OSWER 3irecci'/e 'Jumoer 9339.1
I NTS RIM GUIQELINES FOR PRE ?ARISG
NONBINDING PRELIMINARY ALLOCATIONS OF RESPONSIBILITY
I. INTRODUCTION
Section 122(e)(3) of the Superfund Amendments and
Reauthorization Act of 1986 (SARA), Pub. L. No. 99-499,
which amended the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA), 42
U.S.C. SS 9601 e_t seq. , requires the Environmental
Protection Agency (EPA) to develop guidelines for
preparing nonbinding preliminary allocations of respon-
sibility (NBARs). As defined in section 122(e)(3)(A),
an NBAR is an allocation by EPA among potentially
responsible parties (PRPs)-of percentages of total
response costs at a facility. SARA authorizes EPA to
provide NBARs at its discretion. NBARs are a tool EPA
may use in appropriate cases to promote remedial settle-
ments.
NBARs will allocate 100 percent of response costs
among PRPs. The discretion to prepare an NBAR does
not change the goal of the interim CERCLA settlement
policy, published at 50 Federal Register 5034 (February
5, 1985), to achieve 100 percent of cleanup or costs
in settlement.
In preparing an NBAR, EPA may consider such factors
as volume, toxicity, and mobility of hazardous substances
contributed to the site by PRPs, and other settlement
criteria included in the interim settlement policy (50
Fed. Reg. 5034, 5037-5038). The settlement criteria
include strength of evidence tracing the wastes at a
site to PRPs, ability of PRPs to pay, litigative risks
in proceeding to trial, public interest considerations,
precedential value, value of obtaining a present sum
certain, inequities and aggravating factors, and nature
of the case that remains after settlement.
An NBAR is not binding on the government or PRPs;
it cannot be admitted as evidence or reviewed in any
judicial proceeding, including citizen suits. An NBAR
is preliminary in the sense that PRPs are free to
adjust the percentages allocated by EPA among themselves.
Should EPA decide to prepare an NBAR, it will normally
be prepared during the remedial investigation and
feasibility study (RI/FS), and provided to PRPs as soon
as practicable, but not later than completion of the
RI/FS for the site. The NBAR process will normally be
used only in cases where the discretionary special notice
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procedures of section 122(e) are invoked.
Following presentation of an NBAR to PRPs, PRPs have
an opportunity to offer to undertake or finance cleanup.
EPA need consider only substantial offers. A substantial
offer is defined in part IV of these guidelines. EPA
must provide a written explanation to PRPs if it rejects
a substantial offer based on an NBAR. Under section
122(e)(3)(E) , the decision to reject a substantial offer
based on an NBAR is not subject to judicial review.
Section 122(e)(3)(D) states that the costs incurred
by EPA in preparing an NBAR shall be reimbursed by PRPs
whose offer is accepted. If a settlement offer is not
accepted, NBAR preparation costs are considered response
costs under SARA.
II. WHEN TO USE THE NBAR
•The NBAR is meant to promote settlement and, thus,
reduce transaction costs. Generally, EPA will consider
NBAR preparation when it appears that an NBAR may help
to promote settlement. EPA will give particular con-
sideration to preparing an NBAR whenever a significant
percentage of PRPs at a site request one. What consti-
tutes a significant percentage is a case-specific
determination. Regions should note the existence of
the NBAR process in all pre-RI/FS notice letters, and
indicate its potential availability if requested by a
significant percentage of PRPs within 30 days of receipt
of the notice.
There are certain situations where an NBAR may be
particularly appropriate. For example, in a case that
involves federal agencies as PRPs, preparing an NBAR
in order to ascertain the percentage of federal
agency responsibility is likely to promote settlement
even though a significant percentage of PRPs did not
request it. Similarly, if a state or municipality is
involved at a site as a PRP, NBAR preparation may be
deemed likely to promote settlement. Or, it might be
appropriate to prepare an NBAR in a case with a large
number of PRPs including, perhaps, a sizeable de minimis
contingent. An NBAR may help coalesce a previously
unorganized PRP group into a steering committee, and
thus promote settlement.
There are also situations where an NBAR should
probably not be prepared. For example, it may be
clear very early in the process that there is insufficient
information available on which to base an NBAR,
or that the number of PRPs not de minimis is so small
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that an NBAR would r.ot expedite settlement. [-. some
cases it may seem that an equitable settlement can be
more expeditiously or effectively achieved without use
of NBAR procedures. There may also be cases where
MBAR preparation is ruled out because an allocation
for the site is already being prepared by or for PRPs.
Again, whether to prepare an NBAR at any particular
site, including any state enforcement lead site, is a
decision within EPA's discretion and will depend on the
particular circumstances of each case. The decision
whether to prepare an NBAR at any particular site rests
with the Regional Administrator.
If EPA decides to prepare an NBAR, it will notify
PRPs of that fact in writing as early as is feasible.
An NBAR notification should specify that the decision to
prepare an NBAR is discretionary and is contingent, at
a minimum, upon the availability of sufficient data.
III. HOW TO PREPARE AN NBAR
The purpose of the NBAR is to promote expedited
settlement, thus minimizing transaction costs; an
NBAR must be conducted in a fair, efficient, and pragmatic
manner. For simplicity and other practical reasons,
the allocation process presented here is based primarily
upon volume and the settlement criteria.
EPA considered and rejected models based on toxicity
because of the complexity of their application and the
lack of agreement among the scientific community about
degrees of toxicity of specific hazardous substances and
synergistic effects. Also, toxicity is usually causally
related to the cost of cleanup for only a few substances
(e.g., PCBs, dioxin).
Still, the allocation process presented here is not
intended to be exclusive. There will, of course, be
cases where other factors, such as toxicity or mobility,
must take priority in the interests of fairness to the
parties. If a Region prefers to use another allocation
process, it should ponfer with the Director of the
Office of Waste Programs Enforcement prior to such use.
Activities involved in conducting an NBAR fall into two
major categories: information collection and assessment,
and allocation.
Information Collection and Assessment
",,"".. While aggressive information collection efforts
"occur in every case, additional information may be
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r.ecessary for M3AR purposes. Additional information
on actual volume and specific wastes with respect to
each PRP at an NBAR site may be required.
Section 122(e)(3)(B) of SARA authorizes EPA to
subpoena witnesses and documents. Section 104(e) of
CERCLA, as amended by SARA, authorizes EPA to obtain
access to information about a person's ability to pay and
about the nature and quantity of hazardous substances
generated, treated, stored, or disposed of by that person.
These authorities may be used to gather data for an NBAR.
Subpoena of witnesses, authorized by section 122
(e)(3)(B), may be used in some cases as part of the
information collection process. Considerable case-specific
judgment must be exercised about the extent to which
the subpoena authority will be used due to its resource-
intensive nature.
Information being collected must be reviewed by
technical and legal staff as it is received so that
pertinent information may be culled and gaps and
inconsistencies identified. Collection and assessment
efforts should be completed by the end of the RI, so
that the allocation can be completed by the end of the
FS.
On the basis of information collection and assessment
efforts, EPA will determine the waste types and volumes
for each PRP. This volumetric ranking is part of the
information that must be provided with a pre-cleanup
negotiation special notice letter.
The legislative history of section 122 states that
the allocation itself should be made by federal employees.
Consultants or states with cooperative agreements may
assist in the information gathering and assessment
phase of the allocation process. The allocation phase
of an NBAR can be most effectively undertaken by the
same technical and legal personnel who directed the
information collection and assessment efforts.
Allocation
v
In most cases, waste at a site is commingled and
therefore indivisible. In commingled waste cases, the
first step in the allocation phase of an NBAR is to
allocate 100 percent of responsibility among generators,
based on the volume each contributed. The product of
this step will often differ from the volumetric ranking
provided with special notice letters because any waste
that is attributable to unknown parties is allocated
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to known parties in proportion to their volume.
In a limited number of cases, it is possible to link
particular remedial activities with specific waste types
and volumes. For example, in the easy but rare case
of divisible waste, the cost of removing barrels from
a warehouse on a larger site can be separately attributed
to the contributors of the barrels. Or, the cost
of incinerating soil contaminated solely by PCBs can
be attributed to PCB contributors. Where it is possible
to do so, waste types and volumes that necessitate
particular remedial activities will be fully attributed
to the appropriate contributors.
The second step in the allocation phase of the NBAR
process involves adjustments based on consideration of
the settlement criteria. Any percentage allocated to
a defunct or impecunious party should be reallocated.
Where appropriate, credit may be given for any PRP
contributions to RI/FS and/or removal activities at
the site.
In addition, percentages of responsibility should be
allocated to financially viable owners, operators and
transporters. How much to allocate to such parties
is a case-specific decision based upon consideration
of the settlement criteria.
In general, owner/operator culpability is a significant
factor in determining the percentage of responsibility
to be allocated. For example, a commercial owner and/or
operator that managed waste badly should receive a
higher allocation than a passive, noncommercial landowner
that doesn't qualify as innocent under section 122(g)(l)(B)
of SARA. The relative allocation among successive
owners and/or operators may be determined, where all
other circumstances are equal, by the relative length of
time each owned and/or operated the site. Transporter
allocations may be based on volume, taking into account
appropriate considerations such as packaging and
placement of waste at a site. Detailed guidance on
allocations for transporters, owners, and operators
may be prepared at a later date on the basis of experience
under these interim guidelines.
Again, an NBAR will allocate 100 percent of response
costs, because the goal is to achieve 100 percent of
cleanup or costs in settlement.
IV. OFFERS BASED ON NBARS
Once th®' ttibhnical and legal personnel complete the
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NBAR, the numerical results will be transmitted in
writing to PRPs. EPA will not provide a detailed
explanation for the results, due to the enforcement-
sensitive nature of the decisions involved. EPA will
provide a general explanation of the rationale used in
preparing the NBAR. Data gathered in the information
collection phase may be made available to PRPs.
EPA will provide the NBAR results to PRPs as early
as possible. The sooner PRPs receive the results, the
more time they have to organize among themselves and
negotiate with EPA on remedy. A limited period should
be provided for PRPs to digest the NBAR results before
notice for cleanup negotiations is sent.
EPA will attempt to complete the NBAR before selection
of a preferred remedy and public comment, or at least
prior to the Record of Decision (ROD).
Special notice under section 122(e)(2)(A) of SARA
will generally be provided prior to cleanup negotiations
in cases where an NBAR is used. If within 60 days of
special notice for cleanup negotiations, EPA receives
no offer for settlement, it may proceed as usual with
action under section 104 or 106 of CERCLA. If EPA
receives an offer that is not a substantial/good faith
proposal, it should so notify the PRPs before proceeding
with action under section 104 or 106.
A good faith offer is an offer in writing in which
PRPs make a showing of their qualifications and willingness
to conduct or finance the major elements of the remedy.
A substantial offer must meet three criteria. First,
it must equal or exceed the cumulative allocated shares
of those making the offer. Second, it must amount to a
predominant portion of cleanup costs. Third, it must
be acceptable to CPA in regard to all other terms and
conditions, such as release provisions or dispute
resolution mechanisms.
If EPA receives a substantial/good faith offer
within 60 days of special notice for cleanup, EPA will
provide an additional 60 days for negotiation. If an
agreement for remedial action is reached, it must
be embodied in a consent decree. The State should be
kept apprised of negotiations if it chooses not to
participate. Should negotiations for settlement based
on an NBAR fail, a section 106 unilateral order or civil
action may be used to initiate remedial action. Should
EPA proceed with cleanup under section 104, the NBAR
may still be useful in developing demand letters for a
section 107 cost recovery action.
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De minimis ar.d mixed funding settlements, also
authorized by section 122, may occur in combination with
an NBAR. Whether EPA will accept a mixed funding or
de minimis proposal at an NBAR site will depend on the
results of additional analyses specifically designed
to evaluate such proposals.
If EPA rejects a substantial/good faith offer, it
must provide a written explanation to the PRPs, after
consultation with DOJ and review at EPA Headquarters.
In general, rejection of a substantial offer that is
sufficient in amount is likely to be based on failure
to reach agreement on terms and conditions. After a
written explanation for rejection of a substantial/good
faith offer is sent, EPA may proceed under section 104
or 106.
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ENVIRONMENTAL PROTECTION AGENCY
Hazardous Waste Enforcement
AGENCY: Environmental Protection Agency
ACTION: Request for Public Comment
SUMMARY: Section 122(e)(3) of the Superfund Amendments and
Reauthorization Act of 1986 (SARA), which amended the Comprehen-
sive Environmental Response, Compensation, and Liability Act
(CERCLA), requires the Environmental Protection Agency (EPA) to
develop guidelines for preparing nonbinding preliminary alloca-
tions of responsibility (NBARs). EPA is publishing today the
Interim Guidelines for Preparing Nonbinding Preliminary Alloca-
tions of Responsibility to announce that the guidelines are in
effect and to solicit public comment on them.
DATE: Comments must be provided on or before (60 days from
date of publication).
ADDRESS: Comments should be addressed to Debbie Wood, U.S.
Environmental Protection Agency, Office of Waste Proqrams
Enforcement, WH-527, 4C)f ?1 St., S.W., Washington, D.C. 20460. ,
FOR FURTHER INFORMATION CONTACT: Debbie Wood, U.S. Environmental
Protection Agency, Office of Waste Programs Enforcement, WH-527,
401 M St., S.W., Washington, D.C. 20460, (202) 382-3002.
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SUPPLEMENTARY INFORMATION: As defined in section 122(e)(3)(A)
of SARA, an NBAR is an allocation by EPA among potentially
responsible parties (PRPs) of percentages of total response
costs at a facility. The purpose of NBARs is to promote
expedited settlement. NBARs are not binding on the government
or PRPs; they cannot be admitted as evidence or reviewed in any
judicial proceeding, including citizen suits. Whether to orepare
an NBAR at any particular CERCLA site is a decision within
EPA's discretion.
EPA will consider preparing an NBAR at a site if it appears
that an NBAR may help to promote settlement. Still, NBARs will
not be routine. In general, EPA's policy is that PRPs should
work out among themselves questions of how much each will pay
toward settlement at a site.
Comments may address the overall approach taken in the
interim guidelines or focus on any aspect of it. EPA particu-
larly solicits comment on appropriate factors to consider in
determining percentage allocations for owners, ooerators, and
transporters.
The policies and procedures set forth in the interim guide-
lines are guidance to EPA employees. The interim guidelines
v
include enforcement policies and internal procedures that are
not appropriate or necessary subjects for rulemaking. Thus,
the guidelines do not constitute rulemaking by EPA and may not
be relied on to create a substantive or procedural right or
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benefit enforceable by any other person. EPA -nay, therefore,
take action that is at variance with policies and procedures
contained in this document.
EPA is publishing the interim guidelines to provide wide
public distribution of information on this aspect of SARA
implementation, and to gain the benefit of public comment. The
interim guidelines follow.
1*0 M. Thomas
Lee M. Thomas
Administrator
MAY 1 6 1987
Date
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