'« Iht FtPi 10 pmtinr I!M> rwpoflM •dim rathi-r 'r-.-i. nial r««piifi«» 
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8282
, Federal  Regular / Vol. 53. No.  49 / Monday.  March 14. 1968  /  Notices
 attributed to known and financially-
 viable paniei. as determined, for
 example, by a preliminary nonbinding
 allocation of responsibility by the
 Government), the Agency may initially
 consider pursuing the recovery of all
 com under loint and several liability.
 However, if the litigative risks appear
 substantial, a mixed funding settlement
 may represent more than the
 Government would recover in litigation.
 •specially when the cost and time
 required for litigation is considered.
 Litigative risks which may weigh in
 favor of settlement include:
   • Weak evidence against financially
 viable potential settlors:
   • Equitable considerations which
 weigh ag»mst the imposition of joint and
 several liability.
   In addition, if the hazard at the site is
 serious and nc Fund-financed response
 is possible, a delay in the response
 action pending the conclusion of
 litigation might represent an
 unacceptable nsk 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 panics 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 m 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
  As noted in the above Introduction.
 the term mixed funding has been used to
refer to three different types of
settlement arrangements:
   (1) Preauthonzation. in which the
 PRPs conduct a response action and the
Agency agrees to allow a claim against
 the Fund for a portion of the response
casts:
  (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
have determined that a mixed funding .
                      settlement is appropriate, based 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
                      major types  of mixed funding, the
                      Agency generally prefers
                      preauthonzation. since the PRPs
                      conduct the  response action. However.
                      as noted below, caahouts 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 Tint stage, as described
                      below, ii the determination by the
                      Agency enforcement personnel that
                      preauthonzation is appropriate in the
                      context of the settlement 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  preauthonzauon.
                       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-PRPs 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 tirmr
                      required for  the preauinorizaiion
                      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 applications within a
                      45-day period, this timing limitation will
                      vary on a case-by-case basis. 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
lime in managing negotiations.         .
  (b) Availability of preauthoriution for
various response actual             *
  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
short time-frames often encountered in
these cases. Limited exceptions may be
considered in unusual circumstances, as-j
where preauthonzation will facilitate a
broader agreement  (e.g. an area-wide
Rl/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 dunng negotiations for such
activities.
  (c) Covenants not to sue for
preauthonzation settlements.
  For preauthonzauon of remedial
design and remedial action (RO/RA)
activities, the statute contains a specific
prevision related to remedy failure.
Section 122(b|(4) ofCERCLA states that
for cases involving preauthonzation. as •
described in section 122(b)(l). the Fund .
will be responsible for costs pf remedy  j
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 recovenns such
costs from parties who were not
signatories to the ongsnal agreement.
However, it should be noted that
remedy failure due 10 negligence of the
PRP will not trigger any Fund obligation.
In any case, a covenant not to sue
granted in praauthorize settlements     j
must comport with Agency guidance OB
covenants not to sue. as cited above.   '
  (d) Settlement provisions needed to
process claims.
  Settlement agreements involving
preauihorisaiion should contain the
following restrictions to facilitate the
processing of claim*
  • Settlement agreements should
specify a percentage of the total
estimated cost 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|cl(3|
requirement  that States contnbute 10  .
percent of the cost of the remedial

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                     Federal Regisler  /  Vol. 53.  Nu. 49  /  Monday. March  14. 1986 / Notices
                                                                       8283
  ition. However, proipccuve claimants
  re encouraged to Tile • litttr of
  loperation from the Slate along with
  ievr request (or prsauthorization. Thu
  •tier should describe any •preemenu
  stulling from tht claimants'
  ontuliaiion with the State, including
  ny State assurance of cooperation with
  fie remedial action. Further, all actioni
  onductad pursuant to * preauthonzed
  lain must be consistent with tht NCP
  md the proposed draft Response Claim
  egulations. when promulgated.
   • Claim* may be died only for costs
  ncurred after the date of
  ireauthorisaiion. Parties will not be
  tligible to uiakt a claim agaiost the
  ruad unlit  the entire cleanup or agreed-
  jpon preauthonxed phase (e.g..  an
 iperable unit) is completed according to
 ipecifications set out in the settlement
 agreement  and the Preauthonxation
 Decision Document.
  • Applicants must demonstrate that
 their proposed response cost! are
 reasonable. The applicant should justify
 any proposal to perform in activity in-
 house, o. to contract it out. Applicants
 may look >o Federal and State
 procurement practices for guidance on
 how to meet EPA'j objectives in the
 area of contracting and subcontracting.
  • PRPs mult be financially and
 technically capable of implementing all
of the agreed upon response action.
Parties may be required  to submit
financial assurances or performance
bonds to substantiate their financial
capability for completing the response
action.

Cash-out:.
  For settlement proposals involving 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 in
the Interim Settlement Policy noted in
Section UL  the key issues in these
agreements include:
  • The percentage of the total costs to
be paid by settlors (Le. 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
  • Equitable considerations for both
the settling and non-settling parties.
including the nature of any covenants
not to sue in the cash-out 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 Purt IV
of the Interim CERCLA Settlement
Policy. It u important to note that, once
a Fund-lead response action is ongoing.
the potential benefit of mixed funding as
 * means of expediting cleanup ;s l
 eliminated. In addition, a cash-out of
 some of the PR>*s during the response
 action may serve to fragment the
 Government's enforcement proceeding*.
 since cost recovery will general!) be
 pursued once the remedial action is
 completed. Other issues related to cash-
 outs include:
  (aj Information needs related to cash-
 out settlement*
  One example of the use of cash-out
 settlements could involve PRPs which
 have contributed a low percentage of
 the waste to a sue. and are not
 technically or financially capable of
 conducting the entire response action
 (e.g. preauthohzation is not en opuon.)
 In order for this type of satllameni to be
 appropriate for both settling and non-
 settling responsible parties, 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 nigh
 level of confidence m the information
 concerning the liability at the site and
 the expected cost of the remedy  in 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-out
 settlements.
  The sufficiency of the Agency *
 information related to PRH liability and
 the nature, stage of development  minima
 parties. «» defined by section 122|g).
 similar analytical factors are important
 in both instances. Thus. Agency
 guidance eroded "Interim Guidelines on
 Settlements with De Minima Waste
 Contributors under Secnon 18|g) of
 SARA", cited above, may also be
 helpful for cash-out settlements.
  (c) Slate cost-Share requirements for
 cash-out settlements.
  When the Federal government use* it*
 response authority to conduct a
 remedial action, section I04(c)(3) of
 CERCLA requires that the State "pay(»|
 or will assure payment" of 10% of the
 remedial action, including all future
 maintenance, or 50% 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 settlement*.
 The cost-share will be calculated using
 tbe total remedial costs, rather than the
 percentage of the Fund share alone.
  There are a variety of ways that the
 Slate can "pay or assure payment" of
 the appropriate cost-share. For example.
 the Slate, the Federal government and
 PRPs may enter into on agreement under
 Slate law and CERCLA in which the
 PRPs pay 10% to the State, and the State
 obligates the money for use at the sue in
•question. The Slate may also use its own
 funds to pay for any portion of its share
 that cannot be paid for by PRPs. In
 general, cash-out settlements shouli!
 only be considered when the litigation
 team is reasonably certain thai the Siate
 it willing ar.d able to pay for us ID".
 share, although the cost-share need not
 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 in
 which the Agency can identify discrete
 phases or operable units of the response
 action. One common example involve* a
 settlement with the PRPs to conduct the
 RO/RA once the Agent) hiit conducttd
 the  Rl/FS.
  A second, more complicated mixed
 work arrangement could involve an •
 agreement in which the Agency and the
 PRPs agree lo conduct separate portions
 of an area-wide RI. In this example, the
 Agency might agree lo 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 in detail the individual activities

-------
 82S4
Federal Register  /  Vol.  53. No.  49 / Monday:  March T4,.1988 / Notices
 for which each parry will be responsible
 before enienng into any mixed work
 settlement. In addition, any covenants
 not 10 sue in mixed work settlements
 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 m 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 a M) activities
 remains  with the PRPs. Ir. some
 circumstances, a State may agree, as a
 party to  the settlement, to manage 0 &
 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 4 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 previsions which commit the
 Federal government to sue non-settling
 parties at a particular site. At most, the
 agreement may indicate  that the
 Government has a  "present intention" to
 sue non-settlors, subject 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
 case-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 reserve the right to
 bring an  enforcement action against
 them, contingent upon a certain event.
 such as an unsuccessful enforcement
 action against noB-eattlon. Such an
 arrangement is not desirable, although it
 may bit acceptable in limited
 circumstances. Such an offer should not
 be used by settlors as a means of
 reducing the amount offered up front In
 addition, the negotiation team should
 consider  the practical problems that
 might arise in implementing such an
 arrangement including statute of
 limitation issues 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: For preauthorization
                   and mixed workcaees 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 of Settlements Involving Mixed
                   Funding
                    As noted in Section L consideration of
                   a site for any type of mixed funding
                   involves a two-stage process. The site
                   first 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 fll indicating the
                   Agency's preferences among venous
                   combinations of factors. Once the
                   Regional enforcement personnel
                   determines that a mixed funding
                   settlement will be acceptable, then the
                   factors noted in Section (V 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 improved process. Regions should
                   conduct both stages of the mixed
                   funding analysis aa early as possible
                   (e-g- prior to  the appropriate special
                   notice.)
                    Timely Headquarters and 00)
                   notification is particularly important for
                   cases involving preauthorization. since
                   the use of preauthoriation in
                   settlements requires both the approval
                   of the settlement for preauthorizanon. aa
                   described above, and the review by
                   OERR of the request for
                   preauthorization itself. Early DO|
involvement is necessary in mixed
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
preauthorization agreement. Therefore.
OERR should be contacted once (he
mixed funding analysis has been
completed and the Region supports
further consideration of
preauthorization. For further information
on the draft Response Claims
regulations and the procedure for      {
preauthorization with OERR. contact   I
William 0. Ross. Office of Emergency   1
and Remedial Response (WH-S48). (FTS)
382-4643.                           7
  Issues which cannot be resolved at    :
the staff level may be raised to the     J
Settlement Decision Committee (SDC). a *
Headquarters-based review panel. Like '
all consent decrees, mixed funding
settlements will require final approval
by the Assistant Administrator (AA) for
the Office of Solid Waste and
Emergency Response (OSWER). the AA<
OEC.M. and the Assistant Attorney
General for Lands and Natural
Resources. If the amount  to be paid by
the Fund exceeds $730.000 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 123(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 aa
well as the codification of much of this
Policy Section 122 of the 1986
Amendments*
  The assessment of mixed funding for i
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
•s to the most effective means of
promoting cleanup at a site while

-------
                     Federal Register / Vol  53. No,49 /.Monday. March 14. 1888 /  Notices
 insuring the most efficient UM of the
 Agency i resources, including the Fund
 inelf. Regions are encouraged to
 connder • mixed funding settlement
 when an assessment of the settlement
 criteria, including the strength of the
 evidence, the equine* of the settlement.
 and the public interest, indicate that
 mixed funding is in the bet i interest of
 the Government, the public and the
 environment.
   For further information or questions
 concerning this 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 relied upon to
 create any rights, substantive or
 procedural, enforceable by ar.y 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.
 |FR Doe. B.-W- F.led J-ll-68. »:4S am)
 •iLUMi COOt
EXPORT-IMPORT BANK OF THE
UNITED STATES

Advisory Committee of the Export-
Import Bank of tne United States;
Open Meeting

SUMMAMV: The Advisory Committee was
established by Pub. L 9&-181. November
30.1963. to advise the Export-Import
Bank on its programs and to provide
comments for inclusion in the reports of
the E*pori^tnport Bank to the United
States Congress.
  Time and Place: Tuesday. March 29.
1988 from 930 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-Tern Report to
Congress and Competitiveness Report.
Review of IMS Issues (or Advisory
Committee. Briefing on FC1A Strategic
Plan. State/City Update, and other
topic*.
  Public Participation: The meeting will
be open to public participation, and the
last 20 minutes will be set aside for oral
questions or comments. Members of the
public may also file written siaiemoni(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 Joan P.
 Harris. Room 933.811 Vermont Avenue
 NW. Washington. DC 20571. (2021 566-
 8871. not later than March 28.1888. If
 any person wishes auxiliary aids (such
 as a language interpreter) or other
 special accommodations, please contact
 prior to March 22.1968 the Office of the
 Secretary. Room 935.811 Vermont
 Avenue NW.. Washington. DC 20571.
 Voice: (202) 566-8871 or TDD: (2021 535-
 3913.
  Further Information: For further
 information, contact loan P. Hams.
 Room 935. 811 Vermont Avenue NW..
 Washington. DC 20371. (202) 566-8871.
 Han FMMHDJHI.
 Central Counttl.
 (PR Doc. 86-445T Filed J-ll-86. 8:45 «m|
 BUJMC COM t*M-o>-«
FEDERAL COMMUNICATIONS
COMMISSION

Specialised Mobile Radio Service
Frequencies To Be Available for
Reassignment

  The following channels were recently
recovered from  licensees who failed to
meet the Commission's loading or
construction requirements and will be
available for reassignment to trunked
Specialized Mobile Radio (SMR1
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 Rjies
90.362 and 90.621.
846/060 lia MHz
Rock ford. IL
42-16-SO North
89-02-16 Wtsi
•58/860.037) MHz
Front Royal VA
36-58-29 North
78-12-08 West
861/866.4675 MHz
Swanton. OH
41-3540 North
83-SO-WWMl
•36/880.5.175 MHl
Mumson. CO            '
39-40-23 North
104-13-04 West
•57/8800623 MHs
Phoenix. A2
33-01-39 North
m-33-JO Wtst
656/86031:5 MHs
Baton Rowtt. LA
30-23-56 North
91-U-46 West
•58/860.5825 MHl
Wouurn. MA
42-21-30 North
  -sr^» West
         4.4371
         64371
8817873 MHa
Syracuse. NY
40-Q2-M North
78-08.08 West
  Pursuant to the Public Notice of
January 6.1966. 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 Tint
application received after the channels
become available for reassignment
opens the Tiling window. The window
stays open only for the day on which the
first application is received. All
applications MUST reference the dote
and DA number of thit Public Nonce in
order to be considered 'or these
frequencies.
  There is a 530.00  fee required for edcr
application filed. All checks ihouid be
made payable to the FCC. Appl,canons
should be mailed to: Federal
Communications Commission. 800
Megahertz Service. P.O. Box 36CM16M.
Pittsburgh. PA 13251-4416. Applications
may also be filed in person between 9:00
AM and 3:00 PM at the following
address: Federal Communications
Commission, c/o Mellon Bank. Three
Mellon Bank Center. 525 Wiliiam Penr.
Way. rth Floor. Room 1S3-2T13.
Pittsburgh. PA 15359. Attention:
(Wholesale lockbox Shift Supervisor!.
  Fur further information, refer to Puolic
Notice of January 6.1986 or contact
Riley Hollingsworth or Betty Woolforil
C02163:-Tl25 of the .Private Radio
Bureau's Land Mobile and Micrnudvc
Division.
HrJtTjl Cjnnunicjiior.i Comrr\:\».Lo
H. Walker Fuller III.
Aetr.f $*rrr:o.-.:
|FR  Doc. 68-WW Filed 3-11-88. H 4* -m|
FEDERAL RESERVE SYSTEM

CtwtMre Financial Corp. el at:
Formations of. Acquisitions by. and
Mergers of Bank Holding Companies

  The companies listed in this notice
have applied for the Board's approval
under section 3 of the Bank Holding
Company Act (12 U5.C. 18421 and
I 225.14 of the Board's Regulation Y (12
CPU 225.14) to become  a bank holding
company .or to acquire a bank or bunk
holding company. The factors that arc
considered in acting on the applications
are set fonh in section 3|c) of the Act  (i:
USC 1642(cl).
  Each application is available for
immediate inspection at the Federal

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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 waa 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 3.005 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
unite at a land disposal facility must also be controlled by a
RCRA or equivalent corrective action program.  While the
 original policy required compliance with RCRA and other
 applicable lavs, 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-sits 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:

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                                                         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 must 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 CZRCLA 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

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                                                           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 sites are covered by this policy only where there  is an
expenditure of Fund money or where the cleanup is undertaken
under CZRCLA authority.

     Th« final factor that affects how this revised policy
applies is the date of the decision document.  As noted
earlier, there are 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
documents 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

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                                                          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 53008(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, i£ al, December 16,
1985).  To summarize, a release is any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injection,
escaping, leaching, dumping or disposing to the environment.
This includes releases to surface water, ground water,  land
surface, soil and air.

     A release also include* 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.

     fie. ninimis releases from receiving units are exempt; that
is, they are not considered.to be releases under the  off-site

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                                                     .    9834.1 1
                              -5-
policy.  Cfi minimis releases are those that 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 Hater 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 indication* of a release Bight 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,

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                                                          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.

RecordJceeping 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 monitoring 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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                                                           9834.11
                              -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 lavs 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., de 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.

G.  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.  R
     Determinations of acceptability to receive an off-site
transfer of CZRCLA waste will be made by EPA or by States
authorised 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
    Acceptability Criteria for Wastes Generated Under
    Decision
     CERCLA 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, must 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 may 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
                              -9-
B.  Acceptability Criteria for Wastes Generated Under Post-SARj
     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 violation* at or affecting
          the receiving unit;

     o    There must be no. 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 Subtitle C Treatment.
Storage and Disposal Facilities.  The first 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 b« no. releases at receiving units.  Releases
from receiving unit*, except for de aininis release* and State-
and Federally-permitted releases, must be eliminated and any
prior contamination. from the release au*t 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-wide
investigation.  This investigation addresses EPA's affirmative
duty under CERCLA f!21(d)(3) to determine that there are no
releases at the facility.

     Release* of RCRA hazardous vast* or hazardous
constituent* and CERCLA hazardous substances are all  included
under th« policy.  Whil* th« RFA need not  focu* on  identifying
release* of hazardqu* substances that are  not RCRA  hazardous
wastes or hazardous constituent*, to the extent cuch  releases
are discovered in an RFA or through other  means, they will be

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                                                          9834.1 1
                              -10-
considered the sane as a release of hazardous waste or
hazardous constituents.

     o  Additional Criteria Applicable to RCRA Subtitle e
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 &
release.  In addition, land disposal facilities must have
received a comprehensive ground-water monitoring evaluation
(CKE) or an operation and maintenance (04M) inspection within
the last year.

     Units at RCRA Subtitle c land disposal facilities
receiving CERCLA waste that is also RCRA hazardous waste must
meet the RCRA minimum technology requirements of RCRA §3004(0)0
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, Subtitle C Treatment 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,
release* must b« 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 Perait-bv-Rule Facilities.
This revised policy is also applicable  to  facilities subject to
the RCRA permit-by-rule provisions  in 40 CFR  270.60.   These
include ocean disposal barges or vessels,  injection wells  and
publicly owned treatment works  (POTWs).  Permit-by-nile
facilities receiving RCRA hazardous waste  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-
                                      i
 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 pretreataent 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 may be deemed appropriate or
 inappropriate for receipt of CERCLA waste.

      3.  criteria Applicable to Non-Subtitle 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 Atomic 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, the 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.
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.

     The) responsible government official 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 -sits 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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                                                          9834.1V
                              -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 us* 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
          (CUE)  or an operation and maintenance  (04M)
          inspection within the last year, in accordance with
          the timeframes specified in the RCRA Implementation
          Plan (RIP).

     o    RCRA Facility Assessments fRFAsl.  To be eligible
          under this policy, a RCRA Subtitle C  facility must
          have had an RPA or equivalent facility-wide
          investigation.  The UFA 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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                                                         9834.11
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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                                                            9834.
                              -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 nay 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 CERCLA waste to the facility on the 60th
          calendar day after issuance of the notice.

     o  .  Notice that the owner/operator may 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 CERCLA 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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                                                         9830
                              -17-
£_,	Procedures  for Facilities with Outstanding Unaeeaptability
     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 wastjas, 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.

     These 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 Unacceptabilitv

     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  Criteria11 section of this policy.

     For ±he purposes of this policy, releases will be
considered controlled upon issuance of an-order  or permit that

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                                                        9830
                              -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 CERCLA
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 CERCZA 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 as 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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                              .„.                       9834.11
          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 Regions should amend the
Cooperative Agreement.

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      i        UNITED STATES ENVIRONMENTAL PROTECTION AOENCY


'**«» ^<*                              '
                                             OSWIR Dir»ctlv«  9835.3


                         .  DOT  5 .537
MHORAJIDOM

SOSJECT:   EPA  Interim  Guidance  on  Zndemnifieation  of  Super fund
           Reapoyiae  Aey-DRContractora  Onder  Section  lit  of  SARA
              £X-t- )/<&•*'
PROM:      J. wjiftton Porter,  Assistant Adminiatrator
               :e/fof Solid  V4*M apj)  Emergency  Reaponae
                       •*^-  /•^^^*J
TO:        Regional  Administrator,  Regions  l^l,
           Regional  Counsel, Regions  1-X
           Director, waste  Management Division
           Regions Z, IV, v, VII, and VZZZ
           Director, Emergency and  Remedial  Response  Division
           Region  II
           Director, Hazardous Waste  Management Division
           Region  III and VI
           Director, Toiics and Waste Management Division
           Region  IK
           Director, Basardous Waste  Division
           Region  l       .
           Director, Environmental  Services  Division
           Regions Z, VI, and  VIZ
     Subject to certain  restrictions,  Section lit of the      •  •
Superfand AMBdMnts  and Reautboriiatlon Act of Its* (SARA)
authorises the Environmental Protection Agency (IPA)1 to provide
indemnification2  to response action contractors (RACsl working at
Superfund sites for states,  potentially responsible partiea
(•*••), and EPA  (including  RACs working for tba U.S. Army Corps).
     1  Ondtr Eiocutive  Order  12510, tba President baa also
autborised other  Federal agencies to indemnify RACs working for
those agencies.

     2  -Indemnification" is an agreement whereby one party
agrees to reimburse  a  second party for losses (in tbis case
liability losses)  suffered by the second party.

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                                2          OSMZft Directive 9135.5


of Bngi&eeJo) at t»A-lead aitea)3.  Th« purpose of thli MMO it  to
describe b,«v IPA «ay providt indeanlficatior to RACa using
Section lit authority.


iaekgroand

     Response action contractor* havt traditionally relied on
commercial liability inauranct or indemnification to sufficiently
offset tbtir potential liability risks fro* participation in ttit
Superfund progrtm.  During the Superfund roautborisatien debate,
tba RAC coaBunity idantifitd several factor! which, tba RACa
contended, impaired thair ability to ad«quat«ly offaat risk.
Th«aa factora included:

o    Potential subjection to strict, joint and several liability
     under Superfund and under aome atate laws* and

o    Inability of the eoaaercial liability insurance aarket to
     provide liability insurance coverage to RACa involved in the-
     Superfund cleanup ptograa that is both adequate and
     affordable.

     Prior to the reauthorixation of CllCtA, itA provided
indeanification to ftACs working tor I»A through contract
authority iapleaenting CEXCLA.  t»A took this atap ID -order to
retain qualified contractors, given tba absence of pollution
liability insurance coverage.  Ondet this old indeanification
agreeaent, the federal government indemnified lACs above an
initial fl million for third party liabilities and defense
expenses.  The indemnification agreement waa void in cases of
gross negligence or willful misconduct.
     3  SAJtA Section llf
-------
                                           OSWIR Direetiva
             lit of SARA responds to >any of tht eonctcns of th«
RAC coasiuBity by:

o    Establishing a standard of negligence foe Actions brought
     against RACs under Federal
o    Authorizing EPA to provide to RACs, on • discretionary
     bails, Halted indemnification against pollution liability
     arising froa RAC negligence; and

o    Providing eipreas statutory authority for indoanif ieation
     and a funding ••cbanis*.

     Th« approach takan in faction 119 provisions is baaad on tht
following kay points:

o    A Ptdtral liability standard of nagliganea, cotbinad with
     RAC indasmif ieation which is subjaet to limits and
     daductiblast providas adtquata parforaanca incantitraa for
     RACs working in tha Suparfund prograai

o    RAC indasmif ieation providas an adoquata substituta for
     insurance)

o    Discrationary indemnification is an intari» vehicle that
     will keep the Superfund prograa operative until tbe
     insurance industry return* to tbe IXC liability insurance
     •arkat; and

o    Discretionary indeanif ieation does not create a Federally
     intrusive insurance prograa that interferes with private
     aector efforts to develop RAC liability insurance coverage.
     *  The Federal standard of negligence under  lection  119
applies only to federal lav.   It does  not preclude  States fro*
applying their own statutory lav oc COMOB lav  liability
atandarda, which Bay in sosie cases b«  strict  liability.   Response
action contractors sued in  Federal courts are under a  "standard
of care" defined by Federal lav as negligenee.  Iowavac,  if an
action is brought under state  lav, a strict liability  standard
could apply.

-------
 SPA  Taek  Patee  oa 1AC  Indemnification
                                           08WER Directive 9I3S.S
      To  avoid program delays, a Task Peret was established to
 determine  how.*PA  will provide indemnification to RACs working in
 tht  Suptrfund program.   Tht Task Peret is composed of
 representatives  froa EPA's offiet of Naate Program Enforcement
 (OWPE),  Office of  Emergency and Remedial Response (OEM), Office
 of Solid Haste  (OfV), office of General Counsel (OCC), Office of
 the  Comptroller  
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                                5          OSWBR Directive 9135.S


comment.  m>anwhile, tPA is providing contractors with Section
119 coverif* oo »n  interim basis, using procedures outlined in
this memorandum.  Oltimately, this coverage will be amended to
reflect guidaace tnd regulations that will be developed in
conference with Section 119 requirements.
               I

     As further described in this memorandum, authorisation to
provide indemnification will be Bade by OStfiR with concurrence
from the Office of  the Comptroller (OC).  Authorisation to
indemnify will be aade upon receipt of a recommendation froa the
Task Force.  The OC will provide concurrence (or non-concurrence)
with reeomaendations to Indemnify within seven calendar days of
receipt of a recommendation,  execution of indeanity agreements
will be Bade by appropriate Agency adainiatrative offices.

     Section 119(c)(4) aandates that RACs Bust meet the following
requirements before they can receive Federal indemnification for
potential pollution liability associated with Superfund response
action activities:

o    The RAC aust aake diligent efforts to obtain Insurance
     coverage froa  non-Pederal sources to cover pollution
     liability; and

o    In the case of a RAC contract covering acre than ont
     facility, the  RAC agrees to continue to Bake 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
circuBstances Bust  exist before a RAC can receive Federal
indeanification for potential pollution liability associated with
Superfund response  action activities:

o    At the time 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 riski and

o    Adequate insurance to cover such liability It not generally
     available at the tiae the response action contract is
     entered into.

     Za future guidance  (i.e., the guidance which is to be
publiabed for public coamtnt), l»A plans  to include guidelines
for deteraining whether insurance is 'generally available" or  ia
•fairly and reasonably priced'.  For the  purpose of this  interim
guidance, IPA has deterained, based on  information currently
available, that Superfund RACs are unable to obtain reasonably
priced pollution liability insurance.  Therefore, RAC* are
eligible to receive indeanification under Section 119  from  DOt of

-------
                                €          OSVER Oirtetivt 5135.5


SARA.  aowever, IPA will ctquitt that RACs •••king Federal
indemnification meet th« following requirements:

o    within 30-day* of signing an indemnification agreement with
     EPA, RACa muat submit* to EPA (ec to the 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 • written
     statement from an insurance broker stating that the RAC has
     attempted to secure pollution liability coverage from
     insurance carriers in the past sii months).

o    If the RAC has secured pollution liability coverage, it must
     submit to EPA (or to the State Contracting Officer) a copy
     of the policy and declaration pagei and

o    Every twelve months (or more frequently, if EPA determines
     that there has been a significant change in circumatancea
     concerning the availability of pollution liability
     insurance) the RAC must submit to CPA (or to the State
     Contracting Officer) written documentation 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 insurancei

          Xf 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) premium cbargedi 3) Halts of coverage; 4)
          deductible levels, and any ether 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 reportt

          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 acceptedt and

          A status report concerning the  alternative pollution
          liability risk transfer mechanisms the RAC has pursued
          other than commercial pollution liability  insurance
          (e.g., risk retention groups, purchasing groups,
          aaaociation captives).

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                                 7          OSWCJ Directive 1135.5


      This tnforaation should be forwarded to the appropriate EPA
 official ffcc State Contracting Officer).  This information will
 bt reviewed by the Tack Force at needed.

      As required under tlve interia guidelines listed above,  EPA
 oipecti RACs to demonstrate the eitent to which they have
 attempted to secure pollution liability insurance coverage.   EPA
 also eipects that RACs will continue to Monitor the aarket for
 pollution liability insurance, and continue to seek and secure
 such insurance coverage (however limited) froa commercial
 insurance carriers or through alternative risk transfer
 •echanisais (e.g., self-insurance pools).


 ladomnificatloa of lACs working, for 1PA

      Pre-SARA indemnification teras will apply to work perforaed
 at a site after the date of enactaent (DOC) of SARA if response
 work at the site was initiated under An EPA contract prior to the
 DOE Of  SARA.

      EPA will enter into new indeanification agreeaenta  (See
 Attachment A),  subject to Section 119 authority, witht

 o     RACs who are currently working under contract with EPA, for
      work they will initiate at a new site after DOC of SAJLAi and

 o     RACs receiving new contracts (oe atw cooperative agroeaents,
      in the case of Site Demonstration projects) with CPA after
      DOC of SARA for Superfund response action activities.


      RACs currently under contract with CPA have been alerted to
 the changes that will be forthcoaing to their indeanification
 agreeaents with CPA.  EPA headquarters personnel In the
 Procurement and Contracts Nanageaent Division of the Office of
 Adaiaistratioa have been trained ea the use of Section 119 and,
 with the assistance of the Task Force, will administer Section
 lit indeanification interia procedures for CPA contractors.
 Requests foe  indemnification of EPA .contractors will be  subject
'to the  approval of OSWCR and concurrence of OC.

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                                8          OSWER Directive 9I3S.S


 Indemnification of SACs Working for States

     Sectisai  llf(e)(2) authorizes the indeanification of RACa
 working for States or political subdivisions of States  (purauant
 to a Stetion 104(d)(l) agreeaent with EPA) for new work Initiatad
 at Superfund  aitaa from DOB of SARA.  EPA aay indeanify RACa
 perforaing raaponaa action activities for a Stata at a State-lead
 Suparfund aite after DOE of SARA.  EFA will offer indeanification
 to RACa working for a Stata only if:

 o    The RAC'a raaponaa 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 Bust aieet all of the circuaatancea
     and iaauanca requireatnta aat forth by Section 119(c)(4), aa
     liatad abovai and

 o    RACa working for a State must meet all of EFA'a interim
     guideline requirements, aa listed previously on pagea five
     and aix.

 EPA will not  offer indemnification to RACs for site work they
 perforaed'Fo'r statea prior to DOE of SARA.  Any EPA
 indemnification provided to a RAC(s) working for a State(a) will
 be subject to limits, deductibles, aad other restrictions as
 required by Section 119(c)(S).

     Until EPA issues final guidance and regulations, all
 requests for  EPA indemnification of a. XAC working for a Stata at
a Superfund aite will be processed via the Task Force.  Statea
 ahould aubait requests to both tbt Indemnification Task Force,
c/o Director, Office of Emergency and Remedial Response (OERR),
and to the Regional Superfund Branch Chief.  Requests should
 identify the  Region*! Site Coordinator and State contact, and
should include pertinent information regarding Section  119(c)<4).
 requirements  as discussed previously.  Xf the Task Force
 recommends 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 IPA indemnification of a State RAC will  be
made by the Director of the Office of Emergency and  Remedial
Response.  Zf approval is authorised, then the Oranta
 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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                                           OSW.BR Oirtetiv* 1135.5
 IndemaifieafciOB of RACs working for Other Federal Agencies
     Section  119(c)(2) authorises the indemnification of RACs
working for other Federal agencies at Superfund sites from DOE of
SARA.  A delegation of authority from the President authorizing
othtt Federal Agencies to us* Section 119 provisions waa laautd
on January 26,  1917.  Othtt r«d«ral agencies follow all EFA
guidance and  regulations with respect to faction 119.  Otbar
Federal agencies that us* Section 119 authority must provide
their ovn aourc* of funds (e.g.,their agency appropriation) to
pay all indemnification costs (e.g., claims and legal defense
casts).

     At sosie  Super fund sites, the D.S. Any Corps of Engineers
•anages response actions pursuant to an interagency agreement
with EPA.  For  Section 119 Indemnification purposes, any HAC
working as a  contractor for the Corps of Engineers at such sites  .
(and where, for remedial actions, the site is listed on the NFL)
is considered to be working for EPA rather than for some "other
Federal agency".  EFA will offer the same indemnification to
contractors procured by the Corps of Engineers that it offers to
contractors procured by EPA.


Indwnification of tACs Working tot Ft**

     Onder Section 119(e)(2) authority, EFA can, in limited
circumstances and subject to strict financial'tests, indemnify
RACs performing response action activities foe PKPs subject to a
consent order or decree at Superfund sites after DOE of SA1A.
EFA will use  its authority to indemnify lACs working for FRFs
only in eitremely limited cases, e.g., where EFA indemnification
of the FRF RAC  is the solution of last resort.  EFA will offer
indemnification to RACs working for FRFs only if;

o    The FRFs are unable to provide adequate indemnification, and
     as a result, are unable to obtain the services of a
     qualified RACi

o    The RAC's  response action is part of new site work initiated
     at a fuperfund site after DOE of SAJU, and the action is
     related  specifically to the cleanup of the sitet

o    RACs working for FRFs meet all of the issuance  requirements
     set forth  by Section 119(c)(4)j

o    The circumstances set forth in Section llt(c)(4)'eiisti  and

o    RACs working for FHFs meet all of EFA's  interim guideline
     requirements.

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                                10         OSWER Directive M3S.S


     EVA wCtt net efftr indeanifiettien to RACa tec work
performed %»r FIT* prior to DOE of SARA, nor for any fit RAC
reapoaae amivity that ia not related specifically to • reaedy at
• tuperfuno* aite.
            •

     Further, Action ll»(c)(5)(C) of IAJU requirea that, before
EPA can enter into an indemnification agreement with • RAC
performing work under contract with • PRP(a) at a Superfuad
aite(a), IPA auat determine the amount which tha PRP(a) la able
to indemnify th« RAC.  In making  aueh a deteralnation, BPA aball
tak* into account tht total n«t aaaata and raaourcaa of tha
PRKe) with reapect to tha facility at tha tiae of auch  .
determination*.  If EPA detorainea that tha aaount which tha
PRP(a) ia abla to indaanify tha RAC ia inadequate, than IPA aay
antar into an indemnification agreoaent with tba RAC to aa«t tha
anticipated ahortfall.  EPA will  eonaidar tha eoabiaad
capabilities of all tha PRPa at a aita to determine whether, aa a
group, they are capable of providing adequate coverage.  Xn
general, the Agency eipecta to uae tbia proviaioa only in caaea
where PRPa are aaall firaa with few aaaeta.  Therefore, Regiona
ahould not aake requeata for Federal iadeaaification where PIPa
are large corporationa with aubatantial aaaeta or where the PRPa,
aa a group, have aubatantial aaaata.  Aa a reault, EPA doea not
aipect requeata for Federal iadeanifieatiea .to becoae an iategral
part of aettleaent negotiatioaa.

     EPA plena to provide additional guidance ia tha future
conoerning the deterainationa that need to be aade aa a
prerequiaite to indeanifyiag RACa workiag tor PRPa  (such aa
definiag "net aaaeta and resources" of tha PRPa, and whether  the
PRPa are "unable to provide adequate indeanification").  Until
EPA diatributea thia guidance, all auch deterainationa will be
aade by the Taak Porca.

     tPA indemnification-of a RAC werkiag for e pftp  ia a Maaure
of laat raaert.  If IPA doea provide iadeaaifieatioa  ia  theae
eaaea, tba ceaaaat decree  (or order) abould specify  teraa  aad
conditions, uaing tba model EPA indeanification agreement  for
lACa working for FtPa ebowti ia Attachment A.  If  BPA enter a iate
aa indeanification agreement with a RAC workiag for  a  PRP(a),  the
RAC Mats

o    Retaia financial reaponaibility for a  deductible  aaount  if
     commercial pollution  liability inaurance ia  unavailable  or
     uareaaoaably pricedt  »ad

o    Eihauat all adaiaiatrative,  judicial*  and  coamon'law claiaa
     for indemnification agalnat  all Firs participating ia the
     cleanup of the facility before «»A can pay a claia.

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                                12         OSWER Diractiva 9835.5


     For  tbfM RACa  recaiving indemnification from PRPa only («nd
where  EPA disms the  indemnification to be adequate), RACa should
be qualified1 to perform work adequately.  This can be enaured
through a combination of adequate competition in tha contract
procuranant  proceaa, and through a demonatration of financial
raaponaibility.  Tha PRP indemnification is aufficiant
demonatration of financial responsibility* therefore, performance
bonds, lattara of cradit, ate., aea not raqulrad.  Tba conaant
dacraa ahould apacify tha aforementioned as well aa tba
indemnification taraa and conditions.
         Oimad Traat»aat Worka
     Saction 119(c)(S)(D) apacifically prohibits EPA fro*
indemnifying an ownar or oparator of a facility ragulatad undar
tha Solid Naata Diapoaal Act.  Tharafora, publicly ownad
traataant works aubjact to parmit-by-rula provisions cannot ba
indamnifiad  (nor can any othar par»it«by-rula facility, such aa
an undarground injaction facility).  Tba intant of this provision
is to prohibit EPA frov offaring indaanif ication to off«aita
traatars or disposars of Suparfund baiardoua vasta.  Tbarafora,
whiia POTWs not subjaet to RCRA ragulation  (i.a., tOTVa without a
parait-by-rula) ara not axplicitly probibitad fro* IFA
indaanif ication authority undar faction lit, tha Agancy has
datarainad that an axtansion of indemnification authority to any
POTN would not ba consistant with Congraaaional intant in faction
119.  Tharafora, EPA will not provida indaanif ieation to POTNs
undar Saetion 119 authority.
     Thia BaBoranduSj daacribaa tha currant Padaral
inda»nification provisions for rasponsa action contractors
working in tha Suparfund prograa as provldad  in Saction 119 of
SARA.  Tha statuta givaa tba Padaral govarnmant tba discrationary
authority to indamnify RACa for liability •rising out of
nagliganca.  Acts of gross nagliganca sad willful aisconduct ara
aipraaaly ascladod'froai tha indaanity provision.  Tba Saction 119
indaanity prevision doas not praaapt tba rights of States to
anforca a stsadsrd of strict liability.

     Padaral indaanification is aaant to ba an intaria vahicla
wbicb will kaap tha Suparfund program operative until the
insurance industry returns to tbe market.  Xt is not intended to
create s Federally intrusive program that will interfere with
private sector efforts to develop 1AC liability insurance
coverage.

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                                11         OSWER Directive 9133.5


      If  a  BAC  has  received partial indemnification froa a PRP(s),
 EPA  may  altp pcevidt  indemnification in easts where the VHP
 indemnification  it  deemed insufficient, and in miied funding
 eases.   IPA  Bay  ptovidt  indtmnification abevt the PUP
 indemnification.  Tht consent decree should specify th« terms and
 conditions using tbs model EPA indemnificttion agreement shown in
 Attachment A.

      All requests for EPA indemnification of a RAC vocking foe a
 PRP(e) at  a  iuperfund site should be submitted to both the
 Indemnification Task Pores, c/o Director* Office of Waste
 Programs Enforcement  (OWPE), and to the Regional iuperfund
 Enforcement  Branch  Chief.  Please identify the Regional Site
 Coordinator  and  the Regional Counsel's Site Representative.
 Include pertinent information regarding the number of PRPs,
 financial profile of the PRPs, type of work to be performed,
 etc., such thst the Task Force ean make determinations per
 Section  119(c)(4) and Section 119(0(5).

      Open determining that a RAC meets all of the circumstances
 and  requirements set forth in Section 119 and in EPA interim
 guidelines,  the Task Pores will evaluate SB amount to which the
 PRP(s) is able to indemnify the RAC and an amount to which EPA
 will  indemnify the  RAC in eicess of the PRP indemnification
 amount.  Any EPA indemnification provided to a RAC(s) working for
 PRP(s) will  be subject to limits, deduetibles, and other
 limitations  as required  by Section 119(e)(S).  If the Task Porce
 recommends approval of the indemnification request, the Office of
 the Comptroller win provide concurrence (or non-concurrence)
within seven calendar days of receipt of the recommendation.
final approval for  EPA indemnification of a PRP RAC will be made
 by the Director of  OWPE.


RACS Working for mm Without B»A Indemnification

     Those RACs working  for PRPs at Superfund sites who do not
receive indemnification  from EVA may either receive no
indemnification at  all*  or may receive indemnification from PRPs
only.  For those RACs working with no indemnification, P»Ps
should demonstrate  that  the RAC ia qualified to perform the work
adequately,  has sufficient financial capability to complete the
projected work, and demonstrates financial rtaponaibility  for
potential third party liability coats.  This can be enaured
 through a combination of adequate competition in the  contract
procurement  proceaa and  a demonstration of financial
 responsibility.  Such a  demonstration can eoaaiat of. purchase of
 performance  bonds,  letters of credit, insurance, maintenance  of  a
 trust fund,  etc.  A consent decree should apecify the
 aforementioned.

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                                13          OSWIR Directive 9835.5
     Please direct *11 questions and couents to Robert Mason «t
PTS 382-4015 or To« Cillis at PTS 312-4524
Att«ch««nt«
A. Hod*l Ind««nificttion
•. CtRCLA (*• ••tnd«d) Section lit
ec:  AdBiniitrator
     Deputy AdBinistrator
     Central Counsel
     Regional Cranta Office, Regions I-X
     Regional Financial Management Office, Regions I-X
     Regional Superfund Branch Chiefs, Regions I-X

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          Attachment A





MODEL INDEMNIFICATION AGREEMENTS

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     Thic attj^ebitnt contains nodtl EPA indtanificttion
agrttutntc f of Q*« by EPA, Statts, and PRPs whtn RACa sttk
indrmnificatttfc fro> EPA.  Any dtviacioh fro* th« modtl
must b« approved by tht EPA Indtmnification Task Poret.  Pour
models art attached:

I.   Modtl EPA/RAC Indtanification Agrttatnt
II.  Modtl Statt Cooptrativt Agrttatnt Indtanification Special
     Condition
III. Modtl EPA/RAC Xndtanification Agrttatnt for RACa undtr
     Contract with PRPs
IV.  Modtl EPA/ SITES Program Technology Vtndor IndtanifIcation
     Agrttmtnt

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MODEL EPA/RAC INDEMNIFICATION AGREEMENT

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H.    Insurance — Liability to Third Prraons —
      Commercial Organization!
      (CPAAft 13S2".228-70)  (AM 1984) (with deviation)

      (a)  Thii Clause H             will be modified by tht
•utual agreement of tht partita hartto within 180 daya of tht
EPA'a promulgation of final guldelinea for carrying out the
proviaiona of Section 119 of the Comprehensive environmental
Response, Compensation, and Liability Ace of 1980, aa amended
(CeRCLA).

      (b)  Tha Contractor ahall procure and maintain aueh
insurance aa ia required by law or regulation, Including that
required by FAR Part 28, in effect aa of the date of execution of
thia  contract, and any such inaurance aa the Contracting officer
may,  from time to time, require with respect to performance of
thia  contract.

      (c)  At a minimum, the Contractor shall procure and maintain
the following types of insurance.

      (1)  workman's compensation and occupational disease
insurance in amounts to satisfy State law;

      (2)  employer's liability insurance in the minimum amount of
$100,000 per occurrence;

      (3)  Comprehensive general liability insurance for bodily
injury, death or loss of or damage to property of third persons
in the minimum amount of $1,000,000 per occurrence/

      (4)  When vessels are used in the performance  of the
contract, vessel collision liability and indemnity  liability
insurance 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 self-insurance program.
All insurance required pursuant to the provisions of this
paragraph shall ba in such fora and for aueb periods of time  as
the Contracting Officer may,.from time to time, require or
approve and vltb 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
insuranet.                                            .  '

      (•)  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  heroundar.  The

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Contractor1* submission chill include documentation demonstrating
its diligent efforts eo obtain pollution liability insurance.

      (f)  The Contractor shall be reimburaed, for the portion
allocabl* to this contract, tht rtaaonablt coat of insurance
(including reserves for self-insurance) as required or approved
pursuant to the provisions of this contract clause.

      (g)(l)  Pursuant to Section 119 of CCKCLA, the EPA will hold
harmless and indemnify the Contractor against any liability .
(including the eipenses of litigation or settlement) for
negligence arising out of the Contractor's performance under this
contract in carrying out response action activities.  Such
indennification 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 contract.  Further, any liability within the
deductible amounts of the Contractor's insurance will not be
covered under this contract clause B             .

      (2)  For purposes of this clause  (g), if the Contracting
Officer has determined that the insurance identified in paragraph
(d) is not 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 ••king payments directly to the Contractor or
directly to parties to whom the Contractor may be  liable.

      (1)  With prior written approval  of the 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 and duties and the same provisions for  notice,
furnishings of evidence or proof, and  tbo  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 the

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                                3

Contractor volch is covered by this contract clause, and shall
entitle the Government, at its election, to control, or assist in
tht settlement c*r dtftnst of. any such claim or action.  Th«
Government will indemnify th« Contractor with respect to his
obligation to subcontractors undtr such subcontract provisions.
The Government may discharge its obligations under this paragraph
by Making payments dirtetly to subcontractors or to parties to
whom the subcontractors may bt liablt.

     (j)  If insurance coverage required or approved by the
Contracting Officer is reduced without ehe Contrscting Officer's
approval, the liability of the Government under this contract
clause will not be increased by reason of such reduction.

     (k)  The Contractor shall:

     (1)  Promptly notify the Contracting Officer of any claim or
action against the Contractor or any subcontractor which
reasonably may be expected to  involve indemnification under  this
contract clause;

     (2)  Furnish evidence or  proof of  any  claim  covered by  this
contract clause in the manner  and form  required by  the
Government; and
     (3)  Immediately furnish the Government copies of
pertinent papers received by the Contractor.  The Government may
direct, control, or assist the settlement or defense of any such
claim or action.  The Contractor shall comply with ehe
Government's directions, and execute any authorisations required
in regard to such settlement or defense.

     (1)  Reimbursement for any liabilities under this contract
clause will not exceed appropriations available from CCRCLA's
Haxardous 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 judgments or
by settlement* approved in writing  by the Government.

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                II

MODEL STATE COOPERATIVE AGREEMENT
INDEMNIFICATION SPECIAL CONDITION

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Attachment
                                            i

      (1) Pursuant to Stction 119 of CERCLA, the EPA will hold
harmless and inSemnify the Contractor against any third party
liability (including the eipenses of litigation or settlement)
for negligence arising out of the Contractor's performance undtr
this contract in carrying out rtsponst action activitits.   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 contract.  Further, any liability within the
deductible amounts of the Contractor's insurance required by this
contract will not be covered by this clause.  This Clause will  be
modified by the mutual agreement of the parties hereto within 180
days of the CPA's promulgation of final guidelines for carrying
out the provisions of Section 119 (CERCLA).

     (A)  The Contractor shall submit to the State Contracting
          Officer within 30 days of award • written statement
          from an insurance broker stating that tbe Contractor
          has attempted to secure pollution liability coverage
          from insurance carriers in the past sii monthsi

     (8)  it the Contractor has secured pollution liability
          coverage,  it must submit a copy of the policy and
          declaration page to the State Contracting Officer; and

     (C)  Every twelve months, or as directed by tbe EPA, the
          Contractor shall submit to the State Contracting
          Officer 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, limit* of coverage, deductibles
               •ad major terms and conditions of coverage  (e.g.,
               • copy of tbe actual declaration page could be
               provided in lieu of • status report);

          e    If pollution liability coverage was offered by an
               underwriter, but not accepted by the ftAC/ a report
               on the insurance offered  (such as the "status
               report* required above), and a summary of tbe
               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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EPA
EPA win providff indemnification pursuant to Section 119 of
CCRCLA, as amended, to contractor* carrying out response action*
undtr this agreement providtd that the Statt certifies to EPA
that:

1.   The contract! awarded under thii agreement art defined in
     section 119(e) of CEKCLA, a« aaended;

2.   The contract* awarded under this agreement include the
     following clause that eiclusively governs EPA
     indemnification:

     (see attached clause)

3.   At the end of each calendar year and at the end of each
     project period, all statements and materials related to
     pollution liability insurance submitted by the Contractors
     to the State Contracting Officer will be transferred to EPA.

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           e    A  status  rtport on what alternative pollution
               liability risk transfer mechanisms tht contractor
               has  pursued  other than commercial pollution
               liability insurance  («.g., captives, letters of
               credit, group purchasing of insurance, etc.).

      (2)   Per purposes of this clause, the EPA will hold harmless
 and  indemnify the Contractor for liability described herein to
 the  eitent such liability eiceeds $100,000.00.

      (3)   The Contractor  shall not be reimbursed for liabilities
 as defined herein (including the eiponses 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 tbe 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 and duties and the same provisions
 for notice, furnishings  of  evidence or proof, and tbe 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 tbe purview of
 this contract clause shall  provide for prompt notification  to the
Contractor which is covered by this contract clause, and shall
entitle the IFA* at its  election, to control, or assist in  the
settlement or defense of  any such claim or action.  The IPA will
 indemnify the) contractor  with respect to hi* obligation to
 subcontractors onder 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)   Zf insurance coverage required or approved by the State
Contracting Officer is reduced without the State Contracting
Officer's approval, the  liability of tbe 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,
               OSWCR, EPA of any claim or action against the
               Contractor or. any subcontractor which reasonably
               nay be expected to involvt indemnification under
               this contract clause.

          o    Furnish evidence or proof of any claim covered by
               this contract clause in the manner and fora
               required by the EPA.

          o    Immediately furnish the EPA copies of all
               pertinent papers received by the Contractor.  The
               EPA nay direct, control, or assist the settlement
               or defense of any such claim or action.  The
               Contractor shall comply with the EPA's directions,
               and execute any authorisations required in regard
               to such settlement or defense.

          o    Submit any disagreements concerning EPA
               indemnification to the Assistant Administrator,
               OSHER, 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 trill not eiceed
appropriations available from CERCLA's Hazardous Substance
Superfund (eicept to the eitent that Congress may make
appropriations to specifically fund any deficiencies) at the time
puch 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 eipressly or by implication, any contractual relationship
between EPA and the Contractor except as specifically provided  in
this clause.  SPA it not authorised to represent or act on  behalf
of the State la any manner relating to this contract and has no
respoaaibility with regard to the mutual obligations of the State
and the Contractor as provided herein.

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                  zxx
MODEL CPA/RAC INDEMNIFICATION AGREEMENT
   FOR RACS UNDER CONTRACT WITH PRPS

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                 MODEL CLAUSES FOR PRP CONTRACTS
S«c. __^_____  Pollution Liability Xnauranca and Contractor
               Indemnification

A. Pollution Liability Inauranca

     (1) Tha Contractor ahall obtain such pollution liability
iniuranca (hcrainaftar inauranca) aa tha EPA datarainaa la
availabla at a fair and raaaonabl* prie* at th« tia« of contract
award.   Tha cost of such inauranca ia an allowable contract coat.

     (2) Tha Contractor ahall raport to EPA on ita cfforta to
obtain  pollution liability inauranca.

     (A)  Within 30 daya of aigning thia agracaant, tha
          Contractor ahall aubmit to tha EPA a vrittan atataaant
          froB an inauranca brokar atating that tha Contractor
          haa attaaptad to aacura pollution liability covorag*
          fron inauranca carriara in tha paat aii aontha»

     (B)  Zf tha Contractor haa aacurad pollution liability
          covaraga, it auat aubait a copy of tha policy and
          daclaration paga to EPA; and

     (C)  Evtry twalva aontha, or at diracead by tba EPA, tha
          Contractor .shall aubmit to tha EPA writtan
          docuaantation of tha additional afforta aada by tha
          contractor to aacura pollution liability inauranca
          covaraga including:

          o    Copiaa of applicationa to thraa known undarwritara
               of pollution liability inauranca;

          o    A atatua raport of any pollution liability
               inauranca obtainad, to includa typa of covaraga,
               praaiua chargad, liaita of covataga, daductiblaa
               and aajor taraa and conditiona of covaraga  (a.g.,
               a copy of tba actual daclaration paga could ba
               provided in liau of a atatua raport)t

          o    Zf pollution liability covaraga vas offarad by an
               undarvritar, but not aceaptad by tba 11 AC,  a raport
               on tha iaauranca offarad  (auch aa tha "atatua
               raport* raquirad abova), and a auaaary ot  tba
               raaaona why auch covaraga waa not aceaptad}

          o    Zf pollution liability covaraga vaa  rajactad by
               tha undarvritar, a auaaary  of tha raaaona  why  auch
               covaraga vaa daniad; and

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           o    A atatua  raport  on  what' altarnativa pollution
                lability riak  tranafar  aachaniaaa tha  contractor
                traa  purauad  othar than  coaaarcial pollution
                liability inauranca (a.g.,  captivaa, lattara of
                cradit, group purchaaing of  inauranca,  ate.).

      (3)  If,  during tha  pariod  of  thia  contract, EPA datarainaa
 that  inauranea  or additional inauranca  ia  availabla, tha
 contractor  ahall obtain  auch inauranca.


 B.  PRP  Indemnification

      (Tha  following ara  minimum clauaaa.   PRPa aay includa
      additional,  non-conflicting tarma.)

      (1) Tha  PRPa will hold haralaaa and indaanify tha Contractor
 againat  any third party  liability  (including  tba aipanaa of
 litigation  or aattlaaant) for nagliganca ariaing out of tha
 Contractor'a  parforaanca  of thia contract  in  carrying  out
 raaponaa action  activitiaa.  Such  indaanification ahall apply
 only  to  liability which  raaulta froa a  ralaaaa of a haxardoua
 aubatanca,  pollutant, or  contaminant if aucb  ralaaaa ariaaa out
 of tha raaponaa  action activitiaa  in thia  contract.
 Indaanification  undar thia  paragraph will  apply only to liability
 not coapanaatad  by  inauranca, net  within tha  daductibla aaounta
 of tha Contractor'a  inauranca in paragraph  A, abova, nor within
 tha daductibla in paragraph D,  balow.   Indaanification providad
 undar thia paragraph ahall  not  aicaad  $	 (aaount
 datarainad  by EPA).         •                     '

      (2) Any  liability tubjtct  to  indaanification ahall ba
 praaantad firat  undar thia  paragraph.

      (3) Tha  PRPa ara individually and  collactivaly raaponaibla
 for tha indaanification  undar tbia paragraph, unlaaa otharwiaa
 apacifically providad within.

      (4) If tha  PRPa fail to aatiafy tha indaanification claim
within €0 oay« of its praaantation, tha Contractor will notify
 tha IPA of  such  failura.
C.  EPA Indaanification


     (1) Purauant to Saction  119  of  tha  Coaprahanaiva
tnvironaantal Raaponaa, Coapanaation,  and  Liability  Aot  of  1910,
aa aaandad  (CERCLA), tha EPA  will  hold haralaaa  and  indaanify  tha
Contractor againat any third  party liability  (including  tha
aipanaaa of litigation or aattlaaant)  for  nagliganca ariaing out
of tha Contractor'a parforaanca undar  thia contract  in carrying

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 out  reaponse action activitiee.   Such  indemnification ahall apply
 only to  liability  net  compensated by insurance, indemnification
 provided in accordance with .paragraph  9, above, or otherwiae and
 shall apply only to liability which rtaulta fro* a releaae of any
 hazardous aubatance or pollutant  or contaminant if auch raltaat
 arista out of  the  reaponae action activities of thia contract.
 further,  any liability within the deductible aaounts of the
 Contractor's insurance in paragraph A, above, or the deductible
 in paragraph D, below, will not be covered by this paragraph.

      (2)  Thia  paragraph will be Modified by the mutual agreeiaent
 of the parties hereto within 180  daya  of the EPA'a promulgation
 of final  guidelines for carrying  out the provisions of
 Section  119 of CBRCLA.

      (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
paragraph by making payments directly  to the Contractor or
directly to parties to whom the Contractor may be liable.

      (S)  with prior written approval  of the EPA, the Contractor
nay  include in any subcontract under this contract the same
provisions in  this clause whereby the  Contractor shall indemnify
 the  subcontractor.  Such • subcontract shall provide the same
 rights and duties  and the same provisions for notice, furnishings
of •<- dence or proof, and the like, between the Contractor and
the   ^contractor  as are established by this paragraph.  Similar
inde isification may be provided for subcontractors at any  time
upon  ine 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 EFA, at 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  may discharge  its obligations
 under this paragraph by making payments directly to
 subcontractors or  to parties to whom 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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 under  thia paragraph will not b« increaaed by reeaon of such
 reduction.

      (7)  Tht Contractor ihall:

          o    Promptly notify tha Aaaiatant Adminiatrator,
               OSWER, EPA of any claim or action againat tht
               Contractor or any aubcontractor which raaaonably
               •ay b« tipacttd to involve indemnification under
               thia paragraph.

          o    Purniah evidence or proof of any claim covered by
               thia paragraph in the Banner and fora required by
               the EPA.

          o    Immediately furniah the EPA copiea of all
               pertinent papera received by the Contractor.  The
               EPA may direct, control, or aaaiat the aettlement
               or defenae of any aueh claim or action.  The
               Contractor ahall comply with tha CPA'a directiona,
               and eiecute any authorixationa required in regard
               to auch aettlemant or defenae.

          o    Submit any diaagreementa concerning EPA
               indemnification to tha Aaaiatant Adminiatrator,
               OSWER, EPA for reaolution.  Deciaion by the
               Aaaiatant Adminiatrator will conatitute final
               Agency action.

     (8) The Contractor may preaent a claim for indemnification
under thia paragraph only after compliance with the proviaiona in
paragrapha B, above, and C, balow.

     (9) Zf tha PRP* fail to indemnify the Contractor in the
amount provided in paragraph B, above, no indemnification for
that amount will be paid under thia paragraph until the
Contractor demonatratea to BPA'a aatiafaction that it haa
exhauated all adminiatrative and judicial claim* for
indemnification under paragraph B, abova, and any common law
claim* for indemnification that it ha* againat the PRPa.
Evidence of asbauation of claima may include a judicial order
diamiaaing tbt Contractor'* claim*, documentation of tha
Contractor'* unauccaaeful effort* to enforce a judgement againat
the PRP*, or documentation of tha Contractor'* unaucceaaful
claim* in a bankruptcy proceeding involving the PRP*.

     (10) Reimbursement for any liabilities under thia paragraph
will not ciceed appropriation* available from CERCLA'a Baxardoua
Subatance Supcrfund  (aicept to the eitant that Congreaa may  make
appropriation* to apecifically fund any daficienciea)  at the time
auch liabilitiea are represented by final judgement  or  by
aettlementa approved in writing by the EPA.

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     (11) Nothing in this contract shall bt construed to create,
•ithtr expressl? or by implication, any contractual relationship
between EPA and tht Contractor except as specifically provided in
this section.  EPA is not authorized to represent or act on
behalf of the (PRPs) in any Banner 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 before
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 tht Recipient against any liability
 (including tht eipenaes of litigation or settlement) foe
negligence arising out of the Recipient's performance undar this
cooparativa agreement in carrying out rasponsa action activities
through tha Suparfund Innovative Technology tvaluation 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 reaults fro* a release of any
hazardous  substance or pollutant or contaminant if such releaae
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.  Xf the recipient has secured pollution liability
coverage,  it must submit a copy of the policy and tha 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    Zf pollution liability coverage was rejected by
               the underwriter, a summary of the reasons why such
               coverage w.aa denied) and

     (3)  Per purposes of this clause, the Government will hold
harmless aad indemnify the Recipient for liability to the eitent
auch liability eiceeda $100,000.00.

     (4)  The Recipient shall not be reimbursed for liabilities
as defined herein (including the tipenses of litigation «r
settlement) that  were cauaed 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 ahall not be  indemnified  for
liability arising under strict tort liability, or  any other  baaia
of liability other than negligence.

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      (5)   The Government nay discharge itf liability under this
 cooperative  agreement clause by making payments directly to the
 Recipient or directly to partite to whoa the Rtcipient may be
 liable.

      «)  With prior written approval of the Contracting Officer,
 the  Recipient nay  include in any subcontract under thie
 cooperative  agreement the aame provisions in thia clauae whereby
 the  Recipient ahall indemnify th« aubcontractoe.  Such a
 aubcontract  ahall  provide the same rights and duties and the same
 provisions for notice between the Recipient and the subcontractor
 aa are establiahed by this clauae.  Similar indemnification >ay
 be provided  for aubcontractors at any time upon the same terms
 and  conditions.  Subcontracts providing for indemnification
 within tht purview of this cooperative agreement clause shall
 provide for  prompt notification to the Recipient which ia covered
 by this cooperative agreement clauae, and shall entitle the
 Government,  at its election, to control, or assist in the
 settlement or defense of any auch claim or action.  The
 Government will indemnify the Recipient with respect to his
 obligation to subcontractors under such subcontract provisions.
 The Government may discharge its obligations under this paragraph
 by making payments directly to subcontractors or to parties to
 whom the subcontractora may be liable.

     (7)  if insurance coverage required or approved by the
 Contracting  Officer is reduced without the Contracting Offleer*a
 approval, the liability of the Government under this cooperative
 agreement clause will not be increased by reason of such
 reduction.

     (8)  The Recipient shall:

     (a)  Promptly notify the Assistant Administrator, OSWER, EPA
 of any claim or action against the Recipient or any subcontractor
which reasonably may be eipected to involve indemnification under
 this cooperative agreement clause;

     (b)  Furnish evidence or proof of any claim covered by thia
 cooperative  agreement clause in the manner and form required  by
 the Governmenti

     (c)  Immediately furnish the Government copies of all
 pertinent papers received by the Recipient.  The Government mey
 direct, control, or assist the settlement or defense of any auch
 claim or action.   The Recipient shall comply with  the
 Government's directions, and eiecute any. authorizations required
 in regard to such  settlement or defensei »nd

     (d) Submit any disagreements concerning EPA  indemnification
 to the Assistant Administrator, OSWIR,  EPA for  resolution.

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Decision by tie Assistant Administrator will constitute final
Agency action.
               •»

     (9)  Reimbursement for any liabilities undtr this
cooperative agreement clause will not eiceed appropriation*
availablt from CERCLA's Hazardous Subatanet Supcrfund  (cietpt to
the aittnt that Conqrtaa may aakt appropriations to specifically
fund any d«ficitncits) at tht ti«« such liabilitits arc
represented by final judgement or by settlements approved in
writing by the Government.

     (10)  This Clause will be modified by the mutual  agreement
of the parties hereto within 180 days of the BFA'a promulgation
of final guidelines for carrying out the provisions of Section
119 of the Comprehensive Environmental Response* Compensation,
and Liability Act of 1980, as amended (CERCLA).

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                                                   OSWER ft 9832.12
         ] UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
         /               WASHINGTON. DC 20460

                               SEP 2 2 IS87
                                                         COu'uAMrt MOM 10-A;

 MEMORANDUM

 SUBJECT:   Guidance  on  Federal Superfund Liens

 FROM:      Thomas  L. Adams, /r.    _M
           Assistant Administrator^^^"**1   **•

 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 n«w  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.

 1.  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  c \ 4n favor of the United
States upon all real property and rights  to such property which
 (1) 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 PRP 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  the 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. S11580 (Statement of Sen. Stafford) (September 17, 1985).
 See also  House  Energy and Commerce  Report  on H.R.  2817, p. 140,
 indicating  that one of Congress1  primary purposes  in enactin;
 the lien  provision was to prevent unjust enrichment.

     B.   Duration  and Effect of  Lve-.

     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)  the time that
 the person  is provided (by certified or registered mail) written
 notice of potential liability."   (Emphasis added)  (S107(1)(2)).
 EPA nay send  out two different types of notice letters to PKPs.
 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 chat it dees give the PRP
notice of potential liability for cleanup of coses, and is fbrr
warded by certified or registered mail.

     It is  EPA'$ position chat the  lien provision applies co costs
 incurred prior  to  and after  passage of SARA.  The  lien also applies
 to all future costs Incurred at  the site.  The lien continues
 "until the  liability for the costs  (or a Judgment against the
person arising  out of such liability)  is satisfied or becomes
unenforceable through operation  of  the statute of  limitations
provided in section 113." ($107(1)(2))

     C.  Priority  of Federal Lien In Relation to Other Property
         Liens

     The federal lien is "subject to the rights of any purchaser,
holder of a security interest, .or judgment lien creditor whose
 interest is perfected under  applicable State law before notice of

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                                -  3  -
 the federal  lien has  been  filed  [by  EPA]."   (S107(l)(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  [S.  51]  which provided for
 constructive notice of  an  EPAj. 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 reasonably
 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, ccntain "superlien" provisions which provide that
 any expenditures  made pursuant to  the statute constitute a first
priority l:en upon the real  property of  a hazardous waste dis-
 charger.   Several other States provide  that  expenditures from the
hazardous  waste  fund will  constitute «  lien  in favor of the State,
although not a first-priority lien.

11.  POLICY  ON FILING FEDERAL LIENS IN  COST-RECOVERY ACTIONS

     EPA hat 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 vi:l 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.  See United
States v. Maryland Bank and Trust Co.. 632 F. Suy,:. 373 (D. Md.
1986).  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 that
filing notice  of the lien is not subject  to pre-enforcement review
of the liability of  the landowner for  the response costs.±J

III.  PROCEDURES FOR FILING LIENS

     Notice of the federal-  lien should be filed at the tine that
the owner Is provided notice of potential liability.  By this  time,
the lien will  have arisen since EPA will  have incurred costs,
I/   Courts have rejected .claims  that owners are entitled  to notice
""    and hearing prior to filing  of the  lien.   In  Soielman Fond.
Inc. v. Hanson's Inc.. 379 F..Supp. 997  (D. Ariz.)  (3 judge court).
"summarily aff'd. 417 U.S. 901  (1974), the  court held that  filing  of
a mechanic's lien did not 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
B & P Development 'v. Walker. 420  F. Supp.  70<*  (W.D. Pa.  T7/6).

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 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, Sy-312(5)(a).   Unlike some State~Superfund
 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.                       r

      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 the statute does not require specification
 of costs, the notice should clarify  that, where response work is
ongoing,  the amount of the lien will increase as the costs incurred
 increase.  The property description  to be included in the notice of
 the lien should be the legal description (i.e.. 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 to sign the notice of filed lien.
The Regional Administrator may redelegace this authority ac his/her
 discretion.

      B.  Where to File

     To establish its priority among other secured parties and
 creditors, EPA must file notice of the lien "in the 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."   ($107(1)(3))

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                               -  6  -
      Where  che  Scace  has  designated  an  office,  such as a County
 recording office,  che 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 to  che 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 che real
 property is located and in  C*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 *£.uJERING COSTS  CONSTITUTING THE LIEN

     Under  Section 107(1)(4), "[tjhe costs  constituting the lien
 may be  recovered in an action in rem in che Uniced States district
 court  for the district in which"~the  removal or  remedial accion is
 occurring or has occurred."  An  in rem  accion  is an accion against
 che propercy of  che PRP.  In. order co institute a proceeding ir± re~,
 che property muse  "be actually or  conscruccively within che reach
 of che  court."  36  Am. Jur.  2d Forfeitures and  Penalties S2tt (1966;.
 By contrast, che cypical  cose recovery  accion  is an in personam
 accion  against  che PRP.

     lr± rem actions should  be considered  where  che licigacion team
 believes chat an accion Co  recover coses  covered by che lien will
 enhance its  efforts co recover all coses  incurred in  a response
 accion.  Such actions will  be particularly  useful where che pro-
 percy constitutes  a significant  assec of  the PRP, and where che
 government  is having  difficulty  reaching  an expeditious cose
 recovery settlement.  The In rem action,  which  will seek an order
 directing sale of  the property,^/  should  generally be combined with
 an in personan action tor costs?  Before  bringing an  in rem action.
 the regional office should  consider  the amount  of the claim, the
2/  An iii rem action nay  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
estace."  (Emphasis added)  11  U.S.C. S362(«)(4).   The aucomaeic
scay also prohibits perfection of  a  lien,  through  filing notice
of che lien, against a  bankruptcy  debtor.

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                              - 7 -
conaicion of the sice after the response action and the likely
marketability of the site.  Note that an Ln rem action will require
the same elements of proof as any cost recovery action.

     Section 107(1)(4) further states that "[n]othing in this
subsection shall affect the right of the United States to bring an
action against any person to recover all coses and damages for
which such person is liable under subsection (a) of this section."
Thus, where the government seeks 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/
                           f                          ""
DISCLAIMER

     This memorandum 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
ruleaaking by the Agency and may not be relied upon to create a
right or a benefit, substantive o- -rocedural, enforceable at lav
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 LIEN

     NOTICE IS HEREBY GIVEN by the United States of Atnerica chat it holds a lien on
the  lands and premises described below situated in Che State of Washington.
as provided by Section 107(f) or the Superfund Aiundaents and Reauthoritation
Ace  of 1V&6 (SArtA), Public Law No. 99-<»99, amending che Comprehensive Environmental
Response, Condensation, and Liability Act of 19dO (CEXCU), 42 U.S.C. 19601 et
'-f V~"N   ^.'       *, i
DateoVic Senile.>W»«hV)gton,  chis2V day of
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      ^•^"•to^'"'
                                             /' .         •
                                                      '
                                      UNITED STATES OF AMERICA
                                      UNITED StAl^
                                      PROTECTION ACENCSf
Ihiced
                                                       / •        '*'         •

                                   £: ^  '*4« U. ^Kf* '. / ^ Wf
Scate of Uashingcon     )••       .//v^Jaaes &. fbore
County of King          )         T'  Regional Counsel
                                  '    il.S. Of . R-gion 10
                         of    4 Asu Aft*'  . 19Jr ^.  thert «pp«ar«d ptraonally
               undersigned Notary. Janes R. hbore, Known co w Co be Che Regional
                  ced States Environmental Protection Agency. Region 10. and he
                  he signed che foregoing NOTIU: OF FkDtVAL UQ4 in a representative
                free and voluntary act and deed of che united States and its *aid
           ftfe.u*es and purposes  therein nencionad.  GIVEN under By hand and otficial
                 y«ar first stated above.
                                      .
                         I  I         NcnAKi fua.ic>
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                                                           / O J 0 • I
                        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   V
          General Counsel (LE-130)

TO:       J. Winston Porter
          Assistant Administrator
            for Solid Waste and Emergency Response  (WH-562A)


     One critical and recurring Issue arising 1n  the  context  of
Superfund response activities has been the scope  of the  petroleum
exclusion under CERCLA.   Specifically, you have asked whether used
oil which 1s contaminated by hazardous substances 1s  considered
"petroleum" under CERCLA and thus excluded 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 1n such fractions.  If these contaminants are
CERCLA hazardous substances, they are subject to  CERCLA  response
authority and 1 lability.

                          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  danages
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. I/  Accordingly,
   no  petroleum substance, including used oil, can b¥ a "hazardous
   substance" except to the extent 1t 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, 1s 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 may trigger CERCLA response
   actions, not to the release  of used oil, but to the contaminants
   present  in the oil.
_!/   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 term 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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                                                        9835.'•
                            - 3 -
     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  1n 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 1n 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). £/

     In 1982 and 1n 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 Us hazardous substance constituents,  such
as benzene and toulene, but PCB's mixed with oil would not  be
excluded.  Moreover, 1f the petroleum product and an added
hazardous*substance are so commingled that, as a practical  matter,
they cannot be separated, then the entire oil 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 term "waste oil"
     without stating whether It was Intended to Include all
waste oil or only unadulterated waste oil.  The Agency has
subsequently interpreted the reference to  "waste oil" 1n this
notice to include only unadulterated waste oil.  50 Fj&d.
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 Us octane levels.  Because virtually  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 Reg1 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)0

     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 It  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 1s 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
                          Discussion
     Because there is no .def 1 nition of "petroleum" 1n 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, 1s 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 in 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 oil and fractions of crude  oil.  Including the
hazardous substances, such as benzene, which are Indigenous in
those petroleum substances.  Because these  hazardous substances
are found naturally 1n all crude oil and Us fractions, they must
be Included 1n the term "petroleum," for that provision to have
any meaning.

     Secondly, "petroleum" under CERCLA also Includes hazardous
substances which are normally nixed with or added to crude oil
or crude 611 fractions during the refining  process.  This includes
hazardous substances the levels of which are Increased during
refining.  These substances are also part of "petroleum" since
their addition 1s part of the normal oil separation and processing
operations it 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 CERCLA under the

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                                                          9838.1
                             -  6  -


 exclusion.  3/   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 1s most consistent with
 Congressional  intent.   The  language of the  provision, Its
 explanation in  the  legislative history, 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.

     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."  4_/  There  1s no Indication 1n the
 statute  or  legislative  history t"hat the term "petroleum" was to
 be given  any meaning  other  than  Its ordinary, everyday meaning.
 See Halat  v. Rlddell. 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
3y   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 would thus also be an
excluded substance.

£/   See H.R.  85, 96th  Cong., 2d Sess. §101(s)  (as passsed by
     the House,  September 1980) (""011" means petroleum,
including crude  oil  or  any fraction or residue  therefrom").
H.R. 85 was designed principally to provide compensation and
assess Il'ab1l1ty for oil tinker spills 1n  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 1n 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


          «n oily flammable bituminous liquid that
          •ay vary from almost colorless to black,
          occurs 1n many places 1n the upper strata
          of the earth, 1s a complex mixture of
          'hydrocarbons with small  amounts of other
          substances, and 1s 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. _S/

     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, 1$ excluded from the  defini-
          tion of a hazardous substance.  The reported
          bill  does not cover spills or other releases
          strictly of oil.

S. tiep. No.  96-848, 96th Cong.,'2d Sess. 29-30 (1980)  (empHasls
added).  Thus, the petroleum exclusion 1s explained  as  an
exclusion from CERCLA for spills or 'releases only  of ojl.
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
it prior to, during or after use was also made by Congress  in
Title II, tht revenue provisions or CERCLA.  In Title II.
Congress made a distinction between 'chemicals", petrochemical
feedstocks and Inorganic substances, taxed 1n Subchapter B  of
Chapttr 38 of Inttrnal Revenue Code, and 'petroleum', crude
oil and petroleum products, taxed 1n Subchapter A.  Section
211 of CERCLA.  The 11st of taxed chemicals Includes many of
the contaminant hazardous substances typically found 1n used
oil:  arsenic, cadmium, chromium, lead oxide, and mercury.
The tern  'petroleum products' was explained 1n the legislative
history as Including essentially crude oil and Us 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
                             •  0  •


 exclusion  «111  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) (daily  ed.  December 7T~1?EO); 1d. at H11790
 (Rep.  Broyhlll); J_d. at H11792 (Rep.  Madlgan); J_d.~at H11793
 (Rep.  Studds); id.  at  H11795  (Rep. Blaggl); ^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  $1480 by Sen. Magnuson)  (dally ed..
 August  1,  1980); id. at S10845 (proposed amendment to S1480 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  o.f oil. and hazardous  substances
 The  remarks  of  Rep. M1kulsk1 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 oil title.
         '  I  realize that  It  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 Is 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.
          .1,  therefore, believe  that 1t 1s Imperative that  we
     pass  the  Senate bill 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.  Edgar  ...
           In  my  State,  hazardous  substances problems have been
      discovered  at  an alarming  rate  1n  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  Water 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  1n  a 10-square -
      mi 1e surface.

 j_d.  at  H11798.   See also  126 Cong.  Rec. S14963 (dally 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),  dloxTn  In motor fuel  used as a dust
 suppressant, j_d.   at  S14974  (Sen. Mitchell),  PCB's  1n waste
 oil,  1d.  (Sen.  Mitchell)  6/  and contaminated  waste  oil, J_d.
 at Sl7?80 (Sen.  Cohen).  Accordingly,  Congress understood
 the  petroleum exclusion  to  remove from  CERCLA jurisdiction
 s.pllls  only  of  oil, not  releases  of  hazardous substances
 mi xed with the  oil.

      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  1n  previous  opinions  on  this issue,
 an Interpretation  which  emasculates  a  provision  of  a statute
 1s strongly  disfavored.   Harsano  v.  Laird. 412 F.2d 65, 70
 (2d  C1r.  1969).  However,  this  Interpretation leaves a
•significant  number  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-contaminated waste  oil  along  a  roadway,
 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. DecembeT~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 defTnltlon, see e.g.. RCRA Section
 1005  (36),  the Impurities added by use may notbe CERCLA
 hazardous substances.

      A second  argument which  has been made opposing this
 Interpretation 1s  that Congress Intended to Include 1n the
 term  "petroleum" all hazardous substances added through
 normal use  of  the  petroleum substance.  However, even 1f 1t
 were  possible  to determine  1n 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 1s  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"!   Rel eases 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
 petroleum-hazardous substance mixtures most often mentioned
 during the  debates was that of PCB contaminated oil,  which
 1s a  type of contamination  arguably resulting fro*-the "normal
 use'  of tha  oil In transformers.  Accordingly, an Interpretation
 of the petroleum exclusion  which Includes as "petroleum"
 hazardous substances added  during use of the petroleum would
 not be consistent  with Congressional Intent.
]_/   Data submitted to EPA by the Utility Solid Haste
     Activities Group et al.  1n Appendix C of their comments
on the RCRA Used 011 iTstTTfg, February 11, 1986.

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                                                   9838.1
     Finally, although the Superfund Amendments and ReauthoMzatlon
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" 1n 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 contamination'with 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 it merely specifies that the leaking under-
ground storage tank  (LIST) response fund 1s applicable to tanks
containing certain mixtures of oil and hazardous substances,
as well as to tanks containing uncontamlnated 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 entTrely 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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               UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

x   ^                        MAY 2 7  1983
 
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                                              OSWER Directive 09834.9a
II.

     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 122(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 122(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 any 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 #9834.9a
     A question arose on the precise meaning of "any other
person" under section 111(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 lll(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 nixed
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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                                                   OSWER  #  9635.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) in the develop-
ment of  remedial investigations  (RI) and feasibility studies  (FS) under
the Comprehensive Environmental Response, Compensation, and Liability
Act  (CERCLA), as amended by the Superfund Amendments and Reauthorizatior.
Act  (SARA) of 1936.   This memorandum discusses:

     o    The initiation of enforcement activities including PRP search-
          es and PRP  notifications

     o    The circur.stances in which PRPs may conduct 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    PP.P participation in Agency-financed RI/FS activities.

     More detailed information regarding each of  the above topics is
included ir. Attachments 1-4 of this appendix.

     This document is consistent with CERCLA and  EPA guidance in effect *
as of October 19B8, 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 cf  Remedial Investigations and Feasibility Studies Under CERCLA"
(OSWER Directive No.  9635.1).  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/TS  activities.  Additional guidance regarding proce-
dures for EPA oversight activities will be available in the Office of
waste Program Enforcement's (OWPE) 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-OSWEP  Directive  No.  9355.3-01)  (Referred to herein as the
 RI/FS Guidance).
                                    A-l

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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 determines  (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 win
 continue  its policy  of early and  timely PRP searches as well as early
 PRP notification and negotiation  for RZ/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 more likely to agree on
 imp 1 erne r. tat ion 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  (NEAR), 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.rv 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  VKP  (or group of PRPs) may assume
full responsibility  for undertaking RZ/FS activities pursuant to
Sections 104/122 of  CERCLA.  The  tens and conditions governing the
RI/FS activities should be specified in an Administrative Order.  The
use of Administrative Orders is authorised in CERCLA Section 122(d)(3);
they ar« the preferred type of agreement for RZ/FS activities since  they
are authorised internally and therefore, may be negotiated more quickly
 The legal authority  to  enter into agreements with PRPs is found in CEPCLA
 Section 122(a).  This section then 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.
                                    A-2

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 than Consent Decrees.   Before  SARA,  Administrative Orders were signed
 using  the  Authorities  of  Section  106 of  CERCLA.  New provisions in SAfiA
 allow  for  Orders  to be signed  using  the  Authorities of  Sections 104/122;
 Section  104/122 Orders do not  require EPA  to  make a finding of imminent
 and substantial endangerment.

     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 Rl/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 la)(1) of  CEPCLA mandates
 that no  PRP be allowed to undertake  an Rl/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
 Rl/FS and, that the PRPs  agree to reimburse EPA for the costs associated
with the oversight contract or arrangement.
     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,  1967 - OSWER Direc-
tive No. 9634.6).

     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
us* et the general notice letter, Section 122(e)  of  CERCLA now authorizes
EPA to us* "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 RI/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/FS.  Minor deficien-
cies in the PRPs1 initial submittals  should not be grounds for  a
                                    A-3

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 determination that the offer is not a good faith offer or that the  PRJ>S
 art 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 HI) 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 State- Trustee and provide an opportunity for the Trustee to partici-
 pate ia th« negotiations.  To simplify the notification of Federal
 Trustees, the Agency intends to provide a list of project* in the Super-
 fund Comprehensive Accomplishments Plan  (SCAP) to the Trustees as notice
 to participate in the negotiations.   In those cases where  there is reascn
 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 orqanization 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.erai circumstances.
     ErA's priority  is to  address  those N?L  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 :.
The scope and  terns  for conducting the studies are .embodied in an Agree-
ment; as mentioned in Section II,  Administrative Orders are the preferred
type of Agreement fcr F.I/FS  activities;

     £?/*. will  not engage 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 site.

     The actions described below are typically taken to initiate  RI/FS
activities:

     o    EPA  develops a site-specific 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) at the  initiation of negotiations.   (PRP8 may,
          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.)

     c    Final provisions of the SOW are negotiated with the Order.

     o    EPA determines whether  the PRPs possess the necessary capabili-
          ties to conduct an RI/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 the PRPs.   (Community relations
          activities are discussed in Attachment II.)

     c    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 Plan 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 Work Plan,  which in most instances is one of  the
          first deliverabies under the Order, is commonly incorporated
          into the Agreement -following EPA approval.

     o    PRPs are responsible for obtaining  access  to the site; however,
          if access cannot be obtained, EPA,  with the assistance of DCJ,
          will secure access subject to PRP reimbursement for the costs
          incurred in securing such access.

     These standardized actions ensure that the scope of the RI/FS  activ-
ities to be conducted by the PRPs, sad the procedures by which the  RI/FS
is performed, are consistent with EPA  policy  and guidance.  Additional
actions My be required either for s technically complex site  or for a
site vhere 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 II.
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 RI/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 will
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 ccr.-
tained in an Administrative Order, or where the site is in  litigation,
in a Judicial Consent Decree entered  into  pursuant to Section 122(d)  cl
CERCLA.  Guidance for the development of an Administrative  Order is pro-
vided in OWPE's document "Administrative Order:  Workshop and Guidance
Katerials" (September 1964), 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,  ard other signatories to the Agreement.

     o    Jurisdiction - Describes EPA'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 and 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    Hotice to the State - Verifies  that the  State has been notified
          of pending site activities.

     o    Pork to be performed - Provides  that  PRPs submit  project plans
          to the lead-agency for review and approval before commencing
          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  RJ/TSj  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
                                    A-7

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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 requirenents
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 the 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 steps to be taken if a dispute
occurs.  The Administrative Order states that with respect to
all submittals and work performed, 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 ax.d
EPA takeover of the RI/FS.  (More information on stipulated
penalties can be found in the Office of Enforcement and Com-
pliance Monitoring's  (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 stay 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
CXKCLA.  This section should also specify the conditions for
indemnification of the U.S. Government.
                      \
Subsequent modifications/additional work - Specifies that the
PRPs are committed 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 XV contains additional  information on this
clause.)

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 VI.  STATEMENT OF WORK AND WORX 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

     Tc er.sure that the RI/FS conforms to the NCP ar.d the requirements
of CERCLA, including Sections 104(a)(1) and  121, EPA will review and
oversee PRF 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    Meetingsj 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/FS 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  costs,   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:
 (21 demand for corrective measures;  (3)  use of  dispute  resolution mecha-
 nisms, where  appropriate;  (4)  imposition of penalties;  and if necessary,
 (5) FRF  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 and satisfactorily .resolving differences between  the Agency and
private parties.

     Secticr. 113!k)(2) (B) requires that  interested persons,  including
?R?s, be provided an  opportunity for participation in the development cf
the administrative  record.   PRP participation  may include the submittal
cf ir.forr.ation,  relevant to  the selection  of remedy,  for inclusion in
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 the site to observe  sampling and  analysis activities;

     o    Access to validated data and draft reports.

     With respect to  PRP access to a sits, it  is within  the  Regions'
discretion  to impose  conditions baned on safety  and other relevant
considerations.  To th« extent  that the  Region determines that access  is
appropriate under the circumstances, PRPs  must reimburse EPA for  all
identifiable costs  incurred  with the 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  sane
                                   n-11

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information that is provided to the PRPs.  TJie Regions must therefore
taXe this into consideration when determining the extent of the PRP'S
involvtment in a Fund-financed RI/FS.

     Acid* 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 delays occur.
X.  CONTACT

     For further information on the  subject matter discussed  in this
interim guidance, please ccr.tact Susan Canoe  (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-specifi: Statement of Wcrk  (SOW) as the basis for conducting an
 RI/FS.  PRPs  are required to submit an  RI/FS Work Plan setting fcrth
 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 cuidance 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 posses?  the managerial expertise and have developed a management
plar. 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 may 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 business, 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

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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

     PSPs must demonstrate that they have 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,
ir.formatior. 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/TS as well as  the costs  for
oversight, plus a margin for unexpected expenses.  If, during the  con-
duct of the RI/FS the net worth of  the financial mechanism providing
funding for the RI/FS is reduced to less than that required to complete
the remaining activities, the PRPs  should  immediately notify EPA.   Under
conditions specified in the Order,  PRPs 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 proj-
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 PRPs1 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.
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                               ATTACHMENT  II

                    INITIATION  OF  PRP  RI/FS ACTIVITIES
 revelepment  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  ar. 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 terns 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 a comprehensive manner, all RI/FS  activities to be per-
 fcrr.ed, 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  Pf.es.  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 intc the
 Order in  place  of the  broader SOW.

     o    Cse of the EPA  Model SOW

f.  .. 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 F?.?-leai FI/FS is being developed by OWPE  and  will be forthcocinc.
 The  Regions  should  develop a  site-specific SOW based upon the model(s) .
 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  deliverables in the EPA  model SOW must be iden-
 tified as deliverables in the site-specific  SOW  and/or the Work Plan
 developed by the PRPs. Additional deliverables  may be required by  the
 Regions and  should  b«  added to the Administrative  Order.

     o    Modification of the EPA Draft SOW  Requirements

     Th«  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 modifications
 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 CERCLA.   EPA
                                   A-16

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 will not 4llow modifications that, in the judgment of the Agency,  win
 lead to an unsatisfactory RI/FS or inconsistencies with the NCP.'

 Review of the RI/FS Project Plans

      KI/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 Corounity Relations Plan is developed by EPA and should
 include a description of the PRPs' role in community relations activi-
 ties,  if any.   EPA review and approval of the work plan and sampling and
 analysis plan  will usually be required before PFPs 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 Ray
 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  and the environment.  The PRPs may be required to amend
 the  plan if  EPA determines that it does not adequately provide for such
 protection.

     o     Contents of the Work Plan

     The  work  Plan expands the tasks of the SOW, and the responsibili-
 ties specified in the Agreement, by presenting the rationale and method-
 ology  (including  de-tailed procedures)  for conducting the RI/FS.
 Typically  the  Work Plan is developed aftez the draft Order and then
 incorporated into the Agreement.  In some cases however,  it may be appro-
priate  for EPA to develop the Work Plan prior to actual negotiation with
 the  FKPs  and attach the plan to the draft Agreement.   The PRF RI/FS work
 Flan 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 ic  approved  by EPA,  it  becomes a public document and by the terms
of the Agreement,  should be  incorporated by reference into that document.
The  w.ork  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  sit*  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 li&its.

     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-IT

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     •ingle person  should be  identified AS  having overall  responsibility
     for the project  and  specific  tasks to  be  performed.

     Work  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 PRFs
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 deliver&tles,
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 EPA's
oversight  responsibilities.)   The  SAP  should contain the following ele-
ments:

     Field Sampling Plan  - The Field Sampling  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 CCRCLA  guidance.  Further guidance on  developing
     Field Sampling Plans is  presented in the  RI/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  RI/FS.
     Guidance  on  appropriate  QA/QC procedures  may be found in  the  RI/FS
     Guidance  as  will as  "Data Quality Objectives for  the  RI/FS  Process"
     (March 1967  -  OSHER  Directive No. 9355.0-78).

     Zf the SAP s»difies  any  procedures established in relevant  guidance,
it au*t provide) an  explanation and justification for the  change.

     o     Other Project Plan*

     Other project  plans  that are likely to be required in the RI/FS
process include the Health and Safety Plan  and the Coonunity 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/TS Guidance.  In addition,
     Health and Safety retirements 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

     FR?s must submit all cf 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 PRPs 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 t!-.e
dispute resolution section of the relevant EPA/PRP Agreement.

Community Relaticns

     EPA is responsible for developing and implementing an effective
community relations program, regardlesk 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,  I9e~ - CSWER Directive No. 9375.0-01)), the State has the respcr.-
sibility for development and implementation of a community relations
program.  PRPs may, under certain circumstances, assist EPA or the State
in implementing the community relations activities.  For example, PRFs
may wish to participate in coonunity meetings and in preparing fact
sheets.  PRP participation in community relations activities would, how-
ever, be at the discretion of the Regional 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 coonunity  relations activities according
to CERCLA and  the NCP.  A Comnunity Relations Plan must be developed  by
EPA for all NPL sites as described by the  EPA guidance, "Coamunity  Rela-
tions in Superfund:  A Handbook"  (U.S. EPA,  1988 - OSWER Directive
No. 9230.0-03).  The Community Relations Plan must be  independent  of
negotiations with PRPs.  Guidance  for conducting community  relatior.s
activities at  Superfund enforcement sites  is
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specifically addressed by  Chapter  VI  of  the  Handbook  and  the EPA nemo
entitled "Community  Relations  Activities at  Superfund Enfcrcenent
Sites—Interim  Guidance"  (November 1988  - OSWER  Directive
No. 9230.0-3B) .   In  some 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  responsibilities.

     EPA, or the  State, will provide  the Community Relations Plan to all
interested parties at the  same time.  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-lead 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  Community  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  pricz to  releases of
information and discussions  of technical information  in advance.  PRP
participation in  implementing  community  relations activities will be
subject to EPA  (or State)  approval in administrative  settlements and
EPA/DCJ in civil  actions.  Key activities specific to ccmttur.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 ccsrent  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 Concent Decrees.

     o    Availability of  RI/FS Information  from the  PRPs

     PRPs, in agreeing to  -conduct  the RI/FS, Bust 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  PRP* 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, or  business  confi-
dential by EPA  (based on the PRPs' representations),  in conformance 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  or. 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  ar.d  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  1987 - OSWER Directive No.  9285.4-02).

Identification  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 o%'ersight 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/TS. The  following section
provides guidance for identifying and procuring such  assistance for EPA
activities.
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     o    Assistance for EPA Activities

     A* specified in Section 104(a)(1), EPA is required to contract with
or arrange 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 (RZM) 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 be 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

     E?A will  review all project plans that are submitted as deliver-
 atles ir. 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 reouest 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:  (i) re-evaluate the RI/FS
 activities due either to changes in  or unexpected site conditions;
 (2) expand the initial  Work Flan when additional detail is necessary; o'r
 (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 Flans once they are submitted  for
 review.

     o     Reports

     PUPS  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 be 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 PRF  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 subnit 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 beinq
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 mcr.thly 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 month.

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/FS 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
     FRF budget, evaluating costs during the course of  the  RI/FS
     allows EPA to effectively monitor activity  to  ensure  timely
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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
          immediate attention of EPA.  Such problems  may or may not be a
          force ma3cure 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 the performance  of work at the site  for a minimum  of
6 years 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 b*fore their destruction.

     Document control should be a key element  of all  recordkeeping.  The
following activities require careful recordkeeping and  will be subject
to EPA oversight:

     Administration - PRP administrative activities  should be  accurately
     documented and recorded.  Necessary precautions  to prevent errors
                                   A-:S

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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;

               CoDBunications between and among PRPs, the State, ant* EFA
               officials regarding technical aspects of the KI/FS;

               Permit application and award  (if applicable); and

               Cost overruns.

     Technical Analysis - Samples and data should be handled according
     to procedures set forth in the Sampling and Analysis Plan.  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 RZ/FS process  should be managed as  set
     forth in the Sampling and Analysis Plan.  Such analytical dat& n*.;,
     be the product of:

               Contractor laboratories;

               Environiber.tal 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 coasuttees,
     or contractors.

     o    Administrative Record Requirements

     Section 113(k) 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 CERCLA
Response Actions'   (June 23, 1968 - OSWER Directive No. 9833.3A).  More
detailed guidance will be forthcoming,  including guidance  provided in
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 the  revisions  to  the 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 and 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 to 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-
 ardous 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 fcr determin-
 ing the adequacy  of the work performed: EPA will therefore conduct fieic
 inspections  as part of its oversight responsibilities.  The oversight
 inspections  should be performed in a way that minimizes interference
with PRP site  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)(3),
     EPA reserves the right to conduct  on-site  inspections at any  reason-
     able time.   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 sampling
     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  characterizaticr.
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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, 1981O,  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 PRP investigation.

      Environmental Monitoring - EPA may supplement any PP.P environmental
      monitcrinc 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    C.A/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 CA/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 well as during on-site inspections of  sampling
 activities.
      Meetings between EPA, the State, and PRPs should b« held on a regu-
 lar basis (as specified in the Agreement) and at critical tines durir.c
 the RI/TS.  Such critical times may at a minimum include when the SOW
 and the WorJc 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/FS reports are
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submitted.  These meetings will discuss overall progress, discrepancies
in  the work performed, problems encountered  in the performance of RI/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 mor.tMy progress reports and the findings from
EPA oversight activities.  Any problems or deficiencies in the work will
te  identified and corrective measures will be requested (see
Section vi:i 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/FS 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 R:/FS activities or to address a  specific complex -or contro-
versial issue.  Normally, special studies are performed by the PRPs;
however, there may be cases in which EPA will want to conduct the
independent studies.  The PRPs should be informed of any such studies
and given Adequate tine to provide necessary coordination of site per-
sonnel and resources.  If not provided for in the Agreement, modifica-
tion* 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
performv.ce.  The determination of such performance may be based upon
findings such as:

     o    Work products are inconsistent with the SCW or Work Plan;

     o    Technical deficiencies exist in submittals or other RI/FS
          products;

     o    Unreasonable delays occur while performing 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 ider>
tified corrective measures may be sought by:   (1) notifying the PRPs;
(2) describing the nature of the deficiency; and  (3) either requesting
the PRPs 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 plane) immediately constitutes a notice of deficiency.  EPA
will iamediately 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.  Zf the PRPs
significantly delay in responding to the modifications, the RPM would
issue a notice of deficiency to the PRP project manager detailing  the
following elementst

               A description of the deficiency or a statement describing
               in what manner the work product was found  to be deficient
               or unsatisfactory;
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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 fcllowing elements:

               A description  of the deficiency}

               A request for  an explanation of the failure to perferr.
               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 Rl/FS, 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 required and therefore
 provided for in the Order.  This work is usually identified during the
 RI 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.

      EPA 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 linits 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 aets forth the terms 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, EPA will be the final arbiter.  The court, on the
 other hand, is the final arbiter for Consent Decrees.

 Penalties

      Aft) 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:
  In  order to provide for stipulated penalties in an Administrative order
  the parties must vpluntarily include them in the terms of the Agreement.
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d»y of tht dtficiency and continue  to be assessed until  th* dtficiency
is corrected.  The type of violation  (i.e.,  reporting  requirement!
vs. implementation of construction  requirements), as well as the amounts,
should be specified as stipulated penalties  in the Agreement to avoid
negotiations on this point which may 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 PRPs1 Ability to pay, prior  history of viola-
tions, degree of culpability, And the economic benefit resulting froir,
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 ar.d
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 RJ/FS.  If taking 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
Fund-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 FRP 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
                          WASHINGTON, D.C. 20460

                                                            0"'C£ 3 =
                                                   SOLID WAS" ^NC =ME°OENCV
                            JUN  7 lose
MEMORANDUM

SUBJECT:  Transmittal  of  Guidance  on  Documenting  Decisions not to
          Take  Cost  Recovery  Actions

FROM:     JonattflStf ^/csnwi't/  Acting  Director
          Office  of  Waste Programs Enforcement  (OWPE)
                      v
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

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               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^4nWbnf 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 substances 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 the 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

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                                          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
vhen 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 8113 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.

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                                  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 act Ton 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 clos«-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
     V  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.  IiT order to
effectively budget future Fund actions, EPA must )cnow 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, VII

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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       i        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
       S                  WASHINGTON. D.C. 20460
\^Ht^P *
 +r.    •*"
                              JUN 21 1988                    o«>cE3<
                                  -   —--           SOl'D WAS'E AND £ME«GE\CV
                                                      9831.7
MEMORANDUM
SUBJECT:   Supporting  State  Attorneys  General  CERCLA Remedial
           and  Enforcement Response Activities at NPL Sites

FROM:      Henry  L.  Longest,  Director
           Office of Emergency and Remedial
 of Emergency and

an 2^ Cannorr, acti
          Jonathan  2   Cannorr, acting Director
          Office/ of Wastjfe 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 th« 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.

-------
                                                      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 with  the State  lead agency;
          along with

     0    A  pass-throuoh  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:

     0    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
State agencies, such as the  Stats AG,  whose participation may be
necessary or required to  achieve cleanup of the sits.  This step
is essential,  in order to  determine  that the  Stats  Isad agency
will  havs  the  necessary  technical   and Isgal  support   for
completing  all  remedial  and  enforcement response activities at
the site.

     Knowledge of each  Stats  agency's roles and responsibilities
will also enhance communication between those officss  and between
the  State  lead  agency  and Regional  offics in developing  and
implementing State projects.

     Therefore, in reviewing a cooperative agreement application,
the Region must determine:

-------
                              .  3

                                                       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 (CPCAsl

     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:

     °    Development   and  refinement  of  a   State  CERCLA
          enforcement program and  procedures  for implementation;

     0    Development of legal authorities;

     0    Protocols for document review for legal sufficiency and
          enforceability;

     0    Legal assistance,   such  as   for coordinating  the
          identification   of   ARARi   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 nay  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
S^tes  (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  nay  agree to  designate  a  site as  State-lead
enforcement.   If BO,  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 nay  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 AC 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 rn 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 cooperative 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
REGION    COOPERATIVE AGREEMENTS        COOPERATIVE AGREEMENTS

  1            None                          None

  2            None                     Regional discussions with
                                        Puerto Rico indicate they
                                        nay 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 gathered  from phone  survey  of  Regions I-X.

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                              SerZ'. arc
                        -e-era -escc-se
                        .•.as--=:=- DC 2:-cC
CSWE= Di
.-.v :968
                                9200
vEPA
Catalog of
Superfund Program
Directives
Interim
Edition

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This  Interim Catalog is  designed  to supplement the Office  of Solid Waste
and Bnergency Response (OSWTO) 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 (OERR)
Superfund Program.

The 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, GQtR,
Attention:   Betti VanEpps, FTS or 202-475-8864.

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                             BfflLE OF OMEHOS


                                                                     Ease
Key Word Cross-Reference
Section 1 -  Catalog of Superfund Program Directives
             By Program Responsibility And Key word                     i

Section 2 -  Docvment Abstracts                                        16

Section 3 -  Documents In Final Draft Development                      42


Numerical Index To Superfund Program Directives

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                                                                     Ease
     Alternative Water Supplies	Remedial            6-13
     Analytical, Laboratory
     Support and Sampling Instructions  ....  Pre-Remedial         4-5
     Bibliographies	Policy/Admin.        1-3
     Claims	Remedial
                                                 Removal            14-15
     Clean Water Act Interface   	  Remedial            6-13
     Compliance  with Other Laws  (ARARs) ....  Policy/Admin.        1-3
     Connunity 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/Admin.        1-3
     Documents Management	  Policy/Admin.        1-3
     Drinking Water	Removal            14-15
     Emergency and Expedited Response Actions  .  Removal            14-15
     Federal Facilities  	  Policy/Admin.        1-3
                                                 RcmMrlial            6—13
     Field Operating Guides  (Health, Safety)   .  Remedial            6-13
     Financial Management	Rmndial    -  .     6-13
                                                 Removal            14-15
     Flood Plains  and Wetlands	Policy/Admin.        1-3
     Fund-Lead Projects	Rmnrtlal            6-13
July 31, 1988
- 1 -
QSUER Directive 9200.7-01

-------
Bey wort Cross-Reference, continued

                                                                     Page
     Groundwater	Policy/Admin.        1-3
                                                 Remedial            6-13
     Hazardous Site Ranking System (HRS)  . . .  Pre-Remedial         4-5
     Interagency Agreements	Policy/Admin..        1-3
     Mining Waste	Policy/Admin.        1-3
     Methane Sites	Policy/Main.        1-3
     Modeling	Remedial            6-13
     National Contingency Plan (NCP)	Policy/Admin.        1-3
     National Priority List (NPL)	Pre-Ranedial         4-5
     Off-Site 	  Remedial            b-13
     Preliminary Assessments & Site
     Investigations (PA/SI) 	  Remedial            6-13
     Program Implementation	Policy/Admin.        1-3
                                                 Removal            14-15
     Public Health	'	Pre-Renedial         4-5
     Quality Assurance  	  Policy/Admin.        1-3
     RCWCERCIA interface	Remedial            6-13
                                                 Removal    •        14-15
     Records of Decision  	  Remedial            6-13
     Records Maiiaggneni	Removal            14-15
     Risk and ficposure Assessment	Pre-Renedial       14-15
     Recycling	Remedial            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 -          OSWTO Directive 9200.7-01

-------
Key HDid Cnxs-Reference, continued
     Remedial investigation/Feasibility
     Studies (RI/FS)  .............   Remedial            6-13
     Remedial Design/Remedial Action (RD/RA)  .   Remedial            6-13
     SARA Inpleraentation  ...........   Pre-Remedial.         4-5
     Selection of Remedy  ...........   Remedial            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

-------
              5CTIGN 1 - CMM0G OP aJHBfflfO PROGRAM DIRECTIVES
                        BY PROGRAM REStJCIBILITY AN) KEY WORD
                         POLICY MD ADMBOSTOAXION
  9200.7-01    Catalog Of Superfund Directives  (8/88), page 17

  9380.1-02    Hazardous Waste Bibliography (10/9/86), page 41
           Kith PUKT T-aMe (ARARs)

  9234.0-05    Interim Guidance On  Carpiiance With Applicable Or Relevant
               And Appropriate Requirements  (7/9/87), page 20

  9234.1-01    CERCIA Compliance With Other  Laws Manual  (Volumes l and 2)
               (Draft), page 42

  9234.1-03    CERCLA Conpliance With Other  Lavs Manual  (Volume 3) (Draft),
               page 42
  9242.3-05    REM II Contract Award Fee Performance Evaluation Plan
               (7/25/84), page 21
  9221.0-02    CERCXJS Data Handling Support Policy Statement  (3/31/86),
               page 17
  9012.10      Rfidelegations 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 Oe Federal water Pollution
               Control Act (FWPCA) Applicable 10 ttw Superfund Program
               (4/16/84), page 23
July 31, 1988                     -  1 -           OSWER Directive 9200.7-01

-------
Policy and Ministration, «»tHt«iprt
  9200.4-01    Guidelines For Producing Superfund Docments  (2/9/87),
               page 17
           iliti
  9272.0-01    Implementation Of CERCLA 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
  9280.0-02    Polio,- On Flood Plains And Wetlands Assessments  (8/85),
               page 25
  9295.1-01

  9295.2-02
  9295.2-03

  9295.5-01

  9295.5-02
Manorandun of Understanding Between ASTER And EPA (4/25/85),
page 27
Joint CORPS/EPA Guidance (6/24/83), page 27
Interagency Agreement Between Corps Of Engineers And EPA In
Executing P.L. 96-510 (CESCLA) (12/3/84), page 27
Menorandun of Understanding (MDU) Between FEMt And EPA For
The Implementation Of CESCLA Relocation Activities Under
PL 96-510 (4/5/85), page 28
Implementation Of EPA/FDA Manorandun Of Understanding (MDU)
On CERCLA Relocations (6/14/85), page 28
  9234.0-04    Applicability Of RCRA Requirements To CESCLA Mining Waste
               Sites  (8/19/86), page 20
July 31, 1988
                    - 2 -
OSUER Directive 9200.7-01

-------
'Policy and JtttinLstratian, cantimed
   9360.0-06A   Relationship Of The Renewal And Remedial Program Ureter The
                Revised NCP  (3/10/86), page 37
   9200.3-01A   Superfund Conprehensive Accooplislraents Plan
                Manual  (SCAP)  (FY-88)  (10/1/87), page 16

   9200.3-02    Inpleraentation Strategy For Reauthorized Superfund:   snort
                Tern Priorities For Action (10/24/86), page 16

   9200.3-05    Flexibility  In The 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 -
                                                   OSWEB Directive  9200.7-01

-------
   9240.0-01    User's Guide To Die 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 NFL (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  The 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  The NPL  (5/23/84), page 30
  5320.3-04    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 The NPL:  Update «6 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 -
OSUEK Directive 9200.7-01

-------
Fn HIM ill ill Progras, continued
  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  (10/1/87), page 32


Pufrlir Hf*1**

  9285.4-01    Superfund Public Health Evaluation Manual (10/1/86), page 26

  9285.4-02    Guidance For Coordinating ASTER Health Assessment Activities
               With The Superfund Remedial Process (5/14/87), page 27

  9285.4-03    Health Assessments By ASTOR IN FY-88 (4/7/88), page 27
SARA Tool!
  9285.5-01    Superfund Bcposure Assessment Manual  (Draft), page 43

  9285.6-01    Superfund Risk Assessment Information Directory  (12/17/86),
               page 27
  9345.2-01    Pre-Remedial Strategy For laplenenting SARA  (2/12/88),
               page 32
July 31, 1988
- 5 -
QSWER Directive 9200.7-01

-------
  9355.3-02    Guidance For Providing Alternative Water Supplies (3/1/88)
               page 33
  9225.0-02    Forwarding Claims To Headquarters (4/25/84), page 17
  9330.2-04    Discharge Of Wastewater From CERCLA Sites Into POIWS
               (4/15/86), page 31
  9230.0-02    Superfund Connunity Relations Policy (5/9/83), page 18

  9230.0-03    Ccnnunity Relations Handbook (Final) (2/86), page 18

  9230.0-03A   Coonunity Relations Activities At Superfund Enforcement
               Sites - Interim Guidance (3/22/85), page 18

  9230.0-03B   Comiunity 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 Requirenents For Operable Units
               (10/2/83), page 19

  9242.5-01    Procedures Manual For Superfund Caonunity Relations
               Contractor Support (Draft), page 42
July 31, 1988                      - 6 -          OSUEK Directive 9200.7-01

-------
         Prograe, continied
  9242.3-07    Implementation Of B» 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 Share For Remedial Planning Activities  At
               Privately-Owed Sites (5/13/83), page 22

  9250.3-02    Guidance On Implementing Waiver Of 10% Cost Snaring 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 1.(3/1/87), page 34
  9272.0-02    Initial Guidance On Federal Facilities B£LA Sites
               (12/3/84), page 23

  9318.0-04    Coordination Between Regional Superfund Staffs And Office Of
               Federal Activities (OFA) Regional Counterparts On OHCLA
               Actions (1.0/29/84), page 28
July 31, 1988                   -   - 7 -          OSWER Directive 9200.7-01

-------
         Program, oontiiued
  9285.1-01    Standard Operating Safety Guide Manual (11/19/84), page 25

  9285.2-01    Field Standard Operating Procedures Manual *4 Site Entry
               (1/1/8.,). 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 #8 - 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 «9 - 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 Conpendium 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 Ranedial Project Management Manual (12/1/86),
               page 36

  9355.2-01    State Lead Ranedial Project Manual (9/30/87), page 36

  9355.1-03    Terminating Contracts For Superfund Fund-Lead Ranedial
               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    Recomnendat-ons For Grounduater Remediation At  The
               Millcreelc,  -ennsylvania Site (3/24/86), page 25
  9283.1-02    Guidance On ggmp»HaA *tions For Contaminated  Grounduater
               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    CERCLA Off Site Policy:  Eligibility Of Facilities in
               Assessment Monitoring (7/28/86),  page 31
            Tin «ii fa
  9330.1-02    Evaluation Of Piuuidau And Enforcement-Lead Records Of
               Decision (RODS) For Consistency With RCRA Land Disposal
               Restrictions (12/3/86), page 31
  9347.0-0.1   Intoria RCRVCEPOA Guidance On Non-Contiguous Sites And
               On-Sit* MmaggaenL Of Wast* Residue (3/3/86),  page 33

  9347.0-02    Implementation Guidance For Solvent Dioadn, And California
               List Hastes Subject TO ROtt/HSWA Land Disposal Restrictions
               (Draft), page 44
JUly 31, 1988                      - 9 -          OSWER Directive 9200.7-01

-------
  9340.2-01




  9335.3-02



  9355.0-21
Preparation Of Decision Docunents For Approving Fund-
Financed And PRP Rpmprtlal  Actions Under OSCLA  (2/27/85),
     32
Guidance On Preparing Superfund Decision Documents;  Uie
Proposed Plan And ROD (Draft),  page 43

Additional Interim Guidance For FY-87 Records Of Decision
(7/24/87), page 35
     • 1 4i
  9380.2-04    Decision Criteria For Recycling Wastes From OSOA Sites
               (Draft), page 44
  9355.1-02    RPM Primer (9/30/87), page 36
  9242.3-03    Procedures For Initiating Remedial Resporu
               (7/6/84), page 21
                                           Services
  9355.0-24    OSUEK Strategy For Management Oversight Of me ROa/CSlCLA
               Remedial Action Start Mandate (12/28/87),  page 35
  9355.0-04A   Superfund Remedial Design And Remedial Action (RD/RA)
                        (6/V86)f page 33
July 31, 1988
                   - 10 -
Directive 9200.7-01

-------
  9340.1-01




  9355.0-05C



  *155.0-068



  9355.0-20


  9355.3-01



  9355.3-05
Participation Of Potentially Responsible Parties (PRPS) In
Development Of RpmpdiaJ Investigations and Feasibilities
Studies (RI's and FS's) (3/20/84), page 31

Guidance On Feasibility Studies (FS) Under CERCLA (6/1/85),
page 33

Guidance On Reimttial Investigations (RI's) Under CERCLA
(6/1/85), page 34

RI/FS Improvements (7/22/87), page 36

Guidance For Conducting Rnnpi1.1al Investigations (RI) And
Feasibility Studies (FS) Under CERCLA (Draft), page 44

RI/FS Improvements Follow-Up (4/25/88), page 36
  9355.0-19    Interim Guidance On Superfund Selection Of
               page 35
                                                  (2/1/86),
  9380.2-03    Superfund Innovative Technology Evaluation  (SITE) Program
               Strategy And Program Plan  (12/1/86), page 41
sit*
  9380.2-02    Site Operations Plan  (Draft), page 44
July 31, 1988
                    -  11 -
OSHER Directive 9200.7-01

-------
  9375.0-01    Guidance In Preparation Of A Superfund Memorandum Of
               Agreement (SttDA) (Draft), page 44

  9375.1-06    Auazi Of Cooperative Agreements To Political Subdivisions
               (2/12/87), page 39

  9375.1-09    Interim Guidance On State Participation In Pre-Remedial And
               Remedial Response (7/21/87), page 40

  9375.1-10    Involvement Of Indian Tribal Governments In The Superfund
               Pre-Remedial And Rffwrllal Piuyiam (Draft), page 44

  9375.1-11    State Procurement Under Superfund Rpwrtlal Cooperative
                          (7/88), page 40
  9375.1-12    State Access To EPA Contractors During gam^ai Process
               (4/27/88), page 40

  9375.2-01    State CORE Piuyidui Funding Cooperative Agreements
               (12/18/87), page 40
  9200.3-04    Resource Distribution for TAG Grant Program (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 Program 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/S8), page 20

  9230.1-04    Regional Guidance Manual For The Technical Assistance
               (7/88), pagt 20

  9345.0-03    Guidance For Special Study Activities  (Draft), page 43
July 31, 1988                     -  12 -           OSHER Directive 9200.7-01

-------
  9380.0-02    Slurry Trench Construction For Pollution Migration
               Controls  (2/1/84), page 40

  9380.0-03    Guidance  "or Cleanup Of Surface Tank A.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    Leachate  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 -           OSWER Directive 9200.7-01

-------
                              REMNAL FBDQZMf
  9225.0-03    Notification Of Restrictions On Reiabursement  Of Private
               Party Costs (11/25/85), page 18
  9242.2-0IB   Bnergency 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 Imnediate 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 (EPAs)  Under SARA
               (4/2V87), page 39

  9380.2-01    Draft Alternative Treatment/Disposal  Technology Guidance
               For Removal And Err*'"**"* Removal Actions, page 44
  9275.1-01    Removal Financial Man
                    24
       nt Instructions (7/3V84),
  9360.0-08    Ranoval Actions At Methane Release Sites (1/23/86), page 38
July 31, 1988
- 14 -
Directive 9200.7-0r

-------
  9360.0-03B   Superfund Removal Procedures, Revision *3 (2/88), page 37

  9360.0-14    Use Of Expanded Removal Authority To Address NPI And
               Proposal NPL Sites (2/7/87), page 39

  9360.0-18    Removal 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 Inplementation Of The Revised Statutory Limits
               On Removal Actions (4/6/87), page 38

  9360.0-13    Guidance On Inplementation Of The "Contribute To The
               Efficient Remedial Performance" Provision (4/6/87), page 38
JUly 31, 1988                     -  15 -            OSWER Directive 9200.7-01

-------
 	legation Of Authority Odder CSSCLA and SARA
     9012.10                  5/25/88 - OPM/PAS                   41 pages

 Complete  set  of  new  and  revised  redeleiations  of authority  regardijw
 activities  under CERCLA  and  SARA.  Published  under the  signature  of the
 AA/OSWER, it is the current and definitive  delegations  document  for thes*
 authorities.    Attachment A  contains  rede legations  of  authority to take*
 specific  actions.   Attachment B  designates responsibilities  to  exercise
 concurrence, consult or receive notice.
SD^3B3TITSJn XZXwfiQlil^L DdOQBKtiXQDS Of
     (No. to be added)        9/13/87 - OHVPAS                   68 pages

      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.
     'fund OuBUMUeasive aw*»pi < e*Mrntn Plan KBual (SOU?) (FY-88)
    9200.3-01A               10/1/87 - 0PM                      240 pages

Provides guidance to the agency and its yiuuiiiiu managers for the projected
accomplishments  for the  current fiscal year.   It is  used for budgeting,
resource  allocation, and piuyiaiu monitoring  throughout the  fiscal  year.
Prepared annually.


Implementation Strategy For Reauthorized Superfund:  Snort Item Priorities
  for Action
    9200.3-02                10/24/86 - 0PM                      24 pages

First  in a series of memoranda providing direction for  implementing the
Super fund  piuynui  under  SARA.   Provides  basic  instruction on initial
priorities for program implementation and considerations that must be taken
into account under SARA.  Addresses the management of on-going remedial and
removal response  actions, both  Fund and Enforcement, as affected by SARA.
Flexibility In B» FY-88 Smaafuufl Regional Ectraaoral Operating Plan
    9200.3-05                6/7/88 - 0PM                        6 pages

Intended to assist program managers in effective utilization of their FY-88
extramural operating funds.
July 31, 1988                      - 16  -         OSUER Directive 9200.7-01

-------
           For Producing Superfund
    9200.4-01                2/9/87 - ORVPAS                    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.   Bignasis is  on concise,  wen-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 :ing suggestions  .are  made  to
facilitate condensation for use in field narjals or  electronic indexing or
filing.
        of Superfund Piuyija Directives (Inter!* Version)
    9200.7-01                8/88 - OBVPAS                      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 piouzam responsibility, key word,
OSWER number and title, and contain brief abstracts of content.  Biis issue
covers all documents through 7/31/88.  Bie final version, expected early in
FY-89, will encompass  planned changes for managing guidance.   The catalog
is designed for loose-leaf maintenance with quarterly updates.
                              Policy
    9221.0-02                3/31/86 - OBVMES                    2 pages

Statement  of present policy  regarding management  of  the data  handling
support contract  for t'vm'iTg provided under contract by Computer Sciences
Corporation (CSC).
Forwarding Claim To
    9225.0-02                4/25/84 - HSCD                        1 page

Sets a specific tin frame within mien claims, inquiries regarding claims,
and request* for p» m>»?T<"*i« must be forwarded to Headquarters.
July 31, 1988                     - 17 -          OSWR Directive 9200.7-01

-------
Notification Of Restrictions on fieiflfcurscnent Of Private party Costs
     9225.0-03                11/25/85 - ERD                       3 pages

Directs  Regions  to  ensure  that  affected comunities   are informal  of
restrictive provisions of CLHLLA regarding private party reimbursements for
removal  costs.   Mien a removal  action that affects  private residents is
approved, the  OSC snail attempt to notify them that the expenses they incur
are  incurred  at  their  risk and expense,  and  are not  reimbursable by the
Federal government.   OSC's are  cautioned not to make statements that can be
construed by community members  as promises by EPA to reimburse for c_ean-up
costs.
                              Policy
    9230.0-02                5/9/83 - HSCD                        5 pages

Articulates  the agency policy for community relations activities that must
be an integral part of  every Super fund financed remedial or removal action.
Serves  as an  introduction to the  more detailed  handbooks  that  provide
specific,  detailed  direction  for  conducting  viable community relations
activities at Superfund sites.
Community B»ia»^onn H-V*"^E  (Final)
    9230.0-03                 1986 - HSQ)  .                      146 pages

Represents  the  agency's  policy  and program  guidance for  developing and
implementing community relations yiuyidae. at Superfund sites.  OUe 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  community  relations program.    Qiapters  include  community
relations during removals and remedial response during enforcement action.
Examples of community relations techniques and sample plans are provided.
•mere are also instructions for administering a community relations program
and various reporting formats.
CoBBunity p*>^»»i«Tfw Activities At Superfund fiiforcBBBxt stt^s —
    9230.03*                 3/22/85 - BSO)                      15 pages

           how to  conduct community  relations piuyiam  in the  course of
enforcement  actions  toile  reserving  the  integrity  of  the enforcement
process.
July 31, 1983                     -  18 -          OShBt Directive 9200.7-01

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 CDBBnity ««>^a»
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 Citizens Qrlrtanry Kama! For Tte Technical Ami .stance (BC) Grant Program
     9230.1-03                6/88 - HSCD        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 sanpies  of
 completed forms.  The manual will be current for the TPG 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.)
Jjglonal QHAJIM** »UIBUIT fog BJB technical Assistance (TAG)
    9234.1 -04                7/88 - HSCD                         84 pages

Provides  guidance  to  Regional  staff  who  are  managing  the  Technical
Assistance  Grant  Piuyi
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Analytical Support For Superfund
    9240..0-02                3/20/86 - HSED                       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
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,  J6-40  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.


Eaeiija«.y Response Cleanup services  (DCS) Users' Mmual
    9242.2-0IB               10/20/87 - ERD                     240 pages

Provides a comprehensive guide to using emergency response cleanup services
contractors at Superfund sites.
           FOr TPlt^iTfftJ PmmHal
    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 tlm» during work  plan reviews.
Provides  latitude to Regional  site  managers to identify  approved initial
tasks on a site-by-site basis.
    H Contract Maid FOB paifuLajme Evaluation Plan
    9242.3-05                7/25/84 -OH                       50 pages

Defines  procedures for  the REM  II Contract 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/FIT procedures,  except that  each region must assess the
contractor's regional imiuyeaem activities.
July 31, 1988                     -  21 -          OSWER Directive  9200.7-01

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 TH>TIWII il lr« Of the Decentralized CaiLractm Performance Evaluation And
   Avoid Fee Process For Rnmpitial Program 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 tne
 contractor  award  fee process.   Procedure  win be  field  tested  for  one
 evaluation  cycle,  then made  final.
 Technical Assistance Taam CSO) Contract Users'
     9242.4-01A              9/1/87 - EBD                       ^5 pages

 Explains  the  nature of Technical Assistant Team COS)  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 (JEHLLA 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 *<*p»yai Of
 any  hazardous  substance.   (Supplemented by 9250.2-01.)
Policy on Cost Snaring Of *n»»«a»» Ban*aJLs At Publicly Quoad sites
    9250.2-01                3/30/83 - ETO                        5 pages

Specifically  addresses  cost  sharing  for  iaoediate  removal  actions  at
publicly owned sites.   (Supplements 9250.1-01.)   Note:   Changes  in SARA
will  require  revision  of  this  document,  which  will  be  scheduled  in
conjunction with promulgation of NCP revisions.
Haiver  Of 10%  Cost Stare  For maul! n  PLaooiag Activities At  Privately
  Sites
    9250.3-01                5/13/83 -

Reverses  Nncn 11,  1982 policy  (see 9246.0-01) to  allow the  funding of
      Lai investigation, feasibility study, and renedial design at privately
owned sites without a State cost share. (See also 9250.3-02)
Guidance on implementing loader Of 10% Cost Snaring 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 -          OSUBt Directive 9200.7-01

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Delegations Of Rtaudy Selection Tb Regions (Under Delegation #14-5)
    9260.1-09                3/24/86 - OPH/PAS                   25 pages

Delegates renedy selection decisions to RAs.  Outlines options for division
of decision authority between the AA/OSWER and RAs.


Delegations Of Authority Under Bie Federal Mater Pollution Control Act
  (PHPCA) Appllrahle To Tne Superfund Piuyi««i
    9260.3-00                4/16/84 - OPJVPAS                    3 pages


(1)  Identifies and delegates the  applicable authorities under  FWPCA for
     inminent 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/OSWER and RAs  authority  to issue letters of notifica-
     tion of  placenent 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.  (FWPCA311(C)(2)(G); 40 OR 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
     Countermeasures Plan  (SPCC  Plan)  regulations.   (FWPCA  31Kj)(l)(C);
     40 CFR parts 110, 112, 114. (4-1-84)


Implementation Of OSCLA Strategy At Federal Facilities
    9272.0-01                4/2/84 - Office of External Affairs   l page

Memorandum  dated  April  2,  1984  from  the  Assistant  Administrator for
External  Affairs to  the Assistant Administrator,  OSWER,  discussing the
implementation phase of Federal Facility ORCLA strategy.
    9272.0-02                12/3/84 - HSCD                       3 pages

Discusses status and direction of OSWER efforts to implement hazardous site
cleanup at Federal Facilities.  Divides primary responsibility for national
management  of Superfund  Federal Facility yiuuidus  between the  Office of
waste  Piuyidna  Enforcement  and  the  Office of Emergency  and Remedial
Response.
July 31, 1988                     -  23 -          OSWER Directive  9200.7-01

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 Pf T|»*t«< frf TJ tieii POr Federal
     9272.0-03                8/19/85 - GWPE/OERR                   i page

 Memorandum f ran Director GUPE to Director QERR clarifying responsibilities
 of OUPE and QERR on Federal Facilities.
 Federal
     9272.0-04                8/19/85 - OWPE/OERR                  2 pages

 Clarifies responsibilities and direction of effort within GUPE  for Federal
 facility activities.
                      federal Facilities
     9272.0-05                 8/26/85  - CERR/OWFE                   1 page

Memorandum from Director OERR to Director OWPE that provides direction for
the  OERR Facilities  Program Manual development responsibilities that  OWPE
assigned  and clarifies  responsibilities between OERR  and OWPE for  Federal
facilities.
    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.  (Memo signed by Administrator)  (Update planned  for late FY-88)
^htf^^^fl^^4 •» 1 •£ ^bra^^^^^f • V •^h^^b^h^^^^^^^^^^^  V^h_^^h^^B«^^*
H^HBQlAX ^^UBDCXflU nB130^HBuC  UxSCZuCT
    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 -          OSHER Directive 9200.7-01

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Policy On Flood Plains and wetlands Assessments
    9280.0-02                8/85 - OPM/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/wetlands
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  Eacecutive Order  (ED  11990),  and  Appendix  A of  40  CFR  Part 6,
"Statement of Procedures on Floodplain Management and Wetland Protection."
                FUL GrouodHBtfir Remediation At de MiUcretiCr p*t*^ffyiTmpiia
  Site
    9283.1-01                3/24/86 - HSCD                       7 pages

Memorandum  presents an  initial overall  approach to decision  making with
respect  to groundwater  cleanup  at Superfund  sites under  development by
QERR.   Die strategy  will be  further refined in  a Groundwater Evaluation
Manual currently under development.


Standard Operating Safety Guide Manual
    9285.1-0IB               11/19/84 - HSCD                    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 fHitrn ivy Procedures Manal §4 Site Botry
    9285.2-01                 1/1/85 - HSCD                      38 pages

Provides  site entry operating  procedures for  field  response personnel to
             risk of exposure to hazardous substances on Superfund sites.
    9285.2-02                 1/1/85 - HSCD                       38

Describes  apptovad  operating procedures  for decontamination  of response
personnel and equipment at hazardous substance release sites.
July 31, 1988                      - 25 -          OSHER Directive 9200.7-01

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 Field Standard Operating Pnxcdmes Manual *8 - Air Survei
     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 i6 - Hark 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 *9 - Site Safety Plan
     9285.2-05                4/1/85  - HSCD                      34 pages

 Establishes   requirements   for  protecting  health  and  safety  of  field
 personnel during  an activities  conducted at  the site  of an incident.
 contains   safety  information,  instructions,  and  procedures  to  cover  a
 variety of situations connonly  encountered in this type of field work.
Occupational Health Techuical Assistance And
    9285.3-01                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.
Employee Occupational Health & Safety
    9285.3-02                7/7/87 - HSCD                        4 pages

Provides procedures for managing employee occupational health and safety
considerations at Superfund sites.
    9285.4-01                10/1/86 - HSB>                        Manual

Establishes  a n •mmili  to be used  at Superfund sites  to analyze public
health risks and develop design  goals for remedial  alternatives based on
Applicable or Relevant and Appropriate Requirements (ARARs) of other laws,
where  available;  or  risk analysis  where  those  requirements  are  not
available.   Procedures  are designed to  conform with EPA's  proposed risk
assessment guidelines.   Supplements  Chapter 5  of the Guidance  on Feasi-
bility Studies  Dhder CEHCXA, which describes  the public health evaluation
process and provides detailed guidance on conducting the  evaluation.
July 31, 1988                     - 26 -          OSffiR Directive 9200.7-01

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Guidance For Coordinating ASTQR Health *"«	••"  Activities HLtn

    9285.4-02                5/14/87 - HSED                      32 pages

Provides  guidance   for  coordinating  health  assessment   activities  at
Superfund  sites  between  the ASTER and  EPA  when  conducting Superfund
remedial activities.
Health Assessments By AJUE :n FY-M
    9285.4-03                V/7/88 - «gn                    .   6 pages
Clarifies operating  procedures  for dealing with ATSDR.  Presents schedule
for health assessments being conducted by ATSDR in FY-88.
    9285.6-01                12/17/86 - "g™                      Manual

Provides information on resources for conducting risk assessment  activities
at Superfund sites.
           Of Understanding
    9295.1-01                4/2/85 -OBI                        11  pages

Establishes  policies  and  procedures  for  conducting  response  and  non-
response health activities related to releases of hazardous substances.
Joint CCEPS/EPA
    9295.2-02                6/24/83 - OFM                       41 pages

Provides  joint   guidance  for  conducting  activities  and   coordination
necessary for  a  smooth  interface between EPA and  the  U.S.  Amy Corps of
Engineers.     Provides  further  guidance  regarding   responsibility   and
information necessary for coordination of billing and reporting.
  P.L. 94-510 (CBOA)
    9295.2-03                12/3/84 - OM                        3 pages

Defines the assistance the U.S. Any Corps of Engineers win provide to EPA
in inplensnting the Superfund program, EPA Find-lead or State Fund-lead for
EPA Enforcement-lead projects.
July 31, 1988        .             - 27 -          OSWR Directive 9200.7-01

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  	Of Dnderstanding (MX7) Between F9R And Oft For
   Implantation Of Cercla Relocation Activities Oder PL 96-510
     9295.5-01               4/5/85 - QFM                        21 pages

 Describes  major responsibilities and outlines areas of nutual  support  and
 cooperation  with  respect to relocation activities  associated with  response
 actions pursuant to CERCLA, Executive Order 11316,  and the NCP,  40  CFR Part
 300.  Effective until April 1989.
iHplenentation Of EPVFBA Ptiiu iiilia Of Understanding (MDU) On OSCZA
  Relocations
    9295.5-02                6/14/85 - 0PM                      27 pages

Forwards  EPA/FEMA  MDT7  on  CZRCLA Relocation   (9295.5-01)   to  Regional
Administrators.  Provides guidance  in establishing Regional/Headquarters/-
FEMA relocation contacts and following standards  established in the MDU.
Coordination Demem Regional Superfond staffs And Office Of Federal
  Activities (OFA) Begional Counterparts On CEHCLA Actions
    9318.0-04                10/29/84 - HSCD                      4 pages

Encourages  coordination  between the  Regional  Superfund staffs  and OFA
Regional counterparts in carrying out CEROA actions.   (Signed w. Hedanan
and A. Hirsch).
Guidance For
    9320.1-02                6/28/82 - USED                      14 pages

Establishes  procedures for  implementing the  NPL,  which was  mandated by
section 105  (8)(B) of  GERQA.  Addresses the overall strategy  for develop-
ing and presenting the list, including selection of candidate sites, data
collection, application of the Hazard RanJdng  Systan (HRS), procedures for
submitting  candidate  sites, and  the  verification of  quality  assurance
(control procedures).   (Signed by Hedemn,  supplemented by NPL  9320.3-01
and 3-03)
         Listing Policy
    9320.1-05                9/10/86 - HSED                      11

Describes RCRA/NPL listing policy as  prcnulgated in the Federal Register
(51 FR 21054, JUoe 10, 1986)
July 3:  1988                     - 28 -          OSUER Directive 9200.7-01

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     SparHai study Haste Definitions:  Sites Requiring MIM *<«•»;!
  Consideration Prior To NPL Proposal under SARA
    9320.1-06                3/10/87 - HSED                      22 pages

Policy memorandum signed by Director OEKR, 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 fciln
dust wastes, mining wastes, ash wastes, etc.


Interim Guidance For Consideration Of Sections 105(g) And 125 Of SARA Prior
  To NPL Proposal Of Special Study Haste Sites
    9320.1-07                8/21/87 - HSED                       17 page

Memorandum dpscritoes OEKR policy for identifying municipal waste landfills
that have  received hazardous  wastes.   Criteria  described  for considering
their possible inclusion on the NPL.  Signed by Director OEER.
Listing Of •»»«•» «Hpn1 Tjnrtf < 11 a QQ NPL
    9320.1-08                10/24/86 - HSED                      2 pages
Memorandum ^1 y ***** 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 "Umiripql *-"<*< i in 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.
         FQlT
    9320.3-01                5/12/83 - HSED                       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)
    9320.3-02                1/18/84 - HSED                       7 pages

Defines inmedmes and Regional  responsibilities for the final rulanaJdng
of the NPL update.
July 31, 1988                      - 29 -         OSUEK Directive 9200.7-01

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            Par n^HaHnj ine NPL
     9320.3-03                5/23/84 - USED                      8 pages

 Sets for the process for  developing updates to the NPL  and presents the
 schedule for proposing  the second update.   (Supplements  NPL 9320 1-2
 9320.1-3, and 9320.3-1)
 Oil
For Proposed NPL update f 3
     9320.3-04                12/10/84 - HSED                      3 pages

Nonorandun r.stablishes 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 tfiich  clearly fit existing policy guidelines.


NPL  Infoznatlon update #4
     9320.3-05                4/30/85 - HSED                       6 pages

Provides background information on NPL Response Categories/ Status Codes.


updating TUe  NPL:  update «6  Proposal
     9320.3-06                9/17/85 -

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.
Interia Infozaatian Rftlfsw 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).
              For  Selecting An Off-Site  Option m A  Supeiluud Benponse
Action
    9330.1-01                1/23/83 - HSCD                       4 pages
          tot interface between RCRA and CERCIA for the off-site treatment,
storage  or disposal of  hazardous substances.  Establishes general Agency
policy for removal and remedial actions.  Establishes specific criteria for
remedial  actions in  determining tfien  hazardous  substances may  be trans-
ported  off-site  for  treatartt,  storage  or  disposal  vfcen selecting  an
appropriate off-site hazardous %aste management facility.
July 31, 1988                     - 30 -          OSUER Directive 9200.7-01

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Evaluation Of Program and Enforcement-Lead Records Of Derision (RODS) POT
    9330.1-02                12/3/86 - HSCD                      15

Regional survey  to determine impact of RCRA land disposal restrictions on
RODS.
Discharge Of Mast ant PT Fro» CBCLA sites Into FOH6
    9330.2-04                4/15/86 - HSCD                      6 pages

Joint nano from OERR and OUfcC  to Regiuual  Division  Directors  for Waste and
Water Management  addressing the concerns and  issues  unique  to POIW5 that
mist be evaluated before the discharge of CEPCZA wastewater to a POTW.


OHCLA Off Site Policy: Providing Notice To
    9330.2-05                5/12/86 - HSCD                      6 pages

Guidance on providing notice to coonercial treatment,  storage,  and disposal
(TSDs)  facilities deemed  ineligible  to  receive rTBTTA  response wastes.
Facilities nay submit written comments on the application of the policy to
the conditions alleged at their facility.
OHCLA Off Site Policy:  Eligibility Of »»>HH»<«« m mini mam Monitoring
    9330.2-06                7/28/86 - HSCD                       4 pages

Clarifies  application of  the CERCLA  off-site policy  to RCRA commercial
facilities  in  assessment  monitoring.    Assessment  monitoring  does not
automatically  reject  facilities from consideration.   Gives guidelines to
Regional  decision makers  as to  the amount  of  information  required and
riming of ineligibility determinations.


Participation Of Potentially Responsible Parties (PRPs)  In Development Of
  Remedial Investigations And Feasibility Studies (BI's and FS's.)
    9340.1-01                3/20/84 - HSCD                       9 pages

Sets  forth  policy and  procedures  governing  participation  of  PRP's in
developBtnt of RI/FS under <*»grn-   Discusses circumstances in Wiich RI/FS
may be  *»ifr»-»«* by PRPs;  procedures  for notifying PRP's t*Mn the  agency
has identified target sites for the development of RI/FS, and principles
governing PHP r^^i^r^^^* ^ Agency—financed RI/FS.
July 31, 1988          •           - 31 -          OSfflJt Directive 9200.7-01

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Preparation Of nacislnn Documents for Approving Pond-
  Raedial  Actions Onder CE8QA
     9340.2-01                2/27/85 - HSCD

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.   Docunents  the agency's
decision-aaJcing  process  and demonstrates  that the requirements  of CERQA
and  the  NCP nave tee** net.   The ROD and  the procedures  des:ribed  in this
document  become the  basis for  future  cost  recovery actiors that  may be
undertaken.
Preliminary Amn in HI in (FA) ftrlrtam* 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 Ranking 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
Pj[iHi>Vi1 Site Inspection (ESZ) Transitional e*«***~ tor FY-88
    9345.1-02                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  (NPL).
Describes  the goals,  scope, procedures,  and desired results of expanded
site  inspections (ESIs)  in F7-88.  Will be  used  until new  screening SI
(SSI) and listing SZ (LSI) guidance is prepared and distributed in FY-89.
    9345*2-01                2/12/88 - BSD                      16 pages

Describes the  strategy EPA will  follow to address the pre-remedial goals
and requiremoits  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 ore remedial  Froftytion goals,
operations  under  the  current  HRS,  and  program operations  uaring  and
following revisions  to the HRS.  Discusses procedures for integrating the
Environmental Priorities Initiative  (EPI) into the pre-remedial
July 31, 1988                     - 32 -          OSWS Directive 9200.7-01

-------
 Inter!* ROM2HQA ffii1 CD Nan-Contiguous Sites tad %-Site Management
  of Mute Resiitae
    9347.0-01                3/3/86 - HSCD                        9 pages

 Provides basic information pending final guidance.


 Oncontrolled aazazdous Haste site Ranking Systems - A Users Manual
    9355.0-03                7/16/82 - bSEL                      66 pages

 Describes  method  developed by  MITRE  Corporation for  ranking  hazardous
 substance  facilities  for  determining  eligibility  for  inclusion  on  the
 National Priority List (NPL).   A  site  must score at 28.5  to  be eligible.
 ttiis directive reprints the Federal Register discussion of 7/16/84.
Superfund Rmrtlal Design And RHenllal Action (HD/RA) tsn**^~
    9355.0-04A               6/1/86 - HSCD                      112 pages

Manual to assist  agencies  and individuals who plan,  administer,  and manage
Rpmpdial  Design  and Rffirrrllal  Action  (RD/RA)  at  Superfund  sites.    The
material is  applicable to both Fund-financed and  responsible party RD/RAs
and  provides procedural guidance to  eisure  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 Program Manual.
Oil
On Feasibility Studies (FS) Odder OBCLA
    9355.0-05C               6A/85 - HSO)                      188 pages

Provides  a  more  detailed  structure  for  identifying,  evaluating,  and
selecting  remedial action alternatives  under CHELA 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 •umiymsei engineering, public  health, environ-
mental, and cost analyses.  Organizes information to compare the findings
for eacn  alternative.  Document  will be replaced by 9335.3-01:   Guidance
for Conducting Remedial Investigations  (RXs)  and Feasibility Studies (FS)
Under (TUTTA, now in draft.
July 31, 1988                     - 33 -          OSHR Directive 9200.7-01

-------
            n»»n Mai investigations (El's) Oxter CEBOA
    9355.0-06B               6/1/85 - HSCD                      184 pages

Discusses  the conduct of Rflmprtial  Investigations  (RI's),  which are to be
planned and  implemented  by Sfc and the States, to obtain  data  to  evaluate
and  select  remedial  measures.   For  use by  other  Federal  agencies and
potentially  responsible  parties  (PRPs) when  undertaking  remedial responses
pursuant to the NCP and CESCLA section 104 or section 107.   Compliance with
this guidance win help meet the requirements of the  NCP.  Document will be
replaced  by  9335.3-01:   Guidance  for  Conducting RemPrtial Investigations
(RIs) and Feasibility Studies (FS) Under CHELA, now in draft.
   i Quality Objectives nrrrluBMit tMAaanf^ fox p«»mHa^  na^pm^ j£tions
  (TWO UOlUneS)
    9355.0-07b               3/1/87 - HSCD                      341 pages

Provides  guidance for the process of  developing  data quality  objectives
(DQOs)  for  site-specific RI/FS  activities.   Specifies  qualitative and
quantitative standards required to support RI/FS activities.  DQOs define
the level  of  risX that is acceptable for making an  incorrect decision 'and
the quality  of data resulting  from sampling an analysis required to keep
the level of risk  at  or  below the acceptable level.   Provides a formal
approach to development of DQO's in the sampling/analytical plan to improve
the  quality  and  cost  effectiveness  of  data collection and analysis
activities.
Madeling tfrmrtia] Actions At ^controlled Hazardous Haste Sites
    9355.0-08                4/1/88 - HSCD                         Manual

Provides guidance on the  selection and use of models  for the purpose of
evaluating the  effectiveness of  remedial  actions  at uncontrolled  hazardous
waste sites.  Comprehensive set  of guidelines to  regulatory officials for
the incorporation of models into  remedial  action planning at Federal and
State Superfund sites.
    9355.0-10                9A/85 - HSCD                       68 pages

Provide*  guidance   for  the preparation  of  detailed  feasibility  cost
estirattt of  remedial action alternatives required under the  revised NCP.
Provides project onagers and  decision makers in government  and industry
with  procedures for  developing and evaluating  cost estimates  for alter-
native  remedial  responses  to  tn»  uncontrolled  releases  of  hazardous
substances.
July 31, 1988                     - 34 -          OSUBl Directive 9200.7-01

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 A CdnpendiuB Of Superfund Field Operations
     9355.0-14                 12/1/87 - HSCD                        Jtenual

 •mis four volume collection contains a consolidated, ready reference to all
 remedial  field procedures.   The  manual provides the Agency with consisted
 field procedures among  tne ten  regions.   It  should  be used  by Remedial
 Project Managers,  Quality Assurance Officers and State  and Regional field
 staffs.
 Interia irqidance on 5^f»;rftwl SelBcH^n Of
    9355.0-19                12/24/86 - HSCD                     12 pages

 Provides   interim  guidance,   regarding  implanentation  of  SARA  cleanup
 standards  provisions.    Highlights new  requironents  with emphasis on  the
 RZ/FS process.
HI/PS
    9355.0-20                7/22/87 - HSCD                      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  RZ/FS,  streamlined  project  planning,  managanent  of
handoffs, and RZ/FS control review.
                                F7-87 "•TQiflT Qf
    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.
                 /^M Ob^M^J ^M» VtaM^ f^^Mw^^^B CA^^^h^ %^^A ^* - * --- CA^^^MM
                 UD •uB^D^ujH f wC (jEwCX^A WBCBt MUX ijUfc A JCP HBCCft
  Actions
    9355.0-23                10/26/87 - HSO)                      4 pages

Discusses  interim policy for  the funding of water  restoration actions.
Specifies tfcich  types of activities would be  ellglnls for inclusion under
the 10-ynr provision in section 104(c) of SABA.
                              Owrsignt Of ns* f**r** RoBdlal Action Start

                             12/28/87 - HSCD                     22 pages

Establishes  a process  for managing  EPA's efforts  to achieve  the CERCL&
116(e) statutory mandate for ronedial action starts.  Sets expectations for
each Region's contribution toward this end and provides guidance to enhance
EPA's ability to meet these requirements.
July 31, 1988                     - 35 -          OSHBR Directive 9200.7-01

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 Federal Lead flnenrtiiil  Project Management Manual
     9355.1-01                 12/1/86 - HSCD                     135 pages

 Assists EPA Renedial Project  Managers  (RPMs)  to  manage  Federal-lead
 resedial  response projects.   Describes in detail the responsibilities of
 the RPM during the planning,  design, construction, operation, and close-out
 of remedial response  projects.    Provides RPMs  with information  on pro-
 cedures for conducting  Federal-lead  renedial  projects  from  pre-Rl/FS
 activities through site close-out.
    9355.1-02                9/30/87 - a^CD                      56 pages
Orientation  for  the new  Renedial 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,   wanes
the RPM through a project site management scenario.
State Lead RnenrtlaT Project Manual
    9355.2-01                12/1/86 - HSCD                     103 pages

Assists  the EPA  Remedial 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.
Oil
For Providing Alternative Hater 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.
RX/FS
    9355.3-05                4/25/88 - HSCD                      18 pages

Delineates   improvements  developed   for   more   effective  Remedial
investigttionft/FeasiJbility Studies  (RI/FS).
July 31, 1988                     -  36 -          OSWER Directive 9200.7-01

-------
    9360.0-02B               4/88 - ERD                         222 pages

Provides  comprehensive  cost  management  procedures  for  use  by  EPA  at
removals  authorized by  CLKLLA.   For use by  the OSC  an! other  on-scene
personnel wnen  performing 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 dooncntation.  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 Si^rfund
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  MDU
between AXSCR; and a copy of the draft MDU between EPA and  FEMA.
    9360.0-03B               2/88 - ERD                         365 pages

Manual provides  EPA response officials with  uniform,  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  inuyiJiu,  removal
policies as determined by GERR, 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 CTpyidfrtd  immediate  removals, planned  removals,  and
initial  remedial measures.    These definitional  changes  are expected  to
expedite any cleanup activities by avoiding previous remedial requirements
for RI/FS  stadias and  full  cost effectiveness studies.   Provide a higher
degree  of  progrm integration  and  flexibility.    All removals are  not
necessarily urgent and all remedial actions an not necessarily deferrable.
This new flexibility **frl4 niffct a«%M*<<»m managerial control of scheduling
and completion of all projects.
JUly 31, 1988                     - 37 -          OSBR Directive 9200.7-01

-------
        Actions At Metnane Release sites
     9360.0-08                1/23/86 - SO)                        2 pages

Clarifies  EPA's policy on the appropriateness of CERCLA removal actions at
methane  gas release  sites.   As  a matter  of policy, CERCLA  responses to
methane gas releases should be carefully evaluated on a case-by-case basis,
using  this  dooment  as  well  as best  professional  judgenent,  and  with
careful  documentation.   Because  methane gas  is  not listed or designated
under any  of the  statutory provisions  in Section 101(14)  OSCLA,  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  may therefore be eligible
for  response under Section  I04(a)(l)  if methane gas otherwise  meets  the
definition of  a  pollutant or contaminant  under  Section 104(a)(2).  As  a
matter  of  policy, O3CA 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 including careful documentation.
    9360.0-10                7/8/86 - ERD                         9 pages

Manorandun  from  Director,  QERR to  Region  7  clarifies the  distinction
between  Expedited  Response  Actions  and  First  Operable  Unit
Actions.  Provides guidance on how to choose one or the other and sketches
the  planning process.   Includes  flow chart  and inquiry memorandum from
Region 7.


Guidance On UpleBentation Of ift* Revised Statutory Halts-On ""• "Ml
  Actions
    9360.0-12                4/6/87 - ERD                        10 pages

Provides guidance to Regions on the implementation of the SARA $2 million/
12-oanth statutory  Units on  removal actions and the exemption  from the
statutory limits for "actions otherwise appropriate and consistent with the
remedial action to be taken" (consistency exemption).


                           Of
    9360.0-13                4/6/87 - EBD                         8 pages

Provide* guidance  to the Regions  on iaplenentation of the  SARA provision
that requires raoval actions to contribute to the efficient performance of
July 31, 1988                     - 38 -          OSOR Directive 9200.7-01

-------
use Of «•!••• •!•* Removal Authority To Address IK. And Proposed m. Sites
    9360.0-14                2/7/87 - ETO                         4 pages

Directs  Regions to  evaluate NPL/proposed  NPL sites  to determine  if  the
expanded removal authority in SARA can be used to cleanup, or substantially
clean up these sites.


Role Of E&peditPi Response Action (ERAS) under Sara
    9360.0-15                4/21/87 -ETO                       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 appropriate use of ERAs.


Removal Piuyi«mi Priorities
    9360.0-18                3/31/88 - ETO                        4 pages

Sets priorities for managing removal activities at Regional level.


Interim Final tin******* on Removal Action Levels At Contaminated
  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 Piutfijm For Removal Site File
    9360.2-01                7/18/88 - ETO                       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.
    9375.1-06                2/12/87 - HSCD                      22 pages

Establishes  procedures for providing funding to political subdivisions to
perform imimill n activities through cooperative agreements.
Interim ftri*an»«» on State PirtiUpBtion In Pre-aemedial And

    9375.1-09                7/21/87 -  HSCD                      22 pages
Provides  interim  guidance  on  State  participation  in  tue-iaiffitial  and
remedial response, including the use of cooperative agreements.
July 31, 1988                     -  39  -          OSWER Directive 9200.7-01

-------
    9380.0-05                11/1/85 - HSCD                        Manual

Provides overview of the fundamental concepts, procedures, and technologies
used  in  leachate plane management.   Plane generation dynamics and delinea-
tion  are discussed.  Plane control technologies are evaluated and selection
criteria  for  site  applications  are defined.   Grounduater  pooping,  sub-
surface  drains,  low permeability barriers,  and  innovative technologies as
acquifer restoration technologies are Discussed in detail.  Basic reference
handbook  for governmental  and industrial technical personnel working  on
controlling leachate plumes from unconrrolled hazardous waste sites.
                              Of
    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 which have  one or
more  surface impoundments  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 - OSNEK                     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.
                 tive VK&Dology Evaluation (SX^B) Pzo^raB Strategy

    9380.2-03                12/1/86 - BSCD                      58 pages

Describes the SHE program strategy, program plan, and provides information
July 31, 1988                      -  41 -           OSHER Directive 9200.7-01

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 State PiocoroBBot Under Superfund Rafledial Cooperative
     9375.1-11                7/88 - HSCD                           Manual

 Manual   supercedes   9375.1-05  and  provides  the  latest  information  	
 direction for managing all aspects  of State procurement  under Superfund
 Rfinprlial  Cooperative Agreanents.


 State Access To EPA Contractors Daring Remedial Process
     9375.1-12                4/27/88 - HSCD                       2 pages

 Memorandum  reaffirming vocedures for  State retention of  EPA contractors
 during remedial response process.
State Coze Piuyida Funding Cooperative
    9375.2-01                12/18/87 - HSCD                     27 pages

Provides  guidance for  funding  cooperative agreanents between Regions and
States on non-site-specific rraTTA activities.
jg^in iy TieuLli ftCTumnrtiflfi POT 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 describes these barriers for site ranediation.
Presents the theory of function, design, and use.


Guidance For deans' Of Surface Tank tad Dru» Sites*
     9380.0-03                5/28/85 - HSCD                        Manual

Intended  for  Federal,  State and,  local  officials  and  private  parties
engaged in carrying out medial actions at NPL sites.   Provides guidance
for  inplanenting 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
medial  investigations and  feasibility studies.   Provides  a systematic
approach to  medial action for wastes  in tanks and drums.   One of three
guidance documents on specific remedial  actions.   Bibliography identifies
other docuMRts tout should be used concurrently.
                         «^ ^^bA^AA* 04 -*	
                         uUDOIBX 9XiCfl

    9380.0-04                10A/85 - HSCD                        Manual
Basic reference  book describing ranediax technology and providing guidance
in selecting technologies that are potentially applicable for a given waste
site.   Assists Ronedial Project Managers (RPMs)  in understanding remedial
technologies.
July 31, 1988                     -  40 -          OSUER Directive  9200.7-01

-------
                                        TTf
 (Note:  Descriptions of content and expected issuance date have teen
 supplied ttoen available.)
Quality Assuxancooe Plan For Superfund
    9200.1-05           Joint Document - OERR/OWPE
          OB POT HSCD OIC f-*^***^ PCQQX3R1
    9200.3-04           HSED



NPL
    9200.6-02           HSTD
                  With Otter rjMy Knnal
    9234.1-01           CSuo Volumes)
    9234.1-02           Completion Date, Fall 1988 - OPH/PAS
Provides guidance to  RFMs and OSCs in inplenenting the ''"*-IA  requirenent
that on-site  renedics conply uitn  Applicable or Relevant and  Appropriate
Requirements (ARARs) under Federal environmental laws  and  pronulgated state
environmental or facility siting laus that are more stringent than Federal
requirements.   Volume I  contains an overview and requirements  for compli-
ance with RGA ARARs.  Volume II contains requirements for compliance with
safe Drinking water Act, Clean water Act ARARs, and yxouiid water policies.
CEKIA alliance tutu Other
    9234.03             (Volume HI) QR1/PAS

Requirements for the Clean Air Act, the Toxic Substances Control Act, and
other environmental laws including resource protection statutes such as the
Btiangered Species Act.
Suvatfuud analytical Deta aerie*
    9240.0-03           BSZD
    9242.5-01           HSCD
July 31, 1988                     - 42 -          OSWER Directive 9200.7-01

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         Oa »•••*< *i Actions For ContaMinated Ground voter At Superfund
  Sites
    9283.1-02           Estimated Issuance Date, Fall 1988 - HSED

Emphasizes  decision-flaking issues  related to  contaminated gtuund  water.
For  use by  contractors  conducting  RI and  FS activities  at sites  where
ground water is  contaminated;  RPJte responsible  for  ensuring the  quality of
information  contained in the RI/FS  and decision  makers  responsible  for
selection  and  subsequent performance  evaluation  of giound water  remedial
actions  at Superfund sites.   Outlines key  considerations  in selecting  a
ground  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 nddeling procedures.  Currently in review draft.
    9285.5-01           Fall 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:  (l) analysis of toxic
conataminants  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 OnlirUng RI/FS Older OHCLA
    9335.3-01           HSCD
Guidance On Preparing Suyerfund Decision Documents Tne Pinmofl Plan And
  Record OF Paris-inn
    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
(BOD), two key «Vminsni • in the remedy selection process.
         For Low And mobm Cost Site Discovery Activities
    9345.0-02           HSCD
         For Special Study Activities
    9345.0-03           HSCD
July 31, 1988                      -  43 -          OSWER Directive 9200.7-01

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Site Tnar^'ll*** Sailing To Support
    9345.1-01           HSED
 Implementation Guidance For Solvent Dioxin And
  Subject To RCBA/H9A Land fflspnsal Restrictions
    9347.1-01           HSCD
Terminating Contracts For Superfund Lead Remedial Action Projects
    9355.1-02            HSCD
         JLQ P^^S3X3£wQQ Of A SUClCCTQDu NBBOCSBDOU^B Of
    9375.0-01           Fall 88 - HSTD

Assists Regions  and States in developing of State Memoranda of Agreements
(SMOAs).   Presents  sanple individual approaches consisting of articles and
attachments corresponding to the major  parts of EPA/State interactions, as
win be proposed in the NCP revision.  EPA Regions and states nay choose to
develop SMDAs based on this sanple franeuorx.    Currently under review 'and
will be reissued in draft.
                                         X& IDB

                        HSCD

Describes proposed NCP provisions for participation by Indian Tribes in the
superfund  Piuyidm.   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 TreatHeut^Dlsposal TecfiDOljogy Guidance Or Removal And
  Revival Actions
    9802.01             BSD
Site Operation
    9380.2-02           HSCD
         Critatia For Recycling HMtM FXOB ntPTT^ Sites
    9380.2-04           HSCD
                            Altezoative Tecbnologi
    9380.2-05           HSCD
July 31, 1988                     -  44 -          OSWER Directive 9200.7-01

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              MJM3LLCAL BOB ID SDRBFTXD PBOGBAM nruHLT!Vg>
9012.10       Redelegation Of Authority Under CHOA/SARA              16
              And Superfund Internal Delegation Of Authority
9200.1-05
9200.3-01A
9200.3-02
9200.3-04
9200.3-05
9200.4-01
9200.6-02
9200.7-01
9221.0-02
9225.0-02
9225.0-03
9230.0-02
9230.0-03
9230.0-03a
9230.0-03B
9230.0-04
9230.0-05
9230.1-01
atin i_n^
Quality Assurance Plan For Superfund (Draft)
^iiptt^^^Twrt "rtfn^p^p^cj^ *"P Al^^fiOIPli ^nP^n^^ PT_3n
Manual (SCAP) FY-88
Implenentatio • Strategy For Reauthorized
Superfund: Short-Tern Priorities For Action
Resource Distribution For OG Piujidiu (Draft)
Flexibility In The FY-88 Superfund Regional
Extramural Operating Plan
NFL Docket Guidance (Draft)
Catalog Of Superfund Piuyidm Directives
('KM 'US Data Handling Support Policy Statement
Forwarding Claims To Headquarters
Notification Of Restrictions On Reimbursement
Of Private Party Costs
Superfund Comunity Relations Policy
Coonunity Relations Handbook
CooBunity Relations Activities At Superfund
Enforcement sites - Interim Guidance
TJLIJ.I !• fLl.t±jL x '
OflDWI^ni • ^V rrflf I Alt 1 fl¥l^ nPlf 1Tll1^^^ ^^^1* Wlf3 IIIA^ 1 ^^
Citizen Concerns At Superfund Sites
Units
In*arim Guidance On 1AG Grants For Public
Pa. .icipation
42
16
16
42
16
17
42
17
17
17
18
18
18
18
19
19
19
19
14
              Interim Final Role


July 31, 1988                     - 1 -           OSHER 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. 2-0 IB
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 Hie Technical Assistance
Grants Piuyiaiu
Regional Guidance Manual For The Technical .
Assistance Grant Program
CSCLA Compliance With Qtfwr Laws Manual
volume 1 (Draft)
CERCLA Cc-pliance With other Laws Manual
volume 2 (Draft)
CERCLA Compliance With other Tr»W3 Manual
Volume 3 (Draft)
Applicability Of RCRA P«*yri i mm n ^ •JQ cfcyiA
Mining waste Sites
Interim Guidance On Compliance With Applicable

User's Guide To ihe Contract Laboratory Program
Analytical support For Superfund
Superfund Analytical Data Revision And
Oversight (Draft)
Emergency Response Cleanup Services (ERCS)
Users' Manual
Procedures For Initiating Rfmrtial Response
Services
tun ii contract «wara Fee rerxormance
Evaluation Plan
Implementation Of The Decentralized Contractor
Performance Evaluation And Avard Fee Process

aO! contractor users nanuai

Contractor support (Draft)
Policy On Cost-Snaring at Publicly Owed Sites
Policy On Cost-Sharing Of Immediate Removals
At Publicly Owed Sites
waiver Of 10% Cost Share For Rflmdial Planning
20
20
42
42
42
20
•20
20
21
42
21
21
21
22
22
42
22
22
22
              Activities At Privately-Otned Sites





Julv 31. 1988                     - 2 -           OSWfit Directive 9200.7-01

-------
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
9285.3-02
Guidance On Inplementing Waiver Of 10* Cost
Sharing For RpmnrUaJ Planning
Delegations Of Remedy Selection Tb Regions
(Under Delegation #14-5)
FWPCA Delegations of Authority - Complete Set
Inpleraentation of CEHCLA Stratery At Federal
Facilities
Initial Guidance On Federal Facj lities CEKCTA
Sites
Responsibilities For Federal Facilities
Federal Facilities
Responsibilities For Federal Facilities
Removal Financial Management Instructions
' Policy On Flood PI alas And wetlands Assessments
Ofte MillcreeJc, Pennsylvania Site .
Grounduater At Superfund Sites (Draft)
Standard Operating Safety Guide Manual
Field Standard Operating Procedures Manual *4
Site Entry
Field Standard Operating Procedures Mutual * 7



Work Zones
Site Safety Plan
O*rt maximal AMI Mwl^h TW*hrffra1 A*jri«tanCP

Bipiovee occupational Health and safety
22
23
23
23
23
24
24
24
24
24
25
25
43
25
25
25
26
26
26
26
26
JUly 31, 1988                      - 3 -          OSWER 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
Superfund Public Health Evaluation Manual
Guidance for Coordinating ASTER Health
Remprtial Process
Health Assessments By ASTER In FY-88
Superfund Exposure Assessment Manual (Draft)
Superfund Risk Assessment Information Directory
noujidiiuuD ox understanding Between ASTER And
EPA
Joint CORPS/EPA Guidance
Interagency Agreement Between Corps Of
Engineers And EPA in Executing P.L. 96-510
(CEBCLA)
MDU Between FEMA And EPA For The Implementation
Of O3OA Relocation Activities Under PL 96-510
Implementation Of EPA/FEZft MDU On CEKLLA
Relocations
Coordination Between Regional Superfund Staffs
And OFA Counterparts on CEKLLA Actions
Oii Aaanr» For derail 1 \ ch< ng *W»» MPT.
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
26
27
27
43
27
27
27
27
28
28
28
28
28
29
29
              105 (G) and 125 of SARA prior to NPL Proposal
              Of Special Study test* Sites
9320.1-08     r.««f*tig Of Municipal Landfills On One NPL                29
9320.1-09     Listing of Municipal Landfills On B» NPL                29
9320.--01     GttUanc* For Updating The NPL                            29
9320.3-02     Instructions For Promulgating NPL update                 29
9320.3-03     Procedure For Updating Bie NPL                          30
9320.3-04     Guidance For Proposed NPL update t3                      30
July 31, 1988                      -  4 -          OSUER Directive 9200.7-01

-------
9320.3-05
9320.3-06
9320.4-01
9330.1-01
9330.1-02
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
NFL Information update #4
Updating Bie NPL: update *6 Proposal
Interim Information Release Policy
Requirenents For Selecting An Off-Site Option
In A Superfund Response Action
Evaluation Of Program And Enforcement-Lead
RODS For Consistency With RCRA Land Disposal
Restrictions
Discharge Of Uasteuater Fran CERCXA Sites Into
POIWS
CERCLA Off-Site Policy: Providing Notice To
Facilities
CERCLA Off-Site Policy: Eligibility Of
Facilities In Assessment Monitoring
Guidance For Conducting RpmnrtiaJ Investigations
And Feasibility studies Under CERCLA (Draft)
Guidance on Preparing Superfund Decision
Decision (Draft)
Participation Of Potentially Responsible
Parties (PRPs) In Development Of RIs And FSs

cMcpatauon uz Decision UUCUDBILS ror
Affmprlpg Fi«p«J-pl n*»rr «*1 Antf PPP Bfl!"
-------
9347.0-02     Implementation Guidance For Solvent, Diocin,
              And California List Wastes Subject to RCRA/KSWA
                                    44
9355.0-03
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
Uncontrolled Hazardous Waste Site Ranking
systems (HRS) - A Users Manual
gnporfimrt Removal Ho^gn ftnd Psnedial Action
Guidance (RD/RA)
Guidance On Feasibility Studies (FS) Under
OJCLA
Guidance On Ranp»11al Investigations (RI) Under
CERCXA
Data Quality Objectives Development Guidance
For Remedial Response Actions
Moiling p«i»iiai ar-tions At Uncontrolled
Ha»arrVnic Ua«ra 34 *M
Bfl"*llal a^inp ^"^tng prr*a*ir?5 Manual
A Conpendiun Of Superfund Field Operations
Methods
Interim Guidance On Superfund Selection Of
Ranedy
a111«*4rtna1 Tm-o^pi f>HMarvo P«r PV-H7 pms
Interim Guidance On Funding For Ground And
Surface Water Restoration Actions
TlYfl t^OT^ taMri-tal Arvlrvt «^arf MmAM-«
Vf^rfl ^ff^ pfHMri4?1 Pmj«r-r Mmag«Hinf Mmual
Btt REM Ptioer

TBJJiiuiating conuacts For anu runo— ueaa
Ranedial Action Projects (Draft)
State Lead Ranedial Project Manual
Guidance For Conducting RI/FS Under CESCLA
33
33
33
34
34
J4
34
35
35
35
35
35
35
36
36
44
36
44
              (Draft)
July 31, 1988
- 6 -
OSUER Directive 9200.7-01

-------
9355.3-02      Guidance For Providing Alternative Mater                 35
               supplies
9355.3-05      RI/TS Improvements Followup                              36
9360. 0-0 2B    Removal Cost Management Manual                           37
9 3 60. o-O 3B    superfund Removal Procedures, Revision *3                37
9360. 06A      Relatio.is.1ip Of Oie Removal And P*"""*!! al                 37
              PiuyiJiu Under Bie Revised NCP
93->0.08       Rofloval Actions At Methane Release Sites                 38
9360.0-10     Expedited Response Actions                               38
9360.0-12     Guidance On Implementation Of The Revised                38
              Statutory Limits On Removal Actions
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
To The Efficient Rpfnprllal Performance"
Provision
Use Of Expanded Removal Authority To Address
NFL And Proposed NFL Sites
Role Of Expedited Response Action Under SARA
Removal Piuyidai Priorities
Interim Final Guidance on Removal Action
Levels At Contaminated Drinttng water Sites
nooei riuyidin ror Kemovai site riie Hanagemunt
Guidance (Jn Reparation ox superxuna nun
(Draft)
Subdivisions
^^pri^HpV^mVMMiMl 9 i fl^l^i ^'••^^m^"* Sk i W^"^T"^T^lB

Involvement Of Itnian TrUbai Governments in
SUD^IT^^flftQ ^^^^^•*******" * ^ \ iff^u fllHP^lUflM rCOQ^otD
(Draft)

State Access TO EPA Contractors During Rttmrtlal
JB
39
39'
39
39
39
44
39
39
44
40
40
              Process
July 31, 1988                      -  7  -          OSHER Directive 9200.7-01

-------
9375.2-01     State Core Piujidiu Funding Cooperative                    40
              Agreements

9380.0-02     Slurry Trench Construction For Pollution                  40
              Migration Controls

9380.0-03     Guidance For Cleanup Of Surface Tank And Drum             40
              Sites
9380.0-04     Rpmnrtlal Action At Waste Disposal Sites Handbook.        40

9380.0-05     Leachate Plume Management                                41

9380.0-06     Guidance Document For Cleanup Of Surface                 41
              lopoundoent Sites

9380.1-02     Hazardous waste Bibliography                             41

9380.2-01     Draft Alternative Treatnent/Disposal                     44
              Technology Guidance For Removal And Expedited
              Removal Actions

9380.2-02     Draft Site Operations Plan                               44

9380.2-03     Superfund Innovative Technology Evaluation               41
              (SITE) Piuyidui Strategy And Piuyidiu Plan

9380.2-04     Draft Decision Criteria For Recycling Wastes             44
              From Superfund Sites

9380.2-05     Draft Guidance On Differentiating Alternative            44
              Technologies
Section III   Documents in Final Draft Development                      42
July 31, 1988                      -8 -           OSWR Directive 9200.7-01

-------
-•-                                   OSWER Directive No. 9832.13


Part V.  flyfafeina 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 Recovery.
August 29,  1983, OSWER  Directive No. 9832.2.

Coat 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 fCERCLJU .
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 Coat Recovery
Actions. June 7, 1988, OSWER Directive No.  9832.11.

Guidance en Federal Suoerfund Liens. September 22, 1987, OSWER
Directive No. 9832.12.

Interim CERCLA Settlement Policy. December  5, 1984, OSWER
Directive No. 9835.0.

Interim Final Guidance  Package on Funding CERCLA State
Enforcement Actions at  NPL Sites. April 1,  1988, OSWER Directive
NO. 9831.6.

Interim Cuidanee oh Notice Letters. Negotiations, and Information
Exchange . November 19,  1987, OSWER  Directive No. 9834.10.

Interim Guidance on Settlements with de Minimia Waste
Contributors under Section 122 fol of SARA.  June 19, 1987,  OSWER
Directive Ho. 9834.7.

Interim Guidance; Streamlining the  CERCLA Settlement Decision
process. February 12, 1987, OSWER Directive No. 9835.4.

Policy on Recovering Indirect Coats in CERCLA 1107 Cost Recovery
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


Proeedurea 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 Recordkeepino Guidance.
November 1987, Office of the Comptroller, Financial Management
Division.

Suoerfund Removal Procedures Revision Number Three.
February 1988, OSWER Directive No. 9360.0-03B.  See Chapter 5,
"Potentially Responsible Parties".
                                  48

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 27268
Federal Register /  Vol. 53. No.  138 / Tuesday.  July  19. 1988  /  Proposed  Rules
 ENVIRONMENTAL PROTECTION
 AGENCY

 40 CFR Perta 117,302. and 355

 (PPn.-3207-J)

 Reporting Exemption* for Federally
 Permitted ReMeae* of Hazardous
                      into the environment require notification
                      under CERCLA.
                      DATES: Comments must be submitted on
                      or before September 19.1888.
       r Environmental Protection
Agency (EPA).
ACTON: Proposed rule.
        r. Section 103(a) 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 importable quantity (RQJ 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
dean Water ACL 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 I07(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
tttis exemption from the notification
requirements under Title ID of the
Superfund Amendments and
Reauthorization Act of 1986. The
Agency also proposes in this rule to
make conforming changes to the
regulation (40 CFR Part 117) describing
the notification requirements for
releases of hazardous substances under
section 311 of the Clean Water Act
Finalr*. This rulemaking addresses
several issues related to which releases
                        Comment* Comments should be
                      submitted in triplicate to: Emergency
                      Response Division. Superfund Docket
                      Clerk, Attention: Docket Number 101(10)
                      FPR, Room LC-loa 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 MO
                      ajn. and 4:00 pjn. 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 are free and each
                      additional page costs 120) may be
                      charged for copying services.
                      PON PUNTMHI MPONSIATION CONTACT!
                      Mr. Hubert Waiters, Project Officer,
                        •Response Standards and Criteria
                        Branch. Emergency Response Division
                        (WH-M8B). US Environmental
                      • Protection Agency. 401M Street SW.,
                        Washington. DC 20460. (202) 382-2463:
                            or the
                      RCRA/Superfund Hotline. 1-600/424-
                        9396: in Washington. DC 1-202/382-
                        3000.
                        The toll-free telephone number of the
                      National Response Center is 1-800/424-
                      8802: in the" Washington. DC
                      metropolitan area, the number is 1-202/
                      426-2875.
                      •ummeMTAftv IMWMIMATIOW: The
                      contents of today's preamble are listed
                      in the following outline:
                      L Introduction and General Comment*
                        A. Background
                        a Relationship to Reporting Under Title III
                      Q. Elements of the Exemption
                      OL Notification for Certain Types of Releases
                        A,uGcaaral
                        a PCB Waste Disposal
                      rv. Dtochareees to POTVVs
                      V. Regulatory Analyses
                        A. Executive Order No. 12201
                        a Regulatory Flexibility Act
                        C. Pepcrworic Reduction Act

                      L Introduction and General Comments

                      A. Background
                        The Comprehensive Environmental
                      Response. Compensation, and Liability
                      Act of 1980 (Pub. L 98-810). 42 U.S.C.
                      9801 it sea. (CERCLA or the  Act),
                      enacted on December 11. i960, and
                     . amended by the Superfund Amendments
                      and Reauthorization Act of 1988 (SARA)
                      (Pub. L 99-499). establishes broad
                      Federal authority to respond to releases
                      or threats of releases of hazardous
substances from vessels and facilities.
Section 101(14) of CERCLA defines th«
term "hazardous substances" chiefly b.
reference to other environmental       -
statutes with authority further granted   :
to the U3. Environmental Protection  1
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 el 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 ID 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 Densities for
submitting false or misleading
information in a  notification made
pursuant to CERCLA section 103. and
increases the maximum penalties and
years of imprisonmjnt 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.  July  19. 1988  / Proposed Rules
                                                                   27269
 Marine Protection. Research, and
 Sanctuaries Act
   • Any Injections of Quids 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
   In the May 25.1983 Notice of
 Proposed Rulemaking (NPRM1 (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 commenttn diseuued 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
 commentera 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 Farther, today i proposal twite* the definition
 of -rtlM*t~ to nfltci SARA •metutaent* to
 CfSCLA section un'.Zll
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 release* "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 Canter. This
approach also avoids the numerous and
unnecessary reports that could be
generated by the reporting of small
permit excursions that  an 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. la 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 dtrg*p 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 local community emergency
coordinator, and the State emergency
response commission) to a toll-free or
local number constitutes an undue
burden on the regulated community. The
Agency seeks comments on its
interpretation of the burdens and the
benefits of requiring reporting under
CERCLA  and Federal or State permit
programs.
  Several commenters 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 Uttie 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.
owners or operators of certain solid
waste disposal facilities  that handle
hazardous waste only from generators
of lees than 100 kg. per month of
nonacuteiy hazardous waste (See 40
CFR 261.5) 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 waste* in
unpermitted facilities (45 FR 33086.
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 Pan 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 (39 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, that
releases  exempted from regulation by
the statutes listed in section 101 (If) will

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27270
Federal  Register / Vol. 53. No. 138  /  Tuesday.  |uly  19. 1988  /  Proposed RuJes
not bt considered federally permitted
  Although certain releases may not
qualify at federally permitted, they may
not po«e a  sufficient hazard to wirrant
reporting to the National Resporue
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 characteristics 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 casea, CERCLA
notification will be required when the
characteristics of the release are not in
compliance with the permit (e.g~ the
allowable concentration of a particular
constituent has been exceeded) and an
RQ or more of a hazardous substance
has been released.
  Several commenten urged that
various types 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.
                       B. Relationship to Reporting Under Title
                       m

                        Title ID of SARA (sections 301-32S)
                       addresses emergency planning and
                       community right-to-know and provides.
                       among other things, emergency and
                       annual notification requirements in
                       addition to those included in section 103
                       of CERCLA. EPA has provided (see 52
                       PR 13377. April 22.1987: 52 FR 21152,
                       June 4,1987) and will continue to
                       provide regulations and guidance on the
                       Title ID requirements as necessary and
                       appropriate.
                        With respect to emergency
                       notification requirements, section 301" of
                       SARA provides release reporting
                       requirements that parallel the
                       requirements of section 103(a) but are
                       intended to make release information
                       immediately available to Slate 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
                       pioposes to revise  the applicability
                       section of the regulation implementing
                       section 304 (40 CFR 3S5.40(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 an not exempt
                       0. Elegants of the Exemption

                        Each element of the fedenlly
                       permitted release exemption is
                       discussed below. Relevant comments
                       received on the may 25.1983. NPRM
pertaining to each element also are
discussed.                          -
  Releases front Point Sources with
National Pollutant Diteharge
Elimination System (NPDES) Permits.
Introduction. Section 101(10) identifies
three types of releases from point
sources with NPDES permits as
federally permitted releases:
  (A) discaafijM in coapliaac* with a ptnnit
uader aecrJoa 402 of the Federal Watar
Pollution Control Act (B) ditcha/i** rwultiflf
from orcumsunon identified tad reviewed
and mads pan of the public record with
respect to • permit Issued or modified uader .
••coon 402 of IB* Federal Wsttr Pollution
Control Act and cnbttct to • condition of
racb permit. (Q conttauoui or anticipated
tateraltteot discharge* from • pout source.
tdeatJHad la • permit or permit application
ander section 402 of tat Federal Wattr
Pellation Control Act. which an catiMd by
treats occurhaf within thi acope of relevant
optraouj or treatment lyittmi *  * *.

  This language is identical to that used
IB 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 & Rep. No. 840.96th
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 101'10) (A). (B).  and
(C).
  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 309 enforcement provisions.
Senator Stafford explained that:
  •  * * we era attatnptlns to draw a  liaa
batwaan the provisions of tht |CWA| under
•actions 301.304.402 rtfulatine. chronic
discharge* and 311 daaliai with spills. At tha
extremes, it is relatively easy to focus on the
difference but it can become complicated.
The concept can ba summahsad by ttating
that thoaa dtehanes of pollutant* that a
      sola man would condada are
associated with permits, permit conditions.
operation of treatment technology and permit
violation! would result in 402/309 sanction*:
those discharsts of pollutants that a
reasonable sun would conclude are episodic
or classical spills not intended or capable of
bains processed throufh tha permitted
treatment system end outfall would fssult in

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                 Federal Register / Vol. 53. No.  138 / Tuesday. July 19. 1908 /  Proposed Rules
                                                                      27271
tht application of MCttoa J1V(1Z4
CaartMional Record 37MS (197»).|
  In 1979. the Agency promulgated 40
QFR Ptrt 117. which contains CWA
reporting requirements for discharges of
hazardous substances (44 FR 50778.
August 29.1079). Section 117:12 provided
a regulatory interpretation of the three
exclusions to the deflation of
"discharge" in 40 CFR Part 116 and
CWA section 3ll(a)(2). and the
preamble to the rule provided a detailed
explanation of the  three types of
excluded discharges. In 1987. EPA
amended the definition of "discharge" in
40 CFR Part 110, the discharge of oil
regulation, to codify the same three
CWA exclusions (52 FR  10712. April 2.
1987). The preamble to the oil discharge
rule adopted the description of the three
exclusions from the 1979 preamble to 40
CFR Part 117.
  la 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.
300.5.302.3. 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 NPOES discourses that
cores pond 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 addreset the discharge
in question. To qualify as a Type A
discharge, the permit must either
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 (Le, 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-iite 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 (l) 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 •iimin«tinfl 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-site
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 minimise 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 U.*ger 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 (La. the
 discharge will not be a federally
 permitted release).
   Today's rule proposes to amend 40
 CFR 117.12JC) by deleting the phrase
 "whether or not the discharge is in  .
 compliance with the permit" for Type B
discharges, to avoid confusion caused
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 be
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 proposes
to delete the phrase from the regulation.
Hie Agency solicits comments on this
proposed  revision to 40 CFR 117.l2(c).
  Type 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 applicatioa and (3) caused by
events occurring within the scope of the
relevant operating and treatment
systems. Included within the scape of
this provision an 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 ll'.12(d) provides further
 examples of discharges that fit within
 the category: (1) Provided that an ors-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 the
 discharge originates in the
 manufacturing or treatment 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 117.12(d)(:)(iii) by
 deleting  the term "operator error" from
 the description of "an upset or failure of
 • treatment system." * The reasons for

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 btimiKMi ditetarft wtww *t upy« or hum*
 MHJU from • COBBOI proottm. •« oowior «». •
 mita Uilura or lulfuacttoa. tocquipmtfit or

 • nodMCtinn tcbfduto duns*- provided iH«i Midi
  upon or hiUut it no) ttuMd by an on-fitt tpill of •

-------
 27272
Fe only
thoat release* whose aavuuoiaaatal aad
health effects have beta evaluated aad
datarmiaed to be allowable under tat
appropriate permit program.
  Aa/Mse» from Fodlitiu with FinoJ
RCRA Pvmiu. Rdtaata ia compbaact
witt a legally enforceable RCRA
treatment storage, or disposal final
permit are. pursuant to CERCLA section
lOl(lOME). federally parmrttad relaaata
when titt hazardous T-Jt'^nrrr
released are specified in tht peaatt aad
subject uadar the permit to a specific
limitation, standard, or control
procedure (see 40 CFR Parts. 2M and
270). Identifying releases on the record
during the permit process ia insufficient
to qualify them for the section 101(10HE)
exemption because, ia order to be
exempt tht substances mast 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 and 40 CFR
Part 265 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. Rap. No. 840,98th
Cong. 2nd Sets. 48 (1880)).
  RsifOMt Pumaru to Marine
Protection, Rmuarch. end Sanctaarie*
Act Pemiu. Section 101(10)(F) of
CERCLA iacludes. ia the definition of a
federally permitted  release, releases in
compliance with legally enforceable
permits issued uadar section 1202 (EPA
ocean dumping permits) or section 103
(Corps of Engineers permits for ocean
dumping of dredged materials) of the
Mariat Protection, Research, aad
SaactBarie* Act Pursuant to EPA
regulations, applicants for ocean
dumping permits must identify the
physical aad chemical properties of the
matarials to bt discharged, aad the
permit must identify tat materials that
may be discharged (at* 40 CFR Parts 221
and 227). Similar procedures and criteria

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                 Federal Register / Vol. 53. No. 138 /  Tuesday.  July 19. 1088 / Propped Rules
apply to permits for ocean-dumping of
dredged malarial (Me 33 CFR Part 324).
These EPA and Corps of Engineers
permit* cover substances that can be
discharged lawfully. Dumping of
hazardous substances not specifically.
allowed in these permits is subject to
the notification requirements of
CERCLA section 103(e) because
emergency response officials should be
made awire of releases not eviluated
previously by a permit program for
health and environmental effects.
  Underground Injections Authorized
Punuant to the Safe Drinking Water
Act. CERCLA section 101(10MG)
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 hal 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 approveble  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.
  Enistions Subject to Clean Air Act
Controls. Section 101(10)fK) of CERCLA
provides an exemption for hazardous
substance emissions that are subject to
a Clean  Air Act (CAA) permit 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. 848.
9C!h Cong. 2nd Sess. 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 must
be in compliance with the applicable
permit or control regulation.
  Several commenters suggested that
the dear 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 pan
of State Implementation Plans (SIPs)
approved under section 110 of the CAA.
Some commenters 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 OL which is the
Emergency Planning and Community
RighMo-Know Act of 1986. was enacted
in large part 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 ID 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 ofCERCLA 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
eliminate virtually any CERCLA
reporting of air emissions and. thus, the
potential for early Federal response*
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 releases 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 prevision is not
equivalent to subjecting the pollutant to
CAA requirements or controls "designed
specifically to limit or eliminate" the
pollutant (See S. Rep. No, 846.98th  •
Cong. 2nd Sess. 49 (I960)). A reviewed
release, therefore, is not necessarily a
federally permitted release.
  Several commenters stated that the
air release exemption should apply
broadly to substances such es volatile
organic compounds (VOQor total
suspended particulates (TSP) regulated
under the CAA Pffrt^'j|nfl those
regulated under approved State
programs). The commenters claimed
that a permit or regulatory limit on such
categorical emissions in effect
constitutes a limit on each constituent in
the group. EPA generally agrees with
this position, but again is concerned that
an overbroad interpretation of the air
release exemption could result in
nonreportmg of dangerous chemical
releases. A large release of a substance.
from a pressure release valve over a
short period of time could be within a
VOC limit established for a source, yet
could pose a threat to nearby residents.
Although the categorical limits
indirectly restrict each constituent
those limits wen established based on
routine emissions over a specific
averaging time, end were not predicated
on an upset or excursion from normal
operations. The Agency does not
believe, therefore, that such an upset or
excursion should be considered
"permitted" within the meaning of •
section 101(10)(H) of CERCLA.
  EPA is soliciting public comment
today on three  approaches to
distinguishing enussions permitted
under the CAA from releases that could
create potential hazards to surrounding
areas and for which timely notification
under CERCLA and Title ID is
necessary. Under the first approach.
EPA would interpret the air release
exemption in a manner similar to the
exemption for releases regulated under
the CWA, Thus, air releases would be
permitted to  the extent that the
constituent hazardous substances  have
been Identified, reviewed, and made
part of the public record during the
permit issuance. State implementation
plan, or regulation development proces*
for the pollutant that includes the
hazardous substance. The exemption
would not extend to releases of
constituent hazardous substances of a
permitted or regulated pollutant
category that are not Identified	
expressly on the record with respect to

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27274
FedenJ
/ VoL 53. No. 138  /  Tuesday.  Inly 19. 1988 /  Proposed Rules
 the applicable permit or ooatrol
 program. Once the constituent
 hazardoqe «">«•«•'"•* bed been
 Identified end reviewed appropriately.
 (be limitation on the category of
 •missions of hazardous tiihttflrTTf
 would provide the "permit or ooatrol
 regulation" needed for eppiicetion of the
 section 101(10)(H) exemption, A specific
 iMue on which the Agency eoliciti
 commrau it the indiuion of negative
 detenninatians under the CAA section
 112 program in the exemption.
  The second  approach would interpret
 broadly the  regulatory program*
 governing pollutants for which e
 National Ambient Air Quality Standard
 (NAAQS) haj  been —'-m-*^ under
 CAA eecn'on 108. These program* are
 developed under CAA section 111 New
 Source Performance Standard* (NSPS)
 or CAA section 110 Stale
 Implementation Plan* (SIP*). Under this
 approach. EPA would «*i«ria|pit«h
 between •*"'M^"" of haxardoua
 substances that an VOCs and regulated
 as precursor* of ozone, and constituents
 of the other NAAQS pollutants. For
 example, emissions of constituents of
 particulate matter would be considered
 "subject to a pennit or control
 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 besed on the evidence of health
effects of those emissions. In contrast
emissions of VOCs are regulated based
on their reactivity and consequent
contribution to the erection of ambient
ozone levels for which NAAQS have
 been set. In setting the ozone NAAQS or
 esteblishing  emission limitations for
 VOCs. no consideration was given to
 any direct health effects of ambient
concentrations of total or any
 constituent VOC As e 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 e .
 constituent of.  and. therefore, limited by
regulations or standards for. any of the
five pollutants  enumerated above, but
                       not If it is limited by standards for
                       VOCs.
                         Reporteble quantities for the purpose
                       of reieeee notification requirements are
                       established to ensure appropriate
                       response to episodic releases of
                       hazardous ••*««»•««*•• that have
                       potential adverse health and
                       environmental effects. A large release of
                       an individual VOC in a quantity equal to
                       or in excess of an RQ may be within
                       iQf^j VOC emission limits and may
                       melee a **^g^rtble 5ffaPtributioo 10
                                           and pipe ruptures, equipment failure.
                                           and emergency startups and shutdown/
                                             EPA requests comments oo these
                                           alternatives for defining the scope of the
                       formation, which is affected by
                       photochemical conditions, meteoroiosy
                       mnii (he """'"fhvttTT Of «»*>*•» VOC
                       sources. Such a release may.
                       nonetheless, potentially endanger
                             health because of the toxioty of
the individual substance.
  For example, under CAA section ill.
EPA established controls on the rubber
tire manufacturing industry Uniting

plant to apprexxmatery 400 tons per
year, or about 1.1 tone per dey.
Predominant VOCs emitted in die
menivactnnng pi me is are white
gasoline and petroleum napthe. Toluene.
xylene. ketones. end esters ere else
used throughout the industry. (48 FR
2876. September IS. 1983.) A release OB
one day of an RQ or more of one of
these VOC constituents, svch es 1000
pounds of toluene, although within the
total VOC release limit of approximately
1 ton per dey may pose a threat to
human health or the environment
because the total VOC limitation is
based on controlling the formation of
ozone, end 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 constituent*, 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 the second approach.
  As s third option. EPA could interpret
the CAA federally permitted release
exclusion to apply only to releases tfaet
are subject to a CAA permit or central
regulation and thet are either the
"routine" emission*-for which the permit
or control regulation was designed or in
compliance with a specific standard for
release of  that substance specified bt the
permit or regulation, Unpermitted.
nonroutine releases would include
apsets from such devices as pressure
release valves, storage tank reactor
vessels, or sudden release* from valve
                                           airreieai
                                                         apt*
                                                           Specifically. EPA
                                           requests comments distineuiahinx
                                           releeses of ozone precursors (VOQ
                                           constituents from releases of
                                           constrtaenta of other categorical
                                           pollutants controlled by NAAQS. EPA
                                           also is soliciting comment OB the

                                           and the aeed to define "routine" in
                                                             atttOlt DOlAtV Of
                                                             olicits comments on
                                           iflMfl |aUxCAL sUMJ I
                                           what emission points should be
                                           included m addition. EPA is <
                                           that die first approach may leed to
                                           overreporting of routine releases subject
                                           to adequate contra) under existing
                                           regulatory or permit limits thet could
                                           divert resources from releases requiring
                                           immediate response. EPA sotidts
                                           information on the number of facHrtfes
                                           and types of releeses that would require
                                                      '   '
                                                             the types of releases that woeid be
                                                             excluded under either approach.
                                                             particularly wtth respect to any
                                                             potentieDy dangerous releases thet mey
                                                             be excluded.
                                                               In addition, the National Frtiissitrn
                                                             Standards for Hazardous Air Pollutants
                                                             (NESHAPs) limits for radionuclidea are
                                                             health-based annual limits, whereas
                                                             radionuclide RQs are reporting trigger*
                                                             besed on 24-hour releases. The Agency
                                                             will require e report if an RQ above any
                                                             annual NESHAP limit is released in e
                                                             24-hour period. The Agency requests
                                                             comments on the number of fecilities
                                                             and types of releases that may require
                                                             reporting,'
                                                               Injection of Materials Related to
                                                             Development of Crude Oil or Natural
                                                             GoiSuppliet. The injection of meteriels
                                                             related to the production of crude oiL
                                                             natural gas. or water is considered e
                                                             federally permitted release if the
                                                             injection material is authorized
                                                             specifically under applicable State lew.
                                                             Because it is probable diet afi
                                                             conceivable injection modes are not
                                                             considered in State lew*. EPA. in the
                                                             preamble to the May 23.1983 NPRM.
                                                             interpreted the aection 101(101(1)
                                                             provision to exempt only those activities
                                                             or materials that are authorized
                                                                      i of ttw fc»l rmt» MtHMnt at RQ for
                                                                      l (to to MritaM to nen to Aiiwey
                                                                      ralcMMClHpMiAMlyriiilMi
                                                                 * I** UM COM U> Ih* 0BVOTMBI Md f«p*t«l
                                                                     ouMd by UM ravtMd nUinnarlirti RQ
                                                                            . Th» docanwni u **Mkbto
                                                                           i in Roam IC-MD. US.
                                                                      •I hull cum Ae*cy. «H M «"•*•
                                                             Sw.WMfcBtwa.OCJ
                                                             1CBJMHW).

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                 Federal Register / VoL S3. No. 138 / Tuesday.  July 19. 1966 / Proposed Rules
                                                                    27273
 •pacifically by State law. rather thin
 thoM that an net prohibited by Sute
 Uw. This interpretation ensures that the
 appropriate authorities have consciously
 considered and intentionally authorized
 the injection ectivities and materiela
 that are to be exempt from notification
 requirement* end that the NetionaJ
 Response Center will be nude aware
 immediately of the potential need to
 respond to releases that have not been
 evaluated previously by e permitting
 authority.
  EPA interprets the section 101(10)(I]
 exemption to apply only to those
 materials specifically authorized by
 State lew to be used in ectivities 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
 eommenters objected to this
 interpretation and instead supported a
 broader interpretation that would
 exempt from CERCLA notification ell
 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
 material* that are not authorized
 specifically by State law for purposes of
 the development of crude oil or natural
gas supplies and resulting in e 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 e 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 § 403.10(e)
 State-edministered local program. One
of the eommenters oa the May 25,1983
 NPRM suggested that the Agency
 broaden its approach to the POTW
 exemption to provide thai the discharge
 be in compliance only with general
 pretreatment requirements end not with
 site-specific requirements. The Agency
 believes that for POTW to be
 considered "federally permitted." not
 only must the hazardous substance be e
 pollutant specified in applicable
 pratreatment 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 beats of the site-
 specific conditions, because the
 categorical standards alone may not be
 adequate to eddress the impect of
 pollutants on the POTW. Therefore.
 even though a release into a POTW U 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 POTWi
 processes or may pass through the
 POTW to the nevigable waters, either of
 which may result in a situation requiring
 an emergency response. This exemption
 applies only to industrial users *
 discharging to POTWs: a POTW is
 rabject to CERCLA reporting and
 liability provisions if its discharge of e
 hazardous substance violates its NFDBS
 permit by an RQ or more. POTWs ere
 not required to report hazardous
 substances that are traveling through
 their collection systems in quantities
 that equal or exceed RQ* however, the
 industrial user is responsible for
 reporting such releases into the
 collection system.
   Sections 307(b)(l) and (c) of the CWA
 direct EPA to establish pratreatment
 standards "to prevent the discharge of
 any pollutant through treatment works
 * * * which are publicly owned which
 poDutant interferes with, passes
 through, or is otherwise incompatible
 wtth 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 nevigable waters untreated or
 inadequately treated. Pretreatment
 standards are intended to prevent those
 problems from occurring by requiring •
 nondomestic user* 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 mat industrial users comply with
 pntnetmcnt standards.
   In establishing the  national
 pratreatment program to achieve these
 pratreatment gosts. the Agency edopted
 e broad-based regulatory approach that
 implements the statutory prohibitions
 against pass through and interference et
 two basic levels. The first is through the
 promulgation of national categorical
 standards that apply to certain
 industrisl 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 type*
and amounts of pollutant discharges
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 (a^. the type of
treatment process usedby the POTW.
local water quality. POTW* choeea
method for handling sludge), •*"* thus
needs to be eddressed oa e case-by»|
         MfcMMCM M • TOTW.
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 paaa
through and interference even for the
regulated pollutants. EPA's General
Pratreatment Regulations (40 CFR Pert
403) address these areas of concern.
Pint 40 CFR 403J(b) establishes
specific prohibitions that apply to all
nondomestic users and an designed to
guard against common types of pollutant
discharges that may result in
interference and pass through (e&. no
discharge of flammable, explosive, or
corrosive pollutant*). Second. 40 CFR
403J(a) establishes a general
prohibition egainst pass through end
interference that serves as a backup
standard to address localized problems
that occur, in addition. POTW* must
develop end enforce specific local limits
as part of their local pretreatment
programs to prevent pess through end
interference. POTW* not required to
develop pretreatment program* also
must develop  local limits if they neve
recurring pass through and interference
(see 40 CFR 403-S{c)).
  The pretreatment stendards a POTW
user must meet to claim the federally
permitted release exemption include
both applicable national categorical
standards and standards estsblished by
local law as described below.
Compliance only wtth the general and
specific prohibitions (40 CFR 403J(a)
and (b)) of the general pretreatment
regulations to insufficient to qualify a
release es federally permitted.
  Only local limits applicable to the
pollutant, developed in accordance with
40 CFR 403 J(c), end designed to
implement the general prohibition
egainst interference end pess through
(I 403J(a)), can qualify the release of
such pollutant as a federally permitted

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2727B          Federal RggtoUrr / VoL 53. No. 138  / Tuesday. July 19.  1988 / Propped Rules


release
  Tease. The development of local Umlu
 under 40 CFR 403.3(c) involves three
 basic steps. Pint • POTW mutt
 determine which, if toy. of the
 poilutiou discharged by it* industrial
 uMn have a reasonable potential to
 pass through or interfere with the
 POTW. For each of the pollutants the
 POTW conclude* may be of concern, the
 POTW most then determine the
 maximum amount of the pollutant it can
 accept (maximum headwords loading)
 and still prevent the occurrence of paas
 through or interference. Finally, after
 maximum allowable headwords
 loadings are determined for each of the
 pollutant* 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 mat 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.
 4 discharge of a pollutant by an
  'ustrial user in compliance with a
  jtl limit not designed using these
procedures 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 pretnatment
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. otJm whkh then 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 i 403J3(c)). or
 *>.) a State, in lieu of the municipality, is
  aplementing a pretnatment program
for that POTW pursuant to 40 CFR
403.10(e).
  Section 101(10)01 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 an authorized
 under a pretnatment program (S. Rep.
 No, M& «th Cong. 2nd Saw. 48 (I960)).
 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 me 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 approval.authority has
 determined is consistent with the
 federally mandated "*'•'•»"•« standard.
  An approved program may be (1)
 designed and implemented locally by a
 POTW and approved by either EPA or
 an EPA-approved State pretnatment
 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 Slate pretreatment program.
 The approved State has primary	
 responsibility for requiring local POTWs
 to develop and implement a
 pntnatmaot program to regulate users
 directly. The fact that a State
 pretnatment 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 pntreatmont 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 pretreatmant
 program is necessary (except for a State
 administered 1403.lO(e) program-as
 described below).
  Section 4Q3.lO(e) allows the Slate in
 lieu of the POTW to assume
 responsibility for developing and
 implementing POTW pretreatment
 program requirements. Because the
1403.10(e) program mast meet the same
standard as would be required for
pretnatment programs developed by a
municipality (| 403J(f)). EPA believes
that the 1403.10(e) programs are the
State pretnatment programs Congress
intended to include under section
101(10)0).
  IB the event that a State's 1403.10(e)
program does not extend to all its
POTWs. only those releases to POTWs
for which the State has implemented the
pretnattnent program pursuant to
140».10(e) would qualify as federally
permitted. If a POTW is not regulated
directiy by its State NPDES program, the
POTW nevertheless must Implement an
approved local pntnatment 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 pntnatment standards and  •
local limits developed in accordance
with 40 CFR 40X5(c). and (2) into a
POTW with an approved local
pretnatment program or a 40 CFR
403.10(e) State administered local
program.
  One of the commenters  on the May CS,
1983 NPRM stated that discharges into a
POTW are transfer* between facilities.
not "into the environment" and
therefore all discharges into POTWs
should be exempt from CERCLA
reporting. The commenter's approach to
defining "into the environment" is not
consistent with the spproach in today's
proposal. To determine whether its
release is federally permitted, therefore.
an industrial user should measure 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
source* should measure the discharge at
the point it is released into the POTW.
which will be at the haadworks in most
cases. Industrial users an not required
under CERCLA to conduct monitoring
activities different from those required
by the applicable pntnatment program.
  Rtleous o/Source. Byproduct, or
Spec/a/ Nudtar Mattrial.
Radionudidas (which include source.
byproduct and special nuclear material)
an listed generically under section 112
of the CAA and an therefore considered
hazardous substances under CERCLA.
CERCLA section 101(22)(CV however.
excludes tram the definition of "release"
the discharge oft
sourea. byproduct or special nuclear material
from • nuclei: incident •> those term* are

-------
                 Federal ReguUr / VoL S3. No. 138  /  Tuesday.  July  19. 1988  /  Proposed Rules
 daflaed la Ifat Atomic EMf|jr Act of 1M4. tf
 tocfa reieaae is subject to requiresMnts with
 respect to financial protection established by
 me Nociear RffuUtory Onuninion under
 •action 170 of nch Act or. for tht purpotn
 of section 1M of this title or any other
 rvspooae action, iny rateest of touree.
 byproduct, or (pedal ndev material from
 •ny proonaing site designated under MOMO
 102UMD or XBU) of i&a.Unaiun Mill    .
 Tailing* Radiation Control Act of 197S
 (UMTRCA)  * *'.
—It thould be noted that releases of
 source, byproduct or special nodear
 material from processing sites
 designated under section I02(a)(1) or
 section 302/a) UMTRCA are exempted
 from CERCLA response action
 provisions but not from reporting
 requirements under CERCLA section
 103.
   CERCLA section 101(10)(K1 includes
 within the definition of federally
 permitted release, releases of source.
 byproduct, or special nudear material
 that comply with the conditions of a
 legally enforceable license, permit
 regulation, or order issued pursuant to
 the Atomic Energy Act (AEA).
 Therefore, releases of source, byproduct
 or spedal nudear material that exceed
 the licensed or permitted levels by an
 RQ or more, and that are not exduded
 by section 101(22). must be reported
 immediately to the National Response
 Center.
   Under the AEA. the Nudear
 Regulatory Commission is responsible
 for issuing licenses for the possession
 and use of source, byproduct and
 special nuclear material. States that
 have entered into an agreement with the
 Nuclear Regulatory Commission (i.e.
 Agreement States) are also authorized
 under the AEA to issue licenses for the
 possession and use of source.
 byproduct or special nuclear material.
 Releases of source, byproduct or special
 nudear material in compliance with
 licenses issued by the Nuclear
 Regulatory Commission or Agreement
 States are federally permitted releases
 under CERCLA section 101(10)(K).
   The regulations of the Nuclear
 Regulatory Commissioa contain several
 important exemptions from their
 provisions, some of which are based on
 the small quantities of material involved
 or the low levels of radioactivity the
 materials emit. The Nudear Regulatory
 Commission has developed "exempted
 quantities" for purposes of identifying
 facilities that are not subject to
 Commission licensing requirements.
 These quantities are smaller than the
 radionudide RQ* and. therefore.
 releases from these fedlities will not be
 reported under CERCLA. Nevertheless.
 these releases are not federally
 permitted under CERCLA and therefore,
 these facilities art subject to the
 CERCLA section 107 liability provisions.
   Some releases of source, byproduct
 and special nudear material may
 comply with licenses, permits, orders, or
 regulations issued under the AEA
 through provisions administered not by
 the Commission or its Agreement States.
 but-by DOE, the Department of Defense.
 or EPA. For example. DOE governs its
 radiation protection activities under the
 AEA by e series of internal orders.
 When such orders are issued under
 DOE'S AEA authority and releases of
 source, byproduct or special nudear
 material are in compliance with the
 applicable orderfs). these releases are
 federally permitted under section
 101(10)OQ.» The Department of Defense
 issues regulations under dae AEA
 governing weapon* and reactors within
 its jurisdiction, and EPA issues
 regulations under the AEA for certain
 operations involving radioactive
 material (e.g., 40 CFR Parts 190,101. and
 192). Releases of source, byproduct or
 spedal nudear material In compliance
 with mese regulations are also federally
 permitted under section 101(10)(K). Any
 release that is an RQ or more above
 federally permitted levels, however,
 would be subject to the CERCLA
notification requirements.
   Further darification is needed
 regarding the applicability of the
 definition of federally permitted releases
 to e fourth category of radioactive
 material called naturally occurring and
 accelerator-produced radioactive
 material (NARM). The AEA gives DOE
 broad authority to control its radiation-
 related activities and to protect public
 health and safety and the environment
 This authority applies to activities
 involving NARM. as well as activities
 involving source, byproduct and special
 nudear material CERCLA section
 101(10)(K) refers, however, only to
 releases of source, byproduct and
 spedal nudear material. Thus, it
 provides no basis for exempting DOE'S
 NARM releases bom CERCLA's
 reporting and liability provisions.
 Furthermore, the AEA currently does
 not give authority to the Nuclear
 Regulatory Commission to license
 NARM. only source, byproduct and
                      •ttd by Mimaet
 Into ooamctf mund tato with Mue*n tad
 own ton of DOC fadlitM* (••• 4S CFIl 97UJOV1
 inco^ofvtiofi uno biadMa.
 at tte DOC ordtn I
 •ad opwton of DOC hcilltMi «nd «• •nferaMbto
 by DOE on tht but* of UN boUty MMtraMt tad
 opmtiM enurvcts.
 spedal nudear material Although
 Agreement States may regulate NARM.
 this regulatory authority is not federally
 derived. Therefore, releases of NARM
 are not considered federally permitted
 under section lOl(lOHK). Certain NARM
 releases are. however, considered
 federally permitted under other
 CERCLA sections. For example, air
 releases of NARM that are in
 compliance with NESHAPs are federally
• permitted under section 101(10)(H).
   In making this finding with respect to
 NARM end the definition of federally
 permitted releases in section 101(10)(K).
 the Agency wishes to differentiate
 between NARM, source material and
 byproduct material Both source and
 byproduct material are defined under
 the AEA to indude certain naturally
 occurring radionudides.  Specifically.
 source material is natural uranium.
 natural thorium, or ores that contain OJJS
 percent or more (by weight) of aataral
 uranium or thorium. Byproduct material
 is defined to indude naturally occurring
 decay products of uranium or thorium
 when those decay products are
 associated with mill tailings. The
 exdusion of NARM from the definition
 of federally permitted releases under
 section 101(10)(K) applies only to those
 naturally occurring radionudides that
 do not qualify as either source or
 byproduct material For example.
 naturally occurring radium used in
 medical and  well logging devices does
 not meet the definition of source or
 byproduct material and.  therefore.
 releases of radium from these devices
 does not qualify for the reporting .
 exemption under section 101(10)(K).
   All of the commenters on the
 radionudides. exemption felt that a
 broader exemption is warranted. Some
 commenters  suggested that reports of
 releases currently required by the •
 Nudear Regulatory Commission are
 sufficient and comprehensive because
 they enable the Commission to
 determine the need for and the
 adequacy of response. These
 commenters  felt that any additional
 reports to  the National Response Center
 would be an unnecessary burden. EPA.
 expects that  most releases involving
 radionudides will be exduded from the
 definition of release, will be federally
 permitted, or will involve a quantity.
 smaller than the RQ. (The Agency
 published a rale that proposed RQs for
 radionudides on March  IB. 1987 in 52 FR
 8172: these RQs are being revised end
 the Agency expects to publish final RQs
 for radionudides in 1968.) EPA believes,
 however, that the reporting
 requirements imposed on the remaining
 releases of radionudides. including

-------
 27276
F«d«r«l  Register / VoL S3. No.  138 / Tuesday. July 19. 1B88  /  Propped Rules
 releases not subject to or in compliance
 with applicable permit*, regulations, or
 order*, are essential to mitigate the risk
 to public health or welfare or the
 environment posed by such release*.

 m. Notification for Certain Types of
 ReJeases

 A. InCvanl
  Thii section addresses several
 recurring questions not related
 specifically to the definition of
 "federally permitted release" but that
 arise uadar the CERCLA section 103(a]
 reporting requirements. One such
 question involves releases to engineered
 structure* 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 commects en the
 following issues.
  In the preamble to the April 4.1985
 final rule adjusting RQs for 940 CERCLA
 haxardous substance. EPA stated:
  Haardov* cnbtunon may be reieated
"Into ttat environment" tvta if U»y remain
oa plant or installation grounds. Example* of
such feleaan an ipilli froo leaks or velvet
onto concrete pad* or into dltche* open to the
ouuid* aid. reieuet tnm pipe* Into open
lagoons or pond*, or toy other discharge*
th*t tm not wholly contained within
building* or structure*. Such • reiea**. if it
occur* in a reportabte quantity (e.g.
evaporation ol «n RQ into the air from a dike
or concrete pad), oust be reported under
CERCLA. On the other bazd, hatardou*
•ubtunce* may be spilled at a plant or
installation but not enter the envrror.asnt.
e.g.. wfcrn the *ub*tanc* tpillf onto the
concrete finer of an enclosed manufacturing
plant. SucS a iptU would naed to bt reponad
only (I th* *ub*tancm wm in MIM way to
laav* the building or nructure in a raporuble
qeaatity. (Note, however, that the federal
government may (till respond and recover
eoati where there is s mieaisned i*lea«e into
the environment) 90 FR1MU.

  In applying the phraa* "into iae
environment" to releases to secondary
containment devices. EPA believes thul
a 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 problem aad an
existing serious situation have been
brought to the Agency's attention. These
include u releass 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
                       fuoctianiag 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 structure* 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 u releases onto
                       concrete pads, secondary containment
                       devices with sealed Doors around
                       storage unks. or drip pans used, to catch
                       minor hose or Una drainage.
                         The Agency is interested in receiving
                       comments and data 
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                 Federal Register /  Vol.  53. No.  138 /  Tuesday.  July  19. 1988  /  Proposed  Rules
                                                                                                          27279
 pratreatment program (see discussion
 undtr Section IH of today's preamble).
 All indirect dischargers, ie- both mobile
 and stationary sources, are subject to
 the same requirements for their
 discharge* 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 pretreatment standards
 (under CWA section 307). Indirect
 dischargers are not addressed under
 1117.13. 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
4OT-S(c) and is into a POTW with an
 approved local pretreatment 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:
                             lyof
  (1) An Mutual •(Ttct 00, the <
tlOO million or more: or
  (2) A major increase to oostt or prices for
consumers. Individual Industries. Federal
States, or local government agencies, or
geographic regions: or
  (3) Significant advene effect* on
competition, employment, investment.
productivity, innovation, or on the 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 adverse 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.O.12291.
& Regulatory Flexibility Act
  The Regulatory Flexibility Act of I960
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 Management and
Budget under section 3304(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
40 CFR Pan 302
  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.
40 CFR Part 3S5
   Chemical accident prevention.
Chemical emergency preparedness.
Chemicals. Community emergency
response plan. Community right-to-
know. Contingency planning. Extremely
hazardous substances. Hazardous
substances. Reportable quantity.
Reporting and fecordkeeping
requirements. Threshold planning
quantity.
  Dated: July U. 1968.
UoMTbooas,
Adminittntof.
   For the reasons set  out in the premble.
it is proposed to amend Title 40 of the
Code of Federal Regulations as follows:
                                                                             PART 11T--OCTERMMUTIOW OF
                                                                             REPORTABl£ OUAKTTTIES FOR
                                                                             HAZARDOUS SUBSTANCES

                                                                               1. The authority citation for Pan 117 is
                                                                             revised to read as follows:
                                                                               Authority: U U.S.C. 1321 aad 1381.

                                                                               2. Section 117.12 is revised to read as
                                                                             follows:
  (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 ACL and subject to a condition in
such, permit or
  (3) Continuous or utiaipsikad
intermittent discharges from a point
source, identified in a  permit or permit
application under seetJcn-%02 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 with
a permit issued under  section 402 of the
Clean Water Act" if the permit contains
an effluent limitation specifically
applies bale 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 pan of the public record
with respect to '» permit  issued or
modified under section 402 of the Clean
Water Act. and subject to a condition in
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
  (iii) 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 normal
discharge and that is additionally
capable of treatiaf^he identified amount
of the identified substance: or

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 27280
Federal Regular / Vol 53.  No. 138  /  Tuesday.  July  19. 1988 / Proposed Rules
   (Q Any combination of the above
 and
   (2) Tht permit oonuias a requirement
 that the substance* aad the amounts of
 the substances, as identified in
 |117.lZ(c)(l)(i} and |HM2(c)(1Mii). be
 treated punuant to 1117.i2(c)(lj(iii) in
 the event of an on-site release; and
   (3f The treatment to be provided is in
 place.
   (d} 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 ACL"
 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 it
   (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:
 aad
  (2) The- discharge of the hazardous
 suoetance results front
   01 The contamination of noncontact
•icoohng water or storm weter. provided
that such cooling weter or storm water
 a not contaminated by an onsrte spill of
 a 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 e process producing a
 continuous or anticipated intermittent
 discharge where the upset or failure
 results from a control problem, a  system
 failure or malfunction, an equipment or
 system startup or shutdown, an
 equipment wash, or a production
 schedule change, provided that such
 upaeior failure, is not caused by an on-
 site spiQ of a hazardous substance
  3. Section 117.13 is revised to read aa
 follows:
 I tir.u
   (a) These regulation* apply to atf
 discharges of reportable quantities to a
 POTW. where the discharge orlginatt*
 from stationary industrial users, so long
 as the discharge is;
   (1) In compliance with applicable
 categorical pretreetmeat standards aad
 local Umfts developed in accordance
 with 40 CFR403J(ctr and
   (2) Into a POTW with an approved
 local pretreatment program or a 40 CFR
 403.lO(e) State administered local
 program*
   (b) These regulations apply to all
 discharges of reportable quantities to a
 POTW. where the. discharge originates
                       from a mobile source, so long as the
                       mobile source can show that
                         (1) Prior to accepting the substance
                       from an industrial discharger, the
                       substance being discharged was. in
                       compliance with applicable categorical
                       pretreatment standards aad local limits
                       developed in accordance with 40 CFR
                       40&S(c): and
                         (2) The  substance is being discharged
                       Into a POTW with aa approved local
                       pretreatment program or a 40 CFR
                       403.10(t) State administered local
                       PART 903— DESIGNATION.
                       REPOftTABUE QUANTITIES, AND
                       NOTIFICATION

                        4. The authority citation for Part 302 is
                       revised to read as follows:
                        Authority: 42 V&C. 9002: » OSC 1321
                       aad 1381.
                        1 Section SOU is amended by adding.
                       in alphabetical order the definition
                       •federally permitted release" aad by
                       revising the introductory text of the
                       definition "release" to reed as follows:
                        "Federally permitted release" means
                        (1) a discharge in compliance with a
                      permit under section 402 of the Clean
                      Water Act
                        (2) A discharge resulting from
                      circumstances, identified and reviewed
                      aad made a part of the public record
                      with respect to a permit issued or
                      modified under section 402 of the Clean
                      Water Act aad subject to a condition in
                      such permit
                        (3) A continuous or anticipated
                      Intennittent 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 at treatment systems:
                        (4) A discharge la cempflaac* with a
                      legally enforceable Federal or State.
                      individual or general peratt ander
                      section 40* of the desa Water Act
                        (5) A, release incompliance with a
                      legally enforceable Federal or State final
                      permit ittuftti p>fmf*
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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" means aay spilling, leaking.
 pumping, pouring, 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
  6, Section 302.6 is amended by adding
new paragraphs (e) and (f) as follows:
 PAITT US— CMERGENCY PLANNING
 AND
  (e) Whenever a release of a hazardous
substance exceeds its federally
permitted level as defined under 8 302J
("federally permitted release") by a
reponable quantity or more, notification
shall be made for such release in
accordance with the requirements of
this section or. if applicable. \ 3024.
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 reportable quantity must be
reported to the National Response
Center in accordance with this section
or. if applicable. 5 302.8.
  (f) Notification is not required for the
disposal of polychlorinated biphenyl
(PCS) approved by EPA and in .
substantial compliance with the
applicable Toxic Substance Control Act
(TSCA) regulations. 40 CFR Pan 761.
and approval conditions.
  7. Section 302.7 is amended by
revising paragraph (aj"(3) to read as
follows:

{302.7 Penaffiee.
  (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  all of the sanctions.
including criminal penalties, set forth in
section 103(b)  of the Act
   8. The authority citation for Part 3S5 is
 revised to read as follows:
   Authority: 42 U.S.C 11002 and 11040.
   9. Section 355.40 is amended by
 revising paragraph (a) to read as
 follows:
 118140  EmergencyfeteaeencWIcaBoiL
   (a) Applicability, (l) 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 s "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 ACL 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(a) 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 a 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 (end not
disapproved by the Administrator)
pursuant to Part C of the Safe Drinking
Water Ace
  (H) Any emission of a substance into
tile 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,
Tide 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 an brought to the surface in
conjunction with the production of crude
oil or natural gas and which an
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) tfnd
into a POTW with an approved
pretreatment program or a 40 CFR
403.10(e) State administered local
program: and
  (K) Any nlease of source, special
nuclear, or byproduct material as those
terms an defined in die Atomic Energy
Act of 1954. in compliance with a legally
enforceable license, permit regulation.
or order issued pursuant to the Atomic
Energy Act of 1954.
  (iii) Federally permitted releases do
not include nleases exempt from
regulation under the authority of one of
the dted 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 thet covered in
the applicable permit license.
regulation, order, standard, or program.
•     t    •    •    •
(FR Dot 88-16102 Filed 7-18-88: 8:45 »m|

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* A  \        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
      "f                   WASHINGTON. D.C.  20460
                                                                Of
                          JUL 2 9 1988                SOLID WASTE 4NO
                                              OSWER Directive No. 9832.13

MEMORANDUM

SUBJECT:   Transmittal  of the  Suaerfund Cost Recovery Strategy

FROM:   /   J. Winston Porter  J/
       c*tf^ Assistant  Administrator/

TO:        Regional Administrators,'Regions I-X

     Attached  is  the final  Suoerfund 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, Haste  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
        Region* 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
                  COST RECOVERY STRATEGY
Office of Solid Waste and Emergency Response
    U.S. Environmental Protection Agency

                July 29,  1988

-------
                          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.  Cost 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 EPA 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
                                         4T
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  retains responsibility for pursuing recovery
of Federal funds expended.

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                                      OSWER Directive No.  9832.13
Part I.  Prooiaa 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 from 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:  1) maximize return of revenue to the Fund; 2) initiate
     2/  Section 107 provides generally that past and present
owners 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, en 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 time 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

     Since 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 1122(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
                                         9
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 Department 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 remedials
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
                                         9
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 well as settlements for cost recovery.

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                                     OSWER Directive No.  9832.13
 Part II.  Case Selection Cuidelincs-
      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 sites 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 arc viable PRPs.  The action
 should b« filed no later than the initiation of physical on-site
 construction of the remedial action.  (Note that in order to meet
 this 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 th* 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 veil
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 site*.  Pre-SARA cases in the second category that  are
     6/  For example, a Region may desire to delay the  initiation
of a cost recovery case until after  evaluation of  the success  of
implementation of an unproven remedial  technology.

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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
site 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 ACTIQflg

     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 Parts  III and  IV, the terms "Agency" and
"Regions" 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 muct ensure that activities identified in Parts
III and 17 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.

     ®/  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 nay 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 be 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 tasks, as appropriate:  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(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
               »
may 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 well 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 Action* (OSWER Directive No. 9833.3).
A.3.  Notice. Negotiations and the Issuance of, Administrative
orders.  Notice, negotiations, and the issuance of administrative
orders are activities that should be conducted to obtain an
     V  Where the removal exceeds two hundred thousand dollars,
the property is marketable and of value and  it nay 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  Superfund 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  froa 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'B oversight coats, 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 track
receipt of the oversight costs.  The Office of Waste Programs
     10/  CERCLA 1104(a),  as amended,  requires reimbursement for
oversight costs  for the RI/FS.   See Part IV,  page 30.
                                  16

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                                      OSWEP Directive No. 9832.13


Enforcement is developing further guidance on collection of
               y
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
     11/  See the Issuance of Administrative Orders for Immediate
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 removal 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 cause, 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
               t
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, lAC'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 SODS instances, the EPA conducts  initial site
stabilization work and then negotiates with PRPs  for them to
conduct the remainder of the removal action under a consent
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 Directive 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 effort* at cost recovery.
C.I.  Evaluation and Completion ef 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 lees 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 Documenting Costs for CERCLA 1107 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.  rv«Mnd tattera.  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 under the
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 liaited period of tine.  The tine 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
                                         9
CCRCLA.   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 Caaes. August 14,  1987,
issued by the Office of the Administrator.
     In those case* 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 formalired in an administrative document or a judicial
consent decree. The Region may 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,
                                         
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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 as well as to those sites for which negotiations
occurred but were unsuccessful.  The Region should have gathered
                      • -
all the information necessary to decide the final disposition of
     19/  CZRCLA section  122(h)(3), Recovery of Claims, states
"If any person fails to pay a claim that has been settled under
this subsection, the department or agency head shall request the
Attorney General to bring a civil action in an appropriate
district court to recover the amount  of such claim, plus costs,
attorneys' fees, and interest from the date of settlement.  In
such actions, the terms of the  settlement shall not be  subject to
review."
                                  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)  other 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  on  Documenting Decisions  not to Take
Cost Recovery Actions.  (OSWER  Directive  No.  9832.11).
                       .           26

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                                      OSWER Directive No.  9832.13
     These elements are discussed in Cost Recovery Actions under
               f
the Comprehensive Environmental Response. Compensation, and
Liability Act of 1980. (OSWER Directive No. 9832.1) and
Procedures for Documenting Costs for CERCLA 8107 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.
     j
     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 10 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.a.. 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

     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 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)  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


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

elements in the remedial cost recovery process and the timing of

each of the 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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                                      OSWZR Directive No. 9832.13


nay 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  CERCLA section 113(g)(2).

                                  29

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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(e)
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  If possible, the PRP search should be completed prior
to the initiation of the RI/FS.  In some instances, completion of
     2*/  CERCLA  |122(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
A.  Pre-R
-------
                                      OSWER Directive No. 9832.13
A.3.  settlement fpr PRP Remedial Investigation/Feasibility
               r
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 CERCIA will not
be necessary.  Of course, if the settling PRPs agree to  pay all
                                  34

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                                      OSWER Directive No. 9832.13

all PRP search activities prior to the initiation of the Rl/FS
               ».
will not be possible.  For example, it may be necessary to
undertake an RI 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

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 PRPs 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 then 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
past costs, a claim is not being compromised and DOJ's prior
               f
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 Purina 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 its 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
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 menoranduic
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 5106(a) orders to
recalcitrant parties in order to encourage PRP response and set
up claims for treble damages a'nd 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 coapliance is not forthcoming, immediately
thereafter (taking into account whether there is a funded RO)
    *
refer the case for injunctive relief and past costs  (combined
CERCLA f|106/107 judicial actions).  The cost documentation must
be completed by the tine of the referral to  support  the  section
     27/ See footnote  15, page  20.
                                  40

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                                      OSWER Directive NO.  9832.13
action under CERCLA.  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 PRPs, the ten point analysis justifying the
     26/ Of course, this should take  into  account accrual  of a
cause of action.
                                  39

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                                      OSWER Directive No. 9832.13
procedures.   (See Administrative Records for Decisions on
               t
Selection of CERCLA 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 CERCLA 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

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
                                         r
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 CERCLA limits 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

Officer must be provided with a copy of the consent decree so
               r
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 coat 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 cost* 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

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                                      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.  Cost Recovery Activities during the Remedial Design and
     Remedial Action
     By the tine 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, ccst 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.I.  PRP RD/RA.  Cost 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 pact .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 costs  should be
sent according to the  schedule set forth in  the consent  decree
and tracked  in CERCLIS.   The Regional Financial Management
                                  41

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                                      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)  the release or threat of release caused the United
     State* to incur response costs.
     4)  the Defendant is in one of those categories of
     liable parties in CERCIA section 107(a).
     These elements are discussed in Cost Recovery Actions under
                                  44

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                                      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..
                                         9
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 same 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
          CERCIA 1107);
     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

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                                      OSWER Directive No. 9832.13
the Comprehensive Environmental Response. Compensation, and
Liability Act of 1980.  (OSWER Directive No. 9832.1) and
Procedures for Documenting Costs for CERCLA $107 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

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                                      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

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                                                    OSWER # 9834.4-A
        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON. D.C. 20460
                             25BB8
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, Reg-ions 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
    Frank Russo, Chief, Compliance Branch, Office of Waste
       Programs; Enforcement
    Robert J. Mason, Acting Chief, Guidance and Oversight
       Brancn, Office of Waste Programs Enforcement
    Lisa K. Friedman, Associate General counsel, Office of
       General 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
      t                 WASHINGTON, D.C. 20460
                              2 5 1968
                                                      COMPllANTk MONITORING
SUBJECT:


FROM:


TO:
           Guidance on Use and Enforcement of CERCLA
           Information Requests and Administrative Subpoenas
Thomas L. Adams, Jr.
Assistant
                                               yg^ _____
           Regional Administrators, Regions I - X
           Regional Counsel, Regions I - X
           Directors, Waste Management Divisions, Regions I - X
I. INTRQDUCTTQM

     Tne 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 wide range of entities 1.  Section I04(e), entitled

"Information Gathering and Access,* grants EPA the authority to

issue "information requests."  Section I22(e)(3)(B), entitled,

•Collection of Information,11 authorizes the use of

administrative subpoena.  These information-gathering tools and

enforcement povers 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 OH 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 INVESTICAT7V£
    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
    l. Initial Steps	 16
    2. Administrative Orders to compel Compliance 	 17
    3. Civil Action* to Compel Compliance	 18
    4. Scop* of Judicial Review	 20
    5. Penalties	 21
 B. Subpoenas	•	  23
    1. Jurisdiction  and Venue	  23
    2. Procedures for Enforcing Subpoenas	  24
 c. Referrals	  25
VIII. DISCLAIMER	26

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                                     2
 ability  to obtain  inf6rmation.  A  full exercise of these
 authorities,  including taJcing 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 unfer CERCLA ssi04(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(e)(5),
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
purposed.  However, in appropriate circumstances where RCRA
 information gathering authorities are applicable, Regions may
     2      Tnis 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 S104(e).
     3      CERCLA Sl09(a)(5), as amended, also authorizes EPA
            to v'* a*1mini3trative 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 S3007 since RCRA provides the option of
enforcement in a proceeding before an administrative lav judge.4
    The administrative subpoena authority in CERCLA $122 is new
to CERCLA.  However, it is rimilar to the authority contained in
Sll(c) of the Toxic Substan.es Control Act (TSCA) , J5 U.S.C.
26lO(c). 5
 B. ^djpjjni strati ve 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," am, September 10, 1984.
     5      The use of TSCA $11 (c). subpoena auUiority was
            recently upheld by Uie Ninth Circuit in SPA v-
Alveslca Pipeline Serv. 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. 6

     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 ra Stanley Plating Co..
Ine. . 637 F. Supp. 71 (D. Conn. 1986), United States v. Browning
- Ferris ffiifimieal Services, at. a.1. . No. 87-317-B '(M.O. 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 b« poMibl* 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,  sec.
Petition of Garv Conatr.. Inc.. 96 F.R.D. 432, 433  (D.Colo.
1983), *ah v. Cort. 512 F. 2d 909. 911-913 (3d Cir. 1975), In re
Boland. 79 F.R.D. 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   . civil 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 P. A.  v.  MortLon  Sa.lt  Co. .  338  U.S.  632,  642-643  (1950),

 the  SupreiM 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 Sut 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. Belie reureha Pinaiine CQ. v. U.S..
751 F.2d 332, 334 (10th Cir. 1984), Citing Reiaman v. Canlin.
375 U.S. 440, 84 S.Ct. 508, 11 L.Ed.2d 459  (1964).

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     1. WitHin 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 GATHERING TOOLS
     On January 23, 19P7, the President signed Executive Order
12580 delegating information-gathering authority in 55 104(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 sub{. inas
is limited by the requirement that they first consult with the
Assistant Administrator for Enforcement and Compliance
     9      S««, a.a.. F.T.C. v. Texaeo. 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, tne

Assistant Administrator for Enforcement ar.d compliance

Monitoring redelegated his consultation autnority under

Delegation 14-6 to the Associate Enforcement Counsel for Waste.

IV.  SCOPE AND TIMING OF INFORMATION GATHERTMft PROCEDURES

 A.   Information Requests

     The scope of investigation authorized by CERCLA si04(e)

is broad.  CERCLA $104(e)(2), as amended by SARA, provides:

        Any [duly authorized] officer, employee, or represen-
        tative [of the President]...  may require anv person
        who haa 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.te<-, f 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 taxing any res^nse action
        under this title, or otherwise enforcing tne
        provisit— 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 S104(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, 1A 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
         booJcs;
         -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;
         -vture financial viability is or will be at issue, and
         tlM Xg«ncy 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 Fed. Reg.
5298 (Feb. 23, 1988).

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         data, 12 information relating to ability to pay for or
         perform a cleanup; 13,

    vmere 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,
at sea.-, 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 CZRCLA  $l04(e)(2)(c), EPA now has explicit
            authority to  request informatior relating to the
ability of a person to pay for or perform a cleanup.  Before it
was amended, CERCLA 5104  authorized EPA simply to obtain
"information relating to  [hazardous] substances."  EPA typically
construed tnis language to include all information that EPA
considered, relevant to.- ?ny aspect of enforcement.  In n.s. v.
Char lea Gmoram Tmgltina Co. . 624 F. Supp. 1185  (D. Mass. ) , aff'd
on other grounds. 823 F.2d 685 (1st Gir. 1987), the court took
issue with EPA'3 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 $l04(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 vith 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 fever 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 as* 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 poi
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                                    11
 In the alternative, the  insured may always be given the option
 of providing copies of the policies themselves.  A similar.
 general request about 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 shO"M 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 date  should reasonably reflect the type and
volume of information that the agency anticipates will be
responsive to the request.  Thirty.days is usually adequate,  in
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 ?'  \lty.
An information request should also require the recipient to
indicate the types of files searched in response to the request,
and ask tn« recipient to submit an affidavit describing his
search effort* if the 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 quiclcly
                                                 (continued...)

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                                             OSVER DIRECTIVE * 9834. 4A

                                    12
      A model information request,  largely  developed  by Region  I,
 is  attached as  Attachment 1.
  B.  Admin
      Section  l22(e)(3)(B)  gives  EPA the power to  issue
 administrative  subpoenas  requiring the attendance and testimony
 of witnesses  (referred  to  as a subpoena ad tea- -.if jgandumi and
 the production  of documents  (referred to as a subpoena duces
 &g£UB) .  Such subpoenas may be issued as is "necessary and
 appropriate*  for performing a non-binding preliminary allocation
 of responsibility (NEAR)  "or for otherwise implementing" CERCLA
 Section 122.
    Since the language  of  $122 is broad and permits the use of
 administrative  subpoenas  "for otherwise implementing [Section
 122]," there  is no requirement that EPA first decide to prepare
 an NEAR 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 ha* begun  to implement the settlement process
under $122 (e.g. through  initiation of informal discussions or
     14 (...continued)
determine wnlch Information  requests  should be  followed up with
an enforcement action.
     15     Bonetheless, 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
$122(e)(3) and include: "volume  and toxicity  of wastes, strength
of the evidence, ability to  pay, litigative risks,  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 tc use
 the authority in $122(e)(3)(B).  In particular, it is important
 to be able to show how the subpoena's issuance either furthers
 the NBAR process or meets the criteria of "otherwise
 implementing this section."
    Although there is no statutory prohibition against doing so-,
 a subpoena generally should not be used in the first instance to
 gather information.  Rather, a $104(e) information request is
 the preferred method of obtaining information.
V. SERVICE OF TNFQRMM'TQN REQUESTS AND SUBPOENAS
     Information request letters are a formal means of obtaining
 information, and consequently should be served by registered or
certified mail, return receipt requested.  (Note that v   i
 serving any document by registered or certified mail, post
office box addresses should be avoided.)
     Service of a subpoena can be effectuated in a number of
ways depending upon the circumstances of the investigation.
Whenever possible, personal service is preferable, especially
when it is lJ><»ly that the subpoena may be ignored or
challenged.  When personal service is not practical, a subpoena
can be served by registered or certified mail, return receipt
 requested.  Regardless of the method  of service, the correct

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                                    14
person must 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 lav 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 DtJg PROCESS  CONSIDERATIONS IN INVESTIGATIVE
                PURSUANT TQ AN ADMINISTRATIVE SUBPOENA
 A.  Aqenev AfHudieationfl and Invcatioaticnfl 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 is> to adjudicate or to investigate.  Examples of EPA
adjudication include the issuance of compliance orders or the
ass-.snent of civil penalties under S3008(a) of RCBA.  Before
the Agency may issue a compliance order or assess civil
                  t
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  TJiese 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
 subjroena pursuant to  §122(e)(3)(B), its purpose is only to
 investigate 01 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 invoice
his Fifth Amendment privilege as to particular questions
presenting a threat of self-incrimination.  n.s. v. Mainiie. 489
F.2d 682, 685 (5th Cir. 1974).
 B.  Role of Witness* Counsel at Administrative S^hPfiflnfl
     Proceedings
    The practical effect of  the fact that witnesses have limited
procedural rights during information-gathering under an
administrative subpoena 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  si04(e)(5).  Due process is
assured under 5104(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  tne APA "varies  in meaning depending  upon

 the nature of  the function being  exercised." F.c.c. v.

 Sghreitaer. 329 T.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 tne 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,
          from  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. ENTORCFMinyp OF IMFQBMATIQM RgQUESTS AND SUBPQDJA3

 A.

    1.
    When tlM 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

Sl04(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 Sectic:i VII.A.4., "Scope
of Judicial Review," below.)  Whenever a recipient taxes
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. ^rtitHnisfcra^ive Orders to Compel Compliance
    Under CERCLA S104(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 b« a release or threat of  release of a hazardous substance
and a description of the purpose for which the information
request vms issued.  The order should state the date on which  it
becomes effective and also advise the respondeuc  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 to  Compel Complianeq

     Alternatively, or in the event that an administrative order

 does not lead to compliance,  EPA, through DOJ, can commence  a

 civil  action  under $104(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 inadequate response or  no response
     18       Normally, the consultation requirement win be
              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 win 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 tn« order.

     19     Section 104(e)(5)(B) states:

               The President may ask the Attorney General
               commence a civil action to compel compliance
               with a request ax order nferrea to in
               subparagraph (A).

EPA's ability to commence a civil action without first  issuing
an administrative order to compel compliance under $l04(e) was
upheld in U.S. v. Charles George Trucking Co.. No. 85-2463-WD
(1st Cir. March 31, 1988).  See also, U.S. v. Northside Sanitary
Landfill. Inc.. 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:
    (1)  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 taxing 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   ;o . to believe that an administrative order
will not bring immediate compliance, a civil action should be

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                                    20
 favored.   For  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.  SCQM  of  Judicial  Review
    In an  action  to enforce an information request or an
administrative order for compliance with an information request,
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

           . Ine. . 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, Die Government may argx»e 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 $104(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
once 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 Sl04(e* of CERCLA.  if discovery is
allowed at all in a given action, the Government's position is
that its scop* should be limited to addressing the parameters
for adminiatrativ* investigations noted on page 6.

     22       jt aay 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 or*
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 see* 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; aid 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 he eventually complies with the information request.  See
e.g. n.S. v. Liviola. 60S F. Supp. 96 (N.D. Ohio 1985), U.S. v.
CTuirlM S^oraa Tmglcina Co. . 823 F.2d 685  (1st Cir. 1987).
     2*     Tor an information request to b« enforceable,  it
          .  auftt conform to the basic parameters noted above on
page 6.  any issue of .the reasonableness of the information
request itself is subsumed by these parameters,  nus, once it
is determined that an information request is enforceable,  the
focus in terns of liability for penalties is limited to the
respondent's conduct.  The statute provides that a civil v»nalty
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 reasonam

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                                    23

any willfulness or negligence associated with the respondent's

actions. 25.

 B.  S ubpoenaa

    1. Jurisdiction and Venue

    If a respondent to an administrative subpoena refuses to

appear <-u 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 lire 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

Sll3(b).
     25     The decision to seek penalties should also  include
            consideration of the Supreme Court's recent decision
in full ». nni»«d at-»i-M. 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 cou»>.  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.  Be lie
FQurrhe Pinaltna Co. v. tl.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.  pyoeaAirea  for  ^p^Q^cino  fiutiP*3
     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.  bi(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     The court, in its discretion, may order discovery,
            but only where the defendant meets the "heavy burden
of shoving extreme circumstances that would  justify further
inquiry..." n.fl. v. Bra Patroleum. Inc. . 703 T.2d 528,  533
(Temp. Enterg. Ct. App.')iquoting n.s. v. Juren. 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 solely to serve purposes  outside
the purview of the jurisdiction of the  issuing agency." N.L.R.B.
v. Interstate Drags Carriers. 610 F.2d  99, 112  (3d Cir.  1979)
(emphasis added   -.it it ions omitted).  See also n.s. v.  MeGovern.
87 F.R.D. 590 (M.D. Pa. 1980), Lvnn v.  B^orman  536  F.2d  820,
825 (9th Cir..) cert, denied  sub nom. ^flPTT*," *- HiHa. 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 Referrals" 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  show 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 .  n
    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 ruleaaJcing by the Agency and may not be relied upon
to create a right or a benefit, substantive or procedural,
enforceable at lav 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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MODEL Information request                           Attachment
CERTIFIED MAIL [OR DHL]        [Note:. No certified or express
           RIPT pgfjflfSTTO              mail to P.O.Boxes]
[Date]

TPRP Name!
f PRP Address 1

Re:  Request for Information Pursuant to Section 104 of
     CERCLA [and Section 3007 of RCRA,] for FSite Name!
     in rsite location! 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
rsitie Namal in fsite 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 Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act
(CERCLA), 42 U.S.C. 5 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 Tinsert reasonable
       of AKVS to rggpond. spall out number find, put number in
           . •.a.. fcnirfcv (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(e) of CERCLA,
as amende*, [and/or Section 3008 of RCRA.]  [Each of these
statutes/ Tnla statute] permits EPA to seek the imposition of
penalties of up to twenty-five thousand dollars  i$25,000) for
each day of continued non-compliance.  Please be further advised
that provision of false, fictitious, or fraudulent statements or
representations -^y subject you to criminal penalties under  18
U.S.C. s 1001 or Section 3008(d) of RCRA.

  This Informaf -7 request is not subject to the approval
requirements of tne Paperwork Reduction Act of 1980,  44 U.S.C.
3501, et seq.

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                                                OSWER * 9834.10-la
             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON. O.C. 20460
                             «   „..«                       Q^'CEOF
                             2 6 :Gv9              SOUO W*STE AN° 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/IOS-500)
          Henry  L.  Longest II,  Director p\L
          Office of Emergency and Reaedial^Z&Ipbnse (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   speci.il notice
moratorium  should continue to be submitted in a  timel>  fashicn.
Special  notice information  must be  entered  into  CERCLXS  on  a
regular  basis.   OWPE 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 AGENCY
                               JUN 2 I 1991
 MEMORANDUM
 SUBJECT:

 FROM:
Model CERCLA RD/RA Consent Decr.ee
Raymond B. Ludwiszewskr
Acting Assistant Administrator f.
             >X*"™*\     ^xf

Don R. Clay  \^~^ / [
Assistant Administrator
   Response
                                              Enforcement
                                     r Solid Waste and Emergency
TO:
Richard B. Stewart  .'4.
Assistant Attorney General for the Environment and
   Natural Resources, U.S. Department of Justice

Regional Administrators
Regions I-X
      Attached is the interim final  Model CERCLA  RD/RA  Consent
Decree.   As  discussed below,  this document should  be used  as the
basis for fashioning remedial design/remedial action settlements
with  potentially responsible parties under Sections 106, 107 and
122 of the Comprehensive Environmental Response, Compensation,  and
Liability Act,  as amended.   The  Model Consent Decree provides
boiler-plate language for most provisions in order to  standardize
CERCLA consent  decrees as much as possible and expedite
settlements.  The United States  will commence negotiations with a
document  which,'for  most provisions, is the same document  the
government will  insist on in a settlement because  it reflects  legal
and procedural  terms that have been found acceptable to both the
Agency and the  PRPs  in a large number of situations.

      The  philosophy  underlying the Model Consent Decree is
consistent with  that espoused in the CERCLA Timeline prepared  as a
result of  the Superfund Management Review and in the Pre-Referral
Negotiations  Procedures for  Superfund Enforcement  Cases.  That
philosophy is to initiate and conclude RD/RA settlement
negctiations  as  expeditiously as possible and, ideally, within the
statutory  120-day special notice moratorium.  See  CERCLA Section
122(e)(2).   The  goal is to achieve a greater.number of settlements
in a  more  expeditious  manner,  on terms acceptable  to the United
States and consistent  with the intent of CERCLA, thereby permitting
more  remedial work to  proceed.   Use of the Model Consent Decree is
designed  to  reduce the time  and  resources consumed during extensive
RD/RA settlement discussions  by  reducing across the board the

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 number of issues the United States  will  negotiate with  the  PRPs.
 In  addition,  use of the Model will  reduce the amount of  time  spent
 on  internal government reviews of the  document and will  promote
 national consistency.

      In future RD/RA negotiations,  EPA Regional Offices  should
 provide the PRPs with a proposed consent decree, based  on the
 Model,  that reflects site-specific  considerations.1   The Office of
 Enforcement (OE)  and the Office of  Solid Waste and Emergency
 Response (OSWER)  will support efforts  by Regional Offices and the
 Department of Justice (DOJ)  to draft and negotiate settlement terms
 that  go beyond the Model's  provisions  in terms of protecting  the
 interests of  the United States.  The Regions should work with the
 Department of Justice and,  as appropriate, EPA Headquarters to
 craft site-specific language before sending the draft to the  PRPs.2
 When  the United States sends the consent decree to the PRPs,  the
 negotiation team should inform the  PRPs that many provisions  of the
 consent decree are nationally consistent boiler-plate provisions
 that  the United States does  not plan to negotiate.

      The Model Consent Decree does  riot include those provisions
 that  may be necessary  to handle the wide-range of special
 situations which may arise  in the context of structuring CERCLA
 settlements.   For example,  some settlements may require the
 inclusion of  a covenant not  to  sue  by the United States to de
 minimis defendants.   In addition, a trust fund or other PRP funding
 mechanism may be appropriate in cases  involving large numbers of
 PRPs.   The negotiation team  members should work with their
 respective managements to develop language for such provisions.  If
 the provision raises issues  of  national or precedential
 significance  or if the settlement would otherwise require
 concurrence by EPA Headquarters, the Region should consult with OE
 before  offering it to  or agreeing to it with the PRPs.
     1  For examples of provisions that must  be  modified in each
case, we direct your attention to the definition of "Site" and
Section VI  (Performance of the Work by the Settling Defendants).
The term "Site" must be carefully defined not only to take into
account the work to be performed at the Site but the scope of the
covenant not to sue that the United States typically provides the
Settling Defendants.  In addition, the section of the decree
detailing the "Work" must be tailored to take into account the type
of remedy that will be implemented at the Site.

     2  If  the state will  be  a party  to the consent  decree,  it is
critical for the United States' negotiation team to coordinate with
the state's representatives prior to commencement of negotiations
with the PRPs.

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      In addition, as previously noted,  while  the  presumptions  are
 that the Regions will use the Model as  the  basis  for  fashioning
 settlements and that auch of the document is  considered  to  be
 boiler-plate, Regions have the flexibility  to adopt a baseline
 approach to certain provisions that is  more stringent than  the
 Model.   Moreover, except as provided below  and consistent with
 current Agency delegations, the Regions may,  in conjunction with
 the Department of Justice,  modify provisions  of the Model in
 developing the proposed consent decree  in a particular case.

      With respect to those provisions of the  Model Consent  Decree
 that embody issues of national significance,  the  Regions must
 consult with Headquarters before offering or  agreeing to any
 changes that would result in a significant  deviation  from national
 policy.   The following provisions fall  into this  category:  Access,
 Contribution Protection,  Covenants,  Dispute Resolution, Force
 Majeure,  Additional Response Actions (Section  VII of  the Model
 Consent Decree),  Certification of Completion,  Stipulated Penalties
 (structure of the provision,  not the amount of  penalties),  and
 Indemnification.   The Department of  Justice and EPA Headquarters
 will respond to  the Region  as expeditiously as  possible in  order to
 insure  that negotiations  are not delayed.

      The  U.S.  EPA Periodic  Review provision also  involves issues of
 national  significance.  However,  in  recognition of the case-
 specific  evaluation that  must be performed  with respect to  the role
 and  importance of this  provision in  a given settlement, the Regions
 are  not required  to consult with Headquarters with respect  to
 changes in this provision.   Among the factors to be considered in
 determining whether to  include this  provision are the completeness
 and  reliability of  the  remedy,  the strengths and weaknesses of the
 liability  case against  the  defendants,  and  the scope  of the
 covenant not to sue that  is given to the defendants in the
 settlement.   The  Regions  should work closely with the Department of
 Justice in evaluating these factors  and determining the
 government's final  position in this  provision in a given
 settlement.

     The attached Model Consent Decree does not include a paragraph
 identifying the performance standards for the remedy.   However,
 these standards must  be identified in the ROD and the SOW and  those
documents  will be attached  to  the consent decree and  incorporated
 therein.   The  attorneys and technical staff on the negotiation team
 both must  focus on  those  documents to ensure that the standards are
clearly stated and  enforceable.

     Of course, processing  of  any  final settlements shall be in
accordance  with current Agency  delegations.   Nothing  in this
memorandum  should be  interpreted  as modifying the existing waivers
of Headquarters'  settlement  concurrence authorities that are
embodied in  the June  17,  1988  memorandum from the Assistant

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Administrators for the Office of Enforcement and Compliance
Monitoring and the Office of Solid Waste and Emergency Response.
Moreover, EPA Headquarters will continue its general policy of
referring any inquiries to Headquarters from PRPs or their counsel
regarding site-specific issues or negotiations back to the
appropriate Regional Office or the Department of Justice.

     The attached Model Consent Decree and the procedures for its
use outlined in this memo shall be applicable to all sites for
which special notice letters are issued or a proposed consent
decree is sent to the PRPs beginning 60 days after the date of this
memorandum.  For all other sites, the attached Model Consent Decree
is not applicable, and current negotiation positions and schedules
will not be affected by this Model.  In particular, the Agency will
not re-negotiate provisions in on-going or concluded negotiations
which were previously agreed to with PRPs or in decrees lodged but
not yet entered.

     If you have any questions regarding the Model Consent Decree,
please contact Sandra Connors in OE (382-3110) or Paul Connor in
OWPE (245-3656).

Attachment

cc:   Donald Elliot, General Counsel
      David Ryan, Comptroller
      Henry Longest, Director, Office of Emergency and Remedial
        Response
      Bruce M. Diamond, Director, Office of Waste Programs
        Enforcement
      Regional Counsel, Regions I-X
      Waste Management Division Directors, Regions I-X

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                                      OSWER Directive Number  9835.17
           UNITED  STATES  ENVIRONMENTAL PROTECTION AGENCY
                 MODEL CERCLA RD/RA CONSENT DECREE
This model and any internal procedures adopted for its implementation
and use  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
benefit, substantive or procedural,  enforceable at law or in equity,
by  any  person.   The Agency  may take action  at  variance  with this
model or its internal implementing procedures.

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I.



II.



III.



IV.



V.



VI.



VII.



VIII.



IX.



X.



XI.




XII.



XIII.



XIV.



XV.



XVI.



XVII.



XVIII.




XIX.



XX.



XXI.



XXII.



XXIII.



XXIV.
                       i   OSWER Directive Number 9835.17




               TABLE OF CONTENTS




       MODEL CERCLA RD/RA CONSENT DECREE




BACKGROUND  	




JURISDICTION   	




PARTIES BOUND  	




DEFINITIONS 	  ,




GENERAL PROVISIONS  	  ,




PERFORMANCE OF THF WORK BY SETTLING DEFENDANTS   . .  ,




ADDITIONAL RESPONSE ACTIONS 	 	




EP; ^ERIODIC REVIEW 	




QU.  .TY ASSURANCE. SAMPLING, and DATA ANALYSIS   . .  .
REPORTING REQUIREMENTS  	




SUBMISSIONS REQUIRING AGENCY APPROVAL 	




PROJECT COORDINATORS  	




ASSURANCE OF ABILITY TO COMPLETE WORK 	




CERTIFICATION OF COMPLETION 	




EMERGENCY RESPONSE  	




REIMBURSEMENT OF RESPONSE COSTS 	




INDEMNIFICATION AND INSURANCE 	




FORCE MAJEURE 	




PJTSPUTE RESOLUTION	




STIPULATED PENALTIES  	




COVENANTS NOT TO SUE BY PLAINTIFFS  	




COVENANTS BY SETTLING DEFENDANTS  	




EFFECT OF SETTLEMENT; CONTRIBUTION PROTECTION  .
 1




 4




 5




 6




11




14




21




23




24




26




28




31




33




35




36




39




41




44




47




50




54




58




63




64

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                                 ii   OSWER Directive Number 9835.17




XXV.  ftCCESS TO INFORMATION	65




XXVI.  RETENTION OF RECORDS	67




XXVII.  NOTICES AND SUBMISSIONS 	 	  69




XXVIII.  EFFECTIVE DATE 	  70




XXIX.  RETENTION OF JURISDICTION  	  70




XXX.  APPENDICES	71




XXXI.  COMMUNITY RELATIONS  	  71




XXXII.  MODIFICATION  	  71




XXXIII.  LODGING AND OPPORTUNITY FOR PUBLIC COMMENT 	  72




XXXIV.  SIGNATORIES/SERVICE 	  73

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MODEL CERCLA RD/RA CONSENT DECREE    OSWER Directive Number 9835.17
                IN THE UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF 	
                                   DIVISION
UNITED STATES OF AMERICA [and )
STATE OF 	]     )

          Plaintiffs,         )
                              )          CIVIL ACTION NO.
          v.                  )

	, INC.,   )
          Defendants.
                           CONSENT DECREE

                           I.   BACKGROUND

     A.  The United States of America ("United States"), on behalf

of the Administrator of the United States Environmental Protection

Agency ("EPA"), filed a complaint in this matter pursuant to

Sections 106 and 107 of the Comprehensive Environmental Response,

Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9606,

9607.

     B.  The United States in its complaint seeks, inter alia:

(1) reimbursement of costs incurred by EPA and the Department of

Justice for response actions at the 	 Superfund Site in

	, 	, together with accrued interest;

and (2) performance of studies and response work by the Defendants

at the Site consistent with the National Contingency Plan, 40

C.F.R. Part 300 (as amended) ("NCP").

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                               - 2 -    OSWER DIRECTIVE NO. 9835.17



     C.   In accordance with the NCP and Section l21(f)(i)(F)  of



CERCLA, 42 U.S.C. S 9621(f)(1)(F), EPA notified the State of



	 (the "State") on 	,  19	 of



negotiations with potentially responsible parties regarding the



implementation of the remedial design and remedial action for the



Site, and EPA has provided the State with an opportunity to



participate in such negotiations and be a party to this Consent



Decree.



     [D.  The State of	 (the "State") has also



filed a complaint against the defendants in this Court alleging



that the defendants are liable to the State under Section 107 of



CERCLA, 42 U.S.C. $ 9607,  and [list state laws cited in the State's



complaint], for:  	.]



     E.  In accordance with Section 122(j)(l) of CERCLA, 42 U.S.C.



§ 9622(j)(l), EPA notified the [relevant Federal natural resource



trustee(s)] on 	,  19	 of negotiations with potentially



responsible parties regarding the release of hazardous substances



that may have resulted in injury to the natural resources under



Federal trusteeship and encouraged the trustee(s) to participate in



the negotiation of this Consent Decree.



     F.  The Defendants that have entered into this Consent Decree



("Settling Defendants") do not admit any liability to the



Plaintiff[s] arising out of the transactions or occurrences alleged



in the complaint[s].



     G.  Pursuant to Section 105 of CERCLA, 42 U.S.C. S 9605,  EPA



placed the Site on the National Priorities List, set forth at 40

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                               - 3 -    OSWER DIRECTIVE NO. 9835.17
C.FiR. Part 300, Appendix B, by publication in the Federal Register
on 	, 19	, 	 Fed. Reg.	•
     H.  In response to a release or a substantial threat of a
release of a hazardous substance(s) at or from the Site, EPA [or
the Settling Defendants, other PRPs at the Site, or the State]
commenced on 	, 19	,  a Remedial Investigation and
Feasibility Study  ("RI/FS") for the Site pursuant to 40 C.F.R.
S 300.430;
     I.  EPA [or the Settling Defendants, other PRPs at the Site,
or the State] completed a Remedial Investigation ("RI") Report on
	, 	, 19	, and EPA [or the Settling Defendants, other
PRPs at the Site, or the State] completed [issued]  a Feasibility
Study ("FS") Report on 	, 19	;
     J.  Pursuant to Section 117 of CERCLA, 42 U.S.C. S 9617, EPA
published notice of the completion of the FS and of the proposed
plan for remedial action on 	, 19	, in a major
local newspaper of general circulation.  EPA provided an
opportunity for written and oral comments from the public on the
proposed plan for remedial action.  A copy of the transcript of the
public meeting is available to the public as part of the
administrative record upon which the Regional Administrator based
the selection of the response action.
     K.  The decision by EPA on the remedial action to be
implemented at the Site is embodied in a final Record of Decision
("ROD"), executed on 	, 19	, [on which the State had a
reasonable opportunity to review and comment/on which the State has

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                               - 4 -    OSWER DIRECTIVE NO. 9835.17
given its concurrence.]  The ROD includes [EPA's explanation for
any significant differences between the final plan and the proposed
plan as well as ]a responsiveness summary to the public comments.
Notice of the final plan was published in accordance with Section
117(b) of CERCLA.
     L.  Based on the information presently available to EPA [and
the State], EPA [and the State] believe[s] that the Work will be
properly and promptly conducted by the Settling Defendants if
conducted in accordance with the requirements of this Consent
Decree and its appendices.
     M.  Solely for the purposes of Section 113(j)  of CERCLA,  the
Remedial Action selected by the ROD and the Work to be performed by
the Settling Defendants shall constitute a response action taken or
ordered by the President.
     N.  The Parties recognize, and the Court by entering this
Consent Decree finds, that this Consent Decree has been negotiated
by the Parties in good faith and implementation of this Consent
Decree will expedite the cleanup of the Site and will avoid
prolonged and complicated litigation between the Parties,  and that
this Consent Decree is fair, reasonable, and in the public
interest.
     NOW, THEREFORE, it is hereby Ordered, Adjudged, and Decreed:
                         II.  JURISDICTION
     1.  This Court has jurisdiction over the subject matter of
this action pursuant to 28 U.S.C. SS 1331 and 1345, and 42 U.S.C.
SS 9606, 9607, and 9613(b).  This Court also has personal

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                               - 5 -    OSWER DIRECTIVE NO. 9835.17
jurisdiction over the Settling Defendants.  Solely for the purposes
of this Consent Decree and the underlying complaint[s],  Settling
Defendants waive all objections and defenses that they nay have to
jurisdiction of the Court or to venue in this District.   Settling
Defendants shall not challenge the terns of this Consent Decree or
this Court's jurisdiction to enter and enforce this Consent Decree.
                        III.  PARTIES BOUND
     2.  This Consent Decree applies to and is binding upon the
United States [and the State] and upon Settling Defendants and
their [heirs,] successors and assigns.  Any change in ownership or
corporate status of a Settling Defendant including, but not limited
to, any transfer of assets or real or personal property shall in no
way alter such Settling Defendant's responsibilities under this
Consent Decree.
     3.  Settling Defendants shall provide a copy of this Consent
Decree to each contractor hired to perform the Work (as defined
below) required by this Consent Decree and to each person
representing any Settling Defendant with respect to the Site or the
Work and shall condition all contracts entered into hereunder upon
performance of the Work in conformity with the terms of this
Consent Decree.  Settling Defendants or their contractors shall
provide written notice of the Consent Decree to all subcontractors
hired to perform any portion of the Work required by this Consent
Decree.  Settling Defendants shall nonetheless be responsible for
ensuring that their contractors and subcontractors perform the Work
contemplated herein in accordance with this Consent Decree,  with

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                               - 6 -    OSWER DIRECTIVE NO. 9835.17
regard to the activities undertaken pursuant to this Consent
Decree, each contractor and subcontractor shall be deemed to be in
a contractual relationship with the Settling Defendants within the
meaning of Section 107(b)(3) of CERCLA, 42 U.S.C. S 9607(b)(3).
                          IV.   DEFINITIONS
     4.  Unless otherwise expressly provided herein, terns used in
this Consent Decree which are defined in CERCLA or in regulations
promulgated under CERCLA shall have the meaning assigned to them in
CERCLA or in such regulations.  Whenever terns listed below are
used in this Consent Decree or in the appendices attached hereto
and incorporated hereunder, the following definitions shall apply:
     "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
SS 9601 £t sea.
     "Consent Decree" shall mean this Decree and all appendices
attached hereto (listed in Section XXX).  In the event of conflict
between this Decree and any appendix, this Decree shall control.
     "Day" shall mean a calendar day unless expressly stated to be
a working day.  "Working day" shall mean a day other than a
Saturday, Sunday, or Federal holiday.  In computing any period of
time under this Consent Decree, where the last day would fall on a
Saturday, Sunday, or Federal holiday, the period shall run until
the close of business of the next working day.
     "EPA" shall mean the United States Environmental Protection
Agency and any successor departments or agencies of the United
States.

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                               - 7 -    OSWER DIRECTIVE NO. 9835.17
                         ." shall mean the (State Pollution Control
Agency or Environmental Protection Agency) and any successor
departments or agencies of the State.
     "Future Response Costs" shall mean all costs, including, but
not limited to, direct and indirect costs, that the United States
[and the State] incur(s) in reviewing or developing plans, reports
and other items pursuant to this Consent Decree, verifying the
Work, or otherwise implementing, overseeing, or enforcing this
Consent Decree, including, but not limited to, payroll costs,
contractor costs, travel costs, laboratory costs, the costs
incurred pursuant to Sections VII, VIII, X (including, but not
limited to, attorneys fees and the amount of just compensation),
XVI, and Paragraph 84 of Section XXII.  Future Response Costs shall
also include all costs, including direct and indirect costs, paid
by the United States [and the State] in connection with the Site
between [insert the date identified in the Past Response Costs
definition] and the effective date of this Consent Decree and all
interest on the Past Response Costs from [insert the date
identified in the Past Response Costs definition] to [the date of
payment of the Past Response Costs].
     "National Contingency Plan" or "NCP" shall mean the National
Oil and Hazardous Substances Pollution Contingency Plan promulgated
pursuant to Section 105 of CERCLA, 42 U.S.C. 5 9605,  codified at 40
                                                                I
C.F.R.  Part 300, including, but not limited to, any amendments
thereto.

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                               - 8 -    OSWER DIRECTIVE NO. 9835.17
     "Operation and Maintenance" or "0 & M" shall mean all
activities required to maintain the effectiveness of the Remedial
Action as required under the Operation and Maintenance Plan
approved or developed by EPA pursuant to this Consent Decree and
the Statement of Work (SOW) .
     "Owner Settling Defendants" shall mean the Settling Defendants
listed in Appendix E.
     "Paragraph" shall mean a portion of this Consent Decree
identified by an arabic numeral or an upper case letter.
     "Parties" shall mean the-United States [,  the State of
_ , ] and the Settling Defendants.
     "Past Response Costs" shall mean all costs, including, but not
limited to, direct and indirect costs and interest,  that the United
States [and the State] incurred and paid with regard to the Site
prior to [the date of the most recent cost update].
     "Performance Standards" shall mean those cleanup standards,
standards of control, and other substantive requirements,  criteria
or limitations set forth in the ROD or Section _ of the SOW.
     "Plaintiff [s]" shall mean the United States [and the State of
     "RCRA" shall mean the Solid Waste Disposal Act,  as amended, 42
U.S.C. SS 6901 et sea, (also known as the Resource Conservation and
Recovery Act) .
     "Record of Decision" or "ROD" shall mean the EPA Record of
Decision relating to the [Site or _ Operable Unit at the Site]

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                               - 9 -    OSWER DIRECTIVE NO. 9835.17
signed on	, 19	,  by the Regional Administrator,
EPA Region 	, and all attachments thereto.
     "Remedial Action" shall mean those activities, except for
Operation and Maintenance, to be undertaken by the Settling
Defendants to implement the final plans and specifications
submitted by the Settling Defendants pursuant to the Remedial
Design Work Plan and approved by EPA.
     "Remedial Action Work Plan" shall mean the document submitted
by the Settling Defendants pursuant to Paragraph 12.a of this
Consent Decree and described more fully in Paragraph 12.b.
     "Remedial Design" shall mean those activities to be undertaken
by the Settling Defendants to develop the final plans and
specifications for the Remedial Action pursuant to the Remedial
Design Work Plan.
     "Remedial Design Work Plan" shall mean the document submitted
by the Settling Defendants pursuant to Paragraph 11.a of this
Consent Decree and described more fully in Paragraph 11.b.
     "Section" shall mean a portion of this Consent Decree
identified by a roroan numeral.
     "Settling Defendants" shall mean those Parties identified in
Appendices D (Non-Owner Settling Defendants)  and E (Owner Settling
Defendants). .
     ["Site" shall mean the 	 Superfund site,
encompassing approximately 	 acres,  located at [address or
description of location] in [name of city].  	 County,

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                               -  10  -    OSWER DIRECTIVE NO. 9835.17
      of state! and depicted generally on the map attached as
Appendix C.]
     "State" [or "Commonwealth"]  shall mean the State
[Commonwealth] of 	.
     "Statement of Work" or "SOW" shall mean the statement of work
for implementation of the Remedial Design,  Remedial Action, and
Operation and Maintenance .at the Site, as set forth in Appendix B
to this Consent Decree anc any modifications made in accordance
with this Consent Decree.
     "Supervising Contractor" shall mean the principal contractor
retained by the Settling Defendants to supervise and direct the
implementation of the Work under this Consent Decree.
     "United States" shall mean the United States of America.
     "Waste Material" shall mean (l) any "hazardous substance"
under Section 101(14) of CERCLA,  42 U.S.C.  S 9601(14); (2) any
pollutant or contaminant under Section 101(33), 42 U.S.C.
S 9601(33); ((3) any "solid waste" under Section 1004(27) of RCRA,
42 U.S.C. § 6903(27); and (4) any "hazardous material" under [State
statutory citation]].
     "Work" shall mean all activities Settling Defendants are
required to perform under this Consent Decree, except those
required by Section XXVI (Retention of Records).

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              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                         WASHINGTON. O.C. 20460
                            NOV   3 !S33
                                                  SOUO WASTE AND EMERGEMCV
                                                 OSWER DIRECTIVE
                                                 No.  9836.0-1A
MEMORANDUM
SUBJECT:  Chapter  6  of±he Community  Relations Handbook

FROM:     J. wUESlon Porter
          Assistant  Administrator

TO:       Regional Administrators
          Regions  I-X


     When the revised version of ^qnff^V^y Relations in
Sup«rfundi  x HandJ?oo)t vsflt to print  this  summ«r/  Chapter € was
not y«t in final form.   This Chapter,  "Coomunity Relations during
Enforc«m«nt 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 veil 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:  Bruca Diamond,  OWPE
     Henry Longest,  OERR
     Elaine Stanley,  OWPE
     Lloyd Guerci, OWPE
     Russel Wyer,  OERR
     Lisa Friedman,  OGC
     Glenn Unterberger,  OECK
     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 OP THE CERCLA ENFORCEMENT PROGRAM

6.4   COMMUNITY RELATIONS RELATED TO ENFORCEMENT ACTIVITIES AND
      ADMINISTRATIVE RECORDS

   6.4.A   Planning Community Interviews and
           Developing Community Relation* Plan*

           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 PRPs
           3. Negotiations
           4. Community Relations Following an RZ/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, £t niniaia and Cost Recovery
              Settlements
           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

   6.4.2   The Administrative Record as Part of Community
           Halations

           1.  Overview
           2.  Purpose of the Administrative Record
           3.  Community Halations Coordinator
               Responsibilities for th« 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 OF THE ADMINISTRATIVE RECORD*


6.1  BACKGROUND AND INTRODUCTION

     The Comprehensive Environmental Response, Compensation and
Liability Act  (CERCLA) as amended, provides the U.S.
Environmental  Protection Agency  (EPA) with t le authority 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 take 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.  Zt 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 end 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 eomunitv Paiations in
Suoarfund!  A »»«<*>»««* (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 State enforcement, and PRP-lead
removal and remedial actions, as defined in the 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 PRP« 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 law suit to compel performance.

     Finally, if PRPs  do  not perform the response action and EPA
undertakes the work, EPA  may file suit against PRPs to recover
money spent by EPA from the Superfund.  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 the
needs 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  Planni.no Community Tntarvlaw* and Developing  Community
       Relations Plane fCRPal

6.4.A—1  Community Interviews

     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 comunity relations staff, with the RPM or
enforcement staff, conducts discussions with different groups
before developing the CRP.  Zt is important to not*  that some
interview* may 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 specTic 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 th* full rang* of vi«ws, l«ad ag*ncy staff
 may consider interviewing PRPs in the community.  Every sit*
 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  eqpqptiflitv Relations Plana

      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
 include* two appendices; the first presents EPA'* 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.   CRP* 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 activiti**
 and establish procedures for reviewing information.   Adequate
 planning should prevent the release of information that might be
 detrimental to the settlei»*nt and/or litigation process.
 Internal discussions with all team members during project
 planning may be a useful mechanism for guarding against such
 releases .   This need for coordination 1* parhaos th* apat crucial
massage  put forth in this guidance.   Although EPA- must share
 information about a  sit* 'with th* p*opl* directly aff*ct*d by the

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                   OSWER DIRECTIVE 9836.0-1A

site, 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 ttpelled 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  fPRP> 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

relation* 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 Sitea

     The following subsections present an overview of the notice
process leading to the initiation of RI/FS or RD/RA negotiations,
community relation* following an RI/FS order, public comment on
RD/RA consent decrees, community relations during PRP
remediation, and technical discussion*.

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 question*.  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 encourage* settlement* may be appropriate
at this time.

     Litigation generally doe* not occur until after the remedy
is selected (after the moratorium period that begin* when the
special notice for RD/RA end*, a* discussed below).  EPA staff,
however, may need to explain early in the process that legal
constraints may apply during negotiation* or litigation with
respect to community relation* activities.

6.4.B-2  Notice to PRPa
               •
     Notice letter* are used to  inform PRP* of their potential
liability and provide an opportunity for them to enter into
negotiation*, which are intended to result in PRP*  conducting  or
financing r*apon*e activities.  The negotiation process may
include "informal" and "formal" negotiation*.

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                   OSWER DIRECTIVE 9836.0-1A

     EPA haa established a discretionary three-step notification
procesa to facilitata and encouraga settlements at ramadial
sitaa.  First, vail bafora tha RI/FS starta, EPA uaually sands a
ganaral notica to PRPa.  Sacond, a special notica for tha RI/FS
may ba sant in appropriata circumstancee.  Third, a spacial
notica for tha RO/RA may ba sant, whara appropriata.

     Tha ganaral notica advisas PRPs of poaaibla liability.  Tha
spacial noticas initiata formal nagotiationa and invoke a
moratorium on EPA conducting tha RI/FS or rasponaa action, whila
ancouraging PRP participation in raaponaa activitiaa at a sita.
For ramadial sitaa, RI/FS spacial noticaa should ba issued at
laaat 90 daya bafora EPA plana to obligata Fund money for the
RI/FS.  For an RO/RA, tha preferred approach ia to iaaue special
noticea at the time the FS and propoaed work plan are raleaaad
for public comment, although notice may be iaaued after the
Record of Decision (ROD) ia signed.  Once the special notice is
sent, a 60 -day moratorium on EPA 'a conduct of certain raaponae
activities is triggered.  If a "good faith" offer is not received
within 60 days, EPA may proceed with its own RZ/FS or removal, or
taJce enforcement action against the PRP.  If a good faith offer
is received, EPA's goal is to conclude RZ/FS negotiations with an
administrative order on consent within 90 days of the RI/FS
special notica.  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 timeframe
for the RD/RA apecial notice moratorium may 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.B-3
     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.
otherwi*- the ability of the parties to  assert  confidentiality
at acme later date may be affected.

     The confidentiality of statements made during  the course of
negotiations is a well-establiahed  principle  of bur legal  system.
Its purpose is to promote a thorough and frank  discussion  of  tha
iasues 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  ComiBunltv Ra.lati.ons  Following an RT/FS Order

     As discussed  above,  RI/FS settlements usually are resolved
as adainistrative  orders  on consent.  For remedial sites, an.
RI/FS workplan is  a trigger for implementation of community
relations activities.  When the workplan 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 workplan;
announce how the PRP 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/PS 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

                                8

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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 and Comment 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 must 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 Register 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 RD/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 are released to  the public at the same time.
The Regional  team  vill use information repositories,
administrative record files, and/or other  means to make these
documents available to the public.

6.4. B-6  CPlffTMTl^v Relations Purina PRP Remediation

     EPA retains 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.  Wor)cshops 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 Community Relations Purina Removal Actions

     EPA will encourage public participation during removal
action* 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. 9 8 3 6.0 - 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.

5*4.D CoB'Tnunitv Relations Duri.no Specific  Enforcement Actions
       and Settlements

6.4.D-l   Consent Decrees.  De  Mininia and Coat Recovery
          Settlements

      Under section  122(d)(l)  of CERCLA, settlements for  remedial
action are to  be in the  form  of consent decrees  filed in Federal
court.   Section  122(d)(2J(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 settlement.

      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 filial settlement and the response
to comments must be released at t) * 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  Itvtunetive 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 will 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 RCfrA and other Federal and State t^wg

     On May 5, 1987, the Office of Solid Waste and Emergency
Response issued guidance for public involvement in RCRA
section 3008 (h) actions (OSWER 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 sits.  A general knowledge of Federal or state
requirements may help the CRC in conversing with the public.
6.4.X  Tnl MBinilfrr*^iv* Record As Part of| Community Relations

6.4.E-1  Overview

     Section 113 (k) (1) of CERCIA requires the establishment of an
administrative record upon which the selection of  a  response
action is based.  Zt also requires that a copy of  the
administrative record be located at or «*ar the site.   Section
113 (X) (2) of CERCIA 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

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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 reiedy.  Community relations staff should use
the administrative record 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
RZ/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 (EE/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  Pmrpoee 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*re 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.
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                    OSWER DIRECTIVE  9836.0-1A

6.4.E-3   Community  Relations  Coordinator RMpon«lbiliti«a for
          Administrative  Record

     The  OSC/RFM  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 mafca arrangements for copying the
record file.  EPX,  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
Re^ilater.  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 CERCLA 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 relations
documents 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, criticisms and new
information submitted by the public, including PRPs, during the
public comment period must be included in the record file.  A
re&^unse 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 Community Relation* Coordinator
         Responsibilities

     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 hov to notify the public of the
        availability of the record file.  This notification may
        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 Administrative 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 ba 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.
  a**
     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 must 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
                       Unftad States
                       Environmental Protection
                       Agency
                          Office of Solid Waste
                          and Emergency Response
                          Washington. D.C. 20460
Office of Waste Programs Enforcement
Summer 1988
                       Environmental
                       Fact Sheet
                      The  Super-fund  Enforcement
                      Process:  How It Works
INTRODUCTION

In 1980, Congress passed the Comprehensive Environ-
mental Response,  Compensation and Liability Act
(CERCLA), commonly called Superftmd. This law pro-
vides the U.S. Environmental Protection Agency (EPA)
with the authority v4 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 *im*4 at achieving ft"* 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 FRPs fail to take necessary response
actions. PRPs are defined as parties Identified as having
owned or operated hazardous substance she*. or who have
transported or arranged for disposal or treatment of hazard-
ous substances, pnflntanis or conumlninn at such sites.. The
second program provides EPA with the authority to negoti-
ate settlements, to issue orders to PRPs ^TCT^g fre«p K>
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 die
remediation of sites are referred to as die Superfund enforce-
ment process. CERCLA was reauthorized and amended on
October 17. 1986, by die 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:      imeragency Agreement
                         NEAR:    Non-binding Allocation of Responstoility
                         NPL      National Priorities List
                         PRft      Potentially Responsible Party   .
                         RCRA:    Resource Conservation and Recovery Act.
                                  as Amended
                         RD/RA:    Remedial Design/Remedial Action
                         Rl/FS:     Remedial tnvestigaton/Feasbilfty Study
                         ROD:     Record of Decision
                         SARA:    Superfund Amendments and
                                  Raautnonzation Act of 1986
                       This fact sheet describes die enforcement authorities and the
                       process diatis followed under the Superfund program. It de-
                       scribes die options available to EPA for nanfrftaring hazard-
                       ous waste sites; the tools and mechanisms that EPA may use
                       in negotiating mtifmfms 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
To understand the enforc
.it is necessary to under-
stand the Snpernmd remedial process. Under die "•""»<'«i 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 h*«i»h or welfare or the environ-
ment, may be taken at any point in the remedial process.

The Superfund I*IM *ti h^g*"* with  a preliminary nt* m'ifnt
site inspection (PAVST). This usually is conducted by the Suue,
to determine whether the site poses a significant enough poten-
tial hazard to warrant further study and investigation.

The site is then naked 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 J or above are added to the National Priorities
LisKNPL).

Next, a remedial investigation (RT) is conducted to assess the
extent and nature of the contamination and the potential risks. A
feasibility study (FS) is then prepared to examine and evaluate
various remedial alternatives.

Following a public comment period on EPA's preferred alterna-
tive and the draft FS report. EPAchoosesaspecific remedial plan
and outlines its selection in the Record of Decision (ROD).
                       Once the rtHfilial ***ii^n (RD) (which includes engineering
                       plans and specifications) a completed, the actual site work, or
                       remedial action (RA) cm begin. After RD/RA activities have
                       been compkted. the site is monitored to ensure the effectiveness
                       of tne 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 wotk
when the site is scheduled for some action Second, in the
course of ideuifying response work to be done, EPA win
encourage PRPs to do the work at a site.

Third, If EPA believe* the PRP is wining and capable of
doing the work, EPA wffl attempt B negotiate an enforce-
ment agreement with the PRP(sX Hie enforcement agree-
ment may be an Agreement cntrrfd in oouit (such as a
judicial consent decree) or ft may be an administrative
order (where EPA and the PRP(s) sign an agreement
outside of court).  Bom 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 tidier 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 die option of filing a law suit
                       to compel performance.

                       Fifth, ifPRPs do not perform die 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
                       program.

                       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 with PRPs.

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  ENFORCEMENT AUTHORITIES
  The original Superftnd
  on October 17.1986, when President Reagan signed into law the
  Superfund Amendments and Reanihcrization Act  of  1986
  (SARA). Thfjg arr^TVfr'VQ BKT»T **il ihf Supfrfv'l Tn^ FBIH!
  10 $8.5 billion  w&  rlarififfl  aiv1 <*TT*iTKt^<1  enforcement
      Attest and Information Gathcriag • SARA iutagiaeut
      EPA's ability to obtain access to investigue  sites and to
      OuCUD MiQttMttOft OPDCD OtfOCS Wlto DlOWlCQflC Of tD6 SU6*
      Settlement  Authorities -
      compel a PRP toundenata
                        CERCLA  authorizes EPA to
                       i necessary actions to control the
      threat of imminent and substantial endangerment to human
      health or the environment. To accomplish mis, EPA may
      either issue an administrative order or bring a civil action
      against the PRP in coon. SARA outlines specific procedures
      for negotiating settlements with PRPs to conduct voluntary
      response yfjfft " ***T***fnin "ft** sites.
Cost Recovery
                     Once a Fund-financed response has been
                     do recover costs BPQOJ Qtc
      parties. PanandpresmraciliryowiienandopenttDn,asweIl
      asha»artoussubsnnc«genuauiisandojnspoTten.canallbe
      liabk under Superfund for response costs and for damage to
      natural resources; EPA may recover Federal mtpcnv costs
      from any or all of the responsible parties involved in a
      rrrncdial action. The monies recovered go back into the Fund
      for use in future response acti
      Criminal Authorities • SARA increases criminal penalties
      for failure K> provide notice of a rekase and makes submitting
      DUS6 ffrfOTTimDOtl A QlHUflU (
                                                         CltixeftSoiti-SARAauuVJrizesacitizentosueanyperson.
                                                         the United Stun, or m iodividnl State for any violation of
                                                         standards and  requirements of die  ttw, under certain
Federal Facflltia

SARA also addsasection dealing with releases of hazardous sub-
stances at Federal facilities. This provision clarifies that Super-
fund applies to Federal agencies and that vhey must comply witfi
its requirements.  SARA clearly defines the process Federal
agencies must follow in indenaldn^ remedial responses. At
NFL sites, EPA makes the final selection of the remedy if the
Federal agency and EPA disagree.  A  Federal  agency must
remediate a Federal facility through an intengency 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 me terms of the
agreement.

SARA also provides a schedule for response actions at Federal
         including a •r>><*hi)» for preliminary
                                                                                                         .
                                                     laving on me National Priorities List, remedial investigations/
                                                     also must be given t^f opportunity to participate in M*P planning
                                                     and stkicbon of any remedy, including the review of all data
                                                     Saxes are given a formal opportunity to review remedies to
                                                     ensue that they incorporate State standards.  Public participa-
                                                     tion in addressing releases at Federal finalities 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 FjstalJUgiSflt* list of me Federal facilities that
                                                     hive been included in the docket during the proceeding six-
                                                     fDQIttD PcnO^L
This interaction is iuiporuut beciujc it provides ite oppor*
nmity to share infonnidao about fee site and may reduce
delays in conducting i
The eoforcenieot procui *yg*!*r 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 d»r potential
liability. The general nodce also may include a request for
and a release of information on PRPs and tile 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
                                                            il 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 RI/FS special
                                                      notice initiates a 90-day inoratorium and an RD/RA special
                                                      notice initiates a 120-day moratorium.  The moratorium
                                                      provides a period of time during which EPA and PRF* ne-
                                                      gotiate.  The goal of negotiations is for EPA *nd PRPs to
                                                      reach a fftdfrnm where the PRPs agree to conduct and/or
                                                      finance response activities. Negotiations may be terminated
                                                      after 60 days for either the RI/FS or RD/RA if PRPs do not
                                                      provide EPA with a "good faith" settlement offer.

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 Negotiations for the RI/FS
Mixed Funding
 The PRPmay condua the RI/FS if EPA detennines the PRP
• i$ qualified to condua the RI/FS and if the PRP agrees to
 reimburse EPA for die cost of oversight The terms of this
 agreement to condua 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 condua the
 remedial activity using Trust Fund monies, and sue for reim-
 bursement of its costs with the assistance of the Department
 of Justice (DOJ). Or EPA may issue a unilateral administra-
 tive order or direoly file suit 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 die public This information, in-
 cluding public comments, is compiled and maintained in die
 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 die
 selection.

 TOOLS FOR ENFORCEMENT

 In addition to outlining die procedure* for die enforcement
 process, CERCLA provides toots dm are designed to help
 EPA achieve vnlrmmn, The CERCLA senkmrm anthnri-
 ties may be used by EPA to foster negotiations wim PRPs
 instead of taking diem ID coon.  EPA believes tint PRPs
 should be involved early m die Superfund process at a site.
 U ism the best interest of PRPs to negotiate wim EPA and to
 condua die RI/FS, as dds can keep the process smooth and
 costs can be controlled. EPA actively promotes settlements
 with PRPs using tools hi SARA and is continuing to work
 towards improvements in die settlement process itself.
 These new SARA tools include, but are not limned to:
CERCLA awhorizes die use of "mixed funding.''  In mixed
funding, sealing PRPs and EPA share die 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 rypes of mixed funding arrangements. These are
"preauthorization." where die PRPs condua the remedial
action and EPA agrees to reimburse die PRPs for a portion
of their response costs 'cash-outs." where PRPs pay for a
portion of die remedir' costs and EPA conducts the work
and "mixed work." v nere EPA and PRPs  both agree to
condua and finance d* 'owe portions of a remedial action.
EPA prefers a "preauthorized" mixed-funding agreement,
where PRPs condua die work,

EPA encourages die use of mixed funding  to promote
settlement and she 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.

               len
De mjnjmji settlements are smaller agreements separate
from die larger settlement for die chosen remedy. Underdo
mjnjmjs settlements, relatively small conoibutors of waste
to a she. or certain "innocent" landowners, may resolve their
liability. Innocent landowners are parties who bought prop-
erty witiiout knowing that it was used for hazardous waste
handling. Or EPA may enter into & minim is settlement
agreements wim a party where die 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. Dcminimis yftlmrptf »!*<> may be used where the
PRP is a site owner who did not condua or permit waste
management or contribute to the release of hazardous sub-
stances. PB mjnjmjs settlements are typically used in con-
             jvenant not to sue agreements. These agree-
         rally win be in die form of administrative orders
          and are available for public comment
on
Covenants Not To Sue

A covenant not to sue may be used to limit die present and
future liability of PRPs, dais encouraging them to reach a
settlement early.  However, agreements generally include
"reopeners" that would allow EPA to hold parties liable for

-------
 conditions unknown at the time of settlement or for new in-
 formation indicating ***** dK ""flfdial action is not protec-
 tive of human ^ful*** "^ the environmenL In some cases,
 such as d£ auouaia settlements, releases may be granted
 without  reopenen. Covenants not to sue are likely to be
 used only in instances where tne 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 mat PRPs contribution

 Non-binding Allocations of Responsibility (NBAR)

 NBAR is a process for EPA to propose a way for PRPs to
 allocate costs among themselves.  EPA  may decide to
 prepare an NBAR when the Agency determines this alloca-
 tion is likely to promote settlement. An NBAR does not bind
 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 resnonsihle.
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 action*.
PUBLIC PARTICIPATION/COMMUNITY
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
hrmisr 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 in/or-
mation will be documented 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 AGENCY
I hereby certify that being a person over 18 years of age, I served
a copy of the attached subpoena:

(check 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,
                                                 J
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.   CM court has jurisdiction over this matter pursuant to
      /
28 U.S.C. S51331 and 1345, and 42 U.S.C. $9622(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 , [city], [state] has requested that the Attorney
General commence this action.

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                                     3
     [8.  By letter  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:
     1.   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 fully with  the terms of the EPA subpoena.
       /
     3.   m« Court render such other and further relief as is
just and
Dated:                                 Respectfully  submitted,
                                       Attorney for

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                                    2
    3.   Tne Respondent, 	, is [short description,
e.g. "former owner of a waste transporting and disposal business."
Be sure to identify as an owner or corporation.]
    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 5122 (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 12580 (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, Suh-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 U.S.C.
9622(e)(3HB), 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 S 9835!6

       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                             NOV I 7 1938
 MEMORANDUM
 SUBJECT:  Guidance  on  Premium Payments in CERCLA Settlements
             -X-^,     v  j^^_ \-
 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. SS9601 et seq. . 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 will be required following

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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 rislc 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
environment.1
   '  Th« purpose of this memorandum is to provide guidance
on the use of premium payments in CERCLA settlements.  It
     1  As discussed in Section IV, infra. "Timing of
Premium Payment Setwiements," 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)(l) 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, will  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 Minimis Waste
 Contributors under Section  122
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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 122(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(fUl) 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."
Sea EPA's "Interim Guidance on Covenants Not to Sue Under
Section 122(f) of SARA," 52 Fed. Reg. 28038, 28040 (July 27,
1987).

     5  Id.

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                             5

     Under Section 122(f)(6), the Agency may exclude the

"un)cnown 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

win 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

I22(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 I22(f)(6) refers to both the factors
specified in Section 122(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(f)(4) 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.  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 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.
     wiiat 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.    Premiums  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
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.
III.  AMOUNT OF THE PREMIUM PAYMENT
     As noted above, premium payments may se-ve 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 122(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 l22(f)U) 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 Liability Premiums
     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 rislc 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.  Cost 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  amevnt  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 riglv_ to seek  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.  Tne total settlement amount
would b« 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
(NBAR), authorized by Section 122(e)(3) of CERCLA, if
prepared, may also provide significant information for
evaluating a premium payment settlement.*0
     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
(NBAR)." 52 Fed. Reg. 19919 (May 28, 1987).  Section
122(e)(3) of CERCLA authorizes EPA, at its discretion, to
prepare an NBAR 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.1-1  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 win be
provided by separate memorandum.
     If the costs of the remedy exceed the recovery from
settling PRPs (including the premium), EPA win 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 fle
minlmis PRPS are discussed in greater detail in EPA's
"Interim Guidance on settlements with De 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
ovicfe
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 d£ minimis -settlement precedes a mixed
fund in, agreement, any premium payment obtained from dfi
        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 Direc±ive Nonber 9835.4-2A
                            MOV  18 1968
MEMORANDUM
SUBJECT:
FROM:
Initiation of PRP- financed Remedial Design in Advance
of Consent Decree Entry

J. Winston Tortelr
Assistant Administrator for
Solid Waste and Emergency Response
TO:
Thomas L. Adams, Jr.  y  _
Assistant Administrator for
Enforcement and Compliance Monitoring

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
month* 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 tLe
remedial design may be filed after the ROD is signed, if
negotiations are sufficiently veil 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.   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 remedial design, is for
EPA to issue an administrative order solely for the remedial
design, leaving the remaining portions of the remedial 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
           Under either approach,  remedial  design work would  not
have  to  be delayed  pending completion  of  CERCLA Section  122(d)
procedures)  for  public  coaaent   of   proposed  consent  decrees.
Consistent with  established Agency policy,  a remedial design is
considered to be a removal action, and thus outside the  scope of
Section  122(d)(l),  which  covers  proposed  agreements  concerning
remedial  action  under Section  106.    Thus,  while the  Agency  may
voluntarily  agree  to  subject the terms of  the remedial  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 Nunber 9835.4-2A




                           ATTACHMENT


   PRE-SETTTifiMTiFT REMEDIAL DESIGN STIPULATION AND AGREED ORDER

                   UNITED STATES DISTRICT COURT
                    DISTRICT OP    ''	
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 No. 9350.0-4A  "Superfund Remedial  Design  and  Remedial
Action Guidance" may be  consulted for guidance on steps  and
deliverables.  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 worlcplan
attached to the Consent  Decree so as to  eliminate any possibility
of inconsistency].

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                                OSWER 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,
      Region* I, IV, V, VTI, VTII
     Directors, Hazardous Waste Management  Division,
      Regions III, VT
     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/CERCIA ORC Branch Chiefs
     David Buente, DOJ

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                                        OSWER Directive 9842.0
f
             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON. O.C. 20460
                             28 i
                                                         OFFICE OF
                                                SOLID WASTE AND EMERGENCY RESPON5
MEMORANDUM

SUBJECT:  Guidance on Applicability of EPA Order  3500.1 to CERCLA
          Staff

FROM:     Bruce M. Diamond,  Directo
          Office of Waste  Programs Enforceme
TO:
             Henry L. Longest II, Director
             Office of Emergency and Remedia

             Waste Management Division Directors
             Regions I - X
             Environmental Services Division Directors
             Regions I - X

        On June 29, 1988, EPA Order 3500.1 established training
   requirements for Compliance Inspectors/Field Investigators.  This
   Order applies to all EPA personnel who lead or oversee the
   conduct of compliance inspection/field investigations on a full
   or part-time basis under any of EPA's statutes, including CERCLA.

        However, since CERCLA staff do not perform classic
   compliance inspections, the Order allows the CERCLA program
   offices to define, through guidance to the Regional
   Administrators, which CERCLA staff shall be subject to the
   Order's requirements.  It also indicates that a CERCLA-specific
   curriculum is being developed to address the required training.
     The following definition  shall  be  used to determine the
CERCLA staff subject to  the Order's  training requirements:

     "All staff who collect samples,  conduct field audits or
oversee Potentially Responsible  Party (PRP)  projects for the
purpose of ensuring PRP  compliance or for obtaining evidence to
use in potential enforcement actions.1*

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                               -2-

     This definition should include, at a minimum, On-Scene
Coordinators (OSCs) and Remedial Project Managers (RPMs) involved
in field activities.  However, it is understood, per Section
9d(2) of the Order, that the Regional Administrator makes the
final determination of who in the Region is subject -to the Order
and is responsible for reviewing and approving any exceptions to
the training requirements.

Curriculum

In addition to the health and safety training currently
required, the Order mandates a minimum of forty hours that
cover:

     o    Legal fundamentals - introduction to enforcement of EPA
          statutes, overview of enforcement and compliance goals
          and strategies, administrative and judicial litigation
          processes, legal authority and EPA policies regarding
          gaining entry, use of information-gathering tools, and
          defining and documenting evidence

     o    Technical issues - roles and responsibilities of an
          inspector/investigator, violation detection and
          investigative techniques, records inspection,
          statistical sampling strategies, obtaining physical
          samples, QA/QC, and lab analysis

     o    Communication skills - notification, negotiation
          techniques, elements of an inspection plan, written
          documentation & reporting requirements

     o    Administrative - planning considerations,  travel,
          records management, organizational structure, contract
          mechanisms

     To meet these requirements, our offices will slightly
modify the "OSC/RPM Basic Course".  Additionally, the OSC/RPM
Support Program developed by OERR calls for an OSC/RPM Academy to
be piloted in April 1989 which will provide 41 days of required
training for new OSCs and RPMs that will also meet,  as part of
its curriculum, the training requirements in EPA Order 3500.1.

     At this time, it is not anticipated that any additional
training courses or materials will need to be developed to meet
the Order's requirements.

     If you have any questions about or problems with the
proposed definition of affected CERCLA staff or the curriculum,
please feel free to contact either of us.

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              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON. D.C. 20460
                         DEC I 4 IS88
                                       OSWER DIR. *9841.0

                                       SOUO WASTE AND EMMCENC" «ES»ONS
MEMORANDUM
 SUBJECT:   Interim Strategy for Enforcement of Title III and
           CERCLA 1103 Notification Requirements
FROM:


TO:
Bruce K. Diamond, Director
Office of Waste Programs En
                                       orcement
           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 tbs> Beergency  Planning and Community Right-To-Know Act
(Title III of the Super fund Amendments and Reauthorization Act -
SARA) and  the 1103 notification requirements of the Comprehensive
Environmental Response, Compensation and Liability Act  (CERCLA) .
The interim strategy  will discuss the following subjects:
     Enforcement  provisions under Title III (I 1325 and 326), and
     CERCLA  1109;

     General priorities for EPA enforcement;

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                                                OSWER OIR.  19841.0

o    Enforcement of CERCIA 1103 and Title III |304;

          Relationship between CERCLA |103 and Title III §304;
          The substance of 1304 reports;
          Identifying 1103/1304 violations;
          Priorities;
          Enforcement response;

o    Enforcement of 11302, 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 1313 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)
authorise EPA, 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 ZZI.  The United States may
also seek imprisonment and fines for violations of the  1304
emergency notification requirements and violations of the  1322
trade secret provisions.  States, local governments and citizens

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-------
                                                OSWER DIR.  #9841.0

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 sons  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 1103
(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 1103/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.
                                                                 r

     With the notable exception of 1313, Congress intended that
implementation of Title III 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 vill initiate enforcement actions against owners  and
operators who fail to provide emergency notice after a release as
required under 1304.  In developing these cases, EPA vill
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 (11302-303) and the  community right-to-know reporting

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                                                OSWER OIR. 19841.0


     Title  III  1304(b)  specifically indicates 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 oust 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 1302(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  ZIZ  |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 soon as  practicable  after the release.  This written report
should update the  verbal notice and include additional
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; *nd

     o   Where appropriate, advice regarding medical attention
          necessary for exposed individuals.

     The original  Title ZZI 1302 ERS 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

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                                                OSWER DIR.  19841.0

requirements  (||311-312).  EPA regional personnel will also
monitor  |313  submissions for chemicals required to be reported
under 1302.

ENFORCEMENT OF CERCLA I103 AND TITLE III 1304

     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 1103 and Title III 8304

     CERCLA 1103 and Title III 1304 serve similar purposes.
CERCLA 1103 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.

           nee ef CERCLA J103 and Title  TIT J3Q4 Reports

     ~_JICLA 1103 (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 CTR Part  302.

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                                                OSWER DIR. 19841.0

 facility under CERCLA  |l04(e) vith the sole purpose of enforcing
 Title IZZ.
      In  developing  enforcement  actions for violations of
 1103/1304,  Regional enforcement personnel should try to target a
 cross section of  the regulated  coaaunity.  Reporting of EPA
 enforceaent actions in  relevant publications, should help
 increase awareness  of Title  III and provide a deterrence.

      The Regions  should consider the  following circuastanees in
 assessing the priority  to  be given an enforceaent action against
 a  given  violator:

      o   The voluae and substance released;

      o   The nature, if any, of environmental or health threats
          resulting froa the release;

      o   The efforts Bade by the facility to coaply with the
          notification  requireaents;

      o   Aggravating or aitigating circumstances, such as the
          facility's compliance vith  other Title III
          requireaents ;

      o   The significance of the violation to the SERC and LEPC;
          and

      o   The effect on the  overall enforceaent program.

      Enforceaent personnel should coanunicate with the
appropriate SERC during the  developaent of any notification
related  enforceaent action to check the violating facility's
conpliance vith all other  sections of Title ZXI.  If the SERC
provides evidence that  the facility in question has violated
other sections of Title III, those violations should be included
in the enforceaent  action. •
     Under CERCLA  1109 and Title  III  1325(b), ZPA  can assess
administratively either  Class  I or  Class II  civil  penalties.  EPA
can also refer civil  judicial  or  criainal  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 CERCXA 1109 and  Title III  1325 are

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                                                OSWER DZR. 19841.0

 were  published  in  the  Federal Register on February 25, 1968.  The
 currant  list  of EHSs and  the list of dalatad chemicals can ba
 sean  in  Appandix B.

      Identifying 61Q3/J3Q4 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 1103/1304  violations should include reviewing:

      o    Information  from SERCs and LEPCs;

      o    NRC reports  f,or 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(a)(2MB) to determine whether or not there has been a
violation of  I1031.  CERCLA 1104(a)(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 I104(a) 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
violations.  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.

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                                                OSWER DIR. 19841.0

 Regions  should  be  in  regular  contact with SERCs to identify cases
 that  they are interested  in having EPA pursue.  EPA enforcement
 personnel should establish a  contact in each of the 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 Violator*

      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 prpject is intended to provide LEPCs with a
 targeting tool  to  identify facilities that are potentially using
 1302  chemicals.  Using the National Air Toxics Inventory Clearing
 House (NATICH)  database,  OWPE is  developing Standard Industrial
 Classification  (SIC)  code/cheaical 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
 III.

      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 EKS  list
 and the  §313 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 1109 and Title III 1325, Class I penalties for
(103/1304 violations are assessed per violation; Class II
penalties for  1103/1304 violations are assessed per violation per
day.  Penalties for violations of Title III 11311, 312, 313,
322(d) and 323(b) also can be assessed each day a violation
continues.

     For all unreported releases, possible criminal proceedings
oust 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 invoke  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 |302(c) requires the owner or operator of a  .
facility at which an EHS 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.

     Section*  311 end 312 require owners and operators of
facilities that have EKSs or hazardous chemicals in excess  of
certain thresholds to submit MSDSs and chemical inventories to
the  SERC, LZPC and local fire department.  Under 1325(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.

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                                                OSWER DIR. 19841.0

where  the  owner or operator '•  recalcitrance justifies a civil
judicial enforcement  action.

     violation* of I 1311  and 312 can be addressed through
administrative  procedures or judicial referrals.  Regional
enforcement  personnel should consult with OWPE and OECM-Waste
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 will 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 Noncompliance.  The Notice will 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), fir 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 IXI/CERCLA notification
requirements.   Title ZII/CERCLA 1103 enforcement personnel are
urged to coordinate  with  other offices  (Air, Water, RCRA, TSCA,
etc.) to identify  cases where violations of Title III/CERCLA
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 are likely to include reports for
on*  or more  of  the**  EHS«.  Therefore, this information would
link the facility to  the  11302-312 reporting requirement*.

      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 vith 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 11311 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 MSDSs and a
|312 inventory  form.

     The  enforcement  person may also want to establish contacts
in the regional OSKA  office to share information on potential
11311 and 312 violators.  These relationships also should be
helpful when you need interpretations of the OSHA MSDS
requirement  under their Hazard Communication Standard.

     Finally, in the  release incidents investigated thus  far
SERCs and LEPCs have  identified violators of 11302-312 as 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 vith the SERC and LEPC.  If the respondent
cooperate* and  supplies the requested information, an enforcement
action asy not  be warranted.  There may be instances however,
     2    For a  complete 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 Beaiater. Vol.  52, No.  163,
August 24, 1987.

                                 11

-------
                                                OSWER DIR. 19841.0

      During  preparation  for TSCA  115, 6, and 8 inspections, OPTS
Regional  enforcement  personnel will screen the applicability of
1313  to targeted  facilities.  If  the facility is subject to 1313,
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.
OSWER 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 1103/1304 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  (11313, 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  delegatees 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 n-3i
states that  the Regional Administrators, or their delegatees,
must  notify  the Director OWPE or  his designee when exercising any
of these  authorities.
USE OP 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 rulemaking by the Agency and may not be relied upon to

                                13

-------
                                                OSWER DIR. 19841.0

craata a right or a benefit, «ub«tantiva or procedural
•nforc«abl« at law or in equity, by any parson   Th« i«
                        with
                               14

-------
Stipulated by:
                                 OSWER Directive Number 9835.4-2A
ROGER MARZULLA
Acting Assistant Attorney
  General
Land and Natural Resources
  Division
U.S. Department of Justice
Washington, D.C.  20530
  [PRP #1]
  [Address]
  [PRP 12]
  [Address]
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
19.
                                    United States District Judge

-------
                                  OSHZR Directive Number  9835.4-2A


A.    1)   Within  thirty (30) days,of the filing of this
          stipulation  the Settling Parties shall retain qualified
          pATfonnel  to prepare detailed  plans and specifications
          f«r  implementation of  eachelemenet of the  selected
          reaedy  described in  the  EPA Record of Decision ("ROD")
          fair                 -   '  . site;dated                  .

      2)   within  thirty (30) days  of the filing of this
          •tipuletion  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  OpeCificeticHWj  *«t  forth  in the Worfcplan, dated
                  which i* attached.   [The stipulation should
              Lttde a  «poeific «cbedule for the preliminary  30, 60,
               «nd t**»  final 100  percent  design completion
      ••:••   BjUaWtoneji as veil as  any intermediate submissions that
          th«  Region deem* ime«Mwry.]

      3)   The)  ftettling Parties shall provide monthly  reports to
          tao  United States in accordance with the schedule
          developed  pursuant to  paragraph A. 2. above, together
          with all baefcfTQund  data,  analyses and other supporting
          infonaetion  for review and written approval by EPA.  In
          tfe«  «v*nt  that the United State* disapproves of  any
          plan or portiem tharoof,  it shall specify in writing
          th*  roaiHMUi  *hy it beliaves such plan or portion
          thereof doa* not eonfom to the ROD or applicable law
          or ?«gvlation including  the National oil and Hazardous
          Substance* Pollution Contingency plan ("NCP"), 40
          C,?.Jt.  Fart  JvO-

B.    All plans and  specifications shall be consistent with
applicable requirements contained  in the ROD and in accordance
with  CERCLA and the  NCP.

CJt i« important -to  re^ewphasize here that the above provisions
should b» u»«4 an a  point of departure for framing those which
will  aotually  be  included in the stipulation,  such a stipulation
ift V1I144 QnjY  JfBS!,R^Bflditi3i Pfffflign  VPF^ ano- vill ^* entered into
by HM iteltoed  «t*tM ^ g||«juiiqt^on wttK the lodging or
anticipated lodging  of a consent Decree for RD/RA.  Actual
stipulation* ««d« choultf bo consistent with this definition. ]

C,    TJio >artie» to thia stipulation acknowledge that this
Stipulation ha» beon entered  into  in anticipation of settlement
and My bo affected  by a conoant decree expected to be entered
tubaequant to  this) filing. «JO  Parties agree to comply with the
ton* of thU  Stipulation unless the terms of any subsequently
entered content decrto expressly supersede the terms of this
stipulation.

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

           Volume 1

-------
             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON, D.C. 20460
                        MAR - ?  |on->
                                                      OFFICE OF
MEMORANDUM                                   SOLID WASTE AND EMERGENCY RESPONSE


SUBJECT:       Update of the CERCLA Enforcement Policy Compendium
FROM:          Arthur B. Weissman, Chief
               Guidance and Evaluation Branch

TO:            Addressees

     You should have recently received the  newest update to the
CERCLA Enforcement Policy Compendium.  This update includes all
significant policies and guidances related  to  CERCLA enforcement
issued between August, 1990 and April, 1992.   Earlier volumes of
the Compendium contain documents  issued prior  to 1990.  While not
exhaustive, this Compendium is intended to  serve as a useful desk
reference of enforcement guidance and policy.

     Please replace the old index and table of contents from the
Compendium with the updated index, which  includes a complete
listing of documents issued from  1983 to  1992.

     Additional copies of the Compendium  (Pub. No. PB-92-963623)
are available to EPA employees from  the Super fund Document Center
at  (202) 260-9760. The public may obtain  the document by calling
the National Technical Information Service, (703) 487-4650; the
charge is $98/paper or $32/microfiche.

     If you have any comments or  questions  on the Compendium,
please call Nicole Veilleux of my staff at  (703) 603-8939.

Addressees :
Guidance and Evaluation Branch, OWPE/CED
Director, Super fund Enforcement Division, OE
EPA Libraries: HQ, Regions I-X
Director, Waste Management Division,
     Regions I, IV, V, VII
Director, Emergency & Remedial Response Division,
     Region II
Director, Hazardous Waste Management Division,
     Region III, VI, VIII, &  IX
Director, Hazardous Waste Division,
     Region X
Regional Counsel Waste Branch Chiefs,  Regions I-X
CERCLA Enforcement Branch Chiefs, Regions I-X
CERCLA Enforcement Section Chiefs, Regions  I-X
                                                          Printed on Recycled Paper

-------
                   CERCLA Enforcement Policy Compendium Topical Index
                     POLICY

 I. PRP Search

   A. Timing and Procedures

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

         PRP Search Supplemental Guidance for Sites in
         the Superfund Remedial Program (Diamond)

         Accelerating Potentially Responsible Party
         Remedial Design Starts: Implementing the 30-
         Day Study

   IL PRP Search Management

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

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

   C. Information Requests

         Guidance on Use and Enforcement of CERCLA
         Information Requests and Administrative
         Subpoenas (Adams)

         Transmirtal of Model Consent Decree for
         CERCLA Section 104(e) Information Request
         Enforcement Actions

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 RD/RA Special  Notice Letters at the Time of
         ROD  Signature (Longest/Diamond)

         Model Notice Letters (Diamond)

         Releasing Information to PRPs at CERCLA Sites
         (Diamond/Unterberger)

         Model Information Notice Letter to Local
         Governments

         Guidance on Preparing and Releasing Waste-in
         Lists and Volumetric Rankings for Information
         Release Under CERCLA  Section 122 (e)
DATE
OSWER
NUMBER
02/12/87


06/29/89


04/02/92
01/26/84
10/09/85
08/25/88
08/29/90
10/19/87



09/26/88



02/07/89

03/01/90


05/07/91


02/22/91
9835.4


9834.3-2a


9835.4-2b*
9834.0
9834.2
9834.4-A
9834.14*
9834.1



9834.10-la



9834.10

9835.12


9834.16*


9835.16*
   *  = Policies dated after 8/14/90
  :* = Policies that have been superseded by later policies

-------
                  CERCLA Enforcement Policy Compendium Topical Index
                    POLICY
  B. RI/FS Issues
       Interim Guidance on Potentially Responsible
       Parties Participation in RemediaHnvestigations
       and Feasibility Studies (Porter)
       Revisions to the Interim Guidance on PRP
       Participation in Remedial Investigations and
       Feasibility Studies (Porter/Diamond)

       Model Statement of Work for a Remedial
       Investigation and Feasibility Study Conducted by
       PRPs

       Guidance on Oversight of Potentially
       Responsible Party Remedial Investigations and
       Feasibility Studies, Vol. 1

       Guidance on Oversight of Potentially
       Responsible Party Remedial Investigations and
       Feasibility Studies, Vol. 2

       Performance of Risk Assessments in Remedial
       Investigation/Feasibility Studies (RI/FSs)
       Conducted by PRPs

       Supplemental Guidance on Performing Risk
       Assessments in Remedial Investigation
       Feasibility Studies (RI/FSs) Conducted by
       Potentially Responsible Parties (PRPs)

       Model Statement of Work for a Remedial
       Investigation and Feasibility Study Conducted by
       Potentially Responsible Parties

       Model Statement of Work for a Remedial
       Investigation and Feasibility Study Conducted by
       Potentially Responsible Parties (Annotated Copy)

  C. Settlement Policy

       Interim CERCLA Settlement Policy
       (Thomas/Price/Habicht, 50 FR 5034 2/5/85)

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

       Initiation of PRP-financed Remedial  Design in
       Advance of Consent Decree Entry (Adams and
       Porter)

       Guidance on Landowner Liability Under Section
       107(a)(l) of CERCLA, De Minimis Settlements
       under Section 122(g)(l)(b) of CERCLA, and
       Settlements with Prospective Purchasers of
       Contaminated Property (Reich/Cannon)
DATE
05/16/88
02/07/89
06/02/89
07/01/91
07/01/91
08/28/90
07/02/91
07/02/91
07/02/91
12/05/84


11/17/88


11/18/88



06/06/89
OSWER
NUMBER
9835. la
9835.2a
9835.8
9835. lc'
9835. Id*
9835.15'
9835.15a*
9835.8A
9835.8A
9835.0


9835.6


9835.4-2A



9835.9
* = Policies dated after 8/14/90
* = Policies that have been superseded by later policies

-------
                  CERCLA Enforcement Policy Compendium Topical Index
                    POLICY

        Interim Municipal Settlement Policy (54 FR
        51071, 12/12/89)

        Multi-Media Settlements of Enforcement Claims
        (Strock)

        Procedures for Transmittal of CERCLA and
        RCRA Civil Judicial Enforcement Case Packages
        to Headquarters (Unterberger/Diamond)

        Model Litigation Report for CERCLA Sections
        106 and 107 and RCRA Section 7003

        Final Model Litigation Report and Complaint for
        CERCLA Section 104(e) Enforcement Initiative

        Interim Agency Policy on Contribution
        Protection Clauses in CERCLA Settlements

  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)

        Statement of James Stroch before the House
        Subcommittee on Policy, Research & Insurance:
        Insurer Liability for Cleanup Costs of Hazardous
        Waste Sites

  IL Consent Decree Procedures

        Guidance on Drafting Consent Decrees in
        Hazardous Waste Cases (Price/McGraw)

        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, 7/27/87)

        Submittal of Ten-Point Settlement Analyses for
        CERCLA Consent Decrees
        (Diamond/Unterberger)

        Superfund  Program, Model  CERCLA RD/RA
        Consent Decree

  L. Mixed Funding

        Evaluating Mixed Funding Settlements
        (Porter/Adams) (53 FR 8279, 3/14/88)
DATE

12/06/89


02/06/90


06/12/89



06/21/89


01/31/90


04/10/91




06/13/84
05/01/85


09/21/87


07/10/87


08/11/89



07/08/91




10/20/87
OSWER
NUMBER

9834.13


9891.6


9891.1-la



9835.11-1
9832.10
12/23/85
07/31/87
09/27/90
9829.0
9838.1
*
9835.2


9835.2b


9834.8


9835.14
9834.9
 * = Policies dated after 8/14/90
** = Policies that have been superseded by later policies

-------
                     CERCLA Enforcement Policy Compendium Topical Index
                       POLICY

          Interim Policy on Mixed Funding Settlements
          Involving the pre-Authorization of States or
          Political Subdivisions (Porter/Adams)

     G. De Minimis

          Interim Guidance on Settlements with De
          Minimis Waste Contributors (Adams/Porter) (52
          FR 24333, 6/30/87)

          Interim Model CERCLA Sec.l22(g)(4) De
          Minimis Waste Contributor Consent Decree and
          Administrative Order Guidance (Reich/Lucero)
          (52 FR 43393, 11/12/87)

          Methodologies for Implementation of CERCLA
          Section 122(g)(l)(a) De Minimis Waste
          Contributor Settlements (Diamond/Unterberger)

     H. Guidelines on Preparing NBARs

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

III.  Section 106

     A. Administrative Orders

          Model Administrative Order on Consent for
          Remedial Investigation/Feasibility Study

          FY 90 "UAO Strategy" (Clay/Strock)

          Guidance on CERCLA Section 106(a) Unilateral
          Administrative Orders for Remedial
          Design/Remedial Action (Clay/Strock)

          Model Unilateral Administrative Order for
          Remedial Design and Remedial Action under
          Section 106 of CERCLA

          Issuance of Administrative Orders for Immediate
          Removal Actions (Thomas)

          Guidance on CERCLA Section 106 Judicial
          Actions

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

          Evaluation of, and Additional Guidance on,
          Issuance of Unilateral Administrative Orders
          (UAOs) for RD/RA

          Administrative Order on Consent for Remedial
          Investigation/Feasibility Study
DATE

05/27/88
OSWER
NUMBER

9834.9a
06/19/87
10/19/87
12/20/89
05/16/87
01/30/90


02/14/90

03/07/90



03/30/90



02/21/84


02/24/89


09/08/83



06/20/91



07/02/91
9834.7
9834.7-la
9834.7-lb
9839.1
9835.3-1A


9870.1 A

9833.0-la



9833.0-2(b)



9833.1


9835.7


9833.0**



9833.2c*



9835.3-2A
   * = Policies dated after 8/14/90
  ** = Policies that have been superseded by later policies

-------
                    CERCLA Enforcement Policy Compendium Topical Index
                      POLICY
          Administrative Order on Consent for Remedial
          Investigation/Feasibility Study (Annotated Copy)
    IL 106(b) Reimbursement
          Consent Orders and the Reimbursement
          Provision Under Section 106(b) of CERCLA
          (Lucero/Leifer)
IV. Cost Recovery
    A. Cost Recovery Guidance
          Cost Recovery Actions under CERCLA
          (Price/Thomas)
    IL Procedures for Documenting Cost
          Preparation of Hazardous Waste Referrals
          (Stiehl)
          Written Demand for Recovery of Costs Incurred
          Under CERCLA
    C. Cost Recovery Strategy
          Superfund Cost Recovery Strategy (Porter)
          Model Cost Recovery CD
    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 CERCLA Enforcement
          Against Bankrupt Parties (Price)
          Small Cost Recovery Referrals (Stiehl/Lucero)
          Arbitration Procedures for Small Superfund Cost
          Recovery Claims; Final Rule (53 FR 23174,
          5/30/89)
          Revised Hazardous Waste Bankruptcy Guidance
          (Hays)
          Policy on Recovering Indirect Costs in CERCLA
          Section 107 Cost Recovery Actions
          (Stiehl/Stanton)
          Cost Recovery Actions/Statute of Limitations
          (Lucero)
DATE
07/02/91
06/12/87
OSWER
NUMBER
9835.3-2A
9833.2
08/26/83


07/30/85

03/21/91


07/29/88
03/31/91

08/03/83
01/14/88

08/29/83

05/24/84

07/12/85
08/28/89

05/23/86

06/27/86

06/12/87
9832.1


9837.1

9832.18*


9832.13
*

9832.0
9891.5A

9832.2

9832.7

9832.6
9832.17

9832.8

9832.5

9832.9
    * = Policies dated after 8/14/90
  ** = Policies that have been superseded by later policies

-------
                    CERCLA Enforcement Policy Compendium Topical Index
                      POLICY

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

 V. State Issues

    A. Funding State Enforcement Actions

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

    JL Counting State-lead Enforcement

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

          Questions and Answers About the State Role in
          Remedy Selection at Non-Funded-Financed
          State-Lead Enforcement Sites

    C. General State Guidance

          Interim Final Guidance on Preparation of
          Superfund Memoranda of Agreement (SMOAs)
          (Diamond/Longest)

          Reporting and Exchange of Information on State
          Enforcement Actions at National Priorities List
          Sites (Porter)

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

    C. General State Guidance

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

VI. Other Guidance

    A. Administrative Record

          Interim Guidance on Administrative Records for
          Selection of CERCLA Response Actions

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

          Final Guidance on Administrative Records for
          Selection of CERCLA Response Actions

    IL Community Relations

          CERCLA Community Relations Mailing List
          (Diamond/Longest)
DATE

06/07/88
04/07/88
10/21/88
04/18/91
05/08/89
03/14/86
06/21/88
10/02/84
03/01/89


05/29/87



12/03/90




02/06/89
OSWER
NUMBER

9832.11
9831.6a-6d
9831.8
9831.9'
9375.0-01
9831.2
9831.7
9831.3
                         **
9833.3A**


9833.3**



9833.3A-1*




9836.2
   * = Policies dated after 8/14/90
  ** = Policies that have been superseded by later policies

-------
                  CERCLA Enforcement Policy Compendium Topical Index
                    POLICY
        Community Relations during Enforcement
        Activities and Development of the
        Administrative Record (Porter)
        Policy Towards Owners of Residential Property
        at Superfund Sites
  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 Indemnification of
        Superfund Response Action Contractors
        (Porter/Kinghorn)
  IL. Program Management Guidance
        Integrated Timeline for Superfund Site
        Management (Clay/Strock)
  Fj. Federal Liens
        Guidance on Federal Superfund Liens (Adams)
  G. Off-Site Policy
        Revised Procedures for Implementing Off-site
        Response Actions (Porter)
        Notification of Out-of-State Shipments of
        Superfund Site Wastes (Canon)
  H. Penalty Policies
        Administrative Penalty  Procedures Interim Final
        Rule (54 FR 21174, 5/16/89)
        EPCRA/CERCLA Penalty Policy
        Revised EPA Guidance for Parallel Proceedings
        Interim Guidance on Use of Administrative
        Penalty Provisions of Section 109 of CERCLA
        and Section 325 of SARA (Adams)
  L Title III
        Interim Strategy for Enforcement of Title III and
        CERCLA Section 103 Notification Requirements
DATE
11/03/88

07/03/91


06/05/87


11/21/85

10/06/87
06/11/90


09/22/87

11/13/87

09/14/89


05/16/89

06/13/90
06/21/89
07/16/87
OSWER
NUMBER
9836.0-1 A
9834.6*


9829.2


9834.5

9835.5
9851.3


9832.12

9834.11

9330.2-07


9841.1A

9841.2
9843.0
9841.1**
12/14/88
9841.0
 * = Policies dated after 8/14/90
** = Policies that have been superseded by later policies

-------
                   CERCLA Enforcement Policy Compendium Topical Index
                    POLICY
  L. Releases
        Reporting Exemptions for Federally Permitted
        Releases of Hazardous Substances (Thomas) (53
        FR 27268, 7/19/88)

   K. Delegations

        CERCLA Enforcement Delegations

        Clarification of Delegations of Authority 14-14-
        A, 14-14-B, and 14-14-C under CERCLA

   L, Remedial Actions

        Guidance on Remedial Actions for Superfund
        Sites with PCB Contamination - SMR Rec. #23

   M.Enforcement Strategy

        Superfund Enforcement Strategy and
        Implementation Plan

        Pre-referral Negotiation Procedures for
        Superfund Enforcement Cases

   N. Inspector Training Requirements

        CERCLA Implementation of Inspector Training
        Requirements for OSCs/RPMs at the
        Intermediate Level in STEP and First Line
        Supervisors

        Guidance on Applicability of  EPA Order 3500.1
        to CERCLA Staff

        CERCLA Implementation of the Training
        Requirements of EPA Order 3500.1 - Inspector
        Training

   0. Risk Assessment

        Endangerment Assessment Guidance (Porter)
DATE
07/11/88
09/13/87

04/04/90




08/15/90




11/03/90


10/12/90




04/03/91




11/28/88


10/19/89
OSWER
NUMBER
Exempt
9836.2

9012.10-1




9835.4-01*




9800.0*
9842.211




9842.0


9842.1
11/22/85
9850.0-1'
 * = Policies dated after 8/14/90
**  = Policies that have been superseded by later policies
                                                 8

-------
                            CERCLA Enforcement Policy Compendium Index By Date
    DATE

    08/03/83


    08/26/83


    08/29/83
POLICY

Cost Recovery Referrals (Sniff)


Cost Recovery Actions under CERCLA (Price/Thomas)


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

9832.0


9832.1


9832.2
    09/08/83
Guidance on the Use and Issuance of Administrative Orders
Under Section 106 (Price/Thomas)
9833.0*
    01/26/84
Releasing Identities of Potentially Responsible Parties in
Response to FOIA Requests (Lucero/Sniff)
9834.0
    02/21/84
    05/24/84
Issuance of Administrative Orders for Immediate Removal
Actions (Thomas)


Guidance Regarding CERCLA Enforcement Against Bankrupt
Parties (Price)
9833.1



9832.7
    06/13/84
Liability of Corporate Shareholders and Successor
Corporations for Abandoned Sites Under CERCLA (Price)
9832.10
    10/02/84
EPA/State/Relationship in Enforcement Actions for Sites on
the National Priorities List
9831.3'
    12/05/84
Interim CERCLA Settlement Policy (Thomas/Price/Habicht, 50
FR 5034 2/5/85)
9835.0
    05/01/85
Guidance on Drafting Consent Decrees in Hazardous Waste
Cases (Price/McGraw)
9835.2
    07/12/85
    07/30/85
    10/09/85
Small Cost Recovery Referrals (Stiehl/Lucero)


Preparation of Hazardous Waste Referrals (Stiehl)
Timely Initiation of Responsible Party Searches, Issuance of
Notice Letters, and Release of Information (Lucero)
9832.6


9837.1


9834.2
    11/21/85
Procedural Guidance on Treatment of Insurers under CERCLA
(Price)
9834.5
    11/22/85
    12/23/85
Endangerment Assessment Guidance (Porter)


Policy for Enforcement Actions Against Transporters Under
CERCLA (Lucero/Stiehl)
* = Policies dated after 8/14/90
** = Policies that are superceded
9850.0-1**


9829.0

-------
    DATE

    03/14/86



    05/23/86


    06/27/86



    02/12/87



    05/16/87




    05/29/87



    06/05/87


    06/12/87



    06/12/87


    06/19/87



    07/10/87



    07/16/87



    07/31/87



    09/13/87


    09/21/87



    09/22/87


    10/06/87
POLICY

Reporting and Exchange of Information on State Enforcement
Actions at National Priorities List Sites (Porter)


Revised Hazardous Waste Bankruptcy Guidance (Hays)


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


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


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


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


Entry and Continued Access Under CERCLA (Adams)


Consent Orders and the Reimbursement Provision Under
Section  106(b) of CERCLA (Lucero/Leifer)


Cost Recovery Actions/Statute of Limitations (Lucero)


Interim Guidance on Settlements with De Minimis Waste
Contributors (Adams/Porter) (52 FR 24333, 6/30/87)


Covenants Not to Sue Under SARA (Adams/Porter/Habicht)
(52 FR 28038, 7/27/87)


Interim Guidance on Use of Administrative Penalty Provisions
of Section 109 of CERCLA and Section 325 of SARA (Adams)


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


CERCLA Enforcement Delegations


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


Guidance on Federal Superfund Liens  (Adams)


EPA Interim Guidance  on Indemnification of Superfund
Response Action  Contractors (Porter/Kinghorn)
OSWER
NUMBER

9831.2
9832.8


9832.5



9835.4



9839.1




9833.3**



9829.2


9833.2



9832.9


9834.7



9834.8



9841.1**



9838.1



9836.2


9835.2b



9832.12


9835.5
* = Policies dated after 8/14/90
** = Policies that are superceded

-------
                   United States
                   Environmental Protection
                   Agency
    Office of
    Solid Waste and
    Emergency Response
9380.0-17FS
August 1991
                   Furthering the  Use  of Innovative
                   Treatment Technologies  in
                   OSWER  Programs
Introduction

The Office of Solid Waste and Emergency Response
(OSWER) is seeking to further the use of innovative
treatment technologies to permanently clean-up contami-
nated sites in the Superfund, RCRA, and Underground
Storage Tank (UST) programs. According to a directive
from OSWER's Assistant Administrator Don Clay, "...we
must invest the necessary resources and take the risks
now to develop the technologies necessary to fulfill the
long-term needs of our hazardous waste clean-up pro-
grams." The directive, which was signed on June 10,
1991, includes a forwarding memorandum to EPA re-
gions that calls for technological leadership and a sense of
responsible urgency to prevent expenditures in pursuing
less effective or more costly remedies.  This fact sheet is
tased on OSWER Directive 9380.0-17.

Reasonable risk-taking is encouraged in selecting innova-
tive treatment technologies that are capable of treating
contaminated soils, sludges, and ground water more effec-
tively, less expensively, and in a manner more acceptable
to the public than existing conventional methods.

"Innovative treatment technologies" are newly-developed
technologies that lack sufficient full-scale application data to
ensure their routine consideration for site remediation. They
may be new technologies, or may already be in use for various
industrial applications other than hazardous waste remedia-
tion.  As such, innovative technologies are not part of stan-
dard engineering practice or the competitive market process
where available alternatives are routinely presented to the
government and private sector. In functional terms, OSWER
labels as "innovative" those treatment technologies other
than incineration and solidification/stabilization for source con-
trol, and other than pumping with conventional treatment for
ground water.

Inherent risks associated with early technology use serve
as very serious impediments. The directive calls on po-
tentially responsible parties, facility owners/operators,
and consulting engineers to constructively work with un-
   Etainty to further the application of technologies that
    truly innovative. The directive also calls on EPA re-
   nal and headquarters managers to support Remedial
Project Managers and On-Scene Coordinators in their ef-
forts to use new technologies.

Innovative treatment technologies should be routinely con-
sidered as an option in engineering studies where treat-
ment is appropriate.  They should not be eliminated from
consideration solely because of uncertainties in their per-
formance and cost. These technologies may be found to be
cost-effective, despite the fact that their costs are greater
than conventional options, after consideration of potential
benefits including increased protection, superior perfor-
mance, and greater community acceptance. In addition,
future sites will benefit by information gained from the
field experience.

The directive sets forth several initiatives and new proce-
dures that will provide incentives for broader use of inno-
vative technology.  Some of these initiatives are directed
toward potentially responsible parties and owner/opera-
tors, since these groups will be assuming a larger share of
the remedial projects in the future. Other new initiatives
are intended to remove impediments to the first-time use
of new equipment. The directive also encourages wider
application of available resources and tools and highlights
some important on-going program efforts.


New Initiatives

1. Superfund  Innovative Technology Start-Up Initiative

OERR will be revising its procedures for setting Remedial
Action funding priorities to give more consideration to in-
novative technologies. Expedited funding of Fund-lead re-
medial design and construction projects that involve
innovative treatment technologies will move the agency to-
ward the Superfund program's goals for technology devel-
opment and will provide data to support future Records of
Decision (RODs).

This initiative  also provides contract flexibility in the
start-up phase of selected remedial and removal actions to
assist vendors  in establishing operations that satisfy per-
formance  standards. In an effort to remove some of the
impediments to the use of new full-scale equipment, this
                                                                         Printed on Recycled Paper

-------
initiative will provide financial support for initial start-up
and shake-down prior to beginning actual remediation.
Funds are not targeted at making the technology "work
at any cost", but in establishing performance adequacy of
the technology prior to the onset of the contracted clean-
up. Contracting strategies are being considered to com-
pensate vendors regardless of whether or not they are
able to meet performance requirements for a portion of
the site remediation.

2. Dual Track RI/FS Initiative (Superfund)

EPA regions may fund additional treatability studies and
engineering analyses for promising treatment technolo-
gies that would otherwise be considered unproven or too
early in the development process. For PRP-lead sites ear-
ly in the planning process, this initiative encourages the
use of treatability studies to ensure that  alternative rem-
edies are thoroughly evaluated and considered in the
ROD. Even if, in a particular case, there may be some
doubt as to EPA's ability to recover the costs for these ad-
ditional studies, they should nonetheless be pursued be-
cause of their value to the overall program.

3. Tandem ROD Evaluation Initiative (Superfund)

Primarily applicable to PRP-lead sites (though also to
some Fund-lead sites), this program will  enable regional
staff to rapidly evaluate the efficacy of a PRP-proposed in-
novative remedy that is offered in tandem with the pri-
mary one approved in the  ROD. Both remedies would be
part of the proposed  plan.  The alternate solution would
be approved in the ROD on a contingent basis but would
undergo further development and pilot testing during the
design period of the primary technology.  Tandem RODs
move the process of cleanup toward closure while leaving
room for PRPs with an interest in innovative technologies
to pursue additional pilot tests to demonstrate an alter-
nate approach that is both innovative and potentially
cost-effective. The OSWER/ORD Technical Support Cen-
ters and the SITE Demonstration Program will provide
RPMs with technical support for evaluation of PRP work.
When considering a tandem ROD, the region should con-
sult with ORD concerning the scope of effort required for
the evaluation.

If, after testing and evaluation, the innovative technology
is chosen for implementation but the process has caused
significant delays to  the schedule, the region may consid-
er the engineering problems of making the full-scale unit
operational when assessing stipulated penalties. That is,
in limited cases, stipulated penalties should not be im-
posed if the delays are the unavoidable result of the use of
an innovative process.

4. Removal Program Initiative (Superfund)

It is OSWER policy to further the use of innovative tech-
nologies through the removal program. The relatively
small waste volumes and streamlined contracting proce-
dures of the removal program provide an opportunity to
complete clean-up projects and provide documentation on/
"lessons learned".

The potential of the removal program for these applica-
tions has not been realized because time constraints often
favor excavation and off-site disposal or treatment and
also because of the absence of clear legislated goals re-
garding the use of new technology. This directive is
meant to clarify EPA's position on this issue and to en-
courage the use of innovative technologies for all actions,
including time-critical actions, where feasible. These
projects are expected to fulfill an important role in adding
to our knowledge on promising new technologies.

5.  RCRA Corrective Action and Closure
    Innovative Technology Initiative

This initiative encourages the regions to conduct treatabili-
ty or technology demonstration studies at corrective action
and closure sites to gain additional information on the use
of innovative treatment for contaminated soil and debris.

EPA is developing best demonstrated available technology
(BDAT) treatment standards for contaminated soil and de-
bris at CERCLA and RCRA corrective action and closure
sites.  These sites present unique treatment problems
that were not considered when developing the current
BDAT standards which were based on data from the
treatment of industrial process wastes.  There is general
agreement that wide scale use of incineration is not ap-
propriate for soil and debris and there is a need to explore
alternative approaches.

The current schedule is to promulgate a rule for the treat-
ment of debris in May 1992 and for soil in April 1993.
Prior to publication of these final rules, a site-specific
treatability variance process (40 CFR 268.44 (h)) is avail-
able for contaminated soil and debris to establish an al-
ternative standard for specified waste  at individual
sites.  The variance process, along with applicable treat-
ment guidance levels, is described in Superfund LDR
Guide #6A (OSWER Directive 9347.3-06FS, July 1989),
and is intended to be used as an interim approach until
final standards are established.

The regions should work with owner/operators to select
pilot-scale projects that can provide data on the capability
of technologies and the treatability of different wastes.
Projects should be carefully selected to maximize the util-
ity of data and likelihood of success.

Authority for issuing site-specific variances for contaminated
soil and debris has been delegated to the regions.  The faciljl
and EPA, in collaboration with the state, can implement val
ances for on-site demonstrations through two mechanisms:
temporary authorization under the Permit Modification Rule,
or 3008(h) orders for interim-status facilities.

-------
6. Demonstration Projects at Federal Facilities
   (Superfund, RCRA, and UST)

(PA is exploring the use of Federal Facilities for both
site-specific technology demonstrations and as test loca-
tions for evaluation of more widely applicable technolo-
gies.  Regions are encouraged to suggest innovative
approaches and to be receptive to proposals for innovation
from Federal Facility managers, e.g., by building timing
and performance flexibility into compliance agreements
in acknowledgment of the uncertainties associated with
innovation. Federal Facilities often have characteristics
that make them desirable for applying innovative ap-
proaches: large area, isolated locations, controlled access,
numerous contamination problems, and increasingly ac-
tive environmental restoration programs.

The Office of Federal Facilities Enforcement (OFFE) and
the Technology Innovation Office (TIO) will work with
the regions to identify locations for test and evaluation
activities and to  develop policies and guidance to ensure
that support for  innovation is congruent with other pro-
gram and environmental objectives.

7. Federal Technology Transfer Act

During the clean-up planning and implementation pro-
   Es, PRPs or owner/operators should be reminded of
   opportunity to engage EPA in evaluation studies or
   er arrangements (at their expense) to determine
whether an innovative technology would be operative in
the situation they are facing or other similar situations.
Under the Federal Technology Transfer Act (FTTA) of
1986, cooperative agreements related to research, de-
velopment, and  technology transfer will allow the PRP
to reimburse EPA for facilities, support services, and
staff time spent in joint evaluation  of early technology
treatability or pilot studies.

Since this program is conducted in the research and de-
velopment arena, it offers an opportunity for non-adver-
sarial interaction outside the regulatory context. This
opportunity should be especially advantageous to
(1) PRPs and owner/operators capable of early planning
for technology options at a few sites and desirous of early
EPA input, as well as (2) PRPs and owner/operators that
will be faced with a number of similar waste sites in the
future—under Superfund, RCRA Corrective Action, and
the UST program—who want to develop more uniform,
cost-effective technology proposals for such sites.
Implementation
  ,e first six initiatives involve field testing new technolo-
    that may benefit from technical assistance from
     . ORD represents an objective third party that can
easily be accessed through the existing OSWER/ORD
support structure. This structure consists of five labora-
tories that constitute the Technical Support Centers (both
for Superfund and newly established for RCRA), the Su-
perfund Technical Assistance Response Team (START)
Program, the Bioremediation Field Initiative, and the Su-
perfund Innovative Technology Evaluation (SITE) Pro-
gram. OSWER has asked ORD to give priority to
requests for technical assistance under this directive.

Broader Application of  Existing

Policies, Available Resources,

and Tools

Furthering Innovative Remediation at Leaking
UST Sites

State and local UST programs have identified 100,000
confirmed leaks, and this number may triple in the next
several years. Most site remediation involves pumping
and treating ground water and excavation and off-site
treatment of contaminated soils. Regional offices should
increase their efforts to make state and local managers
and staff, as well as clean-up consultants and contractors,
more familiar with non-traditional but proven technolo-
gies. Headquarters will continue fostering the develop-
ment of new tools and techniques and should increase its
support of regional efforts to achieve broader use of im-
proved technologies.

Further Enabling State Innovative Technology
Leadership

The CERCLA core funding program provides an opportu-
nity to assist states in establishing innovative technology
advocates. Cooperative agreements with state response
programs may be a vehicle to support and promote  the
use of innovative technologies in state CERCLA pro-
grams, with spinoff benefits for their RCRA and UST  pro-
grams as well.

In addition, regions should be open to assisting states in-
terested in furthering technology development and  en-
courage state applications for authority for RCRA R&D
permitting, permit modification, treatability exclusion,
and Subpart X permitting. States may also want to work
directly with Federal Facilities in developing pilot sites
for innovative technologies.  For the reasons discussed in
the section on Federal Facilities above, these sites are of-
ten good candidates for such development projects.

Model RI/FS Work Plan and PRP Notice Letter
Demand for Innovative Options

Some regions have issued special notices containing a
Statement of Work and administrative order language re-
quiring the responsible party to evaluate the use of inno-
vative technologies at a particular site. This procedure

-------
should receive broader use at Superfund sites where al-
ternatives for remediation are being considered for analy-
sis in the RI/FS and where prerequisite treatability
studies are required. This requirement in the special or
general notice letters will help facilitate the development
and use of innovative treatment technologies by the pri-
vate sector.  Specific language for this approach can be
developed from OWPE's guidance document entitled
"Model Statement of Work for RI/FSs Conducted by
PRPs" (OSWER Directive 9835.8).

Advocacy and Funding of Treatability Studies

Superfund program policy requires that treatability
studies be conducted to generate data to support the
implementation of treatment technologies. Funds are
budgeted annually in the SCAP based on expected
need.  Data and reports should be sent to Glen Shaul at
RREL for inclusion in the ATTIC database. The correct
protocol and format for these reports is in EPA's "Guide
for Conducting Treatability Studies Under CERCLA"
(EPA/540/2-89/058).  Oversight funding for evaluating a
PRP-lead treatability study should also be requested
through the SCAP budget process. Oversight of PRP-
lead treatability studies may be funded through the en-
forcement budget. If a PRP recommends use of an
innovative treatment at a site, but current treatability
study data on the technology are insufficient, EPA poli-
cy allows the Agency to conduct and fund technology-
specific treatability studies.  Cost  of these studies are
recoverable under Section 107 of CERCLA.

Tracking and Expediting SITE  Demonstrations

OSWER is encouraging greater participation in the SITE
program in response to  a recent Inspector General audit
of the  program that focused on delays in matching Super-
fund sites with technologies.  ORD  management has also
agreed that SITE demonstration projects must be more
responsive to regional needs for treatability data.

The SITE program will make the design of technology eval-
uation sufficiently flexible to meet the regional offices'
needs  for treatability studies before remedy selection is
made. Based on an ORD internal management review of
the SITE program, changes are underway to make the
program a more integral component of regional Super-
fund site activities.


Existing Program Efforts

OSWER has several other ongoing efforts directed toward
furthering the application of innovative alternatives. These
represent important resources that should continue to be
used by the  UST, RCRA, and Superfund Programs.

Technical  Support and Information Management

EPA maintains several computer database that may be
accessed for information on treatment technologies.
These databases include the Alternative Treatment Tech-
nology Information Center (ATTIC), the Cleanup Infor-
mation (CLU-IN) Bulletin Board, the ROD Database, the
Hazardous Waste Collection Database, and the Comput-^
erized On-Line Information System (COLIS). These sys
terns include information on the application of innovativ
technologies and may be used to aid networking among
OSCs and RPMs.

Technical assistance is available to Superfund and RCRA
staff through ORD's Technical Support Centers and the
Environmental Response Branch of OERR. Part of this
effort involves networking among project managers
through the Engineering and Ground Water Forums. In
addition, as part of an initiative to provide direct techni-
cal support to OSCs and RPMs, the Superfund Technical
Assistance Response Team (START) has been established
to help evaluate the potential use of technologies.

Bloremedlatlon Field Initiative

Begun in the fourth quarter of FY 1990, this program is
intended to provide more real-time information on the
field application of biotechnology for treating hazardous
waste. The major focus of this initiative is to furnish
direct support in evaluating full-scale cleanup
operations and technical assistance for conducting
treatability and pilot-scale studies.

Eliminating Contract Impediments

Under the Federal Acquisition Regulations, firms are(
restricted from performing both the design and
construction of a project. EPA has determined that this
applies only to the prime contractor responsible for the
overall design, and not to the subcontractors
performing treatability studies.

Innovative technology is considered a special exception
from general conflict of interest guidelines. EPA will
permit contractors and/or subcontractors who perform
evaluation of innovative technologies for the Agency to
later work for the PRPs in as many instances as
possible.


Additional Information

Copies of the policy (OSWER Directive 9380.0-17) and ad-
ditional  copies of this fact sheet are available from:

     National Technical Information Service (NTIS)
                Springfield, VA 22161
                Phone (703) 487-4650

Agency and State employees may obtain copies of the di-
rective or this fact sheet from the Superfund Document
Center,  U. S. Environmental Protection Agency, Room,
2514, 401M Street S.W., Washington, DC 20460. Th((
telephone number is FTS or 202/382-5628.

-------
    DATE

    10/19/87



    10/19/87
POLICY

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


Interim Model CERCLA Sec.l22(g)(4) De Minimis Waste
Contributor Consent Decree and Administrative Order
Guidance (Reich/Lucero) (52 FR 43393, 11/12/87)
OSWER
NUMBER

9834.1



9834.7-la
    10/20/87
Evaluating Mixed Funding Settlements (Porter/Adams) (53 FR
8279, 3/14/88)
9834.9
    11/13/87
Revised Procedures for Implementing Off-site Response
Actions (Porter)
9834.11
    01/14/88
Expansion of Direct Referral of Cases to the Department of
Justice (Adams)
9891.5A
    04/07/88
Interim Final Guidance Package on Funding CERCLA State
Enforcement Actions at NPL Sites (Porter)
9831.6a-6d
    05/16/88
Interim Guidance on Potentially Responsible Parties
Participation in Remedial Investigations and Feasibility Studies
(Porter) [Revised]
9835.1a
    05/27/88
Interim Policy on Mixed Funding Settlements Involving the
pre-Authorization of States or Political Subdivisions
(Porter/Adams)
9834.9a
    06/07/88
Guidance on Drafting Decisions not to Take Cost Recovery
Actions (Cannon)
9832.11
    06/21/88
Supporting State Attorneys General CERCLA Remedial and
Enforcement Response Activities at NPL Sites
(Longest/Cannon)
9831.7
    07/11/88
Reporting Exemptions for Federally Permitted Releases of
Hazardous Substances (Thomas) (53 FR 27268, 7/19/88)
Exempt
    07/29/88


    08/25/88
Superfund Cost Recovery Strategy (Porter)


Guidance on Use and Enforcement of CERCLA Information
Requests and Administrative Subpoenas (Adams)
9832.13


9834.4-A
    09/26/88
Waiver of Headquarters Approval for Issuance of RD/RA
Special Notice Letters at the Time of ROD Signature
(Longest/Diamond)
9834.10-la
    10/21/88
Counting State-lead Enforcement NPL Sites Toward the
CERCLA Section 116(e) Remedial Action Start Mandate
(Porter)
* = Policies dated after 8/14/90
** = Policies that are superceded
9831.8

-------
    DATE

    11/03/88



    11/17/88
POLICY

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


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

9836.0-1A



9835.6
    11/18/88
    11/28/88
    12/14/88
    02/06/89
Initiation of PRP-financed Remedial Design in Advance of
Consent Decree Entry (Adams and Porter)


Guidance on Applicability of EPA Order 3500.1 to CERCLA
Staff
Interim Strategy for Enforcement of Title in and CERCLA
Section 103 Notification Requirements


CERCLA Community Relations Mailing List
(Diamond/Longest)
9835.4-2A



9842.0



9841.0



9836.2
    02/07/89


    02/07/89
Model Notice Letters (Diamond)


Revisions to the Interim Guidance on PRP Participation in
Remedial Investigations and Feasibility Studies
(Porter/Diamond)
9834.10


9835.2a
    02/24/89


    03/01/89
Guidance on CERCLA Section 106 Judicial Actions


Interim Guidance on Administrative Records for Selection of
CERCLA Response Actions
9835.7


9833.3A**
    05/08/89
Interim Final Guidance on Preparation of Superfund
Memoranda of Agreement (SMOAs) (Diamond/Longest)
9375.0-01
    05/16/89
Administrative Penalty Procedures Interim Final Rule (54 FR
21174,5/16/89)
9841.1 A
    06/02/89
Model Statement of Work for a Remedial Investigation and
Feasibility Study Conducted by PRPs
9835.8
    06/06/89
Guidance on Landowner Liability Under Section 107(a)(l) of
CERCLA, De Mim'mis Settlements under Section 122(g)(l)(b)
of CERCLA, and Settlements with Prospective Purchasers of
Contaminated Property (Reich/Cannon)
9835.9
    06/12/89
Procedures for Transmittal of CERCLA and RCRA Civil
Judicial Enforcement Case Packages to Headquarters
(U nterberger/Diamond)
9891.1-la
* = Policies dated after 8/14/90
** = Policies that are super-ceded

-------
    DATE

    06/21/89
POLICY

Model Litigation Report for CERCLA Sections 106 and 107
and RCRA Section 7003
OSWER
NUMBER

9835.11-1
    06/21/89


    06/29/89
Revised EPA Guidance for Parallel Proceedings


PRP Search Supplemental Guidance for Sites in the Superfund
Remedial Program (Diamond)
9843.0


9834.3-2a
    08/11/89
Submittal of Ten-Point Settlement Analyses for CERCLA
Consent Decrees (Diamond/Unterberger)
9835.14
    08/28/89
Arbitration Procedures for Small Superfund Cost Recovery
Claims
 Final Rule (53 FR 23174, 5/30/89)
9832.17
    09/14/89
Notification of Out-of-State Shipments of Superfund Site
Wastes (Canon)
9330.2-07
    10/19/89
CERCLA Implementation of the Training Requirements of
EPA Order 3500.1 - Inspector Training
9842.1
    12/06/89


    12/20/89
Interim Municipal Settlement Policy (54 FR 51071,  12/12/89)


Methodologies for Implementation of CERCLA Section
122(g)(l)(a) De Minimis Waste Contributor Settlements
(Diamond/Unterberger)
9834.13


9834.7-lb
    01/30/90
Model Administrative Order on Consent for Remedial
Investigation/Feasibility Study
9835.3-1A
    01/31/90
Final Model Litigation Report and Complaint for CERCLA
Section 104(e) Enforcement Initiative
    02/06/90


    02/14/90


    03/01/90
Multi-Media Settlements of Enforcement Claims (Strock)


FY 90 "UAO Strategy" (Clay/Strock)
Releasing Information to PRPs at CERCLA Sites
(Diamond/Unterberger)
9891.6


9870.1 A


9835.12
    03/07/90
Guidance on CERCLA Section 106(a) Unilateral
Administrative Orders for Remedial Design/Remedial Action
(Clay/Strock)
9833.0-la
    03/30/90
Model Unilateral Administrative Order for Remedial Design
and Remedial Action under Section 106 of CERCLA
9833.0-2(b)
* = Policies dated after 8/14/90
** = Policies that are superceded

-------
    DATE

    04/04/90
POLICY

Clarification of Delegations of Authority 14-14-A, 14-14-B,
and 14-14-C under CERCLA
OSWER
NUMBER

9012.10-1
    06/11/90
Integrated Timeline for Superfund Site Management
(Clay/Strock)
9851.3
    06/13/90


    08/15/90
EPCRA/CERCLA Penalty Policy
Guidance on Remedial Actions for Superfund Sites with PCB
Contamination - SMR Rec. #23
9841.2


9835.4-01*
    08/28/90
Performance of Risk Assessments in Remedial
Investigation/Feasibility Studies (RI/FSs) Conducted by PRPs
9835.15'
    08/29/90
Transmittal of Model Consent Decree for CERCLA Section
104(e) Information Request Enforcement Actions
9834.14*
    09/27/90
Statement of James Stroch before the House Subcommittee on
Policy, Research & Insurance:  Insurer Liability for Cleanup
Costs of Hazardous Waste Sites
    10/12/90
Pre-referral Negotiation Procedures for Superfund Enforcement
Cases
    11/03/90


    12/03/90
Superfund Enforcement Strategy and Implementation Plan


Final Guidance on Administrative Records for Selection of
CERCLA Response Actions
9800.0*


9833.3A-1*
    02/22/91
Guidance on Preparing and Releasing Waste-in Lists and
Volumetric Rankings for Information Release Under CERCLA
Section 122 (e)
9835.16*
    03/21/91
Written Demand for Recovery of Costs Incurred Under
CERCLA
9832.18'
    03/31/91


    04/03/91
Model Cost Recovery CD


CERCLA Implementation of Inspector Training Requirements
for OSCs/RPMs at the Intermediate Level in STEP and First
Line Supervisors
9842.2'
    04/10/91
Interim Agency Policy on Contribution Protection Clauses in
CERCLA Settlements
    04/18/91
Questions and Answers About the State Role in Remedy
Selection at Non-Funded-Financed State-Lead Enforcement
Sites
9831.9'
* = Policies dated after 8/14/90
** = Policies that are superceded

-------
    DATE

    05/07/91


    06/20/91
POLICY

Model Information Notice Letter to Local Governments
Evaluation of, and Additional Guidance on, Issuance of
Unilateral Administrative Orders (UAOs) for RD/RA
OSWER
NUMBER

9834.16*


9833.2c*
    07/01/91
Guidance on Oversight of Potentially Responsible Party
Remedial Investigations and Feasibility Studies, Vol. 1
9835.Ic*
    07/01/91
Guidance on Oversight of Potentially Responsible Party
Remedial Investigations and Feasibility Studies, Vol. 2
9835.Id*
    07/02/91
Supplemental Guidance on Performing Risk Assessments in
Remedial Investigation Feasibility Studies (RI/FSs) Conducted
by Potentially Responsible Parties (PRPs)
9835.15a*
    07/02/91
Administrative Order on Consent for Remedial
Investigation/Feasibility Study
9835.3-2 A
    07/02/91
Administrative Order on Consent for Remedial
Investigation/Feasibility Study (Annotated Copy)
9835.3-2A
    07/02/91
    07/02/91
Model Statement of Work for a Remedial Investigation and
Feasibility Study Conducted by Potentially Responsible Parties


Model Statement of Work for a Remedial Investigation and
Feasibility Study Conducted by Potentially Responsible Parties
(Annotated Copy)
9835.8A



9835.8A
    07/03/91
Policy Towards Owners of Residential Property at Superfund
Sites
9834.6*
    07/08/91


    04/02/92
Superfund Program, Model CERCLA RD/RA Consent Decree


Accelerating Potentially Responsible Party Remedial Design
Starts: Implementing the 30-Day Study
9835.4-2b*
* = Policies dated after 8/14/90
** = Policies that are superceded

-------

       i        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
\ AAp^ ?                   WASHINGTON, D.C. 20460

      *
                            MAR 2 4  1989                      :<-• -.= -
                                                    50 I'D '.'.-13" -NO :M:= -•• '
 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                                   Pate      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

-------
   CERCLA
ENFORCEMENT
   POLICY
 COMPENDIUM
  VOLUME 1

-------
to
s

-------
                                                    OSVER « 9832.0
         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                . oe io«»e
                         3AUG1S83
                                                       • met o»
SUBJECT:  Cott Recovery Referrals
FROM:     Kirk F. Sniff *£e            .
          Acting Associate Enforcement Counsel

TO:       Regional Counsels,
          Regions I-X


      Recently, you provided my office with projections of
hazardous waste civil referrals to Headquarters through the
recainder of FY 1983.  Included in the projected total of 21
referrals were 19 cost recovery referrals.  Nearly all of
these actions would involve recovery of costs associated
with immediate removals.

     On July 27, 1983, we net 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-Vaste 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, I refer you
          to the draft guidance, "Coat Recovery Actions Under  .
          CTRCLA," which was distributed to the Regional Division
          Directors at their national meeting on May 11 and 12,
          1983, and to the Attached document entitled "Partial
          List of Document* Heeded to Support Cott Recovery." I
          strongly recommend that you include copies of the sup*
          porting documents in tht referral package.  If for
          some reason this is not possible, the referral package
          should clearly identify tht sptcific documents which
          support your claims.  Ultimately, this documentation
          will have to be provided to DOJ.  If you have questions
          regarding documentation in your specific cases, please
          contact the appropriate Regional coordinator in ay
          office.

-------
                                                   CSVE?, t 9832.0
    *     UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                       WASHINGTON. DC »0««0

                                                       C'»'Ct
SUSJZCT:   Cost  Recovery  Referrals


FROM:      Kirk'  F.ftsr.iff
           f — ~ t «• gl ^£^^^ *• ^ • a ~ 0  7»*^i^^
           A *• • .1. . l .-. 55**~*&~C  • ••—w.
~u •       0P'"-W  C -a--
*<^.       W«M  *»»»&••

     On August 2,  1953,  I  issued  a  memorandum  siatir.g several
general policies  regarding  the  processing  p^f  referrals ur.cer
5107 of CIRC1A.   Since  that  time, a number of  yjau have raised
questions regarding ay  memorandum.   This  is intended to provide
further clarification.

        '  1.  The  memorandum states that  if,  for some reason,
the Regions have-not included copies of  supporting documentation
in the referral  pacn/.^e, the-referral should  clearly identify
the specific documents  which support the  claims.  This
identification should be in  the fora of  a  specific inventory
of the supporting  documents,  indicating  the identity,  Iccatirr.
and custodian of  the documents.   A  general averment that
documentation  is  "available"  will not-suffice.

          2.   The memorandum states that  DCJ  will only file
those cost recovery claims  for  which thera—is  adequate docu-
mentation.  However, there may  be cases where  those claims
which can be prosecuted immediately are not substantial when
compared with the  total potential action.   For example, if  the
Region refers a  case seeking recovery of $200,000 but can only
document $8,000,  the Beadauarters 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 making your
recommendation you should  also  consider  other  important factors
such as the Statute of  Limitations, or the need to make a
                             iroof «f «•
     I hope this answers  some  of your  questions.   If you have
other questions please  feel  free to  raise  then.

-------
                                                  OSWE?. s 9632.C
 PARTIAL LIST OF DOCUMENTS NEEDE3 TO SUPPORT COST RECOVERY
 1.  Total Payroll expenditures for attorneys, with supporting
 time cards and tine sheets

 2.  Total payroll expenditures for technical personnel,
 with supporting time cards and time 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 labs
 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 Z and XI), copies of bills from lab
 to contractor and from contractor to EPA if  "SAS" camples;
affidavit from EPA official verifying contents of contractor
 summary: copy of Agency's authorization for Treasury to
pay contractor; vouchers from contractor to Agency
 requesting payment.

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

 f.  Per immediate removals:  contractor invoices certified
 by OSC; 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 THE

 COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION, AND LIABILITY ACT OF 1980
                 CERCLA)

-------
                                                        OSWER I 9832.1
                 COST RECOVERY ACTIONS UNDER CERCLA
                         TABLE OF CONTENTS
 I.      Introduction  	  1
 II.     Assembling A  Cost Recovery Action   	  3
 III.    Cltments of a Cost Recovery Action	4
        A.    evidence of Release or Substantial Threat
             of Release of a Hazardous Substance   	  6
        B.    Evidence of Responsibility of Defendant(s) ...  9
        C.    Evidence that Removal or Reaedial Action
             Taken by U.S. or State in Not Inconsistent
             With the National Contingency Plan	11
        D.    Proof of Costs of Removal or Remedial
             Action  by the U.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 Zn Event of
             No Response to Demand Letter	  27
       C.    Maintenance and Coordination ef
             Evidence Zn Ev«nt of Referral  	  29
V.     Note on Purposes and Use of This Memorandum  .....  31

Appendix A  (Costs Recoverable Under CERCLA)
                                                                  *
Appendix B  (Model Demand Letter)

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

-------
                                                                 t 9832.1
* -&L V      UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
• \^^^^^/ • r                    ........ 	_^ .  _ _  _
V"
  ''                     WASHINGTON 0 C 204tO
                           AUG 26Q83
MEMORANDUM
SUBJECT:  Guidance on Pursuing Cost Recovery
          Actions Onder CERCLA
FROM:     Courtney M. Price
          /Spec^lCounsel for Enforcenent
           .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
   _______~_^__                          •          x
     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 Kite,
•hall 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 cases in which the Agency
will authorize the use of CFRCLA funds from the Hazardous Substance

-------
                                                       OSS* I 9832.1
                               -2-

Response Trust Fund  (tht Fund) established by CERCLA for thtse
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 th* 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 I/ 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
T7The word 'site' as used herein applies to any location where a
release or spill has occurred, and mayhe used interchangeably witn
•facility- as defined in CERCLA $101(9).

-------
                              "3"                       OSWEB » 9832.1
 EPA-State cooperative agrrement, in every situation in which CERC1A
 funds are expended for site clean up, since each of these sites  is
 the subject of a potential cost recovery action.  The Office of
 Waste Programs Enforcement is preparing an additional cost docu-
 Mntation guidance;  please contact Lib by Scopino (382-4482)  for
 assistance.               v

 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/   Wher.e 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  to
 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  actions!  In matters 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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                                                        QSWER I 9832.1
                              -4-

 III. ELEMENTS OF A COST RECOVERY ACTION
     Under Section 104 of CERCLA, the U.S. or its authorized
 representative nay taJce removal or remedial action at a site
 when, inter alia, ary 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 J»107(a) for  (1)
 costs of removal or remedial  action incurred by the U.S. not
 inconsistent with the National Contingency Plan (NCP). 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 NCP.V  Section 104(5) 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 made by trustees under Section
T07 (a )(-1)(c) of CERCLA for damage to or loss of natural resources.
Howevtr, until regulations for assessment of natural resource
damages or destruction are promulgated pursuant to Section  301(c)
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.

-------
                               -5-                     OSWER I 9832.1


 for planning,  legal  and engineering services.4/

      Therefore,  to successfully pursue  a  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                 v

    2.      the  responsibility  of the defendantfs);  and

    3(a).   removal  or remedial actions taJcen by the U.S. or  the

 State  which were not inconsistent with  the  NCP £/; 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.£/  Even  so, the

 financial  condition  of the  responsible  parties may be  considered

 in  determining tJve feasibility of a cost  recovery  action.
*/For a'list of costs which  are  recoverable  under  CERCLA,  see
Appendix A.
5/  Although Agency policy  is  to-maintain evidence that  its
Fesponse 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
evidence of efforts by the Agency  to obtain  private  party response
action at the site.  The notice letters forwarded by the Agency
to potentially responsible parties and their responses are
examples of aueh evidence.

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                                 -«-                    OSCR I 9832.1
              *

    'The chief elements of a cost recovery action and the

 nature of evidence required to sustain them 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 must 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

 dee 40 CFR 302).  The definition should be consulted since it '

 does not include every pollutant or contaminant.2/

      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
 Hesigne*}  tb 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 may present an Imminent and substantial endanger-
 ment 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'.   It is not clear whether
 those persons may also be liable under  5107 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 and substantial endangernent.  The government
 intends to hold such persons liable for those costs under both section
 107 of CERCLA and the common law theory of restitution.

-------
                              -7-                        OSWEB « 9832.1

  collected must be sufficient to demonstrate this aspect of the
  case.
       There are three important considerations here.
       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/operator for any samples
  taken ranrt a split sample, if  requested).  Observance of  ehair.-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,  and
  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 substanc*  is present on the  site; (2) that a
 8/  NEIC Policies and  Procedures  Manual,  Kay,  1978  (rev.,  Dec.
 1981), EPA Document No.  330-9-78-001-R.

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                                 -8-
        . ,         '                                       OSWER t 9832.1
 release of the hazardous substance is substantially threatened or
' has occurred: and (3) what response is appropriate.  Only unusual
 circumstances (e.g.. to satisfy doubts over validity o-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 be tahen in accordance with EPA-approved
 protocols and procedures developed by NCXC 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) say be needed at the
 site in response to a release or threat of release.  Passage of
 time or deliberate interference by other parties nay 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 make 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.
      Pitld 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,

-------
                                 _9_                   OSCR 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 NEZC 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 CERCLA funds.
      Third, for ease of assembling the case and presenting it for
 trial, the following people should be identified hy 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 whb gave or refused to give, statements.
 B.   Evidence of Responsibility of Defendant(s)
      In most cases, the liability of defendants will be demonstrated
                                         *
 by establishing the elements in subsections (l)-(4) of C107(*).
 EPA personnel have a variety of techniques to gather evidence
 connecting the hazardous substance with the potentially responsible
 party or parties.  Fpr example, a deed or lease evidences the
 responsibility of owner or operator of the site.  Less formal
"evidence can also be helpful in tracing rcsponsiblity.  The operator's
 presence at the site over a period of tiae will usually t* 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.  In addition.

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                                .10-                    OSHER * 9832.1
 the  activities  of  operators  of  a  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 more 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  b« preserved,  if possible,
 or photographed, and the photographs ladled for identification
 and  future use  as  possible evidence.  Under certain  circumstances
 the  case  development team may decide to perform a chemical 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
under authority of RCRA Section 3007 and CERCLA Section 104fe)).
     Again, local residents, law enforcement officials or compe-
titors may 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 ot waste streams associated
with various industrial processes may be obtained from the Hazardous
and Industrial Waste Division (WR-565), Office of Solid Waste, U.S.
Environmental Protection Agency, 401 M Street, S.W., Washington, D.C.
20460.         .   .

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                               "~                      OS** f 9832.1
  .-C.  Evidence That  Removal  or Remedial  Action Taken  By the  D S  or
       State  Is Not  Inconsistent With  The National  Continoenev'pian
                      » .                            ~~  ~~ ^^^™^^™^^™^^™^^»
      Pursuant to Section  104  of CERCLA,  after information  is
 gathered  that a release has occurred  or  is  threatened,  a variety
 of  actions nay be taken by EPA or a State.  Among  those actions
 are:
      (i)  Investigations, monitoring, surveys, .testing  and other
 information  gathering as  may  b« 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 tenc is defined in  Section.
 101(23) of CERCLA,' and which'includes, without limitation, security
 fencing, provision of alternative temporary water  supplies,  anc*
 temporary evacuation and housing of threatened individuals.  In
 addition, EPA may take such other action as may be necessary
                                           m
 to prevent,  minimize or mitigate damage  to public  health, welfare
 or the environment,  such as removal of materials,  temporary  diking
and other easily accomplished  actions; and
      (iii)   'Remedial actions',  as the term is defined  in Section
 101(24) of CERCLA, including  installation of « clay cover, dredging
or txcavations, collection of  leachate 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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                                                         OSWER 4 9832.1
 storage, treatment or disposal of hazardoua 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 aust  be "not inconsistent" with the NCP.
 Therefore, the NCP should be referred to and all persons involved in
 the decision-making process should be faailiar with its requirements
 and limitations before decisions regarding actions are made 1_0/.
 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 wt-.ich,
 among the alternatives examined, is  least costly but  technologically
. feasible, reliable and adequately protects public health anc* the
 environment.   In 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.  In "immediate  removal*
 actions it will be especially important to document the circumstances
 which justify the need for immediate action.  As provided  in. section
 300.65 of the National Contingency Plan, an immediate removal is
 appropriate when the lead Agency determines tfiat 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,
 '7 Fed. Reg. 31180 (July 16, 1982).

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                                 -13-
                                                       OS-ER 19832.1
 Immediate removals are appropriate  in  such situations as:  1)
 human, animal, or food chain  exposure  to  acutely  toxic substances;
 2) contamination of a drinXing water supply;  3) fire ant«/or
 explosion; or 4) similarly acute situations.
     Evidence of the cost-effectiveness of a particular remedial
 action may be demonstrated by t.-_  .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 taking a particular remedial
action.
                                                               •
D.   Proof of Costs of Removal or Remedial Action by the U.S.
     or a State                                           , .
     Collecting evidence of coats 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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                                -H-                      OSWEB I 9832.1
   government cost recovery 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 FXFRA-registered
.   product (see Section 107(i)), or from a Federally-permitted release
   (see Section 107(j)).   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 fof tracking costs.
   while EPA prefers the  uniformity of a single accounting system,
   the particular method  of accounting may vary if it ensures accurate
   record keeping and preservation of all costs attributable to a
   particular site.   To further this objective, cooperative  agree"
—Bents 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-funrted
   sites.  This system generally involves the .assignment of  a unique
   accounting number to each specific site, and the charging of time.
                                                     •
   material and ether 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"                       OSJCR I 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 Office 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. 11/
LI/  The Emergency Response Division of the Office of Solid Waste
and Emergency Response of EPA is developing a  field manual entitled
•Colt Control Management for Superfund Removal* for immediate and  •
planned removal actions.  This manual presents a management system
for On-Seene Coordinators for controlling* verifying, and documenting
all costs incurred in a removal action.

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                                                              * 9832.1
 IV.  PROCEDCKAL  ISSUES
 A.   Timing ef  the Coit Recovery  Proceeding
     Whilt the  Office ef Waste  Programs Enforcem«nt will work with
 the  Region*! Program Office  in  setting priorities  for  cost  recovery,
 the  following basic timing guidelines arc 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
costs.          •           . .       •
     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.  In 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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                                                              f 9832.1
 B.   Statute of Limitations
      CERCLA does not contain a tin* limitation provision within
 which a cost recovery action Bust be brought.  Zn 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 United 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 year 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 Cir., 1980), cert,  den. 102 S.Ct. 125 (198D,
 the Fourth  Circuit  held that 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,  a defendant.sight well be expected to argue
 that the cause of action' accrues at the time funds are first
 expended on the site.  Zn order to avoid argument on this point.

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                                                        OS-ER ft 9832.1
                               -18-  -

 «nd  to  eliminate  a  potential  bar  to rtcovery,  the Agency  should
• attempt to  commence all  cost  recovery 'action within  three years of
 the  date  dollars  arc  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
Pollution 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 an*
several liability,  U.S. v. H/V Big Sam. 681 F.2d 432.4.19  (5th Cir.),
on pet. for reh., €93 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
CCRCLA ±2/, and by  Section 107(e)(2) of CCRCLA, which provides that
                •
nothing in CCRCLA "shall bar  a cause of action that an owner or
operator  or any ether person  subject to liability under this section...
has or would have by  reason of subrogation or otherwise against any
person."
127126 Cong. Rec., S.19964  (daily ed. Nov. 24, 1380);
TI6 Cong. Rec., H.11707  (daily ed. Dec. 3, 1980).

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                                                              9832.1
 The Department of Justice has interpreted this  section  as  confirm-
 ing a defendant's right of contribution against other responsible
 partiesr  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),  See.  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  nay  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
      i •
 themselves  on an appropriate  allocation of responsibility, EPA
 should proceed  with  legal  action  on a theory of joint and  several
 liability.
13/  Letter datecr"5e"cember  1,  1980,  from Alan A.  Parher,
Attorney General, Office of Legislative Affairs,  to Ron.
James J. Florio, 126 Cong.  Rec.  H11788  (daily ed.  Dec.  3,  1980).

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                                                          OSWE31 « 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 been 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 chase
 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 ZZI  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  he able  to answer reasonable questions
 posed by a recipient of  th^ letter.   Regional personnel should
 have referred  the ease 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-                      OS*CR I 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

         CERCLA);

      •   the location  of the  site;

      •   the presence  of a hazardous substance which was re-

         leased or threatened to  be released;

      •   in  general  terns, 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  'of response;

      •   the  total cost of the  response  activity  1_4/ broken down into

        general categories;
14/  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 problems
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 suns 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-                     OS*** * 9832.1

      •  a general statement  that  the Agency  believes  that  the
        recipient is a  responsible party and-liable for  the  sum
        •et 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
OWPE-, Regional Counsel* and Office of Enforcement Counsel-Waste.
The demand letter will-be sent  through the Office of  Waste Programs
       ^*
Enforcement for the signature of  the Director of OWPE unless
that requirement is specifically waived.  Xf a ease is referred
to DOJ, the DOJ ease attorney should sign the demand  letter.

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

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                                -23-
                                                       OSWB i 9832.1
 CERCLA  money  is  limittd;  Agency cleanup activities deplete  the
 fund  and  aoney 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
 Waste,  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 nay. 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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                                .24_                     O&SX. I 9832.1
                4
      Some  factors which  should  be  considered  in  the  development
 of  this  schedule are  the number 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 Batters.
 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
 by 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  OLEC, will select a program official to serve
 as the Case Team Leader.  The Case Team  Leader's function will be
 to:
     • focus efforts  to  develop, in advance of negotiations, the
       Agency's negotiating strategy and position on issues  that
       «ay 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
       case review sessions; and
     • define the Agency's objectives in accordance with applicable
       Agency guidances  and policies.

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                                 -25-                   QSWER t 9832.1
     On occasion,  the Team may  be  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 aad Headquarters Enforce-
 ment Counsel  managers,  in consultation with  the Director of owps,
 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 may  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-
ment, (or  the Special Counsel for  Enforcement until  the Assistant
                                   •
Administrator position  is established).'  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 litigatio
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 eo opposing parties.
     At the initial negotiation cession, the  lead attorney should
inform opposing .parties that while the Team has authority to negotiate
any agreements are  subject to the  approval of Enforcement Counsel and
                      4
OSWER.  The opposing parties  should also be advised  that the Agency
has established a deadline for  settlement.  The deadline should be
 •
disclosed  tc  tie responsible  parties.  After  the deadline, the
                       •
Agency will t&k* judicial action.

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                               ~26~                      OSHER » 9832.1
2.   Torn of Settlement Agreement
     CERCLA allows the Agency several ways the Agency could
settle a cost  recovery action:
     •  a consent decree
     •  an adainistrative 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 may allow some settlements in which the responsible
party agrees 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-
                                                        OSWER * 9832.1
 however,  the  Economic Analysis Division of the Office of Policy
 and Resource  Management (F7S 382-2764)  and the Financial Management
 Division  of the  Office of  Administration (ITS 382-5135) should  be
 consulted in  order  to obtain a review of the financial condition
 of  the  responsible  party 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  form 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 M Street, Washingto  -
D.C. 20460, for  establishment of a proper account. -
     e
F.   Procedure in Event of  No Response  to Demand  Letter
     If no response is received  to the  demand letter,  a final
determination .must  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
Mde by the Region  as  well  as staff at  Headquarters  at the time
      i
the demand letter is drafted.  This decision will initially  be
nade by the Regional Administrator* based on the  recommendation of
the Regional  Superfund Office and  the Regional Counsel.

-------
                                                        OSWER t 9832.1
                               -28-
 Reievant  factors  to  consider  include:
      (a)   the  strength  of evidence  connecting  the  potential Jefen-
           dant(s);
      (b)   the  availablility and aerit of  any defense.   Possible
           defenses* under Section 107 of CERC1A are generally that
           the  release 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
               t
    .  (e)   the  statute of limitations.
      Zn 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
a cost recovery action  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
other 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'                      OSKER f 9832.1
 affirmative decision must  be  made  by  the  Regional  Administrator in
 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,
 OCC 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 recommend 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 bt 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 iaportant 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.                     OS€R I 9832.1
      Each Agency,  office,  contractor  or  other  person  participating
 in  a  CERCLA  response  activity  should  maintain  documents  related to
 the activity for a period  of not  less than  six t€) years  after
 all response activities are finished  (consult  Appendix C  for a
 list  of  these necessary documents).IS/
      The Agency'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  '-stice 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 time, a complete file of all records involved
 in  the particular  case can be compiled and  delivered.to DOJ, witr.
 copies of the complete file made available  to  appropriate Regional
 and Headquarters legal and technical  personnel.
^S/  The period of six years is necessary because of the pos-
sibility that the claim may not accrue upon the first expenditure,
Additionally the litigation may be protracted: documents must
be kept for the tern of the litigation.                     t

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                                                      OSTCR « 9832.1
                             -31-
V.   Note on Purposes  and  Dse of This Memorandum
     The policy and proctdurts set  forth herein, and  internal
office procedures adopted  pursuant  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 nay 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 nemorandur., 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 FTS 426-7503.

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                                                      QS-ER I 9832.1

                            Appendix  A
                                                             v
                  Costs  Recoverable Undtr  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 may be  recovered from  a  responsible party.

Various  sections  of CCKCLA 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. thfet  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,
    testing, and other information-gathering
    necessary or appropriate to identify the
    existence'and extent of the release or
    threat thereof, the source and nature
    of the hazardous substances, pollutants
    or contaminants involved, and the extent
    of danger to the public health, welfare
    or tht environment.

2.  Planning, legal, fiscal, economic
    engineering, architectural, and
    other studies or investigations
SSl04(b),
(providing for recovery
of costs for removal.
actions, which, as
defined in $101(23)
include actions taken
under *104(b)).
Same

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                            Appendix A
                                                       QSWER * 9832.1
    necessary or appropriate to plan
    and direct response actions.


3.  Planning, legal, fiscal, economic,         same
    engineering, architectural and
    other services necessary to recover
    the cost of response actions.
          i
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-
    ment action under 5106).

5.  All costs of (A) removal and (B)           S10">(a) (4) (A)
    remedial action 'incurred by the O.S.
    Government or a State not inconsis-
    tent with the NCP.   Actions for which
    such costs may be incurred are

    (A)  Removal Actions (5101(23)):

         (1)  the clear-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, ninimixe or
              mitigate  damage to public .health*
            .  welfare or the environment which
              may otherwise- result from a
              release;
             •
         (6)  any monitoring to assure actions performed
              hy other  parties adquately protect  public
              health, welfare and the environment,  and
              meet EPA  criteria;
                         At

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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 $104(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 C10K24)  (without
          limitation)s

          (a)  storage;

          (b)  confinement

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

          (d)  clay cover;

          (t)  neutralization;

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

          (g)  recycling or reuse?

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                                              OS-CK * 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;


     (n)  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 not include:
            ?
     (a)  off-site transportation of hazardous
          substancesi

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

     unless it is determined that such actions are
     (A) more 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 f-rom a present
     or potential*risk which may be created by further
     exposure to the continued presence of the
     hazardous substances.

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Appendix A

   -v-
                                                         OS&ER | 9832.1
                   S107(a) (4)(B)
                   5107(4)(4)(C)
 6.    Any  other  necessary  costs  of  response
      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,
      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;

                (e)  air;

                (fi  water;         .        '      ~

                (g)  groundwater;

                (h)  drinhing 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 $301(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  from a release 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, State  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
the _             facility located at or about
[In addition,  there were releases and threatened releases of
pollutants and  contaminants that may present an imminent and
substantial danger to the public health or  welfare.]

          [On or  about          . 19	, EPA gave [oralI notice
to you                    (wnich was confirmed] by letter of
                •  19   » advising you regarding the referenced
facility and that you are a party who may be liable for money
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 wicl the Comprehensive Environmental
Response, Compensation and  Liability Act (CERCLA), 42 U.S.C.
$9601 et seq.,  (and other authorities (insert where pre CEPCLA
or non CERCLA expenditures)] 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 f               .   (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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                                                           * 9832.1
          Information available to EPA  indicates anonc,
tnin;s that you ( choase on« or more. of the bracketed clauses
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 of hazardous
substances 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 contaminants J at the facility {accepted
hazardous substances  [and pollutants and contaminants! for
transport to the facility which was selected by you].  Pursuant
to the provisions  of Section 107(a) of CERCLA {and other author-
ities  (insert where pollutants or contaminants involved and
where other law involved)], we believe that you are liable for
the payment of all costs expended on the site to tn* 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 expended by the Agency on the site pursuant
to authority of CERCLA].   (The names of other potentially
responsible parties receiving this request for payment are
enclosed with this letter to facilitate organization among
the identified parties concerning payment.)  Xf you  [or an
organized group of potentially responsible parties] desire to
discuss your liability with LEA, -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 th* site expenditures
and will subsequently pursue civil litigation against you.

                                   Sincerely*
Contact Person:

(Name)
(Title]
(Address]

ec::  Enforcement Counsel
      Regional Counsel
      State Agency

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                                                                     QSKER « 9832.1
 Appendix C
                                         »
      The following pages constitute • search  guide  that My be used by the
                                                                     •
 le^ional enforcement progran in gathering  documentation to support a cost
-recovery action.   In* search guide  format  !•  • chart with four columns, headed
 M  follows:   "Document", *»iginator",  'EPA Contact* and "Regional rile
 Location'.•   All of the  documents listed win probably not be available in all
 caaea,  nor will aach one neceaamzily enhance  the body of evidence in every case.
 Xt  tuat be decided en a  cm by-caae baaia exactly which pieces of doonentation
 should  be used as  supporting evidence.  The aaarch guide was meant to be an
exhaustive list of documents that should be considered.  It is suggested that
 the persons conducting the  file aaarch  for supporting documentation pull out
each document on the  list if it is  available.  It can be decided at a later time
which of  the  documents are  useful as evidence given the facts of the particular
     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 NO>.  Cost documentation will be the subject of another
guidance document that is currently under development.
• The fourth column, "Regional Pile location*, has meaning only if the Region
uses the filing systen described  in Appendix E.

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I. Evidence of • Itol
or the Ihieat of A- Release
   Document

 • Notification Reootd
   putsuant to Sec.
   I03(a| of CCMCIA
 • Notification R»ootd
   putsuant to Gee. lOJfc)
   of CERCtA
 • Recotd of notification
   of EPA-fQ-Bwigency
   Raaponse Division,
   EPA Regional
   Administrator or
   other EPA official
 • CtmpllJ
   Investigation
   Repott puteuant to
   Section I04(e) of
   CERCLA
 • other Ocmpllf
   Investigation or
   InspectIon/Audit
   Repotta puteuant.
   to etatutoty
   authority (e.g.,
   sec. 101J of ROM)
      Originator

    • Owner/Operator
      of facility
    • Oov't. officials
      leapondlng to the
      ptoblaa (Local,
      State or ftedaial)

    • Ounei/opeiatot of
      facility
    • Apptoptlat*
      officiate
      fodetal/State
      InvestIgatot
      ftedetal/State
      InvestIgatot
 iPA Oontact

• National Rasponae
  Center (NIC>
                           Piobable Pile Location*
                           • NCH (eee page 21,
                             tail let ffl)
  EPA-Rag I one
  EVA-HO-Hazaidous
  Site Gontiol Division
  EPA-Reglan, OBC
  EPA-R.A.
  CPA-HO*EleBtgency
  Responsible Division
• EPA-Raglon, CERCLA
  Enf ./Coif>l lance
  Ptoject Manager
• State Enfotcement/
  Otmpl lanoe Agency

• EPA-Rsglon, Apptop.
                           • Remedial Responeet
                             Dl sooveiy/Hasaid
                             Ranking Plle/Raglone/
                             HO
                           • NRC
                           • EPA-HO-EJwiyency Response
                             Division Removal Response
                             Pile
                             Section
                           • State fftfotoenent/
                             Onifillanoe Agency
                                 Hal  Reaponeei
                             Dl ecovety/Haxard
                             Ranking Pile
                           • Remedial  Roeponaei
                            Dl scoveiy/Matatd
                                    Pile
 •Unices othetwlse noted, thle asaiMes the documnte ate located In the Regional files
  and assumes the Raglans ate using the file etiuctuie outlined In Append I • E.

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                                                           -2-
I. Evidence of •
tha Itweat of • Release (continued)
   Docunent
   Originator
D'A Contact
Ptobable File location
   Note* ftoi
   calla^ cotreapondence,
   photogtaphs, or other
   fatm of tandm or
   Incidental obsetvatlon
   Odv*t. Officials
   I local. State,
   Fedetal)

   Public
   Signed wltnem atate-
   vents (deactlblng tha
   conditions leading
   up to the telease
   and the teleasa)
 • Ownet^Dpetator
   Facility
 • Ekv>loyees or
   Oontractois aaaoc.
   w/ facility
 • Pedeial/State
   InvestIgatoca
 • local officials
 • Public
          ( Enf./
Oxipl lance Project
Nanager

State Enf./
Oompl lance Agency

Nmlclpal Onwettinent
Offece (e.g., public
Health or Police Dept.)

EPA-teglon. Haste Mjt.
Division PtoJ. Manager
State Agency
 IteMedial Keapanaei
 Dlsoowety/ Hazatd
 Ranking Pile
 Renedlal Responset
 IMscoveiy/ Haxatd
 Ranking Pile

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     >
      'i
      .3     UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
•^    .
-------
                              -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 eit.^ie:

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-

 0     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/-

 0     Insolvency  of Responsible Party(s)  - 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 ar-uments 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.
2/   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 ooserve



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 an 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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                                                          OS*ER | 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     r
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-
               
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                               _7_                              f 9832.



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

 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) 4/, 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.

S/   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 be useful for settlement  consideration.  This system
requires a minimum of financial .::ita which will usually be available
from a 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 of the potentially responsible party would be sub-
stantially depleted by the. settlement which could present
significant problems for each claimant.
     It snould 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.
asse:s 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

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                                                           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 depleted 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 benefit 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 att -mpt to forestall  a State



settlement with a responsible party  should be made  only after
                                                                     T


serious consideration of all  factors involved, including:



•    the amount of CPA'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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                                                          USWER * 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

cpsts.   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 9832.1
                             -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 or 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

costs.


     However, §113(b) of CERCLA provides:

     "...  the United States district courts shall have exclusive
     original jurisdiction over all controversies arising unaer
    .this Act, without regard to the citizenship of the parties
     or the amount in controversy.  Venue shall lie in any district
     in wnich the release or carnages occurred, or in which the
     defendant resides, may "be found, or has his principal office

     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
                                                                   f
upon CERCLA and will be in U.S. District Court.  Likewise,  if
7/   In addition to  the restriction of  §113(b), there  are  additional
reasons why the State could not attempt collection  of  the  Federal
share of response costs.  Under CERCLA  S112(c)(3) and  28 USC  S516,
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;

0    coordination would avoid the necessity of maintaining two

     separate proceedings which would duplicate much of  the sa^e

     effort and resources'-; and

0    coordination of the claifns 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 rea.sons, 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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                                                         OSWER ft 9832.

                             -13-

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

 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 £/  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  £/.

     It  is not necessary to require  that a sing.le suit for cost

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

 more simple procedure,  and  avoid potential logistical proDlems,

 for each party to file  its  own  suit  separately, and then request
8/   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 *  9832.2
              4

                             -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 i n 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
   ,                  •  o                     •                 •
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 timer 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 LO/.
10/  See comment at footnote  9.

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                                                              « 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:aze 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

-------
                             -16-




prcpare 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. Selman at FTS 426-7503.
                                  *



Attachment

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                                                         OSfrER 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 claims of  the other  ftr  recc"«»r-- ~*
 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  site 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

-------
                                                   OSCR f 9832.2
                           Appendix
                              i i
 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 dace 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 against potential .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 jn L7.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 suras 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 Sections 306 and 10?

     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  (CEflCLA),
 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'
contribution to the site cleanup under CERCLA.

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                                                         OSTCR I 9832.:
                           APPES'LIX
                              ill


 7.   Dismissal By State of Pending Cost Recovery Action - Option- '

     The State does hereby agree that it will, not later than
 thirty  (30) days after the date of this Agreement,"cause to se
 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 ___i	,
 Docket No. 	, for recovery of any services, materials.
 monies or other thing of v.ai^e 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  Environmenta.
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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                                                OSWES * 9833.0
3 v r r A .V c r  yr v * -1 * * * *
            •^ ^*

-------
        Requirements  for  Issuance and Scope
        c:  §lC£i'a'-  .-.--ir isti'st: ve Orders	4

        ;..   weces.'ity  for "~etermination"	5

        = .   Necessity  frr Arfjal  CT ?.ur«?jte-«^
            Release o*  Hazardous  Sufcstar.ee	6

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

        T.   Necessity  fcr Exister.ee of Ifvinent
            »r.z  Surstar.t:a;  Er.dar.cerrerr	j
       E.  Notice  tc  Aff-frted  States	'.....<}

III.   Persons  to  Whc:r,  ar.  Order- "ay  Ee  Issued	1C

IV.    Criteria  for. Issuance of 5106  Orders	11

       A.  P.espcr.sirle  Parties' Financial  Status	12

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

       C.  Specificity  of  the  Nece'ssary Response  Action.  . 14

       D.  Arency'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	1?

       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
        %

v:i.   Opportunity to Confer	22

       A.  Planned Removals and Remedial Actions  	 22

       B.  Emergency  Situations.	23

-------
            the Crier .	".	.24

VIII.  Proofed.Te  ii  Order \ot Obeyed ..."	25

IX.    Note  cr. Purpose  ani Use- of 7.*.is Memorandum	26
Apper.Jix A:  N'rt if icat :o~.  Letter
Ap^~;x 5:  S=-;le  S^f.s'  Air.: - ; s trs : :v

-------
                           WASHINGTON DC 20««0
S'JfaJECT:  Guidance  Me.-.crcr.iur on Use ar.d Issuance of
          Administrative  Crders-'Under $106(a} of CERCLA
KPO.V:      L?"-  •"•! . T'r. eras
           Art:-.; Ass;st£-.t  Adr.l r.?.s trstrr t'cr Sri id
            ivsste  a.-.;  Erertjej-cy  Response
          Special  Csunsel  for  Enf orcewenr'-  •' ^

          Recicnal Atr;r. istratcrs ,  Re'ji^r.s I-X
          ^e;;cr.a: Cc.-ns*ls, Pecicrs :-X
          A;r and  w=3:e .Vanage-.er r  Div^sicr, Directors
            Recicr.s  I-X
          Reji^nci £>perfjnd Cc-crdi natcrs
          Director,  Office  of' Waste Programs Enforcement
          Director,  Office  cf  Er.erce-.cy and Rerredial Response
          Associate  Enforcement  Counsel, Waste Division
I.
     The administrative  order authority whic.1*.. the Environmental

Protection Agency  (E?A)  exercises under 5l06(e) of the Compre-

hensive Environmental Response,  Compensation, and Liability Act

of 1980 (CERCLA) an_d Executive Order 12316 is one of the most

potent administrative remedies available to the Agency under any

existing environmental statute.

     Section  106(a) of CERCLA authorizes the issuance of "such
        \                                                    :
orders as nay be necessary  to protect public health and welfare

and the environment/" after notice to the affected state, upon

a determination  t.-.at "there r.ay be en ir;r.:nent and substantial

-------
          -t  tc  the p-i-ic health or  welfare  cr  the  er.vircr.T.e.-.t
 CcCou.se  of  an actual c-r  threatened  re.ease  of  a  hazardous
 substance frorr. a facility."  A fir.? net exceeding  S5,090 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 tiroes the cost of clean-up of  the site may be
 imposed  under S10"7(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 endangennent 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

-------
responsible parties  in  an  attempt  to  ecteir  promptly  the  scree-  •

mert  cf  such partirS  to vc !•.:.!•• tar il°"  under tar.?  the  necessarv
                        •
respcr.se actizr.s.  If t.-.e  discuss icr.s  are suc'ceasf L! ,  the terras

of  tne agreement wall be embodied  in  a judicial  consent decree

or  a  5106 ecministrat ive consent Order.

      In  circumstances where  the Agency wishes  tc compel a responsible

party tc undertake the  response actions,  including instances where

no  settlement can be  reached,  the  Agency  will  consider issuing &

unilateral §1C5 Order in accordance with  this  guidance.

     The adr.ir.istrative  enforcement authority  .is an ir.pcrt?r.t

ccr.pcnent of the Agency's enforcement  program  authorized  ur.der

CERCLA.   This guidance  is being  issued to assist the  regional

offices in developing sr.c maintaining  an  effective CCKCLA admini-

strative enfzrcement  program. ' The effectiveness cf the program

will be enhanced as site remedies  are  implemented  by  Bespcndsnts

in compliance with administrative  orders,  end  as enforcement of

Orders with whicr. Respondents  are  not  in  conipliance 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 cf the program.

     CThe 5106 administrative  order authority provides  strong incen-

tives for Respondents to undertake expeditiously response actions

deemed necessary by EPA to ensure  protection of public health or

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                                -4-
 weifare  or  the environment.   Therefore,  Regional offices are '.-rr?
 to  ccrsicsr ths  use  cf  ur-ilstsrsl  CiRCLA 2crr.i~i£tr;tive ~~ja-5
 ir.  every case '-here  ccspeliir.g  c.-.fsrcer.e.-it  authority is neces-
 sary.  Criteria  are  provided  herein  to  assist  regional  offices     '
 in  determining whether  Orders are  appropriate  in any case.   It
 is  essential that  a  balanced  CERCLA  enforcement  program is
 iop 1 ewer,ted by EPA,  combining administrative and judicial enforce-
 ment anthorites, to  ensure protecticr. cf health  sr.d  the er.virsr-
 ment from tre hazards cf  releases  or threats of  releases cf
 hazardous substsr.ces.

 II.  Requirements  for Issuar.ce  ar.d Scope cf Sectior.  106 CEPCLA
     Orders
     A comparison  of 5106 (a)  ar,d S'003  of . the  Resource  Cor.se r-
 vazior. ar.d  Recovery Act (KCRA)  reveals  similarities  In  tee  t^o
 sections, and therefore many  of  the  criteria for issuance cf e
 STOOJ Order also apply  to §106  Orders._!/  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 may  be  an imminent and  substantial
     endangerment  to the public  health  or welfare or
     the environment because  of  an actual or threatened
y  Guidance 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 Septetnber.il,  1981.

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      release cr s. r.ezzrzz-s  sccsia.-.ce  fror e  facility,
      he r ?y rec.i re the Attorney General  cf the Unit*?^
      to a?at» sue.-. cancer cr  threat...   The President
      nay alsc, after r.otire to  the  affected State,  take
                           £  specie-  inc.«w..?~/  itt r.ct
      limited to, iss-ir.i' S'jch cr-ers  as  rr.av bt  "^^C'p
      ts pr:*.5ct ?.tl:r h-iilth er.i welfar?  £nd  the envircn-
      r.e^t._2 '

      In croer for an OrJer  to be  issued, the following

 legal pre-req-jisites m-jst be met:

      A .   Necessity fcr a D^terrir. at icr; Sasec Upsr. E v i c ^ r; c s

      A ceterr.ir.st ior. rjst be rr.ade that,  because cf .a release

 cr threat cf a release, a"  ir.r.iner.t ar.c  S'jbs t2:-.t isl er.^ar.cerrr.e-. t

 may exist.   This dr terr.inat icr will depend upcr. cccunent ary , test,

 T.cr.ial,  ar.c physical eviier.ce cbtair.ed through  investi^at : crs

 arc inspect icr.s.  Cther ir.f crr.at icr. concerning  the nature cf the

 threat posed by a site -ay  already be contained in Aoer.cy files,

 such as  data generated pursuant  to  S1C3  of CERCLA or the perr.it

 and notification sections cf RCP.A.  The  Order,  therefore, must

'include  a finding that an imr.inent and substantial endangerment

 may exist,  in order to ensure that  this  statutory requirement is

 met.  (See  sa-ple order, Appendix E,  Finding No.  7).
^/  The President has delegated his  authority  under this Section
 to the Administrator of EPA and the  U.S.  Coast Guard by Executive
Order No.  12316 dated August 24,  1961.   EPA  and the Coast Guard
have entered into a Memorandum of Agreement  dated  October 9,
 1981, that all site-related releases in  the  Coast  Guard's juris-
 dictional  areas (coastal zones,- Great  Lakes, ports and harbors)
shall be the responsibility of EPA.

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o:  =  r.3Z2 T~ : . =  ?.•--. »r::- •' fro- s facility.  A "-azar-T'js

SLSstanc?"  :s  iefi.ned  in  Section 101 (J4i of CERCLA, ar.rj  is

generally any  substance,  waste or pollutant designated pur- -

c L £ "" •  t ** 5 'r- C * } ~ ** H1.  ? " ~ ' ' 5 '  ?. r "j ; 1 1 ' ~ ' ' '/. ^ f A ) if * '". P C' "' ** 2 "" •'•" 5 " a ""

ncr,  Sec- : rr.  3-.:Jl  cf RCS-.,  Secricn 112  of the Clean Air  Act.

SrCtirr. " i: TSCA ,  cr  S-r-.-t : ;.-. 112 of CE=CLA.  iC'r-j.-le oil,
are exe-.oter:  frcr  ststjr.cry coverage.)

     ;>net.-er  a  release  fro-rr a facility is ''actual " or  " tr-resten-r- "

primarily cepencs  uccr.  ter.poral cons iterations.  Actual  releases

s.no^lc te ciscrvaile  in sc.-r.e fcrr.,  either visually or  thrcu^

analysis sr.o-'i r\-- contaminants present in samples of soil,  *atsr

or air.  A  "tnreat" of  a release,  on the other hand, involves

releases which  have yet to occur or have yet to fine their way  ir.t;

the environment.   A oulging tank containing a hazardous  substance

in which pressure  has  built up, and a surface impoundment
2/   A "Release"  is  defined  in CERCLA 5101(22) as "any spilling,
leaking, pumping,  pouring,  emitting, emptying, discharging,
ejecting, escaping,  leaching,  dumping or disposing into  the
environment," with certain  specific exemptions:(e.g. release
solely in work  placer  engine exhaust; release of certain  nuclear
material; and normal  application of fertilizer).

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wnicr.  is abcut  ts  overflew  because  of heavy rainfall, rrese-.t

cbvic'js  threats  cf i  rclcoSc.   A t/.i'cai.' is also prescncc-J iv

crrrcd:-- cr  leaking  drurr.s  ccr.t2ir.ing ir.cc.T.ratible wastes rincls?'

ir. a ccr-Tor ar<*a.   Accordingly,  the deterr.inaticn of whether K

"threat" cf a release warrsr.ts  iss-.-ar.ce  cf an Crier is » j-jrtrrer.t

decision, to be made on a  case-fcy-case basis.

     The nature  of both the hazardous substances present at the

site and the  release  cr threat  cf release  should be set forth es

findings in the  crder,  together with the  beses for such findings.

     C.  Necessi tv Ths t r.eleas?  cr  Threat  cf  fte 1 ease re
         Frcr. e  Facility1

     The release cr threat  of release nust.be frcn e "facility,"

which is defi-her ir. CSSC1A  §101(9)  as:

     (A) any iuilding, structure, installation, equiprent,
     pipe cr pipeline  (including any pipe  into a sewer or
     publically owned .treatment  works),  well, pit, pond,
     lagoon,  inpound.tsent, dit-cn, landfill, storage container,
     motor vehicle, rolling stock,  or aircraft, or (B) any
     site or area  where a hazardous substance has oeen
     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,  from which

releases or threats might originate.   The  Order must specify
 •n>
the physical  location  that  is the source of the release.

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                                                          OSWER I 9833.C
                               -d-
     D.  Necessity fcr Existence ;rf  Irrir?-.*  er.d  Substartial
     Ivide.-vce presented to s-ppcrt  the  iss-ance  of  a  5126(a;
order must show "that there may be  an  inr.inent and  substantial
endangenner.t" to pusiic healtn or welfare  or  the  envircr.ff.ent.
     The words "may 20" indicate tr.at Congress established  a
standard of proof that does not require  a  certainty.   The evidence
need net demonstrate that an  Iraniner.t end  substantial endar.gerrr.er.t
to public health or the environment definitely exists.   Ir-.stesd,
an Order may be issuer! if there is  sound reason  tz  believe  that
such an endanjerrr.ent r.ay exist.
     Evidence cf actual harn  is r.ot required.  As the Court stated
in Ethyl Ccrr. v. r?A, cons truing an %ndenge:-ment provision in  the
Clean Ai'r Act:-
          The meaning of "'endanger" is  not disputed.  . Case
          law and dictionary  definition agree that  endarrger
          means something less than actual ham.   When one
          is endangered, harm is threatened;  no  actual injury .  .
          need over occur.   {541 F.2d  i at 13, footnotes omitted,
          original emphasis,  D.C. Cir.,  cert.  den.  426 U.S.  541
          (1976).)
     It should also, be noted  while  the  risk of harm must be
imminent in order for the Agency to act under $106, the harai
itself need not be.   (See the legislative  history to the
"imminent and substantial endangeraent" provision of $1431  of the
Safe Drinking Water Act, H.  Rpt. 93-1185 at 35-36.)  For «xample,
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 ft 9833.0
lir.elihccc  -f  c.-.e r.c~ by 'sxs-i-ir.:  th-:?  factual circurstar.ces,
ir.clwiir.c,  Swt "rt :::r:tei to: 1)  r-ature  a.id  ar.our.t cf the
." 5 z2 T ~ ?'- s  ?'.. cs t "5 ~ Tr i i'-"rI '-'^ ~'  2 • t!'. •=  ""^*- ™*.'. ? ^  f CT exrT^'jre T s
hur.sr.s  or  the  erv.-i roarer t to  the substance,  ar.i i) the known
cr S'.sprctc-c  effect c: the s-.".stance  cr.  h-r.ans  or that pert
of the  ervircr.re.it s-jr;ect to exposure  to the  substance.
     Legs:  analyses cf the concept cf  imminent  and suh-stsntial
enia.-.-'rrr.t-r.t  csn  else  be- fc-.ni in  Peserve  Viiir: Co.  v. £?r..
£i;  ?.2d -551  ,'eth Cir. 19~5);  I'. £. v. yertac  Cher.: eel Cc. et  el,
4?=  F.Su-r.  c~C  .'I.;.  ArK.  1?ED);  U.S.  v.   gel vents P.ecoverv
Service, 496 >.'   Supp. 112"1 (D. Ccnn.  196:);  U.S. v.  y.itiwest
Sclver.-.  F.ercvrry,  
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                                                        OSWER # 9833.0

                               -10-
may arise* however,  where  rapid  response at  a site is neeessarv.
!r sue-  esses,  ir=--2-=2  ef  ;-  Crdsr -ay fcllov a.-, aiirevig:*^
notice period or  ever,  a  telephone  eill  r.ade  by EPA to the
Director of  the agency responsible  for  environmental  protection
in the affected state.   Written .confirmation nust fellow  such
telephone notice.
     As  indicated above, the notification should be  directed tr
the Director cf the  state  seercy havinr ;ur; s-iicticr.  ever
haz.arccus waste -atters.  A suggested fcrrr fcr a r.ct if iratirr.
letter is attached to  this -srcrar.c-j~ as Appe-di.r A.   This
forr, also provides the format  for or?l  notice.
     A.-,  "affected state" is interpreted to be the stats •here
the facility is located  fror. which  the  discharge :s  teir.-
releasec cc threatens  to be released, and in whicr. the response
activity required by -the proposed "arter will be taken.  1st sew
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._ther state(s).  In those cases,  all  of
the states in which  the  hazardous substances  are found and in
which response activity  may be perforaed 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 peraii-ts the issuance of  "such orders

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                                                            OSWER * 9833.0
ii -.i.-.- re r.eceiiir.-. . ."   Sertirr.  IC-ils),  however,  refers to the
"owner cr operator"  cr  "ether  responsible party"  as the persons
fj whc!n  the AJency  coultj  look  io  Jctcrrr.i.*ic whether clc'sri-wp cf
a site will be dcr.e  properly before  expending  CERC1A funds.
Serticr.  ICTja), cesicr.atir.c those who shall be liable for
response costs, s?eoir:er vreser.t owners  ar.o operators  cf a
facility, persons who were owners and operators at the  tine
of disposal of a hazardous substance, and generators and certain
trar.spor-: r: vr.r, iocorcir.c to available  evider.ee, contributes
hazardous sjDstar.ces  to the facility.  It follows  that  those
same persons could  be recipients  of  an Order issued under
Section 10£!«), (see  'j.£. v. Outboaro Msrir.e Corp., 536 F. Sup?.
54, 57 (N.D. 111. 1952).  In addition, in appropriate cases,
it T.ay be possiole  to issue orders to parties  other than
those listed in Section 107{e), if actions by  such parties are
necessary to protect  the public or the environment.

IV.  Criteria for Issuance of  §106 Orders
     Other parts of  this guidance document examine the  legal
requirements for issuing an Order.  This  section's purpose is
to list specific factors which favor the  use of Orders
over other possible  enforcement responses.  These  factors include:
     •  Responsible  parties' financial status
     •  Number of potentially  responsible parties
     •  Certainty .of  the necessary response action
      \
     •  Agency's readiness to  litigate the merits
        of the Order

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                                                            OSIER * 9833.0
                               -12-

      The  thrme  corrsor. to tnese factors  :s  tnst Orders  should
 £*  :ss_e-  :r.  this* s:t'J2t:rr.s ir w-ich  rcT~li2r.ee  •vith  v-.e
 terrs  cf the  O^cer is f=£sirle,  i.e., •..•hsre ths Respe-r.der.ts
 fire  ir. a p;s i.c.i.c.1 to peri.rr-. tr»«r oroertc* response  actions
 • ithir. specific-  tir.e periods.  T.-.is cse-  not =vsar El-.-.  -MIST.
 r.a>.e  a pre-issuar.re deterr.i:.;ticr. tr^at  Rcspcncerts will  cc-n-
 ply with an Order,  but rather that compliance is practicaole.
 If the  Ager.cy does not anticipate compliance with  ar. Order  it
 is considering,  issuir.;,  the use  cf the  Order nay serve  or.ly  to
delay  direct  injunctive action under $105  or the initiation  cf
F>r.i-f ir.ance-j response.   On the  other hand, the Agency  nay  wis;:
to issue an Order ir. any situation where the neede* response act:-:r.
and the liability r.nerefcr are clear and straic;ht-forwarc",  so
that refusal  to conply with the  terr.s-cf 'the Order would -.->•.,  irr
all probability,  be with ^sufficient cause" (CERCLA §lC?(c){3!).
Such refusal  would render tJrs 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 hatards posed

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                                                        'OSWER « 9833.0
        oy sites en  trie  National  Priorities  List.
      0  The Securities  ar.t  Ixcr.a-ge  Ccrr.issirr  'SIC/  requires
        publicly trsiei  ccr-jinies  ts sutr.it  istrilei  fi.-.ar.cial
        statements.  This  information is  puoliciy  available.
        '.Consult NEIC'S  manual entitled  "Identifying  Responsible
        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 cf an  Order.
      In addition, NEIC car. provide further information  on
Respondents' financial status.
      B.  Number of Responsible Parties Subject  to  the Order
      For two prir^ry reasons, the  success of Orders  for
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._4/  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
£/  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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                                                           OSWEH * 9833.0
 or.  eac;:  r.cTier's -share  c:  the response cost.  In a large grour;
 c;  responsive  parties.  ;t may ce cifficulc for tne group to
 develop  a consensus  on  individual liability and perform response
 activities  
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                                -15-

 identified.   Orders  are  normally setter suited to nendetirr
 ciscr?~£  '£3\s  sue.".  s£ c.r'^."1 Tfr^cvsls rstr.^r th?.r. less  sx»c~
 £C* * ~"" -----  ^ -  ••"=-•""".   C tu S""»" 13* "*" ~r" ic- ('•'*J-'-''k  «--  'ufi
.Age'ncy  to  supervise  ccrclier.ce  activities, arc rcr respcnsihle
 parties to rencr. a-reener.t  on a conpj.iar.ts plan.   In west cases,
 information  sufficient to  describe the required response  actions
 wili  De generated  by the RI/FS.
     An Order should contain the following elsnents (see
 Appendix s}:
      •  The  steps  the Respondent nust take to cor.piy with
        the  Order;
      *  The  effective oate  of the Order;
      0  A  r-.ancatcr.'  tir.e-table  f^:1 completion
        of  renedici  work;  and,  where •appropriate,
      0  A  statement  tc the  effect that other actions or orders
        .may  follow.
     Specific  remedial action Orders benefit toth 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  Then 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;ec:::r  Criers  ter.*fit the A-ency &y reducing the cif: ic'.lv
of'swpervisicr.  and  ;ucicial  enforcement.  In noncorr.pl iance sif.-a-
!;;•.«,  :."•.•= r.^er.c..  -sy »> = .-.  C2 er.fcrcs dr. Cri=r ir. cc.r:.  A
s~eci*ic C~d°r  crtviies  t..u.r  ccjrt »it!". A~er7"-i.r* iculits ~ rti."-
cares ry •••••:;:.  to  "-i~e  ~~£  respcnsirl? -.Arty's r:--.-cc-i. 1 iance
w:»h  its terns.  7r.«*r*ior*,  £?A should make every effort  to
clearly crt ic'jlate  c.-.e  response activities required by en Orier.
     3.  Agency's  Heaviness  to Litigate t?-.e Herlts of the Or^<>r
     After the  A-er.cy iss-es an Order, the respondent nay sees
judicial review  tr  stay  the  Order.   Pespcnder.ts may challenge-
their liciility  or  the  appropriateness cf the remedy specified
in t.-.fc C-rser.  Or:  the other  hand, the Agency may promptly seek
tc enforce tr.e Order  in  court.  In light of these possibilities,
the Agency must  be  ready  to  defend the Order in court at  the time
it is issuad.  This means  that the site problem, the reasonaitle--
ness of the required  response, evidence of liability, and the
Agency'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, EPA should not normally issue an

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                                                         GSWLR *  5833.G
 crcer i: the necessary respcr.se  actions  have not been clearly

 icertifiec.   I" sccit:c~, A.rs.-.cy er.fcrcs-e-.t rersc-.r
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                                                       OSWEn f 9833.0
                           -18-
ircr.-.-s.-t ,  ar.i Swcr. acticr. w;ii not  otherwise  se  provided

  C T ~° e r s TT 2 " i1? used t c c err. ~ 2 1 v 2 r i c u 2  ° ~ T 5 J ° a ~ = ~ e — — ••=*
       1.   Sjspensicr. cf activi;;es whicr.  e^grsvate  ar.
            existin^ release or substantial, threat  of a
            release (e.g., active use of  a  storage  tank
            judged by tne OSC to be in  imminent  danger pf
            failure).
       2.   Suspension cf activities wr.icr.  interfere  wit-
            Federal removal actions (e.g.,  plart  traffic  ir.
            area cf cleanup).
       2.   Movement or ncn-mcver-ent cf a transport vehicle
            (railway tar.< car, tank truck,  tank  vessel}"
            which is the source of a release  or  subs tar rial.
            threat cf a release.
       4.   Measures to limit access, such  as  fencing.
       5.   Use cf readily available equipment,  owned ty the
            responsible party, to contain or  remove a release
            during the initial stages of a  response before
            the OSC is able to obtain comparable  equipment
            from other sources.
       6.   Dikings; construction, of benns; or removal of
          .  the hazardous substance to an approved  facility.

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                                                           OSWER ft 9833.0

                               -19-

 (Tf.is  list  illustrates  various uses for an Order;  it is not an
 • v *» 1 **C * *'O *»^«» ^o •***•••"  \
     Section 105(a) Orders,  both  in iirjnediace and  non-immediate
 sit^at:c.-.s, r.ust  contain  a  statement notifying the party cf
 EFA's  ajt:.cr:ty ar.c tr.e 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 CEECLA-funaed response activity curing
 the  period  of time given  to  the party to respond,  unless (i)
 such C£".riA-fjncei response  activity beco-r.es necessary cue to
 the  irjwrediacy cf the release  or  threat of release or (ii) the
 Respondent  f;rr..ally and unequivocally staves an unwillingness
 to comply wit- 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 Ren-.ovals 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 time
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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                                                               L« * 9633.0
nateriai  fro?  tf".e  site.   "r.ereiial  actions" are these ccns is*9"t
                  . - — :>._••  u . . „  - •. - . «._ r 3 — C .. --J.
area,  rrer. cr. ; r.g
ZrA's  pos.t;;n  is -that  any  activit/ that ci:e Govsrn^-r. t -i^r.t

jnderta't.e at  a  site  -  fror.  pianr.j.nc a.-.d Enudies to corplete

cleanup-could Us ordered  pursuant  to §106(a).   Of course,  the

issuance of more than one Order  may be  necessary if the cleanup

is performed  in stacos. or  if  additional responsible parties.

fceccme known  to T?A  who siculd participate  in  the cleanup.


.' I . F-rcce cores  for Issuer.ee  cf §106 'a)  Orders.

     CERCi-A designates  the  President as the  prixary official

responsible for taking  response  and enforcement action ur^er

the Act.  The authority to  issue adr.in istrat i v*» orders under  .

$106
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                                                              OSCR « 9833.0
                              -21-
 reCeiegfiie-  t.it  cc.is-.:5-.rr. authority to tr.e Associate E^rarce-
 nen: Counsel -Waste  art  tne  Regional C-vjrsels.  The .AA OS>.-E? .*•.-?
Of fire  c: Ksste  Prsgrir.s  L'r.f rrcer.s.'t (D>.'?i).   TrJe Office cf
waste Proira^.s tr.;orc€.T.eni  will  develop anri issue criteria in
Scpara:r --+ts.~:-=  •••;-.;;.-.  »:il bs  usei to evaluate circumstances
cr.ier v.-.ic.-.  tr.ii azvar.ce  ccnc-rrer.ce req-:rer.er. t -ill re w^ivec
on a Regies  fcy ^ejior.  ^as:s.   Regional  offices are expected to
develop strc.v^ acmir.istrat ive enforcement procrams, on an expedi-
tious srnei-le,  wMch  will  perr.it ther.  to ir:itie*.e ani issue
legally and  technically  adequate administrative orders with
only prior notice  to Headquarters.
     A. Planned  P.errvals  ar.d Remedial Actions
   For planned removals  and remedial actions, Orciftrs ar«
grafted by tne Regional  prograr  office  witn tne cooperatior cf
the Regional Counsel's office.   The draft Order is forwarded
to the Office of Waste Programs  Enforcement for review and con-
currence.  The Regional  Administrators  will usually issue the
Order and provide  prior  notice of the action to the state.
     B .  Immediate Removals
     For those Orders  which require emergency or quick handling,
usually in response to situations warranting an immediate
removal, the following approval  sequence will be used:
     The Regional  Administrator  first must determine whether
to issue an  Order  based  on  communication with the OSC and
        V                                     .             •
consultation with  Regional  Counsel.  The Region then prepares
an order with any  supporting information end electronically

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                                                                    n  >>..,-.-
r.c.-.t  -^; re.'ie-  a.'.; concurrence.  Nwti: icatior,  cc  tr,«-  StatP
of  our  inter.",  to issue the Order shoyM be  ecc-orplisr.ed  crslly.
£-i £-.:icv.-ei  up  -y fsrr-1 writ tar. r.ctics.


     Ajency yslicy is to offer parties to whom.  EPA  has issued a
unilateral Slu-6  Drier an opportunity to confer  with  the  Agency con-
cer:.ir-  the a; tr-pr iste-.-3sc- cf its terr.s anii  its applicability tc the
recipient.  The  cor.ferer.ee will help E?A ensure that  it  has
basei  its Crier  or ccr'plete ar.i accurate i-.frr-r.a t ior.  c~.'l help
EPA and  Respcr.ier.ts re».c.-. & co-r.on' ur.ierstanii nc of  ho--  the
Order shculi  is  ir.ple--s~.tei cr moiifiei.  T.-.e procej-res for
exercisir.- this  cptic- -are cor.r-.yr,icated to  respondents through
the text cf the  Orier itself.   (See sar.ple  Order, page A of
Appendix E. )
     A.  Planned Bencvals and.Rereiiel 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 fron
the day  the Order is received by the Respondent.  Certain Orders,
such as  those  requiring  that long term remedial actions  be  taken,
may warrant a more extensive examination of the facts.   In  such
cases, the Order may 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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                                                               °SWER * 9833.0
                               -23-

 t.-.e  Crrer,  tr.t  =es;--.rc- -t -_•«: rrcvije vritter.  r.ct if :r = : ;r-
 tc t r. s  £ r A.  ciricisl  1 1 E t e i i r. the Order v i • h. i r.  ten  calendar
end  held  «s  S.?TT.  :-.-: •.-•?sf ter as rrertiratle. but y-ri'j.-  tc
•fiys  frr— t."'.?  dit* t.v.e-.0rd?r -as receive.  t'.f the Ses~cncer.t.
      B .   £rer-e-rv Sifjetlt-s
      The  applicatie ti.r.e periods for the effective  date  end
f:r  rer-es:: r.-  a  corfr re-re r.sy re sr.crtened ,  (r.-.,  tr-  "I
and  •; r hs^rs respectively:, cr t.^.e conference  procec'-jres  rev
ce eliTirstcd e r. t i r e 1 v ,  ; f *". e iTTeiiccy cf the hacard -'csej
Cy e  site a-.c c'l.-ier s.r rc-.-.d: r.r circur.stances.se warrant.
*r the frrrer situatiir. ,  the Order shc_-ld  permit the  Respcr.de-.t
tc req^es.t a ccr.ferer.ee  crally, later followed by written
not if icat :cr..
      C .   Conference Procedures
      The  conference will normally oe held  at the appropriate
EPA Regional cff ice and  will be presided over  by 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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                                                              OSWER # 9833.0
r*.s:  be  rrsrsrec,  s:g-.ei ry v.= Are.-.ry official w
              A  description ci' the majcr ir.q-jiries marte ani
              views  offerer hy t.u.e Respondent contesting
Ir ace:::;",  tr.e  r-"e£---"5 official must prepare a state-e-.t
• •.:;• ar'iresS1?;  t.". e  sir~ifiC2~t a r~-'~tf r. ts raissi iv  t.u. e  Peszc"-
 e~t a~.  wh ii^.  rec~. T***.   «'.u. t.^e  an  .**. ^»'  -w.  De    :u.
      .  MCC: f i ?a tier. .  revocstisr,  or Stay of the Orc'er
     Based upon a  review of _tfte file upon which the Order
initially was based,  any probative ir.f orr.ation or  argument
proffered by t.-.e Respondent following 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 comrr.ynicated 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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                                                             OSWER * 9833.0

                                -25-
 -::.-.;.-  :.-.=  sprc:::5:  tir.e  per:rc.   3efcre s-ostartially mccifyin:
 cr  r*vcf.;.-.;  a-  Irtrr,  the  :ss.:'.7  o*::r:*l r..-st ccrs.lt w;t.-.
 the cp;rorria:r  Heacc-erters cr Periors;  cour.sei er.rl ?w:a:r. the
v:::.  rrctrd.re  If  Crder  Is  S;t Cteye:
       In  the  evert  t.^e  party to whoir t^e Order is issyed does
not  corrply with its  terms,  the Agency nust quickly riecide
whether  to atte-pt to  enforce tne Crier DV referri-.r. the cas«
to the Sepsrt.^e": cf J_s:ice  for filing of a scit to force
compliance, cr whether tr  •jr.certar.e clean-jp cf the s:tc ty
Lisr  cf ri.~:iA  f>ncs, an: then file sjit ageirst the party fnr
re i.T:i.urse.-er.:  of  the costs  expended plus statutory penalties
for  failure to co-ply  with  t.-e Order.
     The ce tern i.-.at ion of  which action to pursue depends
on the type of response  action to fce taken.  Ooviously,. if an
ir.r.ediate  rercval action is required ry the hazard at the
site-, EPA  will clean up  the site and attempt recovery of costs
and penalties  in  a suosec,uent recovery action.  The same, course
of action  applies to a planned removal where the removal actic-.
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 human 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
           cticr  tr r»
      <-.. I. - ..  * .
p;r:y  ts  pcrrc-r^  '.•'.  TcSired r:spr~sc- activity.  T.-.e drc;sion c:
w.-iich  opt:or.  :c pjrs'-e if.  initially tc be- T.ace by tne Pecional
Ad.nir.istretcr,  in t.^.e sarte r.anner sr.d using the sa-e procedures
as previously  prescribed for any other enforcement action.  The
Regional  Administrator's recr-\~end?. t ior. is then forwarder tc
Headquarters  fcr  action.

IX.  Net? CT. P^rrss1?  a-.c 'Jse cf
     T.-.e priicy and  procedures set fcrth herein, ar-: internal
office prcced-res  adopter  pursuant heretc, are intended solely
fcr t.ie'guidance .of  attorneys  and other erplcyees of the'L'.S."
Environnental Protection Arency.   They are not intended to ncr
do they constitute rule-making Dy the Agency, and may not be
relied upon tc create  a  right  or  benefit, substantive or pro-
cedural,  enforceable at  law or in equity, by any person.  The
Ajency 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 sarr.ple letter  to a state providing notification
       »
        of the Agency's  intent to issue a $106 Order; and
     e  A sar.ple Order.

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                                                                OSWER * 9833.0
     I: you r.sve  ar.y quest :or.s  cr -rc-le-r.s  concer~:"7 a-;;-
                          ._1«..,  _. I 1
                        f  ^ *•••»—  WWKB
•:3si-i-J:: r:  r-e Office zi  ^-L'.

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                                                         OSWER.* 9833.0
                           Append;:-: A
                   STATE serif:cAr:c.'.- _;??£?.
Scare Aje.'cy
       -      ----
Dear *r. Jones:

     Enclosed  for  your irforr.aticr. is a cc?y of  an  order
fstanped "D:-.AF7" and  "COST IDENTIAl" •  that t^.e Agency inte-.-s
to :sswe en  cr afrer   t' : & ~. e .' _ ,  to tr.e Xi'2 Ccr.par.y, purs-ar.t
to Section IGofa^  cf  tr.e Ccmpre.^eriS i ve cnvironrertal Sespcr.s?,
Compensacicn,  and  liatiiity Act of 1960,  (42 USC 56C6).   The
crder re-uires  certain act;vities cc ;;« t£Ker. at :r.e ccr.pary's
s:te located at  .'I sea tier.] .   Please refer  to tne enclosed
espy cf the.  prcpcssc  crc'cr for the specific acticns reruircd
cf tr.e ccr.par.y  a.-.J the tir.e within wr. icn  such actions r.;:st
ce ta.
Enclosure

cc:  Honorable  J.  Smith, Governor

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                                                          OSWER # 9833.0
                              Appendix 3
 In The Matter Of                        )
 •I.N'ane of  Perscr. ,                        )
 Finn or  Corporation)                   )
                                        )    Docket No. _
 Proceeding Under Socticr:  106 (a)  cf  the 1
 Cerrrer.ens ive E::vircr.T.e.-.tal Response,   ;
 Compensation and Liaoil'ity Act  cf  1980 )
 (42 U£C Se:t:cr. ?£C5- a ) ) _ )                  •


                                cars?.


     The  fc Hewing' Crier  is issued  on  this date to (insert r.g-"?
 ane. address of person,  firr. cr  corporation, along wit.", facility
 na.Tie cr pi'ace c: ousiness if  tne- Respondent is not the owner
or operator) (""Respondent (s )"),  pursuant  to 5106 (a) cf the
Comprehensive Environmental Response,  Compensation and Liasilitv
Act cf 1960 -(CESCLAJ  .{42 USC  9606(a)), by authority delegated tc
 the undersigned ty the  Administrator of the United States Envi-
 ronmental Protection Agency (E?A).   Notice of the issuance of
 this Order has heretofore Seen  given to the State of    m       .

     There is an imminent and substantial endangerment to the
 public health and welfare and the  environment due to a (threat
 of a release) (release )  of (a) hazardous substance (s) as defined
 in $101(14) of CERCLA  (42 USC 9601(14)),  from the following
 location  (the "Facility"):

                (insert legal description,  if known;
              otherwise, use  street or route address)

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

                     FINDINGS  AND CONCLUSIONS

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

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      t \'.r r e s c r. > C«».". e r i - .-.espor. c=n t  is  no-,  a DC  has been since
 Cd terr.ir.e.3 :ro~, tsc-rce c: inionr.ation i i .

 1 9 •  ' ( FCTT*? T rv"? r /T~ 9 T? * cr ) — P-eSw'^r'iei^ w»s,  *—«••">
 :;   ',  •.--.:.                  1"  '.    :-    ---"''-

c:  t.-.c  Facility.  as cr-£rr.;r.ci frcr.  (source  «*  ;nf erection '•.
D «T i T! ~  t ^ * ~  1 1."~°   'ir.srcc'jE r v hs t ** *t cs s /  j««»» •.•••»*••• . ^ -,c c.  ^af^
r.ereir. ,  WTr2 c:sp;ssrc c: fci tr.e :sc;^:ty.   P.espcr.cer.t  srlc cr
c*r.6r«'iss  trs.'.cfsrrsi 3~z rcr.vsysi ths Taciiitv  to
cr. _ , 15 _ , acccriir.j tc (prcperty  recprcs/T^
1C.  ' I (Generator )  - Respondent (disposed of)  (arrangedr  by con-
tract  or  agreement, for the disposal or transport  tor  disposal)
of hazardous  substances ac the Facility as determined  frorr
(source )'.
1Z .   [ : Transporter )  - Respcr.c'er.t c.w.cse to accept
substances  for  transport 'tc, and disposal at,  the  Facility  as
ce:e~ ;-.ec  frcr (scarce;].

IE.   [(C'ther  Party)  flrsert reasons why crderei ecr:c~.s  are
necessary  to  facilitate the abatement of the hazard,  prevent  the
a;;ravst;rr: of  tne hararc,  or otherwise protect th
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                                                          OSWER « 9833.0
                               --
           observed  flowing approximately forty '40) yards
           i-.tc  Crystal  Crrrx.   Ve-et5t:rr; ha-Tb^e- kille-J
           • "  •• •* o  ^"Ci»i*'f/  * ^ S  » C 1 ^ C "**" ^ ** ** £ 3 * ^ ^ C'«i £ £*j^c*»*»*»Ae


                     .'list  hazardous  substances-


     At  the  tir.e  cf  the  inspecticr.,  	 sar.pies cf the drur.necf
waste, samples  of  the  leachate  from  the Landfill area,  and	
sar.pies  of  (soil,  surface  weter,  eroundwater, air, etc. )  were
obtained  by  the  inspector(st.

4.   An  analysis  c*  the  sar.?]es taken at the'tir* cf the ir.spec-
ticr. disclose:  cne pres-er.ce  at  the  Facility cf the fcllr-vir.-
substances  in  the  concentrations  set forth:

            (list  hazardous substances and concentrations
           confirmee" by  analysis  -  men continue with
            following sentence)

     Th»so substances  are  "hazardous substances" as defined in
§101 (i 4)  of C~!RCLA, and  are  sut.;-ect  to  the terr.s and provisions
of tnat Act.            •                                   ...

5.   The  hazardous subs-tances described above are treated  or
disposed  of at the Facility  in  such  manner that they (are  being!1
(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 endangerment
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.

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                                                           OSWER * 9833.0
fact,  it  :s nerery  urcarec  anc iirectea tnat:

      ;::;?£ -  the  resscnze-.t r.ay if  ~--'-:r?c to u-'Oertak*
      » «»V  rSET**""c
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                                                                 OSWER t 9833.0
      .-.esz~".r-3"•. is  sl'-'iso^  t.u.*t willful  violation cr  failcrs  ^r
v - c . . . •  . ,»  _.__•.. ._,_..• • L.  *L:C  -- _ j _-, _   ...  .... —-_»:«- 4. u . _ ^_ . c  _ . . .
3 . '. Z . 0 . £ '• '• C r '.• S-s i  ~ 5 y  i - C J T C t  ';'*'•* '•* "' Z* s *  «> *•<••"/• J »  OT  '- C. .*• s- 1. - /
(•ii I'.S.C. ?56C 7 f c ) ' 3 ) ) , to  liability  for punitive  danag»s in  ar
a.-^ounc up  to  tnrj  ry r.ar.c  '.- th*  City of
                   , a 3  ft: tie  cf  cut.1*..;:-; zee £.= A. :55_:-.;  r:'f :;:.el :
or  tr. :s        t!iv o*                    ,  19
                      INIT£^ JsTATir. E.V.'IRONMEN'TAL PROTiCTirN

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to
00

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                                                             OSVER * 9834.0
           UNITED STATES ENVIRONMENTAL PROTECTION AGE'
                         WASHINGTON-  DC  2046C
                             JAN 26 ISc4
 KEMP P. AND'.'?.

 SUBJECT:


 FROM:
 PURPOSE
          Releasing Identities of Potentially Responsible
          Parties in Response to FOIA Requests
                                    /        s\
          Gene A. Lucero, Director  (^>tyfJL r\.
          Office of waste Programs Enforcement
           Kir* F. Sniff
           Associate Enforcement Counsel
           Office of Enforcement ani Compl^nc'e Monitor in.:
                     Waste .M.a.-.age.i>ent Division, Regio-.s  I, v
                    Office of Emergency & Remedial Response, Re;ior. i:
                                                         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  IX
           Director, Air & Waste Division, Region x
           Regional Counsels - Regions 'I - X
      THIS mervorandur. states tne policy of EPA  for  responding  to
 requests under the Freedom of Information Act  (FOIA)  for  the
 names of potentially responsible .part ies  (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 p.laintiff's motion  for  summary
 judgment on finding that:

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                                                            OSXL.-. « 96 3-;. G


                               -2-

      1.  ~:r  Ixerpticr  ''A.  -- retire letters are investigatory
 records  compiled  for  law enforcement purposes,  but EFA did net
 establish  trat  disclosure cf  t.-.e  retire letters  -o-_l^ har- the
 investigation;

      2.  For  Exemption  "MO  -- the identities cf  t.-.e PP.Ps
 whc  received  retire  letters does  ret fall  into  the caterer:1 ef
 a protected  privacy  interest; and

      3.  For  Exemption  5  --  notice letters  are net  predecis ional
 documents .

 III.  POLICY

      As  a  res-it  cf  tne  Cohen decision  and the  Administrator's
 policy cf  conducting  business in  a more open atmosphere, and
 in lijht cf  the resource cera.rcs  involved  in casc-r:y-c2s =
 r?v;ew ef  the nar.es cf notice letter recipients, the Varer 3-",
 1 ~-i 8 3 , guidance  r.a = beer  reevaluatei.  Tne  new g -: .: a r ro :=  se :
     1.   Ir response  tc  a  "CIA  request,  EPA will  release the
names c:  ?R?s  wr.c  have  received  notice letters ao~;;t a CE.-.:iA site

     2.   An exception tc the  policy cf disclosing tre nar-es ef
???s WTO  received  notice letters may be made only when E?A
deter-:-.es tr.at disclosure c:  a  particular name w.ll cause such
interference . w: th  an  ongoing  enforcement proceeding that
discretionary  disclosure is clearly unwarranted .   If I:?A deci-es
to withnold the na~e  cf  a  P'F.?  wr.o received a notice letter, EPA
must sup-pert the conclus icn • tha t disclosure will  cause substantial
hsrr. to t.-,c- l^w erf erce.-.ent proceeding in writing w;tn concurrence
by the Regional Counsel.  The  written documentation .-.ay not
conrsist of general  statements;  it must include the particular
facts relating to  the specific  PRP and site that  led to the
conclusion to  -•ii.-.h
     3.  The names  cf  parties  who have not yet received 'notice
letters may be prececisional  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 i-n 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 names 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 7 of FOIA, EPA has discretion

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                                                         OSVCR e 9634.0
                              -3-


to release the inf ormat ion; however, EPA may exercise  its discretion
to release the inforr.ation only after the appropriate  Regional Counsel
reviews the information to ensure that disclosure will not interfere
with an enforcement action.

IV. PROCEDURES.TO IMPLEMENT POLICY

     EPA Headquarters or a Regional Office should follow the
procedure below to respond to a FOIA request for the names of
FR?s or otr.= r  i r.f orr.at icn  ar-out a CERCLA 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 accountaole for inadequate  qjalitv
assurance c: PR? information.

     2.  Immediately notify Headquarters whenever a Regional
Office decides, in accordance witr.  tne gjidance  in Item ITT.I
aocve, tnat disclosing  the p. a Tie of  a PR? will cause substantial
ham to an enforcement  effort.  Regional Offices also  snould
notify Headquarters if  withholding  a name is no  longer required.

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

     4.  Suomit the list of names,  or nanes and  information, to
the requester with a brief explanation of now EPA iefinc-s PR?
for -purposes of sending notice  letters.

     5.  Include with the  list  of names trie following  disclaimer':

         This list represents EPA's preliminary  findings on
         the identities of potentially responsiole 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
                       WASHINGTON. O.C 20460
                                                           OSWERt 9833.1
                           F£B 2 I 1984
                                                        O»»iCI 0*
                                               • OLIO WASTI AMD IMtMOINC* MS»O«SE
MEMORANDUM                                         •  .

SUBJECT:  Issuance  of Administrative Orders  for Immediate Removal
              i ons
       T-Or^^-:;=rV\>c
FROM:  ^ALee M. ThdW&s
          Assistant Administrator

TO:       Regional Administrators, Regions I-x
          Air & 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, Re;;on 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 6, 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 tnis
 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 Administrative Orders  in situations
when there  is at least one week  between the time the On-Scene
Coordinator (OSC) determines that an immediate removal is warranted
and the time  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  response, particularly since it

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                                -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 time 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 time 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 coil removal)
 which makes  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 is 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 (•) 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 made 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 time 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 be 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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                                                          OSWER « 9833.1
                                -5-

      The  procedures  for developing and  issuing orders follow;

      The  decision by the OSC or his superior to request funds for
 •n  inaediate  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 OERft 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
zisk 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 by the 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 $1 million for removal actions.) The ten 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 terms 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
             S300.65 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 5107.
          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
             i n wr it ing .
          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 requires: proper chain of custody
             procedures to be followed for any testing and sampling,
             adequate recordkeeping of activities (to 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.
3Refer to the general Administrative Order Guidance for examples
 of model orders and conference procedures.

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                                                           OSWER « 9833.1
                                -7-                           . .

      Under  •  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 Administrator
 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 modifications  to the Order are warranted.  (See the September
 8, 1963 Administrative Order  Guidance for a complete discussion of
 the procedures  and "ground  rules" for conducting the conference
 and 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 recommend 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  S250K.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 deteriorating .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  time  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 respond while
 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 may be about to leak).

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                                                           OSWER « 9833.1
                               -9-

 the timing  of  the  obligation will vary according to the estimated
 tine  needed to mobilize equipment and personnel, the "OSC should
 vork  closely with  the technical enforcement and Regional Counsel
 staff during the drafting of the Order to assure that the time
 period established  for issuing the Order is synchronised with the
 tiae  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 the 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
 appropri ate.

 V.   COST RECOVERY

     The Agency will normally not initiate a 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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                                                          OSVER «  9833.1
                             -10-

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


VI.  FOLLOW-UP

     This guidance represents a substantial departure from prior
practice, and I expect that it will take some time to implement.
For these reasons, I 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  $106(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  •
   S106(a), to enforce such order and

   may fine such person not more than $5,000 for each day
   such violations occur or such failure to comply continues.

Under §107(0(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
   §106

   nay 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.

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

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

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                                                         OSWER « 9833.1

                                            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/cr 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

-------
                                                     9832.7
     } UNITED STATES ENVIRONMENTAL PROTECTION A'JENCY
     ./             .   WASHINGTON. D C. 20460
                          MAY 24 1914
MEMORANDUM

SUBJECT:  Guidance Regarding CERCLA Enforcement-Against
          Bankrupt Farcies
FROM:     Courtney M. Price
          Assistant Administrator for Enforctaent
            and Compliance Monitoring

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


     The attached guidance has been developed to 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 *nd future bankruptcy cases brought by
the Agency.

     The guidance provides:  1) an overview and tunmary of the  •
Bankruptcy Refora Act and existing bankruptcy case law; 2) *
discussion of enforcement theories available co the Agency co
pursue insolvent partita under CERCLA;  and 3) references co
current bankruptcy pleadings and appeale.filed by che Agency.

     Pages 24 and 25 of eh* attached guidance describe referral
procedures for a proof of claim in bankruptcy.  A bankruptcy
referral will ordinarily be processed in the same way as other
hazardous waste referrals. ' However, axpedited^ Headquarters and
DOJ concurrence and abbreviated referral packages may be neces-
aary 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) 382-3050 or Heidi Hughes.at (FTS) 382-3109.


Attachment

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                                                     9832,7
                       TABLE OF CONTENTS

                                                      PACE


I. -INTRODUCTION	  1 .

     A. Scope and Duration of the  Problem	  1
     B. When co Procted Against a  Bankrupt
          Party	  2

        1.  Probability of Recovering  the Cost
            Litigation	  2

        2.  Dcterrcnct of Frivolous  or Fraudulent
            Bankruptcy Filings	  3

II. THE BANKRUPTCY CODE:  An Overview	  4

     A. Organization of the Code	  4
     B. Voluntary vs. 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
          fb) Priority Structure	....  13

          2. Theories of Recovery  Beneficial  co
               cht United States	   15

          (a) Adalhiscrative Coses	   IS
          (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. Scate-Involvency Lavs	   23

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                             - 2 -                 9832*7
IV. PROCEDURES..	  24
     A. Rules of Bankruptcy Procedure	  24
     B. Filing Proof of Claim	  25
     C. Pleadings	  27
     D. Appeals	  27
     E. Federal Bankruptcy Court
          Jurisdiction	  28
V. THEORIES OF INDIVIDUAL LIABILITY	  30
     A. Personal Involv«aent in Aces
          and Onissions	  31
     B. Piercing the Corporate Veil	  33
     C. Personal Jurisdiction in Casts Involving
          Corporate Officers or Shareholders	  35
VI. INDEX OF RESOURCES	  36
     PLEADINGS	'..  36
          Proofs of Clain	  36
          Other Britfs and Motions	  36
                         •
     ORDERS	  37
     RESOURCES		  38
     RULES	  38

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                                                       9832,7

                         I.  INTRODUCTION
 *     ?«-nr»» and Duration of che Problea
      Tht U.S. E.P.A. is charged with cht duty of managing and
 rtplcnishing tht Halted Superfund co cht greatest txccnc possible.
 Vhilt our cnforecatnc activities under cht Comprehensive Environ-
 aental Response, Coapensation, and Liability Act (CERCLA) vill
 generally bt directed against solvent parties, there have been
 and will, continue co be tines when a rtsponsible party declares
 bankruptcy.
      This aeaoranduo sets forth enforceoent options for dtaling
      t
 with  bankrupt partits.  It includes guidanct on when to procttd
 against bankrupc partits.  It also discussts cht chtorits and
 proetdurts for rtcovtring cleanup coses from bankrupc parcits
 under both federal bankruptcy law and coaaon law chtorits or
 rtcovtry.  Finally, ic is inttndtd co strvt as a bankrupccy infer-
aation clearinghouse, listing materials availablt froa OECM-Vasp*
 on bankrupccy and rtlactd subjects.
      In tht long run, tht requirements of the Resource Conservation
 and Recovery Act (RCRA), particularly the closure and financial
 requirements, should, insure the orderly closure of storage or
                                                »•
 disposal facilities.  Nonetheless, this vill not always occur.
 Thus, while the purpose of this memorandum is to aid the EPA official
*                                                              «
 enforcing CERCLA, much of it vill be relevant to future efforts by
 EPA to require bankrupt owner-operators of. storage or disposal
 facilities, gtntracors, and transporters co concribuce as auch as

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                                -2-
                                                         9832.7
possible co Che cleanup of the hazardous conditions  they  have
created.
B.   When to Proceed againsC • Bankrupt Party
          In making tht determination of when co procttd  against
bankrupt parties cht Regions should balance Che likelihood  of
recovering assecs from che escace of che insolvenc party  against
the extent of Agency resources required co prosecute bankrupt
parties.  The Regions should also evaluate che effect that  pursuing
parties who .have filed bankruptcy will have in deterring  future
frivolous or fraudulent bankruptcy claims.
          1 .  Probability of Recovering che Cost Litigation
          Two questions should bt answered by che Regions co determine
che efficient use of enforcement resources and cht txctnc co which
che Agency should pursue bankrupc parties in CERCLA accions.
          The firsc question co answer in determining whether to
proceed against a bankrupt party it related co che scope  of che
r«*e:  Are there ocher solvenc parties in che ease?   If so. CERCLA's
purposes may bt strvtd by procttding against them alone.   In general,
accions againsc bankrupc parties such as gtntracors lacking asstcs
•hould net bt undtrtaktn vhtn chtrt art ecbtr solvtnc parcits.
     Tht second question that »ust bt answered by^cht Regions
relates to cht value of cht case:  Art chtrt asstcs in cht tscace
of cht bankrupc party?  Tht Assistant United States Attorney in
cht District whtrt cht Bankrupey Court sics «ay bt ablt co send

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              .  ..  .                                      9832,7

                                -3-


 copies  of  cht case docket co an EPA attorney.]/ Dtpcnding on the

 atage of proctcdingt,  chc docket aay include an iceaizacion of

 assets.  It aay  bt pointltsa to proceed if chare are few assets.

 The  poaition of  the other creditors should also be considered.

           In general,  EPA and the Departaent of Justice should aaxiaize

 its  use of attorney resources by pursuing bankrupt responsible

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

 are  cither few secured creditors with relatively liaited claims or

 sooe basis exists for  recovering funds froa the estate despite the

 presence of secured creditors.£/

          2.  Deterrence of Frivolous or Fraudulent Bankruptcy Filings

          On occasion, EPA Bay elect co pursue a bankrupt responsible

 party even when  it appears unlikely that we will recover sizeable

 amounts froa the Bankruptcy Court.  The Regions should pursue bankruptcy

 actions where che ease aay serve as a deterrent co ocher parties

 who would otherwise consider escaping liability through a declaration
I/   The aost eoaaon fora .of bankruptcy is liquidation under
~    Chapter 7 of the Bankruptcy Before Act of 1978 (11 U.S.C.
1101 et seq.) (hereinafter eiced as "the Bankruptcy Code").
However, ecveral CERCLA cases have involved responsible parties
In Chapter 11 reorganization (see United States, et al. v. Johns
Manvilie Sales Corporation. ec"al.. civil MO. Bi-399-pj.  The
diatinctiona between a Chapter 7 liquidation and a Chapetr 11
reorganization are discussed Infra.  Unless otherwise stated the
discussion in this •raorandua concerns Chapter 7 liquidation
proceedings.

II   This evaluation should be docuaented in che case referral
     package prepared by the Region.  The Oepartaenc of Justice
has requested that all bankruptcy referral* include a "quick look
financial assessaent of che potential defendant's assets  (i.e. a
•uBoary of assets listed in che bankrupccy papers, a Dunn and
Bradscreec report, ecc.)

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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 tee bankruptcy as a way to
 avoid  their liabilties to the federal governaent.  Similarly, it
 is  important that responsible parties are treated equitably.   For
 example, in a case involving a bankrupt site owner/operator
 whose  actions contributed significantly to the waste condition.
 EPA could pursue the bankrupt site owner to further the enforcement
 policy goal of treating responsible parties tvcn-handedly and
 equitably.
             II.   THE BANKRUPTCY CODE:  An Overview
A.   Organization of the Code
         The Bankruptcy Reform Act of 1978 (11 U.S.C. f 101 et seq.
 (1978)) replaced and liberalized the Act of 1898 (11 U.S.C. I 1 et
 *«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.
                                     «
     Chapters 1. 3, and 5 set forth definitions and procedures
 common ce all bankruptcies.  The provisions of Chapters 7 and 11
 •tt forth the specific procedures for liquidations and reorganiza-
 tions.  Under a Chapter 7 "straight bankruptcy" or "liquidation,"
 a debtor is granted a discharge of all debts but must liquidate
 all assets.  A Chapter 7 bankruptcy is administered by a trustee
 appointed by the Bankruptcy.Court.  Under Chapter  11, there  is no
 liquidation of assets.  Rather the goal of this  chapter  is to

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                                                        9832.7
                                 -5-

 reorganize  the  obligations  of  the  debtor in order to give the
 debtor  a  "fresh start"  in carrying out his business.  The debtor
 and  his creditors oust  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 may
 initiate  a  voluntary action.^J  The debtor does not have to be
 insolvent^/ and no  formal adjudication of bankruptcy is. required
 i- "rlur.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 may.be filed
 against most  debtors by certain  creditors.  The debtor may contest
 the  petition, however,  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
 h*.  j.w.. ..  ,-K.y become due,  or if a custodian, within chc last 120
 days before the filing  of the  petition, has taken possession of or
 has  been appointed  by the Court  to take charge of substantially all
 of the  debtor's property.5/
U   11 U.S.C. I 109(b).
4/   insolvency in bankruptcy'law  it  a  term of art derived from
~"    eoaaon law.  If a corporation or individual claims insolvency
under the common law of a State  (as opposed to filing under the
federal .Bankruptcy Code), he is  generally only deeaed insolvent if
he is not paying his debts  as  they become due and if a receiver or
other custodian has been appointed by the Court to take charge oz
his property.
£/   11 U.S.C. I303(h)

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                               .6-                       9832.7

               III. . CERCLA ABD BANKRUPTCY ACTIONS
Station 101 of the Bankruptcy Code dcfints "creditor"  as:
           (A)    [an] tncity that has a clato againsc
           the debtor chac arose at the txae of or before
           the order for relief [dismissal decision -of
           Bankruptcy Courc which follows che approval  of
           che cruscee's Final Rcporc] concerning che
           debcor ...
Under seccion 101 of che 1978 Ace, a "claim" is a:
           (A) right co payment whether or noc such
           right  is reduced co Judgmenc, liquidated,
           unliquidated, fixed, concingenc, matured,
           unoatured. disputed, undisputed, legal,
           equicable, secured, or
           (B) righc Co an equicable remedy for breach
           of performance if such breach gives rise co
           a righc co payment, whecher or noc such
           righc  ... is reduced co judgmenc, fixed,
           concingenc, matured, unmacured, disputed,
           secured, or unsecured.
     The scacuce clearly scaces chac a claim need noc  be  preaisea
on a civil accion or a final judgment; ic is sufxicienc if che
claim is based on a simple righc co payment as a result of work
completed  and cose incurred.  Thus, the Uniced Scaces  need noc
have received a Judgmenc under CERCLA before making  a  claim againsc
a bankrupt party.  It it enough that the United Stacts has a righc
to payment or an injunctive claim.  The United States' righc co
payment can be based upon CERCLA Section* 107 and/or 104, or ocher
authorities.  Thus, che United States can proceed to file a claim
in Bankruptcy Court. '
                    «
A.   Proceedings in District Court or Bankruptcy Courc.
     An important question that must be resolved  in each case is
whecher co iniciace proceedings in District Courc or Bankruptcy

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              .   .                                      9832,7
                               -7-


 Cuurt.  An ordinary creditor must proceed in Bankruptcy Court

 because under the automatic stay provision (Section 362 of the

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

 Chapttr 11 petition operates as 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 cooaenceaent of the case
                under this title;

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

          (3)   any act to obtain possession of property oi
                the estate or of property froa the estate;

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

          (5)   any ace to create, perfect, or enforce against
                property of che debtor any lien to the extent
                that such lien secure! a claia that arose
                before the coamenceaent of Che caae ...;  .

          (6)   any act to collect, assets, or recover a claia
                against cbt debtor that arose before che
                commencement of che ease ...; and,

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

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

does not operate as a stay, including (Section 363(b)):
                                                  f
          (4) ... cht commencement or continuation of
              an aecien ... by a governmental unit co
              tnforce such governmental unit's policy or
              regulatory power;

          (5) ... che enforcement of a judgment other than
              a 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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                                                       9832.7
               ...              -8-


      The  purpose of these exceptions, AS articulated in the House

 Report accompanying che Bankruptcy Cooe, is to permit governmental

 authorities  to pursue actions co protect public health and safety6/

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

 debtor to abate violations of environmental protection lavs.7/

      The  exception in Section 36X(b)(4), as interpreted by the

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

 may  commence or continue any police or regulatory action.  This

 includes  actions for money (CERCLA $107) and actions for injunctive

 relief (CERCLA I106).£/  At the stage of seeking to execute any
6/   H.R. Rep. No. 95-595 95th Cong.. 2d scss. 343 (1978); 95
     Cong. Rec. H 11092 (Sept. 28, 1978)

7/   H.R. Rep. No. 95-595. at 343.  See also-. In re Bay Bridge
~"    Inn..Inc. v. New York State Liquor Authority. 94 F.20 555
(2d Cir.  1938); In re colonial Tavern v. Charles"!. Byrne. 420 F.
Supp. 44  (D. Mass. 1976) 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 ComaerTcal Timber as an
Introduction to a Clash ot Policies. 12 Envt'i. Law i. 5-8 (l9bl)
           Law - Whan Is a Governmental Unit's Action to Enforce
its Policy or Regulatory Power Exempt from the Automatic Sta
rv Power Exempt from che Automatic stay
362?. 9 Fia. Univ. L. Rev. 369. 380 (19{
Provisions ot Section 3627. 9 Fia. Univ. L. Rev. 369. 360 (1961).
See; 11 U.S.C. I362(c;*(g) for the conditions under which che
automatic stay remains in affect and other rules applicable to
obtaining relief from the atay.

8/   A action 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 itty ie In Re Revere Copper
and Brass. Inc.. 29 B.R. 584 (Bkrtcy.N.W., 19BT7.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 sgaint a~bankrupt 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-

 Judgment  that Bay  be obtained, the government should be prepared
 to  argue  that enforcement of the judgment is a 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 eo seek an order froa Federal District
 Court requiring  the Bankruptcy Court to order the debtor in posses-
 sion or trustee  to use assets of the bankrupt to abate a hazardous
 condition or to  reimburse the government for its expenditures.
     In two recent cases, the courts rejected the government's
 view of the exceptions-.  In United States' v. Johns Manville £/,
 the District Court in New Hampshire denied EPA's motion to vacate
 an Order issued  by the Bankruptcy Court in New York staying all
proceedings in an  EPA enforcement action against hanvilie.  The
opinion characterized the government's action for injunctive relief
 as tantamount to an action for a money judgment.  Since Section
362(b)(5) of the Code prohibits enforcement of a money judgment,
 the Court held that the injunctive relief sought by the government
did not fall within the parameters of cht bankruptcy atay exemption.
The Court nottd  that if the government had insttad sought an
 injunction to prevent active, on-going disposal rather than cleanup
of an existing hatard, such an action would not have been stayed
by the bankruptcy  filing.  In our view, cht District Court
9/   No. 81-229-D (D.N.H. dtcidtd Nov. 15, 19B2).

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                                                       9832.7
                                -10-

 erred.J_£/  The  Agency  has  proceeded with CERCLA response activities
 •t the  Johns  Manville  sices.
      In In  Re Kovacs.1'/   Ohio  vac stayed from proceeding in
 Stact Court In  its  efforts to enforce an injunction requiring
 Kovaca  to clean up  a hazardous  waste site.  Kovacs, a corporate
 officer and operator of the Chea-Dyne aite, had declared bankruptcy.
 The  Sixth Circuit,  affining 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  Supreme Court granted  the State of Ohio's petition for a
 writ  of  certiorari  on  January 24, 1983.  The Supreae Court vacated
 the judgacnt  and rcaanded  the case to the Sixth Circuit to consider
 the  issue of  mootness.  The Supreae Court has accepted eertioran
 for a aecond  tiae in the Kovaes II case.J^  The issue presented
 in "Kovacs II  it whether a  bankrupt defendants Bay rely on the
 discharge provisions of the Bankruptcy code to void an injunction
which requires  hia  to  cleanup a hazardous waste facility*.  In
January  1984, the United States filed an aaieus euriae ffrief in
107  The govertnent took the poaition that the Johns Manville
     District Court erred, in a action to diaaia»in AM Inter-
national v. United States. Case No. 82-B04922 .(N.D. Hi. Bfcrtcy
ct.; (CERCLA floe Action;..
1L/  681 F.2d 454 (6th Cir. 1982).
12.1  State of Ohio v. Kovaca (Kovacs IX), 717 F.2d 984 (6th Cir. ,
     1983; (cert, granted, Sp. Ct. No. 83-1020).

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                                                     9832.7
                                -ii-

 cht Kovacs  II  case  stating  chat the ease has national implication
 for environmental enforcement under chc Clean U«ctr, RCRA, and
 CERCLA and  further  eht  tcacti that tht 6ch Circuit decision
 "obviously  encourages polluters eo abuse the Bankruptcy Code
 and defy  state and  federal  environaental protection." ]j/
 B.    Cost Recovery  under Section 107 of CERCLA
      The  United States  should be prepared at the tiae ox filing
 of  a proof  of claio in  Bankruptcy Court to prove that its claim
 should  be allowed by the court.  That is, if the agency- has spent
 tor win  spend) \^t 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 .]27
      Therefore, when the United States files a proof of claim
 with  the  Bankruptcy Court,  Department of Justice and EPA attorneys
13/  Id.. Menorandun for cht United States as aaicus euriae
     supporting petitioner  (January, 1984).
U/  In  the case where tbt  Agency hat not spent Superfund money
     at  the site but where  we  intend to conduct a fund-tinanced
response action, the United States can file a proof ot claim for
an ''open account."  The proof  of claim would indicate that the
claim it founded on an open account which will become due upon
the completion of the abatement actions by EPA.
IS/  A usual commercial claim  of a creditor is established by the
~"   existence of a receipt or invoice indicating that the debtor
received goods or services  which he contracted to receive.  When
EPA has  performed work on a site, however, there- has been no agree-
ment to  perform such work between EPA and the bankrupt party.
Therefore, we must be prepared to 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 are satisfied
 fully before assets are distributed to any unsecured creoitors,
 including creditors claiming administrative expenses.  The
justification for this treatment of secured creditors is statutory
 (11 U.S.C. U507. 726).  A valid lien .is a right to repayment,
created by agreement, which exists independently of bankruptcy
laws.  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
secured by a lien on the heavy equipment will receive "off the
top" the amount representing the value of the heavy equipment or  .
the equipment itself before distribution of assets to unsecured   •
creditors in order of their priority under Section 507 of the
Code.                                            '
^6/  3 Collier on Bankruptcy. Para 507.02 507-12.6 (15th Ed.
     1981).

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                                                      9832*7
              -  •'      .         -13-  ^

      In Chapter 7  proceedings,  secured creditor* will recover
 before unsecured creditors,  including  EPA, unless Che Bankruptcy
 Court is persuaded by our  arguments  co Jump our claims ahead of
 all others.^/   In Chapcer 11 proceedings, Che government should
 be prepared co  play an accive role in  working out che terms of a
 reorganization  plan vich che 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 claims.Jj*/  Payments to
the unsecured creditors are  generally  made on a pro rata basis.
Ten,  fifteen or  twenty cents to che  dollar is common, depending
on  the assets remaining in che  estate.  The following expenses
                    \
and claims have  priority in  che following order under Seccion
507(a):
              1.    First,  administrative expenses ... and any fees
                    and charges  assessed against che estate  ...
177  I50?(b) establishes a "Super  Priority" which'would require
tKe Agency co have prioricy over every ocher claim allowable.
Under I507(b) EPA would have co prove (1) chat EPA baa a claim
(for administrative expenses) and  (2) that this claim la protected
by a lien on che debtor's propercy (mechanics lien or prejudgment
lien) and (3) chac che stay has prevented use of che propercy
(clean up).  See Motion for Allowance of Administrative Expenses,
In Re TriangleThemicals Inc.. Case No. 80-00993-HS-7.
.187  11 U.S.C. 507(a)

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                               .14.                    9832,7
              .  - *   *         *-
              2.   Second, unsecured claims allowed under
                  ' Section 502(f) of this title,  [regarding
                   certain claims arising in involuntary .cases]
              3.   Third, allowed unsecured claims for wages,
                   salaries, or commissions, including vacation,
                   severance and sick leave pay.
              A.   Fourth, allowed unsecured claims for contributions
                   to 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
claims 'or general unsecured creditors.  Because government claims
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 * bill ]_£/ intended to
give claimants under ftCRA or Superfund a priority in bankruptcy
proceedings superior to All other creditors, whether their claims
are secured or unsecured.  Four states have already enacted
197  H.R. 2767 sponsored by Rep. Florio.

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              . ..   .                                   9832-7
                               -15-


 siailar  provisions  in  chcir own environmental lavs.2£/

           2.   Theories of Recovery Beneficial to the United Scares

               (*)  Administrative Costs
    •                                              *
      The proof of claim filed         y che Uniced States have

 asserted chac cleanup  expenditures should be considered adainis-

 trative  expenses of preserving che estate of the bankrupt, thus

 deserving  to  be satisfied as top priority claim.  While there

 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 ooney AS administrative costs in order to remove  a

hazardous nuisance.  The conditic-  ts created when the bankrupt

party abandoned several barges in Ba*ciaore Harbor.   The Court
20/  Massachusetts oil and Hazardous Materials Release Prevention
     and Response Act, Mass. Gen. Laws. Ch. 21E; New Haapshire
Solid and Hazardous Waste Management Ace, N.H. Rev. Star. Ann.
Ch. 147-8: 10; Mew Jersey Spill Compensation and Control Act, 58
N.J. Stat. Ann. 110-23.11f (1981).  Colorado has also enacted
•uperlien legislation.  For a disaissal of these statutes and the
pending federal legislation see "Superlien 'Solutions' to Hazardous
Vast*: Bankruptcy Conflicts"~A"SA Environaental Law Newsletter.
winter 83/84.

2V  Ottenheiaer v. Whi taker. 198 F. 2d 289 (3ro Cir. 1952) was
     decided under the Bankruptcy Act of 1898, 30,Stat. 544, which
has been replaced by the current '   -ruptcy Reform Act of 1978,
92 Stat. 2549 (codified at 11 U.S.C.).  See also. In re Lewis
Jones. Inc. 1 Bankr. Ct. Dec. 277 (Bk. Ct. E.D. Pa. 1974) tor
the proposition that the bankruptcy court is under a duty to
protect the public interest and aay order a Trustee to take
action to protect such interest.  Various aeaoranda supporting
filed proofs of claia contain further casclaw and arguments.
These are available troa OECM-Waste.

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                                                       9832.7
               •  •'             -16-

 reasoned  chat  obstruction of the Harbor would conflict with the
 purposes  of  the  Rivers and Harbor Act.
      In its  opinion the court stated, "The judge-aade rule
 (allowing abandonment] Bust give way whtn it cones into conflict
 with  a statute enacted in order to ensure the safety ot navigation;
 for we 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."££/
     The  United  States has argued, by analogy, that expenditures
made by EPA  in the public interest under the authority of CERCLA
 should be reinbursed as administrative expenses.  This public
 interest  argument should stress the importance 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 rteent ruling froa the bench in a case entitled In re
T.P. Long, in the U.S. Bankruptcy Court for the Northern District
of Ohio, held chat the trustee it liable co EPA for cleanup
costs at  ft hazardous watte tite.£3/  While the Judge did not
specifically state that the Cevernaent't cleanup expenses were
"administrative  expenses" for bankruptcy purposes, the written
order it  expected to elaborate on the ruling froa the bench.
227  Id. «t 290.    .
     In Re T.P. Long Cheaical Co..  Inc.. Case No. 581-906  (N.D.
     Ohio, Bkrtcy. Eastern District, April 5, 1984).

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                               -17-
                                                      9832,7
 The  Unictd States  if txpectd to file britfs on chc question of
 priority  for  rciaburscatnc AS between the secured interest holder
 * «. J  * V • * • ••*^««*^*
 «••*»  «•** • w •«• *•• *• • • » •
          (b) Recovery Under Section 506(c) of the Code
              This subsection states: "The trustee «ay recover
 froa property securing an allowed secured claia the reasonable,
 necessary coses and  expenses of preserving, or disposing of, such
 property  to the extent of any benefit to the holder of such dale."
 (11  U.S.C. J 506(c)).  In a situation involving real property
 securing a loan Bade by a bank or savings and loan, cleanup cost)
 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, that the
trustee rather than  the government can recover.  The governaenc
 cuuid deal with this by specifically requesting the trustee's
 ratification of EPA  cleanup plans or obtaining froo the trustee an
agreement to seek reiaburseaent under 506(b).£*/
247  Ste Kobinson v. Dickey. 36 F. 2d 147 (lienholders did not
     oTJejct ee water being puaped out of Bines for safety reasons
and were liable for txptnditures).  First Western Savings 4 Loan
Association v, Anderson, 232 F. 2d 544; Miners savxnts flank of
Pittston. Pa. v. Joyce. 97 F.2d 973.

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                                 •18-
98SJ .7
           (c) Equitable Liens
               Ic has also been suggested by cht Civil Diviiion of
 Cht Departaent of Justice that, depending on the fact* of the
 •ituatlon, the United State* could argue chat expenditures of
 funds for cleanup create an equitable lien on the property.   Such
 a lien would create an iaplied contract for reioburseaent of EPA
 as a secured creditor.  Scate law on equitable liens should be
 researched if this •   -ory is atteapted.  It aay be of limited
 use since State lav  ay only allow for iaposition of ah equitaoie
 lien in situations involving a fraudulent conveyance of real
 property.  State law aay also require the trustee to have re-
 quested cleanup of the property, or at least agreed to.ic.2_5/
           (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 healch hazard.  In Vyandocte Transportation.
 Co.  v.  United States 3671 the Coast GUATO unloaded a barge loaoeo
 with liquid  chlorine gas that the defendant had refused to unload
 proaptly. The Suprtae Court required reiaburseaent of costa
.incurred by  tht United States.  The Court nottd that denial of
 reiaburseaent would have financially penalized the United States
 25/  For a discussion of State Lav on "Mechanics Lien Statutes as
      an Enforcement Tool in CERCLA Coat Recovery Actions."  See aess
 froa R. Schaefer to A.J. Barnes and C.H. Price dated January 11,  196-.
 26/  Vyandotte T-ansportation Co.. v. United States. 389 U.S. 191
      (1967).

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                                                        9832.7
                                -19-

 for  acting expeditiously to protect public health and safety,
 while unjustly enriching the defendant.
     The Vyandotte case has been invoked in proof of claims  filed
 by the United States as a basis for recovery of CERCLA costs that
 che  government has incurred.  In a recent order issued in  United
 States v. Northeastern Pharmaceutical and Chemical Co.. Inc..  ec al.
 (NEPACCO) 277( the court stated that restitution was available under
 $7003 of RCRA because the bankruptcy action was an action  in equity.
 United States v. Reserve Mining 287 also lends support to  a  clain
 oaseo on restitution.  In that case, che Court held that when  the
 United States is seeking reimbursement for alleviating a potential
 public health hazard caused by one vho it in violation-of  a  federal
 statute,  reinburseaent may be granted under che Court's equitable
powers.
 C.   Other Matters In Bankruptcy and Insolvency Cases
     1.    Abandonment of Property
          *4. «ny bankruptcy ease, the trustee say choose to  petition
the Court to allow abandonment of some or all of the assets  of che
•scat* on the grounds that care of the assets by the trustee would
be excessively burdensome to the estate. 29/  The rationale  for
277  United States v. Northeastern Pharmaceutical and Chemical Co..
     TnTi. ec al. (NEPACCO) (September 30. 1983. W. Disc. Missouri
S.V. Div.).
28.7  United States v. Reserve Mining. 408 F. Supp. 1212, CD. Minn.
     1976;.
297  11 U.S.C. S

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                                                      9832.7
              - "                .20-

 permitting abandonment was articulated in In re Ira Haupt & Cc.:
           ...[TJhe courts have always rtcognittd chac
          a Truscct is under no duty co rtcain the Tide
          to  a piece of property or a cause of action
          that is so heavily encunbered, or so costly,
          in  preserving or securing, that it docs not
          promise any benefit to the funds available
          for distribution.30 /
     The United States will oppose abandonaent in certain circuc-
 stances because the procedure say 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 reverts back to
the secured creditor and the Agency may 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 vhen public health and safety obligations (statutory or
-•wrrvise) are act, and when a third party will not recover a
windfall from EPA's clean up actions.  Abandonment may be prczerred
prior to clean up if tht property will rtvtrt to a viable party
whom EPA say  pursue for contribution to tht clean up.
     The position of the United States ia supported by the reasoning
of the Ottenheimer v. Whitaker ease, 3V and by In Re Lewis Jones.
30/  In re Ira Haupt & Co., 398 F.2d 607 (2d Cir. 1968).
21/  Supra, note 13. .'

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                                                     9832.?
                                 -21-

 Inc.  327   in the  Ottenheimer  cue, the Court refuted 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 Bight have otherwise obstructed the Harbor.
      In  In Re Lewis Jones.  Inc.. the Court reiterated the Qtten-
 heiaer position and held that the bankruptcy trustee could not
 simply abandon  the  property.  Instead, the trustee was required to
 repair various  steao 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." 337
     The law on abandonment under the Code is unsettled.  In the
recent bankruptcy case, In Re Quanta Resources.3*7 the New Jersey
District Court affirmed cht Bankruptcy Court's ruling allowing
abandonment  of a haxardoua watte site over the objection of the
City of New York and the State of Hew York.  The Court allowed the
company to  abandon a hazardous wast* site on grounds that the
327  Id.
337  In Re Lewis Jones. supra at 280.
367  In Re Quanta Resources Corp..         F. Supp. __
     No. 82-3524 (D.N.J. Jan 24, 19B3J Appeal Pending
No. 83-5142 (3d dr.).

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                                                        9832*7
              -   •               -22-  •

property vis burdensoae to the estate.   AC the sice,  there were
500,000 gallons of waste oil, sludge and hazardous waste.stored  in
52 tanks and about 70,000 gallons of waste oil contaainated by
PCBs.'^l/  While Quanta had previously signed a consent order
with the N.Y. Departaent of Environmental Conservation to  clean up
the site, the Bankruptcy Court's favorable ruling on abandonaent
effectively nullified the order.
     New York City and State had asserted that the holdings in
Ottenheiaer and Lewis Jones 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 arguaent, pointing out that the two cases
were decided before passage of the 1978 Bankruptcy Act.  Before  the
Act, the Court noted, abandonaent was allowable under judge-aade
rule.  Section 554 of the Bankruptcy Code, however, provided specific
statutory authority for the abandonaent of burdensoae property.
This authority,  the Court stated, vaa not conditioned by Congress
upon A finding chat abandonaent does not hara the public interest.367
     The Court WAI aiailarly wnpersuAded 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.

-------
 959(b)) prohibited abandonaent.  Section 959(b) provide*  that the
 trustee shall "manage and operate" property in  his  possession
 •fetowtwi.** ;u »*lid lavs.  The Court found that  this provision die
 not apply to the trustee in a Chapter 7  context,  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 lavs that affect bankrupt
 parties  as long as the substance of those lavs  docs not overlap
 vith the Ftderal Bankruptcy Reform Act's Jurisdiction.  The United
 States Constitution gives Congress the povcr to establish  uniform
 lavs on  bankruptcy 21'  out docs not prevent states  froa passing
valid lavs on insolvency.  To the extent there  is no conflict
between  a  state's  insolvency lav and the federal .bankruptcy lav,
 the  state  lav reaains  in operation.££/ .
     The United States  nay benefit froa  being a creditor  in state
insolvency proceedings  in appropriate situations.   Under  31 U.S.C.
1191 (1979),  debts to  the United States  are given top priority in
state 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 a miniaua, however.,  it  gives  the
                                                  f
goveraaent a  right of  priority over all  unsecured creditors to
37/  U.S. CONST art  1,  18  cl 4.
2i/  In re Wisconsin  Builders  Supply  Co..  M9  F.2d 649  (7th Cir.
          , Cert, domed 3iJ U.S.  965 (.1958).

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                                • 24-
                                                       9832.7
 payment out of che proptrcy in che hands of cht debtor's assignees
 or  other  representatives under che conditions specified in the
 statute.^/
                          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.f^/  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 tht Code and ..the Proposed
Rules.  Thus, no new rules have yet been promulgated.
     The existing rules were suamed up in a Bankruptcy Monograph
drafted by the Office of che Attorney General:
           "Until ... rules of practice and procedure arc
           approved, ac least two different sets of rules
           must be consulted. • First, there are che "Suggested
           Interia Bankruptcy ftules" prepared by che Advisory
           Committee on Bankruptcy Rules of che Judicial
           Conference of che United States which were published
3£/  Braavell v. United States Fidelity 4 Co.. 269 U.S. 483
     (1926).  The United States could also argue tjuc aacisfaction
of CERCLA-based claims precedes consensual liens, such as mortgagee.
The question appears co be open.  Collier, ac any race, expresses
che view that whether consensual liens coae ahead of che Government's
1191 priority has noc been finally and authoritatively determined.
Vol. 6A Collier. 1913(2] p. 246.
407  Under Public Law 95-598 1248. Congress conferred chis power
     on che Supreae Courc, amending che grant of rule-Baking power
s«t forth in 28 U.S.C. 12075 to include the new Title 11 Bankruptcy
Code.

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                                                     9.832,7
              ...                 -25-


            in August*1979  as  'guidelines' that could be Adopted
           .AS local  rules.  The  interin  rules have been adopted
            in many districts,  albeit with occasional variations....
            Local  district  court  rules  apply in soae Jurisdictions.
            Some bankruptcy  courts  have adopted nutterous local
            rules  in  addition  to,  or in lieu of. these interia
            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. ^

     Covernaent attorneys involved  in bankruptcy cases will find

 rules  and  all foras  (such as proof of  claia feras) in Collier on

 Bankruptcy (15th ed.  1981).

 B.   Filing  Proofs of  Claim

     To have  standing  as a  creditor, the United States aust file' a

 proof  of claia fore  which states  the naae of the  claioant; the anount

 of the debt or claia;  the grouno  of liability; the date the claic
                                                      «•
 became due or will become due  under an open account theory-Tie*

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

 unsecured).^/

     The filing of proofs of claias or interests  is explained in

 Section SOI of the Bankruptcy  Codt.f^/   In a liquidation ease under

 Chapter 7, •  claia ordinarily  Bust bt  filed within six aonths alter

 the first  date stt for the  first meeting of creditors.^/  Claims baae
4l/  Bankruptcy Monograph dated Noveaoer 22, 1982. prepared oy the
     Off let of the Assistant Attorney General, CUil Division, tor
use of U.S. Attorneys, at pp. 6, 7.

62/  Set, Bankruptcy Rules, Proof of Claia official forms.  Proof
     oT~claias filed so far have included brief affidavits froa
the On-Scene Coordinator stating aaounts spent and describing the
nature of the vork done as well as copies of bills subaitted to
EPA by contractors.
     H  U.S.C. 1 , 501.

££/  3 Collier on Bankruptcy  Para. -501.02(2]  (15th ed.  1979).

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                                26
                               •26-
on administrative expenses can be filed any else before the Court
has granted the debtor a discharge, of debts.  It is sore difficult
Co determine when to file a proof of da in in a Chapter ll reorgan-
itatlon because while the filing is required prior to the Court's
acceptance of the reorganization plan, there is no mechanise zor
determining when that acceptance will take place.  A proof of
claim should be filed immediately, with telephone concurrence by
                    .'
EPA HQ (DECK 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 muse be involved in the
filing of a proof of claim in Bankruptcy Court.fjj/  As stated
above, special procedures nay be available in emergency situations
in which cht government would otherwise miss filing"deadlines.
Headquarters and DOJ should be contacted.
457  11 U.S.C. I 506(a).See also (b)-(J)  [Procedure after objection]
46/  See, fn 1, page 3 supra for referral documentation that the
     department of Justice has requested regarding the.r financial
status of responsible parties.

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                                -27-                    9832,7
 C.    Pleadings
      See the attached Index of Resource* for a lifting of proofs of
 claim and other pleadings that EPA has filed so far.
     One problem area Involves the issue of whether, or not the
 United States should file a notion to overcome the stay in Bankruptcy
 Court before proceeding to seek injunctive relief in District Court.
 Arguably, the statute is clear on its face and no special notion
 is necessary for continued exercise of our regulatory powers.
 Nonetheless, Bankruptcy Courts have held attorneys in conteapt
 for failing to overcome the stay.  It is recommended, therefore,
 that a motion 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.f^/  If 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 aaicus briefs on bankruptcy issues related
           •
to hazardous waste site cleanup.                 r.
£7/  28 U.S.C. I 160
£87  28 U.S.C. I 1334

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              •  •                 ,   '                   9832.7
                                -28-
£.   Federal Bankruptcy Court Jurisdiction
     The Jurisdiction of Bankruptcy Courts has been In a confused
state since the Supreme Court's decision in Northern Pipeline
Construction Co. v. Marathon Pipe Line  Co. *9/  The Court held
unconstitutional the grant of power in  the Bankruptcy Reform Act
(28 U.S.C. 1471(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."£07  xhis broad jurisdictional grant to the Bankruptcy Courts
vas deemed unconstitutional because bankruptcy judges do not have
the" protection conferred by Article XIX of the U.S. Constitution
(i.e. lifetime tenure subject to reaoval only by inpeac'hscnt and
irreducible compensation).  Xt is unclear what effect the decision
in Northern Pipeline will have on the type of cases that can be
brought in Bankruptcy Court until Congress legislates a solution.
At the least, however, it is clear chat the traditional state
coanon-law actions (comonly-called "Marathon claims" by bankruptcy
practitioners) may no longer be litigated in Bankruptcy Court absent
the consent of the litigants.JJ/
497  	U.S.	. 102 S. Ct. 2858 (1982).
507  28 U.S.C. U71(b)(c).
5V  Cook, New Bankruptcy Quandary Could Be Easily Solved.
     Legal Times, Sept. 6, 1982 at 10 Col. 1."

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               .  .                -»-                             .


      In reaction co Congress1  failure  co  enact  legislation that

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

 tratlve office of  the United States  Courts, Washington, D.C., fore*

 ulated aodel rules to be used as interia  aeasures by the United

.States Circuit Courts.££/  The cover explanation circulated with

 the rules suaaarised the sain points as follows:

           Under the nodel rule,  all  bankruptcy  natters are
           initially referred to a bankruptcy judge.   [Section b(l)
           of the Rule].   In proceedings not involving a final
           judgment on a  Marathon clain, the bankruptcy judge aay
           enter orders and judgments that become effective immed-
           iately,  subject to district  court review  if requested by
           t party.  [Section (c)(2).J  With respect to final judg-
           ments in Marathon claims,  the bankruptcy  judge prepares
           recommended findings and conclusions  and  a proposed judg-
           ment.  [Section (c)(3.)J  A  district  judge then reviews
           the recommendation and enters a judgment.  [Section (c)t5)]
           Where circumstances require, an order or  judgment
           entered  by-a—bankruptcy judge will be confined by a ois-
           trict judge even if no objection  is filed.53/

      Because the United  States clains  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

 	.. —j-erioent  with options for  seeking relief in the Bank-

 ruptcy Court.  For example, the United States can nove the District
                          ^                              .  .
 Court to "withdraw the reference to  the bankruptcy  judge."£*/  If
 52/   See:  Memorandum froa William E.  Foley (Dir. fcdnin Officer
      oT~U.S.  Courts) to Judges,  Clerks U.S.  Court  Systea Regarding
 .Continued  Operation of the Bankruptcy Court  Systea after Dec. 24,
 1982  in the Absence of Congressional  Action.

 53/   Id.

 54/ ' 11471(d) grants Bankruptcy  Judges the authority to refuse-
      jurisdiction.  '

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                                                         9832.7
                                -30-


 •uch  a  notion  were  granted,  Che District Court could retain the

 entire  Batter,  refer  pare of  it back to the bankruptcy judge or

 refer the  entire matter back  t- ...; bankruptcy judge.  The govern-

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

 If, however, an action in Bankruptcy Court has already been initiatec,

 the government may  file a motion co scay che bankruptcy macter in

 order co proceed in District  Court.S5/


                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 chough the corporate owners and operators

 are bankrupY.IrT'such a case, che United States may choose to

 ignore  che escace in  bankruptcy and pursue che responsible  individ-

 uals  -• as individuals -- direccly, or che Uniced States could

 pursue -both  che assecs of che bankrupc corporation and che appro-

 priate  Individuals.S6/
557  These procedural  recommendations were made informally in
     conversations with  staff members of  cht U.S. Administrative
.Court*.   Perhaps  rtfleccing  the  current confusion in the bankruptcy
court  ayseem,  one staff  attorney stated that CERCLA actions appeared
to present unusual subject »av    -hat a  District,Court would wish
to hear Itself in light  of He -       Pipeline;  the other staff
attorney  discouraged EPA from ;-.,apting  to be heard by District
Court, stating that business was proceeding as usual in bankruptcy
courts.

567  For  a general discussion of individual liability, see Guidance
     Memo "Liability of  Corporace Shareholders »nd  Successor Corpo-
racions for  Abandoned  Sices  Under the Comprehensive Environmental
Response  Compensation, and Liability Act  (CERCLA)11  from Courtney >..
Price  to  Regional Counsels due  co be issued June-1984.

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                                -31-
                                                        9832,7
A.    Personal  Involvement in Acts and Omissions
      The scope of personal lUbilicy of corporate officers is  broac.
A corporate officer, director, or agent if liable for cores he
ccwDics regardless of whether he acted on his own b'ehalf or to
benefit the corporation, regardless of whether he personally bene-
fited from the commission of the tort and regardless  or  whether
the corporation is also liable.  He is also liable tor the torts
of the corporation and of other directors, ofricers or agents  if
he failed to exercise reasonable care.SJ/
      The liability of corporate officers is generally li:i:*c  to.
situations in which the corporate defendant has knowledge or
responsibility for tortious acts being committed within his area
of responsibility.  A general duty of supervision nay be an insuf-
ficient basis for liability.587
     The United States plans to aake use of this theory of liability
in pursuing, in certain cases, the assets of individuals involved
with  coroorations that have declared bankruptcy.  The fact patterns
of these particular cases seta well-suited to the law.  They involve
situations in which hazardous waste treataent or disposal operations
577  See:  19 C.J.S. Corporations 11845, 850 (194p).  Accord;
     ITS, v. Hess. 41 F. Supp. 197. (S.D. N.Y. 19*3).  See also:
MilleFTT Muacarelle. 1970 A. 2d (N.J. Super.. 1961); Donsco Inc.
v. Casper Corp.. 567 F. 2d. 609 (3d Cir. 1978); Patyaan v. Howev,
340 Ho. 11. IfiO S.H. 2d. 851. 856 (1963).  Singleton v. Araor
Velvet Corp.. 4 P. 2d 223 (cal. App).  See also Brief in U.S. v.
Mahler lh.5.  Pa.) drafted by Michael Steinberg, AetoraeyTTnviron
aental Defense Section. OOJ. (April 1. 1983) for a discussion oz
personal liability.
51/  Martin v. Wood. 400 F. 2d 310 (3d. Cir. 1968).

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                                                          9832-7
               •   •               -22-

 were directed  by  eaployees  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 Departaent of Justice have already used
 this legal theory successfully.   In one RCRA Section 7003 case,  the
 United States  argued  that this Section  iaposes personal liability
 on  corporate officers.  The  Court denied defendant's notion to
 dismiss, seating:
           "In  Missouri, a corporate officer who participates
           in the  commission  of a  tort aay be held personally
           liable  for  any  resulting  damage.  Patyean v. Howev
           100  S.W. 2d  851, 856 (Mo. 1936).  'A contrary~ru7e"'
           would enable a  director or officer of a corporation
           to perpetrate flagrant  injuries and escape liability
           behind  the  shield  of his  representative character,
           even though  the corporation Bight be insolvent or
           irresponsible.' 19 Ao. Jur. 2d i 1382 «t 77.££/
     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 pennies impo-
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
59/  U.S. v. North Eastern Pharmaceutical fc Cheaical Co.. Inc.
     et al. . (NEFACCO) No. 8U-5066-CV-SW (Western Disc. Ho. 19BO.
A later NEPACCO decision based a determination of liability on Si 07
of CERCLATTsee discussion infra)
60/  CERCLA I107(a)(l)(2). (3)(O
il/  CERCLA I 101(21).

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                                                        9832,7
                                 •33-

 structure is  to insulate  shareholders  from liability.  There is.
 however,  no insulation  from  liability  -• no corporate veil 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 aay be
 able  to establish  the individual liability of shareholders for
 torts coaaitted by the corporation.  The case law tends to upheld
 protection  of the  corporate  fora.  Courts will, however, Bake
 exceptions  to this rule when shareholders have coamingled individual
 and corporate affairs so  that the corporation appears to be no
aorc  than the "alter ego" of the individual shareholder.
      Federal courts  have  relied on the.tollowing factual tests in
determining when to  pierce Che  corporate veil: 1) Is the corporation
undercapitalized for its  purposes?  2) Does the corporation observe
corporate formalities?  3) Dots the corporation pay dividends?
4) Is che corporation solvent?  5) Have the dominant shareholders
siphoned corporate funds?  6) Dots che situation present an element
of "fundamental unfairness"?££/  courts have refused co pierce che
veil  absent a showing of  fundaaencal unfairness.^/  However,
62/  United States v. Pisani. 646 F.2d. 83, 88 (3d. Cir. 1981),
63y  DeUltt Trucking Brokers v. U. Ray Fleming Fruit Coapany.
     540 F. 2d 681, 667 (4th Cir. 19~

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                                 .34-.                   9832.7

 fraud need  not  be  sh'own  if  federal  law governs a case.*^/  The
 general  rule  applied  by  federal  courts to cases involving federal
 statutes is that the  individuals may be held liable in the interest
 of public convenience, fairness  and equity.  The specific statutory
 directives  of CERCLA  support a federal law.  In addition, the
 language of CERCLA establishes liability for individuals who owneo.
 operated or otherwise controlled activities at hazardous waste
 sites, j^/
      Fact situations  faced  by the United States involving -hazardous
waste disposal  or  treatment operations should prove appropriate
 for piercing  the veil.   In many  cases, the United States is finoing
that CERCLA problems have been created by corporations that have
been mismanaged and undercapitalized for the purpose of handling
hazardous waste.   Moreover, in soae cases, the sane individual
shareholder/directors have  dissolved and reformed essentially the
same hazardous waste operations  several times, an indication that
the corporate form is being used as a shield and "alter ego" for
individuals.
64/  United States v. Normandy House Nursint Home. 428 F.Supp.421,
     424 (D. Mass. 1977). The government will want to argue that
federal law applies co piercing the veil.  U.S. v. Kiabell Foods.
440 U.S. 713 (1979), holds that application~ol~State law should
not frustrate the objectives of federal statutes. ' In the Pisani
case, supra, at 87. the Third Circuit seated, "We believe xt is
undesirable to let the rights of the United States change whenever
State courts issue new decisions on piercing the corporate veil."
£5/  See, pages 7-9, Guidance Memo "Liability of Corporate Officers"
     fn 49 supra.  -      •

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                                                        9832.7
              •  '•               -35-
 C.    Personal Jurisdiction in Cases Involving Corporate
      Officers or Shareholders
      If  chc United States proceeds to initiate action against
 individual corporate officers or shareholders, the -government should
 anticipate that defendants say raise the defense of improper 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't al. (NEPACCO)*^/,  defendants
 alleged  that, as Connecticut residents, they were not subject to
                                                                  t
 extraterritorial service of process under Missouri rules or 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
affirmed that it had valid personal jurisdiction over the defendants
 		...... uuwever, point* 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
d«fenses related to personal jurisdiction.
667  Order No. 5066-CV-SU, (June 11, 1961. V. Disc. Missouri.
~~   SW Div.)                  '

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                                -36-                  9832-7


                     ' VI.   INDEX OF RESOURCES


     These materials can be tenc to EPA Regional attorneys on

request.  Because OECM- Waste does not  have' the  resource capability

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

one copy per region of each document  listed.


PLEADINGS

   Proofs ef Claia

     In the Matter of Aidex Corp.. Case No.  79-0-1 11, APPLICATION
     FOR PAYMENT OF FUNDS  HELD  IN TRUST BY THE  CLERK OK THE  COURT
     FOR CLEAN UP OF HAZARDOUS  WASTE  SITE CONDITION.

     U.S. v. Jack L. Neal  and Ceraldine Fave Neal  (Globe), Case No.
     FJ^0198, COMPLAINT FOR DECLARATORY JUDGMENT  AND 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 82-018^6,  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)
     x" rc TLiatlg** P""*6***!1"6"  CAtt 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 Motions                  :
                                                  •
     In the Matter of Aidex Corp.. Case No. 79-0-ill. MOTION  TO
     VACATE AUTOMATIC STAY. and accompanying MEMORANDUM IN  SUPPORT
     OF MOTION TO VACATE AUTOMATIC STAY and accompanying court
     ordtr granting motion. (West Dist., HE)

     In re Crystal Chemical Company.  Debtor, Case-No. 81-02901-HB-*..
     OBJECTION TO PROPOSED (HAN'T &F REPLACEMENT LIEN AND TO PROPOSED
     DISCHARGE OF LIEN and accompanying court order granting motion.
     (Southern Dist. , TX)

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                                                  9832.7
                           -37-


 State  of  Ohio.  Petitioner v. Willlaa Lee Kovacs. ON PETITION'
 FOR A  WRIT  OF  CERIlORAiU TO THE UNITED STATES COURT OF APPEALS
 FOR THE SIXTH  CIRCUIT,  Brief for the United Statea 4* Aalcus
 Curiae. (Brief supporting appeal of Ohio to the Supreae Court).

 In  re  Triangle Cheaicals.Inc.. Cast No. 80-00993 HS-7 MOTION
 FOR ALLOWANCE  OF ADMINISTRATIVE EXPENSES AND PROPOSED ORDER
 REQUIRING TRUSTEE TO  PAY EPA1a EXPENSES.  Filed Aug. 22, 1983.

 In  the Matter  of Quanta Resources Corp.. Debtor.  State
 of  New York and City  of New Yog*. Appellants, v.  Thoaaa
 J.  O'Neill, as  Trustee. Appellee. CQUANTA hereafter) ADD«*I
 from the  District Court for the District of New Jeraey,
 Brief  of  Appelianta.  (U.S. Court of Appeala for .the Third
 Circuit,  No. 83-5142).

 QUANTA. Brief  of the  Comaonwealth of Pennsylvania and
 State  of  New Jeraey,  Aaici Curiae. (U.S. Court of Appeals
 for the Third  Circuit, No. 83-5142).

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

State  of  Ohio v. Kovacs (Kovaca II), 717 F.2d 984 (6th Cir..
 1983)
United States of America, et al. v. Johns Manville Sales
Corporation, et al.. Civil No. 81*299"^D~IOrder of the
District Court denying United States 4nd New Hampshire
..w.twu to vacate the autoaatic at ay. (Nov. 15, 1982;
U.S. District Ct., N.H)

State of Ohio v. Williaa Lee Kovaca. Mo. 81*3220. Decision
attiraed District Court and Bankruptcy Court dec la ions chat  .
Kovacs was entitled to protection of automatic stay. (June 16.
1982, U.S. Court of Appeals. Sixth Circuit)

United States ot Aaerica v. North Eastern Pha.raaceutical
and Chemical Co.. Inc.. et al.. No. »OOQ6»-CV-SM.  Deciaion
denying defendants' »ocion to oiraiss for lack of personal
jurisdiction. (Junt 11, 19»1; Western District of Missouri.
S. Western Division)

Universal Metal Staapint. Inc. v. Pennco Machinery. Inc..
Bankruptcy No. 81-0126ZK.  Bankruptcy court held that autoaatic
stay doea not stay a separate suit against the bankrupt's
"sister" corporation.  (December 7, 1981; Eastern District.
Pennsylvania)

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            f •
                                                     9832.7
                                -36-
RESOURCES
     Bankruptcy Monograph convtyta to U.S.  Attorneys Offiets
     Novcobcr 22, 1982.  Sunoiry of bankruptcy lav  and  procedure.

     EPA Guidance Manual: Pun u ing RCRA Subpart  H Interest*
     ICF. (February,
     Brief in U.S. v. Mahler (M.D. Pa.) drafted  by Michael Steinberg.
     Attorney, Environmental Defense Section,  DOJ  (April  1,  1983).
     Discusses personal liability of corporate officers.
RULES
     Men or an dun front William E, Foley, Director of the  Administrative
     Office of the United States Courts on CONTINUED OPERATION OF
     THE BANKRUPTCY COURT SYSTEM AFTER DECEMBER 24,  19*2,  IN  THE
     ABSENCE OF CONGRESSIONAL ACTION (the "Efficiency Rules" or  '
     "Interim Rules"), (December 3, 1982).

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    't
     I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
     f                 WASHINGTON. DC 20460
                        JUN 13 1984
                                       OSWER ft 9832.10
                                                        0- .-, -,.
Liability of Corporate Shareholders and Successor
Corporations For Abandoned Sites Under the Compre-
hensive Environmental Response,  Compensation,  and
Liability Act (CERCLA)               /
 gEMORANDUM

 SUBJECT:
 FROM:       Courtney  M.  Price	
            Assistant Administrator  for Enforcement
              and  Compliance Monitoring

 TO:         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 are 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.
 TJie 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
 decision-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
 fubstance for transport to the disposal or treatment facility
 \the  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.  £/
In fact,  fundamental "to  the theory of corporation law is
the concept that a corporation is a legal separate -entity, a
legal being having an existence separate and distinct from
    See Pardo v. Wilson Line of Washington, Inc., 414 F.2d
    1145, 1149 (D.C. Cir. 1969); Krivo Industrial Supply Co.
    v. National Distillers t Chem. Corp., 483 F.2d 1098,
    1102 (5th Cir. 1973), modified per curiam, 490.F.2d 916
    (5th Cir. 1974)» Homan and Crimen, Inc. v. Harris, 626
    F.2d 1201, 1208 (5th Cir. 1980).

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                              -4-


that of its owners." £/- This concept permits corporate
shareholders "to limi£ 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
i'tself is sufficient to impose shareholder liability notwith-
standing corporation law. V  Alternatively, to establish
shareholder liability, a court 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
£/  Krivo Industrial Supply Co. v. National Distillers & Chem.
    Corp. , 483 F.2d  1098,  1102  (5th Cir. 1973), modified per
    curiam, 490 F.2d 916  (5th Cir. 1974).
j_/  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 Pharmaceutical 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 the operation of the Act a large class
    of persons who are uniquely  qualified to assume the burden
    imposed by  ICERCLA].1"   (Memorandum op. at 37, citation
    omitted. )

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

      In order to  determine whether  to disregard corporate form
 and  thereby  pierce  the corporate veil, courts generally have
 •ought  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.  "/   Second, that a failure to disregard the
 corporate  form  would create an inequitable result. 8/

      The first  element may 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
•V  See Henn, LAW OF CORPORATIONS $5143, 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.

7/  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).

8/  See Automotrit Del Golfo de Cal. S.A. v.  Resnick, 47 Cal.
    2d 792, 796, 306 P.2d 1  (1957); DeWitt Truck Broker, Inc.
    v. W. Ray Flemming 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 t 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. Waxman, 599 F.2d 34, 35-36
    (2d Cir. 1979).

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                              -6-
so that the corporate entity as to this transaction had at the
time no separate mind, will 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." 10/  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. *_V

     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, *3/ or where the corporate form has been employed
to misrepresent or defraud a creditor. **/
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-Rais. 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 Chengclis v. Ceneo Instruments Corp.,
    386 F. Supp 862 (W.D. Pa.) aff'd mem.. 523 F.2d 1050 (3d
    Cir. 1975).  Most 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 re Multiponics, Inc.), 622 F.2d 709, 717  (5th Cir.
    1940).

    See FMC Fin. Corp. v. Murphree, 632 F.2d 413, 423 (5th
    CTr. 1980).

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                                        -7-
I
               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 sr-lying federal standards, "Have
          shown more willingness to dis.e;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
          *5/  See discussion in Note, Piercing the Corporate Law veil;
               The Alter Ego Doctrine Under Federal Common Law, 95
               Harvard L.R. 653, 855  (1982).

         •*6/  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. Lchigh
               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).

          I?/  see Seymour v. Hull t  Moreland Eng'g, 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 BO 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.

          I8/  UNITED STATES CONSTITUTION art. VI, el. 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.  Gorsuch,  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."  Note, Piercing the Corporate Veil  in Federal
          Courts; Is Circumvention of a Statute Enough?,13  Pac.
          L.J. 1245, 1249 (1982) (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-l-82-840,  slip  op.
     (S.D. Ohio,  Oct. 11, 1983).In Cnem-Dyne, the  court stated
     that the purpose of CERCLA wa» 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. Georqeotf, 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
 Vill look closely at the  purpose  of the federal statute to
 Determine whether that statute places importance on the
 corporate form."  31 / Furthermore, where a statute contains
 specific  directives on when the corporate entity may be
 disregarded  and indiviouals held  liable for the acts or debts
 of a valid corporation, courts must defer to the congressiona
 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/
*9  (continued)/

     1312  (N.D. Ohio,  1983);  126 Cong. Rec.  H.  11,787  (Dec.
     3, 1983).
a
     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.  at  11.)  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, fc Ad.  News  at 6,142.) See
     also, 126 Cong. Rec. at  H. 11,801.

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

     Town  of Brook line 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
that 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
Eiackground

     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?
24/  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 agre*s 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.  2V  Where a corporation is acquired through -the
•purchase of aTl of  its outstanding stock, the corporate
entity remains intact and retains its liabilities, despite
     See N.J. Transp. Dep't v. PSC Resources, Inc., 175 N.J.
     Super. 447, 419 A.2d 1151 (Super. Ct. Law Div. 1980).

26/  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-
                           27.
the 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. 28/  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. *9/

I     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
27/  N.J. Transp. Dep't v. PSC Resources, Inc., 175 N.J.
     Super. 447, 419 A.2d 1157 (Super. Ct. Law Div. 1980).

     Id.  A merger occurs When one of the combining corpor-
     ations continues to exist; a consolidation exists when
     all of the combining corporations are 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.
     4B8, 454 (Super. Ct. APP. Div. 1979), cert, denied, 81
     N.J. 330 (1979).

30/  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. 31/  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
modifying 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

           "[w]here ... the successor corporation acquires
           all or substantially all of the assets of the
           predecessor corporation for cash and continues
31/  See McKee v. Harris-Seybold Co., 109 N.J. Super. 555,
     264 A.2d 98 (Super. Ct. Law Div. 1970), aff'd per curiam,
     118 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. Of fen 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.  Sec e.g., Daweko v. Jorqensen Steel Co., 290 Pa.
     Super. Ct. 15, 434 A.2d 106  (1961); Note, Torts - 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 Mach. Co., 645 F.2d 620  (8th Cir. 1981).

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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.' 34/

 £   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. 36/, 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.
3V  Ramirez v. Amstead Indus., Inc., 171 N.J. Super. 261, 278
     408 A. 2d 818 (Super. Ct. App. Div. 1979), aff 'd, 86 N.J.
     332, 431 A.2d 811 (1981).
  /  See Ray v. Alad Corp., 19 Cal. 3d 22, 560 P.2d 3, 136 Cal.
     RptrT574  (1977); some form of acquisition, however, is
     •till 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  (FIFRA] ££/, that
 "EPA's authority to extend liability to successor corporations
 stems from the  purpose of the  •• »*ute it administers, which is
 to regulate pesticides to pr      the national environment." 39/
 furthermore, the court noted i.-.dt "[t]he agency may pursue the"
 objectives of the Act by imposing successor liability where it
 will facilitate enforcement of  the Act." 40/  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. *V
 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
£2/  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).
  /  7 U.S.C. $136 et, scq.

39/  Oner II, Inc. v. United States Environ. Protection
     Agency, 597 F.2d 184, 1B6  (9th Cir.  1979).
  /
     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 acquisitions.

cc:  A. James Barnes, General Counsel

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                                                                          3
                                                               OSUKfc*
                            , ..n . in^NMtNTAL PROTECTION AGENCY
                            WASHINGTON. D.C. 20440
:/umo
OCT 2'384
       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 chare 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
       resolve* several operational issues in the current relationship:
       criteria are 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
a 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
   jonaid A. Laiarchik
 President, Association
of State and Territorial
 Solid Waste Management
       Officials

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           	. „.* j . « , e.3 cni vmUNMENTAL PROTECTION AGENCY '

                       WASHINGTON, D.C.   '«
                            OCT  2'984
                                                        O"ICI O*
                                               SOLID WASTI AND IMf HCINCT ftlt'ONSE
MEMORANDUM

SUBJECT:  EPA/State  Relationship  in  Enforcement  Actions  for
           "ites<
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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.

      e   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.

      •   Sharing of  information between EPA and the States is key
         to developing a more  effective relationship.

      0   State experience in hazardous waste enforcement must be
         recognized  and accommodated  in formulating agency policies.

      0   EPA will provide financial and technical support for
         State enforcement actions to the extent practicable and
         allowed by  law.

      e   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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                                                          OSWE? I 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
 enforcement 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 IN THT CL'PFENT CFA/S7ATE  RELATIONSHIP

     To establish the context  for a discussion  of the specific
actions that EPA  and fhe  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-

                4

      Problems 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  an-"
 the States on the status of enforcement actions.  Combined with"
 the lack of procedures for coordinating case management, EPA  and
 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 not 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 55,000
 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 damaaes 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 general's office.  Zn 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 CPA to conclude that effective enforce-
 ment action is required on an expedited or more certain schedule.

 I/ EPA's  experience with negotiations without time limits resulted
 Tn 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 enf orcemer.t
programs, whether from appropriations or in some instances from
fees and taxes,  ranges from negligible to substantial.  The norm,
however, is less than adequate.  A survey conducted by ASTSWMO in
mid-1983 showed  that anticipated FY  1984 increases in fundinc among
the responding 47 states still would leave these States, in the
aggregate, with  staffing levels some 40 percent short of optimur.
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/
hydroloc, ists,  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 regard
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 deta.il of field investigation  and site
analys is .

ACTIONS  TO BE  TAKEN

     As  is clear from the summary discussion of  issues  confrontino
EPA and the States in the current relationship,  some issues  cannot
be resolved through 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 nay 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  qeneral  cuiding
 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 UT>
 appropriately.   This means  that EPA has a responsibility  to assure
 to the extent possible that human and environmental  risks  at NPL
 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:
      0   funding  assistance  to States,

      *   criteria for  determining  lead  responsibility  for enforce-
         ment  sites,

      *   enforcement planning  activities,

      e   extent cf  EPA and State  involvement  in  the  other's  activi-
         ties  where the other  has  the enforcement  lead,

      e   development of EPA/State  Enforcement  Site Agreements  to
         clearly  delineate the EPA/State  relationship  at each
         enforcement site,

      6  
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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 enforoement-
 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 Recions ani 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;

     (3) the strength of legal evidence to support EPA or State
         action;

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                                                         **-»•»_• w  .'w.,*...,

                               -8-
     (4) the severit- :f probiers at the site;

     (5) the national i :;-.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 formally
         (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
         negotis-.Ti cleanups,  and consent orders and  decrees in
         accordance «ith EPA guidance;

      (4) pursue anc 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 sites 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 revie.
of a  responsible party study or  documents, used by the Region to
determine that . . .  no  further  cleanup is appropriate."  To the
extent 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 site that initially has been classified  as
 State-lead, the site cannot finally be designated as State-lead.
 In such instances, consideration should be given to classifying*
 the site as shared-lead so that State enforcement interests can
 b« 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'-'
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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  should  livise the Sts;e  that  it must accept
 the risk  that cleanup  may  later prove  to be  inappropriate.  In
 such an instance, the  site ct'jli  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 enforcenent
 action in lieu of State  action, and assuming lead responsibility
 for the site.

     Determnations regarding whether  greater  EPA involvement is
 necessary,  and the nature  of  response, will  be made jointly by the
 Region and  the Office  of v.'as te' 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  Monitorina  - Waste.

     Extent of State Involvement  in EPA-lcad 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  may  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  preoarinc  the Agreements will  be developed
 in  consultation with ASTSWMO and  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.)

      Sharinn  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  sites.
4/ EPA will endeavor  to  incorporate  State standards  in  the selected
Temedy where  the State standards  are consistent with a  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  Region 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/PS 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 meetings 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 amona
changes to be proposed in the National Contingency Plan.)  Further,
guidance implementing agency  rules regarding intergovernmental
review of certain agency actions provides up to 60 days for States
to comment on the agency's intent to initiate RI/FS activities.
While responsible p-arty 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-
ceed i7»g~T:odfirveTcirTn7cTcTm!einr^            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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                                                         OSVER « 9831.3
                               -13-


     Wherever practicable, EPA will provide opportunity to connent
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
General.  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  fanned.

     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
through 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 developing this policy document, t*o find solutions
to issues that arise in'the course of CERCLA and related State
enforcement programs.

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(O
00
en

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                                                                                             OSWER  #  9835.G
5034
                   Federal Rejutar / Vol.  50. No.  24 /-Tuttdiy. February  5. 1985 / Notices
ENVIRONMENTAL PROTECTION
AOENCY
                itrrtc
HaaroouaWt
-Agency.
       t Environmental Protection

        Request for public comment

        r. The Agency U publishing
today it* iatihffl CERCLA Mttltment
policy in order to tolidt public comatnt
on it. Tbt policy govern* private party
cleanup and contribution proposal!
under the Comprebeniive
Environmental Ratponaa. CompenMtion
tad Liability Act of 1900 (-CERCLT or
"Suparfund"). Tht Agency U alao
publishing a* an attachmtnt a more
datailtd discuttion of issue* raited by
thia policy.
OATC Comment! mu»t be provided on or
before April 6.1065.
MM PUWTMIM mrOMMATIOM CONTACT
Debbie Wood. U.S. Environmental
Protection Agency. Office of Waite
Programs Enforcement. WH-S27. 401 M
Si SW_ Wathington D.C »4«0. (202!
382-4629.
sumuMNTARY mrotiMATtoir Thit
interim policy datcnbet the approach
the Environmental Protection Agency it
now taking in evaluating private party
tettlamant propotaii for cleanup of
hazardous watte tiiat or contribution to
funding of rttponae action under tht
Comprehentive Environmental
Retponte. Compentanon. and Liability
Act (" CERCLA" or "Superfund").  It
reflect! our recent reevtlutnon of
Agency tenlament policies. The policy
it alao generally applicable to imminent
haurd enforcement action* under
lection 7003 of RCRA.
  Tht Agency'* hazardout watte
Mttltmtnt policiet have retailed in
numerout comprehentive pnvatt parry
cltanupt. and in ttrongtr tettlamantt
with private parties. Some potentially
responsible parties fPRP*). hewevei.
have argued that Agency tettlamant
policiet have tottered litigation, and
ditcouraged voluntary private parry
cleanup action*. They have suggested a
number of change*, eucfa at expanded
releatet from liability for PRPt and
routine provition to PRPt of protection
againit pottiblt contribution actiont by
non-tattling partial. Thete tuggettiant
have been made with the expectation
that tuch change* would tubstantislly
encourage voluntary retpontt.
  Tht Agtncy t intenm policy on
CERCLA cate Mttltmtnt hat therefore
been amended to:
"Include  additional incentive! for  .
  private parry cleanup:
—Articulate policy .decision* previouily
  made on a cate by eaaa buii in
  evaluating particular Mttltmtnt
  offers:
—Addreit additioaal policy concern*.
  inr.lrding relettet from liability and
  contribution protection: and,
—Ineludt a itatament of the general
  principle* governing EPA'* CERCLA
  enforcement program.
  Thit policy tat* forth the general
principle* governing private party
Mttlement under CERCLA, and tpedflc
proctduret for Regioaa and
Headquarter* to UM in aaietting private
party tettlammt proposals. It addrenti
negonation* concerning conduct of or
contribution to the remedy determined
by the Agency a* a result of the
remedial invettigan'ont and feasibility
ttudiet. The following topic* are
covered:
  1. CeneraJ principle! for EPA review
of private-parry cleanup propotals:
  2, Managemest guideline* for
negotiation:
  3. Facton governing reletM of
inform* non to potannally retponaiblt
parb t*:
  4. Cnteria for atteuing MtUeraent
offers:
  5. Partial cleanup propoaalr
  6. Contribution among reipontible
ptrti**:
  7. Ralaaie* and covenant* not to tur.
  6-Targeu for litigation:
  g. Timing for negotiation*:
  10. Management aad review of
tettlement negotiation*.
  The policy doet  not explicitly tddrett
PRP participation in tht Agency'!
Mlecnon of remediet for private party
cleanup*. That topic wet addmted in «
memorandum from Lee Thome* and
Courtney Price, entitled "Participation of
Potentially Reipoaiibl* Partiet in
Development of Remedial Investigation*
and Feetibility Srodie* under CERCLA"
(March 20.1984).
  The polici** and procedure* act forth
la the interim policy are guidance to
Agency aao other  government
employee*. The policy *et* forth
enforcement prtorttiai and  procedure*.
and internal procedure* which arc not
appropriate or Bcceiaary subjects for
rulemakiag. Thu*.  the policy doe* not
constitute rulemaJoag by the Agency.
tad may not be relied on to create •
•ubatantive or procedural right or
benefit enforceable by any other penon.
The government may. therefore, taka
action that it at variance with policiet
and procedure* contained m thi*
document.
  The Agency i* publishing and
•eliciting comment on thi*  intenm policy
for a number of reatont. The  Agency
recognize* that the public ii very
concerned with hasardoui watte
enforcement. We believe thtt thit policy
will tubttantially benefit the public by
encouraging retpouiblt partiet to
undertake appropriate and long term
remediet through Mttlement*. We alto
believe that the policy will yield better
result* if the public and potentially
responsible partiet undarttand the  '
policy and our reaton* for adopting IL
  ThU policy wu originally drafted in
December. IQtt. ha* been the tubject of
exteniive review aad evaluation by the
Agency aad the Department of luitica. It
I* therefore being published a* interim
policy. We will reevaluata thit policy in
light of our working experience with
Implementing it. and tht public
comment* that we receive.
  Tht Agency statement of policy
followi. A more detailed diecuinon of
ittuei for public comment i» included in
the Appendix.
  Dated: January 23. U69.   '
Itck W. McCrtw.
Xcftnt Auiiiatit Adminittnter. O#ict of
Solid Watt* and Cmerit/icv Rtiponu.
  Otitd: Jiniury a. 1981
CourBMy M. Phot.
Auiitant Adaiiniitnter. Offict of
EnfOKtmtm and Cainf liana Mon/wnnj

Memorandum
DeetmbefilfM.
Subject Intenm CERCLA Settlement
  Policy
From: Lee M. Thome*. Attittanr
  Adminnntor Offict of Solid Watte
  and Emergency Retponie. Courtney
  Si Pnca. Auiitant Admimttrator
  Office of Enforcement and
  Compliance Monitoring F. Henry
  HabichL JL Attittant Attorney
  General Land and Natural Resource*
  Diviiion. Department of luitica
To: Regional Admini*trator*. Region* \-
  X
  Thi* memorandum Mt* forth the
general principle* governing private
party Mttlament* under CERCLA. and
tpeciflc procedure* for the Region* and
Headquarter* to UM in aliening private
parry Mttlaaien: propoMl*. It address**
the following topic*.
  1. general principle* for EPA review of
private-party cleanup propotaii:
  2. management guideline* for
negotiation:
  X factor* governing rt'.eate of
information to potentially retponiiblc
parties:
  4. criteria for evaluating Mttlement
offers:
  5. partial cleanup propoMli:
  6. contribution among reiponsibl*
 ptrti**:

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   & nlease and convenanta not to mr
   8. targets for litigation:
   Q. tu&ini for negotiations:
   10. management and review of
 Mttliotni negotiations.

 Applicability

   This memorandum incorporate* the
 draft Hazardous Wa«t* CM*
 Settlement Policy, publiabtd in dn/t ia
 December of 1961 It ia applicable not
 only to multiple party case* but to til
 dril hazardous waste enforcement
 CAM* under Superfuad. It i* generally
 applicable to imminent hazard
 enforcement action* under Motion 7009
 ofRCRA.
   Thia policy establishes criteria for
 evaluating private party Mtiletnent
 prepeial* to conduct or contribute to the
 funding of rvtponM action*, including
 rtmoval and remedial actons. It alio
 addresses *ettlement proposals to
 contribute  to funding after a reiponie
 action baa  been completed. It doe* not
 addre*i private-party propocaJ* to
 conduct remedial investigation* and
 feaiibiJiry irudies. The*e propo*ai* an
 to b« evaluated under cntena
 established in the policy guidance from
 Lit M. Thomat. A*ti«tant
 Administrator. Office of Solid Watte
 and Emergency Response, and Courtney
 Price. Assistant Administrator. Office of
 Enforcement and Compliance
 Monitoring entitled "Participation of
 Potentially Reiponsible Panie* ia   •  .
 Development of Remedial Investigation*
 and Feasibility Studies undsr CESCLA".
 (March 20.1984)

 L General Principle*

  The Government'* goal in
 implementing CERCLA i* to achieve
 effective and expedited cleanup at a*
 many uncontrolled hazardous waste
 facilities a* possible. To achieve this
goal the Agency ia committed to a
 strong and vigorous enforcement
 program. The Agency ha* mad* major
 edvanca* in aacuring cleanup at soma of
 the nation'* wont baxardou* watte sita*
 because of it* demoaatrattd willingness
 to use the Fund and to pursue
 •dministrative and judicial enforcament
 actions. In addition, the Agency has
 obtained key decisions, on such iaaut*
 as joint and several liability, which have
 further advanced its enforcement
 efforts.
  The Agency recognize*, however, that
 Fund-financed cleanup*, adciniitrative
 acton and litigation  will not be sufficient
 to accomplish CERCLA's goals, and that
 voluntary cleanup* are essential to a
 successful program for cleanup of the
 nation's hazardous waste sites. The
                    Federal Regain-  /  Vol.  30. No. 24 /Tuesday. February 3.  1985 / NoUces
                                                                     503:
Agency is thenfon re-ev*luating its
settlement policy, in light of three yean
experience with negotiation and
litigation of hazordoua wail* cases, to
nfflov* or minimi** j/ possible the
impediment* to voluntary cleanup.
  As a result of this reassessment the
Agency ha* identified the following
genenl principle* that govern its
Superfund enforcement program;
  • The goal of th* Agency ia
negotiating private party cleanup and in
settlement of hazardous waste caaas ha*
been and will continue to be to obtain
complete cleanup by the responsible
parties, or collect 100% of the coit* of
the cleanup action.
  • Negotiated private party actions an
e**ential to an effective program for
cleanup of the nation'* hazardous waite
sites. An effective program depend* on a
balanced approach relying on a mix of
Fund-financed cleanup, voluntary
agreement* reached through
negotiations, and litigation. Fund-
financed cleanup and litigation under
CERCLA will  not in themselves be
sufficient to axun the success of this
cleanup effort. In addition, expeditiou*
cleanup reached through negotiated
settlements is preferable to protracted
litigation.
  • A strong enforcement program is
essential to encourage voluntary action
by PRP*. Section  106 actions an
particularly valuable mechanisms for
compelling cleanups. The effectiveness
of negotiation is integrally related to the
effectiveness of enforcement and Fund-
financed cleanup. The demonstrated
willingness of the Ajoncy.to use the
Fund to dean up  lite* and to take
enforcement action i* our most
important tool for achieving negotiated
settlements.
  • The liability of potentially
naponsibla partie* i* strict joint and
several unleu they can dearly
demonstrate that the barm at the sita t*
divisible. The recognition on the part of
responsible parties that they may be
jointly and severally liable ia a valuable
impetus for thaw parties to reach the
agreement* that an necessary for
successful negotiations. Without such an
impetus, negotiations run a risk of delay
because of disagreements over the
particulars of each responsible party's
contribution to the problems at the site.
  • The Agency recognizes that the
factual stnngth*  and weaknaases of a
particular case an nlevant ia
evaluating settlement proposals. The
Agency also recognize* that court* may
consider difference* among defendants
in allocating payments among parties
held jointly and severally liable under
CERCLA. While these an primarily the
concerns of PRPs. the Agency will aUo
consider a PRPs contribution to
problems at the lite, including
contribution of waste, in assessing
proposals for settlement and in
identifying target* for litigation.
  • Section 10B of CERCLA provide*
court* with jurisdiction to grant such
relief as the public interest and the
equities of the case may requin. In
assessing proposals for settlement and
identifying targets for litigation, the
Agency will consider aggravating and
mitigating factors and appropriate
equitable factor*.
  • In many circumstance*, deanup*
can be started men quickly when
privet* partie* do the  work themselves.
rather than provide money to the Fund.
It is therefore, preferable for private
parties to conduct cleanups themselves.
rather than simply provide funds for the
Slates or Federal Government to
conduct the deanup.
  • The Agency will create a climate
that is receptive to private party deanup
proposals. To facilitate negotiations  the
Agency will make certain information
available to private panes. PRPs will
normally have an opportunity to be
involved in the studies used to
determine the appropriate extent of
remedy. The Agency will consider
settlement proposals fcr deanup of less
than 100% of deanup activities or
deanup costs. Finally, upon settling with
cooperative parties, the government will
vigorously seek all remaining relief.
inlcuding coits. penalties and treble
damage* where ^ppropr.ate from
partie* whose recalcitrance made a.
complete settlement impossible.
  • The Agency anticipates that bath
the Fund and private resources may be
used at the tame site in tome
circumstance*. When the Agency settles
for laaa than 100% of deanup coat*, it
can use the Fund to assort that site
cleanup will proceed expeditiously. and
than use to recover these costs from
aon-eettliag responsible parties. Where
the Federal government accepts less
than 100% of deanup coats and no
financially viable responsible parties
remaia Superfund monies may be used
to make up the difference.
  • The Agency recognizes the value of
some meaiun of finality in
determinations of liability and in
settlements generally. PRPs frequently
want some certainty in return for
assuming the costs of deanup. and we
recognize that this will be a valuable
incentive for private parr/ cleanup. PRPs
frequently seek a final determination of
liability through contribution protection.
nleases or covenants not to sue. The
Agency will consider releases from
liability in appropriate i.iujtionj. and

-------
                   Fedanl Raster / Vol SO. No.  24 / Tmtday. February S. 1985 / Notiiet
 will also eonudti contribution
 protection IB limited drcufltstancn. The
 Agency will «l*o take eggmsiv*
 enforcement action against thoM parties
 whoee recalcitrance prevents
 settlements, la bringing co*t recovery
 actions, the Agency will also attempt to
 raiM aay remaining daiai under
 CERCLA Mcnoa Un. to  the extent
 practicable.
  The remainder of this  memorandum
 Mta forth specific policiM for
 Implementing thete general principle*.
  Section n MU fortfi the management
 guideline* for negotiating with lew thaa
 all responsible partie* for partial
 settlements. This section reflect* tht
 Agency's willingness to be flexible by
 eoaiidenni offer* for cleanup of let*
 than 100* of cleanup activities or costs.
  Section m teu forth fuidelinet on the
 release of information. The Agency
 recognize* that adequate information
 facilities more fucceiiful negotiation*.
 Thus, the Agency will combine a
 vigorous program for obtaining the data
 and  in/ormabon neceiiary to facilitate
 settlement* with « program for releasing
 information to facilitate communication*
 among reipontible pane*.
  Section* IV and V to diicus* the
 a 'en* for evaluating partial
 MiJamenu. As noted above, in certain
 circuflutaace* the Agency will entertain
 serueaaat offen from PRPi which
axtand only to part of the lite or part of
the coata of cleanup at a  lite. Section IV
of thi* memo  MU forth criteria to be
uaad in evaluating luch offers. These
criteria apply to all caws. Section V set*
 forth the Agency s policy concerning
of.:er* to perform or pay for diirrete
phaae* of an approved cleanup.
  Section* VI and VD relate to
contnbuboa protection and releates
from liability. Where appropnite. the
Agency may consider coatnbuuon
protection and limited releaae* from
Liability to help provide some finality to
settlements.
  Section VID aata forth  criteria  for
aelecnng enforcement caaea and
identifying targets for litigation,  Aa
 diacuaaed above, effective enforcemm
 daptnd* on careful caaa  aelaction and
 the careful (election of targets for
 litigation. The Agancy will apply criteria
 for selection of caaaa to focus sufficient
 resources on  cata* that provide  the
 broadest possible enforcemnt impact, (n
 addition, targets for litigation will be
 identified in light of the willingness of
 partin to perform voluntary cleanup, as
 wall as conventional litigation
 management concerns.
  Section IX sets forth the requirements
 governing the timing of negotiations and
 section X the provision for Headquarters
 review. These sections address the ntad
to provide the Regions with iaercaaed
flaJobilry in negotiation* aad to change
Headquarter* renew in order to
expedite site cleanup.

D. Maaagaoaai Cuidettnea for
Negotiation
  Aa a guideline, the Agency will
negotiate only if the initial offer from
PRPs constitutes a auhatanflal
proportion of the caata of cleanup at the
site, or a substantial portion of the
needed remedial action. Entering into
diacuasion for lasa than a rafrt'^pnaJ
proportion of cleanup ooats or remedial
action needed at the site, would not be
an affective uaa of government
resource*. No specific numerical
threshold for initiating negotiations has
been established.
  In deciding whether to start
negotiations, the Regions should weight
the potential resource demands for
conducting  negotiations against the
likelihood of getting 100% of costs or a
complete remedy.
  Where the Region propose* to
negotiate for a partial settlement
involving lea* than the total coats of a
cleanup, or a complete remedy, the
Region should prepare as pan of its
Case Negotiations Strategy a draaft
evaluation of the case using the
settlement criteria identified in section
IV. Tht draft should discuss how cadi of
lha factor* in section FV applies to the
site in question, and explain why
negotiations for lass than all of the
cleanup costs, or a  partial remedy, are
appropriate. A copy of the draft should
be forwarded to Headquarter*. The
Headquarter* review will be used to
identify major issues of national
significance or issues that may involve
significant Itgal precedents.
  In certain other categories of cases, it
may be appropriate for the Regions to
enter into negotiations with PRP*. even
though the offen from PRP* do not
represent a substantial portion of the
coati of cleanup. Thaaa categories of
caaaa inrludT*
  • administrative settlements of coat
recovery actions where total cleanup
coats were  less than SttO.000:
  • ciaima in bankruptcy;
  • administrative settlements with de
minima contributors of wastes.
  Actions subject to this exceptions are
•dminismtive settlements of cast
recovery cases where all the work at the
sita has been completed  and all coats
have been incurred. The figure of
SZOOOOO refer* to all of the coats of
cleanup. The Agency ia preparing more
detailed guidance on the appropriate
fora of such settlement agreement*, and
the type* of condition* that must be
included.
  Negotiation of claims in bankruptcy
may involve both present owner*, where
the United State* may have an
administrative coat* claim, and other
parties such as past owners or
generator*, where the United State* may .
be an unsecured potential creditor. The
Regions should avoid becoming
involved la bankruptcy proceedings If
then is little likelihood of recovery, aad
should recognize the risks involved ia
negotiating without creditor status. It
may be appropriate to request DOJ filing
of a proof of claim. Further guidance Is
provided m the Memorandum from
Courtney Price entitled "Information
Regarding CERCLA Enforcement
Against Bankrupt Parties." dated May
24.1914.
  In negotiating with d» minimi* partiea.
the Regions should limit their efforts to
low volume, low toxiary disposer* who
would not normally make a significant _
contribution to the costs of cleanup in  ~
any case.
  In considering settlement offer from
de minima contributor*, the Region
should normally focus on achieving cash
settlements. Regions should generally
not enter into negotiations for full
administrative or judicial settlements
with releases, contribution protection, or
other protective clauses. Substantial
resources ihould not be invested in
negotiations with de minima
contributor*, in light of the limited costa
that may be recovered, the tune needed
to prepare the necessary legal
document*, the need for Headquarters
review, potential rtt /udicoto effect*.
aad other effects that de minimi*
settlements may have on the nature of  .
the case remaining to the Government.
  Partial settlements may also be
considered in situations where the
uawUoagneas of a relatively small group
of partiea to settle prevents the
development of a proposal for a
lubatantlaJ portion of costs or the
remedy. Proposals for settlement in
these circumstance* should be assessed
under the criteria set forth in section IV.
  Earlier versions of this policy included
a threshold for negotiations, which
provided that negotiations should net  be
commenced unless an offer was made to
settle for at leest 80% of the costs of
cleanup, or of the remedial action. Thi*
threshold has bean eliminated from the
final version of this policy. It must be
emphasized that elimination of this
threshold doe* not mean thai lk»
Agency is therefore more willing to
accept offer* for partial settlement. The
objective of the Agency is still to obtain
complete cleanup by PRP*. or 100% of
the cast* of cleanup.

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                    Federal RatUtef /  Vol  50  No  2«  / Tueiday.  F'hniary 5. 1985  /  Notices
                                                                      503?
  IL. ..«fctaao «f Information
   The *wocy will •«i«ase information
  con<.«Tur.i -J)« ui< to PRp, to facilitate
  discussions .'or stttWeet among PRPs.
  This information will indudi:
  —Identity of notice Ittttr recipients:
  —Velum* end nature of wastes to the
   extent identified at sent to tha sue:
  —Ranking by voiuma of matarial sent to
   the site, if available.
   In datarminiuf tha typa of information
  to be released, tha Region should
  cansidar tha poaaibla impacts oa any
  potential litigation. Tha Region* ahould
_take stapa to aaaora protection of
  confidential and deu'veretive materials.
  Tha Agency will generally not ralaaM
  actual evidentiary mat anil Tha Regioa
  should stata pa aach released summary
  that it is preliminary, that it was
 furnished in tha couna of compromisa
 negotiations (Fad. Rulas of Evidanca
 406). and. that it is not binding oa tha
 Federal Government.
   This information release should be
 preceded by and combined with a
 vigorous program for collecting
 information from responsible parties. It
 remains standard prr;cnce for tha
 Agency to use tha information lathering
 authorities of RCRA and CERCLA with
 respect to all PRPs at a site. This
 in'- -uooa release should generally be
 c     onad oa> a reciprocal release of
 in.   >anon by PRPs. The information
 request need not be simultaneous, but
 EPA should receive the information
 withia a reasonable time.

 IV. Settlement Criteria
   The objective  of negotiations is to
 collect 100* of cleanup costs or
 complete cleanup from responsible
 parties. The Agency recognizes that ia
 narrowly limited circumstances.
 exceptions to this goal may be
 appropriata. aad bis estabUshedoiteria
 for determining where such exceptions
 are allowed. Although tha Agency will
 consider offers of laaa thaa 100*  In
 accordance with (hie policy, it will do ao
 in light of the Agency's position,
 reinforced by recent court deosiona.
 that PRP liability ia strict joint and
 several unless it can be shown by the)
 PRPs that injury at a site ia clearly
 divisible.
   Based oa a full evalution of the facts
 and~s comprehensive analysis of ail of
 the listed criteria, the Agency may
 consider accepting offer* of leu thaa
 100 percent Rapid aad effective
 settlement depends oa a thorough
 evaluation, and aa aggressive
 information collection program ia
 necessary to prepare effective
 evaluations. Proposals for less thaa total
settlement mould Se as«es««d using the
criteria idem-Jed beluw

1  Volume cf Waste* Contributed to Site
byEaaiPflP

  Information concerning the volume of
wastes contributed to the site by PRPs
should be collected, if available, aad
evaluated ia each case. The volume of
wastes ia aot the only criterion to be
considered, nor may it be the moat
important. A small quantity of waste
may cost proportionately more to
contain or remove than a larger quantity
of a different waste. However, this
volume of waste  may contribute
significantly and  directly to the
distribution of contamination on the
surface and subsurface (including
grouadwater). and to the complexity of
removal of the contamination,  la
addition, if the properties of all wastes
at the site an relatively equal the
volume of wastes contributed by the
PRPs provides a convenient easily
applied criterion  for measuring whether
a PHP's settlement offer may be
reasonable.
  This does not mean,  however, that
PRPs will be required to pay only their
proportionate share based on volume of
contribution of wastes to the site. At
maay sites, there will be wastes for
which PRPs cannot be  identified. If
identified. PRPs may be unable to
provide funds for cleanup. Private parry
funding for cleanup of those wastes
would, therefore, aot be available if
volumetric contribution were the only
criteria.
  Therefore, to achieve the the Agency's
goal of obtaining 100 percent of cleanup
or the cost of cleanup,  it will be
necessary in many cases to require a
settlement contribution greater than tha
percentage of wastes contributed by
each PRP to the site. These costs can bo
obtained through the application of tha
theory pf joint and several liability
whan tha harm ia indivisible. aad
through application of  these criteria m
evaluating settlement proposals.
I Nature of thf Waitet Contributed
            ,
        ental tondty of the hazardous
substances contributed by the PRPs. its
mobility, persistence aad other
properties are important factors to
consider. Aa noted above, a small
amount of wastes, or a highly mobile
waste, may coat more to deaa up.
dispose. or treat thaa leas toxic or
relatively immobile waste*. Ia addition.
any disproportionate adverse effects oa
the environment by the presence of
weates contributed by those PRPs
should be  considered.
   If a waste contributed hy one or more
 of tha parties ofienna « seitiemem
 disproportionately .ncreases :he costs of
 cleanup at tha sue. it may be
 appropriate for parties contributing such
 waste to bear a larger percentage of
 cleanup costs thaa would be the case by
 using solely a volumetric basis.

 3. Strength of Evidence Tracing, th*
 Waitft at ttie Site to the Seating Poniee

   The quality and quantity of tha
 Government t evidence connecting PRPs
 to the wastes at the site obviously
 affects tha settlement value of the
 Government's case. The Government
 must show, by a preponderance of the
 evidence, that the PRP's are connected
 with the wastes in one or more of tha
 ways provided in Section 107 of
 CERCLA. Therefore, if the Government's
 evidence against a particular PRP is
 weak, we should weigh that weakness
 ia evaluating a settlement offer from
 that PRP.
   On the other hand, where indivisible
 harm la shown to exist under the theory
 of joint and several liability the
 Government is in a position to collect
 100% of the cost of cleanup from all
 panes who have contributed to a site.
 Therefore, where the quality and
 quantity of the Government's evidence
 appears to be strong for establishing the
 PRP's liability, the Government should
 rely on the strength of its evidence and
 not decrease the settlement value of its
 case. Discharging such PRPs from
 liability in a partial settlement without
 obtaining a substantial contribution may
 leeve the Government with non-settling
 parties whose involvement at the site
 may be more tenuous.
   Ia aay evaluation of a settlement
 offer, the Agency should weigh the
 amount of information exchange that
 baa occurred before the settlement offer.
 The more the Government knows about
 the evidence it has to connect the
 settling parties to the site, the better this
 evaluation will be. The Information
 collection provisions of RCRA and/or
 CEXGLA should  be used to develop
.evidence prior to preparation of the
 evaluation.

 4. Ability of the Settling Portia To fey
   Ability to pay is not a defense to an
 action by the Government Nevertheless.
 the evaluation of a settlement proposal
 should discuss the financial condition of
 that party, and the practical results of
 pursuing a party for more than the
 Government can hope to actually
 recover. la cost recovery actions it will
 be difficult to negotiate a settlement for
 more thaa a parry's assets. The Region
 should also consider allowing the parry

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                    F«dml Habits* I Vol ML No.  24 / TmxUy. Fabroary 1 IMS / NoUctt
 to reimburse the Fond In reasonable
 installments over a period of time. if the
 party it unable to pay in t lump turn.
 and installment payments would bmtflt
 the Government. A structured
 Mttlmtnt providini for payments over
 time should bt at • payment Itval that
 Uka« into account the party's caah flow.
 An excessive amount could forca a
 party into bankruptcy, which will of
 course make collection vary difficult.
 See tha memorandum dated August 2ft.
 ISO. entitled "Cost Race-vary Action*
 und«r Section 107 of CERCLA* for
 additional guidance on thu subject

 i Litigativw AitJu in Preceding to Trial
   Ubgetive rukj which might ba
 encountered at tnal and which should
 weigh in considaratioo of any settlement
 offar includ* traditional factor* such as:
   a. Admiuibiliiy of the Govtmmeni'i
 Wrfence
   If nacassary Covtmnant avidanca is
 unlikaly to ba admitted in a trial
 bacausa of procadural or substantive
 preblama in tha acquisition or craatton
 alias avidanca. thu infirmity should ba
 considered as reducing tha
 Covanunanfs chanca of succass and,
 tharafora. reducing tht amount tha
 Govamtnant should expect to racaiva in
 a settlement.
•  b. Adequacy of tht Government '$
 tvidtnu
  Certain aspects of this point have
 already been discussed above.
 However, it deserves mention «gsin
 because the Government's case depends
 on substantial quantises of sampling.
 analytical and other technical data and
 expert testimony. If the evidence in
 support of the Government's case is
 incomplete or based upon controversial
 science, or if the Government's evidence
 is otherwise unlikaly to withstand tha
 scrutiny of a tnal the amount that the
 Government might expect to racaiva in a
 settlement will ba reduced.
  la tha unlikely event that one or. more
of the settling parties appears to have a
defense to tha Government's action
under section lOTfb) of CERCLA. tha
Government should expect to receive
lass in a settlement from thai PUP.
Availability of one or more defenses to
one PRP which are not common to all
PRPs in tha case should not however.
lower the expectenon of what an entire
offering group should pay.
d Public Inumt Caiutdentioni
  The purpose of site cleanup is to
protect public health and the
environment. Therefore, in analytin; a
settlement proposal the timing of the
cleanup and the ebillty of the
Government to clean up the site should
be considered. For example. If the State
cannot fund its portion of a Fund-
financed cleanup, a private-party  .
cleanup proposal may ba given more
favorabk consideration than one
received in a case where the State can
fund its portion of cleanup coats, if
necessary.
  Public interest considerations also
inchtde 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 ba
used to Justify  a settlement of lass than
100* only when there is e demonstrated
need for e quick remedy to protect
public health or the environment.
JO Noun of tttt COM that /Unoins
  In somrcases. the factual situation
may be conducive to estebliahing 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 precedent* in themselves, and
are examined extensively by PRPs in
other  cases. Settlement of such cases
should always be on term*  most
favorable to the Government. Where
PRPs will not settle on such terms, end
the quality and quannty of  evidence is
strong, it may be in the overall interest
of the Government to try the case.
8. Volut of Obtaining e Pnitnt Stun
  If money can be obtained now and
turned over to the Fund, where it can
earn interest until the tune it it spent to
clean up a site, the net present value of
obtaining the sum offered In settlement
now can be computed ag*i&*t tha
possibility of obtaining a larger turn in
the future. This calculation may show
that tha net praent value of the earn
offered la settlement U. IB reality, higher
than tha amount tha Government can
expect to obtain at vial EPA ha*
developed aa economic modal to aaaess
these and other related economic
factors.  More information on  this model
can be obtaiu«d from the Director.
Office of Waste Programs Enforcement.

A /neonu Rtt md Ajfrarotinf foctcre
  All analyses of settlement propoaals
should flag for the decision makers eny
apparent inequities to tha settling
parties inherent la the Government's
case, and apparent inequities to  others If
the settlement proposal is accepted, and
any aggravating factors. However, it
Bult be understood that the statute
operates on the underlying principle of
strict Usbitity enJ thni equitable
matters are not
  All settlement evaluations should
address the nature of tha case that
remains if the settlement i* accepted.
For example, if there are no financially
viable parties left to proceed against for
the balance of the cleanup aftar the
settlement, the settlement offar should
constitute everything tha Government
expects to obtain at that tita. Tha  .
questions arc What dote the
Government gala by settling this portion
of the caaeT Does tha settlement or its
terms harm tha *-*"'"«»g portion of tha
oaeer will the Government have to
expend the same amount ol resources to
try the  remaining portion of the case? U
aa why should the settlement offer be
accepted?
  This  analysis Is extremely important
and should come at the conclusion of
the evaluation.

 V. f ertial Qoaaupa
  On occasion. PRPs may offer to
perform or pay for one phase of e site
cleenup (such es a surface removal
ectton) but not commit to any other
phase of the cleenup (such  as ground
water treatment). In some
circumstances, it may be appropriate to
enter into settlements for such partial
cleanups, rather than to resolve ell
Issues  in one settlement For example, in
some cases It is necessary to conduct
initial phsses of site cleanup m order to
gather  sufficient data to eveluate the
need for and type of work to be'done on
subsequent phases. In such cases, offers
from PRPs to conduct at pay for less
than all phases of site cleanup should be
evaluated in the seme manner and by
the same criterie as set forth above.
Settlements performed et the site. This
provision does not cover preparation of
aa Rl/FS, which is covered by a
aeparate guidance document Lee
Thomas and Courtney Price's
"Participation of Potentially Responsible
Perties in Rl/FS Development" (March
8X 19M).
VI. CootrlbuHoo Protection
  Contribution among responsible
perties it baaed on the principle that a
jointly  and severally liable perry who
has paid all or e portion of e judgment
or settlement may be entitled to
reimbursement from other jomCy or
severally liable parties. When the
Agency reaches a partial settlement
with some parties.  It will frequently
pursue en enforcement tenon against
non-stttling responsible perues to
recover the remaining  cost* of cleenup
If such on act-™ it undertaken, there is
 a possibility that those pon-ttttlon

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                    Fedtrtl RtfiXar / VoL SO. No.  24 / Tuesday. Ftbrotry 5. 1965 / Noao*
 would ia turn MM Mttiinf parts*. If this
 action by nonatrtliag parties ia
 •ueetttfuL then the Mttliaf partita
 would tod up paying • larger than of
 cleanup costs than wu determined in
 the Agency'* settlement This ia
 obviously a disincentive to settlement
   Contribution protection in a count
 decree can prtvtnt thia outcome. In a
 contribution protection clauaa. tht
 United Sutta would agree to radon its
 judgment agaiast tht ncn-settiiag
 parts*, to tho extant necessary to
      piiah tho atttling party1* Ubility to
 the aonattttiag third party.
. Tha Agency recognize* tha value of
 contribution protection in limited
 situation* in order to provida aomt
 maasura of finality to settlement*..
 Fundamantally. wt baliava that tattling
 parties an protactad from contribution
 action* at a mattar of law. batad on tha
 Uniform Contribution Aaonf
Tottfaaion Act. That Act provide* that
whara Mttlamanu an entered into in
 "good faith", the Mttlon an diachariad
 from "all liability for contribution to any
othar joint tortfeasoFS." To tha extant
 that 'hi* law ia adoptad a* tha Federal
 rule of decision, then will be no need
 for specific clause* ia consent
agreement* to provida contribution
 •o lection.
  Then ha* not yet been any ruling on
 ~»a  iaaua. Thus, tha Agency may lull be
aakad to provide contribution protection
in tha form of offset* and reduction* in
judgment In determining whether
explicit contribution protection dame*
an  appropriate, the Region should
consider the following factors:
  •  Explicit contribution protection
clause* an generally not appropriate
unle** liability can be clearly allocated.
so that the risk of reapportionment by a
judge ia any futun action would be
  • Inclusion should depend on case-
byi7i»
 will not occur.
   Other remedie* may be lei*
 sppropriata for expansive nie**«s
 particularly if the content order or
 agreement does not include perfanneaur
 standards. It may be sppropna!« in *ueh
 circumstancas to negotiate releases tfu:
 become effective several yt«n *('.«
 completion of the remedi*! tenor.. 10
 that the effectiveness ar.d reliability of
 the technology can be cieiriy
 demonstrated. The Aeency  *ntinp^!m
 that responsible paries  may b- ah!* to
 achieve a enater ditree M rrrsur.ry m

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 5040
Federal Ksjjjatar  I  Vol  5a No.  24 / Tuesday. February 5. IBM  /  Notice*
 •etdemiou whu the state of Kitntlflc
 understanding concerning (bit*
 technical issues bu advanced.
  Regardless of the relative
 expaasiveaeas or stringency of the
 rtluM In other respects, at • ""•*«"•«•
 settleiaeat documents must indude
 nopaaen allowing thi Government to
 modify term* tad condition! of the
 egmment for tht following types of
 circumstance*:
  • Where previously unknown or
 undetected conditions thai ahM or an
 discovered at tha aita afttr thi time of
 tha agreement may present an '"T*'"""*
 aad tubitaatiaJ aadaagerment to public
 health, welfare of tha environment
  • Whan tha Agency receive*
 additional information, wtuch w*« not
 available at tha tima of the agreement.
 concerning  tha leiantifie determinations
 on which tha tetUamant wai premised
 (for axampla.  health effect! allocated
 with level*  of exposure, toxieity of
 hazardous substances, and the
 apprepnateaeu of the remedial
 technologies for conditions at the lite)
 and thii additional information
 indicate! that ute condition! may
pnient an imminent and substantial
andangtrmant to the public health or
welfare or tha environment
  In addition, nlaaaa ciauie* muit not
preclude the Government from
recovering coiu incurred in responding
to the type of  imminent and lubitantial
endangevents identified above.
  la extraordinary circumitancei. it
may be clear a her application of the
Mttlemeat criteria sat out in secrion IV
that it ii in the public interest to agree to
a more limited or mon axpaniiva
nleaae not  aubject to the condition!
outlined above. Concurrence of the
Assistant Adminiitnton for OSVVCR
 and OEQ4 (aad tha Arniatant Attorney
 General when tha release ii given oa
 behalf of tha Waited State*) mutt ba
 obtained before the Government's
 negotiating team ii authoriied to
 negotiate nfarding each • nleaaa or
 ceveaaAL
  The extent of nlaaaet thould ba the
 same, whether the private partiei
 conduct tha daamip themselves or pay
 for Federal Government cleanup. Whan
 mponiibla partia* pay for Federal
 Government cleanup, the nleaaa will
 ordinarily not become effective until
 cleanup is completed aad the actual
 coata of the cleanup an ascertained.
 Responsible parties will thereby bear
 the riik of uacartaiabM arising during
 execution of tha cleanup. In limited
 circumstance*, the nlease may become
 effective upon payment for Federal
 Government cleanup, if the payment
 include* a canfully calculated premium
 or other financial instrument that
                    adequately injures the Federal
                    Government against thes« iiawtainties.
                    Finally, the Agency su, M mon willing
                    to aarUa for lea* than the total costs of
                    claanup whan It ia not precluded by a
                    nleaae claua* from eventually
                    mjp»m*»»g eny additional coata that
                    aijht ultimately be iacamd at a aita.
                     Release cUuaea an alao tubtect to the
                    following limitations:
                     •  A nlaase or covenant may be given
                    only to the PRP providiag the
                    coaaidantioa for the nleaae.
                     •  Tha nleaae or covenant mat not
                    involved ia the cat*.
                      • Tha nleaae muat not addms any
                    criminal matter.
                      • Releases for partial cleanup* that
                    do not extend to the entire sit* must b*
                    limited to tht work actually completed,
                      • Federal claim! for natural mourci
                    damage! should not ba nlaased without
                    the approval of Federal trustees.
                      • Responsible parties must nleasa
                    any nlated claim* againat the United
                    States, including tha Hazardous
                    Substances Response Fund.
                      • When the cleanup U to be
                    performed by the PRPs, the release or
                    covenant should normally became
                   .effective only upon the completion of
                    the cleanup (or phase of cleanup) in a
                    manner satisfactory to EPA.
                      • Release clause* should be drafted
                    as covenants not to sue. nthsr than
                    nlaaae* from liability, whan this form
                    may be neceaoary to protect the legal
                   . rights of the Federal Government.
                      A nleasc or covenant not to sue
                    terminate* or seriously Impair* the
                    Government'* rights of action against
                    PUP*. Therefore, tha document should
                    be carefully warded so that tha intent of
                    the parties aad extant of tha Bitten
                    covered by the nleaaa or covenant an
                    dearly stated, Any vn;»ed •ettlemeat
                    «^"««"««l a nleaae •• --• a poastbta
                    ambiguity will ba noosed for further
                    negotiation.
                    VHL Targets for Uttganoo
                      The Region! should identify particular
                    cam for ntoral ia light of tha following
                    factors:
                    —Substantial environmental problem!
                      exist
                    —Tha Agency'! case has legal merit
                    —The amount of money or deanup
                      Involved la rtgnificant
                    — Cood legal precedent ia poaalble
                      (cases should be njteted when tha
                      potential for advene precedent is
                    —The evidence is strong, well
                      developed, or capable of
                      development
                    —Statute of limitations problems exist
—Responsible partiei an financially
  viable.
  The goal of the Agency is to bring
enforcement action wherever needed to
aaaan private party cleanup or to
ncevei costs. The following types of
case* an the tUfaest pttorinea for
nfemls:
—107 actions to which aD costs have
  been lacomd;
—Combined 100/107 actions la which a
  «ijiiiiiM.it phaae has been completed,
  additional iajncove relief is needed
  aad identified, and du Fund will not
  be used
—10B action! which will not be the
  subject of Fund-financed deaaup.
  Referral* for intunctive relief may also
be appropriate in cases when  it is
possible that Fund-financed cleanup will
be undertaken. Such referral*  may be
aeadad when men an potential statute
of limitation concerns, or when tha lit*
has been identified a! ealorcemeat-lead.
aad prospect! for lueceiiful litigation
an good.
  Regional office* should periodically
nevaluate current targets for  referral u
determine if they meet the guidelines
identified above.
  As indicated baton, under the theory
of joint and several liability the
Government is not nojiind to bring
enforcement action against all of the
potentially responsible parties involved
at a site. The primary concern of the
Government ia identifying targets for
Ubgstion is to bring a meritorious case
against responsible parties who have
the ability to undertake or pay for
response action, Tha Government will
determine the targets of litigation ia
order to reach tha largest manageable
Bomber of parties, baaed on tondty and
volume, and financial viability. Owners
aad operators wtD generally be the
target of litigation, oaleaa bankrupt or
otherwise judgment proof. In
appropriate case*, the Government will
consider pioseoitins, claims ia
bankruptcy. The  Government may also
select targets for litigation for limited
pUZpOMft* tttCh §t nt*) ACCUeV
  Parties who an targeted for litigation
an of course not precluded bom
lavolviag parties who have not been
targeted in developing aetdameni offer*
for consideration by me Government.
  la determining the appropriate targets
for litigation, the Government will
consider the willingness of parti** to
settle, as demoasffatad la the
negotiation stag*. la identifying a
manageable number of partia* for
 litigation, the Agency will consider the
 recalcitrance or willingness to settle of
 the parties who wen involved in the

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                   Federal  Refiner /  VoL SO. No. 24 / Tuesday. Febnjiry 5.  \9U I Noriega
                                                                      5041
 negotiations. The Agency will alto
 consider other aggravating and
 mitigating (acton concerning
 rtfpoiuiblt party actiona in identifying
 targets for litigation,
  In addition, it may ba appropriate.
 whan tha Agency ia conducting phased
 cleanup and hai reached a aattlamant
 for oaa phase. to first aua only non-
 •attllBi compaaiai for tbt next phase,
 •""••'•I that fuch financially viable
 partie* art availabla. Thia approach
 would not pnduda nit against settling
 parties. bat non-aattlan would ba auad
 Initially.
  Tha Agency recognizes that Federal
 agtnciaa may b« niponaibla for cleanup
 cotta at haurdoua waste litta.
 Accordingly. Federal facilitiet will ba
 issued nonca letter* and administrative
 order* whan apprepriata/lnstead of
 litigation, tha Agency will. me tha
 procedure* established by Executive
 Order* 12068 and 121 4« and all
 applicable Memoranda of
 Undemanding to resolve iuue*
 concerning tuch agency's liability. The
 Agency vail take all itapa necessary to
 encourage successful negotiations.
  Under our revised policy on
responsible party participation in RI/FS,
PRPa have increased opportunities for
involvement in the development of the
remedial invesogariona and feasibility
studies which the Agency use* to
identify the appropriate remedy.  In-light
of tha fact that PRP* will have received
nonce letter* and the information
identified in section ID of this policy.
prelitigMon negotiations can be
conducted in an expeditious fashion.
  Tbe Negotiation* Dtcutoa Document
(NDD). which follow* completion of the
RI/FS. auk** the pralimfaify
tdeattficatioa  el the eppraprista remedy
for the alit. PreUttgattoe negotUOooa
between the Government end the PRP*
should normally not extend for more
than 00 day* after epproveJ of the NOD.
If significant profroea la oot made within
a reasonable amouat of time, the
Agency will not hesitate to abandon
Qegotiationa and proceed immediately
with edminiavative action or litigation.
It should be noted that these atepa do
not preclude further negotiations.
  Extensions  can be considered in
complex case* where there ia no threat
of seriously delaying cleanup action.
Any extension of this period must be
predicated on having a good faith offer
from the PRP* which, if successfully
-egouated. will aeve the Government
  bstantial time and resource* in
.(taming the cleanup objective*.
 X. Management and Review of
 Settlement Negotiatiooa.

   All settlement documents must
 receive concurrence (ram OWPE and
 OECM-Waite, and be approved by the
 Aaaiatut Administrator of OECM in
 accordance with delegation*. The
 management guideline diacuaaed in
 Section Q allow* the Region* to
 commence negotiations if responsible
 partie* make as imtiaJ offer for a
 substantial proportion of the cleanup
      . Before commencing negotiations
 for partial settlement*, the Regiona
 should prepare e preliminary draft
 evaluation of tha case using the
 settlement cnterie in section (V of this
 policy. A copy of this evaluation shoud
 be forwarded to Headquarters.
   A final detailed evaluation of
 settlements is. required when the
 Regions request Headquarters approval
 of the** settlement*. This written
 evaluation should be submitted to
 OECM-Waste and OWPE by the legal
 and technical personnel on the case.
 These will normally be the Regional
 attorney and technical representative.
   Tha evaluation memorandum should
 indicate whether the settlement ia for
 100% of tha work or cleanup costs. If dus
 figure ia leu than 100%. the
 memorandum should include a
 discussion of the advantage* and
 disadvantages of the proposed
 settlement a* measured by the criteria in
 section IV. The Agency expects full
 evaluation* of fid) of Uw cmer.a
 specified in the policy and will return
 inadequate evaluationa.
   Tbe Regions are authorized to
• conclude .settlements in certain type* of
 hazardous waste cases on dMir own.
 without prior review by Headquarter* or
 DOJ. Caeea selected for this treatment
 wooidnofnajt* ban lowtr priority for
 btigattoe. Categories of cases not
 •abject to Headquarter* rettew include
 aegottattoa far cost teto»eq> cesee
 under S20GJQO and negotiation of claim*
 Bled in bankruptcy. In cost recovery
 case*, the Raglan* should pay particular
 attention to weighing dM  reeources
 neceuary to conduct negotiation* at J
 litigation against the «mounta that may
 be recovered, and the prospects for
   Authority to appear and try ease*
 before the Bankruptcy Court would not
 be delegated to the Regions, but would
 be retained by the Department of
 Justice. The Department will file ceaea
 where an acceptable negotiated
 settlement cannot be reached. Cople* of
 settlement documents for such
 agreement* should be provided ot
 OWPE and OECM.
  Specific detail* concerning these
authorizations will be eddressed in
delegations thet will be forwerded to the
Regions under separate cover.
Headquarter* i* conducting an
evaluation of the effectiveness of
existing delegations, and is assessing
the possibility of additional delegations.

Note on Purpoee and Uses of tfua
•  The policies and procedures set forth
here, and internal Government
procedure* adopted to implement theae
policies, are intended as guidance to
Agency and other Government
employees. They do not constitute
rulamaking by the Agency, and may nut
be relied on to create a substantive or
procedural right or benefit enforceable
by any other person. The Government
may take action that is at variance with
the policies and procedures in this
memorandum.
  If you have any questions or
comments on this policy, or problems
that need to be addressed in further
guidance to implement this policy.
please contact Gene A. Lucero. Director
of the Office of Waste Programs
Enforcement (FTS M2-4614). or Richard
May*. Senior Enforcement Counsel (FTS
382-4137).

Appendix—Discussion of Issue* Raised
by Interim CERCLA Settlement  Policy
  This appendix di*cus»*s in greater
detail certain issues raued by the
interim policy and identifies specific
issues for public umner.t. It focusw un
issues of broad public concern, rather
than issues related primarily to internal
Agency oianagement. The section
headings of this attachment generally
parallel the specific section* of the
enforcement policy.
IGesjonlPTttdple*
  The discussion of general principl**
set* oat the overall philosophy
governing the Superfund enforcement
program. To achieve the greatest
pouiblt number of timely and effect**
cleanup actions, the Agency must strike
a balance between two opposite
approaches. On* approach emahasizf*
quick resort to the Fund and
enforcement authorities, and the other
features more incentive* for privet*
party cleanup.
  We have attempted to combine
feature* of both these spproachn irr.o a
vigorous enforcement program that will
encourage private party cleanups TVw
approaches,  and their limitations. ar»
described in greater detail below.
   Under one general approach, thr
Agency would quickly resor to r.'h*>r

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                   Fadaul lUtift** / Vol Sa  No. 24 I Tuttdiy. February 5. 196S / Notice*
 enforcement acttao nek e* litigation
 tad tdministrative order*, or Federal
 government cleanup under the Fund.
 Release* from liability tad explicit
 contribution protection dauae* would
 b« ithetiy limited under thit approach.
 •ad tha tuna for negotiation* prior to
 enforcement or Puad-fiaaaead cleanup
 action would ba short Tha limitation of
 thii general approach if that EPA may
 not alway* ba abla to move to daan op
 enough aitn. bacauaa of restriction* oa .
 the oaa of tha Fond aad tha time aad
 reaourcea needed to ooopal cleanup
 through anforcana&t Furthermore.
 many privata parti** believe that aa a
 ffaoarml mattar. may eu conduct
 cleanup activities mora quickly and at
 Uaa coat than tha Fadaral government
 aad hava cUmad that this approach may
 discourage privata party initiative*.
  Under tha othar ganeral approach, tha
 Agency would provida additional
 iocantvaa to encourage PRP cleanup.
 For example, tettlements would allow
 mora expansive ralaaaa* from liability.
 contribution protection would ba
 provided, and EPA would take at much
 tima a* naadad to ritolva isiuet through
 negotiations before it raaoned to
enforcement action or Fund-financed
cleanup. It it poaaibla that tha Agency
would raach mora oaf otiated
aattlamanu under thia approach. One
limiution of thu approach it that tha
Agency would aaauma financial riiki if
It become* clear in light of changed
drcumauncat or improved knowledge
of site problem* that additional cleanup
action ia naadad expansive nlease*
(ram liability would preclude the
Agency from pursuing reapotuibla
partai for additional cleanup coita.
  Also, protracted negotiations would
delay cleanup of sites. Further, privata
party cleanup* may am increaaa without
an attendant aggressive enforcement
program (unilatertl admiaiatrative
 order*, imminent hasard aaforcamaot
 fHf«M «p»
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                    Federal Raster  /  Vol. 30.  No. 24 / Tuttdiy.  February  3. IMS  /  Notices
                                                                       5043
 parties an left to previdt the remaining
 cleanup costs.
   The Agency toliciu comment OB
 whether substantial settlements will bt
 possible without • threshold and
 whither eliminating tha thnthold will
 taooun|t • greater number of
 settlements for tithtr • substantial
 portion of thf cost* of cleanup or of (ha
 claaanp iteeli Th« Agency also aolicits
 eomoaat on how tha tana ~dt minimit
 contrtbutor" should ba daflaad
 OL Raie*a* of laformatioo
   Tha Agency will nleaae iaforaution
 concerning tea *ita to faciliuta
 discussion* of Mttlaaant among PRPs.
 This iaformattoa will include
 —(dantiry of notica lattar recipients:
 —Volume and nature of wastes
   identified as delivered to the site:
 —Any ranking by volume of material
   eent to the site:
 Releeie of some of this material  to PRPs
 it discretionary under the Freedom of
 Information Act (FOLA).
   Under, the policy announced today.
 informebon released to PRPs will
 generally  be conditioned on a reciprocal
 release of information by PRPs. Tha
 Agency solicits comment on whether
 informs Don exempt from disclosure
 •nder FOIA should ba made available to
  IPs oa a discretionary  basis.

 IV. Settlement Criteria
   As discussed above, there will no
 longer be any specific threshold for
 considering settlement offers from PRPs.
 Rather, settlement offen will be
 evaluated using the cnter.a in this
 setiton. Evaluations under these criteria
 should result in a full evaluation of the
 offer and will promote consistency
 among Regional offices. These criteria
 will apply ia evaluation offer* from
 PRPs (i) to clean up the site. (2) to pay
 for dean up of the site, and (3) la coat
 recovery actions. Theee criteria iadadas
   • Volume of waatncoatribotad by
 each PR*
   • Nature of waste contributed:
   • Strength of evidence tracng waste
 to settling parties;
   • Ability of settling parties to pay:
  • Lttigative risks ia proceeding to
 trial:
   • Public inter**! conaidarattoaa:
   • Precedential value:
   • Value of obtaining a present sum
certain:
  • Inequities and aggravating factor*
  • Nature of case that remains after
settlement
  Many of these criteria are typical for
assessing  offen to settle any type of
litigation. Although the Agency will
Consider offen of leu than 100 percent
 in accordance with this policy, it will do
 so in light of the Agency's position that
 PRP liability is strict, joint and several
 unless it can be shown by PRPs that
 injury at a site is clearly divisible. EPA
 solicits comment oa the need, if any. for
 additional criteria.

 V. Partial  CUaaupe
  Under tha interim policy. EPA will
 now. on occasion, consider PRP offen to
 perform or pay for one phase of a site
 cleanup. Tha interim policy discusses
 toe circumstance* in which it may be
 appropriate to eatar into settlements for
 such partial cleanups. ESA solicits
 comments oa thaae arrangements.
 VI Contribution Protection
  Contribution among responsible
 parties is based on the principle that
 where liability is joint and several a
 parry who has paid more than his
 proportional share of a judgment or
 settlement is entitled to reimbursement
 from other liable parties. When the
 Agency reaches a partial settlement
 with some parties, it will frequently
 pursue an enforcement action against
 non-settling responsible parties to
 recover the remaining costs of cleanup.
 If such as  action ia undertaken, than ia
 a possibility that those non-settlon
 would in tun sue settling parties.
arguing that the sattlon an liable to
 them for contribution. If this action by
 non-settling parties is successful.
 settling parties could end up paying a
 larger share of cleanup costs than was
 determined in  the Agency's settlement
  A contribution protection clause ia a
 consent decree is one xethod to prevent
 this outcome. While maintaining the
 right to go against non-settlors for ail
 remaining relief, the United States could
 egree to reduce its judgment agaiaat tha
nan-eettling parties,  to the extent
necessary to extinguish the settling
 parry's liability to the non-eeding third
 party. This suggested approach ia OM of
eevenJ cosoibuttoa protection optiona
 available to the covernmeat Paruea
negotiating settlement have frequently
 sought such protection.
  The potation taken by the gove-cment
 in litigation involving contribution ia
that tha courts should adopt a Federal
rule of decision that follows section 4 of
 the Uniform Contribution Among
Tonfaaaon Act Section  4 provides that
whan settlements an entered into n
 "good faith." the seniors an discharged
 from "all liability for contribution to aey
other tonfeasors." Under thia
 interpretation, than ia no need to
 provide contribution protection to PRPs
 who reach good faith settlements with
 the government (We do aot tuapon
 adopting section 1 of tha Uniform Act as
a Fedenl rule of decision. Section 1
would preclude settlots from seeking
contribution from non-settlon unless (h»
settlors financed or performed a 100
percent cleanup at a site.)
  However, since tha right of
contribution under CERQA is not yet e
settled question, the Agency can take
two approaches ia response to reqaeeta
from PRPs for contribution protection:
  • argue that under its legal
Interpretation, explicit contribution
protection clauses are unnecessary:
  • provide explicit contribution
protection clauses ia consent decrees oa
a case-by-case basis, baaed on tha
Agency's ability to clearly apportion
liability, tha percentage of tha cleanup
represented by the settlement and a
case-specific consideration of the law
which ia likely to be applied.
  Explicit contribution protection
clauses nay serve as an incentive for
private party seRlemeat because PRPs
may be mon confident with a
settlement which includes an explicit
contribution protection clause as part of
an agreement. It is consistent with our
position on joint and several liability
and our support for a uniform Federal
rule of decision in this ana. However.
explicit contribution protection clauses
have several limitations. For example.
the Agency eay become vulnerable for
pan  of tha cleanup costs that would
otherwise be borne by responsible
parties. Ia addition, the drilling
problems involved with such clauses an
complex. Finally, such clauses may
embroil the Federal government in
complex litigation rather than resuming
in final settlements.
  In  the interim policy published today.
the Agency has authorized a vary
limited use of contribution protection
clauses. The Agency is soliciting public
comment on whether tha interim policy
provide* for contribution protection in
the proper circumstance*.
VTL
            Fran Liability
  Potentially responsible parties have
frequently sought total release* from
paat and future liability aa a condition of
settlement The Agency has geeenUy
been reluctant to gnat such total
release* because they impair tha
Agency's ability to assure cleanup m
light of changed condition! or new
information concerning a site.
  We ncognin tat current state of
scientific uncertainty concerning tha
impacts of hazardous substances, oar
ability to detect them, and the
effectiveness of remedies at hazardous
waate sue*. It would be inappropriate
for tha Agency to assume tha
ntpon»"'illty for cleanup if previously

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                   F«dml R«giit«t / VoL 30. No.  24 / Tueiday. February  5. 1985  /  Noticei
unknown or undetected condition* arlM
or an discovered after MttlnMnt or if
new information indicates then may be
u imminent and ratMlantUl
•ndanferoent to public htalth or
welfare or the environment
  Three broad approaches for
reconciling the concern* of the Agency
and of PRPi are to:
  • authorize release* for remedial
action* 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 cost* for unknown conditions
that indicate possible imminent and
substantial endangerments:
  • allow very limited releases with
reopener clauses that not only cover
immm»nt and substantial
endangerment*. but require private
parties to respond to all other releases
or threats of release from the site.
  The guidelines Li 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 toxitity. and the effectiveness
of remedies.
  Generally, the expansivenets of a
release will depend on the degree of
confidence that the Agency has in a
remedy, it may be appropriate to
negotiate a more expansive release
where responsible parties conicnt to
meeting and continuing to attain health
based performance standards. In
addition, the Agency i* considering
allowing more expansive release* where
the private party remedy is a
damonitntad effective alternative to
land disposal such a* incineration.
  Under the second approach, designed
for remedial action*. PRP* will be
required to assum* risk* of imminent
and substantial endangerments
attributable to problem* not known by
the Agency at the time the remedy wa*
•elected. In return. EPA will be
responsible for responding to future
releases of contaminant* that do not ri*e
to the level of an imminent and
substantial endangerment (assuming
dial if PRPs conduct the remedial
action, the approved remedy i*
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 action* would
discourage private parry cleanup, or. at
e minimum, encourage private parties to
pay for government cleanups rather than
conduct the remedial action themselves.
Private parry conduct of the remedial
action is preferable because it i* 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 where the PRP* hire an
approved contractor to perform the
cleanup, and the PRPs' performance is
secured by a satisfactory premium
payment  or surety bond in an amount
well in excess of the estimated  cast of
the work. The term "prenuun 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 solicit* comment* on the
interim release policy, including the
drcumitancM under which raleaie*
should be granted, reopener condition*
that should be included, and when
releases should become effective. The
Agency also solicits comment on the
premium payment or surety bond
concept.
Vm. Targets for Litigation

  The Agency i* not legally required to
bring action againat all potentially
responsible parties at a site. The interim
policy provides that the Agency will
continue to identify target* for litigation
on the basis of factors such as financial
viability, strength of the case, and our
ability to manage litigation. This policy
also provide* an additional incentive for
voluntary cleanup by targeting
recalcitrants for litigation.
  The presence of a Federal agency as a
potentially responsible parry at a
hazardous waste site sometimes delays
negotiations because the position of the
Federal PRP may not be clear to
government negotiators or other PRPs.
The interim policy provides that Federal
facilities are to be 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 adminiitrative
orders in dealing with Federal facilities.
Instead of litigation, we will use the
procedures establi»heri by Executive
Order* ;2C83 and 12146 and appropriate
Memoranda of Understanding to resolve
issues remaining with these facilities
after negotiation sr.ds. EPA will
encourage Federal facilities to
participate in thess negotiations.
(Fft Doc. 84-2359 Filed 2-4-&S; 8:4i 4m)

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                                            OSWER #9835.2
DRAFTING CONSENT DECREES  IN  HAZARDOUS  WASTE



           IMMINENT HAZARD CASES

-------
                       TABLE: OF CONTENTS

                                                      Page


Introduction                                            1

I.  Re Leases 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.     Joinr Responsibility Among Responsible          16
         Farcies 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

                        WASHINGTON. D.C.  20460
                             MAY   |  Q85
MEMORANDUM

SUBJECT:  Drafting Consent Decrees in Hazardous Waste Imminent
          Hazard Cases
FROM:     Courtney M. PriceV__J^u~*->k  I)
          Assistant Administrator for Enforcement
            and
          Jack W.
          Acting Assis't&nt 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 the hazardous waste 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 defendants, 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.

-------
     The guidance is based upon and supplements the Ager.cv's
settlement policy as scaced in a memorandum enciclea "Interim
C'£RCLA Settlement Policy" (hereinafter "Settlement Policy")
whicr. we issued, along with Hanic Habichc of the Department of
Justice, on December 5, 198&.  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 factual
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
terms 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 co 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 coses into account,
nor should 1C 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  100% 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 ic Ls our view chat CERCLA calls
for uniform federal rules of decision,  as a precautionary  measure
corsenc decree releases in chese Scaces should be phrasea  in
terms ot a covenant noc co sue in oraer co -ninimize che possibili
that non-seeding parcies would be released from liability oy
the decree.  Furtnerraore, che release should not extend co
liability under dny statutory claim which did not com che
basis for che complaint or clearly apply to the activities of
the seeding parcy.  (For example, a KCRA subtitle C regulator-/
action release should noc 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's
redisposal liability, i.e., liability arising from off-site
disposal of wastes removed from the site.

     B.  Timing of Releases

         Many responsible parcies have sought to obtain
releases which become effective in advance of completing the
needed abatemenc accions.  As a general rule, che Agency should
require thac releases only become effective when all of the
work (including monitoring ) has been completed co EPA's
satisfaction, whecher defendants financed or conducced the
work.

     C.  Limicing Releases co Account for an Inadequace Remedy

         Although secclement agreements are often designed co
accomplish a complete and permanent remedy, che Agency muse
procecc itself from che possibility that the chosen remedial    «
option will fail to entirely abate the releases at a sice  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
sice.

         1.  Where circumstances permit, compliance with
the decree should be linked to achieving enforceable performance-
based standards.  The Agency muse be in a position to move
against the settling parcies for failure co accain a standard.
To the extent possible, the decree should not merely be a
broadly phrased agreement on a remedy designed to generally
meet che goals and objectives of the decree or the statute at
issue.

         2.  The decree should contain detailed oversight,
operation, maintenance, inspection, and monitoring requiremencs-
designed co prevent and uncover deviations from  technical

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 standards over an extended period of time.  These requlrener.es
 should be embodied in workpians submitted for approval pursuant
 to  the decree.

         3.  The decree should contain financial responsibilitv
 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),  the
 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 ac the site; or

             the receipt of new information concerning
             the scientific premises of the decree.
             (See the 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 Co be performed to eliminate such endangennents.

     Responsible parties, of course, wane the decree to
represent a final disposition of responsibilities.  However,
hazardous waste sice abatement technology has noc progressed
co the point where the Agency can be relatively sure chat che
remedial techniques selecced and implemented coday will  provide .
complete and permanent proceccion co che public on che hundreds
of sites where work has been or will be performed.  The five-pare
program outlined above should maximize che degree of finality
afforded to seeding parcies consiscenc wich che need co
safeguard che interests of che public.

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     D.    Contribucion Protection

           Contribution is an equiraole remedy base a on che
principle chac one who has paiu -nore cnan a reasonaole -roj-or-
cion of a judgment or debc is encicled co reimoursemer.c' : ro-n
ocher liable parties.  The issue of concribucion will oe
particularly critical in nulci-partry cases chac involve secci.e-
mencs wich fewer chan all or che responsible parci.es dnc  -.ere
the government nay still sue some or all or cne non-sect;..-^
parties.  Anticipating chat the government nay sucessrully
pursue a non-settlor, a defendant may demand that che 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 effect of such a contribution protection -lause
sought by a settling defendant would be to have tne Unicea
States agree to reduce its judgment against a non-settiing
responsible party by the amount or contribution ordered co 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 settlors from subsequent contri-
bution actions.  These laws have been modeled on Section * of
the Uniform Contribution Among Tortfeasors Act (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
          Cortfeasors from liability for the injury or
          wrongful death unless its terras so provide;
          buc 1C reduces the claim against the others to
          Che extent of, any amount stipulated by the
          release or che covenant, or in the amount of
          the consideration paid for 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 tortfeasor 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 the model rule as the standard for resolving
contribution questions.  The United States will be  willing  to
include language in a consent decree which states that  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 co reapportion liability.

On a case-by-case basis, the litigation team will assess  whether
these factors and other circumstances in the case warrant
incLustau of contribution protection in the decree.

     Of course, the greater the percentage of cleanup covered
by che decree, the lower the risk that claims for contcibucion
will be successfully asserted against seeding parties.  Compre-
hensive settlements will maximize the chances that compliance
with the terms of che 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 cocal 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 terras 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 Che terms of this Decree,
          the parties do not intend this section to
          serve as a general unqualified release.
          This section should be construed as a covenant
          not to sue the Company, and should not act
          to release any other party from Liability.

          This 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 chis decree, che Government
reserves che righc co seek modificacion co this
Decree or inscicuce a new accion co seek additional
remedial measures ac che sice, chrough an accion
co compel che defendancs' co perform remedial work
or reimburse che Governmenc for cleanup coses,  if:

(1)   ac any cime previously unknown or undececced
condicions ac che Sice presenc or may presenc an
imminenc and subscancial endangerraenc co che
public healch or welfare or che environraenc ;

(2)   che Agency receives new informacion.
concerning che nacure of che subscances ac
che sice or che appropriaceness of che remedy
described in Appendix I, which indicaces chac
sice condicions may presenc an imrainenc and
subscancial endangermenc Co che public healch
or welfare or che environment.

(3)   [chere occurs a change in one or more
assurnpcions upon which che remedial program
is based.  (See discussion in pare C above) .)-

The parcies recognize che possibilicy chac
chere may be brought or asserced againsc che
Company suics or claims for concribucion for
liability for covered matters by persons or
entities that have not 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 parcies chac che Company not be required
co pay amounts in contribution for covered
mattera or be required to remain as parties
in any suit or claim for contribution for
covered matters.  Ic is also agreed that the
Governmenc shall be under no obligacion co
assisc che Company in any way in defending
against such suics for contribution.

The parties represent that this Decree was
negotiated in good faith and that the
Company's undertakings ac che Sice 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 that EPA have access to  the site  in order
to observe any work taking place and monitor  compliance with
the  terras of the decree.  Language granting access should
provide access during the effective period of the decree and
describe the scope of the inspector's powers.

     A sample site access clause is:

          During the effective  period of this decree,
          EPA or its representatives, including
          contractors, shall have access at all times
          to the Site and all property owned  or
          controlled by the defendant for purposes of
          conducting any activity authorized  by CERCLA,
          including buc not limited to:

          A.  Monitoring the progress of activities
              caking placer

          B.  Verifying any data or information
              submitted co EPA;

          C.  Conducting investigations relating to
              contamination at or near the site;

          D.  Obtaining samples at the sice;  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 addi.ci.on, the defendant will noc object to
           EPA's obcaintng, for the 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 to 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.

Ill. 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 to provide for this is:

           Each of the signatories to this Decree certifies
           that he or she is fully authorized to enter into
           the terms and conditions of this Decree and
           to legally bind the party to the Decree so
           represented by htm or her.

     Where there is any doubt regarding the commitment  of the
principals to the decree, or in cases where substantial sums
are at stake, the government, in an abundance of caution, may
wish to require that che principals themselves be signatories
co che decree-.

IV.  Irtstiranee/Financial Responsibility

     A.    Insurance.  Where che cleanup is being conducted
by a responsible party, the party should be required co
protect both itself and EPA from liability, by purchasing
insurance  or chrough anocher financial mechanism, from injuries
to third parties due to aces or omissions of che party conducting
the work.  For example:

           The Company shall purchase and maintain in
           force insurance policies in the maximum amount
           available, which shall procecc che Uniced

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          Scaces and the public againsc any and
          aLL  Liabi.Li.cy arising out 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 E?A
          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
corapLete the work.  This can be accorapL ished by several means.-

           (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 Che 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
Latter two mechanisms require a detailed examination of the
financial status of the party doing the work and che Guarancor.
No matter which financial instrument is used, EPA should be
authorized in, the Decree Co approve such instrument  before it
is incorporated inco che 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 escablishmenc of a cruse rune or escrow'
accounc for paying che concraccor.  The cruse rune or che
accounc can be adrninis cered by a Scace or ocher public enticv
or a bank or similar encicv experienced in adrainiscering cruse
funds.  Neither EPA nor ocher Federal agencies should adminisce:
che fund.   However, che Decree should . provide chac EPA :nusc
approve che form of che Trusc or escrow agreemenc.  The consenc
decree should specify how che fund will be creaced,  how mucn
money is co be deposiced inco che fund, and how aisburseraer.es
will be made from che fund.  The fund accounc should earn
inceresc.

     Disburseraencs are usually linked to complecion of cercain
milescones required by che decree.  Agency approval may oe
required for each disbursemenc.   The final paymenc shoula noc
be made uncil Che concraccor has cercified, ana che Agency has
confirmed, chac all work co be paid for by che fund has been
corapleced.  Ic may also be desirable co establish a scnedule  of.
payments from che fund co assure chac che money remaining in
che fund is sufficienc to pay for complecion of che cleanup
should che concraccor defaulc.  The Decree should provide chac
EPA does noc guarantee che sufficiency of che fund.   A sample
Cruse fund clause is:

          Wichin chree days afcer che encry of chis
          Decree, che Companies  each shall pay co che
          sice Trusc Fund (hereinafter che "Trusc Fund")
          escablished ac che Bank the sum which is shown
          for chat Company in Exhibit A hereto.  Prior co
          establishment of the Trust Fund, che form of che
          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 co as
          the "Work"), which Exhibit is hereby incorporated
          by reference and made a part of this 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 deposiced in che Hazardous Substances Response
          Trusc Fund as recompense for response coses
          incurred by the United States noc otherwise
          reimbursed under the terms of this Decree.

          EPA does noc guarancee the monecary sufficiency
          of the Trust Fund established by this section.

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                             - 13 -


A sample Schedule of ?a;/ner.c clause is:

          The funds will be disbursed in accordance with
          che following schedule.

          (a)  Upon entry of this Decree che Concraccor
          snail receive 5100.000 from che Trust Fund.

          (b)  Upon completion and approval by EPA
          of items 1, 2, and 3 of the'Work, the
          Contractor shall receive $300,000 from the
          Trust Fund within no more than 20 days
          after receipt of the Trustees  of an applica-
          tion for payment by che Contractor.

          (c)  Upon completion and approval by EPA,
          of items k, 5. 6, and 7 of the Work, the
          Contractor shall receive 5500,000 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 Sice and
          certification by the United States that
          che Contractor has completed che Work, che
          Contractor shall receive $500,000 from the
          Trusc Fund within no more than 30 days after
          receipt by the Trustees of an  applicacion
          for payment by the Company. All remaining
          money in the Trust Fund, including earned
          interest, shall be deposited in che Hazardous
          Substances Response Trusc Fund.

VI.   Restrictions on Conveyance

     It is important chat a subsequent purchaser of real
property is notified that che site is the subject of a  consent
decree, and that he may be required to fulfill the terras
therein.  There ace several methods of providing such notice:

          1.  Depending upon the 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 tide search would reveal the exis-
tence of the decree.  Individual Scace law will have co be
considered as to the proper method of recordation.

          2.  The decree may require chat che grancor nocify
the plaintiff, prior to che cransfer of cicle, of  che name of
the grantee and, subjecc to EPA approval, what specific
requireraencs of che consenc decree will be performed by the
grantee.

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                               1J. -
          3.  The grantor may be required co incluae
notification in che conveyance (deed)  chat che property is
subject to the terns of the consent decree,  and ^ay also  be
required to describe in the conveyance the prior use of the
site, (e.g., use as a hazardous waste  disposal facilitv^.

     The major concern in fashioning any type of language  is  -o
allow for free alienation.  Language such as the follovine
should achieve our objectives:

          Within thirty days of approval by  the Court
          of this 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 proviaed that at least sixty days
          prior to the date of such alienation defendant
          notifies plaintiff of such proposed alienation,
          the name of the grantee, and a description or
          defendant's obligations, if  any, to be perfor-ned
          by such grantee.  In the event of  such alienation,
          all of defendant's obligations pursuant to this
          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 site is the
          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  sites
where the landowner is a named defendant.  In cases involving
non-landowner defendants, the government may wish to specify  in
the decree thac sale of the sice has no effect on the  obligations
of such defendants.

VII.. Priority of Claims Versus Non-Sectling  Parties

     When a case is seeded for less chart che total amount
necessary to complete a response action or to reimburse
plaintiff fully for costs incurred, it may be done so with the
anticipation that the non-settling parties will be available
to reimburse the Agency for the remaining balance and/or
complete the response action.  To ensure chat sufficient funds
are available or to avoid delay in collecting on any judgments
as to non-settling parties, a provision may be included in the
consent decree providing that an Agency judgment obtained
against non-settling parties takes priority over that obtained

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                              - 15 -
by any of che settling parries.  Sample priority of  claims
language is as follows:

          Defendant's claim 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 ac 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.V   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 96T2, or any ocher provision of 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 c-ase -in.d this
          Consent Decree.  N'otning in chis Consent Decree
          shall be deemed co constitute preauchorizarion
          of a CERCLA clai-n within tne meaning of i.0 Cl-'R
          § 300.25(d).

     Consent decrees with similar provisions induce the Petro
Processors, Bluff Road, Chem-Dyne, and Seymour decrees.   In
cases involving jusc 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 Decree

     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 Che 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 the 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 wi.il be adequate resources  co
complete implemencacion of che remedial measures.

X.   Public Access co Documents

     Many consent decrees require an elaborate inves t igac ion
and scudy phase, similar co a CERCLA RI/ FS,  before sone  or  all
of che final remedial actions are determined.  In  all oases,
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 often intensely interested in  che  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 che governmenc or che
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 parcy
which end up before the court, implementation of  the  consent
decree is still litigation-related.

     In general, consent decrees should contain provisions
Chat explicitly require that all technical daca and  factual
information generated and subraicced by che defendant  are
available for public inspeccion unless chey are requesced  co
be made confidential by Che defendant pursuant Co  EPA regulacions
(see 40 C.F.R. Part 2).  Where possible, specific  and general
cacegories of data and information chac che defendanc muse
make public should be specified.  Because of Che  need co procecc
open and frank inceragency coraraunicacion, this provision should
noc apply Co Agency information oc documents.  However,  raw
technical data generated by EPA or che 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 macters left
unresolved by che decree, (e.g., remedial proposals which muse
await complecion of additional sampling and analysis).  In some
cases, EPA and the defendancs 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 che consent decree exempting
negotiation documents from che public disclosure provision.

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                             - 13 -


Also.  EPA should consider clearly articulating from, the outset'
of  the community relacions program chat " negoc iac ion"  documents
are noc official submissions wichin che meaning or the consent
decree clause.

     An example of such a provision is provided below.

          All daca, factual i nforniat ion.  ana documents
          submitted by the Defendant to EPA ana the
          State pursuant to this Consent  Decree shall
          be subject to public inspection unless
          identified as conridential by Defenaant
          in conforraance with 40 C.F.R. Part 2 or
          applicable State law or otherwise exempted
          by the terms of this Consent Decree.  The data,
          factual information and documents so iaentified
          as confiaential 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 to 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 the 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.  Sucli
differences of opinion may also arise over whether or  not  a
force maj eure event has occurred, or whether the defendant has
incurred liability to pay stipulated penalties under the decree.
As noted in Che general guidance on consent decrees, it is
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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                             - 19 -

negotiation among che parries racher -han a judicial  hearir.a,
however, ic is important not co allow negociacions  co consume
coo much cirae.  Therefore,  che government should r.oc  hesicace
co see'< judicial resolucion of disputes which che parries
cannoc readily resolve among chemselves.

     Where possible,  ic is  helpful co minimize  che  drain on
Agency resources by placing on che d-efendanc che burden co
demonscrace chac ics  proposal is TOSC consiscenc wich che
purposes of che decree.  An acceptable sample provision follows

                       DISPUTE RESOLUTION

              The parcies recognize  chac  a
          dispute may arise among defendant, EPA
          and che Scace regarding plans,  proposals
          or implementation schedules required  co be
          subraicced by defendant pursuant co the terms
          and provisions of this Consent  Decree, or
          regarding whether a force  maj eure event,  as
          defined in paragraph 	 of 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
          parties cannot resolve the issue within a
          reasonable time,  not to exceed  thirty calendar
          days, then any party may file a petition  with the
          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 che disputed issue.

               In the event of a dispute  between
          defendant and EPA or the State, defendant
          shall have che burden of:  (1) showing that
          ics proposal is more appropriate than the
          proposal of EPA. or che Scace co fulfill che
          Cerms, conditions, requirements and goals
          of chis Decree, and (2) demonscracing chac
          ics proposal is consiscenc with che Nacional
          Contingency Plan; will abate hazards at the
          sice; and will procecc public healch, welfare,
          and che environmenc from che release or
          threat of release of .hazardous substances ac
          che sice.  If che dispute concerns an issue
          of science, technology, or public policy
          wichin che areas  of EPA's expercise,  che
          Courc shall adopc che position (if any)
          proposed by EPA,  unless che Courc finds  chac
          posicion co be arbicrary and capricious.

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                             - 20 -


 XII.  ScipuLaced Penalties

      Hazardous wasce decrees which establish obligations for
 defendants co complete  in the future should contain stipulated
 penalty provisions co assure that the defendant will comply
 with  i ts -obi igat ions and to minimize disputes over the
 appropriate,  sanccion for failures co comply.  Such obligations
 will  typically include  che 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 co make compliance :nore attractive than 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 §§ 3008, 7003(b);
 CERCLA § 106"(b))f buc also from the court's civil contempt
 power—its independent statutory authority to 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 not subject to 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 the defendant, any
 economic saving from, delaying compliance, and any harm or risk
 of harm to public health or the environment from delaying
 compliance,  (See Perfect Fie Industries, Inc» v. Acme Quilting
 Co..  Inc.. 673"T72d 53  (2d Cir. 1982). cert, denied 103 S.Ct. 73..)
 AE the same  time, the magnitude of stipulated penalties should
 nor be so great that the 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
violat ions.

     Stipulated penalties ^ay be divided between the United
States and a State is co-plaintiffs,  provided chat:  (1)  the
State has taken an -.^tive part in the litigation,  including
the seeking  of stipulated pena.lt ies , '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  United States and a Stace.

                        STIPULATED PENALTIES

          (A)   Unless excused by the  provisions
     of paragraph [force raajeure clause],  the
     Defendant shall  pay the following stipulated
     penalties for any failure to comply with
     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 Day

     1st through 14th day                  31,500
     15th through 44th day                 55,000
     45th day  and beyond                   $10,000

          (B)   Stipulated penalties under this  paragraph
     shall be  paid by two certified checks of equal
     amounts wich one-half of the daily penalty payable
     to che  "Treasurer of che 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  irr addition co any other remedies or
     sanctions which  may be available to EPA/State by
     reason of Defendant's failure co comply with  the
     requirements of  this Consent Decree.

          (D)   If the parties disagree whether
     Defendant has violated a provision of this decree
     for which a stipulaterf-pe,nalty 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.  Admissibilicv of Daea

     In order Co avoid disputes over the incegricy of sample
results or ocher daca in the evenc chac che parcies disagree
over how co implement che consent decree,  che decree should
provide chac verified daca is admissible in evidence.

     A model clause is:

            The Defendants waive any evidenciary
       objeccion to the admissibility inco evidence
       of daca gathered, generated,  or evaluated
       pursuant to this decree that  has been verified
       by the quality control/quality assurance
       procedures contained in part  	.  However,
       a Defendanc may object to a speci:ic 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 sice Work Plan.

     The Decree should provide chac  EPA must approve sampling
and analytical procedures.  Additionally,  it is necessary for
there co 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 incended and cannoc be  relied upon to create any
rights, substancive or procedural, enforceable by any party in
licigacion 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.

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            UNITED STATES ENVIRONMENTAL PROTECTION AJENCY

                        WASHINGTON, O.C. 20460
                             JULI2I9B5                    9BJ2.6
MEMORANDUM

SUBJECT:   Small  Cost Recovery Referrala
 FROM:      Frederick F.  Stiehl
           Associate  Enforcement Counsel for Waste
           Office of  Enforcement and Compliance Monitoring
           Gene A.  Lucero, Director
           Office of Waste Programs Enforcement
           Office of Solid Waste and Emergency Response

 TO:        Regional Counsels, Regions I-X
           Regional Waste Management Division Directors, -
             Regions I-X

      Based on discussions among our staff and Regional
 enforcement  personnel, it appears that confusion exists
 regarding  Agency policy on referring CERCLA cost recovery
 cases valued at less than $200,000.  Apparently, a few of the
 Regions believe that Headquarters will not accept these cases
 because the  December 5, 1984,  Interim CERCLA Settlement Policy
 (1) places a high priority on  large dollar amount cases (see
 the section  on targets for litigation (p. 17), which discusses
 referring  cases involving a "significant" amount of money) ,
 and (2) references the possibility that cases under $200,000
 could be handled administratively.

     Although the Agency has placed a higher priority on
 referring  cost recovery cases  with expenditures in excess of
 $200,000,  there are situations where referring nail cost
 recovery actions is entirely appropriate.  For example, where
 we have initiated  settlement discussions which have failed to
 produce a  settlement because of the recalcitrance of the
 responsible  parties, referral  would generally be appropriate to
 demonstrate  the Agency's commitment toward enforcement as a
'vehicle to compel  private party response at CERCLA sites.  In
 addition,  where a  Region has no cases for more than $200,000,
 where an enforcement presence  would serve a deterrent effect,
 where a Region's other enforcement priorities allow for the
 expenditure  of resources to support a small cost recovery case,
 or where the circumstances are ripe for testing some important
 aspect of  law, referral of such a case would be appropriate.

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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 snail
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
settle on terns acceptable to the Agency.  Under such circum-
stances, email cost recovery actions will take on an even
greater importance, since it vill be necessary to show  the
regulated community that the Agency is serious about pursuing
small cost recovery cases in the judicial, AS well as the
administrative, forum.  In furtherance of that effort,  our
offices and the Department of Justice are prepared to fully
support small cost recovery cases referred by the Regions which
further program goals and are otherwise consistent with Agency
policy.

     For most of you this memorandum simply confirms 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 small  cost
recovery cases for referral.

cc:   David T. Buente, Department of Justice

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              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY   OSWER * 9837.1
\   lr /                     WASHINGTON, D.C. 20460
                             JUL 3 o 1965
                                                          ornci OF tsrotciMiNT
                                                            ANOCOMPLIAfcCI
     MEMORANDUM

     SUBJECT:   Preparation of Hazardous  Waste  Referrals
     FROM:      Frederick F.  Stiehl
               Associate Enforcement  Counsel  for Waste

     TO:        Regional  Counsels, Regions  I-X


         On August  8,  1984,  the  RCRA/CERCLA  Case  Managenent  Handbook
     was  provided  to the EPA Regional Offices to assist  you a,nd  your
     staff  in the  preparation of  judicial  referrals  under  RCRA and
     CERCLA authorities.   The purpose of  this guidance  was to
     describe the  process of assembling a  case and to clearly identify
     the  requirements for all hazardous waste referral packages.  EPA
     must assure that cases  referred  to the Department of  Justice are
     complete and  can be filed within 60 days of referral.

         Experience with the implementation  of the  Case Management
     Handbook has  indicated  that  filing by the Department  of  Justice
     has  been delayed in some cases by the following problems with
     the  referral  packages:

         "   Demand  Letters.   For cost recovery cases, the Region
             should  send Demand Letters and allow  .the response time
             to run  befort referral.   Where prospective  defendant*
             are willing to  settle, the settlement can be  worked
             out before  referring a complaint (and consent decree)
             for filing  or possibly obviating the  need to  file.

         *   Settlement  Negotiations.  In  most cases, limited
             settlement  negotiations  vlch  identified responsible
             parties should  be completed prior to  the referral of a
             cas»  to Headquarters.  This preference  for  conducting
             negotiations prior to requesting that the Department
             of Justice  commence  preparation  of judicial pleadings
             is set  out  in the Case Managenent Handbook. Chapter II.
             If the  negotiations may  result in a consent decree

-------
        or present precedencial issues, Headquarters or the
        Department of Justice can be brought in informally
        without a referral.

      0  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 endangement
        assessment must be included in all referral packages
        for CERCLA SI06 and RCRA $7003 cases.  The endangerment
        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 facts necessary for imminent
        and substantial endangerment cases.

      *  Cost Documentation.  The Region must submit accurate
        cost recovery check lists to OUPE at least six weeks
        prior to submitting the referral package to Headquarters.
        This will ensure that 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 from EPA.  The 60 day period is
intended to allow the Department of Justice Co review the
litigation report and prepare it* final pleadings.  The 60 day
period is not intended to allow cht Agency time co provide
supplemental information for the referral package or sake
initial contact with -the defendant* regarding the possibility
of settlement.

     All requests co che Department of Justice co delay the
filing of a case beyond the 60 day period must bt made by Che
Assistant Administrator for OECM.  To originate such a request,
the Region must write the Assistant Administrator for OECM.
Any request by the Region co OECM co extend che filing dace of
an accion should be made before che 60 day period ac che Depart-
ment of Justice has run.  We have informally stressed co che
Department that che filing of cases should not be delayed in
reliance on the Region'a intention to request such a delay.

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                             - 3 -
     Effective prosecution of hazardous waste cases, once
referred to the Department of Justice, is a 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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                                                                SEP  13

DHfTATICKS MANUAL                                               1200 TO
                 TOE COMPREHENSIVE ENVIRONMENTAL RESPONSE,
                 "COMPENSATION ASP LIABILITY ACT (CEROA)

          14-14-C.  Administrative Actions Throu^i Consent Orders


 1.  AimORJTy.  After giving notice to the affected state,  to take
 administrative action pursuant to the Comprehensive Environmental Response,
 Compensation and Liability Act, as amended (CERCIA), 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 WHOM CFTra&TFn.  Regional Administrators.

3.  LIMITATIONS.

    a.  Regional Administrators or their delegate** must obtain the advance
concurrence of the Assistant Administrator for Solid Waste and Emergency
Response or his/her deaignee before exercising any of the above authorities.

    b.  The Assistant Administrator for Solid Waste and Emergency Response
or his/her designee may 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 mini mis parties under CERCIA
Section 122(g).

4.  REDELEGATION AUTOORITY.  This authority may be redelegated.

5.  ADDITIONAL REFERENCES.

     a.  Sections 104, 106, and 122 of CEROA.

     b.  AU applicable Agency guidance and directives.

   •  c.  Authority to enter into or exercise Agency concurrence authority
for non-judicial cost recovery agreements or administrative orders is
delegated in 14-14-D, 'Cost Recovery Non-Judicial Agreements and Administrative
Consent Orders »'

     d.  Authority to enter into or exercise Agency concurrence authority in
de minimis settlements under CERCLA Section 122 (g) is delegated in Delegation
14-14-E, "De Minimis Settlements."

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                                                                  SEP  13

DELEGATIONS FttNUAL                                                 1200 TO
                 TOE COMPREHENSIVE ENVIRQWENIAL RESPONSE,
                 "oaMPENSATICN AND LIABILITY ACT (CERQA)

         14-14-B.  Administrative Actions Through Unilateral Orderi
1.  AUIHDRITY.  After giving notice to the affected State,  to take
administrative action pursuant to the Oonprehenaive Environmental Response,
Compensation and Liability Act, as amended (CERQA), including, but not
limited to, issuing such unilateral orders as nay be necessary to protect
public health and welfare and the environment.

2.  TO VftCM DELEGATED.  Regional Administrators.

3.  LIMITATICNS .  Regional Administrators or their delegatees must consult
with the Assistant Administrator for Solid Waste and Emergency Response or
his/her designee When exercising this authority.
4.  Rnyrjr^TICN AlTIHDRITy.  This authority may be redelegated.

5.  ADDITIONAL
    a.  Sections 104, 106, and 122 of CEROA.

    b.  Applicable Agency guidance and OSWER directives.

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DELEGATIONS                                                               1200 TN 9"
                                                                     APR 1 6 aw


                   THE COMPREHENSIVE ENVIRONMENTAL RESPONSE,
                    COMPENSATION AND LIABILITY ACT (CERCLA)

       14-14-A.  Determinations of Imminent and Substantial Endangerment


1.  AUTHORITY.  Pursuant to the Comprehensive Environmental Response,  Compensation
and Liability Act  (CERCLA), to make determinations that there may be an ixmunent
and substantial endangerment to public health or welfare or the environment.

2.  TO WHOM DELEGATED.  Regional Administrators.

3.  LIMITATIONS.  This authority shall be exercised subject to directives
issued by the Assistant Administrator for Solid Vbste and Emergency Response.
Regional Administrators must consult with the Assistant Administrator  for
Solid tfeste and Emergency Response or his/her designee when exercising this
authority.

4.  REDELEGATICN AOTHORITY.  This authority may be redelegated.

5.  ADDITIONAL REFERENCES.  Section 106(a) of CERCLA.

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                                                               SEP  I S

 DELEGATIONS MANUAL                                            1200 TO


                 TOE COMPREHENSIVE ENVIRCWENTAL RESPONSE.
                 "OOMPENSATICM, AND LIABILITY ACT  (CERCLA)

                           14-13-C.  Emergency TROs


 1.  AL7IHDRITY.  To refer  to the Attorney General requests for emergency
 Temporary Restraining Orders under the Comprehensive Environmental Response,
 Condensation  and Liability Act, as amended  (CERCLA).

 2.  TO WH34 DELEGATED.  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
 designers when exercising this authority.

    b.  The Assistant Administrator for Enforcement and Compliance Monitoring
 or his/her delegatee must notify the appropriate Regional Administrator and
 the Assistant Administrator for Solid Waste and Emergency Response or  their
'designees when exercising this authority.

 4.  REDELEGATICM AUTHORITY.   The Assistant  Administrator for Enforcement and
 Compliance Monitoring may redelegate this authority.  The authority delegated
 to Regional Administrators may be  redelegated 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«f«rral of oth*r civil actions under  CERCLA, see Delegation 14-12,
 "Civil Judicial Enforcement Actions."

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                                    -2-

                                                           SEP  13

DELBGATICNS MANUAL                                         1200 TO
                 THE QGMPREHPBIVE EWIRCWEOTAL RESPONSE,
                  OCMPPgATICN,  AND LIABILITY ACT (CgQAT

   14-13-B.  Concurrence in Settlement of Civil Judicial Actions  (cont1)
4.  REDELEGATICN AintCRITY.   The authority to request  the Attorney General
to amend a consent decree issued under CERCLA gay be redelegated 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 CEROA.

     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 CEROA section 122(g) are covered by delegation
14-14-E,  "De Minimis Settlements."

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                                                                  SEP  13

DELEGATIONS MANUAL                                                 1200 TO
                 TOE ocMpREHEtgivE ENVIRONMENTAL RESPONSE,
                  CCMPENSATICK, AND LIABILITY ACT (CERCLA [

       14-13-B.  Concurrence in Settlement of Civil Judicial Actions
 1.  AUTHORITY.  To exercise the Agency's concurrence in the settlement of
 civil  judicial enforcement actions under the Coaprehenaive Environmental
 Response, Compensation, and Liability Act, as amended (CERCLA), and to
 request the Attorney General to amend a consent decree issued under CERCLA.
2.  TO WHCM pFTTTATPn.  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 delegatee Bust
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 SolyJ 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-byHtegion basis.

     d.  Six sonths after the Administrator's signature of this delegation,
and every six Berths  thereafter, the 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-fcegion
basis.  The Administrator  shall be apprised of  the status of  the advance
concurrence requirement upon completion of  each review.

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                                                              SEP I  3 1987

 DELEGATIONS MANUAL                                            1200 TN
                  TOE COMPREHENSIVE ENVIRONMENTAL RESPONSE,
                   COMPENSATION,  AND LIABILITY ACT (CERCLA)

                    14-13-A.   Criminal Enforcement Actions
 1.  AiynORITY.   Pursuant to the Comprehensive Environmental Response,
 Compensation,  and Liability Act,  as amended (CERCLA), 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 CERCLA;  to authorize payment of  awards up to $10,000 to
 any individual  who provides information leading to the arrest and conviction
 of any person for a violation subject to a criminal  penalty under CERQA.

.2.  TO v«y DELEGATED.  The Assistant Administrator  for Enforcement and
 Compliance Monitoring.

 3.  LIMITATIONS.   The amount of CERCLA funds to be made available each
 fiscal year for the payment of the awards as authorized by this delegation
 is limited to an amount agreed upon annually by the  Assistant Administrator
 for Enforcement and Compliance Monitoring and the  Assistant Administrator for
 Solid Waste and Emergency Response.

 4.  REDELEGATICN NJTHXUTf.  The authority to refer  cases  may be redelegated.
 The authority to authorize payment of awards may be  redelegated to the
 Senior Enforcement Counsel for Criminal Enforcement.

 5.  ADDITIONAL  KmattNClb.  Sections 103(b)(3), 103(c), 103(d), and 109(d)
 of CERCLA.                                                       .   .

-------
                                                                  JAN  13

  DELEGATIONS hftNUAL                                                 1200 •
              OOMPRfflBISIVE PJVIRCNMPn'AL RESPONSE, COMPENSATION,
                                  LIABILITY ACT
              14-12.  Civil Judicial Deforcement 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 Biforcement and Compliance
 Monitoring.

      f .  The Regional Administrators must notify the Assistant Administrator
 for Solid Waste and Emergency Response and the Assistant AJainistrator for
 Enforcement and Compliance Monitoring prior to the time they refer cases
 to the Department of Justice.

 4.   prnPT.Pr^TicK AUTHORITY.  The Assistant Administrator for Deforcement
 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
      a .  Memorandum of Understanding between the Agency and the Department
 of Justice, June 1977.

      b.  CSRCLA Sections 104, 106, 107, 109, 122.               •  ,

      c.  See the Chapter 14 delegation entitled "Bnergency TRO's"
for Regional Administrator! ' authority to make direct referrals of  requests
for emergency GESOA Temporary Restraining Orders.

-------
                                                                   JAH 13

 DELEGATIONS MANUAL                                                 12QQ 73
             COMPREHENSIVE  ENVIRONMENTAL RESPONSE, COMPENSATION.
                             AND LIABILITY ACT

                  14-12.  Civil Judicial Deforcement factions


 1.    AUTH3RITY.   To request  the attorney General to appear and represent
 the Agency in  any civil enforcement action and to intervene in any civil
 anforcement  action instituted under the Comprehensive Environmental Response,
 Compensation,  and Liability  Act, as amended (CTPTLA)? 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 CEPQA and represent the
 Agency in such an appeal.

 2.    TO WH3M DEXBGATEZ?.  Regional Administrators, Assistant Administrator •
 for  Enforcement and Compliance 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 CERdA, exclusive of appeals, and requesting
 that  the  Attorney General  decline to prosecute a previously referred, civil
action.

     b.   The Regional Administrators nay 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 Bnergency
 Response  and the  appropriate Regional Administrator prior to initiating or
 intervening  in a  civil action under CEROA, requesting that the Attorney
General declinp to prosecute a previously referred civil enforcement action
under -CEROA, jcvquesting that the Attorney General initiate or intervene
 in a  civil acoton instituted under OEROA, or formally initiating an appeal.

-------
                                                              S£?  I 3 .567

DELEGATIONS MANUAL                                              1200 TO
                   TOE COMPREHENSIVE EWraCWEyTAL. RESPONSE,
                   "OGMPENSATICN, AND LIABILITY ACT  (CERCLA)

         14-6.   Inspections, Sampling, Information Gathering, Subpoenas,
                             and Entry for Response


1.  ALTIHCRITY..  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 VftCM DELEGATED.  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 oust 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 oust 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 Administrator  for Enforcement and Compliance Monitoring  or their
delegatees not consult with the appropriate Regional Administrator or his/her
designee prior  to exercising these authorities.

4.  yHMJBflATim AlflHJUTI.'  This authority way be redeleyaLed;

5.  ADDITIONAL  REYTOEH3S.

    a. Sections 104(e), 109 (a),  109(b) and 122(e)  of CERCLA.

    b. National Contingency  Plan, 40 CFR 300.

-------
                                                OSWZR DZR.  «9841.0
APPENDIX C. (continued)

CAS I    	CHEMICALHAME
TPQ
505-60-2       Mustard gas
534-52-1       Dinitrocresol
624-83-9       Methyl isocyanate
1464-53-5      Diepoxybutane
7550-45-0      Titanium tetrachloride
7647-01-0      Hydrochloric acid (gas only)
7664-39-3      Hydrogen flouride
7664-41-7      ABBOnia
7664-93-9      Sulfuric acid
7697-37-2      Nitric acid
7723-14-0      Phosphorus
7782-50-5      Chlorine
8001-35-2      Toxaphen* (Camphechlor)
500
10/10,000
500
500
100
500
100
500
1,000
1,000
100
100
500/10,000

-------
OSWER DZR. 19841.0
APPENDIX C.
CAS 1
Section 302 Chemicals on S*cti
CHEMICAL NAME
on 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
75-55-B
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
123-31-9
151-56-4
302-01-2
309-00-2
542-88-1
584-84-9
(continued)
Formaldahyd*
M*chlor*thamin*
Par a th ion
Di»*thylhydrazin*
Propiolacton*, b*ta-
Chlordan*
Lindan*
M*thylhydrazin*
Anilin*
Dichlorvos
Nitro«odim*thylamin*
Chloroform
Kathyl bromid*
Hydrocyanic acid
Carbon disulfid*
Ethyl *n* ox id*
Pho»g*n*
Propyl«naimin«
Propylana ox id*
H*xachl or ocy cl opcntad i*n*
Dia*thyl tulfat*
Xerylaaid*
Chloroac*tic acid
P*rac*tic acid
Toluan*, 2,6,-diiaocyanat*
Cr*«ol , o-
B*nzotrichlorid*
B*ntal chlorid*
Nitrob«n**n*
B*nzyl chlorid*.
Epichlorohydrin
Xcrol*in
Acrylonitril*
' ChloroB*thyl Mthyl *th*r
Vinyl ac*tat* »onom*r
Phenol
Oichloro«thyl *th*r
Rydroquinon*
rthyl*n«imin*
Hydratin*
Xldrin
Ctiloromathyl *th*r
Toluan* 2,4 ,-diiaocyanat*

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


-------
                      TITLE III - EXTREMELY HAZARDOUS SUBSTANCES
                              QCMICALS DELETED FROM LIST
                    (As  of  December  17, 1987 and Februery 25,  1988)
   (Alphabetical Listing)
CAS NO.    NAME
16919-58-7 AmmoViufli Chloroplatlnate
1405-87-4  Bee i tree In
98-09-9    Benzenasultonyl  Chloride
106-99-0   Butadiene
109-19-3   Butyl isovaierate
111-34-2   Butyl vinyl  Ethar
2244-16-8  Carvont
107-20-0   Chioroeeeteidehyde
7440-48-4  Cobalt
117-32-2   Coumaturyl
287-92-3   Cylopentena
633-03-4   C.I. Basic Green 1
84-74-2    01 butyl  Phtheiate
8023-53-8  Dichlorobenzelkonlum Chloride
93-05-0    Diethyi-p-Pnenylenediamlne
Mi-ii-3   Dimethyl Phthaiate
   '-84-0   DIoctyl  Phtheiate
. ^<6-06-0   Dioxolene
2235-23-8  Ethyimereurlc Phosphate
1333-87-1  Hexachloronephthalene .
53-66-1    Indomethecln
10023-97-3 Irldium TetrachlorIde
108-67-8   Mesltylene
7440-02-0* Nickel
65-86-1    Orotic Acid
20816-12-0 Osmium Tetroxlde
76-01-7    Pentechloroathane
87-66-5    Pentachlorochejnol
84-80-0    Phylloqulnene
10025-63-7 Plattnous Chlorltf*
13454-96-1 PI at I MB Tetrechlorlde
1331-17-5  PropylfjM Glycol, Ally I Ether
95-63-6    PsaudOdBMn*
10049^07-7 RhodlM Trichloride
128-36-3   Sodlua  Anthrequlnone-1-
           SuIfonete
1314-32-5  Thai lie Oxide
21564-17-0 Thiocyanlc Acid,  2-(Benxo-
           thlazolylthlo) Methyl  E»ter
640-15-3   Thlometon
52-68-6    Trlchlorophon
3048-64-4  vinyInorbornene
  (Numerical  List  by CAS No.)
CAS No.    NAME
52-68-6    Trlchlorophon
53-86-1    Indomethecin
65-86-1    Orotlc  Acid
76-01-7    Pentechloroethane
64-74-2    Dlbutyl Phthaiatu
84-60-0    PhyIloqulnone
87-66-3    Pentechlorophcnol
93-05-0    Dlethyl-p-Phenyl
95-63-6    Pseudocumene
98-09-9    Benzenesulfonyl Chloride
106-99-0   Butadiene
107-20-0   Chloroacetaldehyde
108-67-6   Metltylene
109-19-3   Butyl  Isovelerata
111-34-2   Butyl Vinyl  Ether
117-52-2   CouMfuryl
117-64-0   DIoctyl Phthalat*
126-56-3   Sodium  Anthraquinon«-1'
           SuIfonate
131-11-3   DI-ethyl Phthalete
287-92-3   Cylopentane
633-03*4   C.I. Basic Green  1
640-13-3   ThlOMton
646-06-0   Dtoxolan*
13U-32-5  Thai Me Oxide
1331-17-5  Propylane Glycol.  Allyl  Eth«r
1335-87-1  Hexechloronaphthaiene
1405-87-4  B*cltrecln
2235-25-8  Ethy(mercuric Phosphate
2244-16-8  Cervone
3046-64-4  Vlnylnorbornen*
7440-02-0* Nick*I
7440-48-4  Cobalt
8023-53-8  Dlchlorooenzalkonlum Chloride
 10025-65-7 PI at I nous Chloride
 10025-97-5 Irldium Tatrachlorlde
 10049-07-7 Rhodium Trichloride
 13434-96-1 Platinum  Tatrachlorlde
 16919-58-7 Amonlum  Chloroplatlnete
 20816-12-0 Osmium Tetroxlda
 21564-17-0 Thiocyanlc  Acid,  2-(Benzo-
           thlazolylthlo) Methyl Ester
   Th. CAS NO. for Nickel .as  Mi'tad "incorrectly  in the Federal Register on Fee-uery  25.
   1988 as 7440-02-2; a eorrtctls* «lli be published In the near future.

-------
      ti I.  TM lUt «f btnoBly Ntltrdout  Ufctttnct* ond thtir Throthold >lomln| Quontltlt*
                                                                                                          root I-*
                                    (CAS
                                               Ordor)
   CAS •
     •73-8
21544-32 3
21*09-*0-S
21*04 53 2
2i*U-23-*
22224 «2-*
23135-22 0
21422-53-9
24017-47-8
24fj4-9l-»
2M19-73-8
2M28-22 8
27137-85-5
28347-13-9
28772-56-7
J0674-80-7
39196-18-4
50782•*«•9
53551 2? 1
58270-08-9

62207.TO-S
Mom:
                                                                             letx
                                                                             ,h
                                                                                   lopertobit
                                                                                   Quontity •  >l«rtin| Quontity
                                                     l, 3-D1thtol*n-2-Ti)

                ltli AttM (H«(M3)>
             Tr(efitoro(0*eMere«(t«nyt)SUanc
             Kylyl*n« OiehleriM

                                 t*oeytn«tt

                            Acid, mtnyl  ,l-(2-(li»(1-MthVHthyl)M»inc)|thyl)«
                                                                                          100
                                                                                        1,000
                                                                                            1
                                                                                            1
                                                                                            ^
                                                                                            1
                                                                                          100
                                                                                            1
            Coboit. ((2.2'-(i.2-lthonodiy(b,0.0>)-

            Only tht ttotutory or fintl 10 i> thonn.   for «ort (nfor«ttlon,  tot 40CH
  500
  300
  500  /10.000
  500  /10.000
  500
   10  /10.000
  100  /10.000

1.000
  500
  500
  100  /ID.000

  500
  500
  100  /10.000
  100  /10.000
  100
  100  /10.000
  100

  100 /10.000
  100 /10.000

  100 /10.000
                                                                                          302.4
                                                                                                        t.
         b   TMt MttfUl  it • r«*cttvt »otid.  Th« TN dott  not dtftult to 10,000
             for  non'pOMdor, nen-aolttn, nen-»olotion fonm.
         e   The  cstcui«tM T»c ef>«f>t»d «fttr toeKn tht ttmiaant of pottnt«tl
             etreinoftnieity end/or other toaieity it coavtotM.
         t   Sututory  Moortiblt «jont(ry for purpnot-of notlflettton tftfor UU Met 304(t)(2).
         f   Tht  itttutory  1 pound  rtporttblt «j*ntity for o»thyl itocymttt mrr bt oajutttd  \n t futur* rultMt
         4   BOM  ch«Bicolt  oddod thot «ort not port of tht orif)

-------
      it |.   The lilt »f litfMly Miardoui Sufestanet* and  thatr Thrathotd Utrrtm Oua*t SB)
             riuerin*
             Sulfur
             Artln*
             ««d1u» AFMnlta
             •avlr
             ThalK
>••••••••
9   Sulfur Trlailda
4   Thallaua Suifata
7   •arcuHe CM or t at
0   Tltaniu* TatracMertda
I
2
2   Ooran Trifluorli
0
3
7
•9
•2
2
• 1
•0
•4
•1
•4
5
>•   Salanioua Acid
•4
,«
•0
2
'4
1
1
5
7
o
3
2
2
3
7
3
0
*
1
•
2
9
0
2
1
1
4
5
9
>*
•0
3
•9
•A
•4
0
3
•3
•ft
•9
•1
•7
                                                                                   Quantity •  Ptannlna Quantity

                                                                            ••••••••••••••••••••••a
                                                                            b.a
a
b,a
d

a,I
                  MAlor
                    Chtorldt
            OSOTt
                  ia Sutfttt
             •(trie OKI*
             •Itf^vvt »<««*
               ttMlMI ATMn
-------
     ti •.  The t.iet •» Utr«*ty MI*
                                               tarcat ana ti»e»r Tftraefteld Hannine Ouemitte*
                                                                                                     •at*
                                   (CAS
                                               Orotr)
                                                                                     ortable
  CAI f
                                                                            iietM  (
 991
 990
 999
 1031
 1044
 1122
 1124
 1129
 1303
 1304
 1314
 13U
 1SU
 1327
 1397
 U20
 1444
 1556
 1543
 1400
 1422
 1642
 1752-
 1910-
 19S2-
2001-
2052
2074-
2097-
2104-
2223-
2231-
2230-
2275-
2497-
2524-
2540-
2570-
2507-
2431-
2434
2442-
2*45
 19-0
•54
•42
•44
 S3
•«4
•07
 S3
 25
•44
•27
 32
 54
•JO'
 42-
 47-4
 95-1
 45-7
 50-2
 19-0
 44-5
 93-0
 57
 07
 10
 07
 03
 •2
 2*
 90-0
 37-0
 24 2
 71-9
        4
       -S
       -5
       -4
       -0
       -1
       -5
2757-
2743-
2TTt-
J017
52*4
SUf
U15
1*91
J7j4
sns
U7I
 4104
 4170
 4301
 4411
 t«35
 521*.
 SJU
 513*
 4533
 4923
 7444
     30- T
94-4
04-1
n-r
43 5
$7-1
21-2
24-5
It-t
•97-2
• 23-7
•19-1
« 9
•ri-9
-14-7
 JO-
 W-2
 M-0
 11-4
 1J-0
 12-1
 29-3
 73-9
 22 4
 09-5
!••••••••••••
 42-4
 30
 II
 47
 45
 40
 S3
•41
•21
                         Chlerid*
                      4-litre-,  1-Oiio5 Itftyl later
       »*e*or«t*loU H14. •ttHyl-.0-(4-Ktrecfi«nyl) 0-fMnyl later
                       A«1«,lletl»yl-,0-lthyl o-(4-
-------
    ti I.  T*a Lilt of litra»ly aaiardoua Swbatancat and thoir Thraahold Hanrina Ouanttttaa
                                                                                                      »aaa 1-1
                                 (CAS
                                           r Oroar)
                                                                                   tity
 CM •
»$*•«*••
SM-ZS
543-12
543-41
           Oi tweeter
           Myaraiina
           Aldrin
           •aiacartatt
           fittina
152-14-9
297-7T9
297-97 2
290-00-0
290-02 2
29T04-4
300-42-9
302-01-2
309-00-2
315-11-4
314-42-7
327-9i-0
353-42-4
359-04-1
371-42-0
379-79-3
445-73-4
470-90-4
502-39-4
504-24 5
505-40-2
504-41-4
504 tt 3
504-7B-5
509-14-1
5U-73-I
534-07-4
534-52-1

SU-07-1
541-25 3
U1-S3-7

SA2-M-1
542-90-5   IttiyltM
553-T7-1
                                   Cha»
-------
    IU I.  TM tUt t* Utrwly MtirdM fcMtmm and  th«U Thrmheld Hwwtni •uvttttlw
                                                                                                       ••ft 1-2
                                 (CAS
                                            Ord*r)
   CAS •
••••••••••••I
                             ••••••••••••••••••••••••••••••••••••••••••I
                                                                               Owmttty •  »lw>ii* Quantity
                                                                         •em  (BOOT*)      (MUM)
                                                                      ••••••••••••••••••••••••••••••••••••I*
 M 0V
 •88)
 91-08-
 9S-48-
 97-11-7
 98-OS-S
 98-07-7
 98 13 S
 98-1*-8
 96-87-3
 98-9V3
 100-14-1
 -.00-44-7
 102-34-3
 103-IS-S
 104-89-8
 104-94-7
 107-02-8
 107-07-J
 107-11-9
 107-12-0
 107-1J-1
 107-1S-3
 107-14-4
 107-18-4
.107-JO-2
 107-44-1
 107-49-3
 108-05-4
 108-23-4
                        •Thio6U(4,4-6iet»loro>-
                          Acid
            8«nsetr
-------
     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 o
by Chemcial  Abstract Number (CAS No.).  This  l-ist was puoiisnea
as Appendix A and B to the  final rule  (40 CFR 395) In the
Federal Register on April 22, 1987.  (FR 13376) and revised on
December 17, 1987 (FR 48072) and Feb-uery 23, 1988 (FR 5574) to
delete forty substances.  The list of these forty substances Is
also provided for your  information.

-------
APPENDIX B.  LIST OF EXTREMELY HAZARDOUS SUBSTANCES
              U.S. Environmental Protection Agency
       THE EMERGENCY PLANNING
                    and
       COMMUNITY RIGHT-TO-KNOW
                ACT of 1986
             List of Extremely
           Hazardous Substances
                 40CFR355
               (Stttlont 302 and 304)
                 March 1,1988

-------
   li  I.   The U«t af UtraMly martfout fc«atancat and thalr Thraanald • lamina. Quantttlaa
                                                                                                        •ata 1-1
                                 (CU
                                             Ordar)
CAI •

      0
30-00-0
30-07-7
30-14-6
31-21
31-73-2
31-O-2
34-11-3
34-42-4
33-91-4
34-23-7
34-30-2
34-72-4
37-U-7
37-24-9
37-47-4
37.37-8
37-64-7
57-74-9
58-34-4
58-09-9
39-88-1
40-J4-4
40-41-3
40-31-3
42-38-4
42-3S-S
   •73-7
   •74-8
42-
42-
44-00-4
44-04-8
43-30-3

67-64-J

71-43-4
72-20-8
74-83-9
74-90-8
74-93
      1
73
73
73
79
73-99
   13-o
  •18
  •21-
                                   Cha*n»,  Salicylata (1:1)
          Oiler
          Ll
                                                                          d
                                                                          e,a
                                                                          a
                                                                          c,a
                                                                          a
                                                                          c
                                                                          a
                                                                          c
                                                                          a
                                                                          c,d

                                                                          d
                                                                          e
                                                                          a
                                                                          a
                                                                          a
                                                                          d
                                                                          a
                                                                          d
                                                                          a
          •atnyl Nydratlna
          ttrydwiina. twlfata
                        Aeatata
          MtUtw
          Sadita riuoraacatata
          • 1 troacdlaatfty l •< na
          Mtaml. S-d-HatHylattiyl)-. HatKyl
          CalcMclna
          •ieotina tulfata
          CyclalMilaidi
                       , 4-AB9

T3-84-5
74-02-0
77-47-4
77-Ti-l
77-11-*
70-00-2
71-34-2
7B-99-9
71-71-7
Tf-97-7
79-04-1

79-19-4
79-21-0
79-22-1
00-43-7
•atftyl vtnirl Utam
lactanltrila
AeryldBida
CMaraagattc
                                                                           I
                                                                           a
                                                                           «.l
                                                                           I
                                                                           d
                                                                           I
                                                                           e.a.l
                                                                           a
                                                                           d.t.
                                                                           d
                                                                           e.a.h
                                                                           c,d
                                                                           a
                                                                           t.h
                                                                           •
                                                                           a
                                                                           4,1
                                                                           a   .
                                                                                         1
                                                                                      .000
                                                                                         1
                                                                                         1
                                                                                         1
                                                                                         1
                                                                                         1
                                                                                       100
                                                                                         1
                                                                                       100
                                                                                         1
                                                                                         1
                                                                                         10
                                                                                         1
                                                                                         10
                                                                                         1
                                                                                          1
                                                                                          1
                                                                                          1
                                                                                          1
                                                                                          1
                                                                                          1
                                                                                         10
                                                                                          1
                                                                                         10
                                                                                        100
                                                                                      3.000
                                                                                         10
                                                                                         10
                                                                                      5,000
                                                                                          1
                                                                                      1.000
                                                                                         10
                                                                                        100
                                                                                        100
                                                                                         1

                                                                                         10



                                                                                         1



                                                                                         1
•atnyl
•atnyl 2-GM
                            ryl«ta
                                                                                            1
                                                                                          100
                                                                                            1
                                                                                         .000
                                                                                            1
                                                                                               1
                                                                                                        tlty
                                                                                       10 /10.000
                                                                                      300
                                                                                      300 /10.000.
                                                                                    1,000 no,ooo
                                                                                      300 /10.000
                                                                                       10
                                                                                      300 /10.000
                                                                                      100
                                                                                      300 /10.000
                                                                                      100
                                                                                      100 /10.000
                                                                                      100
                                                                                      100 /10.000
                                                                                      000
                                                                                      100 /10.000
                                                                                      100 /10.000
                                                                                      300
                                                                                      100 /10.000
                                                                                     1,000
                                                                                      300 /10.000
                                                                                     1,000 710,000
                                                                                     1,000 /10.000
                                                                                      300
                                                                                       100 /10.000
                                                                                       300 /10.000
                                                                                       300 /10.000
                                                                                     1,000
                                                                                     1,000
                                                                                        10 /10.000
                                                                                     1,000
                                                                                       300 710,000
                                                                                        10 /10.000
                                                                                       100 /10.000
                                                                                       100 710,000
                                                                                    10,000
                                                                                       100 710,000
                                                                                       100 710.000
                                                                                       300 710.000
                                                                                     1.000
                                                                                       100
                                                                                       900
                                                                                    10,000
                                                                                       100
                                                                                     1.000
                                                                                        10
                                                                                    10.000
                                                                                    10.000
                                                                                       100
                                                                                     1.000
                                                                                                1.000
                                                                                                 900
                                                                                                 100
                                                                                                 MO
                                                                                                   10
                                                                                                 100
                                                                                                 900
                                                                                                 900
                                                                                                 900
                                                                                                1.000
                                                                                                   10
                                                                                                1.000
                                                                                                1,000  710.000
                                                                                                  100  710.000
                                                                                                  100  710,000
                                                                                                  900
                                                                                                  900
                                                                                                  900

-------
      U A.
   CAS •

   •i-oa-7
  110-57-4
 1031-47-*
24017-47-8
   76-OM
  115-21-*
  S27-f»-0
   W-13-5
 155I-25-4
27137-«S-S
  9W-30-1
   75-77-4
  M4-11-J
 1000-4J-1

  JS5-7T-1
 2001.»S-i
 13U-42-1
  10»-OS-4
SU7D-M-9

 1JU-H-7
The kiat of UtreBely Msardam fcftaiancM  and  their Throanold Henntna. QuontttlM


                      (Alohebetical Ordtr)


                                    •M                           «etM  (
             Trene-1.4-01cMerobutene

             Triatefoo
             T r I chl orojneny l a i I ana
             Trlothoiyallana
             trii
             Trleethyltir.
                          CMori
             vinyl Acetate
             Warfarin
                  m OlcMoH
                                                                                                           »•»* »••
ranot*
Mtana


orida
•

WO
hyUlllene
*onyl)Silona

r»
Phoeanite
ao
«a



• r



0«ntity for •ethyl iaacyenata aey be adjuatad In a future ruloaakini action.
        •   lev cfcoBtcole oddad that vere not eert of the ori«lnai Hat of 402 aubatancoa.
        h   •oviood TOO. beaod on nan or ra-tvaluetad tuicity data.
        j   TW la revleod to Ita calculated velua and doe* not chane* due to technical  region ae In a»o»aia
        k   THO TPfj MO rovlaod after oroBinl due to colculatien error.
        I   ChoBlcola en the erielnel Hat that do not evet the teaicity criteria but  bee ami of their ft ton
            velwe and rocadnlied toaicity ore comldered chaaicala of

-------
A.
             if
                                              enf
                                                                                                   'Oft *
                           (Alphabetical Or«*r)
   CAI •

   91-08-7
  110-57-*
 1031-47-4
24017-47-8
   76-02-8
  115-21-9

   9t 13 5
 1558 25 4
27137-15-5

   n-H-4
  •24-11-1
 10M-4S-1
  639 58 7
  555-T7-1
 2001-95-8
 13U-42-1
  108-05-4
   81-81-2
  129-0*-*
28347-13-9
58270-08-9

 131*-»4-7
                                                                            topertablt    Threshold
                                                                            Quantity • »la«Mn( Quantity
    Toluene 2.e-OHtoey*n*tt
    Trene- 1 .*-Oietileraaytm
    TricMeroMttyl CMerid*
    T r i eft I orottn v 1 1 i I •"•
    TfteMermtt
    T f \ CM oroeft««y 1 1 u tr*
                         i )f < t
    Trttthoryiilmi
    T F ( Mthy I eft I orot i I •"•
    Tr^••t^rltil^ CMori
    Vinyl *C«t«t«
    tMrf«rin tfld
    lytylm 0«cMorid«
       0«v)l«ine>»«ntin*1Mtru«}-,tT-4)-
    Zinc
IOC
1



,h
,k
,h




.»


,h
,«
1.001
.1 »,OQ
19
.!«


100
too
MO 710,000
too
900
SOO
$00
)00
100
SOO
SOO
1.000
100 /10.000
SOO /10.000
\ SOO /10.000
1 100
1 1,000 /10.000
0 100 710,000
0 1,000
o soo no, oco
1 100 /10.000
1 100 710,000
1 100 710,000
                 100
                                                                                        SOO
•   Only th* (tttutery or final 10 it snow,   tor «er«  infor«iti««, M« 40C« T«ftU J02.4
e
d

9
f
                                                    net ttfault to 10,000
In th* technical
of potential
This e»ter
-------
li A.  T1w UUt tf IttroMly MurdM fcAstvxw md th«lr Threshold
   CAS •

  110
 5281-13-0
23505-41-1
10124-50-2
  151-50-8
  506-61-6
 2631-37-0
  106-96-7
   37-57-8
  107-12-0
  542-76-7
   70-69-9
  109-61-5
   75-56-9
   75-55
 2275-18-5
  129-00-0
  UO-76-1
  504-24-5
 1124-33-0
53558 25
U167-18-1
  107-44-8
 7783-00-8
 7791-23-3
  563-41
 3037-72
 7631-89
 7784-44
26628-22-8
  124-65-2
  •143-33-9
   62-74-8
  131-52-2
13410-01-0
10102-18-8
10102-20-2
  900-99*0

   60-41-3
 34*9-24-9
 3549-57-1
 7444-09-5
 77O-40-0
 7446-11-9
 7664-9V9
   77-81 •*
13494-00-9
 7783-00-4
  107-49-1
11071-Tf«t
   78-00-2
  597-44-8
   79-74-1
  909-14-8
10031-59-1
 4533 n 9
 7791-12-0
 2797-18-8
 7444-18-4
 2231-57-4
39196-18-4
  297-97-2
  100-98-5
   79-19-6
 5344-82-1
  4U-7I-8
  7550-45-0
  584-84-9
                !••••••••••••••••••••••••••••••••••••••••
                                                                                 ••port*l*
                                                                                 Ouwttty •
                                                                         »lVPln|
                                                                                                  tlty
                Arttnltt
                Cytnid*
             « 8Uw Cywiic
                   , Mti-
                                                                     Mtn  (pa*d»)      (POTM)
                                                     !••••••••••••••••••••••••••••••••• •*•••••••••••••••••
                                                        d
                                                        b
                                                        b
                  i, 4-Mine-
                  »*or
      »ropyl«m Oiidt
              ,  2-»«thyl-5-Vinyl-
              ,  4-Avine-
              ,  4-lltro-, 1-Ovid*
   1
                                                        I
                                                        d
                                                        t
                                                        e
      telCOBiM
      term
           (•us Acid
                    NydreeMorid*
      Slim, (4-A*0««tha*y>tthyl-
      Sodl
      tedt
      ftodi
      *od<
      •odl
AKdt (M(O»
CMtdylatt
Cytnidt (*4(C»)
             TtlUrU*
      Outran*. Ac*twrytr
-------
     i\t A.  T*o list *f litrwty  MSordM StMtencoo md thttr Thrtehold
                                                                                Qycntitlot
                                     OMticol Order)
US •
                                                                            •OtM
                                                                                  tooortobio
                                                                                  Ouontlty •
                                                                                   (I
   74-93-1
 3733 23 7
  67»-97-1
  9S4-44-9
   78-94-4
  902 39 4
   79-79-4
 1129-41-9
 7716-34-7
  319-18-4
   90-07-7
 4923-22-4
 2743-94-
  309-40-
13443-39-
   94-11-
   49-30
 7697-37-2
10102-43-9
   98-99 3
 1122-40-7
10102-44-0
   42-79-9
  991-42-4
         0
  430-40-4
23139-22-0
          «othyi
                       ton
   78-71-7
   »7-07-4
,0028-13-4
 1910-42-5
 2074-90-2
   94-38 2
  298-00-0
12002-03-8
19424-22-7
 2970-24-9
   79-21-0
  994-42-3
  108-99-2
 4418-44-0
   44-00-4
   U-34-4
  494-28-4
   99-88-1
   42-U-4
 2097-19-0
  103-I9-9
  294-02-2
 4104-14
  947-02
   79-44
  TJ2-11
 13171-21
 7803-31
 2703-11-1
 90712-49-9
 2449-30-7
 3254-43-9
 2U7-90-8
 7723-14-0
 10029-17-3
 10024-13-1
 1314-94-3
 7719-12-2
   97-47-4
   97-44-7
  124-17-8
          •ethyl
          •ethyl
Thfocvonote
Vtnyl Ketone
                                                                           o.h
          •eiectrttto
                    C
          •icetine tulfott
          iltrle  Acid
          •(trie  On do
          •or*oro)ide
          Or*enorfiodt««i Coeploa  (*W-82'
                       147)
          Oitrww,  3,3-IU(ChlorHtthyl)-
          Of an*
                                                                           o.h
                                                                           d
                                                                           c
d.h
o
o
c.e
o

o.h
9
0
0
c.d
c
d
o
o
o
                                                                            o
                                                                            *.
                                                                            o
                                                                            o
                                                                             4.h
                                                                             9
                                                                             0
                                                                             I
                                               0-<4-(Notfcylttil9)MMf«rl)l*tor 9
          fhoeifiemtMtlf Acid. Mttiyl-, |-(2-(m<1-i»oW»ytothYl)A«(no)ltftyl)9
          rneettiornTMnlr Acid. H9tftyl-,0-(4-iitrofMnyl) O-Mionyl l«tor     9
          *M00wtc Acid. OtMtnyi 4-<*othyith(o) Mwfiri leter              9
          meecnoniTMnlr irtn. 0,0-0«e»thyl-«-{2-«othylthto) Ithyl l»ter    c.o.l
                     Oatyehtorido
                                                             k.»
                                                             d
                                                             b.«
                                                             b,<
                     Trichloride
••••••••
  100
    i
    i
    i
    i
    i
    i
    i
   10
1,000
    1
    1
1.000
    1
    1
  100
    1
1.000
   10
1,000
     1
   10
     1
     1
     1
     1
     1
     1
     1
     1
     1
     1
     1
   100
   100
     1
     1
     1
   100
 1.000
     1
     1
     1

     1
     1
   100
     1
   100
     10

     1
     10
     1
     1
    100
     1
      1
      1

      1

  1,000

      1
  1.000
      1
                                                                                                1.
  Threshold
        Ouentitv
  (pouwi)
<••••••••••••••••
   900
   900
   100
 10.000
    10
   900 710.000
   900
   100 710,000
   900
   900 710,000
   900 710,000
    10 710.000
 10.000
   900
      1
   100
   100 710.000
  1,000
   100
 10.000
   900
    100
    000
    100  710,000
     10  710.000
    100  710.000
    100  710,000
    900
    900
    100
     10 710.000
     10 710.000
    100
    100 710.000
    900 710.000
    900
   .100 710.000
    900
    900
    900 710.000
    100 710.000
    100 710.000
    900 710.000
    900 710,000
    900
   1,000 710,000
    900 710.000
     100 710.000
     100 710.000
      10
     100 710.000
     100 710.000
      10
      10 710.000
     100
     900
     900
      100
          Mtyooetitvir
          Hereto* m
                    (1:1)
                        900
                        100
                        900
                        900
                         10
                       1,000
                        'in 710.000
                        100 710.000
                        900 /1C.300

-------
           Tt» LUt tf Utr-tly
                                                   Ml th.«r Thr«hoU
   CAS  •
••••••••i
22224 92
  122-14-
  115-90-
 4)01-50-
 7712-41-
  440-19'
  144-49
  359-04
   51-21
  944-22
   50-00
  107-14
23422 53
 2540-12
                                              Or«*r>
                             ChMiieii urn
i ••••••••••••••••«•••••••••••••••••••••••••••••••••••••••••••••••••

'4
5
2
2
4
7
•0
                                                                          Horn  (paftt)      (p^rdi)
                                                                      •••••••••••••••••••••••«•••••••••••••
            n
            »i
            »i
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 i
 :tt«<«
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            »ei»id«ny«i
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2D44-32-)
   110-00-9
 13450-90-3
   77-47-4
 4135-11-4
   302-01 2
   74-90-1
 7447-01-0
 74*4-39-3
 7TJ2-04-1
 7713-07-5
 77U-04-4
   1IJ-J1 9
 13443-40-4
   m-7i-t
    Ti-H-0
   102-34-3
   445-73-4
    S5-t1-4
  40tt-71-f
   10S-O-*
            Purtri
            C«ll >t* TrlcMorii
                                     •Olbutyl'
                        *eid
                     CMeriM  (6M Only)
             -F..^^- MMOrl*
             Ny«ret^ Mrwid* (Cone » 52X)
                     •«l«n
                                                                      •

                                                                      f
                                                                      ».4




11
101



1
1,000
1
1
1
1
1
1
100
1
1
1
1
10
1
100
1
1
100






10









1,00















1

1.0
1,0




10 710.000
MO
MO
100 710,000
MO
100 710.000
10 710,000
10
500 710,000
500
MO
1,000
500 710,000
100
100 710.000
500
100 /10.000
500
500 /10.000
100
500
1,000
100
500
100
1,000
10
500
500 710,000
100
100 710,000
1,000
MO 710.000
100 710,000
100
100
1.000
MO
MO .
1,000
MO 710,000
.10
1.000 710.000
100
MO 710.000
100
10
MB
MO 710,000
MO 710,000
MO 710,000
1,000
MO
MO
MO
100
MO 710,000
1,«0
MO 710.000
10 MO 710,000
BO MO 710,000
1 MO /10.000
1 MO
00 1.000
00 MO
, 100
10 MO
1 MO
1 MO

-------
        A.
                     If
                                                                                                          »•* A I
   CAS •
• ••••••••••••••••••Ml
21923-23-9
10025-H-7
62207 76-5
                                                                              MetM
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1
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10
1
1.000
1
100
100
1.000
1
1
1
1
1
1
1
1
1
1
1
1
10
1
1
1
1
1
1
1
1
10
1
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1
1
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10
1,400
1
1
1
100
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100
1
1
1
1
1.000
1
1
1
1
^
10
1
1
1
1
• 5.000
1
1
500
1 /10.000
100 /10.000
10 /10.000
10 /10.000
100 /10.000
500 /10.000
1.000 /10.000
100 /10.000
1.000
1,000
500 /10.000
1.000 /10.000
1.000
100
100 /10.000
10.000
500 /10.000
500
500
100 /10.000
100
10,000
1.000
1.000
100
500
500
100 /10.000
100 /10.000
1.000
10 /10.000
MO
MO no, ooc
MO
MO
100
MO
1.000
10 /10.000
MO /10.000
10 /10.000
100 /10.000
. MO /10.000
MO
10 /10.000
100
MO
MO /10.000
100 /10.0CO
1 /10.000
10 /10.000
MO /10.000
MO /10.000
1.000
100 /10.000
1,000 /10.000
MO /10.000
MO
1.000
1.000
1.000
300
10
1,000
10,000
500
10,000

-------
      U ».   TIM lift tf IxtrMly Nitiroeui SUbtttncn end their Thrwhold
                                                                                Owntttlw
                                                                                                              4-1
                                               Ordto
  CAS f
   75-84
 1752-30
  107-02
   70-04
  107-1)
  814-48
  111-49
  114-04
  309-00
  107-18
  107-11
20859-73
   54-42
   78-5)
 3734-97
 '444-4'
  300-42
   42-53
   88-05
 T713-70
 1397-94
   84-88
 1303 28
 1)27-5)
 77*4-34
 7714-42
 2442-71
   84-50
 .  98-87
   98-14
  100-U
   98-09
 3415-21
   98-07
  100-44
  140-79
15271-41
 7437-07
  353-42
28772-94
1304-19<
2223-93
    •44
  54 25
  51-13
 1943-e*

  7M-19*
   $7-T4
  470-90
 7712-fD
24934-91
  999-81
   79-11
  107-07
  427-11
   47-44
  942-18
  107-30
 3491-35
 1982-47
                                      C»«»-4-Httro-
                  eertonic Acid
            8eni<*itttole. 4.5-Oleniere-2-(Trlflyer*»thyl>.
            •eniotricftierloe
            Oensvt CMoride
            ••nsyl Cvtnid*
            8levct*a.2.1)H«Ptir«-2-C4Ptan4trlte,
                                      With Mthyl
                                                         (1:1)
                                  . e-«C2,4'0(«ttiyi-1, 3-Olttil«l«n>2-Tl)
                         Mthyl  lth«r
                                                                                                          tlty
10
1
1
9.000
100
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1
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1
1
1
100
9000
5000
50*



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tea




1,000
1.000 710,000
900
1.000 710,000
10.000
100
1.000
100 710.000
900 710,000
1.000
900
900
900 710.000
900
100 710.000
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1.000
1.000
900
500
1,000 710.000
500 710,000
100 710,000
100 710,000
900
100
100 710.900
10 710. OOC
900
900
900 710.000
\0 710,000
900 710.000
100
900
900
MO 710,000
10 710.000
900 710.000
MO
MO
1.000
tOO 710.000
MO
100 710.000
1.000 710,000
MO 710,000
MO 710.000
100 710.000
MO 710.000
tOO 710.000
                                                                                             to
                                                                                            too
                                                                                            t
                                                                                         5,e
                                                                                                    U 710,
                                                                                                tO.i
                                                                                                    too
                                                                                                    MO
                                                                                                    tOO 710,000
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                                                                                                    too
                                                                                                    100
                                                                                                     100 710.000
                                                                                                    900 /tO.000

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                                                OSWZR DIR.  19841.0

APPENDIX A.  Summary of Requirements and Enforcement Authorities
    •

A. section*  302 and 303.  Section 302(c) requires the owner or
operator of  a  facility at which an extremely hazardous substance
(EHS) is 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 11302 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 each 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
reportable 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  (NEC).

     CTECTA  tioa.  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, 4  release of one pound or more triggers  the  notice
requirement.

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                                                OSWER DIR. 19841.0

      The  CERCLA  1109  and Title  III  1325 enforcement provision*
 for emergency  notification ar«  vary similar.  Both astabliah
 administrative penalties and  tha authority to bring actions
 judicially  to  assess  penalties  for  non-notification.  Both CZRCLA
 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 1325 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 1103 or  Title III |304 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  (KSDS) for a hazardous
 chemical  under the  Occupational Safety and Health Administration
 (OSHA) Hazard  Communication Standard and has a certain amount  of
 the  chemicals  onsita,  to submit the KSDS  (or a list of the KSDSs)
 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 USDS 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 •took  company,  corporation,  (including  a
government corporation),  partnership,  association, State,
municipality, commission,  political  subdivision of a  state,  or
interstate body."  Section 326  authorizes any pjEifin  to bring a
civil action against owners and operators for their failure  to
submit reports specified  under  |326(a)(l).

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                                                OSWER DIR. #9841.0

     Under  1312(a), the owner or operator of any facility that is
 required to prepare or have available a MSOS for hazardous
 chemicals above a certain threshold level must also submit an
 emergency inventory form 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 1313 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 th« U.S. district court.


     p«nalti««:  Any person who fails to furnish information
required under |322(a)(2) or requested by the Administrator under
1322(d) shall be 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 fine of not
more than $20,000 or to imprisonment not to exceed one year, or
both.  Any person who violates I323(b) shall be subject to a
civil penalty not to exceed $10,000 per violation per day.

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                                                        OSWL.   9334.2
             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                         WASHINGTON O.C  20460
                               OCT   9 ;9S5
                                                          o»»>ct o»
                                                 10.'0 «V»JT| AND IM|«OINC» MI'ONSC
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 memorandum 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, 5, and 6.   This will be reflected  in your  SCAP  targets.

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                                                       OSWER * 9834.2
                              -2-
In orier to acccrpli:w.  this,  it will be necessary to start ?5?
searches concurrently witn developing sites for listing.  At
the  latest, PRP searches should be  initiated when candidate
sites  are  sent to KS for N?L  quality control "review.  YOVJ will
need to plan accordingly 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  number to be done in each Region.

     Because of the heavy work undertaken by TechLaw in both
the TIS I  ar.d TES II contracts, the prine 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 beginnina a Fund financed  RI/FS  should it become  necessary.

     Notice letters are generally combined with information
requests under RCRA 53007 and CERCLA $104(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 • PRP is willing and
financially capable of  undertaking  • 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 $10*7.  Where doubt  exists as
to whether available information supports notice letter
issuance,  information recuests should be sent prior  to notice
letters.

-------
                               _._                      OSWER # 9834.2
      In the  past,  rot ire letters were se-.t t: P3?s whs -ay cr
 nay  not have been  liarle under CERC1A.   This r.ay oe avoided Sy
 issuing notice letters  to parties where sufficient evidence is
 availaole to make  a preliminary deter-.ination of liability
 under CERCLA $137.   Frr example, 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 searches.  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,  each  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 this  ir.for-atior. to PRPs will helrj PRPs organize
 and  negotiate among themselves.

      As stated i.n  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;

      0  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
        available

      There are,  however,  certain limitations with regard to the
•information  outlined above.  For example, summary conclusions
 about the volume 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.  Mo:?over, 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  ani  others  should  always contain appropriate disclaimers.

-------
                              -4-

                                                      OSWER *  9834.2

     The settlement policy states that release of information
to PRrs shc-.ld generally be conditioned on a reciprocal release
                                                       does r.ct

recprocal
release
policy
c  infcrration by ???<;.  Tr.e
apply to the release to r?,?s of the nar.es of other notice letter
recipients on a site, or to waste-in lists and volunetric rank-
ings.  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 volunetric rankings should be developed as
soon as possible after completion of PRP searches.  This infor-
mation should be 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.

     T.w,e nanes cf notice letter recipients are available to the
public in response to requests under the Freedom of Informa-
tion net (FOIA) (See "Releasing Identities of Potentially
Responsible Parties in Response to FOIA Requests," January 26,
1984 j.  The nanes nay also be released at the Agency's initia-
tive without a FOIA request.  Now, to the extent the information
exists, waste-in lists and volumetric rankings will also be
available to the public under FOIA and at the Agency's 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 are made by PRPs
or the general public.

     For further information on topics discussed  in this meno,
please contact Linda Southerland at FTS 382-2035.
Addressees:

Director, Office of Emergency and Remedial  Response
Region II

Director r Air and Wast* Management  Division
Regions  III, IV, VI, VII, VIII

Director, Waste Management  Division
Regions  I, V

Director, Toxics and Waste  Division
Region XX
 •
Director, Air and Waste Division
Region X

Regional Counsels, Regions  I-X

-------
                             ATTACHMENT
 Documents for Removal Actions*
               data**
 - Removal preliminary assessment
 - Site investigation report
 - Any otfor factual data relating to reasons  why we  selected a
   particular removal action at the site
 - 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 site specific policy and legal  interpretations
   (e.g., off-site disposal availability,  compliance  with  other
   environmental statutes, special coordination needs,  e.g., dioxln,
   provisions for State assumption of post-removal site control)
 - Information from telephone logs relied  on in selecting  response
 - New 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, Natural
   Resources Trustees, notices of availability of information
 - Documentation of meetings during which  the  public  and PtPs present
   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  celling increase Action
   Memoranda, and Action Memoranda on technical changesi 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 chooeies  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.

-------
                              -a-
-. nnriiiMnrifion of eppeituiiily  for  consultation  with  the  State
  on the scope 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, RZ/PSs should be  treated as  a  phase
of a remedial action,  and not a  removal)

-------
                              •3-
DoeuiiienLS" for Rffthedial Actions*

- Preliminary assessment reoort
- Site  investigation report
- Any relevant removal documents  (if removal action completed or
  ongoing at site)
- OA/QC'd raw data**
- Data  summary sheets (usually part of the PS)
- Chain of custody forms**
- OAPP
• Initial work plan and any amendments thereto
- RI/PS (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 oolicy and legal interpretations
  e.g., off-site disposal availability
- 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 consent)
- 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 during negotiations
-' Documents relating to State involvement (e.g., ARAR determinations,
  opportunity to comment on screening of alternatives, PS, 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 unices they contain  information used to base the decision
which the final document does not contain, or the decision-
maker chooses to bate the decision on a draft document.

**  OA/OC'd raw data (e.g., results of QC runs, chroma too; rams,
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.

-------
     inrlurting n^**^****-- e£ basis- anff DUrpose 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

-------
         l:NITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON. D.C. 20440
                           NOV 21  1965
                                                     ornci or tv
                                                       AND COMPLIANCI
                                                        MO*rroifNG
MEMORANDUM

SUBJECT:  Procedural Guidance on Treatment of Insurers Under
          CERCLA
                           \ju« 'S A>  r***<
FROM:     Courtney M. Price  	
          Assistant Administrator for Enforcement
            and Compliance Monitoring

TO:       Regional Administrators. I-X             '  .
          Regional Counsels, I-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 the 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 che appropriate procedures to follow in issuing
notice letters, developing referrals, and tracking CERCLA
enforcement cases that may include insurers as third party
defendants.  A separate reference notebook and memorandum
of law are being prepared by OECM and the Department of Justice
to supplement this guidance.  The memorandum of law will summarize
che recenc judicial decisions which have interpreted che
applicability and coverage of insurance policies in hazardous
waste cases*
I/   Moat insurance policies are effective on an annual basis
~    and parties commonly changed carriers during che disposal
period, or had several policies in effect at che same time. .
Therefore, large CERCLA lawsuics 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 co  potentially responsible
 parties.   These notice letters  generally include requests for
 information under  RCRA S3007(a)(3) and CERCLA S104(e)(4).  All
 information requests  should  include a request for copies of
 insurance policies in force  during the PRP's association with
 the  site.  The requests  should  solicit information regarding
 insurance policies that  are  currently in effect as well as
 those effective during the period of activity in question. 2/

      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 same 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,^to
 assert litigation  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 cues to the Department of
 Justice should include a brief  summary of the insurance coverage
 of potential defendants.  This  information is particularly
 important  for  action* involving bankrupt or potentially insolvent
 parties.
21   Set Memorandum "Procedures for Issuing Hotice Letters"
~    Trom Gene A. Luctro, Director EPA Office of Waste Programs
Enforcement,  to Directors, Waste Management Divisions Regions I-
X; Directors, Environmental Services Divisions Regions I-X;
Regional Counsels, Regions I-X.  (October 12. 1984).  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)  the 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 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,  including any pollution
 exclusion provisions.   The standard coverage section usually
 includes the insurer's  promise  to pay on behalf of the insured
 and the  insurer's  duty  to settle  or defend claims against the
 insured  alleging bodily injury  or property damage covered
 under  the policy.  3J

     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 the  insurance  carrier to  defend against any suit
 seeking  damages or to pay on behalf of  the insured such damages
 which are covered-  under the  terms of the policy.

     Thus,  ic is important to examine che scope of coverage of
 the insurance policy  before  referring an action to the Department
 of  Justice  which may  have insurance aspects.  Claims for injunctive
 or  equitable relief are usually not included within the coverage
 of.the insurance policy,  and the  referral for such relief need
 not include the insurer as a potential  defendant.  It may
 nevertheless be prudent to notify involved carriers of such
 a claim.

     Where  any CERCLA 1107 damage claia it included as a basis
 for relief,  che insurer may  be  identified as a potential
 defendant-.   Claims for  punitive damages may Also be covered
 under the policy and  the  Regions  should include insurers as
*3/    The  insurance carrier has a duty to defend the insured
~"     even, if  che claims are groundless, false or fraudulent

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                              - 4 -


 defendants where punitive damages  are sought.  */  The  referral
 package prepared by the Region should also  include a  discussion
 of the types  of policies which were  issued  to  che responsible
 party.

 TYPES OF INSURANCE POLICIES

      There are two types of  insurance policies.   The  first is
 the traditional casualty insurance contract known as  the
 Conmercial General Liability Policy  (CCL).  The standard CCL
 policy covers  accidental or  sudden bodily injury  and  property
 damage.  The  second cype of  policy is the "claims.made" pollution
 liability policy or Environmental  Impairment Liability (EIL)
 policy.  The  EIL policy covers che 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.

 CGL Policies

      There are four separate areas of coverage available under
 che' CGL policies  which may be  applicable co CERCLA actions.
 The first is che  premises  and  operations hazard policy.  This
 policy  provides coverage for liabilities resulting from a
 condicion on che  insured1t premises or from ehe insured*s
 operations  in  progress  whether on  or  away from che insured's
 premises.   This  cype of policy would  cover che owner or operator
 of  a facility, whether  che hazardous  vasce facility was accive
 or  inactive, as long as che  covered liability resulted in
 a condicion which originated during coverage.

     The  second area of coverage under che CGL poliey is  che
 products  and completed  operations policy.  This policy provides
 coverage  for liabilities arising afcer produces have lefc .ehe
 physical  possession of  che insured and afcer che work performed
 has been  completed  or abandoned.  This type of poliey may
 cover che generator of  hazardous substances if che wasce  can
 be  characterized  as a  final  produce.
4/   Mote policies are silenc regarding coverage for punitive
~~    damages.  Some states have allowed claims by che insured
for punitive damages paid co the federal government.

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              OUTLXEE  OF  INSURANCE  ISSUES
                   TABLE OF CONTENTS
 INTRODUCTION                                           Page

 I.  Types of Policies Issued                             3 .

     General Introduction   •                              3

     A:  The Comprehensive General Liability (CGL)         5
         Policy

     B.  Development of ehe Pollution Exclusion           7

     C.  The Environaencal Impairment Liability           9
         (EIL)  Policy (appearing in ehe late
         1970's)

     D.  The Insurance Services Office                    9
         (ISO)  Policy


II.  Judicial Construction of CCL and
     ^GL/Pollution Exclusion Policies

     A.  Construction of CGL Policies Generally          10

         1.  "Accidents" under pre-1966 policies.        11

         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 anon*            17
             insurers and insureds.

         4.  The scope of "property dasage"              17
             coverage.  (Discussion of the extent
             to which remedial activity is covered.)

         9.  Statute of limitation questions.            18

         6.  Defenses available to the insurer.          19

     B.  Construction of OCL/Pollution Exclusion         20
         Policies                 '  .

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                          - li -


 INTRODUCTION (continued)                                 plge


III.   Construction of EIL and ISO Policies                 24

      A.   The EIL Policy                                   24

      B.   The ISO Policy     '                              25

 IV.   Statutory Insurance Requirement!                     25

      A.   RCRA Financial Responsibility                    25
          Requirements

      B.   CERCLA Financial Responsibility                  29
          Requirements

  V.   Potential Claims Against Insurers                    31

      A.   Claias Under Federal Lav                         31

          1.  RCRA enforcement claims                      31.

          2.  CERCLA enforcement claims                    32

      B.,  Assigned or Subrogated 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 Between the  .    49
          Insurer and the United States

          1.  Intervention by the Insurer in an action     49
              by the United States against the insured

          2.  Declaratory Judgment suits betveen the       50
              insurer and the insured — including
              a discussion of vhether the United Stater
              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* Che passage of the Comprehensive Environmental    ~  '
                                                 I/
Response, Compensation, and Liability Ace (CERCLA7  in 1980,
che Environmental Protection Agency (EPA) and the Department
of Justice (DOJ) have initiated more than 100 enforcement
actions againsc che owners and operators of hazardous waste
facilicies, generaeors who arranged for che disposal of
hazardous subscances, and cransporters who handled hazardous
substances.  Many of these cases, some of which were built
upon prior claims under the Resource Conservation and Recovery
           2/
Ace (RCRA),~ involve claims 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 chac ehe number of collateral
actions involving ehe insurance carriers of RCRA and CERCLA
defendancs will concinue co grow, parcicularly in cases.
                           3/
involving multiple parties.
     The first purpose of Chis handbook is co provide a basic
understanding of insurance law and pocencial claims for relief
against insurers which will allow EPA and DOJ enforcement
I/  42 U.S.C. II 9601-9656.
2/  42 U.S.C. II 6901, ±t 1«£, «ose commonly 42 U.S.C. I 6973
3/  Host insurance policies are effective on an annual
~   basis, and generaeors 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  these  claims, as well as respond co
defences raised by insurance carriers.
     The second purpose of this handbook is to offer an
understanding of the  insurance requircaents of RCRA and
CERCLA.  Under the financial responsibility regulations
promulgated pursuant  to Section 3004(6) of RCRA, each
owner or operator of  a hazardous watte management facility
oust maintain liability insurance against both sudden
                           y
and accidental occurrences.   An owner or operator of a
hazardous waste facility may also satisfy post-closure
care financial assurance requirements by obtaining post-
closure insurance."   The handbook will review these regu-
latory requirements and their enforcement through compliance
actions, and will also briefly address the 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.   Some  of the best articles  and notes on
insurance issues are  included as appendices and, in the
case of tome ittuet,  are referenced in lieu of primary
discussion.  In addition,  an alphabetical compendium of
selected catet appears at  the back of the handbook.
4/  40 C.F.R. 264.147.
5/  40 C.F.R. 264.143(e)

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                           - 3  -

 I.   Types  of Policies  Issued
     General  Introduce ion
      The standard  liability insurance  policy is  broken  down
 inco three sections:   (1)  declarations;  (2)  the  statement
 of  general liability;  and  (3)  Che  standard  coverage sections,
 The declarations section contains  general atateaents of the
 incenc  of  the parties  and  the  naaes of  the  insurer and
 the insured.   The  stateoent of general  liability contains
 Che 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,
                                              6/
 including  any pollution exclusion  provisions.'   The standard
 coverage section usually includes  che  insurer's  promise
 to  pay  on  behalf of che Insured and che  insurer's duty
 to  seecle  or  defend claims againsc che  insured alleging
                                                          If
 bodily  injury or property  damage covered under che policy.
                                                          v
.,     The interpretation of che insurance policy  should begin
 vich a  review of che standard  coverage  seccion.  Most
 insurance  policies only obligace che insurance carrier co
£/  See pp. 20-24 for  a  detailed discussion of  che pollution
~   exclusion.
II  The insurance carrier  has  a ducy  co defend  che insured
    even  if che  claims are groundless, false or fraudulent
See Jackson Tovnship v.  Hartford Ace. & Idem. Co.. 186
H77. Super. 156, 160 (1982)  unciuoeo in  the compendium).

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                           . 4  -

dtftnd against  any  suit  seeking  "damages"  or  co  pay  on behalf
of  Che insured  "damage*"  covered under  che terms  of  the
policy.  Thus,  ic is  important eo examine  Che  scope  of
coverage of  che insurance  policy in reviewing  any potential
referral or  suic againsc a carrier.              ,
     Claims  for injunccive or ocher equitable  relief usually
are not included expressly within che coverage of the insurance
policy.  Nonecheless, several courts have  suscained claims
co recover coses of abatement or response  incurred by the
insured.  See discussion below ac pp. 17-18.   CERCLA Section
107 damages  and response cose claims generally will be
covered, or  a cognizable claim may be made.  Claims  for
penalties under CERCLA Seccion 106(b) or punitive damages
under CERCLA Seccion  107(c)(3) may also be  covered under
che policy,  although  some  insurance agreements specifically
                                      2"
exclude coverage for  punitive damages.   The referral
package prepared by EPA should include, if  information is
available, a discussion of che policies which were issued  .
co chc responsible parcy and copies of ehe  policies.
     There are  two basic types of insurance policy.  The
firsc is che eradicional casualcy insurance concracc known
aa che Comprehensive  General Liabilicy Policy  (CCL).  The
scandard CCL policy covers aceideneal or sudden bodily injury
and propercy damage from an "accidenc," or  "occurrence," during
8/  Hose policies are  silenc regarding coverage for punitive
*   damages.  Some scaces have allowed claims by chc insured
for punitive damages paid to the  federal government.

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                           -  5 -

the policy period,  regardless of when  che claim  is actually
eade.  Since about  1970, CCL policies  generally  have attempted
to exclude coverage of any hazardous substance injuries
that were not "sudden and  accidental"  in nature  and contain
a "pollution exclusion" to chat 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 Che  "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
term of che policy.  The EIL policy is analogous to health
or life insurance,  where cue claimant  is not required to
make a showing of accidental injury.   One class of claims-
made pollution'liability policies is specifically designed
to enable owners and operators of hazardous wasce treatment
storage and disposal facilicies co qomply with RCRA's finan-
cial responsibility requiremencs.  For brief descriptions
of che various types of policies which have been issued
                                        2/
and key typical clauses, tee 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
9/  T. Smich, Jr., "Environmental Damage Insurance -- A
    Primer," reported at VII Chem. & Rad. Waste Lit.
    Rptr. 435*(1983).

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                           . 6  -

coverage.  This  coverage  is for  liabilities  resulting  froa
a condition  on the  insured's premises  or  froa  the  insured's
operations in progress, whether  on or  away froa the insured's
preaises.  This  type  of policy would cover the owner or
                       !£/
operator of  a facility,   whether the  hazardous waste  facility
was active or inactive, as  long  as the disposal, storage or
treataent was still in progress.
     The second  and third areas  of CGI coverage are product
hazard coverage  and coopleted  operations  hazard coverage.
These two, originally ccabined,  are now separate and
distinct.  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 produce.   In addition, the event of
release probably must take  place after relinquishaent of
control by the generator, and  away froa the generator's
preaises.  Completed  operations  coverage may afford a
soaewhat broader basis for  recovery, but  is nontheless
subject co limitations which would recuire appropriate
facts and careful pleading.  See Appendix C, pp. 562-563
for * suoaary discussion of key  faces  of  both product hazard
and completed operations coverage.
     The standard coverage  section of  a general liability
policy sets  out  the scope of the insurance agreeaent and
the exclusions applicable co claims oade  by the insured.
H)/  CZRCLA Section  107(a), 42 U.S.C. 9607(a).

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                            •  7  -
The exclusions to the scope of  Che  insurance coverage muse
                                I!/
be clearly and precisely drafted.   The exclusion which

insurers invoke against • claims  for daaages created by

hazardous wastes is the pollution exclusion.  The standard

pollution exclusion reads:

     "This insurance does not apply ... to bodily
     injury or property damage arising out of the
     discharge, dispersal, release or escape of
     smoke, vapors, toot, fumes, acids, alkalis,
     toxic chemicals, liquids or gases, waste
     materials, or other 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 waste cases.

B.  Development of the Pollution Exclusion

     The first standard.fora for general liability insurance

policies was developed in 19&0.  The model policy provision

was drafted to include liability for all claims made by

Che insured that were "caused by accident."  This provision

was widely interpreted by the courts to include coverage

for common lav nuisance claims for environmental damage if
11 /  Because the insurer selects the language for the policy.
    the exclusions are generally interpreted in favor of the
insured.  An exclusion must be drafted with clear and exact
language to be given effect by the courts.  See e.g. Allstate
Ins. Co. v.--Klock Oil Co.. 426 N.Y.S. Zd 603TS.YTApp. 1980)
(induced in tne Compendium).

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                            - 8 -

 che pollueanes were suddenly ano^accidencally discharged":"7
      In 1966, Che Insurance Racing Board developed a new
 model concracc which covered claiaa "caused by occurrence"
 racher ch«n claiaa "cauaed by accidenc."  The Board defined
 occurrence broadly co include "an accidenc," including
 concinuoua or repcaeed exposure co condicions,  which results,
 during che policy period,  "in bodily injury or  propercy
 daaage neicher expected or incended from che scandpoinc  of
 che insured."  The new language required a finding chat  che
 daaages were  noc  foreseeable or incended.   However,  che
 courts concinued  co hold insurance companies liable  for
 environaencal daaages even where che pollueion  was foreseeable
 if  chc daaages were accidencal."""  In 1973,  comprehensive
general liability policies were revised  co include che
           *
pollueion  exclusion clause.  See p.  7 for  che cexc of
che exclusion.  The courts which have interpreted  che
pollueion  exclusion clause have agreed on  chree relevant
poincs:  (1)  che  insurer has  che burden  of proving noncovtrage;
(2) ehe exclusion applies  eo  the ineencional polluter; and
                        • —
(3) the exclusion does  noc apply co  entitle* which neicher
expecc nor intend their conduce eo result  in bodily  injury
12/ See Appendix C, Hourihan, "Insurance Coverage for Environ*
    mental Daaage Claias" IS Forua 551, 552 (1980).
13/  Grand River Liae Co. v. Ohio Casualty Ins. Co.. 32 Ohio
   •App. Zd. 178, 289 N.E. 2d ^60 (1972).

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                            - 9  -

                                                 ii/
or property damage.  See discussion at pp. 20-24.
C.  The Envlronaental Impairment Liability (EIL) Policy
    Regulations promulgated pursuant to. RCRA (tee notes
4 and S) 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 "claias-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-site cleanup costs, including those incurred to avert
a loss, are typically covered;  on-site cleanup costs are
not.  Also 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-existing conditions at any  site owned or leased by
the insured, and coats of maintenance or routine cleanup.
0-.  Insurance Services Office (ISO) Policy
     Another type of "claims-made" policy is the ISO
pollution liability policy — also developed in response
                                 i •                        •
to RCRA regulatory insurance requirements.  ISO policies
!£/  For a detailed history of  the development of the pollution
     exclusion, see Appendix D, S. Hurvicz & D. Kohanc, "The
Love Canal - Insurance Coverage for Environmental Accidents,"
Insurance Counsel J., July 1983, p. 378.

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                           - 10 -

 provide  indemnification  and defence  coverage for pollution-
 caused bodily  injury  and property  damage  and reimbursement
 coverage for pollution cleanups imposed by  lav or voluntarily
 aasuaed  with the  concent of 'the insured.  Insurance coverage
 under 'an ISO policy is also extended  to sites  used by the
 insured  for storage or treatment but  which  are operated
 by others.  Costs of  defense are provided apart  from
 the liaits of  liability.   The  policy  excludes  from coverage
 damages  which  are expected or  intended by the  insured,
 costs of cleanup  for  sites owned,  operated  or  used by
 the insured, liability froa abandoned sites, or  liability
 arising  froa che  intentional violation of statutes or
 regulations, but does cover both gradual and sudden and
accidental daaages and injuries.
     Despite an increase  in "claims-made" environmental
 insurance policies, coverage for.pollution-related
damages  under  an EIL or  ISO policy is still rare.  It is
much more likely  that a  potential  EPA hazardous  waste
enforcement aceion will  involve a general liability
policy (CCL).
III.  Judicial Construction ofCCL and CCL/Pollution
      Exclusion Policies' •
      A.  Construction of CCL  Policies Generally
     Decisions generally construing CCL policies have focused
on several issues:  whether a  covered "accident" or "occurrence"
has taken place, whether  damage to Che affected  "property"

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it eovcrtd, what statute of limitations should be applied
and in what manner, what defenses are available to insurers,
and how should liability be apportioned aaong insurers and
insured*.  A discussion of these issues will be followed by
a separate 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 decisions considering
when events giving rise to an injury were covered focused on
whether or not the event vas "... [a]n event that takes •
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 Compendium).
quoting from Uebster'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 cases 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. "Ufaen Does the
Occurrence Exist Under the General Commercial Liability

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                          • 12 -

Policy?," VII Chen. & Rad. Uaste Lit. Rpcr. 457 (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
                                H/
of apportionment among carriers.
     CGL policies generally define an occurrence as "an
accident, including continuous or repeated exposure to
conditions, which results in bodily injury or property
damage neither expected nor intended from the standpoint
IS/  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 then-
selves.  See Appendix G, Hourihan, "Insurance Coverage for
Environmental Damage Claims," IS Forum 551, 559 (1981).

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                           - 13 •

 of cht insured."  The theories upon which courts have
 determined whether and when a covered "occurrrence" has
 happened are several, having evolved to sect generic fact
-patterns.  A discussion of those theories follows.   See
 generally Appendix F and Appendix 0, Charles Maher,
 "Asbestos Extravaganza," 5 Calif. Lawyer 60, 62-63  (June
 1985).
      In stuple property damage cases not involving  slow
 accumulation of damage, the general rule is that there
 is no "occurrence" until the actual ham for which  relief
 is .sought 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  rule is generally known as the manifestation theory.
      On the other hand, in cases where daaages are  sought
 for sickness or disease resulting from long term exposure
 to toxic substances, courts have found that actual  injury
 occurred during the policy period in which exposure alone
 occurred.  Insurance Company of Horth America v. Forty-
 Eight'Insulations.. Inc.. 451 F.Supp. 1230 (E.D. Mich. 1978).
 affd 633 F.Zd 1212 (6th Cir. 1980).  This rule is  generally
'called the exposure theory. .In addition, in contrast to
 ordinary property damage cases where the manifestation
 theory applies, in property damage cases where daaages
 slowly accumulate, courts have generally applied the
 exposure theory in determining insurance coverage.   So
 long as there is any tangible damage (even if minute)

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                           -  14  -

resulting from exposure,  che courcs have allowed  coverage
froo chat time, although  che damage nay noc manifest  icself
uncil ouch lacer.  See, e.g.. Champion International  Core.
v. Continental Casualty Co.. 546 F.2d 502 (2d clr. 1976),
cert; denied, 434 U.S. 819 (1977); Porter v. Aaeriean Optical
Corp.. 641 F. 2d 1128 (5th Cir. 1981); Union Carbide Corp. v.
Travelers Indeanity Co..  399 F.Supp. 12 (U.D._Pa. 1975); and
Cruol Construction Co. v. Insurance Co. of North Aaerlca.
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 CCRCLA hazardous waste liti-
gation, since tangible injury and damage to the envtronoenc
can occur soon after exposure co hazardous wastes, although
danage aay not aanifest itself  until ouch later.  At  least one
court has held that where a landfill leaches toxic waste into
ground water over a nuaber of years and ham results, the
                                  16/
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
tiae when the environaent was first exposed to the hazardous
wast*.  Presuaably, under che exposure theory, all policies
fro* che tiae ef disposal forward would be implicated^ so
long as soae tangible damage eo che environaent could
be shown to have occurred at the tiae of exposure and to  .
have continued thereafter.
1^67  Jackson. Tovnshio v.. Aaeriean Hones Assurance Co.. Docket
     L-29236-80 (N.J. Supar.)  (unraoorteo). citeo in Jacicson
Tovnahip v. Hartford Ace. & Indeanity Co.. 186 N.J. Super. 156.
165-166 (1982) (included in the coapcndiua).

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                          - 15 -

     Notably, application of cht exposure  theory  co trigger
insurance coverage does not necessarily rule out  application
of the manifestation theory eo trigger subsequent coverage.
In some cases, in order that'the purpose of the policy not
be undercut and in order eo protect the reasonable expectations
of the insured, the insurance coverage during the period of
manifestation of the injury or daaage is also triggered.
See Kcene Corporation v. Insurance Company of Rorth America.
667 F.2d 1034, 1045 (D.C. Cir. 1981).  This approach is
commonly taown as the "cripple-trigger" or "continuous injury".
cheory.
     The application of the exposure, manifestation, and
triple-trigger theories has frequently risen in the analogous
concexc of the asbestos-related disease cases.  In those
cases dealing with a slowly progressive disease in which
tissue daaage occurs shortly after initial inhalation
(exposure), the courcs have generally favored che more
generous exposure and triple-trigger theories.  See. Porter
v.- American Opcieal Corp.. supra; Insurance Co. of North
Aaerica v. Forty-Eight Insulations. Inc..  supra; and Keene
Corp. v. Insurance Company of North America. supra.
(applying both che exposure and manifestation theories
co crigger atxiaum coverage under che policies.).  One district
court, however, has adopced solely che manifescacion theory
in an asbescos relaced disease case.  See Eaele-Pieher
Industries v. .Liberty Mutual Insurance Co.. 523 F.Supp.
110 (D. Mass. 1981).

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                           .  16 -

     Thertfore, although only one unreporced scact trial
court decision has addressed  chis issue in che hazardous
waste context, there is strong analogous authority to
support application of the more expansive exposure theory
to trigger insurance coverage in waste cases.  Moreover,
there is some 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 problem 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
                              !!/
applying one of several tests.    For a discussion of each
of these toes, see generally Appendix G. pp. 559 et. seq.
 /  Generally, chase tests include:  the "effect test"
~   (looking eo the vantage of the injured party and  .
commonly findlnc more than one "occurrence"); the
"causation test1* (widely accepted view baaed on examination
of cause); the "tine and apace test" (focusing on proximity
of cauaative factors in time and space), the "operative
hazard teat" (exaaining 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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                            -  18  -

 and Riehl v. Travelers  Ins. Co.. Civ.  No.  83-0085  (W.D.
 Pa. Aug. 7, 1984), VIII Chem. &  Rad. Waste Lie.  Rpcr. «39
 (included in che Compendium)  (coverage of  CERCLA potentially
 reponsible party's abatement'costs).   For  a more detailed
 discussion of chis issue, see Appendix I,  M. Rodburg and
 R. Chesler of Lowenstein. Sandier, Brochin. Kohl. Fisher.
 Boylan & Meaner, "Beyond che Pollution Exclusion: [etc.],
 (1984), pp. 364-369; and Appendix J, K. Rosenbaum,
 "Insurance, Hazardous Waste, and che Courts:  Unforeseen
 Injuries, Unforeseen Law."  13 ELR 10204, 10205-10207
 (July 1983).
     5.  Statute of limitation questions.
     In scate common lav suits for injuries or damage, che
 court's choice among exposure, manifestation, and triple-'
 trigger cheories of occurrence may have a  substantial
relationship eo che running of the applicable statute of
 limitations..  Fortunately,  chis choice of  cheories to
 determine when injury or" damage "occurs** within the aeaning
 of a comprehensive general  liability policy would not
 determine when che seacuce  of limicacions  should commence
                     18/
 running under CERCLA.    Ochervise. che dace chac injury
13y  Under Section 112(d) of CERCLA. 42 U.S.C. 9612(d)
                         i •
        No claim may be .presented, nor may an
        aceion be commenced for damages under
        chis cicle, unless chae claim is
        prcsenced or aceion commenced within
        chree years from che dace of discovery
        of che loss or che dace or enactment
        of chis Ace, whichever is later . . .

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                            -  17 -

3.  Apportionment of  liability among iniurers and  insureds.
     Determinations concerning Che number and duration of
"occurrences" can have a •ubttantial iapact upon the extent
to vhi£h multiple carriers  of a single or many insured parties
may be liable — a problem  greatly compounded by the 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 Waste 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 H.J. Super.
275 (1975) (included  in the Compendium) (coverage of on*site
spill reaediation 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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                           - 19 -

or dotage is deemed co occur for purposes of statutes of
limitations is generally Che date of manifestation.  See.
e.g.. United States v. Kubrick. 446 U.S.  Ill, 123-24
(1979); Urie v. Thompson. 337 U.S. 163, 170-71 (1949).
     6*.  Defenses available co the insurer.
     Where an injured person may sue the insurer directly,
before or after 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
lawsuit as per eh* policy terms and deadlines, and the
defense that the insured has not cooperated with the
insurance company.  Centrally, judgment creditors stand in
the shoes of the insured and have rights no greater and no
less than the insured*s rights would be if it had paid the
Judgment and then sued Its insurance company eo recover the
amount paid.  Creer v. Zurich Insurance Co.. 441  S.U. 2d
15,30 (Mo. 1969); accord McHeal v. Manchester Insurance and
I nd earn in try Co.. 540 S.W. 2d 113,  119 (Mo. Ct.App. 1976)
(rights of the injured person are derivative and can rise
no higher Chan chose of the insured).  See also Appendix L,
Appleaan, Insurance Law as Practice SJ 4813-4817 (hereafter
"Appleam").
     Problems wich notice, etc.. may present considerable
difficulties during attempts by the United States to recover
for CERCLA costs against insurance companies.

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                             -  20  -

	 .   B.  Conscruecion  of  CCL/Pollution  Exclusion  Policies
      In  response  co  che judicial  interpretation of  the new
  "occurrence"  language  in  CCL  policies the  insurance industry
  developed a «pecific exclusion to  its policies which was
  meant, to clarify  insurance  coverage  for claims for  pollution
  damage.  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 most  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 claias for bodily injury '
  or property damage due to a release  of coxic 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 tens.
  Several  courts have held  that they are ambiguous, and have
  const trued the clause broadly  in favor of the insured.  In
  these cases,  coverage of  Che  polluter has been upheld.  In
  contrast, some recent decisions have held that the exclusion
 may apply Co  che  knowing, frequent hazardous waste polluter,
  and chat there is no ambiguity in che "sudden and accidental"
        »
  clause in such cases.
      Long-standing principles of insurance contract construc-
  tion include  the  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 cht iniured.  See, e.g.. Pepper Industries,  inc.  v.
 Home Insurance Co..  134 Cal. Rptr. 904,  67 C.A.3d 1012  4th
 Dist. (included in the Compendium).   Any ambiguities  oust
 be resolved in favor of the insured.   See, e.g..  Abbie
                                                        t
 Uriguen Oldsmobile-Buiek.  Inc.  v. United States  Fidelity
 Ins. Co.. 95 Idaho 501, 511 P.2d 783  (Idaho 1973)  and note
 11. supra.  The courts that 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 resolved that
 ambiguity in favor of the  Insured. See, e.g..  Union  Pacific
 Insurance Co.  v. Van Westlake Dnion.  Inc.. supra;  Niagara
 County v. Utica Mutual Insurance Co..  103 Misc.  2d 814, 427
 N.Y.S. 2d 171  aff'd 439. K.Y.S. 2d 538 (1981)  (included in
 the Compendium); and MoIton. Allen &  Williams.  Inc. v.  St. Paul
 Fire & Marine  Ins. Co.. 347 So.2d 95,  99 (Ala.  1977)  (included
 in the Compendium).                                         •
      The terms of the pollution exclusion clause focus  on
 the insured'•  intent in the actual discharge of  the pollutant.
 The definition of "occurrence," on the other hand, focuses
 on the insured*s expeecacion or intent vith regard to
 causing damage or harm. The majority of courts,  taking a
 broad view of  insurance carrier's liability, have interpreted
 •
'the pollution  exclusion clause, together vith  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 damage.   See,  e.g.. Allstate

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                                - 22 -

    Insurance Co. v. Klock Oil  Co.. supra (Included in the
  .  jCompendiua); Union Pacific  Insurance Co.  v. Van's Uesclake
    Union. Inc.. 34 Wash. App.  208, 664 P.2d 1262 (Wash. 1983);
	Jackson Township Municipal  Utilities Authority v. Hartford
    Accidtnt & Indemnity Co.. 186 H.J.  Super. 156, :451  A.2d
    990 (M.J. Super App. Div. 1982) (included in the Coaptndiua).
		In Lansco Inc. v. Department of Environmental Prottction.
    supra at p. 282 (includtd in the Compendium) ,  tht court found
    that tht tern "sudden." rather than meaning "brief or of short
    duration," oeans "happening without previous notice or on
    very brief notice; unforeseen; unexpected; unprepared
    for."  The ten "accidental" aeans happening "unexpectedly
    or by chance."  The court therefore concluded: .
              . . . under the definition of "occurrence"
              concained in the  policy, whether the
              occurrence is accidental must be viewed
              from the standpoint of the insured and
              since the oil spill was neither expected
              nor intended by Lansco, it follows 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
    •cation.  Approximately 80.000 gallons of gasoline leaked
    out of a small hole in an underground gasoline pipe over a
    period of months.  Despite  the policy's requirement that
    an occurrence be "sudden" or else subject eo the pollution
    exclusion clauee. the court held that the leaking fron'the
    line was not .expected nor intended, nor was the resulting
    damage.  Therefore, the pollution exclusion clause did not

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                            - 23  -

exclude coverage.  664 P.2d ac 1266.  See also Allstate
Insurance Co.. supra ac 605, where  the court states that
the discharge or escape of gasoline could be boch sudden
and accidental, even chough undetected for a substantial
period, of time, since "sudden," as used in pollution exclusion
clauses, "need not be liaited eo an instantaneous happening."
     A few courts have refused to find any ambiguity in
tne tens "sudden and accidental" where Che 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 Che Compendium) the
court determined chat 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) che United
                               ^
States' complaint against Great Lakes.  Because the United
States' complaint alleged that Great Lakes was liable for
contamination which "hat taken place as a concomitant of
its regular business activity .  . . ". che First Circuit
determined ehac no sudden o> accidental occurrence triggering
coverage was alleged.  The court found chae there is no
ambiguity in che policy "when che policy is read againsc
che cooplainc."  Thus, where insurance is or.may be a

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                            - 24 -

factor, cart mutt be taken  to avoid counterproductive
pleading.
     The U.S. District Court for the Eaatern District of
Michigan followed the Great Lakes decision in Aaerican
States Insurance Co. v. Maryland Casualty Co. 587 F. Supp.
1549 (E.D. Mich. 1984) (included in the Coapendiua).  The
  *
court held that the insurance companies 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. Construction 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 CCL 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  impairment."  These  policies have not been the subject
of significant Judicial construction.  For an excellent
discussion of their terns,  issuance and use, see Appendix K
   t
P. Mil'vy, "Environmental lopainent Liability Insurance
and Risk Assessment,"  The  Environocntal Forum, Oct. 1982,
p. 30.
     B.  The ISO Policy                               _
          The Insurance Services Office (ISO) policy is
generally more limited.  The EIL policy — restricting
coverage to daaages and losses arising out of a "pollution
incident," which includes only "direct" releases that result
in "injurious amounts" of pollution — is generally believed
to cover only fortuitous daaages, not those which are
"expected or intended."  These policies have not been the
subject of significant Judicial construction, but their
terns are discussed in'Substantial detail and contrasted
with chose of EIL policies  at Appendix A. pp. 449-433.
IV.  Statutory Insurance Requirements
     A.' RCRA 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
                                                            J
hazardous waste treatment,  storage, and disposal facilities.
i9/  42 O.S.C. I 6924(a)(6).

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                            -  26  -
                               ** "*
Tht 1984 amendments co RCRA added  in section 3004(c)  chac
financial responsibility may  be  established by any one
or a combination of che following: insurance, guarantees,
surety bonds, letters of credit, or qualification as a
             J2£/
self•insurer.    RCRA also  requires owners and operators
of facilities with interim  status  to certify that the
facilities are in compliance  with  financial responsibility
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 programs  chat 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 seace  co 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.
20/  42 U.S.C. §6924(c).
21/  42 U.S.C. Section 6925(e)(2)(B) and (e)(3)(B)

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                           - 27 -

The anoune of financial assurance must ac lease equal che
adjusted cose estimates.  The owner and operacor may use one
or acre of several aechanisas allowed by the regulations to
meet the requireaencs.  As noted above, the possible aechanisas
include cruse funds, surety bonds (that eieher guarantee pay-
aenc into a 'Cruse fund or guarantee performance of closure
or pose-closure), letters of credit, and insurance;  or the
owner or operator aay aeec ehe requireaenc by satisfying
a financial test chae provides a corporate guarantee of
                        22/
closure or pose-closure.    To aeec Che financial assurance
requireaencs, an owner or operaeor aay use aore Chan one
of che options, except Che financial test aechantsa.
One opcion Bay be used co assure funds for all facilities
of one owner or operator.  The aost ofcen used mechanism
is che financial cest (abouc 80 percent) and che least
used is insurance (abouc 2.7 percenc).  EPA will release
ehe facilicy froa che financial assurance requireaencs
afcer receiving certification chac closure has been
accomplished as aec ouc in the closure plan.
     Closure and pose-closure insurance ause sacisfy a number"
of requiremencs.  The owner or operacor must subaic a cercifi-
cace of insurance co the Regional Administrator.  The .policy
muse be insured for a face aaounc ac lease equal co che
227  40 C.F.R. 264.143. 265.143.

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                            -  28  -

closure or pott-closure cost  estimate, and  it muse guarantee
that  the  insurer will pay for Che closure or post-closure
activities.  If Che cose of closure or post-closure is
significantly greater Chan Che face anounc of che policy,
EPA aay withhold reiaburseaent of funds.  The owner or
operacor may noc terainace che policy vichouc EPA approval,
nor nay che Insurer cancel ehe policy excepc for failure
Co pay che premium.  Even upon failure co pay che premium,
che insurer eannoc cancel che policy if within 120 days
of notice of failure, che facility is abandoned, interim
status is eerminated, closure is ordered, or ehe owner or  '
                                                      23/
operacor is named a debcor in a bankruptcy proceeding.
      In addicion eo che closure and pose-closure financial
assurances, che owner or operacor must demonstrate financial
responsibility for claims arising from ies operacion for
                                                      24/
personal injuries or propercy damage Co ehird pareies.
For sudden accidencal occurrences, che owner or operacor
muse mainCain liabilicy coverage of ae lease SI million per
occurrence vieh an annual aggrefftee of ae lease $2 million.
For non-sudden accidencal occurrences, ehe owner or operacor
of a  surface iapoundaenc, landfill, or land ereacaenc facility
must maintain liability coverage of ae lease $3 million per
occurrence vieh an annual aggregaee of $6 million.  The owner
237  40 C.F.R. 264-U3(eH8), 40n C.F.R. 265-U3(d) (8).
24/  40 C.F.R. 264.147, 265.147.

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                           - 29  -

 or operator may demonstrate financial responsibility by
                                                            25 /
 having liability insurance, as  specified  in che regulations—
 by passing a financial test for liability,  or by using  both
 mechanisms.  Variances from these  requirements are  available
 if the owner or operator demonstrates that  the levels of
 insurance are higher Chan necessary.   Conversely, the Regional
 Administrator may impose higher levels of coverage  if warranted.
      The owner or operator must 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's Pott-Closure Liability Trust Fund  will assume  "the
 liability established by this section or any other  law  for
                                                          267
 the owner or operator of a hazardous  waste  facility.  .  .".
 B.  CERCIA FIHAHCIAL RESPONSIBILITY REQUIREMENTS
                           Z7/
      CERCLA Section 108(a)  requires chat  Che owner or operator
'of each described vessel "carrying hazardous substances
 as cargo" maintain at least $5  million in "evidence of
 financial responsibility."  Proof  may be established by
 any combination of "insurance,  guarantee, surety bond,  or
 qualification as a self-insurer."  This requirement is
 essentially an expansion of preexisting spill response
 257   242 C.F.R. 265.147(a)(1).
 267   42 U.S.C. S 9607(K).  The  99th Congress  is considering
    ..eliminating the entire post-closure liability transfer
 scheme.
 277   42 U.S.C. I 132Hp).

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                          - 30 -
                                               287
program requircntncs under chc Clean Uater Ace.    Insurance
policies iaiued under chese programs should be considered
whenever a release from a vessel is involved.  CERCLA
              297
Section 108(b)   requires £..«.; the Admin is tracer, no       ~
earlier than December 11, 1985, promulgate financial respon-
sibility requirements for facilities not covered under the
RCRA subtitle C program.  Priority is to be given to "those
classes of facilities" which "present the highest level of
risk of injury."  This program has not begun, but should
be considered as a potential source of coverage after
December 11, 1985.
     Two articles discuss many of the above issues in
greater detail.  Appendix B, D. Jernberg, "Environmental
Risk Insurance," FIC Quarterly. Winter 1984. pp. 123, et
seq., briefly addresses the RCRA and CERCLA insurance
schemes and follows with a detailed discussion of coverage
under different policy cypes and examines various develop-
ments in che writinn of exclusions.  Appendix C, A. Light,
"The Long Tall of Liability, [etc.J." 2 Va. J. Nat. Res.
L. 179 (1982), discusses uncertainties concerning coverage
as between RCRA program insurance and the CERCLA post-closure
liability fund.
287  42 U.S.C. I 9608(4).
297  42 U.S.C. I 9608(b).

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                            - 32 -

"for bad faith etcher in negotiating or  in  failing to
negotiate the settlement of any elaia."  Thus, che United
States nay assert state direct action claias or assigned
bad faith claias in addition'to its federal direct action
claia.
     One likely enforcement issue occurs where the insured
is in bankruptcy.  RCKA Subsections 3004(t)(2) sad (3)
leaves 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 from the
estate after a period of tiae 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 nay take action directly against the insurer for
the judgment.
     2.  CERCIA enforcement claias.
     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 reported under
     this section.  In defending such a claia, the
     guarantor may invoke all rights and defenses which
     would be available to the owner or operator under
     this subchapter.  The guarantor aay 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 arc 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
     endorsement: 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 ovner 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 chose regulations to a covered
                            IP./
vessel or offshore facility.

     The second requirement for evidence of financial

responsibility is in Section 108(b).  Section 108(b)
307  The Coast Guard takes the view that section 108(a) of
     CERC1A "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 PACE]

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                            - 34 -

establishes a framework  for imposing financial  responsibility
rtquircment* on onshore  facilities, buc 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
requirements 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
after that date.""
          [FOOTNOTE CONTINUED FROM PREVIOUS PAGE]
311(p) regulations remain in full force and effect until
such time aa section 108(a) regulations are issued.
    Financial responsibility requirements and direct cause
of action provisions similar to chose contained in section
108 of CERCLA are 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 authority to promulgate financial responsibility
regulations required under CERCIA section 108U) regarding
vessels and offshore facilities was delegated to the Coast
Guard by Executive Order 12418 (May 5, 1983), 48 Fed.Reg.
20891 (Hay 10, 1983).
31 /  This entire provision may be qualified in the same
     manner*as set forth in RCRA Section 3004(t) during
reauthorization of CERCLA in 1985.

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                           • 35 -

     Tht next quescion if whether some other federal claia
against insurers may be found or iaplied under CERCLA.
The two sections of CERCLA aost relevant to the possibility
of a right of direct action'against an insurer are Sections
107 and 108. 42 U.S.C. I 9607 and 9608.  Section 107 is
the vain liability provision of CERCLA and does not by its
tens include insurers among the list of responsible parties
listed in Section 107(a).  Section 107(e) 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 be promulgated until at least December
11. 1985.  In che 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 lav.  CERCLA 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 Cltias of eht Insured
         Assignaent After Judgment, Assignaent Before      • • .-
         Judgment, Assignment of Claims for Breach of
         Duties, and Assignments After Bankruptcy
     Thia ••ctlon will 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 the United States.  As vith other insurance issues,
these are largely issues of State lav.  Accordingly,  specific
state authorities should be consulted before any strategic
decisions are aade.
     Resolution of assignment questions depends to a sub-
stantial degree on the factual context of the case.   This
discussion assuaes that the United States has a RCPA or
CERCLA claia against * defendant and that the defendant has
possible liability insurance coverage vith respect to that
claia.  If the defendant is a "deep-pocket," i.e., it vill be
able to satisfy any judgment against it, the United States
probably vould not want to take more than a passive role vith
respect to insurance, coverage issues.  Acordingly. for purposes
of further discussion, ve can assuae that the defendant has
little if any assets eo satisfy the CERCLA judgaent and that
the United States' primary hope for substantial recovery is
froa the insurance carrier.
                  Assignaent After Judgaent
     Fundamental Issues regarding the prosecution of direct
action claims against an insurer are usually dependent on

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                             - 37  -

vhcehtr a judgment has  yet been entered against  the  insured
defendant on  the claim.   If  it has, there are a  number
of possible aethods  for pursuing  claims 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 garnishee,  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, co  the extent of policy limits, without the need
for further proceedings.
     In the absence  of a policy provision providing  for
direct action by the 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
righcs agaidst it's insurer, in partial or full settlement of
the United States' claim against  Che 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

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                             -  38  -


provided by  eht policy before  loss,  snd  that  ic  does noc

encompass a  prohibition against assignment after a loss has

occurred.  The basis for  this  distinction has been explained

as follows:

     Although there is soae authority to the
     contrary, the great  weight of authority
     supports the rule that general  stipulations
     in policies prohibiting assignments thereof
     except  with the consent of the  insurer apply
     to assignments before loss only, and do not
     prevent 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 the assignment after loss
     is the  transfer of a right to a money claim.

16 Couch on  Insurance 2d  163:40 (Rev. ed.); accord. 7

Appelman, Insurance Law & Practice §4259; Mancikis v. St.    	

Paul Insurance Co.. 655 F.2d 818, 826. (7th Cir.  1981) ("Policy

provision [against assignments], however, can only prohibit

assignment of policy coverage, not assignment of an accmeo

cause 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 assignment,  the assignee stands in the
                                   •
•hoes of che Insured and will  be subject to any defenses that

che insurer  had against Che insured  prior to assignment.  See

A. Uindt, supra. at 367.  Thus, the  insurer can  assert.that

the claim is noc within che coverage of che policy or that

policy conditions have not been complied with.   Therefore.

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                             • 39  -

 cht value of «ny  Assignment  should be  examined  carefully
 prior  co its acceptance  as consideration  for  settlement.
                  Assignment Before Judraenc
     While an assignnent after judgaent is generally
 allowed', assignaencs before  Judgment present  special
 probleas and may  not be  appropriate in certain situations.
 At least two probleas arise  in the prejudgaent context.
     First, liability policies generally require the insured
 to cooperate with the insurer.  Assignaent of a claim under
 the policy against the insurer could be construed as a viola-
 tion of the cooperation  requireaent.  Such a  construction
would be likely if the insurer has agreed to  defend and has
not denied coverage.  The c —-•raeion clause  of a liability
 insurance policy will be deeaea violated where the insured,
by collusive conduct, appears to be assisting the claiaant
 in the aaintenance of his action.   14 Couch on Insurance.
supra. 151.115; and Brown v. State  Fara Mutual Automobile
 Insurance Association, supra. 272  N. E.2d at 264 (H(C)ollusion
in respect co liability  is,  of course, a direcc violation
of che non-cooperacion clauses of  the insurance policies"? and
 if established is a defense  eo ehe  insurer's liability.").
     However, in a situation where  ehe insurer has denied
       »                      "                        •
coverage and has refused t.?     nd, an assignaent should not
violate che cooperacion  requir«a«nc.  1C has generally been
held chac there is no duty eo cooperate once che insurer has
denied coverage.  14 Couch on Insurance, supra. 151.121; A.
Windt, supra, ac 97; Shemoff & Levine, Insurance; Sad Faith

-------
                             -  40  -


^Litigation.  I3.06[3]  (1984); and  see  Crltz  v.  Fanners  Insurance

Croup.  230 Cal. App.  2d  788. 41 Cal.  Rptr.  401  (1964).   In

Crltz,  the court  rejected  the  argument  that an  assignment of

rights  against the  insurtr violated the cooperation agreement

of  the  policy in  a  situation where the  insurer  had itself

failed  to coaply  vita the  policy.  230 Cal.  App. 2d at 801 .

The Court stated:

     Whatever may be  (the  insured*s]  obligation to
     the carrier, it  does  not  deaand  that he bare
     his breast to  the continued  danger of  personal
     liability.   By executing  the assignment, he
     atteapts only  to shield hiaself  from the
     danger  to which  the company  has  exposed him.
     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  to
     narrows the  policyholder'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  to  by the Insurer, before  suit is

commenced against the insurer.  One such provision provides:

    Action Against  Company.  Ho action shall lie
    against  the company  unless, as a  condition  precedent
    thereto, there  shall have  been full compliance with
    all of the terms  of  chit 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  ehe  insurer -has agreed to defend
ics insured, this provision will  likely prohibit any pre-
Judgnent assignment.  However,  an assignment may be possible
if che insurer refuses co defend.
     As noced above, the standard policy provision requires,
as a predicate to the insurer's liability, a Judgment or a
settleaent aaong 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 ehe insurer refuses  to defend ehe insured, the
insured may eneer ineo a reasonable settlement and, there-
after, seek reimbursement from  ics insurer.  This rule is
Stated by Appleaan as follows:
     If an insurer unjustifiably  refuses to defend a
     suit, the insured may  make a reasonable settlement
     or compromise of ehe injured person's1 claim, and is
     ch«n encieled eo reimbursement from the insurer,
     even though ehe policy purports eo avoid liability
     for settlement made without  ehe insurer's consent.
7C Appleaan, supra. 146*90.  In such a situation, che insured
may, as pare of a settlement, "simply assign eereain rights to
che plaintiff."  Id. See also Id. §4714.  In other words, ehe
settlement can include an assignmenc.
    Maneikis v. St. Paul Insurance Co.. 655 F.2d 818 (7th
Cir. 1981) illustrates this point.  There, Maneikis
initially sued an attorney,  Solotke, who represented him

-------
                           - 42 -

in * prior business matter.  Solotke1a professional liability
insurer, St. Paul Insurance, denied coverage and refused co
defend, claiming the aatter sued upon was not within scope
of the policy.  Thereafter, Maneikia and Solotke entered
into a' settleaent agreement of $200,000 to be satisfied by
Solotke's payment of $50,000 and his assignment to Haneikis
of his rights against St. Paul.  Haneikis sued St. Paul on
the assignment.  The trial court granted summary judgment
to St. Paul.  The Seventh Circuit reversed.  It found that
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 Casualty"and Surety Co.. 473 F.2d
1071  (8th Cir. 1973); Critt v. 'Farmers Insurance Croup.
supra; Samson v. Transaaeriea Insurance Co.. 30 Cal. 3d
220.  240-41. 178 Cal. Rptr. 343. 636 P. 2d 32 (1981);
Shernoff & Levin*, supra. 13.06(3) ("It has also been
held that when the insurer denies coverage and refuses to
defend* its insured, th« insured need not notify the
insurer of any assignment of his or her rights against the
insurer prior to judgment."); and 14 Couch on Insurance.
supra. 151.72.  Couch states the rule as follow*:
     If the insurer unjustifiably refuses to defend
     aa action against the insured, on the ground
     that che action was based upon a claim not
     covered by the policy, it cannot successfully
     invoke the no trial clause to bar liability,
     for the reason that when the settlement by
     the insured after the unjustified refusal to

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                            - 43 -

      defend was made in absolute good f*lch in
      order co avoid the chance of an adverse verdict
      for a much larger SUB,  it would seen grossly
      unjust,  if not contrary to public policy, to
      insist chat there must  be in every case an
      actual trial and verdict.
      To summarize,  where the United States has not  yet
 obtained a judgment and where a defendant's insurer has
                  51/
 refused Co defend,    a eectleaent could be considered with
 the defendant which included,  among 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 Breach Duties
      Another  fact situation  in which the assignment issue
 frequently arises-involves bad faith refusal to settle.
      It.is generally held that an insurance carrier which in
 bad faith refuses to settle  a claim within policy limits may
 thereafter be liable to the  insured if a judgment is entered
 beyond the policy limits. This subject is discussed at length
 in 7C Aooleaan.  supra 114711-15;   See,  e.g..  Critx  v. Farmers
 Insurance Croup, suprsr.
      For exaaple, assume that plaintiff sues  defendant for
 $50,000.  Defendant has an insurance policy with a  $25,000
327 An  insurer may frequently defend  its  insured with a reser-
    vation of its  right  co ultimately deny coverage.  There  is
a  division in authority  as co whether such a  reservation of
righcs,  or non-waiver agreement, must be  consented to by the
insured.  See 14 Couch on Insurance,  supra. 1651:89.  As noted
above,  if there is a defense by tne insurer with reservation
'of righcs,  it may  be questionable  whether Che defendant
could enter into a settlement without the insurer's consent
and still preserve its rights against the insurer.

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                             - 44 -

policy Unit.  During the course of litigation, plaintiff
offers to settle for $25,000.  If the insurance carrier in
bad faith refuse* to accept  the settlement and judgment is
thereafter entered for $50,000, the insurer will be. if its
bad faith is established, liable to pay the entire $50,000
and may also be subject to a punitive damage 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 an 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 insured1s only assets were $5.500 and a potential claim
against the insurer for bad faith refusal to settle.  Those
assets were 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 N.C. 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 -


content of the Insurance carrier, even when che policy provi-

sion* provide co che contrary.").

     Bad faith refusal to pay claims may well arise in CERCLA

cases, particularly as the requireaents of CERCLA become

more clearly established.  In situations where the claim of

the United States exceeds policy limits and the insured has

little if any assets of its ovn, it may 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 the 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  •
     che insured is absolved from the liability
     judgment, is an assignment by the insured
     of his rights against the insurer to the
     insurer's judgment-creditor.  In exchange
     for the assignment, the claimant signs a
     covenant not to execute above the policy
     limits against the insured.  The assignment
     thus becomes a convenient way for the insured
     to fully satisfy the injured party.  In
     situations where the insured is basically
     'judgment proof.' 1C may well net the injured
     party far more than execution of the judgment
     against the insured.  One disadvantage of
     this technique for the claimant is that the
     risks of collectibility and litigation
     against the insurer fall upon the claimant.

1  Long, Law of Liability Insurance 15.46.

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                             - 47 -

        a party who hat  obtained judgntnc  under chc  policy
 co  proceed against cht  insurer.  It  provides:
     Any person or organization or che  legal
     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.
                                        * 33/
     0.   Common Law Denial of Direct Action"*"
          Common law generally denies claims by injured
 persons  against a  tortfeasor's insurer.  Appieman. I 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.  Applenan,
 f 4861. .  Similarly, most Jurisdictions do not allow the insurer
 to intervene in an action against the insured.  Appleman.
 S 4861.   See, e.g., United States v. northeastern Pharmaceu-
 tical and Chea-ical Co..  Inc..  Civ. Ho. 80-5066-CIV-S-4
 (V.D. Mo.. May  3,  1983)  (included in the Compendium) (denying
 insurer  intervention in a RCRA f 7003 and CERCLA II 106 and
 107 action).
3_3/  The discussion under this heading and the next is
     derived largely from cwo sources:  Appleman, Insurance
Law and Practice (1981, Supplemented 1984), SS 4861, et. seq.
("Appleaan") (Appendix L), and American Insurance Asso-
ciation. Statutes Affeetint Liability insurance U9tH)
(ALA survey) (A summary of direct action rules in the 50
states, Guam and Puerto Rico is presented at Appendix M.).

-------
                             •  48  -

     There  is  one  notable  exception  co  che  common  law  rule
 regarding direct action.   Some jurisdictions  allow direct
 actions, in Che abstnct 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 aoaetiaes qualified for
 specific forms of  insurance.   See Appendix M.  Since states
 operating approved RCRA regulatory prograas will probably
                \
 require insurance  under state  lav, this exception'may be
 significant.
     E.  State Direct Action Statutes
         As of 1981. twenty-seven states, Puerto Rico and
Guaa had adopted some fora of  direct action statute.  See
Appendix M.  These statutes aay allow Joinder of insurers,
 independent prejudgment litigation against insurers, pose-  .
judgaent suits to  recover directly from insurers, or soae
coabination of these options.  These statutes typically
provide that liability policies aust contain provisions
alloving such suits, or provide that such suits may be
                                                        347
brought notwithstanding a policy clause to the contrary.
     Frequently, authorized direct action claims are limited
by category or are otherwise conditioned.  For exaaple,
34/  The first direct action suit brought by the United States
     to recover froa the-insurer of a RCRA/CERCLA Judgment
debtor is United States v. Continental Insurance Co..  Civ.
Mo. 85-3069-cv-5-<»  (¥.0. Missouri, tileo ttarcn 1902;.   The
complaint is presented as Appendix M.

-------
                             . 49 -

sixteen state* allow post-judgment suits against  incurtrs
only  if th« judgment has not been be Bet by execution upon
the Insured.  Only Louisiana, Guam and Puerto Rico allow
broad prejudgaent direct actions.  See Appendix M, and the
ALA Survey, which contains details of individual state
statutes.
     Due to the extraordinary variety of state statutes
on this subject, the United States may 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. 1984);
United States v. Chem-Dyne. et al.. 572 F. Supp.  802, 807
(S.D. Ohio 1983; and Wehner v. Svntex Agribusiness. Inc..
Civ. No. 83-642 (2) (E.D. Mo. April 1, 1985) IX Chcm. & Rad.
Waste 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 States against the Insured.
             As indicated at p. 47. supra, the courts generally
hav« 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 Che litigation support permissive
intervention in an action by the United States under an

-------
                             -  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 'as 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 chat Che United States can be named as
a defendant in one 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 (19*1).

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                             •  51 -

     Success by che insured  in coverage litigation probably
precludes che 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 same 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, Lav of Federal Courts I 100A (4th ed. 1983) [hereinafter
Uright] , 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 che first action will not be estopped.  18 C. Urighc, A.
Miller & E. Cooper, Federal Praccice, Procedure, and Juris-
diction II 4448-4449 (1981) and [hereinafter Vright and Miller]
and cases cited.  Where a defendant is not subject to the
jurisdiction of a courc, ic can not be a party and thus can
not be'bound by collateral estoppel.  Zenith Radio Corp. v.
HateItIne Research. Inc.. 395 U.S. 100, 110 (1969); Oil &
Gas Ventures First 19S8 fund. Ltd, v. Hung. 250 F. Supp.
744. 753-54 (S.D.N.Y.. 1966); and 18 Wright & Killer I 4449.
Thus, if a courc could not exercise jurisdiction over the
United States, the United Scaces could noc be considered a
parcy and could noc be escopped by any decision by che courc.

-------
                             -  52  -

     However, nonparclet  co  suits can  sometimes be held  to
be collaterally estopped  --  if the nonparty actively partic-
ipated in the prior case, and  vas a party in everything  but
name; if the nonparty's in::,  eats were specifically repre-
sented in the first action,  e.g. a trustee or guardian vas
involved in the first suit;  if the nonparcy had soae 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 the subject of the  suit.  18 Wright & Miller S 4449
and cases cited.
     The first two excepti."..  -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 co participate  in the litigation, that did
not do so, that did not infora 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 is primarily espoused in the works of commen-
tators and is really a form of equitable estoppel.  See,
e.g.. 18 Wright & Miller  II 4452 tad 4453; *nd Restatement
(Second)  of Judgments S 62 (1981).  But the rules for applying
equitable estoppel against the United States are unique.  It
is by no Beans clear that the  United States can be estopped
under any circumstances.  Some  Circuit Courts of Appeal  have

-------
                            - 53 -

stated that estoppel cannot lie against the federal govern-
aenc.  Hicks v. Harris. 606 F.2d 65, 68 (5th Cir. 1979).
Other Circuits 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 "affirmative
misconduct."  Community Health Services of Crawford County.
Inc.. v. Califano. 698 F.wd 615, 620-21 (3rd Cir. 1983);
Mendota-Hernandei 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 case dismissed
because a court has no jurisdiction and later raising  the
same 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 isva
predecessor in interest to the same claim or property,  the

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                             -  5A  -

nonparty can b« bound in later suits.  An  insurance company
would seem co have a basis for estopping the United States
from retrying the insurance  company's liability under its
contract on this basis only  if the United States actually
has taken an assignment of the assured's claim against 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.U.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
                                                 N
$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 Che 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

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                            - 55 -

reversed and remanded chc ease for a new trial on chc Issue
of coverage.
     The enuc of the appellate court's decision was its
holding that, contrary to the 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.U.2d at 186.  "After those rights
came 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 act*
and relations subsequent eo the accident, which gave rise to
plaintiff's rights, they were not in privity." Id. at 188.
See also Math!son v. Public Work Supply District. 401 S.W.
2d 424, 431 (Ho. 1966) ("to make one "privy" to an action he
must have acquired his interest in the subject of'the action
subsequent to the commencement of the suit or rendition of
judgment").

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                             - 56  -

     The rights of the United States  against an  insurer
 in an environmental casV, under this  analysis, would be
 acquired at the tiae of the  accident  or occurrence giving
 rise to liability.
     Courts in other »t*     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 to execute a Judgnent against
 the insured by proceeding against the insurer.  The insurance
 company asserted that a previous Judgment against the insured
 on the issue of coverage vas res judicata as to the injured
 party.  The court held that  the injured party vas not in
 privity vith the insurer or  the insured and not bound by the
 outcome of the declaratory judgment.  Id. at 1197.  The
 court relied on 7 An.Jur. 2d, Automobile Insurance f!(1963):
             A judgment determining, as b'etveen
             an automobile liability  insurer and the
             insured or a person claiming to be in-
             sured, a question of coverage in favor of
             the insurer does not, as a matter of res
             Judicata, preclude the injured person
             from litigating the question of coverage
             in a subsequent action or proceeding in-
             stituted by him against the insurer, since
             the injured person ia not in privity vith
             any of the parties in the former proceeding.
     In Gladon v. Searle. 412. P.2d 116 (Wash. 1966),
while a suit by an injured party against the insured vas
 pending, the insurance company commenced.an action against
 the insured for a declaratory judgment as to coverage. . The
 company did not notify or attempt to join the injured party,
 and a default judgment was entered in favor of the insurer

-------
                             • 57 -

4ft«r cht insurtd failed co  answer the suit.  The  injured
party subsequently recovered a default judgment against the
insured and filed a garnishment action against the 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."  JU at 118.
     The insurance company in Sobina v« Busby. 210 R.E.
769 (111. App. Ct. 1965), sought to use a judgment from a
suit between the insurance company and the insured as a
defense in an action by the  injured parties against the company
to recover on a Judgment entered against the insured.  Citing
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 tine of the accident
and were not cut off In a later decree entered in proceedings
to which the plaintiffs were not parties." Id,, ac 772*73.
     Southern farm Bureau Casualty Insurance Co. v.
Robinson. 365 S.U.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
            insured and an injured person, which
            ruit the Insurer is defending, destroy
            the rights of the injured person who was
            not a party of the'declaratory judgment
            proceedings?

-------
                             -  58  -
          «
Th« court said  "No,"  and  explained  chac  che  rights  of  che
injured  parcy arose ac  che  cime of  che  injury  and are
aneagoniseic eo che righcs  of  boeh  Che inaurer and  che insured.
,Id. ac 457; aee al«o  46 C.J.6. Insurance  Si 191 , p.  123 ("The
righcs of che injured person who nay maincain  an aecion
againsc  inaurer are eo be decermined as of che cime of che
aeeidenc ouc of which che cause of  aceion grew ....)" and
Shapiro  v.  Republic  Indeminiey Co.. 341 P.2d  289 (Cal.
1959).   In Shapiro, che injured parcies recovered a judgnenc
againsc  che insured and Chen broughc an aceion againsc che
insurer  on a public liabilicy  insurance policy chac covered
che insured.  The  insurer argued chac ics liabilicy muse be
             N
decermined according  eo ehe policy  as ic was reformed in a
poscaccidenc aceion beeween ehe insurer and che insured.
The coure held  chac,  as chird-parcy beneficiaries of che
insurance policy,  che injured  parcies had an ineeresc chac
could noe be alcered  or condicioned by che independenc aceion
of ehe insurer  and ehe insured in reforming ehe policy.  
-------
                             -  59  -

 injured  person has  a  cause  of  action  cht  mootnc  he  or  she
 ia  injured  end is not In  privity  with the insured,  Virginia  "
 likewise has held ehac, evtn chough a judgment creditor stands
 in  the insurer's shoes, che injured party is not barred by a
 plea  of  res judieata.  Storm v. Nationwide Insurance Co.. 97
 S.E.2d 759  (Va. 1957).  "The insured  and  the Company aay
 not litigate and have [the  injured party's] rights against
 the Coapany, which  had their inception at the tiae 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.Zd 638. 641  (S.C. 1937) (injured
 party would not be  privy, and  therefore not bound by judgment
 in  a suit* to which  he w»s not  a party, where her rights were
 acquired at time of injury  and prior  to the rendition of the
judgment).
     The commentators agree with  this  line of cases.  Couch
 states,  "A judgment deceraing  as  between  an automobile liabilit;
 insurer  and the insured or  a person claiming to be insured',
 a question of coverage in favor of the insurer does not, as
*
 a matter of res judicaea, preclude the 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 former .proceeding."  Couch. Cyclopedia of Insurance
 law. 145:943 (2nd ed.).   Likewise, Appieman notes that "an
 injured  person can  neither  be  bound by a  judgment in favor
 of  the insured in a suit  brought  by another claimant, nor by

-------
                            - 60 -

t judgment in favor of Che insurer, in an action brought
upon Che policy by the insured."  Applenan, 511521; see 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 1941),
an injured party recovered a judgment against the insured
for personal injuries sustained in an 4utomobi.lt collision.
The Judgment creditor Chen 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 insurer and a different party also injured in the same
collision in which the court held the policy null and void
due co che insuredfs failure co cooperace.  The court held
that a judgmenc in favor of eht insurer in an aceion by
an injured party on the question of noncoopcration vas res
judieat'a in favor of the insurer in a later action by another
person injured in Che same accident.  Id. at 140-41.  The
court reasoned that che righc of che insured against ehe
insurer was fully litigated in che suit by ehe firsc injured
party and che d«cl*racory judgment againsc che insured is a
bar againsc anocher injured parcy whose righc, if any, against
eh* Insurance company is derived from and dependent upon a
valid righc of cbt insured against che insurance company.
     The decision in Conoid novhere mentions che issue of
privity or when che rights of che injured parcy arise, but
                  •
focuses solely on che rights of a judgmenc credicor being
derivative of the rights of the insured.  Also, the ease

-------
                             - 61 -

Involves an action by an  injured party where Judgment has
been entered in favor of  the insurer  in a siailar action by
another person injured in the saae accident.  Most iaportantly,
although the acre recent case* of Celina Mutual Insurance Co.
v. Sadler. 217 M.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 to 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.  Uhen collateral estoppel would
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 (7ch Clir. 1979); Defenders of Wildlife v.
Andrua. 77 FRO 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 discuased  in the context of whether the

-------
                            - 62 -

United States could be considered as having a relationship
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 vane 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
claim.  See Independent Petrochemical Corp.. v. Aetna Casualty
and Surety Co.. Civ. Ro. 83-3347.  (S.D. Ohio, March 8, 1985}
22 ERC 1523, IX Chen, and Rad. Uaste 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 No.  14767, May 14, 1984),
discussed at IX Chea. & Rad. Waste Lit.'Rptr. 822 (allowing  ,
the Commonwealth of Massachusetts to intervene in an action
between a polluter and its insurer).

-------
                UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
\ ^^,                     WASHINGTON DC 204(0                OSWER # 9850.C
     SUBJECT:   Endanceraer.t Ass^5S/>ent Guidance
                      '
                       ,i
     FRCM:      J.  Wjjistsr. Porter
               Assistant  Administrator

     TC:        Addressees


     ?VR?OS£

         This  memorandum clarifies the requirement that an
     endangemer.t  assessne.-.t be developed to support all administra-
     tive and  judicial  er.f crcer-.er.t actions under Section 106 of the
     Comprehensive Environnental Response, Compensation, and Liability
     Act  (CERCLA)  and  Section ?003 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 tr
     properly document  and  justify 'its assertion that an imminent a.-.d
     substantial endar.germent to public health or welfare or the
     .e-nvironment rray exist.   The endangerment assessment provides th:s
     documentation and  justification.  The endanjerment assessment is
     net  necessary- ta  support Section 104 actions.

         This  memorandum also provides guidance on the content,
     timing,  level of  detail* format, and resources required fcr t"e
     preparation of endangerment assessments.

     WHAT IS AN ENDANGERMENT ASSESSMENT

         An •ndangerment assessment is a determination of the
     magnitude  and probability of actual or potential harm to public
     health or  welfare  or the environment by the threatened or actual
     release  of a  hazardous substance (for a CERCLA action) or a
     hazardous  waste  (for a RCRA action).

         Ah  endangerment 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.

-------
      1- general,  the  endangeiT.er.t  assessment  should identify  and
 characterize:

      ;»>  Hazardous  s^rsta-ces  a-.d'cr  hazardous  wastes  prese-.-.
          in  all  relevant  environmental  nedia  (e.g.,  air,  water,
          soil; sediment,  biota):

      (b)  Environmental  fate  and  transport  mechanisms withi-
          specified  environmental  media,  such  as  physical,  cher.ical
          and  biological degradation processes and  hydrogeolog;;*:
          evaluations  and  assessments;

      (c)  I-trir.sic  tcxicological  properties or  human health
          standards  and  criteria  cf specified  hazardous  substar.res
          or  hazardous wastes;

      (d)  Exposure pathways and extent of expected  or potential
          expos-re;

      !e)  Populations  at ris'x;  and,

      (f)  Exte-.t  rf  expected  harm  and  the likelihood  of  such  harm
          occurring  (i.e., risk characterization).

WHY PERFORM AN ESSASGERMEST ASSESSMENT

     L-'nder Section 106(a)  of  CERCLA, if  the President determines
that there ray be an  imminent and  substantial  endangerment  to
public healt.n  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 respond
to hazardous conditions.

     Before an order  can be issued or  an  action  filed under $136
of CERCLA, EPA nust  be able to  document  and justify its  assert-.or.
that an imminent and substantial  endangerment  to  public  health
or welfare or  the environment may  exist.  The  endangerment  assess-
sent provides  this documentation  and justification.  It  is  tne
basis for the  findings of  fact  in  administrative  orders, ccr.sent
decrees, and complaints.

     In situations dealing with hazardous wastes  or solid  wastes
under RCRA, rather than  hazardous  substances under  CERCLA,  Serticn
7003 of RCRA may be  used as the au-.v--ity 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  a.-.
assertion with an endangerment  assessment before taking  enforce-
ment action.


I/ "Final Revised. Guidance Memorandum  on. the Use and  Issuance cf
Administrative Orders  '.'nder Section 7003  of the  Resource Conserva-
tion and Recovery Act",  September  26,  1984  signed by Courtney ?r;:e
and Lee Thomas.

-------
     •It  is  important  to  note  that  "imminent"  does  not  mean  irjnediate
harm.  Rather,  it means  an  impending  risjc  of  harm.   Sufficient'—~
 :-st:f iraticn  for a determination  cf  an  imminent endancermer.t -ay
exist  if  harm  is threatened:  nc  actual  injury  need  have  occ.rret"
cr  De  occurring.' Similarly,  "endangerment" means  something  less
than actual h a rm.


WHEN TO  PERFORM AN EN3ASGERMEST  ASSESSMENT

     At  remedial sites subsequently targeted  for CERCLA  5106 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 ar, order  althcjgn  additional work  may be  needed  prior  to
Iiti-aticn  (see Attachment  1  and the  RI/FS guidance documents
referenced or. Page 6  :f  this  guidance).

     Where a-. RI/FS has  r.ct been initiated or  completed, a*
e-.dangernent assessment  must  be  prepared to justify an adminis-
trative order or judicial action under CERCLA  $106  or  RCRA  S^OOS.
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
wr.ich justifies eitner further- investigative  action to deterr.ine
the appropriate remedy for a  site  cr  an  immediate  response  actior..

     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 m-st re
developed independently  of the RI/FS  and completed  prior to  issuance
of the order or decree for remedial action.

     An eniangerment  assessment  is required for all future  RCRA
§~OC3 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
tse Department of Justice without  an  endangerment  assessment.  The
litigation team, however, may determine  on a  case-by-case basis
that the preparation  of  an endangtrment  assessment  or  its equivale-.t
would substantially strengthen the government's case.

     Endangernent assessments must be prepared  for  all RCRA  $"003
cr CERCLA $106 orders issued  to  another  Federal agency for  cleanup
cf 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
parties.  If, however, a compliance agreement  is not complied witn
by Federal owners or  responsible parties,  EPA may  issue  an  order.

-------
                                -4-

WKAT L:'.TL:	

     The determination  that  an  imminent  and  substantial  eniarcer-
-e-,t to public  health or  welfare  or  the  environment  may  exist  is a
lesal prerequisite  t.-.st rust  be ret  sefcre an  crier  can  be  iss.ei
cr an action  filed.   It is E?A policy  that endangerme-.t  assessre--_s
should be  undertake"  only  to  the  extent  "necessary and sufficie-.t"
co fulfill  the  rec--.rer.er.ts  of  legal enforcement  proceedings.  At
ar.y site,  there is  the  potential  for conducting studies  reyor.d tr.e
level of detail needed  for enforcerent actions.   The  level  of
detail of  the enhancement assessment  should be limited  to  the
amount of  information needed  to sufficiently demonstrate  an  actual
or potential  ir.rinent ani  substantial  endangerment.   The  level cf
detail to  sufficiently  demonstrate endangement will  vary fror, case
to case based or.  the  following  factors:

     0 the  type of  e-.forcem.ent action  (e.g., AO for  removal
       vs  litigat ion);

     0 t-e  tvre cf  response  action  (e.g., removal vs  remedial);
       anr

     0 the  staze  cf rescc-.se  action  'e.g., RI/FS  worfcplar. vs
       P.I/FS  ccrcle-.el).

     The level  cf detail  required to support a particular enforce-
ment action will  ultimately  be determined on a case-by-case
basis by Recicnal procrar  personnel  in consultation  with  Regional
Counsel.   As  a  ce-.eral guide, the matrix on  page  5 defines  these
levels o? detail  rased on  the factors  listed above.   The  matrix
should help the  Pecions to bc.t.n (1)  determine  what constitutes an
adequate e-.dsr.cerrert assessment  for a particular enforcement
action, and (2)  plan  their intramural  and extramural  resources
accordingly.

     v.>,en endar.gerr.ent  assessments are developed  to  support  •
administrative  orders for  private party  RI/FS  or  removal  actions,
information already available about  the  site will generally  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  ceherally
more quantitative as  they  will  be based  on information obtained
from the remedial investigation.  Such endanoerment  assessments
will b« used  to support any  subseauent CERCLA  5106 orders or
judicial actions  seetino  design and  construction  of  site  remedies.

     The information  gathered in  an  RI/FS  is generally similar
to the type of  information needed for  an endanaerment assessre-.t.
However, RI/FS  and  endangernent 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  5rOC3..
For sites with  CERCLA $106 or RCRA $7003 enforcement  potential,
Regions should  review the  RI/FS workplan to  determine whether
information develosed as  part of  the RI/FS will be sufficient
for an eniancerrert assessment.   In  certain  complex  cases,
additional  ir.fcrratior. ray be needed and a separate  endancerr.er.t
assessment wcr^clar ray be recuired.

-------
                                       i JM 11.1 .mi.:.  MM-  i j.vi .1
Comdex ity     Act inn _ _
                Af>  for  renwival
                act inn,  /*> for
                (wivale party
                m/FS,  prelimi-
                nary  sclnrj
                                      Uita
                                     Hay l« limited. probably
                                     cons 1st I nq of  Information
                                     from the Preliminary Site
                                     Assessment, Site  Inspection
                                     Hepnrt, and Hazard Ranking
                                     System evaluation* if
                                     Nb health studies available;
                                     no denngraphic studies avail-
                                     able.   Preliminary sampling
                                     ilata will probably be available
                                     on pollutants present.  Ifcita on
                                     extent of release or concentra-
                                     tions of materials at the pniitl
                                     of exposure may lie avail ah I'-.
                                                          |«ipii-
    I it at ive
of ex|itf>me
lotion  at  risk,
proUihilily of  li.irm occuri irt|.
Critical  pollutants and
t.l*»ir toxicola;*>nati|e aiil prinh^nt.  to     <

m>iy exist  bec.iirv> of I IK-
                                  For  nm»>v.il ,n-l ions
                                  wht^re  HM> nonail si
                                  rnnkiiM) process h.'ir
                                  not  l«ren «:o^dete
                                  .isser.smr»nt may lr«
                                                                                                                   'S, Slate s|-rm-
                                                                                                                   invest i<|at ious,
                                                                                                            written  reports frcm
                                                                                                            inr,|»M't ion-; by
                                                                                                            iiover inw»nt autfmri-
                                                                                                            t ies, ai«l notifica-
                                                                                                            tion in  accordinc'r
                                                                                                            with CM«IA SUM.
l/evl  II
              Issuance of  AO
              or consent «le.cree
              for private  party
              «:leai Rip
l,eve|  III
              Litigation
              fslte-by-site
              basis)
Remedial  Invest li|nt ion curfdcte
or other '«|iiant i tat ive  data
available on nature/extent of
relea;se.   Iktta may lie  available
on mai|nituilr* and dravxirapiiics
of pm>ulation at risk.
Possibly  sojnr? preliminary
liealth effects studies.
!5oun:es and specific
materials associati*! with
relea??e are Ident. if ii«d.
Itl ami rT. c«n|ih>te.   All
required geoloi|ical,
%-by-r.i!>-
   Uiqts as  riijuiieil to r.»ip|»irl  .1 |vu I iriilar enloicmi-nt
   •H.-1 ion.
           itat ivv appraisal
consider iiw| r.|«>cific cxp§>sure
nmtcs awl critical pollu-
tants.  Hie assessment  should
ttential
Iwralth  etfe<:t;;, critical
exposure levels, and necessary
foll«w-up IxMllIt st«idles.
Critical  (ml hit ant s and  nmites
idiMil i f i«xl,  .if* I exist inr| exno-
sur<«r. d«-l inoil or estimated.
'Ihi?; will  conv.litule an
.1'I .lis.ll  to tin* (HV.t of
                                     I»KI«-I I !•:<•
                                     i«.l inwil <•
                                                                                    and know lei li|i* .lint  .in
                                                                                    l  (If IMICI-I I .linl y .
                                  This  assessment must
                                  bn alile to snnjioi I
                                  legal  act ion  in t !>»•
                                  event  that  it  is
                                  dial lentfi^l by  a
                                  recalcitrant   IW.
                                  Should br? ronclus i ..•
                                  enr»i<|h that IKIV.  will
                                  b«l eiicour.Kr*il  to  II..KI-
                                  a firm otnni Imnul  to
                                  crirplete M^iK-«li.»l
                                  action, Iml. not
                                  iHKMv.sar i I y ni»r.it«-
-------
      The  er.iangerment  assessment should evaluate the adecuacy,
 accuracy,  precision.,  comprehensiveness,  reliability, and'overall
 quality cf  identified  information arc data.

      Emergency- act ic-.s do not  recuire the same depth cf assess-
 rent  as planned  or  remedial  activities.   By  definition, a*
 immediate  and  significant ris* cf -ir- to human life or health
 = r  tne environment  will be prese--.  .n an emergency,  raking
 the assess-er.t  of endangerment . i<»s ler to prepare.   Further,
 EPA is justs-fying only the need  for  immediate  action,  not  the
 long-term  remedial  solution.   Thus,  the  endangerment assessrert
 -ay re much  briefer, although  the Regions snould atteff.pt to
 use as r.ucr.  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
 ir.r.eciate  respcr.se.

      Attachment  2 is an abstract cf  a detailed paper :n "Enda-.-
 gerrent Assessments  for Suoerfund Enforcement  Actions', prepared
 ry Tecr.r.ical S.ppcrt Srancr., CESCLA  Enforcement Division,  the
 Cffice 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 prepari-.c  a  handbook on  preparation of  endangerment
 assess re r.ts.

     y.ethodolccies  used for performance  cf such aspects cf the
er.dancerment assessr.er.t as exposure  and  risk assessment should
 be consistent wit-  the  concepts  and  methods  currently  in use ry
 tr.e IFA Cffice of Sesearcr. and Development (ORD).

     Attachment  3 shows how tr.e  various  toxicivy, exposure,  ar.d
 risk evaluations are used to define  the  overall problems and
 hazards 'endange'rr.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 number of sites to sufficiently  demonstrate  an  actual
zr potential imminent  and substantial endar.germ.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;-.-. :.--s Under CSP.CLA (OERR. May  19 = :

     Chapter 1 - Site  Characterizatior.
     Chapter 9 - Remedial Investigation  Report Format

Guidance or. Feasibility Studies  Under CERCLA (OERR,  April  1955^

     Chapter 5 --Evaluate Protection  of  Public Health  Requirere-ts

•ij-dbcc'*. r- Preraratic- of i-.dan-er-.er.t  Assessments  (OWPE  -
     Tecnnxca. S.ppcrt  Branch,  Summer 1985)

-------
      Attachment 4 :s a i:st cf references that car. be used
 preparation cf the e-.:a.-.;e rr.er.t assessment.


 F:-R.M.AT
      The endar.cer-ent assessment generally should follow a
 standard framewsr* as provided in Attachment 5 and use qualitative
 and/or quantitative terns as appropriate.

      The Action Memorandum will normally be considered adequate
 to serve as the enhancement assessment document in support cf a-.
 order under 5136 for an emergency action.

      The endangermer.t assessment document may be the order itself
 (where the order crn-air.s all of the elements of an endangerment
 assessment)  or a separate document.  In deciding whether to
 develop a separate document or to include the elements of the
 endanre—.er.t assess-e-.-. :-. the crder, Regions should consider the
 follcwin; factors:

      1.   Are the responsible parties more likely to consent to
 an order if  the endar.germent 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
 in adversarial settings.

      •
-------
                                -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  cf  the  elements of  an  endangerr.ent assessr.er.t
 as part of the RI/FS.   Regions  should review the RI/FS wOr
-------
                                                             O&.lr * 985'.

                               -9-
Aiiressees:

Regional Administrators.  Reg::-.s I-X
Directors, Environmental Services -'.vision, Regions I-X
Regional Counsels, Regions I-X
Directors, Waste Msnsger.ent Divisions, Regions I, IV, V,
   VI I,  VI11
Director, Emergency and Reneiial Response Division,
   Region II
Director, Kazaficus Waste Management Division, Region III
Directors, Air & waste Management Divisions, Regions II, VI
Director, Toxics & Waste Management Division, Region IX
Director, Hazardc'.s Waste Division, Region X

-------
I.1

IS
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-------
          UNIT  "« \TESENVIRONMENTAL PROTECTION AGENCY
                      WA.MINUTON. O.C. -04»0              OSWER  ft  9829.0


                           DEC 2 3 1995
                                                      O**'Ct 0'
                                             • OUOW4UTI AMDlMinCINCT MMOMSf
MEMORANDUM

SUBJECTt  Policy for Enforcement Actions Against Transporters
          Under CERCLA

FROM:     Gene A. Lucero, Directorfo&A  H',
          Office of Waste Program Enforcement
          Frederick F. Stiehl
          Associate 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
     selected 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 hsve selected the  facility
or site.

-------
                                -2-
     Transporters  involved  at many  Superfund  sites  have  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 involvement 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.  In addition, information related to the
transporters should be obtained through S104(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 CCRCLA 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. (Bowever, 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 1106 or §107 only under the same
circumstance*. . As a matter of policy, CPA will bring action only
•gainst transporters where information is available which indicates
that the transporter ••elected the site or facility.  Bowever, in
the event that information is Inconclusive due to a lack of
cooperation from transporters in providing information, EPA may
bring action againat any transporter to compel full response to
information requests.

-------
to
CO
O)

-------
           UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                       WASHINGTON. O.C. 204«0
                          MAR i 4 ISoo
                                              SOLID MASTE AND IMfMCENCv MCS'ONSt
MEMORANDUM

SUBJECT:  Reoorting  and  Exchanoe of  I-.formation on State Enforcement
          Actio/is  at  National  Priorities  T,ist  Sites
FROM:      J^  Wlns't'on' Porter
           Assistant  Administrator

TO:        Addressees

     Recent develoments  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)
conduct of Remedial  Investigations  (RI), Feasibility Studies  (FS)
and Remedial  Designs (RD).   Furthermore, the  current Suoerfund
rea-jthorization  language  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 leadinci toward private nartv cleanup.
This exoansion of  the program's  funding authorities will inevitably
increase State enforcement actions at NPL  sites.

     As States exnan>1 their  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
keot informed of the progress  and major decisions made  at these
sites.

     CERCLA reauthoritation  will also increase the  amount of
interaction reouired 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.

-------
                                                         •9631.2

                               -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
keeo  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
site  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 more effective  relationship."  The polirv
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 (Oi-.'PE) 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 listina (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 takind 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, OWPC conducted a survey during the recent first quarter
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 I 9831.2
                               -3-
                                      and
                                       *t
would
reouirements that could be addressed
comments you have on collecting this information
be helpful if you could identify what information
collected and exchanced in your Recion.
appreciate any
   It would also
  is routinely
     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 ana V.'aste Management Division, Region 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 .

-------
                                          OSWE?. » 9631.2
STATE-LEAD ENFORCEMENT




    SITES

-------
                                                           OSWLR • 9831.2
     The followina 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)

     6 Enforcement - RI/FS

       - Negotiations (Start/Completion;  Actual)
       - Settlement (Date)
       - 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/Completion;  Actual)
       - Settlement (Date)
       - PRP RD/RA (Start/Completic -; .:. a-inei/Actual)
       - Enforcement Actions — Administrative/Judicial — (Start/
         'Completion; Actual)
       - RD/RA Cost Recovery (Start/Completion;  Planned/Actual)

-------
           Slat*
                           Si
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                                                                                                                                    did
                                                                                                                                                        to KnfnrrvowM
                                                                                                                                                    1*1  11*1
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                                                                                                                                                               . ««*
-------
                                     Sta t e-L*arl° t nlor eevenl Site*  Sui»a
n State
               Sit* Na»a
                                                       t ode Coi»"eni
: N>
7 NJ
7 NJ
7 NJ
? NJ
NJ
NJ
NJ
NJ
Nl
NJ
NJ
NJ
7 NJ
r NJ
7 NJ
7 NJ
2 NJ
7 NJ
7 NJ
r NJ
'7 NJ
? NJ
7 NJ
7 NJ
7 NJ
7 NJ
7 NJ
7 NJ
7 NJ
7 NT
7 NT
7 NT
7 NT
7 NT
7 NT
7 NT
7 NT
7 NT
7 NT
•f NT
7 NT
7 NT
/ N»
/ NT
•f NT
/ r|«
/ HI
.' Ml
;• N»
A*ar tcan Cyana*>d
Brady natai*
Brick •oMn*Kie> Landfill
CPS Mad icon
C -e«»ol
Cooper Road
Oia«ond Atkal i
t vOr PK| 1 1 ip*
Fair l avn Ue I l f i a l d
F Or t Oil
Hercuia*
Hopk in* fmrm
{•par lal Oil
JIS Land! il 1
Jackaon toMncKtp Landl i 1 l
LF t Development
Honroe foMnchip Landfill
PjP Landf i i t
Pi jack Far«*
Radiation lecnnolo^y
Sayrev. 1 la Landl i 1 1
SH • a 1 da 1 1 oy
Spanca Far*
Unl var*al Oi 1
Uppar Oaarfiald Landfill
VentrOn
Vmaland St . School
ill l*On Fa»«
Uoodland Rt 537
Woodland R1 77
Anchor C*aa> icat -Roc o Polymer
JoHnatOMn Landfill
«en*ark la>tiie
Liberty InduVlrial Fmi»^inq
LudiOM Sand & G»avei
Hrrcury Pe t • n 1 n^
Nrpera C^eaical
ttirl Rrtkpa^e
Snivmt Sa««e* %
vr \ t A i U» l l fc •'
Vtl 1 nr v I »n|l 1 . ' 1 ||i AS ' •* 1 r 1 1 • t r 1
B.E
B.E
H
F
B
F
B.E
A
B
p
O.E
A
A
f
r
r
B.C
F
U
B
A
B.C
C
B
B
B
AO
AO
AO
AO
»O
Del
AO
AO-
AO
3_
p
Nr«i
All
AO-
LF
P'l
Uni
AO

AO
lor PI/FS 1 Pp. PA dratted - PCPA lead
tOr PI /F S * 1 qnvrl
lor PI /I S * «t- rrl
conte«ted. Ill 1' in court
tor PI /l S t • qned
i * t c and i dai *
• I qnrd to. MI/FS - rrmniv «e 1 re t I On uPCO*tn*
69 NJIJIP tundrd randnlale
P| /r S %i^nr«l
im t •» A.*»A«^Mnl ^ i ^r\m ft In* 01/TC t f PA f1C"p tt nn|||
'•I ly •qrer*^n| vi^nvo 'O* wifr^itcr*<.Ul.r^.fc IIOUF
OttaliOti* unqoinq tor • upp 1 r nr n 1 a 1 PI.FS'PU.VA
t,f PI/FS candidate, d. OP drad date I/ il
t,t PI /I S
be i n^ cloved- GU dec ont »m < nai ed under jud or de-
pr opttvrd inidvr N.M'IIIS per *il
late* el AU tor «onilO'*nq and liner in*ellatiOr>
tor PI/FS PO. PA tiqnrd. delict candidate

lor PO. PA ci^ned
ACO vijned H 1 /F S
AO-
AO
AO
AO
AO
AO
fc-» PI/FS
»>qn»d PI/FS » cleanup
lor PO. PA *i«rent concluded
• ivned tor PI /i S
                                                       O
                                                       O
                                                       O
                                                       A
                                                       B
                                                       n
                                                       n
                                                       u
                                                       u
                                                       B
                                                       B
                                                       R
                                                       n
                                                       n
                                                       A
MOU  *i*ned  MitK Oept   o» Hu-an Service*
AO-fc"* PI/FS candidate, drop  dead date 3/31
A0-fc«» PI/IS
AO-fc"? PI/FS
Negotiation* onqotnf)
CO.cOBpany  bankrupt EPA Mill  probably a**u»e
Negotiation* o n 9 o i n q
Negotiation* on*om*
Or der • MOr k
Ne^Ot tat ion* on*o i n«i
Negotiation* nr»qoit> >l*r  «iqjnril> MO. I  •
U. drr * i qnnl
O. ilr>  «il ial
                                                                             I ir> i
                                                                       nns  Ill-Til'
                                                                                                                  fat-
                                                                                                                    I >
                                                                   nn
                                                                   .— .At  at/ft

                                                                   •rlllewnt K

                                                                                                                         lit. •*  n^tl
                                                                                                                           VMVItl •« t tlWI

-------
                                    bt*tr-Lr«d  Kn»o«r»»en»  Site* Su»-»<
  State
              Sit* Na«a
                                                     Cod*  Co»«»m
J OE    N»M Ca*tl*
J DC    N»» Cacti* Steal
9 PA    ABM Uad«
J PA    BrodKaad Craak
} PA    9'OHfi'* Bat tar? B'Vatin?  Sil»
J PA    Cantra Countr K»pon»
1 I'A    CA    Mr amc* Landfill
1 PA    Hun««r»tOMn Ro«d Sit*
.1 "A    K iab*r ton
3 >'A    t • mdan* Oump
1 PA    Lo. d S»>0»* LandlHI
J PA    Malu«rf. ICE
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      •
      5       LMTED STATES ENVIRONMENTAL PROTECTION AGENCY
     /-                     WASHINGTON. D.C. 20460
                                                          9832.8
                             MAY 2 3 1986
                                                         omri or t
                                                           ANOCOMF^I«N;
                                                            MOMTO»I>>C
MEMORANDUM
SUBJECT:  Raised Hazardous; Waste Bankruptcy Guidance
FROM:   /^RTclTarJrR. Mays/
          ^Acting Assistant_ Administrator for
            Enforcement arTd Compliance Monitoring
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
for Documenting Costs for CERCLA $107 Actions," January 30, 198S.
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;
and briefly describes new enforcement theories which have been
asserted by the Agency in recent pleadings.

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BANKR'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 S5,000
              by  filing a  simple  proof of claim as a
              general  unsecured creditor
      Filing a proof of claim is a relatively simple and straight-
forward natter which may  be  appropriate when 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 I/ for a snail distribution to the
I/ Determining the extent of the a,,  .3 in the estate can be
~  based on the schedule of assets »*t out in the bankruptcy
petition, the extent of assets and claims 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 tr,£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 is clear £/.  As-

a general rule, a proof of claim should be filed in cases where

EPA does not anticipate that an objection will be raiaed by the

creditors or the estate and where the filing of a proof of claim

will lead to a recovery of at least $5,000 J/.  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 likelv to recover at least 820.000 of
              response costs through a more complex bankruptcy
                 Tm
              respc
              TTTir
              •^•^••^MMM^M

     As a general rule, prospective referrals of complex

bankruptcy actions (such as a request for an administrative

expense priority) that may lead to recovery of less.than S20.000

are discouraged.
21  Under Section 502(a) of the Bankruptcy Act a claim is deemed
~"   allowed unless oblected to.  Thus, filing a proof of claim,  by
itaelf, will often not lead to the type of extensive litigation
that has characterised many of the Agency's bankruptcy cases so  far,

3/  If costly obstacles or significant challenges at aoae point
~~   do in fact loom over EPA'a proof of claim, the Agency can
always withdraw its claim as a matter 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, subject 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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                               - *  -                     9832,8
              «
     Assuming a  recovery  of  S20.000 or more, the Region should
 set  out  the  extent of  the assets in the debtor's estate, the
 number 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 1107 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 say contemplate
using the bankruptcy courts as an obvious ahield from potential
Superfund liability to the government ^/.  In these eases, the
LI  The government ha* 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 (Ho. 85-01951 Bankr. N.D. Ohio) the Bankruptcy
Court under rule 707(a) dismissed the petition in bankruptcy
citing In re Charles Ceorte Und Reclamation Trust. 30 B.R.  918
(Bankr. C.D. Mass. 1983) which involved a aham bankruptcy filing
in an attempt to avoid Superfund liability.

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9832.8                          '    '
   Region  should attempt  to estimate the  extent  to which the costs
   of litigation may  be recoverable.
   A.  Equitable treatrent  of all  responsible parties
        In some  circumstances the  Region  may wish to refer a case
   against a bankrupt party in the interest of equity and fair
   treatment of  all parties.   For  example, it nay 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 $J or where there are tactical
   litigation issues  relating to other actions in which the Agency  -.
   IB involved ^/.
   5/   There nay be eases  where  even  though the potential recovery
   *~   is  snail, there is  good opportunity to develop the law in
   the area of environmental  bankruptcy litigation.  Moreover,
   cases where the Agency's claim it  snail nay present the best
   factual situations  for  developing  our  legal arguments.  For
   example, courts nay be  nore willing to grant an administrative
   expense priority when the  size of  EPA's claim Is snail and will
   not keep other administrative clains fron being paid.
   6/   For example,  filing a  proof of clain nay be a useful nechanism
   ~   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 « 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 nay have against the debtor.
SETTLEMENT VITP BANKRUPT PARTIES UNDER CERCLA
     The Agency's settlement policy 2J states that it nay be
appropriate for the Regions to enter into negotiations with bank*
rupt PRPs even though an offer may not represent a substantial   '  ,
portion of the costs of cleanup.  The policy further states-that
the Regions should avoid becoming involved in bankruptcy proceedings
II  "Interim Hazardous Waste Settlement Policy" Vol. 50, No. 2&
    Federal Register (February 5, 1985) 5034-5044.  See discussion
at ITIManagement Guidelines for Negotiation, claims in bankruptcy
Id. at 5036.

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                              - 7 -                      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. Hetate Asbestos Corp. ct 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
 1udRir>ent jointly and severally in the District Court proceeding
 in settlement of claims against the bankrupt parties.  In this
 case, due to the extremely limited assets of the bankrupt
 individuals,  it is doubtful that the United States will recover
 a substantial portion of the $7 million.  This fora of settlement
 (i.e., a confession of liability and Judgment) is only encouraged
 in a Chapter 11 reorganization action where a specific provision
 for enforcement of the judgment it set out in the confirmed plan
of reorganization. £/
8/  Unless otherwise provided for In the plan of reorganization,
~   the confirmation of the plan discharges the debtor from
all debts arising before the date of confirmation, 11 U.S.C.
I1141(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 debts from the debtor or the
property of the debtor.

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                              - 8 -                      9832,8

          2.  Vritten agreement with trustee and other creditors
              regarding satisfaction of claim with appropriate
              reservations
      It  is also possible for the Agency to 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 Che 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
che mortgage holder would split Che 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 Che Eastern District of North Carolina,
the Agency is considering entering into a similar arrangement.
The dfbtor-in-possession has submitted a liquidation plan of
reorganization in which che debtor agrees Co retain title to che
contaminated property during the EPA cleanup.  When che cleanup
is completed, che debtor will sell Che property.  The proceeds
vill  go  first to cover adminiscracive expenses involved in che
•ale  and thtn co EPA for reimbursement of response costs.  EPA
has requested that language be included in the plan which pro-
Cects che righc of EPA Co recovtr againsc che debtor's insurance
companies.

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                              - 9 -
9832,8
          3.  Agreerent with trustee regarding pro rata
              distribution of assets'
     Pending a final accounting, EPA may agree with the trustee
to a pro-rata payment of our claim in bankruptcy.  In In re
Crystal Checical Corpan?. 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 imaediate payment of funds
for the ongoing cleanup.
          4.  Settlements contained in the reorganization plan
     A Chapter 11 reorganization plan is a 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 86-00843
(Bankr. W.D. Mich.), the Second Amended Plan of Reorganization,
which was confirmed by the court, Included, at the government's
insistence, provisions relating to preserving claims against
liability insurers and provision! relating to restrictions on
transfer of contaminated property.  Other appropriate provisions
in such plans night be provision* on access to property and
retention of records.  The Agency should insist on this type  of
provision in cases where a plan cannot be confined without our
concurrence.

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                              - 10 -
                                                       9832,8
         5. Settlement 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. W.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 dales.  FPA, the State and the two groups have
filed multi-million dollar claims.  We are presently finalizing
a settlement aTong 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 dar.aged by the same activities, and will allow us to
devote our full resources to pursuing a cost 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 vill be flexible in
reviewing these settlements, it ia important chat the Regions
consult with Headquarters and the Department of Justice before
entering into final negotiations vith a bankrupt party.  An
abbreviated referral of the bankruptcy aettlement agreement is
acceptable.

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                              - 11
                                                      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 (19851,
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.  Automatic Stays
     Several courts have adopted the Agency's interpretation
that the automatic stay provision cf 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 held that actions taken  to
•rectify harmful environmental hazards* were an obvious
exercise of the State'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. MaeKay t  Sons Inc.,

-------
                                    "                   9632,8
    al. .  Uo. 65-C-6925 (N.D. 11).. Jan. 17, 1986).  In the  McKav
 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
 ISSUP 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
 53008. CWA  5S301 and 309.  and CERCLA 1106.   The Court's decision
 in the ILCO case stated clearly that the CERCLA $106 claims were
 exempt from the automatic  stay because the government's complaint,
 which sought a  cr>urt order compelling ILCO to remedy environmental
 harm, constituted an equitable action to prevent  future harm,
 rather than an  action to enforce a money judgment.   Recognizing
 that the debtor would have co expend funds in order  to satisfy
..the  requested mandatory relief, the Court indicated  chat
                                                                •
 compliance  with environmental laws is of greacer  importance than.
 the  rifchts  of the credieors.   The ILCO decision cites  Penn Terra.
 733  F.2d 277 and Kovaes  in support.   See also.  In che  Matter of
 Hildftnan Indus.. Inc. (Btnkr. N.D. N.J.  Dec.  17,  1984)  (dloxin
 sampling taken  purauant  to an administrative  order falls  within
 che  enforcement of Che  police or regulatory  powers of  a
 governmental unit).   But see,  In re Thomas Solvent Co., Bankr.

-------
                                                         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.. et al.. v. United States
 Environmental  Protection  Agency and Ralph V. Siskind,
 No. P5-793 (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; and 6) 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 Che Bankruptcy Court, in .In
 the Matter of  Commonwea1th Oil Refining Co.. Inc.,  Offieal
 Committee of Unsecured Creditors and the Indentured Trustee v.
 United States  Environmental Protection Agency. No.  SA 85-CA-20A5
 (W.D. Texas, Nov. 5, 1985). Che court held chat an EPA enforce-
ment  action  co require a  debcor Co comply with RCRA'a Part B
 requirements was  an exercise of Che Agency's regulatory power,

-------
                              - 14 -
                                                          9832  8
and thus excepted from the automatic stay under 11  U.S.C.        '
S362(b)(4).  The court stated that the expense which the  debtor
will incur to comply 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 sone authority to suggest that the collection
of a civil administrative fine or penalty it 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 Midlentic 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 it 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. Id. at n.9.  The Court left

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                               -  15  -
       v,        ,     ,   „   u                                9832,8
 op*n  the  question  of  whether  trustees oust  comply with health
 and safety lavs  no matter how "onerous" their provisions.  However,
 the Court Hid  eive so:i>e  clue  when It described security fencing,
 drainage  and diking repairs,  sealing deteriorating tanks, and
 removing  explosive agents as  "relatively minor steps."  _Id_ at
 n.3.
      Prior to  the  Supreme Court'o 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  Iron and M»tel.  13 P.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. Kovaes. 105 S. Ct. 705
 (HR5) the Court stated  that  • pr«-petition Injunction for cleanup'
 of the Chem Dyne hazardous waste alt* Is •  dischargeable debt
 where  the debtor had  been dispossessed of the property and hence
 the State vac-seeking nothing  more  than payment of money for
 the cltanup.   However, the Kovacs decision noted that an
 affirmative injunction not to  bring waste to a site (which would
 not Involve an expenditure of  money) was not a disehargeable
 debt.  The Agency  has taken the position that the Kovaes 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.
Kovacs 105 S.Ct. at 711-712.
     The Supreme Court's decision in Midlantic Bank nay be read
to support the holding in T.P. Long that CERCLA liabilities
of the estate are administrative expenses.  Although the Court
attempted to reserve the administrative expenses question, the

-------
                                                           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. S503(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 Geuder Paesehe t Frey Co., (Bankr. E.D. Wise.)
(cleanup costs are administrative expenses); In re Laurinberq
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 ••tat*)} «nd In re Wall Tube and Metal Products
Co., No. 3-84-00278 (Bankr. E.D. Tenn. Jan. 17, 1986), appeal
pending (environmental response co«t« 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 from bankrupt parties

-------
                                                          9832*8
is the case In re Charlesbark 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 $107).
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 Stats Isw until notice  of
lien is filed.  The Rouse version slso establishes a maritime
lien applicable to vessels.

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                              - 19 -
                                                        9832,8
FNTOPCEMFNT 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 may 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,
nay be referred to the federal district court.  Pursuant to
11 U.S.C. Il57(d) the district court is required to withdraw
a natter fron bankruptcy court when its resolution will involve
consideration of the bankruptcy code and other federal statutes
regulating organisations or activities affecting interstate
Connerce.
     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 fron the bankruptcy court of, claims
asserted by F.PA under CERCUV and other environnental statutes.

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                               -  20  -                     9832*8
The court  found  that  CERCLA  and  the other environmental statutes
relied on  were "tlearly.. .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. 11U1(d)(1)(A).  The definition
of a pre-petition debt .include* any action where a claim or
where a potential claim existed before the debtor filed for
bankruptcy (i.e, where a creditor could have sued or could have
filed a proof of claim).  Discharges are available in individual
bankrupteiea (f727(b)) and in  Chapter 11 reorganization*
($1U1(d)(1) (A)'.  They are not available in corporate or

-------
                              - 21 -                    9832,8

partnership Chapter 7 proceedings, or in Chapter 11 liquidations
(51141 (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 may 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-confirmation claims 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 may 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 ia due to the fact that the debtor
docs not  survive the bankruptcy and therefore recovery during
liquidation of the estate, as a pre-petition creditor, is  EPA's
only chance for recovery.
     Second, if the debtor is an individual, or corporation or
partnership under Chaptar 11 Reorganisation, the Agency aay wish
to take the position that even if the debt is a pre-petition

-------
                               - 22  -
9832,8
debt, EPA's claim  is not subject to discharge because It falls
under one of the stated exceptions to discharge set out in 11
U.S.C. §523(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(«)(7), or for
willful or malicious injury to property, 11  U.S.C. I523(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. S523(a).
CONCLUSION
     Future CERCLA bankruptcy referrals will be carefully
reviewed by Headquarters to determine if the action merits
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's current
settlement policy, the Region is given greater flexibility and
authority to settle 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
an enforcement action against a bankrupt party.

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                              -  23
9832.6
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 oy office

(FTS 382-2P45).

cc:  F. Henry Habicht  II
     David T. Buente
     Gene A. Lucero

-------
(
&)
UNITED STATES ENVIRONMENTAL PROTECTION AGEr

            WASHINGTON. D.C.  20460
                                                        Q ft •» ^
                                                        9832 '5
                          JUN 2 7 32
MEMORANDUM

SUBJECT
FROM:
 Policy on Recovering Indirect Costs
 in CERCLA Section 107iCost Recovery Actions
                      ^'
 Frederick F. Stiehl
 Associate Enforcemen
TO
 John J. Stanton, Director
 CERCLA Enforcement Divisi

 Regional Counsels
 Regional Waste Management" Division Directors
     This memorandum is a clarification of the Agency's
policy regarding the recovery of indirect costs in CERCLA
cost recovery actions.  Previous memoranda from the Financial
Management Division transmitting yearly indirect cost
multipliers have indicated that indirect costs oust be claimed
in all cost recovery actions ("Recovering Indirect Costs
Related to Superfund Site Cleanup," Vincette Goerl to Regional
Financial Management Officers/Regions I - X, December 12, 1985;
"Superfund Indirect Cost Manual for Cost Recovery Purposes -
FY 1983 through FY 1986," Morgan Kinghorn, March 1986).  However,
to avoid disruption of ongoing settlement negotiations with
PRPs in existing CERCLA Section 107 actions, and to avoid
placing the Agency in an apparently inequitable posture before
the court adjudicating the claim, it nay not be appropriate to
seek indirect costs in all on-going cases.

     The decision whether or not co seek indirect costs in
existing cases will be made by the Regions after consultation
with DOJ and with the concurrence of OECM and OWPE.  The
decision, which will be made on a case-by-case basis, will
depend upon whether EPA haa disclosed the overall cost figure
in either negotiations or formal discovery and whether that
figure has been the basis of the parties' settlement
negotiations.  For those cases where no negotiations have
occurred (and therefore the parties have not relied upon a
specific cost figure), but a cost figure has been produced
during discovery, the litigation team ahould supplement the
pertinent discovery and seek indirect costs so long as the

-------
                                                          9832.5
corr.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 the 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
              -  ------   WAJHINOTUN. U.L.
                             29 887
                                                 OSVER Olrtccive 9833.3
                                                        OMICf Of
                                               •OUO WACTf AMD IMIHOINCV MIS*
 MEMORANDUM
 SUBJECT
 FROM
TO:
Administrative Records for Decisions on Selection of
CERCLA Response Actions

Gene A. Lucero, Director
Office of Waste Programs

Henry L. Longest II, Director
Office of Emergency and Remedia

Addressees
                                               nse  (WB-548)
     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 Region* 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 cement 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«cciv« 983
                             -2-


 NPL listing docket.   A separate tnfmnranriun concerning seetfng up
-atte fllesr aTta~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 Funds
 for records management in FY '87, some of which is still available.
 Additional funds averaging about SIOO.OOO per Region have been
 earmarked thjls 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 (RODs) 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.                       j

      The Regions should also list sites which presently have    f
 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 38Z-4H3H.

      The Agency plans to propose regulations establishing proce-
 dures for the administrative records. These administrative
 record regulations are expected to be issued In con1unction 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 vlth representatives from the Regions  on
 these regulations,.

      During the court* of developing these regulations, numerous
 policy iaawes have surfaced.  These Issues are currently being
 addressed tt headquarters.  This memorandum will be followed
 shortly by e memorandum addressing Issues related to the admini-
 strative record requirements, in greater detail.  The upcoming
 memorandum will summarise the Agency's current direction on these
 administrative record issues.  We will also be addressing the
 administrative record requirements in the Superfund Record  of
 Decision Workshops In June and July of 1987, emphasizing information
 on FY '87 RODs.

-------
                              -3-
                                                    OSWER Dir.ccivt 9833.3
      Attached  is  a  list  of items which_, if generated for a
 particular  site,  should  be__inciud«d ih_j;hit nrlmin-jstrat ivt IBLUIJ.—""
 Plea**- HOte that1  information  upon which the decision on selection
 of  response action  is  based must be included in the record.

      The A9N»cy will be  refining this list.   The upcoming memorandum
 will  go infii 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 Holpe of OWPE at FTS 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, Reg.  u
    Directors, Hazardous waste Management Division, Reg. in, yz
    Director,  Toxics and Waste Management Division, Reg. II
    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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<0
00

-------
          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                           FEB 12
                                  OSWER Directive Number 9835.4
MEMORANDUM
SUBJECT:
FROM:
           Interim Guidance: Streamlining the CERCLA
           Settlement Decision Process
                                    Emergency Response
TO:
          J. Winston Porter
          Assistant Administrator
          Office of Solid Waste -
              ^	V.  VC~- -».
          Thomas L. Adams,  Jr.
          Assistant Administrator fi\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

     (Jnder CERCLA, EPA's 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 the 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 $106 Judicial Authority-Short
Term Strategy", dated July 8, 1986).  The office of Solid Waste
and Emergency Response (OSWER) has recently amended aspects of
the Supeffund" 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 time 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 PR 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 rinimizing 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 pa-rties
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 EPA's 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 not 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 coming 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
contributions 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's approach to  it and  the information we  have that may
 bear  on allocation or  other  pertinent matters.
•
      The  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/PS)) 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 must 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;

     8   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 reviews

     •   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
negotiation team are to:

     0  ensure that PPP searches, notice and information exchange
        are properly scheduled and completed;

     0  devel-op a comprehensive negotiations strategy in advance
        of negotiations;

     0  develop and share draft settlement documents, includina
        technical scopes of work, in advance of negotiations;

     0  conduct negotiations; and

     0  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 OEC« con-
currence continues to be reauired 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 mad*
available to you in the coming months.

     At the same time such guidance is being prepared,'Headauarters
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 Regional 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 requirements.  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, assuring effective settlements consistent with
applicable Guidance and'developing additional guidance as necessary.
That role 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, OWPC.  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 to provide overall policy direction on
settlement concepts, but will also be available to resolve major
policy issues specific to sites 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-

 Dcadline 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 tnoratoria 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 negotiations may 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 for 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-

an d should sec out succinctly:  1) the length of extension re-
quested; 2) status of negotiations (issues resolved and those
unresolved); 3) justification for extension; and &) actions to be
taken in the event chat 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 co che PRPs early in any discussions.
Moreover, che schedule for negotiations, so long as it respects
these deadlines, is always open to adluscment 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 che special notice
procedures, and we anticipate circulating chis guidance for
comment within the next monch.

     One of che lessons learned as a resulc of che limited April-
May 1986 funding during che Superfund slowdown was that there are
benefits derived by having several settlements which are on a
parallel and firm schedule for final resolution.  Hoc only did we
find chac firm schedules tend to force issues co resolution, hire
ic proved co facilitate management review in that sices wich
similar issues could be dealc wich concurrently.  In order to
excend chis "clustering" effect, OSWER is considering including
in che FY 88 Strategic Planning and Management System (SPMS)
commicments a target for completion of RD/RA negoelaciotTS.

Approach for RI/FS Negociations

     In light of the delegation of RI/FS decisions, ouch of che
above process is not relevane for RI/FS negotiations.  The Agency
continues eo encourage PRP conduct of RI/FS In appropriate
circumstances (see Thomas/ Price memorandun "Participation of
Potentially Reeponaible 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  davs.
However, extension of negociations beyond an additional 30  davs
should be authorized by the Regional Administrator only in

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                                        OSWER Directive Number 9835
                                -11-
liaiced cases.  The points made above in Negotiation Preparation
are equally applicable to RI/FS negotiations, with the exception
that negotiacion 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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19920
Federal Register / Vol. 52. No.  102 / Thursday. May 28. 1987 / Notices
 PRPs within 30 days of receipt of the
 notice.
   Then an certain situations when an
 NBAR may be particularly appropriate.
 For example, in a case that involves
 federal agencies as PRPs. preparing an
 NBAR in order to ascertain the
 percentage of federal agency
 responsibility is likely to promote
 settlement even  though e significant
 percentage of PRPs did not request it
 Similarly, if a state or municipality is
 involved at a site as a PRP. NBAR
 preparation may be deemed likely to
 promote settlement. Or. it might be
 appropriate to prepare an NBAR in a
 case with a large number of PRPs
 including, perhaps, a sizeable de
 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 probsbly not be prepared.
 For example, it may be dear very early
 in the process thst there is insufficient
 information available on which to base
 an NBAR. 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 echieved without use of
 NBAR procedures. There may also be
 cases when 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, inducing any
 state enforcement lead site, is a decision
 within EPA's discretion and will depend
.on the particular circumstsnces of each
 case. The decision whether to prepare
 an NBAR at any particular site rests
 with the Regional Administrator.
   IF EPA deddes to prepare an NBAR. it
 will notify  PRPs of that fact in writing as
 early as is  feasible. An NBAR
 notification should specify that the
 decision to prepare an NBAR is
 discretionary ••«i if contingent at a
 mjfltm^m upon *h? availability of
 sufficient data.
 IIL How To Prepare an N1AR
   The purpose of the NBAR is to
 promote expedited settlement thus
 miniiniting ttintertltm costs: an NBAR
 must be nondutied la a fair, efficient

 end other practical reasons, the
 allocation process presented hen Is
 based primarily upon volume and the
 settlement criteria,
   EPA considered and refected models
 based on toxidty because of the
 complexity of their application and the
 lack of agreement among the scientific
 community about degrees of. toxidty of
                   •padfle K««afAin«
                                                                 •tut
                                      synergisttc effects. Also, toxidty is
                                      usually causally related to the coat of
                                      cleanup for only a few substances (e.g,
                                      PCBs* dioxin).
                                        SOIL the allocation process presented
                                      ban is not intended to be exclusive.
                                      There will, of course, be eases where
                                      other factors, such as toxidty or
                                      mobility, must take priority in the
                                      interests of fairness to the parties. If a
                                      Region prefers to use another allocation
                                             , it should confer with the
                                      Director of the Office of Waste
                                      Programs Enforcement prior to such use.
                                        Activities involved in «^««'"^«g en
                                      NBAR fall into two major categories:
                                      Information i*flll*Trt*>ft •«««< assessment
                                      ^i*^ allocation*

                                      Information Collection and Assessment
                                        While aggressive'infomation
                                      collection efforts occur in every case.
                                      additional information may be
                                      necessary for NBAR purposes.
                                      Additions! 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 person's ability to
                                      pay and about the nature and quantity
                                      of hazardous substances generated.
                                      treated stored, or disposed of by that
                                      person. These authorities may be used
                                      to gather data for an NBAR.
                                        Subpoena of witnesses, authorized by
                                      section 122 (e)(3HB). may be used in
                                      some cases as pan of the information
                                      collection process. Considerable case-
                                      specific judgment must be exercised
                                      about the extent to which the subpoena
                                      authority will be used due to its
                                      resource-intensive nature.
                                        Information being collected must be
                                      reviewed by technical and legal staff as
                                      it is received so  that pertinent
                                      information may be culled and gaps and
                                      inconsistencies Identified. Collection
                                      completed by the end of the RL so that
                                      the allocation on be completed by the
                                      end of the PS.
                                        On the W t** of information collection

                                      determine the waste types and volumes
                                      for each PRP. Thto volumetric ranking is
                                      part of the information that must be
                                      provided wtth a pre cleanup negotiation
                                      special notice letter.
                                        The legislative history of section 122
                                      states that the allocation Itself should be
                                      made by federal employee*. Consultants
                                      or states with cooperative agreements
process. The allocation phase of aa
NBAR can be moat effectively
undertaken by the same technical and
legal nenoael who directed the
faubmatioB coQectton *"^ assessment
efforts.

Allocation

  In most cases, waste at a site is
           and therefore iadivisible.
                                                         commingled waste cases, the first step
                                                         a the allocation phase of aa NBAR is
                                                         allocate 100 percent of responsibility
                                                         among generators, based on the volum
                                                         each contributed. The product of this
                                                         step will often differ from the volumetr
                                                                      d with special notice
                                                         letters
      Moaase any waste that is
                                                         attributable to unknown parties is
                                                         allocated to known parties in proportic
                                                         to their volume.
                                                          In • limited number of cases, it is
                                                         possible to link particular remedial
                                                         activities with specific waste types am
                                                         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 can be attributed  to PC
                                                         contributors. When it is possible to dc
                                                         so. waste types and volumes that
                                                         aecessitate particular remedial activiti
                                                         will be fully attributed to the
                                                         appropriate contributors.
                                                          The second step In tff^ allocation
                                                         phase of the NBAR process involves
                                                         adjustments based en consideration of
                                                         the settlement criteria. Any percentage
                                                         allocated to a defunct or impecunious
                                                         parry should be reallocated. Where
                                                         appropriate, credit may be given  for a;
                                                         PRP contributions to RJ/FS and/or
                                                         removal activities at the site.
                                                          In addition, percentages of
                                                         responsibility should be allocated to
                                                         financially viable owners, operators at
                                                         transporters. How much to allocate to
                                                         each parties Is a case specific detiaten
                                                         baaed upon coasidention of the
                                                             w           r/opentor ndpehtii
                                                         Is e rlgr**""** lector in determining th
                                                         percentage of responsibility to be
                                                         allocated. For example, a commercial
                                                         owner aad/or operator thst managed
                                                         watte badly should receive e higher
                                                         allocation than a passive.
                                                         noncommercial landowner that doesn
                                                         qualify as taaocent under section
                                                         122(|M1MB) of SARA. The relative
                                                         allocation among successive owners
                                                         aad/or operators may  he determined.
                                                         whan all other droomstances an equi
                                                         by the relative length of time each
                                                         owned aad/or operated the site.
                                                         Transporter allocations may be based

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                    FodarsJ Ramjets* / Vol 52.  No. 102 / Thursday. May a. 1987 / Notices^
                                                                                               OSWER
                                                                   »  9839.1
                                                                    1W1U
  DetstMayaiaV.
 rasBA,Nowal.
 Utinmt Adauctttrasor /far Aaesarca eno*
 nt DOC. r-una PIM i-r-er. tu M|
                      of
              (N8AR)
        Environment*! Protection
 Mtacy.
        Request for public comment.
        r. Section l«e)(3) of the
 Supcrfund Amendments and
 Reauthorization Act of 1988 (SARA).
 which amended the Comprehensive
 Environmental Response.
 Compensation, and Liability Act
 (CERCLA). require* the Environmental
 Protection Agency (EPA) to develop
 guideline* for preparing nonbinding
 preliminary allocations of responsibility
 (NBARs). 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 July 27. M87.
 •rtoeiiM. Comments should be
addressed to Debbie Wood. U.S.
Environmental Protection Agency.
Office of Waste Programs Enforcement.
WH-SZ7. .401 M Si. SW.. Washington.
DC 20460.
POM PWrrMKIt SJSPOS1MATIOM COtTTAOrS
Debbie Wood. US. Environmental
Protection Agency. Office of Waste
Programs Enforcement. WH-S2T. 401 M
SL SW. Washington. DC 20460. (202)
382-3002.
          T AST* •SPOMSATMie As
defined in section 122(e)(3)(A) of SARA.
an NBAR is an allocation by EPA among-
potentially responsible parties (PRPs) of
percentage of total response coeta at a
facility. The outpace of NBARs Is to
promote expedited settlement. NBARs
•re not binding oa the government or
PRPK they cannot be admitted M
evidence or reviewed in any judicial
proceeding, indudlnj dttun suit*.
Whether to prepare en NBAR »i any
particular CERCLA site is a decision
within EPA's discretion.
  EPA will consider preparing an NBAR
at a site if It appears that an NBAR may
help to promote settlement SdlL NBARs
will not be routine. In general EPA's
policy is that PRPs should work out
among themselves questions of hew
     etch will pay toward senlemeat at
a ait*.
  Cooatnta may address the overall
approach taken in the interim guidelines
or focus on any aspect of it. EPA
particularly solicits comment oa
appropriate factors  to consider in
determining percentage allocations for
owners, operators* and ti*ansporters.
  The policies and procedures set forth
tn the interim guidelines are guidance to
EPA employees. The interim guidelines
include enforcement ponds* and
internal procedures that are not
appropriate or necessary subjects for
nileiBakmg. Thus, the guidelines do not
constitute ralemaking  by EPA and may
not be raited 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 implementation, and to
gain the benefit of public comment. The
interim guidelines follow:
  Dated: VUy 1ft, 1987.
I m M Thneiii
Administrator.

INTERIM GUIDELINES FOR
PREPARING NONBINDING
PRELIMINARY ALLOCATIONS OF
RESPONSIBILITY
L Introduction
  Section 122(e)(3) of the Superhmd
Amendments and Reauthorization Act
of :aae (SARA). Pub. L NO. 99-499.
which amended the Comprehensive
Environmental Response.
Compensation, and Liability Act of 1980
(CERCLA). 42 U-S.C. 9001 ft see,
requires the Environmental Protection
Agency (EPA) to develop guidelines for
ffnpej^^f nonbindtai preliminary
allocations of iftr*y«'fr'H*y (NBARs).
As defined in section U2UX3MA1. an
NBAR is an allocation by EPA among
potentially responsible parties (PRPs) of
percentages of total response casts at e
facility. SARA authorize} EPA to
provide NBAJU at its discretion. NBARs
in • tool EPA may UM in tppropruu
ceeei to promote remedial Mttlenenu.
  NBARt will allocatt 100 percent of
response casts among PRPs. The
discretion to prepare an NBAR does not
change the goal of the interim CERCLA
settlement policy, published at SO FR
MM (February 5.1985). to achieve 100
percent of-cleanup or coats in
otttlaaent.
  la preparing an NBAR. EPA may
consider such (actors as volume.
toxidty. and mobility of hazardous
substance* contributed to the site by
PRPs, and other settlement criteria
ndaded in the interim settlement policy
(SO FR 5034.5037-8038). The settlement
criteria include strength of evidence
tracing the wastes et a site to PRPs.
ability of PRPs to pay. Utigative risks in
proceeding to trial public interest
considerations, precedential value.
value of obtaining a present sum certain,
inequities and aggravating factors, and
nature of the case that remains after
settlement
  An NBAR is not binding on the
government or PRPs: it cannot be
admitted as evidence or reviewed in any
tudioal proceeding, including dozen
suits. An NBAR is preliminary in the
sense that PRPs are free to adjust the
percentages allocated by EPA among
themselves.
  Should EPA decide to prepare an
NBAR, it will normally be prepared
during the remedial investigation and
feasibility study (Rl/FS). and provided
to PRPs as soon as practicable, but not
later than  completion of the Rl/FS for
the site. The NBAR process will
normally be used only in cases where
the discretionary  special notice
procedures of section I22(e) are
invoked.
  Following presentation of an NBAR  to
PRPs. PRPs have an opportunity to offer
to 'iFM**tTVt or fir*T*f* cleanup. EPA
need consider only substantial offers. A
substantial offer is defined in pan fV of
these guidelines. EPA must provide e
written explanation to PRPs if it rejects
e substantial offer based oa an NBAR.
Under section 122(e)(3HE). the decision
to reject e substantial offer based on an
NBAR is not subject to jutiiael review.
  Section  122(e)(3)(Dl states thet the
costs incurred by EPA in preparing an
NBAR shall be reimbursed by PRPs
whose offer is accepted. If a settlement
offer is not accepted. NBAR preparation
coats an considered response costs
under SARA.
IL When To Use the NBAR
  The NBAR is meant to promote
MtUcmcnt and, tfaut. reduce mnioction
costs. C«nemUy. EPA vn:I consider
NBAR preparation when it appear* that
•a NBAR may Kelp to promote
settlement. EPA will give partieuUr
consideration to preparing en NBAR
whenever a significant percentage of
PRPs at a site request one. What
constitutes a significant percentage is  a
case-specific dettmuaation. Regions
should note the existence of the NBAR
proems in all pre-Rl/FS notice tetters.
and indicate its potential svsilability If
requested by a significant percentage of

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                      Federml Register  / Vol.  52. No.  102 / Thursday.  May 28.  1987 / Notices
                                                                    19921
  00 venae, taking into account
  appropriate considerations such at
  packaging and placement of wait* at a
  •ita. Detailed guidance oa allocation!
  for transporter*, owners, and operator*
  may be prepand at a latar data on tha
  basii of axpehanot undar these interim
  guidelines.
    Again, an NBAR will allocata 100
  percent of retponM costs, bacauia tha
  goal It to achieve 100 percent of cleanup
  or emu in settlement
  IV. Often Baaed oa NBAftS
    Once tha technical and legal
  panonnel complete the NBAR. the
  numerical reaulta will be transmitted in
- writing to PRPs. EPA will not provide a
  detailed explanation for the results, due
  to the enforcement-eensitiv* nature of
  the decisions involved. EPA will provide
  a general explanation of the rationale
  used in preparing the NEAR. Data
  gathered in the information collection
  phase may be made evailable to PRPt.
    EPA  will provide the NBAR results to
  PRPs as early as possible. The sooner
  PRPs receive the results, the more time
  they have to organize among themselves
  and negotiate with EPA on remedy. A
  limited period should be provided for
  PRPs to digest the  NBAR results before
  notice for cleanup negotiations is sent.
    EPA  will attempt to complete  the
  NBAR before selection of a preferred
  remedy and public comment, or at-least
  prior to the Record of Decision (ROD)..
    Special notice under section
  122ie)(2)(A) of SARA will generally be ..
  provided prior to cleanup negotiations in
  cases where an NBAR is used. If within
 .60 days of special notice for cleanup
  negotiations. EPA receives no offer for
  settlement it may proceed as usual with
  action under section 104 or 106 of
  CERCLA- If EPA receives an offer ;hat is
  not e substantial/good faith proposal it
  should  so notify the PRPs before
  proceeding with action undar section
  104 or 106.
    A good faith offer is an offer in writing
  in which PRPs make a showing of their
  qualifications and willingness to
  conduct or finance the major elements
  of the remedy. A substantial offer must
, .meet three criteria. Pint, it must equal or
  exceed the cumulative allocated shares
  of those making the offer. Second, it
  must amount to a predominant portion
  of cleanup coats- 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 days of special
  notice for cleanup. EPA will provide an
  additional 60 day* for negotiation. If an
  agreement for remedial action is
reached it must be embodied in a
consent decree. The State should be
kept apprised of negotiations if it
chooses not to participate. Should
negotiations for settlement baaed on an
NBAR fail a section 106 unilateral order
or civil action may be used to initiate
remedial action. Should EPA proceed
with cleanup under section 104. the
NBAR may still be useful In developing
demand letters for a section 107 cost
recovery action.
  Dt auniaui and mixed funding
settlements, also authorised by section
122. may occur in combination with an
NBAR, Whether EPA wiD accept a
mixed funding or de anniaiit proposal at
an NBAR site will depend on the results
of additional analyses specifically
designed to evaluate such proposals.
  If EPA rejects a  substantial/good faith
offer, it must provide a written
explanation to the PRPs. after
consultation with DOJ and review at
EPA Headquarters. In general rejection
of a substantial offer that is sufficient in
amount is  likely to be  based on failure
to reech agreement on terms and
conditions. After a written explanation
for rejection of a substantial/good faith
offer is sent. EPA may proceed under
section 104 or 106.
(FK Dec 87-12114 FU»d S-»-t7: MS am)
Toxic and Ha
Control* Contractor
       to Confidential Business
AOSMCT*. Environmental Protection
Agency (EPA).
acnoir. Notice. _

smtsuurr 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).
                            r*cr
Edward A. Klein. Director. TSCA
Assistance Office (TS-7M). Office of
Toxic Substances. Environmental
Protection Agency. Room B-WJ. 401 M
Street SW, Washington. DC 20460 (202-
554-1404).

TSCA. EPA must determine whether the
manufacture, processing, distribution in
commerce, use. or disposal of certain
chemical substance* or mixtures may
present an unreasonable risk of injury to
human health or the environment New
chemical substances. La. those not
listed on the TSCA Inventory of
Chemical Substances, an evaluated by
EPA under section S of TSCA. Existing.
chtwic*' substances, listed on the TSCA
Inventory, are evaluated by tha Agency
under sections 4.6.7. and 8 of TSCA.
Section 12 requires a person to report
his or her intent to export certain   . •
chemical substances to foreign
countries.
  In accordance with 40 CFR 2J68(J).
EPA has determined that the following
contractors and subcontractors will
require access to CBI aaeWitted to EPA
under TSCA to successfully perform
work under the contracts described in
the following units of this notice.
L Previously Announced Contract

  As wes announced in the Federal
Register of May 1.1966 fFR 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. 66-02-4231 to February 28.1989.

0. New Coatractors and Subcontractors

  Access to CBI by the contractor! and
subcontractor* described in this section
is being announced for the first time.
EPA is issuing this notice to affected
businesses informing them that EPA
may provide access to TSCA CBI to
these contractor* and subcontractors
under the indicated contracts on s 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—
PENT A Analysis and Design Evaluation.
CRC as a subcontractor, will be
working for the prime contractor.  Boot
Allen and Hamilton. Booz. Allen 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 are PENT A. Molecular
Access System (MACCSJ. and the
Document and Personnel Security
System (DAPSS). Under this contract
CRC personnel will be authorized for

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        i UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
       /                WASHINGTON. DC 20460

                              JUN - 5 1967
                                                           OSVER DIRECTIV

                                                               9829.2
 MEMORANDUM

 SUBJECT:  EntTry  and  Continued Access Under CERCLA

 FROM:     Thomas L.  Adams, Jr.     Vj          \    V 0
          Assistant  Administrator "^rVjcxM^^  V\ . v>» c> e* *--*\

 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. II   In short, the policy recommends
 that EPA should,  in  the first Instance, seek to obtain access
 through consent.  Entry on consent is preferable across Che full
 range of onsite  activities.  If content is denied, EPA should
use judicial process o.r an administrative order co 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 sees 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 co private property co conduce investiga-
tions, studies, and cleanups.  The Superfund Amendments and
Reauthorization Act of 1986  (SARA) explicitly grants EPA 21 the
authority to enter property  for each of these purposes.  Section
104(e)(1) provides that entry if permitted for "determining che
need for response, or choosing or caking Any res pome action
under  this  title, or otherwise enforcing che provision* of this
title."

     SARA also establishes A standard for when access aay be
sought and defines what property may bf entered.  EPA may exercise
its entry authority "if there is a reasonable basis to believe
there may be a release or threat of a release of a hazardous
substance or pollutant or contaminant."  i 104(e)(1).  SARA,
however, does not require that there be a release or threatened
release on the property to be entered. ^/  Places and properties
subject to entry under Section 104(e) include any place any
hazardous substance may be or has been generated, stored, treated,
disposed of, or transported  from; any place a hazardous substanct
has or may have been released; any place which is or aay be
threatened by the release of a hazardous substance; or any place
where entry is needed to determine the need for response or the
appropriate response, or to effectuate a response action under
CERCLA.  S 10A(e)(3).  EPA is also authorized to enter any place
or property adjacent to the  places and properties described in
the previous sentence.  I 104(e)(1).

     EPA is granted explicit power to enforce its entry authority
in Section 104(e)(5).  Under that provision EPA may either issue
an administrative order directing compliance with an entry request
or proceed immediately to federal district court for injunctive
relief.  Orders may be issued where consent to entry 1* denied.
Prior to the effective date  of the order, EPA must provide such
notice and opportunity for consultation aa is reasonably appro-
priate under the circumstances.  If EPA Issues an order, the
order can ba enforced in court.  Where there is a "reasonable
basis to believe there may be a relaaae or threat of a release of
a hazardonaismbstance or pollutant or contaainant," courts are
instructed tav enforce an EPA. request or order unless the 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  (1), 52 Fad. Rag. 1923 (1987).

3/  The House Energy and Commerce  bill at one point contained
    this limitation.  H.R. Rep. No. 99-253 Part 1, 99th Cong..  1st
Sess.. 158 (1985).  This limitation, however, was dropped prior to
introduction of the bill for floor debate.  See H.R. 2817. 99th
Cong., 1st Sess., 131 Cong. Rec. H10857  (DecenTer 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."
 f  104(«)(5).   The legislative  history  makes clear that courts
 should enforce an EPA demand  or-order  for entry if EPA's binding
 that  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) (Statement of Rep. Glickman).
 See United  States v.  Standard  Equipment.  Inc.. No. C83-252M (W.D.
 Wash. November 3, 1986).  In  addition, a  penalty not to exceed
 525,000/day may be assessed by the court  for  failure to comply
 with  an EPA order or  the provisions  of subsection (e).

      Finally.  Section 104(e)(6)  contains  a savings provision
 which preserves EPA's power to secure  access  in "any lawful
 manner."  This broad  savings  provision is significant coming
 in the wake of the Supreme  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 may  be  used in  the course of
          executing the statutory mission.

          .  .  .  Regulatory  or  enforcement authority
          generally carries with  it  all  the nodes of
          inquiry and investigation  traditionally employed
          or useful to execute the authority  granted.

 Dow Chemical Co.  v. United  States. 90  L.Ed. 2d 226, 23* (1986). 4>
 One lawful  means  of gaining access -covered by chis paragraph is ~
 use of Judicially-issued warrants.   See  S. Rep. No. 99-11. 99th
 Conf.  lat Sess. 26 (1985).     .

      In numerous  instances  prior to  the  passage of SARA, EPA
 obtained court rulings affirming  its authority to enter property
 to conduct  CIRCLA activities.  5/   Following enactment of SARA.
4/ See alto, Mobil  Oil  Corp.  v.  EPA.  716  F.2d  1187,  1189  (7th
"  tTr.lTO).  cart,  denied..466T7S.  980 (1984)  (EPA authority
to sample  affluent  under  Section 308  of  the Clean Water Act
broadly construed); CEP*.  Inc. v.  EPA, 743 F.2d  1092 (7th.Cir.
1984). cert, denied.  471  U.S.  1015TT985).

5/ United  States v. Pepper Steel and  Alloy.  Inc.. No. 83-1717-
~  CIV-EPS (3.D. Fla. October 10.  1966);  Bunker  Limited Partnership
v. United  States. No. 85-3133 (D.  Idaho  October  21.  1985); Uniteo
States v.  coieman Evans Uood  Preserving  Co., No.  85-211-CIV-J-lfe
CM.D. Fla.  June 10. J.S65);  Un-itec  States  v.' Baird &  MeCuire
Co.  No. 83-3002-Y  (D.'Mass.  hay 2,  1965); United States  v.  Unitee
Nuclear Cor?..  22 ERC 1791,  15 ELR 20443  (D.K.M.  April  18, 1965;.

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                              - 4 -
several courts have ordered siceowners co permit EPA access.
United States v. Long. No. C-l-87-167  (S.D. Ohio May 13, 1987)-
united States v. Dickerson. No. 8^-76-VAL (M.D. Ga. »May 4.  1987);
United States v. Standara Equipment, Inc., No. C83-252M (W.D.
wash. Nov. 3. 1986).  Further, the one adverse ruling on EPA'«
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;

      e 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 bt 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 content alone
may result in a substantial delay if that consent is withdrawn.

     When  cemeent is denied. EPA should seek judicial authori-
zation or  amould issue an administrative order.  If che judicial
route is  choaan, EPA «ay seek an ex parte warrant or a court
order.  Warrants art traditionally granted for short-term entries.
Generally, warrants should not be used when the EPA access will
involve long-tern occupation or highly intrusive activities.
Clearly,  warrants are appropriate for  preliminary aite investiga-
tions.  On the other hand, because of  Che long, involved nature
of remedial actions, acctsa for such projects  ahould be sought
through a  request for a court order.   Neither  removals nor RI/FSs,
however,  can be rigidly matched with a given 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 conduct 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 than 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 104(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
consent:

    Initial Centact.  Prior to visiting a site, EPA personnel £/
    should cfMlder contacting the siteowner to determine if
    conaent will be forthcoming.  EPA personnel should use this
    opportunity to explain EPATo access authority, the purpose
    for which entry is  needed, and the activities which will be
    conducted.
6/   Aa used In this guidance, the tera "EPA personnel" includes
     contractors acting as EPA's authorized representatives.

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                               - 6 -
     Arrival.   EPA personnel should arrive ac the site ac  a
     reasonable tine 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 and
     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 should
     be retained by EPA.  Consent to entry oust 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 form 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 may be raited as  a
 defense or in a claim  for damages many years later.   If a site-
 owner  is unwilling to  sign a consent fora 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 che siteowner with
 penalties or  other monetary liability or make any other remarks
 which  could be construed as threatening.  EPA personnel nay
 explain EPA'a statutory access authority, che grounds upon  which
 this auchortfB7 »ay be  exercised, and chac Che authority may be
 enforced la court.
 I/   If EPA's  planned alee activities will noc have a physical
 ~   effect on the property,  EPA generally need noc seek consent
 from the owner of leased property where che lessee is in pos-
 session.  The proper person  in.chose circumatancea is che 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 chis inscance interests of boch will be
 involved.

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          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 co Entry of EPA Employees
on Industrial Facilities," Cen'l and Admin, ac 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. f 9604(e); 40 C.F.R. S 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 co che need for entry.

     Contact Department of Justice.  If afcer consultation with
     Regional Counsel a decision is made co stek a warrant, che
     Regional Counsel must contact directly che Environmental
     Enforcement Section in che Land and Nacural Resources Division
     ac che Department of Justice. 8/  The person to call at
     the Departmcnc it cht Assistant" Chief in the Environmental
     En'fbrcenent Section assigned to the Region.  The Assistant
     Chief will Chen Arrange, in a timely Banner, for the matter
     to be handled by either an Environaencal Enforceaenc Seccion
     attorney or a U.S. Attorney.  The Region oust send to che
     Enviresjsjental Enforcement Section, by Hagnafax or other
8/  This procedure  is necessary  co comply with  internal
~   Department of Justice delegations of authority.  Referral
to a local U.S. Attorney's office  it not sufficient  for CERCLA
warrants.  The Environmental  Enforcement Section of  che 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 -
     cxpedictd means, a draft warrant application and a short
     memorandum concisely stating why the warrant is needed.

     Prepare Warrant Application.  The warrant application oust
     contain the following:

          1) a statement of EPA's authority co inspect;
             (see S II, supra)

          2) a clear identification of the name and location
             of the site and, if known, the naae(s) of che
             owner and operator of che sice;

          3) a statenent explaining che grounds for a finding
             of a reasonable basis for entry (i.e., a reasonable
             basis to believe chat there nay be a release or
             threatened release of a hazardous substance or
             pollutant or contaminant) and che purpose for encry
             (i.e., determining che need for response, or choosing*
             or caking any response action, or ochervise enforcing
             CERCU) ;

          it) affidavits supporting che asserted reasonable basis
             for encry and describing any acceapcs co gain access
             on consent, if applicable; and

          5) a specific descripcion of che extent, nature, and
             timing of che inspection;•

     Following preparacion of che warranc application, che
     Juscice Department attorney Vill file che' applicacion vich
     che local U.S. Magistrate.

     EPA nay .ask che Juscice Deparcaenc accomey co se«k che
assiscance of che United Scaces Marshals Service in execucing che
warranc where EPA perceives a danger  co che personnel executing
che varranc or where chert Is che possibilicy chac evidence will
be descroyed.
            •
          1» laaaonable Easts for Encry

     A warrant for access on*a civil  matter aay be obtained upon
a showing of a reasonable basis  for encry.  This reasonable
basis nay be established etcher by presenting specific evidence
relating co che factltcy co be entered or by deaonecrating chat
che entry is pare of a neucral administrative inspection plan.

     A specific evidence standard is  incorporated  in  SARA  as a
condition on EPA's exercise of ics access authority:   EPA ausc
have "a reasonable basis co believe  chere aay 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
 U'th Cir. 1982)  (there must  be a "showing of specific evidence
 sufficient to support a reasonable suspicion of a violation").

     In drafting  a warrant application, conclusory allegations
 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 chat
 establish the complainant's credibility. 9/

     C.   Court Orders

     The provisions  in CERCLA authorizing EPA access may 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 nay
 prove problematic and should Allow sufficient lead tine for the
 referral process  and the operation of the courts.  The Regions
 should also not enter lengthy negotiations with landowners over
 access.   EPA and  DOJ are prepared co licigate aggressively to
 establish EPA's right of access.
9/  If information gathered*in a civil investigation suggests
~~   that a criminal violation may have occurred, EPA personnel
should consult the guidance on parallel proceedings.  (Memorandum
from Courtney Price to Assistant Administrators et al.. "Policy
and Procedures on Parallel Proceedings at the Environmental
Protection Agency" (1/23/84)).  Use of CERCLA'• information-
gathering authority in criminal investigations  is addressed in
separate guidance.  (Memorandum from Courtney M. Price to Assistant
Administrators et al.. "The Use of Administrative Discovery
Devices in the Development of Cases Assigned to the Office of
Criminal Investigations" (2/16/84)).

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                                10 -
      Prior co seeking a courc order, EPA should requesc access,
 generally in writing, and assemble the record related to access.
 The  showing necessary co obtain a courc order is the same as for
 obtaining a warrant:  EPA muse show a reasonable basis co believe
 chat  there nay be a release or a threat of a release of a hazardous
 subscance or pollutant or contaminant.  An EPA finding on whether
 there is reason co believe a release has occurred or is about co
 occur must be reviewed on the arbitrary and capricious standard.
 S I04(e)(5) (B)(i).  if che naccer is noc already in court,  EPA
 muse  file a complaint seeking injunctive and declaratory relief.
 Simultaneous to filing the complaint, EPA may, if necessary,
 file  a mocion, supported by affidavits documenting the release
 or threatened release, requesting an immediate order in aid  of
 access.  If the matter is already in licigacion, EPA may proceed
 by notion co seek an order granting access. J_0/

      In a memorandum supporting EPA's requesc for relief ic
 should be made clear chat by invoking judicial process, EPA it
 noc  inviting judicial review of ics decision co undertake response.
 accion or of any administrative determinations with regard co che
 response accion.  Seccion 113(h) of SARA bars judicial review
of removal or remedial accion excepc in five tnumeraced circum-
stances.  A judicial accion co compel access Is noc one of che
exceptions.   Statements on che floor of che House and che Senate
confirm chat EPA enforcemenc of ics access authority does noc
provide an opporcunicy for judicial review of response dtcisions.
Senacor Thurmond, chairman of che Judiciary Commiccee, remarked
 chat when EPA requests a courc co compel access "chere is no
jurisdiction ac that cime co review any response accion . .  .
H)/  Parenthetically, ic should be noced that che broad equicable
     power granced co courcs in Seccion 106 can also be relied
on co obcain a courc order.  An additional source of authority
for courcs in this regard is che All Writs Ace.. 28 U.S.C. f 1651.
The Ace authorizes federal courts co "issue all wrics necessary
or appropriate in aid of cheir respective jurisdictions . . . ."
28 U.S.C. I 1651.  This auchoricy  excends under appropriate
circumstances, to persons who. chough noc parcies to che original
accion or 4Hs)ifed in wrongdoing are in a position co fruscrace
che implementation of a courc order . . . ." United States v. New
York Telephone Co.. 434 U.S. 159, 174 (1977).  Thus, the All WrTcs
Ace nay prove useful as a means of compelling persons not a parcy
co a consenc decree to cooperate with EPA and other settling
parties in execution of the decree.  The use of the All Writs
Ace, however, may be limited in light of the Supreae Court's
incerprecacion of the Act in Pennsylvania Bureau of Correction v.
Uniced Scaces Marshal Service. 88 L Ed. zo 1B» (1985).

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 [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. SU929 (October 3
 1986)  (Statement of Sen. Thurmond); 132 Cong. Rec. 119582
 (October  8, 1986) (Statement of Rep. Glickman); tee United States
 v. Standard Equipment.  Inc.. No. C83-252M (U.D. Eash. Nov. 3, 1986).

     D. Administrative  Orders

     If a siteovner denies an EPA request for access, EPA may
 issue  an  adminstrative  order directing compliance with the
 request.  S 1 (K(e)(5)(A).  Each administrative order must 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 the
 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 the re-
 spondent  that the administrative record upon which the order was
 issued is available for  review and that an EPA officer or employee
 will be available to confer with respondent prior to the effective
 date of the order.  The  length of the time period during which
 such a conferences may  be requested should be reasonable under
 the circumstances.  In  deciding what is a reasonable tint period.
consideration should be given to the interference access will cause
with onsite operations,  the threat to human health and the environ-
ment posed by the site, and the extent of prior contacts with the
 respondent.  The order  should advise the respondent that penalties
of up  to  525,000 per day may be assessed by a court against any
 party  who unreasonably  fails to comply with an order.  I I04(e)(5).
 Following the time period for the conference and any conference,
 the issuing official should tend • document to the respondent
summarizing any conference, EPA's resolution of any objections,
 and stating the effective date of che order.

     If,'following issuance of an administrative order, the site-
 owner  contioves to refuse access co EPA, the order may be enforced
 in federal ••art.  EPA  should not use self-help to execute orders.
 Ceurts art required eo  enforce administrative orders where there
 is a reasonable basis to believe that there may be a release or
 threat of • release of  a hazardous substance.  EPA's determination
 in this retard aust be upheld unless it is arbitrary and capricious
 I 104(e)(5)(B)(i).  L?A will seek penalties from those parties who
 unreasonably fail to comply with orders.

     All  administrative  orders for access oust be concurred on by
 the Office of Enforcement and Compliance Monitoring prior to
 issuance.

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                               -  12- -


DISCLAIMER
     The policies and procedures  established  in  chis docum.nr a~
intended solely for the guidance  of government personnel  "hev
are not intended, and cannot be relied upon to create ani rUht.
substantive or procedural, enforceable by any party in Iltl««i2;
with the United States.  The Agency reserves  thTright to .« a?

                                                          "
Attachments

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                CONSENT  FOR ACCESS TO  PROPERTY
 Name:
Address of Property:
     I corner.c to officers, employees, and authorized
representatives of the Ur.ited 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 ar.y solids or liquids stored or disposed
      of on site;]

     [the drilling of holes and installation of monitoring veil*
      for subsurface investigation,-]

     [other actions related to the investigation of surface or
      subsurface contamination;]

     [the taking of a response action including  . . . .]

1 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 permission is given by •• voluntarily with
knovlege of ay right to refuse and without tnreata or promises
of any'kind.
    Dae*                    •  .           Signature

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     Procedures for Authorizing Application
     for Civil Search Warrants Under CERCLA
April 3, 1987
To
     All EES Attorneys
                                                  Environaental
                                                        Section
             Under I  104(e)  of CERCLA,  a*  aaended by SARA,  the
   United  States cay seek access by warrant,  adainistrative  order,
   or  court order.   If access is obtained  by adainistrative order,
   the appropriate docuaents are issued by relevant client  agencies.
   If  access is to be obtained by court order,  then the Assistant
   Attorney General of the Land and Natural Resources  Division  Bust
   approve  the coaplaint,  upon referral froa the relevant client
   agency according to ordinary procedures. For access to  be sought
   through  application on  a civil CERCLA warrant,1 the instant
   •eaorandua will confirm the procedures  to be used by the
   Oepartaent of Justice.

             Under 15.320-A-2 of the U.S.  Attorney's Manual.
   application for warrant under CERCLA Bay not be handled
   unilaterally by the U.S.  Attorneys.   Applications for such
   warrants Bust be coordinated through the Environaental
  . Enforceaent Section.

             Clearance through the Environaental Enforceaent  Section
   is  iaportant for a variety of reasons.   First, the  nature  of the
   governaental activities involved under  CERCLA civil warrants aay
   be  auch  broader and last considerably longer than an inspection
   under  the other federal environmental regulatory statutes.
   Typically the latter require only a  few days or weeks to conduct
   routine  environaental sampling.   Under  CERCLA, access Bay  be
   •ought under a warrant  for not only  saapling, but even siaple
       1  The aemorandua  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,
  Environaental Crimes Unit, EES.

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                               - 2 -

 reaoval-type activity,  e.g.,  security/fencing,  liaited drua
 removal.   The greater relative coaplexity of  the governmental
 activity  involved can be expected to provoke  aore challenges to
 CERCLA civil warrants than those undtr othar  statutes and the
 issues raised by CCRCLA warrants Bay be auch  aora complex.
 Second, this is a relatively  naw and vital area of tha law.  w«
 aust ansura that maximum efforts ara Bade to  develop this
 critical  araa of tha  law in an excellent Banner.  CES lawyers
 Bust 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 and legal
 arguments by Departaental attorneys with experience in this area.
 Finally,  since our experience has shown that  judicial challenges
 to  civil  CERCLA warrants tend to aove very rapidly, soaetlaes on
 an  emergency motion basis,  CCS needs to work  closely with client
 agencies  on these matters 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 CCS '
 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 Betters,  we will use the following
 procedures:

           1.   The client agency will  telephonically notify the
 relevant  CCS Assistant  Chief  or Senior Lawyer when the Agency
 plans to  seek a  civil warrant.

           2.   The client agency will  follow-up the request by  .
 expeditiously transmitting  a  short memorandum 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  CCS Assistant Chief
 or Sr* Lawyer will arrange  for either an CCS  staff attorney or an
AUSA to handle the review and prosecution of  the application.
Unless a  dispute  develops ^between ECS/AUSA personnel end the
 client •gejicy, the ECS  Assistant Chief or Sr. Lawyer say approve
 the application.   Zf  such*a dispute develops, it must be brought
to the attention  of the  Chief or Deputy Chief, EE5 for
resolution.

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                              - 3 -


         . 4.  Handling of these Batters is to be afforded
priority on our docket.  Moreover, the Chief or Assistant Chitf
of the Appellate Section shall be advised of each application
request by the EE5 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 mntorcm civil CERCLA warrants,
by way of application for civil contempt or other judicial
orders, shall be authorixed in writing by the Assistant Attorney
General. Such actions shall be afforded highest priority on the
docket.

          For general advice/guidance on handling CERCUk civil
warrant natters, contact John Fleuchaus, ORCM-Haste, 382-3109.
Attachment

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                                                          9832,9
             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                         WASHINGTON. O.C. 204«0
                                                              or
                         I IN I 9 MHT               §01.10 WAtTI ANOIMINOIMCT MU'ONSi

MEMORANDUM

SUBJECT:  ,Cost Recovery Actions/Statute of Limitations

PROM:     Gene A. Lucero, Director K>A\£  H-
          Office of Waste Programs enforcement

TO:       Directors, Waste Management Division,
          Regions I,IV,v,VII,VIII

          Director, Emergency and Remedial Response Division,
          Region ZZ

          Directors, Hazardous Waste Management Division,
          Regions III, VI

          Director, Toxic and Waste Management Division,
          Region ZX

          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, 1985).

     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 eipended at Superfund sites.  Moreover, to promote cost
recovery and obtain interest, the Agency will transmit demand letters
as early as practicable.  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  (CERCLA), 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.  Zf
          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 limitations
          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 12,
August 20, 1964).  Remedial investigations/feasibility studies  (RI/PS)
may fall within the statutory definition of removal action.  Por
purposes of cost recovery they should bt trtattd as a separate removal
action.  Therefore, a cost recovery action should be commenced within
three years of completing the original removal  (exclusive of the RZ/PS)
unless phys4-o*l on-site construction has started.

     Although section 113(9)(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.  Por remedial actions, Agency
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 tbe construction
is expected to take Bore 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 $200,000.
However, the judicious use of limited resources dictates that the
Agency first address those sites which promise a better return on the
Agency's time and money investments.  Where appropriate, cases 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.  Opdate 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 Committees.

     Please ust the following categories when completing the comment-
field for sites where actions will not be referred:

     1) Mo PRPs identified
     2) PRPs not financially viable
     3) Questionable evidence
     4) Questionable legal case
     5) other (specify)

     The accuracy and completeness of this information  is critical to
our ability to demonstrate the effectiveness of EPA's 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 referral 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.

III.  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
adviie 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.
                                                                       s
ATTACHMENTS
                                                                    /
cc:  Edward E. Reich, OECM
     David Buente, DOJ                                         .
     Regional Counsels, Regions I-X

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      } UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
     f                WASHINGTON. DC 20460
                           JUN 12 (997
MEMORANDUM                                        OSWER*  9833.2


SUBJECT:  Consent Orders and the Reimbursement Provision
          Under Section 106(b) of CERCLA

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 migfct 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 seek-reimbursement by contesting issues of liability
in a later 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.

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     If you have any questions please call Rich Hopen at
382-2035.

Addressees:  Directors, waste Management Division,
               Regions I, IV, V, VI, VII, 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

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                                                                                          OSWER  #  9834.7

                    Federal  Register  /  VoL  32. No. 125  /  Tuesday.  June 30. 1987  /  Notices             24333
   AbttracL Petroleum refineries and
 chemical manufacturers must limit
 benzene emissions from new and
 existing fugitivt emission source*.
 Owntn and operators muat tubmit to
 EPA one-time notification* for new
 construction, modification, and start-up.
 They must alto lubmit tcmi-annual
 report* of the number of valve*, pump*.
 and comprea*ort for which leak* were
 detected. EPA uae* the collected
 Information a* the basis for enforcement
 action* a* well at to tpot trend* and
 plan program itntegie*.
   Respondent* Chemical manufacturer*
 and petroleum reflnehe*.
   Eitimoted Annual Burden: 91.697
 hour*.
 Office of PMbdda* aad Toxic
 Subeuncee
 Title: Household Survey* of Chemical
   Product Utage (EPA ICR »12DO). (This
   i* a renewal without revnion of a
   currenUy approved  collection.)
 Abstract: These annual surveys wiU
   provide information on household use
   of common chemical product*. From
   the results. EPA will derive exposure
   assessments for use in making
   regulatory decisions required by the
  Toxic Substances Control Act
Rftpondenu: Individual* and
  households.
Estimated Annual Burden: 800 hour*.
Agency PRA Clearance Requests
Completed by OMB
EPA ICR «om Pesticide Application
  Certification Form. Training and
  Examination of Applicator*: we*
  approved 8/17/87 [OMB »2070-00»
  expire* 6/30/90).
EPA ICR «0813, Trade Secret Clearance
  Justification for Pesticide*, we*
  extended 6/18/87 (OMB «2070-OOS3-
  expires 9/30/87).
EPA ICR 1160, NSPS for Wool
  Fiberglass Manufacturing (Subpart
  PPP) Information Requirement*, we*
  approved 6/12/87 (OMB aroeo-0114;
  expire* 6/30/90).
EPA ICR *i313. Information Request for
  Development of NESHAP for
  Chromium Plating and Anodizing
  Operation*, was approved 6/11/87
  (OMB '2060-0142: expires 12/31/87).
EPA ICR *1382. NESHAP for Coke Oven
  Emission* from Wet-Coal Charged By-
  Product Coke Oven Batteries, was
  approved 6/1S/87 (OMB »2060-0144;
  expices 6/30/90).
  Send comment* on the above
abstract)*) to:
Patricia Minami. PM-23. US
  Environmental Protection Agency.
  Information and Regulatory System*
  Division. 401 M Street. SW.
  Washington. DC 20460
      and
 Susan Dudley (ICR an200) and Nicola*
   Garcia (ICR* 0940 and 1153), Office of
   Management and Budget Office of
   Information, and Regulatory Affair*.
   New Executive Office Building. 728
   lackaoo Place. NW. Washington. DC
   20503
   Date* IBM 24.19*7.
 DaaM ]. norlaa.
 Dirtaor, Information and Regulatory Syttemt
 Divitiaa.
 |FR Doc. S7-14BOO Filed 0-29-87: MS am)
        Advisory Boart Eaocutrv*
 July n thraotb 22. 1887.
  Under Pub. L 92-463. notice i* hereby
 given of a meeting of the Executive
 Committee at the Science Advisory
 Board on |uly 21 through 22. 1987. The
 meeting will be held at the US
 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 94)0 *Jn- and will adjourn
 at approximately 540 pjn. The meeting
 )uly 22 will be held in the North
 Conference Center Room * 3 from MO
*jn. to approximately 1240 noon.
  laaue* to be discussed at the meeting
 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 committee*
 and (ubcommitteer. and other issues of
 member mtutat
  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 P.
 Yoaie, Director. Science Advisory Board
 or Mrk-foanna Foallmer located at 401
 M Street SW.  Washington. DC 20480 or
 call (202) 382-4126 by Jose of business
 July 16. 1967.
  Dated: (uae at 19*7.
 Teoy r. Yease.
 |FR Dec a7-14Bm FUed B-a-T: MS sm|
Start* PffTU Imiee Heasarcti and
Evtauatton Group (SFmeo* Open
        Notice.
        R There will be a 2-day
meeting of the Slate FIFRA Issues
Raaearch 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 430 nan. on Tuesday.
Julytl.
onosntt; The meeting will be held at:
The Hyatt Regency. Crystal City. 2799
Jefferson Davia Highway. Arlington. VA.
(703-U6-1234).
                                                                 r«cr
By mall: Philip H. Cray. |r. Office of
  Pesticide Programs (TS-766Q. 401 M
  SL. SW. Waabington. DC 2046a
Office location and telephone number
  Rm. 1115. Crystal MalL Building No. 2.
  Arlington. VA. (703-557-7096).
•ummiHTAirr MTOMMATWSC This will
be the twenty-seventh meeting of the
full Croup. The tentative agenda thus far
Includes the following topics:  . -
  1. Action Items from the March 1987
meeting of the SFTREC.
  2. Regional report*.
  3. Working Conurittee report*.
  4. Other topic* which mey *rtse.
  Dated June 21 1H7.
Kftetor. Offlet ofPnticid* Progr
(PR Doe. 17-14670 FUed 4-2S-87: 6:45 «m|
8up«rrund Program; Do Ulntonsa
      r Environmental Protection
Agency.
ACnosc Reqoeat for public comment
      R Environmental Protection
Agency (EPAJ.
       r The Agency is publishing-
today It* Interim Guidance on
Settlement* with Or Minima Waste
Contributors oadar section 122(g) of
SARA tn order to inform the public and
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 1980 (-CERCLA- or -SuperfutuT),
as amended by the Superfund
Amendments and Raauthoriiation Act
of 1986 rSAAA-V may qualify for
treatment aa at minima waste
oontriboton pursuant to section
122U)(1«A) of SARA. It also provide*

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24334
Federal Register  /  Vol.  52. No. 125 / Tuetday. June  30. 1987  /  Notices
guidelines for negotiating with de
minimi* wait* conthbuton and for
entering tnto settlements with nefa
parties pursuant to section 122(g) of
SARA.
  Thii publication don not address
qualifications for or Mttltmenu with de
minima landowner! under section
1Z2UM1HB) of SARA, which will be
covered by Mpante guidsme.
DATC Commenu mutt be provided on or
before August n. 1887.
ADeniM; Conunenti should be
addressed to Janice Linett U.S.
Environmental Protection Agency.
Office of Enforcement and Compliance
Monitoring, Waste Enforeanent
Division. LB-U4S. 401 M Street SW.
Washington. DC 20460. (202) 38W077.
                   LTIOM coarTAcr:
lantce Linen. U.S. Environmental
Protection Agency. Office of
Enforcement and Compliance
Monitoring. Waste Enforcement
Division. LE-1MS. 401 M Street. SW.
Washington. DC 20460, (202) 36-9077.
sum«ieurTAiry MOMumoic Section
12218) of SARA provides EPA with
discretionary authorry to enter into
expedited, final settlement! with de
mintmi* waste contributors to
Superfund sites. De minimi* waste
contributors are those generator and
transporter PRPs who. in the judgment
of the Agency (as delefttee of the
President), contributed haardouv
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 12Z(j)(l). d*
mimmii contributor settlements must be
practicable and in the public interest. M
determined by the Agency, and must
involve only a minor portion of the
response coats at the facility coacaned
with respect to each settling patty.
  Dt minima contributor aetdamenta
under section 122fj) of SAtA offar
potential advantages to PRPs sad the
Agency alike. For dt marincf p*rae*.
such settlements can bt M effective
means of achieving an ttrty 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 t means of simplifying the
CERCLA enforcement process through
early elimination from litigation and
negotiations of the often numerous
minimal contributor PRPs. Dt minima
settlements also offer the potential for
increased numbers of voluntary
settlement agreements. This is because
dr. minim;* contributor* may be
                   attracted by the advantages offered by
                   section 122(gl settlements, and non-oV
                   minima parties may be encouraged to
                   settle as a result of the revenues raised
                   through such agreements.
                    To use the de minima settlement
                   provision most effectively, the Agency
                   will focus on achieving settlements in
                   which multiple 4? minima PRPs at a
                  .particular site are "cashed out" under"
                   one comprehensive agrnaufnVDe
                   minima panics should be encouraged to-
                   organize and present multiparty
                   settlement offers to the government
                   Further, to limit governmental and PRP
                   transaetim costs, dt minima
                   settlements should be standardized in
                   form and should not be the subject of
                   lengthy negotiation*.
                    In the typical de minimi* settlement
                   the settling parties. in exchange for a
                   payment, will receive statutory
                   contribution protection under section
                   122(g)(S) 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 PRPi
                   and response costs, the amount of any
                   premium payments recovered through
                   the settlement and other relevant
                   considerations.
                    The Agency is awmre that df minima
                   contributor settlements 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.
                    Too interim guidance follows.
                    Data* IWMU. Ua7.                  *

                   Acting Ast tsiBM AdmMttntorfrr
                   Enferemwm omf ComfHoaet MomHoriep.
                    Dated; |«na 19. •VHP.
                   J. WiBMaarfofter.
                   Aatuant Ad.ninittrotor for Solid W
                   toe/I»ner ftoponse.
                   Subject: Interim Cuidanva on Settlements
                      with D» Minima Waste Couributom
                      wder Secian l«i) of SARA
                   From: Edward L Reich. Acting Assistant
                      Administrator (or gnlnrctment mad
                      Compliance Monltorinj
                     |. Wlaaion Portet. Astiaiani Administrator
                      for Solid VV»»u and Emergency
  Regional Cowutii
  Reftmal Waait MsnaeawMt Oitiwor
    Dinaoii
June 19. lt«r
  The purpose of this memorandum
provide interim guidance for
determining which PRPs qualify for
treatment as d» minima waste
contributor! pursuant to section
123g)(lUA) of the Superfund
Amendments and Reauthorization A
of 1986 ("SARA"). Pub. L No. W-«99
and to present interim guidelines for
settlement with such de minima psr
pursuant to section 122(g) of SARA.
Guidance on de minima landowners
under section  122U1UHB) of SARA *
be provided by separate memorandu
IL Background

  When the harm 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 107|a) of
Comprehensive Environmental
Response. Compensation, and Uabili
Act of 1880 rCERCUT). 42 U.&C.
960?(a). 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
122UH1HA) of SARA, receguted the
                   To: Rettonal AdminUtrvton
concept of the de minimi* waste
contributor, iav the potsntially
responsible party ("PUP") who aatisH.
the requirements for liability under
section 10T(a) of CERCLA and who dc
not have a valid section 107(b) defens
but who has made only a minimal
contribution (by amount and toxidry)
comparison to other hazardous
substances at the slta.
  Since the beginning of theSuporfeni
program, the Agency has been faced
with the probiem of how to treat dt
minimi* contributor PRPs. The legal ft
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 si the site, often could
exceed the amount such minimal
contributors would be expected to pa>
even under a settlement or a judgment
unfavorable to them.  As s result, de
minima parties often seek s swift and
efficient means to pay • sum that is
commensurate with their involvement
the site and allows them to be dismissi
from further negotiations and litigation
The Agency also needs a-method for

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                             Rtp«t«r  / Vol. U. No. 123 / Tmtday. [une 30. 1987 / Notices
                                                                      24335
 tdmving settlements with minimal
 *a*ie contributor* in onto lo make
 Mfottatioat and litigation men
 Banageabie.
   EPA formally recognized and
 endorsed the concept of the d* minimi*
 contributor MtiltfMnt in the Interim
 QERCLA Settlement Policy ("Settlement
 Policy'}. SO PR SOJ4 (Fib. 5.1*3). The
 Settlement Policy advised that
 negotiations with de minima parties
 should (oeui on achieving cash
 settlements aad ihould be linutad to km
 volume, low toxidty disposers who
 aormally would not make a significant
 contribution to tha coats of deikujp in
 any want
   Section «2(j) of SARA ' la to lanjw
 part a codification of the Agency'i
 poeition with regard to settlements with
 d» minima partial. While recognizing
 the liability of tuch partiat. that section
 five* EPA discretionary authonty to
 aotar into expedited aettlemenu with de
 minima waste contributors and dt
 minima landowners. Section I22(g)(1)
 generaUy provides (hat when EPA
 determines that a settlement is
 "practicable and in the public interest."
 the Agency shall, "as promptly as
 possible." seek to reach a "fins!"
 settlement with a de minima PR? by
 consent decree or administrative order.
 if the settlement "involves only a minor
 portion of the response costs at the
 facility concerned' Section «Z(g](l). A
de minima contributor settlement with •
generator or transporter is authorized if
 theme criteria are met and if the Agency
determines  that both "the amount of the
hazardous substance* contributed by
 that party to the facility." and "the toxic
or other hazardous effect! of the
 substances  contributed by that party to
 tha facility." are "minimal in eompariaoa
 to other hazardous substances at the
facility.- Section 122(g)fl)(A|. Section
 12Z(g) further authorizes settlements
 with de minimi* landowners as defined
 by section U21g)|l)|B) of SARA.
Because the Agency will be providing a
separate guidance document oa de   '
minimii landowners under SARA, thia
 document will foot* oa the definition
 and settlement reeuifeBtents of the de
minimi* waate contributor.

 IILGuM«UaaafarN«fOliatiasWltfcae  ••
 MloiaU Parties)
  De minima contributor settlements
 under section 122(g) of SARA can be an
effective mean* of providing d* minima
parties with an early and equitable
 resolution of their liability while
minimizing  their transaction costs. De
 minima settlements can be particularly
  1 TW Ml i«ii tt •cue* 1SI») of SARA i
 uaaful to the Government in complex
 cases involving numerous PUP*. In such
 cases, de minima settlements offer the
 Agency a method of simplifying
 CERCLA enforcement actions through
 early elimination of the sometimes
 numerous minimal contributor PRPs
 from litigation aad negotiations. Dt
 minima aettlaaenu may also increase
 the amount of raaponae coata lecoveied
 through voluntary settlement
 agreements. This is because dt minima
 parties (who otherwise might oat have
 participated la settlements) may be
 attracted by the advantage* offered by
 de minimii settlements and encouraged
 by the fact that their funds will be used
 to pay costs of cleanup, rather than
 transaction costs. Finally, de minima
 settlements may increase the likelihood
• of settlement with the major waste
 contributors by raising sufficient
 revenues to reduce  the overall liabilities
 of such parties.
   To use the de minima settlement
 provision most effectively, the Agency
 will focus on achieving comprehensive
 settlement! in which interested de
 minima PRPs at a particular site are
 addressed  In one settlement agreement.
 De minima parties  should be
 encouraged to organize and present
 multi-parry settlement offers to the
 Government, To limit Governmental aad
 PRP transaction costs, de minima
 settlement* should lake the form of
 standardized agreements, aad the
 Regions should try to avoid lengthy
 settlement negotiations with de minimii
 parties.
   At sites with dozens or hundreds of
 PRPs, the de minima settlement
 authority will be particularly netful In
 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 tha site at aa
 early stage, ao thai potentially de
 minima parties can identify and
 organize themselves to pretest
 settlement offers to die Government.
 Where sufficient inhumation ta
 available, the Agency may tentatively
 Identify-potentially de minima parties in
 the Information released to PRPs under
 section 122UKU of SARA. The Agency
 may  also consider negotiating
 separately with PRP Steering
 Committees representing substantial
 numbers of dt minima parties. In
 addition, the Agency may wish is
 consult with the major. i«u non-de
 minimii. parties dunng the de minimii
 negotiation* in'ordtr to facilitate a later.
 comprehensive settlement with such
 major parties. 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
 oa the willingness of the major parties
 to settle.
   In determining the timing of e de
 minima settlement, the Agency must
 consider a variety of factors: the amount
 of information available about tha PRPa
 aad their waste contribution* to the elte:
 the amount of information available
 about the cast* of remediating sit*
              the native of the
 reopsaars included lathe covenant not
 to ear the amount of the premium to be
 paid by the stttliag parties: aad the
 voloBM aad toxicity criteria used by the
 Agency to distinguish between the de
 minimii aad major parties at the site.
 The approach taken at a particular site
 should be designed to promote
 voluntary settlement minimize
 transaction costs for both ths PRPs and
 the Government, address the legitimate
 interest* of the de minima and major
• parties at the sits, and assure that the
 level of nek to th* Agency is acceptable.
 The Region* are not encouraged to
 devote extensive effort to assessing
 proposals for de minima settlement
 unless there is a reasonable prospect of
 auccauful settlement
  The Agency may consider early
 aattlatMBt where complete information
 concerning PRP contributions and the  -
 nature of the remedy is oot yet
 available, la such early settlements, the
 reopeaers should be more expansive.
 and/or the premiums should be
 substantial la addition, volume and
 toxicity levels should normally be set
 low. so thai parties who  may
 legitimately be treated as major do not
 instead aad up being treated as de
 minima. Where the Agency determine*
 that It is more important to have finality
 ta releases and reopeners aad more
 certainty in the definition of premium*
 aad volume/toxJcity levels, negotiation*
 lor de minima settlements should be
 deferred until the remedial Investigation
 aad feasibility study have been
•completed aad tha remedy aad the
 relative PRP contributions have been
 definitively identified-

 IV. Guttetiaes for-OaJlaiat *a De
 Mminu* Waste Contributor

  Because site conditions, remedial
 program*, namber of PRPs aad other
 considerations vary tremendously
 among site*, the approach taken by this
 guidance, consistent with section
 122WUHA) of SARA, i*  that the de
 minimii contributor will be defined on a
 sits-epecific basis. To qualify as • de
 minima generator or transporter, the
 PRP must nave contributed an amount of

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24338
Federal Rtgbter  /  Vol. 52.  No. 125  / Tuetday.  lane 30> 1MT / NottcM
hazardous substances which ia minimal
in comparaon to the tout amount at the
facility. The- PRP nwn  Mr eKuMnwd by *h*
                                                           Aemey »tw/ to •mini* HMO • dr

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                    F«dml Eoprtar / Vol Si No.  1Z3 / Tondty. fun* ML 1H7 / Netfetf
                                                                  US37
  r minima aotoament with aa
  ipananre eowaant MI le tue of tail
  Ad may bt aandad*d prior to
  trnpiatioaofUMRl/FSandROa
  Bwwtr. If lha Aftncy to relatively
  mfldmt «{ iu ability to oaUmaie future
  raponae coeta. tad DM eetUtmtni ufcaa
  «a aeo»«Bi tha tomaiarl krvel of
  Manaiary throufb IB adequate
  ftaJua payment tad/or other
  aftfluanU. 5e» eectioo VfBlU) baiow.
  iMAfBBcrwiUatooeoaaidar
  Jtaroattvt method* of amicfuriai pre-
  U/TS asd ROD dr awuoui tattlamenta.
  vale* afford deauunu contributor*
  he opportunity for tarty terUaaenu
  when coat information u law canam)
 vhile proieeuaf the Government tf unit
 lha additional nak* praaenied by auch
 urly afntemeBit. Opnoni for inch
 MtUaaanu are diacuaaed in Section
 V(B|(2) below.

 0. Conunt and Form of S*ttltm*r>u

 1. Introducooa

  Tha goal of netoriaboiu with rfr
minima partial u : J achieve Quick and
elandareitad etreemenu through thi
expenditure of minimal enforcement
reeouroee and trtnaaction ooeta- To
attain nil foal. rht dr minima
atttlammt aormaily «iD be a "caihout"
i*_ it will aol Include a eomaUtmaai to
ptrform work.* but ftibar will raquin a
payment to bo mada to tha Hasardoui
Subttanca Suptrfuad.* la eichaate for
thia payment (aa aaniint ptrtiet will
receive etatvtory ceaihbvuon protection
aadav eection 1SUKSI of SARA and
may receive a covoMnt MI to aua ai
dttcntMd la aactooo V(BH>) balow.

t lUiasaa* from liability and Rtopanan
          MI to m» lof ervil ciaimt
          ttM attt waich aoak
                          tn of
CEXCLrV «M» IPA Mtarateaa that
aa«h aMtivtMni ia conaiitent with tba
public iBtafMt, aa pwidod ia aarton
t22(»J{2) of SARA.* na aeopa of thia
  ttet hr tfet •><*. •+- •• tlin w«a««Mt win.
              i r»tf »«M*nt t* « • HMWIM
      • 1 »t» • «ll»4Moric Mil ttttt I* »•
                    r tfMW* «M m*0 lor
                    > •> tki* ••• wilt tf

                              > MI  bting) eomplatad at tha alia.
•aad lha Aftncy baa aufftdant
 mformauon upon which to tvalnata tba
 Ukalthood of coat ovtrruni or futura
 mpoaaa acttoa and tht potaattai tMta
 aaaooatod wtth thtaa emttaaaat tvtata.
 than tha Aftncy may accept a praaium
payment bom lha attUiat * aumau*
awttaa ia bm of OM or bata of thaaa
two rtfiBtnan. rtapaaiilni aa lha lacu.
Mowtm. if a dt muumiM tatUamaat»

•abataattal oampWooa} of tha 10/R aad
ROD. at a Oaa whan tha Afancy bat
taauffirttat laformattoa apon which to
Vfihuta thaaa rtaki aad dtvtlop a
prauumij-payBtBt eaomtMuntt wttb
them, than rtopaMrt for ooat ovtrmni
aad rutura raapoaaa OCMB ftaoraUy
wUl ba raauind. ta appropriate caae*.
Iba Aftacy may make anapaem to mil
faaaral rata aad aeaapi a vary htah
pratanm paymaaL which proihdaa a
wtda marflr of aafety to the
Covarnmant. at an tartler iu»» tr the
procaat n Utu of thaaa rwe raopentn.
  Aa acted abovt. the Aiency will alie
eaniidtr vanoui fatmi of pre-Rl/FS and
ROD dt nauaut aattlamtnu which
arovida dt auruma coaQibuton the
oppertouty for early aanieaentt white
proiacttaf &• Covemment aiainit tae
addittonal rtaka pratantad by  tuch early
aaraamanu. For aaampka. EPA nay
onaidar partel aaitltmaata in which the
dt minima partial mtkt a aayoiant in
aauafacaon of their liability for aait
ooau aad proiaoad Rl/FS coata.
fatuamanu of ihii had would aot
addret* the aattoat paroei liability for
poat
                                     • minima PRPv finally, if ih* major PRP«

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24338
Federal Register  /  Vol. 52.  No. 12S / Tuesday. June 30. 1987 / Notices
have expressly assumed the dt minima
parties' liability for cost overrun* and
futon remediation n part of •
comprehensive settlement with the
Government, then these risks will be
boms by the major parties, and a
promiuc payment or reopener for cost
overruns end futu.-* remediation  will not
be n*?i>invi by the Government from the
•••-•'' 'i dt minima parties.

3. Amount of Payment

  In the typical de minimil settlement
the cash offer submitted by the de
minima parties must be at least equal to
their volumetric share of the total past
and projected response costs at the
site.' Nature of the waste is less
relevant to the amount of payment of a
de minima settlement because the
waste must be minimal in toxicity in
order for a party to meet the basic
eligibility criteria for de minimis  status.
Volume is. therefore, a useful and simple
method for tentatively determining the
de minimit share. It is based upon the
type of information that is most likely to
be readily available and does not
require the PRPs and the Agency to
invest an inordinate amount of effort
arguing about the appropriate share.
  The volumetric share may be
adjusted, however, based upon the other
factors regarding partial settlements
identified in  the Interim CERCLA
Settlement Policy (Pan IV. SO FR  9037.
38). Factors that may be of particular
importance include ability to pay.
litigetive risks, public interest
considerations, value of a present sum
certain. Inequities and aggravating
factors, and the nature of the case
remaining against other parties after
settlement The shares may also be
adjusted on the basis of a Nonbinding
Preliminary Allocation of Responsibility.
If one has been developed for the site
pursuant to section U2(e)(3) of SARA.  .
  In addition to the volumetric share of
past and projected response coats, the
Agency generally will require payment
of a premium from each settling d»
minimit party in exchange for granting a
covenant not to sue which dees not
Include reopeners for coal overruns and
future response action.* If the settlement
BMMtvlly »Koirtd bt OMod OB •
                   Is concluded prior to completion of the
                   RI/FS and ROD. and information about
                   projected costs is limited then the cost
                   overrun and future response action
                   premiums should be calculated to reflect
                   this Increased level of uncertainty. '• As
                   discussed earlier, if the major PRPs an
                   •••inning the responsibility for
                   conducting me cleanup *eathe
                   premium amounts may be made
                   available to those PRPs rather than to
                   the Agency. In this situation,  the
                   premium amounts may be negotiated
                   between the major PRPs and  the de
                   minima settlors.
                     Furthermore, because de minima
                   PRPs an jointly and severally liable for
                   response costs at the site, the amount to
                   be paid by a de minima 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 de minimis offer may
                   need to refledt a greater proportion of
                   response costs, rather then simply e
                   volumetric shan and a  premium. It is
                   also possible that mixed funding may be
                   appropriate in such a situation."
                   4. Enforcement of Payment
                     If a settling party fails to make any
                   payment required by a de minima
                   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. 5m section
                   122(1) of SARA. In addition, the
                   Agendcy may include a porovtsion in
                   the settlement document which permits
                   the agreement to be vacated in the event
                   of noncompliance.
                   5. Type of Agreement
                     Section 122ti)(4) of SARA requires
                   that de minima settlements be entered
                   as either judicial consent decrees or
                   administrative orders on consent The
                                    procedures under
                   which these two alternatives should be
                   used an briefly describe below.
                     a. Judicial Content Decree. Under
                   section 122(d)(1)(A) of SARA.
                   settlements with non-de minima PRPs
                   which provide for remedial action must
                   be embodied IB consent decrees. Thus, if
                   the dt minima settlement is part of a
                   larger, mon compnhensive agreement
                   with the non-de minima parties under
                   which remedial action will be
                   performed it may be advisable and
  • TW BIMUWB p*ymmt *4uen tht liability of
*• BOB Miuiai MPt m ft* MMMI of rt» PJHIML
     OIlMmnOf •PO^OJOd to QW MttiOBMM
      fll. IB OMM OMM* H MBy M BBOPOPnOtt fOF
        » to tat dooooMd hi • Q)U  «Mtlf>c MM
                 r B. S, •. 14.
                    •• totter fMBBM M o«le»Ulta» »»OBU
                   •tyoMM* win te BMiidtd by MOMM*
efficient to use e consent decree for the
entire settlement Similarly. If the
Government has alnady filed e
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 wi1'-
the case arJ should be eble to ap«.ove
the settlement expeditiousiy.
  At the present time, all de minimis
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.11  A model section 122(g)
consent decree will be issued shortly.
  b. Adminstntive Order on Consent, f
de minimis settlement may 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  fulun
litigation and negotiations with the
major waste contributors at the site, all
such settlements currently must receive
the concurrence of the AA-OECM snd
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 SSOO.OOO (as
will generally be the case at sites
involving de minimis settlements).
section 122(g)(4) of SARA  requires that
the dr minima 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 nferral by EPA to approve o
disapprove the settlement unless the
AC has nached agreement with the
Afency on an extension of time.
  Section  122(1) of SARA requires notic
of all administrative de minimis
settlements to be published in the
Federal Register for a thirty-day public
e^fiiiMtit 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.
  '• Tht MjyOMBt pro»ioto«» of o> ariimmi COBM«
 digOM thoMd aM ivqMra oirBMai to bt «*dt
 •MU Bftor Ow UBilod SUM* hB« MOponotd 10 any.
 Mbhe BMMMMi netivod iad MUU «f Mr tM) oonri

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                      Federal RtgiHer  / Vol. 52. No. 123 I Tue»day. June  30.  1987 /  Neticei
                                                                                                                  24339
 Improper, or inadequate." '* Section
 122(i)(3) of SARA. Modifying or
 withdrawing content to an
 administrative Mitlemeni if subject to
 the taroe OECM and OSWER
 concurrencel as are initial agreement*.
   More detailed guidance on the
 procedural aspects of dt minimit
 consent order*, including Regional
 referral of order* for Headquarters
 concurrence and AC approval
 solicitation of public comment
 enforcement of order*, and other related
 matter*, will be provided by separate
 memorandum. A model section 122(g)
 consent order will be issued shortly.

 VI. Purpose and Use of This
 Memorandum

   This memorandum end any internal
 procedures adopted for its
 implementation ere 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 eny person. The Agency may
 take action at variance with this
 memorandum or Its internal
 implementing procedures.

Appendix—Teat of Section 123g) of Saie
  (1) firpeeVrec' Final Sett/emem— Whenever
practicable and ia ih« public interest ti
determined by the President, the President
shell at-promptly at possible reach a flnal
settlement with • potentially responsible
parry in an administrative or civil action
unger MCI ion 106 or 107 if such settlement
involves only a minor portion of the response
costs at the facility concerned and. in the
judgment of the President, the conditions in
either of the following subperefraph (A) or
fB) are met
  (A) Both of the following an minimal in
comparison to other hazardous substances at
the facility:
  (i) The amount of the hazardous substances
contributed by thai party to the facility.
  (II) The toxic or other ha*ardo«e effects of '
the substances contributed by that party to
the facility.
  fB) The potentially responsible party—
  (I) ia the owner of the ieaJ property on or la
which the facility Is located:
  (li) did not conduct or permit the
generation, transportation, storage, treatment.
or disposal of any basardous substance et the
facility: and
  (IK) did not contribute to the release or
threat of releese of a hasardoM substance at
the facility through any action or omission.
  ••neper*
               ro»uiu
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          L MltU STATES ENVIRONMENTAL PROTECTION \GENO
                        WASHINGTON. DC :
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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  co $75,000 for each .day of violation.
 In addition to  the 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 che require-
ments specified in those 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 the maximum penalties for such criminal
 violations.  Sections 325(b)  and (d) also provide for criminal
 penalties.

 Current Procedures

      Prior to completion of the procedures  for  Class I penalties
 and the promulgation  of the rule amending the Consolidated  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 nay file
administrative actions assessing the Class I 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 terra, 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 the 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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                                 PRIMA FACIE CASE
                 SECTION J03(B) CERCLA. M2 U.S.C. SECTION 9603(B)
                                   NOTIFICATION
      FACT 10 it PROVED

     PERSON IN CHARGE OF
     VCSSCL OR FACILITY

     HAS  KNOWLEDGE OF
     RCICASC  or
j    HAZARDOUS SUBSTANCE
STATUTORY BASIS
  I03(A). (B)
  I03(A). (B)
            COMMENTS
  I03(A). (B)

  103(A). (B)
 EVIDENCE SHOWING PERSON  is  IN
 CHARGE
         OF REI.FASF. NAY RE INFF.RRFJ) ;
STANDARD IN CIVIL CASES LESS Til AN
IN CRIMINAL CASES

EVIDENCE  OF RELEASE

EVIDENCE  THAT SUBSTANCE
RELEASED  IS HAZARDOUS

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                            PRIHA FACIE CASE
            SECTION 103(8) CERCLA. «tt U.S.C. SECTION %03(B)
                              NOTIFICATION
                               (CONTINUED)  .
 FACT TO BC PROVCD

IN REPORTABLC
QUANTITY
WHO FAILS TO REPORT
THC RELEASE
STATUTORY BASIS
  103(A)o (B)
           COMMENTS
  103(e)
EVIDENCE THAT RELEASE WAS
EQUAL TO OR EXCEEDED
REPORTABLE QUANTITY

CERTIFICATION BY NRC THAT IT
WAS NOT NOTIFIED

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                 BRIEFING ON

    RCPORTABLE QUANTITIES IMPLEMENTATION
                     BY
         EMERGENCY RESPONSE DIVISION
  Orricc  or  EMERGENCY AND REMEDIAL RESPONSE
OFFICE or SOLID WASTE AND EMERGENCY RESPONSE

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                            TOPICS
STATUTORY AUTHORITY
PURPOSE or REPORTABLE OUANTITITCS
RO ADJUSTMENTS
RO ADJUSTMENT HETHODOIOGV
RELATIONSHIP BETWEEN CERCLA AND CWA
REPORTING REQUIREMENTS
DETERMINING WHEN AN RO HAS BEEN RELEASED
FEDERALLY PERMITTED AND CONTINUOUS RELEASE REPORTING EXEMPTIONS

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                       STATUTORY AUTHORITY
 CERCLA SCCTION 101(11) DCHNCS  "HAZARDOUS SUBSTANCE*  BY  REFERENCE TO
 OTHER ENVIRONMENTAL STATUTES.  INCLUDING!

 --   CLEAN WATER ACT (CWA) SECTIONS  311 AND 307t
 --   CLEAN AIR ACT (CAA) SECTION ll?i
 --   RESOURCE CONSERVATION AND RECOVERY ACT (RCRA) SECTION 3001t 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 HAY PRESENT SUBSTANTIAL DANGER TO THE PUBLIC HEALTH OR
 WELFARE  OR THE ENVIRONMENT.*   I.PA IS IN 1111. IHOCFSS OF DF-SICNATINt; mRFMPil.Y
HAZARDOUS SUnSTANTRS OF TITI.F, III OF SARA AS IIAZAHims SIIUS1 ANTF-S  AND SFTTINn R()S.
 THERE  ARE CURRENTLY 70S HAZARDOUS SUBSTANCES. INCLUDING  INDIVIDUAL
 CHEMICALS AND WASTE STREAMS.   Mil. SI DISTANT! !S Aid; I.ISTI.D AT /«() CFH PART K>2.

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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* RUST BE REPORTED IMMEDIATELY TO
THE NATIONAL RESPONSE CENTER (NRC).  CRIMINAL PENALTIES HAY BE IMPOSED
FOR FAILURE TO REPORT PROPERLY.

REPORTABLE OUANTITITES (RQs) ARE STATUTORILV SET AT 1 POUND OR AT THE
RQ ESTABLISHED UNDER CUA 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
    t   RQS SERVE AS A TRIGGER FOR NOTIFICATION TO THE FEDERAL GOVERNMENT OF A
        HAZARDOUS SU8STANCE RELEASE.

    t   ROS 00 NOT NECESSARILY REFLECT THE DEGREE OF RISK POSED BY HAZARDOUS
        SU8STANCES.

    •   ONCE A RELEASE IS REPORTED. EPA DETERMINES WHETHER A FEDERAL FIELD
        RESPONSE IS WARRANTED.

    •   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.

    •   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.

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                         RQ ADJUSTMENTS
RO ADJUSTMENTS ALLOW GOVERNMENT OFFICIALS TO FOCUS ATTENTION ON  THOSE
RELEASES THAT HAT POSE  THE  GREATEST THREAT TO PUBLIC HEALTH AND
WELFARE AND THE ENVIRONMENT.

RO ADJUSTMENTS FOR  387  HAZARDOUS SUBSTANCES WERE PROPOSED  IN AN  NPRN
PUBLISHED IN THE FEDERAL  REGISTER ON NAY 25. 1983.  ON APRIL M.  198S.
EPA PUBLISHED!

--  A FINAL RULE ADJUSTING  ROS  FOR 3MO OF THE HAZARDOUS SUBSTANCES  FOR
    WHICH RO ADJUSTMENTS  WERE PROPOSED IN MAY I983i AND

—  AN NPRN PROPOSING RO  ADJUSTMENTS FOR IDS ADDITIONAL CERCLA
    HAZARDOUS SUBSTANCES.

RQS OF THE REMAINING 260  SUBSTANCES (PRIMARILY POTENTIAL CARCINOGENS)
ARE BEING ADJUSTED  AND  WILL FORM THE BASIS OF A THIRD NPRN. RQS FUR
HJTFXTIAI, CARCINnGlllS AND RAIHOM»;i,lIH-S WIN, UK IKOMUIyCATM) IN |'W7.
FUTURE RO ROLEMAKINGS WILL  PROVIDE CLARIFICATION OF THE REPORTING
EIEHPTIONS FOR CONTINUOUS RELEASES AND FEDERALLY PERMITTED RELEASES.
TIIOSF RIFIJJAAKINT.S WIN, MR IKOHnrJVTKI) IN IOH7.

                             - 5 -

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               RQ AS TRIGGER FOR RELEASE NOTIFICATION
      RELEASE OF
 HAZARDOUS SUBSTANCES
(Air. Grind Watar. Serf act
    Waltr. A«4 Laarf)
                                  REPORT
                                 REQUIRED
                               FROM PERSON
                                 IN CHARGE
NRC
                               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 - 1102

WASHINGTON. D.C. METRO AREA
      (202) 421 - 2175
 * Mail!! «AV IE aESraaSIILE Mi •IlPOBff COSTS Oa NATUHAl RESOURCE DAMAGES

   EVEH If THE AMOVftf RElEASEa IS IESS THAN THE APP1ICAIIE BO

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                          RQ ADJUSTMENT  METHODOLOGY

    t   THC RO 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
        TOKICITV AND ITS CHEMICAL CHARACTERISTICS!
 •
        —  AQUATIC TOIICITYI
        —  HANNALIAN TOXICITY (ORAL. DERMAL. INHALATION)•
        —  iGNITABILITYl
        "  REACTIVITYi
        —  CHRONIC TOXICITVI AND
        "  CARCIN06ENICITY.

    •   ROS CAN BE ADJUSTED UPWARD ONE LEVEL BASED ON BIODE6RADABILITY.
        HYDROLYSIS. OR PHOTOLYSIS.
t
I
    t   EACH HAZARDOUS SUBSTANCE IS ASSIGNED ONE RQ APPLICABLE TO RELEASES TO
        ALL MEDIA (LAND. AIR. WATER).
                                     - 6  -

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                 RELATIONSHIP BETWEEN CERCLA AND CWA
•   INC FOLLOUIN9 ASPECTS Of THE CUA'S APPROACH TO DEALING WITH RELEASES
    OF HAZARDOUS SUBSTANCES HAVE 8EEN ADOPTED UNDER CERCLAt
                          *
    —  THE FIVE 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 SUBSTANCESi

    --  THE ZM-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 UNITED IN SCOPE AND DIFFERS FROM CERCLA IN THE FOLLOWING
    RESPECTSs

    —  CERCLA COVERS RELEASES INTO All  ENVIRONMENTAL MEDIA. UNLIKE THE
        CWA WHICH COVERS ONLY NAVIGABLE  WATERSi

    --  CERCLA DOES HOT COVER Oil SPILLS.  UNLIKE THE CWA WHICH REQUIRES
        OIL SHEENS TO BE REPORTED TO THE NRCi

    —  CWA SECTION 311 ROS ARC BASED ON AQUATIC TOXICITYi BECAUSE CERCLA
        APPLIES TO ALL ENVIRONMENTAL MEDIA. ROS BASED SOLELY ON AQUATIC
        TOIICITT ARC 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 RCICASCR HAS KNOWLEDGE THAT A
    RCPORTABLC RCICASC HAS OCCURRED. THE NRC MUST BE CALLED IMMEDIATELY.
    SlIBPARfS E AND F OF THE PROPOSED NCP 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.

t   PERSONS COVERED.  PERSONS IN CHARGE OF A FACILITY OR VESSEL ARE
    REOVIRED TO NOTIFY THE NRC OF REPORTABLE 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 COVEJED.  An 705 HAZARDOUS SUBSTANCES LISTED IN THE APRIL
M. 1985 FINAL mC ARC COVEREOi ADDITIONAL SUBSTANCES flAY BC ADDED.
(OSW INTENDS TO ADD ABOUT 120 MORE HAZARDOUS WASTES TO THE RCRA
SECTION 3001 LIST IN THE NEAR FUTURE.)  SUBSTANCES THAT ARE NOT LISTED
IN THE FINAL RUIE ALSO HAT BE HAZARDOUS!

—  SUBSTANCES ARE NOT LISTED UNDER ALL POSSIBLE NAHESI AND

--  WASTES UITH ICRE CHARACTERISTICS ARE HAZARDOUS (ir NOT
    SPECIFICALLY LISTED THESE WASTES HAVE AN RO OF 100 POUNDS).

RELEASES COVERED.  THE DEFINITION OF RELEASE COVERS VIRTUALLY ALL WAYS
THAT SUBSTANCES NAY ENTER THE ENVIRONMENT.  HOWEVER. FOUR EKEHPTIONS
ARE PROVIDED UNDER SECTION 101(2?)i

--  RELEASES WHOLLY CONTAINED WITHIN A BUILDING OR STRUCTUREi
--  MOBILE SOURCES OF AIR EMISSIONS*
—  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 21-HOURS AS THE PERIOD TO DETERMINE.
FOR NOTIFICATION PURPOSES. WHETHER AN RO HAS BEEN RELEASED.

MIXTURE RULE.  RELEASES OF MIXTURES OR SOLUTIONS MUST BE REPORTED IF A
COMPONENT HAZARDOUS SUBSTANCE OF THE MIXTURE IS SPILLED IN AN AMOUNT
EOUAL TO OR GREATER THAN ITS RO.

--  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 RO THAT APPLIES TO THE MIXTURE IS THE
    LOWEST RQ OF THE COMPONENT SUBSTANCES.

HULTIPLE RELEASES.  WHEN REPORTABLE RELEASES OF THE SANE HAZARDOUS
SUBSTANCE ARE OCCURRING AT SEVERAL LOCATIONS IN A FACILITY AT THE SAME
TINE. ONLY ONE REPORT IS .REQUIRED RATHER THAN MULTIPLE REPORTS.
                            - tl  -

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FEDERALLY PERMITTED AND CONTINUOUS RELEASE REPORTING rXfMPTlONS
SCCTION  103 MOV I DCS  A  COMPUTE  REPORTING CXCI1PTION FOR FEDERALLY
PERMITTED  RELEASES  MO  A  UNITED REPORTING EXEMPTION FOR CONTINUOUS
RELEASES.   TIIF. RULFMAKINT. WIN, RF. Pimi.lSIFI) IN OR7.

THE UNITED EIENPTION FOR CONTINUOUS RELEASES APPLIES TO RELEASES THAT
ARE "CONTINUOUS* AND  "STABLE  IN  QUANTITY  AND RATE.* AND FOR WHICH THE
APPROPRIATE INITIAL REPORTS NAVE BEEN SUBNITTEO.

RELEASES THAT NEET  THESE  CONTINUOUS  RELEASE CRITERIA NEED ONLY BE
REPORTED ANNUALLY.  OR WHEN A  'STATISTICALLY SIGNIFICANT* INCREASE IN
THE ANOUNT  RELEASED OCCURS.

SECTION  101(10) OF  CCRCLA DEFINES RELEASES THAT ARE "FEDERALLY
PERNITTED.* THESE  RELEASES ARE  COVERED BY SPECIFIED PERNITS OR
REGULATIONS UNDER CWA.  RCRA.  CAA. THE MARINE PROTECTION. RESEARCH. AND
SANCTUARIES ACT. THE  SAFE DRINKING WATER  ACT. AND THE ATONIC ENERGY
ACT.

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 28038
           Federal Register / Vol. 52. No. H3  /  Monday. July V. 1987 / NotiCM
                                                                                             OSWER  #  9834.8
 Applicants »uie thai granting their
 request will permit the Applicants to tell
 the subject gas on the spot market under
 their small producer certificate.
   Applicants stale that the August 9.
 1965. contract expired on November ?.
 I960, and thai under the expired
 contract ANR has no lake-or-pay
 obligation. Applicants stale thai the gas
 qualifies under NCPA section lOtya) and
 thai the deliverability is approximately
 ftSOMd/d.
   Since Applicants allege that they are
 subject to  substantially reduced takes
 without payment and have requested
 that their application be considered on
-an expedited basis, all as more fully
 described  in the application which is on
 file with the Commission and open to
 public inspection, any person desiring to
 be heard or to make  any protest with
 reference to Mid application should on
 or before IS days after the date of
 publication of this notice in the Federal
 Register. Hie with the Federal Energy
 Regulatory Commission. Washington.
 DC 20428. a petition to intervene or a
 protest in accordance with the
 requirements of the Commission's Rules
 of Practice and Procedure |lfl CFR
 385.211. 385.214). All  protests Tiled with
 the Commission will  be considered by it
 in determining (he appropriate action to
 be taken but will not s«rve to make the
 Protestants parties lu the proceeding.
 Any person wishing to become a p'any '
 in a proceeding must Tile a petition 10
 intervene in accordance with the
 Commission s rules.
   Under th* procedure herein provided
 for. unless  otherwise advised, it will be
 unnecessary for Applicant* to appear or
 to be represented ai the bearing.
 KtfiMlh F. Plumb.
 Secretary
 |FR Doc. 67-16M3 Filed 7-24-67: 8:45 «m|
ENVIRONMENTAL PROTECTION
AGENCY
tret
TI
Supertund Program; Covenants Not To
Sue

AOIMCT: Environmental Protection
Agency.
ACTON: Request for public comment.
Order Mn 4.W on lunc 3. 107 In ••caunf Ortftr
Nu 4XY in.' Cnun r*tm mi rti»ilMien le in*
Committiun • tut«m*ni uf p»iit.y in I 2.77 of its
••fuUnnni S»<.nun ~~ >:jn-< thai iht Commitiion
will uramitr or. «n i vmlupo IMIII application* lor
ortifiuit mil «MrxJ.irm»ni *iilhnnty mint* in*
pradvun 
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                     Federal Register  /  Vol.  52. No. 143 / Monday. July 27. 1987 /  Notictt
                              28039
  EPA'i reason* for adopting thii
 second raopener are several Firtl.
 Although SARA doet not explicitly
 require this reopener. both the statute
 and the legislative history evince a
 Congressional concern that'responsibltK
 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) clearly 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 121(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 :o 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
 (hose •situations 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 dbove. 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 parties
 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  lZCIfl|3|
provides that a covenant not to sue for
 future liability cannot take effect until
EPA has certified that remedial oction
 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 «nd the
 operation and maintenance of that
 facility for the indefinite future. In this
 circumstance, certification of completion
should not have to wail until all
operation and maintenance activities
are completed. Specific distinctions
between remedial action and operation
and maintenance are drawn in section
104
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  28040
Federal  Register / Vol. 52. No. 143 / Monday. |uly 27. 1967  / Noticei
    (C) Tbt settlor is in full compliance
  with • consent decree under 1106
  addressing the release or threatened
  release:
    (D) EPA ha* approved the reiponae
  action.

  Stction 122(f)ll).
    Prior to entering a covenant not to tue
  under section 122(0(1). EPA must assess
  the appropriateness of the covenant
  under seven factors set forth in section
  122(0(4)- These factors, 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 !22(f)f4>
   In addition to authorizing EPA. in its
 discretion,  to covenant not to sue  for
 liabilty. including future liability, section
 112(0 mandates thai EPA grant •
 covenant not to sue for future liability in
 two specific circumstance*. Section
 122(0(2) provide* 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 ofiaite disposal of a
 hazardous  substance after rejecting an
 onsite response which fully complies
 with the Netional Contingency Plan
 (NCPh or C) the selected remedial
 ection 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 lake
                   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(5) conditions such covenants upon
                   satisfactory performence 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 releese or threatened release which
                   is the subject of the covenant where
                   such liability arises from conditions
                   unknown et the time the remedial ection
                   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(6)(B) provides that a waiver for
                   the unknown conditions reopener in
                   section 122(0(6)(A)  may be granted in
                   "extraordinary circumstances."  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
                   pey. litigative risks, public interest
                   considerations, precedential value, and
                   inequities and aggravating factors."
                   Section 122(0(6)(B). Nonetheless, even if
                   extraordinary circumstance* exist the
                   unknown conditions exception may not
                   be waived if the terms of the agreement
                   do not provide reasonable assurance*
                   thet public health and the environment
                   will be protected from any future
                   releases. Section 122(0(6)(Q authorizes
                   EPA to except from covenants not to sue
                   future enforcement actions necessary to
                   protect public health, welfare, and the
                  m Explanation of Key Statutory
                  Provisions
                    la interpreting Section 122(0 and
                  developing a policy for its
                  implementation. EPA has looked uvlan
                  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 cleanups
                  by providing EPA with the authority to
                  grant covenant* not to aur
                    (2) Encouraging more permanent
                  cleanup* 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(11 Congress
authorizes EPA to issue covenants not
to sue for both present liability and
future liability. In the context of
settlements involving remedial ection.
EPA interprets present liability as a
responsible party's obligation to pey
those response costs already incurred
by the United Slates 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 standard* or
other measure* e*tabi*h*d through the
remedial design (RD) process. Future
liability refer* to a responsible party's
obligation to perform any additional
response activities at the tite 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 "he approach
taken in EPA's Interim CERCLA
Settlement Policy. There. EPA stated es
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 and effectiveness
of the remedy, the Intenm Settlement
Policy placed special emphasis on
whether the remedy requires that   *
health-based performance standards be
met As 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(f)(l) are fulfilled and when
consideration of the factors in section
122(0(4) suggests the remedy is reliable.
effective, and enforceable (surh as. for
example, where the remedy include*
numerical performance standards), a
covenant not  to sue (or present liability
may be provided which takes effect
upon approval of the consent decree by
the court On  the other band, where the
criteria in paragraph (0(11 are met  but
the factors in  section 12210(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 a

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                     Federal Register /  Vol.  52.  No. 143 / Monday. |uly 27.  1987 / Notices
                                                                     28041
 demonstration of Iht 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(0(41- When these conditions are
 met. EPA may. in its discretion, provide
 a convenant not to sue for future
 lability 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(f)(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(f)(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
 Ml forth in the ROD and RO.
   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 a
 detailed list of those activities which
 must be completed before certification
 cnn occur.
   Certification of completion under
 section 122(0(3) doc* not in any way
 affect a settling party's remaining
 obligations under the consent decree.
 All remedial activities, including
 maintenance and monitoring, must be
 continued es required by the terms of
 the consent decree.
 C. Reopenert
   Under the CERCLA Interim Settlement
 Policy. EPA required thai there be
 included in every consent decree
reopeners covering situations where
EPA received additional information
•fter the time of the agreement regarding
site conditions or scientific
determinations which indicates that the
site may pose an imro  •:it and.       ^
substantial endargerment to •....• pubiic,',.""
health or welfare or to ttie environment. -
Under section 122(0- a slightly different
approach to reopeners must be followed.
Section  122(0 provides that for future
liability, no covenant not to sue shall be
effective prior to certification of
completion of the remedical 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(8)(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
second 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 currant 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
FRS039.
  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 previsions.  The mixed funding
provision in section I22|b) stales that if
mixed funding is adopted at a particular
site, "the Fund shall be subject to an
obligation for subsequent remedial
actions  at the same facility but only to
the extent that 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 settled 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 funbu . rci.  •- « settlement
'incentive. H.R. Rep V v9-C?r 99th
 Cong.. 2rf Sen. »/ i :wJo|. 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 121(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

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 28042
Federal  Register / Vol. S2. No.  143 / Monday. July  27. 1987 /Notice*
  Policy, although th« imminent and
  i ubstantial endangerment thrnhold hat
  not btcn included. To require a showing
  of imminent and lubttantial
  tndangermtnt would b« inconciilent
  with the provision in tection 122(0 of
  SARA with ref ard to unknown
  conditions ai well at the proviiiona
  concerning future response work in
  section  122JO|6)(C) and section 121 (c).
  Moreover, it is the Agency's view that
  requiring different showings for the two
  reopeners would lead to protracted
  disputes about which reopener applied
  to situations necesitating additional
  response activity.
   EPA believes that in order to give
  settlors  some measures of certainly prior
  to certification, the most reasonable
  means to implement the authority in
  secrion 122(0 ii to specify in consent
 decrees  those pre-certification situations
  in  which EPA would seek further
  remedial action. Those situations at a
 minimum would include the
 circumstances described in the future
 liability  reopenen:
   (1) Discovery of previously unknown
 conditions: and
   (2) Situations where additional
 information reveals that the remedy is
 no longer protective of public health and
 the environment.
 Thus, prior 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.arvafter 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 (allure.
 Pre-certification reopeners for unknown
 conditions and remedy failure apply to
 all covenants not to sue. even to special
 eonveiuntf under section 122(0(21.
   Particularly in the ore-certification
 period, the relationship of the remedy to
 the covenant and the reopenen should
 be carefully considered. EPA may insist
 on broader reopenen where the consent
 decree does 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 reopeners in the
 covenant not to sue based on the factors
 identified in section 122(0(4).
 Nevertheless, once EPA has determined
 what reopeners are appropriate for the
                   pro-certification period EPA will agree
                   in the covenant to institute new
                   proceedings only where those reopener
                   provisions are met
                    Although covenants not to sue must
                   include, at a minimum, the above-
                   descnbed reopeners during the pie*
                   certification period, reopeners are not
                   mandated in all circumstances in
                   covenants not to sue applicable to the
                   period following completion of the
                   remedial action. Two statutory
                   provisions address this period. First
                   section 122(0(2) mandates that EPA
                   issue a special covenant not to sue for
                   future liability in two narrow
                   circumstances: (1) Offsite disposal
                   following refection of an onsite remedy
                   complying with the NCP: and (2)
                   complete destruction of the hazardous
                   substances. Such a special covenant
                   may not contain reopeners for the post-
                   completion period. Second, section
                   122(0(6)(B) specifies that in
                   extraordinary circumstances EPA may
                   exclude a post-completion reopener for
                   unknown conditions. This extraordinary
                   circumstance waiver is only available
                   where other terms in die agreeement
                   provide all reasonable assurances that
                   public health and the environment will
                   be protected. As a policy matter. EPA
                   would also not include the reopener for
                   later-received information relating to
                   failure in a situation where the
                   conditions in section 12(0(6)(B) are met
                   EPA. however, is-barred from granting
                   covenants not to sue without reopeners
                   absent a finding that a special covenant
                   is appropriate or that extraordinary
                   circumstances exist.
                   D. Extraordinary Circumstance*
                    Section l22tO(o)(B) provides that EPA
                   may forego including a reopener for
                   unknown conditions when
                   extraordinary circumstances exist ono*
                   "other terms, condition, or requirements
                   of the agreement... are sufficient to
                   provide all reasonable assurances that
                    Colic health and the environment wiD
                     protected Iron any future releases at
                   or from the facility."
                    The legislative history on this
                   provision indicates that It should be
                   narrowly applied. The House-Senate
                   Conference Report states that "|t|his
                   provision should be implemented in an
                   manner consistent with the current
                   application of the Administration
                   settlement policy as to unknown
                   conditions." Conference Report HJL
                   Rep. No. 99-062.90th Cong-. 2d Seas. 255
                   (1966). By this statement the Conference
                   Committee endorsed EPA's extremely
                   limited use of the extraordinary
                   circumstances waiver for reopeners
                   contained in the CERCLA Interim
                   Settlement Policy.
  In section 12Z(0(6HB1. Congress lists
as relevant factors regarding
extraordinary circumstances: "those
(factors) referred to in (section 122(0JH)
and volume, toxicity. mobility, strength
of evidence, ability to pay. Utigative
risks, public interest considerations.
precedential value, and inequities and
aggravating factors." EPA has already
explained how many of these factors
will be interpreted in the Interim
Settlement Policy.
  A finding of extraordinary
circumstances alone is oot sufficient to
meet the requirements of section
122(f)(8)[B). That provision also
mandates that the unknown conditions
reopener may only be waiver if other
terms of the agreement provide all
reasonable assurances that public
health and the environment will be
protected. One factor which may be
considered  in determining whether all
reasonable assurances have been
provided is whether a settling party has
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 circumstances
exception in the past is where a
responsible party has filed for
bankruptcy. Whether or not a
responsible party's bankruptcy filing   •
presents extraordinary circumstances
will depend on a number of case-
specific factors involving, among other
things, the grounds upon which the party
is Nable. and the type of bankruptcy
relief-liquid A tion or reorganization-thai
is 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 impossible  by
insisting on a convenant narrower dun
the discharge the debtor is entitled to by
operation of the bankruptcy laws.
  Waivers of reopenen under section
022(0(6)fB) will require prior approval
by the Aaaistant Administrators for
OECM and OSWER and the Assistant
Attorney General as provided in the
Interim Settlement Policy. 50 Fit at 5040.

£ Sptciol Convtnonu
  Special convenants not to sue under
section 122(0(2) are authorized for two
extremely limited circumstances. First
under section 122(0(2)(A) a special
covenant is appropriate where EPA
selects a remedial action involving
offsite disposal after rejecting a
proposed onsite remedy which is
consistent with the NCP. This special
convenant it should be emphasized, it
only available where EPA has
determined that an onsite remedy fully

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                     Federal Register / VoL  52. No. 143 / Monday. July 27.  1987 / Notice*
                                                                      28043
 complin with the requirements of the
 NCP. but thai oiuite remedy it rejected
 in favor of offiitt disposal It is not
 •uflicient for EPA to have merely
 considered onsite proposals in choosing
           . Further, the Conference
        '.iL '- deer that this provision
     c''.- y\j& in the context of section
 I2i requiiemenu regarding offsite
 disposal and therefore EPA will only
 grant this special covenant hi decrees
 involving remedies selected under
 section 121. Conference Report H.R.
 Rep. 99-982.99th Cong, 2d Sets. 2S4
 (IBM).
   Second, under section 122(0(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 substances no longer present
 any current or currently forseeable
 future significant risk  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 an 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 HJL Rep. No. 99-062,99th Cong.
 2d Set*. 254-45 (1988). Use of
 "permanent" storage containers or other
 containment technology does not qnttff
 as permanent immobilization under thia
 provision.
  Finally, under either of the two
 circumstances in section 122(f)U). 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 X feet but under present
 health standards only the first five feet
 need to be incinerated. Assuming the
 incineration process meets the
 requirement* of section 122f.f)UHB). 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 29 feet of soil

 IV. Status of laterim Settlement Polky
   The Interim Settlement Policy remains
 In effect to the extent not contradicted
 by SARA or by this or any other
 subsequent guidance. Nonetheless, a
'number of points from that policy era
 worth re-emphasizing
   (1) Covenants not to sue will not be
 issued for redisposal liability unless
 section 122tO(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 sue 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 108 end 107 of CERCLA
 and section 7003 of RCRA:
   (S) The covenant not to sue must
 expressly be limited to civil claims:
   (8) A covenant not to sue for a
 nmedial 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.
   The policies and procedure*
 established In this document an
 Intended solely for the guidance of
 government personnel They era not
 Intended and cannot be relied upon to
 create any right*, substantive or
 procedural enforceable by any party in
 litigation with the United State*. The
 Agency reserves the right to act at
 variance with these policies and
 procedure* and to change them at any
 time without public notice.
 Covenant Not To Sue
   1. A. Except a* specifically provided
 in Subparagraph C the United Slate*
 covenants npt to sue the settling parties
 for Covered Matter*. Covered Matter*
shall include any and all civil liability to
the United Slate* for cause* of action
arising under |{ 108 and 107|a) of
CERCLA and | 7003 of RCRA relating to
the Site.
  B. With respect to future >•-'.• Ul!;. this
covenant not to sue sh'ii i*
-------
 28044
         •Federal Register / Vol.  52. No.  143 / Monday. July V. 1987 / Notice*
 compliance with (ht requirement! set
 forth in thii Consent Decree including
 the Record of Decision and Remedial
 Design for the Site which n incorporated
 herein.
 |FJ» Doc. r-16935 Tiled 1-P-V. MS «m|
 FEDERAL DEPOSIT INSURANCE
 CORPORATION
 Inform]
i CoUswflofl Stibmma* to
 OMB for Revtem

 AOINCY: Federal Deposit Insurance
 Corporation.
 ACTION: Notice of information collection
 submitted to OMB for review and
 approval under the Paperwork
 Reduction Act of 1980.

 Title of Information Collection
   Consolidated Reports of Condition
 and Income (Insured State Nonmember
 Commercial Banks) (OMB No. 3064-
 0032).

 Background
   In accordance with requirements of
 the Paperwork Reduction Act of 1080 (44
 L'.S.C Chapter 35).  the FDIC hereby
 gives nonce thai u has submitted to the
 Office of Management and Budget a
 request for OMB review for the
 information collection system identified
 above.
 ADOMtSS: 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 |ohn 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 26.1987.
 to* PwmaN «eFQ«MiTiON CONTACT:
 Requests for • copy of the submission
 should  be sent to John Keiper. Assistant
 Executive Secretary. Federal Deposit
 Insurance Corporation. Washington. DC
 20429. telephone (202) 896-3810.
 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 21.1987. meeting of the
 Federal Financial Institutions
 Examination Council (FFIEC) and are
 designed to reduce the reporting burden
 imposed by Call Report Schedule RC-J.
 "Reprieing 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 repricing
frequency data. These changes, if
approved would become effective as of
the March 31.1988, report date.
  The FFIEC approved one other change
in the Call Report requirements that U
unrelated to Schedule RC-J. This
Involves a change in reporting the .
"Loans secured by 1^ family residential
properties" item in the loan schedule
(Schedule ROC]. This change would
become effective as of the December 31.
1987. report date.
  As a result of the proposed changes it
U estimated that insured state
nonmember banks, collectively, would
receive an annual reduction in reporting
burden of 121.008 hours. The annual
reporting burden on these banks would
then amount to 688.998 hours.
  Dated: |uly 22.1987.
Fediral Dtposit Insurance Corporation.
Marearet M. Olaaa.
Dtpury Extculivt Sfcrttory.
|FR Doc. 87-189*4 Hitd :-J4-87; fciS §m|
                            FEDERAL EMERGENCY
                            MANAGEMENT AGENCY

                            {rtMA-7t»-Oft|

                            Major Disaster and Related
                            Determinations; Iowa

                            AOIMCT: Federal Emergency
                            Management Agency.
                            ACTION: Notice.	

                            SUMMARY: This is a notice of the
                            Presidential declaration of a major
                            disaster for the State of Iowa, (FEMA-
                            T93-OR). dated July 17.1987. and related
                            determinations.
                            OATtB: July 17.1987.
                            PON •UNTNHI HffOHilaTIOSI CONTACT
                            Sewall Hi Johnson. Disaster
                            Assistance Programs. Federal
                            Emergency Management Agency.
                            Washington. DC 20472. (202) 846-3616.

                            Notice
                              Notice is hereby given that, in a latter
                            of July 17.1987. the President declared a
                            major disaster under the authority of the
                            Disaster Relief Act of 1974. as amended
                            (42 U.S.C. 5121 ttuq.. Pub.  L 93-288).
                            as follows:
                              I have determined thai the damafe in
                            certain snas of tht State of Iowa rasulunt
                            from severe norm* and flooding during tht
                            period May 26 through JV 1M?. is of
sufficient severity and magnitude to warrant
a mator-diMlltr declaration under Public
Law avtta. L therefor*, declare thai such a
ma (or disaster existi m the State of Iowa.
  In order to providt Federal assistance, you
are hereby authoRiad to provide Publr;
Aaaistance only to assist State and local
government! for repair of damage* 10 public
facilities required as a result of this incident.
Consistent with the requirement that Federal
assistance be supplemental Federal funds
provided under PL B3-O8 for Public
Assistance will be limned to 75 percent of
total eligible oasts in tht designated ana.
You an further euthonxed to allocate, from
funds available for time puipo***. such
aaouau as you find necessary for
adnifustrauv* expenses.

  The time period prescribed for the
implementation of section 3l3(a).
priority to certain applications for public
facility and public housing assistance.
shall be for a period not to exceed six
months after the date of this declaration.
  Notice is hereby given that pursuant
to the authority vested in the Director of
the Federal Emergency Management
Agency under Executive Order 12148.1
hereby appoint Mr. Paul Ward of the
Federal Emergency Management
Agency to act as the Federal
Coordinating Officer for this declared
disaster.
  I do hereby determine the following
areas of the State of Iowa to have been
affected adversely by this declared
major disaster Fremont. Mills.
Montgomery, and Page Counties for
Public Assistance only.
(Catalog of Federal Domesuc Assistance No.
83J16. Disaster Assistance.)
(•lias W. lactoe. |r..
Director.
(FR Doc (7-16822 Filed 7-24-C7: fc« am)
         I trie
                                      Major Dtoaatar and Ratotsrt
                                      DotarmiMttona; OMo

                                      AOtucr. Federal Emergency
                                      Management Agency.
                                             : Notice.
                                              r This is a notice of the
                                      Presidential declaration of a major
                                      disaster for the State of Ohio. (FEMA-
                                      796-DR). dated |uly 17. 1987. and related
                                      determinations.
                                      OATIO: |uly 17. 1907.
                                            emo* i
                                                         ITION CONTACT:
                                       Sewall KE. Johnson. Disaster
                                       Assistance Programs. Federal
                                       Emergency Management Agency.
                                       Washington. DC 20471 (202) 646-3616.

-------
                                                OSWER # 9835.2b

  >"el"v.

        j UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
       f                WASHINGTON. DC 20460

                             SEP 2 I 1987
MEMORANDUM

SUBJECT:  Guidance on cht Use of Stipulated Penalriea in Harardous
          Wast* Consent Decrees

FROM:     Thomas L. Ad an a, Jr.
          Assistant Administrator
TO:       Regional Administrators, Regions I-X
          Regional Counsela, Regions I-X
          Watte Management Division Directors, Regions I-X

     I have attached the final guidance addressing the use of
stipulated penalties in civil judicial settleaents under CERCLA
and RCRA Section 7003.  This document reflects conenta which were
received from the Office of Waste Prograas Enfore en ent (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 coapleaent this guidance, the
Agency is considering additional 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. A|Bton Porter, Assistant Administrator for Solid Waste
        a^Bteargency Response
      GcntFA. Lucero, Director, Office of Waste Programs  En foretoent
      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
                   SEP 2 I 1987
 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Off let of Enforeatnc and Ceoplitnet Monitoring
                      1987

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                       TABLE OF CONTENTS

          Guidance on cht Use of Stipulated Penalties
               in Hazardous Waste Consent Decrees

                                                   Page

I.    INTRODUCTION                                   1

II.   GUIDANCE                                       2
     A.   Uae of Stipulated Penalties
         1.  General Rule                            2
         2.  When Penalties May Be Excused
            or Delayed                              4
            a.   Fore* Hajeure Ivrat                 4
            b.   Dispute Resolution Period           5
            c.   Period of Correction  by
                Defendant                           6
            d.   Missed Interia Deadlines            6
            e.   Grace Period                         6

     B.   Amount 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 Remedies                      1 1

     E.   Purpose and Use of this Guidance           12

     APPENDIX - Model Stipulated Penalties Provisions
                              -i-

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 1.    INTRODUCTION
      This docuatnc provides guidance on tht use of stipulated
 penalties in hazardous waste judicial content decrees.   Stipulated
 penalties are  fixed sums of aoney 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
 Cooprehcnsive  Environmental Response, Compensation, and Liability
 Act of 1980 (CERCLA), 42 U.S.C. f 9601 et £e£., as amended, 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 as additional sanctions for  the violation of
 consent decrees.
'/  See "Drafting  Consent  Decrees  in  Hatardous Waste  Imminent
Easararcaaea"  (Office  of Enforcement  and  Compliance Monitoring
(OECM), Office of  Solid Waste  and  Emergency  Response  (OSWER),
May 1, 1985),  "Guidance for Drafting  Judicial Consent Decrees"
(OECM, October 19,  1983),  "Division of  Penalties  with State  and
Local  Governments" (OECM.  October  30, 1985), "Remittance of  Fines
and Civil Penalties"  (OECM..April  15, 1985)  and  the Superfund
Amendments  and Reauthorization Act of 19*6.

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                              -  2  -

      Whila th«  conetpc of stipulatao p«nalti«s also has rclc-
 vanca for adainiatrativa ordara,  diatinctiona batvaan aueh
 ordars and conaanc dacraaa aay nacaasitata aoat dlffarancaa in
 praciaa application.  Guidanct  on uaa of acipulatad panalciaa
 in  adainiatrativt ordara will ba  providad aaparataly.
 II.   GUIDANCE
A.    Uaa of Stipulatad Ptnaltiaa
      1.   Canaral Rula
      In  tha paac, it haa baan OECM policy to includa stipulated
panaltiaa  in aoat conaant dacraaa.  Saa "Cuidanca for Drafting
Judicial  Conaant Dacraaa" at 22.  Moraovar, tha Suparfund
Aaandaanta  and  Raauthoritation Act of 1986 (SARA) raquiraa that
conaant dacraaa which provida for raaadial action*/ contain
atipulatad  panaltiaa.  Saction  121(a)(2) of SARA providaa that:
    ...Each  conaant dacraa ahall alao contain atipulatad
   panaltiaa for violationa of  tha dacraa in an amount
   not  to  axcaad $23,000 par day, which aay ba anforead
   by  aithar tha Praaidant or tha Stata.  Such atipulatad
   panaltiaa ahall not ba conatmad to  iapair or affact
   tha authority of tha court to  ordar coaplianca with
   tha  ap.acific taraa of any auch dacraa.  (Eaphaaia addad).
Howavar. flfeioa 121 doaa not axplicitly rtquira that tvary
         ^_» ^'
raquiraptjlftf a conaanc dacraa hava  a  atipulatad panalty
attach** C» ft.
2/ Although Saction  121  daala  with "rmtdiar  actiona,  it is
~  racooaanoad that  atipulatad panaltias ba includad in consant
dacraaa for raaovala 'as  wall.

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                             • 3 -
      Stcclon  122(1) also permits additional penalty sanction*
 for violations of  th«  requirements of a constnt decree.  Sec-
 tion  122(1) of SARA providt* as follows:
           (1) CIVIL PENALTIES - A potentially responsible
           party which  is a party to an administrative
           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 term 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 may be
assessed for violations of the terms 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 eo which no stipulated penalty attaches.
      Se^Hptftd penalties are seldom applicable to noncoapli-
            9
ance  viB^g^ftry requirement of a decree.  Moat often they are
applicabfe>~tb compliance schedules, performance standards, and
reporting  requirements.  The types of violations for which
stipulated penalties should be required vill 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 involve a "cash out"
 (i.e.,  where cht defendant pays a fixed s\a of aoney to absolve
 himself of his  reoedial  obligations) warrant the 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 task* in addition to
 cashing ouc (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
 tne 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. Fcjrce Majeure Event3/
            *
     One>  ^ptb*  «oet  common reasons  for the noncollection  of
 stipulated Realties  is  the occurrence of a force majeure
 •vent.  A force  maj*ure  event ia  one which  is beyond  cht 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  co  a  charge of noncompliance.  Since penalties do no;
 accrue during this period, che definition of a force majeure
 event should  be narrowly drawn and the burden placed on the
 defendant to  ahow that a force majeure event has 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 nonperforaance occurring during the period of dispute.
However, for  limited types of disputes, EPA may agree to waive
the accrual of penalties during the dispute resolution period.
For example,  consent decrees often permit the Agency to require
that additional work be performed beyond that specifically
provided for  in the work plan.  Where the defendants become
aware of substantial "mid-course corrections" after, the decree
is signed,  it may be appropriate to forego stipulated penalties
during any  legitimate dispute related to the additional work
sought by _HA.
     Stipulated penalties will not bt collected  if  che defendant
wins the dispute.  In addition, in appropriate circumstances
the Agency may us* its discretion not co collect  stipulated
penalties,  in whole or in pare, which have accrued  during che
dispute  resolution period.

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                             - 6 -
     c. Period of Correction by Defendant
     A stipulated penalties provision may indictee that penalties
will accrue until tht violation ia corrected by tht defendant.
To minimize uncertainties and foater timely and full compliance,
such a statement should specify that penalties vill 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 thae penalties for  interim deadline
violations vill. not be sought if the defendant aeets the final
completion date.  Slnct 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, that if the final deadline is missed,
the penalties for interim deadline violations will be sought in
addition to chose which would accrue afcer  che final deadline.
The "Guidance for Drafting Judicial Consenc Decrees" notes that
interim deadline penalcies may be collected up front and placed
inco an ••crow aeeounc, co be recurned  co che defendanc  in the
evenc che final compliance deadline ia  mec.   .Id. at 24.
     e. Grace Period
     Some prior decrees provided  for  a  fixed  period immediately
following nocificacion of a violacion  in which  the defendant
was given the opportunity to  explain  his noncompliance and/or

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                              .  7 -

 correct  it  and  during which stipulated penalties would not
 accrue.   The  length of  such grace period* has ranged froa 3 co
 30  days.  However, by requiring thac every consent decree
 contain  stipulated penalties, Congress has endorsed a strong
 preference  for  strict compliance with the tens of a decree.
 While  the Agency does not endorse the use of grace periods, if
 a violation is  expeditiously  resolved the Agency may use its
 discretion  not  to seek  stipulated penalties.
 B.   Amount of  Stipulated Penalties
 1.   General  Rule
     Since  stipulated penalties art intended to ensure compliance,
 they should be  sufficient to  provide economic incentives to the
 defendant to  comply with the  tens of the consent decree in a
 timely fashion.  The penalty  should not be 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 alto take into  consideration eht gravity of  the
 violatioa end eht degree of han or danger to cht public or
 environment which light result  froo eht violation.
*/ Actual performance  is  required  regardless  of  the  payment
"  of penalties.  Tht  Agency  rtserves  tht right  to seek  injunc-
tivt rtlitf. modify tht dtcrte,  or sttk other remedies in  such
instances.

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                              - .8  -
      Each  stipulated  penalties provision should state a fixed
 amount  per day  co  bt  imposed.  This "SUB certain" puta the
 defendant  on  notice of  the  potential extent of hit obligation
 before  a violation occurs.3/  The "undetermined amount" approach
 (i.e.,  "defendant  shall pay u£ £o S5000/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 oust then
 resolve  the ultimate  amount.
 2.   Escalating Penalty
     Consent  decrees  should provide chat cht per diem aaount of
 the penalty will increase with incremental increases in the
 period of  noncompliance.  For example, a fixed penalty of
 S5.000 per day might  increase to $10,000 per day after the 15th
 day of noncompliance, and $15.000 per day after che 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.
5/ To the  extent  that  EPA  raservts  its  rights  to  seek penal-
~  ties under  SARA  f 109 or  civil  contempt orders,  however,
the "sum certain" argument is  really only an  indication  of
the minimum  amount  for which a consent  decree  violator may
be liable.

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                              - 9 -
 3.    Sharing  Penalties vlch the State6/
      Generally, civil penalties may bt shared with a State if
 the  State haa actively participated in the litigation, actively
 aought auch 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....[TJhe division should
      reflect a fair apportionment based on the tech-
      nical and legal contributions of the partici-
      pants, vithin 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 must 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-
ment  program that stipulated  penalties be collected.  Every
6/ Note that Section  121(e)(2)  of  SAKA gives  States  the  author-
~  icy to enforce  the stipulated penalties  section of  consent
decrees.
II Penalty dlviaion is a matter for discussion only  betvttn
"  the governmental parties,  and  it is Inappropriate for the
defendant to participate in  such discussions.   "Division of
Penalties with  State  and Local  Governments" (OECH, October 30.
1965) *t 3.                 '    .

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                              -  10  -

 effort shall  be made  co  collect stipulated penalties both to
 deter future  noncompliance  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 Collectint 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 the penalty  or to aove the  issue into
 dispute resolution.
      Consent  decrees  should not contain a  limitations period
 for demanding stipulated penalties which results  in the 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 under CERCLA, since the "Superfund" it  partially replen-
 ished by  •onies paid  under  that statute*   Although monies
 collected pursuant to RCRA  generally are paid to  the "Treasurer
 of the United States," stipulated  penalties collected pursuant
*/ Ptnaltita  should  b«fin to accrue on the day on which the vio-
""  lation  actually occurs and not when the Agtncy later discovers
it or gives notice to  the defendant.

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 co  CERCLA  violations are co be made payable Co the "Hazardous
 Substances Superfund."*/  All penalties should be paid by certified
 check,  contain  the  complete address of the defendant, include
 the site identification nvaber if there is one, and reference
 the case name and civil action nuaber.
 D.   Use of Other Remedies
     Collection of  stipulated penalties is not the sole remedy
 for violations of a decree.  There aay be tiaes when the Agency
will seek  additional remedies, such as the court's equitable
contempt powers or  the collection of additional penalties under
SARA or other applicable authorities.  See, e.g.. SARA i 109.
Thus, to preserve the Agency's rights, each section on stipulated
penalties  should state that these penalties are "in addition to,
and  not in lieu of" the Agency's right to other sanctions for
violations of the decree.10/
9/ This is supported by  the  guidance memorandum on "Remittance
~  of Pints and Civil  Penalties"  (OtCh. April  IS, 1985) which
indicates that "all Superfund billings" should go into a lock*
box bank epfciflcally  designated  for Superfund monies.  In
addition, since Section  107(c)(3)  of CERCLA directs chat puni-
tive daaages go into the Superfund, our viev is that CERCLA
stipulated penalties should  be  deposited  there as well.
   The address for the CERCLA  lockbox  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 -

t.  Purpose and U«c cf This Guidance
     Thia guidance and any inctrnal procedures adopted for ic«
iaplcnentation art intended solely as guidance for employees
of the United States Environaental Protection Agency.  They
do not constitute rulevaking 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 nay 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 penalties in cht amounts
•tc  forth in paragraph 9 to the United States [and/or tht 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 matter under this decree in an acceptable manner
and within the specified time schedules in and approved under
this Decree.  [If Defendant fails to meet [specified) interim
deadlines, but meets the final completion date for the work to
be performed herein, the penalties for missed interim deadlines
are excused].  Any modifications of the time 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 noncompliance.
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 noncompliance, unless defendant  invokes
the dispute resolution procedures under section     .  Penalties
shall accrue from tht date of violation reg**0*!*"  °* whether
EPA [or tbs> State] hat notified Defendant of a violation.
Interest  tfctll begin to accrue on the unpaid balance at  the end
of tht 30-4*y ptriod.  Such ptnaltits shall bt paid by ctrtified
check to  ["Treasurer of the United States"  for RCRA penalties, or
"Treasurer of the State of X", or to  tht "Hazardous Substances
Superfund" for CERCU ptnaltits]  and  shall  contain  Defendant1*
complete  and corrtet address, tht tltt name,  [tht site  spill
idtntlfitr number (SS1D)], and the civil action  number.   All
\\l Bracketed  provisions are optional,

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                              A-2


 checks  shall  be mailed  to  [the appropriate Federal lockbox bank
 or  Scace poacal address].

      5.   Neither  the  filing of a pecicion Co resolve a dispute
 nor  che  paymenc of  penalties shall alcer in any way Defendant's
 obligacion  co complete  chc performance required hereunder.

      6.   Defendant  aay  dispuce Plaintiff's right co che scaced
 anount  of penalties by  invoking che dispuce resolution procedures
 under section    herein.   [Ptnalcies shall accrue buc need noc
 be  paid  during che  dispuce resolucion period.  If che Discricc
 Court becomes involved  in che resolucion of the dispuce, che
 period  of dispuce shall end upon che rendering of a decision by
 che  Discricc  Court  regardless of whether any parcy appeals such
 decision].   If Defendant does noc prevail upon resolution,
 Plaintiff has the right to collect all penalties which accrued
 prior co  and  during the period of dispuce. [In che evenc of an
 appeal,  such  penalcies  shall be placed inco an escrow account
 uncil a  decision  has  been  rendered by che final courc of appeal].'
 If Defendant  prevails upon resolucion, no penalcies shall be
 payable.

      7.  No penalcies shall accrue for violacions of chis
 Decree caused by  evencs beyond che concrol of Defendant as
 idencified  in Seccion     herein ("Force Majeure)"]12/.  Defen-
 dant  has che  burden ot  proving force majeure or compliance with
 chis  Decree.

      8.   If Defendanc fails co pay scipulaced penalcies,
 Plainciff may institute proceedings co collecc che penalcies.
 However, nothing  in chis stccion shall be construed as  prohib-
 iting, altering,  or in  any way limicing che abilicy of  Plainciff
 co seek  any ocher 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 ptnalcits shall bt payable
 per violation ptr day co che United States  [and/or Scace]  for
 any noneoBplia.net Idencified in subparagraph  1 abovt'3':
127 with  eht  exception of  stipulsted penalties clauses in
 ~  content decrees  providing solely for cash payaencs,  most
dterttt will  include force majeure clauaes.

!3/ Pltast noct  chac cht penalty amounts tec out abovt are only
"""  examples,  and  cht amount* may vary wich each individual
case.

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                              A-3

            [  Anount/Day      Period of Noncoapliance
              $ 5,000         1st thru 14ch day
              $10,000         15th thru 30th day
              $15,000         31at day and btyond     ]
    10.  No payment* made under chia aection ahall b* tax deduc-
tible.
    11.  Thia section ahall remain in full force and effect for
the tens ox this Decree.

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                                                                                     OSWER  *   9834. 7-1A

                 FecWnJ Reyiter / Vol. 51 No. 218 / Thursday. November 12.  1967 / Nolieei
                                                                                                           43393
                             TACT:
 For information on Registration
 Standard schedule*. contact by mail:
 |«u Frani. Registration Diviiion (TS-
 TtTQ. Office of Pesticide Programs.
 Enviranratnul Protection Agency. 401 M
 SL SW. Washington. DC 20400.
   Office location and telephone number.
 Rffl. 1114. CM «11821 (efferson Davis
 Highway. Arlington, VA, (703) 557-0944.
   For information on public dockets.
 their availability, and docket indicei.
 contact Franklin 0. Rubis (703-557-4434)
 of the Information Servicei Section, in
 Rm. 242 at the above address.
 Registration Standard* pregram is EPA »
 approach to the reassessment and
 reregistration of pesticides as mandated
 by Congress in section 3(g) of (he
 Federal Insecticide. Fungicide, and
 Rodenticide Act (FIFRAJ. The pesticide
 products currently registered by EPA
 contain more than 900 distinct active
 ingredients. Under this program the
 scientific data base underlying each
 active ingredient is thoroughly reviewed.
 and essential but missing scientific
 studies are identified.
  The reassessment may result in
 requirements for submission of data
 needed to evaluate fully the safety of the
 compound according to contemporary
scientific standards. The results of the
 review are reflected in 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 Standards
currently under development It also
serve* to provide the public with an
opportunity to submit additional data.
pertinent to theee reviews. EPA
encourage* the public to provide
 information relevant to the review of
 individual active ingredients  for which
 Registration Standard* are scheduled in
 FY 80. The Agency i* particularly
 interested in receiving the following
 type* 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 M.  An asterisk after
 the name indicate* that the Agency is
 re-reviewing the chemical based on
 information submitted  as a mull 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
Indices. ^"^ the establishment of a
mailing list of person* wishing to receive
the docket indices on a regular basis.
Special Review and Registration
Standard docket* contain, among other
things, materials submitted to the
Agency by parties outside of
government Agency document* mad*
available to person* outside of
government, and memoranda of
meeting* with person* oattide of
government concerning pending Special
Review* end Registration Standards
under development.
  In accordance with I UU«dX2) of
the Registration Standard regulations
and 1154.15(0(3) of the Special Review
regulations, the Agency ha* established
a mailing list for docket indices.
Separate mailing lists are maintained for
Registration Standards an Special
                                       Reviews. Persons on each mailing list
                                       will receive automatically the docket
                                       indices (orupdates to previous indicei)
                                       for Registration Standards or Special
                                       Reviews. These will b
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4S3M
Ftdttd  Reyitsit / Vol. 32. No. 216  /  Thursday.  November 12. 1987 / Notices
experience gained in drifting de
minimi* settlements and upon public
conuntmi received on tht Interim
Guidance referenced above.
   Thu publication dott not address
nttjemenu with de minima landowners
under MCtion 122(g)(l)(B) of SARA.
which will  b* covered by separate
guidance.
POM PUSrrM01 MPOAMA^OAI COSTTAC^
Janice Linett Mail Code LE-134& U.S.
Environmental Protection Agency.
Office of Enforcement and Compliance
Monitoring. Wait* Enforcement
Division. 401 M Street SW_ Washington,
DC 20400. (202) 382-3077.
Erfwert t fa**.
Auociou Enforctmtnt Cauiatlfor Waiu.
  Date October a. 1987.
October 19.1987.

Memorandum
Subject Intenm Model CERCLA Section
  122{g)(4l De Minimi* Waste
  Contributor Consent Decree and
  Administrative Order on Consent.
from; Edward E. Reich. Associate
  Enforcement Counsel for Waste. Gene
  A. Luceio. Director. Office of Waste
  Programs Enforcement.
To: Regional Counsels. Regions I-X.
  Regional  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 minimis
waste contributor consent decrees and
administrative orders on consent under
section 12,?(g)|4) of the Comprehensive
Environmental Response.
Compensation, and Liability Act of I960.
as amended by the Superfund
Amendments and Reau:honzation Act
of 1988. Pub. L No. 99-199. 42 U.S.C
9822tg)(4) rCERCLA"). The attached
models an  designed to be used in
conjunction with the "Interim Guidance
on Settlements with De Minima Waste
Contributors under section 122(g} of
SARA." which was iaeaed on June 19,
198r. and published at 82 FR 24333 (June
30.1907). The models do not pertain to
settlements with de minima landowners
under section 122(gHl)fB) of CERCLA.
42 UJS.C 9S22(g)(l)(B|. which will be
addressed by separate guidance.
  The attached models contain the basic
legal and factual provisions necessary
for a de minimi* contributor settlement
While (he 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 mintmit
                      contributor settlement! without
                      engaging in lengthy, resource-intensive
                      negotiations. The models may be
                      revised after we beve gained experience
                      in drafting de minimi* settlements and
                      have completed our review of public
                      comments received on the interim
                      guidance referenced above.
                      //. Disclaimer
                        This memorandum and any internal
                      procedures adopted for itt
                      implementation are intended solely as
                      guidance for employees of the VS.
                      EnvironmeniaJ 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
                      lake scnon at variance with this
                      memorandum or its internal
                      implementing procedures.
                      Attachments
                      Attachment 1—Interim Model Section
                      122(g) (4) Consent Decree
                        United States of America. Plaintiff, v.
                      fInsert Nomejs) of DefendantfsJl.
                      Defendant! s)
                        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 signs tones 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 Environment*!
                      Protection Agency ("Plaintiff or
                      "United Slates") filed a complaint on
                      (insert date) against (insert defendants'
                      names) ("Defendants") pursuant to
                      (insert causes of action and relief
                      sought ej.. sections 100 and WU) of
                      the Comprehensive Environmental
                      Response, Compensation, and Liability
                      Act of 1980. as amended by the
                      Superfund Amendments and
                      Reauthorizarion Act of 1900. Pub. L 99-
                      499. 42 U.S.C 9606 and 9007(a)
                      ("CERCLA") and Section 7003 of
                      Resource Conservation and Recovery
                      Act as amended ("RCRA"}. 42 U.S.C
                      •0973. seeking injunctive relief regarding
                      the cleanup of the (insert site 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):
                         Whereas, the United States has
                      incurred and continues to incur response
                      costs in responding to the release or
                      threat of release of hazardous
substances at or in connection with (he
Site:
  Whereas, the Regional Administrator
of (he United States Environmental
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):
  Whereas, (insert the amount and
toxicity criteria used to qualify for de
minimis oeaonant under the particular
settlement, ej.. "information currently
known to the United States indicates
that the amount of hazardous
substances contributed to the Site by
each Settling Defendant does not exceed
__* of the hazardous substances at
the Site, and that the toxic or 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 substances at
the Site"]:
  Whereat, the Regional Administrator
has. therefore, determined the amount of
hazardous substances contributed to
this Site by each Settling Defendant end
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
  Whereas, the United States 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 most appropriate means of'
resolving this action:
  Now. therefore, it is ordered, adjudged
and decreed as follows:
L Jurisdiction
  This Court has jurisdiction over the
subject matter and the parties to this
action. The parties agree to be bound by
the terras of this Consent Decree and not
to contest its validity in any subsequent
proceeding to implement or enforce us
terms.
U. Parties Bound
  This Consent Decree shall apply to
and be binding upon the United States
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 thst he or
she is fully authorized to enter mio the

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                  FedaraJ R^uUr  /  VoL 52.  No. 218  /  Thursday. Novtmbtr 11 1987 / Notice*
                                                                                                             43395
 tarns and condition* of this Consent
 DtOM and lo bind legally »»e fury
 represented by him or her.
   (Not* It mty b« necessary  to include
 • Statement of Purpose and/or a
 Definitions provision.)

 III. Payment
   1. Each Settling Defendant thall pay
 lo the Hazardous Subitance Superhuid
 (insert at appropnate either "the
 amount MI forth below" or "the amount
 aet forth ia Attachment _ to within
 __ dayi [insert loall amount of »"•
 e.g.. 10. 30 or 45] of entry of this Consent
 Decree.*
   2. [Note: If a premium payment i*
 included in the dollar amount to be paid
 by each Settling Defendant, the Content
 Decree thould explain what portion of
.the total payment compeniaiei  the
 United Statet for patt and projected
 cottt (including pottible cost  overruns)
 and what portion of the  total payment is
 the premium amount. Lists may be
 attached and incorporated by reference
 at needed. A simple example  follows:
   Of the total payment of $30.000 to be
 made by each Settling Defendant
 pursuant to Paragraph l  of this Section.
$10.000 represents each Settling
Defendants there of the response cottt
including pottible cott overruns, of the
remedial action consistent with  the
Record of Decision ("ROD") for the Site
(which currently are estimated to be
 between *  -  and <    ). and $20.000
represents each Settling Defendant t
share of any cottt which may be
incurred if EPA determine! that the
remedial action consistent with  the ROD
is not protective of public health or the
environment)
   [Note: This model assume* that there
will be only one ROD at the site. If
multiple operable unit RODt will be
issued at the aite. the decree must
dearly identify which ROD ia bainf
referenced and should be structured to
 take into account the additional
remedial action contemplated in. »f~
 the payment covenant not to SIM. and
 reservation of rights provisions.)
   3. Each payment shall be made by
 certified or cashier's check made
 payable to "EPA-Haxardous Substance
 Superfund.- Each check shall  reference
 the site name, the number and address
 of the Settling Parry, and the evil action
 number of this case, and shall "be sent to;
 EPA Superfund. P.O. Box JT1003M.
   Pittsburgh. Pennsylvania 15291
   4. Each Settling Defendant shall
 simultaneously send a copy of its check
 to:
 [Insert neme and address of Regional
   Attorney or Remedial Project
   Manager]
TV. 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
S"'(inn per day of such failure or refusal
pursuant to section 122(1) of CERCLA.
42 OS.C. 8022(1).

V. Certification of Settling Defendants
  (Nolr The following language
regarding disclosure of information
concerning waste contribution* to the
site should be used in cases in which the
de ffiuiiaiit settlement is concluded prior
to completion of PR7 investigations.
especially where information requests
or subpoenas have not been issued:
  Each Settling Defendant certifies thet.
to the bett of itt 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, transponstion or disposal of
hazardous substasces at or in
connection with the Site.]
VI  Covenant not to sue
  1. Subject to the reservations of rights
in Section VTL Paragraphs 1 and 2. of
this Consent Decree,  upon payment of
the amounts specified in Section III.
Paragraph 1. 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 coats or for injunctive relief
pursuant to sections 106 or 10~(e) of
CERCLA. 42 U.S.C 9805 « 960T(a). and
section 7003 of RCRA. 42 U.S.C. BBT3,
with retard to the Site.
  2. In consideration of the United
States' covenant not to aue in Paragraph
1 of this Section, the Settling Defendants
agree not to assert any claims or causes
of action against the United Statet or
the Hazardous Substance Superfund
arising out of Covered Matters, or to
aeek 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 is
intended to be nor shall it be construed
a* 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 Steles may
have against any of the Settling
Defendants for
  (a) Any liability as a result of fsilure
to make the payments required by
Section HL Paragraph 1. of this Consent
Decree: or
  (b) Any mattersnot 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 12201(2) of CERCLA. In
accordance with section I22(j)(l) of
CERCLA. where the release or
threatened release of any hazardous
substance at the site may have resulted
in dameget to na:ural retourcet under
the trusteeship of the United States, the
Region should notify the Federal natural
resource trustee of the negotietions tnd
encourage the trustee to participate in
the negotiations.)
  2. Nothing in this Consent Decree
constitutes a covenant not to sue or to
take action or otherwise limits the
ability of the United States to seek or
obtain further relief from eny of the
Settling Defendants, and the covenant
not to sue in Section VT Paragraph 1.  of
this Consent Decree is null and void if:
  (a) Information not currently known to
the United Statet it discovered which
indicatel that any Settling Defendant
contributed hazardous tubitancei to the
Site in such greater amount or of such
greeter toxic or other hazardous effects
that the Settling Defendant no  longer
qualifies as a de mwimit party at the
Site because [insert volume and toxicity
criteria, t.g.. "the Settling Defendant
contributed greater than __* of the
hazardous lubstances at the Site or
contributed disproportionately to the
cumulative toxic or other hazardous
effects of the hazardous substances at
the Site"]:
  "Note: Unless a premium payment is
being made under Section ID of this
Consent Decree which compensate! the
United States for taking the risk that the
events noted in the reservations of rights
In subparagraphs (b) and (e) below may
occur, those reservations should be
included. A premium may be accepted
in lieu of one or both of the reservations
of rigBn in 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 Slates determine!.
based upon conditions at the Site.

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43396
Federal Remitter  /  Vol. 52.  No. 218  /  Thursday.  November 12. 198: / Notices
 previously unknown to the United
 State*, or information received, in whole
 or in part after entry of thii Consent
 Decree, that the remedial iction |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 ia
 intended 11 e release or covenant not to
 tut for any claun or cauae of action.
 administrative or judicial, civil or
 criminal pait 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 Stales 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
 V1H. Contribution Protection
  Subject to the reservations of rights in
 Section VII. Paragraphs l  and 2.  of this
 Consent Decree, the United States
 agrees that by entering into end  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)C) of CERCLA. 42 U.S.C
M22(gj(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 M"»fM"«
pursuant to Section IX of this Consent
Decree.
The United State* of America
By: —••——•"-^—•^^••-^••^—i—^—
[The Settling Defendant*)
  So ordered this.
     .day of
Unittd Slat ft Dita

Attachment 2
U5
 icdicates that each Respondent listet
 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 subsur
 for transport ot the Site."]
  8. (In one or more paragraphs, ore*
 in summary fashion the factual basis
 EPA's determination in Section III be;
 that the respondents are de 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 settlerm
 An example follows:
  Information currently known to EP.
 indicates that the amount of hazardok
 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 disproportionat
 to the cumulative toxic or other
 hazardous effects of the hazardous
 substances et 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 avallab
 should be attached, and incorporated b
 reference. The total estimated volume
 hazardous substances at the site ahoul
 be noted oa the attachment)]
  7. m evaluating the settlement
 embodied IB this Consent Order. EPA
 has considered the potential costs of
 remediating contamination at or in
 connection with the Site taking into
 account possible cost overruns in
 completing the  remedial action (if ROE
 is completed, insert "consistent with tl
 Record of Decision for this Site"), and
 poaaible future coat* 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
   1 Payments 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
 CotiMnt Order tn • minor portion of
 tbt total response coats it the Sitt
 which EPA, baaed upon currently
 available information, estimates to be
 between I	and *       (Note:
 The dollar figure inserted should include
 the total response costs incurred to date
 as well  a* the Agency • projection of the
 total response cotti to be incurred
 during completion of the remedial action
 at the site.)
   9. EPA ha* identified pertoni other
 than the Respondent*  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
 tranipon to the Site. EPA ha*
 considered the nature  of its case against
 these non-settling parties in evaluating
 the icttlement enoodied in thu Consen:
 Order.

 ///. Determinations

   Based upon the Findings of Fact set
 forth above and on the admmiirrsttvc
 record for thu  Site. EPA has determined
 that:
   1. The (inser site name] me is a
 "facility" at that tern :s defined in
 section 101(9) of CERCLA. 42 U.S.C.
 9601(9).
   2. Each Respondent is a "person" as
 that tern 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)fl) of CERCLA.
 42 U.S.C.-9607(1) and 9622(g)|1).
   4. The past present or future
 migration of hazardous subsunce* from
 the Site commute an actual or
 threatened "release" as that term is
 denned in section 101(22) of CERCLA. 42
 U.S.C. 9001(22).
   5. Prompt settlement with the
 Respondents is practicable and in the
 public interest within the meaning of
 section U2(j)(l) of CERCLA. 42 U-S.C
 9622UK1).
   6. This Consent Order involves only a
 minor portion of the response costs at
 the Site  with respect to each Respondent
 pursuant to aaction I22jg)(l) of CERCLA,
 42 U.S.C 9623UHU
   7. The amount of hazardous
 substances contributed to the Site by
 each Respondent and .the toxic or other
 hazardous effects of the hazardous
 substances contributed to the Site by
 each Respondent are minimal in
 comparison to other hazardous
 substances at the Site pursuant to
 section U2(f )(1)(A) of  CERCLA. 42   .
 U.S.C 9B22U)(1)IA).
   Based upon the administrative record
 for this Site and the Finding* of Fact and
 Determinations set forth above, and in
 consideration of the promise* and
 covenants set forth herein, it is hereby
 agreed to and ordered:
 Payment
   1. Each Respondent ihall pay to the
 Hazardous Substance Superfund (insert
 as appropriate either "the amount set
 forth below" or "the amount MI forth in
 Attachment __ to this Consent Order.
 which is incorporated harem by
 reference."] within __ days (insert
 small amount of time. e^.. 10.30 or 431
 of the effective date of this Consent
 Order.
   2. (Net*: If a premium payment it
 included in the dollar amount to be paid
 by eech respondent, the Conaent Order
 should explain what portion of the  total
 payment compensates EPA for past and
 protected cosu (including possible  cost
 overruns) and what portion of the total
 payment is the premium amount. List*
 may be attached and incorporated by
 reference as needed. A simple example
 follow*;
   Of the total payment of $30.000 to be
 made by each Respondent pursuant to
 paragraph 1 of this section. $10.000
 represents each Respondent'* share of
 the response costs incurred by EPA to
 date and the projected costs, including
 possible cost overruas. of the remediel
 action consistent with the Record of
 Decision ("ROD") for this Site (which
 currently are estimated by EPA to be
 between *     and S	). and 520.000
 represents each Respondent's share of
any costs which may be incurred if EPA
 determines that the remedial action
 consistent with the ROD is not
 protective of public health or the
 environmeat-j
   (Nolae This model assumes that that*
 will be only oaa ROD at the site- If
 multiple operable  unit RODs will be
 issued at the cite,  the order must dearly
 identify which ROD is being referenced
 and should be structured to take into
 account the additional remedial action
 contemplated in. t.g- the payment.
 covenant not  to sue. and reservation of
 right* proviaioas.)
   3. Each payment shall be made by
 certified or cashier's check made
 payable to "EPA-Hazardoua Substance
 Superfund" Each  check shall reference
 the site name, the name and address of
 the Respondent and the EPA docket
 number for this action, and shall be sent
 to:
 EPA Superfund. P.O. Box  371003M.
   Pittsburgh.  Pennsylvania 15231.
  4. Each Respondent shall
simultaneously send a copy of it* check
to:
[Insert name and sddres* of Regional
  Attorney or Remedial Protect
  Manager]

Civil Penalties

  S. In addition to any other remedies or
sanctions available to EPA. any
Respondent who fails or refuses to
comply with any tern or condition of
mis Consent Order shall be subject to a
civil penalty of up to $25.000 per day of
such failure or refusal pursuant to
section 122(1) of CERCLA. 42 U.S-C
9822(1).

Certification of Respondents

  6. [Not*: The following language
regarding disclosure of information
concerning waste contribution* to the
lite ihould be used in csce* in which the
df minima lertlereents is concluded
prior to completion of PRP
investigstion*. etpecially where
informstion requests or subpoenes have
not been issued:
  Each Respondent certifies that,  to the
best of its knowledge and belief, it has
provided to EPA all informstion
currently m its possession, or m die
possession of its officers, directors.
employee*, contractors  or agent*,  which
relates in any way to the ownership.
operation, generation, treatment.
transportation or disposal of hazardou*
substances st or in connection with the
Site.]

Covenant not to Sue

  7. Subject to the reservanans of rights
in Section IV. Paragraph* 9 and 10. of
this Consent Order, upon payment of the
amounts specified in Section IV.
Paragraph 1. of thi* Consent Order. EPA
covenants not to sue or to lake eny
other civil or administrative action
against any of the Respondent* for
•Covered Marten." "Covered Matters**
shall Include any and all dvil liability
for reimbursement of response costs or
for  Injunctive relief pursuant to lection*
106 or I07(a) of CERCLA. 42 U.S.C 9606
or 9B07(a). or faction 7003 of the
Resource Conservation  and Recovery-
Act, as amended. 42 U.S.C. 6973. wi:h
regard to the Site.
  6. In consideration of EPA'* covenant
not to sue in Section IV. Paragraph 7. of
this Consent Order, the Respondents
atree not to assert any claims or causes
of action against the United State* or
the Hazardous Substance Superfund
arising out of Covered Matters, or to
aeek any other cosu. damages, or
attorney »fees from the United States

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 43398
Federal Regular / Vol. 81  No. 216  / Thunday. November  12. 1967  /  Notice*
 •riiiag out of retpor.se activities it (he
 Site.
 Reserve tion of Right*

   0. Noihl»| in thii Consent Order is
 intended to bt nor shall it be eoiutnied
 M • release or covenant not to sue for
 any claim or cauM of action.
 administrative or judicial civil or
 criminal patt or future, at law or in
 equity, which the United States.
 including EPA. may have againat any of
 the Respondents for
   (a) Any liability as a result of failure
 to make the payments required by
 Section IV. Paragraph i. of this Consent
 Order or
   (b) Any matters not expressly
 included in Covered Matters, including,
 without limitation, any liability for
 damages to natural resources. (Note:
 This natural resource damage
 reservation must be included unless the
 Federal natural resource trustee has
 agreed to a covenant not to sue pursuant
 to section 122(j)(2) of CERCLA. In
 accordance with section 122(j)(l) 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 Stales, 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 i*
 null and void, if:
   (a) Information not currently known to
 EPA is discovered which indicates that
 any Respondent contributed hatardous
 substances to the Site in such greater
 amount or of such greater toxic of other
 hazardous effects that the Respondent
 BO longer qualifies as a dt minimi* party
 at the Site because (insert volume and
 toxicity criteria from  Paragraph 7 of the
 findings of Fact. e^.. The Respondent
 contributed greater than __* of the
 hazardous rabaunce* at the Site or
 contributed hazardous substances
 which contributed disproportionately to
 the cumulative toxic or other hazardous
 effects of the hazardous substance* at
 the Site"]:
   (Note: Unless a premium payment is
 being made under Section IV. Paragraph
 1. which compensates EPA for the risk
 that the event* noted in the reservations
 Of right! ifl lubparagraphs (b) and (e)
 may be accepted in lieu of one or both of
                      the reservations in subparagnphs (b)
                      and (c) below:
                        (b) Costs incurred during the
                      completion of the remedial action (if
                      ROD is completed, mean "consistent
                      with the Record of Decision") et the Site
                      exceed (insert dollar amount of cost
                      ceiling): or
                        (c) EPA determines, based upon
                      condition* at the Site, previously
                      unknown to EPA. or information
                      received, in whole or in pan after entry
                      of this Consent Order, that the remedial
                      action (if ROD is completed, inaert
                      "consistent with the Record of
                      Decision") is not protective of public
                      health or the environment.
                        11. Nothing in 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 this 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 end carrying out the terms
                      of this Consent Order, each Respondent
                      will have resolved it* liability to the
                      United States for Covered Marten
                      pursuant to section 122(g)(S) of CERCLA.
                      42 U.S.C. M22(g)(S). and shall not be
                      liable for claims for contribution for
                      •Covered Matters.
                      Parties Bound
                        '14. This Consent Order shall apply'»
                      and be binding upon the Respondents
                      and their director*, officers, employee*.
                      agents, successor* and assigns. Each
                      signatory to this Consent Order
                      represents that he or she is fully
                      authorized to enter into the terms and
                      conditions of mis Consent Order and to
                      bind legally the Ra*pond«nt represented
                      by him or her.

                      Public Comment
                        IS. This Content Order shall bt
                      •ubiect to • thirty-day public comment
                      period pursuant to Mction 12211) of
CERCLA, 42 U.S.C 9822(i). In
accordance with section 122M3I
CERCLA. 42 U.S.C M22(i)(3). EP/<
withdraw consent to this Consent
if comments received disclose fac
considerations which indicate tha
Consent Order is inappropriate.
improper or inadequate.

Attorney General Approve!

  IB. The Attorney General or his
designee has issued prior written
approval of the settlement embodi
this Consent Order in accordance
section I22(g)(4) of SARA. (Note:
Attorney General approval usual!'
be required for de minima consen
orders because the total part and
projected response costs at the sit
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 e
separate numbered paragraph in t!
Determinations section (Section  II.
above: The Regional Administni
EPA. Region u. has determined tr
total response costs incurred to tU
or in connection with the Site do n
exceed SSOO.OOO excluding interest
that, based upon information cum
known to EPA. total response cost
in connection with the Site ere not
anticipated to exceed S90OOOO.
excluding interest in the future." I
this determination requires change
the-model Findings of Feet 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 Re*pon>
that the public comment period pu;
to Sector 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)

US. Environmental Protection Age:
By: [Name)  (Dati)

(Fit DOC. *7-aiar Fu«d ii-

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to
00
03

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               UNITED STATES EMVlRO\'M5\~A'w PROTECTION AG£\C'
                                G*1:\ 3 : 20460
                              APR   T -o?
                                                       9831.6

MEMORANDUM
           '\
SUBJECT:  / Interim E.inal/Guidance Package on Funding CERCLA State
          i Enforcement Actions at NPL Sites
FROM:
           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 aade 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).

-------
                                                       9831.6

     Along with this "interin 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)

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                                                       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.1*

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.  FMO'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 final 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
     Response11 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 review, the Regions will only need
     to keep Headquarters informed of subsequent applications
     through the SCAP and by providing a copy of awarded

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                                                        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 (SMOA) 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 jmjjej; a
     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 djg
     minimis settlement, or in an extraordinary circumstance)
     (Section 122(f)).  Other Section 122 provisions clearly do

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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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                                                  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

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 the State can
       jointly waive use of the procedures outlined in the
       Section.  EPA is developing additional guidance to
       specifically address and clarify the 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 may 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 under 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
OOJ 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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                                                                        9831.63
                              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 these 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 io 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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                                                                          9831.63

GUIDANCE

      Cooperathe  Agreement funding for PRP searches, issuance of notice letters.
negotiation, or administrative and judicial enforcement will onlv be provided at NPL
sites that ha\e 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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                                                                      9831.63

A.   Condition; for funding State PRP Searches Under a Cooperative Agreement

     In order to receive funding  for PRP searches, the State  must agree to include
;!ic .''olloviing 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.

          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 Tile, 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;

          dl   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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                                                                           9831  63
           f.    Conclusions and recommendations for pursuing additional leads or
                enforcement actions (such as unconfirmed PRPs that could not  te
                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.

      1.    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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                                                                      983l.6a

     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, i?arn 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 wrhen
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 Rl/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 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.

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                                                                    9831.6s

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 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 on notice and 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 special covenants. d£ minimis settlements
      or extraordinary circumstancesXSection  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 • 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 CERCL.A. the N'CP 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 with EPA regarding the  use of such  laws or other
      restrictions6.

10.   The State must retain in a central file all 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 recoverv 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 aad actual time schedules aad 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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                                                                           9831.63

B.   Fundable Voii:e Letter and Negotiation Tasks

     This section outlines specific fundable tasks for conducting negotiations *ith
PRPs.  These tasks parallel those conducted by 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 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:

           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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                                                                           9831.63

            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 & minimis 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 Superfund - A Handbook when requesting CA funds
for, and when developing, such a program.

III.   Funding State Administrative  and Judicial Enforcement Actions at NPL Sites

      If EPA and a State agree to designate sites 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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unilateral order and or whether to file a judicial  action for injuncti^e  relief.
Therefore. EPA *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 will 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/RA 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  on notice and negotiation
           time frames (Section 122(e», ensuring adequate put.»c participation
           (Section 122(d)) and requiring that covenants not  to sue contain a
           "reopener" provision (except for special covenants, it minimi* 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

6.    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'.

8.    The State must retain in a central file all  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.
                                  II

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                                                                           9831.63

           i.    Expected  and actual time schedule for litigation (such as motion for
                first disco\ery, first summary judgment, first deposition, etc.).

           j.    Copies of final judgments or consent decrees and accompanying
                documents.
B.    Fundable 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:

      1.    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).
                                          i:

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                                                                           9831.63

      II.   Reviewing proceedings of previous negotiations and settlement offers.

      I!.   Conducting discovery and deposition tasks.

      15.   Preparing pleadings, motions, and  briefs.

      14.   Preparing expert witness testimony.

      IS.   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 Suoerfund - A Handbook  when
requesting CA funds for,  and when developing, such a program.
                                          13

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                                                                          9831.63

                                  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. 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.    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 letterl. 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 (name, title,  address, phone number! to  serve as lead
      agency remedial project manager for the [jilt]. The State has designated
      [name, 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 fsite) have been coordinated with in developing this
      Cooperative Agreement application.*
                                         14

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                                                                         9831.63

C.    Consistency with EPA Policy and Guidance1

      In pursuing enforcement actions against PRPs, the State must assure that such
actions are consistent  *iih 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  Rl 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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                                                                        9831.63

           o     L'.S. EPA. Office of Solid U'aste and  Emergency Response. Office of
                Enforcement and Compliance Monitoring, L'.S. Department of Just;:e.
                Interim CERCLA Settlement Policy. December 5. 1985 (to the extent
                not superseded by Section 122  of CERCLA);

           o     L'.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, Superfund
                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'dt  minimis  settlement,  or in an extraordinary
     circumstance) (Section  122(0).*

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.
                                        16

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                                                                          983l.6a

 For Rl 'FS 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 ftvoe of enforcement action) by
      issuing a ftvoe  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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                                                                         9831.63

      The record shall contain information upon which the decision on selection of
      the response  action v.as based.  The record shall be maintained at or near the
      site, and a cop> shall be maintained at the (name of State lead aaencx
      receh me the 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 \o 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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                                                                       '9831.6b
                              CERCLA FINDING 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 (CO).  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(0 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  !04(aXJ) 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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                                                                     9831.6b
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
con:ra:tors 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 (ASTSUMQ)
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 (SC.AP).
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 Tor  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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                                                                    9831.6b
     There may  be situations where post-SAR.A 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 RD/RA oversight as well when negotiating
with PRPs.
A.J  Conditions for Funding Under a Cooperative Agreement: Oversight of Rl'FS

     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.6

     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.'
     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.
     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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                                                                         9831.6b
      6.    The State must compile and maintain  an administrative record as required
           under Section 113 of CERCLA. the NCP 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 State  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 shouW 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.

     J.    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;  .
     If the enforceable document is a three party agreement (EPA. State, and PRP),
     the CA  need 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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                                                                     933l.6t


      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:

      I.    Organize and participate in technical meetings on the RI/FS  with
           the PRPs,  PRP contractors, and/or EPA.

2.     Field-related  tasks 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 6b


           b.    Conduct discussions *ith the affected  communit> in the  locale 01' the
                site.

           c.    Prepare community relations plans;

           d.    Hold public comment period on the RJ/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:

     I.    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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                                                                9831.6b


• 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 anu 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  io 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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                                                                          9831.6b
                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 Superfund 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(f) 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.'
     Under this scenario, the State would conduct oversight activities in-house.


                                         27

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                                                                            983l.6b
      This means the State would be conducting some review,  field-related, and or
;ommunit> 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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                                                                        985! 6t


                                 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 I (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.   Issuing an Enforceable Order. Decree, or Other Enforceable Document

     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 document) for the fname of site)
     dated [	], requiring a [tvoe 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 providing IsucrJ, dated [	], 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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                                                                         983l.6b
C.    Abiliu oT PRP; 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 Rl/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 Guidance*

      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 thai 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 Rl/FS and RD/RA guidances).

                                        30

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                                                                        98;i.6t
For RD R A oversight:
     "In conducting RD RA oversight funded by this Cooperative Agreement, the
     State agrees to ensure that the private party RD/RA is consistent *ith
     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 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 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 general principles concerning PRP
      payment of RI/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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                                                               9831.6C

   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 i 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 offices 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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                                                               9831.6;

ASSUMPTIONS

     The three following general assumptions should be made:

     I.    One  full time 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 $52,500.

     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 SEARCHES1

     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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                                                                9831.6C
ISSUANCE OF NOTICE  LETTERS AND  NEGOTIATIONS"
     Costs for issuing notice letters and  conducting negotiations vary depending on
the number of PRPs at a site.  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 technical 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  • Technical and Administrative
S284.000  • Extramural
S 10,500  • Legal

$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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                                                                 9831.6:

OVERSIGHT OF RI FS

     RI  FS cnersight costs may increase because of the new requirements of the
Supcn'und  Amendments and Reauthorization Act (SARA).  For a PRP-conducted
RI  FS. SARA requires  competent third party oversight personnel and allows qualified
contractors to conduct  the work.  EPA is currently developing guidance that win
define more clearly what appropriate oversight should entail during hazardous waste
site cleanups (RI  FS and RD/RA).  This guidance when issued should help  w-ith 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
                                        S200.000   •  Extramural
                                        $      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 SO 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 $20
          million by 1989 due to SARA's requirement or more permanent remedies
          which may call  for using alternative technologies.

     o    Design costs are roughly 6  percent or 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.
                                       36

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Average Duration of RD Oversight:

Average Cost Estimate:
Average Duration of RA Oversight:

Average Cost Estimate:
                         983I.6C

4 Quarters (or 12  months)

S 31.500 • Technical and Administrative
SI50.000 - Extramural
$      0 - Legal
                                       $181,500 - Total
12 Quarters (or 36 months)

$ 94,500 - Technical and Administrative
$300,000  - Extramural
5      0  - Legal
                                       $394.500 - Total
                                       37

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           RECOMMENDED PROCEDURES FOR
HEADQUARTERS/REGIONAL REVIEW AND CONCURRENCE OF
   INITIAL ENFORCEMENT COOPERATIVE AGREEMENTS

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                                                             9831.6d

  RECOMMENDED PROCEDURES FOR HEADQUARTERS/REGIONAL REME"
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.  OWPE.

     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 S250K or less, the Director of OWPE'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.

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   CERCLA
ENFORCEMENT
   POLICY
 COMPENDIUM
  VOLUME 2

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         UNITED STATtS ENVIRONMENTAL PROTECTION AGENCY     9 8 9 1.5 ft
                       WASHINGTON, D.C. 20460
                       JAN
                                                     M
                                          ..••„.
                                          \ ^ I  l '
                                          tr* - ?.«•" -
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 Administrator*
Associate Enforcement Counsels
OECM Office Directors
.1.  BACKGROUND

     During the past year, ay  office has worked closely with
the Regions, the Headquarters  program offices, and the Land
and Natural Resources  Division of the U.S. Department of
Justice  (DOJ) to expand the use of direct referral of cases.
On January S, 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 ay prior concurrence.  Zn entering into this
agreement, EPA has taken a major step towards streamlining
the enforcement process and aore fully utilizing our Regional
enforcement capabilities.

     On January 13, 1988, the  Adainistrator signed an interim
delegations package which will allow the Agency to iaaediately
implement expanded direct referrals to DOJ.  A final delega-
tions package is now being prepared for Green Border review.

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                                                          989 ISA
     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-CERCLA 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 Will 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 are raised during this review, EPA
Headquarters will work 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.  CASKS SUBJECT TO DIRECT REFERRAL

     The attached agreement lists those categories of cases
which must continue to be referred through the Office of
Enforcement and Compliance Monitoring (OECK).  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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                                                           9 8915 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 OP REFERRAL PACKAGES

      The  contents of a referral package (either direct to DOJ
 or to EPA Headquarters)  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 (•);

      (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) ;

      (e)   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 ease  may
          require.
     A direct referral to POJ  ia tantJMgyJlti to a certifi-
cation bv the Region that it believes fcfr,e, e^se is suffi-
ciently developed for filing of a complaint, and that the
Region ia ready, willing and ftbit t° provide such legal and
technical support as night be  re^gj^Rftbly required to pursue
the 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*
 Chief,  Environmental  Enforcement Section.  Copies of all
 referral package*  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 OP 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
Headquarters.

     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, OECK 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  the Regional  Office
 in advance of returning the referral.

      D.  CASE QUALITY/STRATEGIC VAUJB

      OECM  will evaluate Regional performance at 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 OZCM, 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.  KAIKTEXANCB 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 trac)cing  system.  Regional
attorneys must continue to report fch« «tatua of all eases.
 including directly  referred eases, on a regular basis  through
use of the  national Enforcement Docket System.  All infor-
mation for  the case 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 you 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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                                                           98 9 15 A
     V

     | UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                      WASHINGTON. D.C. 20460
                                 - ,
                             ... ^ 4
                                                      l*«OOriMf NT
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 be 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 eases).  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.

-------
                                                            989151V
                                -2-
     For all hut CEPCLA 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-11
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 standards
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, DOJ 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 • 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.

-------
                                                           9891.5ft
                                -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  fcr
distribution throughout the Agency.

                             Sincerely,
                             Thomas L. Adams, Jr.
                             Assistant Administrator
Attachments

Approved :
Roger J. Marzulla:Date
Acting Assistant Attorney General
Land and Natural Resources Division
U.S. Department of Justice

-------
                                                            98915 Pr
         RESPONSIBILITIES  AND  PROCEDURE?  FOR DIRECT REFFPRALS
  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 OOJ, 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, at 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 unless 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, 19*6
 (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

-------
                                                            989
                                -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 a_d 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.

-------
                                                           989 L5A
  OSES WHICH WILL CONTINUE TO BE REFERRED THROUGH HEADQf
ALL
Parallel Proceedings  —  Federal  civil enforcement
matters where a criminal investigation of the same
violations is pending
RCRA/CERCIA;
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  F1FRA
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  pretreataent  violations  —failure.
of  a   POTW  to  implement  an  approved   local
pretreataent program

Clean Water Act  permit violations relating  to  or
determined  by biological  methods  or  techniques
measuring whole effluent toxicity

FWSS  cases  to   enforce   against  violations   of
administrative orders which were not  issued  using
an adjudicatory hearing process

-------
                                                           9 89 1.5 A
 WATER
 fcontd. 1        Cases  brought  under  the   Marine   Protection,
                Research  and Sanctuaries Act  (MPRSA)

                UIC cases1


 AIR:            Smelter cases
     1  The  ten   cases   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.

-------
                                                                                         OSWER  *  9834.10

                    Federal  Rtfiittr / Vol. S3. No. 35  /  Tuesday. February 23.  1968 / Notices
   OiaotCounvy..
snasoo
 MS ooc
U«'«00
      Teui..
                               1000.000
   Dated: February i. IBM.
  Attiiiant Adminiitnur for Water.
  |FR Doc ae-3776 Filed 2-22-A& &«5 «m]
  (FUL-ttSO-l)

  Stipejftund Program; Notice Latter*.
  Negotiations end Information
  Exchange

  AOINCY: Environmental Protection
  Agency.
  ACTION: Request for Public Comment.
              ! Agency is 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 Reauthorizenon Act of 1986 (SARA)
 (hereinafter referred to as "CERCLA").
 OATC Comments must be provided on or
 before*April 25.1988.
 AOONISS: 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.
 •OH WimtlM aM*O*MATION CONTACT
 Kathy MacKinnon. 133. Environmental
 Protection Agency. Office of Waate
 Programs Enforcement. Guidance and
 Oversight Branch (WH-527). 401 M
 Street. SW_ Washington. DC 20460 (3E)
 473-8770.
 tue*lAMSMTAJ(V (MfOHMATIOM: 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 10 PRPs. including the use of the
 special notice procedures under section
      ) of CFRCLA. The guidance
establishes separate notification
processes (or 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
CZRCLA and EPA's authorities to
request information from PRPs under
sections 104(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.
  Due: November M. 2067.
|.W. McGraw
Act:ng Attittant Adminitiretor for Solid
Wattt and E.ntrftncy FUtpontt.

INTERIM GUIDANCE ON NOTICE
UTTERS. NEGOTIATIONS. AND
INFORMATION EXCHANGE

Teblt of Cenuntt
1. Introduction
II. Purpose snrl Scop* of Guidance
111. Statutory Authority
  A. Settlements                       *
  B Special None* Procedure* and
   Information Release
IV. Information Exchange
  A. Informauon Requests
  B. Information Release
V. Noue* Letters and Negotiation
   Moratonum for Rl/FS and RD/RA
  A. Purpose of Nonce Letters
  & General Notice Utter
   1. Whether to bane General Nonce
   I Timing of General Notice
   X Recipients of General Notice
   4. Content* of General Notice
C. Rl/FS and RD/RA Special Nonce Letters
   1. Whether to k»u* Rl/FS «nj RD.'RA
   Special Notice
   i Norifyine PRPi When Not Appropriate
   to Uiue  KI/FS and RD/RA Special
   Nonce  •
   1. DO) Rote IB Rl/FS anU RD/RA
   Nefotiauona
   4. Tuning of Rl/FS Special Notice
   5. Tiniag of RD/RA Special Xooee
   a. Recipients of RI/FS.aad Rfi/RA
   "Special Nonce
   7. Contents of Rl/FS and RD/RA Special
   Notice
  D. Conclusion of Negotiation Moratonum
   and Deadline Management for Rl/FS and
    RO/RA-
 VI NoUee Letter, and Ntfoiutlon
    Moratorium for Removal Acuoni
  A. Notice Letten
   1. Whether to Issue Notice for Removal!
   i When to Use Special Nouce
   Procedure* for Removal*
   0. Notifying PRPi When Not Appropriate
   To Utilise Special Notice Procedure* for
   Removal*
   4. DO| Role IB Removal Negotiation*
   S. Tlmini of Notice (or Removal*
   A. Recipient* of Notice for Removal*
   7. Coatenu of Nouc* (or Removtl*
  B. Conclusion of Negotiation Moratorium
   and Deadline Management (or Removal*
  C Administrative  Orden and Negotiation
   Moratonum for Removal*
VTL Ditclaiaer
VUL For Further Information

Apptndiett
Appendu A. Timin| of RD/RA Special
   Notice Letter Appendix B- PRP
   Settlement procen (or RI.'FS and RO/R.A
   Appendix C: Model Notice Utten [To be
   sent to EPA region* *i * later duel

Memorandum
SUBfECT: Interim Guidance on Notice
   Letter*. Nt-goiution*. and Information
   Exchange
FROM: |. Wtniton Poner. A**i*tan:
   Adminiitrator
TO: Regional Adir.iniitnton

I. Introduction

  The Superfund Amendments and
Reauthonxation Act of 1086 (SARA).
which amends the Comprehensive
Environmental Response.
Compensstion. and Liability Act of 1980
(CERCLA). maintain* the importance of
a strong Superfund enforcement
program.1 In particular. SARA
emphasizes the importance of entering
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 il provides the opportunity to
share information about a site snd 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
                                                  • CXXCLA »Mt«l •• iBwnotd b> SA»A oM-WB
                                                « rafcnM 10 m HIM |uidanct M CKRCI.V

-------
                   F«deraJ RtgUter /  VoL  53. No. 35 / Tuesday.  February a.  1988 / Notice*
                                                                       5299
 indudi liming notice letteri. entering
 into negotiation*, end exchanging
 information with PRP*.
   Thi* guidance repla:ei the October
 .2.1964 guidance on ' Procedural (or
 Itiuiag Notice Letter*" and the October
 9.1965 guidance on 'Timely Initiation of
 Responsible Party Searcher Issuance of
 Notice Letter*, and Release of
 Information." * Although cenain
 procedure* and the timing of varioui
 activitiet have been modified, thi*
 guidance rttain* many fundamental
 aipecti of the October 12.19M and
 October 9.196S guidance*. In panicular.
 thi* guidance re-emphatize* the
 importance of timely muance of notice
 letter* and the exchange of information
 between EPA and  PRPs. In addition, this
 guidance incorporate* * moratorium and
 "formal" period of negotiation (referred
 to as a negotiation moratorium) into the
 settlement process. EPA i commitment
 to carrying out these activities is crucial
 for supporting our  fundamental goal of
 facilitating negotiated settlements.

 II. Purpose aad Scop* of Guidance

  The purpose of this guidance is to
assist the Regions in establishing
procedures for the  issuance of notice
letter* to PRPs. for the conduct of
negotiations between EPA and PRP*.
and for the exchange of information
between  EPA and PRPs.
  Thi* guidance addresses the use of
both "general" and "special" notice
letters for removal and remedial actions.
Special notice letter* differ from general
notice letteri because special notices
trigger the negotiation moratorium.  The
negotiation moratorium is the penod of
time when a moratohum i* imposed on
cenain EPA action* and a penod of
"formal" negotiation* is established
between  EPA and PRP*.
  DM of both general and ipecial notice
letter* are discretionary. However,  the
Region* are expected to iaiue general
and apeciil notice* for the vatt majority
of remedial action*. Such notice letter*
will be i»*ued for remedial
investigations/feasibility ttudie* (Rl/
FSs) »nd remedial  d**ign*/rera*dial
action* fRD/RA*). Although it t*
generally appropriate to itiu* a
"removal notice" for all removal action*.
the Region* are not expected to invoke
the eection 122(e) tpectal notice
procedures for most removal*.
  Thi* guidance also addresses the
timing, duration, and conclusion of the
negotiation moratorium. Finally, thi*
guidance diicuue* the process of
information exchange between EPA and
  • Tht*« tuidinct* «••»» luutd urdtr OSMCK
      f Nyrnbtn t*M \ jnd 9634 1 rttntenv*ly
PRP*. including requests for and
rele«*es of site-specific information.
1IL Statutory Authority

A. Settlement!
  Section* 10*Xa). 122(a). and 122(e)(6)
authorize settlement* and **tabu*h
cenain conditions for allowing PRP* to
conduct or finance reipon** action*.
Section 104(a) authorize* EPA to enter
into an agreement with PRP* to allow
PRPs to conduct or finance mpotua
action* in  accordance with section 122 if
EPA determine* that the PRP* will
conduct the reeponae action properly
and promptly. Under eection IM(a).
PRP* cannot conduct the Rl/FS unless
EPA determines that the PRP i* qualified
to perform the Rl/FS. EPA contract*
with or arranges for a qualified person
other than the PRP to assist EPA in
overseeing and  reviewing the Rl/FS. and
the PRP agree* to reimburse the Fund for
the costs EPA incur* in overseeing and
reviewing  the PRP's Rl/FS.
  Section  I22(a| similarly authorize*
EPA to enter into agreement* with PRPs
to perform response actions if EPA
determine* the action will be conducted
properly. Section 122(a) alto provide*
for EPA. when practicable and in the
public interett. to facilitate aettlereent*
with PRP* to expedite effective remedial
action* and to minimize litigation.
  Section  122(e)(6) provide* that no PRP
may undertake  any remedial action at a
facility where EPA or a PRP pursuant to
an administrative  order or consent
decree under CERCLA has initiated an
Rl/FS unless the remedial action has
been authorized by EPA.
B. Special Notice Procedure* end
Information Rtleate
  Section* 122(e) and 122(a) contain
provinon* relating to the ipeciil notice
procedure* and the relnae of
information to PRP*. Section 122(e)
provide* for EPA to utilize the apecial
notice procedure* if EPA determine*
that a period of negotiation would
facilitate an agreement with PRP* and
would expedite remedial action*.
Section 122(e) also provide* for EPA to
releaie certain information to PRP*
Such information include*, to the extent
available,  the name* and addresses of
other PRP*. the  volume and nature of
tubttance* contributed by each PRP.
and a ranking by volume of the
•ubitance* at the  facility.' In addition.
  • Control rocatrusad thii (tort MV ba
limitation* to 9M avaaabtlttjr of information »t wt>
paaaa* of ttw fvMontt action. In a«mcular.
Conema aoiod itui ti.< (U/FS asocial nonet n*ad
aet M accamoanitti by inlo.rmanon on volunu and
naiun of oitit ino nnkins if ihia information *
not avaitaolt ai :ht »tan of m« U.'PS. A »rp«ntt
 thii section provide* for EPA to make
«uch information available in advance
 of the special notice upon request by a
 PRP in accordance with procedures
 provided by EPA.
   Issuance of a ipecial notice triggers a
 moratorium on the commencement of
 cenain action* by EPA under section
 104 or section 106. The purpoie of the
 moratorium i* to provide for a period of
 negotiation between EPA and PRPs. The
 moratorium prohibit* EPA from
 commencing any response action under
 •ection IM(a). and an Rl/FS under
 section 104(b). or an action under
 section 108 for 60 day* after receipt of
 the notice. If EPA determine* that a
 "good faith offer' ha* been submitted by
 the PRP within 60 day* after receipt of
 the ipecial notice. EPA shall not
 commence an action under section
 104|s) or take any action agamsi any
 perton under section 106 for an
 additional 60 days  or commence an Rl.'
 FS under section 104(b) for an additional
 30 days.
   Under section 122(e)(2)(al. EPA may
 commence any additional other studies
 or investigations authorized  under
 (ection IM(b). including the  remedial
 design, during the negotiation penod.
 Under tection 122Je)(2)(C). if an
 additional PRP it identified dunng the
 negotiation penod  or after an agreement
 ha* been entered into. EPA may bring
 the additional party into the negotiation
 or may enter into a separate agreement
 with the PRP. Under section  12?le!(5!.
 EPA it not prohibited frorp ur.ce-ii^r.;
 a re»ponsr> or enforcement action dunr.g
•the negotiator period when there i: a
 significant threat to public health or ihe
 environment.
   Section 122ja) provide* that if EPA
 decide* not to use  the special notice
 procedure* established under section
 122{e). EPA i* required to notify PRP* in
 writing of this decision along with an
 explanation why it  is inappropriate to
 use such procedure*. The decision by
 EPA to u»e or not to uae the tpecial
 notice procedure* i* not aubject :o
 judicial renew.

 TV. Information Exchange

   The exchange of information between
 EPA and PRP* i* crucial for factlitsur.g
 settlement*. Information exchange
 thould be an ongoing proceu of
 communication. EPA use* infonr.atior.
 nein» a»d mforniiiioa rateoaa lamM be Dron*^
 for tmaia pan** wfco »cn»U> laartiirt tha
 nmtdtal action aad mfomauon on ntant. na
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 S300
Federal Retiitar  /  Vol  31 No.  35 / Tuesday.  February 23. 1988  /  Notice*
 obtained from PRP* to determine
 potential liability, to dttirmine the need
 for response, and to support the
 •eltcrion of tht remedy. PRPs UM
 information obtained from EPA to
 organize among themielvet and to
 develop a "good faith offer" to conduct
 or finance reiponae action*.
 A. Information Rtquesa
   EPA may request information from
 PRPi about vanoui activitie* and
 cooditionj under aectioo IM(e) of
 CERCLA and under section 3007(a) of
 the Reiourcc ConMrvanon and
 Recovery Act (RCRA). la addition. EPA
 may iasu* administrative subpoenas
 under section 122(t)|3)(b) of CERCLA.
 Information commonly requeued
 iacJudei 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 PRPs that
 contributed substances to the site.
   Information requests should be issued
 as early as practicable and may be
 issued as * 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
 request letters and administrative
 subpoenas is contained in the
 forthcoming "Guidance on Use and
 Enforcement of Information Requests
 and Administrative Subpoenas under
 CERCLA •sections 104(e) and 122
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                   Federal  Register / Vol. 53. No.  35 / Tuesday. February 23. 1986  /  Notices
                                                                       5301
 EPA and PRPs. Issuance of t nner»'
 notice thould be viewed n a
 mechaniam for initiating negotiation!
 whereat iituance of a apecial notice
 thould be viewed at a mechanum for
 concluding negotiation*.
  The term "informal" negotiations does
 not mean that such negotiation* are not
 •enoui effort* to rtach a tettlement.
 Rather "informal" negotiation* refer* to
 any negotiation* that are not conducted
 a* pan of the negotiation moratonum
 triggered by i**uance of a ipecial notice
 under aection Itt(a). The term*
 "informal" and "formal" negotiations
 are uaed to draw a distinction between
 negotiation* which are and are not
 covered by the  tecnon 122(e)
 moratonum.

 B. General Notice Letter
  Agency notification procedures should
 provide PRPs 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.

 1. Whether To Issue Genera! Notice
  A general notice letter should be
 i»*ued at the vact majority of sites that
are proposed (or or lined on the
 National Priorities Lilt (NPLl where
 negotiation* for the Rl/FS and RO/RA
have not yet been initiated.
Circumitances where it may not be
appropriate to issue the general notice
 include sites wher»« notice pursuant to
previous guidance was issued pnor to
the reauthonzation of CERCLA or  where
the Region is ready to issue a special
notice at the sue. These exceptions are
important for minimizing any possible
disruption to ongoing activities.

2. Timing of Central Notice
  The general notice letter should  be
aent to PRPs as early in the proce** at
poasibie. preferably once the aite baa
 been proposed for induaion on the NPL
 Early receipt of the general notice  will
eniure that PRPi have adequate
 knowledge of their potential liability a*
 well a* a realistic opportunity to
 participate  in aettlemcnt negotiations.
 When a separate information request
 letter has been sent to PRPs pnor-to the
 general notice, the information request
 should be sent as early as possible to
 avoid any delay in issuing  the genertl
 notice.

 3. Recipients of Cencrul Notice
  General notice letters should be tent
 to all parties where there is sufficient
 evidence to make a preliminary
 deipmtnation of potential  liability
under aection 107 of CERCLA. If there is
doubt about whether available
information support* issuance of the
general notice, separate information
request letter* may be sent to tuch
panics pnor 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 notice is issued, the Regions
should provide a general notice to those
additional PRPs. If additional PRP* are
identified after general and special
notices are issued, the additional PRPs
need not  receive a general notice before
receiving the appropnate 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 appropnate
State representative, the State or
Federal trustee if a trustee for natural
resources has been designated, and to
EPA headquarters at the same time
nonces 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
ensunng  that the notice is placed in the
administrative record.4 Providing copies
to the State representative and the State
or Federal trustee is imponant for
ensunng  that States are appropriately
informed about possible future
negotiation*.* Providing copies to
OWPE is essential far-permitting entry
into the Superfund Enforcement
Tracking System (SETS). Entry into set*
will facilitate our effort* to track aite
activities aad to respond to
Congressional and other inquiries.
Direct Regional input of data into SETS
on notice letter recipients i* planned for
FY1968.
  It is not necessary' <° provide copies of
each general notice to the administrative
record coordinator. State representative.
State or Federal trustee, or headquarter*
in instance* where identical notice* are
provided to multiple PRPs. Where there
  • A diKuuion itioMi placine nonet teiitn n tht
•dmiibtirativ* rtcord n cot«rrd m m> fonnceaufl*
•Gvi&acf en tot Admmntranv* Record (M
Stttctina I UnpQHM Action Undtr COICLA' tnd
m itit pmrnMt to tht fonitcatiin* m»i»e»it to iftt
NCIUMMI Continetncy Pun-
  * (Uit participation in Mfoiuuoni u covtftd '«
ih* lonhciMinr.t Inunm Cuidtrct nn RTA-S:att
Rtuiion* in CCRC.4 Inlarttmeni."
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 General  Notice

  The general notice letter should
contain the following components: (a) A
notification of potential liability for
response costs, (b) a di*cu*non about
future notice* and the poasibie future
use of special notice procedure*, (c) a
general discussion about aite response
•cavities, (d) • request for information
about the aite (if appropnate). (a) the
release of certain site-specific
information (where available), (f) a
discussion about the mem* of forming a
PRP steering committee, (g) a notice
regarding the development of an
administrative record, and (h| a
deadline for response to the letter and
information on the EPA representative
to contact
  a. Potential liability: The letter should
inform panics that they are potentially
liable for response costs under section
10? of CERCLA. including the costs of
conducting the Rl/FS and RD/RA. The
letter should define the scope of
potential liability and should briefly
explain why the panics have been
identified as PRPs.
  b. Future notice under tection I22,'ol
and lection 122le>:Tht letter should
indicate that EPA will notify the party at
an appropnate 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
aection 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 notice
procedures.
  The letter should also indicate that a
•action 122(e) special notice will invoke
the negotiation moratorium. The letter
should make clear that issuance of a
section 122Je| special notice letter is
discretionary and may be used if EPA
determines that use of such procedures
would facilitate en  agreement and
expedite remedial action. The letter
should alao explain the purpose of the
special notice and the subsequent
negotiation moratorium. Informing PRP*
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 m such
negctiations.

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 5302
Federal Register / Vol. S3. No.  35  / Tuesday.  February  23. 1986  /  Notices
   c. Sue response activities: The letter
 should generally diKate the activitie*
 EPA plans to undertake at the lite.
 Where appropriate. such activities
 •houJd include tcheduled it in or
 completion dates for the Rl/FS or RO/
 RA. Instances when it may not be
 appropriate to provide itan or
 completion datei include situation*
 where the general notice i» 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 iM(e) of CERCLA and/or
 section 3007(a) of RCRA if • 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
 122|el."
  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
sbouldrequest that the PRPs identify a.
member of their organization who will
represent their interests. In addition, the
letter should recommend that PRPs form
a steenng 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 uaed as a vehicle for
informing PRPs of tha availability of an
administrative record that will contain
 documents which fora the  basis 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  steenng
 committee if one rias been formed. The
                    letter should also provide a cut off date
                    forwiuntAry compliance with
                    informtiion requests (if a request for
                    information is contained in the general
                    notice). An 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's conduct of the Rl/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 nouce 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 moratorium 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
                    Tint 60 days of the moratorium. The
                   .negotiation moratorium would conclude
                    after 00 days if the PRPs do not provide
                    EPA with a "good faith offer."
                      The initial  60 day moratonum 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
                    1. Whether To Issue Rl/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 Rl/
                    FS and RD/RA special notice
                    procedures in the vast majority of cases.
                      There are. 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
believes 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 lack the resource*  to conduct
response activities. (S) where there are
ongoing negotiations, or (6) where notice
letter* were already sent prior to the
reauthorixah'on of CARCLA and ongoing
negotiations would not benefit by
issuance of a special notice.
  Special notice* may be issued for
operable units of remedial actiona. The
test for determininf whether to issue a
special notice for an operable unit ir
generally the same as for full-scale
remedial actiona. The general
expectation is that separate special
notices will be issued for each separate
operable unit a* long a* isiuing 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 unit* if
appropriate under the ercumstances 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
unit(s) or to cover several operable
units.
2. Notifying PRPs When Not Appropriate
To isaue Rl/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
PRPa in writing of that decision. The
notice must indicate the reason* 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 for placement m the record.
Such notices should be provided as soon
as 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 122a) notice
should be uaed 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  / Notice*
                                                                                                                5303
  administrative record containing
  technical documents tupportin| the
  Agency i derision on the selection of
  remedy. The notice should indicate that
  the record it open for public inipection
  and comment  and should specify where
  the record will be or has been located.
  X D0| Role in Rl/PS and RD/RA
  Nefotiationt
    The Regions should notify the Chief of
  the Environmental Enforcement Section
  in the Department of justice (DOJ) pnor
  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 Waste 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
  RJ/FS negotiations involve consent
  orders, notice  to  DO) on the Rl/FS is not
  ordinarily necessary. However, where a
  site is ir. litigation or where settlement
  by consent decree is expected. DO|
  thould be notified at least 30 days prior
  to issuing the Rl/FS specie! notice. In
  addition, where the resolution of the
  matter by an administrative order is
  expected to involve a compromise of
  put or future response costs and the
  total response  costs will exceed
 tSOO.OOO. DO) is to be notified. DOI's
 rote will be to  review the compromise of
  the claim pursuant to section 122(h)(l|
  but not to review the administrative
  orderfor the Rl/FS. For RD/RA
  negotiations, the notice should be sent
  to DO) 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 Region* should
  consult with the Chief of the
  Environmental Enforcement Section
  prior to tending a copy of any draft
  content decree or aay outline of a draft
  content decree to PRPs. The Regions are
  encouraged to include • draft content
  decree with the RD/RA special notice or
  toon thereafter as discussed below.
  4. Tuning of Rl/PS Special Notice
   It it important  that PRPs receive the
  Rl/FS special notice letter as soon as
  practicable. Of greater importance, the
  letter must be  senf sufficiently in
  advance of obligations for the Rl/FS to
  that negotiations do not delay the
  initiation of the Rl/FS by the Fund in the
  event the negotiations do not result in
  an agreement providing for  the PRPs to
  conduct or finance the Rl/FS. Timely
  receipt of the special notice will have a
significant effect OB the PRPs ability for
meaningful participation in formal
negotiations.
  The Rl/FS special notice letter should
be sent to PRPs no later than 90 days
prior to the scheduled date for initiating
the Rl/FS. The scheduled date for
initiating the Rl/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' monohum does not delay
initiation of the Rl/FS in the event
negotiations do not result in a
settlement. The time for service by mail
thould be taken into account

S. Tuning 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"
negotiations must occur throughout the
process and in advance of the special
nonce. 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 it 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
under appropriate arcuaunucm.
Appendix A contains illustrations of the
three approaches discussed below.*
  a. Central Approach: litue tpecial
notiet whin nitote draft FS and
propoiedplan for public 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 60 day negotiation mononum.
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 end
approvel process. The remaining 30 days
of the extended negotiation moratorium
is concurrent with the initial phases of
the  remedial design. EPA's 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 dose 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 eariy yrt
concrete stage in the process. F.arly
participation may be especially •
advantageous :n situations where PRPs
have not been •previously or
substantially involved in Rl/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. Alternative Approach: Issue special
notice prior to releaie of dro'r FS oni.'
proposed plan for public comment.
Although the Regions generally will
issue the RD/RA special nonce when
  « TW DM ptnod dmctvd
diKuMM* tad Oloimwd ia Appoa&i A itfttci
~bni CM*" (Ctiurvn **tft vtneu* mpenw «ad
mlorawMm tetnnttti «i* *ip*ct*d to bo umtd
out without d*i*y. For tuiripl*. *• public oMMMni
toned  IMII X dayi «nd don noi ukt usto icomni
• pMtibi* tmruion.
  ' Tin picpeud ptan nfen to m* outi.c
S*jr«ci»*)uen dotvnom d«»«ione Bvr»y«m 10
•CUM V.rtt). Tbi» a * miHltljI. non.irtnnital
dewtMtii UMI dncnb** A* thtnuon T. th* FS
tad tpooAa wid ft*. An * bo«! .!...»•.• of EPA .
Draftrnd ilnnuint. A man atunre encutujn i>f
ttw pfovowd pun mil bo WMIIMC ••» "•
fcmftcommi "Ciudinc* on Ooeumrn-.ru r»c»>o
-------
 5364
Fadaral Reguttf  /  Vol. 53. No. 35 / Tueiday. February a.  1988 / Noticw
 the dnft FS and propoaed plan are
 nleattd to the public (or comment, the
 Region* art encouraged to iitue the
 •peaaJ notice earlier in ihe procesi if
 tai* action would facilitate the proipecu
 for reaching a icttlement. If a Region
 choptts to follow this approach, the
 Region ihould include with the special
 notice a summary or fact aheet of the
 alternatives EPA has screened and the
 alternatives the Agency is currently
 conaidering.1
  Aa shown in Appendix A. the RO/RA
 epacial notice may be issued pnor to
 EPA s release of the draft FS and
 proposed plan. Issuance of the special
 notice triggers the initial 60 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 period. The public comment
 penod is concurrent with the first 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 the ROD if
aot affected by the negotiation
moratorium. The ROD may be signed at
•ny point after the  cloae 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
circumaiances it may be appropriate to
issue the special  notice early in the
process, especially in situations where
 than ta a relatively small group of PRPt.
 it ia clear what the remedy ia* likely to
 be. and-the remedy ia not likely to be
 conxroversiaL
  Where circumstances permit tttuanrt
 of the special notice at this early stage.
 an advantage to this approach ia that
 Ihe ROD review and approval procni
 and the negotiation moratorium could be
 concluded at about the same time. This
  • R*|MM ef • MMBOMnr or bet trxw en tht
•IwiMiivn thii M*t tarn txniMd tad UM
•iMmitm* thai «n bmaf eon*id*r
                    would help assure that cleanup occurs
                    as soon as possible whether through a
                    negotiated settlement or Fund-financed
                    action. In addition, there would be an
                    early opportunity to inform PRPs of
                    various remedial alternatives under
                    consideration by EPA pnor to EPA's
                    identification of the proposed plan.
                    Early participation may be
                    advantageous where PRPs have not
                    been previously or substantially
                    involved in Rl/FS activities.
                      c. Alternative Approach: l$$ue special
                    notice when the ROD it tigited.
                    Although the Regions generally will
                    issue the RD/RA opecial notice letter
                    when the dnft FS and proposed plan
                    are released to the public for comment.
                    there may be some limited
                    circumstances where it is appropriate to
                    issue the notice Inter in the process (r.e.
                    when the ROD is signed). This approach
                    may be followed, however, only where
                    the Region can provide adequate
                    justification and where the Region has
                    obtained prior approval from
                    Headquarter*. Approval must be
                    obtained in writing from the Directors of
                    the Office of Waste Program*
                    Enforcement and the Office of
                    Emergency  and Remedial Response.
                      As shown in Appendix A. under this
                    approach the RD/RA special notice
                    would not be iaaued until the ROD is
                    signed. Thu*. the entire 60 to 120 day
                    negotiation moratorium would'not occur
                    until the remedial design phase.
                      An advantage to this approach is that
                    since the ROD  would be signed and the
                    remedy would be selected at the  start of
                    the RD/RA negotiation moratorium, the
                    PRPs would know  precisely which
                    remedy the "good faith offer" and the
                    negotiation* should focus on. In
                    addition, since the negotiation* would
                    begin after the  cloae of the public
                    comment period, the PRPs and EPA
                    would have tho benefit of knowing the
                    public comment*.
                      Tfce major disadvantage to this
                    approach ia that the negotiation
                    moratorium would not occur until the
                    end of the proces* (i.e. not until the
                    beginning of the remedial design phase).
                    laauing the  special notice at this point
                    would create the greatest potential for a
                    •ubsequent delay in implementing the
                    remedy.
                      tnataace* when it may. however, be
                    appropriate to issue the apecial notice
                    later in the  proees* (La. not until  the
                    ROD ia signed) may be where more time
                    ia needed to conduct informal
                    negotiation*, where the site is
                    particularly complex, or where there is
                    an extraordinarily large number of PRPs
                    (e.g. hundreds of PRPt). Another
                    example may be where there is little
expectation that a Fund-financed
remedial action will occur in the near
future at an enforcement-lead sue. If
Fund-financed activities are not
expected to occur and a later
moratorium would facilitate cleanup, it
may be leu important to initiate and
conclude negotiation* early in the
process.

6. Recipient* of Rl/FS and RO/RA
Special Notice

  The Rl/FS and RO/RA special nonce
letters should be sent to all panics
where there i* sufficient evidence to
make a preliminary determination of
potential liability under section H)7 of
CERCLA. If there it doubt  about
whether available information supports
issuance of the Rl/FS and  RD/RA
special notices, separate information
request letters may be sent to such
parties pnor to issuing such 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.
  Section m(e)(2)|C) authorizes EPA to
bring additional panics into
negotiations or to enter into a separate
agreement with panics when additional
PRPt an identified during the
negotiation period or after an agreement
has been entered into. The Region* may
provide a special notice to additional
panic* if they are identified after
iaauance of the Rl/FS special notice
letter. However, issuance of a special
notice to additional parties would, not  .
change the duration of the negotiation
moratonum. The special notice may
invite PRPs'to participate in remaining
negotiation*, but would not extend the
pre-exi*ung negotiation moratorium.
  Copies of the special notice* should
be provided  to the Regional
administrative record coordinator, the
appropriate State representative, the
Sate or Federal tnutee if a trustee for
natural resource* ha* been designated.
and-to EPA headquarters at the same
time notice*  are sent to PRPs  The
copie* of nonce* to headquarter* thoulJ
be aent to the Information Management
Section within the Program Management
and Support Office of the Office of
Waate Program* Enforcement (OWPE).
  Providing copra* to the administrative
record coordinator ia important for
enauring that the notice to be placed in
tat BBCord Providing copie* to the State
representative and the State or Federal
trustee ia important for eruuring that
State* are appropriately informed about
pOMibl* future negotiation*. Providing
copie*  to OWPE i* etaential for
permitting entry into the Superfund

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                    Federal Register / Vol 51 No. 35  /  Tuesday. February 23. 1968 I Notices
                                                                                                               5305
  Enforcemtm Tracking Sytttra (SETS).
  Entry into SETS will faaliiate oar efforts
  to trick site ecnvtaes and to respond to
  Congressional and other inquiries.	
  Dine: n< gional input of data into SETS
  on notic* letter rtcipienn i» plannad for
  FYiaaa.
   It is not necessary to provide copie* of
  eeeh ipccnl notice to the administrative
  recotd coordinator. Siate representative.
  Suta or Federal truttee. 01 headquarters
  in instances where identical notices an
  provided to multiple PRPi. Where there
_«• muluple PRPt at a site. • copy of one
  special notice with a list of other parua*
  who have received the letter would
  lufTice.

  7. Contenn of RI/FS and RD/RA Special
  Notices
   The  RI/FS anc° RD 'RA special notice
  letter* should contain the following
  component!: [a] A notification of
  potential liability, (b) a discussron about
  the special notice and subsequent
  negotiation moratorium, [e) a discussion
  about the response activities to be
 conducted, (d) a copy of a statement  of
  work or workplan and a draft
  administrative order on consent for the
  RJ/FS.  (e) a copy of a draft consent
 decree for the RD/RA fif possible), [f] a
 diaenaion about whtt comrirutes a
 "good faith offer" for the RI/FS. (g) a
 discussion a boot what cotrstirofes a
 "good faith offer for the RD/RA. (h) a
 release of certain iite-spec:fic
 information (where available and
 appropriate!, (i) a demand for payment
 of EPA costs incurred to date, (j) 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 necnsvy
 particularly if th» RI/FS or RO/RS
 special notice references the general
 notice.
 - b. Special notice and forme I
 negotiation* The lauar should discuss
 til* purpose of the special notic* and the
 subsequent Defoliation moratorium. The
  level of detail will depend upon whether
  the PRP has received the general notice  •
 end whether the general notice provided
 en adequate discussion. At a minimum.
  the letter should make clear that EPA is
 inviting PRPt to participate in "formal"
 negotiations for PRP conduct of the Rl/
 FS or RD/RA and that this letter
 automatically triggers the formal
 negotiation period. In addition, it ia
  important that the special notice
  indicate the date the negotietion
 moratorium will conclude in the absence
of and in the event of a "good faith
offer." Finally, the letter should explain
thai a consent order or consent decree
should be finalized by the end of the
moratorium.
  c. /{expense actions to- be conducted:
The lettar should identify the response
activities EPA plans to conduct at the
site and provide scheduled delta for
initiatm* rach actrritrea 3 appropriate.
  d Statement of work or worttpiatt aad
draft admiratumive order on content
for RI/FS tpeciaJ notice: The letter
sBMtid provide e starement of work or
workplan and draft administrative order
(AO) on consent. Such information ia
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
enco\vaged 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.
  a. Draft cement decree for RD/RA
special notice: The letter should contain
a copy of the draft consent decree if
possible. It  is important that PRPs have
the draft consent decree at the sun of
negotiations or soon thereafter since the
decree contains important information
which will issist PRPs in developing
their "good faith offer" to  EPA.
  f. "Good fait^i offer"for RI/FS: T^t
letter should indicate that a "good faith
offer" is a written proposal which
demonstrates the  PRP's qualifications
and willingness to conduat or finance
the RI/FS. A "good faith offer" for the
RI/FS should include the following:
  • A statement of the PRPs willingness
to condut or finance the RI/FS which is
generally consistsct with EPA's
statement of work or work plan and
draft administretire order on consent or
provides a sufficient basis for further
negotiations:
  • A paregraph-by-paragrspb response
to EPA's statement of work or workplan
end draf: administrative 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. Tnis should include a requirement
that PRPs identify the fan they expect
will conduct the work or that PRPs
identify the process they will undertake
to select e firm:
   • A demonstration of the PRPs
financial capability to finance the RI/FS:
   • A statement of the PRPs willingness
to reimburse EPA for the coats EPA
incurs in overseeing the PRP conduct of
the RI/FS as required by section
104(a)(l):and
  • The name, address, end phone
number of the perry or steering
committee who will represent the PRPs
in negotiations.
  g. "Goodfaith oner"for RD/R.4: The
letter should indicate that a *good faith
offer" is a written proposal which
demonstrates the PRPt 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 wiltingnen
to conduct or finance the 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-paragraph response
to EPA's draft consent decree, including
a response toother documents that may
have been attached to the decree such
as a technical scope  of work for t&a
proposed plan or access or
preauittorization 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 the
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 statement of the PRPs wiili.igr.ess
to reimburse E?A for past response and
oversight costs:
  • A discussion about the PRTs
position on releases  from liability and
reopeners  to liability, and
  • The name, address, and phone
number of the party or tteenng
committee who will represent tee PRPs
In negotiations.
  b. Information re/eossr To the extent
saeh 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 RI/
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 coats the Agency
has incurred ia conducting response
activities at the site  pursuant to section
10TU). Tne letter should identify *e

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 3306
Federal RggUter  /  Vol. S3.  No. 35  / Tueiday. February a. 1986  /  Notices
 action EPA undertook and tin cost of
 conducting ttw action. The latter should
 •l*o indicate that the Agency
 anticipate* expending additional funds
 on activities covered by this notice and
 other specified future activities. Finally.
 the letter should demand payment of
 interest for past and future response
 costs incurred by EPA pursuant to
 section 107(a). Notice letters should not
 be delayed 10 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 availabiliry of an
 administrative record containing
 documents that form the bans 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
 ihould ulio indicate where the record
 will be or has been located.
   k. PRP response and EPA contact
person: Th* letter should encourage
 PRPs to notify EPA of their interest to
participate in negotiations. The letter
should 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 of the
EPA representative to contact.

D. Conclusion of Negotiation
Moratorium and Deadline Management
for Rl/FS and RD/RA.
  At the conclusion of the section 122|e|
negotiation moratorium, the Regions
should have a fully negotiated
admmiUMtivo order on consent for  the
Rl/FS and a fully negotiated consent
decree f the PRPs. A signed document
is  necessary to show that an agreement
Sas. in f*ct. been reached.'
   At the conclusion of the 120 day
moratorium fur the RDj/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
••tension 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.
  • P+t-SARA «utd i. 1M1I. Thnv
lunt«ncn *rt b*<«e fmiMU lo includ* SAKA'i
                      lo instances where an agreement hn
                    been reached and fully negotiated but
                    PRPs have not yet obtained signatures.
                    it may be necessary to obtain an ,
                    extension to the negotiation moratorium.
                    Extensions may also be necessary
                    where the agreement has not been fully
                    negotiated but all major issues are
                    resolved and outstanding issues are well
                    defined and final language is imminent.
                    Extensions to the negotiation
                    moratorium can be obtained only in
                    certain circumstances as discussed in
                    the February 111967 "Interim Guidance:
                    Streamlining the CERCLA Settlement
                    Decision Process.">0
                      The timing of special notice letters
                    will have a significant affect on our
                    ability to successfully conclude
                    negotiations at the end of the
                    moratorium period. The Streamlined
                    Settlement Policy provides for two
                    different processes for obtaining
                    extensions for the Rl/FS and RD/RA
                    moratoriums. The policy indicates thdt
                    the Regional Administrator has the
                    discretion to terminate or extend
                    negotiations for the Rl/FS after 90 days.
                    However, extension of negotiations
                    beyond an additional 30 days should be
                    authorized by the Regional
                    Administrator only in limited cases.
                      Relating to (he RD/RA moratorium.
                    the Streamlined Settlement Policy
                    provides for either Regional or
                    Headquarters approval of an extension
                    under certain circumstances. An
                    extension to the ISO day RD/RA
                    moratorium may be granted for an
                    additional 30.day* by the Regional
                    Administrator when settlement is likely
                    and immineni. An additional extension
                    beyond the 30 days may be approved
                    only by the Assistant Administrator for
                    the Office of Solid Waste and
                    Emergency Response (OSWER) and
                    only in rare and extraordinary
                    circumstances.
                      This guidance re-emphasizes the
                    importance of meeting the 90 day
                    moratorium for the Rl/FS and the 120
                    day moratorium for the RD/RA. To aid
                    that policy, this guidance identifies three
                    circumstances .where the Regional
                    Administrator and Assistant
                    Administrator for OSWER nay consider
                    granting such extensions for the RD/RA
                    moratorium.
                      First, it may be appropriate for the
                    Regional Administrator or the Assistant
                    Administrator to extend the 120 day
                    moratorium for the RD/RA If EPA
                    •elects a remedy in the ROD which is
                    significantly different from the Agency's
                    stated preference in the proposed plan.
                       •Tim iwJanr* •«• i**Mil under OSWfX
                           ••»: i.
This could mean that the focus of
negotiations could change significantly.
requiring, additional tune 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 period
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 m
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
enforcement-lead sites. It may be
appropriate for the Regional
Administrator or the Assistant
Administrator to extend the 120 osy
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 D0| may be an important
mechanism for providing the necessary
impetus for reaching a voluntary
settlement In many cases it may tx
appropriate to issue a unilateral
administrative order concurrent with thr
referral                          .  -

VL Notice Utters 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 three notice letters. The
notification process for removals will
involve only one notice letter which m»y
or may not invoke the section l^luj
special notice procedures as discussed.
below.

A. ,Vof/c* Lettcn

1. Whether To Issue Notice for
Removals

  The Regions should attempt  to contact
PRPs prior to initiating a Fund-financed
removal action  to inform PRPs of their
potential liability where EPA will incur
response coats or to secure a private
parry response. This guidance

-------
                   Federal Regular /  Vol.  53. No. 35 / Tuciday. February 23. 1MB / Notice*
                                                                     5307
 tacauraftt tht Region* to seek PRP
 response through • wnttea notice letter
 but the Regiont may contact PRPi
 verbefly (with a wntten follow-up
 notice). This is consistent with the
 guidance on "Issuance of Administrative
 Orders for Immedtsre Removal Actions"
 (2/21/HI.
  The Regions should issue nonce
 letters to readily identifiable PRPs for
 removal actions m the vast maionty of
 eases. The content of tire notice will
 vary depending whether the notice will
 be used simply to notify PRPs of their
 potential liability for an action EPA has
 already reken or is about to take.
 whether the notice will be used re
 encourage a private party response
 through "informal" negotiations (i.e.
 negotiations not triggered by the section
 I22(ef special notice procedures), or
 whether the notice writ be used as a
 mechanism for irrrokmg the tenor.
 I22[e} special nottce procedcrej which
 provide for "formal" negotiatror.T
 between EPA and PRPs.

2. When to Use Special Notice
Procedures for Removals
  The Regions should consider  using the
section 12C|e! 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 period" begins once a sita
evaluation is completed. This means
that for the vast maionty of removal
actions the Regions will not be required
to utilize the special notice  procedures.
It is not appropriate to utilize special
notices for most removal actions
because the subsequent moratorium
may interfere with the Agency's ability
to implement tht remedy in a timely
manner. In addition, it may not  be worth
expending the  time and resources to
enter into formal negotiations wben a
removal will be a relatively short term
and inexpensive response action.
  The Regions should include the
following factors in their determination
of whether it is appropriate to utilize  the
 special notice procedures for removals
 with a six month planning lead rime;  (1)
 Whether viable PRPs have  been
 identified. (2) whether the PRPs are
 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 122|el.
  In determining the PRPs viability, the
 Region should inquire about the PRPs
financial and technical capability (or
conducting and/or financing the
removal action in an effective and
timely manner. In determining the PRPs
willingness to undertake or finance the
removal action, the Region should, at a
minimum,  obtain a verbal agreement
from the PRP» prior to issuance of tht
special notice. In determining whether
the special notice may delay
implementation of the remedy or in
determining whether to enter into
"informal" rather than "formal"
negotiation*, the Regions should
consider whether the section 122|e)
negotiation moratorium would interfere
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 for any
response acrion is clearly discretionary-
However, section 122(aJ 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's decision nor to utilize the
special nonce procedures. The notice
should, therefore, inform PRPs of EPA s
decision not to utilize such procedures
whtn this determination 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 (he Environmental Enforcement
Section of DO] prior to"issuing a  special
notice latter for 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 cost* will exceed
SSOO.OOO. The Regions should consult
with DOf pnor to releasing a draft
consent decree to PRPs.
8. Tinting of Netic* for Removal*
  A removal notice that don not Invoke
the special nonet 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 M 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 procedure* is critical
because issuance of the notice triggers
the subsequent 60 to 120 day
moratorium on EPA'conduct of the
removal action. (The moratorium would
last only 60 days in instances »here the
PRPs do not provide EPA with a 'good
faith offer"). Issuing the special nonce at
least 120 day* before EPA will begin (he
removal ensures that th* subsequent 13
day moratorium does not affect EPA s
ability to implement the removal action
in the event negotiation* do not result in
en afnemeat for PRP conduct of the
removal action.

ft. Recipients of Notice for Removals

  The removal notice should be sent to
ell parties where there i* sufficient
evidence to make a preliminary
determination of potential liability
under section 107 of CERCLA. If a
Federal egency has been identified as a
generator at a facility not owned/
operated by the Federal agency, surh
agency should  be routinely notified like
other PRP*.
  CopiM of removal notice* should be
provided to the Regional administrative
record coordinator, the appropriate
State representative, and to
headoaaner*. Providing copies to the
administrative record coordinator is
important  for ensuring that the nonce be
pieced in the record. Providing copies fo
the Slate representative is important for
ensuring thai State* are appropriately
informed ebout possible future
negotiations.
  Providing copies to the Information
Management Section within the Program
Management and Support Office of the
Office of Waste Programs Enforcement
for entry into the Superfund
Enforcement Tracking System (SETS)
Copies should  be sent to OWPE «t the
•am*  time they are sent to PRPs.
Providing copies to OWPE is essential
for facilitating our efforts to track site
activities end to respond  to
Congressional  and other inquiries.
  It i* not  necessary to provide copies of
each leiiiuval notice to the
administrative record coordinator. State
rapnaentattve. Siete or Federal trustee.
or headquarter* in instance* where
identical notice* era provided to
multiple PRPs. Where there are multiple
PRPs et a sit*,  e copy of one removal
notice with e list of other parties who
heve received  the lane: would suffice.

7. Content* of Notice for Removals
  As indicated, th* content of the
removal notice will vary depending
upon whether the purpo** of the letter i*
to limply inform PRPs of their potential
liability or whether the letter will also
be used to provide en opportunity for
PRP involvement in negotiations either
through ••infonr.sl" or "fonr.a!"

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 5308
Federal  Register / Vol. 53. No. 35 / Tuesday. February 23. 1988  /  Notices
 negotiations. The following highlights
 tht conpontnti that should be included
 in tht 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 RJ/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 about to take a 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 be conducted at the sue: a notice
 on  the availability of an administrative
 record: and a notice pursuant to section
 122U) that the special notice procedures
 will not be used.
  The notification under section I22la)
 should in/orm PRPs that the Agency will
 not (or did  not) use the section \—{t)
 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 unless
there  is a six month planning lead ume
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  nonce procedures, the letter
should provide an explanation why the
use of such procedures was determined
to be  inappropriate for that particular
response action.           .  •
  b. .Votire of potentic! liability and
opponuni/y 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
-------
\. General Approach: Issue RO / RA Special Notice When Release f
Draft FS and Proposed/Plan |
Selection of Remedy Process I
a.
»
Review/
Conduct Release
RWS . FS/Pioposed
Plan

11 -o
Con? Review Conduct // 5
S »°° «° S) f
(\ i:
z
Notice and E iterated
Negotiation Negotiation
Moiatorium Motaloiluni
•n
M
I
5
f
9
K
~i
Special Notice / Negotiation Moratorium
                                                                S
u -
0
18    19    20    21     22    23    24    25

                      Timeline (Months)
                                  26    27
28
29
5
I

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                                                                                              OSWER  *  9834.9

                     Federal Reyitef  /  Vol. 53.  No. 49 /  Monday. March  14. 1986 / Noticei	J279
 OfTice location and telephone number
   Rm. 716. Crytul Mall *2.1921
   Jefferson Davit Highway. Arlington.
   VA. (703-557-1806).
 •uttUMiMTAinr U**OMMAT>O*C Punuant
 to section 16 of the Federal Insecticide.
 Fungicide, and Kodenticide Act (FIFRA)
 (7 U.S-C. I36p). the Administrator may.
 at his discretion, exempt a state agency
 from any provisions  of FIFRA if he
 determines that  emergency conditions
 exist which require such exemption.
   The Applicant has requested the
 Administrator to issue a specific
 exemption to permit  the use of an
 unregistered herbicide. (r)-2-|4.5-
 dihydro-4-methyl-4-(lmethylethyl)-S-
 oxo-l/Y-imidazol-2-yl)-S-«thy|.3-
 pyndinecarboxylic acid (CAS 81335-77-
 S|. manufactured as Pursuit T*. by
 American Cyanamid Company, on
 soybeans in Minnesota. Information in
 accordance wi:h 40 CFR  Par: 166 Mas
 submitted as part of  this  requesi.
   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
 herbicides (Paraquat  and Roundup) are
 labelled 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 in planting or ineffective
application techniques.
  The Applicant indicates that without
adequate control a 30 percent yield  los<
 for soybejns 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 b« applied  by ground
 poaiemergence to the crap at • rate of
 0.06  pound active ingredient per acre.
  This nonce does not conatitute a
 decision by EPA on the application
 itself. The regulations governing section
 ta 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 written views on this subject to
 the Program Management and Support
Division at the address above. The
comments must be received on or before .
 March 29. IBM and should bear the
 identifying notation "OPP-180764 ." All
 whiten comments filed pursuant to this
 notice will be available for public
 inspection in Rm. 236. Crystal Mall No.
 2. at the address given above, from 6
 a.m. to 4 p.m.. Monday through  Fnday.
 except legal holidays.
   The Agency, accordingly, will review
 and consider all comments received
 dunng the comment penod in
 determining whether to issue the
 emergency exemption requested by the
 Minnesota Department of Agriculture.
  Ddtd: Ftbrvary 9.1MB.
 Edwin r. Ttewonh.
 Director fl«f uiroi/o/i Otfinon. Officraf
 Ptfticidt Pnffomi.
 |FR Doc. aa-S476 Filed J-11-M: 8:43 tm|
 MUMOCOOf IMfl 10 »

'[FRL-J33S-SI

 Superfund Program; Mixed Funding
 Semementa

 AQINCV: 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, as described, in pan. 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 1986 (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 tint describes 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.
CATC Comments must be provided on or
beforrMay 13.1988.
AOOMSS: Comments should be
addressed to Kathy MacKinnon. US
Environmental  Protection  Agency.
Office of Waste Programs  Enforcement.
Guidance and Oversight Branch (WH-
527). 401 M Street S\V, Washington. DC
20480.
•Oft AIKTMIN MfWMSAnOM CONTACT
Kathy MacKinnon. VS. Environmental
Protection Agency. Office  of Waste
 Programs Enforcement. Guidance and
 Oversiiht Branch. WH-S27. 401 M Street
 SW. Washington. DC 20460. 12021 47*.
 8770.
               MMMUTIOK The term
"mixed funding", as uaed in this
document, refers to three types of
arrangements in which the Government.
at ita discretion, agrees to conduct and/
or pay for a portion of a response action.
In one arrangement, as described in
aection 122|b)(l) of CERCLA. the PRPs
agree to conduct the response action.
and the Government agrees to allow
these parties to bnng a claim against the
Fund for a portion of their costs. The
process by which the Government
agrees to allow a claim against the Fund
is known as "preauthonzauon."
  In a second type of mixed funding
known as a "cash-out." the PRPs pay the
Agency for a portion of the costs m lieu
of conducting the response  action. 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 Agency supports the use of mixed
funding to promote settlements and
hazardous site cleanups. These
settlements also may simplify the
Government's litigation of cost recovery
cases under section 107 by reducing the
number of PRPs to be sued.
  The process for evaluating mixed
funding settlements is based, in part, on
the Interim CERCLA Settlement Policy
(SO FR 5034). which provides ten enters
to evaluate a PRP settlement offer for
less than 100° j 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 staled
in the Interim CERCLA Settlement
Policy, liability under CERCLA is sine'..
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, nude in the
Government's discretion, baaed on an
•valuation 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, de
minima settlements (sections 12£(g)).

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 8280
Federal  Register  /  Vol. 53.  No. 49  /  Monday. March  14. 1988 / Notices
 covenants not to sue (sections 122(0).
 •nd Bon-binding allocations of
 responsibility (NBARs) (sections
 122*e)(3)l may be used in conjunction
 with mixed funding at a means of
 increasing the flexibility with which
 CERCLA uses may be settled in order
 to expedite cleanups.
  The Agency encourages public
 comment on this guidance, especially
 related to particular rypes of mixed
 funding arrangements. The Agency will
 reevaluste this interim guidance in
 response to public comments.
  The interim guidance follows.
  Dais: February a. 1B6B.
 J. W. McKmw.
 Actin$At$uUfltAdminiitraior for Solid
 Want and Emergency Riipoiut.
  Oatr Ftbmiry 12.19M
 TtattM U Adami. |r.
 Auittont Administrator for Enforcement and
 Compliance Monitoring.
 October 20.1987
 Memorandum
 Subject: Evaluating Mixed Funding
  Settlements Under CERCLA
 From: |. Winston Porter. Assistant
  Administrator. Office of Solid Waste
  and Emergency Response
 Thomas L Adams. |r.. Assistant
  Administrator. Office of Enforcement
  and Compliance Monitonng
 To: Regional Administrators. Regions (-
  X
 /. Introduction
 • This document provides guidance for
 use when a parry 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
 ACL as amended by the Superfund
 Amendments and Reauthonzation Act
 of I960 (hereinafter cited as "CERCLA")
 provides explicit authority for the
 Government to eater into these type* of
 arrangements.
  The primary goals of this 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 type* 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 PRJPs and  reimbursement of
                   their response costs require the Agency
                   to "preeuthorixe" the claim against the
                   Fund prior to the initiation of the
                   response action. The term
                   "preeuthonzation"  refers to the
                   approval that must  be granted by the
                   Agency prior to cleanup actions if s
                   claim for response costs is to be
                   considered against  the Fund. If
                   preauthorization is  granted, it serves 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
                   preauthorization. Section 122(61(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 coats. 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(b)(4).
                   concerning future obligation of the Fund
                   fo> remedy failure, only applies to mixed
                  . funding in the form of preauthohntjon.
                   as described in eecnon ttzibMU
                     As noted above, the  19W
                   Amendments to CERCLA included an
                   explicit statutory authorization of mixed
                   funding settlements. Prior to these
                   Amendments, the primary document
                   which made reference  to mixed funding
                   was the Interim CERCLA Settlement
                   Policy (SO FR SOW). This policy set out
                   tan criteria to use when evaluating a
                   settlement offer for less than 1005 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 111 f-tn 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.) This
section first highlights factors of key
importance to mixed funding
settlements, and then suggests the
Agency's preferences among vanous
combinations of these factors.
  Section IV identifies criteria to be
used to determine if e particular type of
mixed funding is appropriate for a site.
and then lists secondary considerations
related to all mixed funding  settlements
Section V outlines the general proredure
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 waste sites. This
program, to be effective, depends upon a
balanced approach,  which includes a
mix of Fund-finenced cleanups.
enforceable settlement agreements
reached through negotiations, and
litigation. Expeditious cleanup* reached
through negotiated settlements are
preferable to protracted .litigation.
  Section 122 of the  1986 Amemiiincnts.
which is devoted entirely to  settlement
issues, indicates Congressional
affirmation of the emphmis ;n thf
Interim Settlement Poiicy toward
increased flexibility in settling CERCLA
cases in order to expedite cleanups. Liki
the  Interim Settlement Policy, section
122 covers a wide range of mechenisms
designed to promote settlements. In
particular, in section 122(b|.  Congress
acknowledged the need  to consider
settlements for leas than 100% of -.he
coats 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
Raauthorization Act of 19M. 99 Cong-
Id Sets. Report  99-962 pp. 1S3. 252
  The Agency encourages the use of
mixed funding to promote settlement
and hazardous site cleanup. For
example, preauthorization offers the

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                     Federal Register  /  Vol. 53.  No 49  /  Monday. March  14. 1988  / Notices
                                                                                                                8281
 iicivanuft of PRP performance of the
 rtipORM activity and funding of •
 substantial portiofl of the mponie
 costs, thui eotuenhnf Agency resource*
 foi  .M at other lite*. In addition, section
 t22fb)|l| requires the Agency to make
 all reasonable efforts to recover these
 costs. The Agency will therefore pursue
 nonsettlurs 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, doei not imply
 that the~standard and scope of liability
 under CERCLA has changed. As
 established by court decisions prior to
 the  1986 Amendments. PRP lubiliiy
 under CERCLA remains strict, joint and
 several, unless the PRPs can  clearly
 demonstrate that the harm at the site is
 divisible. Thus, the Agenc) will assess
 mixed funding settlements in a manner
 consistent with the Interim Settlement
 Policy, where complete cleanup or
 collection of 100% of costs refrains a
 primary goal.
   For example, the Agcr.cy ».!! .-.ui
 Approve mixed fund:ng sirr.pl> on ihr
 hnsis that a share of waste* «t a sue
 may be attributable to  an  unxnown ur
 financially non-vidble 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 |o assess the reasonableness.of mi-
 PRPs offer. However, the  jjvnii.ihilii} nr
 ;he urr.ou;! of an>  Funu-firunnng fur .>
 ••.irtitdiir site tvill'r.ut be df nnnrlnni
 -olcly on consister.zy »•::.-..,.-.;.
 volumetric or "fair-share" nil:>L..ti(iii.
The  Agency may. as a policy  decision.'
determine that mixrd funding is the b«si
method to promote cleanup HI a
piirticular site, based on the totality of   .
the circumstances. Mixed  funding
should be viewed as one tool approved
by Congress, to be used to promote
settlement* in the context of :he existing
 Interim Settlement Policy.
  Section 122 Also cnniains seiilemrn1
 jj.-ov.sions rebicd to: (a) de minimi*
 M-iilements (section 122(g|). in which
 .•i.irties who are liable for only a minor   .
 portion of the hazard or cost of cleanup
• ii  a site muy resolve their liability to the
Government in an expedite'd process: (b)
 non-binding allocations of responsibility
!\BARs). (section 122Je)l3TJ. which
involve • discretionary EPA allocation
of  the total response costs among PRP*
•it a sitr and |c) covenants not to sue.
.'-rr.tion 122ff)). in which Ihr
 Government agree* to certain releases
 from liability at a site.
   These settlement mechjmsms muy
 influence the decision as to whether a
 settlement should include mixed
 funding. Thus, the use of mixed funding
 at a site should be evaluated both in the
 context of section 122 as a whole, which,
 encourages settlement m general, as
 well as individual section 122 settlement
 provisions and their relevance tn the
 proposed mixed funding settlement.
   For further guidance on these
 settlement provisions, see "Interim
 Guidelines for Preparing Non-Binding
 Preliminary Allocations  of
 Responsibility (NBAR)." 52 FR 19919:
 "lotenm Guidelines on Settlements with
 Df Minima Waste Contributors under
 Section 122(g) of SARA." Adumi/Poricr.
 June 19.1987: "Covenants Not to Sue
 Under SARA." Adums/Por'er )ulv 10.
 1987.

 ///. Assessment nf Mi\etl Fx.wny
 Settlement Prjposals L'sirg ihf irtenrr
 Settlement Policy Cniern
   In the evaluation of a proposed mixed
 funding settlement. Agency enforcement
 personnel should first focus or. the
 quality of the overall settlement offer.
 Thus, the initial determination in each
 case  will not be whether t particular
 type of mixed funding jroi:id be used.
 but whether the underlying offer for u
 mixed funding settlement is a good one.
 This determination should  be mude by
 applying the  ten settlement cntnrta set
 out in the-Interim Settlement Policy.
.   The factors and hypothetical
 examples set  forth  belmv provide
 gi.id.ir.ee us 10 how to ;i"?:y in* it"
 sirtticnrr.t criit-na to sptiltmcn; oflur* in
 whirh PRPs h;.vc re'imesird *nm* form
 of mixed funding. The Aurrtry curs nm
 intend to limit the avuilauil.ty of mixed
 funding to the fact pattern d*s<.r:!jtd.
 below, but recommends the following
 approach us a means of focusing the
 analysis of the settlement. Regions must
 continue to consider the  totality of the
 circumstances fur each ir.ixed funding
 settlement offer
   In settlement offers in  which any form
 of mixed funding is proposed, factors of
 primary importance include:
   • Strength of the liability cult- .ijMinn
 settlors and any non-settlors. This factor
 includes:
 —LJligative risks in proceeding to irinl
   against settlors, and
 —The nature of the caw remaining
   against non-settlors after the
   settlement.
   • Government's options in the event
 settlement negotiations.fail (e.g.. if a
 state cost-share will be available  for a
 Fund-lead action):
   •  Site of the portion or nperabl: 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 fader*
   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 case* in which the following
 features are present:
  • The potential portico 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. In
 this context, substantial portion muy be
 defined as a commitment by the PRPs to
 undertuke or Finance a predominant
 portion  of the tots! remedial acuar..'
   • The Government has a strong cjse
 against  financially viable non-settling
 PRPs. from which the Fund portion may
 be recovered.
   While this combination of factors
 represents the optimum conditions
 under which mixed funding  may b*
 approved, cases will more typically
 involve one or more variations of this
 scenario. Thus, the Agency anticipates
 (hat a range of cases ivil! be considered
 acceptable candidates for mixed
 funding. The following examples
 indicate the circumstances ur.der which
 a mixed funding sciilem-:: rr.;i>
 represent the Govrrr.pvir"« f'vi'irrd
 alternative:
  £.te~."J'r tir,'- A s;:i-v; i..-«- .JIM.::-.'
 potentiiil **i!!ors m;:>  r..: -sii xvr.or; m  •
 favor of linp.iiiun. espi-cum :f tfct cn*r
 against  non-M.-:t!ori i» UI:.:K. However...
 mixed funding settlement  r.;.> s:.!! IT
 acceptable upon evrtl.jt:^  <,l
 additional factors, such n*:
  • The settling PRPs offer 10 conduct.
 or pay for a substantial portion of the
 response:
  • Public interest considemtumii Ir.g
 If settlement would expedite clrnnup
and/or ;i section IfM Fnpr!-fin;i.ici»d
action is nui feHsiblel:
  • Whether neitlon have negotiated in
good-faith:
  • The Government'* time  und
 resources snved by simplification