oEPA
United States
Environmental Protection
Agency
Office of
Solid Waste and
Emergency Response
DIRECTIVE NUMBER: 9650.6-1
TITLE'Supplemental Requirements for LUST Trust
"•Cooperative Agreements
APPROVAL DATE:
EFFECTIVE DATE:
07/27/87
07/27/87
ORIGINATING OFFICE: Office of Underground Storage
Tanks (OUST)
0 FINAL
D DRAFT
STATUS:
REFERENCE (other documents):
OSWER Directive 9560.6 - Guidelines for UST Trust Fund
Cooperative Agreements
OSWER OSWER OSWER
VE DIRECTIVE DIRECTIVE Dl
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United States Environmental Protection Agency
Washington, DC 20460
OSWER Directive Initiation Request
1. Directive Number
9650.6-1
2. Originator Information
Name of Contact Person
J. Heffelfineer/C. Mooar
Mail Code
WH-562A
Office
OUST
Telephone Code
382-2199/382-7970
3. Title
Supplemental Requirements for Initial LUST Trust Fund Cooperative Agreements
4. Summary of Directive (include brief statement of purpose)
This directive provides supplemental information necessary for State/EPA negotiation
of initial cooperative agreements under the LUST Trust Fund.
5. Keywords
Cooperative Agreements, States, Regional Offices
6a. Does This Directive Supersede Previous Directive(s)? \~%~\
b. Does It Supplement Previous Directive(s)?
No
No
What directive (number, title)
Yes What directive (number, tiM, 2650.1 ,
Guidelines for UST Trust Fund
Cooperative Agreements
7. Draft Level
A - Signed by AA/DAA
B - Signed by Office Director
C - For Review & Comment
D - In Development
8. Document to be distributed to States by Headquarters?
Yes
X
No
This Request Meets OSWER Directives System Format Standards.
9. Signature of Lead Office Directives Coordinator
Betty^R. Arnold, Program Analyst, OUST s~-Zj'fl£~ <^& tfA^^Jw
* ^ 1 *7 ^ ^i-t^txvt^" ^ fff f O'L' fc^t**?^A_-*\
10. Name and\fitle of AJbproviMj Official
J. Win sl&^klrt^rH!'1'' Assistant Administrator,
y
OSWER
Date
/ /
/*/£"// 8"?
Date / /
EPA Form 1315-| *) (Rev. 5-87) Previous editions are obsolete.
OSWER OSWER OSWER O
DIRECTIVE DIRECTIVE DIRECTIVE
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
JUL 27 iS37
OFFICE OF
SOLID WASTE AND EMERGENCY RESPONSE
MEMORANDUM
SUBJECT: Supplemental Requirements for LUST Trust Fund
Cooperative Agreements
FROM: Ronald Brand, Director
Office of Underground Storage Tanks
TO: Waste Management Division Directors
Regions I - III, V - X
Water Management Division Director, Region IV
Attached Is a supplemental OSWER Directive for negotiating
LUST Trust Fund Cooperative Agreements. The directive establishes
specific requirements for State accounting systems, financial
reporting, and cost recovery that reflect the requirements set
forth in the July 2, 1987 memorandum, "Reporting and Recordkeeping
for LUST Cooperative Agreements," issued by the Office of the
Comptroller and the Grants Administration Division.
Please make sure that your staff in the UST program has
communicated these requirements to each State seeking coopera-
tive agreements under the LUST Trust Fund. Regional UST staff
should also coordinate with their financial management and
grants administration counterparts to ensure that these require-
ments are addressed in each State cooperative agreement.
If you'have any questions concerning the directive, please
contact Charles Mooar at (FTS) 382-7970.
Attachment
cc: Assistant Administrator for Administration
and Resource Managment
Assistant Regional Administrators for Planning
and Management
UST Coordinators
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OSWER DIRECTIVE 9650.6-1
PURPOSE
This memorandum provides additional direction for Regional
use in negotiating the initial Leaking Underground Storage Tank (LUST)
Trust Fund Cooperative Agreements with States, and supplements
the "Guidelines for UST Trust Fund Cooperative Agreements," OSWER
Directive 9650.6, effective April 2, 1987. This directive clarifies
and specifies State recordkeeping, accounting requirements, cost
documentation and reporting requirements that will be needed to
ensure sound administration and use of the LUST Trust Fund, and to
provide for effective communication, oversight and program support
between the Regions and the States.
STATE ACCOUNTING SYSTEMS
Requi rements
OSWER Directive 9650.6 required that States adhere to general
recordkeeping requirements of 40 CFR Part 30, and specifically that
States must develop a plan for site-specific accounting of Trust
Fund expenditures. Directive 9650.6 further stated that the
States implement that plan as expeditiously as possible.
This directive clarifies those requirements to specify that
States must maintain a financial management system (as required
by 40 CFR 30.510) capable of organizing and recording expenditures
for corrective actions and enforcement activities on a
site-specific basis. Prior to making expenditures of Trust Fund
monies for site-specific activities, a financial management system
must be in place to record such costs on a site-specific basis.
All costs that can be allocated to a particular site, including
contractor costs, should be charged accordingly.
In developing and operating State accounting systems, the
State shall maintain cost documentation and other appropriate
records to support any future cost recovery efforts. The State
shall adhere> to the principles of documentation and record retention
described in the manual State Participation in the Superfund
Program, OSWER Directive 9375.1 -4u, "Cost Documentation Requirements
for Superfund Cooperative Agreements." As specified in OSWER
Directive 9650.6 for Trust Fund Cooperative Agreements, State
accounting data and records shall be available to the Federal
government, as needed, on a case-by-case basis to support program
and fiscal reviews.
For any award made after August 15, 1987, the requirements
specified above shall be addressed in cooperative agreements
through the use of the specific language contained in paragraphs
1, 2, and 4 of the attachment to this directive. Awards made
before August 15, 1987 need not contain the verbatim language,
but must assure the substance of the requirements specified
above.
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OSWER DIRECTIVE 9650.6-1
FINANCIAL REPORTING REQUIREMENTS
Requi rements
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).
Comptroller Policy Announcement 87-13 contains policies and
procedures for establishing appropriate LUST Trust Fund accounts
in FMS. With respect to State Cooperative Agreements, the
announcement specifies account structures and activity codes to
be used by Regions and States, and describes the manner in which
State expenditures, by activity, will be reported through Letter
of Credit drawdown procedures.
OSWER Directive 9650.6 calls for separate quarterly progress
reports, including Trust Fund expenditures by type of State
activity. Under the financial reporting requirements specified
in the Comptroller Policy Announcement 87-13, a State will report
on its use of Trust Fund monies under three major activity codes
when it makes a request for funds (Letter of Credit drawdown).
Under the Comptroller's policy, all financial transactions
and financial reporting between EPA and the States with LUST
Trust Fund Cooperative Agreements will be carried in FMS through
the use of appropriate account codes. To support adequate tracking
of financial transactions by the Office of the Comptroller,
States shall submit annual Financial Status Reports (SF-269) and
quarterly Federal Cash Transaction Reports (SF-272), in accordance
with 40 CFR Part 30 and OMB Circular A-102.
Regional UST Coordinators shall work with each State to
ensure the proper allocation of LUST Trust Fund expenditures to
the three activity codes identified in the Comptroller announcement:
"7" - General Support and Management, "E" - Site Cleanup Actions,
and "4" - Enforcement.
In addition to the exception reporting required by OSWER
Directive 9650.6 for named sites with planned expenditures greater
than $100,000, States shall also identify through quarterly
reports the sites where LUST Trust Fund expenditures have actually
exceeded $100,000, and shall report the amounts of such expenditures
For any award made after August 15, 1987, the requirements
specified above shall be addressed in cooperative agreements
through the use of the specific language contained in paragraphs
5 and 6 of the attachment to this directive. Awards made before
August 15, 1987 need not contain the verbatim language, but must
assure the substance of the requirements specified above.
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OSWER DIRECTIVE 9650.6-1
COST RECOVERY
Requi rements
As specified in OSWER Directive 9650.6, States must have or
obtain the authority and capability to recover costs from liable
owners and operators. It is the responsibility of the State under
each cooperative agreement to pursue recovery of LUST Trust Fund
costs from liable owner/operators on behalf of the LUST Trust Fund.
Where States have appropriate authorities and capabilities
to collect response expenditures on behalf of the LUST Trust
Fund , the State shal1:
(1) make a reasonable effort to recover costs from liable
owners and operators;
(2) report within 30 days on any amounts received from an
owner/operator, or agreed or adjudged to be owed by the
owner/operator, as a recovered cost of site cleanup;
(3) promptly return recovered funds (or an equivalent amount)
to EPA for deposit to the LUST Trust Fund, to the extent
that the State is successful in recovering costs.
If a State lacks authorities and capabilities to collect response
expenditures on behalf of the LUST Trust Fund (i.e., the authority
to recover such costs from liable owners/operators and return such
monies to EPA for deposit to the LUST Trust Fund), the State shall
agree to obtain such authorities and capabilities by the end of
the next legislative session after the execution of the initial
Cooperative Agreement. (The States understands that EPA may
decline to enter into a subsequent Cooperative Agreement if such
capabilities and authorities are not obtained.) The State shall
also agree to delay taking cost recovery action under a Cooperative
Agreement until such authorities or capabilities have been obtained.
After a State obtains authorities and capabilities to collect re-
sponse expenditures on behalf of the LUST Trust Fund, the State shall
adhere to the three requirements specified above, including notifi-
cation of recovery settlements and prompt return of recovered funds.
Once a State cost recovery action has been reported, the
Regional UST Coordinator and Regional Financial Management Officers
shall ensure that appropriate accounts are developed to track
adequately the proper payment of such recoveries to the LUST
Trust Fund.
For any award made after August 15, 1987, the requirements for
cost recovery specified above shall be addressed in cooperative
agreements through the use of the specific language contained in
paragraph 3 of the attachment to this directive. "Insert 1" may
be used where States have appropriate authorities and capabilities,
while "Insert 2" may be used where such authorities and capabilities
still need to be developed. Awards made before August 15, 1987
need not contain the verbatim language, but must assure the
substance of the requirements specified above.
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Attachment
REQUIREMENTS FOR INCLUSION
IN LUST STATE COOPERATIVE AGREEMENTS
1. State agrees to maintain a financial cost accounting system
which meets the requirements of 40 CFR 30.510.
2. State agrees to organize and maintain site-specific infor-
mation on activities and costs where Trust Fund monies are
used. Prior to making expenditures of Trust Fund monies for
corrective and enforcement actions, a system must be in place
to record these types of costs on a site-specific basis.
All other costs that can be identified to a particular site
should be charged accordingly. State contractors must bill
costs on a site-specific basis, including corrective action
costs, enforcement costs and to the extent possible manage-
ment costs.
3. The State acknowledges that expenditures from the LUST Trust
Fund covering the cost of corrective or enforcement action
constitute a liability of the owner/operator to the United
States. (Insert 1 or 2 below)
> J
(INSERT 1, for States which have authority to collect response
expenditures on' behalf of the LUST Trust Fund)~
The State therefore agrees:
a) That it will make reasonable efforts to recover these
costs from liable owner/operators. In making .such efforts,
States may consider equitable factors to the extent pro-
vided in section 9003(h)(6)(B) and section 9003(h)(ll) of
the Solid Waste Disposal Act, as amended;
b) That it will report within 30 days on any amounts received
from,the owner/operator, or agreed or adjudged to be owed
.by the owner/operator, as a recovered cost of site
clean-up; and
c) That to the extent the State is successful in recovering
these costs, it will promptly return recovered funds (or
an equivalent amount) to EPA for deposit in the LUST
Trust Fund.
(INSERT 2, for States lacking authority to collect response
expenditures on behalf of the LUST Trust FundT
The State therefore agrees that to the extent the State
lacks the authority or procedure to collect response expendi-
tures on behalf of the LUST Trust Fund (i.e., the authority
to recover such costs from owner/operators and return such
monies to EPA for deposit to the Trust Fund), the State .
will:
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a) Obtain such authority or procedure by the end of the next
legislative session after the execution of this Agreement.
(The State understands that if such authority and/or
procedure is not obtained, EPA may decline to enter into
subsequent Cooperative Agreements); and
b) Delay taking cost recovery action under this Cooperative
Agreement against owner/operators until such authority or
procedure is obtained.
c) Once the State obtains that authority or procedure, State
agrees:
1) That it will make reasonable efforts to recover these
costs from liable owner/operators. In making such
efforts, States may consider equitable factors to the
extent provided in section 9003(h)(6)(B) and section
9003(h)(ll) of the Solid Waste Disposal Act, as amended;
2) That it will report within 30 days on any amounts
received from the owner/operator, or agreed or adjudged
to be owed by the owner/operator, as a recovered cost
of site clean-up; and
3) That to the extent the State is successful in recovering
these costs, it will promptly return recovered funds
(or an equivalent amount) to EPA for deposit in the
LUST Trust Fund.
4. State agrees to maintain supporting documentation and appro-
priate records in support of any future cost recovery efforts.
The State shall adhere to the principles of documentation
and records retention described in the manual State Partici-
pation in the Superfund Program, OSWER Directive 9375.l-4u,
"Costs Documentation Requirements for Superfund Cooperative
Agreements," pending development of more specific guidelines
on LUST costs documentation. The State agrees to make these
records available to the Federal Government, as needed, on a
case by case basis.
5. State agrees to provide reports as outlined in the "State
Application Guidelines for Initial LUST Trust Fund Cooperative
Agreements" dated March 27, 1987. These reports consist of;
9 Quarterly progress reports;
0 Exception reporting as needed;
0 Financial Status Reports (SF-269); and
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The State further agrees to provide quarterly reports as
follows:
0 Federal Cash Transactions Report (SF-272)
9 All individual sites and their amounts where Trust Fund
dollars in excess of $100,000 have been expended.
State agrees to identify Letter of Credit drawdowns under
EPA's three major activity codes. The three codes are
"7" General Support and Management, "E" - Site Cleanup
Actions, and "4" - Enforcement. Procedures supplementing
the EPA Letter of Credit Recipients Manual will be provided
to clarify how the State requests funds under the activity
codes.
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ATTACHMENT 9
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OSWHS Direct a ve Suooieiftersted
Succ< I emerit e-d DV >i ^
CS St!
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