United States
          Environmental Protection
          Agency    '  <
            Office of
            Solid Waste and
            Ernergency Response
 &EPA
                 *

DIRECTIVE NUMBER: 984i.iA

IITLet Administrative Penalty Procedures



APPROVAL DATE:- Mav 16, 1989

EFFECTIVE DATE:  May 16, 1989

ORIGINATING OFFICE: Office of Enforcement

B FINAL

D DRAFT

 LEVEL OF DRAFT

   O~A — Signed by AA or DAA
   D B — Signed by Office Director
   DC — Review & Comment

REFERENCE (other documents):
S WER       OS WE ft      OSWER
  DIRECTIVE    DIRECTIVE   Dl

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     ' •    united States environmental Protection Agency
                 Washington. DC 20480
OSWER Directive Initiation Request
                                                                   1. Directive Numbe
                                                                       9841.1A
                                  2. Originator Information
      Name o( Contact Person
           Sandra C
                  onnors
                    ,LEl3lS      Enforcement
      3. Title
           Administrative Penalty Proce'd'ares
      4. Summary ol Directive (include bnef statement ol purpose) ~                                     , . .
           The rule provides  that the Administrative assessment of CERCLA  section 109
           penalties and EPCRA section 325 penalties will  be governed by EPA's        f
           Consolidated Rules of Practice Governing the Administrative Assessment of
           Civil Penalties  dnd by supplemental rules relating specifically to penalty
           assessments under  section 109 of CERCLA and section 325 of EPCRA.
      5. Keywords
           Civil Penalties
      ot. goes ints directive supersede Previous Uirecuveis;/,-;
      b. Does It Supplement Previous Dlrtctlve(s)?
                   , -*'/v |.  | No   (x| Yes    What directive (number, title) 9841.1
                                         Interim Guidance  on Use of
                                Dl	1      Administrative Penalty
                           No   |	I Yes    What directive (number, tltte) Provisions
                    of Section  109 of CERCLA and §325 of SARA
      7. Draft Level
          A-SlgnedbyAA/DM    f~~~l B - Signed by Office Director   [   | C-For Review & Comment   |   | D - ft Development
            8. Document to be distributed to States by Headquarters?
                                                       D
No
This Request Meets OSWER Directives System Format Standards.
9. Signature ol Lead Office Directives Coordinator
1 0. Name and Title of Approving Official
Date
Date -^
      EPA Form 1315-17 (Rev. 5-«7) Previous editions art obsdete.-
   OSWER           OSWEfi               OSWER               O
VE     DIRECTIVE          DIRECTIVE        DIRECTIVE

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                                                                                 "OSWER Directive
 21174       Federal Register / Vol. 54. No. 93  / Tuesday.  May 16. 1989 / Rules and Regulations
 ENVIRONMENTAL PROTECTION
 AGENCY

 40 CFR Part 22

 [FRL-3464-2J

 Administrative Penalty Procedures.

 AGENCY: Environmental Protection
 Agency (EPA).
 ACTION: Interim final rule       	

 SUMMARY: EPA is today promulgating an
 interim final rule establishing
 procedures for the administrative
 assessment of civil penalties under (1)
 section 109 of the Comprehensive
 Environmental Response.
 Compensation, and Liability Act
 (CERCLA), 42 U.S.C. 9601 et seq., as
 amended by the Superfund Amendments
 and Reauthorization Act (SARA) of
 1988, Pub. L Xo. 99-499. for violations of
 provisions specified in section 109 of
 CERCLA, including failing to report
•releases of hazardous substances, and
"(2) section 325 of the Emergency
 Planning and Community Right-To-
 Know Act (EPCRA). 42 U.S.C. 11001 et
 seq.. for violations of provisions
 specified in section 325 of EPCRA. The
 rule provides that the administrative
 assessment of CERCLA section 109
 penalties and EPCRA section 325
 penalties will be governed fay EPA's
 Consolidated Rules of Practice
 Governing the Administrative
 Assessment of Civil Penalties and by
 supplemental rules relating specifically
 to penalty assessments under section
 109 of CERCLA and section 325 of
 EPCRA. EPA is taking this action In
 response to amendments to CERCLA
 made by SARA, which authorize the
 President to assess administrative
 penalties for certain violations of
 CERCLA and which authorize the
 Administrator of EPA to assess
 administrative penalties for violations of
 EPCRA. The authority granted to assess
 administrative penalties was effective
 upon the date of enactment of SARA.
 which was October.17,1S36.
 DATES: Comments on this interim final
 rule must be submitted oh or before July
 17.1989. This interim final rule is
 effective on May 18.1989, and governs
 all proceedings for the administrative
 assessment of a civil penalty under
 section 109 of CERCLA or section 325 of
 EPCRA for which an administrative
 complaint is filed after May 16.1989.
 EPA will use this rule as guidance for
 conducting these proceedings prior to
 the date it becomes effective on an
 interim final basis.                  •  .
. Connors, Office of Enforcement and   .
 Compliance Monitoring, Hazardous
 Waste Division (LE-134S). Room 3219L,
 U.S. Environmental Protection Agency,
 401 M Street SW.. Washington. DC
 20460. Persons may inspect comments at
 that address.           •  •  • ••
 FOR FURTHER INFORMATION CONTACT:
 Sandra Connors, Office of Enforcement
 and Compliance Monitoring, Hazardous
 Waste Division (LE-134S). U.S. '     -
 Environmental Protection Agency, 401M
 Street SW.. Washington. DC 20460,202^-  "
 382-3110.          ;   '  -   : •    '
 SUPPLEMENTARY INFORMATION:.'..-,.

 Statutory Background        '  '.-.•-,.
  On October 17,1988, the Superfund
 Amendments and Reauthorization Act
 (SARA) of 1988, Pub. L No, 99-499. was '
 enacted. Title I of SARA amended the
 Comprehensive Environmental   " .
 Response, Compensation, and Liability
 Act of 1980 (CERCLA). 42  U.S.C. 9601 et
 seq., by revising section 109,42 U.S.C.   •'
 9609, which authorizes the President to;
 assess administrative penalties for    ;
 violations of specified provisions of -'-*, ^-
 CERCLA. Title ffl of SARA is the'H  I.;  '
Emergency Planning and Community "
Right-to-Know Act of 1988 (EPCRA).
 Section 325{b) of EPCRA, 42 U.S.C.
11045(b), authorizes the Administrator of
EPA to assess administrative penalties '
for violations of emergency notification
under section 304 of EPCRA. Section   '
325(c) of EPCRA authorizes the    ;r ;
Administrator of EPA to assess •-:•:   —
administrative penalties for reporting  .  .
violations under sections 311.312,313.   :
322 or 323 of EPCRA. Section 325(d) ofv  :
EPCRA authorizes the Administrator of
EPA to assess administrative penalties .
for frivolous trade secret claims made in
violation of section 322 of  EPCRA.
  Section 109 and section  325(b)
established two "classes" of         ,;.v-
administrative penalties, which differ  .
with respect to allowable procedure and  ;•
maximum assessment The provisions y -:
for Class I penalties allow for a       -':
maximum penalty of 525,000 per
violation and the Respondent must be /< ;
provided notice and an opportunity for.
hearing. The provisions for Class II --vj.7;
penalties authorize a maximum penalty
of $25,000 per day for each day during
which the violation continues and atf""f-'.
maximum penalty of $75,000 per day for
each day during which the violation
continues for a second or subsequent
violation and are explicitly made
subject to the requirements of the
Administrative Procedure Act (APA), 5
U.S.C. 554.558. Class  fl proceedings are
similar to administrative adjudicator/ •*
,-tm^oorJineo omMrvor} Kv  tVio Acrorirv
  which are subject to section 554 of the
  APA.
   Sections 325 (c) and (d) of EPCRA are
  silent as to the type of administrative
  hearing procedures to be employed for
  the assessment of penalties under these
  sections. Section 325(c)(l) authorizes a
  maximum penalty of 325,000 per day for
  each day during which the violation
  continues  and section 325(c)(2)
  authorizes a maximum of $10,000 per
  day for each day during which the
  violation continues. The penalties under
  section 325(c] may be assessed on a
... daily basis. Section 325(d) of EPCRA
 . authorizes a penalty of $25,000 per
- frivolous trade secret claim.
   Under section 109(a) of CERCLA. a
  Class I penalty requires only notice and
  opportunity for hearing: A Class II
  penalty under section 109(b) of CERCLA
  may be assessed by the President
  through an order issued after
  opportunity for a hearing on the record
  in accordance with section 554 of the
  Administrative Procedure Act (APA), 5
  U.S.C. 554. The authority to assess
». penalties under CERCLA section 109 has
  been delegated to EPA (see Executive
i Order 12580 of January 23,1987. 52 FR
  2923 (January 29.1987).
   Class I and Class II civil penalties
  under section 109 may be assessed for
  (1) a violation of the emergency release
  notification requirements of section 103
  (a) or (b); (2) a violation of section
 . 103(d)(2) (relating to recordkeeping); (3)
  a violation of the requirements of
  section 108. the regulations issued under
  section 108. or with any denial or
  detention order under section 108
  (relating to financial responsibility); (4)
  a violation of an order under section
  122(d){3) (relating to settlement
  agreements for action under section
  104(b)); or (5) any failure or refusal
  referred to in section 122(1) (relating to
  violations of administrative orders.
 - consent decrees, or agreements with
 : federal facilities under section 120).
   Under section 325(b)(2) of EPCRA. a
 .Class H penalty is assessed and
> collected by the Administrator in the
 .same.manner, and subject to the same
  provisions, as in the case of civil
" penalties assessed and collected under
  section 16 of the Toxic Substances
  Control Act. 15 U.S.C. 2615. Those
• penalties are assessed by an order
  issued after opportunity for a hearing on
  the record in accordance with section
  554 of the  APA. A Class I penalty under
  section 325(b)(l) of EPCRA requires only
... notice and opportunity for a hearing.
  :' "Under section 325(c)(4) of EPCRA. the
  Administrator may assess by
  administrative order any civil penalty

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 section 325{c). Under section 325(c)(l). a
 penalty of not more than S25.000 for
 each violation may be assessed for
 violations of the right-to-know reporting
 requirements under sections 312 or 313
 of EPCRA. Under section 325(c)(2), a
 penalty of not more than SlO.OOO for
 each violation may be assessed for
 violations of section 311 or 323(b)
 requirements or for failure to furnish
 information under section 322(a){2). For
 purposes of section 325(c). each day a
 violation continues constitutes a
 separate violation. Under section 325(d)
 of EPCRA, the Administrator may
 E53°ss by ad.T.ir.is'.rative order a penalty
 of $25,000 per frivolous trade secret
 claim made under section 322(d)(4).
   Both sections 109 and 325 authorize
 EPA to issue subpoenas to obtain the
 attendance and testimony of witnesses
 and the production of documents. A
 person subject to an order assessing a
 Class II penalty under section 109 may
 seek judicial review of the order with
 the appropriate United States Court of
 Appeals. A person subject to an order
 assessing a Class I penalty under
 section 109 or a penalty under section
 325 may seek judicial  review of the
 order with the appropriate United States
 District Court.  .

 Description of Final Rule
   This interim final rule applies formal
 APA hearing procedures at this time to
 all EPA administrative penalty
 authorities under CERCLA section 109
 and EPCRA section 325. The Agency is
 currently considering developing
 procedures for assessing Class I
 penalties that would be less formal than
 the Part 22 procedures and that would
 apply to penalties under section
 109(b){l) of CERCLA, section 325(b)(l)
 of EPCRA, section 325(d) of EPCRA. and
 to certain civil penalties under section
 325(c) of EPCRA.
  EPA promulgated Consolidated Rules
 of Practice Governing  the
 Administrative Assessment of Civil
 Penalties and Revocation or Suspension
 of Permits at 40 CFR Part 22. Those rules
 govern the administrative assessment of
 penalties under other statutes  . •  •
 administered by EPA subject to the
 adjudicatory hearing requirements of the
 APA or for which EPA has determined
 such procedures are appropriate. The   -"
 Consolidated Rules are designed to
 provide  a common set of procedural
 section 32o penalties by an order issued
 after opportunity for a hearing on the
 record. EPA has concluded that the
 Consolidated Rules should be followed.
 on an interim final basis, as the
 procedural framework to assess
 penalties under section 109 of CERCLA
 and section 325 of EPCRA. Accordingly.
 this interim final rule provides that the
 Consolidated Rules will govern
 adjudicatory proceedings for the
 assessment of civil administrative
. penalties under section 109 of CERCLA
 and section 325 of EPCRA.
   In addition, as part of today's
 rule.tiaking, EPA is promulgating, on an
 interim final basis, supplements to the
 Consolidated Rules which apply to
 CERCLA section 109 and EPCRA section
 325 penalty procedures. The
 supplemental rule is necessary because
 of requirements specific to provisions of
 the two statutes. The supplemental rules
 codify subpoena requirements and the
 procedures for seeking judicial review of
 penalty assessments, and describe
 certain procedures for payment and
 collection of penalties assessed.
   EPA requests comments on any of the
 above matters.
 Interim Final Rule

   EPA is issuing the rule on an interim
 final basis pursuant to 5 U.S.C. 553(b)
 (A] and (B), which allows the issuance
 of rules without prior notice and
 comment where the rules concern
 agency practice or procedure or where
 the Agency finds for good cause that .
 prior notice and comment is
 unnecessary. Both of these criteria are  •
 met by these rules. The statutes
 specifically identify the type of hearing
 to be accorded for assessment of Class
 II penalties, i.e. formal adjudications
 under section 554 of the APA. Although
 other sections are  silent as to the type of
 procedures or specifically authorize a
 less formal set of procedures, the
 Agency has elected to apply the formal
 adjudications requirements to all
 penalty actions at  this time. EPA has
 long-established regulations
 implementing section 554 hearings for
 civil penalty assessment under several
 other environmental statutes. The
 regulations, codified at 40 CFR Part 22,  :
 were promulgated after notice and
 opportunity to comment. Because the
 statute leaves little discretion with
rules for certain of EPA's administrative ^jrespect to the type of procedure to be .   .
penalty programs, in order to reduce ^ ^"afforded for Class II violations and this
paperwork, inconsistency, and the
burden on the regulated community. See
45 FR 24360 (April 9,1980).
  Under the Consolidated Rules of
Practice. EPA will assess CERCLA
section 109 penalties and EPCRA
 rule makes well-established rules
 providing full adjudicatory procedures  .
 applicable to all penalty proceedings
 under section 109 of CERCLA and
 section 325 of EPCRA. EPA believes that
 notice and comment on this rule is
 "unnecessary" under section 553 of ihe
 APA.
   Furthermore, use of the Consolida'.ed
 Rules on an interim basis will facilitate
• EPA beginning prompt implementation
 of the administrative penalty authority.
 using uniform procedures while      :
 satisfying the procedural and
 substantive requirements established by
 CERCLA and EPCRA. EPA is, however,
 making this rule "interim final" in order
 to allow an opportunity for public
 comment and a revision of the final rule
 as necessary in the future based on
 public cominents.  -.
   The interim final rule is effective- upon
 publication in the Federal Register. The
 Consolidated Rules of Practice will
 govern proceedings for the assessment
 of administrative penalties under
 section 109 of CERCLA and section 325
 of EPCRA for which a complaint is filed
 after that date. The proposed interim
 final rule will be used by EPA as
 guidance prior to that date.

 Regulatory Flexibility Act
   Pursuant to the Regulatory Flexibility
 Act, 5 U.S.C. 601 through 612, whenever
 an agency is required to publish a
 general notice of rulemaking for any
 proposed or final rule, it must prepare
 and make available for public comment.
 a regulatory flexibility analysis which
 describes the impact of the rule on small
 entities (i.e., small businesses, small
 organizations, and small governmental
 jurisdictions). The Administrator may
 certify, however, that the rule will not
 have a significant economic impact on a
 substantial number of small entities. In
 such circumstances, a regulatory
 flexibility analysis is not required.
   The expected impact of the rule on
 small entities is negligible. The rule
 codifies already existing statutory
 provisions and is procedural. Thus, it
 does hot impose additional regulatory
 requirements on small entities.
   Accordingly. I hereby certify that
 these regulations will not have a
 significant impact on a substantial
 number of small entities. These
 regulations, therefore, do not require a
 regulatory flexibility analysis.

 Executive Order Noi 12291
   Under Executive Order 12291. the
 Agency must judge whether a regulation
 is "major" and thus subject to the
 requirement to prepare a Regulatory
 Impact Analysis. The notice published
 today is not major because the rule will
 not  result in an effect on the economy of
 $100 million or more, will not result in
 increased costs or prices, will not have
 significant adverse effects on
 competition, employment, investment.

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21176       Federal Register /  Vol.  54. No. 93 / Tuesday.  May 16j"1989 / Roles  and Regulattioh?
productivity, and innovation, and will
not significantly disrupt domestic or
export markets. Therefore, the Agency
has not prepared a Regulatory Impact
Analysis under the Executive Order.
  This regulation was submitted to the
Office of Management and Budget
(OMB) for review as required by
Executive  Order No. 12291.

Paperwork Reduction Act
  These interim final rules do not
contain any information collection
requirements subject to OMB review
under the Paperwork Reduction Act of
1980 (44 U.S.C. 3501 et seq.).

List of Subjects in 40 CFR Part 22
  Administrative practice and
procedures, Environmental protection,
Extremely hazardous substances.
Hazardous chemicals. Hazardous
substances, Hazardous wastes.
Penalties, Superfund, Title III of SARA.
  Dated: May 8.1989.
William K. Reilly,
Administrator.           '
  For the reasons set out in the
preamble,  and  under authority of section
109 of the Comprehensive
Environmental Response,
Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. 9609, and section
325 of the Emergency Planning and
Community Right-To-Know Act of 1966
(EPCRA), 42 U.S.C. 11045, and Executive
Order 12530. Title 40 of the Code of
Federal Regulations is amended on an
interim basis effective on May 16,1989,
as follows:

PART 22—[AMENDED]

  1. The authority citation for Part 22 is
revised to  read as follows:
  Authority: 15 U.S.C. sec. 2615; 42 U.S£.
sees. 7545 and 7601:7 U.S.C. sees. 136(1) and
(m): 33 U.S.C. sees. 1319.1415 and 1418; 42
U.S.C. sees. 6912. 6928. and 6991[e); 42 U.S.C.
sec. 9609; 42 U.S.C. sec. 11045..
*    *    *    *     *       . _. "
  2. Section 22.01 is amended by
re vising paragraph (a)(6) and by adding
paragraphs (a)(7) and{a)(B) to read as
follows: ,

§ 22.01 Scope oi these rules.
  (a)  ' *  *
  (6) The assessment of any Class II 	
penalty under section 309(g) of the Clean
Water Act (33 U.S.C. 1319(g));
  (7) The assessment of any
administrative penalty under section 109
of the Comprehensive Environmental
Response. Compensation, and Liability
Act of 1980. as amended (42 U.S.C.
9009);
  fal Th» assescmwrt of am/
of the Emergency Planning and •  •
Community Right-To-Know Act of 1986
(EPCRA) (42 U.S.C. 11045).
*****
  3. Add a new § 22.39, to read as
follows:

§ 22.39  Supplemental rules of practice
governing the administrative assessment
of administrative penalties under section
109 of the Comprehensive Environmental
Response, Compensation, and Liability Act
of 1930, as amended.
  (a) Scope of these Supplemental rules.
These Supplemental rules of practice
shall govern, in conjunction with the
preceding Consolidated Rules of
Practice (40 CFR Part 22). administrative
proceedings for the assessment of any
civil penalty under section 109 of the
Comprehensive Environmental
Response, Compensation, and Liability
Act of 1980, as amended (42 U.S.C.
9609). Where inconsistencies exist
between these Supplemental rules and
the Consolidated Rules (§§ 22.01 through
22.32], these Supplemental rules shall
apply-                ..:...'
  (b) Subpoenas. [I] The attendance and
testimony of witnesses or the production
of relevant papers, books, and
documents may be required by
subpoena. The Presiding Officer may
grant a request for a subpoena upon a
showing of (i) the grounds and necessity
therefor, and (ii) the materiality and
relevancy of the evidence to be
adduced. Requests for the production of
documents shall describe the evidence
sought as specifically as practicable.
  (2) Subpoenas shall be served in
accordance with § 22.05(b)(l) of the
Consolidated Rules of Practice.
  (3) Witnesses summoned before the
Presiding Officer shall be paid the same
fees and mileage that are paid witnesses
in the courts of the United States. Fees
shall be paid by the party at whose
instance the witness appears. Where a
witness appears pursuant to a request
initiated by the Presiding Officer, fees
shall be paid by the Agency.
  (c) Judicialreview. Any person who
requested a hearing with respect to a
Class II civil penalty under section 109
of CERCLA and who is the recipient of a
final order assessing a civil penalty may
file a petition for judicial review of such
order with the United States Court of- '•'•'••
Appeals for the District of Columbia or
for any other circuit in which such
person resides or transacts business.
Any person who requested a hearing
with respect to a Class I civil penalty
under section 109 of CERCLA and who
is the recipient of a final order assessing
the civil penalty may file a petition for
Judicial review of such order wfth the
States. All petitions must be filed within
30 days of the date the order making the
assessment was issued.
  (d) Payment of civil penalty assessed
Payment of civil penalties finally
assessed by the Regional Administrator
shall be made by forwarding a cashier's
check, payable to the "EPA. Hazardous
Substances Superfund," in the amount
assessed, and noting the case title and
docket number, to the appropriate
regional Superfund Lockbox Depository.
Notice of payment must be sent by
Respondent to the Hearing Clerk for
inclusion as part of the administrative
record for the proceeding in which the
civil penalty was assessed Interest on
overdue payments shall be collected
pursuant to the Debt Collection Act, 37
U.S.C.3717.
  4. Add a new § 22,40, to read as
follows:

§ 22.40 Supplemental rules of practice
governing the administrative assessment
of administrative penalties under section
325 of the Emergency Planning and
Community flight-To-Know Act of 1986
(EPCRA).
  (a) Scope of these Supplemental
Rules. These Supplemental rules of
practice shall govern, in conjunction
with the preceding Consolidated Rules
of Practice (40 CFR Part 22).
administrative proceedings for the
assessment of any civil penalty under
section 325 for violations of the
Emergency Planning and Community
Right-To-Know Act of 1986 (EPCRA).
Where inconsistencies exist between
these Supplemental rules  and the
Consolidated Rules, (§§ 22,01 through
22.32) these Supplemental rules shall
apply.
  (b) Subpoenas. (1) The attendance and
testimony of witnesses or the production
of relevant papers, books, and
documents may be required by
subpoena. The Presiding Officer may
grant a request for a subpoena upon a
showing of (i) the grounds and necessity
therefore, and (ii) the materiality and
relevancy of the evidence to be
adduced. Requests for the production of
documents shall describe the evidence
sought as specifically as practicable.
  (2) Subpoenas shall be served in
accordance with § 22.05(b]T.lJ of the
Consolidated Rules of Practice.
  (3) Witnesses summoned before the
Presiding Officer shall be paid the same
fees and mileage that are paid witnesses
in the courts of the United States. Fees
shall be paid by the party at whose
instance the'witness appears. Where a
witness appears pursuant to request
 initiated by the Presiding Officer, fees

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            _Federal  Register / Vol. 54. No. 93 / Tuesday. May 15.  1939 / Rules and Regulations
                                                                       21177
  (c) Judicial review. Any person
against whom a civil penalty is assessed
may seek judicial review in the
appropriate district court of the United
States by Tiling a notice of appeal and
by simultaneously sending a copy of
such notice by certified mail to the
Administrator. The notice must be filed
within 30 days of the date the order
making such assessment was issued.
The Administrator shall promptly file in
such court a certified copy of the record
upon which such violation was found or
such penalty imposed.
  (d) Procedures for collection of civil
penalty. If any person fails to pay an
assessment of a civil penalty after it has
become a final and unappealable order
or after the appropriate court has
entered final judgment in favor of the
United States, the Administrator may
request the Attorney General of the
United States to institute a civil  action
in an appropriate district court of the
United States to collect the penalty, and
such court shall have jurisdiction to hear
and decide any such action. In hearing
such action, the court shall have
authority to review the violation and the
assessment of the civil penalty on the
record. Interest on overdue payments
shall be collected pursuant to the Debt
Collection Act, 37 U.S.C. 3717.
[F'R Doc. 89-11703 Filed 5-15-89: 8:45 am)
BILLING COSE 6550-50-tl

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