published common grant regulations that
provide consistency in the administration of grants and
Cooperative Agreements. The revised regulations, promulgated on
March 11, 1988, have an effective date of October 1, 1988.
The common rule, 40 CFR Part 31, published in the Federal
Register on March 11, 1988, supercedes certain EPA general
assistance regulations currantly contained in 40 CFR Parts 30 and
33. Specifically, Part 31 is applicable to State and local
governments and Federally recognized Indian tribal governments
and supercedes all regulations pertaining to these entities in 40
CFR Parts 30 and 33. Parts 30 and 33 have been revised to
consist of requirements applicable to grantees other than State
and local governments.
Part 31 is intended to further Federalism principles by
reducing Feder-. "controls" over State governments. •" itt 31 will
diminish the Federal role/presence in the States' co:.-uct of .
certain LUST Trust Fund related activities because it allows
States to use their own procedures in such areas as procurement
and financial management.
Awards involving FY 89 Trust Fund monies will need to
reference and adhere to the revised grant regulations. EPA's
Grants Administration Division has established the following
general policy regarding the applicability of Part 31:
o Part 31 applies to all Cooperative Agreements
whose budget or project periods began on or
after October 1, 1988;
o Part 31 applies to all amendments of existing
agreements in which all of the activities in
the amendment's scope of work will be
performed after October 1, 1988; and
o Parts 30 and 33 apply to all Cooperative
Agreements and amendments whose budget or
project periods* began before October 1, 1988.
II-l
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OSWER DIRECTIVE 9650.10
III. STATE COST SHARE REQUIREMENTS
Policy
In order to conply with Section 9003(h)(7)(B) of Subtitle I,
new or amended Cooperative Agreements that utilize FY 89 Trust
Fund monies must incorporate a minimum 10 percent State cost
share requirement for vorX done under the Cooperative Agreement.
The cost share requirement applies to FY 89 monies that are
awarded after January 24, 1989 (the effective date of the
"Technical Standards and Corrective Action Requirements for
Owners and Operators of Underground Storage Tanks — Subpart H,
Financial Responsibility*). Awards of Trust Fund Monies prior to
January 24, 1989 are not required to incorporate the cost share
provisions.
Guidance
The State cost chare requirement begins with any award of FY
89 Trust Fund monies after January 24, 1989, the effective date
(not the "compliance" date) of the "Technical Standards and
Corrective Action Requirements for Owners and Operators of
Underground Storage Tan)cs — Subpart H, Financial
Responsibility." The date of the award is the date on which the
Regional Administrator makes a Cooperative Agreement offer to the
State. The cost share requirement does not apply to unspent FY
88 monies which the State may expend after January 24, 1989.
The State cost share percentage should be applied to the
total allowable cost (see Section IV, Allowable Costs) of the
program covered by the State's Cooperative Agreement. State
Cooperative Agreement work plans should reflect a total program
budget, a minimum 10 percent of which will be contributed by the
State. All expenditures under the Cooperative Agreement are
presumed to be shared on the same percentage basis as the overall
ratio of Federal to State monies under the Cooperative Agreement.
The manner in which States provide their cost share is to be
negotiated with the Region and must be in compliance with the
grant requirements of 40 CFR Part 31. Acceptable methods for
cost sharing include:
e
o contributions, e.g., staff and equipment; and
o direct, non-Federal funds expended or obligated by the
State, or a political subdivision of the State, for
cost-allowable activities.
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OSWER DIRECTIVE 9650.10
Trust Fund expenditures that the State recovers from
responsible parties may also be used to satisfy the State's cost
share requirements. See Appendix A, Cost Recovery Policy for the
LUST Trust Fund, for more information on use of recovered funds.
The amount of the State's contribution should be negotiated
in advance and specified in the State's Cooperative Agreement.
If th« State intends to use LUST Trust Fund cost recoveries to
assist in meeting its cost share requirement, it aust be
specifically allowed for in the Cooperative Agreement. Use of
cost recovered funds in this way does not change the dollar
aaount that the State agrees to provide as it* cost share.
Regardless of the source of funds the State uses to satisfy it
cost share requirement, the State's contributions nust be
verifiable from its records, in accordance with applicable grant
regulations. /
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OSWER DIRECTIVE 9650.10
IV. ALLOWABLE COSTS
Policy
Section 9003(h) of RCRA provides that Trust Fund monies may
be used for the following general categories of activities, both
before and after th« promulgation of EPA's regulations for
underground storage tanks:
o corrective action;
o enforcement;
o cost recovery;
o exposure assessment;
o provision of temporary and permanent alternate water
supplies; and
o relocation of residents.
These general categories include the following specific
allowable activities:
o emergency response and initial site hazard
mitigation;
o investigation of suspected leaks and source
identification up to the time that a leak is
determined to come from an unregulated
source;
o exposure assessments to determine potential
health effects of a leak and the
establishment of corrective action
priorities;
o development, issuance, and oversight of
enforcement actions directed to responsible
owners/operators;
o cleanup of releases;
o long-term operation and maintenance of
corrective action measures;
o purchase and/or lease of equipment;
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OSWER DIRECTIVE 9650.10
o r«covtry of costs from liable tank owners and
operator*; and
o reasonable and necessary administrative and
planning expenses directly related to these
activities.
The Trust Fund may only be used for addressing actual or
suspected petroleum releases from underground storage tank
systems subject to Subtitle I jurisdiction. This includes tanks
that EPA has exempted or deferred from regulation until a later
date in accordance with 40 CFR Part 280. Th« Trust fund may not
be used to address releases from tanks that are statutorily
exempt from Subtitle I jurisdiction, although it may be used to
investigate suspected releases up to the time that a leak is
determined to come from a statutorily exempt source.
Allowable activities ar« limited to actions in response to an
existing or suspected release of petroleum from an VST. Thus, an
inspection and investigation to assess the site of a reported
leak would be an allowable activity, but an inspection conducted
as part of a routine or random inspection scheme would not be
allowable.
In addition, as noted in the Conference Report to the 1986
Subtitle. I Amendments, staff or activities that enhance the
general technical or legal capabilities of a State and that are
not directly related to leaking petroleum OSTs are not allowable.
Furthermore, Trust Fund money cannot be used to lobby the State
legislature to pass LUST legislation.
Costs incurred by States prior to the award of the
Cooperative Agreement with EPA will not be covered by the Trust
Fund and are not eligible for reimbursement.
"Guidance
Alternative Water Supplies:
Temporary or permanent provision of water to protect human
health .while waiting for corrective action measures to take
effect is clearly an allowable cost. It is conceivable that, in
some cases, the provision of a permanent alternative water supply
by the State will be necessary, and more cost-effective than
corrective action, relocation, or even extended "temporary"
provision of bottled or trucked-in water. Allowable costs for
permanent water supplies are limited to the initial capital .
costs, and do not include operation and maintenance costs of the
system.
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OSWER DIRECTIVE 9650.10
As part of their decision-Baking process, States should
™yj ?« U* cosj-«f f«ct^veness of providing a permanent water
supply in comparison to other corrective action and clean-up
alternatives. When considering the cost of providing permanent
alternative water supplies the State should consider both ?he
?* ""I1 M *£* C°St per •«•<*«! household.
"y ** "asonabl« " large numbers of
Relocation of Residents:
Temporary relocation of residents is an allowable cost where
it is necessary to protect human health or where corrective
action activities cannot be undertaken safely while residents
remain in their homes. States should evaluate the cost
effectiveness of this measure versus other measures, such as a
temporary water supply or in-house air filtration or venting
units. '
Permanent . .oeation should be considered an all.: »i,le cost
only under extreme circumstances in which permanent relocation is
the only, available option for protecting hunan health or is the
most cost-effective option. If permanent relocation must be
VJ?*?^ I"',!?!*** IDUSt COI"P1y with the Uniform Relocation Act
(42 U.S.C. 4610 g^. SSSLJ regarding property acquisition and
relocation of residents.
Operation and Maintenance*
Operation and maintenance (O&M) costs for corrective action
measures, other than permanent water supplies, are allowable
costs under the Trust Fund. States will use discretion in
deciding whether to fund O&M costs out of the Trust Fund or
through other ireans (e.g., responsible party contributions and
State or local funds) .
* 44."! J*s Vf11 b* r«sP°n»*W« for setting priorities between
initiating cleanups at new sites or continuing O«i at old sites.
fSilfiS?"!!1?**?? *5 liBitad to Providing money only for the work
identified in the Cooperative Agreement, and not to fully fund
sites where the State may choose to continue o*M. Further, EPA
cannot commit monies to States beyond the budget period.
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OSWER DIRECTIVE 9650.10 .
Purchase or Lease of Equipments
Trust Fund aonies may be used to purchase equipment if the
equipment is necessary for LUST Trust Fund corrective action or
enforcement activities. EPA generally approves equipment
purchases through the award of Cooperative Agreements. Planned
purchases of equipment should be included in the State'» proposed
work plan, negotiated and agreed to by EPA and the State, and
reflected in the "Equipment" budget item under the Cooperative
Agreement. Thus, EPA does not anticipate the need for routine
approval by EPA of individual equipment purchases made by the
State that are reflected in the Cooperative Agreement budget.
However, any purchases of equipment that represent a substantial
change from the approved budget or work plan in the Cooperative
Agreement require prior approval from EPA.
Where corrective action equipment is purchased for use at a
single site, its cost should be attributed only to that site.
Equipment may be used at multiple sites, however. Where this
occurs, the costs of equipment that is over $10,000 should be
allocated among sites where the equipment is used for corrective
action. An exception to this rule may be made for equipment used
at a large number of sites (e.g., response vehicles, field test
equipment) for which it would be impractical to allocate costs to
individual sites.
States should consult EPA's grant regulations for guidance in
final disposition of equipment and supplies purchased with Trust
Fund monies.
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OSWER DIRECTIVE 9650.10
V. TRUST FUND USE AT GOVERNMENT FACILITIES
Policy
The Trust Fund ordinarily will not be used to address
petroleum UST releases from government facilities. Governmental
entities should be expected to meet their own obligations of
addressing environmental hazards for which they are the source.
The Trust Fund may ba used if necessary, however, at Federal,
State, or local government UST facilities (subject to Subtitle I
jurisdiction) in the following limitod situations:
o emergencies, including the mitigation of imminent
hazards, and
o site investigations, enforcement actions, and oversight
of responsible party (RP)-lead cleanups.
The Trust Fund may nojfe be used for cleanups at Federal or State
UST facilities. Th* Trust Fund may, however, be used for
cleanups at local government facilities, if the State determines
that the local entity is incapable of carrying out corrective
action properly. This policy does not convey additional
authorities to the State with regard to access to governmental
facilities nor is it intended to alter State policies with regard
to intergovernmental relations.
Guidance •
Use of the Trust Fund for emer .icies and mitigation of
imminent hazards is allowable because human health -*nd the
environment should not be endangered if actions _.-. be taken to
minimize it. The State, however, should pursue recovery of such
expenditures from the respont . .e government entity.
As with other RPs, use of the Trust Fund for site
investigations, enforcement, and oversight of government entity-
lead cleanups results in desirable leveraging of Trust Fund
monies. Cost recovery of these expenditures should be consistent
vit> the cost recovery policy contained in Appendix A of these
guidelines. . -
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OSWER DIRECTIVE 9650.10
The Trust Fund nay not be used for cleanups at Federal or
State UST facilities. EPA considers these entities (by
definition) to have the requisite financial strength to cover the
costs of taking corrective action and compensating third parties
in the event of a release. The State should require these
entities to undertake and pay for the cost of cleanup, and should
take enforcement action if necessary.
The Trust Fund nay be used for cleanups at local government
facilities, if the State determines they are incapable of
carrying out corrective action properly, and if the State decides
they are high priorities compared to other eligible sites. The
State should treat these entities as they would other responsible
parties. The State should first try to have the government
entity undertake and pay for the cleanup, and expect the entity
to have the required level of financial assurance. If the Trust
Fund is used, cost recovery should follow.
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OSWER DIRECTIVE 9650.10
VI. SOLVENCY OF OWNERS AND OPERATORS
Policy
Solvent responsible parties (RPs) are expected to undertake
and pay for corrective action, either voluntarily or in response
to corrective action ord«r». The level of financial
responsibility required to be maintained by owners and operators
is not a limitation of their liability. When a release is
discovered, States should first seek to identify th« tank's owner
SL2£*J?^r.!2d f1**0**1* to Perform the cleanup «t him expense.
Where time and circumstances permit, States should pursue RP
cleanups through enforcement mechanisms. States may rely on the
Trust Fund for cleanups when they cannot identify an RP who will
undertake action properly and promptly.
Solvency becomes a consideration when undertaking cost
recovery. With regard to the financial condition of responsible
parties, solvency is defined as the ability to pay financial
obligations, as they become due, including the costs of corrective
action and cost recovery. In cost recovery situations, States
should view solvency in terms of how much an RP can afford to pay
without becoming insolvent. In pursuing cost recovery, States
should not impair the ability of RPs to continue in business if
the RP complied with financial responsibility requirements and
there was no negligence or misconduct by the responsible party.
Guidance
Although Congress intended that solvent owners and operators
take responsibility for releases from their tanks, if the State
determines that an RP is incapable «... of carrying out such
corrective action properly," it may use Trust Fund monies to take
corrective action. Several conditions may give rise to this
determination. For example, an RP may refuse to comply with a
request or order to take corrective action, or the RP may claim
he cannot afford the cost of cleanup. Another example is when
the costs of corrective action to be provided by the RP exceed
the required level of financial responsibility and th« State
determines that expenditures from the Trust Fund are necessary to
assure an effective corrective action, if such sites are among
the State's priorities, the Trust Fund may be used for cleanup!
with a more detailed analysis of the RP*s ability to -ay
performed later, as part of the cost recovery pror.ess*.
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OSWER DIRECTIVE 9650.10
For cost recovery, when a State is deciding whether and for
what dollar amount to pursue the RP, more scrutiny should be
given to solvency. In these cases, the state should view
solvency in terns of. how much an RP can afford to pay without
becoming insolvent. (Pursuant to RCRA Section §003 (h)(ll),
however, States nay not consider the RP's solvency, and are
directed by the statute to seek full cost recovery if the RP has
not complied with applicable financial responsibility
requirements.) The State may view the RP's ability to pay in
terms of a lump SUB payment or on an installment basis, depending
on State preference.
The rationale for not forcing RP»« to become insolvent is
found in the Congressional Conference Report for the Trust Fund
legislation:
"A full cost recovery is not intended where the owner or
operator has maintained financial responsibility as
required. . . and the financial resources of the owner or
operator (1 rluding the insurance or other methc-" . wf
financial responsibility which was maintained) a^c not
adequate to pay for the costs of a response without
significantly impairing the ability of the owner or operator
to continue in business.n
This provision is not a legal defense for RPs against further
cost recovery where deeaed appropriate, but it provides an
indication of Congressional intent, particularly when small
businesses are concerned.
See Appendix A, the LUST Trust Fund cost recovery policy, for
additional information.
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OSWER DIRECTIVE 9650.10
VII. STATE PROGRAM APPROVAL AND COOPERATIVE AGREEMENTS
A. Linking of Trust Fund with State Program Approval Process
Policy
.States are expected to make reasonable progress during FY 89
hdnSbBittin?,a «»Pl«t«l ^Plication to EPA for approval of
their UST prevention, corrective action, and financial
responsibility programs under Section 9004 of RCRA. A State's
success in making reasonable progress toward submitting •
f°r
Guidance
T,em The Jon9-term objectives of the Trust Fund clean-up and the
UST regulatory programs are to protect huaan health and the
environment from releases caused by leaking USTs . Cleaning up
releases using the Trust Fund is an immediate need, but by it Self
is Ja^Sl^!*?/? temporary solution. The long-term solution
is for States to develop prevention programs which, over time,
will result in fewer leaking tanks. States must also develop
fnr «* cn?oura9ed to use the Trust Fund as an incentive
for States to develop prevention programs and apply for State
program approval. Regions should develop criteria to measure and
evaluate State progress. They should consider the degree of
progress in allocating Trust Fund monies to States in FY 90.
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OSWER DIRECTIVE 9650.10
VII. STATE PROGRAM APPROVAL AND COOPERATIVE AGREEMENTS
B. Relationship of the Trust Fund to EPA'. Transition Strategy
Policy
for nSn I&.TSS*^ ""?"
will b. tliai to carry oSt»ctivi??!f » ? Coop.r.tiv. Agre«»«nt»
.SKTi!1"" """S1" (OSWER "rectiv. ,
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OSWER DIRECTIVE 9650.10
VIII. STATE UST PROGRAMS AND COOPERATIVE AGREEMENTS
A. State Capabilities
Policy
The legislation establishing the UST Trust Fund requires that
in order for States to participate in the program, EPA must
determine that they have "the capabilities to carry out effective
corrective action imd enforcement activities" to protect human
health and the environment (Section S003(h)(7)(A)(i)).
The State must have or obtain both the authority and
capability to carry out effective corrective action and
enforcement activities. The State must also establish corrective
action and enforcement policies and procedures that can be
applied to known or suspected releases from regulated underground
storage tanks.
Guidance
EPA Regions will evaluate State capabilities as part of the
Cooperative Agreement; negotiating process. EPA's intent is to be
flexible in its determination of capability. States must certify
that they have the authority to carry out enforcement activities,
corrective actions, and cost recovery or provide a schedule and
plans for obtaining the necessary authority. However, a State
does not have to have authority to conduct all the activities of
the LUST Trust Fund Program in order to receive a Cooperative
Agreement. A State can receive a Cooperative Agreement if it
certifies that it has authority to conduct the activities
committed to in the work plan.
The Regions will evaluate the States' existing or potential
capabilities in these and other relevant areas. Given the widely
varying level of development of State UST cleanup programs, the
capabilities that will be expected immediately versus those that .
can be developed over time will vary from State to State.
Enforcement:
To demonstrate its enforcement capabilities, the State should
describe its existing capabilities in this area, or a plan for
obtaining such capabilities in the Cooperative Agreement. The
description should include, at a minimum, identification of
existing or potential staff capabilities, technical as well as
legal, to pursue enforcement activities, and that staff's
previous experience in UST-related enforcement activities, as
well as ownership of or access to necessary equipment or
facilities.
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OSWER DIRECTIVE 9650.10
The Stat« should have a set of clearly defined enforcement
policies and procedures for addressing releases fro petroleua
OSTs, or a plan for developing such policies and procedures. The
policy and procedures should reflect the underlying philosophy of
the Trust Fund to first seek corrective action by the
responsible party, unless there is an imminent and substantial
endangerment of human health and the environment. EPA will
consider items such as proper identification of releases and
responsible parties, proper documentation of enforcement actions,
and timely and appropriate enforcement activity, in evaluating
the State's enforcement policy and procedures.
The State may use its best professional judgment and
enforcement discretion as long as they result in an effective
enforcement program.
Corrective Action:
The State should describe its existing corrective action
capabilities, or a plan for establishing such capabilities. The •
description should include, at a minimum, the identification of
existing or potential staff capabilities, and ownership of or
access to necessary equipment or facilities. The description
•ay include capabilities such as:
o Emergency response and hazard mitigation;
o Investigation of suspected leaks and identification of
the source;
o Comprehensive site investigations;
o Exposure assessments to determine potential health
effects;
o Provision of alternative water supplies;
o Temporary or permanent relocation of residents;
o , Development of corrective action plans; and
«
o Site* cleanup, including removal, treatment, and
disposal of surface and subsurface cor.*:*mination.
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OSWER DIRECTIVE 9650.10
Corrective actions are often carried out by contractors, at
the direction of th« State. As part of its capability
discussion, where applicable, the State should describe its plan
for securing the services of such contracting firms. This plan
should include types of activities, estimated funding, and time
frame for obtaining contractor services.
The State should describe its corrective action policies and
procedures, or plan«, with milestones, for developing such
policies and procedures. This aay include such items as a
generic response plan or decision-asking framework for
corrective action, criteria for provision of alternative water
supplies or relocation of residents, exposure assessment
procedures, procedures for evaluation and selection of remedies,
and any cleanup standards that the State may wish to impose. The
State's corrective action policy should consider the
relationship between corrective actions that may be taken and the
need to protect human health and the environment.
Cost Recovery:
See Appendix A — Cost Recovery Policy for the Leaking
Underground Storage Tank Trust Fund.
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OSWER DIRECTIVE 9650.10
VIII. STATE UST PROGRAMS AND COOPERATIVE AGREEMENTS
B. State Certification of Authority
Policy
There are three ways that a State can certify that it has
legal authority to carry out the activities committed to in the
work plan. First, the State can certify that it has specific
authorities similar to Section 9003 (h) of RCRA. Secondly, the
Stat* can certify that it has general state law authority
sufficient to carry out the work plan activities, (e-o. /
authority to protect public health, to protect the environment,
or to protect any State interest). Thirdly, the State can
certify that it will use the authorities in RCRA Section 9003 (h)
to perform and require corrective action and Section
9003 (h) (6) (A) to perform cost recovery, in making this type of
certification, the State must assure that use of the RCRA
authorities will not conflict with State law.
guidance
In view of the State's expertise in interpreting State lav.
EPA's role in review of the certification is not to "second
guess" a State interpretation of state law but rather only to
assure that major legal issues have not been overlooked.
The attorney general, or someone designated by the attorney
general, should either sign or concur in the certification*.
preferably before the Cooperative Agreement is awarded. If a
signature or concurrence would significantly delay the awarding
of the Cooperative Agreement (i.e.. there are no other issues
holding up the award), it is acceptable for someone other than
the AG/designee to sign the certification. in this case, the
agreement must contain a special condition requiring subuission
of the AG/designee«s concurrence to EPA within a reasonable time,
not to exceed 120 days after the award of the agreement. The
person who signs at the time of award could be: 1) the head or
general counsel of the State environmental agency; 2) the head of
the division within the environmental agency that has direct
responsibility for administering the program; 3) the head of any
separate, entity that may be responsible for administering the
program, such as the director of the State water control board.
* The assumption is that the Attorney General is the ultimate
interpreter of State law in the executive branch of the State.
In at least one State, however, the Attorney General is primarily
responsible for litigation, while there is also a General Counsel
to the Governor, who has responsibility for advising all
executive branch agencies on the scope of their authority, in
this situation, the State General Counsel could substitute for
the Attorney General.
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OSWER DIRECTIVE 9650.10
+v if concurr«nc« of the AG/designee is not obtained within
S, J 5" »P«cifi«d in the Cooperative Agreement, payments of
Trust Fund .on.y »ay be withheld, consiltent with the
requirement* of 40 CFR Part 31.
•u«£«.f JIS! !-°Uld notify EPA Proaptly of any reduction in its
authorities (e.g., nuccessful challenge to its State statutory
authority) that aay significantly inhibit its ability
coauni"«d to A« the Cooperative
VIII-5
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OSWER DIRECTIVE 9650.10
VIII. STATE UST PROGRAMS AND COOPERATIVE AGREEMENTS
C. State Program Work Plan
States are to submit a program work elan to EPA uH4/-h t±
co^c?ivf ^th the leVel °f -"•IwSi °f ?hf £ta£'s* iS
K f ? f ? action program for petroleum UST«. The work plan
shall include a budget and a description of proposed Ict?v?"
St??C^.Sv'Tl^1"h€d WlJh 'rust JuSrSSniis^rlng
^.for:^^^^
^tp?Sv A Pr?P°"d schedule for acco»pM.£iSg .IS Ict
should be included. Activities aay include, but are not
to those mentioned in the following sections.
1« Core Program
Where certain basic program items do not currently exist
may provide for xist'
o
o
o
Develop a system for assigning priorities to sites?
Establish enforcement policies and procedures;
Secure contractor services to perform corrective
o
o
Establish cost recovery policies and procedures;
Establish a site-by-site tracking system for
activities, decisions, and site-specific costs;
o Develop public participation procedures; and
. o Develop quality assurance practices.
2- Site-Spec!fj?
The Cooperative Agreement should include a description of and
as!°!iajcd budget for thos« activities that States San tS
undertake at sites. It may include an estimate of thJ nu2ber of
sites at which the State intends to -i.durtake the varioSs
,and/0r "•ntlfic.tiS? o? SSiviSuS'sites at
^ C0ntefflplated' E-»Ple« of site-specific
Emergency response;
VIll-6
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OSWER DIRECTIVE 9650.10
o Sourc* identification;
o Site investigation;
o Exposure Assessment;
o Soil and ground-water remediation;
o Provision of alternate water supplies;
o Resident relocation (temporary or permanent);
o Treatment, storage, and/or disposal of wastes and
recovered materials; and
o Oversight of cleanups, including those performed by
responsible parties.
VIII-7
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OSWER DIRECTIVE 9650.10
VIII. STATE UST PROGRAMS AMD COOPERATIVE AGREEMENTS
D. Federal Oversight - Program Appraisal Strategy
Federal Oversight
EPA will oversee State programs, both formally and
informally, in order to:
o Ensure adequate environmental protection through sound
adninistration and use of the Trust Fund;
o Enhance State capabilities through effective
communication, evaluation, and support; and
o Describe and analyze the progress of programs on a
regional and national scale.
EPA's Regi-. il staff will have the primary respor:. .bility for
oversight of State programs. Regions and States should maintain
a continuous dialogue so that States can communicate problems
encountered in meeting their commitments and Regions can be'
responsive to State needs.
The Regions will formally review state programs at least once
a year. They will rely on required reports, State records, and
visits to the States to identify the successes and problems
encountered in State programs. Formal program reviews should
focus on overall performance rather than individual actions. To
the greatest 'possible extent, reviews should be based on
objective measures, standards, and expectations that are agreed
to in advance in the Cooperative Agreement.
Effective oversight entails the joint analysis of identified
problems to determine their nature, causes, and appropriate
solutions. It also requires that the Regions identify and
facilitate the; transfer of successful approaches to other States
and Regions. Finally, information and insights gathered in
oversight activities should be used to refine subsequent
Cooperative Agreements.
VIII-8
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OSWER DIRECTIVE 9650.10
Program Appraisal Strategy
^••^^•^^•^•^"•"•"^^^^^••^^•^^•^•^^•^^i^i^^fc^^W^l^fcH^l^fci^iW^™^*^^^* -.,..
In FY 89, EPA will begin to implement a formal program
appraisal system. The program appraisals will focus on balancing
oversight of Stato UST programs with service to the State's
needs. Guidance on the appraisal process is contained in the
OSWER directive 9610.6, The OUST Program Appraisal Strategy. The
types of reports that will continue to be part of EPA's appraisal
process are summarized below.
1) Quarterly Progress Report 11, including:
a) Exception Reports;
b) Trust Fund Usage Forecasts; and
c) Financial Reports.
In quarterly progress reports for State Cooperative
Agreements, EPA is requesting that each State submit data
on activities that are supported by Trust Fund monies as
well as comparable information on the accomplishments of
the State's program as "a whole. Exhibit 1 lists the
data elements that are contained in the FY 89 quarterly
progress reports. The required forms and instruction for'-'
the quarterly progress reports are issued separately from
these guidelines, and will be updated and revised as
necessary in the future.
All States should report in a timely and accurate fashion the
data needed for the quarterly activities report and the
Strategic Planning and Management System (SPMS) report for
the EPA UST program. Regions will need to relay this data to
OUST/HQ within 10 working days of the end of each Federal
fiscal quarter. Regions and States may develop reporting
schedules that allo%r them to meet these deadlines.
2} Financial Status Report SF 269 or 269A (year end), and
Federal Cash Transactions Report SF 272 (quarterly).
The Office of the Comptroller is responsible for issuing
Agency financial policies and procedures for tracking the
LUST Trust Fund in the Agency's Financial Management System
(FMS). State UST Programs will be required to comply with .
the Comptroller's interim financial policies and directives
for the LUST Trust Fund (where they do not conflict with
these guidelines), until such time as the State and EPA agree
to implement the provisions of the Leaking Underground
Storage Tank Trust Fund State Financial Management Handbook.
scheduled for publication in January 1989. OUST will be
coordinating its program appraisals with the Comptroller's
fiscal review procedures as they are developed for FY 89.
, VIII-9
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OSWER DIRECTIVE 9650.10
Exhibit 1
FY 89 ACTIVITIES REPORTING REQUIREMENTS FOR U.S. EPA OFFICE OF
UNDERGROUND STORAGE TANKS
1. Number of Site Investigations Completed
2. Number of Emergency Responses Taken
3. Number of Sites Where Enforcement Actions Taken to Coapel
Cleanup
4. Number of Sites Where Cost Recovery Initiated
5. Site Cleanups for Petroleum Releases—Initiated
a. Responsible Party-lead
b. State-lead with Trust Fund money
c. State-lead with no Trust Fund money
6. Sites With Petroleum Releases—Under Control
a. Responsible Party-lead
b. State-lead with Trust Fund money
c. State-lead with no Trust Fund money
7. Site Cleanups for Petroleum Releases—Completed
a. Responsible Party-lead
b. State-lead with Trust Fun- money
c. State-lead with no Trust Fund money
8. Exceptions Report (Identify by site where:)
a. State plans to use innovative or experimental
technology at the. site
b. State plans to provide permanent alternative water
supply
c. State plans to permanently relocate residents
9* Forecasting Trust Fund Use;
Number of Sites with Confirmed Releases Where:
a. Owner/Operator has been identified
b. Owner/Operator is insolvent/incapable of conducting
timely clean-up
c. Responsible Party search not completed
d. Search for Responsible Party unsuccessful
VIII-10
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OSWER DIRECTIVE 9650.10
EXHIBIT 1 (cont'd)
FY 89 ACTIVITIES REPORTING REQUIREMENTS FOR U.S. EPA OFFICE OF
UNDERGROUND STORAGE TANKS
10. Financial Report
a. State plans to spend over $100,000 of Trust Fund aoney
at site; include amount
b. State hail obligated ovar $100,000 of Trust Fund money
at a situ? ineluda amount
e. Stata actually spent ovar $100,000 of Trust Fund money
at a sit<»; include amount
d. For any site, State reached a cost recovery settlement;
include amount
e. For any iiite, cumulative cost recovery payments
received? include amount
f. Optional: Aggregate State dollars outlayed for site
responses
VIII-ll
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OSWER DIRECTIVE 9650.10
LUST TRUST FUND
COOPERATIVE AGREEMENT GUIDELINES
APPENDIX A
Cost Recovery Policy for
the Leaking Underground Storage Tank Trust Fund
(OSWER Directive 9610.10)
A-l
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OSWER DIRECTIVE 9650.10
31.20 Provides that States expend and account for grant funds
in accordance with State laws and procedures for
expending and accounting for its own funds;
31.21 Discusses methods of making payments to recipients;
31.22 Discusses applicable cost principles and limitations on
use of Federal funds;
31.23 Discusses period of allowibility of funds;
31.24 Discusses State match and cost sharing provisions;
31.25 Discusses use of program income (this section is
particularly relevant to cost recoveries of Trust Fund
expenditures);
31.32 Specifies that a State will use, manage, and dispose of
equipment in accordance with State laws and procedures;
31.36 Specifies that for procurement, a State will follow the
same policies and procedures it uses for procurements
from its non-Federal funds;
31.40 Details grantees responsibility to monitor grant and
subgrant supported activities and report program
performance;
31.41 Provides basic requirements for financial reports.
Reports may be required re more frequently than
quarterly, per OMB Circular. Standard forms for
Financial Status Reports (SF-269 or FF-: A) must be
submitted to EPA within 90 days after the end of the
budget period. Fina.? reports are due 90 days after the
expiration or termination of the Cooperative Agreement;
and
31.45 Discusses Quality Assurance requirements.
D. 3£BARKENT AND SUSPENSION UNDER SPA ASSISTANCE PROGRAMS -
40 CFR PART 32
Provides rules for suspension and debarment of contractors
from utilization under EPA assistance programs (also direct
procurement). If a contractor is suspended or debarred, he may
not participate in an EPA assistance program. EPA*s Grants
Administration Division maintains a list of such contractors.
XII-2
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OSWER DIRECTIVE 9650.10 *
F0* STATE COOPERATIVE AGREEMENT
sumj?ari«« th« basic administrative
The
A* JJondiscrimination in EPA Assistance Programs - 40 CFR
B. Intergovernmental Review - 40 CFR Part 29;
C. Uniform Administrative Requirements for Grants and
to stat« d
EPA Assistance Program -
n *£*? foll°ws Prides a brief description of the
contained in each of the above regulations that are
iti^t0 TrUSS FUnd Co°Pe«tive Agreem^i?s. ?cr "'
additional guidance and a comprehensive review of EPA's
administrative requirements fSr assistance under a Cooperative
tSJJilSh 2r2r S°^PAiS Assistance Ad»ini.trlfiw MaSuIJ
(available through the EPA Grants Administration Division) .
A. NONDISCRIMINATION IN EPA ASSISTANCE PROGRAMS - 40 CFR PART 7
Prohibits discrimination based on race, color sex or
handicap. Requires applicants to submit an assSrin" of non-
f«^mi?ati°?,
-------
•s.
OSWER DIRECTIVE 9650.10
XI. STATE'S QUALITY ASSURANCE PROGRAM '
Polic
will develop and implement quality assurance
, acco£danc« with EPA,8 Uniforn Administrative
ents for Grants and Cooperative Agreements, 40 CFR Part
Ih!, r«*ulation requires* the development and
^8^ assuranctt Praetices that will "produce
ni.i ***?**** *f *•** Py°3«ct objectives and tS
SalfunctioS! " out-of-control conditions or
Guidance
The purpose of a quality assurance (QA) program is to ensure
that procedures for data collection and anal?silare appre^iat!
for the uses of that data, and, in particular, for appropriate
environmentally related measurements, to provide data that are
e'=efenSib1' Md
Because the underground storage tank program deals with a.
d«±?anCa ^ejfoleuffl)' quality assurance procedures an5
222?f 2 JJ JS nor5aUy should not *™* to be as extensive or as
complex as those for a program where the pollutants can be of
SS.SE**' °ften injLtiallv unknown. In the vaSS Ljori£ of
ScJ ?i0ns' asJ?PP°se
-------
OSWER DIRECTIVE 9650.10
_,At » ?lninumJ *** State's public participation policy must
reflect the requirements of 40 CFR Part 280.67. For each
confirmed release that requires a Corrective Action Plan (as
directed by the state), the State must notify the public and
provide access to site release information. The State must also
provide public notice if implementation of the Corrective Action
Plan does not achieve the established cleanup levels and the
State is considering terminating the plan.
X-2
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OSWER DIRECTIVE 9650.10
X. PUBLIC PARTICIPATION
Polic
J004
-------
OSWER DIRECTIVE 9650.10 *
IX. CORRECTIVE ACTION
C. State** Priority.System for Addressing UST Releases
Policy
TT*™ Th! S?at" vil1 ensur« that a priority system for addressing
UST petroleum release sites is established and maintained which
incorporates the two priorities set forth in Section 9003 (h) of
RCRA. These priorities ares
o releases which pose the greatest threat to human health
and the environment; and
o sites where the State cannot identify a solvent owner
or operator of the tank who will undertake action
properly.
The Cooperative Agreement will include a description of this
system or a schedule, with milestones, for developing one.
guidance
The purpose of the State priority system requirement is to
ensure that sites addressed with Trust Fund monies provide the
greatest impact on protection of human health and the environment
and respond where private sector resources are inadequate. The
system does not have to be extensive, complex or numerical in
na!:ur?; Instead, it can use readily available information to
establish broad, general classes of priority. States may address
the "threat to human health and environment" criteria by
considering factors such as total population exp.-c-:., proportion
of the population affected in a community, number of drinking
water wells contaminated, prox:>ii-y to a major aquifer, and
impact on sensitive populations or environmental areas. States
also should develop methods for establishing capability and
solvency of owner/operators.
This requirement does not necessarily presume the need to
rank all UST releases in the State. Rather, it is a priority
syatam or scheme that should be used as a screening device to
assure that sites considered to be addressed with Trust Fund
monies are within the higher priority classes established by the
State*
IX-4
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/ OSWER DIRECTIVE 9650.10
Obtaining Approval For Federal Response:
r« /S*?P€Cifi*d J" th* °SWER Directive 9360.0-16A, Guidance
Conducting Federal-Lead Underground Storage TanV gorr^v*
Fedjral «ST correctiv; actions that initially cost over
increases that bring the cost of an action
'i °f th* A"i*tant Administrator
and Emergency Response (OSWER) . The
Offlc* of ^^nSy and Remediil
?PProv« Action, that initially cost up to
inc"«««« «»«t bring th« cost of an action
- ^ jfcjk T * — »^w w*w v w«» «»««^p «»4*w vWV to v* €14
- *° $250,000, with concurrence from the OD, Office of
Underground Storage Tanks (OUST). In addition, Regional
Administrators (RAs) may approve actions costing up to $50,000 in
* 4*$^"°*2*™y li^«-tihreatening situations where response must
initiated before Headquarters can be contacted. This
V***W 4 ••*» ^ m«« W ^. ^_ ^ -• _ * ^ m t _• • . . •••••»•
Directors and On-Scene
Depending upon the nature of the emergency that exists
response time requirements, and other relevant circumstSnws,
;iS!r a/?faal written approval process or an oral proem (with
written follow-up) should be implemented. Headquarters approval
must be obtained prior to initiating corrective action whenever
possible. No Federal-lead corrective action will be Spprl^d
unless an appropriate request is received from the state
IX-3
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COKKKCTIVZ ACTIOH
stor,g.
PUblio
th« s-.it. is unablo to respond; and
an
substantial
h
chain exposure to
threat of fir. or
«» «anti.l threat
°r poses
1X-2
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