CERCLA ENFORCEMENT POLICY COMPENDIUM UPDATE

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           United States     Office of Solid Waste
           Environmental Protection and Emergency Response
           Agency       Office of Waste Programs (OS-510)
v>EPA      CERCLA Enforcement
            Policy Compendium
            Volume

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             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                         JAN  13
MEMORANDUM

SUBJECT:  Revised CERCLA  Policy  Compendi
FROM:     Bruce M. Diamond,  Director^
          Office  of Waste  Programs Enforcement

          Glenn L. Unterberger^Zg^ ^ U~3J*~*~
          Associate Enforcement  Counsel  for -tfaste
          Office  of Enforcement  and  Compliance Monitoring

TO:       Addressees

    Attached is the revised  CERCLA Enforcement Policy
Compendium.  This docuaent was originally circulated
in February 1984  and  revised in  May  1985 and August 1986.  It
has now been revised  to  include  additional significant policies
published since that  date.   Also attached is a list of
Procedures, Manuals,  Federal Register publications and other
items that are of interest for CERCLA Enforcement.  These are
not included in the current  Compendium,  in order to keep it
down to manageable size.

    Because the Compendium will  be updated periodically, we
welcome comments  on it or  on policy  issues that might be
addressed in the  future.   Questions  or comments on the contents
of this compendium may be  addressed  to Carrie  Capuco, Office of
Waste Programs Enforcement at FTS-382-7739  (OS-S10).

Attachment

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Addressees:
    Directors, Waste Management Division,
    Regions I, IV, V, VII, VIII
    Director, Emergency and Remedial Response Division,
    Region II
    Director, Hazardous Waste Management Division,
    Regions III, VI
    Director, Toxic and Waste Management Division,
    Region IX
    Director, Hazardous Waste Division,
    Region X
    Regional Counsels, Regions I-X

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                UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
| ^iTZ »                   WASHINGTON, D.C. 20460

 "t>.
                             MAR 2 4 1989                      :« :=
                                                    SOLO .'.iS'E AND =•.'•
 MEMORANDUM

 SUBJECT:   Updates  for the Enforcement Policy Compendium

 FROM:      John cross, Chief
           Guidance and Oversight Branch
           Office of Waste Programs Enforcement

 TO:        Addressees

      Please find enclosed the most recent updated material for
 the  Enforcement Policy Compendium.

 Title                                    Date      QSWER Dir.  No.

 Guidance  on CERCLA Section 106          2/24/89   9835.7
 Judical Actions
 (Reich/Porter)

 Interim Guidance on Administrative      3/1/89    9833.3A
 Records for Selection of CERCLA
 Reponse Actions  (Porter)

      If you have any questions contact Gloria Bobo on my staff at
 (FTS)  475-6770.

 Addressees:

 Regional  Counsels,  Regions I-X
 CERCLA Enforcement Branch Chiefs, Regions I-X
 CERCLA Enforcement Section Chiefs, Regions I-X
 Director,  Waste Management Division,
   Regions I, IV, V, VII, VIII
 Director,  Emergency and Remedial Response Division, Region II
 Director,  Hazardous Waste Management Division, Regions III, VI
 Director,  Toxic and Waste Management Division, Region IX
 Director,  Hazardous Waste Division, Region X

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                      CERCIA ENFORCEMENT POLICY COMPENDIUM
                                CHRONOLOGICAL LIST
    Policy                                      Date

1.  Cost Recovery Referrals                     8/3/83
     (Sniff)

2.  Cost Recovery Actions Under CERCIA          8/26/83
     (Price/Thomas)

3.  Coordination of EPA and State               8/29/83
    Actions in Cost Recovery Negotiations
    and Litigation (Prioe/lhaias)

4.  Guidance on the Use and Issuance            9/8/83
    of Administrative Orders Under
    Section 106 [being updated]
    (Price/Thomas)

5.  Releasing Identities of Potentially         1/26/84
    Responsible Parties in Response
    Of POIA Requests (Luoero/Snif f)

6.  Issuance of Administrative Orders           2/21/84
    for Immediate Removal Actions
    (Thomas)

7.  Guidance Regarding CERCIA                   5/24/84
    Enforcement Against Bankrupt Parties
    (Price)

8.  Liability of Corporate Shareholders and     6/13/84
    Successor Corporations for Abandoned Sites
    under CERCIA (Price)
9.  EPA -  State Relationship in
    Enforcement Actions for Sites
    on the NPL (Thorns)

10. Interim CERCIA Settlement Policy
    (ThCDas/Price/Habicht} 50 FR 5034
    February 5, 1985

11. Guidance on Drafting Consent
    Decrees in Hazardous Waste
    Cases (Price/McGraw)
10/2/84
12/5/84
5/V85
              OSWER Dir.  No.

              9832.0



              9832.1



              9832.2




              9833.0
              9834.0
              9833.1
              9832.7
              9832.10
9831.3
9835.0
9835.2

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   Policy
12. Snail Cost Recovery Referrals
     (Stiehl/Inopro)

13. Preparation of Hazardous Waste
    Referrals  (Stiehl)

14. Timely Initiation of Responsible
    Party Searches, Issuance of
    Notice Letters, and Release of
    Information (Lucero)

15. Procedural Guidance on Treatment
    of Insurers under CERCLA (Price)

16. Endangerment Assessment Guidance
    (Porter)

17. Policy for Enforcement Actions
    Against Transporters Under CERCLA
    (Lucero/Stiehl)

18. Reporting and Exchange of
    Information on State Enf or
    Actions at National Priorities Sites
    (Porter)

19. Revised Hazardous Waste Bankruptcy
    Guidance  (Mays)

20. Policy on Recovering Indirect Costs
    in CERCLA Section 107 Cost Recovery
    Actions (Stiehl/Stanton)

21. Interim Guidance:  Streamlining
    the CERCLA Settlement Decision
    Process (Porter/Adams)

22. Interim Guidelines on Preparing
    Nonbinding Preliminary
    Allocations of Responsibility
    (Thomas) 52 FR 19919 May 28, 1987

23. Administrative Records for
    Decisions on Selection of CERCLA
    Response Actions (Lucero/Longest)
Date


7/12/85


7/30/85


10/9/85
3/14/86
 5/23/86
2/12/87
 5/16/87
5/29/87
QSWERDir.  No.
9832.6
9837.1
9834.2
11/21/85      9834.5
11/22/85      9850.0-1
12/23/85      9829.0
9831.2
9832.8
 6/27/86      9832.5
9835.4
9839.1
 9833.3

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    Policy
24. Entry and Continued Access Under
    CERdA  (Adams)

25. Cost Recovery Actions/Statute
    of Limitations  (Lucero)

26. Consent Orders  and the Reimburse-
    ment Provision  Under Section 106(b)
    of CERdA (Lucero/Leifer)

27. Interim Guidance on Settlements
    with Qs fllini^i? Waste Contributors
    (Adams/Porter)  52 FR 24333
    June 30, 1987

28. Covenants Not to Sue Under SARA
    (Adams/Porter/Habicht) 52 FR
    28038 July 27,  1987

29. Interim Guidance on Use of
    Administrative  Penalty Provisions
    Under Sections  109 and 325 (Adams)

30. Scope of the CERdA Petroleum
    Exclusion Under Sections 101(14)
    and 104(a)(2) (Blake)

31. Guidance on the Use of Stipulated
    Penalties in Hazardous Waste Consent
    Decrees (Adams)

32. Guidance on Federal Superfund
    Liens (Adams)

33. EPA Interim Guidance on Indemni-
    fication of Super'gut id Response Action
    Contractors  (Porter/Kinghorn)

34. Interim Model CERdA Sec. 122 (g) (4)
               Waste Contributor
    Consent Decree and Administrative
    Order Guidance (Reich/Lucero)
    52 FR 43393 November 12, 1987

35. Interim Guidance on Notice Letters
    Negotiations, and Information
    Exchange (Porter) 53 FR 5298
    February 23, 1988
Date


6/5/87


6/12/87



6/12/87




6/19/87





7/10/87




7/16/87




7/31/87




9/21/87




9/22/87


10/6/87




10/19/87
                                                              05WER Dir. No.


                                                              9829.2


                                                              9832.9


                                                              9833.2




                                                              9834.7





                                                              9834.8




                                                              9841.1




                                                              9838.1




                                                              9835.2b




                                                              9832.12


                                                              9835.5




                                                              9834.7-1A
                                                10/19/87
              9834.10

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    Policy

36. Evaluating Mixed Funding Settle-
    ments (Porter/Adans) 53 FR 8279
    March 14, 1988

37.,Revised Procedures for Inpleraenting
    Off-site Response Actions
    (Porter)

38. Expansion of Direct Referral of
    Casf*s to the Department of
    Justice (Adams)

39. Interim Final Guidance Package
    on Funding CEHCLA State Enforcement
    Actions at NPL Sites (Porter)

40. Interim Guidance on Potentially
    Responsible Parties Participation
    in Remedial Investigations and
    Feasibility Studies (Porter) [Revised]

41. Interin Policy on Mixed Funding
    Settlements Involving the Pre Autho-
    rization of States or Political
    Subdivisions. (Porter/Adams)

42. Supporting State Attorneys General
    CERCLA Remedial and Enforcement
    Response Activities at NPL Sites
    (Longest/Cannon)

43. Guidance on Documenting Decisions not
    to Take Cost Recovery Actions  (Cannon)

44. Reporting Exemptions for Federally
    Permitted Releases of Hazardous
    Substances (Ihonas) 53 FR 27268
    July 19, 1988

45. Super fund Cost Recovery Strategy
    (Portar)

46. Catalog of Superfund Program
    Directives — Interim Edition
                                                Date          OSWER Dir.  No.

                                                10/20/87      9834.9
47. Guidance on Use and Enf or
    of CERCIA Information Requests
    and Administrative Subpoenas
    (Adams)
                                                11/13/87
                                                1/14/88
                                                4/7/88
                                                5/16/88
                                                5/27/88
                                                6/21/88
                                                6/7/88
                                                7/11/88
                                                7/29/88
                                                  7/88
8/25/88
              9834.11
             9891.5A
              9831.6a-6d
              9835.la
              9834.9a
              9831.7
              9832.11
              exesapt
              9832.13
              9200.7-01
                                                               9834.4-A

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    Policy
                                                Date
              QSWER Dir. No.
48. Waiver of Headquarters Approval
    for Issuance of RD/RA Special
    Notice Letters at the Time of
    ROD Signature  (Longest and Diamond)

49. Counting State-lead Enforcement
    NPL Sites Toward the CERCLA
    Section 116 (e) RffnpriiaH Action
    Start Mandate  (Porter)

50. Community Relations during
    Enforcement Activities and
    Development of the Administrative
    Record (Porter)

51. Guidance on Premium Payments in
    CERCLA Settlements (Adams and Porter)

52. Initiation of FRP-finanosd Remedial
    Design in Advance of Consent
    Decree Entry (Adams and Porter)
                                                9/26/88
              9834.10-la
10/21/88      9831.8
53. Interim Strategy for Enforcement
    of Title III and CEROA §103
    Notification Requirements

54. CERCLA Enforcement Delegations
                                                11/3/88
                                                11/17 /88
                                                11/18/88
                                                12/14/88
              9836. 0-1A
              9835.6
              9835. 4-2A
              9841.0
Executive Order 12316:  Responses to
Environmental Damage  (46 FR 42237)

Guidelines for Using the Imminent
Hazard. Enforcement and Eoergency
Response Authorities of Super fund
and Other Environmental Statutes
(47 TO 20664)

Request for Public Cccnent on
Interim CERCLA Settlement Policy
(50 TO 5034)

Notification Requirements; Reportable
Quantities Adjustments  (50 re 13456)

National oil and Hazardous Substance
Pollution Contingency Plan:  Final Rule
(40 ere Part 300)
8/14/81


5/13/82
2/5/85



4/4/85


11/20/85

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           Manual
Procedures for Identifying                      2/82
Responsible Parties:  Uncontrolled
Hazardous Waste Sites - Superfund
(National Enforcement Investigation Center)

RCRft/CERCLA Case Management Handbook            8/84

Procedures for Documenting Cost for             1/35
CERCLA Section 107 Actions
(OWPE)
9834.3





9837.0

9832.4
          ted QJdano?
 Interim Guidance on Conpliance
 with Applicable or Relevant and
 Appropriate Requirements

 Rl/'FS Improvement

 Additional Interim Guidance for
 FY 87' Records  of Decision

 Final Guidance  on Use of Alternative
 Dispute- Resolution Techniques
 in Enforcement  Actions

 PPP Search Manual,

 OSWER Strategy  for Management
 Oversight of the CERCLA  Remedial
Action Start Mandate
                                                DATE

                                                7/9/87




                                                7/23/87

                                                7/24/87



                                                8/14/87




                                                8/27/87

                                                12/28/87
OSWER DIR.No.

9234.0-05




9355.0-20

9355.0-21



9834.12




9834.3-1A

9355.0-24

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                 CERCLA ENFORCEMENT  POLICY  COMPENDIUM
                                TOPICAL LIST
    Policy
              Date
                                                            OSWER Dir. No.
I.  PRP Search

    A.  Timing and procedures

    Interim Guidance:  Streamlining
    the CERCLA Sett-lament Decision
    Process (Porter/Adams)

    Potentially Responsible
    Party Search Manual (Lucero)

    B.  PEP  Search Management

    Releasing Identities of Potentially
    Responsible Parties in Response
    Of  FOIA Requests (Lucero/Sniff)

    Timely  Initiation of Responsible
    Party Searches,  Issuance of
    Notice  Letters,  and Release of
    Information (Luoero)

    C.  Information Requests
   Guidance on Use  and Enf 01
nt
    of CERCLA Information Requests
    and Administrative Subpoenas
    (Adams)

II. Negotiations,  Settlements, and Oversight

    A. General and Special Notice

    Interim Guidance on Notice Letters
    Negotiations,  and Information
    Exchange (Porter-) 53 FR 5298
    February 23,  1988

    Waiver of Headquarters Approval
    for Issuance  of PD/RA Special
    Notice Letters at the Tine of
    ROD Signature (Longest and Diamond)
              2/12/87
              8/27/87
              1/26/84
              10/9/85
                                               8/25/88
                                               10/19/87
                                               9/26/88
                                                            9835.4
                                                             9834.3-1A
                                                             9834.0
                                                             9834.2
9834.4-A
                            9834.10
                            9834.10-la

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Policy
                          Date
OSWER Dir.  No.
B. RI/FS Issues

Interim Guidance on Potentially
Responsible Parties Participation
in Remedial Investigations and
Feasibility Studies  (Porter)  [Revised]

C. Settlement Policy

Interim CERCLA Settlement Policy
(Thonas/Price/Habicht) 50 FR  5034
February 5, 1985

Guidance on Premium Payments  in
CERCLA Settlements  (Adams and Porter)

Initiation of PRF-financed Remedial
Design in Admance of Consent
Decree Entry (Adams and Porter)

D. Liability

Liability of Corporate Shareholders and
Successor Corporations for Abandoned Sites
Under CERCLA (Price)

Policy for Enforcement Actions
Against Transporters Under CERCLA
(Lucero/Stiehl)

Scope of the CERCLA Petroleum
Exclusion Under Sections 101(14)
and 104(a)(2)  (Blake)
E. Consent
Procedures
Guidance on Drafting Consent
        in H*y*"nry«>Q waste
       (Price/MoGraw)
Guidance on the Use of Stipulated
Penalties in Hazardous Waste Consent
Decrees  (Adams)

Covenants Not to Sue Under SARA
(Adams/Porter/Habicht) 52  FR
28038 July 27, 1987
                          5/16/88
                          12/5/84




                          11/17/88


                          11/18/88
                          6/13/84
                          12/23/85
                          7/31/87
                          5/V85
                          9/21/87
                          7/10/87
9835.la
9835.0
9835.6
9835.4-2A
9832.10
9829.0
9838.1
9835.2
 9835.2b
 9834.8

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    Policy

    F. Mixed Funding

    Evaluating Mixed Funding Settle-
    ments (Porter/Adams) 53 FR 8279
    March 14, 1988

    Interim Policy on Mixed Funding
    Settlements Involving the Pre Autho-
    rization of States or Political
    Subdivisions. (Porter/Adams)
    G.
    Interim Guidance on Settlements
    with Dj minimis Waste Contributors
    (Adams/Porter) 52 FR 24333
    June 30, 1987

    Interim Model CERCLA Sec. 122 (g) (4)
    De-Minimis Waste Contributor
    Consent Decree and Administrative
    Order Guidance (Reich/Lucero)
    52 FR 43393 November 12, 1987

    H. Guidelines on Preparing NBARs

    Interim Guidelines on Preparing
    Nonbinding Preliminary
    Allocations of Responsibility
    (Thomas) 52 FR 19919 May 28, 1987
Date
QSWER Dir. No.
10/20/87      9834.9
5/27/88
6/19/87
9834.9a
9834.7
10/19/87      9834.7-1A
 5/16/87      9839.1
III. Section 106

    A. Administrative Orders

    Guidance on the Use and Issuance
    of Administrative Orders Under
    Section 106 [being updated]
    (Price/Thomas)

    Issuance of Administrative Orders
    for Immediate Removal Actions
    (Thomas)
    6*
    Endangerment Assessment Guidance
    (Porter)
9/8/83
 2/21/84
9833.0
 9833.1
11/22/85      9850.0-1

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    Bslicy

    C. 106(b) Reimbursement

    Consent Orders and the Reimburse-
    ment Provision Under Section 106(b)
    of CZRCLA (Lucero/Leifer)

IV.  Cost Recovery

    A. Cost Recovery Guidance

    Cost Recovery Actions under CERCLA
    (Price/Thomas)

    B. Procedures for Documenting Cost

    Preparation of Hazardous Waste
    Referrals (Stiehl)

    C. Cost Recovery Strategy

    Superfund Cost Recovery Strategy
    (Porter)

    D. General Cost Recovery

    Cost Recovery Referrals
    (Sniff)

    Expansion of Direct Referral of
    Cases to the Department of
    Justice  (Adams)

    Coordination of EPA and State
    Actions in Cost Recovery Negotiations
    and Litigation (Price/Thomas)

    Guidance Regarding CTOCIA
    Enforcement Against Bankrupt Parties
    (Price)

    Small Cost Recovery Referrals
    (Stiehl/Iucero)

    Revised Hazardous Waste Bankruptcy
    Guidance (Mays)

    Policy on Recovering Indirect Costs
    in CERCLA Section 107 Cost Recovery
    Actions  (Stiehl/Stanton)
Date
6/12/87
OSWER Dir. No.
9833.2
8/26/83
7/30/85
7/29/88
8/3/83
1/14/88
8/29/83
5/24/84
7/12/85
9832.1
9837.1
9832.13
9832.0
9891.5A
9832.2
9832.7
9832.6
 5/23/86      9832.8
 6/27/86      9832.5

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V.
Policy

Cost Recovery Actions/Statute
of Limitations  (Lucero)

Guidance on Documenting Decisions not
to Take Cost Recovery Actions (Cannon)

State Issues

A. Funding State Enforcement Actions

Interim Final Guidance Package
on Funding CERCLA State Enforcement
Actions at NFL Sites  (Porter)

B. Counting State-lead Enforcement
    Counting State-lead  Enforcement
    NFL Sites Toward the CERCLA
    Section 116(e) Rpmprlial Action
Start Mandate  (Porter)

C. General State Guidance

EPA -  State Relationship in
Enforcement Actions for Sites
on the NFL (Thomas)

Reporting and Exchange of
Information on State Enforceme
                                  art1
    Actions at National  Priorities Sites
     (Porter)

    Supporting State Attorneys General
    CERCLA Rniy Hnl and  Enforcement
    Response Activities at NFL Sites
     (LongesVCannon)

vi. Other Guidance

    A. Administrative Record

    Administrative Records for
    Decisions on Selection of  CERCLA
    Response Actions (Lucero/Longest)
                                                Date          OSWER Dir. No.

                                                6/12/87       9832.9
                                                6/7/88
                                                4/7/88
                                                 10/2/84
                                                3/14/86
                                            6/21/88
                                            5/29/87
                                                          9832.11
                                                          9831.6a-6d
                                            10/21/88      9831.8
                                                          9831.3
                                                          9831.2
                                                          9831.7
                                                          9833.3
    B. Contaonity Relations

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Policy

Interim Guidance on Onrnimity
Relations  in Enforceroent
 (MaGraw)  [being updated]

Qamunity  Relations during
Enforcement Activities and
Development of the Administrative
Record  (Porter)

C. Entry and Access

Entry and  Continued Access Under
CERCLA  (Adams)

D. Insurance and Indemnification

Procedural Guidance on Treatment
of Insurers under CERCLA  (Price)

EPA Interim Guidance on Indemni-
fication of Super fur xl Response Action
Contractors (Porter/Kinghorn)

£. -Federal Liens

Guidance on Federal Superfund
Liens (Adams)

F. Off-Site Policy

Revised Procedures for Implementing
Off-site Response Actions
(Porter)
G. P
Guidances
Catalog of Superfund. Program
Directives — Interim Edition

Interim Guidance on Use of
Administrative Penalty Provisions
Under Sections 109 and 325  (Adams)

H. Title III
Interim Strategy for Enforce
of Title III and CERCLA §103
Notification Requirements
                                 Date          OSWER Dir.  No.

                                 3/22/85       9836.0
                                 11/3/88
                                 6/5/87
                                 10/6/87
                                 9/22/87
                                 11/13/87
                                              7/88



                                            7/16/87
                                 12/14/88
                                                          9836.0-1A
                                                           9829.2
                                 11/21/85      9834.5
                                                          9835.5
                                                          9832.12
                                                          9834.11
                                               9200.7-01



                                               9841.1
                                                          9841.0

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Policy

I. Releases

Reporting Exemptions for Federally
Permitted Tteia*«M»g of Hazardous
Substances  (Thomas) 53 FR 27268
July 19, 1988

J. Delegations

CERCIA Enforcement Delegations
Date
7/11/88
OSWER Dir. No.
exempt

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                                                          « 9832.0
    «    UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
    *                   WASHINGTON. DC !»*»»
                          3AL/G  1S83
SUBJECT:  Coat Recovery Referral*

FROM:     Kirk F.  Sniff ^U+b* i*^     .<<
          Acting Associate Enforcement Counsel f

TO:       Regional Counsels,
          Regions  1-X


      Recently, you provided ay office with projection! of
hazardous vasce civil  referrals to Headquarteri through the
recainder of Ti 1983.  Included in the projected total of 27
referrals were 19  cost recovery referrals.  Nearly all of
these actions would involve recover? of coiti associated
with immediate removals.

     On July 27, 1983, we met with the Department of Justice to
discuss the most appropriate means for managing these expected
referrals.  In light of our continuing difficulties with cost
documentation for  existing referrals and actions, we agreed to
two basic rules for handling the anticipated $107
referrals:

     1.   OEC-Waste will only accept referrals which include
          appropriate  cost documentation.  If documentation is
          inadequate,  the referrals will be returned to the
          Regions  for  further development.  To assist you in
          Assessing the adequacy of your referral, 1 refer you
          to the draft guidance, "Cost Recovery Actions Under
          C£RGU," which was distributed to Che Regional Division
          Directors at their national meeting on May 11 and 12,
          1983, and to the attached document entitled "Partial
          List of  Docvsant* Keeded to Support Coat Recovery." I
          atrongly recommend that you include copies of the sup-
          porting  docunents ia Che referral package.  If for
          •oa* reason  this is not possible, the referral package
          should clearly identify Che specific documents which
          support your claims.  Ultimately, this documentation
          vill have to be provided to DOJ.  If you have questions
          regarding documentation in your specific eases, pl*»s«
          contact  the  appropriate Regional coordinator in my
          office.

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    I
    5     UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
   f                   WASHINGTON. DC 10440
SUBJECT:   Cost Recovery Referrals
               /*
FROM:      KirV F. 0-Sr.iff
           Act.Lna,vffs"scciate Enforcement  Counsel  for Waste
     On August 2, 1553, I  issued  a memorandum  staring  several
general policies regarding  the processing  oj:  referrals  under
51 07 of CZSCLA.  Since that  ciae, a  nunber of  y.au  have  raised
questions regarding 37 menorandua.   This  is -intended  to provide
further clarif icaricr.'.

          1.  The oeaorancus  stares  chat  if,  for some  reason,
the Regions have -not included copies of  supporting docusentaticr.
in the referral pac^.-.^e, che -referral  should  clearly  identify
che specific donaencs which  support che  claims .   This
idencif icacion should be in  che fora of a  specific inventory
of che supporting docuoencs,  indicacing  che identity ,  Iccaticr.
and custodian of che docuaencs.   A general averment' chat
docjiaencaricn is "available"  will noc -suffice.

          2.   The aeaorandua staces chac  DCJ  will only file
chose cose recovery claias  for which che re— is  adequate  docu-
mentation.  However, there may be cases where  those claiss
which can be prosecuced immediately  are noc substantial vhen
compared with che cocal pocencial accion.   For example, if  che
Region refers a case seeking  recovery  of $200,000  but  can only
document $8,000, che Headcuarters attorney should  seriously
consider declining the referral until  further  documentation
is provided.  This decision is case-specific.  However, as  a
general guide, you should  consider whether the documented case
is sufficient to stand on  its own.   Of course, in  caking your
recommendation you should  also consider other  important factors
such as the Statute of Limitations,  or the need to make a
                            Tocf if <•
     I hope this answers  some  of your  questions.   If you have
ocher questions please  feel  free co  raise  then.

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                                                   OSNER » 9832.C
  PARTIAL  LIST  OF  DOCUMENTS NESDE3 TO SUPPORT COS? RECDVt*Y
 1.  Total  Payroll expenditures for attorneys, with supporting
 tin* cards  and  tine  sheets

 2.  Total  payroll expenditures for technical personnel,
 with supporting time  cards and tine sheets

 3.  Total  expenditures  for travel for attorneys, with
 supporting  authorizations and vouchers.

 4.  Total  expenditures  for travel ,for technical personnel,
 with supporting authorizations and vouchers.

 5.  For FIT contract  expenditures:  affidavit by contractor
 describing work done, hours spent, hourly cost, overhead
 calculations -and total  cost; vouchers from contractor to
 EPA requesting  payment; Agency records showing authorization
 for Treasury to pay  contractor

 6.  For National Lab  Contract expenditures:  contractor
 summary of samples taken at site and distributed to laos
 for analysis, individual and total cost of sample analyses,
 contractor overhead  costs, name of lab conducting analyses,
 sample numbers,  invoice numbers, total costs, copies of
 all invoices (types  I and II), copies of bills from lab
 to contractor and froa  contractor to EPA if  "SA5" samples;
 affidavit  frore  EPA official verifying contents of contractor
 summary; copy of Agency's authorization for Treasury to
pay contractor;  vouchers from contractor to Agency
 requesting payment.

"7.  For expenditures  by Regional Lab or ORO  (e.g., aerial
photography):   affidavit showing nature of work and total
cost* invoices,  record  of payment.

 I.  For immediate removals:  contractor invoices certified
 by OSCj record  of authorization for Treasury to pay
 contractor; daily contractor cost reports (rough and final};
 daily verification of work and costs by OSC.

 9.  Documentation of  expenditures by TAT and any other
 contractors used, expenditures by other agencies,
 expenditures by State under Superfund contract or
 cooperative agreement.

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                                             OSWER * 9832.1
         COST RECOVERY ACTIONS

               UNDER TEE

 COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION, AND LIABILITY ACT OF 1980
                 (TERCLA)

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                                                        OSWER * 9832.1
                 COST RECOVERY ACTIONS WCSR CERCLA
                         TABLE Of CONTENTS
 1.     Introduction  	 1
 II.    Assembling A  Cost Recovery Action	3
 III.   Elements of • Cost Recovery Action	4
       A.    Evidence of Release or Substantial Thrtat
             of Release of a Hazardous Substance  	 6
       1.    Evidence of Responsibility of Defendants) ... 9
       C.    Evidence that Reaoval or Remedial Action
             Taken by U.S. or State it; Mot Inconsistent
             With the National Contingency Plan	11
       D.    Proof of Costs of Removal or Remedial
             Action  by the O.S. or a State	13
 IV.    Procedural Issues  	 ...... 16
       A.    Timing  of the Cost Recovery Action	16
       B.    Statute of Limitations	17
       C.    Extent  of Liability of Responsible Action  ... 18
       0.    The Demand Letter	20
       E.    Procedure in Event of Response
             To Demand Letter ...... 	 22
             1. Negotiating Teams and Procedures  	 23
             2. Form of Settlement Agreement	 . 26
       F.    Procedure In Event of
             No Response to Demand Letter	 27
       G.    Maintenance and Coordination cf
             Evidence In Event of Referral  	 29
V.     Note on Purposes and Oat of This Memorandum	31

Appendix A  (Costa Recoverable Under CERCLA)
Appendix B  (Model Demand Letter)

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Appendix C   (List of Documents)
Appendix D   (Model Cost Recovery Plan)
Appendix E   (Regional Super-fund  File  Structure)

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"ei*'v,                                                     OSWER * 9832.1
     i.      UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
     *                     WASHINGTON  OC  204*0

                             AUG 261983
   MEMORANDUM
   SUBJECT:  Guidance on Pursuing Cost Recovery
             Actions Under CERCLA
   FROM:     Courtney M. Price _
             fsbeeialCounsel for  Enforcement
             ,ee H.  Thomas
             Assistant Administrator for
               Solid Waste and Emergency Response
   TO:        Enforcement Counsel
             Regional Administrators
             Regional Counsels
             Associate Enforcement Counsel-Waste Division
             Regional Superfund Coordinators
             Air and Hazardous Substance Division  Directors.
             Environmental Services Directors
   I.  INTRODUCTION
        Section 107  of the Comprehensive Environmental  Response.
   Compensation and  Liability Act (CERCLA)  provides  generally  that
   past  and  present  owners and operators of a  site,  and generators
   and transporters  who contributed hazardous  substances to a  Rite,
   shall be  liable  (with certain  limitations to be discussed herein)
   for all costs of  removal or remedial  action undertaken  by the U.S.
   government,  a State, or any other person* and for damages to or
   loss  of natural resources.
        While it is  highly desirable to  obtain removal  and remedial
   action in the first instance by responsible parties;  rather
   than  by the  Environmental Protection  Agency (EPA) or a  State,
   there are and will continue to be many eases in which the Agency
   will  authorize the use of CFRCLA funds from the Hazardous Substance

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                                                       OSWER * 9832.1'
                               -2-

Response Trust Fund  (the Fund) established by CERCLA for these
actions, and thereafter attempt to recover those costs from the
party or parties who are liable under Section 107 of the Act and
other authorities.
     Due to thn possibility of cost recovery efforts in any case
in which CERCLA funds are expended, the observation, documentation
and preservation of critical facts and response costs is important
to assure that:
     •  potential evidence concerning the site ,!/ and responsible
        parties is noted and documented before response activity
        or the passage of time obscures or eliminates it;
     *  physical evidence essential at trial is collected and
        preserved appropriately: and
     *  sufficient evidence of total costs and claims paid from the
        Fund has been maintained and is available to support recovery
        by the government.
     This memorandum describes essential elements which the
government will probably be called upon to prove in a cost
recovery action; the assembly and maintenance of a file: some
examples of appropriate documentation for each element of the
cause of action; procedures for processing and negotiating cost
recovery claims; and the mechanics of repayment of any recovery to
the Fund.  This guidance must be observed by EPA employees, con-
tractors, and, where appropriate* employees of State agencies
working on a site on which CERCLA funds are expended under an
T7?he word 'lite1 as used herein applies to any location where a
release or spill has occurred, and maybe used interchangeably with
•facility' as defined in CF.RCLA $101(9).

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                              "3"                       OSWEB ) 9832.1
EPA-State cooperative agreement,  in every situation  in which CERCLA
funds art expended for site clean up, since each of  these sites
the subject cf a potential cost recovery action.  The Office of
Waste Programs Enforcement is preparing an additional cost docu-
awntation guidance; please contact Liboy Scopino (382-4482) for
assistance.

II.  ASSEMBLING A COST RECOVERY ACTION
     The assembly of evidence for a cost recovery action begins
with the first response action taken under Section 104 of CERCLA.
The filing of a cost recovery action should be presumed; accordingly
the collection of relevant documentation is important.  Generally,
the government will pursue a  cost recovery action when there is a
solvent responsible party'.2/  Where other government action against
the responsible party is contemplated-or pending, such as a  judi-
cial action under Section 7003 of RCRA or Section 106 of CERCLA tc
compel remedial measures at a site, a cost recovery  count under
Section 107 of CERCLA for removal or remedial costs  can be added
to the ongoing litigation.
     The Regional Program office has the responsibility of
collecting and maintaining the documents used as evidence in
cost recovery actionsi  In Batter* which require legal opinions
(such as the legal right of the Agency to enter a facility) or the
preparation of legal documents, the- program office should consult
with and obtain the assistance of the Regional attorney or the
appropriate Headquarters attorney.
2/   For a discussion of the factors to be considered  in determining
whether to file a cost recovery action, see Part IV.F.

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                                                        OSWER I 9832.1
                             -4-

III. ELEMENTS OF A COS? RECOVERY ACTION
     Under Stction 104 of CERCLA, the U.S. or its authorized
representative may take removal or remedial action at a site
when, inter a1ia, any hazardous substance is released or there
is a substantial threat of such a release into the environment,
unless EPA determines that such action will be done properly
by the owner or operator or by any other responsible party.
The government may pursue an action under 5107(a) for (1)
costs of removal or remedial action incurred by the U.S. not
inconsistent with the National Contingency Plan (NCF), or
(2) claims paid by the Fund for costs of response incurred
by a state not inconsistent with the NCP, or by other parties
not inconsistent with the MCP.2/  Section 104(b) also authorizes
the recovery of costs- of sampling, analysis, monitoring and
surveying programs, and certain other costs, including those
3/   There may also be a claim Bade by trustees under Section
T07(a)(4)(e) of CERCLA for damage to or lots of natural resources.
However, until regulations for assessment of natural resource
damages or destruction arc promulgated pursuant to Section 3CKO
of the Act, claims for such damages will be assessed on a case-by-case
basis.  The best  records available on those damages should be
maintained until  specific guidance is developed on that subject.

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                              -S-                     OSHER I 9832.1
for planning, legal and engineering services.4/
     Therefore, to successfully pursue * cost recovery action, EPA
should be prepared to introduce evidence demonstrating:
   1.     release of a hazardous substance or the substantial threat
of such a release; and
   2.     the responsibility of the defendants); and
   3(a),  removal or remedial actions taken by the U.S. or the
State which were not inconsistent with the NCP 5/; and/or
   4.     the  costs of action taken by the U.S.. a State, or
any other person.

     The financial condition of a -responsible party is not an
essential element of proof of the cause of action.<6/  Even so, the
financial condition of the responsible parties nay be considered
in determining the feasibility of a cost'recovery action.
4/  roc a'list of costs which art recoverable under  CERCLA, see
Xppendix A.
5/  Although Agency policy is to-maintain evidence that  its
response activities are not  inconsistent with the NCP, the Agency takes
the position that the defendant has  the burden of proof  on this  issue.
€/  While we do not believe  that it  is necessary to  introduce
evidence that removal and remedial action would not  have been
done properly by the owner or operator of a  facility or  by any
other responsible party, it  would be prudent to have available
•videnec of efforts by the Agency to obtain  private  party response
action at the sit*.  The notice letters forwarded by the Agency
to potentially rtsponsiblt parties and their responses arc
exanples of such evidence.

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                                 -6-                    QSWER * 9832.1

     The  chief elements  of  •  cost  recovery  action  and  the

 nature  of evidence  required to  sustain  then are  discussed  below.

 A.   Evidence of  Release or Substantial Threat of  Release
     of a' Hazardous Substance

     A  release of a hazardous substance or  the substantial threat

 of such release from a facility Bust  be shown.   The  tern 'hazardous

 substance* includes inter alia,  any material designated as hazardous

 or toxic under the Clean Water  Act, Toxic Substance  Control Act,

 or the Clean Air Act or  designated as a hazardous  waste under RCRA

 (see 40 CFR 302).  The definition should be consulted  since it

 does not include every pollutant or contaminant."]_/

     Appropriate documentation  of evidence  of a  release or sub-

 stantial threat of release  includes field notes, photographs of

 the scene, statements from  witnesses, statements from  owners or

operators, follow-up -narrative  reports  or memoranda  describing the

scene or observations first hand, samples of air,  soil, water or

leachate discharge and laboratory analyses  of the  samples.  Evidence
7/   Section 104(a) of the Act authorizes the President  (or his
d"esigne<»l to take response action whenever there is a release or
threat thereof of a hazardous substance, or whenever there is a
release or substantial threat of a release of 'any pollutant or
contaminant which Bay present an imminent and substantial endanger-
•ent to the public health or welfare...".  However, Section 107
refers only to liability of owners, operators, transporters and
generators for costs incurred in responding to releases or threats
of releases of "hazardous substances'.  Zt is not clear whether
those persons nay also be liable under  1107 for costs incurred in
responding to releases or threats of releases of any pollutant or
contaminant which is not a defined hazardous substance, but which
may present an imminent anrf substantial endangerment.  The government
intends to hold  such persons liable for those costs under both section
107 of CERCLA and the common law theory of restitution.

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                             -7-                        OSWER * 9832.1

 collected  must be sufficient to demonstrate this  aspect of  the
 case.
     There are three important considerations her*.
     First,  samples, records of the owner/operator,  or  other
 evidence sufficient to establish the identity of  hazardous  sub-
 stances  involved should be  collected.
   Procedures similar or identical to those  used by the  National
 Enforcement  Investigations  Center (NEIC) £/ should be followed, as
 should the requirements of  Section 104(e) (1)(B),  which  provides
 for  furnishing a receipt to the owner/operater for any  samples
 taken  rand a split sample,  if requested).   Observance of chain-of-
 custody procedures is  necessary to demonstrate at trial that
 samples analyzed as hazardous substances  did.  in  fact, -originate
 at the site.
     Collecting  more data and documentation about, sites than is
 reasonably necessary may increase total response  costs  to an
 unduly high  level and  delay clean-up activities and  cost recovery.
 The  number of  samples  collected is primarily  a matter within the
 judgment of  the  Regional and Headquarters Superfund  Offices, anrf
 will necessarily depend to  a great extent on  the  site and the
 affected areas of the  environment.  These Offices should consult
 with the Regional Counsel prior to collecting  samples.  However,
 the Agency should generally collect only enough samples  to  determine
 (1)  that a hazardous substance is present on  the  site;  (2)  that a
8/  NEXC Policies and  Procedures Manual, May, 1978  (rev., Dec.
1981), EPA Document No.  330-9-78-001-R.

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                                 -8-
                                                        OSWR I 9832.1
 release of the hazardous substance is  substantially  thrtattn«d or
 has occurred: and  (3} what  response  is  appropriate.  Only  unusual
 circumstances (e.g. , to satisfy  doubts  over validity >f previous
 samples, to determine whether concentrations of hazardous  substances
 are increasing, etc.) would  justify  incurring significant  additional
 costs for any additional sampling and analysis.
     Samples should b« tahen in  accordance with EPA-approved
 protocols and procedures developed by NEIC and contained in  its
 Policies and Procedures Manual referred to above or  similar
 procedures.
     Second, collection of  this  evidence should begin immediately
 upon the start of any investigation  into whether some response
 activity (including sampling and surveying) may be needed  at the
site in response to a release or threat of release.  Passage of
time or deliberate interference  by other parties may literally
destroy the evidence.  Similarly, a  long delay between the initial
observation and the trial, or the initial observation and  the  .
recordation of that observation/ will m*Xe testimony by witnesses
 about the site more difficult.   Photographs of the scene before,
during and after the response action are frequently  helpful  in
preparing witnesses to testify,  and  in providing a visual  record
to the Court of conditions that prompted the response activity.
     Field notebooks and the results of laboratory analysis  are
critical in showing the conditions that existed at the site  and
establishing a potential link to the defendant.  Sampling  and
analysis should be conducted with particular concern for accuracy,

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                                _9_                   OSHER 19832.1
detail, completeness and quality, since these documents are likely
to  be subject  to close scrutiny by responsible parties and the
court.  The NEIC has developed inspection and analysis procedures
to  assure high quality evidence and documentation for trial.
Observance of NEIC procedures assures a consistently high quality
of  evidence, and should be  followed by EPA employees, other federal
agencies, contractors, and  State agencies which have entered into
an  EPA cooperative agreement for response using CEXCLA funds.
     Third, for ease of assembling the ease and presenting it for
trial, the following people should be identified by name,  relevant
qualifications or connection to the case, and information  about
how to contact them in the  future:  1) persons who participated
in  the site inspection, sampling, analysis or photography; 2)
persons who may have historic or current information from  personal
observation, 3) people who  gave or refused to give, statements.
B.   Evidence of Responsibility of Defendant(s)
     Zn most cases, the liability of defendants will be demonstrated
by  establishing the elements in subsections  (i)-(4) of <107(a).
EPA personnel have a variety of techniques to gather evidence
connecting the hazardous substance vith the potentially responsible
party or parties.  For example, a deed or lease evidences  the
responsibility of owner or  operator of the site.  Less formal
evidence can also be helpful in tracing responsiblity.  The operator's
presence at the site ever a period of time will usually be noted
by'employees,  neighbors, law enforcement officers, competitors or
others close to or interested in such activities.  Those observations
should be recorded in signed statements or affidavits.  Zn addition,

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                                -10-                   OSSER t 9832.1
 the  activities  of  operators  of  * site may require  a  license  or
 permit  under  State or local  laws and regulations.  The  appropriate
 agencies  should be consulted to determine whether  they  ha>/e  any
 record  of activities  by an operator of the site.
     The  problem of linking  a transporter or generator  of a  hazardous
 substance to  a  site is  frequently a acre  difficult undertaking.
 The  following detection sources may prove fruitful.  Often, operators,
 generators, and transporters have records of business transactions.
 Drums located on-site may  bear  labels  or  markings with  the name of
 a generator; -these drums or  labels  should be preserved,  if possible.
 or photographed, and  the photographs  laSeled for identification
 and  future use  as  possible evidence.   Under certain  circumstances
 the  case  development  team  may decide  to perform a che.mical analysis
of the waste  to assist  in  establishing the similarity between.the
wastes and a particular company's process.9/  (Information regarding
parties and sites  may also be obtained by use of letters issued
un-der authority of  RCRA Section 3007  and  CERCLA Section  104U)).
     Again, local  residents,  law enforcement officials or compe-
titors nay be sources of information  on transporters of material
to the site or  in  the general vicinity.   Employees or former
employees of a  generator or  transporter nay he willing to discuss
the  disposal practices  of  their employers,  and if so, signed
statements or affidavits,  if  possible* should be obtained from,
them.

 9/  Information on the  composition  of  waste streams  associated
with various  industrial processes may  be  obtained from the Hazardous
and  Industrial  Waste  Division (WH-565), Office of Solid Waste, U.S.
Environmental Protection Agency,  401  M Street, S.W., Washington* D.C.
20460.

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                              "11"                     OSCR f 9832.1
   C. Evidence That Removal or Remedial Action Taken By the D,S  or
      State Is Net Inconsistent With The National Contingency Plan
     Pursuant to Section 104 of CERCLA, after information is
gathered that a release has occurred or is threatened, a variety
of actions may be taken by EPA or a State.  Among those actions
are:
     (i)  Investigations, monitoring, surveys, testing and other
information gathering as may be necessary and appropriate to identify
the existence and extent of the release or threat thereof, the
amount, source and nature of the hazardous substances, and the
extent of danger to public health, welfare or the environment.  In
addition, such planning, legal, fiscal, economic, engineering.
architectural and other studies or investigations may be undertaken
as necessary and appropriate to plan and direct response action;
     (ii) 'Removal actions", as the term is defined in Section
101(23) of CERCLA, and which'includes, without limitation, security.
fencing, provision of alternative temporary water supplies, ant4
temporary evacuation and housing of threatened individuals.  In
addition, EPA may take such other action as say be necessary
to prevent, minimize or mitigate damage to public health, welfare
or the environment, such as removal of materraIs, temporary diking
and other easily accomplished actions; and
     (iii)  'Remedial actions'* as the term is defined in Section
101(24) of CIRCLA, including installation of * clay cover, dredging
or excavations, collection of leaehatt and runoff, on-site storage,
treatment or incineration, provision of alternative water supply
and clean-up of released hazardous substances.  Subject to some
restrictions, it may also include permanent relocation of residents
and business and community facilities, and off-site transportation,

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                                                        OSKER « 9832.1
Storage• treatment or disposal  of  hazardous  substances.
     In a cost  recovery  action,  two  factors  art  important  in the
development and preservation  of  evidence  regarding  the  appropriate-
ness of the action taken by EPA  or the  state.  These  factors are:
     A.   The action was not  outside what CERCLA allows.
     B.   The action taken must  be "not inconsistent* with the NCP.
Therefore, the NCP should be  referred to  and all persons involved in
the decision-making process should be faoiliar with its requirements
and limitations before decisions regarding actions are Bade ID/.
Those decisions should be documented by notes, memoranda, letters
and other written records maintained in the  appropriate files.
     Under the NCP, remedial  actions must also be shown to provide
a cost-effective response.  A cost-effective remedy is one which,
among the alternatives examined, is least costly but  technologically
feasible, reliable and adequately  protects public health anc* the
environment.  Zn addition, under the Section 104 (c)(4) balancing
test, the Agency should  document remedial actions to  refute any
claims that the remedy was not cost-effective.  Measures of cost-
effectiveness includes the protection afforded public health,
welfare and the environment by the remedy.   Zn 'immediate removal'
actions it will be especially important to document the circumstances
which justify the netd for immediate action.  As provided in. section
300.65 of the National Contingency Plan,  an  immediate removal is
appropriate when the lead Agency determines  tftat the  initiation
of immediate removal action will prevent  or  mitigate 'immediate
risk of harm to human life or health.
10/   The National Contingency Plan  is published  in 40 CFR Part 300,
47 Fed. Reg. 31180 (July 16, 1962).

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                                -13-
                                                       OSWER 19832.1
Immediate removals arc appropriate in such situations ««-.  D
human, animal, or food chain exposure to acutely toxic substances
2) contamination of a drinXing water supply; 3) fire ancVor
explosion; or 4) similarly acute situations.
     Evidence of the cost-effectiveness of a particular remedial
action may be demonstrated by tr.~ .ollowing evidence which is
contained in summary form in the record of decision:
     •  studies showing the'technical feasibility and probable
        cost of alternative remedial actions on the particular
        site;
     •  information that shows the degree of risk to public health,
        welfare and environment presented by the particular site
        (i.e., population threatened, media affected, toxicity of
        the hazardous substance involved* etc.);
     •  other documentation generated in consideration of the
        various factors required by Section 300.68 of the NCP.

     All such evidence should be documented by written studies,
reports, letters, memoranda, notes/ minutes of meetings and any
other record of the relevant bases for talcing a particular remedial
action.
D.   Proof of Costs of Removal or Remedial Action by the D.s.
     or a State
     Collecting evidence of costs of removal or remedial action
taken on a site is likely to be a time consuming task.  Documents
must be obtained from a variety of participants in the cleanup
activity:  agencies, contractors, and others.  The success of

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                             '14'                       OSWER | 9832.1
government cost recovtry actions depends upon the use of good
bookkeeping and record collection techniques.
     Certain costs expended on removal and remedial action are not
recoverable.  For example, no recovery under CERCLA is permitted
where response costs resulted from application of a FIFRA-registered
product (see Section 107(i)). or from a Federally-permitted release
(see Section 107 (j)K  In borderline cases, it should be assumed
that removal and remedial action costs are recoverable and records
developed and maintained with this expectation.
     A variety of mechanisms are available tot tracking costs.
While EPA prefers the uniformity of a single accounting system,
the particular method of accounting Day vary if it ensures accurate
record keeping and preservation of all costs attributable to a
particular site.  To further this objective, cooperative agree-"
ments between EPA and a State, or contracts between. EPA and. a
contractor for performance of response activity on a  site, should
specifically require that accounting procedures used  by the State
or contractor be approved by EPA.
     An accounting and expense-tracking system is already in
place at EPA, and should be followed closely by all EPA personnel,
contractors and State agency personnel working on CERCLA-funded
sites.  This system generally involves the .assignment of a unique
accounting number to each specific site, and the charging of time.
material and other expenditures to that account number.  The site
number is assigned by Headquarters based on a request from the
Regional Office  and confirmation of an approved Federal response.

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                             "15~                       OSER t 9832.1
In addition, activity codes have been devised under which different
activities and phases of site clean-up and remedial action may be
described.  Questions regarding the specifics of these accounting
procedures should be directed to the Financial Management Center
in the Offick of Emergency and Remedial Response (FTS 382-2208).
     Evidence of the cleanup costs should be preserved and avail-
able for introduction into evidence.  This could include such
documentation as receipts for money paid for goods or services;
cancelled checks; contracts and any amendments thereof; purchase
orders; invoices; records of time spent, where the claim includes
the value of such time; travel records and vouchers; and records
of all correspondence or other communication regarding the actual
costs, as well as progress reports on the work performed.  The
names, addresses and telephone numbers of all persons maintaining
the regular business records of contractors, agencies or persons
outside EPA should also be maintained for ready reference, ll/
U/  The Emergency Response Division of the Office of Solid Waste
and Emergency Response of EPA is developing a field manual entitled
•Cost Control Management for Superfund Removal" for immediate and •
planned removal action*.  This manual presents a management system
for On-Scene Coordinators for controlling, verifying, and documenting
all costs incurred in a removal action.

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                                                         0»ER « 9832.1
IV. PROCEDCaAL ISSUES
A.   Timing of the Cost Recovery Proceeding
     While the Office of Waste Programs Enforcement will work with
the Regional Program Office in setting priorities for cost recovery,
the following basic timing guidelines are offered.  Cost recovery
actions for expenses incurred in immediate or planned removals
will normally not be initiated until after such response activity
has been completed, since the time required for those activities
is relatively short.  However., a cost recovery action need not be
delayed where the Agency establishes a multiphase response action
(e.g., surface clean up, groundwater clean up).  A cost recovery
action can begin before completion of the last phase of response
activity for costs expended to date and also for calculable  future
cos ts.
     Where one stage of cleanup follows another in fairly rapid suc-
cession, cost recovery actions should be initiated after the  cleanup
is fully completed.  Zn situations where there are substantial delays
between phases, however, the Agency may decide to commence a  recovery
action at an intermediate stage.  Zn these instances, negotiations
regarding recovery of expenditures may be combined with discussions
with responsibile parties over prospective cleanup activities.
Generally, an action will not be filed for recovery of a remedial
investigation/feasibility study or the cost of design prior  to the
filing of an action for recovery of construction costs.

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                                "17~                            9832.1
B.   Statute cf Limitation!
     CERCLA does net contain  a  time  limitation provision within
which a cost recovery action  must  be  brought.  In  the  absence of
a specific statutory provision,  the  federal  statute  of limitation
would apply.  There is some doubt  at  this  time as  to precisely
which limitation period will  be  applied  to a cost  recovery action.
Limitations for actions brought  by the Onited States for money
damages are contained in 28 DSC  Section  2415, which  distinguishes
between actions based in tort or in  contract.  Because cost
recovery actions are essentially quasi-contractual .actions in
the nature of restitution, a  six yeafc statute of limitations if
any, should apply.  However,  since it is possible  that a court
may see CERCLA actions arising'out of the  tortious conduct of
others,  cost recovery actions should  be  brought within three
years after the right of action  accrues.
     The date the cause of action  accrues  is also  subject
to debate.  In United States  v.  The  Barge  Shamrock et'al, 635
F.2d 1108, 1110 (4th dr., 1980), 'cert, den. 102 S.Ct. 125 (1981),
the Fourth Circuit held th*t  a cost  recovery action  under the
Federal Water Pollution Control  Act  arising out of an  oil spill
first accrued when the government  completed  the cleanup operation.
On the other hand, * defendant-Bight  veil  be expected  to argue
  •
that the cause of action' accrues at  the time funds are first
expended on the sit*.  Zn order  to avoid argument  on this point,

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                                                        03*31 f 9832.1
                               -18-

 and  to eliminate  a potential bar to recovery,  tht  Agency  should
 attempt to commence all cost recovery 'action within  three years of
 the  date dollars  are first expended.
 C.   Extent of Liability of Responsible  Parties
     While CERCLA Section 107(a)  identifies parties who are
 responsible for  the costs of response actions  at a site*  the
 statute does not  expressly set forth  the the nature of that
 liability.  Language which imposed 'strict, joint  and several*
 liability on the  responsible parties  was dropped from earlier
 drafts in the final, compromise bill* and replaced with a definition.
 in Section 101 of "liable* or "liability" which refers to the standard
of liability which obtains under Section 311 of the  Federal Water
Rollution Control Act.   Section 34-1 is a strict liability statute.
City of Philadelphia v.  Stepan Chem.  Co., 5*4  F. Supp. 1135, 1140.
n.4  (E.D.  Pa. 1982).  Moreover,  section  311 imposes  joint anrf
several liability, U.S.  v. H/V Big Sam.  681 F.2d 432,439  (5th Cir.J,
on pet. for reh. , 693 F.2d 451 (5th Cir. 1982).
     The position of EPA is that in appropriate circumstances, joint
and several liability is applicable under MRCLA.  This position is;
supported by reference to section 311, by the  legislative history of
CERCLA 12/t and by Section 107(e)(2)  of  CERCLA, which provides that
nothing in CERCLA "shall bar a cause  of  action that an owner or
operator or any other person subject  to  liability  under this section...
has or would have by reason of subrogation or  otherwise against any
person."
TIT  126 Cong. Rec.,  S.19964  (daily ee1.   ov.  24,  1980);
T56 Cong. Rec., H.11707  (daily ed.  Dec.  3,  1980).

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                               -19-                     OSWER | 9832.1

 The  Department  of  Justice  has  interpreted  this  section  is confirm
 ing  •  defendant's  right  of contribution  against other  responsible
 parties*- which  is  only of  value  to a defendant  who  has  been
 held jointly and severally liable 13/.
     Joint and  several liability is traditionally imposed when
 the  actions of  two or more defendants cause  a single*  indivisible
 result,  (Prosser,  Law of Torts,  (4th ed. 1971),  Sec. 52.)  That
 determination may  involve  factual issues.  Therefore,  where
 two  or more parties in the categories of responsible parties listed
 in Section 107{a)  contribute hazardous substances to a facility
 which are being.released,  threaten to be released,  or  are contributing
.to the release  or  threat,  the  Agency may argue  that those parties
 are  jointly and' severally  liable for the costs  of responding to
 that release or threat.
     This of course does not foreclose the Agency from entering
 into consent decrees or  other .appropriate  agreements with multiple
 responsible parties in which they agree  tp allocate the Agency's
 response costs  among themselves. The Agency is primarily con-
 cerned with achieving cleanup  of hazardous sites, preferably by
 private action, and there  are  many reasons why  responsible parties
 may  wish to share  the costs.   However, this  is  primarily a matter
 for  the responsible parties, and if they cannot agree  among
 themselves on an appropriate allocation  of responsibility, EPA
 should proceed  with legal  action on a theory of joint  and several
 liability.
l3/  Letter datecr'"Ee"cember 1,  1980,  from Alan A.  Farfcer,
Attorney General,  Office  of Legislative Affairs,  to Bon.
James J. Florio,  126  Cong. Rec.  H11788 (daily ed. Dec. 3,  1980).

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                                                         OSWER I 9832.1
                                 -20-

D.   The Demand Letter
     The first formal step  in  the  commencement of a cost recovery
proceeding will be the issuance  of • letter of demand from EPA to
the potentially responsible party or parties for payment of
costs expended on the site.  A demand letter should be sent to
all parties  in a case who have b*en identified as potentially
responsible  (i.e., past and present owners/operators of a site
and generators and transporters  who contributed hazardous sub-
stances to a site), and should be issued after all-response
activity has been completed, or  at the completion of one ohase
of a multi-phase response where  the entire process will reauire
an extended period of time.
     Before a demand letter is sent, the potential case should
be analyzed for the elements in  part 111 above, including ident-
ification of all potentially responsible parties (including
responsible individuals in corporations where appropriate) and
assembly of cost information.  At the time the demand letter is
sent, the Agency should be able  to answer reasonable questions
posed by a recipient of the, letter.  Regional personnel should
have referred the case to Headquarters (or recommended against
an action) and Headquarters staff should have resolved their
position on a referral so that the Government is prepared to
file a complaint if the response to the demand letter is unsat-
isfactory.
     The letter should be issued where response costs have been
incurred under CERCLA, regardless of whether a decision has been

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                               -21-                     OSHER » 9832.1
 made to initiate a judicial proceeding for cost recovery.
 The demand letter should contain the following points:
      •  reference to EPA's authority to administer CERCLA and
         the Fund established thereunder (or reference to
         authority to recover costs where the response activities
         for which reimbursement is sought occurred prior to
         CERC1A);
      *  the location of the site;
      •  the presence of a hazardous substance which was re-
         leased or threatened to be released;
      '  in general terras, the dates and types of response activity
         undertaken by EPA at the site;
      *  any notice given to the recipient prior to or during  the
         response activity, allowing the recipient the opportunity
         to undertake the work or pay the expense be response;
      •  the total cost of the response activity 14/ broken down into
         general  categories;
,147  The  amount stated in the demand letter should be the total
'obligated by .the Agency to be expended on the site, rather than
 the amount shown by Agency records to have been expended on the
 site at the time the letter is prepared.  This is to avoid proMems
 caused by delays in payment of response costs after a demand letter
 has been forwarded to the responsible party.  Even so, available
 records should be assembled as soon as possible.  Where it
 is  expected that future costs will be paid (e.g., in the
 next phase of  response activity), the letter should also
 clearly state  that in addition to the SUBS already obligated
 and spent, the Agency expects to expend additional sums on >
 the site for which claim will be made against the responsible
 party.  Of course, in a judicial proceeding in the cost
 recovery action, the Agency will be required to prove the
 actual amounts spent from the Fund.

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                                -22-                     OSCR I 9832.1

     •  * general statement that tht Agency believes that the
        recipient is a responsible party and-liible for the sum
        set forth;
     •  a demand for payment;
     •  a statement that the recipient of the letter should contact
        EPA within a specified  period  (normally thirty days) to
        discuss the account and the recipient's liability therefor;
     •  a warning that if recipient fails to contact the Agency
        within the specified time, a suit may be filed in the
        appropriate U.S. District Court for recovery of the
        claim; and
     •  the name, address and telephone number of a representative
        of the Agency who the recipient should contact.  A sample
        •demand letter is attached to this memorandum as Appendix B.

     The primary responsibility for preparation of the demand
letter will be in the Regional  Program Office.  The Regional
Program Office .should consult with the representatives from
OHPC, Regional Counsel, and Office of Enforcement Counsel-Waste.
The demand letter will-be sent  through the Office of Waste Programs
        >*
Enforcement for tht signature of the Director of OWPE unless
that requirement is specifically waived.  If a case is referred
to DOJ, tht DOJ esst attorney should sign tht demand Ittter.

£.   Procedure In Event of Response From Potential Defendant
     Zn many cases, tht recipients of demand letters will contact
the-Agency and express inttrtst in discussing-their status as a
responsible party,  The Agency  encourages such negotiations.

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                               -23-
                                                       OSWER | 9832.1
CERCLA money is limittd; Agency cleanup Activities  deplete the
fund and money must be recovered from  the parties responsible
for the release or threat of release.  Therefore cost recovery
through negotiation or litigation is necessary  to clean up the
greatest number of sites.  Cost recovery should involve the
coordinated efforts of knowledgeable legal and  technical personnel
at both the Regional and Headquarters offices as explained below.
1.   Negotiating Teams and Procedures
     Upon receipt of a response to the demand letter from a
potentially responsible party, the contact person named in the
demand letter will notify the Associate Enforcement Counsel  for
w«$te, the Regional Counsel, the Director of OWPE and the Regional
Superfund office.  Each of those offices will,  upon notification,
identify the person who will represent it on the negotiating
team.   (The Department of Justice may. participate in .cases which
are likely to result in consent decrees or litigation.)
     The formulation of the Agency's position results from the
collaboration of the Team.  Zn some policy decisions the entire
Team has relevant background to participate in  the decision making
process.  However the specialised legal or technical talent on
the Team should be efficiently used.
     The Team has the responsibility for developing a proposed
negotiating schedule.  The proposed schedule should have the
concurrence of the Associate Enforcement Counsel for Waste and
the Director, OWPE in cases of national significance.

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                                                             * 9832.1
     Some  factors which should  b«  considered  in  the  development
of  this schedule are  the nuaber of potentially responsible  parties
who will take part  in  the negotiations;  the nature of  the potential
defenses;  the amount  of available  data linking particular parties
to  the site; the amount of the  claim, and other  related  natters.
Sufficient time should be allowed  for the negotiation  process to
take place, but it  is  important that a deadline  be established as
a goal for achieving  a settlement,  and beyond which  the  negotia-
tions will not continue, absent clear indications that a settlement
is  imminent.  A reasonable period  of time for most negotiations is
60-90 days; negotiations should not be extended  without  Headquarters
approval.  A referral should be submitted by  the Region  and approved
by Headquarters, and a complaint should  be prepared  and  approved
bv the Department of Justice, prior to the conclusion  of negotiations
so that an.action may be filed  if  negotiations are not resolved by
the deadline.
     a. Case Team Leader.  Contemporaneous with  the  formation of
t)*e Negotiating Team, Regional  and  Headquarters  program  managers,
in consultation with OLCC, will select a program official to serve
as the Case Team Leader.  The Case  Team  Leader's function will be
tot
     • focus efforts  to develop, in advance of negotiations, the
       Agency's negotiating strategy and position on issues that
       suy arise during the course  of the ease)
     • ensure the coordination  of  legal and technical .staff par-
       ticipation on the team by scheduling and  chairing regular
       ease review sessions; and
     • define the Agency's objectives in accordance with applicable
       Agency guidances and policies.

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                                -25-                   QSWER * 9832.1
     On occasion,  the Team m*y b«  unable  to develop a  consensus
on a cost recovery issue.  When this occurs, the Case  Team Leader
will prepare a written explanation of the  issue for resolution
by the appropriate supervisory staff.
     b. Lead Negotiator.  Regional Counsel and Headquarters Enforce-
ment Counsel managers, in consultation with the Director of OWPE,
will select the lead Agency attorney for  the case.
                             %.
     Although a Regional Counsel attorney will usually be designated
as the lead Agency attorney, in cases of national significance or
which nay be precedent-setting an attorney from OEC-Waste may be
selected.  The extent of Headquarters involvement will be decided
on a case-by-case basis by the Assistant Administrator for Enforce-.
Rent, (or the Special Counsel for Enforcement until the Assistant
                                   •
Administrator position is established).1  The Department of Justice
should also be consulted and invited to participate in negotiations.
of cases which are likely to result in a consent decree or litigat
particularly in multiparty and complex cases.
     The Team's lead attorney will be responsible for  conducting
cost recovery negotiations.  Although the attorney is  primarily
responsible for explaining and defending the Team's position during
negotiations, he or she may request other Team members  assistance
in articulating the Team's position to opposing parties.
     At the initial negotiation session, the lead attorney should
inform opposing.parties that while the Teas has authority to negotiate,
any agreements are subject to the approval of Enforcement Counsel and
OSWER.  The opposing parties should also be advised that the Agency
has established a deadline for settlement.  The deadline should be
disclosed tc trie responsible parties.  After the deadline, the
Agency will take judicial action.

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                                "2fi"                      OSWER * 9832.1
2 .    form of  Settlement
      CERCLA allows  the Agency  several  ways  the Agency could
settle a cost recovery action:
      •  a consent decree
      •  an administrative order
      •  a memorandum of agreement.
      However,  as a  natter of policy, the Agency has decided that a
consent decree  is required  in most cases.   A forthcoming policy
will  set out  the requirements  for using consent decrees and another
one will address administrative orders.
      Again, it  should be pointed out that the negotiating Team
is not authorized to enter  into a binding agreement of any type
with  the responsible parties in the absence of specific authori-
zation from the Enforcement Counsel and OSWER.  Consent decrees
must  also be approved by the Department of  Justice and the reviewing
court (after  a  thirty day public comment period) «  A draft of any
            •
document which  is to be the subject of negotiation should, of
course, be reviewed before  commencement of  negotiations by appropriate
supervisors of  the  negotiating Team at the  Region and Headquarters,
and any document which the  negotiating Team and their supervisors
believe to be acceptable for settlement should be forwarded to the,
Assistant Administrator for Enforcement, the Director of OWPE and
the Department of Justice at the earliest possible time to allow for
adequate review. '
      The Agency nay allow some settlements  in which the responsible
party agrtes  to pay the claim  in periodic payments where the party
is unable to pay in a lump  sum, or where there is other legitimate
reason for delayed  payment.  Before considering installment payments,

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                                -27-
                                                       OSER * 9832.1
ho«cv«r, the Economic Analysis  Division  of  the  Office  of  Policy
and Resource Management  (F7S  382-2764) and  tht  Financial  Management
Division of the Office of Administration (FTS 382-5135) should be
consulted in order to obtain  a  review of the financial condition
of the responsible P«rty and  to determine any applicable  interest
charges.
     Payment of cost recovery claims should be  made payable to the
U. S. Environmental Protection  Agency and should be mailed to:

               U.S. Environmental Protection Agency
               Accounting Operations Office
               P.O. Box 2971
               Washington, D.C. 20013
               Attn:  Collection Officer for Superfund
The check or other fora of payment should specify  the  name of
the site at which the activity  took place.  The lead attorney is
responsible for furnishing copies of judgments, decrees or agreements
for payment of cost recovery  claims as early as possible  to Financial
Reports and Analysis, Room 3617M, U.S..EPA, 401 H  Street, Washin
D.C.  20460, for establishment of a proper account.

F.   Procedure in Event of No Response to Demand Letter
     If no response is received to the demand letter,  a final
determination .BUSt be- Bade of whether the facts of the case justify
the Agency taking further steps to pursue the cost recovery claim.
A decision whether the case should be referred  to DOJ  should be
made by the Region as well as staff at Headquarters at the time
     »
the demand letter is drafted.  This decision will  initially be
made by the Regional Administrator* based on the recommendation of
the Regional Superfund Office and the Regional  Counsel.

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                                                        OSWER * 9832.1
                               -28-
Reievant factors  to consider  includt:
      (a)  the strength of evidence connecting the potential defen-
          dant (s ) ;
      (b)  the ava ilablility and aerit of any defense.  Possible
          defenses* under Section 107 of CERCLA are generally that
          the r*JL«ase and consequent response action was the result
          of:
          (1) an  act of God;
          (2) an  act of war; or
          (3) an  act or omission by an unrelated third party as
              to  whom the owner/operator had no contractual relations
              and did not fail to exercise appropriate care against
              the foreseeable acts and omissions of that third party.
      (c)  the quality of release, remedy and expenditure documentation
          by the  Agency, a state or third party;
      (d)  the financial ability of the potential defendant(s)  to
          satisfy a judgment for the amount of the claim or to pay
          a substantial portion of the claim in settlement; and
      (e)  the statute of limitations.
      In considering the ability of the potentially responsible
party or parties  to pay, the Regional Offices should make use of
the -Financial Assessment System, developed by the Economic Analysis
Division of the Office of Policy and Resource Management and
managed by NEIC,  to assess the financial condition of most
potentially responsible parties.
     The determination of the Regional Administrator to initiate
• cost recovery aetion shall be forwarded by a memorandum from
the Regional Administrator to the Assistant Administrator for
Enforcement for concurrence in the same manner as the referral of
ether matters for litigation.  A decision not to initiate a cost
recovery action must be reflected in a memorandum to OWPE.  An

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                             "29~                      OSWER * 9832.1
affirmative decision must b« made  by  tht  Regional Administrator
each ease in which CERCLA funds  are expended, whether that decisio
be to proceed or not to proceed.   This  is necessary because of the
Agency's accountability for management  of the Fund.
     After OEC concurs on pursuing the  cost  recovery action/
DEC refers the case to the Department of  Justice, together with
the names of the appropriate Headquarters and Regional personnel
who will be involved in the case.  If the Department of Justice
fails to concur, the originating Regional office is advised of such
non-concurrence, together with the reasons therefor, and recommend-
ations as to whether additional  information  should be provided for
DOJ's reconsideration.  Even though a Region may recomaend against
pursuing a cost recovery action, the  Assistant Administrator for
OSWER may decide on his own initiative  that  such an action is
warranted.  This recommendation  would then be sent to OEC for
consideration.
C.   Maintenance and Coordination  of  Evidence in Event of Referral
     There will inevitably be logistical  difficulties in maintaining
and coordinating the production  of the  mass  of data, contracts,
cost records, and other evidence generated in a response activity.
It is very important to provide  for an  orderly method of expeditiously
providing that information during  the course of a cost recovery
action for use during ease development, discovery, and trial.

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                                .30-                     OSCR 4 9832.1


     Each Agency, office,  contractor  or  other person participating
 in a CEFCLA response activity should  maintain documents  related to
 the activity for a period  of not  less than  six  (6) years  after
 all response activities are finished  (consult Appendix C  for a
 list of these necessary documents ).,!£/
     The Age-ncy's Financial Management Division will maintain
 and periodically update the cost  expenditure tracking system for
 each site referred to above, so that  an  itemization of all costs
 attributable to a particular site  can be quickly obtained.  When
 a determination is made that a case should  be referred to the
 Department of '-sties for  filing  (or,  if necessary, during the
 time that the demand letter is being  prepared or the case is being
considered for referral),  a request can  be  made of the persons.
firms or agencies involved in a response activity for copies of
its records.  At that tine, a complete file of  all records involved
in the particular case can be compiled and  delivered.to DOJ, with
copies of the complete file aadc  available  to appropriate Regional
and Headquarters legal and technical  personnel.
157  The period of six years is necessary  because of the pos-
sTtility that the claim may not accrue upon the  first expenditure,
Additionally the litigation may be protracted; documents must
be kept for the term of the litigation.

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                                                      OSWER t 9822.1
                             -31-
V.   Note en Purposes and Use of This Memorandum
     The policy and procedures set forth herein, and internal
office procedures adopted puriuant hereto, are intended solely
for the guidance of attorneys and other employees of the O.S.
Environmental Protection Agency.  They are not intended to nor
do they constitute rule-making by the Agency, and may not be
relied upon to create a right or benefit, substantive or pro-
cedural, enforceable at law or in equity, by any person.  The
Agency may take any action at variance with the policies or
procedures contained in this memorandum, or which are not in
compliance with internal office procedures that nay be adopted
pursuant to these materials.
     We trust that this memorandum generally covers -the subject
of procedures to be involved in cost recovery actions under
CERCLA, but if you have any questions or problems involving this
subject matter, please call Russell B. Selman, Office of Legal
and Enforcement Policy, at ITS 426-7503.

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                                                      OSTCR I 9832.1
                            Appendix  A
                   Costs  Recoverable Under  CERCLA
      In order  to  identify"'records  which must  be developed and
maintained  for a  cost  recovery action, it  is  essential  to know
those  costs which  say  be  recovered from 4  responsible party.
Various sections  of CCRCLA provide for recovery of certain elements
of costs expended  for  site clean-up.  We have attempted below to
compile a list of  those  costs which are recoverable, and the
sections of CERCLA which  authorize recovery of those costs.
This list is very  general and not exclusive.
     The listed costs  a're in general  categories, using  language
directly from CERCLA,  and a determination will necessarily have
to be made  in each case whether a particular  expenditure is
within the categories  of  recoverable  costs.   In this regard, EPA's
position is that  the intent of Congress was to authorize recovery
of all costs directly  related to clean-up of  a site, and therefore
the costs should  be broadly construed to fall within these cate-
gories.
     Cost                               '         CERCLA Section
1.  Investigations, monitoring, surveys,       $$104(b), 10?(a)(1)(4)(A)
    testing, and other information-gathering   (providing for recovery
    necessary or appropriate to identify the   of costs for removal
    existence'and  extent  of the release or     actions, which, as
    threat thereof, the source and nature      defined  in f101(23)
    of the hazardous substances, pollutants    include actions taken
    or contaminants involved, and the extent   under 5104(b)).
    of danger to  the public health, welfare
    or the environment.
2.  Planning, legal, fiscal, economic          Same
    engineering, architectural, and
    other studies  or investigations

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                            Appendix A
                                                       QSWER » 9832.1
                               -ii-


    necessary or appropriate to plan
    and direct response actions.


3.  Planning, legal* fiscal* economic,         sane
    engineering, architectural and
    other services necessary to recover
    the cost of response actions.

4.  Planning, legal, fiscal, economic,         same
    engineering, architectural and
    other services necessary to enforce
    the provisions of the Act (CERCLA).
    (This could include costs incurred
    in prosecuting an immiment endanger-
    nent action under 5106).

5.  All costs of (A) removal and (B)           5107(•)(4)(A)
    remedial action 'incurred by the U.S.
    Government or a State not inconsis-
    tent with the NCP.   Actions for which
    such costs may be incurred are

    (A)  Removal Actions ($101(23)):

         (1)  the clean-up or removal of
              released  hazardous substances
              from the  environment;

         (2)  such actions as may be
              necessary taken in the event
              of the threat of release of
              hazardous substances-into the
              environment;

         (3)  such actions as'may be necessary
              to monitor, assess or evaluate
              the release or threat of release;

         (4)  the disposal of removed material;

         (5)  such other actions as may be
              necessary to prevent* minimize or
              mitigate  damage to public .health,
              welfare or the environment which
              may otherwise result from a
              release;

         (6)  any monitoring to assure actions performed
              by other  parties adquately protect public
              health, welfare and the environment,  and
              meet EPA  criteria;
                          n

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                       Appendix A                 OSWER * 9832.1

                         -iii-
     (7) specific examples contained in
         .(101(23) (without limitation):

         a.   security fencing or other
             measures to limit access;

         b.   provision of alternative
             water supplies;

         c.   temporary evacuation and housing
             of  threatened individuals

         d.   action taken under Sl04(b) of
             CERCLA;

         e.   any emergency assistance provided
             under the Disaster Relief Act  of
             1974.

(B)   Remedial Actions ($101(24)):

     (1)  actions consistent  with permanent
          remedy taken instead of or in
          addition to removal actions, to
          prevent or  minimize the release
          of  hazardous substances into the
          environment so that they do not
          migrate to  cause substantial danger
          to  present  or future public health,
          welfare or  the environment.

     (2)  Specific examples contained in «101(24)  (without
          limitation):

          (a) storage;

          (b) confinement

          •(c) perimeter protection using
              dikes, trenches or ditches;

          (d) clay cover;

          (•) neutralization;

          (f) cleanup, of released hazardous
              substances or  contaminated
              materials; .

          (g) recycling or reuser

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                                                    9832.1

                  Appendix A

                     -iv-


     (h)  diversion;

     (i)  destruction;

     (j)  segregation of reactive wastes

     (k)  dredging or excavation;

     (1)  repair or replacement of
          leaking containers;


     (m)  collection of leachate and runoff;

     (n)  on-site treatment or incineration;

     (o)  provision of alternative water
          supplies;

     (p)  any monitoring reasonably required
          to assure that such  actions protect
          public health, welfare and the
          environment;

     (q)  costs of permanent relocation of
          residents, businesses and community
          facilities (where relocation, alone
          or in combination with other factors,
          is more cost-effective than and'
          environmentally preferably to trans-
          portation, storage,  treatment or
          disposal off-site of the hazardous
          substances).

(3)   Remedial actions do net include:

     (a)  off-site transportation of hazardous
          substances)

     (b)  off-site storage, treatment or
          disposal of hazardous substances;

     unless it is determined that such actions  are
     (A) sort cost-effective than other remedial
     actions; (B) will create  new capacity to manage
     (in compliance with Subtitle C of RCRA) hazardous
     substances in addition to those at the affected
     site; or (C) are necessary to protect public
     health, welfare or the environment frrom a  prevent
     or potential'risk which may be created by  further
     exposure to the continued presence of the
     hazardous substances.

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                             Appendix A                  OSWER * 9832.1

                                -v-


 6.    Any other  necessary costs  of  response      $107 (a ) (4 ) (B }
      incurred by  any  other person  consis-
      tent with  the  NCP.   "Response"  actions
      include both "removal" and "remedial"
      actions  (<101(25>.   /Se-'liet of
      removal and  remedial actions  Above.)

  7.   Damages for  injury  to,  destruction  of,     5107 (a)(4)(C)
      or  loss of natural  resources, including
      the  reasonable cost of  assessing such
      injury destruction  or loss.   (See note,
      below)

      •Natural resources" include  ($101(16)):

                (a)  land;

                (b)  fish;

                (c)  wildlife;

                (d)  biota;

                («)  air;

                (ti  water;

                (g)  groundwater;

                (h)  drinking water supplies;

                (i)  other  such  resources belonging
                    to,  managed by, held in trust
                    by,  appertaining  to, or otherwise
                    controlled  by  the  United States,
                    any  state or local government, or
                    any  foreign government (includes
                    resources of the  Fishery Conser-
                    vation and Management Act of 1976).

NOTE:  CERCLA 5301(c) provides for the promulgation of regulations
not later than two years  after enactment of the Act for the
assessment of damages for  injury to destruction of or loss of
natural resources resulting fron a r«l«ase of a hazardous
substance.  See footnote  3  in the Memorandum for further
explanation on recovery  of  these damages.

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                                                          I 9832.1

                           Appendix B

                      (Modtl Demand Letter)


XY2 Corp.
Someplace, Start 00000

          Re:  Name,,  location of site

Dear Sir or Madam:

          On or about                , 198_, there were
releases and threatened releases into the environment of
hazardous substances  (and pollutants and contaminants) from
th* —._——. **cility located at or about ..
(In addition, there were releases and threatened releases of
pollutants and contaminants that nay present an imminent and
substantial danger to the public health or welfare.]

          [On or about          . 19_» EPA ?av« [oral] notice
to you                   (wnich w«s confirmed) by letter of
	, 19   , advising you regarding.the referenced
facility and that you are a party who may be liable for voney
expended by the government to take corrective action at the
facility.  CPA offered you the opportunity to discuss with EPA
your voluntarily taking action necessary to abate any releases
or threats of'releases of'.hazardous substances  [and polluants
and contaminants) from the facility.~~You did not.undertake
the necessary actions.]

          Zn accordance wici the Comprehensive Environmental
Response, Compensation and Liability Act (CE8CLA),  42 U.S.C.
$9601 et seq., (and other-authorities (insert where pr« CEftCLA
or non CERCLA expenditures>J the (State of           . pursuant
to an agreement with and funding by the (insert if State lead)}
United States Environmental Protection Agency (EPA undertook
response action using funds provided for such actions.  The
action began on or about '.     ..            and continued to on
or about                           EPA*s response action entailed
the (describe generally what was done).

          The cost of the response action [performed]  (caused
to be performed by EPA at the facility] (was] [is currently!
approximately S               .  (Insert the amount obligated
by the Agency to be expended on the site, not-the amount
actually expended according, to Agency records.)  [The Agency
anticipates expending additional funds in the future under
authority of CERCLA for additional response activity which the
Agency deems appropriate to be performed at the site.]  Enclosed
is a statement summarizing the expenditures to date.

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                                                           f 9832.1

          Information available to EPA  indicates anon; nth»r
things that you (chosse on* or more, of the bracketed clau«*«
as appropriate:)   fare/were at the time of the response
action the owner/operator of the facility] [were the owner/
operator of the facility at the time of disposal o* hazar-ous
substance* at the facility] (did, by contract, agreement or
otherwise, arrange for disposal or treatment, or arranged for
transport for disposal or treatment of hazardous substances
[and pollutants and contaminantsJat the facility (accepted
hazardous substances  [and pollutants and contaminants] for
transport to the facility which was selected by you).  Pursuan-
to the provisions of Section 107(a) of CERCLA [and other autho--
ities (insert where pollutants or contaminants involved and
where other Jaw involved)), we belitve that you are liable for
the payment of all costs expended on the site to thw Hazardous
Substance Response Trust Fund established pursuant to Section
221 of CERCLA, which  is administered by EPA.

          We hereby request that you [or a group of parties
potentially responsible for the site} make restitution by pay-
ment of the herein stated amount plus interest [together with
any sums hereafter expe-nded by the Agency on the site pursuant
to authority of CERCLAJ.   (The names of ether potentially
responsible parties receiving this request for payment are
enclosed with this letter to facilitate organization among
the identified parties concerning payment.]  If you  [or an
organized group of potentially responsible parties] desire to
discuss your liability with E£A,-please contact the person
named below in writing not later than thirty' (30) days after
the date of this letter.  We will otherwise assume that you
have declined to reimburse the Fund for the site expenditures
and will subsequently pursue civil litigation against you.

                                   Sincerely,
Contact Person:

(Name]
(Title]
[Address]

cc::  Enforcement Counsel
      Regional Counsel
      Seat* Agency

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                                                                     OSWER | 9832.1
 Appendix  C
      The  following pages constitute  a  search guide that nay be used by the
 >«gional-enforcement program in gathering  documentation to support a cost
-recovery  action.  The March guide feowt  t» a chart with four columns, headed
 as follow*:   •DDOJsent*, •Originator*,  *EPA Contact' and 'Regional rile
 Location'.•   All of the documents listed will probably not be available in aU
 cases,  nor will each one necessarily enhance the body of evidence in every cast.
 Zt sust be decided on a cast by^ase basis exactly which pieces of documentation
 should  be used as supporting evidence.  The search guide was neant to be an
 exhaustive list of documents that should be considered.  Zt is suggested that
 the persons conducting the  file search  for supporting docintntation pull out
 each document on the list if it is available.  Zt can be decided at a later tiae
 which of  the  documents are  useful as evidence given the facts of the particular
 case.
     Please note that the search guide  covers only documents that would be
 useful  in supporting the first three elements of proof discussed in this
 guidance: proof of the release, link between the party and the site and
 consistency with the HO>.   Cost documentation will be the subject of another
 guidance  document that is currently  under  development.
• The fourth column,  *Hegional  file  Location',  has neaning only  if  the Region
uses the filing  system described in  Appendix E<

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I. Evidence of • Rel
of th» Ttneat of a4- Releat
 • Notification Recotd
   putsuant to sec.
   1031 a) of COCLA
 • Notification Reootd
   putauant to Sec. lOlfc)
   of CERCLA
 • Recotd of notification
   of epA-HD-Beatgency
   Response Division,
   EPA Regional
   MmlnUttator or
   other EPA official

 • Compliant*
   Investigation
   Repott putauant to
   section 104llanoe Agency
• NCH (aee page 21, II.
  liullet 11}
• ntiiitdlal Baaponaet
  Diaoovmy/Hazatd
  Ranking Flle/Reglona/
  HO
• MIC
* EPA-HO-Owioancy Response
  Division Removal Response
  Pile
' tUaudlal Reaponeei
  Dl scovety/Hatard
  Ranking Pile
• Remedial Responset
  Dl scovet y/Hazatd
  Ranking Pile
  •Uhless otheiwlse noted, this assumes the docmgnts ate located In the Regional files
   and assunes the Regions are using the file ettuctute outlined In Append I« K.

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I. Evidence of •
or the Ihteat of a tolease (continued)
   DoctMent
      Originator
  EM contact
Probable Pile toot ton
   Motes ftoja gjhuna
   calls* correspondenoa,
   photogtaphs, or other
   fotia of randaa or
   Incidental observation
   Signed witness stats-
   (Rents (desctlblng the
   conditions leading
   up to the tvleass
   and the t«lease)
    • Oov*t. Officials
      (local. State,
      Pifcllc
    • Ouner/Dpetstor
      Facility
    • Bnployeea or
      ODntiactois assoc.
      w/ facility
    • nderal/Stats
      Invest loatot a
    • locml Officials
    • Frtltc
• EPA-Reglon, Enf./
  OoMpllanoe frojact
  Hanngef

• State Dlf./
  OoMpllanoa Agency

• Nimlclpal Oowetfment
  OCfeoe (e.g., p%M>llc
  Health or police Dept.)

• EPA-Region, Haste Mgt.
  Division PtoJ. Managet
• State Agency
 Iteaadlal iteaponsat
 Dlacovety/ Hacaid
 Ranking Pile
 Henedlal Responset
 iMscoweiy/ ftaxatd
 Ranking Pile

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  •"",
          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON, SC 104*0


                          AUG  29 1983


MEMORANDUM

SUBJECT:  Coordination  of  EPA  and  State  Actions  in CERCLA
          Cost  Recovery Negotiations and Litigation

FROM:     Courtney  Price  ^-C.*X
          Special Counsel  forBpfA'C*

          Lee Tnoma s          %^ ^
          Assistant Administrator  for"
            Solid Waste and Emergency Response

TO:       Regional  Administrators, Regions  1-X
          Regional  Counsels, Regions l-K
          Director, Office of  Intergovernmental  Liaison


     The clean-up of  hazardous waste disposal sites  under the

Comprehensive Environmental Response, Compensation,  and Liability

Act (CERCLA) involves payment  of monies  from  the Hazardous Substance

Response Fund (the  Fund) created by Section 211  of CERCLA to

individual States or  to contractors  to finance  clean-up activities.

In many cases,  the  State  in which  the site  is located will also

contribute its  own  funds to the site clean-up _!_/.  EPA and the State

may thereafter  negotiate with -or take judicial  action for recovery

of the amounts  expended by them against  the party or parties who
I/   Under CERCLA $104(c)(3),  the State  must  pay or  assure payment
of 10 percent of the cost  of remedial  action  and operations and
maintenance at a site and  at least  50  per  cent  of  the  cost of
all response actions at a  facility  which was  owned by-the State
or a subdivision at the time of  disposal of hazardous  substances.

     Current Agency policy allows CERCLA funding of  remedial
investigation, feasibility study, and  remedial  design  at privately
owned sites without a State cost-share.  Accordingly,  any cost-
share previously paid by  the State  (allowable State  services,
statutory credit or cash)  for  remedial investigations,  feasibility
studies, and remedial de'sign at  privately  owned sites  will b«»
applied toward the State's share of the  cost  for remedial constructi
at the site, see Kay 13,  1983  Memorandum from Lee  M.  Thomas.

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                              -2-


are legally responsible 2/.  In those cases, the question arises

whether the separate negotiations or judicial actions of EPA or

the State to recover their respective funds might, in some way,

prejudice the other's right to recoup its monies, and if so,

what actions might be taken to avoid such prejudicial effect.

      It may initially appear unreasonable to conceive that eithej

EPA or a State could take action which would interfere with the

other's right to recover monies expended for site clean-up.

However, the following points should be considered:

c    State as Agent -   EPA will frequently transfer  its share

     of clean-up funds to the State which will,  in turn, spend

     it on the site under the cooperative agreement with EPA.

     The cooperative agreement contains numerous protocols,

     procedures, and other standards with which  the State must

     comply to assure the quality of the site investigation and

     clean-up.  Because of EPA's control over these matters,

     adverse parties may argue that the State is EPA's agent or

     representative for the expenditure of the funds.  This

     misunderstanding.might be asserted as a defense  to recovery

     of remedial costs by a potentially responsible party.
2/    Further guidance on cost recovery procedures and  responsible
parties is contained in a forthcoming policy entitled,  "Cost
Recovery Actions under CERCLA."

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                                                             OSWER * 9832.


                             -3-

*    Collateral Estoppel - An adverse judgment  by a  court in an

     action by either EPA or a State on the  issue of recovery of

     funds expended on the site might be  held to collaterally

     estop the other governmental agency  from successfully bringing

     a subsequent action against that same party 3/«

*    Insolvency of Responsible Partyfs) - A  settlement or

     judgment by EPA or the State might exhaust the  available.

     resources of the responsible party(s),  leaving  the other

     governmental agency without possibility of a recovery.

     Regardless of the merits of arguments which may be made on

the foregoing considerations, in the interest of promoting

Federal-State relations, there are certain rights and  obligations

which should be clearly defined at the  outset of the relationship.

The Regions, in cooperation with OERR,  have  recognized the benefits

of identifying these interests by reflecting them in the  cooperative

agreements.  Accordingly, this memorandum does  not  require the

Regions to adopt any new procedures  or  change any existing coopera-

tive agreements.  Instead this document .presents the rationale

for drafting cooperative agreements  in  the manner prescribed by

OERR.
3/   See United States  v.  I.T.T.  Rayonier,  Inc.,  627 F.2d 996,
T9th Cir., 1980).

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                             -4-
THE COOPERATIVE AGREEMENT
1.   Negation of Agency in Cooperative Agreement
     The cooperative agreement should negate the principle that
the State is an agent for EPA.  This is important for both govern-
mental agencies for a number of reasons.  In the cooperative
agreement, EPA will necessarily require that the State observe
certain standards, procedures and protocols, such as in the
taking of samples, their chain-of-custody, analysis protocols,
and perhaps accounting procedures.  The need to specify sucn
procedures could be argued to constitute a right to control the
actions of the State, an indicia of a.n agency relationship.
Neither EPA nor the State should wish to encourage such an
argument because of the potential exposure to tort liability
as well as the possibility 'of complicating a cost-recovery effort.
Therefore, the imputation of an agency relationship between EPA
and the State should be negated by appropriate language in the
cooperative agreement.  Suggested language for such a provision
appears in the Appendix to this memorandum.

2.  Requirement for Notice of Settlement or Action
     The cooperative agreement between EPA and the State should
contain a provision that neither will initiate a cost recovery
proceeding or enter into .a settlement with the responsible party
except after ample written .notice in advance of the execution of
a settlement agreement or the filing of a suit.  The provision
prevents rushing by EPA and  the State to obtain a judgment against

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                                                         OSWER * 9832
                             -5-

or settlement with the responsible party, thereby gaining
a position of preference with respect to the assets of the
responsible party.
     Inclusion of such a provision in the cooperative agreement
is fair to both EPA and the State, in that neither may gain an
unexpected advantage to the assets of the responsible party by
separate negotiations of which the other may be unaware.
     Such a provision also provides a means whereby each party  to
the cooperative agreement may take separate independent action
to protect its interests, after having given the necessary notice,
if there are reasons to not engage in joint EPA-State negotiations
or file suits in  coordination with each other against the
responsible parties.  Suggested language  for such a provision
appears in the Appendix to this memorandum, and provides for
written notice not less than 30 days in advance of settlement or
initiation of a cost recovery action.

3.   Requirement  for Cooperation  and Coordination of
     Cost Recovery Efforts	
     The cooperative agreement should also provide that EPA and
the State will cooperate with each other  in efforts to recover
their respective  shares of the costs of response activities at  the
facility/ and will coordinate their  respective activities  and
resources in such efforts* including the  filing and coordination
of litigation for the recovery of costs and the use of evidence
and witnesses in  such suits.  This provision is desirable  because

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                             -6-

cost  recovery suits will  involve considerable data, documents
and witnesses from both EPA, the State  and  their contractors,
and close coordination between EPA and  the  State will be very
important to the efficient  and effective  resolution of those
suits.  Model language for  this provision also appears in the
Appendix.

4.    Requirement That Judicial Action Be  Taken
      in U.S. District Court                  _
      The cooperative agreement should also  provide  that any  suit
filed by either party to  the agreement  against any  third party for
recovery of response costs  to which  it  may  be entitled, shall be
brought in the U.S. District Court  for  the  judicial district  in
wh:ch the release or damages occurred,  or in which  the defendant
resides, may be fouod, or has his principal office  (S113(b)).
The purpose of this provision is to  avoid fragmenting the efforts
of EPA and the State between Federal court  (in which  EPA would
bring a suit), and State  court  (in which  the State  could bring a
cost  recovery suit under  any applicable State law.  See the
discussion of this point  in the section entitled  "Pending Cases",
infra).  Model language  for this provision  also appears in  the
.Appendix.

NON-JUDICIAL SETTLEMENT
      In the absence of an agency relationship between EPA and the
State, there is little possibility  that the State  could enter into
a separate agreement with the responsible party  (as distinguished

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                               _7_                         OSWER * 9832.



 from a Decree or Judgment) which could affect EPA's rights againsj

 the responsible party, other  than to drain off  that party's

 assets which might be available for payment of  a cos_t-recovery

 claim.   In  the case of a  responsible party with substantial assets,

 a separate  settlement by  the  State or EPA may not present a

 serious  problem to the other  party.  However, assuming EPA becomes

 aware of an impending settlement between the State and the

 responsible party(s) £/,  the  Agency should, before the settlement

 is finalized, determine the probable extent of  the responsible

 party's  financial ability  to  satisfy EPA's claim in addition to

 payment  of  the settlement  with the State _5/.

     In most cases, the responsible party will  probably wish

 to simultaneously settle  its  liability with both the State and EPA.

Collective  negotiation and settlement procedures involving the
4/   EPA should become aware of  any  impending  settlement by  the
S~tate with a responsible party assuming  there  is a provision  in
the cooperative agreement which  requires the State to notify
EPA in writing thirty days  in advance of any proposed settlement,
and the State complies with that agreement.

_5/   A determination of the financial ability  of a potentially
responsible party can be made by the Financial Management Division
of the Agency, or by use of a Financial  Assessment System which
has been developed by the Economic Analysis Division of the
Office of Policy Analysis of EPA.  This  system will provide  case-
by-case, inexpensive and defensible  estimates  of ability-to-pay
which will b« useful for settlement  consideration.  This system
requires * minimum of financial  .:,-•, ta which will usually be available
from ft Dun and Bradstreet report, a  Moody's listing, or an audited
financial statement.  When  that  information is not available, the
system will enable enforcement personnel to focus data requests
to that information necessary to perform a minimum financial  assess-
ment.  Any questions about  this  system and  its uses should be
directed to Kathy Summerlee, FTS 382-3077, or  David Erickson,
FTS 382-2764.

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                                                         OSWER * 9832.
                             -8-
-State, EPA, and the responsible parties should be encouraged
to avoid misunderstandings and to resolve all issues at the
same time.  However, there will undoubtedly be circumstances
under which the responsible party may believe that it would
be advantageous to settle with one claimant (either EPA or
the State) and not the other.  It is those cases where the
assets pf the potentially responsible party would be sub-
stantially depleted by the. settlement which could present
significant problems for each claimant.
     It should be recognized at the outset that, absent the
proposed notice and coordination agreements discussed above,
there is nothing to prevent the State or EPA  from settling
its claim in the absence and without the concurrence cf the
other.  Where such a settlement would place either the State
or EPA in a more advantageous position with regard to the
assers of the responsible party, problems could  arise which
could affect intergovernmental relations.  In those cases,
the following options are available to EPA:
1.   Should EPA determine that the State has  independently
entered into settlement negotiations with the responsible
party, EPA should contact the appropriate State  agency in an
effort to establish a joint settlement effort and strategy.
Simultaneously, EPA should notify the responsible party by
letter (if that has not already been done as  part of  the Agency's
cost recovery procedure), advising  it of the  Agency's claim, and
that no other person or entity  is authorized  to-negotiate  for  or

-------
                                                           OSWER * 9832.
                             -9-
otherwise represent the Agency  in respect to that claim.
At the same time, the Agency should  initiate an  investigation
into the financial resources of the  responsible  party to
determine whether there will be sufficient assets remaining
after the proposed State settlement  to satisfy EPA's claim.
That investigation can be carried out in the manner described
in footnote 5.
2.   If it is determined that the assets of the  responsible
party will likely be deplete- or substantially impaired by a
separate settlement with the State without provision being
made for EPA's claim, and if efforts to establish a joint
settlement effort with the State are not successful, then
cor.s iderat ion should be given to EPA's applying  to the appro-
priate U..S. District Court for  the appointment of a receiver
to operate or manage the assets of the. responsible party for
the benefi't of all creditors of that party.  This action,  if
taken in a timely manner, would prevent the responsible
party from distributing its assets in a preferential manner.
     However, the decision to attempt to forestall a State
settlement with a responsible party  should be made only after
serious consideration of all factors involved, including:
•    the amount of EPA's claim  which might be prejudiced;
•    the past relations between EPA  and the State agency
     involved in the negotiations;
'    the circumstances under which the State and the
     responsible party entered  into  the negotiations
     without the presence of EPA;

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                                                          OSNER * 9832.

                             -10-


0    the existence of any agreement between EPA and

     the State prohibiting such negotiations;

0    and any other factors which might bear upon the

     decision.

     While this action should be taken only as a last resort,

the Agency's responsibility to preserve and restore the Fund may

require such action.  As in other such actions, a decision to

seek the appointment of a receiver for the assets of a responsible

party will require the concurrence of the Special Counsel to the

Administrator for Enforcement.


PENDING CASES

     There are a number of cases in which States have already

initiated a suit against responsible parties,  and'EPA has

contributed or intends to contribute a portion of the clean-up

costs.   In such cases, what is the proper forum and the best

method in which to proceed?

     In the absence of an agreement with EPA to the contrary,

a State may, of course, proceed with an action in State court  for

cost recovery claim's bas.ed upon any applicable State law  6/.
6/   CERCLA S107(i) provides:   "Nothing  in  this paragraph  shall
affect or modify in any way-the obligations or  liability of  any
person under any provision of State or Federal  law,  including
common law, for damages,  injury or loss  resulting  from a release
of any hazardous substance or for removal or  remedial  action or
the costs of removal or remedial action  of  such hazardous
substance."

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                                                         OSWER I 9832.:
                             -11-


     States are also authorized to make claims under CERCLA for

the cost of response activities which they incurred at a site.

Section 107(a) of CERCLA, for example, provides for the liability

of past and present owners and operators of a facility, generators,

transporters  and others  for "all costs of removal or remedial

action incurred by the United States o_r a_ State not inconsistent

with the National Contingency Plan."  Many other sections of

CERCLA refer  to the right of the States to recover for their own

cos ts.


     However, §113(b) of CERCLA provides:

     "... the United States district courts shall have exclusive
     original jurisdiction over all controversies arising under
    .this Act, without regard to the citizenship of the parties
     or the amount in controversy.  Venue shall lie in any district
     in which the release or carnages occurred, or in which the
     defendant resides,  may "Se foun.d, or-has his principal offi

     We interpret this provision to mean that any claim made

by EPA, the State or any other person for recovery of  response

costs,  which  is based upon the-, provisions of CERCLA, must be

brought In the appropriate U.S. District Court, and may not

be asserted on behalf of EPA by a .State in a State court

action 7/.  Obviously, any claim asserted by EPA will  be based

upon CERCLA and will be  in U.S. District Court.  Likewise,  if
7/   In addition  to  the  restriction  of  5113(b),  there  are  additional
"reasons why the State  could  not  attempt collection  of  the  Federal
share of response  costs.. Under  CERCLA  SH2(c)(3)  and  28 USC  $516,
the U.S. Attorney  General is required to represent  EPA in  these
proceedings.  This may not be delegated to the  States,  and therefore
it is not possible to  authorize  the  States to attempt  collection
of the Federal share of  response costs  in a State  court proceeding,
even should it be  otherwise  appropriate.

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                             -12-

the State's claim against a third person for its share of the
costs relies in whole or in part upon CERCLA, then it too must
be brought in U.S. District Court.  A State may, therefore,
attempt recovery of its share of response costs in State
court only under some law or theory other than CERCLA.
    We also believe it highly important that EPA and the State
attempt to coordinate their respective claims because:
0    such actions will involve a substantial amount of technical
     data, documents and witnesses from both EPA and the State,
     and each party could derive the benefit of the other's
     evidence and witnesses;
8    coordination would avoid the necessity of maintaining two
     separate proceedings which would duplicate much of the sa~e
     effort and resources'-; and
8    coordination of the claims would avoid the issue of collateral
     estoppel discussed earlier in this memorandum.
We believe the States will be receptive to joint or cooperative
cost recovery actions with EPA for these reasons, and for the
additional reason that the legal authority for the States to
recover is probably much clearer under CERCLA than it may be
under the laws of most States.
     The following options, or some variance thereof, should
therefore be followed in those cases where EPA provides CERCLA

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                                                         QSWER t 9832.

                             -13-

funds under a cooperative agreement to a State which has a suii

pending in State court against the responsible party:

Option I:   EPA should require, as a condition of'payment cf

the CERCLA funds to the State, that the State will, within a

certain period of time (i.e., 30 days) after receipt of the

funds, dismiss without prejudice all claims for recovery or

reimbursement of any response costs at the site 8/  from any

action then pending in State court.  The provisions recommended

earlier in this Memorandum for inclusion in all cooperative

agreements should also be used 9/.

     It is not necessary to require that a single suit for cost

recovery be filed jointly by EPA and the State.   It may be a

more simple procedure, and avoid potential logistical problems,

for each party to file its own suit separately,•and  then regues-—^
_§/   Note that this does not necessarily require a complete
dismissal of the pending State court action.  This recognizes
that there may be other claims of  the State  involved  in  the
case, with which the State'may wish to continue in the State
court proceedings, and that the existence  of  counterclaims, by
the defendant on other issues may  prevent  the State from
effecting a complete dismissal of  the case.   The important
point is to eliminate all cost recovery claims  from the
State court proceedings.  Of course, if those are  the only
claims involved in the State case, a complete dismissal  of
the case would'be the desired result.

_9/   The Attorney General of the State should agree to or
concur in this provision of the cooperative  agreement, since
it affects pending litigation in which the Attorney General
is representing the State.  Such agreement or concurrence may
be limited to the particular provision requiring dismissal  of
the case, and may be evidenced by  an endorsement to the
cooperative agreement or by separate  letter  signed by the
Attorney General or .his representative.

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                                                         OSWER * 9832.:




                             -14-





the U.S. District Court before which they are pending to consoli-



date proceedings on the suits pursuant to Rule 42 of the Federal



Rules of Civil Procedure.



     Note also that this option does not affirmatively require



that the State refile its claim in Federal court, but only



that if the claim is refiled, it will be in Federal court.   The



requirement for cooperation and coordination between EPA and



the State will also apply to and encourage joint negotiations



with the responsible parties before filing of a. suit in Federal



court,  as well as to subsequent litigation in Federal court.



Option II;     It is conceivable that a State may wish to continue



to pursue its cost recovery claim in State court, or may not



wish to coordinate its efforts with EPA.  In such event, EPA



should not,  even if it could, attempt to require it to do other-



wise.   However, because collateral estoppel could be raised



against EPA by the responsible party(s) in event of an unfavorable



result in State court proceedings/ EPA should, as a condition



of payment of the CERCLA funds, require that the State,



within a specified time, dismiss without prejudice or omit



from any action then pending or which it may subsequently



file in State court any claim for recovery of response costs



which in the opinion of EPA, are or may be based upon CERCLA,



or any law, regulation or authority other than that which



may exist under the laws of that State 1QA
10/  See comment at footnote  9.

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                                                         OSWER # 9832.
                             -15-
     EPA should strongly urge the States with which it enters
into cooperate agreements to accept Option I, since it win
result in much greater effectiveness and cost-efficiency in
recovery actions.  Option II should be adopted only after
all efforts to persuade the j ia-.a have failed.

Note on Purpose and Use of this Memorandum
     The policy and procedures set forth herein, and internal
office procedures adopted pursuant hereto, are intended solely
for the guidance of attorneys and other employees of the U.S.
Environmental Protection Agency.  They are not intended to nor
do they constitute rule-making by the Agency, and may not be
relied upon to create a right or benefit, substantive or pro-
cedural, enforceable at law or in equity, by  any person.  The
Agency -may take any action at varience with  the policies or
procedures contained in this memorandum, or which are not in
compliance with internal office procedures that may be adopted
pursuant to these materials.
     We recognize that this memorandum contains subject
matter which relates to sensitive areas of the Federal-State
relationship.  Nothing contained herein is intended to  imply
bad faith or improper motive on the part of any State or
agency thereof, and no such interpretation or construction of
any provision herein should be made.  This memorandum attempts to
recognize that in the normal course of EPA-State relations,
occasions arise in which the interests of EPA and the State  may
not be identical, and it is our  intent to anticipate  and

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                             -16-





prepare for such occasions so that they can be approached in



a rational, planned manner to minimize further potential



impact on the relationship.



     If you have any questions or problems concerning any matter



contained herein, please call Russell B.  Selnan at FTS 426-7503.





Attachment

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                                                         OSTCR t 9832.2
                            APPENDIX


     Under  CERCLA,  both  EPA and  affected  States  can  institute
enforcement actions  against and/or negotiations  with  parties
responsible for  priority waste sites.   When'this occurs, a
settlement  or  legal  action  by either party  could potentially
impede or even negate  *he c la ins of the other  for rscc"«ry -•?
funds expended at  the  site. Obligations, rights, and pro-
cedures  for litigation must be defined  as early  as possible
in  the working relationship between EPA and  the  State to avoid
this eventuality.   Therefore, provisions  concerning cost recovery
should be in the Cooperative Agreement  application.   Specific
provisions  that  address  different enforcement  conditions are
presented below.   These  provisions should be reviewed, discussed
with the RSPO, and  included in the application,  as appropriate.
Please refer to  the  text of the  Memorandum  for guidance on
the use of  these provisions.

1.   Disclaimer of  Agency Relationship

     Nothing contained in this Agreement  shall be construed to
create, either expressly or by implicaation, the relationship
of agency between  EPA  and the State.  Any standards,  procedures
or protocols prescribed  in  this  Agreement to be  followed by
the State during the performance of its obligations  under this
Agreement are  for.  assurance of the quality  of  the final product
of'the actions contemplated by this Agreement, and do not
constitute  a right  to  control the actions of the State.  EPA
(including  its employees and contractors) is not authorized to
represent or act on  behalf  of the State in  any matter relating
to the subject matter  of this Agreement,  and the State (including
its employees  and  contractors) Is not authorized to represent or
act on behalf  of EPA in  any matter related  to  the subject matter
of this Agreement.  Neither EPA  nor the State  shall be liable
for the contracts,  acts, errors  or omissions of  the agents,
employees or contractors of the  other party  entered  into,
committed or performed with respect to  or in the performance
of this Agreement.

2.   Notice of Intent  to Settle  or Initiate  Proceedings

     EPA and the State agree that, with respect  to the claims
that each may  be entitled to assert against  any  third person
(herein referred to  as the  "responsible party",  whether one or
more) for reimbursement  of  any services,  materials, monies or
other thing of value expended by EPA or the  State for response
activity at sit* described  herein, neither  EPA nor the State
will enter  into a  settlement with or initiate  a  judicial or
administrative proceeding against a responsible  party for the

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                                                   OSWER * 9832.2
                           Appendix
                              ii
recovery of such sums except after having given notice in
writing to the other party to this Agreement not less thai
thirty  (30) days in advance of the date of the proposed
settlement or commencement of the proposed judicial or
administrative proceedings.  Neither party to this Agreement
shall attempt to negotiate for nor collect reimbursement of
any response costs on behalf of the other party, and
authority to do so is hereby expressly negated and denied.

3.   Cooperation and Coordination in Cost Recovery Efforts

     EPA and the State agree that they will cooperate and
coordinate in efforts to recover their respective costs of
response actions taken at the site described herein, including
the negotiation of settlement and the filing and management
of any  judicial actions agair.st potent ial .third parties.  This
shall include coordination in the use of evidence and witnesses
available to each in the preparation and presentation of any
cost recovery action, excepting any documents or information
which may be confidential under the provisions of any applicable
State or Federal law or regulation.

4.   Judicial Action in U.S. District Court

     EPA and the-State agree 'that judicial action taken by
either party'against a potentially responsible party pursuant
to CERCLA for recovery of any sums expended  in response
actions at the site described herein shall be filed in the
United States District Court for the judicial district in
which the site described in this Agreement is located, or in
such other judicial district of the United States District
Courts as may be authorized by section 113 of CERCLA, and
agreed to in writing by the parties of this Agreement.

5.   Litigation Under CERCLA Sections106 and 107

     The award of this Agreement does .not constitute a waiver
of EPA's right to bring an action against any person or persons
for liability under sections 106 or 107 of the Comprehensive
Environmental Response, Compensation, and Liability Act  (CERCLA),
or any other statutory provision or .common law.

6.   Sharing Recovered Funds with EPA

     Any' recovery achieved by the State pursuant to settlement,
judgment or consent decree or any action against any of  the
responsible parties will be shared with EPA  in  proportion  to  EPA's
contribution to the site cleanup under CERCLA.

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                              QSWER * 9832.1
APPENLIX
   iii
                                   01
 7.   Dismissal By  State of Pending Cost Recovery Action - Opti

     The State does hereby agree  that  it will, not  later than
 thirty  (30) days after the date of this Agreement,~cause to De
 dismissed, without prejudice to any subsequent refiling, any
 and  all claims of  the State  (or any Agency thereof) in the
 case of "(State or Agency) v.  (defendant), now pending in the
 (Circuit, Chancery> etc. ) Court of 	,
 Docket No. 	• for recovery  of any services, materials,
 monies or other thing of v?ije expended or to be expended on
 the  site described in this Agreement.  Any subsequent refiling
 of said claims by  the State  or any agency thereof will be in
 accordance with the provisions of this Agreement.

 (See comment at footnote 9 of Memorandum regarding  State
 Attorney General concurrence with this provision.)

 8.   Dismissal By State of Pending Cost Recovery Action - Option II

     The State does hereby agree  that  it will, not  later than
 thirty (30) days after the date of this Agreement,  cause to be
 dismissed, without prejudice to any subsequent refiling, any and
 all  claims of the State (or  any Agency thereof)  in  the case of
 "(State or Agency) v. (defendant), now pending in  the Docket No.
	, for recovery of any services, materials, monies or'
 other thing of value expended or  to be expended on  the site
 described in'this Agreement which are  based or rely,  in whole
 or in part, upon the provisions of the Comprehensive  Environments".
 Response, Compensation, and  Liability Act of 1980.  Any subsequent
 refiling of said claims by the State will be in accordance with
 the provisions of  this Agreement.

 (See comment at footnote 9 of Memorandum regarding  State
Attorney General concurrence with this provision.)

 9.   Emergency Response Action

     It may in the course of conducting the remedial  activities
 covered by the Cooperative Agreement*  become necessary to
 initiate emergency response  actions at the site.  The Cooperative
Agreement application should contain a provision acknowledging
 this eventuality and dealing with the  effect any such emergency
 actions will have upon the remedial project.  The provision
 below, or its equivalent, may be  used  in the application for  this
purpose:

          Any emergency response  activities conducted
          pursuant to the National Contingency Plan,
          40 CFR section 300.65,  shall not be restricted
          by the terms of this Agreement.  EPA and  the
          State may jointly  suspend or modify the  remedial
          activities in the  SOW of this Agreement  during
          and subsequent to  necessary  emergency  response
          actions.

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                                              OSWER *  9833.0
' S S : •

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II.    Requirements  for  Issuance  and  Scope
       c: Sl^&i'a" .-.--ir. istrst: v«  Orders	4

       ;..  i-icCsS.-ity  for  "determination"	5

       5.  Necessity  for  Actual cr T.ure3ie-«"2
           Release  o* -Hazardous Substance	6

       C.  Necessity'that Release or  Threat
           of Release be  Frcrr.  a Facility	7

       r.  Necessity  for  Exister.ee of li-jri ner.t
           a.-.: Sues tar.t :a_  Enhancement^	s

       £.  Notice tc Affrctec  States	:....'}

III.   Persons to Whc:-i an Order Jay Ee  Issued	1C

IV.    Cr:ter:s  for  Issuance of $106  Orders	11

       A.  Responsible Parties' Financial  Status  	  12

       E.  Nur.rer of Responsible  Parties  Subject  to
           the Order	13

       C.  Specificity of the  Necessary  Response  Action.  .  14

       D.  Acency's  Readiness  to  Litigate  the  Merits
           of tr.e Order	  16

       E.  Competing Considerations.  ...'..	' .  16

V.     Orders Relating to Removals and Remedial Actions.  .  17

       A.  Immediate Removals	I"7

       B.  Planned  Removals and Remedial  Actions  	  19

VI.    Procedures for Issuance of $106 Orders	20

       A.  Planned  Removals and .Remedial  Actions	21

       B.  Immediate Removals	21

VII.   Opportunity  to Confer	22

       A.  Planned  Ren-.ovfils and Remedial  Actions	22

       S.  Emergency Situations.	23

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       C.   Icr.fererce  rrccecjres .............  22
                      ...........  .  .......  24

VIII.  Proced.-re  if  Order Not Obeyed ..."  ........  25

IX.    Note  en  Purpose  ani Use of This Memorandum .....  26
Appendix A:  N'rt if icat ior. Letter
Ap;:*--:* =:  S=-.;le  §::£. = '  Air.:.-.:stra;ive Orc=r

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        I.
                           WASHINGTON! OCJO««0
S'JfaJECT:
Guidance Mer.crc-~.-ur on Vse ar.d  Issuance  of
Administrative Grd
-------
e-ii-jermer.t  tc  the public health  or  welfare  cr  the er.virc-.T.srt
CeCduad of an actual cr  threatened re.ease  of  a  hazardous
substance from a facility."  A fir.? net exceeding  55,000 per
day may be imposed for willful violation, failure  or  refusal
to comply with a S106(a) Order (Order)/ and punitive  damages
of up  to three times the cost of clean-up of  the site may be
imposed under $107{c)(3) for failure/ without  sufficient cause,
to properly provide removal or remedial action pursuant to such
an Order.  In view of the magnitude of these  penalties, the
Agency expects that the  regulated  community will conply with
administrative Orders.  At the same time, the  Agency's obliga-
tion is tc ensure that Orders are  properly  issued.
     It is the current policy of EPA  that,  whenever possible,
parties who have caused  or contributed to a release or a threat
of a release of hazardous substances  at & site should.
rectify the problems at  the site.  This action is  necessary
to ensure that the Agency efficiently manages  the  limited funds
available under CERCLA and to ensure  that the  maximum number of
sites are addressed.
     Accordingly, after  the Agency discovers a site and in advance
of completing a Remedial Investigation and  Feasibility Study (RI/FS),
(and has conducted an endangerment assessment, or  their, equiva-
lent), responsible parties normally will be sent a notice letter
requesting them to clean up the site.  Following completion of the
feasibility study/ the Agency normally engages in  discussions with

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responsible parties  in  ar.  attempt  to  octein promptly the sTre*-
rer.t cf such parties  tc vclur.tarily undertake the necessa-v
respcr.se acticr.s.  If tr.e  discussions  are  successful,  the ter=is
of tne agreement will be embodied  in  a judicial  consent decree
or a $106 administrative consent Order.
     In circurr.star.ces where  tne Agency wishes tc cc-ntpei a responsible
party tc undertake the  response actions,  including instances where
no settlement can be  reached,  the  Agency will consider issuing a
unilateral S1C5 Order in accordance with  this guidance.
     The ad.T.i.-.istrative  erfcrcerent authority .is an ir.pcrt?r.t
cer.pcr.ent of t.-.e Agency's  enforcement  program authorized ur.der
CERCLA.   This guidance  is  being issued to  assist the regional
offices ir. developing and  maintaining  an  effective CrRCLA adr.ir.i-
strstive enf:rcement  program.  The effectiveness of the prcgr'an
will be enhanced as site remedies  are  implemented by Respondents
in compliance with administrative  orders,  end as enforcement of
Orders with whicn Respondents  are  not  in  compliance is success-
fully and expeditiously pursued by EPA.   The Agency will
aggressively defend judicial challenges  to Orders and  enforce
instances of non-compliance  to validate  the CERCLA "administrative
enforcement program.  Regional offices should issue Orders consistent
with the criteria and procedures contained in this guidance to ensure
the legal sufficiency of the program.
     VThe $106 administrative order authority provides  strong incen-
tives for Respondents to undertake expediticusly response actions
deemed necessary by E?A to ensure  protection of  public health or

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                               -4-
weifare or the environment.  Therefore, Regional  offices are  -jrr^
to ccnsidsr the use or ur.ilitsril CERCLA  sctr.ir.istTstivs crie~s
ir. every case where compelling er.for:e.7.€nt  authority  is n&ces-
»ary.  Criteria are provided herein  tc assist  regional offices
in determining whether Orders are appropriate  in  any  case.  It
is essential that a balanced CERCLA  enforcement program is
implemented by EPA, combining administrative and  judicial enforce-
ment authorites, to ensure protection of  health and the ervirrr-
ment from tre hazards of releases or threats of releases cf
hazardous subst.5T.res.
II.   Rec:uirercent.s_ for Issuance ar.d Scope  of Sectisr. 106 CEPCLA
     Orders
     A comparison of S106(a) and S~OC3 of.the  Resource Conser-
vation and Recovery Act  (RCRA) reveals similarities in the r-'o
sections/ and therefore many of the  criteria for  issuance cf  e
ST003 Qrier also apply to §106 Orders.Ji/  In many situations,
either Order would be appropriate.   Where the  hazardous sub-
stances are also "hazardous waste" under  RCRA, the Order should
cite the authority of both sections.

     Section 106(a) of CERCLA provides as follows:
     In addition to any-other action taken  by  a State
     or local government, when the President determines
     that there nay be an imminent and substantial
     endangerment to the public health or welfare or
     the environment because of an actual or threatened
ITGuidance on the use of RCRA 57003 administrative orders
may be found in a memorandum entitled,  "Issuance of Admini-
strative Orders under Section 7003 of the Resource.Conser-
vation and Recovery Act" dated September.il,  1981.

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      release  cf  a  r.azsrcc'js susstar.ce fror a facility,
      he  r?yrec-ire  the Attorney General cf the United
      C * » » • e  * *•* ee^i<^o * V T*1* ^o 1 ^ • «• » c t*i»if Ka V^AS* *c e m ^«,
      to  ar>et«  sue.-, cancer cr threat...  The President
      r.ay  also, after  not ire to  the affected State, take
      s-crj scticr. i.r.c«r tr.ii scciic." inCiwC_rvj / iut net
      limited  tor  iss'Jir.s such crcers as r.ay bt ::-^c
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of  s -3Z2T-:•. =  ?..---»r;-•'  frc- » facility.   A "-ac«-ric'jE

susstanc,?"  is defined  in Section 101 (]4)  of CERCLA, ar.ri is

generallv any substance, waste or pollutant designated pur-



Ac-, Sect'.ni  3--Jl cf RC*-.,  Seer icn 112 of the Clean Air Ac:

Sect:or, ~ :: TSCA. cr  S-r-.-tio-  122 of  CE'CLA.  (Cr-j.-ie oil,
are exe-oteri  frcr ststjtcry  c

     i>'ne trier  a  reies.se  fro-n  a  facility is ''actua; " or " tr.re-£:
-------
wnicr. is ebcut to overflew  because  cf  heavy  rsinfall,  rrese-.t

ctvicus threats c.f a release.  A.  thi-eai" is el*o  presented cv

ccrrcii"; cr leaking drvr.s  ccr.t5ir.inc  ir.cc.r.petitle wastes r.ir.-rle?

ir. a ccr-Tor. area.  Accordinglyr the  deterr.inaticr.  of  whether a

"threat" cf a release warrants issuance  cf an  Order is  a j'Jrtrr-er.t

decision to be made on a case-by-case  basis.

     The nature cf both the hazardous  substances present at the

site ar.c the release cr threat cf release should be set forth  as

findings in the crcer, together with the  bsses  for such findings.

     C.   Necsssitv Th£t Helease or  Threat cf  Release  ic
         Frcr. a Tacil ity

     The release cr threat  of release  jnust.be  frcn a  "facility,"

which is defir.ec ir. CIP.C1A  §101(9)  as:

     (A) any building, structure, installation,  equiprrent,
     pipe cr pipeline (including any pipe into a sewer  cr
     publically owned -treatment works),  well,  pit,  pond,
     lagoon, inpoundnvent, cJit-ch,  landfill, storage container,
     motor vehicle, rolling stock,  or  aircraft,  or (B)  any
     site or area where a hazardous  substance  has  r>een
     deposited, stored, disposed of  or placed,  or  otherwise
     come to be located; but does not  include  any  consumer
     product in consumer use or any  vessel  (a  watercraft or
     other contrivance used, cr capable  of being used,  as a
     means of transportation on water).

     This definition of "facility"  includes  on-shore  or off-shore

sites,  including land transportation facilities, frcm which

releases or threats might originate.   The Order roust  specify

the physical location that  is  the source  of  the  release.

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                                                          OSWER f 9833.C
                                -8-
     D.  Necessity  for Exlstqrce  cf Irr'ir.'gr.t sr.d Subs tar : ial
     iviier.ce presented  to  5-p?crt the issuance of a SlCoial
order must snow  "that th»re w.ey be an  imminent and substantial
endangemer.t" to ?-oiic  heaitn  or welfare cr the environment.
     The words ".-nay be"  indicate tr.at  Congress established a
standard of proof  th&t does not require a certainty.   The evidence
need net der.onstrste that an irrjniner.t  and substantial endanc.er:r.er.t
to public health or the  environment definitely exists.   Iristesd,
an Order may be  issued if there is sound reason to believe that
such an endar.gerrient nay exist.
     Evidence cf actual  hara is r.ct rscuirad.   As the Court, stated
in Ethyl Cert:, v. JT?A, construing an endansennent provision in t'r.e
Clean A.i'r Act:-
          The meaning of "endanger" is not disputed.  . Ca.se
          law and  dictionary definition agree  that endarrger
          means  something less  than actual har^i.  When one
          is endangered, harm is threatened; no actual injury
          need over occur.   (541 F.2d  i at 13, footnotes omittec,
          original emphasis,  D.C.  Cir. , cert.  den. 426 U.S. 941
          (1976). )
     It should also, be noted while the risk of harm must be
imminent in order  for the Agency to act under  5106, the harm
itself need not  be.  (See the legislative history to the
"imminent and substantial endangerment" provision of 51431 of the
Safe Drinking Water Act, H.  Rpt. 93-1185 at 35-36.)  For example,
EPA could act if there exists a likelihood that contaminants
might be introduced into a  water supply which  could cause
damage after a period of latency.   One must judge the risk or

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                                                             OSWER « 9833.0
li-.elihcc:  ~r  t.-.e r.srr by sx2-i.-.:r.=  the  factual c:rcurstar.c = s,
irciuiinc,  Dut r.rt j;rr;:ted to:  I)  nature and ar.ou-,t cf the
•••^•^•-^••c  e-j *r-•»-.»£ , »* -^^ • -_-t — .  2 >  tr\ ^  **^*"— ^i".?1  for e v"* ^^'_' r s ^c
hur,3~s  or  the  envircr.rer.t tc  the  substance,  ar.d 2j the known
cr s.spectc-c  effect c: the s-.-.stance  cr.  hur.ans  or that part
of the  envircr.r.er.t subject to  exposure  to  the substance.
     Legal  analyses cf the concept cf  irr.T.iner.t  ancJ suh-stsntial
er.ia-.^err.trr.t  c;r. alsc  be- fc-.r.i  ir.  Peserve  '•'.:-.:-; Co. v. E?A,
51n F.2d 4?:  (eth C.r. I?"); V.S. v.  Vertac Cher.icel Cc. et al,
485 r.£u-p.  e~:  ,'-.'.  Arr.. 19ED;;  U.S.  v.   Sclve-.ts Recovery
Service, 496  F.   Supp. 112?  (D. Conn.  19£2); U.S. v. Midwest
Sclver.t Pe:cverv, 
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                                                         OSWER # 9833.0

                               -10-
aay arise, however,  where  rapid response at a site is necessary.
I- s-.-c.".  cssss,  ior-Ji.-.ca  of -r.  Crd=r -.ay fillcv ar, abbreviate
notice period or  even  a  telephone  call race by EPA to the
Director of  the agency responsible for environmental protecticr:
in the affected state.   Written cor.firmaticr. must fallow svch
telephone notice.
     As  indicated  above, the notification should be directed tc
the Director ef the  stats  igency havinc j-jrisiicticr. ever
hazardous waste r.atters.   A s'-g-ested  fcrr. for a notification
letter is attached to  this r.ercrancur.  as Appendix A.  This
fern also prsvides the format  for  or?l notice.
     An  "affected state" is interpreted to be the state -herr
the facility is located  frorr which the discharge is btir.g
released cr threatens  to be re lea-sec,  and in whicr. the response
activity required by -the prcposec*  artfer will be taken.  In aar-
cases, this may involve  more than  one  state,  such as where the
facility is located  near the border of a state and the
hazardous substances have  migrated from the facility located
in one state into ar.jther  state (s).  In those cases, all of
the states in which  the  hazardous  substances  are found and in
which response activity  may be  performed pursuant to the order
should be notified.

III. ^Persons To Whom an  Order May  Be Issued
     Section 106 does  not  specify  any  person  or persons to whom
an Order may be issued,  but permits the issuance of "such orders

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                                                            OSWER « 9633.0
                                a. J.
                  '.'•••    £;"ic~  104,'iiJ,  hcwev2r,  72f2rs to the
"cvrer or operator" cr  'other  responsible  party"  as  the  persons
t*j whom  tr:« Agency coclJ  look  to  oewc™.ine whether c-lco"i-up of
a site will be dor.e properly before  expending  CERC1A funds.
Section  107;a), designating those who  shall  be liable for
response costs, spec'iiier. present owners  anc operators cf  a
facility, persons who were owners and  operators at the time
of disposal of a hazardous substance,  and  generators  and certain
transpor-: rr •-•.-,:, tccorcir.c to available  evidence, contributes
hazardous substances to the facility.   It  follows  that those
sar.e persons could be recipients  of  an Order  issued  under
Section 105(a), !s«e U.S. v. Dutboarc  Marine Corp.,  556  F.  Sup?.
54,  57 iS.D. III. 19S2).  In addition, in  appropriate cases,
it may be possiole to issue orders to  parties  other  than
those listed in Section 107
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                                                            OSWER * 9833.0
                               -12-
     1ns  tne.-ne  condor,  to tnese factors is tnst Orders  s
se  iss.ec  :r.  ti-.rsr  sit'jatirr.s :r •-•-.::.-. rcrzliar.cs  vith :.'-.;
terrs  cf  the  Order  is  fsisirie, i.s., '..-hsre  t.w.s Bespcr.ie-rs
ar&  i.r. a  p^siiicn  co  perf-rr. trie oroer*;1 response  actions
w-ithir. spscifiei ti.r.e  p»rir>cs.  r/.:s cses no-: r«jr  £.".-. nus-.
r.ake a pre-issua.-.re ceisrr.ir.-ricn t.'ia* Respcncerts  will  con-
ply with  an Order,  but rather that compliance is practicaaie.
If the A;er.cy does  not anticipate compliance with  an Order  it
is considerir,;  issuir.;,  the use cf the Order r.ay serve or.ly  to
delay  direct  injunct:ve action under 5106 or the  initiation  cf
Fur.:-:" ir.ance-J response.   On the other hand,  the Agency nay  wisr.
to issue  an Order  ir.  any situation where the needed response  a;t:-7r.
and the liability  t.nerefcr are clear and straight-forward,  so
that re*us*I  to conply with the terr.s-cf 'the Order  would r,?».,  irr
all probability, be with **u.fficient cause"  (CERCLA SlC7(c)(3)).
Such refusal  would  render cfr* Respondent liable for civil penalties
or punitive damages in the event of federal cleanup.
     A.  Responsible Parties' Financial Status
     Before an  administrative order requiring remedial work
is issued, the Agency  should assess, to the extent  possible,
whether the responsible  party, has sufficient financial resources
to comply with  the Order.   Financial information is available
from' several  sources:
     •  Agency  files -contain financial information
        collected as part  of the identification of
        parties responsible for the hazards posed

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                                                         OSWER « 9833.0
        oy  sites  en  the  National Priorities List.
      8  The Securities  ar.^  Ixcr. s~g» Ccrr.iss icn. -'SEC)  recuires
        publicly  tr^iec  ccrtpj.-.ies to sutr.it detailed  fir.arciil
                                                        «
        statements.  This  information is puoiiciy  available.
        '.Consult  NEIC'S  .T.iT.ual  entitled  "Identifying  Respcr.sisle
        Parties"  for additional information on obtaining  SEC  files
      •  Responsible  parties  may submit  financial information
        to  the Agency during discussions or negotiations  held
        prior to  the issuance of an Crcer.
      In addition, NEIC car. provide  further information en
Respondents  fina.-.cial states.
      B.  Number of Responsible  Parties  Subject to  the Order
      For two primary reasons, the success of Orders  fcr
remedial action is enhanced  where there  are relatively few
responsible parties.
      1) Coordination of  Response' Action
      An Order issued to  multiple Respondents who are  jointly
and severally liable generally  will not  allocate individual
clean up responsibilities.V Instead,  the .Order will require
the same response action to  be  conducted by each responsible
party.  Multiple  parties must organize and coordinate their
response to ensure compliance with  the Order's requirements.
Thus, compliance  with Orders .may depend  upon group agreement
4/  However, the Agency may  issue  an Order  to  a Respondent
"requiring a response to a discrete, separable  aspect  of  the
hazard at a site, notwithstanding  the  existence of  other
responsible parties or other  less  divisible  problem areas.

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                                                           OSWER * 9833.0
on *scr. r,cr.Ccr's share  c:  the  response cos:.   In a large groc-
er resporside  parties,  ai nay oe difficult for tne group to
develop a consensus on  individual liability end perfom response
activities  as quickly as  r.scasstry to ij&t» :rr,:r;iner.t hazard
ccnditirr.s  at a site.  •Accordingly,  issuing Orders tc all respon-
sible parties nay not be  appropriate where there are a large
nur.ber or parties who are unlikely to agree on a concerted respor.se.
Instead, the Agency will  pursue judicial  remedies or consider
issuing Orders  to a selected subset  of responsible parties.
     Even in situations where  Orders are  issued to a larce r-jrrber
of parti'es, Agency policy, which  should be reflected in the
terr.s of the Order, is  that each  Respondent is individually
liable for  cor.pliar.ee with the Order's requirements.   Individual
l;«cility also  extends  to penalties  and punitive dsr.a.ges imposed
by CERCLA for failure to  cor.ply with the  Order.
     2) Superris ior.
     After  an Order is  issued,  the Agency conducts compliance
monitoring  at the site  to ensure  that responsible parties conply
with the terms  of the Order.   Although no maximum number of
responsible parties can be specified as optimum, it is clear that
the Agency's oversight  responsibility is  most .effectively accom-
plished where there are a limited number  of responsible parties.
     C.  Specificity of the Necessary Response Action
     In order to minimize the  potential for confusion between
Respondents and the Agency concerning the required response
action, Orders should be used  in  situations where the nature
of the required response  action has  been  relatively precisely

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                                -15-
 ident:f;ec.   Orders' a re normally oecter suited  to na
                                                            "
 act:=r.s  sue.-.  is  pla.-.r.ir.;.   Ct.k.erv;ss it r.iy is difficult fcr  the



.Age'ncy  to  supervise cerplier.ce activities, ar.c for resocr.siMe



 parties  to re as.-. a;reener.: on a corpiiance plan.  In west cases,



 infonna zicr! sufficient to  describe the required respcns* actions



 will  De  generated! by the RI/FS.



      An  Drier should cor.tair. the following elsnents  (see



 Append i.x 5 / •'



      0  The steps the Respondent nust take to- ccr.pl y with



         the Order?



      •  The effective ca*.e of the Order;



      c  A  ir.ar.cst cry tir.e-table fir cereplet ior,



        of renedial work;  ar.c/ where "appropriate,



      *  A  stateme-c tc the effect that other actions or orders



        may follow.



      Specific remedial action Orders benefit both the Agency  and



 responsible parties.  Responsible parties are provided clearly



 defined  compliance standards which will facilitate agreement



 among the  responsible parties on a remedial plan.  If the



 responsible parties xh*n determine that the remedial work is



 best  accomplished by a third party contractor/ the Order provides



 a  basis  for their contract negotiations.

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     S;*c;fiC Crcsrs  ter.^fit t-ne A~er.cy by rsducino  the  cif f ic'.ir
of supervisicr. and  ;ucic:ai  enforcement.  In noncorr.pliance  situa-
ti~~.s>  i.k.« A^s.'.c/ ~.aj' 5c«.-.  cc *r,5crci ar, Crcsr in cc«>*>>  A
s~ft'""*ic C^isr ""r.'-'iies  t.1".^  ccjrt »'ith .-./~eTC"~irt. lc-Ists z jZi~~
cares sy vr.;c:. ts .:«£?«  t.".*  respcnsiilr party's nr.-.-cc-i. 1 isnce
with its terns.  Therefore,  £?A should make every eff&rt  to
clearly crticu.ate  tre  response activities required  by an OrSer.
     2i.  Agency's Readiness  to Litigate the Merits of the Ordl_»r
     After the Ager-icy iss-jes an Order, the respondent nay seek
;-r;cia: review  :c  stay  f.e  Crier.   Respondents may  cl-.ailer.ce-
their liability  or  the  appropriateness cf the remedy  specifie-i
in tr.*r C-rcer.  On the other  hand, the Agency may promptly seek
tc enforce tr.e Order  in  court.   In light of these possibilit.i.es,
the Agency must  be  ready to  defend the Order in court at  the  tirre
it is issued.  This means that the cite problem, the  reasonable-
ness of 'the required  response,  evidence of liability, and the
Acency's response to  issues  raised by the recipient must  be
thoroughly documented,  and  that the documentation be  organized
and easily retrievable.   The documentation will constitute  the
administrative record for any litigation.
     E.  Competing  Considerations
     The absence of the  factors listed above may argue in favor
of pursuing a judicial  or Fund-financed, rather than  an  adminis-
trative, remedy.  For example»  E?A should not normally issue  an

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                                                        OSMLR * 9633.0
 crcer  if  the  necessary response actions have not oeen clearly



 stror.cl"  c?r.sicsr  "he "-ciciil ccurse c* »••»'«•• ••*«

      :   *.~e  responsible parties nave violated provisions

         in several  er.vironr.^ncal statutes;

      c   the  cppcrtunity for public comment  on the terms

         of a  settlement agreement warrants  the use of a

         judicial consent decree, (where there is a 20-day

        ccrjser.t pence cefore  the decree- is finalized) _§/;

        and

     0  there  is a  nee.- for long term court oversight of

        a settle.T.ent  agreement,  (such as in cases where an

        agreener.r • cal Is fcr separately enforceable response

        -Ei-i-lfisrcnes  prior to completion of the cleanup),


V.   Orders Relating  to Removals and Remedial Actions

     Guidance  on conducting removal  actions issued by the

Office of Emergency and Remedial Response (OERR) divides the

statutory concept of  removals  into "immediate" and "planned"

removals.

     A.  Immediate  Removals

     Immediate removal actions are to be taken only if a

response is needed  within  a relatively short  time  frame to

prevent or mitigate significant  ham to human health or the
J5/  However, it should  be  noted  that  the  Agency  is  exploring
mechanisms which provide for public comment-on both unilateral
and consent administrative Orders.  Guidance on  this matter will
be provided at a later  date.

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                                                             9833.0
                           -18-
irc'.T.-sr, t >  ar.d SLC.-. action w;ii hoc  otherwise  oe  prcvi^ec
s tt-«ly rasis.
       1.   S^spa.is :cr. cf ac-ivi:ies whicr.  aggravate  ar.
            existing release or substantial, threat  of a
            release {e.g., active  use  of  a  storage  tank
            judged by the OSC to be in  imminent  danger cf
            failure).
       2.   Suspension of activities which  interfere  with
            Federal renoval actions (e.g.,  plant traffic  in
            area cf cleanup ! .
       2.   Xover.ent cr r.cr.-ncverr.ent cf a transport vehicle
            f railway tar.k car, tank truck,  .tank  vessel'
            which is the source of a release cr  substantial.
            threat cf a release.
       4.   tfearsres to li'rcir access,  such  as  fencing.
       5.   Use cf readily available equipment,  owned by the
            responsible party, to  contain or remove a release
            during the initial stages  of  a  response be for*
            the OSC is able to obtain  comparable equipment
            from other sources*
       6.   Dikings; construction,  of bernts;  or removal of
            the hazardous substance to an approved  fecrlity.

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                                                            OSWER * 9833.0

                               -13-

 IThis  list  illustrates various uses for an Order; it is not an
      Section  lC5(a)  Orders,  both in iirjnediste and non-immediate
 s.ic-aticr.i, r.ust  contain a  statement notifying the party cf
 E?A's  austerity er.c  the  liability that may be incurred by
 failure  to comply.   AS specifically as possible the Order
 prescribes the response  activity and sets the date for its
 completion.   To ensure enforceacility of the order, EPA should
 not undertake its own CE£CLA-funaed response activity curing
 the period cf tir.e given to  the  party to respond, unless (i)
 such CE'.ClA-fu-ced response  activity becorr.es necessary cue to
 the iirjwr.eciacy cf the release or threat of release or (ii) the
 Respondent fcrr.-.ally  and  unequivocally states an unwillingness
 to comply witr. tr.e Order.  In the event the party -undertakes
response activity, the OSC should remain on-site to ensure
 that the work is being conducted in accordance with the Order.
     B.  Planned Removals .and Remedial Actions
     Planned removal situations  are those that allow several
days or weeks to execute  the response.  Remedial actions/ on
 the other hand, are  generally those intended to provide a
permanent resolution to  the  release and require a longer tine
and more expensive efforts to implement.
     As in the case  of immediate removals,  an Order is available
 to compel response measures-routinely taken during planned removal
and remedial actions. "Removal activity*  includes assessment
programs to evaluate the  nature  of  the problem,  and removal of

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                                                                   9633.0
nateriai  fro* the  sice.   ""erecial  actions" are those ccnsiste^t
-•it.1-,  c p?rrz-:-t  ri.-.;;f..-.  a.-.i :.-. c'. „ .f 5 s-c>. c-^ivLty as cd^pi.-., '.:-;
sr?a, trsr.chir.g.  sn =  rrcvisis-  ?:" :n alterrst? water supply.5 '
I?.Vs pos;x;~n is'that  any activity trat the Governs-r.t right
undertake  at  a site  - fror. pj.anr.xnc a.r.d snudies to cc~?l«t«
cleanup-could r>s  ordered  pursuant to §106 (a).   Of course, the
issuance  of more  than one Order may be necessary if the cleanup
is performed  in stapes,  or if additional responsible parties
become known  to I?.-  wh.o  siouid  participate in  the cleanup.

""• * P-cces.jres for  Issuance cf  §IO€'a) Orders.
     C£RCi-A oesignates  the President as the primary c'fficial
responsible for taxing  response and enforcement action ur.'ier
the Act.   The  authority  to issue adr.inistrat ive orders under
J106(a) has been  etrlegated to tJie Administrator of EPA by
Executive  Order No.  12316, and  redelecated by  the Administrator
to the Regional Administrators-and  the Assistant Administrator
for Solid  Waste and  Emergency Response (AA-OSWER).  The RAs and
the AA-OSWER  must  consult with  the  Associate Administrator for
Legal and  Enforcement Counsel {AA-OLEO prior'to exercising •
this authority, and  the  RAs must obtain advance concurrence from
the AA-OSWER.  (See Delegations  Manual: 14-14.)  The AA-OLEC has
ySee $101(23)  of  CERCLA for definition of "remove" or "removal",
and 5101(24) of CERCLA for definition of "remedy" or "remedial
action".  Those definitions contain detailed examples of the
types of activities  that  fall within these categories.

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                                                              OSWER * 9833.0
                              -21-

 re-ciejetc;  t.ic  ccr-.s.'-ta^.cr authority to the Associate Er.force-

 nen- Counsel-Waste arc tne Regional Counsels.  The AA C?v.'E? .'•as

 reiel»j?t=-  "is  s~.vsr.ce cci*c»rr;T."C5 a_'t~.cri tv t7 the T-ir^ctcr,

 Office  cf  Ksste  ?r=-rar.E t'r.f trce-jr.t (OK?!).   Tns Office cf

 Wa£t« ?ro;;ra-s Zr.:orcer an expedi-

 tious sr^ei'^ie,  w.'-.icr. wii; perr.it the- to initiate ani issue

 legally a.id  technically adequate adrrinistra: i ve orders with

 only prior notice  to  Headquarters.

     A. Planned  Removals and Rer
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trar.srits  .:.w.s r.i;i.-:al 12 ci-.e Cffice  i: '.>asie  Fro^ra-^s  Enfsrce-
~.cs."i  .fcr  r«r»;c»  &.".; ccncurrcr.Ce.  Nocif ica;ior, cc cr,«s State
of our  inter.', to issue the Order s.hovJrJ be  accomplished orally,
er.i fs:ic~-ei  up  iy fr.rrsl xrit'.ar. r.ctic*.
     Ajeney  priicy is to offer parties  to whom  EPA  has issued a
unilateral flOo  Ocier an opportunity  to confer  with tr-« Agency con-
cer-.ir;  the  artr^pr :ate-.-:-ss cf its terras ant!  its  applicability to t.u,s
recripier.t .   The  cnr.fersr.ce will help  L'?A ensure that it has
basei  its Crier  or ccrplete a.ri ace-rare i-.f rr-a t ior. sv.' help
EPA and  Respcr.'Ser.ts re?ch a co.rrron uncJerstand: rsc  of ho- the
Drier  sh;_'.i ^e  ir.plevs.~tei cr modifiei.  The procec-res for
«xercisiri5 this  cpticr- -are corwr.unicated to  respondents through
the text  cf  the  Orier itself.   (See sar.ple  Order, page 4 of
Appendix  E. )
     A.   Planned Rene va Is and. Rer-?c5ial Actions
     Each Order  will specify a date when the Order  becomes
effective.   For  actions  other than immediate removals/ the
effective date should ordinarily be twenty  calendar days from
the day  the  Order is received by the  Respondent.  Certain Orders,
such as  those requiring  that long term remedial actions be taken,
nay warrant  a no re extensive examination of the facts.  In such
cases, the Order nay specify an effective date  more than twenty
days removed to  permit the Respondent an opportunity to discuss the
Order  with the Agency beyond that accorded  by the procedures set
forth  in  Subpart C below.

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                                                                     * 9833.0
                               -23-
      I;  i.-. ;- '.«;.- : :.~=".t B-^-.S  tc  ccr.f^r  --itr, tr.~ Acency a-.--.-:
 £•"•*  Crier, tr.s resrr~.c-s.~t rjst prc-vide  vritte- -ctif ics t ;r-
 cc t.~.e  £r.-. crricisl listed ir the Order withir: ten calerTdsr
£ni  heic  as  s.?-r. :-. ; •.-•=4f rer as crsCticable-  but  prio* tc
csyE  frr- t.ie -ate t.".e-0rier was received  by the Sespcr.ze-.t .
      B .   £~g7~c-;y 5lt'J£tiC"5
      T.*:e  applicatie tir.e periods for  the effective ciate cr.d
frr  request;"; & c-j-fere-re ray re shcrtenfrd.  (e.g.,  tc ~:
a^d  4: hcurs  respect ively ;, cr t.uie conference  procedures ray
ce el :r: rated er.t:rely.  if  t~.e ir.-ediacy cf  the  hazard pcsed
fcy a  site ar.c cnner s:r rc-.--.d; ~c circur.s tances . sc warrant.
.Ir. the fcrrer s;f-2t:f.,  the Order sho-.-lci  perr.it the  Pespcr.de-.t
tc reqyes.t e  ccr.ferer.ee  c-raliy, later  followed i>y written
not if :ca t :cr. .
     C .   Conference Procedures
     The  conference w:ii normally oe held  at the appropriate
EPA Regional  office and  will be presided over  fcy the  Regional
Administrator's  designee.   However, other  arrangements may be
agreed to for the  sake of convenience  to the parties.   At  the
conference, EPA  should be prepared to  provide  the Respondent
with information sufficient to explain the basis for  the Order
and to promote constructive discussions.   The  Respondent will
have the  opportunity  to  ask questions  and  present its views
through legal counsel  or technical advisors.   The schedule and
agenda for the conference will be left tc  the  discretion of
the EPA official leading the conference, as  long as the Respondent

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                                                              OSVER # 9833.0

'-S*.  be  prepared,  s:"ed ;y t.-.s Are.-.ry official
                                                  -c preside- ever
             A  desert? tier,  ci'  the major inquiries made and
             views  offeree  by  the Respondent co'jtestir.;
I- adiiticr;,  tr.-:  -.resi-ing  official  must prepare a statement
                                 ar;-.T.c.^ts raised by -he ?eszc--
de~t a.~.i which  recc-.~e^:s  whether anJ how the ~rder shculc be
r.odifiei/ tc=-:-tr.^r  -;t.-.  the  rc-3£=r.3  therefor.
    2 '   Mc-:f Jgat:cr. ,  ?e.vocat:cr,  or Stay of the Ors'er
     Based tpcr. » review of  the file upon which the Order
initially was based, any probative  information or argument
proffered by the Respondent  fcllo^in; receipt of the Order,
and the recommendation of  the  presiding official, the issuing
official may modify or revoke  the Order.   Any modification to the
Order must be communicated to  the Respondent as part of a copy of
a written statement containing the elements listed in Subpart C
above.   The original should  be kept  in the Agency files along
with the evidence supporting the order* copies of written
documents offered in rebuttal  by the Respondent during the
conference, and a copy of  'the  request for a conference.
     The issuing official  may  also 'stay the effective date of
the Order if the conference  process  could not be completed

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                                                             QSWER * 9833.0
                                -2£-
 -;;.-;.-.  :.-.=  sp^cifi?:: tir.e per; = c.  refers substantially  mcc'ifyin;
 or  rrvcf.;.-.;  a- C-rcer,  t*e ;ss.i" c-r:;ci£l r.jst  ccr.s.lt  wit.-.
 thc  appropriate Heac~carters cr ?.er:on a} cour.sel  err?  ?"ta:r the
VII : .   ?rccfd..-e If Crc'cr :s Not Obeyed
        In  the  fcver.t the party to whorr the Orcer  is  issuei  does
not comply  with  its terms,  the Agency must quickly  cecide
whether to  atter.pt  to enforce tr.e Order by referrir.-. the  cese
to  the  Depirt.^e^t cf  J-stice for filing of a suit to  force
compliance, cr whether to ur.certaKe cleanup cf the  s:t-= by
use cf  CEF.CLA  fjn-is,  ar.= then file sjit acairst  the party  f^r
re i.T^urserr.er, t  of the  costs  expended plus statutory  penalties
for failure to cor.ply with  t.ie Order.
     The detsrr,:nat-iori cf which action to pursue depends
on the  type of response action to be taken.  Obviously,, if an
in-ediate rer.cval action is required by the hazard*  at  the
site, EPA will clean  up the site and attempt recovery  of costs
and penalties  in a  subsequent recovery action.  The same course
of action applies to  a planned removal where the removal acticr
must be quickly  undertaken  and cannot await the filing of  a
suit.   However,  planned removal or remedial responses  which
require an  extended period  of time to perform, and  in  which
initiation  of action  may be .delayed for a brief period without
jeopardising hunan  health and the environment, may  allow sufficient
time for the filing of a suit to enforce the Order, or at  least
that portion of  the Order which calls for the planned  removal or

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                                                             OSWER * 9833.0
 •*-ed:al  actior  t?  ire  ta-'.e-
p *" - ~ .i  •» t> c  c»*»t^ — fc^  t^*  ai-^«ja^£fi £ *" ~ * l* A ^'nS^C1'*^  * " • !•'*«_*  ** £  *"i








w.-i:c-  cptisr.  re p-Ts^e i.?  initially ce be Tact ty  tne  necional



Air.ir.is^rstor,  ir\  the  sane rr.ar.ner ar.c using the sar.e procedures



as previously  prescribed for any other enforcement action.   The



Regional Air.i-.istrator' s reccr.-.enif.t ior is ther. for~ar^ef tc



Headquarters  for artier..





IX.  Nets  cr. ?-j.r;sse ard 'Jse cC T^is Xercrar.fu-



     Tr.e pciicy and procedures s*t forth herein,  an-: internal



ofrice proced-res  adopter  pursuant heretc., are intended solely



for t.ie g-:dance of attorneys arc" other er.p-loyees  of the  U.S.'



Environmental  Protect ion Ajency.  They are not intended to ncr



do they constitute  ruie-makin; &y the Agency, and  may  not be



relied upon to cr»ite  a  right or benefit, substantive  or  pro-



cedural, enforceable at  law or in equity, by any  person.   The



Agency may take any action which is at variance with the



policies or procedures contained in this memorandum, or which



is not in  compliance with internal office procedures that may



be adopted pursuant to these materials.



     Attached  to this  memorandum as Appendices A  and B are



     •  A  sar.ple letter  to a state providing notification



        of the Agency's  intent to issue a $106 Order;  and



     0  A  sarr.ple Order.

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                                                                OSKER * 9833.0
     I: VCL r.£ve  ary C'jestior.s  or  rrc-Le-s concer- i"? a--
' 222-431 4 ', cr  "--ssel*. E. Selr.en  ( 4 26-^503 ^ 7r S



•:2ci-4: :-r .- rf  tre  0:f;:£ c: Le;&:  sr.-j £-,f sr:«r:er.
*a-

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                                                         OSVER.f 9833.0
                           .-.pp« r.c i x

                   iTATE  NCT:? iCATr
State Agency
~ • «« • e * •* ** r ~ T—*»*»"'*•• — ^.» *i*  f~ **. ~ •* ~ ** '
*• * » * W • ^ - ' «•• •».*••»»«•••..••«•••  WStf-t •»<»«*

Dear Mr. Jones:

     Enclosed for your  inferratic- is a cc~v of an orcer
[stamped "D-AFT" and  "CONFIDENTIAL"]  that the Agency  intends
to issue on or  after  _ ..('rate!	, to tr.e XY2 Company",  pursuant
to Section 106(a^ of  tr.e Comprehensive Environmental  Response,
Compensation, and Liability  Act of 1950, (42 USC 56C6).  The
order requires  certain  activities  to  ~e taken at tr.e  company's
site located at  [location;  .   Please  refer to the enclosed
copy of tr.e, proposed  order for the specific actions rec-irsc
of tr.e company  and the  time  within wr. icn such actions m.i;st
be taker..  If you have  any comments or c-esticns concern.:.-.;
the order,  please contact' [£?A official]' at [office] .

                           Sin-cerely yours.
                           Assistant Administrator for
                             Solid Waste and Emergency ..sesponse

                                          Tor]

                           Regional Administrator

                                  [or their designees]


Enclosure

cc:  Honorable J. Smith, Governor

-------
                                                          OSHER * 9833.0
                              Appe-dix 3
        m MA
               UXZTZD  ST-.TrS i'
 In The Matter Of
 •Sane of  Person,
 Firm or  Corporation)

 Proceeding I'ne'er  S«cticr;  105 fa)  of  the
 Ccrprer.ens ive E-.v: rcr.-er.:al Resror.se,
 CcTspersat ion and  Liaoiiitv Act  c:  1960
 (42"'JSC Sect:c.-. SSCSra)!
                                            Docket No.
     The follcwinc Crier  is
anc address of rerson,  firr,
issued on this date to
cr corporation, along v
                                                    (insert  r.ar-
                                                        r a
nane or pi'ace c: ousiness  if  tne' Respondent is not the owner
or operator)  ('"Respondent (s)"),  pursuant  to 5106 (a)  of the
Comprehensive Environmental P.esponse,  Compensation and Liasilitv
Act of 19SO  (CERCLA)  .{42 USC  9606(a)),  by authority delegated tc
the undersigned by  the Administrator of the United States Envi-
ronmental Protection Agency  (EPA).   Notice  of  the
this Order has heretofore  been  given to the State
                                                   issuance  o:
                                                   of
     There is an imminent and
public health and welfare and
of a release)(release) of (a)
in $101(14) of CERCLA  (42 USC
location (the "Facility"):
                               substantial  endangerment to the
                               the  environment  due  to a (threat
                               hazardous  substance(s) as defined
                               9601(14)), from  the  following
                 (insert  legal  description,  if  known;
              otherwise, use street  or  route address)

Jhis order directs you to undertake  action  to  protect  the public
and the environment  from this  endangerment.

                     FINDINGS A.VS  CONCLUSIONS

1.   (Choose one or  more of 1A through  IE,  as  appropriate under
      the factual situation of the case.  Do -not  include  headings.)

-------
                 wr-.gri- r.espor. cent is now, anc has beer since
        fieG  rro,7.  tsc^rce  c:  i nionr.ation t I.

IB.  '(Fcrr^er  cw*»*r/o*t"?*5tcr)  •• Res^o
             	  . •    .  *?•-- • ;•.—;*r! ' 2r,-   :r^r
    ~e Facilitv,  as  c^r-srrr..r.ci f rcr. (sour it «*  -nfor^etior.
h-sre-.r., were  c:s?ss*c  c:  fei tr.e facility.  P.sspcr.ser.t sric cr
ctr.sr«'is«  trar.sfsrrei  ar.c rcr.veyei t.^.e ?aciii*y to 	
cr. 	,  15	,  acccri:.-.- tc (proper^/ recprcs-T^

1C.  '[(Generator) -  Respondent (disposed of) (arrangedr by con-
tract or agreement,  for the disposal or transport for disposal)
of hazardous  substances'ac  the Facility as determined frorr
(source/;.

1Z.   [ i Transporter)  -  Respsr.cer.t chose to ftccept hazardous
substances  for transport  'tc,  and disposal at, the Facility as
d€:err:.-.ed  frsr  (scarce;].

IE.   [{Other  Party!  (Insert reasons why ordered acric-.s are
necessary  to  facilitate the abatement of the hazard/ prevent the
a;;ravaticr: of the hazard,  cr otherwise protect the purl:c heslt.:
and we.far* a~d/cr the  envircr.r.ent. ) ]

2.    (Describe the nature of  the facility.)

3.   On or about tlr«   .     day of 	, 19	,-an
inap»ction of the Facility  was conducted by    (names)      .
(a) duly authorized  representative (s) of (EPA,  State ajer.ry).
At the time of that  inspection, the inspectors observed the
fcll.ow:. ng conditions existin; at the Facility:

     A.    Approximately 1COO  drums of liquid', seni-solid
          and solid  material,  which were leaking,  without
          covers And in various stages of corrosion,
          rusting and  other deterioration, located directly
          on.  the ground.   Material leaking from said drums
          was observed  running approximately 2S yards
          across- the site into Crystal Creek, which adjoins
          the Facility* and which is a, tributary of Pristine
          River, a navigable  water.  According to records at
          the Facility,  materials contained  in the drums
           include:

                     (describe hazardous substances)


     B.    An  area in the  Facility (the "Landfill area")
          of  approximately  four (4) acres in size,
          without vegetation,  from which leachate was

-------
                                                          OSWER * 9833.0
           observed  flowing approximately forty '40) yards
                     2!  Cr-r"~«.   Ve--static.*: hs? beer, kill**!
           hsi  beer. ^ii-TiL." ir. the I* f •*!*!£ il'1 sre£:

                     rlist hazardous substances-
                     ;-&r. cc.-.tir.-e vi;r, the ft..j.ovir.5 5

     At  t.K.e  ti-e  of  the  inspect i = r.,  	 sar.pies cf thr dr-r.nfli
waste, sanples  of  the  leachate from the Landfill area, and 	
samples  of  (sell,  surface water, croundwater,  air, etc. )  were
obtained  by  the inspector(sI.

4.   An  ar.alvsis  cf  t-v;e  sar.?]es tahen at the tir* cf the ir.spec-
tior. cJisc'.csec  tne presence at the Facility cf the fcllowir.;'
suDstances  in  the  concentrations set forth:

            (list  hazardous  substances and concentrations
           confirmed by  analysis - then continue with
            following sentence)

     Th«»sc substances  are "hazardo-js substances" as defined ir.
flDl(i4)  of  CCRCLA, and  are sut,;-»ct  to the tenss and provisiors
of tnat Act.

5.   The  hazardous substances  described above  are treated  or
disposed  of  at  the Facility in such manner that they (are  being
(threaten to be )  released  and discharged from the Facility into
the (soil, groundwater,  surface water, air, etc.) and other
parts of  the environment.

6.   (Describe  population or environment at risk and route of
exposure).   Exposure to  said hazardous substances may cause
illness,  disease,  death  or  other harmful effects to plant  and
animal life  and humans.

7.   The  (release)  (and/or) (threat  of release) of said hazardous
substances may-present an imminent and substantial endangermnnt
to public health  and welfare and the environment.

8.   In order to protect  human health and welfare and the  environ-
ment, it  is  necessary  that  action be taken to  contain and  terminate
the (release)  (and/or)  (threat of release) of  hazardous substances
from the  Facility  into the  environment.

-------
                                                            OSWER #  9833.0
                                • * •
fact,  it  is  neresy uro?rec arse Directea tnat:

      ,r::~7£ -  the  r.esrcr.ier.t r.ay ir r--'sr9d  to uro«»rtak*
      2 f^V  ^£c"~^**p«  ?'?**ft*t"-* t ^ * *" 7*!2** **D ^•"•«»**~e*i  • ~-
      protect  public hsaltr. , welfare and tr.e environment,
      incljcirsg,  rut r.ct l:r,ited to, tr.cse actions w.-. :cr.
      (Insert  here  the response actions whicn EPA  directs
      the Respondent  to ta^e at the site.  Each  activity,
      (:.*., r?-r-jrr:r:^ cf waste, ccnstr-jct icn cf  fer.cirr,
      Ievess»  su.r*"i££icr. cf pla~s frr i rsst si laticr:  cf
      nor.:tcrir.c  wells,  etc.),  and the date  fcr  coTpliance
      with each activity,  she-Id be listed separately.)

      (Insert  a staterer.t  to the effect that other  orders
      or action may  followl )

           ^»«»^"*««»"«  ^ % «.»   A ^ *\/> •»«••• t« » m*ij OT».« /*^h..*«Bk
           C.J^»^-»i.  ^.-i.i. ~ U r r >.-'.". . - . » « ^ y ^w L w/ . « r — ."v

      This Order  is  effective crs the tvientieth calendar  day
foliowir.5 receipt  thereof by Respondent, and all  tines  fcr
performance cf response activities shall be calculated  frcn
that  date.  (Note:  For ir.njediate removal situations,  the
effective date will be  considerably abbreviated.)
         may, within  ten calendar days after receipt  of  this
Order, request  in  writing a conference with  (Official)  to
discuss  this Order and  its applicability to you.   (Note:   For
immediate removal  situations, the time for requesting a  hearing
will be  abbreviated.   In addition., the Respondent  should be
informed that he or she nay make an oral request for  a  con-
ference, to be  followed up by written notice within two. to
three days. )

     At  any conference  held pursuant to your' request,  you may
appear in person and  by attorney or other representatives for
the purpose of  presenting any objections, defenses or contentions
which you nay have regarding this Order.  If you desire  such  a
conference, please contact ( name, title, address  and telephone
number of EPA contact)  within the time set forth above  for
requesting a conference.

-------
                                                                OSWER * 9833.0

      resc.'-.r-s ~ •.  is  ~ -.vise'"1,  tr.at willful  viiiatiir  cr  failure  ^r



                                 V a + ~ ^ .-»«-'• r  «^.^*-«....a-    C^»? • - *
                             •---»-  •*" ^- — r*.  ^*" -..*--»   - -•_...
                              rr  i"/ ucrtic-  t-.erscf,  »i-.~ L~
3 -I':..;, -i" ^ Cr'.'Sc»  " = ;•' i-^J-rCI  j ^-i -JuCir  y 1C ~ • ~ r •' 2 )  of  CE.-.CL-,
 (42 I'.S.C. S56rj7 (c: M 3', ) , to  liability  for  por.itive  rtanages in ar
anounc  up to tnree  tines the  amount of any  costs  incurT*-*.
by the  gcver r-.r.ent  as  a  result  of your  failu-re to  ta/ie  proper
s c 11 o r..

      WIT!«£bj ry  r.anc  ir, trie  City of 	

or. t.r::s        c = v  of             	 r 15	.
                      UNITE::) .STATLH ENVIRONMENTAL pROTrrrr.T.v

-------
                                                           OSWER * 9834.0
USB,'
          UNITED STATES ENVIRONMENTAL PROTECTION AG£\C'
                        WASHINGTON  DC  2046C
                            JAN  26 IS84
M E M 0 R AN D '_'• M
SUBJECT
FROM:
Releasing
Identifies of Potentia
          Parties in Response to
                                                  Responsible
      Director
      Programs
               Gene  A.  Lucero,
               Office of  Waste
               Kir*  F.  Sniff
               Associate  Enforcement  Counsel
               Office of  Enforcement  and  Compls'nc'e
                                               Mor. i tt r : n,:
                     Waste Management Division, Reg:o-.s I
                    Office of Emergency 6 Remedial Response, Region ::
                                                         Region III
              Directors,
              Director,
              Director,  Hazardous  Waste  Management  Division,
              Directors,  Air  &  Waste  Management  Division,
               Regions  IV,  VI ,  VII ,' VIII
              Director, Toxics  &  Waste Management Division,  Region
              Director,  Air &  Waste Division,  Region  x
              Regional  Counsels  -  Regions 'I  -  X
                                                              IX
PURPOSE
     This memorandum, states the policy of
requests under the Freedom of Information
names of potentially responsible .parties
                                               EPA  for  responding  to
                                               Act  (FOIA)  for  the
                                               PRPs)  at  CERCLA sites,
II
         BACKGROUND
     On March 30, 1983, EPA issued guidance on releasing the
identities -of potentially responsible parties under CERCLA.
This guidance provided for case-by-case review and discretionary
disclosure of the identities of PRPs in certain limited circum-
stances. In general, before the March 30 guidance, EPA did not
release the names of PRPs in response to FOIA requests.

     On June 28, 1983, the Federal District Court for the
District of Columbia decided in Cohen v. EPA that EPA had not
met its burden of establishing that disclosing the identities
of PRPs would harm the Agency's enforcement efforts.  The case
involved EPA's decision to withhold the identities of potentially
responsible parties as provided by FOIA exemptions under 5
U.S.C. SS552(b)7(A), 7(C), and 5.

     The court granted the plaintiff's motion for surrt-nary
judgment on finding that:

-------
                                                              ir. « 96 3-;. C
      1 .  Frr  Ixer.pt irr.  "''A.  --  retire letters are investigatory
records  compiled  for law  enforcement purposes,  but EPA did not
establish  tr.at disclosure ef  tr.e  notice letters wo_li --arr the
investigation;

      2.  For  Exemption  "? ( C )  --  the identities cf the PR?s
who received  retire  letters does  -.ct fall  into  the catejorv of
a protected  privacy  interest;  and

      3.  For  Exemption  5 --  notice letters  are nc:  prececisional
documents .

III.   POLICY

      As  a  result  cf  tne Co he-.  decision and the  Adr.ir.istrator ' s
policy of  conducting business  in  a more open a tmcsphere , and
in lijht of  the  resource  derar.ds  involved  in caso-oy-c2S =
review of  the nar.es  cf notice  letter recipients, the ••'.err- 3-7,
1983, guidance .-.as beer, reeva 1 us tec .  Tne  new g -:.-. = r. c c- i ~ set
for en re lo-« .

      1.  I-  response to a "CIA  request, EPA will release the
r.anes of ??.?s wr.o  have received notice letters  aoo;;t a CtFTL-. site.

      2.  .-.->. exception  tc  the  policy cf disclosing  the nares cf
???s  wro received  notice  letters  may De made only  when E?.-
deter- :-.es t.-.at disclosure  c:  a particular name will cause s-ch
inte rf erence . wi th  an ongoing  enforcement proceecin3 that
discretionary disclosure  is clearly unwarranted,  if '-:?A deci-es
to wit.hnold  the nane cf a P'RP  wr.o received a notice letter, EPA
must  support  the  conclus ion • that  disclosure will causa substantial
harr.  to  tr,c-  law er.f orcer.er.t proceeding in  writing  w;tr. concurrence
by the P.c-gional Counsel.   The  written documentation .-nay not
corrsisr of general statements;  it must include  the particular
facts relating to  the  specific  PRP and site that led to the
conclusion to withhold.

      3.  The  names of  parties  who have not yet  received 'notice
letters nay  be predecisional  and  therefore exempt  from disclosure
under Exemption. 5  of the  FOIA.   These names also may be exempt as
investigatory records  under Exemption 7(A),  However, in its
discretion EPA may release  this material.

      4 .  Although  EPA  usually will release the  names of PRPs
only  irn  response  to  FOIA  requests, the Agency may  elect to
release  the  information on  its  own initiative in appropriate
circumstances .

      5.  Disclosure  of  the  names  of PRPs and the nanes of sites
does  not constitute  a  waiver of EPA's right to withhold other
information  developed  for an enforcement action that EPA determines
is exempt  frcn disclosure.   Even if information is exempt from
disclosure under  Exemption 2,  5,  or 1 of FOIA,  EPA has discretion

-------
                                                          OSWER * 9834.0
                              -3-
 release the inf ormat io-. ;  however, E?.-. may exercise its discretion
 release tne information only after the appropriate Regional Counsel
views the information to ensure tr.at disclosure will not interfere
th an enforcement action.
to release the
to
reviews
wi
IV. PROCEDURES .13 IMPLEMENT POLICY

     EPA Headquarters or a Regional Office snouid fellow the
procedure below to respond to a FOIA request for the names of
FR?s or ctr.er  ir.f ormat 1C", arout a CIRC LA site.

     1.  Quality assure the list of PRPs regularly and particularly
before sending notice letters to PRPs for a site.  Perform an
in depth quality assurance of PR? lists every 6 months.  Headquarters
will hold Regional Offices acccuntaole for
assurance cf ?R? inf orrr.a t icr. .
     2.  Immediately notify Headquarters whenever a Regional
Office decides, in accordance wit..-, the guidance  in I tern  IT T.I
aocve, tr.at disclosing tne name of a PR? will cause substant :al
harm to an enforcement effort.  Regional Offices also snouid
notify Headquarters if withholding a namo  is no  longer required.

     3.  If additional information is  requested  aoout a  PR? cr
a site, consult witn the Regional Counsel  for a  decision or.
whetner disclosure will  interfere with enforcement at the site.

     4.  Suomit the list of names, or  names and  information, to
the requester with a brief explanation of  now £?A Defines PR?
for -purposes of send in;  notice  letters.

     5.  Include with the  list  of names  tne following disclaimer:

         This list represents EPA's preliminary  findings on
         the identities  of potentially responsible parties.
         EPA makes no assertions  that  parties on this list
         are liaole for  any hazard or  contamination at any
         CERCLA site.

     6.  Use the term "potentially responsible party" in
responses to FOIA requests if none of  the  parties named  in  a
notice letter has been found  liable by a court.

V. FIRST RESPONSE TO FOIA  REQUESTS

     Ten working days after the date of  this policy, Headquarters
will respond to the current backlog of requests  for all  PRP names
with the quality assured list.

     Any Regional Office that intends  to withhold any PRP names,
as provided by Item III. 2  above,  must  have completed the required
documentation and notified Headquarters  before the FOIA  response
date. If you have any questions about  this policy, contact
Susan Cary Watkins {FTS  382-2032).

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   *         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

 r./                    WASHINGTON. D.C. 204*0
                                                           OSWERt 9833.1
                           F£B 2 I 1984

                                               • OLID WASTC AND (MtKOINCv KtS'ONSE
 MEMORANDUM
SUBJECT:   Issuance  of Administrative  Orders  for  Immediate Removal
          'Actions
       — be _ \A—^   . -. _
FROM:    ALee  M.  Tholes
           Assistant Administrator

TO:        Regional Administrators,  Regions  I-X
           Air  l Waste Management Division Directors
           Regions  III, IV, VI, VII, VIII, x
           Waste Management Division Directors,  Regions  I,  V
           Director, Office of  Emergency  and Remedial  Response, Rejjon II
           Toxics  and Waste Management  Division  Director, Region IX
           Environmental  Services Division Directors,  Regions I - x
           Regional Counsel,  Regions I-X


     This  memorandum sets forth guidance on issuing Administrative
Orders for  immediate removal actions under  CERCLA.  This guidance
should be.used in conjunction  with  the .recently  issued  Guidance
Memorandum  on  Use and Issuance of Administrative orders under
Section 106(a) of CERCLA dated September 8,  1983.

     Since  becoming the  Assistant Administrator, OSWER, I  have
sought to  implement a "balanced" CERCLA  program which uses both
the administrative and civil judicial  enforcement provisions of
the Act--as well as the  Fund—to secure  clean up of hazardous
waste sites.   One of my  primary enforcement goals is  to increase
the use of  Administrative Orders for immediate  removals.   Orders
are particularly  useful  in immediate removal situations, since
they can be  issued quickly,  can require  discrete segments  of work
(e.g., surface cleanup)  and  carry the  threat of additional damages
and penalties  in  the event of  non-compliance.

     We estimate  that Administrative Orders may be appropriate for
a significant  percentage of  immediate  removal situations.  Increased
resources  will -be provided to  the Regions,  and  I expect the Regions
to devote  resources to accomplishing this goal  of increased
Administrative Orders for removals.

     In addition, the Regions must  develop  a satisfactory
organizational structure if  the Administrative  Order  program is to
succeed.   The  organization of  enforcement personnel varies among
the Regions.   The'majority of  the Regions keep  their  "remedial"
and "removal"  personnel  in different divisions.  Since  CERCLA
enforcement has  (until now)  concentrated heavily on remedial
sites, most  regional technical enforcement  personnel  have  been
assigned to the remedial response units  (generally,' the Air and

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                                                          OSWER » 9833.1
                                -2-


 Hazardous Material  Divisions),   personnel  responsible  for  immediate
 and planned removals have usually been  assigned  to  the Environmental
 Services Division which,  as a general rule,  has  not  been assigned
 enforcement personnel.

      Obviously,  the ability of  a Region to implement this  new
 policy requires  both close coordination among  the immediate
 response staff and  their  colleagues  in  the technical enforcement
 and regional  counsel  offices and an  organizational  structure
 capable of developing and issuing quality  orders.   Regions that
 do not currently dedicate technical  enforcement  staff  to their
 immediate removal program should assure that appropriate personnel
 are in place  in  the technical enforcement  office to  implement this
 policy and to handle  the  workload.

 I .    BACKGROUND

      CERCLA identifies  two types of  response actions for which the
 Fund  can be used: removal  actions and remedial actions. The
 National  Contingency  Plan (NCP)  further refines  the  former category
 into  "immediate"  and  "planned"  removals and  describes  the  process
 and procedures for  proceeding witn these forms of response.  (See
 Federa*  Register  31180; July 16,  1982). Please  refer  to the attached
 appendix  for  an  outline of  the  relevant CERCLA and  NCP provisions
 regarding  removal activity,  Administrative Orders and  enforcement.

     Because  of  the  large  number  of  sites  which  pose a  health hazard,
 the office  of Emergency and  Remedial Response  (OERR) defines the
 category  of immediate removals  according to  the  immediacy and
 severity  of the  hazard  to the public health  or environment.  These
 categories  establish  a  guide  for  the purpose of  assessing the
 length of  time within which  the  Agency  must  respond to  the event.
Agency response  to  situations which  require  immediate response
 (e.g., threats of fire, explosion or spills) normally  takes place
 in a natter of hours  or one  or  two days at the most; Agency response
 to other  situations  (e.g.,  rusting barrels that  have not yet
 begun to  leak, holding ponds that may overflow with the advent of
 the rainy  season) normally takes place  during a  period  which may
 range from  a  week to  a month.

     This guidance  is most applicable to the latter situation; i.e.,
the Regions should  consider  issuing AdministrativT~Orders  in situations
when there  is at least one week  between the tine the On-Scene
Coordinator (OSC) determines that an immediate removal  is warranted
and the  tine  that actual  on-site  response  must begin.

     Administrative orders are  a useful enforcement tool in these
types of  immediate  removals  situations, for  the  following  reasons.
First, they encourage private party  res-ponce, particularly since it

-------
                                 -3-


 is OSWER policy to meet,  if  at  all possible, with  responsible parties
 after  the order is issued  if a  meeting  is  requested.  The results
 of an  OWPE analysis of  49  completed  immediate  removals indicate
 that the elapsed tine between the  request  for  funds and the start
 of site  response ranged  from eight days  to more  than three weeks
 for  24 of the  sites.  This clearly indicates that  there is tine to
 issue  Administrative Orders  in  appropriate situations, and the
 process  described in this memorandum can be implemented in as
 little time as a week,  if  necessary.  Second,  removals require
 discrete units of work  (e.g., barrel or  contaminated soil removal)
 which  make's responsible  party compliance and Agency compliance
 monitoring  easier.  Third, the  costs of  immediate  removals are
 generally moderate; this  increases the  probability of private
 party  compliance.

     In  the event  of non-compliance with an Administrative Order,
 the Agency  i-s  prepared to quickly  initiate a Fund-financed response
 and seek  fines/treble damages from the  responsible parties,  since
 the treble  damages  will  be based on the  Fund dollars expended, these
 situations  are  particularly  amenable to  establishing treble damage
 claims,  which  the  Agency will seek to recover  in its $107
 cost recovery  actions.   (The average obligation  for 110 prior
 immediate  removals  undertaken by the Agency was  approximately
 $275,000).   Issuance of Administrative  Orders  for  these situations
 also may  improve  the equitable  position  of the Agency in subsequent
 cost recovery  cases.

 II.    CRITERIA  FOR ISSUING  ADMINISTRATIVE ORDERS

     First,  of  course, the Agency must meet the  legal threshold
that an  imminent  and substantial endangerment to public health or the
environment  may  exist.1  Information which can be  used and evaluated
by the OSC  or  his  supervisor  to make this determination include:

       1. Notification In accordance with CERCLA $103 (a), (b) or (c)
       2. Investigations by  government authorities conducted
          pursuant  to CERCLA $104  (e) or other statutory authority.
     Agency must be able to properly document and justify both its
assertion that an immediate and significant risk of harm to human
life or health or to the environment exists and its choice of the
ultimate response action at a site in order to be able to oppose a
challenge to the Order and to successfully litigate any subsequent
cost recovery action.  Adequate documentation consists of photographs,
samples, monitoring or other documented site analysis.  The Agency
should follow chain of custody procedures to maintain the integrity
of samples taken at the site.  Please refer to the Cost Recovery
Guidance, issued August 26, 1983 for more detailed guidance.  The
Revised Superfund Removal Guidance to be issued in late February
1984 will also provide additional guidance on immediate removal
assessments.

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                               -4-

        3.  Notification  of  a  release by a federal or state permit
           holder  when required by the permit.
        4.  Inventory efforts  or random/incidental observation by
           government agencies or the public.

      If  the  facts  reach the  legal thresholds of CERCLA 5106,
 several  policy  criteria for  deciding whether to issue an Order
 for  an  immediate  removal should be considered.  The first of
 these is the  amount of  time  available before site response must
 begin.   This  determination will usually be aade by the OSC.  An
 Order may  be  appropriate if  there is a minimum of one week available
 for  issuing the Order and  meeting with the recipients (see
 further  below)  between  the tine of the decision to seek funds
 for  the  immediate  removal  and the initiation of on-site response.
 (Of  course if an  order  can be issued-in less than a week the
 Regions  are not bound by the 'one week minimum". However, the
 Regions  should  always attempt to have 48 - 72 hours available
 for  the  recipients to request and conduct a conference.)

         A  second  policy criterion is the number of potential reci-
 pients of the Order and their financial viability.  There should
 be a  "manageable"  number of  responsible parties and they should
 be collectively capable of undertaking site response.  The Regions
 will use their best judgement to decide what constitutes a
 "manageable"  number of  responsible parties and assess the capability
of the parties to  undertake  the response for any individual
 immediate removal  situation,  (For a more lengthy discussion of
criteria to consider when  issuing an Administrative Order, please
 refer to the Administrative  Order guidance.)  When there is a
 large number  of potentially  responsible parties, Orders need not
 be issued to all of the parties.  In this type of situation the
Region should issue the Orders only to those parties most likely
 to comply.  The Region, however, is not precluded from issuing
Orders to all the  parties  if it so desires.

     These cr'iteria are to be used as general guidelines for deter-
mining whether an  Administrative Order should b* issued for an
 immediate removal.  The varying factual circumstances presented
 in any potential  removal action mandate that each Region conduct
this necessary  factual  analysis to decide the appropriateness of
an Order.

   III.  PROCESS FOR ISSUING  ADMINISTRATIVE ORDERS

     The timely development  and issuance of Administrative Orders
 for  immediate removals  will  require effective coordination among
the OSC, technical enforcement personnel and the legal counsel
 in both  the Regions and Headquarters.  OSWER will not dictate how
the Regions must  organize  or adjust personnel in order to
accomplish this task, but  it will expect the Regions to have a
 system in place which is capable of implementing an administrative
order program for  immediate  removals.

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                                                           QSWER t 9833.1
                                 -5-

      The  procedures  for  developing and  issuing orders  follow:

      The  decision  by  the  OSC  or  his  superior to request funds for
 an  immediate  removal  also triggers the  process for deciding whether
 to  issue  an Administrative  Order.

      The  OSC  will  inform  the  technical  enforcement branch (or other
 appropriate enforcement  personnel if  no separate branch exists)
 and  the Regional Counsel  that  a  request for a Fund-financed immedi-
 ate  removal is  being  developed.  Appropriate personnel in OERR and
 OWPE should also be  informed  of  this  action.  While the OSC and his
 staff  prepare the  10-point  document,2 technical enforcement personnel
 and  the Regional Counsel  should  begin to  identify responsible
 parties and assess their  financial ability to conduct  site cleanup.

     The  OSC  or the Regional  Counsel  will attempt to orally contact
 (with  written follow-up)  potentially  responsible parties in order
 to secure private-party  response in  lieu  of the Fund.  While previous
 Agency policy was to  proceed  with Fund-financed response if the
 responsible parties refused to act,  the Agency will now issue
 administrative orders  in  appropriate  circumstances before initiating
 Fund action,  so long  as the site does not pose an unreasonable
risk of harm  to the public  health, welfare or the environment.

     Regardless of whether  a  responsible  party agrees  or not to
undertake the removal, development of the 10-point document should
proceed as usual.  However, the  OSC  and technical enforcement staff
 (in consultation with  the Regional Counsel) shall apply the criteria
outlined  in Part A (above)  to' recommend to the Regional Administrator
whether to issue an Administrative Order.  The decision to issue
the order rests with  the  Regional Administrator, subject to the
current delegations.

       If  the  Regional  Administrator decides to issue an Administra-
tive Order, the Order  will  be  drafted by  technical enforcement
personnel 'with the advice of  the Regional Counsel.  The technical
 information contained  in  the  10-point document will normally
provide the basis for  the Order's 'Findings of Fact" while the
Agency's  intended response  actions will serve as the remedy the
recipient is  required  to  implement.
^Requests for less than $250,000 can be approved oy tne Regional
 Administrator while requests  for more than $250,000 require the
 approval of OERR.   (It is anticipated that within the month, the
 Regional Administrators will  be delegated the authority to obligate
 up to SI million for removal  actions.) The ttn point document
 itself must justify its cost  estimates and be consistent with the
 NCP.  With the  issuance of  the Revised Superfund Removal Guidance,
 the 10 point document will  become  an Action Memorandum.

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                                -6-

     Since Administrative Orders will normally be issued in situa-
tions in which site response is not required for at least one
week, OSWER policy is to provide recipients when possible an
opportunity to meet with Agency personnel to discuss the terns of
the Order and the means for compliance.  Therefore, the Order
should include the following provisions:^

          1. A statement of the imminent and substantial danger
             pursuant to §106 of CERCLA and the risk of harm under
             $300.65 of the NCP.
          2. A statement of the authority of the issuing official
             (normally the Regional Administrator)  to issue the
             Order and why the recipient is liable  under $107.
          3. The steps the recipient must take to comply with the
             order, (following the provisions of the
             ten-point document in order to be as specific as
            .possible).
          4. A mandatory timetable for performing and completing
             the response.  (The timetable should include at least
             one short term interim deadline so the Agency will have
             the ability if necessary, to demonstrate non-compliance
             before the project completion date.)
          5.-A provision informing the recipient that his duty to obey
             the terms of the order takes.effect 72 hours after he
             receives the order.
          6. A provision informing the recipient that he may orally
             contact the Agency to request a conference on the
             Order. The recipient must follow up his oral request
             in writing.
          7. A provision specifying a date certain  by which responses
             (either oral or written) to the Order  must be received.
          8. A provision which states that EPA reserves the right
             to undertake the action if emergency circumstances
             dictate such action 'and that such action- in no way
             relieves the parties of responsibility for the costs
             of such actions.
          9. A provision which require*: proper chain of custody
             procedures to be followed for any testing and sampling,
             adequate recordkeeping of activities (so records may be
             used as evidence in any future enforcement case),
             cooperation from employees of any contractor who engages
             in site activity, and availability of  such employees
             to the U.S. in preparation and trial of a subsequent
             enforcement case.
*Refer to the general Administrative order Guidance for examples
 of model orders and conference procedures.

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                                                           OSWER I 9833.1


                                 -7-

      Under  a  separate  delegations  memorandum  to  the  Regions, the
 concurrence requirement  will  be  waived  for  all Administrative
 Orders  for  immediate removals with obligations of $1,000,000 or
 less.   Within  two  weeks  of  issuance  of  the  Order, the Regions are
 to send a  copy of  the  final  Order  to OWPE.

      As a matter of policy,  in order  to increase the likelihood of
 compliance, the Agency encourages  the convening  of a conference
 with  the recipients of an Administrative Order.  Since
 Administrative Orders  will  generally  be issued for immediate removal
 situations  which do not  require  response in less than one week,
 the Agency  will normally attempt to  hold a meeting with the recipient,
 if  requested by the recipient.   The  conference should be
 convened on an expedited basis (e.g., within  72  hours after the
 Order is issued) if the  recipient  orally requests the conference.
 However, the Agency retains  the  right to "waive" a conference
 if  immediate response  is warranted because of deteriorating conditions
 at  the  site.   The  Regional  Administrator shall have  the authority
 to  decide whether  to eliminate the conference prior  to or following
 the issuance.of the Administrative Order.   If the Regional Administrate:
 waives  the  opportunity for  a  personal conference, a  regional
 representative, must at  least  give the  parties an opportunity to
 be  heard by telephone  before  the effective  date  of the Order.  In
 ••;eneral, conferences concerning  removal actions  should be used to
 clarify  the requirements of  the  Order rather  than as an opportunity
 to negotiate the requirements.

     The Agency must create  a  good administrative record of its
meetings with  the  recipient  of an  Order for either enforcement of
the Order or cost  recovery  after a Fund-financed cleanup.  The
Agency  participants should prepare a  written  summary of the
conference  containing:

         1. The' date and participants.
         2. A  summary  of the  significant issues  raised and arguments/
            data used  by the  recipient  to contest the Order.
         3. The result of the  conference (e.g. agreements reached
            with the recipient,  indication  from  the  recipient of
            an unwillingness  to  comply  with the  Order)

     The presiding official,  (designated by the  Regional
Administrator) must also prepare a statement  which addresses any
 significant arguments  raised  by  the  recipient and recommends whether
 any nodifications  to the Order are warranted.  (See  the September
 8, 1983  Administrative Order  Guidance for a complete discussion of
the procedures and "ground  rules"  for conducting the conference
•nd the  time frames for  holding  them.)

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                                -8-

      If the recipient agrees to undertake the stipulated response
measures, the agreement may be in the form of a Consent Order.  The
OSC will monitor compliance with the Order and reconaend additional
enforcement action if the terms of the Consent Order are breached.
If the recipient does not agree to undertake the measures contained
in the Order, the Agency will generally not refer a case to the
Department of Justice to force compliance because of the time
constraints presented by the emergency.  Rather, the Fund will be
used  for site response and the recipient(s) will be sued for cost
recovery--including punitive damages in appropriate cases.

IV.   USE OF THE FUND WHILE THE ADMINISTRATIVE ORDER IS BEING ISSUED

      Normally, once an Order has been deemed appropriate for an
immediate removal situation, the CERCLA Fund shall not be. used to
undertake a federally-funded immediate removal during the time
period in which the Agency develops the Order, issues it to the
responsible party, and conducts the conference.

      However, if site conditions deteriorate— presenting a corre-
sponding increase in the threat that the site presents— the Fund can
be used for response while the Administrative Order process continues
In such instances, the Regional Administrator can approve the use
of Funds below S250K and request the Assistant Administrator, OSWER,
to release funds if the response work will be greater than $250K.4
The Administrative Order process should continue since the parties
may undertake site response at the next convenient break in activity.

      Thus, if there are deteriorati ng .conditions at the site, the
OSC.should continue all steps necessary for undertaking a Fund-
financed response while the Order is being developed.  The 10-point
document should be prepared and receive the concurrence of all
officials up through the Regional Administrator or the Director,
OERR.

      However, no actual obligation of Funds for site response will
normally occur until after the Order has been issued and the con-
ference has been held.  Since the Order will only be issued in
situations where an immediate response can be delayed, there will
normally be tine to see the Administrative order process through
to conclusion.  The conference must be held within the time period
specified in the Order (which will correspond to the time the
Agency has before the response activity needs to begin).  Since
 'If deteriorating conditions  require  the  Fund  to  respono wnue
 the Order is still being issued, OSWER assumes that the Fund will
 take all response actions  necessary  at the  site  {e.g.,  remove all
 barrels, not merely those  that nay be about to leak).

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                                                                i 9833.1
                               -9-

 the  timing  of  the  obligation  will vary according to the estimated
 time needed to mobilize equipment and personnel, the "OSC should
 work closely with  the technical enforcement and Regional Counsel
 •taff during the drafting of  the Order to assure that the time
 period established  for issuing the Order is synchronised with the
 ti»e requirements  for site  response.

     If the conference does not result in private party response—or
 if changing conditions at the site require accelerated response—the
 Fund-financed  immediate removal will take place.  If Fund-financed
 activity does  begin, the Order may be written to require th<* potentially
 responsible parties to undertake site activity at the next convenient
 break point in activity.  If  the parties still fail to undertake
 the site response activity, enforcement efforts will emphasize cost
 recovery with  the additional  imposition of fines/penalties as
 appropriate.

 V.   COST RECOVERY

     The Agency will normally not initiate t civil action in the
event of non-compliance with  an Order but instead will seek to
 recover costs  and damages after a Fund-financed response.  Therefore,
while enforcement personnel are carrying out the Administrative
Order process,  they .should also be aware of the requirements for a
successful  cost recovery action.  They must be able to document
the following  factors (some of which are the same ones necessary
for the issuance of the Administrative Order itself).

      1. The need for the immediate removal (evidence of an imminent
         and substantial endangerment or threat of endangerment
         to public health, welfare or the environment)
      2. Liability of the responsible parties (evidence to support
         the contention that  the parties meet the liability standard
         of $107)
     3.  Proof that the Fund-financed response activity was "not
         inconsistent" with the requirements of the NCP.
     4.  Documentation of all eligible costs for site-specific Fund
         expenditures.

     Enforcement personnel must assure sufficient documentation of
these factors  from the period in which the 10-point document is
developed and  Funds are obligated through the actual clean up of
the site.  These cost recovery requirements Must be »et regardless
of whether there will be a  simple cost recovery action (if no
Administrative Order is issued) or an action for response costs plus
damages (if the Order is not  complied with).  The Agency Bust
assure that evidence is preserved for any subsequent enforcement
action.  Proper chain of custody procedures must be used for any

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                                                          OSKE3 # 9633.1
                             -10-

•ampling or testing, and adequate  records  of  site activity must be
kept.  Employees of any contractor  used  for site activity Bust
cooperate with and be made available to  the U.S. in preparation
•nd trial of any subsequent enforcement  action.  Enforcement,
program and legal offices should work  together throughout, the
case development.


VI.  FOLLOW-UP

     This guidance represents a substantial departure from prior
practice, and I expect that it will take come time to implement.
For these reasons, Z will be reviewing all immediate removals
referred to Headquarters for compliance  with  this guidance.  In
addition, for immediate removals under $250,000, I will ask the
Directors, OWPE and OERR to review  the compliance with this guidance
quarterly, and to advise me accordingly.
Appendix

cc: Gene Lucero, OWPE
    William Hedeman, OERR
    Kirk Sniff, OECM
    Dan Berry, OGC

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 APPENDIX

 Authority/Requirements/Enforcement of Administrative Orders
 for Removal  Actions  under  CERCLA

 Dnder  5106(a)  of  CERCLA:

    If,  EPA,  acting on  behalf of the President:

    determines  that, there may be an imminent and substantial
    endangerment to the  public health or welfare or the
    environment because  of

    an  actual or threatened release of a hazardous substance
    from  a  facility

   may,  after notice to the affected state,

    issue such orders as may be necessary to protect
   public health  and welfare and the environment.

Under $'l06(b) of  CERCLA:

   EPA may take action  in the appropriate U.S. district
   court, against any person who willfully violates or
   fails or refuses to comply with any Order issued under
   $106(a), to enforce such order and

   way fine such person not more than 55,000 for each day
   such violations occur or such failure to comply continues.

Under S107(c)(3)  of CERCLA:

   Any person who is liable for a release or threat of release
   of a hazardous substance that:

   fails without  sufficient cause to properly provide
   removal action upon order of the president pursuant to
   S106

   nay be liable to the united States for punitive damages in
   •n amount at least equal to and not more than three times,
   the amount of any costs incurred by the Fund as a result
   of such failure to take proper action.

   Civil action may be commenced against any such person to
   recover the punitive damages.  These punitive danages shall
   be in addition to any costs recovered from such parson
   pursuant to $112(c).

   Any monies received in punitive damages shall be deposited
   in the Fund.

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                                                         OSWEH * 9633.1
                                            APPENDIX  PAGE 2
National Contingency Plan Requirements for Immediate  Removals
Under $300.65 of the NCP:
Immediate Removal action is appropriate when the  lead agency
determines that:
   the initiation of the removal action will prevent  or
   mitigate immediate and significant risk of harm  to
   human life or health or to the environment from  such
   situations as:
          1. Human,  animal, or food chain exposure  to
             acutely toxic substances
          2. Contamination of drinking water supply
          3. Fire and/or explosion
          4. Similarly acute situations
   Immediate removal action may include but are not limited  to:
          1. Collecting and analyzing samples to determine
             the source and dispersion of the hazardous
             substance
          2. Providing alternative water supplies
          3. Installing security fencing or other measures
             to limit access
          4. Controlling the source of the release
          5. Measuring and sampling
          6. Moving  hazardous substances off-site for storage,
             destruction, treatment or disposal
          7. Placing physical barriers to deter the spread
             of the  release
          8. Controlling the water discharge from an upstream
             impoundment
          9. Recommending to the appropriate authorities
             the evacuation of threatened individuals
         10. Using chemicals and other materials in accordance
             with Supart H to restrain the spread of the
             substance and mitigate its effects
         11. Executing damage control or salvage operations

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                                      9832.7
    INFORMATION.REGARDING CERCLA
ENFORCEMENT AGAINST BANKRUPT PARTIES

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 y ••"•%,                                                 9832.7
f  A  \
5 NIK* } UNITED STATES ENVIRONMENTAL PROTECTION AUENCY
 *""T/                WASHINGTON. D C. 20460
      *
                            MAY141SI4
                                                          01 > '
  MEMORANDUM

  SUBJECT:  Guidance Regarding CERCLA Enforcement-Against
            Bankrupt Parties  /\
  FROM:     Courtney M. Price V..fl<«.A-^
            Assistant Administrator for Enforcement
              and Compliance Monitoring

  TO:       Regional Adainijtrators, 1-X
            Regional Counsels,  1-X
            Lee M. Thomas, Assistant- Administrator for
              Solid Waste and Emergency Response


       The attached guidance has been developed co assist the
  Regions in developing CERCLA enforcement actions against bankrupt
  parties.  The guidance is intended to encourage aggressive
  enforcement against insolvent parties and insure national
  consistency in current and future bankruptcy cases brought  by
  the Agency.

       The guidance provides:  1} an overview and -summary of  the
  Bankruptcy Reform Act and existing bankruptcy case lav;  2)  *
  discussion of enforcement theories available to the Agency  to
  pursue insolvent parties under CERCLA; and 3) references to
  current bankruptcy pleadings and appeals.filed by the Agency.

       Pages 24 and 25 of the attached guidance describe referral
  procedures for a proof of claim in bankruptcy.  A bankruptcy
  referral vill ordinarily be processed in the same way as other
  hazardous waste referral!. ' However, expedited^Headquarters and
  DOJ concurrence and abbreviated referral packages may be neces-
  sary and acceptable if required to meet deadlines in bankruptcy
  cases.

       If you or your staff have any further questions regarding
  CERCLA enforcement against bankrupt parties, please contact
  Kirk Sniff at (FTS) 3*2-3050 or Heidi Hughes, at (FTS) 382-3109.


  Attachment

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                                                     9832,7
                       TABLE or CONTENTS

                                                      PAGE
I. -INTRODUCTION
     A. Scope and Duration of the  Problem .............  1
     B. When to Proceed Against  a  Bankrupt
          Party .......................................  2

        1 .   Probability of Recovering  the Coat
            Litigation ..................... . ..........  2

        2.   Deterrence of Frivolou*  or Fraudulent
            Bankruptcy Filings ........................  3

1 1 .  THE BANKRUPTCY CODE :   An Overview .................  4

     A. Organization of the Code ......................  u
     B. Voluntary v«. Involuntary  Bankruptcy ..........  5

III. CERCLA AND BANKRUPTCY ACTIONS ....................  6

     A. Proceedings in District  Court  or
          Bankruptcy Court . .. ..........................  6

     B. Cost Recovery Under Section  107 of  CERCLA .....   11

          1. Distribution of Assets ...................   12

          (a) Secured Creditors .......................   12
          Cb) Priority Structure .................. •....   13

          2. Theories of Recovery  Beneficial co
               the United States ................ ......   15

          (a) Administrative Costs ....................   15
          (b) Recovery Under Section 506 (c)
                of the Code ..................... . .....   17
          (b) Equitable Liens .........................   18
          (d) Restitution ....................... ......   18

     C. Other Matters in Bankruptcy  and
          Insolvency Cases ............................   19

          1. Abandonment of Property ..................   19

          2 . State • Invoivency Laws ........... . ........   23

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                             -  2  -                 9832.7
IV. PROCEDURES	  24
     A. Rulei of Bankruptcy Procedure	  24
     B. Filing Proof of Claias	  25
     C. Pleadings	  27
     D. Appeals	  27
     E. Federal Bankruptcy Court
          Jurisdiction	  26
V. THEORIES OF INDIVIDUAL LIABILITY	  30
     A. Personal Involvement in Acts
          and Omissions	  31
     B. Piercing the Corporate  Veil......	  33
     C. Personal Jurisdiction in  Cases Involving
          Corporate Officers or Shareholders	  35
VI. INDEX OF RESOURCES	  36
     PLEADINGS	  36
          Proofs of Claito	  36
          Other Briefs and Motions	  36
     ORDERS	  37
     RESOURCES	  38
     RULES	i	  36

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                                                       9832,7

                         1.  INTRODUCTION
           and Duration of the Problem
     Tht U.S. E.P.A. !• charged with cht duty of managing and
rtplcnishing the limited Suptrfund co tht greatest txccnc possible.
While our enforcement activities under the Comprehensive Environ-
mental Response. Compensation, And Liability Act (CERCLA) will
generally be directed against solvent parties, there have been
and will continue to be times when a responsible party declares
bankruptcy.
     This meaorandun sets forth enforcement options for dealing
with bankrupt parties.  It includes guidance on when to proceed
against bankrupt parties.  It also discusses the chtories and
procedures for recovering cleanup coses from bankrupt parties
under both federal bankruptcy lav and common law theories ot
recovery.  Finally, it ia intended to serve as a bankruptcy infor-
mation clearinghouse, listing materials available from OECM-Wase*
on bankruptcy and related subjects.
     In tht long; run, tht requirements of tht Resource Conservation
and Recovery Act (RCRA), particularly tht eloaurt and financial
requirements, ahould-insure tht ordtrly closure of scorage or
disposal facilitits.  Nonetheless, this will not always occur.
Thus, while tht purpoat of this memorandum is co aid tht CPA official
%
enforcing CIRCLA, much of it vill bt relevant eo futurt tfforts  by
EPA to rtquirt bankrupt owner-operators of; storage or disposal
facilities, generators, and transporters to contribute as much as

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                                •2-
9832.7
possible co Cht cleanup of Che hazardous conditions they have
created.
B.   When to Proceed against a Bankrupt Party
          In making chc determination of when co proceed against
bankrupt parties chc Regions should balance the likelihood of
recovering assets from the estate of the insolvent party against
the extent of Agency resources required to prosecute bankrupt
parties.  The Regions should also evaluate the effect that pursuing
parties who.have filed bankruptcy will have in deterring future
frivolous or fraudulent bankruptcy claims.
          1.  Probability of Receverini the Cost Litigation
          Two questions should be answered by the Regions to determine
the efficient use of enforcement resources and the extent to which
the Agency should pursue bankrupt parties in CERCLA actions.
          The first question to answer In determining whether to
proceed against * bankrupt party is related to the scope of the
r*fte:  Are there other solvent parties In che case?  If so. CERCLA'' s
purposes say be served by proceeding against them alone.  In-general,
actions against bankrupt parties such as generators lacking assets
should not be undertaken when there are other solvent parties.
     The second question that Bust be answered by the Regions
relates to tht value of the case:  Are there assets in the estate
of the bankrupt party?  The Assistant united States Attorney in
the District where the Bankrupty Court sits may be able to send

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                                                         9832,7

                                 -3-


 copies  of chc  cast  docket  co  an  EPA  attorney..]/ Depending on the

 stage of  proceedings,  che  dockec Bay include an itemitacion of

 assets.   Ic may  be  pointless  co  proceed if chcre are few assets.

 The  position of  the  other  creditors  should also be considered.

           In general,  EPA  and the Department of Justice should maximize

 its  use of attorney  resources by pursuing bankrupt responsible

 parties when there  appear  to  be  assets in the estate, and there

 are  either few secured creditors with relatively Incited claims or

 soae  basis exists for  recovering funds from che estate despite the

 presence  of secured  creditors.£/

          2.  Deterrence of Frivolous or Fraudulent Bankruptcy Filings

          On occasion, EPA nay elect to pursue a bankrupt responsible

 party even when  it  appears unlikely  that we- will recover sizeable

 anounts from the Bankruptcy Court.   The Regions should pursue bankruptcy

 actions where che case may serve as  a decerrtnc co ochcr parties

who would otherwise  consider  escaping liability through a declaration
I/   The most common fora of bankruptcy is liquidation under
~    Chapter 7 of the Bankruptcy Reform Ace of 1978 (11 U.S.C.
1101 «c »eq.) (hereinafter ciced as "the Bankruptcy Code").
However, aevcral CERCLA cases have involved responsible parties
in Chapter II reorganisation (see United States. et al. v. Johns
Manville Sales Corporation. et~aT.. Civil No. gi-jgs-D).  The
distinction* between a Chapter 7 liquidation and a Chapter 11
reorganisation are discussed infra.  Unless otherwise seated the
discussion in this memorandum concerns Chapter 7 liquidation
proceedings.

21   This evaluation should be documented in che case referral
~    package prepared by the Region.  The Department of Justice
has requested that all bankruptcy referrals include a "quick look
financial assessment of the pocencial defendant's assets  (i.e. a
summary of assets listed in the bankruptcy papers, a Dunn and
Bradstreec reporc, etc.)

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                                                       9832*7
                                 -4-

of  insolvency.   For  instance,  through the prosecution of bankrupt
parties'the  Agency could  provide an effective deterrent tp under-
financed  "fly-by-night" companies who see bankruptcy at a way to
•void  cheir  liabilties co the  federal government.  Siailarly, it
la  iaportant that responsible  parties are treated equitably.   For
example,  in  a case involving a bankrupt site owner/operator
whose  actions contributed significantly to the vaste condition,
EPA could pursue the bankrupt  site owner to further the enforcement
policy goal  of treating responsible parties even-handedly and
equitably.
              11.   THE BANKRUPTCY CODE:  An Overview
A.   Organisation of the  Code
         The Bankruptcy Reform Act of 197S (11 U.S.C. S 101 e_t seq.
(1978)) replaced and liberalized the Act of 1898  (11 U.S.C. S 1 e_t
*«q.. (1898)). The new act, commonly called the Bankruptcy-Code,
consists of  eight chapters.  Those relevant to EPA claims are:
Chapters 1,  General  Provisions;  3, Case Administration; 5, Creditors
and Debtor,  and  the  Estate; 7, Liquidation-, and 11, Reorganisation.
                                     4
     Chapters 1. 3,  and 3 ate  forth definitions and procedures
coaaon to All bankruptcies.  The provisions of Chapters 7 and 11
•et forch the specific procedures for liquidation* and reorganiza-
tions.  Onder a  Chapter 7 "atraight bankruptcy" or "liquidation,"
a debtor  ia  granted  a discharge  of all debta but  must liquidate
all assets.   A Chapter 7  bankruptcy is administered by a trustee
appointed by the Bankruptcy.Court.  Onder Chapter 11, there  it no
liquidation  of assets.  Rather the goal of this  chapter  is to

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                                                        9832,7
                                -5-

 reorganize tht obligation* of chc debtor in order to give the
 dtbcor  a  "fresh scare" in carrying out his business.  The debtor
 and his creditors Bust arrive at a reorganization plan whereby a
 share of  the  debts  is paid to the different classes of creditors
 on a schedule.  The debtor normally administers the reorganization.
 B.   Voluntary vs.  Involuntary Bankruptcy
          Under either Chapter 7 or 11, the debtor himself nay
 initiate  a voluntary action.£/  The debtor does not have to be
 insolvent^/ and no  formal adjudication of bankruptcy is. required
 in "riur.tary  cases.  An order for relief is automatically entered
 by the  Bankruptcy Court in a voluntary case.
     An involuntary petition under Chapter 7 or 11 aay.be filed
 •gainst most  debtors by certain creditors.  The debtor may contest
 the petition, hovever, and the issue of whether the debtor is or is
 not.insolvent will  then be adjudicated.  The Bankruptcy Court will
 only enter an order for relief if the debtor is not generally paying
                              «e
 w/. j.w.. „.  *K»y become due, or if a custodian, within the last 120
 days before the filing of tht petition, has taken possession of or
 has been  appointed  by the Court to take charge of substantially all
 of tht  debtor's property.5/
i/   11 U.S.C. I 109(b).
4/   Insolvency in bankruptcy'law  is a  ttra of art dtrivtd from
-    COOTon law.  If a corporation or individual claims insolvency
under the common law of a  State  (as opposed to filing under the
ftdtral .Bankruptcy Code),  ht it  generally only deemed insolvent if
he is not paying hit dtbtt at  they become due and if a rtctivtr or
other cuttodian has-been appointed by the Court to take charge ox
hit property.
 /   11 U.S.C. I303(h)

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                               •6-                       9832*7


                III. . CERCLA AND BANKRUPTCY ACTIONS

Section  101  of  chc Bankruptcy Code defines "creditor" AS:

           (A)    [an] tncicy chat has a claim against
           the debtor chat arpac at the time of or before
           the order for relief (disaissal decision -of
           Bankruptcy Court which follows the approval of
           the trustee's Final Report] concerning the
           debtor  ...

Under  section 101 of the 1978 Act, • "claia" is a:

           (A) right to payment whether or not such
           right  is reduced to judgment, liquidated,
           unliquidated, fixed, contingent, matured,
           uno*cured, disputed, undisputed, legal,
           equitable, secured, or

           (B) right to an equitable remedy for breach
           of performance if such breach gives rise to
           a  right to payment, whether or not such
           right  ... is reduced to judgoent, fixed,
           contingent, matured, unmatured, disputed,
           secured, or unsecured.

     The statute clearly states that a claia need not be premises

on a civil action or a final judgment; it is sufricient if the

claia  is based on a simple right to payment as a result of work

coapltted  and cose incurred.  Thus, Che United States need not

have received a Judgment under CERCLA before making a claia against

• bankrupt party.  It i» enough that the United States has a right

to payment or an injunctive claim.  The United States' right to

payment  can be bated upon CERCLA Section* 107 and/or 104,  or ocher

authorities.  Thus, the United States can proc«eff to file a claim

in Bankruptcy Court.

A.   Proceedings in District Court or Bankruptcy Court.

     An  important question that mutt be resolved  in each case is

whether  to initiate proceedings in District Court  or Bankruptcy

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                                                       9.832,7
                               • 7-


Cuurt.  An ordinary creditor must proceed in Bankruptcy Court

because under the automatic stay provision (Section 3$2 of  the

Bankruptcy Code, 11 U.S.C. $362(a)), the filing of a Chapter 7 or

Chapter 11 petition operates aa an automatic stay of any proceedings

against the debtor.  The stay halts the following:

          (1)   the commencement or continuation ... of a
                judicial, administrative, or other proceeding
                against the debtor that was or could have been
                commenced before the commencement of the case
                under this title;

          (2)   the enforcement, against the debtor or against
                property of the estate, of a judgment obtained
                before the commencement of the case ...

          (3)   any act to obtain possession of property or
                the estate or of property from chc estate;

          (4)   any act to create, or enforce any lien
                against property of the estate;

          (5)   any act to create, perfect, or enforce against
                property of the debtor any lien to the extent
                that such lien secures a claim that arose
                before the commencement of the case .,.;

          (6)   any act co collect, assess, or recover a claim
                against che debtor that arose before the
                commencement of the case ...; and,

          (70   the aetoff of any debt owing co che debtor ...

     In a number of situations, however, che filing of a petition

does not operate at a stay, including (Section 363(b)}:

          (4) ... Che commencement or continuation'of
              an aceion ... by a governmental unit co
              enforce such governmental unit's policy or
              regulatory power;

          (5) ... Che enforcement of a judgment other Chan
              * money judgment, obtained in an aecion or
              proceeding by a governmental unit co enforce
              such governmental unit's police or regulatory
              power.

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                                -8-
                                                       9832.7
      Tbe  purpose  of  these  exceptions,  as articulated in the House

 Report  accompanying  the  Bankruptcy  Cooe, Is to permit governmental

 authorities  to  pursue actions  to  protect public health and safety*/

 and  to  allow governmental  units to  sue or continue suit against a

 debtor  to abate violations of  environoental protection lavs.?/

      The  exception in Section  361(b)(4), as interpreted by the

 government,  is  broad.  It Batters not  what is sought:  The government

 may  commence or continue any police or regulatory action.  This

 includes  actions  for money (CERCLA  S107) and actions for injunctive

 relief  (CERCLA  $106).£/  At the stage  of seeking to execute any
     H.R. Rep. No. 95-595 95th Cong., 2d sen
     Cong. Rec. H 11092 (Sept. 28, 1978)
                                               343  (1978); 95
T    H.R. Rep. No. 95-595. at 343.  See also; In re Bay Bridge
                                                    94 F.2fl 355
     Inn. .Inc. v. New York State Liquor Authorit
(2d Cir. 1938); In re colonial Tavern v. Charles
Supp. 44 (D. Mass.
                                                 y.
                                                 L. Byrne. 420 F.
                         and  in  re  Dolly Madison. 304 F.2d. 499
(3d. Cir. 1974)  [held; a* bankruptcy court should not interfere with
governmental regulatory  programs]; Aaron, Bankruptcy Stays tor
Environmental Regulation; Harvest of Coaaerical Timber as an
introduction to a Clash  ot  Policies. 12 Envt'l. Lav i. 3-B (i9t)l)
!...'».. >:^wcy Lav - Wh«a is a  Governmental Unit's Action to Enforce
its Policy or Regulatory  Power  Exempt  from the Automatic Sta
                                   ap
                                   U
Provisions of Section 362?. 9  Fla. Univ. L. Rev. 369. 380  (1981).
See-: 11 U.S.C. i362CO»C£) for the conditions under which  the
automatic atay remains  in effect and other rules applicable to
obtaining relief from the stay.

8/   A motion to overcome the  stay should generally be filed in
~    Bankruptcy Court before proceeding  in District Court.  (See
Pleadints section, infra.)  A  recent opinion in which a Bankruptcy
Judge discussed •• and  rejected — holding a citizens' group in
contempt for failing to overcome -the stay is In Ke Revere  Copper
and Brass. Inc.. 29 B.R. 584 (Bkrtcy.N.W., 195TJT  When the govern-
ment proceeds in District Court, a timely proof of claim should
also be filed in Bankruptcy Court  (see page 24 infra)  When a
Regional attorney wishes to pursue in District Court a cost recovery
Judgment againt albankrupt party,  it is  particularly important that
this strategy be discussed with appropriate EPA H/Q and DOJ attorneys
before referral of a case.

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                                                      9832*7
                                •9-

Judgmenc chat may be obtained, tht government should be prepared
to argue that enforcement of ehe judgment is « continuation of the
governmental unit's enforcement of its regulatory power.  Thus the
Bankruptcy Code read in conjunction with CERCLA and other authorities
allows che United States Co seek an order froa Federal District
Courc requiring che Bankruptcy Court co order che debtor in posses-
sion or trustee to use assets of che bankrupt co abate a hazardous
condition or to reimburse che government for its expenditures.
     In two reccnc cases, che courts rejected che government's
view of the exceptions'.  In United States v. Johns Manville j|/
che District Courc in New Hampshire denied EPA'a motion to vacate
an Order issued by che Bankruptcy Courc in New York staying all
proceedings in an EPA enforcement action againsc Manvilie.  The
opinion characterized che government's accion for injunctive relief
as cantamount co an accion for a aoney Judgment.  Since Section
362(b)(5) of che Code prohibits enforcement of a money judgment,
che Courc held chat che injunccive relief aoughc by che government
did not fall vichin che paramecers of ehe bankruptcy acay exempc-ion.
The Courc noced chac if che governaene had inscead toughc an
injunccion to prevenc accive, on-going disposal racher Chan cleanup
of an existing hazard, such an action would noc have been acayed
by che bankruptcy filing.  In our view, che District Courc
9/   No. 81-229-D (D.N.H. decided Nov.  15,  19*2).

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                                                       9832.7
                                -10-

                Agtncy has proceeded with CERCLA response activities
 ac the Johns Manville sites.
      In In Re Kovacs.1 T/  Ohio v*s stayed from  proceeding in
 State Court in it§ efforts to enforce an injunction requiring
 Kovacs to clean up a hazardous waste site.  Rovacs. a corporate
 officer and operator of the Ch«a-Dyne site, had declared bankruptcy,
 The Sixth Circuit, affirning the District Court and Bankruptcy
 Court decisions,  held that Ohio, in proceeding  to enforce the
 injunction in State Court was actually seeking  a aoney'judgment.
 The Supreae Court granted the State of Ohio's petition for a
 writ  of eertiorari on January 24, 1983.  The Supreoe Court vacated
 the judgment  and  remanded the case to the Sixth Circuit to consider
 the issue  of  mootness.  The Supreme Court has accepted eertieriri
 for a second  tine in the Kovaes II case.^  The issue presented
 in  "kovacs  II  is whether a bankrupt defendants Bay rely on the
 discharge  provisions of the Bankruptcy code to  void an injunction
which requires him to cleanup a hazardous waste facility.  In
January 1984,  the United States filed an anicus  euriae tfrief in
TO/.  The governaent cook the position  that  the Johns Kanville
     District  Court erred,  in a action to disaissrin AM Inter-
national v. United  States.  Case No.  82-B04922 .(N.D. Hi. ftkrtcy
Ct.; (CERCLA 1106 Action;..
H/  681 F.2d  454  (6th Cir.  1982).
W  State of  Ohio  v.  Kovaca (Kovaes II), 717 F.2d 984 (6th Cir.
           (cert, granted,  Sp. Ct. No. 83-1020).

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                                                     9832,7
                               -ii-

 cht  Kovaes II case seating th«c ch« ease has national implication
 for  environmental enforcement undtr the Clean Water, RCRA, and
 CCRCLA and furthtr cht scacts that tht 6th Circuit decision
 "obviously tncouragts polluters to abuse the Bankruptcy Code
 and  defy state and federal environmental protection." |j/
 B.   Cost Recovery under Section 107 of CERCLA
     The United States should be prepared at the time of filing
 of a proof of claio in Bankruptcy Court to prove that its claia
 should be allowed by the court.'  That is, if the agency- has spent
 tor win spend) ]^J money at a site under the provisions of CERCLA
 104, and wishes to recoup such expenditures under CERCLA Section
 107, the United States will have to demonstrate to the.Bankruptcy
 Court that the estate is in fact liable for such expenses under
 Section. 107 .}*/
     Therefore, when the United States files a proof of claim
with the Bankruptcy Court, Department of Justice and EPA attorneys
137  Id.. Memorandum for Che United States as aaicus curiae
     supporting ptciciontr (January, 1984).
14/  Zn tht east where cht Agency has not tptnt Suptrfund money
     ac cht tict but where we intend co conduce a fund-rinanced
response aecion, tht Unictd States can filt a proof oc claim tor
an ''open account."  Tht proof of claia would indicate chat the
claim is founded on an optn account which will become due upon
tht completion of the abatement actions by EPA.
IS/  A usual commercial claim of a creditor it establishtd by the
     txiattnct of a receipt or invoice indicating that the debtor
received goods or services which he contracted co rtctive.  When
EPA has performed work on a site, however, chert has bttn no agree-
ment eo perform such work between EPA and the bankrupt party.
Therefore, we muse be prepared co prove Section 107 liability in
order to prove our claim.

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                               -12-

 should be prepared to prove all elements of a Section 107 cost
 recovery action.  The case must be referred to the Department
 of Justice  in  the normal way, although there may be situations
 when.a referral by telephone may be necessary.  See Procedures.
 infra.
               1.   Distribution of Assets
                   (a)   Secured Creditors
                   The claims of secured creditors arc satisfied
 fully before assets are distributed to any unsecured creoitors,
 including creditors cLaicing administrative expenses.  The
justification  for this treatment of secured creditors is statutory
 (11 U.S.C. $$507, 726).  A valid lien As a right to repayment,
created by agreement, which exists independently of bankruptcy
lavs.  As such, it is a charge against assets which must be met
before distribution to unsecured creditors.]^/  For example, a
bank that has made a loan to the owner of a facility that is
••cured by a lien on the heavy equipment will receive "off the
cop" the amount representing the value of the heavy equipment or
Che equipment  itself before distribution of assets to unsecured
creditor! in order of cheir priority under Section 507 of the
Code.
]£/  3 Collier on Bankruptcy. Para 507.02 307-12.6 (15th Ed.
     19FT7.

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                                                      9832*7
                                -13-

      In Chapter  7 proceedings,  secured creditors will recover
 before unsecured creditors,  including EPA, unless the Bankruptcy
 Court is persuaded by our arguments to Jump our claims ahead of
 •11 others.]2J   In Chapter  11 proceedings, the government should
 be prepared  to play an active role in working out the terms of a
 reorganization plan with the various classes of creditors which
 provides for eventual repayment of our cleanup expenditures.
 The classes  of creditors that have secured interests will have
 the greatest leverage in negotiation of a plan.
           (b) Priority Structure
              Section 507 of the Code sets up the priority
 structure  for satisfaction  of unsecured claimsJJ*/  Payments to
 the unsecured creditors are generally made on a pro rata basis.
 Ten,  fifteen or  twenty cents to the dollar is common, depending
 on  eh* assets remaining in  the  estate.  The following expenses
 and  claims have  priority in the following order under Section
 507(a):
              1.   First, administrative expenses ... and any fees
                   and charges  assessed Against the estate ...
Ml  fS07(b) establishes a "Super Priority" vhieh'vould require
cKt Agency to have priority over every other claim allowable.
Under I507(b) EPA would have to prove (1) that EPA has a claim
(for administrative expenses) and (2) chat this claim is protected
by a lien on the debtor's property  (mechanics lien or prejudgment
lien) and (3) that the stay has prevented use of the property
(clean up).  See Motion for Allowance of Administrative Expenses.
In Re Triantle"Ehemieals Inc.. Case No. 80-00993-HS-7.
i§/  11 U.S.C. 507
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               2.    Second,  unsecured  claims allowed under
                    Section  502(f)  of  chi*  cicle.   [regarding
                    certain  claims  ariaing  in  involuntary cases]
               3.    Third, allowed  unsecured claims for wages,
                    salaries,  or coaaissions,  including vacation.
                    severance  and sick leave pay.
               4.    Fourch,  allowed unsecured  claiss for contributions
                    co  employee  benefit plans.
               5.    Fifth, allowed  unsecured claims of  individuals,
                    to  the extent of $900...
               6.    Sixth, allowed  [certain] unsecured  [tax or
                    penalty  fee] claims of  governmental units  ...
     Claims by the  United States are  classified  as sixth priority
claios or general unsecured creditors*  Because  government clams
are  so low  in  the priority  line, attorneys for  the government  should
'be prepared to argue  that our claims  should be given greater
preference, based on  one of the theories described below.
     Congress  is currently  considering a bill ]*_!  intended to
five claimants under  XC8A or  Superfund a priority  in bankruptcy
proceedings superior  to all other  creditors,  whether their claims
are  ••cured or unsecured.   Four states have already enacted
!£/  H.R.  2767  sponsored  by Hep.  Florio.

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                                                      9832-7
                               -15-


similar provision* in their own environmental laws.2£/

          2.  Theories of Recovery Beneficial to the United  States

              (a)  Administrative Costs

     The proof of cUini filtd        -y tht Unittd States have

Asserted ch*t cltanup expenditures should bt considered adminis-

trative expenses of preserving eh« estate of thi bankrupt, thus

deserving to bt satisfied AS cop priority claims.  Uhilt thtre

is little caselAv on point, one case provides support for this

theory.  In Ottenheiner v. Whitaker 2W. the Court upheld the

decision of the Bankruptcy Court which required the trustee  to

expend suss of money AS administrative costs in order to remove  a

hazardous nuisance.  The conditie-  u created when the bankrupt

party abandoned several barges in Baltimore Harbor.  The Court
207  Massachusetts oil And Hazardous Materials Release Prevention
     And Response Act, MASS. Cen. LAWS. Ch. 21E; New Hampshire
Solid and Hazardous UASte MAnAgeaent Act, N.H. Rev. StAt. Ann.
Ch. 147-B: 10; New Jersey Spill Compensation And Control Act, 58
N.J. StAt. Ann. §10-23.11f (1981).  ColorAdo hAS Also enacted
•uperlien legislation.  For A dismissAl of these stAtutes And the
pending federAl legisiAtion see "Sup«rlien 'Solutions' co Hazardous
Waste: Bankruptcy Conflicti"~ASA Environaental LAW Newsletter,
winter S3/64.

2J./  Ottenheiaer v. Whi taker. 198 F. 2d 289 Oro Cir. 1952} was
     decided under the Bankruptcy Act of 1898, 30,.Stat. 544, which
hAS b««n replAced by tht current '  .--ruptcy Reform Act of 1978,
92 StAt. 2549  (codified At 11 U.&.C.).  St« Alto. In r« Ltwis
Jones. Inc. I Unkr. Ct. Otc. 277 (Bk. Ct. E.B. FA. 1S74) tor
the proposition thAt th« bAnkruptey court is under A duty to
prottet the public interest And »ay order A Trustee to take
Action to protect such interest.  Various memoranda supporting
filed proofs of claim contain further easelav And Arguments.
These Are available trom OECM-Waste.

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                                                       9832.7
                                -16-

 reasoned  chat  obicruccion of the Harbor would conflict with the
 purposes  of  the  Rivers  and Harbor Act.
      In  its  opinion the court stated, "The judge-Bade rule
 {allowing abandonaent]  Bust give way when it coats into conflict
 with  a statute enacted  in order to ensure the safety ot navigation;
 for ve are not dealing  with a burden iaposed upon the bankrupt or
 his property by  contract, but a duty and a burden iaposeo upon an
 owner of  vessels  by an  Act of Congress in the public interest."22/
      The  United  States  has argued, by analogy, that expenditures
aade  by EPA  in the  public interest under the authority of CESCLA
 should be reimbursed as adainistrative expenses.  This public
 interest  arguoent should stress the iaportance of recovering
aoney to  replenish  the  fund to clean up additional sites.  There-
 fore, in  a CERCLA case, as in Ottenheiaer. an Act of Congress
enacted for  the  public  health and welfare should take priority
over  the  usual bankruptcy distribution order.
      In a recent  ruling froa the bench in * ease entitled In re
T.P.  Long, in  the U.S.  Bankruptcy Court for the Northern District
of Ohio,  held  that  the  trustee is liable to EPA for cleanup
costs at  « hazardous waste «Ue.23/  While the Judge did not
 specifically state  that the Governaent's cleanup expenses were
 "administrative  expenses" for bankruptcy purposes, the written
 order is  expected to elaborate on the ruling froa the bench.
227   Id. at  290.
      In Re T.P.  Long Chemical Co..  Inc..  Case  No.  581*906  (N.D.
      Ohio, Bkrtcy.  Eastern District,  April 5,  1984).

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                               -17-
                                                      9832.7
The United States is- cxpeced to file briefs on the question oi
priority for reimbursement as between che secured interest holder
          (b) Recovery Under Section 506{e) of the Cede
              This subsection states: "Tht trustee may rteover
fron property securing an allowed secured claim the reasonable,
necessary costs and expenses of preserving, or disposing of,  such
property to th« extent of any benefit to che holder of tuch claic."
(11 U.S.C. S 506(c)).  In a situation involving real property
securing a loan aade by a bank or savings and loan, cleanup costs
that preserved the property would presumably benefit the lender
and would be .recoverable.  This would allow the Agency to object
to any liquidation of the real property*
     The language of Section 506(c) states, however, chat the
trustee rather Chan the government can recover.  The government
could deal with this by specifically, requesting the cruatee's
ratification of EPA cleanup plans or obtaining froo che trustee an
agreement co seek reimbursement under 506(b).£A/
24/  See Hobinson v. Dickey. 36 F. 2d 447 (lienholders did not
     "*"""           ir toting
     object to water EeTng puaped out of lines for safety rtasons
     *ere liable for expenditures).  First Western Savings i Un
Association v. Aaderson. 252 r. 2d 5<>
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                                 •18-
9832 ,7
           (c)  Equitable Lieni
               It has also been suggested  by  the Ctvil Diviiion of
 tht  Departnent of Justice chat,  depending on the faces of the
 situation,  the United States could argue  that expenditures of
 funds  for  cleanup create an equitable  lien on the property.  Such
 a  lien would create an implied contract for  reimbursement of EPA
 as a secured creditor.  State law on equitable liens should be
 researched  if  this    ?ory is attempted.   It  may be of United
 use  since  State lai.  ay only allow for imposition of ah equitable
 lien in situations involving a fraudulent conveyance of real
 property.   State law say also require  the trustee to have re-
 quested cleanup of the property,  or at least agreed to it.2j>/
           (d)   Restitution
                Equitable restitution of the  United States has been
 approved by the court in cases in which the  United States acted to
 alleviate a potential health hazard.   In  Vyandotte Transportation-
 Co, v.  United  States ££/, Che Coast Cuaro unloaded a barge loaaeo
with liquid chlorine gas that the defendant  had refused to unload
 promptly.   Tht Supreme Court required  reimbursement of costs
 incurred by tht United States.  The Court noted that denial of
 reimbursement  would have financially penalized the United States
25/  For  a  discussion of State Law on "Mechanics  Lien Statutes as
     an Enforcenent Tool in CERCLA Cost Recovery  Actions."  See memo
from R. Schacfer to A.J. Barnes and C.M. Price  dated January rT, I9e*
26/  Vvandotte  T-ansoortation Co.. v. United  States. 389 U.S. 191
     (i967).

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                                                        9832.7
                                -19-

for  acting expeditiously to protect public health and safety,
while unjustly enriching the defendant.
     The Wyandotte case has been Invoked in proof of claims  filed
by the United States as a basis for recovery of CERCLA costs thac
eh*  government has incurred.  In a recent order issued in  United
States v. Northeastern Pharmaceutical and Chemical Co.. Inc..  et al.
(NEPACCO) £?/• cht court stated that restitution was available unuer
$7003 of RCRA because the bankruptcy action was an action  in equity.
United States v. Reserve Mining 28 / also lends support to  a  claia
oasea on restitution.  In that case, the Court held tha: when  the
United States is seeking reimbursement for alleviating a potential
public health hazard caused by one who is in violation-of  a  federal
statute, reimbursement say be granted under the Court's equitable
powers.
C.   Other Matters In Bankruptcy and Insolvency Cases
     1.    Abandonment of Property
          *t. *ny bankruptcy ease, eh* trustee may choose to  petition
eh* Court to allow abandonaent of ton* or all of eh* assets  of the
•state on eh* grounds ehat car* of the ass«ts by eh* eruste* would
be «c*ssiv*ly burd*nsoa« co eh* *stat*. 29/  xh« rationale  for
27f  United States v. North«asterr> Pharmaceutical and Ch«aical Co..
     Tnc>. «t al.""(NEPACCO;  (September 30. 1983, «. Plat. Missouri
S.U. Div.).
28/  United States v. Reserve Minim. 408 F. Supp. 1212, (D. Minn.
     1976;.
29/  11 U.S.C. S 55<».

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                                                       9832.7
                                -20-

peraitting  abandonment was  articulated in In re Ira Haupt & Cc. :
           . ..[Tjhe courts have always recognized chat
           a Trustee  is undtr no duty to rttain the Title
           to  a piece of property or a cause of action
           that is so heavily encumbered, or so costly,
           in  preserving or  securing, that it does not
           promise any benefit to the funds available
           for distribution.3£'
     The  United States will oppose abandonment in certain circus*
stances because the  procedure may allow the estate to avoid
liability for on-going environmental obligations and may allow the
trustee to rid the estate of an asset in which the United States
nay ultimately have  an interest, (based on equitable lien, resti-
tution or administrative expenses).  For example, if contaminated
property  is abandoned by the trustee, the property revfrts back to
the secured creditor and the Agency aay have no claim  against the
nonbankrupt party after clean up.  Accordingly, the United States
should normally take the position that abandonment is  only permis-
sible when public health and safety obligations (statutory or
••^rrvise) are net,  and whtn-'a third party will not recover a
windfall  from EPA's  clean .op actions.  Abandonment may be prezcrred
prior to  elaan up if the property will rtvtrt to a viable party
whoa EPA  may  pursue  for contribution to tht clean up.
     Ih«  petition of the United States is iupported by the reasoning
of tht Ottenheiaer v. Whitaker case, 3V and by In Ke  Levis Jones.
30/  In  re  Ira Haupt &  Co.,  398  F.2d  607  (2d Cir.  1968).
21/  Suora. note  13.

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                                                     9832.?
                                 -21-

 Inc.  3_2/   in  the Ottenheiaer  case, the Court refused to allow the
 trustee  to. abandon assets  that  created a hazardous condition.
 Rather,  the Court required  the  trustee to use assets of the estate
 to  remove  from Baltimore Harbor  several barges belonging to the
 debtor that might have otherwise obstructed the Harbor.
      In  In Re Levls Jones.  Inc.. tht Court reiterated the Otten-
 heiaer position and held that the bankruptcy trustee could not
 simply abandon the property.  Instead, the trustee was required co
 repair various steam pipes  and.manhole covers to protect public
 health and  safety.  The Court in Ottenheiaer had held that abandon-
ment of the debtor's barges by  the trustee would conflict with the
Ri 'ers and Harbors Act.  The  Court in In Re Lewis Jones went a
step further, stating that  "even absent the violation of a state
or federal act, the public  interest must be protected by the Bank-
ruptcy .Court." 33 /
     The law on abandonment under the Code is unsettled.  In the
recent bankruptcy ease, In  Re Quanta Resources.^4/ the New Jersey
District Court affined tht Bankruptcy Court'* ruling allowing
abandonment of a hazardous  vastt sitt ovtr tht objection of tht
City of Utw York and tht State of Ntw York.  Tht Court allowed tht
 company to abandon a hazardous waatt sitt on grounds that tht
12/  Id.
33 /  In Rt Lewis Jones, supra at 280
     In Re Quanta Resources Corp..         F. Supp. _
     No. 82-3524 (D.N.J. Jan 24, 1983) Appeal Pending
No. 83-5U2 (3d dr.).

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                                                        9832'7

 property WAS burdensome to the estate.   At the sitt, thcrt were
 500,000 gallons of waste oil, sludge and hazardous waste.scored in
 52 tanks and about 70,000 gallons of waste oil contaminated by
 PCBs.'2_5/  While Quanta had previously signed a consent order
 with  the N.Y. Department of Environmental Conservation to  clean up
 the site, the Bankruptcy Court's favorable ruling on abandonment
 effectively nullified the order.
     New York City and State had asserted that the holdings in
 Ottenheimer and Lewis Jonet required that the Court deny the
 trustee's petition to abandon and allocate assets in the estate to
 be used for site cleanup rather than distribution to creditors.
The Court rejected this argument, pointing out that the two cases
vere decided before passage of the 1978 Bankruptcy Act.  Before the
Act, the Court noted, abandonment was allowable under judge-nade
rule.  Section 554 of the Bankruptcy Code, however, provided specific
statutory authority for che abandonment of burdensome property.
This authority, the Court stated, was not conditioned by Congress
upon a finding that abandonment does not ham the public interest.367
     The Court was similarly unpersuaded by New York's arguaent
that I959(b) of tht United States Judicial Code, (28 U.S.C. Section
£57  Hazardous Waste Litigation Reporter,  (July 6, 1982) at 2,6-6
367  Id. at 3,671 and 3,672.

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                                 •23-

 959(b)) prohibictd  abandonment.   Section  9S9(b)  provides that the
 trustee thill  "manage  and  operate"  property  in hit possession
 »wtew*»;«*4. :o  v«lid  laws.   The  Court found that this provision dia
 not Apply to  the  trustee in  a  Chapter  7 conttxt, but only to
 receivers and  trustees involved  in  business  operations rather than
 in distribution of  an  estate.
      2.    State Insolvency Lavs
           States  can enact insolvency  laws that  affect bankrupt
 parties  as  long as  the substance of those laws docs not overlap
 with  the Ftderal  Bankruptcy  Reform  Act's  Jurisdiction.  The United
 States  Constitution gives  Congress  the power to  establish uniform
 laws  on  bankruptcy  37/  but does  not prevent  states froa passing
valid laws  on  insolvency.  To  the txctnt  there is no conflict
between  a state's insolvency law and the  federal bankruptcy law,
 the state  law  remains  in opcra.tion.38/
     The United States say benefit  fcoa being a  creditor in state
 insolvency  proceedings in  appropriate  situations.  Under 31 U.S.C.
 S191  (1979), debt!  to  the  United States are  given top priority in
 •tate insolvency  proceedings.  The  top priority  for governaent
 debts does  not create  a lien on  the debtor's property in favor of
the federal governaent. At  s  ainiaua, however.,  it gives the
governaent  a right  of  priority over all unsecured creditors to
37/  U.S. CONST art  I,  i8  cl  4.
3Jl/  In re Wisconsin  Builders Supply Co..  N9  F.2d 649  (7th Cir.
     1956;. Cert,  denied J53  U.S.  965 (1958).

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                                -24-
9832.7
 payment  out of the property in the hands of the debtor's Assignees

 or  other representatives under the conditions specified in the

 statute.3f/

                          IV.   PROCEDURES

 A.   Rules of Bankruptcy Procedure

     The  Supreme Court, Advised by the Judicial Conference of  the

 United States, has the authority to promulgate rules governing

 cases under the new Bankruptcy Code.*_£/  The Advisory Committee  on

 Bankruptcy Rules was duly appointed by Chief Justice Burger to

 draft rules.  The Committee was nearing completion of work on the

 Proposed  Rules when the decision in Northern Pipeline Construction

 Co. v. Marathon Pipeline Co. cast doubt on the Code and the Proposed

Rules.  Thus, no new rules have yet been promulgated.

     The  existing rules were suaaed up in a Bankruptcy Monograph

 drafted by the Office of the Attorney General:

           "Until ... rules of practice and procedure are
           approved, ac least two different sets of rules
           •ust bt consulted. • First, there are the "Suggested
           Interia Bankruptcy Rules" prepared by the Advisory
           Committee on Bankruptcy Rules of the Judicial
           Conference of the United States which were published
     Brsave11 v. United States Fidelity fc Co.. 269 U.S. 483
     (1926;.  The United States could'also argue tfrat satisfaction
of CERCLA-based claims precedes consensual liens, such as mortgages.
The question appears to be open.  Collier, at any rate, expresses
the view that whether consensual liens eoae ahead of the Government's
1191 priority has not been finally and authoritatively determined.
Vol. 6A Collier, 1913(2] p. 246.

407  Under Public Uw 95-598 1248, Congress conferred this power
     on the Supreme Court, amending the grant of rule-making power
s«t forth in 28 U.S.C. 12075 to include the new Title 11 Bankruptcy
Code.

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                                                    9832,7

                                  -25-


            in August 1979 as  'guidclints' that could be Adopted
            as local rules.  The  interin  rules have been adopted
            in many districts, albeit vich occasional variations....
            Local district court  rule* apply in some jurisdictions.
            Some bankruptcy courts have adopted numerous local
            rules in addition  to,  or in lieu of, these interis
            rules.  Second, if a  point of procedure 'is not covered
            by the applicable  local rules, consult the Bankruptcy
            Rules in effect under the Bankruptcy Act of 1889. j^/

     Government attorneys involved in bankruptcy cases will find

rules and all forms (such as  proof of claim forms) in Collier en

Bankruptcy  (15th ed. 1981).

B.   FilinR Proofs of Claim

     To have standing as a creditor, the United States must file a

proof of claia fore which states the name of the claimant; the amount

of the debt or claim; the grouno of liability; the date the claie

became due or will become due under an open account theory, see

footnote 10 supra: and, the nature of the claim (secured or general,

unsecured).^/

     The filing of proofs of  claims or interests is .explained in

Section 501 of the Bankruptcy Code>3/   In a liquidation case under

Chapter 7, a claia ordinarily »u«t bt filed within §ix months af.t«r

the  firat date set for tht firtt meeting of crtditors>i/  Claims base
41 /  Bankruptcy Monograph dated Noveooer 22, 1982, prepared »y the
     Office1 of the Assistant Attorney General, Cuvil Division, for
use of U.S. Attorneys, at pp. 6, 7.
£2/  See, Bankruptcy Rules,  Proof of  Claim official form*.  Proof
     oT"claio* filed so  far  have included brief affidavit* from
the On- Scene Coordinator stating amounts spent end describing the
nature of the work done  as well as  copies of bills submitted to
EPA by contractors.
     11  U.S.C.  1 ,  501.

££/  3 Collier on Bankruptcy  Para. -501. 02[2J  (15th  ed.  1979).

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                               -26-                    9832'7
on administrative expenses can be filed any tiae before the Court
has granted the debtor a discharge.of debts.  It i* sore difficult
to determine when to file a proof of da in in a Chapter ll reorgan-
ization because while the filing is required prior to the Court's
acceptance of the reorganization plan, there is no mechanists tor
determining when that acceptance will take place.  A proof of
claim should be filed immediately, with telephone concurrence by
                    /
EPA HQ (OECM and OWPE) and DOJ, if there is any reason to believe
that a reorganization may be about to be concluded.
     Section 502 of the Code governs the allowance of claims or
interests; a claim  is deemed allowed "unless a party in interest
... objects."^/  In most cases, the proof of claim should be
included in the litigation referral package sent~to OECM which
will then be sent to the Department of Justice and signed by the
Assistant Attorney General for Land and Natural Resources or his
delegate.  The Department of Justice must, be involved in the
filing of a proof of claim in Bankruptcy Court.f^/  As stated
above, special proctdurts Bay be available in emergency situations
in which the government would otherwise ciss filing^deadlines.
Headquarters and DOJ should be contacted.
45/  11 U.S.C. S 506(a).Sec also (b)-(j)  [Procedure after objection]
46/  See, fn 1, page 3 supra for referral documentation that the
     Eepartaent of Justice has requested regarding the.r financial
status of responsible parties.

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                                •27-                    9B32.7
C.    Pleading.*
      Set the attached Index of Resources for a listing of proof* of
claim and other pleadings Chat EPA has filed so far.
     One problem area involves che issue of whether, or not the
United States should file a notion co overcome the stay in Bankruptcy
Court before proceeding to seek injunetive relief in District Court.
Arguably, the statute is clear on its face and no special motion
is necessary for continued exercise of our regulatory powers.
Nonetheless, Bankruptcy Courts have held attorneys in contempt
for failing to overcome the stay.  It is recommended, therefore,
that a notion to overcome the stay be filed with Bankruptcy Court
when the government seeks injunctive relief from a bankrupt party
in District Court.
D.   Appeals
     Bankruptcy appeals are heard by appellate panels of three
bankruptcy judges appointed to the circuit counsel, on election or
the circuit.fj/  H this procedure is not available, appeals are
to the District Courts.*£/  EPA and the Land and Natural Resources
Division of DOJ will involve the Appellate Staff of the Land and
Natural Resources -Division in appeals from decisions of a Bankruptcy
Court and in filing of amicus briefs on bankruptcy issues related
to hazardous waste site cleanup.
£7/  28 U.S.C. I 160
487  28 U.S.C. S

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                                .28.                    9832.7

£.   Federal Bankruptcy Court Jurisdiction
     The jurisdiction of Bankruptcy Courts has betn in «'confuted
•cat* since the Supreme Court's decision in Northern Pipeline
Construction Co. v. Marathon Pipe Line Co. fg/  The Court held
unconstitutional the grant of power in the Bankruptcy Refora Act
(28 U.S.C. U71(b)(c)) that gave Bankruptcy Courts Jurisdiction
over all "civil proceedings arising under title 11 [of the U.S.
Code, Bankruptcy] or arising in or related to cases under title
11,"5iO/  jhis broad jurisdictional grant to the Bankruptcy Courts
vas deeaed unconstitutional because bankruptcy judges do not have
the4 protection conferred by Article III of the U.S. Constitution
(i.e. lifetime tenure subject to reaoval only by impeachment and
irreducible compensation).  It is unclear what effect the decision
in Northern Pipeline will have on the type of case* that can be
brought in Bankruptcy Court until Congress legislates a solution.
At the least, however, it is clear that the traditional state
coaoon-law actions (commonly'Called "Marathon claims" by bankruptcy
practitioners) nay no longer be litigated in Bankruptcy Court absent
the consent of the litigants.£]/
497  	U.S.	, 102 S. Ct. 2858 (1982).
507  28 U.S.C. U71(b)(c).
517  Cook, Nev Bankruptcy Quandary Could Be Easily Solved.
     Legal Times, Sept. 6, 1982 at 10 Col. l.

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     In reaction to Congress* failure to enact legislation that

would rectify the constitutional infinity of the Code,  the Adninis-

tratlve office of the United States Courts, Washington,  D.C.,  form-

ulated aodel rules to be used as interim measures by the United

States Circuit Courts.$£'  The cover explanation circulated with

the rules summarized the main points as follows:

          Under the model rule, all bankruptcy matters are
          initially referred to a bankruptcy judge.  [Section  b(l)
          of the Rule].  In proceedings not involving a final
          judgment on a Marathon claim, the bankruptcy judge may
          enter orders and judgments that become effective immed-
          iately, subject to district court review if requested by
          i party.  [Section (c)(2).J  With respect to final judg-
          ments in Marathon claims, the bankruptcy judge prepare's
          recommended findings and conclusions and a proposed  judg-
          ment .  [Section (c)(3.)]  A district judge then reviews
          the recommendation and enters a judgment. [Section (c)(,5)].
          Where circumstances require, an order or judgment
          entered by- a—bankruptcy judge will be confirmed by a cis-
          trict judge even if no objection is filed.*3/

     Because the United States claims are based.on federal rather

than state law, the provisions are not directly relevant to our

claims. Nonetheless, the Rules do appear to .allow the government

	 	 .. ----riBent with options for seeking relief in the Bank-

ruptcy Court.  For example, the United States can move the District
                         "**                               . .
Court to "withdraw the reference to the bankruptcy judge."£*/   If
     See; Memorandum from William E. Foley (Dir. fcdoin Officer
     oTTu.S. Courts) to Judges, Clerks U.S. Court System Regarding
Continued Operation of the Bankruptcy Court System after Dec. 24,
1982 in the Absence of Congressional Action.

53/  Id.

     11471(d) grants Bankruptcy Judges the authority to refuse-
     jurisdiction.

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                                                         9832.7
                                 -30-


 such  a  notion  were  granted,  the  District Court could retain the

 entire  natter,  refer  part  of  it  back to the bankruptcy judge or

 rtfer the  entire natter back  t;  -..; bankruptcy judge.  The govern-

 ment  ihould  also make a simultaneous motion to overcome the stay.

 If, however, an action in  Bankruptcy Court hat already been inicia:ec,

 the government  may  file a  motion to stay the bankruptcy matter in

 order to proceed in District  Court.£5/


                V.  THEORIES  OF  INDIVIDUAL LIABILITY

     The government anticipates  situations in which individuals

 responsible  for the creation  of  hazardous waste site conditions are

 financially  solvent even though  the corporate owners and operators

 •re bankrupt.~"~In"such a case, Che United States may choose to

 ignore  the estate in  bankruptcy  and pursue the responsible individ-

uals -• as individuals -«  directly, or the United States, could

 pursue -both  the assets of  the bankrupt corporation and the appro-

 priate  individual*.56/
55/  These procedural recommendations were made informally in
     conversation! with staff members of the U.S. Administrative
Court*.  Ptrh4p« rffltcting rb* current confusion in the bankruptcy
court fyftra, on* itaff Attorney stated that CERCLA actions appeared
Co present unusual aubject aav   that * District^ourt would wish
to hear itself in. light of Nc •      Pipeline; th« other staff
attorney discouraged EPA from~'-.-apting to be heard by District
Court, stating that business was proceeding as usual in bankruptcy
courc*.

56/  For a general discussion of individual liability, see Guidance
     Memo "Liability of Corporate Shareholders and Successor Corpo-
rations for Abandoned Sites Under the Comprehensive Environmental
Response Compensation, and Liability Act (CERCLA)" from Courtney *.
?ric« to Regional Counsel* due to be issued June

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                                oi.                    9832.7

A.   Personal Involvement In Acts and OnUiions
     Th« seope of personal liability of corporate officers  is  broad.
A corporate officer, director, or agent is liable for cortf  he
cottBiti regardless of whether he acted on his own behalf or  to
benefit the corporation, regardless of whether he personally bene-
fited from the conaission of the tort and regardless  ot  whether
the corporation is also liable.  He is also liable tor the  torts
of the corporation and of other directors, ofxicers or agents  if
he failed to exercise reasonable care.^2/
     The liability of corporate officers is generally lisitec  to.
situations in which the corporate defendant has knowledge or
responsibility for tortious acts being comcitted within his area
of responsibility.  A general duty of supervision may be an insuf-
ficient basis for liabillty.38/
     The United States plans to make use of this theory of liability
in pursuing, in certain cases, the assets of individuals involved
with corporations that have declared bankruptcy.  The fact patterns
of these particular eases see* well-suited to the lav.  They involve
situations in which hazardous waste trtacacnt or disposal operations
57/  Set:  19 C.J.S. Corporations 11845. 850 (194P).  Accord:
     UTS, v. Hess. 41 T. Supp. 197,  (S.D. Ji.Y. 198-3).  Set also:
Milltr""vT Muacartllt. 1970 A. 2d (IUJ. Suptr., 1961); Donsco Inc.
v. Jasper gorp.."Sfl? F. 2d. 609 (3d  Cir. 1978); Pttyaan v. Howey.
340 Ho. 11, 100 S.W. 2d. 851. 856 (1963).  Sintleton v. Araor
Velvet Corp.. 4 p. 2d 223 
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                                                          9832.7
                                 -32-


 were directed  by employees  of  corporations that later declared

 corporate  bankruptcy  and  abandoned  the  facilities, leaving public

 nuisance conditions essentially  of  their own creation.

      In fact,  EPA and the Department of Justice have already us«d

 this legal  theory iuccessfully.   In one RCRA Section 7003 case, the

 United  States  argued  that this Section  imposes personal liability

 on  corporate officers.  The  Court denied defendant'• motion to

 dismiss, stating:

          "In  Missouri, a corporate officer who participates
          in the  commission  of a tort may be held personally
          liable  for  any  resulting  damage.  Patyman v. Howev
          100  S.V. 2d 851, 4J56 (Mo. 1936).  'A contraryTuTe'
          would  enable a  director or officer of a corporation
          to perpetrate flagrant injuries and etcape liability
          behind  the  shield  of his  representative character,
          even though the corporation might be insolvent or
          irresponsible.' 19 An. Jur. 2d S 1382 at 77.59/

     In addition  to theories of  individual tort liability, CERCLA

explicitly allows  individuals to be held liable for cleaning up
                             *
hazardous waste sites.  Section  107 of  CERCLA clearly permits iepo-

sition of strict  liability upon  broad classes of persons including

an individual owner or operator, any person vho at the time of

disposal of any hazardous substance owned or operated any facility.

persons who arranged  for  disposal and persons who accepted for

transport hazardous substances.^  The Act defines "person"
                               ™"                 »•
as,  inter alia, "an individual."^/  One purpose of the corporate
597  U.S. v. North Eastern Pharmaceutical fc Chemical Co.. Inc
     tt al.. (NEPACCO) No. 8U-506e-CV-SW (Western Dist. Ho. 1
A later HEPACCO decision based a determination of liability on 4107
of CERCLA.  (.see discussion infra)

60/  CERCLA I107(a)(l)(2), (3)(4)

11 /  CERCLA S 101(21).

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                                                       9832*7
                                -33-

 •truccurt i« to insulate shareholders froo liability.  There is.
 howtvtr, no insulation from liability -- no corporate vtil to
 pierce -- when officers or agents of a corporation comait tortious
 acts or participate personally in the commission of torts.
 B.   Piercing the Corporate Veil
     By piercing the corporate veil, the United States may be
 able to establish the individual liability of shareholders for
 torts comsitted by the corporation.  The case law tends to upheld
 protection of the corporate fora.  Courts will, however,  make
 exceptions to this rule when shareholders have commingled individual
 and corporate affairs so that the corporation appears to be no
aore than the "alter ego" of the individual shareholder.
     Federal courts have relied on the.relieving factual tests in
 determining when to pierce the corporate veil: 1) Is the corporation
 undercapitalized for its purposes?  2) Does the corporation observe
 corporate formalities?  3) Does Che corporation pay dividends?
 A) Is the corporation solvent?  5) Have the dominant shareholders
 siphoned corporate funds'/  6) Dots the situation present an element
 of "fundamental unfairness"?^  Courts have refused to pierce the
 veil abttnt a shoving of fundamental unfairness.£3/  However,
     United States v.  Pisani. 646 F.2d. 83, 88  (3d. Cir. 1981).
63.7  DeWitt Trucking,  Brokers v. M.  Rav Fleming  Fmit  Company.
     540 F. 2d  661, 667  (4th Cir. 1976?.

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                                 -34-                    9832.7

 fraud need not be shown if federal  lav governs a case.^4/  Tht
 general rule applied by federal  courts to cases involving federal
 statutes is chat the individuals aay be held liable in the interest
 of public convenience,  fairness  and equity.  The specific statutory
 directives of CE&CLA support  a federal lav.  In addition, the
 language of CERCLA establishes liability for individuals who owned,
 operated or otherwise controlled activities at hazardous vaite
 sites. £5/
      Fact  situations  faced by the United States involving hazardous
 waste disposal  or  treatoent operations should prove appropriate
 for piercing the veil.   In many  cases, the United States is finding
 that CERCLA problems  have  been created by corporations that have
been mismanaged and  undercapitalized for the purpose of handling
hazardous  waste.   Moreover, in sot&e cases, the sane individual
 shareholder/directors have dissolved and reformed essentially the
 •aae hazardous  waste  operations several tines, an indication that
 the corporate  fora is being used as a  shield and "alter ego" for
 individuals.
64/  United States v. Normandy House Hursint Hotae. 428 F.Supp.421,
     424 (D. Haas. 1977). The government will wane .to argue that
federal law applies to piercing che veil.  U.S. v. Kimbell foods.
440 U.S. 715 (1979), hold! chat applicttion~oT"State law should
not frustrate the objectives of federal statutes.  In che Pisani
caae, supra. at 87, che Third Circuit stated, "We believe it is
undesirable to let the right! of tht United States change whenever
State courts issue new decisions on piercing the corporate veil."
65/  See, pages 7-9, Guidance Memo "Liability of Corporate Officers"
     fn 49 supra.

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                                                       9832.7
                                -J5-

C.    Person*! Jurisdiction in Cases Involving Corporate
      Officer* or Shareholders
      If chc United States proceeds to inicitce Action against
individual corporate officer* or shareholders, the government  should
anticipate that defendant* may raise che defense of iaproper juris-
diction or service of process if they reside outside the  state
where the CERCLA site is.  For example, in U.S. v. North  Eastern
Pharmaceutical & Chemical Co.. Inc.. e'c al. (NE?ACCO)£6/, defendants
alleged that, as Connecticut residents, they were not subject  to
extraterritorial service of process under Missouri rules  of civil
procedure.  They argued that since their acts in directing the
disposal of hazardous waste in Missouri occurred not as their
individual acts but as the corporate acts of NEPACCO, they could
not be subject to extraterritorial service of process as  defined in
the Missouri rules.
     The Court rejected this argument as overly technical and
affined that it had valid personal jurisdiction over the defendants,
	  —...... aowaver, points to the need for attorneys to research
state law regarding personal Jurisdiction and service" of process.
Referrals to the Department of Justice should include anticipated
defenses related to personal jurisdiction.
66/  Order Mo. 5066-CV-SV,  (June  11, 1981, W. Dist. Missouri.
""   SW Div.)

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                                •36-                 9832-7


                      VI.   INDEX OF RESOURCES


     These materials can be sent to EPA Regional  attorneys on

rtqutst.  Because OECM-Waste does not have*the  resource capability

to reproduce and send numerous copies,  Bailings will be limited to

one copy per region of each document listed.


PLEADINGS

   Proofs of Claim

     In the Matter of Aidex Corp.. Case No.  79-0-111 , APPLICATION
     FOR PAYMENT OF FUNDS  HELD IN TRUST BY THE  CLERK OK THE  CO'JRT
     FOR CLEAN UP OF HAZARDOUS WASTE SITE CONDITION.

     U.S. v. Jack L. Neal  and Geraldine Fave Neal (Globe), Case No.
     8"7^0"0198, COMPLAINT FOR DECLARATORY JUDGMENT AUD APPLICATION
     FOR ORDER FOR REIMBURSEMENT OF COSTS INCURRED BY THE U.S.
     IN RESPONSE TO.A HAZARDOUS SITE CONDITION.

     In re Liquid Disposal Inc.. Case No 82-01846, APPLICATION FOR
     ORDER FOR REIMBURSEMENT OF COSTS INCURRED  BY THE UNITED STATES
     TO CLEAN UP A HAZARDOUS SITE CONDITION and accompanying
     affidavit and invoices. (Eastern Dist.,  MI)

     In re Triangle Cheaicala. Inc.. Case No. -80-00993-HS-7,
     plus APPLICATION FOR ORDER FOR REIMBURSEMENT etc. and affidavit.
     (Southern Dist., TX)

     In re Crystal Chemical Company. Case No. 81-02901-HB-4, plus
     UNITED STATES MEMORANDUM IN SUPPORT OF PROOF OF CLAIM,
     (Southern Dist., TX)

   Other Briefs and Motlong

     In tht Matter of Aidex Corp.. Cast No.  7,9?0-111, MOTION TO
     VACATE AUTOMATIC STAY, and accompanying MEMORANDUM  IN SUPPORT
     OF MOTION TO VACATE AUTOMATIC STAY and accoapanying  court
     order granting action. (West Dist., NE)

     In rt Crystal Chaaical Company. Debtor, Ca»e*No.  81-02901-HB-*.,
     OfeJECtttiN1 *6 pioPO&Eb GRANT OF REPLACEMENT LIEN AND  TO  PROPOSED
     DISCHARGE OF LIEN and accoapanying court order granting notion.
     (Southern Dist., TX)

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                                                  9832.7

                           -37-


State ef Ohio. Petitioner v. William Lee Kovacs.  ON PETITION
FoR A WRIT 6F CERTlORARl TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT, Brief for the United States as  Amicus
Curlae. (Brief supporting appeal of Ohio to the Supreme Court).

 n re Triangle Chemicals .Inc.. Case No. 80-00993 HS-7 MOTION'
 'OR ALLOWANCE OF ADMINISTRATIVE EXPENSES AND PROPOSED  ORDER
REQUIRING TRUSTEE TO PAY EPA's EXPENSES.  Filed Aug. 22,  1983.

In the Matter of Quanta Resources Corp.. Debtor.  State
of New York and City ot New yor*. Appellants^ v.  Thomas
J. Q'Neiilf a» Trustee. Appellee. (QUANTA hereafter) Appeal
frott the District Court tor the District of New Jersey,
Brief of Appellants. (U.S. Court of Appeals for .the Third
Circuit, No. 83-5142).

QUANTA. Brief of the Commonwealth of Pennsylvania and
State of New Jersey, Afflict Curtat. (U.S. Court ox Appeals
for the Third Circuit, Mo. 83-5142).

In Re A.M. International. Inc.. Case No. 82-B-04922, Defendant's
(United States') Reply Memorandum in Support of Defendant's
Motion to Disniss.

State of Ohio v. Kovacs (Kovacs II), 717 F.2d 984 (6th Cir..
United States of America, et al. v. Johns Manville Sales
Corporation, tt al.. Civil No. al-299-D.Order ot tfte
District court denying United States and hew Hampshire
U.W.4.WK to vacate the automatic stay. (Nov. IS, 1982;
U.S. District CC., K.H)

State of Ohio v. William Lee Kovaes. Mo. 81-3220. Decision
affined District court and B*n*ruptcy Court decisions chat
Kovacs was entitled to protection of automatic stay. (June 16.
1982, U.S. Court of Appeals, Sixth Circuit)

United States ot America v. north Eastern Phacaaceutical
and" Chemical Co.. Inc.. at al.. Mo. •0-30Dto-CV-5M.  Decision
denying detenaants1 motion to oismiss for lack ef personal
jurisdiction. (Junt 11, 19bl; Western District of Missouri.
S. Western Division)

Universal Metal Stamping. Inc. v. Pannco Machinery. Inc..
Bankruptcy Mo. flU6l26"2R.  Jankniptcy court-held that automatic
stay does not stay a  separate suit against the bankrupt s
"sister" corporation.   (December  7,  1981; Eastern District.
Pennsylvania)

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                                                     9832.7
                                -38-
RESOURCES
     Bankrupt eyMonograph conveyed to U.S.  Attorntyi  Offices
     November 22, 1962.  Summary of bankruptcy lav and  procedure.

     EPA Guidance Manual: Pursuing, RCRA Subpart H  Interests
     ICF. (February,
     Brief in U.S. v. Mahltr (M.D. ?«.) drafted  by Michael Steinberg.
     Attorney, Environmental Defense Section,  DOJ  (April  1,  1983).
     Discusses personal liability of corporate officers.
RULES
     Memorandum fron William E, Foley, Director of the Administrative
     Office of the United States Courts on CONTINUED OPERATION  Of
     THE BANKRUPTCY COURT SYSTEM AFTER DECEMBER 24, 1982,  IN  TH£
     ABSENCE OF CONGRESSIONAL ACTION (the "Eoerjency Rules" or
     "Interim Rules"), (December 3, 1982).

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®
  I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
•;/                WASHINGTON. DC 20460
                        JUK 13 1984
                                               OSWER # 9832.10
 MEMORANDUM

 SUBJECT:
 FROM:
 TO:
        Liability of Corporate Shareholders and Successor
        Corporations For Abandoned Sites Under the Compre-
        hensive Environmental Response,  Compensation,  and
        Liability Act {CERCLA)
        Courtney M.  Price	
        Assistant Administrator for
          and Compliance Monitoring
                                        enforcement
        Assistant Administrator for
          Solid Waste and 'Emergency Response
        Associate Enforcement Counsel for  Waste
        Regional Administrators
        Regional Counsels
 Introduction

      The following enforcement memorandum,  which was prepared
 in cooperation with the Office of General Counsel,  identifies
 legal principles bearing on the extent to which corporate
 shareholders and successor corporations may be held liable
 for response costs that arise as a result of a release  of a
 hazardous substance from an abandoned hazardous waste facility.
 In the discussion section pertaining to each part,  the  memorandum
 reviews the law on the subject from established traditional
 jurisprudence to current evolving standards.  Although  general
 rules of liability *re delineated, these principles must be
 carefully applied to the unique fact pattern of any given
 case.

 I.   THE LIABILITY OF CORPORATE SHAREHOLDERS UNDER CERCLA

 Background

      Normally, it is the corporate entity that will be  held
 accountable for cleanup costs under CERCLA.  In certain

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                              -2-


instances, however,  EPA may want to extend  liability to include
corporate shareholders.  This may arise,  for example, where a
corporation, which had owned or operated  a  waste disposal site
at the time of the contamination, is no longer in business.
Tfie situation may also occur if a corporation is still in
existence, but does not have sufficient assets to reimburse
the fund for cleanup costs.  There are two  additional policy
reasons for extending liability to corporate shareholders.
First, this type of  action would promote  corporate responsibil-
ity for those shareholders who in fact control the corporate
decisicn-making process; it would also deter other shareholders
in similar situations from acting irresponsibly.  Second, the
establishment of shareholder liability would aid the negotiation
process and motivate responsible parties  toward settlement.

     Traditional corporation law favors preserving the corporate
entity, thereby insulating shareholders from corporate liability.
Nevertheless, as will be discussed below, there are exceptions
to this general principle that would allow  a court to disregard
corporate form and impose liability under CERCLA on individual
shareholders.

Issue

     What is the extent of liability for  a  corporate share-
holder under CERCLA for response costs that arise as a result
of a release of a hazardous substance from  an abandoned hazardous
waste facility?

Summary

     The question of whether EPA can hold a shareholder of a
corporation liable under CERCLA is a decision that must turn
on the unique facts specific to given situation.  Generally,
however, in the interests of public convenience, fairness, and
equity, EPA may disregard the corporate entity when the shareholder
controlled or directed the activities of  a  corporate hazardous
waste generator/ transporter, or facility.

Discussion

     Section 107(a)(2) of CERCLA provides that  any owner  or
operator of a facility which releases a hazardous substance
shall be liable for all necessary response costs  resulting
from  such a release.  Section  101(20)(A)(iii)  of CERCLA  clearly
states that the term  "owner or  operator" as applied  to abandoned
facilities includes "any person who owned,  operated,  or  otherwise

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                              -3-
controlled activities at such facility immediately prior to
such abandonment* (emphasis added).

     In addition, Sections 107(a)(3) and 107(a)(4) of CERCLA
impose liability for response costs on any person who arranged
for the disposal or treatment of a hazardous substance (the
generator), as well as any person who accepted a hazardous
lubstance for transport to the disposal or treatment facility
tthe transporter).

     The term "person" is def-     .n CERCLA Section 101(21)
as, inter alia, an individual, iirm, corporation, association,
partnership, or commercial entity.  A shareholder may exist
as any of the forms mentioned in Section 101(21).  Therefore, a
shareholder may be considered a person under CERCLA and,  conse-
quently, held liable for response  costs incurred as a result
of a release of a hazardous substance from a CERCLA facility
if the shareholder:

        0  Owned, operated, or otherwise controlled activities
           at such facility immediately prior to abandonment
            [CERCLA Section 107(a)(2); Section 101(20)(A)(iii) ] :

        0  Arranged for the disposal or treatment (or
           arranged with a transporter for the disposal or
           treatment) of the hazardous substance [CERCLA
           Section 107(a)(3)]; or

        •  Accepted the hazardous  substance for transport  to
           the disposal or treatment facility selected by  such
           person [CERCLA Section  107(a) (4)].

     Notwithstanding CERCLA's statutory language, courts
normally seek to preserve the corporate form and thus maintain
the principle of limited liability for its shareholders. V
In fact, fundamental "to the theory of corporation law is
the concept that a corporation is  a legal separate entity, a
legal being having «h existence separate and distinct from
V  Sec Pardo v. Wilson Line of Washington. Ine^., 414 F.2d
~   1145, 1149  (D.C. Cir.  1969); Krivo Industrial Supply Co.
    v. National Distillers t Chem. Corp., 483 F.2d 1098,
    1102 (Sth Cir. 1973). modified p«r curiam, 490.F.2d 916
    (5th Cir, 1974); Homan and Crimen, Inc. v. Harris, 626
    F.2d 1201,  1208  (Sth Cir. 1980).

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                               -4-


that of its owners." £/• This  concept permits corporate
shareholders "to limit" their personal liability to the extent
of their investment." 2/  Thus, although a shareholder may
be considered a "person" under CERCLA (and therefore subject
to the Act's liability provisions), the application of corporate
law would tend to shield the shareholder from such liability.

     Nevertheless, a court may find that the statutory language
itself is sufficient to impose shareholder liability notwith-
standing corporation la*. ^/   Alternatively, to establish
shareholder liability, a co"urt may find that the general prin-
ciples of corporation law apply but, nonetheless, set aside
the lirited liability principle through the application of
the equitable doctrine of "piercing the corporate veil."

     Simply stated, the doctrine of piercing the corporate
veil refers to the process of  disregarding the corporate
2/  Krivo Industrial Supply Co. v. National Distillers t Chem.
~   Corp., 4B3 F.2d  1098,  1102  (5th""Cir.  1973), modified per"
    curiarn, 490 F.2d 916  (5th Cir. 1974).
V  See United States v. Northeastern  Pharmaceutical and
~~   Chemical Company , Inc. , et al.,  80-5066-CV-S-4, memorandum
    op. (W.D. Mo., 1984).   In Northeastern  Pharmaceuticaj. the
    district court noted that a  literal  reading  of Section
    101 (20) (A) "provides that a  person who  owns  interest in a
    facility and is actively participating  in  its management
    can be  held liable  for  the disposal  of  hazardous waste."
    (Memorandum op. at  36. *  The court went on to find that
    there was sufficient evidence to impose liability on one
    of the  defendants pursuant to this statutory definition
    of "owner and operator," and the Section 107(a)(l) liability
    provision of the Act.   The fact  that the defendant was a
    major stockholder did not necessitate the  application of
    corporate law, and  thus the  principle of limited liability:
    "To hold otherwise  and  allow [the  defendant] to be shielded
    by the  corporate veil  'would frustrate  congressional purpose
    by exempting from th« operation  of the  Act a large class
    of persons who are  uniquely  qualified to assume the burden
    imposed by  ICERCLAJ."   (Memorandum  op. at 37, citation
    omitted. )

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                               -5-
 entity  to  hold either corporate shareholders  or  specific
 individuals  liable  for corporate activities.  V

      In order  to  determine  whether  to disregard  corporate form
 and  thereby  pierce  the corporate veil,  courts generally have
 sought  to  establish two primary elements.  */  First, that the
 corporation  and the shareholder share such"~a unity of interest
 and  ownership  between them  that the  two no longer exist as
 distinct entities.  V  Second,  that  a failure to disregard the
 corporate  form would create an  inequitable result. 8/

      The first element nay  be established  by demonstrating
 that  the corporation was controlled  by  an  "alter ego."  This
 would not  include "mere majority or  complete stock control,
 but  complete domination, not only of  finances, but of policy
 and  business practice in respect to  the transaction attacked
I/  See Henn, LAW OF CORPORATIONS $$143,  146  (1961).  This
    doctrine applies with equal force to  parent-subsidiary
    relationships (i.e., where one corporation owns the
    controlling stock of another corporation).

£/  Generally, courts have sought to establish these elements
    in the context of various theories, such as the "identity
    "instrumentality," "alter ego," and "agency" theories.
    Although these terms actually suggest different concepts,
    each employs similiar criteria for deciding whether to
    pierce the corporate veil.

V  See United States v. Standard Beauty  Supply stores,
    Inc., 561 F.2d 774, 777 (9th Cir. 1977); FMC Fin.  Corp.
    v. Murphree, 632 F.2d 413, 422 (5th Cir. 1980).

"/  See Automotrit Del Golfo de Cal. S.A. v, Resnick,  47 Cal.
    2d 792, 796. 306 P.3d 1 (1957); DcWitt Truck Broker, Inc.
    v. W. Ray Fleroming Fruit Co., 540 F,2d 681, 689 (4th
    Cir. 1976).  Some jurisdictions require a third element
    for piercing the corporate veil: that the corporate
    structure must have worked an injustice on, or was the
    proximate cause of injury to, the party seeking relief.
    See e.g., Berger v. Columbia Broadcasting System,  Inc.,
    453 F.2d 991, 995 < 5th Cir. 1972), cert, denied, 409
    U.S. 848, 93 S.Ct. 54, 34 L.Ed.2d 89  (1972); Lowendahl
    v. Baltimore fc O.R.R., 247 A.D. 144,  287 N.Y.S. 62, 76
    (1936), aff'd 272 N.Y. 360, 6 N.E.2d  56 (Ct. App.  1936),
    but see, Brunswick Corp. v. Kaxman, 599 F.2d 34, 35-36
    (2d Cir. 1979).

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                              -6-
so that the corporate er  ty as to this transaction had at the
time no separate mind, *  1 or existence of its own.' V

     In analyzing this first element, courts have generally
considered the degree to which corporate "formalities have
been followed [so as] to maintain a separate corporate iden-
tity." ££/  For example, the corporate veil has been pierced
tn instances where there had been a failure to maintain adequate
Corporate records, or where corporate finances had not been
kept separate from personal accounts. ££/

     The second element of. the test is satisfied when the
failure to disregard the corporate entity would result in
fraud or injustice. ££/  This would occur, for example, in
cases where there has been a failure to adequately capital-
ize for the debts normally assocated with the business
undertaking, 1V or where the corporate form has been employed
to misrepresent or defraud a creditor. JJ_V
V  Berger v. Columbia Broadcasting System, Inc., 453 F.2d
    991, 995 (5th Cir. 1972), cert, denied, 409 U.S. 848,
    93 S.Ct. 54, 34 L.Ed.2d 89 (1972).

    Labadie Coal Co. v. Black, 672 F.2d 92, 96 (D.C. Cir.
    1982); See DeWitt Truck Broker, Inc. v. W. Ray Flemming
    Fruit Co., 540 F.2d 681, 686 n. 14  (collecting cases)
    (4th Cir. 1976).

    Lakota Girl Scout C., Inc. v. Havey Fund-Rai*. Man., Inc,,
    519 F.2d 634, 638 (8th Cir. 1975); Dudley v.  Smith, 504
    F.2d 979, 982 (5th Cir. 1974).

    Some courts require that there be actual fraud or injustice
    akin to fraud.  See Chenqelis v. Cenco Instruments Corp.,
    386 F. Supp 862 (W.D. Pa.) aff'd mem., 523 F.2d 1050 (3d
    Cir. 1975).  Host jurisdictions do not require proof of
    actual fraud.  See- DeWitt Truck Brokers v. W. Ray Flemming
    Fruit Co., 540 F.2d 681, 684 (4th Cir. 1976).

    See Anderson v. Abbot, 321 U.S. 349, 362, 64 S.Ct. 531,
    88 L.Ed. 793 (1944); Machinery Rental, Inc. v. Herpel
    (In r« Multiponies, Inc.), 622 F.2d 709, 717 (5th Cir.
    19-80).

    See FMC Fin. Corp. v. Murphree, 632 F.2d 413, 423  (5th
    CTr. I960).

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                              -7-
     In applying the dual analysis, courts act under consider-
ations of equity; therefore, the question of whether the
corporate veil will be lifted is largely one of fact, unique
to a given set of circumstances.  However, the substantive
law applicable to a case may also have great importance.  For
fxample, in applying state corporation law, state courts have
Been generally reluctant to pierce the corporate veil. 15/
Federal courts, however, in i?-lying federal standards, "Have
shown more willingness to dis:?;ard the corporate entity and
hold individuals liable for corporate actions.
     In many instances federal decisions do draw upon state
law and state interpretations of common law for guidance.  £
However, federal courts that are involved with federal
question litigation are not bound by state substantive law
or rulings. ££/  In such cases, either federal common law
15/  See discussion in Note, Piercing the Corporate Law Veil;
     The Alter Ego Doctrine Under Federal Common Law, 95
     Harvard L,R. 853, 855  (1982).

     It is well settled that a corporate entity must be dis-
     regarded whenever it was formed or used to circumvent
     the provisions of a statute.  See United States v. Lehigh
     Valley R.R., 220 U.S. 257, 259, 31 S.Ct. 387/55 L.Ed.
     458 (1911); Schenley Distillers Corp. v. United States,
     326 U.S. 432, 437, 66 S.Ct. 247, 90 L.Ed. 181 (1945);
     Kavanaugh v. Ford Motor Co., 353 F.2d 710, 717 (7th
     Cir. 1965); Casanova Guns, Inc. v. Connally, 454 F.2d
     1320, 1322 (7th Cir. 1972).

     See Seymour v. Hull t Moreland Enq'q, 605 F.2d 1105 (9th
     Cir. 1979)? Rules of Decision Act, 28 U.S.C. $1652 (1976).
     Generally, federal courts will adopt state law when to
     do so is reasonable and not contrary to existing federal
     policy.  United States v. Polizzi, 500 F.2d 856, 907 (1974)
     See also discussion in note 19, infra.

     UNITED STATES CONSTITUTION art. VI, cl. 2.

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                           -8-
or specific statutory directives may determine whether or not
to pierce the corporate veil. 19/
     See Anderson v.  Abbot,  321 U.S. 349,  642 S.Ct.  531,  88
     L.Ed. 793 (1944); Town  of Brookline v.  Gorsueh,  667  F.2d
     215, 221 (1981).  For a general discussion of  federal
     common law and piercing the corporate veil see,  note 15,
     supra.   The decision as to whether to apply state law  or
     a federal standard is dependent on many factors:

          "These factors include the extent to which:  {1} a
          need exists for national uniformity; (2)  a  federal
          rule would disrupt commercial relationships  predicated
          on state law; (3)  application of state law would
          frustrate specific objectives of the federal program;
          (4) implementation of a particular rule would cause
          administrative hardships or would aid in  administrative
          conveniences; (5)  the regulations lend weight to  the
          application of a uniform rule; (6) the action in
          question has a direct effect on  financial  obligations
          of the United States; and (7) substantial  federal
          interest in the outcome of the litigation  exists.

          Even with the use  of these factors, however, whether
          state law will be  adopted as the federal  rule or
          a  unique federal uniform rule of decision will  be
          formulated remains unclear.  The courts have failed
          to either mention  the applicable law or to  state  the
          underlying rationale for their choice of which  law to
          apply."  Notei Piercing the Corporate Veil  in Federal
          Courts: Is Circumvention of a Statute Enough?,  13 Pac.
          L.J. 1245,  1249 (19821 (citations omitted).

     In  discussions concerning CERCLA, the courts and  Congress
     have addressed several  of the above mentioned  factors.
     CERCLA*  For example, the need for national uniformity to
     carry out the federal superfund program has been  clearly
     stated  in United States v. Chem-Dyne, C-1-82-84D, slip op.
     (S.D. Ohio,  Oct. 11, 1983).  In Chem-Dyne, the  court stated
     that the purpose of CERCLA was to ensure the development
     of  a uniform rule of law, and the court pointed  out  the
     dangers of a variable standard, on hazardous waste disposal
     practices that are clearly interstate.   (Slip  op. at
     11-13.)  See also, Ohio v. Georqeoff, 562 F. Supp. 1300,

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                              -9-
     The general rule applied by federal courts to cases in-
volving federal statutes is that "a corporate entity may be
disregarded in the interests of public convenience, fairness
and equity." ££/  In applying this rule, "federal courts
^ill look closely at the purpose of the federal statute to
Determine whether that statute places importance on the
corporate form." £v Furthermore, where a statute contains
specific directives on when the corporate entity may be
disregarded and indiviauals held liable for the acts or debts
of a valid corporation, courts must defer to the congressional
mandate. ££/

     Thus, even under general principles of corporation law,
courts may consider the language of statute in determining
whether to impose liability on corporate shareholders.
Therefore, a court may use the statutory language of CERCLA
either as a rationale for piercing a corporate veil (when
corporation law is applied) or as an independent statutory
basis for imposing liability (notwithstanding the general
principles of corporation law). 23/
19 (continued)/

     1312 (N.D. Ohio, 1983); 126 Cong. Rec,  H. 11,787 (Dec.
     3, 1983).

     The Chem-Dyne court stated that "the improper disposal
     or release of hazardous substances is an enormous and
     complex problem of national magnitude involving uniquely
     federal interests." (Slip op. it'll.)  The court further
     noted that "a driving force toward the development of
     CERCLA was the recognition that a response to this
     pervasive condition at the State level was generally
     inadequate: and that the United States has a unique
     federal financial interest in the trust fund that is
     funded by general and excise taxes."  (Slip op. at 11,
     citing, 5 U.S. Code Cong, « Ad. News at 6,142.) See
     also, 126 Cong. R«c. at H. 11,801.

     Capital Telephone Company, Inc. v. F. C. C., 498 F.2d 734,
     738  (D.C. Cir. 1974).

     Town of Brookline v. Gorsuch, 667 F.2d 215, 221 (1981).

     Anderson v. Abbot, 321 U.S. 349, 365, 64 S.Ct. 531,
     88 L.Ed 793 (1944).

     See discussion, supra, note 4.

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                              -10-


Conclusion

     The Agency should rely upon the statutory language of the
Act as the basis for imposing liability on any person who
controlled or directed the activities of a hazardous waste
facility immediately prior to abandonment, or on any person
frho is a generator or transporter, notwithstanding the fact
(hat that individual is a shareholder.  Additionally, and
alternatively, the Agency may rely on the general principles
of corporation law to pierce the corporate veil by applying
the current federal standard of public convenience, fairness,
and equity.  However, when seeking to pierce the corporate
veil, the Agency should be prepared to apply the traditional
dual test previously discussed in order to provide additional
support for extending liability to corporate shareholders.
II.  THE LIABILITY OF SUCCESSOR CORPORATIONS UNDER CERCLA
tiackground

     Section 107(a)(2) of CERCLA extends liability for response
costs to "any person who at the time of disposal of any hazardous
substance owned or operated any facility at which such hazardous
substances were disposed of.*  Situations may arise, however,
where a corporation, which previously had owned or operated a
hazardous waste facility, now 'transfers corporate ownership to
another corporation.  In such, cases, it is important to determine
whether the liability of the predecessor corporation's action
regarding the disposal of hazardous waste is also transferred
to the successor corporation. 2V

Issue

     What is the extent of liability for successor corporations
under CERCLA?
     The discussion that follows  is equally applicable to
     successor corporations of generators and transporters
     associated with hazardous substances released  from CERCLA
     facility.

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                               -11-
 Summary
     When  corporate ownership is transferred  from one cor-
 poration to another, the successor corporation  is liable for
 the  acts of its  predecessor  .if the new corporation acquired
 ^wnership  by merger or  consolidation.   If,  however,  the
 Acquisition was  through the  sale or transfer  of assets, the
 successor  corporation is not liable unless:

        a)   The  purchasing corporation expressly  or
             impliedly agree* to assume such obligations;

        b)   The  transaction  amounts to a  "de  facto"  consoli-
             dation  or merger;

        c)   The  purchasing corporation is merely  a continu-
             ation of the selling corporation; or

        d)   The  transaction  was fraudulently  entered into
             in order to escape liability.

     Notwithstanding the above criteria, a successor corpora-
tion may be  held liable for  the acts of the predecessor
corporation  if the  new  corporation continues  substantially
the same business operations as the selling corporation.

Discussion

     The liability  of a successor  corporation, according to
traditional  corporation law.  is dependent on  the  structure of
the corporate acquistion. £V   Corporate ownership may be
transferred  in one  of three  ways:   1)  through the  sale of stock
to another  corporation;  2) by  a merger or consolidation with
another corporation;  or 3)' by  the  sale of its assets to another
corporation.  **/ Where a corporation  is acquired  through -the
•purchase of all of  its  outstanding stock, the corporate
entity remains intact and retains  its  liabilities, despite
2V  Set S.J. Transp. Dep't v. PSC Resources, Inc., 175 N.J.
     Sup«r. 447, 419 A.24 1151 (Super. Ct. Law Div. 1980).

     Note, Torts - Product Liability - Successor Corporation
     Strictly Liable for Defective Products Manufactured by
     the Predecessor Corporation, 27 Villanova L.R. 411, 412
     (1980) (citations omitted)  [hereinafter cited as Note,
     Torts - Product Liability!.

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                               -12-


 th* change of ownership."  27/   By the  same  token, a purchasing
 corporation  retains  liability  for claims  against  the predecessor
 company  if the  transaction is  in the form of  a merger or con-
 solidation.  ££/ Where,  however, the acquisition  is in the form
 of a  sale or other transference of  all of a corporation's assets
 to a  successor  corporation,  the latter is not liable for the
 debts  and liabilities of the predecessor  corporation. **/

      There are  four  exceptions to this general rule of non-
 liability in asset acquisitions.  A successor corporation
 is liable for the actions  of its predecessor  corporation if
 one of the following is  shown:

         1)   The purchaser  expressly or impliedly
             agrees to assume such obligations;

         2)   The transaction  amounts to a  "de  facto"
             consolidation  or merger;

         3)   The purchasing corporation is merely  a
             continuation of  the selling corpor-
             ation; or

         4)   The transaction  is entered into fraudulently
             in  order to escape liability. 30/

     The application of  the  traditional corporate law approach
to successor liability has in  many  instances  led  to particularly
     N.J. Transp. Dep't v.  PSC Resources,  Inc.,  175 N,J.
     Super. 447,  419 A.2d  1157 (Super. Ct.  Law  Div. 1980).

     !£•  A merger occurs when one of the  combining corpor-
     ations continues to exist; a consolidation exists when
     all of the combining  corporations ar.e  dissolved and an
     entirely new corporation is formed.

     See N.J. Transp. Dep't v. PSC Resources, Inc., 175 N.J.
     Super. 447,  419 A.2d  1151 (Super. Ct.  Law  Div. 1980),
     citing, Jackson v. N.J. Manu. Ins. Co.,  166 N.J. Super.
     488, 454 (Super. Ct. App. Div.  1979),  cert,  denied, 81
     N.J. 330 (1979).

!£/  Id>' Note, Torts - Product Liability,  supra note, 26 at
     413 n. 15-18.

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                              -13-
harsh and unjust results, especially with respect to product
liability cases. ££/  Therefore, in an effort to provide an
adequate remedy and to protect injured consumers, courts
have broadened the exemptions to the general rule by either
nibdifying or recasting the "de facto" and "mere continuation"
exemptions to include an element of public policy. 32/

     More recently, however,  the general rule has been aban-
doned altogether by several jurisdictions and,  in essence,  a
new theory for establishing successor liability has evolved
based upon the similarity of  business operations. 33/  The
new approach has been cast by one court in the following way:

           "jwjhere...the successor corporation acquires
           all or substantially all of the assets of the
           predecessor corporation for cash and continues
     See McKee v. Harris-Seybold Co..  109 N.J. Super. 555,
     264 A.2d 98 (Super. Ct. Law Div,  1970), aff 'A per_ cur Jam,
     1J8 N.J. Super. 480, 288 A.2d 585 (Super. Ct. App.  Div.
     1972); Kloberdanz v. Joy Mfg. Co.,  288 F.Supp. 817  (D.
     Colo.  1968).

     See N.J. Transp. Dep't v. PSC Resources, Inc., 175  N.J.
     Super. 447, 419 A.2d 1151 (Super. Ct. Law Div. 1980);
     See also/ Knapp v. North Am. Rockwell Corp.,  506 F.2d
     361 (3d Cir. 1974), cert, denied, 421 U.S. 965 (1975);
     Cyr v. B. Offen t Co., 501 F.2d 1145 (1st Cir. 1975);
     Turner v. Bituminous Gas Co., 397 Mich. 406,  244 N.W.2d
     873 (1976),

     The theory has also been referred to as the "product-
     line*  approach.  In adopting this new approach to
     successor liability, some courts  have abandoned the
     traditional rule of non-liability in asset acquisitions.
     See e.g., Ray v. Alad Corp.. 19 Cal. 3d 22, 560 P.2d
     3, 136 Cal. Rptr. 574 (1977).  Other courts have con-
     sidered the new approach as an exemption to the general
     rule.   See e.g., Daweko v. Jorqensen Steel Co., 290 Pa.
     Super. Ct. 15, 434 A.2d 106 (1961); Note, forts - Product
     Liability, supra note, 26 at 418  n. 38.  And, a few
     jurisdictions have rejected the new approach.  See
     Travis v. Harris Corp., 565 F.2d  443 (7th Cir. 1977);
     Tucker v. Paxson Hach. Co., 645 F.2d 620  (8th Cir.  19B1).

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                              -14-


           essentially the same manufacturing operation
           as the predecessor corporation the successor
           remains liable for the products liability claims
           of its predecessor." 3V

     This theory of establishing successor liability differs
from the "de facto" and "mere continuation* exemptions in that
the new approach does not examine whether there is a continuity
of corporate structure or ownership  (e.g^, whether the predecessor
and successor corporation share a common director or officer).
Instead, according to the new theory, liability will be imposed
if the successor corporation continues essentially the same
manufacturing or business operation as its predecessor corporation,
even if no continuity of ownership exists between them. 35/

     Until recently, this new approach for establishing successor
liability was confined mostly to product liability cases.
However, a recent New Jersey 'decision extended its application
to the area of environmental torts.  The Superior Court of New
Jersey, in N.J. Transportation Department v. PSC Resources,
Inc. _/r rejected the traditional corporate approach to
successor liability where the defendant and its predecessor
corporation had allegedly discharged hazardous wastes.  The
court reasoned that the underlying policy rationale for
abandonment of the traditional approach in defective product
cases is applicable to environmental torts.  Therefore, the
court held that a corporation which purchased assets of another
corporation and engaged in the practice of discharging hazar-
dous waste into a state-owned lake is strictly liable for
present and previous discharges made by itself and the prede-
cessor corporation because the successor continued the same
waste disposal practice as its predecessor.
34/  Ramirez v. Amstead Indus., Inc., 171 N.J. Super. 261, 278,
     408 A.2d BIB (Super. Ct. App. Div. 1979), aff 'd, 86 N.J.
     332, 431 A.2d 811 (1981).
     §£• Ray v. Al ad Corp., 19 Cal. 3d 22, 560 ?.2d 3, 136 Cal.
     Rptr7a74 (1977); some form of acquisition, however, is
     still required.  See Meisal v. Modern Press, 97 Wash.
     2d 403, 645 P.2d 693.

36/  175 N.J. Super. 447, 419 A.2d 1151  (Super, Ct. Law Div.
     1980);

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                              -15-


     A similar "continuity of business operation" approach has
been used in cases  involving statutory violations. *'/  The
Ninth Circuit, for  example, held  in a case involving the Federal
Insecticide, Fungicide, and Rodenticide Act  IFIFRA) ^£/, that
"EPA's authority to extend liability to successor corporations
stems from the purpose of the --»-ute it administers, which is
fo regulate pesticides to pr:     the national environment." 39/
furthermore, the court noted ir.ac "(t]he agency may pursue the""
objectives of the Act by imposing successor liability where it
will facilitate enforcement of the Act." ££/  After establishing
that there had been violations of FIFRA by the predecessor
corporation, the court found that there was substantial continuity
of business operation between the predecessor and successor
corporations to warrant imposition of successor liability.

     Although CERCLA is not primarily a regulatory statute,
public policy considerations and the legislative history of
the Act clearly indicate that federal law would be applicable
to CERCLA situations involving successor liability. *A/
Therefore, it is reasonable to assume that courts wouTd similarly
adopt the federal "continuity of business operation approach"
in cases involving  CERCLA.


Conclusion

     In establishing successor liability under CERCLA, the
£V  See Golden State Bottling Co. v. NLRB, 414 U.S. 168, 94
     S.Ct. 414, 38 L.Ed2d 388 (1973); Slack v. Havens, 522
     F.2d 1091 (9th Cir. 1975).

f£/  7 U.S.C. §136 et seq.

39/  Oner II, Inc. v. United States Environ. Protection
     Agency, 597 F.2d 184, 186 (9th Cir. 1979).

*o/  rd.

*V  See discussion, supra, n. 19?  One of Congress' primary
     concerns in enacting CERCLA was to alleviate the vast
     national health hazard created by inactive and abandoned
     disposal sites.  See e.g., Remarks of Rep. Florio,  126
     Cong. Rec. H. 9,154 (Sept. 19, 1980), 126 Cong. Rec.
     H. 11,773 (Dec. 3. 1980).

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                              -16-
Agency should initially utilize the "continuity of business
operation" approach of federal law.  However, to provide
additional support or an alternative basis for successor
Corporation liability, the Agency should be prepared to apply
the traditional exemptions to the general rule of non-liability
in asset acauisitions.
in asset acquisitions,

cc:  A. James Barnes, General Counsel

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                  	> I.M v m->NM£NTAL PROTECTION AGENCY

^ji^J            '        WASHINGTON. D.C. 204(0
W
                lS^C' r' C* S-C'r 3"C V.^O'O SO'' 0 /.Orr '/3"CDe"-e
                                 OCT  2 '984
    MEMORANDUM

    SUBJECT:  EPA/State Relationship in Enforcement Actions for
              Sites on the National Priorities List

    TO:       EPA Regional Administrators
              Directors, State Solid Waste Programs


         The Comprehensive Environmental Response, Compensation,
    and Liability Act of 1980 (CERCLA) empowers the Environmental
    Protection Agency to take certain enforcement actions to obtain
    responsible party cleanup of sites on the National Priorities
    List (NPL).  CERCLA does not, however, address the enforcement
    authority or role of States.  The result is that EPA and States
    have,  to this point, proceeded essentially independently, despite
    common, purposes.  Needed site coordination has been lacking in
    many instances, and there have been occasional conflicts regard-
    ing policies and specific site results.  The cause has not been
    disagreement over broad goals, but rather the absence of a basic
    framework for the relationship.

        The attached EPA policy statement creates such a framework.
    It has been developed over the past year in close consultation
    with EPA's Regions, and with the States through the Association
    of State and Territorial Solid Waste Management Officials and
    the National Association of Attorneys General.  Based on the
    recognition that EPA and the States share common interests, the
    policy stresses increased coordination and cooperation in en-
    forcement actions, beginning with site planning and continuing
    through to selection and implementation of sit* remedy.  It also
    resolves several operational issues in the current relationship:
    criteria arc established for determining lead responsibility for
    enforcement sites; EPA's intent to begin providing funding assist-
    ance for remedial investigations and feasibility studies at State-
    lead enforcement sites is stated; the nature and scope of EPA
    and State involvement in the other's site activities are defined;

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>• .'.
                                        •2-
        •nd provision  is made  for EPA/State  site  agreements  through which
        EPA and State  roles  and responsibilities  at  enforcement  sites
        can be agreed  and  documented  to prevent later misunderstandings
        or misapprehensions.

              Taken  together,  the actions described  in the policy provide
        • solid foundation for an effective  EPA/State relationship in
        pursuing  enforcement  actions  at NPL  sites.   The  absence  of a
        statutory structure  for the relationship  has presented some
        problems  in the  past*  and issues .will continue to arise, but a
        mechanism has  been created to allow  EPA and  States to deal with
        those issues in  a  way that can minimize conflict and improve the
        chances for acceptable solutions.
               Lee-M.  Thorr.as
         Ass-.stant  Administrator
            fcr Solid  Waste and
            Emergency  Response
         Environmental  Protection
                 Agency
             La~larchik
 President, Association
of State and Territorial
 Solid Waste Management
       Officials

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^  ,        	•-- j,« ,6.3 trx viKUNMENTAt PROTECTION AGENCY

^                        WASHINGTON, D.C.   ««
                              OCT  2 '984


                                                 SOLID WAITI AND (M(«CINCV MS»ONSE
  MEMORANDUM

  SUBJECT:  EPA/State  Relationship in Enforcement  Actions  for
                    n  the  National  Priorities  List
   FROM:
            Assistant  Administrator

   TO:       Regional Administrators


   PURPOSE

       One of  the major  goals  of  EPA enforcement  activities  under
   the Comprehensive Environmental Response,  Compensation,  and
   Liability Act  (CERCLA),  and  of  State enforcement activities  under
   State authorities, is  to obtain maximum possible and timely  respon-
   sible party  cleanup  of  sites on the National Priorities  List .(NPL),
   ""he purpose  of this  policy  statement is to establish a bas«  or.
   which an effective EPA/State relationship  can be constructed.

   GENERAL GUIDING PRINCIPLES

       The actions to  be  taken to establish  a more effective rela-
   tionship between EPA and the States in NPL site enforcement
   activities are guided  by certain general principles.  In brief,
   they" are:

       •  Aggressive enforcement  efforts on  a broad scale  are
          essential if EPA and the States are to make substantial
          progress toward dealing effectively with sites on the
          National Priorities  List.

       •  State  contributions. to  NPL »it« enforcement have been
          and  will continue to be significant.

       •  Close  cooperation and coordination between EPA and the
          States in planning  and  carrying out enforcement activi-
          ties is necessary to obtain maximum effect and to avoid
          possible conflicts  and  duplication.

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                               -2-
      •  States and EPA can maximize the number of enforcement
        actions by operating independently, conducting joint
        actions only where such action will best serve EPA and
        State  interests.

      •  EPA and State enforcement policies and procedures need
        not be identical/ but results of enforcement actions
        should be mutually acceptable.

      •  To the extent that State, and EPA enforcement programs
        parallel each other in substantive respects, such as in
        the process for determining the appropriate extent of
        remedy, the need for oversight of, and direct involvement
        in, the other's activities will be minimized.

      •  Sharino of information between EPA and the States is key
        to developing a more effective relationship.

      •  State experience in hazardous waste enforcement must be
        recocr.ized and accommodated in formulating agency policies.

      •  EPA will provide financial and technical support for
        State enforcement actions to the extent practicable and
        allowed by law.

      •  EPA remains ultimately responsible for cleanup at NPL
        sites, and retains the authority to take enforcement or
        response' actions where needed.

BACKGROUND

     From the survey of EPA Regional and headouarters officials
conducted to assess the nature and extent of the current EPA/State
relationship, and as a result of meetings for the same purpose with
State representatives under the auspices of the Association of
State and Territorial Solid Waste Management Officials (ASTSWMO)
and the National Association of Attorneys General (NAAG), it is
clear that EPA and the States generally agree on broad goals in
hazardous waste enforcement activities.  It is clear also that
frequently there are differences between EPA and States, and among
States, in capabilities and in legal and technical approaches
toward achieving these goals.  These differences — whether based
in provisions of law, policy decisions, or resource constraints —
can lead to situations where a responsible party cleanup or settle-
ment  agreement obtained by EPA'or a State does not satisfy  the
requirements or needs of the other*

     Problems created in such situations are particularly acute
when they arise in connection with NPL sites.  First, EPA and the
State each may be called on to explain or justify site results,

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                                                          OSWSR t 9831.3



regardless of which had the  lead enforcement responsibility.
Second, EPA potentially could be put  in the position of denying a
State request to delete from the NPL  a State-lead site, or of seek-
ing to delete an agency-lead site  in  the face of State objections.

     Uniformity of EPA and State legal and technical approaches
is not essential to prevent  these  situations, nor is uniformity
practicable.  CERCLA  is unusual among Federal environmental laws
in that it does not create a mechanism for authorizing State
enforcenent programs  on the  basis  of  certain minimum legal and
resource requirements that States  must meet.  Accordingly, there
is no requirement that State legal provisions and technical pro-
cedures be consistent with Federal standards, nor are there the
usual mechanisms for  required State reporting and Federal over-
sight.  This means that EPA  and the States must establish a
cooperative relationship  in  order  to  prevent, or at least minimize,
those instances where differences  in  capability or approach result
in a responsible party cleanup or  settlement which is not mutually
acceptable.

     The purpose of this  policy,, therefore,  is  to seek to create
an effective EPA/State relationship by taking certain actions to
increase cooperation  and  coordination, and by establishing a
mechanism for ongoing EPA/State efforts to address issues that
may later arise.

SPECIFIC ISS'JES I*: TH: CUPFENT EPA^STATE RELATIONSHIP

     To establish the context for  a discussion  of the specific
actions that EPA and  the  States can take to  build an effective
relationship, it is important first to describe briefly  the issues
in the current relationship  that have been identified through the
survey of EPA personnel and  the meetings with State representatives.
These issues are divided  among Coordination, State Enforcement
Authorities and Procedures,  and Resources.

     Coordination.  The absence of a  comprehensive policy regard-
ing EPA/State relations has  left the  Regional Offices and States
essentially in the position  of determining for  themselves the
nature and- extent of  their relationship.  As a  result, the  level
of coordination and cooperation varies among the Regions, and
even from State-to-State  within the same Region.

     Further, limited guidance from EPA to the  States on specific
issues has contributed to the differences  in policies and Proce-
dures that often exist among States and between States and  EPA.

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                               -4-


     Problens created by  the  lack of a comprehensive EPA/State
policy and by limited issue-specific guidance have been compounded
by the absence of systematic  information sharing between EPA ar,J
the States on the status  of enforcement actions.  Combined with"
the lack of procedures  for coordinating case management, EPA ar,d
States therefore have had limited knowledge of the status of the
other's activities.  These factors have led to occasional delays
and conflicts in administrative enforcement and litigation, and to
the discovery of problems —  if discovered at all — often late in
the enforcement process.

     State Enforcement  Authorities and Procedures.  Most States
must rely either~on broad State environmental or general statutes,
or on State hazardous waste legislation enacted prior to CERCLA.
As a consequence, few States  have the full range of authorities
available to EPA.  While  this has tsot prevented State enforcement
actions against responsible parties, it has meant that in some
instances actions have  been limited in scope or coercive potential.
For example, few states have  provisions analogous either to
Section 106 of the Act  which  provides for fines of up to $5,000
per day against any responsible, party who willfully violates or
fails or refuses to comply with an administrative order issued
under the section, or to  Section 107 of CERCLA which enables EPA
to seek treble damaoes  from any responsible party who fails with-
out sufficient cause to comply with a Section 106 administrative
order.

     With regard to enforcement procedures, two particular issues
have arisen.  First, some States work informally with responsible
parties,  which can lead to arrangements that are difficult to
enforce successfully.   Second, State negotiations with responsible
parties often are conducted without a time limit, and in some
instances involve one round led by the administrative agency and
a second round led by the attorney q«n«r*l's office.  In either
instance, negotiations  easily can become protracted.*/ In these
circumstances, it is often difficult to assess the eTfectiveness
or the likelihood of success  of State enforcement efforts' or
negotiations.  This uncertainty makes it difficult for'EPA to
define, or to plan for  implementation of, its role at the site
in a manner that is sensitive both to State concerns and to public
concerns about achieving  response objectives at the site.  Further,
this type of situation  can create EPA/State conflicts if site or
programmatic concerns cause EPA to conclude that effective enforce-
ment action is required on an expedited or more certain schedule.

I/ EPA's experience with  negotiations without tiro* limits resulted
7n the agency developing  a policy which targets negotiations for
completion within 60 to 120 days, unless more time is needed to
resolve complex issues  with responsible parties who in the agency's
view are negotiating in good  faith.

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                               -5-


     Resources.  Funding for State hazardous waste enforcement
programs, whether from appropriations or in some instances from
fees and taxes, ranges fro?r, negligible to substantial.  The norm,
however, is less than adequate.  A survey conducted by ASTSWMO in
mid-1963 showed that anticipated FY  1964 increases in fundinc among
the responding 47 States still would leave these States, in the
aggregate, with staffing levels some 40 percent short of optiitiu-.
The survey did not categorize technical and administrative person-
nel resources  as either program- or  enforcement-specific, but this
distinction is not significant, because enforcement activities
depend extensively on technical resources, and the survey indicates
overall conditions.

     Limited funding has had a particularly negative effect with
respect to the availability of certain necessary disciplines.  The
ASTSWMO survey indicates that the number of State-employed engi-
neers (civil,  sanitary, and environmental), chemists, geolocists/
hydrologists,  and soil scientists is less than half the number
needed.  No similar data exist with  respect to legal resources
available to State administrative agencies and attorney general
offices, but discussions with 'State  officials indicate that more
resources are  necessary, particularly with regard to para-legal
personnel,  investigators, and administrative support.

     Limitations in State funding also have been felt with recard
to laboratory  and analytical capabilities, training opportunities,
and the'adequacy of case preparation and documentation.

     The net effect of these resource limitations is to constrain
the scope of State enforcement activities, particularly with
respect to the number of actions that can be taken, but also  in
part with respect to the detail of field investigation and site
analys is.

ACTIONS TO BE  TAKEN'

     As is clear from the summary discussion of  issues confrontins
EPA and the States in the current relationship,  some'issues  cannot
be resolved throuoh this statement of policy.  For example,  funding
assistance for additional personnel  resources needed by the  States
is beyond the  current ability of EPA to provide, and any  inade-
quacies that may exist in State legal authorities is a matter for
States to resolve on an  individual basis.  However, most  of  the
issues can be  resolved by EPA and the States through the  actions
described in the remaining sections  of this document.

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                                -6-


      these  actions  are  based  not  only on  the general cuidinq
 principles  Stated earlier,  but  also  on  a  specific operating con-
 sideration.   EPA  is  responsible for  listing sites on the National
 Priorities  List and  for deleting  sites  that have been cleaned UD
 appropriately.  This means  that EPA  has a responsibility to assure
 to  the  extent possible  that human and environmental risks at
 sites are eliminated or at  least  reduced  to acceptable levels.
 Sites cannot  be deleted without such assurances.

      The actions  to  be  taken, described in the  remainder of this
 document, address:

      •  funding assistance  to States,

      •  criteria  for determining  lead responsibility for enforce-
        ment  sites,

      •  enforcement  planning  activities,

      0  extent of EPA and State involvement in  the other's activi-
        ties where  the  other  has  the enforcement lead,

      0  development  of  EPA/State  Enforcement Site Agreements  to
        clearly delineate the EPA/State relationship at each
        enforcement  site,

      0  ne chan isrr.s .for  scaring  enforcement information,

      •  State involvement in  the  development of EPA enforcement
        policies and  guidance for NPL sites, and

     •  ongoing cooperation with  States through ASTSWMO and NAAG
        to deal with  issues that  arise  in the future.

     Funding, to Assist  State  Enforcement  Activities.  It is clear
from the ASTSWKO survey that  States  require a broad range of
assistance to support needed  qualitative  and quantitative increases
in State enforcement  activity.-  Consequently/ the issue of enforce-
ment funding assistance from  EPA  was a major focus of an agency
work group that was  formed  to consider ways in which the scope of
multi-site cooperative  agreements night be expanded.  ASTSWMO and
NAAG were represented on the work group.

     The EPA Office  of  General  Counsel  (OGC) concluded that CERCLA
authorizes the Agency to fund remedial  investigations and feasi-
bility studies at State-lead  enforcement  sites.  Accordingly, the
work group developed  guidance to  incorporate these activities in
multi-sit* and individual site  cooperative agreements.  This  guid-
ance will be issued  as  part of  an addendum to the manual State
Participation in the  Superfund  Remedial Program.  Funding of  RI/FSs
at selected State-lead  enforcement sites  will begin in FY 1985.

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                               -7-


     However, the Office of General Counsel also concluded that
CERCLA does not authorize funding of other State enforcement costs.
In its opinion dated July 20, 1984, OGC stated that "the Superfund
eligibility of State enforcement costs is limited to those activi-
ties authorized by section 104(b).  Section 104(b) authority does
not extend to litigation or other efforts to compel private party
cleanups, or to monitoring or community relations activities asso-
ciated with such cleanups.  Payment of these State enforcement-
related costs will require more explicit statutory authority than
exists in section 104."

     Site Classification.  Current interim guidance for classify-
ing sites as Fund- or enforcement-lead establishes criteria for
making classification determinations.  It does not, however, pro-
vide specifically for State involvement in the process.  While
some Regions may consult with States in making classification
decisions, there has been no consistent effort in this regard.
The result is that there have been occasions where sites that have
been classified as Fund-lead might properly have been classified
instead as an enforcement site, based on information and data
available to the State, with the State assuming the lead responsi-
bility.  Accordingly, Regions should consult with States in classi-
fying sites to ensure that fuller information is considered before
decisions are made.  The final site classification guidance will
incorporate appropriate provisions.

     The Regions and States should jointly make determinations as
to whether an enforcement site is to be EPA- or State-lead, or
"shared-lead" where both the Region and the State will pursue site
enforcement.  A site should be classified as EPA-lead or State-
lead where direct participation in enforcement actions on  the part
of the other is not anticipated or is expected to  be minimal.  A
site should be classified as shared-lead where the Region  and State
determine that joint enforcement action can best achieve effective
site cleanup.  Regardless of a site's classification, the  Regions
and States should adhere to the provisions described later  in this
document regarding -consultation and cooperation  in the course of
enforcement activities.

     In determining lead responsibility for enforcement sites, the
Regions and States should apply the following considerations:

      (1) past site history,  i.e., whether there  has been EPA  or
         State enforcement activity at  the site;

      (2) the effectiveness of  enforcement actions  to date;

      (31 the strength  of legal evidence  to support EPA or  State
         act ion;

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                                                          <—•«—. It rfw-*..»
                               -8-


      (4) the severit-  :f problems at the site;

      (5) the national  5 :;-.if icance of legal or technical  issues
         presented by  :.'.* site; and

      (6) the availability of EPA and State legal authorities and
         personnel and  funding resources adequate to enable
         effective action.

      A site initially  classified as State-lead on the basis of the
above considerations will be classified finally as State-lead if
the State assures that  it will:

      (1) prepare, or have the responsible party prepare,  an RI/FS
         (or equivalent as agreed by the Region and the State),2/
         and provide for public comment, in accordance with EPA""
         guidance;

      (2) conduct  negotiations with responsible parties fo.rroally
         (e.g., culminating  in the issuance of an enforceable
         order, decree, or equivalent) and, to the extent practic-
         able, within  agreed time limits;

      (3) provide  ftr public  comment on settlements, voluntary and
         negotia-rc cleanups, and consent orders and decrees  in
         accordance with EPA guidance;

      (4) pursue and ensure implementation of  a remedy that  is at
         least as protective of public health, welfare and  the
         environment as a cost-effective remedy as that term  is
         defined  in the National Contingency  Plan; and

      (5) keep EPA informed of its activities,  including -consulting
         with the Regional Office when issues  arise that  do net
         have clear-cut solutions.

      These assurances  should be incorporated  in the EPA/State
Enforcement Site  Agreement (described later in this document).


£/ In accordance  with  agency guidance issued  on March 27, 1984,
"regarding procedures for deleting cites from  the NPL, documenta-
tion  to support deleting a State-lead enforcement site "should
include the State feasibility study (if one has been prepared),
... or a copy of an  EPA or State study, or  an EPA or State  review
of a  responsible  party  study or documents, used by the Region to
determine that .  . . no further cleanup is appropriate."  To  the
•xtent that a State or  responsible party conducts an RI/FS  in
accordance with agency  guidance, the deletion process for State-
lead  enforcement  sites  will  be simplified.

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                                -9-


      Where  a  State  is  unable  to provide  the above assurances in
 connection  with  a cite that  initially  has been classified as
 State-lead, the  site cannot  finally  be designated as State-lead.
 Zn  such  instances,  consideration should  be given to classifying*
 the site  as shared-lead so that State  enforcement interests can
 be  directly represented in site actions.

      Finally, all current EPA-  and State-lead enforcement .site
 designations  should be reviewed by the Regions and States in
 light  of  these criteria and modified as  necessary.

      Planning.   In  accordance with recent agency guidance, site
 management  plans are to be de'-"*:—«d for all sites on the National
 Priorities  List.  As indicate        ?  guidance, site management
 plans  are intended  principally       dynamic planning tools for
 allocating  resources and estima*  .  the  timing of technical and
 legal  actions.   For EPA-lead enforcement sites, the Region should
 develop  the plan in consultation with  both the State administrative
 agency and  the State attorney general's  office.^/ Such consultation
 is  necessary  to  ensure early  that interested StTte officials are
 aware  of  the  general schene  and timing of EPA's intended actions.
 For State-lead enforcement sites', the  State should develop the
 plan  in consultation with the Region,  and obtain the concurrence
 of  the State  attorney  general's office before the plan is .adopted.
 Site management  plans  for shared-lead  sites should be developed
 jointly.

     Extent of EPA  Involvement  in State-lead Enforcement
 Actions.  There  are two aspectsto EPA involvement in State-lead
 actions.  The first concerns  the type  of assistance and support
 that the Region  agrees to provide.   The  second concerns actions
 that the Region  subsequently determines  to be necessary in the
 course of State enforcement ac.tivity.

     Among  the types of assistance and support that Regions can
 provide are review  of  technical and  legal, documents, making con-
 tractor assistance  available, providing  direct technical assistance
 through Regional personnel,  and providing expert witness testimony
 through EPA or contractor personnel.   Regions should plan to
 review technical and legal documents associated with State-lead
 enforcement sites?  other assistance  and  support should be provided
 to  the extent that  resources  allow.  Appropriate provisions should
 be  incorporated  in  the EPA/State Enforcement Site Agreement.

 V  In  some  States,  the attorneys who prosecute enforcement actions
Ire assigned  directly  to the program offices.  In this situation,
 involvement of the  attorney  general's  office may be unnecessary.
 Therefore,  statements  made at various  places in this document
 referring to  consultation with  or concurrence of the attorney
 general's office should be read in this  context.

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                               -10-


     Where a State does not  -snt  EPA assistance  in  its site acti-
vities, particularly with  recard  to review of technical and legal
documents, the Region shoulc  jivise the Stste that  it must accept
the  risk  that cleanup may  lacer prove to be  inappropriate,  in
such an instance, the site cculj  net be removed  from the NPL, and
subsequent EPA enforcement action might be necessary.

     Regions should continually monitor State-lead  enforcement
activities.  Where the Region determines that the terms of the EPA/
State Enforcement Site Agreement  are not. being followed or that the
State is  not making effective or  timely progress, the Region should
consider  involving the agency in  site activities to a greater degree
than previously agreed.  Potential actions include  taking enforcement
action in lieu of State action, and assuming lead responsibility
for  the site.

     Determinations regarding whether greater EPA involvement is
necessary, and the nature  of  response,"will  be made jointly by the
Region and the Office of v.'aste' Programs Enforcement in accordance
with the  following considerations:

     (1)  the State's willingness  and ability to  correct the
          problem;

     (2)  the availability  of  EPA  resources;

     (3)   the likely efficacy  of EPA action?  and

     (4)   the significance  of  agency inaction.

     Where Federal enforcement action is contemplated/ the decision
to pursue such action will be made also in conjunction with the
Office of Enforcement and  Compliance Monitoring  - Waste.

     Extent of State Involvement  in EPA-lead Enforcement
Actions^.State interest in  the conduct and  outcome of EPA enforce-
ment actions must be recognized,  and State experience and expertise
accommodated in EPA's site activities to the extent possible.
While mechanisms are created  in various sections of this policy for
coordinating the planning  and execution of enforcement actions, and
for keeping States informed  of the status of EPA actions, specific
provision also needs to be made to consider  State interests, exper-
ience, and expertise in the  course of EPA enforcement activities.

     Accordingly, Regions  should  consult and, wherever practicable,
seek agreement with the States in the design and conclusions of
RI/FSs, in the identification of  the recommended remedy to be
pursued with responsible parties, and in the determination of the
final remedy.  There may be  occasions where  time or litigative
constraints preclude efforts  to consult or seek  agreement with a
State.  In such cases, the Region should proceed with its actions,

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                                -11-


but also should  inform  the State  of  the  circumstances as soon as
possible.   Situations also nay  arise where a State is unable to
agree with  a particular action.   In  these instances, to the extent
that time and other  considerations permit, the Region should seek
to  resolve  the  issues which prevent  State agreement.  However,
absence of  State agreement initially, or inability subsequently
to  resolve  any  outstanding issues, is not a bar to necessary and
timely action by the Region or  to determination by EPA of appro-
priate action to be  taken.  EPA recoanizes that a State may seek
additional  remedy  through  its own'authorities if the State dis-
agrees with an  EPA action.

     EPA/State  Enforcement Site Agreements.  Once lead responsi-
bility for  an enforcement  site  has been  finally determined, a
site management plan has been prepared, and the extent of antici-
pated EPA and State  involvement in the site determined, the Reaion
and State should develop an EPA/State Enforcement Site Agreement.
The Agreement will delineate the  roles and responsibilities of
EPA and the State, lead officials or contacts, mechanisms for
coordination and communication, and  any  other arrangements or
understandings,  including  the applicability of State standards.4/

     The purpose of  the Agreement is to  ensure that  the extent of
the EPA/State relationship at each site  is fully thought out and
documented  to prevent later misapprehensions or misunderstandings.
(Detailed guidance for  preparing  the Agreements will be developed
in consultation with ASTSKMC anrt  NAAG and issued separately.   In
developing  the guidance, consideration will be given-to makino pro-
vision for  multiple sites  to be incorporated in a single Agreement.)

     Sharing Enforcement Information.  As stated previously in
this .policy, the absence of a system for sharing enforcement status
information often  has left EPA  and the States with little knowledge
of the actions  of  the other.

     Development of  site management  plans can be an  effective
starting point.  Since  a site-management plan is to  be prepared
through consultation between the  Region  and the State, and since
it must be  updated periodically,  a mechanism has been created  for
beginning and continuing site-specific discussion and information
sharing.  This  applies  equally  to EPA-lead and State-lead enforce-
ment sitts.


4/ EPA will endeavor to incorporate  State standards  in the selected
Temedy where the State  standards  are consistent with • cost-effective
remedy as defined  in the NCP.   Accordingly, Regions  and States should
explore the applicability  of State standards and incorporate the out-
come in the Site Agreement.  Where  the Reaion and State are unable
to agree, the State may choose  to pursue independent action under
its own authorities.

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                                -12-


      In  addition  to  EPA  contacts with States to keep site manage-
ment  plans  current,  the  Region  and State officials, including
representatives of the State's  attorney general, should meet
periodically  to review the  status of EPA and State actions.  The
review should  concentrate on  NPL sites, including the status of
enforcement and responsible party RI/FS activities, but potential
NPL sites may  be  addressed  as well.  Frequency of these meetings
is a  matter for Regional and  State discretion, but should be no
less  often  than twice a  year.   Further, the Regions should contact
appropriate State agencies  regularly to advise them of impending
actions  and keep  them abreast of developments, and States similarly
should inform  the Region of impending actions and developments in
State enforcement activities.   Arrangements regarding these contacts
and meetinqs should  be incorporated in EPA/State Enforcement Site
Agreements.

      Finally,  agency guidance in two areas creates additional
mechanisms  to  keep States informed of EPA's enforcement activities
and to allow State comment.   The pending community relations gui-
dance provides for a public comment period both on administrative
orders on consent and on remedial investigations and feasibility
studies, including those prepared by EPA or responsible parties
for Federal enforcement-lead  sites.  (Both provisions are amono
chanpes  to  be  proposed in the National Contingency Plan.)  Further,
guidance implementing agency  rules regarding intergovernmental
review of certain agency actions provides up to €0 days for States
to comment  on  the agency's  intent to initiate RI/FS activities.
While responsible party  RI/FS activities are not included in the
intergovernmental review process because they do not constitute
Federal  actions,  they nonetheless will be subject to State review-
in accordance  with the impending community relations guidance.

      In  implementing the community relations review procedures,
the Region  should assure effective opportunity for State comment
on consent  orders and decrees (the latter subject to public comment
by Department  of  Justice regulations), and agency and responsible
party RI/FSs,  by  providing  copies of the documents directly to
interested  State  administrative agencies and to the State attorney
general's office.  These activities, however/ should not be re-
garded as a substitute for.  the  extensive consultation and coordi-
nation with States 'described  earlier in this policy.  State
interests are  to  be  considered, and accommodated to the extent
practicable, prior to public  comment periods for agency actions.

      Development  of  Policies  and Guidance.  The agency is pro-
ceeding  to  develop enforcement  policies and guidance on a broad
range of NPL site issues, and will continue to do so for some
tine  into the  future.  The  value of increased State involvement
is clear, as is the  need for  timely distribution of policy and
guidance documents to the States.

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                                                         OSWER I 9831.3
                               -13-


     Wherever practicable, EPA will provide opportunity to comment
on draft NPL site enforcement policies-and guidance documents that
are of interest to States.  The opportunity will be made available
either to all States through'the Regions when time permits or, when
time constraints are particularly acute, to representative States
through the Association of State and Territorial Solid Waste
Management Officials and the National Association of Attorneys
Cencral.  Further/ for those issues which will require substantial
effort to study and resolve, E?A will seek to increase State parti-
cipation through early consultation and, where appropriate, by
including State representatives on any study or work groups that
may be formed.

     Once policy and guidance documents have been made final, the
Regions should, upon receipt, provide copies to State administra-
tive agencies and attorney general offices, and make arrangements
for briefing State officials where appropriate.

     EPA has an interest also in State hazardous waste enforcement
policies and guidance, and encourages States to consult with the
Regional Offices in their development and to provide to- the Regions
copies of final documents.

FUTURE EFFORTS

     EPA intends to continue to work directly with States, and
throu-gh the Association of State and Territorial Solid Waste
Management Officials and the National Association of Attorneys
General, to allow frequent and regular meetings of State  represen-
tatives and agency officials.  Through these arrangements, EPA
and the States will be able to continue the dialogue, begun  in
the-course of developinc this policy document, to find solutions
to issues that arise in'the course of CERCLA and related State
enforcement programs.

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SOM
F»d«f»l Refiner /  Vol. SO. No. 24 /•Tuesday. February 5. 19SS / Notice*
                                                                                              OSWER  *  9835.0
ENVIRONMENTAL WIOTtCTTON
AOINCY
Haarooue Waatt Errtoroanwrrt Pettey
       R Environment*] Protection
.Agency.
Acno*c Request for public comment
        r The Aft ncy is publishing
today it* intthm CERCLA settlement
policy in order to solicit public comment
OB it. Tb« policy govern* pnvttt parry
cltiaup tnd contribution proposals
under tht Comprehensive
Environmental Respoue. Compensation
ud Liability Act of 1MO ("CERCLA" or
"Superfund"). Th* AICBCT i» *l*o
publishing it in ittachment • mort
detailed discussion ol issues raised by
this policy.
OATC Cominenti must be provided on or
before April 8.19U.
MM FUTTMIH mFOMSATMN CONTACT:
Debbie Wood. U.S. Environmtntal
Prottcnon Agency. Office of W»ne
Programs Enforcement. WH-527,401 M
SL SW_ Washington O.C 20460. (202!
382-4629.
SUPPLUMMTAItV INroWMTWC This
intena policy ducnbei the approach
tht Environmental Protection Agency it
now taking in evaluating private party
settlement proposals for cleanup of
hazardous waste sites or contribution to
funding of response action under the
Comprehensive Environmental
Response. Compensation, and Liability
Act (" CERCLA" or "Saperfund")- It
reflects our recent reevaluanon of
Agency settlement policies. The policy
is also generally applicable to imminent
hazard enforcement actions under
section 7003 of RCRA.
  The Agency's hazardous waste
settlement policies have resulted in
numerous comprehensive private party
cleanup*, and in stronger settlements
with private parties. Some  potentially
responsible parties (PRPs). however.
have arfu*d that Agency settlement
policies have foetered litigation, and
discouraged voluntary private parry
cleanup action*. They have sugjested a
number of changes, aucfa as expanded
releases from liability for PRPs and
routine provision to PRPs of protection
against possible contribution actions by
non-settling parties. These suggestions
have been made with tht expectation
that such changes would substantially
encourage voluntary response.
  Tht Agency's interim policy on
CERCLA case settlement has therefore
been amended to:
—Include additional incentives for
   private parry cleanup:
                    —Articulate policy.decisions previously
                      made on a case by case basis in
                      evaluating particular settlement
                      offerr
                    —Address additional policy concerns.
                      including releases from liability tnd
                      contribution protection: and.
                    —Include a itatatnent of the general
                      principles governing EPA « CERCLA
                      enforcement program.
                      This policy Mt> forth the general
                    principle* governing private parry
                    settlement under CERCLA, and specific
                    procedure* for Region* and
                    Headquarters to us* in aasetsing private
                    party settlement proposal*. It address**
                    negotiations concerning conduct of or
                    contribution to the remedy determined
                    by the Agency as a mult of the
                    remedial investigations and feasibility
                    studies. Tht following topics art
                    covered:
                      1. General principles for ETA review
                    of private-party  cleanup proposals:
                      2. Management guidelines for
                    negotiation:
                      3. Factors governing relttse of
                    information to potentially responsible
                    p antes:
                      4. Criteria for assessing settlement
                    offers:
                      5. Partial cleanup proposals:
                      6. Contribution among responsible
                    parties:
                      7. Release* and covenant* not  to sue:
                      (.Targets for litigation:
                      9. Timing for negotiations:
                      10. Management and review of
                    settlement negotiation*.
                      The policy doe* not explicitly address
                    PR? participation in  the Agency's
                    selection of remedies for private  party
                    cleanup*. That topic was addressed in a
                    memorandum from Lee Thomas and
                    Courtney Price,  entitled "Participation of
                    Potentially Responsible Parties in
                    Development of Remedial Investigations
                    and Feasibility Studies under CERCLA"
                    (March 20. IBM).
                      The polio** and procedures tat forth
                    In the interim policy are guidance to
                    Agency aad other government
                    employee*. Th* policy tats forth
                    enforcement priorities and procedures.
                    and internal procedure* which art not
                    appropriate or necessary subject* for
                    rulemaking. Thus, the policy doe* not
                    constitute rulemaking by the Agency.
                    and may not be relied on to create a
                    substantive or procedural right or
                    benefit enforceable by any other person.
                    Th* government may. therefore,  take
                    action that is at variance with policies
                    and procedure* contained in thi*
                    document.
                       Tht Agency i* publuhing and
                    soliciting comment on this interim policy
                    for • number of reasons. Tht Agency
racotnizn that the public it very
concerned with hazardous waste
enforcement. We believe that thi* policy
will substantially benefit the public by
encouraging responsible parties to
undertake appropriate and long term
remedies through settlement*. We alto
believe that the policy will yield better
result* if the public and potentially
responsible parties understand the
policy and our reaaotu for adopting It
  This policy was originally drafted in
December. iBtt. ha* been to* lubjeci of
extensive review and evaluation byiee
Agency and the Department of Justice. It
Is therefore being published a* interim
policy. We will reevaluat* thi* policy in
light of our working experience with
Implementing it and the public
comments that we receive.
  The Agency statement of policy
follows, A more detailed discussion of
issues for public comment is included in
the Appendix.
  Dated: January a. U*5.
fKfcW.McGnw.
Acting AttiitantAdminittraur. Offiet of
Solii Wettt end Eowjency Kttponu.
  Dated: lanuary 2*. 1I8S.
CMiraey M. Prise.
Auitunt Adaiiniitmtor. Offiet o>
Enfommtn: and Camplionet Maaitonny.

Memorandum
December 1 lt*4.
Subject Interim CERCLA Settlement
   Policy
From: Lee M. Thorn**. Assistant
   Administrator Office of Solid Waste
   and Emergency Response. Courtney
   M. Pnct. Assistant Administrator
   Office of Enforcement and
   Compliance Monitonng F. Henry
   Habicht.-C. Assistant Attorney
   General Land and Natural Resource*
   Division. Department of justice
To: Regional Administrator*. Regions I-
   X
   Thi* memorandum set* forth the
general principles governing private
party settlemenu under CERCLA. and
specific procedures for the Regions and
Headquarters to use in assessing private
party settlement proposals. It address**
the following topics:
   L general principles /or EPA review of
 private-parry cleanup proposals:
   1 management guidelines for
 negotiation:
   J, factors governing release of
 information to potentially responsible
 parties;
   4. criteria for evaluating settlement
 offers:
   5. partial cleanup proposals:
   6. contribution among responsible
 parties:

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                    FedaraJ Refiifrr  /  Vol. 30.  No. 2t f TiiMday. February 5. 1985 / Notlcm
                                                                     sosi
   % release ud eonveaant* not to sue:
   8. target! for litigation:
   la management end rtvitw of
 settlement negotiations.

 AVpttcabUlty

   This memorandum incorporates tbt
 draft. Hazardous Waste Case
 Settlement Policy- publi* had ia draft ia
 December of 1963- It is applicable not
 only to multiple perry case* but to all
 dvtt hazardous waste enforcement
 CUM under Superiuad. It is unmlly
 applicable to iauninent hazard
 ea/orcemeat actions undar section 7003
 ofRCRA.
   This policy «*ubushai crlttrte, tot
 evaluating private party settlement
 proposal* to conduct or contribute to the
 funding of response action* including
 removal and remedial action*. U tA*o
 «ddr«t«i* settlement propoitlt to
 contribute to funding after a rtiponi*
 action bai bttn completed- It does not
 adores* private-party pio^o*tA» \o
 conduce remedial investigation* and
 feasibility trudiej.  These prapoMi« ire
 to b« evaluated under crttena
 e$ubUth«d in the policy guidance horn
 lee  M. Thomai, A**i*tant
 Administrator, Office Of Solid We*t«
 and  Emergency Response. And Courtr.ey
 Pnee, A**MiUr.\ MinunsttMtor. Office o!
 Enforcement and Compliance
 Monitoring entitled "Participation of
 Potentially Respopsibls Parties in
 Development of Remedial Invesrigationa
 and  Feaiibility Studiaa und»r CERClA".
 (March JO, 1964)

 U Geawtl Maeipit*

  The Government'* goal in
 implementing CEflCLA ii to achieve
 effective and expedited cleanup at U
 many uncontrolled hazardous waate
 facilities .as possible. To achieve thU
 goal tbt Agency I* committed to a
 strong, and i
 can iiae the Fund to assure that site
 cleanup will proceed expedittously, and
 than Ufa to recover these costs from
 non-settling responsible parties. Where
 the Federal government accepts less
 than 100* of cleanup costs aad ao
 financially viable responsible parties
 remain. Superfufld monies may be used
 to make up the difference.
  • The Agency recognise! the value of
 some measure of finality in
 determinations of liability and ia
 settlements generally. PRJpi frequently
 want some certainty in return for
 assuming the costs of cleanup, and we
 recognize that thii will be » valuable
 incentive for private parr/ cleanup. PRPi
 frequently seek i final determination of
 liability through contribution protection.
 release! or covenants not to sue. The
 Agency will com>d*r rtleasei from
 liability in appropriate j.iuancnj. and

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                   Faeiatal Router / Vol 50. No.  24 / Tuttday. February S. 1965 f Notjgu
will also coruud« contribution
protection in united oreuawtaaea*. Tbi
Agency will «l*o take egfjreeaivt
enforcement action egainit tbooe part**
whoee recalcitrance prevent*
settlements, la bnafiBi coat rtcovtry
action*, the Agency wUl al*o attempt to
rajaa any remaining claims under
CCKCLA section 108. to to* ixunt
practicable.
  The remainder of thi* memorandum
Mti forth specific polidn for
implementing thtM general principle*.
  Section n HU font (hi management
guideline* for negotiating with IMI then
all reaponeible partiea for partial
Mttiemeata. Thia taetioB reflect* tha
Agency* wtlllngnee* to ba flcxiblt by
coaaidanni ofTan for cleanup of la*i
than 100% of claanup activities or co*t».
  Section in lata forth guideline* on thi
relea** of informetion. The Agency
recognize* that »d equate information
facilities mort successful negotiations.
Thus, tha Agency will combine a
vigorous program for obtaining the data
aad information nceatiary to facilitatt
Mttlamanu with a program for releasing
information to facilitatt communications
among responsible paraai.
  Section* IV and V to ditcui* the
a 'eria for evaluating partial
•eiUemenu. A* notad above, in certain
drcumatiDcas the Agency will entertain
settlement offer* from PRPs which
axtaad only to pan of the tite or part of
tha coat* of claanup at a tite. Section IV
of this memo tau forth criteria to ba
uaad is evaluating tuch offers. These
criteria apply to all cases. Section V sen
forth tha Agency's policy concerning
of. en to perform or pay for discrete
phases of an approved cleanup.
  Sections VI and VH relate to
contribution protection and releases
from liability. Where appropriate, the
Agency may consider contribution
protection aod limited releases from
liability to help provide some finality to
settlements.
  Section vm seta forth criteria for
aelecnaaj enforcement case* aad
identifying targets for litigation.  As
discussed above, effective enforeemnt
depends on careful caae selection and
the careful selection of targets for
litigation. The Agency will apply criteria
for selection of case* to foci* sufficient
resources on cases that provide  the
broadest possible enforeemnt impact, (n
addition, targets for litigation will be
Identified in light of the willingness of
partie* to perform voluntary cleanup, aa
wall ae conventional litigation
management concerns.
  Section IX sets forth the requirements
governing the timing of negotiations and
section X the provision for Headquarters
review. These section* address  the  need
to provide the Regiooa with increased
flaxibilty in negotiations aad to change
Headquarter* review in order to
expedite site cleanup.

a Management GuiocUae* he
Negotiated
  Aa a guideline, the Agency will
negotiate only if the initial offer from
PRP* constitutes a "iN'tntttJ
proportion of the ooets of daaaup at the
site, or a substantial portion of the
needed remedial action, entering into
diacuaaion for lets than a fptmejin*!
proportion of cleanup coats or remedial
action needed at tha site, would not be
aa effective use of government
resource*. No specific numerical
threshold for initiating negotiation* ha*
been established
  In deciding whether to start
negotiations, the Region* should weight
the  potential resource demands for
conducting negotiation* against the
likelihood of getting 100% of cost* or a
complete remedy.
  Where the Region propose* to
negotiate for a paraai settlement
involving less than the total costs of a
cleanup, or s complete remedy, the
Region should prepare a* pan of it*
Cat* Negotiation* Strategy a dreaft
evaluation of the case uamg the
settlement cntena identified in section
IV. The draft should discus* how each of
the  factors in section IV  applies to the
sit* in question, and explain why
negotiation* for lea* than all of the
cleanup coit*. or a partial remedy, are
appropriate. A copy of the draft should
be forwarded to Headquarters. The
Headquarters review will be u*ed to
identify major issue* of national
significance or issues that may involve
significant togil precedent*.
  In cenain other categories of cases, it
may be appropriate for the Regions to
enter into negotiation* with PRPs. even
though the offen from PRPs do not
represent a aubstaatUl portion of the
COM of cleanup. These categories of
  • administrative settlement* of coat
recovery action* where total cleanup
costs were lest than S200.00Q-.
  • claim* in bankruptcy:
  • administrative settlement* with de
minima contributor* of wastes.
  Action* tubject to thi* exception* are
adnuniantiv* settlement* of cost
recovery caae* where ail  the work at the
sit* ha* been completed aad all coat*
have been Incurred. The figure of
S20OOOO refer* to all of the coat* of
cleanup. The Agency ia preparing more
detailed guidance on the appropriate
fora of such settlement agreement*, and
the type* of conditions that must be
included.
  Negotiation of claim* in bankruptcy
may involve both present owner*, where
the United State* may have an
edoinutratm costa claim, aad other
parties inch a* past owner* or
generators, where the United State* may
be aa unsecured potential creditor. The
Ration* should avoid becoming
hwohred in bankruptcy proceeding* If
then ia little likelihood of recovery, and
should recognise the riak* involved ia
negotiating without creditor ttatua. It
may be appropriate to raqunt DO] filing
of a proof of *!•"• Further guidance 1*
provided in the Memorandum from
Courtney Price entitled "Information
Regarding CStQA Enforcement
Agaiaat Bankrupt Paree*." dated Mey
24,1914.
  In negotiating with de aunimtt pmrtie*.
tha Region* should limit their efforts to
low volume, low toxiaty disposers who
would not normally make a significant _
contribution to the costs of .cleanup in ~
any case.
  In considering settlement offer from
de minimi* contributors, the Region
should normally focus on achieving cash
settlement*. Regions should generally
not enter into negotiations for full
•dminiatranv* or judioal settlements
with release*, contribution protection, or
other protective clause*. Substantial
resource* ahould not be invested in
negotiations with dt minima
contributors, in light of tha limited cost*
that may be recovered, the tune needed
to prepare the necetsary legal
document*, the need for Headquarter*
review, potential rtt /udieata effects.
and other effect* that dt muumtt
aettlemenu may have on the nature of
the case remaining to the Government.
  Partial settlements may also be
coniidered in •ituarion* where the
unwiUingne** of a relatively small group
of parties to tattle prevent* the
development of a  proposal for a
ff*tmtPMal portion of costa or the
remedy. Proposal* for settlement In
these orcomitaaca* ahould be a*se*sed
under the criteria  eat forth ia section tV.
  Earlier version* of th:* policy included
a threthoid for negonauon*. which
provided that negotiation* ihould not be
commenced unles* an offer we* mad* to
settle for at least 80ft of the costs of
cleanup, or of the remedial action. Thai
threshold ha* been eliminated from the
fiaal version of thi* policy. It mutt be
emphaaued that elimination of this
 threshold doe* not mean thai tin
Agency is therefore more willing to
accept offer* for partial settlement The
objective of the Agency i* still to obuin
 complete cleanup by PRP*. or 100%  of
 Ae cost* of cleanup.

-------
                    Federal RafiaHf / Vol  SO. No  2* / Tut»iday. P'Knury S.  1985 / Notices
                                                                      5037
 Ok ..«l*ase *tf laformatioe,
   Tbf Piracy Mill "eWese taforantioa
 com.«sj\« 'Jie in« tn PRP* to facilitate
 discusktons 'of »ettJ«ri>«nt among PRPs.
 Thu information wtil includr.
 —identity of notice letter recipients:
 —Velum* and nature of wuttt to the
   «xttnt identified u Mm to the site:
 —Ranking by volume of material sent to
   the site, if available.
   In dateraining tbt typ« of Information
 to be releesed. the Region should
 consider the poiaiblt impacts oa any
 potential litigation. The Rtfioai should
 take tttps to aatun protection of
 confidential and deliverative materiel*.
 Tb« Agency wtll generally not release
 ectual evidentiary material The Region
 should itati on tech rtlMMd summary
 that it U preliminary, that it was
 furnished in tht count of eompromiM
 negotiations (Fid. Rulti of Evidtnct
 408). and. that it it not binding on tht
 Federal Covtmatnt
   This information release should bt
 pncadtd by and eombintd with a
 vigorous profniffl for colltctini
 information from responsible partita. It
 remains standard practice for tht
 Ajtncy to ust tht uuarmation lathtrinf
 •uihonnss of RCRA and CERQLA with
 respect to all PRPs at a site. This
 in'- -nanon rtlttst should generally bt
 c      ontd ot> a rtaprocal rtlaasa of
 in.  Cation by PRPs. Tht information
 request nttd not bt siaultanwus. but
 EPA should rtcaiv* tht information
 within a rtasontblt time.

 FV Settlement CritatU
   The obi«ctivt of negotiation* ia to
 colltct 100% of dtanup costs or
 compltlt dtanup from rtsponsibli
 parties. The Agency recognizes that in
 narrowly limited circumstances,
 exceptions to this f oal may ba
 appropriate, and has estabUthedcritaria
 for determining whara such exceptions
 an allowed. Although tht Agency will
 coatidar offers of laaa than 100* to
 accordanca with this policy, it wtll do so
 in light of tht Afancy's position.
reinforced by meant coon decisions.
that  PR? liability U itriet (oint and
savaral ualasa it can ba shown by tfaa
PRPs that injury at a sit* U claariy
divisibla.
  Basad on a full avalutioa of tht facts
and~t conprahtnaivl aaalytis of all of
tht Ustad of taria, tha Afaacy may
considar accaprtaf offtrs of fats than
100 parcant Rapid and afftctiv*
Mttlamant depends oa a thorough
•valuation, and an affmsiva
informatton coUaction profram is
nacassary to prapara affaenva
•valuation*. Propoaals for less than total
Mttlamant should S* a»»«iw
-------
                   Ftdml RtfUrar / VoL SX  No. 24  / Tuwdiy, Ftbnanr 8. 1985 / Notict*
 to reimburse tht Fond la nasoeabls
 installment* 9»« a period of time, if th*
 parry ii unable to pay in a lump turn.
 aad in»ullmtnt payment* would benefit
 the Government. A (fractured
 Mttlement providing for payments ovtr
 doe should  be at a payment level that
 take* into account th* party'* cash flow.
 AD exetMive amount could fore* a
 party into bankruptcy, which will of
 count make collection very difficult.
 St* tb* memorandum dattd August28-
 1MX entitled "Cost Recovery Actions
 under StctioB 107 of CERQA" for
 addition*! guidance OB  this  subject.
 S. Uttfativt  Ritki in Prsx»tding to Trial
  Utigetive  nskt which might ba
 aaeouatand at tnal tad which ahould
 wai|fa in contidtranon of any settlement
 offer includa traditional factors tuch ai:
  a. Admtuibiiity of At Gevimaent't
 tvidtnct
  If necessary Government  avidtnc* ii
 unlikely to b« adnuttad in a  trial
 bteausa of procedural or »ub»t*ntiv*
 problem* in  tht acquisition or station
 of. tht evidence, this infirmity should bt
 considered ai reducing tht
 Covtnuntnt'i chanca of succtas and,
 therefore,  reducing the amount tht
 Government ihouid txpect to receive in
a settlement.
  b. Adtquacy of tht Covt.Tmtnt'i
tridtnct
  Canain  aspects of this point havt
 alnady batn discuiMd abovt.
Howtvtr.  it  dastrvis mention «gain
 because '.he  Government'* cast deptnda
on wb*tantial quanttats of  sampling.
 analytical and othtr technical data and
expen testimony. If tht  evidence in
 support of tht Government's cast  is
incomplete or based upon controversial
science, or if the Government'} evidence
is otherwise unlikely to withstand the
scrutiny of • thai the amount that the
Government might expect to receive in a
settlement will be reduced.
  c. Availability of dtftntti
  In the unlikely event that  oat or more
 of the settling parties appears to havt a
 defense to the Government's action
 under section lOTfb) of CERCLA. the
 Government should expect to receive
 less in a settlement tram that PRP.
 Availability of one or more defense* to
 one PRP which are not common to all
 PttPi in the east should not however.
 lower the  expectation of what  an entire
 offering group should pay.
 ft Public //ittrttt Coiuidentiont
  The purpose of site cleanup is to
 protect public health and the
 environment. Therefore, in enslytins a
 settlement proposal  the timing of the
 cleanup and the ability of the
 Government to clean up the site shuuld
be considered. For example, if the State
cannot rand its portion of a Fund-
financed cleanup, t private-party
cleanup proposal may be given more
favorsbU consideration thaa one
received In t case when the Slate can
fund Its portion of cleanup costs. If
necessary.
  Public interest considerations also
Include the availability of Federal funds
for necessary cleanup, and whether
privately financed action can begin
more quickly than Federally-financed
activity. Public interest concerns may be
need to Justify a settlement of less than
100% only when there is a demonstrated
need for a  quick remedy to protect
public health or the environment.
7. frtetdtatiaJ Vaiut
  In somsrease*. the factual situation
may be conducive to estsblishing a
favorable precedent for future
Government action*. For example.
strong case law can be.developed in
cases of first impression, in addition.
settlements in such cases tend to
become precedents in themselves, and
an examined extensively by PRPs in
other cases. Settlement of such cases
should sjwayi be en terms most
favorable to the Government. Where
PRPs will not settle on such terms, and
the quality and quantity of evidence it
strong, it may be ta the overall interest
of the Government to try the case.

8. Valut of Obtaining a PnnntSiai
Ctnoin
  It money can be obtained now and
turned  over to the Fund, where it can
earn interest until the tune it ia spent to
clean up a site, the net present value of
obtaining the  sum offered ia settlement
now can be computed against the
possibility of obtaining a larger SUB in
the future. This calculation may show
that the net present value of the earn
offend is settlement is. ia reality, higher
thaa tht amount the Government can
expect to obtain at trial EPA has
developed an economic modd to assess
theM and othtr related economic
factors. More information on thii model
can be obtained from tht Director.
Office of Waste Program! EnvorcemeaL
A Ififfwtitf andAanratiat Factor*
  All analyses of settlement proposal*
should flag for the decision maken any
apparent inequities to the settling
parties inherent in the Govtramtnfs
case, and apparent inequlUt* to other* if
the settlement pwpoaal i* accepted, and
any aggravating factor*. However, it
must be under*tood that the statute
operates on the underlying principle of
strict Uebility  in*' th«t equitable
matters are not d
JO ffoturt of (At Cow that JUnoint
A/tar Seu/tflMfit
  All settlement rvalue ttoo* should
address the natun of th* case that
remain* if tht settlement is accepted.
For example. If then an no financially
viable parties left ta proceed against for
the >>«IM««« of tat flt"T after tat
settlement, the settlement otter should
constitute evtrytblng  the Government
expect* to obtain at that sit*. The
question* art: What dot* tat
Government gain by settling tail portion
of the castT Dot* tht etttittBtat or ta
tarm* harm the remaining portion of tht
oastf Will the Government have to
expend the same amount o! resource* to
try the remaining portion of the case? If
so. why should the settlement offer be
accepted?
  This analysis  it extremely Important
and should com* at the conclusion of
th* evaluation.

 V. Partial Qtaaut*
  On occasion. PRPi may offer to
perform or pay for one phaie of a tit*
cleanup (such «* a turfac* removal
action) but not commit to any othtr
phase of the cleanup (lucb a* ground
wattr treatment). In tome
circumtiaitces, it may be appropriate to
inter into settlement* for tuch partial
cleanups, rether than to resolve all
Unit* in one Mttlement. For example, in
some casts it is necessary to conduct
initial phases of lite cleanup in order to
gather lufBcitnt data to evaluate the
need for and type of work to be done on
subsequent phase*. In inch eaies. orTen
from PRP* to conduct or pay for less
than all phases of site cleanup should be
evaluated in the utne manner aad by
the tea* criteria a* set forth sbove.
Settlements performed it the tite. This
provision dot* not cover preparation of
an RI/FS, which is covered by a
teptratt guidance document Lte
Thomu aad Courtney Price's
"Participation of Potentially Responsible
Parties in RI/PS Development" (March
 VI. CMtribwHoa Proteetlou
  Contribution among mponiiblt
 parties is based on tht principle that a
 Jointly and severally liable party who
 ha* paid all or a portion of a jvdgmnt
 or settlement may be entitled to
 reimbursement from other jointly or
 severally liable parties. When th*
 Agency reaches a partis! sctUtratnt
 with some paroe*. it will frequently
 pursue an enforcement action agsinsl
 non-settling nsponsibl* parties to
 recover the remaining eo*t« of cleanup.
 If such an acCfln i* undtrtskin. there is
 a possibility that tnost r.on-»««lor*

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                            RefiXs* / VoL SO. No.  Z4 / Tueidiy. Fabmary 5. 1965 / Notice*
 would la rum sue settling parties. If this
 action by nonaettUag parties is
 successful, ihta the Mttiiai parties
 would end up paying a larger than of
 cleanup costs tbaa was dstanined in
 the Agency s settlement Thie ia
 obviously  a disincentive to settlement
   Contribution protection in a COOMDI
 decree can pravant this outcome, la a
 contribution protacttoa clauaa. (he
 UniUd Slate* would a|nt to redoce  its
 lodgment against tat non settling
 puttee, to the extent accessary to
 extinguish tat atttllaf party's Ubility to
 the MDMttUni third party.
   The Agency recognizes toe value of
 contribution protacttoa ia limited
 situations  ia order to provide some
 measun of finality to settlsaenla..
 Fundamentally. w« believe that icttlini
 parties an protected from contribution
 action* aa  a matter of law. bated on the
 Uniform Contribution Among
 ToEtfeasors Act That Act provide* that
 when settlements are entered into ia
 "food faith", the settlors are dlacharted
 tram "all liability for contribution to any
 other joiat tortfeasors." To the extent
 that 'his law ii adopted aa (he Federal
 rule of dociaion. there will be no need
 for apeeific clauaea in content
 agreements to provide contribution
 *otoctfon»
   rhere haa not yet been any ruling on
 ^a iaane. Tout, the Agency may still  be
 uked to provide contribution protection
 in the form of offsets and nductiona in
 judgment Ia detenainiaf whether
 sxpiicit contribution protection dauiet
 are appropriate, the Region should
 coninder the following factors:
   • Explicit contribution protection
 dauMt are leneraUy not appropriate
 unleat liability can be cliarly altocatsd.
 to that the ritk of nepportionment by a
 judfe in any future action would be
  • Inclution ebould depend oa case-
by••'
an solsly technology-based.
  Expansive releases may b* xor.-
appropriate when the private party
remedy is a demonstnted effective
alternative to land disposal sach aa
incinenbon. Such releases are possible
whether the hazardous material ia
transported offsite for tnanneat or the
tnatment takes place on site. In either
instancs. the use of tnatment can result
in gnater certainty tha! futun- prrm»
will not occur.
  Other remedies may be less
appropriate for expansive «!*•»**
particularly if the consent order or
agreement does not include perfarauac*
standards. It may be appropriate in such
circumstances to negotiate nlejtcs t.'ut
become effective seven! yean ifu?
completion of the nmcdial action, to
that the effectiveness end reliability of
the technology can be ciasriy
demonstrated. The Aee.icy anttnpatn
that responsible pastes may b- ahV to
tchievt a gnster decree n( rrnj-.a m

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S040
Raejata* / Vol 50. Nc. U  1  Tuttdiy. February 5. ifles / Notice
wttteotou when the state of scientific
understanding concerning thiM
technical U*UM hu advanced.
  Rafardlea* of the relative
expaaiiveneM or stringency of tht
releea* IB other respect*, it i mpiifmim
tinltmtot document* mutt include
ceopeaen allowing tht Covinxacnt to
modify terms and conditions of thi
agreement for tht following type* of
circumstance*:
  • Where previously unknown or
undetected condition* that ariat or are
diMOvarod at tbt tit* aftar the time of
the agreement miy present an imminent
and nbitantial endangerment to public
health, welfare of tht environment
  • Whart tbt Agency receives
additional information, which wai not
avaiiabia at tht cunt of tht agreement.
concerning  tht scientific dttemunationi
on which tht settlement wn premised
(for cxanplt. health tflact*  associated
with level* of expoiurt. toxitity of
hazardous subitanct*, end the
appropriateness of tht remedial
technologies for conditions at the  lite)
and tius additional information
indicant thtt »ite condition* may
prat ant an imnuntnt and substantial
endangermont to tht public  hailth or
walfan or lha environment
  la addition, ralaaaa clauses must not
preclude the Government from
recovtriai cost* incurred in responding
to the type of imminent and substantial
endangeonemi identified above.
  la extraordinary cimimitancca. it
may be clear after application of the
settlement enttna sat out in section IV
that tt is  in  the public interest to agree to
a man limited or more expansive
release not subject to the conditions
outlined  above. Concurrence of the
Assistant Administrators for OSWER
and OEO4 (and the Assistant Attorney
General when the itleaae is given on
behalf of tat United State*) must be
obtained before the Government's
Defoliating tug, J, iBihorUed to
negotiate retarding each a release or
cevenant
  The extent of releases should be the
same, whether the private parties
conduct the cleanup themselves or pay
for Federal Government cleanup. When
responsible parties pay for Federal
Government cleanup, the release will
ordinarily not become effective until
cleanup it completed cad the actual
costs of the cleanup are ascertained.
Responsible parties will thereby bear
the risk of uncertainties arising during
execution of the  cleanup. In limited
circumstances, the release may become
effective upon payment for Federal
Government cleanup, if the payment
includes a carefully calculated premium
or other  financial instrument that
            adequately insures the Federal
            Government against thtsi aa-TertaintSes.
            Finally, the Agency sia, oe mere willing
            to settle for leas than the total costs of
            cleanup when it is not precluded by a
            relaaae clause from eventually
            recovering any additional costs that
            ought ultimately be i&cantd at a aite.
             Ralaaaa clauses an also subject to the
           following Umitadona:
             • A ralta
         taae or covenant may be given
 only to thi PRP providing the
 consideration for the raloaae.
   • The release or covenant must not
 cover any claim* other than thoae
 involved in the  case.
   • The release must not address any
 criminal mattet.
   • Reletses for partial cleanups that
 do not extend to the entire site must be
 limited to the work actually completed,
   • Federal claima for natural resource
 damages should not be released without
 the approval of Federal trustees.
   • Responsible partial must release
 any related claims against the United
 Slates, including the Hazardous
 Substance* Responat Fund.
   • Where the  cleanup i* to be
 performed by the PRP*. tht release or
 covenant should normally become
 effective only upon the completion of
 the cleanup (or phase of cleanup) in a
 manner satisfactory to EPA.
   • Release clauses should be drafted
 a* covenant* not to sue. rather than
 rtltaiH from liability, where  thi* form
 may be neceitary  to protect the legal
. right* of the Federal Government
   A release or covenant not to tu*
 terminate* or seriously Impairs the
 Covemmest's rights of action against
 PRP*. Therefore, the document should
 be carefully worded so that the intent of
 the partis* and extant of the matters
 covered by the release or covenant are
 dearly stated. Any vcpaed settlement
 ""*•*"''? a rale*** .- •-• a poettbie
 ambiguity will be returned for further
 negotiation*
 vm. Targets for Utigaooo.
   The Regions  should identify particular
 case* for referral in light of the following
 factor*
 —Substantial environment*!  problems
   exttt
 —The Agency's case ha* legal merit
 —Tat amount of money or dearop
   involved la significant
 —Good legal precedent it possible
   (case* should be rejected where the
   potential for advene precedent is
   subitanttal^
 —The evidence is strong, well
   developed, or capable of
   development
 —Statute of limitations problem* exist;
—Responsible parties art financially
  viable.
  The goal of me Agency it to bring
enforcement action wherever needed to
asaure pnvatt party cleanup or to
recover cost*. The following type* of
case* are the highest priorities for
referrals;
—tor actions in which aH cost* have
  beea incurred:
—Combined 108/107 action* IB which a
  aignificant phaae ha* bean completed.
  additional injwctive relief is needed
  and identified, aad th* Fund will not
  be used:
—108 action* which will not be the
  aubject of Fu&d-finaaced cleanup.
  Referrals for injunctw relief may aUo
be appropriate in caaes when it is
possible that Fund-financed cleanup will
be undertaken. Such referral* may be
needed where there are potential statute
of limitation concern*, or where the site
has been identified ai enforcement-lead,
and prospect* for succeuful litigation
are good.
  Regional oBce* ihould periodically
reevaluate current target* for referral to
determine if they meet the guideline*
identified above.
  At indicated before, under the theory
of joint and several liability the
Government i* act required to bring
enforcement action against all of the
potentially responsible parties involved
at a aita. The primary concern of the
Government in identifying target* for
litigation it to bnng a mtntonous case
against responsible parties who have
tht ability to undertake or pay for
reipons* action. The Government will
determine the targets of litigation in
order to reach the largest manageable
number of partee. baaed on tojoetty and
volume, and financial viability. Owners
and opera ton wtfl generally be the
target of litigation, oaleu bankrupt or
otherwise judgment proof, la
appropriate case*, the Government will
conaidtr pmeemring daim* in
bankruptcy. The Government may aUo
•elect targets for litigation for limited
porpoeea. such as ait* aceeaa.
  Partie*  who are targeted for litigation
 are of course not precluded  from
 involving parties who have not beea
 targeted in developing settlement offers
 for consideration  by the Government.
   In determining the appropriate target*
 for litigation, the Government will
 coniider the willingness of parties to
 settle, udemooMrated In tht
 negotiation stage. In identifying a
 manageable number of pame* for
 litigation, the Agency will conaider the
 recalcitrance or willingne** to **tt)e of
 the parties who were involved in the

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                    Ftderal RetJrter / VoL SO.  No. 24 / Tuesday. February 5.  1985 / Notice*	     5041
 negotiation*. The Agency will aleo
 coiuidtr oihtr aggravating aad
 mitigating factors concerning
 responsible ptrty action in identifying
 targets for litigation.
   In addition, it may be appropriate.
 when tha A|tncy » conducting phased
 cleanup and hat reached a settlement
 for oat phase, to Rnt aut only non-
 MttUnf coapaaita for tbt next phase,
 atauming that tuch financially viabte
 partitt an available. Thia approach
 would not pnduda suit agamat Mttilag
 partita, bat oon-tettlon would bt sued
 Initially.
   Tbt Agency recognizes that P«daral
 agencies may bt rtsponiiblt for cleanup
 coata at htzardoua want sites.
 Accordingly. Federal facilities will bt
 itautd nonet Ittttn aad administrative
 ordira whtrt appropriata.'inatead of
 litigation, tha Agency will ust tha
 procedures titabliihtd by Executive
 Ordtn 12088 and 12140 and til
 appHcabla Mamonnda of
 Understanding to resolve issues
 conctnuni luch agency's liability. Tht
 Agency will takt all steps ntctuary to
 tncoura|t luccaiaful negotiations.

 ". TUsing of Nt«odtttoot

   (Jndar our rtvistd policy on
 rtapoaaiblt party participation ia RI/FS,
 PRPt htvt laerttitd opportunities for
 inyolvemtnt in tht dtvtiopmtnt of tht
 rtaudial investigations aad  feasibility
 atudita which tht Agency uan to
 idtndfy tht appropnatt rtmtdy. In-light
 of tht fact that PRPs will havt rtcetvtd
 nonet Itttart aad tha information
 identified ia itction ID of tail policy.
 prtlltiiMon negotiations can bt
 conducted ia an expeditious fashion.
  Tbt Negotiation* Dtcuton Oocumaat
 (NDO). which followa completion of the
 RI/FS, maktt Iht preliminary
 Identification of tht tppraprittt rtmtdy
 for tht site, Pnlittgation negotiation*
 bttwttn tht Govtramtnt and tht PRPt
 thould normally not txtted for nort
 than 00 day* tfttr approval of tht NDD.
 If aifnificaai progreoa la not madt within
a reasonable amount of ttoa. tht
 Ajtncy will not htfiutt to abandon
 negotiations and procttd immtdUttly
 with tdniaiatrative tenon or litigation.
 It thould bt notad that thatt attpt do
 not prtcludt hvthtr negotiation!.
  Exttatiofu can bt conaidtrtd ia
compltx cuat whtrt thtrt it no thrttt
of atrioutly dtUytnf cltaaup action.
Aay trttnaion of thit ptrtod mutt bt
prtdlcattd on htvtaf a food faith offtr
from tht PRPi whlck If nccttafully
 ^•toUattd. will Mvt Iht Covtmntnt
  bttannal ttmt and mourctt in
 .(taiaiaf tht cleanup obrtenvn.
X. MtBtftBtst aad Rtvitw of
Stnltffitflt Ntfotttttooa.

  All (tttlaoant document* mu*t
rtctivt coacumact from OWPE and
OECM-WMtt, aad bt approved by tht
Aaaiatiat Adminiitratcr of OECM ia
accordanct with daltfauoaa. Tht
OMaaftmtat yiidtlint diacaattd la
Stction n allow* the Region* to
""""•"g* ntfooatipna if ruponaiblt
putt* makt aa iaititi offtr for a
uibaftntlal praporttoa of tht cltaaup
coata. Btfort mmntnonf ntfotunont
for partial Mttltmtatt. tat Rtfiona
abould prtptn a preliminary draft
evaluation of tht caat uain$ tht
Mttitmtnt cntaria in aaction IV of thia
policy. A copy of thit evtluation thoud
bt forwarded to Htadquarttra.
  A final detailed evaluadon of
atnltmanta ia rtquirtd when tht
Rtfiona rtqutat Headquarter* approval
of thtat ttttltmtatt. Thia written
evaluation should bt tubraittid to
OECM-Wtitt and OWPE by tht left!
and ttchntcal ptnonntl on tht caat.
The** will normally bt tht Rational
attorney and technical rtprtatntativt.
  Tht tvaluatioa atmonuidum should
tadicata whether tht Mttltmeat ia  for
100K of tht work or cltaaup coata. If thi*
lifun ia Itaa than 100%. tht
aitmoraaduffl thftutd iacludt a
ditcutaion of tht advantaijtt aad
dUadvaatagt* of tht prapoatd
Mttlemtnt aa mtiturtd by tht criteria ia
section IV. Tht Ajtncy expect* full
evaluation* of each of 'Jit criteria
specified  in tht policy and will return
inadequate evaluation*.
  Tht Rtfioa* art authorised to
coacludt-ttttlamtata ia certain type* of
hazardous waste cuts on their own.
without prior review by Htadouarttrt or
DO). Cut* atltcttd for thia treatment
would nomaDy havt lower priority for
ttttpttoa. Cattforitt of caatt MI
•object to Headquanera review Include
Dtfottatioa for coat recovery etaet
uadtr taouaoo tad ntfotiation of daima
Hied ia bankruptcy, la cott recovery
caata. tht Rtpoa* thould pay particular
attention  10 wtijhiaj the reaeurcee
ntcttatry to condnct ntfottttiona aeJ
libtauon  aatiaat tha ^mouata that aey
be recovered, aad the proapecta (or
  Authority to tpptar and try caatt
btfort the Bankruptcy Court would not
be delegated to the Rations, but would
be retaiatd by tht Department of
futtict. Tht Department will (Ut ctaat
whtrt aa acceptable nejotitted
settlement cannot bt retched. Copitt of
ttttltmtnt documents for such
agreements should be provided ot
OWPS and OECM.
  Specific details eonceminf these
authorizations will bt addrttted in
deltftnon* thit will bt forwarded to tht
Region* under stptrttt cover.
Httdquartera is conducting aa
evaluation of tht efftcoventtt of
txiattag dtltganoaa. and i* as*et*ing
tht poaaibility of additional delegation*.

Not* ea Putpott aad Utea «f tail
  Tht policiM aad procedure* tit forth
here, tad latent! Government
procedure* tdopted to implement thttt
polio**, art intended a* guidance to
Agency and other Government
employe**. They do not constitute
rulimaking by the Agency, and may not
bt relied on to create a lubstantivt or
procedural right or benefit enforceable
by any other person. The Government
may takt action that is at variance with
tht policies tnd procedure* in this
memorandum.
  If you havt any que*rions or
comment* on this policy, or problems
that need to bt addrtsted in further
guidance to implement thia policy,
please contact Gent A. Lucero. Director
of the Office of Waste Programs
Enforcement (FTS 382-48141. or Richard
Maya. Senior Enforcement Counsel (FTS
382-4137).

Appendix—Oiscuaaioo of Itautt Rtiatd
by Interim CERCLA Settlement  Policy
  This appendix discmtt in greavr
dttail certain issues raised by the
interim policy and identifies specific
issues for public comment. It focuse* un
issue* of broad public concern, rather
than issues related primarily to internal
Agency management. The section
headings of thia attachment generally
parallel the specific secnona of th*
enforcement policy.
I CeaaralFriadptea
  Tbt discussion of general principle*
*tts oat tht overall philotophy
governing tht Suptrfund enforcement
program. To achieve tht greatest
possible number of timely aad efftcttv*
cltaaup action*, tha Agency must strikt
« btlaaca betweea two opposite
approachea. One approach emphatic*
quick man to the Fund and
eaforetmeat authoritiea. and the other
features more incentives for priv*:«
party deeaup.
  We have attempted to combine
feature* of both thttt approtcbM into t
vigorous enforcement program that will
encourage private party cleanups. Thw
approachea. and their limitation*. ar»
dttcribtd in gtetttr dttvl btlow.
  Under one general approach, the
Aftney would quickly rttor to r.-h^r

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SBC
Federal
I Vol SO.  No. 24 / Tut«diy. Febnury l  1963 / Notice*
eaforceaeat action each u Uttfitioa
•ad sdmuustrativt order*. or Federal
government, dtaaup under the Fund.
RtleaM* from lUbitity and explicit
contribution protection dauaei would
be f trietly limited under thit approach,
•ad tht time for negottatiaai pnor ta
eBforcament or ^T^^-^ntn^+rl  deeniip
action would be toon. Tht limitation of
thi* general tppreach it thatEPAaay
Ml tlwtjn bt iblt to Bore to  elMB up
•noogh site*, bectuM of rettrtctioni on
the UM of tht Food aad tat tat ud
TMOUKU needed to COBptl  cUiflUp
niuugh enforcement Furtheiinun.
muy pnvmt* partite believt that, u •
general Bitter. thty can conduct
cleanup icfcvitit* BOM quickly and at
law cott than tht Ftdtrai govtrnaent.
and hev* elamtd that thu approach may
ditcoureft privatt party initittivit.
  Uodtr tht othtr general approach, tht
Agency would providt additiooal
ineentivtt to tncounft PRP dtariup.
For txample. ttttltmtou would allow
Bon expansive reltates from liability,
contribution prottctioo would bt
provided. and EPA would takt ti much
bat at atedtd to rtsolvt issues through
negotiations btfort it rttoned  to
eaforctmtat action or Fund-financed
cltanup. It ij poaaibla that tht Agency
would mcfa aort negotiated
settlements u&dtr thii ipproach. Ont
limitation of thu tpprotch it that tht
Aftncy would aatumt financial ritkt if
it bteoBtt clear ia light of changed
circumstance* or unprovtd knowltd|t
of trteprobltmt that additional dtaoup
action it needed: t xpantivc rtitaics
from liability would prtdudt tht
Aftncy from punuini retponsiblt
parties for additional cleanup caiu.
  Alto, protrscttd negotiation* would
dtlay dtaatfp of sites. Futthtr, privatt
party dtanupi may not iacrtaM without
u ttttndant aggmtiv* tnforeement
program (unilateral adauittrative
ordan, imminent haxard tn/ofotBtnt
action* uadar CERCLA ttctioa 108. ud
cocMtcovery action* md«r ttctioa  107)
because private partUt Bay lack an
iac*nUvt to rtack oafotUted
ttttlttntat*.
  Wt oavt atttapud to toilet a
baknet bttwwm tht two directions.
rtooftuzifli that no approach Bay bt
ooapltttiy adequate to tatufy all of
tfaeat concenu. While tht Aftncy
rmaint eonunitted to a ttronf arid
% ifforout ea/orceaeat pntna. it
ncofnizei that atfotiittd pnvait party
cleanup* art tttmtial to t lucenaful
dtannp projrmm. Tbt Aftr.cy will
           ptdiaaau to voluntary
  ttttleaenta or make* complete
  ttttltatnt iapottiblt.
    Tht Agency solicits comments on-
  whether any tddinonal factor* or
  pnaaplet thould be considered by tht
  Agency in formulating a tettlemeat
  policy.
  0. MaaegetMttl GwhiiM* for
dtaaup. and
tnforctatnt tenon afaintt thott partin .
whott rtctleitnnct prtvtnu
    Tht prtvlout Mtdement policy
  iadudtd a motuct aanattBcnt
  luidelint far DM after tht Aftacy bat
  evaluated tat catt utinf tat ttttitmant
  criterit and dttennined that the
  protptcu for tueceetfoUy purtutaf the
  catt were food. Tht fuidaUnt tttttd
  that tht Aftacy would ftatrally
  ntfoa'ttt only if tht initial offer from
  PRP» was for to percent of the rtmtdy
  or catu of dtanup. Thii 80 ptrctnt
  thmhold wat ttttbtithtd to that the
  Rational offictt would tptnd their time
  and mourcttotfoOatinf ctitt where
  settlement on tcctpttbrt term* tttmt
  sort likely. EPA contidtrtd rttttninf
  that guidtlint in thu inttrim policy.
    The thmhold wat cot intended to bt
  an abiolutt barrier to offers for let*
  thu 80 percent, and tht etriiett erttfu
  of thit inttrim policy indicated that
  offen for lett tbtn that amount mifht bt
  contidtrcd. However, tomt PKP* mty
  have ptrceived tht fttidtline u an
  tbtolutt barritr. and been rtluctant to
  tpprotch the Aftncy with ralid
  ttttltmtnt often becautt tbo*e offen
  were not for 00 percent of the remedy or
  cottt of tht cleanup. Minor volumetric
  contributor! of wattei to tht file would
  ftstrally be unwilling to offer 60
  percent It it alto pottible that t few
  recalcitrant partie* who rtfuitd to join t
  froup itttlement offtr could prevent the
  other* from cominf up with an 80
  percent offtr.
    The Afcacy contidtred a variety of
  approacatt for prwrtdinf potentially
  rwpoaalbla partet with a patter
  opportunity aad incentive for becominf
  involved In nejotiation*. They induda:
    • Fiimin«HW| (of threthold:
    • g»i«ti..H«| tht threthold for ctrtain
  catttoritt of PRP« or ca»t*.
    • Lowtrinf tat thrcshola-
    • Allowiuf devit tioa Iron the
  threthold when tht Region hat prepared
  an evaluation of the catt, and
  Headquarter! hat reviewed thit
  evaluation; W*A
    •  Allowing negotiation* with
  individual parti**.-a* leaf at the Rtfinn
  ultimately recover* a certain perceauee
  of the cofttc of citeUiup.
    The approach in tht interim policy
  conbinti tltmeau of a nuaber of thtte
  option*. It tliminttet the K percent
  threthold. Intteid. tht interim policy
  itatt* thai tht Aftncy will ntfouau
                                                          only If tht initial offtr frott PRP*
                                                          conttitutet t tubttannai proportion of
                                                          tht remedy or dtanup coat*. RefiOBJ
                                                          art uktd to wtifh tht potential
                                                          retource deaaadt for eonducflnf
                                                          nttouttion* axaintt tht likelihood of
                                                          Itnini 100 percent of cottt or a
                                                          complttt remedy. That, while an offer
                                                          of to percent it not required to initiate
                                                          Bttottationi. then will be catt* when
                                                          offer* of to ptrctnt will da deaaed
                                                          inadtquatt. Offtr* to oeaotiitt for t
                                                          partial Mttltaant or dtaaup thould be
                                                          mhiattd by Region* u*ing tht criteria
                                                          tet forth in tectioa (V of tat policy. A
                                                          copy of the** draft tvalaattoat art to bt
                                                          forwarded to Httdquantn for review.
                                                           Tht policy announced today alto
                                                          rtcofnixe» that in ctrtain limited
                                                          cattf one* of etMt, it may bt
                                                          tppropritte for Region* to tnttr into
                                                          Detonation* even though offer* do not
                                                          rtprtttot t tubttannai porann of cott*.
                                                          Thtte eattfont* iadudt tdminittrttivt
                                                          ttttlemtnti of cott recovery tction*
                                                          where total dtaaup cottt  were let* than
                                                          S200.000. »*i«
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                    Ftdtni RtfisttT / Vol.  JP. No. 24 MWtday. February  8. 1965  /  Noticw
                                                                      5M3
 parties an left to provide iht remaining
 cleanup costs.
   The Agency solicits commtnt on
 whether substantial settlementa will bt
 possible without a threshold «nd
 whether eliminating the thmbold will
 encourage a frtaur aiunbtr of
 strutatata for either • substantial
 porttM of the cotu of dtanup or of tht
 deanup itself. The Agtncy also solicits
 comment on how tht ttrm ~d» aaiumit
 contributor" should bt dtftntd.
 OL •sltast of lafotmalioa
   Tht Agency will release information
 concerning tbt site  to facilitate
 discussions of Mttltmtnt 10004 ****•
 This information will include
 —Identity of node* letter recipients:
 —Velum* md nature of wastes
   idfntifitd u dility for dtanup u'previously

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S044
Federal Renter /  VoL SO. No.  24 / Tuesday. Febrmry 5. 1985 / Noticet
unknown or undetected conditions arise
or an discovered after settlement, or if
new information indicate* thtrt may be
an imminent and substantial
endangerment to public health or
welfare or the environment
  Three broad approaches for
reconciling the concern* of the Agency
andofPRPsare to:
  • authorize releases for remedial
actions taken pursuant to EPA-approved
Rl/FS and design:
  • authorize total releases for remedial
actions taken pursuant to EPA-approved
RI/FS and design, but include a
reopener clause allowing the Agency to
seek additional cleanup action or
cleanup costs for unknown conditions
that indicate possible imminent and
substantial endangerments;
  • allow vary limited releases with
reopener clauses that not only cover
imminent and substantial
endangerments. but require private
parties to respond to all other releases
or threats of release from the site.
  The guidelines in this policy take the
second approach. We recognize that an
expansive release  policy would be an
incentive for private party cleanup, but
its value as an incentive must be
weighed against the scientific
uncertainties surrounding the nature of
exposure to hazardous substances, their
degree of toxicity. and the effectiveness
of remedies.
  Generally, the expansivenns of a
release will depend on the degree  of
confidence that the Agency has in a
remedy. It may be appropriate to
negotiate « more expansive release
where responsible parties consent to
meeting and continuing to attain health
based performance standards. In
addition, the Agency is considering
allowing more expansive releases where
the private party remedy is a
                    demonstrated effective alternative to
                    land disposal such as incineration.
                      Under the second approach, designed
                    for remedial actions, PRPs will be
                    required to assume risks of imminent
                    and substantial endangwmcnts
                    attributable to problems not known by
                    ths Agency at the time the remedy was
                    selected. In return, EPA will ba
                    responsible for responding to future
                    releases of contaminants that do not rise
                    to the level of an imminent and
                    substantial endangerment (assuming
                    mat if PRPs conduct th« remedial
                    action, the approved remedy is
                    maintained as required).
                      Releases will be of a similar scope.
                    whether activities will be conducted by
                    EPA or by pnvate parties. Any release
                    policy that allowed more extensive
                    releases when the Agency conducted
                    the cleanup actions than when private
                    parties conducted the  actions would
                    discourage private party cleanup, or. at
                    a minimum, encourage private parties to
                    pay for government cleanups rather than
                    conduct the remedial action themselves.
                    Private parry conduct of the remedial
                    action j* preferable because it is likely
                    to occur sooner than Agency cleanup.
                    and the use of private money frees the
                    government to use the Fund for other
                    sites with no identified PRPs.
                      The Agency is also  considering
                    whether a more expansive release may
                    be allowed when the PRPs hire an
                    approved contractor to perform the
                    cleanup, and the PRPs' performance is
                    secured by a satisfactory pr:=ium
                    payment or surety bond in an amount^
                    well in excess of the estimated cast of
                    the work. The term "preaiiim payment"
                    refers to risk apportionment device
                    under which the risk of an ineffective
                    remedy would be mitigated by a cash
                    payment in excess of  cleanup costs, or
                    another financial assurance mechanism.
  The Agency solicits comments on the
interim release policy, including the
circumstances under which releases
should be granted, reopener conditions
that should be included, and whan
releases should become effective. The
Agency also solicits comment on the
premium payment or surety bond
concept.

VUL Targets for Utiganoc

  The Agency is not legally required to
bring action against all potentially
responsible parties at a site. The interim
policy provides that the Agency will
continue  to identify targets for Litigation
on the basis of factors such as financial
viability, strength of ths case, snd our
ability to manage litigation. This policy
also provides an additional incentive for
voluntary cleanup by targeting
recalcitrants for litigation.
  The presence of a Federal agency a* a
potentially responsible party at a
hazardous waste site sometimes delays
negotiations because the position of the
Federal PRP may not be dear to
government negotiators or other PRPs.
The interim policy provides that Federal
facilities are to b« treated like other
PRPs in most respects except being
joined as a party in litigation. The
reference to administrative orders is
intended to direct the Regions to make
more aggressive use of administrative
orders in dealing with Federal facilities.
Instead of litigation, we will use the
procedures established by Executive
Orders 12C83 snd 12146 and appropriate
Memoranda of Understanding to resolve
issues remaining with these fccilities
after negotiation sr.ds. EPA will
encourage Federal facilities to
participate in the*; negotiations.
(FR Doe. SS-23M Filed 2-t-si •:« «n)

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                                             OSWER #9835.2
DRAFTING CONSENT  DECREES  IN HAZARDOUS WASTE




           IMMINENT  HAZARD CASES

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                       TABLE OF CONTENTS

                                                      Page


Incroduccion                                            l

I.  Releases and Contribution Protection                2

        A.   Scope of Releases                          2

        B.   Timing of Releases                         3

        C.   Limiting Releases to Account for           3
             an Inadequate Remedy

        D.   Contribution Protection                    5

        E.   Sample Language on Releases and            7
             Contribution Protection

II.     Site Access                                     9

III.    Authority of the Signatories                    10

IV.     Insurance/Financial Responsibility              10

        A.   Insurance                                  10

        B.   Financial Responsibility                   11

V.      Establishment of a Trust Fund                   1 1

VI.     Restrictions on Conveyance                      13

VII.    Priorities of Claims Versus Non-Settling        14
         Parties

VIII.   Preclusion of Claims Against the Fund           15

IX.     Joint Responsibility Anrong Responsible          16
         Parties for Implementing the Decree

X.      Public Access to Documents                      17

XI.     Dispute Resolution Provisions                   18

XII.    Stipulated Penalties                            20

XIII.   Admissibility of Data                           22

        Disclaimer                                      22

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                                                        OSWER #9835.2
            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHfNGTON. D.C, 20460
                             MAY   | Q85
MEMORANDUM

SUBJECT:  Drafting Consent Decrees in Hazardous Waste Imminent
          Hazard Cases                     /^.
                           f\   _ _  'N     j)
FROM:     Courtney M. Price\__J^^J_^  It HT — iTX-<-^-
          Assistant Administrator  for Eiforceraent
            and Complian/be Mjonitori
          Jac* W.
          Acting Assitnt Administrator for Solid Waste
            and Emergency Response

TO:       Regional Administrators


INTRODUCTION

     On October 19, 1983, the Office of Legal and Enforcement
Counsel issued guidance on drafting judicial consent decrees.
That document provides general guidance on drafting consent
decrees for settlement of hazardous waste cases, provides a
checklist of provisions which ordinarily should appear in a
decree, and offers sample language for many commonly used
consent decree terms.

     As the Agency enters into more and more consent decrees as
part of che hazardous was-te program, there has arisen an
increasing need for supplemental guidance specific to imminent
hazard enforcement actions under the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA) and section
7003 of the Resource Conservation and Recovery Act (RCRA).
These actions share common factual circumstances and yet are
sufficiently distinct from other enforcement programs to warrant
separate additional guidance.  For example, many hazardous
waste cases are characterized by multiple def endants , raising
unique liability issues which must be addressed in each decree.
This guidance document will focus on those consent decree
provisions which are vital to settlement in hazardous waste
cases, but which are handled differently (or not at  all) under
other programs.

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     The guidance is based upon and supplements the Agencv's
settlement policy as stated in a memorandum entitled "Interim
C'£RCLA Settlement Policy" (hereinafter "Settlement Policy")
vvhicr. we issued, along with Hantc Habicht of the Department of
Justice, on December 5, 1984.  EPA enforcement personnel should
interpret and apply this memorandum consistently with the
Settlement Policy and any subsequent revisions thereto.

     Each decree will be negotiated amidst widely varying factua.
situations.  Thus it is not appropriate to mandate tne inclusion
of model terms in each hazardous waste decree.  Rather,  this
memorandum is intended to suggest ways of achieving the  govern-
ment's settlement goals.  The sample consent decree provisions
may be incorporated as is or modified to accommodate the
inevitable eccentricities present in each case.

I.   Releases and Contribution Protection

     Although the greater portion of this memorandum addresses
terras which the government wishes to include within consent
decrees, it is also useful to discuss the major provisions
which are generally requested by responsible parties in  settlement
discussions, i.e., releases, covenants not to sue, and protec-
tions against contribution.  Since releases directly affect
liability for current and future hazards posed by a site, these
provisions must be drawn as narrowly as possible.

     A.  Scope of Release

         The Agency's policy, absent extraordinary circumstances,
is to grant releases from liability only for that part of a
cleanup performed or funded by the responsible parties.   If
only surface cleanup has been effected, the release should
clearly be Limited to liability for the work undertaken  to
respond to surface contamination (as defined in the decree),
and should expressly reserve our right to bring actions  against
the settling and non-settling parties for all other removal  or
remedial activities.  The release ordinarily should not  forgive
government oversight, monitoring, and enforcement costs„
unless the settlement payment takes these costs into account,
nor should it include natural resource damages without the
consent of the trustee.

     The consent decree should clearly state that the release
only extends to named parties to the agreement, and not to all
parents, subsidiaries, and affiliates, unless 1003 of the
cleanup costs are recovered.  Judicial or administrative causes
of action against any other parties are to be reserved.   This
language is particularly crucial where State law may require
the release of all joint tortfeasors if a release is given to

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any one_of them.  Although it is our view that CERCLA calls
for unirorm federal rules of decision, as a precautionary nu_
cor.sent decree releases in these States should be phrasea "in"
terns ot a covenant not to sue in oraer co -niaimize the sossibili"
chat non-settling parties would be released from liability oy
the decree.  Furthermore, the release should not extena co
liability under any statutory claim which did not norm che
basis for the complaint or clearly apply to the activities of
the settling party.  (For example, a RCRA subtitle C regulator-/
action release should not cover liability under section 3013
or 7003 of RCRA or section 106 of CERCLA).  Similarly, a release
or covenant not to sue should expressly apply only to civil
liability.  Finally,  in most cases (see the Settlement Policy,
page 15), releases should specifically reserve the defendant'1 s
redisposal liability, i.e., liability arising from off-site
disposal of wastes removed from the site.

     B.  Timing of Releases

         Many responsible parties have sought to obtain
releases which become effective in advance of completing the
needed abatement actions.  As a general rule, the Agency should
require that releases only become effective when all of the
work (including monitoring ) has been completed to EPA's
satisfaction, whether defendants financed or conducted the
work.

     C.  Limiting Releases to Account for an Inadequate Remedy

         Although settlement agreements are often designed to
accomplish a complete and permanent remedy, the Agency must
protect itself from the possibility that the chosen remedial
option will fail to entirely abate the releases at a site and
the potential for an imminent and substantial endangerment
resulting therefrom.  The Agency should use the consent decree
to minimize the risk that the government will be left to finance
a future cleanup resulting from failure of the remedy at the
site*

         L»  Where circumstances permit, compliance with
the decree should be linked to achieving enforceable performance-
based standards.  The Agency must be in a position to move
against the settling parties for failure to attain a standard.
To the extent possible, the decree should not merely be a
broadly phrased agreement on a remedy designed to generally
meet the goals and objectives of the decree or the statute at
issue.

         2.  The decree should contain detailed oversight,
operation, maintenance, inspection, and monitoring requirements-
designed to prevent and uncover deviations from  technical

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scandards over an extended period of time.  These requirements
should be embodied in workplans submitted for approval pursuant
to che decree.

         3.   The decree should contain financial responsLbiLLcv
requirements, (discussed below), sufficient to cover'any costs'
arising from failure of the remedy.

         4.   The decree should clearly articulate any assumptions
upon which the remedial program is based.  For example,  a remedv
may be designed with certain characteristics of the'surrounding'
area in mind.  If land use patterns change, (for example, where
a previously unused aquifer is tapped for drinking water),  che
level of protection afforded to the environment by the remedy
may be insufficient to protect human health.  If any of the
stated assumptions change, the Agency should reserve the right
to pursue modifications to the remedial program.

         5.   Finally, the decree should contain a clause
authorizing  the government to reopen the decree if the site
may present  an imminent and substantial endangennent to the
public health or welfare or the environment due to:

             The discovery of previously unknown or
             undetected conditions at the site; or

             the receipt of new information concerning
             the scientific premises of the decree.
             (See che Settlement Policy, page 16.)

This reservation should allow the government to obtain further
remediation by the defendants or perform the work itself and
seek cost recovery.  Despite best efforts at designing,
constructing, and implementing a remedial program, it is
inevitable that in a certain percentage of cases additional
work will have to be performed to eliminate such endangennents.

     Responsible parties, of course, want the decree to
represent: a final disposition of responsibilities.  However,
hazardous waste site abatement technology has not progressed
to the point where the Agency can be relatively sure that the
remedial techniques selected and implemented today will  provide
complete and permanent protection to the public on the hundreds
of sites where work has been or will be performed.  The  five-part
program outlined above should maximize the degree of finality
afforded to settling parties consistent with the need to
safeguard the interests of the public.

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     D.    Contribution Protection

           Concribution is an equitaole remeav basea on the
principle chac one who has paid Tore than a r'easonaoLe urojor-
cion of a judgment or debc is entitled to reinoursersenc' rr.rti
ocher liable parties.  The issue of contribution will ?e
particularly critical in nuic i - party cases chac involve secne-
ments with fewer than all or che responsible parties ana  -.ere
the government may sciLL sue some or all  or tne non-sett.. ,r.z,
parties.  Ancicipacing chac the government 3ay sucessrully
pursue a non-secclor, a defendant may demand chac the United
States agree to protect it from any claim tor contribution
from any non-settling party as a condition to signing a consent
decree.  The efface of such a contribution protection Clause
sought by a settling defendant would be co have cne Unitea
States agree to reauce its judgment against a non-settling
responsible party by che amount or contribution ordered to oe
paid by a settling defendant to the non-settling party in
subsequent Litigation.

     It is the Agency's view chat contribution protection
clauses are largely unnecessary.  Many States* have already
enacted Laws which protect setclors from  subsequent contri-
bution actions.  These laws have been modeled on Section u of
the Uniform Contribution Among Torcfeasors Ace (1955 Revision),
drafted by the National Conference of Commissioners on Uniform
State Laws, which provides:

          "When a release or a covenant not to sue or
          not to enforce judgment is given in good faith
          to one of two or more persons liable in tort
          for the same injury or the same wrongful death:

          "(a)   It does not discharge any of the other
          tortfeasors from liability for the injury or
          wrongful deacn unless its terras so provide;
          but ic reduces the claim against the others to
          th* fcxtfcat of, any aioount. stipulated by t,h.e
          release or the covenant, or in the amount of
          the consideration paid foe it, whichever Is
          the greater; and,
* Seventeen States have adopted this Section or a similar
provision:  Alaska, California, Colorado, Florida,  Illinois,
Massachusetts, Michigan, Missouri, Nevada, North Carolina,
North Dakota, Ohio, Oklahoma, Oregon, Tennessee, Virginia, and
Wyoming.

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                             - 6 -
          "(b) Ic discharges the torcfeasor co whom it
          is given from all liability for contribution
          to any other tortfeasor."

Under this rule, once a reasonable, comprehensive,  and  good
faith agreement has been reached, settling parties  would  be
immune from third-party contribution claims.

     The Agency is taking the position that federal courts
should use Che model rule as the standard for resolving
contribution questions.  The United States will be  willing  Co
include language in a consent decree which states thac  it
is the intention of the parties that future contribution
actions against settlors be prohibited and encouraging  courts
to consult the Uniform Act as the federal rule of decision.
Contribution protection clauses will therefore generally  not
be necessary for consent decrees.

     As the Settlement Policy points out, however,  providing
protection from contribution to settling defendants may be
appropriate in limited cases.  If, under the law likely to  be
applied, contribution actions by nonsettling defendants may
be permitted, EPA may consider providing contribution protection
when two factors are present:

     1)  the settlement addresses a very high percentage  of  the
total cleanup; and

     2)  the relative responsibilities of the responsible
parties can be clearly allocated, so that future actions  are
not likely to reapportion liability.

On a case-by-case basis, the litigation team will assess  whether
these factors and other circumstances in the case warrant
inclusion, of cao.tr tbxition protection in the decree.

     Of course, the greater the percentage of cleanup covered
by the decre«r the Lower che risk that claims for contribution
will be successfully asserted against settling parties.  Compre-
hensive settlements will maximize the chances that compliance
with the terms of the decree discharges a company's liability
for a site.

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     E.    Sample Language on Releases and Contribution
           Protection

           The following sample consent decree language assumes
that tocal cleanup has been or will be undertaken by the
responsible parties pursuant to EPA approved procedures.  It
also assumes that the site is located in a State  where  the
release of one joint tortfeasor operates as a release on all
others.
          Covenant Not to Sue

          In consideration of work which has been and
          will be performed and payments which have
          been made by the Company under the terms of
          the Decree, the Governmental Parties (herein-
          after "Government") hereby covenant not to
          bring any civil judicial or administrative
          action against the Company and its officers
          and employees for any claim or cause of
          action cited in the Complaint relating to
          "covered matters."  "Covered matters" include
          liability arising from [work performed under
          the decree] and [specified costs incurred to
          date].  The covenant shall become effective
          upon completion to EPA's satisfaction of the
          remedial activities described in the attached
          specifications.  To the extent that State
          law is deemed to govern liability arising
          from activities related to the Site and the
          interpretation of the terras of this Decree,
          the parties do not intend this section to
          serve as a general unqualified release.
          This section should: be construed as a coven-ant
          not to sue the Company, and should not act
          to release any other party from liability.

          ThLs covenant not to sue does not extend to
          liability for damage to natural resources, as
          defined in CERCLA, to liability arising from
          hazardous waste removed from the site, or to
          future monitoring or oversight expenses incurred
          by the Government.  In addition, notwithstanding

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                   - 8 -
any ocher provisions of this decree,  che Government
reserves che righc co seek modification Co chis
Decree or insticuce a new accion co seek additional
remedial measures ac che sice,  through an accion
co compel che defendants' co perform remedial work
or reimburse che Governmenc for cleanup coses,  if:

(1)   ac any cime previously unknown  or undececced
conditions at che Sice presenc  or may presenc an
imminent and substantial endangerment to the
public health or welfare or che environment;

(2)   the Agency receives new information,
concerning che nature of che substances ac
che site or che appropriateness of che remedy
described in Appendix I, which  indicates that
site conditions may present an  imminent and
substantial endangerment to the public health
or welfare or the environment.

(3)   [there occurs a change in one or more
assumptions upon which the remedial program
is based.  (See discussion in part C  above) .}-

The parties recognize the possibility thac
there may be brought or asserted against che
Company suits or claims for contribution for
liability for covered matters by persons or
entities that have noc entered  into this
settlement that might, if successful, obligate
the Company to pay amounts toward covered
matters in addition to those recognized in
this Decree.  It is the expressed intention
of the parties chac the Company not be required
to pay amounts in contribution  for covered
matt.era or be required to remain as parties
in any suit or claim for contribution for
covered matters.  It is also agreed that the
Government shall be under no obligation to
assist the Company in any way in defending
against such suits for contribution..

The parties represent that this Decree was
negotiated in good faith and that the
Company's undertakings at the Site represent
a fair and equitable assumption of the Company's
alleged responsibilities for covered matters
considering, among other factors, the  fact  that
it is in the best interest of the Government

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                             - 9 -
          Co encourage equitable settlements without
          burdensome litigation.  The parties agree
          that federal law should govern questions
          of contribution among parties that may be
          adjudicated to be liable jointly or severally
          for covered matters.  The parties agree
          that, in determining the appropriate federal
          rule of decision to establish the effect  of
          this Decree on possible rights of contribution,
          a court should adopt the principle set forth
          in Section 4 of the Uniform Contribution  Among
          Tortfeasors Act.

II.   Site Access

     It is essential chat EPA have access Co the site  in order
to observe any work taking place and monitor compliance with
the  terras of che decree.  Language grancing access  should
provide access during the effective period of che decree ana
describe the scope of che inspector's powers.

     A sample site access clause is:

          During che effective period of Chis decree,
          EPA or ics representaCives, including
          contractors, shall have access at all ciraes
          to the Sice and all property owned or
          controlled by che defendanc for purposes  of
          conducting any accivicy authorized by CERCLA,
          including but noc limited co:

          A.  Monitoring the progress of activicies
              taking place;

          B.  Verifying any data or information
              submitted to EPA;

          C.  Conducting investigations relating to
              contamination at or near the site;

          D.  Obtaining samples at the site; and

          E.  Inspecting and copying records, operating
              Logs, contracts, or other documents
              required to assess the defendant's
              compliance with the Decree.

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                             - 10 -


          In addition, che defendant will not object to
          EPA's obtaining, for che above purpose,  access
          co any establishment or place owned or operated
          by_any third party under contract with the
          defendant.  Nothing herein Limits or otherwise
          affects any right- of entry held by EPA pursuant
          to applicable laws, regulations, or permits.

     Where it is necessary for EPA to have access  to the
property of a defendant for a long period of time,  an easement
over the property may be desirable.  The easement  should  run
with the land and be recorded co place all future  purchasers
on notice.

     It is important that access considerations be taken  into
account at the beginning of a lawsuit in order that all
appropriate parties be brought under the court's jurisdiction.
The government may often want to name an "innocent" landowner
as a defendant solely for the purpose of facilitating access
to his or her property to conduct response activities.

III. Authority of the Signatories

     Obviously it is important that persons signing a
settlement agreement have authority to sign for and bind  their
principals.  Sample Language Co provide for chis is:

          Each of the signatories to this Decree certifies
          thac he or she is fully authorized to enter into
          the terms and condicions of chis Decree  and
          to legally bind che parcy co che Decree  so
          represenced by him or her.

     Where there is any doubt regarding che coramicment of  the
principals to the decree, or in .cases where substantial suras
are at stake, the government, in an abundance of caution,  may
wish, to require thac the principals themselves be signatories
co the> decree-.

IV.  Insurance/Financial Responsibility

     A.   Insurance.  Where the cleanup is being, conducted
by a responsible party, che party shouLd be required to
protect both itself and EPA from liability, by purchasing
insurance or through another financial mechanism,  from injuries
to third parties due to acts or omissions of the party conducting
the work.  For example:

          The Company shall purchase and maintain  in
          force insurance policies  in the maximum  amount
          available, which shall protect  the United

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          Scaces and the public against any and
          all Liability arising ouc of che' Company's
          and its contractors' and other agents'
          acts or omissions in performance of the
          work.   Prior to commencement of work at
          the Site, the Company shall provide EPA
          with a certificate of insurance and a copy
          of the insurance policy for EPA's approval.

      B.   Financial Responsibility.  In addition to  liability
insurance, it is important to have assurance that the  party
conducting the work will have the financial capability to
complete the work.  This can be accomplished by several r.eans :

           (1)  Performance bond;

           (2)  Letter of credit;

           (3)  Guarantee by a third party; or

           (4)  The party conducting the work, can present  the
Agency with internal financial information sufficient  to satisfy
the Agency that the party has enough assets to make it unnecessary
to require additional assurances.  If this method of  financial
responsibility is chosen and if the term of compliance within
the Decree is greater than one year, then the Decree  should
provide for the party to annually submit internal financial
information.  If the Agency then determines the financial
assurances to be inadequate, the Decree should provide that
the party can be required to obtain a bond or one of  the other
financial instruments listed above.

     A performance bond by a reputable company is generally
the preferred type of assurance.  The bond should assure that
the work will be completed regardless of remaining cost.  The
latt.ec two mechanisms require a detailed examination  of the
financial status of Che party doing the work and the  Guarantor.
No matter which financial instrument is used, EPA should be
authorised in the Decree to approve such instrument before it
is incorporated into the agreement.

V.    Establishment of a Trust Fund

     Frequently in multiple-party generator cases, the
generators will want to select a contractor to clean up the
site.  If the contractor is a party to the litigation, the
consent decree may make the contractor expressly responsible
for the cleanup and the generators responsible for paying for
the cleanup.  However, in order  to assure completion of the
work, the generators should also remain  liable until completion.
The funds to pay for the cleanup are collected in advance from

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che generacors.  The most commonly used mechanism for accomp-
lishing chis is che escablishraenc of a cruse cund or escrow'
accounc for paving che concraccor.  The cruse rund or che
account can be administered by a Scace or ocher public ar.cicv
or a bank or similar encicy experienced in administering cruse
funds.  Neither EPA nor ocher Federal agencies should aaminisce:
che fund.   'However, che Decree should . provide chac EPA muse
approve che form of che Trusc o'r escrow agreemenc.  The consent
decree should specify how che fund will be creaced,  how mucn
money is Co be deposited inco che fund, and how disbursements
will be made from Che fund.  The fund accounc should earn
inceresc.

     Disbursements are usually linked to completion of cercain
oiilescones required by Che decree.  Agency approval may oe
required for each disbursemenc.   The final paymenc should not
be made until the contractor has certified, ana tne Agency has
confirmed, chat all work Co be paid for by the fund has been
completed.  It may also be desirable to establish a scnedule of.
payments from the fund to assure that the money remaining in
the fund is sufficient to pay for completion of the cleanup
should the contractor default.  The Decree should provide chac
EPA does not guarantee the sufficiency of the fund.  A sample
trust fund clause is:

          Within three days after the entry of this
          Decree, the Companies each shall pay to the
          site Trust Fund (hereinafter the "Trust Fund")
          established at the Bank the sum which is shown
          for chat Company in Exhibit A hereto.  Prior co
          establishment of the Trust Fund, the form of the
          trust agreement must be submitted to EPA
          for its approval.  The Trustee shall deposit
          the money in an interest-bearing account
          and use the money In the Trust Fund to pay the
          Contractor to perform the Work described in
          Exhibit: B hereto (hereinafter referred to as
          the "Work"), which Exhibit is hereby incorporated
          by reference and made a pace of chis Decree as
          though it were set forth verbatim.  All money-
          remaining in the Trust Fund after completion
          of Che work, including inceresc earned, shall
          be deposited in the Hazardous Substances Response
          Trusc Fund as recompense for response coses
          incurred by the United States not otherwise
          reimbursed under the terms of this Decree.

          EPA does not guarantee the monetary  sufficiency
          of the Trust Fund established by  this section.

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A sample Schedule of Farrier.:: clause is:

          The funds vjill be disbursed in accordance  with
          che following sci-.ecule.

          (a)  Upon entry of this  Decree che Contractor
          snail receive SLOG,000 from -he Trust  Fund.

          (b)  Upon completion and approval by EPA
          of items 1, 2, and 3 of  the work, the
          Contractor shall receive 3300,000 from  che
          Trust Fund within no more than 20 days
          after receipt of the Trustees  of an applica-
          tion for payment by the  Contractor.

          (c)  Upon completion and approval by EPA,
          of items ^, 5, 6, and 7  of the Work, the
          Contractor shall receive 3500,000 from  the
          Trust Fund within no more than 20 days  after
          receipt by the Trustees  of an  application  for
          payment by the Contractor.

          (d)  Upon inspection of  the Site and
          certification by the United States that
          the Contractor has completed the Work.,  the
          Contractor shall receive $500,000 from  the
          Trust Fund within no more than 30 days  after
          receipt by the Trustees  of an  application
          for payment by the Company. All remaining
          money in the Trust Fund, including earned
          interest:, shall be deposited in the Hazardous
          Substances Response Trust Fund.

VI.   Restrictions on Conveyance

     It is important that a subsequent purchaser  of  real
property is notified thac che site is the subject of a consent
decree, and chat he may be required to fulfill the terms
therein.  There are several methods of providing  such notice:

          1.  Depending upon che State,  one may notify a
subsequent purchaser by recording or filing a copy of the
consent decree with the County Recorder (Registry of Deeds)  or
Clerk of Courts, so chat a title search would reveal the exis-
tence of the decree.  Individual Scare law will have co be
considered as to the proper method of recordation.

          2.  The decree may require that the grantor notify
the plaintiff, prior to che transfer of title, of che name of
the grantee and, subject to EPA approval, what specific
requirements of the consent decree will be performed by the
grantee.

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          3.  The grancor nay be required co include
notification in che conveyance (deed)  chac che property is
subject co che terms of che consenc decree,  ar.a nay also be
required co describe in che conveyance che prior use of che
sice, (e.g. ,  use as a hazardous waste  disposal facility,'!.

     The :najor concern in fashioning any type of language  is  co
allow for free alienation.  Language such as the following
should achieve our objectives:

          Within thirty days of approval by  che Courc
          of chis Decree,  defendant shall record a
          copy of this Decree with the Recorder's
          Office, 	 County, State
          of 	.

          The site as described herein may be freely
          alienated provided that at least sixty days
          prior to the date of such alienation derendanc
          notifies plaintiff of such proposed alienacion,
          the name of the grantee, and a description or
          defendant's obligations, if  any, to be performed
          by such grantee.  In the event of  such alienacion,
          all of defendant's obligations pursuant to chis
          Decree shall continue to be  met by defendant or,
          subject to EPA approval, by  the grantee.

          Any deed, title or other instrument of conveyance
          shall contain a notice that  the sice is che
          subject of this Decree, setting forth the style
          of the case, case number, and Court having
          jurisdiction herein.

     These provisions, of course, are  only applicable  to sices
where the landowner is a named defendant.  In cases involving
non-landowner defendants,  the government may wish to specify  in
the decree that sale of che sice has no effect on the  obligations
of such defendants.

VII* Priority of Claims Versus ffon-Settling  Parties

     When a case is settled for less than the cocal araounc
necessary to complete a response action or to reimburse
plainciff fully for costs incurred, it may be- done so  with  the
anticipation that the non-settling parties will be available
Co reimburse che Agency for che remaining balance and/or
complece che response accion.  To ensure chac sufficienC funds
are available or co avoid delay in colleccing on any judgmencs
as co non-seccling parcies, a provision may be included in che
consenc decree providing chat an Agency judgment obcained
againsc non-seccling parties cakes prioricy over chac obcained

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                              - 15 -


by ar.v of the seeding parries.  Sample prior-ley of  claims
language is as follows:

          Defendant's cLai^i against any other responsible
          party in this or any other proceeding for
          contribution or indemnification of ail or  a
          portion of the cost of its .settlement herein
          shall be secondary-to the'United States'
          claim against such other responsible party
          as to any remaining balance for the response
          actions or other costs incurred for action
          taken at the Site.

VIII. Preclusion of Claims Against the Fund

     Section 112 of CERCLA provides a procedure whereby a
private party which has performed a CERCLA cleanup may assert
claims to recover such costs from the Fund assuming  the party
has received "preauthorization" pursuant to the National
Contingency Plan.  See 40 CFR § 300.25(d).  The right to
recover such claims is subrogated to the United States by  the
payment of such a claim.

     In multiple party consent decrees, it is important to
include a provision prohibiting future claims against the  Fund
by the responsible parties, unless the responsible  parties
are explicitly preauthorized to bring a claim as part of the
settlement.^/   Such a provision is particularly important  in
cases where defendants may later allege that the percentage
of the total remedial costs that they contributed to the settle-
ment is disproportionate to the extent that they contributed
to the problem at the site.

     The language should be extremely broad and unequivocal.
An example of such a provision is provided below:

          In consideration of the entry of this Consent
          Decree, defendants agree not to make any claims
          pursuant to Section 112 of CERCLA, 42 U.S.C.
          Section 96TZ, or any other provision o£ Lav
          directly or indirectly against the Hazardous
          Substance Response Trust Fund established by
          CERCLA or other claims against the United States
V   As EPA policy on the Issue of combining private party
     cleanup with Fund expenditures evolves, there may arise
situations where a claim against the Fund would be permissible.
The language above should be followed pending further guidance
on circumstances where exceptions might be permitted.  In addition,
statutory amendments to CERCLA that would obviate the need for
this provision are currently under consideration by Congress.

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          for expenses related ~o chis cas«2 -ip.d  this
          Consent Decree.  Notning in this Consent  Decree
          shall be deemed to constitute preauthorization
          of a CERCLA clai-n within tae meaning of ^0  Cir'R
          § 300.25(d).

     Consent decrees with similar provisions include  the Petro
Processors, Bluff Road, Chetn-Dyne, and Seymour decrees.   In
cases involving just one responsible party, such a  provision
should also be included since there is always some  doubt
concerning whether there may be other, perhaps unknown at  the
time, responsible parties.

     This provision should be relatively non-controversial
because any defendant willing to enter a consent decree
presumably is willing to pay the portion of the cleanup
specified in the decree.

IX.  Joint Responsibility Among Responsible Parties for
     Implementing the Deere"?

     The Agency has consistently interpreted CERCLA as
authorizing imposition of joint and several liability on all
responsible parties.  The predominant case law accepts that
interpretation.  It is important to preserve this principle in
multiple defendant cases.  Also, from a practical point of
view, it is necessary to have the consent decree recognize
joint responsibility  in order to prevent the insolvency or
other problems of one defendant from delaying the entire
cleanup.

      In order to provide assurance that cleanup will proceed
on schedule, consent  decrees should include a joint responsi-
bility  provision, such as the example set  forth below:

          The  Industry Defendants shall implement the
          remedial actions  for both sites  as provided
          in this Decree, in accordance with the
          schedules established in  the various plans
          and  in this Decree.

          In che event of the  insolvency or other
          inability of any  one or more Industry
          Defendants  to  implement the activities
          required by this  Decree,  the remaining
          Industry Defendants  agree to complete  all
          such activities and  actions required by
          this Decree.

     If  there  is only one responsible party,  then  particular
care must be taken  in drafting  the  Guarantee,  Performance/
Completion  Bond or  Financial  Responsibility provisions,  to

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provide assurance chac there will be adequate resources  to
complete implementation of "he remedial measures.
X.   Public Access to Documents
     Many consent decrees require an elaborate L nves citation
and study phase, similar to a CERCLA RI/FS,  before scoe  or  all
of the final remedial actions are Determined.   In all  cases,
many engineering details, protocols, and specifications  are not
determined until the consent decree is implemented.   Substantial
amounts of technical information and detail  will  be  determined
during the implementation of the consent decree unaer  EPA's
oversight.

     The public is otten intensely interested  in tne  progress
of such remedial actions.  When EPA is performing the  remedial
action pursuant to CERCLA,  the Agency makes  information  and
draft proposals available through a community  relations  plan.

     It is EPA policy to implement at all sites,  regardless
of whether the cleanup is performed by the government  or the
responsible party, a community relations plan  which  encourages
public participation in the cleanup process.  This policy,
however, must be balanced against the need for confidentiality
in enforcement actions.  Since the implementation of  a consent
decree may give rise to disputes with the responsible  party
which end up before the court, implementation  of the  consent
decree is still litigation-related.

     In general, consent decrees should contain provisions
that explicitly require that all technical data and  factual
information generated and submitted by the defendant  are
available for public inspection unless they are requested to
be made confidential by Che defendant pursuant to EPA regulations
(see 40 C.F.R. Part 2).  Where possible, specific and  general
categories of data and information that the defendant  must
make public should be specified.  Because of the need  to protect
open and frank inceragency communication, this provision should
not apply Co Agency information or documents.   However,  raw
technical data generated by EPA or the State,  if applicable,
should be made public nonetheless after all applicable quality
assurance/quality control protocols have been complied with.

     After a consent decree is signed, EPA. and the defendants
may nonetheless continue negotiations over matters left
unresolved by the decree, (e»e., remedial proposals which must
await completion of additional sampling and analysis).  In some
cases, EPA and the defendants might be urged to make public
all draft remedial proposals  leading up to settlement.  To
avoid this unproductive and impractical procedure, EPA  should
include explicit language in  the consent decree exempting
negotiation documents from  the public disclosure provision.

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                             -  13  -


Also. EPA should consider clearly  articulating from, che
of che comraunicy relations program chat  "negotiation" d
are not official submissions  within  the  meaning or che consent
decree clause.

     An example or such a provision  is provided below.

          All data,  factual information,  and documents
          submitted  by the Defendant  to  EPA ana the
          Scate pursuant to this Consent  Decree shall
          be subject to public  inspection unless
          identified as contidential  by  Defendant
          in conforraance with 40 C.F.R.  Pare 2 or
          applicable State law or  otherwise exempted
          by the terms of this  Consent Decree.  The data,
          factual information and  documents so identified
          as confidential will  be  disclosed only in
          accordance with EPA regulations or applicable
          State law.  The Defendant  shall not; assert
          confidentiality regarding  any..hydrogeological
          or chemical data, data submitted in support
          of a remedial proposal or  any  other
          scientific or engineering  tests or data.
          This provision does not  apply  to documents
          exchanged  by the parties relating co issues
          of liability or the determination what additional
          remedies,  if any, other  than those specifically
          required by the terms of this  Decree, may be
          necessary to remedy conditions  at che site.

XI.  Dispute Resolution Provisions

     Hazardous waste consent  decrees  may require one or
several parties to take samples, perform studies, and implement
other remedial steps  about which  there  may arise differences
of opinion whether the obligation  was satisfied.  Such
differences of opinion may also arise over whether or not a
force maj eufe event has occurred,  or whether che defendant has
incurred liability to pay stipulated penalties under che decree.
As noted in the general guidance on consent: decrees,  it  La
useful for the decree to specify a mechanism or mechanisms to
resolve such disputes.

     Such mechanisms may include negotiations among  the  parties
as well as judicial resolution. The sample Language  below
provides for both, although the parties  would probably discuss
the issue and engage in limited negotiations even  if  the decree
did not expressly mention such1-a mechanism.

     Particularly where the dispute concerns the  implementation
of remedial work, it is important  to resolve it  quickly.  Some
disputes may be more quickly resolved by discussion and

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negotiation among che parries rather -han a juaiclai hearir.2,
however1, it is important not co allow negotiations  co consume
coo much time.  Therefore,  che government shouLc not nesicace
co seek judicial resoiucion of disputes which che parties
cannot readily resolve among themselves.

     "/."here possible, it is  helpful co minimize che  drain on
Agency resources by placing on che defendanc che burcen co
demonstrate chat ics proposal is -nose consistent wich che
purposes of che decree.  An accepcable sample provision :olLc;

                       DISPUTE RESOLUTION

              The parties recognize chac a
          dispuce may arise among defendanc, EPA
          and che Scate regarding plans, proposals
          or implementation schedules required co be
          subraicted by defendanc pursuant co che terms
          and provisions of this Consent Decree, or
          regarding whether a force majeure event,  as
          defined in paragraph 	 ot this Decree,
          has occurred, or  whether defendants have
          incurred liability to pay stipulated penalties
          under paragraph 	.  If such a dispute  arises,
          the parties will  endeavor to settle it by gooa
          faith negotiations among themselves.  If  the
          pa-rties cannot resolve the issue within a
          reasonable time,  not to exceed thirty calendar
          days, then any party may file a petition  with che
          Court setting forth the matter in dispute.
          The filing of a petition asking the court
          to resolve a dispute shall not extend or
          postpone defendant's obligations under this
          decree with respect to the disputed issue.

               In the event of a dispute between
          defendant and EPA or the State, defendant
          shall have the burden of: (1) showing that
          Its proposal Is more appropriate than the
          proposal of EPA or che Stace co fulfill che
          terms, conditions, requirements and goals
          of this Decree, and (2) demonstracing chac
          its proposal is consiscenc with the National
          Contingency Plan; will abate hazards at, che
          sice; and will protecc public healch, welfare,
          and the environment from the release or
          threat of release of .hazardous substances at
          the site.  If the dispute concerns an issue
          of science, technology, or public policy
          within the areas of EPA's expertise,  the
          Court shall adopt the position (if any)
          proposed by EPA,  unless the Court finds that
          position to be arbitrary and capricious.

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XII. Stipulated Penalties

     Hazardous wasce decrees  which  establish obligations for
defendants to complete in  the future  should  contain  stipulated
penalty provisions to assure  that  the defendant will comply
with its obligations and  co minimize  disputes over the
appropriate, sanction for  failures  no  comply.  Such obligacions
will typically include the implementation of remedial work
(including construction requirements),  and  reporting ana
monitoring requirements.

     The purpose of a stipulated penalty  clause is to deter
potential violations of the decree  by associating with each
violation the immediate obligation  to pay a  Large enough
penalty to make compliance more attractive  crxan violation.
However, even payment of a stipulated penalty should not
deprive the government (or the court) of  other remedies,
including injunctive relief,  and every stipulated penalty
provision should contain a clause  to  this effect.  Stipulated
penalties should never be  considered  as setting a maximum
penalty exposure, subject  to  negotiation  downward.

     The authority of the  district  court  to  impose monetary
penalties or fines for prospective  violations of consent
decrees flows not only from the civil penalty authorities of
the environmental statutes (e.g.,  RCRA §§ 30O8, 7003(b) ;
CERCLA § 106(b)), but also from che court's  civil contempt
power — its independent statutory authority Co punish violation
of its lawful orders by fine  or imprisonment.  18 U.S.C.
§ 401.  When fines under  § 401 are  prospective, applying only
to future violations, they are considered "coercive," intended
to give the defendant an. incentive  to comply with the court's
order.  Prospective fines  under §  401 are noc subject co the
monetary limits in the penalty provisions of other statutes.

     Stipulated penalties  should be large enough to  provide a
real incentive to the defendant to  fulfill its obligations on
time, considering the financial strength of che defendant, any
economic saving iron delaying compliance, and. any bvana  or risk.
of harm to public health or the environment from delaying
compliance.  (See Perfect  Fit Industries, Inc » v. Acme  Quilting
Co., Inc., 673"T72d 53 (2d Cir. 1982). cere, denied  103 S.Ct.  7i.)
AE the same time, the magnitude of stipulated  penalties  should
not be so great that che defendant prefers to  allow the govern-
ment to perform remedial work with Superfund money,  rather
than perform work itself.

     Depending on the facts of the case, it may  be  appropriate
to-,  a) specify all numbered paragraphs  the violation of which
will be penalized; b) establish a schedule of  per  diem penalties
which increases with the duration or extent of the  violation;

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or c)  establish higher penalty amounts for Tore important
violations.

     Stipulated penalties -nay be divided between the Unites
States and a State is co-plair.t if £ s ,  provided that :  (1)  the
State  has taken an -.acive part in the litigation,  including
the seeking  of stipulated pena.Lci.es ,  -and (2)  State law provides
independent  authority for the State to obtain civil  penalties.

     The following sample language demonstrates escalated
stipulated penalties, and a division  of stipulated penalties
between the  [Jniced States and a State.

                        STIPULATED PENALTIES

          (A)   Unless excused by the  provisions
     of paragraph (force majeure clause],  the
     Defendant shall pay the following stipulated
     penalties for any failure to comply witn
     time requirements of this Consent Decree,
     including any implementation schedules
     submitted by Defendant and approved by
     EPA/State or this Court:

 Period of Failure to Comply   Penalty Per Violation Per Dav
     1st through 14th day                  51,500
     15ch through 44th day                 55,000
     45th day and beyond                   510,000

          (B)  Stipulated penalties under this paragraph
     shall be paid by two certified checks of equal
     amounts with one-half of the daiLy penalty payable
     to the "Treasurer of the the United States" and
     the other one-half payable to the "Arkansas
     Department of Pollution Control and Ecology."

          (C)  The stipulated penalties set forth above
     shalL be Iff addition co any ocher remedies or
     sanctions which may be available to EPA/State by
     reason of Defendant's failure to comply with the
     requirements of this Consent Decree.

          (D)  If che parties disagree whether
     Defendant has violated a provision of this decree
     for which a stipulaterf-pejialty is due, the
     Defendant may petition the Court under [dispute
     resolution paragraph"].  Defendant must file any
     such petition within 30 days of receiving written
     demand for payment from the Plaintiff.

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XIII.  Admisslbi.Li.tv of Data

     In order Co avoid disputes over the integrity of sample
resales or other data in the evenc that che parties disagree
over how to implement the consent decree,  the decree should
provide that verified data is admissible in evidence.

     A model clause is:

            The Defendants waive any evidentiary
       objection to the admissibility into evidence
       of data gathered, generated, or evaluated
       pursuant to this decree that has been verified
       by the quality control/quality assurance
       procedures contained in part 	.  However,
       a Defendant may object to a specific item
       of evidence if the objecting party demon-
       strates that such item of evidence was not
       gathered or generated in accordance with the
       sampling and analytical procedures estab-
       lished pursuant to the site Work Plan.

     The Decree should provide that EPA must approve sampling
and analytical procedures.  Additionally, it is necessary for
there to be a careful oversight program.

DISCLAIMER

     The policies and procedures established in this document
are intended solely for the guidance of government personnel.
They are not intended and cannot be relied upon to create any
rights, substantive or procedural, enforceable by any party in
litigation wich the United States.  The Agency reserves the
right to act at variance with these policies and procedures and
to change them at any time without public notice.

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            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON, D.C. 204(0
                             JUL  121985                    9832>6
MEMORANDUM

SUBJECT:  Snail Cost Recovery Referrals

FROM:
	 ~		»/  «^«»».*w        ^

Frederick F. Stiehl &*^t
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                                                         9832,6

     As you know,  the Agency is working toward  providing the
Regions with both  the tools and the authority to  settle small
cost recovery cases (up to $500,000)  administratively.  To
ensure that such administrative resolutions  are attractive
options for responsible parties, however,  the Agency oust be
prepared to take judicial action against those  who  do not
cettle on terns acceptable to the Agency.  Under  such circum-
stance*, email cost recovery actions  will  take  on an even
greater importance, since it will .be  necessary  to show the
regulated community that the Agency is serious  about pursuing
•mall cost recovery cases in the judicial, as veil  at the
administrative, forum.  In furtherance of that  effort, our
offices and the Department of Justice are prepared  to fully
support snail cost recovery cases referred by the Regions which
further prograa goals and are otherwise consistent  with Agency
policy.

     For most of you this memorandum simply  confines operating
guidance which you are already following.  We wanted to ensure,
however, that the Settlement Policy did not  create  any undue
reluctance on the part of the Regions to develop  «aall cost
recovery cases for referral.

cc:  David T. Buente, Department of Justice

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       I       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY   OSWER * 9837.1
\ 
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                             - 2 -
        or present precedential issues, Headquarters or the
        Department of Justice can be brought in informally
        without a referral.

      •  Financial Viability of Potential Defendants.  It is
        important that all referrals contain complete information
        based on thorough research regarding the financial
        status and insurance assets of potential defendants.
        Chapter III of the Case Management Handbook describes
        the contents of a hazardous waste referral, including
        the types of information required regarding potential
        defendants.

      *  Endangerment Assessment.  A complete endangerment
        assessment must be included in all referral packages
        for CERCLA S106 and RCRA §7003 cases.  The endangernent
        assessment should contain information sufficient to
        establish a prima facie imminent hazard claim.
        Appendices two and three of the Case Management Hand-
        book contain a checklist of facta necessary for imminent
        and substantial endangerment cases.

      *  Cost Docunentat ion.  The Region must submit accurate
        cost recovery check lists to OWPE at least six weeka
        prior to submitting the referral package to Headquarters.
        This will ensure chat cost recovery cases referred to
        the Department of Justice will have thorough cost
        documentation as required by the Case Management Hand-
        book, Appendix one.

     The Department of Justice is required to file a complaint
within 60 days of the referral froa EPA.  The 60 day period is
intended to allow the Department of Justice co review the
litigation report and prepare its final pleadings.  The 60 day
period is not intended to allow che Agency time co provide
supplemental information for Che referral package or make
initial contact with -the defendants regarding che possibility
of settlement.

     All requests co che Department of Justice co delay che
filing of a case beyond che 60 day period must be Bade by che
Assistant Administrator for OECM.  To originate such a request,
the Region smsc write che Assistant Administrator for OECM.
Any request by che Region Co OECM co extend che filing date of
an action should be made before Che 60 day period ac the Depart-
ment of Justice has run.  We have informally stressed co che
Department thac che filing of cases should noc be delayed in
reliance on che Region's intention to request such a delay.

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                             - 3 -
     Effective prosecution of hazardous waste cases, once
referred co the Department of Justice, is & critical element
of the Agency's enforcement strategy.  Compliance with the
procedures set out above and in the <"?<:•> Management Handbook
will assure that matters approprii     .  Judicial enforcement
will be referred and filed in a tiseiy way.  If you have any
questions regarding these procedures, please contact me.

cc:  Gene A. Lucero, Director, OWPE
     David T. Buente. Acting Chief, Environmental Enforcement
       Section, DOJ
     Richard H. Hays, Senior Enforcement Counsel

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                                                        OSVJL.   9334.2
             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                         WASHINGTON D.C 204(0
                                OCT  9 1335
                                                          O«»iCt O»
                                                    W*$T£ AND
MEMORANDUM


SUBJECT:  Timely  Initiation of Responsible Party  Searches,
          Issuance of Notice Letters^ and Release of  Information

FROM:     Gene A.  Lucero, Director
          Off-ice  of Waste Programs

TO:       Addressees


PURPOSE

     This mer.orandan re-emphasizes the importance of  early
identification of  potentially responsible parties (PRPs)  and
timely issuance of notice letters for the RI/FS.   These  actions
support the Agency's policy to secure cleanup by  responsible
parties in lieu of Superfund use, where such cleanup  can be
accomplished in a  timely and effective manner.  The sooner
PRPs are identified and notified about their potential responsi-
bility, the more  time they have to organize themselves to
assure responsibility for the RI/FS and cleanup (See  "Partici-
pation of Potentially Responsible Parties in Development of
Remedial Investigations and Feasiblity Studies  Under  CERCLA*"
Lee M. Thomas and  Courtney M. Price,  March 20,  1984).

     This memo also clarifies Agency policy on release of
site-specific information to PRPs and others.  It supplements
the information release section of the Interim CERCLA Settle-
ment Policy (December 5, 1984).  The clarification is designed
to facilitate information exchange in order to encourage effec-
tive negotiation  and coalescing by PRPs among themselves.
Effective PUP negotiations and coalescing are likely  to  engender
effective settlement discussions with the government.

INITIATION OF PRP  SEARCHES

     In an effort  to expedite and streamline the  RI/FS process,
you should focus  attention on early identification of PRPs  and
timely issuance of notice letters.  As you are aware, in FY 86
you will be required to conduct PRP searches for  NPL  Updates
3, 4, S, and 6.   This will be reflected in your SCAP  targets.

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                                                       OSWER * 9834.2
                              -2-


In order to acccrpli:-u. this,  it will be necessary to start ?5?
searches concurrently witn developing sites for listinc.  At
the  latest, PRP searches should be  initiated when candidate
sites are sent to K? for NPL  quality control "review.  You win
need to plan accordincly for  this activity, particularly in
your case budgets.

     Technical assistance resources for PRP searches are avail-
able through the Techncial Enforcement Support Contracts, TES I
and TES II, and are coordinated through the case budgeting
process.  Each Region will be given a line of credit to support
the  costs of responsible party searches, title searches, and
financial assessments.  This  credit will be allocated by a
straight-forward calculation  of average past costs of such
activities multiplied by the  nunber to be done in each Region.

     Because of the heavy work undertaken by TechLaw in both
the TES I and TES II contracts, the prime contractors have been
distributing new work assignments for PRP searches to other
subcontractors.  This should  result in more timely reports.

NOTICE LETTER ISSUANCE

     Timely issuance of notice letters for the RI/FS normally
means that notice letters are issued as soon as possible after
completion of the PR? search  and prior to any Federally-financed
response action.  Timing of the notice letter should take  into
account the number of PRPs and the  complexity of the data
associating PRPs with the site.  In general,-notice letters
should be issued 60 days before obligation of RI/FS funds
(See "Procedures for Issuing  Notice Letters," Gene A. Lucero,
October 12, 1984).  PRPs should therefore have sufficient time
to organize themselves and initiate preliminary contacts and
discussions with Agency personnel.  This will also avoid delay
in beginning a Fund financed  RI/FS  should it become necessary.

     Notice letters are generally combined with information
requests under RCRA $3007 and CERCLA S104(e) (See "Policy on
Enforcing Information Requests in Hazardous Waste Cases",
Courtney M. Price, September  10, 1984).  Notice letters are an
important step in determining whether a PRP is willing and
financially cap.able of undertaking  a proper response.  The
NEIC Technical Information Center is a useful source for assess-
ing the financial viability of PRPs that offer stock to the
public.  For privately held companies, the TES contract can be
used to estimate the financial capability.

     Notice letters should be issued only to parties where
sufficient evidence is available to make a preliminary determi-
nation of liability under CERCLA $107.  Where doubt exists as
to whether available information supports notice letter
issuance, information recuests should be sent prior to notice
letters.

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                                _3_                       OSWER * 9834.2
      In  the  past,  retire  letters  were  se-t  t:  PRPs  v'r.z  -ay  cr
 nay  not  have  £>een  liarle  under  CERCLA.   This -ay  oe avoided  by
 issuing  notice  letters  to parties where  sufficient  evidence  is
 availasle  to  make  a preliminary deter-.ination  of  liability
 under CERCLA  $107.   Frr exar.ple,  parties  known to have  arranged
 for  disposal  of  material  which  is not  known to contain  a hazard-
 ous  substance  should not  receive  a  notice letter.   The  Regions
 should be  particularly  aware  of the  adequacy and  completeness
 of the PRP seanrches.  This  will -far.  spending resources on
 the  quality  review  of contractc •       '  I'm  sure  this will
 save critical  resources at  a  la;.-.     .  in  the enforcement
 process.

      In  addition,  it is imperative  that  copies of notice letters
 be sent  to Headquarters for purposes  of  tracking  and responding
 to information  requests.   Along with  other  reporting require-
 ments, eacr.  Region  will be  responsible for  sending  copies of
 notice letters  quarterly.

 RELEASE  OF SITE-SPECIFIC  ISTORMATTCN'

      It  is important to conduct PRP  searches,  issue notice
 letters  and collect information as  soon  as  possible, not only
 to expedite  the  RI/FS process,  but  to  ensure that certain
 site-specific  information is  available for  use by PRPs.  Avail-
 ability  of tnis  information to  PRPs  will  help  PRPs  organize
 and  negotiate  among themselves.

      As  stated  in  the Interim CERCLA  Settlement Policy, EPA
 will  release  certain site-specific  information to PRPs  in
 order to facilitate settlement  discussions.  This information
 includes:

      • Identity  of  notice letter  recipients;

      8 Volume  and  nature  of wastes  to  the extent  identified
       as  sent  to  the site  {"waste-in" list)?  and

      • Ranking  by  volume  of material  sent to the  site,  if
       availaDle

      There »rm f  however,  certain  limitations with regard to the
•information  outlined above.  For  example, summary conclusions
 about the  volum* and nature of  waste sent to a site, including
 a volumetric  ranking should be  provided  to  the extent .that
 such information exists.   Volumetric rankings  should be developed
 when the Region  determines  that the  rankings will be of signifi-
 cant benefit  to  the Agency and  responsible  parties  in  facili-
 tating settlement  or cleanup.  Moreover,  due to their  preliminary
 and  summary  nature, EPA will  not  expend  resources to explain
 or defend  any  list  or ranking.  Lists  or rankings released  to
 PRPs and others  should  always contain appropriate disclaimers.

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                               -4-

                                                       OSIVEf? * 9834.2
     T.k.e settlement  policy  states that  release  of  information
to PR?s should generally  ^e conditioned on a reciprocal  release
cf information by  F?.?s.   T.-.e reciprocal release pslicy does  r.c:
apply  to the  release to ??.rs of  the  nares of other notice  letter
recipients on a  site,  or  to waste-in lists and  volunetric  rank-
inss.  Release of  any  additional  information,  however, should
be conditioned on  a  reciprocal  release  of 'information  by PRPs.
In determining the type of.  additional  information  to be  released,
Regions should consider the possible impact  on  any potential
litigation.

     Again, it is  important to  conduct  PRP searches, issue
notice letters,  and  collect information as soon as possible  so
that the information discussed  here  is  available for use.
Waste-in lists and volumetric rankings  should be developed as
soon as possible after coff.pletvart ci ?W searches.  This infor-
mation should b* provided with  notice  letters,  if  available.
Such information nay also be released  in advance of notice
letters upon  request when the Region determines it will  facili-
tate settlement.

     The nanes cf  notice  letter  recipients are  available to  the
public in respor.se to  requests  under the Freedom of Informa-
tion Act (FOIA)  (See "Releasing  Identities of  Potentially
Responsible Parties  in Response  to FOIA Requests," January  26,
1984;.  The nanes nay  also  be released  at the Agency's initia-
tive without a fOIA  request.  Now, to  the extent the information
exists, waste-i,i lists and  volumetric  rankings  *ill also be
available to  the public un6«r T02A and  at the  Agency'* discre-
tion.  Thus,  requests  for information  on notice letter
recipients and for waste-in lists or volunetric rankings, should
be handled consistently whether  the  requests ar* made  by PRPs
or th« general public.
     For further  inforftEtior.  OT* topics  discussed in this meno,
please contact Linda  SoJtherland at  FTS 382-2035.
Addressees:

Director, Office of Emergency  and  R«w«dial  Response
Region II

Director, Air  and Haste  Management Division
Reg-ion* III, IV, VI, VII, VIII

Director, Waste Management  Division
Regions I, V

Director, Toxics and Waste  Division
Region IX

Director, Air  and Waste  Division
Region X

Regional Counsels, Rer;ior:s  I-X-

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          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY  n=-^n   0  «
                        WASHINGTON, o.c.r-"-                    " '
                           NOV 21
                                                     orriei or ts
                                                       AND COMPLIAMCI
                                                         MOMTO«rNG
MEMORANDUM

SUBJECT:  Procedural Guidance on Treatment of Insurers Under
          CERCLA
FROM:     Courtney M. Price
          Assistant Administrator for Enforcement
            and Compliance Monitoring

TO:       Regional Administrators, I-X
          Regional Counsels,  1-X


INTRODUCTION

     Defendants in EPA's  CERCLA enforcement cases have begun
to look to their insurance carriers for both legal representation
and indemnification.  It  is expected that che number of
collateral actions involving  the insurance carriers of CERCLA
defendants will continue  to grow, particularly in CERCLA cases
involving multiple parties. _[/

     The purpose of this  guidance is to provide EPA Regional
offices with the appropriate  procedures to follow in issuing
notice letters, developing referrals, and tracking CERCLA
enforcement cases chat nay include insurers as third party
defendants.  A separate reference notebook and memorandum
of lav arc being prepared by  OECM and the Department of Justice
to supplement this guidance.  The memorandum of law will summarize
the recent judicial decisions which have interpreted the
applicability and coverage of insurance policies in hazardous
waste cases*
I/   Most insurance policies are effective on an annual basis
~    and parties commonly changed carriers during the disposal
period, or had several policies in effect at the same time.
Therefore, large CERCLA lawsuits could involve multiple insurance
carriers and multiple policy periods.

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                              - 2 -
 INSURANCE INFORMATION REQUESTS - IDENTIFICATION OF  POTENTIAL
 DEFENDANTS'

      EPA  Regional offices are responsible  for  preparing and
 issuing CERCLA notice letters to potentially responsible
 parties.   These notice letters generally include requests for
 information under RCRA $3007(a)(3)  and  CERCLA  I104(e)(4).  All
 information requests  should include a request  for copies of
 insurance policies in force during  the  FRP's association with
 the  site.  The requests should solicit  information  regarding
 insurance policies that are currently in effect  as  veil as
 those effective during the period of activity  in question. £/

      The  information  request  responses  from potentially
 responsible parties should be reviewed  by  the  Regional Counsel's
 Office to determine the types of policies  carried by the party
 and  the extent of coverage under each policy-.   Insurance carriers
 determined to  have exposure should  be notified at the sane time
 we notify the  insured PRP.

 REFERRALS TO THE DEPARTMENT OF JUSTICE

      The  Department of Justice attempts to ascertain the
 existence of insurance coverage and, where appropriate,Ho
 assert licigacion theories which would  enable  the United States
 to proceed against insurance  carriers in hazardous  waste cases,
 or to  involve  them in settlement negotiations.   The Department
 of Justice has requested that EPA provide  insurance information
 as a  routine portion  of our case development report and reterral
 package.

      All  referrals of hazardous waste cases to the  Department of
 Justice should include a brief summary of  the  insurance coverage
 of potential defendants.  This information is  particularly
 important for  actions involving bankrupt or potentially Insolvent
 parties.
21   See Memorandum "Procedures for Issuing Notice Letters"
~    Trom Gene A.  Lucero,  Director EPA Office of Waste Programs
Enforcement,  to Directors, Waste Management Divisions Regions I-
X; Directors. Environmental Services Divisions Regions 1-X;
Regional Counsels, Regions I-X.  (October 12, 1964).  Pages 4-5,
and 24-25 discuss  information requests regarding the insurance
policies of potentially responsible parties.

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                                - 3 -


THE INSURANCE  POLICY - DETERMINING THE SCOPE OF THE COVERAGE

     The standard liability insurance policy is broken down
into three sections:  1) declarations; 2)  statement of general
liability; and  3) che standard coverage section.  The declara-
tions section  contains general statements  of the intent of
the parties and the name of the insurer and  the insured.  The
statement of general liability contains the  definitions
applicable to  che policy and the provisions  common to the
various standard coverage sections.  The standard coverage
sections constitute the bulk of the policy and contain the
insuring agreement and exclusions,  including Any pollution
exclusion provisions.  The standard coverage section usually
includes the insurer's promise to pay on behalf of che insured
and the insurer's duty to settle or defend claims against the
insured alleging bodily injury or property damage covered
under the policy. $/

     The interpretation of the insurance policy should begin
with a review  of the standard coverage section to determine the
theories upon  which EPA can proceed.   Most insurance policies
only obligate  che insurance carrier to defend against any suit
seeking damages or to pay on behalf of the insured such damages
which are covered' under the terns of che policy.

     Thus, ic  is important to examine che  scope of coverage of
the insurance  policy before referring an action to che Department
of Justice which aay have insurance aspects. Claims for injunctive
or equicable relief are usually not included within che coverage
of. che insurance policy, and che referral  for such relief need
not include che insurer as a potential defendant.  It may
nevertheless be prudent Co notify involved carriers of such
a claim.

     Where any CERCLA 1107 damage claim is included as a basis
for relief, the insurer may be idencified  as a potential
defendant-.  Claims for punitive damages aay  also be covered
under che policy and che Regions should include insurers as
3/   The insurance carrier has a duty to defend the insured
~    even, if the claims are groundless, false or fraudulent.

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                              - 4 -


 defendants  where  punitive damages are  sought.  4/  The referral
 package  prepared  by  the Region should  also  include a discussion
 of  the types  of policies which were  issued  to  the responsible
 party.

 TYPES  OF INSURANCE POLICIES

     There  are two types of  insurance  policies.   The first is
 the traditional casualty insurance contract known AS the
 Commercial  General Liability Policy  (CCL).  The standard CGL
 policy covera accidental or  sudden bodily injury  and property
 damage.   The  second  type of  policy it  the "claims-made" pollution
 liability policy  or  Environmental Impairment Liability (EIL)
 policy.   The  EIL  policy covers the insured  for liability for
 bodily injury and property damage resulting from  gradual pollu-
 tion,  or clean up costs incurred by  the insured.  EIL pollution
 liability policies enable owners and operators of hazardous
 waste  treatment,  storage,  and  disposal facilities to comply
 with RCRA's financial  responsibility requirements.

 CCL Policies

     There  are four  separate areas of  coverage available under
 the CGL  policies  which may be  applicable to CERCLA actions.
 The first is  the  premises and  operations hazard policy.  This
 policy provides coverage for  liabilities resulting from a
 condition on  the  insured'a premises or from the insured's
 operations  in progress  whether on or away from the insured's
 premises.   This type of policy would cover the owner or operator
 of  a facility, whether  the hazardous waste facility was active
 or  inactive, as long aa the'covered liability resulted in
 a condition which originated during coverage.

     The second area of coverage under the CGL policy is the
 products  and completed  operations policy.  This policy provides
 coverage  for liabilities  arising after products have left .the
 physical  possession  of  the insured and after the work performed
 has  been  completed or abandoned.  This type of policy nay
 cover the generator  of  hazardous substances if the waste can
 be  characterized  as  a  final  product.
4/   Most policies are silent regarding coverage for punitive
"~    damages.  Some states have allowed claims by the insured
for punitive damages paid to the federal government.

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              OUTLIHE  OF  INSURANCE  ISSUES
                   TABLE OF CONTENTS
 INTRODUCTION                                           Page

 I.  Types of Policies Iisutd                             3

     General Introduction                                 3

     A.  The Comprehensive General Liability (CGL)         5
         Policy

     B.  Development of che Pollution Exclusion           7

     C.  The Environmental Impairment Liability           9
         (EIL) Policy (appearing in che late
         1970'»)

     D.  The Insurance Services Office                    9
         (ISO) Policy


II.  Judicial Construction of CGI and
     CGL/Pollution Exclusion Policies

     A.  Construction of CGL Policies Generally          10

         1.  ".Accidents" under pre-1966 policies.        It

         2.  Definition of the "occurrence" under        12
             post-1966 policies.  (Discussion of
             the "exposure," "manifestation," and
             "triple-trigger" theories for deter-
             mining when an occurrence has taken
             place.

         3.  Apportionment of liability among            17
             insurers and insureds.

         4.  The scope of "property damage"              17
             coverage.  (Discussion of the extent
             to which remedial activity is covered.)

         S.  Statute of limitation questions.            18

         6.  Defenses available to the insurer.          19

     B.  Construction of OGL/Pollution Exclusion         20
         Policies

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                          • ii -

 INTRODUCTION (continued)                                 Page

III.  Construction of EIL and ISO Policies                 24
      A.   The EIL Policy                                   24
      B.   Th« ISO Policy                                   25
 IV.  Statutory Insurance Requirements                     25
      A.   RCRA Financial Responsibility                    25
          Requirements
      B.   CERCLA Financial Responsibility                  29
          Requirements
  V.  Potential Claims Against Insurers                    31
      A.   Claims Under Federal Lav                         31
          1.  RCRA enforcement claims                      31
          2.  CERCLA enforcement claims                    32
      B.   Assigned or Subrogaced Claims of the Insured:     36
          Assignment After Judgment,  Assignment Before
          Judgment. Assignment of Claims for Breach of
          Duties, and Assignments After Bankruptcy
      C.   Policy Provisions Allowing  Direct Action         46
      D.   Common Lav Denial of Direct Action               47
      E.   State Direct Action Statutes                     48
      F.   Other Procedures for Litigation Betveen the      49
          insurer and the United States
          1.  Intervention by the insurer in an action     49
              by the United State* against the insured
          2.  Declaratory judgment suits betveen the       50
              insurer and the insured — including
              a discussion of vhether the United States'
              may be estopped from bringing a subsequent
              direct action claim by  opposing insurer
              intervention In its-enforcement action,
              or by declining to participate in a
              declaratory relief action betveen the
              insurer and'the insured.

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INTRODUCTION
     Sine* ch« passage of the Comprehensive  Environmental
                                                  L/
Response, Compensation, and Liability Ace  (CERCLA7  in 1980,
the Environmental Protection Agency (EPA)  and the Department
of Justice (DOJ) have initiated more than  100 enforcement
actions against the owners and operators of hazardous waste
facilities, generators who arranged for the disposal of
hazardous substances, and transporters who handled hazardous
substances.  Many of these cases, some of  which were built
upon prior claims under the Resource Conservation and Recovery
           II
Act (RCRA),~ involve clains for millions of dollars of response
costs.  Defendants in these cases generally have sought legal
representation and indemnification from their insurance
carriers.  It is expected that the number  of collateral
actions involving the insurance carriers of RCRA and CERCLA
defendants will continue to grow, particularly in cases.
                           I/
involving multiple parties.
     The first purpose of this handbook is to provide a basic
understanding of insurance lav and potential claims for relief
against insurers which vill allow EPA and  DOJ enforcement
I/  42 U.S.C. II 9601-9656.
y  42 U.S.C. IS 6901, £!!•£• tto>c commonly 42 U.S.C. I 6973.
3/  Most insurance policies are effective on an annual
~   basis, and generators commonly changed carriers
during the disposal period or had several policies in
effect at the same time.  Therefore, large RCRA/CERCLA
lawsuits can involve multiple insurance carriers and
multiple policy periods.

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                          - 2 -

lawyers to litigate chcse claims, as vtll as respond to
defenses raised by insurance carriers.
     The second purpose of this handbook is co offer an
understanding of the insurance requirements of RCRA and
CERCLA.  Under the financial responsibility regulations
promulgated pursuant to Section 3004(6) of RCRA, each
owner or operator of a hazardous waste management facility
must aaintaln liability insurance against both sudden
                           y
and accidental occurrences.   An owner or operator of a
hazardous waste facility nay also satisfy post-closure
care financial assurance requireaents by obtaining post-
closure insurance.""  The handbook will review these regu-
latory requirements and their enforcement through compliance
actions, and will also briefly address Che insurance program
provided for in Section 108 of CERCLA, which has yet to be
implemented.
     Finally, the handbook is intended to.serve as a basic
reference resource.  Sons of the best articles and notes on
insurance issues are included as appendices and, in the
ease of some issues, are referenced in lieu of primary
discussion.  In addition, an alphabetical compendium of
selected cases appears at the back of the handbook.
4/  40 C.F.R. 264.147.
S/  40 C.F.R. 264.l43(e)

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                           - 3 -

 I.   Types  of Pelieiea Issued
     General  Introduction
      The standard liability insurance  policy is broken  down
 into three sections:   (1)  declarations;  (2)  Che statement
 of general liability;  and  (3).  the  standard  coverage  sections,
 The  declarations  section contains  general statements of the
 intent  of  the parties and  the  naaes of  the  insurer and
 the  insured.   The statement  of general  liability contains
 the  definitions applicable  to  the  policy and  the provisions
 common  to  the various  standard coverage sections.  The
 standard coverage sections  constitute  the bulk  of the
 policy  and contain  the insuring agreement and exclusions,
                                              6/
 including  any pollution exclusion  provisions.   The  standard
 coverage section  usually includes  che  insurer's precise
 co pay  on behalf  of che Insured and che insurer's duty
 Co scccle  or  defend claims  againsc Che  insured  alleging
                                               .           !/
 bodily  injury or  property damage covered under  che policy.
     The interpretation of  che insurance policy should begin
 with a  review of  the  standard  coverage section.  Most
 insurance  policies only obligate the insurance  carrier to
6/  See pp. 20-24 for • detailed discussion of the pollution
~   exclusion.
7/  The insurance carrier has a ducy co defend che insured
~   ev«n if che claims are groundless, false or fraudulent.
See Jackson Tovnship v. Hartford Ace. & Idea. Co.. 186
ITU. Super. '156, Uo (1982} unciudee in the compendium).

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                          - 4 -

dtftnd against any iuic iceking "damages" or to pay on behalf
of cht insured "damages" covttcd under the terns of the
policy.  Thus, ic is important co examine the scope of
coverage of che insurance policy in reviewing any potential
referral or suit against a carrier.
     Claias for injunctive or other equitable relief usually
are not included expressly within the coverage of the insurance
policy.  Nonetheless, several courts have sustained claims
to recover costs of abateaent or response incurred by the
insured.  See discussion below at pp. 17-18.  CERCLA Section
107 daaages and response cost claims .generally will be
covered, or a cognizable claia nay be made.  Claims for
penalties under CERCIA Section 106(b) or punitive damages
under CERCLA Section 107(c)(3) may also be covered under
the policy, although sone insurance agreements specifically
exclude coverage for punitive damages."  The referral
package prepared by EPA should include, if information is
available, a discussion of the policies which were issued
to the responsible party and copies of the policies.
     There are two basic types of insurance policy.  The
first is eh* traditional casualty insurance contract known
aa the Comprehensive General Liability Policy (CCL).  The
standard CCL policy covers accidental or sudden bodily injury
and property damage from an "accident," or "occurrence," during
8/  Most policies are  silent regarding coverage for punitive
~   daaages.  Some states have allowed claims by the insured
for punitive daaages paid to the  federal government.

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                           -  5  -

 Che policy  period,  regardless  of  when  che  claim is  actually
 Bade.  Since about  1970,  CGL policies  generally have  attrapced
 to exclude  coverage of any hazardous substance  injuries
 that were not "sudden and accidental"  in nature and contain
 a "pollution exclusion" to that effect.  These  clauses
 have not succeeded  in excluding coverage in a broad range
 of situations involving hazardous waste "damage,"
     The second type of policy is the  "claims-made" pollution
 liability,  or Environmental  Impairment Liability (EIL)
 policy.  The EIL policy covers the insured*s liability for
 bodily injury and property damage resulting from gradual
 pollution or cleanup costs incurred.   It is called a "claims-
made" policy because it covers only claims made during the
 tern of the policy.  The  EIL policy it analogous to health
 or life insurance, where  che claimant  is not required to
make a shoving of accidental injury.  One class of claims-
made pollution*liability  policies is specifically designed
 to enable owners and operators of hazardous waste treatment
 storage and disposal facilities to qomply with RCRA's finan-
 cial responsibility  requirements.  For brief descriptions
 of the various types of policies which have been issued
                                        3J
 and key typical clauses,  see Appendix A.
A.  The Comprehensive •;?:.-• si Liability (CCL) Policy
     There  are three types of coverage available under CCL
 policies.   The first is premises and operations hazard
97  T. Smith, Jr., "Environmental Damage Insurance -- A
    Priner," reported at VII Chen. & Rad. Uaate Lit.
    Rptr. 435"(1983).

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                           -  6  -

coverage.  This coverage  is  for  liabilities resulting froa
A condition on che  insured'* premises  or  from  the  insured's
operations in progress, whether  on or  away from che insured'*
premise*.  This type of policy would cover che owner or
                       12/
operacpr of a facility,   whether che  hazardous wasce facilicy
was accive or inactive. as long  as che disposal, «corag* or
treatment was acill in progress.
     The second and third areas  of CCL coverage are produce
hazard coverage and completed  operacions  hazard coverage.
These two, originally combined,  are now separate and
discinct.  Product hazard coverage covers injuries arising
out of product use, and is probably irrelevant to virtually
all CERCLA claims, unless the  court can be persuaded to
view a pollutant as a product.   In addition, the event of
release probably must take place after relinquishmenc of
control by the generator, and  away from che generator's
premises.  Completed operations  coverage nay afford a
somewhat broader basis for recovery, but  is nontheless
subject to limitations which would require appropriate
facts and careful pleading.  See Appendix G, pp. 562-563
for a summary discussion of key  facts  of both product hazard
and completed operations coverage.
     The standard coverage section of  a general liability
policy sets out the scope of the insurance agreement and
the exclusion* applicable to claims made  by the insured.
Uy  CERCLA Section  107(a), 42 U.S.C. 9607(a).

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                            - 7  -
The exclusions  to  the  scope  of  the  insurance  coverage muse

be clearly and  precisely  drafted"!""  The  exclusion which

insurers  invoke  against-claims  for  damages created by

hazardous wastes is the pollution exclusion.  The standard

pollution exclusion reads:

     "This insurance does not apply ...  to bodily
     injury or  property daaace  arising out of the
     discharge,  dispersal, release or escape of
     smoke, vapors, soot, fumes, acids,  alkalis,
     toxic chemicals.  liquids or ftases, vaste
     materials,  or ocher  irritants, contaminants
     or pollutants into or upon land, the atmosphere
     or any water course  or  body of water; but this
     exclusion does not apply if such discharge,
     release or  escape is sudden and accidental."
     (Emphasis added.)

The historical development of this exclusion to the standard

liability policy provides a  key to understanding recent

interpretations  of the applicability of  the pollution

exclusion to hazardous vaste cases.

B.  Development of the Pollution Exclusion

     The first standard,form for general liability insurance

policies was developed in 1940.  The model policy provision

was drafted to include liability for all claims made by

che insured that were "caused by accident."  This provision

vas widely interpreted by che courts co  include coverage

for common law nuisance claims  for environmental damage if
11 /  Because che insurer selects che language for the policy.
    the exclusions are generally interpreced in favor of che
insured.  An exclusion muse be drafted with clear and exact
language co be given effect by che courts.  See e.g. Allstate
Ins. Co. v.-Slock Oil Co.. 426 N.Y.S. Zd 603"ftT.YT App. i960)
(induced in the Compendium).

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                            • 8 •

 cht  pollutant* were suddenly and Accidentally discharged?"
      In 1966,  the Insurance Racing Board developed  a  new
 aodel contract which covered claim* "caused by occurrence"
 rather than claims "caused by accident."  The Board defined
 occurrence  bro*dly co include "an accident/'  including
 continuous  or  repeated exposure to conditions,  which  results,
 during the  policy period,  "in bodily injury or  property
 daaage neither expected or intended froa ehe  standpoint of
 the  insured."   The new language required a finding  that the
 damages were not  foreseeable or intended.   However, the
 courts continued  to hold insurance companies  liable for
 environmental  daaages even where the pollution  was  foreseeable
                                I!/
 it the damages were accidental.    in 1973, comprehensive
 general liability policies were revised  to include  the
 pollution exclusion clause.  See p.  7 for  the text  of
 the  exclusion.  The courts which have interpreted the
 pollution exclusion clause have agreed on  three relevant
 points:  (1) the  insurer has the burden  of proving  noncoverage;
 (2)  the exclusion applies  to the Intentional  polluter; and
                        • ""
 (3)  the exclusion does not apply to entitle*  which neither
 expect nor  intend their conduct to  result  in  bodily injury
127 See Appendix C, Hourihan,  "Insurance Coverage  for Environ-
    mental Daaage  Claims"  IS  Forun 551, 552  (1980).
IS/  Grand River Lime Co.  v.  Ohio Casualty Ins. Co.. 32 Ohio
    App. Zd. 178,  289 N.E.  2d 360 (

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                             -  9  -
or property  damage.   Sec  discussion  at pp. 20-24.
C.  The  Environmental Impairment Liability (EIL) Policy
    Regulations promulgated pursuant to. RCRA (see notes
4 and 5 >  have prompted  several  insurance carriers to offer
first party  insurance coverage  -- that is, coverage for
injuries*  caused by the  insured, obtained by the insured.
     The*  most common  of these "claims-made" policies is the
EIL policy,  which generally provides insurance coverage for
personal,  injury and property damage only from gradual
pollution, but not that which is sudden and accidental.
Off-sice  cleanup costs, including those incurred to avert
a loss,  arc  typically covered;  on- site cleanup costs are
not.  A. Lao typically  excluded from EIL policies -are coverage
of oil and gas drilling,  liability arising from nuclear
fuel, damage to property  owned  or occupied by the insured,
fines or-  penalties, punitive damages, costs of cleaning up
pre-exiajcing conditions at any  sice owned or leased by
the insured, and costs  of maintenance or routine cleanup.
D.  Insurance Services  Office (ISO) Policy
     Another type of  "claims-made" policy is the ISO
pollution liability policy — also developed in response
                                  *
to RCRA  regulatory insurance requirements.  ISO policies
]±l  For  a detailed history of  che developaent of the pollution
     exclusion, see Appendix  D, S. Hurvitz & D. Kohane, "The
Love Canal -  Insurance  Coverage for Environmental Accidents,"
Insurance Counsel J., July 1983, p. 378.

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                           -  10  -

provide indemnification  and  defense  coverage  for  pollution-
caused bodily  injury  and property damage  and  reimbursement
coverage for pollution cleanupa iapoaed by law or voluntarily
assumed with the content of 'the iniured.  Inaurance coverage
under 'an ISO policy is alao  extended to aitea uaed by the
insured for storage or treatnent but which are operated
by others.  Costs of  defense are provided apart froa
the liaits of  liability.   The policy excludes from coverage
daaages which  are expected or intended by the insured,
costs of cleanup for  sites owned, operated or used by
the insured, liability froa  abandoned sices, or liability
arising from the intentional violation of statutes or
                                  t
regulations, but does cover both gradual and sudden and
accidental daaages and injuries.
     Despite an increase in  "claims-Bade" environmental
insurance policies, coverage for.pollution-related
damages under  an E1L or ISO  policy is still rare.  It is
ouch more likely Chat a potential EPA hazardous waste
enforcement aeeion will involve a general liability
policy (CGL).
III.  Judicial Construction of'CCL and CGI/Pollution
      Exclusion policies'
      A.  Construction of  CCL Policies Generally
     Decisions generally consenting CGI policies have focused
on several issues:  whether  a covered "accident" or "occurrence"
has taken place, whether damage co che affecced "property"

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is covered, what statute of limitations should be applied
and in what Banner, what defenses art available to insurers,
and how should liabiliC7 be apportioned aaong insurers and
insured*.  A discussion of these issues will be followed by
a atparatt discussion of pollution exclusion clause construc-
tion.
     1.  "Accidents" under pre-1966 policies,
     CGL policies written prior to 1966 insured against damage
or injury "caused by accident."  Early dtcisions considering
when events giving rist to an injury were covered focused on
whether or not tht event was "... [a]n event that takts
place without one's foresight or expectations; an undesigned
sudden and unexpected event, chance, contingency."  United
States Fidelity & Guaranty Co. v. Briscoe. 205 Okla. 618,
239 P.2d 754, 757 (1951) (included in the Coopendiua),
quoting from Webster's International Dictionary.  Thus,
cases addressing injuries arising out of consequences of the
insured'• business which were typical and obvious tended to
deny coverage while eases involving unintended consequences
(even those arising out of failure to foresee that which
should have been seen) tended to affirm coverage.  Two articles
address these issues.  Appendix E, J. Coulka, "The Pollution
Exclusion," VI Chen. & Rad. Waste Lit. Rptr. 745, 745-748.
(1983) contains a succinct introduction to these cases.
Appendix F, C. Mitchell and J. Tesoriero, "When Does the
Occurrence Exist Under the General Cooaercial Liability

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                          - 12 -

Policy?," VII Chen. & Rad. Waste Lit. Rpcr. 657 (1984),
provides an additional detailed background on the history
and development of both the "accident" and "occurrence"
clauses.
     2.  "Occurrences" under post-1966 policies.
     In 1966, most CCL policies began to insure against
damages and injuries arising out of an "occurrence" during
the policy period — leaving open the central question
of when an "occurrence" has taken place and the related
issue of whether sequential or multiple occurrences have
taken place.  The former question is critical in evaluating
which policy or policies may provide coverage and occasionally
whether the statute of limitation may have run on the claim.
The latter question is critical to these issues, to what
policy limits or multiples of limits may apply, and to issues
of apportionment among carriers."""
     CGL policies generally define an occurrence as "an
accident, including continuoua or repeated exposure to
conditions, which results in bodily injury or property
damage neither expected nor intended from the standpoint
     If insurance coverage exists for the entire relevant
     period of time, but the plaintiff cannot establish when
the damage began or how it was apportioned during the period.
of time, courts will normally only require the plaintiff to
prove that damages occurred, and leave to the insurance
companies the burden of allocating the damages among them-
selves.  See Appendix G, Hourihan, "Insurance Coverage for
Environmental Damage Claims," 15 Forum 551, 559 (1981).

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                            -  13  -

of chc  Injured."   The  theories  upon  which  courts have
determined whether and when  a covered  "occurrrence" has
happened  arc several,  having evolved co aeet generic fact
patterns.   A discussion  of chose theories  follows.  See
generally Appendix F and Appendix 0, Charles Maher,
"Ashesto• Extravaganza," 5 Calif. Lawyer 60, 62-63 (June
1985).
     In ainple  property  damage  cases not involving slow
accumulation of damage,  the general rule is that there
is no "occurrence" until the actual harm for which relief
is aougrie manifests itself.  National Aviation Underwriters.
Inc.-v. Idaho Aviation Center.  Inc.. 93 Idaho 668, 471
         •                    •                     *
P.2d 56 (1970).  See also Annot.. 57 A.L.R. 2d 1385 (1958).
This rul,« is generally known as the manifestation theory.
     On che other hand,  in cases where damages arc sought
for sickness or disease  resulting from long term exposure
eo toxic  substances, courts have found that actual injury
occurr*^  during the policy period in which exposure alone
oceurre>d.  Insurance Company of Horth America v. Forty-
EUht' Insulations.. Inc.. 451 F.Supp. 1230  (E.D. Kich.  1978),
aff'd 633 F.2d  1212 (6ch Cir. 1990).  This rule is generally
ctlletd   Che exposure theory.  .In addition,  in contrast  to
ordinar-y  property damage eases where the manifestation
theory   applies, in property damage cases where damages
slowly   accumulate, courts have  generally applied the
expotur-c  theory in determining  insurance coverage.  So
long am there is  any tangible daaage (even if minute)

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                          - u -

resulting from exposure, Che courcs have allowed coverage
froa that time, although the damage Bay not aanifesc itself
until ouch later.  See, e.g.. Chaapion International Core.
v. Continental Casualty Co.. 546 F.2d 502 (2d cir. 1976),
cert" denied, 434 U.S. 819 (1977); Porter v. American Optical
Corp.. 641 F. 2d 1128 (5th Cir. 1981); Union Carbide Corp. v.
Travelers Indemnity Co.. 399 F.Supp. 12 (U.D._Pa. 1975); and
Cruol Construction Co. v. Insurance Co. of North Aaerica.
11 Wash. App. 632 524 P.2d 427 (Wash. Ct. App. 1974).
     Thus., it appears that application of the exposure theory
is appropriate in the context of CtfcCLA hazardous waste liti-
gation, since tangible injury and damage to the environoent
can occur soon after exposure to hazardous wastes, although
damage may not manifest itself until auch later.  At least on
court has held that where a landfill leaches toxic vast* into
groundvater over a nuabcr of years and harm results, the
                                  1 o/
exposure theory should be applied.    Application of the
exposure theory in the CERCLA context means that coverage
would be triggered under the insurance policies from the
time when the environment vas first exposed to the hazardous
waste.  Presumably, under Che exposure theory, all policies
from the time of disposal forward would be implicated% so
long as some tangible damage to the environment could
be shown to have occurred at the tiae of exposure and to
have continued thereafter.
     Jackson. Township v.. American Homes Assurance Co., Docket
~~   1-29236-80  (N.J7 Super.;  cunreportec),  citeo in Jacjcson
Township v.  Hartford Ace. &  Indemnity  Co.. 186 N.J. Super. 150,
165-166 (1982) (included in  the  Compendium).

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                           -  15  -

     Notably, Application  of the  txposurc  ch*ory to  trigger
 insurance  coverage does not  necessarily  rule out application
 of the manifestation theory  to  trigger subsequent coverage.
 In some cases,  in order that*the  purpose of the  policy not
 be undercut and in order to  protect the reasonable expectations
 of the insured, the insurance coverage during the period of
 manifestation of the injury  or damage is alao triggered.
 See Kcene  Corporation v. Insurance Company of Rorth America.
 667 F.2d 1034, 1045 (D.C. Cir. 1981).  This approach is
 commonly known as the "trlpple-trigger" or "continuous injury".
 theory.
     The application of the  exposure, manifestation, and
 triple-trigger theories has  frequently risen in  the analogous
 context of the asbestos-related disease cases.    In those
 cases dealing vith a slowly  progressive disease  in which
 tissue daaage occurs shortly after initial inhalation
 (exposure), cht courts have  generally favored the more
 generous exposure and triple-trigger theories.    See. Porter
v. American Optical Corp.. supra; Insurance Co. of North
 America v. Forty-Eight Insulations. Inc.. supra; and Kcene
 Corp. v. Insurance Company of North America, supra.
 (applying boch the exposure  and manifestation theories
 co trigger maximum coverage  under the policies.)*  One district
 court, however, has adopced  solely the manifestation theory
 in an aabeseos related disease case.  See Eaale-Picher
 Industries v. .Liberty Mutual Insurance Co., 523 F.Supp.
 110 (D. Mass. 1981).

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                           - 16 -

     Therefore, although only one unrcporctd state trial
court dtcifion has addressed chis issue in che hazardous
vasta context, there it strong analogous authority to
support application of the more expansive exposure theory
to trigger insurance coverage in waste cases.  Moreover.
there is sone analogous authority to support application
of both the manifestation and exposure theories to trigger
insurance coverage.  Consequently, once a pollution incident
has been determined to constitute an "occurrence" not excluded
from coverage under a pollution exclusion clause, there
should be little problca in triggering coverage under the
maximum number of policies by application of these theories.
     Finally, the question must be answered of how many
"occurrences" have taken place, where the injury continues
over a period of time and may manifest itself in distinct
and separate kinds of damages.  Courts determine the fre-
quency of the "occurrences," for purposes of applying a
policy's per occurrence limit or deductible provisions, by
                              i?/
applying one of several tests.    Tor a discussion of each
of these tests, see tenerally Appendix C, pp. 559 et. se£.
 /  Centrally, these tests  include:  the "affect test"
"   (looking to eh* vantage of the  injured party and
commonly finding more  than  one "occurrence"); the
"causation test" (widely accepted view baaed en examination
of cause); the "time and space test" (focusing on proximity
of causative factors in time and space), the hoperative
hazard  test" (examining the number  of distinct causative
acts);  and the "average person test" (which is what it
seems -- the favorite  of judges not enamored with more
abstract, rationalized standards).

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                            -  17 -

3.  Apportionment of liability among insurers and  insured*.
     Determinations concerning the number and duration of
"occurrences" can have a substantial impact upon the extent
to which multiple carriers o'f a single or many insured parties
•ay b« liable « a problem greatly compounded by th« technical
complexity and large numbers of defendants typical in hazardous
waste litigation.  For a thorough treatment of the theories
for determining when "occurrences" take place and  the conse-
quential application of those theories to apportionment
problems, see Appendix H, Note. "The Applicability of General
Liability Insurance to Hazardous Uaste Disposal,"  57 So. Cal.
L. Rev. 745 (1984).
     4.  The scope of "property damage" coverage.
     Courts have become progressively more willing to extend
covered "property damage" to costs of voluntary and compulsory
remediation — especially where the insured is responding to
conditions which may result in further damage to property,
health or the environment, or where a governmental entity
may incur costs and seek eventual reimbursement.   See Lansco.
Inc. v. Dept. of Environmental Protection. 138 N.J. Super.
275 (1975) (included in the Compendium) (coverage  of on-site
•pill remediation required by state law); US Aviex Co. v.
Travelers Ins. Co.. 125 Mich.  App. 579 (1983) (included in
                                •
the Compendium) (coverage of investigative and remedial
costs for state-mandated groundwater cleanup, founded upon
holding that groundwater was not property of the insured);

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                            -  18  -

and Richl v. Travelers Ins. Co.. Civ. No. 83-0085  (W.D.
Pa. Aug. 7, 1984), VIII Chea. &  Rad. Waste Lie. Rpcr. «39
(included in chc Compendium)  (coverage of CERCLA potentially
reponsible party's abatement'costs).  For a aore detailed
discussion of this issue, see Appendix I, M. Rodburg and
R. Chesler of Lowenatein, Sandier, Brochin, Kohl, Fisher,
BoyIan & Meaner, "Beyond the Pollution Exclusion: [etc.],
(1984), pp. 364-369; and Appendix J. K. Rosenbaum,
"Insurance, Hazardous Waste, and the Courts:  Unforeseen
Injuries, Unforeseen Law,"  13 ELR 10204, 10205-10207
(July 1983).
     5.  Statute of limitation questions.
     In state common law suits for injuries or damage, the
court's choice among exposure, manifestation, and triple-
trigger theories of occurrence may have a substantial
relationship co the running of the applicable statute of
limitations..  Fortunately,  this  choice of theories to
determine when injury or'damage  "occurs" within the meaning
of a comprehensive general  liability policy would not
determine when the statute  of limitations should commence
                     187
running under CE&CLA.    Otherwise, the date that injury
18./  Under Section 112(d) of CERCLA. 42 U.S.C. 9612(d):
        No claim may be .presented, nor may an
        action be commenced for damages under
        this title, unless that claim is
        presented or action commenced within
        three years from  the date of discovery
        of the loss or the date or enactment
        of this Act, whichever is later . .  .

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                            -  19  -

or dusage  is deemed  to  occur  for purposes  of  statutes of
limitation* is generally  the  date of manifestation.  See,
e.g.. United States  v.  Kubrick.  446 U.S.   Ill,  123-26
(1979); Urie v. Thompson. 337 U.S. 163, 170-71  (1949).
     6".  Defenses available to the insurer.
     VJhere an injured person may sue Che insurer directly,
before or alter judgment  against the insured, that suit is
generally subject to all  the defenses the  insurance company
                                 *'
has against the insured,  including the defense  that the
insurance company has not received notice  of  the underlying
lavsuit *s per the policy terms and deadlines,  and the
defense chat the insured has not cooperated with the
insurance company.  Generally, judgment creditors stand in
the shoes of the insured and have rights no greater and no
less than the insurer's rights would be if it had paid the
judgment and then sued  its insurance company  to recover the
amount paid.  Creer v.  Zurich Insurance Co.. 441 S.U. 2d
15,30 (Mo. 1969); accord HcSeal v.  Manchester Insurance and
Indeanitiitr Co.. 540 S.W. 2d 113, 119 (Mo. Ct.App. 1976)
(rights of the injured person are derivative and can rise
no higher than chose of the insured).  See also Appendix L,
Appleaan, Insurance Lav as Practice 14 4813-4817 (hereafter
"Appl«a«n").
     Probleas with notice, etc., may present considerable
difficulties during  aeteapta by the United States to recover
for CERCLA costs against  insurance companies.

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                            - 20  -

     B.  Conacruecion ef CCL/Pollution  Exclusion
     In response to Che judicial interpretation of the new
"occurrence" language in CGL policies che insurance industry
developed a specific exclusion Co  its policies which was
•cane.to clarify insurance  coverage for claims for pollution
daaage.  See pp. 7-9 for exclusion language and history.
This exclusion, referred to as the "pollution exclusion,"
has now been incorporated into the printed provisions
of aost commercial insurance forms.  It was intended by
the Insurance Rating Board  not to restrict coverage, but
merely to clarify coverage  by the use of the new language.
The pollution exclusion disallows claims for bodily injury
or property damage due to a release of  toxic chemicals, waste
materials, pollutants or contaminants into the environment
unless the release is "sudden and accidental."  There is a
split of authority regarding the meaning of these terms.
Several courts have held that they are  ambiguous, and have
construed the clause broadly in  favor of the insured.  In
these cases, coverage of the polluter has been upheld.  In
contrast, SOB* recent decisions  have held that the exclusion
may apply to eh* knowing, frequent hazardous waste polluter,
and that there is no ambiguity in the "sudden and accidental"
clause in such cases.
     Long-standing principles of insurance contract construc-
tion include chc requirement that  to be effective, an
exclusion must be conspicuous, plain, and clear, and must
be construed strictly against the  insurer and liberally in

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                            • 21 -

favor of tht tniurtd.  Sjee, e.g.. Pepper Industries, Tne. v.
Home Insurance Co.; 134 Cal. Rptr. 904, 67 C.A.3d 1012 4th
Diet, (included in cht Compendiua).  Any ambiguities muse
be resolved in favor of the insured.  See, e.g^. Abbie
Uriguen Oldsaobile-Buick. Inc. v. United States Fidelity
Ins. Co.. 95 Idaho 501, 511 P.2d 783 (Idaho 1973) and note
11, supra.  The courts Chat have considered the pollution
exclusion clause have almost unanimously held it to be
ambiguous, since it is fairly susceptible to two different
interpretations.  As such, they generally have rt«olv*d that
ambiguity in favor of the insured,  gee, e.g.. Dnion Pacific
Insurance Co. v. Van Vestlake Union. Inc.. supra; Niagara
County v. Utica Mutual Insurance Co.. 103 Misc. 2d 814, 427
N.Y.S. 2d 171 aff'd 439. R.Y.S. 2d 538 (1981) (included in
the Compendiua); and Molten. Allen & Uilliama, Inc. v. St. Paul
Fire & Marine Ins. Co.. 347 So.2d 95, 99 (Ala, 1977) (included
in the Compendiua).
     The terms of the pollution exclusion clause focus on
the insured'a intent in the actual discharge of the pollutant.
The definition of "occurrence," on the other hand, focuses
on the insured's expectation or intent with regard to
causing daaage or hara.  The majority of courts, taking a
broad view of insurance carrier's liability, have interpreted
the pollution exclusion clause, together with the definiton,
of "occurrence," to provide coverage except where there is
an intentional consequence, caused by a polluter who expects
or intends his conduct to cause daaage.  See, e.g.. Allstate

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                            - 22 -

Insurance Co. v. Klock Oil  Co.. supra  (included  in the
£oopendiua); Union Pacific  Insurtnec Co.  v. Van's West lake
Union. Inc.. 34 Wash. App.  208, 664 p.2d 1262 (Wash. 1983);
Jackson Township Municipal  Utilities Authority v. Hartford
Aecidtnt & Indemnity Co.. 186 N.J.  Super. 156, 451  A.2d
990 (N.J. Super App. Div. 1982) (included in che Compendium).
     In Lansco Inc. v. Department of Environaental Protection.
supra at p. 282 (included in the Compendium), the court found
that the term "sudden," rather than meaning "brief or of short
duration," aeans "happening without previous notice or on
very brief notiet; unforeseen; unexpected', unprepared
for."  The ten "accidental" aeans happening "unexpectedly
or by chance."  The court therefore concluded:
          . . . under the definition of "occurrence"
          contained in the  policy, whether the
          occurrence is accidental must be viewed
          from ehe standpoint of the insured and
          since the oil spill was neither expected
          nor intended by Lansco, it follow* that the
          spill was sudden  and accidental under the
          exclusion clause  even if caused by the
          deliberate act of a third party.
          Similarly, in Union Pacific  Insurance Co.. supra.-
a massive gasoline leak occurred at the insured's gas
station.  Approximately 80,000 gallons of gasoline leaked
out of a small hole in an underground  gasoline pipe over a
period of month*.  Despite  the policy's requirement that
an occurrence be "sudden" or else subject to the pollution
exclusion clause, the court held that  the leaking from'cht
line was not .expected nor intended, nor was the  resulting
damage.  Therefore, the pollution exclusion clause did not

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                           - 23 -
«xclud« coverage.  664 P.2d AC 1266.  Set also
Insurance Co.. supra at 605., where  the court staces that
the discharge or escape of gasoline could be both sudden
and accidental, even though undetected for a substantial
period, of tine, aince "sudden," as used in pollution exclusion
clauses, "need not be limited to an instantaneous happening."
     A few courts have refuaed to find any ambiguity in
cne terms "sudden and accidental" where the insured knowingly
discharges a substance as a normal feature of operations,
but.. has no expectation of intent to cause daaage.  In Great
Lakes Container Corp. v. Rational Union Fire Ins. Co.. 727
F.2d 30 (1st Cir. 1984) (included in  the Compendium) the
court dete rained that no insurance coverage was  provided to
Great Lakes in connection with a CERCLA action by the
United States against Great Lakes.and others  for hazardous
waste contamination.  Notably, the district court and the
First Circuit focused on two documents in deciding, whether
insurance coverage was  triggered:  (1) the comprehensive
general liability insurance policy; and (2) the United
States' complaint against Great Takes.  Becauae the United
States' complaint alleged that Great Lakes was liable for
contamination which "has taken place as a concomitant of
its regular business activity .  .  . ". the First Circuit
determined that no sudden o> -accidental occurrence triggering
coverage was alleged.   The court found that there is no
ambiguity in the policy "when the  policy  is read against
the conplaint."  Thus,  where  insurance  is or  nay be a

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                           • 24 -

factor., care must be taken to avoid counterproductive
pleading.
     The U.S. District Court for the Eastern District of
Michigan followed the Great Lakes decision in AcerJean
States Insurance Co. v. Maryland Casualty Co. 587 F. Supp.
1549 (E.D. Mich. 1984) (included in ehe Compendium).  The
court held that the insurance coetpanies did not have a
duty to defend or indemnify the company because the under-
lying National Drum litigation involved the continued,
non*accidental dumping of waste at the site.
     In summary, the general and widely accepted view is
that CCL policies with pollution exclusion clauses provide
coverage for pollution incidents where either the discharge
itself or the resulting damage is unexpected or unintended.
But, under the First Circuit's decision in Great Lakes
Container, supra, the discharge must be "accidental."  For
example, coverage exists for pollution incidents which
involve gradual seepage or leaking which is unexpected or
unintended.
III. Cons cruet JOT of EIL and ISO Policies
     A.  The EIL Policy
     The Environmental Impairment Liability (EIL) policy
was developed to provide coverage for liabilities not
thought to be covered by CGL policies following development
of the pollution exclusion — that is, claims for property
damage and personal  injury such as bodily  injury, mental
anguish, disability,  death at any time —  present or  in

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                            • 25  •

 cht  future  — caused  by  non-sudden,  non-accidental  "environ-
 mental  lapairaenc."   These  policies  have  not  been the subject
 of significant Judicial  construction.   For an excellent
 discussion  of their terns,  issuance  and use,  ste Appendix K
   \
 P. Hilvy. "Environmental Impairment  Liability Insurance
 and  Risk Assessment,"  The  Environmental  Forua, Oct. 1982,
 p. 30.
     B.  The ISO Policy
          The Insurance  Services Office (ISO)  policy is
 generally acre limited.  The EIL policy — restricting
 coverage to damage* and  losses arising out of  a "pollution
 incident," which includes only "direct" releases that result
 in "injurious aaounes" of pollution  —  is generally believed
 to cover only fortuitous damages, not those which are
 "expected or intended."  These policies have  not been the
 subject of significant judicial construction,  but cheir
 terns are discussed in•substantial detail and  contrasted
 with those of EIL policies  at Appendix A, pp. 449-453.
 IV.  Statutory Insurance Requirements
     A.  tCRA Financial Responsibility Requirements
     Under section 3004(6)  of RCRA, EPA must  establish
 standards "as may be necessary or desirable"  for financial
 responsibility, including financial responsibility for
 corrective action, applicable to owners and operators of
                        . *                                   i
 hazardous waste treatment,  storage, and disposal facilities.
!£/  42 O.S.C. ! 6924(a)(6).

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                           - 26 -

The 1984 amendment* to RCRA added in section 3004(t) that
financial responsibility may be established by any one
or a combination of the following: insurance, guarantees,
surety bonds, letters of credit, or qualification as a
             £o/
self-insurer.    RCRA also requires owners and operators
of facilities with interim status to certify that the
facilities are in compliance with financial responsibility
             21/
requirements.
     The regulations require each facility owner or operator
to certify financial assurance for both closure and post-closure
activities and to maintain liability insurance against both
sudden accidental and non-sudden accidental occurrences.
The requirements constitute Subpart H of Parts 264 and 265
of 40 C.F.R.  Part 264 contains standards that apply to
interim status facilities.  RCRA also provides for interim
authorization of state prograas that are substantially equiva-
lent to the federal program.  Many states have some type of
financial requirements for closure and post-closure, but
they vary considerably from seat* to state.
     The first step to establish financial assurance for
closure and post-closure is to estimate the cost of closure
and the annual cost of post-closure monitoring and maintenance.
207  42 U.S.C. $6924(t).
2J/  42 U.S.C. Section 6925(e)(2)(B) and 
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                           - 27 -

Th« aaount of financial assurance must at lease tqual chc
adjusted cost estimates.  The ownet and operator may use one
or »ore of several mechanisms allowed by the regulations to
meet the requirements.  As noted above, the possible mechanisms
include trust funds, surety bonds (that either guarantee pay-
ment into a 'trust fund or guarantee performance of closure
or post-closure), letters of credit, and insurance; or the
owner or operator may meet the requirement by satisfying
a financial test that provides a corporate guarantee of
                        22/
closure or post-closure.    To meet the financial assurance
requirements, an owner or operator may use more than one
of the options, except the financial test mechanism.
On* option may be used to assure funds for all facilities
of one owner or operator.  The most often used mechanism
is the financial test (about 80 percent) and the least
used is insurance (about 2.7 percent).  EPA will release
the facility from the financial assurance requirements
after receiving certification that closure has been
accomplished as sec out la eh* closure plan.
     Closure and post-closure insurance must satisfy a number
of requirements.  The owner or operator must submit a certifi-
cate of insurance to the Regional Administrator.  The .policy
must be insured for a face amount at least equal to the
227  40 C.F.R. 264.143, 265.143.

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                            - 28  -

closure or post-closure cost estimate, and  it oust guarantee
that the  insurer will pay for che closure or post-closure
activities.  If the cost of closure or post-closure is
significantly greater than the face aaount of the policy,
EPA say withhold reimbursement of funds.  The owner or
operator  nay not terminate the policy without EPA approval,
nor «ay the insurer cancel the policy except for failure
to pay the preaiutn.  Even upon failure to pay the premium,
the insurer cannot cancel the policy if within 120 days
of notice of failure, the facility is abandoned, interim
status is terminated, closure is ordered, or the owner or
                                                      13/
operator  is named a debtor in a bankruptcy proceeding.
     In addition to che closure and post-closure financial
assurances, the owner or operator must demonstrate financial
responsibility for claims arising from its operation for
                                                      24 /
personal  injuries or property damage to third parties.
For sudden accidental occurrences, the owner or operator
•use maintain liability coverage of at least 31 million per
occurrence with an annual aggregate of at least $2 million.
for non-sudden accidental occurrences, the owner or operator
of a surface impoundment, landfill, or land treatment facility
tract maintain liability coverage of at least $3 million per
occurrence with an annual aggregate of $6 million.  The owner
23/  40 C.F.R. 264-143(eK8), 40n C.F.R. 265-143(d) (8).
24/  40 C.F.R. 264.147, 265.147.

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                          - 29 -

or operator Bay deaonstrate financial responsibility by
                                                           257
having liability insurance, as specified in the regulations—
by passing a financial test for liability, or by using both
aechanisas.  Variances froa these requireoents are available
if the owner or operator deaonstrates that the levels of
insurance are higher than necessary.  Conversely, the Regional
Adainistrator may iapose higher levels of coverage if warranted.
     The owner or operator oust continuously provide liability
coverage for a facility until final closure.  Therefore, after
final closure, claims for personal injury or property damage
to third parties arc no longer covered by insurance required
by RCRA.  However, upon eventual transfer of liability,
CERCLA'a Post-Closure Liability Trust Fund will-assuae "the
liability established by this section or any other law for
the owner or operator of a hazardous waste facility.  .  ."
B.  CERCLA FINANCIAL RESPONSIBILITY REQUIREMENTS
       ,^77
     CERCLA Section 108(a)   requires that the owner or operator
of each described vessel "carrying hazardous substances
as cargo" aaintain at least $5 Billion in "evidence of
financial responsibility."  Proof aay be established by
any combination of "insurance, guarantee, surety bond,  or
qualification as a self*insurer."  This requireaent is
essentially an expansion of preexisting spill response
257  242 C.F.R. 265.U7(a) (1) .
267  42 U.S.C. I 9607(K).  The 99th Congress is considering
    eliainating the entire post-closure liability transfer
scheoe.
277  42 U.S.C. S 132l(p).

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                          - 30 -
                                               287
program rcquircntnts undtr the Clean Uater Ace.    Insurance
policies issued under these programs should be considered
whenever « release froa a vessel is involved.  CERCLA
              29.7
Seccion 108(b)   requires c:\«c the Admin is tracer, no
•arlier Chan December 11, 1985, promulgate financial respon-
sibility requireaents for facilities not covered under the
RCRA subtitle C prograa.  Priority is to be given to "those
classes of facilities" which "present the highest level of
risk of injury."  This prograa has not begun, but should
be considered as a potential source of coverage after
December 11, 1985.
     Two articles discuss aany of the above issues in
greater detail.  Appendix B, D. Jeraberg, "Environmental
Risk Insurance," FIC Quarterly, Winter 1984, pp. 123, e£
seq., briefly addresses the RCRA and CERCLA insurance
schemes and follows with a detailed discussion of coverage
under different policy types and examines various develop-
ments in the writing of exclusions.  Appendix C, A. Light,
"The Long Tail of Liability, [etc.J," 2 Va. J. Mat. Res.
L. 179 (1982), discusses uncertainties concerning coverage
at between RCRA prograa insurance and the CERCLA post-closure
liability fund.
28/  42 U.S.C. S 9608U).
29/  42 U.S.C. f 9608(b).

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                            • 32  -

"for bad filch cither  in negotiating or  in  filling  co
negotiate the settlement of any  claim."  Thus,  cht  United
Stitts may assert state dirtec action claims or assigned
bad faith claiaa in addition'Co  it* federal direct  action
claia.
     One likely enforcement i«*ue occurs where the  insured
is in bankruptcy.  RCRA Subsections 3004(t)(2) and  (3)
leiv«s open the question of whether the  insurance proceeds
are part of the estate in bankruptcy.  Our probable position
will be that if the judgment is  not satisfied fron  the
estate after a period of time specified by state law,
which is likely since it is in bankruptcy, then the proceeds
are not part of the estate and the government or other
claimants say take action directly against the insurer for
the judgment.
     2.  CERCLA enforcement claims.
     The only express rights of action against insurance
carriers under CERCLA are authorized at subsections 108(c)
and (d), 42 U.S.C. 9608(c) and (d), and which provide:
         (c) Any claim authorised by section 9607
     or 9611 of this title may be asserted directly
     against any guarantor providing evidence of
     financial responsibility as requried under
     this section.  In defending such a claim, the
     guarantor may invoke all rights and defenses which
     would be available to the owner or operator under
     this subchapcer.  The guarantor may also invoke
     the defense that the incident was caused by the
     willful misconduct of the owner or operator, but
     such guarantor may not invoke any other defense
     that such guarantor might have been entitled to
     invoke in a proceeding brought by the owner or
     operator against him.

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                            - 33 -


          (d) Any guarantor  acting in good
     faith against which claims under this
     Act  art asserted as a  guarantor shall
     be liable under section 9607 of this
     title or section 9612(c) of this title
     only up to the monetary.limits of the
     policy of insurance or indemnity contract
     such guarantor has undertaken or the
     guaranty of other evidence of financial
     responsibility furnished under this
     section, and only to the extent that
     liability is not excluded by restrictive
     •ndorseaent: Provided, that this subsec-
     tion shall not alter the liability of any
     person under section 9607 of this title.

     The  authorization of a direct claim against a guarantor

is limited to a "guarantor providing evidence of financial

responsibility as required under this section" (emphasis

added).   Section 108 has two provisions requiring evidence

of financial responsibility.  Section 108(a) requires evidence

of financial responsibility by the owner or operator of

certain vessels and offshore facilities, in accordance with

regulations promulgated by the President.  Thus, once the

President or his designee promulgates such regulations, a

right of  direct action is available against any insurer

issuing insurance under those regulations to a covered
                            307
vessel or offshore facility.

     The  second requirement for evidence of financial

responsibility is in Section 10S(b).  Section 108(b)
30/  The Coast Guard takes the view that section 108(a)  of
     CEKCLA "implicitly" repeals or supersedes financial
responsibility regulations under section 311(p) of the Clean
Water Act, 33 U.S.C. 1321(p). and that under the provision
section 302(c) of CERCLA, 42 U.S.C. 9652(c), the section

             [FOOTNOTE CONTINUED ON NEXT FACE]

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                           - 34 -

establishes a framework for imposing financial  responsibility
requirements on onshort facilities, but on a prolonged
schedule.  Not later than December 11, 1983, the President
is to identify the classes of facilities for which financial
responsibility requirements will be developed.  The actual
requircaents are to be promulgated no earlier than December
11, 1985.  When the regulations are promulgated, they are
to impose incremental financial responsibility requirements
over a period of not less than three years nor more than
six years from the date of promulgation.  Thus, under the
framework established in Section 108(b), financial respon-
sibility requirements would not begin until at least December
11, 1985, and consequently, a direct claim against an
insurer under Section 108(c) could not be made until
                3J./
after that date.
          [FOOTNOTE CONTINUED FROM PREVIOUS PAGE]
311(p) regulations remain in full force and effect until
such ciae as section 108(a) regulations are issued.
    Financial responsibility requirements and direct cause
of action provision* similar to chose contained in section
108 of CERCLA arc also found in section 311(p) of the Clean
Water Ace, 33 U,S.C. 1321(p). and in section 305 of the Outer
Continental Shelf Lands Act Amendments of 1978. 43 D.S.C.
1815.
    The authoricy to promulgate financial responsibility
regulations required under CERCLA section 108 (-a) regarding
vessels and offshore facilities was delegated to the Coast
Guard by Executive Order 12418 (May 5, 1983), 48 Fed.Reg.
20891 (May 10, 1983).
31 /  This entire provision may be qualified in the saae
—   manner" as set forth in RCRA Section 3004(t) during
reauthorization of CERCLA in 1985.

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                           - 35 -

     Tht nexc question is whether soae other  federal daia
against insurers may be found or implied under CERCLA.
The two sections of CERCLA most relevant to the possibility
of a right of direct action'against an insurer are Sections
107 and 108, 42 U.S.C. f 9607 and 9608.  Section 107 is
the sain liability provision of CERCLA and does not by its
tens include insurers among the list of responsible parties
listed in Section I07(a).  Section 107(t) preserves the
validity of insurance agreements, but does not implicitly
or explicitly authorize actions directly against insurers
by a party other than the insured.  As noted  above, an
analysis of the language of section 108 reveals a legislative
intent to permit actions directly against financial respon-
sibility insurers, but only under limited conditions.
     A clear federal direct right of action under CERCLA
against insurance companies appears to be dependent upon the
issuance of financial responsibility regulations.  As to the
onshore facilities with which we deal most frequently, such
regulations vill not b* promulgated until at  least December
11. 1985.  In the interim, there is only a potential for
developing an interstitial federal common lav. based on
the need for a uniform approach to the ^assertion of claims
generally allowed under .state lew.  CIR.CLA section 302(c)
preserves financial responsibility regulations issued
under section 311(p) of the Clean Water Act and RCRA, as
well as all state direct action claims which  the United
States may be entitled to assert.

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                            - 36  -

     B.  Assigned or Subrogated  Claims of the  Insured
         Assignment After Judgment, Assignment Before
         Judgment, Assignment of Claims for Breach of
         Duties, and Assignments After Bankruptcy
     This section vill discuss whether and under what condi-
tions a defendant or potential defendant in a RCRA or CERCLA
case could assign its claia against its liability insurance
carrier to ehe United States.  As with other insurance issues,
these are largely issues of State lav.  Accordingly, specific
state authorities should be consulted before any strategic
decisions are made.
     Resolution of assignment questions depends to a sub-
stantial degree on the factual context of the case.  This
discussion assumes that the United States has a RCFA or
CERCLA claia against a defendant and that Che defendant has
possible liability insurance coverage with respect to that
claia.  If the defendant is a "deep-pocket," i.e., it will be
able to satisfy any judgment against it, the United States
probably would not want to take more than a passive role with
respect to insurance, coverage issues.  Acordingly, for purposes
erf further discussion, we can assume that the defendant has
Little if any assets to satisfy  the CERCLA judgment and that
the United States' primary hope  for substantial recovery is
froo the insurance carrier.
                  Assignment After Judgment
     Fundamental issues regarding the prosecution of direct
action claias against an insurer are usually dependent on

-------
                             -  37  -

whether a Judgment  has  yec  been entered against  the  insured
defendant on  the claim.   If it has, there are a  number
of possible methods  for pursuing  claias directly against the
insurance carrier.   These may  include, depending on  the
jurisdiction  and the insurance policy involved,  proceeding
as a third party beneficiary under the policy, as a judgment
creditor garaishee,  as an assignee, or proceeding under
applicable statutory provisions allowing direct  suit against
the insurance carrier.  See A* Windt, Insurance  Claims and
Disputes 365  (1984).  Of course,  if the insurance carrier
has defended  its insured without  a reservation of its
right to deny coverage, it  can be expected to pay the
judgment, to  the extent of  policy limits, without the need
for further proceedings.
     In the absence  of a policy provision providing for
direct action by che injured party, the United States could
proceed after judgment via garnishment or applicable statutory
provisions allowing  direct claims against the insurer.
Alternatively, an assignment could be taken of the insured's
rights agiinst its  insurer, in partial or full settlement of
the United States'  claim against  the insured.
     Liability insurance policies generally have a provision
prohibiting assignments.  The  following provision is typical.
      Assignment.  Assignment  of  interest -under  this
      policy  shall  not bind the company until its
      consent is endorsed hereon.
Nevertheless, courts have almost  uniformly held  that the
prohibition is one  against  assigning the general coverage

-------
                             -  38  -

providtd by tht policy before  lo«s, and  chat  it  does not
encompass a prohibicion againsc assignment after a loss has
occurred.  The basis for chit  distinction has been explained
as follows:
     Although there is some authority co the
     contrary, the great weight of authority
     supports the rule that general stipulations
     in policies prohibiting assignments thereof
     except vith the concent of Che insurer apply
     co assignments before loss only, and do noc
     prevene an assignment after  loss, for the
     obvious reason that the clause by its own
     terms ordinarily prohibits merely the assign-
     ment of the policy, as distinguished from a
     claim arising thereunder, and the assignment
     before loss involves a transfer of a contractual
     relationship while che assignment after loss
     is the transfer of a righc co a money claim.
16 Couch on Insurance 2d 163:40 (Rev. ed.); accord. 7
Appelman, Insurance Law & Practice §4259; Maneikis v. St.
Paul Insurance Co.. 655 F.2d 818. 826. (7ch Cir.  1981) ("Policy
provision [against assignments],  however, can only prohibit
assignment of policy coverage, noc assignment of an accrued
cauae of action."); International Rediscount Corp. v. Hartford
Accident & Indemnity Co.. 425  F.Supp. 669 (D. Del. 1977);
and Brown v. State Farm Mutual Automobile Insurance Asso-
ciation. 1 111. App. 3d 47, 272 R.E. 2d 261, 264 (1971)
     Following an assignmenc,  che assignee stands in che
shoes of the Insured and will  be  subject co any defenses chat
ehe insurer had against che insured prior Co assignment.  See
A. Uindc, supra. ac 367.  Thus, che insurer can assert.that
che claim is noc within che coverage of che policy or that
policy conditions have noc been complied with.  Therefore,

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                             - 39  -

 tht value of Any  Assignment  should be  examined  CArefully
 prior  Co its acceptance  AS consideration  for  settlement.
                  Assignment Before Judgment
     While An Assignment  After judgment is generally
 Allowed, assignments before  judgment present  special
 problena And «Ay  not be AppropriACe in certAin situAtions.
At leAst two problems Arise  in the prtjudgment context.
     First, liability policies generally require the insured
 to cooperate with the insurer.  Assignment of a claim under
 the policy AgAinst the insurer could be construed AS A viola-
 tion of the cooperation requireaenc.  Such A  construction
would be likely if the insurer HAS Agreed to  defend And hAs
not denied coverage.  The c —-ration clause  of A liAbility
 insurance policy vill be deemeo violAted where the insured,
by collusive conduct. AppeArs to be Assisting the claimant
 in the maintenance of his action.  14 Couch on Insurance.
supra. $51.115; And Brown v. State Farm Mutual Automobile
InsurAnee Association, supra. 272 N. E.2d AC 264 ("[Cjollusion
in respecc eo liability is,  of course, A direct violation
of che non-cooperACion clauses of che insurance policies, And
 if established is a defense  eo che insurer's liability.").
     However, in  a situation where che insurer has denied
coverage and has  refused cv?     nd. An assignmenc should not
violate the cooperation requirement.  Ic has generally been
held chac chere is no duty eo cooperAte once che insurer has
denied coverage.  14 Couch on Insurance, suprA.  151.121; A.
Windt, suora. AC  97; Shernoff & Levine, Insurance;  Bad Faith

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                            - 40 -


Litigation. 13.06(3] (1984); and see Critz v. Farmers Insurance

Group. 230 Cal. App. 2d 788, 41 Cal. Rptr. 401 (1964).  In

Critt. the court rejected tht argument that an assignment of

rights again*c the insurer violated the cooperation agreement

of the policy in a situation where the insurer had itself

failed to comply with the policy.  230 Cal. App.  2d at 801 .

The Court stated:

     Whatever may be [the insured'•] obligation eo
     the carrier, it does not demand that he bare
     his breast to the continued danger of personal
     liability.  By executing the assignment, he
     attempts only to shield himself from the
     danger to which the company has exposed hia.
     He is doubtless less friendly to his insurer
     than he might otherwise have been.  The
     absence of cordiality is attributable not
     to the assignment, but to his fear that the
     insurer has callously exposed him to extensive
     personal liability.  The insurer's breach go
     narrows Che pelicyholder's duty of cooperation
     that the self-protective assignment does not
     violate it.

     The other obstacle to an assignment before judgment is

the standard policy provision — called the "no action"

provision — requiring a judgment against the insured, or a

settlement consented eo by the insurer, before suit is

commenced against the insurer.  One such provision provides:

    Action Against Company.  No action shall lie
    against the company unless, as a condition precedent
    thereto, there shall have been full compliance with
    all of the tens of this policy, nor until the
    amount of the Insured's obligation to pay shall
    have been finally determined either by judgment
    against the insured after actual trial or by
    written agreement of the insured, the claimant
    and the company.

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                             -  41  -

See generally.  11 Couch on  Insurance,  supra,  $$44 .-318-44:323.
Again,  in situations where  che insurer -has agreed  to defend
ics insured,  this provision will  likely prohibit any pre-
judgment assignment.  However,  an assignment may be possible
if che  insurer  refuses to defend.
     As noced above, the standard policy provision requires,
as a predicate  to the insurer's liability, a Judgment or a
settlement among the claimant,  the  insured and the insurer.
If the  situation which creates  the  desire for an assignment
is one where  the insurer refuses  to settle, a settlement
without the insurer's consent  would not ordinarily create a
basis for liability by the  insurer.  However, it has been
held chat if  che insurer refuses  Co defend che insured, che
       .    •
insured may enctr inco a reasonable settlement and, there-
after, seek reimbursement from  ics  insurer.  This rule is
stated by Appieman as follows:
     If an insurer unjustifiably  refuses Co defend a
     suit, che  insured may  make a reasonable settlement
     or compromise of che injured person's'claim, and is
     chen encieled eo reimbursement from the insurer,
     even chough Ch« policy purports eo avoid liability
     for settlement made without  che insurer's consent.
7C Appleman,  supra. $46.90.  In such a situation, che insured
may, as pare of a setclenenc,  "simply assign cercain rights to
che plaintiff."  Id. See also  id. 14714.  In other words, the
settlement can  include an assignment.
    Maneikis v. St. Paul Insurance  Co.. 655 F.2d 818 (7th
Cir. 1981) illustrates chis point.  There, Maneikis
initially sued an attorney,  Solocke, who represented him

-------
                            - 42 -

in * prior business matter.  Solotke'a professional  liability
insurer, St. Paul Insurance, denied coverage and refused to
defend, claiming the natter sued upon was not vithin scope
of the policy.  Thereafter, Maneikis and Soloeke entered
into a settleacnt agreement of $200,000 to be satisfied by
Solotke's payment of $50,000 and his assignaent to Haneikis
of his rights against St. Paul.  Maneikis sued St. Paul on
the assignaent.  The trial court granted sumaary judgment
Co St. Paul.  The Seventh Circuit reversed.  It found chat
the policy provision prohibiting assignments did not apply
to assignments of an accrued cause of action and that an
"insurer's wrongful refusal to defend permits the insured
to negotiate a reasonable settlement."  Ld at 827.  See
also Carter v. Aetna Ca«ual"CT~and Surety Co., 473 F.2d
1071  (8th Cir. 1973); Crit« v. Tamers Insurance Croup.
supra; Samson v. Transaaerica Insurance Co.. 30 Cal. 3d
220.  240-41, 178 Cal. Rpcr. 343, 636 P. 2d 32 (1981);
Shemoff & Levine, supra. 13*06(3) ("It has also been
held that when the insurer denies coverage and refuses to
defend* its insured, the insure^ need not notify the
insurer of any assignment of his or her rights against the
insurer prior co Judgment."); and 14 Couch on Insurance.
supra. $51.72.  Couch states the rule as follows:
     If the insurer unjustifiably refuses to defend
     an action against the  insured, on the ground
     that the action was based upon a claim noc
     covered by the policy, ic cannot successfully
     invoke che no erial clause co bar liability,
     for che reason chat when che eectleaenc by
     the insured after che  unjustified refusal to

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                            - 43  -

     dcftnd WAS made  in Absolute good  filch  in
     order to ovoid che chariot of  An Adverse verdict
     for A much 1'Arger sum, ic would seen  grossly
     unjust, if not concrAry to  public policy,  to
     insist ehst there aust be in  every CAse An
     Actual triAl And verdict.
     To sumoArize, where the United StAtes hAS  not yet
obtAined A judgment And where A  defendsnt's  insurer BAS
                  32/
refused Co defend,   A settleaent  could be considered with
the defendant which included, Aaong other things, Assignment
of the defendAnt's clAims AgAinst  its  insurer.  Specific
stAte Authority should, of course, be consulted before such
An Assignment is negotiated And  Accepted.
      Assignment of ClAims for Breech Duties
     Another fACt situation in which the Assignment issue
frequently Arises-involves bad faich refusal  to settle.
     1C is generally held that an  insurance  carrier which in
bAd fAith refuses to settle A clAim within policy limits mAy
thereafter be liable Co chc insured if a judgment is entered
beyond the policy limits.  This  subject is discussed AC length
in 7C Appleaan. supra f14711-15;   See, e.g.. Critz v. Farmers
Insurance Croup, supre?.
     For example, assume chat plaintiff sues defendant for
$50,000.  Defendant has an insurance policy with a $25,000
317 An insurer may frequently defend its insured with a reser-
    vation of lea right co ultimately deny coverage.  There is
a division in authority as co whecher such a reservation of
righcs, or non-waiver agreement, muse be consented to by the
insured.  See 14 Couch on Insurance, supra. 8651:89.  As noted
above, if chere is a defense by che insurer with reservation
of rights, ie may be questionable whether the defendant
could enter into A settlement without che insurer's consent
end scill preserve its righcs AgAinst che insurer.

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                             - 44 -

policy ll«ic.  During  che course of litigation, plaintiff
offers co settle for $25,000.  If the  insurance carrier in
bad faith refuses to accept  the settleaent and judgment is
thereafter entered for $50,000, the insurer will be, if its
bad faith is established, liable eo pay che encire $50,000
and may also be subject to a punitive daaage award.
In the situation described, one assignment issue arises if
the insurer, after judgment, pays plaintiff $25,000 but
refuses to pay the other $25,000.  Can the defendant assign
its bad-faith-refusal-to-pay claim to plaintiff in satisfac-
tion of the judgment against it?  Most courts have said yes.
     Brown v. State Farm Mutual Automobile Insurance Associa-
tion, supra, illustrates this situation.  There., an insured
was sued for $40,000.  It had ah automobile liability
policy for $20,000.  After discovery, the plaintiff offered
to settle for $20,000.  The offer was refused.  Judgment
was entered for $40.000.  The insurer then paid $20,000.
The insurer's only assets were $5,500 and a potential dais
against the insurer for bad faith refusal to settle.  Those
assets vert assigned to plaintiff,  who then sued the insurer.
The Illinois appellate court allowed the assignment stating:
"We find no valid reason in public policy why the cause of
action should not be assignable."  272 H.E. 2d at 264;  accord.
Murphy v. Allstate Insurance Co.. 17 Cal. 3d 937, 132 Cal.
Rptr. 424, 533 P.2d 584, 587 (1976) ("The insured may assign
his cause of action for breach of the duty to settle without

-------
                            - 45 -


consent of the insurance carrier, even when che policy provi-

sion* provide to che contrary.").

     Bad faith refusal to pay claims may well arise in CERCLA

cases, particularly as the requirements of CERCLA become

oore clearly established.  In situations where the claim of

the United States exceeds policy limits and the insured has

little if any assets of its own, it nay be advisable for the

United States to consider making a less-than-policy-limits

settlement offer.  If the offer is refused and a judgment

beyond policy limits is obtained, the United States can then

consider taking an assignment of the insured's claim against

the insurer for wrongful refusal to settle.

     Finally, assignments in Che excess liability context,

i.e.. where a Judgment exceeds policy limits,  are apparently

quite common and allow the judgment creditor to seek full

reimbursement from the insurer.  One treatise describes the

situation AS follows:

     A common practice by which the injured third-
     party claimant achieves full compensation, and
     the insured is absolved from the liability
     Judgment, is an assignment by the insured
     of his rights against the insurer to the
     insured's Judgment-creditor.  In exchange
     for the assignment, che claimant signs a
     covenant not to execute above the policy
     liaits against che insured.  The assignment
     thus becomes a convenient way for Che insured
     to fully satisfy the injured party.  In
     situations where the insured is basically
     'judgment proof,1 ic may well net che injured
     party far more than execution of che judgment
     against the insured.  One disadvantage of
     this technique for the claimant is that the
     risks of collectibilicy and litigation
     against the insurer fall upon the claimant.

1  Long, Law of Liability Insurance 15.46.

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                             -  47  -

 Allows a party who  ha*  obtained judgatnc  under  the  policy
 co proceed against  the  insurer.   It  provides:
     Any person  or  organization or the Itgal
     representative thereof  who has  secured
     such  judgment  or written  agreement shall
     thereafter  be  entitled  to recover under
     this  policy to the extent of the insurance
     afforded by this policy.
     Where such  provisions are present, they are probably
 required by statute.
                                           21/
     0.  Common  Lav Denial of  Direct Action
         Coaaon  lav generally  denies claims by injured
 persons against  a tortfeasor's insurer.  Ap pieman. S 4861.
 Liability  and indemnity policies  (the first covers the
 insured's  liability, the second primarily serves to cover the
 insured's  losses) typically  contain clauses barring joinder
 of the insurer .in actions against the insured, which are
upheld in  the absence of a statute to the contrary.  Appieman,
 S 4861.  Similarly, most jurisdictions do not allow the insurer
 to intervene in  an  action against the insured.  Applcaan.
 I 4861 .  See, e.g., United States v. Hortheastern Pharmaceu-
 tical and  Chemical  Co.. Inc.. Civ. No. 80-5066-CIV-S-4
 (V.D. Mo., May 3. 1983) (included in the Compendium) (denying
 insurer intervention in a RCRA ! 7003 and CERCLA Si 106 and
 107 action).
33/  The discussion under this heading and the next is
     derived largely from two sources:  Appleoan, Insurance
Lav and Practice (1981, Supplemented 1984), SS 4861 ,  et. seq,
("Appleaan") (Appendix L), «nd American Insurance Asso-
ciation. Statutes Affectint Liability insurance (198U
(AlA survey) (A summary of airect action rules in the 50
states, Guam and Puerto Rico is presented at Appendix M.).

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                            - 68 -

     Thert  is one notable exception to the common law rule
regarding direct action.  Some jurisdictions allow direct
actions, in the absence of a direct action statut.e, where
the policy  is required.  Alabaaa recognizes such an exception,
while Arizona does not.  In Illinois, it is recognized in
actions on  employer's liability and compensation policies.
Appleaan, S 4862.  This exception is sometimes qualified for
specific forms of insurance.  See Appendix M.  Since states
operating approved RCRA regulatory programs will probably
require insurance under state lav, this exception may be
significant.
     E.  State Direct Action Statutes
         Aa of 1981, twenty-seven states, Puerto Rico and
Guam had adopted some form of direct action statute.  See
Appendix M.  These statutes may allow joinder of insurers,
independent prejudgment litigation against insurers, post-
judgment suits to recover directly from insurers, or some
combination of these options.  These statutes typically
provide that liability policies must contain provisions
allowing such suits, or provide that such suits may be
brought notwithstanding a policy clause to the contrary.
     Frequently, authorized direct action claims are limited
by category or arc otherwise conditioned.  For example,
34/  The first direct action suit brought by the United States
     to recover  from the-insurer of a &CRA/CERCLA judgment
debtor is United States v. Continental Insurance Co.. Civ.
No. 85-3069-CV-5-<»  (V.D. Missouri, nieo narcn  I?B:>;.  The
complaint is  presented as Appendix N.

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                             - 49  -

sixteen states allow post-judgment suits against insurers
only  if tht judgment has not been be act by execution upon
the insured.  Only Louisiana, Guam and Puerto Rico allow
broad prtjudgment direct actions.  See Appendix M, and the
AIA Survey, which contains details of individual state
statutes.
     Due to the extraordinary variety of state statutes
on this subject, the United States nay be served best
by arguing the necessity of a uniform federal common law rule
for direct action in RCRA and CERCIA cases, as has been done
successfully for the similarly diverse issues of joint and
several liability and contribution.  See United States v.
A & F Materials. 578 F. Supp. 1249, 1255-56 (S.D.  111. 1994);
United States'v. Chem-Dyne. et al.. 572 F. Supp.  802. 807
(S.D. Ohio 1983; and Vehner v. Syntex Agribusiness. Inc..
Civ. No. 83-642 (2) (E.D. Mo. April 1, 1985) IX Chem. & Rad.
Uaste Lit. Rptr. 879.
     F.  Other Procedures for Litigation Between
         Insurers and the United States
         1.  Intervention by the insurer in an action by
             Che United State* against the insured.
             As indicated ac p. 47. supra, the courts generally
h*ve not allowed insurers to intervene in suits against the
insured.  This has proven true in all cases in which the
question has been tested under RCRA and CERCLA.  On the other
hand, if all parties to the litigation support permissive
intervention in an action by the United States under an

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                             -  50 -

environmental statute,  there is no obvious reason why
intervention must be denied.
         2.  Declaratory judgment suits between the
             insurer and the insured.
             Private and governmental civil suits urder RCRA
and CERCLA have spawned several suits for declaratory relief
between  insurers and purportedly insured waste site owners
and operators, transporters aad generators.  A private
attorney reportedly stated in April, 1985 that Aetna Casualty
Ins. Co. (one of the major carriers in the field) was then
receiving an average of two hazardous waste related claims
per day.  In several state court cases involving coverage
disputes between CERCLA responsible parties and their insurers,
efforts have been Bade  to join the United Staes 'a* a third
party defendant on the grounds tht it is an interested party.
Hone of  these efforts -has succeeded.
     Sovereign immunity bars any suit against the United States
in the absence of a specific congressional waiver.  There is
no statute providing that the United States can be named as
a defendant in on* of these cases.  The type of relief sought
does not seen to affect the applicability of the immunity
one way  or the other; and the cases generally hold that the
doctrine is absolute.  Thus, the state courts do not have
jurisdiction over the United States in these insurance
suits.   Block v. North  Dakota. 103 S.Ct. 1811, 1816 (1983);
United States v. Sherwood. 312 U.S. 584, 586 (1941).

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                             -  51 -

     Success by the insured  in coverage litigation probably
precludes  the  insurer from contesting some or all questions
of coverage in a subsequent  direct action by the United
States.  The doctrine of collateral estoppel, or issue pre-
clusion, holds that where an issue of fact or lav was actually
litigated  and determined by  a valid and final judgment, that
determination is conclusive  in a subsequent action involving
the sane parties or at least the same party as is sought to
be held, whether it is on the same or on a different claim.
Wright. Law of Federal Courts I 100A (4th ed. 1983)  [hereinafter
Wright] , and cases cited.
     If the United States is not a party to the litigation,
could it be bound?  Ordinarily, persons who were not parties
to the first action will not be estopped.  18 C. Wright, A.
Miller & E. Cooper, Federal Practice, Procedure, and Juris-
diction ff 4448-4449 (1981) and [hereinafter Wright  and Miller)
and eases  cited.  Where a defendant is not subject to the
jurisdiction of a court, it can not be a party and thus can
not be"bound by collateral estoppel.  Zenith Radio Corp. v.
Hazeltine  Research. Inc.. 395 U.S.  100. 110 (1969);  Oil &
Cat Ventures First 1958 Fund. Ltd,  v. Rung. 250 F. Supp.
744, 753-54 (S.D.N.Y. 1966); and 18 Wright & Miller  ! 4449.
Thus, if a court could not exercise jurisdiction over the
United States, the United States could not be considered a
party and  could not be estopped by any decision by the court.

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                             -  52  -

     However, nonparties  to  suits can  sometimes  be  held  to
bt collaterally estopped  --  if the nonparty  actively  partic-
ipated in the prior case, and  was a party  in everything  but
name; if the nonparty's in",  ists were specifically repre-
sented in the first action,  e.g. a trustee or guardian was
involved in the first  suit;  if the nonparty  had  some  actual
duty to either enter the  lawsuit or give soae notice  that it
was not interested in  the suit and would not -consider itself
bound by it; or, if there was  a sufficient party to the
suit. e.g.. they held  successive interests in the property
that was th* subject of the  suit.  18 Wright & Miller S 4449
and cases cited.
     The first two exceptive,  -o not seea applicable  to the
United States.  The latter two exceptions to  the nonparty
rule might conceivably apply.  The first of  these latter
exceptions would extend preclusion to those  persons that had
an opportunity to participate  in the litigation, that did
not do so, that did not inform the actual parties that they
night raise the issue  in  the future, and thus lead the parties
to believe chat they were not  interested in  the litigation.
This exception ia primarily espoused in the vorks of commen-
tators and is really a form of equitable estoppel.  See.
e.g.. 18 Wright & Miller  SI 4432 and 4453; and Restatement
(Second)  of Judgments  S 62 (1981).  But the  rules for applying
equitable estoppel against the United States  are unique,  le
is by no scans clear that the  United States  can be estopped
under any circumstances.  Some Circuit Courts of Appeal have

-------
                            - 53 •

traced that estoppel cannot lie against Che federal povern-
mcnc.  Hicks v. Harris. 606 F.2d 65, 68 (5ch Cir. 1979).
Other Circuit! have allowed the United States to be estopped
under certain liaited circumstances, i.e.. where there has
been a misrepresentation that rises to the level of "affinaativ*
misconduct."  Community Health Services of Crawford County.
Inc.. v. Califane. 698 F.wd 615, 620-21 (3rd Cir. 1983);
Mendoza-Hemandet v. INS. 664 F.2d 635, 639 (7th Cir.  1981).
These decisions allowing estoppel may not be in keeping with
the Supreme Court's latest pronouncement on the issue,
Schweiker v. Hansen. 450 U.S. 785, 788-91  (1981).  But even
if these decisions still are valid, getting a ease dismissed
because a court has no jurisdiction and later raising the
saae issue in a court of competent jurisdiction does not
seem to be "affirmative misconduct" — at least where  there
are no representations accompanying the dismissal of the
first case that the issue will not be raised later.
     Even if this exception could be refuted successfully,
it may be a better idea simply to moot it, since the United
States could do so with a minimum of effort.  All that would
have to be done is to notify the parties after the United
States is dismissed that it will not consider itself bound
by any determinations in the case.
     The second potentially applicable exception to the
nonparty rule holds that where there is some legal relationship
between the nonparty and a party, such as where one i^a
predecessor in interest to the same claim or property,  the

-------
                             -  54  -

nonparty can bt bound  in later tuics.  An  insurance company
would seem to have a basis for tscopping the  United Scares
froa retrying the insurance  coopany's liability under its
contract on this basis only  if the United States actually
has taken an assignment of the assured1s claia againsc the
carrier and has no independent rights of action.
     The preclusive effect on  a nonparty judgment creditor
of a finding of no coverage  in a suit between the insurance
company and its insured was  addressed-in Hocken v. Allstate
Insurance Co.. 147 S.W.2d 182  (Mo Ct. App. 1941).  Hocken
filed suit against the insured for personal injuries suffered
as a result of a car accident  and recovered a judgment for
$2,500.  While Hocken's suit was pending, the insurance
company filed suit against the insured and Hocken seeking a
declaration that the policy  was void due to fraudulent
misrepresentations by  the insured in the procurement of the
policy.  For undisclosed reasons, the insurance company
dismissed Hocken as a  party  and judgment was rendered against
the insured prior to the entry of a judgment for $2,500 in
Hocken's favor in ehe  underlying personal injury suit.
     Hocken later brought a  garnishment proceeding against
the insurance company  to recover the $2.500 Judgment.
In its defense, the insurer  contended that the declaratory
judgment against the insured was not subject to collateral
attack but was binding on Hocken because she was in privity
with the insured, having derived her rights against the
insurance company solely through  the  insured,  the trial

-------
                            - 55 -

rtvtrscd and remanded chc ease for a ntw trial on the issue
of coverage.
     The crux of the appellate court's decision was its
holding that, contrary to thfe insurance company's assertion,
the injured party was not a privy to the suit between the
insurance company and the insured.   It reasoned that Hocken was
not privy because she acquired whatever rights she possessed
under the policy prior to the institution of the declaratory
judgment action. 147 S.W.2d at 186.  "After those rights
cane into existence the insured could not by any act, or by
the submission to the rendition of judgment against him,
lessen the interest vested in [the injured party]." Id.
     Hocken's rights were acquired before the institution
of the declaratory judgment action because under Missouri law
the injured party acquires its rights to the insurance coverage
at the time of the accident or the occurrence- of the injury.
"It is true that those rights were originally derived through
the insured, but by operation of law they are fixed and
independent of any control by the insured, so that as to all acts
             •
aad relations subsequent to the accident, which gave rise to
plaintiff's rights, they were not in privity." Jtd. at 188.
See also Mathison v. Public Work Supply District. 401 S.W.
2d 424, 431 (Mo. 1966) ("to make one "privy" to an action he
oust have acquired his interest in the subject'of'the action
subsequent to the commencement of the suit or rendition of
judgaent").

-------
                             -  56  -

     The right* of che United  States  Against  an  insurer
in an environmental case, under this  analysis, would be
acquired at the tiae of che  accident  or occurrence giving
rise to liability.
     Courts in other sti.    re in accord with the logic
and holding in Hocken.  In United Farm Bureau Mutual
Insurance Co. v* Uaapler. 406 N.E.2d  1195 (Ind. Ct. App.
1980), an injured party sought eo execute a judgment against
the insured by proceeding against the insurer.  The insurance
company asserted that a previous judgment against the insured
on che issue of coverage was res Judicata as  to the injured
party.  The court held chac  che injured party was not in
privity vieh che insurer or  Che insured and noc bound by the
outcome of che declaratory judgmenc.  Id. ac 1197.  The
court relied on 7 Aai.Jur. 2d, Aucomobile Insurance IS(1963):
             A judgmenc determining, as between
             an automobile liability  insurer and che
             insured or a person claiming eo be in-
             sured, a quescion of coverage in favor of
             che insurer does noc, as a matter of res
             judicaca, preclude che injured person
             from licigacing the quescion of coverage
             in a subsequenc accion or proceeding in-
             scicucad by him against che insurer, since
             ehe injured parson ia noc in privity vich
             any of che parcias in che former proceeding.
     In Cladon v. Searle. 412 P.2d 116 (Wash. 1966),
while a suit by an injured party against che insured was
pending, che insurance company commenced.an aecion against
che insured for a declaratory judgmenc as co coverage.   The
company did noc nocify or attempt co join che injured party,
and a default judgment was entered in favor of the insurer

-------
                             -  57  -

after chc  iniurtd filled  to  answer  the  suit.  The  injured
party subsequently recovered a default  judgment  against  che
injured and  filed a garnishment action  against che insurance
company.   Judgment was entered  against  the insurer, which
appealed.  The court held that  "third party claimants in an
action of  this nature are not  bound by  a declaratory judgment
in which they were not made  a party."  ^d at 118.
     The insurance coapany in Sobina v. Busby. 210 K.E.
769 (111.  App. Ct. 1965), sought  to us* a judgment from a
suit between the insurance company and  the insured as a
defence in an action by the  injured parties against the company
to recover on a Judpnent entered  against the insured.  Ci'ting
Hocken, supra the court observed. "There is ample authority
holding that the plaintiffs  in  the underlying tort action
are not in privity with the  insured, that the insurance
policy is  one against liability and not against loss, that
the plaintiffs' rights accrued  at the tiae of the accident
and were not cut off in a later decree entered in proceedings
to which the plaintiff* w«re not parties." JCd. at 772-73.
     Southern Fara Bureau Casualty Insurance Co.  v.
Robinson.  365 S.W.2d 454. 456  (Ark. 1963). addressed the
following  question-.
            Can a default declaratory judgment
            between an insurer  and an insured,
            instituted while suit is pending in
            a foreign jurisdiction between the
            injured and an injured per»on, which
            »uit the insurer i« defending, destroy
            the right* of the  injured person who was
            not a party of the'declaratory judgment
            proceedings?

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                             -  58  -

The court  said  "No,"  and  explained  chat  the  rights  of  the
injured  party arose at  the  tine of  the injury  and are
antagonistic to the rights  of  both  the insurer and  the insured.
Id. at 457; see also  46 C.J.S. Insurance 11191, p.  123 ("The
rights of  the injured person who may maintain  an action
against  insurer are to be determined as of the time of the
accident out of which the cause of  action grew . .  . .)" and
Shapiro v.  Republic  Indeminity Co.. 341  P.2d  289 (Cal.
1959).   In Shapiro, the injured parties recovered a judgment
against  the insured and then brought an action against the
insurer on a public liability  insurance policy that covered
the insured.  The  insurer argued  that its liability must be
determined according  to the policy  as it was reformed in a
postaccident action between the insurer and the insured.
The court held  that,  as third-party beneficiaries of the
insurance policy,  the injured  parties had an interest that
could not be altered  or conditioned by the independent action
of the insurer  and the insured in reforming the policy.  Id.
at 291; accord  Boulter v. Commercial Standard  Insurance Co..
175 F.20 763. 766  (9th Cir. 1949)(applying California law).
     The Hew Jersey Supreme Court has also rejected the
argument that,  because -the  injured  person stands in the shoes
of the insured,  a judgment  in  a suit between the insured and
the insurer is  conclusive against the injured  party.
Dransfield v. Citizens Casualty Co.. 74 A.2d 304, 306
(N.J. 1950).  The  court in  Dransfield reasoned that the

-------
                             - 59 -

Injurtd ptrson has a cause of action cht moment he or the
ii injured and is noc in privity with the insured.  Virginia
likewise ha* held ehac, even chough a judgment creditor stands
in the insured'a shoes, the  injured party is not barred by a
plea of ret judieata.  S torn v. Nationwide Insurance Co..  97
S.E.2d 759 (Va. 1957).  "The insured and the Company may
noc litigate and have [the injured party's]  rights against
cbe Coapany, which had their inception at the tine of her
injury, determined in an action to which she is not a party."
97 S.E.2d at 764. See also Bailey v. United States Fidelity
and Guaranty Co.. 103 S.E.2d 638, 641  (S.C.  1937)  (injured
party would not be privy, and therefore noc bound by judgment
in a suit* to which he was not a party, where her rights vert
acquired at time of injury and prior co the rendition of the
judgment).
     The commentators agree with this line of eases.  Couch
states, "A judgment dettrming as between an automobile liabilit;
insurer and the insured or a person claiming to be insured)
a question of coverage in favor of che insurer does noc, as
a natter of res judicaca, preclude Che injured person from
litigating the question of coverage in a subsequent action
or proceeding instituted by him against the insurer, since
the injured person is not in privity with any of the parties
in the foraer .proceeding."  Couch, Cyclopedia of Insurance
lav. 545:945 (2nd ed.).  Likewise, Appleman notes that "an
injured person c*n neither be bound by a judgment in favor
of the insured in a suit brought by another claimant, nor by

-------
                            - 60 -

« judgment in favor of the insurer,  in an action brought
upon the policy by the insured."  Appleman, 511521; sec also
69 ALR2d 858, 859.
     One Ohio case that is inconsistent with all of these
other cases.  In Conoid v. Stern. 35 N.E.2d 133 (Ohio 19*1) ,
an injured party recovered a judgment against the insured
for personal injuries sustained in an automobile collision.
The Judgment creditor then brought an action against the
insurer to recover the amount of the Judgment.  The insured
company averred as a defense a judgment in an action between
the ins-urer and a different party also injured in the same
collision in which the court held the policy null and void
due to the insured's failure to cooperate.  The court held
that a judgment in favor of the insurer in an action by
an injured party on the question of noncooperation was res
judieata in favor of the -insurer in a later action by another
person injured in the .same accident.  Id. at 140-41.  The
court reasoned that the right of the insured against the
insurer was fully litigated in the suit by the first injured
party and the declaratory judgment against the insured is a
bar against another injured party whose right, if any, against
the insurance company is derived from and dependent upon a
valid right of the insured against the insurance company.
     The decision in Conoid nowhere mentions the issue of
privity or when the rights of the injured party arise, but
                  •
focuses solely on the rights of a judgment creditor being
derivative of the rights of the insured.  Also, the case

-------
                             -  61  -

involves an action by an  injured  party where  judgment has
been entered  in favor of  the insurer  in  a  sinliar  action by
another person injured in the  sane accident.  Most importantly,
although the aore recent case  of  Celina  Mutual Insurance Co.
v. Sadler. 217 N.E.2d 255 (Ohio Ct. App. 1966), suggests
that, the holding in Conoid is  still the  lav in Ohio, Conoid
has not been  followed by the courts of any other state.
Accordingly, although Conoid should caution the United States
against remaining a nonparty co an action in  Ohio  between an
insured another party injured  by  the  insured, it should not
affect the decisions of the United States in  other states.
     Yet another exception to  the estoppel rule may be
applicable to our cases.  When collateral estoppel vould
violate general notions of public policy, or  would work an
injustice, it is not to be applied.   Specifically, where the
government is involved in a case  designed to  protect the
public, it should not be estopped by  previous cases to which
it was not a party.  Porter &  Dietsch. Inc..  v. FTC. 605
F.2d 294. 299-300 (7th Clr. 1979); Defenders  of Wildlife v.
Andrus. 77 FRD 448. 454 (D.D.C. 1978); Restatement (Second)
of Judgments  I 28 (1981); and  18 Wright & Miller I 4426.
Hazardous waste cases appear particularly apposite for applying
this principle.  The United States is attempting to fund the
containment and removal of very serious  threats to health
and the environment.  It  should not be hampered in these
efforts by estoppel arising out of litigation.  Moreover,
the line of cases discussed  in the context of whether the

-------
                            - 62 -

United States could be considered AS having a relacionship
with some party, and thus be bound by his failure in litiga-
tion, is buttressed by the unique public responsibilities of
the government.
     Finally, although it is doubtful that the United States
will want to intervene in declaratory judgment actions between
liable parties and their insurers,  it is not at all clear
that che court would allow such intervention in the absence
of a preexisting judgment and an independent direct action
claia.  See Independent Petrochemical Corp.. v. Aetna Casualty
and Surety Co.. Civ. No. 83-3347.  (S.D. Ohio, March 8, 1985X
22 ERG 1523. IX Chen, and Rad. Waste Lit. Rptr. 911  (included
in the Compendium), denying Rule 24(a)(2) intervention to
individuals asserting unresolved personal injury claims against
the bankrupt IPC; but cf. Re-Solve v. Canadian Universal
Ins. Co.. (Mass. Super Ct., CA Ho.  14767. May 14, 1984),
discussed at IX Chem. & Rad. Waste Lit. Rptr. 822 (allowing
the Commonwealth of Massachusetts to intervene In an action
between a polluter and its insurer).

-------
y ^J>
      i         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

      *                     WASHINGTON DC 20460                OSWER * 9850.C
                             »•-., - -                         ="
                             '•v» .i ~  CC-            Swb'
                                                             ; 5 VI »Sf
    SUBJECT:  Enda nee raer.t Asse^ssjnent  Guidance
    FROM:     J. Winston Porter
              Assistant Administrator

    TC:       Addressees


    ?'JR?CS£

         This r.er.crar.d-r. clarifies  the  requirement  that  an
    endangermer.t assessment be developed  to  support all  administra-
    tive and jud.icial enforcement actions  under  Section  106  of  the
    Cotr.?reher.sive Environnental Response,  Compensation,  and  Liability
    Act (CERCLA) and Section 7003 of the  Resource Conservation  and
    Recovery Act (RCRA).  Before taking enforcement action under
    these provisions to abate the hazards  or potential hazards  at a
    site, the Environmental Protection  Agency (EPA) must be  able  tt
    properly docu.r.ent and justify its assertion  that an  irur.inent  ar.i
    substantial endangerrr-ent to p-.olic  health or welfare or  the
    .e-nvironinent ray exist.  The endangerraent assessment  provides  t.^:s
    documentation and justification.  The  endangernent assessment is
    not necessary- to support Section 104  actions.

         This memorandum alto provides  guidance  on  the content,
    timing, level of detail* format, and  resources  required  for the
    preparation of endang«rm«nt assessments.

    WHAT IS AN ENDASGERMENT ASSESSMENT

         An •ndangerment assessment is  a  determination of the
    magnitude and probability of actual or potential ham to public
    health or welfare or th« environment  by  the  threatened or actual
    release of a hazardous substance  (for a  CERCLA  action} or a
    hazardous waste (for a RCRA action).

         Ah endangerrr.ent assessment evaluates the collective
    demographic, geographic, physical,  chemical, and biological
    factors which describe the extent of  the impacts of  a potential
    or actual release of a hazardous substance and/or hazardous
    waste.

-------
                                                                  ?=--.
      lr. general,  the  endangeimer.t  assessment  should identify and
characterize:

      ;av  Hazardous  sjrsta-.ces  and 'or  hazardous wastes prese-.t
          in  all  relevant  environmental  media  (e.g.,  air,  water,
          soil; sediment,  biota);

      (b)  Environmental  fate  and transport  mechanisms within
          specified  environmental  media,  such  as physical,  chemical
          and  biological degradation processes  and  hydrogeoiogxcal
          evaluations  and  assessments;

      (c)  Intrinsic  toxicolocical  properties or hunan health
          standards  and  criteria of specified hazardous  substa-.res
          or  hazardous wastes;

      (d)  Exposure pathways and extent of expected  or potential
          expos-re ;

      ;e)  Populations  at risk;  and,

      (f)  Exte-.t  of  expected  harm  and  the  likelihood  of  such harm
          occurring  (i.e., risk characterization).

WHY PERFORM AN ESSANGERy.EXT ASSESSMENT

     Under Section 106(a^  of  CERCLA, if  the President determines
that there ray be an  imminent and  substantial endangerment  to
public healtn or welfare or the environment from an actual  or
threatened release of  a hazardous  substance, the President  may
secure such relief as  r.ay  be  necessary to  abate such  danger or
threat.  Such relief  may be in  the form  of  a judicial action cr
a.i administrative order  to compel  responsible parties to respc.-.c
to hazardous conditions.

     Before an order  can be issued or  an  action filed under §106
of CERCLA, EPA must be able to  document  and justify its assertion
that an irnr.inent and  substantial endangerment to public health
or welfare or the environment may  exist.  The endangerment  assess-
ment provides this documentation and justification.  It  is  tne
basis for the findings of  fact  in  administrative orders, consent
decrees, and complaints.

     In situations dealing with hazardous wastes or solid wastes
under RCRA, rather than hazardous  substances under  CERCLA,  Section
7003 of RCRA may be  used as the au-.vrity under which EPA may
issue orders or file  civil acti-r-        Section 7003  of RCRA
requires a similar -finding of i.-~    - and  substantial endanger-
ment and, therefore,  EPA must a^-i. Document and justify such an
assertion with an endangerment  assessment before taking enforce-
ment action.


I/ "Final Revised. Guidance Memorandum  on. the Use and  Issuance cf
Administrative Orders  'Jnder Section 7003  of the Resource Conserva-
tion and Recovery Act",  September  26,  1984  signed by  Courtney Price
and Lee Thomas.

-------
                                                                •:..- c 3Ci .
     It is important to note that  "imminent" does not mean  immediate
harm.  Rather, it means an  impending risk of harm.  Sufficient  ~—i~
justification for a determination  cf an  imminent endangerment -ay
exist if harm is threatened; no actual  injury need have occurred"
cr De occurring.' Similarly, "endangerment" means something less
than actual h a rm.


WHEN TO PERFORM AN ENDANGERMEST ASSESSMENT

     At remedial sites subsequently targeted for CERCLA $106 or
RCRA $70C3 enforcement action, all of the elements of an endanger-
ment assessment will be provided by completing the contamination
assessment, public health evaluation, and environmental assessment
during the RI/FS process.   As such, these assessments are equivalent
to the endangerment assessment for enforcement sites.  The  informa-
tion from the contamination assessment, public health evaluation,
and environmental assessment will  be considered sufficient  to
issue an order although additional work may be needed prior to
litigation (See Attachment  1 and the RI/FS guidance documents
referenced on Page 6 rf this guidance).

     Where an RI/FS has net been initiated or completed, as
endangerment assessment must be prepared to justify an adminis-
trative order or judicial action under CERCLA $106 or RCRA  §"003.
For example, orders issued  to govern responsible party conduct of
an RI/FS or to compel responsible  party performance of immediate
response actions will, require an endangerment assessment prior to
issuance.   In both cases, the endangerment assessments will demon-
strate that there may .be an imminent and substantial endangerment
w-.ich justifies either further- inves tigative action to determine
the appropriate remedy for  a site  or an immediate response  action.

     In isolated cases, EPA has negotiated with potentially
responsible parties for the site remedy before it has developed
tr.e RI/FS.  In these few cases, an endange;rment assessment must oe
developed independently of  the RI/FS and completed prior to issuance
of the order or decree for  remedial action.

     An enrfangerment assessment is required for all future  RCRA
§70C3 actions, as well as older RCRA $7003 cases to which CERCLA
$106 authority has been or  will be added. An endangerment assess-
ment is not required for older RCRA $7003 cases already filed by
tae Department of Justice without  an endangerment assessment.  The
litigation team, however, may determine on a case-by-case basis
that the preparation of an  endangerment assessment or its equivalent
would substantially strengthen the government's case.

     Endangerment assessments must be prepared for all RCRA S'OOS
cr CERCLA $106 orders issued to another Federal agency for  cleanup
of a Federally-owned facility.  Normally, EPA will seek response
action at a Federal facility through a  site-specific compliance
agreement with the appropriate Federal  agency or other responsible
sarties.  If, however, a compliance agreement is not complied with
by Federal owners or responsible parties, EPA may issue an  order.

-------
                                -4-

WKAT LE'.TI.    :ET».:I
     The  determination  that  an  imminent  and  substantial  endan.ger-
                                                                 a
-ent to punlic health or welfare or the environment ray exist'is
 iesal prerequisite  tr.at  rust  be  -e t  Before  an  order  can  be  iss.ei
 cr'a.n action  filed.   It  is  EPA policy  that  endangerment  assessre-ts
 should  be undertake-  only  to  the extent  "necessary and sufficient"
 co  fulfill  the  rec j: rer.ents of  legal enforcement  proceedings.  At
 ary  site, there  is  the potential for conducting studies  seyond the
 level of detail  needed for  enforcerent actions.   The  level'of
 detail  of the endangerment  assessment  should be limited  to  the
 amount  of information needed  to  sufficiently demonstrate  an actual
 or  potential  imminent and  substantial  endangerment.   The  level of
 detail  to sjfficiently demonstrate endangernent will  vary from case
 to  case based or.  the  following factors:

     0  the  type  of  e-.forcer.ent action  (e.g., AO for  removal
        vs li tigation);

     6  t.-e  type  of  resoor.se action  (e.g., removal vs  remedial);
        and

     0  the  staze  of respc-.se  action  'e.g.,  RI/FS  workclar. vs


     The level of detail required to support a particular enforce-
ment action will  ultimately be determined on a case-by-case
basis by Recional program  personnel  in consultation  with  Regional
Counsel.  As a general guide, the matrix on page  5 defines  these
levels of detail  rased on  the factors  listed above.   The  matrix
should help the Recions  to  bc.tn  (1) determine  what constitutes an
adecuate er.dar.gerrent assessment for a particular enforcement
action,  and '2) plan  their  intramural  and extramural  resources
accordingly.

     When endangerment assessments are developed  to  support
administrative orders for  private party RI/FS  or  removal  actions,
information already available about the site will qenerally be
sufficient.   Where  sites are  targeted  for enforcement action
after completion  of an RI/FS, the endangerment assessments
developed as part of  the RI/FS will be more detailed  and  severally
more quantitative as  they  will bt based on  information obtained
from the remedial investigation.  Such cndanaerment  assessments
will be used to support  any subseauent CERCLA  $106 orders or
judicial actions  seeding design  and construction  of  site  remedies.

     The information  gathered in an RI/FS is generally similar
to the type of information  needed for  an endanoerment assessment.
However, RI/FS and  endangerment  assessments are developed for
different purposes.   RI/FS  are used to determine  aopropriate
response actions  under CERCLA $104, while endangerment assessments
are used for enforcement actions under CERCLA  $106 or RCRA  $"OC3,
For sites with CERCLA 5106  or RCRA 5*7003 enforcement' potential,
Regions should review the  RI/FS  workplan to determine whether
information develcced as part of the RI/FS  will be sufficient
for an endancermer.t assessment.   In certain complex  cases.
additional  ir.f crraticr. ray  be needed and a  separate  endangerr.ent
assessment wcr*?lar. may  be  recuired.

-------
                                       i .HI 11.1.1 ui.: •  11 it' I j.vi.i. •
»'it»l>lexity

lrivale  parly
  RI/FS, prelimi-
  nary  sctpinq
                                    'type o^A.'-.r.rr;'-.!!
Issuance  of AO
or consent  clecree
for (wivate party
c leatwp
Litigation
(aite-ty-sile
basis)
Hay l«  limited, probably
consist Inq of information
from  the  Preliminary Rite
Assessment, Site  Inspection
Report, and Hazard  Ranking
System evaluation,  if completed.
Ho health studies available;
no demographic studies avail-
able.  Preliminary  sampling
data  will prnltably  tie available
on pollutant*; present.   Itota on
extent of release or concentra-
tions of  materials  at the point
of exposure may he  available.
Remedial  Investigation complete
or other'quantitative  data
availal>le  on nature/extent of
release.   Ihta may bn  nvail.il>to
tjn nwtjnltude and demxiraphics
of pipulation at risk.
rvx>sihly sojne preliminary
liealth effects studies.
!!ources and specific
materials  associated with
release are Silent,if ied.

IM and FS  omph'to.  All
required ujr»i>lfv|ica1, hydro-
(leolrigicai, and lK>allli
studios cojn|»l«.«te.
   Uh>te:
   Klie nwitr ix is flexible  ami n»iy shift on a  ra-»—by-i-a!»-
   lvtrt  .1 |i>ii t irular  enlori-iiwiit
   .H.-1 ion.
     it.il ivo assi
of ex|*isiire re a lies, f»pii-
lation  ib i I i I y of h.irm riMfc>nt  lo
          Huit  .in PK|»«sur<'
n»»y exir.l  IxMMii.-a* of  lite
re 1 1 MSI? .
!V^ni-quant i t at i\nr appraisal
consider iiw| r.|«>cific exp»sure
routes and critical pollu-
tants.  Hie asr,ef5swent  should
be able to identify any data
fjnpr, are!  reoiwrnd aiklitional
stuilies,  if
(^•tailed,  quantitative
        to id«Mitify |r>tential
        elfe«-t;;, critical
oxpr >r,r;t of
oxio't I i'ic .HK| kfKiwl nfKj /in
          i>l  tin- mirci l.iint y.
For  ntiiov.il a* -I ions
where  ||N» nrinrttl si
rankiriri  |>r«x-«v;s har
not  l» yen completed
or INK Inr I aki»n,  in-
formal ion for tl««
.isser.sjnent iiviy  lie
availaltle Inn  nt:ord
searclies, iitato S|THI-
sored  invest itjat ious,
written  rejxuts firm
insfiecl ion«; liy
»|ov*>t itrw»nt autlnri-
l ies,  ai»l m>tifica-
tion in  accor«lanc»?
with CKW1A SI01.

Tli is assessment must.
\n alile  to support
leqal  act ion in tin-
e-vent  that it  is
dial lenc)i?d by a
rrxralcitrant IW.
Should br> contrlu*; i ..•
enou(|h that IVIT, wi | I
In? encouraefctl to II..K<-
a  firm omni Imenl  to
action,  Uit not
ncjcessar i I y 
-------
      The  endangerment  assessment  should evaluate the adecuacy,
 accuracy,  precision,  comprehensiveness, reliability, and'overall
 quality of  identified  information and  data.

      Emergency-act ions  do  not  require  the  same  depth cf assess-
 ment  as planned  or  remedial  activities.  By  definition, an
 immediate  and  significant  ris* cf -»rm. to  human  life or health
 or  tne environment  will be prese--  .n  an emergency,  making
 the assessment  of endangerment . easier  to prepare.   Further,
 EPA is yustffying only  the need for  immediate action,  not the
 long-term  remedial  solution.   Thus,  the endangerment assessment
 may be much  briefer,  although  the Regions  s>nouid attempt  to
 use as r.ucn  available  information as feasible.   The  Action
 Memorandum supporting  the  emergency  action will  normally  be
 considered adequate  to  serve as an endangerment  assessment in
 support of an enforcement  action  under $106  of CERCLA  for an
 immediate  response.

      Attachment  2 is  an aostract  of  a  detailed paper :n "Endan-
 germent Assessments  for Superfund Enforcement Actions', prepared
 by Technical i-ppcrt 5ran.cn, CERCLA  Enforcement  Division, the
 Office cf waste  Programs Enforcement (OWPE).  This paper,
 previously distributed  to  the  Regions,  will  provide  technical
 assistance in preparing qualitative  and quantitative assessments.-
 OWPE  is also preparing  a handbook on preparation of  endangerment
 assessments.

     Methodologies  used for performance cf such  aspects cf the
endangerment assessment as exposure  and risk assessment should
be consistent witn.  the  concepts and  methods  currently  in  use ov
    "?- -ffice cf Research and Development (ORD).
     Attachment 3 shows how  t.-.e various  toxicity, exposure, ani
ns* evaluations are used to define the  overall" problems and
hazards  'endange'rm.ent) at a  site.  Although tne use.of these
evaluations is possible at every site, the need for a detailed
analysis, as outlined, is likely to be appropriate at only a
limited  nurser of sites to sufficiently  demonstrate an actual
or potential imminent and substantial endangerm.ent.

     The Office of Emergency and Remedial Response (CERR) has
developed guidance manuals covering the  performance of remedial
investigations and feasibility studies.  The chapters listed
below from these documents and the OWPE  handbook will provide
guidance in preparing endangerment assessments:

Guidance on Remedial Investi^-. • ~"« Under CSP.C1A (OERR, May 15H 5

     Chapter 7 - Site Characterization
     Chapter 9 - Remedial Investigation  Report Format

Guidance on Feasibility Studies Under CERCLA (OERR, April 1955)

     Chapter 5 -'Evaluate Protection of  Public Health Requirements

Ha-.db:o< on Preparation cf indangerment  Assessments (OWPE -
     Technical Support Branch, Vunmer 1985)

-------
      Attachr.er.t  4  : s  a  list  cf  references  that  car. be used in
 preparation  cf  the  er.za.-.re rr.er.t assessment.


 FORMAT
     The  enda-cer-'ent  assessment  generally  should follow a
standard  framewor*  as  provided  in Attachment  5  and use  qualitative
and/or quantitative  terms  as  appropriate.

     The  Action  Memorandum will normally  be considered  adequate
to  serve  as  tne  endangerment  assessment document  in support  cf a-.
order under  §106 for an  emergency action.

     The  endangerment  assessment  document may be  the order  itself
(where the order contains  all of  the  elements of  an endangermer.t
assessment)  cr a separate  document.   In deciding  whether to
develop a separate  document or  to include the elements  of the
enda.-.gerr.ent sssess-e-t  ;- the  crder,  Regions should consider  the
following factors:

     1.   Are the respo-.s :ble  parties  more likely  to consent  to
an order  if  the  endar.gernent  assessment is  part of the  body  of
the order, or a  separate document?

     2.    Is  the  order  likely  to be issued unilaterally  or on
consent?  A  separate document will, of course/  be more  important
                     •9s
     '•.'e strong ly urge  that  the  endangermer.t  assessment  in  support
cf an administrative order  for  private  party cleanup  be  a  separate
document.  Where all cf  the  elements  cf  an endangerment  assessment
are in the RI/FS documents,  a separate  document  may consist  simply
cf a brief statement cross-referencing -the appropriate elements
of the RI/FS.


WHO 5HCEI.3 PERFORM AN  ENPANGERMES'T ASSESSMENT

     The Regions have  th* responsibility to  assure  that  endanc/er-
ment *«»«»«m«nts are performed.   Th«  Regions can draw on technical
exp«rti»« available in their Regional offices, OWPE - Technical
Support Branch, ORD, the Agency for Toxic Substances  and Disease
Regiatry (»ee  MOU between ATSOR and EPA), and/or contractor
personnel available through  the Technical Enforcement Support
(TES) or REM/FIT -and TAT contracts.

     Endangerment assessments used to justify administrative
orders or judicial actions  issued or  filed before development
of the RI/FS should normally be drafted  by Regional personnel
with the assistance cf tne  TES  contractor.   The  Regions  and  T£3
contractor also have the lead in preparation of  endangerment
assessments  for elder  cases  where an  RI/FS has not been  complete!.

-------
                                -8-

      If responsible  parties  elect  to  perform  the  RI/FS,  they will,
 in effect, perform  an  endangerment  assessment because  they  will
 develop many or  all  of  the elements of  an  endangerment  assessr.er.t
 as part of the RI/FS.   Regions  should review  the  RI/FS  wcr^plan to
 determine whether  information developed  as  part of  the  RI/FS will
 be sufficient to snow  that an imminent  and  substantial  endangerme-.t
 -ay exist.  Because  subsequent  enforcement  actions  will  rely or.
 the endancer^er.t assessment  developed as part of  the RI/FS, close
 Regional oversight  should be given  to this  responsible  party worn.

      The authority  for  determinations of imminent and substantial
 endangerrr.ent relating  to emergency  response actions costing up to
 one million dollars  has been delegated  to  the Regions,  subject to
 the directives issued  by the Office of  Solid  Waste  and  Emergency
 Response.  (See  Delegation 14-1-A,  Selection  and  Performance of
 Removal Actions  Costing L'p to 51,000,000 and  the  Memorandum.
 "Waiver cf Advance Concurrence  Requirements for Certain  Consent
 Administrative Orders,  Gene  A.  Lucero,  January 3, 1985).

      When exercisir.c tr.e authority  to determine that an  imminent
 and substantial  endangerment exists for  the purposes of  taking
 enforcement action,  the Region  must consult with  OWPE as.outlined
 in the November  30,  1984 Regional Assignment  Memo (also  see the-
Memorandum "Superfund  Delegations of  Authority -  ACTION  MEMORAHDUM',
 Howard Messner,  April  4, 1984).  In contacting OWPE, Regional
 staff should be  prepared to  discuss the  details of  the  endangerment
assessment for each determination.  In  certain cases involving
complex health and environmental endangerment issues, OWPE may
 request a copy cf the  draft  endangerment assessment for  review.
OW?E  will complete a review  of  this- document  within 14  days of
receipt, to ensure consistent,  timely response.


'JSE CF THIS Gl'ISASCS

      The policy  and procedures  set  forth here, and  internal
office procedures adopted in conjunction with this  document,
are intended for the guidance of staff  personnel, attorneys,
and other employees of  the U.S. Environmental Protection Agency.
They  do not constitute  rulemaking by  the Agency,  and may not be
relied upon to create  a right or benefit,  substantive or
procedural, enforceable at law  or  in  equity,  by any person.
The Agency may take any action  at variance  with the policies or
procedures contained in this memorandum  or  which  are not in
 compliance with  internal office procedures  that nay be  adopted
 pursuant to those materials.

      If you have any questions  or  concerns  regarding this suida-.ce,
 please have your staff  contact  Chuck  Morgan (FTS-475-6690), Chie:.
 of the Environmental Health  Sciences  Section  of OWPE or  Linda
 Southerlani (FTS-382-2035) of the Guidance  and Oversight Srancn.

-------
                                                            OS"..1!? * 9251

                               -9-
•sdiressees:
Regional Administrators, Regic-.s I-X
Directors, Environmental Services Division, Regions I-X
Regional Counsels, Regions I-X
Directors, Waste Yanage.-.enr; Divisions, Regions I, IV, V,
   vn, vi i:
Director, Emergency and Remedial Response Division,
   Region II
Director, Hazardous Waste Management Division, Region III
Directors, Air & Waste Management Divisions, Regions II, VI
Director, Toxics 6 Waste Management Division, Region IX
Director, Hazardous Waste Division, Region X

-------
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-------
          UNIT  ^* XTES ENVIRONMENTAL PROTECTION AGENCY
                      WA.HINUTON.D.C. ;04»0              OSWER # 9829.0

                           DEC 2 3 1995
                                                       O*'ICf O«
                                              • OLIO WASTC AND f MtHGINC-r M|B»O*l8C
MEMORANDUM

SUBJECT:  Policy for Enforcement Actions  Against  Transporters
          Under CERCLA
                      4,
FROM:     Gene A. Lucero, Director
          Office of Waste Programs  Enforcement

          Frederick
          Associate
n»»ww «-*wy*.«'ii» bii*. w£ wvmwrib.    m

T. Sti.hl ^4^t+*^^J/&Ztf£>
Enforcement Counsel for Waste
TO:       Regional Counsels
          Regional Waste Management  Division  Directors


Background

     Section 107(a)(4) of  CERCLA  imposes  liability for  response
costs on:

     •any person who accepts  or accepted  any  hazardous  substances
     for transport to disposal or treatment  facilities  or sites
     •elected by such person, from which  there  is  a release,  or
     a threatened release  which causes  the  incurrence of response
     costs, of a hazardous substance...*

     Substantial controversy  has  arisen over  the interpretation-of
this provision particularly as it relates to  interstate common or
contract carriers.  The Agency's  practice has previously been to
issue notice letters to all transporters.   In some circumstances,
civil judicial enforcement actions have named transporters as
defendants prior to a determination  of  whether  they selected  the
facility.  More recently,  the Agency practice has  been  to bring
suit only against those transporters who  have selected  the facility
or sit*.

-------
                               -2-
     Transporters involved at many Superfund sites havt  argued
that CERCLA was intended to  impart liability only when the
transporters selected the facility or site  to which  the  hazardous
substances were delivered.   Consequently, those transporters
contend that interstate common or contract  carriers, who under
the authority of the Interstate Commerce Commission  do not exercise
control of the destination of shipments, are excluded from the
liability provision of $107(a)(4).  No judicial opinion  has been
rendered to date on the interpretation of this provision.
     As part of the responsible party searches, Regional staff
should gather and review all available information related to
transporters and the nature of their involve/sent with the facilty
or site at which the hazardous substances are located.  This
review should include all of the common sources of information
such as site records and records from federal, state and local
regulatory agencies.  Zn addition, information related to the
transporters should be obtained through $104(e) information
request letters to the owner/operators, generators and to the
transporters.  Information request letters, and any subsequent
interviews, should seek documentation as to the source, volume,
nature and location of wastes transported.  Regional staff should
also seek to identify through this process the role of the
transporter in the selection of the facility or site.

     Notice letters informing transporters of potential liability
under CERCLA will not be issued unless and until the information
gathering process indicates that the transporter may have selected
the site or facility to which the hazardous substance* were
delivered. (However, as indicated above, information request
letters should be routinely sent to all transporters.)  Issuance
of notice letters to transporters is appropriate only when
information obtained indicates that the transporter may have
•elected the site or facility.

     Similarly, enforcement actions (whether administrative or
judicial) would be brought under $106 or $107 only under the same
circumstance-s. . As a matter of policy, EPA will bring action only
•gainst transporters where information is available which indicates
that the transporter ••elected the site or facility.  However, in
the event that information is inconclusive due to a lack of
cooperation from transporters in providing information, EPA may
bring action against any transporter to compel full response to
information requests.

-------
                                                          OSWER * 9831.2
           UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON. D.C. 204CO


                          MAR  i 4 IS66
                                              SOLID «A5TE AND EMERGENCY MES'ONSE
MEMORANDUM

SUBJECT:  Reporting  and  Exchanoe of  Information on State  Enforcement
          Actions  at National  Priorities  List  Sites
FROM:     J^ Winst'o'n' Sorter
          Assistant Administrator

TO:       Addressees

     Recent developments  in  the  Suoerfund  enforcement  program
prompt me to personally address  the  issue  of  reporting  and  exchange
of information on State enforcement  actions at National Priorities
List (NPL) sites.  I recently  approved Guidance  on  funding  States
during their oversight of  Potentially Responsible Party (PRP)
cond'ict of Remedial Investigations  (RI), Feasibility Studies  (PS)
and Remedial Designs (RD).   Furthermore, the  current Suoerfund
revjthorization  lanciuane  will  allow  State  funding for  a variety of
other enforcement activities.  These include ""such activities as
oversight of PRP conducted Remedial  Actions  (RA) , and  negotiation,
litigation and other efforts leadina toward private nartv cleanup.
This exoansion of the prooram's  funding  authorities will  inevitably
increase State enforcement actions at NPL  sites.

     As States expand hh«ir  involvement  in the Superfund enforcement
program, the Agency's oversight  and  review of their actions will
become an increasingly important activity. He must ensure  that
State enforcement actions  at priority sites are  conducted  in  a
manner consistent with Agency  procedures and  are adequate  to allow
for deletion from the NPL.   We must  also be able to determine, in
addition to a State's enforcement efforts, whether  Federal  review
and participation is necessary.  This can  only occur if we  are
Reot informed of the progress  and major  decisions made at  these
sites.

     CERCLA reauthoriration  will also  increase the  amount  of
interaction reauired with  States in  conducting Federal enforcement
actions.  Specifically, the  House Bill mandates  State  participation
in the following areas:

     • Applying  State standards  and  permits  to on-site and  off-site
       response  actions carried  out  under  Section 106;
     * Regulations for State involvement in the  CERCLA enforcement
       resnonse  process;  and
     • State concurrence  of  Section  106  enforcement actions.

-------
                                                         «9S21.2

                               -2-


The language in the House Bill is subject to revision.  However,
I believe the direction is towards increased State participation
and will continue to be the case even if reauthorization takes
some time to occur.  This increased emphasis on State participation
in Federal-lead enforcement actions coincides with our need to
keep States eaually informed and involved in our activities.  The
sharing of information needs to be reciprocal if we expect to be
successful in our efforts to seek private party cleanups and NPL
s ite deletions .

     As you are aware, on October 2, 1984, EPA and the Association
of State and Territorial Solid Waste Management Officials (ASTSWMC)
signed a joint policy statement establishing a 'framework for
coordinating Federal and State enforcement actions.  Among the
many issues recognized as needing to be dealt with in a cooperative
manner was that "sharing of information between EPA and the States
is key to developing a n.ore effective relationship."  The policv
also encouraged that States "keep EPA informed of their activities,
including consulting with the Regional office when issues arise
that do not have clear cut solutions."  I strongly encourage that
you more actively implement the suggested approach toward sharing
of enforcement information outlined in the policy.

     Meanwhile, very little information is currently available
that outlines the national picture of State enforcement actions
at NPL sites.  The information must be brought to a level that
assures responsiveness to our own concerns, as well as to Congress
and other interested parties.  The Office of Waste Programs
Enforcement (Ov:?E) recently reviewed the Case Management System
(CMS)  for information on- State-lead enforcement sites.  Of the
157 sites currently listed as State-lead enforcement only 44
have a negotiation activity listing (Removal, RI/FS, RD/RA or
other).  Of the 44 sites, 21 are listed as having initiated
negotiations with PRPs to conduct the activity.  Of the 21 sites,
only 7 have information on the type of negotiation takina place
(administrative order, judicial action, cost recovery, etc.).
This is also the case for State-lead enforcement RI/FS.  The
system records only 5 sites as having obligations for State-lead
enforcement- RI/FS.  Furthermore, the system does not provide any
information on the progress in getting these site actions completed.

     As an initial step toward getting a handle on State enforcement
actions, OWPE conducted a survey during the recent first ouarter
Superfund'Comprehensive Accomplishments Plan (SCAP) review.  The
survey confirmed those sites listed as State-lead enforcement  in
your Region, and categorized each site by the type of enforcement
action taking place.  I have attached the results of this survey
for your information, and want OWPE to continue using the SCAP
process to keep me informed of these ongoing actions.  During  the
second quarter SCAP review we may ask for additional information
on these sites.  I have attached a list of some additional data

-------
                                                    OSWER » 9831.2

                               -3-
reauirements that could be addressed, and would appreciate any
comments you have on collecting this information.  It would also
be helpful if you could identify what information is routinely
collected and exchanced in your Recion.

     I also want OWPE to continue working with ASTSWMO and the
National Association of Attorneys General (NAAG) to outline our
future State enforcement information reauirements and the States'
desires on information at Federal-lead sites.  I will be calling
on representatives from the Regions to assist in this effort.
Without your active participation and support we will not be
able to realize these long-term goals.

     In the meantime, if you have any information to provide or
concerns to address, please contact Jack Stanton (FTS-382-4811)
or Tony Diecidue (FTS-382-4841) of OWPE.

Attachment

Addressees:

Directors, Waste Management Division, Regions I, IV,V,VII,VIII
Director, Emergency and Remedial Resoonse Division, Region II
Director, Hazardous v.'aste Management Division, Region ill
Director, Air and Waste Management Division, Repion VI
Director, Toxics and Waste Management Division, Region IX
Director, Hazardous Waste Division, Recion X
Regional Superfund Branch Chiefs, Regions I-X
Regional Counsels, Regions I-X

-------
                                           OSWER « 9831.2
STATS-LEAD DJFOFONS7T



    SITES SlMBRf

-------
                                                           OSWER « 9831.2
     The following data elements represent a comprehensive list
of information that could be collected on State-lead enforcement
sites.  The data is essentially ecuivalent to the information
collected on Federal-lead sites.  However/ we will not collect
State-lead enforcement data at the same level of detail.  I want
this list to serve as a reference for discussion and would like
to receive your opinions on it.

     • Pre-Enforcement

       - PRP Search (Start/Completion; Planned/Actual)
       - PRPs Identified (Number/Names)
       - Notice Letters Sent (Start/Completion?  Planned/Actual)

     • Enforcement - RI/FS

       - Negotiations (Start/Completion; Actual)
       - Settlement (Hate)
       - Enforcement Actions -- Administrative/Judicial — (Start/
         Completion; Actual)
       - PRP RI/FS (Start/Completion? Planned/Actual)
       - State Enforcement RI/FS (Start/Completion; Planned/Actual)
       - Remedy Selection (Hate)
       - RI/FS Cost Recovery (Start/Completion;  Planned/Actual)

     0 Enforcement - RD/RA

       - Negotiations (Start/Completionj Actual)
       - Settlement (Date)
       - PRP RD/RA (Start/Completic- :  -. a.-.ned/Actual)
       - Enforcement Actions — Administrative/Judicial — (Start/
         Completion; Actual)
       - RD/RA Cost Recovery (Start/Completion;  Planned/Actual)

-------
                                                              ( nlor
 Pr«iOn
                        Sit*  *•••
                                                                     Code Co*»»nt
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in-u»rd  planning «udr
MPIJ« did r r«o«» I
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-------
                                                    r cement 5ilr»
n Stata
     Sltt *«•»• •
                                                     Cod* Coi»w»n|
I' NJ
2 NJ
? NJ
7 Nj
7 NJ
  NJ
  NJ
  Nj
  N J
  N)
  NJ
  NJ
  NJ
7 NJ
? NJ
7 NJ
2 NJ
? NJ
2 NJ
1 NJ
7 NJ
2 NJ
? NJ
2 NJ
2 NJ
7 NJ
2 NJ
2 NJ
2 NJ
2 NJ
? NT
? NT
2 NT
? NT
2 NT
2 NT
2 NT
2 NT
T NT
2 NT
'i NT
2 NT
2 NT
*/ NT
'i NY
 f HI
 / M»
 '/ Nt
 .' 'It
 i1 NT
        A«ar lean
        Brady He«ai»
        Brick ?ow«*hia  Landltil
        CPS Had i con
        C -envoi
        Cooler Road
        Diamond Alka! i
        EvOr  Phillip*
        f a i r I awn Ua II I 1 a 1 d
        For I Oi •
        He-cu'e*
        Hoa* tn» Far*
         Imperial Oil
         JIS Larndllll
         Jaekton Tonnahia Landfill
        LF  1 Develop**"!
        Monroe 1 own* hip LandliM
        PJP Land! I I I
        Pi jack Faro*
        Radiation  technology
        Sayrev.lle Landlill
         Shieldal toy
        S»*nca Far*
         Universal  Oi I
         Up»ar Ov*r field Landfill
         Ventron
         Vinelan-d St.  School
         Ui icon Far-
         Uoodland ft S3?
         Uoodland Pt  72
         Anchor Chaaieal
         Claraaont  Polrchaaical
         Clothitr  (PAS Sa««Hit«l
         tolavwilla Landfill
         Cortaca Landt •  I I
         FMC -Dublin Road
         Fulton  faramal (PAS Satrllit*)
         Golditc Racordin««
         Marital .Land 1 1  1 1
         Hookar Otaica I -ffutO Poly*rr
         Johnitavn  Landlill
         K«r.«»rk  !•.« i la
         LibartK  Industrial Fini«f.inq
         Ludtou Sand I b>av*l
         Mt>rcury Palming
         (II rf
V»% I X I
                                           B.E
                                           B.E
                                           H
                                           f
                                           B
                                           F
                                           B.E
                                           A
                                           B
                                           8
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                                           A
                                           A
                                           f
                                           f
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                                           B.C
                                           F
                                           0
                                           B
                                           A
                                           B.C
                                           C
                                           B
                                           B
                                           B
                i  S«..» • *
                 U> I I  <• .'
                 l*r,,H . • I  I I 'AS '.«trll>tr>
O
O
0
A
B
0
n
u
u
B
B
B
n
H
M
II
A
     AO  lor  PI/FS I PO.  PA dratted  -  PCPA
     AO  lor  Pl/fS »iqner:
     AO  lor  PI/FS »ii«>ed
     AO  contested.  1)1 I'  in court
     AO  lor  PI/IS * is-ed
     Oe I •*!  candidate
     AO  *i«|nrd tor  PI/FS - r e»eilv (electm
     AO-V»-NJI)IP  tundrd cand'.laie
     AO  PI/FS »iinr<|
     3 party aqree»rnt  t.ined  »o- PI/F5.IEPA.DEP.I  Pot))
     Negotiation* un  NJI'III S peril I
     Un I lateral  AO  lor  i»anitnr«nq and finer  in*al|atlOn
     AO  lor  PI/FS PO. PA *iqnrd> d*Ii»t candidate

     AO  lor  PO.  PA  • i^ned
     ACO «i*ned PI/FS
     AO-fc"» PI/FS
     AO  tinned PI/FS  t  cleanup
     AO  lor  PO.  PA  tinned
     AO  lor  RI/FS dined
     AO  d>altedi *eltle«ent concluded
     AO  tinned lor  PI/> S
     HOU (lined -it"  Dent  ol  Hu»an Service*
     A0-fc7 PI/FS candidate- drop dead date 3/31
     A0-fc«» PI/• S
     AO-V? RI/FS
                                                 CO.co-pany  bankrupt EPA  Mill  probably  a*(u*e lead
Or dvr •  wor fc  * n r*r
Na^otialiont on^oi
Na^ol tat iOn« nnqoi
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-------
                                    Stale-Lewd HnI orre»ent Site* 5u«
  State
              Si te  Na«e
                                                      Cod* Consent
3 OE     N«w Caatle  5a>ill
3 DE     N»H Cavtle  Ste.el
3 PA     ABfl Uede
J PA     Brodnead  Cr**k
J PA     Brown'* Battery Breaking Si I*
3 PA     Centre County Kea>one
.1 PA     C 11
1 PA     Hunt*r«|OMn Road Sit*
.1 "A     ft i«b»r ton
3 »*A     LI ndan* Ou*p
3 PA     Lord S^or*  LcndliM
) PA     n«lv«m ICE
3 PA     Modern Sanitation
1PA     OldCltxOl fork
3 PA     Otborn* Land*•I I
1 PA     R»«in Oitvocal
3 PA     SKrlv»r Corner
J PA     U«*ttn^Kou** Elevator Site
3 VA     U S.  I t taniu*
B
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A
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tISCA*  5(»t» pr»p«rin<) uO' V  p I »
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MSfA.  State p.ep*>*t| w
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-------
                                Stale-Lead Eniorcrovnt  Sites  Supnary
Statt
Sit* Na«»
                                                Code  Co"*ent
5 IL    3a>etbur«/Kopp*r*  C».
b M|    Auanua  "E"  G W  Contamination
S M|    Chancantral
^ M|    G BrOnaon I ndu« t r I a I  Area
•j n|    QI «antc Chamcal  Inc .
•^ M|    Poto Fini«h  Co.
S M|    SCA  Independent  Landfill
•3 M|    Southweat Ottawa County Landl i II
S MI    Sparta Landfill
S II    Spartan Chaoical Co.
S Ml    Uavta Mana^axant (Holland Laqnon*)
•j MM    A^cta Laka  Scrapyard
S MN    Boita Ca»cad«/Onan/Madtromc«
^ MN    ca»t Bethel  Demolition Landfill
b MN    Freeway Sanitary Landfill
5 MM    General Mill«/Henkel  Corp
S MM    Joalyn  Htf.  and Supply
S MM    Koch Ratinin^
V> MN    Koppar  Coke
*} MM    Kurt Manufacturing Company
S MN    NL/faracOrp
S MN    Ol.»taad  Co. Landfill
S MN    Pin* Band Sanitary Landfill
S MN    St. Au«u»ta Sanitary Ll/St. Cloud OUPP
S MN    St. *a«>* Paper Co.
*} MN    Union Scrap
b MN    Univerclfy of Minne»Ota  (Roteaont)
S MN    Wait* Park
S MN    Ua«htn«ton County Landfill
S MN    Uhittakar Corp.
S MM    Windoa  Ou«P
S OH    Alvco Anaconda
*3 OH    Neate Chanical
•3 OH    TRW
S OH    Zaneavllt* Wallfiald
S Wl    Oelavan Municipal  Wall No. 4
S Wl    Lauar  I Sanitary Landf•ii
5 Wl    O«a«a Hill* North LandliI I
S Ul    Wa«te 'aaearch and Cec'••••» ion
«> wi    Wh««itr Pit
                                                B
                                                R
                                                A
                                                t
                                                A
                                                A
                                                B
                                                B
                                                H
                                                U
                                                B
                                                U.
                                                B
                                                B
                                                A
                                                B
                                                A
                                                B
                                                0
                                                8
                                                F
                                                B
                                                0
                                                r
                                                F
                                                F
                                                O
                                                  I'  CO  for  Pfmavml :  P()/PA
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                                                      Unrlvtvr ••
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                                          AOC tor  I»f1
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                                                          NPL  update
                                                                                                      to Ci>f«fr«MM Co*.*

                                                                                                     !      OtriMtlrt*

-------
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-------
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-------
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-------
                                   St*t*-Lrarf Color
                                                        nt  Sit«» Su'»o
  Stat*
              Sit* Humf
                                                   Cod*
9 AZ     |9»H Avanua Landfill
9 At     Motorola 52nd Straat
9 CA     Advancad Micro Oavicv*
9 CA     A»pliad Matarial*
9 CA     Coa«t Ueed Pratarwin*,
9 CA     Fairchltd Ca»ara 1  |n«tru»*nt.
9 (A     Fir••ton* flra Manufacturer*
9 CA     Haulatt Packard  II
9 CA     IBM. Ganvral Product* OiuifiO
9 (A     Intal Ma«natlC«
f I*     Intel Santa Clara 3
9 I. A     L i«.uid Gold
9 (.A     Loranti Barral 1 Or uo
9 CA     Mar lay Coolint loitar
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             L'NITED STATES ENVIRONMENTAL PROTECTION AGENCY
                           v.ASHJ.NCTON.D.C. 20460
                                                          9832*8
                            MAY 23  1986
                                                            MOKITO»I>>C
MEMORANDUM
SUBJECT:  Raised Hazardous; Waste Bankruptcy Guidance
FROM:   y^RicnarSH. Mays/" x^
         ^Acting Assistant^ Aorr.inistrator for
            Enforcement and Compliance Honitoring
TO:       Regional Counsels, Regions I-X
     The Agency's recent experience in CERCLA and RCRA bankruptcy
actions has identified the need for updated and revised guidance
on the scope ,of EPA's enforcement actions against bankrupt parties.
This memorandum is intended to update the May 24, 1984 guidance
•CERCLA Enforcement Against Bankrupt Parties" and the guidelines
on bankruptcy contained in the Cost Recovery Handbook "Procedures
f.or Documenting Costs for CERCLA $107 Actions," January 30, 1985.
The memorandum defines specific criteria for evaluating the
merits of a potential bankruptcy referral; elaborates on the
policy regarding settlement with bankrupt parties? reviews the
recent judicial decisions in the areas of the automatic stay,
abandonment, discharge, and claims of administrative expenses;
•nd briefly describes new enforcement theories which have been
asserted by the Agency in recent pleadings.

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                                 2
BAN'KR'JPTCY REFERRALS                                      9832. 8
      EPA  has  referred  22  hazardous  substance  cases  to  the
Department of Justice  for filing     -jnkruptcy  actions.  After
several years of  litigation  only two of  these cases have resulted
in  recovery  of funds from the  debtor.  The current docket  of
bankruptcy cases  has consumed  a disproportionate amount of
attorney  resources  based  on  the expected  recovery of funds to
the Agency.
      Additional scrutiny  will  be used  in  evaluating future
referrals from the  Regions which include  bankruptcy claims.
In all referrals  regarding bankrupt  parties,  the Regions should
include a justification for  filing  in  the bankruptcy action.
The referral  justification should be based on at least one of
the following  five  criteria:
          1.   EPA is likely  to recover at least $5,000
               by  filing a  simple proof of claim as a
               general  unsecured creditor
      Filing a proof of claim is a relatively  simple and straight-
forward matter which nay  be  appropriate whan  the Agency has a
claim as a general  unsecured creditor, for example in'cases
where the Agency  has completed a response action before the
bankruptcy is filed.  Where  there appears to  be sufficient assets
in the debtor's estate */ for  a snail distribution to the
I/ Determining the extent  of the a,>   a  in the estate can be
~~  based on the schedule of assets **i out in the bankruptcy
petition, the extent  of assets and clains published following
the initial meeting of creditors, the  court's bankruptcy docket,
and periodic filings  available through the court clerk.

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                              - 3 -
9832.8
government on an unsecured claim, the trustee, debtor, or other
creditors ir.£y well not undertake the trouble and expense to
challenge a dale that does not otherwise threaten the estate.
The chances of such an objection are particularly small where
EPA's claim.is liquidated and CERCLA liability it clear £/.  As-
a general rule, a proof of claim should be filed in cases where
EPA does not anticipate that an objection will be raised by the
creditors or the estate end where the filing of a proof of claim
will lead to a recovery of at least SS.OOOj/.  In these cases,
the Region should prepare an abbreviated referral package con-
taining the proof of claim, supporting affidavits and cost
documentation and a brief description of the assets in the
debtor's estate.
          2.  EPA is likely to recover at least $20.000 of
              response costs through a more complex bankruptcy
              tiling
     As a general rule, prospective referrals of complex
bankruptcy actions (such as a request for an administrative
expense priority) that nay lead to recovery of less than $20,000
are discouraged.
21  Under Section 502(a) of the Bankruptcy Act • claim Is deemed
"~   allowed unless objected to.  Thus, filing * proof of claim, by
itself, will often not lead to the type of extensive litigation
that has characterized van? of the Agency's bankruptcy cases so far,
3/  If costly obstacles or significant challenges at some point
~"   do in fact loom over EPA's proof of claim, the Agency can
always withdraw its claim as * aatter of right prior to the
filing of an objection (Bankruptcy Rule 3006).  Even after the
filing of an objection to the proof of claim, EPA can withdraw
its claim, sublect to court approval.  As long as the claim was
filed in good faith, a court will be unlikely to deny the with-
drawal of a claim where the government indicates that it is not
in its best interests to pursue the claim.

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                                •A-                     9832,8
     Assuring a recovery of 520,000 or more, the Region should
set out  the  extent of  the assets  in the debtor's estate, the
nuirber and extent of other claims, the status of other creditors
(i.e., secured or unsecured), and the theories of recovery which
will be  asserted in the bankruptcy litigation.  The Region should
also evaluate the merits of EPA's claims, including the ability
of the Agency to prove its CERCLA $107 claims based on available
cost documentation.
          3.  The bankruptcy action has significant deterrence
              value                                         ~~
     Under this justification, the Regions should establish
that the bankrupt party may be seeking to avoid liability
for Superfund cleanup  through an unlawful declaration of insol-
vency.  The  referral should include a discussion of the past
financial practices of the potential defendant and any indication
of misrepresentation or fraudulent transfer of funds.  A bank-
ruptcy case may also be an appropriate candidate for referral  if
the case is made highly visible to-the regulated community and
will serve as a deterrent to other defendants who may contemplate
using the bankruptcy courts as an obvious shield from potential
Superfund liability to the government ^/.  In these cases,  the
A/  The government has been successful in dismissing bankruptcy
actions where the government was able to show under Rule 707(a)
or 305(a) that the dismissal was in the public interest.  In in
re Commercial Oil (No. 85-01951 Bankr. N.D. Ohio) the Bankruptcy
Court unoVr rule 707(a) direi«»ed the petition in bankruptcy
citing In re Charles George Land Reclamation Trust. 30 B.R. 918
(Bankr. C.t>. Mass. 19S3) which involved a shea bankruptcy filing
in *n attempt to avoid Superfund liability.

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9832.8                          "   '
   Pegion  should attempt to estimate the extent  to which  the  costs
   of litigation may be recoverable.
   4.  Equitable treatment of all  responsible  parties
        In some circumstances the  Kegion may wish  to refer  a  case
   against a bankrupt party In the interest of equity and fair
   treatment of all parties.   For  example, it  may  be appropriate
   to pursue the bankrupt owner or operator of a facility who
   contributed significantly  to the creation of  the hazard,
   particularly in connection with a settlement  with other  viable
   responsible parties.  In most cases,  the Region should not
   consider a referral against bankrupt generators or transporters
   unless  the case meets the  criteria set out  in justifications
   1  or 2.
        5. Favorable precedent or  tactical litigation considerations
        In rare cas^s 'there may be an overriding Interest In
   pursuing a bankrupt party  for the purposes  of obtaining  an
   Important and favorable precedent £/  or where there  are  tactical
   litigation issues relating to other actions in  which the Agency
   is involved ^/.
   5/   There may be eases where even chough  the  potential recovery
   ~~   is small, there is good opportunity to develop  the law in
   the area of environmental bankruptcy litigation.  Moreover,
   cases where the Agency's claim it small may present the best
   factual situations for developing our legal arguments.  For
   example, courts say be more willing to grant  an administrative
   expense priority when the size of EPA's claim is  email and will
   not keep other administrative claims from being paid.
   6/   For example, filing a proof of claim »ay  be a useful mechanism
   ~   to insure that the United States receives copies of relevant
   pleadings filed In the bankruptcy and has access  to participate
   in  whatever discovery is conducted in the bankruptcy proceeding.

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                                                       9832,8
MULTIPLE  CLAIMS
      In several  cases,  the Regions have referred bankruptcy
cases which  address  one claim  against a debtor, but which do not
mention other, sometimes unrelated, potential claims that may
involve the  same  debtor.  For  example, referrals for the recovery
of  funds  spent in an immediate removal nay also have potential
claims for CERCLA remedial action or RCRA corrective action.
There can be  conflicts  in how  the Agency would want to proceed
on  the various claims.  Accordingly, it is essential that the
full extent of all potential EPA claims against a debtor be
disclosed to  the  Department of Justice before any formal action
is  taken  in the bankruptcy.  All litigation reports prepared by
the Regions for bankruptcy cases should summarize all known and
potential claims  that EPA ttay have against the debtor.
SETTLEMENT VITP BANKRUPT PARTIES UNDER CERCLA
     The Agency's settlement policy jj/ states that it nay be
appropriate for the  Regions to enter Into negotiations  with bank-
rupt PRPs even though an offer nay not represent a' substantial
portion of the costs  of cleanup.  The policy further states, that
the Regions should avoid becoming involved in bankruptcy proceedings
It  "Interim Hazardous Vaste Settlement Policy" Vol. 50, No. 24
~   Federal Register (February 5. 1985) 5034-5044.  See discussion
at IT!  Management Guidelines for Negotiation, clainsTn bankruptcy
Id. at 5036.

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                                                         9832,8
if there  is little likelihood of recovery, and should recognize
the risks of negotiating yithout creditor status.  In general,
the Regions have been given broad authority to settle with
bankrupt  parties.
     When a -Region elects to settle with a bankrupt party the
following five options should be considered:
          1. Confession of Judgment
     In United States v. Metate Asbestos Corp. et al.. No. 83-
309-GLO-RMB (Order of July 12, 1985) the court approved the
entry of  a consent decree and civil judgment against certain of
the defendants in bankruptcy for $7,085.000.  The order granted
iudf»TT>ent jointly and severally in the District Court proceeding
in settlement of clairas against the bankrupt parties.  In this
case, due to the extremely limited asset* of the bankrupt
individuals,  it is doubtful that the United States will recover
a substantial portion of the $7 million.  This form of settlement
(i.e., a confession of liability and judgment) is only encouraged
in a Chapter 11 reorganiration action where a specific provision
for enforcement of the Judgment is tec out in the confirmed plan
of reorganization. £/
8/  Unless otherwise provided for in Che plan of reorganization,
""   the confirmation of the plan discharge* the debtor from
all debts arising before the date of confirmation, 11 U.S.C.
11141 (d)(1).  In addition, 11 U.S.C. I524(a) provides that
a discharge voids judgments on discharged debts and enjoins
any legal action to collect such debt* from the debtor or the
property of the debtor.

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                              . 8 -                      9832,8

          2.  V?ritten agreement with trustee and other creditors
              regarding satisfaction of claim with Tppropriate
              reservations
     It is also possible for the Agency Co enter into an agree-
ment with the trustee for the debtor regarding a future payment
of funds upon dissolution of the estate.  For example, in one
case in the Northern District of Florida the Agency is contem-
plating entering into a stipulation with the trustee and the
mortgage holder on the contaminated property.  As a condition of
settlement, EPA will agree to release the debtor from liability
and allow the cleaned up property to be sold or leased.  EPA and
the mortgage holder would split the proceeds from the sale or
lease of the property thereby recovering a substantial portion
of the Agency's cleanup costs.
     In a second case, in the Eastern District of North Carolina,
the Agency is considering entering into a similar arrangement.
The d*»btor-in-possession has submitted a liquidation plan of
reorganization in which the debtor agrees to retain title to the
contaminated property during the EPA cleanup.  When the cleanup
is completed, the debtor will tell the property.  The proceeds
will go first to cover administrative expanses involved In the
tale and then co EPA for reimbursement of response eostt.  EPA
has requested that language be Included In the plan which pro-
tectt the right of EPA to recover against the debtor's insurance
companies.

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                              - 9 -
9832,8
          3.  Aereerent with trustee regarding pro rata
              distribution of assets'
     Pending a final accounting, EPA may agree with the trustee
to a pro-rats payment of our claim in bankruptcy.  In In re
Crystal Checical Corpany. No. 81-02901-HB-4 (Bankr. S.D. Texas),
EPA entered into a stipulation with the trustee for a pro rata
payment of cleanup costs after liquidation.  The stipulation was
reached after a four day presentation of evidence to the bank-
ruptcy court where EPA was seeking an immediate payment of fund-s
for the ongoing cleanup.
          4.  Settlements contained in  the reorganization plan
     A Chapter 11 reorganization plan i» * type of settlement
document.  Reorganization plans can be used to set forth
various settlement-type provisions that are in the Agency's
interest.  For example, in In re Thomas Solvent Co.. NK 84-00843
(Bankr. W.D. Mich.), the Second Amended Plan of Reorganization,
which was confirmed by the court, Included, at the government's
insistance, provisions relating to preserving claims against
liability insurers and provisions relating to restrictions on
transfer of contaminated property.  Other appropriate provisions
in such plans Bight be provisions on access to property and
retention of records.  The Agency should insist on this type of
provision in cases where a plan cannot be confirmed without our
concurrence.

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                              -  10  -
                                                       9832,8
         5. Settlffrgnt with other creditors.
      In some  cases, other creditors will be a party to a settlement
between FPA and the debtor.  For example, in In re Thomas Solvent
Co..  NK 84-008O  (Bankr. VI.D. Mich.), there Is approximately
5350,000 available for distribution to creditors.  The significant
creditors are EPA, the State of Michigan and two residents  groups
with  health claiiss.  F.PA, the State and the two groups have
filed multi-million dollar claims.  We are presently finalizing
a settlerent arrong these creditors and the debtor which will
provide for the distribution of the $350,000.  One primary
benefit of such a settlement Is that it avoids the need for time
consuming and expensive litigation In bankruptcy court among
creditors damaged by the same activities, and will allow us to
devote our full resources to pursuing a coat recovery action
against other responsible parties.
     There are numerous other options for settlement,  and
for documentation of settlement, vith a bankrupt party,
including those used to resolve non-bankruptcy proceedings
under CERCLA.  Although Headquarters will be flexible in
reviewing these settlements, it is important that the Regions
consult vith Headquarters and the Department of Justice before
entering into final negotiations vith a bankrupt party.  An
abbreviated referral of the bankruptcy aettleaent agreement is
acceptable.

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                                                      9832,8
JUDICIAL DEVELOPMENTS
     Since the May 24, 1984 guidance was issued regarding CERCLA
enforcement againt bankrupt parties, there has been an increase
in judicial activity in the area of environmental bankruptcy
actions, particularly in cases involving hazardous waste sites.
In addition to several significant District Court and Appellate
Court decisions, the Supreme Court has issued two significant
rulings in this area in Ohio v. Kovaes, 105 S. Ct. 705 (1985),
and Midlantic National Bank v. New Jersey Department of
Environmental Protection, 54 U.S.L.W. 4138 (U.S.  Jan. 27, 1986)
("Quanta Resources').
     1.  Au.tonatic Stays
     Several courts have adopted the Agency's interpretation
that the automatic stay provision of section 362  of the
Bankruptcy Code does not apply to actions taken by a govern-
mental unit to prevent environmental harm.  In Penn Terra
Ltd. v. Department of Environmental Resources, 733 F.2d 267,
274 (3d Cir. 1984), the court htld that actions taken to
"rectify harmful environmental hazards" were an obvious
exercise of the Stabe's authority under the police power and
therefore were exempt.from the automatic stay.  The Supreme
Court, in a footnote to the Kovaes decision, suggested that
Penn Terra may be applicable to hazardous waste cleanup actions,
105 S.Ct. 705, 718, n. 11.
     A recent CERCLA decision regarding the Film Recovery
site in Illinois was also favorable to the Agency on the issue
of the automatic stay, United States v. B.R. MacKay t Sons Inc.,

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                                    "                    9632,8
 ec_al_1,  No.  S5-C-6925  (N.D.  111..  Jan.  17,  1986).   In the McKay
 decision the court  held  that  CERCLA cost  recovery  actions fall
 squarely within  the governmental  enforcement  exception  to the
 automatic stay.   Id. at  7.
      Other'recent decisions  indicate a split  of authority on the
 issue of whether  the automatic stay applies to enforcement actions
 brought  pursuant  to CERCLA.   In United States v. ILCO. 48 B.R.
 1016  (N.D. Ala.  19*5), EPA asserted claims pursuant to RCRA
 $3008, CWA 5§301 and 309. and CERCLA 1106.  The Court's decision
 in the ILCO  case stated  clearly that the CERCLA 5106 claims were
 exempt from  the automatic stay because the government's complaint,
 which  sought  a court order compelling ILCO to remedy environmental
 hariT!, constituted an equitable action to prevent future harm,
 rather than  an action to enforce a  sioney judgment.  Recognizing
 that  the  debtor would have to expend funds in order to satisfy
 the requested mandatory relief, the Court indicated that
 compliance with environmental laws  is of greater importance than
 the rights of the creditors.  The ILCO decision cites Penn Terra.
733 F.2d  277 and Kovaes in support.  See also. In the Matter cj
Hildeman  Indus.. Inc. (Bankr. N.D.  N.J. Dec.  17, 1984)  (dioxin
a ampling  taken pursuant to an administrative order falls within
the enforcement of  the police or regulatory powers of 4
governmental unit).  But see. In re Thomas Solvent Co.. Bankr.

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                               "                         9832.8
L. Rep.  (CCC)  170,111  (Bankr.  W.D. Mich.  1984)  (automatic stay
held applicable  to Michigan's  attempt  to  enforce a pre-bankruptcy
cleanup  injunction).
     Enforcement  actions brought pursuant to the Resource
Conservation- and  Recovery Act  and its  applicable regulations
have also been found to be exempt from the automatic stay in
most of  the  recent decisions.  The Bankruptcy Court in In re
Wheeling Pittsburg Steel Corp.. ct al.. v. United States
Environmental Protection Agency and Ralph W. Siskind,
No. K5-793 (PGK)  No. 85-0236 (Bankr. W.D. Penn. Oct. 31, 1985),
granted  the  United States' motion to dismiss the complaint
to enforce the automatic stay.  In that decision, the court
held that the United States can:  1) proceed to enforce RCRA;
2) seek  to determine the existence of  any violations of RCRA;
3) seek  to rectify those violations; aind 4) seek the entry of  a
money judgment on any penalties assessed  (but cannot seek to
enforce  such judgment without  an order from the court).
     Similarly, on appeal to the U.S. District Court for the
Western  District  of Texas from the Bankruptcy Court, in In
the Matter of Commonwealth Oil Befitting Co.. Inc..  Offieal
Committee of Unsecured Creditors and the  Indentured Trustee  v.
United States Environmental Protection Agency, No.  SA 85-CA-2045
(W.D. Texas, Nov. 5, 1985). the court held that an EPA enforce-
ment action  to require a debtor to comply with RCRA's Part B
requirements was  an exercise of the Agency's regulatory power,

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                              - 14 -
                                                          9832  8
and thus excepted from the automatic stay under 11 U.S.C.        '
§362(b){4).  The court stated that the expense which the debtor
will incur to conply with environmental laws does not convert
into an enforcement of a money judgment which would be auto-
matically stayed, slip op. at 3.  See also, United States v.
ILCO, 48 B.F". 1016, 1021, 1024 (N.D. Ala. 1985); In re Bayonne
Barrel and Drum Co., Inc_. , No. 82-04747, slip op. at 1 (D.  N.J.
July 17, 1984).  But see, In re Professional Sales Corp.,  48
B.R. 651 (Bankr. N.D. 111. 1985), rev'd 56 B.R. 753 (N.D.  111.
1985).
     There is also sane authority to suggest that the collection
of a civil administrative fine or penalty is an exercise of the
government's regulatory power, and therefore is exempt from the
automatic stay provisions, United States v. Energy International
Inc., 19 BR 1020, (S.D. Ohio, 1981).
     2.   Abandonment
     In Midlantic National Bank v. New Jersey Dept. of
Environmental Protection, ("Quanta Resources") 54 U.S.L.w.  4138
(Jan. 27, 1986), the Supreme Court held that "a trustee may not
abandon property in contravention of a state statute or regula-
tion that is reasonably .designed to protect the public health  or
safety from identified hazards."  The Court qualified this holding
by stating that this exception to the abandonment power would  not
apply if the state statute did not address an "imminent and
identifiable harm" or if  the violations alleged were "speculative
or indeterminate future" events. !£. at n.9.  The Court left

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                              - 15 -
              <    ,  v                                   9832,8
open tne question of whether trustees oust comply with health
and safety lavs no matter how "onerous" their provisions.   However,
the Court did stive sowe clue when it described security fencing,
drainage and diking repairs, sealing deteriorating tanks,  and
removing explosive agents as "relatively minor ateps."  Jd. at
n.3.
     Prior to the Supreme Court'* ruling, abandonment decisions
in the lower courts were mixed.  Compare. In re T.P.Long Chemical
Inc.. No. 581-906 (Bankr. N.D. Ohio,  Jan. 31, 1985)  (the trustee
was denied permission to use abandonment to avoid CERCLA liabil-
ities) with, Catarount Dyers, 13 B.C.D. 321 (Bankr.  D. Vt.  1985)
(abandonment of contaminated property allowed); In re Union
Scrap 7ro^ and M»tel. 13 B.C.D. 29 (Bankr. D. Minn..  1985  (same)).
     3.  Discharge
     The Supreme Court recently addressed the issue of whether  a
bankruptcy discharge relieves the debtor from fulfilling
environmental duties that nay have arisen prior to filing the
petition in bankruptcy.  In Ohio v. Kovacs. 105 S. Ct. 705
(1QR5) the Court stated that a pre-petition injunction for cleanup
of the Chen Dyne hazardous waste site is a diachargeable debt
where the debtor had been dispossessed of the property and hence
the State was.seeking nothing more than payment of aoney for
the cleanup.  However, the Kovses decision noted that an
affirmative injunction not to bring waste to a site (which would
not involve am expenditure of noney) was not • dischargeable
debt.  The Agency has taken the position that the Kovacs ruling

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                              -  16 -
                                                           9832,8
should be applied  only to those  sites where the debtor is no
longer in possession or control  of the contaminated property.
An equally narrow  interpretation can be made of the decision
in In re Robinson, NO. 84-404-BK-J-GP (Bankr. M.D. Fla.
Feb. 4, 1985), rev'd. (A pre-petition injunction to restore
marshland which the debtor had illegally excavated was also held
to be dischargeable even though  the debtor was not dispossessed,
because the restoration project would have required an expenditure
of money and was not an affirmative injunction.  In contrast,
EPA enforcement actions or cleanup compliance orders could be
characterized as an affirmative  injunction).
     4.  Recovery  of Response Costs - Administrative
         Expenses
     The Agency has successfully argued that the EPA's response
costs are necessary to preserve  the estate of the debtor and
should be accorded the priority allowed for administrative
expenses, In re T.P. Long Chemical Inc., No. 581-906 (Bankr.
N.D. Ohio, Jan. 31, 1985).  In the T.P. Long case, the
Court held that the estate was a liable party under CERCLA
$107 and that the  CERCLA liabilities of the estate were
entitled to priority treatment as an administrative expense.
Kovaes 105 S.Ct. at 711-712.
     The Supreme Court's decision in Midlantic Bank nay be read
to support the holding in T.T. Long that CERCLA liabilities
of the estate are  administrative expenses.  Although the Court
attempted to reserve the administrative expenses question, the

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                                                           9832,8
implication of the Court's holding that trustees must comply
with health and safety laws is that such compliance is an
"actual, necessary cost and expense of preserving the estate."
11 U.S.C. $503(b)(l)(A).  See also, In the Matter of Thomas
Solvent Co., No. NK-84-00843 (Bankr. N.D. Mich, Jan. 2, 1986)
(court order requiring construction of a fence on contaminated
property owned by the debtor stated that cost of construction  is
an administrative expense pursuant to $503(b) of the Bankruptcy
Code); In re Geucier Paesche fc Frey Co., (Bankr. E.D. Wise.)
(cleanup costs are administrative expenses); In re Laurinberg
Oil Co. , Inc. , No. B-84-00011 (M.D. N.C. Sept. 14, 1984)
(expenses incurred to abate violations of state water pollution
laws are administrative expenses); but see, Southern Railway
Co. v. Johnson Bronze Co., 758 F.2d 137 (3d Cir. 1985) (in the
absence of fraud, purchaser of property from the debtor does not
have claims against the bankrupt's estate for the costs of
cleaning up the site); In re Charles A. Stevens, 53 BR 783
(Bankr. D.C. Maine, Oct. 9, 1985) (costs for investigation of
waste oil contamination were found not to be an administrative
expense and constitute only a general, unsecured claim against
the debtor's estate); and In re Wall Tube and Metal Products
Co., N6. 3-84-00278 (Bankr. E.D. T«nn. Jan. 17, 1986), appaal
pending (environmental response costs incurred by the State of
Tennessee did not constitute administrative expenses).
     An important First Circuit decision which may have applica-
bility in the recovery of CERCLA penalties frcro bankrupt parties

-------
                                   "                      9832,8
is the case In re Charlesbarsk Laundry, Inc., 755 F.2d 200
(1st. Cir. 1985), which held that a State fine assessed  for
violation of a preliminary injunction is properly an adminis-
trative expense.
     Governments have also been successful in recovering cleanup
costs through property liens.  In In re Berg Chemical Co., Inc.,
Case No. 82-B-12052 (Bankr. S.D. N.Y. July 9, 1984), the City
was granted a superpriority lien against the property to clean
up chemical wastes.  But see, In re Charles A. Stevens 53  BR 783
(Bankr. D.C. Maine Oct. 9, 1985) (the State's pre-bankruptcy
investigation costs did not give rise to a lien against  the
property).
     5. Federal Lien
     The proposed CERCLA reauthorization legislation establishes
a federal lien on property belonging to persons otherwise  liable
for costs and damages under CERCLA.  (Amendments to CERCLA 5107).
The Senate bill provides that the lien is not valid against the
purchaser, holder of security interest, or judgment creditor
until notice of lien .is filed in the State where the property  is
located.  The House bill provides that the Agency's lien would
be subject to the rights of purchasers* judgment lien creditors,
or holders'of security interests under State law until notice  of
lien is filed.  The House version also establishes a maritime
lien applicable to vessels.

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                              - 19 -
                                                        9832,8
       MFNT THEORIES
     There have been several new enforcement theories developed
by the EPA Regional Offices, the Department of Justice and  the
Office of Enforcement and Compliance Monitoring in the area
of environmental enforcement against bankrupt parties.  Two of
these legal theories nay be particularly useful in the cases
involving insolvent hazardous waste handlers.
     1 . Withdrawal of Reference to District Court
     In deciding whether a bankruptcy court is the appropriate
forum there are two issues which are relevant: whether the
proceeding is a core proceeding under Section 157(b)  and, if
so, whether Section 157(d) applies.
     The bankruptcy courts have the authority to render final
decisions on all core proceedings listed under the bankruptcy
code.  However, both core and non-core proceedings, such as
factual determinations of liability for environmental damages,
tnay be referred to the federal district court.  Pursuant to
11 U.S.C. $l57(d) the district court is required to withdraw
a natter from bankruptcy court when it* resolution will involve
consideration of the bankruptcy code and other federal statutes
regulating organitations or activities affecting interstate
commerce.
     In United States v. ILCO. Inc.. 48 Bankr. Rep. 1016 (N.D.
Ala., 1985), the district court held that Section 157(d) applied
to, and required withdrawal from the bankruptcy court of, claims
asserted by EPA under CERCLA and other environnental statutes .

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                               -  ->o  -                     9832.8
The court found that CERCLA and  the other environmental statutes
relied on were "fclearly.. .rooted in the commerce clause and
are the type of laws Congress  had in nind when it enacted the
mandatory withdrawal provision."  Id. at 1021.  The court in ILCO
clearly sta'ted that withdrawal was only appropriate if the resolu-
tion of the claim required substantial and material consideration
of CERCLA; not that the CERCLA issues were "merely incidental"
for resolution of the matter.  See also, briefs filed by the
government in In re Johns Manville Corp. . No. 85-6828(A) (S.D.
N.Y. Dec. 30. 1985).
     Seeking withdrawal froa the bankruptcy court to the
district court will allow the Agency a more favorable forum
which is experienced in hearing complex issues of fact, and
will allow the Agency to. obtain a judgment enforceable in the
bankruptcy court.
     2.  Discharge of Debts
     All pre-petition debts are automatically dismissed when
the debtor is granted a discharge in bankruptcy, 11 U.S.C.
*727(b), 11 U.S.C. 1502, 11 U.S.C. II141(d)(1)(A).  The definition
of a pre-petition debt includes any action where a claia or
where a potential claim existed befor* the debtor filed for
bankruptcy (i.e. where a creditor could have aued or could have
filed a proof of claim).  Discharges art available in individual
bankruptcies (I727(b)) and in  Chapter 11 reorganisations
(51U1(d) (1) (A)*.  They are not available in corporate or

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                              - 21 -
9832,8
partnership Chapter 7 proceedings, or in Chapter 11 liquidations
(S1U1(d)(3).  This raises three questions for the Agency:
1) what type of bankruptcy proceeding is involved?  2) when did
the debt arise?  and 3) is the debt subject to discharge?
     First, _if the Agency did not incur response costs at a site
prior to the bankruptcy filing, the Agency nay wish to argue
that the debt  (or potential debt) did not arise until after
commencement of the bankruptcy action.  The Agency nay then
preserve its right to pursue an action against the party after
discharge.  However, a discharge in a Chapter 11 proceeding may
be read broadly to include all claims that arose pre-confirmation,
*11£1(d).  The issue of the proper treatment of post-petition,
pre-confiroation clairos is currently being litigated by the
Agency in the action against Johns Manville at the Iron Horse
Park site in North Billerica, Massachusetts, In re Johns Manville
No. *5-6828(A) (S.D. N.Y. Dec. 30, 1985).
     It &ay be advantageous in a Chapter 7 liquidation case for
the Agency to argue that the CERCLA cost-recovery claim "arose"
pre-petition, when the environmental harm first occurred or was
discovered, even though response costs were not incurred until
after the petition.  This Is due to the fact that the debtor
does not survive the bankruptcy and therefore recovery during
liquidation of tht estate, as a pre-petition creditor, Is EPA1 a
only chance for recovery.
     Second, if the debtor is an individual, or corporation or
partnership under Chapter 11 Reorganisation, the Agency nay with
to take the position that even if the debt Is a pre-petition

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                               - 22 -
9832*8
debt, EPA's claiis  is not subject to discharge because it falls
under one of the stated exceptions to discharge set out in 11
U.S.C. 5523(a).  The exceptions that would be applicable are
those which apply  to fines or .penalties payable to and for the
benefit of a governmental unit, 11 U.S.C. I523(a)(7), or for
willful or malicious injury to property, 11  U.S.C. §523(a)(6).
In cases of misrepresentation by the debtor, the discharge can
also be blocked by:  proof that the debtor made fraudulent
statements regarding its financial condition; failure by the
debtor to produce  books and records; or failure by the debtor
to explain losses, 11 U.S.C. !523(a).
CONCLUSION
     Future CERCLA bankruptcy referrals will be carefully
reviewed by Headquarters to determine if the action merit*
referral to the Department of Justice under the five criteria
set out in this guidance.  Settlement with bankrupt responsible
parties is encouraged and, consistent with the Agency'a  current
settlement policy, the Region is given greater flexibility and
authority to ««ttle claims against bankrupt parties.  Recent
Judicial decisions and enforcement theories developed by EPA and
the Department of Justice will strengthen the Agency's legal
position In those  cases where the Agency has decided to pursue
•n enforcement action against a bankrupt party.

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                              •  23  -                 9832,8
IMPLEMENTATION
     This guidance updates the procedures  contained in the
existing bankruptcy and cost  recovery  policies.  All future
hazardous waste bankruptcy referrels and settlements should
follow this guidance.  If you have  any questions concerning
these procedures please contact  Heidi  Hughes of ny office
(FTS 382-2PA5).
cc:  F. Henry Habicht II
     David T. Buente
     Gene A. Lucero

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                                                          9832.5
cotr.plaint (particularly the prayer for relief regarding costs)
is broad enough to include indirect costs. /«

     For those cases where indirect costs for past activities
will not be sought (i.e., those cases that meet the criteria
delineated aoove), the Region should notify tne defendants at
the next appropriate opportunity, but no later than July 30,
1986, that indirect costs associated with Agency activities
undertaken after that date will be included in the Agency's
demands.  The defendants should also be notified, where
appropriate, that all indirect costs will be sought if the case
proceeds to trial.

     Of course, all new CERCLA Section 107 referrals must seek
indirect costs.  Accordingly, cost recovery complaints filed in
new cases should include indirect costs as part of the total
amount sought and CERCLA demand letters must include indirect
costs as a portion of tne total demand made upon potentially
responsible parties.

     If you have any questions or. this policy, contact
David Van Slyke (OECM-Waste)  at FTS 382-3082 or Janet Farella
(OWPE) at FTS 382-2034.
cc:  Vincette Goerl, FMD
     David Buente, DOJ
/*   Depending upon the posture of the case, it may be possible  to
     amend the complaint to include a request for indirect costs.

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          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                           FB 12
                                  OSWER Directive Number 9835.4
MEMORANDUM

SUBJECT:
Interim Guidance: Streamlining the CERCLA
Settlement Aecjjsion Process
FROM:
TO:
J. Winston" Porter
Assistant Administrator
Office of Solid Waste a^id Emergency Response
  1  J| a   i   ^ • *-^-*>-'>Vir<-.
Thomas L. Adams, Jr.
Assistant Administrator H\r Enforcement
  and Compliance Monitorii

Regional Administrators, Regions I-X
Waste Management Division Directors, Regions I-X
Regional Counsels, Regions I-X
     During the Administrator's Superfund  Implementation Meeting
of November 19-20, 1986, several concepts  were presented for
streamlining and improving the CERCLA settlement decision process.
Those concepts addressed three major areas:

     1. Negotiation Preparation;
     2. Management Review of Settlement Decisions; and
     3. Deadline Management.

The purpose of this memorandum is to set forth those concepts in
greater detail and to define the roles, responsibilities and
procedures necessary to implement this  important initiative.

BACKGROUND

     Und«r CERCLA, EPA1s goal has been  and will continue to be to
maximize the number of sites which can  be  cleaned  up.   Congress
clearly indicated their support for this goal  in th« Section  122
settlement procedures of the Superfund  Amendments  and'
Reauthorization Act of 1986  (SARA).  That  goal requires constant
review of old policies and development  of  new measures  which
promote privately financed response actions.

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                                  OSWEP Directive Number 9835.4

                               -2-

     Clearly, one important measure to encourage settlement is to
maintain aggressive use of Section 106 administrative and judicial
enforcement authorities to compel private party response (see
Porter/Mays memorandum "Use of CERCLA 5106 Judicial Authority-short
Term Strategy", dated July 8, 1986).  The Office of Solid waste
and Emergency Response (OSWER) has recently amended aspects of
the Superfund" Comprehensive Accomplishments Plan (SCAP) to offset
some of the attendant project delay due to CEPCLA Section 106
litigation.  Regions may now request funding for remedial design
(RD) for enforcement lead sites concurrent with their referral!
This approach not only minimizes the tine where no site action
proceeds, but also puts the government in a stronger position at
trial.  Regions would be expected to pursue the litigation to
completion absent extraordinary circumstances or compelling
public health concerns.

     Congress recognized the value of enhancing the settlement
process in enacting SARA.  The provisions for Section 122 are
based in large part upon EPA's Interim CEPCLA Settlement Policy
(50 FR 5034)"and are designed to increase potentially responsible
party (PRP) participation"in response actions.  The new provisions
related to special notice, information sharing and neootiation
mcratoria are particularly important.  They attempt to strike a
balance between the competing demands of prompting more settlements,
conserving limited government resources, and minimizing the delay
in the clean-up process.

     Additionally, our experience in the last six years has
shown us that the way in which we manage other parts of the
settlement process can also have dramatic effects on the chances
for successful negotiations.  For example, setting deadlines too
tightly can destroy the willingness'of PRPs to attempt to settle.
On'the other hand, prolonged and inconclusive negotiations can
seriously delay response actions at a site.  Based on our
experience, and comments from the Regions and other parties
involved in the process, the Agency has concluded that there are
three areas, in addition to the matters covered by SARA, where
certain changes will help improve and streamline our process for
conducting settlement discussions:

      •  Negotiation Preparation;
      •  Management Review of Settlement Decisions; and
      •  Deadline Management.

     Before describing these changes in the sections which follow,
a brief description of the problems that have been encountered
will help to explain why this guidance has been prepared.

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                                  OSWER Directive Number 9835.4

                               -3-

     There are two kinds of problems sometimes associated with
negotiation preparation; instances where EPA does not fully
prepare itself for negotiations and instances where EPA does not
facilitate the preparation of PRPs.  Negotiations are occasionally
begun without the benefit of government proposed settlement
documents (e.g., a draft consent decree and technical support
documents).  Ideally, negotiating teams should have a strategy
for settlement which addresses goals, interim milestones for
continuing negotiations, firm schedules and followup steps in the
event settlement is not achieved.  When EPA does not adequately
plan, it is difficult for the government to live up to its
responsibilities in moving discussions towards conclusion.

     Perhaps more important, though, are the issues related to
our support of the PRP preparation process.  PRPs at Superfund
sites are often facing multi-million dollar liability.  There are
generally many of them  (sometimes hundreds) and our success in
negotiations is greatly influenced by the extent to which the
PRPs have the time and  information to organize themselves.  Our
occasional failure to give early notice or to provide adequate
information (including draft settlement documents) to PRPs has
been clearly counterproductive.  Conversely, in those instances
where notice has been.given early in the process, substantial
information has been made available and where EPA has assisted
in the formation of steering committees ' (with or without third
party assistance), we have been much more successful in settlement
efforts.

     Prompt conclusion of some negotiations has also been
occasionally hampered by breakdowns in EPA1* management review
of settlement decisions.  Superfund settlements have frequently
posed issues which are difficult either because of their prece-
dential nature or the sheer magnitude of the clean-up.  Delayed
decisions often affect the willingness of PRPs to settle and
always impair the credibility of the negotiating team.  When
delays have occurred, they are generally attributable to several
factors.. In some instances, negotiating teams did not raise
issues to management early in the process, and decisions ultimately
are forced by crisis.   In other cases, decisions seemingly can
be made only by the highest levels of Headquarters management.
The relative inaccessability of those decision-makers to decide
on critical issues in a timely way has sometimes been a major
impediment to settlement.

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                              OSWER  Directive Number  9835.4

                               -4-

     The  third problem area  in the settlement process relates to
managing  deadlines  for negotiations.   in recognition of the fact
that these are multi-party negotiations over complicated legal
and technical issues, a reasonable opportunity should be provided.
However,  guidelines must be  established for bringing closure to
issues so as net to excessively delay  the clean-up at the site.
At times, decisions are made to extend negotiations based on a
showing of some subjective "progress", even where there is no
concrete  result to  show for  that progress.  Decisions are sometimes
made to continue negotiations based  on concerns over future cost
recovery  actions.

     In order to substantially improve the CERCLA settlement
process,  attention must be given to  solutions for each of the
three areas discussed above.  The framework set forth herein is
intended  as a major first step in that direction.  However,
refinement and modification  of these steps will be considered
based on  your comments and experience  gained in the coining months.

SETTLEMENT PROCESS  IMPROVEMENTS

Negotiation Preparation

     Regions should improve  negotiation preparation through four
activities:

     1.   Earlier, Better Responsible Party Searches
     2.  Earlier Notice and  Information Exchange
     3.   Initiating Discussions Earlier
     4.  Preparation of a Strategy and Draft Settlement Documents.

     The PRP Search is the first step  in the settlement process
and is one of the most critical to success.  Regions must pay
close attention to  both the  timing and quality of the PRP search
since inadequate information on the  identity of PRPs and their
contribution* can be a significant impediment to the PRPs
organizing themselves to present an  offer of settlement.  Guidance
and targets established under the SCAP now require that PRP
searches be initiated concurrent with  the Expanded Site
Investigation or National Priorities List (NPL) scoring quality
assurance process*  PRP searches are required to be completed
not later than the year in which the site is proposed for the
NPL.  Contractor efforts should be supplemented by issuance of
information request letters  or the use of administrative subpoenas
(a new provision of SARA) at the earliest possible time.  It is
imperative that these searches be comprehensive and of high

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                                  OSWER Directive Number 9835.4

                               -5-

quality.  That places a heavy responsibility on Regional staff
to provide direction to and review of contractor efforts.  In-
house civil investigators will be hired and available to Regions
this year to assist in this effort,  in addition, Headquarters
staff from both OSWER and the Office of Enforcement and Compliance
Monitoring (OECM) will revise the the "Potentially Responsible
Party Search Manual" as well as present a training program
for Regional staff and contractors on the conduct and review of
PRP searches.  That training should be initiated late this year.
In the meantime, Regional staff should carefully evaluate the
adequacy of PRP searches for sites scheduled for fund obligations
or judicial referral during FY 87 and early FY 88 to determine
whether supplemental work is necessary.

     Regions should give notice to PRPs of their potential
liability through the traditional notice letters at the earliest
practicable time and, in all cases, well in advance of initiating
the negotiation moratorium.  This is not to be confused with the
Special Notice which triggers the moratorium as described in
S122(e). (Guidance on Special Notice and the moratorium is forth-
coming.)  It is not acceptable to postpone issuing notice until
only the minimal time for negotiations remains prior to obligation
of funds.  Notice may be given to some parties where further
investigation or analysis is necessary to identify additional
PRPs.

     Notice letters should routinely include information requests
under Section 104(e) if not previously issued. Notice letters
should to the maximum extent practicable also provide information
as to other PRPs (i.e. names, volumes contributed and rankings).
In some cases, it may be more pratical to provide this information
after analyzing the responses to the information requests.

     It is likewise important to initiate discussions with PRPs
earlier in the process.  While' formal negotiations may not begin
until after Special Notice and closer to the planned obligation
date for the project, EPA should encourage earlier discussions
that will further the process of educating the PRPs as to the
site, EPA'* approach to it and the information we have that may
bear on allocation or other pertinent matters.

     Th« litigation team must also begin early the process of
preparing draft settlement documents and a negotiation strategy.
A draft Consent Decree (or administrative order for Remedial
Investigation/Feasibility Study  (RI/FS)) should be prepared
along with any negotiation support documents outlining technical
objectives to be presented at or before the first negotiation

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                                  OSWER  Directive Number 9835.4

                               -6-

session.   (Note that a "Negotiation Support Document" to be used
as a technical attachment for an RI/FS settlement may be prepared
by a contractor but oust be  initiated well in advance of
negotiations).  Regional staff should also prepare for regional
management rev-iew a negotiation strategy which addresses:

     0   initial positions on major issues with alternative and
         bottomline positions or statements of settlement objectives;

     0   schedule for negotiations which  identifies not only the
         drop-dead date but also interim milestones at which
         negotiations can be evaluated for progress (date for good
         faith proposal with line-by-line response to draft settle-
         ment document; date for resolution of major issues related
         to scope of work, funding arrangements, reimbursement;
         date for receipt of all necessary submittals from PRPs
         such as technical attachments, preauthorization requests,
         trust agreements, etc);

     0   strategy and schedule for action against PRPs in the
         event negotiations are unsuccessful (i.e., issuance of
         unilateral Administrative Order  (AO) concurrent with
         Remedial Design (RD) obligation, Section 106
         referral, etc).

     The timing of most of these activities- is critical and in
many cases will be related to the proposed date of obligation of
funds. •  For that reason, management attention to the entire site
management planning process is critical  to ensure that the required
activities at sites are properly sequenced.  In order to assist
you in this, attached  for your Region is an Enforcement Confidential
printout taken from the Integrated SCAP which shows the status
of key settlement related activities for sites with planned
obligations during FY  87 or FY 88.  (Attachment I)

Management Review of Settlement Decisions

     To  help improve the management review of settlements, this
section  sets out roles and accountability in the decision process.
In addition, it adds two new elements to focus and streamline
policy review:

     •   A Settlement Decision Committee  (SDC); and the
     0   Assistant Administrator (AA) Level Review Team.

     The existing negotiation team approach will continue to  be  the
primary  vehicle for developing settlements.  The negotiation  team
will routinely be comprised of a representative from the Waste
Management Division and a representative from the Office of Regional
Counsel.  Department of Justice (DOJ),  OECM,  the Office  of Waste

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                                  OSWER Directive Number 9835.4

                               -7-

Programs Enforcement (OWPE) staff and appropriate State representa-
tives may participate as necessary.  The responsibilities of the
neaotiation team are to:

     e  ensure that ppp searches, notice and information exchange
        are properly scheduled and completed;

     0  develop a comprehensive negotiations strategy in advance
        of negotiations;

     e  develop and share draft settlement documents, includina
        technical scopes of work, in advance of negotiations;

     0  conduct negotiations; and

     8  raise issues to the Regional Administrator, and where
        necessary, to the Settlement Decision Committee for
        resolution.

     The Regional Administrator, in consultation with DCJ, is
expected to be the primary decision-maker on CERCLA settlement
issues.  Administrative settlements for RI/FS are fully the
Regional Administrator's responsibility.  OSWFR and OECM con-
currence continues to be reouired on remedial settlements.  In
particular, certain najor or precedential issues in Remedial
Design/Remedial Action  (RD/PA) negotiations should be referred
for early Headouarters'  resolution.  Those issues include mixed
funding or preauthorization arrangements, broad releases,
de minimis settlements, deferred payment schemes, and remedies
that deviate significantly from the Record of Decision  (ROD).
More detailed guidance  on those issues will be prepared and made
available to you in the coming months.

     At the same tiwe such guidance is being prepared,  Heacauarters
will develop an oversight program that ensures quality  and con-
sistency in Regional program administration, and provides sufficient
feedback to allow future'policy adjustments.  Once guidance is
finalized, some experience has been gained, and the oversight
program is in-place, we fully expect that the Pegional  Administrator
will have broad authority 'to reach settlement decisions within  the
framework of that guidance.  In the meantime, initial delegations
of certain new authorities will be limited by consultation or
concurrence reouirements.  After a period of experience, waivers
of concurrence may be made to those Regions which demonstrate
continuous quality and  consistency in administering  the CERCLA
enforcement'process.  At this point, which  is likely  to occur
within approximately one year, OSWER and OECM will largely  fill  an
oversight role, assurina effective settlements consistent with
applicable auidance and"developing additional guidance  as necessary.
That cole will also include periodically  reviewing whether  waivers
of concurrence remain justified.

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                                  OSWER Directive Number 9835.4


                                -8-

     In  the  interim, a Settlement Decision Committee (SDC) has been
created  in Headquarters to provide timely action on issues which
require  Headquarters review.  The SDC will r>e made up of the
following individuals:

Chair:    Gene A. Lucero, Director, OWPE
Members:  Edward E. Reich, Associate Enforcement Counsel for Waste,
              OECM
          David T. Buente, Chief, Environmental Enforcement Section,
              DOJ
          Basil G. Constantelos, Director, Waste Management Division,
              Region V
          Bruce Diamond, Regional Counsel, Region III

          Henry L. Longest, Director, Office of Emergency and
              Remedial Response (OERR) (when necessary)

     Regional representatives to the SDC will be rotated every six
months.  The SDC will meet approximately every 3-4 weeks, or more
often if necessary.  Its primary responsibility will be to coordin-
ate decisions on policy issues  raised by Regions.  Most settlement
issues requiring Headquarters review will be resolved at this
level.  The Chief, Compliance Branch, CERCLA Enforcement Division
(CED), OWPE will serve as secretary for the SDC and will coordinate
communicating policy decisions  to the affected Region, and more
broadly where decisions create  precedent which may be transferable
to other sites.  The SDC will also monitor Regions' progress towards
finalizing settlements, paying  particulary close attention to
pending deadlines.

     Regions should access the  SDC through either OECM-Waste or
the CERCLA Enforcement Division, OWPE.  Regions should be prepared
to provide a brief summary of the issue, options and their
recommendation.  Regions may, at their discretion, attend the SDC
meeting to present or elaborate on the issue.  (More detailed
procedures will be established  by the SDC.)

     The Assistant Administrator Review Team which was established
during April 1986, will become  a formal part of the management
review and decision-making process.  The group will be chaired by
the AA-OSWER and include the AA-OECM and the Assistant Attorney
General  for Lands and Natural Resources, DOJ.  The primary function
of this Team will be bo provide overall policy direction on
settlement concepts, but will also be available to resolve major
policy issues specific to site* where necessary, as determined by
the SDC.  The AA Review Team will meet at  least quarterly, but
may convene more frequently, if required by circumstances.  As
Chair of the AA Review Team, the AA-OSWER must approve extensions
of negotiations beyond the 30 day authority granted to Regional
Administrators below.

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                                  OSWER Directive Number 9835^4

                                -9-

Deadline Management

     Effective management of negotiations in the CERCLA program
will require increase management attention both in Regions and
Headquarters.  In order to facilitate the management overview
that will be necessary, particularly within both the program and
counsel's office in the Region, OSWER will provide to you periodic
reports from the Integrated SCAP, similar to Attachment I, which
highlight negotiations in progress or planned for the next quarter.
Headquarters staff and management will use these reports to track
the progress of and preparation for negotiations.

     Recognizing the complexity of CERCLA settlement discussions,
it is clear that there will be instances where extension of
discussion beyond the moratorium period will be appropriate.  The
framework for considering extensions includes:

     1.  Thirty day Extension by the Regional Administrators
     2.  Additional Extension by AA-OSWER in Exceptional
         Circumstances

     While the SARA Section 122 provisions related to special
notice and negotiation moratoria are discretionary, EPA policy
will be that those provisions should generally be employed.
Section 122 provides for up to a 120 day moratorium before remedial
action, during which time EPA. may not initiate enforcement action
or remedial action.  The full moratorium period is conditioned on
receiving a good faith offer from the PRPs within 60 days.  In its
absence, the moratorium expires after 60 days.  (.Note that while
EPA may proceed with design work, as a general rule, we will not.)
Where adequate preparation as discussed above has preceded special
notice, Regions should generally be able 'to conclude negotiations,
or at a minimum, resolve all major issues during that period.
While negotiation extensions should not be encouraged, Regional
Administrators may grant extensions to negotiations when it is
believed--that a settlement is likely and imminent.  However, this
period should not to exceed 30 days.

     Further extension of negotiations beyond that 30 day period
may be approved only by the AA-OSWER.  Absent that approval,
Regions are expected to move forward with Fund-financed action,
administrative order or judicial referral where appropriate.
(Note that negotiation* nay be resumed at any point after referral
and filing of a Section 106 action.) Extensions will be granted
only in rare and extraordinary circumstances and will generally
be for short duration where the expectation is that final agreement
is imminent.  Requests Cor extension should be made by the Regional
Administrator in writing through the Director, OWPE to the AA-OSWER

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                                    OSWER Directive Number  9335.4


                                -10-

and should set out succinctly:  1) the length of extension re-
quested; 2) status of negotiations (issues resolved and those
unresolved); 3) justification for extension; and 4) actions to be
taken in the event that negotiations are unsuccessful.  The AA-OSWER
will only consider requests for extensions made by the Regional
Administrator and not direct requests made by PRPs.

     In order to avoid any misunderstanding, these limitations
should be communicated to the PRPs early in any discussions.
Moreover, the schedule for negotiations, so long as it respects
these deadlines, is always open to adlustment by agreement among
the parties.

     As discussed earlier, it is important to recognize that
negotiations are not limited to the 120 day period established by
the special notice provisions of the law.  Information requests
and traditional notice letters should be sent as soon as possible,
and initial discussions should almost always occur with PRPs before
the special notice is provided.  We are developing more detailed
guidance on notice letters, and the use of the special notice
procedures, and we anticipate circulating this guidance for
comment within the next month.

     One of the lessons learned as a result of the limited April-
May 1986 funding during the Superfund slowdown was that there are
benefits derived by having several settlements which are on a
parallel and firm schedule for final resolution.  Not only did we
find that firm schedules tend to force issues to resolution, but
it proved to facilitate management review in that sites with
similar issues could be dealt with concurrently.  In order to
extend this "clustering" effect, OSWER is considering including
in the FY 88 Strategic Planning and Management System (SPMS)
commitments a target for completion of RD/RA negotiations.

Approach for RI/FS Negotiations

     In light of the delegation of RI/FS decisions, much of the
above process is not relevant for RI/FS negotiations.  The Agency
continues to encourage PRP conduct of RI/FS in appropriate
circumstances (see Thomas/ Price memorandum "Participation of
Potentially Responsible Parties in Development of Remedial
Investigation and Feasibility Studies", dated March 21, 19*4).
RI/FS settlement issues should generally be resolved by the Regional
Administrator and need not be submitted to the SDC or the AA-level
review group.  Section 122 authorizes a 90 day moratorium for
negotiations, conditioned on receiving a good faith offer from
PRPs within 60 days of special notice.  Regional  Administrators
have discretion to terminate or extend negotiations after 90  days.
However, extension of negotiations beyond an additional 30  davs
should be authorized by the Regional Administrator only in

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                                        OSWER Directive Number 9835
                                -11-
litnited cases.  The points made above in Negotiation Preparation
are equally applicable to RI/FS negotiations, with the exception
that negotiation strategies do not require Headquarters review.

SUMMARY

     Implementation of these steps to streamline the settlement
process was identified by the Administrator as one of his highest
priorities under SARA.  We urge you to Rive this topic the same
priority in your Regions and provide a commensurate level of
management attention.

     If you have any questions about these measures or their
implementation, please contact either of us directly.

Attachment

cc:  Superfund Branch Chiefs
     Regional Counsel RCRA/CERCLA Branch Chiefs
     Enforcement Section Chiefs
     Gene A. Lucero
     Henry Longest
     Ed Reich
     Jack Stanton
     Russ Wyer
     David Buente

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                    Federal Ragiatar / Vol. 52. No. 102 / Touraday. May a. 1987 / Notices
                                                                                               OSWER
                                                                   *  9839.1
                                                                    IWli
  Date* May 3& laV.
 VaeaA,Newel
 IFK Doe. B7-U1M PIM «7-e7: Ml MI|
 Agency.
       ocattonaof
       (NBAR)

: Environmental Protection

 Request for public comment
        r. Section 122(e)(3) of th«
Supcrfund Amendment! and
Rtauthorization Act of 1MB (SARA).
which amended the Comprehensive
Environmental Response.
Compensation, and Liability Act
(CERCLA), requires the Environmental
Protection Agency (EPA) to develop
guidelines for preparing nonbinding
preliminary allocations of responsibility
(NBARj). EPA is publishing today the
Interim Guidelines for Preparing
Nonbinding Preliminary Allocations of
Responsibility to announce that the
guidelines are in effect and to solicit
public comment on them.
DATE Comments must be provided on or
before |uly 27. M67.
Aoomit: Comments should be
addressed to Debbie Wood. U.S.
Environmental Protection Agency.
Office of Waste Programs Enforcement
WH-SZ7. .401 M St SW.. Washington.
DC 20400.
POM PUWTHdl MPOASAATIOM
Debbie Wood. U.S. Environmental
Protection Agency. Office of Waste
Programs Enforcement WH-S2T. 401 M
St SW. Washington. DC 20460. (302)
382-3002.
•UPMBMMTAMY MPONMATXMC As
defined in section 122»e)(3)(A) of SARA.
an NBAR is an allocation by EPA among-
potentially responsible parries (PRPs) of
percentage of total response cost* at a
facility. The purpoac of NBARs U to
promote expedited settlement. NBARs
are not binding oa the government or
PRPr they caaaot be admitted aa
evidence or reviewed in any judicial
proceeding, including citizen suits.
Whether to prepare an NBAR at any
particular CERCLA site is a decision
within EPA's discretion.
  EPA will consider preparing an NBAR
at a site if it appears that aa NBAR may
help to promote settlement StilL NBARs
will not be routine. In general EPA's
policy is that PRPs should work out
among themselves questions of bow
•tea each will pay toward settlement at
aaita,
  Comments may address the overall
approach takes at the iateria guidelines
or focus on any aspect of it EPA
parttcaiariy solicits comment on
appropriate factors to consider in
determining percentage allocations for
owners, operators* and transporters.
  The polices and procedures set forth
to the interim guidelines are guidance to
EPA employees. The interim guidelines
include enforcement policies and
internal procedures that are not
appropriate or necessary subjects for
rulemaking. Thus, the guideline* do not
constitute ralemaking by EPA and may
not be relied on to create a substantive
or procedural right or benefit
enforceable by any other person. EPA
may, therefore, take action that is at
variance with policies and procedures
contained in this document.
  EPA is publishing the interim
guidelines to provide wide public
distribution of information on this
aspect of SARA iaiplf mentation, and to
gain the benefit of public comment The
interim guidelines follow:
  Dated: May 16.19S7.
U*M.T»eafta*.
AAninittrator.

INTERIM GUIDELINES FOR
PREPARING NONBINDING
PRELIMINARY ALLOCATIONS OF
RESPONSIBILITY

L Introductton
  Section U2(e)(3) of the Superrond
Amendments and Reauthorization Act
of 1906 (SARA). Pub. L No. 90-499.
which amended the Comprehensive
Environmental Response.
Compensation, and Liability Act of I960
(CERCLA). 42 UJ5.C 9601 ef sec..
requires the Environmental Protection
Agency (EPA) to develop guidelines for
pinifaH^g nonbindtog preliminary
allocations of responsibility (NBARs).
Aa defined a section !22(eX3)(A). aa
NBAR is aa allocation by EPA among
potentially responsible parties (PRPs) of
percentages of total response costs at a
facility. SARA authorises EPA to
provide NBARs at its discretion. NBARs
are a tool EPA may use ia appropriate
cases to promote remedial settlements.
  NBARs will allocats 100 percent of
response costs among PRPs. The
discretion to prepare an NBAR does not
change the goal of the interim CERCLA
settlement policy, published at SO FR
1034 (February 5.1984). to achieve 100
percent of cleanup or coats in
settlement
  la preparing aa NBAR. EPA may
consider such factors as volume.
toxidty. aad mobility of hazardous
substances contributed to the site by
PRPs, aad other settlement criteria
mdaded in the interim settlement policy
(SO FR 5034.3037-4038). The settlement
criteria include strength of evidence
tracing the wattes at a site to PRPa.
ability of PRPs to pay. litigatrve risks ia
proceeding to thai, public interest
considerations, precedential value.
value of obtaining a present sum certain.
inequities and aggravating factors, aad
nature of the case that remains after
settlement
  Aa NBAR is not binding oa the
government or PRPs; it eaanot be
admitted as evidence or reviewed in any
judicial proceeding. inr^"tting citizen
suits. An NBAR is preliminary in the
sense that PRPs arc free to adjust the
percentages allocated by EPA among
themselves.
  Should EPA decide to prepare aa
NBAR. it will normally be prepared
during the remedial investigation and
feasibility study (RI/FS). and provided
to PRPs as soon as practicable, but not
later than completion of the RI/FS for
the site. The NBAR process will
normally be used only ia cases where
the discretionary special notice
procedures of section 122(e) are
invoked.
  Following presentation of an NBAR to
PRPs, PRPs have an opportunity to offer
to undertake or finance cleanup.  EPA
need consider only substantial offers. A
substantial offer is defined in pan IV of
these guidelines. EPA must provide e
written explanation to PRPs if it rejects
a substantial offer based on an NBAR.
Under section 122fe)(3)(£). the decision
to reject a substantial offer based on an
NBAR is not subject to judicial review.
  Section 122(e)(3)(D) states thet tSe
costs incurred by EPA in preparing an
NBAR shall be reimbursed by PRPs
whose offer is accepted. If a settlement
offer is not accepted. NBAR preparation
coats an considered response costs
under SARA.

IL When To U«e the NBAR
  The NBAR is meant to promote
settlement and. thus, reduce transaction
costs. Generally. EPA will consider
NBAR preparation when it appears that
an NBAR may help to promote
settlement. EPA will give particuUr
consideration to preparing an NBAS
whenever a significant percentage of
PRPs at a site request one. What
constitutes a  significant percentage is a
case-specific determination. Regions
should note die existence of the NBAR
process ia all pre-Rl/FS notice tetters.
aad indicate  its potential availability if
requested by a significant percentage of

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19920
                    Federal Renter / Vol. 5Z No. 102 / Thursday. May  28. 1967  /  Notices
PRP* within 30 day* of receipt of the
notice.
  Thar* an certain situations where an
NBAR may be particularly appropriata.
For example, in a case that involve*
federal agendas as PRPs, preparing an
NBAR in order to ascertain the
percentage of federal agency
responsibility is likely to promote
settlement even though a significant
percentage of PRPi did not request it
Similarly, if a state or municipality is
involved at a site as a PRP, NBAR
preparation may b* deemed likely to
promote settlement. Or. it might be
appropriate to prepare an NBAR in a
case with a large number of PRPs
inducting, perhaps, a sizeable de
minima contingent An NBAR may help
coalesce a previously unorganized PRP
group into a steering committee, and
thus promote settlement
  There are also situations where an
NBAR should probably not be prepared.
For example, it may be dear very early
in the process that there is insufficient
information aveiisble on which to base
an NEAR, or that the number of PRPs
not de minima is so small that an NBAR
would not expedite settlement. In some
cases it may seem that an equitable
settlement can be more expeditiously or
effectively achieved without use of
NBAR procedures. There may also be
cases where NBAR preparation is ruled
out because an allocation for the site is
already being prepared by or for PRPs.
  Again, whether to prepare an NBAR
at any particular site, induding any
state enforcement lead site, is a dedsion
within EPA's discretion and will depend
on the particular circumstances of each
case. The decision whether to prepare
an NBAR at any particular site rests
with the Regional Administrator.
  IF EPA decides to prepare an NEAR, it
will notify PRPs of that fact in writing as
early as is feasible. An NBAR
notification should specify that tha
decision to  prepare aa NBAR is
discretionary aad U continent at a
minimum, upon  the availability of
sufficient data.

IIL How To Prepare aa NBAR
  The purpoee of the NBAR is to
promote expedited satticmefit thai
miBuattttasj ttaaaaction coeti1, aa NBAR
must be conducted ia a fair, efficient
and pragmatic maaaar. For simpbdty
and other practical reasons, the
allocatioa process presented hare is
baaed primarily upon volume aad the
settlement criteria.
  EPA considered aad rejected modal*
bated on toxidty because of the
complexity of their application aad the
lack of agreement among the scientific
community about degrees of. toxidty of
                                       specific hazardous substance* and
                                       syaargutic effects. Also, toxidty is
                                       usually causally related to tha coat of
                                       cleanup for only a few aahatanoa* (*.$>
                                       PCBa, dioxin).
                                         Still the allocation process presented
                                       bare is not intended to be exclusive,
                                       There will of course, be cases where
                                       other factors, such as toxidty or
                                       mobility, must take priority in tha
                                       interests of fairness to the parties. If a
                                       Region prefers to use another allocation
                                       process, it should confer with tha
                                       Director of the Office of Waste
                                       Programs Fjirm cement prior to such use.
                                         Activities involved in r""in''*inf. an
                                       NBAR fall into two major categories:
                                       Information collection aad assessment
                                       §n^ allocatioa.
                                       Information Collection and Autuamnt
                                         While aggreseive'infonaatton
                                       collection efforts occur in every case.
                                       additional information may be
                                       necessary for NEAR purposes.
                                       Additional information on actual volume
                                       and specific wastes with respect to each
                                       PRP at an NBAR site may be required.
                                         Section 12(e)(3)(B) of SARA
                                       authorizes EPA to subpoena witnesses
                                       and documents. Section 104{e) of
                                       CERCLA. as amended by SARA.
                                       authorizes EPA to obtain access to
                                       information about a parson's ability to
                                       pay and about the nature and quantity
                                       of hazardous substances generated.
                                       treated, stored or diapoaed of by that
                                       person. These authorities may be used
                                       to gather data for aa NBAR.
                                         Subpoena of witnesses, authorized by
                                       section 122 (e)(3)(B). may be used in
                                       some cases as part of the information
                                       collection process. Considerable case-
                                       specific judgment must be exercised
                                       about the extent to which the subpoena
                                       authority will be uaad due to its
                                       resource-intensive nature.
                                         Information being collected must be
                                       reviewed by technical and legal staff as
                                       it U received so that pertinent
                                       information may be culled *"rf gaps aad
                                       iaconaiatanciae identified. Collection

                                       completed by tha aad ol tha RL to that
                                       the allocation caa be completed by the
                                       end of the FS.
                                         On the basis of Information collection
                                       determine tha waste types aad volumes
                                       tat each PRP. Tata wtamaWe ranking is
                                       part of the fadonaa DOB that must be
                                       proridad with a pie cleanup negotiation
                                       special notice letter.
                                        Tha legislative history of section 122
                                       states that the allocation itaetf should be
                                       made by federal amptoyeee, Consultant*
                                       or states with cooperative agreements
                                       nay assist m the teformation gathering
                                       and aasesamant phase of the allocation
process. The allocation phase of en
NBAR caa be moat affectively
uadartakan by the same technical
legal .personal who directed the
information collection »ni1 asteesi
efforts.

Allocation

  In most cases, waste at a site is
commingled aad therefore indivisible.
mmminglaH waste cases, the first step
ia the allocatioa phase of aa NBAR is
allocate 100 percent of responsibility
among generators, based on the velum
each contributed. The product of this
•tap will often differ from the volumec
ranking provided with special notice
letters because any waste that is
attributable to unknown parties is
allocated to known parties in proportic
to their volume.
  In a limited number of cases. It 1*
possible to link particular remedial
activities with specific wast* types an<
volumes. For example, in the easy but
rare case of divisible waste, the cost o
removing barrels from a warehouse on
larger site can be separately attributed
to the contributors of the barrels. Or. t
cost of incinerating soil contaminated
solely by PCBs caa be attributed to PC
contributor*. Where it is poeaible to dc
so, wast* type* aad volumes that
necessitate particular remedial activi^
will be fully attributed to the
appropriata contributors.
  Tha second step m the allocatioa
phase of the NBAR process involve*
adjustments based on consideration of
the  settlement criteria. Any percentage
'allocated to a defunct or impecunious
party should be reallocated. Where
appropriata. credit may be given for ar
PRP contributions to RI/FS and/or
removal activities at the site.
  la addition, percentages of
responsibility should be allocated to
financially viable owners, operator* ai
treasportars. How much to allocate to
such parties I* a case specific decision
based upon consideration of tha
aettlemeat criteria.
  la ftaaftl owner/operator culpabili
la a «tg»«***-"« actor in determining th
percentage of raapoaaibillty to be
allocated. For example, a commercial
owner aad/or operator that managed
waste badly should receive a higher
allocation taaa a paseive.
aoncommerdal landowner that **"*f'
qualify aa innocent under section
122fjXlMcT) of SARA. The relative
allocation among successive owners
aad/or operators may he determined.
waata ail otaar circumstance* art equ;
by the relative length of time each
owned aad/or operated tha site.
Traasportar allocations may be baaed

-------
                    FedaraJ Register / Vol. 52. No. 102 /  Thuraday. May 28.  1987 / Notices             19921
on volume, taking mlo account
appropriate considerations tucb ai
packaging and placement of wmjt« tt •
site. Detailed guidance on allocations
for transporters, owners, and operator!
may be prepartd at a latar data on tha
baaii of axperianoa under tht«t interim
fuidalion.
   Again, an NBAR will allocata 100
percent of response costs, because the
goal is to achieve 100 percent of cleanup
or cost* in settlement

IV. Offers Based oo NBAftS
   Once the technical and legal
personnel complete the NBAR. the
numerical results will be transmitted in
writing to PRPs. EPA will not provide a
detailed explanation for the results, due
to the enforcement-sensitive nature of
the decisions involved. EPA will provide
a general explanation of the rationale
used in preparing the NBAR. Data
gathered  in the information collection
phase may be made available to PRPs.
  EPA will provide the NBAR results to
PRPs as early as possible. The sooner
PRPs receive the results, the more time
they have to organize among themselves
and negotiate with EPA on remedy. A
limited period should be provided for
PRPs to digest the NBAR results before
notice for deanup negotiations is sent.
  EPA will attempt to complete the
NBAR before selection of a preferred
remedy and public comment or at least
prior to the Record of Decision (ROD).
  Special notice under section
122(e)(2)(A) of SARA will generally be
provided  prior to cleanup negotiations in
cases where en NBAR is used. If within
60 days of special notice for deanup
negotiations. EPA receives no offer for
settlement it may proceed as usual with
action under section 104 or 106 of
CERCLA. If EPA receives an offer that is
not a substantial/good faith proposal it
should so notify the PRPs before
proceeding with action under section
104 or 106.
  A good faith offer is an offer in writing
in which PRPs make a showing of their
qualifications ""1 willingness to
conduct or finance the major elements
of the remedy. A substantial offer must
meet three criteria. First it must equal or
exceed the cumulative allocated shares
of those making the offer. Second, it
must amount to a predominant portion
of deanup coat*. Third, it must be
acceptable to EPA in regard to all other
terms and conditions, such as release
provisions or dispute resolution
mechanisms.
  If EPA receives a substantial/good
faith offer within 60 day* of special
notice for deanup. EPA will provide an
additional 60 days for negotiation. If an
agreement for remedial action is
 reached. It must be embodied in a
 consent decree. The State should be
 kept appnsed of negotiations if it
 chooses not to participate. Should
 negotiations for settlement based on an
 NBAR fail a section 106 unilateral order
 or civil action may be used to initiate
 remedial action. Should EPA proceed
 with deanup under section 104. the
 NBAR may still be useful in developing
 demand letters for a section 107 cost
 recovery action.
  D» minimi* and mixed funding
 settlements, also authorized by section
 122. may occur in combination with aa
 NBAR. Whether EPA win accept a
 mixed funding or de minious proposal at
 an NBAR site will depend on the results
 of additional analyses specifically
 designed to evaluate such proposals.
  If EPA rejects a substantial/good faith
 offer, it must provide a written
 explanation to the PRPs. after
 consultation with DO) and review at
 EPA Headquarters. In general, rejection
 of a substantial offer that is sufficient in
 amount is likely to be based on failure
 to reach agreement on terms and
 conditions. After a written explanation
 for rejection of a substantial/good faith
 offer is tent EPA may proceed under
 section 104 or 106.
 [FR Doc 87-12114 FUtd S-Z7-47: 8:45 am]
[OTTS-140074A; WL-MOt-1]

Toxic and Hazardous Substances
Control; Contractor and Subcontractor
Aeeaaa to Confidential Buainaaa
Information
      r. Environmental Protection
 Agency (EPA).
 ACTIO«C Notice. _

 SUMMAMT: EPA has authorized several
 contractors and subcontractors for
 access to information submitted to EPA
 under venous sections of the Toxic
 Substances Control Act (TSCA). Some
 of the information may be claimed or
 determined to be confidential business
 information (CBI).
 POM nNrmm MPOMSAYION CONTACT:
 Edward A. Klein. Director. TSCA
 Assistance Office (TS-7W). Office of
 Toxic Substances. Environmental
'Protection Agency. Room E-543. 401 M
 Street SW, Washington. DC 20460 (202-
 554-1404).
 iumjMiKTAHv asPomunoM: Under
 TSCA. EPA must determine whether die
 manufacture, processing, distribution in
 commerce, use, or disposal of certain
 chemical substances or mixtures may
 present an unreasons We risk of in jury to
 human health or the environment New
         substances. Le. those not
listed on the TSCA Inventory of
Chemical Substances, are evaluated by
EPA under section 5 of TSCA. Existing
chemical substances, listed on the TSCA
Inventory, are evaluated by the Agency
under sections 4.6.7. and 8 of TSCA.
Section 12 requires « person to report
his or her intent to export certain
ciemicsJ substances to foreign
countries.
  In accordance with 40 CFR 2468(1),
EPA has determined that  the following
contractors and subcontractors will
require access to CBI sjsfcejkittad to EPA
under TSCA to successfully perform
work under the contracts  described in
the following units of this notice.
L Previously Announced Contract

  As was announced in the Federal
Register of May 1.1966 (FR 16205). the
Dynamac Corporation. 11140 Rockville
Pike. Rockville. Maryland, is authorized
for access to CBI submitted to EPA
under sections 4 and 8 of TSCA. EPA is
issuing this notice to extend Dynamac's
access to TSCA CBI under EPA Contract
No. 66-02-4251 to February 28.1989.

n New Contractor* and Subcontractors

  Access to CBI by the contractors and
subcontractor* described in this section
is being announced for the first time.
EPA is issuing this notice to affected
businesses informing them thst EPA
may provide access to TSCA CBI to
these contractors and subcontractors
under the indicated contracts on a need*
to-know basis.
  Under.EPA Contract No. 68-01-7282.
subcontractor CRC Systems.
Incorporated. 4020 Williamsburg Court
Fairfax Virginia, will assist the Office of
Toxic Substances'  Information
Management Division in performing
work under delivery  order MCCS17—
PENTA Analysis and Design Evaluation.
CRC as a subcontractor, will be
working for the prime contractor.  Booz
Allen and Hamilton.  Booz. Allan and
Hamilton will not require access to
TSCA CBI under this contract CRC will
not conduct substantive review of any
TSCA CBI; however. CRC personnel will
require access to CBI on computer
screens in order to evaluate technical
aspects of computer programs to
perform contract tasks. In addition.
personnel will occasionally be required
to review CBI documents to compare
hardcopy data for  those data elements
contained in the systems. The systems
to be accessed an PENTA, Molecular
Access System (MACCS). and the
Document and Personnel  Security
System (DAPSS). Under this contract
CRC personnel will be authorized for

-------
®
 x«^
            UNITED STATES EN VmONMCNTAi. WOTECTIOH AfitTNCY
                                                     OSWER Directive 9833.3

                             MT 29  B8T7
                                                            OMICI or
                                                   •OLIO WATT! AND IMIMOINCV NMPONM
     MEMORANDUM
                                            a^Ufense
SUBJECT: Administrative Records for Decisions on Selection of
         CERCLA Response Actions

FROM:    Gene A. Lucero, Director
         Office of Waste Programs

         Henry L. Longest II, Director
         Office of Emergency and RemediaVffc'tt'nse (HB-548)

TO:      Addressees


     AS you are aware, section 113(k) of the Comprehensive Environ-
mental Response, Compensation, and Liability Act (CERCLA), as
amended by the Superfund Amendments and Reauthorization Act (SARA),
requires that the Agency establish administrative records containing
information used by the Agency to make its decision on selection
of response action under CERCLA.  Section 113 also requires that
the records be kept "at or near the facility at issue.*"  This
memorandum is to inform you of steps which must be implemented by
the Regions immediately to assemble administrative records, if
not already done.

     As the section 113 requirement for the establishment of
records is in effect, the Regions should ensure that information
on selection of a response action is assembled now, and is avail-
able for public, including potentially responsible party, review
both in the Regional Office and "at or near the facility at
issue."  This requirement applies to all sites for which a remedial
investigation has begun.  It also applies to removal actions
where an Action Memorandum has been signed or public comment has
been solicited.

     This administrative record consists of information upon
which the Agency bases its decision on selection of response
action.  It is a subset of information included in the site file.
The site files will contain information on potentially responsible
party liability and cost documentation, for example, which is not
included in the administrative record.  The administrative record
will also overlap with the community relations information in the
information repositories, the Federal facility docket, and the

-------
                                                     OSWER Dir«ctiv« 983
                             -2-
NPL listing docket.   A separate memorandum coneerntnn  setting up
site  f ilesr'*fi3~Tong term management of administrative  records
is under development.  At this  time, as you assemble and
reproduce administrative records, vou should keep other records
management matters  in mind.
     Three million dollars were available in contract
for records management in FY  '87, some of which is still available.
Additional funds averaging about SI 00 ,000 per Region have been
earmarked this fiscal year specifically to assist in setting up
administrative records.  The  Regions should submit a list of
priority sites at which they  will require assistance in compiling
a record, and an estimate of  the cost of such activities.  Top
priority should be given to those sites for which the Agency
will be signing Records of Decision (ROT)*) in this fiscal year,
and those for which a remedial investigation/ feasibility studv
(RI/FS) is currently available for public comment.  The next
highest priority includes those sites where a ROD has been signed
and the PRPs are not undertaking the remedial design (RD) or
remedial action (RA) ; sites where a RI/FS workplan is available;
and sites where a removal action is underway.  Third priority
sites are those where a ROT) has been signed and PRPs are undertaking
the remedial design or remedial action.

     The Regions should also  list sites which presently have
funding for an administrative record.  A coordinator should
be designated in each Region  to manage the compilation of
priority sites and oversee the compilation of. these administrative
records.  Pleas* submit your  list of priority sites and contract
needs within two weeks to Linda Boornazian in OWPF.  She can he
reached at 382-4R3n.

     The Agencv plans to propose regulations establishing proce-
dures for the administrative  records.  These administrative
record regulations are expected to be issued in con 1 unction with
the proposed NCP revisions.   The upcoming proposed regulations
will serve as interim guidance under SARA for the creation of
adequate administrative records for response action decisions.
We have been working with representatives from the Regions on
these regulations^

     During eh* course of developing these regulations, numerous
policy leaves have surfaced.  These issues are currently being
addressed «t headquarters.  This memorandum will he followed
shortly by a •earorandum addressing issues related to the admini-
strative record requirements, in greater detail.  The upcoming
memorandum will summarize the Agency's current direction on these
administrative record issues. We will also be addressing the
administrative record requirements in the Super fund Record of
Decision Workshops in June and July of 1987, emphasizing information
on FY '87 RODs.

-------
                              -3-
                                                    OSWER Dirtctivt 9833.3
     Attached is a list of  items  vhiclv if generated  for  a
particular site,-should be_J.nciuded  f"7^ht nrtmtnlatfnM'ri" LLLULJ.
Please note that tirformation  upon which the decision  on selection
of  response action is based must  be  included  in  the record.

     The A£M»cy will be refining  this  list.   The upcoming memorandum
will go intSt Much greater detail  on  all aspects of the administra-
tive record.  Until then, the above  lists of  documents should be
used as an indication of information which should be  placed  in  the
administrative record.

     Please call Deborah Wolpe of  OWPE  at PTS 475-8235 if you
have any questions.

Attachment

Addressees:

    Directors, Waste Management Division, Reg. I, IV, V, VII, VIII
    Director, Emergency and Remedial Response Division, R«g. IX
    Directors, Hazardous Haste Management Division, Reg.  Ill, 71
    Director, Toxics and waste Management Division, Reg.  IX
    Director, Hazardous waste Division,  Reg.  X
    Regional Counsels, Regions I-X
    Superfund Branch Chiefs, Regions I-X
    Superfund Section Chiefs, Regions  I-X
cc: Lloyd Guerci, OWPE
    Russel wyer, HSCD
    Tim Fields, ERD
    Edward Reich, OECM
    Mark Greenwood, OGC
    Nancy Firestone, DOJ

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                             ATTACHMENT
 Documents for Removal  Actions*
               dat«**
 - Removal preliminary assessment
 • Sit* investigation report
 • Any otter factual data relating to reasons  why we  selected a
   particular removal action at the sit*
 - Chain of custody forms**
 - Engineering evaluations
 - Cost analysis  documents
 - Final data summary sheets of technical  models  used to  evaluate
   the site
 - Action Memorandum
 - ATSDR health assessment (draft versions not included)
 - Memoranda on major sit* specific policy and legal  interpretations
   (e.g. i off-site  disposal availability,  compliance  with other
   environmental  statutes/ special coordination needs,  e.g. , dioxln,
   provisions for State assumption of post-removal sit* control)
 - Information from telephone logs r*li*d  on  in selecting r*spons*
 - Mew technical  information presented by  PRPs during negotiations
 - Guidance documents and technical sources ***
 - Community Relations Plan
 - Public comments, if any
 - Responses to significant comments
 - Copies of any  notices, including notices to PRPs,  States, Haft oral
   Resources Trustees, notices of availability of information
 - Documentation  of meetings during which  the  public  and  PtPs pr*s*nt
   information upon which the agency bases its decision on selection
   of  a removal action (may be after-the-fact  restatement of issues rai
 - Administrative Orders
 - Consent decree (s), comments and responses  to comments  on the
   consent decree
 - Affidavits or  other sworn statements of expert witnesses
 - Amendments to  Action Memorandum, including  ceiling increase Action
   Memoranda, and Action Memoranda on technical changes;  information
   which caused the agency to change the decision, comments, and
   responses to comments
 *   Drafts  and  internal  memoranda are not included in the record
 unless  they contain information used to base the decision
 which the)  final  document does not contain,  or the decision-
.maker ehooaes  to base the decision on a draft document.

 **  QA/OC'd raw data (e.g., results of OC runs, chromatograms,
 mass spectra)  and chain of custody forms are part of the record  and
 available  to the public, but need not be in the same physical
 location as the  record  in the .Regional office or in the information
 repository at  or near the site.

 *** Guidance  documents and technical sources may be kept in a
 central compendium by the docket clerk.  They need not be in
 each site-specific record.  The index to the record should
 reference  titles of relevant guidance documents and technical
 sources.

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                                   Artn.nirar i^» with the State
  on the scop* of the removal action; comments from State, if any,
  and responses to substantive comments
- Index of documents in the record

(Expedited Response Actions should be treated like removals for
purposes of compiling an administrative record: for purposes of
the administrative record, RI/PSs should be treated as a phase
of a remedial action, and not a removal)

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                              -3-
Poeumeuls for" Rimed! a 1 Actions*

- Prelimil»«ry assessment report
- Site investigation report
- Any relswant removal documents  {if removal action completed or
  ongoing at site)
- QA/QC'd raw data**
- Data summary sheets (usually part of the FS)
- Chain of custody forms**
- OAPP
- Initial work plan and any amendments thereto
- RI/FS (final deliverable released for public comment)
- Any other factual data relating to reasons for selectinq the remedia
  action at the site
- Memoranda on site-specific major policy and legal interpretations
  e.g., off-site disposal availability
  Infor
- Information from telephone logs relied on in selecting response
- Guidance documents and technical sources ***
- Community Relations Plan
- Proposed plan and brief analysis of plan
- Feasibility Study (final deliverable released for public comstnt)
- Endangerment Assessment or other public health assessment
- ATSDR Health Assessment (draft versions not included)
- Copies of any notices, including notices to PRPs, States, Natural
  Resources Trustees, notices of availability of information
- Public comments (including a late comments section)
- Documentation of meetings during which the public and PRPs present
  information upon which the agency bases its decision on selection
  of a remedial action (may be after-the-fact restatement of issues
  raised)
- New technical information presented by PRPs durinq neqotiations
- Documents relating to State involvement (e.g., ARAR determinations,
  opportunity to comment on screening of alternatives, FS, proposed
  plan, selected remedy)
- Responses to substantive comments
- Transcript of required public meeting(s) on the proposed plan
*  Drafts and internal memoranda are not included in the
record unless they contain  information used to base the decision
which the final document does not contain, or the decision-
maker chooses to base the decision on a draft document.

**  QA/OC'd raw data (e.g., results of QC runs, chromatograms,
mass spectra) and chain of  custody forms are part of the record
and available to the public, but need not be in the same
physical location as the record in the Regional office or  in  the
information repository at or near the site.

***  Guidance documents and technical sources may be kept  in  a
central compendium by the docket clerk.  They need not be  in  each
site-specific record.  The  index to the record should reference
titles of relevant guidance documents and technical sources.

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       igrinding tr-a-t^****- off basis a-mrTJUr^ose of selected
  action; summary of alternatives considered; an explanation of
  why the Agency chose the preferred alternative; explanation
  of any statutory preferences under 512Kb) not met; Explanation
  of significant differences between the Proposed Plan and ROD
- Amendments to the ROD, information which caused the Agency to
  change its decision, comments and responses to those comments
- Relevant documents generated during a RCRA corrective action
  proceeding-at the site,  if applicable
- Administrative Orders
- Consent decree(s), comments and responses to comments
- Affidavits or other sworn statements of expert witnesses
- Interagency agreement (for federal facilities)
- Index to documents in record

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  .•*-;•%.

 f NHB^ } UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
 \4>We>y                WASHINGTON. DC. 20460

                              JUN - 5 196T
                                                            OSVER DIRECTIV

                                                               9829.2
MEMORANDUM

SUBJECT:  Enfry  and Continued Access  Under CERCLA

FROM:     Thomas L. Adams, Jr.     V  *          \     V Cl
          Assistant Administrator "^^srW^cXA^-l^  V\ . ^>> gi.gc «--^

TO:       Regional Administrators  I-X
          Regional Counsels  I-X


I.   INTRODUCTION

     This memorandum sets forth EPA's policy on entry  and
continued access to facilities by  EPA officers, employees, and
representatives for the purposes of response and civil enforce-
ment activities under CERCLA. I/   In  short, the policy recommends
that EPA should, in the first Instance, seek to obtain access
through consent.  Entry on consent is preferable across the full
range of onsite activities.  If consent is denied. EPA ehould
use judicial process o.r an administrative order to gain access.
The appropriate type of judicial process varies depending on
the nature of the onsite activity.  When entry  is needed for
short-term and non-intrusive activities, an ex parte.  judicial
warrant should be sought.  In situations involving .long-term or
intrusive access, EPA should generally file suit to obtain a
court order.

     The memorandum's first section addresses the recently amended
access provision in CERCLA.  The memorandum then sets  forth EPA
policy on obtaining entry and the procedures which should be
used to implement this policy, including separate discussions on
consent, warrants, court orders, and  administrative orders.
II  This policy does not address  information  requests under
~   Section 104(e)(2).

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                               - 2  -
II.  STATUTORY AUTHORITY

     EPA needs access to private property to conduct investiga-
tions, studies, and cleanups.  The Superfund Amendments and
Reauthorization Act of  1986  (SARA) explicitly grants EPA 21 che
authority to enter property  for each of these purposes.  Section
I04(e)(1) provides that encry if permitted for "determining che
need for response, or choosing or taking any response action
under  this  title, or otherwise enforcing che provisions of this
title."

     SARA also establishes a standard for when access nay be
soughc and defines what propercy may be entered.  EPA may exercise
its encry authority "if there is a reasonable basis to believe
there may be a release or chreac of a release of a hazardous
substance or pollutant or contaminant."  i 104(e)(1).  SARA,
however, does not require that chere be a release or threatened
release on  the property to be entered. 3/  Places and properties
subject to encry under Seccion 104(e) include any place any
hazardous substance may be or has been generated, stored, treaced,
disposed of, or cransporced  from; any place a hazardous subscance
has or may have been released; any place which is or may be
chreacened by che release of a hazardous subscance; or any place
where encry is needed co decermine che need for response or che
appropriace response, or co  effectuate a response action under
CERCLA.  i 104(e)(3).  EPA ia also auchorited co encer any place
or propercy adjacenc Co che  places and propercies described in
che previous sentence.  S 104(e)(1).

     EPA is granted explicit power co enforce ics encry auchoricy
in Seccion 104(e)(5).  Under chac provision EPA may eicher issue
an administrative order directing compliance wich an encry requesc
or proceed immediately co federal discricc courc for injunccive
relief.  Orders may be issued where consenc Co encry is' denied.
Prior co che effeccive dace  of che order, EPA muse provide such
notice and opporcunity for consultation as is reasonably appro-
priace under cbe circumscances.  If EPA issues an order, che
order can be enforced in courc.  Where there is a "reasonable
basis eo believe there may be a release or chreac of a release of
a hazardous.*s)«batance or pollucanc or concaainanc," courts are
inscrucced ttr enforce an EPA. requesc or order unless che EPA
2/  Although CERCLA and SARA confer authority upon the President
~   that authority has been delegated to the EPA Administrator.
Exec. Order No. 12580, I 2(g)  and  (i) , 52 Fed. Reg. 1923 (1987).

3/  The House Energy and Commerce  bill at one point contained
    this limitation.  H.R. Rep.  No. 99-253  Pare 1, 99th Cong,.  1st
Sess., 158 (1985).  This limicacixm, however, was dropped prior co
incroduccion of che bill for floor debate.  See H.R. 2817, 99th
Cong., Isc Sess., 131 Cong. Rec. H10857  (December 4, 1985).

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                               -  3  -


"demand  for entry or  inspection  is arbitrary and capricious, an
abuse  of discretion,  or  otherwise  not  in  accordance with law."
$ 104(e)(5).  The legislative history makes citar chat courts
should enforce  an EPA demand or. order  for entry if EPA's finding
chac there  is a reasonable basis to believe there nay be a release
or  threat of  release  is  not arbitrary  and capricious.  132 Cong.
Rec. SU929 (October  3,  1986)  (Statement of Sen. Thurmond); 132
Cong.  Rec.  H9582  (October 8, 1986) (Statenent of Rep. Glickman).
See United  States v.  Standard Equipment. Inc.. No. C83-252M (W.D.
Bash.  November  3, 1986).  In addition, a penalty not to exceed
$25,000/d*y nay be assessed by the court for failure to comply
with an  EPA order or  the provisions of subsection (e).

     Finally, Section 104(«)(6)  contains a savings provision
which  preserves EPA's power to secure  access in "any lawful
manner."  This broad  savings provision is significant cooing
in the wake of  the Supreae Court's holding that:

          When Congress  invests  an agency with enforce-
          ment  and investigatory authority, it  is not
          necessary to identify  explicitly each and every
          technique that t&ay be  used  in the course of
          executing the  statutory  mission.

          . . . Regulatory, or  enforcement author icy
          generally carries with it all the nodes of
          inquiry and investigation traditionally employed
          or  useful to execute the authority granted.

pov Cheeieal  Co. v. United States. 90  L.Ed. 2d  226, 234 (1986). ±)
One lawtul means of gaining access -covered by chic paragraph is ""
use of judicially-issued warrants.  See $• Rep. No. 99-11, 99th
Cong.  1st Sess. 26 (1985).

     In  nuaerous  instances prior to the passage of SARA, EPA
obtained court  rulings affirming its  authority  to enter property
to conduce  CERCLA activities.  5/  Following enactment of SARA.
4/ See al»o, Mobil  Oil  Corp.  v.  EPA.  716  F.2d  1187,  1189  (7th
"  rTr.TgfS).  cart,  jenied ..46OTS.  980 (1984)  (EPA authority
to saaple  effluent  under  Section 30.8  of the Clean Water Act
broadly conitrutd); CEDs.  Inc. v.  EPA.  745 F.2d  J092  (7th Cir.
1984), cert, denied.  471?.S.  IQISTT'SBS).

5/ United  States v. Pepper Steel and  Alloy. Inc.. No. 83-1717-
"  CIV-EPS (5.D. Fla. October i.0.  1966^;  gun*er  Liaited Partnership
v. United  States, No. 85-3133 (D.  Idaho October  21 .  i"5); united
States v.  Coleman Evans Mood  Preserving Co.. No.  85-211-CIV-J-lo
(M.P. Fla.  June 10. J.985); Un-ited  States "vT taird &  McCuire
Co.  No. 83-3002-Y  (D.'Mass.  hay 2,  1365); t/nieed Peaces  vvUnitee
Suelear Cor?.,  22 ERC 1791,  15  ELR 20443 (D.N.M.  April  18,  19T5;.

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                               - 4  -


several courts have ordered siteowners to permit EPA access.
United States v.  Long. No. C-l-87-167  (S.D. Ohio May 13, 1987);
United State* v.  Dickerson. No. S4-76-VAL (M.D. Ga. »M«y 4,  1987);
United States v.  Standard^Equipgient, Inc.. No. C83-252M (W.D.
Wash. Nov.37 198F7"!Further, the one adverse ruling on EPA's
right of  access  has been vacated by the Supreme Court.  Outboard
Marine Corp. v.  Thomas. 773 F.2d 883 (7th Cir. 1985), vacated.
93 L. Ed.  2d 695  (1986).

III.  EPA  ACCESS  POLICY

     EPA  needs access to sites for several types of activities,
including:

      0 preliminary site investigations;

      0 removal  actions;

      0 RI/FSs;  and

      0 remedial  actions.

Within each of these categories, the scope of  the work and the
time needed to complete that work may vary substantially.  This
memorandum sets  Agency policy  on what means should be used to
gain access over  the range of  these various activities.

     EPA may seek access through consent, warrant, administrative
order, or  court  order.  Consent is the preferred means of gaining
access for all activities because  it is consistent with EPA policy
of seeking voluntary cooperation from responsible parties and
the public.  In  certain circumstances, however, the Region should
consider obtaining judicial authorization or issuing an admini-
strative  order in addition to  obtaining consent.  For example,
where uncertainty exists whether a siteowner will continue to
permit access over an extended period, reliance on consent alone
may result  in a  substantial delay  if that content is withdrawn.

     When  consent is denied, EPA should seek Judicial authori-
zation or  amould  issue an administrative order.  If the judicial
route is  choaan,  EPA «ay seek  an ex parte warrant or a court
order.  Warrants  are traditionally granted for short-term entries.
Generally, warrants ahould not be  used when the EPA access will
involve long-term occupation or highly intrusive activities.
Clearly,  warrants art appropriate  for preliminary site investiga-
tion*.  On  the other hand, because of the long, involved nature
of remedial actions, access for such projects  should be sought
through a  request for a court  order.  Neither  removals nor RI/FSs,
however,  can be  rigidly matched with a givtn judicial access
procedure.  Depending on the activities to be  undertaken and  the
circumstances at the site, either  a warrant or a court order  may
be appropriate.

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                               •  5  -


      In deciding whether to use  a  warrant or A court order when
access is needed for a removal or  to conduce a RI/FS, the follow-
ing  general principles should  be considered.  First, if the
activity will take  longer than 60  days a court order normally is
appropriate.  Second, even if  the  activity will take less rhan 60
days, when the entry involves  removal of large quantities of soil
or destruction of permanent fixtures, a court order may again be
appropriate.  Finally, warrants  should not be used if EPA action
will  substantially  interfere with  the operation of onsite business
activities.  These  issues must be  resolved on a case-by-case basis.

     If EPA needs to gain access  for a responsible party who has
agreed to undertake cleanup activities under an administrative
order or judicial decree, EPA may, in appropriate circumstances,
designate the responsible party  as EPA's authorized representative
solely for the purpose of access,  and exercise the authorities
contained in Section 10A(e) on behalf of the responsible party.
Such  a procedure may only be used  where the responsible party
demonstrates to EPA's satisfaction that it has made best efforts
to obtain access.  A further condition on the use of this procedure
is that the responsible party agree to indemnify and hold harmless
EPA and the United States for all  claims related to injuries and
damages caused by acts or omissions of the responsible party.
The responsible party should also  be advised that the expenses
incurred by the government in gaining access for the responsible
party are response costs for which the responsible party is liable.
Before designating any responsible party as an authorized repre-
sentative, the Region should consult with the Office of Enforcement
and Compliance Monitoring.

IV. ACCESS PROCEDURES

     A.  Entry on Consent

          1. General Procedures

     The following procedures should be observed in seeking
content:

    Initial COPtact.  Prior to visiting a site, EPA personnel £/
    should cf«tider contacting the siteowner to determine if
    content will be forthcoming.   EPA personnel thould ute this
    opportunity to explain E?A~s accett authority, the purpose
    for which entry It needed, and the actlvltiet which will be
    conducted.
6/   At uted in thit guidance, the ter«  "EPA personnel" Includes
     contractors acting at EPA's authorized representatives.

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                               -  6  -
    Arrival.  EPA personnel should arrive ac the sice at a
    reasonable time of day under the circumstances.  In most
    instances this will mean during normal working hours.  When
    there  is a demonstrable need to enter a site at other times,
    however, arrival need not be limited to this timeframe.
    Entry  must be reasonable given the exigencies of the situation,

    Identification.  EPA personnel should show proper identifi-
    cation upon arrival.

    Request for Entry.  In asking for consent, EPA personnel
    should state the purpose for which entry is sought mnd
    describe the activities to be conducted.  EPA personnel
    should also present a date-stamped written request to the
    owner  or person-in-charge.  A copy of this request «hould
    be retained by EPA.  Consent to entry Bust be sought
    from the owner TJ or the person-in-charge at that time.

     If practicable under the circumstances, consent to entry
should be  memorialized in writing.  A sample consent fora is
attached.  Although oral consents are routinely approved by the
courts, a  signed consent form protects the Agency by serving as
a permanent record of a transaction which nay be raised as a
defense or in a claim for damages many years later.  If a site-
owner is unwilling co sign a consent form but nonetheless orally
agrees to  allow access, EPA should document this oral consent by
a follow-up letter confirming the consent.

     Since EPA contractors often are involved in gaining access
in the first instance, the Regions should ensure that their
contractors are acquainted with these procedures„

           2.  Denial of Entry

     If consent is denied, EPA personnel or contractors, before
leaving, should attempt to determine the grounds for the denial.
EPA personnel, however, should not threaten the siteowner with
penalties  or other monetary liability or make any ocher remarks
which could be construed as threatening.  EPA personnel may
explain EPA'a statutory access authority, the grounds upon which
this authority »ay be exercised, and that the authority may be
enforced in swart.
II  If EPA's planned site activities will not have a physical
"   effect on the property, EPA generally need not seek consent
from the owner of leased property where  the  Itssee is in pos-
session.  The proper person in.those circumstances is the lessee.
But where EPA entry will have a substantial  physical effect on
the property, both the lessee and the property-owner should be
contacted since in this instance interests of both will be
involved.

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                              - 7 -
          3.  Conditions Upon Entry

     Persons on whose property EPA wishes to enter often attempt
to place conditions upon entry.  EPA personnel should not agree
to conditions which restrict or impede the manner or extent of an
inspection or response action, impose indemnity or compensatory
obligations on EPA, or operate as a release of liability.  The
imposition of conditions of this nature on entry snould be treated
as denial of consent and a warrant or order should be obtained.
See U.S. EPA, General Counsel Opinions, "Visitors' Release and
Hold Harmless Agreements as a Condition to Entry of EPA Employees
on Industrial Facilities," Gen'l and Admin, at 125 (11/8/72).
If persons are concerned about confidentiality, they should be
made aware that business secrets are protected by the statute
and Agency regulations.  42 U.S.C. $ 9604(e); 40 C.F.R. f 2.203(b).
EPA personnel should enter into no further agreements regarding
confidentiality.

     B.  Warrants

          1. General Procedures

     To secure a warrant, the following procedures should be
observed:

     Contact Regional Counsel.  EPA personnel should discuss
     with Regional Counsel -the facts regarding the denial of
     consent or other factors justifying a warrant and the
     circumstances which give rise to the need for entry.

     Contact Department of Justice.  If after consultation with
     Regional Counsel a decision is made to seek a warrant, the
     Regional Counsel must contact directly the Environmental
     Enforcement Section in the Land and Natural Resources Division
     at the Department of Justice. 8/  The person to call at
     the Department it the Assistant: Chief in the Environmental
     Enforcement Section assigned to the Region.  The Assistant
     Chief will Chen arrange, in a timely manner, for the matter
     to be handled by either an Environmental Enforcement Section
     attorney or a U.S. Attorney.  The Region must send to the
     Environmental Enforcement Section, by Hagnafax or other
8/  This procedure  is necessary  to comply with  internal
~"   Department of Justice delegations of authority.  Referral
to a local U.S. Attorney's office  is not sufficient  for CERCLA
warrants.  The Environmental  Enforcement Section  of  the Department
of Justice must approve  all warrant applications.   (See Memorandum
from David T. Buente, Jr. to  All Environmental  Enforcement
Attorneys, "Procedures for Authorizing  Applications  for Civil
Search Warrants Under CERCLA"  (4/3/87)  attached).

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                              - 8 -
     expedited means, a draft warranc application and a shore
     memorandum concisely seating why the warranc is needed.

     Prepare Warrant Application.  The warrant application oust
     contain the following:

          1) a statement of EPA's authority to inspect;
             (see S II, 'supra)

          2) a clear identification of the name and location
             of the site and, if known, the name(s) of the
             owner and operator of the site;

          3) a statement explaining the grounds for * finding
             of a reasonable basis for entry (i.e., a reasonable
             basis to believe that there may be a release or
             threatened release of a hazardous substance or
             pollutant or contaminant) and the purpose for entry
             (i.e., determining the need for response, or choosing
             or taking any response action, or otherwise enforcing
             CERCLA);

          4) affidavits supporting the Asserted reasonable basis
             for entry and describing any attempts co gain access
             on consent, if applicable; and

          5) a specific description of the extent, nature, and
             timing of the inspection;

     Following preparation of the warrant application, the
     Justice Department attorney Vill file the' application with
     the local U.S. Magistrate.

     EPA nay .ask the Justice  Department attorney co ae-ek the
assistance of the United States Marshals Service in executing the
warrant where EPA perceives a danger  co che personnel executing
the warrant or where there is che possibility chat evidence will
be destroyed.

          £•> seasonable Easis for En cry

     A warrant for access on*a civil natter nay be obtained upon
a showing of a reasonable basis  for entry.  This reasonable
basis nay be established either by presenting specific evidence
relating to che facility co be entered or by demonstrating that
che encry is pare of a neucral administrative inspection plan.

     A specific evidence standard  is  incorporated  in  SARA  as a
condition on EPA's exercise of its access authority:   EPA  nust
have "a reasonable basis co believe  chere nay be a release or

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                               -  9  -


 threat of a release of a hazardous substance or pollutant or
 contaminant."  $ 104(e)(1).  SARA's express specific evidence
 standard is consistent with how courts have formulated the
 specific evidence test in  the  absence of statutory guidance.
 E.g.. West Point-Pepperell. Inc. v. Donovan.  689 F. 2d 950,  958
 (1Tth Cir.1982)(tnere must be a  "snowing of specific evidence
 sufficient to support a reasonable suspicion of a violation").

     In drafting a warrant application, conclusory allegation*
 regarding the specific evidence standard under subsection 104(e)
 will not suffice.  Courts  generally have refused to approve
 warrants where the application contains mere  boilerplate asser-
 tions of statutory violations.  Warrant applications have been
 granted, on the other hand, where  the application contained
 detailed attestations by government officials or third-party
 complaints which have some indicia of reliability.   Ideally,
 EPA warrant applications should contain an affidavit of a person
 who has personally observed conditions which indicate that there
 may be a release or threat of  a release of a hazardous substance.
 If they are available, sampling results, although not required,
 should also be attached.   Warrant  applications based on citizen,
 employee, or competitor complaints should include details that
 establish the complainant's credibility. 9/

     C.  Court Orders

     The provisions in CERCLA  authorizing EPA access nay be
 enforced by court order.   To obtain a court order for entry, the
 Region should follow the normal referral process.  If only access
 is .required,  the referral  package  can obviously be much abbrev-
 iated.  If timing is critical, EPA HQ will move expeditiously
 and will refer the case orally if  necessary.   The Regions, how-
 ever, should attempt to anticipate the sites at which access may
 prove problematic and should allow sufficient lead tine for  the
 referral process and the operation of th* courts.  The Regions
 should also not enter lengthy  negotiations with landowners over
 access.  EPA and DOJ are prepared  to litigate aggressively to
 establish EPA's right of access.
9/  If information gathered  in a civil investigation suggests
~"   that a criminal violation nay have occurred, EPA personnel
should consult the guidance  on parallel proceedings.  (Memorandum
fron Courtney Price to Assistant Administrators et al. , "Policy
and Procedures on Parallel Proceedings at che Environmental
Protection Agency" (1/23/84)).  Us« of CERCLA'• information-
gathering authority in criminal investigations is addressed in
separate guidance.  (Memorandum from Courtnty M. Prict to Assistant
Administrators et al., "The  Use of Administrative Discovery
Devices in the Development of Cases Assigned to the Office of
Criminal Investigations" (Z/16/84)).

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                              • 10 -
     Prior to seeking a court order, EPA should request access,
generally in writing, and assemble the record related to access.
The showing necessary to obtain a court order is the sane as for
obtaining a warrant:  EPA muse show a reasonable basis co believe
chat there may be a release or a chreat of a release of a hazardous
substance or pollutant or contaminant.  An EPA finding on whether
there is reason to believe a release has occurred or is about to
occur must be reviewed on the arbitrary and capricious standard.
§ 104(e)(5)  (£)(i).  If the matter is not already in courc,  EPA
must file a complaint seeking injunctive and declaratory relief.
Simultaneous to filing the complaint:, EPA nay, if necessary,
file a motion, supported by affidavits documenting the release
or threatened release, requesting an immediate order in aid  of
access.  If the matter is already in litigation, EPA may proceed
by motion to seek an order granting access. 107

     In a memorandum supporting EPA's request for relief it
should be made clear that by invoking judicial process, EPA  is
not inviting judicial review of its decision to undertake response.
action or of any administrative determinations with regard to the
response action.  Section 113(h) of SARA bars judicial review
of removal or remedial action except in five enumerated circum-
stances.  A judicial action to compel access is not one of the
exceptions.   Statements on the floor of the House and the Senate
confirm that EPA enforcement of its access authority does not
provide an opportunity for judicial review of response decisions.
Senator Thurmond, chairman of the Judiciary Committee, remarked
that when EPA requests a court to compel access "there is no
jurisdiction at that tine to review any response action . .  .
j_0/  Parenthetically, it should be noted that the broad equitable
     power granted to courts in Section 106 can also be relied
on to obtain a court order.  An additional source of authority
for courts in this regard is the All Writs Act., 28 U.S.C. S 1651.
The Act authorizes federal courts to "issue all writs necessary
or appropriate in aid of their respective jurisdictions . . .  ."
28 U.S.C. S 1651.  This authority ''extends under appropriate
circumstance*, to persons who, though not parties to the original
action or e^aged in wrongdoing are in a position to frustrate
the implementation of a court order . . . ." United States v.  New
York Telephone Co.. 434 U.S. 159, 174 (1977).  Thus, the All Writs
Act nay prove useful as a means of compelling persons not a party
to a consent decree to cooperate with EPA and other settling
parties in execution of the decree.  The use of the All Writs
Act, however, may be limited in light of the Supreme Court's
interpretation of the Act in Pennsylvania Bureau of Correction v.
United States Marshal Service. 8b L. Ed. Zd 189  (19b5).

-------
 [T]he court may only review whether the Agency's conclusion that
 there is a release or threatened release of hazardous substances
 is arbitrary or capricious."  132 Cong. Rec. S14929 (October 3
 1986) (Statement of Sen. Thurmond); 132 Cong. Rec. 119582     '
 (October 8, 1986) (Statement of Rep. Glickman); see United States
 v. Standard Equipment.  Inc.. No. C83-252M (W.D. Sash. Nov" 3,  1986).

     D. Administrative  Orders

     If a siteowner denies an EPA request for access, EPA may
 issue an adminstrative  order directing compliance with che
 request.  S 1 04(e)(5)(A).  Each administrative order must include
 a finding by the Regional Administrator chat there exists a
 reasonable belief that  there may be a release or threat of release
 of a hazardous substance and a description of che purpose for che
 entry and of the activities to be conducted and their probable
 duration.  The order should indicate the nature of the prior
 request for access.  Further, the order should advise Che re-
 spondent chat the administrative record upon which the order was
 issued is available for  review and thac an EPA officer or employee
will be available co confer with respondenc prior Co Che effeccive
 dace of che order.  The lengch of che cine period during which
such a conferences may  be requesced should be reasonable under
 che circumstances.  In  deciding what is a reasonable cine period,
consideracion should-be given co che incerference access will cause
with onsite operations,  the -threat co human healch and che environ-
ment posed by the site,  and the excenc of prior concaccs wich che
 respondenc.  The order  should advise che respondenc that penalcies
of up co $25,000 per day may be assessed by a courc againsc any
parcy who unreasonably  fails co comply wich an order.  S 104(e)(5).
 Following che time period for che conference and any conference,
 Che issuing official should send a document co the respondenc
summarizing any conference, EPA's resolution of any objeccions.
and scacing che effeccive dace of che order.

     If. following issuance of an adminiscracive order, che sice-
owner continues co refuse access co EPA. che order may be enforced
 in federal swart.  EPA  should noc use self-help co execuce orders.
 Ceurcs art required co  enforce adminiscracive orders where chere
 is a reasonable basis co believe chac chere may be a release or
 chreac of a release of  a hazardous substance.  EPA's decerminacion
 in chis regard ausc be  upheld unless ic is arbicrary and capricious.
 S 104(e)(5)(B)(i).  L7A will seek penalcies from chose parties who
unreasonably fail co comply wich orders.

     All adminiscracive orders for access must be concurred on by
che Office of Enforceraenc and Compliance Monicoring prior co
 issuance.

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                              - 12- -
DISCLAIMER

     The policies and procedures established in chis document are
intended solely for the guidance of government personnel.  They
are not intended, and cannot be relied upon to create any-rights,
substantive or procedural, enforceable by any party in litigation
with the United States.  The Agency reserves Che right co act at
variance with these policies and procedures and to change Chen at
any time without public notice.


Attachments

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                CONSENT FOR ACCESS TO PROPERTY
Name
Address of Property:
     I consent co officers, employees, And authorized
representatives of the United States Environmental Protection
Agency (EPA) entering and having continued access to ay
property for the following purposes.-

     [the taking of such soil, water, and air samples as may
      be determined to be necessary;]

     [the sampling of any solids or liquids stored or disposed
      of on site-, ]

     [the drilling of holes and installation of monitoring wells
      for subsurface investigation^

     [other actions related to the investigation of surface or
      subsurface contamination-,]

     [the taking of a response action including . . . .]

I realize that these actions by EPA are undertaken pursuant
to its response and enforcement responsibilities under the
Comprehensive .Environmental Response, Compensation and Liability
Act (Superfund). 42 U.S.C. S 9601 et seq.

     This written p«r«i«sion i« givtn by at voluntarily with
knowlege of my right to refuse and without tnreats or promises
of any kind.
    Date                                 Signature

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     Procedures for Authorizing Application
     for Civil Search Warrant* Under CERCLA
April 3, 1987
To
     All EES Attorneys
  Buente, Jr.
Ervironaental
       Saction
             Undar i 104(a)  of CERCLA,  as amended by  SARA,  the
   Unitad  statac aay seeX acceas by warrant,  edainistrative  order,
   or court ordar.  If access i» obtainad by administrative ordar,
   tha appropriata docuaents ara issued by ralavant eliant  agencies.
   If accacc is to ba obtainad by court ordar,  than tha Assistant
   Attornay Canaral of tha Land and Natural Resources Division Bust
   approva tha coaplaint,  upon rafarral fro* tha ralavant eliant
   agancy according to ordinary procaduras.  For aeeass to  ba sought
   through application on  a civil CERCLA warrant,1 tha instant
   •aaorandua will confirm tha proeaduras to ba usad  by tha
   DapartBant of Justica.

             Undar 15.320-X-2 of tha U.S. Attorney's  Manual,
   application for warrant undar CERCLA Bay not ba handlad
   unilaterally by tha U.S.  Attornays.   Applications  for such
   warrants Bust ba coordinatad through tha Environaental
   Enforcaaant Saction.

             Claaranca through tha Environaental Enforceaent  Saction
   is iaportant for a variaty of raasons.  First,  tha natura  of tha
   govarnaantal activitias involvad undar CERCLA civil warrants Bay
   ba such broadar and last considerably longer than  an inspection
   undar  the other federal anvironBental regulatory statutes.
   Typically the latter require only a  few days or weeks to conduct
   routine environBental sampling.   Undar CERCLA,  access Bay  ba
   •ought under a warrant  for not only  sampling,  but  even simple
        1  The Beaorandua does not cover procedures  for  seeking a
  criminal  search warrant where a CERCLA violation  Bay  be
  involved.  All  such Batters are to be referred to the Director,
  Environmental Crimea Unit,  EES.

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                               • 2 -

 reBOval-type activity,  e.g.,  security/fencing.  United drum
 removal.   The greater relative complexity of  the governmental
 activity  involved can be  expected to provoke  sore challenges to
 CERCLA civil warrants than  those under other  statutes and the
 issues raised by CERCLA warrants Bay be much  more complex.
 Second, this is a relatively  new and vital area of the lav.  He
 Bust ensure  that maximum  efforts are Bade to  develop this
 critical  area of the  lav  in an excellent  Banner.  EES lavyers
 aust Bake all reasonable  efforts to ensure that exercises of the
 civil warrant authority under CERCLA will be  vindicated by the
 federal courts,  through proper presentation of facts end legal
 arguments by Departmental attorneys with  experience in this area.
 Finally,  since our experience has shown that  judicial challenges
 to  civil  CERCLA warrants  tend to move very rapidly, sometimes on
 an  emergency motion basis,  EES needs to work  closely with client
 agencies  on  these Batters so  that the Division's Appellate
 Section is advised and  prepared with sufficient lead time to
 expeditiously address appellate proceedings.

           Coordinating  these  warrant applications through EES
 aust be done on an expedited  basis so that client agencies'
 program objectives are  achieved.   Moreover, our resources Bust
 not  be consumed by duplicative work.   Balancing the needs for
 careful warrant application preparations  with that for
 expeditious  handling  of these Batters,  we will use the following
 procedures:

           1.   The client  agency will telephonically notify the
 relevant  EES Assistant  Chief  or Senior Lawyer vhen the Agency
 plans to  seek a civil warrant.

          2.   The client  agency will follow-up the request by
 expeditiously transmitting  a  short BeBorandum concisely
 explaining why the warrant  is needed with a draft copy of the
warrant application and supporting affidavits.

          3.   Upon receipt  of the telephonic  notification or
written request,  whichever  first occurs,  the  EES Assistant Chief
 or Sr. Levyer will arrange  for either an  EES  staff attorney or an
AUSA to handle the review and prosecution of  the application.
Unless a  dispute develops ^between EES/AUSA personnel and the
client agency,  the EES  Assistant Chief or Sr. Lavyer Bay approve
the  application.   If such*a dispute develops, it Bust be brought
to the attention of the Chief or Deputy Chief, CIS for
resolution.

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                              - 3 -
          4.  Handling of these tatters is to b« afforded
priority on our docket.  Moreover, the Chief or Assistant Chi«f
of the Appellate Section shall b« advised of each application
request by the EES Assistant Chief or St. Lawyer as soon as
possible after notification by the client agency, so that
Appellate can be prepared to handle expeditiously appeal Batters.

          5. All civil actions to mntorc* civil CERCLA warrants,
by way of application for civil contempt or other judicial
orders, shall be authorised in writing by the Assistant Attorney
General. Such actions shall be afforded highest priority on the
docket.

          For general advice/guidance on handling CERCLA civil
warrant natters, contact John Fleuchaus, ORCM-Waste, 382-3109.
Attachment

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                                                          9832,9
             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                         WASHINGTON, o.c. 20*«o
                         I IN I 9 WS7

MEMORAKDOM
                                                              or
                                                 *OLIO MArri AND IMIMCCNCY ACSPONSC
SUBJECT:  Cost Recovery Actions/Statute of Limitations

PROM:     Gene A. Lucero, Director (jlfoJL  n*
          Office of Waste Programs Enforcement

TO:       Directors, Waste Management Division,
          Regions I, iv,v,vn, VIII

          Director, Emergency and Remedial Response Division,
          Region XX

          Directors, Hazardous Waste Management Division,
          Regions XXX, VI

          Director, Toxic and Waste Management Division,
          Region IX

          Director, Hazardous Waste Division, Region X

     The purposes of this memorandum are to:

     1.   Update EPA's policy on timing of cost recovery Action  (This
          memorandum supersedes Timing of Cost Recovery Action, G.
          Lucero, October 7, 1965).

     2.   Request that you bring your personal attention to the
          accuracy of data being used to brief congress on the status
          of cost recovery-efforts at sites.

     3.   Request the initiation of cost recovery action for those
          sites where the statute of limitations date is approaching.

     It remains the Agency's goal, where appropriate, to seek recovery
of all monies expended at Superfund sites.  Moreover, to promote cost
recovery and obtain interest, the Agency will transmit demand letters
as esrly as practicsble.  Additional guidance on the timing and  content
of demand letters, including guidance on maximizing interest, will be
sent in the near future.

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                                                           9832. 9
I.  Timing of Cost Recovery

     Section 113(g)(2) of the Comprehensive Environmental Response,
Compensation and Liability Act  (CERCLX), as amended by the Superfund
Amendments and Reauthorization Act  (SARA), contains specific provisions
on the statute of limitations for cost  recovery actions under section
107.  This memorandum does not set  forth the statute of limitations for
pre-SARA response actions.  Section 113(g) requires that cost recovery
actions be commenced:

     A.   for removal actions, within three years after completion of
          the removal action.  Where the Agency has made a deter-
          mination to grant a waiver under section  104(c)(l)(C) for
          continued response action, the cost recovery action must be
          brought within six years  after  this determination; and

     B.   for remedial actions, within  six years after the initiation
          of physical on-site construction of the remedial action.  If
          the remedial action is initiated within three years after
          completion of the removal action, the removal costs .may be
          recovered under the remedial  action statute of limitation*
          for cost recovery  (i.e. within six years after the initiation
          of on-site construction of the remedial action) .

     The term "commenced" as used in section 113(g) means a
filed section 107 cost recovery action.  As a matter of policy, the
Agency views completion of the removal  action as the day the cleanup
contractor demobilizes at the site  and  completes the scope of work
identified in the original or modified  action memorandum.  The final
Pollution Report (POLREP) submitted by  the OSC normally contains this
information.  (See Superfund Removal Procedures, Revision #2,
August 20, 1964).  Remedial investigations/feasibility studies  (RX/FS)
may fall within the statutory definition of'removal action.  For
purposes of cost recovery they should be treated as a separate removal
action.  Therefore, a cost recovery action should be commenced within
three years of completing the original  removal  (exclusive of the RX/FS)
unless phys-i-o*l on-site construction has started.

     Although section 113(g)(2)(A)  of CERCLA, as amended, allows three
years from completion of a removal  to initiate cost recovery action, it
still remains our policy to begin cost  recovery activity within one
year after completion of the removal.   For remedial actions, Agemcy
policy requires that cost recovery  activity be initiated within 18
months after the signing of the Record  of Decision  (ROD) or during the
later phase of construction of the  remedial action, if the construction
is expected to take more than two years after the ROD is signed.
Adherence to these time frames will ensure that current, not stale,
evidence and knowledgeable witnesses will be available to support the
prosecution of the action and that  the  Agency will  not be faced with
statute of limitation risks.

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                                                            9832*9
     At this point it is appropriate to clarify the Agency's position
on priorities for removal cost recovery referrals.  Due to the resource
commitment of litigation, the Agency has established that cost recovery
cases where the costs exceed $200,000 should take priority for
referral.  There is no prohibition on referring cases under 5200,000.
However, the judicious use of limited resources dictates that the
Agency first address those sites which promise a better return on  the
Agency's tine and money investments.  Where appropriate, eases under
$200,000 have been and should continue to be referred.   Selection  of
cases for referral is a Regional determination which should be based on
a variety of factors including strength of evidence, financial
viability of defendants and likely return to the Agency including
enforcement costs.

     Section 122(h) of CERCLA now provides the Agency with the
authority necessary to compromise claims for cost recovery actions
where the total of all response costs expended at a site is less than
$500,000.  This new authority should assist the Agency in addressing
the lower dollar value cases without litigation where an appropriate
settlement can be made.  The Agency is currently developing procedures
for settlement of claims under $500,000.

II.  Update of Information

     Attached for your review is information on completed removals for
each of your Regions.  Please review this information and, using the
comment field provided, indicate your schedule for referral of cost
recovery action.  Cost recovery actions may not be appropriate for some
sites:  for example, where no PRP can be identified, or where the  PRPs
are not financially viable.  If you do not intend to refer the case,
please note this fact.  Where you decide that cost recovery action is
inappropriate, you should explain the decision not to take cost
recovery action in a signed memorandum in your files.  You should
assume that there will eventually be audits of these cases, by
Headquarters, and perhaps the Inspector General and Congressional
Oversight Committee*.

     Please use the following categories when completing the comment
field for cites where actions will not be referred:

     1) No PRPs identified
     2) PRPs not financially viable
     3) Questionable evidence
     4) Questionable legal ease
     5) other  (specify)

     The accuracy and completeness of this information  is critical to
our ability to demonstrate the effectiveness  of EPA'a  cost  recovery
program.  The current data, which has been provided  in  response to
Congressional requests,  indicates  that EPA has initiated cost  recovery
efforts at only 29% of the completed  removal  sites.   (They  account for
approximately 52% of the available  obligations).   To the extent

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                                                       9832*9
information was available, the above figure on cases subject to cost
recovery was determined by subtracting from the universe of completed
removals, those where it appeared that cost recovery' is inappropriate.

     While we believe that our data base may not be current, the low
level of case initiation does point out the need for serious management
attention.  A rtftrral should be planned in this or next years
Superfund Comprehensive Accomplishments Plan (SCAP) and so indicated on
the attached reports.  Where action is not appropriate, it is critical
that the data base be adjusted to so indicate.   Please provide your
comments and schedule for activity on the attached material within two
weeks.

Ill.  Initiation of Actions

     If, after review of the attached site information, there are any
cases which require filing immediately or in the near future, please
•dvise OWPE, OECM and the Environmental Enforcement Section of the
Justice Department immediately, so that we may expedite the referral
and filing process.  All planned referrals should be incorporated into
the Integrated SCAP.

     We will provide you with updates of removal completions and
ongoing remedial actions  (similar to the attached charts) on a
quarterly basis for your review and comment.  We also solicit your
suggestions on the chart format and content.

     Any questions on this memorandum or the attached information may
be addressed to Janet Parella of my staff.  She may be reached on
PTS 382-2034.

ATTACHMENTS

cc:  Edward E. Reich, OECM
     David Buente, DOJ
     Regional Counsel*, Regions Z-X

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     } UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                     WASHINGTON. D.C. 20460
                          JUN 12 !987
MEMORANDUM                                       OSWER*  9833.2


SUBJECT:   Consent  Orders and the Reimbursement Provision
          Under  Section 106(b) of CERCLA
                                  (*&£& t^p
                                                 {**}-
FROM:     Gene A.  Lucero,  Director
          Office of waste  Programs

          Steven Leifer, Acting  Associate
            Enforcement Counsel  for Waste
          Office of Enforcement  and Compliance Monitoring

TO:       Addressees

     The Superfund Amendments and Reauthorization Act (SARA)
amended section 106 of  CERCLA to add  section 106(b)(2).
This provision entitles persons  to seek  reimbursement from the
Superfund for costs spent  in  complying with section 106 orders.
Congress included  the provision  as an incentive for PRP's to
take response actions even though they migh,t disagree with
EPA's unilateral order. It preserves their right to contest
issues of liability or  the nature of  the response action at a
later date.

     This memorandum provides guidance regarding terms of
consent orders to  preclude parties who have signed consent
agreements to subsequently seek  reimbursement under section
106(b)   To  assure that parties  to a  consent order or decree
do not *eek-reimbursement  by  contesting  issues of liability
in a l4t«r reimbursement proceeding,  consent orders should
contain a stipulation that the respondents) waives its right
to seek reimbursement under section 106.  For example:  "In
entering into this Consent Order, the Respondent waives any
right to seek reimbursement under Section 106(b)(2) of CERCLA
for any past costs and  costs  incurred in complying with this
order.*

     Reimbursement issues  under  SARA  will be addressed more
comprehensively in the  specific  guidance on the reimbursement
procedures,  and in revisions  to  the August 1983 guidance on
Administrative orders under $106.

-------
     If you have any questions please call Rich Hopen at
382-2035.

Addressees:  Directors, Waste Management Division,
               Regions I, IV, V, VI, vu, VIII
             Director, Air & Waste Management Division,
               Region II
             Directors, Hazardous Waste Management Division,
               Regions III, X
             Director, Toxic & waste Management Division,
               Region IX
             Regional Counsels,
               Regions I-X

-------
                                                                                          OSWER  *  9834.T

                    Fedarml  Register  / VoL 52. No. 125 / Tuesday. June 30. 1967 / Notices	24333
  Abttract: Petroleum refineries and
chemical manufacturers must limit
b«nsent emissions from MW and
exiating fugitivi amission sources.
Ownan and operaton must aubmit to
EPA one-time notifications for new
coiutruction. modification, and start-up.
They must also tubmit (ami-annual
report* of the number of valve*, pumps.
and comprestore for which leaks were
detected. EPA use* the collected
Information ai the basil for enforcement
actions as well as to spot trend* and
plan program strategies.
  Respondent* Chemical manufacturers
and petroleum refineries.
  Estimated Annual Burden: 91.087
hours.

Office  of Pesticides and Toxic
Substance*
TiUe: Household  Survey* of Chemical
  Product Usage  (EPA 1CR  »1200). (This
  is a renewal without revision of a
  currently approved collection.)
Abstract: These annual surveys will
  provide information on household use
  of common chemical products. From
  the results. EPA will derive exposure
  assessments for use in making
  regulatory decisions required by the
  Toxic Substances Control Act.
Respondents: Individuals and
  households.
Estimated Annual Burden; 800  hours.

Ageocy PRA Clearance Requests
Completed by OMB
EPA 1CR *O15& Pesticide Application
  Certification Form. Training and
  Examination of Applicators:  was
  approved 0/17/87 (OMB '2070-0029:
  expires 6/30/90).
EPA 1CR *0013. Trade Secret Clearance
  Justification for Pesticides, was
  extended 0/18/87 (OMB «2070-OOS3-
  expire* 9/30/87).
EPA 1CR «1160, NSPS for Wool
  Fiberglass Manufacturing (Subpart
  PPP)  Information Requirements, was
  approved 0/12/87 (OMB *2060-0114;
  expires 6/30/90).
EPA ICR *131S, Information Request for
  Development of NESHAP for
  Chromium Plating and Anodizing
  Operations, was approved 6/11/87
  (OMB '2060-0142 expire* 12/31/87).
EPA ICR 1362. NESHAP for Coke Oven
  Emissions from Wet-Coal Charged By*
  Product Coke Oven Batteries, was
  approved 6/15/87 (OMB «2060-0144:
  expites 6/30/90).
  Send comments on the above
abstract!*) to:
Patricia Minami. PM-23. U.S.
  Environmental Protection Agency.
  Information and Regulatory Systems
  Division. 401 M Street.  SW..
  Washington. DC 20460
      and
 Susan Dudley (ICR 1200) and Nicola*
   Garcia (ICR* 0840 and 1153), Office of
   Management and Budget Office of
   Information and Regulatory Affair*.
   New Executive Office Building. 728
   Jackson Place. NW.. Washington. DC
   20503
   Dated: )*a* 24.1M7.
 DeaW). FkMfaa.
 Director. Information and Regulatory Syttean
 Diviuan.
 |FR Doc. «7-l«aOO Filed 6-29-87: IMS am)
Acnosc Notice.
 Sdefice) Ao'vtsory
 Commrtte*; Open Meeting

 July n throush 22. 1987.

   Under Pub. L 92-463. notice is hereby
 given of s meeting of the Executive
 Committee of the Science Advisory
 Board on July 21 through 22.1967. The
 meeting will be held at the U.S.
 Environmental Protection Agency. 401 M
 Street SW. On July 21 the meeting will
 be held in the Administrator's
 Conference Room. 1101. The meeting
 will begin at fcOO ejn. and will adjourn
 at approximately &00 p.m. The meeting
 )nly 22 will be held in the North
 Conference Center Room « 3 from WX)
.a-in. to approximately 1230 noon.
   Issue* to be discussed at  the matting
 include: a status report of the  Board's
 review of scientific issues related to
 municipal waste combustion:  working
 relationships with the Science Advisory
 Panel: consideration of a request from
 the Deputy Administrator to form an
 indoor air panel: reports of committees
 and subcommitteer. and other issues of
 member interest
   The meeting is open to the public. Any
 member of the public wishing to attend,
 obtain information, or submit  written
 comments should contact Dr.  Terry F.
 Yosie. Director. Science Advisory Board
 or Mr*.  Joanna Foellmer located at 401
 M Street. SW. Washington. DC 20460 or
 call (202) 382-4126 by dot* of business
 July 16.1987.
   Dete& )UM M. 1M7.
 Teoy F.  Yeete.
 Seteaee Adritory Beard
 |FR Doc r-14801 Filed ft-a-47: 8*5 «m|
[Off 00148; «m««a4-»l
        n There will be a 2-day
meeting of the Slate FIFRA Issues
Research and Evaluation Croup
(SFIRECJ. The meeting will be open to
the public.
OATt Monday. July 20 and Tuesday.
July 21. 1987. beginning at 830 a.m. each
day and ending by 4 JO p-m. on Tuesday,
Julyn.
ADOttcs*: The meeting will be held ak
The Hyatt Regency. Crystal City. 2799
Jefferson Devis Highway. Arlington. VA,
(703-186-1234).
    warrHoi a»oi»*AT>o« CONTACT:
By mail: Philip H. Cray. Jr. Office of
  Pesticide Programs fTS-TeeC). 401 M
  St_ SW. Washington. DC 20460.
Office location and telephone number.
  Rm. 1115. Crystal Mall Building No. 2.
  Arlington, VA, (703-557-7096).
•UPtLfMINTAftY WPONMATIOK This will
be the twenty-seventh meeting of the
full Croup. The tentative agenda thus far
include* the following topics:
  1. Action Items from the March 1987
meeting of the SFIREC.
  2. Regional reports.
  3. Working Committee reports.
  4. Other topics which may arise.
  Dated: IUM S. isV.
nnejlii a Caatpt
Director. Office effettieidt Program*.
(FR Doc r.14670  Fued t-a-V: tM «m|
 Sttlt rirnA IsauM MtMsvcti sjnd
 EvsAtatton Group (SFmCQ); Opeti
 AOtMCT: Environmental Protection
 Agency (EPA).
Supcrtund «»roQrafn; De Mintmia
Contributor S«ttttm»ntt

AOKNCR Environmental Protection
Agency.
*cno»e Request for public comment

•uasaimrr The Agency is publishing
today its Interim Guidance on
Settlements with IV Minima Waste
Contributor* under section 122(g) of
SARA in order to inform the public end
to solicit public comment on this
important aspect of the Superfund
enforcement process. This document
provides guidelines for determining
which potentially responsible parties
("PRPs") under section 107(a) of the
Comprehensive Environmental
Response, Compensation, and Liability
Act of 1960 rCERCLA" <* "Superfund-).
as amended by the Superfund
Amendments and Reautnorization Act
of 19M rSARAl. may qualify for
treatment as de minimi* waste
contributors pursuant to section
122(g)(lHA) of SARA. It also provides

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24334
Federal  Register  / Vol. 52.  No. 125 / Tuesday.  |une 3a  1987 / Notice*
guidelines for negotiating with dt
minimit waste eontributon and for
entering into settlements with nek
parties pursuant to section 122(g] of
SARA.
  This publication does not address
qualifications for or MttltmenU with dt
minima landownen under section
IZZlgMUfB) of SARA, which will be
covered by separate guidance.
DATE Comments must be provided on or
before August n. 1M7.
Aoomta. Comments should be
addressed to Janice Linett. U.S.
Environmental Protection Agency.
Office of Enforcement and Compliance
Monitoring, Waste Enforcement
Division. LB-134S. 401 M Street. SW.
Washington. DC 20480. (212) 3M-3077.
•on svsmoot MPOwaumoN CONTACT
Janice Linett. U-S. Environmental
Protection Agency. Office of
Enforcement and Compliance
Monitoring. Waste Enforcement
Division. LE-134S. 401 M Street. SW.
Washington. DC 20460. (202) 382-3077.
sum*»jiMTAjiY INEOKMATIOM; Section
122{g) of SARA provides EPA with
discretionary authority to enter into
expedited, final settlement* with oe
mintmit waste contributors to
Superfund sites. Dt minims waste
contributors are those generator and
transporter PRPs who. in the judgment
of the Agency (as delegate* of the
President), contributed hazardous*
substances in an amount and of such
toxic or other hazardous effects as to be
minimal in comparison to other
hazardous substances at the facility.
Section 122(g)(l)(A). Pursuant to the
requirements of section 122(g)(l), dt
minimit contributor settlements must be
practicable and in the public interest, as
determined by the Agency, and must
involve only a minor portion of the
response coats at the facility concerned
with respect to aach settling party.
  Dt minimit contributor aetrtemsnts
under section 122(g) of SARA offer
potential advantages to PRPs and the
Agency alike. For dt minima pertiea.
such settlements can bt an effective
means of achieving an early and
equitable resolution of their liability
with the expenditure of reduced legal
fees and other transaction costs. For the
Agency, section 122(g) settlements
provide a means of simplifying the
CERCLA enforcement Dracoes throvgh
early elimination from litigation and
negotiations of the often numerous
minimal contributor PRPs. D* minimit
settlements also offer the potential for
increased numbers of voluntary
settlement agreements. This is because
dc. minimit contributors may be
                   attracted by in* advantages offered by
                   section lZ2(g) settlements, and non-de
                   minimit perties raey be encouraged to
                   settle as a result of the revenues raised
                   through such agreements.
                     To use the dt minimit settlement
                   provision most  effectively, the Agency
                   will focus on schieving settlements in
                   which multiple4? minima PRPs at a
                   particular site are "cashed out" under
                   one comprehensive agreemant'De
                   minimit parties should be encouraged to-
                   organize and present multiparty
                   settlement offers to the government
                   Further, to limit governmental and PRP
                   transastiM) costs, dt minimit
                   settlements should be  standardized in
                   form and should not be the subject of
                   lengthy negotiations.
                     In the typical dt minimit settlement.
                   the settling parties, in  exchange for a
                   payment, will receive  statutory
                   contribution protection under section
                   122(g)(5| of SARA and may be granted a
                   covenant not to sue where such a
                   covenant is consistent with the public
                   interest under section  122(g)(2). The
                   scope  of the covenant  not to sue will
                   vary depending upon the timing of the
                   settlement the  amount of information
                   available to the Agency about site PRPs
                   and response costs, the amount of any
                   premium payments recovered through
                   the settlement  and other relevant
                   considerations.
                     The Agency is aware that dt minima
                   contributor settlement* are the subject
                   of great interest to potentially
                   responsible perties and the public.
                   Therefore. EPA is publishing this interim
                   guidance to provide wide public
                   distribution of information on this
                   aspect of SARA implementation and to
                   gain the benefit of public comment EPA
                   will reevaluate this interim guidance
                   based upon its  experience with its
                   implementation and upon any public
                   comments that may be received.
                     The interim guidance follows.
                     Deled: law U.U»7.
  Rsefensl Cewmets
  RetKMsl WaM* Manefeownt Diviwor
                   Aetrng AstisMfif Admiaittntorfrr
                           nt onif Cemptiwice M
                     Dated: |unt 19. 10S7.
                   J. WavkMrForter.
                   Auiuant Ad.nitHitntor for Solid Waste
                   Subiect: Interim Cutianc* en SettlttnenM
                       with Of Minma Waste Contributes
                       •Oder Section t22tl) of SAItA
                   From: Eawsrd E. Reich. Acting Assistant
                       Administrator for Enforcement aad
                       Compliance Monitoring
                     |. Winston Porter. Assistant Administrator
                       for Solid Wane snd Emergency
                       Response
                   To: Regional Administrator*
June 19.MB7.

(.Purpose

  The purpose of this memorandum
provide interim guidance for
determining which PRPs qualify for
treatment as dt minimit waste
contributors  pursuant to section
122(g){lHA) of the Superfund
Amendments and Reauthorization A
of 1986 ("SARA"). Pub. L. No. 99-«9S
and to present interim guidelines for
settlement with such dt minimit par
pursuant to section 122Jg) of SARA.
Guidance on dt minimit landownen
under section 122(g)il)(B) of SARA *
be provided  by separate memorandu

IL Background

  When the  barm is indivisible.
generators and transporters of
hazardous substances disposed of at
facility are strictly and jointly and
severally liable for all costs of remov
or remedial action incurred by the
United States under section lOTJs) of
Comprehensive Environmental
Response. Compensation, and Uabili
Act of1980 rCEROA"). 42 U.S.C.
9807(s). as amended by SARA. Altho
this liability is not sututonly limited
the amount or type of hazardous
substance generated or transported U
the facility. Congress, in section
122(gHlHA) of SARA, recognized the
concept of the de minimit waate
contributor. LM- the potentially
responsible party ("PHP") who satiafi.
the requirements for liability under
•action 10T(aJ of CERCLA and who dt
not have a valid section \Oflb) defens
bat who has made only e minimal
contribution (by amount and toxidty)
comparison  to other hazardous
substance* at the site.
  Since the beginning of theSuperfuni
program, the Agency has been faced
with the problem of how to treal dt
minimit contributor PRPs. The legal fr
and other transactions costs of
negotiating and litigating with the
Government, compounded  by the
potential costs of asserting and
defending claims for contribution with
other PRPs at the site, often could
exceed the amount such minimal
contributors would be expected to pa\
even under s settlement or a judgment
unfavorable to them. As a result, dt
minimit parties often seek  a swift and
efficient means to pay a sum mot it
commensurate with their involvement
the site and allows them to be dismissi
from further negotiations and litigation
The Agency «lso needs s method for

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                     Federal Register  / Vol. Si.  No. 125  /  Tuesday, [tint 30. 1087 / Notices
                                                                     24S35
 achieving MttitmtflU with minimal
 wMit contributors in onto to make
 negotiations and litigation more
 ejanageeble.
   EPA formally recognized  and
 endorsed the concept of tht de minimi*
 contributor settlement in the Inttrin
 CERCLA Settlement Policy ("Settlement
 Policy-). SO PR 9034 (Feb. &. 19BS). The
 Settlement Policy advised that
 negotiations with de minima parties
 should focus on achieving cash
 settlements aad should be limited to low
 volume,  low toxicity diaposen who
 normally would not nuke • significant
 contribution to the costs of decamp in
 any event
   Section 122(tJ of SARA ' is in large
 pert a codification of the Agency's
 position  with regard to settlements with
 de minima parties. While recognizing
 the liability of such panics,  that section
 gives EPA discretionary authority to
 enter into expedited settlements with  de
 minima  waste contributors and dt
 minimi;  landowners. Section 122(g)(l)
 generally provides that when EPA
 determines that a settlement is
 -practicable and in the public interest*'
 the Agency shall, "as promptly as
 possible." seek to reach a "final"
 settlement with a tit minima PRP by
 consent decree or administrative order.
 if the settlement "involves only a minor
 portion of the response costs at the
 facility concerned." Section I22(g)[lj.  A
dt minimi* contributor settlement with a
 generator or transporter is authorized  if
 these criteria are met and if the Agency
determines that both "the amount of the
 hazardous substances contributed by
 that party to the facility." and "the toxic
 or other hazardous effects of the
 substances contributed by that party to
 the facility." are "minimal in comparison
 to other hazardous substances at the
 facility.- Section 122(g)n)(A). Section
 122(g) further authorize* settlements
 with de minima landowners as defined
 by section i22(g)|l)(B) of SARA.
 Because  the Agency will be providing a
 separate guidance document on de
minimi*  landowners under SARA, this
 document will focus on the definition
 and settlement requirements of the de
minimi*  waste contributor.

 HI. Guideline* for Negotiating With De
 Mlniaus  Puttee
  De minima contributor settlements
 under section 122(g) of SARA can be an
 effective mean* of providing de minima
 parties with an early and equitable
 resolution of their liability while
 minimizing their transaction costs. Of
 minimi*  settlements can be  particularly
  ' Tlw Ml Mil «f MCliOfi 122t|) of SARA »
                i» w Ihu
uaefvl to the Government to complex
cases involving numerous PRPs. In such
cases, de minimi* settlements offer the
Agency a method of simplifying
CERCLA enforcement actions through
early elimination of the sometimes
numerous minimal contributor PRPs
from litigation aad negotiation*. De
minimi* settlements may also increase
the amount of response coats lecoveied
through voluntary settlement
agreement*. Tbia is because de minima
parties (who otherwise might not have
participated in settlements) say be
attracted by the advantages offered by
de minimi* settlements and encouraged
by the fact that their funds will be used
to pay costs of cleanup, rather than
transaction costs. Finally, de minimi*
settlements may increase the likelihood
of settlement with the ma for waste
contributors by raising sufficient
revenues to reduce the overall liabilities
of such panics.
  To use the de mtnimit settlement
provision most effectively, the Agency
will focus on achieving comprehensive
settlements in which interested de
minima PRPs at a particular site arc
addressed in one settlement agreement
De minima parties should  be
encouraged to organize and present
multi-party settlement offers to the
Government To limit Governmental and
PRP transaction costs, de minima
settlements should take the form of
standardized agreements, and the
Regions should try to avoid lengthy
settlement negotiation* with de minimi*
parties.
  At sites with dozen* or hundreds of
PRPs. the de minima settlement
authority will be particularly useful la
helping  to simplify the negotiation
process. In situations of this kind, it is
particularly important for the Agency to
gather and release information about
PRP waste contributions to the site at an
early stage, so that potentially de
minima parties can identify and
organize themselves to present
settlement offers to the Government
Where sufficient information la
available, the Agency may tentatively
identify-potentially de minima parties in
the information released to PRPs under
section I22(e)(l) of SARA. The Agency
may also consider negotiating
separately with PRP Steering
Committees representing substantial
numbers of de minima parties. In
addition, the Agency may with to
consult  with the major. i*~ non-d*
minimi*, parties during the de minimi*
negotiations uVorder to facilitate a later.
comprehensive settlement with such
maior panics. This is because, among
other things, the volume and toxicity
 criteria established by the Agency for
 participation in the de minima
 settlement may have a significant effect
 on the willingness of the maior parties
 to settle.
  to determining the timing of a de
 minima settlement the Agency must
 consider a variety of factors: the amount
 of Information available about the PRPe
 and their waste contributions to the site;
 the amount of Information available
 about the costs of remediating site
 contamination: the nature of the
 reopenen included in the covenant not
 to cue the amount of the premium to be
 paid by the settling parties: and the
 volume aad toxicity criteria used by the
 Agency to distinguish between the de
 minimi* and maior parties at the site.
 The approach taken at a particular site
 should be designed to promote
 voluntary settlement, minimize
 transaction costs for both the PRPs and
 the Government addres* the legitimate
 interests of the de minima and maior
 parties st the site, and assure that the
 level of risk to the Agency is acceptable.
 The Regions are not encouraged to
 devote extensive effort to assessing
 proposals for de minima settlement
 unless there is a reasonable prospect of
 successful settlement.
  The Agency may consider early
 settlement where complete information
 concerning PRP contributions and the
 nature of the remedy is not yet
 available. In such early settlements, the
 reopenen should be more expansive.
 and/or the  premiums should be
 substantial In addition, volume and
 toxicity levels should normally be set
 low. so that parties who may
 legitimately be trested as major do not
 instead end up being treated at de
 minima. Where the Agency determines
 that It is more important to have finality
 in releases  and reopenen aad more
 certainty in the definition of premiums
 and volnme/toxicity levels, negotiations
 lor de minima settlement* should be
 deferred until the remedial investigation
 and feasibility study have been
-completed and the remedy and  the
 relative PRP contributions have been
 definitively identified.
 IV. GuMcuaes for Defining the De

  Because site conditions, remtdml
 program*, number of PRPs and other
 considerations vary tremendously
 among sites, the approach taken by this
 guidance, consistent with section
 122(ij(l )( A) of SARA, is that the df
 minimi* contributor will be defined on a
 site-specinc basis. To qualify as s de
 minima generator or transporter, the
 PRP must nave contributed an amount of

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24336
FsjdataJ  Rtgtot«f / Vol. 52. No. 125  /  Tue«d>y. Jane 30. 1MT / Notices
hazardous eubetances which la minimal
in companion to the taut aowMt at UM
facility. The- PRP must also have
contributed hazardous substances
which art not significantly more toxic
and not of signtncaatiy greater
hazardous affect than other hazardous
substances at the facility, at wall aa
meeting tha other conditions act iorth in-
Urn guidance.       	          •*• ^
   If. for example, all PRPs at thraile
disposed of watte oi similar toxicity and
hazardous nature.e.*- organic solvents.
then those PRPs who had contributed a
minimal amount (in relation to the total
•mount at the facility) could qualify for
de minima status because their waste
wes not more toxic or otherwise
hazardous than other hazardous
substances at the site. If. on the other
hand, a PRP disposed of a minimal
amount of a  waste which is more highly
toxic or which exhibits other more
serious hazardous effects than other
hazardous substances at the site, then
that PRP. despite the minimal amount of
his contribution, normally would not
qualify for treatment as a de minimis
party.
   Another wey to analyzing the facts
poaed by the second example is to
consider the cost of remediating site
contamination resulting from the
hazardous substance contributed by a
particular parry. If a PRP disposed of a
hazardous substance requiring
disproportionately high treatment and
disposal costs, or requiring e different or
mote costly remedial technique than
that which otherwise would be
technically adequate for the site, then
that PRP should not be treated as a de
ninimit contributor even if he disposed
of a relatively minimal amount of such
substance.
   Even if a particular waste contributor
meets the volume end toxicity
requirements for de minimi* contributor
status, a possible settlement with a de
minima PRP must be determined by the
Agency to be "practicable aad in die
public interest" Section 122fj)f.l). TUa
requires the eonsideraban of {acton
beyond the basic eligibility criteria—
factors relating to whether the
settlement would effectuate the intent of
section 122(g) "d other purposes of the
Act For example, in the unlikely event
that every PRP at a site meets the basic
de minima eligibility criteria, a de
minima settlement would not serve one
of the primary goals of section 122Jth
elimination  of certain minor parties
early la the process to focus the
remaining case on the major parties. In
such aa instance, the emphasis should
be on reaching e settlement as soon as
possible with all parties using
                   traditional settlement approaches.
                   Similarly, in a situation where several
                   mejor perties at a site are bankrupt or
                   otherwise non-viable, it may not be to
                   the public Interest to "cash out" smaller
                   contributors before reaching a
                   settlement with the remaining perries.
                     The Agency currently has several de
                   at/mow* pilot protects underway. Alter
                   these aad other section n?(g!
                   settlements have been concluded, we
                   will consider providing farther guidance
                   on the definition of the de minima
                   waste contributor baaed upon our
                   experience with these early settlements
                   and comments received on this interim
                   guidance.
                   V. Guideiiaa* for Settlaaeat With De
                   Minimi* Waste Contributor*
                   A. Timing of Settlement and Necessary
                   Information
                     The general goal  of settlements with
                   de minimis parties  is to allow PRPs who
                   made minimal  contribution* to a site to
                   resolve their liability quickly and
                   without the need for extensive
                   negotiations with the Government
                   Section 123g)(3) indicates that the
                   President shall reach a settlement or
                   grant • covenant not to sue as soon as
                   possible after the President has
                   available the information necessary to
                   reach such a settlement or grant such a
                   covenant.
                     The first type of information that the
                   Agency must have  is adequate
                   Information about the identity, waste
                   contributions and viability of PRPs for
                   the site concerned. Such information is
                   essential because the Agency must be
                   able to determine, under section
                   122lg)(l)(A) of SARA, that each settling
                   party's contribution by volume and
                   toxicity is minimal in comparison to
                   other hazardous substances at the
                   facility In order to enter into a de
                   minima settlement Such information is
                   also important because the Agency must
                   be able to evaluate the financial
                   viability of. and strength of its cue
                   •gainst the non-settling parties at the
                   site to determine whether * de minima
                   settlement is -practicable and in the
                   public interest- under section 122(g)(l)
                   of SARA.
                      Therefore, although the Regions may
                   engage in preliminary negotiations with
                   likely candidates for de minima
                   settlements prior to completion of full
                   PRP investigatory  work, as a general
                   rule, de minimtt settlements should not
                   be concluded prior to completion of a
                   PRP search {including title search and
                   financial assessments) or prior to such
                   time as the Agency is confident that
                   adequate information about the extent
                   of each settling party's waste
contribution to the site her been
discovered. The Regions should
commence PRP Investigatory work
concurrent with the expanded site
investigation or. at the latest the
tsatteoal Priorities list scoring quality
assurance* process, and should make
•gfratih* use of information requests
pursuant to section IKJsJ of CERCLA,
as amended, and section 3007 of RCRA
as appropriate. The Regions should else
•ee subpoena*, aa nsedsd and
appropriate, pursuant to section 123(e)
of SARA.«ad ahovld coastd* all
information dii
id during rite aad
  Early ijlsmaslnns with potential
 candidates for de minima eettiemeats
 will be most beneficial st sites with
 numerous PRPs. where such discussion*
 may be used to encourage minimal
 waste contributors to organize and
 present multi-party settlement offers to
 the Government. In appropriate cases.
 the Agency may consider concluding de
 minima settlements prior to completion
 of full PRP investigatory work. In such
 cases, the Agency may use more
 conservetive criteria for distinguishing
 between de minima and notice
 minima parties. ie~ tower volume and
 toxicity levels, so that parties who may
 legitimately be treated as mm-de
 minimi* are not included within the de
 minima class. Such settlements must
 also be drafted carefully to assure that
 they provide added protection to the
 Agency egainst the risk thst new
 information may be discovered sbout a
 settling party's waste  contribution to the
 site.
  The second type of  Information that
 the Agency must hevs is information
 about the costs of remediating site
 contamination. De minimi* settlements
 in which PRPs are granted an expansive
 covenant not to sue. Le, one without
 reservations of rights  for cost overruns
 and future response action, tee infra, pp.
 16-18. generally should not be pursued
 until the Agency is able to estimate.
 with • reasonable degree of confidence.
 the total response cost* associated with
 cleaning up the subject site, including
 oversight and operation and
 maintenance costs.1 The Agency usually
 will arrive at this level of confidence
 only after a remedial  investigation and
 feasibility study ("Rl/FS") and a Record
 of Decision ("ROD") have been (or ere
 close to being) completed at the site. A
  AjMiey runt >o CTIinrg «MO » er mimma

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                    FodoraJ  Ratiner  / Vol 51 No. 12S  /  Tuesday, hiot  30. lip / Notice*
 alt minima eettlanofit with an
 cxpanai*t eovaaani oof to tve of (bit
 kind may bt eondodad prior to
 completion of the Rl/FS and ROD.
 however, if the Agency «i relaaYeJy
 eonlWeat of in ability to etUmate future
 mpORM OWU. aad tbe Mttkmcnt taiat
 toto MoovBt the taontaod level o(
 •rwmtinry through aa adequate
 prctaium payment and/or  othar
 aafefuarda. SM eectioc V(BK2) b*W
 Toe Ageacr will *lao aoaaJder
 alternative methodi of atrucniriag pre-
 Rl/FS cad HOD dr jwuaut tettieJMnu.
 which afford oV eununit contributor*
 the opportunity for eariy tettlamanu
 (whoa coat laforoation i* leu cenaml
 while protecting to* Government igtmit
 tht edditioaal ntk* preatnied by tuch
 aariy agreement*. Option* for »uch
 aettlemanu arc dtacutted in Section
 V[B)(2) below.

 A Co/iiMr ana1 ffami o/S»ttttmtnu

 J. IntroducttoB

  The got I of negoriaooni with d*
 minima partial it t-j achieve quick and
 standardised agreementi through the
 exptadihm of minimal eaforecm*nt
 reeoureet and trentaction cotu. To
attain (hit foal. MM dv minima
 aetttancat aoraully wiO be i "cethout."
 L*~ It will act include a commitment to
perform work.4 but raiber twill require a
 paywktnt  to be made to the Hazardous
Subttance Suptrfuad.' la exchange for
 tail peymeat. the tattling panic* will
receive atatvtory contribution protection
 •adw aaction tSUMO of SARA and
 may raoaive a covanani not to MM ai
daacribMl in aaetioo VfB)(2) baiow.

 t RttaMti fren Liability and Xeoptnan

  At minim* aettlon Bay be frutad a
ooDvaeaat MM 10 ant lor enrii daunt
 oMetraiflf tfaa attt wmieh aawk
totunettwe ntef Htdar aaction U» of
CEROAnd
             TOODafROlXor
                   W? Of
CEROA,«rbM IPA datcrateae that
a«ch aMnvaoani it eonaittnt with the
public iniarnt. at awvidad a aaction
123(iK2> of SARA.' TW acoftt ef th»
HI mi* • mi mnfie owl (••* i* kt
   I k» • tkwe-pvflr irwwt wit «n4 lor
   . r^lkir jM^»K» •« f*u IMM wN kr
t ky uti»« ••••«*»»	
eonvenant not to tue will vary.
depandiag upon the timing of tha
Battlement, the amount ajJaJomatioG
available to the Agency, tad tht amoul
of aay premium paymcBi to be made by
the dt mitumii partiet purtuant to the
aottiaaoat. Natural raeooret daaagt
datmt may aot be raltaaed, however.
aad thould be expmaly natrved aalaat
(he Federal nature! raaourat Puttee hat
agreed in writing to auch a ooavaaaat
aot to eat purtuant to tha tanoa of
aaction Z22(/){2) of SAAA.
  In order to protect tba Agency agataat
the poetlbiUry that a df minima parry'*
full want contnbution  to a nta biu act
been diteovtrcd. dt minima tenlementt
ihould. in moit catet. aito (nciudt t
rtaervtfion ef nghu which would allow
tht Government to teek further nlief
from any tettiini ptrry  if in/ormtoon
not known to tht Government at tht
time of tenlement it discovered which
indiettei thit the volume or toxidty
en tent for the titt'i dt mimmu parnet
ire no longer tatitnod with reepeci to
that parry.1 Thtt rciervetioo need not be
included iftuffioent information about
the watte contribution! of til eita FRPi
it known at (he time of aetttanent. i*. tf
virtually ail of tha watte it accounted
for. or if utt ncordt and retulu of FRP
inveettptfoai art tuflJo tatty comphitt
for the Agency to conclude that the ntk
sf diteovenng new information about
w«tte cootribuBpe* to tat «tt it
negligible.
  In addition to the natural ntourct
damage rctervation and tht retervation
for new information indicating that the
volume and toxicity criteria for the
particular eettieinem an ao lonttr
tatitfted, two further naervatioat of
right* or "nopenart" may be required
dtpaading upon the facta of tha cate
aad the omittg of the tenlamant. TWae
raopaaan protect the Agency agaiatt (l)
1W ritk of ooat ovemm* during the
completion of the remedial action aad
(H the-riak that further  ratpoaaa  action
will be Booatury to addition to the
work apedfied in the ROD.
  If aa Rl/FS and ROD htvt been (or
an doae to being) completed at the atte,
aad the Agency hat auffidtm
information upon which to evaluate tha
likelihood of coat overrun* or future
ratpORM action and tht potential eottt
aaaodatod with thaet eontingeat eventa,
than tha Agency may accept a premium

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•M* Miilmt e> miinmm t*nr »«
MtlMIHVM kB1 •"»•»' "W" " '
        MfMHI
                                                                              from the aetUiaf alt
                                                                      pantea i» bav ol OM or both of tb«M
                                                                      (w» laepanan. rtanaartlni ee the faeu.
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                                                                      aoociMdad prior to oavsieoM (OF
                                                                      tvbeuatUl ooatplattoa) of taa Rl/FS aad
                                                                      ROD. at a MM wbaa (he Ajency bat
                                                                      bMuffritnt laronaattoa •pan which to
                                                                      v*«huta taaat rlakf tad o>veJap a
                                                                      prcBuwr-ptyment tomaartturttt with
                                                                      ttOtt. tlMtt IVOpCDW WP OMt QV^^^aAt
                                                                      aad hitare roapoaaa action faaaraily
                                                                      wiO be required, la appropriate cam,
                                                                      the Agency may moke esotptiow to thit
                                                                      gaaaraJ rale aad aeoapt a vary high
                                                                      preanm payvwat. which provide! a
                                                                      wide margin of aafety to  the
                                                                      Government, at an earlier ttage in tht
                                                                      PTOCCM m Ueu of taeta two reopcnm.
                                                                        At noted above, the Agency will alio
                                                                      oontider vanoot formt of pr»-RJ /FS t»d
                                                                      ROD o% Kama aattlamenu which
                                                                      provide at auntaut contributor* the
                                                                      oppomairy for aariy tetUament* while
                                                                      proiecttag tbe Covemaent agtuut the
                                                                      tddjbonal htkt pretanted by tuch aariy
                                                                      agreementt. For cumpka. EPA mty
                                                                      oootid«r partial aeitiemaou in which ibt
                                                                      oV miaiaut partial naki a payment ui
                                                                      aatttfacooc of tbatr liability for patt
                                                                      aoatt aad protoctod tl/FS oaat*.
                                                                      SetUemcatt of thit kted wonU sot
                                                                      addreti the attthag parttet' liability for
                                                                      poet-Rl/FS coat*. IPA may alto
                                                                      eoatidar tenlemenu of greater acopt in
                                                                      which an ep-front payment it made fcr
                                                                      known patt eoett aad profrcted Rl/FS
                                                                      aad rewedJtl cotu. In tettlemenu of.
                                                                      thit kind. D»A woald reaem the right to
                                                                      reopen tbe agreement if actual coett
                                                                      exceed CPA't eattmate by an agreed-
                                                                      •poo dollar amount or percentatt
                                                                      AJtamatjvely. ttt Afcacy Aay panne
                                                                      aatdamoatt ta which aa •p-frent
                                                                      paXMat it made for patt ooatt onr/ oad
                                                                      m which tba attthag d* mama paroaa
                                                                      a
minima parOet, Fbit. tf aa extremely
high or wonttate tinman of remedial
action cotu it Med for (he otttlameau
than a coat overran premium or nopeaer
may aot bt rao^nd from the aattliag dr
                                                                            oomrnitment to porfotn the remedial
                                                                            action talMtad ia tba ROD ngtrdiett of
                                                                            ttt coat than the titk of cott ovarntM
                                                                            wttl be boraa by thoae Mior atrna*.
                                                                            and a prMtiwa payment or nopener for
                                                                            coat overrun* will not be reowired by the
                                                                            Government from the tettllng ett
                                                                            miaimu fKH. Finally. ^ «ht »>ajor PRJ>»

-------
24338
Federal Regiat«t  / Vol. 82.  No. 125  /  Tuesday.  June 30, 1987 / Notices
have expressly assumed the de minima
parties' liability for cost overruns and
future remediation at part of a
comprehensive settlement with the
Government than thtM risk* will ba
boma by tha major parties, and a
pramiuc payment or rcopanvr for eott
overruns M* Aatney't piuitclloa af fttuf* mporu> eo*t*
SMmlly (twutd b* bind m • tin »aciflc
        i •* UN BM*I Sfabebia caatt of fta
    *t ItaMIHjr of
                   la concluded prior to completion of the
                   Rl/FS and ROD. and information about
                   projected coats is limited, then the coat
                   overrun and future response action
                   premiums should be calculated to reflect
                   this increased level of uncertainty.1* As
                   discussed earlier, if the major PRPs are
                   assuming the responsibility for
                   conducting me cleanup **-en the
                   premium amounts may be made
                   available to those PRPs rather than to
                   tha Agency. In this situation, the    ,
                   premium amounts may be negotiated
                   between the major PRPs and the de
                   minima settlors.
                     Furthermore, because dt minimit
                   PRPs an jointly sod severally liable for
                   response coats at the site, the amount to
                   be paid by a de minimis settlor is
                   affected by the amount available from
                   other PRPs. Thus, if a significant portion
                   of the major parties at the site an
                   bankrupt  or otherwise not financially
                   viable, then the dt minimis offer may
                   need to refledt a greater proportion of
                   response costs, rather then simply a
                   volumetric share and a premium. It is
                   also possible that mixed funding may be
                   appropriate in such a situation.11
                   4. Enforcement of Payment
                     If a settling  party fails to make any
                   payment required by a de minimi*
                   settlement or otherwise fails  to comply
                   with any term or condition of the
                   settlement that party is subject to
                   enforcement action, including imposition
                   of civil penalties pursuant to Section 109
                   of CERCLA, as amended. See section
                   122(1) of SARA. In addition, the
                   Agendcy may include a porovision in
                   the settlement document which permits
                   the agreement to be vacated in the event
                   of noncompliaaca.
                   5. Type of Agreement
                     Section 122(ej)(4) of SARA requires
                   that de minima settlements be entered
                   as either judicial consent decrees or
                   administrative orders on consent The
                   circumstances and procedures under
                   which these two alternatives should be
                   used are briefly describe below.
                     a. Judicial Content Decree. Under
                   section U2(d){l){A) of SARA.
                   settlements with non-rfe minima PRPs
                   which provide for remedial action must
                   be embodied in consent decrees. Thus, if
                   the d* minima settlement is part of a
                   larger, more comprehensive agreement
                   with the non-de minima parties under
                   which remedial action will be
                   performed, it may be advisable and
efficient to use a consent decree for the
entire settlement Similarly, if the
Government has already filed a
CERCLA Section 106 or 107 action with
respect to the site, a consent decree wit)
the de minima parties may b* .«.eful
because the court will be familiar wi'1-
the case a&J should be able
tha settlement expeditiously.
  At the present time, all de minimi*
consent decrees must be referred to
Headquarters by the Regions and must
receive the concurrence of the Assistan:
Administrator for Enforcement and
Compliance Monitoring ("AA-OECM")
and the Assistant Administrator for
Solid Waste and Emergency Response
["AA-OSWER") or his or her designee
prior to referral to the Department of
justice for filing. Further, all de minimis
consent decrees will be subject to a
thirty-day public comment period after
lodging.1* A model section 122(g)
consent decree will be issued shortly.
  b. Adminstrative Order on Consent, fi
de minimis settlement msy also be
embodied in an administrative order on
consent ("consent order"). See section
122(d)(l)(A) of SARA. Because of the
potential effect of administrative de
minimis settlements upon future
litigation and negotiations with the
major waste contributors at the site, all
such settlements currently must receive
the concurrence of the AA-OECM and
the AA-OSWER prior to signature by
the Regional Administrator.
Additionally, if the total past and
projected response costs at the site.
excluding interest exceed $500.000 (as
will generally be the case at aites
involving de minimis settlements).
section 122(fJ(4) of SARA requires that
the de minimi* consent order receive th
prior written approval of the Attorney
General or his designee ("AC"). That
subsection of SARA gives the AC thirt)
•days from referral by EPA to approve o
disapprove the settlement unless the
AC has reached agreement with the
Agency on an extension of time.
  Section 122(1) of SARA requires notic
of all administrative de minimi*
settlements to be published in the
Federal Register for a thirty-day public
comment period. The Agency must
consider all comments received and
"may withdraw or withhold consent to
the proposed settlement if such
comments disclose facts or
considerations which Indicate the
proposed settlement is inappropriate.
  • The anrnra* payoieal f
Ik* BOH Mltlkn PMi HI dtt
                     •• Fwifcaf tatdaaea M cafe
                                           If pfMUMK
       . ta «MM eeaat, H m*r b* aetroatMM for
UM prMU4in M fa* diMH»"d hi • »H «MClftc WM
(Mid M dl»caiiad Maw a, V ». 14.
                   •arawntf win b* piaiidad by Meant*

                     11 Caidinc* on NiMd fuadtat «r» U**»d SUM* hM ntfenittt I* «ny.
 Fuhlic •«•*••* iw*i**d Md MMU «rt*r Ih* own

-------
                      Federal Reyjler / Vol.  52.  No. 125 / Tueiday.  June 30. 1987 / Notice*
                                                                         24339
 improper, or inadequate." " Section
 122(i)(3) of SARA. Modifying or
 withdrawing content to «n
 administrative settlement ii subject to
 the same OECM and OSWER
 concurrence! •• are initial agree menu.
   More detailed guidance on the
 procedural aspects of dt minimit
 consent orders, including Regional
 referral of orders for Headquarters
 concurrence and AC approval
 solicitation of public comment.
 enforcement of orders,  and other related
 matters, will be provided by separate
 memorandum. A model section 122(g)
 consent order will be iasued shortly.

 VI. Purpose) and  Use of This
 Memorandum

   This  memorandum and any internal
 procedures adopted for its
 implementation are intended solely as
 guidance for employees of the US.
 Environmental Protection Agency. They
 do not constitute rulemaking by the
 Agency and may not be relied upon to
 create a right or a benefit, substantive or
 procedural, enforceable at law or in
 equity,  by any person. The Agency may
 take action at variance with this
 memorandum or its internal
 implementing procedures.
Appendix—Text of Section 12Kj> of San
  (1) fix/jed/tec1 Final SeK/ement—Whenever
 practicable and in the public interest, ss
determined by the President the President
shall a*-promptly at possible reach t final
settlement with s potennally responsible
party in  an administrative or civil action
 under section 108 or 107 if such settlement
involves only a minor por.ion of the response
costs at  the facility concerned and. ia the
judgment of the President, the conditions in
either of the following subparaxniph (A) or
(B) are met:
  (A) Both of the following an minimal in
companion to other hazardous substances at
the facility;
  (i) The amount of the hazardous substances
contributed by that party to the facility.
  (11) The toxic or other hazardous effects of
the substance* contributed by that party to
 the facility.
  (B) The potentially responsible party—
  (I) is the owner of the r»«J property on or in
which the factllty to located:
  (ii) did not conduct or permit the
 generation, transportation, storage, treatment.
 or disposal of any hazardous wbetanc* at the
 facility: and
  (III) did not contribute to the release or
 threat of release of s hazardous substance at
 the facility through any action or omission.
  "The pay*
                    M • lit muunne
  This subparagreph (B) dees not apply If the
potentially responsible party purchased the
real property with actual or constructive
knowledge thai the property w«« used for the
generation, transportation, storage, treatment.
or disposal of any hazardous substance.
  (2) Covtncnt Not To Sue.—The President
stay provide s covenant not to sue with
respect to the facility concerned to any party
who has entered into s settlement under this
subsection unices such s covenant would be
inconsistent with the public interest as
determined under subsection If).
  (3) Expodit+ct AgrHmfnL—The President
shall rescb any such settlement or grant eny
such covenant not to sue as soon ss possible
after the President has available the
Information necessary to reach such s
settlement or grant such a covenant.
  (4) Content Otertf or Admmtiimtivt
Order.—A settlement under this subsecnon
shell be entered es s consent decree or
embodied in en administrative order setting
forth the terms of the settlement In the case
of any facility where the totsl  response costs
exceed SSOOOOO (excluding interest), if the
settlement is embodied ss sn administrative
order, the order msy be Issued only with the
prior written spprovsl of the Attorney
General If the Attorney General or his
designee has not approved or disapproved
the order within 30 days of this referral the
order shall be deemed to be approved unless
the Attorney General snd the Administrator
hive speed to extend the time. The district
court for the district ia which the reiease or
threatened release occun may enforce any
such administrative order.
  |S) Efftct of Ac/eemestt—A party who has
resolved Its liability to the United Slates
under this subsection shall not be liable for
claims for contribution regarding matters
addressed in the settlement. Such settlement
does not discharge any of the other
potentially responsible parties unless its
terms so provide, but it reduces the potential
liability of the others by the amount of the
settlement.
  (6) Stultmtnu with Oth»r Potentially
Retponsiofe Asrt/es.—Nothing in this
subsecuoo shall be construed to  affect the
authority of the President to reach
settlements with other potentially responsible
parties under this Act
(FR Doc r-14802 Filed 8-»-e7: fc«5 am)
erden tae«M no) require S*>IMIM 10 be maoe until
eher Die public oanmem p*nad tot dneed sad
•Mil sfier HM Atvney he* h*d tvfflcMmi MM to
determine whether »ny COMWIIU received reqwre
•odinesiwn ef or iMiMniiMl frer» th» O
FEDERAL COMMUNICATION
COMMISSION

V*»e»c hrtorrorton Co»ectten
Requirement* Submitted to the Office
of Mwtegement and Budget for Review
  The Federal Communications
Commission has submitted the following
Information collection requirements to
OMB for review and clearance under
the Paperwork Reduction Act of 1980. 44
Transcription Serv-.ee. 2100 M Street.
NW. Suite 140, Washington. DC 20037.
or telephone (20Z) 857-3815. Persons
wishing to comment on an information
collection should contact |. Timothy
Sprehe. Office of Management and
Budget. Room 3235 NEOR  Washington,
DC 20501 telephone (202) 39S-U14.
Copies of these comments should also
be sent to the Commission. For further
information contact Doris Benz. Federal
Communications Commission, telephone
(202) 632-7513.
OMB NOJ 3060-0051
Title: Ship/Aircraft License Expiration
  Notice and/or Renewal Application
Form No.: FCC 405-8
Action: Revision
Estimated Annual Burden: 39.163
  Responses: 1359 Hours.
Needs and Uses: A computer-generated
  expiration notice which is sent to ship
  (voluntarily equipped and Title HI Part
  HI vessels) and aircraft radio service
  station licenses.The license may be
  renewed by returning the application
  when there is no change, or only
  minor changes, to the existing  license.
  The data is used to update the
  existing data base and issue renewed
  licenses.
OMB No.: 3060-0096
Title: Application for Ship R*dio Station
  License and Temporary Operating
  Authority
Form No- FCC 506/506-A
Action: Revision
Estimated Annual Burden: 106.192
  Responses: 21.238 Hours.
Needs and Uses: Form FCC 506 is used
  to apply for a new. modified, or
  renewal of a ship radio station
  license. Form FCC 506-A is retained
  by the applicant as a temporary
  operating authority and is valid for 90
  days. The data is used to determine
  eligibility, update the existing data
  bate, and issue licenses.
Federal ConmunicatioM Commission.
Wtmesal.'Meariee,
Secretory.
[PR Doc. S7-147K) Filed s-2»-e7:1:45 «m|
seism fmtt rrn-r-
nOCRAt ELECTION COMMISSION
CtoaytnetN
Advieory r»enet;
  Copies of these submissions may be
purchased from the Commission's
duplicating contractor, international
Renewal of Charter
auaaaunr: The National Clearinghouse
on Ejection Administration announces
the r*n»wal of the charter for the
Qeanngnuuse Advisory Panel.
  The purpose of the Panel is to provide
advice and consuls tion to the
ClearinfthrwMc with respect to its

-------
 28038
Federal Register / Vol. 52.  No. 143  / Monday. July 27. 1987 / Notice*
                                                                                              OSWER I   9834.8
 Applicants »ute thai granting their
 request will permit the Applicant* to tell
 the • ubject gi» on the spot market under
 their small producer certificate.
   Applicants state that the August 9.
 1965. contract expired on November 7.
 1986. and that under the expired
 contract ANR has no take-or-pay
 obligation. Applicants state that the gas
 qualifies under NCPA section 106
KtiuUttoni. Svi.nnn 2.~ »*..im iHut iht CofMMMioa
will c
-------
                     Federal Register / Vol. 52. No.  143 / Monday. July 27.  1967 / Notices
                              28039
   EPA's reason* for adopting this
 second reopener are several. First.
 although SARA do«s not explicitly
 require this reopener. both tha statute
 and the legislative history evince a
 Congressional concern that'responsibla,,.
 parties remain  liable for failure of the
 remedial action to protect public health
 or the environment. For example, the
 mixed funding provision in section
 122(b) cleariy anticipates that the
 responsible parties who have settled
 retain liability for additional work
 necessary to address remedy failure.
 The five-year review prevision in
 section IZl(c) also reflects Congress'
 concern for remedy failure by
 mandating periodic reviews to ensure
 that remedial actions continue to protect
 public health and the environment. If a
 remedy does not meet this standard.
 EPA may take or  require such additional
 remedial action as is necessary.
   The second major issue addressed in
 the guidance is how EPA will exercise
 its discretion to seek additional
 remedial relief  in  the period following
 settlement but prior to the effective date
 of the covenant not to sue for future
 liability. Responsible parties have
 expressed concern that prior to the date
 on which the covenant becomes
 effective. EPA can alter its Record of
 Decision and impose additional costs
 upon settlors without the slightest
 change in circumstances. To assure
 settling parties  that EPA does not intend
 such a result. EPA will include language
 in covenants, limiting EPA's ability to
 reopen a settled remedial matter to
 those •s'ituaHons where  additional
 information is received, in whole or in
'pun. after entering of the consent decree
 indicating that  the remedy no longer
 protects public  health or the
 environment. As explained above. EPA
 thinks that such a provision preserves
 Congressional intent as to the proper
 allocation of the risk or remedy failure
 while also assuring those same panics
 that some degree  of certainty attaches to
 a settled matter.
  The third issue  involves the Agency's
 responsibility to certify completion of
 the remedial action. Section 12210(3)
 provides that a covenant not to sue for
 future liability cannot take effect until
 EPA has certified that remedial action
 has  been completed. Section 122 does
 not include specific guidance on when a
 cleanup has been completed. CERCLA
 cleanups often  involve the construction
 of some type of facility designed to
 correct contamination at the site and the
 operation and maintenance of thai
 facility for the indefinite future. In this
 circumstance, certification of completion
should not have to wait until all
operation and maintenance activities
are completed. Specific distinctions
between remedial action and operation
and maintenance are drawn in section
104(c)(e) of S:" •  Although 1h»e-«j., .
distinctions are ni,: smctly applicabteJer-
a legal matter to '•eieasee from lU&iHry,'
the Agency believes that it is
unneccessarily confusing and inefficient
to have two separate sets of definitions
applied to remedial action, and will
therefore as a matter of policy apply the
distinctions in section 104 to releases
from liability.
  Section 104(c)(6) of CERCLA
establishes definitions for purposes of
the States' cost share of CERCLA
response actions. It defines completed
remedial action to include the
completion of treatment or other
measures necessary to restore surface
and ground water quality to a level that
assures protection of human health and
the environment The operation of such
measures for a period of up to ten years
after the construction or installation of
the remedy shall be considered remedial
action. Activities required to maintain
the effectiveness of such measures
following this ten-year period or the
completion of remedial action.
whichever is sooner, shall be considered
operation or maintenance.
  Questions have  arisen in determining
whether pumping and treating of
gound water constitutes part of the
remedial action, or part of operation and
maintenance, for purposes of funding.
Section 104(c|(6| indicates that the
completion of treatment or other
measures necessary to restore surface
and gound water quality falls within the
definition of remedial action, rather than
operation and maintenance, and can
therefore be paid for out of the Fund for
a period of up to ten yean. However,
ground or surface water cleanup
measures initiated for reasons other
than restoration would be treated as
operation and maintenance, as would
source control actions.
  We recognize that this guidance
addresses important and complex issues
and for that reason an requesting public
comment We will evaluate all
comments received for the purpose of
determining whether any modifications
to the guidance are warranted.
  The interim guidance follows.
  Oair July tr. 1987.
ttward t laieh.
Acting. Attntant Adminittrotor for
Enforctmeni and Compliance Monitontif.
  Oauc Inly 17.19*7.
Attutont Admiatttmor for Solid Wattt and
Emfiftncy Rttpont*.

July 10, UT.
  Subject Covenants Not To Sue Undeat -ao
SARA.
  From: Thomas L Adams, Jr.. Assistant
Administrator for Enforcement and
Compliance Monitoring. )• Winston
Porter. Assistant Administrator for Solid
Waste and Emergency Response. F.
Henery Habicht II. Assistant Attorney
General U.S. Department of Justice.
  To: Regional Adminutrttors. Rtfioni t-X

L Introduction
  In the Interim CERCLA Settlement
Policy. SO FR 5034 (1986). EPA provided
guidance on when releases from liability
were appropriate as consideration for
an agreement involving a private psrty
cleanup or reimbursement of EPA's
costs. That policy expressed a strong
preference for issuing releases in the
form of covenants not to  sue. The
Superfund Amendments and
Reauthorize tion Act (SARA) confirms
the authority of EPA to release
responsible parties from certain
liabilities in settlement of an EPA claim
under CERCLA. In section 122(0 of
SARA. Congress adopted EPA s policy
of drafting releases in the form of
covenants not to sue and also
established specific- requirements
governing the Agency's ability 
-------
 28040
Fedetml  Register / Vol.  52. No. 143 /  Monday. |uly 27. 1987 / Noticei
   (C) The settlor is in Full compliance
 with • content decree under f 106
 addressing the release or threatened
 releatc:
   (D) EPA has approved the response
 action.

 Section 122(f}flJ.
   Prior to entering a covenant not to sue
 under section 122(0(1). EPA must assess
 the appropriateness of the covenant
 under seven factors set forth in section
 122(0(4). These factor*, which relate to
 the effectiveness, reliability, and
 enforceability of the remedy, and the
 nature of the risk remaining at the site.
 include:
   (A) The effectiveness and reliability of
 the remedy, in light of the other
 alternative remedies considered for the
 facility concerned.
   (B) The nature of the risks remaining
 at the facility.
   (C] The extent to which performance
 standards are included in the order or
 decree.
   (D) The extent to which the response
 action provides a complete remedy for
 the facility, including a reduction in the
 hazardous nature of the substances at
 the facility.
   (E) The extent to which the
 technology used in the response action
 is demonstrated to be effective.
   (F) Whether the Fund or other sources
 of funding would be available for any
 additional remedial actions that might
 eventually be necessary at the facility.
   (C) Whether the remedial action will
 be carried out. in whole or in significant
 part by the responsible parties
 themselves.

Section 122(f)!4)
   In addition to authorizing EPA. in its
 discretion, to covenant not to sue for
 liabilty. including future liability, section
112(0 mandates that EPA grant a
 covenant not to sue for future liability in
 two specific circumstances. Section
 122(0(2) provides that where the four
 conditions in section 122(0(1) have been
 met. EPA must issue a covenant not to
 sue for "future liability for future
 releases" If: (1) EPA selects a remedial
 action involving offaite disposal of a
 hazardous substance after rejecting an
 onsite response which fully complies
 with the National Contingency Plan
 (NCP): or (2) the selected remedial
action requires the destruction.
elimination, or permanent
 immobilization of hazardous substances.
 Such a covenant may only address the
portion of the remedial action which
 involves these two situations.
                     Assuming that a covenant not to sue
                   for future liability is otherwise
                   authorized under section 122(0. section
                   122(0(3) prescribes that a covenant not
                   to sue for future liability shall not take
                   effect until EPA has certified that the
                   remedial action has been completed in
                   accordance with the terms of CERCLA.
                   Moreover, whether the covenant is for
                   future or present liability, section
                   122(0(3) conditions such covenants upon
                   satisfactory performance of the terms of
                   the settlement agreement
                     Finally, section 122(0(6) addresses
                   exceptions to covenants not to sue for
                   future liability provided under Section
                   122(0(1)- For example. EPA must except
                   from any covenant not to sue for future
                   liability any future liability related to
                   the release or threatened release which
                   is the subject of the covenant where
                   such liability arises from conditions
                   unknown at the time the remedial action
                   is certified complete. Section
                   122(0(6)(A). This "reopener-for
                   unknown conditions is not required for
                   special covenants granted under section
                   122(0(2) or for de minimis settlements
                   under section 122(g). In addition, section
                   122(0(B)(B) provides that a waiver for
                   the unknown conditions reopener in
                   section 122(OW(A) may be granted in
                   "extraordinary circumstance*." In
                   determining whether extraordinary
                   circumstances exist EPA must consider
                   "such factors as those referred to  in
                   (section 122(01(4)] and volume, toxicity.
                   mobility, strength of evidence, ability to
                   pay. litigative risks, public interest
                   considerations, precedential value, and
                   inequities and aggravating factors."
                   Section 122(0(6)(B). Nonetheless, even if
                   extraordinary circumstances exist the
                   unknown conditions exception may not
                   be waived if the terms of the agreement
                   do not provide reasonable assurances
                   that public health and the environment
                   will be protected from any future
                   releases. Section 122(0(«)(C] authorizes
                   EPA to except from covenants not to sue
                   future enforcement actions necessary to
                   protect public health,  welfare, and the
                   environment.
                   m. Explanation of Key Statutory
                   Provisions
                    In interpreting Section 122(0 end
                   developing a policy for its
                   implementation. EPA  has looked taJbn
                   expressions of Congressional intent
                   contained in other parts of SARA and
                   the relevant legislative history. These
                   courses indicate that section 122(0
                   serves several goals, including:
                    (1) Encouraging private party cleanup*
                   by providing EPA with the authority to
                   grant covenants not to cur
                     (2) Encouraging more permanent
                   cleanups by codifying the principle that
 the more permanent the cleanup the
 more complete the release:
  (3) Protecting the public by ensuring
 that responsible parties remain liable for
 future releases requiring future remedial
 action.

 A. Pment Liability and Future Liability

  In section 122(0(1). Congress
 authorizes EPA to issue covenants not
 to sue for both present liability and
 future liability. In the context of
 settlements involving remedial action,
EPA interprets present liability as a
responsible party's obligation to pay
 those response costs already incurred
 by the United States related to a site
 and to complete those remedial
 activities set forth in the Record of
 Decision (ROD) for that site, including
 meeting any performance standards or
 other measures estabished through the
 remedial design (RD) proces*. Future
 liability refers to a responsible party's
 obligetion to perform sny additional
 response activities at the site which are
 necessary to protect public health and
 the environment.
  In deciding whether to provide a
 covenant not to sue for present liability.
 EPA must consider the criteria in
 sections 122(0(1) and 122(0(4). These
 factors essentially codify the approach
 taken in EPA's Interim CERCLA
 Settlement Policy. There. EPA stated as
 a general principle that "the more
 effective and reliable the remedy, the
 more likely it is that the Agencv can
 negotiate a more expansive release." In
 judging the reliability snd effectiveness
 of the remedy, the Intenm Settlement
 Policy placed special emphasis on
 whether the remedy requires that
 health-based performsnce standiirds be
 met. AJ noted above, section 122(0(4)
 explicitly makes performance standards
 a factor to be considered and EPA
 continues to regard this factor as
 critical Where the criteria in section-
 122(0(1) «r« fulfilled and where
 consideration of the factors In section
 122(0(4) suggests the remedy is reliable.
 effective, and enforceable (such as. for
 example, where the remedy indudn»
 numerical performance standards), a
 covenant not to sue for present liability
 may be provided which takes effect
 upon approval of the consent decree by
 the court On the other hand, where the
 criteria in paragraph (0(1) ere met but
 the factors in section 122(0(4) indicate
 that some questions remain about the
 reliability, effectiveness, and
 enforceability of the remedy, any
 convenant not to sue for present
 liability, if appropriate at  all. would
 have to be conditioned on s

-------
                     Federal Register /  Vol.  52.  No. 143  /  Monday.  July  27. 1987  / Notices
                                                                      28041
demonstration of the effectiveness and
reliability of that remedy.
  Covenants not to sue for future
liability are also made contingent on the
criteria set forth in section 122)0(1) and
the factors enumerated in section
122(01*). When these conditions are
met. EPA may. in its  discretion, provide
a convenant not to sue for future
liability but such a covenant, according
to section 122(0(3). may not take effect
until EPA certifies that the remedial
action has been  completed. Prior to
certification,  therefore, the settling party
remains fully responsible for any future
liability for future remedial action
'necessary at  the site. Following
certification,  unless a special covenant
under section 122(0(2) is required or
extraordinary circumstances are
present, the covenant not to sue for
future liability is subject to a reopener
covering (1) unknown conditions as
mandated by section 122(0(6)(A). (2)
any other conditions  EPA deems
advisable based on the section 122(0(4)
factors, and (3) future enforcement
activity necessary and appropriate to
assure protection of public health.
welfare, and the environment as
provided in section 122(0(6)(C).
B. Certification of Completion of the
Remedial Action
  Section 122(0(3] specifies that a
covenant not to sue for future liability
shall not take effect until EPA certifies
the remedial action is complete. In the
context of paragraph 122(0(3). EPA
interprets completion of the remedial
action as that date at which remedial
construction has been completed. Where
a remedy requires operational activities.
remedial construction would be judged
complete when it can be demonstrated
that the operation of  the remedy is
successfully attaining the requirements
set forth in the ROD and RD.
  The exact point when EPA can certify
completion of a particular remedial
action depends on the specific
requirements of  that  remedial action.
Each consent decree should include •
detailed list of those  activities which
must be completed before certification
cnn occur.
  Certification of completion under
section 122(0(3)  dot* not in any way
affect a settling parry's remaining
obligations under the consent decree.
All remedial activities, including
maintenance and monitoring, must be
continued as  required by the terms of
the consent decree.
C. Reopeners
  Under the CERCLA Interim Settlement
Policy. EPA required that there be
included in every consent decree
reopeners covering situations where
EPA received additional information
after the time of the agreement regarding
site conditions or scientific
determinations which indicates that the
site may pose an imm • »:it and *        _.
substantial endangerment to '....- public*',.*"
health or welfare or to trie environment. -
Under section 122(0- * slightly different
approach to reopeners must be followed.
Section 122(0 provides that for future
liability, no covenant not to sue shall be
effective pnor to certification of
completion of the remedies 1 action.
Technically, therefore, since there is no
release of future liability pnor to
certification, there is no need for
reopeners in that time period. Reopeners
for future liability only becomes
necessary after certification,  when the
covenant not to sue takes effect.
  As to reopeners regarding future
liability. Congress expressly required a
reopener for unknown conditions. In
contrast to the Interim Settlement
Policy, however. Congress expressly
eliminated any endangerment threshold
for that reopener. Congress also
authorized EPA. in section 122(0(6)(C).
to include any other reopeners
"necessary' and appropriate to assure
protection of public health, welfare, and
the environment" EPA believes that it is
in the public interest and consistent
with Congressional intent to require a
•wond reopener covering situations
where additional information reveals
that  the remedy is no longer protective
of public health or the environment'It is
not in the public interest to release
responsible parties from liability for
additional response actions made
necessary by new information, given, as
noted in the Interim Settlement Policy.
"the current state of scientific
uncertainty concerning the impacts of
hazardous substances, our ability to
detect them, and the effectiveness of
remedies at hazardous waste sites." SO
FRS038.
   Congressional concern with situations
where the remedy fails to protect public
health or the environment can be seen in
SARA'S mixed funding and five-year
review provisions. The mixed funding
provision in section I22(b) states that if
mixed funding is adopted at a particular
•ite. "the Fund shall be subject to an
obligation for subsequent remedial
actions at the same facility but only to
the extent thai such subsequent actions
are necessary by reason of the failure of
the original remedial action. Such
obligation shall be in a proportion equal
to, but not exceeding, the proportion
contributed by the Fund for the original
remedial action." This provision
Anticipates that the responsible parties
who have setiled retain liability for
 additional work necessary to address
 remedy failure. Further support for this
 proposition can be found in the
 Conference Report statement that the
 continuing proportional Fund obligation
..in mixed fuinu.,. ret   •• * settlement
'incentive. RR. Rep Nr  -rt -K? 99th
 'Cong.. 2rf Se»i. ?-• / (:»*>). The Fund's
 continuing obligation would only be an
 incentive to settlement if in non-mixed
 funding cases settling parties retained
 liability where the remedy fails to
 protect public health or the environment
   The five-year review provision in
 section 12t(c) also addresses  Congress'
 concern for situations where the remedy
 fails to protect public health and the
 environment by mandating periodic
 reviews to assure that remedial actions
 do just that If a remedy is found not to
 protect public health or the environment.
 the statute provides that EPA may take
 or require such additional remedial
 action as is necessary.
   Congressional  concern that remedial
 action might fail  to protect public health
 and the environment was not limited
 narrowly to a focus on the reliability of
 the remedial technology at the site.
 Rather, this concern apparently
 extended to any situation in the future
 at the site which is judged to  present a
 threat to public health and the
 environment EPA will follow this
 interpretation of remedy failure. For
 example, should  health effects studies
 reveal that the health-based
 performance levels relied upon in the
 ROD are not protective of public health
 or the environment and that public
 health or the environment will be
 threatened without further response
 action, then the EPA could invoke the
 remedy failure reopener. The reopener
 for remedy failure, however, is not
 meant to require changes purely based
 on advances in technology. Under the
 reopener. EPA would not compel settling
 parties to implement newly-developed.
 more permanent  remedial technological
 unless EPA can show that the present
 remedy does not protect public health or
 the environment. Neither is the remedy
 failure reopener intended to give EPA
 the option to make changes in a
 remedial action absent additional
 information received following the entry
 of the consent decree. EPA does not
 consider the phrase "information
 received, in whole or in part,  after entry
 of the consent decree." as used in the
 attached model covenant, to include a
 new analysis of the same information
 comprising the record of the initial
 remedy selection decision.
   In short, this reopener is similar to the
 reopener for new scientific information
 provided for in the Interim Settlement

-------
 28042
Fedaral Rtysttr  /  Vol.  S2.  No. 143 / Monday. July 27. 1887 / Notice*
 Policy, although tht imminent and
 substantial tndtntemtnt threshold hat
 not been included. To require a • bowing
 of imminent and substantial
 tndangermint would be inconsistent
 with tht provision in section 122(0 of
 SARA with regard to unknown
 conditions at well at the provitiont
 concerning future retponte work in
 tection 122JO(6)(C) and section 121 (c).
 Moreover, it it the Agency's view that
 requiring different showings for the two
 reopenen would lead to protracted
 disputes about which reopener applied
 to tituationt necetitating additional
 retponte activity.
   EPA believes that In order to give
 tettlon tome  tneaauret of certainly prior
 to certification, the most reasonable
 meant to implement the authority in
 tection 122(0  is to specify in content
 decrees  those pre-cenificahon situations
 in which EPA would seek further
 remedial action. Those situations at  a
 minimum would include the
 circumttancet described in the future
 liability  reopenert:
   (1) Discovery of previously unknown
 conditions: and
   (2) Situations where additional
 information reveals that the remedy  it
 no longer protective of public health and
 the environment.
 Thus, pnor to  certification of completion
 of the remedial action. EPA will reserve
 its right to institute new proceedings to
 compel, or recover costs for further
 response action made necessary by
 information received, in whole or in
 p.aru'after entering of the consent degree
. related to either unknown conditions or
 remedy failure. Following certification
 of completion of the remedial action,
 EPA will reserve its right to institute
 proceedings only to address information
 received after certification of completion
 of the remedial action related to
 unknown conditions or remedy failure.
 Pre-certification reopeners for unknown
 condition* and remedy failure apply to
 all covenant!  not to tut, even to special
 convenantt under tection 122(0{zt
   Particularly in tht ptfctrttfication
 period, tht relationship of the remedy to
 the covenant and the reopeners should
 be carefully considered. EPA may insist
 on broader reoptnen where the content
 decree dots not provide for a remedy
 that meets the preference in section
 121(b)(l) fora permanent and significant
 reduction of the volume, toxicity. or
 mobility of the hazardous substances. In
 those instances. EPA shall assess the
 need for broader reopenert in the
 covenant not to sue bated on the factors
 identified in section 123(0(4).
 Nevertheless, once EPA hat determined
 what reopenert are appropriate for the
                  pre-certification period. EPA will agree
                  in the covenant to institute new
                  proceedings only where those reopener
                  provitiont are met
                    Although covtnantt not to tne mutt
                  include, at a minimum, the abovt-
                  detcribed reopeners during the prt-
                  certiftcation period, reopenert an not
                  mandated in all circumttances in
                  covenants not to sue applicable to the
                  period following completion of the
                  remedial action. Two statutory
                  provitiont addrett this period. FlrtL
                  tection 122(0(2) mandatet that EPA
                  issue a special covenant not to sue for
                  future liability in two narrow
                  circumttancet: (1) OfTtite disposal
                  following rejection of an ontite remedy
                  complying with the NCP-. and (2)
                  complete destruction of the hazardous
                  substance*. Such a special covenant
                  may not contain reopener* for the post-
                  completion period. Second, section
                  122(f)(6)(B) specifies that in
                  extraordinary cireumttancet EPA may
                  exclude a pott-completion reopener for
                  unknown conditions. This  extraordinary
                  circumstance waiver is only available
                  where other terms in the agreeement
                  provide all reasonable assurances that
                  public health and the environment will
                  be protected. At a policy matter. EPA
                  would alto not include the reopener for
                  later-received information relating to
                  failure in a situation where the
                  conditions in tection 12JO(8)(B) are met
                  EPA, however, it-barred from granting
                  covenant! not to sue without reopeners
                  absent a finding that a special covenant
                  is appropriate or that extraordinary
                  circumstances exist
                  D. Extraordinary Circumstances
                    Section l22tfl(6)(B) provides that EPA
                  may forego including a reopener for
                  unknown conditions when
                  extraordinary circumstance* exist and
                  "other terms, condition, or requirements
                  of the agreement... are tuffldent to
                  provide all reasonable etturtncet that
                  public health and tht environment will
                  be protected from any future release* at
                  or from the facility."
                    Tht legislative history on this
                  provision indicates that it  should be
                  narrowly applied. The House-Senate
                  Conference Report stain that "(t)his
                  provision should be implemented in an
                  manner consistent with the current
                  application of tht Administration
                  settlement policy as to unknown
                  conditions." Conference Report HJt
                  Rep. No. 99-962. *9th Cong. 2d Sets. 295
                  (1966). By this statement tht Conference
                  Committee endorttd EPA't extremely
                  limited use of tht extraordinary
                  circumstance* waiver for reopeners
                  contained in the CERCLA  Interim
                  Settlement Policy.
  In section 122(f)(6KB). Congrett lists
as relevant factors regarding
extraordinary circumstances: Those.
[factors] referred to in (section 122(01(4)
and volume, toxicity. mobility, strength
of evidence, ability to pay. Utigative
risks, public interest consideration*.
precedential value, and inequities and
aggravating factors." EPA has already
explained how many of tht*e factor*
will be interpreted in tha Interim
Settlement Policy.
  A finding of extraordinary
circumstancet alone it not sufficient to
meet the requirements of section
122(0(6)(B). That provision alto
mandatet that the unknown condition*
reopener  may only be waiver if other
term* of the agreement provide all
reatonable atturance* that public
health and the environment will be
protected. On* factor which may be
considered in determining whether all
reasonable assurances have been
provided  it whether a settling party ha*
offered a  premium payment to insure
against the risk that future remedial
action will be required at the site.
  One of the instances where EPA has
used the extraordinary circumstance*
exception in the past is where a
responsible party has filed for
bankruptcy. Whether or not •
responsible party's bankruptcy filing
presents extraordinary circumttances
will depend on a number of case-
specific factors involving, among other
things,  the grounds upon which the party
it Hable. and the type of bankruptcy
relief-liquid*tion or reorganization-thai
it being sought by the debtor. EPA will
not grant  a debtor a convenant not to
sue which is broader than a discharge
under the bankruptcy laws but neither
will EPA  make settlement impo**ible by
insisting on a convenant narrower than
tht discharge the debtor is entitled to by
operation of the bankruptcy laws.
  Waivers of reopeners under section
122(f)(6)(B) will require prior approval
by the Assistant Administrators for
OECM and OSWER and the Assistant
Attorney  General a* provided in the
Interim Settlement Policy. 50 FR at 5040.

£. Sptcial Convtnanu
  Special convenants not to tue under
section 122(0(2) are authorixed for two
extremely limited circumstance*. Putt
under section 122(0(2)(A) a special
covenant is appropriate  where EPA
•elect* a  remedial action involving
offtite disposal after rejecting a
proposed ontite remedy which it
consistent with the NCP. This special
convenant it should be emphasized, it
only available when EPA hat
determined that an ontite remedy fully

-------
                      Federal Register  /  Vol  5Z  No. 143 /  Monday. |uly 27. 1967 /  Noticei
                                                                     28043
 complin with the requirements of the
 NCP. but that onsitt remedy i« rejected
 in favor of offaitc disposal It is not
 luflicient for EPA to have merely
 considered onsite proposals in choosing
 •>•* '••nedv. Further, the Conference
 RCTTv i -,,L ': dear that this proviskx
 M-TI. c-'.- /i_-d in the context of sector.
 iti requirements regarding offsite
 dispoMl and therefore EPA will only
 grant this special covenant hi decree*
 involving remedies selected under
 section 121. Conference Report H.R.
 Rep. 99-482.99th Cong, 2d Set*. 254
 H9M).
   Second, under section l22(f)(2)(B),
-EPA will issue a special covenant where
 the remedy involves each of the
 following elements:
   (1) Treatment of hazardous
 substances so as to
   (2) Destroy, eliminate, or permanently
 immobilize the hazardous constituents
 of such substances, and
   (3) EPA determines that
   (a) The substance* no longer present
 any current or currently forseeable
 future significant nsk  to public health,
 welfare, or the environment.
  (b) No byproduct of the treatment or
 destruction process presents any
 significant hazard to public health.
 welfare, or the  environment, and
  (c) All byproducts are themselves
 treated, destroyed, or contained in a
 manner which assures that such
 byproducts do not present any current
 or currently foreseeable future
 significant risk to public health, welfare,
 or the environment
 The term "permanent  immobilization"
 applies only to a site where treatment
 technologies change the fundamental
 nature and character of the hazardous
 substances so that no person faces a
 significant risk of being exposed to the
 hazardous substance.  Conference
 Report. RR. Rep. No. 98-962,99th Cong,
 2d Sess. 254-U (1966). Use of
 "permanent" storage containers or other
 containment technology does net qttUfy
 as permanent immobilization under this
 provision.
  Finally, under either of the two
 circumstances in section 122(f)(2). the
 special covenant applies only to those
 hazardous substances actually
 transported offsite or destroyed
 eliminated, or permanently immobilized.
 Thus to the extent that hazardous
 substances remain onsite. the standard
 reopeners for future liability must be
 included in the convenant not to sue. For
 example. Site X has soil contamination
 to a depth of 30 feet but under present
 health standards only the first Five feet
 need to be incinerated. Assuming the
 incineration process meets the
requirements of section 122(0(2X8). a
special convenant may be granted for
the incinerated soil but under no
circumstances would a covenant not to
sue for future liability without the
standard reopeners be issued for the
contaminated lower 25 feet of soiL
IV. Status of Interim Settlement Policy
  The Interim Settlement Policy remains
in effect to the extent not contradicted
by SARA or by this or any other
subsequent guidance. Nonetheless. •
number of points from that policy are
worth re-emphasizing:
  (1) Covenants not to sue will not be
issued for redisposal liability unless
section 12Zf.fl(2)(A) applies:
  (2) Covenants not to sue in
agreements where EPA has performed
the remedy and EPA is seeking only the
recovery of its costs should be no more
expansive than covenants not to sue in
consent decrees where the responsible
parties agree to  do the remedy;
  (3) A covenant not to sue may be
given only to the responsible party
providing consideration for the
covenant:
  (4) The covenant not to me must not
cover any claims other than those
involved  for that site—thus unless
unusual factors an present the covenant
not to sue will apply only to claims
under sections 106 and 107 of CERCLA
and section 7003 of RCRA:
  (S) The covenant not to sue must
expressly be limited to civil claims:
  (6) A covenant not to sue for a
remedial investigation and feasibility
study or a removal action must be
limited to the work actually completed:
  (7) A covenant not to sue regarding
natural resources may only be provided
by the Federal trustee responsible for
those resources:
  (8) Responsible parties must release
any related claims against the
Hazardous Substances Superfund.
  Toe policies and procedures
established in this document are
intended solely for the guidance of
government personnel They are not
intended and cannot be relied upon to
create any rights, substantive or
procedural, enforceable by any party in
litigation with the United States. The
Agency reserves the right to act at
variance with these policies and
procedures and to change them at any
time without public notice.
Covenant Not To Sue
  1. A. Except as specifically provided
in Stibparsfnph C. the United Sl*m
covenants nqt to sue the settling parties
for Covered Matters. Covered Matters
shall include any and all civil liability to
the United States for causes of action
arising under if 106 and I07(a) of
CERCLA and i 7003 of RCRA relating to
the Site.
  & With respect to future )•-: ui:>. this
covenant not to sue sh»li i»'« Affect
upon certification by E>'/\ 01 the
completion of the remedial action. A
determination regarding certficauon of
completion will be made by EPA within
[one. year) of successful completion of
the activities listed in Appendix       -
  C. Notwithstanding any other
provision in this Consent Decree, the
United States reserves the right to
institute proceedings in this action or in
a new action (1) seeking to compel
Settling Parties to perform additional
response work at the Site or (2) seeking
reimbursement of the United States'
response costs, if:
  (1) For proceedings prior to EPA
certification of completion of the
remedial action.
  (i) Conditions at the Site, previously
unknown to the United States, are
discovered after the entry of this
Consent Decree, or
  (ii) Information is received, in whole
or in part after the entry of this Consent
Decree.
and these previously unknown
conditions or this information indicates
that the remedial action is not protective
of human health and the environment:
  (2) For proceedings subsequent to EPA
certification of completion of the
remedial action.
  (i) Conditions.st the Site, previously
unknown to the United States,  are
discovered  after the certifiestion of
completion, by EPA. or
  (ii) Information received, in whole or
in part, after the certification of
completion by EPA.
and these previously unknown
conditions or this information indicates
that the remedial action is not protective
of human health and the environment.
  D. The United States' right to institute
proceedings in this action or in a new
action seeking to compel Settling Parties
to perform additional response work at
the Site or seeking reimbursement of the
United States for response costs «t the
Sits, may only be exercised where the
conditions in subparagraph C are met.
[Caution: check to insure that this
subparagraph does not waive other
reserved rights in the decree relating to
additional response work.)
  E. Notwithstanding any other
provision in this Consent Decree, the
covenant not to sue in subparagraph A
shall not relieve the settling parties of
their obligation to meet and maintain

-------
 28044
-Federal Register / Vol.  51 No.  143 / Monday. July 27. 1987 / Noticei
 compliance with tht requirement! iet
 forth in thii Content Dtcree including
 (he Record of Decision and Remedial
 Design for the Site which i$ incorporated
 herein.
 |FR Doc. S7-1W4S Tiled 7-V-W. &45 nm|
 FEDERAL DEI»OSrr INSURANCE
 CORPORATION

 Information CoOaetion Submtttvd to
 OMB lor Review

 AOIMCY: Federal Deposit Iniurtnct
 Corporation.
 ACTION: Notice of information collection
 submitted to OMB for review and
 approval under the Paperwork
 Reduction Act of 1900.
 Title of Information Collection
  Consolidated Reports  of Condition
 and Income (Insured Stale Nonmember
 Commercial Banks) (OMB No. 3064-
 0052).

 Background
  In accordance with requirements of
 the Paperwork Reduction Act  of 1980 (44
 U.S.C. Chapter 35). the FD1C hereby
 gives  nonce that it has submitted to the
 Office of Management and Budget a
 request for OMB review  for the
 information collection system  identified
 above.
ADOftESS: Written comments regarding
 the submission should be addressed to
 Robert Fishman. Office of Information
 and Regulatory Affairs. Office of
Management and Budget. Washington.
 DC 20503 and to  John Keiper. Assistant
 Executive Secretary. Federal Deposit
 Insurance Corporation. Washington. DC
 20429.

 Comments:
  Comments on this collection of
 information should be submitted on or
 before August 26.1967.
 TOW fUMTMUl MPOmfUVnON COWTACr
 Requests for a copy of the submission
 should be sent to John Keiper. Assistant
 Executive Secretary. Federal Deposit
 Insurance Corporation. Washington. DC
 20429. telephone (202) 696-3610.
 SUMMARY: The FDIC is submitting for
 OMB review changes to  the
 Consolidated Reports  of Condition and
 Income (Call Reports) filed quarterly by
 insured state nonmember commercial
 banks. These revisions were approved
 at the April 21.1967. meeting of the
 Federal Financial Institutions
 Examination Council (FFIEC) and are
 designed to reduce the reporting burden
 imposed by Call Report Schedule RC-).
 "Repricing Opportunities for Selected
                   Balance Sheet Categories." while
                   preserving rate sensitivity data esaential
                   to the commercial bank surveillance
                   activities of the three federal banking
                   agencies. The proposed changes involve
                   simplifying the methods used for
                   presenting maturity and rephcing
                   frequency data. These changes. Lf
                   approved, would become effective as of
                   the March 31.1968. report date.
                     The FFIEC approved one other change
                   la the Call Report requirements that is
                   unrelated to Schedule RC-J. This
                   involves a change in reporting the
                   "Loans secured by 1-4 family residential
                   properties" item in the loan schedule
                   (Schedule RC-C). This change would
                   become effective as of the December 31.
                   1967. report date.
                     As a result of the proposed changes it
                   is estimated that insured state
                   nonmember banks, collectively, would
                   receive an annual reduction in reporting
                   burden of 121.006 hours. The annual
                   reporting burden on these banks would
                   then amount to 668.996 hours.
                     Dated: |uly a. IM:.
                   Federal Dtposii Insurant* Corporation.
                   Man, tret M. Olsea,
                   Dfpury ExKutiv* SfCffiary.
                   (FR Doc. 87-16944 Filtd 7-24-*7: MS am)
                   SUJJM COM «7 !«-»»-«•
                   FEDERAL EMERGENCY
                   MANAGEMENT AGENCY

                   (FEMA-7t»-Oft!

                   Major Draastef and Related
                   Determination* Iowa

                   AOfNcr. Federal Emergency
                   Management Agency.'
                   Acno*: Notice.	

                   SUMMANV: This is a notice of the
                   Presidential declaration of a major
                   disaster for the State of Iowa. (FEMA-
                   7BS-DR). dated July 17.1987. and related
                   determinations.
                   OATto: July 17.1967.
                   POS) PUPnMES) ttffOWBA^OH COt
                   Scwall RE. Johnson. Disaster
                   Assistance Programs. Federal
                   Emergency Management Agency-.
                   Washington. DC 20472, (202) 646-3616.

                   Notice
                     Notice is hereby given that, in • letter
                   of July 17.1987. the President declared •
                   major disaster under the authority of the
                   Disaster Relief Act of 1974. as amended
                   (42 U.S.C. 5121 tt uq.. Pub. L. 93-268).
                   ai follows:
                     I havt dttermintd that th* damaat in
                   certain tnas of tht Suit of Iowa mulling
                   from Mvtrt storm* and flooding during tht
                   period May 26 through 31.1M7. is of
       t severity and magnitude 10 warrant
* mator
-------
                STATES ENVIRONMENTAL PROTECTION \GENO
                        WASHINGTON. DC. :o4«o
                                                    OSWER » 9841.1
                            JUL  I 6  1987
MEMORANDUM

SUBJECT:  Interim Guidance on Use of Administrative Penalty
          Provisions of Section 109 of CERCLA and Section
          325 of SARA

FROM:     Thomas L. Adams, Jr. iy
          Assistant Administrator

TO:       Regional Administrators
          Regional Counsels
          Directors, Regional Waste Management Divisions


     This memorandum provides interim guidance on the use of the
new administrative penalty provisions of the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA),
<»2 U.S.C. 9601 et seq. and the Superfund Amendments and Reauthori-
zation Act (SARA) or 1986, Pub. L. No. 99-499.  Section 109 of SARA
amended CERCLA by adding civil penalties for violations of certain
provisions of CERCLA or agreements entered into pursuant to the
Act.  The penalties may be.assessed in an administrative action or
in a judicial action.  SARA also created the Emergency Planning and
Community Right-to-Know Act of 1986.  Section 325 of Title III
provides for civil and criminal penalties for violations of the
notification and planning requirements of that Title.

Background

     Section 109 and Section 325(b) established two classes of
administrative penalties.  Those classes differ trom each other
with respect to procedures for assessing and collecting penalties
and the maximum penalty available.  EPA may assess Class I
administrative penalties of not more than $25,000 per violation for
violations of the provisions specified in Section TUTCa) and section
325(b).  In determining the amount of the Class I penalty, EPA must
consider the factors specified.in Section 109(a)(3) or Section
325(b)(l)(C).  EPA may assess Class II administrative penalties of
not more than $25,000 per day for each day the violation continues
for violations of provisions specified in Section 109(b) or Section
325(b).  For subsequent Class II violations, the penalty may be not
more than $75,000 for each day of violation.

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                                -  2  -
      Section  109  and  Section  325(b) also established different
 procedures  for  the  two  classes  of penalties.  For Class I
 penalties under-Section 109 or  Section 325 EPA must provide notice
 and  opportunity for a hearing but the proceedings are not subject
 to  the Administrative Procedure Act (APA).  EPA may subpoena
 witnesses and documents  for Class I proceedings.  The person
 aggrieved by  the  penalty action may seek judicial review in a
 United States District  Court.   In such a case, EPA must file in
 the  court a certified copy of the record on which the penalty
 was  based.  OECM-Waste  Division is developing Class I penalty
 procedures, and expect  to issue these procedures shortly.

      For Class  II penalties under Section 109 and Section 325,
 EPA  must provide  notice  and opportunity for a hearing in
 compliance with Section  554 of  the APA, 5 U.S.C. 554.  For Section
 109  penalties,  the person aggrieved by the penalty action may seek
 judicial review in a  United States Court of Appeals.  For Class II
 penalties under Section  325,  the person aggrieved by the penalty
 action may seek judicial review in a United States District Court.

      Class II proceedings are similar to formal adjudicatory
 penalty proceedings conducted by the Agency under other
 environmental statutes.  The  Consolidated Rules of Practice,
 promulgated by EPA at 40 CFR  Part 22, govern the administrative
 assessment under  the  APA of penalties available under other statutes.
 To make these rules applicable  to Class II proceedings under Section
 109 and Section 325,  OECM-Waste Division will promulgate a rule
 providing that  the Consolidated Rules shall govern proceedings for
 the assessment of Class  II administrative penalties under those
 provisions.

    The United States may also  bring a civil action in a district
court to collect  penalties of not more than $25,000 per day for
each  day of violation for violations of chose provisions specified
 in Section I09(c) and in Section 325(b).  For subsequent violations,
 EPA may seek penalties  of up  to $75,000 for each.day of violation.
 In addition to chc Class I and  Class II penalties for violations
 specified in Section  325(b),  Sections 325(a), (c), and (d) provide
 for civil and administrative  penalties for violating the require-
ments specified in chose provisions.  The United States may also
 seek  criminal sanctions under Section 103 of CERCLA for violations
of the release notification requirement.  SARA amended Section 103
 of CERCLA by increasing  che maximum penalties for such criminal
violations.  Sections 325(b)  and (d) also provide for criminal
 penalties.

 Current Procedures

      Prior to completion of che procedures for Class I penalcies
 and che promulgation  of  che rule amending che Consolidaced Rules,

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                               - 3 -
EPA may  seek civil penalties under Section 109 or Section
325 under one of two approaches.  First, the Regions may file
administrative actions assessing the Class 1 or Class II penal-
ties of  Sections 109 or 325(b) or the administrative penalties
in Sections 325(c) and 325(d).  In filing such actions, the Region
on an  interim basis should comply with the Consolidated Rules, 40
CFR Part 22.  After the Class I penalty procedures are completed.
Class  I  administrative penalties should be assessed in compliance
with those procedures.  The Regions may also prepare a judicial
referral for civil action or a judicial referral for criminal
action.  Orders under Section 325(a) may be enforced after a
judicial referral.

     In  the near term, EPA will be using Section 109 most
frequently to seek administrative penalties for violations of
the notice requirements of Section 103(a) and (b).  Until further
guidance is available, we have attached for your use a chart
showing  the elements needed to prove a violation of Section 103(a)
or (b),  background information in the reportable quantities provi-
sions, and a sample certification by a person at the National
Response Center that no notice was received.  More detailed
guidance on the assessment of administrative penalties under
Sections 109 and 325 is now being developed by OECM-Waste Division
and che Office of Waste Programs Enforcement.  For further infor-
mation contact Frances McChesney at FTS 475-9437.

Attachments

cc:  Lisa K. Friedman
     Gene A. Lucero
     Regional Counsel Hazardous Waste Branch Chiefs

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                            PRIHA FACIE CASE
            SECTION 103(B) CERCLA. M2 U.S.C. SECTION 9603(B)
                              NOTIFICATION
 FACT TO IE PROVED

PERSON IN CHARGE OF
VESSEL OR FACILITY

HAS KNOWLEDGE OF
RELEASE OF

HAZARDOUS SUBSTANCE
STATUTORY BASIS
  103U). (B)
  I03(A).
            COMMENTS
  103U). (B)

  103U), (B)
 EVIDENCE  SHOWING PERSON is IN
 CHARGE
         OF RELEASE MAY BE INFERRED ;
STANDARD IN CIVIL CASKS LESS T1IAN
IN CRIMINAL CASES

EVIDENCE  OF RELEASE

EVIDENCE  THAT  SUBSTANCE
RELEASED  IS HAZARDOUS

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                            PRIHA FACIE CASE
            SECTION 103(8) CERCLA. M2 U.S.C. SECTION %03(B)
                              NOTIFICATION
                               (CONTINUED)
 FACT TO BE PROVED

IN REPORTABLF.
QUANTITY
WHO FAILS TO REPORT
THE MCIEASE
STATUTORY BASIS

  103(A). (B)
           COMMENTS
  103(8)
EVIDENCE THAT RELEASE UAS
EQUAL TO OR EXCEEDED
REPORTABLE QUANTITY

CERTIFICATION BY NRC THAT IT
UAS NOT NOTIFIED

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                 BRIEFING ON


    REPORTABLE QUANTITIES IMPLEMENTATION
                     BY
         EMERGENCY RESPONSE DIVISION
 OFFICE  OF EMERGENCY  AND REMEDIAL  RESPONSE
OFFICE OF SOLID WASTE AND EMERGENCY RESPONSE

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                            TOPICS
STATUTORY AUTHORITY
PURPOSC or RcroRTmc QUANT IT i us
RQ ADJUSTMENTS
RQ ADJUSTMENT METHODOLOGY
RCIATIONSHIP BETWEEN CERCLA AND CUA
REPORTING REQUIREMENTS
DETERMINING WHEN AN RQ HAS BEEN REIEASED
FEDERALLY PERMITTED AND CONTINUOUS RELEASE REPORTING EXEMPTIONS

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                       STATUTORY AUTHORITY
 CERCLA SCCTION 101(11) DEFINES  "HAZARDOUS SUBSTANCE* BY  REFERENCE TO
 OTHER ENVIRONMENTAL STATUTES.  INCLUDING!

 —   CLEAN WATER ACT (CUA) SECTIONS  311  AND 307•
 --   CLEAN AIR ACT (CAA) SECTION ll?i
 --   RESOURCE CONSERVATION AND RECOVERY  ACT (RCRA) SECTION  3001i  AND
 —   Toxic SUBSTANCES CONTROL ACT  (TSCA) SECTION 7.

 IN  ADDITION. THE ADMINISTRATOR  HAS  THE  AUTHORITY UNDER SECTION  102 TO
 DESIGNATE ADDITIONAL HAZARDOUS  SUBSTANCES THAT "WHEN RELEASED  INTO THE
 ENVIRONMENT NAY PRESENT SUBSTANTIAL DANGER TO THE PUBLIC HEALTH  OR
 WELFARE  OR THE ENVIRONMENT."   I,PA IS IN  IIIK IHOCF.SS or DKSICNATINC FJCTRF/TCI.Y
HAZARDOUS SHRSTANCFS OF TIT1,F. Ill OF SARA AS HAZARDOUS SimSTANCF-S AND SFTTINC R<)S.
 THERE ARE CURRENTLY 70S HAZARDOUS SUBSTANCES. INCLUDING  INDIVIDUAL
 CHEMICALS AND WASTE STREAMS.   Mil' SllllSTANCKS AIM-; I.ISTKD AT 4O CFH PART 102.

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                      STATUTORY  AUTHORITY
                          (CONTINUED)
UNDER THE REGULATIONS IMPLEMENTING SECTION 103. RELEASES or A
HAZARDOUS SUBSTANCE WITHIN A 2M-HOUR PERIOD IN A QUANTITY EQUAL TO OR
GREATER THAN ITS "REPORTABLE QUANTITY* MUST BE REPORTED IMMEDIATELY TO
THE NATIONAL RESPONSE CENTER (NRC).  CRIMINAL PENALTIES HAY BE IMPOSED
FOR FAILURE TO REPORT PROPERLY.

REPORTABLE OUANTITITES (RQs) ARE STATUTORILY SET AT 1 POUND OR AT THE
RO ESTABLISHED UNDER CWA SECTION 311.

THE ADMINISTRATOR HAS THE AUTHORITY UNDER SECTION 102 TO ADJUST BY
REGULATION STATUTORY ROs.
                            - 3 -

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                   PURPOSE OF REPORTABLE QUANTITIES
B   RQS SERVE AS A TRIGGER FOR NOTIFICATION TO THE FEDERAL GOVERNMENT OF A
    HAZARDOUS SUBSTANCE RELEASE.

B   ROS DO NOT NECESSARILY REFLECT THE DEGREE OF RISK POSED BY HAZARDOUS
    SUBSTANCES.

B   ONCE A RELEASE IS REPORTED. EPA DETERMINES WHETHER A FEDERAL FIELD
    RESPONSE IS WARRANTED.

B   NOT ALL REPORTABLE RELEASES NECESSITATE A FIELD RESPONSEi CONVERSELY.
    SITUATIONS CAN OCCUR WHERE A RELEASE OF LESS THAN AN RO CAN RESULT IN
    RISKS TO PUBLIC HEALTH OR WELFARE OR THE ENVIRONMENT.

B   EXCEPT FOR FEDERALLY PERMITTED RELEASES. RELEASERS ARE LIABLE FOR
    RESPONSE COSTS AND NATURAL RESOURCE DAMAGES RESULTING FROM A HAZARDOUS
    SUBSTANCE RELEASE. REGARDLESS OF THE QUANTITY RELEASED.
                                 - M -

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                         RQ ADJUSTMENTS
RO ADJUSTMENTS ALLOW GOVERNMENT OFFICIALS TO FOCUS ATTENTION ON THOSE
RELEASES THAT HAY POSE  THE  GREATEST THREAT TO PUBLIC HEALTH AND
WELFARE AND THE ENVIRONMENT.

RQ ADJUSTMENTS FOR  387  HAZARDOUS SUBSTANCES WERE PROPOSED IN AN NPRM
PUBLISHED IN THE FEDERAL REGISTER ON HAY 25. 1983.  ON APRIL M. 1985.
EPA PUBLISHED!

—  A FINAL RULE ADJUSTING  ROS  FOR 310 OF THE HAZARDOUS SUBSTANCES FOR
    WHICH RO ADJUSTMENTS WERE PROPOSED IN HAY 1983t AND

—  AN NPRH PROPOSING RO ADJUSTMENTS FOR 105 ADDITIONAL CERCLA
    HAZARDOUS SUBSTANCES.

RQS OF THE REMAINING 260 SUBSTANCES (PRIMARILY POTENTIAL CARCINOGENS)
ARE BEING ADJUSTED  AND  WILL FORM THE BASIS OF A THIRD NPRH. RQS Rtt
limNTlAl, CARClNOGIvNS AND RADIDNIICUIWS WIN, UK IKONIIIXMTKI) IN I')B7.
FUTURE RQ RULEMAKINGS WILL  PROVIDE CLARIFICATION OF THE REPORTING
EXEMPTIONS FOR CONTINUOUS RELEASES AND FEDERALLY PERMITTED RELEASES.
TMORF WnJMWClNnS WIN, \\f. lltnMinr,ATKI) IN IOH7.

                             - 5 -

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               RQ AS TRIGGER FOB RELEASE NOTIFICATION
                                  REPORT
                                  REQUIRED
                                FROM PERSON
                                 IN CHARGE
NRC
       RELEASE OF
 HAZARDOUS SUBSTANCES
(Air. GraNNrf Wattr, Sarfaco
    Wattr. And
                                NO REPORT
                                REQUIRED
ALERT APPROPRIATE
    AGENCIES:
 EPA/USCG REGIONS.
 STATE. AND LOCAL
          DETERMINE IF NEED
           EXISTS FOR FIELD
           RESPONSE ACTION
  NATIONAL RESPONSE CENTER
      (100) 424 - 0002

WASHINGTON. D.C. METRO AREA
      (2021 420 - 2075
 * PANTIES MAY IE RESPONSIBLE FON RESPONSE COSTS OH NATURAL RESOURCE OAMAGES

   EVEN IF THE AMOUNT RELEASE! IS IESS THAN THE APPLICAI1E MO.

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                      RQ ADJUSTMENT METHODOLOGY

t   THE RQ ADJUSTMENT METHODOLOGY IS BASED ON SCIENTIFIC AND TECHNICAL
    ANALYSIS OF THE CHARACTERISTICS OF THE HAZARDOUS SUBSTANCES.

•   THE PROPOSED RO ADJUSTMENTS USE CRITERIA THAT FOCUS ON A SUBSTANCE'S
    TOXICITT AND ITS CHEMICAL CHARACTERISTICS!

    —  AQUATIC TOXICITYI
    —  MAMMALIAN TOXICITT  (ORAL. DERMAL. INHALATION)i
    —  iGNITABILITYl
    —  REACTIVITY*
    —  CHRONIC TOXICITYI  AND
    —  CARCINOGENICITY.

•   ROS CAN BE ADJUSTED UPWARD ONE LEVEL BASED ON BIODEGRADABILITY.
    HYDROLYSIS. OR PHOTOLYSIS.

t   EACH HAZARDOUS SUBSTANCE IS ASSIGNED ONE RO APPLICABLE TO RELEASES TO
    ALL MEDIA (LAND. AIR.  WATER).
                                 - 6 -

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             RELATIONSHIP BETWEEN  CERCLA  AND CWA
THE FOLLOWING ASPECTS OF THE CWA'S APPROACH TO DEALING UITH RELEASES
OF HAZARDOUS SUBSTANCES HAVE BEEN ADOPTED UNDER CERCLAs

—  THE rive RO LEVELS or 1. 10. 100. 1000. AND 5000 POUNDSi

—  THE MIXTURE RULE FOR DETERMINING IF NOTIFICATION IS REQUIRED FOR
    HIITURES OR SOLUTIONS CONTAINING HAZARDOUS SUBSTANCES)

--  THE 2M-HOUR PERIOD FOR MEASURING WHETHER A REPORTABLE QUANTITY OF
    A HAZARDOUS SUBSTANCE HAS BEEN RElEASEDi AND

--  THE REQUIREMENT THAT RELEASES BE REPORTED IMMEDIATELY TO THE NRC.
                             - 7  -

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                  RELATIONSHIP BETWEEN  CERCLA AND CWA
                             (CONTINUED)
•   THE CWA IS LIMITED IN SCOPE AND DIFFERS FROM CERCLA IN THE FOLLOWING
    RESPECTSs

    —  CERCLA COVERS RELEASES INTO ALL ENVIRONMENTAL MEDIA. UNLIKE THE
        CWA WHICH COVERS ONLY NAVIGABLE WATERS I

    —  CERCLA DOES NOT COVER OIL SPILLS. UNLIKE THE CWA WHICH REQUIRES
        OIL SHEENS TO BC REPORTED TO THE NRCi

    —  CWA SECTION 311 RQS ARE BASED ON AQUATIC TOXICITYi BECAUSE CERCLA
        APPLIES TO All ENVIRONMENTAL MEDIA. ROS BASED SOLELY ON AQUATIC
        TOXICITY ARE NOT SUFFICIENT FOR THE CERCLA NOTIFICATION AND
        RESPONSE PROGRAMi AND

    —  CWA SECTIONS 311 AND 307 TOGETHER COVER ONLY A PORTION OF THE
        SUBSTANCES DEFINED AS HAZARDOUS UNDER CERCLA.
                                 - 8  -

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                        REPORTING REQUIREMENTS
•   MECHANICS or NOTIFICATION.  As SOON AS A RCUASER HAS KNOWLEDGE THAT A
    REPORTAIU RCLCASC HAS OCCURRED. THE NRC HUST BE CALLED IMMEDIATELY.
    SUBPARTS E AND F OF THE PROPOSED NCR ALLOW THE RELEASER TO NOTIFY THE
    DESIGNATED OSC IN THE APPROPRIATE EPA REGION AND U.S. COAST GUARD
    DISTRICT IF NOTIFICATION TO THE NRC is IMPRACTICAL.

•   PERSONS COVERED.  PERSONS IN CHARGE OF A FACILITY OR VESSEL ARE
    REQUIRED TO NOTIFY THE NRC OF REPORTABU RELEASES.

    —  "PERSONS IN CHARGE* CAN BE INTERPRETED TO INCLUDE INDIVIDUALS AS
        WELL AS PUBLIC. PRIVATE. AND GOVERNMENT ENTITIES.

    --  "FACILITY* is BROADLY DEFINED FOR LAND-BASED STATIONARY SOURCES
        AND VEHICLES.

    —  "VESSEL* is ALSO BROADLY DEFINED TO INCLUDE PRACTICALLY ANYTHING
        THAT FLOATS.

    —  THE MAJOR EXCEPTIONS TO THESE DEFINITIONS ARE CONSUMER PRODUCTS IN
        CONSUMER USE.
                                - 9 -

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                        REPORTING REQUIREMENTS
                              (CONTINUED)

•   SUBSTANCES COVEHEP.  ALL 70S HAZARDOUS SUBSTANCES LISTED IN THE APRIL
    M. 1985 FINAL RVLC ARC COVCRCDi ADDITIONAL SUBSTANCES HAT BE ADDED.
    (OSU INTENDS TO ADO ABOUT 120 MORE HAZARDOUS WASTES TO THE RCRA
    SECTION 3001 LIST IN THC NEAR FUTURE.)  SUBSTANCES THAT ARE NOT LISTED
    IN THE FINAL RULE ALSO NAY BE HAZARDOUSt

    —  SUBSTANCES ARE NOT LISTED UNDER ALL rossmc NAMESi AND

    —  WASTES WITH ICR.E CHARACTERISTICS ARE HAZARDOUS (IF NOT
        SPECIFICALLY LISTED THESE WASTES HAVE AN RO OF 100 POUNDS).

•   RELEASES COVERED.  THE DEFINITION OF RELEASE COVERS VIRTUALLY ALL WAYS
    THAT SUBSTANCES HAY ENTER THE ENVIRONMENT.  HOWEVER. FOUR EXEMPTIONS
    ARE PROVIDED UNDER SECTION 101(22)t

    —  RELEASES WHOLLY CONTAINED WITHIN A BUILDING OR STRUCTURE•
    —  MOBILE SOURCES OF AIR EMISSIONSi
    —  SOURCE. BY-PRODUCT. AND SPECIAL NUCLEAR MATERIALi AND
    --  NORMAL APPLICATION OF FERTILIZERS.
                                - 10 -

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               DETERMINING WHEN AN RQ HAS BEEN RELEASED
•   REPORTING PERIOD>  CERCLA ADOPTS 2M-HOURS AS THE PERIOD TO DETERMINE.
    FOR NOTIFICATION PURPOSES. WHETHER AN RO HAS BEEN RELEASED.

t   MIXTURE Run.  RELEASES OF IUXTURES OR SOLUTIONS MUST BE REPORTED IF A
    COMPONENT HAZARDOUS SUBSTANCE OF THE MIXTURE IS SPILLED IN AN AMOUNT
    EQUAL TO OR GREATER THAN ITS RQ.

    —  ROS OF DIFFERENT SUBSTANCES IN A MIXTURE ARE NOT ADDITIVE. SO THAT
        SPILLING A MIXTURE CONTAINING HALF AN RO OF ONE SUBSTANCE AND HALF
        AN RO OF ANOTHER SUBSTANCE DOES NOT REQUIRE A REPORT.

    --  WHEN THE IDENTITIES AND CONCENTRATIONS OF ALL SUBSTANCES IN A
        MIXTURE ARE NOT KNOWN. THE RQ THAT APPLIES TO THE MIXTURE IS THE
        LOWEST RQ OF THE COMPONENT SUBSTANCES.

•   MULTIPLE RELEASES.  WHEN REPORTABLE RELEASES OF THE SAME HAZARDOUS
    SUBSTANCE ARE OCCURRING AT SEVERAL LOCATIONS IN A FACILITY AT THE SAME
    TIME. ONLT ONE REPORT IS .REQUIRED RATHER THAN MULTIPLE REPORTS.
                                  1!

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FEDERALLY PERMITTED AND CONTINUOUS RELEASE REPORTING EXEMPTIONS
SECTION  103 PROVIDES  A CONFUTE  REPORTING  EXCHPTION FOR  FEDERALLY
PERMITTED  RELEASES  AND A  UNITED REPORTING EXCHPTION FOR CONTINUOUS
RELEASES.   TIIF. RlfUttAKINr? HIM, BE nmi.lSlfEl) IN  1987.

THE  UNITED EXENPTION FOR CONTINUOUS  RELEASES APPLIES TO RELEASES THAT
ARE  "CONTINUOUS* AND  'STABLE  IN  QUANTITY AND  RATE.* AND  FOR WHICH THE
APPROPRIATE INITIAL REPORTS NAVE BEEN SUBMITTED.

RELEASES THAT MEET  THESE  CONTINUOUS RELEASE CRITERIA NEED ONLY  BE
REPORTED ANNUALLY.  OR WHEN A  "STATISTICALLY SIGNIFICANT* INCREASE IN
THE  ANOUNT  RELEASED OCCURS.

SECTION  101(10) OF  CERCLA DEFINES RELEASES THAT ARE 'FEDERALLY
PERMITTED." THESE  RELEASES ARE  COVERED BY SPECIFIED PERMITS OR
REGULATIONS UNDER CWA. RCRA.  CAA.  THE MARINE  PROTECTION.  RESEARCH.  AND
SANCTUARIES ACT. THE  SAFE  DRINKING WATER ACT. AND  THE  ATOMIC ENERGY
ACT.

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 A
SB.
                                                          9838-1
                        JUL311987

MEMORANDUM

SUBJECT:  Scope of the CERCLA Petroleum Exclusion  Under
          Sections 101(14) and 104(a)(2)
FROM:     Francis S. B 1 a k e r
          General Counsel (LE-130)

TO:       J. Winston Porter
          Assistant Administrator
            for Solid Waste and Emergency Response  (WH-562A)


     One critical and recurring Issue arising in  the  context  of
Superfund response activities has been the scope  of the  petroleum
exclusion under CERCLA.   Specifically, you have  asked  whether  used
oil which is contaminated by hazardous substances  is  considered
"petroleum" under CERCLA and thus excl-uded from  CERCLA response
authority and liability  unless specifically listed  under  RCRA  or
some other statute.  For the reasons discussed  below,  we  believe
ttiat the contaminants present in used oil or any  other petroleum
substance are not within the petroleum exclusion.   "Contaminants ",
as discussed below, are  substances not normally  found  in  refined
petroleum fractions or present at levels which  exceed  those
normally found in such fractions.  If these contaminants  are
CERCLA hazardous substances, they are subject to  CERCLA  response
authority and liability.

                          Background

     Under the Comprehensive Environmental Response,  Compensation
and Liability Act of 1980 as amended (CERCLA),  governmental
response authority, release notification requirements, and
liability are largely tied to a release of a "hazardous  sub-
stance." Section 104 authorizes government response to releases
or threatened releases of hazardous substances,  or  "pollutants or
contaminants." Similarly, liability for response  costs and damages
under Section 107 attaches to persons who generate, transport  or

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                            - 2 -
9838.1
  dispose of hazardous substances at a site from which there
  is a release or threatened release of such substances.   Under
  Section 103, a release of a reportable quantity of a hazardous
  substance triggers notification to the National  Response
  Center.

     The term "hazardous substance" 1s defined under CERCLA
  Section 101(14) to include approximately 714 toxic substances
  listed under four other environmental statutes,  including RCRA.
  Both the definition of hazardous substance and the definition
  of "pollutant or contaminant" under Section 104(a)(2)  exclude
  "petroleum, including crude oil or any fraction thereof",
  unless specifically listed under those statutes.  !_/  Accordingly,
  no petroleum substance, including used oil, can be a "hazardous
  substance" except to the extent it is listed as a hazardous  waste
  under RCRA or under one of the other statutes.  Thus two critical
  issues in assessing whether a substance 1s subject to CERCLA 1s
  whether or not, and to what extent, a substance 1s "petroleum."
  This memorandum discusses the second type of petroleum  exclusion
  issue.  The question, therefore, is not whether used oil 1s
  "petroleum" and thus exempted from CERCLA jurisdiction,  but  to
  wnat extent substances found in used oil which are not  found 1n
  crude oil  or refined petroleum fractions are also "petroleum".
  If such substances are not "petroleum" then a release of used
  oil  containing such substances nay trigger CERCLA response
  actions,  not to the release of used oil, but to the contaminants
  present in the o11.
iy   The full texts of these provisions are as follows:

     Section 101(14)
          ....
     The term [hazardous substance] does not Include petroleum,
including crude oil or any fraction thereof which 1s not other-
wise specifically listed or designated as a hazardous substance
under subparagraphs (A) through (F) of this paragraph, and
the tern dots not Include natural  gas, natural gas liquids,
liquefied natural gas, or synthetic gas usable for fuel  (or
m'ixtures of natural gas and such-synthetic gas).

Section 104  (a)(2)

     The term [pollutant or contaminant] does not Include
petroleum, Including crude oil and any fraction thereof which
1s not otherwise specifically listed or designated as hazardous
substances under section 101(14)(A) through (F). of this title,
nor does 1t  Include natural gas, liquefied natural gas, or
synthetic gas of pipeline quality (or mixtures of natural gas
and such synthetic gas).

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                                                        9838,f.
     Although the term "hazardous substance" is defined by statute
there  1s no CERCLA definition of "petroleum" and very little direct
legislative history explaining the purpose or Intended scope of
this exclusion.  None of the four early Superfund bills originally
excluded responses to oil, although the apparent precursor to
Section 101(14), found in S. 1480, excluded "petroleum* without
explanation in all versions except that introduced.   The legisla-
tive debates on the final compromise indicate only that Congress
intended to enact later, separate superfund-type legislation to
cover  "oil spills." See generally 126 Cong. Rec. H11793-11802
(December 3, 1980).

     Since the enactment of CERCLA, the Agency has provided some
interpretations of the nature and scope of the petroleum exclusion.
In providing guidance in 1981 on the notification required under
Section 103 for non-RCRA hazardous waste sites the Agency stated
that petroleum wastes, Including waste oil, which are not speci-
fically listed under RCRA are excluded from the definition.of
"hazardous substance" under 101(14).  46 Fed. Reg. 22145
(April  15, 1981). 2_/

     In 1982 and in .1983, the General Counsel Issued two opinions
on the CERCLA petroleum exclusion.  In the first opinion, the
General Counsel distinguished under the petroleum exclusion
between hazardous substances which are Inherent 1n petroleum,
such as benzene, and hazardous substances which are added to or
mixed with petroleum products.  The General Counsel concluded
that the petroleum exclusion Includes those hazardous substances
which are inherent in petroleum but not those added to or mixed
with petroleum products.  Thus, the exclusion of diesel oil as
"petroleum" Includes Its hazardous substance constituents, such
as benzene and toulene, but PCB's nixed with oil would not.be
excluded.. Moreover, 1f the petroleum product and an added
hazardous*substance are so commingled that, as « practical matter,
they cannot be separated, then the entire 011 spill 1s subject to
CERCLA response authority.

     In the second opinion, the General Counsel concluded that
the petroleum exclusion as applied to crude oil "fractions"
Includes blended gasoline as well as raw gasoline, even though
refined or blended gasoline contains higher levels of hazardous
II    In the notice the Agency used the ter« "waste oil"
~     wUhout stating whether it was  Intended to Include all
waste oil or only unadulterated waste on.  The Agency has
subsequently interpreted the reference to  "waste oil" 1n this
notice to Include only unadulterated waste oil.  tO £ed. Rj6£.
13460 (April 4,  1985).

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                            - 4 .                        9838. 1


substances.  The Increased level of hazardous substances  results
from the blending of raw gasoline with other petroleum  fractions
to increase Its octane levels.  Because vi rtual 1y all  gasoline
which leaves the refinery is blended gasoline,  the petroleum
exclusion would include virtually none of this  fraction  if  the
increased concentration of hazardous substances  due only  to its
processing made it subject to CERCLA.

     Finally, the Agency has interpreted the petroleum  exclusion
in two recent Federal Regi ster notices.  In the  April  4,  1985
final rule adjusting reportable quantities  under Section  102,
the Agency provided its general interpretation  of the  exclusion:
              interprets the petroleum exclusion to
          apply to materials such as crude oil,  petro-
          leum feedstocks, and refined petroleum
          products, even if a specifically listed or
          designated hazardous substance 1s present
          in such products.  However, EPA does not
          consider materials such as waste oil to which
          listed CERCLA substances have been added to
          be within the petroleum exclusion.  Similarly,
          pesticides are not within the petroleum
          exclusion, even though the active Ingredients
          of the pesticide may be contained in a petro-
          leum distillate:  when an RQ of a listed
          .pesticide 1s released, the release must be
          reported.

50 Fed.  Reg. 13460 (April 4, 1985).

     In March 10, 1986, the Agency published a notice of  data
availability and request for comments on the proposed used  oil
listing under RCRA.  51 Fed. Reg. 8206.  In that notice,  the
Agency responded to commenters who had argued that the  RCRA
listing would discourage used oil recycling because 1t  would
subject generators, transporters, processors, and users to
Superfund liability.  The Agency stated that used oil which
contains hazardous substances at levels which exceed those
rrormally found 1n petroleum are currently subject to CERCLA.
51 Fed. Reg. 8206 (March 10, 1986).  Although the fact  that
the used oil 1$ contaminated does not remove 1t from the  pro-
tection of the petroleum exclusion, the contaminants 1n the
used oil are subject to CERCLA response authority 1f they are
hazardous substances.  Accordingly, most used oil, even without
a specific listing, would not be fully within the petroleum
exclusion, irrespective of the listing.

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                                                     9838 .1
                          Di scussi on
     Because there is no definition of "petroleum" in CERCLA
or any legislative history which clearly expresses the intended
scope of this exclusion, there are several  possible interpre-
tations which could be given to this provision.   However,  we
believe that our current interpretation, under which "petroleum"
includes hazardous substances normally found in  refined petroleum
fractions but does not include either hazardous  substances found
at levels which exceed those normally found 1n such fractions
or substances not normally found in such fractions, is most
consistent with the statute and the relevant legislative history.
Under this interpretation, the source of the contamination,
whether intentional addition of hazardous substances to the
petroleum or addition of hazardous substances by use of the
petroleum, is not relevant to the applicability  of the petroleum
exclusion.  The remainder of this memorandum explains 1n greater
detail  this interpretation and Its legal basis,  and responds to
arguments raised in opposition to this interpretation.

     The following is our Interpretation of "petroleum" under
CERCLA 101(14) and 104(a)(2), which we believe to be consistent
with Congressional Intent and the position  which the Agency  has
taken on the scope of the petroleum exclusion thus far.  First,
we interpret this provision to exclude from CERCLA response  and
liability crude 011 ana fractions or crude oil, including the
hazardous substances, such as benzene, which are Indigenous  1i
those petroleum substances.  Because these hazardous substanc
are found naturally in all crude oil and Its fractions,  they i
be Included 1n the term "petroleum," for that provision  to ha
liability crude oil and fractions of crude oil, Including the
                                                     jenous  1n
                                                     substances
                                                             must
                                                           have
any meaning.

     Secondly, "petroleum" under CERCLA also Includes hazardous
substances which are normally mixed with or added to crude oil
or crude 611 fractions during the refining process.   This Includes
hazardous substance* the levels of which are Increased during
refining.  These substances are also part of "petroleum" since
their addition Is part of the normal oil separation  and processing
operations at a refinery 1n order to produce the product commonly
understood to be "petroleum."

     Finally, hazardous substances which are added to petroleum
or which Increase 1n concentration solely as a result of con-
tamination of the petroleum during use are not part  of the
"petroleum" and thus are not excluded from CIRCLA under the

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                                                          9838-1
                             -  6  -


 exclusion.  3y   In  such  cases,  EPA may  respond to releases.of the
 added  hazardous  substance,  but not the oil  Itself.

     We  believe  that  an  Interpretation of  "petroleum" to Include
 only indigenous,  refinery-added  hazardous  substances 1s the
 Interpretation  of  this  provision which is  most consistent with
 Congressional  intent.   The  language of the provision, Its
 explanation  in  the  legislative h1-story, and the Congressional
 debates  on  the  final  Superfund bill clearly Indicate that Congress
 had no  intention  of  shielding  from Superfund response and liability
 hazardous substances  merely  because they are added, Intentionally
 or by  use,  to  petroleum  products.
                                                                 H
      The  language  of  the  petroleum exclusion describes "petroleum
principally  in  terms'  of crude oil and crude oil fractions.  This
language  is  virtually  Identical to the  language used in an earlier
Superfund  bill  to  define  "oil." £/  There  1s no Indication 1n the
statute or  legislative history that the term "petroleum" was to
be  given  any meaning  other than Its ordinary, everyday meaning.
See Malat  v. Riddel!.  383 U.S. 569, 571 (1966)  (words of a statute
should be  interpreted where possible 1n their ordinary, everyday
sense).   Petroleum  is  defined in a standard dictionary as
_3/   The mixing of two  or more  excluded petroleum substances,
~~    such as blending of fuels, would not  be considered con-
tamination by  use, and  .the mixture WDuld thus also be an
excluded substance.

4_/   See H.R.  85, 96th  Cong., 2d Sess. §101(s)  (as passsed by
     the House, September 1980) (""Oil" means petroleum,
including crude oil  or  any fraction or residue  therefrom").
H.R. 85 was designed principally to provide compensation and
assess 11'ability  for oil tanker spills in  navigable waters.
As discussed below,  the omission of this "oil spill" coverage
under the petroleum  exclusion was believed to be the most
significant omission 1n terms of response  to environmental
•releases under the final Superfund bill.

     Although  the bill  containing the precursor to Section
101(14), S. 1480, does  not have a definition of "petroleum".
Us accompanying  report did  explain the term "petroleum oil"
in the context of the taxing provisions:

     The term  "petroleum oil" as used in subsection 5 means
     petroleum, including crude petroleum  and any of its
     fractions or residues other than carbon black.

S. Rep. No. 96-848,  96th Cong., 2d. Sess. 70  (1980).

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                                                        9838.1


          an  oily  flammable bituminous liquid that
          may vary from almost colorless to black,
          occurs 1n many places 1n the upper strata
          of  the earth, is a complex mixture of
          'hydrocarbons with small amounts of other
          substances, and is prepared for use as
          gasoline, naphtha, or other products by
          various  refining processes.

Webster's Ninth New Collegiate Dictionary 880 (1985).   Thus,  an
interpretation of  the phrase "petroleum, including crude oil  or
any fraction  thereof" to include only crude oil, crude oil
fractions, and refined petroleum fractions is consistent with
the plain language of the statute. 5_/

     The only legislative history which specifically discusses
this provision states that

          petroleum, including crude oil and including
          fractions of crude oil which are not otherwise
          specifically listed or designated as hazardous
          substances under subparagraphs (A) through (F)
          of  the definition, 1s excluded from the defini-
          tion of  a hazardous substance.  The reported
          bin does not cover spills or ot"her releases
          strictly of olfl
S. fiep. No. 96-848, 96th Cong., zd Sess. 29-30 (1980) (emphasis
added).  Thus, the petroleum exclusion 1s explained as an
exclusion from CERCLA for spills or 'releases only of oil.
The legislative history clearly contemplates that the petroleum
5/   This .distinction under the exclusion 1n Title I of
~~    CERCLA between petroleum as the substance that leaves
the refinery and the hazardous substances which are added to
1t prior to, during or after use was also made by Congress 1n
Title II, the revenue provisions or CERCLA.  In Title II,
Congress Bade a distinction between "chemicals', petrochemical
feedstocks and Inorganic substances, taxed 1n Subchapter B of
Chapter 38 of Internal Revenue Code, and "petroleum', crude
oil and petroleum products, taxed 1n Subchapter A.  Section
211 of CERCLA.  The 11st of taxed chemicals Includes »any of
the contaminant hazardous substances typically found 1n used
oil:  arsenic, cadmium, chromium, lead oxide, and mercury.
The terra  'petroleum products" was explained 1n the legislative
history as Including essentially crude oil and Its refined
fractions.  H. Rep. No. 96-172, Part III, 96th Cong., 2d
Sess. 5 (1980) (to accompany H.R. 85).

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                                                        9838. 1
                             •  O  —


 exclusion  will  not  apply  to  mixtures  of  petroleum and other
 toxic  materials  since  these  would  not  be  releases "strictly
 of  oil".

     The Congressional  debates on  the.  final compromise Superfund
 legislation  provides further clarification of Congressional
 intent  concerning the  scope  of the  petroleum exclusion, both 1n
 terms  of what  this  provision deleted  from the bill and what it
 did  not.   First, the major concern  expressed with respect to the
 final  compromise bill  was the  omission of its oil spill juris-
 diction due  to  the  petroleum exclusion.   See e.g. 126 Cong. Rec.
 H11787  (Rep.  Florio) (dally  ed.  December TTlTBt); 1d. at H11790
 (Rep.  Broyhill); j_d. at H11792 (Rep.   Madlgan); J^.~i"t H11793
 (Rep.  Studds); j_d.  at  H11795 (Rep.  Biaggi); j_d.  at H11796  (Rep.
 Snyder).   This  omission was  of concern because  1t was believed
 to  leave coastal areas  and fisheries  vunerable  to tanker spills
 of  crude and  refined oil, such as  the  wreck of  the Argo Merchant.
 and  offshore  oil well  accidents.   126  Cong. Rec. H11793 (Rep.
 Studds) (daily  ed.  December  3, 1980).  See also 126 Cong. Rec.
 S10578  (proposed amendment to  S1480 by Sen. Hagnuson)  (dally ed.
 August  1,  1980); id. at S10845 (proposed  amendment to 51*80 by
 Sen.   Gravel)  (daTTy ed.  August  5, 1980).  The omitted coverage
 of  oil  spills  was believed to  Include  approximately 500 spills
 per  year,  126  Cong. Rec.  H11796  (Rep.  Snyder)  (dally ed.
 December 3, 1980),  far  less  than  the  number of  contaminated oil
 releases each year.

     However,  it was clear that  the omission of oil coverage was
 intended to  include spills of  oil  only,  and there was no Intent
-to exclude from the bill  mixtures  of  oil. and hazardous substances
 The  remarks of  Rep. Mikulskl are  typical  of the general under-
 standing of the effect  of the  petroleum 'exclusion in the final
 bill :

     The Senate bill 1s substantially  similar to the House
     measure, with  the  exception  that  there 1s  no o11 title.
           I realize that  1t  1s disappointing to see no oil-
     related  provision  1n the  bill, but  we Must also realize
     that  this  ts our  only chance  to  get  hazardous waste dump
     site  cleanup legislation  enacted. .  . .
           Moreover, there 1s already  a mechanism 1n place that
     1s designed to deal  with  spills  1n  navigable waterways.
     There 1s  not,  however,  any  provision currently 1n our  law
     that  addresses the potentially ruinous situation of
     abandoned  toxic dump sites.
           I,  therefore, believe  that  it  1s Imperative that  we
     pass  the  Senate 6111 as a very Important beginning In  our
     attempt  to defuse  the ticking  environmental time bomb  of
     abandoned  toxic waste sites.

 Id.  at  H11796.

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                             .9-                   9838.1
      In  addition,  several  speakers  specifically Identified such
 mixtures  as  releases  not  only  covered  by the legislation but
 releases  to  which  the  bill was  addressed.

      Mr.  Edga r  ...
           In  my  State,  hazardous  substances problems have been
      discovered  at  an  alarming  rate  in  recent years.  In the
      summer  of  1979,  an  oil  slick appeared on the Susquehanna
      River near  Pittston,  Pa.   When  EPA officials responded
      under section  311  of  the  Clean  Hater Act, they learned
      that  the slick contained  a  variety of highly poisonous
      chemicals  in  addition to  the oil.
           Officials estimate that more  than 300,000 gallons
      of  acids,  cyanide  compounds, industrial solvents, waste
      oil  and  other  chemicals remain  at  this site where they
      could be washed  to  the  surface  anywhere in a 10-square -
      mile  surface.

 J^d.  at H11798.   See al so  126 Cong.  Rec. S14963 (daily ed.
 November  24,  1980)  (Sen.  Randolph)  (contaminated oil slick).
 Other  petroleum  products  containing  hazardous substance
 additives  intended  to  be  addressed  by  the legislation include
 PCB's  in  transformer  fluid,  1d.  at  S14963 (Sen. Randolph) and
 S14967 (Sen.  Stafford),  dioxTTT 1n motor fuel used as a dust
 suppressant, Jid..   at  514974  (Sen. Mitchell), PCB's  1n waste
 oil,  id.  (Sen.  Hitch-ell)  6/  and  contaminated waste  oil,  Id.
 at S1T580  (Sen.  Cohen)'.  Accordingly,  Congress understood
 the  petroleum exclusion  to remove from  CERCLA jurisdiction
 s.pills only  of  oil, not  releases  of  hazardous substances
 mi xed  wi th the  oi1.

      There are  two  principal arguments  which have been raised
 in opposition to this  Interpretation.   First, the argument
 has  been  made that  this  Interpretation  narrows the  petroleum
 exclusion  to  the extent  that 1t  has  became virtually meaning-
 less.  As* we  have  noted  in previous  opinions on this Issue,
 an interpretation  which  emasculates  a  provision of  a statute
 1s strongly  dlsftvored.   Marsano  v.  Laird. 412 F.2d 65,  70
 (2d  C1p.  1969).   However,  this  Interpretation leaves a
•significant  nuaber  of  petroleum  spills  outside the  reach of
 CERCLA.   Spills  or  releases  of gasoline remain excluded  from
 CERCLA under the petroleum exclusion.   As Indicated by the
 legislative  history for  the  1984  underground storage -tank
 6/    The  Illegal  disposal  of  PCB's  1n  North  Carolina  described
      by  Senator  Mitchell  was  a  result  of  the spraying of  131,000
 gallons  of  PCB-contami nated waste  oil  along  a  roadway.  Siee
 126  Cong. Rec. H9448  (dally ed.  September 23,  1980).

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                                                    9838,1
                            - io -


legislation,  leakage of gasoline from underground tanks
appears to  be the greatest source of groundwater contamination
1n the United States.  130 Cong. Rec.  S2027, 2028 (dally ed.
February 29,  1984)  (Sen. Durenberger).  In addition,  spills
of crude or  refined petroleum are not subject to Superfund,
as was frequently noted prior to Its passage.  See generally
126 Cong. Rec. H11786-H11802  (dally  ed. Decembe7~5, 1980).
Moreover, under this Interpretation  not all releases  of used
oil will be  subject to CERCLA since  used oil does not  neces-
sarily contain non-indigenous hazardous substances or  hazardous
substances  1n elevated levels. 7/  Although used oil  1s
generally "contaminated" by defTnltion, see e.g., RCRA Section
1005  (36),  the Impurities added by use may not be CERCLA
hazardous substances.

      A second argument which  has been made opposing this
interpretation is that Congress intended to Include in the
term  "petroleum" all hazardous substances added through
normal use  of the petroleum substance.  However, even  if it
were  possible to determine in a response situation whether a
hazardous substance was added Intentionally or only through
normal use  or to determine what additions are "Intentional",
the legislative history is contrary  to such a distinction.
As noted above, the Senate Report explaining this provision
states that  1t excludes releases or  spills strictly of oil.
This  explanation expresses Congressional Intent that  releases
of mixtures  of oil and toxic  chemicals* 1_.e. releases  which
are not strictly of oil, would be subject to CERCLA response
authority"!   Releases of contaminated oil even if contaminated
due to "normal use"  are not  releases strictly of oil.

      Furthermore, the Congressional  debates prior to  passage
clearly Indicate an Intent that contaminated oil would be
subject to  Superfund as several such releases were discussed

as the focus  of the legislation.  Congress was concerned
with  the environmental and health effect of abandoned  toxic
waste sites,  not whether the  presence of such hazards  was
Intentional  or due to normal  practices.  In fact, one  of the
petroleuB-hazardous substance Mixtures most often Mentioned
during the  debates was that of PCB contaminated oil,  which
1s a  type of  contamination arguably  resulting from the "normal
use"  of tht  oil In transformers.  Accordingly, an Interpretation
of the petroleu* exclusion which Includes as "petroleum"
hazardous substances added during use of the petroleum would
not be consistent with Congressional Intent.
7/   Data submitted to EPA b-y the Utility Solid Waste
~"    Activities Group et al. 1n Appendix C of their comments
on the RCRA Used 011 listing, February 11, 1986.

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                                                   9838.1
     Finally, although the Superfund Amendments and Reauthori zatlon
Act of 1986  (SARA) contains several provisions related to oil
and oil releases, 1t did not amend the petroleum exclusion under
CERCLA.  Moreover, the new provisions concerning oil  and oil
releases and their legislative history do not Indicate a
Congressional intent inconsistent with this opinion.

     The only discussion of "petroleum" in the Conference
Report for SARA is in the context of defining the scope of the
new petroleum response fund for leaking underground storage
tanks under  Subtitle I of the Resource Conservation and Recovery
Act (RCRA).  Subtitle I defines "petroleum" 1n a manner nearly
identical  to CERCLA.  The Conference Report specifies that
used oil would be subject to the response fund notwithstanding
its contami nation* wi th hazardous substances.  H. Rep. No. 99-962,
99th Cong., 2d Sess. 228 (1986).  The Conference Report is
not Inconsistent with the Agency's position on "petroleum"
under CERCLA since 1t merely specifies that the leaking under-
ground storage tank  (UST) response fund is applicable to tanks
containing certain mixtures of oil and hazardous substances,
as well as to tanks containing uncontaml nated petroleum.  In
fact, the Report further states that the UST response fund
must cover releases of used oil from tanks since "releases
from tanks containing used oil would not rise to the  priority
necessary. . .for CERCLA response", 1d. (emphasis added), not
because such releases would be entTFely excluded from CERCLA
jurisdiction.  See also 132 Cong. Rec. S14928 (dally  ed. October
3, 1986) (Senator Chaffee) (Nothing 1n Section 114, pertaining
to liability for releases of recycled oil, "shall affect or
impair the authority of the President to take a response action
pursuant to Section 104 or 106 of CERCLA with respect to any
release.. .of used oil or recycled oil"); 132 Cong.  Rec. H9611
(dally ed. October 8, 1986) (Rep. Schneider) ("...the oil
companies are rightfully assessed a significant share of the
Superfund tax. ..Waste oils laced with contaminants  have been
Identified at at least 153 Superfund sites 1n 32 States.").

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                                                OSKER * 9835.2b



       3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON. DC 20460

                             SEP 2 I IS87
                                                           OM<|>

                                                         f WOltetM**'
MEMORANDUM

SUBJECT:  Guidance on tht Use of Stipulated Penalties in Harardous
          Waste Content Decrees
FROM:     Thomas L. Adams, Jr.     \\M     U
          Assistant Administrator"     	     '           rv

TO:       Regional Administrators, Regions I-X           v—^
          Regional Counsels, Regions I-X
          Waste Management Division Directors, Regions I-X

     I have attached the final guidance addressing the use of
stipulated penalties in civil judicial settlements under CERCLA
and RCRA Section 7003.  This document reflects comments which were
received from the Office of Waste  Programs Enforcement (OWPE) ,  the
Department of Justice (DOJ), and various Regional offices.

     This guidance does not apply  to administrative orders, such
a,s RI/FS orders.  In addition, to  complement this guidance, the
Agency is considering aoditional guidance to provide positive
incentives for defendants to expedite completion of work under
consent decrees.

     I appreciate your assistance  in the preparation of this
guidance.

Attachment
cc:   J. iHBton Porter, Assistant Administrator  for Solid Waste
        emK&Mrgeney Response
      CeneFA. Lucero, Director, Office  of Waste Programs  Enforcement
      Roger J. Marxulla, Acting Assistant Attorney General, Land
        and Natural Resources Division,  Department of Justice
      David T. Buente, Chief, Environmental Enforcement Section,
        U.S. Department of Justice

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  GUIDANCE ON THE USE OF STIPULATED PENALTIES

                       IN

        HAZARDOUS WASTE CONSENT DECREES
                       21 198T
 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Offlet of EnforeoDtnc and Compliance Monitoring
                      1987

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                       TABLE OF CONTENTS

          Guidance on the Use of Stipulated Penalties
               in Hazardous Waste Consent Decrees

                                                   Page

I.    INTRODUCTION                                    1

II.   GUIDANCE                                        2
     A.   Use of Stipulated Penalties
         1.  General Rule                             2
         2.  When Penalties May Be Excused
            or Delayed                               4
            a.   Force Majeure trvnt                  4
            b.   Dispute Resolution Period            5
            c.   Period of Correction by
                Defendant                            6
            d.   Missed Interim Deadlines             6
            e.   Grace Period                         6

     B.   Aaount of Stipulated Penalties
         1.  General Rule                             7
         2.  Escalating Penalty                       8
         3.  Sharing Penalties with the State         9

     C.   Collection of Stipulated Penalties
         1.  General Rule                             9
         2.  Procedure for Collecting Penalties      10
         3.  Payment of Penalties                    10

     D.   Use of Other Reaedies                      1 1

     £.   Purpose and Use of this Guidance           12

     APPENDIX - Model Stipulated Penalties Provisions
                              -i-

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 I.    INTRODUCTION
      This  document  provides guidance on th« us* of stipulated
 penalties  in  hazardous waste judicial consent decrees.   Stipulated
 penalties  arc fixed  sums of money chat a defendant agrees to pay
 for violating the tens of a decree.  Such penalties are an
 effective  enforceaent tool for encouraging compliance with a
 consent decree.
      This  guidance  applies to consent decrees under the
 Comprehensive Environmental Response. Compensation, and Liability
 Act of 1980 (CERCLA), 42 U.S.C.  I 9601 £t feg.. as aaended, and
 Section 7003  of the  Resource Conservation and Recovery Act of
 1976  (RCRA),  42 U.S.C. S 6973, supplements existing guidance,]/
 issued by  the United States Environmental Protection Agency (EPA),
 and incorporates recent Agency experiences in negotiating and
 overseeing consent decrees;  The .Agency strongly encourages the
 use of stipulated penalty provisions  in consent decrees.  It also
 supports the  use of  contempt penalties, statutory penalties and
 injunctive relief at additional  sanctions for the violation of
 consent decrees.
1/  Set "Drafting  Content  Decrees  in Hazardous Waste  Imminent
Baxa7cTCat«sH  (Office  of Enforcement and  Compliance Monitoring
(OECM), Office of  Solid Watte  and  Emergency  Response  (OSWER),
May 1, 1985).  "Guidance for  Drafting Judicial Content Decrees"
(OECM, October 19,  1983),  "Divition  of Penaltiet  with State  and
Local  Governmentt" (OECM.  October  30, 1985). "Ramittance of  Fines
and Civil Penaltiet"  (OECM,  April  15. 1985)  and  the Superfund
Amendments  and Reauthorization Act of 19b6.

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                              •  2  -

      While chc  concept  of stipulateo penalties al«o has rele-
 vance for administrative orders,  distinctions between fueh
 orders  and content  decrees may  necessitate cove differences in
 precise Application.  Guidance  on use of stipulated penalties
 in  administrative orders will be  provided separately.
 II.   GUIDANCE
A.    Use  of Stipulated  Penalties
      1•   General Rule
      In the past, it has been OECM policy to include stipulated
penalties  in most consent decrees.  See "Guidance for Drafting
Judicial  Consent Decrees" at 22.  Moreover, the Superfund
Amendment*  and  Reauthoritation  Act of 1986 (SARA) requires that
consent decrees which provide for reaedial action?/ contain
stipulated  penalties.   Section  121(e)(2) of SARA provides that:
    ...Each  consent  decree shall also contain stipulated
   penalties for violations of  the decree in an amount
   not  to  exceed $25,000 per .day, which »ay be enforced
   by either the President or the State.  Such stipulated
   penalties shall  not  be construed to impair or affect
   the  authority of the court to  order compliance with
   the  •pacific terms of any such decree.  (Emphasis added).
However, ••felon 121 dot* not  explicitly require that every
requirement  « concent decree  have a stipulated  penalty
attached t» it.
2/ Although Stction  121  deals  with "rtatdial"  actions,  it  is
~  recommenced  that  «tipulattd ptn«ltie» bt included  in consent
decrees for removals "*s  well.

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                             - 3 -
      Section  122(1) Also permits additional penalty sanctions
 for violations of  the  requirements of a content decree.  Sec-
 tion  122(1) of SARA provides as follows:
           (1) CIVIL PENALTIES - A potentially responsible
           party which  is a party to an adainistrative
           order or consent decree entered pursuant to an
           agreement under this section or section 120
           (relating to Federal facilities) or which is
           a party  to an agreement under section 120
           and which fails or refuses to coop .y with
           any ten or  condition of the order, decree
           or  other agreement shall be subject to a
           civil penalty in accordance with section 109.
Thus, in the  context of a CERCLA consent decree with mandated
stipulated penalties,  both the stipulated penalties contained
in the consent decree  and the Section 122(1) penalties Bay be
assessed for violations of the terns of the decree.  However.
in limited circumstances, where the stipulated daily penalty
amounts are sufficiently high to effectively deter noncompliance
with the decree, the Agency may consider waiving Section 122(1)
penalties.  Such penalties nonetheless may be sought for any
violations to which no stipulated penalty attaches.
     SeJBBBfrftd penalties are seldom applicable to noncompli-
ance vi*Mssfef7 requirement of a decree.  Most often they are
applicable] to compliance schedules, performance standards, and
reporting  requirements.  The types of violations for which
stipulated penalties should be required will necessarily depend
on the value  the Agency places on  the activity  to  be performed
and the importance of  timely performance.

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                             - 4 -

      Even  consent decrees which primarily involvt a "cash out"
 (i.e., where  the dtftndanc pays a fixed SUB of money to abaolvt
 himself of his remedial obligations) warrant tht inclusion
 of  stipulated penalties.  For exaaple, if a defendant agrees to
 pay his cash  out share in installments , stipulated penalties
 should be  used to penalize late payments.  If a case arises in
 which the  defendant oust perform certain tasks in addition to
 cashing out (such as providing site access or security), stipu-
 lated penalties should be imposed to ensure that the defendant
 performs those tasks.
2.   When  Penalties May Be Excused Or  Delayed
     Usually stipulated penalties should begin to accrue after
 the date on which complete performance of a particular task is
due.  Stipulated penalties will not necessarily accrue, or the
accrual of such penalties may be stayed or waived, however,
during designated periods or by the occurrence of certain
events.
     a. Fce Maleure
     On* iBPChe mote  common  reasons  for  the noncollection of
•tipulatejmlpcBaltlea  is  the  occurrence of a force majeure
•vent.   A force majeure  event  is  one which is beyond' the control
of the defendant and  provides  the defendant with an  affirmative
£/  Model force majeure  language is forthcoming as an appendix
~   hereto.

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                             - 5 -

 defense  to  a  charge of noncoopliance.  Since penalties do no:
 accrue during  this period, the definition of a force majeure
 event should  be narrowly drawn and the burden placed on the
 defendant to  show that a force majeure event hat occurred.  In
 any  event,  neither increased costs nor financial difficulty
 should constitute a force majeure event.
     b.  Dispute Resolution Period
     To  avoid  creating incentives to dispute consent decree
obligations, stipulated penalties generally should accrue for
any nonperforoance occurring during the period of dispute.
However, for Halted types of disputes, EPA nay agree to waive
the accrual of penalties during the dispute resolution period.
For exaaple, consent decrees often perait the Agency to require
that additional work be perforaed beyond that specifically
provided for in the work plan.  Where the defendants becose
aware of substantial "aid-course corrections" after, the decree
is signed,  it aay be appropriate to forego stipulated penalties
during any  legitimate dispute related to the additional work
sought by _0A*
     Stipulated penalties will not be collected if  the defendan:
wins the dispute.  In addition, in appropriate eircuastances
the Agency Bay ust its discretion not co collect stipulated
penalties,  in whole or in part, which have accrued  during the
dispute  resolution period.

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                             - 6 -
     c. Period of Correction by Defendant
     A stipulated penalties provision nay indicate that penalties
will accrue until the violation is corrected by the defendant.
To miniaize uncertainties and foster ciaely and full compliance,
such a statement should specify that penalties will accrue
through the last day of correction, as determined by the Agency,
rather than cease to accrue on the day the defendant begins to
correct the violation.
     d. Missed Interia Deadlines
     Sosje decrees provide that penalties for  inceria deadline
violations will, not be sought if the defendant meets the final
completion date.  Since in many, instances the final deadline is
the most important, Che penalties  for violations of interim
milestones may be waived in some cases.  It should be clear to
che defendant, however, chat if the final deadline is missed,
the penalties for inceria deadline violacions will be sought in
addition co chose which would accrue afcer  che final deadline.
The "Guidance for Drafting Judicial Consenc Decrees" noces chat
inceria deadline penalties aay be  collected up fronc and  placed
inco an ••crew accounc, co be recurned  co  che defendanc  in the-
evenc che final compliance deadline la aec.   l±. *c 24.
     e. Grace Period
     Sane prior decrees provided  for  a  fixed  period  iaaediacely
following nocifictcion of a violacion  in which che defendanc
was given che opporcunicy co  explain  his noncompliance and/or

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 corrtcc  it  and  during which stipulated penalties would not
 accrue.   The  length of  such grace periods has ranged from 3 to
 30 days.  However, by requiring that every consent decree
 contain  stipulated penalties, Congress has endorsed a strong
 preference  for  strict compliance with the terns of a decree.
 While  the Agency does not endorse the use of grace periods, if
 a violation is  expediciously resolved the Agency may use its
 discretion  not  to seek  stipulated penalties.
 B.   Amount of  Stipulated Penalties
 1.   General  Rule
     Since  stipulated penalties arc  intended to ensure compliance
 they should be  sufficient to provide economic incentives to the
 defendant to  comply with the terns of the concent decree in a
 timely fashion.  The penalty should not bt set so low that the
 defendant would prefer  to pay the penalty rather than perform
 the required  activity.^/  Therefore, stipulated penalties should
 generally be  set at a level designed to exceed the amount of
 the estimated savings due to delay.  In setting the amount  the
 Agency should also take into consideration the gravity of  the
 violation «ad the degree of ham or  danger to the public or
 environment which Bight result  from  the violation.
4/ Actual performance  is  required  regardless  of  the  payment
"  of penalties.  The  Agency  reserves  the right  to seek injunc-
tive relief, modify  the decree,  or seek other remedies  in  such
instances.

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                              - .8  -
      Each  stipulated  penalties provision should state a fixed
 amount  ptr day  co  be  imposed.  This "sum ctrtain" puts the
 defendant  on  notice of  the  potential extent of his obligation
 before  a violation occurs.£/  The "undetermined amount" approach
 (i.e.,  "defendant  shall pay u£ £o $5000/day") should not be used
 since it makes  the amount of  the penalty subject to further
 resolution.   The "undetermined amount" may destroy the economy
 of using stipulated penalties since the parties must then
 resolve the ultimate  amount.
 2.   Escalating Penalty
     Consent  decrees  should provide that the per diem amount of
 the penalty will increase with incremental increases in the
 period of  noncompliance.  For example, a fixed penalty of
 $5,000 per day might  increase to $10.000 per day after the 15th
 day of noncompliance, and $15,000 per day after the 30th day.
 Escalating penalties  will give the defendant added incentive to
 come i'nto  compliance, and it  is recommended  that they be used
 as a general  rule.
*/ To th«  extant  that  EPA  reserves  its  rights  to  seek penal-
"  tits under  SARA  S 109 or  civil  contenpt  orders,  however,
the "SUB certain" argument is  really only an  indication  of
the minimum  amount  for which a consent  decree  violator may
be liable.

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 3.    Sharing  Penalties vich the State6/
      Generally, civil penalties may bt shared with a State if
 cht  State  has actively participated in the litigation, actively
 sought such penalties, and State lav provides independent
 authority  for the  State  to seek civil penalties.?/  In addition,
      [t]he penalties should be divided in a proposed
      consent  decree based on the level of partici-
      pation and the penalty assessment authority of
      the state or  locality....[T)he division should
      reflect  a fair apportionment based on the tech-
      nical and legal contributions of the partici-
      pants, within the limits of each participant's
      statutory entitlement to penalties.
 "Division of  Penalties with State and Local Governments" at 3.
Any  agreement to share penalties with a State «ust be described
in the consent decree.   "Division of Penalties with State and
Local Governments" at 2.
C.    Collection of Stipulated Penalties
1.    General  Rule
      Since Agency  policy encourages aggressive post-settlement
enforcement,  it is essential to the integrity.of the enforce-
sent  program  that  stipulated penalties be collected.  Every
*/ Note  that Section  121(e)(2)  of SARA gives  States  the  author-
~  ity co enforce  the stipulated  penalties  section of  consent
decrees.
II Penalty division is a natter for discussion only  between
"  the governaental parties,  and  it is inappropriate for the
defendant to participate in  such  discussions.  "Division of
Penalties with  State  and Local  Governoents" (OECM, October 30.
1965) at 3.

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                              -  10  -

 effort  shall  be  aade  to  collect stipulated penalties both to
 deter future  noncoopliance  by defendants and to maintain the
 Agency's  enforcement  credibility.  The Agency thus will not
 hesitate  co initiate  Judicial actions to enforce the stipulated
 penalties  provision of consent decrees.
 2.    Procedure for Collecting. Penalties
      Forfeiture  is the best method of collecting penalties and
 should  be  provided for in the decree.  Under this procedure,
 upon  notice of a violation^/ the defendant will have a stated
 number  of  days to pay che penalty  or to move the issue into
 dispute resolution.
      Consent  decrees  should not contain a  limitations period
 for demanding stipulated penalties which results in Che waiver
 of penalties  that are not demanded within  a specified period of
 time.
 3.    Payment  of  Penalties
     The stipulated penalties section should indicate to whom
 monies  are payable.   This is  particularly  important for actions
 brought und«r CERCLA, since che "Superfund" is  partially replen-
 ished by s*ocl«s  paid  under  chac statute.   Although monies
 collected  pursuant to RCRA  generally are  paid co  che "Treasurer
 of the  United States," stipulated  penalties collected pursuant
*/ Penalties  should  begin " Accrue on the day on which the vio-
""  lation  actually occurs and noc wh«n cht Agtncy lacer discovers
it or gives notice to  che defendant.

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 to  CERCLA  violations are co be made payable to Che "Hazardous
 Sub*canccs Superfund."£/  All penalties ahould be paid by cere ifled
 check,  concain  the  coaplece address of the defendanc, include
 Che aice idencificacion number if there ia on*, and reference
 ch« caae name and civil action nuaber.
 D.   U»e of Other Remedies
     Collection of  acipulaced penalties ia not the aole reaedy
 for violations  of a decree.  There say be tiae* when the Agency
 will aeek  additional remedies, auch aa the court*a equitable
 contempt powers or  the collection of additional penalties under
 SARA or other applicable authorities.  See, e.g. .  SARA $ 109.
Thua, to preserve the Agency's rights, each section on stipulated
 penalties  should state that these penalties are  "in addition co,
 and not in lieu of" the Agency's right co other  sanctions for
violations of the decree.10/
9/ This is  supported by  the guidance nemorandurn on  "Remittance
~  of Fines and  Civil  Penalties"  (OLCh,  April  IS,  1985) which
indicate* that "all Superfund  billings"  should go  into a lock-
box bank •pacifically  designated  for Superfund monies.  In
addition, since  Section  107(c)(3)  of CERCLA.  directs chat puni-
tive daaafea go  into the Superfund, our  view is that CERCLA
stipulated  penalties ahould be depoaited there as  veil.
   The address for the CERCLA  loekbox  is:
                       EPA  - Superfund
                       P.O.  Box 371003M
                       Pittsburgh,  PA   15251
10/ Subject, of  course,  to.any waiver  -of Section  122(1) penal-
    ties (see discussion at p. 3).

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                             - 12 -

E.  Purpose and U«e cf This Guidance
     This guidance and any internal procedure* adopted for ice
iaplenentation are intended solely as guidance for employees
of Che United States Environnental Protection Agency.   They
do not constitute ruleaaking by the Agency and may not be
relied upon to create a right or a benefit, substantive or
procedural, enforceable at law or in equity, by any person.
The Agency oay take action at variance with this guidance or
its internal implementing procedures.

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                            APPENDIX


            MODEL STIPULATED PENALTIES PROVISIONS11/


                   	. STIPULATED PENALTIES

     1 .   Defendant shall pay stipulated ptnaltiti in the amounts
set  forth in paragraph 9 to the United States [and/or the State
of      ]  for failure to comply with [sections     of] this
Consent Decree, unless excused under paragraph     ("Force
Majeure").  Compliance by Defendant shall inclu3e""completion of
an activity under this decree or a plan approved under this
decree or  any natter under this decree in an acceptable Banner
and  within the specified tiae schedules in and approved under
this Decree.  [If Defendant fails to neet [specified] interim
deadlines, but meets the final completion date for the work to
be per formed herein, the penalties for aissed interin deadlines
are  excused].  Any aodifications of the tiae for performance
pursuant  to section    ("Modifications") shall be in writing.

     2.   All penalties begin to accrue on the day that complete
performance is due or a violation occurs, and continue to
accrue through the final day of correction of the noncoapliance.
Nothing herein shall prevent the simultaneous accrual of sep-
arate penalties for separate violations of this Decree.

     3;   Following Plaintiff's determination that Defendant has
failed to  comply with the requirements of this Decree, Plain*
tiff shall give Defendant written-notification of the same and
describe  the noncompliance.  Said notice shall also  indicate
the  amount of penalties due.

     4.   All penalties owed to the United States  [or  State]
unoer this section shall be payable within 30 days of receipt
of the notification of noncoapliance. unless defendant  invokes
the  dispute resolution procedures under section ___.  Penalties
shall  accrue from the dace of violation reg*^*** of whether
EPA  [or tb* State] hat notified Defendant of a violation.
Interest  afcall begin to accrue on  the unpaid balance at  the  end
of the 30-^*7 period.  Such penalties shall be paid  by certified
check  to  {"Treasurer of the United States" for RCRA  penalties, or
"Treasurer of the State of X", or  to the "Hazardous  Substances
Superfund" for CERCLA penalties]  and shall contain  Defendant's
complete  and correct address, tht  site name,  [the site  spill
identifier nuaber (SSID)], and the civil action  nuaber.   All
11 / Bracketed provisions  are optional.

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                              A-2


 checks  shall be mailed co  [the appropriate Federal lockbox bank
 or  Scace  potcal address].

     5.   Neither  the  filing of a petition to resolve a dispute
 nor  che payment of penalties shall alter in any way Defendant's
 obligation  to complete the performance required hereunder.

     6.   Defendant nay dispute Plaintiff's right to the stated
 aaount  of penalties by invoking che dispute resolution procedures
 under section     herein.   [Penalties shall accrue buc need not
 be  paid during the dispute resolution period.  If che District
 Court becomes involved in the resolution of the dispute, the
 period  of dispute shall  end upon the rendering of a decision by
 che  District Court regardless of whether any party appeals such
 decision].   If Defendant does not prevail upon resolution,
 Plaintiff has che right  to collect all penalties which accrued
 prior to  and during the  period of dispute. [In che event of an
 appeal, such penalties shall be placed into an escrow account
 until a decision  has  been  rendered by the final court of appeal].
 If Defendant prevails upon resolution, no penalties shall be
 payable.

     7.  No penalcies shall accrue for violations of this
 Decree caused by  events beyond the control of Defendant as
 identified  in Section	 herein ("Force Majturt)"]1 */.  Defen-
 dant has che burden of proving force majeure or compliance with
 this Decree.

     8.   If Defendant fails co pay scipulactd penalcies,
 Plaintiff may inscicuce  proceedings co collecc che penalcies.
 However, nothing  in chis seccion shall be construed as prohib-
 icing, alctring,  or in any way limicing che abilicy of Plainciff
 co seek any other remedies or sanctions available by virtue of
 Defendant's violacion of chis Decree or of che statutes and
 regulations upon  which ic  is based.

     9.  The following stipulated penalties shall be payable
 per  violation per day co che Uniced States [and/or  Scace]  for
 any  nonco»pli*nct idencified in sub paragraph  1 above V3/:
12/ with  Che  exception of  scipulactd penalties  clauses in
 ~  consent decrees  providing toltly for ca«h payments,  aosc
decrees will  include force majeure clauses.

13/ pleast noct  chac cht ptnalcy Mounts ttc oue above are only
"""  examples,  and  cht anouncs oay vary with tach individual
case.

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                              A-3

            [  Amount/Day      Period of Noncompliance
              5 5,000         1st thru 14th day
              510,000         15th thru 30th day
              $15,000         31st day and beyond     ]
    10.  No payment* made under thia section shall be tax deduc-
tible.
    11.  This section shall remain in full force and effect for
the tern of this Decree.

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                                                   OSWER # 9832.12
         T

         I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
         f                WASHINGTON. D.C. 20*60

                               SEP 2 2 1587
                                                              rf 01
MEMORANDUM

SUBJECT:  Guidance on Federal Superfund Liens

FROM:     Thomas L. Adams, /r.
          Assistant Admin istrat or "
TO:       Regional Administrators, Regions  1-X
          Regional Counsels, Regions I-X
          Directors, Waste Management Division,
            Regions 1-X


     The purpose of this memorandum is to establish guidance on
the use of federal liens to enhance Superfund cost recovery.
Section 107(f) of the Superfund Amendments  and Reauthorization
Act of 1986 ("SARA"), adds a new Section 107(1) to CERCLA, which
provides for the establishment of a federal lien in favor of the
United States upon property which is the subject of a removal or
remedial action.

     This guidance provides: (1.) analysis of statutory issues
regarding the nature and scope of the lien, (2) policy on filing
a federal lien to support a cost recovery action, and (3) proce-
dures for filing a notice of lien and taking an in rem action to
recover the costs of a lien.  Attached to the guidance is an
example of a notice of a Superfund lien.

I.  STATUTORY BACKGROUND AND ISSUES

     A.  Property Covered by Lien

     Section 107(1) of CERCLA provides that all costs and damages
for which a person is liable to the United  States in a cost
recovery action shall constitute e Ve->. 4n  favor of the United
States upon all real property and rights to such property which
U) belong to such person and (2) are subject to or affected by
a removal or remedial action.  The lien applies to all property
owned by the FRP upon which response action has been taken, not
just the portion of the property directly affected by cleanup
activities.  The House Judiciary Committee  Report on the lien

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                               - 2 -
 provision in H.R.  2817  (p.  18),  which was  enacted  as  part  of
 SARA,  states that  "the  lien should  apply  to  the  title to the
 entire property on which  the response action was taken."   At the
 same  time,  the Report notes that "it  is not  intended  to extend
 the  lien to the title of  other property held by  che responsible
 party. '   Id.

      The lien provision is  designed to facilitate  the United States'
 recovery of response costs  and prevent windfalls.  "A statutory
 lien would  allow the Federal Government to recover the enhanced
 value  of the property and tfcus prevent the owner from realizing a
 windfall from fund cleanup  and restoration activities."  131 Cong.
 Rec. SI 1530 (Statement  of Sen. Stafford)  (September 17, 1985).
 See also House Energy and Commerce  Report  on H.R.  2817, p.  UQ,
 indicating  that one of  Congress"  primary purposes  in  enactin?
 the lien provision was  to prevent unjust enrichment.

     B.   Duration  and Effect of  L*.er

     The federal lien arises "at  the  later of the  following:
 (A) the  time  costs are  first incurred by the United States  with
 respect  to  a  response action under  [SARA,  or] (B)  che time  that
 the person  is  provided  (by  certified  or registered mail) written
 notice of potential liability."   (Emphasis added)  (S107 (1)(2)).
 EPA may  send  out two different types  of notice letters to  PRPs.
 The first,  a  general notice letter, will be  sent early in  the
 process  notifying  the recipient  that  he or she has been identified
 as a party  who  may be responsible for cleanup of the  site-or for
 the costs of  cleanup.   In addition, the Agency may send a  sub-
 sequent  "special"  notice  which will invoke and commence the
 settlement  procedures in  Section  122  of SARA.  The first of those
 letters  will  satisfy the  notice  of  potential liability required
 for the  federal lien to arise, assuming that it does  give  the PRP
notice of potential liability for cleanup of costs, and is  for-?
warded by certified or  registered mail.

     It  is  EPA'» pocition chat Che  lien provision applies  co costs
 incurred prior  co  and afcer passage of SARA.  The litn also applies
 co all future  coses incurred ac  the sice.  The lien continues
 "until che  liability for  che coses  (or a judgment against  che
person arising  ouc of such  liability)  is satisfied or  becomes
unenforceable  through operation  of  che statute of  limitations
provided in section M3." (SI07(1) (2))

     C.  Prioricy  of Federal Lien In  Relation co Other Property
         Liens

     The federal lien is  "subject to  che righcs of any purchaser,
holder of a security interest, pr judgment lien creditor whose
 interest is perfected under applicable State law before notice of

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 the  federal  lien  has  been  filed  [by  EPA]."   (5107(1)(3))  Thus, the
 unfiled  federal  lien  is  subordinate  to  rights  that are perfected
 under  applicable  State  law before  EPA files  notice of its federal
 Superfund  lien.   After  EPA files notice of the federal lien, the
 United States  establishes  its  priority  ahead of known and potential
 purchasers,  holders of  security  interests, and judgment lien credi-
 tors whose interests  have  not  been perfected.

     During  deliberation on  the Superfund amendments, Congress
 considered a provision  in  H.R. 2005  IS.  51]  which provided for
 constructive notice of an  EPA, lien. . Under that provision, if EPA
 failed to  file its notice  of  lien  in a  timely  fashion, the EPA
 lien would nonetheless have  had priority over  a third party lien
 which  was  filed prior in time  if the third party had or reasonablv
 should have  had actual knowledge that EPA had  incurred costs
 which  would  have  given rise  to a lien.   See  Environment and Public
 Works  Report on S. 51, p.  45.  Thus, since this provision was
 ultimately deleted from  t!.e  Act, EPA must file its lien in.order
 to achieve priority over any other secured parties, and cannot rely
 on constructive notice.

     D.  State Superfund Liens

     Most  States  have passed  "Superfund" statutes similar to the
 federal  law.  However, a State Superfund lien  only applies to
 response work paid for by  a  State.  Some of  the State statutes,
 such as  those in  Massachusetts, New Hampshire, New Jersey, Arkansas
 and'Tennessee, contain "superlien" provisions  which provide that
 any expenditures  made pursuant to  the statute  constitute a first
priority I-en upon the real  property of  a hazardous waste dis-
 charger.    Several other States provide  that  expenditures from the
hazardous  waste fund will  constitute a  lien  in favor of the State,
 although not a first-priority  lien.

 II.  POLICY  ON FILING FEDERAL LIENS IN  COST-RECOVERY ACTIONS

     EPA has the  authority to file notice of a lien on any real
property where Superfund expenditures have been made.  Regional
offices should carefully evaluate  the value  of filing notice of a
 lien whenever the Agency has identified  a landowner as a potenti-
ally liable  party under Section 107.  Filing of notice of tne
 federal lien will be particularly  ber£*".:ial to the government's
efforts to recover costs in  a subsequent Section 107 action in the
following  situations:

           (1) the property is the  chief  or the substantial
              asset of the PRP;

           (2) the property has substantial monetary value;

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           (3)  there  is  a  likelihood  chat  the  defendant owner
               may  file  for  bankruptcy.  See Revised Hazardous
               Waste  Bankruptcy  Guidance,  Office of Enforcement
               and  Compliance Monitoring,  May  23,  1986;

           (4)  the  value of  the  property viil  increase signi-
               ficantly  as a result of  the removal or remedial
               work;  or

           (5)  the  PRP plans to  sell  the property.

Regional offices should not file notice where it  appears that
the defendant  satisfies the elements of the innocent landowner
defense pursuant to  Section 107 (b) (3).

     Where existing  perfected non-Superfund liens on the property
equal or exceed the  value of the property as  enhanced by the
Superfund  expenditures, it  may  not be worthwhile  to file notice of
the federal  lien.  However, in  some  cases, a  foreclosing party,
such as a  bank, may  take over the property, and EPA may believe
that the foreclosing party  is liable under Section 107.  Sej> United
States v. Maryland Bank and Trust Co. . 632 F. Sup>-. 373 (D. Me.
1966).  In such cases,  EPA  should file a  lien as  to the foreclosing
party after  foreclosure and aft-er other acts  creating liaoility
have taken place.

     Pursuant  to Section 545(2) of the Bankruptcy Code, a lien
un-perfected  as cf  the time  of filing of the bankruptcy petition
will be invalidated  by  the  bankruptcy  trustee.  Thus, where there
is a likelihood of a bankruptcy filing, notice of the Superfund
lien should  be filed as early as possible.  Finally, note chat
filing notice  of the lien is not subject  to pre-enforcereent review
of che liability of  Che landowner for  che response costs.j,/

III.  PROCEDURES FOR FILING LIENS

     Nocice  of che federal-  lien should be filed ac che time chat
che owner  it provided notice of potential liability.  By this time,
che lien will  have arisen since EPA  will  have incurred coses, e.g.- .
If   Courts have rejecced .claims  chac  owners  are  encicled Co notice
~"    and hearing prior  Co filing  of  the  lien.   In Spielman  Fond.
Inc. v. Hanson's Inc..  379 F. Supp.  997  (D. Ariz.)  (3 judge court),
Tummarily att'd. 4TT U.S. 901 (1974),  the  court held  chat filing of
a mechanic's  lien did noc amount  to  a  taking  of significant property
without due process, since it did not  prohibit  the transfer of  title,
Subsequent court decisions have followed this holding.   See, e.g.,
B & P  Development "v. Walker. 420  F.  Supp.  70<* (W.D.  Pa.  W/6).

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                                - 5  -

 in  conducting  a  PRP  search.  The government's priority will relate
 back  to  the  date.that the notice of the  lien was filed.  See
 Uniform  Commercial Code, 59-31 2 (5 ) (a).   Unlike some State~S"u"perfund
 lien  provisions,  Section 107 does not establish a deadline by which
 notice must  be filed.

      A.  Preparing the Notice

      Regional enforcement personnel should refer to State
 requirements for  filing notice  of the lien.  We encourage the
 Regions  to work with State Attorney General Offices to assure
 that  the Regions  accurately interpret State law, and to consult
 with  OECM and DOJ in determining whether to file notice of the
 lien.

      Notice  should generally include:  (1) the name of the property
 owner, (2) a precise legal description of the property on which the
 lien  will arise,  (3) an explanation by the Regional official of the
 basis for the lien,  (4) the address of the Regional Administrator
 or other Regional official delegated authority to sign notices of
 liens, and (5) a  provision that the lien shall remain until all
 liability is satisfied.  The notice should cite CERCLA Section
 107(1) and be notarized with the Agency  seal.

      Notice may also include such information as:  (1) the amount
 of fund  expenditures upon which the lien is claimed and (2) a
 description of labor performed  and materials supplied, including
 dates.   However,  since Che statute does  not require specification
 of costs, the notice should clarify that, where response work is
ongoing, the amount of Che lien will increase as the coses incurred
 increase.  The property description to be included in the notice of
 Che lien should be the legal description (i.*. , metes and bounds,
 or lot,  block and subdivision)  rather than a general post office or
 street address.  We have attached an example of .a notice of a
 federal  lien.

      Under che recent SARA delegation, the Regional Administrator
has been delegated authority co sign che notice of filed lien.
The Regional Administrator nay  redelegace this authority ac his/her
 discretion.

      B.  Where to File

      To  establish Its priority  among ocher secured parties and
 credicors, EPA mist £11* nocice of  che lien "in che appropriate
office within the State (or county or other governmental sub-
 division), as designated by State law, in which the real property
 subject  to the lien  is located."   (S107(1)(3))

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                               - 6  -
     Where  the  State has designated an office, such as a County
 recording office,  the  lien should be  filed  in that office.  This
 will likely  be  the  same office where  State  Superfund liens are
 filed or where  general real property  liens, e.g. mechanic's liens,
 are filed.   "If  the State has not by  law designated one office for
 the receipt  of  such notices of liens, the notice shall be filed in
 the office of the  clerk of the United States district court for the
 district in  which  the  real property is located." ($107(1)(3))

     Where there is any doubt as co the designated State office,
 the lien should be  filed both in the  office of the clerk of the
 United States district court for the  district in which the real
 property is  located and in r?he most appropriate local office for
 recording property  interests.  Filing in the appropriate local
 office is important, since parties with an  interest in the property
 are more likely  to  review liens in the local office than in federal
 district court.

 IV.  IN REM  ACTIONS FOR xEJOVERING COSTS CONSTITUTING THE LIEN

     Under Section  107(1)(4), "[tjhe  costs  constituting the lien
may be recovered in an action in rem  in the United States district
 court for the district in whicTPthe removal or remedial action is
occurring or has occurred."  An in rem action is an action against
 the property of the PRP.  In. order to institute a proceeding rn re~,
 the property must  "be  actually or constructively within the reach
 of the court."  36 Am.  Jur. 2d Forfeitures and Penalties §28 (1966;.
By contrast, the typical cost recovery action is an in personam
action against  the  PRP.

     In rep  actions .should be considered where the litigation team
believes that an action to recover costs covered by the lien will'
enhance its  efforts to recover all costs incurred in a response
action.  Such actions will be particularly  useful where the pro-
perty constitutes a significant asset of the PRP, and where the
government is having difficulty reaching an expeditious cost
recovery settlement.   The in rem action, which will seek an order
directing sale  of  the  property,^/ should generally be combined with
an in personam  action  for costsT  Before bringing an in rem action.
the regional office should consider the amount of the claim, the
2/  An i£ rem action may be  delayed  by  an  automatic  stay, obtained
~   in a bankruptcy proceeding, which serves  to  stay "any act  to
create, perfect, or enforce  any lien against  property of the
estate."  (Emphasis added) 11  U.S.C. S362(a)(A).   The automatic
stay also prohibits perfection of  a  lien,  through  filing notice
of the lien, against a bankruptcy  debtor.

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 conaition  of  the  site  after  the  response  action and the  likely
 marketability of  the site.   Note  that  an  in rem action will require
 the  same elements of proof as any cost  recovery action.

     Section  107(1)(4) further states  that "(njothing in this
 subsection shall  affect the  right of the  United Scates to bring an
 action against any  person to recover all  costs and damages for
 which such person is liable  under subsection  (a) of this section."
 Thus, where the government seek*  to enforce the federal lien, it is
 not  precluded from  recovering the balance of  its response costs
 directly from the landowner  or any other  liable party.3/

 DISCLAIMER

     This meaoranduai and any internal procedures adopted for its
 implementation are  intended  solely as guidance for employees  : -he
 U.S. Environmental  Protection Agency.   They do not constitute
 rulesaking by the Agency and may not be relied upon to create a
 right or a benefit, substantive o- -rocedural, enforceable at law
 or in equity, by any person.  The Agency  may  take action at variance
with this memorandum or its  internal implementing procedures.

Attachment
3/  Moreover, after EPA obtains  a judgment,  it  should consider
~~   using state judgment  lien provisions, which may cover all real
property of the debtor.

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                                NOTICE OF FEDERAL LIEU

      NOTICE IS  HERiBY GIVEN by the United States of An*rica chat it holds a  lien on
 the  Lands  and premises described Delow situated in Che State of Washirxton,
 as provided by  Section )07(f) of Che Superfund Aawndaents and Reauthoriration
 Act  of  Wj>6 (SAKA), Public  Law No. 99-499. amending the Comprehensive Environmental
 Response,  Condensation, and Uability Act of .I960 (CEXCLA). 42 U.S.C. 19601  et
 «e£., to secure che payment co the United States of ail costs and danages  covered
 by that Section for which Western Processing Ccopany, Inc. and Carat J. Nieuwenhuis
 (and che marital coaunity  ccoposed of himself and his wife) are liable to the
 United Scares under Section 107(a) of CZRCU as awended.  The lien for which this
 instrument gives notice exists in favor of the United Scaces upon all real property
 and rij^cs to «uch property which belong to said persons and are, have been, or will
 be, subject co.  or affected by, roo^al and remedial actions as defined by  federal
 law, at or near 7215  South  196th In the City of Kent, Canty of King, State  of
 Washington,  including che following, described land:

            That  portion of the Southeast Quarter (S.E. 1/4) of the
            Northwest Quarter (N.W. 1/4) of Section One (1), Township
            Twenty-Two  (22) North. Range Four (4) East, Willaoette
            Meridian, lying Westerly of the Puget Sound Electric
            ri#jt-of-way less  than North Thirty (30) feet of Drainage
            Ditch No. One (1). containing 12.9 acr«s acre or less.

      This  statutory lien exists and continues until che liability for such costs
 and cLc^gcs (or for any decree or judgement against such persons arising out of
 such liability)  is satisfied or becomes unenforceable through che operation  of the
 statute of limitations as provided by Section 113 of Public Law 99-499.

      IN WITNESS  WHEREOF, che United Scaces has caused this instrunenc to be  executed
 through the iJJra.ted'J?tvates Environmental Protection Agency, and its-attorney, in his
 official''e*pacity as  Regional Counsel of che Lhiced States environmental Protection
Agency.;
     »*V*
Datedit
             .-r. -ID.
                      i     j<
                               this £3J day of ±
N  \ \ s:   5$
^^      *'
     •1
     •O.
      ^\   \  t
         •'"•x  •
United States Of ^Strica)
State of Washinfton     )••
County of Kief           )
                                        UNITED 'STATES OF 'AHTRICA «nd
                                        UNITED STATES EWIRQtt-EtflAL
                                        PROTECTION AGENCY
                                   .//v^Jjoes R. Moor*
                                   7-  Regional Counsel
                                    '         £P/ . iUion 10
                                                           cherc appeared personally
                                                          Co ** Co be eh* Regional
                                                       Agency, Region 10. and he
                 ic he signed che foregoing NOTICE OF FEDtttAL U»l in a representative
                 free and voluntary ace and deed of che Uniced Scaces and ics «aid
    .._____, ,,,_.u»es and purposes therein aencioned.  GIVEN under ay hand and official
:i./                           i  .
 My Coroissior! EjC5ires:<
                                                        Tndiorcne'STate
                                       of Washington residing at Seattle

-------
»
     \         UNIT! 0 STATf f CNVmONMCNTAL MWTf CTION AOfNCY


                                             OSWIX Dirtctlv* 9835.5


                            OCT  5 .587
mHORJUIDOU

SOSJECT:  tPA Xnteria Guidance on  Xndeanification of Superfund
          ReapQjiae ActirorvCont rector a Onder Section 119 of SARA
              / - .    /  ^^^
              /X-v-  )/'&*'
PROM:     J. W>ff^ton 'Porter, Aaaistant Adainiatratot
                    Solid "}*%• •£* Caergency Reaponae

             Mo
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                                2          OSWER Directive $135.5


of Engine*** at fPA-lead sites)3.  The purport of this •••o is  to
describe he* E»A may provide indemnification to RACs using
Section lit authority.


lackgroond

     Response action contractors have traditionally relied on
commercial liability insurance or indemnification to sufficiently
offset their potential liability risks fro* participation in the
Superfund program.  During the Superfund reautborisation debate,
the RAC community identified several factors which, tbe RACs
contended, impaired their ability to adequately offset risk.
These factors included:

o    Potential subjection to strict, joint and several liability
     under Superfund and under some state laws; and

o    Inability of the commercial liability insurance market to
     provide liability insurance coverage to RACs involved in the-
     Superfund cleanup program that is both adequate aad
     affordable.

     Prior to the reauthorization of CERCLA, IVA provided
indemnification to RACs working for EPA through contract
authority implementing CERCLA.  EPA took this step in -order to
retain qualified contractors, given the absence of pollution
liability insurance coverage.  Onder this old indemnification
agreement, the Federal government indemnified RACs above an
initial $1 million for third party liabilities and defense
expenses.  The indemnification agreement was void in cases of
gross negligence or willful misconduct.
     3  SARA Section llf(e)(2) defines "response action
contractor* as:
a. any person who enters into a response action contract  (which
     is defined in part as any written contract or agreement to
     provid* «ny CttCLA removal or remedial action at a facility
     listed oa tbe »»L, or to provide any ancillary services
     related to «ucb response) with respect to any release or
     threatened release of a hazardous substance or pollutant or
     contaminant from a facility and is carrying out such a
     contract» and
b. any person retained or hired by the person who enters  into a
     response action contract, to provide any services, related to
     a response' action? and
c. any person, public or nonprofit private entity, conducting a
     field demonstration pursuant to fARA Section 311tb)  (i.e.,
     the "Alternative or Innovative Treatment Technology  Research
     and Demonstration Program").

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                                           OSWIR Directive 1135.5
     SeetfjB 119 of SARA responds to many of the concern* of the
RAC commustfty by:

o    Establishing a standard of negligence for action* brought
     against RAC* under Federal law;*

o    Authorising ttk to provide to RACs, on • discretionary
     basic, limited indemnification against pollution liability
     arising fro* RAC negligence; and

o    Providing eipress statutory authority for indemnification
     and a funding mechanism.

     The approach takan in Section 119 provisions is based on the
following key points:

o    A Federal liability standard of negligence, combined with
     RAC indemnification which is subject to limits and
     deductible!, provides adequate performance incentives for
     RACa working in the Superfund program*

o    RAC indemnification provides an adequate substitute for
     insurance;

o    Discretionary indemnification is an interim vehicle that
     will keep the Superfund program operative until  the
     insurance industry returns to the RAC liability  insurance
     market; and

o    Discretionary indemnification doe« not create a  Federally
     intrusive insurance program that Interferes with private
     sector efforts to develop XAC liability insurance coverage.
     4  The Federal standard of negligence under  Section 119
applies only to Federal law.   It dots  not preclude  states  from
applying their own statutory law or  common law  liability
standards, which may in some case* b*  strict  liability.  Response
action contractor* sued in  Federal court* are under  a  "ctandard
of care' defined by Federal law a* negligence,  lowevet, if an
action is brought under state  law, a strict liability  standard
could apply.

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SPA Task PetoM  o» RAC  Indemnification
                                           OSKIR Directive 9IJS.s
     To  avoid program delays, a Task Pore* was established to
determine how-«PA win provide indemnification to RACa working in
tht Suptrfund program.  Tht Task Peret ia co»po«td of
representatives from IPA'S Office of Waste Programs Enforcement
(OWPE),  Office of Emergency and Remedial Response (OERR), Off let
of Solid Waste (CSV), Office of Central Counsel (OCC), Office of
th« comptroller 

o    Develop Section 119 RAC final indemnification guidelines and
     regulations;

o    Ensure a forum for adequate public comment on RAC
     indemnification; and

o    Promote private sector provision of RAC pollution liability
     insurance in the future by providing technical assistance to
     the insurance industry.

     The Task Peres will attempt to reach these goals by
producing several work products tbat:  (1) carefully analyse and
estimate the potential pollution liability risk to which RACs are
eiposed by participating in the tuperfund cleanup program;  (2)
determine what the final EPA indemnification terms and conditions
will-bet (3) prepare the Agency for implementing an interim RAC
indemnification program) and (4) develop the Section 119
regulations.


Interim SPA Indemnification Ouidelimes

     SARA Section lit now provides tPA's sole authority to  eitend
indemnification to RACa working ia the Superfund program.
Delegation of authority from the President authorising SPA  to use
Section lit provisions was issued through Siecutive order 125SO
on January 2f, lt!7.  The delegation authorises tPA to use
Section lit indemnification authority from the date of enactment
(DOt) of SARA.  Consequently, IPA Bust adhere to Section 119
provisions fro* SAXA DOS  (October 17,  ItIC).

     Section 119(0(7) requires tbat tPA promulgate  regulations
for carrying out indemnification provisions and, prior to
promulgation of the regulations, develop guidelines  to carry  out
use of Section 119 indemnification authority.  Secause of the
complexity of the issues, tPA is proceeding deliberately in
establishing these guidelines and is seeking substantial public

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                                5          OSVER Directive 9I3S.S


coaaent.  ajaanwhile, EPA it providing contractors with Section
119 coveragfc OD an interia basis, using procedures outlined in
this aeaoraadua.  Oltiaately, this coverage will b« aeended to
reflect guidance «nd regulations that will be developed in
conforaanee with Section 119 requireaents.

     As further described in this aeaorandua, authorisation to
provide indeanification will be aade by OCWXX with concurrence
froa the Office of the Coaptroller (OC).  Authorisation to
indeanify will be aade upon receipt of a recoaaendation froa the
Task Force.  The OC will provide concurrence (or non-concurrence)
with recoaaendations to indeanify within seven calendar days of
receipt of a reeeaaendatien.  execution of indeanity agraeaents
will be aade by appropriate Agency adainistrative offices.

     Section 119(c)(4) aandates that RACs Bust Beet the following
requireaents before they can receive Federal indeanification for
potential pollution liability associated with Superfund response
action activities:

o    The RAC aust Bake diligent efforts to obtain Insurance
     coverage froa non-Federal sources to cover pollution
     liability; and

o    Zn the case of a JUC contract covering acre than one
     facility, the RAC agrees to continue to make such diligent
     efforts each tiae the RAC begins work under the contract at
     a new facility.

     Section 119(c)(4) also requires that the following
circumstances aust exist before' • RAC can receive Federal
indeanification for potential pollution liability associated with
Superfund response action activities:

o    At the tiae the response action contract is entered  into,
     insurance is -not available* at a "fair and reasonable
     price", in sufficient quantity to offset potential RAC
     pollution liability riaki and

o    Adequate Insurance to cover auch liability is not generally
     available at the tiae the response action contract is
     entered late.

     IB future guidance (i.e., the guidance which  is to be
published for public comment), t»A plans  to  include guidelines
for deteraining whether insurance is  "generally available"  or  is
•fairly and reasonably priced".  For  the  purpose  of this  intcria
guidance, EPA has determined* baaed on  information currently
available, that Superfund RACs are unable to  obtain reasonably
priced pollution liability insurance.   Therefore,  RACs are
eligible to receive indemnification under Section lit  from DOC  of

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                                6          OSWBR Dirtetivt 9135.S


SARA.  However, EPA will require th*t RACs •••king Federal
indemnification aeet tht following requireaents:

o    Within 30- days of signing an indemnification agreeaent with
     EPA, RACs »u«t subaifto EPA (or to tht appropriate State
     Contracting Officer) written documentation concerning the
     efforts they have made to date to secure pollution liability
     insurance coverage  (e.g., a RAC could submit a written
     statement from an insurance broker stating that the JUC has
     attempted to aecure pollution liability coverage froa
     insurance carrier*  in the patt six months).

o    if the RAC haa aecured pollution liability coverage, it mutt
     •ubait to EPA  (or to the State Contracting Officer) a copy
     of the policy and declaration page; and

o    Every twelve months (or aore frequently, if EPA deteraines
     that there haa been a significant change in circumstances
     concerning the availability of pollution liability
     insurance) the RAC  aust subait to EPA (or to the State
     Contracting Officer) written docuaentation addressing the
     additional efforts  the RAC has made to secure pollution
     liability insurance coverage including:

          Copies of applications submitted to three known
          underwriters of pollution liability insurance;

          If pollution liability coverage was denied by an
          underwriter, a summary of the reasons why such coverage
          was denied;

          A status report of any pollution liability insurance
          obtained.  The report would include:  1) type of
          coverage; 2) preaiua charged; 3) limits of coverage; 4)
          deductible levels, and any other major terms and
          conditions of  the insurance coverage.  A copy of  the
          actual policy  and declaration page could be provided in
          lieu of a written status report;

          Zf pollution liability coverage was offered by an
          underwriter, but not accepted by the  RAC, a report  on
          the insurance  offered  (such as the "status report"
          retired above), and a summary of  the  reasons why such
          coverage was not accepted; and

          A status  report concerning the alternative pollution
          liability risk transfer aechanisaa the RAC has  pursued
          other than commercial pollution liability  insurance
          (e.g., risk retention groups, purchasing  groups,
          aasociation captives).

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                                 ^          OSTCEJ Directive 9135. S


     This taforaation ahould be  forwerded  to  the appropriate EPA
official  ffct State Contracting Officer).   Tbia  inforaation will
be reviewed by  tb« Taak Focct aa needed.

     Aa required undtc tt>«  interia guidelines liatad above, EVA
expecta RACa to deaonatrate tht  extent to  which ehay nave
atteapted to aacura pollution liability ineuranct coverage.  CPA
alao axpacta tbat RACa will continua to »onitor tha aarktt for
pollution liability inauranca, and continua to  seek and secure
auch inauranca  coverage (howtvar iiaited)  from  cou«ccial
inauranca carriara or through altarnativa  riak  tranafar
•achaniaaa (a.g.« aalf-inauranca poola).


lB<««ntfic«tion of *ACa Working  for l»A

     Pra-SARA indaanification taraa will apply  to work parforaad
at a aita aftar tha data of anactaant  (DOC) of  SARA if raaponaa
work at tha aita waa initiated undar an EPA contract prior to  tha
DOE Of SARA.

     EPA will anttr into naw indaanification  agraaaanta  (Saa
Attachaant A), aubjact to Saction 119  authority, with:

o    RACa who ara currantly working undar  contract with IPA, for
     work thay will initiata at  a naw  aita aftar DOB of SARA)  and

o    RACa racaiving naw contracts  (or  naw  eooptrativa  agraaaanta,
     in tha caaa of Sita Daaonatration projects) with  CPA aftar
     DOE of SARA for Suparfund raaponaa action  activitiaa.


     RACa currantly undar contract with CPA hava baan  alartad  to
tha ehangaa that will ba forthcoaing to thair indaanification
acraaaanta with CPA.  CPA haadquartara p«raonnal ID tba
Procuraaant and Contracts Managaaant Division of tha Offiea of
Adainistration hava b«an trainad ea tha usa of  faction 119 and,
with tba aaeiatanca of tha  task  Forca, will adaiaiatar Saction
119 indemnification intaria procaduras for CPA  contractors.
ftaquaata for indaaaification of  CPA contractors will ba subject
to tba approval of OSNC1 and concurrence of OC.

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                                I          OSWEK Dirtctivt »835.5


 Indemnification of EACs Working for States

     Sectiefe 11X0(2) authorixes th« indemnification of RACa
 working for States or political subdivisions of States (purauant
 to a Section 104(d)(l) agreement with EPA) for ntw work initiated
 at Suptrfund sites from DOE of SARA.  EPA may indemnify RACa
 performing reaponae action activitiaa for a Statt at a State-lead
 Superfund aite after OOE of SARA.  EPA will offer indemnification
 to RACa working for a State only if:

 o    The RAC'a reaponae action ia part of new aite work initiated
     at a Superfund aite after DOE of SARA and it ia related
     directly to cleanup of the aitei

 o    RACa working for a State muat meet all of the circuaatancea
     and iaauance requirementa aet forth by Section 119(c)(4), aa
     liated above; and

 o    RACa working for a State must meet all of EPA'a interim
     guideline requirements, aa liated previoualy on pagea five
     and six.

 EPA will not offer indemnification to RACa for aite work they
performedTTor States prior to DOE of SARA.  Any EPA
 indemnification provided to * RAC(a) working for a State(a) will
 be aubject to limits, deductibles, and other reatrictiona aa
 required by Section 119(c)(5).

     Until EPA iaauea final guidance and regulations, »11
requests for EPA indemnification of a. RAC working for a  State at
a Superfund aite will be processed via the Task Pore*.   Statea
ahould submit requests to both the Indemnification Tack  Pore*/
c/o Director, Office of Emergency and Remedial Response  (OERR),
and to the Regional Superfund Iranch Chief.  Requests should
 identify the Regional Site Coordinator and State contact, and
ahould include pertinent information regarding Section ll*(c)(4).
requirements as discussed previoualy.  Xf the Tack Force
recommend* approval of the indemnification request, the  Office  of
the Comptroller will provide concurrence  (or non-concurrence)
within seven calendar days of receipt of the recommendation.
final approval for IPX indemnification of a State MAC will  be
mad* by thm Director of the Office of Emergency  and Remedial
Response.  Xf approval is authorised, then the Grants
Administration Division will implement the approval through a
 special condition to be included in the State/EPA cooperative
 agreement (See Attachment A).

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                                 9          OSVER Directive 9135.5


Indemniflotion of RACs working  for Other Federal Agencies

     Section  119(e)(2) Authorises tht indemnification of RACa
working for oj:her Federal agencies at Superfund sites from DOC of
SARA.  A delegation of Authority from the President authorising
other Federal Agencies to use Section 119 provisions was issued
on January 2«, 1917.  Other Federal agencies follow all EVA
guidance and  regulations with respect to Section 119.  Other
Federal agencies that use Section 119 authority mist provide
their own source of funds (e.g.,their agency appropriation) to
pay all indemnification costs (e.g., claims and legal defense
easts).

     At some  Superfund sites, the O.S. Army Corps of Engineers
manages response actions pursuant to an iateragency agreement
with EPA.  For Section 119 indemnification purposes, any RAC
working as a  contractor for the  Corps of Engineers at such sites
(and where, for remedial actions, the site is listed on the HPt)
is considered to be working for  EPA rather than for some 'other
Federal agency".  EPA will offer the same indemnification to
contractors procured by the Corps of Engineers that it offers to
contractors procured by EPA.


Indeanifieatioa of RACs Working  for F1F«

     Onder Section 119(c)(2) authority, EPA can, in.limited
circumstances and subject to strict finanetal'tests, indemnify
RACa performing response action  activities for PRPs subject to a
consent order or decree at Superfund sites after DOE of SARA.
EPA will use  its authority to indemnify HACs working for PRPs
only in estremely limited eases, e.g., where EPA indemnification
of the PRP RAC is the solution of last resort.  EPA will offer
indemnification to RACs working  for PRPs only if;

o    The PRPs art unable to provide adequate indemnification, and
     as a result, are unable to  obtain the services of a
     qualified lACt

o    The RAC «s response action is pact of new site work initiated
     at a Superfund site after DOE of SARA, and the action  is
     related  specifically to the cleanup of the sitej

o    RACs working for PRPs meet  all of the issuance  requirements
     sot forth by flection 119(c)(4);

o    The circumstances set forth in Section 119(c)U)'exist;  and

o    RACs working for PRPs meet  all of IPA's  interim guideline
     requirements.

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                                10         OSWER Directive §135.5


     •PA «f£l net offer indemnification to RACs foe work
performed Ibr PRTs prior to DOE of SARA, nor for any rut RAC
reaponse awivity that is not related specifically to a remedy at
• Superfuno* cite.

     Further, Action llf(e)(5)(C) of SAILA requires that, before
EPA can enter into an indemnification agreement with a RAC
performing  work under contract with a PRP(s) at a Superfund
eite(s), IPA must determine the amount which the PRP(s) ia able
to indemnify the RAC.  In making  auch a determination, EPA aball
take into account the total net assets and resource* of tbe
PRP(a) with respect to the facility at the ti»e of such
determinations.  If EPA determines that the amount which the
PRP(a) is able to indemnify the RAC ia inadequate, then EPA may
enter into  an indemnification agreement with tbe RAC to meet tbe
anticipated shortfall.  EPA will  consider the combined
capabilities of all the PRPs at a site to determine whether, aa a
group, they are capable of providing adequate coverage.  In
general, the Agency expects to use this provision only in cases
where PRPs  are small firma with few aasets.  Therefore, legions
should not  make requests for Pederal indemnification where PRPa
are large corporations with substantial Assets or where tbe PIPs,
as a group, have substantial aaaets.  AS • result, EPA does not
expect requests for Pederal indemnification .to become an integral
part of settlement negotiations.

     EPA plans to provide additional guidance la the future
concerning  tbe determination* that need to be made as a
prerequisite to indemnifying RACa working tor PRP*  (such as
defining "net assets and resources" of the PRPs, and whether  the
PRPs *re "unable to provide adequate indemnification*).  Ontil
EPA distributes this guidance, all such determinations will be
made by the Task Porce.

     EPA indemnification-of A BAG working for a PRP is A measure
of lAst resort.  Xf EPA dees provide iadem&ifiCAtion  in  these
esses, the  consent decree  (or order) should specify terms And
conditions, using the model EPA indemnifieetion Agreement for
RACs working for PIPs shown in Attachment A.   Xf IPA  eaters into
sn indemnification agreement with A RAC working for A PRKa),  tbe
RAC mustt

o    RetAin finAncial responsibility for A deductible Amount  if
     commercial pollution  liability insurance  is unavailable  or
     unreasoaAbly priced)  And

o    Exhaust All administrative,  judicial,  And common law claim*
     for indemnification against  all PRPs participating in  the
     cleanup of the facility before IPA can  pay a  claim.

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                                11         OSWER Directive 9135.5


      If  a BAC ha«  received partial indemnification from a PRP(e>,
 EPA  aay  aUfi provide  indemnif ieation in eaatt where tht VHP
 indemnification  ia  dttmtd inaufficient, and in miied funding
 eaaae.   EPA may  provide  indemnification abov« the PRP
 indemnification.   The content decree ahould apecify the ttrma and
 eonditiona uaing the  model EPA indemnification agreemeat ahown in
 Attachment A.

      All requeata for BPA indemnification of a RAC working for a
 PRKe) at a iuperfund aite ahould be aubmitted to both the
 Indemnification  Taak  Force, c/o Director, Office of Maate
 Programa Enforcement  (OWPE), and to the Regional Superfund
 Enforcement Branch  Chief.  Pleaae identify the Regional Site
 Coordinator and  the Regional Counael'a lite tepreaentative.
 Include pertinent  information regarding the number of FRPa,
 financial profile  of  the PRPe, type of work to be performed,
 etc., auch that  the Taak Force can make determinationa per
 Section 119(c)<4) and Section ll«(c)<5).

      Open determining that a RAC meeta all of the circumatancea
 and  requirementa aet  forth in Section  119 and in EPA interim
 guidelinea, the  Taak  Porce will evaluate an amount to which the
 PRP(a) ia able to indemnify the RAC and an amount to which EPA
will  indemnify the  RAC in etceaa of the ?RP Indemnification
 amount.  Any EPA indemnification provided to a RAC(a) working for
PRP(a) will be aubject to limits, deduetiblea, and other
 limitationa aa required  by Section UffcHS).  Xf the Taak Force
recommenda approval of the indemnification requeat, the Office of
 the Comptroller  will  provide concurrence  (or non-concurrence)
within aeven calendar daya of receipt  of the recommendation.
Final approval for  EPA indemnification of a PRP RAC will be made
by the Director  of  OWE.


RACJ Workine for Fits Without IFA Indemnification

     Thpae RACa  working  for PRPa at Superfund aitea who do not
receive indemnification  from EPA mty either receive no
indemnification  at  til,  or may receive indemnification from PRPa
only.  For tbomm RACa working with no  indemnification, PUPa
ahould demenatrate  that  the RAC it qualified to perform the work
adequately, baa  aufficient financial capability to complete the
projected work,  and demonatratea financial reeponaibility  for
potential third  party liability coat*.  Thia can be enaured
 through a combination of adequate competition in the contract
procurement proceaa and  a demonatration of financial
reaponaibllity.  Such a  demonatration  can conaiat of. purchaae of
performance bonde,  lettera of credit,  inaurance, maintenance  of  a
truat fund, etc.  A conaent decree ahould apecify the
aforementioned.

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                                12         OSWER Directive 9835.S


     Pot tbfsa RACs receiving, indemnification from PUPs only (and
where tPA eVMJ  tht indemnification to be adequate), RACS should
be qualified^ to  perform work adequately.  This can bt ensured
through a combination of adequate competition in the contract
procurement  process, and through * demonstration of financial
responsibility.  The PRP indemnification is sufficient
demonstration of financial responsibility; therefore/ performance
bonds, letters of credit, etc.* are not required.  The concent
decree should specify the aforementioned as well as the
indemnification  terms and conditions.


Publicly Owned Treatment Worm

     Section 119
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                                13          OSWER OirtCCivt 9835.5
     Please dirtct All questions and couents to Robert Mason at
FTS 382-4015 oc Tom Gillis at PTS 312-4524
Attachments
A. Mod«l lnd««nifieation
I. CZXCLA (a* a»«ndtd) Stetion 119
cc:  AdBinictrator
     Deputy AdBinistratoc
     Central Coun»«l
     Regional Grant* Office, Region* I-X
     Regional Financial Management Office, Regioni I-X
     Regional Superfund Branch Chief*, Regions I-X

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          Attachment A





MODEL INDEMNIFICATION AGREEMENTS

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     Thii attmcnmant contains modtl EPA indamnif ication
agraamanta £ mt ot« by EPA, Stataa, and PRPa when RACa aaak
           twi
                teom EPA.  Any dtviatioh fro« th« nodal languagt
must ba approved by tht EPA Indamnif ieation Taak Porea.  Pour
modtl a ara actaAad:

I.   Modal CPA/RAC Indamnif ieation Agraaaant
II.  Modal Stata Cooparativa Agraamant Indamnif ieation Spacial
     Condition
III. Modal EPA/RAC Indamnif ieation Agraaaant for RACa undar
     Contract with PRPa
IV.  Modal EPA/ SITES Program Tachnology Vandor Indamnif Ieation
     Agraamant

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MODEL EPA/RAC INDEMNIFICATION AGREEMENT

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H.   Insurance — Liability to Third Persons —
     Commercial Organizations
     (EPAAR 1552".228-70>  UP* 198O  (with deviation)

     (t)  This Cleuae H             will b« modified by the
mutual agreement of tht parties hereto within 110 days of th*
EPA'* promulgation of final guidelines for carrying out the
provision* of Section 119 of the Comprehenaivt Environmental
Reaponse, Compenaation, and Liability Act of 1980, aa amended
(CEKCLA).

     (b)  Tht Contractor ahall procure and maintain such
insurance aa is required by law or regulation, including that
required by FA* Part 28, in effect as of the date of eiecution of
thia contract, and any such inaurance aa the Contracting officer
may, from time to time, require with reapect to performance of
thia contract.

     (c)  At a minimum, the Contractor shall procure and maintain
the following typea of inaurance.

     (1)  workmen'a compensation and occupational diaeaae
inaurance in anounta to aatiafy State law»

     (2)  Employer'a liability inaurance in the minimum amount of
$100,000 per occurrence;

     (3)  Cowprehenaive general liability inaurance for bodily
injury, death or loaa of or damage to property of third persona
in the minimum amount of $1,000,000 per occurrence;

     (4)  When veaaela are uaed in the performance of the
contract, veaael collision liability and indemnity liability
inaurance in such amounts as the Contracting Officer may require
or approve:  provided, that the Contractor may, with the approval
of the Contracting Officer, maintain a ••If-insurance program.
All insurance required pursuant to the provisions of this
paragraph shall be in such form and  for such periods of time  aa
the Contracting Officer may,.from time to time, require or
approve and with insurers approved by the Contracting officer.

     (d)  The Contractor further agrees that  it will make
diligent efforts throughout contract performance  in accordance
with IFA guidelines to obtain adequate pollution  liability
insurance.

     (e)  The Contractor agrees, to  the eitent and  in the  manner
required by the contracting Officer, to submit for  the  approval
of the Contracting Officer all -insurance maintained by  the
Contractor in connection with the performance  of  this contract
and for which the contractor seeks reimbursement  hereunder.  The

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Contractor's sobmission shall include documentation demonstrating
its diligent efforts to obtain pollution liability insurance.

      (f)  ?ht Contractor shall bt reimbursed, for the portion
allocabl* to this contract, tht reasonable cost of insuranct
(including reserves for self-insurance) as required or approved
pursuant to the provisions of this contract clause.

      fg)(l)  Pursuant to Section 119 of CCRCLA, the EPA will hold
harmless and indemnify the Contractor against any liability
(including the expenses of litigation or settlement) for
negligence arising out of the Contractor's performance under thii
contract in carrying out response action activities.  Such
indemnification shall apply only to liability not compensated  by
insurance or otherwise and shall apply only to liability which
results froe a release of any hazardous substance or pollutant or
contaminant if such release arises out of the response action
activities of this contract.  Further, any liability within the
deductible amounts of the Contractor's insurance will net be
covered under this contract clause H             .

      (2)  For purposes of this clause  (g), if the Contracting
Officer has determined that the insurance identified in paragraph
(d) is noc available at a reasonable cost, the Government will
hold harmless and indemnify the Contractor for liability to the
extent such liability exceeds $100,000.00.

      (3)  The Contractor shall not be  reimbursed for liabilities
as defined in (g) (including the expenses of litigation or
settlement) that were caused by -the conduct of the Contractor
(including any conduct of its directors, managers, staff,
representatives or employees) which was grossly negligent,
constituted intentional misconduct, or demonstrated a lack of
good faith,  further, the Contractor shall not be indemnified for
liability arising under strict tort liability, or any other, basis
of liability other than negligence.

      (h)   The Government may discharge its liability under this
contract clause by making payment* directly to the Contractor or
directly to parties to whom the contractor may be liable.

      
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                                3

Contractor vffieh is covtrtd by this contract claust, and shall
tntitlt tht Govtrnmtnt, at its tltetion, to control, or assist in
tht stttltwtnt o~r dtftnst of. any such claim or action.  Tht
Govtrnmtnt will indemnify tht Contractor with rtsptct to his
obligation to subcontractors undtr such subcontract provisions.
Tht Govtrnmtnt may dischargt its obligations undtr this paragraph
by staking paymtnta dirtctly to subcontractors or to parties to
who* tht subcontractors may bt liablt.

     (j)  If insuranct covtragt rtquirtd or approvtd by tht
Contracting Offictr is rtductd without tht Contracting Offictr's
approval, tht liability of tht Govtrnatnt undtr this contract
claust will not bt incrtastd by rtason of such rtduetion.

     (k)  Tht Contractor shall:

     (1)  Promptly notify tht Contracting Offictr of any claia or
action against tht Contractor or any subcontractor which
rtasonably aay bt txptcttd to  involvt indtsmification undtr  this
contract claust;

     (2)  Furnish tvidtnct or  proof of any  claim  covtrtd by  this
contract claust in tht manntr  and  fora rtquirtd by  tht
Govtrnatnt; and

     (3)  laatdiattly furnish  tht  Covtrnatnt copits  of  all
ptrtintnt paptrs rtctivtd by tht Contractor.   Tht Govtrnatnt  may
dirtct, control, or assist tht stttltatnt or dtftnst of  any  such
claim or action.  Tht Contractor shall coaply  with  tht
Govtrnatnt's dirtetions, and txtcutt any authorizations  rtquirtd
in rtgard to such stttltatnt or dtftnst.

     (1)  Rtimburstatnt for any liabilitits undtr this  contract
claust will not txcttd appropriations availablt froa CtlCLA's
Hazardous Substanct Suptrfund  (txctpt to tht txttnt  that Congrtss
aay aakt appropriations to specifically fund any  dtficitncits)  at
tht tiat .such liabilities are  rtprtstnttd by final  judgatnts or
by stttltatnt* approvtd in writing by tht Govtrnatnt.

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                xz
MODEL STATE COOPERATIVE AGREEMENT
INDEMNIFICATION SPECIAL CONDITION

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Attaehmtnt


     (1) Pursuant to Section 119 of CERCLA, tht EPA will hold
harnltss and inStmnify tht Contractor against any third party
liability (including tht txptnsts of litigation or stttlemtnt)
for ntgligtnct arising out of tht Contractor's performance undtr
this contract in carrying out rtsponst action activities.  Such
indemnification shall apply only to liability not comptnsattd by
insuranct or othtrwist and shall apply only to liability which
rtsults from a rtltast of any hazardous substanct or pollutant  or
contaminant if such rtltast arists out of tht rtsponst action
activitits of this contract.  Purthtr, any liability within tht
dtduetiblt amounts of tht Contractor's insuranct rtquired by this
contract will not bt covtrtd by this claust.  This Claust will  bt
•odifitd by tht mutual agrttetnt of tht partits htrtto within 180
days of tht CPA's promulgation of final guidtlints for carrying
out tht provisions of Stction 119 (CERCLA).

     (A)  Tht Contractor shall submit to the Statt Contracting
          Offictr within 30 days of award a writttn stattmtnt
          from an insuranct broktr stating that tht Contractor
          has atttnpttd to stcurt pollution liability covtragt
          from insuranct carritrs in tht past sii months*

     (B)  If tht Contractor has stcurod pollution liability
          covtragt,  it must submit a copy of tht policy and
          dtclaration pagt to tht Statt Contracting Offictr; and

     (C)  Evtry twtlvt months, or as dirtcttd by tbt EPA, tht
          Contractor shall submit to tht Ctatt Contracting
          Offictr writttn documentation of tht additional tfforts
          •adt by tht contractor to stcurt pollution liability
          insuranct covtragt, including:

          o    Copits of applications to thrtt known undtrwrittrs
               of pollution liability insurance;

          o    A status rtport of any pollution liability
               insuranct obtained, to includt type of covtragt,
               premium chargtd, limits of eovtragt, dtductiblts
               •ad major ttrms and condition* of eovtragt  (e.g.,
               a copy of tbt actual dtclaration pagt could bt
               provided in lieu of a status report);

          o    If pollution liability coverage was offered by  an
               underwriter, but not accepted by the KAC/ a report
               on the insurance offered  (such as the "status
               report" required above), and a summary of tbt
               reasons why such coverage was not accepted;

          o    If pollution liability coverage was rejected  by
               the underwriter, a summary of the reasons why such
               coverage was dtnitd; and

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EPA INDEMNIFICATION
EPA will providf indemnification pursuant to Section 119 of
CERCLA, »» aaended, to contractors carrying out response actions
under this agreement provided that tht Statt certifies to EPA
that:

1.   The contracts awarded under this agreement art defined in
     section 119(t) of crRCLA, as a»«ndtd;

2.   The contracts awarded under this agreement include the
     following clause that exclusively governs EPA
     indemnification:

     (see attached clause)

3.   At the end of each calendar year and at the end of each
     project period, all statenenta and materials related to
     pollution liability insurance submitted by the Contractors
     to the State Contracting Officer will be transferred to EFA.

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           e     A  status  report  on  what  alternative pollution
                liability risk  transfer  mechanisms the contractor
                has  pursued  othtr  than commercial pollution
                liability insurance (e.g., captives, letters of
                credit, group purchasing of insurance, etc.).

      (2)   For  purposes of this  clause,  the EPA will hold harmless
 and  indemnify  the contractor for  liability described herein to
 the  extent such liability exceeds  $100,000.00.

      (3)   The  Contractor  shall  not be reimbursed for liabilities
 as defined herein  (including the expenses of  litigation or
 settlement)  that were caused by the conduct of the Contractor
 (including any conduct of its  directors, managers, staff,
 representatives or  employees)  which was grossly negligent,
 constituted  intentional  misconduct, or  demonstrated a lack of
 good  faith.  Further, the Contractor shall not be indemnified for
 liability  arising under  strict  tort liability, or any other basis
 of liability other  than  negligence.

      (4) The EPA may discharge  its liability  under this contract
 clause by making payments directly to the Contractor or directly
 to parties to  whom  the Contractor  may be liable.

      (5)  With  prior written approval of the  State Contracting
 Officer, the Contractor  may include in  any subcontract under this
 contract the same provisions in this clause whereby the
 Contractor shall indemnify  the  subcontractor.  Such, a subcontract
 shall provide  the same rights  sod  duties and  the same provisions
 for notice,  furnishings  of  evidence or  proof, and the like,
 between the Contractor and  the  subcontractor  as are established
 by this clause.  Similar  indemnification may  be provided for
 subcontractors  at any time  upon the same terms and conditions.
 Subcontracts providing for  indemnification within the purview of
 this contract  clause shall  provide for  prompt notification to tfce
Contractor which is covered by  this contract  clause, and shall
 entitle the It*, at its  election,  to control, or assist in the
 settlement or  defense of  any such  claim or action.  The IFA will
 indemnify  the;  Contractor  with  respect to his  obligation to
 subcontractors  under such subcontract provisions.  The EPA may
 discharge  its  obligations under this paragraph by making payments
 directly to subcontractors  or  to  parties to whom the
 subcontractors  may  be liable.

      (I)   If insurance coverage required or approved by the  Stac*
 Contracting Officer is reduced  without  the State Contracting
 Officer's approval, the  liability  of the EPA  under  this contract
 clause will not be  increased by reason  of such reduction.

      (7)  The  Contractor  shall:

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          o    Promptly notify the Assistant Administrator,
               OSWER, EPA of any claim or action against the
               Contractor or. any subcontractor which reasonably
               nay bt expected to involve indemnification under
               this contract clause.

          o    Purnish evidence or proof of any claim covered by
               this contract clause in the manner and form
               required by the EPA.

          o    Immediately furnish the EPA copies of all
               pertinent papers received by the Contractor.  The
               EPA may direct, control, or assist the settlement
               or defense of any such claim or action.  The
               Contractor shall comply with the EPA'a directions,
               and execute any authorizations required in regard
               to such settlement or defense.

          o    Submit any disagreements concerning EPA
               indemnification to the Assistant Administrator,
               OSWCR, EPA for resolution.  Decision by the
               Assistant Administrator will constitute final
               Agency action.

     (8)  Reimbursement for any liabilities under this contract
clause is available exclusively from the EPA and will not exceed
appropriations available from CERCLA's Hazardous Substance
Superfund (except to the extent that Congress may make
appropriations to specifically fund any deficiencies) at the time
such liabilities are represented by final judgement or by
settlements approved in writing by the EPA.

     (9)  Nothing in this clause shall be construed as an
indemnification agreement between the State and the Contractor.

     (10) Nothing in this contract shall be construed to create,
either expressly or by implication, any contractual relationship
between EPA and the Contractor except as specifically provided  in
this clause.  IPA is not authorised to represent or act on behalf
of the State la any manner relating to this contract and has no
responsibility with regard to the mutual obligations of the State
and the Contractor as provided herein.

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                  Ill

MODEL EPA/RAC INDEMNIFICATION AGREEMENT
   fOR RACS UNDER CONTRACT WITH PRPS

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                 MODEL CLAUSES FOR PRP CONTRACTS
Sec.  _         Pollution Liability Insurance and Contractor
               Indemnification

A. Pollution Liability Insurance

     (1) The Contractor shall obtain such pollution liability
insurance (hereinafter insurance) as the EPA determines is
available at a fair and reasonable price at the time of contract
award.  The cost of such insurance is an allowable contract cost.

     (2) The Contractor shall report to EPA on its efforts  to
obtain pollution liability insurance.

     (A)  Within 30 days of signing this agreement, the
          Contractor shall subnit to the EPA a written statement
          from an insurance broker stating that the Contractor
          has attempted to secure pollution liability coverage
          from insurance carriers in the past sii months;

     (B)  Zf the Contractor has secured pollution liability
          coverage, it must subnit a copy of the policy and
          declaration page to EPA; and

     (C)  Every twelve months, or as directed by the EPA, the
          Contractor .shall submit to the EPA.written
          documentation of the additional efforts made by the
          contractor to secure pollution liability insurance
          coverage including:

          o    Copies of applications to three known underwriters
               of pollution liability insurance;

          o    A status report of any pollution liability
               insurance obtained, to include type of coverage,
               premium charged, limits of coverage, deduetibles
               and major terms and conditions of coverage  (e.g.,
               a copy of the actual declaration page could be
               provided in lieu of a status report);

          o    Zf pollution liability coverage was offered by an
               underwriter, but not accepted by the RAC, a report
               on the insurance offered  (such as the "status
               report" required above),  and a summary of, the
               reasons why such coverage was not accepted;

          o    If pollution liability coverage was rejected by
               the underwriter, a summary  of the reasons why  such
               coverage was denied; and

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           o    A  statue  report  on  whit1 alternative pollution
               lability  risk transfer  mechanisms the contractor
               h-as  puriued  other than  commercial pollution
               liability  insurance (e.g., captives, letters of
               credit, group purchasing of  insurance, etc.).

      (3)  If, during the period  of  this  contract, EPA determines
 that  insurance or additional insurance  is available, the
 contractor shall  obtain such insurance.


 8.  PRP  Indemnification

      [The  following are minimum clauses.  PtPs may include
      additional,  non-conflicting terms.]

      (1) The PRP* will hold harmless and indemnify the Contractor
 against  any third party liability  (including the eipense of
 litigation or settlement) for negligence arising out of the
 Contractor's performance  of this contract in carrying out
 response action activities.  Such  indemnification shall apply
 only  to  liability which results from a  release of a hazardous
 substance, pollutant, or  contaminant if such release arises out
 of the response action activities  in this contract.
 Indemnification under this  paragraph will apply only to liability
 not compensated by  insurance, not  within the deductible amounts
 of the Contractor's  insurance in paragraph  A, above, nor within
 the deductible in paragraph D,  below.   Indemnification provided
 under this paragraph shall  not  eiceed  $         (amount
 determined by EPA).                     "

      (2) Any liability subject  to  indemnification shall be
presented first under this  paragraph.

      (3) The PRPs are individually and  collectively responsible
for the  indemnification under this paragraph, unless otherwise
specifically provided within.

      (4) If the PKPs fail to satisfy the indemnification claim
within 10 asys of its presentation, the Contractor will notify
 the tfA of such failure.
C.  EPA Indemnification


     (1) Pursuant to Section  119 of  the  Comprehensive
Environmental Response, Compensation,  and  Liability  Act  of  1910,
as amended  (CEKCLA), the EPA  will  bold harmless  and  indemnify  the
Contractor against any third  party liability  (including  the
expenses of litigation or settlement)  for  negligence arising out
of the Contractor's performance under  this contract  in carrying

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 out  responaa  Iction  activities.   Such  indemnification  shall apply
 only to  liability  not  compensated by insurance,  indemnification
 provided in accordance  with ^paragraph  B,  above,  or otherwise and
 shall  apply only to  liability which reaulta from a release of any
 hazardous  substance  or  pollutant  or contaminant  if such rtltast
 arists out of  tht  response action activities of  this contract.
 Further,  any  liability  within the deductible amounts of the
 Contractor's  Insurance  in paragraph A, above, or the deductible
 in paragraph  D, below,  will not be covered by this paragraph.

      (2)  This  paragraph will be Modified  by the  mutual agreement
 of the parties hereto within 180  days  of  the EPA's promulgation
 of final  guidelines  for carrying  out the  provisions of
 Section  119 of CERCLA.

      (3)  The  Contractor shall not be  rtimbursed for liabilities
 as defined herein  (including the  expenses of litigation or
 settlement) that were caused by the conduct of the Contractor
 (including any conduct  of its directors,  managers, staff,
 representatives or employees) which was grossly  negligent,
 constituted intentional misconduct, or demonstrated a  lack of
 good faith.  Further, the Contractor shall not be indemnified for
 liability arising  under strict tore liability, or any  other basis
 of liability other than negligence.

      (4)  The EPA may discharge its liability under this contract
paragraph by making payments directly  to  the Contractor or
directly to parties to  whom the Contractor may be liable.

      (5)   With prior written approval  of  the EVA, the  Contractor
may  include in any subcontract under this contract the same
provisions in  this clause whereby the  Contractor shall indemnify
 the  subcontractor.  Such a subcontract shall provide the same
 rights and duties  and the same provisions for notice,  furnishings
of evidence or proof, and the like, between the  Contractor and
the subcontractor  as are established by this paragraph.  Similar
indemnification «ay be  provided for subcontractors at  any time
upon the same  terms and conditions.  Subcontracts providing for
indemnification within  the purview of  this paragraph shall
provide for prompt notification to the Contractor which is
covered by this paragraph, and shall entitle the EVA,  «t its
election, to control, or assist in the settlement or defense  of
any  such claim or  action.  The EPA will indemnify the  Contractor
with respect to his obligation to subcontractors under such
subcontract provisions.  The EPA  Bay discharge its obligations
under this paragraph by malting payments directly to
subcontractors or  to parties to whoa the  subcontractors may  be
liable.

     (6)   zf insurance  coverage required  in paragraph  A, above,
is reduced without the  EPA's approval, the  liability of  the  EPA

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 undtr  thia  paragraph  will  not  ba  ineraaatd  by  raason of such
 rtduction.

      (7)  Tht  Contractor ahall:

          o    Promptly notify tha Aaaiatant Adminiatrator,
                OSHER,  EPA  of any  claim or action againat tha
                Contractor  or any  aubcontractor which raaaonably
                •ay  ba  axpactad to involva indemnification undar
                thia paragraph.

          o    Furnish avidanca or proof of any claim covartd by
                thia paragraph  in  tha mannar and form raquirad by
                tha  EPA.

          o    Immadiataly furniah tha EPA  copiaa of all
                partinant papara racaivad by tha Contractor.  Tha
                EPA may diract, control, or  aaaiat tha aattlamant
                or dafanaa  of any  auch claim or action.  Tha
                Contractor  ahall comply with tha EPA'a diractiona,
                and axacuta any authorization  raquirad in ragard
                to auch aattlamant or dafanaa.

          o     Submit any  diaagraamanta concarning EPA
                indamnification to tha Aaaiatant Administrator,
                OSWER, EPA  for  raaolution.   Daciaion by tha
                Aaaiatant Administrator will conatituta final
                Agancy action.

     (8) Tha Contractor may praaant a claim for indamnification
undar thia  paragraph only  aftar compliance  with tha proviaiona in
paragrapha  B, abova, and C, balow.

     (9) Zf tha PRPa fail  to indamnify tha  Contractor in tha
amount providad in paragraph B, abova, no indamnification for
that amount will ba paid undar thia paragraph  until tha
Contractor  damonatrataa to EPA'a  aatiafaction  that it haa
axhauatad all adminiatrativa and  judicial claima for
indamnification undar paragraph B, abova, and  any common law
claima for  indamnification that it haa againat tba PRPa.
Evidanea of aihauation of  claima  may includa a judicial ordar
diamiaaing  tba  Contractor'a claima, documantation of tha
Contractor'a unauccaaaful  afforta to anforea a judgamant againat
tha PRPa, or documantation of  tha Contractor'a unauccaaaful
claims in a bankruptcy procaading involving tha PRPa.

     (10) Raimburaamant for any liabilitiaa undar thia paragraph
will not axeaad appropriations available from  CERCLA's Hazardous
Subatanca Suporfund (axcapt to tha aitant that Congraaa may  maka
approprUtionr  to apacifically fund any daficianciaa) at tha tima
auch liabilitiaa ara rapraaantad  by final judgamant or by
aattlamanta approvad in writing by tha EPA.

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     (11) Nothing in this contract shall bt construed to create,
• ithtr expressl? or by implication, any contractual relationship
bttwttn EPA and the Contractor eicept as specifically provided in
this section.  EPA it not authorized to represent or act on
behalf of the  (PRPs) in any Manner relating to this contract and
has no responsibility with regard to the mutual obligations of
the (PRPs) and the Contractor as provided herein.


D.  Contractor Deductible

     The Contractor shall pay the first $100*000.00 of any
liability subject to indemnification under this contract h>««?re
seeking indemnification under paragraphs B and C, above.

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                    IV






MODEL EPA/ SITES PROGRAM TECHNOLOGY VENDOR




         INDEMNIFICATION  AGREEMENT

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 EPA  Indemnification
      (1)   Pursuant  to  Section  119 of CERCLA, the EPA will hold
harmless and  indemnify  the Recipient against any liability
 (including  tht expenses of litigation oc settlement) for
negligence  arising  out  of the  Recipient's performance under this
cooperative agreement  in carrying out response action activities
through the Superfund  Innovative Technology Evaluation program
under Section 311(b) of CERCLA.  Such indemnification shall apply
only to liability not  compensated by insurance or otherwise and
shall apply only to liability  which results from a release of any
hazardous  substance or  pollutant or contaminant if such release
arises out  of the response action activities of this cooperative
agreement.  Further, any liability within the deductible amounts
of the Recipient's  insurance will not be covered under this
clause.  If the recipient has  secured pollution liability
coverage,  it must submit a copy of the policy and the declaration
page to EPA.

     (2)   Every twelve  months, or as directed by the EPA, the
Recipient shall submit  to the  Contracting Officer written
documentation of the additional efforts made by the recipient to
secure pollution liability insurance coverage, including:

          o    Copies  of applications to three known underwriters
               of pollution liability.insurance;

          o    A status report of any pollution liability
               insurance obtained, to include type of coverage,
               premium  charged, limits of coverage, deductibles
               and major terms and conditions of coverage (e.g.,
               a copy  of the actual declaration page could be
               provided in lieu of a status report);

          o    It pollution liability coverage was rejected by
               the underwriterf a summary of the reasons why such
               coverage was denied; and

     (3)  Per purposes  of this clause, the Government will hold
harmless and indemnify  the Recipient for liability to the extent
such liability exceeds  $100,000.00.

     (4)  The Recipient shall  not be reimbursed for liabilities
as defined berein (including the expenses of litigation -or
settlement) that were  caused by the conduct of the Recipient
(including any conduct  of its  directors, managers,  staff,
representatives or employees)  which was grossly negligent,
constituted intentional misconduct, or demonstrated a lack of
good faith.  Further,  the Recipient shall not be  indemnified  for
liability arising under strict tort liability, or  any other basis
of liability other  than negligence.

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      (5)   Tht Government nay discharge its liability under this
 cooptrativt agrfement clause by making payments directly to the
 Recipient  or directly to parties to whoa the Recipient may be
 liable.

      («)   With prior written approval of the Contracting Officer,
 the Recipient nay  include in any subcontract under this
 cooperative agreement the saae provisions in this clause whereby
 the Recipient shall indemnify the subcontractor.  Such a
 subcontract shall  provide the saae rights and duties and the saae
 provisions for notice between the Recipient and the subcontractor
 as are established by this clause.  Siailar indeanification may
 be provided for subcontractors at any time upon the saae teras
 and conditions.  Subcontracts providing for indeanification
 within the purview of this cooperative agreeaent clause shall
 provide for prompt notification to the Recipient which is covered
 by this cooperative agreement clause, and shall entitle the
 Government, at its election, to control, or assist in the
 settlement or defense of any such claia or action.  The
 Covernaent will indemnify the Recipient with respect to his
 obligation to subcontractors under such subcontract provisions.
The Government aay discharge its obligations under this paragraph
by malting payments directly to subcontractors or to parties to
whom the subcontractors may be liable.

     (7)    If insurance coverage required or approved by the
Contracting Officer is reduced without the Contracting Officer's
approval, the liability of the Governaent under this cooperative
agreement clause will not be increased by reason of such
reduction.

     (8)   The Recipient shall:

     (a)   Promptly notify the Assistant Adainistrator, OSWER, EPA
of any claia or action against the Recipient or any subcontractor
which reasonably Bay be expected to involve indeanification under
this cooperative agreeaent clause;

     
-------
Decision by €%• Assistant Administrator will constitute final
Agency action.

     (9)  Reimbursement for any liabilitita under this
cooperative agreement clause will not exceed appropriations
available from CERCLA's Hazardous Substance Superfund (txctpt to
th* cxttnt that Conqctss aay >akt appropriations to sptcifically
fund any daficitncits) at tht tiat such liabilities ar«
represented by final judgement or by settlements approved in
writing by the Covernaent.

     (10)  This Clause will be aodified by the autual agreeaent
of the parties hereto within 180 days of the EFA's promulgation
of final guidelines for carrying out the provisions of Section
119 of the Comprehensive Environmental Response* Compensation,
and Liability Act of I960, as amended (CERCLA).

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   ATTACHMENT  •






CERCLA (AS AMENDED)



    SECTION 119

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                                                                                     OSWER  *   9834.7-1A


                 FedaraJ Reyi»ter / Vol. 52. No.  218 / Thursday. November 12. 1987 / Notice*           43393
                   aTieii COMTACT.
 For information on Registration
 Standard schedules, contact, by null:
 jean Frana. Registration Division (TS-
 TeTQ. Office of Pesticide Program*.
 Environmental Protection Agency. 401 M
 SL SW_ Washington. DC 20460.
   Office location and telephone number
 Rm. 1114. CM *2.182: }*fl*r*on Davis
 Highway. Arlington. VA. (703) SS7-0&44.
   For iaformstion on public dockets.
 thtir availability, and docket indices.
 contact Franklin D. Rubu (7O3-SS7-4434)
 of the Information Services Section, in
 Rin. 242 at tht above address.
 VUWPLflMNTAMY MWNMATKHC The
 Registration Standards program i* EPA's
 approach (o the reassessment and
 reregistration of pesticides a* mandated
 by Congreta in section 3(g! of (he
 Federal Insecticide. Fungicide, and
 Rodenticide Act (FIFRA). The pesticide
 product* currency registered by EPA
 contain more than 000 distinct active
 ingredients. Under this program the
 scientific data base underlying each
 active ingredient it thoroughly reviewed.
 and essential but missing scientific
 studies are identified.
  The reassessment may result in
requirements for submission of dau
needed to evaluate fully the safety of the
compound according to contemporary
 scientific standards. The results of the
review ere reflected tit a Registration
Standard, which states the Agency s
regulatory positions regarding the
 products containing an active ingredient
 and the rationale for each position, as
 well as requirements for submission of
 additional data needed to complete the
 assessment, and label warnings or other
 regulatory restrictions needed to protect
 health and the environment
  The purpose of this notice is to inform
the public of Registration Standard*
currently under development It also
serves to provide the public with an
opportunity to submit additional data.
pertinent to theee reviews. EPA
 encourages the public to provide
 information relevant to the review of
 individual active ingredients for which
 Registration Standards are scheduled in
 fy 68. The Agency is particularly
 interested in receiving the following
 types of information: human toxicology.
 residue chemistry, product chemistry.
 environmental fate, human exposure, or
 ecological effects.
  Registration Standards for the
 pesticide* listed below will be  under
 development In FY 86. An asterisk after
 the name indicates that  the Agency is
 re-reviewing the chemical based on
 information  submitted as a result of an
 earlier Registration Standard,
  Current regulations on'Registration
Standards and Special Review provide
for the establishment of a public docket
for Registration Standards under
development and Special Review
actions, the maintenance of docket
lndjce*< +*& the establishment of a
mailing list of persons wishing to receive
the docket indices oa a regular basis.
Special Review and Registration
Standard dockets contain, among other
things, material* submitted to the
Agency by parties outside of
government. Agency documents made
available to persons outside of
government, and memoranda of
meetings with persons outside of
government concerning pending Special
Review* and Registration Standard*
under development.
  la accordance with i ms«dK2) of
the Registration Standard regulations
and  i 154.15(0(3) of the Special Review
regulation*, the Agency has established
a mailing list for docket indices.
Separate mailing list* art maintained (or
Registration Standard* an Special
                                       Reviews. Person* on each mailing list
                                       will receive automatically tht docket
                                       indices (orupdates to previous indices)
                                       for Registration Standards or Special
                                       Reviews. The** will b« distributed on a
                                       monthly or quarterly basis, as required
                                       by the regulations. Persons on each
                                       mailing list will receive docket indices
                                       for all open dockets. Persons will be
                                       required to renew their requests for
                                       inclusion on the mailing list tnnuslly.
                                         Any person wishing to be included on
                                       either mailing list should submit his or
                                       her name, affiliation (if any), and
                                       mailing address to the address given
                                       earlier in this notice. Organizations.
                                       groups and companies art requested not
                                       to submit multiple requests under
                                       different name*, but to designate *
                                       primsry recipient »i!h the organisation.
                                       This will reduce mailing cost! and
                                       Agency time in administering the
                                       mailing lists.
                                         Persons  currently on the Agency
                                       mailing list for either Registration
                                       Standard or Special Review indices
                                       must resubmit requests for continued
                                       inclusion on the mailing list it this time.
                                         Dattd: Novtmbtr i 198*.
                                       Dovjlii D.  C*mpt,
                                       Dtnctor. Offic» ofPmicitft frotramt.
                                       (FR Doc. S7~tttOS Filt4 n-10-*7: *:45 «m[
Superfund Program; 0* Minimi*
Contributor Settlement*

AOCNCV; Environmental Protection
Agency.
ACTION: Notice.

•AMSMANY: The Agency is publishing
today its Interim Model CERCLA section
122t|}(4) De Minima Waste Contributor
Consent Decree and Administrative
Order on Consent This document
provide* model language for drafting dt
ffiteiimir waste contributor settlements
under section 122tg) of tht
Comprehensive Environmental
Response. Compensation, and Liability
Act of I960 f "CERCLA" or "Superfund").
as amended  by the Superfund
Amendments and Raauthonxation Act
of 1MB ("SARA"). It is designed to  be
used in conjunction with the Interim
Guidance on Settlements with Dt
Minima Wast* Contributors under
section 122(g) of SARA, published at U
PR 24333 fjun* X. 198T). EPA is
publishing this document in order to
provide wide public distribution of
information  on this important aspect of
SARA implementation. The Agency m»y
revise the interim models based upon

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4S3M
Federal  Reyiitet / Vol. 52. No. 218  /  Thursday. Novtmber 12. 1987 / Notice*
experience gained in drifting de
minimi* settlements end upon public
comments received on the Interim
Guidance referenced tbov*.
  Tbi* publication does not addree*
settlements with d» minima landowner!
under section 122(g|(l)(B) of SARA.
which will  be covered by feparate
guidance.
WOft nUTTMtH DSPOMMATIOM COWTACT
}anice Unett. Mail Code LE-1J4S. U.S.
Environmental Protection Agency.
Office of Enforcement and Compliance
Monitoring. Waste Enforcement
Division. 401 M Street SW.. Washington.
DC 20460. (202) 3*2-3077.
Etfwart t Rah*.
Attociou Enforcement Counttlfor Wait*.
  Date; October a. 1987.
Oaobcr 19.1967.

Memorandum
Subject: Interim Model CERCLA Section
  122Lg)(«) D« Minima Watte
  Contributor Consent Decree and
  Administrative Order on Consent.
From: Edward E Reich. Associate
  Enforcement Counsel for Waste. Gene
  A. Luceto. Director. Office of Waste
  Programs Enforcement.
To: Regional Counsels. Region* I-X.
  RegionaJ  Waate Management Division
  Director*. Regions I-X.

/. Purpose
  The purpose of this memorandum is to
provide interim model language to assist
the Regions in drafting de minima
waste contributor consent decrees and
administrative orden-on consent under
section I22(g)(4) of the Comprehensive
Environmental Response.
Compensation, and Liability Act of 1900.
as amended by the Superfund
Amendments and Reauihonzation Act
of 19M. Pub. L No. 99-199. 42 U.S.C
9622tgH<) lMCERCLA").The attached
models are designed to be used in
conjunction with the "totenm Guidance
on S«tttements with Or Minima Watte
Contributor* under section 122(g) of
SARA." which was issued on June 18.
1987. and published at 52 HI 24333 (June
30.1987). The models do not penain to
settlements with de minima landowners
under section l22(g|U)(B) of CERCLA.
42 U.S.C. 9622(g)(l)(Bj. which will b«
addressed by separate guidance.
  The attached models contain the basic
legal and factual provisions necessary
for a df minimis contributor settlement
While the specific language may be
varied, consistent with the interim
guidance, to suit the facts of the ease
and the timing of the settlement, use of
the models  will help the Agency to
achieve quick, standardized, and
nationally consistent de minimi's
                      contributor settlements without
                      engaging in lengthy, resource-intensive
                      negotiations. The models may be
                      revised after we have gained experience
                      in drifting di minima settlements and
                      have completed our review of public
                      comments received on the interim
                      guidance referenced above.

                      II Ditdoimer
                        This memorandum and any internal
                      procedures adopted for it*
                      implementation are intended solely as
                      guidance for employees of the U.S.
                      Environmental Protection Agency. They
                      do not constitute rulemaking by the
                      Agency and may not be relied upon to
                      create a right or a benefit, substantive or
                      procedural enforceable at law or in
                      equity by any person. The Agency may
                      take scnon at variance with this
                      memorandum or its internal
                      implementing procedures.
                      Attachments

                      Attachment 1—Interim Model Section
                      122(g) W) Consent Decree
                        United States of America. Plaintiff, v.
                      (Insert Nam«(s) of Defendant(s)!.
                      Defendants}
                        Civil Action No. _____
                        Judge	

                      Consent Decree
                        (Note: If the complaint concerns
                      causes of action which are not resolved
                      by this document or names defendants
                      who are not signatories to this
                      document, the ntle should be "Partial
                      Consent Decree.")
                         Whereas,  the United States of
                      America, on behalf of the Administrator
                      of the United States Environmental
                      Protection Agency ("Plaintiff1 or
                      "United States") filed a complaint on
                      (insert date) against (insert defendants'
                      name* | ("Defendants") pursuant to
                      [insert causes of action and relief
                      sought, ej.. sections 206 and 107t«) of
                      the Comprehensive Environmental
                      Response. Compensation, and Liability
                      Act of 1880. as amended by the
                      Superfund Amendments and
                      Reauthorizetion Act of 1960. Pub. L 99-
                      499. 42 U.S.C. 9606 and 9607(a)
                      ("CERCLA") and Section 7003 of
                      Resource Conservation and Recovery
                      Act. as amended ("RCRA"). 42 OS.C.
                      •6073. seeking iniunctivt relief regarding
                      the cleanup of the (insert aite name]
                      ("Site") and recovery of coats incurred
                      and to be incurred in responding to the
                      release or threat of release of hazardous
                      substances at or in connection with the
                      Site):
                         Whereat, the United States has
                      incurred and continue* to incur response
                      costs in responding to the release or
                      threat of release of hazardous
aubauncct at or in connection, with the
Site:
  Whereat, the Regional Administrator
of the United State* Environment*!
Protection Agency. Region	
(."Regional Administrator") has
determined that prompt settlement of
this case is practicable and in the public
interest
  Whereas, this settlement involves
only a minor portion of the response
costs at the Site with respect to each
[insert "Defendant" or "Settling
Defendant" as appropriate):
  Whereat, (insert the amount and
toxicity criteria used to qualify for de
minima treatment under the particular
settlement, e.j.. "information currently
known to the United States indicates
that the amount of bazardou*
substances contributed to the Site by
each Settling Defendant doe* not exceed
	* of the hazardous substance* at
the Site, and that the toxic oc other
hazardous effects of the hazardous
substances contributed to the Site by
each Settling Defendant do not
contribute disproportionately to the
cumulative toxic or other hazardous
effects of the hazardous substance* at
the Site"]:
  Whereat, the Regional Administrator
baa. therefore, determined the amount of
hazardous substances contributed to
this Site by each Settling Defendant and
the toxic or other hazardous effects of
the hazardous substances contributed to
the Site by each Settling Defendants are
minimal in comparison to other
hazardous substances at the Site: and
  Whereat, the United State* and the
Settling Defendants agree that
settlement of this case without further
litigation and without the admission or
adjudication of any issue of fact or law
is the moat appropriate means of
resolving thia action;
  Now, therefore, it is ordered, adjudged
and decreed a* follows:

L IttriedJctiofl
  This Court has Jurisdiction over the
subject matter and the parties to this
action. The parties agree to be bound by
the terms of this Consent Decree and  not
to contest its validity in any subsequent
proceeding to implement or enforce its
term*.
U. Parties Bound
  This Consent Decree shall apply to
and be binding upon the United State*
and shall apply to and be binding upon
the Settling Defendants, their directors.
officers, employees, agents, successors
and assigns. Each signatory to this
Consent Decree represents that he or
she is fully authorized to enter into the

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                          R»gUl«r  /  Vol Si  No. 218  / Thur»d«y, Nov«mbtr 1Z 19B7  / Notice*
                                                                                                              4339S
 terms and condiuona of this Consent
 Decree and to bind legally the Party
 represented by him or her.
   (Not*: It may be necessary to include
 a Statement of Purpose and/or a
 Dtfinitioni provinon.]
 III. Payment
   1. Each Settling Defendant shall pay
 to the Hazardous Substance Superfund
 (insert as appropnata either "the
 amount set forth below" or "the amount
 aat forth in Attachment	to within
 	days (insert small amount of nm»
 ••g.. 10. 30 or 45] of entry of this Consent
 Decree.*
   2. [Note: If a premium payment is
 included in the dollar amount to  be paid
 by each Settling Defendant, the Consent
 Decree should explain what portion of
 the total payment compensates the
 United States for past and projected
 costs (including possible cos; overruns)
 and what portion of the  total payment is
 the premium amount. Lists may be
 attached and incorporated by reference
 as needed. A simple example follows:
  Of the total payment of $30.000 to be
 made by each Settling Defendant
 pursuant to Paragraph 1  of this Section.
$10.000 represents each Settling
Defendant's share of the response costs
including possible cost overruns, of the
remedial action consistent with the
Record of Decision ("ROD") for the Site
(which currently are estimated to be
between S	and S.—). and $20.000
represents each Settling  Defendant's
share of arty costs which may be
incurred if EPA determines that the
remedial action consistent with the ROD
is not protective of public health  or the
environment]
  (Note: This model assumes that there
will be only one ROD at the site. If
multiple operable unit RODs will be
issued at the aita. the decree must
clearly identify which ROD is being
referenced and should be structured to
take into account the additional
 remedial action contemplated in. tj~
the payment covenant not to sue. and
 reservation of rights provisions.)
  3. Each payment shall be made by
 certified or cashier's check made
 payable to "EPA-Hazardous Substance
 Superfund." Each cheek shall reference
 the site name, the number and address
 of the Settling Party, and the civil action
 number of this case, and shall "be sent to:
 EPA Superfund. P.O. Box 371003M.
  Pittsburgh. Pennsylvania 13231
  4. Each Settling Defendant shall
simultaneously sand a copy of its check
 to:
 (Insert name and address of Regional
  Attorney or Remedial  Project
  Manager]
IV. Civil Penalties
  In addition to any other remedies or
sanctions available to the United States,
any Settling Defendant who fails or
refuses to comply with any term or
condition of this Consent Decree shall
be subject to a civil penalty of up to
$3*0"" par day of such failure or refusal
pursuant to section 122(1] of CERCLA.
42 U.S.C 9022(1).

V. Certification of Settling Defendants
  [Note: The following language
regarding disclosure of information
concerning waste contributions to the
site should be used in cases in which the
de minima settlement is concluded pnor
to completion of PR7 investigations.
especially where information requests
or subpoenas have not been issued:
  Each Settling Defendant certifies that.
to the best of its knowledge  and belief, it
has provided to the United States all
information currently in its possession.
or in the possession of its officers.
directors, employees, contractors or
agents which relates  in any way to the
ownership, operation, generation.
treatment, transportation or disposal of
hazardous substances at or in
connection with the Site.]
VL Covenant not to sue
  1. Subject to the reservations of rights
in Section VII Paragraphs l and 2. of
this Consent Decree, upon payment of
the amounts specified to Section III.
Paragraph i. of this Consent Decree, the
United States covenants not to sue or to
take any other civil or administrative
action against any of the Settling
Defendants for "Covered Matters."
"Covered Matters" shall include any
and all civil liability for reimbursement
of response costs or for injunctive relief
pursuant to sections 1W or 107(a) of
CERCLA. 42 U.S.C MM or «07(«). «>d
section 7009 of RCRA. 42 U.S.C. 6073,
with retard to the Site.
  2. In consideration  of the United
States' covenant not to sue in Paragraph
1 of this Section, the Settling Defendants
agree not to assert any claims or causes
of action against the United States or
the Hazardous Substance Superfund
arising out of Covered Matters, or to
seek any other costs, damages, or
attorney's fees from the United States
arising out of response activities at the
Site.
VH. Reservation of Rights
  1. Nothing in this Consent Decree la
intended to be nor shall it be construed
as a release or covenant not to sue for
any claim or cause of action.
administrative or judicial, civil or
criminal past or future, in law or in
equity, which the United Slates may
have against any of the Settling
Defendants for
  (a] Any liability as a result of failure
to make the payments required by
Section QL Paragraph 1. of Ihis Consent
Decree: or
  (b) Any ma Hers .not expressly
included in Covered Matters, including.
without limitation, any liability for
damages to natural resources. [Note:
This natural resource damages
reservation must be included unless the
Federal natural resource trustee has
agreed to a covenant not to sue pursuant
to section 122fj)(2) of CERCLA. in
accordance with section 122U)(1) of
CERCLA. where the release or
threatened release of any hazardous
substance at the site may have resulted
in damages to natural resources under
the trusteeship of the United States  the
Region should notify the Federal na'.ur&i
resource trustee of the negotisnons snd
encourage the trustee to participate in
the negotiations.)
  2. Nothing in this Consent Decree
constitutes a covenant not to s« or to
take action or otherwise limits the
ability of the United States to seek or
obtain further relief from any of the
Settling Defendants, and the covenant
not to sue in Section VL Paragraph 1. of
this Consent Decree is null and void, if:
  (a) Information not currently known to
the United States is discovered which
indicates that any Settling Defendant
contributed hazardous substances to thr
Site in such greater amount or of such
greater toxic or other hazardous effects
tha' the Settling Defendant no longer
qualifies as a 'de minims parry at the
Site because [insert volume  and toxicity
criteria, e.f.. "the Settling Defendant
contributed greater than —_* of the
hazardous substances at the Site or
contributed disproportionately to the
cumulative toxic or other hazardous
effects of the hazardous substances at
the Site"]:
  (Notes  Unless a premium payment is
being made under Section ID of this
Consent Decree which compensates the
United States "for laking the risk that the
events noted in the reservations of rights
in subparagraphs (b) and (c) below may
occur, those reservations should be
included. A premium may be accepted
in lieu of one or both of the reservations
of rights m Subparagraphs (b) and (c)
below:
  (b) Coats incurred during the
completion of the remedial action (if
ROD is completed, insert -consistent
with the Record of Decision-) at the Site
exceed (insert dollar amount of cost
ceiling): or
  (c) The United States determines.
based upon conditions at the Site.

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 43396
             Federal Register / Vol. 52. No.  218 / Thursday. November 12. 1987  /  Notices
 previously unknown to the United
 States, or information received, in whole
 or in part after entry of this Consent
 Decree, that th« remedial action (if ROD
 it completed, insert "consistent with the
 Record of Decision**] is not protective of
 public health or the environment.)
   3. Nothing in this Consent Decree is
 intended as a release or covenant not to
 sue for any claim or cause of action.
 administrative or judicial, civil or
 criminal, past or future, in law or in
 equity, which the United States may
 have against any person, firm.
 corporation or other entity not a
 signatory to this Consent Decree.
   4. The United States and the Settling
 Defendants agree that the actions
 undertaken by the Settling Defendants
 in accordance with this Consent Decree
 do not constitute an admission of any
 liability by any Settling Defendant

 VIII. Contribution Protection
   Subject to the reservations of rights in
 Section VII. Paragraphs 1 and 2. of this
 Consent Decree, the United Ststes
 agrees that by entering into and carrying
 out the terms of the Consent Decree.
 each Settling Defendant will have
 resolved its liability to the United States
 for Covered Matters pursuant to section
 122(g)C1 of CERCLA. 42 U.S.C
 9622(g)(5). and shall not be liable for
 claims for contribution for Covered
 Matters.

 IX Public Comment
  This Consent Decree shall be subject
 to a thirty-day public comment period.
 The United States may withdraw its
 consent to this Consent Decree if
 comments received disclose facts or
 considerations which indicate that this
 Consent Decree is inappropriate.
 improper or inadequate.

 X Effective Date
  The effective date of this Consent
Decree shall be the date of entry by this
Court following public comment
 pursuant to Section IX of this Consent
 Decree.
The United States of America
Ef.
Settling Defendants)
  So ordered this.
                 .day of
United Stain Dia

Attachment J—Interim Model Section
12S)(4l
   U.S. EPA Docket No/_l
   Administrative Order on Consent
 /. Jurisdiction
   This Administrative Order on Consent
 ("Consent Order") is issued pursuant to
 the authority vested in the President of
 the United States by section 122(g)(4) of
 the Comprehensive  Environmental
 Response. Compensation, and Liability
 Act of i860, as amended by the
 Superfund Amendments and
 Raauthorization Act of 1986
 ("CERCLA1. Pub. L 99-499.42 US.C
 9622(gH4). to reach settlements in
 actions under section 108 or 10T*a) of
 CERCLA, 42 U.S.C. 9806 or 9807(a). The
 authority vested in the President has
 been delegated to the Administrator of
 the United  States Environmental
 Protection Agency ("EPA") by Executive
 Order 12580. 52 F*R 2923 {Jan. 28.1967)
 and further delegated to the Regional
 Administrators of the EPA by EPA
 Delegation No. 14-14-E 'Sept. 13.1987).
  This Administrative Order on Consent
 is  issued to [insert names or reference
 attached list of respondents"
 ("Respondents"). Each Respondent
 agrees to undertake ell actions required
 by the  terms and conditions of this
 Consent  Order. Each Respondent further
 consents to and will not contest EPA's
 jurisdiction to issue  this Consent Order
 or to implement or enforce its terms.
  [Note:  It may be necessary to include
 a Statement of Purpose  and/or a
 Definitions provision.]

 IL Stcttmtnt of Facts
  1. [In one or more paragraphs, insert
 site name, location,  description. NPL
 status and bnef statement of historical
 hazardous substance activity at the
 site.]
  2. Hazardous substances within the
 definition of section 101(14) of CERCLA.
42 U.S.C. 9801(14). have been or are
 threatened to be released mto the
 environment at or from the Site. [Note
 Additional information  about specific
 hazardous substances present on- or off-
 site may be included.)
  9. As a result of the release or
 threatened release of hazardous
 substances into the  environment. EPA
 has undertaken response action at the
 Site under section 104 of CERCLA. 42
 U.S.C. 9804. and will wulertake response
 action in the future. [Note: A brief
 recitation of the specific response action
 undertaken or planned for the site. ej..
 whether  an RI/FS and ROD have been
 completed, should be included.]
  4. In performing this response action.
 EPA has incurred and will continue to
 incur response costs at  or in connection
 with the Site. [Note The dollar amou
 of coats incurred as of a specific dau
 should be included.)
   S. [Identify each respondent and it:
 relationship to the site. If respondent
 are numerous, state generally that
 "Information currently known to EPA
 indicates that each Respondent listei
 Attachment ___ to this Consent
 Order, which is incorporated herein I
 reference, arranged for disposal or
 treatment, or arranged with a
 transporter for disposal or treatment.
 a hazardous substance owned or
 possessed by such Respondent at the
 Site, or accepted a hazardous subaur
 for transport ot the Site."]
   e. [In one or more paragraphs, pres<
 in summary fashion the factual basis
 EPA's determination in Section III be:
 that the respondents are dt minimi*
 parties, L*~  that the amount of
 hazardous substances contributed to
 site by each respondent and the toxic
 other hazardous effects of the
 substances contributed to the site by
 each respondent are  minimal in
 comparison to other hazardous
 substances at the site. The language v
 vary depending upon the criteria
 established for the particular scttlerm
 An example follows:
   Information currently known to EP.
 indicates that the amount of hazardoi.
 substances contributed to the Site by
 each Respondent does not exceed
       » of the hazardous substances
 the Site, and that  the toxic or other
 hazardous effects of the substances
 contributed by each Respondent to th
 Site do not contribute disproportion*!
 to the cumulative toxic or other
 hazardous effects of the hazardous
 substances at the Site. [Note: An
 attachment listing the volume and
 general nature of the hazardous
 substances contributed to the site by
 each respondent to the extent availab
 should be attached, and incorporated b
 reference. The total estimated volume
 hazardous substances at the site shoul
 be noted on the attachment]]
   7. b> evaluating the settlement
 embodied to this Consent Order. EPA
 has considered the potential costs of
 remediating contamination st or in
 connection with the Site taking into
 account possible cost overruns in
 completing the remedial action (If ROC
 is completed, insert "consistent with ti
 Record of Decision for this Site"), and
 possible future costs if the remedial
•action (if ROD is completed, insert
 "consistent with the Record of Decisio
 for this Site") is no protective of public
 health or the environment
   g. Piyments required to be made by
 each Respondent pursuant to this

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                  Federal  Register / Vol. 52. No. 218 / Thursday. November 12. 1987 / Notices
                                                                     43397
 Consent Order are a minor portion of
 the total response coats at the Site
 which EPA. baaed upon currently
 available information, estimates to be
 between S	and S	(Note:
 The dollar figure inserted should include
 the total response coats incurred to date
 as well  as the Agency's projection of the
 total response costs to be incurred
 dunng completion of the remedial action
 at the site.)
   9. EPA has identified persons other
 than the Respondents who owned or
 operated the Site, or who arranged for
 disposal or treatment or arranged with
 a transporter for disposal or treatment
 of a hazardous substance owned or
'possessed by such person at the Site, or
 who accepted a hazardous substance for
 transport to the Site. EPA has
 considered the nature of its case against
 these non-settling parties in evaluating
 the settlement emoodied in this Consent
 Order.

 ///. Determinations

   Based upon the Findings of Fact set
 forth above and on the administrative
 record for this Site. EPA has determined
 that:
   1. The (insert site name] sue is a
 "facility" as that term :s defined in
 section 101(9) of CERCLA. 42 U.S.C.
 9601(9).
   2. Each Respondent is a "person" as
 that term is defined in section 101(21) of
 CERCLA. 42 U.S.C. 9601(21).
   3. Each Respondent is s potentially
 responsible party within  :he meaning of
 section 107[a) and 122,'g)(l) of CERCLA.
 42 U.S.C.-9607(a) and 9B23lg)|l).
   4. The past present or future
 migration of hazardous substances from
 the Site  constitute an actual or
 threatened "release" as that term is
 defined  in section 101(22) of CERCLA. 42
 U.S.C 9601(22).
  'S. Prompt settlement with the
 Respondents is practicable and in the
 public interest within the meaning of
 section 122(*,)(1) of CERCLA. 42 U.S.C
   6. This Consent Order involves only a
 minor portion of the response costs at
 the Site with respect to each Respondent
 pursuant to section 122(g)(l) of CERCLA,
 42 US.C. 9622
-------
 43398           F«d«r«l Register  /  Vol.  51  No. 218  / Thunday. November 12. 1987 / Notice
 •rising out of response activities it the
 SJU-

 Reservation of Rights
   8. Nothini in this Conitnt Order is
 intended ro be nor shell it be construed
 •s s release or covenant not to tut for
 •ny claim or cause of action.
 administrative or judicial civil or
 criminal pait or future, at lew or in
 equity, which the United States.
 including EPA. may have against any of
 the Respondents for
   (a) Any liability as a result of failure
 to make the payments required by
 Section IV. Paragraph l. of this Consent
 Order or
   fb) Any matters not expressly
 included in Covered Matters, including.
 without limitation, any liability for
 damages to natural resources. [Note:
 This natural resource damage
 reservation muit be included unless the
 Federal natural resource trustee has
 agreed to s covenant not to sue pursuant
 to section 122(j)(2) of CERCLA. In
 accordance with section 122())CU of
 CERCLA. where the release or
 threatened release of any hazardous
 substance at the site may have resulted
 in damages to natural resources under
 the trusteeship of the United States,  the
 Region should notify the Federal natural
 resource trustee of the negotiations and
 encourage the trustee to participate in
 the negotiations.)
   10. Nothing in this Consent Order
 constitutes a covenant not to sue or to
 take action or otherwise limits the
 ability of the United States, including
•EPA. to seek or obtain further relief from
 any of the Respondents, and the
 covenant not to sue in Section IV.
 Paragraph 7. of this Consent Order is
 null and void, if:
   (a) Information not currently known to
 EPA is discovered which indicates that
 any Respondent contributed hazardous
 substances to the Site in such greater
 amount or of such greater toxic of other
 hazardous  effects that the Respondent
 ao longer qualifies as a dt minima party
 at the Site because [insert volume and
 toxicity criteria from Paragraph 7 of the
 Findings of Fact cj.. The Respondent
 contributed greater than _* of the
 hazardous  substances at the Site or
 contributed hazardous substances
 which contributed disproportionately to
 the cumulative toxic or other hazardous
 effects of the hazardous substances  at
 the SiteM]:
   [Note: Unless a premium payment is
 being made under Section IV. Paragraph
 1. which compensates EPA for the risk
 that the events noted in the reservations
 of rights in subparagraphs (b) and (c)
 may be accepted in lieu of one or both of
the reservations in subparagraphs (b)
and (c) below:
  (b) Costs incurred during the
completion of the remedial action (if
ROD is completed, insert "consistent
with the Record of Decision'] et the Site
exceed [insert dollar amount of cost
ceiling]: or
  (c) EPA determines, based upon
conditions at the Site, previously
unknown to EPA. or information
received, in whole or in part, after entry
of this Consent  Order, that the remedial
action (if ROD is completed, insert
"consistent with d»a Record  of
Decision"] is not protective of public
health or the environment
  11. Nothing to this Consent Order is
intended as a release or covenant not to
sue for any claim or cause of action.
administrative or judicial civil or
criminal, past or future, in law or in
equity, which the United States.
including EPA. may have against any
person, firm, corporation or other entity
not a signatory  to thii Consent Order.
  12. EPA and the Respondents agree
that the actions undertaken by the
Respondents in acordance with this
Consent Order do not constitute an
admission of any liability by any
Respondent. The Respondents do not
admit and retain the right to controvert
in any subsequent proceedings, other
than proceedings to implement or
enforce this Consent Order,  the validity
of the Findings of Fact or
Determinations contained in this
Consent Order.

Contribution Protection
  13. Subject to the reservation of rights
in Section IV. Paragraphs  9 and 10. of
this Consent Order. EPA agrees that by
entering into and carrying out the terms
of this Consent  Order, each Respondent
will have resolved its liability to die
United Slates for Covered Matters
pursuant to section 122(gM5) of CERCLA,
42 US.C. 9822{g)(3). and shall not be
liable for claims for contribution for
Covered Matters,

Parties Bound
  14. This Consent Order  shall apply to
and be binding  upon the Respondents
and their directors, officers,  employees,
agents, successors and assigns. Euch
signatory to this Consent Order
represents that  he or she is fully
authorized to enter into the terms and
conditions of this Consent Order and to
bind tegally the Respondent represented
by  him or her.
Public Comment
  IS. This Consent Order shall be
subject to a thirty-day public comment
period pursuant to section I22(i) of
CERCLA. 42 U.S.C M22(i). la
accordance with section 122(iH3)
CERCLA. 42 US.C. 9622(i)(3). EP/'
withdraw consent to this Consent
if comments received disclose fee
considerations which indicate tha
Consent Order is inappropriate.
improper or inadequate.

Attorney General Approval

  16. The Attorney General or his
designee has issued prior written
approval of the settlement embodi
this Consent Order in accordance
section 122(g)(4) of SARA. [Note:
Attorney General approval usual!*
be required for d» minima consen
orders because the total part and
projected response costs st  the sn
exceed SSOO.OOO. excluding mteres
the event that Attorney General
approval is not required, the order
should not include this Paragraph
should include the following es a
separate numbered paragraph in t'
Determinations section (Section II.
above: "The Regional Admintstrai
EPA. Region xx hti determined tr
total response costs incurred to d*
or in connection with the Site do n
exceed SSOO.OOO excluding interest
that based upon information cunt
known to EPA. total response cost
in connection with the Site ere not
anticipated to exceed SSOOOOO.
excluding interest in the future." I
this determination requires change
the model Findingi of Fact in Secti
above: specifically. Paragraph 3 of
Findings should not state that furth
response action will be undertaker
the future, and Paragraph 4 of the
Findings should not state that EPA
incur response costs in the future.]

Effective Date
  17. The effective date of this  Con-
Order shall be the date upon which
issues written notice to the Respon<
that the public comment period put
to Secton IV. Paragraph IS. of this
Consent Order has closed and  that
comments received, if any. do not
require modification of or EPA
withdrawal from this Consent Ord>

  It is so agreed and ordered:

(Respondents)]
By: [Name]  [Date]

VS. Environmental Protection  Age:
By. (Name)  [Date)

|m Dec. B7-2010? Filed 11-W-T: MS •

-------
5296
                                                                     OSWER  f  9834.10

Federal  Register / Vol. 53. No.  35  / Tuesday. February 23. 1986 /  Notices
  CfcageCounvy..
                                we ooo
                              2.000.000
  D*t*d: February 5.198*.
Uwreac* J. }«a«x.
Attittant Adminittfotor for Water.
|FR Doc. M-37?e Filed 2-22-M: fc4i am)
(FW.-JS30-*)

Supcrfund Program: Notice Latter*,
Negotiations and Information
Exchange

AOCNCV: En\ironmental Protection
Agency.
ACTION: Request for Public Comment.

SUMMARY: The Agency i* publishing the
"Interim Guidance on Notice Letters.
Negotiations, and Information
Exchange" today to inform the public
about these guidelines and to solicit
public comment. This guidance covers
the use of the section I22!e) special
notice procedures and other related
settlement authorities under section 122
of the Comprehensive Environmental
Response. Compensation, and Liability
Act of 1080 (CERCLA or Superfund) as
amended by the Superfund Amendments
and Reauthonzation Act of 1986 (SARA)
(hereinafter referred to as "CERCLA").
DATC Comments must be provided on or
before*April 25.1988.
AOOWISS: Comments should be
addressed to Kathy MacKinnon. U.S.
Environmental Protection Agency.
Office of Waste Programs Enforcement.
Guidance and Oversight Branch (WH-
527). 401 M Street. SW.. Washington. DC
20460.
post snirnm MPONMATION COHTACT.
Kathy MacKinnon. U.S. Environmental
Protection Agency. Office of Waste
Programs Enforcement. Guidance and
Oversight Branch (WH-S27). 401 M
Street. SW.. Washington. DC 20460 (=02)
475-erro.
«u»«njM»xTAsrv MPONMATIOK: The
guidance emphasizes the importance of
reaching voluntary settlements with
potentially responsible parties (PRPs)
and uses notice letters, negotiations, and
information exchange as mechanisms
for facilitating settlements. The guidance
establishes a process for issuing notice
letters to PRPs. including the use of the
special notice procedures under section
122(e) of CFRCLA. The guidance
                     establishes separate notification
                     processes for removal and remedial
                     actions.
                       The guidance also discusses the
                     Agency i general policy for exchanging
                     information with PRPs. including a
                     discussion about EPA's release of
                     information under section 122(e)(l)  of
                     CERCLA and EPA's authorities to
                     request information from PRPs under
                     sections I04(e) and 122(e)(3)(b) of
                     CERCLA and section 3007(a) of the
                     Resource Conservation and Recovery
                     Act (RCRA).
                       Finally, the guidance discusses
                     various aspects of the negotiation
                     process. This includes s discussion
                     about negotiation moratoriums that are
                     triggered by the use of the section 122(e)
                     special notice  procedures. This also
                     includes a  discussion about concluding
                     negotiations and managing negotiation
                     deadlines.
                       The Agency encourages public
                     comment and will reevaluate this
                     interim guidance in response to such
                     comments.
                       The interim guidance follows.
                       Date: Novtmber a. 1967.
                     ).W. MoCnw
                     Acting Attiitani Admintttrator for Solid
                     Want and E.-ntrgtncy Ktntponit.

                     INTERIM CLTDANCI ON NOTICE
                     LETTERS. NEGOTIATIONS. AND
                     INFORMATION EXCHANGE

                     Too/* of Conunu.
                     I. Introduction
                     II. Purpoee anrt Scop* of Guidance
                     til. Statutory Authority
                       A. Settlement*
                       B. Special Notice Procedure* and
                        Information Reteaie
                     IV. Information Excitant*
                       A. Information Request*
                       B. Information Rilctt*
                     V. Notice Utitn and Nesottation
                        Moratorium for Rl/FS and RD/RA
                       A- Purpoee of Notice Utters
                       B. General Notice L*tt*r
                        1. Whether to Issue General None*
                        2. Timing of General Notice
                        X Recipients of General Notice
                        4. Content* of General Notice
                     C. RI/FS and RD/RA Special None* Utter*
                        1.  Whether to Uau* Rl/FS *nd RD/RA
                        Special Nonce
                        1  Norifymt PRPi When Not Appropriate
                         to Issue Kt/FS and RD/RA Special
                         None*
                         S.  DOf Role in Rl/FS ami RD/RA
                        Negotiation*
                        4. Tinma of RI/FS Special Notice
                        S. Timing of RD/RA Special Nouce
                        s. Recipients of RI/FS and RD/RA
                        •Special Notice
                        1.  Contents of Rl/FS and RD/RA Special
                         Notice
                       0. Conclusion of Negotiation Moratorium
                         and Deadline Management for Rl/FS and
                         RD/RA-
VL Notice Utter* and Netotiation
    Moratonum for Ramoval Action*
  A. Nouce Utters
   1. Whether to U*ue Notice for Removal*
   r WbM to UM Special None*
   Procedure* for Removal*
   X Notifying PRP» When Not Appropnite
   To UtiiUe Special Notice Procedure* for
   Removal*
   4. DO | Role in Removal Negotiation*
   S. TUniAg of Notice for Removii*
   a. Recipient* of Notice for Remove!*
   7. Content* of Notice for Removal*
  B. Conclusion of Ncgotutioti Momtorium
   and Deadline Management for Removal*
  C Administrative  Orden and Negotiation
   Moratorium for Removal*
VTL Disclaimer
VU1. For Further Information
Appendix A, Timinf of RD/RA Special
    Notice Lti'tr Appendix B- PRP
    Settlemeni proem for Rl.'FS and RD.'RA
    Appendix C. Model Sotice Letter* (To b«
    *em to EPA region* at a later datel
Memorandum
SUBJECT: Intenm Guidance on Notice
    Utters. Nofotijuoru, and Information
    Exchange
FROM: j. Winston Porter. A**i*tin:
    AUminiitrator
TO: Refional Adir.iniitraton

I. Introduction

  The Superfund Amendments and
Reauthonzation Act of 1966 (SARA).
which amends the Comprehensive
Environmental Response.
Compensation, and Liability Act of 1980
(CERCLA). maintains the importance of
a strong Superfund enforcement
program.1 In particular. SARA
emphasizes the importance of entenng
into negotiations and reaching
settlements with potentially responsible
parties (PRPs) to allow PRPs to conduct
or finance response actions. SARA
generally codified the Agency's Interim
CERCLA Settlement Policy but also
established some new authorities and
procedures that were designed to
facilitate settlements,
  A fundamental goal of the CERCLA
enforcement program is to facilitate
voluntary settlements. EPA believes that
such settlements are most likely to occur
when EPA interacts frequently with
PRPs. Frequent interaction is important
because it provides the opportunity to
share information about a site and may
reduce delays in conducting response
actions caused by the lack of
communication. Important mechanisms
for promoting interaction aad facilitating
communication between EPA and PRPs
  1 CIUCLA *f 1**) •• iRHmded by SARA of iiea
i* rtlcrmj to >n ihn |uiOance u CKRCUV

-------
                   Ftdtrti RtyUter / VoL S3. No. 35 / Tuesday. February 23. 1868 / Notice*
                                                                        5299
 include issuing notict letter*, entering
 into negotiations, and exchanging
 information with PRPi.
   This guidance repla:es the October
 «Z. 1984 guidance on ' Procedures for
 If suing Notice Letten" and the October
 9.1965 guidance on 'Timely Initiation of
 Responsible Party Starches. Uauanca of
 Notice Latter*, and Releaie of
 Information." * Although cenatn
 procedures and the timing of various
 activities have been modified, this
 guidance retains many fundamental
 aapects of the October 12.1964 and
 October 9. IMS guidances. In particular.
 this guidance re-emphasizes the
 importance of timely issuance of notice
 letters and the exchange of information
 between EPA and  PRPs. In addition, this
 guidance incorporates s moratorium and
 "formal" period of negotiation {referred
 to as a negotiation moratorium) into the
 settlement process. EPA'5 commitment
 to carrying out these activities is crucial
 for supporting our fundamental goal of
 facilitating negotiated settlements.

 II. Purpose and Scope of Guidance
  The purpose of this guidanc: is to
assist the Regions in establishing
procedures for the  issuance of notice
tetters to PRPs. for the conduct of
negotiations between EPA and PRPs.
and for the exchange of information
between EPA and PRPs.
  This guidance addresses the use  of
both "general" and "special" notice
letters for removal and remedial  actions.
Special notice letters differ from  general
notice letters because special notices
trigger the negotiation moratorium. The
negotiation moratorium is the period of
 time where a moratorium is imposed on
certain EPA actions and a penod of
"formal" negotiations is established
between EPA and PRPs.
  Us* of both general and special notice
letter* are discretionary. However, the
Refiona art expected to issue general
and special notices for the vast majority
of remedial actions. Such notice  letters
will be isaued for remedial
investigations/feasibility studies (Rl/
 FSs) ind remedial designs/remedial
actions (RD/RAs). Although it is
generally appropriate to issue a
"removal notice" for all removal actions.
 the Regions are not expected to invoke
 the section 122(e) special notice
procedures for most removals.
  This guidance also addresses the
 timing, duration, and conclusion of the
 negotiation moratorium. Finally, this
guidance discusses the process of
information exchange between EPA and
PRPs. including requests for and
releases of site-specific information.

Ill Statutory Authority

A. Settlement*
  Sections 104-
ohaao* of tht rvtaen** ictmn. In o«rncul*r.
Con*j»M nomj ilui tU RJ/FS metal none* nood
net b* accamoanitd by infqnnaiion on velum* «nc
naiuf* of win* ino nntint if thu information u
not avatlablt it tht tun of lh< SJ.'FS. A Mpjraic
                                        this section provides for EPA to make
                                       «vch information available in advance
                                        of the special notice upon request by a
                                        PRP in accordance with procedures
                                        provided by EPA.
                                         Uauanca of a special notice triggers a
                                        moratorium on the commencement of
                                        certain actions by EPA under section
                                        104 or section 106. The purpose of the
                                        moratorium is to provide for a period of
                                        negotiation between EPA and PRPs. The
                                        moratorium prohibits EPA from
                                        commencing any response action under
                                        section 104(a). and an RI/FS under
                                        section 104.
                                        EPA is not prohibited from ur.cetSKir.s
                                        a response or enforcement action dunn;
                                        the negotiation period when there is a
                                        significant threat to public health or ihe
                                        environment.
                                         Section 122(a) provides that if EPA
                                        decides not to use  the special notice
                                        procedures established under section
                                        122(e). EPA is required to notify PRPs in
                                        writing  of this decision along with an
                                        explanation why it is inappropriate to
                                        use such procedures. The decision by
                                        EPA to use or not to use the special
                                        notice procedures is not subject :o
                                        judicial review.
                                        FV. Information E«gjmigt
                                         The exchange of information between
                                        EPA and PRPs is crucial for faplita'.:.-.g
                                        aettlements. Information exchange
                                        should be an ongoing process of
                                        communication. EPA uses infonr.atior
                                                        into
                                                             i i»i»ld be anituif
MUC* Mtf inJon
(or pnviw o*ru*i »he actual!}- coaduct th*
umtdul acuon aad ofonMiion on v*hM». n*>*rt
and nnkmf of WHIM should b* made •viuiolt
routnwly ai thu nm« So* th* Conl«f»ne« «.»pon r.n
th* Suovrfonc' Am*nom*«ii» »nd «*-.gifiont»nor
Act of ISM. • Cant- M SMI. (Upon *•-»*: Pf i»
tit**)

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                   F«dar*l Radiator / Vol.  53. No.  35 / Tuesday. February 23. IBM / Notices
 obtained from PRPi to determine
 potential liability, to dtttrmine the need
 for response, and to tupport the
 •election of the remedy. PRP* UM
 information obtained from EPA to
 organize among themielvei and to
 develop • "good faith offer" to conduct
 or finance retponae actions.

 A. Information foquesa
   EPA may request information from
 PRPi about vanout activities and
 condition! under section IM(e) of
 CERCLA and under section 3007(a) of
 the Resource Conservation and
 Recovery Act  (RCRA). In addition. EPA
 may iatu* administrative subpoenas
 under section  122(e)(3)(b) of CERCLA.
 Information commonly requested
 includes details concerning waste
 operations and waste management
 practices, the type and amount of
 substances contributed by each PRP.  as
 well as the name of other PRPi that
 contributed substances to  the site.
   Information requests should be issued
 as early as practicable and may be
 issued as a separate letter during the
 PRP search process, as pan of the
 general notice letter, or through an
 administrative subpoena. A detailed
 discussion about the use of information
eequest letters and administrative
lubpoenas is contained in  the
forthcoming "Guidance on Use and
 Enforcement of Information Requests
 and Administrative Subpoenas under
 CERCLA'sections 104(e) and 122(e)."
   The Regions have the discretion to
 decide whether to issue an information
 request as a separate letter during the
 PRP search or  as a component of a
general notice letter. Issuing a separate
 information request letter in advance of
 the general notice may be advantageous
 in situations where information from
 PRPs is needed to determine whether it
 is appropriate  to iaaut a notice letter  to
 such parties.
  . Information requests should be
 developed in accordance with the
 forthcoming guidance on information
 requests arid administrative subpoenas
 aa mentioned above. An information
 request should also indicate that EPA
 plans to vigorously enforca information
 requests with the new enforcement tools
 authonxed under SARA which include
 issuing orders under section 104(e)(5).
 Finally, the information request should
 Indicate that it is the PRP* responsibility
• to inform EPA whether information they
 provide to EPA is confidential and
 subject to protection under section
 104(e) of CERCLA.

 B. Information fUliott
   It is important to gather and  release
 lite-specific information to PRPi aa soon
as reasonably practicable. Gathering
and releasing such information early in
the process will not only expedite
response and enforcement activities but
will help PRPs organize and negotiate
among themselves as well.
  As indicated,  section 122(e)(l)
provide* for the release of certain
information to PRP* to the extent such
information is available. Such
information includes the names and
addresses of other PRP*. the volume and
nature of substances contributed by
each PRP. and a ranking by volume of
the substances at the facility. This
information is to be provided to PRPs in
edvance of the special notice in
accordance with procedures developed
by EPA.
  Congress recognized the limitations to
EPA's ability to  make certain
information available to PRPs.
especially early  in the response process.
Therefore, this information can be
released only to the extent such
information is available. If the Regions
have information on volume, the
Regions should develop volumetric
rankings and should make such
information available to PRPs a* soon
as practicable. However, due to their
preliminary and summary nature. EPA
will not expand  resources to explain or
defend any list or ranking. Lists or
ranking* released  to PRPs and others
should'alweys contain appropriate
disclaimer*.
  The Regions are encouraged to release
information to PRPs as soon as
reasonably possible. The Regions may
respond directly to individual PRP
requests for information, may use the
notice litters as vehicles to release such
information to PRPi. or may establish
alternative mechanisms in some
situations as discussed below. The
Regions are strongly encouraged to use
the notice letter* to release site-specific
information. In particular, uae of the
general notice may provide a convenient
opportunity to release information in
advance of the special notice pursuant
to the statutory  provision that EPA
release such information in advance of
the special notice  in accordance with
procedure* developed by EPA.
  Although it is generally-preferable to
release information to individual PRPs
through notice letters, alternative
ffty^IniMM may be used in unusual
circumstance*. For example, in
instance* where there are many PRP*
and/or where there it a substantial
amount of information to be released.
the Regions may consider making the
information available through a central
mechanism (e.g. through a PRP steering
committee if one has been formed and if
the committee has agreed to be a
clearinghouse for distributing
information to other PRP*). An
alternative would be to indicate in the
notice letter that the Region has site-
apecific information that will be made
available to the PRP* in a manner
specified in the letter.
V. Notice Utter* aad Negotiation
Moratorium for Rl/FS and RD/RA
  This guidance create* a systematic
proce** for issuing three separate notice
letters for remedial action*. The three
notice letters are (1) the general notice.
(2) the Rl/FS special notice, and (3) the
RD/RA special notice. Even though the
Rl/FS and RD/RA special notice letter*
are separate letters, the are discussed in
the same section below iince the
content of these letters is basically the
same. In instances when the content of
the Rl/FS and RD/RA special notices
differ, separate sections are presented.
  Also, this guidance is written with the
assumption that each notice letter will
be issued in sequence.  Consequently.
the guidance has been  structured so that
certain information provided or
requested in one letter is not repeated in
a subsequent letter. The content of
actual letters may. however, need to be
modified in situations where this
process is not followed.
  For example, there may be a situation
where site activities are already
underway and where the Region is
ready to issue the Rl/FS special notice
but has not issued a general notice. In
this instance, it would not be necessary
to wait to send the  special notice until
after a general notice is issued.
However, it may be appropriate to
include certain aspects of the general
notice into the special notice.

A. Purpott ofNotiet Lttun
  The purpose of the general notice is to
Inform PRP* of their potential liability
for future retpontc coau. to begin or
continue the procea* of information
exchange, and to initiate the process of
"informal" negotiation*. In  addition, the
general notice informs  PRPs about the
possible use of the  section 122(e) special
notice procedure* and  the subsequent
moratorium and "formal" negotiation
period.
  The purpose of the special notice is
similar to the general notice, except that
the special notice is also used to invoke
the statutory moratorium on certain EPA
actions and to initiate the process of
"formal" negotiation*.  Although the
general notice doe* not trigger a
moratorium on any EPA action and doe*
not invoke a "formal" period of
negotiation, the general notice is
expected to initiate a dialogue between

-------
                   Federal Remitter  /  Vol. S3. No.  35 / Tuesday.  Febniary 23.  IBM / Notices
                                                                        5301
 EPA and PRPi. Issuance of t general
 notice should be viewed as i
 mechanism for initiating negotiations
 whereas issuance of a special notice
 should be viewed as a mechanism for
 concluding negotiations.
  The term "informal" negotiations  does
 not mean that such negotiations are not
 senous efforts to reach a settlement.
 Rather "informal" negotiations refers to
 any negotiations that are not conducted
 as pan of the negotiation moratorium
 triggered by issuance of a special notice
 under section 122(a). The terms
 "informal" and "formal" negotiations
 are used to draw a distinction between
 negotiations  which are and are not
 covered by the section 122(e)
 moratorium.

 B. General Notice Letter
  Agency notification procedures should
 provide PRPi with sufficient time to
 organize and develop a reasonable offer
 to conduct or finance the response
 action. Toward this end. the Regions
 should contact PRPs prior to issuing a
 section 122(e) special notice by issuing a
general nonce letter.
 i. Whether To Issue Cenerai Notice
  A general notice letter should be
 issued at the  vast maiohty of sites that
are proposed (or or listed on the
National Priorities List (NPLI where
negotiations for the Rl/FS and RD/RA
have not yet been initialed.
Circumstances where it may not be
appropriate to issue the general notice
include sites where-•» notice pursuant to
previous guidance was issued prior to
the reauthonzation of CERCUA or where
the Region is  ready  to issue a special
notice at the site. These  exceptions are
important for minimizing any possible
disruption to  ongoing activities.

2. Timing of General Notice
  The general notice letter should be
sent to PRPs as early in the process as
possible, preferably once the site has
 been proposed for inclusion on the NPL
 Early receipt  of the general notice will
ensure that PRPs have adequate
 knowledge of their potential liability as
 well as a realistic opportunity to
 participate in settlement negotiations.
 When a separate information request
 letter has been sent to PRPs prior to the
 general notice,  the information request
 should be sent as early as possible to
 avoid any delay in issuing the genercl
 notice.
3. Recipients  of General Notice
  Cenerai notice letters should  be sent
 to all  parties  where there is sufficient
 evidence to make a preliminary
 detprmnation of potential liability
under section 107 of CERCLA. If there is
doubt about whether available
information suppons issuance of the
general notice, separate information
request letters may be sent to such
parties prior to issuing the notice. If a
Federal agency has been identified as a
generator at a facility not owned/
operated by the Federal agency, such
agency should be routinely notified like
other PRPs.
  If additional PRPs are identified after
the general notice but before the Rl/FS
special nouce is issued,  the Regions
should provide a general notice to those
additional PRPs. If additional PRPs are
identified after general and special
notices are issued, the additional PRPs
need not receive a general notice before
receiving the appropriate special notice.
However, relevant aspects of the
general notice should be incorporated
into the special notice.
  Copies of the general notice should be
provided to the Regional administrative
record coordinator, the appropriate
State representative, the State or
Federal trustee if a trustee for natural
resources has been designated,  and to
EPA headquarters at the same time
notices are sent to PRPs. The copies of
notices to headquarters  should be sent
to the Information Management Section
within the Program Management and
Support Office of the Office of Waste
Programs Enforcement (OWPE).
  Providing copies to the administrative
record coordinator is important for
eniunng that the notice  is  placed in the
administrative record.4 Providing copies
to the State representative and the State
or Federal trustee is important for
ensunng that States are appropriately
informed about possible future
negotiations.1 Providing copies  to
OWPE is essential far-permitting entry
into the Superfund Enforcement
Tracking System (SETS). Entry into sets
will facilitate our efforts to track site
activities and to respond to
Congressional and other inquiries. ___
Direct Regional input of data into SETS
on notice letter recipients  is planned for
FY19M.
  It ii not necessary- to provide  copies of
tech general notice'to the  administrative
record coordinator. State representative.
State or Federal trustee, or headquarters
in instances where identical notices are
provided to multiple PRPs. Where there
  • A di»eu»non iboul piecing none* Irtttn m ih«
•tfminMirauv* rtconl >• omrrd in tn« forthcoming
~Cu«Une» on me Adminitiraiiv* R«eord tot
Selecting» RttponM Acuon Undtr COtdA" and
10 in* pmrnbt* 10 IM fonnceminf mvnioM w iht
N«itnMl Coniinftney Pum.
  • $Ui» pcniciBoiion m rwtoixiiont u eev*«*d in
ih» loniteomtr.t "Inwnm Cu.
lUditOM in CCftC.* Enfoocnent"
are multiple PRPs at a site, a copy of one
general notice with a list of other parties
who have received the letter would
suffice.

4. Contents of Cenerai Notice

  The general notice letter should
contain the following components: (a) A
notification of potential liability for
response costs, (b) s discussion about
future notices and the possible future
use of special notice procedures, (c) a
geoersJ discussion about site response
acDvities. (d) a request for information
about the site (if appropriate), (e) the
release of certain site-specific
information (where available). (D a
discussion about the merits of forming a
PRP steering committee, (g) a notice
regarding the development of an
administrative record, and (hj a
deadline for response to the letter and
information on the EPA representative
to contact.
  a. Potential liability: The letter should
inform  parties that they are potentially
liable for response costs under section
107 of CERCLA. including the costs  of
conducting the Rl/FS and RO/RA. The
letter should define the scope of
potential liability and should briefly
explain why the panics have been
identified as PRPs.
  b. future notjce under section I22!al
and section 122(e>: The letter should
indicate that EPA will notify the party at
an appropriate point in the future. The
letter should specify that this notice will
either be a section 122(a) notice or a
section 122(e) special notice and should
explain what these notices are.
  The letter should indicate that the
section 122(a) notice is a notice which
informs parties that EPA will not use the
section 122(e) special notice procedures.
The letter should indicate that the-notice
will provide an explanation for the
decision  not to use the special nonce
procedures.
  The letter should also indicate that a
section 122(e) special notice will invoke
the negotiation moratorium. The letter
should make clear mm issuance of a
section 122{e) special notice letter is
discretionary and may be used if EPA
determines that use of such procedures
would  facilitate an agreement and
expedite remedial action. The letter
should also explain the purpose of the
special notice and the subsequent
negotiation moratorium. Informing PRPs
about the special nonce procedures and
the negotiation moratorium will alert
PRPs to possible future negotiations and
increase their awareness  of their
opportunities for participation in such
negotiations.

-------
5302
Federal  Register / Vol. 53,  No. 35  / Tuesday. Februiry 23. 19M / Notices
  & SHt response activities; The letter
 should generally dilcuii the activities
 EPA pleas to undertake it the site.
 Where appropriate, such activities
 should include scheduled stsrt or
 completion datei for the RI/TS or RD/
 RA. Instances where it may not. be
 appropriate to provide sun or
 completion dates include situations
 where the general notice is issued  very
 early in the process and where specific
 dates have not yet been set or where it
 is expected that target dates are Likely
 to change significantly.
  d. Information request The letter
 should request information on,
 substances sent to or present at the site
 and the names of other PRPs pursuant to
 section I04(e) of CERCLA and/or
 section 3007(a) of RCRA if a separate
 information request has not already
 been issued. The content of the
 information request should be consistent
 with the forthcoming "Guidance on Use
 and Enforcement of information
 Requests and Administrative Subpoenas
 Under CERCLA Sections 104(e) and
 I22Je)."
  e. Information release: At a minimum.
 the  letter should release the names and
 addresses of other PRPs who have
 received the general notice letter. In
 addition, to the extent such information
 is available, the letter should include the
 volume and nature of substances
 contributed by each PRP and a ranking
by volume  of the substances at the
facility if such information has not been
previously  released.
  f. PRP steering committee: The letter
 should request that the PRPs identify a.
 member of their orgamxation who  will
 represent their interests. In addition, the
 letter should recommend that PRPs form
 a steering committee to represent the
group's interests  in possible future
negotiations. The letter should indicate
 that establishing a  steering committee is
 Important for facilitating negotiations
with EPA.
  g. Administrative record: The letter
 should be used as a vehicle for
 informing PRPs of the. availability of an
 administrative record that will contain
 documents which form the basil for the
 Agency's decision on the selection of
 remedy. The letter should indicate that
 the  record  will be open to the public for
 inspection  and comment. The letter
 should also provide information
 regarding the opening of the record and
 where it will be located
  >h. PRP response and EPA contact; The
 letter should encourage PRPs to notify
 EPA by a specified date of their interest
 to participate in future negotiations. The
 letter should indicate that  PRPs may
 respond as a group through a steering
 committee  if one has been formed. The
                     letter should also provide a cut off date
                     far-voluntary compliance with
                     information requests (if a request for
                     information is contained in the general
                     notice). AA appropriate time frame for
                     the PRP response to an information
                     request is generally thirty days from
                     receipt of the letter. Finally, the letter
                     should provide the name, phone number.
                     and address of the EPA representative
                     to contact.

                     C. Rl/FS and RD/RA Special Notice
                     Letters
                      Prior ta EPA'i conduct of the RI/FS
                     and RD/RA. the Regions should either
                     issue the special notice to PRPs or
                     provide PRPs with an explanation why
                     it was  not appropriate to use the special
                     notice  procedures. Issuance of the
                     special notice triggers a moratorium on
                     EPA's  conduct of the Rl/FS and
                     remedial action. While the statute does
                     not impose a moratorium on EPA's
                     conduct of the remedial design, the
                     Agency will not generally conduct such
                     activities during the moratorium. The
                     purpose of the moratorium is to provide
                     for a formal penod of negotiation
                     between EPA and PRPs where-the PRPs
                     will be encouraged to conduct or finance
                     response activities.
                      The  negotiation more ton urn may last
                     a total of 90 days for the Rl/FS and 120
                     days for the RD/RA if EPA receives a
                     "good  faith offer" from PRPs within the
                     first 60 days of the moratorium. The
                     negotiation moratorium would conclude
                     after 80 days if the PRPs do not provide
                     EPA with • "good faith offer."
                      The  initial BO day moratorium begins
                     on the  date the PRPs receive the special
                     nonce  via certified mail. In instances
                     where  there is more than one PRP. and
                     PRPs are likely to receive the special
                     notice  on different days, the date the
                     moratorium begins should  be seven days
                     from the date the letters are mailed to
                     the PRPs. In either case, the special
                     notice  must make clear when the
                     negotiation moratorium begins and
                     ends.

                     1. Whether To Issue RI/FS and RD/RA
                     Special Notice
                      EPA has the discretion to use the
                     special notice procedures when EPA
                     determines that a period of negotiation
                     would facilitate an agreement with PRPs
                     and would expedite remedial actions.
                     The Agency believes entering into such
                     negotiations would generally facilitate
                     settlements and plans to utilize the RI/
                     FS and RD/RA special notice
                     procedures in the vast majority of case*.
                      Then an. however, some
                     circumstances where it would generally
                     not be appropriate to use such
                     procedures. Such circumstances include
(1) where past dealings with the PRPs
strongly indicate they are unlikely to
negotiate a settlement. (2) where EPA
believe* the PRPs have not been
negotiating in good faith. (3) where no
PRPs have been identified at the
conclusion of the PRP search. (4) where
PRPs tack the resources to conduct
response activities. (5) where there are
ongoing negotiations, or (6) where notice
letter* were already sent prior to the
reauthomation of CARCLA and ongoing
negotiations would not benefit by
issuance of a special notice.
  Special nonces mey be issued for
operable units of remedial actions. The
test for determining-whether to issue a
special notice for an operable unit ir
generally the same  as for full-scale
remedial actions. The general
expectation is that separate special
notices will be issued for each separate
operable unit as long at issuing the
notice would facilitate an agreement
and would expedite the remedial action.
However, special notices may also be
issued for only major operable units or
may cover a senes  of operable units if
appropriate under the crcumstances at
the site.
  For example, if several operable units
will be conducted at a site as relatively
separate and  distinct response actions.
it may be appropriate to consider using
separate special notices which would
trigger separate negotiation
moratoriums. If a series of operable
units will make up a remedial action it
may be appropriate to issue the special
notice to cover only the major operable
unitWor to cover several operable
units.
i. Notifying PRPs When Not Appropriate
To Issue RI/FS and RD/RA Special
Notice
  In instances where EPA decides it is
inappropriate to issue the special notice.
section 122(a) provides for EPA to notify
PRP» i& writing of that decision. The
notice must indicate the reasons why
the Region determined that issuing the
special notice and entering into "formal"
negotiations was not appropriate. The
notice should be provided to all PRPs
that have been identified to date as well
as to the Regional administrative record
coordinator far placement in the record.
Such notices should be provided as soon
at practicable. In instances where the
Rl/FS or RD/RA have not yet been
initiated, the notice should be sent prior
to the initiation of such activities if
possible.
  In addition, the section 122!a) notice
should be used as a vehicle for
informing PRPs that the Agency will
establish or has established an

-------
                   Federal Register /  Vol.  53.  No. 35  /  Tuesday. February 23. 1988 / Notices
                                                                                                                5303
 administrative record conuining
 technical document* supporting the
 Agency i derision on the selection of
 rtraedy. Tht notice should indicate that
 the record  it open for public inspection
 and comment and should specify where
 the record  will be or has been located.
 3. DO) Role in RI/FS and RO/RA
 Negotiations
   The Regions should notify the Chief of
 the Environmental Enforcement Section
 in the Department of Justice (DOf) prior
 to issuing special notice letters where
 settlement  by a consent decree is
 contemplated. A copy of this
 memorandum should also be provided
 to the Office of WasM Programs
 Enforcement and the Office of
 Enforcement and Compliance
 Monitoring in Headquarters.
  The memorandum to DO) should
 indicate  when the Region intends  to
 issue the special notice. Because most
 RI/FS negotiations involve consent
 orders, notice to DO) on the RI/FS is not
 ordinarily necessary. However, where a
 aite is in litigation or where settlement
 by consent decree is expected. DOJ
 should be notified at least 30 days prior
 to issuing the RI/FS special notice. In
 addition, where the resolution of the
 matter by an administrative order is
 expected to involve a compromise of
 past or future response costs and the
 total response costs will exceed
$500.000. DO) is to be notified. DOJ's
 rote will  be to review the compromise of
 the claim pursuant to section 122(h](i)
 but not to review  the administrative
 orderfor the RI/FS. For RD/RA
 negotiations, the notice should be  sent
 to OO| at least 60 days prior to issuing
 the RD/RA special notice. The
 memorandum should also  identify the
 EPA Regional representative DO)  should
 contact.
  in addition, the Regions should
 consult with the Chief of the
 Environmental Enforcement Section
 prior to sending a copy of any draft
 consent decree or any outline of a draft
 consent decree to PRPs. The Regions are
 encouraged to induce a draft consent
 decree with the RD/RA special notice or
 soon thereafter as discussed below.
4. Timing of RI/FS Special Notice
  It is important that PRPs receive the
 RI/FS special notice letter as toon as
 practicable. Of greater importance, the
 letter must  be senf sufficiently in
 advance of obligations for the RI/FS so
 that negotiations do not delay the
 initiation of the RI/FS by the Fund in the
 event the negotiations do not result in
 an agreement providing for the PRPs to
 conduct or  finance the RI/FS. Timely
 receipt of the special notice will have a
significant effect OR the FRPi ability for
meaningful participation in formal
negotiations.
  The RI/FS special notice letter should
be sent to PRPs no later than 90 days
prior to the scheduled date for initiating
the RI/FS. The scheduled date for
initiating the RI/FS refers to the date
funds will be obligated to commence
response activities. A minimum of 90
days is important for ensuring that the
negotiation' mortorium does not delay
initiation of the RI/FS in the event
negotiations do not result in a
settlement The time for service by mail
should be taken into account.

S. Timing of RD/RA Special Notice

  The timing of the RD/RA special
notice letter will have a significant
impact on both  the success of
negotiations and on EPA's ability to
move forward with implementing a
remedy without delay. As indicated
earlier, "formal" negotiations pursuant
to special notice are not the sole vehicle
for reaching settlements. "Informal"
negotiation* must occur throughout the
process and in advance of the special
notice. To assure that "formal"
negotiations are productive. EPA must
initiate PRP search and information
exchange activities as well as
"informal" negotiations as early as
possible.
  The primary purpose of the special
notice procedures is to facilitate
settlements through negotiation. A
primary concern in determining when to
issue an RD/RA special notice is
whether there is a likelihood that
meaningful negotiations can be
conducted at a given stage in the
process. Another concern is that, to the
extent practicable, the negotiations must
be scheduled to minimize any delay in
the remedial design and remedial action.
A Anal concern is that negotiations be
carried out in a way that does not
undermine or have the appearance of
undermining the public participation
process.
  This guidance establishes an
approach which identifies when the
Regions must generally issue the RD/RA
special notice letter. The Regions may.
however, adopt an alternative approach
tinder appropriate circumstances.
Appendix A contains illustrations of the
three approaches discussed below.'

  • Tta MM »*ned dntcwd in *t Wlowmt
ducuMM* tad Oluitni** u> Appmdut A nftttt
"b*»i CM*" ictHcm* vhtfr rtnow ivtpeni* «nd
tnforcMMtit lemnntt in tsptcttd lo bt urrwd
out without d*i*y. For titmpl*. tht (mbix cwMMflt
ptnod luti x dtyi *nd don not itkt ir.te •ceouni
  a. Gtmral Approach: Itsue tpeciol
notice wbtn rtiectt draft FS and
proposed p/c/J foffablic comment. The
Regions generally must issue the RD/RA
special notice when the draft feasibility
study (FS) and proposed plan ' are
released to the public for comment. As
shown in Appendix A. issuance of the
special notice with the release of the
draft FS and proposed plan triggers the
initial 00 day negotiation mortoniun.
The initial 60 day negotiation
moratorium begins at the start of the 30
day public comment penod and.  in
conjunction with the first 30 days of the
60 day extended negotiation
moratorium, is concurrent with the
Record of Decision (ROD) review and
approval process. The remaining 30 days
of the extended negotiation moratorium
is concurrent with the initial phases of
the  remedial design. EP.Vi ability to
sign the ROD is not affected by the
duration of the negotiation moratorium.
The ROD may be signed at any point
after the close of the public comment
penod and the preparation of the
responsiveness summary for the public.
  In most cases, commencing formal
negotiations at the same time that the
draft FS and proposed plan are released
will properly balance the considerations
stated earlier relating to EPA's ability to
conduct meaningful negotiations, to
minimize delay in implementing the RD/
RA. and to maintain the integrity of the
public participation process. Under this
approach, formal opportunity for PRP
involvement would begin at  an earty yet
concrete stage in the process. Early
participation may be especially -
advantageous ;n situations where PRPs
have not been-previously or
substantially involved in RI/FS
activities. In addition. PRPs and the
public would have knowledge  of the
possible range of alternatives through
the  draft FS and proposed plan prior to
"formal" negotiations. This information
is important for assisting the PRPs  in
developing a meaningful "good faith
offer" (or conducting or financing the
RD/RA.
  b. Alttmati\t Approach: Issue special
notict prior to reJeate ofdra1! FS cni>
prcpoitd plan for public comment.
Although the Regions generally will
issue  the RD/RA special nonce when
  • Tfc* prepottd pUn rtftn 10 '«« oub»c
t«nia»«iien donmtnt dtvwo^a »ur»u««< r. tht FS
•ftd tptoltet *nd ptov.dt» » brt! «i.«
•nltmd tlttnuiivt. A not etttnre
tht pfOVOMd H»n will b* cattniftte * i.
iortbciMum -C««d»nt« OB Ooeumtnutu Ottuwxu
•t Suotffvnd Sim" Ifiltfrta to •• n» *00

-------
 53*4
Fexhral  Register  / Vol. 53. No. 35  / Tuesday. February 23.  1988 / Noticei
 the drift FS and proposed plui are
 relcttcd to the public for comment, the
 Regions ire encouraged to isiue the
 special nonce earlier in the proce»i if
 tni« action would facilitate the prospects
 /or reaching a settlement. If a Region
 chooses to follow this approach, the
 Region ihould include with the special
 notice a summary or fact ahe«t of the
 alternative! EPA has screened and the
 alternatives the Agency la currently
 considering.'
  As  shown in Appendix A. the RD/RA
 special notice may be issued pnor to
 EPA's release of the draft FS and
 proposed plan. Issuance of the special
 notice triggers the initial BO day
 negotiation moratorium. The initial
 negotiation moratorium is concurrent
 with the review and release of the draft
 FS and proposed plan. The initial
 negotiation moratorium is completed
 prior  to the initiation of the public
 comment penod. The public comment
 period is concurrent with the Tint 30
 days  of the extended negotiation
 moratorium. The remaining 30 days of
 the extended negotiation moratorium is
 concurrent with the ROD review and
 approval process. The ROD could be
 signed and the negotiation moratorium
 could be concluded at about the same
 time.  EPA's ability to sign tht ROD is
not affected  by the negotiation
moratorium. The ROD may be signed at
any point after the close of the public
comment penod and the preparation of
 the responsiveness summary for the
 public.
  in many cases, providing special
notice at this early stage may be
 inappropriate because too much
uncertainty would exist about the
remedy to allow for meaningful
negotiations. However, under other
circumstances it may be appropriate to
issue  the special notice early in the
process, especially in situation* where
 than  is a relatively small group of PRPs,
 it ia clear what the remedy is'likely to
 be. end-the remedy ia not likely to be
 controversial
  Where circumstances permit issuance
 of the special notice at this early stage.
 an advantage to this approach is that
 the ROD review and approval process
 and the negotiation moratorium could be
 concluded at about the same time. This
            ummtrr or fact dMd *n tht
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-------
                    Federal  Rcy»t«r / Voi 53. No.  05 / Tuesday. February 23. 1968  / Notices
                                                                                                               5305
 Enforcement Tracking System (SETS).
 Entry into SETS will faoliiate oar efforts
 to trick site ecavtnes •««* to respond to
 Congressional and other inqtnnes. __
 Direc; 'n< gjonal input of dait into SETS
 on notice Utter recipient* is planned for
 FYiau.
    It is. not oaceasary to provide copies of
 each special notice to the administrative
 record coordinator. S:ate representative.
 State or Federal trustee, or headquarters
 in instances where identical notices are
 provided to multiple PRPs. Where there
-are multiple PRPs at a site, e copy of one
 special notice with • lisa of other paraes
 wa>o have received the letter would
 suffice.

 7.  Contents of RI/FS and RD/RA Special
 Notices
   The RI/FS antfRD-'RA special notice
 letters should contain the following
 components: (a] A notification of
 potential liability, [b) a  discussron about
 the special notice and subsequent
 negotiation moratorium, fc] a discussion
 about the response activities to be
 conducted, [d] e copy of e statement of
 work or workplan and a drift
 administrative order on consent for the
 RI/FS. (e) e copy of a draft consent
 decree for the RD/RA (if possible?, [f) a
 discussion a bo at whet constitutes a
 "good faith offer" for the RI/FS.  (g) a
 discussion about what constitutes a
 "good faith offer" for the RD/RA. (h) e
 release of certain site-specific
 infonr.aupn (where available and
 appropriate!, (i) a demand for payment
 of  EPA costs incurred to date, (jj a
 notification about the administrative
 record, and (k) a deadline for response
 to  the letter and the name of the EPA
 representative to contact.
  a. Potential liability: The letter should
 specify that PRPs. are potentially liable
 for the costs of conducting the RI/FS or
 the RD/RA. A detailed discussion about
 potential liability is not necessary
 particularly if th* RI/FS or RD/RS
 special notice reference* the general
 notice.
 -  b. Special notice and formal
 negotiations: The latter should discuss
 the purpose- of the special notice and the
 subsequent negotiation moratorium. The
 level of detail will depend upon  whether
 the PRP has received the general notice
 and whether the general notice provided
 an adequate discussion. At a minimum.
 the letter should make clear that EPA is
 inviting PRPs to participate in "formal"
 negotiations for PRP conduct of  the RI/
 FSor RD/RA and that this letter
 automatically triggers the formal
 negotiation period, in addition, it is
 important that the special notice
 indicate the date the negotiation
 moratorium will conclude in the absence
of and in the event of e "good faith
offer." Finally, the letter should explain
thai a consent order or consem decree
should be finalized by the end of the
mowomun.
  c. Response actions ta be conducted:
The letter should identify the response
activities EPA piana to conduct at the
site and provide schedubd dates for
initiating, inch actmtres 3 appropriate.
  d. Statement ef work or woekpiaa and
draft adminrstrmire order on consent
for rtt/FS special notice: The- letter
showid provide a statement of work or
workplen and draft administrative order
(AO) on consent Such information ts
crucial to PRPs in their development of a
"good faith offer" to EPA  for conducting
or financing the RI/FS and for ultimately
facilitating settlements. The Regions are
encouraged to provide the draf: AO on
consent with the notice letter if
practicable. At a minimum, the letter
should contain a copy of the statement
of work with the expectation that the
draft AO will follow as soon as
practicable.
  e. Draft consent decree  for RD/fLA
special nouce: The letter should contain
a copy of the draft consent decree if
possible, it is important that PRPs have
the draft consem decree at the tan of
negotiations or soon thereafter since the
decree contains important information
which will -assist PRPs in  developing
their "good faith offer" to  EPA
  f. ~Goodfajtb offer" for RI/FS: The
letter should indicate that a "good faith
offer" is a written proposal which
demonstrates the PRP's qualifications
and willingness to conduet or finance
the RI/FS. A "good faith offer" for the
RJ/FS should include the  following:
  • A statement of the PRPs willingness
to condut or finance the RJ/FS which is
generally consisted with  EPA's
statement of work or work plan and
draft administrative order on consent  or
provides" a sufficient basis for further
negotiations:
  • A pangraph>by-paragraph response
to EPA's statement of work or workplan
and draf: administraave order on
consent
  • A detailed statement  of work or
workplan identifying how the PRPs plan
to proceed with the work:
  • A demonstration of the PRPs
technical capability to undertake the-RI/
FS. This should-include a  requirement
that PRPs identify the firm they expect
will conduct the work or than PRPs
identify the process they will undertake
to select a firm:
  • A demonstration of the PRPi
financial capability to finance the RI/FS:
  • A statement of the PRPs  willingness
to reimburse EPA for the  costs EPA
incurs in overseeing the PRP conduct of
the RI/FS as required by section
I04(a)(nand
  • The name, address, end phone
number of the parry or steering
committee who will represent the PRP*
in negotiation*.
  g. "Goodfaith offer'for RD/R.\: The
letter should indicate tfcet a "good faith
offer" is a written proposal which
demonstrate* the PRP* qualifications
and willingness to conduct or finance
the RD/RA A "good faith offer" for the
RD/RA should include the following:
  * A statement of the PRPs wiltmgness.
to conduct or finance me RD/RA which
is generally consistent with EPA's
proposed plan or which provides a
sufficient basis for further negotianons
in light of EPA's proposed plan:
  • A paragraph-by-paragnph response
to EPA's draft consent decree, including
a response ta other documents that may
have been attached to the decree such
as a technical scope of work for the
proposed plan or access or
preauthonzation agreements:
  • A detailed "statement of work"  or
"workplan" identifying, how PRPs plan
to proceed with the work:
  • A demonstration of the PRPs
technical capability to undertake lie
RD/RA. This should include a
requirement that PRPs identify the firm
they expect will conduct the work or
that PRPs identify the process they will
undertake 10 select a  firm:
  • A demonstration of the PRPs
capability to finance the RD/RA.
  • A sta tement of ihe PRPs willingness
to reimburse E?A for past response and
oversight costs:
  • A discussion about the PRPs
position on releases from liability and
reopeners to liability, and
  • Tha name, address, and phone
number of the party or steering
committee who will represent the- PRPs
in negotiations.
  b. Information release; 1o the extent
such information is available and to die
extant such information has not been
previously released the letter should
contain information on the names and
addresses of other PRPs, the volume and
nature of substances contributed by
each PRP. and a ranking by volume of
the substances at the facility. Note that
the release of information with the Rl/
FSand RD/RA special notices is not
Intended to require the release of
information previously provided  to
PRPs.
  L Demand for payment; The letter
should include a demand that PRPs
reimburse EPA for the costs the Agency
has incurred in conducting response
activities at the site pursuant to section
     ). The letter should identify ?he

-------
5306
Ftdtrtl  Register / Vol. 53. No.  35 / Tuesday. February 23, 1986 /  Notices
 action EPA undertook tnd lh« co»! of
 conducting the action. Tilt Ittter should
 •l«o indicate that tha Agency
 anticipates expending additional fund*
 on activittei covertd by this notice and
 other ipecified future activities. Finally.
 tha letter should demand payment of
 interest for past and future response
 costs incurred by EPA pursuant to
 section 107(»). Notice letters should not
 be delayed to obtain cost information
 where such information has not been
 previously collected.
   j. Administrative record: The letter
 should be used as a vehicle for
 informing PRPs of the availability of an
 administrative record containing
 documents that form the basis for the
 Agency's-decision on the selection of
 remedy. The letter should indicate that
 the record is open to the public for
 inspection and comment. The letter
 should u!*o indicate where the record
 will be or has been located.
   k. PRP response and EPA contact
 person: The letter should encourage
 PRPs to notify EPA of their interest to
 participate in negotiations. The letter
 shouid indicate that PRPs may respond
 as a group through a steering committee
 if a committee has been  formed. In
 addition, the letter should provide the
 name, phone number, and address nf the
 EPA representative  to contact.
 D. Conclusion of Negotiation
 Moratorium and Deadline Management
for Rl/FS and RD/R.4
  At the conclusion of the section 122(e)
 negotiation moratorium, the Regions
 should have a fully negotiated
 administrative order on  consent for thn
 Rl/FS anil a fully negotiated consent
 decree fur the RD/RA which has been
 signed b> the PRPs. A signed document
 is  necessary to show that an agreement
 has. in fcut. been reached.*
   At the conclusion of the 120 day
 moratorium for the RD/RA a
 determination rriust be made on whether
 to continue settlement activities.
 whether the site should  be cleaned up
 using Superfund money, or whether to
 initiate a section 106 enforcement
 action. A continuation of settlement
 activities may include seeking an
 extension to the 120 day negotiation
 moratorium as discussed below, or
 sending a consent decree to the
 Department of (ustice for lodging in the
 appropriate district court.
  •Prt-SAftA tuiddnct furdniriins an
 •dminttinnvf otter it »m»Kkd ta -Sufwrfund
 Aiimnitifinvt Order WwUfcop MM! GvrtMtu
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                     Wweilvt
This could mean that the focus of
negotiations could change significantly.
requiring, additional time to reach
agreement with PRPs.
  The second example applies to Fund-
lead sites, it may be appropriate for the-
Regional Administrator or the Assistant
Administrator to extend the 120 day
negotiation moratorium for the RD/RA if
non-enforcement activities at the site
(e.g. an extended public comment penod
or an extended ROD review and
approval process) cause a significant
delay in the Agency's ability to move
forward in implementing a fund-
financed remedy. An extension to the
negotiation moratorium may be
especially appropriate if there is reason
to believe a negotiated settlement is
imminent. In other words, if the  Fund is
not ready to move forward in
implementing the remedy at the end of
the 120 day negotiation moratorium
there is no reason to conclude
negotiations if there is reason to believe
an agreement can be reached.
  The third example applies to
enforcemeni-lead sues. It may be
appropriate for  the Regional
Administrator or the Assistant
Administrator to extend the 120 aay
negotiation moratorium for the RD/RA.
after a section 106 litigation referral has
been prepared and referred to the
Department of Justice (DO)) for action.
In fact, the preparation and referral of a
case to DOJ may be an important
mechanism for providing the necessary
impetus for reaching a voluntary
settlement In many cases it muy In-
appropriate to issue a unilateral
administrative order concurrent wuh thr
referral
VI. Notice Letters and Negotiation
Moratorium for Removal Actions

  The notice letter process for removal
actions differs from the notification
process for remedial action. As
discussed above, the notification
process for remedial actions involves
issuance of throe notice letters. The
notification process for removals will
involve only one notice letter which may-
or may not invoke the section 1221 e)
special notice procedures as discussed.
below.

A. Afoft'c* Letter*

1. Whether To Issue Notice for
Removals

  The Regions should attempt to contact
PRPs prior to initiating a Fund-finaneed
removal action to inform PRPs of their
potential liability where EPA will incur
response costs  or to secure s private
party response. This guidance

-------
                   Federal  Regular / Vol. 53. No. 35  / Tueidiy. February 23. 1968 / No lice*
                                                                                                              5307
 encourages the Region* to seeTc PRP
 response through a writtea notice letter
 but the Region* mty contact PRPs
 verbefly (with a wntten follow-up
 notice). This it conns tent with the
 guidance on "Inotnce of Administrative
 Orders for Immediate Removal Actions'*
 (2/21/WJ.
  The Region* should issue notice
 letters to readily identifiable PRPs for
 removal actions tn the vast maionty of
 cases. The content of the notice will
 vary depending whether the notice will
 be used simply to notify PRPs oi their
 potential liability for an action EPA has
 already tsrfcen or is about to take.
 whether the notice will be used to
 encourage a pnvete parry response
 through "informal" negotiations (i.e.
 negotiation* not triggered by the section
 122(ef special notice procedures), or
 whether the notice will be  used as a
 mechanism for invoking the section
 122(e> special nonce procedcres which
 provide for "formal" negouanor.s
 between EPA and PRPs.

Z When to Use Special Notice
 Procedure* lor Removals
  The Regions should consider uimg the
section 122(ei special notice procedure*
only for those removals where the threat
is of a nature that is not necessary to
initiate an onsite removal action for at
least six months. The "six month
planning time pence" begins once a sita>
•valuation is completed. This means
that for the vast majority of removaJ
actions the Regions will not be required
to utilize the special notice procedures.
It is nof appropriate to utilize special
notices for most removal actions
because the subsequent moratorium
may interfere with the Agency's ability
to implement the remedy in a timely
manner. In addition, il may not be worth
expending the time and resources to
enter into formal negotiations when a
removal will be a relatively short tena
and inexpensive moons* action.
  The Regions should include the
following factor* in their determination
of whether it is appropriate to utilise the
special notice procedure* for removals
with a six month planning lead timer fl)
Whether viable PRPs have been
identified (2} whether the PRPs art
expected to respond favorably to the
invitation to participate in negotiations
and to conduct or finance the removal
action. (3) whether issuance of the
special notice could delay
implementation of the removal action.
and (4) whether it may be more
appropriate to enter into "informal"
negotiations in lieu of "formal"
negotiations under section I22(el.
  In determining the PRPs  viability, the
Region should  inquire  about the PRPs
financial and technical capability for
conducting and/or financing the
removal action in an effective and
timely manner. In determining toe PRPs
willingness to undertake or finance the
removal action, the Region, should, at a
minimum, obtain a verbal agreement
from the PRPs pnor to issuance of the
special notice. In. determining, whether
the special notice may delay
implementation of the remedy or m
determining: whether to enter into
"informer rather than "formal"
negotiation*, the  Regions should
consider whether the  section 1221*}
negotiation moratorium would, tattrfar*
with other activities ai the site.
3. Notifying PRPs When Not Appropriate
To Utilize Special Notice Procedures for
Removals
  EPA's decision on whether to use  the
special notice procedures (or any
response achon is. clearly discretionary-
However, section 122{a) requires the
Agency to notify  PRPs in writing when
the Agency decides not to utilize such
procedures. The removal notice provides
a convenient vehicle for informing PRPs
of EPA'i decision nor re urilfze the
special nonce procedures. The notice
should, therefore, inform PRPs of EPA's
decision not to utilize such procedures
when this deieimmetron has been made
and should provide an explanation for
that decision.
4. DO) Role in Removal Negotiations
  The Regions should consult with the
Chief of the Environmental Enforcement
Section of DO] prior to"issuing a special
notice letter [or removal actions where
settlement by consent decree is
contemplated, or where the settlement is
expected to involve a compromise of
past or future-response costs and the
total response costs win exceed
S500.000. The Regions should consult
with DOJ pnor to releasing a draft
consent decree to PRPs.
8. Timing of Notice for Removals
  A removal notice that does net invoke
the special nonce procedures shomld be
provided to PRPs as soon as practicable.
For removal notices that invoke the
special notice procedures, the notice
should be issued as early as possible but
no later than 120 days before the
scheduled date for initiating the removal
action. The scheduled date for initiating
the removal action is  the date removal
extramural cleanup contractor funds
will be obligated and  onsite  cleanup will
begin.
  The timing of a notice which invokes
the special notice procedures is critical
because issuance of the notice triggers
the subsequent 60 to 120 day
moratorium OB EPA'conduct of the
removal action. (The moratorium would
last only 60 days in instance* where the
PRPs do not provide EPA with » "good
faith offer"). Issuing the special notice at
least 128 days before EPA will begin the
removal ensures that the, subsequent 120
day moratorium does not affect EPA s
ability to implement the removal action
in the event negotiations do not result in
an afreeaeai for PRP cottduci of the
removal action.

fl. Recipients of Notice for Removals

  The removal notice should be seat to
all parties where- there is sufficient
evidence to make a preliminary
determiaaUoft of potential natality
under section 107 of CERCLA, If a
Federal agency has been identified  as a
generator at • facility not owned/
operated by the Federal agency, sunn
agency should be routinely notified  like
other PRPs.
  Copies of removal notices should be
provided to the Regional administrative
record coordinator, the appropriate
State representative, md to
headquarter*. Providing copies to the
administrative record coordinator is
important  forensurmg that the nonce be
placed in the record. Providing copies fo
the State representative is important for  .
ensuring that  States are appropriately
informed about possible future
negotiations.
  Providing copies to the Information
Management Section within the Progrem
Management and Support Office of  the
Office of Waste Programs Enforcement
for entry into  the Superfund     ^^
Enforcement Tracking System (SETS I
Copies should be sent to OWPE nt the
same time they are sent to PRPs.
Providing copies to OWPE is esser.tui
for facilitating our efforts to track sue
activities and to respond to
Congressional and other inquiries.
  It is not necessary to provide copies of
each removcl notice to the
admiaistratfve record coordinator. State
representative, State or Federal trustee.
or headquarters- in instances where
identical notices an provided 10
multiple PRPs. Where there are tr.ulr.ple
PRPs at a sits, a copy of one removal
notice- with e  list of other parties who
have received the letter would suffice.

7. Contents of Notice for Removals

  As indicated the content of the
removal notice will vary depending
upon whether the purpose of the letter is
to simply inform PRPs of their potential
liability or whether the letter will also
be used to provide an opportunity for
PRP involvement in negotiations either
through "informal" or "forma!"

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 5308
Federal  Register / Vol. S3. No. 35 / Tuesday. February  23. 1988 / Notices
 negotiation*. The following highlights
 the components that should be included
 in the three different types of removal
 notices. The specific content of each
 component of the removal notice should
 be essentially the same as described
 earlier for Rl/FS and RD/RA general
 and special notices, except where
 otherwise specified.
  a. Notice of potential liability: If the
 purpose of the removal notice is simply
 to inform PRPs of their potential liability
 and to provide notice that the Agency
 has or is ubout to take • response
 action, the notice should contain the
 following components: a notice of
 potential liability: a discussion about
 site response activities that have been
 or will 6« conducted at the sue: a notice
 on the svailability of an administrative
 record: and a notice pursuant to section
 122U) that  the special notice procedures
 will not be used.
  The notification under section 122U1
 should inform PRPs that the Agency will
 not (or did  not) use the section !Z2(e)
 special notice procedures for this
 particular response action and should
 provide an explanation for that decision.
The letter should indicate that it is  the
Agency's policy not to use the special
nonce procedures for removals uniess
there  is a six month planning lead time
prior-to the initiation of the response
action. If the response action does
involve a removal with a six month
planning lead time but the Agency made
a case-specific determination  not to use
the special notice procedures, the letter
should provide an explanation why the
use of such procedures was determined
to be  inappropriate for that particular
response action.
  b. Notire of potential liability and
opportunity to enter into "informal"
negotiations: If the purpose of the
removal notice is to inform PRPs of their
potential liability and to provide PRPs
with an opportunity to enter into
negotiations with EPA without invoking
 the section 122(e) special notice
procedures, the notice should contain
 the following components: a notice of
 potential liability; a discussion about
 site response activities that will be
 conducted at  the site: a copy of the
 statement of work or workplan and draft
 administrative order on consent: a
notification pursuant to section I22(a)
 that the special notice procedures will
                     not be used: a request that PRPs notify
                     EPA within a specified period of time of
                     their interest to participate in
                     negotiations: a notice on the availability
                     of the administrative record: and
                     information on the EPA representative
                     to contact. The section 122|a)
                     notification should contain the same
                     information discussed IB the preceding
                     paragraph.
                       c. Notice of potential liability and
                     opportunity to enter into "formal"
                     negotiations pursuant to section 1221 e)
                     special notice procedures: If the purpose
                     of the removal nonce is to inform PRPs
                     of their potential liability and to provide
                     PRPs with an opportunity to enter into
                     negotiations with EPA using the section
                     122Je) special notice procedures, the
                     notice should contain the following
                     components: a nonce of potential
                     liability: a discussion about site
                     response activities that will be
                     conducted at the site: a discussion about
                     the special notice procedures and the
                     negotiation moratorium: a copy of the
                     statement  of work or workplan  and draft
                     administrative order on consent: a
                     discussion about what constitutes a
                     "good faith offer": a request that PRPs
                     notify EPA within a specified penod of
                     time indicating their interest to
                     participate in negotiations: a notice on
                     the availability of the administrative
                     record:  and information on the EPA
                     representative to contact. The "good
                     faith offer" should contain essentially
                     the same components as described
                     above for the RD/RA.
                     B. Conclusion of Negotiation
                     Moratorium and Deadline Management
                     for Removals
                       At the conclusion of the section 122(e)
                     negotiation moratorium for removal
                     actions, the Regions should have a fully
                     negotiated administrative order on
                     consent which has been signed  by the
                     PRPs. (Where appropriate, a signed
                     consent decree should be provided). A
                     signed administrative order on consent
                     (or a consent decree) will show that the
                     negotiations have been successfully
                     completed.
                       The expectation is that the
                     negotiations will be concluded at the
                     end of the 120 day moratorium and the
                     Regions are strongly encouraged to
                     conclude the negotiations within this
                     period of Ume. In instances where the
negotiations do not result in an
agreement, the Regions may seek an
extension to the 120 day moratorium.
issue an administrative order, or
proceed with a Fund-financed removal.
Note that the Regional Administrator
may grant an extension to the 120 day
moratorium only in limited and
appropriate circumstance*.

C. Administrative Orders and
Negotiation Moratorium for Removal*

  In most instances, use of the special
notice procedures for removal actions
will not affect existing policy on issuing
administrative orders for removals since
the special notice procedures will be
issued for only a small portion of
removals. For details on the Agency's
policy on administrative orders refer to
the guidance  on "Issuance of
Administrative Orders for Immediate
Removals" (2/21/84).

  It is necessary, however, to modify
existing policy in one respect. In
instance) where Regions use the special
notice procedures for a removal action
and where issuance of an administrative
order is necessary and appropr.atc. the
Regions should not issue the order until
the end of the negotiation moratorium.
This ensures  that the negotiation
moratorium will be used to negotiate
voluntary settlements.

VII. Disclaimer

  The policies and procedures
established in this document are
intended solely for the guidance of
Government personnel. They are  not
intended and can not be relied upon to
create any rights, substantive or
procedural, enforceable by any party in
litigation with the United States. The
Agency reserves the nght to act at
variance with these policies and
procedure! and to change them at any
time without public notice.

vm. For Further Information

  For further information or questions
concerning this guidance, pleas: contact
Kathy MacKinnon in the Office of
Waste Programs Enforcement at FTS-
475-6770.

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A. General Approach: Issue RD / RA Special Notice  When Release   |
   Draft  FS and Proposed  Plan                                        i
I	
o
                        Selection of Remedy Process

Conduct
RlffS

Review/
Release
FS/Pioposed
Plan
PiiWiC
Com
menl


Review
MOD

'
Conduct >
RD \
(
Node* and
NeocXUIIon
Moratorium
Extended
Negollallon
Moiatofiuni
                      Special Notice / Negotiation Moratorium
18    19    20    21    22   23   24    25

                  Timeline (Months)
26
27    28
                                                              I
                                                              i
                                                              8
                                                              I
29
                                                                           •n
                                                                           9
                                                                           K
f
•
?

K
i
o
I
                                                                           §

-------
                                                                                              OSWER  *   9834.9
                     Federal Register  / Vol.  53. No. 49 / Monday. March  14. 19M  /  Notice*	
 Office location and ttlephotw number.
   Rm. 716. Crystal Mil) *2,1921
   Jefferson Davit Highway. Arlington.
   VA. (703-557-18081.
 tU^tf MIXTAHV MtPOKMATION: Pursuant
 to »ecnon 18 of the Federal Insecticide.
 Fungicide, and Kodenticide Act (F1FRA)
 (7 U.S.C. I36p). th« Administrator may.
 at hn discretion, exempt a state agency
 from any proviaioni of FIFRA if he
 determines that emergency condition!
 exist which require such exemption.
   The Applicant hat requeued the
 Administrator to utue  a specific
 exemption to permit the ute of an
 unregistered  herbicide. ( — )-2-|4.5-
 dihydro-4-meihyl-4-(lmethylethyl)-5-
 oxo-l/y-imidazol-2-yl)-5-efhyl-3-
 pyndinecarboxylic acid (CAS 81335-77-
 51. manufactured at Pursuit ™. by
 American Cyanarnid Company, on
 soybeans ir. Minnesota. Information in
 accordance with -JO CFR Par: 166 was
 submitted as part of this request.
  The Applicant indicated that
 Jerusalem artichoke poses « serious
 threat to the Minnesota soybean
 industry due  to resultant reductions in
 yields. This weed, if not controlled
 produces numerous tubers which lie
 dormant over winter and produce plants
 the following spring. Only two
 uvbicides (Paraquat and'Roundup) are
 swelled for control of Jerusalem
 artichokes in Minnesota soybeans.
 according to the Applicant. Neither  of
 these herbicides are satisfactory.
 according to the Applicant, due to
 required delays m planting or ineffective
 application techniques.
  The Applicant indicates thai without
adequate control a 30 percent yield  los*
 for soybeans  due to this weed wili
 result. This would amount to
 approximately 1.4 million dollars.
 Producers are reporting that infestations
are increasing, and weed scientists  are
concerned that the week will become
more widespread in the absence of
 effective control measures.
  Pursuit ™ will be applied by ground
 postemergence to the crop at a rate  of
 0.06 pound active ingredient ptr acre.
  This nonce does not constitute a
 decision by EPA on the application
 itself. The regulations governing section
 18 require publication of receipt of an
 application for a specific exemption
 proposing use of a new chemical (i.e.. an
active ingredient not contained in-any
currently registered  pesticide). Such
notice provides for the opportunity for
public comment on the application.
  Accordingly, interested persons may
submit wntten views on this subject to
the Program Management and Support
Division at  the address  above. The
•mments must be received on or before
March a. 1968 and should bear the
identifying notation "OPP-180764  ." All
whiten comments filed pursuant to this
notice will be available for public
inspection m Rm. 236. Crystal Mall No.
2. at the addrest given above, from 8
a.m. to 4 p.m.. Monday through Fnday.
except legal holidays.
  The Agency, accordingly, will review
and contider all commenti received
during the comment penod in
determining whether to issue the
emergency exemption requested by the
Minnesota Department of Agriculture.
  Dated: February 28. IBM.
Edwia F. Tteworth.
Director. Ref ittrotion Qwiion. Office of
Petticidt Programt.
|FR Doc. M-M76 Filed J-11-W: 8:45 am|
IFRU-333S-5]

Superfund Program; Mixed Funding
Settlements

AOINCY: Environmental Protection
Agency.
ACTION: Request for public comment.

SUMMARY: The Agency is publishing the
guidance on "Evaluating Mixed Funding
Settlements under CERCLA" today to
inform the public and to solicit comment
on these types of settlements. Mixed
funding, at described, in part, under
section 122(b) of the Comprehensive
Environmental Response.
Compensation, and Liability Act of 1980.
as amended by the Superfund
Amendments and Reauthorization Act
of 1966 (SARA) (hereinafter referred to a
"CERCLA") refers to three types of
arrangements in which money from
potentially responsible parties (PRPs)
and the Hazardous Substances
Superfund ("the Fund") is  used to
conduct a response action. This
guidance first descr.be* a  process for
determining whether a settlement
Involving mixed funding in any form is
appropriate. It then describes issues
related to each of the three types of
mixed funding individually. as well as
the procedure required for approval of
mixed funding settlements.
OATC Comments must be provided on or
beforrMay 13.1988.
AOOftSftS: Comments should be
addressed to Kathy MacKinnon. L'3.
Environmental Protection Agency.
Office of Waste Programs  Enforcement.
Guidance and Oversight-Branch (VVH-
52?), 401 M Street S\V» Washington. DC
20(60.
PO* numo* MPomunoN CONTACT
Kathy MacKinnon. U.S. Environmental
Protection Agency. Office of Waste
 Programs Enforcement. Guidance and
 Oversight Branch. WH-S27.401 M Street
 SW. Washington. DC 20460. (20214r$-
 6770.
 SUffrXUif NTA«V H*omumo*e The term
 "mixed funding", as used in this
 document, refers to three types of
 arrangements in which the Government.
 at its discretion, agrees to conduct and/
 or pay for i portion of a response action.
 In one arrangement, as described in
 section 122 of the cost of a cleanup
 at a site. For mixed funding settlements.
 criteria of particular importance include
 the strength of the liability case against
 settlors and any non-settlors, the size of
 the portion for which the Fund will be
 responsible, and other mitigating and
 equitable factors.
  The use of mixed funding does not
 change EPA's established criteria for
 evaluating settlement offers. As slated
 in the Interim CERCLA Settlement
 Policy, liability under CERCLA is strict.
 joint and  several unless the PRPs can
 dearly demonstrate that the harm at the
 site is divisible. Thus, approval of a
 mixed funding settlement will be a
 policy decision, made in the
 Government's discretion,  based on an
 evaluation of the totality of the
 circumstances in each case.
  Mixed funding settlements represent
one portion of a comprehensive effort to
 facilitate settlements of enforcement
actions under CERCLA. In particular. cV
minima settlements (sections 122(g)).

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Federal Register / Vol. 53.  \o. 49  /  Monday. March 14. 1988 / Notices
 covmanit not to sue (section* 122(0).
 and non-binding allocation* of
 responsibility (NBARi) (*ections
 122(e)(3)) may be used in conjunction
 with mixed funding at a maaru of
 increasing the flexibility with which
 CERCLA case* may be settled in order
 to expedite cleanup*.
  The Agency encourages public
 comment on thu guidance, especially
 related to particular types of mixed
 funding arrangements. The Agency will
 reevaluate this interim guidance in
 response to public comments.
  The interim guidance follow*.
  Datt: Ftbrvary 28.19M.
 ). W. MeKerew.
 Acting Atrittant Adminiitrctor for Solid
 Wat t» and Emergency Rttponie.
  Dair February li 196B.
 Tboeaa* U Adatai. It-
 AM/I to/if Administrator for Enforcement and
 Compliance Monitoring.
 October 20.1967
 Memorandum
 Subject: Evaluating Mixed Funding
  Settlements Under CERCLA
 From: ]. Win»ton Porter. Assistant
  Administrator. Office of Solid Waste
  and Emergency Response
 Thomas L Adams. Jr.. Assistant
  Administrator. Office of Enforcement
  and Compliance Monitoring
 To: Regional Administrators. Regions I-
  X

 /. Introduction
  This document provides guidance for
 use when a party proposes, as part of a
 settlement negotiation, that both private
 and Fund resources be used at a site.
 This type of arrangement is generally
 referred to as a "mixed funding"
 settlement. Section 122(b) of the
 Comprehensive Environmental
 Response. Compensation and Liability
 Act. as amended by the Superfund
 Amendments and Reauthorize lion Act
 of" oM (hereinafter cited as "CERCLA")
 prvndes explicit authority for the
 Government to enter into these types of
 arrangements.
  The primary goals of thu guidance are
 to
  (1) Encourage  the Regions to consider
 mixed funding settlements, based on the
 statutory approval of these settlements
 in section 122(b) of CERCLA;
  (2) Present a method for Regional
 enforcement personnel to analyse mixed
 funding in the context of a settlement
 offer, and
  (3) Indicate broad Agency preferences
 by specifying acceptable and poor
candidates for mixed funding in general.
  Historically, the  term "mixed funding"
has been used to describe three types of
arrangements. Section 122(b](l) of
                   CERCLA describes one mixed funding
                   arrangement, in which one or more of
                   the potentially responsible parties
                   (PRPs) agree to perform a response
                   activity and the Agency agrees to
                   reimburse those PRPs for a portion of
                   their response costs. In such cases, the
                   statute provides that the cost incurred
                   by the Fund be recovered from non-
                   settlors when possible.
                     Settlement agreements involving
                   cleanups by PRPs and  reimbursement of
                   their response costs require the Agency
                   to "preauthorize" the claim against the
                   Fund prior to the initiation of the
                   response action. The term
                   "preauthonzation"  refers to the
                   approval that must  be granted by the
                   Agency prior to cleanup actions if a
                   claim for response costs  is to be
                   considered against  the Fund. If
                   preauthohzation is  granted, it serve* as
                   an Agency commitment that, if response
                   costs are conducted pursuant to the
                   settlement agreement and the costs are
                   reasonable and necessary.
                   reimbursement will be available from
                   the Fund as dictated by the agreement.
                   subject to the availability of
                   appropriated monies.
                     Two other kinds of settlement
                   agreements also constitute forms of
                   mixed funding, but do not require
                   preauthonzation. Section 122(b)(3)
                   describes one type of arrangement, in
                   which-the Agency conducts the response
                   action and the PRPs pay the Agency for
                   a portion of the costs. This type of
                   settlement is known as a settlement for
                   cash, or "cash-out" A  third type of
                   mixed funding, known  as "mixed work."
                   involves an agreement which addresses
                   the entire response  action, but the PRPs
                   and the Agency agree to conduct and
                   pay for discrete portions or segments of
                   the response action. The term "mixed
                   funding", as used in this document
                   applies to any of the aforementioned
                   types of settlements. It should be noted.
                   however, that section 122(bX4).
                   concerning future obligation of the Fund
                   for remedy failure, only applies to mixed
                  - funding in the form  of preauthohtation.
                   as described ia section ISJbXl).
                     As noted above, the  19W
                   Amendments to CERCLA included an
                   explicit statutory authorization of mUnd
                   funding settlements. Prior to  these
                   Amendments, the primal)- document
                   which made reference  to mixed funding
                   was the Interim CERCLA Settlement
                   Policy (30 FR S034). This policy aei out
                   ten criteria to use when evaluating a
                   settlement offer for less than 1003 of the
                   cost or cleanup at a site. In mixed
                   funding settlements, the PRPs agree to
                   pay for a portion of the response cost.
                   and may conduct some or all of the
                   response action.
  A major portion of this guidance
addresses the application of the Interim
Settlement Policy- to mixed funding
settlements. Section II outlines the key
principles underlying the Agency s
Interim Settlement Policy, and the role
of mixed funding within these general
principles. Section III tSn provides an
approach for applying the ten settlement
criteria to mixed funding settlement
offers in general (e.g.. without regard to
any specific funding arrangement.) Thu
section first highlights factors of key
importance to mixed funding
settlements, and then suggests the
Agency's preferences among vanou*
combination* of these factors.
  Section IV identifies critena to be
used to determine if a particular type of
mixed funding is appropriate for a site.
and then li*ts secondary considerations
related to all mixed funding  settlements
Section V outlines the general proretiure
for  review and approval of mixed
funding.

U. The Role of Mixed Funding in the
CERCLA Cleanup Program

  The Interim CERCLA Settlement
Policy identified negotiated private
response actions as an essential
component of the Agency's overall
program for obtaining cleanup of the
nation's hazardous watte sites. This
program, to be effective, depends upon a
balanced approach, which includes a
mix of Fund-financed cleanups.
enforceable settlement agreements
reached through negotiations, and
litigation. Expeditious cleanups  reached
through negotiated settlements are
preferable to protracted Jitigation.
  Section 122 of the 1986 Amemdmcnts.
which is devoted entirely to  settlement
issues, indicates Congressional
affirmation of the emphMis in the
Interim Settlement Policy toward
increased flexibility in settling CERCLA
cases in order to expedite cleanups. Lik>
the  Interim Settlement Policy, section
122 covers a wide range of mechanisms
designed to promote settlement*. In
particular, in section 122(b|. Congress
acknowledged the need to consider
settlement* for leas than 100% of ;he
costs of cleanups ..... by using
monies from the Fund or. behalf cf
parties who are unknown, insolvent.
similarly unavailable, or refuse to
settle." (See the Conference Report on
Superfund Amendments and
Reauthorize tion Act of 19M. 99 Cong..
Id SMS. Report 99-982 pp. 183. 252
  The Agency encourages the use of
mixed funding to promote settlement
and hazardous site cleanup. For
example, preauthonzation offers the

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                     Federal Register /  Vol.  53.  No. 49  / Monday. March  14. 1986 / Notices
                                                                                                                8281
 advantage of PRP performance of the
 response activity and funding of a
 substantial portion of the response
 costs, thus conserving Agency resources
 fot .M at other sites. In addition, section
 lZ2(b)Cl) requires the Agency to make
 all reasonable effort* to recover these
 costs. The Agency will therefore pursue
 noniettlora to make the Fund whole.
 unless it would be unwarranted to
 undertake such efforts. To  the extent
 that mixed funding reduces the number
 of PRPs to be sued in such  cost recovery
 cases, it will also reduce the  Agency's
 costs for litigation.
  Support of mixed funding us a
 settlement tool, however, does not imply
 ihat the'standard and scope of liability
 under CERCLA has changed. As
 established by court decisions prior to
 the 1986 Amendments. PRP liability
 under CERC1A remains strict, joint and
 several, unless the PRPs can clearly
 demonstrate that the harm  a: the site is
 divisible. Thus, the Agencv will assess
 mixed funding  settlements  in a manner
 consistent with the Interim Settlement
 Policy, where complete clean-..? or
 i-ullection of 100% of costs remains a
 primary goal.
  For example, the Agor.ey ».:! ~ot
 approve mixed funding $irr.pi> on thr
 linsis that a share of wastes ni a sue
 may be attributable to  an unknown or
 financially non-viable party The
 Agency may conduct an allocation of
 liability among PRPs at a site, or may
evaluate the PRP s allocation and allow
 volume to be considered as one factor
used to assess the reasor.dbir>ncss.of me
 PRPs' offer. However, the iivmi.ibilii) nr
 the urr.ouiit of an\  Fund-financing fur .>
 •••iirticulur site wiU'r.ut bo dt-annrtom
 -olely  on consistency w.'.'r. r.r-.;.
 volumetric or "fair-share" < th« ter.
settlement criiiria to settlement ofli;r» IP
which PRPs hi.vc rc'tuie*;rd *om« form
of mixed funding. The Asrsry uot-s noi
intend to limit the avaiUuil.U of mixed
funding to the !:ic:i patterns dnM.r.!ied.
below, but recommends the following
approach  as a means of focusing the
analysis of the settlement Regions  must
continue to consider the totality of  the
circumstances for each mixed funding
settlement offer
  In settlement offers in which any  form
of mixed funding is proposed, factors of
primary importance include;
  • Strength of the li«l»lny cust- .lymnsi
settlors and any non-settlors.  This factor
includes:
— Utigalive risks in proceeding to irinl
  against  settlors, and
—The nature of the can* remaining
  against  non-settlors after the
  settlement:
  • Government's options in the event
settlement negotiations. fail (e.g.. if «
state cost-share will be available for a
Fund-lead action):
   • Size of the portion or operabl: unit
 for which the Fund will he responsible
 (or the amount of the PRP"s offer):
   • Good-faith negotiations and
 cooperation of settlors and other
 mitigating and equitable factors
  The following examples indicate the
 combinations of the above factors which
 may be considered acceptable
 candidates for any type of mixed
 funding, and those cases considered
 poor candidates for mixed funding:

 Acceptable Candidates for Mixed
 Funding
  The best candidates for mixed funding
 are cases in which the following
 features are present:
  • The potential portion or operable
 unit to be covered by the Fund is small.
 or the settling PRPs offer a substantial
 portion of the total cost or cleanup, tr.
 this context, substantial portion muy be
 defined as  a commitment by the PRPs to
 undertake or finance a predominant
 portion of the tote! remedial acLor..'
  • The Government has a strong cjsc
 against (manually viable non-jeiiimg
 PRPs. from which the Fund portion may
 be recovered.
  While this combination of factor*
 represents the optimum conditions
 under which mixed funding may be
 approved, cases wili more typically
 involve one or more variations of this
 scenario. Thus, the Agency anticipates
 that a range of cases  will be considered
 acceptable candidates for mixed
 funding. The following examples
 indicate the circumstances ur.der  whirh
 a mixed fundina sememe:-: -.u
 represent thi- GovrT.r-cr-« r"tfiri-o
 alternative.
  f.re.TT""- nr:"' A Vi; i"": i..->» ,I:M.::«>'
 potential settlors ni;:<  :r..: 't::\ WP-C^ in
 fjvor of lilij.mcn. espc-c -m :f tht case
 against non-v.-;tlots t» MI.-.:K UuwevKr.,.
 mixed funding settlement ~-.\ st.I! IT
 acceptable upon evrtLai."? of
 additional factors, such us:
  • The settling PRPs offer to conduct.
or pay for a substantial portion  of the
response:
  • Public interest considerations (r.ft
 if settlement would expedite cl«*M.iup
and/or :i swnon IfM FnrH-finjinccd
action is not fcftsiblftl.
  • Whether netllon have negntiuted in
good-faith:
  • The Government'* time and
resources snved by simplification  or
avoidance of litigation.
  Exempt* two: If a substantial portion
ohhf w.isic »t« site cannot be
  1 At iKHct: ;.:i;r. tht Afvncv t pr«l«Hf)!C* it''»
iht ntPi to pm'nm ihr iMyoKM aetton raihrr 
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 8282
Federal  Register / Vol. 53. No. 49 / Monday. March  U. IMS / Notices
 attributed to known and financially-
 viable parties, as determined for
 example, by a preliminary nonbmding
 allocation of responsibility by the
 Government), the Agency may initially
 consider pursuing the recovery of all
 costs under |oint and several liability.
 However, if the litigative risks appear
 substantial, a mixed funding settlement
 may represent more than the
 Government would recover in litigation.
 especially when the cost and time
 required for litigation is considered.
 Litigative nsks which may weigh in
 favor of settlement include:
   • Weak evidence against financially
 viable potential settlors:
   • Equitable considerations which
 weigh against the imposition of joint and
 several liability.
   In addition, if the hazard at the site is
 senous and nc Fund-financed  response
 is possible, a delay in the response
 action pending the conclusion  of
 litigation might represent an
 unacceptable risk to the public and the
 environment.
 Poor Candidates for Mixed Funding
   Cases considered poor candidates for
 mixed funding have the following
 features:
   •  The case against settling parties is
 strong, and thus the potential for
 successful  litigation is high:
   •  The potential Fund portion is large
 (e.g.. the potentially settlors' offer is
 insufficient.)
  These factors  do not automatically
 preclude mixed funding for a case.
 However, for mixed funding to be
 seriously considered in such instances.
 other compensating factors must be
 present, such as the ability of the
 settlors to initiate the response action
 more quickly than the Government in a
 Fund-financed action.
 IV. Selection of the Mixed Funding
 Technique
  Aa noted in the above Introduction.
 the term mixed funding has been used to
 refer to three different types of
 settlement arrangements:
   (1) Preauthoniation. in which the
 PRPs conduct a response action and the
 Agency agrees to allow • claim against
 the Fund for a portion of the response
costs:
  (2) Cash-outs,  in which the PRPS pay
 for a portion of the response costs up
 front and the Agency conducts the
response action:
  (3) Mixed work, in which the PRPs
and  the Agency each agree to conduct
discrete portions of the response
activity.
  Once Regional enforcement personnel
heve determined that a mixed funding -
                   settlement is appropriate, baaed on the
                   settlement criteria as described in
                   Section III and the Interim Settlement
                   Policy, then the Agency must decide
                   which type of mixed funding best suits
                   the situation at hand. Among the three
                   maior types of mixed funding, the
                   Agency generally prefers
                   preauthonzation. since the PRPs
                   conduct the response action. However.
                   as noted below, cashoms and mixed
                   work may be appropriate under certain
                   circumstances.
                   Preauthonzation
                     The assessment and approval of
                   preauthonzation. once a mixed funding
                   settlement is approved, is a two-part
                   process. The first stage, as  described
                   below, is the determination by the
                   Agency enforcement personnel that
                   preauthonzation is appropriate in the
                   context of the settlemeni as a whole.
                   The second  stage represents the actual
                   process of preauthonzation of the claim
                   against the Fund by the Office of
                   Emergency and Remedial Response
                   (OERR) (see Section V.) The Response
                   Claims regulations, which are presently
                   in draft form, will provide guidance on
                   the preauthonzation process itself.
                     (a) Technical and timing concerns
                   related to preauthonzation.
                     For the first stage of the review, the
                   nature of the proposed remedy and  the
                   PRPs' ability to perform it in a timely
                   manner are major factors to consider
                   when assessing a settlement offer which
                   contemplates preauthonzation. In
                   addition, the size of the PRPs' portion is
                   important. When-PRPt are  responsible
                   for a sufficiently high percentage, they
                   will have a strong economic incentive to
                   keep the actual response costs within or
                   close  to estimates. The nature and the
                   severity of the threat posed by the site
                   may also weigh in favor of settlement if
                   preauthonzation would increase the
                   speed at which the hazard could be
                   addressed. For example, prompt
                   initiation of the remedial action would
                   be of particular importance for sites
                   which are not currently scheduled for
                   full Fund-financing.
                     On the other hand. Regional
                   negotiators must also consider the timi;
                   required for the preauthonzation
                   process itself when determining if
                   preauthonzation is appropriate for
                   particular types of response actions.
                   While the Agency has set a goal of
                   completing review of individual
                   preauthonzation application* within a
                   45-day period,  this timing limitation will
                   vary on a case-by-case baits. The
                   Agency is unlikely to have  time to
                   consider preauthonzation requests
                   when action is required to even an
                   immediate threat to the public health or
 the environment therefore, no
 reimbursement would be possible.
 Regions should anticipate the processing
 time in managing negotiations.
  (b) Availability of preauthonzation for
 various response actiaos.
  For agreements involving activities
 such as an Rl/FS or a removal.
 preauthonzation in general will not be
 warranted, because the process of
 preauthonzation will prove too
 burdensome for the small amounts or
 shon time-frames often encountered in
 these cases. Limited exceptions may be
considered in unusual circumstances, aa
 where preauthonzation will facilitate a
 broader agreement (e.g.. an ares-wide
 RJ/FS) which will be less resource
 intensive than several agreements of
 smaller scope. A large, extensive
 removal (e.g.. greater then 52 million)
 may also qualify as an extraordinary
 circumstance justifying
 preauthonzation. However.
 Headquarters approval must  be
 obtained before preauthonzation may
 be offered during negotiations for such
 activities.
  (c) Covenants not to sue  for
 preauthonzation settlements.
  For preauthonzation of remedial
 design and remedial action (RD/RA)
 activities, the statute contains a specific
 provision related to remedy failure.'
 Section 122(b)(4) ofCERCLA states that
 for cases involving preauthonzation. as
 described in section 122{b)(l). (he Fund
 will be responsible for costs of remedy
 failure, up to a proportion equal to that
 contributed for the original remedial
 action. This section also states that the
 Fund portion may be met either through
 Fund expenditures or by recovering «uch
 costs from parties who were not
 signatories to the original agreement.
 However, it should be noted that
 remedy failure due to negligence of the
 PRP will not trigger any Fund obligation.
 In any case, a covenant not to sue
granted in preauthorixe settlements
 must comport with Agency guidance on
covenants not to sue. as cited above.
  (d) Settlement provisions needed to
 process claims.
  Settlement agreements involving
preauthonzation should contain the
 following restrictions to facilitate  the
processing of claims: •
  • Settlement agreements should
specify a percentage of the total
estimated coat to be Included in the
 preauthonzation claim for PRP
 reimbursement subject to a maximum
 dollar limit.
  • Claims agaisnt the Fund are not
 subject to the section 104(c)(3)
 requirement that States contribute 1C
 percent of the cost of the remedial

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                     Federal Register  /  Vol. S3. Nu.  49 / Monday. March 14. 1988  /  Notices
                                                                       8283
 action. Howtvir. proipcctivc claimants
 are encouraged to Hie • Itttir of
 cooperation from the Suit along with
 their request for praauthoriztfiion. Thi*
 If Her should describe any agreemenu
 resulting from the claimants'
 consultation with the State, including
 any Statt assurance of cooperation with
 the remedial action. Further, ull actions
 conducted pursuant to a preauthonzed
 claim must be consistent with the NCP
 and the proposed draft Response Claim
 regulations, when promulgated.
  • Claims may be Lied only for costs
 incurred alter the date of
 preauthorization. Parties will not be
 eligible to make a claim against the
 Fund until  the entire cleanup or agreed-
 upon prcauthonzed phase [e.g.. an
 operable unit) it completed according to
 specifications set out in the settlement
 agreement and the Preauthonzation
 Decision Document.
  • Applicants roust demonstrate that
 their proposed response costs arc
 reasonable. The applicant should justify
 «ny proposal to perform in activity in-
 house, o. to contract it out. Applicants
 may look to Federal and State
 procurement practice* for guidance on
 how to meet EPA's objectives in the
 area of contracting and subcontracting.
  • PRPs must be financially and
 technically capable of implementing all
 of the agreed upon response action.
 Parties may be required tb submit
 financial assurances or performance
bonds' to substantiate their financial
capability for completing the response
action.

Cash-out;.
  For settlement proposals invoking a
cash-out by some of the  PRPs. the nature
of the remedy and the public interest
 factors are generally not decisive, since
 the  Government will be conducting the
response action. Thus, of the criteria m
 the  Interim Settlement Policy noted in
Section UL the key issues in the**
agreement* include:
  •  The percentage of the total costs to
 be paid by  settlor* (i.t- a substantial
 portion should be offered);
  • The Agency a level of confidence in
 information related to liability and cost
estimates at the tune of settlement
  • Euuituble considerations for both
 the  settling and non-settling parties.
including the nature of any covenants
 not to sue in the cash-nut settlement.
  in general cash-out settlements may
occur at any stage of the remedial
process. Such offers should generally be
assessed in light of the criteria in Part IV
of the Interim CERCLA Settlement
Policy. It is important to note that once
a Fund-lead response action is ongoing.
the  potential benefit of mixed funding us
 a means of expediting cleanup ;s lately
 eliminated. In addition.a cash-out of
 some of the PRfs during the response
 action may serve 10 fragment the
 Government s enforcement proceedings.
 since cost recovery will generally be
 pursued once the remedial action is
 completed. Other tMues related to cash-
 outs include:
  (a) Information needs reUted to cash-
 out settlements.
  One example of the use of cash-out
 settlement* could involve PRPs which
 have contributed a low percentage of
 the waste to » sit*, and are not
 technically or financially capable of
 conducuag the enure response action
 (e.g. preauthorization is not an option.)
 In order for this type of settlement to be
 appropriate for both settling and non-
 settling responsible pa/tie*, the Agency
 should have sufficient information to
 determine a settlement amount for the
 settlors as a group- This amount should
 be based on the Settlement Policy, and
 should include their waste contribution
 and other relevant  information. Thus.
 the Agency should  have a fairly high
 level of confidence in the inform*Don
 concerning the liability at the sue and
 the expected cost of the remedy m order
 to determine; an appropriate cash-out
 settlement.
  The settlement may include a risk
 premium which may partially offset the
 Government's risk due to uncertainties
 such as remedy failure or cost overruns.
 as well as uncertainties which may be
 present if the necessary information is
 less than complete.
  (b) Covenants not to sue in c«sh-uut
 settlements.
  The sufficiency of the Agency »
 information related to PRP liability and
 the nature, siapr of development and tht-
 cost of the potently! remedy has
 particular bearing on the scope of any
 covenant not to sue in cash-out
 settlements, in general if the Agency
 has only limited information in these
 areas («4- if the cash-out settlement
 entered into early in the remedial
 process), then covenants not to sue
 should contain appropriate reopeners to
 reflect this uncertainty. In reference to
 these reopeners. it is important to note
 that the obligation of the Fund to pay for
 a portion of any costs incurred due to
 remedy failure, under section lC2Jb)(4).
 is limited to mixed  funding in the form of
 preauthorizaUwa under section I22(b)(1).
Thus, for cash-outs, the statute does not
 limit the potential PRP liability for costs
resulting from remedy failure. Any
future obligations will be specified in
the cash-out agreement. inUuding the
covenants not to sue. Further guidance
concerning covenants not to sue a
provided in the Agency guidance
"Covenants Not to Sue Under SARA"
cited above.
  In addition, although cash-out
settlements need not involve o> ni.-n/m.i
parties, as defined by section I22|g).
similar analytical factors are important
in both instances. Thus. Agency
guidance entitled "Interim Guidelines on
Settlements with De Minima Waste
Contributors under Seen on 122(g) of
SARA", cited above, may also be
helpful for cash-out settlements.
  (c) State cost-Share requirements for
casrt-oyt settlements.
  When the Federal government uses its
response authority to conduct a
remedial action, section 10t(c)(3) of
CERCLA requires that the State "pay(s|
or will assure payment" of 10% of the
remedial action, including all future
maintenance, or SO* or greater for sites
involving a state operated facility. Since
cash-out settlements involve PRP
payment toward a federally-conducted
remedial action, the applicable cost
share is required for these settlements.
The cost-shore will be calculated using
the total remedial costs, rather than the
percentage of the Fund share alone.
  There are a variety of ways that the
State can "pay or assure payment" of
the appropriate cost-share.  For example.
the State, thi Federal government and
PRPs may enter into an agreement under
State law and CERCLA in which the
PRPs pay 10% to tht State, and the State
obligates the money for use at the sue in
question. The State may also use its own
funds to pay for any portion of its share
that cannot be paid for by PRPs. In
gener.nl. cash-out settlements should
only be considered when she litigation
leum is reasonably certain that the Siute
is Willing and able to pa> (or its If".
share, although the cost-share need nut
be part of the consent decree between
the Federal government and the PRPs.

Mixed Work
  Mixed funding in the form of mixed
work may be appropriate for cases m
which the Agency can  identify discrete
phases or operable units of the response
action. One common example involves a
settlement with the PRPs to conduct the
RO/RA once the Agcnu has conducted
the Rl/FS.
  A second, more complicated mixed
work arrangement could involve sn •
agreement in which the Agency and (he
PRPs agree to conduct  separate pontons
of an area-wide Rl. In this example, the
Agency' might egree to conduct soil
testing if the PRPS conduct ground-
water monitoring. Regional enforcement
personnel should be reasonably assured
of PRP cooperation and the ability to
identify m detail tha individual activittes

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 8284
Federal  Register /  Vol. 53.  No. 49 A Monday; March T4,-1888 / Notices
 for which etch party will be responsible
 before entering into any mixed work
 teitlemem. In addition, any covenants
 not to sue in mixed work settlement]
 should be clearly limited to the operable
 units addressed in the agreement. Mixed
 work should be avoided where there is a
 significant potential for delays in
 response actions as a result of
 inadequate coordination or potential
 conflicts. Thus, due to the high potential
 for technical and legal complications.
 mixed work in the form  of mixed
 construction should generally not be
 considered.

 Additional Considerations Regarding
 Mixed Funding
   Operation and Maintenance: For
 preauthorized settlements, full
 responsibility for payment of operations
 and maintenance (O & M) activities
 remains  with the PRPs. In some
 circumstances, a State may agree, as a
 party to  the settlement, to manage 0 4
 M activities which are financed by
 PRPs. The Agency will generally resort
 to enforcement actions rather than
 committing Fund money for cleanup at
 the site when both the PRPs and the
 State refuse to be responsible for 0 & M.
  Actions Against Non-settlors: It is the
 policy of the Department of Justice that
 the Federal government will not commit
 in a consent decree or other agreement
 to sue other non-settling parties.
 Consistent with this policy, mixed
 funding settlement agreements should
 not contain provisions which commit  the
 Federal government to sue non-settling
 partjes at a particular site. At most, the
 agreement may indicate that the
 Government has a "present intention" to
 sue non-settlors, subiect to the exercise
 of the Government's enforcement
 discretion. Such provisions, however.
 must be approved by Headquarters and
 the Department of Justice (DOJ) on a
 cat«-by-case basis, and may not be
 offered in negotiations until such
 approval is obtained.
  Reservation of Rights: Potential
 settlors occasionally will agree to allow
 the Government to rts«rve the right to
 bring an  enforcement action against
 them, contingent upon • certain event.
 such as an unsuccessful enforcement
 action against non-settlors. Such an
 arrangement is not desirable, although it
 may be acceptable in limited
 circumstances. Such an offer should not
 be used by settlors as a means of
 reducing the amount offend up front In
 addition, the negotiation team should
 consider the practical problems that
 might arise in implementing such an
 arrangement including statute of
 limitation iaaues and fragmented
enforcement actions involving
                   successive suits covering similar issues.
                   The Government generally prefers to
                   settle for a substantial portion up front.
                   rather than being required to bring a
                   second enforcement action against
                   settlors for an additional amount.
                     Documentation: Forpreauthorization
                   and mixed workcases in which the
                   Agency will take enforcement actions
                   against non-settling parties, the Agency
                   must assure that the settling PRPs agree
                   to provide the necessary documentation
                   and any other assistance required for
                   support of the cost recovery cases. This
                   assistance may include an agreement to
                   provide witnesses to substantiate
                   response costs. Government oversight
                   will also be required, not only to assure
                   that reimbursement by the Government
                   is appropriate, but also that PRP
                   documentation constitutes sufficient and
                   admissible evidence for the cost
                   recovery cases.
                   V. Procedural Considerations for
                   Review ofSeulemenu Involving Mixed
                   Funding
                     As noted in Section I.  consideration of
                   a site for any type of mixed funding
                   involves a two-stage process. The site
                   Tint should be evaluated to determine if
                   an offer for a mixed funding settlement
                   in general (e.g.. without regard to the
                   particular funding arrangement) should
                   be accepted. This analysis includes the
                   settlement criteria, with the hypothetical
                   examples in Section FII indicating the
                   Agency's preferences among vinous
                   combinations of factors. Once the
                   Regional enforcement personnel
                   determines that a mixed funding
                   settlement will be acceptable, then the
                   factors noted in Section  TV should be
                   used to evaluate whether a particular
                   type of mixed funding is appropriate.
                     The Agency has developed  guidance
                   on streamlining and improving the
                   CERCLA settlement decision process.
                   which, in part, highlights the need for
                   improved preparation for negotiations
                   and for a more systematic management
                   review process. (See -Interim Guidance:
                   Streamlining the CERCLA Settlement
                   Decision Process*'. Porter/ Adams. Feb.
                   12.1987.) In keeping with the go»ls of
                   this unproved process. Regions should
                   conduct both stages of the mixed
                   funding analysis as early as possible
                   (e.g~ prior lo the appropriate special
                   notice.)
                     Timely Headquarters and DO)
                   notification is particularly important for
                   cases involving preauthorixation, since
                   the use of preauthorization in
                   settlements requires both the  approval
                   of the settlement for preauthornation. as
                   described above, and the review by
                   OERK of the request for
                   preauthorization itself. Early DOJ
involvement is necessary in nixed
funding negotiations, as it is for other
types of negotiations. While the
preauthorization process need not be
completed at the time of settlement, the
settlement document must describe the
major parameters of the proposed
preauthorizarion agreement. Therefore.
OERR should be contacted once the
mixed funding analysis has been
completed and the Region supports
further consideration of
preauthorizan'on. For further information
on the draft Response Gaims
regulations and the procedure for
preauthorization with OERR. contact
William 0. Ross. Office of Emergency
and Remedial Response (WH-S46). (FTs.i
  Issues which cannot be resolved at
the staff level may be raised to the
Settlement Decision Committee (SDC). a
Headquarters-based review panel. Like
all consent decrees, mixed funding
settlements will require final approval
by the Assistant Administrator (AAJ for
the Office of Solid Waste and
Emergency Response (OSWER). the AA-
OECM. and the Assistant Attorney
General for Lands and Natural
Resources. If the amount to he paid by
the Fund exceeds $750.000 or 10* "of the
total response cost (whichever is
greater), approval by the Deputy
Attorney General at DOJ will also be
required. Regional enforcement
personnel  may. of course, decline to
consider mixed funding at a particular
site without prior Headquarters
consultation.

VI. Conclusion
  Settlement agreements incorporating
mixed funding provisions, as described
in part under section I22(b) of CERCLA.
offer an alternative to either up front
Fund financing of the total costs of
response actions at a site, or possible'
delays in cleanup resulting from
litigation required to force PRP action.
Mixed funding represents one
component of the Agency's
comprehensive approach toward
increased  flexibility in settling CERCLA
cases. This approach originates from the
CERCLA Interim Settlement Policy as
well as the codification of much of this
Policy Section 122 of the 1986
Amendments.
  The assessment of mixed funding for a
particular  site must always begin with
the determination as to whether any
type of mixed funding settlement is
appropriate, based on the ten settlement
criteria. At the broadest level this
evaluation will involve a determination
as to the most effective means of
promoting cleanup at a site while

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                     Federal Register / VoL  53. No. 49 /.Monday. March 14. 1988  / Notices
                                                                                                             8285
 iniunnf the most efficient UM of the
 Agency'* resource*, includinf th* Fund
 itself. Regions are encouraged to
 consider • mixed funding settlement
 when in assessment of the settlement
 criteria, including the strength of the
 evidence, the equities of the settlement
 ind the public interest, indicate thai
 mixed funding is in  the best interest of
 the Government, the public and the
 environment.
   For further information or questions
 concerning (hit guidance, contact Kathy
 MacKinnon. OWPE (WH-527) at FTS:
 475-6770.

 Disclaimer
   The policies and procedures
 established in this document are
 intended solely for the guidance of
 Government personnel. They are not
 intended and can not be reiied upon to
 create any rights, substantive or
 procedural, enforceable by any party  in
 litigation with the United States. The
 Agency reserves the right to act at
 variance with these policies and
 procedures and to change them at any
 time without public  notice
 [FK Doc. 8--W Filed 3-11-A8. 8-15 ami
 •4UJMC COOt
EXPORT-IMPORT BANK OF THE
UNITED STATES

Advisory Committee of the Export-
Import Bank of trie United SUtts;
Open Meeting

SUMMARY: The Advisory Committee was
established by Pub. L 98-181. November
30.1963. to advise the Export-Import
Bank on its programs and to provide
comments for inclusion in the reports of
the Export-fcnpon Bank to the United
States Congress.
  Time and Place: Tuesday. March 29.
1988 from 9:30 a.m. to 12 noon. The
meeting will be held in Room 1143.811
Vermont Avenue NW™ Washington. DC •
20571.
  Agenda: The meeting agenda will
include a discussion of the following
topics: Financial Report Summary of
Hearings. Medium-Term Report 10
Congress and Competitiveness Report.
Review of 1908 Issues for Advisory
Committee. Briefing on FCIA Strategic
Plan. State/City Update, and other
topics.
  Public Participation: The meeting will
be open to public participation: and the
last 20 minutes wili be set aside for oral
questions or comments. Members of the
public may also Hie written statemcnt(s)
before or after the meeting. In order to
permit the Export-import Bank to
arrange suitable accommodations.
 member* of the. public who plan to
 attend the meeting should notify loan P.
 Harris. Room 935.811 Vermont Avenue
 NW. Washington. DC 20571. (202) 568-
 8871. not later than March 28.1988. If
 any person wishes auxiliary aids (such
 as a language interpreter! or other
 special accommodations, please contact
 prior to March 22,1988 the Office of the
 Secretary. Room 935.811 Vermont
 Avenue NW.. Washington. DC 20571.
 Voice: (202) 566-4871 or TDD: (202) 535-
 3913.
  Further Information: For further
 information, contact Joan P. Hams.
 Room 935. 811 Vermont Avenue NW..
 Washington. DC 20571. (202) 586-8871.
 Han FMMMten.
 Central Counttl.
 |FR Doc. SB-US? Filed J-11-M. 8:45 »m|
 •IUJMC cooc
FEDERAL COMMUNICATIONS
COMMISSION

Speciality Mobile Radio Service
Frequencies To Be Available for
Reassignment

  The following channels were recently
recovered from licensees who failed to
meet the Comrmssion's loading or
construction requirements and will be
available for reassignment to trunked
Specialized Mobile Radio (SMR)
applicants. They were previously
licensed at the coordinates indicated
and are available at any location within
the geographic area which will protect
existing SMR systems pursuant to Ruies
90.362 and 90.621.
Rockford. IL
42-16-SO North
88-02-16 Wtn
•56/660.0375 MHz
Front Royal VA
aa-M-29 North
TS-u-OB West
an/as4.4»75 MHi
Swanton. OH
41-35-00 North
•3-50-58 WPSI
•56/860.557: MHz
Miimson. CO
39-40-23 North
106-13-M West
•57/M0.0625 MHx
Phoenix. AZ
33-09-33 North
112-33-30 Wesl
•56/8605125 MHs
Baton Route. LA
30-25-56 North
81-1146 Weil
•56/860.S62S MHi
Wobum. MA
42-21-X North
70-V-OO Wesl
 •BJa7S.lt4.437S.
 •S4Jn.aw.33rs.
 M5.7S73MHS
 Syrtcux. NY
 4J-02-M North
 78-08-00 Weil
  Pursuant to the Public Notice of
 January ft. 1986. Mimeo No. 1805. these
 channels will be available for
 reassignment on March 31.1988. All
 applications received before March 31.
 1988 will be dismissed. The first
 application received after the channels
 become available for reassignment
 opens the filing window. The window
 stays open only for the day on which the
 first application is received. All
 applications MUST reference the date
 and DA number of thit Public Notice ;r>
 order to be considered for these
 Frequencies.
  There is a $30.00 fee required for eacr
 application filed. All checxs should be
 made payable to the FCC. Appl,canons
 should be mailed to: Federal
 Communications Commission. 800
 Megahertz Service. P.O. Box 360416.M.
 Pittsburgh. PA 15251-8416. Applications
 may also be filed m person between 9:00
 AM and 3:00 PM at the following
 address: Federal Communications
 Commission, c/o Mellon Bann. Three
 Meilon Bank Center. 525 Wiliiam Pen.-
 Way. 27th Floor. Room 153-2713.
 Pittsburgh. PA 15359. Attention:
 (Wholesale Lockbox Shift Supervisor].
  For further information, refer to Puol'C
 Nonce of January 6.1986 or contact
 Riley Hollingsworth or Betty Woolford
 (202'l 632-7125 of the .Private Radio
 Burcdu's Land Mobile and Microv\
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                                                          9834.11


 REVISED PROCEDURES FOR IMPLEMENTING OFF-SITE RESPONSE ACTIONS
I.  INTRODUCTION

     The off-site policy describes procedures that should be
observed when a response action under the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA)
or Section 7003 of RCRA involves off-site storage, treatment or
disposal of CERCLA waste.  The procedures also apply to actions
taken jointly under CERCLA and another statute.

     The purpose of the off-site policy is to avoid having
CERCLA wastes contribute to present or future environmental
problems by directing these wastes to facilities determined to
be environmentally sound.  It is EPA's responsibility to ensure
that the criteria for governing off-site transfer of CERCLA
waste result in decisions that are environmentally sensible and
that reflect sound public policy.  Therefore, in developing
acceptability criteria, the Agency has applied environmental
standards and other sound management practices to ensure that
CERCLA waste will be appropriately managed.

     EPA issued the original off-site policy in May 1985.  See
"Procedures for Planning and Implementing Off-Site Response
Actions", memorandum from Jack W. McGraw to the Regional
Administrators,  that policy was published in the Federal
Register on November 5, 1985.  The 1986 amendments to CERCLA,
the Superfund Amendments and Reauthorization Act  (SARA),
•adopted EPA's policy for off-site transfer of CERCLA wastes,
with some modifications.  CERCLA §121(d)(3) requires that
hazardous substances, pollutants or contaminants transferred
off-site for treatment, storage or disposal during a CERCLA
response action be transferred to a facility operating in
compliance with §§3004 and 1005 of RCRA and other applicable
lavs or regulations.  The statute also requires that receiving
units at land disposal facilities have no releases of hazardous
wastes or hazardous constituents.  Any releases from other
units at a land disposal facility must also b« controlled by a
RCRA or equivalent corrective action program.  While the
original policy required compliance with RCRA and other
applicable laws, SARA goes beyond the original policy,
primarily by prohibiting disposal at units at a land disposal
facility with releases, rather than allowing the Agency to
judge whether the releases constituted environmental conditions
that affected the satisfactory operation of a  facility.

     The off-site policy has been revised  in light of the
mandates of SARA.  This revised policy also extends the SARA
concepts to certain situations not specifically covered by  the
statute.  These requirements apply to CERCLA decision documents
signed, and RCRA §7003 actions taken, after enactment of  SARA.
Specifically, this policy covers:

-------
                                                          9834.11
                              -2-
     o   Extending SARA's "no release" requirement to all RCRA
         units receiving CERCLA waste, not just units at RCRA
         land disposal facilities;

     o   Expanding SARA's release prohibition to include
         releases of CERCLA hazardous substances,  in addition
         to releases of RCRA hazardous waste and hazardous
         constituents;

     o   Addressing releases from other units at RCRA treatment
         and storage facilities; and

     o   Addressing off-site transfer to non-RCRA facilities.

The revised policy also reinterprets the May 1985 policy as it
now applies to CERCLA decision documents signed, and RCRA §7003
actions taken, prior to the enactment of SARA.

     The revised off-site policy is effective immediately upon
issuance.  It is considered to be an interim policy as key
elements of the policy will be incorporated in a proposed rule
to be published in the Federal Register.  As part of that
rulemaking, the policy will be subject to public comment.
Comments received during that period may cause additional
revisions to the policy.  The final rule will reflect the final
policy under CERCLA §121(d)(3) and EPA will issue a revised
implementation policy memorandum if necessary.


II.  APPLICABILITY

     There are a number of variables which will determine
whether and how the off-site policy applies:  waste type,
authority, funding source, and whether the decision document or
order supporting the clean-up was signed before or after the
enactment of SARA (i.e., before or after October 17, 1986).  In
order to determine which elements, of the policy apply to a
specific CZRCLA cleanup each factor Bust be considered.

     The first factor to consider is the type of waste to be
transferred.  The revised policy applies to the off-site
treatment, storage or disposal of all CERCLA waste.  CERCLA
wastes include RCRA hazardous wastes and other CERCLA hazardous
substances, pollutants and contaminants.  RCRA hazardous wastes
are either listed or defined by characteristic  in  40 CFR  Part
261.  CERCLA hazardous substances are defined  in 40  CFR  300.6.

     Because RCRA permits and  interim status  apply to specific
wastes and specific storage, treatment  or disposal processes,
the Remedial Project Manager  (RPM) or On-Scene coordinator
(OSC) must determine that the  facility's permit or interim

-------
                                                           9834.11
                              -3-
status authorizes receipt of the wastes that would be
transported to the facility and the type of process
contemplated for the wastes.  Therefore, it is important that
facility selection be coordinated with RCRA personnel.

     A CERCLA hazardous substance that is not a RCRA hazardous
waste or hazardous constituent (i.e., non-RCRA waste) may be
taken to a RCRA facility if it is not otherwise incompatible
with the RCRA waste, even though receipt of that waste is not
expressly authorized under interim status or in the permit.
Non-RCRA wastes can also be managed at non-RCRA facilities.
Criteria applicable to CERCLA wastes that can be disposed of at
non-Subtitle C facilities are discussed later in this revised
policy.

     The second factor to consider in determining whether this
revised policy applies is the statutory authority for the
action.  This revised off-site policy applies to any remedial
or removal action involving the off-site transfer of any
hazardous substance, pollutant, or contaminant under any CERCLA
authority or under RCRA §7003.  This policy also applies to
response actions taken under §311 of the Clean Water Act,
except for cleanups of petroleum products.  The policy also
covers cleanups at Federal facilities under §120 of SARA.

     The third factor to assess is the source of funding.  The
revised policy applies to all Fund-financed response actions,
whether EPA or the State is the lead agency.  The*policy does
not apply to State-lead enforcement actions (even at NPL sites)
if no CERCLA funds are involved.  It does apply to State-lead
enforcement actions where EPA provides any site-specific
funding through a Cooperative Agreement or Multi-Site
Cooperative Agreement, even though the State may be using its
own enforcement authorities to compel the cleanup.  Similarly,
non-NPL «ites are covered by this policy only where there is an
expenditure of Fund money or where the cleanup is undertaken
under CZRCIA authority.

     The final factor that affects how this revised policy
applies is the date of the decision document.  As noted
earlier, there art two classes of actions subject to slightly
different procedures governing off-site transfer:  first, those
actions resulting from pre-SARA decision documents or RCRA
§7003 orders issued prior to October 17, 1986, are subject to
the May 1985 policy as updated by this revised policy; and
second, those actions resulting from post-SARA decision
document* or RCRA §7003 orders issued after October  17,  1986,
are subject to the requirements of SARA as interpreted and
expanded by this revised policy.  Although the procedures in
this policy are similar for these two classes of  actions, there
are important differences (e.g., the requirements' pertaining  to

-------
                                                          9834.11
                              -4-
releases from other units at a facility) that will be
highlighted throughout this document.

     Compliance with the revised procedures is mandatory for
removal and remedial actions.  However, there is an emergency
exemption for removals if the OSC determines that the
exigencies of the situation require off-site treatment,  storage
or disposal without following the requirements.  This exception
may be used when the OSC believes that the threat posed by the
substances makes it imperative to remove the substances
immediately and there is insufficient time to observe these
procedures without endangering public health, welfare or the
environment.  In such cases, the OSC should consider temporary
solutions (e.g., interim storage) to allow time to locate an
acceptable facility.  The OSC must provide a written
explanation of his or her decision to use this emergency
exemption to the Regional Administrator within 60 days of
taking the action.  In Regions in which authority to make
removal decisions has not been fully delegated by the Regional
Administrator to the OSC, the decisions discussed above must be
made by the Regional official to whom removal authority has
been delegated.  This emergency exemption is also available to
OSC's taking response actions under §311 of the Clean Water
Act.
III.  DEFINITIONS

A.  Release

     For the purposes of this policy, the term "release" is
defined here as it is defined by §101(22) of CERCLA, which is
repeated in 40 CFR 300.6 of the NCP, and the RCRA §3008 (h)
guidance ("Interpretation of Section 3008 (h) of the Solid Waste
Disposal Act", memorandum from J. Winston Porter and Courtney
M. Price to the -Regional Administrators, j£ Al, December 16,
1985).  To summarize, a release is any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injection,
escaping, leeching, dumping or disposing to the environment.
This includes releases to surface water, ground water,  land
surface, soil and air.

     A release also includes a substantial threat of a  release.
In determining whether a substantial threat of release  exists,
both the imminence of the threat and the potential magnitude of
the release should be considered.  Examples of situations where
a substantial threat of a release may exist include a weakened
or inadequately engineered dike wall at a surface impoundment,
or a severely rusted treatment or storage tank.
        minimis releases  from receiving units are exempt;  that
is, they are not considered to be releases under the off-site

-------
                                                         9834.11
                              -5-
policy.  De minimis releases are tnose tnat do not adversely
affect public health or the environment, such as releases to
the air from temporary opening and closing of bungs, releases
between landfill liners of 1 gallon/acre/day or less, or stack
emissions from incinerators not otherwise subject to Clean Air
Act permits.  Releases that need to be addressed by
implementing a contingency plan would not normally be
considered de minimis releases.

     Federally-permitted releases, as defined by CERCLA
§101(10) and 40 CFR 300.6, are also exempt.  These include
discharges or releases in compliance with applicable permits
under RCRA, the Clean Water Act, Clean Air Act, Safe Drinking
Water Act, Marine Protection, Research and Sanctuaries Act, and
Atomic Energy Act or analogous State authorities.

     For purposes of this policy, an interim status unit in
RCRA ground-water assessment monitoring  (under 40 CFR 265.93)
or a permitted unit in compliance monitoring (under 40 CFR
264.99) is not presumed to have a release.  EPA will evaluate
available information, including the data which led to a
determination of the need for assessment or compliance
monitoring, data gathered during assessment monitoring, and any
other relevant data-, including that gathered from applicable
compliance inspections.  A determination of unacceptability
should be made when information will support the conclusion
that there is a probable release to ground water from the
receiving unit. Finding a release can happen at any time
before, during or after an assessment or compliance monitoring
program.

     On the other hand, it is not necessary to have actual
sampling data to determine that there is a release.  An
inspector may find other evidence that a release has occurred,
such as a broken dike or feed line at a  surface impoundment.
Less obvious indications of a release might also be adequate to
make the determination.  For example, EPA could have sufficient
information on the contents of a land disposal unit, the design
and operating characteristics of the unit, or the hydrogeology
of the area in which the unit is located to conclude that  there
is or has been a release to the environment.

B.  Receiving Unit

     The receiving unit is any unit that receives off-site
CERCLA waste:

     (1)  for treatment using BOAT, including  any pre-
          treatment or storage units used  prior  to  treatment;

     (2)  for treatment to substantially reduce  its mobility,

-------
                                                           9834.1 1
                              -6-
          toxicity or persistence in the absence of a defined
          BOAT; or

      (3)  for storage or ultimate disposal of waste not treated
          to the previous criteria.

Note  that the acceptability criteria may vary from unit to
unit, and that the receiving unit may vary from transfer to
transfer.

C.  Other Units

      Other units are all other regulated units and solid waste
management units (SWMU's) at a facility that are not receiving
units.

D.  Controlled Release

      In order to be considered a controlled release, the
release must be addressed by a RCRA corrective action program
(incorporated in a permit or order) or a corrective action
program approved and enforceable under another applicable
Federal or delegated State authority.

E.  Relevant Violations

      Relevant violations include Class I violations as defined
by the RCRA Enforcement Response Policy (December 21, 1984, and
subsequent revisions) at or affecting a receiving unit.  A
Class I violation is a significant deviation from regulations,
compliance order provisions or permit conditions designed to:

      o    Ensure that hazardous waste is destined for and
          delivered to authorized facilities;

      o    Prevent releases of hazardous waste or constituents
          to the environment;

      o    Ensure early detection of such releases; or

      o    Compel corrective action for releases.

Recordkeeping and reporting requirements  (such as failure  to
submit the biennial report or failure to maintain a  copy of the
closure plan at the facility) are generally not considered to
be Class I violations.

     Violations affecting a receiving unit include  all
ground-water nonitoring violations unless the receiving unit  is
outside the waste management area which the ground-water
monitoring system was designed to monitor.  Facility-wide  Class
I violations (such as failure to comply with  financial

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                                                           9834.1 1
                               -7-
responsibility requirements,  inadequate closure plan,
inadequate waste analysis plan,  inadequate inspection plan,
etc.) that affect the receiving  unit are also relevant
violations.

     Violations of State or other Federal laws should also be
examined for relevance, considering the significance of the
requirement that is being violated; the extent of deviation
from the requirement; and the potential or actual threat to
human health or the environment.

F.  Relevant Release

     A relevant release under this revised policy includes:

     o    Any release or significant threat of release of a
          hazardous substance  (defined in 40 CFR 300.6) not
          previously excluded  (i.e., fle. minimis releases or
          permitted releases) at all units of a RCRA Subtitle c
          land disposal facility and at receiving units of a
          RCRA Subtitle C treatment or storage facility; and

     o    Environmentally significant releases of any hazardous
          substance not previously excluded at non-receiving
          units at'RCRA Subtitle C treatment and storage
          facilities-and at all units at other facilities.

Q,  Relevant Conditions

     Relevant conditions include any environmental conditions
(besides a relevant violation) at a facility that pose a
significant threat to public health, welfare or the environment
or that otherwise affect the satisfactory operation of the
facility.

H.  Responsible Agency

     Determinations of acceptability to receive an off-site
transfer of CERCLA waste will be made by EPA or by States
authorized for corrective action under §3004(u) of RCRA.
References in this document to the "responsible Agency" refer
only to EPA Regions or to States with this authority.

I.  Responsible Government Official

     The responsible government  official is that person
authorized in the responsible Agency to make acceptability
determinations under this revised policy.

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                                                         9834.1 1
                              -8-
IV.  ACCEPTABILITY CRITERIA

A.  Acceptability Criteria for Wastes Generated Under
    Decision
     CZRCLA wastes from actions resulting from pre-SARA
decision documents and pre-SARA RCRA §7003 orders may go to a
facility meeting the following criteria:

     o    There are no relevant violations at or affecting the
          receiving unit; and

     o    There are no relevant conditions at the facility
          (i.e., other environmental conditions that pose a
          significant threat to public health, welfare or the
          environment or otherwise affect the satisfactory
          operation of the facility) .

     In order to determine if there is a relevant violation,
an appropriate compliance inspection must be conducted no more
than six months before the expected date of receipt of CERCLA
waste.  This inspection, at a minimum, Bust address all
regulated units.  This inspection may be conducted by EPA, a
State or an authorized representative.  When a State conducts
the inspection, it should determine the facility's compliance
status.  Where a violation or potential violation comes to
EPA's attention (e.g., through a citizen complaint or a
facility visit by permit staff) , the Region or State is
expected to investigate whether a violation occurred as soon as
is reasonably possible.

     The May 1985 policy does not refer specifically to
releases.  Rather, a corrective action plan is required for
relevant conditions.  Therefore, in some cases, a facility
receiving CERCLA wastes from an action subject to a pre-SARA
decision document nay not need to institute a program to
control releases.  Releases will be evaluated by the
responsible Agency to determine whether such releases
constitute relevant conditions under this policy.

     The activities related to determining acceptability,
providing notice to facilities, regaining acceptability and
implementation procedures are discussed in the "Implementation11
section of this document, and apply to off -site transfers of
waste generated under pre-SARA and post-SARA decision
documents .

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                                                          9834.11
B.  Acceptability Criteria for Wastes Generated Under Post-SASA
    Decision Do
     Under this revised policy, there are three basic criteria
that are used to determine the acceptability of a facility to
receive off-site transfers of CERCLA waste generated under a
post-SARA decision document or post-SARA RCRA §7003 cleanup.
The criteria are:

     o    There must be no relevant violations at or affecting
          the receiving unit;

     o    There must be np releases from receiving units and
          contamination from prior releases at receiving units
          must be addressed as appropriate; and

     o    Releases at other units must be addressed as
          appropriate.

The last two criteria are applied somewhat differently,
depending on the type of facility.  These differences are
described below.

     1.  Criteria Applicable to All RCRA S.ub.'tiitle C Treatment.
Storage and Disposal Facilities.  The fir«t criterion that
applies to all Subtitle C facilities is that there can be no
relevant violations at or affecting the receiving unit.  As
discussed earlier, this determination must be based on an
inspection conducted no more than six months prior to receipt
of' CERCLA waste.

     A second element that applies to all Subtitle C facilities
is that there must be no. releases at receiving units.  Releases
from receiving units, except for sli minimis releases and State-
and Federally-permitted release! , must be eliminated and any
prior contamination. fro* the release must be controlled by  a
corrective action permit or order under Subtitle C, as
described in the next section.

     The final criterion that applies to all Subtitle C
facilities, is that the facility must have undergone a RCRA
Facility Assessment (RFA) or equivalent facility-vide
investigation.  This investigation addresses EPA's affirmative
duty under CERCLA §121(d)(3) to determine that there are no
releases at the facility.

     Releases of RCRA hazardous waste or hazardous
constituents and CERCLA hazardous substances are all  included
under the policy.  While the RFA need not  focus, on identifying
releases of hazardous substances that are  not  RCRA hazardous
wastes or hazardous constituents, to the extent  such  releases
are discovered in an RFA or through other  means,  they will be

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                                                           9834.1 1
                              -10-
considered the same as a release of hazardous waste or
hazardous constituents.

     o  Additional Criteria Applicable to RCRA Subtitle C Land
Disposal Facilities.  Land disposal facilities must meet
additional requirements imposed by SARA and this policy.  The
term "land disposal facility" means any RCRA facility at which
a land disposal unit is located, regardless of whether the land
disposal unit is the receiving unit.  Land disposal units
include surface impoundments, landfills, land treatment units
and waste piles.

     As stated earlier, there must be no releases at or from
receiving units.  In addition, releases from other units at a
land disposal facility must be controlled under a corrective
action program.  The RFA will help determine whether there is a
release.  In addition, land disposal facilities must have
received a comprehensive ground-water monitoring evaluation
(CUE) or an operation and maintenance  (O&M) inspection within
the last year.

     Units at RCRA Subtitle C land disposal facilities
receiving CERCLA wast* that is also RCRA hazardous waste must
meet the RCRA minimum technology requirements of RCRA §3004 (o)
Only where a facility has been granted a waiver can a land
disposal unit not meeting the minimum technology requirements
be considered acceptable for off-site disposal of CERCLA waste
that is RCRA hazardous waste.
     o  Criteria Applicable to ffub^jtle C Trffl^P*nt and Storage
Facilities.  The criterion for controlling releases from other
units does not apply to all releases at treatment and storage
facilities, as it does at land disposal facilities.  Releases
from other units at treatment and storage facilities must be
evaluated for environmental significance and  their effect on
the satisfactory operation of the facility.   If determined by
the responsible Agency to be environmentally  significant,
releases Bust be controlled by a corrective action program
under an applicable authority.  Releases from other units at
treatment and storage facilities determined not to be
environmentally significant do not  affect the acceptability of
the facility for receipt of CERCLA  waste.

     2.  Criteria Applicable to RCRA Permit-bv-Rule Facilities.
This revised policy is also applicable to facilities subject to
the RCRA permit-by-rul* provisions  in  40 CFR  270.60.  These
include ocean disposal barges or vessels, injection wells and
publicly owned treatment works  (POTWs) .  Parmit-by-rule
facilities receiving RCRA hazardous wast* must have a RCRA
permit or RCRA interim status.  RCRA permit-by-rule facilities
must also receive an inspection for compliance with applicable
RCRA permit or interim status -requirements.   In addition,  these

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                                                          9834.1 1
                              -ii-
 facilities  (and other non-RCRA facilities) should be inspected
 by the appropriate inspectors for other applicable laws.

      In general, except for POTWs (discussed below), these
 facilities will be subject to the same requirements as RCRA
 treatment and storage facilities.  That is, there can be no
 releases of hazardous waste, hazardous constituents or
 hazardous substances from receiving units.  There also can be
 no relevant violations at or affecting the receiving unit, as
 confirmed by an inspection conducted no more than six months
 prior to the receipt of CERCLA waste.  Releases from other
 units determined by the responsible Agency to be
 environmentally significant must be controlled by an
 enforceable agreement under the applicable authority.

      Criteria for discharge of wastewater from CERCLA sites to
 POTWs can be found in a memorandum titled, "Discharge of
 Wastewater from CERCLA Sites into POTWs, " dated April 15, 1986.
 That  memorandum requires an evaluation during the RI/FS process
 for the CERCLA site to consider such points as:

      o    the quantity and quality of the CERCLA wastewater and
          its compatibility with the POTW;

      o    the ability of the POTW to ensure compliance with
          applicable pretreatment standards;

      o    the POTWs record of compliance with its NPDES permit;
          and

      o    the potential for ground-water contamination from
          transport to or impoundment of CERCLA wastewater at
          the POTW.

 Based on a consideration of these and other points listed in
 the memorandum, the POTW say be deemed appropriate or
 inappropriate for receipt of CERCLA waste.
     3.  criteria Applicable to Non-gu^ j.tle  C Facilities.  In
some instances, it may be appropriate to use  a non-Subtitle C
facility for off-site transfer:  for example, PCB disposal is
regulated under the Toxic Substances Control  Act  (TSCA) ;
nonhazardous waste disposal is regulated under Subtitle D of
RCRA and applicable State laws; and disposal  of radionuclides
is regulated under the Atonic Energy Act.  At such  facilities,
all releases are treated in the same manner as releases from
other units at Subtitle c treatment and storage facilities.
That is, th« responsible Agency should make a determination as
to whether the release is environmentally  significant and, if
so, the release should be controlled by a  corrective action
program under the applicable Federal or State authority.

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                                                         9834.1 1
                              -12-
     Requirements  for the disposal of PCBs are established in
40  CFR  761.60.  Generally, these regulations require that
whenever  disposal  of PCBs is undertaken, they must be
incinerated, unless the concentrations are less than 50 ppm.
If  the  concentrations are between 50 and 500 ppm, the rule
provides  for certain exceptions that provide alternatives to
the incineration requirements.  The principal alternative is
disposal  in a TSCA-pennitted landfill for PCBs.  If a TSCA
landfill  is the receiving unit for PCBs, then that facility is
subject to the same criteria applicable if a RCRA land disposal
unit is the receiving unit; i.e., no relevant violations, no
releases  at the receiving unit and controlled releases at other
units.  PCBs at levels less than 50 ppm may be transported to
acceptable Subtitle D facilities as discussed previously.


V.   IMP? .FMTTtJTATI ON

A.  Determining Acceptability

     Acceptability determinations under the off-site policy
will be made by EPA or by states authorized for corrective
action  under §3004(u) of RCRA.  Where States have such
authority, the State may make acceptability determinations for
facilities in the  State in consultation with EPA.  Regardless
of  a State's authorization status, the Region and States should
establish, in the  Superfund'Memorandum of Agreement, mechanisms
to  ensure timely exchange of information, notification of
facilities and coordination of activities related to the
acceptability of facilities and potential selection of
facilities for off-site transfer.  The Regions and States also
need to establish  or enhance coordination mechanisms with their
respective RCRA program staffs in order to ensure timely
receipt of information on inspections, violations and releases.
These agreements can be embodied in State authorization
Memoranda of Agreement, State grant agreements, or State-EPA
enforcement agreements.

     Th« responsible government qfficial in the Region or state
in  which a hazardous waste facility is located will determine
whether the facility has relevant violations or releases which
may preclude its use for off-site transfer of CERCLA wastes.
Each Region and State should have a designated off-site
coordinator responsible for ensuring effective communication
between CERCLA response program staff and RCRA enforcement
staff within the Regional Offices, with States,  and with other
Regions and States.

     The off-site  coordinator should maintain  a  file  of  all
information on the compliance and release status of  each
commercial facility in the Region or State.  This information
should  be updated  based on the results  of State- or

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                                                          9834.11.
                              -13-
EPA-conducted compliance inspections or other information on
these facilities.

     CERCLA response program staff should identify potential
off-site facilities early in the removal action or the remedial
design process and check with the appropriate Regional and/or
State off-site coordinator(s) regarding the acceptability
status of the facilities.  If one or more facilities is
identified that has not received an inspection within the last
six months, the Regional off-site coordinator(s) should arrange
to have such inspection(s) conducted within a timeframe
dictated by the project schedule.  The CERCLA REM/FIT
contractor may conduct the inspection under the direction of
the Deputy Project Officer.  If contractor personnel are used,
the Region should ensure that such personnel are adequately
trained to conduct the inspections.

     Responsible Agencies should base their acceptability
determinations on an evaluation of a facility's compliance
status and, as appropriate, whether the facility has releases
or other environmental conditions that affect the satisfactory
operation of the .facility.  States not authorized for HSWA
corrective action may assist EPA in making the acceptability
determination by determining a facility's compliance status
(based on a State inspection) and providing this information to
EPA.  Regions and States should use the following types of
information to make acceptability determinations:

     o    State- or EPA-conducted inspections.  EPA will
          continue to assign high priority to conducting
          inspections at commercial land disposal, treatment
          and storage facilities.  Facilities designated to
          receive CERCLA waste must be inspected within six
          months of the planned receipt of the waste.  In
          addition, -land disposal facilities must have received
          a comprehensive ground-water monitoring inspection
          (CKE) or an operation and maintenance  (O&M)
          inspection within the last year, in accordance with
          the timeframes specified in the RCRA  Implementation
          Plan (RIP).

     o    RCRA Facility Assessments  fRTAsl.  To be eligible
          under this policy, a RCRA Subtitle C  facility must
          have had an RFA or equivalent facility-wide
          investigation.  The RFA or its equivalent must be
          designed to identify existing and potential  releases
          of hazardous waste and hazardous constituents  from
          solid waste management units at the  facility.

     o    Other data sources.  Other documents  -such  as the
          facility's permit application, permit,  Ground  Water
          Task Force report, ground-water monitoring data  or

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                                                           9834.1 1
                              -14-
          ground-water assessment report can contain
          information on violations, releases or other
          conditions.  Relevant information from these
          documents should also be used to determine a
          facility's acceptability to receive waste under the
          off-site policy.

B.  Notice Procedures

     EPA expects that Regions and States will take timely and
appropriate enforcement action on determining that a violation
has occurred.  Where a responsible Agency performs an
inspection that identifies a relevant violation at a commercial
facility likely to accept CERCLA wastes, within five working
days of the violation determination, the responsible Agency
must provide written notice to the facility of the violation
and the effects of applying this policy.  States not authorized
for HSWA corrective action should inform EPA of the violation
so that EPA can notify the facility of the effect of the
violation under this policy.  (See RCRA Enforcement Response
Policy for a discussion of appropriate enforcement responses
and timeframes for Class I violations.)

     When the responsible Agency determines that a relevant
release has occurred, or that relevant conditions exist, the
responsible Agency must notify the facility in writing within
five working days of that determination.  The notice must also
state the effect of the determination under this policy.  A
copy of any notice must also be provided to the non-issuing
Region or State in which the facility is located,  states not
authorized for HSWA corrective action should provide EPA with
information on releases so that EPA can determine whether•a
relevant release has occurred.

     Private parties conducting a response action subject to
this policy will need to obtain information on the
acceptability of commercial facilities.  The responsible Agency
must respond with respect to both pre-SARA and post-SARA
wastes.  Za addition, the responsible Agency should indicate
whether the facility is currently undergoing a review of
acceptability and the date the review is expected to be
completed.  No enforcement sensitive or predecisional
information should be released.

     A facility may submit a bid for receipt of CERCLA waste
during a period of unacceptability.  However, a facility must
be acceptable in order to be awarded a contract for receipt  of
CERCLA waste.

     Scope and Contents of the Notice.  The  responsible Agency
must send the notice to the facility owner/operator by
certified and first-class mail, return receipt  requested.  The

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                              -16-
within 10 calendar days from the date of issuance of the
notice, to discuss the basis for a violation or release
determination and its relevance to the facility's acceptability
to receive CERCLA wastes.  Any such meeting should take place
within 30 calendar days of the date the initial notice is
issued.  If unacceptability is based on a State inspection or
enforcement action, a representative of the State should attend
the meeting.  If the State does not attend, EPA will notify the
State of the outcome of the meeting.  The owner/opeator may
submit written comments within 30 calendar days from the date
of the notice in lieu of holding the conference.  If the
responsible Agency does not find that the information submitted
at the informal conference or in comments is sufficient to
support a finding of acceptability to receive CERCLA wastes, it
should so inform the facility orally or in writing.

     Within 10 calendar days of hearing from the responsible
government official after the informal conference or the
submittal of written comments, the facility owner or operator
may request a reconsideration of the determination by the
Regional Administrator or appropriate State official.  The
Regional Administrator or appropriate State official may use
his or her discretion in deciding whether to conduct a review
of the determination.  Such a review, if granted, should be
conducted within the 60 day period  (originating with the
notice) to the extent possible.  The review will not stay the
determination.

     The RPM, OSC or equivalent site manager must stop transfer
of waste to a facility on the 60th calendar day after issuance
of a notice.  The facility then remains unacceptable until  such
time as the responsible Agency notifies the owner or.operator
otherwise.  The off-site coordinator and the OSC/RPM should
maintain close coordination throughout the 60-day period.

     In limited cases, the responsible Agency may use its
discretion to extend the 60 day period if  it requires more  time
to review a submission.  The facility should be notified of any
extension, and it remains acceptable during any extension.

     The responsible Agency may also use its discretion to
determine that a facility's unacceptability is  immediately
effective upon receipt of a notice to that effect.  This may
occur in situations such as, but not limited to, emergencies
(e.g., fire or explosion) or egregious violations  (e.g.,
criminal violations or chronic recalcitrance) or other
situations that render the facility incapable of safely
handling CERCLA waste.

     Implementation of this notice provision does  not  relieve
the Regions or States from taking appropriate  enforcement
action under RCRA or CERCLA.

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                                                            983
                              -15-
certified notice, if not acknowledged by the receipt return
card, will be considered to have been received by the addressee
if properly sent by first-class mail to the last address known
to the responsible Agency.  The notice should contain the
following:

     o    A finding that the facility may have conditions that
          render it unacceptable for receipt of off-site waste,
          based upon available information from an RFA, an
          inspection, or other data sources;

     o    A description of the specific acts, omissions or
          conditions that form the basis of the findings;

     o    Notice that the facility owner/operator has the
          opportunity to request an informal conference with
          the responsible government official to discuss the
          basis for the facility's unacceptability
          determination under this revised policy, provided
          that such a request is made within 10 calendar days
          from the date of the notice.  The owner /operator may
          submit written comments within 30 calendar days from
          the date of the notice in lieu of holding the
          conference.

     o    Notice that failure to request an informal meeting or
          submit written comments will result in no further
          consideration of the determination by the responsible
          Agency during the 60 calendar days after issuance of
          the notice.  The responsible Agency will cease any
          transport of CERCXA waste to the facility on the 60th
          calendar day after issuance of the notice.

     o    Notice that the owner/operator nay request, within 10
          calendar days of hearing from the responsible
          government official after the informal conference or
          the submittal of written comments, a reconsideration
          of the determination by the Regional Administrator or
          appropriate State official.  The Regional
          Administrator or State official may agree to review
          the determination at his or her discretion; and

     o    Notice that such a review by the Regional
          Administrator or appropriate State official, if
          agreed to, will be conducted within 60 calendar days
          of the initial notice, if possible, but that the
          review will not stay the determination.

     The facility may continue to receive CERCIA waste for  60
calendar days after'issuance of the initial  notice.  As
indicated above, facility owners or operators may request an
informal conference with the responsible government  official

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                                                         9834.1 !
                              -17-
£_,	Procedures for Facilities with Outstanding Unaceeptability
    Determinations

     Under the original May 1985 off-site policy, facilities
determined to be unacceptable to receive CERCLA wastes were
provided with written notice and were generally afforded
informal opportunities to comment on the determination (the
latter step was not required by the policy).  Although the
Agency believes that these steps represented adequate
procedural safeguards for facilities seeking to receive CERCLA
wastes, EPA has decided to provide an additional opportunity
for review, in light of this revised policy, for facilities
with unacceptability determinations already in place on the
effective date of the revised policy.

     Any such facility that wishes to meet with the responsible
Agency to discuss the basis for a violation or release
determination and its relevance to the facility's ability to
receive CERCLA wastes, may request an informal conference with
or submit written comments to the responsible Agency at any
point up to the 60th day after the publication of the proposed
rule on the off-site policy in the Federal Register.  Such a
meeting should take place within 30 calendar days of the
request.  If the responsible government Agency does not find
the information presented to be sufficient to support a finding
of acceptability to receive CERCLA wastes, then it should
inform the facility orally or in writing that the
unacceptability determination will continue to be in force.
The facility may, within 10 calendar days of hearing from the
responsible government official after the informal conference
or submittal of written comments, petition the EPA Regional
Administrator or appropriate State official for
reconsideration.  The Regional Administrator or State official
may use his or her discretion in deciding whether to grant
reconsideration.

     Thase procedures for review of unacceptability
determinations that were already in place on the effective date
of this revised policy will not act to stay the effect of the
underlying unacceptability determinations during the period of
review.

p.  Re-evaluating Unacceotabilitv

     An unacceptable facility can be reconsidered for
management of CERCLA wastes whenever the responsible Agency
finds that the facility meets the criteria described  in the
 Acceptability Cr.iteriaM section of this policy.
n
     For -the purposes  of  this  policy,  releases will be
considered controlled  upon  issuance  of an-order or permit that

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                                                        983U
                              -18-
initiates and requires completion of one or more of the
following:  a facility-wide RCRA Facility Investigation (RFI);
a Corrective Measures Study (CMS); or Corrective Measures
Implementation  (CMI).  The facility must comply with the permit
or order to remain acceptable to receive CERCLA waste.  At the
completion of any such phase of the corrective action process,
the responsible Agency should again review the facility for
acceptability under the off-site policy using the criteria
listed in this document, and as necessary and appropriate, make
new acceptability determinations, and issue additional orders
or modify permit conditions to control identified releases.
Releases that require a determination of environmental
significance will be considered controlled upon issuance of an
order or permit to conduct an RFI, CMS or CMI, or upon
completion of an RFI which concludes that the release is not
environmentally significant.  Again, the facility must comply
with the permit or order to remain acceptable to receive CERCIA
waste.

     If the facility is determined to be unacceptable as a
result of relevant violations at or affecting the receiving
unit, the State (if it made the initial determination) or EPA
must determine that the receiving unit is in full physical
compliance with all applicable requirements.  Where a State not
authorized for HSWA corrective action makes this determination,
it should notify EPA immediately of the facility's return to
compliance, so that the Agency can expeditiously inform the
facility that it is once again acceptable to receive CERCLA
wastes.

     The responsible Agency will notify the facility of its
return to acceptability by certified and first-class mail,.
return receipt requested.

E.  Implementation Procedures

     All remedial decision documents must discuss compliance
with this policy for alternatives involving off-site management
of CERCIA wastes.  Decision documents for removal actions  also
should include such a discussion.

     Provisions requiring compliance with this policy should be
included in all contracts for response action, Cooperative
Agreements with States undertaking Superfund response actions,
and enforcement agreements.. For ongoing projects, these
provisions will be implemented es follows, taking  into
consideration the differences in applicable requirements  for
pre- and post-SARA, decision documents:

     o    Ri/FS;  The Regions shall  immediately  notify  Agency
          contractors and States that alternatives for  off-site

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          management of wastes must be evaluated against the
          provisions of this policy.

     o    Remedial Design;  The Regions shall immediately
          notify Agency contractors, the States, and the U.S.
          Army Corps of Engineers that all remedies that
          include off-site disposal of CERCLA waste must comply
          with the provisions of this policy.

     o    Remedial Action;  The Regions shall immediately
          assess the status of compliance, releases and other
          environmental conditions at facilities receiving
          CERCLA waste from ongoing projects.  If a facility is
          found not to be acceptable, the responsible Agency
          should notify the facility of its unacceptability.

     o    Enforcement;  Cleanups by responsible parties under
          enforcement actions currently under negotiation and
          all future actions must comply with this policy.
          Existing agreements need not be amended.  However,
          EPA reserves the right to apply these procedures  to
          existing agreements, to the extent it is consistent
          with the release and reopener clauses in the
          settlement.agreement.

     If the response action is proceeding under a Federal lead,
the Regions should work with the Corps of Engineers or EPA
Contracts Officer to negotiate a contracts modification to  an
existing contract, if necessary.  If the response action  is
proceeding under a State lead, the Regipns should amend the
Cooperative Agreement.

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.-*"»'«%
    >
    • i
«. we"
            UNITED STATtS ENVIRONMENTAL PROTECTION AGENCY      9 8 9 1.5 A
                          WASHINGTON. D.C. 204*0
                           JAN
                                             ". *:-irM
                                              • • •• . -  .
                                             J'-I , !  I ' I
    MEMORANDUM


    SUBJECT:



    FROM:



    TO:
Expansion of Direct Referral of Cases to the.
Department of Justice
Thomas L. Adams, Jr.
Assistant Administrator"

Regional Administrators, Regions I - X
Deputy Regional Administrators, Regions I
Regional counsels, Regions I - X
Assistant Administrators
Associate Enforcement Counsels
OECM Office Directors
                                                        - X
    I.   BACKGROUND

         During the past y«nr, my office has vorXed closely with
    the Regions, the Headguarters program offices, and the Land
    and Katural Resources Division of the U.S. Department of
    Justice (DOJ) to expand the use of direct referral of cases.
    On January 5, 1988, EPA and DOJ entered into an agreement
    which expanded the categories of civil judicial cases to be
    referred directly to DOJ Headquarters from the EPA Regional
    offices without my prior concurrence.  In entering into this
    agreement, EPA has taken a major step towards streamlining
    the enforcement process and more fully utilizing our Regional
    enforcement capabilities.

         On January 13, 1988, the Administrator signed an interim
    delegations package which will allow the Agency to immediately
    implement expanded diract raferrals to DOJ.  A final delega-
    tions package is now being prepared for Graen Border review.

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                                                           9 8915 A
     This memorandum provides guidance to EPA Headquarters
and Regional personnel  regarding procedures to follow in
implementing the  expanded direct referral agreement.  Prior
guidance on direct referrals appears in a November 28, 1983,
memorandum from Courtney Price entitled "Implementation of
Direct Referrals  for Civil cases Beginning December 1, 1983.
That guidance is  superseded to the extent that the current
guidance replaces or changes procedures set forth therein;
otherwise the 1983 document remains in effect.
II.  SUMMARY

     Effective immediately for non-CSRCLA cases, and effec-
tive April 1, 1988, for CERCLA cases, the Regions will
directly refer to the Department of Justice all civil cases
other than those listed in the attachment to this memorandum
entitled "Cases Which Hill Continue to be Referred Through
Headquarters."  This attachment lists cases in new and
emerging programs and a few, highly-selected additional
categories of cases where continued referral through EPA
Headquarters has been determined to be appropriate.  EPA
Headquarters will have 35 days to review the case simul-
taneously with DOJ.  EPA Headquarters will focus its review
primarily on significant legal or policy issues,  if major
legal or policy issues art raised during this review, EPA
Headquarters will worJc with the Region to expedite resolu-
tion.

     Attached is a copy of the agreement between EPA and DOJ,
which is incorporated into this guidance.  Many of the
procedures for direct referral of cases are adequately
explained in the agreement.  However, there are some points I
would like to emphasize.
III.  PROCEDURES

     A.  CASXS SUBJECT TO DXBZCT RZITRRAL

     The attached agreement lists those categories of cases
which oust continue to be referred through the Office of
Enforcement and Compliance Monitoring  (OECM).  All other
cases should be referred directly by the Regional Office to
DOJ Headquarters, with the following two exceptions:

     (1)  cases which contain counts which could be directly
     referred and counts which require prior EPA Headquarters
     review should be referred through EPA Headquarters, and

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                                                           98 91.5 A
      (2)   any referral which transmit* a consent decree
      should be referred through EPA Headquarters, except
      where existing delegations provide otherwise.

 If you are uncertain whether a particular case may be
 directly referred, you should contact the appropriate
 Associate Enforcement Counsel for guidance.

      B.   PREPARATION AND DISTRIBUTION OF REFERRAL PACKAGES

      The contents of a referral package (either direct to DOJ
 or to EPA Headguarters)  should contain three primary divi-
 sions:  (1)  a cover letter; (2)  the litigation report; (3)  the
 documentary file supporting the litigation report.

      The  cover letter should contain a summary of the
 following elements:

      (a)   identification of the proposed defendant(s);

      (b)   the statutes and regulations which are the basis
           for the proposed action against the defendant(s);

      (c)   the essential  facts upon which the proposed action
           is based,  including identification of any signi-
           ficant factual issues;

      (d)   proposed relief to be sought against defendant(s);

      (•)   significant or precedential  legal or policy issues;

      (f)   contacts with  the defendant(s),  including any
           previous administrative enforcement actions taken;

      (g)   lead Regional  legal and technical personnel;

      ;h)   any other  aspect of the case which is significant
          and should be  highlighted, including any extra-
           ordinary resource demands which  the case may
           require.

     A direct referral to DOJ is  ta.n^a.m,punt to a eertifi*
cation bv the Region that it  believes  the  ease is suffi-
ciently developed, for, filing  of a complaint,  and that the
Region is ready,  willing and  ftfelt to provide such leeral and
technical support as might be reasonably required to pursue
tfte ease through  litigation.

     Referral packages should be  addressed to the Assistant
Attorney General,  Land and Natural Resources Division,  U.S.
Department of Justice, Washington D.C.  20530.   Attention:

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                                                          9891.5 A
Chief,  Environmental  Enforcement  Section.  Copies of all
referral packages  should  also be  sent to the Assistant
Administrator  for  OECM  and  the  appropriate Headquarters
program offioe.

      DOJ has reaffirmed the time  frame of the Memorandum of
Understanding, dated  June 15, 1977,  for the filing of cases
within  60 days after  receipt of the  referral package, where
possible.   DOJ can request  additional information from a
Region  on a case or return  a case to a Region for further
development.   In order  to avoid these delays, referral
packages should be as complete  as possible and the Regions
should  work closely with  DOJ to develop referral packages.

      C.  IDENTIFICATION AND RESOLUTION OF SIGNIFICANT LEGAL
          AND  POLICY  ISSUES

      A  major element  in assuring  the success of the expanded
direct  referral program is  an efficient process to identify
and resolve significant legal and policy issues.  This should
be done as  early as possible to assure that unresolved issues
not delay a referral.   Early identification and resolution
will  also help the Agency to avoid devoting significant
Regional resources to preparing a litigation report for a
case which  will ultimately  be considered inappropriate for
referral.

     The procedures make  clear  that  the Regional office has
the initial responsibility  for  identification of significant
legal and policy issues.  Such  issues should be identified to
OECM and the appropriate  Headquarters program office as soon
as a decision is made to  proceed  with litigation.  All
parties should then work  to address  the issues as quickly as
possible, preferably  before the referral package is sent to
Headquarter*.

     The agreement with DOJ also  outlines procedures for
Headquarters review of  referral packages to determine whether
any significant legal or  policy issues exist which would
impact  filing, and the  process  for resolution of such issues.
If an issue surfaces  during the 35-day Headquarters review
period, OECM will  work  for  quick  resolution of the issue,
with escalation as necessary to top  Agency management.  This
should serve primarily  as a "safety  valve" for those few
issues not  previously identified, rather than as the point at
which issues are first  raised.

     Finally, if DOJ  raises a significant legal or policy
issue during its review,  OECM will work with the Region and
the Headquarters program  office to expedite resolution of the
issue.  If  DOJ makes  a  tentative  determination to return a

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                                                            9891.5*
 referral,  DOJ  will  consult  with  OECM and  th« Regional  Office
 in  advance of  returning  the referral.

      D.   CASE  QUALITY/STRATEGIC  VALUE

      OECK will evaluate  Regional performance as to the
 quality and strategic value of cases on a generic basis.
 While OECM will not request withdrawal of an individual
 referral  based on concerns  about quality or strategic value,
 it  will consider these factors during the annual audits of
 the Offices of Regional  Counsel  and  the annual Regional
 program office reviews.  Concerns relative to issues of
 quality or strategic value  will  also be raised informally as
 soon  as they are identified.

      E.  WITHDRAWAL OF CASES PRIOR TO FILING

      Cases  should be fully  developed and ready for filing at
the time they  are referred  to DOJ Headquarters.  Thus, case
withdrawal  should be necessary only  under the most unusual
circumstances.  If, after consultation with OECM, withdrawal
is determined  to be appropriate, the Regions may request that
DOJ withdraw any directly referred case prior to filing.
Copies of  the  Region's request should be sent to the Assis-
tant Administrator.for OECM and the  appropriate program
office.

      F.  MAINTENANCE OF  AGENCY-WIDE  CASE TRACKING SYSTEM

      In order  to assure  effective management of the Agency's
enforcement program, it  is  important to maintain an accurate,
up-to-date  docket and case  tracking  system.  Regional
attorneys  must continue  to  report fch« status of all eases.
including  directly  referred eases, on a regular basis through
use of the  national Enforcement Docket System.  All infor-
mation for the cass required by the  case docket system must
appear in  the  docket and be updated  in accordance with
current guidance concerning the automated docket system.


      If yen have any questions, concerning the procedures set
forth in this  memorandum, please contact Jonathan Cannon,
Deputy Assistant Administrator for Civil Enforcement, at
FTS 382-4137.

Attachment

cc:  Hon. Roger J.  Marzulla
      David  Buente
      Nancy  Firestone
     Assistant Section Chiefs

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(as:
                                                       98 91.5 A

 3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
/                WASHINGTON. DC 20460
                            24
                                                          o»»«to«
                                                             MT AMO
  Honorable Poger J. Marzulla
  Acting Assistant Attorney General
  Land and Natural Resources Division
  Washington, D.C.  20530

  Dear Roger:

       As you know, the Agency has been considering changes in
  existing procedures to increase the effectiveness of its enforcement
  program.  One change, which we discussed at our recent* meeting  with
  you, is a major expansion of the direct referral program for  civil
  judicial enforcement actions, whereby such cases are referred
  directly from the Regional Administrators to your office.

       We believe the past successes of this program and the
  increased maturity of Regional staff warrant adopting direct
  referrals as the basic mode of operation.  Thus, with your
  acceptance, we intend to utilize direct referrals to your office
  for virtually all civil cases other than those relating to certain
  new statutory authorities or emerging programs where judicial
  enforcement experience is limited.  As such programs mature,  we
  •will expand the scope of direct referrals to cover them.  In
  addition, as new programs are implemented under new statutory or
  regulatory requirements, we contemplate an initial period of
  referrals through Headquarters for these cases prior to their
  incorporation into the direct referral process.

       Based on discussions within the Agency and with your staff,
  we would propose that direct referrals cover all civil cases  but
  those listed in Attachment A.  This list includes cases in new  and
  emerging programs and • few, highly-selected additional categories
  of cases where continued referral through Headquarters has been
  determined to b« appropriate.  This would allow direct referral of
  the vast Majority of civil cases, including those which would still
  require significant national coordination to assure a consistent
  approach (such as auto coating VOC air cases).  For this reason,
  the procedures applicable to this small subset. of cases as outlined
  in the memorandum entitled "Implementing Nationally Managed or
  Coordinated Enforcement Actions:  Addendum to Policy Framework  for
  State/EPA Enforcement Agreements" dated January 4, 1985 will  remain
  in effect.

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                                                            98915IV
                                -2-
     For all hut CERCLA cases, this expansion would be effective
on January 1, 1988.  For CERCLA cases, direct referrals would take
effect on April 1, 1988.  We anticipate joint issuance by our
offices of the model CERCLA litigation report prior to that date.

     Also attached (Attachment P) is the outline of the direct
civil referral process as the Agency intends to implement it.
This outline refines current direct referral procedures by more
clearly focusing authority and accountability within the Agency.

     Under these modified procedures, the Regional Office has the
lead on direct referrals.  The Region will be solely responsible
for the quality of the referral.  In this context, quality
encompasses both the completeness and accuracy of the litigation
report and the strategic value of the case.  Any problems
involving case quality should be raised directly with the Region.

     OECM will evaluate Regional performance as to the quality
and strategic value of cases on a generic basis.  While OECM wi.ll
not request withdrawal of an individual referral on the basis of
concerns about quality or strategic value, we are committed to
working with the Regional Offices to assure that current standard*
are maintained or even exceeded in future referrals.  We welcome
your input on Agency performance to assist us in this regard.

     As the procedures detail, OECM (as well as the appropriate
Headquarters office) will continue to 'be actively involved in
identification and resolution of significant legal and policy
issues.  Such issues normally should be raised and resolved prior
to the actual referral.  If such an issue surfaces during the
35-day Headquarters review period, we will work for quick resolution
of the issue, with escalation as necessary to top Agency management.
During the period required for resolution, OOJ will treat the
referral as "on hold*.  In -the unusual circumstance where an issue
is still unresolved after 60 days from the date of referral, we
would contemplate withdrawal of the referral by the Agency pending
resolution unless a -formal "hold" letter has been submitted in
accordance with the procedures contained in the memorandum entitled
"Expanded Civil Judicial Referral Procedures" dated August 28,
1986.

     If a significant policy or legal issue is raised by DOJ during
its review, OECM remains committed to work with the Regional and
program offices to assure expedited resolution of the issue.
Obviously, these procedures are not intended to inhibit discussions
between our offices to facilitate a resolution.  In addition, if
DOJ makes a tentative determination to return a referral, we
understand that you will consult with OECM and the Regional Office
in advance of returning the referral.

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                                                           58915ft
                                -3-
     We believe this expansion in use of direct referrals represents
a major advance in streamlining the Agency's enforcement process
and appreciate your support in its implementation.   This letter,
upon your acceptance, will supersede the letters of September 29,
1983, October 28, 1985, and August 28,  1986 on this subject and
constitute an amendment to the June 15, 1977 Memorandum of
Understanding between our respective agencies.

     I appreciate your continuing cooperation and support in  our
mutual efforts to make our enforcement  process more effective.  I
hope this letter meets with your approval.   If so,  please sign  in
the space provided below and return a copy of the letter to me  for
distribution throughout the Agency.

                             S incerely,
                             Thomas L. Adams, Jr.
                             Assistant Administrator
Attachments

Approved:
Poger J. MarzullaDate
Acting Assistant Attorney General
Land and Natural Resources Division
U.S. Department of Justice

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                                                            989 1.5 Pr
         RESPONSIBILITIES  AND  PROCEDURE?  FOR  DIRECT  REFERRALS
  OF  CIVIL  JUDICIAL  ENFORCEMENT  ACTIONS TO THE  DEPARTMENT OF JUSTICE


      (1)   Regional  Offices  have  the  lead on  direct  referrals to
 the  Assistant Attorney General,  Land  and Natural Resources Division,
 Department of Justice  (DOJ);  Regions  will be responsible for
 the  quality of  referrals.

      (2)   Regions will identify  any  significant legal/policy issues
 as soon  as the  decision is  made  to proceed with litigation.  Such
 issues will be  raised  in  writing  for  consideration  by OECM and the
 appropriate Headquarters  program  office.  All  parties will attempt
 to resolve such  issues as early  as possible, preferably before the
 referral package is  sent  to Headquarters.  Regions  will also flag
 such  issues in  the  cover  memo transmitting the referral.

      (3)   At the same  time  the  referral  is sent to  DOJ, it will be
 sent  to  OECM and the appropriate  Headquarters  program office for' a
 simultaneous and independent  review  to determine whether any other
 significant policy/legal  issues  exist which  would impact filing.

      (4)   Headquarters offices  will complete their  reviews within
 35 days  of receipt  of  the referral.   Each Headquarters office will
 notify the Region in -writing  of  any  significant issues identified
 or that  no such  issues have been  identified.   A copy of this
 memorandum will  be  sent to  DOJ.   The  Headquarters offices will
 coordinate their reviews  and, to  the  extent  possible/ provide a
.consolidated response.

      (5)   If significant  issues  are  identified and  not readily
 resolved,  Headquarters (the Assistant Administrator for OECM),
 after consultation  with the program  office Assistant Administrator,
 may  request the  Regional  Administrator to withdraw  the case.  If
 the  Regional Administrator  and  the Assistant Administrator for OECM
 (and, as applicable, the  program  office  Assistant Administrator)
 are  unable to agree on the  appropriate resolution of the issue, the
 issue would be  escalated  to the  Deputy Administrator.

      (6)   If a  significant  issue  is  not  resolved within 60 days of
 the  date.of referral,  the case  will  normally be withdrawn pending
 resolution unl«»« an appropriate "hold"  letter is sent to DOJ in '
 accordance with the procedures  contained in  the memorandum entitled
 "Expanded  Civil  Judicial  Referral Procedures"  dated August 28, 1986
 (document  GM-50 in  the General  Enforcement Policy Compendium.)

      (7)   Headquarters will NOT request  withdrawal  of  a referral
 package  for any of  the following reasons:

           — overall quality  of  referral package
           — strategic value  of  case
           — adequacy  of  documentation

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                                                            98915*
                                -2-
     (8)  If DOJ makes a tentative decision to return a  referral
to EPA, it will consult with the Regional Office and  OECM  prior
to making a final decision to return the case.

     (9)  Headquarters will evaluate on a generic  basis  (e.g.,
trends or repeated concerns) the quality/strategic  value of  a
Region's referrals.  Concerns relative to issues of quality  or
strategic value will be raised informally as soon  as  they  are
identified.

     (10) Headquarters oversight will be accomplished primarily
through annual program and OGC/OECM reviews, or ad hoc reviews
as problems are identified in a given Region.

Note;  Where a referral also transmits a signed consent  decree
       for Headquarters approval, the procedures applicable  to
       processing settlements shall apply in lieu of  these
       procedures.

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                                                           98915A
  CASES WHICH WILL
             TO BE REFERRED THROUGH HEADQCARTgPfi
ALL MEDIA!
Parallel Proceedings  —  Federal  civil enforcement
matters where a criminal investigation of the same
violations is pending
RCRA/CERCLA;
UST enforcement

Enforcement  of   RCRA
technology regulations
                                        land   ban  and  minimum
               Enforcement  of administrative  orders for  access
               and  penalty  cases  for  failure  to  comply  with
               requests for access  (Section 104)
Referrals  to  enforce  Title  III  of  SARA,
Community Right-to-Know provisions
                                                              the
TSCA/FIFRA;
Referrals  to compel  compliance  with or  restrain
violations  of   suspension   orders   under   FlfRA
Section 6(c)

FIFRA  actions  for stop  sales,  use,   removal,  and
seizure under Section 13

Referrals  to  enforce  Title  III  of  SARA,   the
Community Right-to-Know provisions

Injunctive  actions  under   Section  7   of   TSCA
(actions  for  injunctive relief  to  enforce  the
regulations  promulgated  under  Section 17   or
Section 6 could be directly referred)
WATER;
Clean Water Act  pretreatment  violations  —failure.
of  a   POTW  to  implement  an  approved   local
pretreatment program

Clean Water Act  permit violations relating  to  or
determined  by biological  methods  or  techniques
measuring whole effluent toxicity

PWSS  cases  to   enforce   against  violations   of
administrative orders which were not  issued  using
an adjudicatory hearing process

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                                                           98 9 1.5 A
 WATER
 fcontd.)        Cases  brought  under   the  Marine   Protection,
                Research and Sanctuaries  Act (MPRSA)

                UIC cases1


 AIR;            Smelter cases
     1  The  ten   case*   referred  to  date  indicate  that  the
regulations  raise  interpretive  issues  of continuing  national
significance.    There also  appears  to  be a  need  for  greater
experience at  gathering  the .facts  necessary to prove violations
and support appropriate relief.  For this reason, the first 3 uic
cases  from  each Region  shall be  referred  through Headquarters.
Once the  Associate Enforcement Counsel  for OECM determines that
the Region has completed three successful  referrals, the Region
nay proceed to refer these cases directly to DOJ.

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               UNITED STATES ENVIRONMENTAL PROTECTION AGENC'
                                G'CN j : 20460
                              APR   T ;OO
                                                       9831.6

MEMORANDUM

SUBJECT:  /Interim E.inal /Guidance Package on Funding CERCLA State
          i knforpewent Actions at NPL Sites
J / i It* "'"
Ut whistfo
FROM:      Ut wistfon
          • /Assistant Administrator

TO:       "Regional Administrators
           Regions I - X

     On October 1, 1986, the Office of Solid Waste and Emergency
Response issued two separate guidances on  funding States  in
support of their enforcement actions at CERCLA National
Priorities List (NPL) sites.  One guidance covered activities
related to negotiations with and administrative and  judicial
enforcement actions against potentially responsible  parties
(PRPs) ; while the other covered activities related to the
oversight of PRP response actions.

     This package includes updated guidances which supersede the
October 1, 1986 guidances.  The revised guidances on funding
State enforcement and PRP oversight incorporate relevant
comments, as well as consider various issues that have arisen
since passage of SARA.  Therefore, along with this memorandum  the
attached package is made up of -the following components:

     o    Guidance on CERCLA funding of State enforcement
          actions at National Priorities List sites  (9831. 6a);

     o    Guidance on CERCLA funding of Potentially  Responsible
          Party Oversight by States at National Priorities List
          Sites (9831. 6b);

     o    Cost Estimates for Budgeting State Enforcement
          Activities  (9831. 6c); and

     o    Recommended Procedures for Headquarters/Regional Review
          and Concurrence of Initial Enforcement Cooperative
          Agreements  (9831. 6d).

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                                                       9831.6

     Along with this "interim final" package, the Grants
Administration Division  (GAD), in conjunction with OSWER, has
developed an assistance-related manual entitled "Guide for
Preparing and Reviewing  Superfund Cooperative Agreements"
(September 1987).  This  manual is to.be used when reviewing and
awarding actual cooperative agreement applications submitted by
States.  In the near future, this manual will include a model
enforcement cooperative  agreement application, which will be
representative of the scope and content expected from the States.
A copy of this manual can be obtained by contacting your Regional
Assistance Administration Unit (AAU).

     This package and GAD's guidance, along with the Office of
Emergency and Remedial Response's manual on "State Participation
in the Superfund Program," the "Interim Guidance on State
Participation in Pre-Remedial and Remedial Response" (OSWER, July
21, 1987), the regulation on "Intergovernmental Review of
Environmental Protection Agency Programs and Activities" (40 CFR
Part 29), the "General Regulation for Assistance Programs"  (40
CFR Part 30), the guidance on "State Procurement under Superfund
Remedial Cooperative Agreements (OERR, March 1986) and the
regulation on "Procurement Under Assistance Agreements"  (40 CFR
Part 33), should form the basis for preparing and administering
cooperative agreements concerning CERCLA State-lead enforcement
actions at NPL sites.

     In addition, the upcoming revisions to the National
Contingency Plan and the draft "Guidance on Preparing a Superfund
Memorandum" of Agreement" (SMOA)" jointly issued by OERR and OWPE
on October 5, 1987 will  provide EPA Regional offices and States
with a specific understanding of the extent and manner in which
States should involve themselves in CERCLA enforcement and
remedial responses and the extent of involvement and oversight
expected of EPA during State conduct of such responses.

Furthermore, some issues outlined during review of the previous
funding guidances will be further addressed in future guidance on
CERCLA State enforcement.  Please see the attachment to this
memorandum for those issues and the direction to follow.

     There are several additional policy points to follow when
implementing this guidance package.

1.   states should clearly understand that funding under the
     guidances is related to encouraging or compelling PRPs to
     undertake traditional response activities to clean  up  a
     site (such as negotiations for remedial  investigations,
     feasibility studies, remedial designs and remedial  actions)

-------
                                                       9831.6

     and to conduct necessary technical, administrative and
     enforcement activities during their oversight of the PRPs'
     response (such as oversight in the field,  compiling
     administrative records, preparing remedy decision documents
     and enforcing the provisions of settlement agreements).   At
     this time,  EPA will not provide funding solely to litigate
     claims such as to recover past costs or natural resource
     damages.

2.   Although the guidances do not specifically address
     funding States during Federal facility response actions
     at National Priorities List sites, funding by EPA will
     nonetheless be considered under the following
     situations.  Management assistance funding may be
     provided to support State involvement in pre-remedial
     activities and activities leading to signature and
     execution of an agreement under Section 120(e) of
     CERCLA.  If the State is a. signatory to the agreement.
     the agreement should spell out the State's
     responsibilities for the site, including oversight
     responsibilities.  Funding through a cooperative
     agreement may then be available to conduct these
     oversight responsibilities.  In the absence of an
     oversight role spelled out in the agreement, management
     assistance funding may be available to ensure adequate
     State involvement during the facility's response
     action.  If the State is not a, signatory to the
     agreement.  oversight activities will be conducted by
     EPA.  However, management assistance funding may still
     be available to ensure adequate State involvement.
     Furthermore, EPA's current position is to not fund
     States for litigating or taking any enforcement actions
     against a Federal facility.  Finally, per Section
     120(g) of CERCLA, EPA must retain lead responsibility
     with respect to its Section 120 authorities over
     Federal facility sites on the National Priorities List.
     As such, Federal facility sites cannot be designated as
     "State-lead."

3.   Cost documentation of State intramural and extramural
     activities continues to be a critically important
     aspect of the Superfund program.  As such, the
     Financial Management Division's soon to be published
     "State Superfund Financial Management and Recordkeeping
     Guidance" should be clearly understood and followed by
     the Regions and States for all enforcement-related
     cooperative agreements developed and  funded under this
     guidance package.  FMD's guidance replaces Appendix U,

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                                                       9831.6

     "Cost Documentation Requirements for Superfund
     Cooperative Agreements" of the Manual "State
     Participation in the Superfund Program."  The need for
     cost recovery, particularly regarding PRP oversight,
     should be considered in drafting cooperative
     agreements.

4.   Provisions outlined in the funding guidances may be
     alternatively addressed and agreed to in the SMOA.  Of
     course, actual funding is done only through a cooperative
     agreement.  The Region and State should discuss the best
     approach to ensuring compliance with the provisions outlined
     in the guidances.  However, the Region should ultimately
     decide  whether reiteration or expansion of SMOA provisions
     should be made in the cooperative agreement application.
     When making this determination, the Region should employ
     such criteria as the level of State experience and
     capabilities, and past State performance in the CERCLA
     cleanup program.

5.   Per Section 104(d)(l)(A) of CERCLA, as amended by SARA, EPA
     must make a determination on cooperative agreement
     applications within 90 days of receipt.  Since the 90 day
     clock begins when the Regional Assistance Office receives
     the linal application from the State, the Regional program
     office must ensure that the application is properly logged
     in and dated by the Assistance Office.  See the "Interim
     Guidance on State Participation in Pre-Remedial and Remedial
     Response" for further direction on the 90 day review
     requirement.

6.   EPA Headquarters does not intend to be routinely involved in
     reviewing and concurring on enforcement cooperative
     agreement applications.  However, some Headquarters
     involvement in the initial applications received by the
     Region is necessary to ensure the guidance is interpreted
     correctly and consistently.  Therefore, at least the first
     application received in 'each Region under the negotiation
     and litigation guidance and under the oversight guidance
     should be submitted for review and concurrence to the
     Director, CERCLA Enforcement Division, Office of Waste
     Programs Enforcement.   (See the section entitled "Recommened
     Procedures for Headquarters/Regional Review of Initial
     Enforcement Cooperative Agreements" for the suggested
     approach.)  After having gone through this mutual
     Headquarters and Regional reyi«w, the Regions will only need
     to keep Headquarters informed of subsequent applications
     through the SCAP and by providing a copy of awarded

-------
                                                       9831.5

     agreements.  Management assistance cooperative agreements
     need not be submitted to Headquarters for review prior to
     their award.  Finally, per the program delegation,
     enforcement cooperative agreements will be awarded by the
     Regional office.

7.   Beginning in Fiscal Year 1988, State yearly funding
     requirements for activities outlined in this guidance
     package must be included in the Region's Superfund
     Comprehensive Accomplishments Plan (SCAP).   The Region and
     State should be working closely during the SCAP development
     process to ensure that State funding requirements are
     adequately addressed in the final plan.

8.   The Administrator is highly interested in improving the
     role and relationship of State Attorneys General
     offices in the Superfund program.  In this regard,
     during development and review of enforcement
     cooperative agreements and SMOAs, the Regional office
     should ensure that relevant responsibilities of the
     State Attorney General are adequately addressed in the
     document.  At the request of the Administrator, my
     office is also looking into the possibility of
     earmarking some Core Program funds for relevant State
     Attorney General GERCLA program activities.

     As you go about developing cooperative agreement
applications to support CERCLA State enforcement actions, please
feel free to contact Tony Diecidue on FTS(202)-382-4841 or the
appropriate Regional Coordinator in OWPE  for  assistance on the
various policy or site-specific issues that may need resolution.

cc:  Director, Waste Management Division
       Regions I, IV, V, VII and VIII
     Director, Emergency and Remedial Response Division
       Region II
     Director, Hazardous Waste Management Division
       Region III and VI
     Director, Toxics and Waste Management Division
       Region IX
     Director, Hazardous Waste Division
       Region X
     Regional Counsel, Region I - X
     Regional Assistance Management Contact,  Region I - X
     Regional CERCLA Branch Chief, Region I - X
     Regional CERCLA Enforcement Section  Chief, Region I - X

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                                                       9831.6

                   ISSUES ON DRAFT GUIDANCE ON
             FUNDING  CERCLA  STATE  ENFORCEMENT  ACTIONS


     The following issues received on the draft guidance on
funding CERCLA State enforcement actions will be further
addressed in future guidance on State involvement in CERCLA
enforcement actions.   However, here is policy direction on
proceeding with these issues.

1.   Must the State outline their enforcement authorities for the
     entire action, or only the authorities for performing a
     particular action (such as PRP searches or negotiations)?

     When the State submits a cooperative agreement application,
     it is assumed the site has already been designated a State-
     lead enforcement site.  It is also assumed the State will
     carry the enforcement response as far along as possible and,
     therefore, should spell out the authorities to be used by
     the State.  Since part of the initial classification process
     includes whether adequate enforcement authorities are
     available, the State would only need to reiterate them in
     the application.  For example, a letter from the Attorney
     General outlining these authorities could be prepared and
     the same letter could be used for each cooperative
     agreement.  A Superfund Memorandum of Agreement  (SHOA) could
     also suffice in ensuring that adequate enforcement
     authorities are available.

2.   Is there any intent to require States to follow the CERCLA
     Section 122 settlement provisions?

     The procedures spelled out in Section 122 of CERCLA are
     related to settlements pursued by the Federal government and
     their use is subject to sound discretion at a particular
     site (See Section 122(a)).  While States can avail
     themselves of equivalent procedures, they are not authorized
     by EPA to use Section 122 when pursuing enforcement actions
     under their own authorities.  However, in pursuit of
     consistency with the intent of CERCLA, State settlements
     will need to be consistent with certain Section  122
     procedures and related EPA Superfund enforcement policy and
     guidance when negotiating and settling with PRPs uj&ej: 4
     cooperative agreement.  These include giving notice and
     establishing negotiation time frames  (Section 122 (e));
     ensuring adequate public participation  (Section  122(d)); and
     requiring that covenants not to sue contain a "reopener"
     provision (except for a special covenant not to  sue, a djfe
     minimis settlement, or in an extraordinary circumstance)
     (Section 122(f)).  Other Section 122 provisions  clearly do

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                                                       9831.6

     not apply to State-lead enforcement sites,  such as mixed
     funding (Section 122(b)),  since provisions  such as this can
     only be implemented through settlements with the Federal
     government.   Therefore, please note that the negotiation and
     litigation funding guidance requires a State assurance on
     this issue.1

3.    There is nothing in the guidances on EPA participation in
     State-lead enforcement actions.  There is no discussion of
     having, or letting, EPA sit in on negotiations or
     participate  in setting up  the strategy for  such
     negotiations.   Should this not be a reciprocal requirement?

     The draft guidance on preparing a SMOA discusses, in the
     enforcement  section, that  when developing an agreement the
     Region and State should consider and address to what extent
     each party will be involved in the other's  negotiations with
     PRPs. Furthermore, the Region and State continue to have the_
     discretion of also preparing site-specific  enforcement
     agreements.   The extent of involvement should be based on
     various factors.  These include the level of confidence in
     and past experience with the State, and site-specific
     factors such as the complexity or national  significance of
     the response action.  Consistency of the remedy with Section
     121 of CERCLA, the upcoming revisions to the NCP and
     applicable EPA guidance,  and assurance that it will be
     implemented correctly through an enforceable pleading are
     the most important concerns.  Also, EPA and the States
     should not be duplicating the others activities at sites.
     Regardless of the extent of Regional involvement in State-
     lead enforcement negotiations, settlements  at these sites
     would typically be two party agreements  (State and PRPs)
     under State authorities.
            Since the reauthorization of CERCLA, EPA has issued
            several policies concerning Federal government
            implementation of the various Section 122 settlement
            procedures.  Because these policies are designed for
            Federal settlements, they contain numerous requirements
            that are irrelevant to or need not be adhered to by
            States during their enforcement actions.  Also,
            consistent with Section 122(a), EPA and th« State can
            jointly waive use of the procedures outlined in the
            Section.  EPA is developing additional guidance to
            specifically address and clarify tht relation of the
            Section 122 settlement procedures and related policy to
            State enforcement actions.

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                                                  9831.6

Is EPA responsible for the final selection of remedy at
State-lead enforcement sites?  Should EPA participate in the
development of the remedy at these sites even if the work
will be done by the PRPs under a State settlement agreement?
what authority does EPA have if the State believes its
remedy is consistent with the NCP and EPA disagrees?

The upcoming revisions to the NCP state that unless a
State Record of Decision (ROD) or other decision
document is concurred with and adopted in writing by
EPA, EPA shall not be deemed to have approved of the
State decision.  The NCP and upcoming guidances will
set forth the procedures for and intent of EPA's
concurrence and adoption of the remedy.  States must
recognize that if their procedures and remedies are not
consistent with EPA's (including RI/FSs and Section 121
of CERCLA), it should not be expected that EPA will
approve the remedy.  With or without EPA's approval,
however, States nay decide to proceed under their own
authorities and funding.  In turn, EPA has the
authority under CERCLA to proceed with its own
enforcement action or attempt to intervene prior to a
State settlement with or litigation against PRPs.
However, one purpose of establishing SMOAs and seeking
EPA concurrence and adoption of the remedy is to avoid
such problems at the remedy selection stage by
outlining roles and responsibilities up front,
including the extent of support agency participation in
lead agency negotiations' and other legal efforts, and a
process for informally resolving disputes  (i.e., short
of the courts).  Furthermore, please note that when- EPA
is paying for these activities undey a. cooperative
agreement. the State is assuring that their oversight
of PRP technical activities and their selection of a
remedy for the site will be consistent with CERCLA, as
amended by SARA, the NCP and applicable EPA guidance.

The guidance assumes that States can issue standard notice
letters.  Should careful examination of standard notice
letter content be done to ensure that a State letter
provides adequate notice for future State or Federal claims,
and to ensure that the State letter is sufficient to EPA and
DOJ attorneys?  Should there be a requirement that EPA
approve the general form notice letter the State intends to
use?

It has always been assumed that States would attempt to
notify PRPs of their potential liability and offer  them an

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                                                  9831.6

opportunity to conduct necessary response actions at State-
lead enforcement sites.  These activities are to be
performed under State authorities (note that statutory
authority is generally not required for these activities).
However, as stated in question #2 above, States will need to
be consistent with the Federal procedures for notifying PRPs
and establishing negotiation timeframes when funded under a
cooperative agreement.  Any review,  consultation and/or
concurrence role for EPA with regard to State notice letters
should be worked out during the SMOA or CA development
process.

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      CERCLA FUNDING OF
 STATE ENFORCEMENT ACTION AT
NATIONAL PRIORITIES LIST SITES

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                                                                         983l.6a
                               CERCLA FUNDING OF
                         STATE ENFORCEMENT ACTIONS
                      AT NATIONAL PRIORITIES LIST SITES
PURPOSE

      The purpose  of this guidance is to assist EPA Regional offices and States on
funding, under a CERCLA cooperative agreement (CA), of State search and
notification, negotiation, and administrative and judicial enforcement efforts to
encourage or compel hazardous waste site cleanups by potentially responsible parties
(PRPs).

BACKGROUND

      In its opinion of February 12, 1986, regarding CERCLA funding of State
enforcement efforts, the Office of  General Counsel reconsidered and expanded upon
a July 20, 1984, opinion to allow limited assistance for identification of PRPs and
gathering of evidence, remedial investigations and feasibility studies (RI/FS) to
support State or Federal enforcement actions, and oversight of RI/FSs and remedial
designs (RD) conducted by PRPs.   The February 12, 1986, opinion allows such
activities as oversight of PRP-conducted remedial actions (RA), reporting to the
public on private party response actions, negotiation, and administrative and judicial
enforcement to encourage  or compel PRPs to initiate response actions at National
Priorities List (NPL) sites.  The Superfund Amendments and Reauthorization Act of
1986 (SARA) also confirms this interpretation by expanding the activities eligible for
CA funding under Section 104(d)(l) of CERCLA.

      The intent of funding for tnese activities is to successfully secure the greatest
number of private  party cleanup actions possible.  In achieving this goal. States will
need to be consistent with EPA's Superfund enforcement policies and procedures.
This is necessary to ensure that site cleanups:

      o    Are consistent  with CERCLA, as amended by SARA, and the National
          Contingency Plan.(NCP);

      o   Are conducted in a timely  manner and allow for deletion from the NPL;
          and

      o   Enable  EPA and States  to conduct future CERCLA cost recovery actions.

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                                                                          983l.6a

GUIDANCE

      Cooperative  Agreement funding for PRP searches, issuance of notice letters,
negotiation, or administrative and judicial enforcement will onl\ be provided at  NPL
sites that have been designated as State-lead enforcement.  In determining lead
designation. Regional offices and States should use the criteria outlined  in the
EPA/Association of State and  Territorial Solid Waste Management  Officials
(ASTSWMO) policy memorandum of October  2,  1984.  In addition, EPA Headquarters
is in the process of developing additional classification guidance based upon SARA
and the upcoming revisions to the NCP.  Prior to drafting or accepting a
cooperative agreement application for review and award, the criteria should  be
applied to  the site. This includes sites currently designated  as State-lead
enforcement and sites States are seeking  to place in the State-lead enforcement
category.  Once the designation  is made and a State requests CA funding, the
Region should pay particular attention to the itemized budget submitted along with
the application. The budget should be carefully reviewed to ensure that adequate
resources and  staff expertise are devoted to the site.  Along with these
considerations, the conditions and requirements outlined in this guidance must be
incorporated  into  the CA application prior to  award.

      This  guidance does not preclude the Regions from including  additional
enforcement-related conditions in the application,  if warranted.  Furthermore, it is
imperative that applicable provisions outlined  in Appendix F of the EPA manual
State Participation in the Suoerfund Program be incorporated into  each  CA
application. See Attachment A for those applicable provisions and sample language
for the enforcement provisions.

      State annual funding requirements  for activities outlined in this  guidance must
be included in the Region's Superfund Comprehensive Accomplishments Plan (SCAP).
The Region and State should be working closely during the  SCAP  development
process to ensure that State funding requirements are adequately addressed in the
final plan.  When  developing CA applications  for these activities, the  State Project
Officer (SPO) should work closely with the Remedial Project Manager (RPM) and
Regional Counsel  to ensure that the application is sufficient and complete.  SPOs
should also coordinate  closely with their Headquarters Regional Coordinator in the
Office of Waste Programs Enforcement (OWPE).  The Regions will continue to be
responsible for awarding the CA.
I.     Funding State PRP Searches at Pre-NPL and NPL Sites

      If EPA and the State agree to designate sites as State-lead enforcement, the
State  should identify  PRPs. In order to conduct PRP searches in a timely manner,
EPA  may fund States to perform this activity prior to proposal of a site on the
NPL.  Candidate sites for this funding are those undergoing a listing site
investigation or  the NPL scoring quality assurance process.  This  will enable PRP
searches  to be completed within six months of proposal of the site on the NPL.

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A.   Condition; for  Funding State PRP Searches L'ndir a Cooperative Agreement

     In order  to receive funding for PRP searches, the State  must agree to include
:!ic following  information in its CA application  and be prepared  to make the
following assurances in the  final CA.  Except  where noted, the following
information and assurances  must be certified by the State's Governor. Attorney
General, designee. or appropriate State agency. In States where these authorities
overlap among different State offices, all applicable signatures will be required.

     1.    The State  must  provide a letter outlining the State enforcement
          authorities that provide the basis for  initiating enforcement actions
          against PRPs (e.g., administrative or judicial enforcement) which can
          result in securing the necessary response.

     2.    The State  must  designate a lead agency RPM and lead  State attorney for
          the site.'  Also, if multiple State offices are funded for a site, one must
          be designated as the lead State agency.

     3.    The State  must  agree that PRP searches will be consistent with relevant
          EPA Superfund enforcement policy and guidance.

     4.    The State  must retain, in a central file, all documents  produced,
          collected,  received, or issued as part of the PRP search funded through
          the CA. These  documents may be required for subsequent State or
          Federal enforcement action, or future cost recovery activities. Examples
          of such documents  include:

          a.   Site  histories (such as ownership of property through titles or
               property sales; operations at the facility; and compliance or non-
               compliance  with environmental  regulations);

          b.   Title searches and summary of findings;

          c.   Lists of names, addresses (past and current, if applicable), and phone
               numbers of PRPs identified (such as owners, operators, generators,
               and  transporters); volume and nature of substances sent to the site
               and  volumetric ranking;

          d.   Files on each PRP with  evidence (including  responses to information
               requests)  of shipments to the site, amount shipped and the fact that
               hazardous substances were shipped.

          e.   Corporate histories,  status, and information  relating to the
               availability of PRPs  to pay for  or perform a cleanup, including
               financial  assessments and insurance information  as available; and
     The same RPM and attorney can be designated the lead for more than one
     site, if a multi-site CA is developed by and awarded to the State.

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                                                                           983i  6a
                Conclusions and recommendations for pursuing additional leads or
                enforcement actions (such as unconfirmed PRPs thai could not be
                conclusively linked to the site).
B.    Fundable PRP Search Tasks

      This section outlines specific fundable tasks for conducting PRP searches.
These tasks parallel those conducted  by EPA.

      I.    Identifying site owners or operators during a preliminary assessment and
           site inspection.

      2.    Conducting searches to examine legal descriptions and owners of property
           (e.g., title searches),  government files, reports, and court files.   Also, to
           examine technical information on the types of waste  disposed of and
           methods of disposal used.

      3.    Identifying initial contacts (such as site owners or operators) to gather
           documents regarding names and addresses of other parties involved and
           their contributions to the site.

     4.    Reviewing information provided by initial contacts, which may lead to the
           discovery  of additional PRPs.  This information may include documents
           such as customer lists, generator invoices, bills and receipts, and owner
           or  operator records and manifests.

     5.    Conducting on-site investigations to identify additional PRPs.  These
           investigations may include an inventory of drums, and wastes found on
           site, review of abandoned records, vehicles, buildings, etc.

     6     Conducting off-site investigations to provide  new leads and identify
           additional PRPs.  These investigations may include interviews with local
           police, fire and health department personnel,  local residents. Chamber of
           Commerce staff, bank personnel,  and local industry representatives.

     7.    Issuing information request letters.

     8.    Reviewing and .retrieving information from various data bases.
           Commercial data bases may provide corporate  information about PRPs,
           technical information on  specific  chemicals, ownership of property, and
           operations and employees of various firms.

     9.    Verifying and documenting the various types of information collected
           during the PRP search process. This effort may include establishing a
           data base to maintain this information and information collected through
           notice and information request letters.

     10.   Identifying PRPs  by name and address, indicating the volume  and nature
          of substance contributed  by each  PRP and ranking PRPs by volume.

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                                                                      9831.63

     11.   Securing site access to conduct any of the above mentioned tasks. No
          EPA funds may be  used to compensate site owners for  access.


     Community  relations tasks are also allowable activities under a CERCLA CA.
Specifically. States should contact appropriate local officials and  community
representatives if there is any possibility of citizen interest or concern about
potential State enforcement actions.  This should also include conducting community
interviews to assess public concerns,  irarn about additional information on the site
and PRPs, and prepare a community relations plan.  Chapter 6 of the guidance
entitled Community Relations in Suoerfund • A Handbook should be consulted when
requesting CA funds for, and  when developing, such tasks.


II.   Funding State Issuance of Notice Letters and Negotiation Activities^ at NPL
     Sites

     If EPA  and  a State agree to designate sites as State-lead enforcement, the
State should attempt to notify PRPs  of their potential liability and  attempt to
secure  their commitment for site cleanup. Therefore, general notice as well as
special notice to PRPs and negotiation for PRP conduct of the RI/FS and/or  RD RA
should begin  within the time frames established by Section 122 (e) of CERCLA and
relevant  EPA Superfund enforcement policy and guidance.

     In order to issue  notice letters within a reasonable timeframe  upon proposal of
a site on the  NPL, EPA may fund States to  prepare notice letters prior to such
proposal.  Candidate sites for  this funding are  those having received a preliminary
HRS of 28.5 or better and planned to undergo NPL quality control  review.


A.   Conditions for Funding State Issuance of Notice Letters and Negotiations
     Under a Cooperative Agreement

     In order to receive funding for issuing notice letters and negotiating with
PRPs, the State must  agree  to include the following information  in its CA
application and be prepared to make the following assurances in  the final CA,
Except where noted, the following information and  assurances must be certified by
the State's Governor. Attorney General, designee,  or appropriate  state agency.  In
States where these authorities overlap among different State offices, all applicable
signatures will be required.

     1.   The State must provide a letrer outlining the State enforcement
          authorities  that provide the basis for initiating enforcement actions
          against PRPs (e.g.,  administrative or judicial enforcement) which can
          result  in securing the necessary response.

     2.   The State must designate a  lead agency RPM and lead State attorney for
           the site. Also, if multiple State offices are funded for a site, one  must
          be designated as the lead State agency.

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3.    The State must conclude successful negotiations by entering  into an
      enforceable order or decree, or by issuing some other enforceable
      document requiring the PRP to conduct an RI 'FS and/or RD RA  in
      accordance  v.ith CERCLA. as amended by SARA (including remedies
      consistent with Section  121 cleanup standards), the NCR, and applicable
      EPA policv and guidance.

4.    The State must agree to conduct negotiations and develop settlements
      consistent with CERCLA Section 122 procedures on  notice and  negotiation
      time frames (Section  122(e)), ensuring adequate public participation
      (Section I22(d)) and requiring that covenants not to sue contain a
      "reopener" provision (except for special cownants, d£ minimis settlements
      or extraordinary circumstancesKSection 122(0).

5.    For issuing notice letters and negotiating with PRPs  to conduct  an  RI'FS.
      the State must agree that the issuance of notice letters and negotiations
      will be consistent with  CERCLA, as amended by SARA, the NCP, and
      relevant EPA Superfund enforcement policy and guidance.

      o     If a settlement is  not reached within 90 days after notice  to PRPs,
           the State must notify EPA and recommend either continuing with
           negotiations or other enforcement actions or requesting initiation of
           a State- or Fund-financed RI/FS.  (If negotiations  have begun prior
           to awarding the CA, the State must notify EPA within 90 days after
           award.)  If EPA and the State determine that negotiations should
           not continue, the  State  may request that the CA be amended to
           redirect remaining funds  toward a Fund-financed RI/FS (subject to
           availability of funds).  If EPA and the State determine that
           negotiations should continue, the State must provide a revised time
           schedule and date for conclusion of negotiations.

6.    For issuing notice letters and negotiating with PRPs  to conduct an
      RD/RA, the State must agree that, the issuance of notice letters and
      negotiations will be consistent with CERCLA, as amended by SARA,  the
      NCP, and relevant EPA Superfund enforcement policy and  guidance.

      o     If a negotiated settlement is  not reached within 120 days  after
           notice to* PRPs, the "State must notify EPA and recommend either
           continuing with negotiations, proceeding with  other enforcement
           actions, or establishing a  schedule for conducting a Fund-financed
           cleanup.  (If negotiations have begun prior to awarding the CA, the
           State must notify  EPA  within 120 days after award.)   If EPA and
           the State determine that negotiations should not continue, the State
           may request that the CA  be  amended to redirect remaining funds
           toward other administrative or judicial enforcement activities
           (subject to availability of funds).  If EPA and  the State determine
           that negotiations should continue, the State must provide  a revised
           time  schedule and date for conclusion of negotiations.

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                                                                     9831.63

      The State must compile and maintain an administrative record as required
      under Section 113 of CERCLA, the  NCP and applicable EPA guidance.

8.     The State must conduct a community relations program in accordance
      with  the NCP and applicable EPA guidance.

9.     In the event that the State determines after execution of the  CA that
      State laws or other restrictions  prevent the State from acting  consistent
      with  CERCLA, as amended by SARA, the State must agree to promptly
      notify and consult wjih EPA regarding the use of such laws or other
      restrictions'1.

10.   The State must retain in a central file ail documents produced, collected,
      received, or issued as part of its  issuance of notice letters and
      negotiations with PRPs.  These documents may be required for subsequent
      State or  Federal enforcement action  or future cost recovery activities.
     Examples of such documents include:

     a.    Lists of names of PRPs receiving notice letters or information
           request letters and copies of the  letters;

     b.    Information and data collected as a result of PRP searches and
           notice letters or information request letters (waste-in lists;
           volumetric  rankings; etc.);

     c.    Descriptions of the .problems at the site  (such as the site history,
           environmental and public health concerns, and previous response and
           enforcement activities);

     d.    Negotiation strategies or goals and specific response actions sought;

     e.    Listings of PRPs  involved in the negotiations (such as names.
           addresses and phone numbers, and other possible PRPs and reasons
           they were considered or rejected);

     f.    Expected and actual time schedules and dates for conclusion of
           negotiations (such as first negotiation session with PRPs, etc.); and

     g.    Copies of the final order or decree and  accompanying documents
           (RI/FS or RD/RA statement of work and work plans).
In the course of negotiating the CA, consistency with Section 121 and Section
122 (notice, public participation and covenants not to sue) should be  assured.

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B.    Fundable \'on;e Letter and Negotiation Tasks

      This section  outlines specific  fundable  tasks for conducting negotiations with
PRPs.  These tasks parallel those conducted b\ EPA.

      I.    Various tasks may be conducted to notify PRPs.  Fundable tasks include:

           a,    Identifying recipients of notice letters by reviewing the results of
                PRP searches.

           b.    Drafting notice letters to  be issued to PRPs. This task may include
                tailoring EPA's model notice letter to address the specifics of the
                case or  to request  specific responses from various PRPs.

           c.    Mailing notice letters. This task also includes ensuring knowledge
                that the letters are received by PRPs (e.g., certified return receipt)
                and that replies are sent to  the State.

           d.    Receiving and sorting out response letters and reviewing and
                answering questions  raised by PRPs.

           e.    Maintaining copies of notice letters issued,  responses received, and
                other documents relevant to the site.

           f.    Releasing the names of notified PRPs, in order for all notified
                parties to begin organizing among themselves in anticipation of
                negotiations with the State.  Releasing the names of notified PRPs
                to other interested parties may be done in accordance with State
                Freedom of Information laws and requirements.

           g.    Constructing other relevant information (such as a summary of
                volumetric contribution) to  help in organizing PRPs and preparing
                for negotiations with PRPs.

     2.    Various tasks may be conducted during negotiations with PRPs. These
           tasks can be broken down into three broad areas:  project management,
           technical tasks, and legal {asks.  (Project management and technical staff
           may perform parts of some legal  tasks, and legal  staff may perform parts
           of some project management tasks.)  Fundable tasks for  these three areas
           include:

           a.    Analyzing information provided  by PRPs in response to notice letter
                and information requests  (such as development of transactional data
                bases using waste-in  lists, volumetric rankings, and type of
                involvement and years of association with the site).

           b.    Reviewing relevant and applicable policies  and guidance documents.

           c.    Analyzing, reviewing, and providing comments on work plans,
                samples, studies, and other  scientific and technical data.

           d.    Assessing site conditions.

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                                                                           983 i.62

           e.    Defining technical points open for discussion (such as number and
                 placement of samples; scope of the investigation;  remedial options
                 to be considered;  cleanup standards and techniques to be met; and
                 operable units to be addressed).

           f.    Reviewing and responding to PRP  proposals and/or counter proposals.

           g.    Identifying applicable and relevant and appropriate requirements
                 (ARARs).

           h.    Establishing a negotiation team (legal and technical members) and
                 defining each team member's role,  authority, and responsibilities.

           i.     Holding meetings  to follow up  the  notification  process.

           j.     Performing legal research (such as  applicable laws, need for
                 precedent, etc.)  to support the  negotiation effort.

           k.    Negotiating with PRPs (including jje. mjnimis parties, et al.).

           1.     Analyzing settlement alternatives.

           m.    Monitoring strengths and weaknesses of State and PRP positions and
                 evidence to be taken to trial should the negotiations fail.

           n.    Preparing draft orders and decrees  for PRP review and comment.

           o.    Assessing PRP comments on the draft  order and preparing and
                 issuing  the final order.

           p.    Meeting with EPA and/or expert witnesses to discuss the draft order
                 and  other aspects of the  enforcement action.

           q.    Developing a payment plan for fines or cash settlements.

     Community relations tasks are also allowable activities under a CERCLA CA.
The State is responsible for conducting a  community relations program during
negotiations with .PRPs.  The State  should refer  to Chapter 6 of  the guidance
entitled Community. Relations in Suoerfund - A Handbook when requesting CA funds
for, and when developing, such a program.

III.  Funding Sate Administrative and Judicial  Enforcement Actions it NPL Sites

     If EPA and a State agree to designate cites as State-lead enforcement, and
private parties do not agree willingly to clean up the site, the State may pursue
administrative or judicial enforcement action against PRPs to compel cleanup (in

State or Federal Court, as appropriate). These actions are considered while an
RI/FS is being completed in order  to plan, in the event that a settlement  is not
reached, whether the  design is to be financed by the Fund, whether to issue a

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                                                                           983l.6a

unilateral order and or whether to file a judicial action for  injuncme  relief
Therefore. EP\ *ill not fund these actions unless the steps  outlined above have
been completed or  pursued.  Where this situation occurs, EPA may fund the State
for these actions against the PRPs.

      However. EPA win consider other factors  that justify  or require  pursuing
administrative  or judicial enforcement to compel performance of the RI/FS.  For
instance. States as part of their enforcement process may typically issue unilateral
administrative  orders either to  initiate the  negotiation process (tantamount to a
notice) or at the termination of negotiations where  no settlement is reached (i.e.,
PRPs failed to execute or sign  the enforcement document).  EPA may  fund the tasks
necessary to  prepare and issue  the unilateral administrative order.  The State must
outline the factors  for pursuing this method of enforcement in  the CA application.
A.    Conditions for Funding State Administrative or Judicial Enforcement Actions
      Under a Cooperative Agreement

      In order to receive funding from EPA for administrative or judicial
enforcement actions against PRPs, the State must agree to include the following
information in  its  CA application  and be prepared to make the following assurances
in the final CA.  Except where noted, the  following information and assurances
must  be certified by the State's Governor,  Attorney General, designee, or
appropriate State agency. In States where these authorities overlap among different
State  offices, all applicable signatures will  be required.

      1.    The State must provide a letter outlining the State enforcement
           authorities that provide the basis for initiating enforcement actions
           against PRPs (e.g., administrative or judicial) which can result in securing
           the  necessary response.

      2.    The State must designate a lead agency RPM and lead State attorney for
           the  site.  Also, if multiple State offices are funded for a  site, one must
           be designated as the lead State  agency.

      3.    The State must issue a unilateral order and/or file a judicial action
           requiring the PRP to conduct an RI/FS or RD/R.A in accordance with
           CERCLA, 'as amended by SARA (including remedies consistent with Section
           121  cleanup standards), the NCP and applicable EPA policy and guidance.

      4.    The State must agree to conduct negotiations and develop settlements
           consistent with CERCLA Section 122 procedures  or. notice and negotiation
           time frames (Section 122(e)), ensuring adequate pufc.»c participation
           (Section I22(d)) and requiring that covenants not  to sue contain a
           "reopener* provision (except for special covenants. & minimis settlements
           or extraordinary circumstancesXSection  122(0).

      5.    The State must compile and maintain an administrative record as required
           under Section 113 of CERCLA, the NCP and applicable EPA
           guidance.

                                         10

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                                                                 9831.63

     The State must conduct a community relations program in accordance
     with the NCP and applicable EPA  guidance.

     In the event that the State determines after execution of  the CA that
     State laws or other restrictions prevent the State from acting consistent
     with CERCLA. as amended by SARA, the State must agree to promptly
     notify and consult with EPA regarding the  use  of such laws  or  other
     restrictions'.

     The State must retain in a central file ail documents produced,  collected.
     received, or  issued as part of its administrative or judicial enforcement
     against PRPs. These documents are generally required as part of an
     action to compel PRPs to take a response action or for cost recovery.
     Examples of such documents include:

     a.    Descriptions of problems at the site (such as the site history,
          environmental  and health concerns, and responses and enforcement
          activities preceding  litigation).

     b.    Objectives of  litigation (such  as relief and/or monetary penalties
          sought).

     c.    Statutory provisions upon which the case is being built (such as
          State and/or Federal statutes).

     d.    Factors leading to the need for litigation (such as the legal history
          of the case and other elements of the case).

     e.    Proposed litigants and  evidence of use  of  the site (such as names.
          how they are  linked to the site, and other possible litigants and
          reasons they were considered  or rejected).

     f.    Potential problems with the litigation (such as any anticipated
          defenses, problems with consistency with NCP, and reasons for
          urgency in proceeding  with litigation).

     g.    Summary of the contents of the documentary file (such as technical
          documents, administrative decisions, correspondence, pleadings.
          documentation and  minutes of negotiations and technical  discussions
          with PRPs, and other relevant documents).

     h.    Previous settlement discussions and proposals made by the State
          and/or PRPs.
In the course of negotiating the CA, consistency with Section 121 and Section
122 (notice, public participation and covenants not to sue) should be  assured.
                                  11

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                                                                           9831.6a

           i.    Expected and actual time schedule for litigation (such as motion for
                first discovery, first summary  judgment, first deposition, etc.l.

           j.    Copies of final judgments or consent decrees and accompanying
                documents.
B.    Fundabte Administrative or Judicial Enforcement Tasks

      This section outlines specific fundable tasks for administrative or judicial
enforcement against PRPs. These tasks parallel those conducted by EPA.

      Various  tasks  may be conducted during an administrative or judicial
enforcement action  against PRPs.  These tasks can be broken down into three broad
areas:  project management, technical tasks, and legal tasks. (Project management
and technical staff  may perform parts of some legal  tasks,  and  legal staff may
perform parts  of some project management tasks.) Fundable tasks for  these three
areas  include:

      I.    Analyzing information provided by PRPs in response to notice letters and
           information requests (such as development of transactional data bases
           using waste-in lists, volumetric rankings, and type of involvement and
           years of association  with  the site).

      2.    Reviewing relevant and applicable policies and  guidance documents.

      3.    Analyzing, reviewing, and providing comments on work plans, samples,
           studies,  and other scientific and technical data.

      4.    Analyzing previous negotiations and PRP proposals  and/or counter
           proposals.

      5.    Defining technical points to be addressed during litigation (such as
           technical and scientific data supporting selection of a particular remedy,
           cleanup  standard and/or technique and endangerment, and release of other
           elements of proof under State law).

      6.    Compiling and evaluating testimony and depositions. Hiring expert
           witnesses through the State's procurement procedures.

      7.    Identifying ARARs.

      8.    Developing a litigation team (legal and technical members)  and  defining
           each team member's  role, authority, and responsibility.

      9.    Organizing all documents collected and generated throughout the case.

      10.   Performing legal research (such as legal history and theory  of the case
           and statutes upon which to proceed).
                                          12

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                                                                           9831.63

      11.   Reviewing proceedings of previous negotiations and settlement offers.

      12.   Conducting discovery and deposition tasks.

      13.   Preparing pleadings, motions, and  briefs.

      14.   Preparing expert witness testimony.

      15.   Analyzing potential defenses to the case.

      16.   Assessing settlement alternatives.

      17.   Preparing pretrial order.

      18.   Trying the case in court, if a pretrial settlement cannot be reached.
     Community relations tasks are also allowable activities under a CERCLA CA.
The State is responsible for conducting a community relations program during an
administrative action or litigation against PRPs. The State should refer to Chapter
6 of the  guidance entitled Community Relations in Sunerfund - A Handbook  when
requesting CA funds for,  and when developing, such a program.
                                          13

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                                                                          983!.6a

                                  ATTACHMENT A

             PROVISIONS SPECIFIC TO STATE-LEAD ENFORCEMENT
            ACTIONS AT CERCLA NATIONAL PRIORITIES LIST SITES


      State-lead enforcement Cooperative  Agreements should contain the provisions
found in Sections 1 (A-F) and 2 (B-M. O-T) of Appendix F of the  EPA manual  State
Participation in the_Superfund Program.  In  addition, they should also contain the
following provisions.

A.    State Enforcement Authorities

      In providing CERCLA funds  for State-lead enforcement PRP  search,
notification, negotiation, and administrative  and judicial enforcement, the  State has
shown it possesses the  legal authorities to  pursue such actions to ensure
performance of the response action. EPA asks  the State to outline these authorities
in the Cooperative Agreement application.

      "The State possesses  the legal  authorities to pursue enforcement actions to
      ensure performance  of the private party response action.  The  State agrees to
      use these authorities if private parties are unwilling to  implement the
      necessary response action.  These legal authorities are outlined in a letter
      from [official providing letter), dated [	] and is attached to the
      Cooperative Agreement application."

B.    Designation of Lead Site Project Manager and  Lead  Attorney/Coordination
      Among Appropriate State Offices

      CERCLA enforcement actions are a joint effort, involving individuals  with
project management, technical, and legal expertise.  To this extent, enforcement
actions require close coordination and cooperation between technical experts and
attorneys to ensure successful results.   EPA asks the State  to identify State
officials who will represent this expertise  and ensure that the various State offices
involved in the enforcement action  are involved in the development and execution
of the Cooperative Agreement.

      "The State has designated Iname. title,  address, phone number! to serve as lead
      agency remedial project manager for the [sijej.  The State has  designated
      fname. title, address, phone number! to serve as lead attorney  for the fsitel.
      All appropriate State offices involved in the execution of the enforcement
      action planned for the (site] have been coordinated with  in developing this
      Cooperative Agreement application.'
                                         14

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                                                                         9831.63

C.    Consistent with EPA Policy and Guidance1

      In pursuing enforcement actions against PRPs.  the State must assure that such
actions are consistent  v-uh CERCLA. as amended by SARA, the NCP, and relevant
EPA Superfund  enforcement policy and guidance.

For PRP Searches:

      "In conducting PRP searches funded by this Cooperative Agreement, the State
      agrees to ensure that such activities will be consistent with relevant EPA
      Superfund  enforcement policy and guidance, including but not limited to:

           o    U.S.  EPA, Office  of Waste Programs Enforcement, Potentially
                Responsible Partv Search Manual. August 27, 1987."

For Issuance of Notice Letters and  RI TS Negotiations with PRPs:

      "In issuing  notice letters and conducting RI/FS negotiations funded by this
      Cooperative Agreement, the State agrees to ensure that such activities will be
      consistent with CERCLA, as amended by SARA, the National Contingency Plan,
      and  relevant EPA Superfund enforcement policy and guidance, including but not
      limited to:

           o    U.S.  EPA, Office  of Solid Waste and Emergency Response, Interim
                Guidance .on Notice  Letters. Negotiations and Information Exchange.
                October 19, 1987;

           o    U.S.  EPA, Office  of Solid Waste and Emergency Response, Interim
                Guidance on Potentially Responsible Party Participation in Remedial
                Investigations and Feasibility Studies, (pending);

           o    U.S.  EPA, Office  of Emergency and Remedial Response, Guidance on
                Remedial Investigations under CERCLA and Guidance on Feasibility
                Studies under CERCLA. June 1985."

For Issuance of Notice Letters and  RD/RA Negotiations with PRPs:

     "In issuing  notice letters and conducting RD/RA negotiations funded by this
     Cooperative Agreement, the State agrees to ensure that such activities will be
     consistent with CERCLA, as amended by SARA, the National Contingency Plan,
     and  relevant EPA Superfund enforcement policy and guidance, including but not
     limited to:

           o    U.S.  EPA, Office of Waste Programs Enforcement, Interim Guidance
                on Notice Letters. Negotiations and Information Exchange.
                October 19, 1987;
     The policies cited in this section should not be construed as all inclusive or
     entirely relevant to  each site-specific enforcement action.  Other policies that
     may exist or be developed in the future may also need to be referenced in a
     Cooperative Agreement.  In  addition, some of the policies  listed above are
     currently being revised (such as the RI/FS and RD/RA guidances):

                                        15

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                                                                        983l.6a

           o    U.S. EPA. Office of Solid Waste and Emergency Response. Office of
                Enforcement and Compliance Monitoring,  U.S. Department of Just.cs.
                Interim CERCL.A Settlement Policy. December 5.  1985 (to the extent
                not superseded by Section 122 of CERCLA);

           o    U.S. EPA, Office of Emergency and Remedial Response.
                Suoerfund Remedial Design and Remedial  Action  Guidance.
                Revised, June 1986."

For Administrative and Judicial Enforcement Actions against PRPs:

     "In conducting administrative and judicial enforcement actions funded by this
     Cooperative Agreement, the State agrees  to ensure that such activities will be
     consistent with CERCLA, as amended by SARA, the  National Contingency Plan.
     and relevant EPA Superfund enforcement policy and guidance, including but not
     limited to:

           o    U.S. EPA, Office of Solid Waste and Emergency Response,
                Office of Enforcement and Compliance Monitoring, U.S.
                Department of Justice, Interim CERCLA Settlement Policy.
                December 5, 1985 (to the extent not superseded by Section 122
                of CERCLA);

           o    U.S. EPA, Office of Emergency and Remedial Response, Suoerfund
                Remedial Design and Remedial Action Guidance.  Revised, June  1986.'

D.   Consistency with Section 122 of CERCLA

     State  negotiations and settlements will need to be consistent with Section 122
of CERCLA and relevant EPA Superfund enforcement policy and guidance when
State enforcement actions are funded under a cooperative agreement.

     "In conducting negotiations  and developing settlements funded by this
     Cooperative Agreement, the State agrees to be consistent with CERCLA Section
     122 procedures on giving notice and establishing negotiation time frames
     (Section 122(e));  ensuring adequate public participation (Section 122(d)); and
     requiring that covenants not to sue contain a "reopener" provision (except  for
     a special covenant not to sue. a'jje. minimis settlement, or in an extraordinary
     circumstance) (Section 122(f))."

E.   Time Frame for Negotiations

     When conducting negotiations funded under a CERCLA  Cooperative Agreement,
the State must attempt to settle with PRPs within a  specified time frame.  EPA
asks the State to notify EPA if a settlement is not reached within this time frame
and to  recommend whether negotiations should continue with the PRPs.

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                                                                          983!.6a

 For  RTFS Negotiations:

      "If a settlement is not  reached within 90 days after notice to potentially
      responsible parties for their conduct of the RI.-'FS. the State agrees to notify
      EPA and recommend either (1) continuing with negotiations or other
      enforcement actions or (2) requesting initiation of a State or Fund-financed
      RI.'FS.  (If negotiations have begun prior to award of the Cooperative
      Agreement, the State agrees to notify EPA within 90 days after award.) If
      EPA and the State determine that negotiations should not continue, the State
      may  request that the agreement be amended to redirect remaining funds toward
      a  Fund-financed RI/FS (subject to availability of funds). If EPA  and  the State
      determine that negotiations should continue, the State agrees to provide a
      revised time schedule and  date for conclusion of negotiations."

For  RD'RA Negotiations:

      "If a settlement is not  reached within 120 days after notice to potentially
      responsible parties for their conduct of the RD/RA, the State agrees to notify
      EPA and recommend either (1) continuing with negotiations, (2) proceeding
      with other administrative or judicial enforcement actions, or (3) having EPA
      establish a schedule  for conducting a  Fund-financed cleanup.  (If negotiations
      have begun prior to award of the Cooperative Agreement, the  State agrees to
      notify EPA within  120 days after award.)  If EPA and  the State determine that
      negotiations should not continue, the  State may request  that the agreement be
      amended to redirect remaining funds toward other administrative or judicial
      enforcement actions. If EPA and the State determine that negotiations should
      continue, the State agrees to provide  a revised time schedule and date for
      conclusion of  negotiations.*

F     Formalizing Successful Negotiations,  and Administrative or Judicial Enforcement
      Actions

      In pursuing negotiations with or enforcement actions against PRPs, the State is
required to culminate successful actions by entering into an enforceable  order, or
decree or issuing some other enforceable document requiring the PRP to conduct the
response action in accordance with the NCP and relevant EPA policy and guidance.

      The State agrees to culminate a successful [type of enforcement action! by
      issuing a (type of enforceable' document! for the (name  of sitel. requiring the
      private parties to conduct the response action  in accordance with CERCLA, as
      amended by SARA, NCP, and applicable EPA policy and guidance.*

G.    Administrative Record

      The State agrees to compile and  maintain an administrative record consistent
      with Section 113 of CERCLA, as amended by SARA, the National Contingency
      Plan, and relevant EPA policy and guidance, including  but not limited to:

      o     U.S. EPA, Office of Waste  Programs Enforcement/Office of Emergency
           and Remedial  Response, Administrative Records for Decisions on Selection
           of  CERCLA Response  Actions. May 29,  1987.

                                         17

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      The record shall contain information upon which  the decision on selection of
      the response  action was based.  The record shall be maintained at or near the
      site, and a cops shall be maintained at the fname of State lead aeencv
      receding ihe cooperative agreement!.

H.    Community Relations

      "The State agrees to prepare and implement a community relations plan for
      this site.  The State further agrees to comply  with the National Contingency
      Plan and all relevant EPA policy and guidance on community relations,
      especially Chapter 6, Community Relations in Suoerfund: A Handbook when
      implementing the community relations plan throughout the response."

I.     Deviation From CERCLA. As Amended Bv SARA

      State laws or other  restrictions may prevent States from acting consistent with
CERCLA, as amended by SARA. In those  instances, the State must agree to
promptly notify and consult with EPA  regarding the use of such laws or  other
restrictions.

      "Where State laws or other restrictions  may prevent the State from acting
      consistent with CERCLA, as amended by  SARA,  the State agrees to promptly
      notify and consult with EPA regarding the use of such laws  or other
      restrictions."

J.     Maintaining Enforcement-Related Documents in a Central File

      The State agrees to maintain a central file of ail documents  produced,
      collected, received, or issued as part of the enforcement activities funded
      under  this Cooperative  Agreement. The State understands that these
      documents may be  required for subsequent State or Federal enforcement action
      or future cost recovery activities."

K.    Changes to Scope of Work

      The State must agree to notify EPA in the event that State or PRP  plans or
actions substantially  change the scope of work for tasks funded under the CA.

      The State agrees to notify EPA in the event  that State or PRP plans or
      actions substantially change the scope of work for tasks funded under this
      Agreement. -Prior to issuance, such changes will be submitted to EPA for
      review to ensure technical adequacy and compliance with the terms of this
      Agreement."
                                         18

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             CERCLA FUNDING OF
POTENTIALLY RESPONSIBLE PARTY OVERSIGHT BY
   STATES AT NATIONAL PRIORITIES LIST SITES

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                                                                        983l.6b
                              CERCLA FUNDING OF
              POTENTIALLY RESPONSIBLE PARTY OVERSIGHT BY
                 STATES AT NATIONAL PRIORITIES LIST SITES
 PURPOSE

      The purpose of this guidance is to assist EPA Regional offices and States in
 funding, under a CERCLA cooperative agreement (CA), of State oversight of
 potentially responsible parties (PRP) conducting remedial investigations (RI),
 feasibility studies (FS). remedial designs (RD), and remedial actions (RA) at  sites on
 the National Priorities List (NPL).  The guidance also discusses funding of States
 during an EPA-lead enforcement response action.
BACKGROUND

     The Office of General Counsel has concluded that CERCLA funding may be
provided to States to support a broad range of enforcement-related response
activities.  This is in addition to State-conducted, Fund-financed  RI/FS activities to
support enforcement actions at NPL sites. The reason is that such activities are
included under CERCLA Section 104(b) and consequently are eligible for CERCLA
funding.'

     The role of States in oversight of a PRP-conducted RI/FS and  RD/RA depends
on whether the State or EPA negotiated and entered into the administrative order
(AO) or consent decree (CD). If the State negotiated the AO or CD, then the State
has the  lead for oversight of the PRP's work.  If" EPA negotiated  the AO or CD,
then EPA has  the lead for oversight of the PRP's work.  When  EPA  has the lead
for oversight,  the State may receive management assistance funding in order to
review PRP response activities at the site.

     The State may also, under certain circumstances, undertake  various, mutually
agreed upon oversight activities at Federal lead sites.  These circumstances  include
Federal CERCLA Section 104 and 106 settlements with PRPs in which the State is a
participant, as authorized under Section 121(f) of CERCLA, as amended by SARA,
and State oversight that can result in a more effective and timely response to PRP
implementation activities.  Furthermore, States may be used in  place  of EPA
contractors to  meet the qualified third party oversight requirements outlined in
Section  104(aXl) of CERCLA, as amended by SARA.
     L.A. DeHihns, Authority to Use CERCLA to Provide Enforcement Funding
     Assistance to States. July 20, 1984, and  February 12, 1986.

                                        19

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                                                                     983 1.6b
GUIDANCE
     In determining whether to fund a State to provide oversight of a PRP response
action, the Region should employ  the same standard of review it uses to evaluate
coniractors providing oversight for the Regional office.  The Region should also
assess the  State's ability to meet the classification criteria outlined in the  EPA and
Association of State and Territorial Solid Waste Management Officials (ASTSV-'MO)
policy  memorandum of October 2, 1984, entitled "EPA/State Relations in
Enforcement  Actions  for Sites on  the National Priorities List."  In addition. EPA
Headquarters is in the process of  developing additional classification guidance based
upon SARA and the upcoming revisions to the National Contingency  Plan (NCP).  In
reviewing a CA for award, the criteria should  be applied  to the site.  Once the
State requests CA funding, the Region should pay particular attention to the
itemized budget submitted along with the CA application.  The budget should be
carefully reviewed to ensure that  adequate resources and staff  expertise are devoted
to the  site. Along with these considerations, the conditions and requirements
outlined in this guidance must be incorporated  in the CA application prior to award.

     The guidance explains  the conditions for awarding funds  and  lists the fundable
tasks for each activity.  This guidance does not preclude the Regions from including
additional enforcement-related conditions in the application, if warranted.
Furthermore, it is imperative that applicable provisions outlined in Appendix F of
the EPA manual State Participation in the Superfund Program  be incorporated in
each CA application.  See  Attachment A for those applicable provisions and sample
language for  the enforcement provisions.

     State yearly funding requirements for activities outlined  in this guidance  must
be included in the Region's Superfund Comprehensive Accomplishments Plan (SCAP).
The Region and State should be working closely during the SCAP development
process to ensure  that State funding requirements are adequately addressed in the
final plan. When developing CA applications for these activities, the State Project
Officer (SPO) should work closely with  the Remedial Project Manager (RPM) and
Regional Counsel to ensure that the application is sufficient and complete.  SPOs
should also coordinate closely with their Headquarters Regional Coordinator in the
Office of Waste Programs Enforcement (OWPE). The Regions will continue to be
responsible for awarding the CA.

I.    Funding State Oversight of PRPs - State Enforcement Response

     If a.State successfully  negotiates to have the PRPs conduct the RI/FS or
RD/RA, it will be in the State's interest to oversee their work. States should
obtain a commitment from PRPs to pay for their RI/FS oversight costs when
negotiating with PRPs, prior to either requesting funds from EPA or drawing down
on monies already awarded  in a CA. The  PRPs may want to reimburse States for
their oversight costs at the end of each  year or at the  completion of the response
action, rather than providing the  monies up front.  In this case. States should
assure initial funding of oversight of the PRPs' RI/FS. This may be done using
State funds or EPA funds, to the  extent available. Where  EPA funds are used,
States  may pay back EPA upon receipt of  the PRPs' money, or EPA may  receive the
money directly from  the PRPs.

                                      20

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                                                                    983! 6b


     There may be situations where post-SARA State  RI  FS negotiations and
settlements by States do not include a PRP commitment to pay for oversight. The
Regional office must remind the States  of the CERCLA Section 104(a)(l) requirement
and closely scrutinize State capability or willingness to seek oversight costs  before
proceeding with a CA.  Ordinarily, Regions will not fund State oversight costs when
States have not obtained such costs in an order or decree.  In addition. States
should arrange for PRPs to pay for their RD7RA oversight as well when negotiating
with PRPs.


A.I  Conditions for Funding Under a Cooperative Agreement:  Oversight of Rl TS

     In order to receive funding from EPA for oversight of a PRP-conducted RI/FS.
the State must include the following information in its CA application and  be
prepared to make  the following assurances in the final CA.  Except where noted.
the following information and assurances must be certified by the State's Governor,
Attorney General, designee, or appropriate State agency.

     1.    The State must have issued or negotiated an enforceable order, decree, or
          other enforceable document requiring the PRP to conduct an RI/FS in
          accordance with  CERCLA, as amended by SARA, the NCP, and  applicable
          EPA policy and guidance.  A copy of the order must be included in  the
          CA application.*1

     2.    The State must provide a letter outlining the State enforcement
          authorities that resulted in the issuance or  negotiation of the
          enforcement document.

     3.    The State must assure that it believes the PRPs have the technical,
          managerial, and  financial capability to conduct the RI/FS.

     4.    The State must assure that it will prepare a Record of Decision  (ROD) or
          other decision document and select a remedy that is consistent with
          CERCLA, as amended by SARA, the NCP,  and relevant EPA policy and
          guidance.

     5.    The State  must conduct a community relations program in accordance
          with the NCP and applicable EPA guidance.0
b    If the enforcetble document is a three party agreement (EPA, State, and
     PRP), the CA need only cite it since a copy should already be in EPA's
     possession.
c    See the document Community Relations in Suoerfund: A Handbook, especially
     Chapter 6 which deals with community relations during  enforcement actions.

                                      21

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                                                                         983l.6b
     6.    The State must compile and maintain an administrative record as required
           under Section 113 of CERCLA, the N'CP and applicable EPA guidance.

     7.    The State must agree to the following general principles concerning PRP
           payment of RI FS oversight costs, which may be spelled out in the
           State's order or decree:

           a.    The State will document its  oversight costs.

           b.    PRPs  will reimburse  EPA for its  oversight costs  (either directly or
                through the State).

           c.    PRPS  agree that they are liable to EPA under Section 107  of
                CERCLA for unpaid oversight costs,  plus associated  enforcement
                costs and interest  from the date of demand by EPA or State.

     8.    In the event that the State  determines after execution  of the CA that
           State laws or other restrictions prevent the State from  acting consistent
           with CERCLA, as amended by SARA, the  State must  agree to promptly
           notify and consult with EPA regarding the use  of such laws or other
           restrictions'1.

A.2  Conditions for Funding Under a Cooperative Agreement:  Oversight of RD/RA

     In order to receive funding from EPA for oversight  of a PRP-conducted
RD/RA, the State must include the following, information, in  its CA application and
be prepared to  make the following assurances in the final CA.  Except where noted,
the following information and assurances must be  certified by the State's Governor.
Attorney General, designee,  or appropriate State agency.

     1.    The State must have issued or negotiated an enforceable order, decree, or
           other enforceable document requiring the PRP  to  conduct  an RD/RA in
           accordance  with CERCLA, as amended by SARA, the NCP, and applicable
           EPA policy and guidance.  A copy of the order must be included in the
           CA  application.*

     2.    The State must provide a  letter outlining the Sttte enforcement
           authorities that resulted in the issuance or negotiation of the
           enforcement document.
     In the course of negotiating the CA, consistency with Section 121  and Section
      122 (notice, public participation and covenants not to sue) should  be assured.
     If the enforceable document is a three party agreement (EPA, State, and PRP),
     the CA need only cite it since a copy should already be in EPA's possession.

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                                                                     983l.6b
     3.    The State must assure that it believes the PRPs have the technical.
          managerial, and financial capability to conduct  the RD'RA.

     4    The State must submit a ROD or other  decision  document consistent with
          CERCLA. as amended by SARA, the NCP and relevant EPA policy  and
          guidance. This documentation must be included in the CA application or
          be submitted as a condition to drawing down on oversight funds.(
          Funding will not be allowed unless EPA formally concurs in writing with
          the State's ROD or other decision document.

     5.    The State must conduct a community relations program in accordance
          with CERCLA, as amended by SARA, the NCP and applicable EPA
          guidance.

     6.    In the event that the State determines after execution  of the CA that
          State laws or other restrictions prevent  the State from  acting consistent
          with CERCLA, as amended by SARA, the State  must agree to promptly
          notify and consult with  EPA regarding the  use of such laws or other
          restrictions'.
B.I   Fundable Oversight Tasks:  RI/FS

     In preparing and reviewing the CA application, it might be helpful for States
and Regions to consider oversight as consisting of review tasks, field-related tasks,
and enforcement tasks.  A community relations program is also an essential aspect
of the  response action. States should attempt to specify, in the enforceable
document, the roles and responsibilities  of the PRP as distinguished from the roles
and responsibilities of the State in each of these major activities.

     1.   Review tasks conducted by the State include:

          a.    Review preliminary planning documents;

          b.    Review and comment on scope of work and work plans;
f    If the enforceable document is a three party agreement (EPA. State, and PRP).
     the CA oeed only cite the ROD since a copy should already be in EPA's
     possession.
     In the course of negotiating the CA, consistency with Section 121 and Section
     122 (notice, public participation and covenants not to sue) should be assured.
                                       23

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      c.    Review and comment on standard operating procedures (such as
           quality assurance  quality  control plans, sampling plans, health and
           safety plans, and data management plans);

      d.    Review and comment on draft RI reports;

      e.    Review final RI reports;

      f.    Review and discuss FS objectives;

      g.    Review and comment on draft FS;

      h.    Review final FS;

      i.    Prepare the proposed plan for remedial action and draft and final
           ROD;

      j.    Compile and respond to public comments on the RI/FS and proposed
           plan for remedial action;

      k.    Review PRP monthly progress reports;

      1.    Organize and participate  in technical meetings on the RI/FS with
           the  PRPs, PRP  contractors, and/or EPA.

2.    Field-related task's conducted by the State  include:11

      a.    Conduct environmental monitoring (e.g., air, water);

      b.    Take and analyze split  samples or confirmatory  samples;

      c.    Provide on-site presence/inspection of PRP field activities.

3.    Enforcement  tasks conducted by the State  include:

      a.    Track deliverable schedules and submission dates spelled out in the
           enforcement document;

      b.    Initiate  enforcement action for non-compliance  with terms and
           conditions of the enforcement document.

4.    Community relations  tasks conducted by the State include:

      a.    Notify local newspapers of site activities  planned or underway;
The amount and scope of field-related tasks to be funded by EPA during
oversight should be negotiated on a case-by-case basis.

                                    24

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                                                                          9831 6t


           b.    Conduct discussions wjth the affected communits  in the locale ot' the
                site,

           c.    Prepare community relations plans;

           d.    Hold public comment period on the Rl/FS;

           e.    Brief local and State officials;

           f.    Hold public meetings  on technical aspects of the site;

           g.    Prepare fact sheets and press releases and disseminate information;

           h.    Prepare summaries of public concerns.


B.2  Fundable Oversight Tasks: RD 'RA

     1.    Fundable oversight tasks: RD

           a.    Review tasks conducted by the State for RD include:

                o    Participate  in technical design briefings for RD initiation;

                o    Review design scopes of work;

                o    Conduct technical meetings on the RD with  the PRPs,  PRP
                     contractors, and/or EPA;

                o    Assist in reviewing preliminary design documents and design
                     changes which may affect remedy selection;

                o    Review and comment on value engineering screening submittals;

                o    Review .and comment on quality assurance project plans, site
                     safety plans, and intermediate design documents;

                o    Review and comment on plans for operation and  maintenance
                     developed by PRP;

                o    Review final RD.

           b.    Enforcement tasks conducted by .the State  for RD include:

                o   Track deliverable schedules and submission dates spelled out  in
                     the enforcement document.

                o   Initiate enforcement action for non-compliance with terms and
                     conditions of the enforcement document.

                                         25

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                                                               9831.6t


c.    Community relations tasks conducted by the State for RD
     include:

     o     Prepare fact sheets and notify public on RD activities and on
           what the RD is expected to entail;

     o     Continue prior community relations activities as needed.

Fundable oversight tasks: RA

a.    Review tasks conducted by the State for RA include:

     o     Review and comment on PRP or PRP contractor work plans,
           site  safety  plans,  and QA/QC procedures;

     o     Review any construction change orders that may alter the
           approved remedy and amend the CA, prepare a discussion of
           significant changes from the proposed plan in the Record of
           Decision (ROD),  and/or amend the ROD as appropriate subject
           to adoption of the amended ROD by EPA;

     o     Review and comment on draft and final RA reports;

     o     Participate in pre-construction and pre-final construction
           conferences;

     o     Review.PRP or PRP contractor monthly progress reports;

     o     Organize and participate in technical meetings on the RA with
           the PRPs, PRP contractors, and/or EPA;

     o     Ensure that the remedy is completed ana operational.

b.    Field-related tasks conducted by the State for RA include:

     o     Provide monitoring and oversight of construction activities;

     o     Take and analyze split samples or confirmatory samples;

     o     Be present at trial runs and shakedowns of major equipment;

     o     Participate in pre-final and final inspections and project
           acceptance.

c.    Enforcement tasks conducted by the State for RA include:

     o   Track deliverable schedules and submission dates spelled out in
           the enforcement document;
                              26

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                                                                          9831.65
                o   Initiate enforcement action for non-compliance  with terms and
                     conditions of the enforcement document.

           d.    Community relations tasks conducted by the State for RA
                include:

                o    Revise original community relations plans to incorporate any
                     changes required due to remedial design and construction
                     activities;

                o    Conduct discussions with the affected community on the
                     selected remedy and planned construction activities;

                o    Hold meetings with the public during the RA.
II.   Funding State Management Assistance and Oversight of PRPs - Federal
     Enforcement Response

A.   Management Assistance During a Federal Enforcement Response

     If EPA has negotiated the administrative order or consent decree with the
PRPs, EPA will have the lead for oversight of PRP activities and  for community
relations.  In this situation. States may receive funding for management assistance.
Management assistance essentially will involve review tasks and is explained in
Volume I of the EPA manual State Participation in the Suoerfund Program. EPA
will not fund States to hire contractors for management assistance tasks.

B.   Oversight During a Federal Enforcement Response

     The State may  also, under certain circumstances, undertake various, mutually-
agreed  upon oversight activities in place of EPA.  These circumstances may include
the following:

           1.    Federal CERCLA settlements with PRPs in which the  State is a
                participant, as authorized under Section  121(0 of-CERCLA, as
                amended by SARA.

           2.    State oversight that can result in a more effective and  timely
                response to PRP implementation  activities.

           3.    Furthermore, States may be used in place of EPA contractors to
                meet the qualified third party oversight requirements outlined in
                Section 104(aXD of CERCLA.1
     Under this scenario, the State would conduct oversight activities in-house.


                                         27

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                                                                            9831.6b
      This means the State would be conducting some review,  field-related, and or
communin relations tasks along with or in  place of EPA or EPA's contractor.  For
each task, the CA application should clearly outline the roles and responsibilities of
the State as  distinguished from the roles and responsibilities of EPA or EPA's
contractor.

      Where EPA has the lead for oversight, EPA encourages the State to conduct
oversight tasks only if it has the  in-house capability to do the work.  Generally,
EPA will not  fund  the State to hire contractors for oversight tasks unless it
provides adequate justification for  their use.  Furthermore, EPA will not fund States
to conduct oversight tasks that duplicate EPA's efforts.
                                          28

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                                                                        9831 6fc


                                 ATTACHMENT A
     PROVISIONS SPECIFIC TO STATE-LEAD ENFORCEMENT OVERSIGHT
                   OF POTENTIALLY RESPONSIBLE PARTIES
     State-lead enforcement oversight Cooperative Agreements (CA) should contain
the provisions  found in Sections 1 (A-F) and 2 (B-M, 0-T) of Appendix F of the
EPA manual State Participation in the Suoerfund Program.  In addition, they should
also contain the following provisions.

A.   Isjuin.% an Enforceable Order. Pecree. or Other Enforceable J)ocument

     Before EPA funds oversight, the State is  required to issue an enforceable
order, decree,  or other document that requires  the PRP to conduct a RI/FS and/or
RD/RA in accordance  with CERCLA, as amended by SARA, the NCP, and applicable
EPA guidance. A copy of this enforcement agreement must be included in the  CA
application.

     "The State issued a ftvoe of enforceable documentl for the [name of site!
     dated [	], requiring a [yvpe of response action! in accordance with
     CERCLA, as amended by SARA, the NCP, and applicable EPA policy and
     guidance. A  copy of  this enforcement agreement is attached to the
     Cooperative Agreement application."1

B.   State  Enforcement Authorities

     In providing CERCLA funds for State-lead oversight  of PRPs, the State has
shown it possesses the legal authorities to pursue administrative or judicial
enforcement action to ensure performance of the response action.  EPA asks the
State to  outline these authorities in the CA application.

     The State possesses the legal authorities to pursue administrative or judicial
     enforcement action to ensure performance of the  private party response action.
     The State agrees to use these authorities if private parties (1) do not meet  the
     terms of the order, decree, or other enforceable document, or (2) are unwilling
     to undertake subsequent phases  of the response action. These legal authorities
     are outlined in a letter from (official Dividing letterl. dated \            1. and
     is  attached to the Cooperative Agreement application."
     If the enforceable document is a three party agreement (EPA, State,.and
     PRP), the CA should read "and  EPA" after The State" and only cite the
     enforceable document since a copy should already be in EPA's possession.

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                                                                         9831.6b
C.    Abilin  of PRPs to Undertake and Finance the Response Action

      In settling with PRPs to undertake the response action, the State believes that
the PRPs have  the technical, managerial, and financial capability  to conduct the
response action.

For RI-'FS  oversight:

      "The-State believes that the PRP has  the technical,  managerial,  and financial
      capability to undertake the RI/FS."

For RD/RA oversight:

      "The  State believes that the PRP has  the technical,  managerial,  and financial
      capability to undertake the RD/RA."

D.    Consistency with  EPA Policy and Guidance3

      In overseeing PRP conduct of response actions, the State must assure that
such actions are consistent with CERCLA, as amended by SARA, the NCP,  and
applicable EPA policy and  guidance.

For RI/FS  oversight:

      "In conducting RI/FS oversight funded by this Cooperative  Agreement, the
      State  agrees to ensure 'that the private party RI/FS  is consistent with
      CERCLA, as amended by SARA, the National Contingency Plan,  and  relevant
      EPA  policy and guidance, including  but not limited to:

      o     U.S. EPA, Office of Emergency and Remedial Response. Guidance on
           Remedial Investigations Under  CERCLA and Guidance on Feasibility
           Studies Under CERCLA. June  1985.

      o     U.S. EPA, Office of Solid Waste and Emergency Response, Interim
           Guidance on Potentially Responsible Party Participation in Remedial
           investigations and Feasibility Studies, (pending).

      o     U.S. EPA, Office of Solid Waste and Emergency Response, Interim
           Guidance on Compliance with  Applicable or  Relevant and Appropriate
           Requirements.  Federal Register. August 27, 1987."
     The policies cited in this section should not be construed as all inclusive or
     entirely relevant to each site-specific enforcement action.  Other policies that
     may exist or be developed in the future may also need to be referenced in  a
     Cooperative Agreement. In addition, some of the policies listed above are
     currently  being revised  (such as the RI/FS and RD/RA  guidances).

                                        30

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                                                                        98} 1.6t


For RD RA oversight:

     "{n conducting RD RA oversight funded by this Cooperative Agreement, the
     State agrees to ensure that the private party RD/RA  is consistent with
     CERCLA,  as amended by SARA, the National Contingency Plan, and relevant
     EPA policy and guidance, including but not limited to:

     o    U.S. EPA, Office of Emergency and Remedial  Response, Manual Suoerfund
          Remedial Design and Remedial Action Guidance. June,  1986."

E.   Selection of Remedy

     "At  the completion of the private party RI/FS, the State agrees to recommend
     a proposed remedial action plan, develop a Record of Decision (ROD) or other
     decision document, and select the remedy consistent  with CERCLA. as amended
     by SARA,  the National Contingency Plan, and relevant EPA policy and
     guidance, including but not limited to:

     o    U.S. EPA, Office of Solid Waste and Emergency Response, Interim
          Guidance on Suoerfund Selection  of Remedy. December 24,  1986."

F.   Change; to Scone of Work

     The  State must agree to notify EPA in  the event that State or PRP  plans or
actions substantially change the scope of work for tasks funded under the CA.

     The State agrees  to notify EPA in the event that State or PRP plans or
     actions substantially change the scope of work for tasks funded  under this
     Agreement. Prior to issuance, such changes, will be submitted to EPA Tor
     review to ensure technical adequacy and compliance  with the  terms of this
     Agreement."

G.   Community Relations

     The State agrees  to prepare and implement a community relations plan for
     this  site. The State will not initiate oversight field activities until EPA  has
     approved the plan. The State further agrees to comply with the National
     Contingency Plan and relevant EPA policy and guidance on community
     relations, especially Chapter 6, Community Relations in Suoerfund: A Handbook
     when implementing the community relations plan throughout  the response."
                                        31

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                                                                         9831.6b
H.    Administrative Record
     "The State agrees to compile and maintain an administrative record consistent
     with Section  113 of CERCLA. as amended by SARA, the National Contingency
     Plan, and relevant EPA policy and  guidance, including but not limited to:

     o    U.S. EPA, Office of Waste Programs Enforcement/Office of Emergency
          and Remedial Response, Administrative Records for Decisions on Selection
          of CERCLA Response Actions. May 29, 1987.

     "The record shall contain information upon which the decision on selection of
     the response action was based.  The record shall be maintained at or  near the
     site, and a copy shall be maintained at the fname of State  lead Agency
     receiving the cooperative agreement!."

I.    PRP Pavment of Oversight Costs

     The State agrees with the following genera! principles concerning PRP
     payment of Rl/FS oversight costs,  which may be spelled out in  the State's
     order or  decree:

     o    The State will document its oversight costs;

     o    PRPs will reimburse EPA for its oversight costs (either directly or
          through the State); and

     o    PRPs agree that they are liable to EPA under Section 107 of CERCLA for
          unpaid  oversight costs,  plus associated enforcement costs and interest
          Trom the date of demand by  EPA or State."

J.    Deviation From CERCLA. As Amended Bv SARA

     State laws or other restrictions may prevent States from acting consistent with
CERCLA, as amended by SARA.  In those instances,  the State must agree  to
promptly notify and consult with EPA regarding the use of such laws or other
restrictions.

     "Where State  laws  or other restrictions may prevent the  State from acting
     consistent with CERCLA, as amended by SARA,  the State agrees to  promptly
     notify  and consult with EPA regarding the use of such  laws or other
     restrictions."
                                        32

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COST ESTIMATES FOR BUDGETING STATE ENFORCEMENT ACTIVITIES

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                                                               983I.6C

   COST ESTIMATES FOR BUDGETING STATE ENFORCEMENT ACTIVITIES
     Cost estimates have been developed for CERCLA  enforcement activities, which
arc fundable through EPA cooperative agreements (CA).  The cost estimates are to
be used solelv ai 2. guide in assisting the State and EPA in budgeting  these
activities during development of the Superfund Comprehensive Accomplishments  Plan
(SCAP).

     EPA has set forth policy on the types of activities to be funded  through CAs
in the Office of Solid Waste and Emergency Response (OSWER) guidances which are
listed below and are part of this package.

     o    CERCLA Funding of State Enforcement Actions at National Priorities List
          Sites (OSWER Directive Number 9831.6a).

     o    CERCLA Funding of Oversight of Potentially Responsible Parties by States
          at National Priorities List Sites (OSWER Directive Number 9831.6b).

Each of these guidances describes the conditions for  funding under a cooperative
agreement and the activities that will be funded.  What follows are cost estimates
which States and EPA may use, at their discretion, for budgeting each of  the
activities during the SCAP development process.

     In developing these cost estimates, staff were interviewed in the EPA Office
of Enforcement and Compliance Monitoring (OECM) and the Office of Waste
Programs Enforcement  (OWPE).  Both off ices maintain workload budget models which
assign resources to different activities.  In both models, the activities are  similar  to
those fundable under CAs.

     The OECM model contains budget estimates for EPA attorneys and other legal
costs.  The OWPE model contains budget estimates for  both intramural (EPA
technical and administrative) and extramural (contractor) costs.  The extramural
costs were based on a separate OWPE report. At enforcement sites all three
general cost categories  •• (1) legal, (2) technical and administrative, and (3)
contractor — are realized in varying proportions depending on the activity taking
place.

     The following sections discuss the EPA budget  models. The first section
discusses the underlying assumptions applicable to the models and to each
enforcement activity. The remaining sections provide  budget estimates for each
activity and the considerations that may have an impact on the estimates.
                                      33

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                                                                9831.6c

ASSUMPTIONS

     The three following general assumptions should be made:

     1.    One full lime equivalent (FTE) is  equal to 2,080 hours per year based on
          220 active days (out of 260). An  FTE includes  technical and
          administrative costs, as well as travel and communications. One FTE.
          based on a mean salary of $30,000 a year, is equal to S52.500.

     2.    An overall rate of $60 per Level of Effort (LOE) hour was used to
          estimate the extramural costs.

     3.    These cost estimates are based solely on Federal experience.  Although
          States may employ  similar cost estimates when developing their SCAP
          requests actual State costs  funded  through CA may be significantly lower
          than described by the  models.

POTENTIALLY RESPONSIBLE  PARTY SEARCHES*

     PRP search procedures have become more clearly defined  as EPA's program
experience  has increased.  Additionally, EPA has developed a PRP search  manual
which serves to streamline the process and reduce the variance  in costs.  The costs
may vary depending  on the number  of PRPs at the site. The point at which a PRP
search is terminated  is an additional  consideration in the cost estimate.  PRP
searches are to be substantively completed in order to issue general  notice letters
sufficiently in advance of the RI/FS special notice to allow PRPs to come together.
Nonetheless, at some  sites, EPA Regions are continuing PRP search activities during
negotiations and throughout the remedial investigation and feasibility study (RI/FS)
and even into the remedial design and remedial action (RD/RA). While these search
actions are appropriate, the costs of PRP searches should not be attributed to these
activities but rather  should be attributed to the PRP search activity.

Average Duration of PRP Search:    2 Quarters (or 6 months)

Average Cost Estimate:              $15,225 -     Technical and Administrative
                                    $50,000 -     Extramural
                                     S 7,875 -     Legal

                                    $73,100 -     Total
     The PRP .search cost includes names and addresses of generators, but does not
     include information on .the volume or nature (especially hard evidence that the
     materials  were hazardous substances) of the hazardous substances or a
     volumetric ranking, or the PRP's ability to pay.  Information on the volume
     and nature of the substances, a volumetric ranking, and ability to pay are part
     of the NBAR process.  This  is described as "NBAR information Collection" in
     the OWPE workload budget  model.

                                      34

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                                                                983I.6C
ISSUANCE OF NOTICE LETTE"S  AND NEGOTIATIONS6
     Costs for issuing notice letters and conducting negotiations vary depending on
the number of PRPs at a sue.  The cost of issuing notice letters and conducting
negotiations also varies depending  on the phase of response, Rl/FS or RD/RA.
Since RD 'RA  negotiations^involve selection of the remedy and development of the
Record of Decision (ROD) or other decision document, this activity usually takes
longer but  requires less extramural support.
Average  Duration of Notice Letter
Issuance  and Negotiations for RI/FS:

Average  Cost Estimate:
2 Quarters (or 6 months)

$14,175 • Technical and Administrative

$50,000 - Extramural
$13.125 - Legal
Average Duration of Notice Letter
Issuance and Negotiations for RD/RA
and Operation and Maintenance:

Average Cost Estimate:
                                       $77.300 - Total
3 Quarters (or 9 months)

$18,375 • Technical and Administrative
$30,000 • Extramural
$ 7,875 -  Legal
                                       $56,250 - Total

ADMINISTRATIVE AND JUDICIAL ENFORCEMENT ACTIONS
     Most of the current data on  106 injunctive cases-were based upon cases
referred prior to completing the RI/FS.  Future cases will not be referred until
after the RI/FS is completed. Remedies and supporting data should be well-defined
for future cases.  The Administrative Record will serve as the basis of support for
the technipal remedy that is selected.  The estimates below reflect these factors.
Average Duration of Administrative
and Judicial Enforcement Actions:
 14 Quarters (or 42 months)
Average Cost Estimate:
S 68,250
$284,000
S 10,500
• Technical and
• Extramural
• Legal
Administrative
                                        $362,750   - Total
     This category includes issuance of the notice letters.  Also, for RI/FS it
     includes a draft order and SOW.  For RD/RA it includes a draft consent
     decree and proposed work plan,  It does not include judicial  referral of the
     consent decree.
                                      35

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                                                                9831.6c

OVERSIGHT OF RI, FS

     RI FS oversight cosrs may increase because of the new requirements of the
Supcrfund Amendments and Reauthorization Act (SARA).  For a PRP-conducted
R! FS. SARA requires  competent  third party oversight personnel and allows qualified
contractors to conduct  the work.  EPA is currently  developing guidance that will
define more clearly what appropriate oversight  should entail during hazardous waste
sue cleanups (RI  FS and RD/RA). This guidance when  issued should  help with more
effective cost estimates of such oversight.

Average Duration of RI/FS Oversight:     10 Quarters (or 30 months)

Average Cost Estimate:                  $ 99,750   - Technical and Administrative
                                        $200,000   - Extramural
                                        S     0  - Legal
                                        $299,750   - Total

OVERSIGHT OF RD/RA

     A project's construction costs cannot be precisely predicted at the completion
of the RI/FS, and  the project error range  is as much as 50 percent more to 30
percent less than estimated costs.  Non-construction  specifications and
environmental controls may require more  review than a typical construction project
not related to hazardous waste. The costs for these  controls are difficult to
predict.  Overall, however, project design  and construction  costs and  the costs to
review the design are interrelated and somewhat predictable given the following
assumptions:

     o    Construction costs for  Superfund remedies are approximately 50 percent
          of the cost of total remedial action; and they exclude transportation,
          disposal, incineration,  and  other such costs.

     o    The estimated average RA cost is S10 million, but may increase to S20
          million  by 1989 due to SARA'S requirement of more permanent remedies
          which may call  for using alternative technologies.

     o    Design costs are roughly 6 percent of the  total project construction
          costs.

     o    Design review costs are roughly 25 percent of design costs.


Again, EPA is currently developing oversight guidance that will set forth detailed
procedures for RD/RA oversight.

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Average Duration of RD Oversight:

Average Cost Estimate:
Average Duration of RA Oversight:

Average Cost Estimate:
                         9831.6C

4 Quarters (or 12 months)

S 31.500 - Technical and Administrative
5150,000  • Extramural
S      0 - Legal
                                       5181,500 - Total
12 Quarters (or 36 months)

S 94,500 • Technical and Administrative
5300,000 - Extramural
5      0 -  Legal
                                        5394.500 - Total
                                       37

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           RECOMMENDED PROCEDURES FOR
HEADQUARTERS/REGIONAL REVIEW AND CONCURRENCE OF
   INITIAL ENFORCEMENT COOPERATIVE AGREEMENTS

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                                                              983l.6d

  RECOMMENDED  PROCEDURES FOR  HEADQUARTERS/REGIONAL REV]E\\
AND CONCURRENCE OF INITIAL ENFORCEMENT COOPERATIVE AGREEMENTS

1.    PROCEDURES FOR REQUESTING  FUNDS AND REVISING THE CASE
     MANAGEMENT-BUDGET DRAFT COOPERATIVE AGREEMENT APPLICATION

     o    The Region should request cooperative agreement funds during the SCAP
          development process. The SCAP should be revised quarterly, if necessary.
          The Region should consult with the respective States prior to developing
          and revising the SCAP.

     o    The State  may develop a cooperative agreement application and submit it
          to the Regional State Project Officer (SPO).

     o    The Regional Coordinator (RC) in the Compliance Branch, Office of Waste
          Programs  Enforcement (OWPE), will review the draft application in
          coordination with the Contracts Management Section (CMS) in the
          Technical Support Branch, OW'PE.

     o    OWPE will send its  comments on  the application to the SPO. The Region
          should give the State combined EPA comments (HQ and Region). The
          State will  then  prepare a final  application for submittal to the Regional
          Administrator for award.

2.    REGIONAL SUBMITTAL AND HEADQUARTERS SIGN-OFF FINAL
     COOPERATIVE  AGREEMENT APPLICATION

     o    CMS will  receive a copy of the final cooperative agreement application,
          which will have a commitment notice attached.  The dollar amount for
          award, cooperative agreement number, and description should already be
          entered on the commitment notice.

     o    CMS and  the RC will review the  final application and have the
          commitment notice signed by the appropriate Headquarters managers.  For
          CAs of S2SOK or less, the Director of OWTE's signature is required. For
          CAs of over S250K, the  Assistant Administrator of the Office of Solid
          Waste and Emergency Response's signature-is required.

     o    After signatures have been obtained, CMS will obtain the  proper
          accounting  information  from OWPE's Program Management and Support
          Office (PMSO).

     o    After signatures are obtained and accounting information has been
          entered on the  commitment notice, the CMS  will send only the
          commitment notice  back to the Region for use in awarding the CA.
          Delegation has given .CA award authority to the RA. (CMS will  keep the
          copy of the CA application and a photocopy of the commitment notice on
          file for budget purposes). -The SPO will send a signed copy of the CA
          document to CMS after award  and acceptance by the State.
                                     38

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                                                   OSVJER  # 98 35. la
                               Appendix  A

                   INTERIM GUIDANCE ON  PP.P  PARTICIPATION
                          IN THE  RI/FS PROCESS*
I.  INTRODUCTION

     This memorandum sets  forth the policy and procedures governing the
participation of potentially responsible parties  (PRPs', ir. the develop-
ment of remedial investigations  (RI) and feasibility studies  (FS) under
the Comprehensive Environmental Response, Compensation, and Liability
Act (CERCL.A) , as amended by the Superfund Amendments and Reauthorizatior.
Act (SARA) of 1986.  This  memorandum discusses:

     o    The initiation of enforcement activities including PRP search-
          es and PRP notifiration;

     o    The circumstances in which PRPs may conduce  the RI/FS;

     c    The developr---t  of enforceable agreements governing ??.? RI/F?
          activities;

     o    Initiation of PRP RI/FS activities and  oversight of the RI/FS
          by E?A;

     o    EPA control over PRP RI/FS activities;  and

     o    PRP participation in Agency-financed RI/FS activities.

     More detailed information regarding each of  the above topics is
included in Attachments 1-4 of this appendix.

     This document is consistent with CERCLA »nd  EPA guidance in effect
as of October 1988, and is intended to supersede  the March 20, 1964 mem-
orandum from Assistant Administrators Lee M. Thomas and Courtney M. Price
entitled "Participation of Potentially Responsible Parties in Develop-
ment of Remedial investigations and Feasibility Studies Under CEPC-A"
(OSWER Directive No. 9835.1).  Users of this guidance  should  consult the
RI/FS Guidance or any relevant guidance or policies issued after dis-
tribution of this document before establishing EPA/PRP responsibilities
for conducting RI/FS activities.  Additional guidance  regarding proce-
dures for EPA oversight activities will be available in the Office of
Wast* Program Enforcement's  (OWE) forthcoming "Guidance Manual on
•This memorandum was signed by  the  AA OSWER and released  for  distribution
 on May 16, 1988.  Technical  clarifications/updates  have  been made  to
 this guidance for insertion  into Appendix A of the  "Interim  Final
 Guidance for Conducting Remedial Investigations and Feasibility Studies"
 (October 1988-OSWER Directive  No.  9355.3-01)  (Referred to herein as the
 RI/FS Guidance).
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Oversight of Potentially Responsible  Party  Remedial  Investigation and
Feasibility Studies".
II.  BACKGROUND

     Sections  104/122  of CERCLA  provide  PRPs with  the opportunity to
conduct the  RI/FS when EPA determine*  (1)  that the PRPs are qualified to
conduct such activities and  (2)  they will  carry out the,, activities in
accordance with  CERCLA requirements and  EPA procedures.*  The Agency will
continue  its policy  of early  and timely  PRP searches as well as early
PRP notification and negotiation for RI/FS activities.

     It is also  the  policy of EPA to encourage the early and active par-
ticipation of  PRPs in  conducting RI/FS activities.  EPA believes that
early participation  of PRPs  in the remedial process will encourage pp.p
implementation of the  selected remedy.   PRP participation in RI/FS activ-
ities will ensure that they  have a better  and more complete understand-
ing of the selected  remedy,  and  thus will  be mere  likely to agree on
implementation of the  remedy.  Remedial  activities performed by PRPs
will also conserve Fund monies,  thus making additional resources avail-
able to address  other  sites.

     As part of  the  Agency's  effort to encourage PRP participation in
remedial activities, EPA will consider the PRPs' role in conducting RI/FS
activities when  assessing an  overall settlement proposal for the remedial
design and remedial  action.   For example,  when the Agency performs a
non-binding  allocation of responsibility (NBA?), the Agency may consider
previous PRP efforts and cooperation.  This will provide an additional
incentive for  PRPs to  be cooperative in  conducting RI/FS activities.

     Although  EPA encourages  PRP participation in  conducting the RI/FS,
the Ager.cv and CERCLA  impose  certain conditions governing their partici-
pation.  These conditions are intended"to  assure that the RI/FS per-
formed by the  PRPs is  consistent with Federal requirements and that
there is adequate oversight  of those activities.   These conditions are
discussed both in Section III and'Attachment I of  this memorandum.

     At the  discretion of EPA, a TUP  (or group of  PRPS) may assume
full responsibility  for undertaking RI/FS  activities pursuant to
Sections 104/122 of  CERCLA.   The terms and conditions governing the
RI/FS activities should b« specified in  an Administrative Order.  The
use of Administrative  Orders is  authorized in CERCLA Section 122(d)(3);
they ar« the preferred type  of agreement for RI/TS activities since they
are authorized internally and therefore, may be negotiated more quickly
 The legal authority  to  enter into agreements with PRPs is found in  CERCL*
 Section 122(a).  This section than refers to response actions conducted
 pursuant to Section  104(b).   For the purposes of this guidance, Sec-
 tions 104/122 will be cited  when referring to such authority.
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than Concent Decrees.   Before  SABA,  Administrative  Orders  were  signed
using the authorities of  Section  106 of  CERCLA.  New provisions in SABA
allow for Orders  to be  signed  using  the  authorities of Sections 104/122;
Section 104/122 Orders  do not  require EPA  to  make * finding of iminent
and substantial end*ngerment.

     RI/FS activities developed subsequent to the Administrative Order
are set forth  in  a Statement of Work, which is then embodied or
incorporated by reference into the Order.   A  Work Plan describing
detailed procedures and criteria  by  which  the RI/FS will be performed is
developed by the  PRPs and, after  approval  by  EPA, should also be
incorporated by reference into the Administrative Order.

     It is the responsibility  of  the lead  agency to ensure the quality
of the effort  if  the PRPs assume  responsibility for conducting the RI/FS.
Therefore, EPA will establish  oversight  procedures  and project controls
to ensure that the response actions  are  consistent  with CERCLA and the
National Contingency Plan (NCP).  Section  104(a)(1) of CERCLA mandates
that no PRP be allowed  to undertake  an RI/FS  unless EPA determines that
the party(ies) conducting the  RI/FS  is qualified to do so.  In addition,
Section 104(a)(1) requires that a qualified party be contracted with or
arranged for to assist  in overseeing and reviewing  the conduct of the
RI/FS and, that the PRPs  agree to reimburse EPA for the costs associated
with the oversight contract or arrangement.
III.  INITIATION OF ENFORCEMENT  ACTIVITIES

     As part of effective management  of.enforcement  activities, timely
settlements for RI/FS activities are  to  be  pursued.   This  includes conduc-
ting PRP searches early  ir.  the site discovery  process and  subsequent
notification to all PRPs of their potential liability and  of their oppor-
tunity to perform response  activities.   Guidance  on  conducting timely
and effective PRP searches  is contained  in  the guidance manual, "Poten-
tially Responsible Party Search  Manual"  (August 17,  1987 - OSWER Direc-
tive Mo. 9834.6).

     EPA policy has been to notify PRPs  of  their  potential liability for
the planned response activities, to exchange information about the site,
and to provide PRPs with an opportunity  to  undertake or finance the
response activities themselves.   In the  past this has been accomplished
by issuing a "general notice" letter  to  the PRPs. In addition to the
use of the general notice letter, Section 122 (e)  of  CERCLA now authorizes
EPA to use "special notice" procedures,  which for an RI/FS, establish a
60 to 90 day Moratorium  and formal negotiation period. The purpose of
the moratorium is to provide time for formal negotiation between EPA and
the PRPs for conduct of  RI/FS activities.  In particular,  use of the
special notice procedures triggers a  60  day moratorium on  EPA conduct of
the RI/FS.  During the 60 day moratorium, if the  PRPs provide EPA with a
"good faith offer" to conduct or finance the Rl/TS,  the negotiation period
can be extended to a total  of 90 days.   EPA considers a good  faith offer
to be a written proposal where the PRPs  make a showing of  their qualifi-
cations and willingness  to  conduct or finance the RI/TS.   Minor deficien-
cies in the PRPs' initial submittals  should not be grounds for a
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determination that the offer is not a good faith offer or that the PRPS
ar* unable to perform the RI/FS.

     To facilitate, among other things, PRP participation in the RI/FS
process, Section 122(e)(l) requires the special notice letter to provide
the names and addresses of other PRPs, the volume and nature of sub-
stances contributed by each PRP, and a ranking by volume of substances
at the site, to the extent this information is available at the time of
special notice.  Regions are encouraged to release this information to
PRPs when the notice letters are issued.  To expedite settlements,
Regions are also encouraged to give PRPs as much guidance as possible
concerning the RI/FS process.  It is appropriate to transmit to PRPs
copies of important guidance documents such as the RI/FS Guidance, as
well as model Administrative Orders and Statements of Work.  A model
Administrative Order can be found in the memorandum from Gene Lucero
entitled, "Model CERCLA Section 106 Consent Order for an RI/FS"
(January 31, 1985 - OSWER Directive No. 9835.5).  This model order is
currently being revised to reflect SARA requirements and will be forth-
coming.  A model Statement of Work has been included as Appendix C to
the RI/FS Guidance, while a model Statement of Work for PRP-lead RI/FSs
is currently being developed by OWPE.  Other Regional and Headquarters
guidance relating to technical issues may be given to PRPs, as well as
examples of project plans  (plans that must be developed prior to the
conduct of the RI/FS) that are of high quality.  A description of the
required project plans is included in Attachment II.

     Although use of the special notice procedures is discretionary,
Regions are encouraged to use these procedures in the majority of cases.
If EPA decides not to employ the special notice procedures described in
Section 122(e), the Agency will notify the PRPs in writing of such a
decision, including an explanation as to why EPA believes the use of the
special notice procedures is inappropriate.  Additional information on
the content of special notice letters, including the use of these notice
provisions, can be found in the memorandum entitled "Interim Guidance on
Notice Letters, Negotiations, and Information Exchange"  (October 13,
1987 - OSWER Directive No. 9834.10).

     Section 121 (f) (1) requires that the State be notified of PRP nego-
tiations and that an opportunity for State participation in such negotia-
tions be provided.  In addition, Section 122(j)(l) requires that if a
release or threat of release at the site in question may have resulted
in damages to natural resources, EPA must notify the appropriate Federal
or Stata Trustee and provide an opportunity for the Trustee to partici-
pate in the negotiations.  To simplify the notification of Federal
Trustees, the Agency intends to provide a list of projects in the Super-
fund Comprehensive Accomplishments Plan  (SCAP) to the Trustees as notice
to participate in the negotiations,  In those cases whare  there is reason
to believe that a significant natural  resource will be affected, direct
coordination with the Federal and/or State Trustee will be required.

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IV.  CONDITIONS FOR EPA  INVOLVEMENT  IN,  AND  PRF  INITIATION OF,  RI/FS
     ACTIVITIES

     Under Section 104(a)(1)  EPA may authorize PRPS  to  conduct  RI/FS
activities at any site,  provided the PRPs  can do  so  promptly  and
properly and can meet  the  conditions specified by EPA for  conducting the
RI/FS.  These conditions are  discussed  in  Attachment I  of  this  appendix
ar.d involve the scope  of activities,  the organization of the  PRPs, and
the PRPs'  (and their contractors') demonstrated expertise.  EPA encour-
ages PRPs to conduct the RI/FS provided  that the  PRPs commit  in an Order
(or Consent Decree) under  CERCLA Sections  104/122 (or Sections  106/122
for a Decree) to conduct a complete  RI/FS  to the  satisfaction of EPA,
under EPA oversight.   Oversight of  RI/FS  activities by the lead agency
is required by Section 104(a)(1) and is  intended  to  assure  that the
RI/FS is adequate for  lead agency  identification  of  an  appropriate
remedy, and that it will otherwise meet  the Agency requirements of
CERCLA, the NCP, and relevant Agency guidance.  EPA  will allow  PRPS to
conduct RI/FS activities and  will  provide  review  and oversight  under the
following ger.eral circumstances.
     EPA's priority  is to  address  those  NP1  sites  that  have  been  identi-
fied on the SCAP.  The SCAP  is  an  EPA  management plan which  identifies
site- and activity-specific  Superfund  financial allocations  for each
quarter of the current fiscal year.  When  employing  Section  122(e) notice
procedures, E?A will notify  PRPs of  its  intention  to conduct RI/FS activ-
ities at NFL sites in a manner  that  allows at  least  90  days  notice before
obligating the funds necessary  to  complete the RI/FS (see  Section "I cf
this guidance) .  During this time  frame  PRPs may elect  to  conduct the
RI/FS, under the review and  oversight  of EPA.  If  the PRPs agree  to con-
duct the RI/FS they must meet the  conditions discussed  in  Attachment I.
The scope and  terms  for conducting the studies are .embodied  in an Agree-
ment; as mentioned in Section II,  Administrative Orders are  the preferred
type of Agreement for F.I/FS  activities:

     E?7. will  not encage in  lengthy  discussions with PRPs  over whether
the PRPs will  conduct the  RI/FS? rather, EPA will  adhere to  the time
frames established by the  Section  122  special  notice provisions.  In
most instances, once Fund  resources  have been  obligated to conduct the
RI/FS,'the PRPs will no longer  be  eligible to  conduct the  RI/FS activi-
ties at the sit*.

     Th« action* described below are typically taken to initiate  RI/FS
activities:

     o    EPA  develops a-site-»p*cific Statement of  Work (SOW)  in advance
          of the scheduled RI/FS start.  This  SOW  is then  provided to
          the  PRPs along with a draft  of the Administrative  Order (or
 For a State-lead enforcement site the State is responsible for over-
 sight unless otherwise  specified in the agreement between the State and
 EPA.  EPA should maintain  communication with the State to ensure that
 the State is providing  oversight of the remedial activities.
                                    A-5

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          Consent Decree) «t the initiation of negotiations.   (PRP$
          with EPA approval, submit a  single site plan that incorporates
          the elements of an SOW and a detailed Work Plan as a first
          deliverable once the Agreement has been signed.  This combined
          site plan Bust clearly set forth the scope of the proposed
          RI/FS and would be incorporated into the Agreement in place of
          the sow.)

     o    Final provisions of th* SOW  are negotiated with the Order.

     o    EPA determines whether the PKPs possess the necessary capabili-
          ties to conduct an Rl/FS in  a timely and effective manner  (con-
          ducted simultaneously with other negotiations).

     o    EPA develops a Community Relations Plan specifying any activi-
          ties that may be required of th* PRPs.   (Community relations
          activities are discussed in  Attachment  II.)

     o    EPA determines contractor and staff resources required fcr
          oversight and initiates planning the necessary oversight.
          requirements.  This process  may include preparing a  Statement
          of Work, if a contractor is  to develop  an  "oversight plan."

     o    EPA and PRPs identify and procure any necessary assistance.

     o    FRPs submit a Work Plan to EPA for Agency  review and approval.'
          The Work Flan must present the methodology and rationale  for
          conducting the RI/FS as well as detailed procedures  and require-
          ments, if such procedures have not been set forth in the  Agree-
          ment.  This Wcrk Plan, which in most instances is one of  the
          first deliverables under the Order, is  commonly incorporated
          into the Agreement "following EPA approval.

     o    PRfs are responsible fox obtaining access  to the site; however,
          if access cannot be obtained, EPA, with the assistance of DOJ,
          will secure access subject to PRP reimbursement for  the costs
          incurred in securing such access.

     These standardized actions ensure that the scope of the Rl/FS  activ-
ities to be conducted by the PRPs, and the procedures by which the  RI/FS
is performed, are consistent with EPA  policy and  guidance.  Additional
actions s*y be required either for a technically  complex site  or for a
sit* Mtwre a number of PRPs are involved.  Regardless of the circum-
stances, the actions listed in this section should be negotiated as
expeditiously as possible.  Specific elements of  these actions are  dis-
cussed in Attachment IX.
V.  DEVELOPMENT OF THE RI/FS ADMINISTRATIVE ORDER OR CONSENT DECREE

     The PRPs must respond to EPA's notice letter by either declining,
within the time specified, to participate in the Rl/FS, or by offering  a
good faith proposal  to EPA for performing the RI/FS.  Declining to par-
ticipate in the RI/FS  may be implied if the PRPs do not negotiate during
                                    *-€

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the moratorium established  by  the  notice letter.   If  the  PRPs have
declined to participate,  or the  time  specified has lapsed,  EPA win
obligate funds for performing  the  RI/FS.  If a good faith proposal is
submitted, EPA will negotiate  with the  PRPs  on the scope  and terms for
conducting the RI/FS.

     The results of successful negotiations  will,  in  most cases, be con-
tained in an Administrative Order,  or where  th* site  is in  litigation,
in a Judicial Consent Decree entered  into  pursuant to Section 122(d) cf
CERCLA.  Guidance for the development of an  Administrative  Order is pro-
vided in OWPE's document  "Administrative Order:  Workshop and Guidance
Materials' (September 1984), and in the  memorandum from Gene  Lucero
entitled "Model CERCLA Section 106 Consent Order for  an RI/FS"  (Janu-
ary 31, 1985).   (The latter guidance  is  currently  being revised since
the provisions in SARA allow for Orders  to be  signed  using  the authori-
ties of Sections 104/122.)

     An Administrative Order (or Consent Decree) will generally contain
the scope of activities to  be performed  (either as a  Statement of Work
or Work. Plan), the oversight roles and responsibilities,  and  enforcement
options that may be exercised  in the  event of  noncompliance (such as
stipulated penalties).  In  addition to the above,  th* Agreement will
typically include the following  elements,  as agreed upon  by EPA, the
PRPs,  ar.d other signatories to th* Agreement.

     o    Jurisdiction -  Describes EFA's authority to enter into Admin-
          istrative Orders  or  Consent Decrees.

     o    Parties bound - Describes to whom  the Agreement applies and is
          binding upon.

     o    Purpose - Describes  the  purpose  of the Agreement  in terms of
          mutual objectives ax.d  public benefit.

     o    Findings of fact,  determination, and conclusions  of law - Pro-
          vides an outline  of  facts upon which the Agreement  is based,
          including the fact that  PRPs are not subject to a lesser stan-
          dard of liability and  will  not receive preferential treatment
          from the Agency in conducting  the  RI/FS.

     o    Hotie* to the State  -  Verifies that the  State has been notified
          of pending site activities.

     e    Hork to be performed - Provides  that PRPs submit  project plans
          to the lead-agency for review  and  approval  before cotnencinq
          RI/FS activities.  Project  plans are those  plans  developed  in
          order to effectively conduct the RI/FS project  and include:  a
          Work Plan, describing  the methodology, rationale, and schedule
          of all tasks to be performed during the  RI/FS;  a  Sampling and
          Analysis Plan,  describing the  field sampling procedures to  be
          performed as well as the quality assurance  procedures which
          will be followed  for sampling  and  analysis  (including a
          description of  how the data gathered during the RI/FS will,  be
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managed) and the analytical procedures to be employed; and a
Health and Safety Plan describing health and safety precautions
to be exercised while onsite.   (More information on the
contents of these project plans can be found in Attachment II
of this appendix.)

Compliance with CERCLA, the NCP, and Relevant Agency Guidance -
Specifies that the actions at a site will comply with the
requirements of CERCLA, the NCP, and relevant Agency guidance
determined to be appropriate for site remediation.

Reimbursement of costs - Specifies that PRPs will assume all
costs of performing the work required by the Agreement.  In
addition, this section commits PRPs to reimbursement of costs
associated with oversight activities.  This includes reimburse-
ment for qualified party assistance in oversight, as required
by Section 104(a) (1).  This section should also specify the
nature and kind of cost documentation to be provided and the
process for billing and receiving payment.

Reporting - Specifies the type and frequency of reporting that
PRPs must provide to EPA.  Normally the reporting requirenen^s
will, at a minimum, include the required project plans as well
as those deliverable* required by the RI/FS Guidance.
Additional reporting requirements are left to the discretion
of the Regions.  That is, Regions may require additional
deliverables such as interim reports on particular RI or FS
activities.

Designated EPA, State, and PRP project coordinators - Specifies
that EPA, the State, and PRPs shall each designate a project
coordinator.

Site access and data availability - Stipulates that PRPs shall
allow access to the site by EPA, the State, and oversight per-
sonnel.  Access will be provided for inspection and monitoring
purposes that in any way pertain to the work undertaken
pursuant to the Order.  In addition, access will be provided
in the event of project takeover.  This section also stipu-
lates that EPA will be provided with all currently available
data.

Record preservation - Specifies that all records must be main-
tained by both parties for a minimum of 6  years after termina-
tion of th« Agreement, followed by a provision requiring PRPs
to offer the site records to EPA before destruction.

Administrative record requirements - Provides that all  infor-
mation upon which the. selection of remedy  is based must be
submitted to EPA in fulfillment of the administrative  record
requirements pursuant to Section  113 of CERCLA.   (Additional
information on administrative  record requirements is  contained
in Attachment III.)
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Dispute resolution - Specifies step* to be taken if a dispute
occurs.  The Administrative Order states that with respect to
all submittals and work perforated, EPA will be the final arbi-
ter, while the court is the final Arbiter for a Consent Decree.
(More information on dispute resolution can be found in Attach-
ment IV of this appendix.)

Delay in performance/stipulated penalties - Specifies EPA's
authority to invoke stipulated penalties for noncompliance
with Order or Decree provisions.  Section 121 of CERCLA
requires that Consent Decrees contain provisions for penalties
in an amount not to exceed $25,000 per day.  In addition to
stipulated penalties, Section 122(1) provides that Section 109
civil penalties apply for violations of Administrative Orders
and Consent Decrees.  Delays that endanger public health and/or
the environment may result in termination of the Agreement ar.d
EPA takeover of the RI/FS.  (More information on stipulated
penalties can be found in the Office of Enforcement and Com-
pliance Monitoring1s  (OECM) "Guidance on the Use of Stipulated
Penalties in Hazardous Waste Consent Decrees"  (September 21,
1987) and in Attachment IV of this appendix.)

Financial assurance - Specifies that PRPs should have adequate
financial resources or insurance coverage to address liabili-
ties resulting from their RI/FS activities.  When using con-
tractors, PRPs should certify that the contractors have
adequate insurance coverage or that contractor liabilities are
indemnified-.

Reservation of rights - States that PRPs are not released from
all CERCLA liability through compliance with the Agreement, or
completion of the RI/FS.  PRPs nay be released from liability-
relating directly to RI/FS-requirements, if PRPs complete the
RI/FS activities to the satisfaction of EPA.

Other claims - Provides that nothing in the Agreement shall
constitute a release from any claim or liability other than,
perhaps, for the cost of the RI/FS, if completed to EPA satis-
faction. .Also provides that nothing in the Agreement shall
constitute preauthorization of a claim against the Fund under
CXRCLA.  This section should also specify the  conditions for
indemnification of the U.S. Government.

Subsequent modifications/additional work - Specifies that the
PRPs are cossaitted to perform any additional work or subse-
quent modifications which are not explicitly stated in the
Work Plan, if EPA determines that such work is needed to
enable the selection of an appropriate response action.
(Attachment ZV contains additional  information on this
clause.)

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 VI.  STATEMENT OF WORK AND WORK PLAN

     Based upon available models and guidance, the Region should present
to the PRPs at the initiation of negotiations a Statement of Work (SOW)
and draft Administrative Order.  The SOW describes the broad objectives
and general activities to be undertaken in the RI/FS.  (The PRPs may
develop the SOW if it is determined to be appropriate for a particular
case.)  Once the PRPs receive the SOW they develop a more detailed Work
Plan, which should be incorporated by reference into the Order following
EPA approval.  The Work Plan expands the tasks described in the SOW and
presents the rational and methodology  (including detailed procedures and
schedules) for conducting the RI/FS.  It should be noted that EPA, rather
than the PRPs, may develop the work plan in the event of unusual circum-
stances.
VII.  REVIEW AND OVERSIGHT OF THE RI/FS

     To er.sure that the RI/FS conforms to the NCP ar.d the requirements
of CERC-A, including Sections 104(a)(l) and  121, EPA will review and
oversee ?RF activities.  Oversight is also required tc ensure that the
RI/FS will result in sufficient information  to allow for remedy selec-
tion by the lead agency.

     The oversight activities that EPA, the  State, and other oversight
personnel will be performing should be determined prior to the initia-
tion of the RI/FS.  Different mechanisms will be used for the review and
oversight of different PRP products and activities.  These mechanisms,
and corresponding PRP activities, should be  determined and if possible
incorporated in the Order.  Generally, the following oversight activi-
ties should be specified:

     o    Review of plans, reports, and records;

     o    Oversight of field activities  (including maintenance of records
          and documentation)»

     c    Meetings; and

     o    Special studies.

     Section 104(a)(1) requires that  the President contract with or
arrange for a "qualified person" to assist in the oversight and review
of the conduct of the RI/FS.  EPA believes that qualified persons, for
the purposes of overseeing RI/TS activities, are those firms or individ-
uals with the professional qualifications, expertise, and experience
necessary to provide assurance that the Agency  is conducting meaningful
and effective oversight of PRP activities.   In  this  context, the quali-
fied person generally will be either  an ARCs, TES, or REM contractor.
EPA employees, employees of other Federal  agencies,  State employees, or
any other qualified person EPA determines  to be  appropriate however, may
be asked tc perform the necessary oversight  functions.
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     As  part  of  the  Section  104  requirements,  PRPs  are  required  to  reim-
burse  EPA  for qualified party  oversight  costi.   it  is Agency  policy
to  recover all response costs  at a  site  including all costs associated
with oversight.   Additional  guidance  on  oversight and project control
activities is presented in Attachments III  and  IV,  respectively.


VIII.  CONTROL OF ACTIVITIES

     EPA will usually  not intervene in a PRP RI/FS  if activities  are
ccr.ducted  in  conformance with  the conditions and terms  specified  by the
Order.   When  deficiencies are  detected,  EPA will take immediate  steps to
correct  the PRP  activities.  Deficiencies will  be corrected through the
use of the following activities:   (1) identification of the deficiency;
(2) demand for corrective measures;  (3)  use of  dispute  resolution mecha-
nisms, where  appropriate;  (4)  imposition of penalties;  and if necessary,
(5) FRP  RI/FS termination and  project takeover  or judicial enforcement.
These  activities  are described in detail in Attachment  IV of  this appen-
dix.
IX.  PRP PARTICIPATION  IN AGENCY-FINANCED RI/FS  ACTIVITIES

     PRPs that elect not to perform  the  RI/FS  should be  allowed an oppor-
tunity for involvement  in a Fund-financed RI/FS.  Private parties may
possess technical expertise or  knowledge about a site  which  would be
useful in developing a  sound  RI/FS.   Involvement by PRPs in  the develop-
ment of a Fund-financed RI/FS may  also expedite  remediation  by identify-
ing ar.d satisfactorily  resolving differences between the Agency and
private parties.

     Secticr. 113 (k) (2MB) requires that  interested persons,  including
PRPs, be provided an opportunity for participation in  the development cf
the administrative  record.  PRP participation  may include the submittal
cf ir.fornvation,  relevant to the selection of remedy, for inclusion ir
the record and/or the review  of record contents  and submittal of com-
ments on such contents.

     The extent  of  additional PRP  involvement  will be  left to the discre-
tion of the Region  and  may include activities  such as:

     o    Access to tht site  to observe  sampling and analysis activities;

     o    Access to validated data and draft reports.

     With r«spect to PRP access to a sit«, it  is within  the  Regions'
discretion to impose conditions based on safety  and other relevant
considerations.  To th« extent  that  tht  Rsgion determines that  access  is
appropriate under the circumstances, PRPs must reimburse EPA for  all
identifiable costs  incurred with th« connection  of the accesses afforded
the PRPs, and must  «x«cute appropriate releases  in favor of  the EPA and
its contractors.  With  respect  to  providing data, it  should  be  noted
that the Region  is  required to  allow private citizens  access to the same
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information that is provided to the PRPs.  The Regions must therefore
take this into consideration when determining the extent of the PRP'S
involvement in a Fund-financed RI/FS.

     Aside from participation in the administrative record, which is a
statutory requirement, the final decision whether to permit PRPS to par-
ticipate in other aspects of the Fund-financed RI/FS  (as well as the
scope of any participation) rests with the Regions.  This decision should
be based on the ability of PRPs to organize themselves so that they can
participate as a single entity, and the ability of PRPs to participate
without undue interference with or delay in completion of the RI/FS, and
other factors that the Regions determine are relevant.  The Region may
terminate PRP participation in RI/FS development if unnecessary expenses
or delavs occur.
X.  CONTACT

     For further information on the subject matter  discussed  in this
interim guidance, please ccr.tact Susan Cange  (FTS 4"5-9805) of the
Guidance and Oversight Branch, Office of Waste  Program  Enforcement.
                                   A-12

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                              ATTACHMENT  I

                 CONDITIONS FOR PRP CONDUCT OF THE RI/FS
Organization and Management

     when several potentially responsible parties are involved at a site
they must be able to organize themselves quickly into a single represen-
tative body to negotiate with EPA.  To facilitate this negotiation pro-
cess, EPA will nake available the names and addresses of other PRPs, in
accordance with the settlement provisions of CERCLA Section 122(e).
Either a single PRP or an organized group of PRPs may assume responsi-
bility for development of the RI/FS.

Scope of Activities

     As part cf the negotiation process PRPs must agree to fellow the
site-specific Statenent of Work  (SOW) as the basis for conducting an
RI/FS.  PRPs are required to submit an RI/FS Work Plan setting forth
detailed procedures and tasks necessary to accomplish the RI/FS activ-
ities described in the SOW.  EPA may approve reasonable modifications to
the SOW and will reject any requests for modifications that are not
consistent with CERCLA  (as amended by SARA), the NCP, the requirements
set forth in this ouidance document, the RI/FS Guidance, or other
relevant CERCLA guidance documents.

Demonstrated Capabilities

     PRPs must demonstrate to EPA that they possess, or are able to
obtain, the technical expertise necessary to perform all relevant activi-
ties identified in the SOW, and. any amendments that'may be reasonably
anticipated tc that document.   In addition, PRPs must demonstrate that
they possess the managerial expertise and have developed a management
piar. sufficient to ensure that  the proposed 'activities will be properly
controlled and efficiently implemented.  PRPs must also demonstrate that
they possess the financial capability to conduct and complete the RI/FS
in a timely and effective manner.  These capabilities are discussed
briefly below.

     o    Demonstrated Technical Capability

     PRPs should be required to demonstrate the technical capabilities
of key personnel involved in executing the project.  Personnel qualifi-
cations Bay be demonstrated by  submitting resumes and references.   PRPs
may demonstrate the capabilities of the firm that will perform the  work
by outlining their past areas of bu»in«si, relevant projects and experi-
ence, and overall familiarity with the types of activities to be per-
formed as part of the remedial  investigation and feasibility study.

     It is important that qualified  firms be retained for performing
RI/FS activities.  Firms that do not have the  necessary  expertise  for
performing RI/FS studies may create  unnecessary delays  in the  project
                                   fc-13

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and may create situations which further endanger public health or the
environment.  These situations may be created when PRP contractors sub-
mit insufficient project plans, submit deficient reports, or perform
inadequate field work.  Furthermore, excessive Agency oversight may be
retired in the event that ar. unqualified contractor performs the RI/FS;
the Agency may have to significantly increase its workload by providing
repeated reviews of project plans, reports, and oversight of field
activities.

     The PRPs must also demonstrate the technical capabilities of the
laboratory chosen to do the analysis of samples collected during the
RI/FS.  If a non-CLP laboratory is selected, EPA may require a submission
from the laboratory which provides a comprehensive statement of the labo-
ratories' personnel qualifications, equipment specifications, security
measures, and any other material necessary to prove the laboratory is
qualified to conduct the work.

     o    Demonstrated Management Capability

     P??s must demonstrate that they hav« the administrative capabili-
ties necessary for conducting the RI/FS in a responsible and timely
manner.  A management plan should be submitted to EPA either during nego-
tiations or as a part of the Work Plan which includes a discussion of
roles and responsibilities of key personnel.  This management plan
should include an RI/FS team organization chart describing responsibil-
ities and lines of authority.  Positions and responsibilities should be
clearly related to technical and managerial qualifications.  The PRPs
should also demonstrate an understanding of effective communications,
information management, quality assurance, and quality control systems.
PRPs usually procure the services of consultants to conduct the required
RI/FS activities.  The consultants must demonstrate, in addition to
those requirements stated above, effective contract management
capabilities.

     c    Demonstrated Financial Capability

     The PRPs should develop a comprehensive and reasonable' estimate of
the total cost of anticipated RI/FS activities.  EFA will .decide on a
case-by-case basis if the PRPs will be required to demonstrate that they
have the necessary financial resources available and committed to con-
duct the RI/FS activities.  The resources estimated should be adequate
to cover the anticipated costs for the RI/FS as well as the costs for
oversight, plus a nargin for unexpected expanses.  If, during the con-
duct of tha RI/FS the net worth of the financial mechanism providing
funding for tha RI/FS is reduced to less than that required to complete
the raaaining activities, the PRPs should  immediately notify EPA.  Under
conditions specifiad in tha Order, PRP» are required to complete the
RI/FS regardless of initial cost estimates or financial mechanisms.
                                   A-14

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     o    Assistance for PRP Activities

     If PRPs propose to use consultants for conducting or assisting in
the RI/TS, the PRPs should specify the tasks to be conducted by the con-
sultants and submit personnel and corporate qualifications of the pro-
posed firms to the EPA for review.  Verification should be made that the
PRPs' consultants have no conflict of interest with respect to the pro}-
ect.  Any consultants having current EPA assignments as prime contrac-
tors or as subcontractors must obtain approval from their EPA Contract
Officers before performing work for PRPs.  Lack of clarification on pos-
sible conflicts of interest may delay the PRP RI/FS.  EPA will reserve
the right to review the PRPs' proposed selection of consultants and will
disapprove their selection if, in EPA's opinion, they either do not pos-
sess adequate technical capabilities or there exists a conflict of
interest.  It should be noted that the responsibility for selection cf
consultants rests with the PRPs.
                                   A-15

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                              ATTACHMENT  II

                    INITIATION OF PRP RI/FS ACTIVITIES
Development of the Statement of Work

     After the PRPs have been  identified  in the PRP Search Report they
are sent either a general notice  letter followed by a special notice
letter or a general notice  letter followed by an explanation pursuant to
Section 122(a) why special  notice procedures are not being used.  EPA
will engage in negotiations with  those PRPs who have submitted a good
faith offer in response to  the notice letter and therefore have volun-
teered to perform the RI/FS.  While the PRPs are demonstrating their
capabilities  for conducting the RI/FS, EPA will negotiate the terms of
the Administrative Order.   Either an acceptable Statement of Work or
Work Plan must be incorporated by reference into the Agreement.

     The Statement of Work  (SOW)  is typically developed by EPA and
describes, in & comprehensive manner, all RI/FS activities to be per-
ferred, as reasonably anticipated, prior  to the onset of the project.
The SOW focuses on broad objectives and describes general activities
that will be  undertaken to  achieve these  objectives.  Detailed proce-
dures by which the work will be accomplished are not presented in the
SOW, but are  described in the  subsequent  Work Plan  that is developed by
the PR?s.  In certain instances,  with the approval  of EPA, PRPs may pre-
pare a single site plan incorporating the elements  of an SOW and a Work
Plan.  In such instances, the  site plan will be incorporated into the
Order in place of the broader  SOW,

     o    Use of the EPA Model SOW

     EPA has  developed a model SOW defining a comprehensive RI/FS effort
which is contained in the RI/FS Guidance.  Additionally, a model SOW for
a ??.r-le&d RI/FS is being developed by OWPE and will be forthcor.inc.
The Regions should develop  a site-specific SOW based upon the modeKsK
RI/FS projects managed by PRPs will involve, at a minimum, all relevant
activities set forth in the EPA model SOW.  Further, all plans and
reports identified as deliverable in the EPA model SOW must be iden-
tified as deliverable* in the  site-specific SOW and/or the Work Plan
developed by  the PRPs.  Additional deliverable! may be required by the
Regions and should be added to the Administrative Order.

     o    Modification of the  EPA Draft SOW Requirements

     The activities set forth  in  the model SOW are  considered by EPA to
be the critical RI/TS activities  that are required  by the NCP.  PRPs
should present detailed justifications for any proposed swdifications
and amendments to the activities  set. forth in the SOW.  EPA will review
all proposed  modifications  and approve or disapprove their inclusion in
the SOW based on available  information, EPA policy  and guidance, overall
program objectives, and the requirements  of the NC? and CSRCLA.  EPA
                                   A-16

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 will  not  allow modifications that, in th« judgment of the Agency,  win
 lead  to an  unsatisfactory RI/TS or inconsistencies with the NCP.'

 Review of the RI/FS Project Plans

      RI/FS  project plans include those plans developed for the RI/FS.
 At  a  minimum the  project plans should include a Work Plan,  a Sampling
 and Analysis Plan, a Health and Safety Plan, and a Community Relations
 Plan.  The  Community Relations Plan is developed by EPA and should
 include a description of the PRPs1 rol* in conmunity relations activi-
 ties,  if  any.   EPA review and approval of the work plan and sampling and
 analysis  plan will usually be required before PRPs can begin site  activi-
 ties.  An example when limited project activities may be initiated prior
 to  approval  of the project plans would be if additional information is
 required  tc  complete the Sampling and Analysis Plan.  Additionally, con-
 ditional  approvals to the Work Plan and Sampling and Analysis Plan oay
 be  provided  in order to initiate field activities in a more timely
 manner.   It  should be noted that EPA does not "approve" the PRPs'  Health
 and Safety  Plan but rather,  it is reviewed to ensure the protection of
 public health ar.d the environment.  The PRPs may be required to amend
 the plan  if  EFA determines that it does not adequately provide for such
 protection.

     o    Contents of the Work Plan

     The  Work  Pl&j* expands the tasks of the SOW, and the responsibili-
 ties specified in the Agreement, by presenting the rationale and method-
 ology  (including  detailed procedures)  for conducting the RI/FS.
 Typically the  Work Plan is developed after the draft Order and then
 incorporated  into the Agreement.  In some cases however, it may be appro-
priate for EFA to develop the Work Plan prior to actual negotiation with
 the FKPs  ar.d  attach the plan to the draft Agreement.  The PRF RI/FS work
 Plan must be  consistent with current.EPA guidance.  Guidance on develop-
 ing acceptable Work Plans is available in-the RI/FS Guidance.   Addi-
 tional guidance will be forthcoming in the proposed NCP.  Once the Work
 Plan it approved  by EPA, it becomes a public document and by the terms
 of the Agreement,  should be incorporated by reference into that document.
The wpxk  Plan should, at a minimum, contain the following elements.

     Introduction/Background Statement - PRPs should provide an intro-
     ductory  or background statement describing their understanding cf
     th« work to  be performed at the site.  This should include histor-
     ical site information and should highlight present site conditions.

     Objectives - A statement of what is to be accomplished and how the
     information  will be utilized.

     Scope -  A detailed description of the work .to be performed
     including a  definition of work limits.

     Management Plan - A description of the project management showing
     personnel with authority and responsibility for the appropriate
     aspects  of the project and specific tasks to be performed.. A
                                   A-l"

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     single person  should be  identified AS  having overall  responsibility
     for  the project  and specific  tasks to  be  performed.

     Mork Schedule  -  A  statement outlining  the schedule  for  each of the
     required activities.   This could  be presented in  the  fora of a
     Gantt or milestone chart.  The  schedule in the work plan must match
     that in the  draft  order.

     Deliverables - A description  of the work  products that  will be
     submitted  and  their schedule  for  delivery.   The schedule should
     include specific dates,  if possible.   Overvise, the schedule
     should be  in terns of  the number  of days/week after approval
     of the work  plan.

     o    Contents  of the Sampling and Analysis Plan.

     A Sampling and Analysis  Plan  (SAP)  must bt submitted  by the PKFs
before initiation of  relevant field  activities.   This  plan contains two
separate  elements:  a Field Sampling Plan and  a Quality  Assurance Project
Plan.  These documents  were previously submitted as separate deliverable;,
but are now combined  into one document. Though the SAP  is typically
implemented by  PRP  contractors, it is  the responsibility of  the PRPs to
ensure that the goals and standards  of the  plan are met.   (Verification
that the  goal and standards of the SAP are  met will also be  part of EFA's
oversight responsibilities.)   The  SAP  should contain  the following ele-
ments :

     Field Sampling Plan -  The Field Saapling  Plan includes  a detailed
     description  of all. Rl/FS sampling and  analytical  activities that
     will be performed. These activities should be consistent with the
     NCF  and relevant CERCLA  guidance.  Further guidance on  developing
     Field Sampling Plans is  presented in the  F.I/FS Guidance.

     Quality Assurance  Project Plan  -  The SAP-  must include a detailed
     description  of quality assurance/quality  control  (QA/QC) procedures
     to be employed during  the RI/FS.   This section is intended to ensure
     that the Rl/FS is  based  on the  correct level or extent  of sampling
     and.analysis required  to produce  sufficient data  for  evaluating
     remedial alternatives  for a  specific site.  A second  objective is
     to ensure  the  quality  of the  data collected during  the  Rl/FS.
     Guidance on  appropriate  QA/QC procedures  aay be  found in the  RI/FS
     Guidance as  well as "Data Quality Objectives for the  RI/FS  Process"
     (March 1987  -  OSWER Directive No. 9355.0-7B).

     Zf the SAP modifies any  procedures established in relevant  guidance,
it oust provide an  explanation and justification for the change.

     o    Other Project Plans

     Other project  plans that are  likely to be required in the  RI/FS
process include the Health  and Safety  Plan  and the Cotsnunity Relations
Plan.
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     Health and Safety Plan - PRPs should include a Health and Safety
     Plan either as part of the work Plan or as a separate document.
     The Health and Safety Plan should address the measures taken by  the
     PRPs to ensure that all activities will be conducted in an environ-
     mentally safe manner for the workers and the surrounding community.
     EPA reviews the Health and Safety Plan to ensure protection of
     public health and the environment.  EPA does not, however, "approve"
     this plan.  Guidance on the appropriate contents of a Health and
     Safety Plan may be found in the RI/FS Guidance,  in addition,
     Health and Safety requirements are found in "OSHA Safety and Health
     Standards:  Hazardous Waste Operations and Emergency Response"
     (40 CFR Part 1910.120) .

     Community Relations Plan - EPA must prepare a Community Relations
     Plan for each NPL site.  The extent of PRP involvement in community
     relations activities should be detailed in this plan.  Additional
     information on Community Relations activities is contained below.

     o    Review and Approval

     FRFs must submit all of the required RI/FS project plans  (with the
exception of the Community Relations Plan which is developed by EPA)  to
EPA for review, and in the case of the Work Plan and SAP, approval.  EPA
will review the plans for their technical validity and consistency with
the NCP and relevant EPA guidance.  Typically, the Agency must review
and approve these plans before FRPs can begin any site activities.  Any
disagreements that arise between EPA and PRPs over the contents of the
plans should be resolved according to the procedures set  forth in the
dispute resolution section of the relevant EPA/PRP Agreement.

Community Relations

     EPA is responsible for developing and implementing an effective
community relations program, regardlesfc of whether RI/FS  activities are
Fund-financed or conducted by PRPs.  At State-lead enforcement sites,
funded by EPA under Superfund Memoranda of Agreement  (see the  "Draft
Guidance on Preparation of a Superfund Memorandum of Agreement  (Octo-
ber 5, 19S" - CSWER Directive No. 9375.0-01)), the State  has the  respon-
sibility for development and implementation of a community relations
program.  PRPs may, under  certain circumstances, assist EPA or the State
in implementing the coaonunity relations activities.  For  example, PRFs
may with to participate in connunity meeting* and in preparing fact
sheets.  PRP participation in community relations activities would, how-
ever, b« at the discretion of the vRegional Office,  or  the State,  and
would require oversight by the  lead-agency.  EPA will  not under any cir-
cumstances negotiate press releases with PRPs.

     EPA designs and implements  coraunity  relations  activities according
to CERCLA and the NCP.  A  Cotmunity Relations Plan  must be developed  by
EPA for all NPL «ites  as described by  th«  EPA guidance,  "Cowunity Rela-
tions in Superfund:  A Handbook"  (U.S.  EPA,  1986  -  OSWER Directive
No. 9230.0-03).  The Community  Relations Plan must  be independent of
negotiations with PRPs.  Guidance  for  conducting  community  relations
activities at Superfund enforcement  sites  is
                                   A-19

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specifically  addressed by  Chapter VI of tht  Handbook and the  EPA nemo
entitled  "CoaBminity  Relations  Activities at  Superfund Enforcement
Sites—Interim  Guidance"  (November 1988 - OSWER Directive
No. 9230.0-3B).   In  tone instances the  decision regarding PRP participa-
tion  in community relations  activities  will  be  made  after the Community
Relations Plan  has been developed.  As  a result,  the plan will need to
be modified by  EPA to reflect  Agency and PRP roles and responsibiliti«s.

      EPA,  or  the  State, will provide the Community Relations  Plan to all
interested parties at the  same tine.  In general, if the case has not
been  referred to  the Department ot Justice (DOJ)  for litigation, com-
munity relations  activities  during the  RI/FS should  be the  same for
fund- and PRP-i*ad sites.  If  the case  has been (or  may potentially be)
referred  to DOJ for  litigation,  constraints  will  probably be  placed or.
the scope of  activities.   The  EPA Coonunity  Relations Plan  may be modi-
fied  after consultation with the technical enforcement staff, the
Regional  Counsel  and other negotiation  team  members, including, if the
case  is referred,  the lead DOJ or Assistant  United States Attorneys
(i.e., the litigation team).  This technical and legal staff  must be
consulted prior tc any public  meetings  or dissemination of fact sheets
or other  information; approval must be  obtained pricx to releases of
information and discussions  of technical information in advance.  PRP
participation in  implementing  community relations activities  will be
subject to EPA  (cr State)  approval in administrative settlements and
EPA/DOC in civil  actions.  Key activities specific to ccnanur.ity relations
programs  for  enforcement kites include  the following:

      o     Public  Review of Work Plans for Administrative Orders

      The  PRP  Work Plan, as approved by  EPA,  is  incorporated into the
Administrative  Order (or Consent Decree).  Once the  Agreement is signed,
it becomes a  public  document.   Although there is no  requirement for
public ccnirent  on an Administrative Order, Regional  staff are encouraged
to announce,  after the Order is final,  that  the PRP  is conducting the
RI/FS.  Publication  of notice  and a corresponding 30-day comment period
is required however, for Consent Decrees.

      o     Availability of  RI/FS Information  from the PRPs

      PRPs, in agreeing to-conduct the RI/FS, must also agree  to provide
all information necessary  for  EPA to implement  a Community Relations
Plan. The Agreement should  identify the types  of information that PRPs
will  provide, and contain  conditions concerning the  provision of this
information.  EPA should provide the PRPs with  the  content of the plan
so that the PRPs  can fully anticipate the type  of information that will
be made public.  All information submitted by PRPs will be subject to
public inspection (i.e., available through Freedom of Information Act
requests,  public  dockets,  or the administrative record) unless the
information meets an exemption:  An example would be if the information
is deemed either  as  enforcement sensitive by EPA, oz business confi-
dential by EPA  (based on the PRPs1 representations), in confonnance with
40 CFR Part 2.
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Development  of  the  ATSDR  Health  Assessment

     Section 104(j)(6)  of CERCLA requires  the  Agency  for Toxic Substances
and Disease  Registry  (ATSDR)  to  perform health assessments  at all NPL
facilities according  to a specified  schedule.   The purpose  of the health
assessment is to  assist in  determining  whether any current  or potential
threat  to human health  exists and to determine whether  additional infor-
mation  on human exposure  and  associated health risks  is needed.

     The EPA remedial project manager (RPM)  should coordinate with the
appropriate  ATSDR Regional  representative  for  initiation of the health
assessment.   In general,  the  health  assessment should be initiated at
the start of the  RI/FS.   The  ATSDR Regional  representative  will provide
information  on  data needs specific to performing a health assessment to
ensure  that  all necessary data will  be  collected during the RI.

     The RPM and  the  ATSDR  Regional  representative should also coordinate
the transmission  and  review of pertinent documents dealing  with the extent
and nature cf site  contamination (i.e.,  applicable technical memoranda
and the draft RI) .  As  ATSDR  has no  provisions for withholding documents,
if requested by the public, the  RPM  must discuss enforcement sensitive
documents and drafts  with the ATSDR  Regional representative rather than
providing copies  to them.   This  will ensure  EPA's enforcement confiden-
tiality.  Further guidance  on coordination of  RI/FS activities with ATSDR
can be  found in the document  entitled "Guidance for Coordinating ATSDR
Health Assessment Activities  with the Superfund Remedial Process"
(March  193"7  - OSWZR Directive No.  9285.4-02).

Icentificatisr.  of Oversight Activities

     EPA will review  RI/FS  plans and reports as well  as provide field
oversight of  PR?  activities during the  RI/FS.   To ensure that adequate
resources are committed and that appropriate activities are performed,
EPA should develop  an oversight  plan that  defines the oversight activi-
ties that must  be performed including EPA  responsibilities, RI/FS prod-
ucts to be reviewed,  and  site activities that  EPA will  oversee.  In
planning for oversight, EPA should consider  such factors as who will be
performing oversight  and  the  schedule of activities that will be moni-
tored. . A tracking  system for recording PRP  -milestones  should be devel-
oped.   This  system  should also track activities performed by oversight
personnel and other appropriate  cost items such as travel expenses.

Identification  and  Procurement of EPA Assistance

     In accordance  with Section  104(a)(1)  EPA  must arrange  for a quali-
fied party to assist  in oversight of the RI/FS. The  following section
provides guidance for identifying and procuring such  assistance for EPA
activities.
                                   A-21

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     o    Assistance for EPA Activities

     As specified in Section 104(a)(l), EPA is required to contract with
or arranqe for a qualified person to assist in oversight of the RI/FS.
Qualified individuals are those groups with the professional qualifica-
tions, expertise, and experience necessary to provide assurance that the
Agency is conducting appropriate oversight of PRP RI/FS activities.

     Normally, EPA will obtain oversight assistance either through the
Technical Enforcement Support  (TES) contract, the Alternative Remedial
Contracts Strategy Contract  (ARCS), or occasionally through the Remedial
Action (R£M) contracts.  In  some cases oversight assistance may be
provided by States through the use of Cooperative Agreements.  Oversight
assistance may also be obtained through the U.S. Army Corps of Engineers
or other governmental agencies; interagency Agreements should b* utilized
to obtain such assistance.

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                             ATTACHMENT  III
                    REVIEW AND OVERSIGHT OF THE RI/FS
 Review of Plans, Reports,  and  Records

     EPA will  review all RI/FS products which are submitted to the Agency
 as specified in the Work Plan  or Administrative Order.  PRPS should
 ensure that all plans, reports, and  records are comprehensive, accurate,
 and consistent in content  and  format with the NCP and relevant EPA guid-
 ance.  After this review process, EPA will either approve or disapprove
 the product.   If the product is found to be unsatisfactory, EPA will
 notify the PRPs of the discrepancies or deficiencies and will require
 corrections within a specified time period.

     o    Project Plans

     EPA will  review all project plans that are submitted as celiver-
 ables in fulfillment of the Agreement.  These plans include the Work
 Plan, the Sampling and Analysis Flan  (including both the Field Sampling
 Plan and the Quality Assurance Project Plan), and the Health and Safety
 Plan.  If the  initial submittals are not sufficient in content or scope,
 the RPM will request that  the  PRPs submit revised document(s) for review.
 EPA does not "approve" the PRP's Health and Safety Plan but rather, it
 is reviewed to ensure the  protection of public health and the environment.
The PRP's Work Plan and Sampling and Analysis Plan, on the other hand,
must be reviewed and approved  prior  to the initiation of field activities.
Conditional approval to these  plans  may be provided in order to initiate
 field activities in a more timely manner.

     The P?.?s  may be required  to develop additional Work Plans or modify
 the initial Work Plan contained in or created pursuant to the Agreement.
These changes  may result from  the.need"to:   (1) re-evaluate the RI/FS
 activities due either to changes in  or unexpected site conditions;
 (2) expand the initial Work Plan when additional detail is necessary; or
 (3) modify or  add products to  the Work Plan based on new information
 (e.g., a new population at risk).  EPA will review and approve all Work
Plans and/or modifications to  Work Plans once they are submitted for
 review.

     o    Reports

     P*P» will, at a minimum,  submit monthly progress reports, technical
memorandums or reports, and the draft and  final RI/FS reports as
 required in the Agreement. To assist in the development of the RI/FS
 and review of  documents, additional  deliverables may b« specified by the
 Region and included in the Agreement.  These reports and deliverables
will be reviewed by EPA to ensure that the activities specified in the
Order and approved Work Plan are being properly implemented.  These
 reports will generally be  submitted  according  to  the conditions and
 schedule set forth in the  Agreement.  Elements of  the PRP  reports are
 discussed below.
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Monthly Progress Reports - The review of monthly progress reports
is an important activity performed during oversight.  These reports
should provide sufficient detail to allow E?A to evaluate the past
and projected progress of the RI/FS.  PRPs should submit these writ-
ten progress reports to the RPM.  The report should describe the
actions and decisions taken during the previous month and activities
scheduled during the upcoming reporting period.  In addition, tech-
nical data generated during the month (i.e., analytical results)
should be appended to the report.  Progress reports should also
include a detailed statement of the manner and extent to which the
procedures and dates set forth in the Agreener.t/Work Plan are being
met.  Generally, EPA will determine the adequacy of the performance
of the RI/FS by reviewing the following subjects discussed in pro-
gress reports:

o    Technical Summary of Work

     The monthly report will describe the activities and accomplish-
     ments performed to date.  This will generally include a descrip-
     tion of all field work completed, such as sampling events and
     installation of wells; a discussion of analytical results
     received; a discussion of data review activities; and a dis-
     cussion of the development, screening, and detailed analysis
     of alternatives.  The report will also describe the activities
     to be performed during the upcoming mor.th.

o    Schedule

     EPA will oversee PRP compliance with respect to those sched-
     ules specified in the Order.  Delays, with the exception cf
     those specified under the Force Majeure clause of the Agree-
     ment, may result in penalties, if warranted.  The RPM should
     be immediately notified if PRPs cannot perform required
     activities or cannot provide'the required deliverables  in
     accordance with the schedule specified in the Work Flan.   In
     addition, PRPs should notify the RPM when circumstances may
     delay the completion of any phase of the work or when cir-
     cumstances may delay access to the site.  PRPs should also
     provide to the RPM, in writing, the reasons for, and the
     anticipated duration of, such delays.  Any measures taken  or
     to be taken by the PRPs to prevent or minimize the delay
     should be described including the timetables for implementing
     such measures.

o    Budget

     The relationship of budgets to expenditures should be tracked
     where the RI/TS is funded with a financial mechanism estab-
     lished by the PRPs.  If site  activities require more funds
     than originally estimated, EPA must be  assured that the PRPs
     are financially able to undertake  additional  expenditures.
     While EPA does not have the  authority  to  review  or  approve a
     PR? budget, evaluating  costs  during  the course of  the  RI/FS
     allows EPA to effectively  monitor  activity to ensure  timely
                              A-24

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          completion of RI/FS activities.   If the PRPS  run over budget,
          EPA must be assured that they  can continue the RI/FS activi-'
          ties as scheduled.  Therefore,  if specified in the Agreement,
          PRPs should submit budget expenditures and cost overrun infor-
          mation to EPA.  Budget reports  need not present dollar amounts,
          but should indicate the relationship between  remaining avail-
          able funds and the estimate of  the costs of remaining activities.

     o    Problems

          Any problems that the PRPS encounter which could affect the
          satisfactory performance of the RI/FS should be brought to the
          iiranediate attention of EPA.  Such problems may or may not be a
          force ma^eure event, or caused  by a force majeure event.  EPA
          will review problems and advise the PRPs accordingly.  Problems
          which may arise include, but are  not limited to:

               Delays in mobilization or  access to necessary equipment;

               Unanticipated laboratory/analytical time requirements;

               Unsatisfactory QA/QC performance;

               Requirements for additional  or more complex sampling;

               Prolonged unsatisfactory  weather conditions;

               Unanticipated site conditions; and

               Unexpected, complex community relations  activities.

     Other Reports - All other reports^  such as technical reports and
     draft ar.d final RI/FS reports, should  be submitted to EPA according-
     to the schedule contained in the Order or the approved Work Plan.
     EPA will review and approve these reports as they  are submitted.
     Suggested formats for the RI/FS reports are presented in the RI/FS
     Guidance.

     o    Records

     PRPs should preserve all records, documents, and information of any
kind relating to th« performance of work at the site for  a minimum  of
6 year« after completion of the work and termination of the Administra-
tive Ord«r.  After the 6-year period, the PRPs should offer the  records
to EPA before their destruction.

     Document control should be a key element of all recordlceeping.  The
following activities require careful recordXeeping and  will be  subject
to EPA oversight:

     Administration - PRP administrative activities  should be accurately
     documented and recorded.  Necessary precautions to prevent errors
                                   A-25

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     or'the loss or misinterpretation of data  should be taken.  At a
     minimum, the following administrative actions should be documented
     and recorded:

               Contractor work plans, contracts, and change orders;

               Personnel changes;

               Cowminications between and among PRPs, the State, and E?A
               officials regarding technical aspects of the RI/FS;

               Permit application and award  (if applicable); and

               Cost overruns.

     Technical Analysis - Samples and data should be handled according
     to procedures vet forth in the Sampling ar.d Analysis Flan.  Documen-
     tation establishing adherence to these procedures should include:

               Sample labels;

               Shipping forms;

               Chain-of-custody forms; and

               Field log books.

     All analytical data in the RI/FS process  should be managed as set
     forth in the Sampling and Analysis Plan.   Such analytical data m^
     be the product of:

               Contractor laboratories;

               Environmental and public health studies; and

               Reliability, performance, and implementability studies of
               remedial alternatives.

     Decision Making - Actions or communications among PRPs that  involve
     decisions affecting technical aspects of  the RI/FS should be docu-
     mented.  Such actions and communications  include those ot the proj-
     ect manager  (or other PRP management entity), steering coonittees,
     or contractors.

     o    Administrative Record Requirements

     Section 113 (JO ot CERCLA requires that  the Agency establish  an admin-
istrative record upon which the selection of a response action is based.
A suggested list of documents which are most likely to be  included in
any adequate administrative record is provided in the memorandum  entitled
"Draft Interim Guidance on Administrative Records for Selection of CERCU*
Response Actions"   (June 23, 1988 - OSWER Directive Mo. 9833.3A).  More
detailed guidance will be forthcoming,  including  guidance-provided in
                                   A-26

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the revisions to tht NCP.  There are, however,  certain details associ-
ated with compiling and maintaining an  administrative record that are
unique to PRP RI/FS activities.

     EPA is responsible for compiling and maintaining the administrative
record, and generating and updating an  index,   if EPA and the PRPs
mutually agree, the PRPs may be allowed to house and maintain the admin-
istrative record file at or near the site; they may not, however, be
responsible for the actual compilation  of the record.  Housing and main-
taining the administrative record would include setting up a publicly
accessible area at or near the site *nd ensuring that documents renain
and are updated as necessary.  EPA must always  be responsible for decid-
ing whether documents are included in the administrative record; trans-
mitting records to the PRPs; and maintaining the index to the repository.

     The information which may comprise the administrative record must
be available tc the public from the time an RI/FS Work Plan is approved
by EPA.  Once the Work Plan has been approved the PRPS must transmit tc
EPA, at reasonable, regular intervals,  all of the information that is
generated during the RI/FS that is related to selection of the remedy.
The required documentation should be specified  in the Administrative
Order.  The Agreement should also specify those documents generated prior
to the RI/FS that must be obtained from the PRPs for inclusion in the
record file.  This may include any previous studies conducted under State
or local authorities, management documents held by the PRPs such as haz-'
ardcus waste shipping manifests, and other information about site charac-
teristics or conditions not contained in any of the above documents.

Field Activities

     o    Field Inspections

    "Field inspections are. an  important oversight mechanism for determin-
ing the adequacy of the work performed: EPA will therefore conduct field
inspections as part of its oversight responsibilities.  The oversight
inspections should be performed in • way that minimizes interference
with PRP sit* activities or undue complication  of field activities.  EPA
will take corrective steps, as described in Section VII and Attachment  IV
of this appendix, if unsatisfactory performance or other deficiencies
are identified.

     Several field-related tasks may be performed during oversight inspec-
tions.  These tasks include:

     On-site presence/inspection - As specified in Section  104(e)(31,
     EPA reserves the right to conduct  on-site  inspections  at any reason-
     able tine.  EPA will therefore establish an on-site presence to
     assure itself of the quality of work being conducted by PRPs.  At  a
     minimum, field oversight will be conducted during critical  times,
     such as the installation of monitoring wells and during sanpling
     events.  EPA will focus on whether the PRPs adhere to  procedures
     specified in the SOW and Work Plan(s), especially those concerning
     QA/QC procedures.  Further guidance regarding  site characterization
                                   A-?"1

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     activities is presented in the RI/FS Guidance, the "Compendium of
     Superfund Field Operations Methods"  (August 1987 - OSWER Directive
     No. 9355.0-141), the "RCRA Ground Water Technical Enforcement
     Guidance Document"  (September 1986 - OSWER Directive No. 995C.1) ,
     the NEIC Manual for Groundwater/Subsurfaee Investigations at
     Hazardous Waste Sites  (U.S. EPA, 1981Q, and OWPE's forthcoming
     "Guidance on Oversight of Potentially Responsible Party Remedial
     Investigations and Feasibility Studies."

     Collection and analysis of samples - EPA may collect a number of
     QA/QC samples including blank, duplicate, and split samples.  The
     results of these sample analyses will be compared to the results of
     PP.P analyses.  This comparison will enable EPA to identify poten-
     tial quality control problems and therefore help to evaluate the
     quality of the PKP  investigation.

     Environmental Monitoring - EPA may supplement any PP.P environmental
     monitoring activity.  Such supplemental monitoring may include air
     or water studies to determine additional migration of sudden
     releases that may have occurred as a result of site activities.

     o    QA/QC Audits

     EPA may either conduct, or require the PRPs to conduct  (if speci-
fied in the Agreement),  laboratory audits to ensure compliance with pro-
per QA/QC and analytical procedures, as specified in the Sampling and
Analysis Plan.  These audits will involve on-site inspections of labora-
tories used by PRPs and  analyses of selected QA/QC samples.  All proced-
ures must be in accordance with those outlined in The User's Guide to
the Contract Laboratory Program,  (U;S. EPA, 1986) or otherwise specified
in the Sampling and Analysis Plan.

     o    Chain*of-Custody

     Chain-of-custody procedures will be evaluated by EPA. "This evalua-
tion will focus on determining if the PRPs and their contractors adhere
to the procedures set forth in the Sampling and Analysis Plan.  Proper
chain-of-custody procedures are described in the National Enforcement
Investigation Center  (NEIC) Policies and Procedures Manual,  (U.S. EPA,
1981b).Evaluation of chain-of-custody procedures will occur during
laboratory audits as veil as during on-site inspections of sampling
activities.

Meetings

     Meetings between EPA,  the State, and PRPs should be held on a  regu-
lar basis (as specified  in  the Agreement) and at critical times during
the RI/TS.  Such critical times nay at a minimum include when the SCW
and the Work Plan are reviewed, the RI is in progress and completed,
remedial alternatives are developed and screened, detailed analysis of
the alternatives is performed, and the draft  and final  RI/TS reports  are
                                   A- 28

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submitted.  These meetings will discuss overall progress, discrepancies
in the work performed, problems encountered  in the performance of Rl/FS
activities and their resolution, community relations, and other related
issues and concerns.  While meetings may be  initiated by either the PRPs
or EPA at any time, they will generally be conducted at the stages of
the RI/TS listed below.

     o    Initiation of Activities

     EPA, the State, and the PRPs may meet at various times before field
activities begin to discuss the initial planning of the RI/FS.  Meetings
may be arranged to discuss, review, and approve the SOW; to develop the
EPA/PR? Agreement; and to develop, review, and approve the Work Plan.

     o    Progress

     EFA may request meetings to discuss the progress of the RI/FS.
These meetings should be held at least quarterly and will focus on the
iter.s submitted in the monthly progress reports and the findings from
EPA oversight activities.  Any problems or deficiencies in the work will
be identified and corrective measures will be requested (see
Section VIII and Attachment IV) of this appendix.

     o    Closeout

     EPA may request a closeout meeting upon completion of the RI/FS.
This meeting will focus on the review and approval of the final RI/FS
report, termination of the RI/TS Agreement,  and any final on-site activi-
ties which the PRPs may be required to perform.  These activities may
include maintaining the site and ensuring that fences and warning signs
are properly installed.  The transition to remedial design and remedial
action will also be discussed during this meeting.

Special Studies

     EPA may determine that special studies  related to the PRP RI/FS are
required.  These studies can be conducted to verify the progress and
results of RI/FS activities or to address a  specific complex -or contro-
versial issue.  Normally, special studies are performed by the PRPs;
however, there nay be cases in which EPA will want to conduct the
independent »tudie«.  The PRPs should be informed of any such studies
and given adequate tine to provide necessary coordination of  site per-
sonnel and resource*.  If not provided for in the Agreement, modifica-
tions to the Work Plan may be required.
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                              ATTACHMENT  IV

                          CONTROL OF ACTIVITIES
Identification of Deficiencies

     Oversight activities may identify unsatisfactory or deficient PRP
p€rfora*j.ce.  The determination of such performance may be based upon
findings such as:

     o    Work products are inconsistent with the SCK or Work Plan;

     o    Technical deficiencies exist in submittals or other RI/FS
          products;

     o    Unreasonable delays occur while perforating RI/FS activities;
          and

     o    Procedures are inconsistent with  the NCP.

Corrective Measures

     The need to perform corrective measures may arise in the event of
deficiencies in reports or other work products, or unsatisfactory per-
formance of field or laboratory activities.  When deficiencies are iden-
tified corrective measures may be sought by:   (1) notifying the PRPs;
U) describing the nature of the deficiency; and  (3) either requesting
the PRFs to take whatever actions they regard as appropriate or setting
forth appropriate corrective measures.  The following subsections
describe this process for each of the two general types of activities
that may require corrective measures.

     o    Corrective Measures Regarding Work Products

     Agency review and approval procedures  for work products generally
allow three types of responses:   (1) approval;  (2) approval with modifi-
cations; and  (3) non-approval.  Non-approval of a work product  (includ-
ing project plans) immediately constitutes  a notice of deficiency.  EPA
will immediately notify the PRPs if any work product is not approved  and
will explain the reason for such a finding.

     Approval with modifications will not lead to a notice of deficiency
if the) Modifications are made by the PRPs without delay.  If the PRPs
significantly delay in responding to the Modifications, the RPH would
issue a notice of deficiency to the PRP project manager detailing  the
following elements»

               A description of the deficiency or a statement describing
               in what Manner the work product was found  to be deficient
               or unsatisfactory;
                                   A-30

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               Modifications that the PRPs should make in the work prod-
               uct to obtain approval;

               A request that the PRPs prepare a plan, if necessary, or
               otherwise identify actions that will lead to an accept-
               able work product;

               A schedule  for submission of the corrected work product;

               An invitation to the PRPs to discuss the matter in a con-
               ference; and

               A statement of the possibility of EPA takeover at the
               PRPs' expense, EPA enforcement, or penalties (as appro-
               priate) .

     o    Corrective Measures Regarding Field Activities

     When the lead agency  discovers that the FRPs  (or their contractors)
are performing the RI/FS field work in a manner that is inconsistent
with the Work Plan, the PRPs should be notified of the finding and asked
to voluntarily take appropriate corrective measures.  The request is
generally made at a progress meeting, or, if immediate action is required,
at a special meeting held  specifically to discuss the problem.  If correc-
tive measures are not voluntarily taken, the RPK should, in conjunction
with appropriate Regional  Counsel, issue a notice of deficiency contain-
ing the following elements:

               A description of the deficiency;

               A request for an explanation of the failure to perforr.
               satisfactorily and a plan for addressing the necessary
               corrective  measures;

               A statement that failure to present an explanation may be
               taken as an admission that there is no valid explanation;

               An invitation to discuss the matter in a conference
               (where appropriate);

               A statement that stipulates penalties may accrue or are
               accruing, project termination may occur, and/or civil
               action may  be initiated if appropriate actions are not
               taken to correct the deficiency) and

               A description of the potential  liabilities  incurred in
               the event that appropriate actions  are not  taken.

Modifications to the work  Plan/Additional Work

     Under the Administrative Order  (or Consent Decree), PRPs agree to
complete the RI/TS, including the tasks required under  either the orig-
inal Work Plan or a subsequent or modified Work Plan.   This may
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include determinations and evaluations  of  conditions  that are unknown at
the time of execution of the Agreement.  Modifications  to the original
RI/FS Work Plan  are  frequently  required as field work progresses.  Work
not explicitly covered in the Work Plan is often retired and therefore
provided for  in  the  Order.  This work is usually identified during the
P.I and is driven by  the need for further information  in a specific area.
In general, the  Agreement should provide for  fine-tuning of the Ri, or
the investigation of an area previously unidentified.   As it becomes
clear what additional work is necessary, EPA  will notify the PRPs of the
work to be performed and determine a schedule  for completion of the work.

     ZPA must ensure that clauses for modifications to  the Work Plan are
included in the  Agreement so that the PRPs will carry out the modifica-
tions as the  need for them is identified.   To  facilitate negotiation on
these points, EPA may consider  one or more of  the following provisions
in the Agreement for addressing such situations:

          Defining the limits of additional work requirements;

          Specifying the dispute resolution process for modified Work
          Flans  and  additional  work requirements;

          Defining the applicability of stipulated penalties to any addi-
          tional work which the PRPs agree to undertake.

Dispute Resolution

     As discussed elsewhere in  this guidance,  the RI/FS Order developed
between EPA and  the PRPs sets forth the term* and conditions for con-
ducting the RI/FS.  An element  of this  Agreement is a statement of the
specific steps tc be taken if a dispute arises between  EPA  (or its
representatives) and the PRPs.  These steps should be well defined and
agreed upon by all signatories  to the Agreement.

     A dispute with  respect to  the Order is followed  by a specific
period of discussion with the PRPs.  After the discussion period, EPA
issues a final decision which becomes incorporated into the Agreement.
Administrative Orders should clarify that  with respect  to all subnittals
and work performed, CPA will be the final  arbiter.  The court, on the
other hand, is the final arbiter for Consent  Decrees.

Penalties

     Kt an incentive for PRPs to properly  conduct the RI/FS and correct
any deficiencies discovered during the  conduct of the Agreement, EPA
should include stipulated penalties.  Section 121 provides  up to S25.0CC
per day in stipulated penalties for violations of a Consent Decree while
Section 122 allows EPA to seek  or impose civil penalties  for violations
of Administrative Orders.   Penalties should  begin to accrue on the firs:
3In order to provide for  stipulated penalties in an Administrative Order
 the parties must vpluntarily  include them in the terms of the Agreement,
                                   A-32

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day of the deficiency and continue  to  be assessed until  the  deficiency
is corrected.  The type of violation  (i.e.,  reporting  requirements
vs. implementation of construction  requirements), as veil as the amounts,
should be specified as stipulated penalties  in the Agreement to avoid
negotiations on this point which nay delay the correction.  The amounts
should be set pursuant to the criteria of Section 109  and as such must
take into account the nature, circumstances, extent, and gravity of the
violations as well as the PRPs' ability to pay, prior  history of viola-
tions, degree of culpability, and the  economic benefit resulting from
noncompliance.  Additional information on stipulated penalties can be
found in DECK'S "Guidance on the Use of Stipulated Penalties in Hazard-
ous Waste Consent Decrees"  (September  27, 1987).

Project Takeover

     Generally, EPA will consult with  PRPs to discuss  deficiencies and
corrective measures.  If these discussions fail, EPA has two options:
(1) pursue legal action to force the PRPs to continue  the work; or
(2) take over the RI/FS.  If taJcing legal action will  not significantly
delay implementation of necessary remedial or removal  actions, EPA may
commence civil action against the noncomplying PRP to  enforce the Admin-
istrative Order.  Under a Consent Decree, the matter would be presented
to the court in which the Decree was filed to enforce  the provisions of
the Decree.

     If a delay in Rl/FS activities endangers public health  and/or the
environment or will significantly delay  implementation of necessary
remedial actions, EPA should move to replace the PRP activities with
FuTid-financed actions.  The RPM will take the appropriate steps to
assume responsibility for the RI/FS, including issuing a stop-work order
to the PRPs and notifying the EPA remedial  contractors.  In  issuing stop
work orders, RPMs should be aware that Fund  resources  may not be automat-
ically available.  But, .in the case of PRP  actions which threaten human
health or the environment, there may be  no  other course  of action.  Once
this stop work, order is issued, a fund-financed RI/FS  will be undertaken
consistent with EPA funding procedures.
WDR376/029
                                   A-33

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             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                           MAY 2 7 1983
                                                OSWER Directive #9834. 9a
MEMORANDUM

SUBJECT:  Interim Policy on Mixed Funding Settlements Involving
          the Preauthorization of States or Political
          Subdivisio
              ~
FROM:     J.finstttn Porter
          Assistant Administrator
          Office of Solid Waste and Emergency Response

          Thomas L. Adams, Jr.
          Assistant Administrator
          Office of Enforcement and Compliance Monitoring

TO:       Regional Administrators, Regions I - X


I.  INTRODUCTION

     The purpose of this memorandum is to establish the Agency's
interim policy on the use of mixed funding settlements that
involve the preauthorization of States or political subdivisions
when such parties are potentially responsible parties.  (PRPs) at
Superfund sites. 1  This memorandum addresses one specific
question that arose during negotiations at a municipal landfill.
The question was whether the Agency could approve a request for
preauthorization submitted by a political subdivision seeking to
file a claim against the Fund for reimbursement of a portion of
response costs at a Superfund site.  The question of whether a
political subdivision is eligible to request preauthorization in
the context of a mixed funding settlement was resolved during a
November 1987 Assistant Administrator Review Team (AART) meeting.
This policy formalizes that decision and is expanded to include
States as well.
     1  This policy supplements the guidance on  "Evaluating Mixed
Funding Agreements Under CERCLA."  The Mixed Funding guidance
presents a method for determining whether it nay be appropriate
to settle for less than 100% of response costs and provides
examples of the types of sites that are good and poor  candidates
for mixed funding.  This guidance was signed on  October  20, 1987
and was issued under OSWER Directive f9834.9.

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                                              OSWER Directive #9836.9a
II.  ISSUE

     Mixed Funding  (Section 122(b)(l))

     Section 122(b) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 as amended by the
Superfund Amendments and Reauthorization Act of 1986 (CERCLA)
authorizes EPA to enter into mixed funding settlements with PRPs.
Section I22(b)(l) authorizes one type of mixed funding where PRPs
agree to perform the response activity and the Agency agrees to
reimburse the PRPs  for a portion of their response costs.  The
Agency implements this type of mixed funding by approving the
PRP's request for preauthorization to undertake the response and
by awarding monies  from the Fund once the response action is
completed.

     The term preauthorization refers to the approval that PRPs
must obtain from EPA prior to the conduct of cleanup actions and
before a claim for  reimbursement of response costs is presented
to the Fund.  If preauthorization is granted, it serves as an
Agency commitment that, if the response is conducted pursuant to
the settlement agreement and the costs are reasonable and
necessary, reimbursement will be available from the Fund as
specified by the agreement.  EPA will grant preauthorization to
PRPs only in the context of settlement agreements. 2

     Although section 1-22 (b)(l) provides authority for mixed
funding, it does not specify a-mechanism for permitting the Fund
to be used for this purpose.  CERCLA's principal claims mechanism
is section 111(a) and the Agency uses this mechanism for
reimbursing PRPs for a portion of their response costs pursuant
to a mixed funding  agreement.

     Reimbursement  of Claims (Section 111(a))

     Section 111(a) provides that the President shall use the
money in the Fund for:

     (1)  payment for governmental response costs incurred
          pursuant  to section 104 ...

     (2)  payment of any claim for necessary response costs
          incurred  by anv other person  ...  (emphasis added).
     2  For a more detailed  discussion  about preauthorization see
the guidance on  "Evaluating  Mixed Funding Settlements Under
CERCLA" cited earlier.

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                                              OSWER Directive 19834.9a
     A question arose on the precise meaning of "any other
person" under section lll(a)(2).  Specifically, the question was
whether, when read in conjunction with section lll(a)(l), "any
other person" means any person other than a governmental entity.
The Agency believes that "any other person" can include
governmental entities when they are PRPs and when they are acting
pursuant to a settlement agreement as discussed below.  Note that
any person who plans to file a claim against the Fund under the
section 111 (a) (2) response claims process must first obtain
preauthorization  (i.e., prior EPA approval).

III.  PREAUTHORIZATION OF STATES OR POLITICAL SUBDIVISIONS

     In considering mixed funding at a site that involves a State
or political subdivision as a PRP, the Region must first
determine whether the offer is an acceptable candidate for mixed
funding.  This determination must be made at all sites where
mixed funding is being considered and must be made by applying
the criteria established in the "Interim CERCLA Settlement
Policy" and the guidance on "Evaluating Mixed Funding Agreements
Under CERCLA." 3

     The Settlement Policy establishes ten criteria that must be
applied to a settlement offer to determine whether it is
appropriate to settle for less than 100% of response costs.  The
Mixed Funding guidance provides a more detailed discussion about
how to apply the ten settlement criteria to mixed funding
settlement offers, including a discussion about which factors
generally make an offer an acceptable candidate for mixed
funding.

     The Region must also consider the following additional
criteria.  States or political subdivisions are eligible to file
claims against the Fund only when:

     (1)  the State or political subdivision is a PRP under
          section 107 at the site; and

     (2)  the State or political subdivision will carry out the
          response pursuant to a settlement agreement under
          section 122.
     3  The "Interim CERCLA  Settlement  Policy" was  issued  under
OSWER Directive  #9835.0  on February  5,  1985.  The Mixed  Funding-
guidance was cited earlier.

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                                              OSWER Directive #9834.9a
     If you have any questions or comments  regarding  this  interim
policy, please contact Kathleen MacKinnon  in  the  Office of Waste
Programs Enforcement at FTS-475-9812.

cc:  Jon Cannon, OWPE
     Lisa Friedman, OGC
     Edward Reich, OECM
     Henry Longest, OERR
     David Buente, DOJ
     Waste Management Division Directors,  Regions I - X
     Regional Counsels, Regions I -  X
     Municipal Settlement Workgroup  Members

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1,^
 \
      >

       i        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
       J                   WASHINGTON. D.C. 20460
                              JUN 21  1988                    D"'CE
                              ««••* b.   |»~~             ,    -    c
                                                     9831.7
MEMORANDUM
SUBJECT:  Supporting  State Attorneys  General  CERCLA  Remedial
          and Enforcement Response Activities at  NPL Sites

FROM:     Henry  L.  Longest,  Director       'l/^JLu^ (/V.
          Office of Emergency  and Remedial  Response

          Jonathan  2^ Carinor/ *«ctlng  Director
          Office/of Waste Programs Enforcement

TO:       Waste /Management Division Directors
          Regions I - X

PURPOSE

     The Agency  has received several  inquiries over  the last  few
months-about the eligibility of  State Attorneys General (AG)  to
receive funds to support their CERCLA response activities at  NPL
sites, and the specific funding  mechanisms  for awarding these
funds.  Administrator Lee M.  Thomas has also  asked that we
clarify the Agency's  position on funding State AGs.

     This memorandum  reaffirms that  it is the Agency's policy to
enter  into cooperative agreements with a single designated  State
lead agency.  However, it also reaffirms that CERCLA funds  may be
available to State  AGs, and  describes three types of cooperative
agreements by which funds may be passed through the  State lead
agency to the State AG.

BACKGROUND

     The Comprehensive Environmental  Response, Compensation,  and
Liability Act of 1980 (CERCLA),  authorizes  EPA to enter into
cooperative agreements with  States to conduct response actions at
hazardous waste  sites.  A Superfund  cooperative agreement award
is the assistance vehicle that transfers funds for response to
the States and documents both EPA and State responsibilities  for
a site.  EPA will only enter into cooperative agreements with the
State  lead agency  (usually the State's pollution  control agency)
as designated by the  State's Governor.

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                                                       9831.7

     To involve other essential State agencies,  such  as the state
AG's  office,  the  State  lead  agency  typically enters  into  an
intergovernmental  agreement  with   these   other  agencies.
Therefore,  the  mechanism  for  providing  funds to  other State
agencies is:

     0    A  cooperative agreement wj.th  the  State  lead  agency;
          along with

     0    A  pass-through  by  the  State  lead agency to  .another
          agency   by  way  of   a   two-party   intergovernmental
          agreement prior to costs being incurred.

PROCEDURES FOR STATES AND EPA REGIONAL OFFICES

The State

     The  State  AG  may  require  Fund  money   to  conduct their
responsibilities  for the State's  CERCLA  program,  or the State
lead  agency  may  require  State  AG  support   to  conduct their
responsibilities.   In  either case,  any  request for  funding from
EPA must come from the state lead agency.

     Therefore,   in   developing  a   cooperative  agreement
application, the State lead agency must:

     °    Indicate which  portion of  the funds  requested  are  for
          the State AG's efforts; and

     0    Identify the  specific  tasks  the State AG  will  conduct
          with the funds.

The EPA Regional Office

     When reviewing  cooperative  agreement  applications,  Regional
offices must  consider  how CERCLA  funds  will be allocated among
Stat* agencies, such as the  State  AG,  whose  participation may be
necessary or required to  achieve cleanup of  the site.  This step
is  essential,  in order to  determine that the  Stat*  lead agency
will   have  the  necessary  technical   and   legal   support   for
completing  all  remedial  and  enforcement response activities at
the site.

     Knowledge of  each  State agency'•  roles and responsibilities
will also enhance communication between those offices and between
the  State  lead  agency  and Regional  office  in developing  and
implementing State projects.

     Therefore, in reviewing a cooperative agreement application,
the Region must determine:

-------
                                                       9831.7

     0    Whether the funding requirements and  tasks  of the State
          AG  are   addressed;  and  if  not   reflected  in  the
          application,

     0    Whether the  State AG has  been notified and consulted
          with  by  the State  lead agency  prior  to awarding the
          agreement.

This  will  ensure  that the  State AG  is  fully  informed  of the
project, and  will  have the  necessary  or required resources and
staff to uphold its project responsibilities.

TYPES OF COOPERATIVE AGREEMENTS AVAILABLE FOR AG  FUNDING

     Generally,  the  three  existing   types  of  cooperative
agreements will continue  to  be  used to  fund  State AG efforts.
These  are  (1)   a   Core   Program  Cooperative  Agreement;   (2)  a
Cooperative Agreement for Support Agencies at Federal-lead sites;
and (3)  a Site-specific Cooperative Agreement.

Core Program Cooperative Agreements (CPCAs)

     CPCAs were created by EPA to ensure  that  each State has the
funds it needs  to  develop and manage a program to carry out its
CERCLA  activities   at  NPL  sites.    Under a  CPCA,  a  State may
receive up  to  $250,000 to cover administrative,  management and
coordination  costs  associated with  building,  strengthening and
maintaining a state's CERCLA program.

     Under  a  CPCA,  the  State  lead  agency  requests  funds for
developing,   managing  and/or  supporting  the   State's  CERCLA
response program.  Of the several functions that  are  eligible for
CPCA funding  some portion of  the  $250,000  may  be  provided to the
State AG for  its assistance in these areas, including such things
as:

     0    Development  and  refinement  of  a   State  CERCLA
          enforcement program and  procedures for implementation;

     0    D*v«lopm«nt of  legal authorities;

     0    Protocols for document review for legal sufficiency and
          enforceability;

     0    Legal  assistance,   such  as   for  coordinating the
          identification  of   ARARs   and  development   of
          administrative  records; and

     0    Other general legal assistance as appropriate.

-------
                                                       9831.7

     With specific  regard to the above tasks,  if  the State lead
agency needs to  identify  a  portion  of the State's  CPCA funds for
the  State  AG,  it  must do  so  both  in the  cooperative agreement
application  and  statement  of .work.   If  the State AG  agrees  to
provide   such   assistance,  a   copy   of   the  intergovernmental
agreement to this effect must be attached to the application.

     Please  refer  to the  "Final  Guidance on State  Core Program
Funding Cooperative  Agreements,"  dated December 18,  1987,  (OSWER
Directive Number 9375.2-01) for more information on CPCAs.

Cooperative Agreements for  Support Agencies at Federal-lead sites

     EPA  coordinates  all  site-specific  Federal-lead  response
activities  with  States.    To  monitor progress  and  meaningfully
consult with EPA at  these  sites, States may review significant
documents produced during  a  project, attend important meetings
about  site  progress, and  make  site visits.   Such site-specific
activities  performed  by   the  State  are  known  as  management
assistance.

     Management  assistance applies to Federal-lead  enforcement
sites as well as Federal-lead Fund-financed sites.  With specific
reference to Federal-lead  enforcement sites,  States  may request
management  assistance  funds  so  that they  may  be   involved  or
participate  in  programmatic  discussions  and  review activities
with EPA and potentially responsible parties  (PRPs).   One example
of'" this  programmatic  responsibility  may   be  making  a  legal
determination of applicable State requirements for an NPL site as
part of the ARAR identification  process.'  Management assistance
funds  are  available  to  the State  lead  agency  for  these tasks.
Assistance  for  such  tasks may  be  provided by  the  State  AG.
However,  even  where the  State AG  is directly  responsible for
various tasks, the State lead agency must still request the funds
from EPA for the State AG.

Cooperative  Agreements for Site-specific Response at State-lead
Sites  (Single or Multi-Site Agreements)

     EPA  and  the   State  will  typically  negotiate   annually  to
determine who  will have the lead for response activities at NPL
sites.  This holds  true  for both Fund-lead and enforcement-lead
sites.  Again, with specific reference to enforcement sites, EPA
and  the  State  may  agree to  designate  a  site as State-lead
enforcement.   If so,  the State  nay  receive  funding for various
enforcement  activities,  including (1) PRP searches;  (2)  issuance
of notice letters  to PRPs;  (3)  negotiations with PRPs to  secure
their commitment for site cleanup;  (4) administrative  or  judicial
enforcement  actions to compel  PRP  cleanup;  and (5)  oversight of
PRP response activities.  The State lead  agency may either  have

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                                                       9831.7

the  legal  capability  or responsibility  to  perform  these  tasks
itself,  or  it may request  or require that the  State AG perform
these  tasks.    In  the  latter case,  the  State lead  agency  must
request  the  funds in  its cooperative agreement  application for
State  AG  performance  of  these  tasks.    Under  a  multi-site
cooperative agreement,  the State  lead agency may  request  funds
for the State AG allocated to the sites at which the State AG may
have a role.

     Please  see OERR's  manual  on "State  Participation in the
Superfund Program" and  OWPE's "Interim Final  Guidance Package on
Funding  CERCLA State  Enforcement  Actions at  NPL  Sites,"  dated
April 7, 1987,  (OSWER Directive Number 9831.6)  for additional
information on management assistance  and site-specific
cooperative agreements.

STATUS OF FUNDING TO SUPPORT STATE AG EFFORTS

     For your information, we have attached a  list of States
which have identified funds for their State AG in either a CPCA
or site-specific cooperative agreement with EPA.  The site-
specific cooperativ-e agreements which have funds for  pass-through
to the State AG are currently all related to management
assistance at enforcement sites.

     Should you have any questions on this matter, please contact
Tony Diecidue at FTS-382-4841  (enforcement-lead) or John Banks
(Fund-lead) at FTS-382-2450.

Attachment

cc:  Superfund Branch Chiefs, Region  I - X
     Superfund Section Chiefs, Region I - X
     Regional Counsels,  I - X
     Grants Administration Contacts,  Region I  - X
     National Association of Attorneys General

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                                6

                                                       9831.7

                            ATTACHMENT

          STATUS OF FUNDING TO SUPPORT STATE AG EFFORTS*

               SITE-SPECIFIC                 CORE PROGRAM
REGIOff    COOPERATIVE AGREEMENTS        COOPERATIVE AGREEMENTS

  1            None                          None

  2            None                     Regional discussions with
                                        Puerto Rico indicate they
                                        may  fund AG.

  3            None                     Virginia and Maryland

  4            None                     Regional discussions with
                                        South  Carolina indicate
                                        they may fund AG.

  5            None                          None

  6       Management assistance         None.  All State lead
          CA at an enforcement          agencies have own  legal
          site  (Combustion Inc./        support.
          LA) .

  7            None                          None

  8       Colorado                      Colorado

  9             None                          None

 10       Oregon  and Idaho                  None
Information  gath«r«d from phone survey of Regions I-X.

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  ^60 Sriff

/ ^^  i        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
        I                  WASHINGTON. D.C. 20460
                                                    SOL.D W4S" iNC =M£BG:NC
                            JUN  7  lose
 MEMORANDUM
 SUBJECT:   Transmittal of Guidance on Documenting Decisions not to
           Take Cost Recovery Actions
 FROM:      JonatQw, Acting Director
           Office of Waste Programs Enforcement (OWPE)

 TO:        Addressees

      Attached is the "Guidance on Documenting Decisions not to
 Take Cost Recovery Actions".  This document Was previously
 circulated for comment with the Draft Superfund Cost Recovery
 Strategy.   The guidance discusses the importance of documenting
 decisions not to pursue cost recovery actions and provides
 procedures for drafting memoranda to document such decisions.
 The  procedures should be followed for every site where a decision
 is made not to pursue an action for the recovery of unreimbursed
 Fund expenditures.

      In addition to implementing the procedures for new cases as
 they arise, each Region should review the backlog of sites where
 a decision, express or implicit, was made not to pursue cost
 recovery.   A cost recovery close-out memorandum should be written
 for  every site in this backlog.  To conserve resources and yet
 address this backlog, Regions should initially draft close-out
 memoranda for only those sites that will not be pursued further
 and  the total unreimbursed response costs exceed two hundred
 thousand dollars.  Among those cases, the Regions should
 concentrate first on close-out memoranda for those sites with
 larger amounts of unrecovered costs.  Once that backlog has been
 addressed, the less than two hundred thousand dollar cases should
 be revisited and closed out, if appropriate.

 Attachment

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Addressees:  Directors, Waste Management Divisions
               Regions I, IV, V, VII, VIII
             Director, Emergency and Remedial Response Division
               Region II
             Directors, Hazardous Waste Management Divisions
               Regions III, VI
             Director, Toxics and Waste Management Division
               Region IX
             Director, Hazardous Waste Division
               Region X
             Directors, Environmental Services Divisions
               Regions I, VI, VII

-------
               UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                          WASHINGTON. D.C.  20460
                                                 OSWER Directive No. 9832.11


                          JUN  7 --
MEMORANDUM

SUBJECT:  Guidance on Documenting  Decisions  not to Take  Cost
          Recovery Actions

FROM:     Jonathan Z^<(nWbn, Acting  Director
          Office of Waste Programs Enforcement  (OWPE)

TO:       Addressees
PURPOSE

     This document  is  intended to provide  information  on the
content of close-out memoranda which  should  be  written for each
site where the Agency  does  not intend,  on  the basis  of certain
information, to pursue an action for  recovery of  unreimbursed
Hazardous Substances Superfund (Fund) monies.

BACKGROUND

     Pursuant to the Comprehensive  Environmental  Response,
Compensation, and Liability Act of  1980, as  amended  by the
Superfund Amendments and Reauthorization Act of 1986 (CERCLA) ,
the Agency is charged  with  management of the Fund.   Fund monies
expended in response to releases or threatened  releases of
hazardous substance* are fully recoverable pursuant  to §107 of
CERCLA as long as response  actions  conducted were not
inconsistent with the  national contingency plan (NCP).

     Because of th« Agency's accountability  for management of the
Fund, an affirmative decision whether or not to pursue a cost
recovery action must be made for each removal  action and remedial
action in which CERCLA funds are expended.  Decisions  to pursue

-------
                                          OSWER Directive No.  9832.11


cost recovery are reflected in referrals and settlements.
Decisions not to proceed with cost recovery efforts are to be
documented in close-out memoranda.  Determinations not to pursue
cost recovery are important for satisfying EPA management's
accountability for cost recovery on a site by site basis.
Additionally, by documenting which cases will not be pursued,  the
close-out memoranda will aid in planning referrals and projecting
revenues to the Fund in future years.

PRE-DECISIONAL ACTIVITIES

     In removal actions where time permits and in remedial
actions, the Regions generally will conduct a PRP search and seek
to have the PRPs undertake the clean-up prior to funding a
response action.  PRP searches that are not essentially complete
when the response starts are completed during or after the
federally-funded action.  While the primary•purposes of a PRP
search are to identify PRPs who may be induced to perform work
and to provide evidence for cost recovery lawsuits, PRP searches
also form a basis for determining not to pursue a cost recovery
action.  For example, it may form a basis for not filing where*
PRPs cannot be identified, where the evidence linking possible
PRPs to a site is very tenuous, or where PRPs" are not viable.

TIMING OF THE MEMORANDUM

     CERCLA §113 establishes the statute of limitations for
recovery of post-SARA response costs.1  The statute of
limitations provision, which was added by SARA, applies only to
those response actions initiated after the effective date of
SARA.  To minimize opportunities for challenges in litigation,
however, the Regions should operate as though the SARA statute of
limitations applies to all removal and remedial actions, and plan
the referral of viable cases consistent with that assumption.
     V CERCIA §113 states "An initial action for recovery of
costs referred to in section 107 must be commenced—(A) for a
removal action, within 3 years after completion of the removal
action, except that such cost recovery action must be brought
within 6 years after a determination to grant a waiver under
section 104(c)(l)(C) for continued response action:  and (B) for a
remedial action , within 6 years after initiation of physical on-
site construction of the remedial action, except that, if the
remedial action is initiated within 3 years after completion of
the removal action, costs incurred in the removal action may be
recovered in the cost recovery action brought under  this
subparagraph."

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                                  3       OSWER Directive No.  9832.11


     When to prepare a cost recovery close-out memorandum will
depend upon the specifics of the case.  Normally, the decision
not to pursue cost recovery should be made some time after the
case would be "ripe" for referral of a judicial action for cost
recovery.2  The close-out memorandum may be prepared and signed
as soon as the Region is reasonably sure that information
developed later will have no bearing on viability of a cost
recovery action.  For example, if a thorough PRP search is
conducted prior to the commencement of a federally funded
remedial design but no viable PRPs are found, a cost recovery
close-out memorandum may be prepared while the remedial design is
underway.  If there is a settlement for less than all costs and
the Region does not intend to recover the remaining costs (e.g..
where there are no viable PRPs), this must be addressed in the
ten point settlement analysis  (if known at that time) or a
separate close-out memorandum.  Of course, signing of a close-out
memorandum does not extinguish or compromise any cost recovery
rights of EPA and does not foreclose the Agency from re-opening
the case in the event additional parties are discovered, new
evidence is developed, or any other reason.' Moreover, to
facilitate planning of referrals and projections of revenues, j.t
is advantageous to close out cases as soon as possible.  In any
event, the memorandum must be prepared prior ^to the relevant real
or potential statute of limitations date.

CONTENT OF THE MEMORANDUM DOCUMENTING A DECISION NOT TO PURSUE
COST RECOVERY

     If all available enforcement information on a site points to
a recommendation not to pursue cost recovery, a close-out
memorandum should be written by the staff program person assigned
to the case and, where legal issues are involved, in consultation
with the Office of Regional Counsel.  The memorandum must be
signed by the program division director (in most regions this is
the Waste Management Division Director).  The Memorandum and its
supporting documents  (e.g., the PRP Search Report, the Action
Memorandum) should be placed in the permanent site file but
should remain confidential since enforcement discretion is
involved.  As an enforcement confidential document, the
memorandum is not available under the Freedom of Information Act.
The memorandum should not be included in the administrative
record.
       2/ As noted in the June  12,  1987 guidance  "Cost Recovery
  Actions/Statute of Limitations",  OSWER  Directive No. 9832.3-1A,
  removal actions are ripe  for  referral of  a  judicial action
  immediately following  completion  of the action.  Remedial  sites
  become ripe for referral  of a judicial  action concurrent with  the
  start of the remedial  action.

-------
                                  4       OSWER Directive No.  9832.11


     The memorandum should include four sections:  A. Site
Description; B. Work Conducted and Associated Costs;
C. Discussion of Basis not to Pursue Cost Recovery; and D.
Cone.usion.

A.  Site Description.  This section should briefly identify the
site and its location, and the EPA identification number  (12-
digit EPA ID #).  It should very briefly describe the
environmental condition of the site.  References to an Action
Memorandum or Remedial Investigation/ Feasibility Study Report
should be utilized to keep the memo brief.

B.  Work Authorized and Conducted and Associated Costs.  This
section should briefly describe the action(s) taken by EPA (or a
state under a cooperative agreement or a contractor) on the site
and the initiation and completion date of the response action(s)
taken.  In addition, this section should provide an estimate of
the amount of money spent or expected to be spent for all past
and future response actions.

     This section should also note any previous settlement(s)
(whether for work or cost recovery) and the dollar value  of the
settlement(s).

c.  Discussion of Basis not to Pursue Cost Recovery.  This
section should include the information that leads the Division
Director to the conclusion that further cost recovery efforts
should not occur.  The memorandum must clearly state the  reason
that the decision was made not to pursue cost recovery at the
site.  Possible reasons include:

1) No PRPs were identified for the site.  The potentially
responsible party search report or other documentation of the
completed PRP search effort should be referenced.

2) "he PRPs identified in the PRP search are not financially
viable.  A written evaluation of the ability of any  identified
PRPs to satisfy a judgment for the amount of the claim or to pay
a substantial portion of the claim in settlement should be
conducted during the PRP search.3  The close-out memorandum
should reference the results of the evaluation.

3) The available evidence does not support one or more essential
elements of a prospective case and there is no reason to  believe
that such evidence can be discovered or developed  in the  future.
     3/  The Potentially Responsible Search Manual,  (OSWER
Directive No. 9834.6) provides information on how to go about
collecting information on the financial status of companies and
individuals.

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                                  5       OSWER Directive No,  9832.11


See the August 26, 1983 guidance document on Cost Recovery
Actions Under the Comprehensive Environmental Response.
Compensation, and Liability Act of 1980 (OSWER Directive No.
9832.1) for a further discussion of the essential elements of a
cost recovery action.

4) The legal case is so questionable that cost recovery should
not be pursued.  The close-out memorandum should identify what
legal issues (e.g..  statute of limitations)  would impair
successful cost recovery efforts.

5) The Agency lacks resources to pursue the case.  This reason
may only be used for those sites where total costs of response at
the site do not exceed two hundred thousand dollars and
settlement efforts have been exhausted.  Some actions will be
filed where expenditures are less than $200,000.  While such
small cases should not automatically be closed out for this
reason, some may have to be.  For example, resources for very
small cases for cost recovery efforts beyond the issuance of
demand letters may not be available prior to the expiration of
the statute of limitations.  Sites closed out solely on this
basis should not be closed out until it has been determined that
there will not be resources to pursue an actfbn prior to the
expiration of the statute of limitations.

6) Other reasons.  There may be reasons, not identified above,
that form the basis for making a decision not to pursue cost
recovery (or further cost recovery) at a particular site.  One
example is the existence of an agreement by the PRP(s)  (in the
form of a consent order or decree) to conduct the response
action(s) approved by EPA.  While the Agency may not have waived
explicitly in the settlement some or all of oversight costs
incurred, the Agency may decide later not to pursue those costs
because the PRP(s) has been cooperative in agreeing to  conduct
work.4  In this example, if there are non-settlors, the close-out
memorandum must analyze the case against them based upon the
factors delineated above.  A low dollar threshold does  not
necessarily apply to a case where there are recalcitrant non-
settlors.


     Each close-out memorandum prepared must contain at least one
of the above reasons but should contain all the reasons that
exist.

D.  Conclusion.  The conclusion should restate the amount of the
total response costs expended or projected for the site not
     4/  See the Interim CERCIA Settlement Policy.
December 5, 1984, OSWER Directive No. 9835.0.

-------
                                  6       OSWER Directive No. 9832.11


previously recovered.  It should also restate the basis for not
pursuing cost recovery at the site.

NEW INFORMATION  In the event that a Cost Recovery Close-Out
Memorandum has been signed and new relevant information comes to
light, the case should be re-examined to determine whether the
decision not to proceed with cost recovery efforts is still
valid.  Factors -3 be reviewed included the total dollar amount
of funds expended or to be expended; the relevant statute of
limitations date; and the changes to the strength of the case
resulting from the new information.

REPORTING REQUIREMENTS

     OWPE is incorporating reporting requirements for cost
recovery close-out memoranda into the CERCLIS system.  Guidance
on using the system to report the information contained in the
close-out memoranda will be issued in the future.

CONCLUSION

     Close-out memoranda are necessary for EPA to effectively
manage the Hazardous Substance Superfund.  Iff order to
effectively budget future Fund actions, EPA must know which sites
have unrecoverable costs associated with them.  The close-out
memorandum discussed in this guidance will provide the Agency
with a means of tracking those sites with no potential for return
and allow them to be removed from consideration for further cost
recovery action.  If you have any questions concerning this
guidance please contact Carolyn Me Avoy of the Guidance and
Oversight Branch, OWPE, at FTS 475-8723.


Addressees:  Directors, Waste Management Divisions
               Regions I, IV, V, VII, VIII
             Director, Emergency and Remedial Response Division
               Region II
             Directors, Hazardous Waste Management Divisions
               Regions III, VI
             Director, Toxics and. Waste Management Division
               Region IX
             Director, Hazardous Waste Division
               Region X
             Directors, Environmental Services Divisions
               Regions I, VI, vil

cc:  Regional Counsel, Regions I-X
     Regional Counsel Waste Branch Chiefs, Regions I-X
     Superfund  (Enforcement) Branch Chiefs, Regions I-X
     Superfund  (Enforcement) Section Chiefs, Regions I-X

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                Federal Register / Vol. 53.  No. 138 / Tuesday. July 19.  1938 / Proposed Rules
27268
ENVIRONMENTAL PROTECTION
AQCNCY

40 CFR Parta 117,302, and 355

[P*l.-3307-3]

Reporting Exemption* for Federally
Permitted Reieeee* of Hazardous
Subctanoea
                                      into the environment require notification
                                      under CERCLA.
                                      DATES: Comments must be submitted on
                                      or before September 19.1968.
      r Environmental Protection
Agency (EPA).
ACno»e Propoeed rule.	

•UMMAMY: Section 103(t) of the
Comprehensive Environmental
Response. Compensation, and Liability
Act of 1980 (CERCLA). as amended
requires that the person in charge of a
vessel or facility from which a
hazardous substance has been released
in a quantity that is equal to or greater
than its reportable quantity (RQ) shall
immediately notify the National
Response Center of the release. Section
102(b} sets an RQ of one pound of
hazardous substances, except those for
which RQs have been established
pursuant to section 311a(b)(4) of the
clean Water Act Section 102(a)
authorizes the U.S. Environmental
Protection Agency (EPA) to adjust RQs
for hazardous substances and to
designate as hazardous substances
those substances that when released
into the environment may present
substantial danger to the public health
or welfare or the environment
  The notification requirement under
sections 103(a) and 103(b) of CERCLA
applies to any release of a hazardous
substance "other than a federally
permitted release." Section 101(10) of
CERCLA defines "federally permitted
release" in terms of the discharge
requirements of a number of State and
Federal programs. Section 107(j) of
CERCLA also exempts a -federally
permitted release" from liability under
CERCLA for response costs and
damages incurred due to the release.
  The purpose of this rulemaidng is to
clarify the federally permitted release
exemption from CERCLA release
reporting and liability provisions.
Today's proposed rule also addresses
this exemption from the notification
requirements under Title in of the
Superfund Amendments and
Reauthorization Act of 1966. The
Agency also proposes in this rule to
make conforming changes to the
regulation (40 CFR Pan 11?) describing
the notification requirements for
releases of hazardous substances under
section 311 of the Clean Water Act
Finafiy. this rulemaking addresses
several issues related to which releases
                                        Coaunentt: Comments should be
                                      submitted in triplicate to: Emergency
                                      Response Division. Superfund Docket
                                      Clerk. Attention: Docket Number 101(10)
                                      FPR. Room LG-100, U.S. Environmental
                                      Protection Agency. 401M Street SW,
                                      Washington. DC 20460.
                                        Docket: Copies of materials relevant
                                      to this rulemaking are kept in Room LG-
                                      100. at the above address. The docket is
                                      available for inspection  between 9*30
                                      a A. and 4 A) pan.  Monday through
                                      Friday, excluding Federal holidays.
                                      Appointments to review the docket  can
                                      be made by calling 202/382-3046. As
                                      provided in 40 CFR Part 2. a reasonable
                                      fee (the first 50 pages aze free and each
                                      additional page costs 120) may be
                                      charged for copying services.
                                      POM fMrrHm  iNPOMsATiOM CONTACT:
                                      Mr. Hubert Walter*.  Project Officer.
                                        •Response Standards and Criteria
                                        Branch. Emergency Response Division
                                        (WH-548B). U.S. Environmental
                                      • Protection Agency, 401 M Street SW..
                                        Washington. DC 20460. (202) 382-2463;
                                            or the
                                      RCRA/Superfund  Hotline. 1-800/424-
                                        9358: in Washington. DC 1-202/382-
                                        3000.
                                        The toll-free telephone number of the
                                      National Response Center is 1-600/424-
                                      8802: in the" Washington. DC
                                      metropolitan area, the number is 1-202/
                                      426-2675.
                                      SUPPLXMINTAKY INPOftMATtON: The
                                      contents of today's preamble are listed
                                      in the following outline:
                                      I Introduction and General Comments
                                        A. Background
                                        B. Relationship to  Reportinj Under Title III
                                      IL Elements of the Exemption
                                      OL Notification for Certain Types of Releases
                                        A. to General
                                        & PCS Waste Disposal
                                      IV. Dtscharetes to POTWi
                                      V. Retaliatory Analyses
                                        A. Executive Order No. 122*1
                                        B. Regulatory Flexibility  Act
                                        C Paperwork Reduction  Act

                                      L Introduction **"^ General Comments

                                      A. Background
                                        The Comprehensive Environmental
                                      Response. Compensation, and Liability
                                      Act of 1960 (Pub. L. 96-510). 42 US.C
                                      9601 ft MO. (CERCLA or the  Act),
                                      enacted on December 11.1980. and
                                      amended by the Superfund Amendments
                                      and Reauthorization Act of 1966 (SARA)
                                      (Pub. L 99-499), establishes broad
                                      Federal authority to  respond to releases
                                      or threats of releases of hazardous
substances from vessels and faculties.
Section 101(14) of CERCLA defines th«
term "hazardous substances" chiefly b.
reference to other environmental
statutes with authority further granted
to the U.S. Environmental Protection
Agency (EPA) to designate additional
hazardous substances under CERCLA
section 102(a). The CERCLA list
currently contains 721 hazardous
substances.
  Section 103(a) of the Act requires that
as soon as the person in charge of a
vessel or facility has knowledge of a
release of a hazardous substance from
such vessel or facility in a quantity
equal to or greater than the reportable
quantity (RQ) for that substance, the
person shall notify the National
Response Center immediately. Section
102(b) of CERCLA establishes RQs for
releases of hazardous substances at one
pound except for those substances
whose RQs were established at a
different level pursuant to section
311(b)(4) of the Clean Water Act (CWA).
Section 102(a) of CERCLA authorizes
the EPA Administrator to adjust all of
these RQs by regulation (see 40 CFR
302.4).
  Section 109 of CERCLA and .section
325 of SARA Title ffl authorize EPA to
assess civil penalties for failure to  repo-*-
releases of hazardous substances that
equal or exceed their RQs- Section 103
of CERCLA. as amended authorizes
EPA to seek criminal penaities-for
submitting false or misleading
information in a notification made
pursuant to CERCLA section 103. and
increases the maximum penalties and
years of imprisonmsnt for violation of
the CERCLA section 103 reporting'
requirement
  One of the exemptions from section
103 reporting requirements is for
"federally permitted releases." The
definition of "federally permitted
release" in CERCLA section 101(10)
specifically identifies releases permitted
under other environmental statutes.
including the following general types of
releases:
  • Discharges covered by a National
Pollutant Discharge Elimination System
(NPDES) permit permit application, or
permit administrative record:
  • Discharges in compliance with a
legally enforceable permit for dredged
or fill materials under section 404 of the
CWA:
  • Releases in compliance with a
legally enforceable Resource
Conservation and Recovery Act (RCRA)
hazardous waste management facility
final permit
  • Releases in compliance with a
legally enforceable permit under the

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                 Federal Register  /  Vol. 53.  No. 138  /  Tuesday.  |uly  19. 1988  /  Proposed Rules
                                                                     27289
Marine Protection. Research, and
Sanctuaries Act
  • Any injection* of fluids authorized
under federally approved underground
injection control programs (including
federally authorized State programs)
pursuant to Part C of the Safe Drinking
Water Act
  • Any air emissions subject to permit
or control regulations under certain
provisions of the Clean Air Act (CAA):
  « Any injections of fluids or other
materials authorized by applicable State
law for the purpose of stimulating or
treating wells for the production of
crude oil. natural gas, or water, or for
other production or enhanced recovery
purposes:
  • The introduction of any pollutant
into a publicly owned treatment works
when such pollutant is specified in and
in compliance with pretreatment
standards and a pretreatment program'
submitted to EPA for approval: and
  • Any release of source, special
nuclear, or byproduct material in
compliance with a legally enforceable
license, permit regulation, or order
issued pursuant to  the Atomic Energy
Act
  la the May 25.1983 Notice of
Proposed Rulemaking (NPRM) (48 FR
23552) to adjust certain RQs. EPA
explained the Agency's interpretation of
each of the types of releases exempted
by the definition of "federally permitted
release." EPA has decided to repropose
the rule for federally permitted releases
today rather than publish a final rule
because of the amount of time that has
passed since the original proposal.
Today's proposed regulation would add
a definition of "federally permitted
release" to 40 CFR 302.3. Definitions.1
  EPA received many comments on
various aspects of the federally
permitted release exemption, most of
which urged a broader interpretation of
one or more of the exemption categories.
General comments on the scope of the
exemption are discussed below.
followed by discussion of comments on
specific types of federally permitted
releases.
  Several commenten discussed the
potential duplication between CERCLA
reporting requirements and reporting
requirements under existing permit
programs for releases exceeding levels
set by the terms of the permit These
commenten suggested that because
permit programs already may require
notification of a regulatory authority in
the event of a release exceeding permit
levels, such releases should be exempt
  1 Furtter. today I propou) r*viMi tht dtfinition
of -|«|MM~ to rtftect SARA •mtndmcnl! to
CERCLA section lOl'.ZM.
from notification when permitted levels
are exceeded by an RQ or more.
CERCLA section 101(10). however.
generally limits the federally permitted
release exemption to those releases "in
compliance with" permitted or
regulatory requirements. A
straightforward interpretation of the
statute indicates that if a release
exceeds permitted levels, it is not "in
compliance with" the permit and cannot
be "federally permitted." Therefore, if
the amount of the release exceeding the
permitted level Le. the portion of the
release that is not federally permitted, is
equal to or exceeds the RQ. the release
must be reported immediately to the
National Response  Center. This
approach also avoids the numerous and
unnecessary reports that could be
generated by the reporting of small
permit excursions that are better
addressed by the permitting authority.
  EPA believes that its interpretation is
required by the plain language of the
statute and is essential to ensure
adequate protection of public health and
the environment The Agency believe*
that CERCLA reporting and reporting
under permit programs is not applicative
because there are significant differences
between the purposes served by
CERCLA notification and the purposes
of permit programs. The permit
notification requirements and the
information that is reported under
permit programs may differ from one
program to another. If permit
notification requirements were allowed
to suffice for CERCLA  notification, the
information available to the CERCLA
program on releases might be
inconsistent and incomplete. Permit
programs also differ in their reporting
mechanisms and do not always require
immediate notification. In some cases.
releases in excess of permitted levels
need only be reported  at specific
Intervals (e.g~ monthly). Moreover.
releases in excess of permit levels are
reported to different Federal and State
authorities, depending upon the permit
CERCLA requires immediate
notification to a central office, the
National Response Center, as soon as
the person in charge has knowledge of a
release equal to or exceeding an RQ. so
that timely response may be initiated if
the appropriate government authority
determines that the release may present
substantial danger to public health or
the environment
  Moreover. EPA is not convinced that
requiring persons in charge of a vessel
or facility to make additional telephone
calls (to the National Response Center.
the loeal community emergency
coordinator, and the State emergency
response commission) to a toll-free or
local number constitutes an undue
burden on the regulated community.
Agency seeks comments on its
interpretation of the burdens and the
benefits of requiring reporting under
CERCLA and Federal or State permit
programs.
  Several commenten recommended
that releases be considered federally
permitted releases (and therefore
exempt from CERCLA notification and
liability provisions) if they are exempt
from regulation by the statutes listed in
CERCLA section 101(10). EPA believes
that exempting such releases would be
contrary to the purpose of the
notification requirements, which is to
protect human health-and the
environment by requiring that
responsible authorities be notified of
releases that may require a timely
response. The exemption of a type of
release from regulation under a
particular statute may have little or no
bearing on whether a Federal response
action might be needed for a specific
release.
  Examples illustrate the disparate
reasons for exemptions. For instance.
ownen or operator* of certain solid
waste disposal facilities that handle
hezardous waste only from generator!
of less than 100 kg. per month of
nonacuteiy hazardous waste (See 40
CFR 281.5) are exempt from the
requirement to obtain a hazardous
waste management facility permit under
section 3005 of RCRA. The exemption is
based-on a balancing of the
administrative burden of including such
wastes in the Subtitle C system against
the threat the Agency determined would
be posed by disposing of the wattes in
unpermitted facilities (45 FR 33066.
33102-33105 (May 19.1980)). Certain
types of hazardous waste recycling
activities—for example, the act of
reclamation of a hazardous waste or
burning a hazardous waste in a boiler or
industrial furnace to recover energy-
are exempt from regulation while EPA
determines appropriate regulatory
regimes for these activities. (See 40 CFR
281.6 and 40 CFR Part 286). Under the
CWA. electroplating facilities that
produce 1000 gallons of effluent per day
are exempted from effluent standards
because compliance is economically
infeasible for these small firms (30 FR
11510. March 28.1974). In each instance.
the release may require response action.
and the fact that the release is exempted
from the statutory requirements is not
relevant to this determination. The
Agency has determined, therefore.
releases  exempted from regulation by
the statutes listed in section 101(ir) will

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27270
Federal  Register / Vol.  53. No. 138  / Tuesday.  July  19. 1938 / Proposed Rules
not be considered federally permitted
release*.
  Although certain releases may not
qualify as federally permitted, they may
not pose a sufficient hazard to warrant
reporting to the National Response
Center. The Administrator will consider
establishing an administrative
exemption from CERCLA notification
requirements if it appears that certain
releases pose no hazard or pose a
hazard only rarely and under
circumstances that would not likely
result in any action being taken to
respond to the hazard. However, no
such exemptions are proposed under
this regulation.
  One commenter requested that a
release still be considered a federally
permitted release when there is only a
-technical" violation of permit
conditions (i.e.. where the violation
relates to operating, monitoring, or
reporting procedures and does not affect
the character or quantity of the release).
EPA agrees that notification of the
National Response Center would be
unnecessary in such a case  and  should
be addressed by the permit programs,
where appropriate, as a permit violation.
If the characteristic* of a release (both
the substance involved and the quantity
or concentration are in compliance with
a permit described in section 101(10).
CERCLA notification will not be
required. However, to the extent that a
release exceeds the permit limit with
regard to the quantity of a hazardous
substance, it will not be considered a
federally permitted release and
CERCLA notification will be required
when the release of the hazardous
substance exceeds its permitted level by
an RQ or more. Some Federal permit
programs do not include quantitative
limits on the amounts of specific
hazardous substances that can be
released. Accordingly, no "permitted
level" exists against which the released
quantity can be compared to determine
whether CERCLA notification is
required (i.e., whether the permitted
level has been exceeded by an RQ or
more). In such cssse, CERCLA
notification will be required when the
characteristics of the release are not in
compliance with the permit (C.B.. the
allowable concentration of a particular
constituent has been exceeded]  and an
RQ or more of a hazardous  substance
has been released.
  Several commenters urged that
various tj^es of releases (such as all
"routine" releases or releases covered
by other permit programs) not
mentioned in section 101(10) be
considered federally permitted release.
EPA cannot support this position.
                       Federally permitted releases are
                       specifically listed in section 101(10).
                       This detailed list clearly indicated that
                       Congress did not intend releases other
                       than those  listed In section 101(10) to be
                       considered federally permitted and
                       thereby exempt from CERCLA reporting
                       and liability requirements.
                       S. Relationship to Reporting Under Title
                       in

                         Title m of SARA (sections 301-328)
                       addresses emergency planning and
                       community right-to-know and provides.
                       among other »h'"g«, emergency and
                       annual notification requirements in
                       addition to those included in section 103
                       of CERCLA. EPA has provided (see 52
                       FR13377. April 22,1967; 52 FR 21152,
                       June 4.1087} and will continue to
                       provide regulations and guidance on the
                       Title HI requirements as necessary and
                       appropriate.
                         With respect to emergency
                       notification requirements, section SOT of
                       SARA provides release repotting
                       requirements that parallel the
                       requirements of section lOS(a) but are
                       intended to make release information
                       immediately available to State and local
                       emergency officials as well as Federal
                       response officials notified under
                       CERCLA section 103. In addition,
                       section 304(a) requires reporting of (1)
                       releases for which notification is
                       required under section 103(a) of
                       CERCLA. and (2) releases of "extremely
                       hazardous  substances" that are not
                       hazardous  substances under CERCLA
                       but that "occur in a manner which
                       would require notification under section
                       103(a]"  of CERCLA. Federally permitted
                       releases, as defined by CERCLA section
                       101(10). are not required to be reported
                       under section 304 of SARA (see 52 FR
                       13383). To clarify the type of releases
                       that are defined as federally permitted
                       releases, and thereby exempt from
                       SARA section 304 reporting, today's rule
                       proposes to revise the applicability
                       section of the regulation implementing
                       section 304 (40 CFR 355.40(a)) to add the
                       definition of -federally permitted
                       releases" provided in this rule. Thus, the
                       interpretation of federally permitted
                       release proposed in today's rule will
                       define clearly the scope of the releases
                       reportable under SARA section 304.
                       With respect to annual notification of
                       toxic chemical releases required under
                       SARA section 313. however, federally
                       permitted releases are not exempt.

                       IL Elements of the Exemption

                         Each  element of the federally
                       permitted release exemption is
                       discussed below. Relevant comments
                       received on the may 25.1883. NPRM
pertaining to each element also are
discussed.
  Ae/eose* from Point Source* with
National Pollutant Discharge
Elimination System (NPDES) Permits.
Introduction. Section 101(10) identifies
three types of releases from point
sources with NPDES  permits as
federally permitted releases:
  (A) dischargee in compliance with i permit
under Mcfioe 402 of the Federal Water
Pollution Control Act. (B) dUchutts resulting
from circumstance* identified and reviewed
and made pan of tb« public record with
respect to • permit i**ued or modified under
•action 402 of the Federal Water Pollution
Control Act and tubiect to • condition of
each permit (Cl continuous or anticipated
intermittent dUcbarte* from • point MUTCC.
tdentinxj la a permit or permit application
aider section 402 of tha Federal Water
Pollution Control Act which an caiued by
events occurring within the tcope of relevant
operating or treatment •yttaou

  This language is identical to that used
la section 311(a)(2) of the CWA to
exclude these releases from the term
"discharge" with respect to EPA's oil
and hazardous substances spill response
and prevention program. Furthermore.
Congress intended, in enacting CERCLA
section 101(10) (A). (B). and (C). that
EPA's interpretation of the provisions
under the CWA be continued under
CERCLA. (See S. Rep. No. 948. 96th
Cong., 2nd Sess. 47 (1980).) Reflective o.
Congressional intent, the Agency
proposes today that the interpretation
provided in the regulatory language and
the preambles to the rules implementing
the CWA section 311(a)(2) exclusions be
applied to the same exemptions under
CERCLA section lOl'lO) (A). (B). and
(Q.
  The legislative history of the CWA
explains that the purpose of the section
311 exemptions wes to exclude from the
spill response provisions of section 311
three types of discharges subject to
regulation under other CWA provisions:
specifically, section 402 NPDES permits
and section 308 enforcement provisions.
Senator Stafford explained that:
  •  •• we are attempting to draw a line
between the provteion* of the )CWA) under
sections 301.304.402 refulatinf chronic
discharge* and 311 dealing with spill*. At the
extreme*, tt i* relatively easy to focua on the
difference but it can become complicated.
The concept can be summarized by itsting
that taoee discharges of pollutant* that a
reasonable man would conclude are
associated with permits, permit condition*.
operation of treatment technology «nd ptrmit
violation* would mult in 402/309 sanction*;
those diKharge* of pollutant* thai a
raaaonable man would conclude are episodic
or classical spUis not intended or capable of
being processed through the permitted
treatment system and outfall would nwuli in

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                 Federal Register /  Vol.  53.  No. 138  /  Tuesday. July 19.  1988 / Proposed  Rules	27271
the application of MctlM 311.1124
CoatmaioMl Record 37SS3 (197».)
   In 1979. the Agency promulgated 40
CFR Part 117. which conuini CWA
reporting requirements for discharges of
hazardous substances (44 FR 50778.
August 29.1979). Section 11T.12 provided
a regulatory interpretation of the three
exclusions to the defintion of
"discharge" in 40 CFR Part 116 and
CWA section 311(a)(2). and the
preamble to the rule provided a detailed
explanation of the three types of
excluded discharges. In 1967. EPA
amended the definition of "discharge" in
40 CFR Part 110, the discharge of oU
regulation, to codify the same three
CWA exclusions (52 FR 10712, April 2.
1967). The preamble to the oil discharge
rule adopted the description of the three
exclusions from the 1979 preamble to 40
CFR Part 117.
   In today's rule, the Agency proposes
to apply  the existing interpretation of
the three types of discharges that are
excluded from coverage under CWA
section 311 to the first three types of
discharges under CERCLA section
101(10). Thus, this interpretation will
apply to  the following regulatory
provisions: 40 CFR 110,1.116.3.117.12.
300.5.302J. and 335.40. The Agency.
however, also is proposing to make two
clarifying amendments to 40 CFR 117.12,
as explained below, that also will be
aplicable to the corresponding
exemptions under 40 CFR Parts 110.116.
300. 302.  and 355.
  In the paragraphs that follow, the
three types of NPDES discharges that
correspond to the federally permitted
releases  in CERCLA sections 101(10)
(A). (B). and (C) are described. For
simplicity, these discharges will be
referred to as Type A. B. and C.
respectively.
  Type A Discharges. Type A
discharges are those that are in.
compliance with an NPDES permit limit
that specifically addreses the discharge
in question. To qualify as a Type A
discharge, the permit must cither
address the discharge directly through
specific effluent limitations or through
the use of indicator pollutants. In the
case of the latter, the administrative
record prepared during permit
development must identify specifically
the discharge of the pollutant as one of
those pollutants the indicator is
intended to represent
   Type B Discharges. Type B discharge*
are foreseeable (U- identified in the
NPDES permit's development record)
and flow into a facility's effluent
treatment system designed to treat the
discharge. This second type of discharge
is limited to on-site spills to the
permitted treatment system that were
identified and considered in the
issuance of the permit but are not
subject to any specific effluent
limitations. Discharges are included only
where (1) the source, nature, and
amount of a potential discharge were
identified and made part of the public
record, and (2) the permit contained a
condition requiring that the treatment
system be capable of eliminating or
abating the potential discharge.
  Therefore, if an on-site spill was
processed through a treatment system
capable of •Uminattng or abating the
spill and the spill is subject to a permit
condition, a discharge resulting from the
on-site spill would be subject to CWA
sections 402 and 309 and would be a
federally permitted release. If an on-eite
spill is not passed through a treatment
system or is not otherwise treated in any
way. the discharge resulting from the
on-site spill is subject to CWA section
311 and is not a federally permitted
release. Also, discharges that result from
on-site spills that are passed through
treatment systems (1) that have not been
demonstrated as capable of eliminating
or abating the discharge or (2) for which
no permit condition exists are subject to
CWA section 311 and are not federally
permitted releases under CERCLA.
  A "permit condition" would include
the existence of a treatment system or
release prevention plans and other  best
management practices designed to
address the discharge. Best management
practices are operating methods or
procedures to prevent or minimize the
potential for the discharge of toxic or
hazardous substances from processes
ancillary to the industrial manufacturing
or treatment process. For example,  a
discharger has a drainage system that
will route spilled material from a broken
hose connection to a holding tank or
basin for subsequent treatment or
discharge at a specified rate. To be
eligible as a Type B discharge, the
discharger must identify specifically
such a system in the permit application.
The permit condition discussed in the
application must be sufficient to treat
the maximum potential spill from the
identified source. Discharges that result
from aa on-site spill larger and more
concentrated than the spill
contemplated in the public record, and
for which a condition was provided in
the permit will be subject to CWA
section 311 and CERCLA notification
and liability provisions (Le~ the
discharge will not be a federally
permitted release).
  Today's rule proposes to amend 40
CFR 117.12(c) by deleting the phrase
"whether or not the discharge is in
compliance with the permit." for Type B
discharges, to avoid confusion caused  A
by the phrase. The phrase was originally
included in the rule because Type B
discharges are discharges that*result
from circumstances identified and
considered in the issuance of a permit
but that are not subject to any specific
effluent limitations. The Agency is
concerned that the phrase may b*
interpreted incorrectly to mean that
Type B could refer to discharges in
which the permittee did not satisfy the
condition placed in the permit Because
the Agency believes that the phrase
causes confusion,  the Agency propose*
to delete the phrase from the regulation.
The Agency solicits comments on this
proposed revision to 40 CFR 117.l2(c).
  T^pe C Discharges. Type C discharge!
are from a point source and are (1)
continuous or anticipated intermittent
discharges. (2) identified in a permit or
permit application, and (3) caused by
events occurring within the scope of tfca
relevant operating and treatment
systems. Included within the scope of
this provision are  chronic, process-
related discharges resulting from
periodic upsets  in the manufacturing
and treatment systems, for example^ the
discharge  created by a system
backwash. Discharges caused by spills
or episodic events that release
hazardous substances to the
manufacturing or treatment systems are
not Type C discharges. The language of
40 CFR 117.12(d) provides further
examples  of discharges that fit within
the category: (1) Provided that an  on-site
spill is not the cause, contamination of
noncontact cooling water or storm
water. (2)  on upset or failure of a
treatment  system or of a process
producing a continuous or anticipated
intermittent discharge: or (3) where thfc
discharge  originates in the
manufacturing or tre&tment systems, a
continuous or anticipated discharge of
process waste water.
  Amendment to 40 CFR 117.12. With
respect to Type C discharges, the
Agency also is proposing in today's rule
to amend 40 CFR ll7.12(d)(:)(iii) by
deleting the term "operator error" from
the description of "an upset or failure of
a treatment system." * The reasons for
  •Soctton ur.iSdNHHI) ptwtMiy
  (tii) An opitt or foilm W • BMtmtnt iy»iMO or
of* proem product* • eoetuiMOW or uioapaMd
taMrmjttMi dwchwt* •*•*• *• ""*•' <*f>Uurc
rwtilu inn • ceatroi problem. •* optnior «rro».»
tytttm UUun or miltuacttoo. «n «quipm«ni
MMM Mama or riMtdowa. a« fMipiatet
a prod action Mtedul* rlnr^i provided I>MI Midi
UOMI or ftilur* M not cxiMd by MI on-tut »aill of •

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27272
                 Federal Register / VoL  53. No. 138 / Toetdey. |ujy ifl.  me / propoxd Roles
.the proposal to eliminate the tenn
roperater Brer" ere (t) Tin use of the
tarn "operetor error- ia describing an
upset to inconsistent with tfat NPDES
regulations (40 CFR 122.41) that provide
that a discharge ceased by an open tor
error is not an upset end f2) the Agency
believee that dltcherges caused by
operator error are not Ukciy to be
"continuous or anticipated intermittent
discharges," as provided by the-
•tatutory language. The Agency expects
nisfhayges caused by operator error to
be episodic and unpredictabk. as
compared to discharges ceased by
system startups aad shutdowns. The
proposed deletion of the tecs "operator
error" is intended to enhance the darity
and consistency of the regulatory
language and is not meanl to signal a
change in policy. It is possible that
under some circumstances an operator
error may cause a failure of a treatment
system or process, and produce a
continuous or anticipated intermittent
discharge. Such e discharge may meet
the requirements fore federally
permitted rejeese. The term "apsef* as
used in 40 CFR Part 117, however.
generally will be interpreted to be
consistent with the term "upset" in 40
CFR Part 122. Le. it does-not inehide
•pdents censed by operational error.
rhe Agency requests comments on its
proposal to delete operator error from 40
CFR 117.12(d)(2Kiii).
  Conclusion. Under both CWA section
311 and CERCLA, any discharge or
release of a hazardous substance that is
not federally permitted, as described
above, must be reported immediately to
the National Response Center if it
exceeds permit limits by an RQ or more;
if the hazardous substance discharge or
release is not subject to a numerical
permit limit, any discharge or release
that triggers a permit violation and
equals or exceeds an RQ must be
reported immediately. Similarly, under
40 CFR Part 110, any oil discharge that
exceeds permitted levels aad causes an
oil sheen must be reported immediately.
  Discharges excluded fan CWA
section 311 coverage end defined as
federally permitted releases under
CERCLA sections 101(10) (A). (B), and
(C) are subject to the CWA section 300
enforcement provision that provides
EPA with the enthority to issue
compliance orders, bring civil actions.
and impose criminal and civil penalties.
In addition, under CWA section
311(b)(fl|(D). if the Federal government
      Eany costs of removal of
      irges excluded by section
   . .[2){Q, the Federal government can
bring a civil action under the authority
provided by CWA section 309(b) to
                                       recover such removal costs.
                                       Furthermore, under CERCLA section
                                       107TJ). the response oasts incurred by the
                                       Federal government in connection with
                                       the federally permitted release* defined
                                       by section 101(10) (B) and (Q can be
                                       recovered thrash a civil action brought
                                       raider the authority of CWA section
                                         Finally, all three exemptions raise the
                                       issue of timeliness of notification. The
                                       reporting requirements for releases
                                       exempted from CERCLA reporting, and
                                       liability under section 101(10} (A). (B).
                                       aad (Q and excluded from CWA section
                                       SlUaXZ) are subject to the * hour
                                       notification requirements nder CWA
                                       section 40Z The Agency acknowledges
                                       that Congress ~^y><«-^ that the 24-
                                       hour reporting requirement may "create
                                       gaps in action necessary to protect the
                                       public or the environment." (See S. Rep.
                                       No/848, ttth Pang. 2nd  Sees. 47 (19BO).)
                                       The legislative history of section 101(10)
                                       suggests diet the Agency could resotve
                                       this issue by amending the CWA seclioo
                                       402 teyurtuig regulation to require that
                                       those) releases excluded  from CWA
                                       section 3U coverage and exempt from
                                       CERCLA reporting requirements be
                                       subject to an immediate  notification
                                       requirement under the CWA section 402
                                       NPDES regulations. (Ibid.) The Agency
                                       has not vet amended the NPDES
                                       regulations to require immediate
                                       notification of those releases exempt
                                       from section 311 and CERCLA. Before
                                       the Agency proposes to amend the CWA
                                       sectin 402 NPDES regulations (40 CFR
                                       Part 122) to revise the 24-hour
                                       notification requirement to an
                                       immediate notification requirement for
                                       the exempted releases, the Agency
                                       solicits comments on the "reporting
                                       gap." particularly examples of situations
                                       where the 24-hour notice was not
                                       sufficient to protect human health and
                                       the environment
                                         Ae/eoset Subjtct to CWA Section 404
                                       Pvmitt, Discharges that comply with a
                                       legally enforceable permit for dredge or
                                       fill materials under section 404 of the
                                       CWA also are federally  permitted
                                       releases exempted from  the notification
                                       requirements of CERCLA sections 103(a)
                                       and I03(b). Before issuing these permits,
                                       the government reviews the substances
                                       to be discharged. Permits allowing the
                                       discharge of hazardous substances are
                                       issued only if no significant degradation
                                       of the aquatic environment win result
                                       This exemption applies to discharges in
                                       compliance with the terms and
                                       conditions of either aa individual or a
                                       general CWA section 404 permit.
                                         la regulations tT*aT"**<^nB section
aro
                                       311 of the CWA for h
                                       substances, 40 CFR 117.12 (but not the
regulations for oil In 40 CFR Pert 110).
^PA exempted from the notification
requirement not only those releases that
were ia compliance with section 404
permits, hot also those releases that
were exempt from permit requirement*
under section. 404- of the CWA (sections
404(0 end 404(r)). These latter releases
ere not "federally permitted release*"
for purposes of CERCLA becsuse
section 101(10KD) is limited to releases
io compliance with a legally enforceable
permit under section 404 of the CWA.
The Agency interprets the CERCLA
notification requirements to t**">r1 only
those releases whose environmental and
health effects have been evaluated aad
determined to be allowable under the
appropriate permit program.
  Jte/soses from Fociliti** with Final
RCRA PvmiU. Releases in comptiaaec
with a legally enforceable RCRA
treatment, storage, or disposal final
permit are. pursuant to CERCLA section
lOl(lOKE). federally permitted releases
when the hazardous tebstancea
released are specified in the pen&tt aad.
subject under the permit to a specific
limitation, standard, or control
procedure (see 40 CFR Parts 254 aad
270). Identifying releases on the record
during the permit process is iasoffident
to qualify them for the section lOl(lOKE)
exemption because, m order to be
exempt the substances most be
specified in the  permit and subject to
some permit condition or control.
  Four commenters requested that
facilities with interim status pursuant to
section 3005{e) of RCRA end 40 CFR
Part 2S5 be included in the "federally
permitted release" definition. Some of
the commenters indicated that it may be
some time before these facilities are
issued final permits. The legislative
history specifically rejects application of
this exclusion to releases from facilities
with interim status (S. Rep. No. 540, 96th
Con*. 2nd Sees. 48 (1980)).
  Release* Punuant to Marine
Protection, Aesea/e/r. and Sanctaaric*
Act Pfrmitt. Section 101(10)(F) of
CERCLA includes, in  the definition of s
federally permitted release, releases in
compliance with legally enforceable
permits issued «?««<•> section 1W7 (EPA
ocean dumping permits) or section 103
(Corps of Engineers permits for ocean
dumping of dredged materials) of the
Marine Protection. Research, aad
Sanctuaries Act Pursuant to EPA
regulations, applicants for ocean
dumping permits must identify the
physical end chemical properties of the
materials to be discharged, aad the
permit must identify the materials that
may be discharged (see 40 CFR Parts 221
end 227). Sirailsr procedures and criteria

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                 Federal Register / Vol. 53.  No. 138  / Tuesday.  July 19. 1088  /  Proposed  Rules
apply to ptrmiti for ocean dumping of
dredged material (see 33 CFR Part 324).
Tb«M EPA tad Corps of Engineer*
permits covtr substances that can b«
discharged lawfully. Dumping of
hazardous substances not specifically.
allowed in these permits is subject to
the notification requirements of
CERCLA section 103{a) because
emergency response officials should be
made aware of releases not evaluated
previously by a permit program for
health and environmental effects.
   Underground Infections Authorized
Punuant to the Safe Drinking Water
Act. CERCLA section lOl(lOHG)
exempts from the notification
requirements "any injection of fluids"
authorized under Federal injection
control programs or State programs
submitted for Federal approval pursuant
to Part C of the Safe Drinking Water Act
(and not disapproved by EPA).
  EPA has published regulations
establishing technical standards and
criteria (40 CFR Part 146) and
regulations governing approval of State
programs and permit procedures (40
CFR Parts 122-124). Under the Safe
Drinking Water Act the States are to
take the primary role in implementing
the underground injection control
program: EPA is to  administer the
program only if the State fails to submit
an approvable program within a
specified time period. Any underground
injection of hazardous substances
permitted under a State program that
has been approved, or submitted and
not disapproved by EPA. or permitted
under an EPA-administercd program, is
considered federally permitted for
purposes of CERCLA notification.
  Emissions Subject to Clean Air Act
Controls. Section 101(10)(H) of CERCLA
provides an exemption for hazardous
substance emissions that are subject to
a Clean Air Act (CAA) pern it or control
regulation (see 40 CFR Parts 52. 60. 61.
and 62). However, as stated in the
preamble to the May 25,1983 NPRM. for
this exemption to apply, any such CAA
controls-must be "specifically designed
to limit or eliminate emissions of a
designated hazardous pollutant or a
criteria pollutant"  (See S. Rep. No. 648.
9C!h Cong, 2nd Sesa. 49 (1900)). The
CAA exemption, therefore, cannot be
read broadly to cover any and all types
of air emissions. Moreover, as today's
proposed rule makes clear, for the
exemption to apply, the emission muat
be in compliance with the applicable
permit or control regulation.
  Several commenters suggested that
the clear and unequivocal nature of the
statutory language  made elaboration on
the CAA exemption unnecessary.
Generally, these commenters took the
view that the CAA exemption coven
nearly all air emissions because such
emissions are in one way or another
controlled by the CAA—either directly
because they contain substances
specifically regulated by the CAA. or
indirectly, for example, through
emission limitations established as part
of State Implementation Plans (SIP*)
approved under section 110 of the CAA.
Some commeaten even claimed that
because controls could be developed for
any hazardous substance, any release  to
the air is "subject" to CAA controls.
  EPA does not agree that the broadest
interpretations, under which virtually all
air emissions Including dangerous
episodic releases would be exempt from
CERCLA reporting requirements, could
have been intended by Congress under
section 101(10). Moreover, the
exemption for "federally permitted
releases" under CERCLA section 101(10)
also applies to reporting of air releases
to State and local governments under
Title m of SARA. Title EL which is the
Emergency Planning and Community
Right-to-Know Act of I960, was enacted
in large pan as a response to dangers
posed by chemical air releases to
surrounding communities, such as the
catastrophic release of methyl
isocyanate in Bhopal. India. Because
Title in was intended to address
particularly the dangers of air releases.
interpreting the exclusion for federally
permitted releases so that accidental air
releases would not be  reported locally
would be directly contrary to the
legislative purpose. Similarly, the
purpose of notification requirements
under section 103 of "CERCLA is to
ensure that the government is informed
of any potentially dangerous releases of
hazardous substances to the
environment for which timely response
may be necessary. Establishing a very
broad interpretation of CAA controls, as
requested by  the commenters. could
tliminate virtually any CERCLA
reporting of air emissions and. thus, the
potential for early Federal responses;
such an approach would eviscerate not
only the Congressional intent but also
the major purpose of the section 103
notification requirement
  In addition, some commenters urged
EPA to interpret the federally permitted
release exemption to include any air
emission from a permitted source. Some
of the commenters used the word
"reviewed" almost interchangeably with
the word "permitted." A "reviewed"
release is not necessarily a "permitted"
release or a 'controlled release. A
permitted release is an allowable
release of a specific substance or
emission. A reviewed release generally
may be one of many nieises from a
permitted source that is being checked
for compliance with a variety of laws
and regulations. The inclusion of a
pollutant is a SIP review provision is «rt
equivalent to subjecting the pollutant to
CAA requirements or controls "designed
specifically to limit or eliminate'* the
pollutant (See S. Rep. No. 648. 96th
Cong. 2nd Sess. 49 (i960)). A reviewed
release, therefore, is not necessarily •
federally permitted release.
  Several commenters stated that the
air release exemption should apply
broadly to substances such as volatile
organic compounds (VOCJor total
suspended particulates (TSP) regulated
under the CAA P"gM
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27274
Federal  Regbter / VoL 53.  No. 138  / Tuesday. )nfr 19. 1986 / Proposed Rulea
the applicable permit or coatrol
program. One* the coMtitutot
identified tad reviewed appropriately,
the limitation oa the category of
missions of h«TJN'mt substances
would provide the "permit or control
regulation" needed for application of the
section 101(10}(H} exemption. A specific
issue OB which the Agency solicits
coBuneau is the indiuioa of negative
determinations under the CAA section
112 program in the exemption.
  The second approach would interpret
broadly tha regulatory program*
governing pollutants for which a
National Ambiant Air Quality Standard
(NAAQS) has been eatahiisheri under
CAA Motion 108. These programs are
developed under CAA Motion 111 New
Source Performance Standards (NSPS)
or CAA Mction 110 State
Implementation Plans (SIP*). Under this
approach. EPA would diftt"gv'«t»
between amiMioni of hazardous
eubstances that are VOCs aod regulated
as precursors of ozone, and constituents
of the other NAAQS pollutants. For
example, emissions of constituent* of
particulate matter would be considered
"subject to a permit or coatrol
regulation" and. therefore, exempt from
notification requirements. Emissions of
individual VOCs. however, would not be
considered subject to permit or control
regulations solely because they are
indirectly controlled by regulations
limiting total VOC emissions. These
emissions of individual VOCs in
amounts equal to or in excess of an RQ.
consequently, would be subject to
notification requirements.
  This approach is based on the
recognition that for five of the present
NAAQS (sulfur dioxide, particulate
matter, nitrogen oxides, lead, and
carbon monoxide) the standards in each
case are based on the evidence of health
effects of those emissions. In contrast.
emissions of VOCs an regulated baaed
on their reactivity and consequent
contribution to the creation of ambient
ozone levels for which NAAQS have
been sat In setting the ozoae NAAQS or
establishing emission limitations for
VOCs. no consideration was given to
any direct health effects of ambient
concentrations of total or any
constituent VOC As a result
interpreting VOC emission limitations to
subsume consideration of the possible
health effects of constituents appears to
be inappropriate. Using this
interpretation,  a substance would be
considered  federally permitted if it is a
constituent of. aod. therefore, limited by
regulations or standards for. any of the
five pollutants  enumerated above, bat
                       not If it is limited by standards for
                       VOCs.
                         Reportable quantities for the purpose
                       of reieew notification requirements are
                       established to ensure appropriate
                       response to episodic releases of
                       hazardous substances that have
                       potential adverse health and
                       environmental effects. A large release of
                       an individual VOC in a quantity equal to
                       or ia excess of an RQ may be within,
                       total VOC emission limits and may
                       make a negligible contribution to ozone
                       formation, which is affected by
                       •nrf {Jj0
                       sources. Such a release may.
                       nonetheless, potentially endanger
                       twif««fl health because of tb* ttnticity of
                       the individual substance.
                        For example, under CAA section 111.
                       EPA established controls on the rubber
                       tire manufacturing industry limiting
                       VOC •««»•««•«• for a medhiiB-eized
                       pleat to approximately 400 tons per
                       year, or about 1.1 tone per day.
                       Predominant VOCs emitted in the
                       manufacturing process are white
                       gasoline and  petroleum neptha. Toluene.
                       xylene, ketones, and esters are also
                       used throughout the industry. (48 FR
                       2878. September IS. 1983.) A release OB
                       one day of an RQ or more of one of
                       these VOC constituents,  such as 1000
                       pounds of toluene, although within the
                       total VOC release limit of approximately
                       1 ton per day may pose a threat to
                       human health or the environment
                       because the total VOC limitation is
                       based on controlling the  formation of
                       ozone, and not on the toxicity of toluene
                       or another of the VOC emission
                       constituents.  The Agency would take the
                       position that  interpreting NSPS or SIP
                       VOC emission limitations to subsume
                       consideration of the possible health
                       effects of such VOC constituents, and
                       thereby exempt them from notification
                       requirements, is inappropriate. Thus,
                       EPA would require notification of
                       releases of VOC constituents in amounts
                       equivalent to or greater than an RQ
                       under tha second approach.
                        As a third option. EPA could interpret
                       the CAA federally permitted release
                       exclusion to apply only to releases that
                       art subject to a CAA permit or control
                       regulation and that are either the
                       "routine" cmisaiomvfor which the permit
                       or control regulation was designed or in
                       compliance with a specific standard for
                       release of that substance specified in the
                       permit or regulation. Unpermitted.
                       aonroutine releases would include
                       apsets from such devices as pressure
                       release valves, storage tank reactor
                       vessels, or sudden releases from valve
and pine ruptures, equipment failure.
and emergency startups and sasitdown/
  EPA requests comments on ifeeee
alternatives for defining the scope of the
air retain exemption. Specifically. EPA
requests coBosnts distinguishing
releases of ozone precursors (VOC)
constituents from releases of
constituents of other categorical
pollutants controlled by NAAQS. EPA
mimf\ ig soliciting *«"*»•''• on the
"routine  ve. *uinuvuUiiS  ojsnncnoit
and the need to define "routine* in
terms fo specific emission points or
     Tmin"M  atw^ solicits comments on
what emission points soovid be
included, m addition. EPA is uiu
                               med
that the first approach may leed to
uveiiapwuug of routine reiecees subject
to adequate control under existing
iisiilsliiij or permit limits that eoald
divert resources from release* requiring
immediate response. EPA soiidH
information on the mimberaf factttnea
and types of releases that would require
reporting under these approaches, and
the types of releases that wodd be
excluded under either approach.
particularly with respect to any
potentially dangerous releases that may
be excluded.
  In addition, the National Emission
Standards for Hazardous Air Pollutants
(NESHAPs) limits for radionudidee are
health-based annual limits, whereas
radionuclide RQs are reporting triggers
based on 24-hour releases. The Agency
will require a report if an RQ above any
annual NESHAP limit is released in a
24-hour period. The Agency requests
comments on the number of facilities
and types of releases that msy require
reporting.1
  Injection of Materials Related to
Development of Crude Oil or Natural
CaxSuppliet. The injection of materials
related to the production of crude oil.
natural gas. or water is considered a
federally permitted release if the
injection material is authorized
specifically under applicable State lew.
Because it is probable that aD
conceivable injection modes are not
considered in State laws. EPA. in the
preamble to the May 25. 1983 NPRM.
interpreted the section 101(10)(I)
provision to exempt only those activities
or materials that are authorized
          of tfct Swl mtt «*wtta| tte «Q for
          (!• te pMMMd t> nan *t AiMner
                      a Amty*f rt»»
,	lewwUMi
ammm>rr cauMd by tht mmd mtioMtMt RQ
               . Thi» doeuiMnt n «»«ti*bi«
                 aorn L&-MD. US.
                 • AS—CT. 401 M !»••<.
SW. WHteeiM. OC aB*SO IDMMt I

-------
                 Federal Rayutar  /  VoL  S3, No. 1M / Tuesday. July 19.  1968 / Propoied Rules
specifically by State law. rather than
UMM that are not prohibited by State
law. This interpretation ensures that the
appropriate authorities have conadouily
considered and intentionally authorized
the infection activities and materials
that are to be exempt from notification
requirements and that the National
Response Center will be made aware
immediately of the potential need to
respond to releaaes that  have not been
evaluated previously by  a permitting
authority.
  EPA interprets the section 101(10)(T)
exemption to apply only to those
materials specifically authorized by
State law to be used in activities whose
sole purpose is the production of crude
oil. natural gas. or water the recovery of
crude oil or natural gar or the
reinfection of fluids brought to the
surface from such production. Some
commenters objected to this
interpretation and instead supported a
broader interpretation that would
exempt from CERCLA notification all
materials used in gas and oil field
operations. The National Response
Center must be notified in any situation
involving the use of injection fluids or
materials thst are not authorized
specifically by State law for purposes of
the development of crude oil or natural
gas supplies and resulting in a release of
a hazardous substance in an amount
that equals or exceeds the applicable
RQ. This will allow an immediate
evaluation of the need for a  response.
  Introduction of Pollutants into
Publicly Owned Treatment  Works. A
release to a Publicly Owned Treatment
Works (POTW) is subject to the
federally permitted release exemption if
the release is (1) in compliance with
applicable categorical  pretreatment
standards and local limits developed in
accordance with 40 CFR  403J(c), and (2)
into a POTW with an approved, local
pretreatment program  or a i 403.10(e)
State-administered local program. One
of the commenters on the May 25, 1983
NPRM suggested that the Agency
broaden its approach to the POTW
exemption to provide that the discharge
be in compliance only  with general
pretreatment requirements and not with
site-specific requirements. The Agency
believes that for POTW to be
considered "federally permitted." not
only must the hazardous substance be a
pollutant specified in applicable
pretreatment standards and the release
of the pollutant be in compliance with
the categorical pretreatment standards.
but the release also must be in
compliance with the local limits
developed on the basis of the site-
specific conditions, because the
 categorical standards alone may not be
 adequate to address jhe impect of
 pollutants on the POTW. Therefore.
 even though a release into s POTW is in
 compliance with the categorical
 pretreatment standards, the National
 Response Center must be notified if the
 release exceeds the local limits by an
 RQ or more, because the release may
 cause interference with the POTWs
 processes or may pass through the
 POTW to the navigable waters, either of
 which may result in a situation requiring
 an emergency response. This exemption
 applies only to industrial users *
 discharging to POTWr a POTW is
 •object to CERCLA reporting and
 liability provisions if its discharge of a
 hazardous substance violates iU NPDES
 permit by an RQ or more. POTWs are
 not required to report hazardous
 substances that are traveling through
 their collection systems in quantities
 that equal  or exceed RQs: however, the
 industrial user is responsible for
 reporting such release* into the
 collection system.
   Sections 307(b)(l) and (c) of the CWA
 direct EPA to establish pretreetment
 standards "to prevent the discharge of
 any pollutant through treatment works
 *  * * which are publicly owned, which
 poQutant interferes with, passes
 through, or is otherwise incompatible
 with such works." These sections
 address the problems created by
 discharges of pollutants from
 nondomestic sources to municipal
 sewage treatment works that interfere
 with  the POTW or pass through the
 POTW to navigable waters untreated or
 inadequately treated.  Pretreatment
 standards  are intended to prevent those
 problems from occurring by requiring  •
 nondomestic users of POTWs to pretreat
 their wastes before discharging them to
 the POTW. In 1977. Congress amended
 section 402(b)(8) of the CWA to require
' POTWs to help regulate their industrial
 users by establishing local programs to
 ensure that industrial users comply with
 pretreatment standards.
   In establishing the national
 pretreatment program to achieve these
 pretreatment goals, the Agency adopted
 a broad-based regulatory approach that
 implements the statutory prohibitions
 against pass through and interference  at
 two basic levels. The first is through the
 promulgation of national categorical
 standards that apply to certain
 industrial uses within selected
 categories of industries that commonly
 discharge toxic pollutants. Categorical
 standards establish numerical
technology-based discharge limits
derived from an assessment of the
and amounts of pollutant discharge
that typically interfere with or pass
through POTWs with secondary
treatment facilities.
  The potential for many pass through
or interference problems depends not
only on the nature of the discharge but
also on local conditions (14. the type of
treatment process used by the POTW.
local water quality, POTWs chosen
method for t««nXim» sludge L mn^ thus
           man." tt Ow um to «M4 ta (ha*
 kUtfdOU* MfcMMCM IO« WTW.
needs to be sddressed on a rsee- by-case
basis. Examples of such problems
include discharges to a POTW that may
consist of pollutants not covered by a
categorical standard or from
nondomestic sources that are not in one
of the industrial categories regulated by
the categorical standards. Because
categorical standards are established
industry-wide, they cannot consider
site-specific conditions and therefore
may not be adequate to prevent all pass
through and interference even for the
regulated pollutants. EPA's General
Pretreatment Regulations (40 CFR Part
403) address these areas of concern.
First 40 CFR 403J(b) establishes
specific prohibitions that apply to all
nondomestic users and are designed torn
guard against common types of poUuuH
discharges that may result in
interference and pass through (e-g_ no
discharge of flammable, explosive. JH*
corrosive pollutants). Second. 40 CFR
403J(s) establishes a general
prohibition against pass through and
interference that serves as s backup
standard to address localized problems
that occur. In addition. POTWs must
develop and enforce specific local limits
as part of their local pretraatment
programs to prevent pass through and
interference. POTWs not required to
develop pretreatment programs also
must develop local limits if they have
recurring pass through and interference
(se«40CFR405J(c)).
  The pretreatment standards a POTW
user must meet to claim the federally
permitted release exemption include
both applicable national categorical
standards and standards established by
local law as described below.
Compliance only with the general and
specific prohibitions (40 CFR 403J(a)
and (b)J of the general pretreatment
regulations is insufficient to qualify a
release as federally permitted.
  Only local limits applicable to the
pollutant, developed in accordance  with
40 CFR 403 J(c). and designed to
implement the general prohibition
against interference and pass through
(1 403 J(a)), can qualify the release of
such pollutant as a federally permitted

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relLVi.
                Fedaral Regitet / Vol 53. No. 138  /  Tuesday. luly  19. 1988  /  Proposed  Rules
      i. The development of local limit*
 under 40 CFR 408.5(c) involves thne
 basic steps. First a POTW must
 determine which, if any, of the
 pollutants discharged by its industrial
 users have a reasonable potential to
 pass through or interfere with the
 POTW. For each of the pollutants the
 POTW concludes may be of concern, the
 POTW most then determine the
 maximum amount of the pollutant it can
 accept (maximum headworks loading)
 and still prevent the occurrence of pass
 through or interference. Finally, after
 m"imnm allowable headworks
 loadings ere determined for each of the
 pollutants of concern, the POTW must
 implement a system of local limits
 applicable to industrial users to assure
 that these loadings will not be exceeded,
  EPA believes that only local limits
 that have been developed based upon
 procedures that evaluate the site-
 specific characteristics and treatment
 capabilities of a POTW should qualify
 the release of the pollutant for the
 exemption. Such an extensive analysis
 is needed to assure that pass through
 and interference problems do not arise.
 A discharge of s pollutant by an
       al user in compliance with a
        it not designed using these
      ures may not address the
 statutory prohibitions against pass
 through  and interference or provide the
 requisite degree of environmental
 protection to qualify for the federally
permitted release exemption.
  Thus,  a release that exceeds by an RQ
 or more an applicable categorical
 pretreatment standard or a local limit
 developed in accordance with 40 CFR
 403.5(c)  must be reported. Moreover, the
 absence of a categorical pretreatment
 standard or a local limit for a specific
 pollutant precludes coverage for
 releases of that pollutant under the
 federally permitted release exemption. If
 an industrial user releases an RQ or
 more of a hazardous substance into a
 POTW that has not set a local limit for
 such a substance. atJot which there is
 no limit based on a categorical standard.
 then the release is not federally
 permitted and is subject to CERCLA
 reporting and liability provisions.
  Furthermore, the release of a pollutant
 to a POTW only would qualify for the
 federally permitted release exemption if
 (1)  the POTW has a local pretreatment
 program approved by the "approved '
 authority" (as defined in 1 40&3(c)). or
     State, in lieu of the municipality, is
             a pretreatment program
      t POTW pursuant to 40 CFR
 403.10{e).
  Section 101(10)(J) provides that the
 pretreatment program must be
 "submitted by a State or municipality
for Federal approval'* The Agency
interprets this provision to mean that
the program not only must be submitted
for approval but must be approved. A
strict reading of the statutory language
would be contrary to the expressed
congressional intent that discharges of
hazardous substances into sewer
systems qualify as federally permitted
releases only if they are authorized
under a pretreatment program (S. Rep.
No,8U. 90th Cong. 2nd Seas. 48 (1960)).
Tie fact that a POTW has submitted a
program for approval does not
necessarily mean the program is
adequate to control the introduction of
pollutants from nondomestic users of the
POTW. Such a program may not be
approved by the approval authority due
to major deficiencies. For the discharge
to be a federally permitted release.
therefore, it must be specifically
regulated in an approved program, a
program that the appro val,authority has
determined is consistent with the
federally mandated minimum standard.
  An approved program may be (1)
designed and implemented locally by a
POTW and approved by either EPA or
an EPA-approved State  pretreatment
program, or (2) designed and
implemented by an EPA-approved State
pretreatment program, EPA approval of
a State pretreatment program pursuant
to section 402(b) of the CWA would not
automatically qualify a release to a
POTW in that State as federally
permitted. The local pretreatment
program must be approved either by
EPA or by an EPA-approved State
program. Generally. EPA approval of a
State pretreatment program merely
changes the approval authority for the
POTW programs from EPA to the EPA-
approved State pretreatment program.
The approved State has primary
responsibility for requiring local POTWs
to develop and implement a
pretreatment program to regulate users
directly. The fact that a State
pretreatment program has been
approved by EPA does not in and of
itself change the quality or approvability
of local POTW programs. POTWs in
approved States would still need to
develop local pretreatment programs
and receive pretreatment program
approval if they have not done so
already. Thus, to satisfy the federally
permitted release exemption, individual
approval of each POTW pretreatment
program is necessary (except for a State
administered  1403.lO(e} program-as
described-below).
   Section 403.10(t) allows the Slats in
lieu of the POTW to assume
responsibility for developing and
implementing POTW pretreatment
program requirements. Because the
i 40a.lO(e) program must meet the same
standard as would be required for
pretreatment programs developed by a
municipality (| 403J(f)). EPA believei
that the i 403.10(e) programs are the
State pretreatment programs Congress
intended to include under section
101(10)0).
  In the event that a State's { 403.10(e)
program does not extend to all its
POTWs. only those releases to POTWi
for which the State has implemented the
pretreatment program pursuant to
140J.lO(e) would qualify as federally
permitted. If a POTW is not regulated
direcdy by its State NPCES program, the
POTW nevertheless must implement an
approved local pretreatment program in
order for the discharges of industrial
users to Qualify for the federally
permitted release exemption.
  In summary, for a release to a POTW
to be subject to the federally permitted
release exemption, the release must be:
(1) In compliance with applicable
categorical pretreatment standards and
local limits developed in accordance
with 40 CFR 403J(c), and (2) into a
POTW with an approved local
pretreatment program or a 40 CFR
403.io(e) State administered local
program.
  One of the commanters on the May 25.
1983 NPRM stated that discharges into a
POTW are transfers between facilities.
not "into the environment" snd
therefore ell discharges into POTWs
should be exempt from CERCLA
reporting. The commenter's approach to
defining "into the environment" is not
consistent with the approach in today's
proposal. To determine whether its
release is federally permitted, therefore.
an industrial user should mesiurt its
discharge at the point the substance
leaves the industrial user's facility. In
the case of indirect dischargers, the
release should be measured when it
leaves the discharger's building. Mobile
sources should measure the discharge at
the point it is released into the POTW.
which will be at the headworks in most
cases. Industrial users are not required
under CERCLA to conduct monitoring
activities different from those required
by the applicable pretreatment program.
  to/ease* e/Source. Byproduct, or
Special NueJtor Matt rial.
Radioauclides (which include source.
byproduct and special nuclear material)
are listed generically under section 112
of the CAA and are therefore considered
hazardous substances under CERCLA.
CERCLA section 101(22)(CX however.
excludes from the definition of "release"
the discharge oft
eoura. byproduct, or tpedsl tractor material
from • nudes: incident, is thost terms arc

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                 Federal  Register / Vol S3. No. 138  / Tuesday. July 19.  1988 / Proposed Rules
defined la the Atomic Energy Act of lift*. If
Mch rekaae ia subject to requireaMnts with
respect to ""nr**1 protection established by
tfa« Nacieer Regulatory Comtnitiica under
section 170 of neb Act or. for tht purpotn
of Mctioa iM of this till* or aay othtr
raeponat action any releeae of Moree,
byproduct, or (pedal nuclaer material from
•ny proceMuuj lite dnieoated und«rMctioa
108a)(l) or 902
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                 Fadsjral  Register / Vol S3. No.  138 / Tuesday. July 19. U88  /  Proposed Rule*
   eases not subject to or in compliance
with applicable permits, regulations, or
order*, en esseatiaJ to mitigate the risk
to public haalth or welfare or the
environment posed by sucfa releases.

m. Notification for Certain Type* of
Releases

A. In General
  Tbii section addresses several
recurring questions not related
specifically to the definition of
-federally permitted release" but that
arise under the CERCLA section 103(a)
reportinf requirements. One such
question involves releases to engineered
structures designed specifically to
prevent materials from reaching the land
surface. The issues involve both
interpretation of the phrase "release into
the environment" and the
appropriateness of CERCLA notification
requirements for releases to such
secondary containment devices. The
Agency solicits comment* on the
following issues.
  In the preamble to the April 4.1985
final rule adjusting RQs for 340 CERCLA
hazardous substance. EPA slated:
m Hacardoti* subtunce* may be released
pnto the environment" even if they mania
on plant or installation grounds. Example* of
•ucb rektaae* «r« tpill* from tank* or valve*
onto concrete pads or into dltcht* open to the
outsid* lid. releases from pipe* into open
lagoon* or ponds, or any other discharge*
that srt not wholly contained within
buildint* or structure*. Such • nice**, if it
occurs in • importable quantity (e.g.
evaporation of «n RQ into the air from i dike
or concrete pad). Bust be reported under
CERCLA. On the other hand. hazardous
•iibtu.nces may be spilled at a plant or
uuiullation but not enter the environment
e.g.. whrn the subttsnc* *pill* onto the
concrete floor of an enclosed manufacturing
plant Such * »piU would need to be reported
only If the substance* were in tome way to
leave the building or ttructure in a reponabie
quantity. (Note, however, that the federal
government nay (till respond and recover
ooets where then is a threatened release into
the environment) SO FR19402.
  In applying the phras* "ifito toe
environment" to releases to secondary
containment devices. EPA believes thut
e release inside a building or structure is
not a release "into the environment"
unless the spilled substance leaves the
building.
  On one hand, a release to a secondary
containment device that is not wholly
contained and  that is located outside of
a building or structure is "into the
environment." Examples of releases to
such devices that illustrate both the
potential for a serious pnbl«m aad an
existing serious situation have been
brought to the Agency's attention. These
include a release of hydrochloric acid to
 a dike that would have overflowed in a
 heavy rain, and radioactive
 contamination of water supplies
 apparently resulting from an improperly
 functioning secondary containment
 device at a nuclear facility.
  On the other hand, it has been
 suggested that where engineered
 structures are open to the air. releases
 into such structures should be exempt
 from CERCLA notification unless an RQ
 or more of the substance reaches any
 ground or surface waters or land surface
 or evaporates into  the ambient air.
 Releases to such structures may include
 such occurrences as releases onto
 concrete pads, secondary containment
 devices with sealed floors around
 storage tanks, or drip pans used to catch
 minor hose or Una drainage.
  The Agency is interested in receiving
 comments and data discussing the
 circumstances under which immediate
 notification of releases into secondary
 containment devices would not provide
 useful information  for Federal response
 purposes under CERCLA. EPA  is
 particularly interested in information on
 the significance of  the issue, specific
 examples of procedures followed where
 there is a release to a secondary
 containment device and techniques used
 to prevent releases from such devices.
 data discussing the integrity of
 secondary containment devices, and
 suggestions on the  appropriate  means of
 eliminating any such unnecessary
 reporting. If the Agency decides to
 exempt from CERCLA notification
 certain releases into secondary
 containment devices, a demonstration
 may be required to show that the device
 is sufficiently protective and reliable.
 fl. PCB Waste Disposal
  A second issue concerning the
 necessity for section 103 notification is
 whether approved polycbiorinated
 triphenyl (PCB) disposal by incineration.
 landfiUing, or alternate methods needs
 to be reported as a release under section
103. Because PCB disposal approvals
 under the Toxic Substances Control Act
 (TSCA) are not included in the  CERCLA
 section ICI(IO) definition of federally
 permitted release, EPA does not believe
 that it has the authority to apply that
 exemption to such approvals.
  At the same time, however. EPA does
act believe that notification under
 section 103 of CERCLA provides any
 significant additional benefit so long as
 the disposal facility is is substantial
 compliance with all applicable
 regulations and approval conditions.
The PCB regulations under TSCA. 40
CFR Part 781. retfuuv tiwnen or
 operators of PCB disposal facilities.
 incinerators, chemical waste landfill*.
 and high efficiency boilers to obtain
 written EPA approval baaed on
 compliance with detailed technical
 requirements designed to ensure proper
 disposal before accepting PCB wastes.
 The TSCA approval process is designed
 to ensure that the operation of PCB
 disposal facilities does not present an
 unreasonable riak of injury to health or
 the environment from PCB*. la addition.
 40 CFR Part TBUSubpart I. requires PCB
 disposal facility owners or operators to
 monitor carefully the facility's inventory
 and operation, maintain detailed records
 for periods of S to 20 years, and report
                          The TSCA
regulations provide the Federal
government with the information
necessary to determine whether an
emergency response to a PCB disposal is
required. Today's proposal not to
require CERCLA reporting for EPA-
approved PCB disposals is consistent
with the overall objective of the
CERCLA notification requirements.
Therefore, EPA will not require
reporting under section 103(a) of the
approved, proper disposal of PCB
wastes into a disposal facility. The
Agency requests comments on this
proposal to exempt administratively
these releases from CERCLA
notification.
  A party responsible  for a release of
PCB wastes that need not be reported
under CERCLA. however, remains liable
for the costs of cleaning up the release
and for any natural resource damages
caused by the release.  In addition.
where the disposer knows that the
facility is not in compliance with
applicable regulations  and approved
conditions under TSCA. disposal of an
RQ or more of PCB waste must be
reported to the National Response
Center. Likewise, spills and accidents
occurring during disposal and outside of
the approved operation aad that result
in releases of an RQ or more of PCB
waste must be reported to the National
Response Canter. Finally. PCB releases
of an RQ or more tram a TSCA-
approved facility (as opposed to
disposal into such a facility) must be
reported under CERCLA.
IV. Discharge* la POTWs

  The Agency recognizes that the
regulation implementing CYYA section
311 for hazardous substance discharges
must be revised to be consistent with
the Agency's regulatory approach taken
under CERCLA section 101(10)0)- Under
CERCLA sedton 101(10)(J). an indirect
discharge to a POTW must be subject to
aad in compliance with categorical
pretreatment standards and local limits
applicable in an approved local

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                 Federal Register / Vol.  53. No. 138 / Tuesday. )uiy 19. 1988  /  Proposed Rules
                                                                     27279
 pretreatment program (see discussion
 under Section lH of today's preamble).
 All indirect dischargers, ie.. both mobile
 and stationary sources, are subject to
 the same requirements for their
 discharges to be considered federally
 permitted releases.
   Under 40 CFR 117.13. mobile sources
 discharging industrial waste are not
 subject to CWA section 311 coverage if
 the mobile source has contracted with.
 or otherwise received written
 permission from the POTW to discharge
 a designated quantity of industrial
 waste treated to comply with effluent
 limitations (under CWA sections 301.
.302. or 306) or pretreitment standards
 (under CWA section 307). Indirect
 dischargers are not addressed under
 i 117.13. Paragraph (a) of 1117.13 was
 reserved to provide the conditions under
 which indirect discharges  are subject to
 CWA section 311.
  The Agency is proposing to amend 40
 CFR 117.13 to state  that indirect
 discharges are not subject to section 311
 coverage if the indirect discharge is in
 compliance with applicable categorical
 pretreatment standards and local limits
 developed in accordance with 40 CFR
 4m J(c) and is into a POTW with an
 approved local pre treatment program, or
 a 40 CFR 403.10(e) State administered
 local program. EPA also is proposing  to
 revise paragraph (b) to apply the same
 conditions to mobile sources as would
 be applied to indirect discharges under
 paragraph (a). The Agency requests
 comments on this proposal.
 V. Regulatory Analyses

 A. Executive Order No. 12291
  Rulemaking protocol under Executive
 Order (E.O.) 12291 requires that
 proposed regulations be classified as
 major or nonmajor for purposes of
 review by the Office of Management
 and Budget (OMB).  According to E.O.
 12291. major rules are regulations that
 are likely to result in:
  (1) An annual effect oo the economy of
 SlOO million or mote: or
  (2) A major increase in costs or prices for
 consumers, individual industries. Federal
 Suit*, or local government agencies, or
 geographic regions: or
  (3) Significant adverse effects on
 competition, employment, investment
 productivity, innovation, or on tht ability  of
 United States-based enterprises to compete
 with foreign-based enterprises in domestic or
 export markets.
  Today's regulation is nonmajor.
 because adoption of the rule will result
 in zero costs and will not cause any of
 the significant advene effects
 mentioned in (3) above. The Background
 Document for the Proposed Regulation
 on Federally Permitted Releases.
available for inspection in the public
docket, shows that the proposed rule is
simply a clarification of existing
statutory requirements.
  This rule has been submitted to OMB
for review, as required by E.0.12291.

B. Regulatory Flexibility Act
  The Regulatory Flexibility Act of 1960
requires that a Regulatory Flexibility
Analysis be performed for all rules that
are likely to have a "significant impact
on a substantial number of small
entities." Today's proposed rule is not
expected to significantly impact small
entities because the rule proposes
simply to clarify the existing statutory
requirement. EPA certifies, therefore.
that this proposed regulation will not
have a significant impact on a
substantial number of small entities and •
that a Regulatory Flexibility Analysis is
not required.
C Paperwork Reduction Act
  There are no reporting or
recordkeeping provisions included in
this proposed rule that require approval
from the Office of Maaagement and
Budget under section 3S04(h) of the
Paperwork Reduction Act of 1980.44
U.S.C 3501 et seq.

List of Subjects

40 CFR Part 117
  Hazardous Substances. Penalties.
Reporting and recordkeeping
requirements. Water pollution control

40CFRPart302
  Air pollution control. Chemicals.
Hazardous materials  transportation.
Hazardous substances.
Intergovernmental relations. Natural
resources. Nuclear materials. Pesticides.
and pests. Radioactive materials,
Reporting and recordkeeping
requirements. Superfund. Waste
treatment and disposal, Water pollution
control.

4O CFR Port 3SS
  Chemical accident prevention.
Chemical emergency  preparedness.
Chemicals. Community emergency
response plan. Community right-to-
know. Contingency planning. Extremely
hazardous substances. Hazardous
substances, Renortable quantity.
Reporting anal ftcordkeeping
requirements. Threshold planning
quantity.
  Deled: July 11. IMs.
Lea M. Tansies.
Adminntiator.
   For the reasons set out in the premble.
it is proposed to  amend Title 40 of the
Code of Federal Regulations as follows:
PART 117— OfTERIIWATION Of
REPORTABU OUAKTTTJES FOR
HAZARDOUS SUBSTANCES

  1. The authority citation for Part 117 is
revised to read as follows:
  Authority: 33 U.S.C 1321 ud 1361.

  2. Section 117.12 is revised to read as
follows:

1117.12  AaplMbBty to dtoche* aee iron
  (a) This regulation does not apply to:
  (1) Discharges in compliance with a
permit under section 402 of the Clean
Water Act
  (2) Discharges resulting from
circumstances identified and reviewed
and made a part of the public record
with respect to a permit issued or
modified under section 402 of the Clean
Water Act. and subject to a condition in
such, permit or
  [3] Continuous or anewipcsed
intermittent discharges from a point
source, identified in a permit or permit
application under serton-402 of the
Clean Water Act which are caused by
events occurring within the scope of
relevant operating or treatment systems.
  (b) A discharge is "in compliance wit
a permit issued under section 402 of th|
Clean Water Act" if the permit contait
an effluent limitation specifically
applicabale to the substance discharged
or an effluent limitation applicable  to
another waste parameter that has been
specifically identified in the permit as
intended to limit such substance, and
the discharge is in compliance with the
effluent limitation.
  (c) A discharge results "from
circumstances identified and reviewed
and made a part of the public record
with respect to * permit issued or
modified under section 402 of the Clean
Water Act and subject to a condition tn
such permit" where:
  (1) The permit application, the permit
or another portion of the public record
contains documents that specifically
identify:
  (i) The substances and the amounts of
substances; and
  (ii) The origin and source of the
substances: and
  (ill) The treatment that Is to be
provided for the discharge either by.
  (A) An on-site treatment system
separate from any treatment system
treating the permittee's normal
discharge: or
  (B) A treatment system that is
designed to treat the permittee's nornfl
discharge and that is additionally
capable of treatiafrfee identified amount
of the identified substance: or

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                 Federal Register / VoL 53. No.  138 / Tuesday. July 18.  1988 / Proposed Rules
   (Cl Any combination of the above
 and
   (2) Tht permit contain* a requirement
 that the substance* and the amounti of
 &e substances, as identified in
 |117.12(c)(l)(i} and |117.12(c)(l)(ii). be
 treated pursuant to 1 117.12Jc){l)(Mi) in
 the event of an on-site release: and
   (3J The treatment to be provided is in
 place.
   (4} A. discharge is a "continuous or
 anticipated intermittent" discharge
 "from a point source, identified in a
 permit or permit application under
 section 402 of the dean Water Act."
 and "caused by events occurring within
 the scope of relevant operating or
 treatment systems'** whether or not the
 discharge is in compliance with the
 permit if:
   (1) The hazardous substance is
 discharged from a point source for
 which a valid permit exists or for which
 a permit application has been submitted:
   (2) Th» discharge of the hazardous
 substance results from:
   (i) The contamination of noncontact
-rooting water or storm water, provided
tthat such cooling water or storm water
•i not contaminated by an onstte spili of
^ hazardous substance: or
   (U) A continuous or anticipated
 intermittent discharge of process waste
 water, and where the discharge
 originates within the manufacturing or
 treatment systems: or
   (iii) An upset or failure of a treatment
 system or of • process producing a
 continuous or anticipated intermittent
 discharge where the upset or failure
 results from a control problem, a system
 failure or malfunction, an eo^iipment or
 system startup or shutdown, an
 equipment wash, or a production
 schedule change, provided that such
 upset oc failure, is not caused by an on-
 site spill of a hazardous substance.
   3. Section 117.13 ia revised to read aa
 follows:
  T17.1S
   (a) These regulations apply to tSL
 discharges of reportable quantities to a
 POTW. where the discharge originate*
 from slatiuuaiy industrial users, so long
 as the discharge is:
   (1) In compliance with applicable
 categorical pretoeetment standards and
 local Ifmfts developed in accordance
 with 40 CFR403J(cIr and
   (2) Into a POTW with an approved
 local pretreatment program or a 40 CFR
 403.10(e) State administered local
 program.
   (b) These regulation* apply to all
 dischargee of reportable quantities- to a
 POTW. where the discharge originate*
from a mobile source, so long as the
mobile source can show that
  (1) Prior to accepting the substance
from an industrial discharger, the
subatance being discharged wa*. in
compliance with applicable categorical
pretreatment standard* and local limit*
developed in accordance with 40 CFR
40&5(c); and
  (2) The substance ic being discharged
into a POTW with aa approved local
pretreatment program or a 40 CFR
403.10(e) State administered local
PART 302— oeSHMUTIOM.
REPOKTAsKf QUANTITIES. AND
NOTIFICATION

  4. The authority citation for Part 302 is
revised to read aa follows:
  Auttmity: 41 U.&C. 9802: » U&C 1321
•ad 13*1.
  5. Section 302J is amended by adding.
in alphabetical order the definition
"federally permitted release** and by
revising the introductory text of the
definition "release'* to read as follow*:
  "Federally permitted release" means
  (1) a discharge in compliance with a
permit under section 402 of the dean
Water Act
  (2) A discharge resulting from
circumstances, identified and reviewed
and made a part of the public record
with respect to a permit issued or
modified under section 402 of the Clean
Water Act and subject to a condition in
such permit
  (3) A continuous or anticipated
internment discharge from a point
source, identified in a permit or permit
application under section 402. of the
Clean Water Act. which is caused by
events occurring within the scope of
relevant operating or treatment systems:
  (4] A discharge in compliance with a
legally enforceable Federal or State.
individual or general  penntt under
section 40* of the Oeaa Water Act
  (S) A release ia compliance with a
legally enforceable Federal or State final
permit ittmni p*"••"•"' to section 3005
(a.) through (df of the  Solid Waste
Disposal Act from a MrnpfrHi* waste
treatment, storage, or disposal facility
when such pezmit specifically Identifies
the hazardous substancee-end iB*lrtt
such substances subject to a standard at
practice, control procedure, or bioassay
limitation or condition, or other control
on the hazardous substances la such a
release:
  (8) Any release ia  compliance with, a
legally enforceable; permit issued under
section 102 or section 103 of the Marina
Protection, Research, and Sanctuaries
Act of 1972:
  (7) Any injection of fluids suthorized
under Federal underground injection
control program*, or State program*
submitted for Federal approval (and not
disapproved by the Administrator]
pursuant to Part C of the Safe Drinking
Water Act
  (8) Any emission of a substance into
the air which i* named specifically or i*
included in a specifically named group
of substance* cubject to and in
compliance with a permit or ^"Vr*^
regulation under section 111. section 112.
Titte I Part C, Title I Part 0. or State
implementation plans submitted in
accordance with section 110 of the
dean Air Act (and not disapproved by
the Administrator) when such permit or
control regulation  is specifically
designed to limit or eliminate such
emission of a designated hazardous
pollutant or a criteria pollutant.
fnrfutfing any schedule or waiver
granted, promulgated, or approved
under these sections:
  (9) Any injection of Quids or other.
material* specifically authorized under
applicable State law: solely for the
purpose of «*itnuUqpj or treating wells
                                       for the production of crude oil natural
                                       gas. or water: solely for the purpose of
                                       secondary, tertiary, or other enhanced
                                       recovery of crude oil or natural gee or
                                       which are brought to the *urface in
                                       conjunction with the production of crude
                                       oil or natural ga* and which are
                                       reinjected:
                                         (10) The introduction of any pollutant
                                       into a publicly owned treatment work*
                                       (POTW) when mch poliuttnt i*
                                       specified in and in compliance with
                                       applicable categorical pretreatment
                                       standard* and local limits developed in
                                       accordance with 40 CFR 403J(c) and
                                       into a POTW with an approved local
                                       pretreatment program or a 40 CFR
                                       40WO*e) State administered local
                                       program: and
                                         (11) Any release of source, special
                                       nuclear, or byproduct material, as those
                                       terms are defined in the Atomic Energy
                                       Act of 1954. in compliance with a legally
                                       enforceable license, permit, regulation.
                                       or other issued pursuant to the Atomic
                                       Energy Act of 1954.
                                       Federally permitted releases do not
                                       include release* exempt from regulation
                                       under the authority of one of the cited
                                       statutes: release* not in compliance with
                                       the applicable permit limit or condition.
                                       horns*, regulation, order, standard, or
                                       program: or release* into a medium.
                                       other than that covered in the applicable

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                 Federal  Register / Vol. 53. No.  138 / Tuesday. July 19.  1988 / Proposed Rules
                                                                     27281
 permit license, regulation, order.
 standard, or program.
 *     •     •    «    •
   "Release" meena any spilling, leaking.
 pumping, pounng. emitting, emptying.
 discharging, injecting, escaping.
 leaching, dumping, or disposing into the
 environment (including the
 abandonment or discarding of barrels.
 containers, and other dosed receptacles
 containing any hazardous substance or
 pollutant or contaminant), but excludes
  ft. Section 302.6 it amended by adding
 new paragraphs (e) and (f) as follows:

 i 902.8  Nottflcatton requtrwMfrta.
PART 35»-€UEftGEMCY PLANNING
AND
  (e) Whenever a release of a hazardous
substance exceeds its federally
permitted level as defined under { 302J
("federally permitted release") by a
reporuble quantity or more, notification
shall be made for such release in
accordance with the requirements of
this section or. if applicable, i 302A.
Where numerical levels for hazardous
substances are not specified any
release not in compliance with the
terms, related  to the character or
quantity of the release, of the applicable
permit license, regulation, order.
standard or program that equals or
exeeds a reports ble quantity must be
reported to the National Response
Center in accordance with this section
or. if applicable. } 302.8.
  (f) Notification is not required for the
disposal of polychlorinated  biphenyl
(PCB) approved by EPA and in .
substantial compliance with the
applicable Toxic Substance Control Act
(TSCA) regulations. 40 CFR Part 781.
and approval conditions.
  7. Section 302.7 is amended by
revising paragraph (al(3) to  read as
follows:

{302.7 tonatttM.
  (a)'**
  (3) In charge of a facility from which a
hazardous substance is released, other
than a federally permitted release, in a
quantity equal to or greater than that
reportable quantity determined under
this part who fails to notify  immediately.
the National Response Center as soon
as he or she has knowledge of such
release or who submits in such a
notification any information which he or
she knows to be false and misleading
shall be subject to ail of the sanctions,
including criminal penalties, set forth in
section 103(b)  of the Act
  a. The authority citation for Part 355 is
revised to read as follows:
  Authority: 42 U.S.C. 11002 and 11048.
  9. Section 355.40 is amended by
revising paragraph (a) to read as
follows:
I3SL40  Emerge
                           MMc
                 eyrMea
   (a) Applicability. (1) The requirements
 of this section apply to any facility:
  .(i) At which a hazardous chemical is
 produced, used, or stored: and
   (ii) At which there is a release of a
 reportable quantity of any extremely
 hazardous substance of CERCLA
 hazardous substance.
   (2) This section does not apply to:
   (i) Any release that results in
 exposure to persons solely within the
 boundaries of the facility:
   (ii) Any release that is a "federally
 permitted release." as defined as
 follows:
   (A) A discharge in compliance with a
 permit under section 402 of the dean
 Water Act
   (B) A discharge resulting from
 circumstances identified and reviewed
 and made a part of the public record
 with respect to a permit issued or
 modified under section 402 of the Clean
 Water Act and subject to a condition in
 such permit:
   (C) A continuous or anticipated
 intermittent discharge from a point
 source, identified in a permit or permit
 application under section 402 of the
 Clean Water Act which is caused by
 events occurring within the scope of
 relevant operating or treatment systems:
   (D) A discharge in compliance with a
 legally enforceable Federal or State.
 individual or general permit under
 section 404 of the Clean Water Act
   (E) A release in compliance with a
'legally enforceable Federal or State final
 permit issued pursuant to section
 3005(8) through (d) of the  Solid Waste
 Disposal Act from a hazardous waste
 treatment storage, or disposal facility
 when such permit specifically identifies
 the hazardous substances and makes
 such substances subject to e standard of
 practice; control procedure, or bioassay
 limitation or condition, or other control
 on the hazardous substances in such a
 release:
   (F) Any release in compliance with a
 legally enforceable permit issued under
 section 102 or section 103 of the Marine
 Protection. Research, and Sanctuaries
 Act of 1972:
   (C) Any injection of fluids authorized
 under Federal underground injection
control programs or State programs
submitted for Federal approval (and
disapproved by the Administrator)
pursuant to Part C of the Safe Drinking
Water Act
  (H) Any emission of a substance into
the air which is named specifically or is
included in a specifically named group
of substances subject to and in
compliance with a permit or control
regulation under section 111. section 112.
Title I Part C Title 1 Part D. or State
implementation plans submitted in
accordance with section 110 of the
Clean Air Act (and not disapproved by
the Administrator) when such permit or
control regulation is specifically
designed to limit or eliminate such
emission of a designated hazardous
pollutant or a criteria pollutant
including any schedule or waiver
granted, promulgated, or approved
under these sections:
  (I) Any injection of fluids or other
materials specifically authorized under
applicable State law: solely for the
purpose of stimulating or treating wells
for the production of crude oil. natural
gas. or water solely for the purpose of
secondary, tertiary, or other enhanced
recovery of crude oil or natural gas: or
which are brought to the surface in
conjunction with the production of o^al
oil or natural gas and which are
reinjected:
  0) The introduction of any pollutant
into a publicly owned treatment works
.(POTW) when such pollutant is
specified in and in compliance with
applicable categorical pretreatment
standards and local limits developed in
accordance with 40 CFR 403.5(c) tod
into a POTW with an approved
pretreatment program or a 40 CFR
403.10(e) State administered local
program: and
  (K) Any release of source, special
nuclear, or byproduct material as those
terms are denned in the Atomic Energy
Act of 1954. in compliance with  a legally
enforceable license, permit regulation.
or order issued pursuant to the Atomic
Energy Act of 1934.
  (iii) Federally permitted releases do
not include releases exempt from
regulation under the authority of one of
the died statutes: releases not in
compliance with the applicable  permit
limit or condition, license, regulation.
order, standard, or program: or releases
into a medium other than that covered in
the applicable permit license.
regulation, order, standard, or program.
•     •    •    *     *
(FR Doc 88-10182 Filed 7-18-88: 8:45 tm^

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*• n  T4        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                          WASHINGTON, O.C. 20460
                                                            OFFICE OF
                          JUL 29 1988                SOLID WASTE AND EMERGENCY RESPONSE

                                              OSWER Directive No.  9832.13

MEMORANDUM


SUBJECT:  Transmittal of the Suaerfund Cost Recovery Strategy

FROM:   /  J.  Winston Porter  J£L
          •Assistant Administrator!
TO:        Regional  Administrators,  Regions I-X
     Attached is the final Superfund Cost Recovery Strategy.  The
Strategy  sets forth the Agency's priorities and case selection
guidelines,  emphasizes the advance planning necessary to initiate
cost recovery actions within the Agency's preferred time frames,
and describes the cost recovery process fdr removal and remedial
actions.

     Cost recovery is one of the highest priorities of the
Superfund program.  This document should assist you in advancing
the Agency's objectives.

Attachment

cc:  Directors,  Waste Management Divisions
       Regions I, IV, V, VII, VIII
     Director,  Emergency and Remedial Response Division
       Region II
     Directors,  Hazardous Waste Management Divisions
       Regions III, VI
     Director,  Toxics and Waste Management Division
       Region IX
     Director,  Hazardous Waste Division
       Region X
     Directors,  Environmental Services Divisions
       Regions I, VI, VII
     Regional Counsel, Regions I-X
     Thomas  L.  Adams, Assistant Administrator for Enforcement and
       Compliance Monitoring
     Charles Grizzle, Assistant Administrator for Administration
       and Resources Management
     Roger J. Marzulla, Assistant Attorney General, Land and
       Natural Resources Division, Department of Justice

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                            OSWER  Directive  No.  9832.13
    THE SUPERPDND COST RECOVERY STRATEGY
Office of Solid Haste and Emergency Response
    U.S. Environmental Protection Agency

                July 29,  1988

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                          Table of Contents

     Purpose of this Guidance	1

I.   Program Priorities and Management	2

II.  Case Selection Guidelines.	7

III. The Cost Recovery Process for Removal Actions	12

     A. Pre-Removal Cost Recovery Activities	12

          1.  The Potentially Responsible Party Search
          2.  Development of the Administrative Record
          3.  Notice, Negotiation and the Issuance of
              Administrative Orders

     B. Cost Recovery Activities during the Removal Action....17

          1.  Documentation of Activities and Cost Accounting
          2.  Supplemental PRP Search

     C. Post-Removal Cost Recovery Activities	19

          1.  Evaluation and Completion of the Potentially
              Responsible Party Search
          2.  Cost Documentation
          3.  Demand Letters
          4.  Negotiation
          5.  Settlements
          6.  Consideration of Referral in the Event of No
              Settlement

IV.  Cost Recovery Process for Remedial Sites	30

     A.  Pre-Remedial Cost Recovery Activities	31

          1.  The Potentially Responsible Party Search
          2.  General and Special Notice Letters and
            •  Negotiations for a PRP Remedial Investigation
              and Feasibility Study
          3.  Settlement for PRP Remedial Investigation/
              Feasibility Study

     B.  Cost Recovery Activities during the Remedial
         Investigation/Feasibility Study	35

          1.  Documentation of Activities and Cost Accounting
          2.  Supplemental PRP Search

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          3.  Development of the Administrative Record
          4.  Special Notice Letters and Negotiation for PRP
              Remedial Design and Remedial Action

     C.  Settlement for PRP Remedial Design and Remedial
         Action	38

          1.  Full Settlement
          2.  Partial Settlement
          3.  No Settlement

     D.  Ccst Recovery Activities during the Remedial Design
         and Remedial Action	41

          1.  PRP RD/RA
          2.  Fund-Financed RD/RA
              a) Cost Documentation
              b) Demand Letters
              c) Consideration of a Referral in the Event of
                 No Settlement

V.  Existing cost Recovery Guidance	47
                                   ii

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                                      OSWER Directive. No. 9832.13
Purpose of this guidance
     This guidance document is intended to provide a framework
for planning and initiating actions to recover Federal funds
expended by EFA cr a State1 in CERCLA response actions.  Part I
discusses general cost recovery program priorities.  Part II
identifies case selection guidelines to aid managers in setting
priorities for case referrals for the most efficient use of cost
recovery resources.  Parts III and IV identify activities
required to support the development of cost recovery actions for
each site where the Agency spends Fund monies in response
actions:  Part III sets out the cost recovery process for removal
actions; Part IV sets out the cost recovery process for remedial
actions.  Part V is a bibliography of guidance documents related
to cost recovery.
     V While a State nay be the lead agency for response actions
taken at a site,  EPA retain* responsibility for pursuing recovery
of Federal funds  expended.

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                                      OSWER Directive No. 9832.13
Part I.  Program Priorities and Management
     The policy of the CERCLA Enforcement program is to obtain
response actions in.the first instance by responsible parties,
rather than by the Environmental Protection Agency  (EPA) or a
State.  However, there have been and will continue to be cases in
which the Agency will respond to releases using funds from the
Hazardous Substances Superfund  (the Fund) for site response
actions.  The recovery of Fund expenditures through the cost
recovery program is one of the highest priorities of the
Superfund program.  The costs associated with such Fund-financed-
response actions are recoverable fron the party or parties who
are liable under section 107 of the Comprehensive Environmental
Response, compensation, and Liability Act of 1980, as amended
(CERCLA, or the Act).2  CERCLA provides for the recovery of costs
through judicial actions under section 107 of the Act, as
components of settlements for prospective work under section 106,
or 122, and in administrative settlements under section 122.
     The priorities and objectives of the cost recovery program
are to:  l) maximize return of revenue to the Fund; 2) initiate
     2/  Section 10? provides generally that past and present
owner* and operators of a site, and persons  (e.g., generators)
who arranged for disposal or treatment of, and transporters who
contributed, hazardous substances  to a site, shall be liable for
all costs incurred  in response to  a release or threat of release
undertaken by the United states government, a state, an Indian
tribe, or any other person, for damages to or loss of natural
resources and the costs of assessing such damages or loss, and
for costs of any health assessment or health effects study
carried out under $104(i).

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                                      OSWER Directive No. 9832.13
necessary litigation or resolve ripe cases for cost recovery
within strategic tiae frames but no later than the time provided
under the statute of limitations;  3) encourage PRP settlement by
implementing an effective cost recovery program against non-
settlers (i.e., recalcitrants);  and, 4) use administrative
authorities and dispute resolution procedures effectively to
resolve cases without unnecessary recourse to litigation.
     In managing the program and achieving these objectives, EPA
must ensure that each response action (and supporting case
development activities) undertaken using Fund monies proceeds in
a manner that will optimize its cost recovery potential.   (See
Part III, Cost Recovery Process for Removal Actions, and Part IV,
Cost Recovery Process for Remedial Sites.)  In addition, EPA must
evaluate each ripe response action in a manner consistent with
this strategy to determine when, whether and how to proceed with
cost recovery.
     The stage at which a case becomes ripe for cost recovery is
an important concept.  A conventional removal is ripe when  it is
completed.3  A remedial is ripe concurrent with the initiation of
on-site construction of the remedial action.   (See footnote 5,
page 5.)
     3/  Although a RI/FS may be considered to be  a  removal,  cost
recovery generally is pursued as part  of  remedial  action  cost
recovery.

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                                      OSWER Directive No.  9832.13
     Sine* resources available to the cost recovery program are
limited, EPA must set priorities and select and plan actions in a
manner and at a time which will provide for the maximum return to
the Fund.  A major factor in setting priorities is the amount of
funds involved.  However, statute of limitations may warrant the
pursuit of a case of lower dollar value before one of higher
value.  Priorities are discussed in Part II, case Selection
Guidelines.
     Where possible, an attempt should be made to settle cost
recovery cases administratively under the authority provided in
CERCLA §122(h).  Use of this authority should result in cost
recovery case resolution for some cases in a shorter time frame
and with fewer resources than traditional litigation or
settlement through judicial means.  Use of the administrative
settlement authority for smaller cost recovery cases, especially
those with total costs of response less than five hundred
thousand dollars, should reduce case resolution time since these
may be directly settled by Regional offices without the prior
concurrence of either EPA headquarters or the Department of
Justice.4
     Where judicial actions are warranted, referral of cases
selected consistent with the guidelines set forth in Part II,
     4/  Authority to settle  cost  recovery  cases administratively
(CERCLA |122(h) authority) was  delegated to Regional
Administrators on September 21,  1987,  (Delegation  14-14-D).
Novel issues should be discussed with  EPA Headquarters.

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                                      OSWER Directive No. 9832.13


below, within the Agency's preferred tine frames5 will ensure

that the best cases will be filed well within the required

statute of limitations.

     Finally, the realization of the program's objectives depends

en the effective management of all aspects of the cost recovery

program.  Each Region must have a well-defined process in place

to ensure coordination among the Superfund program/enforcement

office, the  financial management office, and the Office of

Regional Counsel (and Headquarters, where appropriate).  The

process should also foster the efficient management of the

elements of  the cost recovery program including systems to cover

the following:

     a) the  on-going review, selection, and referral of ripe

     cases;

     b) the  assembly of cost documentation and the issuance

     of demand letters;

     c) tracking and collection of oversight cost recovery

     in settlements;

     d) the  review and documentation to close-out cases for
     5/  Cost recovery actions  for removals should be referred to
the Deparbs«nt of Justice as soon as possible after the action
has been completed but in most  cases, not  later than one year
after the completion date.  Cost recovery  actions for remedial»
should be referred to the Department of Justice at the time of
initiation of physical on-site  construction of the remedial
action.  See the June 12, 1987, Memorandum entitled coat Recovery
Actions/Statute of Limitations. OSWER Directive, No. 9832.3-1A.

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                                      OSWER Directive No. 9832.13
     which cost recovery will not be pursued;
     e) the effective use of administrative settlement
     authority;
     f) the tracking and follow-through of active cases
     (those in litigation); and,
     g) the establishment and collection of accounts
     receivable.
Effective information management on the status of each ripe case,
coupled with forward planning, is essential.  Timely and accurate
reporting in information management systems, especially CERCLIS,
is essential for management of the above processes and the entire
cost recovery program.
     The Agency must continue to utilize cost recovery
enforcement authorities to create an incentive for settlement and
disincentive for refusal to settle.  An atmosphere of risk of
cost recovery litigation will promote settlement for PRP response
actions as veil as settlements for cost recovery.

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                                    OSWER Directive No. 9832.13
Part II.  Case Selection Guidelines-
     As the Superfund program matures, an increasing number of
sites are moving beyond the early stages of the Superfund process
and into the remedial design and action phases, where greater
amounts of money are spent.  The vast majority of potential
reimbursement to the Fund in future years depend on recovery of
funds associated with these sites.
     Regions must make management decisions regarding which sites
to refer for judicial action under  107.  The following case
selection guidelines, when applied  to candidates for referral,
help ensure that resources are mainly directed towards those
cases which have the highest potential for replenishing  the
Fund.  The guidelines are generally based on the amount of money
expended at a site and take into account its recoverability
(i.e., strength of the case, financial viability of PRP(s)).
     Generally, the sites that will generate the largest returns
to the Fund are ripe remedial*, defined as those where the
remedial action has been initiated.  These cites should be
considered high priority for referral.  A cost recovery referral
should b«v scheduled for every site  where a federally funded
remedial action is planned and there are viable PRPs.  The action
should be filed no later than the initiation of physical on-site
construction of the remedial action.   (Note that in order to meet
thi» timing requirement, case preparation activities should begin
early.  See Part IV, Cost Recovery  Process for Remedial Portions
                                7

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                                      OSWER Directive NO. 9832.13

of NPL Sites, for further information.)  The Agency will defer
the filing of a remedial action beyond this date only in limited
circumstances for technical or strategic reasons.6
     The second category of sites to which resources should be
directed are those NPL or non-NPL sites where EPA has completed a
removal action  (including an expanded removal action or ERA),
remedial investigation/feasibility study (RI/FS), or an initial
remedial measure  (IRM), where the total costs of response are two
hundred thousand dollars or greater, and the possible statute of
limitations deadline is approaching.  Although the Agency's
position is that the SARA statute of limitations applies only to
those response actions initiated after the effective date of SARA
(October 17, 1986), the Regions should refer all cases well
within the SARA statute of limitations time frames, whether or
not the action was initiated prior to the effective date of SARA.
Where a conflict exists between referring a case in the first
category and referring a case in the second category, the
referral of cases with approaching statute of limitations
deadlines and costs greater than two hundred thousand dollars
should normally take precedence over the referral of ripe
remedial sites.  Pre-SARA cases in the second category that  are
     6/  For example,  a  Region may desire to  delay  th«  initiation
of a cost recovery  case  until  after evaluation of the success  of
implementation of an unproven  remedial  technology.
                                   8

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                                      OSWER Directive No.  9832.13
beyond the time frame of the SARA statute of limitations should
be referred as soon as possible.
     A related category of sites to which resources should be
directed are those NPL or non-NPL sites where EPA has completed a
removal action and the total costs of response are two hundred
thousand dollars or greater.  Sites in this category are
distinguished from the above category because they are not
nearing a potential statute of limitations deadline.  These cost
recovery referrals should be made no later than twelve months
after completion of the removal action.  In some .instances,
strategic reasons may warrant that EPA defer filing for cost
recovery of a removal action until the remedial action is
initiated.
     The fourth category of sites are those where there has been
a partial settlement providing the government less than full
relief and there are viable non-settlers.  These actions should
be pursued promptly as a disincentive to non-settlers.
     The fifth category of sites are those where total costs of
response are less than two hundred thousand dollars.  Consistent
with available resources, cost recovery referrals should be
considered for these sites where evidence linking the PRPs to the
sit* is good, and PRPs are recalcitrant, or the case may be used
to create good precedent or an example that EPA is willing to
pursue costs when the merits of the case warrant it.  Each Region
should plan to bring some small cost recovery actions each year
                                  9

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                                    OSWER Directive No. 9832.13
primarily to maintain an atmosphere of risk to PRPs associated
with sites with total costs of response less than two hundred
thousand dollars.-
     Within each  category above, decisions should generally be
made on the basis of an evaluation of the factors identified on
pages 26 and 43,  below, which will provide an indication of the
strength of the case.  This recognizes that cost recovery may not
be pursued for PRP viability and evidentiary reasons as well as
the lack of Agency resources for some small cases and
bankruptcies.
     The guidelines above do not relate directly to bankruptcy
referrals because they often present particularly difficult case
selection and management issues.  The Agency is frequently
operating under time constraints with imperfect information.
Nonetheless, it is important in bankruptcy cases to make reasoned
and informed judgments on whether a bankruptcy action is worth
pursuing, given other demands on Agency resources.  This
requires, at a minimum, an evaluation of the following factors:
the amount of funds to be recovered; the case against the PRP and
the possibility of full recovery from other PRPs; the likelihood
of significant recovery given the assets and liabilities of the
PRP (e.g., bankruptcies at multi-generator sites where viable
PRPs remain as compared to bankruptcy cases at sites where the
owner/operator is bankrupt and no other viable PRPs exist); the
claims of secured and unsecured creditors; and, the likely Agency
                                10

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                                      OSWER Directive No. 9832.13

resources involved.  When the likelihood of significant recovery
compared to resource utilization in pursuit of the recovery is
high, bankruptcy referrals should be prioritized in accordance
with the categories above.  The Revised Hazardous Waste
Bankruptcy Guidance. May 23, 1986, OECM, contains additional
information regarding the pursuit of bankrupt parties in
hazardous waste cases.
                                  11

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                                      OSWER Directive No. 9832.13
Part III.  THE COST RECOVERY PROCESS FOR REMOVAL ACTION^
     Before, during, and following a removal action there are
specific steps that-the Agency7 must take to facilitate
settlement or maximize the potential for recovery of funds in any
future cost recovery action.  The extent of each of the steps may
vary depending upon the cost, size and duration of the removal
action.  The timing may vary depending upon the exigencies of the
situation.  This section identifies and explains each of the
steps taken in the removal process to facilitate cost recovery.8

A.  Pre,-Removal Cost Recovery Activities
     Pre-removal activities that may be carried out in
preparation for future cost recovery actions include the
initiation of the potentially responsible party search, the
development of the administrative record, notice to identified
PRPS and negotiations with those PRPs who are interested, and the
issuance of administrative orders.  While each of these
     7/Throughout Part* III and IV, the terms "Agency" and
"Regions11 are used frequently  in discussions of activities to be
conducted.  When a State has entered or will enter into a
cooperative agreement with EPA to conduct any activities on a
site, the Region must ensure that activities identified in Parts
III and XV are conducted by either EPA or the State, as
appropriate*  Refer to the Interim Final Guidance Package on
Funding CERCLA State Enforcement Actions at NPL Sites, OSWER
Directive No. 9831.6 for additional information on activities
that can be undertaken by States.
     8/  See, also, Chapter 5  of the Supcrfund Removal Procedures
Revision Number Three. OSWER Directive No. 9360.0-03B.
                                  12

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                                      OSWER Directive No.  9832.13
activities is an integral part of the broader Superfund program,
each has a special significance in light of potential cost
recovery actions.
A.I.  The Potentially Responsible Party Search.  The
identification of potentially responsible parties (PRPs) in the
potentially responsible party search is central to all cost
recovery actions.  The search should uncover potentially liable
parties with whom EPA may negotiate and from whom EPA may seek
recovery of costs in the future, as well as develop the evidence
of liability that may be used in a judicial action.  While the
PRP search initiated following site .discovery may continue
throughout the Superfund process certain PRP search activities
should b* conducted prior to the initiation of a removal action.
The extent of further activities may depend on the expected costs
of the removal.
     At the time of discovery of a problem site/ a preliminary
PRP search is conducted by the Agency to identify the
owner/operator of a site and other readily identifiable PRPs.
The completed PRP search for a removal action should include the
following tasfcs, as appropriate:  history of operations at the
site; a titl* search of the site property; Agency record
collection and file review; interviews with government  officials;
PRP status/PRP history; records compilation; issuance of CERCLA
104(e) letters/RCRA 3007 letters; financial status;  PRP name and
address updates; appropriate identification of generators  and
                                  13

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                                      OSWER Directive NO. 9832.13
transporters; and, report preparation.  Any or all of these tasks
way and should be initiated prior to the initiation of a removal
action where time permits.  However, since many removals are of
an emergency nature, and there is often little time prior to
initiation of the action, all PRP search activities will not
commonly be initiated prior to the removal.   Each PRP search task
should be initiated at the earliest possible time during or
shortly after completion of the removal action.
     Program, enforcement and legal staff, and the Region's civil
investigator should work closely together in the development of
the PRP search from the initial planning stages through the
production of the PRP search report.  Regions should rely on the
expertise of the Office of Regional Counsel and the civil
investigator as veil as outside contractors where necessary to
conduct the PRP search and prepare and review the PRP search
report.  More information on the tasks listed above is provided
in detail in Chapter 3.1 of the Potentially Responsible Party
Search Manual. August 27, 1987, (OSWER Directive No. 9834.6).
     If total response costs are not expected to exceed two
hundred thousand dollars, the Region may defer implementation of
many of the tasks of the PRP search listed above until completion
of the removal action.  If total costs of the completed  removal
do not exceed two hundred thousand dollars, the Region should
evaluate available resources and competing priorities, and  in
light of the evaluation, decide whether or not to conduct
                                  14

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                                      OSWER Directive NO.  9832.13
additional PRP search activities.  At a minimum, a title search
of the property should be conducted.  If total costs of the
completed removal exceed two hundred thousand dollars, additional
PRP search tasks should be conducted in anticipation of further
enforcement activities.9
A.2.  Development of the Administrative Record.  The development
of the administrative record supporting the selection of a
response action is central to the Agency's ability to recover
costs.  If after completion of a removal action, a decision is
made to file a §107 judicial action, the administrative record
will serve as the basis for judicial review of issues concerning
the selection of the response action.  See section 113(j) of
CERCLA.  Prior to the.initiation of a removal action, Regions
should develop the administrative record consistent with the
applicable procedures set forth in the May 29, 1987 memorandum
entitled Administrative Records for Decisions on Selection of
CERCLA Response Actions (OSWER Directive No. 9833.3).
A.3.  Notice. Negotiations and the Issuance o^ Administrative
Orders.  Notice, negotiations, and the issuance of administrative
orders are activities that should be conducted to obtain an
     9/  Where the reaoval exceeds two hundred thousand dollars,
the property is marketable and of value and it may be sold, the
Agency should evaluate, during the PRP Search, the value of
filing notice of a lien on the property affected by the removal
action.  OECM's Guidance  on  Federal  Suoerfund Liens.
September 22, 1987,  (OSWER Directive No.  9832.12), provides
guidance on the use  of Federal liens.
                                  15

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                                      OSWER Directive NO.  9832.13
agreement from the PRP(s) to implement a response action,  thus
eliminating the need for cost recovery of response action costs.
There are important cost recovery aspects to each of these
activities.
     The Interim Guidance on Notice Letters. Negotiations, and
Information Exchange. October 19, 1987 (OSWER Directive
No. 9834.10) provides information on the content and timing of
notice letters for removal actions.
     If notice to PRPs leads to negotiations for a PRP removal
action, Regions should obtain an agreement  from the PRPs  for the
reimbursement of EPA's oversight costs.10   This is particularly
important for large removals that will involve extensive
contractor oversight costs.  The administrative order on  consent
should contain a provision which describes  the manner of
determining the amount,  the documentation to be furnished by EPA,
the schedule for billing by EPA, and payment by the PRP of the
oversight costs incurred by EPA.  Where a consent order for a
removal action contains  a provision for the reimbursement of
EPA's oversight costs, the Regional program office should provide
a copy of the order to the Regional Financial Management  Officer
with a request to establish an  account receivable and tracX
receipt of the oversight costs.  The Office of Waste Programs
     10/  CERCIA |104(a),  as amended,  requires reimbursement  for
oversight costs  for the  RI/FS.   See Part IV,  page 30.
                                  16

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                                      OSWER Directive No. 9832.13


Enforcement is developing further guidance on collection of

oversight reimbursement from PRPs.

     Where negotiations for a PRP response action are

unsuccessful, or the exigencies of the situation at the site do

not allow for extended negotiations, there is a presumption,

rebuttable for documented good cause, that Regions should issue a

§106 unilateral administrative order to viable PRPs.11  A

unilateral order may encourage PRP response and has the added

advantage of setting up treble damages12 and penalties13.

B.  Cost Recovery Activities During the Removal Action

     Cost recovery activities that occur during a removal action

depend upon whether the removal is conducted by the Agency  (or
       /  See the Issuance of Administrative Orders for
Removal Actions.  (OSWER Directive No. 9833.1).

     12/  Section 107(c)(3) of CERCLA establishes the authority
of the United States to collect treble damages for non-compliance
with an administrative order:  "If any person who is liable for a
release or threat of release of a hazardous substance fails
without sufficient cause to properly provide reaoval or remedial
action upon order of the President pursuant to section 104 or 106
of this Act, such person may be liable to the United States for
punitive damages in an amount at least equal to, and not more
than three.times, the amount of any costs incurred by the Fund as
a result of such failure to take proper action."

     13/  Section 106(b) provides that "any person who, without
sufficient causa, willfully violates, or fails or refuses to
comply with, any order of the President under subsection  (a) may,
in an action brought in the appropriate United States district
court to enforce such order, be fined not more than $25,000 for
each day in which such violation occurs or such failure to comply
continues."
                                  17

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                                      OSWER Directive No. 9832.13

its contractors) or a potentially responsible party, or both.14
During a fund-financed removal action, all EPA and contractor
activities and costs must be carefully recorded and the PRP
search should be reviewed and supplemented, as necessary.  During
a PRP removal action, the Agency must keep track of its oversight
costs.
B.I.  Documentation of Activities and Cost Accounting.  During a
removal conducted by EPA or PRPs, the Agency must maintain an
accounting of activities and costs associated with the response
action.  These costs may include:  EPA in-house expenditures;
contracts; money paid to other federal agencies through
interagency agreements (lAG's); and, money paid to States through
cooperative agreements.  EPA personnel must take .care to charge
all time and travel associated with a removal action using the
site-specific account number  (site/spill  identifier number,
SSID).  Contracts, IAC'S and cooperative  agreements should
provide that, charges are made site-specifically, also.
B.2.  Supplemental PRP Search.   During the removal action, the
search for potentially responsible parties should continue.
Newly identified PRPs should be  issued notice letters and
administrative orders as appropriate.  The Region should consider
     14/  In some instances, the EPA conducts initial site
stabilization work and than negotiates with PRPs  for than to
conduct the remainder of the removal action undar a consant
order.  Activities conducted in preparation for potential cost
recovery actions would necessarily  include those  for both fund-
financed removal actions and PRP removal actions.
                                  18

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                                      OSWER Dir«Ctiv« No. 9832.13
the total expected response costs at a site when conducting a
supplemental PRP search.  Generally, the higher the total cost of
removal, the greater the effort the Agency should make to
identify PRPs and develop the information that links them to the
site.  For all removal actions over two hundred thousand dollars,
the tasks identified in Section A.I must be completed in advance
of a final decision to proceed or not with litigation for cost
recovery.
C.  Post-Removal Cost Recovery Activities
     After the completion of a fund-financed removal action, the
major components of the potential cost recovery case are
collected (administrative record, the PRP search, total costs of
response at the site, the demand letter and response to it, and
other pertinent information) and the likely success of cost
recovery efforts is evaluated.  Based on the evaluation, the
Region must make, a final decision *to proceed or not to proceed
with further efforts at cost recovery.
C.I.  Evaluation and Completion of the Potentially Responsible
Party Search.  After the removal has been completed, the PRP
search should be evaluated  for completeness.  The Regional
Counsel assigned to the case should review the PRP search  for
evidentiary sufficiency.  The decision to conduct any additional
PRP search activities not yet initiated should be made on  the
basis of the sufficiency of the evidence and consistent with the
total costs of response and the likelihood of identifying
                                  19

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                                      OSWER Directive NO. 9832.13
additional PRPs.  The higher the costs of response, the stronger
the effort should be to locate PRPs and link them to the site.
Some cases with total costs of response less than two hundred
thousand dollars will not be litigated.  Extensive PRP searches
should not be conducted for such smaller cases without prior
evaluation of the site expenditures, costs of additional PRP
search activities, likelihood of identifying viable PRPs, and
likelihood of litigation if PRPs fail to respond satisfactorily
to a demand letter.
     If the PRP Search has not identified any PRP, the case
should be closed out by way of a cost recovery close-out
memorandum.15  This will provide documentation that the cost
recovery potential has been evaluated and remove the case from
further consideration.  The execution of a Cost Recovery Close-
out Memorandum on a site must be reported in the CERCLIS system.
C.2.  Cost Documentation.  Following the conclusion of the
removal, and sometimes earlier, the Region should begin gathering
the records which serve to support a demand letter.  The
threshold of two hundred thousand dollars should be used to
determine the initial extent of cost documentation.  Initially,
documentation for cases less than two hundred thousand dollars
should include the total costs of the response activity broken
     15/  See the "Guidance  of  Documenting Decisions not to Take
Cost Recovery Actions",  (OSWER  Directive  No.  9832.11).
                                  20

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                                      OSWER Directive No. 9832.13
down by general categories.  These categories include EPA in-
house expenditures, contracts, other federal agency costs
(through interagency agreements) and Fund monies expended by
States through cooperative agreements.  Additional documentation
may be required later to respond to a Freedom of Information Act
request, to respond to PRPs in negotiation, or to prepare for
litigation.
     For those viable cases with costs greater than two hundred
thousand dollars,  full cost documentation, including the
submittal of the Cost Recovery Checklist to Headquarters should
proceed prior to issuance of the demand letter.  The checklist,
once completed, must be sent to OWPE allowing adequate time
(typically twelve  weeks or more) for document collection.  EPA
Headquarters, the  Region, the Department of Justice, other
federal agencies,  and States, each have certain responsibilities
in the collection  and packaging of cost documentation.  The
Procedures for Poqujiffpfc Incr Costs for CERCIA i!07 Actions. January
30, 1985 (OSWER Directive No. 9832.0-la) describes roles and
responsibilities of each office in preparing cost documentation
for litigation.
C.3.  rUWFITfl l*etter«.  As soon as the Region has documented costs
consistent with the level of expenditures  and likelihood of
litigation, the Region should issue a demand for payment of all
                                  21

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                                      OSWER Directive No.  9832.13
past costs to PRPs.16  The demand letter should be sent to all
PRPs as soon as practicable after the completion of the removal.
A demand letter should be issued in all cases where response
costs have been incurred under CERCLA regardless of whether a
decision has been made to initiate a judicial proceeding for cost
recovery.
     Guidance on the content of a demand letter, and a model
demand letter can be found in the Cost Recovery Actions unde^ ^he
Comprehensive  Environmental Response. Compensation, and
Liability Act of 1980. August 26, 1983 (OSWER Directive No.
9832.1).  In addition to the items listed in the 1983 Cost
Recovery Guidance to be included in a demand letter, all demand
letters shall reflect the revisions of the SARA amendments to
section 107(a) which provides that the "amounts recoverable in an
action under this section shall include interest on all [costs
incurred by EPA not inconsistent with the national contingency
plan].  Such interest shall accrue from the later of  (i) the date
payment of a specified amount is demanded in writing, or  (ii) the
date of the expenditure concerned."
C.4.  Negotiation.   When the PRP(s) responds to a demand  letter
expressing interest in meeting with the Agency to discuss  the
     16/  The authority  to  issue  demand letters  under SARA has
been delegated to Regional  Administrators.   Program and  legal
personnel should consult with their supervisors  to determine who
has redelegated responsibility for preparing and issuing demand
letters in their Region.
                                  22

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                                      OSWER Directive No. 9832.13
Agency's claim, negotiations should be initiated and carried out
within a limited period of time.  The time period should be
determined by the Region on the basis of factors affecting the
complexity of the negotiations  (e.g., the number of potentially
responsible parties that will participate, the amount of the
claim).  Further information on the development of a negotiating
team and related issues can be  found in 1983 Cost Recovery
Guidance.
     The Region may also decide to utilize alternative dispute
resolution techniques to achieve settlement.  Arbitration, for
example, is specifically addressed in section 122(h)(2) of
CERCLA.   Arbitration may be utilized for cases where total
response costs (excluding interest) do not exceed $500,000.   (At
the time of issuance of this guidance, the Office of Enforcement
and Compliance Monitoring is drafting a regulation on procedures
for resolving small cases through arbitration.)  Additional
information may be found in Guidance on the Use of Alternative
Dispute Resolution in EPA Enforcement Cases. August  14, 1987,
issued by the Office of the Administrator.
     In those cases where the Region receives no response or  an
unsatisfactory response to a demand letter, the Region must
decide whether to pursue cost recovery efforts further.  See
section C.6, Consideration of Referral in the Event  of No
Settlement, below.
                                  23

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                                      OSWER Directive No. 9832.13

C.5.  Settlements.  If negotiations are successful, agreements
will be formalized in an administrative document or a judicial
consent decree. The-Region nay enter a partial settlement with
some PRPs and seek to recover unreimbursed costs from non-
settlors.  Where the Agency does enter into a partial settlement,
viable recalcitrant PRPs should be pursued as soon as practicable
for the remainder of the costs.
     Administrative settlements17 may be entered into by the
Agency for cost recovery pursuant to Section 122(h) of SARA18.
Administrative settlements in cases where total costs of response
at a facility, excluding interest but including all future costs,
do not exceed five hundred thousand dollars may be signed by the
Regional Administrator without Department of Justice concurrence.
Pursuant to (122(1), the Agency must solicit public comment on
proposed 122(h) administrative settlements by placing a notice of
the settlement in the Federal Register.  The comment period is
thirty days.  Administrative settlements for cost recovery for
cases where the total cost of response on a site are expected to
exceed five hundred thousand dollars may only be entered into
     l7/  The Office of Enforcement and Compliance Monitoring is
drafting guidance on the procedures to be  followed for
administrative cost recovery settlements.
     18/  Section 122(h) of CERCLA gives the Agency the  authority
to settle cost claims administratively.  Such  settlements  require
the prior written approval of  the Department of Justice  if total
costs of response at a facility  exceed five hundred thousand
dollars (excluding interest).
                                  24

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                                      OSWER Directive No. 9832.13
with the advance concurrence of EPA Headquarters and the
Department of Justice.  Administrative settlements are fully
enforceable pursuant to CERCLA §122(h)(3).19
     Judicial consent decrees may require consultation or
concurrence with EPA's Office of Waste Programs Enforcement and
Office of Enforcement and Compliance Monitoring in addition to
the approval of the Department of Justice.   See the Revision of
CERCLA Civil Judicial Settlement Authorities Under Delegations
14-13-B and 14-14-E. June 17, 1988, (OSWER Directive No. 9012.10-
a) ,  for information on settlement authorities and their
requirements.
C.7.  Consideration of Referral in the Event of No Settlement.
In each case where the Agency has conducted a response action
under the authority of section 104 of CERCLA, the Agency must
make an affirmative decision to proceed  or not to proceed with a
judicial cost recovery action.  This applies to those sites where
no response or an unsatisfactory response to a demand letter was
received a* well as to those sites for which negotiations
occurred but were unsuccessful.  The Region should have gathered
all th« information necessary to decide  the final disposition of
     19/  CERCTA »«ction  122(h)(3), Recovery  of Claims,  states
"If any person  fails to pay a  claim that has  been  settled under
this subsection, th« department  or agency  head shall  request the
Attorney G«n«ral to bring a civil action in an appropriate
district court  to  recover th«  amount  of such  claim, plus costs,
attorneys'  fees, and interest  from the date of settlement.  In
such actions, the  terns of the settlea«nt  shall not b«  subject to
review.H
                                  25

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                                      OSWER Directive No. 9832.13
the case.  The  relevant  factors  to be considered  include:
      (a)  the amount of  costs at issue;
      (b)  the strength of evidence connecting the potential
          defendant(s) to the site;
      (c)  the availability  and merit of any defense,  (See
          CERCLA  §107);
      (d)  the quality of release, remedy, and expenditure
          documentation  by  the Agency, a State or third
          party;
      (e)  the financial  ability  of the potential
          defendant(s) to satisfy a judgment for  the  amount
          of the  claim or to pay a substantial portion of
          the claim in settlement;
      (f)  the statute of limitations; and
      (g)  ether cases competing  for resources.
     If upon review of the  case  on the basis of the above
factors, the Region decides not  to pursue a cost  recovery action,
the decision must be documented  in a cost recovery close-out
memorandum.20  A  close-out  memorandum will provide documentation
for why EPA has not pursued cost recovery in a particular case,
and provide the Agency with information necessary for selecting
referrals and predicting revenues to the Fund in  future years.
     20/  See th« Guidance  qn  Documenting Decisions  not  to Take
Cost Recovery Actions.  (OSWER  Directive  No.  9832.11).
                                  26

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                                      OSWER Directive No.  9832.13

     Generally, the Regions should anticipate developing cases
for litigation for all sites where total costs of response exceed
two hundred thousand dollars and negotiations for settlement were
unsuccessful.  Sites where total costs of response do not exceed
two hundred thousand dollars, and negotiations were unsuccessful,
are also candidates for referral consistent with the case
selection criteria discussed in Part II, above.  The cases
selected for litigation involving sites where total costs of
response are less than two hundred thousand dollars should be
those where PRPs are recalcitrant, evidence linking PRPs to the
site is good, the case may be used to create good precedent (such
as a site where EPA issued a unilateral order, PRPs did not
comply, and EPA is likely to obtain a favorable ruling for treble
damages or penalties), or the case is otherwise meritorious.
     A decision to proceed with a judicial action for cost
recovery requires the assembly of all documents associated with
the case including those necessary to substantiate that:
     1)  there im a release or the threat of a release of a
     hazardous substance;
     2)  the> release or threat of release is from a
     facility;
     3)  the release or threat of release caused the United
     States to incur response costs;
     4)  the Defendant is  in one or more of those categories
     of liable parties in  CERCLA section 107(a).
                                  27

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                                      OSWER Directive NO.  9832.13
     These elements are discussed in Cost Recovery Actions under
the Comprehensive Environmental Response. Compensation, and
Liability Act of 1980. (OSWER Directive No. 9832.1) and
Procedures for Documenting Costs for CERCIA S107 Actions.  (OSWER
Directive No. 9832.0-la).  In addition, the referral should
anticipate the defense that the response was inconsistent with
the national contingency plan.  The referral should comport with
the applicable guidance and include or reference the
administrative record, PRP search, and activity and cost
documentation.  Evidence substantiating each element of proof
must be discussed in a referral package submitted to the
Department of Justice when proceeding with a judicial action.
     Generally, referrals seeking the recovery of costs expended
in a removal action should occur no later than twelve months
after completion of the removal, whether or not the site is on
the National Priorities List21 and regardless of whether further
response action is to be taken.  Exceptions to this policy may be
possible in certain instances for legitimate litigation strategy
reasons.  For instance, where a remedial action is to be
initiated within three years of the completion of the removal,  it
     21/  Although sites on the National Priorities List will
have further costs, e.g.. costs of a  remedial  investigation and
feasibility study, the action  for the recovery of removal costs
should be brought within a year of completion  of the removal to
assure that we litigate the case while the evidence is most
readily available.  See Cost Recovery Actions/statute of
Limitations. June 12, 1987  (OSWER Directive  No. 9832.3-1A).
                                  28

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                                      OSWER Directive No. 9832.13
may be appropriate to combine an action for the recovery of the
removal costs with the action for the recovery of RD/RA costs.22
However, in no event should filing be delayed beyond the statute
of limitations.
     22/  Where further  response  action  is  contemplated, the
Agency ordinarily seeks  a declaratory  judgment  for future
response costs.  See CERCIA  section  113(g)(2).
                                  29

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                                      OSWZR Directive No. 9832.13
Part IV.  COST RECOVERY PROCESS FOR REMEDIAL SITES
     The remedial process in the Superfund program includes the
remedial investigation and feasibility study, remedial design,
and remedial action.  Activities related to cost recovery must be
conducted in each phase of the remedial process in order to
maximize the potential for recovery of funds.
     The cost recovery process for remedial sites23 includes the
following elements:  the search for potentially responsible
parties (PRPs); the opportunity for PRPs to conduct the work; the
development of the administrative record; cost documentation; and
the timely issuance of demand letters.  While the process for
remedial sites is similar to the previously described process for
removal sites, the level of effort of each element must be
increased over that for removal actions because of the greater
amount of money involved.  Sites that proceed through a remedial
investigation and feasibility study and remedial design and
action will generally exceed the threshold level of two hundred
thousand dollars used in the removal cost recovery process.
Described below are the activities required for each of the
element* in the remedial cost recovery process and the timing of
each of th« activities.
     23/  Where a site has more  than  one operable unit, cost
recovery activities described  in the  remedial process should be
conducted for each operable unit, where appropriate, since
operable units may be held to  be separate actions for purposes of
cost recovery statute of  limitations.
                                  30

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                                      OSWER Directive NO. 9832.13
A.  Pre—Rqgfrd.ja.?- Cost: Recovery Activities
     Activities that may be carried out in preparation for future
cost recovery actions prior to the initiation of a remedial
investigation and feasibility study (RI/FS) include the
potentially responsible party search, general notice, special
notice, negotiations, and the issuance of an administrative order
on consent for a PRP RI/FS.  While each of these activities is an
integral part of the broader Superfund program, each has a
special significance in light of potential cost recovery actions.
A.I.  The Potentially Responsible Party Search  The
identification and location of potentially responsible parties is
central to all future enforcement activities, including cost
recovery actions.  The PRP search will generate names of
potentially responsible parties as well -as the information to
link the PRPs to the site.  This information is likely to serve
as.evidence in future judicial actions to prove the liability of
the defendants.
     Concurrent with the NPL listing process, the Region should
initiate a'PRP search in accordance with the guidelines set out
in the Potentially Responsible Party Search Manual.
August 27, 1987,  (OSWER Directive No. 9834.6).  Fund-lead,
enforcement, civil investigators, and Office of Regional Counsel
staff should work closely together in the  development of the  PRP
search from the initial planning stages through the production of
the PRP search report.  Ideally, the following activities  should
                                  31

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                                      OSWER Directive No.  9832.13
be conducted prior to the initiation of the RI/FS to ensure that
all PRPS may be given general notice of their potential liability
well before they are given special.notice of the opportunity to
conduct the RI/FS:  history of operations at the site; a title
search of the site property; Agency record collection and file
review; interviews with government officials; PRP status/PRP
history; records compilation; issuance of CERCLA 104(•)
letters/RCRA 3007(c) letters; financial status;  PRP name and
address updates; identification of generators and transporters;
report preparation; and, an evaluation of the value of filing
notice of a lien on the site property.  (The Guidance on Federal
Superfund Liens. September 22, 1987,  (OSWER Directive No.
9832.12), provides guidance on the use of Federal liens to
enhance Superfund cost recovery.)  The Region should rely on the
expertise of the civil investigator and the Office of Regional
Counsel and utilize available contract resources to conduct the
PRP search and prepare the PRP search report.
     Sufficient information should be collected on all PRPs to
satisfy the special notice requirements of section 122 of
CERCLA.24  It possible, the PRP search should be completed prior
to the initiation of the RI/FS.   In some instances,  completion of
     24/  CERCLA  1122(e)(l)  identifies  information that should be
included, to the  extent  it  is  available,  in a special notice
letter.  This  information includes  the  names and addresses of
other PRPs, the volume and  nature of  the  hazardous substances
contributed by each  PRP, and a ranking  by volume of the
substances at  the facility.
                                  32

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                                      OSWER Directive No. 9832.13
all PRP search activities prior to the initiation of the RI/FS
will not be possible.  For example, it may be necessary to
undertake an Rl to determine the source of contamination.  In
other instances, the search for generators may be complicated or
"new" information may be discovered late in the process.
A.2.  General and Special Notice Letters and Negotiations for a
PRP Remedial Investigation and Feasibility Study.  Once PRPs have
been identified, the Region should issue General Notice Letters
to apprise PRPs of their potential liability.  This should be
done as soon as possible after they have been identified.  In
addition, information relating to names and addresses of other
PRPs, volumetric rankings and nature of substances should be
provided as soon as possible.
     Special notice letters will provide PRPs with a specific
opportunity to negotiate terms of agreement concerning their
participation in the conduct of the RI/FS.  Special notice
letters should also include a demand for payment of past costs if
a Fund-financed removal action was conducted at the site and a
demand letter has not Already been sent.  Information regarding
the content and timing of general notice letters, special notice
letters, and negotiations for PRP RI/FS can be found in the
Interim guidance on Notice Letters. Negotiation, and Information
Exchange. October 19, 1987  (OSWER Directive No. 9834.10).
                                  33

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                                      OSWER Directive No. 9832.13
A. 3.   Settlement: for PRP Remedial Investigation/Feasibility
Study.   A settlement for PRP conduct of the RI/FS must include
the requirement that PRPs pay for cost incurred by EPA in
obtaining assistance from third parties in the oversight of the
RI/FS and may also involve the recovery of past costs incurred by
the Agency.
     Where negotiations result in a settlement for a PRP RI/FS,
EPA will require the settling PRPs to commit in the settlement
agreement to pay the costs of oversight of the RI/FS including
extramural costs (contracts and interagency agreements) and
intramural costs (EPA payroll, travel, and other costs) on a
specified schedule.  The Region should track reimbursement in
CERCLIS and contact the Regional Financial Management Officer to
set up an accounts receivable in the Financial Management System
(FMS) for the receipt of oversight costs.
     In the case of those sites where removal actions have
occurred prior to the negotiation, and the cost recovery is not
being pursued on a separate track, additional provisions for
recovery of past costs or a reservation of EPA's rights to pursue
those costs should be included in the administrative order.  If
some but not all past costs are recovered in the settlement, and
a reservation of the Agency's right to pursue all  of the
remaining costs is included, the advance concurrence of the
Department of Justice under section 122(h)(l) of CERCLA will not
be necessary.  Of course, if the settling PRPs  agree to  pay all
                                  34

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                                      OSWER Directive No. 9832.13
past costs, a claim is not being compromised and DOJ's prior
concurrence is not necessary.
     Where negotiations do not result in settlement, the Agency
will proceed with a Fund-financed RI/FS.
B.  Cost Recovery Activities During the Remedial Investigation/
Feasibility Study
     The activities that occur during the remedial investigation
and feasibility study in support of future cost recovery actions
may include a supplemental PRP search, the development of the
administrative record, the documentation of activities and costs,
notice and demand letters, and negotiation for PRP remedial
design and action.
B.I.  Documentation of Activities and Cost Accounting.  The
documentation of activities  and accounting of costs must occur
whether the remedial investigation and feasibility study are
being conducted by the Agency, a State, or the PRPs.
     During a Fund-financed  RI/FS, each organization involved
(e.g., EPA, a State, other Federal agencies, EPA's contractors-)
is responsible for keeping an accounting of it* activities and
the costs corresponding to those activities/items.  Cooperative
agreements with States for State-lead, Fund-financed RI/FS's must
include requirements that States maintain documentation  according
to standard EPA procedures for cost recovery.  These records will
be assembled later during the RI/FS in preparation  for
negotiations with PRPs for private-party remedial design and
                                  35

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                                      OSWER Directive No.  9832.13
action and may serve as evidence of costs incurred in future
judicial actions to substantiate cost recovery claims.25
     When the RI/FS-is being conducted by the PRP(s), the lead
agency must carefully record the costs of all Fund-financed
activities associated with the oversight of that action.  The
settlement agreement should specify the schedule for payment of
oversight costs throughout the RI/FS.  Normally, the Agency will
issue a demand for payment at the end of a one year period
throughout the course of the PRP RI/FS for all costs incurred
during that year.  Quality record keeping using CERCLIS is
essential since the Agency must be able to substantiate the
amount of money demanded and what activities were performed for
that amount.  The Regional Financial Management Officer should
set up an accounts receivable in FMS for the receipt of oversight
costs.
B.2.  Supplemental PRP Search.  As the RI/FS proceeds, the Agency
should continue to develop the PRP search as necessary.
Additional PRP« found since the start of the RI/FS who did not
receive notice letters should be issued general notice letters as
soon as they are identified.  This will give them an opportunity
to participate, to the extent feasible, in on-going work.  The
evidence linking each PRP to the site should be fully reviewed by
the Office of Regional Counsel  in anticipation  of pursuing
     25/  Cost documents  are  not  part of  the  administrative
record for a site.
                                  36

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                                      OSWER Directive No. 9832.13
litigation against the PRP, and supplemented as necessary.
Again, the Region should ensure that all activities identified in
the Potentially Responsible Party Search Manual. (OSWER Directive
No. 9834.3) have been conducted or are planned.  All sources of
information identified by the Region's civil investigator should
be thoroughly pursued.
     If the PRP search indicates that there are no PRPs at the
site, the Region should prepare a close-out memorandum to
document the basis for a decision not to proceed with cost
recovery.  If the PRPs are not financially viable, the Region
should review the merits of proceeding with cost recovery.  See
the discussion of bankruptcy referrals in the Case Selection
Guidelines section for factors to consider in such cases.
B.3.  Development of the Administrative Record.  As in removal
actions, the development of an administrative record which will
support the selection of  . >.e of the remedial alternatives is
critical to the cost recovery potential of a case.  Section
113(j) of CERCIA limit* judicial review of issues concerning the
adequacy of a response .action to the administrative record.  An
accurate and complete record, therefore, should simplify  future
cost recovery actions.  Section 113(k) requires that interested
persons be given the opportunity to participate in the
development of the administrative record.  During the RI/FS,
whether conducted by a PRP, a State, or EPA, Regions should
develop the administrative record consistent with the applicable
                                  37

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                                      OSWER Directive No.  9832.13
procedures.  (See Administrative Records for Decisions on
Selection of CERCIA Response Actions. May 29, 1987, OSWER
Directive #9833.3.)
B.4.  Special Notice Letters and Negotiation for PRP Remedial
Design and Remedial Action.  As the proposed plan and draft RI/FS
are made available for public comment, the Regions should again
send special notice letters to all identified PRPs to provide
them with an opportunity to negotiate regarding conduct of the
remedial design and remedial action  (RD/RA).
     The special notice letters for RD/RA should include a demand
for payment of past costs not yet reimbursed, e.g., the costs of
a Fund-financed RI/FS.  The Region should determine total past
costs (to the extent possible), and  subtract from those costs any
costs already reimbursed.  The Region must ensure that the amount
of past costs demanded is qualified to account for costs incurred
but not yet paid by the Agency.  Interest which has accrued on
amounts previously demanded should be included in the demand as
appropriate (see page 22).
C.  Settlement for PRP Remedial Design and Action.
     As mentioned above, past costs will be one of the subjects
of negotiation for PRP remedial design and action.  The
negotiations will result in one of three outcomes:  full
settlement, partial settlement, or no settlement.  See the
Interim CERCIA Settlement Policy. OSWER Directive No. 9835.0.  for
a complete discussion of the factors to consider when settling an
                                  38

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                                      OSWER Directive No. 9832.13
action under CERCIA.  The cost recovery consequences of each of
these are discussed below.
C.I.  Full Settlement.  Where negotiations result in a full
settlement, the settling PRPs agree to conduct the work and
reimburse the Agency for past costs.  In addition, the settling
PRPs will have agreed to reimburse EPA for future oversight
costs.  The agreement will be formalized in a consent decree
which must specify the manner and timing of billings and payments
and be filed in the appropriate United States District Court.
For future oversight costs, EPA may be required to send demand
letters at regular intervals according to the schedule set forth
in the consent decree.  The schedule for payment  should be
recorded in the appropriate CERCLIS file.  The Regional Financial
Management Officer must be advised that an account for receipt of
the recovered money should be established.
C.2.  Partial Settlement.  Where negotiations result in a partial
settlement, unrecovered costs should be sought from non-settlors
in a §107 judicial action.  The referral of a case against non-
settlors should occur concurrent with referral of the consent
decree with settlors, or as soon as possible thereafter.  This
will serve to highlight enforcement against the non-settling
PRPs.26  It the Region will not pursue the costs  waived  in the
settlement with the PRP», the ten point analysis  justifying the
     26/ Of course, this  should take  into  account  accrual  of a
cause of action.
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                                      OSWER Directive No.  9832.13
settlement for less than one hundred per cent should document the
basis for not pursuing the unrecovered costs.  If a decision not
to pursue the unrecovered costs is made after the settlement
analysis has been prepared in final form, a close-out memorandum
should be prepared to .document the basis for that decision.27
C.3.  No Settlement.  Where negotiations do not result in any
settlement, the site classification will determine the next step.
     For Fund-lead sites, unless a statute of limitations problem
is anticipated for the recovery of RI/FS costs, the Region should
proceed with Fund-financed remedial design and remedial action
before initiating an action for the recovery of RI/FS costs.
Consistent with applicable and relevant guidance, consideration
should be given to issuing unilateral $106(a) orders to
recalcitrant parties in  order to encourage PRP response and set
up claims for treble damages and penalties.
     For Federal enforcement-lead sites, where the remedial
action is not funded and the case is not settled, the Region
generally should issue a unilateral section  106 administrative
order and, where compliance is not forthcoming, immediately
thereafter (taking into  account whether there is  a funded RD)
refer the case for injunctive relief and past costs  (combined
CERCLA f1106/107 judicial actions).  The cost documentation must
be completed by the time of the referral to  support  the section
     27/ See footnote  15,  page  20.
                                  40

-------
                                      OSWER Directive No.  9832.13

107 claim.  Again, see the 1983 Cost Recovery Guidance and the
1985 Cost Documentation Procedures Manual for details of
preparing the cost recovery portions of a case.
D.  Coat Recovery Activities during the Remedial Design and
     Remedial Action
     By the time a site has reached the remedial design and
remedial action phases, much of the work for assembling a cost
recovery case has already been completed.  Additional activities,
which will mainly consist of updating information collected
earlier, will depend upon the outcome of settlement negotiations-,
and the viability of the remaining case.  Where the Agency has
agreed to a partial settlement, cost recovery  activities to be
conducted may include those necessary in overseeing the PRP work
as well as those necessary for pursuing a judicial action against
non-settlors.
D.l.  PRP RD/RA.  Co«t recovery activities required during a PRP
RD/RA depend upon the type of settlement  (i.e., full or partial)
and the specific provisions included in the  settlement for
reimbursement of past costs and oversight costs.  Any settlement
that includes reimbursement of EPA's oversight costs throughout
the course of the remedial design and action will require the
Agency to regularly document all  costs  associated with the
oversight function.  Demand letters  for oversight co«t» should be
sent according to the  schedule set forth in  the consent decree
and tracked  in CERCLIS.  The Regional Financial Management
                                  41

-------
                                      OSWER Directive No.  9832.13
Officer must be provided with a copy of the consent decree so
that an accounts receivable can be established in FMS and
payments tracked.
     The Agency should continue to account separately for all
other EPA site-specific costs not attributable to oversight
(e.g.. costs associated with a separate operable unit which the
PRPs are not implementing) in the event that a judicial action
against non-settlors  (or settlors) occurs.
D.2.  Fund-Financed RD/RA.  Fund-financed remedial design and
action will normally  account for the largest site-specific
expenditures attributable to a site.  Therefore, remedial design
and action costs provide the largest potential for return of
site-specific expenditures.  This fact makes it essential that
the Agency devote significant resources to the prompt development
of cost recovery actions for remedial design and action costs.
     a)Cost Documentation.  There is a presumption that absent
full resolution, the  Agency will proceed with judicial cost
recovery actions for  all Fund-financed remedial actions and/or
unreimbursed costs unless a decision has been made not to pursue
cost recovery.  In preparation for a referral, the Agency must
continue maintaining  an accounting of all costs incurred on the
site, including costs incurred by Agency personnel and
contractors, and costs incurred through cooperative  agreements
with States and interagency agreements with other Federal
agencies.  The Cost Documentation Procedures Manual  (1985)
                                  42

-------
                                      OSWER Directive No. 9832.13

provides details on cost documentation preparation for section
107 actions.
     b) Demand Letters.  As soon as practicable after the
completion of the remedial design, the Region should send demand
letters to all identified PRPs.  The amount of money demanded
should include total past costs not yet recovered, and applicable
interest, plus a projection of the costs expected to be spent in
remedial action.  While the demand letter should include the
projected costs, it should also state that the amount is an
estimate and is subject to change.  Demand letters at this point
should not invite discussion on any subject but costs, i.e. .
negotiation on the selected remedial action will not be reopened
at this point.
     c) Consideration of Referral in the Event of No Settlement.
Assuming that attempts at negotiation at this point are
fruitless, the Region must make a final determination of the
disposition of the case.  The relevant factors to be considered
are the sane as those for removal action cases:
     (a)  the strength of evidence connecting the potential
          defendant(s) to the site;28
     (b)  the availability and merit of any defense.   (See
          CZRCLA |107);
     28/ In the case  of  large  remedial  actions with  PRP  searches
done early in the program,  the PRP search should  be  reviewed and,
as appropriate, upgraded, before  a decision is made  to close-out
the case.
                                  43

-------
                                      OSWER Directive No. 9832.13
      (c)  the quality of release, remedy, and expenditure
          documentation by the Agency, a State or third
          party;
      (d)  the financial ability of the potential
          defendant(s) to satisfy a judgment for the amount
          of the claim or to pay a substantial portion of
          the claim in settlement; and
      (e)  the statute of limitations.

     If upon review of the above factors, the Region believes
that a judicial cost recovery action will not be fruitful, a cost
recovery close-out memorandum should be prepared and its  issuance
documented in the appropriate CERCLIS field.
     A decision to proceed with a judicial action for cost
recovery requires the assembly, of all documents associated with
the case including those necessary to substantiate that:
     1)  there is a release or the threat of a release of a
     hazardous substance;
     2)  the release or threat of release is from a
     facility;
     3)  th« release or threat of release caused the United
     States to incur response costs.
     4)  the Defendant is in one of those categories of
     liable parties in CERCLA section 107(a).
     These elements are discussed in Cost Recovery Actions under
                                  44

-------
                                      OSWER Directive No. 9832.13
the fcomprehensive Environmental Response. Compensation.
Liability Act of 1980.  (OSWER Directive No. 9832.1) and
Procedures for Documenting Costs for CERCIA S107 Actions. (OSWER
Directive No. 9832. 0-la) .  In addition, the referral should
anticipate the defense that the response was inconsistent with
the national contingency plan.  The referral should comport with
the applicable guidance and include or reference the
administrative record, PRP search, and activity and cost
documentation.  Evidence substantiating each element of proof
must be discussed in a litigation report included  in the referral
package submitted to the Department of Justice when proceeding
with a judicial action.  At this point, the assembly of evidence
should merely require updating information previously  assembled,
e.g.. the administrative record, cost documentation, the PRP
search report.
     Referrals seeking the recovery of costs expended  in a
remedial design and remedial action should occur concurrently
with the initiation of on-site construction of the remedial
action.  RD/RA referrals should not affect the schedule of design
or construction.  Where  remedial design and remedial action are
divided into operable units, referrals should occur concurrent
with the initiation of each remedial action operable unit.29  The
     29/  Section  113(g) of  CERCIA provides  that  in cost  recovery
actions under section  107  "the court  shall enter  a declaratory
judgment on liability  for  response costs  or  damages that  will be
binding on any subsequent  action  or actions  to  recover  further
                                  45

-------
                                      OSWER Directive No. 9832.13
Agency will defer beyond this date the filing of a remedial case
only in limited circumstances for technical or strategic reasons.
     Once a case for the recovery of remedial action costs has
been referred to the Department of Justice, the Region must
periodically document on-going costs incurred and submit these
costs to DOJ.  The litigation team should discuss the frequency
and timing of the periodic cost up-dates.
response costs or damages."
                                  46

-------

           -se-:.
            .as- -=:;- DC 2D-5C
                                    "968
                                        9200
IEPA
Catalog of
Superfund Program
Directives
Interim
Edition

-------
Tnis  Interim Catalog is designed  to supplement the  Office  of Solid waste
and Bnergency  Response  (OSWER)  Directives System publications by providing
a  quick reference  to the  most current  policy,  procedural  and technical
directives governing the Office of Emergency and Remedial Response's (OEBR)
Superfund Program.

•Die Catalog  is divided into four sections.  The first contains a listing of
documents by program and key word.   Section II is organized numerically and
abstracts  all  final documents.    Section III  contains a  list  of draft
documents,  with  projected date  for  final release  and  an  abstract,  if
available.   Finally, an index lists  all documents numerically.

This  interim version covers all documents through  July 31,  1988.   Regular
supplements  will encompass certain  planned changes for managing guidance,
as well as a complete update of new  issuances.

Copies  of  the  Catalog may be  obtained from  the  Superfund Docket  at
202-382-6940.   Questions  or information  about the  Catalog may be directed
to  the Policy and  Analysis Staff, Office of  Program  Management, OERR,
Attention:   Betti VanEpps, FTS or  202-475-8864.

-------
                                   OF QOBUSNTS
Key Word Cross-Reference

Section 1 -  Catalog of Superfund Program Directives
             By Program Responsibility And Key Word                     1
Section 2 -  Document Abstracts                                        16
Section 3 -  Documents In Final Draft Development                      42
Numerical Index To Superfund Program Directives

-------
                                                                     Pace
     Alternative Water Supplies 	  Remedial            6-13
     Analytical, Laboratory
     Support and Sanpling Instructions  ....  Pre-Remedial         4-5
     Bibliographies	Policy/Admin.         1-3
     Claims	Remedial
                                                 Renovai            14-15
     Clean Water Act Interface	Remedial            6-13
     Compliance with Other Laws (ARARs) ....  Policy/Admin.         1-3
     Comunity Relations	Remedial            6-13
     Contracts	Policy/Admin.         1-3
                                                 Remedial            6-13
                                                 Removal            14-15
     Costs and Cost Sharing 	  Remedial            6-13
                                                 Removal            14-15
     Data Management	Policy/Admin.         1-3
                                                 Remedial            6-13
     Delegations	Policy/Main.         1-3
     Documents Management	Policy/Admin.         1-3
     Drinking Water	Renewal            14-15
     Emergency and Expedited Response Actions .  Renovai            14-15
     Federal Facilities	Policy/Admin.         1-3
                                                 RqnpdltO            6-13
     Field Operating Guides (Health, Safety)  .  Remedial            6-13
     Financial Management . .	pamarMai            6-13
                                                 Ronoval            14-15
     Flood Plains and Wetlands	Policy/Main.         1-3
     Fund-Lead Projects	Remedial            6-13
July 31, 1988
- 1 -
QSWER Directive 9200.7-01

-------
Key Word Cross-Reference, continued
     Groundwater	  .   Policy/Main.        1-3
                                                 Remedial            6-13
     Hazardous Site Ranking System (HRS)  .  .  .   Pre-Remedial         4-5
     Interagency Agreements	Policy/Attain..        1-3
     Mining Waste	Policy/Maun.        1-3
     Methane Sites	Policy/AAnin.        1-3
     Modeling	Remedial            6-13
     National Contingency Plan (NCP)	Policy/Mmin.        1-3
     National Priority List (NPL) 	   Pre-Remedial         4-5
     Off-Site	Remedial            b-13
     Preliminary Assessments & Site
     Investigations (PA/SI)	Remedial            6-13
     Program Implementation	Policy/Adnin.        1-3
                                                 Removal           14-15
     Public Health	Pre-Remedial         4-5
     Quality Assurance	Policy/Mmin.        1-3
     RCRA/CERCLA Interface	Remedial            6-13
                                                 Removal           14-15
     Records of Decision	Remedial            6-13
     Records MaiiayfmaiL	Removal           14-15
     Risk and Bqposure Assesanent	Pre-Remedial       14-15
     Recycling	Ronedial            6-13
     Regional Project Management	Remedial            6-13
     Remedial Response, Initiation of	Remedial            6-13
     Remedial Action Start Mandate	Remedial            6-13
July 31, 1988                      - 2 -          OSWEB Directive 9200.7-01

-------
ley Wort Cross-Reference, oontiiued

                                                                     Pace
     Remedial Investigation/Feasibility
     Studies (RI/FS)	Remedial            6-13
     Remedial Design/Remedial Action (RD/RA)  .  Remedial            6-13
     SARA Implementation	Pre-Remedial         4-5
     Selection of Remedy	B«npfljal            6-13
     SITE Program   	Remedial            6-13
     Site Operations Planning 	  Remedial            6-13
     State Program Management	  Remedial            6-13
     Statutory Issues	Removal            14-15
     Technical Assistance Grants Program  . . .  Remedial            6-13
     Technologies	Remedial            6-13
July 31, 1988                      - 3 -          OSWER Directive 9200.7-01

-------
            SECTION 1 - CATALOG OF SUPBgUND PROGRAM DIRECTIVES
                        BY PROGRAM RESPONSIBILITY AND KEY NDRD
                         POLICY AND AZKNISTRATION
  9200.7-01    Catalog Of Superfund Directives (8/88), page 17

  9380.1-02    Hazardous Waste Bibliography (10/9/86), page 41


                       -aMg (ABARS)
  9234.0-05    Interijti Guidance On Conpliance With Applicable Or Relevant
               And Appropriate Requirements (7/9/87), page 20

  9234.1-01    CERCLA Conpliance With Other Laws Manual (Volumes 1 and 2)
               (Draft), page 42

  9234.1-03    CERCLA Conpliance With Other Laws Manual (Volme 3) (Draft),
               page 42
Contracts

  9242.3-05    RIM II Contract Award Fee Performance Evaluation Plan
               (7/25/84), page 21
  9221.0-02    CERCLIS Data Handling Support Policy Statement (3/31/86),
               page 17
  9012.10      Redelegations Of Authority Under CERCLA And SARA (5/25/88),
                    16
  9260.1-09    Delegations Of Remedy Selection To Regions (Under Delegation
               *14-5) (3/24/86), page 23

  9260.3-00    Delegations Of Authority Under n»e Federal Water Pollution
               Control Act (PVPCA) Applicable To Bie Superfund Program
               (4/16/84), page 23
July 31, 1988                      - 1 -          OSWER Directive 9200.7-01

-------
policy anA Administration, continued
  9200.4-01    Guidelines For Producing Superfund Docunents (2/9/87),
               page 17
  9272.0-01    Inpiementation Of CERCIA Strategy At Federal Facilities
               (4/2/84), page 23

  9272.0-03    Responsibilities For Federal Facilities (8/19/85), page 24

  9272.0-04    Federal Facilities (8/19/85), page 24

  9272.0-05    Responsibilities For Federal Facilities (8/26/85), page 24
                Wetlands
  9280.0-02    Policy On Flood Plains And Wetlands Assessments  (8/85),
               page 25
  9295.1-01    Menorandun Of Understanding Between ASTER And EPA (4/25/85),
               page 27

  9295.2-02    Joint CORPS/EPA Guidance (6/24/83), page 27

  9295.2-03    interagency Agreement Between Corps Of Engineers And EPA IT
               Executing P.I. 96-510 (CERCIA) (12/3/84), page 27

  9295.5-01    MBflorandun Of Understanding (MDU) Between FQft And EPA For
               Die Implementation Of CERdA Relocation Activities Under
               PL 96-510 (4/5/85), page 28

  9295.5-02    implementation of EPA/FIMA Mepoianflan Of Understanding
               On CERCLA Relocations (6/14/85), page 28
  9234.0-04    Applicability Of BCBA Requirenents To CESOA Mining waste
               Sites  (8/19/86), page 20
July 31, 1988                      - 2 -          OSWER Directive 9200.7-01

-------
Policy v™* Mtadnistration, con*•?>•»«*<
  9360.0-06A   Relationship Of de Ranoval And Ranedial Program Under
               Revised NCP (3/10/86), page 37
        Tnnli
  9 200. 3-0 LA   Super fund Conprehensive Accomplishments Plan
               Manual (SCAP) (FY-88) (10/1/87), page 16

  9200.3-02    Inpleraentation Strategy For Reauthorized Superfund:  Short
               Term Priorities For Action ( 10/24/86 ) , page 16
  9200.3-05    Flexibility In de FY-88 Superfund Regional Bctranural
               Operating Plan (6/7/88), page 16
  9200.1-05    Quality Assurance Plan For Superfund (Draft), page 42
July 31, 1988                      - 3 -          OSWER Directive 9200.7-01

-------
  9240.0-01    User's Guide To The Contract Laboratory Program (8/1/84),
               page  20
  9240.0-02    Analytical Support For Superfund (3/20/86), page 21
  9355.0-03    Uncontrolled Hazardous Waste Site Ranking (3/31/88), page 33


  9320.1-02    Guidance For Establishing THe NPL  (6/28/82), page 28
  9320.1-05    RCRA/NPL Listing Policy  (9/10/86), page 28
  9320.1-06    RCRA Special Study Waste Definitions:  Sites Requiring
               Additional Consideration Prior To NPL Proposal Under SARA
               (3/10/87), page 29
  9320.1-07    Interim Guidance For Consideration Of Sections 105 (g) And
               125 Of  SARA Prior To NPL Proposal Of Special Study Waste
               Sites (8/21/87), page 29
  9320.1-08    Listing Of Municipal Landfills On NPL (10/24/86), page 29
  9320.1-09    Listing Of Municipal Landfills On NPL (8/21/87), page 29
  9320.3-01    Guidance For Updating Bie NPL (5/12/83), page 29
  9320.3-02    Instructions For Pronulgating NPL Update (1/18/84), page 30
  9320.3-03    Procedures For Updating One NPL  (5/23/84), page 30
  9320.3-04    Guidance For Proposed NPL Update «3 (2/10/84), page 30
  9200.6-02    NPL Docket Guidance  (Draft), page  42
  9320.3-05    NPL Information Update *4  (4/38/85), page 30
  9320.3-06    Updating tttt NPL:  Update *€ Proposal (9/17/85), page 30
  9320.4-01    Interim Information Release Policy Systems - A Users Manual
               (4/18/85), page 30
JUly 31, 1988
- 4 -
OSUER Directive 9200.7-01

-------
                    , continied
Pro T A«ri navrv           nd Site
  9345.0-01    Preliminary Assessment (PA) Guidance FY-1988 (2/12/88),
               page 32

  9345.1-02    Expanded Site Inspection (SI) Transitional Guidance For
               FY-88 UO/1/87), page 32
  9285.4-01    Superfund Public Health Evaluation Manual (10/1/86), page 26

  9285.4-02    Guidance For Coordinating ASTER Health Assesanent Activities
               With The Superfund Remedial Process (5/14/87), page 27

  9285.4-03    Health Assessnents By ASTDR IN FY-88 (4/7/88), page 27
  9285.5-01    Superfund Exposure Assessment Manual (Draft), page 43

  9285.6-01    Superfund Risk Assessment Information Directory (12/17/86),
               page 27
  9345.2-01    Pre-Renedial Strategy For inplenenting SARA (2/12/88),
               page 32
July 31, 1988                      - 5 -           OSWEB Directive 9200.7-01

-------
  9355.3-02    Guidance For Providing Alternative Water Supplies (3/1/88),
               page 33
Ctaimc


  9225.0-02    Forwarding Claims To Headquarters (4/25/84), page 17
  9330.2-04    Discharge Of wastewater From CERCLA Sites Into PO1WS
               (4/15/86), page 31
  9230.0-02    Superfund Connunity Relations Policy (5/9/83), page 18

  9230.0-03    Connunity Relations Handbook (Final) (2/86), page 18

  9230.0-03A   Ccnnunity Relations Activities At Superfund Biforcanent
               Sites - Interim Guidance (3/22/85), page 18

  9230.0-03B   Comnunity Relations In Superfund -  A Handbook (Interim
               Guidance) (6/88), page 18

  9230.04      Connunity Relations Guidance For Evaluating Citizen Concerns
               At Superfund Sites (10/17/83), page 19

  9230.05      Connunity Relations Requirements For Operable-Units
               (10/2/83), page 19

  9242.5-01    Procedures Manual For Superfund Connunity Relations
               Contractor Support (Draft), page 42
July 31, 1988                      - 6 -          OSttER Directive 9200.7-01

-------
Biantial Program, oontiiued
  9242.3-07    inpienentation Of TJie Decentralized Contractor Performance
               Evaluation And Award Fee Process For Remedial program
               Contracts (3/9/87), page 22

  9250.1-01    Policy On Cost-Sharing At Publicly-Owned Sites -(3/30/83),
               page 22

  9250.3-01    Waiver Of 10* Cost Snare For Remedial Planning Activities At
               Privately-Owned Sites (5/13/83), page 22

  9250.3-02    Guidance On Implementing Waiver Of 10t Cost Sharing For
               Remedial Planning (6/3/83), page 22

  9345.0-02    Guidance For Low and Medium Cost Site Discovery Activities
               (Draft), page 43

  9355.0-10    Remedial Action Costing Procedures Manual (9/1/85), page 34
  9355.07B     Data Quality Objectives Development Guidance On Remedial
               Response Actions (Two volumes!  (3/1/87), page 34
        Facilities
  9272.0-02    Initial Guidance On Federal Facilities ERCIA Sites
               (12/3/84), page 23

  9318.0-04    Coordination Between Regional Superfund Staffs And Office Of
               Federal Activities (OFA) Regional Counterparts On CERCLA
               Actions (10/29/84), page 28
July 31, 1988                      - 7 -          OSWER Directive  9200.7-01

-------
                  contiiued
rift id fliTiifl^Un PuirtRsi  Hftftltfii 5af,fftY %       i

  9285.1-01    standard Operating Safety fluid* Manual (11/19/84), page 25

  9285.2-01    Field Standard Operating Procedures Manual #4 Site Bitry
               ( 1/1/8 j)  page 25

  9285.2-02    Field Standard Operating Procedures Manual #7 -
               Decontamination Of Response Personnel ( 1/1/85 ) , page 25

  9285.2-04    Field Standard Operating Procedures Manual f8 - Air
               Surveillance (1/1/85), page 26

  9285.2-05    Field Standard Operating Procedures Manual *6 - Work Zones
               (4/1/85), page 26

  9285.3-01    Field Standard Operating Procedures Manual t9 - Site Safety
               Plan (4/1/85), page 26

  9285.3-02    Occupational Health Technical Assistance And Enforcement
               Guidelines For Superfund, page 26

  9285.3-02    Employee Occupational Health & Safety (7/7/87), page 26

  9355.0-14    A Conpendiuni Of Superfund Field Operations (12/1/87),
               page 35
  9275.2-01    Remedial Financial Management Instructions (9/21/84),
               page 24
  9355.1-01    Federal Lead Renedial Project Management Manual (12/1/86)
               page 36

  9355.2-01    State Lead Renedial Project Manual (9/30/87), page 36

  9355.1-03    Terminating Contracts For Superfund Fund-Lead Renedial
               Action Projects  (Draft), page 44
July 31, 1988                      - 8 -           OSWER Directive  9200.7-01

-------
  9355.0-23    Interim Guidance On Funding For Ground Water And Surface
               Water Restoration Actions (10/26/87), page 35

  9283.1-01    Recoranendat-ons For Groundwater Remediation At Die
               Millcreelc,  «msylvania Site (3/24/86), page 25

  9283.1-02    Guidance Gn Remedial actions For Contaminated  Groundwater
               At Superfund Sites (Draft), page 43
  9355.0-08    Modeling Remedial Actions At Uncontrolled Hazardous Waste
               Sites (4/1/88), page 34


Off-Site

  9330.1-01    Requirements For Selecting An Off-Site Option In A Superfund
               (V28/83), page 30

  9330.2-05    CERCLA Off Site Policy:  Providing Notice To Facilities
               (5/12/86), page 31

  9330.2-06    O5CLA Off Site Policy:  Eligibility Of Facilities in
               Assessment Monitoring  (7/28/86), page 31
  9330.1-02    Evaluation Of Program And Enforcement-Lead Records Of
               Decision (RODS) For Consistency With RCRA Land Disposal
               Restrictions (12/3/86), page 31

  9347.0-0.1   Interim RBA/CERCLA Guidance On Non-Contiguous Sites And
               On-Site Management. Of Waste Residue (3/3/86), page 33

  9347.0-02    Epplenentation Guidance For Solvent Dioodn, And California
               List Wastes Subject To HCRMOWA Land Disposal Restrictions
               (Draft), page 44
July 31, 1988                      - 9 -          03UER Directive 9200.7-01

-------
    rrt<; n-f
  9340.2-01    Preparation Of Decision Documents For Approving Fund-
               Financed And EOT RRnMlal Actions Under CERCLA (2/27/85) ,
               page 32

  9335. 3- O2    Guidance On Preparing Superfund Decision Doojnents;   Bie
               Proposed Plan And ROD (Draft) , page 43

  9355.0-21    Additional Interim Guidance For FY-87 Records Of Decision
               (7/24/87), page 35
  9380.2-04    Decision Criteria For Recycling Wastes From O38CLA Sites
               (Draft), page 44
  9355.1-02    RPM Primer (9/30/87), page 36
  9242.3-03    Procedures For Initiating Remedial Response Services
               (7/6/84), page 21
  9355.0-24    OSWB Strategy For Management Oversight Of Hie RCRA/CEBCLA
               Renedial Action Start Mandate (12/28/87), page 35
  9355.0-04*   Superfma Remedial Design And Remedial Action (RD/RA)
               Guidance (6/1/86), page 33
July 31, 1988
- 10 -
OSftBt Directive 9200.7-01

-------
                              Llitv Starlies  (
                                          BIZESJ

9340.1-01    Participation of Potentially Responsible Parties (PRPS) In
             Development Of Remedial Investigations and Feasibilities
             Studies (RI's and FS's) (3/20/84), page 31

9355.0-05C   Guidance On Feasibility Studies (FS) Under CERCLA (6/1/85),
             page 33

<^55.0-06B   Guidance On Small a 1 Investigations (RI's) Under CERCLA
             (6/V85), page 34

9355.0-20    HI/PS Inprovenents (7/22/87), page 36

9355.3-01    Guidance For Conducting Remedial Investigations (RI) And
             Feasibility Studies (FS) Under CERCIA (Draft),  page 44

9355.3-05    Hl/FS IspTOvenents Follow-Up (4/25/88>, page 36
Selactlcn of
  9355.0-19    interim Guidance On Superfund Selection Of Reoiedy (2/1/86),
               page 35
  9380.2-03    Superfund Innovative Technology Evaluation (SITE) Program
               Strategy And Piuyiaai Plan  (12/1/86), page 41
  9380.2-02    Site Operations Plan  (Draft), page 44
July 31, 1988                     -  11 -           OSWEB Directive 9200.7-01

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  9375.0-01    Guidance In Preparation Of A Superfund Memorandum Of
               Agreement (SJDA) (Draft), page 44

  9375.1-06    At»ai i Of Cooperative Agreements ID Political Subdivisions
               (2/12/87), page 39

  9375.1-09    Interim Guidance On State Participation In Pre-Renedial And
               Rmpdial Response (7/21/87), page 40

  9375.1-10    Involvement Of Indian Tribal Governments In The Superfund
               Pre-Remediai And Rmariial Piuyiam (Draft) , page 44
  9375.1-11    State Procurement under Superfund p^nMlai cooperative
               Agreements (7/88), page 40
  9375.1-12    State Access To EPA Contractors During P««tdiai Process
               (4/27/88), page 40

  9375.2-01    State CORE Piuyidm Funding Cooperative Agreements
               (12/18/87), page 40
  9200.3-04    Resource Distribution for TAG Grant Pvuuidiu (Draft), page 42

  9230.1-01    Interim Guidance On Technical Assistance Grants For Public
               Participation (3/26/86), page 19

  9230.1-02    Technical Assistance Grants Piuyiam Activities Prior To
               Issuance Of Interim Final Rule (1/11/88), page 19

  9230.1-03    Citizens Guidance Manual For The Technical Assistance Grant
               Program (6/88), page 20

  9230.1-04    Regional Guidance Manual For The Technical Assistance
               (7/88), page 20

  9345.0-03    Guidance For Special Study Activities (Draft), page 43
July 31, 1988                     -  12 -           OSWER Directive 9200.7-01

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  9380.0-02    Slurry Trench Construction For Pollution Migration
               Controls (2/1/84), page 40
  9380.0-03    Guidance rcr Cleanup Of Surface Tank At id Drum Sites
               (5/28/85,, page 40
  9380.0-04    Remedial Action At Waste Disposal Site- Handbook (Revised)
               (10/1/85), page 40
  9380.0-05    Leacnate Plume Management (11/1/85), page 41
  9380.0-06    Guidance Document For Cleanup Of Surface Impoundment Sites
               (7/17/86), page 41
  9380.2-05    Guidance on Differentiating Alternative Technologies,
               page 44
July 31, 1988
- 13 -           OSH&R Directive 9200.7-0}

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                              BEKXAL PBDSB*!
  9225.0-03    Notification Of Restrictions On Reimbursement Of Private
               Party Costs (11/25/85), page 18
  9242.2-0IB   Emergency Response Cleanup Services (ERCS) Users'  Manual
               (10/20/87), page 21

  9242.4-01A   Technical Assistance Team (TAT) Contract Users' Manual
               (9/V87), page 22
  9250.2-01    Policy On Cost-Sharing Of Inmediate Removals At Publicly
               Owed Sites (3/30/83), page 22
  9360.1-01    Interim Final Guidance On Removal Action Levels At
               Contaminated Drinking water Sites (10/6/87), page 39
  9360.0-10    Expedited Response Actions (7/8/86), page 38

  9360.0-15    Role Of Expedited Response Action (ERAS) Under SARA
               (4/2V87), page 39

  9380.2-01    Draft Alternative Treatment/Disposal Technology Guidance
               For Removal And Expedited Removal Actions, page 44
9275.1-01    Removal Financial MJii
                  24
                                         nu Instructions (7/31/84),
  9360.0-08    Removal Actions At Methane Release Sites (1/23/86), page 38
July 31, 1988
                                - 14 -
Directive 9200.7-01

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  9360.0-03B   Superfund Removal Procedures, Revision #3  (2/88), page 37

  9360.0-14    Use Of Expanded Removal Authority 1t> Address NPT And
               Proposed NFL Sites (2/7/87), page 39

  9360.0-18    Ranoval Program Priorities, 3/31/88, page 39
  9360.2-01    Model Program For Removal Site File Management (7/18/88),
               page 39
  9J60.0-12    Guidance On Implementation Of The Revised Statutory Limits
               On Removal Actions  (4/6/87), page 38

  9360.0-13    Guidance On Implementation Of The "Contribute To "Die
               Efficient Remedial Performance" Provision (4/6/87), page 38
July 31, 1988
- 15 -
OShER Directive 9200.7-01

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Redelegation Of Authority Hatter OSCLA and SARA
     9012.10                   5/25/88 - OPM/PAS                   41 pages

Complete  set  of  new  and  revised  redele-gations  of  authority regardina
activities  under Ch'Kl.'lA  and  SARA.   Published under the  signature of the
AA/OSHER, it is the current  and  definitive  delegations document for thes*
authorities.    Attachment A  contains rede legations  of authority  to tak*»
specific  actions.   Attachment B designates responsibilities  to  exercist
concurrence, consult or receive notice.



     (No. to be  added)         9/13/87 - OFM/PAS                   68 pages

TSiis  document,  signed by the^  Administrator  and  transmitted under  the
signature of the Director, OERR  on 9/24/87, contains  the complete set of
final  new and  revised internal delegations of authority implementing the-
provisions  of SARA.   It may be  requested with  the Redelegations,  listed
above.
                              lisneents Plan Kraal  (SCAP)  (PT-88)
    9200.3-01A               10/1/87 - OTM                      240 pages

Provides guidance to  the agency and its program managers for the projected
acconplishnents  for the  current, fiscal year.   It is  used for budgeting,
resource  allocation,  and piuyiaia monitoring  throughout the  fiscal  year.
Prepared annually.


loplenentation Strategy For Reauthorized Superfund:  Short Tea Priorities
  for Action
    9200.3-02                10/24/86 - OR!                      24 pages

First  in a series of •eoDranda providing  direction for  implementing the
Superfund  yiuyiaa  under  SARA.   Provides  basic  instruction on  initial
priori-tie* for yiuyiaa implementation and considerations that must be tafcen
into account under SARA.  Addresses the uanageaent of on-going remedial and
removal response  actions, both  Fund and Enforcement, as affected by SARA.
Flexibility In *ff^» FT-S1 ftjtw^fug Regional Fii i eeii il Operating Plan
    9200.3-05                6/7/88 - OEM                        6 pages

Intended to assist piuyidm managers in effective utilization of their FY-88
extramural operating  funds.
July 31, 1988                      - 16  -          OSUER Directive 9200.7-01

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oii «vn i no* yor Producing Superfund
    9200.4-01                2/9/87 - ORVE&S                    12 pages

First in  a series of  planned guidances designed to  organize and institu-
tionalize  the composition  techniques, publication  and distribution  pro-
cedures to  be followed in  developing documents that are  usable,  readable
and available.   Efcphasis is  on concise,  well-referenced documents.   This
specific  guideline addresses  issues  of  availability,  cross referencing,
indexing, and follow-up contacts.   Writing techniques are  suggested  that
can result  in streamlined documents written in clear English that provide
an  appropriate  level  of  detail.    Format dng  suggestions .are  made  to
facilitate condensation for use in  field  marjals  or  electronic indexing or
filing.
Catalog Of ^*pTl\gi3 PMMJI ,• Directives (Tn»y<» version.)
    9200.7-01                8/88 - OEM/PAS                      56 pages

Bibliography in its interim format that will serve as an index and abstract
catalog to  assist the  user in  selecting the most current  Superfund doc-
uments best suited for a particular need.   Final directives are separated
from draft documents.  All are indexed by program responsibility, key word,
OSUER number and title, and contain brief abstracts of content,  "mis issue
covers all documents through 7/31/88.  Bie final version, expected early in
FY-89, will acxin'ass  planned changes for managing guidance.   The catalog
is designed for loose-leaf maintenance with quarterly updates.
        Data ««n*-n*g Support Policy
    9221.0-02                3/31/86 - OHJflCS                    2 pages

Statement  of  present,  policy  regarding  management  of  the data  handling
support contract  for L'mL'LTS provided under  contract  by Computer Sciences
Corporation (CSC).
Forwarding **!*<•« To Headquarters
    9225.0-02                4/25/84 - HSCD                        1 page

Sets a sr*rlfif> tin* frane within which claims, inquiries regarding claims,
and requests for yn> authorl»tig" must be forwarded to Headquarters.
July 31, 1988                      -  17  -         OSWR Directive  9200.7-01

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Notification Of Restrictions C*i p«^ii*«"'m»""n of Private Party Costs
     9225.0-03                11/25/85 - ERD                       3 pages

Directs  Regions  to  ensure  that  affected  coonunities   are informed  of
restrictive  provisions of CERCLA regarding private party reimbursements for
removal  costs.   When a removal  action that affects  private residents is
approved, the  OSC shall attempt to notify then that the expenses they incur
are  incurred at  their  risJc and expense,  and are not  reimbursable  by the
Federal government.   OSC's are cautioned not to make statements that can be
construed by connunity members as promises by EPA to reimburse for c_ean-up
costs.
Superfund CoHmity a»ia»-<»To^ Policy
    9230.0-02                5/9/83 - HSCD                        5 pages

Articulates the  agency policy for comamity relations activities that oust
be an integral part of every Superfund financed remedial or removal action.
Serves  as an  introduction to the  more detailed  handbooks  that  provide
specific,  detailed  direction  for conducting  viable camunity relations
activities at Superfund sites.
coBnunity Relations ^M*! •y>^  (Final) Manual
    9230.0-03                 1986 - HSCD                        146 pages

Represents  the agency's policy  and jJioyidui  guidance for  developing and
implementing community relations piutjrams at Superfund sites.  15* handbook
is  intended for  use by States,  EPA staff,  and other  Federal  agencies.
Offers  step-by-step procedures for  developing and  managing an effective,
site-specific  coonunity relations  pi'uyram.    Chapters  include  connunity
relations during  removals and remedial response during enforcement action.
Examples of coonunity relations techniques and sample plans are provided.
mere are also instructions for administering a community relations program
and various reporting formats.
Ccnunity *»i»t*fM Activities At S^etfund Fiifini iauii sites - Interia
    9230.03a                 3/22/85 - HSCD                      15 pages

Describes  now to  conduct canunity  relations piu>jj.4u»  in the course of
enforcement  actions  toil*  reserving  the  integrity  of the  enforcement
process.
July 31, 1988                     -  18 -          OSHER Directive 9200.7-01

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          Halations In S^erfund - A BandLooJc (Interim Guidance)
     9230. 03B                 6/88 - HSCD                           Manual

Applicable  to   all   response  actions  conducted  under  OSCLA,   whether
performed by  EPA,  other Federal agencies, or state governments.   Provides
policy  requirements  for coordinating  activities at  Superfund sites  and
additional  techniques and  guidance that can  be used  to supplement  and
enhance  a basic comunity relations program.   mis is  a complete  revision
of  the  9/83 version.   Contains new material and revisions to reflect  SARA
amendmants  and EPA policies issued since 1983.
CoMunity Relations fs^'<-m« * For Evaluating FM^SM^ Concerns At
  Sites
    9230.03                  10/17/83 - HSCD                     13 pages

Guides  Regions  and  State  Comunity Relations  staffs  in  conducting and
evaluating on-site discussions with citizens and local authorities prior to
non-«nergency Superfund response actions.
Comranity g»i*Hnnff RfljuJLmERts For Operable
    9230.05                  10/2/83 - HSCD                       4 pages

Discusses  the  impact  on  comunity relations  efforts  of  the concept  of
dividing remedial  activities at a  site  into operable units as defined  in
the amended NGP (50 FR 47911,  11/20/85).   No major changes are required  in
the planning and implementation of Superfund community relations.


Interia Guidance On Technical Assistance Grants (TUG) For Public
    9230.2-02                3/26/86 - HSCD                      10  pages

Supplies  preliminary assistance  for persons involved  in early stages of
managing  TAG grants  for  public  participation.   Win be  updated  as  the
program evolves*
Activities Prior To
Technical Assistance Grants (9G)
    9230.1-02                1/11/88 - HSCD                       8 pages
Supplies additional  interim information for managing  the  TAG proyiaui prior
to rrn"*'>1 jBTlfTi of final rulcnaJcing.
July 31, 1988                     - 19 -          OSWER Directive 9200.7-01

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Citizens fltrirtanry Manual For "Die Technical Assistance (IftG) Grant Prograa
    9230.1-03                6/88 - KSCD        129 pages plus appendices

Provides  a  complete  set  of  instructions  for  citizens  interested  in
Technical Assistance Grants.  Includes a step-by-step guide to applying for
and  managing  the  grant and  all  forms  required  by EPA  with sauples  of
completed forms.  The manual will be current for the TAG Program during its
operation under the Interim  Final Rule for  section 117(3) of CERCLA  and
will be revised upon publication of the Final Rule (expected in 1989. )
.regional Orcirtanr* Namai For The Technical AM-i«»ane» cac)  Grant Program
    9234.1 0*                7/38 - HSCD                         84 pages

Provides  guidance  to  Regional  staff  who  are  managing   the  Technical
Assistance Grant  Piuyraa and other Regional  staff for use as  a reference
about the  proyiaiu.   Explains the  piujiaui,  responsibilities of key staff,
the role that States play in the yrutjiaui, and all administrative procedural
requirements  for  the  application  and  award,   procurement,   and  fiscal
management processes.
Applicability Of KB* ReqoLnmuua To CHSZA Mining Waste Sites
    9234.0-04                8/19/86 - OPM/PAS                   11 pages

Clarifies  use  of Subtitle  0 and/or  C of  RCRA  for developing remedial
alternatives at CERCLA mining waste sites  in light of a July 3,  1986  final
determination on regulation of mining waste.
Interim Guidance on manilam* With pnu Irani* or Relevant And Appropriate
  (ARAR) Requirements
    9234.0-05                7/9/87 - OBJ/PAS                    12 pages

Addresses  the requirement  in CERCLA,  as  amended by  SARA,  that remedial
actions comply with applicable or relevant  and appropriate requirements
(ARARs)  of  Federal  lavs  and more  stringent,  promulgated  state   laws.
Describes how requirements  are generally to be identified and applied and
specifically  dlscusstg  com J lance with  State  requirements  and certain
surface water and groundwater standards.


User's Ckddi TO The Contact Laboratory Program
    9240.0-1                 12/86 - HSED                       250 pages

Organic  and  inorganic analytical  program description  that outlines the
requirements  and analytical procedures  of  new CLP protocols  developed from
technical caucus ..'•omnendations.  Reflects the status of the pioynui as of
         1996.
July 31, 1988                     - 20 -          OStfflR Directive 9200.7-01

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Analytical Support For Superfml
    9240 ..0-02                3/20/86 - HSBD                       7 pages

Memorandum  that reviews  alternative  Superfund  sample analysis  resources
available to the Regions,  provides general guidance  in  the use  of  these
resources, and  requests that each Region manage  and monitor its analytical
support services.  Describes the two principal sources of  Superfund program
analytical support as the Regional laboratories and the Contract Laboratory
Program  (CLP).   Additional contractor sources available include  Remedial
(REM) , Field Investigation (FIT) , and the Environmental Sendees Assistance
Team  (ESAT).    Generally,  CLPs  are  to be  used  for  analysis  requiring
consistent  methodology,  JG-40  day  turnaround,  and  data  of  known  and
documented  quality.    CLP's Special Analytical  Services  can  be  used  to
analyze  unusual  matrices.    Remedial  and  Removal  contract  analytical
resources include  fixed and mobile  laboratory support.   Choice of  analy-
tical  support  should  be driven by  data requirements.    Users should  be
sensitive to costs,  definition  of work, enforcement  needs,  and  quality
assurance requirements.   Describes how  Regions  should develop their  own
integrated management and tracking systems to monitor these resources.


                   Cleanm Services  (DCS) users' Kmual
    9242. 2-0 IB               10/20/87 - ERD                     240 pages

Provides a comprehensive guide to using emergency response cleanup services
contractors at Superfund sites.


Procedures For T«< -Hat-ing »*••»« ai Rinpnnse Services
    9242.3-03                7/6/84 - HSCD                       21 pages

Streamlines work  plan development process.  Develops  a more comprehensive
site  specific  work plan  and reduces dead time during work  plan reviews.
Provides  latitude to Regional  site managers to identify  approved initial
tasks on a site-by-site basis.
KB! H Contract Temrfl Fee PerfoaHnce Evaluation Plan
    9242.3-05                7/25/84 - C€M                       50 pages

Defines  procedures for  the REM  II CUIUJCL  Award Fee Performance  Plan.
Describes fee  structure and evaluation process and includes copies of the
forms needed to manage  this contract.   Procedures are essentially the same
as the revised REM/TIT  procedures,  except that each region must assess the
  itractor's regional management activities.
July 31, 1988                     - 21 -          OSWER Directive 9200.7-01

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 leplevaitaticn Of n* Decentralized Contractor Perforjence Evaluation Ml
   Award Fee Process For ReBedial Progran Contracts
     9242.3-07                3/9/87 - HSCD                       16 pages

 Delegates   site-specific  award  fee  decisions  to   the Regional  Division
 Directors.   Distributes standard operating procedures identifying the roles
 and responsibilities of Regional and Headquarters staff in implementing the
 contractor  award  fee process.   Procedure  will be  field  tested  for  one
 evaluation  cycle, then  node final.
        al Assistance Tea*  (Off) ftjiu«ict Users' Muual
    9242.4-01A              9/1/87 - ERD                       ±tS pages

Explains the nature of Technical Assistant Team (TAT)  contract resources,
responsibilities,  and procedures for  operating under this contract  and a
means to evaluate and compensate contractor performance.


Policy  on Cost Snaring At  Publicly Owned Sites
    9250.2-02                3/30/83 - HSCD                       2 pages

Describes CSRCL& Section  104(c)(e)(ii) Requirement that States  pay 50\ or
more of the response costs  associated with facilities owned  by States or
their political  subdivisions ("publicly-owned")  at  the  time of «H5t*»al of
any hazardous  substance.   (Supplemented by 9250.2-01.)


Policy  On Cost Sharing Of  lanediate Revivals At Publicly Owned Sites
    9250.2-01                3/30/83 - ESD                        5 pages
Specifically  afyir^TM  cost  sharing  for  ianediate  removal  actions  at
publicly  owned sites.   (Supplements 9250.1-01.)   Note:   Changes  in SARA
will  require  revision  of  this  docvment,  wftich  will  be  scheduled  in
conjunction with pronulgation of NCP revisions.
waiver  Of 10*  Co*t Share  For TTnenll n  Planning Activities At  Privately
  Sites
    9250.3-01                5A3/83 - HSCD                        1 page

Reverses  Much 11,  1982 policy  (see 9246.0-01) to  allow the  funding  of
remedial  investigation, feasibility study, and remedial design at privately
owned sites without a State cost share. (See also 9250.3-02)
Guidance On Tejilieiiii Inj Waiver Of 10% Coot Sharing For
    9250.3-02                6/3/83 - HSCD                        4 pages

Establishes procedures for implementing cost sharing policy as reflected in
9250.3-01.
July 31, 1988                     - 22 -          QSUER Directive 9200.7-01

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            Of Remedy s»i<**ti<»< Tb Regions  (Older
    9260.1-09                3/24/86 - OPfl/PAS                   25 pages

Delegates remedy selection decisions to RAs.  Outlines options for division
of decision authority between the AA/QSWER and RAs.


Delegations Of Authority aider Bie Federal Utter Pollution Control Act
  (PW?CA) Arpllrahle TO Bie Super-fund Piuyida
    9260.3-00                4/16/84 - OHVPAS                    3 pages


(1)  Identifies and delegates the  applicable authorities under  FHPCA for
     iraninent and substantial threat to the public health, or welfare of the
     United States  because of an actual or  threatened  discharge  of oil or
     hazardous substance  into or upon  the navigable waters of the United
     States from an onshore  or offshore facility.  (FWPCA  311; E.O. 11735,
     8/3/73; 40 CFR 300.52 (NCP)

(2)  Delegates to AA/OSNER and RAs  authority to issue letters of notifica-
     tion of  placement of chemical  and biological agents on  the National
     Oil and  Hazardous Substances Contingency  Plan  (NCP)  product schedule
     in accordance  with Subpart  H "Use  of Dispersants and Other Chemicals"
     of the NCP.  (F«PCA311(C)(2HG); 40 CFR 300.81, the NCP)

(3)  Delegates to AA/OSWER and RAs authority to perform the EPA functions
     and  responsibilities relative to  the Spill  Prevention Control and
     Countenneasures Plan  (SPCC  Plan) regulations.   (FWPCA  311(j)(l)(C) ;
     40 CFR parts 110, 112, 114.  (4-1-84)


Implementation Of GSCXA Strategy At Federal Facilities
    9272.0-01                4/2/84 - Office of External Affairs   1 page

Memorandum  dated  April  2,   1984  from  the Assistant  Administrator for
External  Affairs to  the  Assistant Administrator,  OSUER,  discussing the
implementation phase of Federal Facility CEROA strategy.
                 on Federal Fari11-Mea At CBKXA Sites
    9272.0-02                12/3/84 - HSCD                       3 pages

Discusses status and direction of OSUER efforts to implement hazardous site
cleanup at Federal Facilities.  Divides primary responsibility for national
management  of super fund  Federal Facility  proyiaas  between the  Office of
Waste  Pii*jidpa  Enforcement  and  the  Office of Emergency and Remedial
Response.
July 31, 1988                      -  23  -         OSWER Directive  9200.7-01

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Responsibilities Par Federal Farniti<»a
    9272.0-03                8/19/85 - OWPE/OERR                   1 page

Memorandum  f ran Director OWFE to Director OERR clarifying responsibilities
of CWPE and GERR on  Federal Facilities.
Federal
    9272.0-04                8/19/85 - OWFE/OERR                  2 pages

Clarifies  responsibilities  and direction of effort within OWPE for Federal
facility activities.
    9272.0-05                8/26/85 - OESR/OWPE                   1 page

Memorandum from Director GERR  to Director OWPE that provides direction for
the C3*R Facilities Program Manual  development responsibilities that OWFE
assumed  and  clarifies  responsibilities  between OERR and CUPE  for Federal
facilities.
        Financial
    9275.1-01                7/31/84 - ERD                       34 pages

Describes the  process necessary to implement the April  16, 1984 Superfund
delegation  (9260.2).   Provides a planning  structure for Regional Adminis-
trator  to  identify  and  assign  Regional  financial  responsibility  for
activities.  (Nemo signed by Administrator) (Update planned for -late FY-88)
    9275.2-01                9/21/84 - HSCD                      28 pages

Describes the process  necessary to implement the April 16, 1984, Superfund
delegations  (9260.2).   Provides a planning structure for Regional Adminis-
trators  to  identify  and  assign  Regional  financial responsibility  for
activities.
July 31, 1988                     - 24 -          OSWR Directive 9200.7-01

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Policy Ot Flood Plains Jtad Wetlands
    9280.0-02                 8/85 - OFM/PAS                      12 pages

Discusses specific situations that require preparation of a flood plains or
wetlands  assessment  and the  factors to  be  considered in preparing such an
assessment.    For removal  actions,  the OSC must  consider the  effect of
response  actions;   and  for  remedial   actions,  a  floodplains/wetiands
assessment must be Incorporated in the planning and analysis of the action.
In  responding  to  releases  of hazardous  substances  in  floodplains  and
wetlands,  Superfund  actions must  meet substantive  requirements of  the
Floodplain  Management  Executive  Order (ED  11988);  the  Protection  of
Wetland  Executive Order  (BO  11990),  and  Appendix  A of  40' CFR  Part 6,
"Statement of Procedures on Floodplain Management and Wetland Pro Lection."
                For Groraduater Remediation At Bie Millcreek, Pennsylvania
  Site
    9283.1-01                3/24/86 - HSO)                       7 pages
Memorandum  presents an  initial overall  atT*""1^ to  decision making with
respect  to  groundwater  cleanup  at Superfund  sites  under  development by
DEER.   The  strategy will be  further refined  in a Groundwater Evaluation
Manual currently under development.


Standard Operating  Safety Guide Manual
    9285. 1-0 IB               11/19/84 - HSO3                    182 pages

Manual  provides guidance  on health  and safety  practices  and procedures.
Intended to complement professional judgement and experience and supplement
existing Regional  Safety Criteria.   Updates previous guidance to reflect
additional  agency  experience  in  responding  to  environmental  incidents
involving hazardous substances.  Not  intended to be a comprehensive safety
manual for incident response.
Field Standard Operating Procedures Manual §4 Site Entry
    9285.2-01                  1/1/85 - HSCD                      38 pages

Provides  site entry  operating procedures for  field  response personnel to
     Lze the risk of  exposure  to hazardous substances on Superfund sites.
                              1/1/85 - HSCD                      38 pages
     	operating procedures  for  decontamination of  response
     nnel and equipment at hazardous  substance release sites.
July 31,  1988                      - 25 -          OSWER Directive 9200.7-01

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 Field Standard Operating Fmnmlirag Manual « - Air
     9285.2-03                 1/1/85 - HSCD                       33 pages

 Describes  air monitoring procedures for use by  field personnel to obtain
 air  monitoring data required to minimize the risk of  exposure to personnel
 at hazardous substance release sites.


 Field Standard Operating Procedures Manual #6 - work zones
 8285.2-04                     4/1/85 -  HSCD                       30 pages

 Describes  procedures to be  usea by field personnel to establish  work zones
 for  control of hazardous mate rials to minimize  the  risk of  exposure to
 workers at hazardous release  sites.


 Field Standard Operating Procedures Manual t9 - Site Safety Plan
     9285.2-05                 4/1/85 -  HSCD                       34 pages

 Establishes  requirements  for  protecting  health  and  safety  of  field
 personnel  during  all activities  conducted at the site  of  an incident.
 Contains   safety  information,  instructions,  and  procedures  to cover  a
 variety of situations commonly encountered in this type of field  work.
            1 Bealth Technical Assist
And Bxforceaent Guidelines For
                              3/15/84 - HSCD                      10 pages
Gives direction for OSHA  field staff who may be asked to provide assistance
or conduct enforcement activities  at hazardous release sites.
                    il Health & Safety
    9285.3-02                7/7/87 - HSCD                        4 pages

Provides  procedures for  managing employee occupational  health and safety
considerations at Superfund  sites.
          Public Btaltii Evaluation
    9285.4-01                 10/1/86 - HSED                        Manual

Establishes  a riii»i»iTi  to be used  at Superfund sites  to analyze public
health  risks and develop design  goals for  medial  alternatives based on
Applicable or Relevant and Appropriate Requirements (ARARs) of other laws,
where  available;  or   risk  analysis  wftere those  requirements  are  not
available.   Procedures art designed to  conform witn  EPA's proposed risk
assessment guidelines.   Supplements  Chapter 5  of the Guidance  on Feasi-
bility  Studies under CERCLA, which describes the public health evaluation
process and provides detailed guidance on conducting the  evaluation.
July 31, 1988                     - 26 -         OSWBR Directive 9200.7-01

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Guidance For Coordinating ASTDR Bealth  riiiim t\mt\i Activities With The
  Superfuod TTimull n Process
    9285.4-02                5/14/87 -  HSED                      32 pages

Provides   guidance  for  coordinating  health  assessment  activities  at
Superfund  sites  between  the  ASTDR  and  EPA  when conducting  Superfund
remedial activities.
Health Ai.'i' nsrni n By AZEDR :ja FY-88
    9285.4-03                 V/7/88 - «s»n                        6 pages

Clarifies  operating  procedures for dealing with  ATSDR.   Presents schedule
for health assessments being conducted by ATSDR in FY-88.
      iim* Risk Assessment Tnf"1 "•J1 JT* TH i i^ *
    9285.6-01                12/17/86 - HSFT1                       Itenual

Provides information on resources for conducting risJc assessment activities
at Superfund sites.
           Of understanding Demean ASXR Jtad EPA
    9295.1-01                4/2/85 - 0PM                        11 pages

Establishes  policies  and  procedures  for  conducting  response and  non-
response health activities related to releases of hazardous substances.
Joint CORPS/EPA
    9295.2-02                6/24/83 - GPM                       41 pages

Provides   joint   guidance  for   conducting  activities  and  coordination
necessary  for a  smooth interface between  EPA and the U.S.  Anny  Corps of
Engineers.     Provides  further   guidance   regarding  responsibility  and
information necessary for coordination of billing and reporting.
                                    f^£ ^^^^J^fc—^—^^^ ^^^J MHA T^
                                    UK AUUJJjWEX JVa^A «BrI% JU1
  P.L. 96-S10  (GBCIA)
    9295.2-03                 12/3/84 - OEM                        3 pages

Defines the assistance the U.S. Amy Corps of Engineers win provide to EPA
in implementing the Superfund program, EPA Fund-lead or State Fund-lead for
EPA Enforcement-lead projects.
July 31, 1988                      - 27 -          OSWER Directive 9200.7-01

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           Of Understanding  (MOO) Between FE» And EPA For
                 Of Cezcla Beiocaticn Activities Hotter PL 96-510
    9295.5-01                4/5/85 - 0PM                        21 pages

Describes major responsibilities and outlines areas of nutual  support  and
cooperation with respect to  relocation activities associated with response
actions pursuant to CEROA, Executive Order 12316, and the NCP,  40 CFR Part
300.  Effective until April 1989.
apleaentation Of EPVFEMA Pijau nilia Of Understanding (MOD)  Op OSCXA
  Relocations
    9295.5-02                6/14/85 - 0PM                       27  pages

Forwards  EPA/FEMA  MOO  on   CJ3&1A  Relocation   (9295.5-01)   to Regional
Administrators.  Provides guidance in establishing Regional/Headquarters/-
FEMA relocation contacts and following standards  established in the  MX.
Coordination Between Regional Superfund Staffs And Office Of Federal
  Activities (OfA) Regional Counterparts On CERCLA Actions
    9318.0-04                10/29/84 - HSCD                      4 pages

Encourages  coordination  between tne  Regional  Superfund  staffs  and  OFA
Regional counterparts  in carrying out CERCLA. actions.   (Signed W.  Hederan
and A. Hirsch).
Guidance For
    9320.1-02                6/28/82 - HSED                      14 pages

Establishes  procedures for  inpieawnting the  NPL, vftich  was -mandated  by
section 105  (8)(B) of  CERCTA.   Addresses the overall  strategy for develop-
ing and presenting the list, including  selection of  candidate  sites,  data
collection, application of the  Hazard Ranking  System  (HRS),  procedures for
submitting  candidate  sites, and the  verification  of  quality  assurance
(control procedures).   (Signed by Heoeaan, supplemented by NPL 9320.3-01
and 3-03)


BOtA/NPL Lifting Policy
    9320.1-05                9/10/86 - HSED                      11 pages

Describes RGRAVNFI. listing  policy as promulgated in the  federal Register
(51 FR 21054, June 10, 1986)
July 3?  1988                     - 28 -          OSWER Directive 9200.7-01

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RCRA 3par>^ai Study Haste Definitions:  s<»«»y porfTiiH^
  Consideration Prior TO NPL Proposal Onder SABA.
    9320.1-06                3/10/87 - HSED                      22 pages

Policy memorandum signed by Director OERR, which discusses Section 105(g)
and  125  of  SARA and  its relationship  to RCRA,  as amended by  HSWA with
respect to  the special study  wastes such as  drilling fluids,  cement Kiln
dust wastes, mining wastes, ash wastes, etc.
        Guidance For Consideration Of Sections 105 (g) ted 125 Of SARA Prior
  To NPL Proposal Of ^^ai study Haste Sites
    9320.1-07                8/21/87 - HSED                       17 page

Memorandum describes OERR policy for identifying municipal waste landfills
that have  received hazardous  wastes.   Criteria  described  for considering
their possible inclusion on the NFL.  Signed by Director OERR.
Listing Of Municipal T -*"*** n « On NFL
    9320.1-08                10/24/86 - HSED                      2 pages

Memorandum discusses procedures for determining which solid waste landfills
qualify  for  listing on  the NPL.    Describes the  type  of documentation
required from the Regions to establish this eligibility.
Listing Of Mmicipftl T-anftrtna on
    9320.1-09                8/21/87 - HSED                       2 pages

Memorandum  continues the  discussion of  procedures for  listing municipal
landfills which qualify as Superfund sites on the NPL.
    9320.3-01                5/12/83 - HSSD                       7 pages

Provides guidance  for the first and future updates of the NPL  (Supplements
9320.1-2 and 9320.1-3.  Supplemented by 9320.3-2 and 9320.3-3)
Instructions For Piram gating NPL Update
    9320.3-02                 1/18/84 - HSED                       7 pages

Defines  piuceduies and Regional  responsibilities for the final rulenaJcing
of the NPL update.
July 31, 1988                      - 29 -          OSWER Directive 9200.7-01

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 Procedures For Updating B* NPL
     9320.3-03                 5/23/84  - HSED                      3

 Sets for the  process for  developing updates  to the NFL  and presents the
 schedule  for  proposing the second  update.     (Supplements  NPL 9320.1-2,
 9320.1-3,  and  9320.3-1)


 Guidance For Proposed NPL Update *3
     9320.3-04                 12/10/84 - HSED                      3 pages

 Memorandum establishes  schedule and scope of  Update *3 to allow Regions to
 submit  siter  not  completed  in time for previous  update and  limited to
 classic industrial sites rtiich  clearly fit existing policy guidelines.
NPL Inf Ormation nprtyt-g #4
    9320.3-05                4/30/85 - HSED                       6 pages

Provides background information on NPL Response Categories/ Status Codes.


Updating Ifte BPLt  Update #6 Proposal
    9320.3-06                9/17/85 - HSED                       4 pages

Memorandum  provides  specific  information  on the  scope,  scheduling,  and
procedures  for preparing sites  for  proposal on  Update #6  of the  NPL.
Describes the future  implications for a proposed delisting policy on adding
sites to the NPL.
Interim Information Relaaw Policy
    9320.4-01                4/18/85 - HSED                       6 pages

Provides  interim  policy  for  release  of information  regarding  the  NPL.
Should be  used by Regions to prepare  coordinated responses to information
requests  from the  public, from  citizens, and  those submitted  under the
Freedom of Information Act (FOIA).
              Hoc  Stlactiag An Off-Site  Option m A  Superfuud Response
Action
    9330.1-01                1/28/83 - HSCD                       4 pages
          tn« interface between HO8A and CERCLA for the off-site treatment,
storage or dJspcmal of  hazardous substances.  Establishes general Agency
policy for removal and remedial actions.  Establishes specific criteria for
remedial  actions in  determinjng «nen  hazardous  substances may  be trans-
ported  off-site  for  treatawit,  storage  or disposal  vfttn  selecting  an
appropriate off-site hazardous waste management facility.
July 31, 1988                     - 30 -          OSHER Directive  9200.7-01

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Evaluation Of PiuyidB And Enfbzcaait-Lead Records Of Derision (BODS) For
  Consistency Kith BOA Land T>»«pr*^gi Restrictions
    9330.1-02                12/3/86 - HSCD                      15 pages

Regional survey  to  determine  impact of RCRA land disposal restrictions on
RODS.
Discharge Of Wa«rfi7Mit:«T Trtm CERCLA Sites Into POHB
    9330.2-04                4/15/86 - HSCD                      6 pages
Joint memo from QERR and 
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Preparation Of Decision Dooaents  For Approving Foxi-Financed fta. PHP
  Remedial  Actions Twjor CEBCLA
    9340.2-01                2/27/85 - HSCD                      22 pages

Assists  Regional  Offices  in  the  preparation of  the  decision documents
required  for approval of Fund-financed and  Potentially Responsible Party
(PRP)  remedial actions.   A Record of  Decision  (ROD) is  required  for all
remedial  actions financed  from the Trust Fund.   Dooinents the  agency's
decision-making  process  and demonstrates  that the  requirements of CERCLA
and the  NCP have been met.   The RCD and  the  procedures desrribed  in this
document  hfrnmp the  basis for  future  cost recovery actiors that may be
undertaken.
Preliminary nnrrrnimrnL  (PA) ftrtttanro FY-1988
    9345.0-01                2/12/88 - HSED                      88 pages

Provides  Regions,  States,  Field  Investigation Teams   (FITS)  and  other
Federal agencies  with direction for conducting new preliminary assessments
(PAs) and  reassessing existing PAs during FY-88.   Intended to standardize
PA  scope,  products,  and  decisions and  improve overall PA quality.  .In
effect until  the  Hazard Ranting System  (HRS)  is revised.  Consistent with
the anticipated direction of the  revised National  Contingency Plan (NCP).
Provides Regions with directions for handling PA Petitions from the public.
Discusses   preliminary  procedures  for  the   Environmental  Priorities
Initiative (EPI).
         Site Inspection (ESI) Transitional «»**»»•• For FY-88
    9.345.1-02                10/1/87 - HSED                      88 pages

Provides  Regions,  States  and Field  Investigation  Teams  (FTTs)  with  a
reference of general methodologies and activities for conducting inspection
work  on  sites  projected  to  make  the  National Priorities  List  (NFL).
Describes  the goals,  scope, procedures,  and desired results of expanded
site  inspections (ESXs)  in FY-88.  Will be  used  until new  screening  SI
(SSI) and listing SI (LSI) guidance is prepared and distributed in FY-89.
             strategy For
    9345.2-01                2/12/88 - HSED                      16 pages

Describes the  strategy EPA win  follow to address the pre-remedial goals
and requirements  of SARA.   Through SARA,  Congress  established the mandate
to  accelerate  the  pace  of  identifying those sites needing  Superfund
remedial action to  protect public health and the environment.  Responds to
this  mandate  and  addresses  SARA pre-remedial  production goals,  program
operations  under  the  current  HRS,   and piuyrau  operations  u-iring  and
following revisions to the HRS.   Discusses procedures for integrating the
Environmental Priorities Initiative (EPI)  into the pre-remedial
July 31, 1988                     - 32 -          OSWR Directive 9200.7-01

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InteiiB ROB/COCA ffnirt3'1™* On Non-Contiguous Sites And Qn-Site
  of waste Residue
    9347.0-01                3/3/86 - HSCD                        9 pages

Provides basic information pending final guidanre.


uncontrolled Hazardous Haste Site Ranking Systems - A Users Manual
    9355.0-03                7/16/82 - hSED                      66 pages

Describes  method  developed by MITRE  Corporation  for ranking  hazardous
substance  facilities  for  determining  eligibility  for inclusion on  the
National Priority List (NFL).  A site  most score at 28.5  to  be eligible.
     directive reprints the Federal Register discussion of 7/16/84.
Superfund Remedial Design And men ill n Action (RD/RA) Gnirtanre
    9355.0-04A               6/1/86 - HSCD                      112 pages

Manual to assist  agencies  and individuals who plan, administer, and manage
          Design  and Rerortial  Action  (RD/RA)  at  Superfund  sites.    The
material  is applicable to both Fund-financed  and responsible party RD/RAs
and  provides procedural  guidance to  ensure that  the RD/RA  is  performed
properly.   Organized to reflect  the sequence of events occurring prior to,
during,  and after the RD/RA action at  a Superfund site.   Notes sections
that  apply  only to  Fund-financed projects.   Does  not directly  address
RD/RA's  conducted by  other  Federal agencies,  which  are the  subject  of a
projected Federal Facilities Piuyidiu Manual.


Guidance On Feasibility studies (FS) nrafcrr QERCLA
    9355.0-05C               6A/85 - HSCD                      188 pages

Provides  a more detailed  structure  for  identifying,  evaluating,  and
selecting  remedial action alternatives  under Q&ttJLA  and the NCP  (40 CFR
300).   Describes the  process from  inception:   development of specific
alternatives based on general response actions identified  in the remedial
investigation  (RI),  including screening technologies  within the categories
for  applicability  to  the site.    Analyzes  alternatives   that  pass  the
screening process,  which ennmasiet engineering,  public health, environ-
mental, and cost analyses.  Organizes information  to  compare the findings
for each alternative.  Document  will be replaced  by  9335.3-01:   Guidance
for Conducting p^^^ai Investigations  (RZs)  and Feasibility studies (FS)
      r*™^rA. now in draft.
July 31, 1988                      - 33  -         OSHER Directive  9200.7-01

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         Qa Th«anij
-------
A caependiuB Of Superfund Field Operations
     9355.0-14                12/1/87 - HSCD                        %fcnual

This four volume collection contains a consolidated, ready reference to all
remedial  field procedures.  The manual provides the Agency with consistent
field procedures  among the ten regions.   It  should be used  by Remedial
Project Managers, Quality Assurance Officers and State and Regional field
staffs.
Interia t*iidance Oa aapayf trti s^iEcMr»» of
     9355.0-19                 12/24/86 - HSCD                     12 pages

Provides   interim   guidance,  regarding  implementation  of  SARA  cleanup
standards  provisions.   Highlights new  requirements with emphasis  on the
RI/FS process.
RI/PS
    9355.0-20                7/22/87 - HSO)                      14 pages

Identifies  methods of  reducing overall project schedules  and costs while
retaining  a  quality  product,   me four  major  points  in the  directive
include:    phased RI/FS,  streamlined  project  planning,  management  of
handoffs, and RI/FS control reviews.


Additional Interia Guirtanra For FY-87 Records Of
    9355.0-21                7/24/87 - HSCD                      10 pages

Continues with guidance regarding implementation of SARA cleanup standards.
Describes the nine  criteria to be used in evaluating remedial alternatives
and selecting a remedy.
                 ctn Funding For Giuuul HartfT And Surface Matrrr Restoration
  Actions
    9355.0-23                10/26/87 - HSCD                      4 pages

Discusses  interim policy for the funding  of water  restoration actions.
Specifies ttxich types of activities would be  eligible for inclusion under
the 10-year provision in  section I04
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        Lead ReaedLal Project
     9355.1-01                12/1/86 - HSCD                     135 pages

Assists  EPA Remedial  Project  Managers  (RPMs)  to  manage  Federal-lead
remedial  response projects.   Describes  in detail the  responsibilities  of
the  RFM during the planning, design, construction, operation, and close-out
of  remedial response  projects.    Provides  RPMs with  information on  pro-
cedures  for conducting  Federal-lead  remedial  projects  from  pre-RI/FS
activities through site close-out.
BFM
    9355.1-02                9/30/87 - E^CD                      56  pages
Orientation  for the  new Remedial  Project Manager  (RPM) to  the  duties,
responsibilities, and decisions required to serve as  the agency's represen-
tative  in charge of  a Superfund site.   Explains the types of  decisions
required of  the RPM;  the resources available, both written  and within the
management chain; and  the accountability aspects of each decision,  walks
the RPM through a project site nanagenent scenario.
state Lead n««Mai Project Manual
    9355.2-01                12/1/86 - HSCD                     103 pages

Assists  the ERA  HfinnMal  Project Managers  (RPMs)  in managing  State-lead
remedial  response projects.  Describes  in detail the responsibilities of
the RPM  during  the planning,  design,  construction, operation and close-out
of remedial response projects.


Guidance For Providing Alternative Hatter Supplies
    9355.3-02                3/1/88 - HSCD                      135 pages

Manual  provides  direction  for  those circumstances  under  which  it is
appropriate to provide alternative water supplies.
KI/TS IBproveMnts PoUuv up
    9355.3-05                4/25/88 - HSCD                      18  pages

Delineates   improvements  developed   for   more   effective  Remedial
investigstions/PeasiMlitv Studies (Rl/FS).
July 31, 1988                     - 36 -          OS&ER Directive 9200.7-01

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        Cost PfenagcMnt Manual
    9360.0-02B               4/88 - EOT                         222 pages

Provides  comprehensive  cost  management  procedures  for  use  by  EPA  at
removals  authorized by  CIHQA.    For use  by the QSC and other  on-scene
personnel when  perfonning cost management  activities  at Superfund removal
sites.   Includes:   a discussion  of  the concept  and  an approach  to cost
management;  techniques for  cost  projection  and tracking; techniques  for
cost  control,  monitoring and, verification of  contractor charges;  cost
recovery and cost docuncntation.   Appendix includes  formats and samples of
a  variety of memoranda,  as well as  procedures  for  initiating  removals,
procedures for  securing assistance from other Federal agencies at Supsrfund
sites;  examples  of  cost projections; a  table of  Federal and  Technical
Assistance Team  (TAT) personnel  cost rates; a copy of the Memorandum of
Understanding  (MDU)  between EPA  and  the  Coast Guard1;  a  copy of  the  MDCJ
between ATSDR;  and a copy of the draft MJU between EPA and
    9360.0-03B               2/88 - ETO                         365 pages

Manual provides  EPA response officials with  unifoxn,  Agency-wide guidance
on  removal actions.   Describes in  one manual all  of the  procedural  and
administrative requirements for removal actions.  Addresses a wide array of
topics  and  includes NCP definitions  relevant  to the  piujum,  removal
policies as determined by QERR, and step-by-step directions for preparation
and  approval of documentation.   Appendices include  examples of  action
memoranda,   ceiling  increases,  and  other  documentation   for  various
situations.
Relationship of The Removal And Remedial Program under The Revised NCP
    9360.06A                 3/10/86 - GBR                       6 pages

Memorandum  addresses  revisions to the  NCP  that  redefine the  response
categories of removal and remedial actions so that removals now include all
activities  formerly considered  immediate removals, planned  removals,  and
initial  remedial measures.    These definitional  changes  are expected  to
expedite any cleanup activities by avoiding previous remedial requirements
for RZ/FS  studies and  fall  cost effectiveness studies.   Provide  a higher
degree  of  ytuyiJBi integration  and  flexibility.    All removals  are  not
necessarily urgent and  all urmHin1 actions are not necessarily deferrable.
This new flexibility will allow atVUtlc"*? managerial control of scheduling
and completion of all projects.
Jtoly 31, 1988                     - 37 -          OfiHER Directive 9200.7-01

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        Actions At Methane Release sites
    9360.0-08                1/23/86 - ERD                        2 pages

Clarifies EPA's policy on the appropriateness of CERCLA removal actions at
methane  gas release  sites.    As  a matter  of policy, CERCXA  responses to
methane gas releases should be carefully evaluated on a case-by-case basis,
using  this  document   as  well  as best  professional  judgement,  and  with
careful  documentation.   Because  methane gas  is not listed or designated
under any of the  statutory provisions  in Section 101(14)  CHtLA,  it is not
a  "hazardous waste."   However, responses under Section 104 are not limited
to hazardous  substances.   Since  methane gas emanating from a landfill is
not considered to be natural  gas, such  releases nay therefore be eligible
for response under Section  104««*•• TO Tft* Efficient
    9360.0-13                4/6/97 - EED                         8 pages

Provides guidance  to the Regions  on implementation of the  SARA provision
that requires nmoval actions to contribute to the efficient performance of
long-tern remedial actions.
July 31, 1988                     - 38 -          OSBR Directive 9200.7-01

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Use Of Funufril Reeoval Authority To Address WL ted Proposed NFL Sites
    9360.0-14                2/7/87 - ERD                         4 pages

Directs  Regions to  evaluate NFL/proposed NFL sites to  determine if  the
expanded removal authority in SARA can be used to cleanup, or substantially
clean up these sites.
Bole Of Expedite. I Rmnorae Action (BBS) coder Sara
    9360.0-15                4/2V87 -ERD                       18 pages

memorandum  from Director OERR  to Region 7  updates Directive 9360-10  and
defines Expedited  Response Actions (ERAs) as removal actions  performed by
remedial contractors.  Provides direction on the anju.uyi.iate use of ERAS.
        n i»ji ,m Priorities
    9360.0-18                3/31/88 - ERD                        4 pages

Sets priorities for managing removal activities at Regional level.
Interim Final (arlrtanre On Removal Action Lewis At Contaminated Drinking
  fitter Sites
    9360.1-01                 10/6/87 - ERD                      14 pages

Provides  interim final guidance on removal action levels at  contaminated
drinking water sites.
Model PrograB For Removal Site File
    9360.2-01                7/18/88 -ERD                       18 pages

Instructs On Scene  Coordinators  (OSCs)  and administrative support  staff in
the requirements for file management at on-site remeoval sites.   Contains a
kit and a list of contents for successful establishment of permanent files.


      Of Cooperative T>yieimuiii To political Subdivisions
    9375.1-06                2/12/87 - HSCD                      22 pages
Establishes procedures  for providing funding to  political subdivisions to
perform remedial activities through cooperative agreements.
Inter*" ftrirtann* Qn «*-^t? Participation In Pre-MHdial And

    9375.1-09                7/n/87 - HSCD                      22 pages

Provides  interim  guidance  on  State participation  in pre-remedial  and
remedial response, including the use of cooperative agreements.
July 31, 1988                     - 39 -          OSHER Directive 9200.7-01

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    9380.0-05                11/1/85 - HSCD                        Manual

Provides overview of the fundamental concepts, procedures, and technologies
used in  leachate plume management.   Plume generation dynamics and delinea-
tion are discussed.  Plume control technologies are evaluated and selection
criteria  for site  applications  are defined.   Grounduater  pumping,  sub-
surface  drains,  low permeability barriers,  and  innovative technologi :s as
acquifer restoration technologies are Discussed in detail.  Basic reference
handbook  for governmental  and industrial technical  personnel writing  on
controlling leachate plumes from unconrrolled hazardous waste sites.
Guidance Oocnvent For Cleanup Of Surface
    9380.0-06                7/17/86 - HSCD                        Manual

Provides guidance to Federal,  State,  and local officials and private firms
that  plan  and implement  remedial actions at  NFL sites vftich have  one or
more  surface impounttaents  containing hazardous  wastes.   Used  with other
documents  in conducting  remedial  investigations and  feasibility studies
(RI/FS).  Provides a systematic approach to remedial action and instruction
for scoping  and performance of limited  remedial  investigations  or limited
feasibility  studies  to be  implemented  in a relatively  short time period.
Utilizes the concept of operable units as definable problem areas which can
be addressed independently of other site issues and problems.
    9380.1-02                10/9/86 - OSWER                     52 pages

Prepared by the Technology Transfer  Task Force.  Lists  and abstracts the
most important technical materials  that  should be readily available to all
Federal and State hazardous waste  staffs and their contractors.   Assigns
each document a  level of  importance as  primary reference  documents for
Federal and State headquarters, region, and field staffs.
Superfuod Innovative Technology EraJjoxtion (SPB) Prognei Strategy And

    9380.2-03                12/1/86 - HSCD                      58 pages

Describes the SUB pa.uyj.ja strategy, ptuyxjui plan, and provides information
OR DSUTtwidOKdOD ifi tofc DCOCDT3DI*
July 31, 1988                     -  41 -          OSWR Directive  9200.7-01

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State ProcoreaBnt under Superrund Remedial Cooperative         	
     9375.1-11                7/88 - HSCD                "          Manual

Manual  supercedes   9375.1-05  and  provides  the  latest  information  and
direction  for managing  all aspects  of State procurement  under Superfund
Renedial Cooperative Agreements.
State Access To ER& Contractors Daring ""•"nrtial Process
    9375.1-12                4/27/88 - HSCD                       2 pages

Memorandum  reaffirming  Trocedures  for  State retention  of EPA contractors
during  r-MmaiMai response process.
State Core Piutjidei Funding Cooperative
    9375.2-01                12/18/87 - HSCD                     27 pages

Provides  guidance for  funding cooperative agreements  between Regions and
States on nan-site-specific CERCL& activities.


Slurry TieuJi Cdnatructinn For Polluton Migration Controls
    9380.0-02                2/1/84 - HSCD                         Manual

Provides  in-depth guidance on the  use of slurry walls for the control of
sub-surface pollutants,  and rtescrUbes these barriers for site remediation.
Presents  the theory of  function, design, and use.


Guidance  For n«myp Of Surface Tank And Dm Sites*
    9380.0-03                5/28/85 - HSCD                        Manual

Intended  for  Federal,  State and,  local  officials  and  private  parties
engaged in carrying out remedial actions at NPL sites.  Provides guidance
for implementing concurrent remedial planning  activities and accelerating
project implementation  for  cleanup of surface  tanks  and drums containing
hazardous wastes.   Should be  used with other  EPA documents on conducting
remedial  investigations and  feasibility studies.   Provides  a systematic
approach  to  remedial action for wastes in tanks and  drums.   One of three
guidance  documents on specific remedial  actions.   Bibliography identifies
other dooaeants that should be used concurrently.
         Action At Haste Mnrpgal Sit
    9380.0-04                 10/1/85 - HSCD                        Manual

Basic reference book describing remedial, technology and providing guidance
in selecting technologies that  are potentially applicable for a given waste
site.   Assists Remedial Project Managers (RPMs) in understanding remedial
technologies.
July 31, 1988                      - 40 -          QSWHl Directive 9200.7-01

-------
                                        HI
                   OOCCNBRS IS TISKL BOOTf
 (Note:  Descriptions of content and expected issuance date have been
 supplied when available.)
Quality Assurancnce Plan For Superfund
    9200.1-05           Jcint Document - GERR/OWFE
Distribution For mm «G Grant Program
    9200.3-04           HSED
NFL Docket
    9200.6-02           HSU)
CEBCLA Compliance with Otter iy*"> nanal
    9234.1-01           (Two volumes)
    9234.1-02           Completion Date, Fall 1988 - OFM/PAS

Provides guidance to RFMs  and. OSCs  in iopieaenting the CEtOA recjuironent
that on-site  nnedits  coqply with Applicable or Relevant  and Appropriate
Requirements (MftRs) under Federal «nvironn«ntai laws and promulgated State
environmental or facility siting laws that are more stringent than Federal
requirements.  Volvne  I  contains an overview  and  requirements for cotpii-
ance with RCRA ARARs.  Volume II contains requirements for compliance with
Safe Drinking Water Act, Clean water Act ARABS, and ground water policies.
OBCXA OTBpl.lgr* With Otter
    9234.03             (Volxme HI) QPM/PAS

Requirements for the dean Air Act, the Itecic substances Control Act,  and
other environnental laws including resource protection statutes such as  the
Endangered Species- Act.


Super fund Analytical Dtta Review And Oversight
    9240.0-03           HSED
                  /or aapeetaul amuoity aelarlnng coiuacLox Support
    9242.5-01           HSCD
July 31, 1988                     - 42 -         OSWES Directive 9200.7-01

-------
Guidance On ft"""*^ Actions For Contaminated Grand water At  Superfund
  Sites
     9283.1-02           Estimated  Issuance Date, Fall  1988 - HSED

emphasizes  decision-making  issues related  to contaminated  ground water.
For  use by contractors  conducting RI  and  FS  activities at  sites where
ground water  is contaminated;  RPMs responsible for ensuring the quality of
information contained  in the  RI/FS and  decision makers responsible for
selection  and  subsequent  performance  evaluation of ground  water remedial
actions  at Superfund  sites.    Outlines  key considerations in selecting a
yiuutid  water  remedy  and  a consistent  approach  to  making. contaminated
ground  water cleanup  decisions.    Presents  case  studies of  ground water
cleanup  decision  making  processes.    Provides  detailed discussions of
remedial  technologies  and of  the  technical aspects of RI/FS,   such as
monitoring  techniques or nri.dfli.ng  procedures.  Currently  in review draft.
    9285.5-01           Fail  88 - HSED

Outlines  a framework  for a consistent, comprehensive  assessment of human
exposure  associated  with uncontrolled  hazardous  waste sites.   Presents
integrated methodology to guide the three major component analyses required
to assess  human population exposure to contaminants:  (1) analysis of toxic
conataodnants  released from  a site;  (2)  determination of their environ-
mental  fate,  and  (3)  evaluation  of the  nature  and  magnitude  of human
population exposure to toxic  contaminants.


Guidance For Conducting RI/FS ttader
    9335.3-01           HSCD
Guidance On Preparing Super fail pB**iffi«y PLI'IIP""'^ !be Proposed Plan And
  Record GF Tlarisinn
    9335.3-02           HSCD

Assist personnel in EPA, States,  and other Federal agencies in preparing,
reviewing,  and  defending the  Proposed Plan and  the  Record  of Decision
(ROD) , two key (Vrnnenit  in  the remedy selection process.
         For Low And Medina Coct Site Discovery Activities
    9345.0-02           HSCD
Guidance For Special Stndy Activities
    9345.0-03            HSCD
July 31, 1988                      - 43 -          OSHER Directive 9200.7-0J

-------
                         To Sm^jrt B?S Scoring
    9345.1-01           HSED
lapiaoHitation Guidance For Solvent Dioxin And California List Hastes
  Subject To HCBA/BaA Land fti^pnsal Bestrictions
    9347.1-01           HSCD
Tendnating Contzacts For superfund Lead !»«••*< ai Action Projects
    9355.1-02            HSCD
GuixJjncc in Pvj^aration Of A aaperfuul riiini iiiiiai Of
    9375.0-01           Fall 88 - HSCD

Assists Regions and  States  In developing  of State  Memoranda of Agreements
(SMDAs).  Presents sample individual approaches consisting of articles and
attachments corresponding to the major parts of EPA/State interactions,  as
will be proposed in the NCP revision.  EPA Regions and States nay choose to
develop SM3As based on this sanple framework.   Currently under review 'and
will be reissued in draft.
involvement Of Indian l±ibai Covenants m Tn» Superrtnd Pie Beaedlal And
  ncanlial Piujiai
    9375.1-10           HSO)

Describes proposed NCP provisions for participation by Indian Tribes in the
Superfund  Program.    Describes  Agency's  involvement  with Indian  Tribal
governments,  determination of  project  lead,  capabilities required  from
Tribal governments  in order to  receive Fund monies, and  the  process  for
application  and  award of Cooperative  Agreements   for  pre-remedial  and
remedial activities.
Alternative xreaoent/DLspocal Tednoiogy ^^^nn* Ox H*™MHI And
  EBeHDVa^ nCt^QDft
    9802.01             ERD
Site (\rnni \nm Plm
    9380.2-02           HSCD
         cxitoria For Becycling MctM FTOJI CBKCA Si'
    9380.2-04           HSCD
         OB Mfferantiating Alternative Technologies
    9380.2-05           HSCD
JUly 31, 1988                     - 44 -          OSW» Directive 9200.7-01

-------
              NLM9U.CAL QOSC ID SDPERTOD PROGRAM
                                                    "'•"» "TVf
 9012.10       Redelegation Of Authority Under CEROA/SARA              16
              And Superfund Internal Delegation Of Authority
 9200.1-05     Quality Assurance Plan For Superfund (Draft)             42
 9200.3-01A    Superfund Cotrarehensive Acccnpiishments Plan             16
              Manual (SCAP) FY-88
 9200.3-02     Implementatio«. Strategv For Reauthorized                 16
              Superfund:  Snort-Term Priorities For *£tion
 9200.3-04     Resource Distribution For TfC Program (Draft)            42
 9200.3-05     Flexibility In Bie FY-88 Superfund Regional              16
              Qctranurai Operating Plan
 9200.4-01     GnlrtelJTm For Producing Superfund Documents             17
 9200.6-02     NPL DocJcet Guidance (Draft)                              42
 9200.7-01     Catalog Of Superfund Program Directives                  17
 9221.0-02     ('KHTI.TS Data Handling Support Policy Statement           17
 9225.0-02     Forwarding Claims To Headquarters                        17
 9225.0-03     Notification Of Restrictions On Reintjursanent            18
              Of Private Party Costs
 9230.0-02     Superfund Coninanity Relations Policy                     18
 9230.0-03     Community Relations Handbook                             18
 9230.0-03a    Community Relations Activities At Suptrfund              18
              Enforcement Sites - Interim Guidance
 9230.0-03B    Community Relations In Superfund - A Handbook            19
              Inter!* <^*^«ypce
 9230.0-04     Connunity Relations Guidance For Evaluating              19
              Citizen Concerns At Superfund Sites
 9230.0-05     Connunity Relations Requirements For operable            19
              Units
 9230.1-01     In+"rin Guidance On HAG Grants For Public                19
              Pa..icipation
 9230.1-02     TfC Program Activities Prior To Issuance Of              19
              Interim Final Rule
July 31, 1988                      - 1 -          OSftER  Directive 9200.7-01

-------
9230.1-03
9230.1-04
9234.1-01
9234.1-02
9234.1-03
9234.0-04
9234.0-05
9240.0-01
9240.0-02
9240.0-03
9242.2-01B
9242.3-03
9242.3-05
9242.3-07
9242.4-01A
9242.5*01
9250.1-01
9250.2-01
9250.3-01
Citizens Guidance For The Technical Assistance
Grants Program
Regional Guidance Manual For The Technical
Assistance Grant Program
QHCLA Conpliance WLt±> Other t^w* Manual
Volune 1 (Draft)
CERCLA Cc-pliance With Other Laws Manual
Volume 2 (Draft)
CERQA Corpliancp WitT> Other Laws Manual
vouine 3 (Draft)
Applicability Of RCRA Requirements To CSBCLA
Mining waste Sites
Interim Guidance On Compliance With Applicable
Or Relevant And Appropriate Requirements (ARAR)
User.'s Guide To Tne Contract Laboratory Program
Analytical Support For Superfund
Superfund Analytical Data Revision And
Oversight (Draft)
Qnergency Response Cleanup Services (BtCS)
Users' Manual
Procedures For Initiating Remedial Response
Services
Evaluation Plan
Implementation Of The Decentralized Contractor

for ^ifr-h^i BaBMis
-------
9250.3-02
9260.1-09
9260.3-00
9272.0-01
9272.0-02
9272.0-03
9272.0-04
9272.0-05
9275.1-01
9275.2-01
9280.0-02
9283.1-01
9283.1-02
9285. 1-0 IB
9285.2-01
9285.2-02
9285.2-03
9285.2-04
9285.2-05
9285.3-01
a*«0e *_n«»
Guidance On Implementing Waiver Of 10% Cost
Sharing For Rmprtial Planning
Delegations Of Remedy Selection To Regions
(Under Delegation #14-5)
FWPCA Delegations of Authority - Ccnplete Set
Implementation Of CEBCLA Stratery At Federal
Facilities
Initial Guidance On Federal Fao Uties CESCTA
Sites
Responsibilities For Federal Facilities
Federal Facilities
Responsibilities For Federal Facilities
Removal Financial Management Instructions
Policy On Flood Plains And Wetlands Assessments
Tfte MillcreeX, Pennsylvania Site
&iidanc* fti RamwM^I Affinps Fr>r Cnrrt-jm\naf^
Grounduater At Superfund Sites (Draft)
Standard Operating Safety Guide Manual
Field Standard Operating Procedures Manual #4
Site tetry
Field standard operating procedures fwuiai mi

Fieia stanoara operating procedures gBwai wo
a-fT ^rm^^ ]1fpr^

Field standard operating rroceoures rnmnHi wo
Work Zones
site Safety Plan
Occupational And Health Technical Assistance
«• • « 	 ftfftm i»^»fc 4 fm+<* \ UA9l«>K 9*«4 Cafa^V
22
23
23
23
23
24
24
24
24
24
25
25
43
25
25
25
26
26
26
26
If.
July 31, 1988                     - 3 -           OSHBR Directive 9200.7-01

-------
9285.4-01
9285.4-02
9285.4-03
9/85.5-01
9285.6-01
9295.1-01
9295.2-02
9295.2-03
929*. 5-01
9295.5-02
9318.0-04
9320.1-02
9320.1-05
9320.1-06
9320.1^07
9320.1-08
9320.1-09
93 20. --01
9320.3-02
^«£a»W*«v \fm»
9320.3-03
A «»•««« 4_AJ
Superfund Public Health Evaluation Manual
Guidance for Coordinating ASTDR Health
Assessment Activities With The Superfund
Health Assessments By ASTDR In FY-88
Superfund Exposure Assessment Manual (Draft)

Mtiuuidiidun Of understanding Between ASTDR And
EPA
Joint CORPS/EPA Guidance
Interagency Agreement Between Corps Of
Engineers And EPA In Executing P.L. 96-510
(CERCLA)
MDU Between FEMA And EPA For The Implementation
Of CERCLA Relocation Activities Under PL 96-510
Implementation Of EFA/FEMA MDU On CERCLA
Relocations
Coordination Between Regional Superfund Staffs
And OFA Counterparts on CERCLA Actions
RCRA/NPL Listing Policy
RCRA Special Study Waste Definitions: Sites
Requiring Additional Consideration Prior To
NPL Proposal Under SARA
Interim Guidance for Consideration of Sections
105 (G) and 125 of SARA prior to NPL Proposal
TA**inq of Municipal Landfill? On The NPL
Lilting o' Miinl'*lri9il T-w" ^ 1 1 * f*» '*• "PC-
GihUance For Updating The NPL
Instructions For PH^^O*^^ ***** npaat*
Procedures For Updating The NPL
26
27
27
43
27
27
27
27
28
28
28
28
28
29
29
29
29
29
29
30
30
July 31, 1988                     - 4 -           OSWDl Directive  9200.7-01

-------
 9320.3-05     NFL Information update #4                                30
 9320.3-06     Updating Die NFL:  Update #6  Proposal                     30
 9320.4-01     Interim Information Release  Policy                       30
 9330.1-01     Requirements For Selecting An Off-Site Option            30
              In  A Superfund Response Action
 9330.1-02     Evaluation Of Progra.ii And Enforcement-Lead               31
              RODS For Consistency  With RCRA Land Disposal
              Restrictions
9330.2-04
9330.2-05
9330.2-06
9335.3-01
9335.3-02
9340.1-01
9340.2-01
9345.0-01
9345.0-02
9345.0-03
9345.1-01
9345.1-02
9345.2-01
9347.0-01
Discharge Of Wastewater From (TKl'IA Sites Into
POTWS
CZRCLA Off-Site Policy: Providing Notice To
Facilities
CEBCLA Off-Site Policy: Eligibility Of
Facilities In Assessment Monitoring
Guidance For Conducting Remedial Investigations
And Feasibility Studies Under CERCLA (Draft)
Guidance on Preparing Superfund Decision
*, vai^imfr* tins rj»m*v^cu r±aii mau IUSWU.LU vj£
Decision (Draft)
Participation Of Potentially Responsible
Parties (PRPs) in Development Of Rls And FSs
1 T^TII flT Ini \Ji Ud-XaXMi 1JLA.LUIS1U> C\Ji
Approving Fund-Financed And PRP Remedial
Actions Under CERCLA
Preliminary Assessment Guidance, FY-88
Guidance for Low And Medium Cost Site
Discovery Activities (Draft)
a«4 Amr^tm 9nr 1l ^ 1 1 1 ^Mrr^V ftr*M vif 1fM f fll'JI fl 1
p^j/t sit* Tnsptrtion Sampling To Support HRS
ms Scoring (Draft)
Guidance - FY-88
Prr-Remedial Strategy For ImplanBiting SARA
Interim RCRA/CE8CLA Guidance On Non-Contiguous
31
31
31
43
43
31
32
32
43
43
43
32
32
33
              Sites And On-Sit* M^nt Of Waste Residue
July 31 f 1988                      - 5 -           OSWER Directive 9200.7-01

-------
9347.0-02     Implementation Guidance For Solvent, Dioxin,             44
              And California List Wastes Subject to RCRA/KSUA
              Land Disposal Restrictions

9355.0-03     Uncontrolled Hazardous Waste Site Ranking                33
              Systems (HRS)  - A Users Manual

9355.0-04A

9355.0-05C
9355. 0-6B
9355.0-07B
9355.0-08
9355.0-10
9355.0-14
9355.0-19
9355.0-20
9355.0-21
9355.0-23
9355.0-24
9355.1-01
9355.1-02
9355.1-03
9355.2-01
9355.3-01
Guidance (RD/RA)
Guidance On Feasibility Studies (FS) Under
Guidance On Remedial Investigations (RI) Under
CERCXA
Data Quality Objectives Development Guidance
For Remedial Response Actions
wn^ling Remedial Actions *t "Trolled
Hazardous waste Sites
KcwiM^n 3 1 A^^I OM Ort^c^ i no Pr^rt^ortn^^44 al &«"*>4nn C*a^^ MBi'uta^A

Ttm RPM Primer

Terminating Contracts For SPFD runo-Leaa
Stilt^ LflAd Rlf"V4ia'1 Prnjart Manual
Guidance For Conducting RI/FS Tinder CERCLA
j^
33
34
34
34
35
35
35
35
35
35
36
36
44
36
44
              (Draft)
July 31, 1988                      - 6 -          OSWER Directive  9200.7-01

-------
 9355.3-02      Guidance For Providing Alternative Water                 36
               Supplies
 9355.3-05      RI/FS Improvements Followup                              36
 9360.0-02B    Removal Cost Management Manual                           37
 9360.0-03B    Superfund Removal Procedures,  Revision *3                37
 9360.06A       Relaticus'iip Of TSie Removal And Ranedial                 37
               Program Under Die Revised NCP
 93-»0.08        Removal Actions At Methane  Release Sites                 38
 9360.0-10      Expedited Response Actions                                38
 9360.0-12      Guidance On Implementation  Of  Ine Revised                38
               Statutory Limits  On Removal Actions
 9360.0-13      Guidance On Implementation  Of  Ihe "Contribute            38
9360.0-14
9360.0-15
9360.0-18
9360.1-01
9360.2-01
9375.0-01
9375.1-06
9375.1-09
9375.1-10
9375.1-11
9375.1-12
Provision
Us* Of SujandflJ R«K»al Authority To Address
NFL And Proposed NPL Sites
Role Of Expedited Response Action Under SARA
Removal Piuyrdm Priorities
Interim Final Guidance on Removal Action
Levels At contaminated Drinking water Sites
Mooei Pioyidu For Removal site rue Management
Guidance on Preparation Of Superfund MDA
(Draft)
Swart Of Cooperative ttgnttntsns To Political
Subdivisions
Interln Guidance On State Participation In
Pm-mwrtial An) TMP^^if^ RMTWVW

Involvtnent Of Indian Tribal Governments in
Superfund Pre -Remedial and Remedial Picgup
(Draft)
Cooperative AyiBHiamis
State Access To EPA Contractors During RumHal
39
39
39
39
39
44
39
39
44
40
40
              Process
July 31, 1988                      - 7 -           OSWER Directive 9200.7-01

-------
9375.2-01
9380.0-02
9380.0-03
9380.0-04
9380.0-05
9380.0-06
9380.1-02
9380.2-01
9380.2-02
9380.2-03
9380.2-04
9380.2-05
State Core Program Funding Cooperative
Agreements
Slurry Trench Construction For Pollution
Migration Controls
Guidance For Cleanup Of Surface Tank And Drum
Sites
Ffl^^dial Action At Wast* Di spousal Sifps Handbook
Leachate Plume Management
fiii rta^^o TVv^muffrfr T?oi* ^T oaniTp O^ *5iiT^a^o

JJI%jmuuaBIw OlwcS
Hazardous waste Bibliography
JJ.LCLL u j«-i-i-^i IMT i vg- xxcol.lldlU./ ui .^p^/rxt i
Technology Guidance For Removal Ana ocpeaitea
Removal Actions
Draft Site Operations Plan
Superfund Innovative Technology Evaluation
(SITE) Proyiaiu Strategy And Program Plan
Draft Decision Criteria For Recycling Wastes
From Superfund Sites
Draft Guidance On Differentiating Alternative
40
40
40
40
41
41
41
44
44
41
44
44
              Technologies
Section III   Documents in Final Draft Development
                                    42
July 31, 1988
- 8 -
OSHOt Directive 9200.7-01

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                                      OSWER Directive No. 9832.13


Part V,  g^iafcina Coat Recovery Guidance
Administrative Records for Decisions on Selection of CERCLA
Response Actions. May 29, 1987, OSWER Directive No. 9833.3.

coordination of EPA and State Actions in Cost Reeoyery.
August 29, 1983, OSWER Directive No. 9832.2.

Cost Recovery Actions/Statute of Limitations. June 12, 1987,
OSWER Directive No. 9832.3-1A.

Cost Recovery Actions under the Comprehensive Environmental
Response. Compensation, and Liability Act of 1980 (CERCLJU .
August 26, 1983, OSWER Directive No. 9832.1.  Also known as the
1983 Cost Recovery Guidance.

Cost Recovery Referrals. August 3, 1983,  OSWER Directive No.
9832.0.

Guidance of Documenting Decisions not to Take Cosfr Recovery
Actions. June 7, 1988, OSWER Directive No. 9832.11.

Guidance on Federal -Suoerfund Liens. September 22, 1987, OSWER
Directive No. 9832.12.

Interim CERCIA Settlement Policy. December 5, 1984, OSWER
Directive No. 9835.0.

Interim Final Guidance Package on Funding CERCIA State
Enforcement Actions at NPL Sites. April 7, 1988, OSWER Directive
No. 9831.6.

Interim Guidance oh Notice Letters. Negotiations, and Information
Exchange . November 19, 1987, OSWER Directive No. 9834.10.

Interim Guidance on Settlements with de Minimis Waste
contributors under Section 122 fen of SARA. June 19, 1987, OSWER
Directive Me. 9834.7.

Interim Guidance; Streamlining the CERCIA Settlement  Decision
Proeese. February 12, 1987, OSWER Directive No. 9835.4.

Peliev on Recovering Indirect Costs in CERCIA 1107 Cost
Actions . June 27, 1986, OSWER Directive No. 9832.5.

Potentially Responsible Party Search Manual. August 27,  1987,
OSWER Directive No. 9834. 3-1A.
                                  47

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                                      OSWER Directive No. 9832.13


Procedures for Documenting Costs for CERCLA $107 Actions.
January 30, 1985, OSWER Directive No. 9832.0-1A.  Also known as
the Cost Documentation Procedures Manual.

Revised Hazardous Waste Bankruptcy Guidance. May 23, 1986, OECM.

Small Cost Recovery Referrals.  July 12, 1985, OSWER Directive
No. 9832.6.

State Suoerfund Financial Management and Recordkeepina Guidance.
November 1987, Office of the Comptroller, Financial Management
Division.

Superfi^nd Removal Procedures Revision Number Three.
February 1988, OSWER Directive No. 93*0.0-038.  See Chapter 5,
"Potentially Responsible Parties".
                                  48

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                                                    OSWER # 9834.4-A
       I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
       f                WASHINGTON. O.C. 20460
                          Afi 25 588
                                                          o«ice OF
MEMORANDUM

SUBJECT: Transmittal of Guidance on Use and Enforcement of
         CERCLA Information Requests and Administrative
         Subpoenas

FROM:    Thomas L. Adams, Jr.
         Assistant Administrator

TO:      Regional Administrators, Regions I - X
         Regional Counsel, Regions I - X
         Directors, Waste Management Divisions, Regions I - X

    With this memorandum, I am transmitting guidance on the use
and enforcement of EPA's information gathering authorities under
CERCLA SS 104(e) and 122(e>(3)(B).  The attached guidance
document replaces existing guidance entitled, "Policy on
Enforcing Information Requests in-Hazardous Waste Cases," dated
September 10, 1984, to the extent that the earlier guidance
addressed information gathering under CERCLA $104(e).

Attachment

cc: Bruce Diamond, Director,  Office of Waste Programs
       Enforcement
    Lloyd Guerci, Director, CERCLA Enforcement Division,
       Office of Waste Programs Enforcement
    Fran* Russo, Chief, Compliance Branch, Office of Waste
       Programs Enforcement
    Robert J. Mason, Acting Chief, Guidance and Oversight
       Branch, Office of Waste Programs Enforcement
    Lisa X* Friedman, Associate General Counsel, Office of
       G«n«ral Counsel
    David Buente, Chief, Environmental Enforcement section,
       Department of Justice
    Nancy Firestone, Deputy Chief, Environmental Enforcement
       Section, Department of Justice
    Office of Regional Counsel Hazardous Waste Branch chiefs,
       Regions I - X
    Clem Rastatter, Executive Assistant, Office of Emergency and
       Remedial Response

-------
Guidance on Use and Enforcement of CERGLA
Information Requests and Administrative Subpoenas

-------
;•
    ^
        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON. D.C. 20460
                            AUB 2 5 B88
                                                       COMKIANTk MOMTORINC
SUBJECT:


FROM:


TO:
            Guidance on Use and Enforcement of CERCLA
            Information Requests and Administrative Subpoenas
Thomas L. Adams, Jr.
Assistant Administrator
                                            .
Regional Administrators,  Regions I - X
Regional Counsel, Regions I - X
Directors, Waste Management Divisions, Regions I
                                                             - X
 I. INTRODUCTION

      The Comprehensive Environmental Response, Compensation, and

 Liability Act of 1980 (CERCLA), as amended by the Superfund

 Amendments and Reauthorization Act of 1986 (SARA>, provides EPA

 with several methods of obtaining various types of information

 from a vide range of entities 1.  Section 104(e), entitled

 "Information Gathering and Access," grants EPA the authority to

 issue "information requests."  section I22(e)(3)(B), entitled,

 "Collection of Information," authorizes the use of

 administrative subpoenas.  These information-gathering tools and

 enforcement powers represent a significant improvement in EPA's
      1      This guidance focuses solely on information
             gathering in the context of civil enforcement.  In
 instances where a criminal enforcement action is contemplated or
 pending, Regional personnel should consult with OECM - Office of
 Criminal Enforcement, before proceeding with information
 gathering under CERCLA.

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 GUIDANCE ON USE AND ENFORCEMENT OF CERCLA INFORMATION REQUESTS
                  AND ADMINISTRATIVE SUBPOENAS
                       TABLE OF CONTENTS
I.  INTRODUCTION	,	 1
II. BACKGROUND	 2
 A. Prior Information-Gathering Authorities	 2
 B. Administrative Information-Gathering Distinguished from
    Discovery	 3
III.DELEGATED AUTHORITIES TO USE INFORMATION-GATHERING TOOLS.. 6
IV. SCOPE AND TIMING OF INFORMATION-GATHERING PROCEDURES	 7
 A. Information Requests	  7
 B. Administrative Subpoenas	; 12
V.  SERVICE OF INFORMATION REQUESTS AND SUBPOENAS	 13
VI. GENERAL DUE PROCESS CONSIDERATIONS IN INVESTICATTV£
    PROCEEDINGS PURSUANT TO AN ADMINISTRATIVE SUBPOENA	 14
 A. Agency Adjudications and Investigations Distinguished.... 14
 B. Role of Witness* Counsel at Administrative Subpoena
    Proceedings	 15
VII.ENFORCEMENT OF INFORMATION REQUESTS AND SUBPOENAS	 16
 A. Information Requests	 16
    1. initial Steps	 16
    2. Administrative orders to Compel compliance 	 17
    3. Civil Actions to Compel Compliance	 18
    4. Scop* of Judicial Rev lev	 20
    5. Penalties	 21
 B. Subpoenas	 23
    1. Jui isdiction  and Venue	 23
    2. Procedures for Enforcing Subpoenas	 24
 c. Referrals	*	 25
VIII. DISCLAIMER	26

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                                     2
ability to obtain  infirmation.  A  full exercise of these
authorities,  including taxing enforcement action when necessary,
can aid considerably in the  implementation of CERCLA, and the
attainment of statutorily mandated goals.
    This guidance  2 serves two purposes: 1) it gives an overview
of the information-gathering tools unt'er CERCLA SS104(e) and
122(e) (3) (B) , and  2) it focuses on the steps to be taJcen
throughout the information-gathering process to ensure that EPA
is in the strongest possible position to enforce an information
request or subpoena, 3 if necessary.
II. BACKGROUND
 A. Prior Information—Gathering Authorities
    Prior to the enactment of SARA,  information regarding
hazardous waste sites was gathered, primarily under the pre-SARA
provisions of CERCLA S104(e) and RCRA S3007.  Section 104(8X5),
authorizing administrative orders, civil actions and penalties
of up to $25,000 for each day of noncompliance, now eliminates
the nee** to incorporate RCRA $3007 solely for enforcement
purposes.  However, in appropriate circumstances where RCRA
information gathering authorities  are applicable, Regions may
     2      This guidance  replaces existing guidance entitled,
            "Policy on' Enforcing  Information Requests  in
Hazardous Waste Cases," dated September  10, 1984, to the extent
that the previous guidance addressed  information gathering under
CERCLA $104(8).
     3      CERCLA S109(a)(5),  as amended, also authorizes EPA
            to V*", a*1ministrativ8 subpoenas "in conjunction with
hearings" on Class I  administrative penalties.  This guidance
does not specifically address the use of administrative
subpoenas in that context.

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                                    3
still consider citing $3007 since RCRA provides the option of
enforcement in a proceeding before an administrative law judge.4
    The administrative subpoena authority in CERCLA $122 is new
to CERCLA.  However, it is rimiiar to the authority contained in
$ll(c) of the Toxic Substances control Act (TSCA),  35 U.S.C.
2610(c). 5
 B. Administrative Information-Gathering Distinguished from
    Discovery
     As an initial matter, a distinction must be drawn between
an investigation conducted by an administrative agency such as
EPA and the information-gathering that commonly takes place
during the discovery phase of a civil action.  An administrative
investigation is related in some way to implementation of an
agency's statutory responsibilities.  The manner and extent of
the investigations are prescribed by the authorizing statute.
Such an investigation may ultimately lead to the filing of a
civil action, (at which time both parties may be allowed
discovery), or it may simply be related to an agency's ongoing
oversight activities.
     4      More extensive guidance on information-gathering
            under RCRA $3007 may be found in the guidance,
"Policy on Enforcing Information Requests in Hazardous Waste
Cases," OKU, September 10, 1984.
     5      The use of TSCA Sll(c). subpoena authority was
            recently upheld by Uie Ninth Circuit in EPA v.
Alveska Pioelina Sarv. Co. . 836 F.2d 443, 446-48 (9th Cir.
1988).  in that case, the Court upheld the use of a TSCA
subpoena to gather information relevant to a lawful inquiry
under TSCA, even though the Court recognized that other
environmental statutes, specifically the Clean Water Act, may
later prove to be a more appropriate means of addressing the
environmental problem under investigation.

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                                     4

     Discovery, on the other hand,  is conducted after an action

is filed in court.  The Federal Rules of Civil Procedure govern

the manner and scope of this type of information-gathering. 5

     During the course of both an administrative investigation

and discovery, a party may be required to provide oral testimony

or produce documents. 7   However,  the information-gathering

tools used in an administrative investigation, and discussed in

this guidance, are not the legal or functional equivalents of

the more familiar interrogatory, deposition or request for

production of documents. 8
     6      Nonetheless the Agency is not precluded from using
            its administrative information gathering authority
once a civil action is commenced.  In re Stanley Plating Co..
Inc.f 637 F. Supp. 71 (D. Conn. 1986), United States v. Browning
- Ferr^a Ch.fflnlc,fll Services . et. a.1. . No. 87-317-B '(M.D. La. ,
November 16, 1987).

     7      It should be noted that since there is no
            opportunity for cross-examination, testimony
obtained by administrative subpoena might not be admissible at
trial.  If the Agency wishes to preserve a respondent's
testimony for trial, rather than use it only to develop other
admissible evidence, two options are available.  First, when it
becomes clear that the testimony is necessary for trial, the
respondent's deposition can be taken in the usual course of
discovery.  Alternatively, if the Agency expects to bring an
enforcement action and it is not likely that the respondent win
be available later during the discovery phase of the case, it
may be possible to preserve a witness* testimony pursuant to
Fed.R.Civ.P. 27 either in lieu of  issuing an administrative
subpoena, or following the issuance of a subpoena,  see.
Petition of Gary Conatr. r Inc.. 96 F.R.D. 432, 433  (D.Colo.
1983), Aart v. Cor*. 512 F. 2d 909. 911-913  (3d Cir. 1975), In re
Boland. 79 F.R.O. 665, 667 (D.D.C. 1978), Petition of Benjamin.
52 F.R.D. 407 (E.D. La. 1971).

     8    The Notes of the Advisory committee on the Federal
          Rules   ,' rivil Procedure explicitly state that the
provisions of Fed.R.Civ.P. 45  (Subpoenas) do not apply to
administrative subpoenas.  Other Rules are  less explicit but are
                                                  (continued...)

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      Tn n.A,  v.  Morion Salt  Co.   338  U.S.  632,  642-643  (1950),

 the  Supreme Court described  the  difference between

 administrative investigatory power  and a court's  adjudicatory

 power  in the  following manner:

         The only power that  is involved here  is the power to
         get information from those  who can best give  it  and
         who are  most interested  in  not doing  so.   Because
         judicial power is  reluctant if not unable to  summon
         evidence until it  is shown  to be relevant to  issues
         in  litigation, it  does not  follow that an administrative
         agency charged with  seeing  that the laws  are  enforced
         may not  have and exercise powers of original  inquiry.
         It  has a power of  inquisition,  if  one chooses to call
         it  that,  which is  not derived from the judicial
         function.   It is more analogous to the Grand  Jury,
         which does not depend on a  case or controversy for
         power to get evidence but can investigate merely on
         suspicion that the law is being violated,  or  even
         just  because it wants assurance that  it is not.

     Limitations on this information  seeking  power do exist.

However,  the  limitations themselves are narrow in scope.

         Of  course a governmental investigation ... may be of
         such  a sweeping nature and  so unrelated to the matter
         properly under inquiry as to  exceed the investigatory
         power...  But it is sufficient if the  inquiry  is
         within the authority of  the agency, the demand is not
         too indefinite and the information sought  is
         reasonably relevant,  id-  at 652 (citations omitted).

Thus, there are  three basic  parameters  which  are  relevant to a

request  for information or an administrative  subpoena.  It must

be:
     8(...continued)
also, by their terms,  inapplicable.  For example. Fed.R.Civ.p.
26 (General Provisions Governing Discovery) contemplates, an
ongoing oversight role of the court.   In administrative
information gathering, the court has no role unless  specifically
petitioned by the government to enforce a  subpoena or
information request,   see. Belle Fourehe Pipeline Co. v. U.S..
751 F.2d 332, 334 (10th Cir. 1984), citing Raismart v. Caolin.
375 U.S. 440, 84 S.Ct. 508, 11 L.Ed.Zd 459 (1964).

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     1. witfcia the underlying statutory authority of the agency;
     2. Sufficiently definite/specific;
     3. Reasonably relevant to the agency's basic inquiry.
In addition, it should be noted that courts may also consider
whether a request is unduly burdensome. 9
III.  DELEGATED AUTHQRTTY TO USE INFORMATION qATHESING TOOLS
     On January 23, 19f7, the President signed Executive Order
12580 delegating information-gathering authority in ss 104(e)
and  122 to the Administrator of EPA. 10  This authority was, in
turn, delegated from the Administrator to the Assistant
Administrator for Solid Waste and Emergency Response, the
Assistant Administrator for Enforcement and Compliance
Monitoring and the Regional Administrators by Delegation 14-6,
"Inspections, Sampling, Information Gathering, Subpoenas and
Entry for Response," signed on September 13, 1987.
    Under Delegation 14-6, the authority of the Regional
Administrator and the Assistant Administrator for Solid Waste
and Emergency Response to issue compliance orders or subp *nas
is limited by the requirement that they first consult with the
Assistant Administrator for Enforcement and Compliance
     *      See, e.g.. F.T.C. v. Taxaeo. 555 F.2d 862, 882 (D.C.
            Cir. 1977), where the court stated,
           the question is whether the demand is unduly
           burdensome or unreasonably broad,  some burden on
           subpoenaed parties is to be expected and is
           necessary in furtherance of the agency's legitimate
           inquiry and the public interest.
     10     The Administrator's authority, however, is limited
            with regard to federal facilities.   (See  sections
3(j)(l) and 3(b)(l) of Executive Order 12580.)

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                                    7

Monitoring or his/her designee.  On November 19, 1987, the

Assistant Administrator for Enforcement and Compliance

Monitoring redelegated his consultation autnority under

Delegation 14-6 to the Associate Enforcement Counsel for Waste.

IV.  SCOPE AND TIMING OF INFQRMVTIQL GATH"ESTW; PROCEDURES

 A .   Inf onna/tioTi Requests

     The scope of investigation authorized by CERCLA si04(e)

is broad.  CERCIA S104(e)(2), as amended by SARA, provides:

        Any [duly authorized] officer, employee, or represen-
        tative [of the President]...  may require anv
        who has or mav have information relevant to any of
        the following to furnish, upon reasonable notice,
        information or documents relating to such matter:

           (A) The identification, nature, and quantity of
           materials which have been or are generr.tec" , t-eated,
           stored, or disposed of at a vessel or facility or
           transported to a vessel or facility.
           (B) The nature or extent of a release or threatened
           release of a hazardous substance or pollutant or
           contaminant at or from a vessel or facility.
           (C) Information relating to the ability of a person
           to pay for or to perform a cleanup.

        In addition, upon reasonable notice, such person
        either (i) shall grant any such officer, employee, or
        representative access at all reasonable times to any
        vessel, facility, establishment, place, property, or
        location to inspect and copy all documents or records
        relating to such matters or (ii) shall copy and
        furnish to the officer, employee, or representative
        all such documents or records at the option and expense
        of such person. (Emphasis added.)

     Section 104 (e) (!>' provides:

        The authority of this subsection may be exercised
        only for the purposes of determining the need for
        response, or choosing or talcing any res^nse action
        under this title , or otherwise enforcing the
        orovisic — of this title.  (Emphasis added.)

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                                    8
     Initial attempts to gather information about a given site
commonly will be through the use of information requests issued
under CERCLA Sl04(e).  While an information request may be sent
in advance of a general notice letter, as a component of the
general notice letter, or after the general notice letter, as
needed, 11 an effort should be made to issue initial information
requests earlier rather than later in the PRP search process to
aid in the process of establishing liability and clarifying the
universe of PRPs.  Initial information requests typically should
see* the following types of information:
         -relationship of the PRP to the site;
         -business records relating to the site, including,
         but not limited to, manifests, invoices, and record
         books;
         -any data or reports regarding environmental monitoring
         or environmental investigations at the site;
         -descriptions and quantities of hazardous substances
         transported to, or stored, treated or disposed at
         the site;
         -any arrangements made to transport waste material to
         the site;
         -names of any transporters used in connection with
         th« site;
         -where financial viability is or will be at issue, and
         the Agency is unable to assess financial viability
         effectively through review of publicly available
     11     For further information on notice letters, their
            timing, and content, see "Interim Guidance on Notice
Letters, Negotiations and Information Exchange,"  53 red. Reg.
5298 (Feb. 23, 1988).

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         data, 12 information relating to ability to pay for or
         perform a cleanup; 13,

    Where financial viability is or will be at issue,

information requests regarding insurance coverage should strike

a balance between the need to make an initial determination

about the extent of an insured's coverage and the need to avoid

requiring an insured to construe the coverage of its policies.

If a request is overly specific, and a party (the insured) fails

to identify insurance that may afford coverage regarding a

response action, the insurer may attempt to use that failure to

identify the policy in the information request to avoid payment
     12     The ability to obtain financial information about a
            PRP from a source other than the PRP itself is
limited by the Right to Financial Privacy Act, 12 U.S.C. 3401,
gl sag., which limits Government access to a customer's
financial records at a financial institution in accordance with
the provisions of the Act.  In most cases, it will not be
necessary to seek information about a PRP's assets from a
financial institution.  That information can be obtained from a
PRP as a condition of negotiation if the PRP raises ability to
pay as an issue.  If circumstances arise where a Region believes
that it is necessary to obtain information from a financial
institution, it should first consult with Headquarters.

     13     Under CERCLA Sl04(e)(2)(c), EPA now has explicit
            authority to request information relating to the
ability of a person to pay for or perform a cleanup.  Before it
was amended, CERCZA S104 authorized EPA simply to obtain
"information relating to [hazardous] substances."  EPA typically
construed tni» language to include all information that EPA
considered, relevant to.- any aspect of enforcement.  In n.s. v.
Charles Gmoram Trnetino Co.. 624 F. Supp. 1185 (D. Mass.), af f'd
on other grounds. 823 F.2d 685 (1st Cir. 1987), the court took
issue with EPA»s broad interpretation of "information relating
to [hazardous] substances" and denied EPA's request for
information relating to a defendant's ability to pay for or
perform a cleanup.  The court held that information about assets
and insurance cc  raje "in no way informs EPA about the
hazardous substances involved."  624 F. Supp. at 1188.  This
decision is no longer supported  in light of CERCLA Sl04(e)(2)(c)

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                                    10
under the policy.  Failure to  identify the policy in a response
to an information request may  tend to show that the insured did
not intend to address that type of liability with the policy in
issue.  Such subjective intent is often critical in litigation
over t .ie extent of coverage of insurance policies.  The ultimate
result might be that potentially fewer funds would be available
for a response action, and the potential for settlement
diminished.
    Hence, requests for information about insurance policies
should be as neutral as possible.  Rather than seeking
information about discrete periods of time during which it is
suspected that a given party may be active at a situ, the
information request should cover the period from the first known
instance of waste disposal to the present.  Terms such as
"pollution exclusion," "sudden," "non-sudden," or "accidental"
should be avoided and the insured should not be asked to state
whether its insurance contains such exclusions or coverage.
Instead, the information request should simply ask the insured
to provide a list of all property and casualty insurance (e.g.
comprehensive general liability, environmental impairment and
automobile liability insurance) and to specify the insurer,
policy, effective dates, and per occurrence policy limits for
each policy.  In tl^s way, the Agency obtains the information it
needs to make an initial determination about insurance coverage,
and the insured has not compromised any potential insurance
coverage should it ultimately  be liable for any response costs.

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                                    11
 In  the  alternative,  the  insured may always be given the option
 of  providing copies  of tne policies themselves.  A similar.
 general  request aJbout directors* and officers'  insurance may
 also be  made in situations where personal liability of a
 corporation's directt rs  or officers is or will  be at issue.
    Information requests shomd include a brief identification
 and description of the site, a citation to the  statutory
 authority, and a general statement setting forth the purpose of
 the request and its  relation to the overall case.  An
 information request  should also state the date  by which the
 recipient must respond or adequately justify his inability to
 respond.  This due data  should reasonably reflect the type and
 volume of information that the agency anticipates will be
 responsive to the request.  Thirty, days is usually adequate,  rn
 addition, the information request should state  that the
 respondent may have  an opportunity for consultation with the
Agency,  and that failure to respond may give rise to a p-  iity.
An information request should also require the  recipient to
 indicate the types of files searched in response to the request,
and ask  the recipient to submit an affidavit describing his
search efforts if tne search does not disclose  any of the
 information sought.  14
     14     Previous guidance,  "Policy on Enforcing  Information
            Requests in Hazardous Waste Cases",  September  10,
1984, suggested that an affidavit be  requested  in  a  second,
"reminder" letter.  However, by including an  affidavit  request
with a request for a description of the types of files  searched
in the initial information  request, one can more quickly
                                                  (continued...)

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                                             OSVER DIRECTIVE t 9834. 4A

                                    12
      A model  information request,  largely  developed by  Region  I,
 is  attached as Attachment 1.
 B.
      Section  122(e)(3)(B)  gives EPA the power to  issue
administrative  subpoenas requiring the attendarce and testimony
of witnesses  (referred to  as a subpoena ad tea- -.if igandumi and
the production  of documents  (referred to as a subpoena duces
tegum) .  Such subpoenas may be issued as is "necessary and
appropriate" for performing a non-binding preliminary allocation
of responsibility (NEAR) "or for otherwise implementing1* CERCLA
Section 122.
    Since the language of  5122 is broad and permits the use of
administrative  subpoenas "for otherwise implementing [Section
122 1," there is no requirement that EPA first decide to prepare
an NBAR before  issuing an  administrative subpoena or that the
information gathered by an administrative subpoena be used only
for an NBAR. 1S  Instead,  an administrative subpoena may be used
once the Agency has begun  to implement the settlement process
under 5122 (e.g. through initiation of informal discussions or
     14(...continued)
determine wnich information  requests should be  followed up with
an enforcement action.
     15     Nonetheless, the factors that may be  considered when
            preparing an NBAR are  a useful  outline  of  the types
of information that may be reached, at  a minimum, with an
administrative subpoena.  These  factors, are set forth  in
Si22(e)(3) and include: "volume  and toxicity  of wastes, strength
of the evidence, ability to  pay, litigative risXs,  public
interest considerations, precedential value,  and  inequities and
aggravating factors."

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                                    13
 formal negotiations with some or all  affected PRPs, or where the
 Agency judges that available information points to favorable
 prospects  for settlement).  Since the.use of administrative
 rubpoenas  may be  judicially challenged, it is important to
 .dentify and document the reasons relied upon in deciding to use
 the authority in  §l22(e)<3)
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                                    14
person mist be  served.   Service upon  a domestic corporation, or
upon a partnership or other unincorporated association, should
be made by personal service or certified mail to an officer,
partner, managing or general agent, or to any other person
authorized by law to receive service  of process.  The person
serving the subpoena, including the person who actually mails
the subpoena when that method of service is used, must complete
an affidavit of service  at the time of service. (See Attachment
2 for a model subpoena and affidavit  of service. )
    The statute places no explicit limit on the distance that a
witness may be  required  to travel to  appear in response to a
subpoena.  Potential locations for such an appearance include an
EPA regional office, EPA Headquarters, a local U.S. Attorney's
office, a court reporter's office, or any other location
considered appropriate under the circumstances.
VI.  GENERAL DUE PROCESS  CONSIPERAJ^pfl'S JEN INVESTIGATIVE
                PURSUANT TO AN ADMINISTRATIVE SUBPOENA
 A.  Agency Adjudications and Tnvestigaticna Distinguished
    When an agency such as the EPA orders a person to appear at
an agency proceeding, the procedural rights of the person
ordered to appear vary depending upon whether the agency's
purpose i» to adjudicate or to investigate.  Examples of EPA
adjudication include the issuance of compliance orders or the
ass-.sment of civil penalties under S3008(a) of RCRA.  'Before
the Agency nay issue a compliance order or assess civil
penalties under RCRA $3008 (a), the person against whom the
Agency is taxing action is accorded the procedural rights set

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                                    15
forth  in 40 CTR Part  22.  16  These rights are similar to those
of a defendant in a civil trial and include the right to notice,
to submit evidence, and to cross-examine.
    In contrast, when an  agency issues an administrative
subpoena pursuant to  S122(e)(3)(B), its purpose is only to
investigate or gather information and "it is not necessary that
the full panoply of judicial procedures be used." Hannah v.
Larche. 363 U.S. 420, 442 (1960).
         [W]hen...agencies are conducting nonadjudicative, fact-
         finding investigations, rights such as apprisal,
         confrontation, or cross-examination generally do not
         obtain,  id. at  446.
    Despite this limitation, a witness may nonetheless invoke
his Fifth Amendment privilege as to particular questions
presenting a threat of self-incrimination.  U.S. v. Mainiic. 489
F.2d 682, 685 (5th Cir. 1974).
 B.  Role of Witness* Counsel a/t Administrating SUb.'po.flnS
     Proceedings
    The practical effect  of the fact that witnesses have limited
procedural rights during  information-gathering under an
administrative subpoen* is that the role of a witness' counsel
is limited.  Although $555 (b) of the Administrative Procedure
Act (APA) provides a  person with the right to counsel at any
     16     Part 22 procedures *o not  apply  to compliance orders
            issued under CERCLA  S104(e)(5).  Due process is
assured under slo*(e)(5) by the  statutory  requirements  that  the
respondent have an opportunity to confer with the Agency prior
to issuance of the order  (discussed below) and that  orders be
enforced by commencing  a civil action.  Similarly, Part 22
procedures do not apply to the assessment  of penalties  under
Sl04(e) as that can only be accomplished by  commencing  a civil
action.

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                                    16

 agency proceeding  at which  he  is  compelled  to  appear,

 "representation" under  the  APA "varies  in meaning  depending  upon

 the nature of  the  function  being  exercised." F.C.C. v.

 Schreiber . 329 F.2d 517,526 (9th  Cir. 1964).

          [WJhile counsel may,  a*  a matter of right, object and
         argue objections on the  record, just  as he may, as  a
         matter of right, cross-examine and call witnesses in a
         trial-type adjudicatory  proceeding, these rights do not
         exist in  the fact-finding, nonadjudicative investigation
         unless specifically provided by statute or duly
         promulgated rules.  The  right to object and argue
         objections on  the  record is not to be implied, here,
         froa use  of the word  "represented" [in the
         Administrative Procedure Act. ]
Thus, although subpoena proceedings under CERCLA are recorded,

and the witness  is under oath  and may have  an attorney present

for consultation, counsel  for  the witness is not allowed to

"speak to the record," to  cross-examine, to aid in developing

testimony, or to otherwise "coach" the witness.  Furthermore,

other parties potentially  affected by the investigation do not

have a right to be present during the questioning.

VII. ENFQRCEMirprp OF INFORMATION pWOTTff^TS MITJ SUBPOENAS

 A.

    1.
    When t2M deadline  for  responding  to  an  information  request

has passed, a reminder letter  should  be  sent  to  the unresponsive

information request  recipient,  1)  informing the  recipient that

S104(e) provides  for a penalty of  up  to  $25,000  per day for

noncompliance, and 2)  stating  the  date after  which a  civil

judicial or administrative enforcement action may be  initiated.

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                                    17
The reminder letter should also provide an opportunity for
consultation. 17  This will fulfill the requirement of
S104(e)(5)(A) if enforcement by administrative order is
contemplated and should also fulfill any due process
requirements for record review.   (See Sectica VII.A.4., "Scooe
of Judicial Review," below.)  Whenever a recipient trices
advantage of an opportunity for consultation, the issuing
official should send a letter to  the recipient summarizing any
contacts with the recipient, and  stating EPA's resolution of any
objections.  If there is no response or if the response to a
request is still unsatisfactory after the reminder letter
deadline has passed, EPA may compel compliance wiui ihe request
through either an administrative  or judicial action.
    2. Administrative Orders to Compel Compliance
    Under CERCLA $104(e)(5)(A), EPA can issue an administrative
order directing compliance with an information request.  Each
administrative order should include a finding by the Regional
Administrator that there exists a reasonable belief that there
may be a release or threat of release of a hazardous substance
and a description of the purpose  for which the information
request va« issued.  The order should state the date on which  it
becomes effective and also advise, the respondent Uiat penalties
     17       The statute  leaves  the  decision whether  to provide
              notice and opportunity  for  consultation  to the
discretion of t'> , A'ency.  However, the Agency  believes that  it
is in the best interests-of  all concerned to provide an
opportunity for consultation whenever possible,  particularly
prior to the issuance  of an  administrative order.

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                                    18

 of  up to  $25,000  per  day may be  assessed by a court against  any

 party who unreasonably  fails to  comply with the order.

     In addition,  the  order  should  note that an opportunity for

 consultation was  provided and  should briefly summarize any

 contacts  with the respondent.  18

     3 . Civil Actions  •ho  Compel
    Alternatively, or  in the event that an administrative order

does not lead to compliance, EPA, through DOJ, can commence a

civil action under S104(e)<5) (B) . 19  In that civil action, EPA

can see* injunctive relief and/or civil penalties not to exceed

$25,000 per day for each day of  noncompliance.

    A referral to DOJ  for an inaaequate response or no response
     18       Normally, th* consultation requirement will fae
              fulfilled by offering the recipient an opportunity
to contact the EPA with questions or objections, in the
information request itself or in any subsequent reminder letter.
Given this prior opportunity for consultation and the narrow
scope of the order, it generally will not be productive *o delay
the order and offer another opportunity for consultat.i.c:
However, if it is likely that additional discussion will lead
directly to compliance, and the extra delay does not result in
an unreasonable threat to human health or the environment, the
Region may provide another opportunity for consultation prior to
issuance of the order.

     19     Section I04(e)(5)(B) states:

               The President may ask the Attorney General
               commence a civil action to compel compliance
               with a request QX order r-*ferrea to in
               subparagraph (A).

EPA's ability to commence a civil action without first issuing
an administrative order to compel compliance under S104(e) was
upheld in U.S. v. Charles George Trucking Co.. No. 85-2463-WD
(1st Cir. March 31, 1988).  See also, n.S. v. Nor-fchside Sanitary
Landfill. Ine.. No. IP 88-172-C,  (S.D. Ind. April 12, 1988).

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                                    19
at all should  include all evidence needed to support the case.
This  includes  evidence or findings that:
     (l)  EPA.has a  "reasonable basis to believe that there may
be a  release or threat of a release of a hazardous substance,
pollutant or conraminant" at a given site or vessel;
     (2) the information request was issued for the purpose of
determining the need for a response or choosing or taJcing any
response action under CERCLA Title I, or otherwise enforcing
CERCLA Title I, with respect to the site or vessel;
     (3)  the respondent was requested to provide information
relating to one or more of the three categories of information
identified in  S104(e)(2)(A)-(C);
     (4)  respondent did not comply with the request in a timely
manner.
     (5)  where appropriate, respondent should pay a civil
penalty, recommended at $	 . (See Section VII.A.5.,
"Penalties," below.)
    In addition, the referral should include proof of service
and should address possible defenses, such as that a good faith
effort was made to comply, or that the request for information
or documents is arbitrary and capricious, unduly burdensome, an
abuse of discretion or otherwise not in accordance with law.
     The decision to either issue an administrative order or
initiate a civil action must be made on a case-by-case basis.
Where there is r  oo . to believe that an administrative order
will not bring immediate compliance, a civil action should be

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                                    20
favored.  Tor example, if the recipient of an information
request has made little or no effort to respond to the request,
or has a history of disregarding requests for information or
delaying responses to requests, issuing an administrative order
may serve little purpose.  Wh'.le an administrative order
typically can be issued withii a shorter period of time than a
complaint can be filed, the overall duration of the enforcement
action may well be extended if the administrative order is
disregarded since enforcement of the order will be through the
referral and filing of a civil judicial action.
    4.  Seop« of Judicial Review
    In an action to enforce an information request or an
administrative order for compliance with an information reouest,
the court's review is limited to considering whether the
information request is "arbitrary and capricious, an abuse of
discretion, or otherwise not in accordance with law."
Sl04(e)(5)(B)(ii). 20  This clearly limited review should not
serve as an opportunity to review other aspects of the case,
     20     Judicial review is not thusly  limited when the
            amount of the penalty is the issue before the court.

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                                    21

such as remedy selection or  liability.  21  (Cf . u.s. v. western

           . Ing. . No. C83-252M  (W.D.  Wash. February 19,  1986).
    In cases where the Agency has .provided an opportunity for

consultation regarding the administrative order, and has created

an administrative record reflecting the parameters and elements

noted on pages 6 and 19, above,  Liie Government may argue that

judicial review of the administrative order should be limited to

an administrative record.  This  argument is based upon the

language in $l04(e) (5) (B) that provides for judicial review

under the arbitrary and capricious standard.  The success of

obtaining record review hinges on providing and documenting

adequate procedural due process  administratively. 22

    5. Penalties

    Under Sl04(e) (5) (B) (ii) of CERCLA, civil penalties may be

assessed against any person who  unreasonably fails* to comply
     21      Related to the scope of  judicial review is the
             degree to which a defendant may engage in ^  -:overy-
one e an enforcement action is initiated.  Discovery gene,  .ly is
restricted in enforcement proceedings  involving administrative
subpoenas (see n. 27, infra) and similarly, should be restricted
in actions brought under $104(e^ of CERCLA.  if discovery is
allowed at all in a given action, the  Government's position is
that its scope should be limited to addressing the parameters
for administrative investigations noted on page 6.

     22       It may also be possible  to seek record review of
              an information request without first issuing an
administrative order since CERCLA Sl04(e)(5)(B)(ii) provides for
review of both information requests and administrative orders
under an arbitrary and capricious standard.  Before seeking
record review of an information request, the Agency would  first
have to provide sufficient procedural  due process, including on
opportunity for consultation, and an  administrative record would
have to be created reflecting the parameters and  elements noted
on pages 6 and 19, above.

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                                    22

with the initial  information request or subsequent compliance

order.  The question of whether to  seeJc penalties may arise  in

two situations: 1) where  injunctive relief  is sought to compel

the respondent to answer  the information request and penalties

are sought in addition to injunctive relief; a.id 2) where the

respondent has answered the information request, albeit not  in a

timely manner, and penalties are the only relief sought. 23

    In both situations, to support  penalties, the evidence must

demonstrate: 1) that the  information request is enforceable, 24

and 2) that the respondent's conduct was unreasonable.  To

assess the reasonableness of a respondent's conduct, and thus

determine whether to seek penalties, Regional personnel should

consider factors such as  the respondent's good  faith or lack of

good faith efforts to comply with--the information request, and
     23     In information request enforcement actions,
            penalties can be assessed against a respondent even
if tie eventually complies with the information request.  See
e.g. P.a. v. Liviola. 60S T. Supp. 96 (N.D. Ohio 1985), U.S. v.
QuifrlM Seoroa Trucking Co. . 823 F.2d 685  (1st Cir. 1987).

     24     Tor an information request to  be enforceable, it
            must conform to the basic parameters noted above on
page 6.  toy issue of ..the reasonableness of the information
request itself is subsumed by these parameters.  Tms, once it
is determined that an information request  is enforceable, the
focus in terms of liability for penalties  is limited to the
respondent's conduct.  The statute provides that a  civil penalty
may be imposed "against any person who unreasonably fails to
comply with" an Agency request or administrative order.  Failure
to respond adeq   «e.*y to an information request is  presumptively
unreasonable, and the recipient of the request bears the burden
of proving that noncompliance with that request is  in  fact  reasonabi

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                                    23

any willfulness or negligence associated with the respondent's

actions. 2S

 B.
    1 . Jurisdiction and Venue

    If a respondent to an administrative subpoena refuses to

appear uu testify or provide documentary evidence, or refuses to

answer any or all of the questions put to him, the Agency may

commence enforcement proceedings in U.S. district court. 26

CERCLA S122(e) (3) (B) states:

        In the event of contumacy or failure or refusal
        of any person to obey any such subpoena, any district
        court of the United states in which venue is proper
        shall have jurisdiction to order any such person to
        comply with such subpoena.  Any failure to obey such
        an order of the court is punishable by the court as
        contempt thereof.

Venue for such an action "shall li-e in any district court in

which the release or damages occurred, or in which the defendant

resides, may be found, or has his principal office." CERCLA

SH3(b).
     2£     The decision to seek penalties should also include
            consideration of the Supreme Court's recent decision
in 1*1111 v. Unload States. 481 U.S. 	, 107 S.Ct. 	, 95 L.Ed.
2d 365 (1987), which provided for a  7th Amendment right to a
jury trial in the context of a Clean Water Act enforcement case,
where civil penalties were sought.by the Government.

     26     All proceedings in the U.S. district coc->. must be
            initiated by the Department of Justice on behalf of
EPA.  The court lacks jurisdiction to  review  the propriety of an
administrative subpoena upon motion  of a respondent.  Belie
Fourehe PiMlinf Co. v. P.S. . 751 F.2d 332  (10th Cir. 1984).  If
a respondent wishes to challenge a subpoena,  he may  refuse to
cooperate and force the Government to  initiate an enforcement
action.

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                                    24
     2.  Proee<8tirofl  for  Enforcing
     Enforcement  proceedings  are  begun by submitting  a  petition
 to  any  appropriate  federal district  court seeking  an order that
 the respondent show cause why he should  not be ordered to comply
 with the subpoena.  (See Attachment 3,  model petition.)  Although
 Fed. R. Civ. P.  bl(a)<3)  states  that the  Federal Rules  of civil
 Procedure apply  to  administrative subpoena enforcement
 proceedings  "unless otherwise provided by statute  or by rules of
 the district  court  or  by order of the  court in the proceedings,"
 courts  have consistently held that subpoena enforcement
 proceedings are  summary, and  that discovery is generally
 inappropriate given the scope of the  issues before the court. 27
    To  prevent a respondent from attempting to engage  in
 discovery prior  to  the show cause .hearing, the petition may
 include a request that Rules  26-37 and 45  be suspended unless
 specifically  reinstituted by  the court following the hearing.
    The petition, accompanied by affidavits and legal  memoranda,
must demonstrate that  the subpoena was issued for  a  lawful
     27     Tne court, in its discretion, may order discovery,
            bat only where the defendant meets the "heavy burden
of shoving extreme circumstances that would justify further
inquiry..." n.a. v. RFB Petroleum, me.. 703 r.2d 528, 533
(Temp. Em*rg. Ct. App.') iquoting U.S. v. Jurcn. 687 F.2d 493, 494
(Temp. Emerg. Ct. App. 1982).] This burden is not a  "meager
one...[the defendant] must come forward with facts suggesting
that the subpoena is intended soieiv to serve purposes outside
the purview of the jurisdiction of the issuing agency." N.L.R.B.
v. Interstate Dress Carriers. 610 F.2d 99, 112 (3d Cir. 1979)
(emphasis added   litre ions omitted).  See also n.s. v. McGovern.
87 F.R.D. 590 (M.D. Pa. 1980), Lvnn v. B-irterman. 536  F.2d 820,
825 (9th Cir.-) cert, denied gnfrf nom. Bidarman v. Hills. 429 U.S.
920 (1976).

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                                    25
purpose and is relevant to an agency  investigation.  At the show
cause hearing, the burden is on the respondent to show that the
subpoena is unenforceable in some respect.
    At the conclusion of the show cause hearing, the court may
order compliance, deny enforcement or modify the subpoena.
Subsequent failure of the respondent to comply with the court's
order may result in contempt proceedings against the respondent.
 C. Referrals
    Referrals to the Department of Justice of cases to enforce
information requests and administrative subpoenas will be
handled in accordance with the procedures set forth in the
January 14, 1988 memorandum from the Assistant Administrator for
Enforcement and Compliance Monitoring entitled, "Expansion of
Direct Referral of Cases to the Department of Justice."  In
time-critical situations, the procedures outlined in the the
April 15, 1988 memorandum from the Acting Associate Enforcement
counsel for Waste entitled, "OECM-Waste Procedures for
Processing Oral and Other Expedited Referrals1* should be
followed.
    A referral to enforce an information request will not differ
significantly from a referral to enforce most other sections of
CERCLA.  However, due to the summary  nature of *r action to
enforce an administrative subpoena, a referral to enforce an
administrative subpoena should contain certain additional
elements not commonly included in other referrals.

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                                    26
    A referral to enforce an administrative subpoena should
consist of a draft petition for an order to snow cause, a draft
memorandum of points and authorities  in support of the petition,
and a draft order to accompany the petition.  The memorandum of
points and authorities should briefly set out the facts of the
case and apply the legal standards for enforcement to chose
facts.  In addition, the memorandum should address any arguments
or defenses that the respondent is likely to raise.
    The referral should also contain all necessary exhibits in
support of the petition, including an affidavit of service, a
copy of the subpoena, an affidavit supporting the facts alleged
in the petition from a person with knowledge of those facts, and
any other relevant material which serves as the administrative
record documenting the subpoena process*
VIII.
    This memorandum and any internal procedures adopted for its
implementation are intended solely as guidance for empl^  es of
the U.S. Environmental Protection Agency.  They do not
constitute rulemaking by the Agency and may not be relied upon
to create a right or a benefit, substantive or procedural,
enforceable at law or in equity, by any person.  The Agency may
take action at variance with this memorandum or its internal
implementing procedure? .

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MODEL Information request                           Attachment
CERTIFIED MAIL  [OR DHL]         [Note:- No certified or express
                                      mail to P.O. Boxes]
 [Date]

 FPRP Name!
 TPRP Address!

 Re:  Request for Information Pursuant to Section 104 of
     CERCLA [and Section 3007 of RCRA,] for [Site Namel
     in  rsite location 1 hereinafter referred to as "the Site"

 Dear Sir or Madam:

  The United States Environmental Protection Agency (EPA) is
 currently investigating the source, extent and nature of the
 release or threatened release of hazardous substances,
 pollutants or contaminants, or hazardous wastes on or about the
 r site Namel in  rsite Location 1 (the Site).  This investigation
 requires inquiry into the identification, nature, and quantity
 of materials that have been or are generated, treated, stored,
 or disposed of  at, or transported to, the Site and the nature or
 extent of a release or threatened release of a hazardous
 substance or pollutant or contaminant at or from :-he Si*- a.  EPA
 also is seeking information relating to the ability of a person
 to pay for or to perform a cleanup of the Site.

  Pursuant to the authority of Sett ion 104 of the Comprehensive
 Environmental Response, Compensation, and Liability Act
 (CERCLA), 42 U.S.C. S 9604, as amended, [and Section 3007 of the
 Resource Conservation and Recovery Act (RCRA), 42 U.S.C. S
 6927,] you are  hereby requested to respond to the Information
 Request set forth in Attachment A, attached hereto.

  Compliance with the Information Request set forth in
Attachment A is mandatory.  Failure to respond fully and
 truthfully to the Information Request within T insert reasonable
       of davs  ^Q respond, soell out m*Hl^<>r and pt»» rp^ber in
           . e.g.. thirty (30)1 days of receipt of this letter,
or adequately to justify such failure to respond, can result in
 enforcement action by EPA pursuant to section 104 (•) of CERCLA,
 as amend**, [and/or Section 3008 of RCRA.]  [Each of these
 statutes/ This  statute] permits EPA to see* the imposition of
penalties of up to twenty-five thousand dollars t $25, 000) for
 each day of continued non-compliance.  Please be further advised
that provision  of false, fictitious, or fraudulent statements or
 representations ^uy subject you to criminal penalties under 18
U.S.C. S 1001 or Section 3008 (d) of RCRA.

  This Informaf .-- request is not subject to the approval
 requirements of the Paperwork Reduction Act of 1980, 44 U.S.C.
 3501, et seq.

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                                                OSWER I 9834.10-la
             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON, D.C. 20460
                             /s     «                          QF
                             2 6  :Q88              SOLI° WASTE AND EMERGENCY RESPONSE
MEMORANDUM

SUBJECT:  Waiver of Headquarters  Approval for Issuance  of  RD/RA
          Special  Notice Letters at the Time of ROD Signature
FROM:     Bruce M.  Diamond,  Director
          Office  of Waste Programs Enforcement/? OS-500)
          Henry  L.  Longest II,  Director ^>.—v»
          Office of Emergency and Remedial^Bteiponse (OS-200)

TO:       Waste  Management Division Directors, Regions I-X
          Regional  Counsels,  Region I-X

     The  Interim Guidance on Notice  Letters, Negotiations,  and
Information  Exchange  (OSWER  Directive  Number,  9834.10,  October
19,  1987)  provides  generally for  the  issuance of RD/RA  special
notice  letters when the  draft FS and proposed plan  are released
to the  public for  comment.   The guidance further  states  that if
the  RD/RA special  notice is issued  later in the  process (i.e.,
when the  ROD  is signed)   the  Regional Administrator  must obtain
prior   written   approval  from  EPA  Headquarters.     Effective
immediately, it  is  no  longer  necessary to  obtain  written approval
from  the Directors of  OERR  and  OWPE  to  issue  special  notice
letters at ROD signature.

     As the  policy  states,  the strongly  preferred option is to
issue:  special  notice when the  proposed  plan is released  for
public  comment in order to begin the  negotiations  process early,
ensure  prompt  initiation  of  remedial design  and remedial action
and initiate any necessary enforcement action if  negotiations are
unsuccessful.  Issuance of special notice  at the  ROD stage should
continue to be the  exception  rather than the rule.

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                               -2-


     Management  of- the negotiations  time  frames remains  a  high
priority and  is  essential to the successful  completion  of RL/RA
negotiations  and  as  such,  it  warrants continued attention  by
management.     This   waiver  does   not  change   the   Regional
Administrator's authority to extend the special notice Moratorium
up  to  30   days  where  justified.    Beyond   that,  requests  .or
Assistant   Administrator  extensions  to  the   special  notice
moratorium  should  continue to be submitted in a  timel}  fashic n.
Special  notice  information  must be  entered   into  CZRCLXS on  a
regular  basis.   OWF2 will  continue  to monitor negotiations  and
provide assistance, as appropriate.

     We  appreciate your cooperation.   If you  have any questions,
please contact Michelle Roddy at FTS 382-7790.

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     **        UNITED STATES ENVIRONMENTAL PROTECTION AGENCV
     *                   /VASrllNGTON. 3.C.  20460
                            OCT 2 I               October 21,1988
                                                  SOUO WASTE ANO EM£BGeMCv

                                      OSWER DIRECTIVE  9831.8
MEMORANDUM
SUBJECT:   Counting State-l^ad Enforcement NPL Sites Toward the
           CERCLA Section 116(•)  Remedial Action Start Mandate
              /.^  J'-X&L
FROM:      J.  Winston Porter
           Assistant Administrator

TO:        Regional Administrators
           Regions I - X

I.   PURPOSE

     The purpose of this memorandum is to outline the criteria
and procedures  for counting State-lead enforcement National
Priorities List (NPL)  sites toward the CERCLA Section 116(e)
remedial action (RA)  start mandate.

     The counting of State-lead enforcement NPL sites is but one
element of an evolving strategy for State participation in the
CERCLA enforcement program.  There are many other important
aspects, including the need for consistent remedies and
coordination  of enforcement activities at Federal-lead and state-
lead sites.

II.  BACKGROUND

     In our efforts to achieve the goal of 175 new RA starts by
October 1989  and an additional 200 by October 1991, it is
appropriate: to  include State-lead enforcement NPL sites where
States) have indicated a willingness and ability to manage site
remediation in  an appropriate manner and within reasonable
tiaefrmMS, as  noted below.
     In implementing this memorandum,  the direction provided in
the December 28,  1987 memorandum "OSWER Strategy for Management
Oversight of the  CERCLA Remedial Action Start Mandate" (OSWER
Directive 9355.0-24)  also applies to sites classified as  State-
"".cad enforcement.   Of particular note i* the application  of the
several key elements of Section 116(e)  which were discussed in
that guidance.  This includes whether a RA is "substantial *nd
continuous" and whether the particular RA start is "in addition
to those facilities on which some remedial action has comxenc?
prior to enactment  of SARA."

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                                                     9831.8
       The following criteria must be met before counting state-
lead enforcement sites toward the goals.  Along with each
criterion, some clarification is provided to assist the Regional
offices in determining whether the criterion has been met.

III. CRITERIA

1.   The site ia on the National Priorities List fNPL).

     CERCIA specifies "Facilities on the National Priorities
List.1*  This interpretation does not include proposed NPL sites.

2.   The site is covered bv agreement between EPA and the State.

     NPL sites to be designated as State-lead enforcement from
the date of this memorandum forward must be covered under a
cooperative agreement, Superfund Memorandum of Agreement (SMOA)
or other EPA-State enforcement agreement in order to be counted
toward the Section 116(e) mandate.   (Note that the proposed
revisions to the NCP may require States to enter into a formal
agreement with EPA to become the lead agency for enforcement
action at an NPL site or to seek EPA concurrence on the remedy at
an NPL site.)

     For cites designated as State-lead enforcement prior to this
memorandum, the Region has the discretion to decide whether an
agreement is necessary prior to issuing a finding on the
consistency of the remedy with CERCIA cleanup standards.  If a
written agreement is not required for sites designated prior to
this memorandum, the Region must still demonstrate that it worked
closely with the stats to ensure that the criteria set forth in
this guidance have been complied with and that remedial action
has commenced.

3.   The remedial action to be performed is consistent with
     the cleanup standards of Section 121 of CERCIA.

     This criterion requires the Region to review the available
documentation (such as the Remedial  Investigation/Feasibility
Study (RI/FS), Record of Decision (ROD), State equivalent to the
ROD or a consent decree) and any sits work activity and determine
if they collectively meet Section 121 cleanup standards, as
provided below.

     First, the cleanup action vast  be a remedial action and not
simply a removal.  (Under current guidance, a RA represents one
or more operable units of the remedy leading to final cleanup.
See, OSWER Directive 9355.0-24.)  Second, in reviewing the
State's documentation that the cleanup is consistent with Section
121, the Region may encounter past Stats decisions on remedies
that are documented differently from what we may expect as
documentation in the future.  If the Region finds that these

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                                                      9831.8
remedies and responses are consistent with Section  121, we will
"grandfather" the documentation of these sites as set  forth  in
the paragraphs below.

     Until the National Contingency Plan (NCP^ is proposed,  the
Regions should review available documents for consistency with
Section 121 of CERCLA.  The key factors are whether the work is
consistent with Section 121 cleanup standards and whether it will
lead to the final remedy.  Where the RI/FS, the ROD or other
State decision document (such as a State administrative order or
consent decree) are not self-explanatory, it may be necessary for
the State to provide written clarification of the remedy.

     for rBm.ftd.ial actions baaed upon decisions made after the NCP
revisions are proposed. Regions must require a ROD  for review
using CERCLA Section 121 and the proposed NCP as the basis for
evaluating the cleanup standards prescribed in the  State
documentation.

     Decisions on remedies made pre-SARA with the contract award
for the RA occurring post-SARA will be eligible for the Section
116(e) RA start mandate.  If the RZ/PS, ROD or other state
decision document was signed pre-SARA but the RA did not commence
until post-SARA, the RA need not strictly adhere to the
requirements of Section 121 to be included in the RA start
mandate.  -However, the cleanup must comply with the NCP cleanup
standards in effect at the time, and all other criteria in this
guidance must be met.  If the RA commenced pre-SARA, the site
will not be counted toward the RA mandate.

4.   The Regional Administrator nruat document the finding
     that the State ROD for equivalenti nee1^« (TRBCIA cleanup
     standards.

     The Regional Administrator must prepare and sign  a formal
written document finding that the State's remedy selection  (e.g.,
ROD) is consistent with Section 121 cleanup standards. The
Regional Administrator may sign the ROD itself or issue a
separata latter.  Such a finding must explicitly reserve EPA's
right to conduct the Section 121(c) five year review and further
reserve IPA's right to take enforcement actions under  Sections
106 and 107 against the PRPs to assure that the remedy as well  as
any necessary additional future work are undertaken.   This  factor
is important because PRPs may attempt, improperly,  to  argue  that
the Regional Administrator's signature bars EPA enforcement  and
also binds the Region, for all time, to only the remedy
explicitly noted in the decision document and that  no  additional
work can be required.

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                                                    9831.8
     In making the finding, the Regional Administrator may
delineate additional requirements necessary to ensure consistency
with Section  121.  In order for EPA to count the RA, the state
must accept such conditions.  It the State does not accept such
conditions, the Regional Administrator may choose not to make
this finding; in which case the site would not be counted toward
the RA mandate and no argument could be made that EPA would be
bound by the  State decision on site remediation.  In such a case,
the EPA position must be *et out in a written communication with
the State.

     For a pre-SARA ROD where the RA commences after the
enactment of  SARA, the Regional Administrator must find that the
RA meets the  NCP cleanup standards in place at the time the ROD
was signed in order for the site to be counted under CERCLA
Section 116 (e) .  A formal document is needed for this finding and
the above reservations of EPA rights must also be made.
5.   The State and Potentially R«aoon«j.bl« Parties
     have entered into an enforceable agreement  for conduct
     ot the remedial action or the State has  issued an
                 unilateral order that fche PRPa.  arm
               with.
     This criterion reflects EPA's belief that State  settlements
at NFL sites should be concluded by entering  into  an  enforceable
agreement, consent order or consent decree, or some other
comparable enforceable •document requiring the PRPs to conduct  the
RA in accordance with CERCLA cleanup standards.  An enforceable
unilateral administrative order that is being complied with  may
also be used to satisfy this criterion.
6 .   The State has certified with e flOfflmnti or  a  qualified
     State or Federal official has ftoe\tqeni'fceid * that
     aiibetanti.a.1 and continuous phyeieal  on— site  remedial
     action has commenced at the site.

     Ac noted in Section II, abc~e, this  criterion  utilizes  the
same interpretation of the key elements of  Section  116 (e)  as
outlined in OSUXR's Directive 9355.0-24.  The Region would
confirm that the RA commenced as defined  in the OSWZR directive
referenced above.   (As noted in the SARA  legislative history,
"[i]solated, preliminary removal or remedial action to  set the
groundwork for final cleanup which may not  be commenced
immediately do not satisfy the requirements of this provision".
H.R. Rep. 253, 99th Cong. , 1st Sess.  12-13  [1985] [pt. 5].)

IV. CONCLUSION

     The inclusion of State-lead RA starts  is an  important ispect
of our strategy to meet the CERCLA Section  116 (e) mandate.  I
appreciate the efforts you have made  and  continue to make
                                                            n

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                                                    9831.8
striving to meet this mandate.  If you hav« any question*
regarding thi» policy, please contact Johanna Hunter of the
Office of Waste Programs Enforcement at FTS (202) 475-9809 or
mail cod« OS-510.


cc:  Directors, Wast* Management Division,
     Regions I, IV, V, VII, vill
     Director, Emergency and Remedial Response Division,
     Region II
     Directors, Hazardous Waste Management Division,
     Regions III, VI
     Director, Toxic and Waste Management Division,
     Region IX
     Director, Hazardous Waste Division,
     Region X
     CERCIA Enforcement Branch Chiefs, Regions I - X
     CERCIA Enforcement Section Chiefs, Regions I - X
     Regional Counsels, Regions I - X

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                                                          Attachment
         BEFORE THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                 Address:
IN THE MATTER OF:                 I  No. 	
                                  I
                                    SUBPOENA DUCES TFCUM AND
                                    SUBPOENA AD TESTTTICANDUM
TO:	
	, RESPONDENT(S):
YOU ARE HEREBY COMMANDED, pursuant to Title 42, United States Code,
section 9622(e)(3)(B) [Comprehensive Environmental Response,
Compensation, and Liability Act section 122(«)(3)(B)] TO APPEAR IN
PERSON at the following place and tine.
        TIME AND DATE:	
        PLACE:         	
YOU ARE COMMANDED FURTHER TO TESTIFY THEN AND THERE under oath and
GIVE TRUTHFUL ANSWERS to all lawful inquiries and questions then
and there put to you on behalf of the United States Environmental
Protection Agency, and TO REMAIN IN ATTENDANCE until expressly
excused by the attorney(s) conducting the proceeding for the EPA.
YOU ARE COMMANDED I'UKTHEK TO BRING WITH YOU at the time and place
stated above, and then and there produce for inspection and/or
copying* ttooee items identified and described on the ATTACHED
PAGE(S).
NONCOMPLIANCE WITH THIS SUBPOENA MAY SUBJECT YOU TO A CIVIL
ENFORCEMENT ACTION.
Issued at [City, State] this 	day of 	, 198_.
Attorney Contact:           .		
[Asst. Regional Counsel]         Regional Administrator, EPA Region
[Address and Telephone]

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  four response to this Information Request should be mailed  to:


     U.S. Environmental Protection Agency
     [Name of Program Person]
     [Section Name]
     [Address]

  Due to the legal ramifications of your failure to respond
properly, EPA strongly encourages you to give this matter your
immediate attention and to respond to this Information Request
within the time specified above.  If you have any legal or
technical questions relating to this Information Request, you
may consult with the EPA prior to the time specified above.
Please direct legal questions to ruame of QRC Person! of the
Office of Regional Counsel at (XXX) [XXX-XXXX].  Technical
questions should be directed to rMame of Program Person!, at  the
above address, or at (XXX) [XXX-XXXX].

  ThanJc you for your cooperation in this matter.

  Sincerely,


  [Name]
  Waste Management Division

Attachment

cc.  rcase a-fctnmftY naTMft1 f Office of Regional Counsel
    fcasc prP<7rm person namai, Waste Management Diviri~
    [Name], Director, Office of Waste Programs  Enforceme;.,:
    [Name], Director, Office of Emergency and Remedial Response
    TState proora" «n^a.ff parson pamo. aa appropriate 1
    fSt.at.» Assistant Attorney General, aa appropriate!

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                         [NAME OF SITE]             ATTACHMENT A


      [Insert number, e.g., FIRST] INFORMATION REQUEST

                          Instructions
  1.  Please provide a separate narrative response to each and
every Question and subpa.t of a Question set forta in tnis
Information Request.

  2.  Precede each answer with the number of the Question to
which it corresponds.

  3.  If information or documents not known or not available to
you as of the date of submission of a response to this
Information Request should later become known or available to
you, you must supplement your response to EPA.  Moreover, should
you find, at any time after the submission of your response that
any portion of the submitted information is false or
misrepresents the truth, you must notify EPA of this fact as
soon as possible and provide EPA with a corrected response.

  4.  For each document produced in response to this information
Request indicate on the document, or in some other reasonable
manner, the number of the Question to which it responds.

  5.  The information requested herein must be provided even
though the Respondent may contend that it includes possibly
confidential information or trade secrets.  You may, if you
desire, assert a confidentiality claim covering part or all of
the information requested, pursuant to Sections l04(e)(7)(E) and
(F)  of CERCLA, as amended by SARA, 42 D.S.C. SS 9604(e)(7)(E)
and (F), Section 3007(b) of RCRA, 42 U.S.C. 6927(b), and 40
C.F.R. 2.203(b), by attaching to such information at the time it
is submitted, a cover sheet, stamped or typed legend, or other
suitable form of notice employing language such as "trade
secret," or "proprietary" or "company confidential."
Information covered by such a claim will be disclosed by EPA
only to tlM extent, and only by means of the procedures set
forth in statutes and regulation set forth above,  if no such
claim accompanies the • information when it is received by EPA, it
may be mad* available co the public by EPA without further
notice to you.  You should read the above cited regulations
carefully before asserting a business confidentiality claim,
since certain categories of information are not properly the
subject of such a claim.

                           Definitions

The following definitions shall apply to the following words as
they appear in this Attachment A:

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   11.  The term "identify" means, with respect to a natural
person, to set forth the person's name, present or last known
business address and business telephone number, present or last
known home address and home telephone number, and present or
last known job title, position.or business.

   12.  The term "identify" means, with respect to a corporation
partnership, business trust or other association or business
entity (including a sole proprietorship) to set forth its full
name, address, legal form  (e.g. corporation, partnership, etc.)
organization, if any, and a brief description of its business.

   13.  The term "identify" means, with respect to a document, to
provide its customary business description, its date, its number
if any (invoice or purchase order number), the identity of the
author, addresser, addressee and/or recipient, and the substance
or the subject matter.

   14.  The term "release" has the same definition as that
contained in Section 101(22) of CERCLA, 42 U.S.C. $ 9601(22),
and includes any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping,
or disposing into the environment, including the abandonment or
discharging of barrels, containers, and other closed receptacles
containing any hazardous substance or pollutant or contaminant.

   15.  The terms "document11 and "documents11 shall mean any
object that records, stores, or presents information, and
includes writings of any kind, formal or informal, whether or
not wholly or partially in handwriting, including by way of
illustration and not by way of limitation, any invoice,
manifest, bill of lading, receipt, endorsement, check, bank
draft, cancelled check, deposit slip, withdrawal slip,    ler,
correspondence, record book, minutes, memorandum of telephone
and other conversations including meetings, agreements and the
like, diary, calendar, desk pad, scrapbook, notebook, bulletin,
circular, fora, pamphlet, statement, journal, postcard, letter,
telegram, telex, report, notice, message, analysis, comparison,
graph, chart, interoffice or intraoffice communications,
photostat or other copy of any documents, microfilm or other
film record, any photograph, sound recording on any type of
device, any punch card, disc or disc pack; any tape or other
type of memory generally associated with computers and data
processing (together with the programming instructions and other
written material necessary to use such punch card, disc, or disc
pack, tape or other type of memory and together with printouts
of such punch card, disc, or disc pack, tape or other type of
memory); and (a) every copy of each document which is not an
exact duplicate of a document which is produced,  (b) every copy
which has any writing, figure or notation, annotation or the
like on it, (c) drafts, (d) attachments to or enclosures with

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  1.  The term "you" or "Respondent* shall mean the addressee of
this Request, the addressee's officers, managers, employees,
contractors, trustees, partners, successors, assigns, anrl
agents.

  2.  The term "person" shall have the same definition as in
Section 101(21) of CERCLA: an individual, firm, corporation,
association, partnership, consortium, joint venture, commercial
entity, United States Government, Stcte, municipality,
commission, political subdivision of i State, or any interstate
body.

  3.  The terms "the Site" or "the facility" shall mean and
include the property on or about the [Name of
owner(s)/operator(s)] property that is bounded by [roads,
streams, etc.] in [city or town and state], and is.also known as
[common name, if any, e.g., the PSC Resources Site].

  4.  The tern "hazardous substance" shall have the same
definition as that contained in Section 101(14) of CERCLA and
includes any mixtures of such hazardous substances with any
other substances, including petroleum products.

  5.  The term "pollutant or contaminant," shall have the same
definition as that contained in Section 101(33) of CERCLA, and
includes any mixtures of such pollutants and contaminants with
any other'substances.  Petroleum products mixed with pollutants
and contaminants are also included in this definition.

  6.  The term "hazardous waste" shall have the same definition
as that contained in Section 1004(5) of RCRA.

  7.  The term "solid waste" shall have the same definition as
that contained in Section 1004(27) of RCRA.

  8.  The term "materials" shall mean all substances that have
been generated, treated, stored, or disposed of or otherwise
handled at or transported to the Site, including but not limited
to all hazardous substances, pollutants and contaminants,
hazardous wastes and solid wastes, as defined above and, r(list
specific flfra^ieala of concern at Sttai.l

  9.  The term "hazardous material* sha1! mean all hazardous
substances, pollutants or contaminants, and hazardous wastes, as
defined above.

  10.  The term "non-hazardous material" shall mean all material
as defined above, excluding hazardous substances, pollutants  arl
contaminants, and hazardous waste.

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any document and  (e) every document referred to in any other
document.

  16.  The terms  "and" and "or" shall be construed either
disjunctively or  conjunctively as necessary to bring within the
scope of this Information Request any information which might
otherwise be construed to be outside its scope.

  17.  The term "arrangement" means every separate contract or
other agreement between two or more persons.

  18.  The terms  "transaction" or "transact" mean any sale,
transfer, giving, delivery, change in ownership, or change in
possession.

  19.  words in the masculine shall be construed in the
feminine, and vice versa, and words in the singular shall be
construed in the plural, and vice versa, where appropriate in
the context of a particular question or questions.

  20.  All terms not defined herein shall have their ordinary
meaning, unless such terms are defined in CZRCLA, RCRA, 40 CFR
Part 300 or 40 CFR Parts 260 - 280, in which case t-.h-J s*atutory
or regulatory definitions shall apply.

                [FINANCIAL BACKGROUND DEFINITIONS]

  21.  The term "property interest" means any interest in
property including but not limited to, any ownership interest,
including an easement, any interest in the rental of property,
any interest in a corporation that owns or rents or owned or
rented property, and any interest as either the trustee or
beneficiary of a trust that owns or rents, or owned or rented
property.

  22.  The term "asset" shall include the following: real
estate, buildings or other improvements to real estate,
equipment, vehicles, furniture, inventory, supplies, customer
lists, accounts receivable, interest in insurance policies,
interests? in partnerships, corporations and unincorporated
companies',, securities, patents, stocks, bonds, and other
tangible as veil  as intangible property.

                           QUESTIONS

                     [QUESTIONS FOR ALL PRPS]

  *.  Identify the person(s) answering these Questions on behalf
of Respondent.

  t.  For each and every Question contained herein,  identify  all
persons consulted in the preparation of the answer.

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  t.  For each and every Question contained herein, identify all
documents consulted, examined, or referred to in the preparation
of the answer or that contain information responsive to the
Question and provide true and accurate copies of all such
documents .

  *.  Li.st th». EPA RCRA identification Numbers of the
Respondent, i/ any, and identify the corresponding units,
facilities or vessels assigned these numbers.

  t.  Describe the acts or omissions of any persons, other than
your employees, agents or those persons with whom you had a
contractual relationship, that may have caused the release or
threat of release of hazardous substances at the Site.

    In addition:

    a.  Describe all precautions that you took against
foreseeable acts or omissions of any such third parties
[including, but not limited to insert namaa tf known. e.g. . of
prior owners, ate. 1 and the consequences that could foreseeably
result from such acts or omissions.

    b.  Describe the care you exercised with respect to the
hazardous substances found at the Site.

  #.  Identify all persons, including Respondent's employees,
who have loiowiedge, information or documents about the
generation, use, purchase, treatment, storage, disposal or other
handling of materials at or transportation of materials to the
Site.

  *.  Describe all arrangements that Respondent may have or may
have had with each of the following persons: rnamaa of persons
          to ba iiwolvad vitih the Site, e.g. . PRPal .
  #.  Tor each and every current owner, operator, lessor or
       of any portion of the Site:
    a.  Identify such person and the nature of their operation
at the Sit*.

    b.  Describe the portion of the Site owned, operated, leased
by each such person and state  che dates during which each
portion was owned, o^rated or leased.

    c.  Provide copies of all  documents evidencing or relating
to such ownership, operation or lease, including but not limited
to purchase and sale agreements, deeds, leases, etc.

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                                    8

  *.  Describe the physical characteristics of the site
including but not limited to the following:

    a.  Surface structures  (s.g., buildings, tanks, etc.).

    b.  Ground water wells, including drilling logs.

    c.  Past and present storm water drainage system, sanitary
sewer system, includi ig septic tanJc(s) and subsurface disposal
field(s).

    d.  Any and all additions, demolitions or changes of any
kind to physical structures on, under or about the Site, or to
the property itself (e.g., excavation work) and state the dates
on which such changes occurred.

  t.  For each and every prior owner, operator, lessor or lessee
of any portion of the Site known to you:

    a.  Identify such person and the nature of their operation
at the Site.

    b.  Describe the portion of the Site owned, operated, leased
by each such person and state the dates during which each
portion was owned, operated or leased.

    c.  Provide copies of all documents evidencing or relating
to such ownership, operation or lease, including but not limited
to purchase and sale agreements, deeds, leases, etc.

    d.  Provide all evidence that hazardous materials were
released or threatened to be released at the Site during the
period that they owned the Site.

  #.  Provide all existing technical or analytical information
about the Site,. including but not limited to data and documents
related to soil, water (ground and surface), geology,
geohydrology, or air quality on and about the Site, rand list.
sp^eifif* Anfrnman-ts, vou want! .

  *.  Do you know or have reason to know of any on-going or
planned investigations of the soil, water  (ground or surface),
geology, hydrogeology or air quality on or about the site?  if
so:

    a.  Describe the nature and scope of these investigations;

    b.  Identify the persons who are undertaking or will
undertake these  v/. stigations;

    c.  Describe the purpose of the investigations;

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    d.  State the dates of such investigations;

    «>.  Describe as precisely as possible the locations at the
Site where such investigations are taking or will taJce place.

  #.  Identify all persons, including you, who may have given,
sold, transferred, or delivered any material or item, including
      materials or items of c jncern. e.g. . TCE or lafr gflcKS ] to
      pRPal.  in addition:
    a.  State the dates on which each such person may have
given, sold, transferred, or delivered such material;

    b.  Describe the materials or items that may have been
given, sold, transferred, or delivered, including type of
material, quantity, chemical content, physical state, quantity
by volume and weight, and other characteristics.

    c.  Describe the intended purpose of each sale, transfer, or
delivery of materials.

    d.  Describe the source of or process that produced the
materials that may have been sold, transferred, or delivered.

    e.  Describe, all efforts taken by such persons to determine
what would actually be done .with the materials that may have
been sold, transferred or delivered after such materials had
been sold, transferred or delivered.

                  [OWNER/OPERATOR QUESTIONS]

  *.  Did you acquire any portion of the Site(s) after the
disposal or placement of the hazardous substances on, in, or at
the Site? Describe all of the facts on which you base the answer
to this question.

  t.  At the time you acquired the parcels of the site(c), did
you know or have reason to know that any hazardous substance was
disposed of on, in, or at the facility?  Describe all
investigations of the Sits you undertook prior to acquiring the
Site and all of the facts on which you base the answer to this
question.

  *.  Did you acquire the facility by inheritance or bequest?
Describe all facts on which you base the a:iswer to this
question.

  #.  Describe all leaks, spills or releases or threats of
releases of any kind into the environment of any hazardous
materials that have occurred or may occur at or from the Site,
including but not limited to:

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                                    10

    a.  Wfisaa such releases occurred or may occur.

    b.  How the releases occurred or may occur.

    c.  What hazardous materials were released or may be
released.

    d.  What amount of each such hazardous material was so
released.

    e.  Where such releases occurred or may occur.

    f.  Any and all activities undertaken in response to each
such release or threatened release.

    g.  Any and all investigations of the circumstances, nature,
extent or location of each such release or threatened release
including, the results of any soil, water (ground and surface),
or air testing that was undertaken.

    h.  All persons with information relating to subparts a.
through g. of this Question.

  *.  If any release or threatened release identified in
response to Question [*.], above, occurred into any subsurface
disposal.system or floor drain inside or under any buildings
located on the Site, further identify:

     a.  Where precisely the disposal system or floor drains are
and were located.

    b.  When the disposal system or floor drains were installed.

    c.  Whether the disposal system or floor drains were
connected to pipes, and if so, the purpose of such pipes.

    d.  Where such pipes are or were located.

    •.  NtMn such pipes vere installed.

    f.  HOW and when such pipes were replaced, repaired, or
otherwise changed.

  *  Identify all parsons, including you, who may have
manufactured, given, sold, transferred, delivered, or otherwise
handled, [describe what was found at the site, e.g., barrels
marXed "Dupont" or TCE, etc.].  In addition:

    a.  Describe in complete detail all arrangements pursuant  to
which such persons may have so handled such  items or materials.

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                                    11

    b.  State the dates on whicn such persons may nave handled
each sucti item or material;

    c.  State the amounts of such items or materials that may
have been so handled on each such date;

    d.  Identify the persons to whom such items or materials may
have been given, sold, transferred, or delivered;

    e.  Describe the nature, including the chemical content,
characteristics, physical state (e.g., solid, liquid) and
quantity (volume and weight) of all [describe what was found at
the Site, e.g., "lab packs*] and describe all tests, analyses,
and results of such tests and analyses concerning such items or
materials.

    f.  State whether any of the materials identified in subpart
e. exhibit any of the characteristics of a hazardous waste
identified in 40 CFR $261 Subpart C.

    g.  State whether any of the materials identified in subpart
e. are listed in 40. CFR S281 Subpart O.

    h.  [Insert additional specialized questions to determine
whether any hazardous substances at the Site are RCSA hazardous
wastes.]

    i.  Describe the nature of the operations that were the
source of the [list what was found at the Site, e.g., lab
packs].

    j.  Provide copies of all documents (including but not
limited to invoices, receipts, manifests, shipping papers,
customer lists and contracts) which may reflect, show or
evidence the giving, sale, transfer or delivery, or other
arrangements under which the giving, sale, transfer, or delivery
of any materials to the Site took place.

    Jc.  Describe the type, condition, number, and all markings
on the containers in which the materials were contained when
they were> handled.

             [QUESTIONS FOR POTENTIAL TRANSPORl'&iLaj

  t.  Identify all persons, including you, who may have
transported materials to the Site.  Such persons will
hereinafter be referred to as "Transporters."

  *.  For each '^-.h Transporter, state whether it accepted
materials including municipal solid waste from a municipality or
arranged with a municipality by contract or otherwise to accept
materials from any source.  If so, describe the nature, quantity

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                                    12

 and  source of all materials accepted  and transported to the
 Site.

  f.  for each  such Transporter,  further identify:

     a.  In general terms, the nature  and quantity of all
non-hazardous materials transported to the Site.

     b.  The nature of the hazardous materials transported to the
Site including  the chemical content,  characteristics, and
physical state  (e.g., solid, liquid).

     c.  Whether any of the hazardous  materials  identified in
subpart b exhibit any of the characteristics of a hazardous
waste identified in 40 CFR S261 subpart C.

     d.  Whether any of the hazardous  materials  identified in
subpart b are listed in 40 CFR 5261 Subpart D.

     e.  [Insert additional specialized questions to determine
whether any hazardous substances  at the Site are RCRA hazardous
wastes.]

     f.  The persons from whom the Transporter accepted hazardous
materials including, but not limited  to, [insert potential
generators]

    g.  Every date on which the Transporter transported the
hazardous materials to the site.

    h.  The owners of the hazardous materials that were accepted
for transportation by the Transporter.

     i.  The quantity (weight and  volume) of hazardous materials
brought by the  Transporter to the Site.

     j.  All tests, analyses, analytical results and manifests
concerning each hazardous material accepted for transportation
to the Sit*.

    k.  Hie precise locations at  the  Site to which each
hazardous' material was. transported.

     1.  Who selected the location to  which the  Transporter would
take each hazardous material.

    m.  Who selected the Site as  the  location to which the
Transporter would take each hazardous material.

    n.  The amount paid to each Transporter for accepting the
hazardous materials for transportation, the method of payment,
and  the identity of the persons who paid each Transporter.

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                                    13
    o.  wnere the persons identified in g., above, intended to
have such hazardous materials transported and all documents of
other information (oral or writtan) evidencing their intent.

    p.  All locations through which such hazardous materials
were trans-shipped, or were stored or held, prior to their final
treatment or disposal.

    q.  What activities transpired with regard to the hazardous
materials after they were transported to the Site (e.g.
treatment, storage or disposal).

    r.  The final disposition of each of the hazardous materials
brought to the Site.

    s.  The measures taken by the persons who gave the hazardous
materials to the Transporters to determine what the Transporters
would actually do with the hazardous materials they accepted.

    t.  The type, number and condition of containers in which
the hazardous materials were contained when they were accepted
by the Transporters and when they were left at the Site and any
other labels, numbers or other markings on the containers.

              [QUESTIONS FOR POTENTIAL  GENERATORS]

  *.  Identify all persons, including you, who may have:

    a.  disposed of or treated materials at the Site;

    b.  arranged for the disposal or treatment of materials at
the Site; or

    c.  arranged for the transportation of materials to the site
(either directly or through transhipment points) for disposal or
treatment.  Such persons will hereinafter be referred to as
"generators.•

  #.  Forrc«cli and every instance in which a generator performed
any of tHa actions specified in parts a. - c. of the previous
questions

    a.  Identify the generator;

    b.  Identify the persons with whom the generator made such
arrangements including, but not limited to [insert list of
suspected transporters].

    c.  Identify all persons who may have directly or  indirectly
transported or otherwise brought any materials,  [including
municipal solid waste,] to the Site.

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                                    14
    d.  State every date on which each Generator made such
arrangements.

    e.  Describe the nature,  including the chemical content,
characteristics, physical state  (e.g., solid, liquid) and
quantity  (volume and weight)  of  all hazardous tutorials involved
in each such arrangement.

    f.  State whether any of  the hazardous mattrials identified
in subpart e. above exhibit any  of the characteristics of a
hazardous waste identified in 40 CFR $261 Subpart C.

    g.  State whether any of  the hazardous materials identified
in subpart e. are listed in 40 CFR $261 Subpart 0.

    h.  [Insert additional specialized questions to determine
whether any hazardous substances at the Site are RCRA hazardous
wastes.]

    i.  In general terms, describe the nature and quantity of  .
the non-hazardous materials involved in each such arrangement.

    j.  [Describe the nature  and quantity of any mu.iicipa'1 solid
waste involved in any such arrangement.}

    k.  Identify the owner of the -hazardous materials involved
in each such arrangement.

    1.  Describe all tests, analyses, analytical results or
manifests concerning each hazardous material involved in such
transactions.

    at.  Describe as precisely as possible any and all of the
locations at which each hazardous material involved in such
transactions actually was disposed or treated.

    n.  Identify the persons  who selected the location to which
the hazardous materials were  to  be disposed or treated.

    o.  Identify who selected the site as the location at which
hazardous materials were to be disposed or tre?rc4

    p.  State the amount paid in connection with each such
arrangement, the method of payment, and the identity of the
persons involved in each arrangement.

    q.  Describe where the persons identified in subparts i. and
m. of tnis Question intended  to  have the hazardous materials
involved in each arrangement  treated or disposed and all
documents or otner information  (written or oral) evidencing
their intent.

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                                    IS
    r.  Describe all intermediate sites to which the hazardous
materials involved in each arrangement were f.rans-shipped, or at
which they were stored or held, any time prior to final
treatment or disposal.

    s.  Describe what was done to the hazardous materials once
they were brought to the Site.

    t.  Describe the final disposition of each cf the hazardous
material involved in each arrangement.

    u.  Describe the measures taken by the generator to
determine how and where treatment or disposal of the hazardous
materials involved in each arrangement would actually take
place.

    v.  Describe type, condition and number of containers in
which the hazardous materials were contained when they were
disposed, treated, or transported for disposal or treatment and
describe any labels, numbers or other markings on the
containers.

  [FINANCIAL BACKGROUND QUESTIONS FOR ALL  PRPS WHERE FINANCIAL
VIABILITY IS OR WILL BE AT ISSUE AND THE AGENCY IS UNABLE TO
ASSESS FINANCIAL VIABILITY EFFECTIVELY THROUGH REVIEW OF
PUBLICLY AVAILABLE DATA]

  #.  Provide a list of all property and casualty insurance
policies (e.g. Comprehensive General Liability, Environmental
Impairment Liability and Automobile Liability policies) [and
Directors and Officers policies] for the period from [d?-9
disposal site first became disposal site] through the p   ent.
Specify the insurer, policy, effective dates, and state r=sr
occurrence policy limits for each policy.  Copies of policies
may be provided in lieu of a narrative response.

  #.  Provide copies of all financial documents, including
income tax return* sent by you to the federal Internal Revenue
Service and [the state IRS] in the last five years.

  *.  Provide copies of financial statements, reports, or
projections prepared by, for or on behalf of the Respondent for
the past five years, whether audited or unaudited,  including,
but not limited to, all those filed with .the Securities and
Exchange commission, State agencies, and all financial
institutions such as banks.

     [FINANCIAL BACKGROUND QUESTIONS FOR ALL CORPORATE PRPS]

  *.  Identify the parent corporation and all  subsidiaries of
Respondent.

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                                    16

  t.  Identify all persons who may be responsible for the
liabilities of Respondent arising froa or relating to the
release or threatened release of hazardous substances at the
Site, including but not limited to successors and individuals.

  ft.  Provide a copy of the most current Articles of
Incorporation and By-laws of Respondent.

  #.  Identify the officers, managers and majority shareholders
of Respondent and the nature of their management duties and
amount of shares held, respectively.

  t.  [For additional PRP questions, see ORC case attorney.]

      [FINANCIAL BACKGROUND QUESTIONS FOR PARTNERSHIP PRPS]

  ft.  Identify all partners comprising [Name of Partnership] and
the nature of their partnership interests.

  ft.  [For additional Partnership PRP questions, see ORC case
attorney.]

        [FINANCIAL BACKGROUND QUESTIONS FOR TRUST PRPS]

  ft.  Identify all trustees and all beneficiaries of the [Name
of Trust1.

  ft.  [For additional Trust PRP questions see ORC case
attorney.1

                 [CONCLUDING QUESTIONS FOR ALL RPS]

  ft.  If you have reason to believe that there may be persons
able to provide a more detailed or complete response to any
Question contained herein or who may be able to provide
additional responsive documents, identify such persons and the
additional information or documents that they may have.

  t.  For each and every Question contained herein, if
information or documents responsive to this information Request
are not in your possession, custody or control, then identify
the person* froa whom such information or documents may be
obtained.

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             UNITED STATf S ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON. D.C. 20460
                            NOV  3  !SS5
                                                          OFFICE OF
                                                  SOLID WASTE AND EMERGENCY MS'ONSE
                                                 OSWER DIRECTIVE
                                                 NO.  9836. 0-1A
SUBJECT:  Chapter 6 of±he Community Relation*  Handbook
             /•  /2cC
FROM:     J. WlnSldn porter
          Assistant Administrator

TO:       Regional Administrators
          Regions I-X


     When the revised version  of CPTOiVr1-'tv Relations in
Superf und t  A Handbook want to print this summer,  Chapter 6 was
not yet in final form.   This Chapter,  "Community Relations during
Enforcement Activities and Development of the Administrative
Record", is attached in  interim final  form.   Please insert it
into the Handbook in lieu of the prior version  (August, 1985) .

     The Chapter deserves vide distribution  to  the technical and
enforcement branches, Office of Regional Counsel,  and Office of
Public/External. Affairs, as well as to States.   Chapter 6
stresses the importance  of the team approach to managing
community relations at enforcement-lead sites,  and discusses the
concepts of confidentiality in negotiations, public participation
requirements under SARA, and community relations coordinator
responsibilities regarding the administrative record.

Attachment

cc:  Bruce Diamond, OWPE
     Henry Longest, OERR
     Elaine Stanley, OWPE
     Lloyd Guerci, OWPE
     Russel Wyer, OERR
     Lisa Friedman, OGC
     Glenn Unterberger,  OECM
     Nancy Firestone, DOJ
     Regional Counsels,  Regions I-X
     Waste Management Division Directors, Regions  I-X
     Regional Community -Relations  Coordinators

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                    OSWER DIRECTIVE 9836.0-1A
                            CHAPTER 6
        COMMUNITY RELATIONS DURING ENFORCEMENT ACTIVITIES
           AND DEVELOPMENT OF THE ADMINISTRATIVE RECORD


6.1   BACKGROUND AND INTRODUCTION

6.2   APPLICABILITY

6.3   OVERVIEW OF THE CERCLA ENFORCEMENT PROGRAM

6.4   COMMUNITY RELATIONS RELATED TO ENFORCEMENT ACTIVITIES AND
      ADMINISTRATIVE RECORDS

   6.4.A   Planning Community Interviews and
           Developing Community Relations Plans

           1. Community Interviews
           2. Community Relations Plans (CRPs)
           3. Potentially Responsible Party (PRP) Involvement

   6.4.B   Enforcement Activities and Community Relations at
           Remedial Sites

           1. Introduction
           2. Notice to PRP*
           3. Negotiations
           4. Community Relations Following an RI/FS Order
           5. Public Notice and Comment on Consent Decrees for
              RD/RA
           6. Community Relations During PRP Remediation
           7. Technical Discussions

   6.4.C   Community Relations During Removal. Actions

   6.4.D   Community Relations During Specific Enforcement
           Actions and Settlements

           1. Consent Decrees, fit **"i»i« and Cost Recovery
           2. Injunctive Litigation
           3• Cost Recovery
           4. Interaction with RCRA and other applicable Federal
              and state laws

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                   OSWER DIRECTIVE 9836.0-1A

   6.4.E   The Administrative Record as Part of Community
           Relations

           1.  Overview
           2.  Purpose of the Administrative Record
           3.  Community Relations Coordinator
               Responsibilities for the Administrative Record
           4.  Additional Community Relations Coordinator
               Responsibilities
           5,  Relationship Between the Administrative Record
               and Information Repositories

6.5   Appendix:  Environmental Fact Sheet, "The Enforcement
              Process:  How It Works"
                                 ii

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                      OSWER DIRECTIVE 9836.0-1A

          COMMUNITY RELATIONS DURING ENFORCEMENT ACTIVITIES AND
                   DEVELOPMENT OP THE ADMINISTRATIVE RECORD*


6.1  BACKGROUND AND INTRODUCTION

     The Comprehensive Environmental Response, Compensation and
Liability Act  (CERCLA) as amended, provide* the U.S.
Environmental  Protection Agency  (EPA) with t le authorit-.y to
respond directly or to compel potentially responsible parties
(PRPs) to respond to releases or threatened releases of hazardous
substances, pollutants or contaminants.  CERCLA created two
complementary  programs aimed at achieving this goal.

     Under the first program a trust fund, Known as the
Superfund, may be available for site remediation when no viable
PRPs are found or when PRPs fail to taJce necessary response
actions.  PRPs are defined as parties identified as having owned
or operated hazardous substance sites, or who transported or
arranged for disposal or treatment of hazardous substances,
pollutants or  contaminants at such sites.  The second program
provides EPA with the authority to negotiate settlements, to
issue orders to PRPs directing them to take necessary response
actions, or to sue PRPs to repay the costs of such actions when
the trust fund has been used for these purposes.  The actions EPA
takes to reach settlement or to compel responsible parties to pay
for or undertake the remediation of sites are referred to as the
Superfund enforcement process.

     This chapter includes an.overview of the CERCLA enforcement
program, and.a discussion of enforcement activities, community
relations, and the administrative record.  It provides specific
discussions on community interview planning and development of
community relations plans  (CRPs) for enforcement-lead sites;
enforcement activities requiring public participation; community
relations during specific enforcement actions and settlements;
and the relationship between the administrative record for
response selection and community relations.  The chapter is
intended to discuss only how enforcement activities  should  be
considered during overall community relations program planning
and implementation,  in developing this chapter, the Agency
refrained from repeating information contained elsewhere in the
Handbook.*
*This memorandum  replaces  current OSWER Directives 9836.0 and
9836.0-la, and  is the  new  Chapter 6  of the gomaunity gelations  in
Suparfundi  A Handbook (hereinafter  referred to as the Handbook).

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                   OSWER DIRECTIVE  9836.0-1A

6.2  APPLICABILITY

     This policy applies to all Fund-financed, Federal
enforcement, CERCLA-funded Stats enforcement, and PRP-l«ad
removal and remedial actions, as defined in th« National
Contingency Plan (NCP).  The information contained in this
chapter is consistent with and serves to implement the NCP.  It
creates no rights and/or obligations of any party.

6.3  OVERVIEW OF THE CERCLA ENFORCEMENT PROGRAM

     A primary goal of CERCLA is to compel PRPs to remediate
sites that are releasing or threatening to release hazardous
substances into the environment.  The enforcement process may
involve the following major efforts.

     First, EPA attempts to identify PRPs as early as possible.
Where practicable, EPA generally notifies these parties of their
potential liability for response work when the site is scheduled
for some action;  EPA will then encourage PRPs to do the work.

     If the PRPs are responsive and EPA believes the PRPs are
willing and capable of doing the work, EPA will attempt to
negotiate an enforcement agreement  with the PRP(s).  The
enforcement agreement may be an agreement entered in court  (e.g.,
a judicial consent decree) or it may be an agreement signed by
EPA and the PRPs outside of court  (an administrative order on
consent).  Both of these agreements are enforceable in a court of
law, and are subject to EPA oversight of the work performed by
PRPs.

     If a settlement is not reached, EPA can use its authority to,
issue a unilateral administrative order, which directs PRPs to
perform removal or remedial actions at a site.  If the PRPs do
not respond to an administrative order, EPA has the option of
filing a lav suit to compel performance.

     Finally, if PRPs do not perform the response action and EPA
undertake*- the work, EPA may file suit against PRPs to recover
money spent by EPA from the Super fund.  This is known as cost
recovery, and is a major priority under the CERCLA program.

     The Appendix to this chapter,  a fact sheet on the
enforcement process, explains in simple terms the tools and
authorities provided by CERCLA* and the methods EPA may use to
negotiate settlements with PRPs.

     EPA must strive to help communities understand Superfund
program goals and activities, including enforcement actions.   In
this effort, the lead  agency needs  to consider the concerns of
the local community.   By identifying community concerns, the
Agency can attempt to  develop alternatives to response actions or

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                   OSWER DIRECTIVE 9836.0-1A

a variation to a remedial action plan that may better meet th«
ne«ds of the local residents.


6.4  COMMUNITY RELATIONS RELATED TO ENFORCEMENT ACTIVITIES AND
     ADMINISTRATIVE RECORDS

     In fostering community relations during enforcement actions,
Community Relations Coordinators (CRCs) rhculd follow the same
essential steps as for Fund-financed actions.  The planning steps
that are critical to community relations are conducting community
interviews and developing community relations plans  (CRPs).  Once
the CRP has been developed, the CRC and other members of the site
team should insure that implementation follows this  CRP.  The
administrative record file can be used to insure that the public
knows what is happening at the site, as well as how  to get
involved in determining what happens at the site.  This chapter
emphasizes the enforcement aspects of these activities and
recognizes the possibility of PRP interest in participating in
these and other activities.

6.4.A  Planning Community Interview* and Payaloping  Community
       Relations Plans fCRPs)

6.4.A—1  Community Interview*

     In addition to general preparation for community interviews
(see Chapter 3 of the Handbook), community relations staff should
discuss the site with other Regional staff in order  to identify
what special precautions, if any, should be taken in the course
of conducting the community interviews  (e.g., sensitivity to
pending litigation or the political climate of the community).
By discussing the site with regional technical and legal staff in
advance of the community interviews, community relations staff
can be apprised of any situations that might impact  on these
interviews.  With or without viable PRPs, the Remedial Project
Manager (RPM) should participate in the community discussions.

     The regional cevunity relations staff, with the RPM or
enforcement staff, conducts discussions with different groups
before developing the CRP.  It is important to note  that some
interviews Bay already have been conducted in the community as
part of the listing process for the National Priorities List
(NPL).  These discussions, however, do not replace community
discussions held during development of a CRP.  The information
sought during the CRP development covers spec1Tic areas that are
not necessarily discussed - or asked - during the listing
process.  Also, CRCs are not, nor should they be, investigators
of PRP actions at the site.  During community discussions,  if
information is volunteered, the CRC should advise the resident
that enforcement officers will follow up on this information.

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                    OSWER DIRECTIVE 9836.0-1A

      To incorporate the full rang* of views, lead agency staff
 may consider interviewing PRPs in the community.   Every site
 varies and so also do PRPs, their contribution to the site,  and
 their standing in the community.  In some cases,  only the current
 owner or operator is contacted.   The enforcement team for the
 site will determine who to interview.  This team is comprised of
 a CRC, the on-scene coordinator/ regional counsel,  the RPM,  the
 Enforcement Project Manager (EPM),  as well as equivalents at the
 State level when the State has the lead.

 6.4.A—2  CpmjHU.pi.tv Relations Plans

      Using information obtained during the community interviews,
 the lead agency develops a community relations plan (CRP) that
 reflects consideration of the concerns and communication methods
 preferred by the community.  The CRP format is fully described in
 Chapter 3 and Appendix B of the Handbook.  In addition, the  CRP
 includes two appendices; the first presents EPA's contact list of
 key community leaders and interested parties.  Note that the list
 of  community contacts will not be in the Appendix if it contains
 private citizens* addresses and phone numbers.  On the other
 hand,  public agencies, elected officials, and local groups-'
 addresses can be included in the administrative record and
 information repositories.  The second appendix outlines suggested
 locations of meetings, the administrative record and information
 repositories.  These are all public information.

      The CRP is a critical planning tool for lead agency staff
 and for the public, as it will likely reach and impact many
-people.   CRPs prepared for sites with viable PRPs should receive
 input from all members of the enforcement team who are directly
 affected by the scheduled activities in the CRP.   for example,
 attorneys should approve the accuracy of any legal information;
 the RPM or EPM should approve the accuracy of any technical
 information; and the CRC should approve the accuracy of the
 community relations techniques used in the CRP.  The CRC is
 ultimately responsible for insuring that the community relations
 requirements of CERCLA/SARA are implemented.  Therefore final
 approval of the CRP should be by the CRC, with concurrence on
 specific sections by members of the team.

      Coordination activities among the CRC, on-scene coordinator,
 regional counsel, the RPM, and the EPM, depend on the
 site-specific situation.  The Key initially is to plan activities
 and establish procedures for reviewing information.  Adequate
 planning should prevent the release of information that might be
 detrimental to the settlek-rit and/or litigation process.
 Internal discussions with all team members during project
 planning may be a useful mechanism for guarding against such
 releases.  Thia need for coordination is perhaps the moat cr
 message nut forth in this guidance.  Although EPA-must share
 information about a site'with the people directly affected by the

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                   OSWER DIRECTIVE 9836.0-1A

sits, this information exchange should be technical and not
legalistic, and should be coordinated so as not to jeopardize
negotiations with PRPs.

     Community relations activities outlined in a CRP for an
enforcement site should be consistent with the settlement process
and the likely schedule of enforcement actions.  Techniques
peculia-. to enforcement sites  (such as the technical discussions
outlined in Section 6.4.B-7) may be identified in the CRP as
community relations activities.  [Within the various sections and
appendices of a CRP, the CRC staff may wish to document EPA's
approach to coordinating and sharing information with PRPs.
However, any special conditions on Agency interaction with the
PRPs should be spelled out in the administrative order or consent
decree, not in the CRP.  The public must be told early if PRPs
are willing to participate in implementing the CRP.  The CRC
staff can do this by preparing a fact sheet or stating this at a
public meeting.]  Discussions about the PRPs prior to signing a
consent agreement, however, can cause delays in the negotiations.
It is preferrable to delay discussing details of PRP involvement
with the site until some agreement is signed or action taken.  If
the PRPs are to be a part of the community relations- program,
early comments can cause tension and mistrust between Agency
staff and the PRP.

     Assuming a site has not been referred for litigation, the
CRP only needs to inform the public of the possibility of
litigation.  CRC staff may choose to describe the litigation
process, and discuss the potential effects of litigation on the
scope of community relations activities.  If the site is referred
later for litigation, the CRP is to be modified to provide that
statements about the litigation, other than public information
that can be ascertained from court files, must be cleared with
the Department of Justice before issuance.  The regional counsel
team member will be the focal point for that clearance, as well
as for consulting with DOJ on statements concerning site status,
such as investigations, risk assessments and response work.  The
plan will be amended to reflect any potential effects this could
have on community relations activities.  When referral for
litigation is the initial enforcement action, the original
community relations plan should specify the activities that are
to be conducted during litigation, to the extent they can be
determined at that time.  Section 6.4.D-2 of this policy
discusses the litigation process.

6.4.A—3  Potentially Responsible Party  fPRPl Involvement

     EPA is the lead agency for developing and implementing
community relations activities at an .EPA "PRP-lead" site.  A PRP
may assist in the implementation of community relations
activities at the discretion of the Regional office.  The
Regional office, however, will oversee PRP community relations
implementation.  Specifically, PRPs may be involved in community

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                   OSWER DIRECTIVE 9836.0-1A

relations activities at sites where they are conducting either
the remedial investigation/feasibility study (RI/FS), or the
remedial design/remedial action  (RD/RA), or both.  If a PRP will
be involved in community relations activities, the CRP should
reflect that involvement.  In these cases, the PRPs may wish to
participate in public meetings,  or in the preparation of fact
sheets.  EPA, however, will not  "negotiate" the contents of press
releases with PRPs.

     When complete and final, the CRP should be provided to all
interested parties, and placed in the administrative record file
and information repository for the particular site.  If the CRP
is revised, the final revised copy should be made available to
the public, and placed in the administrative record file and the
information repository, as well.

6.4.B  Enforcement Activities and Community Relations at
       Remedial sitaa

     The following subsections present an overview of the notice
process leading to the initiation of RI/FS or RD/RA negotiations,
community relations following an RI/FS order, public comment on
RD/RA consent decrees, community relations during PRP
remediation, and technical discussions.

6.4.B-1  Introduction

     Community relations activities should be planned as early in
the process as possible.  Generally, this occurs before the RI/FS
special notice, which is discussed below.  Meetings with small
groups of citizens, local officials and other interested parties
are extremely helpful for sharing general information and
resolving questions.  These meetings also may serve to provide
information on EPA's general enforcement process, perhaps through
distribution of the fact sheet attached to this guidance.  A
discussion of how EPA encourages settlements may be appropriate
at this time.

     Litigation generally does not occur until after the remedy
is selected (after the moratorium period that begins when the
special notice for RD/RA ends, as discussed below).  EPA staff,
however. may need to explain early in the process that legal
constraints may apply during negotiations or litigation with
respect to community relations activities.

6.4.B-2  Notice to PRPs

     Notice letters are used to  inform PRPs of their potential
liability and provide an opportunity for them to enter into
negotiations, which are intended to result in PRPs  conducting or
financing response activities.   The negotiation process may
include "informal" and "formal"  negotiations.

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                   OSWER DIRECTIVE 9836. 0-1A

     EPA has established a discretionary three-step notification
process to facilitate and encourage settlements at remedial
sites.  First , well before the RI/FS starts, EPA usually sends a
general notice to PRPs.  Second, a special notice for the RI/FS
may be sent in appropriate circumstances.  Third, a special
notice for the RD/RA may be sent, where appropriate.

     The general notice advises PRPs of possible liability.  The
special notices initiate formal negotiations and invoke a
moratorium on EPA conducting the RI/FS or response action, while
encouraging PRP participation in response activities at a site.
For remedial sites, RI/FS special notices should be issued at
least 90 days before EPA plans to obligate Fund money for the
RI/FS.  For an RD/RA, the preferred approach is to issue special
notices at the time the FS and proposed work plan are released
for public comment, although notice may be issued after the
Record of Decision (ROD) is signed.  Once the special notice is
sent, a 60-day moratorium on EPA's conduct of certain response
activities is triggered.  If a "good faith" offer is not received
within 60 days, EPA nay proceed with its own RI/FS or removal, or
take enforcement action against the PRP.  If a good faith offer
is received, EPA's goal is to conclude RI/FS negotiations with an
administrative order on consent within 90 days of the RI/FS
special notice.  RD/RA negotiations are targeted for conclusion
with an RD/RA consent decree within 120 days of the RD/RA special
notice.  These are statutory moratorium periods.  The time frame
for the RD/RA special notice moratorium nay be extended for 30
days by the Regional Administrator and beyond that by the
Assistant Administrator, OSWER.  Special educational efforts
should be conducted prior to negotiation/ moratorium to warn the
public that little if any information will be available to the
public during negotiations  (see below) .

     Detailed guidance on issuance of notice letters is discussed
fully in the "Interim Guidance on Notice Letters, Negotiations,
and Information Exchange" (October 19, 1987), 53 FR 5298  (OSWER
Directive 19834.1).
6.4.EK3  ge^ot 1st ions

     Negotiations are generally conducted  in  confidential
sessions between the PRPs and the Federal  government.  Neither
the public, nor the technical advisor  (if  one has been hired by a
community) may participate  in negotiations between EPA,  DOJ and
the PRPs unless everyone agrees to allow such participation.
othervi** the ability of the parties to assert  confidentiality
at some later date may be affected.

     The confidentiality of statements made during the course of
negotiations is a veil-established principle  of bur  legal  system.
Its purpose is to promote a thorough and frank  discussion  of the
issues between the parties  in an effort to resolve differences.

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                   OSWER DIRECTIVE 9836.0-1A

Confidentiality not only limits what may be revealed publicly,
but also ensures that offers and counter-offers made in the
course of negotiations may not and will not be used by one party
against the other in any ensuing litigation.

     Potentially responsible parties may be unwilling to
negotiate without the guarantee of confidentiality.  They may
fear public disclosure regarding issues of liability and other
sensitive issues which may damage their potential litigation
position or their standing with the public.  This expectation of
confidentiality necessarily restricts the type and amount of
information that can be made public.

     CRC staff should consult with and obtain the approval of
other members of the technical enforcement and regional counsel
team before releasing any information regarding negotiations.  If
the site has been referred or is in litigation, DOJ approval
should also be obtained.  In lieu of direct participation by the
public in negotiation sessions, the CRC staff may wish to send
out the fact sheet on the Superfund enforcement process attached
to this guidance, along with the moratorium schedules for that
specific site.

6.4.B—4  Community Relations Following an RI/FS Order

     As discussed above, RI/FS settlements usually are resolved
as administrative orders on consent.  For remedial sites, an
RI/FS worfcplan is a trigger for implementation of community
relations activities.  When the worfcplan is complete, a
"kick-off meeting with the public may be conducted in order to
present the final workplan and explain the next steps.  If held,
CRC staff should make it clear that EPA approved the worJcplan;
announce how the FRF will be performing the RI/FS; explain EPA's
oversight role; discuss the enforcement process and
confidentiality requirements; and explain where EPA's record
files will be/or are located.  As discussed in section 6.4.E, the
administrative record file will be available at a central
regional location, and at or near the site.  Since it contains
information which the lead Agency uses in selecting a final
remedy, the administrative record file should be used as a tool
to facilitate public involvement.

     Once the RI/FS has been completed, the agency will issue the
proposed remedial action plan,, and publish a notice announcing a
public comment period.  At a minimum, the notice must be
published in a major local newspaper of general circulation.  A
formal comment period of not less than 21 calendar days must be
provided for the public to submit oral and written comments.
Note that proposed revisions to the National Contingency Plan
(NCP) suggest extending this to not less than 30 calendar days.

     An -opportunity for a public meeting is also required to be
offered during the comment period, as well as a transcript of the

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                   OSWER DIRECTIVE 9836.0-1A

meeting on the proposed plan.  The transcript must be made
available to the public in the administrative record, and may be
distributed in the information repositories and on request.  See
Chapter 4 of the Handbook for a complete outline of these
specific public participation requirements.

     Once the public comment period on the proposed plan has
closed, a responsiveness summary is prepared which serves two
purposes.  First, it provides lead agency decision-makers with
information about community preferences regarding both the
remedial alternatives and general concerns about the site.
Second, it demonstrates to members of the public how their
comments were taken into account as an integral part of the
decision-making process.  A Record of Decision (ROD) is then
issued by EPA as the final remedial action plan for a site.  Both
the ROD and the responsiveness summary will be placed in the
administrative record file and other information repositories.
In addition, the responsiveness summary may be distributed to all
those who commented and to the entire site mailing list.  See
Chapter 4 of the Handbook for further information on requirements
for public notice and availability of the ROD and responsiveness
summary.
6.4. B— 5  Public Notice anfl ^Qjnent on Consent Decrees for RD/RA

     If a negotiated settlement for remedial action under CERCLA
section 106 is reached, it will be embodied in a proposed consent
decree (to be entered by a court).  CERCLA section 122(d)(l)
requires the use of consent decrees as the vehicle of agreement
between the Federal Government and PRPs on remedial actions taken
under section 106 of CERCLA.  CERCLA section 122 contains
specific public participation requirements.  The Department of
Justice lodges (provides a copy of) the consent decree with the
court, publishes a notice of the proposed consent decree in the
Federal Register, and offers an opportunity for non-signatories
to the agreement to comment on the proposed consent decree before
its entry by the court as a final judgment.  The public comment
period sust not be less than 30 calendar days in length and may
be extended if warranted.  The proposed consent decree may be
withdrawn or modified if comments demonstrate it to be
inappropriate, improper or inadequate.

     In order to ensure that public comment opportunities are
extended to interested parties, EPA staff routinely prepare a
press release to be issued after the consent decree has been
lodged as a proposed judgment with the court.  DOJ should notify
the regional counsel for the particular site and provide a copy
of the Federal Register notice of the decree.  Regional counsel
will assure that the RPM and CRC are informed of this event.  CRC
staff can then mail copies of the press release or copies of the
Federal Reaieter notice to persons on the site mailing list.  The
press release should indicate that copies of the consent decree
document may be obtained, including its location and that of any

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                   OSWER  DIRECTIVE  9836.0-1A

other relevant documents.  The procedures  for public comment on
the consent decree, as well as a  contact name for obtaining
further  information, should also  be announced.  The public notice
and press release  for the consent decree may be combined, if
appropriate.

     The ROD and responsiveness summary have usually been made
public by this time.  However, inasmuch as comments previously
were requested on  the proposed plan, comments are requested only
on the consent decree.  Communications with the public should
focus on the remedial provisions-  of the settlement agreement.
Details of the negotiations, such as the behavior, attitudes, or
legal positions of PRPs,  any compromises incorporated in the
settlement agreement, and evidence  or attorney work-product
material developed during negotiations, must remain confidential.

     If a negotiated settlement for RO/RA  results in actions
fundamentally different from those  selected in the ROD, the ROD
will have to be amended.  An amendment to  a ROD also requires a
public comment period, which should coincide if possible, and be
held jointly with, the comment period for  the consent decree.

     A public meeting may be held during the public comment
period, at the site team's discretion.  Regional staff must offer
the opportunity for a public meeting when  there are significant
community issues or concerns, or  for other reasons which are
determined by and  based upon the  judgment  of EPA regional staff.
If held during the public comment period,  these meetings need to
be documented, and significant oral comments received during the
meeting must be addressed in the  responsiveness memorandum on the
consent decree.

     Once the public comment period on the proposed consent
decree has closed, DOJ staff  (in  cooperation with EPA staff) must
consider each significant comment and write a response.  Assuming.
that EPA and DOJ continue to believe the decree should be
entered, DOJ will  then file a Motion to Enter with the court, the
responsiveness memorandum, the comments received, and the consent
decree itself.  The responsiveness  memorandum and motion to enter
the consent decree axe released to  the public at the same time.
The Regional team  will use information repositories,
administrative record files, and/ or other  means to maXe these
documents available to the public.
6.4. B— 6  Ppinrntinitv Relations  During: PRP Remediation

     EPA retain* responsibility for community relations during  a
PRP-managed remedial  action pursuant to a consent decree or any
enforcement order.  The  scope and nature of community relations
activities will be the same as for Fund-lead response actions.
When PRPs participate in community relations activities at the
site, EPA and PRP roles  need  to be determined and explicitly
defined.  Where a PRP has not been involved in the initial stages
                                10

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                   OSWER DIRECTIVE 9836.0-1A

of implementing the community relations plan, but shows
sufficient interest, commitment and capability to warrant some
level of participation, EPA should re-evaluate its role in
conducting community relations activities.  In that case, a new
CRP may be developed at the discretion of the regional team.  PRP
roles in conducting community relations may also be addressed in
the consent decree or other enforcement orders.

6.4. B-7  Technical Discussions

     Technical meetings are considered informational, and provide
orientation to the enforcement process.  One of the objectives in
holding technical meetings is to describe, instruct, and explain
how the remedy may or will (depending on whether a ROD has been
signed) address the conditions of the site.  Workshops exploring
the approach to the site and project status, can occur at any
point up to and beyond remedy selection. If held during RI/FS or
RD/RA negotiations, they should be separated from the legal
discussions.  The RPM may host a technical discussion without PRP
concurrence; however, willingness by the PRPs to participate may
facilitate a more open and honest dialogue with the community.

     Technical information must be documented and available for
the public in the administrative record file.  Technical or
factual information which comes up during negotiations should
also be included in the administrative record file.  Issues of
liability, however, are appropriately discussed only during
negotiations between EPA and PRPs, and should not be included in
the administrative record file.

     Technical assistance grants are authorized under section
117 (e) of CERCLA, which allows EPA to make grants available to
communities affected by a release or threatened release at an NPL
site.  Community groups may 'use these grants to obtain assistance
in interpreting technical information on the nature of the hazard
and recommended alternatives for investigation and cleanup.
6.4.C Cgfan^nj-ty Relations During Removal Actions

     SPA will encourage public participation during removal
actions to the extent possible.  However, there will be times
when this participation may need to be constrained.  The NCP, the
Handbook, and Removal Procedures establish the requirements  for
removal actions, including administrative record requirements.

     The enforcement program encourages PRPs to conduct or pay
for removal actions.  At any time, the Agency may arrive at  an
agreement with the PRPs to conduct a removal, which would usually
be embodied in an administrative order on consent.  EPA also may
issue a unilateral administrative order to compel a PRP to
undertake a removal or other action.  In addition, under limited
circumstances, the Agency may refer the action to DOJ, seeking a
court order to secure the removal.

                                11

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                   OSWER DIRECTIVE. 9836.0-1A

     By their nature, the situations that require emergency
removals do not allow for extensive public  involvement.
Adjustments to the community relations process aust be made to
accommodate necessary time constraints.  It is proposed in the
draft NCP that a public comment period of at least 30 days be
required for removals with a planning period of at least 6 months
before the initiation of on-site activity.  For removals with a
planning period of less than 6 months before the initiation of
on-site activity, a public comment  period may be held where
appropriate.  The public comment period, if held, begins when the
record file is made available for public inspection.

     A unilateral administrative order or administrative order on
consent is a public document and should be  made available to the
affected community at a minimum, through the administrative
record file.  In addition, community relations staff should
discuss the terms of the order with and describe the removal
action to citizens, local officials, and the media.  If the PRP
subsequently fails to respond to the order, any public statements
or information releases regarding the status of actions at the
site or prospective EPA actions should first be cleared with
appropriate Regional technical and  legal enforcement personnel.

     Community relations activities during  removals conducted by
PRPs should be the same as for Fund-financed removals.  PRPs may
participate in community relations, subject to the same
considerations described previously in this guidance under
Section 6.4.A-3.

6.4.D  Community Relations During Specific  Enforcement Actions
       and Settlements

6.4.D-l  Consent Decrees. De Minimis and Cost Recovery
         Settlements

     Under section 122(d)(l) of CERCLA, settlements for remedial
action are to be in the fora of consent decrees filed in Federal
court.  Section 122(d}(2T(B) requires DOJ to provide an
opportunity for public comment on proposed  consent decrees.  This
concept is discussed in section 6.4.B-5.

     Section 122(i) of CERCLA requires the  lead Agency to publish
a notice of proposed settlement, for both administrative orders
on consent under section 122(g)(4)  (de minimis settlements), and
under section 122(h) (cost recovery settlements/arbitration).
The notice published in the Federal Register must identify the
facility concerned and the parties  to the proposed s*v-tlement.

     A public comment period of not less than 30 days is required
for these agreements.  Regional staff should provide notice
(e.g., a press release, notice to persons on the site mailing
list or an ad in the newspaper of  local  circulation) to
supplement the Federal Register notice.  The press release should

                                12

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                   OSWER DIRECTIVE 9836.0-1A

provide a contact for further information.

     The lead agency with jurisdiction must consider any comments
filed, and determine if the proposed settlement requires
modification where comments demonstrate that the proposed
agreement is inappropriate, improper or inadequate, or can become
effective without change.  The fii.al settlement and the response
to comments must be released at t> a same time and be made
available to the public.  This can be accomplished by placing
both documents  in the administrative record file.  The response
to comments document (responsiveness summary) should also be sent
directly to those who commented.  PRPs who are party to the
settlement will receive notice from the Agency that the agreement
will go into effect unchanged or that modifications are required.
A statement that the responsiveness summary may be obtained from
the administrative record file or upon request should be added to
this notice.

6.4.D-2  In^unctive Litigation

    At any point in the enforcement process, a case may be
referred to DOJ for litigation, and community relations
activities may change in scope.  Referral is likely to occur most
frequently for RD/RA after the moratorium has concluded.  If
litigation is initiated early in the enforcement process, the CRP
for the site may need to be modified substantially.  If
litigation is initiated late in the process  (e.g., after the
conclusion of the RD/RA special notice moratorium), the plan will
require only the addition of the litigative process.

     When a case has been referred to DOJ, community relations
activities at the site should be re-evaluated by the site team,
and changes necessary to accommodate confidentiality should be
agreed upon by the site team, including DOJ.  While strong
consideration should be given to implementing the plan as
developed and previously approved, the litigation process may
require changes in public disclosure.  For example, the court
may impose a gag order or place restrictions on information
releases during negotiations or any meetings with the public to
discuss potential site remedy.  Under these circumstances, the
DOJ attorney vill advise the site team on how to proceed.

6.4.D-3  Coat Recovery

     If a Fund-financed cleanup is conducted, EPA may initiate
litigation to recover the costs of response.  Since cost recovery
generally follows removal actions or initiation of remedial
action, community interest in the site usually will have
lessened, unless other operable units remain to be addressed.

     A spokesperson chosen by the site team, in coordination with
DOJ, should take the lead in responding to inquiries regarding
current site conditions.  All inquiries regarding litigation

                                13

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                   OSWER DIRECTIVE 9836.0-1A

should be forwarded to the EPA cost-recovery team, which will
prepare a response subject to the concurrence of DOJ.

6.4.D-4  Interaction with RCRA And other Fe.fle.ral and State Lavs

     On May 5, 1987, the Office of Solid Wast* and Emergency
Response issued guidance for public involvement in RCRA
section 3008(h) actions (QSWER Directive 19901.3).  This guidance
establishes the process for public involvement in actions taken
under section 3008(h) of RCRA.

     Section 3008(h) of RCRA, the interim status corrective
action authority, allows EPA to take enforcement action to
require cleanup at a RCRA interim status facility when the Agency
has information that there has been a release of hazardous waste
or hazardous constituents.  Two orders will frequently be used to
implement the cleanup program.  The first order requires the
facility owner or operator to conduct a Corrective Measure
study/RCRA Facility Investigation (RFI/CMS), similar to the
RI/FS.  Once the remedy has been selected, a second order
requires design, construction, and implementation of that remedy.

     The RCRA guidance outlines both minimum public involvement
requirements and expanded public involvement suggestions.  In
many ways the RCRA guidance uses procedures and ideas drawn from
the Superfund community relations program.  Thus, coordination
between Superfund and RCRA personnel at sites where actions under
both CERCLA and RCRA are anticipated is appropriate.  Superfund
CRCs may want to become familiar with this guidance and with the
RCRA Public Involvement Coordinators to ensure that the Agency
presents a coordinated approach.

     Familiarity with other Federal or state laws such as the
Clean Air Act, Clean Water Act, etc. will generally make the role
of the CRC easier, for frequently many media are represented at a
hazardous waste site.  A general knowledge  of Federal or state
requirements may help the CRC in conversing with the public.

6»4.X  The Administrative Record As Part of Community Relations

6.4.1-1  purview

     Section 113(k)(l) of CERCLA requires the establishment of an
administrative record upon which the selection of a response
action is based.  It also requires that a copy of the
administrative record be located at or near the site.  Section
113(X)(2) of CZRCIA requires that the Agency promulgate
regulations outlining procedures for interested persons to
participate in developing the administrative record.  The Agency
is addressing these statutory requirements  through revisions to
the NCP and through the development of a guidance document.

     Throughout the decision-making process, from remedial

                                14

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                   OSWER  DIRECTIVE 9836.0-1A

investigation to  selection of remedy, the administrative record
file will be available  for public inspection at a central
regional location and at  or near the  site.  The information in
the file is crucial to  the public in  that it contains the
information upon  which  the lead Agency bases its decisions toward
selecting a final reredy.  Community  relations staff should use
the administrative rrcord file as a tool for facilitating public
involvement.

     Publicly-available documents concerning response selection
must be made available  to all interested parties at the same
time.  EPA staff  should avoid situations where local residents
are provided opportunities to review  and comment on site
information and other members of the  public are not provided the
same opportunity,  similarly, if EPA  requests PRPs to review a
plan, EPA should  enable other members of the public to review
that plan as well.  When  a kick-off meeting is scheduled to
explain the final workplan and obtain opinions, the public,
including residents and PRPs, should  be  invited.

     The administrative record file and CRP for a remedial action
should be made available  to the public no later than the time the
remedial investigation  phase begins,  which is usually when the
RI/FS workplan is approved.  The timing  for establishing the
administrative record file for a removal action will depend on
the nature of the removal.  As proposed  in the draft NCP, for
removals with a planning  period of at least six months before
on-site activities will be initiated, the record file must be
made available to the public when the engineering evaluation/cost
analysis (EZ/CA), or its  equivalent,  is  available for public
comment.  For removals  with a planning period of less than six
months, the record file must be available to the public no later
than 60 days after the  initiation of  on-site cleanup activity.

6.4* E—2  Purpose  of the Administrative Record.

     The administrative record has a  two-fold purpose.  First,
the record provides an  opportunity for the public to be involved
in the process of selecting a response action.  During the
selection of a response action, information is reviewed and made
available; in the  publicly accessible  administrative record file.
Second, if the Agency is  challenged concerning the adequacy of a
response action,  judicial review of a response action selection
will be limited to the  administrative record.  By limiting
judicial review to the  record, a court's review is based upon the
same information  that was before t»-e  Agency at the time of its
decision.  The public should be advised  that their comments must
be submitted in a timely  manner in order to be considered.
                                IS

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                   OSWER DIRECTIVE 9836.0-1A

6.4.E-3  Commnitv Relations Coordinator P^gpOnaibilitl«a for the
         Administrative Record)

     The OSC/RPM and regional attorney, with the support of the
administrative record coordinator, are responsible for deciding
which documents are to be included in the administrative record,
and ensuring its adequate compilation and maintenance.  The
Regional Administrator or his designee is responsible for the
certification of the record for litigation.  CRCs will have some
general duties in developing the record file, but every region
has defined different roles.  In general, however, the CRC duties
will center on the relationship of the administrative record file
to the information repositories, public notices and public
comments.

     First, CRCs and administrative record staff must coordinate
the location of the administrative record file and information
repositories.  The statute requires that the administrative
record be available at or near the facility at issue, and that
information be available for public inspection and copying.  If
the information repository does not contain a copying facility,
the Region or State may want to make arrangements for copying the
record file.  EPA, however, is not required to copy the
information for interested persons.

     Second, the notice of availability for the administrative
record must be published in a major local newspaper of general
circulation.  A copy of the public notice must also be placed in
the administrative record file and may be made available to the
public through the community relations mailing list.  (See the
Overview section above for a discussion of when the
administrative record file must be made available to the public.)
This notice may be combined with other notices of availability
depending on the timing of activity at a site, e.g., a notice of
availabilty of the information repository.  Where appropriate, a
notice of availability of the record file or of commencement of
the public comment period may be published in the Federal
Register.  The public is not notified each time a document is
added to the record file.  These notices should be coordinated
between the CRC and administrative record staff in order to use
resource* most efficiently.  For a more complete discussion of
the notice of availability, see the Guidance on Administrative
Records for Selection of CZRCLA Response Actions  (OSWER Directive
19833.3A).

     Third, the completed CRP must be placed in the
administrative record file,  community Relations Coordinators
must advise the Administrative Record Coordinator that the CRP  is
final and provide him/her with a copy.

    Fourth, information contained in records of communication
that were generated by the community relations staff  and
considered or relied on in selecting a response should be

                                16

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                    OSWER DIRECTIVE 9836. 0-1A

 included in the record file.   in addition,  Superfund CRCs should
 take appropriate steps to ensure that any community relation*
 document* that are required to be placed  in the administrative
 record file are provided to the Regional  official responsible for
 the  record file-.

      Fifth,  the text of all comments,  criticism* and new
 information submitted by the public,  including PRPs,  during the
 public comment period must be included in the  record file.  A
 retpwnse to all significant comments  (i.e.,  the responsiveness
 summary)  must also be placed in the administrative record file.
 The  responses may be combined by subject  or other category in the
 record file.

      The record file should reflect the Agency's consideration of
 all  significant public comments.   The Agency has no duty to
 respond to comments it receives during a  formal comment  period
 until the close of that formal public comment  period,  if the
 Agency chooses to respond to  a comment made prior to a formal
 public comment period,  the response must  be included in  the
 record file.   The Agency may  suggest  that comments submitted
 prior to a formal public comment period be resubmitted during the
 comment period if the commenter desires a response.  Or  the
 Agency may notify a commenter that the Agency  will respond to the
 comment in a  responsiveness summary prepared at a later  date.

      Comments which are received after the formal comment period
 closes and before the decision document is signed should be
 included in the record file but labeled "late  comment."   Since a
 responsiveness summary may already have been prepared at this
 point,  the Agency must respond to late comments only if  they
 contain significant new information not contained elsewhere in
 the administrative record which could not have been submitted
 during the public comment period,  and which substantially support
 the need to significantly alter the response action.

      Comments received after the decision document is signed
 should be placed  in a post-decision document file.   They may be
 added to the  record file if:   the documents concern issues
 relevant to the selection of  the response action that the
 decision document does not address or reserves to be decided at a
 later data* or where there is a significant change in a  response
 selection which is addressed  either by an explanation of
 significant differences,  or in an amended decision document.  The
Guidance  on Administrative Records cited  above gives additional
 information in this regard.
6.4. E— 4  Additional PglPP^TT^^^ Relations  Coordinator
         Reaponaibilittea

     Because of regional differences  CRCs  may have  additional
general responsibilities,  including:


                                17

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                   OSWER DIRECTIVE 9836. 0-1A

        Assessing th« impact of the administrative record file
        on local information repositories by consulting with
        officials at the repositories.  This must be done in
        coordination with the. Administrative Record Coordinator.
        CRCs should advise the public where the administrative
        record file is located.

        Providing the Administrative Record Coordinator with
        information as to how to notify the public of the
        availability of the record file.  This notification nay
        be in addition to the newspaper notice.

        Making available the transcript of the local meeting on
        the proposed plan, as required under section 117 (a) of
        CERCLA.

        Providing assistance to the Administrative Record
        Coordinator to ensure that final comments made by EPA on
        important documents generated by the State or a Federal
        facility are documented in writing and submitted to the
        State or Federal facility staff for inclusion in the
        administrative record file.  States and Federal facility
        staff will compile and maintain the administrative record
        files for those sites.

All staff involved in Superfund activities must become familiar
with the administrative record requirements.
6.4. E— 5  Relationship Between the Adm.injg^ra.'ti.ve Record and
         Information Repositories

    Section- 113 (k) (1) of CERCLA requires that  "the administrative
record shall be available to the public at or  near the facility
at issue."  Duplicates of the administrative record may be placed
at any other location.  The original files concerning response
action selection should be located at the EPA  Regional office.  A
copy of these files must be located at or near the site.  The
draft NCP proposes that an exception be made for emergency
removal actions where on-site activities cease within 30 days of
initiation.

     Section 117 (d) of CERCLA requires that "each item developed,
received, published, or made available to the  public under
section 117 shall be available for public inspection and copying
at or near the facility at issue. «  These items are generally
included in the information repository.

     The administrative record file at or near the site at issue
should be located at one of the information repositories that
already may exist for community relations purposes.  The
information repository, maintained by the Community Relations
Coordinator, may contain additional information of interest to
the public, that is not necessarily part of the administrative

                                18

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                   OSWER DIRECTIVE 9836.0-1A

record file  (e.g., press releases and newspaper articles).
Documents in the administrative record  file should be separated
from the other materials in the information repository.

     EPA typically uses local libraries, town halls, and public
schools as locations for establishing repositories and
administrative record files because they are publicly accessible.
In some instances, the volume of information available for
community relations and administrative  record purposes may be
larger than the capacity of these locations.  Where the space of
the information repository is inadequate for supporting the
administrative record file, an alternate location for the
administrative record file should be established.  Administrative
Record Coordinators should estimate the volume of information
expected to be included in the repository and meet with
appropriate local officials to discuss  space requirements.  In
some situations, separate locations may have to be established.
Administrative Record Coordinators and  CRCs must inform one
another of any additional information placed in these separate
locations to ensure uniformity.  CRCs should carefully review
their responsibilities for the administrative record  (Section
6.4.E-3).

     Each administrative record file oust be indexed.  This index
identifies all the documents which comprise the record file, and
lists those documents which do not have to be present in the
record file because of their voluminous nature  (raw data for
example), but which are considered part of the record.  Their
location must be provided.  This index  is part of the record file
and must be available at each record file location.

     Finally, interested parties should be able to easily find
the document(s) they need.  Documents in the administrative
record file should be well organized.   The CRC and administrative
record staff should coordinate with the state in .closing
information repositories and record files at the end of operation
and maintenance, and following a five-year review.
                                19

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         EPA
                       United States
                       Environmental Protection
                       Agency
                          Office of Solid Wute
                          and Emergency Response
                          Washington, D.C. 20460
Office of Waste Programs Enforcement
Summed 988
                       Environmental
                       Fact  Sheet
                      The Superfund  Enforcement
                      Process:  How It Works
INTRODUCTION

In 1980, Congress passed the Comprehensive Environ-
mental Response,  Compensation and Liability Act
(CERCLA), commonly called Superfund.  This law pro-
vides the U.S. Environmental Protection Agency (EPA)
with the authority and necessary tools to respond directly or
to compel potentially responsible parties (PRPs) to respond
to releases or threatened releases of hazardous substances,
pollutants or contaminants. CERCLA created two parallel
and complementary programs aimed at achieving this goal

The first program involves the creation of a trust fund
financed through a special tax on the chemical and petro-
leum industries. This trust fund, known as the Superfund,
may be available for site remediation when no viable PRPs
are found or when PRPs fail to take necessary response
actions. PRPs are defined as parties Mt«Hfl^ as having
owned or operated hazardous substance sites, or who have
transported or iiiauged for disposal or treatment of hazard-
rtijy aifot^fyff^pnn^ir^fmfy^ny[f«n^in«i»t y TOCfUffff TTlg
second program provides EPA with the authority to negoti-
ate settlements, to issue orders to PRPs directing them to
take necessary response actions, or to sue PRPs to repay the
costs of such actions when the Trust Fund has been used for
these purposes. The actions EPA takes to reach settlement
or to compel responsible parties to pay for or undertake the
remediation of sites are referred to as the Superfund enforce-
ment process. CERCLA was reauthorized and amended on
October 17, 1986. by the Superfund Amendments and
Reauthorization Act (SARA). SARA provides EPA with
new authorities and tools that strengthen the enforcement
program.
                                   LIST OF ACRONYMS
                         CERCLA:   Comprehensive Environmental Response,
                                  Compensation and Liability Act of 1980
                         IAG:      Interagency Agreement
                         NEAR:    Non-binding Allocation of Responsbiiity
                         NPL     • National Priorities List
                         PRP:      Potentially Responsible Party
                         RCRA:    Resource Conservation and Recovery Act
                                  as Amended
                         RO/RA    Remedial Design/Remedial Action
                         RI/FS:     Remedial tnvesUgatorvFeastol'ity Study
                         ROD:     Record of Decision
                         SARA:    Superfund Amendments and
                                  Reauthorization Ad of 1986
                       This fact sheet describes the enforcement authorities and the
                       process that is followed under the Superfund program. It de-
                       scribes the options available to EPA for remediating hazard-
                       ous waste sites; the tools and mechanisms that EPA may use
                       in negotiating settlements with PRPs. and describes the
                       decision-making process at enforcement sites.

                       OVERVIEW OF THE ENFORCEMENT
                       PROGRAM

                       A major goal of the Superfund program is to encourage PRPs
                       to remediate hazardous waste sites. The enforcement proc-
                       ess normally used by EPA to enlist PRP involvement may
                       include five major efforts.

                                                                1

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                SUPERFUND  REMEDIAL/ENFORCEMENT PROCESS
                                         REMOVAL ACTIONS
                             OCCURPWOR TO 0* DUWNG THE RQiBEDUL
To understand the enforcement process, it is necessary to under-
stand the Superfund remedial process. Under the *»"»*»<«•' pro-
gram, EPA takes long-term actions to stop or substantially
reduce releases or threats of releases of hazardous substances
that are serious but not immediately life-threatening. Removal
actions, which are short-term, immediate actions intended to
stabilize a hazardous incident or remove contaminants from a
site that pose a threat to human health or welfare or the environ-
ment, may be taken at any point in the remedial process.

The Superfund process begins with  a preliminary assessment/
site inspection (PA/SI). This usually is conducted by the State,
to determine whether the site poaes a significant, enough poten-
tial hazard to warrant further study and investigation.

The site is then ranked using the Hazard Ranking System (HRS),
a numerical ranking system used to identify the site's potential
hazard to the environment and public health.  Sites assigned an
HRS score of 28 Jar above are added to the National Priorities
List(NPL).
Next, a i*m**ii»i investigation (RI) is conducted to assess lite
extern and nature of the contamination and the potennaJ risks. A
feasibility study (FS) is then prepared to examine and evaluate
various remedial alternatives.

Following a public comment period on EP A's preferred altema-
tive and the draft FS report. EPA chooses a specific remedial plan
and outlines its selection in the Record of Decision (ROD).

Once the rrmndial design (RD) (which includes engineering
plans and specifications) is comoteted. the actual site work, or
"••"••^•i action (RA) can begin. After RD/RA activities have
been completed, the site is monitored to ensure the effectiveness
of the response. Certain measures require ongoing operation or
periodic maintenance.
First, EPA attempts to identify PRPs as early in the Super-
fund process as possible. Once identified, EPA will notify
these parties of their potential liability for response work
when the site is scheduled for some action. Second, in the
course of identifying response work to be done, EPA wiE
encourage PRPs to do the work at a site.

Third, if EPA believes the PRP is willing and capable of
doing the work, EPA wffl attempt to negotiate an enforce-
ment agreement with the PRP(si The enforcement agree-
ment may be an agreement entered  in coon (such as a
judicial consent decree) or it may be an administrative
order (where EPA and the PRP(s)  sign an agreement
outside of court). Both of these agreements are enforce-
able in a court  of law.  Under both agreements  EPA
oversees the PRP.

Fourth, if a settlement is not reached. EPA can use its
authority to issue a unilateral administrative order or
directly file suit against the PRP(s). Under either course
of action. PRPs are directed to perform removal or reme-
dial actions at a site. If the PRPs do not respond to an ad-
ministrative order. EPA has the option of filing a law suit
to compel peifomance.

Fifth. ifPRPs do not perform the response action and EPA
undertakes the work.  EPA win file suit against PRPs.
when practicable, to recover money spent by EPA and
deposit it in the Superfund Trust Fund. This is called cost
recovery, and it is a major priority under the Superfund
THE ENFORCEMENT PROCESS FOR
REMEDIAL ACTIONS

PRP Search and Notice

EPA is committed to strengthening efforts to reach settle-
ments with PRPs, EPA believes that settlements are most
likely to occur when EPA interacts frequently *>ih PRPs.

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  ENFORCEMENT AUTHORITIES

  The original Supertax! program was reauthorized iod expanded
  on October 17, 1986, when President Reagan signed irao law the
  Superfund Ameadments  and BMntfrn^Tatinn  Act of  1986
  (SARA). These amendments increased the Superfund Trust Fund
  to  $8.5 billion  and  clari*ifd aad expanded  enforcement
  authorities:
    •  Access and InformatfcM Gathering - SARA are
      EPA's ability to obtain access to investigate sites and to
      obtain information from parties with knowledge of the site.

    •  Settlement Authorities - CERCLA  authorizes EPA to
      compel a PRP  to undertake necessary actions to control the
      threat of imminent and substantial endangennent to human
      health or the environment. To accomplish this, EPA may
      either issue an administrative order or bring a civil action
      against the PRP in court SARA outlines specific procedures
      for negotiating settlements with PRPs to conduct voluntary
      response actions at hazardous waste sites.

    •  Cost Recovery - Once a Fund-financed response has been
      undertaken, EPA can recover costs from the responsible
      parties. PastandpiesentCaciliryownenandoperaton,aswell
      as hazardous substance generators and transporters, can all be
      liable under Superfund for response costs and for damage to
      natural resources. EPA may recover Federal response costs
      from any or all of the responsible parties  involved in a
      remedial action. The monies recovered go back into the Fund
      for use in future response actions.

    •  Criminal Authorities - SARA increases criminal penalties
      for failure to provide notice of a reknr, and makes whrniiring
      ffli«e information a criminal offense.
  • CfttMaSoiis-SARAaiuhorizesacitizentosueanyperson,
    the United States, or an individual State for any violation of
    standards and requirements of the law,  under certain
    conditions.

Federal Facilities

SARA also adds a section dealing with releases of hazardous sub-
stances at Federal facilities. This provision clarifies that Super-
fund applies a Federal agencies and mat they must comply with
its requirements.  SARA clearly defines the process Federal
agencies must follow in undertaking remedial responses. At
NPL sites, EPA makes the final sfle^doa of the remedy if the
Federal agency and EPA  disagree.  A Federal  agency must
rmKKliatc a Federal facility through an interagency agreement
(IAG). except in emergency situations. LAGs are enforceable
agreements between Federal agencies that are  subject to the
citizen suit provisions in SARA and to section 109 penalties, if
the responding agency does not comply with the terms of the
agreement.

SARA also provides a schedule for response actions at Federal
facilities, including a schedule for preliminary assessments,
listing on the National Priorities t '«* remedial investigations/
feasibility studies, awl remedial actions. State and local officials
also must be given the opportunity to participate in the planning
and selection of any remedy, including the review of all data.
Slates are given a formal opportunity to review remedies to
ensure that they incorporate State standards.  Public participa-
tion in addressing releases at Federal facilities is enhanced by
SARA, which establishes a Federal Agency Hazardous Waste
Compliance Docket. This docket functions as a repository of in-
formation for the public and is available for public inspection.
Every six months after  establishment of the docket, EPA will
publish in the EalcaULfiguia a list of me Federal facilities that
have been  included in  the docket during the proceeding six-
month period.
This interaction is important because it provides the oppor-
tunity to share information about the site and may reduce
delays in conducting
The enforcement process begins with the search for PRPs,
concurrent with NPL listing.

Once identified, PRPs are typically issued a general notice
letter.  The general notice informs PRPs of their potential
liability. The general notice also  may include a request for
and a release of information on PRPs and the substances at
the site.  The overall purposes of the general notice are to
provide PRPs and the public with advance notice of possible
future negotiations with EPA, to open the lines of commu-
nication between EPA and PRPs. and to advise PRPs of
      iil liability.
m addition to the general notices, EPA may issue a "special
notice," which invokes a temporary moratorium on certain
EPA remedial and enforcement activities. An RJ/FS special
notice initiates a 9Q
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Negotiation for the RI/FS
Mixed Funding
The PRP may condua tfae RI/FS if EPA determines the PRP
is qualified to conduct the RI/FS and if the PRP agrees to
reimburse EPA for the cost of oversight The terms of this
agreement to conduct the  RI/FS are outlined in either an
Administrative Order on Consent or a Consent Decree, both
of which are enforceable in court  If negotiations do not
result in an order or a decree,  EPA may use Trust Fund
monies to perform the RI/FS and seek reimbursement for its
costs.

Negotiations for the RD/RA

Where a special notice is used,  the moratorium for RD/RA
may be  extended to a total of 120 days. The terms of the
agreement to condua the RD/RA are outlined in a Consent
Decree, which all parties sign and is entered in court If ne-
gotiations do not result in a settlement, EPA may conduct the
remedial activity using Trust Fund monies, and sue for reim-
bursement of its costs with trie assistance of the Department
of Justice (DO J). Or EPA may issue a unilateral administra-
tive order or dirccUy file sxiit to force the PRPs to condua the
remedial activity.

Administrative Record

The information used by EPA to select a remedy at a site
must be made available to the public. This information, in-
cluding public comments, is compiled and maintained in the
administrative record files.   The  administrative record
serves two main purposes.  First, it ensures an opportunity
for public involvement in the selection of a remedy at a site.
Second, it provides a basis for judicial review of the
selection.

TOOLS FOR ENFORCEMENT

In addition to outlining the procedures for the enforcement
process, CERCLA provides tools that are designed to help
EPA achieve settiemenu. The CERCLA settlement authori-
ties may be used by EPA to foster negotiations with PRPs
instead of taking them to conn.  EPA believes that PRPs
should be involved early in the  Superfond process at a site.
It is in the best interest of PRPs to negotiate with EPA and to
conduct the RI/FS. as this can keep the process smooth and
costs can be controlled. EPA actively promotes settlements
with PRPs using tools in SARA and is continuing to work
towards improvements in the settlement process itself.
These new SARA tools include, but are not limited to:
CERCLA authorizes the use of "mixed funding."  In mixed
funding, sealing PRPs and EPA share the costs of the re-
sponse action and EPA pursues viable non-settlers for the
costs EPA incurred. Through guidance, EPA discusses the
use of three types of mixed funding arrangements. These are
"preauthbrization." where the PRPs condua the remedial
action and EPA agrees to reimburse the PRPs for a portion
of their response costs  "cash-outs," where PRPs pay for a
portion of the remedir'  costs and EPA conducts the work;
and "mixed work," v nere EPA and PRPs both agree to
condua and finance d* 'Crete portions of a remedial action.
EPA prefers  a "preauthorized" mixed-funding  agreement
where PRPs condua the work.
EPA encourages the use of ""*pd  funding to promote
settlement and site remediation, but will continue to seek
100 percent of response costs from PRPs where possible.
Use of mixed funding does not change EPA's approach to de-
termining liability. PRPs may be held jointly and severally
liable and EPA will seek to recover EPA's mixed funding
share from non-sealing PRPs whenever possible.

JJg ££injmjs Settlements

De mjnnnis settlements are «maiiy agreements  separate
from the larger settlement for the chosen remedy. Under &
minimi* settlements, relatively small contributors of waste
to a site, or certain "innocent" landowners, may resolve their
liability. Innocent landowners are parties who bought prop-
erty without knowing that it was used for hazardous waste
hmflfag,  Or EPA may enter into jfc minim is  settlement
agreements with a party where the settlement includes only
a minor portion of the response costs and when the amount
of waste represents a relatively minor amount  and is not
highly toxic, compared to other hazardous substances at the
facility, pe minimi* trtttemitnia also mav be used where the
PRP is a site owner who did not condua or permit waste
management or contribute to die release of hazardous sub-
stances, r&mjnjmjisettlements are typically used in con-
junction with covenant not to sue agreements. These agree-
ments generally will be in die form of administrative orders
on consent and are availabk for public comment

Covenants Not To Sue

A covenant not to sue may be used to limit die present and
future liability of PRPs, thus encouraging them to reach a
settlement early.  However, agreements generally include
"reopeners" that would allow EPA to hold parties liable fo|

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 conditions unknown at tbe time of settlement or for new in-
 formation indicating that tbe "'ipgdial action is not protec-
 tive of human health and the environment In some ca$e$.
 such as d& minimi^ jtfft>*nff*o,  releases may be granted
 without  reopeners. Covenants not to sue are likely to be
 used only in instances where the negotiating PRP is respon-
 sible for only a very small portion of a site, and. therefore,
 EPA is assured that any future problems with the site are not
 likely to be the result of that PRP*s contribution

 Non-binding Allocations of Responsibility (NBAR)

 NBAR is a process for EPA to propose a way forPRPs to
 allocate costs among themselves.  EPA  may decide to
 prepare an NBAR when the Agency determines this alloca-
 tion is likely to promote settlement AnNBARdoesnotbind
 the government or PRPs and cannot be admitted as evidence
 or reviewed in any judicial proceeding, including citizen
 suits.  Since each PRP may be held liable for the entire cost
 of response, regardless of the size of its contribution to a site.
 knowing EPA' s proposed allocation scheme may encourage
 the PRPs to settle out of court rather than run the  risk of being
 held fully responsible.

 STATE PARTICIPATION

The Superfund program allows for and encourages State
participation in enforcement activities.  First, EPA is re-
quired to notify the State of negotiations with PRPs and
provide the  opportunity for the State to participate.  States
may be a party to any settlement in which they participate.
In addition,  EPA is authorized to provide funds to States to
allow State  participation in enforcement activities and to
finance certain State-lead enforcement actions.
PUBLIC PARTIdPATION/COMMUNTTY
RELATIONS

EPA policy and the Superfund law establish a strong pro-
gram of public participation in the decision-making process
at both Fund-lead and enforcement sites. The procedures
and policy for public participation at enforcement sites are
basically the same as for non-enforcement sites. This fact
sheet is limited to those special differences in community
relations when the Agency is negotiating with or pursuing
litigation against PRPs.  The contact listed below has nu-
merous fact sheets on the Superfund program, including a
fact sheet on Public Involvement.

Community relations at enforcement-lead sites may differ
from community relations  activities at Fund-lead sites
because negotiations between EPA. DOJ  and PRPs gener-
ally focus on the issue of liability. The negotiation process.
thus, requires that some information be kept confidential
and is not usually open to the public.

When these discussions deal with new technical'informa-
tion that changes or modifies remedial decisions, this infor-
mation wiU be dccumented and placed in the administrative
record files. This process provides the public with critical
information and enables the Agency to move quickly to-
wards settlement.  Information on enforcement strategy,
details of the negotiations, such as the behavior, attitudes, or
legal positions of responsible parties; and evidence or attor-
ney work product material developed during negotiations.
must remain confidential
  FOR MORE INFORMATION:

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                                                            Attachment
                            AFFIDAVIT OF SERVICE
               UNITED  STATES  ENVIRONMENTAL  PROTECTION AGEIJCY
I hereby certify  that  being a person  over 18 years of age,  I served
a copy of the attached subpoena:

(checJc one)   (   )  in  person
              (   )  by  registered mail
              (   )  by  leaving the copy  at the principal place of
                    business,  which  is,
               (   ) by other method:
on the person named on the subpoena on
                                           [date]
                                   signature of
                                   server
                                  name  of  server
                                     title

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                                                           Attachment
                        UNITED STATES DISTRICT COURT
                       FOR THE 	 DISTRICT OF
IN THE MATTER OF:                                )           MISC. NO.
                                                 )
UN..TED STATES of AMERICA, Petitioner             )
                                                 )
              v.                                 )
    Respondent                                   )
                                                 )
	;	)
           PETITION FOR ENFORCEMENT OF AN ADMINISTRATIVE SUBPOENA
               ISSUED BY THE ENVIRONMENTAL PROTECTION AGENCY

    The united States of America, through the Attorney General,
and at the request of the Regional Administrator, United states
Environmental Protection Agency  (EPA) Region 	,  hereby petitions
the Court for an Order to Show cause why the Respondent should not
be ordered to comply forthwith with the administrative subpoena
previously served upon him.
    In support of this Petition, the Petitioner alleges as
follows:
    1.   TH« Court has jurisdiction over this matter pursuant to
28 U.S.C. J51331 and 1345, and 42 U.S.C. S9622(e)(3)(B) of the
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended.
    2.   	, the Regional Administrator of Region 	
of the EPA , [cityj, [state] has requested that the Attorney
General commence this action.

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                                    3
     [8.  By latter dated 	, Petitioner denied
Respondent's request and reaffirmed the subpoena date
Petitioner's letter is attached as Exhibit D.]
     9.   On       . the return date specified in the subpoena,
[Respondent failed to appear to testify; failed to answer certain
questions put to him; failed to provide the information requested
by subpoena.] [Note: Where a Respondent has failed to answer
specific questions, or has not provided certain documents, those
questions or documents should be specified.]
WHEREFORE, the Petitioner respectfully prays that:
     l.   This Court enter an Order to Show cause directed to the
Respondent, ordering the Respondent:
         (a) to appear expeditiously and Show cause why the
subpoena should not be enforced against him, and
         (b) to file expeditiously a written response to the
allegations in the Petition by a date certain.
     2.   This Court enter an Order at the conclusion of these
proceedings enforcing the EPA subpoena and requiring the Respondent
to comply ftaiy with the tarns of the EPA subpoena.
     3.   tti» Court render such other and further relief as  is
just and proper.

Dated:                                 Respectfully submitted,
                                       Attorney for

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                                    2
     3.   The Respondent, 	, is  [short description,
e.g.  "former owner of a waste transporting  and disposal business."
Be sure to  identify as an owner or corporation.J
     4.   Section 122(e)(3)(B) of CERCLA, as amended, 42 U.S.C.
9622(e)(3)(B), grants the President the authority to issue
administrative subpoenas to gather information necessary to
implement  §122 (Settlements).  Such information includes,
inter alia, the nature and extent of contamination at the site,
possible remedies and the identities of potentially responsible
parties.
    5.   The President delegated the authority to issue
administrative subpoenas under CERCLA to the Administrator of the
EPA on January 23, 1987 by Executive Order  12380 (52 Fed. Reg.
2923, January 29, 1987).  This authority was, in turn, delegated
from the Administrator to the Regional Administrators by Delegation
14-6, "Inspections, Sampling, Information Gathering, SuJ—oenas and
Entry for Response," signed September 13, 1987. (Attache^;
    6.   In conjunction with the investigation at [site], and
pursuant to $122(e) (3) (B) of CERCLA, as amended, 42 O.S.C.
9622(e)(3)(B), Petitioner issued an administrative subpoena on
[date], directing the Respondent to [provide certain information.]
The subpoena is attached and incorporated herein as Exhibit A.  An
affidavit of service is attached as Exhibit B.
     [7.  By letter dated 	, Respondent requested
Petitioner to extend the return date of the subpoena.  Respondent's
letter is attached as Exhibit C.]

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                                             OSWER # 9835.6
       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                             NOV IT 1988
MEMORANDUM
SUBJECT:  Guidance on Premium Payments  in CERCLA Settlements
            —H-.CL i.--t ^  •>*£-•	  \~
FROM:     Thomas  L.  Adams,  Jr.     \
          Assistant  Administrator  for Enforcement
            and Compliance  Monitoring
          J.  Winston porter
          Assistant  Administrator  for Solid Waste
            and Emergency Response
TO:       Regional Administrators
          Regional Counsels
          Regional Waste Management  Division Directors
I.   BACKGROUND AMD PURPOSE
     Attempts to  reach  settlements under  the Comprehensive
Environmental Response, Compensation,  and Liability Act
(CERCLA), 42 U.S.C. $59601 et  sea..  as amended by the
Superfund Amendments  and  Reauthorization  Act  (SARA) of  1986,
Pub. L. No. 99-499, pose  difficult problems for both the
regulated community and the Agency.  Potentially responsible
-parties  (PRPs) are often  reluctant to  settle hazardous  waste
enforcement cases because future  cleanup  costs are unknown;
they seek broad covenants not  to  sue in an effort to provide
a final determination of  the extent  of their  liability.
EPA, on the other hand, is reluctant to assume the risk that
further site remediation  win  be  required following

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                             2
completion of the work contemplated in the settlement
agreement or \_hat the cost estimate is inaccurate.
     One way to address these obstacles to settlement is for
EPA to require, in appropriate situations, a "premium
paymem" from PRPs in exchange for the Agency assuming
future remediation and financial risks.  The term "premium
payment" refers to a risk apportionment device, similar to
an insurance premium, under which the risk taken by the
government for providing PRPs with a release from liability
not usually available (e.g., a covenant not to sue without
the usual "reopeners" or a covenant not to sue for certain
types of cost overruns) is offset by a payment in excess of
the cost projected to complete the remedy.  The premium
should be sufficient to compensate EPA for taking the risks
associated with the following types of contingent future
costs:  (l) cost overruns when the selected remedy costs
more to complete than estimated; and (2) additional costs
when more remedial work is required because the selected
remedy is not adequately protective of human health and the
env i r onstent.1
     Th« purpose of this memorandum is to provide guidance
on th« use of premium payments in CERCLA settlements.  It
     1  As discussed in Section IV, infra. "Timing of
Premium Payment Setwlements," premium payment settlements
will not usually occur until after the remedy has been
selected.  Thus, the permanence of the remedy chosen will
not be affected by the existence of a premium payment and
such settlements are not considered to be  inconsistent with
Section 122(C)<1) Of CERCLA.

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                             3
describes the key features of a premium payment settlement,
considerations regarding timing of the settlement, and the
factors to be considered in deciding if a premium should be
accepted.  Settlements with de minimis parties, as
authorized by Section 122(g)(l)(A) of CERCLA, win usually
include a premium payment if the de minimis parties seek a
complete release from future liability.  Use of premium
payments in such settlements is discussed in the Agency's
"Interim Guidance on Settlements with De Mir^imis Waste
Contributors under Section 122(g) of SARA," 52 Fed. Reg.
24333 (June 30, 1987).
II.  THE PREMIUM PAYMENT CONCEPT
A.   Premiums Designed to Address Future Li^ftii;it;y
     Section 122(f)(l) of CERCLA authorizes EPA in certain
circumstances to provide .to PRPs covenants not to sue for
liability, including future liability, resulting from a
release or a threatened release of a hazardous substance
addressed by a remedial action.2  Typically, settlements3 in
which PRPs reimburse EPA for past costs and future oversight
costs and undertake performance of the remedy include
covenants not to sue for past costs and for present
     2  This authority  is discretionary, but  in two
circumstances, specified in section  I22(f)(2), EPA must

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                             4
liabilities (e.g., construction of the remedy).  They may
also include covenants not to sue for future liability,4
usually with certain exceptions (i.e., reopeners).  Under
Section 122(f)(3), covenants not to sue for future liability
may not take effect until EPA certifies that the remedial
action is complete.
     As to future liability, Section I22(f)(6)  provides that
in most situations, a covenant not to sue for future
liability must include a "reopener" that allows EPA to
pursue the settling PRPs concerning conditions that were
unknown at the time EPA certified that the remedial action
was complete.  Agency policy also requires that settlements
include a reopener to the covenant for future liability
where new information reveals that the remedy is not
protective of human health and the environment.5
     4  In Section 122(fHl) of CERCLA, Congress authorizes
EPA to issue covenants not to sue for both present liability
and future liability.  In the context of covenants not to
sue involving remedial action, "EPA interprets present
liability as a responsible party's obligation to pay those
response costs already incurred by the United states related
to a site and to complete those remedial activities set
forth in the Record of Decision for that site.  Future
liability refers to a responsible party's obligation to
perform any additional response activities at the site which
are necessary to protect public health and the environment."
See EPAfs "Interim Guidance on Covenants Not to Sue Under
Section I22(f) of SARA," 52 Fed. Reg. 28038, 28040 (July 27,
1987).

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                             5
     Under Section 122(f)(6), the Agency may exclude the
"unknown conditions" reopener from the covenant not to sue
for future liability if EPA determines that "extraordinary
circumstances" exist.6  For purposes of this memorandum, the
"unknown conditions" and the "new information" reopeners
will be treated together.  In determining whether
extraordinary circumstances exist, each case should be
evaluated using the various factors specified in Section
     6  However, under Section 122(f)(6)(B), even if
extraordinary circumstances exist, the unknown conditions
reopener may not be waived if the settlement does not
otherwise provide reasonable assurance that public health
and the environment will be protected from any future
releases.

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                             6

122(f)(6)(B).7  The premium payment itself should be

considered  in the analysis as -well.

     If extraordinary circumstances exist, the Agency may

waive the reopeners to the covenant not to sue for future

liability in a premium payment settlement.  Given the broad

scope of the factors to be evaluated, the inclusion of a

premium payment in a settlement cannot be the sole, or even

the predominant, determinant of extraordinary circumstances.

The presence of a premium should be one of several factors

which,  when taken together, lead the Agency to conclude that
     7   Section 122(f)(6) refers to both the factors
specified in Section I22(f)(4) and additional factors that
reiterate the guidance set forth in the Interim CERCLA
Settlement Policy.  The additional factors relate to the
volume and character of the substances at the site; to risks
associated with the strength of the government's case on
liability, ability to pay, precedential value, and
inequities and aggravating considerations; and also to
public interest considerations.  The factors specified in
Section 122(fM4) relate primarily to the nature of the
remedy.  They include:
     a.  The effectiveness and reliability of the remedy, in
light of the other alternative remedies considered for the
facility concerned.
     b.  The nature of the risks remaining at the facility.
     c.  The extent to which performance standards are
included in the order or decree.
     d.  Th« extent to which the response action provides a
complete remedy for the facility, including a reduction in
the hazardous nature of the substances at the facility.
     e.  The extent to which the technology used in the
response action is demonstrated to be effective.
     f.  Whether the Superfund or other sources of funding
would be available for any additional remedial actions that
might eventually be necessary at the facility.
     g.  Whether the remedial action will be carried out, in
whole or in significant part, by the responsible parties
themselves.
     What constitutes extraordinary circumstances must be
based on the facts of each case.

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                             7
the circumstances and terms of the settlement warrant the
granting of a covenant not to sue without reopeners.8
B.   Premium? Designed to Address Cost Overruns
     In a settlement in which the PRPs agree to reimburse
the government for cleanup costs associated with present
liability, the issue of how to calculate as yet uncertain
costs associated with the anticipated remedy must be
addressed.  Generally, the government desires that PRPs
finance all response costs, and thus PRPs must await the
completion of the remedial action before the extent of their
present liability is established.  However, if the PRPs
would prefer to firmly establish the "price tag" for present
liability before cleanup  is completed, one option is to
require PRPs to provide funds believed to be sufficient to
cover projected cleanup costs, plus a premium to protect
against cost overruns.  Although the government as a matter
of course seeks to avoid  assuming risks associated with the
uncertainties of cost projections, the payment of.
appropriate cost overrun  premiums should ensure that,
viewing the cost recovery program as a whole, the government
'is protected against those uncertainties.  Settlements which
include a premium for present  liability, including cost
      8   in  certain situations,  EPA may  reach  settlements
where extraordinary circumstances  exist without  requiring _a
premium  payment.   For example,  EPA may  exclude the  unknown
conditions  reopener without a premium payment in a
settlement  with a PRP who has invoked the protection of
Chapter  7 bankruptcy laws.

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                              8
overruns premiums, may be appropriate, but the traditional
reopeners would be applied to future liability in such
settlements.
Ill .  AMOUNT OF THE PREMIUM PAYMENT
     As noted above, premium payments may serve two purposes
—  to provide funds to protect public health and the
environment in the event that additional response work win
be  needed at the site or to protect against the risk that
site remediation cost overruns may occur.  In evaluating the
offer, EPA must determine whether the amount of the premium
is  adequate given the risks assumed.  The factors specified
in  Sections I22(f)(4) and 122(f)(6) of CERCLA, used to
•determine if extraordinary circumstances exist, should also
be  considered in determining  the amount of the premium
payment.  The factors specified in Section I22(f)(4) that
relate to the effectiveness,  reliability, and permanence of
the remedy are particularly important in determining the
likelihood that additional response work may be necessary
and the associated possible costs.
A.  Future ^ 1 ah j 1 j t Y
     Despite best  efforts by  the Agency or PRPs to design
and implement  a  satisfactory  remedy,  future problems may
arise at the site  due  to remedy failure or mistaken
assumptions about  the  effectiveness of the remedy,  in
addition, the  discovery of  new information about  site
conditions or  new  scientific  determinations  regarding what

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                             9
levels of contaminants present a risk to humans or to the
environment may make additional work necessary.  One way
such new information may become available is through the
Section 121(c) five year review EPA is required to conduct
for all remedial actions at sites where hazardous substances
remain.
     In determining the amount of a "future liability"
premium, two general factors should be considered:  the
likelihood that future remediation will be required and the
cost of such remediation.  The resulting premium could be a
percentage of the total estimated cost of the remedy.
     1.   The likelihood that further remediation will be
required;  The need for further work may depend on the
effectiveness -and reliability of the remedy.  Factors such
as whether the remedy selected has been demonstrated to be
effective under similar conditions at other sites, whether
the remedy selected involves treatment or incineration as
opposed to containment, whether the settlement agreement
includes specified performance standards, or the extent to
which the remedy provides a comprehensive solution to site
contamination, all bear on the level of the premium.
     The risk that further work will be required also
depends on the extent -to which all relevant environmental
conditions have been discovered and evaluated.  For example,
additional information about relevant conditions developed

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                             10
during the remedial design phase may enhance the Agency's
confidence in the selected remedy.
     In addition, the time necessary to complete the remedy
may affect the risk of further co itamination occurring.  For
example, if a long period of temporary storage will precede
disposal or treatment, the premium should be calculated so
as to protect against releases during storage.
     2.   The cost of further remediation;  Any premium
payment must be based in part on an estimate of the cost of
conducting additional remedial work should the chosen remedy
fail to abate the hazards posed by the site.  EPA's estimate
should be based on a site-specific estimate of the most
probable costs of the additional response action.  Where the
estimated cost of replacing, repairing, or otherwise
supplementing the remedy is very high, the government should
either retain the right to pursue the settling PRPs for
additional work or costs, or require a premium payment
commensurate with the cost and the risk that future
remediation will be necessary.
B.  Co'st Overrun Premiums
     The Agency also recognizes the possibility that a
selected remedial action will cost more than originally
estimated because, for example, (1) the cost estimate was
inaccurate or (2) estimates concerning the aimr.iit or type of
material to be treated or the  length of time  for treatment

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                             11
were inaccurate.9  EPA can guard against these cost overruns
by reserving the right to see.k reimbursement for any
overruns or by requiring an up-front payment of a "cost
overruns" premium.  The amount of the premium should be
based on the reliability of the Agency's cost estimate,
taking into account such factors as the length of time
needed to complete the remedy and any historical data on
instances where actual costs of site remediation exceeded
projected costs.  The premium could be a percentage of the
estimated cost of the remedy based on the risk of such cost
overruns.
C.  Settlement Amount
     In determining the total settlement amount, the premium
payment must be added to the total response costs.  This
base amount to which the .premium is added should include
past costs, indirect costs, prejudgment interest, the
estimated cost of the remedy (unless performed by PRPs),
oversight costs, operation and maintenance costs,-and
technical assistance grants.  The total settlement amount
vould be the base amount plus the premium.  Generally, the
settlement agreement should specify which portion of the
premium payment is allocated to present liability and which
portion to future liability.
     9  If estimates concerning the amount or type of
material to be treated were inaccurate because of unknown
conditions or new information, the resulting additional
costs would be considered part of the responsible party's
future liability.

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                             12
IV.  TIMING OF PREMIUM PAYMENT SETTLEMENTS
     The Agency usually should not consider a premium
payment settlement unless it has adequate information about
the identity, waste contributions, and viability of PRPs for
the sire concerned, and about the costs of remediating site
contamination.  The Agency develops information about PRPs
through PRP searches, the remedial investigation and
feasibility study  (RI/FS), and information-gathering
activities under Sections 104(e) and 122(e) of CERCLA and
Section 3007 of the Resource Conservation and Recovery Act.
A Nonbinding Preliminary Allocation of Responsibility
(NEAR), authorized by Section I22(e)(3) of CERCLA, if
prepared, may also provide significant information for
evaluating a premium payment settlement.^°
     Premium payment settlements should not be.pursued until
the Agency is able to determine the likely remedial action
and estimate, with a reasonable degree of confidence, the
total cost of cleaning up the site, including oversight and
operation and maintenance.  The Agency usually will arrive
at this level of confidence only after the RI/FS and a
     10  see. EPA's "Interim Guidelines for Preparing
Nonbinding Preliminary Allocations of Responsibility
(NEAR)," 52 Fed. Reg. 19919 (May 28, 1987).  Section
122(e)(3) of CERCLA authorizes EPA, at its discretion, to
prepare an NEAR which allocates 100 percent of response
costs among PRPs in order to promote and expedite settlements,

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                             13
Record of Decision (ROD) have been completed.11  A premium
payment settlement could be considered earlier if the Agency
is relatively confident of its .ability to estimate future
response costs, and the premium payment amount reflects the
increased level of uncertainty.12
V,  USE OF THE PREMIUM
     Normally, premium payments will be made to the
Hazardous Substances Superfund.  The Agency is exploring the
circumstances under which it may be appropriate for
settling PRPs to establish site-specific trust fund or
escrow accounts.  Further guidance on this issue will be
provided by separate memorandum.
     If the costs of the remedy exceed the recovery from
settling PRPs  (including the premium), EPA will generally
seek to recover remaining costs from other PRPs.  The Agency
may also approve comprehensive settlements in which certain
PRPs pay a premium to other PRPs who, in exchange; agree to
accept the responsibility of those premium-paying PRPs
regarding site liability, including any possible future
liability.
     11  Timing considerations for settlements with flfi
minimis PRPs are discussed in greater detail in EPA's
"Interim Guidance on Settlements with ne Minimis Waste
Contributors Under section 122(g) of SARA," 52 Fed. Reg.
24333 (June 30, 1987).
     12  Early premium payment settlements may also be
appropriate in exceptional cases, such as where bankruptcy
exists.

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                             14
     Normally, both the base amount and the premium will
reduce the government's claim  for costs associated with
Performance of the remedy.  However, in settlements
involving a premium for future liability, EPA may segregate
the portion of the premium paid for future liability.  In
certain cases, EPA may determine that it is appropriate to
require PRPs to set aside the premium in a site-specific
account established by the PRPs for use if the remedy fails.
If such an account is established, future liability premiums
would not reduce the amount owed by subsequent settlors or
non-settlors for present liability (i.e., the present
remedy).  Rather, premiums for future liability will only
reduce subsequent settlors' or non-settlors' future
liability when and if additional cleanup is required to
protect public health or the environment.  Until then, the
government will not have accepted the premium payment.13
     Premium payments may be particularly useful in mixed
funding or mixed work situations.  For example, EPA may
require a premium payment from PRPs to protect against cost
overruns and remedy failure for EPA's portion of the work in
a mixed funding or mixed work  site.14
     13  The settlement agreement also should specify how
the premium payment is to be distributed if it is not used
for remedial-activities.
     14  Where a flfi minimis -settlement precedes a mixed
fundin-a agreement, any premium payment obtained from d£
minimis parties would reduce the share to be contributed by
the Fund as part of the subsequent settlement.

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                             15
VI.  PURPOSES AND USE OF THIS MEMORANDUM
     This memorandum and any internal procedures adopted for
its implementation, are intended solely as guidance for
employees of the U. S. Environmental Protection Agency.
They do not constitute rulemaking or final action by the
Agency and may not be relied upon to create a right or a
benefit, substantive or procedural, enforceable at law or in
equity, by any person.  The Agency may take action at
variance with this memorandum or its internal implementing
procedures.

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         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                     OSWER Directive Nunber 9835.4-2A
                            NOV  18 1968
MEMORANDUM
SUBJECT:  Initiation of PRP-financed Remedial Design in Advance
          of Consent Decree Entry

FROM:     J. Winston TortJr
          Assistant Administrator for
          Solid Waste and Emergency Response
          Thomas L. Adams, Jr.     _
          Assistant Administrator for
          Enforcement and Compliance Monitoring

TO:       Regional Administrators

     This memorandum addresses a process for expediting the
initiation of response work by potentially responsible parties
(PRPs) at sites where agreements with PRPs have been reached and
where PRPs will agree to begin remedial design work promptly, but
where a consent decree has not yet been entered by the court.

     For PRP-financed remedial design/ remedial action  (RD/RA)
activities, the initiation of response work, including the
remedial design, has historically been dependent on the entry of
a consent decree.  This usually means a delay of at least several
months between the time agreement is reached and when the consent
decree is entered and work actually begins.  Delays in initiating
remedial designs and consequently remedial actions, are
inconsistent with EPA's effort to expeditiously remediate sites
and meet the statutory goal for remedial action starts.  It  is
in the interest of both the government and PRPs to begin work as
quickly as possible.

     EPA's strategy is to encourage PRPs to agree to settlements
wherein engineering design work can proceed upon the lodging of a
consent decree by EPA, or where litigation is already  pending,
upon execution of a stipulation.  Where PRPs have agreed to  early
initiation of a remedial design and a complaint has not been

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                              OSWER Directive Number 9835.4-2A
                              - 2 -

filed prior to the lodging of a consent decree, the proposed
consent decree should provide for conduct of the remedial design
upon lodging.  The consent decree should specify the obligations
regarding design that start upon lodging.  In addition, the
consent decree should clarify that, following entry of the
consent decree, these obligations concerning remedial design are
subject to enforcement  (including stipulated penalties) pursu- nt
to the consent decree retroactive to lodging.  Where a complaint
has been filed, alternatively, a stipulation for conduct of the
remedial design may be  filed after the ROD is signed, if
negotiations are sufficiently well along that EPA is confident
that the PRPs will agree to commit to conduct the remedy.  Such a
stipulation should include schedules and be enforceable by the
court.1   The stipulation should specify that the obligations
thereunder shall be obligatory until expressly superceded by any
subsequently entered consent decree.   Another way which is less
preferred, but may be used to accomplish this same goal where
PRPs have agreed to early initiation of a reaedial design, is for
EPA to issue an administrative order solely for the remedial
design, leaving the remaining portions of the reaedial action for
a consent decree under  Section 122 of CERCLA.   In determining
whether to issue an order for a remedial design, Regions should
consider the preference for a complete remedial design/remedial
action settlement and whether it is likely that the PRPs will not
agree to conduct the remedial action.

     EPA recognizes that there are limited risks in requiring the
remedial design to begin prior to the entry of a consent decree.
First, it is conceivable that the settlement will not be agreed
upon by the parties or  ultimately approved by the court, which
would require additional expenditures by the PRPs to modify the
remedial design.  In keeping with the public's right to review
consent decrees, the Federal Register notice prepared by DOJ
     1      Under either approach,  reaedial design work would  not
have to  be delayed  pending completion  of CERCLA Section  122(d)
procedure*  for  public  coaaent   of  proposed  consent   decrees.
Consistent with  established Agency policy/  a reaedial design is
considered to be a removal action, and thus outside the  scope of
Section  122(d)(l),  which  covers  proposed agreements concerning
reaedial  action  under Section  106.   Thus,  while the Agency  may
voluntarily  agree  to  subject the terms  of  the reaedial  design
portion of a proposed Section 106 remedial  action  consent decree
to the procedures of Section 122 (d), there is no legal requirement
to do so.

     2      A Section 106 unilateral  administrative order  is  not
subject to  Section  12*2 (d)  requirements,  so that remedial design
work could begin immediately.

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                            OSWER Directive Number 9835.4-2A



                           ATTACHMENT

                  REMEDIAL DESIGN STIPULATION AND AGREED ORDER

                   UNITED STATES DISTRICT COURT
                    DISTRICT OF '	'"_
UNITED STATES OF AMERICA,

                                                  CIVIL ACTION

               PLAINTIFF                          NO. 	

v.
               DEFENDANTS,
                   STIPULATION AND AGREED ORDER

     Plaintiff, the United states of America,  ("United States")
has filed an action under Sections 106 and  107 of the
Comprehensive Environmental Response, Compensation, and Liability
Act, as amended, 42 U.S.C. Section 9606,  9607 et seq.,  (CERCLA)
against                            ("Settling Parties").

     In order to expedite the commencement  of the remedial  action
at the _^_____ site, which  is the subject of this  action,
the United States  and the Settling Parties,  stipulate as  follows:

[The following provisions of  the stipulation are provided as
examples^  The provisions should be developed  on a  site-specific
basis and reviewed for  completeness by the  Region.  OSWER
Directive Mo. 9350.0-4A "Superfund Remedial Design  and  Remedial
Action Guidance" may be consulted for guidance on steps and
deliverable*,  state and/or Regional Remedial  Project Manager
review requirements should be included as appropriate.   Language
in the stipulation should closely track  that used  in  the workplan
attached to the Consent Decree' so as to  eliminate any possibility
of inconsistency].

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                                OSWES. Directive Number 9835.4-2A
                              - 3 -

should specify that certain actions are triggered by, and start
upon, lodging a consent decree or filing a stipulation.  Since
the public will have already had the opportunity to comment on
the remedy, where the remedial design is consistent with the
remedy, no additional comment is required.  Comments should,
therefore, be directed toward the settlement itself and the risk
of remedial design modification is minimal.  Second, Regions
should ensure that the PRP's remedial design, upon approval by
EPA, is acceptable for implementation by EPA in the event that
the PRPs do not agree to implement the remedial action.
Notwithstanding these risks, the requirement for early initiation
of remedial design work is important in the context of all RD/RA
negotiations.  Language requiring these actions should go to the
PRPs as part of, or along with, the draft consent decree at the
time special notice is issued.  A model stipulation is attached.

     The effect of this strategy will be to reduce the time
involved prior to initiation of on-site response work in those
cases where PRPs are committed to undertaking the remedial action
and willing to begin early design.  This will further the
statutory and programmatic goal to facilitate remedial action
starts.  For more information please contact Brad Wright in OWPE
at FTS 382-4837 or Janice Linett in OECM-Waste at FTS 475-8173.
Attachment

cc:  Directors, Waste Management  Division,
      Regions I, IV, V, VII, VIII
     Directors, Hazardous Waste Management  Division,
      Regions III, VI
     Director, Emergency and Remedial  Response Division,
      Region II
     Director, Toxics and Waste Management  Division,  Region IX
     Director, Hazardous Waste Division,  Region X
     Regional Counsels, Regions I-X
     Superfund Enforcement  Branch Chiefs
     RCRA/dRCIA ORC Branch Chiefs
     David Buente, DOJ

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                                 OSWER Directive Number 9835.4-2A
Stipulated by:
ROGER MARZULLA                      [*RP  II]
Acting Assistant Attorney           [Address]
  General
Land and Natural Resources         	
  Division                          [PRP  12]
U.S. Department of Justice          [Address]
Washington, D.C.  20530
THOMAS L. ADAMS, JR.
Assistant Administrator
for Enforcement and
  Compliance Monitoring
U.S. Environmental Protection
   Agency
Washington, D.C.  20460
[REGIONAL ADMINISTRATOR]
[Regional Address]
[ORC ATTORNEY]



It is so ordered this __....... day of mmm_^__ 19.
                                    United States District Judge

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                                  OSWZR Directive Number 9835,4-2A


A.   1)   Within thirty  (30) days of th« filing of this
          stipulation the Settling Parties shall retain qualified
          personnel to prepare detailed plans and specifications
          for implementation of each elemenet of the selected
          remedy described  in the EPA Record of Decision ("ROD")
          for ________________ site dated                   .

     2)   Within thirty  (30) days of the filing of this
          stipulation the Settling Parties shall submit to the
          United States  for its review and approval a detailed
          schedule for the  completion of the Remedial Design
          including specific milestones for submissions of plans
          and specifications, set forth in the Workplan, dated
          _        which  is  attached.  [The stipulation should
          include a specific schedule for the preliminary 30, 60,
          90, and the final 100 percent design completion
          milestones as  well as any intermediate submissions that
          the Region deems  necessary.]

     3)   The Settling Parties shall provide monthly reports to
          the United States in accordance with the schedule
          developed pursuant to paragraph A.2. above, together
          with all background data, analyses and other supporting
          information for review and written approval by EPA.   In
          the event that the United States disapproves of any
          plan or portion thereof, it shall specify in writing
          the reasons why it believes such plan or portion
          thereof does not  conform to the ROD or applicable law
          or regulation  including the National Oil and Hazardous
          Substances Pollution Contingency Plan  ("NCP"), 40
          C.F.R. Part 300.

B.    All plans and specifications shall be consistent with
applicable requirements  contained in the ROD and in accordance
with CERCLA and the NCP.

[It is important to re-emphasize here that the above provisions
should be used as a point of departure for framing those which
will actually be included in the stipulation.  Such a stipulation
is valid only for Remedial  Design work and will be entered  into
by the United States in  eon-Junction with the lodging or
anticipated lodging of a Consent Decree for RD/RA.  Actual
stipulations made should be consistent with this definition. ]

C.    The Parties to this stipulation acknowledge that  this
stipulation has been entered into in anticipation of settlement
and may be affected by a consent decree expected to be  entered
subsequent to this filing.  The Parties agree to comply with the
terms of this stipulation unless the terms of any subsequently
entered consent decree expressly supersede the terms of this
stipulation.

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              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON. D.C. 20460
                         DEC I 4 1988               OSWER DIR.  *984i.o
                                                          O«ICE at
                                                  SOLID WASTE AND EMERGENCY «ES»ONS
MEMORANDUM
SUBJECT:   Interim Strategy for Enforcement of Title III and
           CERCLA 1103  Notification Requirements

FROM:      Bruce  M.  Diamond,  Director
           Office of Waste Programs Enforcement

TO:        Director,  Waste Management Division
           Regions IV,  V,  and VIII

           Director,  Emergency & Remedial Response Division
           Region II

           Director,  Environmental Services Division
           Regions I and VI

           Director,  Hazardous Waste Management Division
           Region III

           Director,  Toxics and Waste Management Division
           Region IX

           Director,  Hazardous Waste Division
           Region X

           Director,  Congressional & Intergovernmental Liaison
           Region VII


PURPOSE

     The purpose of .this memorandum is to provide interim
guidance concerning enforcement of 11302, 303, 304, 311, 312, and
322 of tb» Emergency Planning and Community Right-To-Know Act
(Title II! ef the Superfund Amendments and Reauthorization Act -
SARA) end  the 1103 notification requirements of the Comprehensive
Environmental Response, Compensation and Liability Act  (CERCLA) .
The interim  strategy will discuss the following subjects:


o    Enforcement provisions under Title III  (11325 and  326), and
     CERCIA  1109;

o    General priorities for EPA enforcement;

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                                                OSWER DIR. 19841.0

 o     Enforcement  of  CERCLA  1103 and Title III |304;

          Relationship between CERCLA |103 and Title III §304;
          The  substance  of  §304 reports;
          Identifying I103/J304 violations;
          Priorities;
          Enforcement response;

 o     Enforcement  of  I1302,  303, 311, and 312;

          Identifying violators;
          Enforcement response;

 o     Enforcement  of  1322;

 o     coordination; and

 o     Delegations.

      Central to the  enforcement of Title III is the development
 of working  relationships with the Regional Preparedness
 Coordinator, the  §313 enforcement contact, the Office of Regional
 Counsel, enforcement personnel from other media offices, and most
 importantly, with the State Emergency Response Commissions
 (SERCs) for each  State in the Region.  This guidance provides a
 framework for  implementing  the enforcement program in the
 Regions.


 STATUTORY STRUCTURE  AND  ENFORCEMENT PROVISIONS

      Title  III establishes  requirements for emergency planning at
 the State and  local  level,  and provides residents and local
 governments with  information concerning potential chemical
 hazards present in their communities.  The Act is divided into
 three subtitles.  Subtitle  A, Emergency Planning and
Notification, establishes a framework for local emergency
planning.   Subtitle  B, Reporting Requirements, promotes community
awareness of hazardous chemicals present in the locality.
Subtitle C, General  Provisions, relates to enforcement, trade
 secret protection, and public availability of information.

     The enforcement sections of Subtitle C  (1325 and 1326)
 authorize ZPA, State and local governments, and citizens to take
 legal action against owners or operators of facilities who fail
 to comply with Title III.   EPA has administrative and civil
judicial authority to enforce Title III.  The United States may
also seek imprisonment and  fines for violations of the §304
emergency notification requirements and violations of the |322
trade secret provisions.  States, local governments and citizens

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                                                OSWER DIR. 19841.0

can take civil judicial actions to enforce against violators of
various sections of the Act.

     For each requirement in Title III, the enforcement
authorities vary.  In son* instances, Federal authority is
primarily administrative, in other instances it is judicial.  For
some, but not all, requirements there is express authority for
State and local suits.  For some, but not all, requirements there
are citizen suits.  Also, 1109 of SARA amended CERCLA by
providing civil administrative penalties for violations of
specified provisions of CERCLA, including violations of fl03
(relating to failure to report releases of CERCLA hazardous
substances).  Section 109 authorizes Class I and Class II
administrative and judicial penalties for violations of 1103.

     Title III enforcement authorities are summarized in Table I
(next page).  Appendix A provides further details on facility
reporting requirements and CERCLA |103/Title III enforcement
authorities.
GENERAL PRIORITIES FOR EPA ENFORCEMENT

     The Office of Solid Waste  and Emergency Response  (OSWER) and
the Office of Pesticides and Toxic Substances  (OPTS) share
responsibility for developing the strategy  for Title III
enforcement,  within OSWER, the Office  of Waste Programs
Enforcement  (OWPE) is responsible for developing the enforcement
strategy for 11302 and 303  (Emergency Planning), 1304  (Emergency
Notification), 1311  (Material Safety Data Sheet  (MSDS)
Submissions), and 1312  (Emergency and Hazardous Inventory
Submissions).  OPTS issued a compliance monitoring  strategy  for
1313 on July 15, 1988.  Section 313 enforcement will not be
discussed in detail in this interim strategy.

     With the notable exception of 1313, Congress intended that
implementation of Title ZII be  mainly a State and local function.
The Title III enforcement strategy acknowledges that EPA, States,
local governments and citizens  share responsibility for enforcing
Title III.  Two approaches are  planned  for  enforcing 11302-312.
First, EPA will initiate enforcement actions against owners  and
operator* who fail to provide emergency notice after a release as
required under 1304.  In developing these cases, EPA will
coordinate with the SERCs and Local Emergency Planning Committees
(LEPCs) to ascertain the facilities' compliance with other
sections of the Act.  Second, Regional  enforcement  personnel will
develop enforcement contacts in all the SERCs to coordinate
activities for enforcement of violations of the planning
provisions (||302-303) and the  community right-to-know reporting

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                                                    AOTHORJTHS
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   ifotjtitiiyiiT

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fU*l*Ct  tC Act.


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                                                OSWER DIR. 19841.0

APPENDIX A.  Summary of Requirements and Enforcement Author it ies


A. section*  302 and 303.  Section 302 (c) requires the owner or
operator of  a  facility at which an extremely hazardous substance
(EHS) im present  in an amount exceeding its threshold planning
quantity (TPQ) to notify the State Emergency Response Commission
(SERC) by May  17, 1987, that the facility is subject to Title
III.  Section  303 (d) requires owner/operators of facilities
regulated under 1302 to notify the Local Emergency Planning
Committee  (LEPC)  of a facility representative to participate in
the planning process.  This notification should have occurred no
more than 30 days after the LEPC was established (or no later
than September 17, 1987).  Section 303(d)(3) requires the
facility to  supply promptly information upon request by the LEPC.

     Section 325 (a) authorizes the Administrator to order owners
or operators of facilities to comply with |{302 and 303.  The
local U.S. district court has jurisdiction to enforce the order
and impose a penalty.  Under 1326, State and local governments
can bring civil action against an owner or operator for
violations of  1302 (c); SERCs and LEPCs can bring a civil action
for violations of |303(d).  For State and local suits under 1326,
the U.S. district court for the jurisdiction in which the alleged
violation occurred has authority to impose civil penalties
provided by  the statute.

     Penalty;  Violations of 11302 and 303 subject the violator
to civil penalties of not more than $25,000 for «ach day the
violation or failure to comply with the order continues.


B.   Section 304.  Section 34)4 requires owners or operators of a
facility at  which there has been a release of an EHS or CERCLA
hazardous substance in an amount greater than or equal to its
report able quantity (RQ) , to immediately notify the SERCs and
LEPCs of all States and districts likely to be affected.  Tor
releases of  EKSs  or CERCLA hazardous substances without a
designated reportable quantity, a release of one pound or more
triggers the notification requirement.  For releases of CERCLA
hazardous substances, notification must also be given to the
National Response Center  (NRC) .
             iioa.  The  Act requires the person in charge of  a
vessel or facility to notify the NRC immediately when there  is  a
release of a CERCLA  hazardous substance in an amount greater than
or equal to  its RQ.   For hazardous substances without a
designated RQ, a release of one pound or more triggers the notice
requirement .

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                                                OSWER DIR. 19841.0

     The CZRCLA  1109 and Title III {325 enforcement provimions
for emergency notification are vary similar.  Both establish
administrative penalties and the authority to bring actions
judicially to assess penalties for non-notification.  Both CERCLA
and Title III also provide criminal fines for knowingly failing
to provide notice or providing false or misleading information.
Section 326(a) of Title III authorizes any citizen to file a
civil action in  the U.S. district court for failure to submit a
follow up report on a release required to be reported to State
and local officials under |304(c).  state and local governments
may bring civil  action under the citizen suit provisions for 1304
violations.1

     Penalties;  Under Title III §325 and CERCLA 1109, Class I
administrative penalty of not more than $25,000 per violation and
Class II administrative penalty of not more than $25,000 per
violation per day may be assessed.  Penalties also may be
assessed judicially.  In the case of subsequent violations,
penalties of up  to $75,000 for each day a violation continues may
be assessed.  Any person who knowingly fails to provide notice in
accordance with  CERCLA fl03 or Title III 1304 shall, upon
conviction, be fined not more than $25,000 or imprisoned  for not
more than two years, or both.  For second or subsequent
convictions, the violator shall be subject to a fine of not more
than $50,000 or  imprisoned for not more than five years,  or both.


C.   Sections 311..312 and 313.  Section 311 requires the owner
or operator of any facility that is required to prepare or have
available a Material Safety Data Sheet  (MSDS) for a hazardous
chemical under the Occupational Safety and Health Administration
(OSHA) Hazard Communication Standard and has a certain amount  of
the chemicals onsite, to submit the MSDS  (or a list of the MSDSs)
to the SERC, LEPC, and local fire department before the later  of .
October 17, 1987, or three months after the owner or operator  is
required to prepare or have available a MSDS under OSHA.   As a
result of the OSHA expansion, facilities in the nonmanufacturing
sector are required to submit MSDSs or a list by September 24,
1988.
     1    Title  III  1329  defines person as "any individual,
trust, firm, joint stock  company,  corporation,  (including a
government corporation),  partnership,  association,  State,
municipality, commission,  political  subdivision of  a state,  or
interstate body.11  Section 326  authorizes any BtzifiD to bring a
civil action against owners and operators for their failure  to
submit reports specified  under  1326(a)(1).

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                                                OSWER DIR. 19841.0

     Under  1312(a), the owner or operator of any facility that is
required to prepare or have available a KSDS for hazardous
chemicals above a certain threshold level must also submit an
emergency inventory fora containing "Tier I" information
(aggregate  information on the amounts and location of hazardous
chemicals at the facility).  The forms are due by March 1, 1988
and must be submitted annually thereafter.  Section 312(e)(l)
requires the owner or operator to provide "Tier II" information
(chemical specific) to the SERC, LEPC, and/or the fire department
with jurisdiction over the facility upon request.

     Under  1313, owners or operators of certain facilities that
manufactured, processed, or otherwise used a statutorily defined
toxic chemical in certain amounts in the previous year must
submit a toxic chemical release form to EPA and the State for
each such chemical beginning July 1, 1988 and then annually
thereafter.

     For each of these three sections, the Administrator can
assess civil penalties through issuance of administrative orders
or bring actions to enforce compliance and assess penalties in
the U.S. district court.  State and local governments can bring
civil actions for violations of 11311 and 312 and they can bring
an action against violators of |313 through the citizen suit
provisions.  Citizens have the authority to bring action against
an owner or operator for violations of all three sections.  In
civil suits, the district court has the authority to enforce the
requirement and to impose any civil penalty provided for
violation of the particular requirement.

     Penalties:  Violation of 1311 subjects the violator to a
civil penalty of not more'than $10,000 for each such violation.
Section 312 and 313 violations subject the violator to civil
penalties of not more than $25,000 for each such violation.  Each
day a violation continues constitutes a separate violation.


D.   Section 322 and 323.  Section 322 covers the submittal and
verification of trade secret information.  For violations of this
section, the Administrator may assess a civil penalty by
administrative order or bring action to assess and collect
penalties in the U.S. district court.  Criminal penalties can be
levied for  persons who knowingly and willfully disclose trade
secret information.

     Section 323 requires owners or operators of facilities
subject to  11311, 312, and 313 to provide information to  health
professionals when requested, -subject to certain restrictions.
The Administrator can assess an administrative penalty or file
an action to assess and collect a penalty in U.S. district court.

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                                                OSWER DIR. 19841.0

Health professionals may also bring an action against a facility
owner or operator in the U.S. district court.


     p«naltl«s:  Any parson who fails to furnish information
required undar |322(a)(2) or requested by the Administrator und«r
1322(d) shall b« liable for a penalty of not more than $10,000
per violation per day.  For frivolous claims, the trade secret
claimant is liable for a civil penalty of $25,000 per claim.  Any
person who knowingly and willfully discloses trade secret
information shall, upon conviction, be subject to a fin* of not
more than $20,000 or to imprisonment not to exceed one year, or
both.   Any person who violates 1323(b) shall be subject to a
civil penalty not to exceed $10,000 per violation per day.

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                                                OSWER DIR. 19841.0

      During preparation  for TSCA  ||5,  6, and 8 inspections, OPTS
 Regional  enforcement  personnel  will  screen the applicability of
 1313  to targeted facilities.  If  the facility is subject to |313,
 subsequent inspections will monitor  compliance.  OPTS enforcement
 personnel will  check  for compliance  with the remainder of the
 Title III reporting requirements  during these inspections and
 will  refer possible violations  to OSWER for enforcement action.
 OSWZR enforcement personnel should cross check the alleged
 violation with  the appropriate  SERC  to verify the violation and
 then  take appropriate enforcement action.

      Title III  enforcement  personnel also should coordinate with
 counterparts in the Regional office  that handle criminal
 enforcement soon after the  discovery of a |103/|304 notice
 violation.   Significant  violations should be reviewed for
 possible  criminal violations by the  Special or Resident Agent-in-
 Charge.


 DELEGATIONS

      Title  III  delegation 22-3  delegated the authority to take
 administrative  penalty actions  to the Assistant Administrator for
 OSWER (for  11302,  303, 304,  311,  312,  322, and 323) the Assistant
 Administrator for OPTS  (||313,  322,  and 323), and to the Regional
 Administrators  (for all  sections)  on September 13, 1987.  OSWER
 Redelegation 22-3 (dated May 27,  1988) states that the Regional
 Administrators  or their  delegates* must consult with the Director
 OWPE  or his designee  before exercising their authority to take
 administrative  penalty actions  unless such consultation is waived
 by memorandum.

      CERCLA delegation 14-31 delegated the authority to the
 Regional  Administrators  under 1109 to make determinations of
violations,  to  assess penalties,  to  issue notices, orders or
 complaints,  to  compile the  administrative record upon which the
violation was found or the  penalty was imposed, and to negotiate
 and sign  consent orders  memorializing settlements under 1109
 between the Agency and respondents.   OSWER Redelegation 14-31
 states that the Regional Administrators, or their delegatees,
 aust  notify the Director OWPE or  his designee when exercising any
 of these  authorities.
USE OF THIS MEMORANDUM

     This memorandum and internal office procedures adopted
pursuant to this memorandum are intended solely for the guidance
of employees of the  Environmental Protection Agency.  They do  not
constitute rulemafcing by the Agency and may not be relied upon to

                                13

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                                                OSWER DIR. 19841.0

craata a right or a banafit, «ub«tantiva or procedural
anforcaabla at law or in equity, by any parson.  Tha

                                             or if •
                               14

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                                                OSWTR DIR.  19841.0

where the owner or operator•• recalcitrance justifies a civil
judicial enforcement action.

     Violations of 11311 and 312 can be addressed through
administrative procedures or judicial referrals.  Regional
enforcement personnel should consult with OWPE and OECM-Wa»te
before deciding to refer cases to the Department of Justice.
Again, enforcement personnel should discuss any potential
enforcement action with the SERC and LEPC involved.


ENFORCEMENT OF SECTION 322

     Title III 1322 establishes the procedures for claims that
information submitted under 11303, 311, 312, and 313 is trade
secret.  Claims vill be processed and reviewed by OSWER and OPTS
for completeness, sufficiency, and to make final determinations
of validity.  If errors and/or omissions are found during initial
processing and review, OWPE will send the trade secret claimant a
Notice of NoncoapLlance.  The Notice vill advise the claimant of
the errors or omissions that were found and require the claimant
to either amend or withdraw the claim within 30 days.

     Penalties of up to $10,000/day can be assessed for failure
to comply with the Notice.  If the claimant fails to comply with
the Notice, OWPE will forward the case to OECM for enforcement.

     A penalty of $25,000/claim can be assessed for frivolous
claims under 1325(d).  Section 325(d) authorizes the
Administrator to assess this penalty if he determines that the
trade secret claim is frivolous and the claim meets either of the
following criteria:  the claim is not sufficient (i.e, the
claimant presents insufficient assertions to support a finding
that a specific chemical is a trade secret), jar that the-claim  is
not a trade secret.  Enforcement of frivolous claims will be done
through EPA headquarters.


COORDINATION

     Violations of other statutes resulting from a release may
also be violations of the Title IZX/CERCLA notification
requirements.  Title III/CERC1A 1103 enforcement personnel are
urged to coordinate  with other offices  (Air, Water, RCRA, TSCA,
etc.) to identify eases where violations  of Title  III/CZRCLA
notification could be consolidated with other enforcement
actions.  Release-related violations under  other statutes will
help identify facilities that have failed to comply with Title
III reporting requirements.


                                12

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                                                OSWER DIR. 19841.0

 Release  Inventory submissions  arc  likely to  include reports for
 one  or more  of  these  EHSs.  Therefore, this  information would
 link the facility to  the  li302-312  reporting requirements.

      Past accidental  spill  data in  the Emergency Release
 Notification System  (ERNS)  may lead to the identification of
 1302-303 violators.   Spills of EHSs above their reportable
 quantities may  indicate that a facility should have notified the
 State under  1302  of Title III.

      As  for  identifying violators of 11311 and 312, cross
 checking information  in CUS with 11311-312 reports submitted to
 States should be  productive.   Although CUS contains a lot of
 Confidential Business Information  (CBI) data, lists of facilities
 and  the  chemicals they manufacture  or import can be generated
 without  using the CBI data.  Because the OSKA definition of
 hazardous chemical is so  expansive  (any chemical that presents a
 physical or  health hazard), most if not all  chemicals reported in
 CUS  would be reportable under  H311 and 3122.

      Past accidental  release information also will be useful in.
 identifying  11311-312 violators.  Releases of hazardous chemicals
 in excess of 10,000 pounds  would indicate that the facility owner
 or operator  should have submitted MSDSs or a list of KSDSs and a
 1312  inventory  fora.

      The enforcement  person may also want to establish contacts
 in the regional OSHA  office to share information on potential
 f|311 and 312 violators.  These relationships also should be
helpful  when you  need interpretations of the OSKA KSDS
 requirement  under their Hazard Communication standard.

      Finally, in  the  release incidents investigated thus far
SERCs and LEPCs have  identified violators of If302-312 a* a
 result of the release.  SERCs  and  LEPCs will continue to be major*
sources  of information for  11302-312 enforcement.

      Enforcement  Response

      Enforcement  response for  violations of  11302 and 303 should
 be discussed with the SERC  and LZPC.  If the respondent
 cooperate* and  supplies the requested information, sn enforcement
 action may not  be warranted.   There may be  instances however,
     2    For a eoaplete definition of what constitutes a
hazardous chemical  see the Department of Labor Hazard
Communication Final Rule,  29  CFR Parts 1910,  1915,  1917,  1918,
1926, and 1928.  See also the Federal Register.  Vol.  52,  No.  163,
August 24, 1987.

                                 11

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                                                OSWER DIR. #9841.0

Regions should be  in regular contact with SERCs to identify cases
that they are int«rest«d  in having EPA pursue.  EPA enforcement
personnel should establish a contact in each of th« SERCs in
their Region and coordinate with these contacts on the general
approach of the SERC to enforcement, as well as their successes,
concerns and needs for Federal enforcement assistance.  At the
very least, the Regional  enforcement personnel need to keep
abreast of State enforcement activities and consult with SERCs
when initiating an enforcement action.

     Identifying Violators

     The ideal way to figure out who has violated 1302 vould be
to compare reports submitted to the States with a master list of
everyone who has those chemicals above threshold levels.
Obviously no such  list exists.  However, there are some sources
of information that can be used to help identify facilities
required to report under  1302.

     OWPE is currently undertaking two projects to help the
Regions, States and LEPCs identify producers and users of 1302
chemicals.  The first project will provide a list, by State, of
the facilities that are producing 1302 chemicals, which chemicals
they produce, and  production volumes for those chemicals.  The
list was developed using  the Chemical Update System  (CUS) and
contains information submitted between 1984-86.

     The second project is intended to provide LEPCs with a
targeting tool to  identify facilities that are potentially using
§302 chemicals.  Using the National Air Toxics Inventory Clearing
House (NATICH) database,  OWPE is developing Standard Industrial
Classification  (SIC) code/chemical crosswalks.  The  first
crosswalk will list all the 4-digit SIC codes with the 1302
chemicals that are typically used in them.  The second crosswalk
will list all the  1302 chemicals with all the SIC codes in which
they are found.  These crosswalks are intended to be generic
targeting tools that can  be used in conjunction with data
available through  the State Commerce Departments.  The Commerce
Departments should be able to provide LEPCs with  information on
facilities that are active in their counties/localities, the SIC
codes the facilities operate under and the number of employees  or
other business information.  Together, the Commerce  data and the
chemical crosswalks should provide an indication of  some of the
facilities that are potentially required to report under Title
XII.

     The list of facilities that reported under 1313 can also be
used to identify facilities that are required to comply with
1302.  There is a  substantial overlap between the  1302 EHS  list
end the 1313 toxic chemical list  (See Appendix C).   Some Toxic

                                10

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                                                OSWER DIR. 19841.0

 being developed  by  OECM.   In the  interim, Regions should follow
 the  administrative  procedures codified at 40 CFR Part 22.

      Under CERCLA {109  and Title  III  1325, Class I penalties for
 5103/1304  violations  are  assessed per violation; Class II
 penalties  for  1103/1304 violations art assessed p«r violation per
 day.   Penalties  for violations of Title III §1311, 312, 313,
 322(d)  and 323(b) also  can be assessed each day a violation
 continues.

      For all unreported releases, possible criminal proceedings
 must be considered.   Regional enforcement personnel should
 coordinate with  Regional  Counsel  and  the Special or Resident
 Agent in Charge  (SAC  or RAC) soon after discovery of the
 violation  to decide whether criminal  proceedings are in order.
 Except for criminal violations, Regional enforcement personnel
 should invoice  the least resource  consuming enforcement option
 that will  adequately  address the  situation.  Typically,
 administrative procedures should  be effective.

      During case development, the appropriate SERC should be
 contacted  to determine  the alleged violator's compliance with
 other sections of the statute and to  find out if proceedings are
 already underway at the State level  (under a provision of state
 law) .


 ENFORCEMENT OF 11302, 303, 311, AND 312

      Title III 1302(c)  requires the owner or operator of a
 facility at which an  EKS  is present in an amount exceeding a
threshold  planning  quantity  (TPQ) to  notify the SERC that the
 facility is subject to  Title III.  Section 303(d) requires
owner/operators  of  facilities regulated under 1302 to notify the
LEPC  of a  facility  representative who will participate in the
planning process.   EPA  is authorized  under Title III 1325(a) to
issue compliance orders for violations of 11302 and'303 and may
seek  judicial enforcement of the  order and penalties for failure
to comply  with it.

      Sections 311 and 312 require owners and operators of
facilities that  have  EHSs or hazardous chemicals in excess of
certain thresholds  to submit MSDSs and chemical inventories to
the SERC,  LEPC end  local  fire department.  Under |325(c), EPA has
civil  judicial and  administrative penalty authority for
violations of  11311 and 312.

      Because the compliance information is maintained at the
State and  local  level,  enforcement personnel will need to
coordinate with  a SERC  enforcement contact to prepare  each  case.

-------
                                                OSWER DIR.  19841.0

 facility under  CERCLA  |104(e) with the sole purpose of enforcing
 Title  III.

     Priorities

     In developing enforcement ections for violations of
 1103/1304, Regional enforcement personnel should try to target a
 cross  section of the regulated community.  Reporting of EPA
 enforcement actions in relevant publications, should help
 increase awareness of  Title  III and provide a deterrence.

     The Regions should consider the following circumstance* in
 assessing the priority to be given an enforcement action against
 a given violator:

     o   The volume and substance released;

     o   The nature,  if any, of environmental or health threats
          resulting from the release;

     o   The efforts  made by the facility to comply with the
          notification requirements;

     o   Aggravating  or mitigating circumstances, such as the
          facility's compliance with other Title III
          requirements ;

     o   The significance of the violation to the SERC and LEPC;
          and

     o   The effect on the  overall enforcement program.

     Enforcement personnel should communicate with the
appropriate SERC during the  development  of any notification
related enforcement action to check the  violating facility's
compliance with ell other section* of Title III.  If the SERC
provides evidence that the facility in question has violated
other  sections  of Title III, those violations should be  included
in the enforcement action.  •

           ement Response
     Under CERCLA  1109  end Title  III  1325 (b), EPA can assess
administratively either Class  I or  Class II  civil penalties.  EPA
can also refer civil  judicial  or  criminal  actions to address
violations.  Administrative  penalties can  be assessed after the
person accused of  the violation has been notified and given the
opportunity for a  hearing.   Procedures for assessing
administrative penalties under CERCLA 1109 and  Titla III  1 325 are

-------
                                                OSWER DIR. 19841.0

 were published in the federal  Register on  February  25, 1988.  The
 current list of EHSs and the  list of  deleted  chemicals can be
 seen in Appendix B.

      Identifying il03/i304  Violators

      Each  Region should develop  a simple information gathering
 system  to  identify potential violations.   This  information
 gathering  effort should not be resource intensive.  In many
 instances,  State or  local agencies will be able to  provide the
 necessary  information.   EPA's  information  gathering efforts for
 identifying I103/J304 violations should include reviewing:

      o     Information from  SERCs and  LEPCs;

      o     NRC  reports IJor third  party notifications;

      o     News reports,  including wire and clipping services; and

      o     Cases being developed  by other media  offices for
           violations that could  include violations  of the Title
           III  and CERCLA 1103  emergency notification provisions.-

      Additionally, Regions  should use information requests under
CERCLA  1104(e)(2)(B)  to determine whether  or  not there has been a
violation  of  I1031.   CERCLA |104(e)(2)(B)  authorizes EPA, or any
designated  representative of a State  under a  contract or
cooperative agreement,  to require any person  who has, or may
have, information relevant  to  a  release of a  CERCLA hazardous
substance,  pollutant or contaminant -to furnish  information to EPA
so that the Agency can determine the  need  for a response, choose
or take a  response action and  enforce the  provisions of CERCLA.

      CERCLA |104(e)  also provides authority for EPA to access and
inspect facilities if there has  been  a release, a threat of a
release, or if there is a reasonable  basis to believe there may
have  been  a release  of a CERCLA  hazardous  substance, pollutant or
contaminant.   Section 104(e) authorizes inspections to determine
the need for a response,  to choose or take a  response action and
to enforce  the provisions of CERCLA.   Information gathered during
the CERCLA Inspection,  if gathered for the CERCLA purposes
mentioned  above,  can be used as  evidence in prosecuting Title III
violation*.  However, the Agency does not  intend to enter a
     1    Final guidance  on use and enforcement of CERCLA 1104
information requests  and  administrative subpoenas was issued  by
the Office of Enforcement and Compliance Monitoring (OECM)  on
August 25, 1988.  The information sought should be tailored to
CERCLA 1103.

-------
                                                OSWER DIR. 19841.0


     Title  III |304(b) specifically indicate* to whom and what
types of  information should be provided.  Notice is to be given
immediately after a release by the owner or operator of a
facility  to the community emergency coordinator for any affected
LEPCs and to the SERCs for all States likely to be affected by
the release.  Verbal notice to the LEPC and SERC must include the
following information  (to the extent it does not delay the
response):

     o    Chemical name or identity of any substance involved in
          the release;

     o    Indication of whether the substance is on the |302(a)
          list;

     o    Estimate of the quantity released;

     o    Time and duration of the release;

     o    Medium or media into which the release occurred;

     o    Any known or anticipated acute or chronic health risks
          associated with the emergency;

     o    Proper precautions to take as a result of the release,
          including evacuation; and

     o    Name and telephone number of the person to contact for
          further information.

     Title  III |304(c) requires the owner or operator of  a
facility  that had a release which required immediate notice under
1304(a)  to  provide a written followup emergency notice setting
forth and updating the information required under subsection (b)
as coon as  practicable after the release.  This written report
should update the verbal notice and include edditional
information with respect to:

     o    Actions taken to respond to and contain the release;

     o    Any known or anticipated acute or chronic health risks
          associated with the release; end

     o    Where appropriate, advice regarding medical attention
          necessary for exposed individuals.

     The  original Title III 1302 EHS list can be found  in 40 CFR
Part 355, Appendices A and B.  These appendices were recently
amended (40 substances were deleted).  The delisted chemicals

-------
                                                OSWER DIR.  49841.0

requirements  (H311-312) .  EPA regional personnel will also
monitor |313  submissions for chemicals required to be reported
under 1302.

ENFORCEMENT OF CERCLA {103 AND TITLE III |304

     Because  the notice provisions of CERCLA and Title III
overlap, EPA  will combine enforcement of CERCLA 1103 and Title
III 1304 where possible.

     Relationship Between CERCLA J103 and Titla III 8304

     CERCLA 1103 and Title III 1304 serve similar purposes.
CERCLA |103 requires the person in charge of a vessel or facility
to notify the National Response Center (NRC) immediately after a
release of a  CERCLA hazardous substance in an amount greater than
or equal to its reportable quantity (RQ).  In addition, Title III
requires the  owner or operator of a facility to notify the  SERC
and the LEPC  for all releases that require CERCLA notification
and for releases of extremely hazardous substances  (EHSs) in
amounts greater than or equal to their reportable quantities.
Title III thereby expands upon the reporting system established
under CERCLA  and coordinates emergency response between Federal,
State and local governments.

     Currently, 134 of the 366 Title III EHSs are also CERCLA
hazardous substances.with established reportable quantities.  EPA
plans to propose a rule designating the remainder of the EHSs as
CERCLA hazardous substances in the future.

     Designation of EHSs as CERCLA hazardous substances will
expand EPA's  ability to use its authority under CERCLA 1104 to
access facilities, gather information, and respond  consistent
with the National Contingency Plan (NCP), to releases.  CERCLA
1106(a) gives EPA the authority to require any action necessary,
including the .issuance of enforcement orders, to abate any
imminent and  substantial endangerment resulting from the actual
or threatened release of a CERCLA hazardous substance.  Section
107 of CERCLA establishes the liability of responsible parties
for the cost  of a response action taken under 1104.

     Submit a nee of CERCLA J103 and Title III 1304 Reports

     CZRCLA I103(a) requires the person in  charge  of  a vessel or
facility to notify the NRC immediately when there  is  a release of
a designated  hazardous substance in an amount greater than or
equal to its  reportable  quantity.  For CERCLA hazardous
substances without a designated RQ, a release of one  pound or
more triggers the notice requirement.  The  CERCLA  hazardous
substances are listed in Table 302.4, 40  CFR Part  302.

-------
         A.   Tlw U»t tf Utterly IUZir*M Subtttnct* «nd their  ThrteAold Pliming OuvitltlM
   CAS ff
                                  (Alphabetical OrOer)


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                                                                             note*
                                                                      tOMrtabl*
                                                                      •uentlty •
   75-04-5
 1752-30-J

   79-04-1
  107-13-1
  •U-41-4

  114-0*
  309-00'
  107-U'
  107-1V
20859-73'
   54-42
   7I-J3-
 5754-97.
  300-42
   42-53
   U-05-1
 7713-70-2
 1397-94-0
   04-U  4
 1303 21  2
 1327-53  3

 77*4-42-1
 2*42-71-9
   Oe-50-0
   90-17
   90-1*
  100-14
   90-05
 3415-21
  100-U
15271-41-

  $34-07.
 40*4-•$•
102*4-14.
 7437-07
  353-42
 772*-OS'
 ISO*-10'
 2223-93
 7771-U'
 0001-13
   54-25
   51-O
 15*3-4*

  704-19-
   57-74
  470-00'
 T7M-IO.
24934-91.
  9W-IV

  107-07.
  427-IV
   47-4*
  5*2-11
  107-50
Ac*ton* Cyanonv«r\n
AC*ten* Thieve*icartes id*
Acr«l*ln
AerylflMtrU*
Aerytyl  CM or i a*
Aiarin
AUyt Alcohol
A*t ton
AjRiton Oxelate
Airline
Aniline,  2.4,4-Trt«»thvl•
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Arsenic »entMio»
         TriehlorieU
Ar»in*
AZincftM'tthyl
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Mnxat Chl«ri«*
Mruerwilne,  3-(TrHlueromthyO-
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MnzotrieftloriM
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                   Xtulfl*
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500 710,000
1,000
500
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100 no, ooo
500
1,000
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500 710,000
100 710,000
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 1,000
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-------
         A.
   CAt •

21923 23 9
10025-73-7
62207-74-5

10210-4I-1
   44-46 I
   54-72-4
 5I34-29-3
  535
 4170
  123
  504
  504
 2434
  675
   44
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17702
 •045
  919'
10311'
192lt
  Ill-
  149-
   42
  141-
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    30
    73-9
    M-3
    7»-5
    24
    14
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    91
    41
   2
   9
   9
   a
   9
   3
   I
   9
   7
44-4
74-4
73-7
44-2
      M-
      •4-
      45
 2234-07-5
20UO-75-5
  115*24*4
   40-51-5
 2524-03-0
   77-7»-1

   75-7i-5
   57-14-7
   •*•••••
   M-tS-7
 1420*07-1
   Tt-34-2

  132-14-9
  2W-04-4
  5U-73-I
  541-13*7
  314-42-7

 2771*04*3
   73-20-1

 2104-44-5
   50*14-4
  J7»*7f-J
 14Z2-32 •
10140-«7-1
  543-12-2
i
    42-0
    21-1
    15-3
151-54-4
542 90 5
             Tht fit of ExtrtMly Ntr.irdnu*  SuMt*nr*t *nd


                                   {AlpMto*tiCil
             CfcroaiC  Oilorid*
             Cotalt,  «2,2'
                Ii»(4-Hk»ro
             CoMIt Careenyl
             Coiehiein*
                                                                         *lannint Ou*r>tuin
                                                                                       ortabtt
               ltitr«tyl
           Crttol,  e-
           Criaidin*

                      iodt«
             Cyirvtric
             CyeloMii«io«
           0***tor-|-«*tftyl
           Oiltifor
             Oichtorvw
             Otttftyt

             Offl••,« '.0.0' >•
ft t,K 1
• ,h 1
10
t 1
d 1.000
• 1
• 100
•, (E>- 100
id* 1.000
d* * 1
* 1
rid* I 1
« 1
n* *,l 1
) * 1
* 1
hy( • 1
* 1
• 1
Its**- d i
lpft«nytl OctcMttiyl* ^00
' 1
l«rild» • 1
100
•>*jcM*rid» t,h '
•j
• 1
.1
In *>l 1,000

,i e.t 1
H • .
,»•»•&•>« • i
irtrvKV •"
1 CMoMd«, 2-Chl*re- • J
ftfcfctoro-, Atttat* • !
t 1
1 A*MAf>hwl %AaifM '»-^
lw™O*Wvnyi /HHIinv •
irohyerin S'f'h 1
to *» I
* 5,000
, d 1
' t 1
(petrei)
500
1 710,000
100 710.000

10 710,000
10 710,000
100 710.000
500 710,000
1,000 710,000
100 710,000
1,000
1,000
500 710,000
1,000 710,000
1,000
100
100 710,000
10,000
500 710.000
500
500
100 710,000
100
10,000
1,000
1,000
100
500
500
100 710,000
100 710,000
1,000
10 710,000
500
500 710,000
500
500
100
500
1,000
10 710.000
500 710,000
10 710,000
100 710,000
500 710,000
500
10 710,000
100
500
$00 710,000
100 710,000
1 710,000
10 710,000
500 710,000
500 710,000
1,000
100 710.000
1,000 /10.000
500 710.000
500
1.000
1.000
1,000
500
10
1,000
10,000
500
10,000

-------
      Hi *.   Ttw CUl tf btMMly ttmrtfeui SUtatancM « mir ThrMftotd
                                               Of«tr>
   Ut t                              CfcMiCIl MM
 • ••••••••••(••••••••MnM»(«»»*«««*»»*«>««»«*«l«Ill*l*lt»M«>l
 \,    1     »«n«»ij«««
  122-U-
  11S-W-
 4J01-SO-
 77K-41-
                                                                                 fcamity *  Umirj «ont
-------
         A.  Yh» Hit tf |m«Bly MSartfeu*  hMttnc** M th«ir Threshold
                                                                                   Quemititt
                                                 Order)
   CAS •
    74-93
  373J 23
  674-97
  SS4-44
    78-94
  502 39
    75-79-*
  1129-41-5
  7714-34
  315-18
    50-07
  4923-22
  2743-94
  505-40
13*43-39-3
23135-22


iVPlS
 1910-42
   54-11-5
   45-30-5
 7497-37-2
10102-43-9
   9C-95-3
 1122-40-7
10102-44-0
   42-75-9
  991-42-4
         0
  430-40-4
23135-22-0
      71-7
       17-4
      '15-*
      42-5
 2074-50-2
   54-3* 2
  2W-00-0
12002-03-1
19*24-22-7
 2570-2*-5
   79-21-0
  5*4-42-3
  100-95-2
   •7-H-7
 441»-**-0
   •4-00-*
   5*-3*-4
  ***-2*-*
   *2-3«-4
 2097-19-0
  103-«5-5
  m-02-2
 4104-14-7
  •47-02-4
   75-44-5
  752-11'*
13171-21-*
 7103-51-2
 270MM
50712•*»••
 2**5-»-7
 3254-43-5
 7723-14-0
10025-17-3
IOOa-13-l
                                                                                                    Threshold
                                                                                                 Henmni Quantity
                                                                                       (pound*)      (p**«t)
             •ethyl
             •ethyl
             •ethyl ftnetfitr-f Bichloride
             •ethyl Thlocyenete
             •ethyl Vinyl Ketone
                                                                               e
                                                                               a.e
             •ethyltncMe-rosi li
             •etoleart
             •ttopyein C
             Huettrd OM
             nickel
             Nicotine
             nicotine twlfet*
             Nitric Acid
             Nitric Oiide
             Or«««rtt««li«
                                   (MW-U-147)
             OsyBKUtfvtan
e.h

e
                                                                               e
                                                                               e,e
                                                                               e
                                                                               c,d
                                                                               c
                                                                               d
                                                                               e
                                                                               e
                     2,2'-Thle*l»<4,*-DlcMero>-
                     2,2'-Th»e»U(4-CMefe-*-itethyi)-
                     3-{1'B»tt»yletf»yl)-, NtttiylurtMte
    7-47-4
   57-*4-7
  124-17-I
             MMd^iif*
             •ftc«0Mn»tM»lc Ac1d,»etttvl-,0-ltl»yl 0-(4-«ti«yl)e
             Hw«cA«n»thie fheoyl liter              •
                             Acid, 0,0-t1«ethyl-»-U-Hethytthle) Ithyl Isttr    e.e.i
             Hereto* in
                        Triehuride

                        im, Jelieylete (1:1)
  100
    t
    1
    1
    1
    1
    1
    1
   10
1,000
    t
    1
1,000
    1
    1
  100
    1
1,000
   10
1,000
    1
   10
    1
    1
    1
    1
    1
    1
    1
    1
    1

     1
  100
  100
     1
     1

  100
 1,000
     1
     1
     1
     1
     1
     1
   100
     1
   100
    10
     1
     1
    10
     1
     1
   too
                                                                                            1,000
                                                                                            1,000
                                                                                                1
                                                                                                1
                                                                                                1
                                                                                                   1,
                                                                                                   1,
   500
   300
   100
10,000
    10
   500  710,000
   500
   100  710,000
   500
   500  710,000
   500  710,000
    10  710,000
10,000
   500
     1
   100
   100  710,000
  ,000
   100
10,000
   500
   100
  ,000
   100  710,000
    10  710,000
   100  710,000
   100  710,000
   500
   500
   100
    10 710.000
    10 710,000
   100
   100 710.000
   500 710,000
   500
   100 710,000
   500
   500
   500 710.000
   100 710.000
   100 710,000
   500 710,000
   500 710,000
   500
   ,000 710,000
    500 710.000
    100 710.000
    100 710.000
     to
    100 710,000
    100 710.000
     10
     10 710.000
    too
    500
    500
    100
    500
    500
    500
    100
    500
    500
     10
   1,000
   '100 710,000
    100 710,000
    500 /1C.200
                                                                                                    1,

-------
    The iMt If f*t»te»ly
                                           *v«ttenctl enc" the:.- TV-ethild
                                                                                 3aant!t!ee
                                  (Alphabetical Or«er>
CAS •
ei-a«-7
110-57-4
1031-47-4
24017-47-8
74-02-1
115-21-*
327- W-C
M 13 5
1558 2$-*
27137-15-5
W-SO-1
75-77-4
K4-11-3
10M-45-1
4S« S» 7
555-77-1
2001 -95 ••
1314-62-1
108-05-4
81-81-2
12«-0*-4
2SJ47-13-9
S8Z70-08-9
Che»Me»l HOMO
Toluene 2,e-DI laocyanett
T rane • 1 , 4 -0 1 eh 1 ereeut ene
Tritetiphoo
Triaiofoe
Trichlereacetyl CMerid*
Trichleroethylsi lent
Triehierenete
T r i ch 1 orepneny 1 1 U one
Triehlere(Chloro*ethyi )$i lane
Tr1ehloro(Dichloroeftenyi)Si lene
Triethoxyti lane
T r i a»thy 1 eh I orot i I one
TrinethylolproMr* NMnine
Valine«ycin
Varied io» Ventexide
Vinyt Actttta •onemer
warfarin
tMrfarin f«diu*
lylylene Oiehieride
Zirc, Oichlere<4,4-OiMtnyl-5((((Methylo*iine)CireenyO
leeortoble
•otet (Dou«a)
100
1
1


.h
,k
,h




,h 1
1
1
,h 1
.t 1
1,000
.1 5,000
100
.h 1
1
1
•lanrinf Ouantity
(eeunda)
100
500
500 /10.000
500
500
500
500
500
100
500
500
1,000
100 /10.000
500 ,'10,000
500 /10.000
100
1.000 /10.000
100 /10.000
1,000
500 /10.000
too /io,ooo
100 710,000
100 /lO.OOO
13U-U-7   Zinc
                                                                                   100
                                                                                                   509
        •    Only  t*\» ttctutery or final 10 it •*«*.  for wrt  lnfor»iti«n, ••• «OCNt T«tl« 302.4
                                                                                                        it.
b   Thit wttrfal U • fMctiv* Mild.   Th« T*« dots net «tfault to 10,000
    for rwn-pewatr,  non>wlttn, nen-tetutloo for*.
e   Tht c*tcwlit*4 T»0 eh«nf«d ift«r  ttetmieil-rtv<«« •* d*«er(i).
f   -Tht statutory 1  pevr« rapcrtafctt  quantity  for avthyt ia*ey*rtatt My M  adjuataa in a fvturt fiit«
g   ••« efiaaieait added that «ara net part «f  th« arffinal Jilt of 402 tubataneM.
n   levi'Md TN eaaac on MM or rt-evaluated tuietty data.
j   TN (a rtviaed to 
-------
      U A.   Tlw Hit tf Utrotly MurdM Substance*  tori th«tr Threshold
                                                                              Ouvnlttw
                                                                                                      »•§• A-5
                                             Ord«r)
CAS f
                                   CXMlCll  NOT
                                                                                                 Thrwtold
                                                                                   fcOTtlty •  FlvrMr* Quantity
                                                                             MCtM  (OMdl)
  110
 5281
Z3S05
10124
  151
  506
 2631
  106
   57
  107
  542
   70
  109
   75
   75
 2275
  129
  140
  504
 1124'
53558
14167
  107'
 T7U'
 TTVV
  563
 3037'
 7631-
 7714-
26628
  124-
  •143-
   62
  131-
13410-
10102-
10102-
  900'
   57-
   60
 36*9
89-
13-0
41-1
50 2
50-8
61-6
37-0
96-7
57-8
12-0
76-7
69-9
61-5
56-9
55 8
18-5
   00-0
00
23-3
41-7
72-7
89-2
46-5
22
65
33
74
52
   01-0
   95-8
   24-S
 7446-09-5
 7783-60-0
 7446-11-9
 76*4-93-9
   77-11••
13494-80-9
 7713-00-4
  107-49-3
13071-7?-»
   71-00-1
  597-64-i
   75-74-1
  509-14-1
10031-Sf-1
 6533 739
 2757-18-8
 7444-18-6
 2231-57-4
39196-18-4
  297-97-2
  108-98-5
   70-19-6
 5344-82-1
  614-78-8
 7550-45-0
  5I4-84-9
          »tri«ifo«-lthyl
          *Ota**iUi Ar»anitt
          •otas*it«
                   Brorid*
          »ropyl«w Ox id*
          »retheat*
          ^yridirw, 4-Anine
   44-8   tertn
               «u§ Aerid»
«rec*(lorid«
butyl )0ittnoxywthyl •


(H3))
t
M(OI))
tata
fflptMCWtt



ytfipfMnyl-

Bt9

•f«y»pyt Ottyt

rid*




uar14i





•M
rlV
Blf>41
t\9
«w
•

1




to
tof tctiinyl)*
hi 1 ^m 1 ^^
U^flVt
. . • i •• •>•
1
i
i
1,000
10
1
h 1
1
1
10
1.000
1 1
1
100
1
1
5.000
1
1,000
1
.h 1
1
.»> 1
10
1
1
1
1,000
1,000
1,000
1
10
10
1
1
100
1
.8 1
10
1
100
1
.1 1
1
»,• 1
1,000
«,*,*» 1
t 1
9,k 1
10
«,h 1
c,d 10
e,t 1
«',«.l 1
10
k 100
c,h 100
•> 101
«,t,h 1
100
t 1
100
100
100
100
100
• 1
• 1
luO
1.000
100 710,000
1,000
500 710.000
100
500
500 710,000
10
500
500
1,000
100 710.000
500
10,000
10,000
100 710,000
1,000 710,000
500
500 710,000
500 710,000
100 710,000
500 710,000
10
1,000 710,000
500
1,000 710,000
1,000
1,000 710,000
500 no, ooo
500
100 710,000
100
10 710,000
100 710,000
100 710,000
100 710,000
500 710,000
500 710,000
100 710,000
100 710,000
500
500
500
100
100
1,000
10
500 710,000
100
100
100
ICO
100
100
500
100 710,000
100 710,000
100 710,000
100 710,000
100 710,000
i,m no. ooo
100 710,000
SOD
500
100 710,000
100 710,000
500 /10.000
100
500
                  2,4-OUtocyvMt*

-------
APPENDIX B.  LIST OF EXTREMELY HAZARDOUS SUBSTANCES
              U.S. Environmental Protection Agancy
        THE EMERGENCY PLANNING
                    and
       COMMUNITY RIGHT-TO-KNOW
                ACT of 1986
              List of Extremely
           Hazardous Substances
                  40CFR355
                (Sections 302 and 304)
                 March 1,1988

-------
     The attached lists represent the complete  list of Section
302 Extremely Hazardous Substances of the Emergency Planning and
Community Right to Know Act (Title III).  The substances are
.listed in alphabetical order by chemical name and numerical orier
            Abstract Number (CAS No.).  This  l-i$t «as publisnea
            A and B to the  final rule  (40 CFR  353) In the
           ister on April 22, 1987,  (FR 13376)  and revised on
             1987 (FR 48072) and Feb-uary 25, 1988 (FR 5574) to
             substances.  The list of these  forty substances Is
by Chemcial
as Appendix
Federal Rtg
December 17,
delete forty
also provided for your  information.

-------
                      TITLE  III - EXTREmlLY HAZARDOUS SUBSTANCES
                              CHEMICALS DELETED FROM  LIST
                    (As of Dacamfrtr  17,  J987 and Fabruary 25, 1988)
    (Alphabatlcal Listing)
CAS Ho.
16919-58-7
1405-87-4
98-09-9
106-99-0
109-19-3
111-34-2
2244-16-8
107-20-0
7440-48-4
117-52-2
287-92-3
633-03-4
84-74-2
6023-53-6
93-05-0
131-H-3
tM4-0
NAME
Ammonium CMorop latlnata
Bacitracin
Banzanasulfonyl CM or I da
Butadiana
Butyl  Isovalarata
Butyl Vinyl Ethar
Carvona
Chioroacataidahyda
Cobalt
Coumafuryl
Cylopantana
C.I. Basic Graan .
DIbutyl Phthaieta
Dichlorobanzeikonlum CM or
0 i tthy I -p-Phany I anad i am I na
Dlmathyl Phthalata
Oloctyl Phthalata
Di oxo I ana
Ethylmarcur Ic Phoiphata
Haxachloronaphthalana
Indomathacln
irldium Tatrachlorlda
Mas I ty I ana
Nlckal
Orotlc Acid
Osmium Tatroxlda
P«ntachloro«th«na
Pantachlorophanol
2235-25-8
1335-67-1
53-66-1
10025-97-5
108-67-8
7440-02-0*
65-86-1
20816-12-0
76-01-7
87-86-5
84-80-0
10025-65-7 Plitlneus Chlorlda
13454-96-1 PlatlB^ai Tatrachlorlda
1351-17-5  Propyl«n« Olycol, Ally! Ethar
95-63-6    PsaudeeuMM
10049^07-7 Rhodium Trichloride
1 28-56-3   Sodium  Anthr«qulnona-1-
           Sulfonata
1314-32-5  Thai lie Ox I da
21564-17-0 Thlocyanlc Acid, 2-{8»n«o-
           t-MazolyltMo) Math y I Estar
640-15-3   Thlomaton
5 2-68-6    Tr 1 c h I orophon
3048-64-4  Viny Inorbornana
             List  6y CAS No.)
CAS No.    NAME
52-68-6    TrIchIorophon
53-86-?    Indomathacin
65-86-1    Orotlc  Acid
76-01-7    Pantachloroathant
84-74-2    01 butyl  Phthalata
84-80-0    PhyIioquInona
87-86-5    Pantachlorophanol
93-05-0    DIathyI-p-PhanyIanad1 am Ina
95-63-6    Psaudocumana
98-09-9    Banzanasulfonyl Chlorlda
106-99-0   Butad Iana
107-20-0   Chloroacataldahyda
108-67-8   Ma«ltylana
109-19-3   Butyl  liovalarata
111-34-2   Butyl  Vinyl  Ethar
117-52-2   Counafuryl
117-64-0   Dloctyl Phthalata
128-56-3   Sodium  Anthraqulnona-1
           SuIfonata
131-11-3   DImathy I Phthalata
287-92-3   Cylopantan*
633-03-4   C.I. Basic  Graan  1
640-15-3   Thlomaton
646-06-0   DIoxoIana
1314-32-5  Thai Me Ox Ida
1331-17-5  Propylana Glycol,  Allyl Ethar
1335-87-1  Haxachloronaphthaiana
1405-87-4  Bacitracin
2235-25-8  Ethylmarcurie Phosphata
2244-16-8  Carvona
3048-64-4  VInyInorbornana
7440-02-0* Nlckal
7440-48-4  Cobalt
8023-53-6  Dlehlorobanzalkonlum Chlorida
10025-65-7 PI at I nous Chlorlda
10025-97-5  Irldlum Tatrachlorlda
10049-07-7 Rhodium TrIChlorlda
13454-96-1 Platinum Tatrachlorlda
16919-58-7 Ammonium Chloroplatlnata
20816-12-0 Osmium  Tatroxlda
2J564-17-0 Thlocyanlc Acid, 2-
-------
      U I.  TM Ktt of t»tre»*ly mtrdout fcfcttoncn ma thtir Threshold  p[*nntn« OuentltlM
                                     (CAI M«j**r Order)
   CAS *
                                                                               •em
                                                                                     teportoblt     Thretneld
                                                                                     Ovaritity •  »lenntn« Ouentity
22224-02
23135-22
23422 53
23505-41
24017-47
240J4-01.
2M1»-73

26*21 22
27137-15'
28347-13'
287T2-56-7
30674-80-7
               rattwwt* Mydroehlerid*
5355e 25 1
5B270-M-9

62207-To-5
         e
         d

         o
         f
         4
         h
         j
         k
         t
             Triaiofet
             Chloroaphoa
                                   , 0-<«2,4-Oiaethyl-1, 3-Dithlolen-2-Tl)
lylyiene
•roa»fliolone
fcethaeryloyloxyethyl Itocytn«tt
                                                                                            100
                                                                                ,h
                0-tthyl Itttr
               riai
             Zirc,
                                 , Metnyl •,t-(2-(li*(1-MthyltthyUM*ine)tthyl>t
1,000
    1
    1
    1
    1
  100
    1

    1
    1
                                                      oMthylidyne))
  300
  300
  $00  710,000
  500  /10,000
  $00
   10  /10.000
  100  710,000
  $00  /10.COO
1.000
  $00
  300
  100  /10.000

  500
  500
  100  710,000
  100  710,000
  100
  100  710,000
  100

  100 /10.000
  100 710.000

  100 710,000
                li»(»-f luoropr,*r*ltto> U2->•»,*',0,0') •

             Only the ttatutory or final 10 it the*n.  for wort Information, tot 40CH Tablt 102.4


             Thit aetoriel it a reeetive tolid.  The TN doet not default to 10,000 poundt
             for non-powder,  non-eel ten, non-aolJtfen for*.
             The calculated TOO chanted after technical review aa deeeriboti in the technical tupoort docuaent.
             Indicate* that the N U aubjoct to cnenoe when the atteoaaent of
             careinofenicity end/or other felicity U completed.
             Statutory roportoble ojuontity for purpotet-of notification under UIA tect
             The ttatutory 1 pound reportable quentity for aethyl ioocyonate aey fte edjuated in a future
             •ee choaicolt added that «ere not part of the eri|inal litt of 402 tubttercet.
             koviood TK bated on now or re-ev*iueted te*Ce(ty data.
             TPO it revited to Itt calculated value end doet not ehenee due to technical revfe* at in propeoed  rule
             The T*fl «ot roviaod after propottl duo to calculation error.
             Cheatcelt on the oriotnal (lot that do not aeet the tosicity criteria but boceutt of their hie*
             velua* and rocefnijed tauiicity ore eentiderod cheaicalt of concern ("Other

-------
   1i I.   The List «f  UtrtMly Hazardous Substtnctt and thtlr Threshold »lam
-------
         A.  Tha k<«t of latroBoly  Katardoua luMtencet and thair TKraohald Mennlnj; •uantltlee
                                    (Alaftokatical Ordar)
   CAS t
  ••••
   •1-04-7
  110-57-a
 10J1-47-4
  7e-02-l
 115-21-*
 527-M
  •4-13
1551-25
     •JO
  •24-1V
  S5S
 2001
 13l4-e7-1
  1M-05-4
2O47.1J-*
SM70-OI-*
                                                                                     •avartobla
                                                                                     Ouontity •
Toluene 2,0-Ollaocyonata
Trana-1,4-etehlarabutana
Triaalphoe
Triaxofao
Trlchleroocityl  CM or Ida
             TrlehloroCer*eriyl)
                                                                                .h
                                                                   .h


                                                                   ,h
                                                                   ,t

                                                                   ,1
                                                                                           100
                                                                                             1
                                                                                             1
 1314-K-7   line
    1
    1




1,000
5,000
  100
    1
    1
    1

  100
                                                                                                  Thraahald

  100
  SOO
  SOO
  SOO
  SOO
  SOO
  SOO
  SOO
  100
  SOO
  SOO
1,000
  100
  500
  SOO
  100
1,000
  100
1,000
  SOO
  100
  100
  100

  SOO
                                                                                                         /10.000
/10.000
/I0,000
/10.000

/10.000
/10.000

/10.000
710,000
/10.000
/10.000.
             Only tM muttery »r final  N it  shown.   r«r nor*  infar«Btian. Mt 4QCFI Taet* 502.4
         b   Thit aBtarfal  It a rtoctivt ulid.  Tha TK doM net dafault t« 10,000
             for  non-powdar,  nen-a»ltan,  non-tolution font.
         c   Tha  ealeutatad T*Q chonoad aftar  tacnnieal roviav a» daocribod in tha
         d   Indicated that tha M U tubjact  ta ehane* whon tha aaiaiaaant of patontial
             carclnatoniclty and/or ether tecictty  la cojDletad.
         e   Statwtary raportabla ojjontity  for purpoiai af notification uwJar tAIA aect 304(a)(2).
         f   Tha  ctatutery  1  paMVj reportacla  «uentity for nethyl iMcyonata a»y oa adjuated in e future ruloMktno. action.
         t   How  chosicala  added that Mere  not pert af tha erlfinel liat of 402 tuoBtaneaa.
         h   leviaed T»« katad en now or ra-avaluatao twicity deta.
         j   TO  ia revlaod to It* calculated  value and doea net cHanee due to technical review ae  In piepind rule.
         k   The  TH «H revteod •rter prepaiil due to calculation error.
         I   ChoBlcala an tha ori|indl HIT that do net e»et tha temlelty criteria out kocouae of their hi|n
             yeluia and rocoenlsod tMlelry are comidared cnoaicela of cencem ("Other

-------
     Is I.  TM lilt af fitrwtlr »«»rdoui tuMtme»«  and  thair Thra«*»old 'lanrina
                                                                                                        »*•• 1-1
                                   - •' 1
rwte < 1
t* 9 1
•Ta t 1

*,e 1
oiio^iA e 1
S j «•
. 1
ride • f
•nlc Otthlerfde ••• |

ceernne ^» ^
j^^^i^» e 1
fy1" e 1
. a k ^
^C***" e'.h 1
' d>
»^^e^^k^ A^a^e^^h 1 9> A 4«" *
^^^FW FrWB^n 1 kV * .
tw^f ipnvvfi* ^
Hyl * ^
«i 1
e 1

e t
• •••••••••VW^VM
100
100 no, ooo
500
100 710,000
10
500
1.000
1,000
500 /10.000
500 /10.000
1 710,000
500
1.000
10
10
500 /10.000
100 710.000
500
300 710,000
500 710,000
500
500
500 710.000
1,000 710,000
500
500 710.000
10 710,000
10 710,000
100 710,000
500
10
100 710.000
1,000
100
10,000
100
500
10,000
1,000
1,000
1,000 710,000
900
900
•100
900 710,000
900
100
900
1,000
100 710.000
900 710,000
100 710,000
900 710,000
100
100
•00
10 710,000
900
900
900
100
100 710,000
900 710,000
900
100
900
100 710.000
500
500 710,000

-------
<*  I.  TIM Lilt  •* Ixtrwty NtXirOM Sutotvwtt tnd th«ir Thr«h«l4


                             (CAS »J»«r Order)
                                                                           *«nt1t
107-U-J  tarin
!07-*»-3  W»
104-05-4  Vtrtyt Aectttt
106-23-4  iMpropyt CKK
10«-«S-2
101-M-S
109-41-S
IOf-77-J
ttO-OC-f
110-S7-4
110-0»-4
111-44.4
111-4»-J
11S-2V*
115-2*-4
11S-l»-T
ni-w-2
114-04-J
11»-»-0
122-14-S
m-ji-»
 12*-IT-«
 12*-W-7
 12f-00-0
 m-04-*
 1J1-S2-2
 140-29-4
 14C-74-1
 U1-M-2
 UJ-JJ-t
 144-49-0
 U9-74-4
 151-11-2
 15l-$fl-«
 1S1-S4-4
          Altt
          tantyl Cyvii*
          >Mit« CyvitO*
          Oil til
100
• 1
1 »
100
•Trlwthyl- • ,
1,000
U»er«n«tt 100
0 1,000
hiebft(4,4-OieMere)- t 1
Aeid • ,
* a i
•lliltr* t.h 1
'•(TrifluoroMtftyl)- * 1
» d 5,000
1 1,000
myltn«4i«iit'n* ( ^
l»ro«tt«Yi)-*-«l>tre- t 1
* d 100
I, 3>-Oichlere(tfi«nyt (ittr t 1
1 100
" d.t 1,000
»dt , ,
1
t 1
t 1
10
d.l 100
* $.000
;yanoftyerin «,h 1
100
•tftyl lth«r e.d 1
•,h 1
10
•*"*•»• d.l $,000
ircfonatt t 1
» «,l 1
1,000
100
'•*wt* • 1
1,000
100
ilwataitm • 1
t 1
Ittor 4 1
•,l 1
i»llm 0,11 1
• 1
1
»,h 1
c 1
flpyr»*tyl 0
-------
t I.   Th«
                         Iitrwty
                                         *nd thtir
                                                                                                 1-5
                                    (CAS
                                  Order)
    CAS  •
 ••••••••••
  7444-11-f
  7444-11-4
  74«7-»4-7
  7550-45-0
  75M-47
  7*31-09
  7*37-07-2
  7*47-01-0
  744A-39-3
  74*4-41-7
  7**4-f3-9
  7*97-37-2
  771»-i2-2
  77J2.04-1
  7723-14-0
  7T24-95-*
  7778-44-1
  77U-41-4
  7712-50-5
  7713-00-t
  7713-0*-4
  7713-07-*
  7713-W-O
  7713-70-2
  7713-00-4
  7714-34-1

  mil
  ^FS-7
  -7791-12-0
  7791-23-3
  7003-51-2
  •001-35-2
  OOA5-40-3
 10025-73-7
 100»-»7-3
 1004*-13-1
 10028-15-4
 10031-59-1
 10102-11-1
'10102-20-2
 10102-43-9
 10102-tt-O
                         Ch»*ieil  *
                                                                iiotn
                                                                              •  »t«wln«
                                                    ••••«••«•«•*••
 10140-«7>1
 1M10-40-1
     •ft*4
     •34-5
     •04-9
 10*74-95-4
 12002-03-t
 12100-13-3
 13071'79-9
 ism-ti-4

 13*10-01-0

 13U3-39-3
 13**3-*0-*
 13*94-00-9
 141*7-11-1
 1S2T1-41-T



 ^TO-57-7
 192I7-4S-7
 19*24-22-7
        J-S
       TrUz S2X)
                                                                    •
                                                                    t
                                                                    b.t

                                                                    •
                                                                    «.l
                                                                     •.t
                                                                     b.h
                                                                     *.l
                                                                     d
                                                                     k
                                                               •
                                                               4

                                                               c,»
                                                               *
ount
TtolKia Sulf»tt
S*4i« toltnit*
S«4l0i TtUurlt*
•
-------
      U t.  Th«
                                    (CAS
   CAS •

  991-42-4
  99«-30-1
  W9-I1-5
 1031-47-4
 10*6-45-1
 1122-40-7
 1124-33-0
 1129-41-5
 1303-21-2
 1304-19-0
 1SU-54-3
 1314-42-1
 1J14-44-7
         ••••••••••
 U27 53-3
 1397-94-0
 U20-07-1

 1558 25 4
 1543-4* 2
 1*00-27-7
 1422-32 8
 1*42-54-2
 1752-30-3
 1910-42-5
 1982-47-4
2001-95-8
2032-45-7
2074-50-2
2097-19-0
2104-44-5
2223-93 0
2231-57-4
2234-07-5
2275-14-5
2497-07-4
2524-03-0
2540-42-1
2570-24-5
2547-90-4
2431-37-0
2434-24-2
2445-30-7
2703-13-1
2757.14-4
2743-94-4
2774-04-1
ioj7-n-r
3254-43 5
35*9-57-1
3415-21-2
3**9-24-5
3*91-33-4
3734-97-2
373S-O-7
4044-45-9
4094-71-9
4104-14-7
417»-»-3
4301-SO-2
4414-44-0
4435-11-4
5241-13-0
583*-2« 3
4533-73-9
4923-22 4
7444-09-5
            Triwthyltin
            Zinc
            Artcneu* Osidt
            Anriirrcin A
            Dinoitrb
            CMoroxur«n
            Vtl inemytii
            Mtihiocarfi
            0>y«

            tntotMw
            t

Mi»tul**c*
rant

»*ritt
dt
Ithtr

on
wa«fierocfileri«otfi 0-«*«nyl tattf «
title Acltf.Mtftyl'rO-lthyt 0-(4-(Nttftyttft>
)

T™~
ll^te
"l^
Z'-TM^f f4-Ctiler -4>iwtriyl)-
tfwdiwint, M.N'-Oibutyl-
(2-CMoropMnyl)-
lyl
kroenttt
no*
• i AA
•em (oounat)


,h



1
1
5000
1
,t 1
1,000
100
,h 5000
,t 1
1
1
1
10
1
1
1
1
1
1
.« 1
10
1
,h 1
1
,t 1
1
1
1
h 1
1
1
1
,t,i 1
.K 1
1
1
1 1
1 1
t,«,h . 1
h 1,000
1
1
1
1
• 1

1
1
1
1
1
,« t

too
1
1
1
100
,R 10C
1
^ i
lanrini Agtniity
(9XT01)
100 710.000
500
100 710,000
500 710,000
500 710.000
500
500 710,000
100 710.000
100 710,000
100 710,000
10
100 710,000
500
100 710,000
1,000 710,000
500 /1C,!00
500
100
10 /10.000
500 710, 000
500
100 710,000
1,000 710.000
10 710.000
500 710,000
1,000 710.000
500 710,000
10 710,000
100 710,300
100 710,000
1,000 710,000
1,000 710,000
1,000
100 710.000
500
500
100
100 710,000
500
SOO 710.000
1.000
100 710,000
SOO
-100
100 710.000
10,000
500 710.000
1,000
SOO
500
500 710,000
SOO
100 710.000
100 710,000
SOO
100 710,000
100 710,000
100
100 710,000
1.000
100 710,000
100 710.000
SOO
100 710. DC
IOC 71G.3:
soc 710.3:
ICO 71C.-3.'
10 /ic.o:
50C

-------
OSWZR DIR. 19841.0
APPENDIX C.
CAS i
Section 302 Chemicale on Section
CHEMICAL NAME
313 List
TPO

50-00-0
51-75-2
56-38-2
57-14-7
57-57-8
57-74-9
58-89-9
60-34-4
62-53-3
62-73-7
62-75-9
67-66-3
74-83-9
74-90-8
75-15-0
75-21-8
75-44-5
7.r>-55-8
75-56-9
77-47-4
77-78-1
79-06-1
79-11-8
79-21-0
91-08-7
95-48-7
98-07-7
98-87-3
98-95-3
100-44-7
106-89-8
107-02-8
107-13-1
107-30-2
108-05-4
108-95-2
111-44-4
123-31-f
151-56-4
302-01-2
309-00-2
542-88-1
584-84-9
(continued)
Formaldehyde
Mechlorethamine
Parathion
D imethy Ihydr a z in*
Propiolactone, beta-
Chlordana
Lindane
Methylhydrazine
Aniline
Dichlorvos
Nitrosodijnethylamine
Chloroform
Mathyl bromide
Hydrocyanic acid
Carbon dieulfide
Ethylene oxide
Phosgene
Propyleneimine
Propylene oxide
Hexachlorocyclopentadiene
Dimethyl eulfate
AcrylajBide
Chloroacetic acid
Peracetic acid
Toluene, 2,6,-diiaocyanate
Creeol, o-
Benzotrichloride
Benzal chloride
Nitrobenzene
Benzyl chloride
Epichlorohydrin
Acrolein
Acrylonitrile
Cblorosethyl methyl ether
Vinyl acetate monomer
Pnenol
Oichloroethyl ether
Hydroquinone
Ethyleneimine
Hydrazine
Aldrin
Chloroaethyl ether
Toluene 2,4,-diieocyanate

500
10
100
1,000
500
1,000
1,000/10,000
500
1,000
1,000
1,000
10,000
1,000
100
10,000
1,000
10
10,000
10,000
100
500
1,000/10,000
100/10,000
500
100
1,000/10,000
100
500
10,000
500
1,000
500
10,000
100
1,000
500/10,000
10,000
500/10,000
500
1,000
500/10,000
100
500


-------
                                                OSWER DIR.  19841.0

APPENDIX C.  (continued)

    I          CHEMICAL NAME                 TPQ
505-60-2       Mustard gas                   500
534-52-1       Dinitrocr«sol                 10/10,000
624-83-9       Methyl isocyanat*             500
1464-53-5      Di«poxybutan«                 500
7550-45-0      Titanium t«trachlorid«        100
7647-01-0      Hydrochloric acid (gas only)  500
7664-39-3      Hydrog«n flourida             100
7664-41-7      Ammonia                       500
7664-93-9      Sulfuric acid                 1,000
7697-37-2      Nitric acid                   1,000
7723-14-0      Phosphorus                    100
7782-50-5      Chlorina                      100
8001-35-2      Toxaph«n« (Camphachlor)       500/10,000

-------
                                                              SEP  I 3 ,967

DELEGATIONS HViUAL                                              1200 TN


                   TOE CCMFREHESSIVE EN\raCWEOTAL. RESPONSE,
                    COMPENSATION, AND LIABILITY ACT  (CERQA)

        14-6.  Inspections, Sampling/ Information Gathering, Subpoenas,
                             and Entry for Response


1-  AUTHORITY.  Pursuant to the Comprehensive Environmental Response, Compen-
sation and Liability Act as amended (CERCLA), to enter any vessel, facility,
establishment, place, property or location for the purposes of inspections,
sampling, information gathering and response actions; to carry out inspections,
sampling, and information gathering; to require the production of information
and documents; to issue subpoenas; to issue compliance orders for production
of information and documents; to issue compliance orders for entry and inspection;
to obtain and execute warrants to support this authority; and to designate
representatives of the Administrator to carry out inspections, sampling, infor-
mation gathering, and response actions.
2.  TO WHOM DPT rr^TED.  Assistant Administrator for Solid Waste and Emergency
Response, Assistant Administrator for Enforcement and Compliance Monitoring,
and Regional Administrators.

3.  LIMITATIONS.

    a.  Regional Administrators and  the Assistant Administrator for Solid Waste
and Emergency Response or their delegatees must consult with the Assistant
Administrator for Enforcement  and Compliance Monitoring, or his/her designee,
prior to issuing compliance orders regarding information gathering or compliance
orders for entry and  inspection, or  issuing  subpoenas, unless or until such
consultation authority is waived by  memorandum.

    b.  The Assistant Administrator  for Solid Waste and Emergency Response or
his/her delegatee must consult with  the Assistant Administrator for Enforcement
and Compliance Monitoring or" his/her designee prior to obtaining warrants.

    c.  The Assistant Administrator  for Solid Waste and Emergency Response and
the Assistant Mainistrator  for Enforcement  and Compliance Monitoring or their
delegatees must consult with the appropriate Regional Administrator or his/her
designee prior to exercising these authorities.

4.  KHMJHJl!!l'mK ALTIHJKI'1'1 '.'  This authority  way br redeleyaLsd;

5.  ADDITIONAL REFERENCES.

    a. Sections 104(e),  109(a),  109(b)  and 122(e)  of  CHCLA-

    b. National Contingency  Plan, 40 CFR 300.

-------
 DELEGATIONS MANUAL
             COMPREHENSIVE EKyiROMMEKTAL RESPONSE, OOMPENSATICN,
                              AND LIABILITY ACT

                  14-12.   Civil Judicial Enforcement Actions


 1.   ALTTHORITY.   To  request  the Attorney General to appear and represent
 the Agency  irTany civil enforcement action and to intervene in any civil
 anforcement action instituted under the Comprehensive Environmental Response,
 QDitpensation, and Liability  Art, as amended  (CERQA); to request the Attorney
 General to  decline to prosecute a previously referred civil enforcement
 action? and to request the Attorney General  to initiate an appeal of a
 decision  in a civil  enforcement action  under CERCLA and represent the
 Agency in such an appeal.

 2.   TO WH3M DnfXiATED.   Regional Administrators, Assistant Administrator
 for Deforcement and  Qonpliance Monitoring, and the General Counsel.

 3.   LIMITATIONS.

     a.  The Regional Administrators may exercise this authority only in
 regard to requesting that the Attorney  General appear and represent the
Agency in civil actions under'CERCLA, requesting that the Attorney General
 intervene in civil actions under CERCLA, exclusive of appeals, and requesting
 that the Attorney General decline to prosecute a previously referred, civil
actj.cn.

     b.  The Regional Administrators may exercise this authority only in
cases specified in and in accordance with written agreements between authorized
representatives of the Agency and the Department of Justice.

     c.  The Assistant Administrator for Enforcement and Compliance Monitoring
must notify the Assistant Administrator for  Solid Waste and Emergency
Response and the  appropriate Regional Administrator prior to initiating or
 intervening in «  civil action undtr CERCIA,  requesting that the Attorney
General decline; to prosecute a previously referred civil enforcement action
under -CERCIA, jcequeating  that the Attorney General initiate or intervene
in a civil  action instituted under CERCXA, or formally initiating an appeal.

-------
  DELEGATIONS ^RNUAL
              COMPREHENSIVE ENVIRONMENTAL  RESPONSE. COMPENSATION,
                              AND LIABILITY ACT

              14-12.   Civil Judicial  Enforcement Actions (cont'd.)



      d.   The General Counsel may only exercise this authority with regard
 to appeals.

      e.   Any exercise of  appeal  authority will be be exercised by the
 General Counsel and  the Assistant Administrator for Enforcement and Compliance
 Monitoring.

      f.   The Regional Administrators must notify the Assistant Administrator
 for Solid Waste and  Emergency  Response and the Assistant Administrator for
 Enforcement  and Compliance Monitoring prior to the time they refer cases
 to the Department of Justice.

 4.   PPTffT-.mA.TICK AUTHORITY.   The Assistant Administrator for Enforcement
 and Compliance Monitoring and  the General Counsel may redelegate this
 authority to the Division Director  level.  Regional Administrators may
 redelegate this authority to the Regional Counsel.

 5.   ADDITIONAL ROrlLHSNCES.

      a.   Memorandum  of Understanding between the Agency and the Department
 of Justice, June 1977.

      b.   CERCLA Sections  104,  106,  107,  109, 122.

      c.   See the Chapter  14 delegation entitled "Emergency TRO's"
for Regional Administrators' authority to make direct referrals of requests
for emergency CERCLA  Temporary  Restraining Orders.

-------
 DELEGATIONS MANUAL
                  TOE COMPREHENSIVE ENVTRCNMEOTAL RESPONSE,
                   CCMPEKSATICN,  AND LIABILITY ACT (CERCLA)

                    14-13-A.   Criminal Enforcement Action*
 1.  AinHDRITY.  Pursuant to the Comprehensive Environmental Response,
 Compensation,  and Liability Act, as amended (CERCXA),  to cause criminal
 matters to be referred to the Department of Justice for assistance in field
 investigation, for initiation of a grand jury investigation, or for
 prosecution under CERCXA;  to authorize payment of awards up to $10,OX to
 any individual who provides information leading to the arrest and conviction
 of any person for a violation subject to a criminal penalty under CERCLA.

.2.  TO WH3M DELEGATED.  The Assistant Administrator for Enforcement and
 Compliance Monitoring.

 3.  LIMITATIONS.   The amount of CERCLA funds to be made available each
   *scal year for the payment of the awards as authorized by this delegation
    limited to an amount agreed upon annually by the Assistant Administrator
   r Enforcement and Compliance Monitoring and the Assistant Administrator for
 Solid Waste and Emergency Response.
4.   pETPTJYtATicN AITnPRTIY.   The authority to refer oases may be redelegated.
The authority to authorize payment of awards may be redelegated to the
Senior  Enforcement Counsel for Criminal Enforcement.

5.   ADDITIONAL HmKhNOS.  Sections 103(b)(3),  103(c),  103(d), and 109(d)
of  CERCLA.

-------
 DELEGATIONS MANUAL
                 TOE COMPREHENSIVE ENVIRQMENrAL RESPONSE.
                 "OCMPENSATICN. AND LIABILITY ACT  (CERCLA)

        14-1 3-B.  Concurrence  in Settl*«"»nt of Civil Judicial Actions
 1.  AUTHORITY.  To  exercise the Agency's concurrence in the settlement of
 civil  judicial enforcement actions under the Comprehensive Environmental
 Response, Compensation, and Liability Act, as amended (CERCLA), and to
 request  the Attorney General  to amend a consent decree issued under CERCIA.
 2.  ID WHCM pFTJnATED.  Regional Administrators.

 3.  LIMITATIONS.

     a.  Regional Administrators may exercise the Agency's concurrence
 authority in settlement of Regionally-initiated CERCLA section 104/107
 recovery actions where the total response costs at the facility do not
 exceed $500,000, excluding interest.

     b.  For all cases initiated by the Assistant Administrator for Solid
Waste and Emergency Response, the Regional Administrator or delegate* nust
 obtain the concurrence of the Assistant Administrators for Enforcement and
 Compliance Monitoring and Solid Waste and Emergency Response or their
 designees before exercising this authority.  The Assistant Administrators
 for Enforcement and Compliance Monitoring and Solid Waste and Emergency
 Response or their designees may waive the concurrence requirement by
 memorandum on a Region-by-Region basis.

     c.  For cases initiated by the Regional Administrator other than those
 identified in paragraph 3. a of this delegation  (in which the Regional Adminis-
 trator concurs for the Agency) , the Regional Administrator or delegatee must
 obtain the concurrence of the Assistant Administrators for Enforcement and
 Compliance Monitoring and Solid Waste and Emergency Response or their
 designees before exercising this authority.  The Assistant Administrators
 for Enforcement and Compliance Monitoring and Solid Waste and Emergency
 Response or their designees say waive the concurrence requirement by memorandum
 on a Region-by-Region basis.

     d.  Six moths after the Administrator's signature of this delegation,
 and every six Berths thereafter, th» Assistant Administrators for Enforcement
 and Compliance Monitoring and Solid Waste and Emergency Response, or their
 designees, will review each Region's experience  in settlement of civil
 judicial actions and, based upon that review, will consider  jointly waiving
 or modifying any advance concurrence requirement on a Region-by-Region
 basis.  The Administrator shall be apprised of  the status of the advance
 concurrence requirement upon completion of  sacJt review.

-------
                                     -2-
 DELEGATICNS MAMAL
                  TOE CCMPREHENSIVE  ENVIRCWaTrAL RESPOBE,
                   OCMPENSATION, AND LIABILITY ACT
    14-13-B.   Concurrence in Settlement  of Civil Judicial Actions  (cent1)
 4.   pFnFTjnATiCK ALTOPRITY.   The authority  to request the Attorney General
 to  amend a consent decree issued under CERQA nay be r•delegated to the
 Division Director level.   The other authorities  cited in paragraph 1.
 above may be redelegated.

 5.   ADDITIONAL REFERENCES.

      a.   Sections 104,  106,  107,  109,  and 122 of CERCLA.

      b.   All applicable Agency guidance and directives.

      c.   For actions including 31 USC 3711  and  its  applicable regulations,
 see delegations covering  claims of EPA found in Chapter 1 of  this Manual.

      d.   Settlements under CERCLA section 122(g) are covered  by delegation
PI-14-E,  "De Minimis Settlements."

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DELEGATION MANIAL
                 TOE CCMPRSHENSIVE EWIROMBOTAL RESPONSE
                  CCMPEtSATICK, AND LIABILITY ACT (PROA)
                          14-13-C.  Emergency TROs


 1.  ALTnORITY.  To  refer to the Attorney General requests for emergency
 Temporary Restraining Orders under the Crnprehensive Environnental Response,
 Compensation  and Liability Act. as amended (CERCLA).

 2.  TO WB3M DELR3ATED.  Regional Administrators and the Assistant Administrator
 for Enforcement and Compliance Monitoring.

 3.  LIMITATIONS.

    a.  The Regional Administrator or his/her delegate* must notify the
 Assistant Administrator for Enforcement and Compliance Monitoring and the
 Assistant Administrator for Solid Waste and Emergency Response or their
 designees when exercising this authority,

    b.  The Assistant Administrator for Enforcement and Compliance Monitoring
 or his/her delegate* toast notify the appropriate Regional Administrator and
 the Assistant Administrator for Solid Waste and Emergency Response or their
'designees when exercising this authority.

 4.  REPETirafllON AimCRITY..  The Assistant Administrator for Enforcement and
 Compliance Monitoring may redelegate this authority.  The authority delegated
 to Regional Administrators may be redelegatad to the On-Scene Coordinator
 level.

 5'  ADDITIONAL REFERENCES.

    a.  Memorandum of Understanding between the Agency and  the Department of
 Justice.

    b.  Section*  106(a),  106(b)  and 107 of CERCLA.

    c.  For r«£«rral of othar civil actions under CERC1A, see Delegation 14-12,
 "Civil Judicial Enforcement Actions."

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DELEGATIONS
                   THE COMPREHENSIVE ENVIRONMENTAL RESPONSE,
                    COMPENSATION AND LIABILITY ACT (CERCLA)

       14-14-A.  Determinations of Inrunent and Substantial Endanqenrent


1.  AUTHORITY.  Pursuant  to the Comprehensive Environmental Response, Compensation
and Liability Act  (CERCLA), to make determinations that there may be an imminent
and substantial endangerment to public health or welfare or the envirorment.

2.  TO WHOM DELEGATED.  Regional administrators.

3.  LIMITATIONS.  This authority shall be exercised subject to directives
issued by the Assistant Administrator for Solid Waste and Emergency Response.
Regional Administrators must consult with the Assistant Administrator for
Solid Vtoste and Emergency Response or his/fter designee when exercising this
authority.

4.  REDELEGATION AUTHORITY.  This authority may be redelegated.

5.  ADDITIONAL REFERENCES.  Section 106(a) of CERCLA.

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DELEGATIONS
                 THE OCMPRggKSIVE ENVIRCMglTERL RESPCNSE,
                 "ODMPEKSATICK AND LIABILITY ACT (CERQA)

         14-14-B.  Administrative Actions Through Unilateral Orders
1.  wnPRITY.  After giving notice to the affected State,  to take
administrative action pursuant to the Oomprehensive Bwironnental Response,
Condensation and Liability Act, as amended (fERCTA), including, but not
limited to/ issuing such unilateral orders as may be necessary to protect
public health and welfare and the environment.
2.  TO VBCM.DPrJf-ATEP.  Regional Administrators.

3.  LIMITATIONS .  Regional Administrators or their delegate** oust consult
with the Assistant Administrator for Solid Waste and Bnergency Response or
his/her designee When exercising this authority.
4.  RnyrmATICN WHORTTy.  This authority may be redelsgated.

5.  ADDITICNAL
    a.  Sections 104, 106, and 122 of OERGLA.

    b.  Applicable Agency guidance and 09WER directives.

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DELB3A.TICNS MANUAL
                 TOE COMPREHENSIVE ENVIRONMENTAL RESPCNSE,
                 "OPgEHSftTIOK AND LIABILITY ACT (CEROA)

          14*14-C.  Administrative Actions Through Consent Orders


1 .  AUttPRIfY.  After giving notice to the affected state, to take
adactnistr at i v* action pursuant to the comprehensive Environmental Response,
Compensation and Li-ability Act, as amended (CERCLA), including, but not
limited to, issuing such orders on consent as may be necessary to protect
public health and welfare and the environment.

2.  TO WH3K DELB3R,TED.  Regional Administrators.

3.
    a.  jRegional Administrators or their delegatees oust obtain the advance
concurrence- of the Assistant Administrator for Solid Waste and Bnergency
         or his/her design** before exercising any of the above authorities.
    b.  The Assistant Administrator for Solid Waste and Emergency Response
or his/her designee nay waive advance, concurrence requirements by memorandum.

    C.  This authority does not include 'recovery of response costs under
CERCLA Section 122 (h) or settlements with de ainlmis parties under CERCLA
Section 122(g).

4.  REDELEGATICM AUIHDRnY.  l^is authority may be redelegated.

5.
     ».  S«<=tions 104, 106, and 122 of CtRCLA.

     fe.  All applicable Agency^^uidance and directivM.

     e.  Autfccrlty to enter intH^or exercise Agency concurrence authority
    ncn- judicial cost: reocvery t^eements or administrative orders is
d«I«9*ted in 14-14-0, "Cost Racdvery NorKTudicial Agreements and Administrative
Onsen*
           	_„ to enter  int$ or exercise Agency concurrence authority in
           settlements  under .OEJI^LAJSection 122(g)  ie delegated in Delegation
             Miniais  Settlements."

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