oEPA
              United States
              Environmental Protection
              Agency
Office of
Solid Waste and
Emergency Response
                DIRECTIVE NUMBER: 9831.l-a

                TITLE:  DRAFT ADDENDUM TO JANUARY 17, 1986
                     GUIDANCE, CERCLA FUNDING OF STATE
                     OVERSIGHT OF POTENTIALLY RESPONSIBLE
                     PARTIES (PRPs)
                APPROVAL DATE:

                EFFECTIVE DATE:

                ORIGINATING OFFICE:

                E FINAL

                D DRAFT

                 STATUS:
                REFERENCE (other documents):
     MARCH 26, 1986

     MARCH 26, 1986

    OWPE
  OSWER     OSWER      OSWER
VE   DIRECTIVE   DIRECTIVE   Dl

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3EPA

Washington, OC 20460
OSWER Directive Initiation Reauest

Interim Directive Number
9831.1 -fl
Originator Information
Name of Contact Person
Anthony Diecidue
Lead Office . _T~l
D OERR 0
D OSW Q
OUST
OWPE
AA-OSWER

Mail Code Telephone-Number
WH-527 382-afldl
Approved for Review
SignatuflB^f Office Direction* /
MS. /£^/
Date
£-y><&-
Title
      Draft  Addendum to  January 17,  1986  Guidance, CEBCLA  Funding of  State
      Oversight of Potentially Responsible Parties  (PRPS)
Summary of Directive
               Expands the January  17, 1986 Guidance  to include
               funding State oversight of  PRP conducted remedial
               actions and operation and maintenance.
   Key Words: addendum, guidance,  funding, oversight, PRPs
               operation, conduct,  state
Type of Directive /Manual. Policy Directive. Announcement, etc.)
               Guidance
                                                                      Status
                                                                         CH Draft
                                                                         0 Final
Does this Directive Supersede Previous Directive(s)'   |  | Yes   | jfl No   Does It Supplement Previous Directive(s)?
f "Yes" to Either Question, What Directive (number, title/
                                               9831.1
                                                        L&J New
                                                        LJ Revision
                                                       11 m       f  I
                                                                r   N<
                                                                                              Yes
Review Plan
   D AA-OSWER
   D OERR
   D OSW
                 D  OUST
                 D  OWPE
                 I	I  Regions
D OECM
D OGC
LJ OPPE
Other (Specify)
This Request Meets OSWER Directives System Format
Signature of Lead Office Directives Officer
                                                                                    Date
Signature of OSWER Directives Officer
                                                                                    Date
EPA Form 1315-17 (10-85)

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                                                 ,1   I.
                                                         OSWER # 9831. l(a)
           UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                       WASHINGTON, D.C. 20460
                           MAR 2 fi
                               C. V
                                               SOLID WASTE AND EMERGENCY RESPONSE


MEMORANDUM

SUBJECT:  Draft Addendum to January 17, 1986 Guidance, CERCLA
          Funding of Stafet~'0versight of Potentially Responsible
         /Parties (PRPs)/    X/
FROM: vT^-Tack Stanton, /"Director
          CERCLA Enforcement Division, OV7PE

TO:       Superfund Branch Chiefs, Regions I-K
          Regional Counsels, Regions I-X

     As you are aware, on February 12, 1986, the Office of General.
Counsel broadened their opinion concerning the enforcement activities
allowed for funding to support State enforcement efforts at National
Priorities List (NPL) sites.  These activities may now include
oversight of private party cleanups, negotiation and litigation
efforts to compel private party cleanups, and reporting to the
public on private party response actions.

     The CERCLA Enforcement Division intends to develop funding
guidance for each of the additional activities outlined above.
The first one to be prepared is a draft addendum to the guidance
issued on January 17, 1986, on funding State oversight of remedial
response activities conducted by PRPs at NPL sites (attached).
The addendum expands oversight funding to include remedial actions
and operation and maintenance.  You should begin to use this draft
addendum when assisting in the development and review of Cooperative
Agreement applications submitted by States for these additional
oversight activities.  When this addendum is prepared in final form,
it will be incorporated into the January guidance and reissued as
one complete guidance on State oversight funding.

     We are continuing to research and develop guidance on funding
States to support their negotiation and litigation activities at
NPL sites.  However, funding for these activities will not be allowed
until draft guidance has been prepared.  This draft guidance should
be available later in the fiscal year.

     Please send any comments you have on this draft addendum to
Tony Diecidue, WH-527, 401 M. Street, S.W., Washington, D.C. 20460.
Your comments should be received by COB Friday, April 18, 1986.
If you have any questions on the guidance, please phone Tony at
Area Code 202/FTS-382-4841 .

Attachment

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                                                                   OSWER #  9831.l(a)
                     CERCLA FUNDING OF STATE OVERSIGHT
                 OF POTENTIALLY RESPONSIBLE PARTIES (PRPs)
PURPOSE
     This is an addendum to the January 17, 1986, guidance on EPA funding
under a cooperative agreement (CA), of State oversight of Potentially
Responsible Parties (PRP) conducting Remedial Investigations (RI), Feasi-
bility Studies (FS), and Remedial Designs (RD) at sites on the National
Priorities List (NPL).  This draft addendum expands EPA funding of State
oversight to Remedial Actions (RA) and Operation and Maintenance (O&M)
conducted by PRPs.  Since this is new guidance, Regional staff should
coordinate closely with the appropriate Headquarters Regional Coordinator
before proceeding to award a CA for PRP oversight.  Once the guidance is
prepared in final form, it will be incorporated into the Rl/FS and RD
funding guidance.

BACKGROUND
     On February 12, 1986, the Office of General Counsel (OGC) broadened
their opinion on State funding, which now allows funding to States for a
broader range of enforcement-related activities.  These activities may
Include such areas as oversight of PRP-conducted RA and O&M, search for
and notification of PRPs, and negotiation and litigation to encourage or
compel PRPs to initiate response actions at NPL sites.  The Office of
Waste Programs Enforcement (OWPE) plans to phase the development of
guidance on the specific level of funding and tasks to be allowed under
each activity.  The first phase is guidance on oversight of PRP-conducted
RA and O&M, thereby completing the spectrum of remedial activities
conducted at NPL sites.

     The lead in oversight of PRP-conducted RA and O&M depends on whether
the State or EPA negotiated the administrative order.  If the State
negotiated the administrative order, then the State has the lead for
oversight of the PRP's work.  If EPA negotiated the administrative order,
then EPA has the lead for oversight.  However, even when EPA has the lead
for oversight, the State may receive funding for management assistance
and, under certain circumstances, may undertake a portion of the oversight
with EPA approval.

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                                                                 OSWER #  9831.l(a)
ADDENDUM TO JANUARY 17, 1986 GUIDANCE

1.   Funding State Oversight of PRPs - State Enforcement Response
     If a State successfully negotiates to have PRPs conduct the RI/FS,
RD, RA and/or O&M, it will be in the State's interest to oversee the PRPs'
work.  As a general rule, States should secure funds for this oversight in
advance from the PRPs as part of the settlement.  Where this is not
possible or resources received are not adequate for proper oversight, EPA
may fund the State for oversight and will seek future cost recovery under
CERCLA Section 107.
     A.3  Conditions for Funding under a Cooperative Agreement;
          Oversight of RA
          In order to receive funding from EPA for oversight of a PRP-
conducted RA, the State must include the following information and
assurances in their CA application:
     1.   The State must issue or obtain an enforceable order, decree or
          other enforceable document, requiring the PRP to conduct an RA
          in accordance with the National Contingency Plan (NCP) and
          applicable EPA guidance.  A copy of the order must be included
          in the cooperative agreement application.
     2.   The State's Attorney General must provide a letter outlining the
          State enforcement authorities pursuant to which enforcement
          action against the PRPs will be taken, if necessary.
     3.   The State must submit, with the CA application, a letter from
          the Governor, Attorney General, or designee certifying that the
          State believes a good enforcement case exists against the PRPs
          (i.e., that they are financially able to undertake the remedy or
          have resources equal to or greater than the expected cost of the
          remedy) at the onset of the RA.*  The letter must also certify
* This requirement should normally be contained in the enforcement
  document In the form of a performance bond, corporate guarantee, letter
  of credit, etc.

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                                                                 OSWER #  9831.Ha)
          that the State attempted to secure funds for oversight of the RA
          from the PRP but was either unsuccessful or lacked authority
          under State law.  If State law gives enforcement authority
          directly to a State agency, a letter to this effect will be
          appropriate.
     4.   The State must agree to submit all final plans, reports,
          specifications, and/or recommendations to EPA for review and
          concurrence prior to issuance or Implementation.  Final PRP
          documents or plans and PRP change orders that substantially
          change the scope of work must be submitted to EPA for review
          prior to their issuance to ensure technical adequacy and
          compliance with the terms of the CA.  The State must also assure
          in the CA that it will not expend funds for oversight of the RA
          activities until EPA has had the opportunity to review and
          comment on the RA work plan and has indicated to the State in
          writing that this condition was satisfied.  EPA will agree to
          provide their review within the timeframes or schedules
          established between the State and PRPs in the order, decree, or
          other enforceable document.
     5.   The State must prepare and implement a community relations plan
          in accordance with applicable EPA guidance.
     A.4  Conditions for Funding under a Cooperative Agreement!
          Oversight of O&M
          In order to receive funding from EPA for oversight of PRP-
conducted O&M, the State must include the following Information and
assurances in its CA application:
     1.   The State must issue or obtain an enforceable order, decree, or
          other enforceable document, requiring the PRP to prepare an O&M
          plan in accordance with applicable EPA guidance.  A copy of the
          order must be Included in the cooperative agreement application.
     2.   The State's Attorney General must provide a letter outlining the
          State enforcement authorities pursuant to which enforcement
          action against the PRPs will be taken, If necessary.

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                                                         I    I
                                                                  OSWER # 9831.1(a)
     3.   The State must submit, with the CA application, a letter from
          the Governor, Attorney General, or designee, certifying that the
          State believes a good enforcement case exists against the PRPs
          (i.e., that they are financially able to undertake O&M or have
          resources equal to or greater than the expected cost of O&M) at
          the onset of O&M.*  The letter must also certify that the State
          attempted to secure funds for oversight of O&M but was either
          unsuccessful or lacked authority under State law.  If State law
          gives enforcement authority directly to a State agency, a letter
          to this effect will be appropriate.
     4.   The State must agree to submit all final plans, reports,
          specifications, and/or recommendations to EPA for review and
          concurrence prior to issuance or implementation.  Final PRP
          documents or plans and PRP change orders that substantially
          change the scope of work shall be submitted to EPA for review
          prior to their issuance to ensure technical adequacy and
          compliance with the terms of the CA.  The State may not expend
          funds for oversight of the O&M activities until EPA has had the
          opportunity to review and comment on the O&M work plan and h'as
          indicated to the State in writing that this condition was
          satisfied.  EPA will agree to provide their review within the
          timeframes or schedules established between the State and PRPs
          in the order, decree, or other enforceable document.
     5.   The State must prepare and implement a community relations plan
          in accordance with applicable EPA guidance.
     B.3  Fundable Oversight Tasks; RA
          Currently, EPA does not have experience with funding States to
oversee PRPs conducting remedial response tasks.  Federal experience with
oversight and typical State costs for certain tasks have been reviewed In
* This requirement should normally be contained in the enforceable
  document in the form of a performance bond, corporate guarantee, letter
  of credit, etc.

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                                                                  OSWER # 9831.1(a)
an effort to provide States and Regions with some guidelines on costs and
allowable tasks.  Based on these reviews, it is recommended that funding
for State costs for oversight generally should range between 4 to 6
percent of the cost of the RA.  The rationale is that the PRPs are
responsible for actually managing the work and implementing the RA.
States should not be duplicating work conducted by the PRPs.  Therefore,
in most situations, funding within this range should be adequate for
oversight.  Since this is a new activity, however, the Regions are
encouraged to review carefully the budgets submitted by States and to
consult with their Headquarters counterpart in OWPE before awarding
cooperative agreements for oversight.
     In preparing and reviewing the proposed budget, States and Regions
should consider oversight in terms of review tasks, community relations,
and field related tasks.  States should specify in the administrative
order or other enforceable document, the roles and responsibilities of the
PRP as distinguished from the roles and responsibilities of the State in
each of these major categories.
     Review tas.
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                                                                   OSWER # 9831.l(a)
          Conducting discussions with the affected community on the
          selected remedy and planned construction activities; and
          Holding meetings with the public during the RA.
The tasks listed above are similar to those described under Management
Assistance in Chapter IV (page IV-9) of the manual State Participation in
the Superfund Remedial Program; it may be helpful to consult that section
for more information.
     Field related tasks conducted by the State might include:
          Providing periodic monitoring and oversight of construction
          activities;
     -    Split sampling or confirmatory sampling; and
     -    Participating in pre-final and final inspections.
     B.4  Fundable Oversight Tasks; O&M
          In accordance with current policy on Fund-financed remedial
actions, EPA may, for a period not to exceed one year after completion of
remedial response activities, share in the costs of any required O&M.
Consistent with this policy of providing technical assistance to a State
on O&M, EPA will also consider funding a State's oversight of PRP-
conducted O&M, for a period not to exceed one year after completion of PRP
remedial response activities.
          After reviewing its experience with O&M, EPA has determined that
State costs for oversight generally should not exceed 4 to 6 percent of
the cost of the O&M.  The rationale is that the PRPs are responsible for
managing the work and conducting O&M activities.  The State's oversight of
PRP-conducted O&M will involve review tasks, community relations work, and
some field-related tasks.
     Review tasks conducted by the State might include:
          Reviewing O&M manuals or workplans developed by the PRP or PRP
          contractor;
          Participating in technical meetings on the O&M with the PRPs,
          PRP contractors, and/or EPA;
          Reviewing pre-flnal and final inspection reports;
          Reviewing final technical reports; and
          Reviewing monitoring reports and NPL deletion documents.

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                                                            OSWER # 9831.1(a)
Community relations tasks conducted by the State might include:
     Preparing fact sheets and notifying the public of O&M activities
     and explaining what O&M is expected to entail; and
     Continuing prior community relations activities, as needed.
Field-related tasks conducted by the State might include:
-    Being present at trial runs/shakedowns of major equipment;
     Participating in final inspection and project acceptance; and
     Conducting "periodic field inspections.

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