oEPA
United States
Environmental Protection
Agency
Policy Planning,
And Evaluation
(PM-220)
December 1990
Enhancing State
Superfund Capabilities
A Nine-State Study
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ENHANCING STATE
SUPERFUND CAPABILITIES:
Nine-State Study
A report by the Environmental Law Institute
to the Office of Policy, Planning and Evaluation
U.S. Environmental Protection Agency
December 1990
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This report was prepared by the Environmental Law Institute under
Cooperative Agreement CR-813617-02 with funding from the U.S.
Environmental Protection Agency. Environmental Law Institute staff
contributing to the report were Glen Anderson, Mary Becker, Fran
Greenleaf, Laura Kosloff, Paul Locke, James McElfish, Michael Malacek,
Jessica Mark, Andrew Moyad, and John Pendergrass. EPA staff were
Harriet Tregoning, Charlotte White, and Richard Worden. The assistance
of state program officials is gratefully acknowledged.
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EXECUTIVE SUMMARY
Nine (9) state hazardous substance cleanup programs were studied in depth in 1989
to determine what elements of funding, enforcement, program organization and other factors
are important to state capabilities. Those studied were Colorado, Illinois, Minnesota, New
Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, and Texas. The states were
selected to provide a cross-section of large and small programs, newer and older programs,
geographic diversity, and special program features.
Findings of the study are reported in this volume in two parts. Part One synthesizes
the results across states and draws conclusions concerning means of enhancing programs.
Part Two reports on each of the states studied and shows how program features combine in
the context of operating programs.
The principal findings of the study concern: goal-setting, funding, responsible party
(RP) participation in conducting and financing cleanups, incentive mechanisms for RP
cleanups, site management and staff organization, and program-wide approaches.
Goal-setting
State programs share the common goal of addressing risk from hazardous substance
contamination. This goal is delineated in four (4) dimensions:
• the types of risks of concern
• the level of risk reduction achieved at each site
• the number of sites addressed
• the pace of cleanups.
State cleanup programs focus on one or more of these dimensions in setting
priorities. These dimensions necessarily require trade-offs with one another. A state cleanup
program that articulates which dimensions it deems of greatest significance is better
equipped to marshal its resources. A program that neither articulates its goal nor attempts
to select among the dimensions is less likely to be effective.
Funding
The balances in state cleanup Funds give only a general idea of relative program
capacities. Direct comparisons among states based on Fund balance may overlook: the
stability of the revenue streams supplying the Funds; the fact that some states fund staff
and administration from their cleanup Funds while others do not; and the limitations and
restrictions on the uses of state Funds imposed by statute, policy, or regulation.
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More significant than Fund balances are the sources of Fund revenues.. State Funds
rely upon:
• bonds
• fees on hazardous waste activities
• appropriations from general revenues
• feedstock taxes
• business taxes
• fines and penalties
• interest
Bonds afford flexibility in demonstrating a credible threat of Fund-lead/cost recovery
enforcement. Bonds also allow for the creation of a relatively large Fund, while spreading
costs over a longer period. The existence of bond authority produces enforcement leverage
even if bonds are not obligated.
Fees on hazardous waste activities appear to be important primarily for their
secondary effects-discouraging certain types of waste handling practices, encouraging
source reduction, etc. They appear to be capable of producing a modest amount of funding,
but generally do not raise more than about $5 million per year even in fairly large state
programs.
Feedstock taxes and business taxes are used only by a handful of states. They can
provide substantial revenues, and are a stable funding source.
Appropriations from general revenues are a common source of cleanup funds, but
provide a highly unstable revenue stream for state cleanup Funds. This revenue source
provides maximum accountability to the legislature, but may result in diversion of funds
from cleanup or recapture of funds for other legislative ends.
Fines and penalties are a common source of revenue, but cannot provide substantial
funds.
Interest on Fund balances can be highly important in stretching a Fund. It has a
significant revenue potential, but this potential is inversely proportional to the use of the
Fund. Therefore, cleanup Funds that are highly dependent upon interest are somewhat
frozen. This weakens their effective enforcement leverage as well as their availability for
large-scale removal actions.
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Many states have statutory restrictions on, or prerequisites to, the uses of cleanup
Fund monies. These tend to weaken the enforcement leverage of the Funds by making the
threat of Fund-lead action less credible, or by deferring the possibility of such action.
RP Participation
All state programs depend significantly on RP participation for site investigation and
cleanup. Given the number of sites and the limited availability of public resources, all
programs seek to increase RP participation through enforcement mechanisms and incentives.
Although all programs depend on RP participation, quantitative comparisons of RP
participation rates in different states cannot be made with an acceptable level of confidence.
Some states appear to have a "high" RP participation rate because they have no realistic
Fund-lead or orphan site program. Others may have a "low" rate precisely because they
have chosen to focus efforts on risky sites which have insolvent or recalcitrant RPs. There
are numerous other factors accounting for RP participation "rates," including what number
states elect to use as the denominator of the fraction~e.g. the whole universe of suspected
sites, or those cleanups in progress.
Conclusions may be reached concerning factors that tend to increase or decrease RP
participation, and their enforcement "cost" to the state. Factors that tend to increase RP
participation with little detriment to the state are:
• a credible threat of Fund-lead/cost recovery (which depends both on having
an adequate size Fund, and on reasonably rapid access to the Fund)
• strict liability (which limits litigation issues and encourages more rapid
settlement)
• joint and several liability
• cleanup order authority
• sites with fewer RPs (which makes settlement easier)
Somewhat weaker factors that also tend to increase RP participation with little
detriment to the state are:
• punitive damages (could be significant, but rarely exercised)
• clear deadlines for action
• publicity on site contamination
• the spectre of RP transaction costs
• sophisticated RP representatives (improves negotiation)
in
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Other factors may increase RP participation, but with a "cost" to the state. These
are:
• mandatory requests for "voluntary action," and requirements to "exhaust"
remedies provided by the cleanup statute or other statutes before state
programs may use enforcement authorities or Funds. (These tend to
encourage delay).
• mandatory allocations of proportional liability
• "caps" on liability for "volunteers"
• unsupervised or weakly supervised cleanups
• "settlement first" requirements in the statute
Several factors do not appear to increase RP participation and have a cost to the
state:
• preenforcement review of study orders or cleanup orders
• limitations on a program's choice of enforcement tools
Incentives to RP Cleanup
In addition to the enforcement-related tools discussed above, many states have
learned that RP participation and funding of cleanups may be increased by use of non-
enforcement tools and incentives. The strongest of these link site assessment and/or cleanup
to transfers of property. Property transfer-based mechanisms take three forms:
• required approval by state for a transfer of property involving an industrial
site (e.g. New Jersey Environmental Cleanup Responsibility Act-ECRA)
• disclosure requirements on transfer of property (e.g. Illinois Responsible
Property Transfer Act)
• lender-required audits or assessments.
All of these mechanisms make use of the fact that when parties desire to
consummate a transaction for business reasons, they have an incentive to rectify potential
obstacles to the transfer (such as the state voiding the transfer in the case of ECRA, the
transferee backing out of the deal in the case of the disclosure laws, or the lender refusing
the financing). Thus, states focusing on these transactions have identified "pressure points"
that may be more effective in obtaining privately-financed assessment and cleanup than any
enforcement-based approach.
IV
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All of these approaches can add substantial RP resources to cleanup efforts apart
from a state's "cleanup" program. Additional incentive mechanisms include:
• voluntary preliminary assessment (PA) programs that site owners may elect
to participate in to remove the stigma of having a listed site
• "developer site" programs that allow sites slated for development to
undertake certain assessment and cleanup activities on an expedited basis
• financial assistance from the state to RPs in the form of loans or credits
• publicity
• use of permit bars/permit revocations at other sites.
Program Organization and Site Management
Organization of site discovery, performance of site assessment, screening of sites,
site investigation, remedy selection, and remedial action can be carried out in various ways.
Performance is enhanced when a state matches its organization to its identified goals.
Site management involves the coordination of staff resources. Sites may be managed
by states in three different ways:
• Remedial program manager (RPMV contractor approach—the site is managed
by a single RPM with contractor support.
• Team appmach-the site is managed by a multidisciplinary team, which
follows it through the entire process.
• Expert approach—the site is primarily managed by an individual, who
consults other staff members with relevant expertise on the stages of cleanup.
The individual, in turn, serves as an "expert" with respect to relevant phases
of sites managed by others.
The study reveals that the team approach and the expert approach offer significant
advantages over the RPM/contractor approach in terms of continuity, staff development and
morale, and effectiveness.
Enhancing State Capabilities
A state's site discovery program may be appropriately organized as:
• passive
• passive supplemented by property transfer
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• active
• targeted active
Each of these approaches has differing resource needs and outcomes. An active
approach is more desirable early in a program's life cycle. It may allow the identification
of the universe of sites, can be supported before substantial resources are devoted to
remedial construction at multiple sites, and may provide the foundation for legislative
addition of greater resources if the universe discovered is substantial. The passive approach
appears to be desirable only after use of one of the other three discovery methods. The
targeted active approach focuses on natural resources or contaminant types of concern, and
so provides a cost-effective prelude to risk reduction.
Site assessment and remedy selection also requires a normative choice by the state
cleanup program, based on the goal dimensions it has identified. The four paradigmatic
strategies (overlapping in some state programs) are:
• Ubiquitous risk-an attempt to accomplish some risk reduction at all
identified sites.
• Queue-complete and permanent remediation of sites in turn, in the order in
which they are ready for remedial construction.
• Cost/risk-the greatest risk reduction at the least cost (or given a fixed
amount of resources); this may result in numerous removals, or a few large
remedial actions, depending upon risk.
• Passive-voluntary RP cleanups accepted if offered.
The ubiquitous risk approach has significant equity advantages, but may not result
in permanent or complete remedies. The queue may not reach all sites if resources are
insufficient, and does not attempt to optimize risk reduction (except to the extent to which
the sites are placed in the queue by virtue of a screening process and the priority is
maintained). The cost/risk approach has significant efficiency advantages, but may produce
equity problems if it does not address a significant number of sites or produce sufficient
geographic distribution. The passive approach is usually pursued only when a program
lacks a credible size cleanup Fund and/or has weak enforcement authorities.
A state program may credibly elect any of the four discovery approaches, and any
of three assessment and remedy selection approaches (not passive). There is no
"prescription" for a "capable" state cleanup program. Rather, any evaluation of state
"capabilities" must ask (1) whether the program's site discovery, assessment and remedy
selection choices match its identified "goals''--^ risk type, risk level, number of sites,
pace of cleanup, and (2) whether these choices are supported by sufficient resources to
carry them out The critical resources for this inquiry are a stable Fund, authorities that
increase the likelihood of RP cleanup, and effective staff organization.
VI
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TABLE OF CONTENTS
Introduction i
PART ONE
Chapter 1 - Cleanup Goals 1
Chapter 2 - Funding 7
Chapter 3 - Responsible Party Participation 27
Chapter 4 - Incentives for Voluntary Responsible Party
Participation in the Remediation Process 67
Chapter 5 - Program Organization and Site Management Strategies:
Coordinating Cleanups Effectively 81
Chapter 6 - Enhancing State Capabilities 99
PART TWO
Introduction 1
Colorado 9
Illinois 25
Minnesota 53
New Hampshire 99
New Jersey 127
North Carolina 151
Oregon 169
Pennsylvania 193
Texas 219
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INTRODUCTION
Historically, states have had an important role in addressing the nation's hazardous
waste problems. State involvement has encompassed both participation in federal cleanup
efforts and administration of state remediation and corrective action programs. The state
role appears to be expanding at this time. Several new state cleanup programs have been
created recently and many existing programs have increased funding and staffing levels.
These developments provide an opportunity for states to take on greater responsibilities in
the federal cleanup program and to expand the scope of state cleanup efforts. Based on an
analysis of programs in nine states, this report suggests ways of enhancing state program
capabilities.
L THE STATES' ROLE IN HAZARDOUS SITE CLEANUP
Participation at National Priority List Sites
The centerpiece of the national hazardous waste cleanup effort is the federal
Superfund program. Created by the Comprehensive Environmental Response, Compensa-
tion, and Liability Act (CERCLA), the Superfund1 program has relied on state involvement
in the cleanup process since its inception in 1980. Ten years later, the state role in the
Superfund program is still evolving.
States are responsible for discovering inactive hazardous waste sites and conducting
the Preliminary Assessment/Site Investigation (PA/SI) to characterize site risks. PA/SIs are
financed by the Superfund program through Cooperative Agreements (CAs) and are used to
determine which sites require immediate attention and/or should be listed on the National
Priority List (NPL) to undergo longer term remediation pursuant to CERCLA. During its
first six years, CERCLA did not provide states a substantive role in the review and
selection of remedies for sites on the NPL, even though states were required to pay 10%
of the remedial action costs and most of the Operations and Maintenance (O&M) costs at
1. Throughout this report, "Superfund" is only used to refer to the federal program or
to the federal Fund. While state programs may have comparable authorities and funds that
can be used for the same purposes as the Superfund, we will refer to the state counterparts
as the state "cleanup" program and the state "fund".
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Fund-lead sites. The state role in remedy selection expanded considerably with the
enactment of the Superfund Amendments and Reauthorization Act of 1986 (SARA).
Section 121(f) of SARA calls for "substantial and meaningful involvement by each state in
initiation, development, and selection of remedial actions to be undertaken in that State.
EPA's proposed revisions to the National Contingency Plan (NCP) in 1988 included policy
options to allow NPL sites to be "deferred" to states to facilitate more rapid cleanup and
conserve federal funds. Amidst growing controversy over this additional expansion of
states' role at NPL sites, the EPA Administrator told a Senate committee in June, 1989 that
EPA would "defer on deferral."2 The NCP was promulgated without deferral provisions.
Nevertheless, many states remain deeply involved in federal cleanups, often assuming
"state-lead" at NPL sites under cooperative agreements with EPA. Others are pursuing their
own strategies at NPL sites or aggressively pursuing control of remedy selection at these
sites, occasionally in conflict with EPA.
State Cleanup Programs
State involvement at NPL sites pales in comparison to the challenge of cleaning up
or compelling responsible parties (RPs) to clean up non-NPL sites. NPL sites currently
constitute less than 5% (1228) of the estimated 32,500 sites potentially requiring attention.3
Even though many of these non-NPL sites may require less time and resources to clean up
on a per-site basis in comparison to NPL sites, the cleanup task is formidable and will
extend into the next century. Most states have cleanup programs for inactive or abandoned
sites. These programs vary widely in size, scope, funding, and legal authority. Many state
cleanup programs address hazardous waste problems at facilities regulated under Subtitles
"C", "D", and "I" of the Resource Conservation and Recovery Act (RCRA) in addition to
the universe of abandoned and inactive non-NPL sites.
2. For a discussion of this controversy, see U.S. General Accounting Office, Hazardous
Waste Sites - State Cleanup Status and its Implications for Federal PolicyT August 1989
(GAO/RCED-89-164).
3. Fewer than half of the sites potentially requiring attention have gone through the
PA/SI process and been evaluated for listing on the NPL. Under EPA's new PA/SI policy,
many of the remaining sites will be screened out before the final stage of the site'
investigation process.
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State Cleanup Capabilities
While the preceding discussion suggests that there is a large potential role for states
in addressing hazardous waste problems, it is more difficult to describe or assess state
cleanup capabilities. Some programs have annual Fund additions of $50 million or more
and staffs of several hundred people and can therefore address a larger number of sites
than can other state programs with annual funding of well under $1 million and staffs of
less than 20. Whether a state can be said to possess sufficient cleanup "capabilities"
depends partly on (1) how "cleanup" is defined, (2) the number of sites requiring
remediation, (3) the time frame for completing cleanups, and (4) the level of risk
mitigation desired or attempted at each site. Thus, two state programs with dissimilar
funding and staffing levels may both be quite capable of addressing their hazardous waste
problems if the magnitude of problems or the cleanup goals are also quite different. While
the level of program funding and staff resources are critical factors affecting state
capabilities, there are other important determinants of capabilities, particularly the manner
in which these resources are used to obtain private involvement in cleanups.
H. OUTLINE OF THE REPORT
This report examines state cleanup capabilities and provides two types of analyses
of the factors that affect capabilities. Part 1 of the report describes and analyzes various
types of funding mechanisms, statutory authorities, policies, and regulations that have been
used by states to support their efforts to address hazardous waste problems. It relies on
the analyses of nine selected state cleanup programs (Part 2 of the report) and, to a lesser
extent, on the Environmental Law Institute's recent report for EPA, An Analysis of State
Superfund Programs: 50-State Study4. Part 1 consists of six chapters. Chapter One
provides a discussion of program goals and describes the linkages among program goals,
cleanup and enforcement activities, and resource constraints. Chapters Two through Five
examine public funding approaches, the role of RPs in cleanups, policies that augment the
cleanup process, and organization and coordination of program resources, respectively.
Chapter Six presents integrated approaches for meeting state cleanup goals.
4. EPA/540/8-89/001 (September 1989).
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Part 2 of the report consists of in-depth analyses of nine representative state cleanup
programs. The states studied included those with large programs and small programs,
widely varying staffing patterns, differences in program goals, and varying ages of the state
cleanup program, as well as geographic distribution. These state studies provided an
opportunity to examine program elements in an integrated way, focusing on how individual
elements complement others, and how, in combination, the various program components
define the state's cleanup capabilities. The nine state programs examined were those of
Colorado, Illinois, Minnesota, New Hampshire, New Jersey, North Carolina, Oregon,
Pennsylvania, and Texas.
IV
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PART ONE
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CHAPTER ONE
CLEANUP GOALS
As noted in the Introduction, state cleanup capabilities vary considerably. These
differences can be attributed in part to funding and staffing levels. But cleanup capabilities
also depend on the types of goals state programs set, and on how resources are allocated to
the various types of activities comprising the cleanup process. This chapter provides a
discussion of types of state program goals, and illustrates the tradeoffs among different
goals. It also briefly examines the linkages between program goals, on the one hand, and
resource needs, legal authorities, and program organization, on the other—serving as a
bridge to the analysis in succeeding chapters.
I. OVERVIEW
In the most general terms, the overarching goal of the state cleanup programs
studied is to address risks from hazardous waste contamination. While this general
statement of purpose is ubiquitous in state statutes, states may find it useful to further
refine or clarify this goal to facilitate program organization and help a program allocate
funds and assign staff to various tasks. Examples from the 9-state analysis illustrate some
refinements made by states: achieve site cleanups that are adequate to protect public health
and the environment, with priority placed on remedying sites that are underway rather than
starting work on new sites; investigate all potential hazardous waste sites and remedy those
sites that pose a "serious" threat to the public health and welfare; take action at sites on
the state's priority list using cost-effective cleanups, preferably emphasizing permanent
remedies; or mitigate environmental and health risks at all sites, with cleanup to
background contamination levels if attainable.
Refinements of the general goal can be delineated in four distinct dimensions:
• the types of risks of concern,
• the level of risk reduction achieved at each site,
• the number of sites addressed, and
• the pace of cleanups.
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Although these dimensions are discussed separately in subsequent sections, they are in fact
inextricably linked. For example, if the program uses a priority list to screen sites for
remediation, the number of sites to be addressed depends largely on how the ranking
system is set up. Also, there are inherent tradeoffs and conflicts if a program decides to
prioritize in a single dimension. For example, if a program emphasizes cleanup to
background at every site, it may have to adjust its expectations about the number of sites it
can address over a given time period and how long it expects each cleanup to take.
IL TYPES OF RISKS
There are a number of different types of risk associated with hazardous waste
contamination. Risks are typically categorized as either public health or ecological, to
distinguish between risks to humans as opposed to plants and animals. A third category--
welfare damages—identifies contamination effects on property and other economically
valued commodities. Risks can be further distinguished in terms of whether they are
current or potential. These risk categories are further refined below:
• Human health risks:
- individual vs. population or sensitive subpopulation
- acute vs. chronic
- carcinogenic vs. non-carcinogenic
- by media (e.g., ground water, surface water, air, sediments, and soil)
• Environmental/ecological risks:
- risks affecting or threatening ecosystems
- destruction of sensitive habitats
- irreversible environmental damage
- threats to wildlife, especially endangered species
• Welfare damages
- crop or drinking water loss due to contamination
- materials damages to buildings and other structures
- effects on property values
- lost recreational opportunities
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Most states do not indicate which risk categories are of greatest importance when
articulating overall program goals. However, risk priorities may be revealed by the way
certain activities in the cleanup process are defined. For example, if the program relies on
complaints or referrals to discover sites, this approach gives weight to current, known
health and welfare risks. Criteria for listing or ranking sites also may indicate the relative
importance of different types of risk. Several states use the federal hazard ranking system
(or a modified version), which emphasizes human health risks, to screen sites for the state
priority list. Generally, state programs emphasize health risks over environmental risks and
welfare damages, and known releases or current risks over potential or uncertain risks.
Some states emphasize protection or remediation of important state resources such as
groundwater or critical surface waters.
States' selections of risk types to address can drive their allocations of funds, their
enforcement strategies, their staffing and organization, and their prioritization of site and
remediation activities. While a state's choice of risk type for focus is often reflexive, it
controls many other decisions.
HI. LEVEL OF RISK REDUCTION AT EACH SITE
States may set goals based on the level of cleanup desired at each site. "How clean
is clean" is probably the second most contentious issue in cleanup programs after liability.
Generally, environmental groups and neighboring residents advocate cleanup policies that
emphasize strict numerical standards and/or cleanup to background, while responsible
parties favor cleanup policies guided by flexibility and the balancing of potential risk
reductions against the costs of remediation. In goal-setting for state programs there has
been little discussion of differentiating cleanup policies at different sites. For example, in
setting program goals, a state could apply different standards depending on whether human
health risks are current or potential, or whether human health as opposed to ecological
risks are involved. In part the states' silence on differential policies could be due to over-
arching statutory mandates that imply all risks must be addressed without regard for priori-
tization. Yet, a numerical standard, such as a maximum contaminant level (MCL), that is
based on human health risks may not be appropriate if only ecological risks are involved
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(either lower or higher standards might be appropriate depending on the nature of the
risks).
Of the nine states studied, seven have articulated risk reduction policies. These
policies fall into one of four categories: (1) site-by-site risk assessments, with some
numerical standards for certain contaminants and exposure paths; (2) state numerical
cleanup standards; (3) cleanup to background, and (4) federal NCP cleanup standards
applied to state sites. These differing risk reduction goals affect program resource
allocation.
IV. NUMBER OF SITES REQUIRING REMEDIATION
In general, state programs will be unable to address all hazardous substance sites
and must set goals defining the number of sites to be addressed over a specified time
period. The number of sites that need attention depends, in part, on what types of risks
are deemed important and the thresholds that trigger site investigation and remediation. In
setting goals for the number of sites to be addressed, a program must take into account the
level of cleanup required because that affects the resource requirements and the time
required to complete remediation at a site. Also, the program must recognize that the
number of sites addressed does not necessarily correlate with the aggregate reduction in
risks. For example, focusing program resources on selected sites may result in larger
reductions in aggregate risks than spreading the same resources across all known sites.
At the present time, most states have a large backlog of sites requiring assessment
and/or remediation. States are limiting the number of sites that will be cleaned up in
various ways. Some limit action to those sites on the NPL. Others have established state
priority lists or inventories. Still others maintain no formal inventory but simply work on
those sites already identified to the extent resources are, or become, available. These
variations in approach lead to widely varying definitions of the "size" of the overall
hazardous site problem, and to significantly different demands for funding and staffing
resources.
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V. PACE OF CLEANUPS
State cleanup programs also set goals in terms of how quickly site cleanups are
conducted. The pace of a cleanup is important because of risks that may be incurred until
the cleanup is completed and the effects on the cost and/or technical feasibility of cleanup
if there are delays. Pace can be affected by a number of factors: the thoroughness of site
investigations and feasibility studies leading up to the selection of a remedy; the duration
of negotiations with responsible parties; the complexity of the remedial design and
construction phase of remediation; the availability of staff time and funds for oversight of
investigation and remediation activities; statutory "exhaustion" requirements, mandatory
"notice and negotiating" periods with RPs, review and approval of state program decisions
by state boards or commissions, public comment periods, and litigation in states that allow
preenforcement review of agency decisions.
Two of the nine states studied emphasize speed in achieving cleanups. In one of
these states, the program relies chiefly on interim responses to the contamination, with
complete remediation requiring more time. In most of the states, the pace of cleanup is
strongly dependent on the enforcement schedule and/or the availability of funds for state-
lead cleanups. One state takes voluntary cleanups if offered but does not impose cleanup
obligations and schedules on RPs. These differences in approach to pace appear to be
driven by (1) the availability of resources and (2) the presence or absence of statutory
enforcement tools or limitations on enforcement authority.
VI. STATE GOAL SETTING
The chapters that follow discuss the program elements of funding, enforcement,
incentives, and program organization. All of these, like program goals, affect the
dimensions of states' programs. Yet these resource and authority issues need not control a
state's program. In effect, goal-setting (if clearly articulated and pursued) can result in
choices leading to reallocation of these resources, or their supplementation by state
legislatures or responsible party cleanups. Indeed, similarly situated states with differing
goals may have significantly different programs. The goal-setting process has, however,
been slow to develop in state programs (as it has in the federal program).
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Goal selection profoundly affects the focus of state programs and their capacities.
For example, programs that place a priority on the types of risk to be addressed can
achieve a relatively high level of capacity if they tailor site discovery and other activities
to the types of sites of most concern. For example, they may focus on urban areas or on
drinking water aquifers. Programs focusing on the level of risk reduction at each site may
lead either to a removal-based program or to a permanent remedy approach. These require
differing resources and staff organizations. Programs focusing on addressing a large number
of sites must organize enforcement differently from those limiting the sites. And programs
concerned with pace must make choices that trade-off certain of the other goals.
No state program treats all of these goals equally. It is important, therefore, in
assessing resources and program capabilities to identify which goals are being emphasized
and why. If a state's current emphasis is entirely dictated by its existing staffing pattern or
funding level, it is clearly in a state's interest to attempt to define its goals on other
grounds just to see whether resources can be better deployed. That is, resources should
ordinarily serve a state program's goals, rather than vice versa.
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CHAPTER TWO
FUNDING
Funding sources and funding levels exert a profound influence upon the potential
effectiveness of state cleanup programs. Forty-eight states have some kind of fund for
cleanup or emergency response activities at hazardous sites, and fifteen states have more
than one such fund. Funding mechanisms vary considerably among states, and often
contrast with the federal program. For example, some state Funds receive no appropriations,
while others are entirely dependent upon appropriations. In contrast with the federal
Superfund, only a very small number of state Funds derive revenues from a feedstock or
other targeted tax.5 Also, many of the state Funds have significant restrictions or limitations
on uses of Fund monies. This chapter analyzes the funding mechanisms used by states and
their advantages and limitations for meeting program goals.
The nine states in the study all have "superfunds"~that is, monies set aside for the
purpose of remedying sites where hazardous substances have been released. Fund balances
range from $256,000 (North Carolina's Inactive Hazardous Sites Cleanup Fund) to $450
million (New Jersey's two cleanup funds plus $300 million in bond authority). Excluding
bond sales, annual revenues to the Funds range from $0 (North Carolina) to $50-75 million
(Pennsylvania and New Jersey). Revenue sources include fees on generation and disposal of
hazardous waste, specific taxes, appropriations from general revenues, interest on fund
balances, penalties, and cost recoveries. Table 2-1 identifies the Funds for the nine states,
their balances, and their revenue sources. (All of these Funds also receive revenue from
cost recovery, which is not listed separately.) The range of revenue sources and Fund
balances for the nine study states is representative of the fifty states analyzed in ELI's 1989
study of state superfund programs for EPA's Office of Emergency and Remedial Response.
5. The federal Superfund is funded by a combination of excise taxes on petroleum,
chemical feedstocks, and imported chemical derivatives; environmental taxes on
corporations; and general appropriations.
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TABLE 2-1
STATE SUPERFUNDS
State
Colorado
Illinois
Minnesota
New Hampshire
New Jersey
North Carolina
Fund(s) and
Balances
Hazardous Substances
Response Fund
$5 million
Hazardous Waste
Fund
$4.25 million
Clean Illinois Fund
$2.5 million
Build Illinois Program
(bond fund)
Minnesota Environ-
mental Response,
Compensation &
Compliance Fund
$13 million
Hazardous Waste
Cleanup Fund
$1.9 million
(incl. bond issue)
Spill Compensation
Fund
$68.8 million
Hazardous Discharge
Site Cleanup Fund
$76.7 million
(plus bond authority)
Inactive Hazardous
Sites Cleanup Fund
$256,000
Emergency Response
Fund
$360,000
Revenue
Sources
• Solid waste disposal fees
• Interest
• TSD fees
• Appropriations
• Bond debt paid by
used car sales tax
• Appropriations
• Hazardous waste generator
tax
• Penalties
• Interest
• Hazardous waste generator
fees and TSD fees
• Penalties
• Hazardous materials
transportation permits
• Interest
• Bonds
• Transfer tax on hazardous
substances and petroleum
• Interest, Penalties, Cost Rec.
• Appropriations
• Bonds
• Appropriations
• Interest
• Transfer of excess over
$500,000 from Emergency
Response Fund
• RCRA penalties
Revenues
• $1.35M annually
• 7% (@ $350,000/yr.)
• $2.1M annually
• $2.5M annually
• variable
• $1-1.5M annually
• $1M annually
• variable
• variable
• $357,000 annually
• $212,000 annually
• $220,000 annually
• not credited
• authority exhausted
• $21.9M annually
• $6M annually
• $225M appropriated
over 5 years
• $300M bonds
authorized
• $600,000 (FYs 1987-89)
$0 (FY 1989-90)
• variable
• $0
• variable
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TABLE 2-1 (continued)
State
Oregon
Pennsylvania
Texas
Fund(s) and
Balances
Hazardous Substances
Remedial Action Fund
$4.5 million
(plus bond authority)
Hazardous Sites
Cleanup Fund
$32 million
Hazardous Waste
Disposal Fee Fund
$12 million
Spill Response Fund
$557,000
Revenue
Sources
• TSD fees
• Civil penalties
• Bonds
Bond debt serviced by:
-hazardous substance fee
-petroleum fee
-solid waste tipping fee
• Capital stock and
franchise tax
• Appropriations
• Hazardous waste managemeni
and transportation fees
• Interest
• Hazardous waste
disposal fee
• Penalties
• Commercial TSD fees
• Interest
• Appropriations
Revenues
• $4.5-5M/biennium
• $173,000/biennium
• Bonds=10x fees
Fees capped at
$lM/yr/fee
• $30M annually
• $15M annually
• $5M annually
• $2.75M annually
• $7M annually
• varies
• $1M annually
• $1M annually
• varies
Note: Cost recovery is a revenue source or potential revenue source for all of these Funds. It is not shown
separately (except in New Jersey where its contribution is relatively consistent) because (1) it repre-
sents a replenishment of funds originally derived from another source, and (2) its annual contribution
is often highly variable.
Note: Fund balances shown as of mid-1989.
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I. REVENUE SOURCES
Fund balances give some idea of the capacity of state cleanup programs to
accomplish remediation and to exercise leverage to stimulate RP cleanups. Yet merely
knowing the balance available to a state program at any given time reveals little.
Specifically, state cleanup Funds may have similar balances, but completely different
capacities. For example, in one state, the balance may not be carried forward from year to
year; in another, the Fund's revenue streams may fluctuate; in still another, the reported
balance may reflect an all-time high based on slowness to spend Fund monies but be
unrepresentative of the amount typically available. More important than Fund balances is
the reliability of revenue streams replenishing the Funds. What is their capacity to meet
state programs' NPL obligations (CERCLA match and O&M costs) and funding require-
ments for non-NPL sites?
A one-to-one comparison of state Funds is also misleading because of the different
purpose for which they may be used. Some states pay their administrative expenses
(salaries, supplies, overhead) out of their cleanup Funds, while others use the superfund
cleanup Fund only for cleanup actions and pay administrative expenses out of general
appropriated revenues or FJPA grants. Thus, for example, while Pennsylvania has annual
Fund income of over $52 million, approximately $14 million of that is to pay for staff and
administration of the program. In contrast, the North Carolina Fund is not used for
administration. Colorado's Fund is not usable for administration except for an amount not
to exceed 5% of the Fund balance. These differences lead to some difficulties in comparing
the size of Funds and annual revenues.
Other issues are also important For example, do the revenue sources of the cleanup
Fund serve any secondary goals? (e.g. encouraging waste reduction, discouraging
importation of out-of-state waste, encouraging substitution of non-hazardous feedstocks,
etc.). Do these secondary effects serve to conserve the Fund in the long run? Are they
important for other reasons?
10
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State Fund revenues come from the following sources:6
• bonds
• waste generation, disposal, or transportation fees
• feedstock or fuel taxes
• taxes on business or industrial activities
• appropriations from general fund
• fines and penalties
• interest on Fund principal
• grants from EPA
• cost recovery
These various revenue sources for state cleanup programs have advantages and
disadvantages for meeting program goals (such as maximizing the number of sites
addressed, the pace of cleanup, or the extent of cleanup). Some also have secondary or
incidental effects. The revenue sources are discussed below. Table 2-2 at the end of this
section summarizes revenue sources and their characteristics.
Bonds
A number of states have partially funded their cleanup programs with bonds. In all,
twelve states use bonds for at least part of their cleanup funds. No state, however, relies
entirely on bond funding. Every state with cleanup bonds also has a fee-based or other
type of direct revenue source. Of the nine states considered in this study, four-Illinois,
New Jersey, New Hampshire, and Oregon—use bonds as part of their cleanup Funds.
Bonds have the advantage of producing a significant amount of money for use at
one time while repayment of principle and interest is spread over a longer period. As a
result, they are an ideal way of (1) creating a credible threat of Fund-lead remediation
(with the potential for assessing punitive damages) to encourage RPs to conduct cleanups;
6. Transfers, relied on in some states for funding, are not treated separately here but
are linked to their original source of revenue. Thus, North Carolina's Inactive Hazardous
Sites Cleanup Fund, which may receive transfers from the Emergency Response Fund, is
credited with being funded partially out of RCRA penalties-the source of the latter fund's
revenues.
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or (2) providing money to meet large near term contingencies that can't readily be financed
out of current revenues.
Bond-funded programs are, however, more costly than programs funded out of
current revenues or through accumulated revenues. The pay-out includes both principal and
interest. Thus, over the long term, a bond fund can be a costly approach.7 In those states
with bond funding and other revenues, the preferred approach is to use the other revenues
first. The bonds are held in reserve, because once obligated, the interest begins to run. New
Jersey, with its $300 million bond fund, has left the fund entirely untouched. Staff in New
Jersey's Department of Environmental Protection believe that the existence of the fund
demonstrably affects RP willingness to settle (even at large sites) because they know the
state has the capacity to act But the state has no need to obligate the bonds if it can
obtain cleanup through either settlement or use of its non-interest-charging funds. A bond
fund can put "muscle" into an enforcement strategy.
The most difficult aspect of bond funding is establishing a revenue source for the
debt service. Illinois funds its bonds out of the proceeds of a tax on used car sales.
Declining revenues from this tax have threatened the capacity of the bond fund. Interest
and principal on Oregon's bonds are funded by hazardous substances fees, petroleum
delivery fees, and solid waste tipping fees (i.e. disposal fees). The state evidently concluded
that the $3 million per year that could be raised from these fees would go further if used
to finance $30 million in cleanup bonds than if credited directly to a Fund. Bond funds
could be useful in those states with small funds but with a few large, high-cost sites.
The long term costliness of bond funding may be overcome if a state actively
pursues punitive damages recoveries. The bond fund can be used as a "club" to drive RP
settlement; but if it must be used, a punitive damages recovery can overcome the interest
cost. The result may be that observed in New Jersey-little need to use the bond funds, and
few treble damage cases because of settlements. The ability of a state to recover
prejudgment interest may also reduce the costliness of this approach.
7. This costliness is mitigated to some extent by the disparity between the bond
interest rate and the occurrence of inflation. It may be that a state can benefit from the
deferral of payout until 20 years in the future. The spread between the interest rate and the
inflation rate may be enhanced by the fact that most state-issued bonds carry lower interest
rates than privately-issued bonds because of applicable state and federal tax exemptions.
12
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Bond programs also entail administrative costs. If they are properly structured, the
programs may be handled through the states' revenue departments (for example as in the
Illinois program). However, the mechanism for funding the interest and principal payout
may require significant staff resources.
Fees on Hazardous Waste and Solid Waste
Nineteen states use fees as major sources of revenue to their Funds. Three other
states use fees as minor revenue sources. In addition, several other states impose taxes8 on
waste generation and use the proceeds for state superfunds. Of the nine states in this study,
seven impose fees on hazardous waste generation, transportation, or disposal, or solid waste
disposal, as superfund revenue sources. Only North Carolina, which relies on
appropriations, and New Jersey, which relies on a number of funding sources including a
transfer tax on hazardous substances and petroleum, do not use fees.9
Fees are important more for their impact on behavior than as substantial revenue
sources. Indeed, fees generate revenues ranging from only $0.4 million to $7 million
annually for the seven state Funds. The median is $2.1 million/year. This is generally
consistent with the results of the fifty-state study.10 Of the fifty states, only two-Texas and
Massachusetts-collected in excess of $5 million in annual receipts from fees. (They
received $7 million and $6 million, respectively). Staff from the Pennsylvania program
articulated why their legislature had placed a cap on fees for hazardous waste management
and transportation at $5 million per year. They concluded that the industrial base of the
8. In total, 22 states use fees or taxes on waste generation or disposal activities or
businesses as a revenue source. The differences between fees and taxes are sometimes
subtle. In general, fees are levied on the regulated industry and relate to activities of that
industry. Fees also tend to represent a charge on pollution, or for mitigation services.
Taxes may be levied on a different basis than fees. Often, taxes are levied on income,
property values, or specific produced inputs or outputs. Administration of taxes may be
vested with the state treasury or revenue department, necessitating transfer of funds to the
cleanup program. In contrast, fees may be collected directly by cleanup programs in some
states.
9. Minnesota taxes hazardous waste generators. This is similar to a fee for hazardous
waste generation, because it applies to the volume of waste produced.
10. An Analysis of State Superfund Programs: 50-State Study (September 1989), Table
m-7.
13
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state would not support a higher addition to marginal costs, and that insufficient revenues
could be raised by further reliance on fees. This reasoning probably explains why other
states do not raise a great deal of money through fees as well.
Thus, as a vehicle for raising revenues of up to $5 million, fees on waste-related
activities are fairly well-suited. For greater amounts, they do not appear to have sufficient
potential, based on our survey of state practices.
Fee-based revenues are also somewhat cosdy to generate as they require significant
administative oudays. This is particularly true if the fee is imposed on a large number of
entities (as, for example, a hazardous waste generation fee). Administrative expenses may
be lower if the fee is collected from a smaller number of entities (e.g. from hazardous
waste TSD facilities). Expenses may also be lower if the fee can be administered in
connection with a pre-existing program (e.g. in the state's department of revenue, or in
connection with pre-existing reporting obligations).
Fees can be most useful in influencing company behavior. That is, the imposition of
a waste handling or disposal fee can serve as a disincentive to production or disposal of
the waste. The Pennsylvania fee schedule was expressly constructed to that end.
Pennsylvania charges the greatest amount per ton for hazardous waste disposed on land,
less for treatment of hazardous waste, and nothing for recycling of hazardous waste. It also
establishes a detailed fee schedule for transportation of hazardous wastes to various types
of facilities. If the fee schedule operates as expected, it should influence the path of the
waste stream and discourage waste generation where it is economically efficient to do so.
For example, the Pennsylvania fee is more clearly directed at behavior rather than at
revenue raising than most state fees. Of the $5 million in fees generated annually, up to
$4.1 million is available for grants or loans: $2 million is available to companies for waste
minimization and recycling grants; $2 million is available to municipalities where hazardous
waste facilities are or will be located; and $100,000 is available for loans to RPs to
facilitate cleanups.
Obviously, however, if fees are successful in changing behavior, the revenues from
such fees will necessarily decline. The Fund may become a victim of its own success.
Other factors can also be important. Colorado imposes its fee upon disposal of solid waste;
it projects that the advent of recycling will depress the revenues flowing into its superfund
in future years. A number of the state statutes have provisions that allow the environmental
14
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agency to adjust the fee schedule to increase (or maintain) the revenues generated by fees
for precisely this reason (e.g. Pennsylvania, Texas; but not Colorado).
Those fees likely to have the most success in influencing behavior are those related
to the quantity of waste generated or handled. In contrast, assessment of fees on "TSD
facilities" or "transporters" simply by virtue of their function, are more like business
occupation taxes or general income taxes, which are either passed through to customers or
partially absorbed. "Tipping" fees or "hazardous waste generation" fees have a more direct
relationship to the activity at issue, and may provide an economic incentive to firms to
make incremental reductions in generated waste.
Secondary effects of waste fee systems may be to influence the movement of, and
location for disposal of, wastes. For example, states that impose fees for disposal of
hazardous waste encourage their waste generators to ship waste out-of-state and discourage
the entry of other waste for disposal (even if the fee is non-discriminatory). In contrast,
generator fees are likely to encourage source reductions, but may not affect disposal
location. Indeed, generator fees may have the effect of discouraging waste generation in-
state while allowing waste from out-of-state to absorb the excess disposal capacity created
in-state. Generator fees may also encourage the relocation of waste-generating production
out-of-state while not reducing disposal in-state. New Hampshire has attempted to address
this problem by imposing a hazardous waste generation fee on in-state generators, and a
TSD fee for disposal of out-of-state waste in-state.
Feedstock Taxes
New Jersey uses a transfer tax on hazardous substances and petroleum as the
primary source of revenue for its Spill Fund. Such taxes are fairly uncommon as revenue
sources for state Funds.
The level of funding generated by such a tax may fluctuate if waste minimization
and other efforts lead to a reduction in the use of hazardous substances, and the impact of
the tax itself may lead to a reduction in the revenue base. The inclusion of a petroleum
tax, however, provides greater stability to a Fund reliant on feedstock taxes because of the
relative inelasticity of demand for petroleum within the price range marginally affected by
a relatively low tax rate. In contrast, states reliant primarily on chemical feedstock taxes
15
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may experience reduction in revenues due both to the effect of the tax on substitutions, and
the ease of relocating production activities and use of such feedstocks to other states.
Use of a feedstock tax on hazardous substances may reflect perceived equities in the
distribution of revenue burdens for the cleanup of hazardous sites. In effect, the argument
runs, the producers and users of hazardous substances of today should bear part of the
burden for the releases of hazardous substances disposed of in the past; there is a
presumed commonality of financial interest (viz. some of the same companies are affected),
and a cultural ethic fixing responsibility on a portion of the community. The fairness of
this approach and the extent of an actual identity of interest between current users and past
disposers has been debated at length (including prior to the enactment of SARA in 1986).
The issue cannot be empirically resolved because (1) actual commonality of financial
interest varies company by company and state by state, and (2) the cultural component is
at least as important as the economic one in a decision to enact the tax.
In general, a hazardous substances feedstock tax can provide only a portion of the
revenue needed for state Funds, and its secondary economic effects will need evaluation by
any state considering its use.
Taxes on Business
Pennsylvania is the only state in the study that partially funds its superfund by a tax
on the business community not linked to use of certain products or disposal of certain
wastes. Its Capital Stock and Franchise Tax was a previously existing tax on businesses
providing a substantial part of the state's annual revenues. One-half mill of the 9-1/2 mill
tax has been diverted by the legislature to the state's cleanup Fund.11
Revenue from this source is similar to general fund revenues, except that (1) the
dedication of a specific millage to the Fund assures a steady level of funding not
dependent upon annual appropriation, and (2) taxing the business community results in a
different distribution of the ultimate burden to the public. It is impossible to determine
whether the distribution is more or less equitable than general income taxes or sales taxes.
11. A "mill" is 1/10 cent. A tax expressed as a mill rate is 1/10 cent tax per dollar of
value of what is being taxed; put another way, a one-mill tax is a tenth of a percent tax.
The half-mill Pennsylvania tax devoted to the cleanup Fund switches on or off depending
upon the prior year's expenditures and the year-end balance in the Fund.
16
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An advantage of this type of tax over other Fund revenue sources is that it tracks the
general economy of the state. The state pays for what it can afford, but does not target a
particular sector.
Such taxes do not influence behavior related to waste disposal unlike feedstock
taxes and waste fees.
Appropriations
Appropriations from the general fund are a major source of revenue for nineteen
states' Funds, and in five of the nine study states. Appropriations are a major revenue
source both in states where the Funds are small (e.g. North Carolina) and in some states
with substantial Funds (e.g. Pennsylvania, New Jersey). Appropriations are not used at all
in some states with historic aversions to taxation (New Hampshire, Colorado, Texas).12
Appropriations from the general fund are not as reliable as funding with designated
sources. Appropriations may be cut, conditioned, or altered. Public expectations are not the
same for appropriated funds as they are for designated sources. Where revenues are truly
targeted, they are viewed as belonging to the program. It is more difficult for a legislature
to divert an existing self-funded superfund than it is to refuse to appropriate a given
amount of money in any year. Funds that depend upon appropriations are also susceptible
to cuts if they are not depleted each year. Where a Fund is seen to accumulate monies, it
is difficult to maintain the impetus to appropriate general funds (for which there is much
competition).
Appropriations are most useful in states with relatively stable tax bases and healthy
economies. In states where funds are tight, often a targeted fee or tax is preferable in order
to provide a stable source of funding. Bond issues may also provide an alternative to
appropriation-based funding (or a safety net to avoid the consequences of fluctuations). The
vulnerability of appropriation-based funding is evident in the case of North Carolina, where
no funds were appropriated for the 1989-90 biennium, thus leaving the state with no
recourse if RPs decline to settle (because the Fund balance is too low to conduct a
remedial action at even one site). On the other hand, appropriations are an important
supplement to other revenue sources in the Pennsylvania and New Jersey programs. Neither
12. Texas does have modest appropriations for its Spill Response Fund, but not for its
superfund program.
17
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of those programs depends upon appropriations, but the availability of such funds provides
more flexibility in coercing RP settlements and in responding to situations where state
funds are needed (e.g. for orphan sites, and removal actions).
Appropriation-based funding serves no secondary function, in contrast with fees and,
to a lesser extent, feedstock taxes.
Fines and Penalties
In general, fines and penalties are minor revenue sources for state cleanup Funds.
Assesments and collections on an annual basis are not reliable enough to serve as a steady
income source. Moreover, the amounts generated by fines and penalties are ordinarily well
under $1 million per year—particularly if the penalties are limited to those for waste
violations (rather than including air and water pollution).
In its 1989 survey of possible funding sources, North Carolina's Governor's Waste
Management Board rejected penalty-based funding at least in part because of a concern that
"use of enforcement penalties to meet funding needs could impart the impression that the
enforcement policy was influenced by the need for funds." Such concerns have not
impeded the legislatures of 38 other states, which have authorized the use of fines and
penalties as partial funding sources for their state cleanup Funds.
Virtually no Fund of reasonable size relies on penalties except as a minor revenue
source.
Interest
Interest can be an important component of state Funds. Seven of the nine study
states credit interest on their Funds to the Fund.13 Only Oregon and Illinois do not do so.
Interest is of particular importance in Colorado, where it now accounts for approximately
26% of annual revenues to the Fund. If not for the interest component, and deferral of
expenditures in order to maximize interest receipts, Colorado's Fund would be unable to
meet its CERCLA match obligations.
In most states, interest on state Funds is credited to the general fund absent
legislative direction. Interest on state cleanup Funsd provides one way of increasing
13. New Hampshire, one of these seven, recently determined that it had failed to credit
interest to the Fund as provided by law.
18
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amounts targeted to cleanup activities. However, if a Fund must rely on interest in order to
meet its obligations, it can become difficult to spend Fund monies even where most
desperately needed. The state agency may be forced to hoard its resources in order to
maximize interest. This may produce a perverse chain of events: a state lacking sufficient
monies in its Fund may refrain from expending those monies in order to increase interest
receipts. As a result the Fund increases, and is perceived by the legislature and the public
as (1) large (i.e. probably adequate), and (2) not needed (because it is not being expended).
This condition may produce a reduction by the legislature of other revenues entering the
Fund, or create difficulty in persuading the legislature that additional revenues are needed
(e.g. Minnesota).
EPA Assistance
Some states rely heavily on EPA grant funds for administration of their programs.
State programs that rely on this source as their primary source of funding, however, are in
general ill-equipped to deal with cleanup of non-NPL sites because most EPA assistance is
targeted to management of the NPL program. The most flexible of the state program
support grants, the Core Program Cooperative Agreement, is limited to $250,000 per year.
EPA provides support for PA/SI work at discovered sites. However, most of these sites are
rejected for listing on the NPL and then must be handled with state resources if they are
to receive any further attention.
However, most EPA grants are targeted to work on NPL sites. States receive multi-
site and single site cooperative agreements to pay the federal share of remediation costs at
state-lead NPL sites. Some federal monies are also available through Management
Assistance Grants for state oversight activities.
Cost Recovery
Cost recovery, which is provided for by all states, is also potentially significant. It
is not a revenue source of the same type as the others. That is, it replenishes certain
program expenditures that can be recovered from responsible parties, rather than serving as
a continuing revenue stream or enlarging the Fund. (It may, however, enlarge the Fund if
the state has an active program for recovery of punitive damages). The utility of cost
recovery depends upon: the state's ability to spend funds, the use of Fund monies at sites
19
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where there are solvent RPs, and the state's enforcement approach. If a Fund is designed to
deal primarily with orphan sites (or if such sites are a priority for the state), then cost
recovery is likely to be less frequent. On the other hand, if a state has a substantial
number of sites with RPs and without RPs, it may make sense from a financial perspective
to expend funds first on sites with RPs, so that cost-recovered dollars may then be spent
on the orphan sites. (A preferred scenario would be RP-funded cleanups on all sites with
viable RPs, thus preserving the Fund for use on orphan sites.)
Obviously, programs with cost recovery capabilities are likely to be more efficient
than programs that lack such capabilities. A state must coordinate Fund expenditures and
planned cost recoveries to ensure Fund monies are available when needed. Few states have
undertaken such planning efforts, and cost recovery remains an adjunct function or
afterthought in most programs.
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TABLE 2-2
FUND REVENUE SOURCES
Revenue # States # States
Source (50 State)1 (9 State)
Bonds 12 4
Waste Fees 29* 7
Feedstock Taxes 2 1
Dedicated Business 1 1
Taxes
Appropriations from 36 6
General Fund
Fines & Penalties 38 6
Interest on Fund 16 7
Characteristics
• Expenditure flexibility
• Large $
• Stable revenue source
• Enforcement effects
• Indirect effects on behavior
• Moderate revenue potential
• Limited indirect effects
• High revenue potential
• Stable revenue source
• High revenue potential
• Accountability to legislature
• Unstable revenue source
• Low revenue potential
• Moderate revenue potential
• Inversely proportional to
use of Fund for cleanups
* 22 states with "fees" plus 7 states with generator or disposal "taxes."
1. 50-State data from An Analysis of State Superfund Programs: 50-State Study.
EPA/540/8-89/011 (Sept. 1989).
21
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a USES OF FUNDS
State cleanup Funds have numerous limitations and designations of uses. Some are
limited to emergency response (Wyoming), others to study and design (Utah), others
primarily to the CERCLA match (Colorado). In other states, the Funds may be used for a
multiplicity of purposes: site identification, RP searches, site assessment, emergency
responses, removals, remedial actions, victim compensation, loan funds, grant programs,
etc.14
"Restricted use" Funds limit a state's flexibility in dealing with hazardous sites.
Restrictions often include requirements that other sources of funding or remediation be
exhausted prior to expenditure of the state Fund. While such a restriction is logical, some
of its manifestations in the states produce peculiar results. For example, in Texas, the Spill
Response Fund cannot be used unless the state has exhausted its other funding options
including those under the Solid Waste Disposal Act (which includes the state's Hazardous
Waste Disposal Fee Fund); this means that the Spill Fund is sometimes not available even
where the flexibility of that Fund would be advantageous in dealing with emergency
situations. In Pennsylvania, the Hazardous Sites Cleanup Fund is only available for
remedial actions if the state has pursued an elaborate notification and negotiation procedure
(except for interim responses). This has led to the state relying more heavily on interim
responses. In general, legislative prescriptions of preconditions to the use of state Funds
vary little from what prudent state administrators would do in any event. However, the
inclusion of these prescriptions in law may make it difficult to develop a flexible response
where, for example, state monies are needed as a prod to a recalcitrant RP. States that lack
preconditions, such as New Jersey, have substantially more flexibility and thus bargaining
leverage vis-a-vis RPs.
Some state Funds are used for administrative costs while others may not be used for
such purposes. For example, the Pennsylvania program is funded entirely out of the
Hazardous Sites Cleanup Fund, while the North Carolina staff is funded by general
appropriations and FJ>A grants, rather than from the Inactive Hazardous Sites Cleanup
Fund. The Illinois program's administrative costs come from the "Clean Illinois" Fund.
14. See Table IH-8, An Analysis of State Superfund Programs: 50-State Study (Sent
1989). F'
22
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There does not appear to be a significant difference among programs based on whether
their administrative funding comes from the state Fund or not. This factor is highly
important, however, in analyzing Fund adequacy or making cross-state comparisons.
HI. HOW ARE FUNDS MADE AVAILABLE FOR USE?
A number of states impose additional conditions to the expenditure of monies
already contained in their Funds. A few require legislative "appropriation" of the monies
from the Fund to the designated use. Such a requirement appears to be designed to
maintain legislative control over the purse strings. It may be quite practical in connection
with CERCLA matching fund requirements, particularly where the amount required is large
and the state budget is not. Such a requirement is more problematic where it applies to
state non-NPL sites where the agency may be in negotiation with RPs. The state agency is
less able to use the "club" of possible expenditure and cost recovery if the RP knows that
it must go through an appropriations procedure.
Illinois is one state that has a special appropriations requirement—the agency must
obtain legislative approvals for expenditures in excess of $1 million at a site. The agency
has circumvented this requirement, however, by either using money in its bond fund (which
arguably contains no such stricture) or by simply expending money based on the approval
implied in the legislature's appropriation of monies to. the Fund. Oregon requires the
agency to obtain approval of a legislative committee in order to use monies in its new
Orphan Site Account (bond fund). Oregon has not yet had any experience with this
provision. New Hampshire may expend its Fund monies only with the approval of the
governor.
IV. EVALUATION OF THE ABILITY OF
FUNDS TO MEET CLEANUP NEEDS
The task of assessing the adequacy of a state Fund to satisfy its cleanup needs is
very difficult, requiring considerable information on the magnitude and timing of the
demand and supply of funds. The information required to assess Fund adequacy includes
the following:
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(1) accurate projection of CERCLA match requirements (timing, amounts, and
potential cost recoveries);
(2) site discovery expenditures to identify non-NPL sites potentially requiring
remediation;
(3) completed site assessments for discovered sites;
(4) accurate projection of likely fund needs for the assessed sites, including a
determination of the likelihood of private funding of cleanups; and
(5) analysis of the revenue streams and changes in cash position of the Fund (i.e.
assessing both revenues and capacity of the Fund to handle periods of high
demand).
The assessment of these five factors is complicated by the period of time over which
"adequacy" is to be assessed. Long-term needs and costs are quite difficult to project given
the uncertainty of site discovery, the need for remedial investigations of the sites, the
variability of cleanup costs, and the uncertainty of responsible party participation in
cleanups. The site discovery issue is one that is program-driven; some programs place a
low priority on site discovery, making the assessment of fund adequacy less costly but also
incomplete. Also, given the time required for processing a site from discovery through
remediation, few programs can accurately assess the magnitude of future O&M costs.
Some of the study states have undertaken efforts to project Fund adequacy. The
majority have performed assessment of at least a few of the factors noted above. For
example, Colorado has analyzed (1), (4), and (5) for CERCLA matching obligations. North
Carolina has assessed its needs, but is relying heavily on "voluntary" cleanup efforts by
RPs to make up for the lack of state funding (see Chapter Three). Other states have
performed analyses of varying degrees of specificity. New Hampshire, for example, is
hampered by weak fiscal controls and poor site identification efforts. States in which legis-
latures meet every two years (e.g., Oregon), will often prepare short term projections of
funding needs to justify budgeting requests.
Any state program should be able to do an analysis of its Fund and funding needs
based on the five (5) factors above. Such analysis should be more sophisticated than a
"back-of-the-envelope" estimate; and should be capable of being updated on a regular basis.
A key weakness in some states is in site discovery and assessment. Failure to do adequate
24
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site discovery or to place sufficient emphasis on assessment may result in "surprise"
funding needs that cannot be absorbed by the Fund.
Other important measures of Fund adequacy relate to the level of RP-funded
cleanup that can be induced. Chapter Three identifies the factors that increase and decrease
RP participation.
25
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26
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CHAPTER THREE
RESPONSIBLE PARTY PARTICIPATION
I. BACKGROUND
The Need for RP Participation
Participation by RPs is essential if a state cleanup program is to be effective. No
state, not even New Jersey or New York where large sums of money are available for
cleanups, has enough money available to pay for all the cleanups that will be needed. RP
participation, either by conducting the response or paying for a Fund-financed response
after the fact, is necessary to conserve or replenish a state's Fund for use on orphan sites
and sites where RPs fail to do the work. Furthermore, cash flow and state staffing
constraints mean that states cannot finance every site for which a response is needed at a
particular time.
In addition to these financial imperatives, there are timing and policy reasons why
states must be able to obtain RP participation. RPs may be able to clean up sites faster
than a state because states typically must go through more cumbersome and time-
consuming procedures to hire cleanup contractors than private parties. The actions taken
by a state to obtain RP participation can also affect the future behavior of RPs. An RP
may decide to settle at other sites based on what happened at an earlier site. This does
not necessarily mean that the state must give the RP special benefits in early cases to
encourage future settlements. The RP may be influenced to settle in the future if it sees
that the process is fair and that it will not get a better deal from the state by "lying in the
weeds" or otherwise seeking to avoid liability.
This influence can be extended to other RPs if the state takes similar actions, such
as issuing cleanup orders or aggressively pursuing cost recovery, in several cases. Such
actions are most likely to influence unrelated RPs if the state establishes a public
perception of success in obtaining RP participation by publicizing its actions and the
results. States and the federal government are also starting to see some deterrent effects
from superfund liability in that RPs are actively improving their current waste practices to
try to avoid potential cleanup liability in the future. Thus, enforcement efforts to obtain
RP-lead cleanups can yield dividends beyond the cleanup in the specific case.
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The need for RP participation is more critical at certain stages of the cleanup
process than at others. RP participation may not be necessary for an emergency response.
Many states have extensive experience in responding or overseeing RP responses to oil or
hazardous substance spills. Whether RP participation at this stage is critical will depend
on the state's ability to respond immediately. This, in turn, may depend on how much
money the state has available and how quickly it is able to use that money.
Interim responses (e.g., removals), in contrast, may require substantial funds,15 which
could exhaust the funds available in many states. Eighteen states have less than 1 million
dollars that may be used for superfund-type cleanups.16 In these states significant RP
participation may be needed at this early stage.
In addition, many states must obtain RP participation at the RI/FS stage if they are
to be able to move a significant number of sites forward at the same time. Remedial inves-
tigations (RIs) can cost up to $750,000 or more,17 which is relatively expensive considering
that thirty-six states have Fund balances of less than $5 million.18 Feasibility studies (FSs)
are generally less expensive, but may still cost $250,000.19 Absent RP participation, states
with Fund balances of only a few million dollars would be able to act on few sites if the
RI/FS costs approach these upper figures.
The need for RP participation is greatest at the RA stage because it is by far the
most expensive stage of the cleanup process. Such costs can easily be 10-20 times higher
than the investigation and design stages. Cost estimates for RAs on non-NPL sites are
15. For example, Pennsylvania's statute defines interim responses to be any cleanup
action requiring less than $2 million and 12 months to complete. See discussion of
Pennsylvania statute in Part n infra.
16. "An Analysis of State Superfund Programs: 50-State Study," Table HI-7, p. 66,
Environmental Protection Agency (EPA/540/8-89/011) (1989)(heremafter "50-State Study"). '
17. The Minnesota Pollution Control Agency (MPCA) estimates that RIs can cost
anywhere from $50,000 to $750,000. See the discussion in Minnesota, V. Remediation
Process, 4. Typical Site Timeline in Part n infra.
18. See 50-State Study supra, at 66.
19. The Minnesota PCA estimates that an FS will cost $25,000-$250,000. Id.
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often in the $1-5 million range,20 and yet only 13 states have Fund balances greater than
$5 million.21 Therefore, assuming the present level of state resources remains relatively
constant, RP participation is critical if states are to actually clean up more than a handful
of sites.
Benefits From RP Participation
It is widely assumed that projects performed by RPs cost less than equivalent
projects paid for by government agencies. This is thought to be due to contracting
procedures that must be followed by governments. The public benefits when costs
attributable solely to such administrative matters are reduced since the same cleanups can
be completed for less cost to society. Thus, to the extent that RP participation reduces
purely administrative costs it benefits society generally. The public is concerned, however,
that RPs may cut costs by performing cleanups that are potentially less protective of the
environment. Therefore, cost savings must be monitored carefully to ensure that the
quality of cleanups is not compromised.
RP participation may yield benefits that extend beyond the particular site, such as
the development of new cleanup technologies. In contrast to most state agencies, RPs have
the incentive and capability to develop innovative technologies.22 Some RPs have
demonstrated a particular interest in new technologies that may result in permanent
remedies. These RPs are motivated to decrease total potential costs by eliminating the
potential for future liability.
20. Estimates for final cleanup action range from $1-$10 million in Minnesota to more
than $50 million for one or more sites in Pennsylvania. See Part II infra, discussions of
Site Remediation and Funding respectively.
21. 50-State Study, supra at 66.
22. In 1989 Minnesota PCA officials reported that some RPs in that state were develop-
ing innovative technologies but that the MPCA staff had little time, resources or incentive
to pursue innovative cleanup technologies. MPCA has since devoted enhanced staff efforts
to the use of such technologies.
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Drawbacks to RP Participation
RP participation, particularly where the RP is performing the work, has potential
disadvantages as well as advantages. The major concern to most government agencies is
the degree to which they can trust the work done by the RPs. The level of concern ranges
from questions about quality control to non-reporting or misrepresentation of data.
A significant reason that RPs want to do the work is that they can then control the
costs. This may cause the government agency and the public to be concerned that
protection of health and the environment will suffer for the sake of cost-control. This
issue seems to be of greatest concern where RPs are performing the RI/FS since remedy
selection, design and construction depend on the data and analysis done in the RI and FS.
Thus, many staff within the states and EPA are wary of RI/FSs conducted by RPs.
RP Motivations
In order to be effective in obtaining RP participation in cleanups states must
understand what RPs consider when deciding how to respond when they are involved at a
site. Economic self-interest is obviously a major factor in their deliberations. Assuming
that there is little doubt that a particular RP is liable,23 that RP can be expected to act in
the manner most likely to minimize its costs taking into account contingencies and the time
value of money. Among the economic contingencies important to RPs are the timing of
publicly funded action and cost recovery, the likelihood that penalties or punitive damages
will be imposed, the ability of the government to prove its actions were not inconsistent
with the NCP and the validity of the government's costs.
The widely held assumption among RPs is that response actions performed or paid
for by a government agency will be more expensive than those performed by an RP. If an
RP knows that the agency will be able to recover all of its costs from the RPs, including
interest from the time the money is spent, then the RP will expect that it can reduce its
ultimate cost by agreeing to perform the response action rather than letting the government
do it at greater cost. Information is critical to RPs' abilities to evaluate these costs. If the
23. Except where explicitly noted to the contrary, this chapter proceeds from the
assumption that the state agency has sufficient solid evidence to make out a prima facie
case of liability against at least one RP. Since this chapter focuses on obtaining RP
funding or performance of response actions it also assumes that the RPs have at least some
assets that can be applied to a cleanup.
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RP has no information about the agency's ability to recover its costs, either because the
agency has no track record or because the RP does not know how to find such
information, or does not know how its costs for performing the work might compare with
the agency's, then it will not be able to accurately assess its economic self-interest.
Another key factor in an RP's calculations is the extent of delay between the date
the agency determines that RPs will not agree to perform the response action and the date
the agency can hire a contractor to begin work. Since the agency is not spending money
during this period it cannot charge interest and thus cannot offset the value to the RP of
the use of its money during the delay. Therefore, the ability to quickly hire a contractor
can have a major impact on the economic considerations motivating RPs to perform
response actions. When there are significant delays before a state-funded response begins,
the RPs' economic benefit comes at the expense of the public's interest in speedy cleanups.
H. COMMON EXPERIENCES AMONG THE STATES
Many of the states report similar results in obtaining RP participation. Large
numbers of RPs are participating in virtually every state that has an active cleanup
program. Although statistics are largely meaningless as measures of the effectiveness of
enforcement programs,24 RPs are typically taking the lead on more than half of the projects
in active states.25 RPs are also committing large sums of money to perform studies and
24. See "Comparisons Among States" below for a discussion of some of the problems
with statistics on RP participation.
25. Acknowledging the limitations of statistics, a few may give a sense of the scope of
participation by RPs. New Jersey is currently conducting 85 Fund-lead projects while it
has more than 500 in the RP cleanup category (this includes enforcement cases where the
RPs have not agreed to do the work). In Minnesota 73 of the 104 sites where some
response action has been taken are RP-leads. In Illinois RPs are conducting approximately
60% of the cleanups initiated to date. Texas has had a somewhat different experience in
that of the first ten sites placed on its registry only three resulted in RP-lead response
actions. The situation improved slightly for the next 17 sites added to the registry as RPs
are taking action at 6 sites. Similar figures are not available for Oregon, Pennsylvania and
North Carolina because their programs are quite new; however, North Carolina expects to
rely heavily on RP cleanups. Colorado does not really have a comparable cleanup program
so RP participation rates do not exist for that state. Finally, this study did not reveal
similar data about the New Hampshire program.
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cleanups-typically significantly more money in the aggregate than the state is spending.
This phenomenon appears to be unrelated to whether a state has an aggressive enforcement
program, primarily uses incentives or is essentially passive.
Many states are also seeing increasing numbers of voluntary cleanups performed by
RPs outside of the "superfund" or enforcement context.28 Part of the motivation for these
cleanups may be to avoid the superfund process and cleanup standards.29
A number of states have reported that early in their programs RPs were willing to
sign consent orders to fully remedy sites even before the RI/FS was completed.30 This is
Another study found that as of December 31, 1988, RPs had completely financed
60% of the cleanups of non-NPL sites and shared (through mixed funding with the state
government) in financing another 3% while the states financed 24% of the site cleanups.
"Hazardous Waste Sites: State Cleanup Status and Its Implications for Federal Policy,"
GAO RCED-89-164 at 29 (August 1989). In comparison, during the same period 47% of
NPL site cleanups were financed by EPA while 24% were financed by RPs and 27%
involved mixed funding. Id.
26. For example, in New Jersey RPs completed 135 privately-funded major remedial
actions (defined to be those costing more than $100,000) between 7/86 and 12/88 at a cost
to the RPs of $29.2 million and to the state of $550,000. See Part II, New Jersey IV.
Funding, infra. During the life of Minnesota's program RPs have spent or committed more
than $130 million on response actions while the state spent $12.4 million. See Part II,
Minnesota I. Introduction, Statistics, infra. New Hampshire officials estimate that RPs have
spent over $20 million on response actions during the 8 years of its program while the
State has spent $5 million. See Part II, New Hampshire, I. Introduction, Sites, and
Appendix 2, infra.
27. New Jersey, Minnesota and Illinois, for example, have aggressive enforcement
programs and are achieving both high rates of RP participation and large sums of money
committed by RPs. New Hampshire and Texas, however, are also experiencing significant
RP participation with enforcement programs that are much more limited, whether due to
resource or legal limitations. Although there are no statistics for the North Carolina
program, virtually all of the response actions there are performed by RPs because the State
has limited resources and believes it cannot afford to finance remedial action itself.
28. For further discussion of some methods that states are using to encourage
"voluntary" cleanups see Chapter Four, infra.
29. Certainly other factors also motivate RPs to conduct such cleanups, including the
ability to retain control of the cleanup, the public relations impacts of conducting a
voluntary cleanup, and the effect on property values.
30. Minnesota officials were perhaps most cognizant of this phenomenon, but other states
reporting similar experiences include Texas, Oregon, and North Carolina.
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certainly a desirable outcome for states since they no longer need be concerned about
discovering RPs, litigating against RPs, negotiating with RPs or performing the other tasks
related to enforcement. More recently, RPs typically have resisted such comprehensive
agreements because they do not know what the cost of the remedy will be until after the
RI/FS is completed and the remedy selected.
Several factors may be motivating this behavior. State agency officials have
described a "honeymoon period" at the beginning of new programs when each side is
disposed to trust the other without much questioning of the potentially differing interests of
each. Some state officials attribute this phenomenon to RPs being less sophisticated about
the process when a program is new and thus more willing to accept the state's first demand
for comprehensive action.31 Another possible explanation is that in the early to middle
1980s the entire superfund process, at the federal and state levels, was new and all parties,
RPs and government agencies, were unsure of how the process would work and what
tactics would be best. If this hypothesis is valid, states that are currently developing
programs could not expect a similar willingness by RPs to agree to perform remedial
actions before the completion of the RJ/FS.32
Another alternative explanation is that RPs that have not been involved in a
superfund site cleanup before may not fully appreciate the potential costs of remedial
actions. Similarly, if the agency first seeks an agreement to perform the entire response
action, the first RP to receive such a demand cannot know whether the agency will stick to
that position. The first few RPs may, therefore, agree to such terms. Once one or more
RPs convince the agency to accept something less, however, that knowledge will be
quickly disseminated within the RP community and all RPs will insist on the same
treatment.
31. Minnesota PCA officials articulated this theory based on their experience from the
start of Minnesota's program in 1983 through 1989.
32. This explanation does not account for the experience in Oregon and North Carolina,
which have recently had RPs consent to comprehensive response actions. Possibly those
agreements were reached with smaller companies or RPs that were for some reason isolated
from the national developments in the superfund process.
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HI. COMPARISONS AMONG STATES
Quantitative comparisons of RP participation rates in different states cannot be made
with an acceptable level of confidence. There are simply too many variables that affect
RP participation for statistical comparisons to be valid. Furthermore, states define their
universes of cases against which an RP participation rate is calculated quite differently.
For example, some do not list sites where RPs volunteer to do the work, while others may
count sites where there is minimal state oversight of RP cleanups of their own property.33
Some qualitative comparisons may, however, be possible.
Some of the variables that affect RP participation are beyond the state agency's
ability to control. For instance, the types of sites vary dramatically among states. Some
states have many industrial sites while others may have few such sites but many landfills
that are releasing hazardous substances. These differences can affect or even determine the
type of remedy chosen and the cost. Sites are also obviously quite different in their under-
lying soils, geology, and hydrology, all of which will affect the remedy and its cost. To
further complicate matters, RPs vary from state to state as well as from site to site. In
states where landfills are a significant problem many of the RPs may be municipalities.
This presents special problems for states since municipalities are legislative creations of the
state.
Some of the other variables that make it difficult to make valid statistical
comparisons are within the state agency's control. These include the level of cleanup
required, the types of remedies selected, the enforcement tools available for use and the
ones used by the agency, the amount of money available for state cleanups, the ease with
33. Most states calculate their RP participation rate using the total number of sites on
which some cleanup activity is taking place as the denominator. Using the total number of
sites known to have releases of hazardous substances as the denominator would give a
different perspective on the scope of participation by RPs. In contrast, comparing RP
participation only to the sites where some response action has occurred tends to make the
ratio look high, since many states do not have the resources to take action unless RPs
finance it.
North Carolina provides an example of the misleading nature of "RP participation
rates." The state reports a high rate of participation, but only counts cases where there has
been some action or negotiations. Since the state has funded only one state-lead removal
and never issued a unilateral order the rate is close to 100% simply because the state
excludes all cases of non-participation from its definition.
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which state money can be used, and the types of actions for which state funds are used.
For example, a state with no Fund or a Fund limited to emergency response will have
100% RP participation because there is no alternative. In contrast, a state focusing on
orphan sites will have a relatively lower RP participation rate-not necessarily because its
program is ineffective, but because it has elected to devote its resources to a different part
of the problem.
Quantitative comparisons of RP participation would also be misleading because that
is only one of several methods of obtaining cleanups through the "superfund" process.
States can achieve site cleanups through state and federally funded actions as well as RP-
funded ones. States must consider factors such as timing, availability of resources, future
deterrent effects and control over the cleanup in deciding which source of funding to use.
RP participation may be of varying importance depending on the stage of development of
the program or the availability of state or federal money. In addition, there is a lag
between the time enforcement actions are taken and when the effects are seen in increased
RP participation due to deterrence. Therefore, states in the early stages of developing their
programs will not have seen the deterrent effects of any enforcement actions.
Qualitative comparisons of states' experiences with RP participation are possible,
though there are limitations. Such comparisons are useful primarily for evaluating the
methods states use to obtain RP participation. The following analyzes the many techniques
or tools that states use to obtain RP participation in cleanups. It focuses on the extent to
which the technique or tool is effective in eliciting RP participation and the cost to the
state or the public interest in achieving the goal of RP participation. Costs to the state
include transaction costs as well as direct cleanup costs (such as are required for mixed
funding agreements).34 Costs to the public interest include lesser reductions in the risks
from the sites-whether from lower levels of cleanup, cleanups that are not permanent, or
cleanups that have have a higher degree of uncertainty.
34. Other potential costs to the state include the time value of money if cost recovery
does not include recovery of interest from the time the money is spent, personnel costs,
and administrative costs.
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IV. TECHNIQUES OR TOOLS THAT INCREASE RP PARTICIPATION
WITH NO NET COSTS TO THE STATE OR PUBLIC INTEREST
TABLE 3-1
ENFORCEMENT TOOLS
State
Colorado
Illinois
Minnesota
New
Hampshire
New Jersey
North
Carolina
Oregon
Pennsylvania
Texas
Other States
TOTAL
Strict
Liability
X
X
X
X
X
X
X
24
31
Agency author-
Joint & ized to issue Punitive
Several unilateral Orders Damages
X1 3X
X
X X
X 3X
X X
X2 X 3X
X3 X 3X
X4 X 2X
15 No data 17
23 22
Civil Penalties
$10,000/violation
and $1000/day
$20,000/day
Up to $50,000/day:
$25,000/violation +
$25,000/discharge
$10,000/day
violation
$10,000/day
$5000-25,000/day
$10,000/day
38
45
1. Not in statute; state argues for strict, joint and several liability.
2. Common law rule applies that if harm is indivisible and not capable of apportionment, joint and several
liability applies.
3. Legislative history indicates joint and several liability.
4. Liability is divisible where liable party establishes by a preponderance of evidence that it is liable
for a portion.
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Techniques That Have A Major Effect
Fund-Lead/Cost-Recovery
The primary method that has been effective in obtaining RP participation to date
has been the ability to make a credible threat that if the RPs do not finance the response
the agency can quickly use state funds to take action at a site and recover the costs from
the RPs.35 The availability of this Fund-lead/cost-recovery method can motivate both types
of RP participation-payment of a state's entire costs of response after the fact and RP
performance of the response as directed by the agency. To be effective in motivating RP
participation this method requires that a state agency be able to use several enforcement
tools in coordinated fashion:
Adequate funding. The first essential tool is a Fund of sufficient size to allow the
state to fund several projects at one time while retaining the flexibility to add other fund-
lead projects on relatively short notice. The balance necessary to meet these objectives
will obviously vary depending on the number of sites a state has and the projected expense
for the remedies. States can, however, make plans based on the experience of other states.
Such experience indicates that RI/FS costs can easily top $500,000 and that a single RA
will likely cost more than a million dollars. Thus, for virtually any program that has
multiple sites a minimum of several million dollars would be needed to give the agency
the ability to promptly fund several projects at the same time.
Cost recovery. The second tool that an agency must have if it is to make fund-
lead/cost-recovery a credible threat is the ability to recover the state's costs from the RPs.
Most state legislatures have authorized their state agencies to pursue cost recovery and,
even if such authority is unclear or incomplete, the state may use section 107(a)(4)(A) of
35. This does not necessarily mean the Fund-lead-cost-recovery technique is the most
effective of the potential methods of obtaining RP participation. It is, however, the most
effective of the techniques used to any significant degree by the states.
Illinois, Minnesota and New Jersey have each had cleanup programs for at least 6
years and all report that the ability to spend Fund money to remedy a site followed by
cost recovery provides a major incentive to RPs to agree to do the work themselves.
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CERCLA.36 Simply having the authority to recover costs is, however, not sufficient to
increase RP participation; increased RP participation comes only after a state demonstrates
in at least one case that it will recovery all of its costs with little delay.
Cost recovery achieves RP participation by working on two levels; as the method of
obtaining RP payment for the response action in the individual case, and as a deterrent to
RPs in other cases who would otherwise seek to avoid their responsibility. Each level
depends on the state's ability to recover all of its costs. Failure to recover all costs has an
obvious direct effect on the individual case--the state must bear the burden of the
unrecovered costs. The effect of such failure on other cases is even more harmful. The
deterrent effect of cost recovery is based on the RP's comparison of its projected costs if it
performs the response with the projected costs if the government contracts for the work
and recovers those costs. Knowledgable RPs investigate the government's record of
recoveries to determine if it consistently recovers all of its costs. Every dollar of costs
that the agency is unable to document and recover in a particular case reduces the
difference between what the RP would be required to pay in the two situations and
therefore reduces the incentive for RPs in other cases to agree to do the work.
A corollary to this principle is that RP participation by paying the state's costs after
the fact is a loss to the state and the public interest to the extent that the agency cannot
recover all of its costs, including interest.37 Thus, implementation of the authority has been
the key to whether cost recovery is effective—the threat alone is not sufficient.
Speed and flexibility of use of the Fund. Two factors that can greatly enhance the
effectiveness of Fund-lead/cost-recovery as a method of prompting RP participation are the
ability to use Fund money quickly and the flexibility to move funds from one project or
activity to another depending on strategic considerations. The first requires that the
36. CERCLA provides that owners and operators of facilities at which hazardous sub-
stances were disposed of, generators of hazardous substances, and transporters of hazardous
substances, are liable for all costs of response incurred by a state not inconsistent with the
national contingency plan (NCP). 42 U.S.C. 9607(a)(4)(A). This authority may be broader
than a state's own cost recovery authority, but it also requires the state to ensure that its
action is not inconsistent with the federal NCP.
37. This situation belongs in the category of factors that increase RP participation at the
expense of negative impacts to the state or public interest as discussed below.
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administrative process for approving a state-funded response be quick. The process used is
less important than the ability to have a decision within weeks so that delay is minimized.
The second enables a state to respond to positive or negative developments in negotiations
with RPs at different sites. These administrative matters determine the speed with which
an agency can implement a decision to take action at a particular site when RPs fail to
respond as directed by the agency. States that have been able to respond quickly (i.e.
within weeks) after identifying a site as needing a Fund-lead response have noted that RPs
become more willing to agree to do the required work when they see that a contractor is
about to be hired.38
Strict Liability
States that must meet a fault-based liability standard are severely hampered in their
efforts to enforce cleanup requirements. When a state must prove that an RP was negligent
or reckless (or other standard based on some level of fault) in contributing to the release of
hazardous substances, it must use significantly greater resources in gathering evidence to
prove the claim. In many instances such evidence no longer exists, and thus an RP that
may have been at fault in contributing to the release may escape liability. Probably more
commonly, the RP's actions may not meet the fault standard. Both situations reduce the
pool of RPs available to fund the response, but the former may allow the most culpable
RPs to avoid liability simply because of poor recordkeeping, memory loss, or loss of
records over time. Where evidence of fault does exist, the agency will generally need to
spend more personnel time and money obtaining that evidence than would be required to
prove that the RP contributed to the release of hazardous substances. Thus, without strict
liability RPs have little incentive to participate in a superfund cleanup until a judicial deter-
mination of fault is made or appears inevitable.
When liability is strict the agency's job is simplified; it need only establish that a
release has occurred or is threatened and that the PRP contributed to that release. Evidence
of the release is likely to be obtainable through public records, testing and other traditional
methods of investigation that yield objective results. This contrasts with the type of investi-
38. New Jersey, Minnesota and Illinois have reported that once RPs realize that the
state agency is able to get contractors onto the site within a relatively short time, the RPs
are much more likely to sign consent orders or otherwise agree to do the work.
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gallon that may be needed to prove fault since that evidence is often within the control of
the PRP or is more subjective. Thus, strict liability allows a state to concentrate more of
its resources on activities directly related to cleaning up the site, such as site assessment,
RI/FS, and remedial design, rather than proving that the RPs' actions that contributed to the
release of hazardous substances met some standard of fault.
Strict liability is an incentive to RPs to participate because it eliminates possibly the
most subjective, or least predictable, methods of avoiding liability—arguments that the RP
was not culpable. Its value to states, however, is less in the incentive it provides to RPs
than in the fact that it allows the state to use its resources most effectively to obtain
cleanups.
Joint and Several Liability
Joint and several liability for cleanups is another enforcement tool that states have
found to be a significant factor in obtaining RP agreements to perform cleanups. The
possibility that a single RP may be held liable for the entire cost of cleaning up a site
where many other parties may also have contributed hazardous waste motivates RPs to
seek out other RPs and to negotiate to share responsibility for the response specified by the
government. Because each RP's effective liability is reduced by the participation of the
others in the group, joint and several liability results in increased RP participation in multi-
RP agreements. Thus, although there are various countervailing forces,39 joint and several
liability provides an incentive for the identified RP group to investigate the existence of
other RPs and to obtain their participation in the response action. For these reasons joint
and several liability is probably the most significant factor motivating multi-RP agreements
with state agencies.
Joint and several liability allows the state agency to concentrate its enforcement time
and resources on obtaining evidence of liability rather than also being required to establish
the share of liability that is appropriate for each defendant. This can be a major advantage
to the government. It is extremely difficult to determine precisely how much of each type
of waste was placed at a site. In addition, allocations are usually based, at least roughly,
39. These include very large RP groups, disparities in the volume or toxicity of
materials contributed, and differing types of responsibility such as operators versus
generators
40
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on the RPs' relative contributions to the cost of cleanup. The knowledge about synergistic
and other effects of releases of multiple chemicals is, however, incomplete. Therefore, it is
difficult to determine with any degree of assurance what costs can be attributed to
particular contributors. These uncertainties can make liability allocations so complex that
they could easily overwhelm a state's staff. Thus, joint and several liability allows the
government to direct its resources at issues that relate directly to cleanups. In this context
joint and several liability can be seen as a method of requiring that RPs, rather than the
government, bear the transaction costs associated with distributing the burden of a shared
liability.40
Order Authority
Another major enforcement tool that has a significant effect on RP participation is
the authority to order RPs to take action. In its most effective form the state agency is
authorized to issue administrative orders that it may enforce in court, but which the
recipient has no right to challenge prior to such judicial review. In other words, if the
recipient fails to comply with the order the agency has the option of enforcing the order, at
which time the recipient would receive its due process right to a hearing, or taking action
itself using Fund money. The latter option triggers the cost recovery provisions, and the
combination of an outstanding order and state response costs raises the possibility of
punitive damages if they are authorized.41
The key to making order authority an effective mechanism for obtaining RP partici-
pation is, like Fund-lead/cost-recovery, the ability to act quickly and to make RPs feel the
effects of that action quickly. Thus, the strongest statutes authorize the state agency to
issue orders administratively on the basis of the record before the agency; to issue orders
40. There may, of course, be situations where even a state that has the benefit of joint
and several liability will decide that it is worthwhile to perform an allocation. One such
situation might be in a case where the RPs are unable to reach agreement among
themselves on an allocation but will accept the agency as a neutral arbiter and will then
reach agreement with the agency to perform the RA themselves. In such situations the
state must evaluate the benefits it gains in terms of RP participation compared to the actual
and opportiunity costs of performing the allocation. It should also be noted that there are
professional neutrals that perform allocations as a consultative service to RPs, so states are
not the only alternative for RPs that cannot reach agreement among themselves.
41. Punitive damages are discussed in more detail below.
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regardless of whether other enforcement or funding options have formally been pursued;
and to assess civil penalties or punitive damages for failure to comply with the order
(subject to a limited good faith defense). Perhaps the most critical element of an effective
administrative order statute is that it prohibit pre-enforcement review, either administratively
or judicially, of the order.
The clearest example of such a system is §106(a) of CERCLA. Of the nine states
studied for this Report, Texas, New Hampshire, North Carolina, Pennsylvania and Oregon
have such authority. Of these, however, only Oregon is authorized to issue administrative
orders closely following the federal model.42 The others all have various restrictions or
strictures not encountered in §106. The Oregon statute and program are, however, so recent
that there is very little experience with its implementation. The experience of some of the
states demonstrates that the absence of some of these provisions need not cripple a
program, but that some such provisions may be essential.
The Illinois, Minnesota and New Jersey agencies in particular use creative ways to
avoid problems caused by deficiencies in their statutory authority to issue administrative
orders. For example, Illinois EPA (EEPA) lacks authority to issue administrative orders.
Only the independent Pollution Control Board may issue an order, and it may do so only
after a full adjudicatory hearing. IEPA has, however, created a substitute by issuing to RPs
notices of liability that describe the action to be taken. These notices trigger treble damages
if liable parties fail, without sufficient cause, to respond. IEPA has found that RPs often
comply with these notices because if they do not the state is able to move quickly to start
a Fund-lead action that would subject the RPs to cost recovery and treble damages.
On its face, Minnesota's statute is even more limited than the Illinois statute. The
Minnesota Pollution Control Agency (MPCA) has no administrative order authority, must
"request" RP participation before spending state funds and must receive authorization from
an appointed Board before taking any significant action. The MPCA has turned the
"request"43 and Board approval process to its advantage by making it highly visible and
42. Pennsylvania may apparently issue this type of order for an "interim response"
action-thai is, an action costing less than $2 million and lasting under 12 months, with no
limitations. The limitations on state unilateral cleanup orders are discussed infra.
43. The MPCA has formalized these requests by issuing a Request For Response Action
(RFRA) to each known RP.
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public-thus putting pressure on RPs. As with DEPA, the MPCA is able to begin a Fund-
lead action quickly, which increases the incentives for RPs to agree to do the work. In
fact, according to MPCA officials, significant numbers of RPs comply with Requests for
Response Action (RFRAs) even though they are not directly enforceable.
Similarly, New Jersey's Spill Compensation and Control Act authorizes the agency
to issue directives but does not specify that those directives are enforceable. The New
Jersey Department of Environmental Protection (DEP) issues directives in all cases because
they are a prerequsite to punitive (treble) damage claims. The threat of a punitive damage
claim, coupled with the state's ability to use its large Fund to finance state-lead actions, in
many instances induces RPs to agree to do the work.
In all of these states the key to overcoming limitations in their authority to issue
enforceable administrative orders has been the ability to issue a document naming the RPs
followed by prompt initiation of a Fund-lead response and cost recovery. In Illinois and
New Jersey the document is more coercive since it forms the basis of a claim for punitive
damages.
Several of the states in the study group have provisions that create more significant
difficulties in implementing their order authorities. The Texas statute allows RPs to obtain
pre-enforcement review of an order by filing a petition in the Travis County (Austin)
District Court. The order is stayed pending review and the court may also enjoin the
Texas Water Commission (TWC) from taking a Fund-lead remedial action. This provision
allows the RPs rather than the TWC to control the pace of the order process and allows
RPs to slow down the remediation process itself. In practice this provision has reduced the
utility of the unilateral order.44
Pennsylvania's statute is even more restrictive with respect to full remedial action
orders. The Pennsylvania act protects RPs from a remedial action order until the DER has
instituted enforcement action against the owner or operator under other applicable environ-
mental laws and has been unable to obtain compliance. Predictably, the DER appears to be
44. In 1987 the TWC issued orders to RPs at 7 sites; the RPs at 4 of the sites appealed
the orders. One of the orders was ignored and the RPs at the other two sites negotiated
agreed orders. See Part n, Texas, State Registry Sites, infra. 1989 amendments to the
Texas statute have marginally improved the process, but RPs may still contest remedial
action orders in court.
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concentrating its superfund enforcement efforts on interim and emergency responses
(including interim response orders) which do not require this exhaustion of other remedies.
Number of RPs
Another factor that has had a significant effect on the ability of states to convince
RPs to sign consent agreements is the number of RPs involved at a site. States have
generally found that it is easier to obtain consent agreements when there are relatively few
RPs. Recognizing that states have no control over the number of parties that contributed
wastes to a site, it is worth noting the impact of the size of the RP group because that
may affect how a state approaches a particular site.
Several states and EPA Regional Offices have noted that negotiations are much
easier to manage when the group is small. The Minnesota PCA noted particular success
with groups of less than 5 RPs. Beyond the administrative aspects of negotiating with
small groups, it appears that it is easier for RPs to reach agreement on their internal
allocation of liability when there are relatively few of them. While the internal allocation
of liability among the RPs is theoretically not a prerequisite to a consent agreement with
the state, in reality RPs resist signing until they are sure what their share of the total
liability will be.45
In order to take advantage of these dynamics, a state might choose to focus its
efforts to obtain consent agreements on sites with few RPs. Alternatively, a state might, as
the Minnesota PCA does, refuse to negotiate with large RP groups and insist that they
form a small steering committee to negotiate the consent agreement with the state. The
45. Conceivably, states that have joint and several liability could avoid all difficulties in
obtaining multi-party agreements by taking advantage of the power of joint and several
liability. Under this approach a state would select a single RP as an enforcement target and
issue an order to it to perform the necessary response. Assuming that the state chooses an
RP against which it has solid evidence and that the target RP is solvent, the state should
reach the desired result--a judgment of liability for the remedy-without needing to pursue
multiple parties. The prospect of being held solely liable for the entire remedial action will
create a strong incentive for the target RP to seek out the other RPs and obtain third-party
agreements or judgments that they are also liable, at least for contribution. In reality it is
highly unlikely that any state would pursue such an enforcement strategy. In several studies
of federal and state enforcement of superfund programs ELI is not aware of any instance
where a government agency used this approach to a site.
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latter tactic at least takes advantage of the administrative advantages of small groups of
RPs where the other positive aspects are precluded.
Factors That Have Less Significant Effects On RP Participation
Punitive Damages
The ability to impose punitive damages on RPs that refuse, without sufficient cause,
to respond as, and when, ordered (or requested in some states) has significant potential to
motivate RPs to perform the desired work. Punitive damages are authorized for just this
purpose—to punish RPs that shirk their clear duty and to deter others from attempting to
avoid then* legal duties where liability is clear. Thus, the damage amounts authorized are
significantly higher than the original liability.46
Unfortunately it is difficult to determine the true effect that punitive damages have
had on RP participation because they have been invoked only rarely. Of the states in the
study group only Illinois has litigated any claims for punitive damages.47 It is possible that
states have not pursued punitive damages because the authority to impose them has had the
desired deterrent effect and RPs are not unreasonably refusing to take action. While it is
admittedly difficult to determine the number of cases for which punitive damages would be
appropriate, most of the states hi the study group reported some experience with
46. Punitive damage amounts in state superfund statutes range from 1 1/2 to 3 times the
state's costs and are generally authorized to be awarded hi addition to the state's recovery
of its costs. New Jersey is an exception since its statute apparently authorizes "treble"
damages that include the state's costs. In reality this allows a recovery of costs plus a
punitive award of double those costs.
47. Illinois has approximately six cases pending in which it has made claims for
punitive damages. Some states in the study group were not authorized to seek punitive
damages; these included Colorado, Minnesota, New Hampshire and North Carolina. States
that authorize punitive damages include Illinois, New Jersey, Oregon, Pennsylvania, and
Texas.
Although counting punitive damage cases was not a specific objective of the 50-
State Study of State Superfund Programs, that study revealed no other cases where punitive
damages had been litigated by a state. The federal government listed about ten cases as
having active punitive damage claims hi 1988, and EPA recently won its first punitive
damage case. In United States v. Parsons. 30 ERC 1209 (N.D. Ga. 1989), the court
granted the government's motion for summary judgment on claims for punitive damages
against all but one of the defendants.
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recalcitrant RPs where there was good evidence of liability, yet punitive damages were not
imposed.*8
Despite the dearth of data on actual effects of punitive damage awards, it is
possible to analyze the expected effects. Punitive damages, particularly where they are
double or treble the amount of the state's direct and indirect response costs, are potentially
so high that RPs have significant motivation to avoid them. Even under the current
situation, where punitive damages are largely only a theoretical possibility, states report that
RPs tell them that punitive damages are one factor considered in deciding how to respond
to a cleanup order. If a state wins a few punitive damage cases and thereby establishes a
credible threat that they will be imposed, it can expect RPs to modify their conduct to
avoid such potential liability.
It is difficult to selectively evaluate the effect of punitive damages because they are
always used in concert with other enforcement tools. This is because they apply only if an
order or request is issued, the named RPs fail to respond, the state performs the response
action and the state sues for cost recovery and punitive damages. Thus, the effect of
punitive damages may be hard to separate from the effects of the other tools.
Punitive damages are expected to have a significant effect because the state can
impose a higher liability on recalcitrant RPs than is imposed on RPs that reach agreement
with the state. Without punitive damages the best recovery a state could obtain would be
its entire direct and indirect costs of response, including statutory pre-judgment interest
But simply recovering the state's costs may provide little disincentive to RPs who would
delay paying for the cleanup until the state litigates the claim.49 Since punitive damages
48. Certainly factors other than simply the existence of clear evidence of liability should
be considered in deciding whether a punitive damage claim is warranted. However, that is
a primary factor and may be an indicator that there are valid punitive damage cases that
are not' being pursued.
49. If the state's costs are only fractionally higher than the RP's projected cost of
response to an order, the economic benefit of delayed compliance may negate the higher
cost of the state-funded response. Of course any costs that the state is unable to document
or which otherwise become unrecoverable, further reduce the RP's incentive to participate
by performing the response.
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have the potential to increase the RP's liability by significantly more than the cost of the
response, they can be expected to discourage RPs from such delayed participation.50
Deadlines
Another potentially significant enforcement tool available to states is the setting of,
and adherence to, strict deadlines for negotiations. States that have established a record of
adherence to previously announced deadlines for negotiations report success in obtaining
agreements with RPs within the established period. This occurs even when that time is as
short as 3-4 months to negotiate an agreement for a remedial action.51
The state may have to demonstrate that it has the ability to, and will, move quickly
to begin a Fund-lead response action if the deadline is not met before RPs will accept the
announced deadline as a serious one. One state has noticed a pattern of RPs rushing to
sign consent agreements when they discover that within weeks after the deadline the state
is preparing to sign a work order authorizing a contractor to begin the response action.52
Thus, the keys to the effectiveness of deadlines are adherence to them and the ability to
impose on RPs who fail to consent by that deadline consequences they find undesirable,
such as starting a Fund-lead response.
50. Civil penalties are another mechanism for increasing the RP's liability when it fails
to discharge its duties. Which mechanism will impose the higher potential liability will
depend on the time and expense of the state's response action. For example, CERCLA and
some state statutes authorize punitive damages equal to three times the government's
response costs and civil penalties of up to $25,000/day if the RP fails without sufficient
cause to comply with an order. If a state issues an order to an RP that does not have
sufficient cause to refuse to comply and the state's response then takes one year the RP
will be subject to civil penalties of $9.125 million. This could significantly exceed the
liability for cost recovery plus treble damages (any response that cost less than $2,281,250
would result in a cost recovery/treble damage recovery less than the amount of civil
penalties). Of course the state has the strongest position where it can claim that the RP is
liable for full cost recovery, punitive damages, and civil penalties.
51. Many negotiators have noted that deadlines, even artificially imposed ones, create or
enhance pressures within the negotiating groups to reach agreement rather than fail. A
corollary principle is that negotiations will expand to fill the time allotted and thus can
continue almost indefinitely if no deadlines are established. J. Miller & T. Colosi, Funda^
mentals of Negotiation: A Guide for Environmental Professionals 32 (1989).
52. Illinois officials reported that this has happened often enough to be almost expected.
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Publicity
Publicity can be an effective auxiliary method of motivating RPs to participate.
Most companies want to maintain good will with the public and will do what they can to
avoid publicity that might affect that good will. Likewise, individuals want to avoid
negative publicity. States can use that desire to their advantage by making it a practice to
publicize events and decisions that reveal companies that fail to participate.
The first principle guiding states' use of publicity must be fairness. Among other
things, the state's public statements should indicate the stage of the process, the state's
position regarding the liability of the RP (including the legal status of the agency's
position), the next steps in the process, and known information about the site.53 The
purposes of such publicity are twofold: 1) to provide the public with accurate information
about the site and the responsible parties; and 2) to use public opinion and RPs' concerns
about public opinion to motivate RPs to cooperate with the agency and participate in the
response.
Publicity alone is unlikely to result in significant changes in RP behavior. It may,
however, enhance the effectiveness of some of the tools discussed above if used in
conjunction with them. Minnesota provides a good example of how publicity can be used
to good effect when combined with a comprehensive enforcement program. In Minnesota
all major actions must be approved by the Pollution Control Board acting in public session.
Thus, there is automatic publicity of most events relating to RPs, including issuing
RFRAs,54 determining that RPs will not respond adequately, and authorizing the agency to
sue RPs. Minnesota officials are convinced that this publicity, particularly of the decisions
to name the RPs at a site (at the time the RFRA is issued) and to take enforcement action
against RPs, contributes to the decisions by some RPs to participate rather than face
enforcement action. This is exactly the type of behavior modification that a good enforce-
ment program seeks to achieve.
53. The Minnesota PCA and the Illinois EPA have both developed standard Fact Sheets
explaining various aspects of the process and specific sites or chemical hazards. Both
agencies report that the Fact Sheets appear to be successful in explaining the issues and
process to the public. Samples of the Minnesota Fact Sheets are included as Appendix B
to the Minnesota Report in Part n.
54. "Request For Response Action," required by statute to be issued to all known RPs
before the State may take other action. See discussion of administrative orders above
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Some states have found that the publicity associated with listing a site as a potential
hazard (on CERCLIS or an equivalent state list) or on the state's priority list can cause
RPs to agree to perform a cleanup.55 The desire of RPs to avoid being publicly identified
in connection with hazardous waste sites even extends to sites that have not yet been
determined to be hazards. Many RPs are thus quite willing to agree to perform a cleanup
if it can be done without publicly identifying the site as a problem.
The Pennsylvania and Texas statutes explicitly provide that a site will not be listed
on the cleanup priority list if RPs sign a consent agreement to clean up the site. This
encourages RP participation; but at the price of public knowledge.56 Even if the process of
signing the consent agreement is public it may not receive the same degree of attention by
the press or the public, at least partly because such stories are not as starkly simple as one
listing a site as an abandoned hazardous waste site that may need to be cleaned. Public
notice of the cleanup plan is, however, typically provided and that may be the most
appropriate time for a state to heavily publicize the site.
Transaction Costs
Transaction costs obviously are a potentially important motivating factor for RPs.
As a general matter RPs seek to minimize their transaction costs (although there may be a
certain minimum threshold cost that must be exceeded before RPs consider such costs). If
RPs perceive that transaction costs are significant they will attempt to avoid them by
seeking early agreement with the agency.
Responsible public officials do not arbitrarily seek to increase transaction costs
because these do not contribute directly to the desired product~a timely cleanup. It may
be appropriate, however, to identify and account for the transaction costs so that all parties
55. New Hampshire, North Carolina, Pennsylvania and Texas have have had, or expect,
some RPs to agree to perform cleanups before listing in order to avoid or lessen the effect
of being publicly identified with a hazardous waste site.
56. In Pennsylvania this is mitigated by requirements for public disclosure and review
of consent agreements. This type of tool, which attempts to obtain RP participation by
giving up some state or public interest, is discussed further under "Informal Deferral of
Site Listing" below.
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can see how much these often nonproductive costs contribute to the total cost of a cleanup.
This may help to convince RPs to agree early in the process to perform a cleanup rather
than incur the potentially high transaction costs of seeking to avoid liability.
Knowledgeable Representatives Of RPs
Several states have noticed that having a sophisticated group of environmental
attorneys in the private bar who understand the state's cleanup law and process contributes
to quicker settlements with the RPs. When the local environmental bar understands the
state process the state loses less time in explaining to new RPs the basis of their liability
or the many items which may not be negotiable. A knowledgeable bar can aid
negotiations by explaining to its RP clients exactly what points are negotiable and the
consequences of failing to reach a settlement. This can be particularly useful in states that
have the capability to take quick action if negotiations fail. Attorneys that represent many
RPs in different cases will know, and explain to their clients, that the consequence of not
settling will be that the state funds the response and pursues cost recovery.57 Thus, state
efforts to educate the private bar may well yield dividends in smoother negotiations and
quicker settlements with RPs.
V. FACTORS THAT INCREASE RP PARTICIPATION
BUT HAVE POTENTIAL NEGATIVE IMPACTS ON
THE PUBLIC OR THE STATE
States have used or considered a number of other techniques to encourage RPs to
agree to perform or pay for cleanups. They have varying degrees of effectiveness in
increasing RP participation, but also may involve some loss to or negative impact on the
state's or the public's interest. These techniques will be discussed in the order of those
most likely to increase RP participation while affecting the state or public interest the least.
57. This is certainly not the only possible state response, but it is the typical one
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Techniques That Have Varying Effects
Depending On How They Are Implemented
Mandatory Requests For RP Action
Several state statutes require the state agency to attempt to obtain an RP-lead
response before considering a Fund-lead response. These provisions are basically of two
types. The first directs the agency to negotiate with the RPs to attempt to obtain a consent
agreement for the RPs to perform the response.58 The second requires the state to take
enforcement action, such as issuing an order.59 Both types of provisions may increase RP
participation, though for diverging reasons. The usefulness of such broad statements of
policy in modifying RP behavior largely depends on the rigor and consistency with which
they are implemented.
Requirements that an agency request RP action or cooperation have had varying
impacts depending on how the agency implemented them. Where the agency has made the
request the cornerstone of an enforcement program that includes active RP searches,
notification of all known RPs, public administrative determinations of liability, the ability
to quickly begin a Fund-lead response if no RP will do so, careful cost accounting, and an
active cost-recovery effort the results have been positive. These actions put the agency in
the best bargaining position possible given the statute under which it must operate.
Using this type of approach, the Minnesota PCA has rarely been forced to use state
funds for RAs where solvent RPs have been identified. In fact, the MPCA has had a
58. Among the states in the study group Minnesota and North Carolina have this type
of provision, although Minnesota's simply requires the agency to "request" that the RPs
perform the response. The respective agencies administer them in significantly different
ways, however. See the discussion of administrative order authority in "Order Authority"
above.
Texas has a provision that requires the agency to contact all known RPs at the time
it proposes to list a site. It must also allow the RPs the opportunity to conduct the Rl/FS
and provides RPs a total of 150 days to make a good-faith offer and negotiate with the
agency to do the RI/FS.
59. Texas is the only state in the study group that has this type of provision, however,
it was added in 1989 so there is little experience with its implementation. Moreover, the
statute also allows RPs to obtain pre-enforcement review of RA orders. Since this essen-
tially halts the cleanup process, the Texas provision is unlikely to have a significant effect
on RP-lead remedial actions. Pennsylvania's statute contains a distinctly disadvantageous
variation that requires the agency to exhaust its enforcement options under other statutes.
See the discussion of administrative orders in "Order Authority" above.
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number of RPs comply with its "Request For Response Action" without signing a consent
order even though the "requests" are not directly enforceable in court. Although many
factors obviously contribute, much of the credit for this successful record must go to the
consistent implementation of the policy that responsible parties will pay for cleanups.
State agencies that do not create a good bargaining position for themselves have
not, on the other hand, experienced the same success in obtaining RP participation. In
North Carolina, where the agency is required to negotiate with RPs, the agency has
insufficient funds to take action itself and has not established its authority to issue orders
as a credible enforcement tool. As a result RPs negotiate with the state but sign consent
agreements only when the terms are favorable to the RP. For example, in the two admin-
istrative orders on consent signed as of July 1989 the RPs. rather than the state, select the
level of cleanup and the state acts in an advisory capacity. Furthermore, the agreements
do not contain provisions for stipulated penalties if the RPs do not comply. Finally, if a
dispute between the state and the RPs cannot be resolved, the agreement dissolves. In
essence the RPs gain the imprimatur of state approval of a cleanup over which they have
complete control and which they can abandon with no negative consequences.
Allocations of Liability
Some states are required to provide RPs with an allocation of liability based on
specified criteria such as waste volume contributed, toxicity and type of contributor. The
purpose of having the state allocate liability among multiple RPs is to encourage groups of
RPs to agree to pay or perform the work. When a site has multiple RPs most states and
RPs prefer to reach a single settlement with as many RPs as possible. This reduces
transaction costs for both sides. Allocation is often the primary issue between the RPs.
The theory is that an allocation by the state, a neutral party as far as the division of
responsibility among the RPs is concerned, may be more readily accepted by the RPs than
one performed by the group. It also may be impossible for the group to agree on the
ground rules for an allocation, whereas the state can choose criteria and move on to imple-
menting them. This may demonstrate that criteria some RPs may have thought were unfair
result in an allocation that is acceptable.
When they work as intended, state-performed allocations may reduce the amount of
time it takes to reach settlement with an RP group. They may also induce more RPs to
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join the settlement than would have had the allocation been left to the RPs themselves.
There is, however, little actual experience with them since they are a relatively new
fift
concept.
The potential harm to the state's interest is that performing the allocation requires
significant staff time and resources which may not be recouped in the settlement.61 Even if
the RPs agree to pay for the cost of performing the allocation the staff time may be a
significant opportunity cost since that time cannot be used to develop other cases, manage
cleanups or perform the many other duties for which state cleanup program personnel are
responsible. Furthermore, the state may not have all of the information needed to allocate
liability or have the appropriate expertise to do a credible allocation. This will either
detract from the usefulness of the allocation or cause the staff to spend time developing the
expertise or obtaining information, both of which the RPs are more likely to possess, at
least collectively.
Pennsylvania DER must prepare a "nonbinding preliminary allocation of
proportionate responsibility among all known responsible parties," and enter into a
mandatory negotiation of the allocation. The statute also appears to require the DER to
accept an RP's settlement offer if it agrees to pay its allocated share plus a premium of up
to 50% of that share. The DER essentially is required to determine what an appropriate
division of the potential liability will be and then the RPs have the option of paying this
allocation (plus a premium) in exchange for a release from liability.62 The practical effects
of requiring the allocation and acceptance of a matching offer may be to set a maximum
limit on each RP's liability to the state while allowing the RPs to argue for a different
60. The U.S. EPA has been authorized to perform such allocations since SARA was
passed in 1986 and had performed one as of March 1989. In that instance the agency
reached settlement in a complicated multi-site case with hundreds of RPs for a remedial
action estimated to cost in the range of $50 million. None of the states in the study group
had completed a formal allocation as of June 1989.
61. The allocation done by EPA cost the agency $2 million and took at least a year to
complete, including most of one attorney's time for that year.
62. The DER has taken the position that this buy-out provision applies only when there
has been a comprehensive, agreed allocation. The issue has not yet been resolved.
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(lower) share that could leave the state with unfunded liability after all the viable RPs have
obtained releases. These provisions may vitiate the joint and several liability which the
legislative history indicates was intended to apply.63
Techniques That Have Negative Effects
Concessions
Favorable terms in consent orders. A common method of encouraging RPs to agree
to perform a response action is to offer more favorable terms in a consent order than
would be contained in a unilateral order issued in an enforcement context. For the most
part the success of this technique is directly related to how much the state is willing to
give up in exchange for the consent.
The major issue for most RPs is their total liability. Thus, the items most likely to
induce more RPs to settle are those that reduce or limit their potential liability. Absolute
releases from liability (ie. no reopener clauses) may be the most desired, and therefore
most effective, but also most costly, of such concessions. The greater the uncertainty
about the possibility of future costs exceeding the current estimate the greater the likeli-
hood that a release from liability will induce RPs to agree to pay for the cleanup. Of
course granting a release in such a situation transfers the risk of those higher costs to the
state/public. Thus, releases are a good example of how the effectiveness of the inducement
is directly related to the potential harm to the state/public interest.
Caps on liability. An extreme example of a release from liability is to state ab
initio that there will be a limit on the RP's total liability if it settles. North Carolina's
statute contains such a provision limiting an RP's liability for the cost of a remedial action
to $3 million if the RP volunteers. If the state is willing to limit an RP's liability to a
specific amount, RP participation will be based on a simple comparison of the limit to the
RP's estimate of the potential liability. Of course, if the limit is lower than the potential
cost of the cleanup the state thereby accepts the risk that it will bear the additional cost of
63. Some of the problems could be avoided if the DER is allowed to set limits on
when RPs may accept the allocation and to reopen the allocation if new information is
discovered. The state's interests would be best served if it could require further payment
from an RP even after it paid its share (including premium) if new information showed
that the allocation was unfair or that the state would be forced to assume a share
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cleanup without the possibility of reimbursement. This is a significant risk at sites where
there are few RPs and becomes a certainty at single RP sites. If the state's Fund is small
relative to the unfunded cost of these cleanups such a cap on liability may adversely affect
the state's ability to achieve full cleanups. Thus, an absolute cap on liability has the
potential for two significant adverse effects on the state: 1) the state may have to pay
significant amounts of money for cleanups at sites with viable RPs whose liability has been
artificially and arbitrarily limited to less than the full cost, and 2) full cleanup may not be
possible if the state has insufficient funds to complete the cleanup.
Waiver of oversight costs. Another example of a concession commonly made by
states is a limit on, or waiver of, the RP's obligation to pay the state's oversight costs.
This is usually not a large amount—typically in the thousands, compared to response costs
in the hundreds of thousands to millions, of dollars~so the negative impact on the state's
interest is small; but so is the effectiveness as an inducement to RPs. In some cases the
effectiveness of such a concession may be increased due to its symbolic value to the RP.
This type of concession is usually made on an ad hoc basis. Texas, on the other hand, has
made this concession a uniform policy by codifying it as part of the statute.
Ways to improve the gains from concessions or mitigate the negative effects. States
may be able to increase the effectiveness of concessions in general by carefully managing
how and when they are made. For example, concessions made at the start of negotiations
usually have little effect in inducing a settlement, but a concession made in exchange for
reaching agreement on significant issues may be very effective. This illustrates two points
about negotiating for the government: 1) concessions should be made only when the
government obtains something of value to it in return (usually agreement on issues) and 2)
the exchange does not need to be equal; and, in general, should be heavily weighted in the
government's favor.
Concessions typically have different values to the different parties and government
negotiators should attempt to determine the value of a particular concession to the RP
before making it If the concession is one that the RPs have set as a goal it will grow in
value the longer it is withheld. Thus, by careful management of relatively low-cost
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concessions, such as limits on oversight costs or releases of liability with reopener clauses,
the state may be able to obtain a final agreement or agreement on major issues.64
Proportional Liability
In a number of states the statute explicitly provides that liability is to be
proportional rather than joint and several. The motivation behind such provisions usually is
to be "fair"65 to RPs rather than to attempt to increase the numbers of RPs that agree to
pay for cleanups. Increased participation may, however, occur as a secondary effect of
proportional liability systems.
On the other hand, proportional liability can also increase the state's costs in several
ways. Proportional liability systems can operate in different ways. In some proportional
liability systems the state must, in the event of a trial, prove, not only that each party is
liable, but also the proper share of the total cost that is attributable to each liable party.
This can greatly increase the state's litigation costs. It is also likely to reduce the strength
of the state's bargaining position. In other states, such as Texas, the RPs must prove
"divisibility" and then the court will apportion liability. This system places the burden on
the RPs rather than the agency, but does not require the state to devote resources to
defending a claim of divisibility—particularly where the resulting allocation may apportion
liability to an insolvent RP. Proportional liability systems also force the state to assume the
cleanup costs attributable to orphan shares, whereas under joint and several liability such
costs may be spread among all the financially viable liable parties.
64. A much more extensive discussion of negotiation techniques, including how they
may be applied by government negotiators is contained in J. Miller & T. Colosi,
Fundamentals of Negotiation: A Guide for Environmental Professionals (1989).
65. RPs, like defendants in multi-party tort suits, have argued that joint and several
liability is unfair to them because a defendant that contributed only a de minimis amount
of the hazardous substances found at a site can be held liable for the cost of the entire
cleanup. Without further examination this would appear to be "unfair." But such an
explanation ignores the fact that the party held liable has the right to bring the other RPs
into the action, or sue them later, to recover an appropriate share. In this context joint and
several liability can be seen more as a method of allocating those transaction costs
associated with finding all the liable parties and proving the appropriate share of the total
liability attributable to them. Joint and several liability places this cost on the party that
created the hazardous condition, whereas proportional liability places this burden on the
government.
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Less Expensive Cleanups
Another method of inducing RPs to pay for or perform cleanups is for the state to
allow RPs to perform less expensive cleanups than would be done if the state paid for the
work. It is not clear that more expensive remedies are always more environmentally
protective. Some of the permanent treatment and destruction remedies are, however,
significandy more expensive than containment or land disposal remedies that carry the risk
of failure which could cause further harm in the future. A policy of negotiating less
expensive remedies could, therefore, increase the risk of future environmental harm. This
has been a major concern of community and environmental groups.
In some states if an RP 'volunteers' it will be allowed to perform a less expensive
cleanup than would be required if the cleanup were done under the federal Superfund
program and EPA oversight. Such treatment may be limited to sites that were not already
in the state or federal system, i.e. CERCLIS or the state equivalent, or may extend to any
site where an RP volunteers to perform a cleanup. Although there is no reason to assume
that the federal remedy selection system is inherently more protective of the public interest
than any state's system, the public tends to judge all cleanups by comparison to what
would happen under the federal system. Furthermore, there is significant concern that the
government should not vary the level of cleanup or protection of the public health and the
environment based on whether the RP is cooperative or not. Thus, there is significant
potential for harm to the public interest inherent in either method of negotiating remedies.
Policy of Not Using Fund
A number of states have a policy or statutory requirement of not using their Fund
unless options for obtaining RP financing have been exhausted. While a general policy of
first pursuing RPs to perform the response is appropriate and sends a message to RPs,
requiring the agency to do so in all cases is demonstrably counterproductive. Mandating
particular actions, whether by statute or policy, reduces the enforcement options open to the
agency which weakens its ability to reach the goal of cleanups financed by RPs. In
particular, removing or delaying the threat of use of Fund money removes or delays the
single factor that is often the most significant economic threat to RPs. RPs then know that
a certain amount of time will elapse before any economic consequences attach, thus
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eliminating any economic incentive for them to act until the end of that time. At the
least this impairs the state's negotiating position and reduces its enforcement leverage.
If part of an active enforcement effort, these policies may not have such negative
effects. For example, if the state actively searches for RPs, and is successful in
discovering previously unknown RPs, then RPs that might otherwise have passively waited
for the state to take action may be convinced that to do so is futile. Such success is
attributable to the enforcement efforts, however, rather than the policy of only using the
Fund as a last resort.67
Settlement First Policy
A state may also reduce its enforcement leverage when it has a stated policy in
favor of negotiated settlements rather than enforcement. In extreme cases68 such settlement
first policies violate a fundamental principle of negotiating—they reveal that the agency has
no option for obtaining its ultimate goal (cleanup) other than a negotiated agreement.
When it is clear to RPs that the state is not prepared to take enforcement action, or that it
will go to great lengths to avoid doing so, the RPs know they have little to lose if they
take extreme positions in negotiations. They know that the government can only achieve
its goal by making concessions and will use that knowledge to gain the ones they want
most.
66. Pennsylvania provides an example of this type of policy against Fund use. The
statute requires the state to negotiate with RPs for specified periods of time before listing a
site, regardless of whether such negotiations show any promise of success. Any delay in
the time when an RP must pay for a cleanup is valuable to RPs since they retain the use
of their money that much longer. This requirement gives RPs the benefit of such a delay
without exacting anything of value to the state or the cleanup program in return. (This
situation is mitigated to some extent by another provision that allows the state to spend $2
million without first negotiating with RPs.) Texas and other states also have required
negotiating periods.
67. Minnesota is an example of such a system. See discussion of Minnesota's program
in Part II infra.
68. North Carolina may be an example of the extreme situation since its statute requires
the agency to solicit cooperation from RPs before it may use enforcement tools and the
agency believes its Fund is to small to afford Fund-lead remedial actions. Thus, RPs know
that the agency will not impose any sanctions on them if they fail to reach a negotiated
agreement.
agreement
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This does not mean that states should not favor negotiated agreements over litigation
or Fund-lead cleanups, or even that such a policy should not be made public. In fact,
settlements are generally preferable to enforcement action because they usually achieve the
goal of cleanup in less time and at less cost to the state than would enforcement. The key
is that RPs must know that the state has options other than the negotiations for obtaining
cleanup. Then the agency can bargain from a position of strength enabling it to extract
concessions from the RPs rather than being forced to make all of them itself. Thus, public
policies that eliminate or delay an agency's enforcement options in favor of negotiations
with RPs harm the state's interest by removing the state's most significant bargaining chip—
the threat of enforcement if a settlement is not reached.
Informal deferral of site listing. Some states encourage RPs to agree to perform
cleanups by informing the RPs that the state will not submit the site for listing on the
federal CERCLIS or NPL if the RP will clean up the site. Several states report that this
type of informal deferral of listing a site has been effective in convincing RPs to clean up
sites.69 Many RPs perceive this to be a benefit because they believe the federal process
will be more expensive than cooperating with the state.70 RPs may also prefer to keep a
site totally within a state's process because they may believe they would have greater
influence on the pace, oversight and level of cleanup than if the federal government were
involved. Moreover, RPs may believe their negotiating position is better with state
69. Among the states in the study group New Hampshire reported that RPs are willing
to agree to clean up sites if by doing so they can avoid having the site listed on
CERCLIS, while the Minnesota PCA stated that it had obtained RP cleanups in the past by
informally deferring NPL listing. Minnesota officials report that this technique has become
less viable recently because EPA has not placed on the NPL any of the sites the state has
submitted in the past couple of years. Therefore, RPs no longer believe the state has a
benefit to offer in exchange for the cleanup since the site will not be listed in any event.
70. Several factors may influence this perception that the federal process will be more
expensive. RPs may believe that the remedies chosen under the federal Superfund system
will be more expensive than those chosen under a purely state system. They may also
believe that transaction costs will be higher using the federal process. They may also
believe that indirect costs may be higher under the federal system, particularly if the state's
process is not as public as the federal process. All of these are widely held, if not docu-
mentable, perceptions of the federal Superfund process. Finally, NPL listing typically
causes an immediate decrease in property values, which may be of particular concern to
owner/operator RPs.
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officials who may be sensitive to suggestions that the cost of cleanup might drive the
business out of the state. Obviously this technique is highly dependent on the perceptions
of RPs and thus its effectiveness would vary with each RP.
More importantly, such informal deferral has important negative implications for the
public interest. CERCLIS was intended to be an objective inventory of sites that may
contain hazardous substances. The integrity and usefulness of the inventory is destroyed if
sites are artificially kept off the list. By keeping sites off CERCLIS a state deprives its
citizens and the rest of the country of the opportunity to learn the full scope of the
problem of contaminated sites and of the knowledge of the progress in decontaminating
those sites. In this respect CERCLIS is significantly different from the NPL because
inclusion on CERCLIS does not necessarily mean that a cleanup will be performed under
the federal Superfund program. Thus the consequences to RPs from CERCLIS listing are
much less significant than those arising from NPL listing.
Informal deferral of NPL listing in exchange for RP agreement to perform a cleanup
may be even more detrimental to the public interest. First, some critics claim that states
often choose less permanent or less environmentally protective remedies than would be
chosen under the federal Superfund program.71 The permanency of remedies is a serious
national concern since repetitive cleanups of the same sites are an obvious waste of money
and may cause prolonged harm to the public health and the environment. Second, informal
deferral from NPL listing may be contrary to the public interest if the state's decision
process is less open to public review and comment. Thus, there are significant potential
drawbacks to an informal deferral policy.
A state could, however, implement a deferral policy that would produce greater
public benefits than the federal system. Such would be the case if, for example, the state
cleanup standards were equivalent to or higher than EPA's, cleanups were completed in less
time, and the public was more directly involved in the cleanup decisionmaking process.
No conclusions can be drawn about the actual effect of existing deferral policies on
the public interest for several reasons. This study has not attempted to collect information
71. See e.g. Coming Clean: Superfund Problems Can Be Solved , Office of Tech-
nology Assessment (1989). Comparison to the federal Superfund program is fair because
the presumption is that the site was eligible for a Superfund remedy since the state is
deferring NPL listing.
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on the degree of environmental protectiveness or permanence of remedies chosen by the
states. Furthermore, no attempt has been made to compare such remedies to those chosen
by EPA at Superfund sites. Indeed, it may be that no valid comparison between remedies
at Superfund and non-Superfund sites can be made due to inherent differences in the sites,
contamination, relevant public policies and applicable laws. Nor does this study attempt to
compare the states' procedures for public review and comment to the federal Superfund
procedures.72
VI. FACTORS THAT DECREASE OR DELAY RP PARTICIPATION
WITHOUT COMPENSATING BENEFITS TO THE STATE OR
THE PUBLIC INTEREST
Preenforcement Review
Some state statutes allow an RP to appeal a unilateral order to either an
administrative body or a court as soon as the order is issued. When, as is typically the
case, a right of immediate appeal is coupled with provisions staying the effective date of
the order pending the outcome of the appeal, the state agency's ability to clean up the site
is substantially impaired. When RPs are allowed to obtain preenforcement review they
have no incentive to take action or even to negotiate with the state since they can avoid all
response costs simply by appealing the order and litigating all issues. So long as the costs
of litigation are less than the projected costs of the response action it will be in the RPs'
economic self-interest to pursue their appeal rights through the entire judicial system. Such
litigation is likely to take years even in the most expeditious court systems. Such delays
obviously are detrimental to the state and public interest in cleaning up the particular site,
but appeals also consume scarce agency resources, including staff time, that might
otherwise be used on state-funded cleanups of other sites. In addition to the loss of staff
time available for other cleanups, the costs of litigating the case could be substantial and
deplete the funds available for fund-lead projects. This is particularly likely if the agency
72. To attempt to do so would inevitably raise the difficulty of comparing formal
federal procedures, relying for the most part on written comments, to less formal pro-
cedures, typical of states, involving personal contact between government staff and citizens.
The first can be standardized and monitored for consistency over many sites while the
second has the potential for significant impact but is much more difficult to monitor or
implement consistently.
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must allocate cost shares among the RPs. Finally, assuming the agency was permitted to
clean up the target site using its own funds,73 the staff familiar with the site would have
less time to devote to the cleanup due to the need to prepare the case for litigation.
Preenforcement review of cleanup orders has the potential to bring a state's entire
cleanup program to a complete halt. At a minimum, granting preenforcement review rights
to RPs prevents the agency from controlling when a site is cleaned up. Timing then
depends on the vagaries of the courts rather than considerations of public health and safety
and protection of the environment. Even where the agency is permitted to take fund-lead
action during the litigation, resources will be diverted from that action to satisfy the
demands of court-imposed deadlines. Moreover, in states that must issue orders before
taking fund-lead action, preenforcement review forces the agency to litigate all of its fund-
lead cases thus limiting the number of fund-lead actions that can be taken at one time.
In states such as Texas and Illinois where preenforcement review is allowed the
agencies have found that the only way to make progress in actual cleanups is to avoid the
situations that give rise to the right of review. In Illinois that means avoiding requesting
formal administrative orders, which must be issued by the independent Pollution Control
Board after a full hearing. Instead the agency issues notices of liability that subject the RP
to cost recovery and punitive damages if it does not agree to take the appropriate response
action. These notices are effective enforcement tools because the IEPA has the ability to
quickly begin fund-lead response actions. The Illinois EPA also has the option of
requesting that the Attorney General sue the RPs for performance of the response action.74
These options allow the IEPA to retain the elements of control necessary for an agency to
"enforce" its determinations of the proper course of action and to negotiate from a position
of strength.
The Texas Water Commission has not found a similar method of avoiding
preenforcement review and the attendant stay while retaining the ability to enforce its
73. Some states are prohibited from using fund monies if viable RPs exist.
74. Although this would also involve the delays inherent to litigation, it is the
government's choice and the government can select the most appropriate cases for such
action. This element of choice also means the government need not litigate all cases at
one time.
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decisions." The TWC can start a fund-lead RA, but the contracting process for RAs on
state Registry sites has been subject to significant delays. The TWC thus has little option
but to negotiate with the RPs to obtain their agreement to perform the cleanup. But this
places the TWC in a weak negotiating position since the RPs know that it will have
difficulty obtaining a prompt cleanup except by agreeing with the RPs. Thus, in Texas pre-
enforcement review has vitiated the TWC's ability to enforce its decisions on cleanups.7'
,76
Limitations On Enforcement Discretion
States' abilities to enforce their cleanup decisions can also be undermined by
statutory provisions limiting what types of enforcement actions can be taken or when the
agency may act. Selective enforcement is a key element of an effective government
enforcement program since no agency can discover and take action against all violations.
Thus, to be effective an agency must be able to chose from the many potential
enforcement targets those cases that are the most serious, will have the largest deterrent
effect, can be completed in the shortest amount of time or meet other similar government
goals. Another essential aspect of selective enforcement is the ability to chose which
enforcement tools or methods to use in a particular case based on the government's
judgment of what will be most effective under the circumstances. In general, any statutory
provision that limits the government's discretion to use otherwise applicable enforcement
75. The Texas Chapter of Part n contains a detailed discussion of the preenforcement
review provisions, how they have worked in practice, and their implications for the State
and RPs. As of 1989 preenforcement review applies, however, only to RA orders.
Amendments to the statute eliminated preenforcement review of RI/FS orders; if RPs do
not agree to do the RI/FS, the State does it.
76. Chapter 11 of Pennsylvania's Hazardous Sites Cleanup Act (HSCA) also allows RPs
to appeal orders to an administrative body. Unlike Illinois RPs, however, Pennsylvania
RPs must comply with these orders during the pendency of their administrative appeal,
unless they can obtain a stay. The RP bears the burden of proving it is entitled to a stay
and must meet standards similar to those required for a preliminary injunction, including
that the state and public will not be injured if the stay is granted. Thus the right of appeal
does not necessarily delay cleanup as it does in Illinois and Texas. Furthermore, the
Pennsylvania DER has other enforcement options, including completely separate order
authority under Chapter 5 of the HSCA, for which there is no right to preenforcement
review.
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authorities or methods impairs the government's ability to attain the goals of the statute that
established the enforcement authority.
Some state cleanup statutes require the state agency to issue orders (or the
equivalent first step of enforcement) to all known RPs.77 This also restricts an agency's
discretion and limits its ability to enforce selectively. Requiring an agency to take
enforcement action against all of the possible defendants means the agency cannot focus its
enforcement efforts on the parties against whom it has the best case, who are responsible
for the greatest share of contamination or who are solvent. This eliminates the first aspect
of selective enforcement—choosing the most appropriate enforcement target.
The negative effects of mandatory enforcement provisions may be mitigated in some
states. In states where liability is not joint and several the agency would likely take action
against all RPs in any event in order to obtain the highest possible percentage of RP
financing of the action. Even in states that have the benefit of joint and several liability,
where selective enforcement against "deep pocket" RPs against whom the agency has good
evidence of liability might simplify the agency's task, the burden of proceeding against all
RPs may not be too significant. First, the agency can alleviate the burden by issuing
orders (or notices) to all RPs but requiring them to form a committee to negotiate with the
agency.78 Second, in a cleanup case all the defendants are associated with a particular site
and much of the enforcement effort will be applicable to all the RPs. This contrasts with
the typical regulatory enforcement situation where each defendant represents a completely
different case with different facts. Finally, the general practice of most agencies has been
to take action, at least initially, against all RPs. Thus, agencies may be able to minimize
the limitation on their discretion imposed by provisions requiring them to act against all
RPs.
Statutes requiring an agency to exhaust certain remedies before taking enforcement
action79 are a more significant limitation because they vitiate the state's ability to select the
77. Of the study states, Texas, Pennsylvania, and Minnesota have such provisions.
78. Minnesota has a clear policy of proceeding in this manner and most agencies use
this technique to some degree.
79. This includes spending Fund monies since that can constitute enforcement if it is
followed by cost recovery.
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enforcement tool most suited to the particular facts and parties. Section 1301 of
Pennsylvania's HSCA is an example of such a provision. As noted above, it requires the
state to show it has instituted action against an owner/operator without success through the
use of all other applicable environmental statutes before proceeding against other RPs. This
constrains the DER's ability to choose the enforcement option most appropriate to each
case, except where there is no viable owner/operator.
VII. CONCLUSION
Many tools and methods are available that can be useful to states in obtaining RP
participation in cleanups of hazardous waste sites. Some are action-forcing and some are
inducements. Both types can be effective in convincing RPs to perform or finance the
necessary response action. This study has not identified any single tool or mechanism that
is absolutely essential to obtaining RP participation, however, the ability to use several
tools and the flexibility to choose the most appropriate tool for a particular situation are
attributes common to most effective programs. The ability to quickly apply the chosen
tool to a particular situation also significantly enhances the effectiveness of that tool.
Although action-forcing tools and positive inducements both result in RP
participation, successful states use the mandatory tools as the primary options and tend to
use inducements more sparingly. Mandatory tools, such as orders or fund-lead remedial
actions followed by cost recovery and punitive damages, have the advantage of forcing RPs
to bear the costs of cleanup without requiring the state to make concessions that might not
be in the public interest. The problem with inducements is that they typically involve the
state making a concession that often affects the public interest. In addition, once the state
has made a concession in one case RPs in other cases demand that they be treated in the
same manner. Thus the tendency is for each concession to become expected as standard for
every settlement regardless of the circumstances that originally led the agency to make it.
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CHAPTER FOUR
INCENTIVES FOR VOLUNTARY RESPONSIBLE PARTY
PARTICIPATION IN THE REMEDIATION PROCESS
Voluntary participation in the remediation process by responsible parties is critical to
the success of a state's hazardous waste cleanup program, particularly given the funding
limitations present in many states. Active voluntary RP participation allows the assessment
and cleanup of contaminated sites with comparatively little expenditure of a state's scarce
time and resources. Moreover, cleanup often can be performed sooner and more
expeditiously when conducted by the RP who usually does not have to follow time-
consuming state contracting procedures.
By the time a state has studied the site and given it a high priority ranking for
remediation, the likelihood of an enforcement action to compel performance and recover
costs increases. Thus, an RP has an incentive to clean up voluntarily in order to avoid state
or federal enforcement and the high costs associated with such action. Many of the
economic incentives discussed in this chapter, however, encourage the early voluntary
involvement of RPs in the evaluation and cleanup of sites that have not yet been identified
by the state or that have been given a low priority for study. These sites may be a low
priority because there is no known release into the environment or no current risk due to
the remoteness of the site or type of contaminant. In many cases the evaluation and
cleanup of these sites may not be accomplished or might be delayed significantly if
addressed by the state or federal government. Such delays might allow a low-risk site to
develop into a significant hazard.
Unlike enforcement actions, for which direct results can be calculated, it is difficult
to quantify the value of the incentives discussed in this chapter. Most state officials
believe, however, that there are distinct advantages to instituting mechanisms that encourage
voluntary RP participation in the evaluation and cleanup of hazardous waste sites. These
advantages, however, may be tempered by potential problems that can arise with voluntary
RP participation. Without proper oversight, an RP-lead site evaluation can bias the results
and distort the extent of the risk or need for cleanup. Another major concern with
voluntary RP cleanups is that the remedy selected will be protective of health and the
environment. Both of these concerns may be addressed through proper state oversight of
the voluntary action.
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Sites that involve a number of RPs also present potential difficulties for successful
voluntary actions. Under the volunteer approach, obtaining agreements among the RPs with
respect to cleanup standards, the choice of remedy, and proportionate shares may create
delays and lengthy litigation. At such sites, state enforcement action may be necessary to
force RPs to work together. The impacts on RP participation of a state's enforcement capa-
bilities and of statutory provisions encouraging settlement are examined in Chapter ffl.
The types of incentives for RP participation discussed in this chapter are more
subtle. They are motivating factors that are an indirect result of the state superfund
program, that derive from the non-enforcement aspects of the program, or that come from
outside of the program altogether. Generally, these incentives are based on an RP's determi-
nation that it is economically advantageous to speed up the evaluation and remediation
process rather than to wait for the state to take action. The incentives discussed below
include those that are coercive as well as those that merely encourage, facilitate and foster
RP participation.
The "RP participation" discussed in this chapter includes all actions taken by an RP,
ranging from an environmental audit and preliminary assessment of property for identifying
actual or potential contamination to implementation of site cleanup.
I. INCENTIVES RELATED TO PROPERTY TRANSFER
The most opportune time for a state to encourage RP participation is prior to the
transfer of the contaminated site. At this time, the buyer, seller, and the lending
establishment all have a stake in effectuating the sale and are willing to expend resources
for its quick resolution. We discuss below various methods states have employed to use
this economic incentive to foster the evaluation and cleanup of hazardous waste sites. Some
of the options that states have employed include mandating disclosure to the buyer of
hazardous substance disposal, requiring an environmental audit prior to sale, or requiring
actual cleanup before the transfer may occur. All of these options help to shift the job of
identifying and cleaning up hazardous waste sites from the state to private parties.
i
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State Approval Of Property Transfers
Several states have enacted laws placing certain requirements on the transfer of
property to encourage the remediation of hazardous waste sites. One of the most stringent
of these is New Jersey's Environmental Cleanup Responsibility Act ("ECRA"), N.J.S.A.
13:lK-6 et seq. Before transferring or ceasing operations at an industrial establishment
involving hazardous substances, ECRA requires that the owner or operator obtain either 1)
New Jersey Department of Environmental Protection ("NJDEP") approval of a "negative
declaration" that the site is not contaminated; 2) approval of a cleanup plan; or 3) a
consent order allowing the transfer to proceed as long as either party provides financial
assurance for cleanup. If the transferor fails to comply with ECRA, either the transferee or
NJDEP may void the sale, and the transferor may be liable for damages and civil penalties.
The possibility that a sale may be voided and collateral may be lost has spurred bankers
and mortgage lenders in New Jersey into becoming very meticulous with their clients
regarding ECRA compliance, rendering them de facto ECRA enforcers. Consequently,
NJDEP receives approximately 5-6,000 requests per year for a determination as to whether
ECRA applies to a particular transaction. Although about 80% of these transactions are
not covered by ECRA, approximately 1,200 properties per year become ECRA cases and
should eventually be cleaned up by the seller or buyer.
Obviously, ECRA has a tremendous impact on the number of cleanups in New
Jersey that are being initiated by private parties. The statute, however, has provoked
significant criticism from the business and financial communities. Because of the broad
coverage of ECRA, the number of submittals that must be reviewed has created delays in
approving negative declarations and cleanup plans and has resulted in some economic loss
due to the postponement of the property transfer. Moreover, the sites addressed by ECRA
are not selected on the basis of health or environmental priorities, but merely on the fact
that a "triggering event" has occurred. Obviously, ECRA is not a complete substitute for a
systematic assessment and prioritization of sites needing immediate cleanup. To address
the problem of delay, New Jersey now allows transactions to go forward without approval,
but only upon the execution of an administrative consent order under which substantial
financial assurances must be posted.
The business community also objects to the "draconian" aspect of ECRA that
imposes upon the present owner the cost of cleanup even though the contamination may
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have been caused by prior owners. Some critics contend that businesses may be forced to
maintain a "skeleton" staff at a site rather than actually closing operations to avoid the
application of ECRA.
New Jersey officials dispute the "anti-industry" label given to its ECRA statute and
maintain that property declared "clean" under ECRA is greatly desired. Moreover,
requiring cleanup under ECRA may eliminate incipient hazardous waste problems at a
lower net cost to the landowner than if the site were addressed at a future date. Of more
practical concern to a state considering enacting an ECRA-type statute may be the fact that
its broad application requires substantial staff involvement and resources. The New Jersey
ECRA program was initially funded from the state Spill Compensation Fund; however, it is
now supported entirely by the regulated community through fees for processing ECRA
documents.
Other states have recognized the benefits of "ECRA-type" requirements and have
enacted laws that are similar in concept but not as broad in application. A recently
enacted statute in Connecticut requires either 1) that the owner of any industrial establish-
ment involving hazardous waste submit a "negative declaration" to the state within 15 days
after the transaction, or 2) prior to the transfer, the transferee or any other party shall
certify that he shall mitigate any hazardous waste threat that might be present. C.S.G.A.
22a-1349 et seq. Although the transferee may obtain damages for failure to comply with
the statute, neither the transferee nor the state may void the sale. The Connecticut statute
avoids the delay problems associated with the New Jersey law by allowing the transfer to
take place prior to a review of the negative declaration. Should the negative declaration
prove to be defective, however, cleanup is not guaranteed, and the state's sole enforcement
tool is the imposition of civil penalties for violating the statute, not voidance of the
contract.
Iowa also requires agency approval of any transfer or change in use of any site
listed on the state registry of confirmed disposal sites. Missouri requires the director's
written approval before a person can substantially change the manner in which a site on its
registry is used; only department notification is required after a sale. The use of this
approval authority over listed sites as an incentive for RP cleanup is diminished in these
states, however, because the site owner is given a right to contest the listing, thereby
making the listing process lengthy and time-consuming. Moreover, limiting the application
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of a property transfer law to listed sites not only reduces the number of properties under
the law's jurisdiction, but also places the burden of site investigation on the state rather
than the parties seeking a transfer or change in use.
It is clear that a requirement that the state declare a site "clean" before it can be
transferred is a most effective incentive for the cleanup of sites by private parties. While a
broad property transfer statute reaches many sites, its administration and funding require-
ments may prove difficult to fulfill. For those states lacking the resources to initiate a
comprehensive ECRA-type program, state approval for the clean transfer or use of only
those sites listed on the state registry or list might be a suitable and more manageable
alternative. Such a statute would only be useful, however, if the listing process were easy
and quick, and if the range of sites requiring transfer approval included those suspected of
contamination.
Disclosure Requirements
While not as burdensome as requiring state approval of a property transfer, require-
ments that either the state or the property owner disclose the fact of contamination
certainly help identify hazardous waste sites and may also foster private party cleanups.
Some state laws require disclosure to the parties at the time of transfer, others require that
disclosure documents be recorded on the deed, and a few require both.
The Illinois Responsible Property Transfer Act of 1988 requires that the owner of
certain properties (those subject to the federal Emergency Response and Community Right-
to-Know statute or that contain an underground storage tank) provide a detailed environ-
mental disclosure document to the buyer and lender. These documents must also be filed
with the Illinois Environmental Protection Agency and with the recorder's office for the
county in which the property is located. If the required disclosure is not made or if the
document indicates previously unknown environmental defects, any party may void the sale.
The Minnesota statute requires that owners who know or should know that their
land is contaminated record an affidavit with the county recorder of deeds prior to sale.
Although there are penalty provisions, failure to record the affidavit does not prevent the
transfer. This disclosure statute relies on the good faith of the owner to record the
affidavit, and the state has no right of approval over the filed document. In North Carolina,
Missouri and Iowa, state officials prepare deed recordation documents for sites listed on the
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state list or registry. While these deed recordations absorb the time and resources of the
state agency, the state at least has greater control over their accuracy based on the
information it has obtained prior to listing the site.
Deed recordation and notice provisions provide information to potential buyers and
lenders and may prevent the transfer of environmental liability to the unsuspecting. An
added benefit of disclosure is that it may lead to private party cleanup of the site either by
the seller because of pressure from the buyer and lender, or by the buyer seeking to
develop the property. Notices that rely on an owner's good faith and knowledge of the
site, however, without requiring an audit of the property, may leave out important
information. More useful than merely requiring notice of information known by the
owner is the requirement that the owner prepare a disclosure document, such as in Illinois.
By mandating the use of a detailed disclosure form, a state may obtain a comprehensive
environmental assessment conducted by private parties and enforced by the potential means
of a subsequent voidance of the transfer if the owner does not comply. Indeed, Illinois
officials estimate that the majority of newly initiated RP cleanups in the state are connected
to the environmental assessments conducted pursuant to property transfers. The key
motivator behind these voluntary cleanups is the desire of the sellers, buyers and their
agents to assess and mitigate contamination at the sites so that the transaction can go
forward with maximum protection from liability for all parties.
Environmental Audits Or Assessments Prior To Sale
As the business community becomes more aware of the potential for tremendous
liability under many different environmental statutes, lending institutions and purchasers are
insisting on environmental audits or assessments of a property prior to sale, particularly in
the absence of any state law requiring disclosure. These audits help detect problem sites.
Because the parties are generally eager to consummate the transaction, investigative work
and cleanups are often performed on sites which may not be scheduled to be addressed by
the state for many years.
If a hazardous waste problem is suspected, the transferee and his lending institution
have a vital interest in identifying its extent and in correcting it prior to sale. In order to
take advantage of any "innocent landowner" defense that may be available to federal or
state superfund liability, a prospective owner must make appropriate inquiry into the
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conditions at the site before purchase. See 42 U.S.C. §9601(35)(B). If contamination is
known or discovered, the buyer will often require cleanup as a condition of sale. On the
other hand, the seller has a different interest in the transaction, and may want to remain in
ignorance as to possible hazardous waste contamination or, affirmatively, to hide the fact.
As the business and legal communities become more sophisticated in environmental
requirements, mere ignorance of the presence of contamination is no longer a viable
defense in property transfer situations. The seller can help avoid future fraud or misrepre-
sentation claims, and share potential liability for hazardous waste cleanup, by making a
reasonable effort to investigate and to identify potential hazards prior to sale. It should be
noted that it may be difficult to distinguish whether voluntary cleanups are effectuated by
the existence of the "innocent landowner" defense or by a state's disclosure requirements. It
can be speculated, however, that the degree of documentation and cooperation from the
seller may be greater in those states that mandate disclosure with the possibility of the
avoidance of the sale, than would be achieved without such a requirement.
Some states have encouraged investigative work on the part of private parties by
providing assistance in the audit process. The Minnesota cleanup program has established a
voluntary property transfer review program that responds to file search requests from the
business community on a particular property prior to its transfer. If hazardous waste
problems are detected, the program may also provide investigation and cleanup assistance.
The companies requesting a search are billed for the service. The Minnesota program
plans to handle over 800 requests in fiscal year 1989 and as many as 1000 requests per
year by 1991.
Other states have received requests for file searches or record checks, but do not
have a formal process or budget for handling them. For example, in the last few years
Colorado has experienced a significant increase in requests to the agency for record checks
on facilities being sold or financed. Currently these requests are processed by the
individual assigned to perform the PA/SI at the site. It is unclear how the state will
handle the ever-increasing demand for this information without instituting a formal program
and developing a plan for funding the processing of these requests. The benefits for
establishing such a program can be enormous, for it encourages private parties to identify
and investigate hazardous waste problems that otherwise would be left to the state to
address.
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Lien Provisions
Many state cleanup statutes grant the state a lien over an RP's property for the costs
and damages for which an RP is liable. These lien provisions may serve to motivate
private party cleanups because the potential imposition of a lien on the property can
prevent or impede the issuance of title insurance or a mortgage.
The state lien provisions vary greatly as to property covered and priority of the lien.
One of the most comprehensive lien provisions is found in Massachusetts, wherein any
liability to the Commonwealth constitutes a priority lien (also called a "superlien")
attaching to all real and personal property owned by an RP except that used for housing.
New Hampshire's cleanup statute provides for a priority lien on real and personal property
at the contaminated site as well as business revenues generated from the property. In other
states, such as in Connecticut, a priority lien dating from the enactment of the superfund
statute may only attach on the contaminated property. Still another variation on a state's
cleanup lien is a provision like Pennsylvania's whereby a general lien with no priority
attaches to all real and personal property of the RP.
The variations on lien provisions are practically endless. The most stringent
provision, and therefore greatest deterrent to RP inaction, would be a combination of these
statutes, providing for a priority lien on all real and personal property of the RP, not
limited to its connection to the contaminated site. The least effective would be for a
general lien to attach only to the site at which the state undertook cleanup. The motiva-
tion for RP participation behind these lien provisions is the same, however. RPs know that
their ability to freely transfer their property will be affected if they allow the state to
expend funds for investigation and remediation that will subject their property to a state
lien.
H. VOLUNTARY PRELIMINARY ASSESSMENT PROGRAMS
There are many economic reasons why an RP would wish to perform voluntarily a
preliminary assessment ("PA") of its property. In anticipation of a property transfer,
corporate merger, or development of the site, an RP may want to expedite a PA at a site
with low state priority; it may want to provide information to the state agency that would
show .that its site should be taken off the state list or inventory; or it may realize that
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cleanup action is necessary and want to have an early impact on the final remedial plan
accepted by the state. There are economic and environmental benefits to the state as well
to having the RP perform the PA. Sites are addressed earlier than they would have been
if left to the state, and the states save the costs necessary to perform the PA. The states
must provide some assurance, however, that RPs will perform PAs thoroughly and
accurately.
At least one state, Oregon, has a formal "Voluntary Preliminary Assessment
Program" that facilitates and regulates the performance of PAs by willing RPs. The objec-
tives of the voluntary PA in Oregon are to gain an understanding of the site, to determine
whether there has been a release, to identify sites requiring immediate response or further
action, and to identify sites requiring no further action. Under a written agreement with
the state agency, the RP pays $2,200 to the state for agency oversight of the first two
phases of a three-phased PA process. In the first part of the PA, the RP performs a
historical record search of the site and of the waste handled there and prepares a report for
the agency. The PA may be terminated at the completion of the first phase if the state
agency makes a determination that there should be no further action taken. If questionable
use of hazardous substances at the site is suspected, however, the RP must prepare a
second report evaluating the exposure pathways and potential receptors for the hazardous
substances. If the agency cannot make a determination of no further action at that point,
the PA process moves to phase three which requires the RP to provide sampling and
analytical data sufficient to enable the agency to determine whether there has been a
release and whether further investigation is warranted. A parallel agency review of certain
files and a site visit after completion of phase two help assure the quality of the RP-
provided data.
While other states may encourage RP preparation of the PA informally, the
advantages of instituting a formal mechanism for voluntary PAs are numerous. It assures
consistency among PAs performed by various RPs and those performed by the state
agency. RPs know exactly what is expected of them and what their short-term liability is.
By establishing a fee system for PA oversight, the state agency recovers costs that can be
spent on other aspects of the cleanup program.
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IH. PROPERTY DEVELOPMENT
Another prime opportunity for a state to establish an incentive for an RP (or even
an innocent party) to perform voluntary actions is when the site is being considered for
development. Local zoning boards or planning commissions may require assessments or
investigations of a piece of property before permitting development. For example, a local
zoning board in Oregon denied permission for the developer to develop property that
contains sludge deposits. The developer is now performing a PA/SI to find out more about
the potential contamination. In New Jersey, the Department of Environmental Protection
has established a special unit to handle these "developer sites", which the state defines as
properties at which someone not responsible for contamination is willing to remediate the
site so that a new development can be established. These sites are often of a low environ-
mental priority for cleanup and would not be addressed in the near term by the state. By
establishing a unit solely responsible for these sites and funded by the developers through
payment of DEP's administrative costs, more sites can be cleaned up at a quicker pace
while at the same time obtaining the economic advantages of redevelopment of the
property.
Thus, a state can take advantage of this economic incentive to have a clean property
for development and can increase the number of voluntary PA/SIs conducted at state sites.
Local zoning boards or planning commissions can deny development until an assessment
and cleanup of the property is accomplished. In addition, a state can take advantage of a
developer's wish to avoid environmental liability by facilitating and encouraging the
voluntary performance of the PA/SI by the developer. To this end, the state could provide
assistance in obtaining access to the property for the developer or provide oversight of the
PA/SI process even though it is not considered a cleanup site.
IV. FINANCIAL ASSISTANCE TO RPs FOR CLEANUP
Another state innovation to encourage voluntary RP cleanups is for the state to
provide financial assistance for voluntary cleanups. The Oregon superfund program
established its Financial Assistance Program in 1989. Under this program, the state loans
money from the state hazardous substance fund at negotiable interest rates and terms to
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marginally solvent RPs. Pennsylvania also authorizes its Fund money to be used as loans
to assist industries in cleaning up sites, but limits the total amount available for this
purpose to $100,000.
While a financial assistance program ties up state money in the short term, litigation
costs are avoided, interest is earned, and sites are remediated faster. It is too early in
these programs to determine if such financial assistance will have a positive impact on RP
participation. Such assistance would appear to be most beneficial for those small
companies who are willing to remediate their property, but who lack the necessary
resources up front to accomplish the task.
V. PUBLICITY
The business community is always sensitive about its public image, and states can
use that sensitivity as an incentive for voluntary cleanups. Many states, usually under legis-
lative mandate, prepare a state hazardous sites list or inventory with either confirmed or
suspected contamination. Publication of this list alerts citizens to hazardous waste sites in
their communities and puts RPs who own those sites in the position of defending their
good image within the community. To protect that public image, RPs will often decide to
participate voluntarily in the investigation and remediation of a site on their property rather
than let the site languish on the state list until the state acts against the RP. For example,
after North Carolina published its Inactive Hazardous Sites Inventory in May 1989, approx-
imately twenty companies immediately approached the state with an interest in voluntary
cleanup or in submitting further site data that would remove the site from the Inventory.
Negotiations are now underway with these RPs.
After publication of a list of sites with suspected contamination, some RPs whose
sites are listed may volunteer to prepare the preliminary assessment or site investigation.
The impact from publication of a state hazardous sites list is reduced, however, if it is
difficult to place a site on the list or if an RP has an opportunity to contest the inclusion
of its site, as is the case in Iowa, Oregon, and other states. An RP might decide that its
energy and resources can be better spent trying to contest the listing rather than cleaning
the site to achieve delisting. Moreover, publication of a state inventory will generally have
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an impact only on those RPs who are most financially viable and concerned about their
reputation with respect to the protection of health and the environment.
VL PERMIT BARS/PERMIT REVOCATIONS
Another state tool that can be effective in achieving voluntary participation by RPs
in the investigation and cleanup of a hazardous waste site is the permit bar (also called a
"permit block"). A permit bar authorizes the state to deny a permit (or a permit modifi-
cation) based on the applicant's violation or history of violation of environmental laws.
Pennsylvania and Maryland both have permit bar provisions that authorize permit denial if
an applicant has at any time or location committed a violation of any state law, rule, order
or permit concerning hazardous substances. (Pennsylvania also allows denial if a federal
environmental law has been violated.) Assuming a violation can be established, these states
can use this discretionary authority to hold up or deny a permit until an applicant has
investigated and/or remediated a site. Both states make frequent use of these provisions to
obtain compliance. Even states that contain provisions requiring the agency to give
"consideration" to an applicant's compliance history when deciding to grant or deny a
permit may be able to use the permit process as leverage to obtain voluntary cleanup of a
superfund site.
Such a permit bar recognizes the strong economic incentive for obtaining the permit,
and uses that incentive to pressure an RP into correcting a problem that may be unrelated
to the facility for which the permit is sought. Even in states that do not have permit bar
provisions, state superfund agencies should recognize that an RP's application for a permit
may provide a perfect opportunity to exert some pressure for voluntary action with respect
to an RP's superfund site. The state can only take advantage of this opportunity, however,
if the permit and superfund sections communicate and work together.
Of course, the threat of revoking an existing facility permit is also a useful enforce-
ment tool in obtaining compliance with a state's cleanup requirements. For example, the
New Jersey Spill Act authorizes the state to revoke a solid or hazardous waste facility
permit for violating a Spill Act directive to clean up a hazardous substance discharge. The
threat of losing one's ability to conduct business may be a strong economic incentive for
complying with a state's cleanup order. For further discussion on permit suspension and
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revocation as an enforcement tool, see "State Hazardous Waste Enforcement Study,"
prepared by the Environmental Law Institute for the Office of Waste Programs
Enforcement, RCRA Enforcement Division, U.S. Environmental Protection Agency, October
1987.
vm. CONCLUSION
There are many mechanisms that a state may adopt to encourage RP voluntary
participation in the remediation process, and many states are leading the way in employing
these tools. While the advantages from instituting and using these incentives may be
difficult to quantify, most state officials believe that voluntary RP participation is essential
to the cleanup program, and it appears that these mechanisms help foster that participation.
A "model" cleanup statute would likely contain a combination of the incentives discussed
above, ranging from the most coercive requirement that the department approve of site
transfers to programs that facilitate a private party's preparation of an environmental audit
and/or preliminary assessment.
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CHAPTER FIVE
PROGRAM ORGANIZATION AND SITE MANAGEMENT STRATEGIES:
COORDINATING CLEANUPS EFFICIENTLY
The quality and scope of a state program hinge on the reliability and level of
funding, staff size, and the legal and financial tools available to encourage RP participation
in the cleanup process. In addition, strategic planning and management approaches have an
important bearing on program success.
This chapter examines how differing approaches to program implementation and
differing program strategies can influence resource allocation, and how staff resources can
be marshalled to achieve program goals.
I. THE INFLUENCE OF PROGRAM IMPLEMENTATION
ON RESOURCE ALLOCATION
From site discovery to remedy selection and cleanup, the resource needs for each
step of the cleanup process are largely determined by the results of the previous steps.
The key decisions during the cleanup process are reviewed in this chapter relative to their
potential impact on staff and funding levels.
Site Discovery
Site discovery efforts reveal the extent of the abandoned hazardous waste problem
in a state, identify problems needing further study or action, and allow a state program to
determine if actions are necessary to address human health and environmental risks. As
the first step in the cleanup process, site discovery is capable of both consuming and
conserving resources and staff for state sites.
Site discovery approaches among states range from passive to active. Passive site
discovery programs as in Colorado and New Hampshire rely on citizens, landowners, and
local officials to identify and report sites. The Oregon Department of Environmental
Quality (DEQ) uses an intermediate approach by reviewing state documents for clues about
undiscovered sites, as well as responding to referrals. More active approaches by states
such as North Carolina include document searches, investigations and inspections, and the
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use of mandatory disclosures for land owners. There are both advantages and
disadvantages to passive and active site discovery efforts.
Passive Discovery
The greatest virtue of passive discovery is the minor up-front demand it places on
program resources, an important consideration as the federal government does not fund
state discovery efforts. In addition, supporters of passive discovery contend that the worst
sites are probably uncovered without active state searches, arguing that resources are better
used in other program components like remedial investigations or remedial actions.
There are also disadvantages to passive site discovery. For one, state planners risk
missing seriously contaminated sites, or they may not learn the full breadth of their hazar-
dous waste problem. More complete information about the extent of a state's hazardous
waste problem could enable program officials to make more effective appeals to their
respective legislatures on staff and funding needs. Further, passive discovery programs may
not find sites until they have reached a critical stage, resulting in possible acute risk and
the need for an emergency response.
Active Discovery
Active site discovery efforts are likely to uncover more sites earlier than passive
efforts. Also, if actions at these sites are taken relatively early, states can potentially offset
future remedial action costs that may increase as the site is left unaddressed over time.
Another advantage to active site discovery efforts is that states might gain better knowledge
about the nature and breadth of their total hazardous waste problem. This knowledge can
be used by states to forecast resource and staffing needs, to set priorities for addressing the
worst problems first, and to persuade legislators to better match funding with the size of
their problem.
As with passive discovery approaches, active discovery approaches also have
disadvantages. For example, active site discovery efforts may divert some of a state's
resources from remedial investigations and cleanup, thereby delaying progress on previously
identified sites. Because many states have a large backlog of discovered sites awaiting
further attention, it can be argued that further discoveries are somewhat gratuitous. That is,
newly discovered sites may not be addressed in a timely fashion because of the backlog.
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The assumption that the worst sites have already been discovered, coupled with the backlog
problem, may be reasons why many states have opted to use more passive approaches to
site discovery.
As discussed in Chapter 4, in states like New Jersey, Illinois, and Minnesota, certain
disclosure, recordation, and environmental assessment/audit requirements must be met
before property is transferred. Such state requirements serve as a partial substitute for an
active site discovery program, identifying more sites than would a purely passive approach.
Because prospective buyers and their lenders have an interest in avoiding the liability that
is attached to contaminated land, there is considerable incentive and willingness on their
part to perform and pay for these preliminary activities and, in some cases, a voluntary
cleanup. These private party efforts relieve state resources and staff that may then be con-
centrated on other program areas, while still maintaining a somewhat active discovery
approach.
Pre-remedial Screening and Site Listing
The purpose of pre-remedial screening and site listing is to select sites for further
action. Many states have chosen not to adhere strictly to the Hazard Ranking System
(HRS) used by the federal EPA, instead scoring sites according to their own criteria or
using a variation of the HRS. For example, the Illinois Environmental Protection Agency
(IEPA) uses the HRS but lists any site scoring 10 or higher, whereas the federal EPA lists
sites scoring 28.5 or higher. Among other things, the IEPA scheme downplays the federal
emphasis on potential exposure of large populations. Some states like Michigan place
higher emphasis on natural resources. There, the Department of Natural Resources (DNR)
makes groundwater remediation a high priority, regardless of the size of the affected
population.
States commonly employ objective pre-remedial and site listing approaches by using
specific criteria and defined ranking systems. A notable exception to this trend is Montana's
subjective ranking system. Using a list of unquantified criteria such as potential or actual
groundwater contamination, threats to wildlife, and the potential for explosion, the Montana
Department of Health and Environmental Sciences (MDHES) determines if sites are high,
medium, or low priority or whether they require no further action.
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States such as Montana with few resources or sites may choose to avoid extensive
pre-remedial screening and site listing efforts. Though this approach may conserve
resources in the short-term, it does not provide a strong basis for making effective risk-
based decisions about site ranking or appropriate resource allocations among sites. Without
more defined information about the extent or severity of risk at a site, state officials may
be prone to direct their attention, and perhaps funding, toward sites where public pressure
is heavy, rather than to sites of highest risk. In short, defined scoring systems such as the
federal HRS presumably identify the worst sites by some kind of objective measure, can
serve as a means of imparting the relative risks of sites to the public, and provide better
information for prioritization and resource allocation.
Lacking resources or staff, a state program may wish to limit its listed sites as a
means of concentrating on its worst problems. The New Hampshire Department of
Environmental Services (DBS) has reversed its previous policy of comprehensive site listing
in the last several years. Claiming to have identified its worst sites, state officials place a
higher priority on listed sites, while deferring threats that may exist at unlisted sites.
Actually listing sites is not as critical if a state maintains a commitment to site discovery.
However, programs that are lax in both site discovery and listing may not be addressing
the state's total hazardous waste problem and may not be effectively planning for, or
informing their legislature about, future funding and enforcement needs.
A continuous and active site listing program can drain resources needed for other
activities such as RI/FS, oversight, CERCLA match, or O & M. However, investing in
certain site listing approaches may not be extremely resource intensive and can have long-
term payoffs, resulting in efficient use of state resources. Some states use site listing
approaches that cause RPs to respond early, at the listing stage, to avoid the negative
publicity of being associated with a hazardous waste problem. In fact, RP-led remedial
work has begun at sites that officials oversee but leave unlisted, as long as RPs continue to
conduct work.
For example, in Pennsylvania the Hazardous Sites Cleanup Act requires the state
program to give RPs notice 90-days prior to listing, and sites may be delisted if RPs enter
into settlements in which they agree to conduct site cleanup. States like Illinois have found
that notice letters and listing are sometimes enough to elicit RP response. Similarly, when
North Carolina published its Inactive Hazardous Sites Inventory in May 1989, about 20
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companies approached the state expressing an interest in voluntary site cleanup or the
chance to submit further information about sites in the hope that some would be delisted.
These types of listing policies can effectively draw in RPs wishing to avoid public notice
and thus poor relations with the community. The state must balance its interests in
obtaining RP participation against the loss in public accountability from such practices. On
the other hand, the New Hampshire policy virtually eliminates the option for this type of
strategy. Without some degree of commitment to continuous listing, RPs have little
incentive to reveal or remediate sites that the state has no intention of listing.
A state may choose not to list a site in its cleanup program, choosing instead to use
other authorities that may be stronger or supported by larger funds. For example, state
RCRA or clean water authorities may prove the mightier hammer to induce RP response,
and program planners may wish to exploit these other authorities first. These approaches
are discussed more thoroughly in Section n of this Chapter.
Investigation In Support of Remedy Selection
State-led RI/FSs are costly program efforts that can strain a state's resources or
work capacity. When RPs or their contractors conduct an RI/FS, a state's resources and
costs shift to RP oversight. States may choose variations on the RP-led RI/FS theme, such
as allowing RPs to conduct only the RI, while the state conducts the FS. Because the FS
is the key step preceding remedy selection, many state officials argue that it should be
conducted by the states, regardless of RP ability or willingness to conduct it. Also, FSs are
typically less expensive than RIs, representing a lesser drain on state resources. Because of
the resource burden of RI/FSs, however, states with numerous orphan sites may hesitate to
conduct RIs or FSs at sites where RPs are willing and able to do so. The advantage of
the state performing the RI or FS may be offset by the resource burden under this
circumstance.
There are other approaches that can save time and resources on FSs. For example,
the Minnesota Pollution Control Agency (MPCA) is considering the use of a generic FS
process. MPCA officials contend that there are consistent remediation requirements for
certain groups of sites, and they hope to reduce the time and resources spent on the FS by
standardizing the process.
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Remedy Selection and Cleanup
Remedy selection and cleanup decisions are important program organization issues,
because they impinge on staff time and resources before, during and after remedial action.
This section covers two aspects of remedy selection and cleanup as they bear on program
organization: (1) the value of a community relations staff, and (2) remedy selection and
cleanup criteria as they bear on present and future staffing and resources.
Community Relations
This study revealed that few designated community relations staff exist in state
superfund programs. In most instances, project managers handle public and press inquiries
about site progress, remedy selection, and other issues. Often, states rely on regional EPA
offices to conduct community relations efforts for their NPL sites. There are, however,
several noteworthy state community relations programs—including those in Illinois and
Minnesota—that lend credibility and enhance public communications for their remedial
programs.
The Illinois Environmental Protection Agency (IEPA) community relations staff,
which reports directly to the IEPA Director, is used extensively by the Remedial Program
Management Section (RPMS). Eight community relations staff work closely with project
managers to stay abreast of progress at roughly 160 sites. The community relations super-
visor directs the staff to communicate with project managers at least once every three days.
The IEPA community relations supervisor stresses several reasons for creating such
programs. First, the public should be educated about the health and safety threats posed
by a site and the remedial actions planned to correct them. As part of this effort, IEPA
has printed detailed fact sheets on the hazards and other characteristics of 50 common
chemical contaminants, the status of specific sites, and the details behind chosen remedies
for specific sites. IEPA holds public meetings to answer questions for residents near sites.
This sort of public education by the community relations staff frees project managers from
this time-consuming task.
A second reason for establishing a community relations program is that the public
adds information about sites when they are invited to participate in the process. In Illinois,
citizens have identified RPs after state officials could find none. Public comments have
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even helped improve remedial action plans when local features about a site or its
surrounding area were noted by citizens.
Of course, the public has an opportunity to comment in most states, but the Illinois
program encourages a well-informed public, which fosters public trust, encourages
information exchange that potentially aids the state agency, and may lead to especially
useful public comments. Officials in the RPMS stress that controversial remedial selections
such as incineration have met with greater public acceptance and less anxiety as a direct
result of community relations efforts.
In Minnesota, a Public Information Officer is assigned to each active site to handle
press and public inquiries. A staff of three such officers is responsible for all public infor-
mation on superfund sites there. A few states, such as New Hampshire and Pennsylvania,
are considering or have hired separate community relations staff for their state cleanup
programs. Colorado has already done so for its CERCLA natural resource damage sites.
In some states, extensive public participation requirements are akin to small scale
community relations programs. Oregon's statute, for example, requires its Department of
Environmental Quality (DEQ) to notify all daily and weekly newspapers and all broadcast
media of potential and actual releases of hazardous waste. DEQ must provide public
notice of proposed remedial actions, allow at least 30 days for written comments, consider
those comments, and conduct public meetings if at least 10 people have requested it.
Approved remedies must be published, and DEQ is required to provide notice and
comment on its cleanup settlement agreements.
Remedy Selection and Cleanup Criteria
In the context of program organization, remedy selection and cleanup criteria can
affect staffing and resources requirements necessary for site remediation. Extended or
resource intensive remedies often consume more resources early, but they may save signifi-
cant operation and maintenance (O & M) costs over the long-term. Limited remedies save
resources early, but they may necessitate greater O & M expenditures later. For instance,
containment-based remedies are by their nature less expensive than treatment-based
remedies but, when the entire life of a site is considered, may ultimately require more
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funding.80 Few states have many sites in the O & M phase, raising the possibility that
some program planners may not yet realize the tremendous staff and funding requirements
for these sites in the coming years. State officials will need to consider the relative
resource requirements for site action-both during and after remedial action. A clear view
of growing O & M costs is an important part of that assessment and will need to be
understood before staffing and budgets can be figured accurately.
Under the 1990 NCP, EPA now covers O & M costs for up to 10 years for federal
Fund-lead sites undergoing groundwater or surface water restoration. Under the 1985 NCP,
O & M costs for such remedies were only covered by the federal government for one year.
The remainder was covered by the states, but now state O & M payments for NPL Fund-
lead sites can be delayed for an additional nine years under the new federal policy.
Many states determine cleanup standards on a case-by-case basis, requiring staff to
research appropriate technical standards for each site. An up-front investment of state
resources and staff may be needed to develop and establish overall cleanup criteria or
standards. However, in the long-term, such standards can provide efficiency and a savings
in staff time and resources. There may be cases where cleanup criteria or standards (such
as state ARARs) can relieve the state planners from conducting risk evaluations for each
remedial action plan. For example, BEPA maintains a consolidated list of state ARARs,
which state officials contend conserves time in evaluating and determining site remediation
goals.
II. INFLUENCE OF PROGRAM STRATEGIES
ON RESOURCE ALLOCATIONS
The coordination of program functions depends largely on how a state organizes its
sites and risks. In this section of the chapter strategies for addressing sites are divided into
categories commonly used by states, not all of them mutually exclusive. The basic distinc-
80. The Regulatory Impact Analysis (RIA) prepared for the recently amended National Oil
and Hazardous Substances Pollution Contingency Plan (NCP) determined that containment-
based remedies were more expensive than treatment-based remedies when the life-time
O & M costs for both kinds of remedies were included. In brief, containment-based
remedies are more likely in the long-term to fail or to require closer monitoring than
treatment-based remedies.
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tions are RCRA (or RCRA-like) versus CERCLA cleanups, removals versus remedial
actions, NPL versus non-NPL cleanups, and enforcement-lead versus fund-lead cleanups.
Each of these distinctions relates to program coordination and organization.
RCRA/CERCLA
Some states lack funds for the remediation of abandoned hazardous waste sites (e.g.,
Nebraska, Delaware) or lack state authority to compel cleanup of non-permitted facilities.
Thus, many states must rely on RCRA or RCRA-like authorities to compel cleanup of any
kind. As noted in An Analysis of State Superfund Programs: 50-State Study. 13 states rely
on RCRA, solid waste, or water quality authorities to offset a lack of "superfund" authori-
ties or resources. Other states use similar authorities to bolster their superfund tools. Using
such authorities is a logical option for states with no "superfund" programs or for states
wishing to supplement the legal and financial provisions of their hazardous waste
remediation statutes.
Though state programs generally do not separate CERCLA and RCRA programs as
distinctly as the federal government, they need to consider a variety of issues—such as
funding sources and their restrictions, the potential for pre-enforcement review, staffing and
resource levels, and potential statutory limitations on cost recovery-when they decide to
integrate or separate the different statutory elements in the composite cleanup program.
Each state should evaluate its statutory and programmatic strengths and weaknesses
to determine if and how RCRA/CERCLA elements might function in relation to each other
in order to expedite site actions. To use a simple example, Colorado officials may choose
to exploit their RCRA corrective action order authorities on sites for which the state is
unable to provide the CERCLA match. In Texas, a RCRA-based request for action may
circumvent the threat of RP appeals, which are permitted under the state superfund statute.
A RCRA-based enforcement program requires different staff resources than a
CERCLA-type program. For one thing, staff will be dealing with a limited universe of RPs
(viz, the owner/operator). For another, the effort may need to be coordinated with active
permitting of operating hazardous waste units. This coordination function suggests use of a
team approach of cleanup personnel and permit writers.
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NPL/Non-NPL
Many state programs are legally or effectively required to focus on non-NPL sites,
while other states choose or are compelled to concentrate on NPL sites. The advantages
and disadvantages to either approach are important.
Targeting NPL sites is an understandable strategy for states in many regards. First,
NPL sites are commonly the most seriously contaminated sites in many states. Conversely,
non-NPL sites are often orphaned and usually represent lesser site-specific risk than NPL
sites, making them lower priorities. Second, even well-funded state programs possess finite
resources, encouraging them to focus on their largest and worst sites, as well as those sites
with multiple RPs, and these are generally the NPL sites.
On the other hand, NPL state match requirements may be large enough to limit
severely uses of state monies on other sites. This is especially problematic if a state's non-
NPL sites are numerous or represent a larger aggregate risk than the state's NPL sites.
Also, state preferences for enforcement or remedy selection may be compromised by
targeting the federal sites. Each state needs to determine its priorities with consideration of
its ability to match CERCLA funds and its desire to target non-NPL sites which may
present a larger problem in the eyes of state officials or the community.
In Colorado, 95 percent of the Hazardous Substances Response Fund, which is the
primary fund for remedial costs, must be used for state match money on NPL sites; the
remaining 5 percent of fund monies may be used for administrative costs. These require-
ments effectively prevent the development of a non-NPL superfund program in Colorado.
Currently, the state has 16 NPL sites and 345 non-NPL sites. The statutory limit on the
use of the Colorado fund may in fact be preventing state officials from addressing what
might be a larger aggregate environmental problem.
For different reasons, Texas has a marginal non-NPL program. Though not required
by statute, the Texas Water Commission (TWC) clearly focuses on NPL sites. Only five
of twenty-nine staff positions in the lead superfund section perform non-NPL work. In
addition, this small unit lacks field and technical support and has no capacity for RP
searches. Though the TWC may be acting on what it perceives to be a larger threat from
its NPL sites, its failure to balance better its non-NPL staff and resources with those of its
NPL program may be hampering its ability to define and better characterize the non-NPL
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sites. This approach may result in misjudging the extent of the non-NPL problem, which in
turn may result in risks that are not being appropriately addressed in a timely fashion.
Removals/Remedial Actions
Some states may not use state cleanup Fund monies for removals (Arkansas,
Colorado, West Virginia, Wyoming), and others may not use them for non-NPL remedial
actions (Georgia, Hawaii, Nevada, West Virginia, Wyoming).81 Restrictions on either
activity require creative planning for states hoping to see their sites through the entire
cleanup process.
States not authorized to conduct remedial actions may choose to concentrate on
enforcement and site oversight. States with this restriction may also use a remedial/
removal hybrid, known as a "removial," which allows them to stabilize sites through a
simplified remedial planning process. Removials may also delay the need for remediation at
some sites, an important consideration for states with limited staff or funds. In fact,
conducting more removals or removials may be an effective option at some sites to contain
site contamination until full remediation can take place. Because removals commonly
eliminate the immediate threat on sites, and because they typically cost far less than
remedial actions (several hundred thousand dollars versus $5-20 million), removals and
removials (which may cost up to $2 million) are a valuable interim measure that can be
used more often by states with limited funds.
For states unable to conduct remedial actions, there are several options in addition
to removals, such as a hand-off to the federal program, aggressive enforcement, or the use
of other corrective action authorities when available.
Enforcement-lead/Fund-lead
The enforcement-lead/fund-lead distinction is the sharpest on the federal level; it is
not as important on the state level. Perhaps due to their smaller size compared to the
federal program, even large state programs such as New Jersey's are generally able to
switch the lead on their sites as conditions warrant. The scope of the federal program
81. An Analysis of State Snperfund Programs: 50-State Study. As discussed here, the
inability to use funds for select activities arises by either statutory omission or specific
prohibition.
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makes switching less easy, but any state stressing this distinction as a way to plan staff
and funding on sites needs to consider the delays such a distinction may cause.
Assuming a site will require fewer resources or less staff time because it is an
enforcement-lead may be a mistake. Poor information tying RPs to sites, RP recalcitrance,
sites with multiple small RPs, the need for extended oversight, and the likelihood of
protracted negotiations all place great resource burdens on enforcement-lead sites. Federal
remedial project managers (RPMs) on enforcement-lead sites have commonly remarked that
these sites can require more administrative time than fund-lead sites. As a result, officials
in state programs should assess the number of sites their staffs can realistically address,
without assuming that enforcement-lead sites will lessen administrative burdens merely
because RPs may conduct more on-site activity.
IE. STAFFING APPROACHES
There are at least three general approaches for managing the site cleanup process: 1)
the RPM/contractor support approach, in which each site is managed by a single RPM who
is supported by contractors for the variety of technical and administrative site tasks; 2) the
team approach, in which managerial, technical, and enforcement personnel coordinate their
efforts in a planned, organized manner, and 3) the expert approach, which is a hybrid
between the first two in which project managers coordinate other experts and rely heavily
on each other. The last two approaches may use contractor support, but their basic
organizational thrust continues to rest on internal coordination.
The RPM/Contractor Support Approach
The RPM/contractor support approach assigns a single RPM to manage all aspects
of superfund site responsibilities. Often generalists (or experts in only one field), such
RPMs are assisted by contractors for the variety of technical, managerial, and enforcement
tasks that attend each site. Thus, with this approach, single RPMs typically coordinate site
sampling and assessment activities, PRP searches, site investigations, remedial planning, and
other activities through the efforts of their contractors. The perceived advantage of this
approach is that it gives full responsibility for a site to one individual, who becomes expert
on the gamut of issues that surround the given site.
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The most obvious disadvantage of the RPM/contractor support approach is the
numerous tasks it places on one individual. This disadvantage has in part spurred the
federal EPA to modify its own approach by increasing the technical assistance available on
staff. Many state programs studied for this report, including Texas, Colorado, Pennsylvania,
and New Hampshire, appear to be recognizing the difficulty of assigning so many varied
tasks to one person.
The second major disadvantage of this approach is that the institutional knowledge
of a site is effectively lost if the single RPM departs from the program. Both the federal
EPA and the states have noted this in interviews. Some states using the RPM/contractor
support approach, such as Illinois, have been fortunate enough to experience low turnover,
but the federal EPA and a variety of other states have suffered from such RPM turnover.
On the other hand, states with few sites may not have a pressing need to form site
teams or develop integrated expert approaches such as in Oregon. As a result, the
RPM/contractor support approach may be more useful for very small programs or those
with few sites. Moreover, this approach can be modified into a team or expert approach
fairly readily, which may be an asset for small- to medium-sized programs that are
expanding.
The "Team" Approach
Though many programs effectively function in a team-like manner, a few states
have unusually integrated programs in which technical, managerial, and legal personnel
combine their efforts with particular success.
As officials in the Minnesota program have noted, there are two principal
advantages to a team approach. First, individuals may focus on their area of expertise
while combining their skills with other staff members in the negotiating and site
management teams. Rather than forcing experts to learn the specialties of their colleagues,
they work together while concentrating on their respective fields. In a successful team
approach, therefore, an engineer will not spend inordinate amounts of time on budgeting,
information management, public relations, or evaluating enforcement options when other
specialists can handle all of these functions more knowledgeably and efficiently. Such an
approach introduces a potential problem of team coordination, but this can be handled by
the project manager.
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As noted by Minnesota officials, a second advantage of the team approach is that it
mitigates the disruptions caused by inevitable staff turnover. Namely, when a group of
individuals is involved in any site, the loss of any one represents only a partial loss in the
institutional knowledge of that site. When a program still possesses two, three, or more
people continuing to work on a site, the accumulated knowledge of that site is not lost
with the loss of one program member.
The invariably protracted histories of most sites argue in favor of team planning.
Sites commonly have histories in excess of ten years, and few project managers remain in
those positions that long, even if they remain with their respective agency. Comparing
average staff turnover rates with the average duration of site history makes a strong
argument in favor of more integrated program and site management efforts. This would
prevent the disruptions that stem from losing highly trained and experienced individuals
which, as noted, is one of the great disadvantages of the single project manager approach.
In addition, disruptions caused by the loss of managers in the single manager approach not
only result in delays, but they hurt an agency's credibility when site work halts in mid-
stream.
Minnesota Model
The Site Response Section in the Minnesota Pollution Control Agency (MPCA),
which bears the largest superfund workload in the state, uses an integrated team approach.
Each site is assigned a Project Manager, a Technical Analyst, an On-Site Inspector, a
Public Information Officer (PIO), an attorney, and sometimes an engineer. According to
MPCA officials, these teams engender continuity and promote consistency throughout the
superfund program. Team members work on both fund- and RP-lead sites, which fosters
useful exchanges of knowledge and contributes to consistency in MPCA efforts across sites.
The Project Manager is the central member of each team, coordinating activities,
budgets, and work schedules. Also, MPCA project managers serve as the general site
contact people. The range of expertise assigned to each site allows Project Managers to
focus on the management issues relating to their sites. In addition, Project Managers are
the official MPCA representatives in negotiations with RPs, though they are typically
assisted by their unit supervisor, an attorney, and a technical analyst. Responsibilities
among team members are clearly defined, and members are generally drawn from the same
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unit. (There are five units working on superfund in three sections, all in the Division of
Groundwater and Solid Waste.)
New Jersey Model
The DEP program has been structured to ensure that case management teams are
given sites appropriate to their expertise. In particular, the Bureau of Planning and
Assessment assigns sites to the proper program element after completing a preliminary on-
site investigation and RP search. Divided into a variety of elements because of its sheer
size, the New Jersey program assigns the bulk of its work to either the Responsible Party
Cleanup Element or the Publicly Funded Cleanup Element. Both of these elements use
case management teams, which typically consist of a manager, a technical coordinator, and
a geologist.
Based on its review, the Bureau assigns and then tracks sites through the program,
which promotes consistency in site management and progress. Whether in negotiations,
study, remediation, or enforcement, the Bureau of Planning and Assessment acts to direct
site efforts in a consistent manner. When necessary, sites switch easily from one element to
another. Those assigned to the Responsible Party Cleanup Element have separate negoti-
ation teams, which free managers from that process to continue resolving on-site issues.
The magnitude of the New Jersey program allows a unique division of labor that
may or may not afford actual program benefits. Yet the very ability to switch sites from
fund- to enforcement-lead enhances the leverage that DEP can use to motivate RP action.
As a result, the relatively rigid distinction between these approaches created in the federal
program has less potential to stymie negotiations or funding for New Jersey sites, regard-
less of how circumstances unfold. This is an obvious asset for the New Jersey site
management teams.
The "Expert" Approach
As mentioned earlier, the expert approach is a hybrid between the first two.
Through RPMs collectively, sites are managed in a way that exploits their varying expertise
as needed at sites-not merely to ones that they have been arbitrarily assigned. Thus, in
the expert approach, a site may have a single RPM taking the lead on activities, but that
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RPM is not the only one who works on the site during the lengthy remediation process
(from discovery to final O & M).
Oregon Model
The use of project managers in the Site Response Section in the Oregon Department
of Environmental Quality (DEQ) represents a unique hybrid of the RPM and team
approaches. When the DEQ program began, one project manager was responsible for all
aspects of his or her assigned site. Technically proficient in only one field, however, the
project managers were forced to coordinate with managers trained in other fields to fulfill
RI/FS efforts such as site and risk characterization. As a result, project managers were
expending considerable time on sites not assigned to them. This situation created coordina-
tion problems, confusion in accountability, and a decline in staff morale. Moreover, under
this scheme, project managers were not credited with time spent on other projects.
Recently, DEQ devised a new system where project managers devote 60% of their
time to their sites, 30% of their time to assist and consult with project managers assigned
to other sites, and 10% of their time to training. In effect, a staff member serves in part as
a project manager and in part as an "expert" in his or her field available to other project
managers. This system has eased the RI/FS review process, oversight, information exchange
among project managers, and markedly improved staff morale.
As the Oregon experience suggests, the expert approach has the advantage of
combining staff expertise at sites. This kind of coordination broadens the experience and
perspective of RPMs in a program, and it allows them to make more optimal use of the
collective staff expertise among sites. It also encourages professionalism of the staff, and
rewards expertise. The most obvious disadvantage this approach faces, however, is an
increased need to coordinate sites among a larger number of program staff, which limits
the amount of time that any individual can spend on a single site.
The optimal choice or mix of either single RPM or team approaches is best decided
by individual state program planners, but not many appear to conduct broad assessments of
what this optimal approach might be in their states.
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IV. CONCLUSION
Programs may emphasize different stages of the remedial process. They may also
target different types of sites. Both of these choices will influence staffing patterns and
organization. An organization focused on performance of the FS phase will require different
resources from one that is primarily engaged in oversight of RPs. Likewise an organization
geared to NPL sites may not reflect the disciplines or resources needed for non-NPL sites.
Community relations staffing can be highly beneficial to a state program, in terms
of both community acceptance of state action and information benefiting the cleanup
process.
Staffing organization has taken essentially one of three approaches: the RPM
approach, a team approach, or an expert approach. Experience in the states has shown that
there is much to recommend the latter two approaches.
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CHAPTER SIX
ENHANCING STATE CAPABILITIES
I. INTRODUCTION
Building state cleanup capabilities must be done in terms of the goals a program
sets. Specifically, a state's capabilities are only relevant with respect to the goals that state
is attempting to achieve. Thus, for example, if a state program decides that its primary
objective is to support federal efforts at NPL sites, it will have a different set of funding,
staffing, and organizational needs than a program that attempts to discover and address all
hazardous waste sites. The validity of a state's choice of goals is not addressed in this
report. Such a choice is properly made by the legislative process as informed by state
agencies, citizens' organizations, or other interest groups.82
As noted in Chapter One, program goals can be delineated in terms of the types of
risks of concern, the level of mitigation at each site, the number of sites addressed, and the
pace of cleanups. This report does not attempt to identify a preferred set of goals. Unlike
many federal environmental statutes, CERCLA does not involve development of federal
regulations that state programs subsequently implement. Rather, each state sets its own
priorities for hazardous substance site cleanups. Thus, apart from NPL sites handled by
states under cooperative agreements, program goals can, and in fact do, vary from state to
state.
This chapter identifies alternative approaches that states might use to achieve their
program goals. It does not prescribe a preferred approach. Instead, it sets out alternatives
with respect to various goals and differing resource levels.
Although the typical cleanup process might entail several discrete steps, it can be
divided into three stages: (1) discovery; (2) remedy assessment and selection; and (3)
construction (see Figure 6-1).
82. Such a choice might also be made federally if CERCLA were to become a
"delegated" program.
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FIGURE 6-1
STATE CLEANUP PROCESS
Phase One
Phase Two
Phase Three
Site Discovery
Site Assessment
&
Remedy Selection
Att_
Construction
and
O&M
The next two sections of this chapter discuss alternative approaches for the first two
stages. Although the third stage embodies interesting policy questions, particularly con-
cerning the financing of O&M and the relationship between O&M costs and alternative
remedial action options, these issues were not addressed in the study. Section IV of this
chapter briefly discusses the implications of alternative approaches for EPA and state
program managers.
IL DISCOVERY
States do not have trouble finding sites. A program receives complaints or otherwise
receives referrals of potential sites. In fact, most states have identified hundreds, if not a
thousand or more sites. Yet, there is concern that many more sites have not been dis-
covered to date. Chapter Five briefly described two alternative approaches to discovery--
active and passive. This section refines that analysis, discussing four discovery approaches
and (a) the extent to which they promote program goals, (b) their resource requirements,
and (c) their use in the life-cycle of a cleanup program. See Figure 6-2. The four
approaches to discovery are:
• Passive
• Passive augmented by a property transfer program (passive/property transfer)
• Active
• Targeted active.
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FIGURE 6-2
ALTERNATIVE APPROACHES TO SITE DISCOVERY
Site Discovery
Site Assessment
&
Remedy Selection
_*
Construction
and
O&M
Site Discovery
* Passive
* Passive Augmented by Property
Transfer Provisions
* Active
* Targeted Active
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Passive discovery has been the favored approach in the majority of states. Sites are
identified through complaints, referrals from other agencies, and self-reporting. No
particular resources are devoted to identification of possible sites. Passive/property
transfer is similar to the passive approach except that additional sites are discovered
through the environmental auditing or disclosure provisions of property transfer laws or
programs. Site owners engaged in transactions are required to report on the presence of
hazardous substances on their property and on cleanup status. Active discovery searches for
potential sites and includes activities such as reviews of other agency files and permits, and
analysis of aerial photographs, historical zoning maps, recorded deeds, tax records, etc. A
Targeted active program is like the active approach but is targeted to protect particular
important state resources (e.g. regional aquifer systems) or focused on certain economic
sectors with relatively high probabilities of hazardous waste contamination.
Goals Achieved
These discovery approaches have differing implications for the meeting of state
program goals—particularly the goals relating to the number of sites and the types of risk
that the program intends to address. An active discovery program clearly will discover the
most sites, and put them into the pipeline for consideration for possible cleanup. The more
sites that are discovered, the greater the likelihood that the most risky sites will be identi-
fied and acted upon. A passive discovery program, in contrast, will discover the fewest
sites. However, it may identify those where public concern is the greatest, and thus meet
perceived needs for cleanup adequately; unfortunately, it may also leave particularly hazar-
dous or risky sites undiscovered. The passive/property transfer approach may identify a sig-
nificant number of sites, but the number is wholly dependent upon the level of economic
activity in the state (occasioning the transfers). Property transfer-based discovery does not
distinguish among sites by type of risk. On the other hand, it provides an early assessment
of the type of risk at the sites identified; the parties to the transaction must perform an
assessment. Thus, it may enable the state to focus its efforts effectively on those types of
sites of greatest concern. The targeted active approach may or may not identify a
significant number of sites, but it best serves the goal of matching discovery to the risks of
greatest concern.
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Resource Needs
With respect to resources, the passive approach is clearly the least expensive. The
passive/property transfer approach passes on significant discovery costs to site owners;
however, it also requires an investment by the state to assure that disclosures are accurate
and that cleanups are performed as represented. The active approach is the most costly;
while the targeted active approach is somewhat less so, depending upon the resource or
area targeted.
These alternative approaches have implications for cleanup costs as well. The
passive approach avoids some cleanup costs by simply avoiding the discovery of sites.
However, it may cost money in the long run if there are a significant number of undis-
covered sites. Cleanup costs may rise over time, thus overcoming costs avoided by a
slower discovery approach. The active approach and targeted active approach may cost
more both initially and over the long term because of the number of sites discovered.
However, finding sites more quickly may reduce the average cost of cleanups and/or limit
population exposure (thus producing additional cost savings or public benefits).
The passive/property transfer approach is likely to identify sites with viable RPs.
Thus, cleanup costs to the state should not be significantly increased (apart from oversight
costs).
One significant cost issue with respect to all types of discovery approaches is that
of opportunity cost. Is a dollar spent on discovery one that might have been better spent
on mitigation of known risks? This issue is most critical for those programs with particu-
larly limited funds. It appears that state programs with relatively limited funds may benefit
from expenditure on site discovery. Among other things, a site discovery focus may drive
the legislature to appropriate more funds if the "inventory" of known hazardous sites is
closer to several hundred than it is to twenty. Passive/property transfer discovery programs
can also leverage existing resources by commanding the commitment of private funds to
site discovery and assessments. Thus, even a small state cleanup program with limited
funds may not be best served by an entirely passive site discovery effort.
Life-Cycle Issues
Perhaps one of the least recognized factors relevant to site discovery approaches is
timing. Different approaches appear to be appropriate at different stages of a program's life
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cycle. Active site discovery is most desirable at the inception of a new state superfund
program. It enables the state to identify areas of risk, and to prioritize its response on an
informed basis. Even a poorly-funded new state program benefits from a focus on active
site discovery (even at the possible expense of some cleanup of known sites). Such a
discovery approach can build the legislative case for an expanded, better-funded program.
New programs are also better able to afford an active discovery approach because during
the first few years known sites are not ready for the high expenditures required for cleanup
and remedial construction activities; thus, some funds should be available for discovery
purposes.
Over the longer term, a passive approach may be more appropriate. Once the state
has identified most of its sites and has set priorities, the focus (and resources) may shift to
remediation. Thus, in setting up a new program, a state may wish to establish an active
discovery program and, sunsetting it after approximately two years, revert to a less costly
approach.
The passive/property transfer approach may be useful at any time. Because it
requires a commitment of staff resources to assure that the property transfer approach
works, however, it may be appropriate for a program that has had some experience. The
targeted active approach may also be useful at any phase of a program's development. It
may be the most appropriate for a startup program, but it also can benefit an established
program by focusing limited site discovery resources-perhaps limited by a primary focus
on remediation activities—to where they are most needed.
HI. SITE ASSESSMENT AND REMEDY SELECTION
As with site discovery, there are alternative approaches to site assessment and
remedy selection, hi general these fall into four categories. See Figure 6-3.
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FIGURE 6-3
ALTERNATIVE APPROACHES TO SITE ASSESSMENT
AND REMEDY SELECTION
Site Discovery
Site Assessment
&
Remedy Selection
—
Construction
and
O&M
Site Assessment & Remedy Selection
* Ubiquitous Risk
* Queue
* Cost/Risk
* Passive
While these categories can be distinguished, many state programs involve elements of more
than one. In general, however, a state program will select among these four and adopt one
as its primary approach. The four alternative approaches are:
• Ubiquitous risk
• Queue
• Cost/Risk
• Passive
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Under the ubiquitous risk approach, the state's goal is to mitigate some risks at all
identified sites. This approach emphasizes the importance of removing some risk,
recognizing that it may be years, if ever, before the program can accomplish full remedia-
tion at every site. It has political attractiveness, in that it serves all portions of the state in
some way. On the other hand, it may not address the worst risks or largest problems in a
comprehensive way, and it may defer permanent cleanup action at some sites.
The queue approach simply conducts cleanups as the sites become ready. It is
guided by numerical or other cleanup standards for all sites, and whenever a site is
addressed it is cleaned up in accordance with these standards. The queue does not prioritize
sites on the basis of risk, but addresses them in terms of where they fall chronologically in
terms of the discovery, assessment, and other work already done. A critical issue for a
queue program is how sites are first placed in the queue.
The cost/risk approach uses program resources to alleviate the greatest risk at the
least cost. Thus, it may focus on a few high-risk sites, or a mixed program of removals
and remediation based on the risk reduction that can be obtained with available program
resources. It may not pursue permanent remedies if greater risk reduction at sites
considered in the aggregate statewide can be achieved in other ways.
The passive approach is characteristic of programs with severely constrained
resources. It relies entirely on voluntary actions, sometimes through inducements like
liability limitations. It is not a risk-based approach, and remedies may be variable.
All of these approaches have advantages and disadvantages, and all have differing
implications in terms of risk goals, state funding, and enforcement.83 It should be borne in
mind that the ubiquitous risk, queue, and cosl/risk approaches include a mix of
83. Various versions of these approaches were encountered in the 9-state study.
Pennsylvania's relatively new state superfund program, for example, resembles a ubiquitous
risk approach-relying significantly on removals (interim responses) at many sites during the
startup period. A modified version of the ubiquitous risk approach has also been incorpor-
ated in EPA strategy in the 90-Day Superfund Management Review. This strategy calls for
making sites safer by dealing with acute risk through the removal program followed by
making sites cleaner by addressing those problems of higher priority through the remedial
program. The queue is used in Illinois and New Jersey. The cost/risk approach is not
employed in pure form in any state, although the Texas Priority list resembles an attempt
at this system. The passive approach is exemplified by North Carolina's program which
must rely on voluntary efforts and inducements.
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enforcement-lead and fund-lead sites. In contrast, the passive approach is dependent upon
voluntary efforts with some enforcement-lead.
The differences between these approaches with respect to goals, costs, and their
relationship to alternative site discovery approaches are discussed in turn:
Ubiquitous Risk
The ubiquitous risk approach may be advantageous to a program that has short,
medium, and long term goals. In the short run, the program may try to remove sources of
contamination, later it may return to do additional remediation, and ultimately it may clean
up sites to specified levels. The exact strategy may depend upon program resources, and
the period of time over which the program may operate. The approach provides a way to
address "equity" issues because all sites and hence all geographical areas (presumably)
receive some mitigation of risks. The approach may not be conducive to permanent
cleanups as it may take the "easy" risk reductions while deferring the long-term remedy
until such time as resources or political interest are diminished. A ubiquitous risk approach
clearly is not a "priority"-based approach either. A state may be precluded from pursuing a
ubiquitous risk approach by statutory requirements (e.g. regarding permanent cleanups, or
following through actions commenced with RPs), or by lack of resources. The ubiquitous
risk approach may be used with any of the four site discovery approaches.
Queue
The queue approach basically takes sites in turn and remedies them to specified
standards. The important planning issue is how sites are placed in the queue. There are
essentially three options: (1) following site discovery, sites move on a first-come, first-serve
basis through a standard process of PA/SI, RJ/FS, and RD/RA as resources become
available; (2) sites are screened for a specified risk threshold and then treated first-come,
first-serve with other sites of the same risk class; or (3) sites are queued according to
whether they are likely to be RP-lead. The queue approach works well for achieving
certain risk reduction at the sites addressed. It is also compatible with virtually any number
of sites; the key issue then becomes how long it will take to complete the queue. The
queue does not prioritize on the basis of risk, nor does it attempt to optimize risk reduction
statewide (as does the cost/risk approach and the ubiquitous approach). The queue's chief
107
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advantages are its regularity of process, the achievement of quality assurance on those
cleanups it completes, and its equity effects. The queue may also have strategic advantages
for funding by drawing clear attention to future funding needs; legislators may be able to
hasten cleanups in their districts only by increasing general program funding. The queue
works well with all four discovery approaches, but best serves the goal of risk reduction if
it is paired with a targeted active, or passive discovery program.
Costs and opportunity costs of a queue approach depend largely on the resources
available. The queue works best with a well-funded program. Otherwise, program-wide
activity may be stymied by a few particularly difficult sites or enforcement cases in the
queue.
Cost/Risk
The cost/risk approach offers the advantage of "the biggest bang for the buck" in
terms of risk reduction on a state-wide basis. The cost/risk decision can be made in two
ways: screen out sites with risks of less concern and then attempt to remedy the most
"risky" sites in full; or assess the amount of risk that can be removed at each site at a
given cost. The first approach is somewhat like that of a highly limited priority list, but
allocates funds, enforcement resources, and personnel to a relatively small number of sites.
The Texas state program employs an approach similar to this. The second approach looks
at all classes of risk and at the ease of reducing risk across a large universe of sites. It
may result in inexpensive risk reductions being made at a number of sites, in addition to
remediation of some costlier highly risky sites.
The cost/risk approach is reasonably effective at meeting the goal of risk reduction.
However, it is less effective in meeting the goals of addressing a number of sites or main-
taining the pace of remediation. This approach may work particularly well for state
programs with unstable funding mechanisms. It assures that the greatest risk is reduced
with available funds. Cost/risk does not perform well in terms of equity, since its applica-
tion may result in most of a state's effort being focused on a few sites to the exclusion of
all others. It may also lead to the exclusion of rural areas from a cleanup program.
The cost/risk approach does not necessarily require cleanup to a particular
permanent standard, if this is not a cost-effective use of funds to achieve aggregate risk
reduction. In this respect it is unlike the queue.
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The cost/risk approach may be used with any of the site discovery approaches, but
works least well with passive site discovery. There may be particularly risky but
undiscovered sites under this discovery approach; any of the other three approaches
provides a better prelude to a cost/risk assessment and remediation program.
Passive
The passive approach is entirely dependent upon "voluntary" RP cleanup. It does
poorly with respect to types of risks addressed, as it is non-selective; it addresses only
those sites where a volunteer conies forward. The degree of risk reduction at each site is
dependent upon the level of oversight exercised (and on any limitations associated with
inducements to RP "volunteers" under the system). The number of sites and pace depend
upon a great number of independent factors. Obviously, an active site discovery program or
a passive/property transfer program are likely to increase the number of sites and pace, as
the mere identification of a site as a "state superfund" site can produce a significant
inducement to voluntary cleanup by RPs. Conversely, a passive discovery program coupled
with the passive approach to assessment and remediation will produce a limited number of
sites and slow pace.
The costs of operating a passive program are low; and, indeed, inadequacy of funds
is a typical reason for such a program approach. Long-term costs may be high, however.
Non-remediated sites may worsen over time, or voluntary cleanups that meet only minimal
standards may need to be redone in the future—possibly at state expense (particularly if the
state has given the RPs a release from liability).
In order to address a significant number of sites a passive program must create
leverage or inducements to private cleanup. Absent a credible threat of publicly funded
cleanup, the next best approach is a combination of publicity and aggressive litigation of
one or two cases to establish the threat of enforcement. Inducements based on reduction of
oversight, limitations of liability, releases, or relaxed cleanup standards will produce an
increase in the number of sites addressed and the pace of cleanup, but at the expense of
the risk reduction goal.
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Summary of Phase n Approaches
All four approaches are in use by some state programs. Each has advantages—
ubiquitous risk in terms of equity and number of sites achieving some risk reduction; queue
in terms of completeness of cleanup; cost/risk in terms of efficiency of risk reduction; and
passive in terms of economy. The disadvantages of each have also been highlighted.
State legislators and program managers must keep in mind the identification of their
program goals in terms of type of risk addressed, risk reduction at each site, number of
sites, and pace. Then the selection of a site discovery approach can be coupled with a site
assessment and remediation approach, and both of these matched to available (or
anticipated) resources.
Figure 6-4 summarizes the choices in the context of the three-phase cleanup process.
IV. ENFORCEMENT
As discussed in Chapter in, there are a number of effective methods of
enforcement. All of those enforcement tools are useable with the Ubiquitous, Queue, and
Cost/Risk approaches to site asessment and remedy selection. A program with a truly
passive site assessment and remedy selection process would not, of course, use any
enforcement tools. Few programs are, however, completely passive and use of some
enforcement tools, even if only publicizing the existence of a site, will increase the number
of RPs volunteering to conduct cleanups.
The type of enforcement tool used will not affect the type of risk addressed or the
amount of risk reduction at a site, but it can affect the number of sites addressed and the
pace. For example, tools that depend on litigation require significant time and resources,
and are thus likely, at least in the short run, to reduce the number of sites addressed and
slow the pace. If the program is successful in litigating the cases, the deterrent effect
would be expected to result in more sites being remedied by RPs. This is particularly
likely if the state is successful in claims for punitive damages and/or civil penalties in
significant amounts. Thus, decisionmakers must assess their program goals for number of
sites and pace over the short term and long term when they decide which enforcement
tools to use. The discussion in Chapter 3 of the advantages and disadvantages of the major
enforcement tools includes assessments of their effects on these two goals.
110
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FIGURE 6-4
SUMMARY OF ALTERNATIVE APPROACHES
Phase One
Phase Two
Phase Three
Passive
Active
Passive Augmented
by Property Transfer
Provisions
Targeted Active
->
Ubiquitous
Queue
Cost/Risk
Passive
Enforcement
and/or
State Funded
Construction
and
O&M
t
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V. EPA AND STATE ASSESSMENTS OF PROGRAM APPROACHES
EPA must recognize the complexity of the state cleanup choices in assessing and
targeting its support for state programs. States may select goals or combinations of goals
differing from those of EPA, and may also construct different processes to achieve those
goals, as noted above. Few, if any, state programs will be clones of the federal model.
Accordingly, EPA must consider how to support programs dealing with non-NPL
sites in terms of site discovery and assessment and remediation approaches that are unlike
CERCLA. One way of dealing with this is to inquire of the program what its goals are,
and then assess how the state's selected approaches, legal authorities, and resource mix can
achieve those goals. EPA grant support, technical assistance, or other involvement can then
be intelligently targeted to those areas that most support the program.
For their part, state program managers must determine what their program goals are,
particularly with reference to type of risk, level of mitigation, number of sites, and pace of
cleanup. Then they may select that combination of approaches to site discovery and
assessment and remediation that will best accomplish these goals.
This study has shown that there are many different ways to achieve the goals of a
state cleanup program, but that the goals themselves and the alternative approaches to site
discovery, assessment and remediation are actually limited in number. The most significant
lesson of the study is that a state program should always be looked at comprehensively-
not just in terms of how many dollars are available. Many different programs can be
constructed on the same resource foundation through different combinations of approaches.
Some state programs can even call forth additional resources over time if they are
constructed to do so. This study suggests ways of enhancing state cleanup program
capabilities given any resource base.
112
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PART 2
STATE REPORTS
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FIGURES AND TABLES
FIGURES
page
1 EPA Regions 2
CO-1 Organization chart, Colorado Department of Health 12
IL-1 Number of Cleanup Projects 27
IL-2 Number of Cleanups 27
JJL-3 Organization Chart, IEPA 34
IL-4 Cleanup Expenditures 38
MN-1 MPCA Administrative/Enforcement Process under MERLA 66
NH-1 Organization Chart, Department of Environmental Services 109
NH-2 Organization Chart, Waste Management Division Ill
NJ-1 New Jersey Cleanup Program Organization 131
NC-1 North Carolina Cleanup Program Organization 158
OR-1 Oregon Environmental Cleanup Division Organization Chart 176
PA-1 CERCLIS Sites by DER Region 195
PA-2 Hazardous Sites Cleanup Program Organizational Structure 203
PA-3 Hazardous Sites Cleanup Program Funding 206
TX-1 Texas Water Commission Organizational Chart 227
TX-2 Texas National Priority List (NPL) Site Map 234
TX-3 Houston Area NPL Site Map 235
TX-4 1989 Final State Superfund Registry, Texas 237
TABLES
1 Summary of State Superfund Programs 3
CO-1 Natural Resources Damages Suits: Expenditures
and Recoveries to Date 15
NH-1 New Hampshire NPL Sites 103
NH-2 New Hampshire Hazardous Waste Cleanup Fund:
Selected Financial Information 115
NJ-1 Dollars Committed to Cleanup as of December 31, 1988 136
NJ-2 Underway Remedial Program Project Activity 144
NJ-3 Completed Remedial Program Project Activity 145
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TABLES (continued)
OR-l Confirmed Releases by Type of Business 171
OR-2 Federal NPL Sites in Oregon 172
OR-3 Revenue Projections 89-91 183
OR-4 Site Response Projects 190
TX-1 Fund 550 Revenues from Disposal Fees 230
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INTRODUCTION TO PART 2
Part 2 of the report is divided into two sections. The Introduction discusses the
methodology used to select the States for analysis and describes the interview process and
the format of the State reports. The second section contains the individual State superfund
program analyses.
I. SELECTION OF STATES
Our objective was to select states for this study that would provide regional diver-
sity and a representative range of problems and sites typically addressed by state programs.
We were interested in achieving a mix of states ranging from the largest programs with the
most NPL and non-NPL sites to those programs addressing relatively few sites. We wanted
to examine a cross-section of the country that included mature, established programs and
some relatively new and emerging programs. Finally, we wanted to include some states
with interesting innovations or unique program or enforcement elements.
The first step in the selection process was to screen state programs. This preliminary
screening effort proceeded in two stages. OPPE had recently collected information for five
of the larger state programs-California, Michigan, Minnesota, New Jersey, and New
York~and requested that the ELI project examine at least two of these. Information for the
remaining 45 States, compiled by ELI for another report (An Analysis of State Superfund
Programs: 5Q-State Study), was assessed using the selection criteria described above.
The project team identified nine states that provided a representative mix of super-
fund programs. The nine states are dispersed geographically and represent eight EPA
regions (Figure 1). One program, New Jersey, was established prior to the Federal Super-
fund Program while three programs (North Carolina, Oregon, and Pennsylvania) have been
in operation for only one or two years. Table 1 presents selected characteristics of the nine
state programs and illustrates the representativeness of the states in terms of program
staffing, funding, and the number of hazardous waste sites. A short description of the
factors that influenced the selection of each state is provided below.
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X
I
Vermont
II / % New Hampshire
assagpusetts
-Rhode (slant
onnecticut
New Jersey
. Delaware
Maryland III
District of
Columbia
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TABLE 1
SUMMARY OF STATE SUPERFUND PROGRAMS
Colorado
Illinois
Minnesota
New Hampshire
New Jersey
North Carolina
Oregon
Pennsylvania
Texas
Year
Program
Established
19854
1984
19839
1981
1977
1987
1987
1988
198515
Number of
Program
Staff1
28s
46
80
19
80011
2012
39"
142s
30
Fund(s)
Balance
$5M
$6.75M7
$13M
S1.9M
$145.5M7
$300M
bonds
$616K7
$4.5M
$32M
S12.6M7
Annual Additions
to Fund(s)
S1.35M
$4M7-8
S2-2.5M10
approx. $800K
S27.9M
$225M over 5
years
S600K FY 87-89
$0 FY 89-90
S2.3-2.6M
$52.75M
$9M10
Identified
Hazardous
Waste Sites2
361
224
117
400
3225
799
75014
1100
88
NPL Sites as of
October 19893
Final Proposed
156
26
40
15
103
20
6
87
25
I6
12
2
1
6
2
2
10
4
1. Including staff working on NPL sites.
2. Source: GAO, Survey of States' Cleanups of Non-NPL Hazardous Waste Sites, 1989.
3. Source: U.S. EPA information, Office of Emergency and Remedial Response, October 1989.
4. Seven natural resources damages suits were filed under CERCLA in 1983.
5. Including legal staff.
6. ELI information, 12/11/89.
7. Sum of two funds.
8. Plus a variable bond authorization.
9. Began developing an inventory of sites in 1981.
10. Plus variable funds from penalties, interest, and appropriations.
11. Includes some employees spending only part of their time on Superfund.
12. Most work on Federal CERCLA matters; 4 work on State superfund issues.
13. 30 permanent, 9 temporary. Includes staff in the Leaking Underground Storage Tank Section.
14. ELI information, 8/3/89.
15. Matching funds for Federal superfund sites were authorized in 1981.
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Colorado The State has considerable experience with natural resource damage
claims. The non-NPL cleanup program is extremely limited and funding is primarily
available for the State's cost share at NPL sites.
Illinois The State has an innovative community relations program and an active
voluntary cleanup program. For such a large state, it has relatively few NPL or State
priority list sites in comparison to the large number of Illinois sites in CERCLIS.
Minnesota The State utilizes the "team" approach for managing site cleanups. The
program has a major effort focused on hazardous waste cleanups at municipal landfills. The
State has history of successful negotiations with RPs to conduct cleanups at non-NPL sites.
New Hampshire The State provides an example of a small but active program,
emphasizing RP cleanups. The program has limited funds and is now grappling with long
term funding issues.
New Jersey The State has the largest and oldest State superfund program in the
United States, the first property transfer law and program, and strong enforcement author-
ities coupled with a large fund.
North Carolina The State has an extremely limited fund and relies heavily on RPs
to conduct cleanups at non-NPL sites. By statute, RP liability on non-NPL sites is capped
at $3 million.
Oregon The State has an innovative voluntary PA program and a unique approach
for managing site cleanups. The program has a new bond fund for financing State-lead
cleanups.
Pennsylvania The State has a new program, bolstered by a large annual fund and
authorization to put together one of the largest staffs for a State program.
Texas The State is the largest generator of hazardous waste in the United States,
but has a small program in comparison to States of comparable population.
II. STATE ANALYSIS AND REPORTS
For each state, ELI already had compiled background information for the 50-State
Study. We contacted states and requested updated or additional information on sites,
regulations, policies, and guidances. States provided fact sheets, copies of statutes,
documents such as annual reports, and analyses and program reviews.
-------
We made arrangements with each state to visit their program offices and conduct
interviews with the program managers and legal staff. Interviews focused on corroborating
and updating information on the state program, and on clarifying and refining our under-
standing of program goals, organization, staffing, and funding as well as individual
elements of the cleanup process. The interviews required approximately two days to
complete and were conducted by a senior ELI staff person and an additional staff person.
The interviews were completed over a three-month period from early June through August
The state reports are organized in a common framework with an introduction,
discussion of statutes, program organization, funding, and the cleanup process, a separate
section (if appropriate) on unique programs, and a concluding section. An overview of
each program was also prepared.
Preparation of the state reports required some follow-up conversations with staff to
clarify interview notes. The draft reports were reviewed and revised to reflect comments by
the EPA project officer and staff in the State and Local Coordination Branch in EPA's
Office of Solid Waste and Emergency Response. The revised drafts were then sent to state
contacts and EPA regional contacts in Regions VI and Vin for additional review. The final
version of each state report reflects comments made by the states.
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STATE REPORTS
Page
Colorado 9
Illinois 25
Minnesota 53
New Hampshire 99
New Jersey 127
North Carolina 151
Oregon 169
Pennsylvania 193
Texas 219
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COLORADO
OVERVIEW
Colorado has no State supcrfund program for non-NPL sites. Its Hazardous Substances Response
Fund, with a balance of approximately $5 million, is authorized to be used primarily for providing matching
funds for remediation at NPL sites, although 5% of the Fund may be used for administrative expenses. Even
for these obligations the Fund is likely to experience a shortfall of $4 to $5.5 million by 1995. Staffing and
administration are entirely funded by Federal grants and by the 5% of the Fund. No appropriated revenues are
available. The Fund's income comes primarily from solid waste fees, which are scheduled to end in 1995.
Colorado has approximately 400 CERCLIS sites and had 16 NPL sites as of December, 1989.
Enforcement Colorado laws provide no clear enforcement authority against RPs who are not the
owners or operators of sites. Colorado relies on RCRA-type authorities, other environmental laws, imminent
danger orders, and nuisance law. For seven major sites, however, Colorado has used the Federal response cost
and natural resource damages lawsuit authority provided in CERCLA to take enforcement action.
Natural Resource Damages Colorado is unique in its approach to litigating natural resource damages
(NRD) cases. The State asserts trusteeship of the "public" component of every natural resource in the State,
whether publicly or privately owned, and asserts claims for past, interim, and future damages to natural
resources. In addition, the State seeks past and future response costs. The State has spent approximately $13
million litigating the seven cases, three of which have settled. The State has recovered $14.5 million thus far,
plus agreements in three of the cases to conduct remediation valued at $100 million. The funds collected have
been allocated to past and future response costs, as well as natural resource damages. Natural resource
damage recoveries have been $3.7 million to date. The State will not accept less than 100% of response costs,
and all settlements have been on this basis. As more cases are settled, it is anticipated that the State will
achieve a greater return.
Emergency Response. Emergency response to releases of hazardous substances is primarily a local
responsibility in Colorado. The State has a very limited emergency response program, relying principally on
EPA. State emergency response is provided by the Highway Patrol, with technical assistance provided by the
Department of Health.
I. INTRODUCTION-SITES AND
PROGRAM HISTORY
Colorado has 16 sites on the National Priorities List-15 final and 1 proposed. In
addition, it has other sites with serious contamination problems that, because of Colorado's
scattered population, have not ranked high enough to be placed on the NPL. Colorado has
approximately 400 sites on CERCLIS, most of which have had preliminary assessments;
Colorado states that approximately 85% of these will require no further action. Colorado
does not have an active site discovery program, so there may be additional sites unknown
to the state. Most of the sites in Colorado that will require action are either mining or mill
sites, Federal defense facilities, or industrial landfills. A significant number of the sites are
9
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hazardous due to radioactive waste as well as chemical hazards. Most of the sites are large
in area. Most also have a limited number of responsible parties (although the mine sites
may have a significant number of small mining claim holders in addition to major mining
companies). While cleanup of sites-particularly the defense facilities and landfills-is
generally supported by the public, support for the cleanup of some mining sites is less
strong.
The Colorado State superfund program essentially began in 1985, although some
activities occurred earlier. Specifically, in 1983 Colorado's governor, by executive order,
authorized the Attorney General to file suits under CERCLA on behalf of the state to
recover natural resource damages; seven suits were filed against responsible parties
(including the United States government) just before the then applicable statute of limita-
tions ran out.1 The Colorado legislature appropriated no money to support the litigation of
these suits until 1985.
In 1985, the legislature also enacted legislation establishing the Hazardous Sub-
stances Response Fund. The Fund was established to provide a source of monies for the
State match requirements for Federal Fund-lead NPL sites. Responsibility for overseeing
State interests in NPL sites was assumed by several divisions of the Colorado Department
of Health (CDH), in consultation with the Department of Natural Resources. In 1987, these
responsibilities were unified in the Remedial Programs Section of the CDH's Hazardous
Materials and Waste Management Division. Apart from the seven natural resources
damages (NRD) cases, which are managed by the Attorney General, and the 16 NPL sites,
which are managed by the CDH, Colorado has no "State superfund program" dealing with
other sites.
H. STATUTE
Colorado's Hazardous Substances Response Fund is authorized under Colorado Rev.
Stat. 25-16-101 et seg^ The Fund may be expended primarily for state matching funds on
1. 42 U.S.C. 9612(d) as enacted in 1980 prescribed a three year statute of limitations
running from December 11, 1980. In 1986, the statute was amended. Section 9613(g) now
prescribes a three-year statute of limitations for natural resource damages cases running
from the later of (a) the discovery of the loss, or (b) the date on which natural resources
damages regulations were promulgated.
10
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Federal NPL sites; however, up to 5% of the balance may be used in any year for CDH
administrative expenses. Colorado has no "superfund" enforcement authorities in its laws.
Under State law, it has:
• administrative order authority under its RCRA-type hazardous waste
law,
• administrative order authority for emergencies involving imminent and
substantial threats to public health and safety or the environment,
• administrative order and injunctive authority to abate discharges of
"pollutants" which constitute a "clear, present, and immediate" danger
to the public.
• administrative order and injunctive authority under its water quality
law to require cleanup of "any material" that was "accidentally or
purposely dumped, spilled, or otherwise deposited in or near state
waters which may pollute them," and
• injunctive authority for abatement of a "public nuisance."2
These orders and remedies do not readily apply to cases where the state may need to
obtain relief from a potentially responsible party other than the current owner or operator
of a site (e.g. generators and transporters), and Colorado has not used these State law
authorities to reach such non-owner/operator PRPs.
In the absence of a State superfund enforcement statute, Colorado has used the
Federal authorities provided in CERCLA for enforcement at seven sites. Its use of the
CERCLA natural resource damages provision, and its development of an expanded range of
remedies-including injunctive authority-against RPs under that provision, is unique among
the States.
ffl. ORGANIZATION
The Hazardous Materials and Waste Management Division of the CDH has primary
responsibility for hazardous sites. The Division has three sections:
• Hazardous Waste Control Section--which deals with implementation of
the state's RCRA program;
2. Colorado Rev. Stat. 25-15-308(2); 25-15-301(4); 25-15-210; 25-8-307; 25-8-606; 16-
13-308; 16-309.
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• Remedial Programs Section-which deals with NPL sites and NRD
sites (5 of the 7 NRD sites are also on the NPL) and with uranium
mill tailing sites; and
• Solid Waste and Incident Management Section-which deals with solid
waste, underground storage tanks, PA/SIs, and emergency response
coordination. See Figure CO-1.
The entire division has fewer than 75 employees, most of whom are not involved with
superfund issues. The bulk of the superfund work occurs in the Remedial Programs
Section.
FIGURE CO-1
Hazardous Waste
Control Section
COLORADO DEPARTMENT OF HEALTH
HAZARDOUS MATERIALS & WASTE
MANAGEMENT DIVISION
Remedial Programs
Section
Superfund &
Natural Resource
Damage Sites
Uranium Mill
Tailings Remedial
Action
Administrative Unit
PA/SI
Solid Waste
and Incident
Management
The Remedial Programs Section has a section chief, a superfund program supervisor,
and nine (9) remedial project managers (RPMs) responsible for work on NPL and NRD
sites. The RPM for the Rocky Mountain Arsenal site is assisted by two additional technical
12
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staff. The nine RPMs oversee 16 sites.3 Two additional RPMs in the Radiation Control
Division are responsible for two NPL-NRD sites (Uravan and Cotter) that were being
handled by that Division at the time the Remedial Programs Section was organized. These
RPMs are funded through settlements with RPs that provided for future response costs. The
Colorado superfund staff has experienced little turnover.
The Hazardous Waste Control Section has 24 staff to implement Colorado's RCRA
program. Three to four staff spend the bulk of their time on the Rocky Flats nuclear
weapons facility. This section also oversees the Martin Marietta site, which was previously
proposed for the NPL. Each of these cases is regarded by Colorado as primarily a RCRA
matter. Any non-NPL, non-NRD hazardous waste sites also are regulated by this section.
In the Solid Waste Section, there is 1/2 FTE working on PA/SIs, with another 1/2
being added in 1989. The staffing of the PA/SI program does not enable Colorado to
evaluate a significant number of sites each year.
In the Colorado program, the Attorney General's office does more than simply pro-
vide legal support. The AG is the lead agency for the seven NRD cases. For technical
expertise, in addition to CDH staff, it may hire outside experts. The Attorney General's
CERCLA Litigation Section was organized in 1985 to handle the NRD cases. Its size has
fluctuated, but it currently has ten (10) lawyers and an undisclosed number of support staff
and contractor staff. The lawyers are all experienced litigators, many of whom were hired
from private practice.
The Attorney General also has a Natural Resources Section, which handles enforce-
ment litigation and other legal matters for the CDH and the Colorado Department of
Natural Resources. The regulatory agencies' budgets fund the attorneys. Currently four
attorneys work on RCRA, solid waste, and Federal superfund site matters-one FTE on
superfund.
3. The Uranium Mill Tailings (UMTRAP) program within the Section has 13 staff
working on 7 tailings sites and associated properties.
13
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IV. FUNDING
Staff Funding
In general, the Colorado legislature has not supported the expenditure of general
revenues to carry out regulatory programs. As a result, most administrative funding must
come from a combination of fees (all of which have "sunset" provisions) and Federal grant
monies.
The superfund program of the Remedial Program Section is entirely dependent upon
EPA grants: one CORE grant, one multisite cooperative agreement, two site-specific
cooperative agreements, and one PA/SI cooperative agreement. The only non-EPA funds
come from a portion of the 5% of the Hazardous Substances Response Fund that may be
expended for administrative purposes, and some monies received through the AG's
CERCLA Litigation Section for support of litigation or oversight at NRD sites.
The Hazardous Waste Control Section receives the majority of its funds under
EPA's RCRA grants, but also receives some funding from permit and operating fees on
hazardous waste facilities.
The lack of generally appropriated funds to support a State superfund program is
problematic for the program's future, particularly given the absence of fee support for staff
and operations.
Natural Resource Damages Case Funding
Despite its normal reluctance to appropriate general funds for regulatory purposes, in
1985 the legislature appropriated $5.3 million to fund the Attorney General's prosecution of
the seven NRD suits that had been filed in December 1983. The legislature specified that it
expected full recovery of all of these costs, plus the natural resource damages. Successive
appropriations have been made for the litigation.
14
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TABLE CO-1
Expenditures to Date
(7 sites)
FY 1985 & 1986 $6.26 million
1987 3.67 million
1988 1.18 million
1989 1.68 million
$12.76 million
Recoveries to Date
(settlements on 3 sites; partial
settlements on 3 sites)
$14.51 million
The NRD cases have been a financial and remedial success thus far. Since 1985,
three cases have settled for cost recoveries and natural resource damages. In addition to
the payment of response costs and natural resource damages, the RPs have agreed to
perform the required remedial action. Cost recovery has been agreed to in a fourth case,
but natural resource damages are still pending. Partial reimbursements of response costs
have been received on two other sites. The litigation has recovered $3.7 million in natural
resource damages. The total recoveries by the CERCLA Litigation Section compensate the
State for pre-litigation and post-litigation expenses. Because recoveries through FY 1989
have exceeded the total amount expended for litigation on all seven sites, the cases have
produced a positive rate of return for the State. The remaining sites-which account for a
significant portion of the costs-will generate additional recoveries in the future. Colorado
has refused to accept settlements of less than 100% of response costs (including litigation
costs), and has received this in all settlements.
Recoveries that reimburse past response costs are returned to the general treasury.
Recoveries that will pay for future response costs-i.e. for site oversight-are deposited in
the Hazardous Substances Response Fund but earmarked for use on the specific site.
Recoveries for natural resources damages are deposited in the CERCLA Recovery Fund.4
4. Colo. Rev. Stat. 25-16-201.
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CERCLA Recovery Fund monies are also returned to the general treasury, but under
Colorado law may be appropriated for any lawful purpose, including the maintenance of
the litigation. Some such appropriations have been made. Thus, the CERCLA Recovery
Fund has served as merely a transfer vehicle to return funds to the general treasury.
Although this Fund "sunsets" on January 1, 1990, this should have no effect, since in the
absence of any other provision, recovered funds revert to the treasury. Following the
decision of the U.S. Court of Appeals for the District of Columbia circuit in 1989 on
natural resource damages regulations, however, Colorado has begun to consider having
CERCLA Recovery Fund monies held by a trustee.
Hazardous Substances Response Fund
The Hazardous Substances Response Fund is the State's "superfund". It consists of
fees collected on solid waste disposal, plus interest on the Fund balance. (By law, the Fund
may also receive appropriations, cost recoveries that do not represent natural resource
damages, and monies from other sources.) The State has used the Fund as the repository
for "future" response costs received in settlements of NRD cases. These funds are
earmarked for the particular sites to which they apply. The solid waste fees are collected
by the operator of the disposal facility and are $0.05 per load of solid waste transported by
automobile, $0.10 per load transported by non-commercial truck, and $0.15 per cubic yard
transported by commercial vehicle.5 5% of the fee collected is credited to the operator to
offset costs of collection. Fees are remitted to the Fund quarterly. The fees generate
revenue of approximately $1.35 million per year. The fees were scheduled to "sunset" in
1990, but were legislatively extended until January 1, 1995. The Fund balance at June 30,
1989 stood at approximately $5 million.
The law authorizes expenditures of up to 5% of the Fund balance to support admin-
istration of the program. Otherwise, the Fund is used to provide required state matching
funds on federal NPL sites. Only limited expenditures have been made from the Fund since
it was established in 1985, and the CDH is seeking to defer expenditures as long as
possible in order to maximize the interest income. In FY 1989, interest accounted for 26%
of the income to the Fund.
5. Colo. Rev. Stat. 25-16-104.5.
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The CDH has attempted to project the ability of the Fund to meet potential
CERCLA match obligations. Assuming continued receipt of $1.35 million for the next
three years (with a 2% decline thereafter due to solid waste minimization efforts), and
spreading out payment from the Fund to maximize receipt of interest (at 7% per annum),
the CDH projects a shortfall in the Fund's ability to meet all obligations. Fund obligations
have been made on three sites to date. Additional obligations may be required on these and
other sites. Projections are enforcement-confidential. In addition, operation and
maintenance costs may be significant (i.e. up to 25% of match costs on some sites). A
middle-ground estimate of State match requirements (not assuming worst-case) is that the
Fund may experience a shortfall of between $4 million and $5.5 million by the scheduled
"sunset" of the fees.
Critical to the Fund's ability to limit the shortfall to even this amount is whether
matching payments can be deferred as long as possible in order to maximize interest
income—vjz. to defer matching payouts until the mid 1990s. If payouts must occur earlier,
the shortfall could be significantly greater.
There are several other measures that, if adopted by the legislature, could positively
affect the Fund. These could include extension of the solid waste fee after January 1, 1995,
the elimination of an existing credit enjoyed by several landfills (approximately $0.5
million per year), an increase in the fee, or the authorization of additional sources of
revenue. Interestingly, the obvious administrative strategy of maximizing interest income by
deferring payouts could operate against the likelihood of a legislative solution in two ways:
(1) it may be difficult to obtain additional revenues when the Fund balance is high, and (2)
if deferral of the payments has resulted in EPA picking up the costs up front, there may be
little incentive for the legislature to act. On the other hand, if payouts are not deferred, the
actual shortfall will be significantly greater. It will also be encountered earlier and may
result in the search for revenues essentially becoming a referendum on the program. It is
unclear whether the legislature will have any interest in finding new sources of revenue
given ambivalence in the State about cleanups of mine sites-some of the NPL sites at
issue.
For the same reasons that the Fund is likely to be inadequate to sustain State
matching fund obligations, it cannot clean up non-NPL sites. Only a substantial new
source of revenues could give Colorado a State "superfund" program.
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V. REMEDIATION PROCESS
The Colorado program focuses almost entirely on NPL sites. There are 15 NPL sites
and 1 proposed NPL site in Colorado. Five of the NPL sites-Rocky Mountain Arsenal,
Yak Tunnel, Uravan, Lincoln Park (Cotter), and Eagle-are also NRD cases being handled
by the CERCLA Litigation Section with support from the CDH. Two other NRD sites-
Idarado and ASARCO/Globeville-are not on the NPL. Colorado is handling the Rocky
Flats weapons facility (NPL) and the Martin Marietta site (deleted from the NPL) under its
state RCRA-type authorities. The CDH is doing State-lead work on the Denver Radium and
Clear Creek NPL sites.
Natural Resource Damages Cases
The NRD cases were approached by the Attorney General as litigation matters. The
claims in the case were amended so that the State was seeking not only money damages
for damage to wildlife, water, etc., but also repayment of all response costs, and
prospective injunctive relief—that is, court-ordered remedial action. Each of these
categories-natural resource damages, response costs, and remediation—was defined as
broadly as possible by the state in order to maximize recovery and to maximize settlement
pressures on the RPs.
The State has taken the position that natural resource damages are not simply
limited to losses in value (or even replacement costs) for traditional resources such as
wildlife and waters generally thought to be within the trusteeship of the state. Instead,
Colorado asserted trusteeship of the "public" component of every natural resource within
the state, whether publicly or privately owned. It asserted claims for the "public" value of
air, water, groundwater, plants, trees, fish and wildlife, land surface, minerals, etc. It then
asserted claims for past damages to these resources (i.e. the loss of these values for x years
in the past, which cannot be mitigated); for interim damages (the loss during the period
between the claim and full remediation); and future damages (the loss after remediation for
the inability of remediation to restore the resource to its pristine, unaffected condition). In
assessing these damages to all resources in all times, the State claimed not only market
damages but also:
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• use value (the loss of use),
• existence value (the value people place simply on the
resource's existence—i.e. a trout stream or aesthetic area
perhaps never used by a person but which that person would
pay simply to preserve),
• bequest value (the value of passing on natural resources to
one's children and grandchildren), and
• option value (the value of having the option to use a given
resource).
The State commissioned sophisticated economic studies and survey instruments, and
developed a substantial quantity of evidentiary material for use in litigating these damages.
The State took a similar approach to the litigation of response costs. The Attorney
General defined response costs for purpose of the claims as not only the costs of litigating
the NRD cases, and on-site activities related to site remediation and case preparation, but
also many non-reimbursed regulatory actions related to the hazardous substance in the
history of the site (dating back 10 or more years). In addition, future response costs were
claimed for the costs of oversight of remediation.
Finally, by seeking injunctive relief, Colorado expanded the value of natural
resource damage cases by including injunctive actions, relying on section 121(e)(2) of
SARA. Colorado's position was upheld by a trial court, but reversed on appeal in 1990.6
Colorado has obtained settlements at the Uravan, Cotter, and Eagle sites for 100%
of response costs, plus $3.7 million in natural resource damages, and remedial action. The
consent decrees are detailed, consistent with the NCP, and contain stipulated penalties and
dispute resolution provisions. The dispute resolution provisions provide for mediation; if
mediation is unsuccessful, an arbitrator will determine the facts, and the final decision will
be by the Federal district judge based on the facts found by the arbitrator. The defendant
pays all costs associated with a dispute, unless the State's position is ultimately found to be
"unreasonable." (Thus the State could lose a dispute on the merits, but still have all of its
costs paid). The settlements all provide for a set-aside of future response costs paid by the
defendants to cover oversight and other activities by the State.
6. Colorado v. Idarado Mining Co., Civ. No. 83-D-2385 (D. Colo. Feb. 22, 1989),
reversed (10th Cir. October 11, 1990).
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Colorado is still litigating the other cases, although it has accepted an offer of judg-
ment from the United States and Shell Oil Co. in the Rocky Mountain Arsenal case for $2
million to cover past response costs. The trial on the remedy phase of the Idarado case has
been completed. The judge upheld, in most particulars, the $40 million remedy arrived at
in the State ROD. (The State performed the Rl/FS). At ASARCO/Globeville the RP has
completed the RI, and is about to commence work on the FS. At the Yak Tunnel site, the
State filed suit and a settlement decree covering the class of small mining claimholders for
site access. The State did the RI/FS and was ready to issue an ROD; EPA also wished to
issue its own ROD. The EPA's interest coupled with the reaction by the mining claim
holders and others to the State suit for access resulted in the State turning the site over to
EPA for administration. EPA reimbursed the State's investigation costs.
Other Cases
Colorado has handled a few cases that were not NRD suits. At the Martin Marietta
site, Colorado used its RCRA authorities to enter into a consent decree with the operator in
1986. (EPA issued RCRA 3008(h) and CERCLA 106 orders to the operator for other parts
of the site. Part of the site was proposed for the NPL but the proposal has been
withdrawn). At Rocky Flats, Colorado and EPA entered into a joint agreement with the
Department of Energy in 1986; there are over 100 operable units and over 100 corrective
action areas on the site. The agreement provided schedules for permit applications and for
RI/FSs. Activities are ongoing at the site, although it seems clear that RCRA violations are
also ongoing. (Part of the site is proposed for the NPL). In February 1989, Colorado and
EPA entered into consent orders with Conoco for the Total Petroleum site. Colorado used
its emergency order authority and EPA its RCRA 3008(h) authority. All three of these sites
involved ongoing RCRA facilities.
A Colorado enforcement case a little more akin to superfund actions was the Syntex
facility. This was a disposal area for pharmaceutical wastes that was closed in 1976.
Colorado demanded that the successor company of the owner clean up the site, which was
leaking hazardous material from unlined trenches toward a public water supply. The CDH
used its RCRA authorities (on the theory that the present leaking is unlawful disposal),
common law and statutory nuisance authorities, and water quality laws. The responsible
party entered into an interim and final consent order for site evaluation and implementation
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of a remedial action; the order provided for stipulated penalties for violation of its
provisions, cost recovery of $30,000 for oversight of the evaluation and design phase, and
additional cost recovery to fund prospectively a full-time on-site coordinator for the
remedial action and oversight by the CDH. This agreement is the nearest thing to a "State
superfund" enforcement case that the CDH has maintained under State authorities. It was
possible chiefly because Syntex still owned the property and had been responsible for the
operations when the waste was disposed of. It is not clear that Colorado has any legal
enforcement authority that could reach a party who was merely a generator at a site that is
now inactive and in need of remedial action.
Colorado has not identified other sites where such "State superfund" authority is
needed. The site identification process has not been a priority in Colorado, however. The
most likely potential sites not on the NPL may include mine sites, which escape Colorado's
RCRA authority under the Bevill amendment. Because there is no strong support for
cleanup of mine sites in any event, and no other well-known sites that are clearly escaping
necessary enforcement, there is probably little present incentive for the Colorado legislature
to enact State superfund enforcement authorities.
Cleanup Standards
Colorado has developed site-specific lists of cleanup standards for those NRD sites
where remedies have been developed. Because most of these are also NPL sites, the
standards have had to be consistent with those of CERCLA.
Public Participation
The Hazardous Materials and Waste Management Division hired its first community
relations specialist in February 1989. Prior to that time, Colorado did hold some meetings
related to sites and remedies. On the NRD sites, the public was involved with the major
components of remedial decisions. On the remaining NPL sites, Colorado let EPA conduct
the community relations and public participation requirements. Now Colorado is attempting
to involve the public on a more extensive basis at a few sites-e.g. Clear Creek. The idea
is to have regular bi-monthly meetings to keep the public apprised of activities and
decisions. This program is in its early stages of development.
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Property Transfer
Colorado has no formal process for review or approval of property transfers (as in
New Jersey, for example). Increasing awareness by the financial community of possible
environmental liabilities, however, has led to frequent requests to the CDH for record
checks on facilities being sold or financed. While the CDH has no formal process or
budget to handle these requests, this responsibility has been assigned to the individual
responsible for PA/SIs (and for solid waste matters). It involves a simple record check, but
no other actions; the CDH anticipates an ever-increasing demand for this service, but has
not planned for how this may be accommodated.
Emergency Response
Emergency response is a local responsibility in Colorado. By statute, primary
responders are city or county agencies, including police and fire departments. The State
program has been essentially unfunded. At one time the legislature created a $50,000 fund
administered by the Colorado Department of Local Affairs to be used to refund local
response costs, with cost recovery to replenish the fund. The entire balance was expended
within three months; there was no cost recovery. The fund has not been replenished by the
legislature.
There are three agencies at the State level with some responsibility for emergency
response. The Highway Patrol is the primary responder on State highways and in areas
outside major cities that have "hazmat" (hazardous materials incident) teams. In 1989 for
the first time the legislature appropriated funds to train 20 officers for hazmat duties with
the highway patrol. The CDH is primarily responsible for "technical assistance" to local
responders and to the Highway Patrol. The CDH also must be informed of all incidents. It
has no budget and no staff for these functions; the chief of the Solid Waste Section
handles emergency response in addition to regular duties. Six CDH staffers take turns
wearing a pager (for a week at a time) to receive notification of incidents. There is no
budget even for samples. However, the State laboratory does some analysis as needed off
budget. As of FY 1990, the legislature for the first time appropriated $17,000 to the CDH
to be used for emergency response activities. The Department of Public Safety, Division of
Disaster and Emergency Services (DODES) is responsible for coordination and planning for
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major disasters; its staff may also serve on-scene roles at major natural or human-caused
disasters.
Each year, the State gets approximately 1100 emergency response calls. About 60%
of these are truck spills, and most cleanups are handled by the companies involved. State
officials actually deal with only about 50 incidents per year. No Colorado agency at the
State level has the ability to follow an emergency response with a full-scale environmental
cleanup; and most immediate responses (except in the cities) must be improvised.
Accordingly, Colorado relies heavily on EPA for on-scene coordination and emergency
response. EPA does all time-critical removals of hazardous substances.
VI. PROGRAM OUTLOOK
The Colorado program will need to find additional funding in order to meet its
projected CERCLA match requirements. In addition, it must stretch out its payments to
EPA in order to maximize the receipt of interest income to the Fund. Additional funding
will also be necessary if Colorado decides in the future to provide funding for cleanup of
non-NPL sites. The latter is not currently under consideration by the State.
Colorado's NRD suits have been successful, and illustrate what can be done with
CERCLA authorities and an aggressive litigating posture, even absent strong State
enforcement tools. The remaining NRD cases will wind down over the next several years.
It is uncertain whether Colorado will file NRD suits dealing with other sites.
Site discovery efforts are not a priority for the State at present Investment of
resources in site discovery may, however, reveal that Colorado has more sites to deal with
than those currently known.
A State superfund enforcement law would facilitate cleanup of newly discovered
sites and non-NPL sites. Current Colorado enforcement authorities do not clearly provide a
means for the CDH to compel a non-owner/operator to conduct cleanup of a site where
hazardous substances had been previously, and lawfully, disposed of. Colorado does not
have a'specific State superfund order or injunction authority. However, the State has made
creative use of such authorities under other laws. The lack of a "superfund"-type authority
may be of potential significance in the future if Colorado evaluates solid waste landfills
and other previous disposal sites for possible cleanup.
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ILLINOIS
OVERVIEW
Illinois has 1245 CERCLIS sites, 95% of which have undergone preliminary assessment, and 65% of
which have undergone site investigation. Approximately 300 of the CERCLIS sites are expected to require no
further action. The Illinois Environmental Protection Agency (IEPA) is primarily concerned about the State's
38 National Priorities List (NPL) sites and the 29 sites listed on the State Remedial Action Priorities List
(SRAPL).
Enforcement While the Agency is confident of its resources and expertise—it has the lead role on
17 of the 39 NPL sites, three of which include RD/RA-it prefers to draw in responsible parties for site work.
Lacking administrative order authority, IEPA relies on the strength of its notification procedure, which alone
imperils RPs with penalties and treble damages in the event of their noncompliance. In addition, joint and
several liability is the working principle in the State; though such liability is not specified by statute, it has
not been challenged. Together, notification, the liability standard, and the existence of reliable funding have
been the cornerstones of the IEPA enforcement strategy.
At present, the Agency is monitoring 127 voluntary actions, 79 of which are cleanups. The
Voluntary Cleanup Program, which is part of the Remedial Project Management Section (RPMS) in IEPA, is
the fastest growing portion of RPMS: Between August 1987 and August 1988, the number of such cleanups
increased by 35% in Illinois. This growth may in part be ascribed to ffiPA's willingness to enforce site
action; to date, the State is involved in over 20 cost recovery cases, including six for treble damages.
Program Organization The 40-member RPMS staff receives legal support from the Division of
Enforcement Services and the Illinois State Attorney General's Office. Team organization is a priority in the
RPMS; each new site is assigned a project manager, an IEPA attorney, and a lexicologist to ensure the
immediate coordination of management, legal, and technical personnel.
Community Relations The IEPA Community Relations staff is used extensively by RPMS. Inter-
acting regularly with project managers, community relations staffers concentrate on answering public inquiries
about site status and actions. In addition to holding public meetings, the community relations staff distributes
fact sheets on site status, the remedial techniques chosen for a given site, and the hazards associated with 50
common site contaminants.
I. INTRODUCTION
The Illinois Hazardous Waste Cleanup Program began in 1984 under the authority
of the Illinois Environmental Protection Act (ffiPAct, or the Act). Since that time,
responsible parties (RPs) have initiated action on 127 sites, including 74 cleanups, all of
which are being overseen by the IEPA Voluntary Cleanup Program.
In addition to taking the lead on or monitoring the 38 National Priorities List (NPL)
sites in the State (26 final, 12 proposed), the Illinois Environmental Protection Agency
(IEPA, or the Agency) is working on State sites listed on the State Remedial Action
Priorities List (SRAPL). Twenty-six of the 29 sites on this list are considered active, and
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the other three sites are considered remediated. Eight more sites will be added to the
SRAPL in March 1990. Of the NPL sites, IEPA has the lead on about 17 sites, including
three RD/RAs.
At present, the State is pursuing treble damages in at least six cases, which are part
of over 20 cost recovery efforts. According to the IEPA, a major strength of the program
rests in the assumption of joint and several liability; though the lEPAct does not specify
such liability, IEPA assumes the Act provides it, because it was modeled on the federal
Superfund statute.
Statistics
The federal CERCLIS list for Illinois contains approximately 1245 sites. Federal
facilities account for three NPL sites in the State, and the SRAPL contains one Federal site
as well (St. Louis Army Supply Center, listed July 1985). Roughly 1150 sites, about 95%,
have received preliminary assessments (PAs), and nearly 65% of the total have undergone
site investigations (Sis). Approximately 300, or about 25%, of the CERCLIS sites have
been listed as requiring no further action. IEPA expects a major increase in CERCLIS
listed sites when the State's Responsible Party Transfer Act becomes effective November 1,
1989. Figure IL-1 shows the number of cleanup projects between 1985 and 1989; the
number of cleanups completed is shown in Figure IL-2.
The SRAPL uses the federal Hazard Ranking System (HRS) scoring under the 1982
National Oil and Hazardous Substances Pollution Contingency Plan (NCP). Any site
scoring 10 or above is eligible to be placed on the SRAPL if it is not listed on the NPL,
but the State does not categorize sites as final or proposed like the NPL. In fact, in
approaching federal sites, the State does not discriminate between proposed and final NPL
sites, treating all sites scoring 28.5 or higher as sufficient threats for remediation. As a
result, IEPA has the lead on about 17 NPL sites, while the federal Environmental
Protection Agency (EPA) is overseeing about 18 NPL sites in the State.
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85
FIGURE IL-1
Cleanup Projects
86
87
Fiscal Year
FIGURE IL-2
Cleanups Completed
88
86
87
Fiscal Year
88
Privately Funded Y/A State Funded
27
89
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Program Goals
The goals of the Division of Land Pollution Control (LPC), which is directly
responsible for the State's Hazardous Waste Cleanup Program, are varied; they include
timely action, cost-effective but permanent remedies, and regular RP participation. These
goals merge in the Division's desire to extend the value of the money and resources
available to it. Using the various State funds to motivate RPs to conduct cleanup is a key
objective in that effort.
LPC officials believe their currently large funding sources are a critical means of
motivating RP action, but they worry that State funding may dwindle in the next few years
as the expected revenues from the Build Illinois bond program—a major funding source-
diminish; the revenues for the debt service of these bonds, a State sales tax on used cars,
have not been as substantial as expected. Appropriations will have to cover the difference
if the program continues at its current level.
Another major goal of the LPC is to strengthen its relationship with the federal
Superfund program. To that end, the State expects to complete its first Superfund
Memorandum of Agreement (SMOA) with Region V in early 1990. The major themes of
the SMOA are coordination, communication, and information sharing. According to the
State, a key point to be covered by the SMOA will involve the timely review of site plans
and activities, an issue that has frustrated LPC officials working with EPA Region V.
IEPA hopes to receive more federal monies, among them CORE grants for
administrative activity, because the LPC is currently working at what it perceives to be full
capacity. If State funds diminish, IEPA hopes to secure more federal resources to conduct
cleanup actions, though its higher priority is to induce RPs to conduct such work.
Site Scoring/Activity
Sites are first reviewed by the Pre-Remedial Program in the RPMS State Sites Unit.
Consisting of seven staff positions, the Pre-Remedial Program uses federal Management
Assistance (MA) monies to conduct PA/SI work.
The Pre-Remedial Program has presided over the PAs performed at roughly 95% of
the State sites listed in CERCLIS. The program also reviews CERCLIS sites listed by the
federal EPA as "no further response action planned" (NFRAP) to ensure that this
designation is warranted according to its own standards. For fiscal year (FY) 1989, this
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program expects to conduct 80 PAs and two dozen Sis with a budget in the range of
$750,000-1,000,000. The Pre-Remedial Program has worked with a similar budget for the
last two fiscal years.
As noted, IEPA uses the HRS to score State sites. Any site scoring 10 or above
and not currently listed on the NPL is eligible to be placed on the SRAPL. To date, three
of the 29 sites on the SRAPL have been remediated, and IEPA proposes to fund the
cleanup of 14 more. There is no official SRAPL delisting process; sites are merely
considered remediated. According to IEPA projections, the SRAPL will probably increase
to 50 sites by 1993.
A listing on the SRAPL is only one measure used to define cleanup priorities. In
fact, some of the worst sites (according to the RPMS staff and managers) in the State
would have scored only in the range of three or four, but IEPA acted on them because of
their imminent threats. For example, a 140-acre site near Calumet Lake south of Chicago
contaminated with lead, arsenic, and other contaminants received a low score because the
threat of direct human contact is not a factor in the HRS. IEPA considered the site a
threat, because two schools and 5000 people were in the vicinity. Though the site scored
too low for federal involvement, IEPA is currently considering incineration there.
H. STATUTES AND STATUTORY PROVISIONS
IEPA draws its authority from the Illinois Environmental Protection Act (lEPAct or
the Act), 111. Rev. Stat. ch. Ill 1/2, sec. 1001-1054 (1989)1, a comprehensive organic
statute covering all environmental programs. Originally effective My 1, 1970, the Act has
since been regularly amended to provide the program greater authority to remediate
abandoned hazardous waste sites.
Illinois Environmental Protection Act
The lEPAct gives the Agency authority to investigate, secure, remediate, and compel
the remediation of hazardous waste sites in the State. Section 22.2 (f) of the Act
establishes strict liability for owners and operators of facilities from which there is a
1. References to the Act in the text refer to section numbers as they are found in the
Act itself. Thus, section numbers in the text will range from 1-52, not 1001-1052.
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release; persons who owned or operated the facility at the time that hazardous substances
were received for disposal, transport, storage or treatment; generators2; and all transporters
regardless of whether they selected the site. Liability covers the State's costs of removal
or remedial action as a result of a release or threat of a release. In addition to the
defenses allowed in CERCLA, the lEPAct excludes from the liability scheme releases
permitted under State or federal law and releases of pesticides in accordance with their
labeling or registration.
Section 4q authorizes IEPA to notify potentially liable persons of their liability, of
the necessary response action, and of their opportunity to perform the response action.
These "4q notices," which is the name given them by State officials, are not enforceable as
orders, but they are the trigger mechanism for possible treble damage suits if the RPs fail,
without sufficient cause, to take action. These "4q" notices are the primary statutory
enforcement tools used by the IEPA and are sent as a matter of practice in all cases.
Liable parties who fail without sufficient cause to take action as requested by the
Agency pursuant to a "4q" notice are subject to punitive damages no more or less than
three times the State's costs incurred as a result of the failure to take action. Such
punitive damages are in addition to the State's costs and any other penalties to which the
person may be subject The State is seeking such treble damages in addition to its
response costs in at least six of its 20 cost recovery cases. The Act provides for civil
penalties of up to $10,000/day for violations of the Act, but the cleanup program rarely
deals with situations that are clear violations of the Act. In addition, IEPA has used §4q
notices to seek information about sites and as a basis for negotiating consent orders with
RPs. As of April 1989, the State had issued 65 "4q" notices.
IEPA is authorized to take whatever action is necessary to prevent or correct
releases or threats of releases of hazardous substances or pesticides into the environment.
The Act provides that IEPA may not spend more than $1 million on any single incident
without appropriation by the legislature. Agency staff interpret this provision as a limit on
the amount that may be spent within a fiscal year.
2. Generators are broadly defined to include those who arrange with a third party to
transport, store, dispose of or treat, at a third party's facility from which there is a release,
hazardous substances owned, controlled or possessed by the first party HI Rev Stat ch
111 1/2, sec. 1022.2(f)3.
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The Illinois legislature recently authorized the ffiPA to attach to property subject to
response action under §22.2 of the Act (or to corrective action under §22.18) an
"environmental reclamation lien" for the costs and damages for which the property owner is
liable.3 Although the statute states that the environmental reclamation lien is a form of
"superlien" in that it takes precedence over all other liens except tax liens, a clause
excepting certain other liens makes it unclear what priority this lien enjoys.4 Amendments
to this section in 1989 attempt to clarify that this is a priority lien, not a superlien.
The IEPA has explicit authority to enter any property in order to respond to a
release or threat of a release of a hazardous substance or pesticide. The Act does not
provide explicit subpoena authority to the Agency.
The Attorney General or the local State's Attorney is authorized to seek injunctive
relief whenever there is substantial danger to the environment or to the public health or
welfare. Such actions may be filed at the request of the IEPA or based on the
independent judgment of the Attorney General or the State's Attorney.
The lEPAct created an independent Pollution Control Board (PCB) of seven
technically qualified members appointed by the Governor with no more than four from one
party. The PCB meets at least monthly and is charged with adopting regulations and
standards under the Act. It also acts as the hearing Board for administrative complaints
brought by IEPA charging violations of the Act and for petitions for review of final
actions by the Agency.
3. 111. Rev. Stat. ch. Ill 1/2 §1021.2(a). This section number is expected to change
since two bills were passed adding different sections 21.2.
4. 111. Rev. Stat. ch. Ill 1/2 §1021.2(c). This section provides in part: "An
environmental reclamation lien shall be superior to all other liens and encumbrances other
than real estate tax liens, except that it shall not be valid as to any subsequent bona fide
purchaser, mortgagee or other lienor whose rights in the real property arose prior to the
filirifT nf «/\ti/--<» nf thf liftn "
M. * Sft +-*
filing of notice of the Hen.
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Illinois Responsible Property Transfer Act
The Illinois Responsible Property Transfer Act of 1988 (Transfer Act or RPTA) will
broaden IEPA purview of properties being transferred as of November 1, 1989.5 Under the
existing lEPAct, no person in the State may transfer any land used as a hazardous waste
disposal site without notifying the Agency of such transfer. The Transfer Act, however, is
more sweeping in that it is designed "to ensure that parties involved in certain real estate
transactions are made aware of the existing environmental liabilities associated with
ownership of such properties, as well as the past use and environmental status of such
properties."
The RPTA contains a detailed disclosure form with a variety of questions about the
past and present uses of the property.6 The disclosure document must be given to the
buyer and any lender at least 30 days before the transfer of the property. If the disclosure
document indicates environmental defects in the property not previously known to the
parties, or if the required disclosure is not made, then any party may void the transfer
within 10 days of receipt of the disclosure document. Failure to comply with the
disclosure requirements may also result in civil penalties of $1000 per day for each
violation, and knowingly falsifying such disclosure increases the potential penalties to
$10,000 per day per violation.
Within 30 days of the transfer the disclosure document must also be recorded in the
recorder's office for the county in which the property is located and filed with the IEPA.
For certain transfers a site plan must also be filed with IEPA. The Transfer Act does not
specify what IEPA is to do with the disclosure documents that are filed with the Agency.
The Agency has been developing plans for what it will do with these documents, however,
no funds have been appropriated for IEPA activities under the RPTA.
5. The Transfer Act becomes effective on November 1, 1989, but the disclosure,
recording and filing requirements apply to transfers that occur after January 1, 1990 111
Rev. Stat. ch. Ill 1/2, §§904(a).
6. A copy of the disclosure form is attached as an appendix to this Chapter.
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IE. PROGRAM ORGANIZATION
Program Structure
Division of Land Pollution Control The IEPA Division of Land Pollution Control
(LPC) contains the Remedial Project Management Section (RPMS), which has the lead on
State superfund activities.7 LPC is divided into five sections: Field Operations (RCRA and
CERCLA work), Permits (RCRA), Compliance Monitoring (RCRA), Solid Waste
Management, and Remedial Project Management (see Figure IL-3). RPMS splits superfund
work into the Federal Sites, State Sites, and Immediate Removal Units. All together, LPC
employs 288 people: 170 serve technical roles, 32 managerial, and eight others form a
hydrogeological investigation team, which is available to the entire division and regularly
aids the efforts of the RPMS.
The Remedial Project Management Section employs 40 of the LPC technical
positions and six of the managers, giving it a total of 46 people. Since the RPMS was
created in 1984, there has been a turnover of only eight percent. In that period, the staff
has shifted from predominantly engineers to a more even mixture of engineers and other
professionals, including biologists, chemists, and environmental scientists.
To enhance communications internally, the RPMS avoids guidance documents for its
personnel, using US EPA guidance where necessary; a premium is placed on direct,
informal communication. Each new site is assigned a project manager, an attorney, and a
toxicologist to foster the immediate coordination of management, legal, and technical
personnel. These staff (except for the attorneys who are in a separate Division) also
typically have their offices near each other.
The State Sites Management Unit contains a Unit Manager, the Pre-Remedial
Program, and three SRAPL project managers. To date, the RPMS Pre-Remedial Program
has secured eight federal EPA multi-site cooperative agreements, each on the average of
roughly $400,000. The manager of the Pre-Remedial Program oversees three geologists,
two biologists, and one agriculturalist.
7. The other divisions in IEPA are Administration, Air Pollution Control, Information
Systems, Laboratories, Public Water Supplies, Water Pollution Control, and Enforcement
Services.
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ORGANIZATION CHART
ENVIRONMENTAL PROTECTION AGENCY
STATE OF ILLINOIS
JUNE, 1989
DIRECTOR
Bernard P. Killian
OJ
Division of
Administration
Jeff Johnston
Building & Grounds
Support Service
Word Processing
Procurement
Contracting
Reproduction
Mail/Supplies
Public Information
Cinda Schien
Labor/Employee Relations
Tom Neal (Acting)
EEO Coordinator/Workmen's
Comp/Employee Assistance
Shirley Crawford
Ecotoxicology
Janice Perino
Agricultural Advisor
A. G. Taylor
Deputy Director
Delbert Haschemeyer
Office of Government
and Community Affairs
Bernard Killian
Legislative Liaison
Bruce Rodman
Community Relations
Greg Michaud
Environmental Programs
Roger Kanerva
Chemical Safety
James O'Brien
Mine Waste Program
Ronald Barganz
J_
Division of Land
Pollution Control
Bill Child
Field Operations
Compliance
Monitoring
Ramedial
Project
Management
Solid Waste
Management
Division of Public
Water Supplies
Roger Selburg
Admin. Operations
Assurance
Field
Operations
Groundwater
Vehicle Emission
Test Program
Frank Sherman
Field Services
Compliance Assurance
Technical Services
JL
Division of Water
Pollution Control
Jim Park
field Operations
Granl Administration
Planning
Compliance
Assurance
Division of
Enforcement Services
Joseph Svoboda
Land Noise Pollution
Water Poflution
Public Water Supplies
Hearings
Mayweed Office
M
H
t-"
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The Federal Sites Unit contains eleven positions, which include the Unit Manager,
an Assistant Unit Manager, and nine project managers; the unit is seeking the creation of
additional project manager positions. This unit oversees federal Superfund work, including
State-lead work, develops the administrative record, writes the Record of Decision (ROD),
and oversees RP work whenever Illinois is given the lead on an NPL site. Thus far, the
Federal Sites Unit has conducted about 17 State-leads on NPL sites, and it has written a
half-dozen federal RODs. Moreover, the Unit has assumed responsibility for three federal
RD/RAs: Velsicol, Belvidere Municipal, and LaSalle Electric. The LaSalle Electric site is
a mobile incineration project which is nearing completion of its first ($15 million) phase.
The Phase II contract was recently awarded at an approximate cost of $20 million.
In 1984, the Immediate Removal Unit (IRU) employed only its chief. Now, the
IRU employs five project managers and the unit chief, all of whom are housed in the
IEPA Springfield office. Four additional on-scene coordinators (OSCs) are in separate
State offices-one each in Colinsville, Rockford, Maywood, and Springfield~and an
engineering firm provides three more OSCs by contract.
The Community Relations program lies under the Agency Director and is available
to the entire IEPA. It consists of one supervisor and a staff of eight. According to the
program supervisor, LPC has used the community relations program more than any other
division. The staff in the Community Relations program are technically trained, with
degrees in engineering, geology, and aquatic biology, rather than public relations or
journalism. The supervisor strongly believes that technically trained staff with good
communication skills are more effective at explaining what IEPA wants to do at a site than
public relations specialists who would not understand the project. Moreover, community
relations staffers communicate with LPC project managers on a regular and informal basis;
the program supervisor advises his staffers to talk with their respective project managers at
least every three days about site progress.
IEPA attorneys used by the RPMS are located in the Land Noise Pollution Section
in the Division of Enforcement Services. (LPC officials suggested that the name "Land
'Noise' Pollution" is an old misnomer that has yet to be corrected. In actuality, this section
covers land pollution issues broadly.) A senior attorney in this division supervises 10 other
attorneys, all of whom work on a variety of enforcement cases, not all of them superfund.
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IEPA attorneys are aided by lawyers in the Attorney General's Office, six of whom are in
Springfield and a dozen of whom are in Chicago.
Pollution Control Board Under the ffiPAct, the Pollution Control Board (PCB)
consists of seven technically qualified members appointed by the Governor, with no more
than four from the same political party. The PCB is an independent administrative body
charged primarily with promulgating environmental regulations, and conducting hearings on
enforcement variance and administrative review cases. Unlike public boards in some other
states the PCB does not directly oversee the work of the IEPA; the PCB and IEPA are
independent agencies.
Unlike IEPA, the PCB has the authority to issue administrative orders. As an
administrative, adjudicatory body comprised of gubernatorial political appointees, the PCB
will hold hearings at the request of IEPA to determine if an administrative order for site
work needs to be issued. This option, however, is rarely exercised by IEPA, because the
PCB must hold a formal hearing, which delays the process. IEPA prefers to issue 4q
notices or to rely on the Attorney General directly. IEPA contends that the PCB is better
suited for small cases, while the larger cases are better handled through the 4q process or
are brought to the attention of the Attorney General for possible litigation.
Though the PCB is authorized to have an important role in the State superfund
program on paper, in fact, it has a minor role. Regulations are actually developed by the
LPC, and program officials prefer to rely on cost recovery or the Attorney General's
litigation authority. IEPA has not issued formal complaints thus far, an action that would
trigger PCB hearings. In short, the PCB is considered a bottleneck, because it is a small
administrative body, and LPC officials opt to use enforcement mechanisms they believe are
more efficient.
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IV. FUNDING
There are four major funding sources for the RPMS, which provided the program
over $15 million in 1988 (see Figure IL-4). These sources and their relative contributions
are discussed in this section.
Hazardous Waste Fund
The Hazardous Waste Fund (HWF) receives 90% of the hazardous waste fees
collected under §22.2 of the Act.8 These fees apply to treatment and disposal operations,
and they are being elevated each year for fiscal years 1989-91 in order to increase the
HWF and to encourage waste minimization. Some State officials question whether the
increasing fees will reduce the monies this source provides by discouraging the expansion
or creation of such businesses in the State and by encouraging waste minimization.
Currently, the fees bring in $2.1-2.2 million per year, and the unobligated HWF balance
was $4.25 million as of January 1, 1989.
Of the three principal funds, the HWF is the only one with a cap, which is set at
$10 million by the Act. If the unobligated funds in the HWF exceed this amount at any
time, the treatment and disposal fees will be suspended until the unobligated balance dips
below $8 million. According to State officials, this is an unlikely occurrence, because the
fund balance is reported monthly, and the amount of work needing funds is constant,
making it relatively easy to obligate monies should the fund balance near its ceiling.
The activities for which the HWF may be used include emergency response,
immediate removals, CERCLA match, studies and design, remedial actions, and operations
and maintenance. In addition, until 1989 the Act required that at least 50% of HWF
monies be used for response actions on NPL sites in the State. Legislation passed in 1989
deleted this limitation in exchange for a provision requiring DEPA to manage HWF funds
to assure that matching funds are available for NPL sites.
8. 111. Rev. Stat. ch. Ill 1/2 §1022.2(d). The remaining 10% of these fees are
deposited into the Hazardous Waste Research Fund, which, inter alia, is used to fund
research towards reducing the amount of waste produced in the State and to administer the
Illinois Health and Hazardous Substances Registry Act. HI. Rev. Stat. ch. Ill 1/2
§1022.2(e).
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FIGURE IL-4
Cleanup Expenditures
Millions of Dollars
$15.43
$13.86
$4.48
$1.53
$15*
$9.75
85
86
87 88
Fiscal Year
89
90
* Amount
agreements
f settlement
'90 figures are proposed.)
Clean Dlinois Fund
The Clean Illinois fund contains State general revenues appropriated for the State-
funded Cleanup Program. Receiving roughly $1.6-1.8 million per year, the Clean Illinois
Fund covers all administrative and operational costs of the program, including staff and
related costs. It may be used for the same activities as the HWF except for State
CERCLA match. Although this has been a stable funding source for several years, current
State fiscal problems threaten all general revenue sources.
Build Illinois Program
This State bond program that provides money for a variety of improvement projects
in Illinois has proven to be a key funding source for the Hazardous Waste Cleanup
Program in the last few years. In fiscal year 1988, Build Illinois added $15 million to the
LPC's efforts, perhaps the largest single source of monies for the program in one year.
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This funding source is diminishing, however, as the used car sales tax created to replenish
it has generated less money than expected. Thus, even though the State will use an
additional $7 million from this program for cleanup activities in FY 1990, the future of
this bond program is tenuous: IEPA officials expect that it may evaporate as a funding
source for the cleanup program in FY 91.
Solid Waste Management Fund
The fees for the Solid Waste Management Fund bring in about $18 million per
year, of which the IEPA receives 50% or $9 million per year. This money is used for
planning and enforcement grants to local governments and to support the Agency's
regulatory program. Currently, the cleanup program has no access to this fund on an
ongoing basis. As a result of a recent settlement of a lawsuit concerning past fees that
have been held in escrow, the IEPA expects to receive a one-time payment of $3-4 million
which can be used for remedial investigations at solid waste sites.
Other Sources
IEPA has established a comprehensive cost accounting system to keep track of all
of its costs for each site. Staff time, including the Community Relations staff, is carefully
recorded, as are contractor costs and other expenses. In the past year IEPA has begun
sending quarterly bills to RPs for current oversight and other costs. Bills are sent to all
identified RPs and each RP receives a bill for the full amount; the IEPA takes the position
that it is up to the RPs to decide how to split the costs among themselves. After a review
of its past costs DSPA determined that $40-42 million was eligible for cost recovery.
Further evaluation of the cases and documentation led the agency to send bills for about
$6.3 million to RPs. As of December 1989 the agency has collected $1.2 million with no
further enforcement effort. IEPA is also pursuing cost recovery in about 20 cases and has
filed claims for treble damages in 6-7 of those cases.
V. THE REMEDIATION PROCESS
The remediation process begins at site discovery and continues through cleanup and
the many years typically required for operations and maintenance. To aid this discussion,
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the remediation process is divided into several key subjects rather than an overly-simplified
timetable: strategy and current progress, RP participation and the voluntary cleanup
program, selecting cleanup standards, the removal program, and the community relations
program.
Strategy and Current Progress
The "4q" notice and a willingness to use the various State funds together are the
keys to lEPA's enforcement strategy. After discovering and assessing a given site, the
cleanup program's remediation strategy begins with the "4q" notice. Composed of two
major sections, "Findings of Fact" and "Identified Response Action," the "4q" notifies RPs
of their liability and of the potential for treble damages if they do not comply. It is not,
however, enforceable as an order unless IEPA files a complaint with the PCB and the PCB
issues an order after holding a formal hearing. The "Findings of Fact" section details the
actual or imminent danger posed by a site, while the "Identified Response Action" section
describes the remedial or removal action responsible parties are expected to perform.
The "4q" notice is vital to the strategy of the program, because it effectively
functions as an order. Whether used to request information or work, the "4q" creates a
strong incentive for RP compliance, because penalties and treble damages may be assessed
for inactivity. Failure to comply with a "4q" identifying work to be performed subjects
RPs to treble damages, and any "violation of the Act" subjects RPs to civil penalties up to
$10,000 per violation and $1000 per day for continuing violations. As a result, the
Agency has been able to motivate RP action despite the lack of actual administrative order
authority.
The Agency's knowledge of the strength of the "4q" notice motivates it in part to
adhere to negotiation deadlines. Also, IEPA officials assert that their willingness to begin
the contracting process for site work immediately after negotiation deadlines is the final
impetus for many RPs to assume site remediation. As State officials explain, fund use is
their greatest enforcement threat. If the RPs fail to take action the State has sufficient
resources and flexibility to begin work itself within weeks. IEPA enforces and pursues
cost recovery regardless of whether a site is listed on the SRAPL.
Though the "4q" is less powerful as an information gathering tool, the IEPA
supervising attorney working with RPMS contends that site access is relatively easy to
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attain. The State's new Property Transfer Law is also expected to add much more
information about potential and actual sites in Illinois, thereby lessening the need for IEPA
to discover sites by more aggressive means. Finally, as of December 1989, IEPA attorneys
have filed or were about to file liens for about $10.4 million under newly acquired lien
authority on 15 sites.
RP Participation and the Voluntary Cleanup Program
The Voluntary Cleanup Program is monitoring RP action at 127 sites, including 79
cleanups. IEPA defines a voluntary cleanup as either as one initiated by the Agency and
later assumed by the RPs for continued work or as a cleanup initiated by RPs prior to any
Agency action. In other words, any RP action is considered voluntary.
The Voluntary Cleanup Program is the fastest growing portion of RPMS. Between
August 1987 and August 1988, the number of voluntary cleanups in the State increased by
35%; an even greater percentage increase has occurred in the voluntary cleanups initiated
by RPs, as opposed to those assumed by RPs after Agency action. In fact, the majority of
newly initiated RP cleanups are connected to environmental assessments conducted in
property transfers. The other key types of voluntary cleanups occur during underground
storage tank removals and during the remediation of old dump sites.9
A key motivation behind voluntary cleanups prior to the advent of the Responsible
Property Transfer Act has apparently been the desire of property sellers, buyers, and then-
agents to assess and mitigate contamination at sites being transferred. Historically, IEPA
has served as an on-scene coordinator at these sites, offering technical, cleanup, and quality
control advice; occasionally, IEPA has issued environmental releases or certifications of the
work performed. Thus, a major impetus behind voluntary cleanups, according to the
Agency, is the desire of individuals and companies to determine what constitutes a clean
site.
Selecting Cleanup Standards
IEPA project managers undergo a two-step committee process to arrive at cleanup
targets for State sites. Making presentations for both committees, project managers in the
9. Dennis L. Newman and James F. Frank. The Voluntary Cleanup Program in
Illinois. Springfield, EL: Illinois Environmental Protection Agency. December 1988.
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Remedial Project Management Section review site history and characteristics, the extent and
type of contamination, and the potential for human exposure.
The first committee to consider cleanup levels for sites is the Cleanup Objectives
Team, or COT. This committee is composed of managers from several divisions in the
Agency (e.g.. Air Pollution Control, Water Pollution Control), who are generally individuals
with technical backgrounds. Their objective is to select health-based cleanup standards.
The Coordinated Review of Permit Application (CROPA) committee, second in the
chain, considers the COT cleanup levels and then makes a final determination. The
CROPA committee generally begins its consideration of cleanup levels within two weeks
after the COT committee is finished. Both the project manager for a site and the COT
committee member who wrote the original cleanup recommendation are present for CROPA
deliberations. While COT levels may be altered, CROPA levels may not. CROPA levels
are final.
CROPA members are higher level administrative managers who use the COT health
targets as a guide but also consider the technical feasibility and costs of cleanup targets.
According to the manager of the Remedial Project Management Section, while the CROPA
committee generally concurs on COT levels, they occasionally ease those levels. In one
instance, for example, CROPA raised the COT cleanup target for a contaminant to the
threshold of detectable levels.
The Removal Program
Similar to CERCLA, the lEPAct defines removal broadly, and the Agency uses this
broad definition to conduct removals that are often akin to expedited remedial actions. At
present, IRU is conducting an average of 18 immediate removals per year at an average
cost of $300,000-500,000 per removal. Removals are capped at $1,000,000 and six
months, but extensions of time and money may be secured with the Director's approval.
An example of how the state uses the removal authority to conduct extensive
cleanups is the incineration program. Incineration sites, such as Lenz Oil, invariably
exceed the cost ceiling, but effective alternative technologies are a priority with the State;
destruction of waste is preferred to mere containment or land disposal. According to the
IRU Manager, the estimated cost of incineration is roughly $400 per ton, compared to a
cost of $300 per ton for land disposal fees. Thus, the desire to use cost-effective, reliable
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technologies such as incineration meshes with the Agency's desire to use its limited
resources well. For example, the Lenz Oil incineration site, costing $7,000,000 and having
lasted a full year, was considered a necessary and well-spent action.
As early as 1986, IEPA officials appreciated the potential value of incineration for
the Remedial Project Management Section. Obtaining a special exemption in the federal
Superfund Amendments and Reauthorization Act (SARA), §118(i), the State enjoys eased
requirements for incineration permitting. Thus far, IRU has used mobile incinerators at
two sites (Lauder PCB site and Lenz Oil) and is planning to use it on a third (Paxton
Avenue Lagoons). A fourth mobile incinerator site (LaSalle Electrical Utilities) is being
managed by the Federal Sites Unit.
Along with removals, IRU currently oversees 100 voluntary cleanup actions. The
unit chief claims this is an extremely cumbersome load for such a small staff, and he
hopes to increase his staff in the next year. Yet the money to expand the staff may not be
available soon, in large part because the State general revenues have remained relatively
stable in the last few years.
IRU uses alternative technologies other than incineration. Cyanide destruction at
electroplating facilities, a common class of site in the State, has been used successfully.
Low temperature thermal destruction has been useful with compounds in the benzene-
toluene-xylene group (BTXs), but not for polynuclear compounds, which do not break
down as easily.
Traditional pump and treat methods continue to be commonly used in the State, and
IRU has overseen one bioremediation site and at least one site being remediated by air
stripping (Morrision City Wells).
The Community Relations Program
According to the supervisor of this program, the public is informed of site activity
early for three reasons: 1. The public adds information (e.g., more than a handful of
apparently orphan sites had RPs identified by concerned locals); 2. The public needs to be
educated (e.g.. concerns about health threats, including the safety of remedial actions, are
answered by staffers); and 3. The public helps improve remedial actions (§4^, suggested a
truck route near one site be altered because of the proximity of a day care center-Byron
Salvage).
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Informing and educating residents in communities where mobile incinerators have
been proposed has been a key asset of the community relations program, according to both
the program supervisor and the IRU chief. Emphasis is placed on answering the range of
questions asked by community members, often during town meetings. Community relations
staffers try to avoid a public debate about appropriate remedy selection but concentrate
instead on the pros and cons of a selected remedy and answering questions.
In addition to holding public meetings, the program distributes fact sheets of three
general types: 1) Fact sheets covering the hazards and other characteristics of 50 common
chemicals; 2) Fact sheets on specific sites for local residents near those sites; and 3) Fact
sheets discussing specific remedial techniques, such as incineration, to inform residents
about the action that will be taken.
Contracting Procedures
Though IRU has no pre-qualification process for contractor approval, the unit
currently uses three labs that meet quality assurance/quality control requirements, four
remedial consultants, and four remedial contractors. Any contract anticipated to be in
excess of $50,000 is put up for bidding. Bidders are given a chance to visit the site, and
requests for proposals are sent about one week later. Contracts are then awarded to the
lowest bidder.
VI. PROGRAM OUTLOOK
The advent of the Responsible Party Transfer Act is expected to identify numerous
new sites for which PAs and Sis will be necessary. Thus, although IEPA knows the
extent of hazards at a large majority of the currently known sites, it expects to have to do
evaluations for the foreseeable future.
A major source of funding for cleanups, Build Illinois bonds, is expected to
evaporate in the next year or two. At the same time, a number of expensive cleanups are
expected to be ready to begin construction, and the overall level of activity for the program
is expected to increase. ffiPA's enforcement strategy is primarily based on its ability make
a credible threat that it will do the work itself if the RPs fail to take the lead. Thus, this
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potential loss of a major source of funding could affect the future success of the Illinois
enforcement program in addition to its ability to fund its own actions.
Illinois has demonstrated an ability to work with communities and local
organizations to improve the quality of cleanups and to avoid obstruction of the cleanup.
This program of community relations will be even more important as the number of
cleanups increases and as the number of "final" remedies increases.
45
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46
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APPENDIX
47
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ENVIRONMENTAL DISCLOSURE DOCUMENT
FOR TRANSFER OF REAL PROPERTY
The following information is provided pursuant to the Responsible Property For Use By County
1tan.ferAdofl988 Recorder's Office
Seller: - .
Buyer -
Date
Document No. : - No
PROPERTY IDENTIFICATION
A. Address of property:
Vo\ Page.
Rec'd by:
Street City or Village Township
Permanent Real Estate Index No.: .
Legal Description:
Section Township . Range
Enter or attach current legal description in this area:
Prepared by: Return to:.
address address
LIABILITY DISCLOSURE
Transferors and transferees of real property are advised that their ownership or other control of such property may render them liable
for any environmental clean-up costs whether or not they caused or contributed to the presence of environmental problems associated with
the property.
C. Property Characteristics:
Lot Size Acreage
Check all types of improvement and uses that pertain to the property:
Apartment building (6 units or less) Industrial building
Commercial apanment (over 6 units) Farm, with buildings
Store, office, commercial building Other, specify
II. NATURE OF TRANSFER: Yes
A. (1) Ts this a transfer by deed or other instrument of conveyance?
(2) Is this a transfer by assignment of over 25% of beneficial interest of an Illinois land trust?
(3) A lease exceeding a term of 40 years?
(4) A mortgage or collateral assignment of beneficial interest?
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B. (1) Identify Transferor
Name and Cuntnt Address of Transferor
Name and Address ofTruslee if this is a transfer of beneficial mtercscofaland iroa." ~ ~ r—
(2) Identify person who has completed this form on behalf of the Transferor and who has Knowledge of the information
contained in (his form:
Name, Position (if any), and address ~ '" =-.— rr—
Telephone No
C. Identify Transferee:
Name and Curten! Address of Transferee
III. NOTIFICATION
Under the Illinois Environmental Protection Act, owners of real property may be held liable for costs related to the release of
hazardous substances.
I. Section 22.2(0 of the Act states:
"Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (j) of this Section, the
following persons shall be liable for all costs of removal or remedial action incurred by the State of Illinois as a result of a release or
substantial threat of a release of a hazardous substance:
(1) The owner and operator of a facility or vessel from which there is a release or substantial threat of release of a hazardous
substance;
(2) Any person who at the time of disposal, transport, storage or treatment of a hazardous substance owned or operated the facility or
vessel used for such disposal, transport, treatment or storage from which there was a release or substantial threat of a release of any such
hazardous substance;
(3) Any person who by contract, agreement, or otherwise has arranged with another party or entity for transport, storage, disposal or
treatment of hazardous substances owned, controlled or possessed by such person at a facility there is a release or substantial threat of a
release of such hazardous substances; and
(4) Any person who accepts or accepted any hazardous substances for transport to disposal, storage or treatment facilities or sites
from which there is a release or a substantial threat of a release of a hazardous substance."
2. Section 4(q) of the Act states:
"The Agency shall have the authority to provide notice to any person who maybe liable pursuant to Section 22.2(0 of this Act fora
release or a substantial threat of a release of a hazardous substance. Such notice shall include the identified response action and an
opportunity for such person to perform the response action."
3. Section 22.2(k) of the Act states:
"If any person who is liable for a release or substantial threat of release of a hazardous substance fails without sufficient cause to
provide removal or remedial action upon or in accordance with a notice and request by the agency or upon or in accordance with any order
of the Board or any court, such person may be liable to the State for punitive damages in an amount at least equal to, and not more than 3
limes, the amount of any costs incurred by the State of Illinois as result of such failure to take such removal or remedial action. The
punitive damage imposed by the Board shall be in addition to any costs recovered from such person pursuant to this Section and in addition
to any other penalty or relief provided by this Act or any other law."
4. Section 22.18(a) of the Act states:
"Notwithstanding any other provision or rule or law, except as provided otherwise in subsection (b), the owner or operator, or both.
of an underground storage tank shall be liable for all costs of preventive action, corrective action and enforcement action incurred by the
State of Illinois as a result of a release or a substantial threat of release of petroleum from an underground storage tank."
5. The text of the statutes set out above is subject to change by amendment. Persons using this form may update it to reflect changes
in the text of the statutes cited, but no disclosure statement shall be invalid merely because it sets forth an obsolete or superseded version of
such text.
IV ENVIRONMENTAL INFORMATION
Regulatory Information During Current Ownership
I. Has the transferor ever conducted operations on the property which involved the generation, manufacture, processing, transporta-
tion, treatment, storage or handling of "hazardous substances", as defined by the Illinois Environmental Protection Act? This question
shall not be applicable for consumer goods stored or handled by a retailer in the same form, approximate amount, concentration and
manner as they are sold to consumers, provided that such retailer does not engage in any commercial mixing (other than paint mixing or
tinting of consumer sized containers), finishing, refinishing. servicing, or cleaning operations on the property.
Yes No
2. Has the transferor ever conducted operations on the property which involved the processing, storage or handling of petroleum.
other than that which was associated directly with the transferor's vehicle usage?
Yes No
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3. Has the transferor ever conducted operations on the property which involved the generation, transportation, storage, treatment or
disposal of "hazardous or special wastes", as defined by the federal Resource Conservation and Recovery Act and the Illinois Environ-
mental Protection Act?
Yes No
4. Are there any of the following specific units (operating or closed) at the property which are or were used by the transferor to
manage waste, hazardous wastes, hazardous substances or petroleum?
YES NO YES NO
Landfill Injection Wells
Surface Impoundment Wastewater Treatment Units
Land Treatment Septic Tanks
Waste Pile Transfer Stations
Incinerator Waste Recycling Operations
Storage Tank (Above Ground) .. Waste Treatment Detoxification
Storage Tank (Underground) -- Other Land Disposal Area .
Container Storage Area
If there are "YES" answers to any of the above items and the transfer is other than a mortgage or collateral assignment of beneficial
interest, attach a site plan which identifies the location of each unit, such site plan to be filed with the Environmental Protection Agency
along with this disclosure document.
5. Has the transferor ever held any of the following in regard to this real property?
a. Permits for discharges of wastewater to waters of the State. Yes No
b. Permits for emissions to the atmosphere. Yes No
c. Permits for any waste storage, waste treatment or waste disposal operation. Yes No
6. Has the transferor had any wastewater discharges (other than sewage) to a publicly owned
treatment works? Yes No
7. Has the transferor taken any of the following actions relative to this property?
a. Prepared a Chemical Safety Contingency Plan pursuant to the Illinois Chemical Safety Act. Yes No
b. Filed an Emergency and Hazardous Chemical Inventory Form pursuant to the federal Emergency
Planning and Community Right-to-Know Act of 1986. Yes No
c. Filed a Toxic Chemical Release Form pursuant to the federal Emergency Planning and Commu-
nity Right-to-Know Act of 1986. Yes No
8. Has the transferor or any facility on the property or the property been the subject of any of the following State or federal
governmental actions?
a. Written notification regarding known, suspected or alleged contamination on or emanating from
the property. Yes No
b. Filing an environmental enforcement case with a court or the Pollution Control Board for which a
final order or consent decree was entered. Yes No
c. If item b. was answered by checking Yes, then indicate whether or not the final order or decree is
still in effect for this property. Yes No
9. Environmental Releases During Transferor's Ownership
a. Has any situation occurred at this site which resulted in a reponable "release" of any hazardous
substances or petroleum as required under State or federal laws? Yes No
b. Have any hazardous substances or petroleum, which were released, come into direct contact with
the ground at this site? Yes No
c. If the answers to questions (a) and (b) are Yes, have any of the following actions or events been associated with a release on the
oroperty?
__^_ Use of a cleanup contractor to remove or treat materials including soils, pavement or other suificial materials
Assignment of in-house maintenance staff to remove or treat materials including soils, pavement or other surficial materials
Designation, by the IEPA or the IESDA, of the release as "significant" under the Illinois Chemical Safety Act
Sampl i ng and analysis of soils
Temporary or more long-term monitoring of groundwater at or near the site
Impaired usage of an on-site or nearby water well because of offensive characteristics of the water
Coping with fumes from subsurface storm drains or inside basements, etc.
. Signs of substances leaching out of the ground along the base of slopes or at other low points on or immediately adjacent (o the
site
10. Is the facility currently operating under a variance granted by the Illinois Pollution
Control Board? Yes No
11. Is there any explanation needed for clarification of any of the above answers or responses? .
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B. SITE INFORMATION UNDER OTHER OWNERSHIP OR OPERATION
I. Provide the following information about the previous owner or any entity or person the transferor leased the site to or atherwise
contracted with for the maoasement of the site or real omnerry:
Name: . .
Type of business/.
or property usage.
2. If the transferor has knowledge, indicate whether the following existed under prior ownerships, leaseholds granted by the trans-
feror, other contracts for management or use of the facilities or real property:
YES NO YES NO
Landfill . Injection Wells
Surface Impoundment . Wastewater Treatment Units
Land Treatment . Septic Tanks
Waste Pile , Transfer Stations
Incinerator . Waste Recycling Operations
Storage Tank (Above Ground) . Waste Treatment Detoxification
Storage Tank (Underground) - Other Land Disposal Area .
Container Storage Area .
V. CERTIFICATION
A. Based on my inquiry of those persons directly responsible forgathering the information, I certify that the information submitted
is, to the best of my knowledge and belief, true and accurate.
signatu.
type or pnnl name
TRANSFEROR OK TRANSFERORS (or on behalf of Transferor)
B. This form was delivered to me with all elements completed on
10- ._
signature
type or prim name Eunice BettS
TRANSFEREE OR TRANSFEREES (or on behalf of Transferee)
C. This form was delivered to me with all elements completed on
19
signature
type or pnnl name
LENDER
(Ch. 30, par. 906)
COMPLIMENTS OF CHICAGO TITLE INSURANCE COMPANY
R3690 Il/W 51
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MINNESOTA
OVERVIEW
Minnesota has had significant success in eliciting RP participation in hazardous waste cleanups.
Through the middle of 1988, Minnesota spent $12.4 million on cleanups at 17 sites, while the Federal govern-
ment spent $14.4 million on 14 sites and RPs spent or committed $130 million at 73 sites. The State has 42
NPL sites, 158 hazardous waste sites on its Permanent List of Priorities (PLP), and 80 employees working
exclusively on Superfund.
RP Participation Liability for sites is rarely contested by RPs in Minnesota, in part because most of
the State's hazardous waste sites are industrial and have only one to five RPs. Responsibility for sites is
therefore relatively easy to assign. In addition, the liability standard and administrative process are well
defined. The Minnesota Pollution Control Agency must request RP action before spending Fund money, but it
sets a deadline for RP negotiations and uses the threat of spending Fund money and recovering costs from
RPs to encourage the RPs to settle. The Agency insists on full cost recovery for response actions, including
administrative costs, and has recovered $4.7 million from RPs.
Property Transfer Provisions Minnesota law provides several incentives to clean up sites when
property is transferred. One provision allows the State to place a lien on property on which it has spent State
Fund money and not been reimbursed. Another requires the owner of contaminated property to record with
the county recorder of deeds an affidavit stating that the property is contaminated, and allows another affidavit
to be recorded when the hazardous substances are removed. Minnesota has also started a voluntary property
transfer review program, at the request of the business community.
Team Approach The Minnesota Pollution Control Agency uses a team approach to managing sites,
assigning to each site a team including a Project Manager, a Technical Analyst, an On-Site Inspector, a Public
Information Officer, an attorney, and sometimes an engineer. The team approach provides each site with
appropriate expertise and continuity and tends to promote consistency throughout the program. Continuity is
also aided by the Program's relatively low staff turnover rate.
Municipal Landfills One likely problem that the Minnesota Superfund program will soon encounter
is the need to clean up contaminated municipal landfills. Fifty-four of the 158 sites on the State's PLP are
permitted landfills. The Minnesota legislature has set a $400,000 limit on municipal liability for each response
action. Under these circumstances the cleanup of 20 municipal landfills would cost the State program close to
$100 million. The program has no ready source of funding for a liability of this magnitude.
I. INTRODUCTION
History
After the passage of the federal superfund law (CERCLA) in 1981, the Minnesota
Pollution Control Agency (MPCA) began developing its own state superfund program.
This was both to enable the state to take on its responsibilities under CERCLA and in
anticipation of a parallel state program to handle sites which would not qualify for federal
funds. During the first two years, the MPCA concentrated on developing an inventory of
state sites and designing a state program in anticipation of state legislation. By 1983,
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when legislation was enacted, the MPCA had identified more than 60 sites needing
cleanup.
Statistics
Under the Minnesota Environmental Response and Liability Act (MERLA) the State
has spent $12,435,600 from the Minnesota Environmental Response, Compensation and
Compliance Fund (Fund) in responding to releases of hazardous substances (through the
end of FY 88 - 6/30/88). State fund money has been used at 17 sites and also for 250
arsenic-contaminated sites. During the same period the State estimates that responsible
parties have spent or committed to spend more than $130 million on response actions on
73 sites. An additional $4.7 million has been paid to the Fund to cover penalties and costs
incurred by the MPCA in administering the site cleanup activities. During this time the
State has also obtained $14.44 million from the federal Superfund, using it at 14 sites.
Response action has been taken at 104 sites on the state's list, of which 31 are
orphan sites or have non-viable RPs. Responsible parties are responding at 70% of the
sites and have spent 83% of the total amount of money spent on response actions in the
State (ten times the amount spent by the State Fund). Eleven sites have been delisted from
the State's Permanent List of Priorities (PLP).
Over the history of the state's superfund program (through FY 88), the MPCA has
identified 450 potential hazardous waste sites, including 50 in FY 88. By June 30, 1988,
the Agency had conducted 342 preliminary assessments. As of June 1989, the Agency
added 19 new sites to the PLP, raising the total number of sites on the PLP to 158. This
includes 54 municipal solid waste landfills from which there are documented releases of
hazardous substances. The MPCA anticipates adding another 50 sites to the PLP by the
end of 1991.
Forty (40) of the sites on the PLP are also on the NPL and are thus eligible for
federal Superfund money. Consistent with directives in MERLA, the MPCA is aggressive
in seeking to have sites added to the NPL. Thus it sent 17 sites to Region 5 with
recommendations that they be included in the most recent NPL updates, but none was
proposed to be listed.
At 38 PLP sites the remedial action has been completed and 11 of these sites have
been delisted. The other 27 sites are now in the operation and maintenance phase.
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These statistics suggest that the State has been successful in shifting the primary
responsibility for cleanup to responsible parties. Response actions are moving forward at
a steady pace and responsible parties are doing the bulk of the work. RPs are doing the
work at roughly 70% of the sites and have spent $10 for every dollar spent from the state
Fund.
Site Characteristics The sites in Minnesota tend to be mostly industrial sites with
1-5 RPs, one of which was usually the operator. There are relatively few commercial
landfills on the PLP, although municipal landfills are probably the second largest category
of sites. This has made RP searches and negotiations relatively simple. Many of the RPs
on the industrial sites are large, viable and visible Minnesota corporations that apparently
believe it is in their corporate best interest to cooperate with the agency and clean up sites
themselves.
Groundwater contamination is the most common and most serious problem at sites
listed on the PLP. Approximately 70 - 75% of the State's population depends on ground-
water for its drinking water. Thus, remedial actions are generally controlled by the need to
ensure that groundwater is safe for human consumption.
Program Goals
In its 1988 annual report to the legislature, the Agency laid out the following goals
for the future of the superfund program:
• continue efforts to identify new hazardous waste sites in the
state;
• as required by MERLA, aggressively seek out responsible
parties;
• maximize the use of federal Superfund dollars, including
continuing efforts to secure federal Superfund dollars for
program management and response actions at specific sites and
negotiating with EPA to obtain federal Superfund dollars for
enforcement activities at specific sites;
• continue to place a higher priority on sites at which response
actions are currently underway rather than starting remedial
work on new sites; work on new sites will be initiated only as
staff resources become available.
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The agency stated that these priorities were consistent with its overall program goals
of achieving site cleanups which are "adequate to protect the public heath and environment,
cost-effective and are conducted in an expeditious manner."1 Agency officials characterize
the State's cleanup objectives in these same terms emphasizing protection of public health
by reducing the worst risks without necessarily eliminating risks by, for instance, cleaning
a site to background levels.
H. STATUTE
On July 1, 1983 the state passed its own superfund law, the Minnesota
Environmental Response and Liability Act (MERLA, Minn. Stat. 115b.01 - .24). The law
gives the MPCA the authority to require cleanup of sites that threaten human health and
the environment and also provides funding for the MPCA to take action at sites where RPs
are unavailable, unable or unwilling to do so, and subsequently to recover the costs from
any viable RPs.
MERLA establishes protection of public health and the environment as the goal of
the state superfund program.
MERLA clearly places a priority on RP- rather than fund-financed cleanups. The
law requires the MPCA to request RPs to take action before using the state's fund, except
for emergency removals.2 The statute also prohibits the agency from using the state fund
for any removal or remedial actions for which federal Superfund money is available in a
timely fashion.3
Within the above constraints the MPCA may take removal or remedial action
whenever there is a release or substantial threat of a release of a pollutant or contaminant
which presents an imminent and substantial danger to the public health or welfare or the
1. MPCA Report on the Use of The Environmental Response Compensation and
Compliance Fund During Fiscal Year 1988. 14 (1988).
2. Minn. Stat. 115B.17(a)(l) & (b).
3. Minn. Stat. 115B.20 Subd. 3.
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environment or a release or threatened release of a hazardous substance.4 This standard is
virtually identical to the one in sec. 104 of CERCLA.
The Minnesota statute explicitly provides that responsible parties are strictly liable,
jointly and severally, for response costs5 incurred by the state or any other person and for
damages to natural resources.6 Responsible parties who are held jointly and severally liable
are, however, entitled to have the jury (or the judge in a non-jury trial) apportion liability
among the RPs.7 In apportioning liability the jury must consider: 1) the extent to which
each party's contribution to the release can be distinguished; 2) the toxicity of the
substance contributed; 3) the amount of substance contributed; 4) the degree of care used
by the party handling the substance; 5) the cooperativeness of the party with federal, state,
or local officials; and 6) the party's knowledge of the hazardousness of the substance.
Responsible persons are defined to include owners or operators of the facility at the
time the substances were placed there, were located there but before the release, or during
the time of the release or threat of release; persons who owned or possessed the substance
and arranged for the disposal, treatment, or transport of the substance; or persons who
knew or should have known that waste they accepted for transport, treatment, or disposal
was hazardous (or a pollutant or contaminant) and selected the facility or disposed of it
illegally.8 Landowners may also be RPs but only if they knowingly permitted waste
disposal or generation, treatment, storage, disposal, or transport of hazardous substances on
the site; knew or should have known that a hazardous substance was located on the site; or
significantly contributed to the release after the person knew or should have known of the
presence of a hazardous substance.9
4. Minn. Stat. 115B.17 Subd. 1.
5. Responsible parties are not, however, liable for costs of responding to releases of
pollutants or contaminants or for damages from such releases. Minn. Stat. 115B.04 Subd.
2.
6. Minn. Stat. 115B.04 Subd. 1.
7. Minn. Stat. 115.08 Subd. 1.
8. Minn. Stat. 115B.03 Subdiv. 1.
9. Minn. Stat. 115B.03 Subd. 3.
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MERLA provides certain specified defenses to the otherwise strict liability. These
include the ones provided in CERCLA, but also absolve RPs of liability if the release was
an act of vandalism or sabotage or in a "son of superfund" situation where the MPCA or
EPA removed materials to another site from which there was a release.
MERLA contains a mix of enforcement provisions but they are not as extensive as
those contained in CERCLA, for example. The MPCA is authorized to recover its costs
from RPs and its certification of those costs is considered prima facie evidence of their
validity.10 Mandatory injunctive relief is available if the Agency chooses to compel an RP
to take action.11 Civil penalties of up to $20,000/day are also available if an RP fails to
take response action in a timely manner.12 Punitive damages for unreasonable failure to
take a response action are not available under MERLA.
The Agency has very limited authority under MERLA to administratively order an
RP to act. For example, although RPs have a duty to answer MPCA requests for
information, the Agency has no specific authority to order RPs to respond. The Agency
does, however, have subpoena authority and has used it successfully in the few instances
where RPs failed to respond to information requests.13 Similarly, the Agency has no
authority to administratively order a property owner to provide access, but has been able to
obtain court orders to allow access the few times it has been refused. Finally, MERLA
contains no general administrative order authority. The Agency is required to "request"
RPs to take a response action before it may spend Fund money, but the request is not
enforceable.
Two provisions of Minnesota law create incentives, at the time of property transfer,
to clean sites. One allows the state to place a lien on any property on which the state has
spent Fund money for cleanup but has not been paid. Then, the debt to the state must be
paid if the property is sold. This is only effective if the property has some value and thus
10. Minn. Stat. 115B.17 Subd. 6.
11. Minn. Stat. 115B.18 Subd. 2. & 4.
12. Minn. Stat. 115B.18 Subd. 1. MPCA officials state that they have not been
confronted with a situation where all viable RPs refused to take the requested action or pay
for the Agency's expenses and thus the Agency has not invoked the civil penalties section.
13. Minn. Stat. 115B.03 Subd.2.
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works best where the RA is complete and the specter of a contaminated site has been
diminished. The other property transfer provision requires owners who know or should
know that their land was the site of a hazardous waste disposal facility or is subject to
"extensive contamination by release of a hazardous substance" to record an affidavit stating
those facts with the county recorder of deeds. If the owner removes the hazardous
substance and all residues and contaminated soils then the owner may record another
affidavit stating that the substances were removed.
The Minnesota legislature also created a separate victim compensation fund, called
the Hazardous Substance Injury Compensation Fund.14 This fund is administered by a 5
member Board which is authorized to pay victims' claims for medical expenses, lost wages
(up to 2/3 or $24,000), death benefits, loss of household labor, decrease in property value
of principal residence (up to $25,000), and costs of replacing a primary source of drinking
water.15
IH. PROGRAM ORGANIZATION
Program Structure
The Commissioner of the MPCA is responsible to the Minnesota Pollution Control
Agency Board (MPCA Board), a public body composed of nine citizens appointed by the
Governor. The Governor is required to appoint a range of individuals reflecting both
geographical and occupational diversity. The Board meets monthly and must approve all
major decisions to take actions at a site.
The MPCA is divided into four divisions-Ground Water and Solid Waste, Water
Quality, Hazardous Waste, and Air Quality—and regional offices. The Division of Ground
Water and Solid Waste handles all Superfund sites with some technical assistance from
other divisions as required. Within the Division three Sections-Site Response, Solid
Waste, and Program Development-have superfund responsibilities.
The Site Response Section is primarily responsible for implementing MERLA at
traditional superfund sites. In the past the Section was divided into a Superfund Unit,
14. Minn. Stat. 115B.25 - .37.
15. Minn. Stat. 115B.34
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responsible for State and federal-financed cleanups, and two Responsible Party Units,
responsible for obtaining cleanups by responsible parties. Recently, however, the Agency
has decided to move away from this Fund/RP division of responsibilities, at least partly
because all sites start out as RP- or enforcement-lead sites. Eventually the Agency intends
all three units to have equal responsibility for Fund- and RP-financed cleanups. This is a
reflection of the general management position in Minnesota that there should be no
differences in how fund-lead and RP-lead sites are managed. Having both types of site-
funding in each unit provides greater continuity if a site changes from, for instance, fund-
lead for the RI/FS to RP lead for the RA. The Unit supervisors also see advantages to the
staff in gaining experience in both contracting and enforcement.
A Site Assessment Unit in the Program Development Section performs preliminary
assessments of hazardous waste sites, scores the sites according to the Hazardous Ranking
System (HRS), updates the State Superfund Permanent List of Priorities (PLP), and assists
with the voluntary property transfer program.
The Solid Waste Section also has a Superfund Unit that takes action under MERLA
at sanitary landfills that have confirmed releases of hazardous substances.
The Agency receives legal support from the Attorney General's office. The
attorneys are housed in the MPCA's building so they are readily accessible.
Staffing
The MPCA has over 80 personnel who work on the superfund program. According
to MPCA's FY88 report to the legislature, 31 FTEs are funded by federal Superfund
dollars, and 54 FTEs are paid for by the State Fund. Many other personnel in the Ground
Water and Solid Waste Division may occasionally work on superfund related projects and
the state's Fund does pay for parts of these positions. The Director's office has four
management positions, one clerk, and the Division's three Public Information Officers all
assigned to superfund work.
Most of the personnel are located in the Site Response Section. The Section has 43
positions including 4 management and 6 clerical positions. Sixteen (16) Project Managers
oversee all aspects of the work on a given site. The Project Managers come from a wide
range of backgrounds but have often come from enforcement positions hi other MPCA
programs or worked their way up from on-site inspectors. Because no particular technical
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expertise is required of the project managers the Agency is increasingly looking for
talented "generalists" to fill these roles. In support of the project managers there are 14
Technical Analyst positions filled by hydrologists and a few engineers, soil scientists and
chemists. There are also 4 On-Site Inspector (OSI) positions. The On-Site Inspector is an
entry level position. The OSI is the person at the site overseeing work by the RP or
contractor.
A little more than half of these 43 positions are funded by the state fund. The rest
of the funding comes from a mix of CORE grants, site-specific cooperative agreements,
and multi-site cooperative agreements.
The Program Development Section's Site Assessment Unit has 13 positions. Three
(3) hydrologists and 6 on-site inspectors are funded by a PA/SI grant to do all of the
state's site assessment work. Two additional inspectors work with two clerks on property
transfer questions and are funded separately by the property transfer program. Additionally,
the four clerks and the Section Administrator receive fully half of their funding from the
PA/SI grant and the state Fund.
The Solid Waste Section's Superfund Unit has 10 staff including one supervisor, 4
project leaders, 3 hydrologists, and 2 On-Site Inspectors. They receive almost two-thirds of
their funding from the state fund. The rest of their funds come from site-specific
cooperative agreements and 0.5 FTE from a CORE grant. The Solid Waste Section
receives an additional 9 FTE from the state fund. This seems to indicate that the solid
waste section's superfund responsibilities are a proportionally larger (personnel) burden on
the fund than the site response section because federal and site-specific funds are lacking.16
Decisionmaking - Site Teams
Once a site is placed on the Superfund list-following PA/SI and scoring~a site
team is assigned to the project. Team members serve on a number of sites, including both
fund- and RP-lead sites, providing ample opportunity for exchange of knowledge and
contributing to consistency of the Agency's approach across sites. The dynamics of any
given team will vary with the nature of the site and the personalities on the team.
Exceptionally problematic sites may require the team to meet regularly to discuss strategies.
16. For a further discussion of the problems posed by solid waste landfills and the
absence of a program to deal with them see VI Special Topics infra.
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At more routine sites, the team may never assemble as a whole, but at any given site there
is always a clear definition of responsibilities among Agency personnel. Generally, the
team members are drawn from the same unit, except for the attorney and the PIO, thereby
ensuring proximity and availability. The team approach allows individuals to focus on
their area of expertise while ensuring that every site is addressed with the proper mix of
skills. The team approach also minimizes the problems of staff turnover since the size of
the team ensures that there will always be a staff member who is familiar with the site and
its history.
The primary member of the team is the Project Manager, who serves as general
coordinator, manages project budgets, ensures that schedules are met, and serves as first
point of contact for information on an assigned Superfund site. The Project Manager is
also the Agency's representative in negotiations with RPs, though the Unit supervisor, the
attorney, and the technical analyst will usually be present to assist him or her. Project
Managers generally handle between 4 and 6 sites at one time. Project Managers are the
highest level pollution control specialists (PCS 4). They often have a degree in science
and previous experience in the Agency. In the past, Project Managers have tended to
come out of enforcement programs in MPCA with 4-5 years of experience. The role
requires more managerial skills than technical ones, however, and the Agency is
increasingly seeking talented "generalists" to fill these positions.
The Technical Analyst provides the necessary technical expertise to the team,
generally for about 6 to 8 sites. The Analyst reviews technical ground water and soil data,
usually provided by contractors for the RPs or state and federal contractors. Most often
these positions are filled with hydrogeologists (BS in geology with coursework in
groundwater), although engineers, chemists, and soil scientists may also be used. An effort
is made to match the expertise of the technical analyst with the type of problems which
characterize the site. Although Technical Analysts can also rise to the highest level, the
Agency seems to be having the most difficulty finding and keeping hydrogeologists, in part
due to the high salaries offered by contractors.
Each team also has an On-Site Inspector who oversees field work to ensure that it
is done correctly. Usually, this is an entry-level job at the Agency and entails travelling to
sites to split samples, oversee the removal of contaminated soils, and perform similar on-
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site oversight tasks. Inspectors are usually responsible for a dozen or more sites.
Frequently, inspectors are promoted to Project Managers or Hydrogeologists after 3-4 years.
Finally, each team is assigned a Public Information Officer (PIO), who handles
inquiries from the press and the public, and an attorney from the Attorney General's office,
who provides legal advice and, if necessary, representation. All of the superfund sites, as
well as other types of sites handled by the Division, are handled by 3 PIOs. Twelve
attorneys from the AG's office handle MPCA work and have their offices in the MPCA's
building. Currently, only 2 attorneys split the Superfund case load. As many as 6 have
been assigned at one time and 4 is thought to be the ideal number.
The Superfund Unit of the Solid Waste Section also uses the team approach when
addressing sanitary landfills with known hazardous waste releases. However, the nature of
landfills requires that, in addition to the hydrogeologist, there be an engineer on each team
in order to review the engineering aspects of the problem.
IV. FUNDING
Sources
MPCA's superfund program is funded through three sources, the Fund established
under MERLA, RP dollars committed for site-specific actions, and federal Superfund
dollars for both site-specific and more general actions. The MERLA Fund balance on June
30, 1989 was approximately $13 million. Since the passage of MERLA in 1983, RPs have
committed an estimated $130 million towards site cleanups, and have paid $4.7 million in
penalties and reimbursement of MPCA costs into the Fund. In that same time period, the
MPCA has secured a total of $14.44 million in federal Superfund dollars.
The Fund was established in 1983 with an appropriation of $5 million. In 1988 an
additional $4.5 million was transferred to the Fund from the Water Pollution Control Fund.
The legislature recently appropriated an additional $1 million for FY90 and $1.5 million for
FY91. In addition to these ad hoc appropriations the Fund receives money from a tax on
generators of hazardous wastes ($5.1 million to date), from penalties and recovery of state
costs from RPs ($4.7 million to date), and from interest on investments of the Fund ($2.7
million to date).
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Of these sources the only continuing source of money is the tax on generators,
which has contributed less than 25% of the total amount made available to the Fund
through the end of FY 89. The legislature has shown a willingness to continue
appropriating money to the Fund but agency officials perceive some reluctance to continue
adding large amounts to the Fund when it has been making significant amounts of money
investing its relatively large balance.
The State takes the concept of a revolving fund seriously, viewing the Fund as
useful for emergencies and for leverage against reluctant RPs. With the exception of
emergency actions, MERLA specifies that the Agency must seek RP action or federal
monies before using the Fund. Thus, Fund money may only be spent after the Agency has
issued a Request For Response Action (RFRA) to known RPs and the Pollution Control
Agency Board has made a formal Determination of Inadequate Response and authorized
use of the Fund.
In instances where Fund money is spent, the MPCA makes every effort to recover
all of its site-specific costs. From a very early stage, the Agency carefully accounted for
all of its administrative costs on a site specific basis. One example of the Agency's
success in this area is the established system of "billing" RPs annually for MPCA oversight
costs on sites currently undergoing studies and remedial actions. The Agency has
experienced no resistance to this system.
The State has also been successful in securing federal Superfund monies. Currently,
MPCA has cooperative agreements with EPA which provide funds for work at fourteen
NPL sites. In addition, all of the PA/SI work is funded by federal dollars, and a CORE
grant funds several management positions in order to assist in program development. The
Agency is currently engaged in negotiations to secure federal funds for site-specific
enforcement activities.
Uses
The Fund may be used for emergency actions such as providing alternative drinking
water supplies, removals, CERCLA matching funds, investigations, studies and cleanups of
sites not eligible for CERCLA funding, activities related to restoring or replacing damaged
natural resources, and administrative and enforcement costs attributable to the superfund
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program." The state Fund may also be used to respond to releases at municipal landfills
permitted by the MPCA. The Agency has also used the Fund to respond at 250 sites of
arsenic contamination stemming primarily from the common use of arsenic as a pesticide in
the 1930s.
V. THE REMEDIATION PROCESS
Strategy
The MPCA has an enforcement-first bias that shapes the remediation process. The
Agency seeks to identify RPs as the site proceeds through PA/SI and is scored. The
Agency then moves quickly to issue a RFRA to the RPs and—if the site scores high
enough—to place it on the NPL. The Agency offers RPs the opportunity to sign a consent
order after the RFRA is issued. The possibility of using the Fund only comes into play in
emergencies, or in cases where it has become obvious that neither private or federal dollars
will be available for cleanup.18
Site Response Process
The MPCA may discover a potential site in a variety of ways, ranging from citizen
complaints to information from local government officials or other state agencies to
inquiries from industry or landowners seeking to transfer property. When a site is
identified as posing a threat to public health or the environment the Agency begins a
superfund process which closely parallels the federal routine. The standard administrative/
enforcement process described below may vary for emergencies like spills and explosions
that require immediate action, or if RPs come forward and are involved at the site at a
very early stage.
17. Minn. Stat. 115B.20 Subd.2.
18. The enforcement process is described in more detail in Obtaining RP Participation,
below, and in a flow chart prepared by the MPCA included as Figure MN-1.
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FIGURE MN-1
MPCA ADMINISTRATIVE/ENFORCEMENT
PROCESS UNDER MERLA
Site Discovery
Responsible Party
Search
Conduct
PA/SI
Conduct
ERS Scoring
List on PLP
Nominate NPL
Commissioner Issues Notice
of Intent to Recommend
RFRA and Solicits RP
Preference to Negotiate
Consent Order
MPCA Board Issues Request
for Response Action (RFRA)
YES
MPCA Board
Approval of Consent
Order
_y
Consent Order
Agreement Reached?
MPCA Staff
Monitors Cleanup
YES
NO
Responsible Party
Compliance with RFRA
NO
MPCA Board Determination That the
Response Actions will not be Taken
in the Manner and Time Requested
I
Litigation
Initiate Lawsuit to
Compel Performance
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I
Fund Financed
- State Project List
- Secure CA
- Task Contractor
- Oversee Contractor Activities
- Litigate for Cost Recovery
-------
PA/SI First, a "preliminary assessment" or PA is made. MPCA and other state
and private records are searched in an attempt to construct a history of the site's use, the
presence of known or alleged hazardous substances, and the potential impact on nearby
populations and the environment. As part of the site history, the Agency identifies any
potential RPs with connections to the site and/or the substances at the site.
The PA is followed by a more extensive on-site inspection, which the Agency calls
its "screening site inspection." This inspection may include limited testing of the soil, air,
and ground and surface water. A survey is taken to identify site structures, characteristics,
monitoring wells, sampling locations, drums, bulk tanks, and roads or other boundaries.
Nearby residential areas, public buildings, drinking water sources, and sensitive natural
resources are identified as potentially impacted areas. If owner or operator records have
been identified for the site, they are reviewed at this time.
Scoring and Listing After the screening site inspection, the Agency usually has a
good idea of how serious a problem the site poses. Staff will then conduct a more
thorough inspection of the extent of contamination. Typically more monitoring wells are
installed at this time. Data collected during this stage is used to score the site. The federal
Hazardous Ranking System is used with some small modifications to account for particular
conditions in Minnesota. If the site scores high enough it will be proposed as an addition
to the National Priority List (NPL). If not, it will be included on the state's Permanent
List of Priorities (NPL sites are also included on the PLP). The score reflects a relative
ranking of the actual or potential risk posed by the site and the Agency uses the ranking to
help determine what priority to give each site.
Early in the program, the Agency sometimes informally deferred proposing sites for
inclusion on the NPL as leverage for RPs to sign a consent order for the entire cleanup
action. More recently, however, EPA has slowed down its listing of sites on the NPL, so
this strategy is no longer viable.
Obtaining RP Participation The RP search continues throughout this process of
identifying and characterizing the hazards posed by a site. Thus, at the time of listing, the
Commissioner should know if there are any viable RPs and is able to issue a "Notice of
Intent to Recommend RFRA." This notice alerts the RPs that the Agency staff will be
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asking the MPCA Board to name them as RPs on the site and to issue a Request For
Remedial Action (RFRA) to the RPs. At the time of the Notice, the RPs are asked if they
intend to negotiate a consent order.
Following the Commissioner's Notice the RFRA is issued by the Board. The Board
must make the following five findings before issuing a RFRA: 1) that there is a facility;
2) that there is a release or threatened release into the environment; 3) that the release
involves hazardous substances, or pollutants or contaminants which present a danger to the
public health or the environment; 4) that the release is from the facility; and 5) that the
person to whom the request for response is directed is a responsible party. The RFRA
outlines in broad strokes the type of investigations needed at the site and directs the RPs to
undertake these investigations and the remedial actions that the MPCA determines are
necessary based on the investigations. It also establishes a schedule for these activities.
The Agency sets a deadline for the end of negotiations, usually 90 days, and
prepares to go to the Board for authorization to spend Fund money if there is no progress.
The Agency is willing to extend the deadline (there is no statutory deadline) if negotiations
appear to be progressing but will not let them drag on. Most of the negotiations are
completed within 4 months. Regardless of whether the parties sign a consent order, the
Agency issues a RFRA (if one has not already been issued). If the RPs do not sign a
consent order the MPCA offers them the option of complying with the RFRA or having
the state contract for the work and recover the cost later. About half of the RPs comply
with the RFRA without signing a consent order, particularly when the RFRA covers the
RI/FS.
While the RP community has traditionally been cooperative in Minnesota, the
Agency has noted an increasing trend away from signing consent agreements at the RFRA
stage. Possibly to bolster their claims against their insurance companies, the RPs are now
more likely to wait for the formal issuance of a RFRA to act on a site. This may also be
due to the agency's insistence that any consent agreement include a commitment from the
RP to take all response actions that the agency determines are necessary. Instead of
signing a "blank check" at the beginning of the process, the RPs are doing the RI/FS under
the RFRA and then signing Consent Agreements for the Remedial Action after the remedy
is chosen when they have a better idea of the projected costs.
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In the few cases where RPs fail to comply with the RFRA, or fail to negotiate after
the RFRA, the Agency returns to the Board for a Determination of Inadequate Response.
At that time, the Board usually grants the Agency the power to fund-finance the cleanup or
to litigate to compel action. Generally, the Board will authorize the MPCA to pursue any
of its options.19 Since the Board meets each month the Agency is generally able to obtain
authorization to act without significant delay.
Liability is rarely contested by RPs. This may be because the liability standard in
the statute is clear and there are no significant unsettled legal issues. It is more likely that
the types of sites found in Minnesota, i.e. industrial sites where a single company (or very
few) disposed of wastes, mean that it is relatively easy for the agency to find the RPs and
tie them to the site with solid evidence.
The Agency avoids apportionment issues. MPCA officials insist that since RPs are
jointly and severally liable to the State it is the responsibility of the RPs to decide among
themselves how much each will pay. The staff notes that the state has no knowledge,
expertise or interest in the art of allocating liability shares.20 In fact, the MPCA refuses to
negotiate with all of the RPs at sites where there are more than 3-5 RPs. The state insists
that the RPs form a negotiating committee and the MPCA deals with the committee.21
On the other hand, if only one RP wishes to negotiate the MPCA is willing to do
so and does not actively attempt to draw other RPs into the negotiations. The Agency
does name all the known RPs in the RFRA and makes other records available but leaves it
to the RPs to bring other RPs to the table.
On a related issue, the State has an absolute policy against mixed funding. The
Agency's position is that mixed funding is inconsistent with the concept of joint and
19. Apparently the only exception is when the defendants are small ("Mom & Pop")
businesses, which the Board is reluctant to pursue.
20. The statute supports the Agency's position in that it provides that RPs are entitled to
have the trier of fact apportion liability after the RPs are held jointly and severally liable
to the state. Even then the burden is on the RP seeking apportionment to show how
liability should be apportioned. Minn. Stat. 115B.08 Subd. 1.
21. The MPCA will make all of its files available to all the RPs to facilitate their
internal negotiations on cost shares.
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several liability to the State. If EPA agrees to mixed funding at a site the MPCA will
withdraw from joint negotiations and refuse to be a party to the settlement.
Points of contention in negotiations include the scope of studies and cleanup,
covenants not to sue, stipulated penalties, and the determination of facts. RPs are
particularly anxious to make the Determination of Facts section of a Consent Agreement as
vague or general as possible because they fear plaintiffs will use those Determinations in
toxic tort suits.
Typical Site Timeline The preliminary work by MPCA-the preliminary assessment
and investigation, RP search, RFRA, and consent order-takes an estimated 3-6 months to
complete, though this may vary greatly from site to site. After that the cleanup process
goes through the same five steps as at the federal level. For fund-financed sites the
Remedial Investigation (RI) generally takes 12-24 months and costs anywhere between
$5Q,000-$750,000. The Agency is currently pursuing the possibility of developing in-house
(as opposed to outside contractors) capability for conducting fund-financed RIs. It believes
this would streamline the process, saving both time and money, and produce more reliable
information.
The Feasibility Study (FS) draws on the information collected in the RI to consider
a variety of cleanup alternatives. The Agency believes that it should move towards more
generic types of FSs. The experience of the past 6 years has convinced the MPCA that
certain types of sites, large solid waste landfills, for example, will always require certain
types of remedies. It believes the time and money saved would outweigh the potential
drawbacks of such generic studies. Currently, an FS lasts from 3-6 months and costs
$25,000-250,000.
The Remedial Design (RD) takes 6-12 months and costs $30,000-300,000. At this
stage specific engineering plans and specifications are prepared for the Remedial Action
(RA). The final cleanup actions are taking between 12 and 24 months to complete on
average and may cost between $1 and $10 million. After the RA is completed an
additional 30 years or more of long-term monitoring and maintenance may be required.
This may cost an additional $5,000-$50,000 per year.22
22. All of these cost and time figures reflect the average range. Costs and time frames
vary considerably depending on the conditions at a given site.
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Public Participation Throughout the Superfund Process
MERLA does not place any specific requirements on the Agency regarding public
participation. However, before the Agency may take major actions-such as issuing a
RFRA-it must present the action before the MPCA Board in a public meeting. At this
time, the public and other affected parties may ask questions and present testimony on the
action. In addition to this procedure, the Agency is committed to keeping interested local
officials, residents, environmental groups, RPs and the media informed about important
milestones at sites and encouraging public participation in decisions made by the Agency.
Each superfund site in the state is assigned a Public Information Officer (PIO) as
part of the site team. The PIO manages the public relations on the site, employing a
variety of techniques to inform the public and local officials. These range from telephone
calls, to more formal methods like letters, briefings, community meetings, news releases,
and more formal opportunities for comment The Agency has also released a series of
"Fact Sheets" on the Superfund program and the Superfund landfill program which contain
a clear overview of various aspects of the program to the public.23
Among the opportunities for public participation that the MPCA provides that go
beyond the statutory mandates are a series of public notices and meetings at various stages
of the process. The Agency has established procedures for notifying the public at sites
where contaminants have exceeded the Minnesota Department of Health's maximum
allowable limits, or if MDH issues a health advisory. Similarly, when the Agency
proposes sites for inclusion on the NPL or on the state's PLP, it requests public comments
from surrounding communities. A public meeting is held when a cleanup plan (or Record
of Decision) has been developed for a given site to allow for public comment on the plan.
The Agency also has procedures for notifying and explaining actions to the public when
other significant points in the process have been reached.
RP Participation: Two Contributing Factors
Many factors contribute to the Agency's success in securing RP compliance. The
state's strong "environmental ethic" seems to affect the State's larger corporations. The
Agency's consistency of application of the program has "educated" the RPs. They
23. Sample Fact Sheets are attached as an appendix to this chapter.
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understand their responsibilities under MERLA and know that the Agency will hold them
to those duties. Two additional factors which seem to contribute to the Agency's success
are the low number of RPs on each site and the state's cleanup standards.
MPCA personnel stated that sites generally have fewer than five RPs and most often
there is one RP who is primarily responsible for the site. This may be due in part to a
1972 ban on disposal of hazardous wastes in landfills. This ban led to the on-site disposal
of most hazardous wastes, which makes identification of RPs and establishing liability a
relatively simple task. Thus, as a member of the State's AG's office explained, liability is
rarely a contested issue, and the state never gets involved in apportionment issues.
Cleanup Standards
The issue that often is contested is the scope of cleanup. On th6 one hand,
Minnesota's 10(-5) risk standard as opposed to the federal starting point of 10(-6^* may
allow for less expensive remedies, though no statistics are available to support this thesis.
On the other hand, the Agency has made an effort to promulgate clear standards and
methods for making the complicated site-specific decisions about cleanup levels.
MERLA does not require that specific cleanup standards be met, but the MPCA has
adopted an ARARs-type system of applying various state standards. The Minnesota Health
Department has set health-based Recommended Allowable Limits (RALs) for many
chemicals and where these exist the remedy must achieve them. The Health Department
uses whatever scientific evidence is available and, like the MPCA, uses a 10(-5) risk
factor. The State has RALs for more chemicals than MCLs or MCLGs. The state also has
a non-degradation policy that all remedies must satisfy. In the absence of such standards,
the Agency applies a 10(-5) cancer-risk-based approach.
According to Agency officials, the RPs understand and accept these standards. To
help RPs apply these standards, the Agency is developing guidance on determining site-
specific groundwater cleanup goals that will be consistent with the overall state
groundwater protection strategy and with EPA policies. These will be followed with
similar guidelines for soil contamination.
24. EPA has not established 10"6 as a firm standard, using a risk range of 10"4 - 10'7,
but the point of departure is 10"6. Furthermore, Project Managers in the states and EPA
regional offices informally treat KX6 as the "EPA standard" absent special circumstances.
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The Exceptional Cases
Every program has problematic sites, and the MPCA is no different MPCA staff
repeatedly cited two cases as representative of the worst problems-Arrowhead and Waste
Disposal Engineering (WDE). In the view of State staff, the common element to both sites
was EPA involvement. At WDE, when EPA became involved the negotiations ground to a
halt and the RPs are now seeking a mixed funding agreement. The state feels EPA
involvement slowed things down tremendously and it is refusing to sign off on the mixed
funding agreement. EPA determined that the second site should be a federal fund-lead site
and the MPCA staff involved were not very aggressive in following the site's progress.
The RI took three years, and then a ROD was hastily written at the end of the fiscal
year^-without an FS. The state refused to sign off on the ROD. Now, the state has the
lead again and it has discovered that there are many RPs at the site, including some deep
pockets.
The State attributes many of the problems it has observed at these two sites to EPA
inaction. The State staff believe that EPA 'sits' on the paperwork and thus holds up action.
The State also believes that it can oversee contractors more effectively than can EPA and
thus get better and faster products, particularly RI/FSs. State staff point to their ability to
drop contractors from the approved list and the fact that they have done so in one case as
evidence of their ability to obtain better work from contractors.
VL SPECIAL TOPICS
Municipal Landfills
The MPCA has identified municipal landfills as a key upcoming problem in their
program. In 1983 the Agency began testing landfills for volatile organic compound
(VOCs) contamination in surrounding ground water. The landfills tested positive almost
100% of the time. Currently, 54 of the 158 sites on the PLP are permitted landfills, and
the Agency predicts this number will eventually rise to about 100.
25. "To get a 'bean'" according to MPCA staff. No attempt has been made to verify or
otherwise investigate this type of anecdotal information because its importance lies not in
whether it is "true" or "false" in an absolute sense, but in the fact that the speaker believes
it to be true.
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Recently the legislature capped municipal liability for response actions at a given
site at $400,000, not including long term maintenance and operation which the municipality
will be required to fund. In the FY 88 annual report to the legislature, the Agency
predicted that under such a liability cap the state-funded share of the liability for response
actions at 20 municipal landfills would be nearly $100 million over the next six years.
Clearly, the existing Fund cannot support such a burden. In order to secure federal
funding, the Agency is trying to get as many landfills onto the NPL as possible. However,
a slowdown in additions to the NPL, as well as the typically lower scores of landfills, will
prevent this from solving much of the problem. Staff at the MPCA predict that the
legislature will be forced to provide a new funding source to handle this problem. Since
the legislature has not begun to study this problem, the nature and form of such a funding
source, or even whether one will be enacted at all, is pure speculation at this time.
Voluntary Property Transfer Review Program
In response to requests from the business community, the state legislature authorized
the Agency to establish a voluntary property transfer review program under the auspices of
the superfund program. Begun in 1985, the program has responded to over 1000 file
search requests and provided investigation and cleanup assistance at 30 sites. They plan to
handle over 800 requests in FY 89 and as many as 1000 requests per year by 1991.
In 1988 the legislature authorized 6 new positions to be funded by the state Fund
exclusively for the purpose of handling voluntary requests for file searches prior to
property transfer in the state. The clients of the program are billed for the service in order
to protect the integrity of the Fund.
VIL PROGRAM OUTLOOK
Minnesota has a mature superfund program that is making steady progress in cleaning
up its known sites. The Minnesota Pollution Control Agency is making effective use of its
limited resources. A number of remedial actions have been completed and the sites
delisted from the State's PLP while many others are in the operation and maintenance
phase. Responsible actions have been taken at approximately 2/3 of the sites on the PLP.
The State has been successful in obtaining commitments from RPs to conduct the work on
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the large majority of the sites. The Agency is also aggressive in pursuing cost recovery
when it conducts a Fund-financed response action and has been relatively successful in
recovering its costs.
One significant problem area for Minnesota is the cleanup of the many municipal
landfills that are releasing hazardous substances. To date virtually every municipal landfill
that the MPCA has tested appears to be releasing VOCs. One-third of the sites on the
current PLP are municipal landfills and the MPCA expects the total number to double.
With the recently enacted $400,000 cap on municipalities' liability for capital costs the
projected cleanup costs for these sites will overwhelm the Fund. The current Fund balance
could be consumed by just 3-5 such sites and the existing generator tax generates far too
little money to replenish the Fund or pay for even a few such cleanups. In fact, the
magnitude of the potential costs for municipal landfill cleanups is far greater than the scope
of the current program. The legislature has yet to fact the issue of how to provide for
these enormous costs but Agency officials hope that it will begin to consider these issues
in the next biennium.
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APPENDIX:
Sample Fact Sheets
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Minnesota Superfund
Minnesota's Superfund Program
Minnesota Pollution Control Agency
Fact Sheet #1
Minnesota's Superfund
program addresses
cleanup at a variety of
sites, including industrial
facilities, former dump
sites, sites with municipal
or private well
contamination arid ,
sanitary landfills.
This series of faet sheets ,
was developed as a
general explanation of
the Minnesota Superfund
program. A more '
specific set of fact sheets
addresses Superfund
landfills.
The public knows it as
"Superfund" — the fund and
program established by the
Minnesota Legislature in 1983 to
address hazardous waste sites
where contamination threatens
the public health or the
environment. The Minnesota
Environmental Response and
Liability Act (MERLA),
Minnesota's Superfund law,
gives the Minnesota Pollution
Control Agency (MPCA) the
authority to request responsible
parties to undertake cleanup or
to take action at sites where
those responsible for the
contamination are unknown,
unable or unwilling to undertake
cleanup activities.
Why was the Minnesota
Superfund established?
The federal Superfund,
established by Congress in 1980,
provided funds to address sites
where hazardous wastes posed a
threat or potential threat to
public health and the
environment. Competition
among states for those federal
Superfund dollars restricted the
amount that Minnesota could
receive. State matching funds
were also required at federally
funded sites, and Minnesota had
no fund specifically designated
for these cleanups.
By 1983, the MPCA had
discovered more than 60
locations throughout the state
where cleanup was needed. At
some sites drinking-water
supplies had become
contaminated. Often, the
companies or persons
responsible for the waste
problems were not willing or
able to clean up the sites, and the
state had no funds — or
authority — to undertake
cleanup.
The Minnesota Legislature
addressed the problem by
establishing the state Superfund
law. The law established the
MPCA's authority to require
responsible parties to undertake
cleanup of sites or to use
Minnesota's Superfund if
responsible parties could not or
would not undertake cleanup. It
also provides the state with the
option to recover cleanup costs
later from responsible parties.
The legislature originally
appropriated $5 million to
support the fund. The fund is
replenished by a tax on
generators of hazardous wastes
and by responsible party
reimbursement of MPCA costs.
Printed on recycled paper
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How is state Superfund money
used?
Minnesota Superfund money can
be used only for those situations
specified in the law. These
include:
^ emergency actions, such as
providing alternate drinking
water supplies or conducting
removal of contaminants at sites
which present an immediate
danger to the public.
^ state matching funds
required by the federal
Superfund program for cleanup
actions at federally funded sites.
4 investigation and cleanup at
sites that are not eligible for
federal Superfund dollars and
where responsible parties are
unknown, unwilling to conduct a
cleanup or unable to pay for a
cleanup.
+ administration of Superfund
site cleanups by MPCA staff,
including discovering sites of
possible contamination,
identifying responsible parties,
exerting authority to bring
responsible parties into the
cleanup process, and working
with the U. S. Environmental
Protection Agency, responsible
parties, local governments and
the public to assure prompt,
effective cleanup.
How does the Superfund
work?
The Superfund process begins
when a site is discovered and is
determined to pose a threat or
potential threat to public health
and the environment. A Hazard
Ranking System (HRS) score is
calculated for each site before it
is proposed for the state
Superfund list. Generally, a site
with a higher HRS score is a
higher cleanup priority than one
with a lower score. At the same
time, the MPCA staff searches
for responsible parties.
Known responsible parties then
receive a Commissioner's Notice
stating that the MPCA intends to
formally identify the responsible
parties and asking such parties if
they plan to negotiate an
agreement. Next, a formal
request for cleanup, called a
Request for Response Action
(RFRA) is issued by the MPCA
Citizens Board.
This formal request specifies the
work the MPCA deems
necessary to correct the problem
and sets a timetable for the work
to be done. The RFRA may
become the starting point for
negotiations among the MPCA
and responsible parties. If
negotiations are successful, the
MPCA and the responsible
parties agree to a Consent Order,
The 5 Superfund
Cleanup Steps
Hie de&iup process has five
steps:
Remedial Investigation (RI),
it study-to define the sources
0f COHtamiflation, the extent
ofthfc problem and the '
;jjathways of the contaminants
is. the soil and ground water.
Feasibility Study (FS), a
study of the possible options
to clean op the contamination.
Remedia) Design (RD), the
engiiiberiag or othetf laas to
carry otrt tfee selected remedy.
Remedial Action (RA),
implementing the chosen
cleanup remedy.
Long Term Monitoring and
Maintenance assures that the
a legal agreement on what
actions the responsible parties
will take to clean up the site.
The MPCA oversees the
responsible parties' cleanup to
assure that it meets state and
federal standards. If negotiations
are not successful, the MPCA is
authorized to use state Superfund
to conduct cleanup activities and
attempt to recover costs later.
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How effective is the Minnesota
Superfund in cleaning up
hazardous waste sites?
More than 150 sites are listed on
the state Permanent List of
Priorities (PLP), the Superfund
list of sites which are a state
priority for cleanup. Forty of
these sites are also listed on the
National Priorities List (NPL), the
federal Superfund list.
Of these, 117 are in some stage of
the Superfund cleanup process.
And after MPCA enforcement
actions, more than 87 of 117 are
being addressed by the party
responsible for the release of the
hazardous substance. Final
cleanup actions have been
completed or are ongoing at
almost 40 of the 117 sites.
The Minnesota Superfund's
success may be the result of the
program's emphasis on
responsible party cleanups. The
law provides and MPCA has
implemented the program with
the philosophy that those
responsible for contamination of a
site are also responsible for
cleaning it up.
Bringing responsible parties into
the process has been a focus of
the Minnesota Superfund
program. MPCA staff estimate
that more than $140 million has
been spent by responsible parties
on cleanup activities since the law
was enacted.
What may happen to the
Superfund program in the
future?
The important job of addressing
hazardous waste sites in
Minnesota continues — MPCA
staff predicts the addition of up
to 50 new sites by the end of
1991.
The Superfund program will
continue to emphasize
responsible party cleanups and
bring responsible parties into the
process through negotiation or
enforcement. The program may
also need to focus on completing
cleanups already in the five-step
process instead of starting new
cleanups. Landfills where
contamination has been
discovered will also prove to be
a challenge for the Superfund
program, because of limits in the
law on the cost a local
government must pay for
cleanup.
How can I find out more about
Minnesota Superfund?
The MPCA has prepared a series
of fact sheets with details about
various aspects of the Superfund
program. A specific set has been
prepared addressing landfill
sites. The topics covered
include:
+ Superfund Program
Organization
* The Superfund List and HRS
Score
+ Responsible Parties
4 The Superfund Cleanup
Process
+ Community Relations
+ Property Transfer Assistance
4 Status of the Fund
+ Glossary of Terms, Initials
and Acronyms
For more information on any of
these fact sheets, contact the
Minnesota Pollution Control
Agency at (612) 296-6300 or
call toll-free at 1-800-652-9747.
5-1-89
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Minnesota Superfund
Superfund Program Organizatior
Minnesota Pollution Control Agency
Fact Sheet #2 :
Minne$ota'$ Superfund
program addresses ;
cleanup at a^ariety of
sites, including industrial
facilities* former dump
sites, sites with municipal
•This «eiies of fact sheets ":
wa^ developed as & ' *-'
- general explanation of the
;pro|raia. A a^ore specific
How is the MPCA's Superfund
Program organized?
Superfund activities are carried
out by the MPCA's Division of
Ground Water and Solid Waste
with technical support from
other divisions in the agency.
Including all Superfund sites
within this division allows for
consistent management of sites
across the program and the
flexibility necessary in dealing
with different types of sites.
Staff in three sections of the
Ground Water and Solid Waste
Division are responsible for
different aspects of the
Superfund Program:
4 The Program Development
Section performs preliminary
assessments of hazardous waste
sites, scores the sites according
to the Hazard Ranking System
(HRS), updates the State
Superfund priorities list and
assists with limited property
transfer activities.
4 The Site Response Section
works with "traditional"
Superfund sites, usually
industrial or former dump sites
where past improper handling or
disposal of hazardous substances
has caused soil and/or ground
water contamination.
*• The Solid Waste Section
addresses soil and ground water
contamination at sanitary
landfills on the Superfund list.
How is the Program
Development Section
organized?
Program Development is divided
into three units — Site
Assessment, Rules and Training,
and Ground Water. The Site
Assessment Unit is involved
with Minnesota Superfund in
two respects. Staff in the unit
assess sites and score them
according to the federal HRS.
Site Assessment also provides
file evaluations for Property
Transfer Assistance, a service
for individuals and businesses
seeking an assessment of
possible hazardous waste
problems on property that they
are trying to buy or sell.
How is the Site Response
Section organized?
Site Response is divided into
three units — Responsible Par
I, Responsible Party n and
Superfund. The first two unit?
generally address sites where
parties responsible for the
Printed on recycled paper 81
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Water Quality Hazardous
Division Waste Division
Commissioner
Ground Water and
Solid Waste Division
Air Quality Regions
Division
Site Response
Section
Solid Waste
Section
Program
Development
Section
contamination arc either known
or suspected. Many of the sites
handled by the responsible party
units are being cleaned up by the
responsible parties under the
direct supervision of MPCA
staff. Others are undergoing
cleanup as part of an
investigation prior to property
transfer.
The Superfund Unit generally
addresses sites where the
responsible parties are unknown,
unable or unwilling to conduct
cleanup activities. State or
federal Superfund money is
necessary to conduct cleanups at
these sites.
How is the Solid Waste Section
organized?
Solid Waste Section is also
divided into three units —
Permits, Enforcement and
Superfund. Sites funded by state
and federal Superfund are
managed within the Superfund
unit, while those being
conducted by responsible parties
are managed by staff in both the
Superfund and Enforcement
Units. Parties responsible for
contamination at sanitary
landfills sometimes include
some unit of local government
which once owned or operated
the landfill.
Permits Unit engineering staff
generally review plans for
landfill designs, expansions and
closures, as well as landfill
permits. In many cases,
completion of the Superfund
investigation and study of
cleanup alternatives will be
required to assure that the
expansion is consistent with
proposed cleanup actions.
Because of this, Permits staff
frequently work with Superfund
issues, and they are included on
Superfund project teams to
review engineering plans,
such as final landfill cover
designs.
How are staff assigned to a
Superfund site?
Once a site is placed on the
Superfund list, it is assigned to a
team of MPCA staff. The team
approach allows staff members
to concentrate on their areas of
expertise. Since individual
members are included on several
different site teams, they can
apply their knowledge of one
site to address similar situations
at other sites, promoting
consistency in the MPCA's
approach. The team approach
also assures that the site cleanup
will move forward even if staff
changes should occur.
82
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s
f*
Permits
Unit
iolid Waste Section
x^ \
Enforcement
Unit
k^
Superfund
Unit
V T T
Landfill Permits State Superfund Federal Superfund
Landfills Landfills
Engineering Review Enforcement at State Superfund
for Superfund Operating Landfills
Landfills
Sil
Responsible Party
Unit 1
1
fe Response Sectio
> \
Responsible Party
Unit II
n !
t.
Superfund
Unit
Any other questions on
Superfund program staff?
For more information about
program staff, call the MPCA at
(612) 296-6300 or toll-free at 1-
800-652-9747. Fact sheets like
this one are also available about
other aspects of Minnesota
Superfund.
5-1-89
Each site team consists of:
4 the Project Manager, who
serves as general coordinator,
manages project budgets,
ensures that schedules are met
and serves as first point of
contact for information on an
assigned Superfund site.
* the Technical Analyst, usually
a ground water hydrogeologist,
who reviews technical ground
water and soil data.
^ the On-site Inspector, who
oversees field work to ensure
that it is done correctly.
^ the Information Officer, who
answers questions from the
public and news media.
4 an Attorney from the
Attorney General's Office.
On federal Superfund sites, the
U.S. Environmental Protection
Agency may also have a team of
staff working on the site.
83
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Minnesota Superfund
The Superfund List and MRS Score
Minnesota Pollution Control Agency
Fact Sheet #3
Minnesota's Superfund
program addresses ,
cleanup at a variety of
sites, including
industrial facilities,
former dump sites* sites
with municipal or
private well
contaniiaattori and
saniiaiy landfills,
, Tnfe series o£&ct sheets.
was developed asa; ''-:
general explanation of
#ie Minnesota
Superfund program, A ,
more specific set of fact.
sheets addresses \
Superfund landfills.
What is the State Superfund
List?
Minnesota's Superfund List,
called the Permanent List of
Priorities (PLP), is made up of
sites throughout the state that
require further investigation of
contamination, as well as
possible cleanup under the
Superfund Program. Sites on the
list are eligible for expenditure of
state Superfund dollars for
investigation and cleanup if no
responsible parties can or will
undertake necessary actions.
The PLP is updated at least once
a year by formal action of the
MPCA's nine-member Citizens
Board, following a public
comment period on the proposed
changes to the list. Changes
include adding new sites to the
PLP, revising descriptions,
making class changes and
removing sites from the list. The
PLP listing contains a brief
description of the problems and
actions taken at each site, actions
needed and the Hazard Ranking
System (HRS) score.
How is a site proposed for the
PLP?
A site can be brought to the
attention of the MPCA in a
variety of ways — hot-line
complaints, citizen calls,
observations by MPCA staff or
local government officials or
information from other state
agencies. Sites are also entered
into the U.S. Environmental
Protection Agency (EPA)
Comprehensive Environmental
Response, Compensation and
Liability Information System
(CERCLIS), a data bank of all
potential or actual hazardous
waste sites nationwide. Most
sites then undergo a site
assessment process.
There are four steps to site
assessment of a potential
hazardous waste site:
+ Preliminary Assessment
involves a site history and a
record search for information
about use of the site, known or
alleged hazardous substances
present, and the potential effects
of the contamination on nearby
populations and the
environment.
4 Screening Site Inspection
includes limited testing of
ground water, surface water, soil
or air; a survey to document site
structures, characteristics,
monitoring wells, sampling
locations, drums, bulk tanks,
.^^_^ 84
Printed on recycled paper
-------
roads and boundaries;
documentation of potentially
affected homes, public buildings,
drinking water wells or nature
areas; and a review of the site
owner or operator's records.
4 Listing Site Inspection is
conducted on a site that is a
candidate for the EPA's priority
list, the National Priorities List
(NPL). More data is collected
and, typically, monitoring wells
are installed.
+ Hazard Ranking System
Scoring takes place if
preliminary investigations verify
a threat or potential threat to
human health or the
environment.
Although all these steps may not
be taken for every site, many
sites undergo this process before
being placed on the PLP or NPL.
During these stages, the MPCA
is also performing a search for
responsible parties.
What is the Hazard Ranking
System (HRS) score?
The HRS score was developed
for use by the EPA in the federal
Superfund program. Minnesota
adopted the scoring system for
its Superfund list in order to be
consistent with EPA's program.
The score received by each site
provides a relative ranking of the
actual or potential risk that the
site poses to public health or the
Site
Assessment
CERCLIS
Preliminary Assessment
T
Screening Site Inspection
T
{Listing Site Inspection}
HRS Score
environment. It is a system that
the MPCA can use to compare
the general risk of one site to
another. This system allows the
MPCA to set priorities for
working on sites on the list.
The scoring system uses a
mathematical model to
determine the actual or potential
risk. The model takes into
account a number of factors,
including:
^ how hazardous the chemicals
or contaminants are.
4 whether drinking water
supplies are affected or could
become affected.
^ the estimated quantity of
hazardous substances present.
4 the size of the population at
risk.
+ the potential for direct
human contact.
+ whether sensitive
environmental systems, such as
wetlands or endangered species,
could be destroyed or adversely
affected.
Using the mathematical model
with these factors and several
others, a score of 1 to 100 is
established for each site.
Generally, sites with higher
degrees of risk should have
higher HRS scores.
85
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Does this system accurately
indicate the risk posed by a
site?
Because of some of the factors
considered in computing the
HRS score, it may reflect the
potential risk of a site rather than
the actual risk. A new scoring
system is currently being
developed by the EPA which
may make HRS scores a more
accurate reflection of actual risks
from the site.
Does work begin immediately
after a site is added to the
PLP?
In some cases, work on the site
may have begun long before the
site is added to the PLP because
a responsible party has been
encouraged to move quickly. In
other cases, a site with a low
score may not be addressed until
long after its initial listing
because of limited MPCA staff
or Superfund resources.
However, because the list is
updated once a year, sites are
reassessed annually to assure
that they will be addressed as
soon as MPCA staff resources
allow.
How are responsible parties
informed when MPCA
proposes a site for the PLP?
During the site assessment
process when responsible parties
are being sought, the responsible
party will often be working with
the MPCA to provide records or
other information about the site.
But formal notification at typical
sites occurs when the site is
proposed for the PLP. Notices
of proposed additions, deletions
and class changes are published
in the State Register and a call
or letter will go out to the
responsible party. News releases
are also sent out to assure that
affected communities are aware
of the proposed change.
A 30-day comment period
follows, which provides the
responsible party and the public
with the opportunity to comment
on the listing, the score or other
aspects of the site description.
MPCA staff addresses all
comments and may make
changes in response to new
information received.
What about the federal
Superfund list?
The National Priorities List
serves the same purpose as the
PLP, but is limited to sites with
HRS scores of 28.5 or greater.
The federal list is updated
periodically and contains more
than 1,100 sites.
Minnesota has 40 sites on the
NPL and nominates appropriate
sites whenever an update occurs.
Sites are proposed in the
Federal Register and a public
comment period is held. The
EPA carefully reviews the
nominated sites and decides
whether to include them on the
list. Once Minnesota sites are on
the NPL, they are eligible for
federal Superfund money.
Where can I get more
information about the PLP
and HRS scoring?
For more information on the
PLP and HRS scoring, contact
the MPCA at (612) 296-6300 or
call toll-free at 1-800-652-9747.
Fact sheets are also available
about other aspects of Minnesota
Superfund.
5-1-89
86
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Minnesota Superfund
Responsible Parties
Minnesota Pollution Control Agency
Fad Sheet #4
^ ^v
Minnesota's Sttpeifutid
program addresses ^
Cleanup at a variety of -'
'sites, imltidmg Mistrial
facilities, former dump
sites, sites with municipal
;or$Vivate well * , ** ^
'cohtammatiou and ,
sanitary landfills, /
tftis* series of fact sheets
was developed as a ;
general explanation of the
Minnesota Superfuud
program. A mote specific
set of fact sheets ,; '.
landfills,
Who can be a responsible
party at a Superfund site?
The term "responsible party"
refers to the person, business or
unit of government responsible
for the release or threatened
release of a hazardous substance,
pollutant or contaminant at a
site. The state and federal
Superfund laws specify certain
activities which make a party
responsible for contamination.
These include:
4 owners of sites where
hazardous substances have been
released.
4 operators (or their
successors) of facilities where
hazardous substances have been
released.
4 haulers of hazardous
substances who selected the
facility for disposal.
4 generators of hazardous
substances released.
• individuals or businesses
who improperly stored
hazardous substances or
arranged for disposal elsewhere.
4 businesses which used an
area for disposal of hazardous
substances.
Some Superfund sites have a
large number of responsible
parties associated with them. At
others, the responsible parties
have not yet been identified.
How are responsible parties
identified?
Minnesota Pollution Control
Agency (MPCA) staff conduct a
responsible party search by
reviewing MPCA files,
documents and records and
interviewing people with
knowledge about the site's
history. Staff also request
relevant information from
owners, operators, transporters
and others associated with the
site in a letter called a Request
for Information (RFI). From this
information, MPCA staff make a
preliminary determination about
who is responsible.
Does the federal Superfund
identify responsible parties in
the same way?
Responsible parties under the
federal Superfund program are
Printed on recycled paper
87
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MPCA Administrative/Enforcement Process under MERLA
Site Discovery
Search
Conduct
*A/SI
Conduct
MRS Scoring
.. list oil PIP
NomrnafeKPt
1
Commissioner Issues Notice
of Intent to Recommend RFRA
and Solicits RP Preference
to Negotiate Consent Order
MPCA Board
issues Request
for Response Action
Yes
Consent Order
Agreement Reached
No
MPCA Board Approved
of Consettf Order?;
MPCAStafJ;
MonHorsOeanup
Yes
Responsible Party
Compliance with RPRA
No
MPCA Board Determination
that the Response Actions
will not be Taken in the Manner
and Time Requested
Initiate Lawsuit
to Compel
Performance
- State Project List
- Secure Federal Funds
- Task Contractor
- Oversee Contractor
Activities
- Litigate for
Cost Recovery
-------
called potentially responsible
parties (PRPs), and the EPA's
method of notifying a
responsible party is different
from the state's. But the
definitions of the types of
activities which make an
individual or business
responsible for cleanup are
similar.
What happens after staff have
identified responsible parties?
Under established procedure, the
MPCA staff will issue a
Commissioner's Notice. This
formal notice informs
individuals or businesses that a
recommendation will be made to
the Citizens Board to name them
as responsible parties. The
Notice requests information on
whether the responsible party
intends to negotiate an
agreement with the agency.
Following the Commissioner's
Notice, the MPCA issues a
Request for Response Action
(RFRA). This is a formal action
by the MPCA Citizens Board
that identifies the companies,
unit of government or
individuals responsible for
contamination at a site. The
RFRA sets forth the actions that
are necessary to investigate and
clean up a site. It also sets a
schedule for cleanup of the site.
Being issued a Commissioner's
Notice does not mean that the
responsible parties are avoiding
their cleanup responsibilities.
Often, these notices are issued
even though responsible parties
have already begun to
investigate or clean up the site.
RJFRAs are issued by the
Citizens Board under authority
of the state Superfund law. The
Board must make five findings
before issuing the RFRA: there
is a facility; there is a release or
threatened release into the
environment; the release
involves hazardous substances,
pollutants or contaminants which
present a danger to the public
health or the environment; the
release is from the facility; and
the person to whom the
requested response is directed is
a responsible party.
What happens next?
If responsible parties are willing
to conduct the cleanup — either
under the Consent Order or a
RFRA — the cleanup process
proceeds. If responsible parties
are unwilling or unable to take
action, the MPCA Citizens
Board can issue a determination
that the responsible parties have
not adequately responded in the
time and manner requested by
the MPCA to the RFRA.
The MPCA can then use state
Superfund money to conduct the
cleanup actions. Under the law,
federal or state money spent on
cleanups can be recovered from
responsible parties through legal
action. Alternately, the MPCA
may decide to bring legal action
against responsible parties to
compel them to clean up a site.
How successful is the MPCA in
working with responsible
party sites?
Responsible parties are
undertaking or have completed
cleanups under MPCA
supervision at more than 70 sites
in Minnesota. Minnesota is seen
as a model for other states
because of its emphasis on
responsible party cleanups.
How can I find out more about
responsible parties under
Minnesota Superfund?
For more information about
responsible parties, call the
MPCA at (612) 296-6300 or toll-
free at 1-800-652-9747. Fact
sheets are available on other
aspects of Minnesota Superfund.
5-1-89
89
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Minnesota Superfund
The Superfund Cleanup Process
Minnesota Pollution Control Agency
Fact Sheet #5
Minnesota's
program addresses
cleanup at a variety of
sites, including industrial
facilities* former dump
sites, sites witli municipal
or private well
contamination and
sanitary landfills,
This series of fact sfceets
was developed as a
general explanation of the
Minnesota Superfund
program, A more specific
set of fact sheets
addresses Superfund
landfills;
How does the Superfund
cleanup process work?
Once a site is added to the
Superfund list, has a site team
assigned, and is a priority for
action there are five steps to the
cleanup process. The MPCA
has estimated approximately
how much time each step takes
and how much certain stages
cost. (See diagram page two.)
But it must be remembered that
each site presents its own
unique problems. Some require
more extensive investigation,
some a more expensive remedy.
Step One: The Remedial
Investigation (RI)
The purpose of the RI is to
study ground water, surface
water, soil and/or air which may
be affected by the
contamination. The RI will
provide MPCA staff with
information about what
contaminants are present and in
what quantities; the extent of the
contamination; how
contaminants could travel off
the site or affect the nearby
populations or environment;
what risk is posed to nearby
communities from the
contaminants; and how
contaminants are affecting the
ground water underneath the
site.
The responsible party usually
hires consultants to conduct the
RI, with reports submitted to the
MPCA for review and approval.
At sites where no responsible
party has been identified or
responsible parties are unwilling
or unable to conduct
investigations, the MPCA hires
consultants to conduct the RI.
Among the activities that may
take place during an RI are
sampling of ground water,
surface water, soil or air or tests
to determine whether
contaminants are moving from
one layer of ground water to a
different ground water layer.
Often these investigations are
performed over time through a
phased approach. For example,
a limited number of carefully
placed ground water monitoring
wells could be installed and
sampled. Based on the data
gathered, the MPCA might
require installation of more
Printed on recycled paper
90
-------
ftelrninary Work by MPCA
Responsible forty Search,
&BA. Consent Order
3-6 months
The Superfund Cleanup process, with MPCA estimates of
cost and length of time to complete. These are estimates
only - time and cost will vary with each site.
Investigation
12-24 months
$50,000 - 750,000
>
Stodyer
,- Cleanup
Alternative*
3-6 months
$25,000 - 250,000
>
»-" -'Cleanup I
; AcfioftJJesIgn
6-12 months
$30,000 - 300,000
>
(RA)
Cleanup
12 -24 months
$1 -10 million
long-term
;.. MonHoringond
'," Maintenance
up to 30 years
$5,000 - 50,000 yr
wells to more accurately define
the ground water movement.
Another approach is to break up
the site into different units — the
ground water problems may be
investigated first, for example,
followed by an investigation of
the soils.
Step Two: Feasibility Study
(FS)
Based on the RI, a study of
cleanup alternatives is
conducted. A site may have
several possible cleanup options,
and the FS is designed to look at
every feasible alternative.
The MPCA weighs each option,
considering a number of factors
including whether each
alternative:
+ protects public health and the
environment.
+ is in compliance with state
and federal regulations.
+ would be an effective short-
term solution.
4- would be an effective long-
term solution.
+ reduces the quantity or
hazardous nature of
contaminants.
4 is technically feasible.
4 is cost effective.
• is acceptable to the public.
After screening all the
alternatives, the MPCA develops
a cleanup recommendation,
called a Proposed Plan. The
agency presents this
recommendation at a public
meeting and requests comment
from the involved community
before completing the MPCA's
final decision-making document,
called the Record of Decision
(ROD).
Steps Three and Four:
Remedial Design (RD) and
Remedial Action (RA)
After the final decision is made,
specific engineering plans and
specifications are prepared for
the cleanup actions. This is
called the Remedial Design,
which must be approved before
die actual construction,
installation or removal of
91
-------
contaminated substances (or
Remedial Action) can begin.
Step Five: Long-Term
Monitoring and Maintenance
After the cleanup systems are
constructed, they have to be
monitored and maintained for
the life of the cleanup project. In
some cases (a pumpout of
contaminated ground water, for
example) the cleanup itself may
take many years. In other cases,
the contamination may be
addressed quickly, but
monitoring of ground water may
be required for many years.
Each site is different, but most
have monitoring and
maintenance requirements to
assure that the cleanup is
effective over the long term.
Why does the process take so
much time?
The Superfund cleanup process,
which generally takes between
four-and-a-half and five-and-a
half years, often seems lengthy
to those unfamiliar with the type
of investigations conducted.
However, each site has different
problems and geological
characteristics, making each a
unique problem for the
Superfund program. Often the
problem, such as ground water
contamination, is underground.
Thorough study is needed to
determine the best remedy for
the problem. It is important to
make sure the investigation,
feasibility study, remedial design
and remedial action are done
effectively the first time.
Is the process different for
federal Superfund projects?
The cleanup process is the same,
but the U.S. Environmental
Protection Agency also reviews
all of the contracts, work plans,
studies and reports and must
concur with the state's decisions.
These additional reviews often
increase the length of time for
each of the steps.
Any more questions about the
Superfund process?
If you have other questions
about the Superfund process, call
(612) 296-6300 or toll-free 1-
800-652-9747. A series of fact
sheets are available on other
aspects of Minnesota Superfund.
5-1-89
92
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Minnesota Superfund
Community Relations
Minnesota Pollution Control Agency
Fact Sheet #$
Minnesota's Superfund
program addresses
cleanup at a variety of
sites, including industrial
facilities, former dump
sites, sites with l
municipal or private well
contamination and
sanitary landfills, ,,
This series of fact sbeets
:W developed as a.
Mhmesota Sajjerfiind
program. A more \
specific set of fact sheets
addresses Supeifund
landfills* - '
How does the Superfund
Program assure that
communities are informed
about sites?
Although Minnesota's
Superfund law does not
specifically address community
relations, the Minnesota
Pollution Control Agency
(MPCA) is committed to
keeping interested local officials,
residents, environmental groups,
responsible parties and the media
informed about important
milestones at sites and
encouraging public participation
in decisions made by the agency.
In doing so, Minnesota
Superfund follows the spirit of
the federal Superfund law, which
contains community relations
provisions.
The MPCA has established
procedures for notifying and
explaining actions to the public
when:
41 contamination from a site or
unknown source results in
contamination of a private well
or municipal well. The MPCA
informs affected residents and
local public officials if levels
exceed the Minnesota
Department of Health's (MDH's)
93
allowable limts for drinking
water or if MDH issues a health
advisory.
4 a site is going to be proposed
for inclusion on the state
Superfund list, the Permanent
List of Priorities (PLP). The
MPCA requests public comment
after the proposal, to allow
communities to discuss their
ideas and concerns about the
site. MPCA also works with the
U.S. Environmental Protection
Agency (EPA) to assure that
local officials and the public are
informed when sites are
proposed for the National
Priorities List (NPL).
+ significant points in the
Superfund process are reached.
These include the beginning of
investigation at the site, the
results of the investigation when
the extent of contamination is
known and following the study
of the alternative cleanup
methods. When a cleanup plan
is proposed, the MPCA holds a
public comment period for
interested residents, local
officials and others to ask
questions and provide comments
on the plan.
Printed on recycled paper
-------
The MPCA attempts to keep
local public officials informed of
Superfund activities in their
areas. Local officials, such as
mayors, county commissioners,
legislators, city councilors and
other local government staff are
often the persons contacted first
by residents concerned about or
interested in a site. Local
officials also are knowledgeable
about when communities are in
need of more information from
the MPCA.
What methods does the
MPCA use to keep
communities informed
about Superfund sites?
MPCA staff use a variety of
techniques to keep local officials
and communities informed about
Superfund sites. In most
situations, a phone call between
interested officials or residents
and appropriate MPCA staff is
the best way to exchange
information. MPCA might also
inform the public through letters
to specific affected individuals,
briefings with public officials,
informal community meetings,
fact sheets describing different
steps in the cleanup process,
news releases or more formal
public meetings.
Are the views of the
community important to
decisions made about sites?
The comments of interested
public officials and residents are
very important to MPCA staff
making decisions about
Superfund sites. Community
acceptance is one of the factors
the MPCA uses in evaluating
cleanup plans. Although it is
sometimes difficult to choose a
cleanup plan acceptable to all
members of a community, public
comment provides the MPCA
with many perspectives to use in
weighing one cleanup alternative
against another.
Who do I call for more
information?
If you have other questions
about community relations in
Minnesota Superfund, call the
MPCA Public Information
Office, (612) 296-7283, toll-free
at 1-800-652-9747. In addition,
fact sheets are available about
other aspects of the Superfund
program and about some
individual sites.
5-1-89
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Minnesota Superfund
Property Transfer Assistance
Minnesota Pollution Control Agency
Fact Sheet #?*
Minnesota's Superfund
program addresses .
cleanup at a variety of
sites* iitclndiag industrial
facilities, former dump
sites, sites with
municipal or private well
contamination and
sanitary landfills.
This iertes of fact sneets
was developed as a
general explanation W
fhe Minnesota Sttperftmd
program* A more \'' - -
specific set of fact sheets
addresses Swper
landfills. : '
What is property transfer
assistance?
Property transfer assistance was
created by 1988 amendments to
Minnesota's Superfund law (the
Minnesota Environmental
Response and Liability Act or
MERLA). Minnesota Statutes
section 115B.17, subdivision 14
authorizes the MPCA to assist the
public in determining whether a
property has been the site of a
release or threatened release of
hazardous substances, pollutants
or contaminants. The MPCA is
also able to assist or supervise
reasonable and necessary cleanup
activities. Parties requesting
assistance reimburse the MPCA
for the cost of providing
assistance.
Staff in two sections of the
MPCA's Ground Water and Solid
Waste Division are involved in
providing property transfer
assistance:
Staff in the Program
Development Section perform file
evaluations — reviews of agency
records and files for evidence of
contamination at or near the
property.
Staff in the Site Response Section
review and approve investigation
plans and reports as well as
cleanup plans to ensure that
contaminated sites are properly
investigated and cleaned up.
Why was property transfer
assistance created?
Real estate transactions have
consequences for property
buyers, sellers, bankers,
insurance companies, landlords
and tenants. As state and federal
environmental laws have
changed, individuals and
businesses have become
increasingly concerned about
limiting the risks involved with
transfer of land which has been
contaminated by a release of
hazardous substances, pollutants
or contaminants.
As a result, MPCA staff have
been responding to a growing
number of requests for file
searches and for review and
approval of environmental
investigations and cleanup
activities. In 1985, the MPCA
received two requests for file
evaluations; in 1986,44 such
requests were received. In 1987,
after the passage of key federal
Superfund legislation, the
number increased to 325.
During 1988, the MPCA
received 964 requests for file
Printed on recycled paper
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evaluations. Property transfer
assistance was created to provide
the staff and resources to meet
this need.
Is state approval required
prior to property transfer?
In Minnesota, approval is not
required prior to property
transfer. Assistance is provided
upon request. Some states
require written state approval
and/or cleanup of contaminated
property prior to a change of
property ownership.
State Superfund law does require
that the owner of contaminated
property (or property used for
hazardous waste disposal) file an
affidavit with the county where
the property is located prior to a
transfer of ownership. State law
does not require that an owner
certify property to be clean prior
to transfer.
How does property transfer
assistance work?
The process begins with a
request from an individual or
business contemplating a real-
estate transaction. These
requests are sent to the MPCA
and must include the following
information:
+ street address of the property;
+ facility name;
MPCA
Ground Water and
Solid Waste Division
Program
Development
Section
Site
Response
Section
File
Evaluation
Technical
Evaluation
4 a map showing the
property's location and the area
within a one-mile radius of the
property;
4 the zip code of areas to be
reviewed for leaking
underground storage tanks;
4 the city (if the property is
within a city) or county to be
reviewed for past spills; and
4 (if possible) latitude and
longitude or Public Land Survey
coordinates for sites outside the
Twin Cities metro area.
This request initiates a file
evaluation, which looks at
selected agency files for
evidence of contamination at or
around the site.
What is a file evaluation?
A routine file evaluation
includes a review of the
following lists, maps or data
bases to identify sites at or
within one mile of the property
being investigated:
4 National Priorities List - a
national listing of hazardous
waste sites which represent a
significant threat to public health
or the environment
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4 Permanent List of Priorities -
a state listing of verified
hazardous waste sites which
represent a threat to public
health or the environment and
are priorities for cleanup.
4 Comprehensive
Environmental Response,
Compensation and Liability
Information System (CERCLIS)
the U.S. Environmental
Protection Agency (EPA's) data
base of potential or actual
hazardous waste sites
nationwide.
4 Regulatory Compliance,
Hazardous Waste Enforcement
Log - A listing of facilities
which have had some previous
problem with hazardous waste
rules or regulations.
* List of Permitted Solid Waste
Facilities - A listing of those
facilities or areas in the state
which have been issued permits
for solid waste handling or
disposal.
^ Hazardous Waste Permit Unit
Project Identification List - A
listing of facilities which have
received or are in the process of
being issued a permit for
treatment, storage or disposal of
hazardous waste.
* 1980 Metropolitan Area
Waste Disposal Site Inventory -
U.S. Geological Survey
topographic maps and Hudson's
Street Maps which show the
location of abandoned dumps,
demolition sites, tree disposal
sites, fly ash sites, foundry sand
and slag sites, surface
impoundments and other dumps.
Most of these sites were
discovered prior to the creation
of the MPCA, and detailed
information about them is
325
$64
1985 1986 1987 1988
generally not available.
4 1980 Statewide Open Dump
Inventory - Lists and maps
which show the location of
municipal waste disposal
facilities, industrial surface
impoundments and closed
municipal dump sites.
A file evaluation also includes a
review of the Underground
Storage Tank Information
System data base. The review
will determine whether a
registered underground storage
tank, leaking underground
storage tank or spill of petroleum
products or hazardous substance
has been reported at the street
address or under the facility
name provided by the requester,
whether leaking underground
storage tanks are located within
zip code areas relative to the
property; and whether spills have
been reported within the city or
county where the property is
located.
The MPCA's costs of providing
assistance are paid by the
individual or business
requesting the service. The
agency receives 75 to 100 such
requests each month and can
generally respond to a request
within two to four weeks.
What is the next step in the
property transfer assistance
process?
The business or individual
requesting the file evaluation
may wish to evaluate the
property more thoroughly. They
may choose to hire a consultant
to conduct a pre-purchase
environmental audit. This is
usually done in phases, with
Phase I consisting of an
extensive history and
background search.
During this phase, the consultant
may visit the site to look for
evidence of possible
contamination, look at aerial
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photographs and MPCA records,
and contact local officials about
how the property has been used
in the past.
Phase II may consist of a field
investigation, which may include
sampling of soils, ground water,
septic systems, tanks or barrels.
Initial studies may test for a
variety of possible contaminants,
because little may be known
about what is on the site. The
MPCA's Site Response staff will
review work plans to assure that
it addresses all potential
problems on the site.
If actual contamination is
discovered, the MPCA must be
notified. Further specific testing
may be required, followed by a
"mini-cleanup" to address the
contamination at the site.
MPCA Site Response staff will
also review and approve these
mini-cleanups. If the problem is
a leaking pipeline or storage
tank, MPCA's Tanks and Spills
Unit becomes involved in the
process. The MPCA's costs of
providing assistance are paid by
the individual or business
requesting the service.
How can I find out more about
property transfers assistance?
For more information or to
request a file evaluation, contact:
Property Transfer Assistance
MPCA
Ground Water and
Solid Waste Division
Program Development Section
520 Lafayette Road
St. Paul, Minnesota 55155
(612) 297-2956
toll-free 1-800-652-9747
Fact sheets are also available on
other aspects of Minnesota
Superfund.
5-1-89
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NEW HAMPSHIRE
OVERVIEW
Sites Listins New Hampshire uses three tracking lists to manage its hazardous waste sites;
CERCLIS, its RCRA list, and the State groundwater protection permit list While there may be a slight
overlap between these lists, the vast majority of hazardous waste sites are found on Hie CERCLIS and the
RCRA list.
. The CERCLIS is the State's primary management and tracking tool for hazardous waste sites. All
sites discovered by the State that contain hazardous substances, or are suspected of containing hazardous
substances, are recorded on CERCLIS. New Hampshire's Department of Environmental Services (DES or the
Department) is developing a computerized, comprehensive, project oriented waste site inventory. The
development of the inventory has been hampered by the lack of adequate resources.
Until the completion of the omnibus inventory, it will be difficult to determine exactly the number of
hazardous waste sites in the State, but the 148 sites recorded on CERCLIS receive primary attention of the
State's Superfund program. Fifteen of these sites are listed on the NPL and one site is proposed for listing. Of
the 132 sites that comprise the remainder of the CERCLIS, the State and EPA have conducted preliminary
assessments on over 90% (119/132), and both preliminary assessments and site evaluations on 18% (24/132).
Enforcement Responsible parties in New Hampshire are strictly, jointly, and severally liable. The
DES has a relatively free hand in choosing its enforcement strategy, and it can encourage responsible party
cooperation by threatening to place liens on property to recover its cleanup costs. However, the State lacks
provisions for punitive damages or civil penalties. The criminal sanctions that are at the State's disposal may
not lead to effective deterrence.
Hazardous Waste Cleanup Fund New Hampshire's Hazardous Waste Cleanup Fund Law, which was
passed in 1981, envisioned a Fund to be used for hazardous waste cleanup but also for related expenses of
administration, a household hazardous waste program, and hazardous waste siting. The Law was amended in
1985 to provide that the Fund was not to be used for expenses at sites that qualified for the Federal program.
Money for the Fund comes from hazardous waste fees, penalties, fines, bonds, appropriations, and interest,
although very little money has been appropriated for the Fund and no accrued interest has ever been credited
to it. The Fund had a balance of approximately $1.2 million at the end of fiscal year 1988.
In the 1988 fiscal year the DES spent $1.1 million from the HWCF, of which approximately
$750,000 was spent on 8 CERCLIS sites and 1 NPL site. Most of the 1988 site-response expenditures were
for removals and pre-remedial investigations. In each year since the Fund's inception, expenditures from the
Fund have exceeded additions to it In order for the DES to continue to carry out removal actions and pre-
remedial activities at its current level, the Fund will need additional monies. If the hazardous waste cleanup
program is to conduct remedial actions or do extensive work on non-CERCLIS, non-NPL sites, it will need
substantially more funding.
The Fund's finances are complicated by its failure to collect accrued interest, by the application of
monies from Federal Superfund recovery actions to the Fund, and by the deposit of some generator fees and
fines into an account other than the Fund. Actions have been taken to correct these problems.
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I. INTRODUCTION-PROGRAM HISTORY AND SITES
Program History
New Hampshire established its State Hazardous Waste program in 1981, and has
been actively involved with the Federal Superfiind program since 1983. The New
Hampshire Department of Environmental Services (the DES or the Department), which is
responsible for the hazardous waste program, prefers the Federal Superfiind program for
hazardous waste site remedial actions because the Federal program is well funded. Thus,
the great majority of New Hampshire's hazardous waste cleanups are carried out pursuant
to the Federal Superfund program.
The State Superfund program is focused on pre-remedial studies such as
groundwater and hydrology investigations, and other pre-remedial activities such as drum
removal and supplying bottled water. A household hazardous waste program and facility
siting program also are managed as part of the State Superfund program.
The New Hampshire DES's Waste Management Division manages the Federal and
State Superfund programs. The Waste Management Division is divided into three bureaus,
which are set forth in greater detail in Section IV. Since its establishment the Hazardous
Waste program has been reorganized at least three times.
Sites
New Hampshire's hazardous waste sites can be divided into three categories:
proposed and listed NPL sites; CERCLIS sites excluding NPL sites and sites proposed for
NPL listing; and non-NPL, non-CERCLIS sites. This final group can be subdivided further
into RCRA Subtitle C sites, including active RCRA hazardous waste sites and sites that are
or were part of the RCRA Subtitle C program, but for one reason or another (e.g.,
bankruptcy, loss of interim status) are no longer managed as active RCRA sites and
municipal landfills that are contaminated with industrial and hazardous waste.
At one time, the DES maintained a comprehensive list of hazardous and solid waste
sites, but it has abandoned the practice in recent years. At present, to manage its
hazardous waste sites the State maintains separate tracking systems for its RCRA sites,
Superfund sites, and sites that require a State groundwater discharge permit According to
the DES, there may be a slight overlap between these site lists. The Department is
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developing a comprehensive, project oriented computer database to manage its solid and
hazardous waste sites.1
Because the DES has not yet completed its comprehensive State waste site
inventory, it is difficult to determine exactly the number of hazardous waste sites in the
State. Based on our discussions with State officials and written documents and reports, it
appears that there may be as many as 360 sites needing remediation. There are between
150 and 180 hazardous waste sites (mostly Superfund and RCRA sites) and there may be
as many as 179 non-NPL, non-CERCUS municipal landfills that require some cleanup.
According to information collected by the United States General Accounting Office (GAO)
from the State of New Hampshire, the State reported that there are approximately 400 non-
NPL sites "[n]eeding [a]ttention." United States General Accounting Office, Hazardous
Waste Sites: State Cleanup Status and Its Implications for Federal Policy 92 (August 1989).
The Department believes that it has identified the sites with the most extensive
contamination, and that these sites are being addressed by the Federal Superfund program.
Nevertheless, it recognizes that other hazardous waste sites may present serious threats to
the public health and welfare, and investigates all potential hazardous waste sites which are
discovered. The potential health risks of such sites are reviewed by the New Hampshire
Department of Public Health Services (DPHS), Environmental Health Risk Assessment Unit
(EHRAU) or the appropriate Federal agency. The DES uses the health risk assessment
information generated by the DPHS EHRAU or the Federal agency to help set priorities
and provide risk assessment evaluations. The information also is utilized to determine
whether immediate action is necessary, such as installation of water supply systems or
construction of fences. The Department also recognizes that in certain instances cleanup of
1. We were told that the transition from a "paper and pencil" system to a computer
system was progressing slowly because the DES has not been provided with ample funds.
The DES relies presently on the three lists described above and its institutional memory for
site information.
A recent report discussing New Hampshire's hazardous waste programs noted that
"[the] DES should develop a comprehensive data base of hazardous waste sites which
includes the location of the site, the status of the site, state expenditures related to the site,
responsible parties and the individual responsible for management oversight at the state
level." Office of Legislative Budget Assistant, State of New Hampshire, State of New
Hampshire Hazardous Waste Management Program 46 (June 1989) (hereinafter "Legisla-
tive Budget Assistant's Report").
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hazardous waste sites that do not present serious threats to public health and welfare can
be accomplished outside of the State and Federal Superfund programs.2
NPL Sites Although New Hampshire is a small, sparsely populated state, it has
more than its proportionate share of NPL sites. In fact, New Hampshire has more NPL
sites than any other New England state except Massachusetts. Legislative Budget Assistant's
Report at 30. According to State officials, many of these NPL sites were created before or
around the time that the RCRA Subtitle C program became effective. They are the result
of illegal or marginal waste disposal practices used to avoid the substantial costs associated
with properly managing hazardous wastes. As of June, 1989, New Hampshire had 15
Federal Superfund sites that were listed on the NPL and one site proposed for NPL listing.
Table NH-1 contains a list of New Hampshire's NPL sites.
Our discussions with the DBS revealed that as of June, 1989, the State has the lead
on seven of these sites. EPA has the lead on six, and the lead for three sites remains to
be determined. At four of the sites (Gilson Road, Tinkham Garage, Keefe Environmental
Services and Ottati & Goss) Records of Decision have been completed. Legislative Budget
Assistant's Report at 36. It is estimated that remedial actions at these sites will cost a total
of $30.7 million. The average time to complete site remediation is approximately 5 years.
Id. In general, the DBS seemed fairly well apprised of the past and on-going activities at
the NPL sites throughout the State.
CERCLIS Sites In addition to its 16 NPL sites, New Hampshire has 132 other
hazardous substances sites that are recorded on CERCLIS. Manufacturing sites make up
37% of the 132 CERCLIS sites, illegal dumps and disposals comprise an additional 22%,
and contaminated solid waste landfills and asbestos-contaminated sites make up an
additional 17 and 14% respectively. The remaining 10 percent are classified by the State
as "miscellaneous." Id. at 28.
The Legislative Budget Assistant's Report describes CERCLIS as "a management
information system that tracks the status of sites that are potential candidates for the NPL."
Id. at 39. The Department uses CERCLIS as its primary management and tracking tool for
2. These methods include RCRA closure plans, and cleanups induced by market forces
or incentives (e.g., property transfers, potential superlien liability).
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TABLE NH-1
NPL SITES
Final NPL Sites:
1. Somersworth Municipal Landfill, Somersworth
2. Dover Municipal Landfill, Dover
3. Tinkham Garage Site, Londonderry
4. Auburn Road Landfill, Londonderry
5. Keefe Environmental Services, Epping
6. Ottati & Goss/Great Lakes Container Corporation Site, Kingston
7. Mottolo Pig Farm Site, Raymond
8. Gilson Road, Nashua
9. Kearsarge Metallurgical Corporation, Conway
10. Tibbetts Road, Banington
11. Peterborough South Municipal Well Site, Peterborough
12. Coakley Landfill, North Hampton
13. Savage Municipal Well Site, Milford
14. Holton Circle, Londonderry
15. Fletcher Paint Works, Milford
Proposed NPL Site:
1. Pease AFB, Portsmouth
Source: Legislative Budget Assistant's Report at 103, 54 Fed. Reg. 29820, 29824 (July 14,
1989).
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Superfund sites. It will record on CERCLIS any site at which hazardous substances are
known to be present, or suspected to be present. If a site that is known to contain, or
suspected of containing, hazardous substances cannot be recorded on CERCLIS, the DES
will attempt to track and manage the site as a RCRA site or through a State groundwater
permit.
Once a site is recorded on CERCLIS, a "preliminary assessment" is required to be
conducted within one year. Id. at 39. The preliminary assessment is used to rank the site
into one of three categories: "high priority" (likely to receive an HRS score making it
eligible for the NPL), "medium priority" (having the potential to receive an HRS score
making it eligible for the NPL) or "no further remedial action required." After it
conducts a preliminary assessment and ranks the site, the State and/or EPA performs a site
investigation for all high priority and medium priority sites. Id. at 38-39.
As of June 30, 1989, preliminary assessments had been completed on 119 CERCLIS
sites. Of these sites, 24 had undergone both a preliminary assessment and site investiga-
tion and had been recommended for further action as high priority sites. Preliminary
assessments only had been completed at 95 sites. Twenty-one of these sites were classified
as high priority, 49 sites were classified as medium priority, and at 25 sites no further
remedial action is planned. Preliminary assessments are pending for 13 sites. Id. at 40.
The State does not maintain a comprehensive, detailed profile of CERCLIS sites in a
central place as it does with NPL sites. In order to obtain detailed information about
individual CERCLIS sites, each site file must be reviewed and DES personnel must be
consulted.
After a site is recorded on CERCLIS, the DES pursues responsible parties to force
them to clean up hazardous waste contamination. It points out to such responsible parties
that it may be a benefit to undertake remediation with the State's concurrence because the
only alternative remedial path involves proposing and listing the site on the NPL, which
necessitates clean up under the Federal Superfund program, an extremely time consuming
and costly process. In contrast, if responsible parties perform clean up before the site is
ranked, it is conceivable that the preliminary assessment may place the site in "no further
remedial action required" category. Once categorized, it is unlikely that the site will be
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listed on the NPL.3 To date, the Department estimates that responsible parties have spent
over $20 million on pre-remedial and remedial actions at CERCLJS sites over the past 8
years.
Non-NPL, Non-CERCLIS Sites Some of New Hampshire's hazardous waste sites
that are not included in CERCLIS are being tracked by the State through its RCRA list or
its groundwater permit list For example, some of the sites on the RCRA list are inactive
RCRA Subtitle C sites that are managed pursuant to a closure plan, if the owner and/or
operator is financially viable and cooperative. If the owner and/or operator is bankrupt or
unable or unwilling to manage the site, the DES may elect to spend its State Hazardous
Waste Cleanup Fund (HWCF or the Fund) monies to conduct cleanup operations at the
site. In such cases, the State also will seek to list the site on CERCLIS. For example, the
State committed HWCF monies to clean up and contain contamination at a former plating
facility (New Hampshire Plating Company site) that had been managed under RCRA, but
lost interim status. The New Hampshire Plating Company site has been added to the
CERCLIS (EPA I.D. No. NHDOO1091453).
Sites placed on the groundwater permit list are managed by the Groundwater Protec-
tion Bureau of the DBS' Water Supply and Pollution Control Division. The Groundwater
Protection Bureau notifies the Waste Management Division's Pre-Remedial Section if a site
is listed on the groundwater permit list The DES also informally tracks non-NPL, non-
CERCLIS municipal landfills, an undetermined number of which may require remediation
at some future date.4
3. Proposed revisions to the Federal hazard ranking system (HRS) will "credit" site
clean up actions taken prior to the site assessment The present HRS scores sites based on
their "historical worst status," regardless of clean up efforts. The proposed revision may
change the negotiating dynamic between the State and responsible parties. Pursuant to the
proposed revision, responsible parties will recognize that aggressive early clean up efforts
are likely to lead to a site classification of "no further remedial action required," making it
very unlikely that further site remediation will be required.
4. One DES staffer stated that there are over 179 municipal landfills in New
Hampshire, not listed on the NPL or recorded on CERCLIS, which may present a threat to
public health and welfare.
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Site Discovery New Hampshire does not affirmatively seek out new hazardous
waste sites, although the Special Investigation Section of the Waste Management
Compliance Bureau investigates all complaints. (See infra Section EL) The Special
Investigation Section, largely dedicated to RCRA, also conducts follow-up inspections at
RCRA facilities. Complaints or inquiries concerning real property liens that arose (or may
arise) because of hazardous waste contamination at a site are potential sources of site
discovery. (See N. H. Rev. Stat. §147-B: 10-b (lien provision of the State Superfund law)).
H. STATUTE
Overview
The Hazardous Waste Cleanup Fund Law (HWCF Law or the Law), set forth in
N.H. Rev. Stat. Chapter 147-B (1981, amended 1983, 1985, 1986), authorizes the State's
cleanup program. The DES has promulgated the HWCF rules to govern program
administration. N.H. Admin. Code He-P, §1905.12 (1983, amended 1984).
A brief review of the HWCF Law and rules reveals that New Hampshire has altered
the purpose and use of the Fund since its inception. For example, in 1985 the Law was
amended restricting HWCF expenditures "only for those projects which do not qualify for
assistance under the Comprehensive Environmental Response, Compensation[,] and Liability
Act of 1980, Public Law 96-610 [sic]." N.H. Pub. L. 346 (1985). The DES believes that
the intent of the law is to restrict HWCF expenditures to non-NPL sites. Apparently, the
New Hampshire Legislature did not want the DES to commit HWCF monies to Federal
Superfund sites, particularly for the State's 10% match in fund lead cases. Thus, any State
monies expended at NPL sites must be approved by the Legislature out of general
appropriations or obtained through some other financial mechanism such as a bond act.
The Legislature has structured the HWCF disbursement procedures so that the gov-
ernor maintains strict control over fund expenditures. The Governor and his Executive
Council must approve all expenditures of the Department.5 The Governor and his
5. The New Hampshire HWCF Law states merely that the Division of Waste Manage-
ment must submit all contracts to the Governor and Council for advance approval, except
for emergency situations. The DES indicated, however, that all prior expenditures or
acceptance of money must be submitted for approval.
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Executive Council also must approve the acceptance of CERCLA money from the Federal
government. Two weeks (at a minimum) are required for the Governor and Executive
Council to consider an expenditure or accept Federal money. The Governor's tight control
over the DES' money and the time involved to obtain approval can create cash flow
problems for the DES.
The rules regarding the HWCF also have been amended. Originally, the rules
placed a $3,000,000 cap on the Fund. The cap was removed, however, around 1984.
According to the DES, the cap was removed because the New Hampshire State legislature
realized that site remediation was costly, and it wished the HWCF to stay "healthy." The
cap's removal should have a positive effect on the Fund, because any amount over
$3,000,000 can be used for remediation of hazardous waste sites. As explained in Section
V of this report, the Fund balance has not yet reached this level.
Enforcement Authorities
Responsible parties are subject to strict, joint and several liability for cleanup costs.
Cleanup costs include, but are not limited to, costs relating to the containment of hazardous
wastes or hazardous materials, necessary cleanup and restoration of the site, removal of the
hazardous wastes, and monitoring, assessing and evaluating the release of hazardous wastes
or materials. Only three defenses to liability, required to be proven by a preponderance of
the evidence, are enumerated in the HWCF Law (act of God, act of War, act or omission
of a third party). These defenses closely parallel the defenses to liability in the Federal
Superfund law. See CERCLA §107(b). The Law does not contain prerequisites to
enforcement against responsible parties.
The Attorney General is authorized to bring cost recovery actions in Superior
Court.6 If the State spends its money to clean up a site, a first priority lien may be placed
on the real property where the waste was located, on business revenues generated from that
property, and on the personal property located at the facility. Additional liens, without
priority, may be placed on any other property of a responsible party, including business
revenues, real property and personal property. The DES feels that these lien provisions
motivate private party cleanups because the potential imposition of a first priority lien can
6. Private parties are also empowered to bring an action in Superior Court to recover
costs expended to remedy environmental damage.
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prevent or impede many of the financial and business transactions related to property
transfers, such as the issuance of title insurance or a mortgage. The Department believes
that market based incentives and disincentives such as lien provisions are an effective way
of inducing private party cleanups, and it has utilized the lien provision approximately three
times.
The DES is empowered with general hazardous waste administrative authorities that
are similar to RCRA authorities. Thus, it can issue remedial action orders, contract for the
cleanup of a spill or request the Attorney General to bring a civil action upon receipt of
information that the generation, storage, disposal or treatment of any waste may present an
imminent and substantial hazard. The Attorney General may serve written demands for
information and may subpoena witnesses and documents, the DES may obtain site access,
and injunctive relief is available to enforce the HWCF Law and its rules. The DES
maintains that the Law empowers it to order the operator of a hazardous waste facility or
the custodian of the waste to clean up a site, and obtain an injunction against such parties.
New Hampshire's Law contains no provisions for collection of punitive damages or
assessment of civil penalties. Criminal penalties of up to $100.00 per day may be assessed
against any hazardous waste generator who does not pay his quarterly hazardous waste
generator fee or knowingly gives or causes to be given any false information in reports,
records or other documents. Any penalties collected shall be deposited in the HWCF. A
generator convicted under this provision is guilty of a misdemeanor. The low criminal
penalty and minor nature of the violation are unlikely to have a significant deterrent effect
on responsible parties. In fact, the Attorney General may decide not to bring such an
action if he determines that the cost of bringing the action is much greater than the
potentially small fine collection and the limited deterrence value.
Enforcement of the HWCF Law would be greatly enhanced if the State were able to
assess civil penalties and sue for punitive damages. From the State's perspective, civil
sanctions have a less burdensome standard of proof than criminal sanctions, and probably
require less case preparation than criminal actions. Imposition of substantial civil penalties
and punitive damages can have a powerful deterrent effect on the regulated community.
Any person who violates any of the provisions of the hazardous waste laws, makes
a materially false statement in any document, tampers with a monitoring device or does not
comply with a monitoring method, or violates a term or condition of an order or permit
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shall be guilty of a class B felony and may be imprisoned or fined not more than $50,000.
Any fines collected shall be deposited into the HWCF. This provision is more powerful
than the misdemeanor provision.
It is not known under what circumstances the State uses these criminal sanctions.
According to the Revised New Hampshire Hazardous Waste Cleanup Fund Annual Report
(Fiscal year 1988), the State collected $212,478.71 in fines and penalties that were added
to the HWCF.
ffl. ORGANIZATION
The DES, which is divided into four program divisions, is responsible for New
Hampshire's Superfund program. Figure NH-1 illustrates the structure of the DES.
FIGURE NH-1
STATE OF NEW HAMPSHIRE
DEPARTMENT OF ENVIRONMENTAL SERVICES
Commissioner
Assistant Commissioner
Air Resources
Division
Waste Management
Division
Water Resources
Division
Water Supply and
Pollution Control Div.
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The Waste Management Division, which is responsible for RCRA, Federal and State Super-
fund and New Hampshire's other state solid and hazardous waste programs, is divided into
three bureaus: the Waste Management Compliance Bureau, the Waste Management Plan-
ning Bureau and the Waste Management Engineering Bureau. Each Bureau contains three
sections. The organization of the Waste Management Division is depicted in Figure NH-2.
The Waste Management Compliance Bureau has three sections that administer
various portions of the RCRA program. The Waste Management Planning Bureau also is
largely dedicated to RCRA. For example, it contains a Reporting Section that is
responsible for the RCRA manifest system. The Reporting Section controls the
management of RCRA information, and prepares reports to the EPA and the State. It is
responsible for developing the Waste Management Site Inventory that will include all
RCRA, CERCLIS and other hazardous waste sites.
The Waste Management Engineering Bureau, covering mostly Superfund, also
contains three sections. The Pre-Remedial Engineering Section is geared toward pre-
remedial activities at State and Federal Superfund sites, described by the DBS as all
activities through the hazard ranking of the site. Almost all of its positions are funded by
the Multisite Cooperative Grant entered into between the State and the Federal government
The Remedial Engineering Section consists of RPMs involved with New Hampshire's NPL
sites. The Permits and Design Review Section provides engineering support for RCRA and
Superfund projects in all three Bureaus. The majority of its time is devoted to the
permitting and design review of solid waste facilities. If a RCRA facility application is
received, Section personnel devote to it whatever time is required to review the application
thoroughly. Very little time of the Permits and Review Section (less than 10%) is spent on
Superfund matters.
One other bureau, the Groundwater Protection Bureau, is involved in Superfund
activities. It conducts hydrogeological studies and other investigations at hazardous waste
sites. Commonly referred to by the DES as the "hydro team," it is actually part of the
Water Supply and Pollution Control Division, not the Waste Management Division.
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FIGURE NH-2
WASTE MANAGEMENT DIVISION
Director
Chief Engineer
Support Staff
Waste Management
Planning Bureau
Waste Management
Engineering Bureau
Pre-Remedial
Engineering Section
Waste Management
Compliance Bureau
Permits & Design
Review Section
Remedial
Engineering Section
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The present structure of the Waste Management Division is heavily oriented toward
the RCRA program. More than two-thirds of all staff seem to be involved with RCRA
matters; only 2 of 10 sections are dedicated to the Federal and State Superfund programs,
and 2 other sections partially participate in these programs.7 It is difficult to assess the
degree of communication and coordination between the Bureaus and Sections in the Waste
Management Division, but based on our discussions with DBS staffers, it is clear that not
all personnel are aware of the activities outside their Sections. Not surprisingly, the extent
of knowledge seemed to be proportional to the amount of time employed by the DBS. It
is also unclear exactly how the hydro team fits into the activities of the Waste
Management Division, although the Waste Management Division and the hydro team
collaborate on many projects. In fact, the Division Director of the Waste Management
Division and the hydro team's supervisor set priorities for the hydro team.
The Environmental Protection Division of the New Hampshire Department of Justice
(formerly known as the Office of the Attorney General) consists of 8 attorneys and
provides the DBS with legal support. It is compensated for some of its services through
the HWCF. Six of the attorneys in the Environmental Protection Division devote between
one-thud and one-quarter of their time to issues regarding hazardous waste (Federal
Superfund, HWCF and RCRA issues). In Fiscal year 1988 the Attorney General's Office
charged the HWCF $85,748 for the services rendered by one attorney, one investigator, one
paralegal and one secretary.
IV. FUNDING
The HWCF is a nonlapsing revolving fund that was created to provide for adequate
and safe containment and cleanup of hazardous wastes and hazardous materials within the
State. As noted above, the New Hampshire Legislature has altered the potential uses of
the HWCF significantly during the Fund's eight year existence. At present, the New
Hampshire HWCF Law states that the monies expended from the HWCF shall be used
only for those projects that do not qualify for assistance under the Federal Superfund law.
All fund expenditures must be certified by the Governor and his Executive Council. As of
7. This figure includes the nine sections in the Waste Management Division and one
section (the hydro team) of the Water Supply and Pollution Control Division.
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June 30, 1989, the HWCF had an available balance of $1,891,073. Legislative
Assistant's Report at 43.
Sources
New Hampshire's HWCF Law lists several sources of fund monies. They are:
• quarterly hazardous waste generator fees;
• quarterly fees imposed upon hazardous waste treatment, storage and disposal
facilities (only on hazardous waste from out-of-state sources);
• penalties and fines;
• hazardous material transporter permit fees; and
• interest on the HWCF.
The Legislature has appropriated very little money for the HWCF. As the following chart
indicates, the average amount approximated per year over the last eight years is $78,000.
Amount Appropriated
1981 $200,000
1982 $ 60,000
1983 $ 62,000
1984 $100,0008
1985 $100,0009
1986 $0
1987 $0
1988 $100,0009
TOTAL $622,000
According to the Revised Annual Report for the Hazardous Waste Cleanup Fund
(Fiscal year 1988), the HWCF's balance at the end of fiscal year 1988 was $1,226,419.59.
8. These figures represent approximate appropriated amounts.
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During the 1988 fiscal year, the Fund spent $1,118,672.82, and was replenished from the
following sources:
$212,478.71 from criminal fines and penalties for violations of the State's
Hazardous Waste Laws (27% in fiscal year 1988);
$357,504.38 from quarterly fees paid by hazardous waste generators and
facilities that treat, store or dispose of hazardous waste from out of state
(45% in fiscal year 1988); and
$219,851.25 from hazardous materials transporter permits (28% in fiscal
year 1988);
The total amount collected was $789,834.34. In 1988, the Fund was replenished for only a
portion of its expenditures. According to the DBS, since the Fund's inception this has been
the rule rather than the exception.
The DBS told us that it does not expect to collect more than $800,000 in any year.
Far less has been collected in previous years. The Legislative Budget Assistant's Report
bears this out. It notes, for example, that in fiscal years 1986 and 1987 only $4,720 and
$533,104 were collected, although $358,435 and $319,466 were spent, respectively.
Legislative Budget Assistant's Report at 43.
The Legislative Budget Assistant's Report contains a chart that details HWCF
revenues, expenditures and balances from 1981 through 1989. The chart shown in Table
NH-2. Without exception, for every fiscal year from 1982 to 1988, HWCF expenditures
have exceeded HWCF revenues.9 During these six years, at a minimum, Fund expenditures
were double the Fund revenues. In one year (fiscal year 1986) Fund expenditures were 7_5_
times Fund revenues. Assuming that New Hampshire has between 150 and 180 hazardous
waste sites (not including non-NPL, non-CERCLIS municipal landfills) it appears that the
HWCF as currently structured, will be inadequate to pay for the hazardous
9. Fiscal years 1981 and 1989 are exceptions. In fiscal year 1981, there were no Fund
expenditures or revenues. In 1989, the Fund revenues jumped to $2,200,059. A large
portion of this sum (approximately $1,800,000) is attributable to a Federal Superfund cost
recovery award that may have been incorrectly credited to the HWCF. See Legislative
Budget Assistant's Report at 44.
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TABLE NH-2
STATE OF NEW HAMPSHIRE
HAZARDOUS WASTE CLEANUP FUND
SELECTED FINANCIAL INFORMATION
Fiscal
Year
1981
1982
1983
1984
1985
1986
1987
1988
1989
TOTALS
Revenue
$ -0-
59,187
248,354
210,529
357,472
4,720
533,104
789,834
2.200.059
$4,403,259
Expenditures
$ -0-
117,989
245,364
433,435
1,006,539
358,435
319,446
1,118,673
1.470.550
$5,070,431
Available
Balance
$ 200,000
165,492
111,390
917,426
2,712,922
855,320
818,789
678,376
1.891.073
$ N/A
Reprinted from the Legislative Budget Assistant's Report at 43.
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waste planning, implementation and management activities for which the State is
responsible without substantial appropriations from the Legislature or other additional
sources of funding.
HWCF Funding Issues
The Legislative Budget Assistant's Report uncovered three significant funding issues
related to the HWCF. These anomalies point out that the DES has not exercised careful
control over the HWCF. They make it difficult to determine the funds available for the
remediation of hazardous waste sites.
First, the Report notes that the Waste Management Division "deposited nearly
[$1,800,000] in recoveries from Superfund enforcement actions into the [HWCF] during
fiscal years 1989 and 1988. ...The practice of depositing [Federal] Superfund recoveries in
thek entirety to the [HWCF] is questioned because it is inconsistent with the established
intent and purpose of the [HWCF], which restricts the use of the fund to nonqualifying
CERCLA sites." The Report recommends depositing this money in the general fund.
Legislative Budget Assistant's Report at 44. If the Legislature agrees with this reasoning,
the HWCF could lose this significant amount of money.10
Second, it points out that during Fiscal year 1986, the DES deposited $730,035
(collections of generator fees and fines) in an account belonging to the Division of Public
Health, Waste Management Engineering Bureau. The Report recommends that the Waste
Management Engineering Bureau account should be analyzed to "determine if an
adjustment should be made to correct the [HWCF for the] balance due ..." Id. at 45.11
10. According to the DES, the Legislature has reviewed the Legislative Budget Assis-
tant's Report and has not acted to remove the Federal Superfund money from the HWCF.
11. The DES responded to this recommendation as follows:
"The second observation regarding the [HWCF] deals with
income that was deposited in the Waste Management
Engineering Bureau, account 010-044-5495. ... To the best of
our knowledge, these funds were used for activities permitted
under [the Hazardous Waste Cleanup Fund Law]."
Legislative Budget Assistant's Report at 159 (response of the DES to the Report).
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Third, the Report discusses interest accruals on the HWCF. Surprisingly, as of
February, 1989, the HWCF never has been credited for interest income earned. The Report
estimates that over the eight year period that the Fund has existed, approximately $591,579
in interest income would have accrued on its average balance, and recommends that "[tjhe
Waste Management Division should request the State Treasurer to transfer accrued interest
income earned ... and establish procedures so that the [HWCF] is credited for all future
accrued interest income in accordance with [N.H. Stat. §147-B:3]." Id. at 45-46. On June
29, 1989, the DES made the recommended request. Id. at 159.
Bond Issues
As stated above, in 1983 the State Legislature passed a $1.5 million bond issue to
provide funds for the HWCF. The legislation that contained the bonding authority declared
that the interest and principal due on the bonds shall be a charge against the HWCF, even
though N.H. Stat. §147-B: 6 (V) states "[n]otwithstanding any other provision of law, the
interest and principal due on bonds and notes shall not be paid out of funds from the
[HWCF]." According to the DES, the HWCF has not been debited for such charges. The
Legislative Budget Assistant's office told us that the bond will be repaid from the State's
general fund. Obviously, if bond principal and interest were debited from the HWCF, less
money would be available for hazardous waste cleanup.
The Legislature has passed at least one additional bonding act of $1,500,000 to
provide for the State's 10% matching share at Federal fund lead NPL sites, and for other
activities at NPL sites.
Uses of the Fund
The New Hampshire HWCF Law states that Fund monies can be used for:
• safe containment and cleanup of nonqualifying CERCLA
sites within New Hampshire;
• household hazardous waste cleanup projects;
• hiring consultants and personnel;
• purchasing and renting equipment;
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• administrative costs associated to the Fund; and
• "other necessary expenses" directly associated with
hazardous waste cleanup and containment
The law also requires the DBS to allocate $60,000 annually from the HWCF for the
development and implementation of a hazardous waste siting program.
Based on the provisions of the HWCF law, it is clear that the legislature did not
intend that New Hampshire's HWCF be used solely to cleanup hazardous waste sites. In
fact, the legislature specifically reserved $60,000 of HWCF money per year for a siting
program, and authorized the DES to use the Fund for expenses "associated" with Fund
administration, a general directive that the DES interprets broadly.
Information is not available to examine in detail how New Hampshire has used its
Fund from 1981 to the present, although information for at least one year (1988) is
available for analysis. In fiscal year 1988, New Hampshire's HWCF was used for five
major purposes.12 The chart below sets forth expenditures from the Fund.
Reason for Expenditure Amount Percent of Total Expenditure
Fund Administration $119,247.80 10.7%
Household Hazardous Waste Program $ 63,136.19 5.6%
Facility Siting Program $ 31,505.6613 2.8%
Site Response & Cleanup $819,035.17 73.2%
Payment to Attorney General $ 85,748.00" 7.7%
TOTAL $1,118,672.82 100%
12. Department of Environmental Services, Revised Annual Report for the Hazardous
Waste Cleanup Fund (Fiscal year 1988).
13. Although the HWCF Law specifically requires that $60,000 per year be allocated to
facility siting, the State spent only half that amount in fiscal year 1988 because, according
to the DES, the facility siting staff position was vacant.
14. See supra, p. 112.
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The siting response and cleanup expenditures were spent for the following purposes:
Reason for Expenditure Amount
Supply bottled drinking water
(Tibbets Road Site) $ 3,771.75
Cleanup and containment of hazardous
materials (New Hampshire Plating Site) $207,542.34
Drum removal (Roger's Trailer Park Site) $ 26,064.00
Hydrogeological and pre-remedial investigations
of suspected hazardous waste sites: $520,501.95
1. New Hampshire Plating 5. Tappan Waste
2. Naughton Landfill 6. Garabedian Landfill
3. Hall Street 7. Duston Road
4. Ruggerio Pig Farm
TOTAL $757,880.0415
Based on this information, we can observe several interesting facts about the HWCF
monies expended on site response and remediation.
During fiscal year 1988, New Hampshire spent approximately $750,000 of HWCF
monies on 8 sites all of which are recorded on CERCLIS.16 The State HWCF expenditures
averaged approximately $94,000 per site. At two of these sites (Roger's Trailer Park and
New Hampshire Plating Company), approximately $250,000 of the Fund was spent directly
on removal activities. The remaining money, over $500,000, was spent on six sites to
carry out pre-remedial and hydrogeological investigations. Some of this money may have
been used to pay the DES's hydro team salaries and expenses to prepare such reports and
studies. The Revised Annual Report is unclear with regard to exactly how this money was
15. There is a discrepancy of $61,155.13 between the $819,635.17 that the Revised
Annual Report lists on page 5 as the aggregate figure spent on site response and cleanup,
and the breakdown of this figure on pages 3 and 4 of the Report. The DES did not
explain to us the reason that these figures vary.
16. It also spent approximately $3,800 to provide bottled water to residents of a town
near the Tibbets Road NPL site.
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spent. It is clear, however, that these HWCF monies were used largely for removal
activities and pre-remedial investigations. Thus, in fiscal year 1988 no HWCF monies
were expended for remedial work.
Assuming that New Hampshire continues to use its HWCF only for the limited pur-
poses of conducting pre-remedial investigations and removals at CERCLIS sites, and
assuming that at each site such investigations and removals are not less than $94,000 per
site, the State would be required to expend over $10,058,000 ($94,000 x 107 sites [132
CERCLIS sites - 25 CERCLIS sites at which no further action is required]). Assuming
that the percentage of the HWCF used for "site remediation and response" is equal to the
Fiscal year 1988 amount (73%) and remains constant, the Fund will require approximately
$13,778,000 ($10,058,000/73% = x/100%). If the DES can address all of its sites within
10 years, the HWCF will require at least $1,337,800 per year.
In order to accumulate $1,337,800 per year, the HWCF will require additional
sources of funding. Appropriations have averaged only $78,000 per year, and collection of
money from other sources such as fines and penalties are unlikely to exceed $800,000.
Collecting accrued interest on the Fund is not likely to generate more than $83,000 per
year.17 Although the HWCF may accrue some monies from settlement and/or recovery, the
DES told us that such monies are dedicated to cleanup activities at specific sites. In fiscal
year 1988, DES received approximately $1,700,000 in settlement monies (see Section V,
The Remediation Process), but this magnitude of recovery is unlikely to be repeated.
Based on these amounts, the Fund will receive not more than $960,000 per year. Thus an
additional $390,000 will be required in order for the DES to conduct pre-remedial and
removal activities at CERCLIS sites.
If the DES expands its scope of activities to include remedial work, or additional
CERCLIS sites are discovered, substantially more Fund money would be required. The
DES's future plans regarding these matters are unknown.
17. Based on the chart found on page 45 of the Legislative Budget Assistant's Report,
we can assume an average fund balance of approximately $1,000,000 and an average 90-
day T-bill rate of 8.3%, which yields $83,000 per year.
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V. THE REMEDIATION PROCESS
Prioritization and Site Listing
Because the DES does not maintain a comprehensive site inventory, it is not
possible to determine exactly how sites are prioritized. The DES stated that at present
State Superfund sites are roughly prioritized based on three factors:
• whether the site poses a health hazard;
• whether the health hazard at the site can be remediated with the HWCF
monies available; and
• whether action taken at the site is likely to encourage the Federal EPA to
move the site to the NPL.
An informal committee made up of the Director of the Waste Management Division, its
Chief Engineer, and others discuss the sites and prioritize them. Each year, two or three
of the prioritized sites may receive attention. Sites are reprioritized every year.
As set forth above, when a new site is discovered, the DES lists a site on
CERCLIS if hazardous substances are found at the site or the Department suspects that
hazardous substances are located at the site. If responsible parties can be located, the DES
will attempt to negotiate a settlement to clean up the site. If a viable responsible party
cannot be located, or responsible parties are unwilling to enter into negotiations, the DES
may access its HWCF to conduct pre-remedial studies or a removal at the site. In
deciding whether to commit the HWCF monies to a site, the DES appears to review the
same factors discussed above: the potential health hazard; whether the hazard can be
addressed given the HWCF monies available; and whether pre-remedial studies will
encourage the Federal EPA to move the site to the NPL. In fact, hydro team studies are
sometimes used to raise a site's visibility or confirm its potential health hazard so that the
Federal EPA will be provoked to act. Public notoriety of the site may affect decision-
making.
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Site Remediation, Emergency Response and Cost Recovery
The New Hampshire State Superfund program is focused on removal actions and
pre-remedial investigations. The State has taken the lead on 7 NPL sites, however, so the
State program is not entirely pre-remedial in focus. The HWCF appears to be used almost
exclusively for pre-remedial activities. A detailed description of these activities in set forth
in Section IV of this Report.
Last year the DBS received $1,734,288 in settlement monies at NPL and CERCLIS
sites. The chart below sets forth the amounts received by site.
Site NPL or CERCLIS Site Amount
Dover Landfill NPL $ 73,349
Gilson Road and
Tinkham Garage NPL $1,315,086
Nashua Riverside Landfill
and Hudson Asbestos Area CERCLIS $ 345,853
According to the Legislative Budget Assistant's Report, the State has spent $76,304 at the
Dover Landfill site, and the Federal government spent $859,239. Legislative Budget
Assistant's Report at 34. At the Gilson Road and Tinkham Garage sites, the State has
spent $1,209,252 and the Federal government has spent over $18,000,000. Id. It is not
known how much money the State expended at the two CERCLIS sites. No information
was available regarding other settlements or recoveries at CERCLIS sites or other
hazardous waste sites.
Cleanup Standards
In most cases, the DBS claimed that site cleanup standards (ARARs) meet or
exceed the Federal standards. The DBS pointed to New Hampshire NPL Records of
Decision to document this claim.
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Public Participation
The DBS hired a summer intern to harmonize its State public participation
procedures with the Federal procedures. The intern interviewed EPA personnel and
reviewed the Federal guidelines. The DBS may hire a community relations coordinator in
the future. At present, the RPMs are responsible for public relations at each of their sites.
On NPL sites, the Federal procedures are followed. At non-NPL sites, public relations are
geared to the amount of interest displayed. There are no required formal procedures for
non-NPL sites. Generally, a press release and fact sheet are prepared for each site.
According to the Department, it has held numerous public meetings and maintains
an active public information program for all State and Federal Superfund activities,
especially for areas studied by the hydro team.
The DBS feels that the State has certain advantages over the Federal government in
community relations matters. The State is closer to the affected community, can contact
local officials and activists directly, and visit sites more frequently.
VI. PROGRAM OUTLOOK
Because New Hampshire has not yet completed its comprehensive waste sites
inventory, and because the HWCF has not been carefully managed, it is difficult to assess
the first 8 years of the New Hampshire Superfund program. Nevertheless, certain key facts
have emerged that characterize the program and are likely to affect its future.
Monies from the HWCF have been expended for a variety of purposes. In Fiscal
Year 1988, the HWCF was used to fund a household hazardous waste program, study
facility siting, pay the New Hampshire Attorney General for services rendered, pay
administrative costs associated with Fund administration, and conduct pre-remedial
investigations and removal actions. The program has focused for the most part on
removals and pre-remedial activities such as studies and investigations. Approximately
73% of HWCF monies supported pre-remedial investigations and removal actions.
It does not appear that any State HWCF monies have been used for remedial work.
In fact, the State Legislature has explicitly prohibited the DBS from using the HWCF on
projects that qualify for Federal Superfund assistance. Thus, in addition to its other uses, it
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is likely that the HWCF will continue to be used to support pre-remedial activities, mainly
at CERCLIS sites.
Even if it is used only for pre-remedial activities, the HWCF probably will not be
adequate to address the sites that are presendy on the CERCLIS because the financial
sources that support the fund (e.g., legislative appropriations, accrued interest and fines and
penalties) are unable to generate ample income to cover yearly expenses. For example, in
fiscal year 1988 the HWCF took in only 70% of what it spent According to the DBS, the
amount collected from fines and penalties in fiscal year 1988 was the maximum amount
that the Department feels it can collect in any year. Moreover, the DES does not feel that
monies collected through settlement and cost recovery will significantly contribute to the
HWCF, in spite of the large settlement award received during Fiscal Year 1988.
Additional sources of funding will be needed if the DES is to continue to carry out its
current level of pre-remedial and removal activities.
It is not clear whether the New Hampshire Legislature will contribute substantial
amounts to the HWCF. The Legislature can act by appropriating money from the general
fund, passing a bond act or using some other financial mechanism. To date the Legislature
has been reluctant to add more than a minimal amount of money to the Fund (average of
$78,000 per year over the past eight years). Without additional monies from the
Legislature, or an increase in the monies collected through fines, penalties, hazardous waste
fees and settlement/cost recovery, the HWCF may not be able to continue to support fully
the pre-remedial activities of the DES. Legislative aid for the HWCF will probably com-
pete with the allocation of money for the State's 10% match at fund lead Federal Super-
fund sites and other environmental programs.
Based on the information set forth in the Legislature Budget Assistant's Report, it is
clear that the DES should exercise more careful control over the HWCF. It must collect
accrued interest and properly credit the Fund for penalties, fines and fees collected.
Additionally, the State must determine whether its cost recoveries from Federal Superfund
sites at which no HWCF monies have been expended should be credited to the Fund.
The enforcement authorities in the state HWCF Law should provide the State with
effective negotiating clout and litigation muscle. Enforcement efforts might be enhanced if
the State empowered DES to collect civil penalties and punitive damages. At present, the
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HWCF law only contains provisions for criminal penalties. It may be difficult for the
State to bring a criminal action against responsible parties.
Once the DES completes its comprehensive waste sites inventory and implements
careful cost accounting over the Fund, it will be in a better position to determine precisely
the amounts needed for site cleanup and remediation. Until that time, based on the figures
available today, it appears that the HWCF will continue to be used by the DES as a
supplement to the Federal Superfund program, targeted to removal and pre-remedial actions
at CERCLIS sites.
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NEW JERSEY
OVERVIEW
New Jersey has over 1200 known or suspected hazardous waste sites, including 109 NPL sites, and a
vigorous and well-funded cleanup program. More than 800 people in the Slate's Department of Environmental
Protection (DEP) work on hazardous waste cleanup. New Jersey's Legislature has appropriated approximately
$235 million for cleanup to date, and in Federal FY 1988 the State received $281.1 million in Federal Super-
fund assistance. In FY 1989 Federal assistance to New Jersey's program declined to $113.1 million, or 18%
of available Superfund monies. The State remains, however, the leading recipient of Superfund assistance, a
position it has held for the past four years.
RP Participation New Jersey has also succeeded in obtaining extensive participation from respon-
sible parties through an aggressive enforcement program which seeks private funding for cleanup at every site.
RPs are encouraged to negotiate by the prospect of joint and several liability, the threat of treble damages,
and the perception that conducting a cleanup will ultimately be less expensive than reimbursing the State for
cleanup costs. Under the Hazardous Waste Enforcement program, privately funded minor remedial activities
(projects costing less than $100,000) in 1988 cost private parties $12.1 million and taxpayers $500,000.
Between July 1986 and December 1988, 135 privately funded major remedial projects cost private parties
$29.2 million, while State costs totalled $550,000. Additionally, the Responsible Party Cleanup Element,
which deals with more environmentally complex cases, has obtained from RPs $250 million in financial
commitments as of December 31, 1988. Finally, the Cost Recovery Element within the Division of Regula-
tory Affairs has obtained more than $37 million in Federal FY 89 from RPs for cleanup at complex, multi-
party sites which are being managed by the Publicly Funded Cleanup Element
Case Management As indicated above, publicly funded and privately funded cleanups are managed
by separate program elements within DEP. Within the program elements, sites are assigned to case manage-
ment teams. In order to channel cases through the cleanup program efficiently and consistently, the Bureau
of Planning and Assessment utilizes a case management strategy (CMS). The Bureau prioritizes sites using
the Severity Index Network (SIN), a uniform prioritization model which is a streamlined version of the HRS.
A SIN evaluation takes about 30 minutes to complete. To aid in assigning cases to the different program
elements, the Bureau has also developed a regulatory and remedial program hierarchy.
Environmental Cleanup Responsibility Act Under New Jersey's Environmental Cleanup Responsi-
bility Act (ECRA), enacted in 1983, industrial facilities that deal with hazardous substances cannot change
ownership or cease operations unless the DEP determines that the site is not contaminated, approves a cleanup
plan, or receives financial assurances that a cleanup will be performed. If the ECRA is violated, the DEP or
a party to the transaction may void the transfer. Approximately 1,200 new ECRA cases arise each year. As
of December 31, 1988, ECRA financial assurances totalled approximately $600 million. While the first years
of the program saw DEP overwhelmed with requests for ECRA reviews, an intensive program rehabilitation
has eliminated the backlog. ECRA program administration is funded through fees paid by the regulated
community. Program critics charge that ECRA is anti-industry and discourages manufacturing from remaining
in the State.
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I. INTRODUCTION
As a heavily industrialized State with over 1200 known or suspected hazardous
waste sites, New Jersey has been an early leader in the development of State hazardous
waste cleanup programs. The State's Spill Compensation and Control Act, enacted in 1976
and effective in 1977, served as a model for the development of CERCLA. In 1983 New
Jersey was also the first State to enact a law, the Environmental Cleanup Responsibility
Act, which requires industrial property to be certified as clean prior to transfer or cessation
of operations. The State Legislature's commitment to the cleanup program is impressive,
with strong funding support available through legislative appropriations, bond funds, and
taxes on transfers of hazardous substances. Public sentiment is also behind an aggressive
cleanup program, with a recent poll showing that 85% of the State's population favors a
clean environment even at the cost of jobs.
The New Jersey Department of Environmental Protection has over 800 staff
members devoting at least a portion of their time to hazardous waste cleanup activities.
The State has an aggressive enforcement program which seeks private funding for cleanup
at all sites. At the same time, the publicly funded cleanup program's sound financial base
enables the State to move quickly to address sites where RP participation is lacking.
The program is currently attempting to standardize procedures among its different
elements and to present a more "user friendly" image to the regulated community. Ixx>king
to the future, DEP personnel see the program maintaining its current level of activity, but
with a shift in program emphasis as more major remedial projects move from the RI/FS
phase to the construction phase over the course of the next decade. Operations and main-
tenance will demand an increasing amount of attention within the program as the
construction phase is completed on a growing number of projects. The larger, more obvious
sites within the State have already been discovered and are being addressed. An assessment
group uncovers and evaluates threats posed by new sites, which may present less obvious
environmental hazards.
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H. STATUTES
New Jersey's Spill Compensation and Control Act provides the primary statutory
authority for the State's hazardous waste cleanup program. NJSA §§58:10-23.11a through
58:10-23.11z (1976, amended 1979 through 1987). Under the Act, discharges of hazardous
substances are prohibited unless in compliance with a State or Federal permit. Hazardous
substances are defined to include petroleum products. The Act establishes the Spill
Compensation Fund and provides DEP with authority for conducting emergency response,
removals, and remedial actions and for recovering costs and assessing treble damages. The
Act also authorizes the DEP to direct RPs to remove or arrange for the removal of a
discharge of a hazardous substance. Liability for cleanup and removal costs under the Act
is strict, joint and several. Anyone who may be subject to liability for a discharge is
required to notify the DEP immediately.
The Environmental Cleanup Responsibility Act [ECRA] provides another component
of New Jersey's cleanup program, one that puts the burden of identifying and remediating
environmental problems squarely on the responsible parties. The statute requires transferrers
of industrial property to obtain either a DEP determination that the property is free from
contamination or DEP approval of a cleanup plan. Id. §§13:lK-6 through 13:1K-13 (1983).
The DEP may void a transfer if the transferrers do not comply with ECRA. The Act also
applies when the owners or operators of an industrial facility simply cease operations.
Related authorities are provided by several additional environmental statutes. The
Hazardous Substances Discharges Law requires the owner or operator of an industrial
establishment, or of real property which once was an industrial establishment, who knows
or suspects the occurrence of any hazardous discharge at the site, to inspect and report the
incident within 10 days. Id. §§13:1K-15 et seq. Under the State Penal Code, anyone who
purposely or knowingly causes a reportable hazardous discharge is guilty of a crime of the
second degree and subject to a fine of up to $100,000 and/or imprisonment of 5-10 years.
Recklessly causing a discharge carries a fine of up to $7,500 and/or imprisonment of 3-5
years. Id. §2C:17-2. Finally, the Water Pollution Control Act, id. §§58:10A-10 to -20,
requires all discharges of pollutants into both surface and ground water to be made in
conformity with a State or Federal pollutant discharge elimination permit.
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m. PROGRAM ORGANIZATION
The New Jersey Department of Environmental Protection [DEP] is the lead agency
responsible for hazardous waste cleanup activities. There are two DEP Divisions which are
accountable to the Assistant Commissioner for Hazardous Waste Management—the Division
of Hazardous Waste Management and the Division of Hazardous Site Mitigation. Pursuant
to a recent reorganization of the hazardous waste cleanup program, each Division
administers some aspects of the State's hazardous waste cleanup program. The Division of
Hazardous Waste Management has responsibility for the RCRA regulatory program, the
hazardous waste enforcement program, management of privately funded cleanups, and
program planning and initial site assessment for both Divisions. The Division of Hazardous
Site Mitigation administers the publicly funded cleanup program and provides in-house
technical support for both privately and publicly funded cleanups. Subdivisions within these
Divisions, called "elements" or "bureaus," are responsible for managing different cleanup
phases. The DEP finds that the difference between the administrative tasks associated with
privately funded cleanups versus those associated with publicly funded cleanups merits
placing them under the jurisdiction of separate program Divisions. Figure NJ-1 shows the
organization of the program elements within the Hazardous Waste Divisions which are
discussed below. In addition, the Division of Water Resources also administers cleanup of
sites where the sources of contamination are controlled and ground or surface water quality
is a major concern.
The Division of Hazardous Site Mitigation employs 216 people, all of whom are
involved in hazardous waste cleanup activities. The Division of Hazardous Waste
Management has a staff of approximately 400; roughly 58 work on major privately funded
cleanups, 115 are assigned to spill response and enforcement activities associated with
smaller contamination incidents, and 122 work on ECRA. Other personnel within the
Division work on RCRA, site assessment, and planning activities.
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FIGURE NJ-1
CLEANUP PROGRAM ORGANIZATION
ASST COMMISSIONER
HAZARDOUS WASTE MANAGEMENT
DIRECTOR
DIVISION OF HAZARDOUS WASTE MANAGEMENT
DIRECTOR
DIVISION OF HAZARDOUS SITE MITIGATION
DEPUTY DIRECTOR
HAZARDOUS WASTE OPERATIONS
DEPUTY DIRECTOR
RESPONSIBLE PARTY REMEDIAL ACTION
DEPUTY DIRECTOR PROJECT MANAGER
PUBLICLY FUNDED CLEAN-UP— OPERATIONS & MAINTENANCE
ASST DIRECTOR
HAZARDOUS WASTE
PLANNING
LBUREAU OF
PLANNING &
ASSESSMENT
ASST DIRECTOR
HAZARDOUS WASTE
REGULATION (HCRA)
ASST DIRECTOR
HAZARDOUS WASTE
ENFORCEMENT
_ BUREAU OF
COMPLIANCE &
TECH SERVICES
_ BUREAU OF
METRO
ENFORCEMENT
_ BUREAU OF
NORTHERN
ENFORCEMENT
BUREAU OF
CENTRAL
ENFORCEMENT
BUREAU OF
SOUTHERN
ENFORCEMENT
ASST DIRECTOR
INDUSTRIAL SITE
EVALUATION
(ECRA)
_ BUREAU OF
ENV. EVAL.
CLEANUP &
RESP. ASSMT
_ BUREAU OF
APPLICABILITY
& COMPLIANCE
ASST DIRECTOR
RESPONSIBLE
PARTY CLEAN-UP
_ BUREAU OF
FEDERAL CASE
MANAGEMENT
- BUREAU OF
STATE CASE
MANAGEMENT
1
ASST DIRECTOR ASST
REMEDIAL PLAN. PROGRA
& DESIGN
EU
BUREAU OF
CONSTRUCTION
BUREAU OF
SITE MQMT
REGION I
BUREAU OF
SITE MGMT
REGION II
ELEMENT
BUREAU OF
CONTRACT
MANAGEMENT
BUREAU OF
POLICY, PLAN., &
PROGRAMMING
ASST DIRECTOR
HAZARDOUS
SITE SCIENCE
BUREAU OF
COMMUNITY
RELATIONS
BUREAU OF
M6AS. & QUAL
ASSURANCE
BUREAU OF ENV.
EVALUATION A
RISK ASSESSMENT
SITE SAFETY
ft HEALTH
OFFICE
-------
The Bureau of Planning and Assessment, within the Division of Hazardous Waste
Management, administers the initial site evaluation (which includes a PRP search conducted
by the Hazardous Waste Enforcement Element) and assigns the case to the appropriate
Division and program element. Minor and straightforward problems involving a single
source and/or contaminant affecting a single environmental medium are handled through the
enforcement elements of either the Division of Hazardous Waste Management or the
Division of Water Resources. Both Divisions seek to administer privately funded cleanups,
but have the ability to access public funds when faced with recalcitrant RPs.
For more complex sites with multiple sources or contaminants which impact
multiple environmental media, the case will be assigned to the Division of Water
Resources, the Responsible Party Clean-Up Element, or the Publicly Funded Clean-Up
Element. The Division of Water Resources has the lead for more complex privately funded
sites where ground or surface water is the primary environmental medium involved and the
source is controlled or easily controlled. If the source is uncontrolled and one or more
PRPs are identified, the case will be assigned to either the Bureau of Federal Case
Management or the Bureau of State Case Management, both within the Responsible Party
Clean-Up Element. This Element currently manages approximately 400 large remedial
cases, with a backlog of about 100 cases which is increasing at a rate of 4-5 cases per
month. If a property transfer is involved, the case may be assigned to the Industrial Site
Evaluation Element, which handles ECRA administration, as discussed below under Special
Topic - ECRA. If no PRP is found or the PRP is unwilling or unable to participate, these
more complex cases are assigned to the Publicly Funded Clean-Up Element, which has a
current roster of approximately 98 sites.
Both Clean-Up Elements assign cases to case management teams, which generally
consist of three people~a manager, a technical coordinator, and a geologist. In the
Responsible Party Clean-Up Element there are 58 case managers who are each assigned
about 8 or 10 cases, while the Publicly Funded Clean-Up Element has about 24 site
managers for 98 sites. (A contaminated location is referred to as a case within the
Responsible Party Clean-Up Element, and as a site within the Publicly Funded Clean-Up
Element.) The two Elements remain in close communication concerning cases, which can
easily shift from one Division to the other. The Responsible Party Clean-Up Element also
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has negotiation teams which, in conjunction with enforcement attorneys from the Hazardous
Waste Enforcement Element of the Division of Regulatory Affairs, conduct negotiations
with PRPs.
Within the Division of Hazardous Site Mitigation, the Hazardous Site Science
Element provides a variety of scientific and technical support services to both the publicly
and the privately funded cleanup programs. The Hazardous Site Science Element contains
the Bureau of Environmental Evaluation and Risk Assessment, the Bureau of Environmental
Measurement and Quality Assurance, the Office of Site Safety and Health, and the Bureau
of Community Relations. The Bureau of Environmental Evaluation and Risk Assessment,
with a staff of 49, provides project review and expert scientific assistance in the areas of
environmental fate and transport, environmental impacts, contaminant characterization,
environmental and public health risk assessment, and toxicology. The Bureau of Environ-
mental Measurement and Quality Assurance's mission relates to the quality of the data
which form the basis for hazardous site remediation designs and subsequent evaluations.
This Bureau's staff of 36 collects or oversees the collection of environmental samples to
insure that the samples are representative and to maintain their integrity for later analysis.
The Office of Site Safety and Health, with a staff of 7, performs reviews of site conditions
and procedures to ensure that activities are performed in a manner to preclude impacts to
on-site personnel and off-site receptors. The Bureau of Community Relations, with 14 staff
members, coordinates site-connected public relations.
The DEP does not have the authority to enter into contracts worth more than
$7,500. Contracting authority rests with the Department of the Treasury, which works with
the Division of Hazardous Site Mitigation's Bureau of Contract Management to obtain and
administer contracts for work at publicly funded sites. The Department of Treasury's Toxic
Waste Procurement Unit employs five professionals who are located within the DEP
building; they are funded by the DEP. The Bureau of Contract Management staff includes
seven professionals, funded by the Spill Compensation Fund and the Hazardous Discharge
Site Cleanup Fund.
When a publicly funded site reaches the construction phase, it is transferred to the
Bureau of Construction, which must provide on-site managers to oversee the proper use of
State funds. DEP personnel emphasize that these on-site managers do not act as de facto
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partners of the site contractors, but serve in a watchdog capacity as regards the use of
State resources. It is anticipated that operations and maintenance of publicly funded projects
will be handled by a separate Operations and Maintenance group within the Division of
Hazardous Site Mitigation.
The Responsible Party Clean-Up Element's goal is financial self-sufficiency; this is
being accomplished by requiring RPs to pay the direct and indirect administrative costs
associated with cleanup. The Division of Hazardous Site Mitigation, which includes the
Publicly Funded Clean-Up Element, is funded through the Spill Compensation Fund; its
yearly administrative budget is approximately $12 million. Other positions throughout the
DEP which are related to site cleanup, such as spill response and enforcement staff
members, are funded by the Spill Compensation Fund.
Other Divisions within DEP, as well as other State agencies, also participate in
cleanup activities. The Division of Regulatory Affairs' attorneys review all Spill Act
Directives and provide case management assistance, particularly during negotiations with
RPs. In addition, the Cost Recovery Element within the Division of Regulatory Affairs
pursues private funding for cleanup at a select group of major, multi-generator sites, such
as landfills and hazardous waste transfer or storage facilities where the cleanup is being
managed by the Publicly Funded Clean-Up Element. The Division of Regulatory Affairs'
staff attorneys also work with personnel from the Department of Law and Public Safety's
Division of Law, which represents the New Jersey DEP in all formal proceedings,
including administrative hearings. The Environmental Protection Section in the Division of
Law represents the DEP in civil actions, while criminal enforcement is conducted by the
Environmental Prosecution Task Force in the Division of Criminal Justice. Approximately
20 attorney work-years within the Environmental Protection Section are devoted to cleanup
activities.
The DEP's Division of Water Resources is responsible for administering the New
Jersey Water Pollution Control Act through the issuance of permits for discharges to
surface and ground water. This Division also develops ground-water and surface-water
quality standards, permit discharge limitations, and cleanup levels for ground water. When
contaminated ground water affects drinking water supplies, either public or private, the
Bureau of Water Supply in the Division of Water Resources conducts investigations of the
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extent of water supply contamination and offers low-interest loans to enable affected
municipalities to provide alternative water supplies. In addition, the Division supplies the
geologists for the Clean-Up Elements' case management teams; the geologists interpret
ground-water and soils issues and comment on surface-water issues at sites.
The Office of Public Participation within the DEP coordinates general educational
and media activities. The State's Department of Health has assisted in at least one case by
preparing fact sheets for local physicians on the health effects of chromate waste, 300
million tons of which was disposed of at 117 locations throughout Hudson County.
The day-to-day relationship between EPA Region n and the DEP's program
personnel is described as good, although there is occasional friction over conflicting
funding and enforcement priorities. The DEP does not yet have a final Superfund
Memorandum of Agreement (SMOA) with EPA, but a draft SMOA is currently receiving
upper management review by DEP before transmission of the document to EPA for
approval. Upper management and enforcement personnel within DEP feel it is important to
develop a SMOA, while it is not a priority with case managers and other technical
personnel.
IV. FUNDING
New Jersey's cleanup program has been consistently and strongly supported by the
State Legislature, which has been willing to appropriate substantial sums for the program.
In addition, the State has been receiving the lion's share of available CERCLA dollars and
has aggressively pursued private funding. As of December 31, 1988, approximately $2.2
billion in public and private funds have been committed to cleanup in New Jersey. The
various sources of funding are discussed below and are shown in Table NJ-1.
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TABLE NJ-1
DOLLARS COMMITTED TO CLEANUP AS OF
DECEMBER 31, 1988
(IN MILLIONS OF DOLLARS)
SOURCE
GENERAL FUND
SPILL FUND
BOND FUND
SUPERFUND++
RP FINANCIAL ASSURANCE
ECRA FINANCIAL ASSURANCE
RCRA FINANCIAL ASSURANCE+++
1984 +
$ 0.0
80.1
100.0
52.7
22.9
5.8
N/A
1985 +
$150.0
88.2
100.0
75.7
30.7
83.5
N/A
1986 +
$150.0
96.0
300.0
93.1
53.0
323.8
6J5
1987 +
$190.0
118.3
300.0
148.8
82.8
539.4
32.6
1988 +
$235.0
143.3
300.0
429.9
246.7
719.5
103.9
TOTALS
$261.5
$528.1
$1,022.4
$1,411.9
$2,178.3
+ Represents calendar year contributions and all prior year commitments.
++ Superfund dollars awarded in Federal Fiscal Year ending September 30th of each year.
Financial assurance associated with facilities that have approved closure plans where the
cost estimate for closure is greater than $100,000.
RP = Responsible Party N/A = Not Available
ECRA = Environmental Cleanup Responsibility Act
RCRA = Resource Conservation and Recovery Act
(Reprinted from Hazardous Waste Program Status Update: April 1989r NJDEP Hazardous Waste Management
Programs)
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Two separate State funds support the cleanup program--the Spill Compensation Fund
and the Hazardous Discharge Site Cleanup Fund. The main source of revenue for the Spill
Compensation Fund is a transfer tax on hazardous substances, including petroleum products,
which generated approximately $21.9 million in FY 89. This Fund also is credited penalties
related to the Spill Compensation and Control Act, any interest on the Fund, and Fund
monies recovered from RPs. Cost recovery contributed $2.8 million in FY 89 and interest
contributed $3.2 million. The cash balance as of 8/8/89 is $68.8 million and the cumulative
revenue since the inception of the Fund is $180.7 million. The Spill Compensation Fund is
available for administrative costs, emergency response, removals, studies and design,
remedial actions, operations and maintenance, and CERCLA match. The Spill Compensation
Fund supports DEP program expenses, including personnel costs.
The Spill Compensation Fund is also available to settle third-party claims for
personal or property damages resulting from a discharge of a hazardous substance. A one-
year statute of limitations applies, measured from the date of discovery of the damage. The
DEP must attempt to arrange a settlement between the claimant and the RP, but if the
source of the discharge is unknown or cannot be determined, the DEP must settle the claim
against the Spill Compensation Fund. 1985 was the first year claims were awarded. Since
then 526 claims have been paid for a total of approximately $2,361,000. In FY 88, 260
claims were awarded for a total of $567,024. Most claims are filed by residential property
owners seeking compensation for the costs of obtaining a municipal water supply hook-up;
these claims are rarely for more than $2-3,000 each; $40 million in Fund monies are
currently authorized for payment of pending third-party claims.
The State turns to the Spill Compensation Fund first to support cleanup activities,
but the Hazardous Discharge Site Cleanup Fund is available for the same purposes. This
Fund is credited legislative appropriations, termed General Funds, and bond authorizations.
In 1986, the Legislature approved an appropriations package which provides the State
cleanup program with $225 million over a five-year period ending in 1992. In 1988, the
Legislature approved the $60 million capitalization of a Water Supply Replacement Trust
Fund to be paid from the Hazardous Discharge Site Cleanup Fund. At the same time,
however, the Legislature approved an additional $45 million appropriation for 1993. There
are also $300 million in voter-approved bond issues, $100 million of which have been
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appropriated, although no bonds have been offered for sale. The DEP does not anticipate
the need to use bond funds at least through the end of FY 90. The Hazardous Discharge
Site Cleanup Fund shows, as of 8/8/89, $14 million in cash and $62.7 million in
receivables--$12.7 million in Legislative appropriations still due from FY 89, which ended
on 6/30/89, and $50 million in appropriations credited for FY 90.
New Jersey also receives substantial assistance from the Federal government. In
Federal FY 88, the State received $281.1 million. Due to increased requests for funds from
other states, the State received less financial assistance in Federal FY 89; its share was
reduced to $113.1 million-approximately 18% of available Superfund monies.
As of December 31, 1988, the State had expended $169.5 million of the State and
Federal public funds available for remedial activities at State-lead sites. Of that amount
$78.2 million was provided by the Spill Fund, $66.2 million came from Hazardous
Discharge Site Cleanup Fund sources, and $25.1 million was from the Federal Superfund
program.
Due to its aggressive enforcement stance, the State has been relatively successful in
obtaining private funds for cleanup activities. In calendar year 1988, the Hazardous Waste
Enforcement Element secured $12.1 million in private monies for 632 privately funded
minor remedial activities (projects costing less than $100,000). State expenditures on these
projects was approximately $500,000. Between July 1986 and December 1988, the Element
also saw to completion 135 privately-funded major remedial projects (costing over
$100,000) at a cost to private parties of $29.2 million. The cost to taxpayers for these sites
was $550,000. In addition, the Responsible Party Clean-Up Element, which deals with more
environmentally complex cases, also actively pursues private funding for its cleanups. As of
December 31, 1988, RPs have provided $250 in financial commitments for this Element's
cases. Finally, the Cost Recovery Element within the Division of Regulatory Affairs seeks
private funding for complex, multi-party sites which are being managed by the Publicly
Funded Clean-Up Element. In federal FY 89, the Cost Recovery Element obtained in
excess of $37 million for cleanup activities.
All DEP personnel contacted expressed confidence in the Legislature's continued
willingness to support the hazardous waste cleanup program through substantial financial
commitments. The Legislature's capitalization of the Water Supply Replacement Trust Fund
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with $60 million in uncommitted Hazardous Discharge Site Cleanup Fund monies, however,
highlights the vulnerability of uncommitted funds to political pressures.
V. REMEDIATION PROCESS
Case Management Strategy
The Bureau of Planning and Assessment, within the Division of Hazardous Waste
Management, is responsible for administering an initial site evaluation, which includes a
PRP search conducted by the Hazardous Waste Enforcement Element. The Bureau then
assigns cases to the appropriate program element. To assist in this task, the Bureau in 1987
developed a case management strategy (CMS) which enables it to characterize sites and
channel them through the program in a streamlined and consistent manner, diereby avoiding
duplicative and inefficient actions.
The Bureau is compiling a computerized inventory of die sites diat are known or
potential hazardous waste remediation cases. This database, which is used only for internal
DEP purposes, is referred to as the Comprehensive Site List (CSL). CSL sites which are
inactive or unassigned are prioritized for assessment based upon general criteria, such as
SIC code and quantity of hazardous waste. This list of prioritized sites is referred to as the
Site Assessment Priority List These sites are once again prioritized for remediation in light
of the information gained during the assessment The assessment is based upon die Severity
Index Network (SIN), a uniform prioritization model which is a streamlined version of the
HRS. A SIN evaluation can be completed in 30 minutes. Eventually, the SIN is to be
replaced by the Remedial Priority System (RPS), currently under development The RPS
will be specifically designed to prioritize sites for remedial activity in consideration of any
proximate risks, overall risk, cost and other concerns specific to New Jersey.
To aid in case assignment once the assessment and prioritization are complete, the
Bureau of Planning and Assessment has developed a regulatory and remedial program
hierarchy for case assignments. This hierarchy is based upon the type of case involved and
the different elements' ability to effectuate remedial action and maximize RP participation.
The Bureau then tracks cases through the different program elements, overseeing their
progress and, if needed, reassigning them.
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Emergencies involving hazardous materials are not processed through the CMS, but
are handled by the DEP's Division of Environmental Quality, Bureau of Emergency
Response. This Bureau will respond to fires, explosions and some accidental spills. After
stabilizing the emergency and overseeing contractor performance under the DEP's
Emergency Contract, the Bureau of Emergency Response will refer the case to the
appropriate regional enforcement office, or to the Bureau of Planning and Assessment if it
poses a long-term threat.
Minor and straightforward problems involving a single source or contaminant which
impacts a single environmental medium are handled through the enforcement elements of
either the Division of Water Resources or the Division of Hazardous Waste Management
For more complex sites with multiple sources or contaminants, the case will be assigned to
the Bureau of Federal Case Management or the Bureau of State Case Management, both
within the Responsible Party Clean-Up Element. If the case involves a controlled source,
however, and ground or surface water is of major concern, it will be assigned to the
Division of Water Resources. The Responsible Party Clean-Up Element currently manages
approximately 400 large remedial cases. If a transfer or closure of the site is involved, the
case may be assigned to the Industrial Site Evaluation Element, which handles ECRA
administration, as discussed below under Special Topic -- ECRA. If no PRP is found or
the PRPs are unwilling or unable to participate, the case is assigned to the Publicly Funded
Clean-Up Element, which has a current roster of about 98 projects. When a publicly
funded site reaches the construction phase, it is transferred to the Bureau of Construction,
which must provide on-site managers to oversee the proper use of State funds.
Enforcement Authority
Under the Spill Compensation and Control Act, liability for cleanup and removal
costs is strict, joint and several. NTS A §58:10-23. llg(c). Priority liens can be asserted
against the property that is the site of the discharge, while a non-priority lien can be
asserted against all real or personal property of the discharger in order to secure payment
of cleanup and removal costs. Id. §58:10-23.llf(f). DEP authority to issue administrative
cleanup orders, called Spill Act Directives, is also contained in the statute. Id. 58:10-
23.1 If (a). Dischargers may be ordered to clean, up a site and treble damages are available
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for failure to comply with a Spill Act Directive. Id. §58:10-12. llf(a). The New Jersey
Supreme Court has interpreted dischargers to include persons who are in any way
responsible for the hazardous substance which was discharged. In the Matter of Kimber
Petroleum Corp.. 539 A.2d 1181 (NJ. 1988), appeal dismissed 102 L. Ed.2d 349 (1988).
Generators, owners, operators, transporters, brokers, and other parties therefore can all be
considered dischargers for purposes of the Act.
A Spill Act Directive is always issued at every stage in a case, even if the RP is
cooperating, in order to preserve the treble damages option, although the State has never
collected treble damages. Moreover, the New Jersey Supreme Court has implied a "good
cause" defense to the imposition of treble damages to avoid constitutional infirmity. Kimber
Petroleum. 539 A.2d at 1189; In the Matter of J.I.S. Industrial Service Company Landfill.
539 A.2d 1197, 1203 (NJ. 1988). The "good cause" defense requires "an objectively
reasonable basis for believing that the DEP directive was either invalid or inapplicable." In
the Matter of J.I.S.. 539 A.2d at 1203. The DEP interprets the Act as providing
administrative consent order authority, and has special teams within the Responsible Party
Clean-up Element which conduct negotiations with RPs.
The DEP may seek an injunction to prohibit the continuation of any violation of the
Spill Compensation and Control Act. NJSA §58:10-23. llu. Civil penalties of up to
$50,000/day are also available for a violation of the Act. Id. Criminal penalties are only
applicable under the Act where false information is knowingly given as part of a claim for
damages. There is no statutory authority for citizen suits.
Under the State Penal Code, anyone who purposely or knowingly causes a
reportable hazardous discharge is guilty of a crime of the second degree and subject to a
fine of up to $100,000 and/or imprisonment of 5-10 years. Recklessly causing a discharge
carries a find of up to $7,500 and/or imprisonment of 3-5 years. Id. §2C:17-2.
RP Participation
There are currently about 400 cases in the Responsible Party Clean-Up Element,
compared with 85 in the Publicly Funded Clean-Up Element. The State has an aggressive
enforcement program which seeks private funds for cleanup in all cases. According to DEP
personnel, the possibility of joint and several liability for all cleanup costs associated with
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a site brings RPs to the negotiating table. The threat of liability for treble damages under
the Spill Compensation and Control Act is also a motivating factor in RP participation,
although the State has never actually had to enforce the treble damages provision. In
addition, the ability of the State to move quickly to spend public funds for remediation is a
good incentive to settle. There is a perception within the regulated community that publicly
funded projects are more expensive than privately funded cleanups, and financially solvent
RPs are aware that at some point they will be required to reimburse the State for expendi-
tures of public funds.
The point at which an RP will decide to enter into an AGO, however, depends upon
the type of case involved. A case will be referred to the Publicly Funded Clean-Up
Element if the RPs refuse to settle, and in cases with multiple RPs, they tend to stall
through the RI/FS phase. After the RI/FS phase is completed by the State, and the RPs can
see the remedial situation and attendant costs they are facing, they will often sit down to
negotiate an AGO.
Cleanup Standards/Design
The DEP currently employs a site-by-site approach in setting cleanup standards,
using ARARs where applicable and developing action levels for soil. Water quality cleanup
standards are determined by the Division of Water Resources; soil action levels are
determined by cleanup program personnel. In making its decision on cleanup standards
applicable to a particular site, the Division of Water Resources will consider existing State
and Federal standards for surface water, ground water, and drinking water. The DEP's Soil
Standards Committee is working to establish soil cleanup standards. The cleanup program
has no set design criteria for cleanup projects, but sets best-available-technology (BAT)
limits on its water quality cleanup standards.
Contracting Practices
Large construction contracts (over $250,000) are issued in an open, competitive
manner. Certain lab and engineering contracts have been approved on a term contract basis,
with a prequalified list. While the DEP has in-house lab capability, it is generally used for
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monitoring activities. For investigation and remediation activities, the DEP uses term
contracts.
Cleanup Progress
Since New Jersey's hazardous waste cleanup program has been active throughout the
1980s, the DEP is seeing an increasing number of large projects shifting to the construction
and operations and maintenance phases. Meanwhile, an active assessment group is
uncovering and evaluating new sites.
During calendar year 1988, the Hazardous Waste Enforcement Element saw to
completion 632 minor, privately funded remedial projects (costing less than $100,000), and
135 major, privately funded projects. Table NJ-2 shows the status of program activity as of
12/31/88, while Table NJ-3 shows completed activities through that date.
Public Participation and Community Relations
The Spill Compensation and Control Act requires that all cleanup actions be in
accordance with the NCP to the greatest extent possible. To that end, the DEP follows
NCP procedures regarding public participation during State cleanups. As a matter of policy,
there is a public kick-off meeting prior to contract signing at the various cleanup phases.
The Bureau of Community Relations, within the Division of Hazardous Site Mitigation,
coordinates site-related public messages.
VL SPECIAL TOPIC - ECRA
The Environmental Cleanup Responsibility Act (ECRA), enacted in 1983, applies to
owners and operators of industrial facilities which generate, transport, handle or dispose of
hazardous substances and wastes and which fall into the Standard Industrial Classification
(SIC) Code number groups of 22-39, 46-49, 51, and 76. There are roughly 15,000 indus-
trial establishments in New Jersey which at some time may fall under ECRA. Before
transferring the facility or ceasing operations, ECRA requires that the owner or operator
obtain either 1) DEP approval of a Negative Declaration that the site is not contaminated,
2) approval of a cleanup plan specifying remediation to occur prior to the transfer, or 3) an
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TABLE NJ-2
Summary* of New Jersey's Hazardous Waste Remedial Program
UNDERWAY REMEDIAL PROGRAM PROJECT ACTIVITY+
RI/FS
Publicly Funded
Privately Funded
TOTAL
DESIGN
Publicly Funded
Privately Funded
TOTAL
CONSTRUCTION
Publicly Funded
Privately Funded
TOTAL
NPL SITES
PROJECTS
49
29
78
PROJECTS
20
4
24
PROJECTS
10
12
22
41
AT SITES
45
24
69
160 RI/FS
AT SITES
18
3
21
36 DESIGN
AT SITES
10
11
21
NON-NPL SITES
PROJECTS
11
71
82
PROJECTS
PROJECTS
1
11
12
AT SITES
11
65
76
COMPLETED
AT SITES
1
10
11
PROJECTS COMPLETED
PROJECTS
5
14
19
AT SITES
5
11
16
TOTAL SITES
PROJECTS AT
60
100
160
AT 145 SITES
PROJECTS AT
21
15
36
AT 32 SITES
PROJECTS AT
15
26
41
56
89
145
SITES
19
13
32
SITES
15
22
37
CONSTRUCTION PROJECTS COMPLETED AT 37 SITES
* As of December 31, 1988
+ More than one RI/FS, Design and/or Construction may be required to totally remediate a site. Some actions
undertaken at a site will not require all phases of the remedial process. Therefore, the number of projects provided
may differ from the total number of sites. However, these statistics provide an accurate representation of the level of
effort required for remediation.
(Reprinted from Hazardous Waste Programs Status Update: April 1989T NJDEP Hazardous Waste Management
Programs)
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TABLE NJ-3
Summary* of New Jersey's Hazardous Waste Remedial Program
COMPLETED REMEDIAL PROGRAM PROJECT ACTIVITY+
RI/FS
Publicly Funded
Privately Funded
TOTAL
DESIGN
Publicly Funded
Privately' Funded
TOTAL
CONSTRUCTION
Publicly Funded
Privately Funded
TOTAL
NPL SITES
PROJECTS
39
18
57
PROJECTS
23
15
~38
AT SITES
32
16
48
104 RI/FS
AT SITES
19
13
32
NON-NPL SITES
PROJECTS
3
44
47
AT SITES
3
36
39
TOTAL SITES
PROJECTS AT
42
62
104
SITES
35
52
87
PROJECTS COMPLETED AT 87 SITES
PROJECTS
1
22
23
61 DESIGN PROJECTS
PROJECTS
36
31
67
118
AT SITES
27
24
51
PROJECTS
13
38
51
AT SITES
1
19
20
COMPLETED
AT STTES
11
37
48
PROJECTS AT
24
37
~~61
AT 52 SITES
PROJECTS AT
49
69
118
SITES
20
32
52
SITES
38
61
99
CONSTRUCTION PROJECTS COMPLETED AT 99 SITES
* As of December 31. 1988
+ More than one RI/FS, Design and/or Construction may be required to totally remediate a site. Some actions
undertaken at a site will not require all phases of the remedial process. Therefore, the number of projects provided
may differ from the total number of sites. However, these statistics provide an accurate representation of the level of
effort required for remediation.
(Reprinted from
Programs)
Waste Programs Status Update: April 1989. NJDEP Hazardous Waste Management
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Administrative Consent Order (AGO) allowing the transfer to proceed prior to compliance
as long as either party provides financial assurance that the cleanup will be performed.
The DEP may impose penalties of up to $25,000 per day for any violation of
ECRA, and either the DEP or a party to the transaction may void the property transfer.
Although no transfers have been voided to date, the possibility of voidance has caused the
lending community in New Jersey to be very stringent with its clients regarding ECRA
compliance. The ability to void transfers has thus had the effect of transforming the banks
into de facto ECRA enforcers. This results in the DEP receiving approximately 5-6,000
requests per year for a Determination of Applicability of ECRA to a particular transaction.
A fee is charged for processing these requests, and ECRA is found to be inapplicable in
95% of these determinations. In transfers where the facilities clearly fall within ECRA's
purview, the owner or operator will skip the Determination of Applicability phase and
simply file with the DEP an initial notice of the sale.
Approximately 250 requests for a Determination of Applicability are answered
affirmatively each year and are included in the 1,200 initial notice applications that are
received, on average, each year. These cases are divided into three separate case
management units based on the complexity of the site. Sixty-three percent (63%) of the
cases are assigned a "Low Environmental Concern" rating, indicating that, while ECRA
applies, the site is clean and a Negative Declaration will be approved; processing time is
approximately 120 days. "Medium Environmental Concern" cases (about 25%) present an
operations history which creates concern and the owners or operators will be required to
demonstrate that a problem does not exist; processing time is roughly 180 days. "High
Environmental Concern" cases (another 12%) require more complex evaluation, such as
those dealing with petroleum refineries, chemical plants, and other businesses which process
significant amounts of hazardous substances or wastes.
About 4% of ECRA cases involve an application for an AGO allowing the trans-
action to occur prior to compliance; these applications are processed in about 21 days'
time. The DEP obtains financial assurances from the parties sufficient to clean up the
worst-case scenario. As of December 31, 1988, financial assurances totalled approximately
$600 million. ACOs contain stipulated penalties and strict delivery dates.
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The first few years of the program found the DEP overwhelmed by the number of
ECRA reviews requested. Starting in 1986, an extensive program review and rehabilitation
initiative has resulted in an elimination of the case backlog and a stabilizing of the
workload. In FY 88, 824 Negative Declarations were issued and 87 formal Cleanup Plans
were approved; figures for the first half of FY 89 are consistent with this activity level.
Twenty-six (26) facilities completed formal Cleanup Plans in FY 88, while 200 completed
other cleanup activities with ECRA oversight. Two-hundred eleven (211) ACOs were issued
inFY 88.
Compliance with ECRA does not prohibit the DEP from directing site cleanup under
any other statute, such as the Spill Compensation and Control Act If a site is being
managed under another DEP cleanup program at the time ECRA becomes applicable,
however, it will be transferred for administration under the ECRA program. Communication
among DEP personnel ensures that Spill Act and ECRA cleanup requirements are
consistent, and the same case management team may follow a case from the Responsible
Party Clean-Up Element to the ECRA program.
Within DEP, ECRA is administered by the Industrial Site Evaluation Element of the
Division of Hazardous Waste Management The program staff numbers approximately 122.
ECRA administrative costs were initially covered by the Spill Compensation Fund, but the
program is now supported entirely by the regulated community through fees related to
ECRA activities. In FY 89, the program generated $5.3 million in fees. Projected revenues
for FY 90 are $6.4 million; any excess may be rolled over from year to year.
The Industrial Site Evaluation Element is divided into two bureaus. The Bureau of
Environmental Evaluation Cleanup and Responsibility Assessment (BEECRA) manages
technical review and remediation oversight, while the Bureau of ECRA Applicability and
Compliance (BEAC) issues applicability determinations and ACOs, conducts compliance
monitoring, and provides administrative support. Sixty-five (65) personnel are case
managers and/or supervisors who assess and approve initial cleanup plans, sampling, and
final cleanup. There are 25 application and enforcement document processors who
administer the fee system and the AGO process. Sixteen (16) staff members are technical
coordinators and 12 or 13 are geologists who are on assignment from the Division of
Water Resources.
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Some have charged that ECRA is anti-industry and discourages manufacturing from
remaining in New Jersey. Karl Delaney, Assistant Director for the Industry Site Evaluation
Element, maintains that industry values "ECRA-clean" property and that any movement of
manufacturing out of the State is attributable to a general shift to service industries in New
Jersey and the greater availability of cheaper industrial labor in other parts of the country.
ECRA program administration is in the process of being streamlined through the
adoption of standard operating procedures (SOPs), the development of teambuilding and
increased communication among program personnel, and the use of model documents.
Enforcement is also being given greater priority; enforcement actions are expected to
increase from an average of 18 per year to between 80 and 100 in 1989.
Noteworthy among ECRA's successes is the AGO negotiated at the time of the
merger of General Electric Company and RCA Corporation. RCA was required to post
$35.6 million in surety bonds and letters of credit to cover potential cleanup costs at RCA's
28 New Jersey locations.
VIL PROGRAM OUTLOOK
Since New Jersey has taken the lead over other States in both the size and aggres-
siveness of its cleanup efforts, its program has progressed further toward its cleanup goals
than have most other programs. As a result of this maturation process, DEP is facing
several new challenges which deserve mention.
First, a growing number of projects are reaching both the construction and the
operations and maintenance phases. This trend will require a gradual shift in the balance of
program resources, which may be difficult to accomplish without draining DEP resources
away from ongoing RI/FS and Design activities. In addition, DEP personnel mentioned
unexpected technological problems and costs associated with ongoing operations and
maintenance activities. For example, the preferred clay for site-capping contains an ion that,
when exposed to air, produces sulfuric acid. The acid kills the vegetation covering the cap,
necessitating replanting and/or the application of lime to the cap.
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In addition, the State is beginning to address sites where the sources of
contamination are more difficult to ascertain. DEP personnel feel that the more obvious
sites have largely been discovered and are being addressed. They are now uncovering sites
which will require greater investigative activity and, potentially, more sophisticated
engineering solutions.
While the funding support for New Jersey's hazardous waste cleanup program has
been consistently and impressively strong, the potential for an erosion of this funding base
also clearly exists. The DEP is seeing a large reduction in its share of Federal monies as
other States compete more aggressively for available funds. The State Legislature also
recently capitalized a Water Supply Replacement Trust Fund with $60 million in
uncommitted Hazardous Discharge Site Cleanup Fund monies, highlighting the vulnerability
of uncommitted cleanup funds to competing legislative initiatives. If it does prove
increasingly difficult to trace contamination sources for newly discovered sites, private
funding may be less available in the future.
Finally, other States should take great interest in monitoring the ability of the ECRA
program in preventing future Spill Act cases. While the program has made great strides in
a relatively short period of time, many of its successes involve negotiating financial
assurances rather than completing actual remedial activities.
The elements which have spurred New Jersey's cleanup program innovations-high
population density, intense industrial development, and strong public support for site
remediation-will likely remain constant for the foreseeable future. It therefore follows that
expectations are high that the State will continue in its leadership role as it confronts the
challenges ahead.
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NORTH CAROLINA
OVERVIEW
North Carolina's legislature has designed a superfund program to facilitate the cleanup of State
inactive hazardous waste sites without severely jeopardizing the financial status of North Carolina's businesses.
Appropriations are virtually the sole source of funding for the State's small Inactive Hazardous Sites Cleanup
Fund, which has received a total of $600,000 since its inception in 1987. More than half of the funding for
the State superfund program staff comes from Federal grants, and the State relies on the Federal program to
conduct most emergency response actions.
Reliance on Voluntary Cleanups Because of funding limitations, the program is presently focusing
on encouraging voluntary cleanups rather than initiating enforcement actions or State-funded cleanups.
Program officials view publication of the State Priority List and provisions for recording the presence of
hazardous waste on the deed for a site as the principal methods for pressuring RPs into voluntary cleanup
efforts. The North Carolina statute also encourages RP participation through a number of provisions. The State
must solicit RP cooperation before issuing orders or starting its own cleanup efforts. When an RP performs a
voluntary cleanup at a non-NPL site, its liability for the cleanup is limited to $3 million, it is exempted from
most of the requirements for public participation in the cleanup process, and the site is not included on the
State Priority List.
Size of Program and Problem North Carolina's Superfund Section has twenty employees, most of
whom work on Federal CERCLA matters. Four employees are assigned to State superfund issues, three of
them part-time. Since its establishment in 1987, the State program has focused on identifying all inactive
hazardous substances sites in the State, and has begun to prioritize these sites using a system similar to the
federal Hazard Ranking System. Of approximately 800 sites in North Carolina on CERCLIS, the State has
performed preliminary assessments on about 775 and site investigations on 200. There are 85 sites on the
State Priority List and 22 North Carolina sites on the NPL, 20 final and 2 proposed.
I. INTRODUCTION
The North Carolina superfund program was initiated in July 1987 with the enact-
ment of the North Carolina Inactive Hazardous Sites Law. N.C. Gen. Stat. §130A-310
through -310.12 (July 1987, amended June 1989). Although various groups within the
legislature had pushed since 1984 for state superfund legislation that would complement the
federal law, it was not until 1987 that a bill was finally passed. The 1987 statute
mandated the development of information on the status of hazardous waste sites in North
Carolina, encouraged voluntary cleanups, and authorized a cleanup fund with cost recovery
authority.
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The North Carolina superfund program is administered by the Superfund Section
within the Solid Waste Management Division of the Department of Environment, Health,
and Natural Resources. This Section oversees state-fund cleanups of inactive sites as well
as state participation in federal remedial actions. If there is evidence of hazardous waste
disposal after November 1980, the site is handled by the State's RCRA program,
administered by the Hazardous Waste Section within the Solid Waste Management
Division.
The Superfund Section has concentrated during its first two years on the compilation
of information about hazardous waste sites in the state. The first State Inactive Hazardous
Sites Inventory was published in May 1989 and listed 85 sites on the State Priority List.
North Carolina has identified approximately 600 additional sites at which contamination is
suspected, but more data is needed to determine their priority status. North Carolina has
20 sites on the National Priority List with 2 additional sites proposed.
The North Carolina legislature has sent clear signals that it wants a phased-in
superfund program that will keep North Carolina companies in business while still
achieving some cleanup activity in the State. This philosophy is evident in the level of
funding provided to the Inactive Hazardous Sites Cleanup Fund for State cleanup activities.
Since 1987 the legislature has appropriated a total of only $600,000 to the Fund, of which
$344,000 has been expended for one removal action. The Fund now contains $256,000.
A study on potential funding sources prepared recently by the Governor's Waste Manage-
ment Board recently concluded that general appropriations was the most acceptable method
of funding in North Carolina.
One of the primary enforcement mechanisms provided by the statute~the authority
to perform a state cleanup and to recover costs—is not being implemented at this time
because of the lack of funding. Consequently, the Superfund Section is focusing on
encouraging voluntary cleanups rather than initiating enforcement actions or state-funded
cleanups. Program officials view deed recordation and publication of the State Priority List
as the principal methods of pressuring responsible parties into voluntary actions. The state
superfund act encourages voluntary cleanups with two unusual provisions: 1) a $3 million
cap on responsible party liability if a voluntary cleanup is performed; and 2) the exemption
from most of the public participation requirements for voluntary actions.
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At present, staff time is fully occupied with CERCLA issues and the oversight of
voluntary efforts. The program is developing a strategy for identifying responsible parties
and determining resources necessary for a strong enforcement program. While program
officials think that voluntary cleanup efforts will address a large number of sites, the
voluntary process will not clean up all sites. Therefore, once voluntary actions decline,
program officials recognize they will need to shift to a greater emphasis on enforcement.
They hope to convince the legislature that statutory changes and increased funding are
necessary.
IL STATUTORY PROVISIONS
Inactive Hazardous Sites Act
The primary authority for North Carolina's hazardous waste cleanup program lies in
the Inactive Hazardous Sites Act (fflSA), N.C. Gen. Stat. §§130A-310 through -310.12
(July 1987, amended June 1989).
Enforcement Authority The THSA provides the State with the authority to order a
responsible party (RP) to conduct monitoring, testing, and analysis whenever the State
determines that there is a release, or substantial threat of a release, of a hazardous
substance into the environment from an inactive hazardous substance or waste disposal site.
N.C. Gen. Stat. §130A-310.1. Prior to entry of such an order, the State must first solicit
cooperation from the RP. Id. If the party fails to take such action, or if the State is
unable to locate an RP, the State may perform the testing using funds from the Inactive
Hazardous Sites Cleanup Fund (Cleanup Fund). Id.
If the State issues a written declaration that a site endangers the public health or the
environment, the State may order an RP to develop and implement a remedial action
program. N.C. Gen. Stat. §130A-310.3. "Where possible," however, the State must first
seek the cooperation of the RP or any other appropriate State or federal government to
clean up the site. Id. Whenever the RP fails to clean up or if an RP cannot be found,
the State may do so with funds from the Cleanup Fund. N.C. Gen. Stat. §130-310.6.
After completion of the cleanup action, the State must issue an order demanding payment
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from the RPs, and bring an action for reimbursement if payment is not made promptly.
N.C. Gen. Stat. §§130A-310.6(a)(3) and 130A-310.7(a). In such a court action, the State
must show that a danger to public health or the environment existed and that the State
complied with the fflSA. N.C. Gen. Stat. §130A-310.7(a).
If an imminent hazard exists which is likely to cause serious harm to public health
or environment before a remedial action plan can be developed, the State may order an RP
to take immediate action, or may seek an injunction. N.C. Gen. Stat. §130A-310.5. The
statute still requires solicitation of RP cooperation prior to entering the order unless the
harm to the public or the environment would be increased. Id.
The IHSA itself contains no civil penalty provisions. Under the North Carolina
Public Health Law, however, the State may impose civil administrative penalties of $10,000
per day for violating the IHSA, or any rule or order issued thereunder. N.C. Gen. Stat
§130A-22(a). In addition, the Public Health Law provides that anyone who violates
Chapter 130A, of which the IHSA is a part, is guilty of a misdemeanor. N.C. Gen. Stat.
§130A-25(a). The IHSA contains no treble damages provision for violating a cleanup
order.
Liability The liability section in North Carolina's IHSA is similar to the federal
CERCLA with one important exception. The statute defines a responsible party as any
person who discharges, or who contracts, accepts or transports for discharge, any hazardous
substance. N.C. Gen. StaL §130A-310.7(a). Unlike CERCLA, the statute does not
explicitly hold liable the owner of the site either at the present time or at the time of
disposal. Confusing the question of whether the site owner is liable, however, is the
statute's specific exemption from liability for an "innocent landowner". Id. In June 1989
the General Assembly added transporters to the list of liable parties and changed the
wording slightly of the "innocent landowner's" exemption, but did nothing to resolve the
issue of whether a knowledgeable site owner in North Carolina would be deemed a
responsible party. No cases have yet been brought in North Carolina under IHSA. The
North Carolina superfund program officials, however, have indicated that the State would
pursue a site owner if necessary under the theory that the exemption would be unnecessary
if the knowledgeable site owner was not held liable.
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Although the statute does not explicitly provide for joint and several liability, it
does make a RP liable for "any or all" of the reasonably necessary expenses of developing
and implementing a remedial action program. The State interprets this language to
authorize the imposition of joint and several liability.
The defenses to IHSA liability, which are similar to the federal CERCLA, include
evidence that the contamination was caused by an act of God or war or an intentional act
or omission of a third party who is not in any contractual relationship with the defendant.
Voluntary Participation The North Carolina statute encourages voluntary RP
participation in the cleanup process in several ways. First, it requires the State "where
possible" to seek RP cooperation prior to initiating a cleanup effort on its own.
Second, the statute limits the liability of RPs who voluntarily participate in the
implementation of a remedial action plan to $3 million. N.C. Gen. Stat. §130A-310.9(a).
This limitation applies only to the cost of implementation, including construction, not to the
cost of developing the plan. Id. Although the liability cap may induce voluntary RP
action, the cap could potentially also have a negative effect on the quality of the cleanup
and on state resources. For example, if an RP-financed remedial action reaches a cost of
$3 million with only three-quarters of the cleanup performed, the RP may stop work,
requiring the state either to complete the action or to leave the cleanup undone. Given the
limited funding for state actions, knowledge of the cap could influence the type of remedy
chosen. State program officials anticipate, however, that those sites for which implemen-
tation costs exceed $3 million will be eligible for the NPL, with liable parties being
responsible for the full cost of cleanup. It is somewhat questionable, however, whether a
$3 million state site can be presumed to be eligible for NPL placement The average
remedial action cost for an NPL site is now more than $10 million, and it is projected that
this figure will increase in the near future. States have also reported steadily increasing
remedial action costs.1 Moreover, the North Carolina statutory cap does not include an
inflation factor that will account for a future rise in remediation costs.
1. A study prepared by the Oregon superfund program on the average cost of remedial
action in four states reports average costs ranging from $3.5 million to $15 million per
site. (States studied were Oregon, New Jersey, Michigan, and Minnesota.)
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Third, the statute exempts voluntary actions from most of the stringent public
participation provisions, except that the State shall provide notification of the proposed
action to those persons who have requested such notice in advance. N.C. Gen. Stat.
§130A-310.9(b). Sites undergoing voluntary remedial actions are not included on the State
Priority List. Id.
Deed Recordation Whenever the State has determined the existence and location
of a site, it may prepare a "Notice of Inactive Hazardous Substance or Waste Disposal
Site" for recordation in the register of deeds office of the county in which the land is
located. If the site is sold or leased, the deed of transfer shall contain a reference to the
Notice. N.C. Gen. Stat. §130A-310.8. Cancellation of the Notice may only be made by
the State after the hazards have been eliminated. Id. The North Carolina Superfund
Section has completed seven deed recordation documents to date for filing with the
register. The notices for these properties contain detailed descriptions of the type, location
and quantity of hazardous substances on the property. The superfund officials are hopeful
that this deed recordation authority will become an important tool in encouraging voluntary
RP cleanups so that the Notice may be removed from the deed.
Public Participation North Carolina's superfund statute contains extensive pro-
visions for public participation in the development of the remedial action plan. N.C. Gen.
Stat §130A-310.4. Before approval of the plan for state-funded cleanup actions, copies of
it must be made available to the public at libraries and other locations and notice must be
given for three weeks in the local newspapers. The State must allow 45 days from the last
notice for receipt of public comment before the plan may be deemed approved. If there is
significant public interest in the plan, a public hearing must be held. Id. As noted
previously, the development of remedial plans by RPs on a voluntary basis are exempt
from most of the public participation requirements.
Solid and Hazardous Waste Management Act
The Solid and Hazardous Waste Management Act authorizes the Department to
develop and implement an emergency hazardous waste remedial plan for hazardous waste
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discharges, using monies from the Emergency Response Fund (Emergency Fund). N.C.
Gen. Stat. §130A-306. The Hazardous Waste Section administers this fund and also over-
sees the state RCRA program. The Emergency Fund may be used for emergency removal
only if no funds are available from other sources, such as federal EPA. Id.
Oil Pollution and Hazardous Substances Control Act
The Oil Pollution and Hazardous Substances Control Act of 1978, N.C. Gen. Stat.
§§143-215.75 through -215.104, prohibits the discharge of oil or other hazardous substances
into the water or lands of the State. It requires any person having control over oil or
other hazardous substances discharged into land or water to take immediate removal action
and to restore the area. N.C. Gen. Stat §143-215.84. Before seeking corrective action,
however, the State must identify the owner or operator in control of the hazardous
substance at the time of the release. The act, therefore, has limited use for the cleanup of
inactive hazardous waste sites where the date of release may be uncertain. The act
authorizes two separate funds that may be used for cleanup activities: the Oil or Other
Hazardous Substances Pollution Protection Fund (Oil Spill Fund) and the Leaking Under-
ground Petroleum Storage Tank Fund (LUPST Fund). These funds are administered by the
Groundwater and Water Quality Sections of the Environmental Management Division.
m. PROGRAM ORGANIZATION
The Superfund Section, which is located within the Solid Waste Management
Division, is responsible for the State inactive hazardous sites cleanup program, administers
the Cleanup Fund, and oversees State participation in Federal remedial actions. The Super-
fund Section is located in the new Department of Environment, Health, and Natural
Resources (DEHNR), which was created by the General Assembly in August 1989 in an
effort to consolidate the State's environmental programs. This reorganization means that
the superfund and hazardous waste programs, which were previously in the Department of
Human Resources, are now in the same department as the air, water quality, and ground-
water programs. See Figure NC-1. This consolidation should provide for easier and better
coordination among the state environmental programs. Prior to the reorganization, the
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Commission of Health Services reviewed and adopted rules proposed by the Superfund
Section under the IHSA, specifically the notification requirements and the prioritization
rules. It is unclear at this point whether the Commission will retain this function following
the reorganization.
FIGURE NC-1
DEPARTMENT OF ENVIRONMENT,
HEALTH & NATURAL RESOURCES
ENVIRONMENTAL PROTECTION
SOLID WASTE MANAGEMENT
DIVISION
ENVIRONMENTAL MANAGEMENT
DIVISION
Hazardous Waste Section
Superfund Section
Solid Waste Section
— Groundwater Section
Water Quality Section
_ Air Section
The state Superfund Section currently consists of 20 employees, including support
staff, with two vacancies. The legislature authorized two additional positions for FY 1989-
90, which will be used to employ an environmental engineer and a toxicologist. The
Section's operating budget is $318,000 for FY 89-90 and $411,000 for FY 90-91, derived
from appropriations.
Most of the Superfund Section staff works on federal CERCLA matters. Only four
employees are assigned to state Superfund issues, three of whom work only part-time on
state matters. Twelve positions in the Superfund Section are funded by an EPA coopera-
tive grant for PA/SI work, and a CORE grant provides for one accounting position. One
attorney and one secretary from the Attorney General's Office concentrate full-time on
federal superfund issues, while an additional AG attorney works part-time on state
superfund matters.
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The State Inactive Hazardous Sites Act is designed to address only inactive sites in
which hazardous waste discharge has occurred in the past The fflSA exempts from the
definition of a "site" within its jurisdiction those facilities permitted or in interim status
under the State's RCRA program. According to Department policy, if there is evidence of
disposal after November 1980, the State's RCRA program will handle the case. A non-
notifier or illegal disposer will be brought into the RCRA program and will be required to
obtain a post-closure permit. If a RCRA facility becomes bankrupt, however, it will then
come under the jurisdiction of the state Superfund Section.
The Hazardous Waste Section, also located within the Solid Waste Management
Division, administers the state RCRA program and the Emergency Response Fund.
Generally, the Emergency Fund handles those removal actions that do not require
significant sampling or funding. If an emergency situation arises, the heads of the Super-
fund Section and the Hazardous Waste Section confer and decide which program will
handle the problem.
The Hazardous Waste Section has 54 staffers with an additional five recently
authorized by the legislature. Thirty percent of its budget is derived from RCRA fees,
20% from appropriated funds, and 50% from federal grants.
The Groundwater and Water Quality Sections are located within the Division of
Environmental Management and have responsibility for developing, implementing and
enforcing water and groundwater quality standards in the state. If the Superfund Section
discovers groundwater contamination at a site, the Groundwater Section will review the
remedial action plan for adherence to the appropriate groundwater standards. The Division
of Environmental Management often refers hazardous waste sites to the Superfund or
Hazardous Waste sections, and uses a standard form to alert the sections to a potential
Superfund or RCRA site. According to Superfund Section officials, this transfer procedure
has worked smoothly in the past, and should continue to do so under the reorganization.
IV. FUNDING
The North Carolina General Assembly sees the State superfund program as additive
to the Federal one, not as a partial replacement. The State relies heavily on the federal
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government for staff funding, as described above, and has provided only nominal amounts
to the State Cleanup Fund.
Inactive Hazardous Sites Cleanup Fund
The Inactive Hazardous Sites Cleanup Fund (Cleanup Fund) is a nonreverting
special trust fund consisting of monies appropriated to it by the legislature or available to
it from grants, fees, or cost recoveries. In the 1989 amendments, the legislature allowed
the fund to be credited with interest. In addition, the amendment now allows money in the
Emergency Response Fund (which is funded by RCRA penalties) in excess of $500,000 to
be deposited into the Cleanup Fund. To date the Cleanup Fund has only received monies
from the General Assembly from appropriations totaling $600,000 for fiscal years 1987-89.
The General Assembly appropriated no money for the Cleanup Fund for FY 89-90.
After expenditures for one state-lead cleanup, the Cleanup Fund now contains
$256,000. Excess monies from the Emergency Fund may begin to flow into the Cleanup
Fund as early as next year as RCRA penalties of about $160,000 a year may push the
Emergency Fund total above its $500,000 cap. This funding cannot be viewed as
significant or constant, however.
The 1989 General Assembly commissioned the Governor's Waste Management
Board to study funding mechanisms for the Cleanup Fund, particularly those used for
similar programs in other states. After considering twelve possible funding mechanisms,
including various taxes, fees, and general obligation bonds, the Board concluded in its
report to the legislature that general appropriations was the most acceptable method for
Fund financing.2 The Board rejected fees on hazardous waste facilities as a funding source
because there are so few in the state and fees on those facilities currently fund the state's
RCRA program. The legislature recently lifted a ban on the construction of hazardous
waste facilities in the state, however, and the Board noted that if more facilities were
located in North Carolina, this type of fee could be a future source of funding. The Board
rejected the use of general obligation bonds as a funding mechanism because the projected
2. Governor's Waste Management Board, Funding Needs and Funding Mechanisms for
State Inactive Sites and Superfund Programs and Related Recommendations (June 15,
1989).
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program budget was too small to warrant the substantial administrative costs that would be
incurred. Based on the current staffing levels that would allow only five site cleanups per
year, the Board estimated that $5 million per year would be needed in the short term for
combined state and federal cleanups. The Board determined that this amount was too
small for bonds to be issued. Although the Board concluded that funding requirements
should be met through legislative appropriations in the short term, it recommended that a
fuller analysis of alternatives be conducted for the next legislative session.
There is a strong feeling in the General Assembly that all monies expended by the
State should be controlled, and therefore appropriated, by the legislature. Thus, in the fore-
seeable future, it is doubtful North Carolina will implement any type of self-sustaining
funding method. Moreover, because of the legislature's desire to rely on voluntary
cleanups, it is not likely to appropriate large amounts to the Cleanup Fund, except for
specific emergency actions.
Emergency Response Fund
The Emergency Response Fund (Emergency Fund), administered by the Hazardous
Waste Section, Division of Solid Waste Management, is also a special trust fund credited
with interest. The monies in the Emergency Fund may not be used unless the Department
determines that sufficient funds for corrective action cannot be obtained from other sources
without delay, significantly increasing risk to the public health or the environment. The
Emergency Fund has been used only twice. One reason for the infrequency of its use is
the Department's interpretation that the Emergency Fund cannot be used unless there is no
money available elsewhere to effect the cleanup. According to program officials, whenever
an emergency arises that might warrant use of the Emergency Fund, EPA generally can be
persuaded to perform the cleanup under CERCLA, even though it may take up to two
years before EPA acts. State officials also are reluctant to utilize the Emergency Fund
because they must go through detailed state contracting procedures for each cleanup, no
matter how small the removal action. The Hazardous Waste Management Section is
currently attempting to obtain an annual contract so that small removal cases may be
performed more quickly. The Emergency Fund contained approximately $360,000 as of
August 29, 1989.
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Oil or Other Hazardous Substance Pollution Protection Fund (Oil Spill Fund) and
Leaking Underground Petroleum Storage Tank Funds (LUPST Funds)
The Oil or Other Hazardous Substances Pollution Protection Fund (Oil Spill Fund)
may be used for the removal of oil or other hazardous substances discharged into the land
or waters. It is funded by fines and contains approximately $100,000. It has rarely, if
ever, been used because of the burden of proof required for recovery of costs, and because
of the limited funding.
There are two LUPST Funds: a commercial one containing $3-4 million funded by
fees, and a non-commercial one containing $4 million funded by a kerosene tax. If a
petroleum substance is released from an underground storage tank, the owners are liable for
the first $50,000 of cleanup costs, at which time the commercial Fund will then expend up
to $950,000 on cleanup. The sum of payments made by the owner and by the Fund shall
not exceed one million dollars per discharge or release. The state looks to the federal trust
fund for expenditures over $1 million. These state funds are limited to use on petroleum
releases from underground tanks.
V. REMEDIATION PROCESS
Information Gathering and Prioritization
Since 1987 the efforts of the State superfund program have concentrated on deter-
mining the number and status of North Carolina inactive hazardous waste sites. The first
duty required by the Inactive Hazardous Sites Law after enactment was the development of
a program for locating all inactive hazardous substance sites in North Carolina and the
compilation of an inventory of such sites based in part on information submitted by
owners, operators and responsible parties. Responding to this mandate, the Superfund
Section sent out approximately 800 information requests to potentially responsible parties,
but received only 150-200 responses, many of which were incomplete. Thus, most of the
information on sites used in developing the State Inventory and Priority List has come
from the State's RCRA files or from the federal preliminary assessment/site investigations
(PA/SIs).
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Under a cooperative agreement with EPA since 1985, the Superfund Section has
performed all but about 25 preliminary assessments and nearly 200 of the site investiga-
tions for approximately 800 North Carolina sites on the Comprehensive Environmental
Response Compensation and Liability Inventory System (CERCLIS). For those sites likely
to be listed on the NPL, EPA Region IV Field Investigations Teams (FTTs) perform "listing
site investigations" using HRS H criteria. The State demands that the FIT notify the state
Superfund Section and the proper local agencies when performing the SI, and encourages
the FIT to look at the State's files before starting.
The state superfund statute also mandated that the Superfund Section prepare a
prioritization system in order to compile a State Priority List. North Carolina's prioritiza-
tion system is modeled after the federal Hazard Ranking System, but is simpler to use and
takes into account past cleanup actions when ranking the site. Contamination is confirmed
if analyses show the presence of hazardous substances at concentrations significantly above
background levels. The State evaluates a site and assigns it a score for groundwater
migration, surface water migration, air migration and direct contact The site is prioritized
based on conditions present at the time of evaluation; the State takes into consideration all
past cleanup efforts in determining the priority ranking.
The first State Inactive Hazardous Sites Inventory was presented to the legislature in
May 1989.3 The eighty-five (85) sites on the State Priority List (SPL), which is a part of
the Inventory, include sites with laboratory data confirming hazardous substance
contamination, sites with known disposal but no laboratory data, and sites with alleged
disposal.
The State has identified thirteen sites on the SPL as either requiring or possibly
requiring state fund cleanups because of the absence of a viable responsible party. Four of
those sites are former battery recycling operations involving lead contamination; others
include a fly ash disposal site, an aluminum recycling operation, a wood preserving
operation, an industrial waste reprocessing facility, and sites with pesticide contamination.
The program has developed remedial action cost estimates for nine of these sites, with a
3. Department of Human Resources, Annual Report to the North Carolina General
Assembly-Inactive Hazardous Sites Program (May 1989).
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combined cost estimate ranging from $5.4 million to $7.4 million.
Besides the SPL, the State Inventory also contains a separate list of approximately
600 sites for which additional data is required before their priority status can be
determined. Site investigations are pending on these 600 locations, the majority of which
involve chemical production, distribution, and recovery processes; landfill operations; and
plating/polishing operations.
Sites at which voluntary cleanup actions or RP-financed remedial investigations have
begun are listed separately on the State Inventory and are not included in the Priority List
State-funded Removal Action
The only state-funded removal action performed by North Carolina using the
Cleanup Fund was at the Ulah Battery Lead Reclamation site. The site was used as a
battery recycling facility from 1965-1981, a process which involves crushing the batteries
and removing and melting the lead plates. Soil samples at the site showed elevated lead
levels, and medical authorities diagnosed one child residing in the area as having lead
poisoning. In June 1988 the State issued a written declaration of endangerment and
notified the RPs of their potential liability and of the State's intent to spend public funds to
clean up the site. Following the public participation requirements in the statute, the State
provided public notice and held a public meeting in July 1988 on the proposed remedial
plan. In the fall of 1988, the State removed 2000 tons of contaminated soil and battery
casing chips from part of the site at a cost of $344,000. Two piles of crushed battery
casings remain, however, and the site will now be reevaluated for reordering on the SPL.
Although the State is preparing documentation of cleanup costs, recovery of State
expenditures may be difficult due to the financial status of the RPs.
Voluntary Responsible Party Participation
When the State Inventory was published in May 1989, six responsible parties were
in various stages of initiating voluntary cleanups under supervision of the State, two of
which had started actual cleanup. Since publication of the Inventory, several more
potentially responsible parties whose sites were listed have contacted the superfund program
with an interest in voluntary cleanup or in submitting further information that would take
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the site off the State Inventory. The State sees publication of the SPL as a major
motivator for these companies to come forward because of the public relations impact.
A
The lack of present enforcement capabilities by default makes public relations pressures the
best influence North Carolina has to facilitate voluntary actions. At present, the Superfund
Section is fully occupied in negotiations with about 25 companies to reach agreements on
site investigations or voluntary cleanups. It is too early to tell how many of these negotia-
tions will result in actual cleanups.
To date the State has concluded two "administrative orders on consent" with
companies to perform voluntary cleanup actions at two different sites. The consent
agreements require the companies to prepare a remedial investigation plan, determine a
cleanup level, complete a feasibility study, and implement the approved plan. The State
operates in an advisory capacity. The agreements do not contain stipulated penalties. Upon
an irreconcilable dispute between the State and the party, the consent agreement dissolves.
In signing the consent agreement, the State is not guaranteeing the company that the site
will be taken off the CERCLIS list or that EPA will not seek further cleanup. However,
once the State and the party agree upon cleanup levels, and the company implements the
plan, the State assures the company of its support in any discussion with EPA should EPA
ever question the level of cleanup or propose that the site be placed on the NPL. If the
company refuses to comply with the State's cleanup level requirements, but continues
cleanup efforts, the State will not support the company's actions should the site later be
listed on the NPL.
The State sees this type of consent agreement as an encouragement to RPs to work
with the State on a voluntary basis. These agreements have only recently been concluded;
thus it is unknown whether the RPs' commitment to cleanup efforts will be affected by the
potential problems with enforcing the agreement. State officials have indicated they intend
to pursue enforcement should problems occur.
Cleanup Standards
Cleanup standards for a remedial action in North Carolina are determined on a case
by case basis. The state Superfund Section is currently working on guidelines for
standards of cleanup based on the use of the property. Although the State seeks a cleanup
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level most protective of health and the environment, in some cases the State may accept an
RP's justifications for a slightly less stringent standard if the site is used as an industrial
park, away from residential areas, or is extremely isolated. The State's aim is to achieve
some RP cleanup in the short term that otherwise would not be performed.
State groundwater standards developed by the Groundwater Section of the Division
of Environmental Management have been adopted, effective August 1, 1989. Although the
state statute requires the Superfund Section to "seek federal approval" of a remedial action
"to insure concurrent compliance with federal standards", program officials see this as little
more than a requirement to use federal standards as a guideline. N.C. Gen. Stat. §130A-
310.3(d).
Federal Cleanups
North Carolina has 20 sites on the NPL with 2 additional sites proposed. One
North Carolina site, involving PCB contamination (PCB, Roadside Spills), has been
remediated and removed from the NPL. The State is now in the process of negotiating
with Region IV on state superfund contracts for federal cleanup at two North Carolina NPL
sites. These state contracts cover issues such as the State's capacity assurance, ten percent
share, and assurance of state permits and authorizations. The 1989 amendment to the
Inactive Hazardous Sites Law gave specific authorization for the state program to enter into
these agreements with the federal government. The legislature also authorized $800,000 per
year for FY 1989-91 for the state's ten percent share of the CERCLA cleanup at the two
sites for which state contracts are being negotiated. Program officials are confident that
they will be provided additional funds from the legislature if needed to meet the CERCLA
match.
VI. PROGRAM OUTLOOK
During its first two years, the North Carolina superfund program has made a good
effort to determine the scope of the inactive hazardous waste sites problem in North
Carolina. The State has prioritized 85 sites based on the extent to which such sites
endanger health or environment. Preliminary assessments have been completed on most of
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the sites identified by the State and site investigations are progressing. Thus, the State has
a good grasp of its hazardous waste problem.
The North Carolina General Assembly, however, has provided little in the way of
funding for the program. The limitations imposed by this lack of funding for state cleanup
activities have determined the focus and priorities of the North Carolina superfund program.
Consequently, at present the program is concentrating on voluntary site investigations and
cleanups by responsible parties rather than enforcement efforts. Since publication of the
Inactive Hazardous Sites Inventory, several North Carolina companies have notified the
State of their interest in performing site investigations or cleanups. The staff members
working on state superfund issues are now fully occupied with oversight of these sites and
with helping the companies with their voluntary remediation efforts.
The superfund program officials are aware, however, that at present only the
financially viable and more environmentally responsible companies are coming forward.
Once these voluntary efforts begin to dwindle, the ability of the superfund program to
continue cleanup efforts will depend on the resources provided it by the General Assembly.
At this time the state legislature is not willing to appropriate large sums of money for
state-funded cleanups, although it is willing to provide the state share for federal remedial
efforts. The program officials believe that over the next five years, once it establishes a
track record of RP-financed cleanups that will show the program's credibility and technical
ability, then the General Assembly will be more willing to appropriate the funds necessary
for enforcement actions. Only time will tell whether this hope will become a reality.
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OREGON
OVERVIEW
Oregon's hazardous waste cleanup program is only two years old and is continuing to evolve. The
State's regulations are largely in place and it has been conducting oversight of Rl/FSs performed by RPs; the
program's next steps are to prepare a complete list of sites, continue oversight, and begin State-lead cleanup
efforts.
Oregon has only eight sites on the NPL, six final and two proposed. Allhough its Department of
Environmental Quality (DEQ) is tracking 750 sites in which there are over 300 confirmed releases, on
average these sites are relatively small and are expected to be less costly to clean up than sites in other
states.
Involving Responsible Parties Providing oversight for RP-conducted RI/FSs has been the focus of
the DEQ's site response efforts, although the State intends to conduct one RD and take the lead on five
RI/FSs at orphan sites in the next two years. In general, the program has succeeded in eliciting RP participa-
tion, particularly in conducting the RI/FS. RPs are encouraged to participate by DEQ's strong enforcement
authorities, including the threat of triple damages, and possibly by the relatively small cost of cleaning up
Oregon non-NPL sites.
RPs may, however, become less likely to conduct actions once sites reach the remedial design and
remedial action (RD/RA) phase. Factors that might discourage RPs from full participation include Oregon's
strict cleanup level standards and the existence of fewer RPs than in other states because generators and
transporters are usually not considered liable in Oregon. Both of these factors would tend to make cleanups
more expensive, and less attractive, for the participating RPs.
Funding for Oregon's superfund program comes almost entirely from fees. The Hazardous Substance
Remedial Action Fund (HSRAF), which is used for most program activities, received 21.6% of its funds from
Federal Superfund grants in 1987-89 but will probably receive only 6% from that source in 1989-91 because
of reduced State involvement at NPL sites. Most of the rest of the Fund's money comes from a fee on
operators of hazardous waste and PCB disposal facilities, of which there is only one in the State.
Within the HSRAF, an Orphan Site Account is funded by bonds, and the bond debt is serviced by
fees on hazardous substances, petroleum, and solid waste disposal. Twenty-five percent of this account may be
used at sites with unwilling RPs, and the rest may be used only at sites with unknown or unviable RPs. The
account may suffer from caps placed on two of the three fees, and from a requirement that all three fees
generate the same amount of revenue. The reliance on fees for most of the Program's funds may prove
problematic, as income from most of the fees is likely to decline over time.
Program Innovations Under DEQ's Voluntary Preliminary Assessment (PA) Program, RPs can
expedite the PA process at sites that DEQ considers low priority. The RP prepares a series of three PA
reports, giving DEQ the option after each report to decide that no further action is needed or to require the
preparation of the next report. This process allows RPs who wish to transfer property or engage in mergers to
obtain a swift DEQ judgment on the status of hazardous waste sites on their property.
The Site Response Section of the DEQ's Environmental Cleanup Division has a unique organizational
system whereby project managers spend 60% of then- time managing their own sites, 10% of their time
training, and 30% of their time providing consultation for other managers' sites. This system allows project
managers time to maintain their technical expertise and allows other managers relatively easy access to that
expertise.
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I. INTRODUCTION
Oregon's environmental cleanup program was established by the legislature in 1987.
The creation of the cleanup program was motivated by the State's commitment to mitigate
environmental and health risks at all contaminated sites. In addition, the State recognized
that very few of Oregon's three hundred plus confirmed releases would score high enough
to be included on the National Priority List (NPL), but they would nevertheless require
attention using state oversight and/or funding.
Before passage of the Environmental Cleanup Law, Superfund activities were carried
out by the Remedial Action Section in the Hazardous and Solid Waste Division of the
Oregon Department of Environmental Quality (DEQ) with funding provided by a $20 per
ton hazardous waste disposal fee and EPA Management Assistance Grants. The Remedial
Action Section continued in this role until July 1988 when it was expanded and
reorganized as the Environmental Cleanup Division (BCD).
The Hazardous Waste Problem in Oregon
The State has a variety of hazardous waste sites associated with transportation, man-
ufacturing, and electronics. Currently, there are 750 sites in DEQ's data base and over 300
confirmed releases. The distribution of confirmed releases by type of business is presented
in Table OR-1.1
There are six sites on the final NPL and two sites proposed for the NPL.2 Table
OR-2 provides information on the status of these eight NPL sites.3
1. The number of confirmed releases was originally 325, later revised downward to
313.
2. U.S. Environmental Protection Agency, Office of Emergency & Remedial Response,
National Priority List. Supplemental Lists and Supporting Materials. HW-10.115 (October
1989).
3. The eighth site-Union Pacific Railroad Tie Treatment in The Dalles, Oregon-was
proposed after the BCD compiled information for the table. The BCD has negotiated a
consent order with the RPs but the site may revert to EPA project lead or oversight if the
site is added to the NPL.
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TABLE OR-1
Confirmed Releases by Type
of Business
Type of
Business
Wholesale/Retail Sales
Transportation
Wood Products
Metal Manufacturing
Chemical Manufacturing
Services
Electronics
Other
* Leaking underground storage tanks
Number
of Sites
60*
55
50
47
31
21
13
_48
325
Oregon non-NPL sites are expected to be less costly to clean up in comparison to
NPL sites generally, or non-NPL sites in states such as New Jersey, Michigan, and
Minnesota. Historically there has been little off-site hazardous waste disposal activity in
Oregon because Oregon is less industrialized than these states. The BCD estimates that
remedial action costs for Oregon non-NPL sites will range from $250K to $10M and
average $3.5M. By comparison, the average cost of remedial actions at NPL sites
nationwide is $13.5M.4 New Jersey sites average $15M, Michigan sites average $5M, and
Minnesota RA costs range from $3M to $7M.5
The state anticipates that the burden of funding and conducting cleanups will fall on
the ECD for a number of sites. Of the 325 sites with confirmed releases investigated to
date, the ECD has determined that there are approximately 14 true orphan sites and 42
sites at which RPs have limited ability to pay for cleanup.
4. Oregon Department of Environmental Quality, Report on Fur
Environmental Cleanup Program: 1989 Legislative Session (August 30, 1989).
5. Ibid.
tie Oregon
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Federal
Site
Allied Plating (Proposed)
Gould Battery
Joseph Forest Products
Martin Marietta
Teledyne Wah Chang
Umatilla Army Depot
United Chrome Products
TABLE OR-2
NPL Sites in
Status
RI/FS
ROD
RI/FS
RD
RI/FS
RI/FS
RA
Union Pacific Railroad (Proposed) RI/FS
Oregon
Cleanup
Cost
Unknown
$20M
Unknown
$6.7M
Unknown
Unknown
$7M
Unknown
Project
Lead
EPA
RP
EPA
RP
RP
RP
EPA
State
Program Accomplishments
The cleanup program's superfund activities can be divided into three areas: (1)
development of regulations and policies; (2) site discovery; and (3) site response.
BCD has developed the regulations required by statute to carry out its functions
with the exception of new rules required because of recent amendments to the statute.
BCD is also developing new guidance for preparing PA/SIs and for allowing RPs to
conduct PAs at certain sites.6
The program's major setback to date has been the initial effort to identify sites for
listing on the inventory of facilities with confirmed releases. This listing effort was
stymied because owners contested 210 of the proposed 325 sites. The old "inventory" has
been abandoned by new legislation that will enable the ECD to put the listing effort back
on track.
6. The ECD is developing a three-tiered system to screen sites for BCD-conducted
PAs. The program anticipates that RPs will volunteer to conduct PAs at low and medium
priority sites (that ECD doesn't plan to address immediately) although the guidance doesn't
preclude RP-conducted PAs at high priority sites.
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At least for the next few years, ECD expects to discover approximately 50 sites per
year and projects that the database of discovered sites will increase to approximately 1,000
sites. ECD plans to conduct 144 PA/SIs during the current biennium (89-91) and projects
that 326 PA/SIs will be completed during the 91-93 biennium. The program expects it will
take 6 to 8 years to complete PAs on discovered sites.
New site response projects have recently been increasing at a rate of three new
projects per month. With this rate of growth, an estimated 116 projects would be under-
way by the end of the current biennium. However, ECD anticipates that limited staff
resources will only allow the division to undertake about 40-45 projects at one time. Most
of the program's recent site response activities (87-89 biennium) have focused on oversight
of Rl/FSs conducted by RPs. Recent and planned site response projects are:
87-89 biennium - oversight for 10 PRP-lead RI/FS and one imminent hazard
removal.
89-91 biennium - oversight for 22 PRP projects including 3 RAs, State lead
on RI/FS at 5 orphan sites and 1 RD at an orphan site.
91-93 biennium - oversight on 27 RP projects (5 RAs), State lead on 9
RI/FS, 3 RD, and 3 RA projects at orphan sites.
II. STATUTORY PROVISIONS
The Oregon Environmental Cleanup Law. Or. Rev. Stats. §§466.540 - .590 was
established in 1987. The Cleanup Law creates the Hazardous Substance Remedial Action
Fund (HSRAF) and outlines procedures for executing fund-lead and RP-lead cleanups. In
the recently concluded 1989 legislative session, significant amendments to the Cleanup Law
were made. In particular, these amendments revised the site inventory process and
enhanced the program's ability to address orphan sites.
The Cleanup Law is modeled after the federal statute and provides similar cleanup
standards and enforcement, settlement, and cost recovery authorities. The major difference
between the Oregon statute and CERCLA is the scope of private parties' liability for
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cleanups. Not surprisingly, there are also differences in site inventory and funding
provisions. A few of the statutory provisions are highlighted below.
Liability
The Oregon law establishes strict liability (§466.567) instead of strict, joint and
several liability specified in CERCLA §107(a). The strict liability standard applies to first
owners or operators, knowledgeable subsequent owners or operators, secretive sellers, bad
actors, and unlawfully hindering persons. It is DEQ's intention that common law principles
be applied to determine whether strictly liable parties are also jointly and severally liable.
If the harm cannot be apportioned, then joint and several liability applies. There are
liability exclusions for unknowing subsequent owners and operators, migration victims, third
party victims, inheritors, and units of local or state government that acquire property
involuntarily. In certain instances where a person has failed to notify DEQ, exercise due
care, or take reasonable precautions, he or she may be subject to non-strict and several
liability.
Enforcement, Settlement, and Cost Recovery
The Cleanup Law authorizes information and site access orders, administrative
orders, and injunctive action. The statute provides for civil penalties of up to $10,000 per
day for failure to comply with the law, regulations, or orders. Criminal penalties of up to
$10,000 per day and/or imprisonment of not more than one year may apply for willful or
knowing noncompliance with the law, regulations, or orders.
The statute also provides settlement authority. The director of DEQ is authorized to
enter into agreements with RPs to perform removal or remedial actions. The director's
decision to use (or not use) settlement authority cannot be appealed to the EQC and is not
subject to judicial review. The director of DEQ may, when practicable and in the public
interest, reach settlements with de minimis RPs.
The statute includes provisions for cost recovery and, in fact, requires the State to
do sof Punitive damages of up to treble the amount of the State's costs may be assessed
against RPs who fail without sufficient cause to conduct a removal or remedial action
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required by administrative order. All of the State's remedial action costs, penalties, and
punitive damages constitute a lien on real or personal property owned by liable parties.
Cleanup Policies
The cleanup standards contained in §466.553(2) are essentially the same as those in
§121(b) of CERCLA as amended by SARA.
The Hazardous Substance Remedial Action Fund (HSRAF)
The Oregon Cleanup Law also established the HSRAF to finance staff positions and
program costs and enable the BCD to undertake studies and cleanup activities at orphan
sites and sites where RPs are unwilling to conduct these activities. During the 87-89
biennium, the Fund was financed primarily by a monthly fee of $20/ton of hazardous
wastes or PCBs levied on operators of treatment and disposal facilities (only one in state).
House Bill 3515, passed in 1989, establishes the Orphan Site Account within the Fund,
financed by three new fees (see Section IV).
m. PROGRAM ORGANIZATION
The ECD is one of seven divisions within the DEQ and is primarily responsible for
administering the State's superfund program (see Figure OR-1). It is divided into four
sections, three of these devoted to superfund activities: the Site Assessment Section, the
Site Response Section, and the Policy and Program Development Section. In addition, the
ECD is assisted by other divisions within DEQ, the State AG's office, and the
Environmental Quality Commission.
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FIGURE OR-1. ENVIRONMENTAL CLEANUP DIVISION ORGANIZATION CHART
Governor
Environmental Quality
Commission
-Hearings Officer
-Personnel Manager
J_
Department of Environ-
mental Quality Director
-Assist to the Director
-Interprogram Coordinator
-Public Affairs Manager
Management
Services
Division
Hazardous &
Solid Waste
Division
Laboratories
Division
Site
Assessment
Section
Remedial Investigations
Feasibility Studies
Endangerment Assessments
Natural Resource Damage
Assessments
Design, Cleanup and
Operation & Maintenance
of Sites
Site Discovery
Inventory of Confirmed
Releases
Preliminary Assessments
and Site Inspections
Responsible Party
Searches
Hazard Assessment
Scoring
Systems Development
& Management
Legislation, Policy
and Rules
Planning
Advisory Committee
Contractor Procurement
and Management
Investigations
& Cleanups
-------
Superfund Capabilities in ECD
The Site Assessment Section carries out various "pre-remedial" activities including
site discovery and listing, preliminary assessments and site inspections, and RP searches.
The Site Assessment Section is also required to determine hazard assessment scores. The
section includes 8 permanent staff and 2 limited duration staff. The bulk of the Section's
work is preparation of PAs. They are currently developing a process that would allow RPs
to conduct PAs with ECD oversight primarily at low priority sites (minimal off-site
migration of contaminants).
The Site Response Section is responsible for oversight and management of RI/FS,
endangerment assessments, natural resource damage assessments, and remedial design,
cleanup, and operation and maintenance of superfund sites. There are 9 permanent staff and
1 limited duration person who works on special projects. The Site Response Section is also
responsible for emergency removals at state superfund sites.
The Policy and Program Development Section is responsible for systems develop-
ment and management, contractor procurement, policy development, and planning. The five
permanent staff include the section chief, a policy analyst, a contracts person, and two
program coordinators-one who works on the ECD budget and file management and one
who helps develop ECD policies and procedures.
Superfund Program Support Services
ECD's superfund activities are supported by staff in three divisions within DEQ: (1)
Management Services, (2) Laboratories, and (3) Regional Operations Divisions of DEQ.
Also, two attorneys in the Attorney General's office devote a portion of their time to ECD,
handling enforcement actions and providing advice upon request. The enforcement section
within the Regional Operations Division may also be involved if the DEQ director issues a
unilateral order to an RP.
Federal/State Relationships
The ECD has made use of the various grant monies available through the federal
Superfund program. The program received management assistance funds for oversight and
PA/SI funds for the state's NPL sites through a multi-site Cooperative Agreement. The
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BCD also obtained a CORE grant in FY88. A draft SMOA, prepared by the Region X
office in Portland, has been reviewed and revised by ECD and is currently under review.
The ECD has a good working relationship with the Region, which has Superfund staff in
Portland and in the Regional office in Seattle. ECD staff indicate that Region X has been
particularly helpful on PRP searches.
Rule Development and Promulgation
The Environmental Quality Commission (EQC) is empowered to adopt rules
necessary to carry out the provisions of the Cleanup Law as well as other DEQ laws, and
to hear contested cases. The EQC consists of five members appointed by the governor to
staggered terms. It meets once a month for approximately one and one-half days.
Proposed rules are developed by the ECD in consultation with an advisory
committee and presented to the EQC for formal adoption. The first advisory committee
was referred to as the Remedial Action Advisory Committee (RAAC). The RAAC has
been replaced by the Environmental Cleanup Advisory Committee (ECAC). The ECAC is
an ongoing committee consisting of 22 members and meets on a regular basis with the
ECD in public meetings. The ECAC includes members from agriculture and timber,
electronics, and the fuel industry, the financial and legal fields, and environmental groups.
The overriding philosophy of rulemaking in ECD is to build consensus before presenting a
rule to the EQC. As a result, the EQC has made only minor changes to proposed rules
prior to promulgation.
Coordinating Site Cleanup Activities
The management of remedial activities by the Site Response Section is somewhat
different from the approaches used by states such as Minnesota and New Jersey. Initially,
a system of project managers was set up whereby project managers were responsible for all
aspects of their assigned sites. However, project managers are usually expert in only one
technical field and need to draw on the expertise of other staff in order to provide a
competent technical review of the complex RI/FS report. Job satisfaction under this system
was low and staff were often frustrated by the difficulty of negotiating time releases for
staff to assist in reviews. The system was scrapped and replaced with one that provides
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all site response staff with the opportunity to consult on other projects. Under the new
system, staff devote 60% of their time to management of their own sites (usually 5-6 per
person). 30% of their time is reserved for consultation on other projects. 10% of their
time is reserved for training. The system makes it easier for project managers to
coordinate reviews and oversight activities, and it allows staff to consult in their areas of
expertise and keep up with new developments in their specialty. By design, the staff
includes project managers with diverse backgrounds: a hydrogeologist, two engineers, two
quality assurance/quality control experts, a bioremediation expert, a Ph.D analyst, and a
project manager with strong management background. Changes in the site management
approach may be required when sites have progressed to the remedial action stage,
necessitating the assignment of project managers with engineering background to manage
the RA itself.
IV. FUNDING
The Oregon cleanup program is financed primarily by monies deposited in the
Hazardous Substance Remedial Action Fund (HSRAF). Federal Superfund grants provided
21.6% of funds for the cleanup program in the 87-89 biennium. The federal contribution is
expected to drop to 6% during the current biennium because EPA, not BCD has lead
responsibility on all but one NPL site. The HSRAF was created by the Oregon Environ-
mental Cleanup Law and amended in 1989. It can be used for administrative support costs,
emergency response actions and removals, studies and design, remedial action, O&M, and
the State's CERCLA match. Private parties who perform cleanup activities pursuant to a
DEQ order can seek reimbursement from the fund if they can demonstrate that they are not
liable and the costs they incurred are reasonable.
During the 87-89 biennium, the primary source of income for the HSRAF was a
monthly fee levied on operators of hazardous waste or PCB disposal facilities of $20/ton
on any materials brought to the facility for treatment or disposal. Currently, there is only
one hazardous waste disposal facility in Oregon (Arlington), receiving most of its waste
from generators outside of Oregon. This facility pays $4.5-$5.0 million in fees per
biennium. The other sources of income for the fund are cost recoveries, civil penalties,
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and punitive damages. Cost recoveries are conservatively estimated to be $173,000 during
the 89-91 biennium. Civil penalties are a minor source of income and punitive damages
have not been assessed or collected by the program.
The Financial Assistance Program
The 1989 Amendments also created a Financial Assistance Program that enables
BCD to loan HSRAF monies to RPs at negotiable interest rates and terms. However, the
orphan site account may not be used for RP loans.
The Orphan Site Account
The 1989 Amendments also created the Orphan Site Account within the HSRAF. It
is available to finance remedial activities at sites with RPs that are unknown, unable, or
unwilling to conduct cleanup activities. To finance orphan site cleanups, DEQ would
obtain authorization to sell pollution control general obligation bonds. Three new fees~a
hazardous substance fee, a petroleum fee, and a solid waste tipping fee-are provided to
service this bond debt During the 89-91 biennium, debt service is the only authorized use
of the fees; thereafter, they may be used directly to pay response contractors.
Several limitations have been placed on the use of the Orphan Site Account:
(1) the BCD must demonstrate its need to use the account and receive approval of
the Emergency Legislative Board,7
(2) if RPs are "unwilling" as opposed to unknown or unable, the BCD must demon-
strate that there is a need for "immediate" removal or remedial action to protect public
health and the environment,
(3) only 25% of the account may be used at sites with "unwilling" RPs,
(4) a $1 million/year cap is placed on each of the three fees during the 89-91
biennium. After July 1991, the EQC may increase the fees provided they do not exceed
the amount of site costs and the higher fees are approved by the Ways and Means
Committee or the Emergency Legislative Board.
7. It is not clear in the statute whether BCD is required to demonstrate "need" the first
time or every time the Account is used.
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As part of the approval process, the Emergency Legislative Board authorizes the
BCD to use pollution control general obligation bonds to finance orphan site cleanups or
provide loans that enable local governments or State agencies to conduct or finance
cleanups. When ECD sells bonds, it must encumber annual fees amounting to
approximately one-tenth the value of the bonds for a period of 20 years to ensure that the
principle and interest can be repaid. The program faces one additional hurdle before the
bonds can be used for superfund cleanups. Currently, the bonds can be used only for
wastewater treatment facility construction and are not authorized for "moving dirt" without
amending the State's constitution. Senate Joint Resolution 41 is the proposed constitutional
amendment and will be voted on in Oregon's May 1990 primary election. The ECD does
not anticipate that this delay will impede the site response program; the first orphan site
project is not expected to start until mid-1990.
The hazardous substances fee is levied on the possession of hazardous substances
(capped at $9,000 per facility and $25,000 per employer). The petroleum withdrawal or
import delivery fee cannot exceed $10 per delivery. The solid waste tipping fee is the
only uncapped fee and is levied on sites receiving domestic solid waste (excluding transfer
stations). The hazardous substances and petroleum fees can only be used by ECD for
cleanups at orphan sites that are not municipal solid waste facilities. The hazardous
substances fee is also used for expenditures related to the Community Right to Know and
Protection Act and the Toxics Use Reduction and Hazardous Waste Reduction Act. The
petroleum fee is also used to finance the hazardous material emergency response system.
The solid waste tipping fee has no per unit cap comparable to the facility or delivery caps
placed on the hazardous substances and petroleum fees, respectively. It can be used only
for cleanups at solid waste sites (orphan or owned/operated by the local government).
Once an orphan site determination is made for either a hazardous waste site or a
solid waste facility, all three fees are triggered. It appears that once the fees are triggered,
the fee rates must be set so that each fee generates exactly the same amount of revenue.
Thus, twice as much fee revenue will be available for hazardous waste cleanups as for
solid waste cleanups.
However, the 1989 Amendments provide for additional revenue for solid waste
cleanups by creating the Local Government Remedial Action Fund. Unless local
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governments make funds available from other sources, this fund would be available to pay
their share of remedial action costs at solid waste sites. The fund would receive income
from a solid waste collection services charge not to exceed $12 per capita per year or $60
per capita per local government unit.
Long Term Availability of Funds
Since the cleanup program relies almost exclusively on various types of fees, it is
useful to focus on their revenue-generating potential. We would expect cost recoveries,
penalties, and fines to provide limited potential to increase fund revenues significantly.
The Environmental Cleanup Law authorizes the legislature to make direct appropriations to
the program but the legislature has not opted to use this funding source in the last two
legislative sessions.
The monthly hazardous waste disposal fee is set at $20/ton by statute. Fee revenue
is proportional to the fee rate and the volume of hazardous waste disposed in Oregon.
Clearly, revenue can be increased by increasing the fee rate (statutory amendment required).
It should be noted that the fee rate is a "nominal" rate, and is not adjusted for inflation.
Thus, other things being equal, the monthly fee will generate less revenue in real terms
over time. The other component of fee revenue is the volume of hazardous waste
disposed. Through May 1989, the monthly volume of waste and hence fee revenue has
fluctuated from a high of over 30,000 tons in October 1987 to only 6,000 tons in March
1988. Nevertheless, BCD has analyzed monthly revenues and determined that fee revenue
is increasing. However, two factors strongly suggest that the historical trend of increasing
revenues will not continue in the future. First, the volume of waste will decline as a result
of EPA regulations restricting the land disposal of certain hazardous wastes. Second,
industry is using waste reduction and recycling techniques to avoid costs and potential
liabilities associated with land disposal of hazardous waste. BCD is projecting a 10%
reduction per year in fee revenue during the 89-91 biennium. A range of revenue
projections for 89-91 is provided in Table OR-3. These projections are not adjusted for
inflation. BCD has not made revenue projections for subsequent biennia. It seems
reasonable to assume that revenue generated from the monthly fee will continue to decline
after 1991.
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TABLE OR-3
Revenue Projections 89-91
Methodology
Assume 10% reduction per year
Assume same as 1987-1989
Assume linear regression model
(constant growth rate)
Projected Revenue
$4,594,315
$5,773,344
$6,786,950
The three fees used to finance the Orphan Site Account can potentially generate up
to $1 million per year per fee during the 89-91 biennium. After 1991, the fee rates can be
adjusted to meet the greater demands placed on the orphan site account. The revenue-
generating potential of the hazardous substances and petroleum fees is limited by the caps
stipulated in the 1989 Amendments. ECD does not yet know how close the fees will be set
to these caps at this time. Also, it is not clear whether the caps can be removed after
1991 without amending the statute. The solid waste fee does not have a cap. However, it
appears that its revenue-generating potential is limited by the requirement that each fee
generate the same amount of income. The revenue-generating potential of all three fees
also depends on the willingness of the Ways and Means Committee or the Emergency
Board to approve future increases in the fee rates.
Overall, there is concern in ECD about adequate funds to meet projected demand
for orphan site cleanups. ECD estimates it will need $18.8 million in the 91-93 biennium
to meet its planned commitments. Given that the monthly hazardous waste disposal fee
will generate only about one-fourth to one-third of the projected costs, the program will
have to rely heavily on pollution control general obligation bonds to finance orphan site
cleanups.
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V. REMEDIATION PROCESS
Overview
The cleanup process in Oregon for non-NPL sites is similar to the procedures used
by the federal Superfund program and by most State superfund programs. Sites enter the
process at the site discovery stage. The BCD generates its site data base using information
from DEQ files, files of other State agencies, concerned citizen reports, and information on
targeted industries. Next, the preliminary assessment at a site provides the basis for
determining whether (1) a release has occurred, (2) it poses a significant threat, and (3)
further investigation is required. After the PA is completed, the site has one of three fates:
(1) release is not confirmed; (2) release is confirmed and the site is proposed for inclusion
on the State's confirmed release list; or (3) the site is also proposed for inclusion on the
State's inventory of facilities requiring further action. This latter category of sites enter the
remedial phase; removal action and/or remedial investigation and a feasibility study may be
required. If an RI/FS is conducted for the site, the director of DEQ will select a remedial
action (for an orphan site) or approve a remedial action proposed by the RP. The selection
of the remedial action is followed by the remedial design and construction phases.
Selected details of the cleanup process are discussed below.
Preliminary Assessments (PAs)
The PA process in Oregon is currently under revision. BCD is proposing use of a
three-part process to replace its current PA/SI approach. BCD has developed the three-
phased approach in an effort to conserve program funds and staff resources. It allows
BCD to terminate PAs at some sites at lower cost than under the existing (and more
traditional) PA approach. Guidance for the state-conducted PA is not available but is
expected to be similar to the guidance developed for Oregon's fledgling voluntary PA
program.
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The voluntary PA program has been established to enable RPs to obtain "timely
DEQ concurrence on a course of action that will identify whether further investigation
and/or cleanup is required at a particular site." In anticipation of property transfer,
corporate merger, or development, RPs may want to expedite the PA at sites that have low
DEQ priority. ECD does not plan to defer PAs at sites with known or highly probable
releases.
The voluntary PA is divided into three phases, with reports required at the comple-
tion of each phase. The first part of the PA process (PAI) entails an historical record
search providing a description and history of the site and a characterization of wastes. The
PA may be terminated at the completion of PAI if DEQ ECD makes a "No Further
Action" (NFA) determination. However, if there is suspected historical use of chemicals or
a known release of a hazardous substance from the site, or if ECD so directs, the RP must
prepare the PAIL The second part of the PA requires an evaluation of exposure pathways
and potential receptors. ECD will conduct a site visit at the conclusion of PAH. If ECD
makes an NFA determination, the PA is terminated. Otherwise, the RP prepares the PAin
consisting of a work plan and a data evaluation report. At a minimum, the PAm provides
sampling and analytical data that enables ECD to determine if a release has occurred and
whether further action is required. Thus, the PAIII provides the information necessary to
assign the site to one of the state's two lists. However, it is not intended to provide a
complete site characterization.
To initiate a voluntary PA, the RP enters into a written agreement with DEQ and
makes a payment of $2,200 to cover oversight by ECD for PAI and PAH. If the PA
advances to PAni, ECD will provide oversight on a formal cost recovery basis.
Classification of Sites
The Oregon DEQ is required by statute to develop and maintain a list of facilities
where hazardous substances have been released to the environment. DEQ initiated its site
discovery program in January 1988. Following its review of various DEQ files and
information provided by other state agencies and the public, DEQ notified 398 owners of
325 sites in November 1988 of the department's intent to include these sites on the
Inventory of Confirmed Releases. After listing was contested by owners of 210 sites, DEQ
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suspended action on the inventory. The inventory provisions in the environmental cleanup
statute were subsequently amended in the 1989 legislative session. The new inventory pro-
visions require DEQ to develop and maintain a list of confirmed releases and an inventory
of facilities requiring additional investigation or cleanup. The appeals process has also
been altered by the amendments. DEQ must notify owners at least 60 days prior to adding
a site to the list or inventory. The owner then has 45 days to comment on the
department's decision. DEQ's final listing decision can no longer be appealed to the EQC.
Regulations to implement the revamped inventory process are expected in April
1990. The new inventory will provide information on each site, hazardous waste releases
from the site and the status of ECD or RP-lead investigations, removals, and remedial
actions. The public may obtain copies of the inventory and DEQ must provide a report on
the inventory, site discovery efforts, and program accomplishments each January to the
Governor, the legislature, and the EQC.
Remedy Selection
The selection of the remedial action is based on analysis contained in the RI/FS. If
RPs prepare the RI/FS, the ECD provides guidance on the range of alternatives the
feasibility study should consider and evaluate. The final remedy is selected by the director
of DEQ. In making this selection, the director considers the administrative record consisting
of all information on the site, the assessment of the hazardous waste problem contained in
the PA/SI and RI, and the analysis of alternative remedies presented in the FS.
Before DEQ makes the final determination, the public is provided the opportunity to
comment on the proposed remedy. DEQ must provide public notice of any proposed
remedial actions, provide at least 30 days for submission of written comments, and convene
a public meeting if requested by 10 or more persons or a group with more than 10
members.
The guiding principle for selecting the appropriate cleanup level is "cleaner is better,
background is best." Remedial actions should be protective of present and future public
health, safety, and welfare. Generally, hazardous substance cleanups achieving background
levels are presumed to be fully "protective." If remedies achieving background do not
satisfy certain "feasibility" requirements, the director of DEQ may approve a remedy that
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attains the lowest possible concentration level. These feasibility requirements place
emphasis on the use of permanent solutions and alternative or resource recovery
technologies. Furthermore, remedies should, to the maximum extent practicable, be cost
effective, technically effective, and implementable.
RP Participation in Cleanups
In its first two years, the cleanup program has been extremely successful in
obtaining RP participation in the remediation process. Approximately 30 voluntary
stipulated orders have been issued to RPs to conduct the Rl/FS. At sites with viable RPs,
the state has issued only one unilateral order and that order was subsequently converted to
a stipulated order. Some of the early settlements covered RD/RA in addition to RI/FS.
However, recent stipulated orders are limited to the RI/FS, suggesting that RPs or then-
legal counsels are becoming more sophisticated about the remedial and settlement
processes.
At this juncture, it is difficult to ascertain whether BCD will continue to settle
successfully with RPs once sites progress to the RD/RA stage. There are some compelling
reasons why RPs might more readily participate at the Rl/FS stage and not at the RD/RA
stage. Most importantly, participation enables the RP to become directly involved in the
characterization of site problems and the framing of cleanup options. Also, the RI/FS is
typically less costly than the RD/RA, and the RI/FS settlement agreement doesn't establish
the RP's liability for remediation.
A number of factors are identified below that have affected or might be expected to
affect RP participation in the cleanup process:
Enforcement Authorities The Oregon cleanup program has a full complement of
order authorities. The program prefers to negotiate voluntary stipulated orders with RPs
whenever possible. DEQ is authorized (and prepared) to issue unilateral orders if
negotiations are unsuccessful. Injunctive action is possible but not anticipated; if funds are
available in the orphan site account, DEQ can perform the work and seek punitive
damages. Staff from the AG's office indicated that the lack of preenforcement review and
the threat of punitive damages have enhanced ECD's efforts to settle with RPs.
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Liability The liability standard specified in the statute limits ECD's prospects for
finding RPs because generators and transporters arc not generally liable. Thus, Oregon
sites will typically have fewer viable RPs, for comparable sites, than states with liability
extending to generators and transporters. The BCD readily acknowledges this limitation.
However, very few non-NPL sites in Oregon historically imported hazardous waste.
Having fewer RPs for a site may facilitate successful negotiations. However, since there
are fewer RPs, the costs per RP are greater, thus discouraging settlement. Overall, the
liability standard limits the number of RPs but may have either a positive or a negative
effect on the success rate of negotiations.
Settlement Authorities The ECD is authorized to negotiate and settle with de
minimis RPs. This settlement tool can enhance RP participation by reducing the share of
costs for major RPs. However, given that generators and transporters are generally not
liable, there are not likely to be many de minimis RPs. The new financial assistance
program can be viewed as a settlement tool and may swing a few marginal RPs into com-
pliance, especially to do site remediation studies (i.e., RI/FS).
Limitations of the Fund The fund is really quite small in comparison to the costs
of site cleanups. The monthly fee collected from the Arlington facility is required for
staffing, oversight, and pre-remedial activities. The orphan site account is limited if RPs
are unwilling to conduct cleanup activities. The limited fund and constraints on its use
when there are unwilling RPs would seem to encourage the program to reach settlements
with RPs and make use of treble damages when RPs do not comply with orders.
However, RPs might decide to "game" the system if the orphan site account is not
available, requiring the program to use injunctions to bring RPs into compliance. Overall,
the net effect of the limitations on the fund is uncertain; the limitations provide the
impetus for a strong enforcement approach by ECD, but also create an opportunity for RPs
to delay or impede negotiations.
Costs of Cleanups Sites are typically smaller and less costly to clean up than in
many other states, but cleanup standards are strict. Other things being equal, stricter
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standards will make site cleanups more costly and would reduce RP participation. ECD's
determination to implement the cleanup standards and RPs' acceptance of them is just
beginning to be tested at sites reaching the ROD stage.
Legal and RP Community Evidently, Oregon has a sophisticated environmental
bar, especially in the Portland area where many of the sites are located. The AG's office
lawyer indicated that legal counsels for RPs are encouraging them to get involved at the
RI/FS stage. The environmental bar is also participating in ECD's environmental quality
advisory committee. This consensus-building process is probably having a positive effect on
RP participation. Program staff indicated that firms in Oregon may be participating in
cleanups (studies) to foster public perception that they are sensitive to environmental
concerns.
VI. PROGRAM OUTLOOK
In its first two years, the Oregon cleanup program has moved quickly to develop
policies and regulations to guide the remediation process. The final elements of the
regulatory structure are the revisions to the site inventory and listing rules that BCD
expects to be completed in the next few months. Once the EQC approves the regulations,
BCD can begin proposing sites for the list of sites with confirmed releases and the
inventory of facilities needing remedial action.
At this point in time, ECD's cleanup efforts are focused on preliminary assessments,
site investigations, and RI/FS projects. With a backlog of known sites needing PAs and the
discovery of 50 new sites each year, the Site Assessment staff will be conducting PAs for
the next several years. The Voluntary PA program will help reduce the backlog, although
some staff time will be required to review RP-conducted PAs. In the next few years, RD
and RA projects will command an increasing share of site response staff time and program
resources in comparison to site investigations and RI/FS. Table OR-4 illustrates this trend
in site response projects for the six-year period between 1987 and 1993. Site investigations
and RI/FS projects as a percentage of total site response projects were 70% during the 87-
89 biennium and are projected to drop to 55% and then to 48% during the next two
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biennia. Site investigations and RI/FS projects account for 51.3% of site response project
costs in the 89-91 biennium but only 14% in the 91-93 biennium.
TABLE OR-4
Site Response Projects
STATE PROJECTS
• Pre-RI Investigations
• PRP Oversight
- RI/FS
- RD
- RA
- O&M
• Orphan Sites
- RI/FS
- RD
- RA
- O&M
• Removals
FEDERAL PROJECTS
• NPL - Mgmt Assist.
• NPL - State Lead
• NPL - Match
• Non-NPL Cleanups
TOTAL
NUMBER OF PROJECTS
87-89
40
21
15
13
0
2
0
1
1
0
0
0
3
10
6
0
-
4
50
89-91
43
12
22
13
6
3
0
6
5
1
0
0
3
12
7
1
-
4
55
91-93
59
20
27
12
9
5
1
9
3
3
3
0
3
14
7
1
-
6
73
STATE COSTS
89-91
$6£M
S144K
S2.7M
$975K
S263K
S1.5M
$0
S2.8M
$2.5M
$300K
$0
$0
$1.1M
$215K
$0
$25K
$150K
$40K
$7.0M
91-93
$18JM
$240K
S4.0M
S900K
$394K
S2.5M
S250K
S12.9M
$1.5M
$900K
S10.5M
$0
$1.1M
$485K
$0
$25K
S400K
$60K
$18.8M
The number and total costs of site response projects are both projected to increase
over the next two biennia. To meet this schedule, the BCD will need to add staff and
expand program funding. The funding problem is particularly critical, given the projected
increase in funding needs and the limited flexibility of existing funding mechanisms. In the
immediate future, the program will need to rely heavily on general obligation bonds to
keep orphan site cleanups on track. The use of bonds "solves" the short run funding
problem but encumbers future funds, thus limiting available funds in subsequent years.
Thus, although Oregon has taken positive steps to build up program funding capabilities,
additional funding initiatives will be required unless the State is willing to compromise on
the pace (or quality) of cleanups.
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In addition to the orphan site funding problem, there are three developments that
will be interesting to follow in Oregon:
• Whether the State will be able to negotiate settlement
agreements with RPs to conduct RAs. To date, the program
has been successful in negotiating RI/FS agreements and
appears to have the tools and resolve to build on this effort.
The major problem would seem to be the lack of a threat to
conduct the RA (and recover costs) if negotiations break down.
• Once more sites reach the ROD stage, it will be interesting to
see how the cleanup standards work in practice, how costly
they are to implement, and what effect they have on RP
participation. In the only test of the program's cleanup policies
to date, the ECD rejected the RP-proposed remedy for a site
and instructed the RP to consider more protective alternatives.
The RP has complied with this request and has consented to
implement one of these alternatives.
• The voluntary PA (and cleanup) program has the potential both
to improve the pace of cleanups and to conserve program
resources.
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PENNSYLVANIA
OVERVIEW
Pennsylvania's State superfund program for non-NPL sites has been operating only since December
1988, although its NPL program has operated since the early 1980s. Its Hazardous Sites Cleanup Act
(HSCA), enacted in October 1988, gives the State numerous authorities to undertake response actions, demand
information from RPs, and issue enforcement orders. Furthermore, the State's claims against RPs for response
costs, civil penalties, and natural resource damages must be upheld unless the RP can demonstrate on the
basis of the administrative record that the State's action was arbitrary and capricious.
These relatively strong enforcement authorities are weakened by other provisions, particularly Section
1301 of HSCA. Under this section, the State may not issue enforcement orders or recover costs for remedial
actions under HSCA unless it has brought action under other environmental laws and the owner or operator
has failed or been unable to comply. The State may, however, conduct interim or emergency responses, which
do not fall under Section 1301. In its first year of operation, the program took eleven interim responses,
including one enforcement-lead interim response.
The State must also provide 120-day advance notice before placing a site on the State priority list,
and the RP can prevent the listing by entering into a settlement for the site. When an RP initiates a cleanup
on a listed site, the site is removed from the list For sites with more than one RP, the State must prepare a
non-binding preliminary allocation of proportionate responsibility among the RPs and must allow 120 days for
negotiation. Any RP may pay its proportional share, plus a premium of up to 50%, and thereby become
exempt from further claims. The State believes that this opportunity to cash-out is contingent upon a compre-
hensive settlement with all parties, but this issue is not yet resolved.
There are complex and conflicting provisions in the 113-page statute which are likely to produce
litigation. Accordingly, the State must select its first enforcement cases carefully in order to establish
favorable legal precedents for enforcement actions.
Funding Pennsylvania's Hazardous Sites Cleanup Fund has a balance of approximately $32, million
and projected yearly revenues of approximately $50 million. Over half of its revenues are from a capital stock
and franchise tax on businesses. The rest of the Fund's income is from appropriations, hazardous waste fees,
interest, cost recovery, and Federal grants.
Sites and Staff Pennsylvania has 96 sites on the NPL and 2,335 on CERCLIS. Preliminary assess-
ments have been done on almost all CERCLIS sites. The State estimates that about 800 non-NPL sites need
further evaluation for possible cleanup under CERCLA, HSCA or other State laws. The program had 142
employees (including legal staff) in 1989 and was expected to grow to approximately 180 in 1990.
I. INTRODUCTION-SITES AND
PROGRAM HISTORY
Pennsylvania has a large inventory of sites where remedial activities will be
necessary. It has 96 sites on or proposed for the National Priorities List (NPL). Five (5)
others were deleted after a no-action alternative was selected or after completion of
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remedial action. The Commonwealth has a clear understanding of the universe of other
(non-NPL) sites requiring action. Evaluations have been completed for most of the 2335
Pennsylvania sites on CERCLIS. By August 1989, preliminary assessments (PAs) had been
completed on 2182 sites; and over 500 site investigations (Sis) had been completed. These
sites are distributed throughout the State in each of the six Department of Environmental
Resources (DER) regions. See Figure PA-1.
Based on EPA's and DER's assessment of sites, Pennsylvania estimates that
approximately 800 sites may require further evaluation for possible remedial action in
addition to those on the NPL. The Hazardous Sites Cleanup Program, established under the
Hazardous Sites Cleanup Act (HSCA) enacted in October 1988, is designed to accomplish
cleanup of sites that EPA will not be able to handle or will not be able to handle in a
timely fashion. Because most of the large sites with multiple responsible parties (RPs) are
already on the NPL, Pennsylvania expects most sites handled by the State program to have
few RPs per site. Some of these sites will require extensive remediation and multi-million
dollar remedies. Others will be smaller interim response actions. While the southeastern
Pennsylvania region has the largest number of NPL sites and CERCLIS sites, Pennsylvania
predicts that other regions will have the largest number of sites requiring action under the
HSCA Program. Many sites continue to be remedied through the State's enforcement efforts
under the Clean Streams Law and the Solid Waste Management Act.
Pennsylvania has participated in the Federal superfund program since the beginning.
It signed the first multisite agreement in the nation with EPA in 1984. In 1984, the State
had 8 people working on NPL sites. By 1987, it had expanded the staff to 25. Aside from
the NPL sites, the State had no specific program for abandoned sites; it used its Clean
Streams Law, Solid Waste Management Act, and common law public nuisance actions to
the extent possible. After several years of debate, HSCA was enacted October 18, 1988 to
deal with those sites not on the NPL. The law became effective on December 18, 1988. In
the meantime, staffing had been increased in anticipation of the new law. By the spring of
1989, Pennsylvania had over 140 staff assigned to the program, and anticipates adding over
35 additional staff in 1989-90. HSCA is a highly detailed and complex statute replete with
enforcement authorities and tools for obtaining site cleanup. It also creates a substantial
cleanup fund with anticipated annual revenues of $50 million. The law's multifarious
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CERCLIS Sites By DER Region
MEADVIUE REO. OFFICE
WM.LIAM8PORT REQ. OFFICE
WU.KES BARRE REQ. OFFICE
\£rfe>* ^'^' .a yj'
PITTSBURGH REQ. OFFICE
1
3
HARRISBURQ REQ. OFFICE
NORRISTOWN REQ. OFFICE
TOTAL SITES - 2176
-------
provisions create numerous difficult problems of statutory interpretation for potential
litigation, however.
n. STATUTE
The Hazardous Sites Cleanup Act is the basis for the State program.1 The HSCA
provides for strict liability, and the legislative history states that it also creates joint and
several liability. The HSCA provides for four types of actions:
1. Remedial actions—these require a proposal to list a site on the State
priority list, and involve complex procedures with numerous prescribed time
periods for public comment and to negotiate, compel cleanup, or fund
cleanup.
2. Interim response-any cleanup action requiring less than $2 million and 12
months to complete.2 Interim response actions do not require listing of a site,
but do require preparation of an administrative record and opportunity for
public comment.
3. Prompt interim response—an interim response for which the administrative
record may be compiled after the response.
4. Emergency response-authorized both by the HSCA and under the general
powers of the State. It requires no special procedures, and is available for
both hazardous and non-hazardous substances.
There are essentially two sources of enforcement and cleanup authorities in the law:
chapter 5 and chapter 11. Chapter 5 sets out the listing process, orders, cost recovery, civil
penalties, punitive damages, natural resource damages, and administrative record provisions.
1. 35 P.S. 6020.101 et seq.
2. An interim response may exceed these limits if continued response is necessary to
prevent, limit, or mitigate and emergency; if there is an immediate risk to public health,
safety, welfare, or the environment; if assistance will not otherwise be provided on a timely
basis; or if continued response action is otherwise appropriate and consistent with future
remedial response to be taken. HSCA 103.
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Chapter 11, which is wholly independent, sets out an additional set of enforcement
authorities.
Chapter 5 Actions
Under chapter 5, apart from emergency responses (discussed infra, in section V), the
DER has three possible approaches: prompt interim response; interim response; and
remedial action.
For a prompt interim response, the DER may issue an order for immediate action,
or take the action itself. The record on which the order or action is based is prepared after
site cleanup action is initiated, and is subject to a 90-day public comment period. The
recipient of a prompt interim response order is obliged to comply, and there is no pre-
enforcement review.
A regular interim response commences with preparation of the record, and a 90-day
public comment period. Issuance of the order or performance of the interim response by
the DER follows.
Remedial action requires the DER to invoke the listing process. The DER is
requited to give RPs notice if further investigation or response at a site is deemed
appropriate. The DER "may" allow them to conduct an investigation and undertake
appropriate response, or may elect to conduct site investigation itself. The DER must also
give all known RPs responsible for a site 120 days' notice prior to placement of a site
upon the State priorities list. There is a 30-day comment period subsequent to publication
of a site upon the list. Listing of a site is to be based on the EPA Hazard Ranking
System, on maximizing use of Federal funds, and on DER's capabilities, per HSCA 502(a).
However, sites need not be remedied in the order in which they rank. If an RP enters into
a settlement with the State prior to the placement of a site on the list, the site "shall not
be placed on the list." In addition, even if a site has been placed on the list, it must be
removed if an RP has entered into a settlement, complied with the terms of the settlement,
and "initiated a cleanup."3 In selecting a remedy, the DER must develop an administrative
record and provide a 90-day comment period before making a final decision. Then, after its
3. HSCA 502(c), (d), (e).
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final decision, the DER may issue its remedial action order, or conduct remediation itself.
The listing provisions suggest that few, if any, sites will ever appear on Pennsylvania's
priority list (apart from orphan sites). Listing is a prerequisite to State-funded remedial
action.
Remedial action under chapter 5 is further complicated by a requirement that in any
case involving multiple RPs, the State must prepare "a nonbinding preliminary allocation of
proportionate responsibility among all known responsible persons," and give notice of such
allocation. The State is then required to allow the RPs 120 days to reach agreement
During this period the State is forbidden from commencing an action for response costs,
from issuing an enforcement order, or from commencing a response (other than an interim
or emergency response). An additional section provides that any party who "voluntarily"
accepts responsibility and agrees to pay its proportional share as determined plus an
appropriate premium of up to 50% of that share, shall not be subject to claims in excess of
that amount. This provision renders the process of nonbinding allocations difficult, and is
likely to be the subject of litigation. For example, it is unclear whether the ability to cash-
out is only allowed if there has been an agreed allocation, or if it is unilaterally exercisable
by any RP on the basis of the initial non-binding allocation of responsibility.
Chapter 5 authorizes recovery of response costs. Such recovery does not depend
upon prior issuance of an order. That is, the State's right to recover response costs is based
solely upon its having expended funds, not upon the refusal of an RP to perform. The
same is true for natural resource damages; there are no prerequisites. However, the State
may only collect treble damages if it has issued an order and the RP has "willfully" failed
to comply. Civil penalties are also provided for where an order has been violated,
regardless of intent.
The standard of review of response costs and natural resource damages is deferential
to the State: in an action brought by the State to recover response costs, civil penalties,
and natural resource damages, the State's claim must be upheld unless the RP can
demonstrate on the basis of the administrative record that the State's action was arbitrary
and capricious. The State's assessment of natural resource damages is furthermore
presumptively valid as a matter of law, subject to rebuttal by the RP. The State is entitled
to pre-judgment interest on its recoveries of response costs. Response costs include
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administrative and legal costs, and the RPs are responsible for these in the amount of (a)
10% of the response action costs or (b) the actual administrative and legal costs, whichever
is greater. This provision minimizes the potential burden on the State to create a record
keeping system solely for the purpose of recovering response costs.
The law provides for liens to be filed upon an award of response costs, civil
penalties, or natural resource damages. The lien is a standard judgment lien, and does not
have special priority as a "superlien." HSCA contains a deed recordation provision,
requiring the grantor of land to insert language in the deed of any land if a hazardous
substance is or ever has been disposed of thereon to the grantor's actual knowledge.
Chapter 5 also contains authority to issue orders for access or to require information
and records. These orders, unlike the other Chapter 5 orders, are appealable to the
Environmental Hearing Board. However, even for these orders the standard of review is
highly deferential-requiring that the order be upheld so long as the State has a reasonable
basis to believe there has been a release or threat of release of a hazardous substance or a
"contaminant," and the order is "reasonably related" to determining the need for response,
to choosing or taking the response, or to otherwise enforcing HSCA. The DER may also
seek enforcement of such an order in court, or seek injunctive relief in lieu of an order.
Chapter 11 Actions
Chapter 11 provides an entire alternative set of enforcement provisions.4 Section
1101 declares the release of any hazardous substance or a violation of any provision of
HSCA to be a "public nuisance," for which response costs are recoverable. Section 1102
provides for enforcement orders, study orders, access orders, and orders requiring or
modifying response actions. Unlike the orders issued under chapter 5, these orders do not
require preparation of administrative records, or require the State to comply with notice
provisions, negotiation provisions, and the like. Also unlike chapter 5, however, these
orders may be appealed by RPs to the Environmental Hearing Board and to court. These
orders are immediately effective upon issuance and must be complied with, even pending
4. HSCA 1103(c): "The penalties and remedies prescribed by this act shall be deemed
concurrent. The existence of or exercise of one remedy shall not prevent the department
from exercising any other remedy under this act, at law or in equity."
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appeal, unless the recipient of the order obtains a supersedeas (stay) from the Board. If the
administrative order is not complied with, the recipient is guilty of contempt of court
Under Pennsylvania practice, in order to obtain a supersedeas it is the order recipient's
burden to prove that it is likely ultimately to prevail on the merits, that it will suffer
irreparable injury if the order is not stayed, and that the State and public will not suffer
injury if the order is stayed. In addition to issuing orders, the DER may seek injunctive
relief in court; the statute gives the same authority to district attorneys and solicitors of
affected municipalities.
Section 1104 provides for civil penalties of up to $25,000 per offense per day, and
provides for the award of a minimum penalty of $5000 per day for violation of an infor-
mation or access order. The statute provides for criminal penalties and prison terms for
making false reports, altering response actions ordered by the State, obstructing any agent
or employee of the state, and certain other conduct identified as unlawful. Other provisions
of chapter 11 allow citizen suits and citizen intervention in State cases, and protect
whistleblowers. Another provision creates a legal presumption that if contamination or
pollution is found within 2500 feet of the perimeter of an area where a release has
occurred, the person responsible for the release is presumptively liable without further
evidence. The presumption may be rebutted only by "clear and convincing evidence."5
Section 1113 requires the DER to give public notice of a proposed settlement in
any proceeding under HSCA, allow a 60-day public comment period, and respond in
writing to the comments. This provision is evidently intended to protect the public's rights
to review a settlement hi a way alternative to the Chapter 5 administrative record approach.
However, it contains an appeal provision which may be problematic, especially if is usable
by non-settling RPs. Any person adversely affected by the settlement may "appeal" it to the
Environmental Hearing Board. The settlement must be upheld unless it is arbitrary and
capricious based on the administrative record.
5. HSCA 1109.
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Section 1301
Although HSCA is replete with enforcement authorities and options, its flexibility is
undercut by section 1301, inserted in the bill immediately before its enactment That
section provides that owners or operators or other RPs:
shall not be subject to enforcement orders or the cost recovery
provisions of this act, until the department has instituted
administrative or judicial enforcement action against the owner
or operator under other applicable environmental laws and the
owner or operator has failed to comply with or is financially
unable to comply with such administrative or judicial enforce-
ment action. In the event of noncompliance with such admin-
istrative or judicial enforcement action, the provisions of the
act may be applied by the department unless the owner or
operator has obtained a supersedeas from the board or the
court conducting any such judicial enforcement action. For the
purposes of this subsection, such a supersedeas shall be based
on whether there is a release or threatened release at the site,
which constitutes a danger to the public health and safety or
the environment.
The effect of this provision is to require the State to bring an action against an owner or
operator under its Clean Streams Law, Solid Waste Management Act, or other law, and
lose (or win but be unable to collect or obtain compliance), before resorting to the
enforcement authorities or cost recovery provisions of the HSCA for remedial actions.
(DER asserts that it may also issue an order under these other laws, determine that
compliance will not be achieved, and then resort to HSCA.) This requirement goes far
beyond the general preferences expressed in the statutes of other States for use of other
authorities as a first resort. This provision seems to require certain exercises in futility, or
delay in obtaining full remedies (i.e. where the owner or operator is only partially capable
of remediation). This provision also means that most settlements driven by this law will be
under other statutes. The need to use other statutes also creates organizational and
jurisdictional difficulties for the staff. Potential HSCA sites may or may not be under
HSCA jurisdiction, depending upon their enforcement posture. This provision does have an
exception. Section 1301(c) provides that "nothing in this section shall affect the authority
of the department or the governor to implement an interim response or an emergency
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response." This may provide the State with an opportunity to order RPs to undertake
interim responses even though remedies under other statutes have not yet been pursued.
This issue will probably be litigated.
In addition, the language of section 1301 bars only the issuance of enforcement
orders and initiation of cost recovery. It does not bar the initiation of site investigation
under section 501, or even the selection of a remedy and listing of a site. It may be that
settlements can be reached with other RPs under chapter 5 even though 1301 has not been
complied with, so long as the remedial action order is not yet issued.
IH. ORGANIZATION
In Pennsylvania, the Department of Environmental Resources (DER) is responsible
for all environmental protection and conservation matters (apart from fish and game, which
are handled by separate commissions). Under the Secretary, the DER's duties for cleanup
activity are divided between two Deputy Secretaries—Environmental Protection, and
Resources Management. Within Environmental Protection is the Bureau of Waste Manage-
ment, which includes the newly established Hazardous Sites Cleanup Program. See Figure
PA-2.
The Hazardous Sites Cleanup Program, with approximately 30 staff in Harrisburg,
has four sections-site assessment, federally funded cleanups, enforcement, and state funded
cleanups. In addition to these headquarters personnel, the six regional offices of DER have
approximately 42 personnel in HSC sections; these offices will add 36 more staff in 1990.
The personnel in the regions report to the regional solid waste manager, rather than to the
HSCA Program in Harrisburg. However, during the first few years of implementing
Pennsylvania's new Act, the central office in Harrisburg has maintained some direct control
over regional activities.
The Information Management Section within the Bureau of Waste Management
serves the program. It is responsible for tracking all hazardous waste manifests-entering
approximately 900 per day. In addition, it handles the quarterly reports that determine the
hazardous waste management and transportation fees that partially fund the HSC program.
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6/21/89
HAZARDOUS SITES CLEANUP PROGRAM
ORGANIZATIONAL STRUCTURE
Department of Environmental Resources
Arthur A. Davis, Secretary
OFFICE OF RESOURCES MANAGEMENT
James Grace, Deputy Secretary
Administration
(Personnel, Data Management)
ENVIRONMENTAL PROTECTION DEPUTATE
Mark M. McClellan, Deputy Secretary
OFFICE OF CHIEF COUNSEL
Keith Welks, Chief Counsel
H
o
c!
»
W
Support Services
Toxics Team
Office of Engineering
(Construction Oversight
at Site Cleanups)
Bureau of
Laboratories
(Sample Analyses)
Bureau of Waste Management
(Program Management
Fee System & Support)
Bureau of Hazardous Sites
and Superfund
Enforcement
Hazardous Sites Cleanup Program
(Program Development, EPA
Liaison, State-wide Program Mgmt.)
I
Norristown
I
Wilkes-Barre
I
Harrisburg
I
Williamsport
I I
Pittsburgh
Meadville
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The Section currently has six staff and 12 temporary staff for entry of previous years' data.
(The $2.7 million computer system was set up in December 1988.)
Also under the Environmental Protection Deputy is the toxics team of staff
lexicologists and the Bureau of Laboratories. These serve more than just the HSC Program,
but the Program funds certain of these positions.
Under the Deputy Secretary for Resource Management, the Office of Engineering is
responsible for major construction contracting for remedial actions. Seven positions in this
office are funded by HSCA.
The Office of Chief Counsel within DER provides all legal support for the program.
These attorneys handle counseling, regulatory review, negotiation, and administrative and
judicial litigation. There are five lawyers in Harrisburg and nine in the regional offices
dedicated to the HSC Program. An additional headquarters lawyer provides support on
contracting. There are several paralegals and support staff, and in 1990 there will be a
special investigative unit for RP searches.
In addition to these units, the DER has a separate Emergency Response Program,
which reports directly to the Deputy Secretary for Environmental Protection. It has one
response coordinator in Harrisburg and two in each of the six regions, plus teams of 6-12
employees in each region who handle emergency response (especially during evenings and
weekends) in addition to other duties.
In all, there were 142 staff involved in the relevant programs in 1989, with a
projected expansion to over 180 in 1990. Despite the normal pattern in DER of decen-
tralized decisionmaking and actions—leaving most things to the regions—the HSCA Program
is highly centralized. This has occurred for two reasons: First, it was assembled quickly
with the core being the NPL-based program that had been centralized; and second, because
the statute is so complex and subject to litigation, the DER needs to control case selection
and move cautiously in order to establish good precedents in the courts and before the
Environmental Hearing Board. It is projected that the program will become more
decentralized once it has operated for a while.
One obstacle to the effectiveness of the organization is likely to be the experience
level of the field staff. Although the legislature authorized a substantial number of positions
for this program, the entry level salaries are quite low even for those positions requiring
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technical expertise-necessitating a substantial dependence on recent college graduates. Mid-
level salaries are also low, relative to salaries in the private sector. The Norristown
(Philadelphia) region is, in fact, unable to fill positions or retain staff because of salary
levels.
With respect to site management, the state will use a "team" approach once the
program is fully underway. In the regions each site will have a project manager, a chemist,
a hydrogeologist, and a lawyer, plus one headquarters contact. The first few sites handled
by the program-the state did four interim responses hi the first six months of operation-
were handled mostly with individual contracts executed out of headquarters; the regional
staff oversaw onsite actions.
IV. FUNDING
Revenues
The Hazardous Sites Cleanup Fund had a carryover balance of $32 million on July
1, 1989. Annual revenues are projected to be approximately $50 million. See Figure PA-
3.6 The Fund derives its revenues from the following sources (projected FY 89/90 revenues
in parenthesis):
• Capital Stock and Franchise Tax ($27.1 million)
• Appropriations ($15.9 million)
• Hazardous waste management and transportation fees ($4.5
million)
• Interest ($2.2 million)
• Cost recovery (none projected yet)
• Continuing Federal grant funds (three-year Management Assis-
tance Grant $465,000)7
6. Figure PA-3, provided by the DER, does not include the interest income expected to
be received. This amount is projected at $2-3 million/year.
7. Does not include current cooperative agreement, multisite cooperative agreement,
and management assistance grants for NPL sites, and PA/SIs. The multisite agreement
alone exceeds $10 million.
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HAZARDOUS SITES CLEANUP PROGRAM
FUNDING
$5 Million
Transportation and
Management Fee
$15 Million
General Fund
Revenues
$30 Million
Capital Stock
Franchise Tax
$50 Million Annually
30% Public Funding
70% Private Funding
e
s
u
-------
The largest portion of the Fund is derived from the Capital Stock and Franchise
Tax, which applies to most businesses in the Commonwealth including manufacturing,
service, and retail. The tax, which predates the HSCA, is imposed under the Pennsylvania
Tax Reform Code of 1971, section 602. The legislature had considered reducing the 9-mill
tax by one-half mill, but in considering ways to fund site cleanups retained the tax at the
same level and obligated one-half mill of the tax to the Fund. The one-half mill tax is
slated to produce $30 million per year for the Fund.
Beginning October 1, 1992, and each succeeding October, the State must determine
the amount of the previous fiscal year's expenditures and encumbrances and the fund
balance. If the Fund balance exceeds the prior year's expenditures and encumbrances by
two times the expenditures and encumbrances, the one-half mill tax ceases. It resumes after
a year in which the ending balance is less than the prior year's obligations. This provision
creates a substantial incentive to expend Fund monies. The cut-off may influence cleanup
strategies and enforcement activities. For instance, the provision may discourage the State
from pursuing RP cleanups, or it may force the State to spend quickly at the end of a
fiscal year. Similarly, because of the lengthy administrative record and site-listing process
required to initiate remedial actions, it may in the early years encourage use of the more
flexible interim responses.
The hazardous waste management and transportation fees are designed to produce $5
million per year. The Secretary of the DER has authority to adjust the fees to assure that
they produce this level of funding plus the reasonably projected administrative cost of
collecting the fee. The fees are designed not only to produce revenues, but to provide
incentives toward recycling, treatment, and waste minimization, and against disposal. The
statutory rates that apply until adjustment by the Secretary are:
• Transportation of hazardous waste for storage, treatment,
or disposal~$3/ton
• Transportation of hazardous waste to a recycler~$1.50/ton
• Storage of hazardous waste at a legitimate commercial
recycling facility-no fee
• Storage or treatment of hazardous waste on the site
where generated or at a captive facility-no fee
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• Storage of hazardous waste at a commercial hazardous
waste management facility~$2/ton
• Treatment or incineration of hazardous waste at a
commercial hazardous waste management facility~$5/ton
• Disposal of hazardous waste at a commercial disposal
facility-$12/ton
• Disposal of hazardous waste on the site where generated
or at a captive facility~$8/ton
The transportation and management fees are cumulative. Because there are no
management fees charged on hazardous wastes going out of state (only transportation fees),
the fee system may encourage shipment of wastes out of state. The entire fee system may
discourage wastes from entering the State. However, neighboring States also have fairly
substantial fee structures, so these effects are minimized.
The State relies far more heavily on the tax revenues than on the fees for several
reasons. First, heavy industry in Pennsylvania is generally in poor financial condition and
not able to fund the bulk of the program. Second, there are currently no commercial
hazardous waste landfills in operation in Pennsylvania. The $5 million per year fee was
thought to be the maximum available from this source. The fee is also linked to certain
benefits and grant programs in HSCA described below.
The DER expects appropriations for the program to remain relatively steady at $15
million per year.
Interest income could be very substantial given the size of the Fund, particularly in
the early years. The requirement to expend approximately half the fund each year
beginning in 1991-92 may make this component less significant over the long term.
In previous years, the State received EPA funding under management assistance
grants (MAs), a cooperative agreement (CA) to conduct PA/SIs, and a multisite cooperative
agreement (MSCA). These funds were essentially dedicated to NPL sites and to PA/SI
work. Any future grants from EPA will be deposited into the Fund. Pennsylvania currently
has no CORE grant.
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Expenditures
The Fund may be used for the following purposes:
• Program administration-salaries, management, expenses (approx. $14 million/
year)
• CERCLA match
• Remediation/response contracts (approx. $30-35 million/year)
• Grants to industry for recycling/minimization-25% of equipment costs (up to
$2 million/year)
• Grants to host municipalities of new facilities ($2 million/year in Host
Municipalities Fund)
• Grants to host municipalities for evaluating siting of new facilities (up to
$50,000 each)
• Grants to counties for planning related to siting of new facilities (up to
$50,000 per county)
• Grants to municipalities for evaluating proposed remedial actions (up to
$50,000 each)
• Loan fund to assist industries in cleanups (2% of annual management and
transportation fees-vi'z. $100,000/year)
The Fund may be used for all of the above purposes, and for emergency responses.
In addition to hazardous substance emergency responses, up to $2.5 million of the Fund
may be used annually for emergency responses for nonhazardous substances where there is
an imminent and substantial endangerment to the public health and welfare or the
environment. This is in addition to the State's existing emergency response program which
is funded from other sources.
The Fund may be used for alternative or replacement public or private water
supplies necessary to protect the public health.
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The Fund may be used for a State-funded cleanup at an NPL site if EPA fails to
act and has no agreement with an RP, provided, however, that the total State funding in
excess of the minimum share shall not exceed $6 million annually.8
In general, the State expects to spend approximately $50 million per year.
Obviously, items like the State CERCLA match and the costs of remedial actions will vary
over time, as will the award of siting grants to municipalities.
Fund Evaluation
The Fund is expected to have revenues and expenditures of approximately $50
million per year, but these expenditures have been lower in the first year, and can be
expected to be somewhat lower in the first several years because of the lengthy process
required for a full remedial action under HSCA. However, excess dollars in the Fund
during the first few years will rollover into the next year's available funds. This will allow
spending in excess of the $50 million as remedial sites are loaded into the pipeline. Federal
matching obligations may also require some of these funds, especially considering the large
number of NPL sites now reaching the remedial action stage.
Because of the variety of revenue sources, and the number of expense categories,
the size of the Fund may be somewhat misleading. Approximately $14 million/year is
required for program administration, which is approximately $1 million less than expected
annual appropriations. Approximately $5 million/year will be paid out in grants and loan
funds. The recycling grant program, the Host Municipalities Fund, and the remedial action
loan fund are all expressly funded out of the $5 million management and transportation
fees, so this category is mostly a "wash" of revenues and expenditures (although the $2
million recycling grants phase out in 1993). This leaves approximately $33-34 million/year
in revenues plus any carryover funds available for the CERCLA match and for State
cleanup activities at non-NPL sites. Assuming the match requirement is $10-15
million/year, Pennsylvania projects annual revenues of about $18-24 million to deal with
8. HSCA 502(e). This provision was probably included because of Pennsylvania's
experience under the initial CERCLA program when federal funds ran out (viz. before
superfund reauthorization). Pennsylvania advance-matched over $1.6 million prior to SARA
in order to assure continuation of the cleanups.
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State sites. Including carryovers from early years, Pennsylvania may have $30-35 million/
year available for these purposes.
The State has estimated that EPA and the HSCA Program will need to evaluate
further action at about 800 non-NPL sites. It also projects that about 60% of the sites
selected for action will be handled by RP cleanups or by state cleanups with successful
cost recovery. This percentage estimate is based on the current breakdown of funded vs.
enforcement sites in the Federal program. Although it is used consistently by persons
throughout the program, it represents a hunch or best guess.
Some portion of the 800 sites will need action under the HSCA Program. At this
time, it is too early to assess whether a large percentage of these will require expenditures
from the Fund. Over a twenty-year period, assuming appropriation levels continue to
support the program and all other factors remain constant, the State will have approxi-
mately $400 million to devote to State sites. Even if a fairly high percentage of sites
ultimately require State funding, the program appears better funded than that of many other
States.
The actual targeting of the Fund is likely to require its use for interim response
actions and for actions related to the enforcement, oversight and management of RP-per-
formed cleanups, as well as for remedial actions. Cost recovery could allow the Fund to
deal with more sites. However, cost recoveries cannot exceed the $30-35 million annually
available for State sites plus some amount for administration, plus whatever cost recovery
is received for the funds spent on the CERCLA match (approximately $15 million per
year).
The DER's stated goal for the program is to clean up 250 (150 federal and 100
State) sites by the year 2000 (viz. over the first 12 years of the program). DER projects
that 4-6 interim responses and 4-6 remedial actions on non-NPL sites will be initiated each
year. Provided that RP cleanups constitute significantly more than the majority, the HSCA
Fund may be adequate over this period.
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V. REMEDIATION PROCESS
In its first year of operation, the HSCA Program has focused primarily on staffing,
developing procedures, and conducting interim response actions in order to make the
presence of the program felt. The State has conducted interim responses at 11 sites. Most
were prompt action interim responses. One was an RP-lead response.
Currently, the procedure for identifying sites for action and commencing action is as
follows: A regional office will refer a site to the headquarters office of the HSCA Program
with a Hazardous Sites Assessment Report (HASAR). The Assessment Section will then
evaluate the HASAR to determine whether to proceed. (If a PA/SI has already been
completed, this is used in lieu of the HASAR). For those sites where it is proposed to
proceed, the region prepares a document to justify the action proposed to be taken
(Response Justification Document). This is reviewed by the HSCA Program; if action
appears to be warranted, the Program recommends that the Deputy Secretary for
Environmental Protection "deem" the site appropriate for action.9 Criteria for "prompt
interim response" have been developed by the Program. Remedial response sites are
selected based on their HRS scores.
After a site has been deemed, the Program initiates one of the actions described
above in section n. One RP-lead and ten Fund-lead interim responses have been initiated
in the first year of the program. Where the action is a Fund-lead interim response, the
work order and scope of work are prepared by the region and faxed to the headquarters
office. That office approves the scope of work and notifies the contractors to prepare a
work plan and commence work, usually within 1-5 days.
Examples of early interim responses under the new program include the Metzler
Bam Site and the Railroad Borough Site. At Metzler Barn, the owner of a barn full of
thousands of gun solvent containers signed an access agreement, and the state's contractor
took the response action-collecting the solvents, shredding the cans on site, and arranging
for disposal. The action cost approximately $450,000 and took 12 months to complete. The
Railroad Borough case was a removal of 150 drums and contaminated soil from a creek
9. This term comes from HSCA 501(a).
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bank above a water supply, and was completed in 4 days. It cost approximately $200,000.
Follow-up soil removal actions continue. Cost recovery may be pursued in both cases.
The DER currently has two interim response contractors under contract-one for $2
million and one for $6 million-with the option of extending each contract to $10 million
or more. It also has three general technical assistance contractors under contract, each for
$2 million, with the option of extending the term and amount. It also has a laboratory
services contract.
The remedial action process, also described above, includes preparation of an
administrative record, public comment, up to two 120-day negotiating periods (which may
overlap), and numerous settlement provisions. In determining how best to implement
remedial actions under HSCA, the DER is attempting to assess the advantages of using the
Fund to conduct the RI/FS, and then requiring RPs to conduct remedial action. This
approach may have several advantages. It allows the State to maintain closer control and
supervision over the technical adequacy of the work. It is consistent with sections 501 (a)
and (d), which allow the State the flexibility of ordering an investigation or conducting it
itself. This approach could potentially streamline the administrative decision process set out
in sections 505 and 506. The DER has experimented with this approach at one site, where
the monitoring wells and sampling were installed and evaluated by the DER, and then the
operator signed a consent order to conduct both airstripping and evaluation of the
contamination.
Section 1301 Implications
The HSCA remedial action process is lengthy. The effect of section 1301 on this
process is potentially quite significant. The State is obliged to attempt to get site cleanup
from owners/operators under other environmental statutes before attempting to act against
owners, operators, generators, or transporters under HSCA. The existence of 1301 creates
some jurisdictional problems in the regions-is a site a HSCA site or not? The shifting
status of sites makes the organization of work more difficult Staff in the regions are
divided by program, but because potential HSCA sites may be dealt with under water or
solid waste laws, responsibility for a given site may shift.
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Section 1301 has also abrogated the State's ability to choose the best remedy for
each site based on the characteristics of the site and the flexibility of the remedy. Instead,
it establishes a statutory requirement that dictates the type of response and the target, even
where these may be less than optimal or sufficient from an environmental or fiscal point of
view, or where these might occasion substantial delay. Section 1301 threatens to be the
greatest constraint upon site cleanup where a substantial remedial action is needed and
there is a viable owner/operator (but one which is unable or unwilling to shoulder the
entire burden). Such an owner/operator may vigorously contest any enforcement actions
under the Clean Streams Law or Solid Waste Management Act, and tie the State up in
lengthy appeals under those laws—preventing the State from even invoking HSCA.
Because of 1301 and the elaborate procedures surrounding remedial actions, the
Pennsylvania program appears to be developing a strong preference for interim responses-
which are subject to neither constraint. Interim response orders may be issued, or the State
may conduct Fund-lead interim responses.10 Because of the relatively high $2 million cap
on interim responses (higher than many so-called remedial actions hi many other States),
Pennsylvania may be able to avoid many of the difficulties in its statute and accomplish a
great number of responses. This solution is, however, not available if a substantial remedial
action is needed.
Companies appear to be conducting more cleanups under other State laws since the
enactment of HSCA. This is not a result of 1301, however-which is, after all, a constraint
upon the state, not upon the RP. Rather, it results from the prospect of owner/operators
facing potential site listing, treble damages, and natural resources damages-all of which
may be avoided by settling under another statute.
NPL Sites
Of the 96 sites on the NPL in Pennsylvania, the State has the lead on 17. It does
not anticipate taking on additional state leads in the near term because of the need to focus
on the new HSCA program, and also because of the perceived inefficiency of the
10. Although the State could issue an interim response order under either section 505 or
section 1102, the State is more likely to use 1102, which requires no administrative record
or public comment period but does allow an appeal to the environmental hearing board.
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additional layer of oversight and auditing by EPA. The DER also acknowledges that the
cumbersome contracting procedures required by Federal and State law seem to offer few
time advantages at NPL sites over EPA contracting.
Pennsylvania anticipates adding additional sites to the NPL. It is confident that a
number of sites not yet on the list will rank high enough to be placed on the NPL.
Remediation procedures on Pennsylvania NPL sites are fairly standard by now. However,
the State is concerned with potential operations and maintenance (O & M) costs of some
remedies. Also, the estimated cost of EPA remedial actions seems to be increasing rapidly
(e.g. the Lansdowne site remedial action increased from $5 million to $11 million; the
Lackawanna site from $17.5 million to $28 million; the Drake Chemical site will cost
approximately $90 million). The State is concerned at meeting these shares while having
insufficient control over costs.
Emergency Response
Pennsylvania has a well-organized and funded emergency response capability at the
State level. The program was organized in June 1987 and is independent of the HSCA
program (which was enacted later). It handles all types of emergency responses and is not
limited to hazardous substances.
In 1988, the emergency response office handled 1600 incidents. Transportation
incidents comprised 377; spills from fixed sites 1042. Fires, drinking water issues and other
events accounted for the remainder. Pennsylvania has achieved a high rate of direct
payment for responses by the responsible party; it paid for only 20 responses in 1988.
Responses are primarily done by contractors, but overseen by the response coordinator or
assistant or response team in each of the 6 regions. Responses are funded out of various
State funds including the Clean Streams Fund, the Solid Waste Abatement Fund, and
others, as applicable.
Now that HSCA also provides for emergency response capability, the two programs
have coordinated their jurisdiction. In general, if a response is needed within the first 24
hours, it is handled by the emergency response office; if longer than that, the HSC
Program may handle it. The two offices have cooperated on one of HSC's four interim
responses in 1989~the emergency response office provided access to contractors.
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The Pennsylvania DER handles most emergency responses in the State. EPA's
Region HI is more active in areas close to its offices in Philadelphia and in response to
larger incidents. The Coast Guard handles spills in navigable waters within its jurisdiction.
DER coordinators are involved in all Federal responses.
Cleanup Standards
The State's legal standard for cleanup (based primarily upon its Clean Streams Law,
which applies to groundwater as well as surface water) is cleanup to "background." While
the State may, in settling a case, accept a different standard, the State will not release
liability unless background is achieved.
The "background" standard does not expressly apply to cleanup actions voluntarily
undertaken by the State such as a State-funded cleanup. Rather, it is a regulatory standard.
This distinction is expressly retained in HSCA 504(f), which allows the DER to waive a
cleanup standard if the cleanup is paid for by the Fund.
The State uses its various regulatory program standards as ARARs. It has no risk
factor regulations or regulations specifically promulgated to serve as cleanup standards. It is
developing such regulations under HSCA. Section 504 of HSCA specifies that, until
completion of the rulemaking, cleanup standards are those specified in section 121 of
CERCLA (including ARARs). Section 504 allows the State to use more stringent standards
on a case-by-case basis without such rulemaking either (1) if the general standards would
not adequately protect public health or the environment or (2) if the additional standard
would significantly enhance environmental protection relative to its cost.
VI. PROGRAM OUTLOOK
Pennsylvania has a large number of hazardous waste sites and appears to have
allocated sufficient resources to the task of response. The HSCA funding mechanisms are
stable. The program is adequately staffed, although staffing needs and allocations may
become clearer once the program has operated for several years. In its first year of
operation, the program has concentrated on interim response actions. A shift to more
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remedial responses can be expected in the future. The emergency response effort appears to
be well-organized.
It is too early to assess program organization. Pennsylvania intends to decentralize
its HSCA effort after the program gains experience. A decentralized program may facilitate
cleanups, but will do so only if the DER can attract and retain sufficient highly-qualified
technical staff in the regional offices. This may continue to be a problem in some regions
absent a revision of the salary structure.
The most difficult issues potentially facing the program are whether the complexity
of the statute and opportunities for litigation will hinder the State's enforcement efforts, and
whether the numerous prescribed steps in the remediation process will permit a rapid pace
of cleanups. Neither of these can be assessed with certainty. The statute is more complex
than any other State superfund statute, and may provide grounds for litigation by RPs. The
statutory process for obtaining remedial responses is detailed and may require lengthy
periods- of time (especially where there are multiple RPs). Pennsylvania may need to
streamline this process to achieve expeditious remediation.
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TEXAS
OVERVIEW
Operating under the Texas Solid Waste Disposal Act (SWDA), the Texas Water Commission (TWC)
conducts State superfund efforts in Texas. State activities, including CERCLA match, are funded by the
Hazardous Waste Disposal Fee Fund, which is established by the SWDA and is referred to as "Fund 550."
Fund 550 will collect approximately $9 million annually, mostly from a hazardous waste disposal fee, interest,
and a new commercial hazardous waste fee. It has a current unobligated balance of $13 million. The TWC
oversees or leads work on the 29 non-NPL sites listed on the State registry, and it handles 15 of 16 Fund-
lead NPL sites. There are 29 Texas sites listed on the NPL.
The Texas Hazardous Substances Spill Prevention and Control Act supplements the authority under
the SWDA, providing funds for cleanup of hazardous substances discharged into State waters, including
groundwater. Though it has a cap of $5 million, this fund contains under $1 million.
The SWDA provides order authority, injunctive relief, liens, cost recovery, and civil and criminal
penalties. For each new site the TWC must determine whether the site can be handled under RCRA-type
authorities or pursuant to an agreed order. If it cannot, the TWC evaluates the site for State registry listing,
holds a non-adjudicatory public meeting, and issues superfund orders. Fund 550 monies may not be used for
remedial actions until orders are issued to any known RPs at a site. Though the State may recover its costs,
no oversight expenditures may be recovered if RPs voluntarily conduct RI/FS or RD/RA. Cleanup orders may
be appealed by RPs to court.
Enforcement Of the 10 sites first placed on the State registry in 1987, RPs were ordered to perform
RI/FSs on 7 sites. These orders resulted in compliance in two cases, appeals in four, and noncompliance in
one. The appeals are still pending. In an attempt to prevent future appeals, since 1988 the TWC has been
inviting RPs to negotiate before it issues orders. This policy, which was subsequently required by 1989
amendments to the SWDA, has resulted in six negotiated RI/FSs on the 18 sites added to the State list in the
last two years.
Program Organization Within the TWC Hazardous and Solid Waste Division, the Enforcement
Section attempts to secure RP compliance using non-superfund enforcement authorities. If these attempts fail,
the case is referred to the Contract Remedial Activities Section, which has a staff of 27. The majority of the
staff works on NPL sites. Five staff are responsible for the 29 State registry sites. The TWC Legal Division
provides legal counsel for the State superfund program; the Environment Section of the Attorney General's
Office handles all litigation for the TWC.
A variety of circumstances have limited the remediation of State registry sites. These include
understaffing, delays occasioned by RP appeals, and the need to perform RI/FSs on Fund-lead sites. As of fall
1989 none of the Fund-lead RI/FSs on State registry sites had yet commenced because of delays in procedure
and contracting Thus, in FY 89, the State Superfund Unit spent only $140,000 of Fund 550 monies, and it
expects to spend only $798,000 for State registry sites in FY 90. Although Fund expenditures will increase,
sufficient funding for long-term cleanups of all State registry sites is uncertain.
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I. INTRODUCTION-SITES AND
PROGRAM HISTORY
Texas is the nation's largest generator of hazardous waste and is facing the need for
cleanup of hazardous waste and hazardous substance disposal sites associated with its long
industrial history. Waste sites in Texas are most frequently associated with the petroleum
and petroleum refining industry, the chemical industry, wood treating facilities, pesticide
formulation, and metals reclaiming operations. As of 1989, Texas has 29 sites listed or
proposed for listing on the federal National Priorities List (NPL). In addition, the state has
other sites requiring remediation, including 29 sites placed on its State registry since 1987.
The identified NPL and State registry sites are not evenly distributed throughout the State.
The greatest concentration is in the vicinity of Houston (Harris County), which has six (6)
sites on the State registry and ten (10) on the NPL. The listed sites are not the entire
universe of sites requiring attention. Texas has over 1000 sites on CERCLIS, of which
some number will require remediation.
Texas first enacted its Solid Waste Disposal Act in 1969. This Act has been
amended on numerous occasions, and in its current form now constitutes the core of Texas'
program for the management of solid and hazardous wastes, the management of hazardous
substances, and the cleanup of sites. Essentially all disposal prior to 1969 was lawful
unless it either violated the state water quality laws or constituted a public nuisance.
Throughout the 1970s and 1980s amendments to the Act further specified the requirements
for handling and disposal of solid and hazardous wastes. In 1981 the legislature enacted a
bill to establish the Texas Disposal Facility Response Fund, in order to provide matching
funds for federal Superfund sites. In 1982, the governor designated the Texas Department
of Water Resources (TDWR) as the agency with responsibility for Superfund activities.
In 1985, the TDWR was merged into the Texas Water Commission (TWC). That
same year, the legislature amended the SWDA to create a State "superfund" program for
sites not eligible for funding under the federal program. Until that time, Texas had no
program for handling inactive or abandoned sites, or for reaching generators and
transporters with respect to such sites, except through the use of its water quality laws.
Under the 1985 law the Hazardous Waste Fee Fund superseded the prior Fund; the Fee
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Fund, generated by fees on the disposal of hazardous waste, was made the source for State
CERCLA matching monies and monies for Texas cleanup of other waste sites that would
be placed on the new State registry of sites. Twenty-nine (29) sites were listed on the State
registry of sites in 1987, 1988, and 1989 under the 1985 law. In 1989, the law was
substantially amended to provide for revised procedures and resources in a consensus bill
backed by the Texas Chemical Council and the Texas Chapter of the Sierra Club.1
H. STATUTE
The Texas program for control of inactive and abandoned sites and for cleanup of
sites is governed by two primary statutes. These are the Texas Solid Waste Disposal Act
(SWDA)2 and the Texas Water Code. The State "superfund" program consists substantially
of sections 8(g), 9, 11, lla, 12, 13, 14, and 15 of the SWDA (recodified as Tex. Health &
Safety Code 361.181-.203, 361.271-.280). The entire statute was recodified effective
September 1, 1989. References hereafter are to the original SWDA section numbers, with
the new section numbers given in parenthesis. Additional authorities relevant to the cleanup
of sites are found in Water Code Chapters 5, 26, and 27, and in the regulations at 31
Texas Administrative Code Chapter 335 ("Industrial Solid Waste and Municipal Hazardous
Waste"), and Chapter 337 ("Enforcement Procedures").
Enforcement Authorities
The TWC has a number of order authorities available to it for cleanup of sites
under these statutes. Section 4(e)(10) (361.301) of the SWDA provides for emergency
orders relating to solid waste management activities in order to protect public health and
safety or the environment. Section 4(m) (361.303) provides for corrective action orders for
releases of hazardous waste into the environment from RCRA interim status facilities.
1. S.B. 1502, Acts of 71st Legislature, Regular Session (1989).
2. Tex. Rev. Stat. Ann., Health-Public, Article 4477-7 (Vernon Supp. 1988) as
amended; recodified as Tex. Health & Safety Code, Chapter 361 (Vernon 1989).
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Because the TWC has other, more flexible, order authorities neither of these provisions is
often used.
Section 337.1 of the regulations authorizes orders to obtain compliance with any
provision of the SWDA or the Water Code. These orders frequently cite violations of
section 335.4, which requires that solid wastes be managed so as not to cause pollution or
potential pollution of the waters or groundwaters of the State. This cleanup authority is
preferred by the TWC, because it does not require proof of whether a substance is a
hazardous waste or hazardous substance, it is not dependent upon what type of facility is
cited, and it does not require the showing of an imminent or substantial endangerment
Section 8(g) (361.272) of the SWDA is, however, the primary vehicle for
enforcement orders at State "superfund" sites and at other sites where it is necessary for
the TWC to reach generators, transporters, or other potentially responsible parties (RPs)
beyond simply the site owner or operator. This provision authorizes the TWC to issue an
order:
if it appears that there is an actual or threatened release of
solid waste that presents an imminent and substantial endanger-
ment to the public health and safety or the environment: (1)
from a solid waste facility where solid waste is stored,
processed, or disposed of; or (2) at any site at which one or
more of those activities concerning solid waste have been
conducted in the past, regardless of whether such activity was
lawful at the time.
In 1989 the legislature amended the definition of solid waste to provide that for
purposes of State superfund orders the term "solid waste" "shall also include hazardous
substances." This lifted a jurisdictional impediment to some uses of superfund orders.
Section 8(g)(4) (361.276) provides for joint and several liability. However, it also allows an
RP to prove by a preponderance of the evidence that the release or threatened release is
"divisible "-viz. that the waste "has been and is capable of being managed separately under
the remedial action plan."
The 8(g) (361.272) order is issued by the TWC after a non-adjudicatory public
meeting. While an RP may submit comments or make a presentation, there is no
opportunity to present witnesses or conduct cross-examination. The order may be
challenged by an RP by filing a petition in the Travis County (Austin) District Court
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within 45 days. The filing of the petition formerly stayed the order pending decision by the
court, and the RP was only required to move the case forward within one year. In 1989,
the automatic stay provision was replaced with one that allows the TWC to take remedial
action pending the appeal, unless enjoined by the court under its general equity jurisdiction.
Although the recipient of a superfund order is responsible for bringing the case and moving
it forward, the TWC has the burden of proof. It must prove by a preponderance of the
evidence that (1) there is an actual or threatened release at the site, and (2) the petitioner
is liable for its elimination in whole or in part. For its part, the petitioner may contest the
order and may prove by a preponderance of the evidence that its liability, if any, is
divisible. Finally, "if the appropriateness of the selected remedial action is contested in the
appeal of the administrative order, the remedial action shall be upheld unless the court
determines that the remedy is arbitrary or unreasonable."
The TWC is entitled to recover its reasonable attorneys fees and costs, including
site assessment costs, if it prevails.3 However, RPs are entitled to recover their costs,
including attorneys fees, witness fees, and engineering studies, if the court finds an order
"frivolous, unreasonable, or without foundation as regarding" such party. A 1989
amendment allows the court to award the TWC up to double the costs it incurred if the RP
appeal is "frivolous, unreasonable, or without foundation." This provision does not cover
response costs, but only appeal costs; moreover, the sanction does not apply to failure to
comply with an order but only to pursuing a frivolous appeal.
The Texas Constitution entitles virtually every party to a jury trial. Thus, unlike the
Federal system and that of most States, jurors rather than judges decide the liability of
companies for environmental damage and the amount of penalties to award in penalty
cases. Review of the State superfund orders may also be before a jury.
Under a provision added in 1989, the TWC may request information and documents
concerning a site from "any person," and it may take enforcement action if the information
or documents are not produced in a timely manner.
3. Texas trial practice requires that this amount be proven during the course of the
trial itself, rather than in a separate action. This requirement may necessitate putting the
State's lawyers on the witness stand during the trial. The Attorney General has sought fees
under this procedure.
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State Registry Procedure and Site Remediation Provisions4
Prior to the 1989 amendments, section 13(g) of the SWDA specifically authorized
issuance of an order for sites placed on the State registry. The procedure for listing sites
and issuing orders was not specified, so typically the TWC listed the site and issued an
order requiring both an RI/FS and remedial action. In the 1989 amendments, however, the
legislature established a detailed procedure for placing sites on the registry and issuing
orders.
The TWC is required to publish annually an updated State registry identifying sites
that may constitute an imminent and substantial endangerment to public health and safety
or the environment due to the release or threatened release of hazardous substances. The
registry must identify the relative priority for action at each facility. The registry may not
include NPL sites. Under procedures enacted in 1989, the TWC must first determine if the
site can be handled under RCRA-type authorities or pursuant to an agreed order under
section 8(g) (361.272). If so, then notice must be published in the Texas Register that this
action is in lieu of registry listing. If not, the site is evaluated for NPL or State registry
listing. The 1989 amendments require the TWC to promulgate rules setting forth "minimum
criteria" for listing.
After scoring the site, the TWC must publish notice of intent to list, solicit public
comment, provide an opportunity to request a public meeting, and contact all known RPs.
If a public meeting is requested, the TWC must give notice at least 30 days prior to the
meeting. After the meeting or expiration of the period to request a meeting, the TWC must
file a notice in the deed records of its intention to list the site. The TWC must offer all
RPs the opportunity to conduct an RI/FS. RPs have 90 days from the date of the first
notice to make a good faith offer, and 60 additional days to negotiate an agreed order. As
an inducement, the law provides that no oversight costs may be charged to RPs who
perform the RI/FS. If there are no good faith offers, if no agreed order can be achieved,
or if the RPs fail to perform, then the TWC must conduct the RI/FS. It does not issue an
order to compel RPs to perform an RI/FS.
4. All of the requirements relating to the State registry and cleanup procedures are set
forth in section 13 of the SWDA, as amended.
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After the RI/FS, the Executive Director of the TWC selects a proposed remedial
action, publishes notice of a public meeting, and mails notice to all RPs at least 45 days
prior to the date of the meeting. The RPs have 60 days following the date of the meeting
to make a good faith offer to fund or perform the remedial action. If a good faith offer is
received, the parties have an additional 60 days to negotiate an agreed order. Again, no
oversight costs may be charged to RPs who perform under an agreed order. After
consideration of any good faith offers, the TWC issues its order, if no agreed order is
reached, listing the site on the registry, prescribing the remedial action, and identifying the
RPs. Any RP may appeal within 45 days, using the procedures applicable to 8(g) (361.272)
orders. Notice of the registry listing is filed by the TWC in deed records.
If the RPs fail to perform, the TWC may carry out the remedial action using the
Hazardous Waste Fee Fund. Where there are known RPs, the order is a prerequisite to the
expenditure of Funds on remedial actions.
The law requires "selection of the remedial alternative which the State agency
determines is cost effective (i.e. the lowest cost alternative that is technologically feasible
and reliable and which effectively mitigates and minimizes damage to and provides
adequate protection of the public health and safety or the environment)."5 The TWC is to
use applicable or relevant and appropriate standards in remedy selection, though it may
waive such standards on the same bases as provided in CERCLA Section 121(d)(4).
If a release is causing irreversible or irreparable harm and its immediacy makes it
prejudicial to the public interest to delay until the issuance of an order, the TWC may
undertake an immediate removal action with Fund monies. This action may be judicially
reviewed under a "substantial evidence" standard.6
Where Fund monies are spent, the State has a lien on the property cleaned up. In
addition, the TWC may file an action for cost recovery against RPs who fail to comply
after the completion of all remedial action. The TWC may also recover civil penalties of
5. Section 13(i), as amended.
6. Section 13(g) as amended in 1989.
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up to $10,000/day, and may recover up to double the State's costs if the court finds the
RP's defenses "unreasonable, frivolous, or without foundation."7
The statute includes provisions for mixed funding and de minimis settlements.
Spill Act
Under the Texas Water Code, persons who spill hazardous substances into the
waters of the state (including groundwater) must report the discharge and clean up the
discharge.8 The Hazardous Substances Spill Prevention and Control Act also provides for a
cleanup fund—the Spill Response Fund. The Spill Act also has a double cost recovery
provision that applies if any person fails to clean up a spill after being directed to do so
by the TWC.
IH. ORGANIZATION
The Texas Water Commission has jurisdiction over all water resources including
groundwater and has specific jurisdiction over industrial solid and hazardous waste and
municipal hazardous waste, as well as jurisdiction over the release of hazardous substances
to water or land.
The Commission consists of three members appointed by the governor for six-year
terms. Operations are overseen by an executive director, who reports to the Commissioners.
The Hazardous and Solid Waste Division within the TWC has responsibility for solid
waste, RCRA, LUST, and superfund matters. The Division has four sections. Two sections
have some responsibility for superfund-type matters.
The Contract Remedial Activities Section with 27 staff has responsibility for state
and federal superfund activities, emergency response, and LUST contracts. See Figure
TX-1.
7. Section 13(j),(m),(n), as amended.
8. Texas Water Code Section 26.121 et seq.
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FIGURE TX-1
TEXAS WATER COMMISSION
Legal
Division
Admin.
Services
Division
Hazardous
& Solid
Waste
Division
Water
Utilities
Division
to
Contract
Remedial
Activities
Section
Water
Rights and
Uses
Division
Field
Operations
Division
Field
Offices
_ Remedial Investigation Unit
Design Engineering Unit
State Superfund Unit
Emergency Response Unit
_ LUST Contracts Unit
-------
The Enforcement Section also has responsibilities related to the program. It handles
sites before they are referred to the State superfund program-attempting to secure
compliance using the TWC's order authorities, including RCRA-type authorities as well as
8(g) (361.272) orders. In addition, a Closure Unit within the Enforcement Section has
responsibility for overseeing closure of solid and hazardous waste units.
The TWC has a Legal Division with 17 lawyers. One of these is assigned to the
State superfund program. Others may handle administrative enforcement cases brought by
the Enforcement Section in the Division of Hazardous and Solid Waste. The Legal Division
provides legal counseling, contract review, and representation in administrative cases. It
does not litigate appeals or other matters in court.
All litigation is handled by the Attorney General's Office. The Environment Section
has 17 lawyers to handle a docket of approximately 500 cases. This docket includes
approximately 50 hazardous waste cases; nearly all of these were referred prior to 1985
except for the State superfund order appeals. Referrals of hazardous waste enforcement
cases other than State superfund cases have virtually ceased since the advent of
administrative penalty authority in 1985.
Several other departments and commissions have responsibilities related to hazardous
waste sites. The Department of Health is responsible for municipal waste, radioactive waste
and medical waste. The Railroad Commission has exclusive jurisdiction over wastes related
to oil and gas exploration, development, and production but not refineries or transportation
spills into the waters of the State. These agencies meet quarterly with the TWC but thus
far have referred no sites for action under State superfund.
Staff Capabilities
The TWC has taken State-lead on virtually all of the Fund-lead NPL sites and none
of the enforcement-lead sites. EPA Region 6 is handling all enforcement-lead sites. The
State-lead NPL sites are handled by the Remedial Investigation Unit, which also performs
PA/SIs, and the Design Engineering Unit in the Contract Remedial Activities Section. Most
of the State-lead NPL sites are in the remedial design, remedial action, or operation and
maintenance phases. The NPL portion of the TWC appears adequately staffed and to have
sufficient resources to carry out these tasks.
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The State "superfund" program for non-NPL sites is handled entirely by the State
Superfund Unit in the Contract Remedial Activities Section. The Unit is staffed by one
supervisor and four project managers. It is responsible for the 29 sites on the State registry
plus one additional site where an agreed order was reached prior to listing. These five staff
have exclusive responsibility for all enforcement, litigation support, RP identification,
contract drafting, contracting, oversight, public meetings, negotiation, sampling, technical
decisions, and the remaining activities at the 30 sites. Because there is no field support or
technical support, all actions, including taking the samples, must be performed by the
project managers themselves. There is no capacity to do RP searches. The Unit is seriously
understaffed for its caseload and receives no technical support from other parts of the
TWC. The Unit has high turnover—four staff departures in one and one-half years—with
most going to consulting firms. Although the Unit was budgeted to expand to nine
positions in FY 1989, the TWC did not fill these positions. The Unit is budgeted for these
same additional positions in FY 1990.
Based on our interviews with various TWC personnel, it is evident that most
managers and staff view the 1989 amendments to the SWDA as an opportunity to refer
more cases to the State Superfund Unit, particularly as a way of clearing dockets and
dealing with cases with insolvent owners/operators. There is no general recognition that the
current staffing of the Unit is insufficient to handle the entire 30-site caseload on its
current docket.
IV. FUNDING
Virtually all of the environmental protection programs of the TWC are funded by a
combination of (1) EPA grants, and (2) fees imposed on some segment of the Texas
business community. The legislature prefers to avoid appropriation of general revenues for
regulatory functions. The Texas superfund program is no exception. Funding for TWC
activities on federal NPL sites comes primarily from EPA grants, except for the 10% State
match, which comes from the Hazardous Waste Fee Fund. Funding for the State superfund
program comes entirely from the Fund.
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The TWC has substantial multisite cooperative agreements and individual
cooperative agreements with EPA because of its State-lead role on virtually all of the
Fund-lead NPL sites in Texas. In addition, it receives a CORE grant and management
assistance grants related to its oversight of work on two federal facilities and the other
sites. The entire administrative costs for the Contract Remedial Activities Section, except
for the State Superfund Unit, are covered by EPA grants.
The Hazardous Waste Disposal Fee Fund is the source of funds for the State
Superfund Unit and the 10% match on Fund-lead NPL sites. Salaries and other
administrative costs for the Unit have been paid from the Fund.
The Hazardous Waste Disposal Fee Fund, usually called "Fund 550" in TWC
parlance because of its administrative designation as one of the special funds for TWC
programs, is established by section lla (361.133) of the SWDA. It consists of fees
collected for disposal of hazardous waste on land~$10/dry weight ton. The fee is collected
quarterly on the previous quarter's disposal. It may be adjusted by the TWC to produce
sufficient revenues to meet obligations.
The balance in the Fund as of the end of FY 1989 (i.e.. August 31, 1989) is
approximately $21.7 million, of which approximately $13 million is unobligated. Annual
revenues to the Fund from the disposal fees are recorded (and projected) in Table TX-1.
TABLE TX-1
Fund 550 Revenues from Disposal Fees
FY 1987
FY 1988
FY 1989
FY 1990
FY 1991
$5.5m
7.9m
7.5m
7.5m
7.0m
In addition to disposal fees, the Fund may receive interest on late fee payments at the rate
of 15%, penalties for failure to pay fees, and any cost recoveries. In 1989, amendments to
the SWDA provided two new sources of revenue. First, beginning September 1, 1989, the
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Fund will retain interest earned on the Fund balance.9 Retained interest is projected to
generate approximately $1.8 million in FY 1990, and $1.0 million in FY 1991 (as the Fund
begins to be expended). No projections have been made for subsequent years. Second, the
legislature enacted a new fee on "commercial" hazardous waste storage, processing, and
disposal facilities. The fee does not apply to "captive" facilities unless the hazardous waste
is handled for a fee and is shipped from offsite. The new commercial hazardous waste fee
is not to exceed $20/ton if landfilled; however, a higher amount may be assessed against
waste originating out of State based on certain listed factors. The new fee is expected to
generate approximately $2.0 million/year, half of which is allocated to the Fund.10
In summary, the Fund will receive annual revenues of approximately $9.0 million/
year. State CERCLA match requirements are projected at approximately $5 million/year
through 1994. Some fairly expensive remedies are projected down the road, and O & M
costs will be high at a few NPL sites. Costs for State registry sites are not yet projected.
Remedial action costs at several of these sites may far exceed the Fund balance, however.11
Drawdown of substantial monies for State registry sites over the short term is unlikely
because of (1) insufficient staffing to handle all of the sites currently on the registry, (2) a
primary focus on sites with RPs, (3) the need to do RI/FSs on the Fund-financed sites,
none of which have commenced yet. In FY 1989 the State Superfund Unit spent only
$140,000 of Fund monies; only $798,000 is budgeted for State registry sites for FY 1990.
Over the short term, the Fund will be able to meet its obligations. Over the long term, it is
questionable, in part because all three of the revenue sources (the disposal fee, the
commercial fee, and interest on the Fund balance) are going to decline over time. While
the TWC may adjust the fees to meet obligations, it is not clear if this will be possible if
the purpose is to do remediation at a few costly State sites.
9. Acts 1989, Ch. 703, Sec. 4, p. 3218.
10. SWDA Section 12(e),(f) as added by Acts 1989, 71st Leg., Ch. 1144, Sec. 4, p.
4727.
11. E.g.. the Gulf Metals site, which has an insolvent owner and no other identified
RPs, may cost $69 million to remedy based on preliminary assessments.
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The effect of cost recovery is unknown. On the NPL side, the State is only doing
Fund-lead sites. The potential for recovery has not been assessed, and the federal govern-
ment is likely to take lead. On the State registry side, the 1989 amendments provide that
no oversight costs may be recovered from RPs who agree to do RI/FSs or remedial
actions. Thus, cost recovery is likely only if there is a recalcitrant RP. The TWC did
receive $19,000 in cost recovery funds when it turned over the Rio Grande site from the
State registry to the EPA for enforcement after the site scored enough for NPL listing.
The Spill Response Fund is used for emergency responses where discharge to the
waters of the State can be shown. In 1989, the Spill Fund was extended to cover spills
"having a potentially harmful effect on waters in this state."12 The Spill Fund may only be
used when the discharger and the federal government both decline to expend money to
clean up the discharge. The Fund was established with an initial authorization of $1
million, but the actual monies available for expenditure must be appropriated year-by-year--
usually $200,000-300,000. Actual expenditures from the Spill Fund are lower than these
appropriated amounts, averaging about $100,000 annually. The Spill Response Fund had a
balance of $628,000 at the end of FY 1988 and $557,000 at the end of FY 1989. The
legislation allows the Spill Response Fund to be replenished from penalties for failure to
report spills or to clean up spills, but because the law also prohibits use of the fund for
administrative expenses, there was never an effort to assess or collect penalties. The law
also provides for recovery of double the response costs incurred by the TWC if a party
fails to clean up a spill when directed to do so. No such double recoveries have occurred.
A cap of $5 million on the recovery of costs from any party was removed by amendment
in 1989. The Spill Fund itself has an absolute $5 million cap, which is unlikely to be
approached given the limited ways of replenishing the fund, and its current balance.
12. Texas Water Code Section 26.266(c), as amended by S.B. 1222, Acts of the 71st
Legislature, Regular Session (1989).
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V. REMEDIATION PROCESS
NPL Sites
Texas took State lead on 15 of 16 Fund-lead NPL sites in the State. Virtually all of
these are now in the remedial design, remedial action, or operations and maintenance
phase. Remedial construction is complete at four sites. Figures TX-2 and TX-3 show the
locations of Texas NPL sites.
State Registry Sites
In 1987, the TWC placed ten (10) sites on the State registry, and issued section
8(g) orders to RPs at seven of the sites. Of the other three sites, one negotiated a removal
action (and was later placed on the NPL) and two involved private individuals with
minimal assets and unknown RPs. The seven (7) orders all directed the RPs to conduct an
RI/FS and to submit and carry out remedial action plans. The RPs at two sites negotiated
agreed orders-one for the entire process, one for just the RI/FS. The RP at one site simply
ignored the order. The RPs at the four remaining sites all filed appeals in court-auto-
matically staying the orders. It became clear that the process could be stalled out simply by
filing an appeal.
It also became apparent that because there had been no detailed process for listing
the sites-the Commission had simply given notice to RPs, held a public meeting, and
issued the orders-the trial record would be somewhat thin, thus jeopardizing the potential
validity of the orders. This was of concern not only because of the prospect of losing the
cases and having no RPs to look to for remediation, but also because of the possibility that
the State might have to pay the fees and expenses of the RPs if any of them prevailed.13
This was no idle concern; the evidence Unking at least one RP to one site was extremely
tenuous at the time the order was issued. The State subsequently dismissed the order issued
to that RP, but only after securing the agreement of the RP to waive all claims against the
13. Under the 1989 amendments, the order is not issued until after the RI/FS has been
completed. This reduces the possibility of an order based on insufficient evidence, and
hence reduces the State's exposure to liability to PRPs.
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FIGURE TX-2
TEXAS NATIONAL PRIORITY LIST (NPL) SITE MAP
I k18 i i. '' i --'"^ W-<:™ -^
-••T\is^-^»]<"™""?*i;ii"!i:ii"<;"iiil>1'" ViS£i-}iiiSl-r'~< V ,.----
1. Air Force Plant #4/Gen8ral Dynamics (Tarrant Co.)
2. Bailey Waste Disposal (Orange Co.)
3.. Bio-Ecology (Dallas Co.)
4. Brio Refining, Inc. (Harris Co.)
5. Crystal Chemical Co. (Harris Co.)
6. Crystal City Airport (Zavala Co.)
7. Dixie Oil Processors (Harris Co.)
a. French Limited (Harris Co.)
9. Geneva Industries (Harris Co.)
10. Harris (Parley Street) (Harris Co.HDelisted)
11. Highlands Acid Pits (Harris Co.)
12. Industrial Transformers (Harris Co.)
13. Koppers Co., Inc., (Bowie Co.)
14. Lone Star Army Ammunition Plant (Bowie Co.)
15. Molco, Inc. (Texas City Wye) (Gatveslon Co.)
16. North Cavalcade Street (Harris Co.)
17. Odessa Chromium I (Ector Co.)
18. Odessa Chromium II (Ector Co.)
19. Pesses Chemical (Tarrant Co.)
20. Petro-Chemlcal Systems. Inc. (Turtle Bayou) (Liberty Co.)
21. Rio Grande Oil Company Refinery (Hardin Co.)
22. San Jacinto Pits (Pig Road) (San Jacinto Co.HDelisted)
23. Sheridan Disposal Service (Waller Co.)
24. Sfres Disposal Pits (Harris Co.)
25. South Cavalcade Street (Harris Co.)
26. Stewco, Inc. (Harrison Co.)
27. Texarkana Wood Preserving (Bowie Co.)
28. Tex-Tin Corporation (Galveston Co.)
29. Triangle Chemical Co. (Orange Co.)
30. United Croosoting Co. (Montgomery Co.)
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FIGURE TX-3
HOUSTON AREA NPL SITE MAP
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State.14 The fees and expenses provision has been used against the State in non-superfund
enforcement cases. For example, in 1987 a judge in East Texas dismissed a TWC
enforcement suit against a wood treating operation and assessed $155,000 against the State.
The dismissal and award were later reversed on appeal.15
The original 8(g) orders had been issued without a thorough search for other RPs;
thus the Attorney General's office had to include additional RPs as they were discovered.
None of the cases had been tried as of August 1989 when this research was conducted.
The TWC was actively engaged in additional sampling and investigation of the sites in an
attempt to prepare for trial.
Because of the problems occasioned by RP appeals, the TWC adopted a different
approach for the 17 sites added to the registry in 1988 and the one site added in 1989.16
Instead of simply listing the sites and issuing orders, the TWC invited the known RPs to
come in for informational meetings, and offered them the opportunity to do voluntary
RI/FSs. The RPs at six of the sites are performing RI/FSs under this arrangement. The
remainder are still negotiating, are insolvent, are not being dealt with due to lack of staff,
or have not been located. One mercury reclaiming site was issued an 8(g) order after the
operator declared bankruptcy.
During the summer of 1989, the State Superfund Unit prepared contracts for Fund
550 actions at four (4) State registry sites. Two of these are sites listed in 1987 where the
landowners are impecunious individuals and the RPs are unknown. Another is a battery
breaker site listed in 1987 that ignored an 8(g) order; and one is the bankrupt mercury
reclaiming operation. Contracts awaiting approval are for RIs at these sites.
14. Lambda Electronics Power Supplies v. Texas Water Commission, (Dist. Ct. Travis
Cty., October 17, 1988). Also Hoechst Celanese Chemical Group, Inc., v. Texas Water
Commission, No. 438,316 (201st Dist. Ct. Travis Cty., October 4, 1988).
15. State v. Hart, 753 SW 2d 213 (Tex. App. Beaumont, 1988).
16. The total complement of 29 sites (Figure TX-4) is accounted for by the fact that
one of the initial ten sites was split into two in the subsequent registry updates.
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FIGURE TX-4
1989
Final State
Superfund Registry
The following list constitutes the 1987, 1988 Registry sites including
the additional site (International Creosoting) added in the 1989
Registry. The sites are listed in relative priority of need for cleanup
as they appear on the 1989 Registry.
1. Houston Scrap, Houston, Harris County
2. Rio Grande Refinery I, Sour Lake, Hardin County
3. Rio Grande Refinery II, Sour Lake, Hardin County
4. Houston Lead, Houston, Harris County
5. State Marine, Port Arthur, Jefferson County
6. Precision Machine, Odessa, Ector County
7. Sonics International, Ranger, Eastland County
8. Maintech International, Port Arthur, Jefferson County
9. Federated Metals, Houston, Harris County
10. Gulf Metals, Houston, Harris County
11. Wortham Lead Salvage, Eustace, Henderson County
12. Texas American Oil, Midlothian, Ellis County
13. Niagara Chemical, Harlingen, Cameron County
14. International Creosoting, Beaumont, Jefferson County
15. McBay Oil and Gas, Gropeland, Houston County
16. Aztec Mercury, Alvin, Brazoria County
17. Solvent Recovery Services, Arcola, Fort Bend County
18. Harris Sand Pits, Von Ormy, Bexor County
19. Butler Ranch, Karnes County
20. Pip Minerals, Liberty, Liberty County
21. Hoyes-Sommons Warehouse, Mission, Hidalgo County
22. Baldwin Waste Oil, Robitown, Nueces County
23. Waste Oil Tank, Houston, Harris County
24. Hall Street, Dickinson, Galveston County
25. Unnamed Plating Site, El Paso, El Paso County
26. La Pata Oil, Houston, Harris County
27. Munoz Borrow Pits, Mission, Hidalgo County
28. South Texas Solvents, Banquete, Nueces County
29. Bestplate, Hutchins, Dallas County
STATE OF TEXAS
HARRIS
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The TWC is experiencing substantial delays in contracting for Fund 550 action on
State registry sites, primarily because of internal review requirements, and the fact thatState
registry sites have a much lower administrative priority than contracts for NPL work,
because of the need to satisfy EPA and keep the Federal funds flowing.
Other State Sites
A number of sites have been handled by portions of the TWC other than the State
Superfund Unit. These have been addressed by the Enforcement Section under 8(g) orders.
The Century Forest site involved a former wood preserver cited for RCRA violations and
ordered to close. The wood preserver failed to comply, but the lessor of the land~the
Angelina and Neches River Railroad--agreed to a closure plan under an 8(g) order in 1987.
Similarly, in December 1988, the TWC issued an 8(g) order to five RPs for cleanup
activities at a chemical plant site that had been closed in the mid-1970s but redisturbed by
subsequent activities. It is possible that such orders will continue to be used in the future
without the formal listing process set out in the new amendments. Indeed, section 13 seems
to contemplate the opportunity for RPs to agree to actions under 8(g) (361.272) to forestall
listing. What remains uncertain is whether unilateral 8(g) orders will continue to be issued
independent of the detailed superfund process.
Implications of New Superfund Process Under 1989 Amendments
It is evident that the 1989 amendments were meant to codify what was already
beginning to happen, as well as to avoid some of the pitfalls encountered with the first
round of listed sites. First, the amendments were aimed at allowing RPs to avoid listing
and the "superfund" process entirely by agreeing to 8(g) (361.272) orders. Second, the
amendments provide that even if the process is initiated, RPs must have the opportunity to
perform the RI/FS without having to agree to liability for remediation (essentially what
happened to the 1988-listed sites). Third, the prospect of appeals stalling out the process is
avoided by eliminating the order to do an Rl/FS; if the RPs decline to volunteer, the TWC
must perform the RI/FS itself. Fourth, the listing comes much later in the process-after
remedy selection; this provides a better record in the event of an appeal. Fifth, the process
builds in a significant number of opportunities for public and RP participation.
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Despite these changes, it is not clear that the program has been improved in
significant ways.
TWC staff assert that RPs are more likely to perform an RI/FS if not under the
coercion of an order. The issue, however, will be what sort of RI/FS they will agree to. If
they know that the alternative is a State-funded RI/FS and contracting remains slow (or
budget allocations of the Fund to the State Superfund Unit remain limited) RPs may have
a strong bargaining position. It is true, however, that appeals at the RI/FS stage have been
eliminated by doing away with the order at this stage.17
The TWC staff also assert that there are strong incentives not to appeal remedial
action orders under the new system. They cite (1) the fact that oversight costs are assessed
against nonsettling RPs but not against settling RPs, (2) the availability of double costs for
frivolous appeals, and (3) the availability of administrative penalties for violation of an
order. However, the oversight costs are essentially trivial, based on current experience with
the existing State registry sites where RI/FSs are underway. Thus, this is an insignificant
incentive. Also, an award of double costs is available only if an RP's appeal is "frivolous,
unreasonable, or without foundation." Because any party may assert "divisibility" of the
liability on appeal, virtually no appeals will fall into these categories. Finally, if a party
appeals, it is not in violation of the order-penalties are assessable only from the point at
which an order becomes unappealable. Thus, there are few incentives not to appeal a
remedial action order.
Even the double damages available for noncompliance with a remedial action order
are unlikely to provide an incentive not to appeal. They may be awarded only if the court
determines in a cost recovery action that the failure to comply with the order was
"unreasonable, frivolous, or without foundation." It is unlikely that a Texas court will hold
that the filing of an appeal authorized by statute meets this standard-particularly if the
appeal itself is based on a non-frivolous ground such as seeking to establish divisibility and
to apportion liability among RPs. Moreover, the double damages provision does not even
apply unless and until the State actually gives up waiting for the outcome of an appeal,
17. If the RPs hold out for a weak or inexpensive RI/FS, the TWC may be placed in a
dilemma. If it performs the RI/FS, the RPs will want to escape liability for the expense of
the RI/FS, and will seek such a provision in later negotiations over the RD/RA.
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takes the remedial action itself, and sues for cost recovery—an approach that is disfavored
because of the preference for conserving the Fund.18
Also, it appears that the TWC has no ability simply to elect to perform remedial
actions without first issuing an order where there are viable RPs. This apparent limitation,
in effect, invites appeals. It makes the Texas program unlike some other State superfund
programs that allow the State to do Fund-lead actions in lieu of an order and thereby place
RPs on the horns of a dilemma—viz, whether to agree to a remedial action, or to accept the
risk of paying for the State's remedial action after the fact.
The core weakness in the Texas statute remains the availability of pre-enforcement
review by appeal of any remedial action order. The incentive will always be to appeal,
unless the RP can get a "good deal" from the State. This incentive is strengthened by the
fact that the State is itself subject to costs and expenses if it loses. None of this is to
suggest that there will be great numbers of appeals. In all likelihood, settlements will
occur; but the statute gives a substantial amount of leverage to the RPs in settlement
discussions, notwithstanding the 1989 amendments.
Undoubtedly the time periods for "good-faith offers" built into the 1989 amendments
were designed to foster settlement and expedient action. However, the viability of the
State's leverage is most dependent upon its ability to spend Fund monies quickly if the RPs
elect not to cooperate. The State's capacity to do so remains uncertain at this time, not
only because of the legal constraints discussed above, but also until (1) staffing is
increased, and (2) State superfund achieves a higher priority within the TWC. Under the
statutory timetables, 150 days are specified for RI/FS negotiations, and 165 days for
RD/RA negotiations (including meeting notice requirements), with periods in between for
performance of actions (such as the RI/FS and selection of remedy) and issuance of deter-
minations thereafter. Contracting for State-funded actions will require additional time over
18. Such a Fund-lead approach may also be impeded by Section 13(g)(l), which
authorizes State-funded removals pending an appeal, but which does not address remedial
actions at that time. The high threshold standards—"immediacy" and "irreversibility"--
required even to conduct a removal pending appeal will provide ammunition to RPs
wishing to argue that the State may not conduct Fund-lead remedial actions during an
appeal.
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and above this. The ability of the State to act quickly will influence the quality of
settlements it may obtain.
Public Participation
There was little formal public participation under the initial version of the State
superfund program. Essentially the only opportunity for participation was the public
meeting at which the TWC considered the executive director's petition to list a site or sites
on the registry and issue an order. The bulk of the participation has been by the RPs.
Under the 1989 amendments, there are significant opportunities for public input, and
requirements that notices of opportunities to comment and to request public meetings be
published in newspapers as well as in the Texas Bulletin. The public participation
requirements of the law appear to be as complete, if not more so, than CERCLA, with the
possible exception of health and risk data communication, which is not specifically
provided for.
Cleanup Standards
State superfund has not yet developed State cleanup standards, but is likely to apply
the same standards applied to NPL sites, most of which are in the remediation phase. The
Contract Remedial Section reports concurrence with EPA on all of the remedies selected
for NPL sites in Texas thus far. The State applies water quality standards (where it
reports it has nothing more stringent than MCLs), and air quality criteria. Under most State
RCRA cleanups and closures, the TWC has insisted on cleanup to background or MCLs,
whichever is less stringent. The TWC has taken the position in the past that groundwater
must be protected for future uses as well as existing uses; however, it has also accepted
EPA groundwater remedies at NPL sites that make use of classification schemes based on
use. The TWC expects to use risk assessments where there are no other standards
available.
Emergency Response
The TWC operates an emergency response program, which is housed in the Contract
Remedial Activities Section. It has a staff of four. In FY 1988 it received 1800 calls.
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Under the State's detailed contingency plan, handlers of oil and hazardous substances are
encouraged to notify directly the local office and/or agency (e.g.. Railroad Commission for
oil and gas production spills) with jurisdiction over the event. There are about 120-160
responses per month required; most of these are handled by the reporting entity. The State's
Spill Response Fund is used only about once per month on average. The State will not use
the Spill Fund unless it gets a refusal from the RP, local government, and EPA to conduct
the cleanup. The State has contractors on board for immediate response; the staff needs
only to prepare a justification document and get signoff. The Hazardous and Solid Waste
Division Director may authorize expenditures up to $25,000; higher amounts must be
authorized by the TWC Executive Director.
The Emergency Response Unit maintains a computer database of response
contractors to provide assistance to RPs seeking contractors. It also has a database of
chemicals and their handling requirements.
VI. PROGRAM OUTLOOK
The Texas program for non-NPL sites is addressing a very limited number of the
hazardous sites in Texas at which cleanup may be required. Its staff size and staff retention
will need to be improved if Texas is to deal effectively even with the 29 sites currently on
the State registry. Absent assistance in this area, the non-NPL program may not accomplish
its objectives.
Fund 550 was strengthened by the 1989 amendments. Nevertheless, it may not be
sufficient to clean up orphan sites on the State registry if all CERCLA match obligations
are met. Additional revenues will be needed if the State registry is increased.
The new procedures to encourage settlement will probably result in a greater
number of settlements than under the law prior to the 1989 amendments. This does not
necessarily mean that better results will be obtained. For example, under the 1989
amendments, if RPs decline to perform the RI/FS, the State must do so; the State can no
longer unilaterally order the performance of an RI/FS. However, there are no punitive
damages or penalties associated with this choice by the RPs. This may place substantial
bargaining power in the hands of RPs. Likewise, at the remedial action phase, RPs still
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retain the leverage of threatening to appeal remedial action orders to court. This will affect
the relative bargaining position of the State and may influence the negotiated remedy.
Finally, it is likely that many more than 29 sites will require State attention under
superfund authorities over the long term. Adequate site discovery and evaluation efforts,
and an expanded State superfund staff will be necessary to keep pace with the likely need.
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