on PRP Search Enhancement
5th National Tra in ing Con fe ren ce
—
St. Louis, Missouri May 16 18, 2006
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Agenda
PRP Search Enhancement Team
Roster of Conference Participants
Financial Analysis & Ability to Pay
Liability Insurance
The National Enforcement Investigations Center
& PRP Search Expertise
PRP Search Issues at Recycling Sites
PRP Search Issues at Mining Sites
PRP Search Issues at Area-wide
Ground Water Sites
PRP Search Issues at a Surplus Government
Propcrty/Formcrly Used Defense Site
PRP Search Benchmarking & Best Practices
Current Developments in Liability Law
Successor Liability
Current Developments in Bankruptcy Law
Keynote Speaker: Catherine R. McCabe
Liability and the Brownfields Amendments
PRP Search Issues at Mcrcuiy Release Sites
I (U)
1I ) Corporate Business Practices & Liability
Title Searches
Superfund Liens & Windfall Liens
Enforcement of Access Orders & the PRP Search
Institutional Controls, the Model Environmental
Easement, and the National IC Strategy
Alternative Sites
Developing National Repositones for the Shanng
of Corporate Information
Katiina & Rita
Our Role in Responding to Natural Disasters
Acronyms & Abbreviations
Glossary
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Agenda
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FIFTH NATIONAL TRAINING CONFERENCE ON PRP SEARCH ENHANCEMENT
MAY 16-18, 2006
HYATT REGENCY ST. LOUIS
One St. Louis Union Station, St. Louis, MO
Tuesday. May 16
7:30 a.m. - 8:30 a.m. Registration
[ Coffee and Pastricsj
8:30 - 8:45 WELCOME AND OPENING REMARKS Nancy Deck/IIQ & Team
[ Introduction of thc Nat’I I’RP Scarch Eiihanccmcnt Team (Tcani)I Neilirna Senjalia/IIQ
USING SPECIALIZED EXPERTISE IN
PRP SEARCHES: I Sc sion ( unidin:tiut I.co Ni tillin Rcg 3
8:45 - 9:45 FINANCIAL ANALYSIS/including perforn,i,ig Leo NluIIin/Reg.3
ability to pay analj se.s. idenlifj’ing concealed resource. .
and invesiii athig pos.siblefrai:d:ilent co,,i’eyance.s/
9:45 - 10:00 BREAK
10:00 - 11:00 LIABILITY INSURANCE Ron Conzalez/Reg.I
11:00 - 12:00 THE NATIONAL ENFORCEMENT Gene Lubieniecki/NEIC
INVESTIGATIONS CENTER (NEI Dr. l)oug Kendall/NEIC
& PRPSEARCII EXPERTISE .Jon Keihoffer/NEIC
Don Sniitb/NEIC
Noon-1:00 LUNCH BREAK
DISCUSSIONS OF PRP SEARCH ISSUES AT THE FOLLOWING
TYPES OF SI TES: Isessuon (\toidiiuioi Chcr)Ie Iictn ki Reg 71
1:00 - 1:30 RECYCLING SITES Carol BernslReg.2
1:30 - 2:30 MINING SiTES Joe Tieger/IIQ
Andrea Madigan(Reg.8
2:30- 2:45 BREAK - [ Refreshments Provided]
2:45 - 3:45 AREA-WIDE GROUiVD WATER SITES Lance Vlcek/Reg.5
Steve Arbaugh/Reg.9
3:45 - 4:45 SURPLUS GOVERNMENT PROPERTY/ Grechen Schmidt/Reg.I0
FORMERLY USED DEFENSE SITE
4:45 - 5:00 ANNOUNCEMENTS AND ADJOURN Nancy Deck/IIQ
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Wednesday, May 17
I Pl_l ’\Sl ’ N( )T1. l ’h 8.00— 9:00 a.m. Session on PRP Scaidi Uenchmaiking is liM EPA folks ONLY IIo e ei.
coffee and pastries are available for ALL participants and a hi caL-out Room ill he .i .iikihle l’llI)) liii otii LhC
duting the I’M ()nl Session See ou at 9:00am. to begin Vedne d :i for ALLI
Co/fee and Paviries Available fbr A/I Starling at 7.45 am
8:00 - 9:00 PRP SEARCH BENdHM,4RK 1NG AND Bruce PurnphreylllQ
EPA Only BEST PRACTICES
9:00 - 9:05 GOOD MORNING AND ANNOUNCEMENTS Nancy l)eck/IIQ
DEVELOPMENTS IN LIABILITY AND
BANKRUPTC}’ LAO’ /Se’. sio,, (oordin,itoi (licirle \1 iiiski
.ii tl ( ‘I ,ireiiec Icjihci on I I(, I
9:05 - 10:00 CURRENT DEVELOPMENTS IN LIABILITY LAW Clarence l eathersonhIIQ
lincluding Jj:jjjlI and iL ’i progeny; Roh,n & Ilaa.s overruled. Mike Northridge/IIQ
a,,d General Electric’s 1.1.40 lawsuit!
10:00 - 10:30 SUCCESSOR LIABILITY Cheryle Micinski/Keg.7
10:30- 10:45 BREAK
10:45 - 11:45 CURRENT DEVELOPMENTS IN Andrea Madigan/Reg.8
BANKRUPTCY LAO’
11:45- Noon BREAK - PLEASE NOTE Lunch Provided
Noon-l:00 CONFERENCE LUNCHEON— Bullet Style CATIIERINER McCABE
KI YNOI’l 511 KlR - Dcputy Assistant Administrator
Otlicc of Enforcement and Compliancc Assurancc/I-IQ
1:00-1:15 BREAK
1:15 - 2:45 LIABILITY AND THE BROWNFIELDS helen KeplingerlllQ
AMEIVDMENTS /including the new ‘all appropriate Bill KeenerlReg.9
inquiries” sta,idard/
2:45 - 3:00 BREAK - [ Refreshments Provided]
3:00 - 3:20 PRP SEARCH ISSUESATMERCURY RELEASE Wilda CobblReg4
SITES
3:20 - 4:50 CORPORATE BUSINESS PRACTICES AND Joe 1’ieger/ IQ
LiABILITY Leo MuIlin/Reg.3
4:50 - 5:00 ANNOUNCEMENTS AND ADJOURN Nancy DeckJllQ
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Thursday, May 18
8:00-8:15 GOOD MORNING AND ANNOUNCEMENTS Nancy I)cck/IIQ
[ CofThc and Pastries]
PROPERTY LA W/v , 1 Coordinator - Stephen Ilt’. s/OG( -IIQ/
8:15 - 9:00 TITLE SEARCHES Steve lless/IIQ
Lance VIcek/Reg.5
9:00 - 10:15 SUPERFUND LIENS AND WINDFALL LIENS Kathleen WcslIRcg.4
Bill KeenerlRcg.9
10:15- 10:30 BREAK
10:30-Il :30 ENFORCEMENT OF ACCESS ORDERS AND Steve I le.s/)IQ
THE PRP SEARCH
11:30-12:30 LUNCH BREAK
12:30 - 1:30 INSTITUTIONAL CONTROlS, THE MODEL Greg Sullivan/IIQ
ENVIRONMENTAL EASEMENT, AND THE Sheri Bianchin/Reg.5
NATIONAL ICSTRATEGY Steve Iless/IIQ
1:30 - 2:00 ALTERNATIVE SiTES/including how alternative Torn Marks/Reg.5
site .stalus is determined, tracking activities and erpeiis es
at alternative sites, and cost recovery processes/
2:00 - 2:45 DEVELOPING NATIONAL REPOSITORiES Scott NightingalelKN
FOR THE SHARING OF CORPORATE Steve Arbaugh/Reg.9
INFORMATION
2:45-3:00 BREAK
3:00 - 4:00 KA TRINA AND RITA: OUR ROLE IN herb MiIler/Reg.4
RESPONDING TO NATURAL DISASTERS Pam Travis/Reg.6
.Si.ll)E.SIWJIIXI) Rl I’OR 1S FRO l TIIOSl If’Il() Norma ‘l’harp/Rcg.7
ll. lIE IIEE.V IiIl RE Grechen Schniidt/RegIO
4:00 - 4:30 REPORT OUT/Session Coordinators! - ANY Session Coordinators
UNFINISHED BUSINESS - LAST WORDS Nancy Deck/I IQ
4:30 ADJOURN - hAPPY TRAILS - UNTIL NEXT TIME!
TRAVEL SAFE
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MultjDex
ffl x SystEm
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PRP Search Enhancement Team
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PRP SEARCH ENHANCEMENT TEAM and CONTACTS
May 2006
Region Reaionai Contact Address
Region I James Israel U S. EPA, Region 1
(P) (617) 918.1270 1 Congress Street
Alt. Barbara OToo!e Boston, MA 02203.2211
(P)(617) 918.1408
RegIon 2 Carol Barns Office of Regional Counsel
(P) (212) 637.3177 290 Broadway - 17th Floor
(F) (212) 637-3104 New York, New York 10007-1866
RegIon 3 Carlyn Prisk Office of Enforcement & Cost Recovery Branch
(P) (215) 814-2625 1650 Arch Street!3HS62
(F) (215) 814-3005 Philadelphia, PA 19103
RegIon 4 Herb Miller Superfund Enforcement & Information Mgmt. Branch
(P) (404) 562-8860 Waste Management Division
(F) (404) 562-8842 61 Forsyth Street, S.W.
Atlanta, GA 30303
RegIon 5 Fouad Dababneh Remedial Enforcement Support Section
(P) (312)353.3944 77 West Jackson Blvd. (Mail Code SR-6J)
Chicago. IL 60604
RegIonS Connie Suffice Cost Recovery Section
(P) (214) 665-7345 Superfund Division (6SF-AC)
(F) (214) 665-6660 1445 Ross Avenue (Fountain Place)
Alt Lydia Johnson Dallas, TX 75202-2733
(P) (214) 665.8419
Region 7 Cheryte Mlclnskl USEPA Region 7
(P) (913) 551-7274 Regional Counsel
(F) (913) 551-7925 901 North Sm Street
Alt. Norma Tharp Kansas City, KS 66101
(P) (913) 551-7076
Region 8 Greg Phoebe Office of Enforcement, Compliance, and
(P) (303)312-6466 Environmental Justice
Alt. Mike Rudy 999 18th StreetI8ENF-RC. Suite #300
(P) (303)312-6332 Denver, CO 80202-2466
RegIonS Steve Arbaugh Superfund Division
(P) (415)972-3113 75 Hawthorne StreetlSFD-7-B
(F) (415) 947-3520 San Francisco, CA 94105
Alt. Unda Keteilapper
(P) (415) 972.3104
Region 10 Susan IIaas 1200 6th Avenue
(P) (206) 553-2120 Mail Code: MIS Ed-I 10
Alt. Grechen Schmidt Seattle, WA 98101
(P) (206) 553-2587
Headquarters Nancy Deck, Team Leader Office Of Site Remediation Enforcement
(P) 564-6039 1200 Pennsylvania Avenue, N W., 2273-A
(F) (202) 564-0074 Washington, D.C. 20460
Headquarters Eric French Office Of Site Rcmediation Enforcement
(P) (202) 564-0051 1200 Pennsylvania Avenue, N W., 2273-A
(F) (202) 564-0074 Washington, D C. 20460
Headquarters Clarence Featherson Office Of Site Remediation Enforcement
(P) (202)564-4234 1200 Pennsylvania Avenue, N.W., 2273-A
(F) (202) 501-0269 Washington, D C. 20460
Headquarters Monica Gardner, Mgmt. Advisor Office Of Site Remediation Enforcement
(P) (202) 564-6053 1200 Pennsylvania Avenue, N.W., 2273-A
(F) (202)5640074 .•Washington, D.C 20460
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NEILIMA SENJALIA
Ms. Senjalia is the Deputy Director of the Policy and Program Evaluation Division in the Office
of Site Remediation Enforcement, a part of Office of Enforcement and Compliance Assurance at
the Environmental Protection Agency. Since joining EPA in 1989, she has held various staff and
management positions in EPA’s hazardous waste enforcement programs. Her current
responsibilities include establishing policies for compelling private parties to clean up hazardous
waste sites under the Superfiind and Resource Conservation and Recovery Act corrective action
programs, developing annual and long term strategic plans, setting goals and measures, and
reporting accomplishments. Prior to joining EPA, Neilima worked in the environmental programs
for the Naval Research Lab in the Department of Navy, State of West Virginia, and the District of
Columbia.
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MultjDex
Quflfnte m
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Roster of Conference
Participants
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Fifth National Training Conference on PRP Search Enhancement
Roster of Conference Participants
May 16-18, 2006
St. Louis, MO
Abendschan
Sharon
303-312-6957
EPA-Region 8
999 18th Streeet, Ste. 300
Denver, CO 80202
abendschan.sharon epa.gov
Aldridge
Barbara
214-665-2712
US EPA Region 6, Superfund
Division, Cost Recovery
1445 Ross Ave
6SF-AC
Dallas, TX 75202
a ldridge.barbara®epa.gov
AlIen
Don
703-841-8020
DPRA Incorporated
1300 North 17th Street
Suite 950
Arlington, VA 22209
don.allen@dpra.com
Arbaugh
Steven
415-972-3113
Superfund Division
SFD-7-B
75 Hawthorne St
San Francisco, CA 94105
arbaugh.steve@epa.gov
Armstrong
Greg
404-562-8872
U.S. EPA - Region 4
61 Forsyth Street, SW.
Atlanta, GA 30303
armstrong.greg®epa.gov
Barnett
Clint
573-751-8370
MO Attorney General’s Office
P.O. Box 899
Jefferson City, MO 65102
clint.barnett®ago.mo.gov
Bartman
Fred
312-886-0776
USEPA
77 West Jackson
Chicago, IL 60604
bartman.fred epa.gov
Beihofler
Jon
303-462-9114
EPA, NEIC
Building 25, Box 25227
Denver Federal Center
Denver, CO 80225
beihoffer.jon®epa.gov
Bennett
Alicia
303-275-5542
USDA OGC
740 Simms Street, Room 309
Golden, CO 80207
alicia.bennett®usda.gov
Berns
Carol
212-637-3177
USEPA Region 2
290 Broadway, 17th floor
New York, NY 10007
berns.carol epa.gov
Bianchin
Sheri
312-886-4745
U.S. EPA
77 W. Jackson (SR-6J)
Chicago, IL 60423
bianchin.shen®epa.gov
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Bolden
Carl
214-665-6713
EPA Superfund Division
1445 Ross Avenue
Dallas, TX 75202
bolden.car l®epa.gov
Bradsher
Jamie
214-665-7 11 1
Cost Recovery
1445 Ross Avenue
Dallas, TX 75202
bradsher.jamie@epa.gov
Brewer
Linda
214-665-7143
NOWCC/EPA
1445 Ross Avenue
6SFAC
Dallas, TX 75202
brewer.linda®epa.gov
Brown
Cynthia
214-665-7480
6SF-AC
1445 Ross Avenue
Suite 1200
Dallas, TX 75244
brown.cynthia@epa.gov
Cass
Karen
573-751-7879
Missouri Department of Natural
Resources
1738 E.Elm
Jefferson City, MO 65102
karen.cass@dnr.mo.gov
Castanon
Lisa
206-553-0465
ORC-1 58
1200 Sixth Avenue
Seattle, WA 98101
castanon.lisa@epa.gov
Co
Grace
312-353-6779
U.S. EPA, Superfund Division
77 W Jackson Blvd. (SR-6J)
Chicago, IL 60604
co.grace@epa.gov
Cobb
Wilcia
404-562-9530
US EPA
Region 4 61 Forsyth Street, S.W.
Atlanta, GA 30303
cobb.wi1da epa.gov
Coleman
Karen
678-625-0068
Environmental Protection Agency
228 Salem Glen Way
Conyers, GA 30013
coleman.karen@epa.gov
Day
Joanna
202-219-1657
U.S. Department of the Interior
1849 C St. NW
MS 6412
Washington, DC 20240
jcitronday@yahoo.com
Deck
Nancy
202-564-6039
US EPA
1200 Pennsylvania Ave.
Washington, DC 20460
deck.nancy®epa.gov
Page2of 10
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Eiken
Tim
573-522-8057
Missouri Department of Natural
Resources
1738 E. Elm
Jefferson City, MO 65109
tim.eiken@dnr.mo.gov
Feat herson
Clarence
202-564-4234
EPA/OECA/OSRE
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460
featherson.clarence®epa.gov
Fennelly
Sharon
617-918-1263
EPA - Region I - EBRB
One Congress St, Suite 1100
Mail Code HBR
Boston, MA 02114
fennelly.sharon epa.gov
French
Enc
202-564-0051
PECB
1200 Pennsylvania Ave
MC-2273A
Washington, DC 20460
french.eric®epa.gov
Gardner
Ann
617-918-1895
U.S. EPA Region I
One Congress St.
Boston, MA 02114
gardner.ann@epa.gov
Gonzalez
Ronald
617-918-1786
USEPA
One Congress Street, Suite 1100 (SES)
Boston, MA 021 14
gonzaIez.ronald epa.gov
Haas
Susan
206-553-2120
EPA Region 10
1200 Sixth Ave
Mail Stop ECL 110
Seattle, WA 98101
haas.susan epa.gov
Harris
Ed
615-532-0131
TN Dept. Environment/Conservation
401 Church Street
20th Floor [ AC Tower
Nashville, TN 37243
ed.harris@state.tn.us
Harvey
Jacqueline
404-562-8882
US EPA
Atlanta Sam Nunn Federal Center
61 Forsyth Street
Atlanta, GA 30303
harvey.jackie@epa.gov
Hennessy
Tina
617-918-1216
U.S. EPA
I Congress Street, Suite 1100 (HBR)
Boston, MA 02114
hennessy.tina®epa.gov
Henry
David
615-741-1440
TN Dept. of Envt. and Conservation
L & C Tower, 20th Floor
401 Church Street
Nashville, TN 37243
david.henry®state.tn.us
Page3of 10
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Hess
Stephen
202-564-5461
Office of General Counsel
1200 Penn. Ave., N.W.
Washington, DC 20460
hess.stephen®epa.gov
Howell
Rose
617-918-1213
USEPA
One Congress Street
Boston, , MA 02114
howel l.rose®epa.gov
Israel
James
617-918-1270
OSRR
I Congress Street
Suite 1100 (HBS)
Boston, MA 02114
israeI.james epa.gov
James
Mark
615-532-0131
Tenn. Dept. of Environment &
Conservation
20th Fl., L & C Tower
401 Church St.
Nashville, TN 37243
Mark.James@state.tn.us
.
Johnson
Lydia
214-665-8419
EPA
1445 Ross Avenue
Dallas, TX 75202
johnson.lydia@epa.gov
Joseph
Ben
215-814-3373
EPA
1650 Arch St.
3HS62
Philadelphia, PA 19103
joseph.ben@epa.gov
Kawecki
Joseph
312-886-7236
USEPA
77 W. Jackson
Chicago, IL 60604
kawecki.joseph@epa.gov
Keener
William
415-972-3940
US EPA
75 Hawthorne Street
San Francisco, CA 94105
keener.bill@epa.gov
Keim
Stephen
703-841-8041
DPRA Environmental
1300 N. 17th Street, Suite 950
Arlington, VA 22209
skeim@dpra.com
Douglas
303-462-9104
NEIC/OCEFT/OECA
P0 Box 25227 Bldg 25
Denver Federal Center
Denver, CO 80225
kendall.douglas epa.gov
Kent
Tim
918-542-1853
Quapaw Tribe of Oklahoma
P0 Box 765
Quapaw, OK 74363
tkent quapawtribe.com
Page4of 10
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Keplinger
Helen
202-564-4221
OECA-OSR.E
1200 Pennsylvania Ave. N.W.
Mail Code 2272A
Washington, DC 20460
keplinger.helen@epa.gov
Krueger
Thomas
312-886-0562
USEPA Region 5
77 W. Jackson Blvd. (C-14J)
Chicago, IL 60604
Krueger.Thomas @epa.gov
Lubieniecki
Gene
303-462-9012
USEPA-NEIC
Bldg 25 DFC, P0 Box 25227
Denver, CO 80225
Iubieniecki.gene®epa.gov
Luzecky
Hollis
202-564-4217
EPA-OECA-OSRE-RSD
1200 Pennsylvania Ave., NW
Mailcode 2272A
Washington, DC 20460
luzecky.hollis epa.gov
.
Madigan
Andrea
303-312-6904
US EPA Region 8
999-18th Street, Suite 300
Denver, CO 80004
madigan.andrea @epa.gov
Maldonado
Lewis
415-972-3926
EPA Region 9
75 Hawthorne Street
ORC-3
San Francisco, CA 94105
Maldonado.Lewis epa.gov
Malek
Joseph
312-353-2000
Superfund
77 W. Jackson Blvc
Chicago, IL 60604
malek.joseph@epa.gov
Mangrum
Linda
312-353-2071
SFD
77 W. Jackson Blvd
SR-6J
Chicago, IL 60604
mangrum. Iinda©epa.gov
Marks
Thomas
312-353-6591
U.S. EPA Region 5
77 West Jackson Blvd.
SR-6J
Chicago, IL 60604
marks.thomas®epa.gov
Michuda
Colleen
404-562-9685
U.S. EPA, Region 4 OEA
61 Forsyth St., SW
Atlanta, GA 30303
michuda.colleen@epa.gov
Micinski
Cheryle
913-551-7274
EPA
901 N. 5th Street
Kansas City, KS 66101
micinski.chery le®epa.gov
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Miller
Herb
404-562-8860
EPA, Region 4
61 Forsyth Street
Atlanta, ( IA 30303
miI1er.herbert epa.gov
Montana
Jessica
515-281-8934
Iowa Department of Natural Resources
900 E. Grand Avenue
Wallace State Office Building
Des Moines, IA 50319
jessica.montana@dnr.state.ia.us
Moore
Tony
404-562-8756
R4/WD/SEIMB
61 Forsyth St., SW
Atlanta, GA 30303
moore.tony®epa.gov
Morang
Suzan
800-259-5376
Cherokee Nation/ITEC
208 E. Allen Rd.
Tahlequah, OK 74464
smorang@cherokee.org
Mullin
LeoJ.
215-814-3172
USEPA, Region III
1650 Arch Street
Philadelphia, PA 19103
mullrn.leo®epa.gov
Muratore
Kim
415-972-3121
Case Development Team (SFD-7-B)
75 Hawthorne St.
San Francisco, CA 94105
muratore.kim epa.gov
Murray
Donna
617-918-1409
EPA
One Congress Street (FIBS)
Boston, MA 02114
murray.donna®epa.gov
Nightingale
Scott
785-296-1666
Kansas Dept. of Health &
Environment
1000 SW Jackson
Suite 410
Topeka, KS 66612
snightin@kdhe.state.ks.us
Northridge
Mike
202-564-4263
U.S. EPA, Office of Site Remediation
Enforcement
1200 Pennsylvania Ave., NW
mailcode 2272A
Washington, DC 20460
northridge.michael epa.gov
Oat is
Lloyd
206-553-2850
R- 10 OEA
1 200th Avenue
Seattle, WA 98101
oatis.1loyd epLgov
Phillips
Virginia
303-312-6197
Environmental Protection Agency
999 18th Street, Suite 300
Denver, CO 80202
phillips.virginia epa.gov
Page6of 10
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Powell
Robert
615-532-0916
Division of Remediation
4th Floor - L &C Annex
401 Church St.
Nashville, TN 37243
robert.powell@state.th.us
Pumphrey
Bruce
202-564-4222
Office of Site Remediation
Enforcement
1200 Pennsylvania Ave. N.W.
Mail Code 227 IA
Washington, DC 20460
pumphrey.bruce epa.gov
Rhodes
Abby
404-562-8889
U.S. EPA
11th Floor Tower - Waste Div.
61 Forsyth Street, S.W.
Atlanta, GA 30303
rhodes.abby@epa.gov
Rock
Anna
913-551-7451
EPA Region 7
901 North 5th Street
Kansas City, KS 66101
rock.anna@epa.gov
Ross
Steven
916-255-3694
California Department of Toxic
Substances Control
8800 Cal Center Drive
Sacramento, CA 95826
sross®dtsc.ca.gov
Ross
William
303-312-6208
USEPA
999 18th St., Suite 300
Denver, CO 80202
WG.Ross @epa.gov
Rudy
Mike
303-312-6332
US EPA, Region 8,
999 18th Street, Suite 300
Mail Code 8ENF-RC
Aurora, CO 80202
rudy.mike epa.gov
Ryczek
William
312-886-7184
U. S. EPA
77 West Jackson Blvd
Chicago, IL 60604
ryczek.william epa.gov
Savage
Kim
415-972-3358
EPA
75 Hawthorne Street
San Francisco, CA 94105
savage.kim©epa.gov
Schmidt
Grechen
206-553-2857
EPA
1200 6th Ave
OEA-095
Seattle, WA 98101
schmidt.grechen epa.gov
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Senjalia
Neilima
202-564-6079
EPA/OECAIOSRE/PPED
1200 Pennsylvania Avenue NW
Mail Code 2273A
Washington , DC 20004
senjalia.neilima®epa.gov
Shade
Kevin
214-665-2708
EPA - R6
1445 Ross Ave
Suite 1200 6SF-AC
Dallas, TX 75202
shade.kevin®epa.gov
Smith
Don
303-462-9111
EPA-NEIC
Bldg 25, Box 25227
Denver Federal Center
Denver, CO 80225
smith.donj epa.gov
Snow
Jim
404-562-8723
WMD-SEIMB
Sam Nunn Atlanta Federal Center
61 Forsyth Street
Atlanta, GA 30303
snow.james@epa.gov
Sparks
Solomon
404-562-8857
WMD-SEIMB
61 Forsyth St. SW
Atlanta, GA 30303
sparks.michael epa.gov
Stenger
Wren
214-665-6583
EPA, Superfund Division
1445 Ross Ave
Dallas , TX 75202
stenger.wren®epa.gov
Sterling
Blake
404-562-8852
U.S. EPA/Region 4
61 Forsyth
Atlanta, GA 30303
sterling.blake epa.gov
Sullivan
Gregory
202-564-1298
US EPA OECA/OSRE
1200 Pennsylvania Ave NW
MC 2273A
Washington, DC 20460
sulhvan.greg@epa.gov
Suttice
Connie
214-665-7345
US EPA Region VI
1445 Ross Avenue
Suite 1200,6 Sf
Dallas, TX 75202
suthce.connie®epa.gov
Tharp
Norma
913-551-7076
US EPA
901 N. 5th Street
Kansas City, KS 66101
tharp.norma@epa.gov
Tieger
Joe
202-564-4276
OSREIRSD
1200 Pennsylvania Ave.,
Washington, DC 20460
tieger.joe epa.gov
Page8of 10
-------
Travis
Pamela
214-665-8056
EPA Region 6
1445 Ross Ave.
Dallas, TX 75202
travis.pame1a epa.gov
Valentine
Kara
573-751-9911
Missouri Department of Natural
Resources
1101 Riverside
Jefferson City, MO 65101
pau la.gaines®dnr.mo.gov
Van Dyke
Don
573-522-3351
MoDNR
1738 E. Elm Street
Jefferson City, MO 65101
don.van.dyke dnr.mo.gov
Vincent
Pat
803-896-4074
SC Dept of Health & Environmental
Control, BL&WM
2600 Bull St.
Columbia, SC 29201-1708
vincenpl®dhec.sc.gov
Vlcek
Lance
312-886-4783
US EPA, Region V
77 W. Jackson Blvd (SR6J)
Chicago, IL 60604
vlcek.lance epa.gov
Wells-Albers
Rebecca
573-751-8393
Missouri Department of Natural
Resources
P.O. Box 176
Jefferson City, MO 65102
rebecca.wells-a1bers dnr.mo.gov
Werner
Robert (Bob)
214-665-6724
EPA, Region 6
1445 Ross Avenue
Dallas, TX 75202
werner.robert®epa.gov
West
Kat
404-562-9574
EPA, Region 4
61 Forsyth St., SW
13 th Floor
Atlanta, GA 30303
west.kathleen epa.gov
Wilkerson
William
404-562-8766
EPA
61 Forsyth St.
Atlanta, GA 30303
wilkerson.wi l liam®epa.gov
Wilkie
David
803-896-4168
SC Dept. of Health & Environmental
Control
2600 Bull Street
Columbia, SC 29201
wilkietd@dhec.sc.gov
Wilson
Jan
214-665-2733
EPA-Superfund Division
1445 Ross Avenue
Suite 1200 (6SF-AC)
Dallas, TX 75202
wilson.janis epa.gov
Page9of 10
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Woods
Annette
404-562-8893
U.S. EPA
61 Forsyth Street, SW
Atlanta, GA 30303
woods.annette epa.gov
Wornson
David
515-242-5817
Iowa Department of Natural Resources
Wallace Building
Des Moines, IA 50319
david.wornson@dnr.state.ia.us
Youngdahl
Janet
303-236-6282
Dept. of hiterior/BLM
23080 Hope Dale Ave.
Parker, CO 80138
janet.youngdahl blm.gov
Page lOof 10
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Fifth National Training Conference on PRP Search Enhancement
Roster of Conference Participants By Region
May 16-18, 2006
St. Louis, MO
Participant
Phone Number!
Address/Mail Code
E-Mail Address Participant
Phone Number!
Address/Mail Code
E-Mail Address
REGION I
States within Region I lncIud CT, ME. MA, NH, RI. and ‘sT
UIEP4 Rw laa I, I Congress Street, Suite 1100, (mail code_J Boston, MA 02114-2023
Sharon Fennelly
(617) 918-1263
(mail code HBR)
fenne l ly.sharon@epa gov
Ann Gardner
(617) 918-1895
gardner ann@epa gov
Ronald Gonzalez
(617) 918-1786
(mail code. SES)
gonzalez.ronald cpa.gov
Tina Henneasy
(617)918-1216
(mail code HBR)
hcnncssy tlna@cpa gov
Rose Howell
(617) 918-1213
howell rose@epa gov
James Israel *
(617)918-1270
(mail code HBS)
israel Jamcs@cpa.gov
Donna Murray
(617)918-1409
(mail code HBS)
tnurraydonna epa gov
REGION 2 States within Region 2 Include: NJ, NY, PR. and VI
U2 ’A, Rrgba 2,290 Broadway, New York, NY 10007-1866
Carol Berns s
(212)637-3177
bcrns carol@epa gov
.
PRP Search Enhancement Team/Contact
May 9, 2006
Page 1 of 7
-------
Participant
ne
E-Mail Address Participant
Phone Number!
Address/Mail Code
E-Mail Address
REGION 3 States within RegIon 3 Include: DR. DC. MD, PA, VA and WV
USEP4 Rqioiu J. 1650 Arch Street, (mail stop_i. Philadelphia, PA 19103-2029 U S Department of the Interior, 1849 C St. NW. MS 6412. Washington, DC
20240
Ben Joaeph
(215) 814-3373
joseph ben@epa gov Joanna Day
(202) 219-1657
jcitronday( yahoo corn
LcoJ MUWn
(215)814-3112
mul lrnleo @cpagov
REGION 4 States within RegIon 4 Include: AL, FL, GA, KY, MS, NC, SC and T
U PAJ R,gjoa4, 61 Forsyth Street, SW, Atlanta, GA 30303-3104
Soath Carolina,’ SC Department of Health and Environmental Control.
Bureau of Land and Waste Mgmt, 2600 Bull Street,
Columbia, SC 29201
Greg Armsfrong
(404) 562-8872
annstrong greg@epa gay
David WilkIe 803-896-4168
walkietd@dhec Sc gov
Wilda Cobb
(404) 562-9530
cobb wtlda@epa gov
Pat Vincent 803-896-4074
vinccnpl@dhcc SC 89V
Jacqueline Harvey
(404) 562-8882
harvey jackic@epa gov
Tennessec Department of Environment and Conservation, Division
of Rernediation , 4th Floor, L & C Annex
401 Church Street, Nashville, TN 37243
Colleen Michuda
(404) 562-9685
michuda colleen@epa gov
Ed HarrIs
(615) 532-0131
cd hams@statc tn us
Herb Miller *
(404) 562-8860
miller hcrbert@epa.gov
David Henry
(615) 741-1440
david henryt state tn us
Tony Moore
(404) 562-8756
moore ton cpa gov
Mark James
(615) 532-0131
Mark James@state.tn us
Abby Rhodes
(404) 562-8889
rhodes abb epa gov
Robert Powell
(615) 532-0916
robert powcll®state tn us
Jim Snow
(404) 562-8723
snow.Jalnes@epa gov
Solomon Sparks
(404) 562-8857
sparks midiael@epa gov
‘PRP Search Enhancement TeanilContact
May 9, 2006
Page 2 of 7
-------
Participant
7NZ Id
E-Mail Address
Participant
Phone Number!
Address/Mall Code
E-Mail Add rest
Blake SterlIng
(404) 562-8852
sterlingblakcc epagov
Kat West
(404) 562-9574
west kathlcen@epa gov
William Wllkerson
(404) 562-8766
wilkcrson williain@epa.gov
.
Anneite Woods
(404)562-8893
woods anneue@epa.gov
USEPA, Region 4,228 Salem Glen Way, Conyers, GA 30013
Karen Coleman (678) 625-0068 I coleman karcn@epa gov
REGION 5
States within Region 5 Include: IL. IN, Ml, MN, OH and WI
USEP4 RqIo 5, 77 West Jackson Boulevard, (mail slop Chiesgo, IL 60604-3507
Fred Bartman
(312) 886-0776
bartman fred@epa gov
Sheri Blanehln
(312) 886-4745
(mail stop SR-6J)
bianclun shen@epa gov
OTace Co
(312 )353-6779
(mail stop SR-6J)
cogracc@epa.gov
Joseph Kawecld
(312) 886-7236
kawedci.Joseph@epa.gov
Thomas Krueger
(312) 886-0562
(mail stop. X)
Krueger Thomas@cpa gov
Joseph Malek
312-353-2000
malek joseph@cpa gov
Linda Mangrum
(312) 353-2071
mangrum.linda epa gov
Thomas Marks
(312) 353-6591
(mail stop SR-6J)
marks.IhoTnas@epLgOv
William Ryzcek
(312)886-7184
ryczek wlIllaIn@cpLgov
.
Lance Vlcek
(312) 886-4783
vlcek lance®epa.gov
PRP Search Enhancement Team/Contact
May 9, 2006
Page 3 of 7
-------
Participant
1
Phone Numberl
Address/Mall Code
E-Mail Address Participant
Phone Numberl
Address/Mall Code
E-Mail Address
REGION 6 States within RegIon 6 Include; AR L4. NM, O K and TX
VSEP4 Rqton 6. 1445 Ross Avenue. Suite 1200. (mail stop Dallas, TX 75202-2733
Oklahoma Quapaw Tnbe of Oklahoma
P0 Box 765. Quapaw, OK 74363
Barbara Aldridge
(214) 665-2712
(mail atop 6SF-AC)
aldndge.barbara epa gov
Tim Kent
(918) 542-1853
tkent©quapawtribe ram
Carl Bolden
(214) 665-6713
(mail stop: 6SF-AC)
boldcn.carl@cpa.gov
Oklahoma Cherokee NationflTEC,
208 E Allen Rd , Tahlequah, OK 74464
Jamie Bradsher
(214) 665-7111
bradsherjamie@epa gov
Susan Morang
(800) 259-5376
smorang chernkee.org
Linda Brewer
(214) 665-7143
brewer linda@cpa gov
Cynthia Brown
(214)665-7480
brown cynthia@epa gov
Lydia Johnson
214-665-8419
johnson lydia@cpa gov
Kevin Shade
(214) 665-2708
(mail stop 6SF-AC)
shade kevm@epa gov
Wren Slenger
(214) 665-6583
stenger wren@epa gov
Connie Suffice S
(214) 665-7345
(mail stop 6SF-AC)
sutticc conn1c cpa gov
Pamela TravIs
(214) 665-8056
travis pamela@epa gov
Robert Werner
(214) 665-6fl4
werner robcrt@epa gov
Jan Wilson
(214) 665-2733
(mail stop 6SF-AC)
wilson janis®epa gov
REGION 7
States within RegIon 7 Include; IA. KS, MO. and NE
US 4, Rqioa 7, 901 N 5° street, (mail stopJ, Kansas City, KS 66101-2728
Iowa Iowa Department of Natural Resources.
Wallace State Office Building.
900 E Grand Avenue, Des Moines, IA 50319
Cheryle MIcInsid •
(913) 551-7274
micinsks cheryle®epa.gov
Jessica Montana
(515) 281-8934
jessica montana@dnr state ia us
Anna Rock
(913) 551-7451
rack anna@cpa.gov
David Wornson
(515 ) 242- 5817
david wornson@dnr state ia us
Norma Tharp *
(913) 551-7076
(harp norma@epa gov
Kansas: KS Department of Health and Environment,
1000 SW Jackson. Suite 410. Topeka, KS 666 12-1367
* PRP Search Enhancement Team/Contact
May 9, 2006
Page 4 of 7
-------
Participant
E-Mail Address
Participant
Phone Number!
Address/Mail Code
E -Mail Address
Scott Nightingale
785-296-1666
SNighun@kdhe state.ks.us
/i(issour, MO Attotney General’s Office.
P0 Bo c 899, Jefferson City, MO 65102
CImt Barnett
573-751-8370
clint barnett ago mo gov
Missouri Missoun Department of Natural Resources,
1738 E Elm, Jefferson City, MO 65102
Karen Cass
(573) 751-7879
karen rass@dnr mo gov
-
Tim Elken
(573) 522-8057
tim eiken@dnr mo gov
Don Van Dyke
(573) 522-3351
don van dykc@dnr mo gov
Rebecca Wells-
Albers
(573)751-8393
rebecca wclls-albers@dnr nto gov
Missouri Missouri Department of Natural Resources,
1101 Riverside, Jefferson City, MO 65101
Kara Valentine
(573) 751-9911
paulagaines@dnr mo gov
REGION S
States withIn RegionS include: CO. MT. ND, SD, UT anti WV
USEP4 Regkni 8 999 18 a Street, Suite 300. (amil op:_J Deavcr, CO 80202-2466
USDA 740 Shams Sheet. Ream 309. Goldes, CO 80207
Sharon Abendachan
(303) 312-6957
abendschan sharonQ )epa gov
Alicia Bennett
303-275-5542
alicia bennett usda.gov
Andrea Madlgan
(303) 312-6904
(mail stop SENF-L).
madigan.andrca©epa.gov
Department of the Interlor/BLM 23080 Hope Dale Ave , Parker, CO 80138
Virginia PhillIps
(303) 312.6197
phillips virgima@epa.gov
Janct Youngdahl
(303) 236-6282
janct_youngdahl®blm guy
William Rosa
(303) 312-6208
WG.Ross@cpa gov
Mike Rudy
(303) 312-6332
(mail stop SENF-RC)
rudy mike@epa.gov
PRP Search Enhancement Team/Contact
May 9, 2006
Page 5 of 7
-------
Participant
Aode
E-Mail Address Participant
Phone Number!
Address/Mali Code
E-Mail Address
REGION 9 Slates within RegIon 9 Include: AZ. CA, HI, NV, AS and 61.1
VS 4 tsiv 9. 75 Hawthorne Street. San Francisco, CA 94105
California Department of Toxic Substances,
8800 Cal Center Dr. Sacramento, CA 95826
Steven Arbaugh •
(415)972-3113
(mail stop: SFD-7-B)
arbaugh ateve@cpa gov
Steven Rosa
(916) 255-3694
aross@dtsc.ca.gov
William Keener
(415) 972-3940
keener.bdl@epa gov
Lewis Maldonado
(415) 972-3926
Maldonado Lewis@epa gov
Kim Muratore
(415) 972-3121
muratore klm@epa.gov
Kim Sa age
(415) 972-3358
savagc kun@epa gov
I I
REGION 10
States
wIthin RegIon 10 Include: AK. ID, OR and WA
USRP.1, Rqias ID, 1200
Sixth Avenue (mail stop J, Seattle, WA 98101
Lisa Castanon
(206) 553-0465
castanonIisa@epa.gov
Susan Haas
(206) 553-2120
(mail stop: ECL-1 10)
haas susan@cpa.gov
‘
Lloyd Oatls
(206) 553-2850
oatis lloyd epa gov
G echen Schmidt’
(206) 553-2587
(mail stop: OEA-095)
schmidt grechen epa gov
USEPA Headquarters
HQ Technical Support Contractor I Conference Support
USEPA Hggiqwfm. Arid Rios Building. 1200 Pennsylvania Ave. NW, Washington, DC 20460
DPRA Inc., 1300 North Seventeenth St. Suite 950. Rosslyn, VA 22209
Nancy Deck’
(202) 564-6039
(mail stop 2273A)
deck.nancy©cpa.gov
Don Allen
(703)841-8020
don allcn@dpra.com
Clarence Featherson S
(202)564-4234
(mail atop 2272A)
featherson.clarence@epn gov
Steve ICeim
(703)841-8041
skeim®dpta coin
Eric French *
(202) 564-0051
(mail stop 2273A)
french enc( epa gov
Stephen Bess
(202) 564-5461
hess stephen (9cpa gay
Helen Keplinger
(202) 564-4221
(mail stop- 2272A)
keplingcr helen@cpamsil epa g
liollis Lusucky
(202) 564-4217
(mail stop: 2272A)
Iuzecky.hollis®epa.gov
PRP Search Enhancement Team/Contact
9, 2006
: 6 of 7
-------
Participant
Address/Mall Code
E-Mail Address
Participant
Phone Number!
Address/Mail Code
E-Mail Address
Mike Northridge
(202)564-4263
(maji stop 2272A)
northndge.mithael epa.gov
Bruce Pomphrey
(202)564-4222
(mail stop 2271A)
pumphrcy.bruce epa.gov
Neilima Senjalla
202-564-6079
(mail stop. 2273A)
senjalia neilima epa.gov
Gregory SullIvan
(202) 564-1298
Lmail stop 2273A)
suliivan.greg epa.gov
Joe Tleger
(202) 564-4276
t iegerJoe®epa.gov
USEPA, National Enforcement Investigations Center, Denver Federal Center, Building 25/Door E-3,
P0 Box 25227, Denver, CO 80225
Jon BeihoiTer
(303) 462-9114
bcthoffcrjon @cpa.gov
Douglas Kendall
(303) 462-9104
kendall douglas epa.gov
Gene Lublenleckl
(303) 462-9012
lubienteclci gene epa.griv
Don Smith
(303)462-9111
smith doiaj@epa gov
Total ParticiD ants :
EPA = 78 Other Federal Agencies = 3
State = 16 Contractor/Pnvate Firms
Tribal = 2 TOTAL — 101
* PRP Search Enhancement Team/Contact May 9, 2006
Page 7 of 7
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Muft / Dex
QwckRelercnce /‘We S ten,
-------
Financial Analysis & Ability to
Pay
-------
LEO J. MULLIN
Mr. Mullin is a cost recovery expert for the United States Environmental Protection Agency,
Region ifi. He joined EPA as a civil investigator in October 1989. Mr. MuLlin’s responsibilities
include conducting and/or overseeing PRP searches; working with the Office of Regional Counsel
and Department of Justice on Cost Recovery complaints; making determinations associated with
corporate veil piercing, corporate successor liability; ability to pay and financial assurance. Mr.
Mullin also assists in responding to questions concerning potential liability from the purchase of
contaminated property. Mr. Mullin has testified as an expert witness on matters such as ability to
pay, financial analysis and property valuation. He has also submitted testimony regarding issues
such as corporate veil piercing, corporate successor liability, and the costs of site cleanups. From
1982 to 1989 Mr. Mullin was employed as a Revenue Officer by the Internal Revenue Service and
prior to 1982, Mr. Muffin worked for an urban redevelopment consultant. Mr. Mullin received a
B.A. in Politics from St. Joseph’s University in 1982.
-------
Ability to Pay
and,
What to do if the
Assets are Hidden
FIFTH NAtiONAL CONFERENCE ON Leo J Muilin
PRP SEARCH ENHANCEMENT EPA Region ill
MAY 16.18. 2006 215 814-3172
St. Louis, Missouri Mullun.ieo epa gov
Basic Outline
Ability to Pay
— The Incomplete Story
• Look for Hidden Assets
• Introduction to the Federal Debt
Collection Act
Ground Rules
DISCLAIMER : This training material Is submitted for
background purposes only. It does not represent a
complete analysis of Issues discussed. Portions of
the materlai have been condensed and if taken out of
context could be Inaccurate. The Information
presented Is from an ablilty to pay perspective and as
such will not be in accordance with Genereliy
Accepted Accounting Principles (GAAP). The
concepts discussed are based on practical examples
and do not represent legal conclusions. This
document does not constitute Agency Guidance.
I
-------
EPA Guidance Documents
and Assistance
EPA ’s Superfund Gwdance Documents can be found at
htlpilcfpub epa govmnpaI,$auTeslpOI aeWdeaIbIpIaupetfunW
EPA’s Superfund Ability to Pay Guidance can be found at
NlpJI w epa epImcaowpobpaaIdean eppmfundIgeepoI.eIp.iptpc
Other EPA Ability to Pay Documents are referenced at
htlpJIw ,r spa
morn pdf
EPA’s Office of Enforcement end Comphance Assistance
(OECA) has some contractor resources OECA is also able to
refer you to people in other Regions who may help
To request this type of assistance please contact
Tracy Gipson (202) 564-4236
ABC’s of Accounting
• The Balance Sheet Equation.
Assets
Liabilities
Equity
Assets = What you have Equity = The difference
between Assets
Liabilities = What you owe and Liabilities
9p Ability to Pay
Equation
Holdings ATP Target is the
- Need difference between
ATP Target Holdings and Need.
Holdings = What do you Have
+ What will you aet
Need = What do you need
+What will you need
2
-------
ABC’s of Ability to Pay
• Assumes everything can be conveiid to dollars.
• Assumes the cost to convert so dollars Is not
significant.
• Assumes we all agree that the dollar
value Is reasonably accurate.
ATP Topics
for Another Day
• How to verify the submission.
• How to project future income.
• How to project future needs.
• How to Present and Defend the Analysis.
What do we hear
about Today???
• Identifying Hidden Assets
• Introduction to the Federal Debt
Collection Procedures Act of 1990
(28 U.S.C. § 3001 etseq.)
3
-------
Where are Hidden
Assets???
Look to the Balance Sheet Assets
- Liabilities
Assets = Current Assets Equity
PP&E
Other Assets
Current Assets include Cash, Receivables. Inventory
(anythLng likely to turn into cash this year)
PP&E includes Plant Property & Equipment
At the lesser of costs after depreciation or fair market
value
Other Assets include many things even Hidden Assets
WHAT ARE OTHER ASSETS?
Intangibles Investments
Goodwill in subsidiaries
Patents other secunties
Everything Else
What includes Everything Else?
EVERYTHING ELSE
Antiques
Real Property
Office Art
4
-------
1
doyou do once
you find a
Hidden Asset?
Don’t lose focus Bring in Experts
Recognize the Costs for a Forced Sale
Don’t Get Greedy!!!
Identifying Hidden Assets
Sources of Information
Databases: Lexs, Searchsystems.net.
Auto Track, Library Staff
Submissions: Financial Statements,
Tax Returns, Court Filings
Personal Observation: Pictures,
Informants, Appraisers
WHAT HAPPENS IF
IT IS NO LONGER TIlE
PRP’s?
I
I
5
-------
General Structure of the
Federal Debt
Collection Procedures
Act of 1990
1) DefInitions and General ProvisIons (28 u.s C § 3001 at seq)
2) Prejudgment Remedies (28 U.S c 3101 at seq)
3) Postjudgement Remedies (28 U S.C § 3201 et seq)
4) Fraudulent Transfers (28 U.S C § 3301 at seq)
Key Definitions & Provisions
3001 A00licabfluly
(a) in en.rei.-Except .3 provided m esbeenien (b).
the iapIer provides the es ione dvii pioov nes I or the United Slates-
(lptoreonvorajiidgmemonedebt , at
(2) to obtain, before pJdgnhcnl one daly lore debt.
a tweedy m coinectesi whit audi demi
I 3002 Dethultemls (3) D.br means-
(A)(Ioanej, or
(B) en artesait 111510 owing to the Unded Slates oh ecount of
line penalty, recovery of a cost Incurred by the United Slates. or
otIu .T 5OWCI Of indebteebhuli to the Unlt d Slates,
flow Does this help?
section 3304(b ) provides:
(Al transfer made or obligation incurred by a debtor is fraudulent
as to a debt to the United States which anses before the
transfer is made or the obligation is incurred if—
(1)(A) the debtor makes the transfer or incurs the obligation
without receiving a reasonably equivalent value in exchange
for the transferor obligation, and
(B) the debtor is insolvent at that time or the debtor
becomes insolvent as a result of the transfer or obligation, or
6
-------
Fraudulent Transfers Part II
section 3304(b ) continued:
The Transfer is also Fraudulent if
2)(A) the transfer was made to an insider for an
antecedent debt, the debtor was insolvent at the
time: and
(B) the insider had reasonable cause to
believe that the debtor was insolvent
What is an Insider?
(A) If the debtor is an individual— an insider is
(I) a relethe of the d or or of a general paltrier of the deb
(ii) a partherdeip In etiali the debtor In a ganeral pamier
(I C) a general partner In a peithelofrip deaathed I i daLine (S) or
(lv) a XiItCigtiOn ci wf%tdt the debtor as diesor. offi r. or
person a sorttroi
B) If the debtor Is a corporation— an Insider is
(I) a desuor of the debtor
(ii) an oflicci of the debtw
(iii) a pareon in ccnlrbt Of Ore debtor
(iv) e peimriersiup hr wIder era debtor lee general peIthal
(v) a ginieral penner ma parmereirip desaibde hr uauea (iv), or
(vi) a relative of a general partner. dirennr. alOne.
or parson in oonlrol of the debtoi
What is an Insider? (cent.)
(C) If the debtor us a partnership— an Insider is
(I) a general portlier in the dobtoc
(11)0 ,elallve of a general portlier hi, a general goitre, of,
or, peisoir In ennoal Of the debtoc
(iii) aeodrez partnership a wlrrd i the debtor in a general partnec
(iv)a general partner me partnership deraibed in dause (iii) or
(vi a poison hi airitrol of the debtor
(0) an affiliate, or an Insider of an affiliate as if
the affiliate ware the debtor; and
(E) a managing agent of the debtor
7
-------
What if a Fraudulent Transfer
Happens???
In an action or proceeding under the FDCPA,
the government may obtain:
(1) avoidance of the transfer or obligation to
the extent necessary to satisfy the debt to the United States.
(2) a remedy against the asset transferred or
other property of the transferee, or
(3) any other relief the circumstances may require
CONCLUSIONS
• Ability to Pay In Its simplest form Is identifying what is not _____________
needed
• Look for Hidden Assets but keep It in perspective
• When Appropriate Use the FDCPA
For questions cell
Leo J Mullin. EPA Region Ill
215 814-3172 Multin.Ieo@epa.gov
8
-------
NOTES
-------
MultjDex
QwcA fle(e,cnce ilidex System
-------
Liability Insurance
-------
RON GONZALEZ
Mr. Gonzalez is a senior enforcement attorney in the Superfünd Legal Office of EPA Region l’s
Office of Environmental Stewardship. Since joining EPA in 2000, Mr. Gonzalez has provided
legal support to both the Region’s Remedial and Removal programs, handling cost recovery
enforcement matters and providing legal support for remedy decisions. Mr. Gonzalez has also
worked extensively on insurance coverage issues here at EPA and serves the Region’s Insurance
Point of Contact with EPA Headquarters. Prior to joining EPA, Mr. Gonzalez was in private
practice in Hartford, Connecticut, focusing primarily on insurance coverage litigation,
employment law and other commercial litigation matters
Mr. Gonzalez received his J.D. from the Boston College Law School in Boston, Massachusetts in
1991
-------
FIFTH NA11ONAL PRP SEARCH ENHANCEMENT CONFERENCE
St. LOUIL MO
Tu.sday. May It 2006
Liability Insurance
LIABILITY INSURANCE
COVERAGE ANALYSIS
Ron Gonzalez
EPA Region 1
Presentation Overview
• Overview of Coverage Issues
• Triggering the Policy: “Occurrence” and
the Timing of Property Damage
• Gathering and Evaluating Evidence
Necessary to Support a Claim
• Evaluate the PRP’s Potential Claim for
Insurance Coverage at the Site
I
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Presentation Overview (cont.)
• Obtaining and Reviewing Policies
• EPA Insurance Points of Contact
Overview of Coverage Issues
• General liability policies
— Protects insured against claims by third
parties
— Not first-party (property) policies that pay for
loss to the insured’s own property (e.g. fire)
• Comprehensive General Liability (CGL)
• Commercial General Liability
Overview of Coverage Issues
• Insuring Agreement:
— all sums which the insured shall become
leciallv obiluated to pay as damaaes
because of
A. bodily Injury or
B. DroDertv damaue
caused by an occurrence
2
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Overview of Coverage Issues
Occurrence:
An accident. induding injurious exposure to
conditions, which results, durina the aolicv
Deriod . in bodily injury or DroDerty damage
that Is neither exoected nor Intended from
the standpoint of the insured.
Overview of Coverage Issues
Sudden & Accidental Pollution Exclusion:
- Exdusion (f) excludes bodily Injury and property
damage:
arising out of the discharge, dispersal, release or
escape of smoke, vapors, soot fumes, acids,
alkahs, toxic chemicals, liquids or gases, waste
materials or other Irritants, contaminants or
pollutants into or upon land, the atmosphere or any
watercourse or body of water; but this exclusion
does not apply If such discharge, dispersal,
release or escape is sudden and accidental .
Overview of Coverage Issues
Sudden and accidental has two
interpretations:
• Unexoected and unintended — no
temporal element
- Minority position
- Regula ry mIsrepresenta on argument
• Sudden means abruot — temporal
requirement
- Majority position (more tP n twios as many)
3
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Overview of Coverage issues
Overview of Coverage Issues
Owned Property Exclusion
• Owned Property
• Rented Property
• Formerly Owned and/or Rented
Property
• Care, Custody or Control
• Absolute Pollution Exclusion
— 1985-1986 tirneframe
— No coverage for traditional environmental
cleanup costs
Overview of Coverage Issues
— Most eastern jurisdictions say groundwater is
third-party property
— More uncertainty in the western states
— Questions as to whether source removal to
protect groundwater is third-party property
damage
— If no groundwater contamination, not many
jurisdictions will say its covered
4
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Overview of Coverage Issues
Allocation:
— Which policies of all the policies that are
‘triggered” will pay and/or in what order?
— Generally two approaches
•Jo tandSeveral- ’plckandthoose”
• Pro Rata — ‘fair share’
— Complex issues
• Second level of analysis?
Triggering the Policy: “Occurrence”
and the Timing of Property Damage
• Occurrence:
An accident, including injurious exposure
to conditions, which results, durina the
policy period , in bodily injury or orooertv
damaae that is neither expected nor
intended from the standpoint of the
insured.
Triggering the Policy: “Occurrence”
and the Timing of Property Damage
• First, some sort of event...
• And then the question is ‘When did the
property damage occur?”
5
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Trigger of Coverage Issue
Trigger of Coverage Issue
Exposure:
—First discharge to environment, e.g.,
when solvent first hits the ground
—The analysis may not focus as closely
on when precisely the third-party
property gets impacted
Trigger of Coverage Issue
Manifestation:
—When damage becomes known or
reasonably could have been known
—Usually is after 1985
—Minority of junsdictions
• Four approaches:
• Exposure
• Manifestation
• Injury in Fact
• Continuous Tngger (triple trigger)
—Policy in one year gets triggered
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Trigger of Coverage Issue
injury in Fact:
—When property is actually contaminated
—Need to establish, e.g., when hazardous
substance leached into groundwater
—Perhaps most fact-intensive
—May need to obtain expert witness
Trigger of Coverage Issue
• Continuous Trigger:
—AU pokcies from exposure to
manifestation (triple trigger)
—Analogy to the asbestos cases
—Courts’ desire to maximize available
coverage
—Adopted by majority of the courts that
have decided the issue
Trigger of Coverage Issue
• Tngger issue is still unresolved in a fair
number of junsdictions
• Factual development is very important
• Good discussion setting out the four
approaches can be found in Quaker State
Minit-Lube, Inc. v. Fireman’s Fund Ins.
Co., 868 F. Supp. 1278 (D. Utah 1994)
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State-by-State Survey of Law on
Insurance Coverage Issues
www.coveraaeana lvsis.com!statebvstate/lndpx.html
www.amre.com
Barry R. Ostrager and Thomas R. Newman,
Handbook on Insurance Coverage Disputes (13th Ed.,
Aspen 2008)
Insurance Coverage Analysis
• Often question is framed as:
— “Does the policy cover pollution?”
• Better question may be:
— “Are EPA’s (or the State’s) costa at this Site
covered?”
Insurance Coverage Analysis
You need to consider both:
—The terms of the policy (contract)
—The facts at your Site
8
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Gathering and Evaluating Evidence
Necessary to Support a Claim
• Two Threshold Questions:
• Absolute Pollution Exclusion?
• Evidence of some third-party property
damage, which may be groundwater (GW)
contamination?
Gathering and Evaluating Evidence
• What is the nature of the site?
• Identify releases and disposals
• Has contamination impacted third-party
property?
• When did the contamination impact third-
party property?
• Evaluate facts in light of the insurance
policies
Gathering and Evaluating Evidence
• The Nature of the Site
— Former manufacturing facility?
— Waste processing or transfer station?
— Landfill?
9
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Gathering and Evaluating Evidence
Identify Releases and Disposals
— Actual releases (threat of release
probably not enough)
— Sudden or gradual?
— Intent?
Gathering and Evaluating Evidence
• Identify Releases and Disposals
(Continued)
— Operational history of the sIte
— What is the nature of the site
contamination?
— To what extent is site contamination the
result of PRP site operations?
— Intent?
1
Gathering and Evakiating Evidence
When did releases/disposals happen?
— When was the first release/disposal?
— What are the dates of releases of the
contaminants of concern that are
driving the cleanup?
10
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Gathering and Evaluating Evidence
• Has contamination impacted third-party
property?
— Not necessarily the same analysis as “Site’
- Groundwater(GW) can be third-party property
— Evidence you have and evidence you can
develop
— Can we allocate the costs associated with the
third-party property?
— If possible, start thinking about these issues
early In the investigation
Gathering and Evaluating Evidence
• When did contamination Impact third-
party property?
important points to identify include:
- When GW beyond PRPs property
boundary was first contaminated
— When contamination became
evident/observed in GW
Gathering and Evaluating Evidence
• When did contamination Impacting third-
party property first become manifest?
— When did regulatory agencies (EPA, State,
Tribe. etc.) become involved at the site?
— What did regulators know about the nature
and extent of contamination at the site?
— What did the regulators convey to the insured
PRP about contamination at the site (including
(3W, third-party property, etc.)?
11
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Evaluate the PRP’s Potential Claim
for Insurance Coverage at the Site
This is essentially a litigation risk analysis
— Law of the jurisdiction
- Value of the various exclusions
— Existence/non-existence of policies
— How many policies are triggered
— Limits of the policies that are triggered
— Exhaustion of limits
— Other defenses
- Late notice, payment of premium, voluntary payments.
etc.
Obtaining and Reviewing Policies
• Request to PRP or Trustee (if in bankruptcy)
• . . . all Insurance policies that may potentially
provide the Respondent with Insurance for bodily
Injury or property damage In connection wIth the
SIte and/or Respondents busIness operations
(lnciudlng, but not limIted to, ComprehensIve
General LiabIlity). include, wIthout limItation, all
primary, excess and umbrella polIcIes.
sr i .
Obtaining and Reviewing Policies
• If you are aware of any such policies.. . but
have no copies, identify each such policy to the
best of your ability by identifying:
• Insurer (name and address)
• policy type and number
• named Insured
• lImIts
• effectIve dates
.a1W t t8 aS
12
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Obtaining and Reviewing Policies
• Determine whether you have sil the policies issued
• if unsure if policies exist or if the policies are lost...
- Have PRP request polices from insurer
- Have PRP reviaw insurance, financial, legal, safely and
other corporate records
— Brokers. lawyers, accountants and bankers
— Look for policies and also for evidence of policies
Obtaining and Reviewing Policies
• Evidence of policy Includes:
- Policy number on documsntslcorrespond.nc.
— Renililsi?
- Schedule of underlying insurance In .xc.s&un*relIs policy
- Certificats of Insurance
- Loss control reports
- Documents showing preritium payments
• Burden of proof leon the insured (PRP)
— Will n.sd to establish typ. of coverage e.g.. liability), policy
—, — llmHa
— Expert testimony Is somsilmes used for this
Obtaining and Reviewing Policies
• Insurance Archeology
— May or may not be cost effective to use services
- Knowledg, about what to look for
— Knowledge about places to lock
— Knowledge concerning historical industry practIces ra:
Costs c i venous covsregse (uInvis. ucliatons)
13
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Obtaining and Reviewing Policies
• Read all policies and the endorsements
• Investigate “exhaustion of limits” or the extent of the
“erosion of limits”
• Sittl.mnta?
• Hu PRP glvn ails or fug snvlronmsntal raisas.?
• Consider preparation of a coverage chart
EPA Insurance Points of Contact
K?A R o .
jg t
P o.eIEmai1 lior.adon
Region I
Ronald Gonzalez
617 9 18 -I 71 16 - gv cz auald cpeg
Region 2
Virginia Cony
Muthu Swidesm
Frwicna Zizila
212 637-3134 - cun sirguea 1g ep ngoy
212 637-31411 -
212 637-3135 -
Region 3
M y RegaIn
215614-26116 - la g y
Coverage Chart
.—-- — — ‘ -—-
I
14
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EPA
P T. 11 I eratâs
Rsg1ci 4
K .o SUçu
Sw H s
Ray SaiW d
C Iiy Wia(ilw (RCRA)
404 562-9540 -
404562-9700- b M go
404 562-6690 -
404 562-9569.
RagIm 5
Sus& Prout
Lms 0v .do
3 12 353-l029 - lI .g2
312 353-9536 -
Ra cii 6
8iñ ri ?
214665-2157-
Re cm’
Auà’,yA
913 551-7255-
E !&B
Co s
LmiáUaf am1&
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Riclwd Siak
Aáes Ma
303 312-6639 -________
303312-6904-
R. om9
JimCclhn.
4I5972-3 694-c Jkj .
R.ri 10
J f Byms
206 353-0050 -
H.ifrp i
Enn Sm4th
Am. Bavbc
Tim Dicurno
Dmhz Er mec
202 564-2038 -
202 564-6063 -
202 564-4790 - dici ojim(6 y
202 564-4233 -
EPA Insurance Points of Contact
EPA Insurance Points of Contact
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NOTES
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Mult /Jiex
Quick Reference ThRee System
-------
The National Enforcement
Investigations Center
& PRP Search Expertise
-------
GENE LUBIENIECKI, JR
As Civil Program Coordinator at the Environmental Protection Agency’s National Enforcement
Investigations Center (NEIC), Denver Colorado, Mr. Lubieniecki currently manages NE1C’s national
civil enforcement investigation activities across the United States. NEIC is an EPA expert investigation
and technical support center for civil and criminal environmental enforcement support. Mr. Lubieniecki
has been with EPA-NEIC since 1979. Prior to being the Civil Program Coordinator, he directed a
group of engineers and scientists responsible for conducting large-scale compliance monitoring
investigations and was also a senior project manager leading such investigations. His technical
experience includes wastewater and hazardous waste management and legal case support at a wide
variety of federal, municipal, and commercial industrial facilities. Prior to his work at the NEIC, Mr.
Lubieniecki was a principal member of a research team at the US Army Construction Engineering
Research Laboratory, Champaign, IL, investigating and providing solutions to a wide variety of water
and wastewater related problems at military installations.
Mr. Lubieniecki holds a Masters Degree in Environmental Engineering and a Bachelors Degree in
Biological Sciences, both from the University of Illinois.
DR. DOUGLAS KENDALL
Dr. Kendall is a chemist at NEIC, where he has provided technical support for EPA enforcement cases
since 1981. Most of his work has been on RCRA and Superfiind enforcement for both civil and
criminal cases. Much of his work is in applied spectroscopy, particularly X-ray methods and infrared
spectroscopy. In addition to performing laboratory analyses, Dr. Kendall serves as a project leader
and as an expert witness for both EPA and DOJ. In 2005, Dr. Kendall received a level I Scientific and
Technological Achievement Award from the Science Advisory Board of the EPA. The award was for
a research paper that developed from an enforcement investigation. Dr. Kendall received his PhD. from
Harvard University.
JON BEIHOFFER
Mr. Beihoffer is a senior chemist at EPA’s National Enforcement Investigation Center (NEIC) in
Denver, Colorado. From 1986 to date, Mr. Beihoffer has served as a chemist at NEIC’ s Laboratory.
He works primarily on Superfund and criminal enforcement cases. His analytical instrumentation
specializations include nuclear magnetic resonance spectroscopy (NMR); mass spectrometry (MS);
and gas and liquid chromatography (GC and LC). Prior to joining EPA, Mr. Beihoffer worked at
environmental laboratory for two years performing gas chromatography/mass spectrometry (GC/MS)
analysis.
Mr. Beihoffer received his MS in Environmental Chemistry from the University of Montana in 1984 and
BS in Chemistry from the University of Minnesota — Duluth in 1981.
-------
DON SMITH
Mr. Smith has over twenty-seven years of experience in laboratory analyses and environmental
consulting. Of the twenty-seven years, about eight years were spent in commercial analytical
laboratories performing organic, inorganic, and radiochemical analyses and another six years as a
consultant. Mr. Smith has been with the U.S. EPA’s National Enforcement Investigations Center
(NEIC) for thirteen years. During his employment with NEIC, he has performed inorganic and organic
analysis and provided testimony in civil and criminal proceedings. Mr. Smith has a bachelor’s degree in
chemistry from Metropolitan State College in Denver. Currently, Mr. Smith is a Unit Leader in the
NEIC Laboratory Branch.
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CERCLA Cases
• Sauget
• WR Grace/Ubby
• Sblngfel low
• Coahocton C y Landfill
• Summ i lv*eMk ie
• Allied Signal
• Higgins Dieposal Service
• Refuse Hideaway Landfill
• RoebIrig Steel
• Upsi lon-Davis
• Kennecoti
• Presidio kmy Base
• Charles George Landfill
• AtnerlcanCyanamki
NEIC Has Supported
• Bunker Hill
• Higgins Farm
• Diamond Alkali
• BolIn Oil
• Route 561 Dump
• Westgate/Exlde
• Buttevworth Landfill
• LCP Chemical
• Helen Kramer Landfill
• TexTin
• Operating Industries
• Spleafleld
• ASARCO Smelter
• Hlghway2l8Perchlo rate
National Enforcement
Investigations Center
(NEIC)
Science and Technology Support
For PRP Identification
Oars Lbs
L . Da KaidiI
l BII
Dorn SM
What Is The NEIC?
• Division of the Office of Cnminal Enforcement,
Forensics, and Training (OCEFT wtthln the
Office of Enforcement and Comp lance
Assurance (OECA)
• Responsible for providing science and
technology support for afi EPA enforcement
programs
• About 90 FTE, mostly scientests and engineers,
including analytical laboratory, located in
Denver, CO, to support all enforcement
programs
I
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CERCLA Cases NEIC Has Supported
(cont.)
• Casmalla
• New Jersey Zinc/Horeseheed
Industr Ies
• Kerr-M ee
• Butterwcrth Landfifl
• LCP ChemIca Tar Lake
• Abex
• Center County Kepone (Nease
• Pollution Control Industries
• Beacon Helghta(Laurel Park
• Krejcl Lendt%II
• v-i oii
• Coeur DAlene
• ChenlOat Warehouse
• Clean Care Corp
• INEEL
• Weetbank Asbestos
• Industrial Excess Landfill
• Atlas Tack
• Tennessee Products
• Ex nmob l Ie/Sharon
SteeVFakmont Coke
• Anniston Lead
• Beede Waste Oil
• Sikes
• MyeraDtsnp
Dr. Doug Kendall
Better ID Through Chemistry
1. Compositional Analysis Identify all
major and minor components
2. Non-toxic or non-target compounds may
ID source of waste
3. Fingerprint
Qualitative match
Quantitative pattern of trace elements
Better ID Through Chemistry
1. Stringfellow Acid Pits
2. Paint cases
source and receptor matching
pigments and polymers
3. Instrumentation for Compositional
Analysis
2
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Stringfellow Acid Pits
• P-Chlorobenzene Sulfonic Acid
• Non-toxic waste from DDT production
3
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Source Identification Through
Paint Analysis
• X-ray diffraction to fingerprint
Pigments
• Infrared Spectroscopy to fingerprint
Polymers / Resins
• Light or Electron Microscopy to
Match particles
4
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Yellow Paint Comparison
X-Ray Diffraction
Green Paint Comparison
XRD
Ij us*M
Yellow Paint Comparison
IR Spectra
1.. .‘. _____
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Green Paint Comparison
IR note Cyanide
Compositional Analysis
• Screening Analyses to guide future work
• Identify all elements> 1%
• Speciate Compounds
• Use sample and site knowledge
• Bulk and particle analysis
Instrumentation
• Basic e.g. carbon/sulfur analyzer
• Complex e.g. NMR, SEM
• Non-environmental e.g. IR, XRD
• Complementary e.g. XRF, ICP & ICP/MS
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Sauget Area I and 2
Historical Case Study
Jon Beihoffer
Sauget Area I and 2
Strength of Evidence Approach
• Pathway
• Temporality
• Co-occurrence
• Gradients
• Plausible Mechanism
• Consistency of association
• Specificity
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Chemicals of Concern
• Removal Action
RIIFS
• Enforcement Action
Analytical Data
• Removal Action
• RIIFS
Enforcement Action
• Review of Company Documents
• Standard Manufacturing Process
• Standard Operating Instructions
• Memos
• Purchasing Records
• Shipping Records
• Historical Research
• Journals and Periodicals
• Industry Directories
Samples
8
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Process Materials
• Spent Catalyst
• Crude and Off-Spec Product
• Filter Cake
• Other Waste
Spent Catalyst
F
Crude and Off-Spec Product
-------
Other Waste
1
Artifacts
Filter Cake
10
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Conclusion
• Strength of Evidence Approach
• Chemicals of Concern
• Waste Types
• Archival of Samples and Artifacts
• Analytical Testing
Source-Receptor Measurement
Techniques
• ldsnt*fylng a sp.ctftc sourc of waits front
aivse posatbi. scurcis
• — m oth
— Trsc. instil coinpositton
— Mass Spsc omstry (IsotopIc)
- X-ray (fluorasasnos, dlftrscbon)
- Scanntn ilicPon mlcroscoçy(SEN)
- Gas chntm.tossa Spscvomsuy
(OCUS)
Matching some1 4ing
— from the waste too
source.
11
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Mass Spectrometric Techniques for
Measuring Isotope Ratios
• Heavy elements (plutonium, lead, uranium)
• Light element methods (carbon, oxygen, sulfur,
chlorine, etc.)
12
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Mass Spectrometnc Methods for Heavy
Element Matching
• ICP-Mess Spedrometry
• ICP-Mass Spectrometiy using multi-collector detection
• Thermal Ionization Mass Spectrometry using multi-
collector detection
Source•Receptor Analyses
Palmerton Pennsylvania
- Zinc Smelting -S.condary Zinc Recovery
- Lead cantantinatlon from gaseous and dust
cont affl lnwts
- Contilbutions from mildpl. sources
— Ot ectlve was to distinguish between sources
13
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aPi-I INNrWWP m
L
Students Sam lng Hwnk L er Near Paflr e,ton
(
Previous Studies Identified the Extent
and types of Contamination
• Buchauer 1973, Strojan 1978 and Beyer et al in
1984 characterized Zn, Cd, Pb, and Cu in the
environment in and around Palrnerton
• Ketterer, Lowry, Simon et.aI. attempted to
identify the sources of heavy element
contamination (Published in 2001)
• Examined lead isotope ratios and associated
elements
14
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Lead Isotope Ratio Analysis
• Well established technique
• Relies on variation in Pb isotopic composition
arising from varying inputs of radiogenic 206 Pb,
207 Pb, and 2 ° 8 Pb
• Isotopic composition of lead ores are
characteristic of the mine source
• Older lead sources have accumulated less
radiogenic 206 Pb, 207 Pb, and 208 Pb relative to
non-radiogenic 204 Pb
L t i in c md cba aipIiIe densn,sI c t ,ison% in he
enwoumnnl r a m nmeII - c ndai ziac r ’nwry
facdài , P&incekli i. Puiniyhuima. LSA
Mi . I Jan H ta.i . J 1r Iamb Mph .’.
?Ea* P. Nani aO
.4..
InG m • i
P
-4.
-
Conclusions of Palmerton Study
The Zn smelting Pb is derived from mixing of Zn ores
smelted of the 82 year history of the site.
• The EAF process Pb originates from mixing of scrap
steel furnace feedstocks and reflects more recently
mined, highly radiogenic Pb or from Missouri.
• Palmerton residential soil lead Is mostly derived from
EAF processing and Zn smelting
15
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Hills Iowa
Site Discovery
• Fa m.r USDA graNi bins sbidy rsvsal.d pirchiorats
• Prtvat. pobibi. water supply wells Ni the ares
• Shallow appruxlmatuly 30 feet deep In porous aurficlal aquifer
• Private water wall satepllng results Included perchlorete
A
Hills Iowa Perchiorate Study
• Unkno,vn source c i Perchiorate Contuminatlon
• Previous efforts to ID Included:
- Trace m .tal analysis
— Isotope ratios (quadrupole Instrument)
— Total Psrchlorate analysis
— Anion analysis
-------
Hills Iowa Perchlorate
Contamination
• Gioundwstsr sourc area —4 acres south of park arid school in
gr nfieid
• R dfrcm4ppbto392ppb-Average=89ppb
Action I. l • 24.5 ppb (1/2006)
• Soil source area - same 4 acre GW source area
• H lghzc4ppbto2e oppb -Averagex3 oppb
• Avsrags30ppb
Investigated Sources of Contamination
at the Hills Site
• information request letters (CERCLA 104(e))
• Agri-wholesale facility
• Cityof Hills
• FireWOrkS suppliers
• Maytag
S
NASA
Property owners - west side
• Railroads
University of Iowa
Other Possible Sources of Perchiorate
• Use in nuclear reactors and electronic tubes
• Automobile air bags
• Additives in lubricating oils
• Use in tanning and finishing leather
• A fixer for fabrics and dyes
• Electroplating
z
17
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Other Possible Sources of Perchiorate
(cont.)
• Aluminum refining
• Rubber manufacturing
• Paint and enamel manufacturing
• Methamphetamine laboratories
• Atmospheric generation
Suspected Sources and Investigations
• Suspected Sources
Fleworica — half duds whole duds, perthlorate spill
• Flares - RR Xlng, cases/boxes on ground. fight sabers
• Dynamite — Highway 218 oonelfu ion, mdc blasting
• Investigations
• Geophysical -ground penetrating radar, magnetometer,
conductIvity meter
• Excavation o( wire bundle, soap treated kimber, 8 inth steel
amnth
• Fingerprint analysts - d emical constituents in sourca groundwater
and contaminated welts versus fireworks, flares and dynamite
Results of Hills Iowa Source
Identification Study
:
—•
,
: • - --
-
r
-
-
.
N
c: :
18
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Proposed Light Element Stable Isotope
Investigation
• COndUct concurrent elemental constituent analysts using
a greater number of analytes
• Stable Isotope analysis of chlorine and oxygen In source
and groundwater samples
Why Isotopes?.
• Stable isotope ratios provide a unique
‘fingerpnnt” of a chemical compound
• Identify source of contaminant —whose is it?
• Indicate contaminant behavior
• Source variability must be characterized
• Microbial degradation has large isotope effect
How It Works
• Stable Isotope Fractionation
• Preferential partitioning of isotopes between
phases or between reaction and product species
- Function of dIfference in masses
• Examples:
— Evaporation of water — lighter elements ( 2 H and 160
partitioned to higher energy phases (vapor)
— Chemical reactions — lighter elements partitioned to
reactants (chlorine production)
-------
Light Element Stable Isotope Analysis
• Chlorine has two Stable isotopes, CI and 3T Cl
• Delta notation ô(%) = [ Rsample/Rstandard-1] x 1000
where R = l O/ltO, CV CI
• Precision of measurements normally +1-0.1 to 0.3%o
How are isotope ratios of perchiorate
measured in groundwater samples?
• Extract and recover ClO from water using ion-exchange
resin developed by ORr& to obtain —10 mg perchlorate
for isotopic analyses
• Requires sampling 1,000 liters of 10-ppb water
• Convert C10 4 to form that can be isotopically analyzed
using gas-source isotope ratio mass for thlonne isotope
analysis
• Compare groundwater Isotopic ratios of 37 C 1P 5 C 1 and
ieo,ieo with potential source materials
20
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Comparison of Chlorine and Oxygen Isotopic
Ratios in Groundwater
10
O
\_S____._.._ ..----
‘C
-10 -
-20
-30 .20 -10 0 10
Other Applications of Isotope Ratio
Mass Spectrometry
• Chtorinated so’vent source ID
• Nitrate/Nitrite source ID
• Waste source ID
Identification of PCE, ICE, and TCA from 4 different
sources using IRMS (from PhIIp, 2005)
-22 - PCE • Do’
?cL* PICI
—24- £ .PPG
TCA £ VUIcafl
T(A
TCE
TCA
* TCA
1CE ICE
— PcI
‘C
- PCE
—2 — 0 I 2 4
d 31 C I % (SMOC1
21
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Acknowledgements
• Dr. Mike Ketterrer, University of Northern Arizona
• Dr. Neil Sturchio, University of Illinois at Chicago,
Department of Earth and Environmental Sciences
• Craig Smith and Doug Ferguson, EPA Region 7
• Amy Bern, EPA-NEIC
References
• KiIIut M.E., L ryJ.Ii. SlnonJ.. H.,nØ flssK.. Novolr*M.P., 2001Usd
uid dislc00lls ilsmsnt composlioni I Ills InWo!wnsnl 1 1 W $ Z 1C
y t . P . Psi, USA. A sd
Gsodisnl.ey 16(2001) 201-229
• Pt PR., Jim. 2006. Th. ia. Sls mn pss s Toil Moil ifrç 9* ()I n
oiid FMs c% Emsl ng Cv , êr*l . ISEF Wcd , W * Bseil , W r1 $
• SUdlo NC, Bd*s JK., BsdlisG., Hcdls .L. 8r n G.M., Bsloso, AD..
Pdhsoicn Li. H sr P.8., Jsdoioil A..J., Blips J,, Pvd*xMs EnlIlcllnsIili
Oom.m ,nc., 1 1 .Ju,, . w d Truslinul, Sp i çW, 6.
Questions?
22
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Summary
• NEIC provides science and technology
support for Agency enforcement cases,
including CERCLA PRP searches
• Wide array of analytical capabilities to help
fingerprint hazardous substances to ID
responsible parties
• We do not have unlimited resources; we
look for unique opportunities
How To Contact The NEIC
• Gene Lubieniecki, NEIC Civil Program
Coordinator
• Lubien ecki.gene©eoagov
• 303-462-9012
23
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NOTES
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Mu lti / i cx
Quick Pclcce c icce Scctcccc
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PRP Search Issues
at Recycling Sites
-------
CAROL BERNS
Carol has been practicing law for over 25 years. The first ten years were spent as a staff attorney
with the Army Corps of Engineers in both Kansas City and New York. In 1990, Carol began
working for EPA Region 2 as a Superfund Enforcement Attorney. In addition to her caseload,
which runs the gamut from small owner-operator sites to large generator sites involving
thousands of parties, Carol is a member of the PRP Search Enhancement Workgroup and has
participated in and spoken at several conferences.
Carol received her J.D. from the University of Kansas in 1980. She received her B.S.. from The
George Washington University in 1974.
•1
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Recycling Sites
Issues that can arise during PRP
searches
Consolidated Iron and Metal Co.,
Inc. Superfund Site
• Newburgh, New York
• Adjacent to Hudson River
• Junkyard
• Operated from 1950s through 1990s
• Pnmanly handled cars, car parts, white
goods, transformers, IBM electronics
Con Iron
Site Background
• Map of site
I
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Con Iron Site Processing
Con Iron Site Contaminants
• Lead — pervasively throughout the Site
• Other metals
• PCBs
• BTEX compounds
• pesticides
• Burning
• Compacting/Bailing
• Shearing
• Smelting
• Flattening
• Battery cracking
• Tire piles
nation
Con Iron Site Cor
-------
—
—..—
.
— —
t
— I flL . I , ,.
——— — — — ? ?
4 I Ii... 4
Ii, F -
3
Con Iron Site PRP Issues
• Site documents — 200 + boxes weight slips
representing over 11,000 parties
• Deciphering weight slips
• No addresses! -Identifying parties and
getting addresses
• Same party identified differently
• Understanding what different types of
scrap were present (specialized terms)
Con Iron Site Evidence
cC JIAIIp 1101 0 lOyal 1PAJT
pk Ll I ..d g , n oiu
‘7 —.‘.-
Con Iron Site Evidence
— I _________
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Con Iron Site Evidence
I 1IL RAIT
k
-
Con Iron PRP Search Resources
Resources employed:
— Interview Site owner/operator — multiple times
— Interview other executive in scrap business
— Specialized information request letteis sent
out
— Asked for help identifying PRPs from
municipality PRP
— Newspaper clippings
— Cl visited some PRP locations
Con Iron PRP Search Resources
• Resources employed cont’d
— Documents from local and state enforcement
cases
— Documents from local environmental groups
— Newspaper articles
— Switchboard.comlother internet tools
— New York Secretary of States office
— Phone calls
4
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Mercury Refining Superfund Site
• Towns of Guilderland and Colonie, New
York
• Operated from late 1950s until 1998
• Mercury reclamation facility
• Retort ovens used to heat mercury bearing
materials — mercury recovered and further
refined
Con Iron Liability Issues
• SREA — determining what was in and out
• Setting up “tracked waste” categories
• Bankruptcies and dissolutions
• Successor liability
• “third prong” issues (Section 127(f))
Mercury Refining Superfund Site
I
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Mercury Refining Site
• Type of waste — mercury, PCBs
• Forms of mercury waste
— Batteries
— Thermometers
— Fluorescent bulbs
— Pressure regulators
— Vapor lamps
— In total, approx. 35 different waste types
Mercury Refining PRP issues
• Evidence-
— manifests, internal refining documents
— No 104(e)s because enough records
• Data input issues
— Common unit (Ibs) — required some
estimation
— Used total weight in (i.a.w. Waste in
Guidance)
Mercury
Refining r
—
M Ø), ‘Mi
adc • -9.
i .25P5
• _-. _4.____ .z -
—- I. _______________
N. - -.
6
-------
Mercury Refining transaction report
—S I.
—-——
— --
——
- -
Mercury Refining transaction report
J
—n-
t — ——
S Z - —— -
S ..
- - .. . . . .
Mercury Refining Legal issues
• SREA issues
— Scrap metal exemption
— Mercury was liquid/powder
— batteries
7
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Mercury Refining legal issues
• Address checking
— Team of people
— C I databases
— Google company databases
— LEXIS
• Successor liability issues
• 104(e)s to majors w! success. liab. issues
Mercury Refining settlements
• De Minimis settlement results
• 425 parties initially
• 65 offers returned as undeliverable
• 275 parties signed on so far (most under
$10,000)
8.
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NOTES
-------
( I )
(2)
Mul l i i i ex
Ojkk R Ie ,e , ce iid Syste’r ,
-------
PRP Search Issues
at Mining Sites
-------
JOSEPH TIEGER
Joseph Tieger is a senior environmental protection specialist and team leader in the Office of Site
Remediation Enforcement, Regional Support Division, U.S. Environmental Protection Agency,
Washington, D.C. He began his career with the federal government as a biologist with the San
Francisco District, Army Corps of Engineers, Regulatoiy Program. He then worked for the U.S.
Fish and Wildlife Service in California, Missouri and Washington, D.C. Joe has been with the
EPA CERCLA program since 1989. He has focused on enforcement issues relating to the
cleanup of hardrock mine sites and the associated processing and smelting facilities. Joe is
considered to be the enforcement program’s expert on mine sites, divided estates, and the
application of CERCLA liability at public/private sites. Joe has a B.A. and M.A. in Biology, from
San Francisco State University, an M.A. Public Administration, and a Juris Doctor, from George
Washington University. He is a member of the Maryland Bar.
-------
Owners
+ CERCLA SectIon 101(20) Doe. Not DIstingulali Owner. and
Dons Not Provide a Definition.
+ Black’s Law Dictionary
Own: “to have or poises. as property: to have legal
title to.”
Owner “One who has the right to possess, use, and
convoy something.”
• Webster Adds: “to have power over control.”
CERCLA Section 107(a) Liability
a
Owners
Operators
Generators
Arrangers
Things to Remember About Land
+ Someone Always Owns the Land.
+ Ownership Can Be Divtdsd by lime (Sold, Leased, Rented).
+ Interests Can Be Separatad end “Taken” or Conveyed (Fee or
Easements).
+ Ownership Can Be Divided Horizontally (Subdivided).
+ Ownership Can Be Divided Vertically.
And In somo cases, the airspace above land end
access to sunlight can b at Issue
+ lssuoskeDecldodbyStateLaw
I
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The Layer Cake
Surface Owners
+ Liable If They Have the Power to CONTROL the Activity.
Evenlftheydonotknowthepaftywlliieleaae
h idou. substances.
Subsurface Owners
• Under to. common law of moat elates subsurface owner.
have the RIGHT to enter onto the awface to the degree
necessary to gain eccese to the subsurface and to lake
action, needed to conduct misting activities.
• Inmo.tslat.e .thsydoNOlneedtopayfordamageto
surface owner. propeity If they can show their woit we.
re.aonsbly necessary to reach the mineral.
C• The subsurface minerel owner he. CONTROL over the
activity
+ State of Coloredo y. A.arco Re.. .ctI... Minlna Co.. at . L
008 F Supp. 1484(1085)
2
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Leftovers
t The owner of the mineral estate retains d S p to the
already mined, low-grade ore or the mining waste that Is
left on the land In the hope that either tedinology or the
ma,tet wW make preceasing profitable. These materials
often become the source of releases.
+ The owner of the mineral estate I. potentially liable as
owner and/or operator for releases of hasardous
sub$tenc s from these matettals
Summary - Who is Liable?
• The owner who has centi of the activIty that causes or
lathe aource of the releasel
• The mineral owner may or may not also ho lIable as the
operator.
• The owner of the material (ore, waste) that Is the source
of the release
+ The owner and operator may be the same or dlffsrent/
ent ld s.
What About the Groundwater?
• Ownerahlp control, end use of groundwater vasy by
state.
+ Sometimes groundwater Is claaslfted see mineral and
the ownership and use may belong to the surface
owner.
+ Sometimes groundwater Is classified as a state
resource end use can be controlled by the state.
+ Groundwater Is both “envlronmenr and a “natural
rescurce ’ under CERCLA Section Wi
3
-------
Mills and Smelters
+ MILLS: Receive “ore” and produce “concentrate” and
weetes waate rock end process tailings).
‘C. SMELTERS May be but frequently are not co.located
with mines or mills; receive end produce concentrate
and produce refined metal, dross, slag, end air
emissions.
What Is This Stuff?
‘C” REFINED METAL ingot
+ DROSS MAY have commercial vabje. a NOT ‘recØed ”
material Often sold or othejwlae sent toe specialized
ameker for further processing, a not a ‘waste” tmteas
disposed of”
‘C” SLAG The button of the pot. Impuntles. waste, often
contains hazardous substanss ,,
What Is This Stuff? ________
(continued)
+ Who is Liabis Depends on “The Deal” or “Who Owns Whet
end When Did They Own It?”
A “Toiling Agreement” — NOT an agreement to extend a
time Umh for litigation, aettlesnent, or filing a claim.
W In lire mining sectOr, an agreement between a mine and
a mill, a miii and e emelter, or among all of them, a
contract that detanninee payment far the metal is
due. The form and timing of the transaction determine
liability
4
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ANDREA MADIGAN
Ms. Madigan is a senior enforcement attorney in EPA’s Region 8’s Legal Enforcement Program,
Office of Enforcement, Compliance, and Environmental Justice. Ms. Madigan joined EPA in
1990 in the Atlanta regional office and transferred to the Denver office in 1998. She works
primarily on large Superfirnd enforcement cases and chairs EPA’s National Bankruptcy Work
Group. Ms Madigan frequently serves an instructor on a variety of environmental topics,
including Superfiind enforcement, bankruptcy, and environmental management systems. Prior to
joining EPA, Ms. Madigan was in private practice specializing in bankruptcy and commercial
litigation.
Ms. Madigan received her J.D. from the University of Colorado in Boulder, Colorado in 1983.
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The Basics of Mining Law
And M
US B’A lisglon 8
303-312-6904
mondrea@epa gov
1872 Mining Law
• Anyone may enter public domain lands to
seardi for, remove, and sell minerals bated
thereon.
What are public domain lands?
• Ha s rsuchiid i fsd.r aumsnh slncs crigind acqi tk,n
• Wirs r *id aeon athi*slon d a e
• Remain Imoca4)lsd,, iax proprl . id unr.sevsd
• nat bssn withdrawn
• Ar. cp to ,pcstion taidsrth. pi llc bond I us
I
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Some examples of lands that are not
National Parks
• YeI ,ton. NP .tthlshed
2 moeths bofore 1872 t.4biing
Law to be pres.ved ki b
nattwal con tIon. 17 St .
32 & 33 (1872).
• EochNPIswthdrai mbya
spsdlic a . Aknost
4thdmwn hvm
of Ukilig Law
• Exlstkig mining dakns in
NP e
• si sd to ths iaual
E Sft
• . - J imdr
th Pain Act aid n ud
toISO9 rsgi Ioa
public domain lands
• Navigable submerged lands
• Railroad grant lands
• State land grants
• Early homestead grants
• Desert land entries
• Indian allotments
• Acqufred lands
Reserved Public Domain
• Lands removed from the public domain and
linmedlately designated to some predetermined
purpose
• Reservations include national parks, national
indian reservations, and mflftwy
at i om
• With some exception, reserved lands are open
to the operation of the public land laws, including
the Mining Law
2
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National Forest System Lands
• Forest Monogeniert
Ad
• Weeks Act
• General Exchange Ad
• Forest Management Act of 1897—opens lands
rese,v.d as national forests to the operation of the
Mining Law, Iailess withdrawn by a secondary
w d
• fed.d government
to purchas. lands for strecri-fiow prat.ctlon aid to
maWtaln the acquWsd lands os natlonaI forests that
are open to the operation of the Mining Law
• General Exdiunge Ad of 1922—at*horlzed U.S. to
acquire title to bids within national forests that are
normally open to operation of the Mining Law
Withdrawn Lands
• Withdrawn lands are
lands removed from
the pt ,Ic domain for
the purpose of
malrtalnlng the status
• Withdrawn lands
open to operation of
Mining Law
quo
3
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Acquired Lands
• Federally owned lands that were acquired
from nonf.deral owners by purchase,
condemnctlon, gift or exchange
• Although nat part of the public domain.
certain legisktion opens some acquired lands
to the Mining Lou/s operation
The General Mining Law
1872 -1955
Two Types of Mineral Deposits
• Two types d minsid dsposlb undsr the MMsing L
• A9odeami en dssoIidrod rnadeupdaveIn
d qu tz or other roth bscalng gold. sever, lead. copper, or
other valuthie deposlb A lode’ typically a tthulor-
shoped dspos of valuthle mineral b ween defln e
boteidades, aid m lethide se *mi vm spaced dam
togalherto be mined a a unit.
• A pla r ’ Indudes forms of valuthle mineral deposits other
than lodes’ and b typically an alluvial orgiadal depost.
4
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Overview of the 1872 Mining Law
• Prospectors (U.S. citizens or those declaring an
Intention to become U.S. citizens) may enter upon
public domain lands to search for sualuable
mInemIs gokt sliver, lead, and copper.
• Upon 5 discouery” of a lode or placer deposit the
miner may locate” ft (cbtalnlng a so-coiled
unpatented mining dain .
• “DIscove,y , which Is not defined by the statute, has
been determined to mean that the deposit can be
mined at a profit
• Miners may also locate nmlil sites’ on non-
mineral lands located near mineral deposfts
to place processing facilities, tailings, rock
dumps, etc. _________
• Tunnels can be driven to discover or develop
valuable mineral deposits.
Locating a Lode Claim
• 30U5.C.523 —
• Pnor to 5IIOIIBTh per local ruleslcusteim
• Past 51 101l8Th 1500’s 600 dabns wI parallel end lines
and ‘framing” the vein or lade
• 30U5.C.128- - ________
• Boundaries to be dbtlndl , manned on the ground
• Name of the locator, date of location, and a description
of the location recorded
• Nobe doims can be co-cwned ” by tenants in co.wnon
• Location natice recuided per the custom & practice of the __________
local mining district or state low.
• Naticetothe federal government of the location NOT
5
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Leadvllie Mining Claims: 1879
Leadville Mining Claims: 1901
Locating a Placer Claim
. 30 U.S .C. § 35
• 20-aa daims
• Locaisd Nks lode
• For minsn d.po.ts not
properly locotsd a a
lode dam
• 30LLS.C.S3
• M dot
• 100-aa* mac
-------
Assessment Work
• 30 U.S.C S 28
• Rsqiir. $100 Ii thor
oth ysor p dakn
• —
bith to bc Ion by
othsn (‘,.- oc on’)
• Co-owns may’ pthIbh
oi* oco-ow,w who
faib to contribi*e
— AN.iM1 t wmbysor
m from noon
S twthsr1 to noon
ths g Ssptsnth.r
Locating a Mill Site
• 30U5.C.S42
•
• Lbsda o Isd
ning plipow,
a*o’k*sd h a d
• Saa m ivami
• L ntsdtyrth *b
—
• k .n,Mig tz ,r or
m ithan wo
• 1950 . .. ..i ó ,i.it n I
— h p aow
dth
• ISlaci. v bd.
Tunnels and Adits
•
addrtmatImnsIto Kcusror
ovWbtdh js
a peNssay ,Igl* to thu wsMs
- . - OO
tout hum thu lace ut th hav ,L
w tALC. I V
• Tiumsl I S i s ow uthssxlace d Si
d .
• T ,au st iSi s ow nut n**ig
d iu biS murs , muow
• Plot s d to bN potsotsd.
lit
-------
Maintenance Fee
.30 U.S.C.& §5 28f.-k(Wet Supp. 2005)
• $30 location fee for new daims
• $125 annual maintenance fee
• Failure to pay timely, claim is null and void
• Small miner waiver—b or fewer claims
• Smaiimlnermustdoassessmentwethandmthe
FLPMA filings
• Current authorization ends FV2008
Patenting Mining Claims
• A minerel patent b a title cenue nce fvcm the United States
to a ptlvote pasty In fee simple abialute
• A dalmant must:
• (t tIe en appilastlon sIets i Ifistig Lan
• ( 7 fl asievyofth bei
• (3)pastonappIl fanne orU dakn
• (4)55. dfldau5. of two peno,. that nottw ar post.d
• 5) f5. a wpy of nottc. In o .,. .lut BLM of fl
• (6) ps hc i 0 rr . iwtlo, In ,aibj utiwipaper (or OOdaiju
• (7)1 no oduen. dabiu uhb pap pwdies. marl.
• Loda placer and mill site subjed to mineral patent. Tunnel
site are nat.
The General Mining Law Post 1955:
Regulating Free Access
• Surface Resources and Multiple Use Act of
1955
• Federal environmental statutes
• Federal Land Policy and Management Act of
1976 and BLMs 43 C.F.R. Part 3809
Regulations
• OrganIc Administration Act of 1987 and
USDA/Forest Services’ 36 CFR Part 228
Regulations
State mine reclamation and other laws
8
-------
Surface Resources and Multiple Use
Act of 1955
• Addresses abuses of 1872 MIning Law
• Many mining daims not located In good faith
for mineral exploration/development but for
non-mining private uses such as residences.
fishing and hunting camps, taverns. etc.
• Gives federal land managers authority to
regulate surface use of mining claim to curb
abuses
Federal Environmental Statues
• Surface Mining Control and Reclamation Act of 1977
- only applies to surface coal mining
• NEPA — not applicable to patented mining daims
• Oean Water Act ________
• CleanAirAct
• Endangered Spedes Act ________
• R RA
• ER LA _____________
Federal Land Policy and ________
Management Act of 1976
• Prior to FLPMA. recordation of mining claims
and the notices of assessment work to __________
maintain legal possession per state law (no
information directly to BLM).
• Purpose: BLM to be get notice of location
and number of unpatented mining daims,
mill sites, and tunnel sites; annual filing
requirement presumption of abandonment if
Initial/annual filings not made.
9
-------
• ?wentlon of unnecesaly or undue degradation of public
i onth.
• CnsuoI use’ w Is ‘no or negligible’ sutfoce dktuibance
• ,let at me , ruqmmd
•
• lhian I ,wwice inS ,equbd
• NotIce-lever operations - distusbance of S orfeser
• umetics at evetIam rsqi ,ed but BLM does not
• nd... sIk..reqithsd
• lb,w Icsowcsire net rqubsd
• Plan-Ieuel ’cperatbn - disturbance of 5+ acre or b
special status wece (udiderness areosinatlonol
monunientO
‘p n at o, ut ’ n mdttsd foe BU& appneuó
a isdesininSi rsqubsd
• fesnedo nee c s —
Organic Administration
• Authorizes the Secretary of Agilculture to
promulgate regulations for the
administration of national forests
• Forest Service promulgated surface
management regulations in 1974 now codified
at 36 C.F.R. Part m Operations must
mInimize adverse environmental Impacts on
surface resources whenever feasible.
State Mine Reclamation and Other
Laws
Most western states have a vanety of laws
requiring reclamation, protection of ground
water resources, and other laws of general
applicability to hard rock mining that are not
pre-enipted by the Mining Law.
10
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Mixed Ownership Sites
• Located partially on public and partially on
private land
• Patented dalms
• Unpatented abandoned daims
• CERCLA UabIllty
11
-------
OSZ%
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20480
JUN 4
o toEoF
EWOR E NV N
co
MEMORANDUM
SUBJECT: Policy on Listing Mixed Ownership Mine or Mill Sites Created as a Result of the
General Mining Law of 1872 on the Federal Agenc ardous Waste
Compliance Docket
FROM: David J. Kling, Director
Federal Facilities Enforcernen cc (FFEO)
TO: Regional Docket Coordinators
This policy addresses the issue of when so-called “nuxed ownership” mine or mill sites,
created as a result of the General Mining Law of 1872 (GML), 30 U.S.C. § 22 ggq , should be
included on the published list of federal facilities which have been reported to the
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) Section
120(c) Federal Agency Hazardous Waste Compliance Docket (Docket).’ For the reasons stated
‘Section 120(c) of CERCLA states that:
The Administrator shall establish a special Federal Agency Hazardous Waste Compliance Docket
(hereinafter in this section referred to as the “docket”) which shall contain cash of the following:
(I) All information submitted under section 3016 of the Solid Waste Disposal Act (42 U.S.C.A.
§ 69371 and subsection (b) of this section regarding any Federal facility and rouce of each
subsequent action taken under this chapter with respect to the facility.
(2) Information submitted by each department, agency, or instnuinentalityof the United States
under section 3005 or 3010 of such Act 142 U.S.C.A. * 6925 or 6930).
(3) Information submitted by the department. agency, or instrumentality under section 103 of
CERCLA (42 U.S.C.A. § 9603).
The docket shall be available for public mspection at reasonable times. Six months after
establishment of the docket and every 6 months thereafter, the Adnumstrator shall oublislunthe
Federal Register a list of the Federal facilities which have been included in the docket during the
immediately preceding 6-month period. Such publication shall also indicate where in the
appmpriatc regional office of the Environmental Protection Agency additional information may be
obtained with respect toasty facility on the docket. The Administrator shall establish a program to
provide infonnation to the public with respect to facilities which are included in the docket under
this subsection. (emphasis added)
Internal rsea (URL) •
R.cdsdtRscycisM. .P iIiited ash Vagitfte 01 Baisd a Rsqtdsd P i., thtmlun rs% Pcstoswmw)
-------
below, we believe that, as a matter of policy, mixed ownership mine or mill sites created as a
result of the GML generally should not be included on the published list of federal facilities
which have been reported to the Docket This policy recognizes that individual mine or mill sites
should be evaluated on a case-by-case basis, and does not in any way address the status of the
federal government as a potentially responsible party (PRP). The policy does not address issues
regarding “ownership” under CERCLA, nor does it address any federal cleanup obligations. This
policy simply speaks to Congress’ intent regarding the types of facilities that should be included
on the published list of federal facilities which have been reported to the Docket.
Background
Mixed ownership mine or mill sites are those located partially on private land
partially on public land. Unlike Department of Defense or Department of Energy federal
facilities, which are or were operated by the Umted States or its contractor and are entirely in
Federal ownership, many mine and mill sites consist of both federal and private land ownership.
Generally, under the GML a person may establish private rights to mine certain minerals
on federally-owned land by staking a claim to the land. Once a claim is established and if it is
maintained, the claimant gains rights to the beneficial use of the property incident to mining, but
the fee simple title remains with the federal government. Prior to enactment of the Federal Land
Policy and Management Act of 1976 (FLPMA), the claimant had a right to extract the minerals
and control the surface. Since the enactment of FLPMA, the claimant has the right to extract the
minerals and may use the surface to the extent necessaty to develop the claim, subject to surface
management regulations of the land managing agency. The claim i private property, is taxable,
and can be sold, leased, bequeathed, etc. If the claim is abandoned or otherwise becomes invalid.
all of the property rights revert to the federal government and the land is under the control of the
Federal Land Managing Agencies (FLMA), usually the Forest Service (FS) within the Umted
States Department of Agriculture or the Bureau of Land Management (BLM) within the United
States Department of the Interior.
A claimant may, through a process called “patenting,” buy the fee simple interest from
the federal government and own the property in its entirety, If the owner of patented property
abandons it, the property does revert to the United States but remains private land. The
effect of the GML is that thousands of former mine or mill sites are now private properties
(inholdings) within the boundaries of federal land managed as National Forests, National Parks,
and BLM-managed lands.
Many FLMAs do not have a comprehensive inventory of all mine sites, and neither do the
states or EPA. However, there are estimated to be tens of thousands of mines on federal lands,
and approximately an equal number on private lands, including many with releases of hazardous
substances. A mixed ownership mine “site,” often a mining district, may have involved
hundreds of private entities as owners or operators. A large-scale map of a National Forest or
ELM-managed lands may indicate the overall boundary and imply that all of the land inside is
federally-owned. A more detailed map will indicate that there are many private inholdings,
2
-------
frequently including mine or mill sites, 2 which, as explained above, the FLMA has little or no
control over but which may impact the interspersed federally-owned land.
A review of CERCLA Section 120(c) and its legislative history reveals that Congress did
not directly address whether mixed ownership mining sites should be identified as federal
facilities in the Docket. Therefore, we believe that the decision whether to include such sites on
the published list of federal facilities which have been reported to the Docket should be guided
by sound policy reasons.’
Policy
Itis our policy that mixed ownership mine or mill sites generally should not be included
on the oublished list of federal facilities which have been reuorted to the Docket . This policy
recognizes that individual mine or mill sites should be evaluated on a casc-by.case basis, and
does not in any way address the stams of the federal government as a PRP. The policy does not
address issues regarding “ownership” under CERCI.A, nor does it address any federal cleanup
obligations. This policy simply speaks to Congress’ intent regarding the types of facilities that
should be included on the published list of federal facilities which have been reported to the
Docket. Because these sites are typically encumbered by substantial private rights derived from
the GML and the contamination at these sites is typically the result of private activities, we
believe that treating these sites as private facilities will foster the most effective use of CERCLA
response authorities.
At “mixed ownership” mine or mill sites, the efficient use of limited EPA and FLMA
resources is greatly facilitated through a cooperative approach. As pail of this cooperative effort,
EPA and the FLMA need to evaluate issues such as whether EPA or the R.MA is pursuing PRPs
at the site, and how the EPA and/or the FLMA is otherwise addressing the contamination at the
site. EPA regions, in cooperation with the FLMA and the states in which the sites are located,
may also find it helpful to develop a prescreening process which could reveal potentially
significant problems at a site and feed into the cooperative effort to address these sites. At some
“mixed ownership” mining sites. EPA will be the lead agency and will generally need to work
with the FLMA to effectively address any release of hazardous substances on the federally owned
areas of the site, while at other “mixed ownership” mining sites the FLMA may be the lead
agency and will generally need EPA authority to effectively address the risks posed by the non-
federal areas of the site. Several EPA regions have entered into site specific memoranda of
agreement to define the respective roles of the agencies. Additional guidance or interagency
2 Federal land laws other than the GML (such as the raiiioad and homestead acts) have also created private
property rights within these Federal lands. In addition, federal law has created state unsi lands interspersed wither
federal land units
Nothing in this Policy is intended to alter or modify a federal agency’s obligation under CERCLA Section
120 to determine whether information must be reported to the Docket based on the criteria set forth in Section
l20(cXt)-(3). Also the fact that information is reported to the Docket does not necessarily uran that the site will be
included on the published list of facilities which have been reported to the Docket.
3
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agreements may also need to be developed to support coordinated enforcement and response
actions at mixed ownership mining sites. Mixed ownership sites with potential or confirmed
hazardous releases that are not included on the published list of federal facilities which have been
reported to the Docket should, however, be considered for inclusion in EPA’s CERCUS
database.
Other Mine Sites
Unpatented abandoned mine or mill sites which were created under a GML gjrn,
entirely on federal lands, and that have reverted to federal control, should be discussed with the
FLMA having ‘ juristhction, custody, or control” of the site and EPA HQ (FFEO and the Office
of Site Remediation Enforcement (OSRE)) befoie including the site on the published list of
federal facilities reported to the Docket. Additionally, mines, mill, or mine waste disposal areas
on FLMA lands that were created under a federal perijut or lease should be discussed with the
FLMA having ‘ jurisdiction, custody, or control” of the site and EPA HQ before including that
site on the published list of federal facilities which have been reported to the Docket.
The discussion in this document is intended solely as guidance to EPA personnel. This
document is not a regulation, nor does not it change or substitute for any regulation. Thus, it
does not impose legally binding requirements on EPA, States, or the regulated community. This
guidance does not confer legal rights or impose legal obligations upon any member of the public.
In the event of a conflict between the discussion in this document and any statute or regulation,
this document would not be controlling. The general description provided here may not apply to
a particular situation based upon the circumstances. Interested parties sin free to raise questions
and objections about the substance of this guidance and the appropriateness of the application of
this guidance to a particular situation. EPA and other decisionniakers retain the discretion to
adopt approaches on a case-by-case basis that differ from those described in this guidance where
appropriate and to amend this guidance without public notice.
Thank you for your time and attention to this Policy on listing ‘mixed ownership” mine
or mill sites on the published list of federal facilities which have been reported to the Docket.
For further discussion on mining and private pasty enforcement issues contact Joe Tieger of
OSRE (202-564-4276), on CERCLA Section 120 issues, Andrew Cherry of FFEO (202-564-
2589), and on Docket issues, Augusta Wills of FFEO (202-564-2468).
References:
General Mining Law of 1872,30 U.S.C. if 21-54.
Comprehensive Environmental Response Compensation and Compensation Act, as amended,
42 U.S.C.A. §9601 et seq.
Executive Order No. 12580, January 23, 1987.
cc: HQ and Reg onal Site Assessment Staff
Regional Mining Coordinators
Regional Federal Facility Program Managers
4
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NOTES
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Mult i i i c x
Quick Rp/e ,c r Ikkkc S;’s?epi
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PRP Search Issues
at Area-wide
Ground Water Sites
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LANCE VLCEK
Mr. Vicek is a senior investigator in Region 5’s Enforcement Investigations and Search Section,
Superfund Division. Mr. Vicek has ten years with the EPA. Prior to joining EPA, Mr. Vicek
worked as a Contract Auditor and Criminal and Civil Investigator. He has worked for the US
Department of Energy, Defense Contract Audit Agency, Immigration and Naturalization Service,
and the US Consumer Product Safety Commission. Mr. Vicek also has some 30 years with the
U.S. Army (Active and Reserve Duty) as a Criminal Investigator and Intelligence Officer. He has
worked on numerous groundwater sites in Region V.
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STEVEN ARBAUGH
Mr Steven Arbaugh is currently employed at the EPA Region 9 office in San Francisco, CA, as a
civil investigator in the Superfi.ind Division Mr Arbaugh has performed civil investigator duties
with the remedial case development team since April, 2001. Starting in July, 1998, Mr. Arbaugh
was employed as an enforcement officer with the EPA Region 9 Pesticide Program. Prior to
working for the EPA at the Region 9 office, Mr. Arbaugh was employed by the Utah Department
of Environmental Quality, Air Division He was employed as an air quality planner and air quality
enforcement specialist for 9 years
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NOTES
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Mu ltjJ jex
Owck HWcrcpce lUaU, Syalem
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PRP Search Issues at a
Surplus Government Property!
Formerly Used Defense Site
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GRECHI N F. SCHMIDT
Grechen Schmidt is an investigator with Region 10. Grechen started with EPA in 1988 as
Community Involvement Coordinator. She worked on the Bunker Hill Superfiind site helping the
community understand the various aspects of the complex investigation underway. Grechen has
served as a liaison between the affected community and the regulatory agencies during the
investigation and cleanup of the Exxon Valdez oil spill, Commencement Bay Superfiind site and
the 22 federal facilities Superflind sites within the region. She helped develop national community
involvement guidance for Federal Facilities and has conducted training for EPA and the
Department of Defense on effective community involvement.
Grechen designed and coordinated the implementation procedures for the Superfiind Technical
Assistance Grant program (TAG) in Region 10. She served as EPA’s technical expert on the
Superfiind and TAG programs in a criminal trial, resulting in a fraud conviction, with the
defendant serving a maximum jail sentence.
From 1995 to 1997, Grechen worked as a Compliance Officer in the Drinking Water program
focusing on water systems in Washington state. In addition, she served as the regional contact
with OECA and brought a 20-year old enforcement case close to resolution by combining
resources of two neighboring (and failing) water systems.
Grechen took an IPA to Anchorage to work with the Alaska Department of Environmental
Conservation’s (ADEC) Contaminated Sites program as a community involvement coordinator
from 1997 to 1999. ADEC was in the process of re-writing their regulations to include
community involvement. Grechen developed guidance and trained ADEC staff to effectively work
with the community.
Upon returning to EPA Region 10, after a short stay the in community involvement unit, she
became an investigator in Office of Environmental Assessment in 2000. Grechen is the only
investigator for Region providing investigative support the Superflind program along with all
other EPA programs and sister agencies, including ATSDR, state Department of Labor and
Industries, State Patrol, etc.
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FORMER GOVERNMENT
FACILITIES
NORTH RIDGE ESTATES
Case Study
Purpose
• Case Study
— Small problem turns big—
- Informants
• The Monster in the Closet
— Sites waiting to be discovered
Kiamath Falls Manne
Recuperational Barracks
I
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North Ridge Estates
SITE BACKGROUND ________
• 1966: Engelberg group purchases
property
— Some buildings removed
-GSA aware
• 1977: MBK Partnership purchases __________
property
— Many more buildings removed improperly
North Ridge Estates
SITE BACKGROUND
• 1944: Marine Recuperational Barracks
began operation
• 1947: Property granted to State of Oregon
for Oregon Technical Institute (OTI)
• 1964: OTI closed, property reverted back
to GSA
2
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• 1993-2001
North Ridge Estates
SITE BACKGROUND
— MBK develops property
— Constructs 22 homes
2001: DEQ cites MBK for Asbestos
problems
North Ridge Estates
SITE BACKGROUND
• 1979: EPA order to MBK
— Cease and Desist Order
— Required cleanup and Institutional Controls
• 1980’s
— Further demolition
— Plans for housing development
• 1993:
— MBK builds first house
— Corps inspects site and does not ID ACM
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North Ridge Estates
SITE BACKGROUND
• 2002: DEQ agreement with MBK for removal
• 2003
- Homeowners sue MBK, MBK sues State and Federal
Government
— EPA AOC with MBK for removal, risk assessment
• 7.5 tonsACMremoved by hand
• 81.5 tons ACM removed by mWi x & excavator
• 2004
- AOC/SOW for RI/FS being developed
- MBK dedares bankruptcy
— EPA & State counter sue
North Ridge Estates
SITE BACKGROUND
2004:
- AOC/SOW for RI/FS being developed
- MBK dedares Chapter 11 bankruptcy
• 2005
- Homeowners relocated during summer removal
• 2006
— January 20, MBK. their Insurers settle for $12M
• Komeowi ers can permanently move
• EPA can complete kivestigatlon
• But no moneytor cleanup!
PRP Search Issues
• The lawsuits
— Dozens of Depositions
— 16,000 Documents during initial discovery
— Medical records/privacy issues
— Financial issues for all parties
• Historical sources of information
— National Archives
— General Service Administration
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Informants
A Potential Monster
How many former government
sites do you have in your region
that haven’t been maintained?
Gov’t Property Transfers
(aka Public Benefit Conveyances)
• WWII-era facilities have been:
— Sold to private parties at goVt auction
— Transferred to public use as hospitals,
schools, prisons, and airports.
• If property transferred for public use, gov’t
retains responsibility to ensure property
maintained for 30 years after transfer.
• We found some and some found us!
— Depositions gave us leads
— Newspaper coverage
— Residents gathering information
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Gov’t Property Transfers con’t.
• GSA, Dept of Education and Dept of
Health and Human Services are three
agencies responsible for monitoring
condition of “public benefir properties.
• If property is not used for public benefit
before 30 years is up, goes back to gov’t.
The continuing saga
• Former military facilities are still being
used; upgraded and maintained
• Others aren’t or problems are just being
identified
• These may be the Superfund sites of the
futures
THE HIDDEN PROBLEMS
• These facilities were built using
— Lead based paint
— Electrical equipment containing PCBs
— Asbestos containing materials
• Floor tile
• Siding
• Pipe lag (Insulation)
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• Questions????
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NOTES
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nfl
Mult i i i cx
QwckfieIe,epce Index System
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PRP Search Benchmarking
& Best Practices
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BRUCE PUMPHIUX
Bruce Pumphrey has been with EPA for over 25 years, both at Headquarters and in Region 5. He
started out with the Headquarters Water Quality Standards Program in 1981 and then transferred to
Region S’s Water Division in 1984, working in Water Quality Standards, Wasteload Allocation and
NPDES Compliance and Enforcement. In 1987 Bruce joined Region S’s Superfiind program and
conducted PRP searches, information management and strategic planning.
In 1991, Bruce returned to Headquarters to work in OSWER’s Office of Waste Programs
Enforcement which subsequently became the Office of Site Remediation Enforcement in OECA. With
the exception of a stint in the Office of Wastewater Management to work on the CAFO Rule and
another in OSWER to enhance their Program Evaluation capabilities, Bruce has worked for the last 19
years in the Super.ftind Enforcement Program. In his spare time he likes to hike, bike, sail, and
whitewater kayak.
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NOTES
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MultjDex TM
QuickAefemnce Ind e x Syste m
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Current Developments
in Liability Law
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CLARENCE E. FEATHERSON
Mr. Featherson is a senior attorney in EPA’s Office of Site Remediation Enforcement (OSRE).
Clarence works closely with EPA’s Regional Offices, EPA’s Office of General Counsel and the
Department of Justice in the enforcement of cases involving CERCLA corporate liability issues,
CERCLA pre-enforcement issues, and other legal issues affecting EPA’s Superfiind enforcement
program. In his non-EPA life Clarence is a motivational/inspirational speaker and trainer. He received
his A.B. Degree from Brown University and a J.D. Degree with honors from Howard University’s
School of Law.
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MIKE NORTIERIDGE
Mike is a senior enforcement attorney in EPA Headquarters’ Office of Site Remediation
Enforcement. He joined EPA in 1984 (in HQ’s RCRA program office) and transferred to waste
enforcement in 1988. He leads the Agency’s enforcement screening process for the national
prioritization panel, seeking to ensure that Regions have exhausted alternatives prior to turning to
Superfund monies as a last resort. He also works on other Enforcement First issues, including
HQ’s recent policies on Enforcement First for Institutional Controls (issued 3/06) and
Enforcement First for RIJFS (issued 8/05), respectively. In addition, he is one of HQ’s main
contacts on issues relating to CERCLA 106 UAOs. This morning he’s promised to give “a guide
for non-lawyers” to the ongoing litigation over General Electric Company’s challenge to the
constitutionality of EPA’s pattern and practice in issuing such UAOs.
Mike received his law degree from Georgetown University in 1984.
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#
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
L PRO1 Frequently Asked Questions (FAQs) About Aviall
Q. What is “AviaIP?
A. Aviall Industries, Inc. is a party in a case that reached the U.S. Supreme Court. The case
concerned Aviall’s ability to get a share of its costs — known as “contribution”— for hazardous
site cleanup from another company. The official name and citation of the case is Cooper
Industries, Inc. v. A vial! Services, Inc., 125 S.Ct. 577 (2004); the case is often referred to as
“Aviall.” The U.S. Supreme Court issued its decision on December 13, 2004.
Q. What are the facts and procedural history of the case?
A. Cooper Industries, Inc. owned and operated four aircraft engine maintenance sites in Texas for a
number of years before it sold the sites to Aviall. Aviall continued to operate at the sites and
ultimately, discovered that both it and Cooper had contaminated the facilities. After undertaking
a cleanup, Aviall sued Cooper for contribution toward the cleanup costs.
On summary judgment, the U.S. District Court for the Northern District of Texas held that Aviall
could not obtain contribution from Cooper under § I 13(f)(1) of CERCLA because Aviall had not
been sued under CERCLA § 106 or § 107. A divided panel of the Court of Appeals for the Fifth
Circuit affirmed, but on rehearing en banc, the entire Fifth Circuit, by a divided vote, reversed
the panel. The case then reached the U.S. Supreme Court.
Q. What did the U.S. Supreme Court hold in Aviall?
A. The issue before the Supreme Court in A vial! was whether “a private party who has not been
sued under § 106 or § 107 of CERCLA may nevertheless obtain contribution under § 113(0(1)
[ of CERCLA] from other liable parties.” CERCLA § 113(0(1) provides, in part: “Any person
may seek contribution from any other person who is liable or potentially liable under section
9607(a) of this title, during or following any civil action under section 9606 of this title or under
section 9607(a) of this title.”
The Supreme Court held that the plain language of CERCLA § 113(0(1) allows a “potentially
responsible party” (PRP) to seek contribution only “during or following” a “civil action” under
CERCLA § 106 or § 107(a). In other words, because Aviall had not previously been sued for
clean up of the site or for cost recovery under CERCLA, Aviall cannot sue for contribution under
§ 113(0(1).
The Supreme Court declined to decide whether a PRP may recover costs under CERCLA §
I 07(a)(4)(B), which provides for recovery “of any other necessary costs of response incurred by
any other person consistent with the national contingency plan.” The Court remanded the case to
the U.S. Court of Appeals for the Fifth Circuit.
Q. Did the Aviall decision address contribution rights under § 113(I)(3)(B)?
A. No. While the Court noted that CERCLA § 113(t) provides another avenue for contribution
under § 11 3(f)(3)(b), the Court did not address that subsection because it was not at issue in the
case. That section provides that a PRP “who has resolved its liability to the United States or a
-------
State for some or all of a response action or for some or all of the costs of such action in an
administrative or judicially approved settlement” may seek contribution from non-settling PRPs.
The United States acknowledged at oral argument before the Supreme Court that if a party enters
into an administrative order on consent or a judicial settlement that resolves liability for response
costs r response actions, that would entitle the party to seek contribution. Thus, for example, a
remedial design/remedial action consent decree with the United States, or an administrative
order on consent with EPA for remedial investigation/feasibility study, removal action, or
reimbursement of response costs should give rise to a right of contribution pursuant to §
1 13(f)(3)(B).
Q. Is EPA named as a party in the Aviall litigation?
A. No, EPA is not named as a party in the Aviall litigation. However, on February 23, 2004, the
United States filed an amicus brief on the merits of this case.
Q. What positions did the United States take in its amicus brief on Aviall?
A. Among other things, the United States took the position that, based on the plain language of
CERCLA § 1 13(f)(1), a party that is itself liable or potentially liable may seek contribution
under that section only during or following a civil action under § 106 or § 107, and conversely,
that § 113(0(1) does not authorize a contribution action in the absence of an ongoing or
completed § 106 or § 107(a) civil action. The United States also stated that a liable party is
limited to seeking contribution in the manner authorized by § 113(1), and that CERCLA § 107(a)
does not provide an independent basis for a liable person to recover response costs from another
liable person. The United States also stated that a “civil action” is “commonly understood to
mean a judicial proceeding,” and that “EPA’s issuance of a § 106(a) administrative order does
not generally entitle the recipient to seek contribution under § 113(0(1).”
Q. What impact will A vial! have on EPA’s enforcement and brownflelds programs?
A. Currently, EPA is evaluating the potential impacts of the Aviall decision on enforcement and
brownfields programs and considering whether any actions are necessary. EPA also anticipates
working in close coordination with state governments and organizations and the U.S. Department
of Justice on Aviall-related issues.
Q. Did the Aviall decision address whether a party that voluntarily incurs cleanup costs may
recover those costs under state law?
A. No. The opinion addressed recovery under federal law, specifically, CERCLA § 11 3(f)( 1).
Q. Did the Aviall decision address the right of non-liable parties to sue for costs?
A. No. The Supreme Court’s opinion does not address the right of non-liable parties to sue for costs
under § 107(a). Persons who cleanup Brownfields sites may qualify as non-liable parties
through the bona fide prospective purchaser exemption under CERCLA § 107(r).
Q. Does EPA have a position on possible legislative changes in light of the Aviall decision?
A. EPA does not have a position on this issue.
Q. How can I find out more about EPA’s Aviall-related work?
A. EPA has information about Aviall-related work on its Web site (www.epa.gov). You may also
contact the Office of Site Remediation Enforcement at (202) 564-4200.
Issued May 2005
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NOTES
I.
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i lA i
Mull iDex
Quick Releicace ThRe e Rye/eye
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Successor Liability
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CHIERYLE MICINSKI
Cheryle Micinski is a lawyer in the Office of Regional Counsel, Region 7 She has been practicing
law for nearly 30 years. The first ten years were spent as a prosecutor with county and city. She
began employment with the Environmental Protection Agency in 1981. She became a Branch
Chief, Superfiind Branch in 1987 and then a Deputy Regional Counsel in 1993. Cheryle teaches
many Superftind related courses for EPA and has been a frequent speaker at seminars and
programs relating to hazardous waste topics. She is an adjunct professor at Avila University in
Kansas City, Missouri. Cheryle received her J.D. from the University of Missouri-Kansas City in
1973. She received her A.B. from Indiana University in 1968.
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SUCCESSOR UABILJTY
UNDER CERCLA
Cheryle Micinski
Deputy Regional Counsel
Region 7
General Rule
Asset purchasers do not acquire the
liabilities of the seller corporation.
When can successors be held liable
under CERCLA?
“Congress is unlikely to leave a loophole
that would allow corporations to die a
paper death, only to rise Phoenix-like from
the ashes, transformed but free former
liabilities.” U.S. v. Mexico Feed and Seed .
980 FZd at 487
I
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Exceptions to the General Rule
• Effort to fraudulently escape liability
• De facto merger or consolidation
• Express or implied assumption of liability
• Purchaser is a mere continuation of the
seller
The “CERCLA” Exemption
• Substantial continuity or continuity of
enterprise
-Equitable test
- Purpose is to identify transactions where the ________
characteristics of the selling corporation
survive the asset sale and purchaser is
charged with seller’s liabilities.
Fraud
• Transfer of assets and businesses of
predecessor to successor is fraudulent as ___________
to creditors
• Conveyance is made with intent to ___________
defraud or with intent to hinder or delay
oeditors ________
2
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Fraud-What to look for
• Badges or lndioa of fraud.
• Look behind claim of “fair value , i.e.,
Inadequate or fictitious consideration.
• Check the solvency and debt of the transferring
corporation.
• Was there litigation or the threat of litigation at
the time of transfer?
• Was there an attempt to conceal the transfer?
• Was this transaction conducted In a manner
different from the common business practice
De Facto Merger or Consofldation
• Statutory merger where acquiring
company survives: mandatory that
successor assumes debts of predecessor.
• Seller liquidates and dissolves
• Look beyond the stated form of the
transaction to determine if there is a de
facto merger.
What to look for:
• Continuation of enterpnse of the seller:
continuity of management, physical location,
assets, general business operations.
• Continuity of ownership of purchaser and seller:
same shareholders.
• Seller ceases operation, liquidates, dissolves.
• Purchaser assumes obligations necessary for
uninterrupted business operations.
3
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Express or Implied Assumption
• Courts use general principles of contract
law.
• Documents that may hold the key:
— Assumption agreement, indemnity provisions,
covenants.
— Plan of Reorganization
— Purchase agreement
— Tax and SEC filings
Further examination for Implied
Assumption
• Who drafted the documents?
• Who was in control during the
transaction?
• How was the transaction characterized
subsequently?
• Would an implied assumption benefit the
purpose of CERCLA, the public?
Mere Continuation
• Asset purchaser Is a mere reorganized version of
the predecessor, rather than a distinct corporate
entity; resembles de facto merger; one
corporation emerges.
• What emerged is what went ln , i.e., a gas
company selling gas to the same metro area.
• Focus on continuation of the corporate entity.
4
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What to look for:
• Key factors: Common ownership of purchaser
and seller and common identity of officers and
directors
• Other factors:
- Inadequate consideration for assets
— Similar control of hiring and function of officers,
directors and stock
• Common sense test: no one factor is dispositive
Substantial Continuity
• Also referred to as continuity of enterpnse
• Most expansive and controversial theory
• Focus on business (as opposed to
corporation) __________
• Not all drcuits accept this theory
• Issue regarding application of federal __________
common law v. state law of successor
liability ___________
What to look for:
• Continuity of directors, officers, management.
employees, • physical locatIon.
• Continuity of assets and general business operations,
same products
• Retention of name, business address, phone number and
customers
• Adequacy of compensation; arms length transaction;
attempt to shift liability to corporate shell ____________
• Charactenzation of the transaction to the public, In the
trade press
• Knowledge of environmental existing luabilites _____________
5
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Present Status of Substantial
Continuity Theory
• In the courts
- Impact of Besifoods
— Acceptance of federal common law or a
uniform federal rule
• Within the government
—The Exid case
— Acceptance of federal common law or a
uniform federal rule
6
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Partial chronology relating to GE’s litigation challenging
constitutionality of EPA’s CERCLA 106 UAO authority
11/20/00 - GE files its complaint (and amends it on 3/14/0 1).
(1/12/01 — GE submits FOIA request. 10/15/01: GE files FOIA complaint in district
court. 6/7/02: GE and EPA file FOJA settlement with district court.)
3/27/01 — EPA moves to dismiss for lack of subject matter jurisdiction (or, in alternative,
motion for summary judgment).
6/29/0 1 — GE brief opposing EPA’s motion.
2/19/02 - oral argument in district court on MTD.
3/31/03 — district court grants EPA’s motion to dismiss 257 F.Supp. 2d 8.
8/15/03 - GE’s appellate brief.
9/22/03 - EPA’s appellate reply brief.
11/20/03 - oral argument in D.C. Circuit.
3/2/04 — D.C. Circuit reverses and remands. 360 F3d 188.
5/6/04 — EPA brief (supporting motion for summary judgment).
12/17/04 — GE’s brief (opposing MSJ) (including statement of material facts as to which
there purportedly is a genuine issue).
1/10/05 — EPA’s reply brief.
1/31/05 — oral argument in district court on MSJ.
3/30/05 — district court partially grants EPA’s MSJ. 362 F. Supp. 2d. 327.
4/13/05 — EPA files answer to GE’s amended complaint.
5/18/05 — court issues scheduling order (and subsequently revises it several times).
6/17/05 — discovery begins.
3/30/06 — GE files motion to compel production or in camera review of withheld
documents.
4/20/06 — EPA’s brief (opposing GE’s motion to compel).
6/2/06 — district court hearing on GE’s MTC.
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NOTES
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Mu /tjJ jex
Ou ’ckflefepence Index Syxpeni
J74
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Current Developments
in Bankruptcy Law
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ANDREA MADIGAN
Ms. Madigan is a senior enforcement attorney in EPA ’s Region 8’s Legal Enforcement Program, Office
of Enforcement, Compliance, and Environmental Justice. Ms. Madigan joined EPA in 1990 in the
Atlanta regional office and transferred to the Denver office in 1998. She works primarily on large
Superfiind enforcement cases and chairs EPA’s National Bankruptcy Work Group. Ms Madigan
frequently serves an instructor on a variety of environmental topics, including Superfund enforcement,
bankruptcy, and environmental management systems. Prior to joining EPA, Ms. Madigan was in
private practice specializing in bankruptcy and commercial litigation.
Ms. Madigan received her J.D. from the University of Colorado in Boulder, Colorado in 1983.
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Bai rL tcy v. Environmental Law:
The Oath of the Titcins
- Oswe Corn
- Sok*âom we g n
- Hold we iwd. mpo.v fw p t
B *n Lea
- F Stait for the Honeg De or
- Maintenance c ’ Status Quo
- Ord ly Urpildatlon or Dlstrb on Ctedltors
- Fair & Egiitable Tr ne1 Simlarty Sltuate Creditors
- £
Current Clashes
• EPA’s ai*horlty to
Issue dsonup orders v.
heme - wh
creditors paid i
order
• Debtor’s oblI ctIon to
maioge property ki
accordance vith
nvironmental laws v.
fr.th tart
I
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Major Causes of Bankruptcy
• individuals: • Businesses:
-JobLe s s
- Medical Problems
- Divorce
-BadEcononw
— Bad Business
Dedsio,n
— Business Planning
Types of Bankruptcy Cases
• Chapter 7 • Chapter ii
- L1qu n - Reargan n
• Chapter 9 . Chapter 12
- MunIdpaIitIe - 1 Fanner
• Chapter 13
- Wage Earner
2
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The Bankruptcy Estate - §541
• Created upon filIng of bankruptcy case
• Includes all legal or equitable Interests of
the debtor In property as of the
commencement of the case
• Exemptions for IndivIduals
The AutomatIc Stay - §362( 0)
• Prohlblts
— Commencement or continuation of action that or
could have been brought pre-petitlort
- Enfornentofpre-pditknjudgment
- any act to obtain possenlon or exercise control ,er
piepeity of eitetei
- Any ad to aeate. pesfect. or enforce lien agal nit
piepetty of ettatet
- Any act to aeate. enforce, or peifed lien securing pre-
petition debt:
— Any ad to celled. aoms. or ie pie-petition
d&m
- Set-off of pre-petft lon debt.
Automatic Stay - Exceptions of Interest
§362 (b)
• Criminal actions
• Government exercise of police & regulatory
authority
3
-------
PrioritIes §507
• Not all daims are equal
• Priority daims must be paid In full before any
claims of a lower priority are paid
• Claims of equal priority are paid pro rota
Examples of Priority Claims
• Administrative Expenses
— Professional fees neasssa,y to administration of
the bankruptcy case
- Response costs incurred post-petition to
cleanup debtor owned propetty
- Panafties for post-petitions violations
• Wages
• Certain Tax Claims
Bankruptcy Pilority Scheme _________
• Secured daims
• Administrative Expenses
• Other priority claims
• General unsecured daims
• SuboTdinated daims __________
• interest on general unsecured daims
• Debtor or equity interests __________
4
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Secured Status §506
• A claim is secured only to the extent that
there is sufficient value In the collateral
securing such claim
Anatomy of a bankruptcy case
• Debtor files a petitIon In bankruptcy court
• Federal court action
• Filing creates the estate that Indudes all
property of the debtor
• Estate is managed by a fidudary who
owes duty to all creditors
• Automatic stay arises
Initial Filing
• Upon commencement of case debtor flies
— List of a itan
- Schedules of Asseb & UablI tIes
- Stotemert c i Finandol Maui (SOFA)
• Notice of Commencement of Case given to
parties In interest
• Fint Meeting of Creditors is held. (nusc. 131e
5
-------
Chapter 7 LiquidatIon
• Debtor liquidates & goes out of business
• Trustee Is appointed (n U.S.C. SS7oI.7oz 703)
• All marketable assets of debtor are sold
• Proceeds are paid to creditors In
accordance with priority scheme set forth
in the Bankruptcy Code c i i u.s.c. Sue)
• No asset cases are common
• Individuals get discharged ( I I U.S.C. 5524)
Chapter 11
The Reorganization Chapter
• Debtor continues to operate its business as
a “DIP” or debtor In possession (11 u.s.c Snofl
• Trustee is appointed only for cause cii usc
51104)
• Debtor or creditors offer a solution to
debtor’s insolvency thorough a plan to
reorganization
Confirmation Requirements §1129
• Plan must be proposed In good faith
• Each creditor under plan must receive at
least as much as it would under Chapter 7
(best Interests test)
• All administrative daims paid
• Not likely to be followed by further
reorganization (feasibIlity test)
6
-------
What Is a Claim? §101(12)
• Right to Pçyment or Equitable Remedy
— need uiot be reduced tojudgmeit
- liquidated or unliquldated
— fixed or centlngmt
- mature or unnioture
— dbputed or undbputed
— legal orequftable
- seared or unsecured
What this means for Superfund claims
• When does the daim arise?
• What Is Included in the claim
- Past costs
— Estimated future cost
• What gets discharged?
• What happens when the debtor owns
contaminated property?
Injunctive Relief
• 28 U.S.C. §959(b) — debtor must comply
with all other laws applicable to Its
operations
• Mandatory injunctions - Authority to Issue
cleanup orders Is not a daim and therefore
not subject to discharge
7
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Is It a daim subject to discharge?
Is It an Injunctive obligation?
• Regulatory compliance orders
• CERCLA deanup orders
• RCRA correctIve action orders
aaims Process
• Need to file a Proof of Claim
- What about the SOL?
• Impact of Bar Date
•R f e 1 ltoDOJ
• Proving up the aaim
• Bankruptcy Timetable
Abandonment __________
• Allows trustee to abandon property that Is
burdensome or of Inconsequential value
• Right Is not absolute — property cannot be
abandoned hi contravention of laws racoonable ________
designed to protect public health & safety from
Identifiable hazards
8
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Summary of Information Sources
• In all cases
-Petition
- Sd eduIes
- Statement of AffaIi
- Examhiotlon of Debtor
• Section 541 Mesting
• Rule 2004 ExamInation
Information Sources
• In a Chapter 7 Case:
- Books and records of the debtor obtained
through the trustee
- Section 363 Motion ________
- Abandonment Motion
Infom,ation Sources _________
• In a Chapter 11
— Plan
- Disclosure Statement
- Post-Petition Financhig Documents
- Operathig Repasts
— Fee Applications
- Section 363 Motions
- Settlement Notice
9
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www.uscourts.gov
• Links to euery federal court In the country
• PACER - Access to case dockets. and court
papen
• Bankruptcy BasIcs
• Bankruptcy Official Forms
10
-------
NOTES
I.
-------
MultiDex
Qu:cfr Re: nv,ce ma e, Smiem
-------
Keynote Speaker:
Catherine R. McCabe
-------
CATHERINE R. MCCABE
Catherine R. McCabe is the Deputy Assistant Administrator of EPA’s Office of Enforcement and
Compliance Assurance (OECA) in Washington, DC. OECA’s mission is to improve the environment
and protect public health by ensuring compliance with the nation’s environmental laws, preventing
pollution, and promoting environmental stewardship. As Deputy Assistant Administrator, Ms.
McCabe serves as the senior career official for EPA’s enforcement and compliance assurance office,
responsible for managing the day to day operations of the nation’s environmental enforcement program,
with approximately 3,300 environmental professionals and an annual budget of more than $500 million.
Ms. McCabe has more than twenty years of experience in enforcing the nation’s environmental laws.
She served in the Department of Justice’s (DOT) Environment and Natural Resources Division
beginning in 1983, and as Deputy Chief ofthe Environmental Enforcement Section from 2001 until
2005. Before joining DOJ, she served as Assistant Attorney General in the New York State
Environmental Protection Bureau, and as an Associate with the Webster and Sheffield law firm in New
York City.
Ms. McCabe earned her ii) from Columbia Law School and her undergraduate degree from Barnard
College
-------
NOTES
-------
Mu/tjDex TM
OuicA Releience Thclex S /slepT
-------
Liability and the
Brownfields Amendments
-------
WILLIAM KEENER
William Keener is Assistant Regional Counsel for the U.S. Environmental Protection Agency’s
Region 9 office in San Francisco.
For the past 19 years, Mr. Keener has provided legal counsel to the EPA for federal
environmental laws, particularly Superflind, the Resource Conservation & Recovery Act and the
Oil Pollution Act. He has handled a wide variety of environmental enforcement cases, ranging
from the emergency removal of hazardous materials to multi-party settlements at complex area-
wide groundwater sites. His areas of expertise include brownfields and the liability of purchasers
of contaminated real property.
Mr. Keener graduated with distinction from the University of California at Berkeley, and received
his J.D. from Hastings College of the Law.
-------
HELEN B. KEPLINGER
Ms. Keplinger is an attorney-advisor in U.S. EPA’s Regional Support Division, Office of Site
Remediation Enforcement, Office of Enforcement and Compliance Assurance. She has worked in
EPA enforcement since 1979 and Superfluid Enforcement since 1981.
Ms. Keplinger’s present responsibilities at EPA include policy and model drafting projects
concerning implementation of the Brownf e1ds Amendments relating to bona jIde prospective
purchasers, windfall lien issues, innocent-landowners, and bonafide prospective purchasers who
intend to do work at a Superftind site that they own. Other assignments include Prospective
Purchaser Agreements, “RCRA-Prospective Purchaser Agreements,” de minimis generator, de
minimis landowner settlements, de micromis issues, and enforcement lead on the All Appropriate
Inquiry Rule.
She received her J.D. from the Catholic University of America, Columbus School of Law, and her
B.A. from West Virginia University She is a member of the Maryland Bar.
-------
SUPERFUND LIABILITY
F
5 th National Conference on
PRP Search Enhancement
Helen Keplinger, OECA
Bill Keener, ORC Region 9
SENATE HOUSE
S. 350 H.R. 1831
Brownfields Small Business
H.R.2869
Small Business Liability Relief
& Brownfields Revitalization Act
January 11, 2002
SMALL BUSINESS LIABILITY
RELIEF & BROWNFIELDS
REVITALIZATION ACT
‘Title I — Small Business
Liability
‘Title II— Brownfields
I
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TITLE I
SMALL BUSINESS LIABILITY
PROTECTION
G De Micromis Exemption
Municipal Solid Waste Exemption
‘ De Minimis Settlements
- ‘* -—*- •-: —i ---——— --
De Micromis Exemption
at NPL Sites
CERCLA 107(0)
. Generator I Transporter
•< 110 gal. Liquid
• < 200 lbs. Solid
. Disposed. Treated, Transported
prior to Aprii 1, 2001
Guidance issued November 6, 2002
• - :- -- - ii -- - ----
De Micromis Exemption
Exceptions:
.v Materials contribute
disproportionately to cost of cleanun
e Faiiure to cooperate
Criminal conviction
2
-------
De Micromis Exemption
CONTRIBUTION SUITS
Burden of Proof
shifts to
Non-governmental Plaintiff
Municipal
Solid Waste Exemption
at NPL Sites
CERCLA 107(p)
MSW generated by:
• Residential Owner! Lessee
• Small Business < 100 FTE
• Non-profit organization < 100 paId FTE
Guidance issued August 20, 2003
What is MSW?
I. Household waste
‘Commercial, Industrial or Institutional Waste
• Essentially the same as household waste
• Collected and disposed with other MSW as palt of
normal Municipal Collection Service
• Hazardous substances that are
no greater in relative quantity than
found in typical household waste
3
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MSW - Burden of Proof
‘Private Cost Recovery Burden of Proof
Always on Plaintiff
Government Cost Recovery
• MSW disposed prior to April 1, 2001
burden is on government
• MSW disposed after April 1, 2001
burden Is on defendant
De Minimis Settlements
CERCLA 122(g)(7 -12)
GAbility to Pay Settlements:
• President shall consider ability of PRP to
pay costs and “still maintain basic
business operations...”
PRP Seftior must cooperate, provide
information and access
‘PRP Settlor waives all CERCLA claims
against other PRPs
De Minimis Settlements
. Must give PRP written reasons for
denial of De Minimis Settlement
. Not subject to Judicial Review
e Guidance issued May 17, 2004
4
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TITLE II
BROWNFIELDS
REVITALIZATION
A. Brownfields Program
B. Liability Clarifications
C. State Response Programs
- - -- ----—+—--F----+ - - - -- - ‘il’ - -
B. Liability Clarifications
Contlguous Property Owners
CERCLA 107(q) ___________
BFPPs & Windfall Liens
CERCLA 101(40) and 107(r)
Innocent Landowners CERCLA 101(35)
--* - -—H---
Superfund Liability — CERCLA 107 ________
Current Owners
Owner!Operators at time of disposal __________
Generators (arranged for disposal)
Transporters
5
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Landowner Liability _____
“ Innocent Landowners ” — CERCLA 101(35)
> Did Not Know or Have Reason to Know
of Contamination
Government Agency Acquiring by
Involuntary Transfer or Eminent Domain
> Heirs
:- —* : -Rii- --:--— -----
Innocent Landowners
CERCLA 101(35)
Did Not Know or Have Reason to Know:
‘Did not cause, contribute or consent to
release
‘Full cooperation
GAll Appropriate Inquiries: did not know or
have reason to know of contamination
‘Take Reasonable Steps: stop! prevent
release and exposure
— - - - -- --- ‘II ’- —- —
innocent Landowner — 101 (35)
All Appropriate inquiries
‘Purchases before May 31, 1997
apply 5 statutory factors:
• specialized knowledge or expedence
• relationship of purchase price property value
• reasonably ascertainable Information
• obvlouenea$ of contamination
• ability of defendant to detect the cortandoation
by eppropitato Inepoction
s Purchases between May 31, 1997 and
AM Rule, apply ASTM Phase I
6
-------
Innocent Landowner -- 101 (35)
All Appropriate inquiries
4 AM Rule effective Nov 1, 2006
6 See detailed handout of the new Rule
- * -—*—-H * :—-- --H--
Appropriate Care
Take Reasonable Steps:
Stop any continuing release
4 Prevent any threatened future release
6 Prevent or limit any human, environmental
or natural resource exposure
. EPA Guidance Issued March 6. 2003
• These stops are less than those required of
PRP5 (see “Common Elements” guidance)
——- ‘* -— —•-—* — : — -—
Contiguous Property Owners
CERCLA 107(q)
. Property that is or “may be” contaminated
‘ Contamination comes from property
contiguous to or “similarly situated
with respect to”
‘Owner not a PRP or affiliated with the PRP
Full cooperation
Al Appropriate InquIries: did not know or
have reason to know of contamination
STake Reasonable Steps: stop I prevent
release and exposure
7
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Contiguous Property Owners
‘CPOs not liable
‘ For migration of contaminated groundwater,
no remediation is necessary
‘EPA may issue:
• No action assurance letter
• Contribution protection
—
Contiguous Property Owners
CPO Guidance issued Jan 2004
4 Region 9 signed EPAs first CPO No Action
Assurance letter in favor of the Fowler Ranch
• Ranch adjacent to Firestone NPL site
• Ranch owners bought Ag land In 1930s
• Firestone’s 1960s manufacturing
operations contaminated groundwater
that migrated under the ranch
k--.-; •— —----:—4—-- •--—’1I —i-- -
Bona Fide Prospective
Purchasers — 101 (40), 107(r)
Acqulre ownership after Jan 11, 2002
SNot a PRP or affiliated wfth the PRP
Disposal occurred before purchase
Provide all legally required notices
Appropriate inquiries (and have knowledge of
contamination)
& Take reasonable steps: Stop! prevent release
and exposure
8
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L -; h---i- --—Hft—H--Hh-H
Bona Fide Prospective Purchasers
4 Plot liable under CERCLA 107 (r)
4 Windfall Lien
See presentation on windfall liens May 18
by Bill Keener & Kat West
H— - : - H +- - - ± Rl - —---+- - H
Bona Fide Prospective Purchasers
s BFPP Guidance Issued May2002
• “In most cases,” PPAs unnecessary, except
• Windfall lien settlements, or
• Substantial public benefits, or
• Threat of litigation
‘ “Common Elements” Guidance March 6, 2003
• R.glons may provide comfort letters that
address ‘reasonable steps’
Bona Fide Prospective Purchasers
Uncharted Waters:
4 BFPPs Who Want to Do Work
• Authority; Document - AOC
Landlord — Tenant Issues
9
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Bona Fide Prospective Purchasers
‘ Tenants of BFPPS are BFPPs
• What If landlord loses BFPP status?
e Tenants of PRPs are not BFPPs
• Are ground lessees (wI 99 year lease)
equivalent to BFPPS who “acquire
ownership”?
ft+ --- --H .
C. State Response Programs
Assistance to States (Grants) CERCLA 128
4 Enforcement Bar CERCLA 128
Eligible Response Sfte CERCLA 101(41)
4 NPL Deferral CERCLA 105(h)
Enforcement Bar CERCLA 128
President may not take action under
CERCLA 106 or 107 (a) whenever party
Is conducting a cleanup in compliance
with the State program at an Eligible
Response Site
10
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Eligible Response Site CERCLA 101(41)
l Definition includes :
• Brownflelds sites
• LUST facIlItIes
• Other sites where EPA determines bar
should apply
i Definition excludes :
• Sites scoring above 28.5
after consulting with State
• Sites identified by Regs
(e.g. sole-source aquifer)
‘ - -4— - -
Brownfields Definition
Exc’usions:
• Removal Action — ongoing or planned
• NPL — listed or proposed
• Subject to Enforcement Action
- - - -—*- - -—+--—-- —-- -* —--:—- •*——• •
Enforcement Bar
(.Exceptions:
• State requests EPA for cleanup help
• Contamination across State line or
onto federal facility
• EPA determines I&SE where additional
cleanup is necessary
• New Information unknown to State
EPA can recover costs incurred prior to
Jan 11. 2002
fr Other federal authority (RCRA) not barred
f Public record of cleanups at all State or
Tribal sites
11
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EPA Notifications to State
EPA must notify State if It plans to
conduct response action where may be
barred
• State has 48 hours to respond
EPA need not waft for State response
if there are exceptions to eligible
response site
‘EPA must report all such actions to
Congress wIthin 90 days
New EPA Liability Guidances
BFPPs — May 31, 2002
‘De Micromis Waste — Nov 6, 2002
‘Common Elements’ — March 6, 2003
‘Windfall Liens —July 16, 2003
&MSW — August 20, 2003
‘Contiguous Owners — January 14, 2004
‘De MInlmlslATP — May 17, 2004
AAl — Nov 6, 2005 [ Nov 6, 2006]
- -:—-— --HHI -——- ---- * - : -
For the Latest
CERCLA Liability Information
OBCR Homepage
www.eøa.gov/brownfields
s’ OECA Webpage
www.epa.aov/comDliance/cleanuD /
html
12
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ALL APPROPRIATE INQUIRIES
RULE
5th National Conference on
PRP Search Enhancement
Bill Keener, ORC Region 9
Helen Keplinger, OECA
- —-• * —-—-— - iii--- - - m
Bona Fide Prospective Purchasers
Threshold Criterion:
• All Appropriate Inquiries (due diligence)
and have knowledge of contamination
ContinuIng OblIgation:
• Appropriate Care (take reasonable steps
with respect to contamination)
±-—-*-——-— - *— :— :- —
All Appropriate Inquiries
Mi, or Environmental Due Diligence,
is the process of evaluating property
for potential environmentai
contamination
The goal Is to identify conditions that
indicate a release or threatened
release of hazardous substances
I
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All Appropriate Inquiries
The 2002 Brownfields Amendments
required EPA to develop regulations
for conducting AAI
Statute listed 10 criteria EPA must
include In the regulations
Statute established interim standards
— -H— W---—- il---H--- -- - -—- H- -
AAI Rule
AAI Rule drafted through Regulatory
Negotiation (26 stakeholder entities
developed a consensus document)
Rule issued Nov 1, 2005 wIth delayed
effective date of 1 year
After Nov 1, 2006, parties must follow
the provisions of the final rule or use
the ASTM El 527-05 standard
- - — }i—-—— --— - -—- - — ——*---- . -
AAI Rule
.40 CFR Part 312
Ml Rule available at:
•www.ena.pov/brownfieldslrepnep.htm
& Preamble is extensive
For purchases made until new AAI Rule
is effective: do ASTM Phase I (ASTM __________
El 527— 1997 or 2000 or 2005)
2
-------
AAI Rule
Final Rule Is very similar to proposed
rule
PubIic commenters generally
supported proposed rule
Majority of 400 comments were on
the proposed definition of
environmental orofesslonal
: -----* +•—-•-* -
Applicability of the Rule
The AAI Rule is applicable to:
• Parties who may potentially claim
protection from CERCLA liability as:
• bona tide prospective purchaser
• contiguous property owner
• Innocent landowner
• Parties who receive grants under the EPA’s
Brownfleids Grant program to characterize
properties
—— -•-• i-
Residential Property
Ml Rule does not apply
Appropriate inquiries mean:
• Inspection
• Title search
• Results reveal no basis for
further investigation
3
-------
- ____ -- ‘1i --• -- - -11—--H -
Why Comply with AAI?
‘Required if seeking protection from CERCLA
liabIlity, or conducting assessments with
Brownfleids giants funding
bTo understand potential environmental risks
associated with a property prior to purchase
‘ Gain information that will help property
owners comply with ucontinuing obligations”
to take appropriate care reasonabie steps
after purchase
+*1 4 --H-—- -
AAI Rule Provisions
4 Defines ‘Environmental Professional’
No requirement to do Phase II sampling
‘Shelf Life: update after 180 days
I. Interviews: Owners v. Neighbors
SOn-site Visual Inspection
Compare Price vs. Value of Property
4 Specialized Knowledge of Buyer
‘Review Government Records
:—* - --— ii — ----+ •-• ----
AAI Rule Provisions
Environmental Professional
v P.E., P.G. and other state-certified or
licensed EP with 3 years full-time
experience; OR
Baccalaureate degree in science or
engineerin9 plus 5 years of reievant full-
time experience; OR
10 yrs full-time relevant experience
(draft Rule required a coliege degree]
4
-------
AAI Rule Provisions
Sampling & Analysis
4 No requirement to conduct sampling &
analysis
1, But, AAI means documenting data gaps
i Sampling may be used to fill data gaps
Sampling may be needed to ensure new
owner can “take reasonable steps” after
purchase
. . .
AAI Rule Provisions
Shelf Life - Timing
AAI must be conducted within 1 year
prior to purchase
Some aspects must be updated if older
than 180 days:
• visual site inspection
• interviews
• records search
- — -— -*- —
AAI Rule Provisions
Interviews
Must Interview current owner/occupant
Additional Interview of past
ownerloccupant may be necessary to
meat objectives and performance factors
Interview neighboring owner/occupants
If the property is abandoned
5
-------
AAI Rule Provisions
On-site Visual Inspection
4 Must conduct on-site visual inspection
Rule does not require the EP to Inspect,
may be done by subordinate, but EPA
recommends that EP does it
4 LImited exemption if no access to property
after good faith efforts:
• Inspect from nearest vantage point
F’—-- -- --—-- * : — - -• -
AAI Rule Provisions
Purchase Price vs. Value
Does sale price reflect Fair Market Value?
r No requirement for formal appraisal, but
may be useful
1’ If priced below FMV, then consider
whether this Is due to contamination
—-H - +—- H — —:—- - — - +
AAI Rule Provisions
Specialized Knowledge
Purchaser’s knowledge of the property
is relevant to the inquiry
e Courts have held that professional or
personal experience of purchasers may
be taken Into account In determining
whether they made “all appropriate
inquiries”
6
-------
+ 1I H- - H—’iI - H----’th
AAI Rule Provisions
‘Review records covering a period of
time back to the property’s obvious
first developed use
4 Records may Include, but are not
limited to:
• Aerial photos
• Firs Insurance maps (Sanborn)
• Building department records
•Chaln of title
• Land use records
Sanbom Map
m ____
PRAI It
:
7
-------
AAI Rule Provisions
Must review Federal, State, and Local
government records (or data bases
containing government records) for
subject and nearby properties
‘Review Tribal records If property is
located on or near tribal-owned lands
: -— -- *‘
— — —
—
lsfte
— — o.s am
G 3 J,
r, c .* .P Io
I I
Fu S —
— —
— - — —
— s
- — — oJ ,Dr
..
—
—
—— 0*0*
0*0*
}ft
Environmental
Database
Report
8
-------
AAI Rule Provisions
Gather Information required to meet
standards that is:
PubIicly available
Obtainable within reasonable time and
cost constraints, and
‘Can be practically reviewed
‘Review and evaluate thoroughness and
reliability of information gathered
. Ii — - - -
AAI Rule Provisions
Data Gaps
Environmental Professional must
identify data gaps affecting ability to
Identify conditions indicative of
releases or threatened releases of
hazardous substances
• Comment on significance of data
gaps
Sampling and analysis may be prudent
to address data gaps — not required
Appropriate Care
Take Reasonable Steps:
e Stop any continuing
release or prevent any
threatened future release
Prevent or limit any
human, environmental or
natural resource exposure
e May need information
gathered during AAI
9
-------
—H
Would You Buy This Property?
H H - 1
: - - :-- — FH
J _ J
10
-------
AM Rule
Decision to use the AAI Rule depends
on need to have federal Superfund
liability exemption (as a BFPP), or
If a Brownfields grantee
BFPP status may not provide RCRA or
State liability exemptions
- - --- —-— } ‘ - --— -- - ‘ll - - --- -
ASTM Phase l’s
ASTM develops industrywide standards
Since 1997 ASTM Phase l ’s have been
the standard for environmental
assessment of commercial real estate
EPA has worked closely with ASTM to
ensure that new E1527-2005 Phase I is
compliant with Ml Rule
—-ii - —- -— ‘iii
ASTM Phase l’s
‘ increase in price of Phase Is predicted
e, Phase I data gaps, and requirement for
appropriate care after purchase, may mean
more Phase 2 sampling will be done
ei Purchasers may do more ‘due diligence’ in
selecting an EP
c Will ASTM 1527-05 become the new
industry standard; will banks require It?
11
-------
ASTM Phase l ’s
‘. EPA does not review Phase l’s or other
All Appropriate Inquiries documents
. For All Appropriate Care, EPA may issue a
‘comfort letter’ listing the ‘reasonable
steps’ to be taken, if property is a federal
Superfund site
- -• ,ip i -—-—- —: —- - --
Information
e More EPA Brownfields Information
available at
www.eDa.qov/brownfields
‘ASTM Phase I available at
www.astm.org ($80)
12
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U.S. Environmental ProteCtion Agency
“WINDFALL LIEN” GUIDANCE
Frequently Asked Questions
Where can I obtain a copy of EPA ‘s Windfall Lien Guidance?
EPA’s July 16, 2003 guidance entitled, “interim Enforcement Discretion Policy Concerning
“Windfall Liens” Under Section 107(r) of CERCLA, “ is available at:
http://www.epa.gov/compliance/resources/policies/cleanup/superfundlinterim-windfall-lien.pdf
What is a CERCLA § 107(r) “windfall lien?”
A CERCLA statutory lien on a property for the increase in the fair market value of that property
attributable to EPA’s cleanup efforts. Unlike a CERCLA § 107(1) lien, it is j pj a lien for all of
EPA’s unrecovered response costs. The windfall lien is limited to the lesser of EPA’s
unrecovered response costs the increase in fair market value attributable to EPA’s cleanup.
To what properties does the windfall lien apply?
Properties that are or may be acquired by a “bona tide prospective purchaser” as defined at
CERCLA § 101(40).
Does EPA have a windfall lien on all contaminated properties?
No. A windfall lien can only arise on properties where the United States spends money cleaning
up the property. Thus, at the vast majority of Brownfield sites, there is no windfall lien.
If EPA has spent money cleaning up a property, what are some of the factors it
will consider in deciding whether to perfect a windfall lien?
Important factors include:
• substantial unreimbursed cleanup costs unlikely to be recovered from liable parties;
• whether a bona tide prospective purchaser will reap a significant windfall directly as a
result of EPA’s expenditure of Superfund money at a Site (e.g., EPA conducts a cleanup
at a site during a bona tide prospective purchaser’s ownership);
• a real estate transaction, or transactions, structured so as to either create bona tide
prospective purchaser windfall at taxpayer expense, or allow a liable owner to avoid
CERCLA liability.
-------
Are there situations where EPA will generally iwi perfect a windfall lien, even
when the Agency has unreimbursed response costs?
Yes, absent special circumstances, EPA will generally i• Q perfect a windfall lien in the following
situations: -
• a bona fide prospective purchaser acquires the property at fair market value after cleanup;
• EPA has previously resolved the potential windfall through a settlement with the liable
owner;
• EPA’s only site expenditures are Brownfield grants or loans;
• EPA’s only site response costs are preliminary site assessment or site investigation costs;
• a homeowner sells a residential property to another homeowner;
• the bona fide prospective purchaser is going to use the property for the creation of a
public park or other similar public purpose;
• there is a substantial likelihood of full cost recovery from CERCLA liable parties;
• an existing EPA landowner enforcement discretion policy (e.g., the Contaminated
Aquifers Policy) applies to the bona fide prospective purchaser.
When EPA does file a windfall lien on a property, how will EPA value the
windfall lien?
Absent special circumstances, EPA will generally seek only the increase in fair market value
attributable to a response action that occurs g a bona tide prospective purchaser acquires the
property at fair market value.
How will EPA determine the increase in fair market value after a bonafide
prospective purchaser acquires the property?
Generally, EPA will calculate the increase in fair market value attributable to EPA’s cleanup by
considering the fair market value of the property as if cleanup were complete versus the fair
market value of the property when acquired, presumably the bona fide prospective purchaser’s
purchase price.
What happens f a bona fide prospective purchaser wishes to acquire a property
with a CERCLA § 107 (l) lien on the properly?
Where a bona fide prospective purchaser acquires a property with a perfected CERCLA § 107(1)
lien, EPA expects that, in most instances, the CERCLA § 107(1) lien will be paid off as part of
the transaction between the liable owner and the bona fide prospective purchaser. If not, EPA
may subsequently seek enforcement of the CERCLA § 107(1) lien against the property during the
bona fide prospective purchaser’s ownership.
Windfall Lien” Frequently Asked Questions 2
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How is EPA addressing windfall lien concerns ofbonafideprospeciive
purchasers where EPA will generally not perfrcl a windfall lien?
EPA believes today’s enforcement discretion policy addresses many windfall lien concerns and
limits the need for EPA involvement in private real estate transactions. However, in situations
where it may be appropriate for EPA to provide more site-specific information to interested
parties, an additional tool may be available. Consistent with EPA’s existing “ComfortlStatus
Letter” policy, EPA Regions may provide a comfort/status letter for circumstances where EPA
will generally not pursue a windfall lien. A sample letter is attached to the policy.
How can windfall liens be released or settled?
Where EPA is likely to pursue a windfall lien and a bona fide prospective purchaser wants to
resolve any existing or potential windfall lien, EPA has developed a model windfall lien
resolution document . The model is attached to the policy.
MORE QUESTIONS
Questions regarding this reference sheet or EPA’s Windfall Lien Guidance should be directed to
Greg Madden in OSRE’s Policy & Program Evaluation Division (202-564-4229,
Madden.Gregorv( EPA.gov or to the Landowner Liability Protection Subgroup Regional
contacts listed below. Questions regarding windfall lien resolution agreements should be
directed to Helen Keplinger in OSRE’s Regional Support Divi ion (202-564-4221),
Keplinger.Helen@EPA.gov or to the Landowner Liability Protection Subgroup Regional
contacts listed below.
Regional Contacts
Region I: Joanna Jerison 617-918-1781
Region 2: Michael Mintzer 212-637-3168
Paul Simon 212-637-3152
Region 3: Joe Donovan 215-814-2483
LeoMullin 215-814-3172
Heather Gray Torres 215-814-2696
Region 4: Kathleen West 404-562-9574
Region 5: Thomas Krueger 312-886-0562
Larry Kyte 312-886-0562
Peter Felitti 312 886-5114
Region 6: Mark Peycke 214-665-2135
Region 7: Denise Roberts 913-551-7559
Windfall Lien’• Frequently Asked Questions 3
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Region 8: Matthew Cohn 303-312-6853
Suzanne Bohan 303-312-6853
Nancy Mangone 303-312-6903
Region 9: Bill Keener - 415 972-3940
Region 10: Cyndy Mackey 206-553-2569
This document is intended for employees of EPA and the Department of Justice and it creates no
substantive rights for any persons. It is not a regulation and does not imfiose legal obligations.
This document is not intended as a substitute for reading the statute or EPA ‘s July 16, 2003
Guidance entitled “Interim Enforcement Discretion Policy Concerning “Windfall Liens” Under
Section 107(r) of CERCLA. “Readers are strongly encouraged to review the guidance for more
spec y’Ic information on EPA ‘s policy.
Windfall LienS’ Frequently Asked Questions 4
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Jill J 6 2003
SUBJECT:
FROM:
TO:
Interim Enforcement Discretion Policy çoncei ij Windfall Liens” Under
Section 107(r) of CERCLA
Susan E. Bromm, Director)
Office of Site Remediation Enforcement
Office of Enforcement and Compliance Assurance
U.S. Environmental Protection Agency
Bruce S. Gelber, Chief/ 4 ,‘ ...... .
Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice
Director, Office of Site Remediation and Restoration, Region I
Director, Emergency and Remedial Response Division, Region II
Director, Hazardous Site Cleanup Division, Region LU
Director, Waste Management Division, Region IV
Directors, Superfund Division, Regions V. VI, VII and IX
Assistant Regional Administrator, Office of Ecosystems Protection and
Remediation, Region v iii
Director, Office of Environmental Cleanup, Region X
Director, Office of Environmental Stewardship, Region I
Director, Environmental Accountability Division, Region IV
Regional Counsel, Regions II, LU, V, VI, VII, IX, and X
Assistant Regional Administrator, Office of Enforcement, Compliance, and
Environmental Justice, Region VIII
Assistant Chiefs, Environmental Enforcement Section, U.S.
Department of Justice
Chief, Assistant Chiefs, Environmental Defense Section, U.S. Department of
Justice
U.S ENVIRDPIMENTAL PROTECTION AGENCY
U.S.
DEPARTMENT OF JUBTICE
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Table of Contents
INTRODUCTION I
II. BACKGROUND I
Ill. DISCUSSION
A. EPA’s Windfall Lien Enforcement Discretion Policy 3
I. To Perfect, or Not to Perfect 3
a. Factors That May Lead EPA to Perfect a Windfall Lien
b. Situations Where EPA Will Generally Not Seek to Perfect a
Windfall Lien 4
(1) Post-Cleanup Acquisitions
(2) Previous Full Resolution of Potential Windfall
(3) Specific Types of Expenditures
(4) Specific Property Uses
(5) Full Cost Recovery From Potentially Responsible Parties
(PRPs) 7
(6) Applicability of Enforcement Discretion Policies 1
2. Settling With Bona Fide Prospective Purchasers
a. EPA’s Windfall Lien Valuation Approach
b. Determining the Increase in Fair Market Value After A Bona Fide
Prospective Purchaser Acquires the Property
c. Existing CERCLA § 107(1) Liens fl
B. Vehicles for Addressing Windfall Lien Liability Concerns
1. Comfort/Status Letters for Situations Where EPA Will Generally Not
Pursue a Windfall Lien 12
2. Windfall Lien Resolution Documents for Situations Where EPA is Likely
to Pursue a Windfall Lien 14
IV. CONCLUSION
V. DISCLAIMER
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I. INTRODUCTION
This memorandum discusses the United States Environmental Protection Agency’s
(“EPA” or “Agency”) and the Department of Justice’s (“DOJ”) implementation of new
Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”)
Section 107(r), the “windfall lien” provision of the Small Business Liability Relief and
Brownfields Revitalization Act (“Brownfields Amendments”), P.L. 107-118. This interim
policy describes how EPA and DOJ will generally exercise their enforcement discretion in the
context of the new CERCLA § 107(r) windfall lien provision. However, because each situation
will be fact-specific, EPA does not intend to restrict Regional discretion to make case-specific
determinations at variance with EPA’s general approach described herein.
This interim policy memorandum does three things:
• First, it articulates factors that may lead EPA and DOJ to assert a windfall lien and
provides examples of situations where EPA will generally pursue a windfall lien.
• Second, this memorandum describes EPA’s and DOJ’s approach to settling windfall
liens. EPA will generally seek only the increase in fair market value attributable to
EPA’s response action that occurs after a bona fide prospective purchaser acquires a
property. In addition, this memorandum discusses how the Agency will generally
address situations where a bona fide prospective purchaser acquires a property with an
existing CERCLA § 107(l) lien.
• Third, this memorandum discusses comfort/status letters and agreements that EPA may,
in its discretion, provide to a bona fide prospective purchaser in order to address the bona
fide prospective purchaser’s windfall lien concerns. Samples of these documents are
provided as Attachments A and B.
EPA and DOJ are issuing this memorandum as an interim policy and, as they gain additional
experience in implementing the windfall lien provision, they may revise or amend this policy.
EPA and DOJ welcome comments on the policy and its implementation. Comments may be
submitted to the contacts identified at the end of this document.
II. BACKGROUND
In enacting the Brownfields Amendments, Congress intended to promote the
redevelopment and beneficial reuse of Brownfield sites and other contaminated or potentially
contaminated properties.’ As part of that effort, Congress provided liability protection under
A “brownfield Site” is defined as “real property, the expansion, redevelopment, or reuse
of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or
contaminant.” CERCLA § 101 (39)(A). The brownfield site definition also provides certain exclusions
and inclusions identified in CERCLA § I01(39)(B)-(D).
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CERCLA for bona fide prospective purchasers to encourage the purchase and reuse of
contaminated properties. New CERCLA § 107(r) provides that bona fide prospective purchasers
are not liable as owner/operators for CERCLA response costs, but the property they acquire may
be subject to a windfall lien where an EPA response action has increased the fair market value of
the property. In order to qualify as a bona fide prospective purchaser, an entity must meet the
specified criteria found at CERCLA § l01(40)(A)-(H). 2
EPA has previously issued guidance explaining EPA’s view that, in most cases, the
Brownfields Amendments make Prospective Purchaser Agreements (“PPAs”) from the federal
government, which provide a CERCLA covenant not to sue, unnecessary for bona fide
prospective purchasers. , “Bona Fide Prospective Purchasers and the New Amendments to
CERCLA,” Memorandum from Barry Breen, Director, Office of Site Remediation Enforcement,
U.S. EPA, May 31, 2002 (hereinafter “May 2002 Bona Fide Prospective Purchaser
Memorandum”). However, that guidance recognized that EPA may enter into a windfall lien
resolution agreement with a purchaser if there is likely to be a significant windfall lien needing
resolution.
Windfall liens will only aiise where there is federal involvement at a site. Congress
recognized that while there may be as many as 450,000 Brownfield sites nationwide, at the vast
majority of them, there will be no federal involvement. See. e.g. , S. Rep. No. 107-2, 107 th Cong.,
1” Sess., at 3. Bona fide prospective purchasers may acquire most of the hundreds of thousands
of Brownfield sites without concerns about being pursued by the United States under CERCLA
for unrecovered response costs. For those sites where there has been, or will be, federal
involvement that results in EPA incurring response costs, a windfall lien may arise. 3 The United
States has a windfall lien on the property in an amount, capped by the amount of unrecovered
response costs, not to exceed the increase in fair market value attributable to the United States’
response action. CERCLA § 1 07(r)(4). The windfall lien provision reflects Congress’ intent
that bona fide prospective purchasers should not be unjustly enriched and reap a windfall where
taxpayer dollars are spent cleaning up the property and those taxpayer dollars lead to an increase
in the fair market value of the property. S. Rep. No. 107-2, 107th Cong., 15t Sess., at 13
2 This guidance addresses only those situations where an entity satisfies bona fide
prospective purchaser criteria; if an entity does not satis1 y the bona fide prospective purchaser criteria, the
entity may be subject to fill CERCLA liability and the property may be subject to a CERCLA § 107(1)
lien for all unrecovered response costs. EPA has issued other guidances discussing the bona fide
prospective purchaser cnteria. “Bona Fide Prospective Purchasers and the New Amendments to
CERCLA,” Memorandum from Bariy Breen, Director, Office of Site Remediation Enforcement, U.S.
EPA, May 31, 2002; “Interim Guidance Regarding Criteria Landowners Must Meet in Order to Qualify
for Bona Fide Prospective Purchaser, Contiguous Property Owner, or Innocent Landowner Limitations on
CERCLA Liability (“Common Elements”),” Memorandum from Susan E. Bromm, Director, Office of
Site Remediation Enforcement, U.S. EPA, March 6, 2003. Today’s guidance does not affect EPA’s intent
to recover response costs from CERCLA liable parties.
As noted below in Section lilA. I .b(3), where the only federal involvement is the
expenditure of Brownfield grant or loan monies, EPA will generally not seek to perfect a windfall lien.
2
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(windfall lien provision “prevents [ bona fide prospective purchasers] from reaping a windfall
due to the increase in property’s value as a result of the Federal Government’s cleanup efforts.”)
Ill. DISCUSSION
A. EPA’s Windfall Lien Enforcement Discretion Policy
EPA’s implementation of the new CERCLA § 107(r) windfall lien provision raises two
important questions. First, under what circumstances will EPA perfect a windfall lien against a
property? Second, how does EPA intend to value that lien? This memorandum explains below
how the Agency generally intends to exercise its enforcement discretion in answering each of
these questions. 4 In addition, EPA explains how the Agency generally intends to address
situations where a bona fide prospective purchaser acquires a property that is subject to a
preexisting CERCLA § 107(7) lien. Exercising enforcement discretion involves evaluating a
number of factors, including the status of a particular matter, allocation of Agency resources,
potential litigation risk, potential cost recovery, and equitable considerations.
1. To Perfect, or Not to Perfect
This memorandum provides factors that may lead EPA to perfect a windfall lien, and
examples of situations where EPA will generally n i seek to perfect a windfall lien.
a. Factors Thai May Lead EPA to Perfect a Windfall Lien
Factors that may lead EPA to perfect a windfall lien include:
• EPA has substantial unreimbursed cleanup costs which EPA is unlikely to recover from
liable parties;
• There is a likelihood that a bona fide prospective purchaser will reap a significant
windfall as a direct result of EPA’s expenditure of response costs at a site (e.g., EPA
conducts a cleanup at a site during a bona fide prospective purchaser’s ownership);
• A real estate transaction, or series of transactions, structured so as to permit:
(a) a bona fide prospective purchaser to retain an increase in fair market value resulting
from EPA’s cleanup action (e.g., a liable owner sells property to bona fide prospective
purchaser at below fair market value); or (b) a liable owner to sell property to avoid the
consequences of CERCLA liability (e.g., sales that avoid EPA perfection of CERCLA §
107(1) lien against the property or during the process of EPA perfection of a CERCLA
This memorandum provides EPA’s enforcement discretion policy and may not represent
the United States’ approach in cases where EPA is not involved, but a federal agency other than EPA
(e.g., Department of Interior, Department of Defense) has unreimbursed response costs.
3
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lien). 5
Depending on an evaluation of these and other relevant factors, EPA may perfect a windfall lien.
EPA does not intend the factors above to be comprehensive or applicable in each instance.
There may be additional relevant factors in particular situations and Regional personnel should
evaluate all relevant factors in making individual decisions regarding windfall liens.
As explained below the Agency will generally not perfect a CERCLA § 107(r) lien on a
property if all of the increase in fair market value attributable to EPA’s response action occurs
before a bona fide prospective purchaser acquired the property at fair market value. However,
even under that scenario, EPA may file a windfall lien on the property where there are
substantial unreimbursed costs, EPA’s response action results in a significant increase in the
property’s fair market value, there are no viable, liable parties from whom EPA could recover its
costs, and a response action occurs while the property is owned by a person who is exempt (other
than a bona fide prospective purchaser) from CERCLA liability. In these instances, EPA’s
cleanup can result in a windfall, at taxpayer expense, for the CERCLA-exempt party while EPA
still has substantial unreimbursed cleanup costs. Whether EPA will perfect a CERCLA § 107(r)
lien and prevent a potential windfall in such instances will be detennined by site-specific
circumstances and the equities of the particular situation. For example, if a secured creditor
forecloses on a property, is exempt from CERCLA liability under CERCLA § lOI(20)(E), and
holds the property while EPA conducts a cleanup that substantially increases the property’s fair
market value, EPA may file a CERCLA § 107(r) lien on the property and seek the increase in
fair market value attributable to EPA’s cleanup. This would be particularly appropriate where
the amount the secured creditor would receive upon sale of the property would exceed its
security interest.
b. Situations Where EPA Will Generally Not Seek to Perfect a
Windfall Lien
As noted above, EPA has not been and will not be involved at the vast majority of
Brownfietd sites. If EPA does not incur any response costs at a site, EPA will not have a
windfall lien on the property. However, even at sites where EPA has been or is involved and has
incurred response costs, the Agency may decide not to perfect a windfall lien. This section
provides examples of situations where, in an exercise of its enforcement discretion, the Agency
will generally not perfect a windfall lien, notwithstanding the incurrence of some response costs.
An EPA decision to not perfect a windfall lien does not affect EPA’s intent to recover costs from
CERCLA liable parties.
If a property transfer is fraudulent or designed to avoid CERCLA liability, the United
States reserves, and this policy does not limit, the United States’ legal remedies provided under CERCLA
or other federal statutes, including remedies provided under the Federal Debt Collection Procedures Act,
28 U.S.C. 3301 Ct. seq., against the seller or purchaser. Notably, a person may not be “affiliated with”
any potentially responsible party at the site and maintain bona fide prospective purchaser status. ,
CERCLA § lOI(40)(H).
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(1) Post-Cleanup Acquisitions
EPA will generally not perfect a windfall lien where a bona fide prospective purchaser
acquires the property at fair market value after cleanup. 6 Under the Brownfields Amendments,
the windfall lien is measured by the increase in fair market value attributable to EPA’s cleanup.
Where a bona fide prospective purchaser acquires a property at fair market value post-cleanup,
and no EPA response action occurs during the bona fide prospective purchaser’s ownership,
there is no potential windfall to the bona fide prospective purchaser. EPA would generally
consider a post-cleanup acquisition to be an acquisition after completion of all EPA response
activities, including operation and maintenance. There may be situations where some EPA site
response activities remain to be completed after the acquisition, butthosc remaining site
activities are expected to have zero or minimal impact on the fair market value of the property.
Such situations would also be considered post-cleanup acquisitions solely for purposes of this
policy. 7
(2) Previous Full Resolution of Potential Windfall
EPA will not typically perfect a windfall lien if EPA has resolved the liability of an
owner, who is liable under CERCLA § I 07(a)( 1), pursuant to a settlement or successful recovery
of response costs that took into account the full value of the property as if cleanup were
complete, including any potential windfall from EPA’s cleanup activity. Under these
circumstances, EPA will generally not perfect a windfall lien that might arise by virtue of a bona
fide prospective purchaser’s subsequent acquisition of that property.
(3) Specific Types of Expenditures
EPA will generally not perfect a windfall lien where EPA only spends money on the
following two types of activities at a site. First, where EPA’s only expenditures at a site are
Brownfield grants or loans (i.e., assessment, cleanup, revolving loan fund, and job training
monies), EPA will generally not perfect a windfall lien on the property.
6 As noted in Section II1.A.l .a above, one exception to this approach may arise where a
response action occurs while the property is held by a CERCLA-exempt party, there are no viable PRPs,
EPA has substantial unreimbursed response costs, and EPA’s cleanup results in a significant increase in
the property’s fair market value resulting in the potential for a significant windfall to the CERCLA-
exempt party at taxpayers’ expense.
If EPA has filed a CERCLA § 107W or 107(r) lien on the property prior to a post-
cleanup acquisition by a bona fide prospective purchaser, EPA expects that the CERCLA lien would
normally be resolved at or around the time of the real estate transaction between the seller and the
purchaser. If not, the value of the CERCLA lien will presumably be reflected in a reduced acquisition
price, and EPA may separately pursue recovery pursuant to that lien after the post-cleanup acquisition.
EPA’s general approach in these situations is described below in Section IlJ.A.2.
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Second, where EPA ‘s only costs are preliminary site assessment or site investigation
(“PA” or “SI”) costs, and EPA does not anticipate undertaking removal or remedial actions at the
site, EPA will generally not perfect a windfall lien on the property. 8 EPA recognizes that EPA’s
performance of some limited investigation activities at a site could lead to concerns about a
windfall lien and could have a chilling effect on a property sale. EPA hopes to aineliofate any
such chilling effect by articulating its policy of generally not seeking imposition of a wmdfall
lien at a site where the Agency’s only costs are PA or SI costs.
(4) Specific Property Uses
When a bona fide prospective purchaser acquires a property that will be put to one of the
following uses, EPA will generally not perfect a windfall lien on the property. First, where a
bona fide prospective purchaser acquires property and uses it for residential purposes, and both
the seller and purchaser are nongovernmental and noncommercial entities (i.e., a homeowner-to-
homeowner sale), EPA will not, as a general matter, file a windfall lien on the property. This
policy is consistent with Congress’s objectives and EPA’s previous policies regarding residential
owners. 9
Second, where a bona fide prospective purchaser acquires a property for the creation or
preservation of a public park or similar public purpose, EPA will generally not perfect a windfall
lien. Congress has encouraged the use of Brownfield grants and loans at sites that involve “the
creation of, preservation of, or addition to a park, a greenway, undeveloped property,
recreational property, or other property used for nonprofit purposes.” CERCLA §
104(k)(5)(c)(v). Moreover, if a bona fide prospective purchas&r uses the property in this manner,
it will not likely reap a significant windfall. Thus, where a bona fide prospective purchaser is
acquiring the property for the creation or preservation of public greenspace or for public
recreational purposes, EPA will generally not perfect a windfall lien at that property.’° In
8 Where EPA performs, or anticipates performing, a removal or remedial action after the
PA or SI, perfecting a windfall lien may be appropriate.
Both EPA and Congress have sought to give special consideration to residential property
owners that are confronted with potential CERCLA liability. EPA previously announced its policy of
generally not pursuing enforcement actions against residential owners of contaminated property, who did
not cause the contamination. “Policy Towards Owners of Residential Property at Superfund Sites,”
Memorandum from Don Clay, Assistant Administrator, Office of Solid Waste and Emergency Response
(OSWER), and Raymond Ludwiszewski, Acting Assistant Administrator, Office of Enforcement, July 3,
1991 (“Residential Property Owner Policy”). The Brownfields Amendments provide relief for bona fide
prospective purchasers of residential property by providing a less stringent “all appropriate inquiry”
standard for nongovernmental, noncommercial bona fide prospective purchasers of residential property.
CERCLA § IOl(35)(B)(v).
‘° As noted above, EPA will generally not perfect a windfall lien where EPA’s only
response costs at the site are Brownfield grant or loan expenditures.
6
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appropriate cases, Regions may seek evidence of deed restrictions or other written assurances
that ensure such future uses. If the use for public greenspace or public recreation is temporary,
and the property is later converted to a different use, EPA may consider perfecting a windfall
lien on the property.
(5) Full Cost Recovery From Potentially Responsible Parties
(PRPs)
In appropriate circumstances, where there is a substantial likelihood that EPA will
recover all of its cleanup costs from liable parties, the Agency will generally not perfect a
windfall lien on the property. For example, where EPA has entered a consent decree or
settlement agreement with PRPs that provides for full recovery of response costs and
implementation of the remedy (e.g., an RD/RA consent decree), EPA will generally not perfect a
windfall lien on the property.
(6) Applicability of Enforcement Discretion Policies
EPA has previously identified circumstances where the Agency will exercise its
enforcement discretion and generally not pursue current landowners for CERCLA cleanup or
cost recovery (e.g. , Residential Property Owner Policy; “Policy Towards Owners of Property
Containing Contaminated Aquifers,” Memorandum from Bruce M. Diamond, Director, Office of
Site Remediation Enforcement, May 24, 1995 (“Contaminated Aquifers Policy”)). Where one of
these enforcement discretion policies would apply to a bona fide prospective purchaser, the
Agency will generally not perfect a windfall lien against the prbperty. For example, if a party
meeting the bona fide prospective purchaser criteria acquires property that falls within EPA’s
“Contaminated Aquifers Policy,” the Agency would generally not perfect a windfall lien against
the property. Similarly, if the seller of the property had previously received a “No Current
Superfund Interest” comfort/status letter explaining that EPA does not anticipate taking further
response action at the site, then EPA would generally not seek to perfect a lien on the property.”
Generally, acquisition of the property by a bona fide prospective purchaser, standing alone,
should not change EPA’s enforcement approach with respect to the property.
“ EPA enforcement discretion policies and EPA comfort/status letters are typically
conditional in that they are based on the information available at the time, and if such conditions change,
then the Agency’s expectations may change as well. For example, if EPA spends significant amounts
cleaning up a site during a bona fide prospective purchaser’s ownership - an occurrence not anticipated at
the time a comfort/status letter was issued to the former owner - then EPA may pursue a windfall lien
against the bona fide prospective purchaser.
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2. Settling With Bona Fide Prosnective Purchasers
This section discusses EPA’s and DOJ’s general approach to settling CERCLA § 107(r)
windfall liens in those situations where EPA has filed or will file a windfall lien on a property.
Unlike the CERCLA § 107(l) lien, the CERCLA § 107(r) windfall liènis nOt for the entirety of
EPA’s unrecovered response costs. Instead, the windfall lien is for “an amount not to exceed the
increase in fair market value of the property attributable to the response action at the time of a
sale or other disposition of the property.” CERCLA § 1 07(r)(4)(A). A windfall lien arises “at
the time at which costs are first incurred by the United States with respect to a response action at
the facility.” CERCLA § 1 07(r)(4)(B). The Agency’s general conceptual approach to valuing
the windfall lien and general approach to calculating the increase in fair market value
attributable to EPA’s cleanup are discussed below. EPA also discusses how the Agency will
generally address situations where a bona fide prospective purchaser acquires a property subject
to an existing CERCLA § 107(1) lien.
a. EPA ‘s Windfall Lien Valuation Approach
As an exercise of its enforcement discretion in settlement of CERCLA § 107(r) liens and
consistent with the principles outlined in the prior section, EPA will generally seek only the
increase in fair market value attributable to a response action that occurs after a bona fide
prospective purchaser acquires the property at fair market value. 12 As noted above, in enacting
the windfall lien provision, Congress sought to avoid windfalls at taxpayers’ expense. By
providing bona fide prospective purchasers with protection from CERCLA liability, Congress
also sought to encourage beneficial reuse of contaminated properties. EPA believes an
enforcement discretion settlement policy of generally seeking only the increase in fair market
value that occurs after a bona fide prospective purchaser assumes ownership strikes the
appropriate balance between these objectives. If there is not a CERCLA § 107(7) or 107(r) lien
already filed on the property, bona fide prospective purchasers should be able to acquire property
with the understanding that EPA will usually seek only the increase in value that results from
EPA’s expenditure of Superfund response costs on the property after a purchaser acquires the
property. This approach should provide a level of certainty to bona fide prospective purchaser
property transactions, and should also prevent bona fide prospective purchasers from reaping a
windfall due to EPA’s cleanup efforts. The following examples help illustrate this settlement
approach.
EXAMPLE: EPA spends $2,000,000 cleaning up a property, increasing its value from
$1,000,000 to $2,000,000. A bona fide prospective purchaser then purchases the
property, at fair market value, for $2,000,000. After the bona fide prospective
purchaser’s purchase, EPA spends an additional $1,000,000 cleaning up the site that
results in a $500,000 increase in the fair market value of the property.
12 EPA’s policy of seeking only the increase in fair market value after a bona fide
prospective purchaser acquires the property will not necessarily apply if EPA is required to
litigate to enforce the CER LA § 107(r) lien against the property.
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EPA will, through the section 107(r) lien, generally seek only the $500,000 increase
attributable to EPA’s response action that occurred after the bona tide prospective
purchaser acquired the property.
If a bona tide prospective purchaser acquires property whére a CERCLA § 107(r) lien
has already been filed on the property, EPA expects that, in most instances, the CERCLA § -
107(r) lien will be resolved directly with EPA as part of the transaction between the bona tide
prospective purchaser and the seller. If the bona tide prospective purchaser does not resolve the
existing lien when acquiring the property, EPA will generally seek the value of the unresolved
lien from the bona tide prospective purchaser. For example, where the purchase price of the
property is reduced to reflect an existing CERCLA § 107(r) lien on the property, a bona tide
prospective purchaser could reap a windfall based on EPA’s past cleanup activities at the site.
EXAMPLE: Prior to any EPA cleanup, bona tide prospective purchaser A buys a
contaminated property for its fair market value of $750,000. EPA subsequently spends
$500,000 on a cleanup that increases the fair market value of the property to $1,000,000
and files a CERCLA § 107(r) lien on the property. Bona tide prospective purchaser A
sells the property to bona tide prospective purchaser B at a reduced value of $750,000,
reflecting EPA’s lien encumbrance.
Bona fide prospective purchaser B purchased at the reduced purchase price reflecting
EPA’ s existing CERCLA § 107(r) lien. EPA would generally seek the $250,000
reflecting the value of the pre-existing CERCLA § 107(r) lien on the property.
Consistent with preventing bona tide prospective purchaser windfalls at taxpayer
expense, if a bona fide prospective purchaser acquires a property at below fair market value, then
EPA may seek any windfall due to EPA’s cleanup action at the site. Again, EPA’s intent is to
ensure that its policy does not unnecessarily restrict property transfers, but also avoids creating
incentives for transactions that will result in windfalls at taxpayer expense.
EXAMPLE: EPA spends $3,000,000 on a property, increasing its value from $1,000,000
to $2,000,000. A bona fide prospective purchaser then purchases the $2,000,000
property for $500,000. After the bona fide prospective purchaser assumes ownership,
EPA spends an additional $1,000,000 cleaning up the site that results in an additional
$500,000 increase in the fair market value of the property, bringing the property’s fair
market value up to $2,500,000.
Because the bona fide prospective purchaser is reaping a windfall due to EPA’s cleanup
work that occurred both pre- and post-purchase, EPA may seek the $1,500,000 increase
in property value resulting from EPA’s pre-purchase work (which produced a $1,000,000
fair market value increase) and post-purchase work (which produced a $500,000 fair
market value increase).
As a general matter, the Agency will scrutinize property transactions that appear to be at
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significantly less than fair market value or otherwise appear to not be arms length transactions.
in particular, EPA will generally examine a transaction or series of transactions that appear to
provide a windfall for the bona fide prospective purchaser, or appear structured to limit EPA’s
recourse against a liable seller (e.g., a transaction that limits the amount EPA can recover from a
seller by disposing of one of the selter’s most valuable assets: the property; or a transaction to
evade CERCLA §107(1) or 107(r) lien perfection.)
EPA will generally exercise enforcement discretion in settling a CERCLA § 107(r) lien
and not seek the increase in fair market value that occurs prior to acquisition by a bona fide
prospective purchaser if that acquisition is at fair market value. However, as noted above at
section 1H.A. 1 .a, EPA may file a CERCLA § 107(r) lien on a property where EPA has
substantial unreimbursed response costs, there is no viable liable party from whom EPA could
recover its costs, a response action occurs during ownership by a CERCLA-exempt party, and
EPA’s cleanup results in a significant increase in the property’s fair market value. In this
instance, EPA may, depending on the specific site circumstances and equities, seek the increase
in fair market value that occurred prior to ownership by the bona fide prospective purchaser to
avoid a potential windfall at taxpayer expense.
b. Determining the Increase in Fair Market Value After A Bona Fide
Prospective Purchaser Acquires the Propeity
Where an EPA cleanup continues or occurs after the property is acquired by a bona fide
prospective purchaser, EPA intends to calculate the increase in fair market value attributable to
an EPA response action after that acquisition by comparing the fair market value of the property
as if cleanup were complete to the fair market value of the property when acquired, presumably
the bona fide prospective purchaser’s acquisition price. EPA’s general approach would consider
the difference between those two values as representing the fair market value increase fairly
attributable to future EPA response actions at the site. EPA recommends that bona fide
prospective purchasers who believe there is a potential for a significant windfall obtain a reliable
estimate of what the property’s fair market value would be if the cleanup were complete. In
most cases, this estimate should be based on a real estate appraisal by a trained professional) 3
EPA understands that some bona fide prospective purchasers may want to resolve any
potential windfall lien on the property at or around the time they acquire the property. As noted
in the May 2002 Bona Fide Prospective Purchaser Memorandum, where there is the potential for
a significant windfall lien and resolution of the lien is necessary for the transaction to go
forward, EPA recognizes that a windfall lien resolution agreement with a bona fide prospective
purchaser might be appropriate. Where this is the case, EPA strongly encourages resolving the
windfall lien concerns associated with the property at or around the time the bona fide
13 in some circumstances, other credible mechanisms of the property’s value as if clean
might be appropriate (e.g., tax appraisal or information from neutral professional real estate brokers).
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prospective purchaser acquires the property.’ 4 Resolving the potential windfall lien at this point
should remove the cloud on the property’s title and allow for free alienability in the future. To
assist in resolving the amount of the windfall lien, a bona fide prospective purchaser should be
prepared to provide EPA with a real estate appraisal prepared by a licensed appraiser, or
similarly reliable estimate, of the fair market value of the property as if cleanup were complete.’ 5
c. Existing CERCLA § 10 7(1) Liens
EPA generally seeks to limit the CERCLA § 107(r) lien exposure to the windfall a bona
fide prospective purchaser might receive from EPA’s cleanup. At the same time, EPA wants to
avoid creating incentives for liable parties to structure transactions in such a way as to avoid
their CERCLA liability. One mechanism to avoid creating such incentives is EPA’s use of the
CERCLA § 107(1) lien authority. Consistent with EPA’s longstanding policies on the use of
CERCLA § 107(1) liens, where EPA is concerned that a liable party may try to transfer its
property to a bona fide prospective purchaser in an effort to avoid CERCLA liability, EPA
should consider perfecting a CERCLA § 107(/) lien on the property.’ 6 Perfecting the CERCLA
§ 107(l) lien reduces the ability of a liable party to avoid its CERCLA liability for site response
costs and helps protect bona fide prospective purchasers from acquiring property with substantial
liabilities attached to it.’ 7
Where a bona fide prospective purchaser acquires a property that is subject to an existing,
perfected CERCLA § 107(1) lien, EPA expects that, in most instances, the CERCLA § 107(1) lien
would be resolved directly with EPA as part of the transaction between the liable owner and the
bona fide prospective purchaser. That is, EPA would be paid the value of the CERCLA § 107(7)
14 In order to qualify as a bona fide prospective purchaser, a person must conduct “all
appropriate inquiry” under CERCLA § 101 (35)(B) and should know of any prior EPA involvement at the
site and the possibility of a windfall lien.
As noted in an earlier EPA guidance, a valuation of the property as if cleanup were
complete should take into account: costs to maintain the remedy, health and safety requirement
compliance costs, limitations on future use during and after cleanup, and superior liens. “Support of
Regional Efforts to Negotiate Prospective Purchaser Agreements (PPAs) at Superfund Sites and
Clarification of PPA Guidance,” Memorandum from Barry Breen, Director, Office of Site Remediation
Enforcement, U.S. EPA and Bruce Gelber, Chief, Environmental Enforcement Section, Environment and
Natural Resources Division, U.S. Department of Justice, January 10, 2001.
16 For CERCLA § 107(/) lien guidance, “Guidance on Federal Superfund Liens,”
Memorandum from Thomas L. Adams, Jr., Assistant Administrator, Office of Enforcement and
Compliance Monitoring, September 22, 1987; “Supplemental Guidance on Federal Superfund Liens,”
Memorandum from William A. White, Enforcement Counsel, Office of Enforcement/Superfund, and
Bruce M. Diamond, Director, Office of Waste Programs Enforcement, July 29, 1993.
‘ While EPA could still maintain a CERCLA § 107 action against the seller, EPA’s ability
to collect from that party may be diminished if the seller’s only and/or most valuable asset is the property.
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lien when the bona fide prospective purchaser acquires the property from the seller. If the
CERCLA § 107(1) lien is not resolved as part of the property sale, and if EPA has unreimbursed
cleanup costs, EPA may subsequently seek enforcement of the CERCLA § 107(1) lien against the
property during the bona fide prospective purchaser’s ownership. Assuming the price of the
property is reduced in recognition of EPA’s existing lien on the property, absent enforcement of
the CERCLA 107(1) lien, the bona fide prospective purchaser could reap a windfall based on
EPA’s past cleanup activities at the site. The following example illustrates EPA’s approach
where there is an existing CERCLA § 107(1) lien.
EXAMPLE: EPA spends $1,000,000 cleaning up a property and increases the value of
the property from $2,000,000 to $2,500,000. EPA perfects a CERCLA § 107(l) lien on
the property. A current liable ownerf operator then sells the property to a bona fide
prospective purchaser at a reduced value of $1,500,000, reflecting EPA’s lien
encumbrance.
Because the bona fide prospective purchaser bought at the reduced purchase price that
reflects EPA’s existing CERCLA § 107(1) lien, to avoid a windfall to the bona fide
prospective purchaser, EPA could seek from the bona fide prospective purchaser the
$1,000,000 reflecting the value of the pre-existing CERCLA § 107(1) lien on the property
through: (1) an in rem action against the property; or (2) settlement with the bona fide
prospective purchaser.
B. Vehicles for Addressing Windfall Lien Liability Concerns
1. Comfort/Status Letters for Situations Where EPA Will Generally Not
Pursue a Windfall Lien
EPA intends this policy to limit the need for EPA involvement in private real estate
transactions by setting forth the Agency’s enforcement discretion approach to implementation of
the windfall lien provision, CERCLA § 107(r). However, there may be situations where it will
be appropriate for EPA to provide more site-specific information to interested parties. EPA’s
“Policy on Issuance of Comfort/Status Letters” identifies the circumstances where it is
appropriate to provide a “comfort/status” letter to facilitate Brownfields redevelopment.’ 8 The
Comfort/Status Letter policy recognizes that there are instances where concerns over Superfund
liability can impede Brownfields redevelopment and that providing an interested party with such
a letter can be appropriate if “it may facilitate the cleanup and redevelopment of brownfields,
where there is the realistic perception or probability of incurring Superfund liability, and where
there is no other mechanism available to adequately address the party’s concerns.” 62 Fed. Reg.
at 4,624. EPA developed four sample comfort/status letters for addressing some common
18 “Policy on the Issuance of Comfort/Status Letters,” Memorandum from Steven A.
Herman, Assistant Administrator, Office of Enforcement and Compliance Assurance, November 8, 1996;
reprinted at 62 Fed. Reg. 4,624 (Jan. 30, 1997) (hereinafter “Comfort/Status Letter policy”).
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inquiries regarding contaminated properties. Comfort/status letters have generally provided a
quick and inexpensive method for facilitating property reuse.’ 9
As noted above, EPA intends this policy, by identifying situations where EPA will
generally i Q pursue a windfall lien, to greatly mitigate the need for site specific responses in
most instances. However, there may be site-specific circumstances where it may be appropriate
for Regions to provide a comfort/status letter consistent with EPA’s Comfort/Status Letter
policy. Of course, where there has been no federal response action at a site, there will be no
windfall lien, and no need for a comfort/status letter or other document from EPA regarding the
windfall lien provision in order to facilitate the sale of the property. 2 °
For properties “that have been archived and removed from the CERCLIS inventory of
Superfund sites,” a “No Current Superfund interest Letter” may be appropriate. 62 Fed. Reg.
4,625. This letter lets a party know that EPA does not anticipate taking any further response
action, including enforcement action, and why. 2 ’
A “Federal Superfund Interest Letter” may be appropriate where EPA has incurred some
response costs, but will most likely seek to perfect a windfall lien (s Section II1.A.I.b.(l)-
(6), above). The Federal Superfund interest Letter can be used to provide an interested party
with EPA’s view regarding the application of an EPA Superfund policy to “a party’s particular
set of circumstances.” j . at 4,626. 22 This type of comfort/status letter can be used for sites that
are in CERCLIS, sites undergoing a federal removal or remedial action, and/or sites where EPA
has or will incur response costs. To the extent a party falls under the circumstances identified in
19 “U.S. EPA’s Prospective Purchaser Agreements and Comfort/Status Letters: How
Effective Are They? Findings, Benefits, and Suggested improvements, Final Report,” U.S. EPA, Office
of Site Remediation Enforcement, Publication # 330R00002, September 29, 2000, at pp. 14, 17.
20 EPA’s Comfort/Status Letter policy does, however, identify a type of comfort/status
letter for use in such situations (i.e., a “No Previous Federal Superfund interest Letter”). Moreover,
where a State has been or will be the lead for day-to-day activities and oversight of a response action,
Regions should handle responses consistent with the Comfort/Status Letter policy (e.g., use of a “State
Action” comfort/status letter).
2% EPA archives a site if: “a) no contamination was found at the site; b) the site, while
contaminated, neither met the criteria for inclusion on the NPL nor required any EPA response action; or
c) contamination was removed quickly without the need to place the site on the NPL; and d) EPA has
completed its cost recovery action for the site.” 62 Fed. Reg. at 4,625.
22 This memorandum does not supercede the Comfort/Status Letter policy, but merely
identifies those circumstances where application of that policy may be appropriate in the windfall lien
context. in issuing a comfort/status letter, EPA will continue to apply the guidelines provided in the
Comfort/Status Letter policy and recommends review of that policy in instances where Regions are
considering a comfort/status letter to address a party’s windfall lien concerns.
13
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this memorandum where EPA will generally not seek to perfect a windfall lien, a Federal
Superfund Interest Letter could be provided, if appropriate, with a reference to this policy and
language indicating EPA does not intend to file a windfall lien. Use of such letters should,
however, be limited to:
situations where the requesting party prov.ides information that 1) aproject found to be in
the public interest (e.g., an economic redevelopment project) is hindered or the value of a
property is affected by the potential for Superfund liability, and 2) there is no other
mechanism available to adequately address the party’s concerns other than a letter from
EPA with a statement regarding the applicability of a specific Superfund policy, statutory
provision or regulation.
14. EPA is providing a sample Federal Superfund Interest Letter for CERCLA § 107(r) Windfall
Liens as Attachment A. Where a State has been or will be involved at a site, EPA should
coordinate with the State prior to issuing such a Comfort/Status letter.
2. Windfall Lien Resolution Documents for Situations Where EPA is Likely
to Pursue a Windfall Lien
The Agency anticipates that in those situations where EPA has or will have unrecovered
cleanup costs, a bona fide prospective purchaser will reap a windfall, and EPA is’ likely to pursue
a windfall lien, a bona fide prospective purchaser may want to satisfS’ any existing and potential
future windfall lien prior to or relatively coincident with their acquisition. Congress specifically
provided EPA with the authority to resolve windfall lien exposure. CERCLA § 107(r)(2) states
that the United States “shall have a lien on the facility, or may by agreement with the owner,
obtain from the owner a lien on any other property or other assurance ofpayment satisfac:oiy to
the Administrator, for the unrecovered response costs.” Thus, Congress explicitly recognized
that EPA can address the potential windfall through an agreement with the bona flde prospective
purchaser at or around the time of the transaction. 23 EPA and DOJ have developed a model
document to facilitate resolution of windfall liens that is attached hereto as Attachment B.
IV. CONCLUSION
In identifying how EPA generally intends to exercise its enforcement discretion in
deciding when and when not to perfect a windfall lien, as well as describing the Agency’s
approach to valuing a windfall lien when perfected, it is EPA’s intent to achieve national
23 The Brownfield Amendments allow EPA to address the windfall after a purchase takes
place, without the bona fide prospective purchaser becoming liable as an owner under CERCLA §
I 07(a)(1). Prior to the Brownfield Amendments, EPA addressed CERCLA liability concerns of
purchasers through Prospective Purchaser Agreements (PPAs), which were not available after the
purchase of the property. Thus, the Brownfield Amendments help alleviate the timing issues surrounding
coordination of the real estate transaction with the signing of a PPA. May 2002 Bona Fide
Prospective Purchaser Memorandum.
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consistency and provide an understanding of EPA’s implementation approach. Consistent with
past EPA policies and practices, EPA is also identifying mechanisms that can be used to resolve
CERCLA liability concerns.
As noted at the outset, EPA and DOJ are issuing this memorandum as an interim policy
and will use the experienoe gained in implementation to decide whether to revise or amend this
policy in the future. Anyone interested in providing comments on this policy, or its
implementation, is invited to do so by submitting comments to EPA or DOJ.
If you have any questions or comments regarding this policy, please contact, at EPA,
Greg Madden at (202) 564-4229 or at madden.gregorv@epa.gov ; if you have site-specific
implementation questions, please contact Helen Keplinger at (202) 564-4221 or at
ke linger.helen( epa.gov . You can also contact, at DOJ, Henry Friedman at (202) 515-5268 or
at henry.friedman@usdoi.gov or Alan Tenenbaum at (202) 514-5409 or at
alan.tenenbaum( usdoi.gov .
V. DISCLAIMER
This memorandum is intended solely for the guidance of employees of EPA and the
Department of Justice and it creates no substantive rights for any persons. It is not a regulation
and does not impose legal obligations. EPA and DOJ will apply the guidance only to the extent
appropriate based on the facts.
Attachments
cc: Brownfields Amendments Implementation Steering Committee
Paul Connor (OSRE)
Sandra Connors (OSRE)
Thomas Dunne (OSWER)
Benjamin Fisherow (DOJ)
Linda Garczynski (OSWER)
Steve Luftig (OSWER)
Earl Salo (OGC)
EPA Brownfields Landowner Liability Protection Subgroup
15
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Attachment A
Sample Federal Superfund Interest Letter for CERCLA § 107(r) Windfall Lien
tlnsert Addressee] -
Re: llnsert name or description of property)
Dear linsert name of party):
I am writing in response to your correspondence of tinsert date] concerning the property
referenced above. My response is based upon the facts presently known to the United States
Environmental Protection Agency (“EPA”).
As you may know, the above-referenced property is ocated within or near the linsert
name of CERCLIS site.J EPA is currently taking linsert description of any action that EPA
is taking or plans to take and any contamination problem.)
IFor situations when a party provides information showing that 1) a project found to be in
the public interest is hindered or the value of a property is affected by the potential for a
CERCLA § 107(r) windfall lien, 2) there is no other mechanism available to adequately
address the party’s concerns, and 3) it falls within one of the circumstances identified in
the Windfall Lien Policy where EPA would generally not perfect a windfall lien, insert the
following]
The [ date] “EPA Interim Enforcement Discretion Policy Concerning “Windfall Liens”
Under Section 107(r) of CERCLA” (“Windfall Lien Policy”), provides that EPA, in an exercise
of its enforcement discretion, will generally not perfect a CERCLA § 107(r) windfall lien when
the conditions and criteria described in the Windfall Lien Policy are met. Based upon the
information currently available to EPA, EPA believes that the Windfall Lien Policy applies to
Iyou/your situation]. Specifically, EPA believes that, consistent with the Windfall Lien Policy,
your situation falls under the jinsert reason set forth in the guidance] section of the guidance
and EPA does not intend to file a windfall lien on the property loptional - depending on which
reason for not filing windfall lien may want to include the following: unless new
information not previously known to EPA is discoveredi. I am enclosing a copy of the
Windfall Lien Policy for your review.
EPA hopes that the above information is useful to you. JOptional—In addition, we have
included a copy of our latest fact sheet for the (insert name of site.)1 Further, we direct your
attention to the linsert location of site local records repository] at which EPA has placed a
copy of the Administrative Record for this site. This letter is provided solely for informational
Sample Federal Superfiend interest Letter
For CERCLA § 107(r) Windfall Lien I Attachment A
-------
purposes and does not provide a release from CERCLA liability. If you have any questions, or
wish to discuss this letter, please feel free to contact insert EPA contact and address].
Sincerely,
Regional Contact
Enclosure
Sample Federal Supe,fund interest Lelier
For CERCLA § 10 7(r) Windfall Lien 2 Attachment A
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Attachment B
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
- REGION
iN THE MATTER OF: [ name )
of Superfund Site] )
) [ Docket Number]
) Agreement for Release and Waiver
) of Lien, CERCLA § 107(r)
UNDER THE AUTHORITY OF THE )
COMPREHENSIVE RESPONSE, ) [ Insert Settling Purchaser’s Name]
COMPENSATION, AND LIABILITY ACT, )
42 U.S.C. § 9601,ei seq. )
I. INTRODUCTION
IThe purpose of this model is to provide a sample document which may be used to
release and waive any windfall lien, arising under Section 107(r) of CERCLA with respect
to a bona tide prospective purchaser, through the payment ‘of cash or other appropriate
consideration. This model assumes that in most cases a Section 107(r) lien has not been
perfected. Where the Section 107(r) lien has been perfected, it will be necessary to execute
an additional document to file in the recorder’s office where the lien was perfected. There
may be a situation where it will also be appropriate to address a perfected Section 107(l) lien
through this model, and additional language must be included for that purpose. The
authority to enter Agreements for Release and Waiver of Lien, CERCLA § 107(r), has been
delegated to the Regional Administrators. Exercise of this authority requires consultation
with OECA/OSRE.J This Release and Waiver of Lien Agreement (“Agreement”) is made and
entered into by and between the Environmental Protection Agency (“EPA”) and ____________
Model Agreemenifor Release and Waiver
of Lien, CERCLA § 107(r)
I
Attachment B
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[ insert name of the Settling Purchaser] (“Name”) (collectively, the “Parties”).
This Agreement is entered into pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (“CERCLA”), 42 U.S.C. § 9601, el seq.
IProvide introductory information, consistent with the Definitions and Statement of
Facts, about the property to which the release and waiver of lien will be applicable
(“Property”) including, name, address, location, and description of Property, and also
provide information about the Settling Purchaser, including name, address and corporate
status, if applicable. If Property is part of a larger, or smaller, Site (“Site”) explain the
relationship of Property to Site and include size and description of each.I
The Parties agree to undertake all actions required by the terms and conditions of this
Agreement. The purpose of this Agreement is to settle and resolve, subject to Section VIII,
Reservation of Rights, the lien against the Property under Section 107(r) of CERCLA, 42 U.S.C.
§ 9607(r).
The release and waiver of this lien, in exchange for provision by the Settling Purchaser to
EPA of consideration satisfactory to the Administrator, is in the public interest.
II. DEFINITIONS
1. “Bona Fide Prospective Purchaser” or “BFPP” shall mean a person as described in
CERCLA § 101(40).
2. “EPA” shall mean the United States Environmental Protection Agency and any
successor departments or agencies of the United States.
3. “Parties” shall mean EPA and ____________________
4. “Property” shall mean the parcel, encompassing approximately — acres, located at
Model Agreemenifor Release and Waiver
of Lien, CERCLA § 107(r) 2 Attachment B
-------
[ address] in City, _____________, State or Commonwealth of__________________ , which is
described in Exhibit 1, and shown on the map included as Exhibit_ to this Agreement.
5. “Settling Pwchaser” shall mean _______________________
6. “Site” shall mean the ________________ Superfund Site.
7. “United States” shall mean the United States of America, including its departments,
agencies, and instrumentalities.
HI. STATEMENT OF FACTS
7. llnclude only those facts relating to the Property that are relevant to the lien
being released and waived, including how response costs incurred or to be incurred gave
rise to a lien. Avoid adding information that relates only to actions or parties that are
outside of this Agreement.]
IV. PAYMENT
8. In consideration of and in exchange for EPA’s release and waiver of any lien it has or
may have under Section 107(r) of CERCLA with respect to the Property, Settling Purchaser
agrees, within ____ days of the effective date of this Agreement hf EPA is resolving a perfected
lien, payment may instead need to be made at the closing date], to pay to EPA the sum of
$ . Settling Purchaser shall make all payments required by this Agreement in the
form of a certified check or checks made payable to “EPA Hazardous Substance Superfiind,”
referencing the EPA Region, EPA Docket number, and Site/Spill ID# , [ DOJ case
number , if applicable] and name and address of Settling Purchaser. Payment shall
be sent to [ insert Regional Superfund Lockbox address where payment should be sent]. Notice of
Model Agreemenifor Release and Waiver
of Lien, CERCLA § 107(r) 3 Attachment B
-------
payment shall be sent to the EPA Region — Financial Management Officer [ insert address]’.
9. Amounts due and owing pursuant to the terms of this Agreement, but not paid in
accordance with the terms of this Agreement, shall accrue interest at the rate established pursuant
to Section 07(a) of CERCLA, 42 U.S.C. § 9607(a), compounded on an annual basis.
V. RELEASE AND WAIVER OF SECTION 107(r) LIEN
10. Subject to the Reservation of Rights in Section Vifi of this Agreement, upon payment
of the amount specified in Section IV, Payment, EPA agrees to release and waive any lien it may
have on the Property now and in the future under Section 107(r) of CERCLA, 42 U.S.C. 9607(r),
for costs incurred or to be incurred by EPA in responding to the release or threat of release of
hazardous substances that were disposed of at the Site before Settling Purchaser acquired
ownership of the Property.
VI. ACCESS/NOTICE IINSTITUTIONAL CONTROLS
11. IWhether or not to add this Section VI, Access/Notice/Institutional Controls, is
within the Region’s discretion based upon site-specific considerations. Adding this Section
gives the Region the option to go into more detail than is obtained by relying upon the statute
alone. Once the cleanup is complete, the provisions requiring the Settling Purchaser to
This model is written for payment of cash only, but there may be a situation where
performing work or providing other assurance of payment satisfactory to the Administrator would
be appropriate. If work or other assurance of payment is accepted as consideration, other sections
of this model would also need to be revised as appropriate. Where the Section 107(r) lien is
resolved prior to completion of site work, there may be situations where a Special Account should
be established to help fund future work. Whether to establish a Special Account should be worked
out in advance of receipt of any money. The following language may be added to the Section IV,
Payment: [ The total amount paid by [ Settling Purchaser name] pursuant to this Agreement shall be
deposited into [ Site name] Special Account within the EPA Hazardous Substance Superftmd to be
retained and used to conduct or finance response actions at or in connection with the Site, or transferred
by EPA to the EPA Hazardous Substance Superfund.]
Model Agreemenifor Release and Waiver
of Lien, CERCLA § 107(r) 4 Attachment B
-------
“ensure” access may no longer be necessary and may be allowed to expire in appropriate
situations. J Settling Purchaser agrees to provide EPA, its authorized officers, employees,
r presentatives, a!Id all other persons performing response actions under EPA oversight, an
irrevocable right of access at all reasonable times to the Property and to any other property to -
which access is required for the implementation of response actions at the Property, to the extent
access to such other property is controlled by Settling Purchaser, for the purposes of performing
and overseeing response actions at the Property under federal law. EPA agrees to provide
reasonable notice to Settling Purchaser of the timing of response actions to be undertaken at the
Property. Notwithstanding any provision of this Agreement, EPA retains all of its access
authorities and rights, including enforcement authorities related thereto, under CERCLA, and the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C.
§ 6901 (“RCRA”), el seq.
12. Settling Purchaser shall submit to EPA for review and approval a notice to be filed with
the Recorder’s Office br Registry of Deeds or other appropriate officej, __________________
County, State or Commonwealth of , which shall provide
notice to all successors-in-title that the Property is part of the Site, [ that EPA filed a lien under
Section 107(r) of CERCLA, instrument Number __________, on Date 1 [ that EPA
selected a remedy for the Site on ____________, and that potentially responsible parties have
entered a Consent Decree requiring implementation of the remedy] [ that EPA is performing/
performed a response action at the Site], and that EPA has released and waived its Section 107(r)
lien on the Property in this Agreement. [ Such notice(s) shall identify the United States District
Court in which the Consent Decree was filed, the name and civil action number of the case, and the
Model Agreemenifor Release and Waiver
of Lien, CERCLA § 107(r) 5 Attachment B
-------
date the Consent Decree was entered by the Court.] The Settling Purchaser shall record the
notice(s) within _____days of EPA’s approval of the notice(s). The Settling Purchaser shall
provide EPA with a certified copy of the recorded notice(s) Within -. days of recording such
notice(s). 2
13. Settling Purchaser shall implement and comply with any land use restrictions and
institutional controls on the Property in connection with a response action. 3
14. For so long as the Settling Purchaser is an owner or operator of the Site, Settling
Purchaser shall ensure that assignees, successors in interest, and any lessees, sublessees and other
parties with rights to use the Property shall provide access and cooperation to EPA, its authorized
officers, employees, representatives, and all other persons performing response actions under EPA
oversight. Settling Purchaser shall ensure that assignees, successors in interest, and any lessees,
sublessees, and other parties with rights to use the Property implement and comply with any land
use restrictions and institutional controls on the Property in connection with a response action.
15. (Any requirement concerning institutional controls must survive property
transfer, unless the particular institutional control is for a specifically limited period of time.]
Upon sale or other conveyance of the Property or any part thereof, Settling Purchaser shall require
that each grantee, transferee or other holder of an interest in the Property or any part thereof shall
provide access and cooperation to EPA, its authorized officers, employees, representatives, and all
2 Regions negotiating Lien Release and Waiver Agreements for Sites that may be
owned by one person but controlled by another should discuss appropriate language for this
Paragraph with Headquarters.
Where appropriate, Regions should consider defining institutional controls, in
particular at properties where institutional controls have been specifically set forth in, for example,
a Record of Decision (ROD).
Model Agreemenifor Release and Waiver
of Lien, CERCLA § 107(r) 6 Attachment B
-------
other persons performing response actions under EPA oversight. Settling Purchaser shall ensure
that each grantee, transferee or other holder of an interest in the Property or any part thereof shall
impIemen and comply with any land use restrictions and instittitional controls on the PrOperiy in -
connection with a response action.
16. The Settling Purchaser shall provide a copy of this Agreement to any current lessee,
sublessee, and other party with rights to use the Property as of the effective date of this Agreement.
VII. BFPP STATUS
17. Settling Purchaser shall take and maintain all steps necessary to achieve and maintain
status as a “Bona Fide Prospective Purchaser” as that term is defined in Section 101(40) of
CERCLA 42 U.S.C. § 9601(40), for the Property which is the subject of this Agreement, by
complying with all of the requirements for a Bona Fide Prospective Purchaser as set forth in
Section 101(40), including, without limitation, the exercise of “appropriate care” by taking
“reasonable steps” as set forth in Section 101 (40)(D), 42 U.S.C. § 9601 (40)(D), and the
implementation of and compliance with any land use restrictions and institutional controls as set
forth in Section lOl(40)(F), 42 U.S.C. § 960 l(40)(F) for so long as Settling Purchaser retains any
ownership interest in the Property.
VIII. RESERVATION OF RIGHTS
18. This Agreement does not release and waive or compromise any right of EPA or the
United States other than the release and waiver by EPA of its right to assert or perfect a windfall
lien pursuant to Section 107(r) of CERCLA, 42 U.S.C. § 9607(r), for costs incurred or to be
incurred by EPA in responding to the release or threat of release of hazardous substances that were
disposed of at the Site before Settling Purchaser acquired ownership of the Property, subject to
Model Agreement for Release and Waiver
of Lien, CERCLA 107(r) 7 Attachment B
-------
receipt of the payment [ work] from Settling Purchaser as provided in Section IV. EPA and the
United States reserve, and this Agreement is without prejudice to, all rights against Settling
Purchaser with respect to all other matters, includingbut not limited to;the following:
(a) claims based on a failure by Settling Purchaser, assignees, successors in interest or any
lessees, sublessees or other parties with rights to use the Property to meet a requirement of this
Agreement, including but not limited to Section IV, Payment, and Section VI,
Access/Notice/Institutional Controls;
(b) liability for damages for injury to, destruction of, or loss of natural resources, and for
the costs of any natural resource damage assessment incurred by federal agencies other than EPA;
(c) liability under CERCLA, including Sections 106 and 107, 42 U.S.C. § 9606 and 9607,
which arises due to failure of Settling Purchaser or assignees, successors in interest or any lessees,
sublessees, or other parties with rights to use the Property to comply with Section 101(40), 42
U.S.C. § 960 1(40); and
(d) liability under CERCLA resulting from the release or threat of release of hazardous
substances that were disposed of at the Site after the Settling Purchaser acquired ownership of the
Property.
19. Nothing in this Agreement is intended as a release and waiver for any claim or cause of
action, administrative or judicial, civil or criminal, past or future, in law or in equity, other than the
release and waiver of the Section 107(r) lien in Section V, which the United States may have
against any person, firm, corporation or other entity not a party to this Agreement. The United
States reserves the right to compel potentially responsible parties to perform or pay for response
actions at the Site.
Model Agreemenifor Release and Waiver
of Lien, CERCLA § 107(r) 8 Attachment B
-------
20. Nothing in this Agreement shall in any way restrict or limit the nature or scope of
response actions which may be taken or be required by EPA in exercising its authority under
federal law. Settling Purchaser acknowledges that it is purchasing Property where response actions
may be required.
IX. PARTIES BOUND
21. This Agreement shall apply to and be binding upon EPA, and shall apply to and be
binding upon the Settling Purchaser and Settling Purchaser’s [ heirs] successors and assigns. Each
signatory of a Party to this Agreement represents that he or she is fully authorized to enter into the
terms and conditions of this Agreement and to legally bind such Party. Any change in ownership or
corporate status involving the Property addressed shall in no way alter the release and waiver of the
lien under this Agreement.
X. WAIVER OF CLAIM FOR REIMBURSEMENT
22. Settling Purchaser waives and shall not assert any claim for reimbursement from the
United States with respect to the payment required by Section IV, Payment, of this Agreement,
including but not limited to any direct or indirect claim for reimbursement of such payment from
the Hazardous Substance Superfund (established pursuant to the Internal Revenue Code, 26 U.S.C.
§ 9507) through CERCLA Sections 1 06(b)(2), 107, 111, 112, 113, or any other provision of law, or
from any department, agency or instrumentality of the United States under CERCLA Sections 107
or 113. Nothing in this Agreement shall be deemed to constitute preauthorization of a claim within
the meaning of Section 111 of CERCLA, 42 U.S.C. § 9611, or 40 C.F.R. § 300.700(d).
XI. PAYMENT OF COSTS
23. If the Settling Purchaser fails to comply with the terms of this Agreement, including,
Model Agreement for Release and Waiver
of Lien, CERCLA § 107(r) 9 Attachment B
-------
but not limited to, the provisions of Section IV, Payment, it shall be liable for all litigation and
other enforcement costs incurred by the United States to enforce this Agreement or otherwise
obtain compliance: - -
XII. DISCLAIMER
24. This Agreement in no way constitutes a finding by EPA as to the risks to human health
and the environment which may be posed by contamination at the Property nor constitutes any
representation by EPA that the Property is fit for any particular purpose.
XIII. EFFECTIVE DATE
25. The effective date of this Agreement shall be the date upon which EPA issues written
notice to the Settling Purchaser that EPA has fully executed the Agreement.
XIV. ATTORNEY GENERAL APPROVAL
26. IWhere the United States’ total site costs are under $500,000, Regions need not
seek pre-approval from the AG] The Attorney General of the United States or his designee has
issued prior written approval of the settlement embodied in this Agreement.
Model Agreement for Release and Waiver
of Lien, CERCLA § 107(r) 10 Attachment B
-------
IT IS SO AGREED:
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BY:
Regional Administrator Date
Region —
IT IS SO AGREED:
BY:
Name Date
Model Agreemenifor Release and Waiver
of Lien, CERCLA § 107(r) 11 Attachment B
-------
Model Agreement for Release and Waiver
of Lien, CERCLA § 107(r) 12 Attachment B
-------
Model Agreement for Release and Waiver
of Lien, CERCLA § 107(r) 13 Attachment B
-------
All Appropriate Inquiries
Final Rule
WHAT IS “ALL APPROPRIATE INQUIRIES”?
“All appropriate inquiries” is the process of evaluating a
property’s environmental conditions and assessing potential
liability for any contamination.
WHY IS EPA ESTABLISHING STANDARDS FOR
CONDUCTING ALL APPROPRIATE INQUIRIES?
The 2002 Brownflelds Amendments to CERCLA require
EPA to promulgate regulations establishing standards and
practices for conducting all appropriate inquiries.
STAKEHOLDER COLLABORATION
A Negotiated Rulemaking Committee consisting of
25 diverse stakeholders developed the proposed rule.
Following publication of the proposed rule, EPA provided
for a three month public comment period. EPA received
over 400 comments from interested parties. Based upon a
review and analysis of issues raised by commenters, EPA
developed the final rule.
WHEN IS THE RULE EFFECTIVE?
The final rule is effective on November 1, 2006—one
year after being published in the Federal Register. Until
November 1, 2006, both the standards and practices
included in the final regulation and the current interim
standards established by Congress for all appropriate
inquiries (ASTM E1527-0O) will satisfy the statutory
requirements for the conduct of all appropriate inquiries.
WHO IS AFFECTED?
The final All Appropriate Inquines requirements are
applicable to any party who may potentially claim
protection from CERCLA liability as an innocent
landowner, a bona fide prospective purchaser, or a
contiguous property owner. Parties who receive grants
under the EPA’s Brownfields Grant program to assess
and characterize properties must comply with the All
Appropriate Inquiries standards.
WHEN MUST ALL APPROPRIATE INQUIRIES BE
CONDUCTED?
All appropriate inquiries must be conducted or updated
within one year of the date of acquisition of a property. If
all appropriate inquiries are conducted more than 180 days
prior to the acquisition date, certain aspects of the inquiries
must be updated.
WHAT SPECIFIC AcrlvrnEs DOES ThE RULE
REQUIRE?
Many of the inquiry’s activities must be conducted by,
or under the supervision or responsible charge of, an
individual who qualifies as an environmental professional
as defined in the final rule.
The inquiry of the environmental professional must
include:
• interviews with past and present owners, operators and
occupants;
• reviews of historical sources of information;
• reviews of federal, state, tribal and local government
records;
• visual inspections of the facility and adjoining properties;
• commonly known or reasonably ascertainable
information; and
• degree of obviousness of the presence or likely presence
of contamination at the property and the ability to detect
the contamination.
Additional inquiries that must be conducted by or for the
prospective landowner or grantee include:
• searches for environmental cleanup liens;
• assessments of any specialized knowledge or experience
of the prospective landowner (or grantee);
• an assessment of the relationship of the purchase price to
the fair market value of the property, if the property was
not contaminated; and
• commonly known or reasonably ascertainable
information.
-------
The final All Appropriate Inquiries rule does not differ
significantly from the ASTM El 527-00 standard. The
rule includes all the main activities that previously were
performed as part of environmental due diligence such
as site reconnaissance, records review, interviews, and
documentation of recognized environmental conditions.
The final rule, however, enhances the inquiries by
extending the scope of a few of the environmental due
diligence activities. In addition, the final rule requires that
significant data gaps or uncertainties be documented.
Under the final All Appropriate Inquiries rule, interviewing
the subject property’s current owner or occupants is
mandatoiy. The ASTM El 527-00 standard only required
that the environmental professional make a reasonable
attempt to conduct such interviews. In addition, the final
rule includes provisions for interviewing past owners and
occupants of the subject property, if necessary to meet
the objectives and performance factors. Under the ASTM
El 527-00 standard, the environmental professional had
to inquire about past uses of the subject property when
interviewing the current property owner.
The final rule also requires an interview with an owner of a
neighboring property if the subject property is abandoned.
The ASTM El 527-00 standard included such interviews at
the environmental professional’s discretion.
The final rule does not specif ’ who is responsible for
performing record searches, including searches for use
limitations and environmental cleanup liens. The ASTM
E1527-00 standard specified that these record searches are
the responsibility of the user and required that the results be
reported to the environmental professional.
Unlike the ASTM El 527-00 standard, the final rule
requires the examination of tribal and local government
records and more extensive documentation of data gaps.
The final rule includes specific documentation requirements
if the subject property cannot be visually inspected.
The ASTM El527-00 standard did not include such
requirements.
To ensure the quality of all appropriate inquiries, the
final rule includes specific educational and experience
requirements for an environmental professional.
The final rule defines an environmental professional as
someone who possesses sufficient specific education,
training, and experience necessary to exercise professional
judgment to develop opinions and conclusions regarding
conditions indicative of releases or threatened releases on,
at, in, or to a property, sufficient to meet the objectives and
performance factors of the rule, and has: (1) a state or tribal
issued certification or license and three years of relevant
full-time work experience; or (2) a Baccalaureate degree or
higher in science or engineering and five years of relevant
full-time work experience; or (3) ten years of relevant full-
time work expenence.
For more information on the environmental professional
definition, please see EPA’s Fact Sheet on the Definition of
an Environmental Professional.
WILL THER BE AN UPDATED ASTM PHASE I
SITE ASSESSMENT STANDARD?
Yes. ASTM International updated its El 52 7-00 standard,
“Standard Practice for Environmental Site Assessments:
Phase I Environmental Site Assessment Process.” EPA
establishes that the revised ASTM El 527-05 standard is
consistent with the requirements of the final rule for all
appropriate inquiries and may be used to comply with the
provisions of the rule.
CONTACT INFORMATION
Patricia Overmeyer
U.S. EPA’s Office of Brownfields Cleanup and
Redevelopment
(202) 566-2774
Ovenneyer.Patricia epa.gov
Also, please see the U.S. EPA’s web site at
www.epa.gov/brownfields for additional information.
Brown fields Fact Sheet
Ml Final Rule
Solid Waste
and Emergency
Response (5105)
EPA 560-F-05-240
October2005
wwid.epa.gov/brown fields!
How DOES ThE FINAL AAI RULE DIFFER FROM WHO QUALIFIES AS AN ENVIRONMENTAL
THE INTERIM STANDARD? PROFESSIONAL?
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Tuesday,
November 1, 2005
Part ifi
Environmental
Protection Agency
40 CFR Part 312
Standards and Practices for All
Appropriate Inquiries; Final Rule
0
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66070 Federal Register/Vol. 70, No. 210 / Tuesday, November 1, 2005 I Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 312
ISFUND-2004-0001; FRL—7989-7]
RIN 2050-AFO4
Standards and Practices for All
Appropriate Inquiries
AGENCY: Environmental Protection
Agency.
ACTION: Final rule.
SUMMARY: The Environmental Protection
Agency (EPA) today is establishing
federal standards and practices for
conducting all appropriate inquiries as
required under sections l01(35)(B)(ii)
and (iii) of the Comprehensive
Environmental Response,
Compensation, and Liability Act
(cERCLA). Today’s final rule establishes
specific regulatory requirements and
standards for conducting all appropriate
inquiries into the previous ownership
and uses of a property for the purposes
of meeting the all appropriate inquiries
provisions necessary to qualify for
certain landowner liability protections
under CERCLA. The standards and
practices also will be applicable to
persons conducting site characterization
and assessments with the use of grants
awarded under CERCLA section
104(k)(2)(B).
DATES: This final rule is effective
November 1, 2006.
ADDRESSES: EPA established a docket
for this action under Docket ID No.
SFUND—2004—0001. All documents in
the docket are listed in the EDOCKET
index at http://www.epa.gov/edocket.
Although listed in the index, some
information is not publicly available,
i.e., information labeled Confidential
Business Information (CBI) or other
information whose disclosure is
restricted by statute. Certain other
material, such as copyrighted material,
is not placed on the Internet and will be
publicly available only in hard copy
form. Publicly available docket
materials are available either
electronically in EDOCKET or in hard
copy at the EPA Docket Center, EPA
West Building, Room B102, 1301
Constitution Ave., NW., Washington,
DC. This docket facility is open from
8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding Federal holidays. The
telephone number for the Public
Reading Room is (202) 566—1744, and
the telephone number for the OSWER
Docket is (202) 566—0276.
FOR FURThER INFORMATION CONTACT: For
further information on specific aspects
of today’s rule, contact Patricia
Overmeyer of EPA’s Office of
Brownfields Cleanup and
Redevelopment at (202) 566—2774 or at
overmeyer.patricia@lepa.gov. Mail
inquiries may be directed to the Office
of Brownfields Cleanup and
Redevelopment (5105T), 1200
Pennsylvania Ave. NW., Washington,
DC 20460.
SUPPLEMENTARY INFORMATION:
I. General Information
A. Who Potentially May be Affected by
Today’s Rule?
This regulation may affect most
directly those persons and businesses
purchasing commercial property or any
property that will be used for
commercial or public purposes and who
may, after purchasing the property, seek
to claim protection from CERCLA
liability for releases or threatened
releases of hazardous substances. Under
sectionlOl (35)(B) of CERCLA, as
amended by the Small Business
Liability Relief and Brownfields
Revitalization Act (Pub. L. 107—118, 115
stat. 2356, “the Brownfields
Amendments”) such persons and
businesses are required to conduct all
appropriate inquiries prior to or on the
date on which the property is acquired.
Prospective landowners who do not l
conduct all appropriate inquiries prior
to or on the date of obtaining ownership
of the property may lose their ability to
claim protection from cERCLA liability
as an innocent landowner, bona tide
prospective purchaser, or contiguous
property owner.
In addition, today’s rule will affect
any party who receives a brownflelds
grant awarded under CERCLA section
104(k)(2NB) and uses the grant money to
conduct site characterization or
assessment activities. This includes
state, local and tribal governments that
receive brownfields site assessment
grants for the purpose of conducting site
characterization and assessment
activities. Such parties are required
under CERCLA section 104(k)(2)(B)(ii)
to conduct such activities in compliance
with the standards and practices
established by EPA for the conduct of
all appropriate inquiries. EPA notes that
today’s rule also may affect other parties
who apply for brownfields grants under
the provisions of CERCLA section
104(k), since such parties may have to
qualify as a bona tide prospective
purchaser to ensure compliance with
the statutory prohibitions on the use of
grant funds under Section
104(k)(4)(B)(I). Any party seeking
liability protection as a bona ftde
prospective purchaser, including
eligible brownflelds grantees, must
conduct all appropriate inquiries prior
to or on the date of acquiring a property.
The background document,
“Economic Impacts Analysis for the
Proposed All Appropriate Inquiries
Final Regulation” and the Addendum to
this document provide a comprehensive
analysis of all potentially impacted
entities. These documents are available
in the docket established for today’s
rule. A summary of potentially affected
businesses is provided in the table
below.
Our aim in the table below is to
provide a guide for readers regarding
entities likely to be directly regulated or
indirectly affected by today’s action.
This action, however, may affect other
entities not listed in the table. To
determine whether you or your business
is regulated or affected by this action,
you should examine the regulatory
language amending CERCLA. This
language is found at the end of this
Federal Register notice. If you have
questions regarding the applicability of
this action to a particular entity. consult
the person listed in the preceding
section entitled FOR FURTHER
INFORMATION CONTACT.
Industry category
N S
Manufacturing
31—33
Wholesale Trade
42
Retail Trade
44—45
Finance and Insurance
52
Real Estate
531
Professional. Scientific and Tech
nical Services
541
Accommodation and Food Services
72
Repair and Maintenance
811
Personal and Laundry Services
812
State. Local and Tnbal Govern-
ment
NFA
B. How Can I Get Copies of This
Document and Other Related
In formation?
1. Docket. EPA established an official
public docket for this action under
Docket ID No. SFUND—2004—0001. The
official public docket consists of the
documents specifically referenced in
this action, any public comments
received, and other information related
to today’s action. Although a part of the
official docket, the public docket does
not include Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Documents in the official public docket
are listed in the index list in EPA’s
electronic public docket and comment
system, EDOCKET. Documents may be
available either electronically or in hard
copy. Electronic documents may be
viewed through EDOCKET. Hard copy
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Federal Register! Vol. 70, No. 210/Tuesday, November 1, 2005! Rules and Regulations
66071
documents may be viewed at the EPA
Docket Center, EPA West, Room B102,
1301 Constitution Avenue, NW.,
Washington, DC. The EPA Docket
Center Public Reading Room is open
from 8:30 a.m. to 4:30 p.m., Monday
through Friday, excluding Federal -
holidays. The telephone number for the
Public Reading Room is (202) 566—1744,
and the telephone number for the
OSWER Docket is (202) 566—0276.
2. Elect mnic Access. You may access
this Federal Register document
electronically through the EPA Internet
under the “Federal Register” listings at
http://www.epa.gov/fedrgstr.
An electronic version of the public
docket also is available through EPA’s
electronic public docket and comment
system. EDOCKET. You may use
EDOCKET at http://www epa.gov/
edocket/to view public comments,
access the index listing of the contents
of the public docket, and access those
documents in the public docket that are
available electronically. Once in the
system, select “search,” then key in the
appropriate docket identification
number.
Certain types of information will not
be placed in EDOCKET. Information
claimed as CBI and other information
whose disclosure is restricted by statute,
which is not included in the official
public docket, will not be available for
public viewing in EPA’s electronic
public docket. EPA’s policy is that
copyrighted material will not be placed
in EPA’s electronic public docket but
will be available only in printed, paper
form in the official public docket.
Docket materials that are not available
electronically may be viewed at the
docket facility identified above.
Contents of Today’s Rule
I. Statutory Authority
II Background
A. What is the Intent of Today’s Rule?
B. What is “All Appropriate Inquiries?”
C. What were the Previous Standards for
All Appropnate Inquiries?
D. What are the Liability Protections
Established Under the Brownfields
Amendments?
E What Criteria Did Congress Establish for
the All Appropriate Inquiries Standard?
Ill. Summary of Comments and Changes
From Proposed Rule to Final Rule
IV Detailed Description of Today’s Rule
A What is the Purpose end Scope of the
Rule?
B To Whom is the Rule Applicable?
C. Does the Final Rule Include Any New
Reporting or Disclosure Obligations?
D What are the Final Documentation
Requirements?
E What are the Qualifications for an
Environmental Professional?
F. References
C What is Included in “All Appropriate
Inquiries 7 ”
H. Who is Responsible for Conducting the
All Appropriate Inquiries?
I. When Must All Appropriate Inquiries be
Conducted?
J. Can a Prospective Landowner Use
Information Collected for Previous
Inquines Completed for (lie Same
Property?
K. Can All Appropriate Inquiries be
Conducted by One Party and Transferred
to Another Party?
L. What Are the Objectives and
Performance Factors for the All
Appropriate Inquiries Requirements 7
M. Whet are Institutional Controls?
N How must Data Gaps Be Addressed in
the Conduct of All Appropriate
Inquiries?
0. Do Small Quantities of Hazardous
Substances That Do Not Pose Threats to
Human Health and the Environment
Have to Be Identified in the Inquiries ’
P What are the Requirements for
Interviewing Past and Present Owners,
Operators, and Occupants?
Q Whet are the Requirements for Reviews
of Historical Sources of Information?
R What are the Requirements for
Searching for Recorded Environmental
Cleanup Liens?
S. What are the Requirements for
Reviewing Federal, State, Tribal, and
Local Government Records 7
T What are the Requirements for Visual
Inspections of the Subject Property and
Adjoining Properties?
U What are the Requirements for the
Inclusion of Specialized Knowledge or
Experience on the Part of the
“Defendant?”
V What are the Requirements for the
Relationship of the Purchase Price to the
Value of the Property, if the Properly was
not Contaminated?
W. What are the Requirements for
Commonly Known or Reasonably
Ascertainable Information about the
Property?
X. What are the Requirements for “the
Degree of Obviousness of the Presence or
Likely Presence of Contamination at the
Property, and the Ability to Detect the
Contamination by Appropriate
Investigation?”
V Statutory and Executive Order Reviews
A. Executive Order I 2866 Regulatory
Planning and Review
B Paperwork Reduction Act
C. Regulatory Flexibility Act
D Unfunded Mandates Reform Act
E Executive Order 13132- Federalism
F Executive Order 13175: Consultation
and Coordination with Indian Tribal
Governments
C. Executive Order 13045: Protection of
Children from Environmental Risks and
Safety Risks
H Executive Order 13211 Actions that
Significantly Affect Energy Supply,
Distribution or Use
I National Technology Transfer
Advancement Act
Executive Order 12898. Federal Actions
to Address Environmental Justice in
Minonty Populations and Low-Income
Populations
K. Congressional Review Act
l Statutory Authority
These regulations are promulgated
under the authority of Section
1O1(35)(B) of the Comprehensive
Environmental Response,
Compensation, and Liability Act of 1980
(42 U.S.C. 9601), as amended, most
importantly by the Small Business
Liability Relief and Brownflelds
Revitalization Act.
H. Background
A. What is the Intent of Today’s Rule?
On August 26, 2004, EPA published a
notice of proposed rulemaking outlining
proposed standards and practices for the
conduct of “all appropriate inquiries.”
This regulatory action was initiated in
response to legislative amendments to
the Comprehensive Environmental
Response, Compensation, and Liability
Act (CERCLA). On January 11,2002,
President Bush signed the Small
Business Liability Relief and
Brownflelds Revitalization Act (Pub. L.
107—118, 115 Stat. 2356, “the
Brownfields Amendments”), The
Brownflelds Amendments amend
CERCLA by providing funds to assess
and clean up brownflelds sites,
clarifying cERCLA liability provisions
for certain landowners, and providing
funding to enhance state and tribal
cleanup programs. The intent of today’s
rule is to finalize regulations setting
federal standards and practices for the
conduct of all appropriate inquiries, a
key provision of the Brownflelds
Amendments, Subtitle B of Title II of
the Brownflelds Amendments revises
CERCLA section 101(35), clarifying the
requirements necessary to establish the
innocent landowner defense. In
addition, the Brownfields Amendments
add protections from CERCLA liability
for bona fide prospective purchasers
and contiguous property owners who
meet certain statutory requirements.
Each of the CERCLA liability
provisions for innocent landowners,
bone fide prospective purchasers, and
contiguous property owners, requires
that, among other requirements, persons
claiming the liability protections
conduct all appropriate inquiries into
prior ownership and use of a property
prior to or on the date a person acquires
a property. The law requires EPA to
develop regulations establishing
standards and practices for how to
conduct all appropriate inquiries
Congress included in the Brownfields
Amendments a list of criteria that the
Agency must address in the regulations
establishing standards and practices for
conducting all appropriate inquiries
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66072 Federal Register / Vol. 70, No. 210/Tuesday, November 1, 2005 / Rules and Regulations
section lO1(35)(2)(B)(ii) and (lii). The
Brownfields Amendments also require
that parties receiving a federal
brownflelds grant awarded under
CERCLA section 104(k)(2)(B) to conduct
site characterizations and assessments
must conduct these activities in -
accordance with the standards and
practices for all appropriate inquiries.
The regulations established today
only address the all appropriate
inquiries provisions of CERCLA sections
1O1(35)(B)(i)(l) and 101 (35)(B)(ii) and
(iii). Today’s rule does not address the
requirements of CERCLA section
1O1(35)(B)(i)(ll) for what constitutes
“reasonable steps.”
B. What is “AllAppmpriate Inquiries ? ”
An essential step in real property
transactions may be evaluating a
property for potential environmental
contamination and assessing potential
liability for contamination present at the
property. The process for assessing
properties for the presence or potential
presence of environmental
contamination often is referred to as
“environmental due diligence,” or
‘environmental site assessment.” The
Comprehensive Environmental
Response Compensation and Liability
Act (CERCLA) or Superfund, provides
for a similar, but legally distinct,
process referred to as “all appropriate
inquiries.”
Under CERCLA, persons may be held
strictly liable for cleaning up hazardous
substances at properties that they either
currently own or operate or owned or
operated at the time of disposal. Strict
liability in the context of CERCLA
means that a potentially responsible
party may be liable for environmental
contamination based solely on property
ownership and without regard to fault
or negligence.
In 1986, the Superfund Amendments
and Reauthorization Act (Pub. L. No.
99—499,100 stat. 1613, “SARA”)
amended ERCLA by creating an
“innocent landowner” defense to
CERCLA liability. The new section
101(351(B) of CER LA provided a
defense to CERCLA liability, for those
persons who could demonstrate, among
other requirements, that they “did not
know and had no reason to know” prior
to purchasing a property that any
hazardous substance that is the subject
of a release or threatened release was
disposed of on, in, or at the property.
Such persons, to demonstrate that they
had “no reason to know” must have
undertaken, prior to, or on the date of
acquisition of the property, “all
appropriate inquiries” into the previous
ownership and uses of the property
consistent with good commercial or
customary standards and practices. The
2002 Brownfields Amendments added
potential liability protections for
“contiguous property owners” and
“bona fide prospective purchasers” who
also must demonstrate they conducted
all appropriate inquiries, among other
requirements, to benefit from the
liability protection.
C. What Were the Previous Standards
for All Appropriate Inquiries?
As part of the Brownfields
Amendments to CERCLA, Congress
established interim standards for the
conduct of all appropriate inquiries. The
federal interim standards established by
Congress became effective on January
11,2002. in the case of properties
purchased after May 31, 1997, the
interim standards include the
procedures of the ASTM Standard
El 527—9 7 (entitled “Standard Practice
for Environmental Site Assessments:
Phase I Environmental Site Assessment
Process”). In the case of persons who
purchased property prior to May 31,
1997 and who are seeking to establish
an innocent landowner defense or
qualify as a contiguous property owner,
CERCLA provides that such persons
must establish, among other statutory
requirements, that at the time they
acquired the property, they did not
know and had no reason to know of
releases or threatened releases to the
property. To establish they did not
know and had no reason to know of
releases or threatened releases, persons
who purchased property prior to May
31, 1997 must demonstrate that they
carried out all appropriate inquiries into
the previous ownership and uses of the
property in accordance with generally
accepted good commercial and
customary standards and practices.
In the case of property acquired by a
non-governmental entity or non-
commercial entity for residential or
other similar uses, the current interim
standards for all appropriate inquiries
may not be applicable. For those cases.
the Brownfields Amendments to
CER LA establish that a “facility
inspection and title search that reveal
no basis for further investigation shall
be considered to satisfy the
requirements’ for all appropriate
inquiries. In addition, such properties
are not within the scope of today’s rule.
The interim standards remain in effect
only until the effective date of today’s
rule which promulgates federal
regulations establishing standards and
practices for conducting all appropriate
inquiries.
On May 9, 2003. EPA published a
final rule (68 FR 24888) clarifying that
for the purposes of achieving the all
appropriate inquiries standards of
CERCLA section l01(35)(B), and until
the effective date of today’s regulation,
persons who purchase property on or
after May 31, 1997 could use either the
procedures provided in ASTM E1527—
2000, entltled “Standard Practice for
Environmental Site Assessments: Phase
I Environmental Site Assessment
Process,” or the earlier standard cited by
Congress in the Brownfields
Amendments, ASTM E1527—97.
Today’s notice is a final rule and as
such replaces the current interim
standards for all appropriate inquiries
established by Congress in the
Brownfields Amendments and clarified
by EPA in the May 9, 2003 final rule.
Since the Agency is promulgating a final
rule establishing federal regulations
containing the standards and practices
for conducting all appropriate inquiries.
the interim standard will no longer be
the operative standard for conducting
all appropriate inquiries upon
November 1, 2006, the effective date of
today’s rule. Until November 1, 2006,
both the standards and practices
included in today’s final regulation and
the current interim standards
established by Congress for all
appropriate inquiries will be recognized
by EPA as satisfying the statutory
requirements for the conduct of all
appropriate inquiries under section
101 (35)(B) of CERCLA.
D. What are the Liability Protections
Established Under the Bmwnfields
Amendments?
The Brownfields Amendments
provide important liability protections
for landowners who qualify as
contiguous property owners, bona fide
prospective purchasers, or innocent
landowners. To meet the statutory
requirements for any of these landowner
liability protections. a landowner must
meet certain threshold requirements and
satisfy certain continuing obligations.
To qualify as a bona fide prospective
purchaser, contiguous property owner,
or innocent landowner, a person must
perform “all appropriate inquiries” on
or before the date on which the person
acquired the property. Bona fide
prospective purchasers and contiguous
property owners also must demonstrate
that they are not potentially liable or
affiliated with any other person that is
potentially liable for response costs at
the property. In the case of contiguous
property owners, the landowner
claiming to be a contiguous property
owner also must demonstrate that he
did not cause, contribute, or consent to
any release or threatened release of
hazardous substances. To meet the
statutory requirements for a bona fide
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66073
prospective purchaser, a property owner
must have acquired a property
subsequent to any disposal activities
Involving hazardous substances at the
property.
Continuing obligations required under
the statute include complying with land
use restrictions and not impeding the
effectiveness or integrity of institutional
controls; taking “reasonable iteps” with
respect to hazardous substances
affecting a landowner’s property to
prevent releases; providing cooperation.
assistance and access to EPA, a state, or
other party conducting response actions
or natural resource restoration at the
property; complying with CERCLA
information requests and administrative
subpoenas; and providing legally
required notices. For a more detailed
discussion of these threshold and
continuing requirements please see
EPA, interim Guidance Regarding
Criteria Landowners Must Meet in
Order to Qualify for Bona Fide
Prospective Purchaser, Contiguous
Property Owner, or Innocent Landowner
Limitations on CERCLA Liability
(Common Elements, 2003). A copy of
this document is available in the docket
for today’s rule.
EPA notes that, as explained below,
persons conducting all appropriate
inquiries in compliance with today’s
final rule are not entitled to the CERCLA
liability protections provided for
innocent landowners, bona fide
prospective purchasers, and contiguous
property owners, unless they also
comply with all of the continuing
obligations established under the
statute. As explained below, compliance
with today’s final rule is only one
requirement necessaiy for CERCLA
liability protection. We also note that
the requirements of today’s rule apply to
prospective property owners who are
seeking protection from liability under
the federal Superfund Law (CERCLA).
Prospective property owners wishing to
establish protection from, or a defense
to, liability under state superfund or
other related laws must comply with the
all criteria established under state laws,
including any criteria for conducting
site assessments or all appropriate
inquiries established under applicable
state statutes or regulations.
1. Bona Fide Prospective Purchaser
The Brownfields Amendments added
a new bona fide prospective purchaser
provision at ERCLA section 107(r). The
provision provides protection from
CERCLA liability, and limits EPA’s
recourse for unrecovered response costs
to a lien on property for the lesser of the
unrecovered response costs or increase
in fair market value attributable to
EPA’s response action. To meet the
statutory requirements for a bona fide
prospective purchaser, a person must
meet the requirements set forth in
ERCLA sections 101 (40) and 107(r). A
bona tide prospective purchaser must
have bought property after January 11,
2002 (the date of enactment of the
Brownfields Amendments). A bona tide
prospective purchaser may purchase
property with knowledge of
contamination after performing all
appropriate inquiries, provided the
property owner meets or complies with
all of the other statutory requirements
set forth in CERCLA section 101(40).
Conducting all appropriate inquiries
alone does not provide a landowner
with protection against CERCLA
liability. Landowners who want to
qualify as bona flde prospective
purchasers must comply with all of the
statutory requirements. The statutory
requirements include, without
limitation, that the landowner must:
• Have acquired a property after all
disposal of hazardous substances at the
property ceased;
• Provide all legally required notices
with respect to the discovery or release
of any hazardous substances at the
property;
• Exercise appropriate care by taking
reasonable steps to stop continuing
releases, prevent any threatened future
release, and prevent or limit human,
environmental, or natural resources
exposure to any previously released
hazardous substance;
• Provide full cooperation, assistance,
and access to persons that are
authorized to conduct response actions
or natural resource restorations;
• Comply with land use restrictions
established or relied on in connection
with a response action;
• Not impede the effectiveness or
integrity of any Institutional controls:
• Comply with any CERCLA request
for information or administrative
subpoena; and
• Not be potentially liable, or
affiliated with any other person who is
potentially liable for response costs for
addressing releases at the property.
Persons claiming to be bona fide
prospective purchasers should keep in
mind that fuilure to identify an
environmental condition or identify a
release or threatened release of a
hazardous substance on. at, in or to a
property during the conduct of all
appropriate inquiries does not relieve a
landowner from complying with the
other post-acquisition statutory
requirements for obtaining the liability
protections. Landowners must comply
with all the statutory requirements to
obtain the liability protection. For
example, an inability to identify a
release or threatened release during the
conduct of all appropriate inquiries
does not negate the landowner’s
responsibilities under the statute to take
reasonable steps to stop a release,
prevent a threatened release, and -
prevent exposure to any previous
release once any release is identified.
Compliance with the other statutory
requirements for the bona tide
prospective purchaser liability
protection is not contingent upon the
findings of all appropriate inquiries.
2. Contiguous Property Owner
The Brownfields Amendments added
a new contiguous property owner
provision at CERCLA section 107(q).
This provision excludes from the
definition of “owner” or “operator”
under CERCLA section 107(a)(1) and (2)
a person who owns property that is
“contiguous to, or otherwise similarly
situated with respect to, and that is or
may be contaminated by a release or
threatened release of a hazardous
substance from” property owned by
someone else. To qualify as a
contiguous property owner, a
landowner must have no knowledge or
reason to know of contamination at the
time of acquisition, have conducted all
appropriate inquiries, and meet all of
the criteria set forth in CERCLA section
107(q)(1)(A). which include, without
limitation:
• Not causing, contributing, or
consenting to the release or threatened
release;
• Not being potentially liable nor
affiliated with any other person who is
potentially liable for response costs at
the property;
• Taking reasonable steps to stop
continuing releases, prevent any
threatened release, and prevent or limit
human, environmental, or natural
resource exposure to any hazardous
substances released on or from the
landowner’s property;
• Providing full cooperation,
assistance, and access to persons that
are authorized to conduct response
actions or natural resource restorations;
• Complying with land use
restrictions established or relied on in
connection with a response action;
• Not impeding the effectiveness or
integrity of any institutional controls;
• Complying with any CERCLA
request for information or
administrative subpoena;
• Providing all legally required
notices with respect to discovery or
release of any hazardous substances at
the property.
The contiguous property owner
liability protection “protects parties that
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are essentially victims of pollution
incidents caused by their neighbor’s
actions.” S. Rep. No. 107—2. at 10
(2001). Contiguous property owners
must perform all appropriate inquiries
prior to purchasing property. However,
performing all appropriate inquiries in
accordance with the regulatory
requirements alone is not sufficient to
assert the liability protections afforded
under CERCLA. Property owners must
fully comply with all of the statutory
requirements to be afforded the
contiguous property owner liability
protection. Persons who know, or have
reason to know, that the property is or
could be contaminated at the time of
acquisition of a property cannot qualify
for the liability protection as a
contiguous property owner, but may be
entitled to bona fide prospective
purchaser status.
Persons claiming to be contiguous
property owners should keep in mind
that failure to identify an environmental
condition or identify a release or
threatened release of a hazardous
substance on, at, in or to a property
during the conduct of all appropriate
inquiries, does not relieve a landowner
from complying with the other statutory
requirements for obtaining the
contiguous landowner liability
limitation. Landowners must comply
with all the statutory requirements to
qualify for the liability protections. For
example, an inability to identify a
release or threatened release during the
conduct of all appropriate inquiries
does not negate the landowner’s
responsibilities under the statute to take
reasonable steps to stop the release,
prevent a threatened release, and
prevent exposure to previous releases
once a release is identified. None of the
other statutory requirements for the
contiguous property owner liability
protection is contingent upon the results
of the conduct of all appropriate
inquiries.
3. Innocent Landowner
The Brownfields Amendments also
clarify the innocent landowner defense.
To qualify as an innocent landowner, a
person must conduct all appropriate
inquiries and meet all of the statutory
requirements. The requirements
include, without limitation:
• Having no knowledge or reason to
know that any hazardous substance
which is the subject of a release or
threatened release was disposed of on,
in, or at the facility;
• Providing full cooperation.
assistance and access to persons
authorized to conduct response actions
at the property;
• Complying with any land use
restrictions and not impeding the
effectiveness or integrity of any
institutional controls;
• Taking reasonable steps to stop
continuing releases, prevent any
threatened release, and prevent or limit
human, environmental, or natural
resource exposure to any previously
released hazardous substances;
To successfully assert an innocent
landowner liability defense, a property
owner must demonstrate compliance
with CERCLA section 107(b)(3) as well.
Such persons must establish, by a
preponderance of the evidence:
• That the release or threat of release
of hazardous substances and the
resulting damages were caused by an act
or omission of a third party with whom
the person does not have employment,
agency, or a contractual relationship;
• The person exercised due care with
respect to the hazardous substance
concerned, taking into consideration the
characteristics of such hazardous
substance, in light of all relevant facts
and circumstances;
• Took precautions against
foreseeable acts or omissions of any
such third party and the consequences
that could foreseeably result from such
acts or omissions.
Like contiguous property owners,
innocent landowners must perform all
appropriate inquiries prior to or on the
date of acquisition of a property and
cannot know, or have reason to know,
of contamination to qualify for this
landowner liability protection. Persons
claiming to be innocent landowners also
should keep in mind that failure to
identify an environmental condition or
identify a release or threatened release
of a hazardous substance on, at, in or to
a property during the conduct of all
appropriate inquiries, does not relieve
or exempt a landowner from complying
with the other statutory requirements
for asserting the innocent landowner
defense. Landowners must comply with
all the statutory requirements to obtain
the defense. For example, an inability to
identify a release or threatened release
during the conduct of all appropriate
inquiries does not negate the
landowner’s responsibilities under the
statute to take reasonable steps to stop
the release, prevent a threatened release,
and prevent exposure to a previous
release. Compliance with the other
statutory requirements for the innocent
landowner defense is not contingent
upon the results of an all appropriate
inquiries investigation.
E. What Criteria Did Congress Establish
for the All Appropriate Inquiries
Standard?
Congress included In the Brownflelds
Amendments a list of criteria that the
Agency must include in the regulations
establishing standards and practices for
conducting all appropriate inquiries. In
addition to providing these criteria in
the statute, Congress instructed EPA to
develop regulations establishing
standards and practices for conducting
all appropriate inquiries in accordance
with generally accepted good
commercial and customary standards
and practices. The criteria are set forth
in t ERCLA section 101 (35)(2)(B)(iii)
and include:
• The results of an inquiry by an
environmental professional.
• Interviews with past and present
owners, operators, and occupants of the
facility for the purpose of gathering
information regarding the potential for
contamination at the facility.
• Reviews of historical sources, such
as chain of title documents, aerial
photographs. building department
records, and land use records, to
determine previous uses and
occupancies of the real property since
the property was first developed.
• Searches for recorded
environmental cleanup liens against the
facility that are filed under federal.
state, or local law.
• Reviews of federal, state, and local
government records, waste disposal
records, underground storage tank
records, and hazardous waste handling,
generation, treatment, disposal, and
spill records, concerning contamination
at or near the facility.
• Visual inspections of the facility
and of adjoining properties.
• Specialized knowledge or
experience on the part of the defendant.
• The relationship of the purchase
price to the value of the property, if the
property was not contaminated.
• Commonly known or reasonably
ascertainable information about the
property.
• The degree of obviousness of the
presence or likely presence of
contamination at the property, and the
ability to detect the contamination by
appropriate investigation.
Ill. Summary of Comments and
Changes From Proposed Rule to Final
Rule
EPA received over 400 public
comments in response to the August 26,
2004 proposed rule. Comments were
received from environmental
consultants with experience in
performing site assessments, trade
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66075
associations, state government agencies,
environmental interest groups, and
other public interest associations.
Commenters generally supported the
purpose and goals of the proposed rule.
Many commenters complimented the
Agency on its decision to develop the
proposed rule using the negotiated
rulemaking process. However,
commenters had differing views on
certain aspects of the proposed rule. In
particular, the Agency received widely
differing views on the proposed
definition of “environmental
professional.” Although many
commenters supported the definition as
proposed, other commenters raised
concerns regarding the stringency of the
proposed qualifications. A significant
number of commenters applauded the
proposed definition of an environmental
professional and stated that it may
increase the rigor and caliber of
environmental site investigations.
Commenters who would not qualify as
an environmental professional under
the proposed definition raised concerns
with regard to the specific qualifications
proposed.
EPA received a significant number of
comments regarding the statutory
requirements for qualifying for the
CERCLA liability protections. Several
commenters also raised concerns with
regard to the performance-based
approach to the all appropriate inquiries
investigation included in the proposed
rule. Commenters were concerned that
the proposed performance-based
approach would make it more difficult
to qualify for the CERCLA liability
protections than an approach that
requires strict adherence to prescriptive
data gathering requirements that do not
allow for the application of professional
judgment. However, the vast majority of
commenters who commented on the
performance-based nature of the
proposed rule supported the proposed
approach.
Other commenters raised concerns
with regard to the proposed rule’s
requirements to identify and comment
upon the significance of “data gaps”
where the lack of information may affect
the ability of an environmental
professional to render an opinion
regarding conditions at a property that
are indicative of releases or threatened
releases of hazardous substances.
Commenters were concerned that if any
data gaps exist potential contamination
would not be identified, allowing
property owners to escape liability for
contamination. Other commenters
supported the proposed requirement to
identify data gaps, or missing
information, that may affect the
environmental professional’s ability to
render an opinion regarding the
environmental conditions at a property
and comment on their significance in
this regard and stated that the
requirement would lend credibility to
the inquiry’s final report.
We received many comments on the
proposed provision to compare the
purchase price of a property to the fair
market value of the property (if the
property were not contaminated). One
concern raised is that commenters
believe that the exact market value of a
property is difficult to determine. Some
commenters took exception to the fact
that EPA did not propose that
prospective landowners have to conduct
formal real estate appraisals of the
property to determine fair market value.
Although this provision has been a
statutory requirement for the conduct of
all appropriate inquiries since 1986,
some commenters thought the
requirement should not be included
within the scope of all appropriate
inquiries. Other commenters stated that
the environmental professional should
not be required to undertake the
comparison.
We received some comments on the
results of the economic impact analysis
that was conducted to assess the
potential costs and impacts of the
proposed rule. Many commenters
generally agreed with the Agency’s
conclusion that the average incremental
cost increase associated with the
requirements in the proposed rule over
the current industry standard would be
minimal. However, some commenters
asserted that EPA underestimated the
incremental costs associated with the
proposed rule. Although a few
commenters mentioned particular
activities included as requirements in
the proposed rule that would increase
the burdens and costs associated with
conducting all appropriate inquiries,
most of these corn menters did not
provide specific reasons for claimed
cost increases over baseline activities.
Some commenters simply stated that the
proposed requirements would result in
an increase in the price of phase I
environmental site assessments. We
provide a summary of the comments
received on the economic impact
analysis for the proposed rule, our
responses to issues raised by
commenters, and the results of some
additional analyses conducted based on
some of the issues raised, in an
addendum to the economic impact
analysis, which is provided in the
docket for today’s final rule.
In section IV of this preamble, we
discuss the requirements of the final
rule, including a summary of the
provisions included in the August 26,
2004 proposed rule, the significant
comments raised in response to the
proposed provisions, and a summary of
our rationale for the final rule
requirements. Generally, the final rule
closely resembles the provisions
included in the proposed rule. We
adopted relatively minor changes in
response to public comments. For
example, we received a number of
comments urging EPA to modify the
proposed definition of environmental
professional to allow individuals who
have significant experience in
conducting environmental site
assessments, but do not have a
Baccalaureate degree, to qualify as
environmental professionals. We were
convinced by the arguments presented
in many of these public comments.
Therefore, the definition of an
environmental professional included in
today’s final rule allows individuals
with ten years of relevant full time
experience to qualify as an
environmental professional for the
purpose of overseeing and performing
all appropriate inquiries.
With respect to the proposed
requirements governing the use of
previously-conducted environmental
site assessments for a particular
property, we agreed with commenters
who pointed out the proposed rule was
unclear. In today’s final rule, we modify
the proposed rule language to allow for
the use of information contained in
previously-conducted assessments, even
if the information was collected more
than a year prior to the date on which
the subject property is acquired. The
final rule does require that all aspects of
a site assessment, or all appropriate
inquiries investigation, completed more
than one year prior to the date of
acquisition of the subject property be
updated to reflect current conditions
and current property-specific
information. In the case of all
appropriate inquiries investigations
completed less than one year prior to
the date of acquisition of the subject
property but more than 180 days before
the acquisition date, the final rule
retains the requirements of the proposed
rule that only certain aspects of the all
appropriate inquiries must be updated.
In the case of the requirement to
search for institutional controls that was
included in the proposed requirements
to review federal, state, tribal and local
government records, we agreed with
commenters who pointed out that
searching for institutional controls
associated with properties located
within a half mile of the subject
property is overly burdensome and
without sufficient benefit to the purpose
of the investigation. The final rule
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requires that the search for institutional
controls be confined to the subject
property only.
We adopted one other change in the
final rule, based upon public comments.
In the proposed rule, we delineated
responsibilitie fpr particular aspects of
the all appropriate inquiries
investigation between the
environmental professional and the
prospective landowner of the subject
property (or grantee). We defined the
inquiry of the environmental
professional to include: interviews with
part and present owners, operators and
occupants; reviews of historical sources
of information; reviews of federal state
tribal and local government records;
visual inspections of the f cility and
adjoining property; commonly known or
reasonably ascertainable information;
and degree of obviousness of the
presence or likely presence of
contamination at the property and the
ability to detect the contamination by
appropriate investigation. We also
defined “additional inquiries” that must
be conducted by the prospective
landowner or grantee (or an individual
on the prospective landowner’s or
grantee’s behalf). These “additional
inquiries” include: specialized
knowledge or experience of the
prospective landowner (or grantee); the
relationship of the purchase price to the
fair market value of the property. if the
property was not contaminated; and
commonly known or reasonably
ascertainable information. The
requirement to search for environmental
cleanup liens was proposed to be the
responsibility of the prospective
landowner (or grantee), if the search is
not conducted by the environmental
professional. The proposed rule
required the prospective landowner (or
grantee) to provide all information
collected as part of the “additional
inquiries” to the environmental
professional.
The final rule retains the proposed
delineation of responsibilities. However,
based upon the input provided in public
comments, the final rule does not
require the prospective landowner (or
grantee) to provide the information
collected as part of the “additional
inquiries” to the environmental
professional. Although we continue to
believe that the information collected or
held by the prospective landowner (or
grantee) should be provided to the
environmental professional overseeing
the other aspects of the all appropriate
inquiries, we agree with commenters
who asserted that prospective
landowners and grantees should not be
required to provide this information to
the environmental professional.
Cominenters argued that property
owners (and grantees) may want to hold
some information (e.g., the purchase
price of the property) confidential.
CERCLA liability rests with the owner
or operator of a property and not with
an environmental professional hired by
the prospective ‘andowner and who is
not involved with the ownership or
operation of the property. Since it
ultimately is up to the owner or operator
of a property to defend his or herself
against any claims to liability, we agree
with commenters that asserted that the
regulations should not require that
prospective landowners (or grantees)
provide information collected to comply
with the “additional inquiries”
provisions to the environmental
professional. Should the required
information not be provided to the
environmental professional. the
environmental professional should
assess the impact that the lack of such
information may have on his or her
ability to render an opinion with regard
to conditions indicative of releases or
threatened releases of hazardous
substances on, at, in or to the property.
If the lack of information does impact
the ability of the environmental
professional to render an opinion with
regard to the environmental conditions
of the property, the environmental I
professional should note the missing
Information as a data gap in the written
report. We discuss each of the
requirements of the final rule in Section
IV of this preamble.
IV. Detailed Description of Today’s
Rule
A. What Is the Purpose and Scope of the
Rule?
The purpose of today’s rule is to
establish federal standards and practices
for the conduct of all appropriate
inquiries. Such inquiries must be
conducted by persons seeking any of the
landowner liability protections under
CERCLA prior to acquiring a property
(as outlined in Section ll.D. of this
preamble). In addition, persons
receiving federal brownfields grants
under the authorities of CERCLA section
104(k)(2)(B) to conduct site
characterizations and assessments must
conduct such activities in compliance
with the all appropriate inquiries
regulations.
In the case of persons claiming one of
the CERCLA landowner liability
protections, the scope of today’s rule
includes the conduct of all appropriate
inquiries for the purpose of identifying
releases and threatened releases of
hazardous substances on, at, in or to the
property that would be the subject of a
response action for which a liability
protection would be needed and such a
property is owned by the person
asserting protection from liability.
CERCLA liability is limited to releases
and threatened releases of hazardous
subctan ’ s-which cause the incurrej ce
of response costs. Therefore, in the case
of all appropriate inquiries conducted
for the purpose of qualifying for
protection from CERCLA liability
(CERCLA section 107), the scope of the
inquiries is to identify releases and
threatened releases of hazardous
substances which cause or tiu eaten to
cause the incurrence of response costs,
In the case of persons receiving
Federal brownfields grants to conduct
site characterizations and assessments,
the scope of the all appropriate inquiries
standards and practices may be broader.
The Brownfields Amendments include a
definition of a ‘brownfield site” that
includes properties contaminated or
potentially contaminated with
substances not included in the
definition of “hazardous substance” in
CERCLA section 101(14). Brownfields
sites include properties contaminated
with (or potentially contaminated with)
hazardous substances, petroleum and
petroleum products. controlled
substances, and pollutants and
contaminants (as defined in cERCLA
section 101(33)). Therefore, in the case
of persons receiving federal brownfields
grant monies to conduct site assessment
and characterization activities at
brownfields sites, the scope of the all
appropriate inquiries may include these
other substances, as outlined in
§ 312.1(c)(2), to ensure that persons
receiving brownfields grants can
appropriately and fully assess the
properties as required. It is not the case
that every recipient of a brownfields
assessment grant has to include within
the scope of the all appropriate inquiries
petroleum and petroleum products,
controlled substances and CERCLA
pollutants and contaminants (as defined
in CERCLA section 101(33)). However,
in those cases where the terms and
conditions of the grant or the
cooperative agreement with the grantee
designate a broader scope to the
investigation (beyond CERCLA
hazardous substances), then the scope of
the all appropriate inquiries should
include the additional substances or
Contaminants.
The scope of today’s rule does not
include property purchased by a non-
governmental entity or non-commercial
entity for “residential use or other
similar uses * * * lwhere] a facility
inspection and title search * * * reveal
no basis for further investigation.” (Pub.
L. 107—118 § 223). CERCLA section
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66077
101(35)(B)(v) states that in those cases.
title search and facility inspection that
reveal no basis for further investigation
shall satisfy the requirements for all
appropriate inquiries.
We note that today’s rule does not
affect the existing CERCLA liability
protections for state and local
governments that acquire ownership to
properties involuntarily in their
functions as sovereigns, pursuant to
CERCLA sections 101 (20)(D) and
101(35)(A)(ii). Involuntary acquisition
of properties by state and local
governments fall under those CERCLA
provisions and EPA’s policy guidance
on those provisions, not under the all
appropriate inquiry provisions of
CERCLA section 101 (35)(B).
B. To Whom Is the Rule Applicable?
Today’s rule applies to any person
who may seek the landowner liability
protections of CERCLA as an innocent
landowner, contiguous property owner,
or bona flde prospective purchaser. The
statutory requirements to obtain each of
these landowner liability protections
include the conduct of all appropriate
inquiries. In addition, the rule applies to
individuals receiving Federal grant
monies under CERCLA section
104(k) [ 2)(B) to conduct site
characterization and assessment
activities. Persons receiving such grant
monies must conduct the site
characterization and assessment in
compliance with the all appropriate
inquiries regulatory requirements.
C. Does the Final Rule Include Any New
Reporting or Disclosure Obligations?
The final rule does not include any
new reporting or disclosure obligations.
The nile only applies to those property
owners who may seek the landowner
liability protections provided under
CERCLA for innocent landowners,
contiguous property owners or bona fide
prospective purchasers. The
documentation requirements included
in this rule are primarily intended to
enhance the inquiries by requiring the
environmental professional to record
the results of the inquiries and his or
her conclusions regarding conditions
indicative of releases and threatened
releases on, at, in. or to the property and
to provide a record of the environmental
professional’s inquiry. Today’s rule
contains no new requirements to notify
or submit information to EPA or any
other government entity.
Although today’s rule does not
include any new disclosure
requirements, ERCLA section 103 does
require persons in charge of vessels and
facilities, including on-shore and off-
shore facilities, to notify the National
Response Center of any release of a
hazardous substance from the vessel or
facility in a quantity equal to or greater
than a “reportable quantity,” as defined
in CERCLA section 102(b). Today’s rule
includes no changes to this reporting
requirement nor any changes toasty
other reporting or disclosure
requirements under federal, tribal, or
state law.
D. What Are the Final Documentation
Requirements?
The proposed rule required that the
environmental professional, on behalf of
the property owner, document the
results of the all appropriate inquiries in
a written report. As explained in the
preamble to the proposed rule, the
property owner could use this report to
document the results of the inquiries.
Such a report can be similar in nature
to the type of report previously
provided under generally accepted
commercial practices. We proposed no
requirements regarding the length,
structure, or specific format of the
written report. In addition, the proposed
rule did not require that a written report
of any kind be submitted to EPA or any
other government agency, or that a
written report be maintained on-site at
the subject property for any length of
time.
Today’s final rule retains the
requirements, as proposed, for
documenting the results of the all
appropriate inquiries investigation
conducted under the supervision or
responsible charge of an environmental
professional. As noted above, the
primary purpose of the documentation
requirement is to enhance the inquiry of
the environmental professional by
requiring that the environmental
professional record the results of the
inquiries and his or her conclusions.
The written report may allow any
person claiming one of the CERCLA
landowner liability protections to offer
documentation in support of his or her
claim that all appropriate inquiries were
conducted in compliance with the
federal regulations.1 The Agency notes
that while today’s final regulation does
not require parties conducting all
appropriate inquiries to retain the
written report or any other
documentation discovered, consulted,
or created in the course of conducting
the inquiries, the retention of such
documentation and records may be
‘Nothing in this regulation or preamble is
intended to suggest that any particular
documentation prepared in conducting all
appropriate inquiries will be admissible in court in
any litigation where a party raises one of the
liability protections, or will in any way alter the
judicial rules of evidence
helpful should the property owner need
to assert protection from CERCLA
liability after purchasing a property.
The final rule requires that a written
report documenting the results of the all
appropriate inquiries include an
opin4on of an environmental
professional as to whether the all
appropriate inquiries conducted
identified conditions indicative of
releases or threatened releases of
hazardous substances on, at. in or to the
subject property. The rule also requires
that the report identify data gaps in the
information collected that affect the
ability of the environmental
professional to render such an opinion
and that the environmental professional
comment on the significance of the data
gaps.
Several commenters raised issues
with regard to the proposed requirement
that the environmental professional
document and comment on the
significance of data gaps that affect the
ability of the environmental
professional to identify conditions
indicative of releases or threatened
releases of hazardous substances on at,
in, or to the subject property. Some
commenters stated that the need to
identify data gaps will make it difficult
to determine when an all appropriate
inquiries investigation is complete and
therefore the requirement would act as
a disincentive to the development of
potentially contaminated properties.
Other commenters asserted that the fact
that the regulations recognize data gaps
creates a loophole that would result in
property owners claiming to be
protected from CERCLA liability after
conducting an incomplete investigation
that includes significant data gaps.
These commenters raised concerns that
CERCLA liability protection could be
claimed by property owners simply
because they conducted an all
appropriate inquiries investigation, even
in those cases where releases on, at, in,
or to the property were missed during
the investigation. Other commenters
stated their support for the requirements
to document data gaps, as proposed. A
summary of EPA’s response to these
comments and the requirements for
documenting data gaps included in the
final rule is provided below in Section
lV.N.
The final rule, at § 312.21(d), retains
the proposed requirement that the
environmental professional who
conducts or oversees the all appropriate
inquiries sign the written report. There
are two purposes for the requirement to
include a signature in the report. First,
the individual signing the report must
declare, on the signature page. that he
or she meets the definition of an
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66078 Federal Register / Vol. 70, No. 210 / Tuesday, November 1, 2005 / Rules and Regulations
environmental professional. as provided
in § 312.10. in addition, the rule
requires that the environmental
professional declare that: El. Wel have
developed and performed the all
appropriate inquiries in conformance
with the standards and practices set
forth in 40 CFR part 312.
Some commenters raised concernS
about whether the proposed rule would
require the environmental professional
to certify the all appropriate inquiries
report and its findings. Today’s final
rule does not require the environmental
professional to “certify” the results of
the all appropriate inquiries when
signing the report. The two statements
or declarations mentioned above and
required to be included in the final
written report documenting the conduct
of all appropriate inquiries are meant to
document that an individual meeting
the qualifications of an environmental
professional was involved in the
conduct of the all appropriate inquiries
and that the activities performed by. or
under the supervision or responsible
charge of. the environmental
professional were performed in
conformance with the regulations.
Reports signed by individuals holding a
Professional Engineer (P.E.) or
Professional Geologist (P.C.) license,
need not include the individual’s
professional seal.
A few commenters requested that EPA
include specific requirements for the
content of a final report in the final rule.
Given that the type and extent of
information available on a particular
property may vary greatly with its size,
type, past uses, and location, and the
type and extent of information
necessary for an environmental
professional to render an opinion
regarding conditions indicative of
releases or threatened releases of
hazardous substances associated with
any property may vary, we decided not
to include in the final rule specific
requirements governing the content of
all reports.
The provisions of the final rule allow
for the property owner (or grantee) and
any environmental professional engaged
in the conduct of all appropriate
inquiries for a specific property to
design and develop the format and
content of a written report that will
meet the prospective landowner’s (or
grantee’s) objectives and information
needs in addition to providing
documentation that all appropriate
inquiries were completed prior to the
acquisition of the property, should the
landowner (or grantee) need to assert
protection from liability after
purchasing a property.
E What Are the Qualifications loran
Environmental Professional?
Proposed Rule
In the Brownflelds Amendments,
Congress required that all appropriate
inquiries include “the results of an
inquiry by an environmental -
professional” (CERCLA section
101(35)(B)(iii)(l)). The proposed rule
included minimal qualifications for
persons managing or overseeing all
appropriate inquiries. The intent of
setting minimum profassional
qualifications, is to ensure that all
inquiries are conducted at a high level
of professional ability and ensure the
overall quality of both the inquiries
conducted and the conclusions or
opinions rendered with regard to
conditions indicative of the presence of
a release or threatened release on, at, in,
or to a property, based upon the results
of all inquiries. The proposed rule
required that an environmental
professional conducting or overseeing
all appropriate inquiries possess
sufficient specific education, training,
and experience necessary to exercise
professional judgment to develop
opinions and conclusions regarding the
presence of releases or threatened
releases of hazardous substances to the
surface or subsurface of a property. In
addition, the proposed rule included
minimum qualifications, including
minimum levels of education and
experIence, that characterize the type of
professional who is best qualified to
oversee and direct the development of
comprehensive inquiries and provide
the landowner with sound conclusions
and opinions regarding the potential for
releases or threatened releases to be
present at the property. The proposed
rule allowed for individuals not meeting
the proposed definition of an
environmental professional to
contribute to and participate in the all
appropriate inquiries on the condition
that such individuals are conducting
inquiries activities under the
supervision or responsible charge of an
individual that meets the regulatory
definition of an environmental
professional.
The proposed rule required that the
final review of the all appropriate
inquiries and the conclusions that
follow from the inquiries rest with an
individual who qualifies as an
environmental professional, as defined
in proposed section § 312.10 of the
proposed rule. The proposed rule also
required that in signing the report, the
environmental professional must
document that he or she meets the
definition of an “environmental
professional” included in the
regulations.
The proposed definition first and
foremost required that, to qualify as an
environmental professional, a person
must “possess sufficient specific
education, training, and experience
necessary to exercise professional
judgment to develop opinions and
conclusions regarding the presence of
releases or threatened releases * * to
the surface or subsurface of a property,
sufficient to meet the objectives and
performance factors” that are provided
in the proposed regulation. The
proposed definition of an environmental
professional included Individuals who
possess the following combinations of
education and experience.
• Hold a current Professional
Engineer’s (P.E.) or Professional
Geologist’s (P.C.) license or registration
from a state, tribe, or U.S. territory and
have the equivalent of three (3) years of
full-time relevant experience; or
• Be licensed or certified by the
federal government, a state, tribe, or
U.S. territory to perform environmental
inquiries as defined In § 312.21 and
have the equivalent of three (3) years of
full-time relevant experience; or
• Have a Baccalaureate or higher
degree from an accredited institution of
higher education in a relevant discipline
of engineering, environmental science,
or earth science and the equivalent of
five (5) years of full-time relevant
experience; or
• As of the date of the promulgation
of the final rule, have a Baccalaureate or
higher degree from an accredited
institution of higher education and the
equivalent of ten (10) years of full-time
relevant experience.
Public Comments
We received a significant number of
public comments on the proposed
definition of environmental
professional. Many commenters
supported the definifion of
environmental professional as proposed.
However, a significant number of
commenters raised concerns with regard
to the proposed educational
requirements. Commenters pointed out
that the proposed minimum
qualifications for an environmental
professional did not allow for
individuals with many years of relevant
experience in conducting environmental
site assessments to qualify as
environmental professionals, if such
individuals do not have college degrees.
The proposed rule only allowed for
persons with a Baccalaureate degree or
higher in specific disciplines of science
and engineering, and a specific number
of years of experience, to qualify as an
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66079
environmental professional, unless an
individual was otherwise licensed as an
environmental professional by a state,
tribe or the federal government. Some
commenters questioned the Agency’s
reasoning for restricting the degree
- requirements to only certain types of
science or engineering. Commenters
requested that EPA provide more
specific definitions of the types of
science and engineering degrees that
would be necessary to qualify as an
environmental professional.
Commenters also asserted that the
proposed “grandI ther clause” allowing
for individuals having a Baccalaureate
degree (or higher) and who accumulated
ten years of full time relevant
experience on or before the
promulgation date of the final rule to
qualify as an environmental
professional was too stringent and
provided too small of a window of
opportunity for individuals not
otherwise meeting the proposed
definition of environmental professional
to qualify.
Some commenters stated that the
definition of environmental professional
should not be restricted to those
individuals licensed as P.E.s or P.G.s. A
few commenters stated that a licensed
professional is no more qualified to
perform all appropriate inquiries
investigations than other individuals
with a significant number of years of
experience in conducting such
activities. Other commenters asserted
that only licensed P.E.s and P.G.s are
qualified to supervise all appropriate
inquiries activities.
EPA also received comments from
independent professional certification
organizations and members of these
organizations, including the Academy of
Certified Hazardous Materials Managers,
requesting that their organizations’
certification programs be named in the
regulatory definition of an
environmental professional.
Final Rule
After careful consideration of the
issues raised by commenters regarding
the proposed definition of
environmental professional, we made a
few modifications to the proposed
definition to reduce the potential
burden that the proposed definition may
have placed upon individuals who have
significant experience in conducting
environmental site assessments but do
not meet the proposed educational, or
college degree, requirements. We agree
with those commenters who asserted
that individuals with a significant
number of years of experience in
performing environmental site
assessments, or all appropriate inquiries
investigations, should qualify as
environmental professionals for the
purpose of conducting all appropriate
inquiries, even in cases where such
individuals do not have a college
degree. Therefore, in the final rule,
persons with ten or more years of full-
time relevant experience in conducting
environmental site assessments and
related activities may qualify as
environmental professionals, without
having received a college degree.
In addition, we agreed wih
commenters who pointed out that the
requirement that environmental
professionals hold specific types of
science or engineering degrees was too
limiting, in the final rule, persons with
any science or engineering degree
(regardless of specific discipline in
science or engineering) can qualify as an
environmental professional, if they also
meet the other required qualifications,
including the requirement to have five
(5) years of full-time relevant
experience.
We also agree with commenters who
asserted that the proposed grandfather
clause was too restrictive. As mentioned
above, we agree with commenters who
pointed out that individuals with a
significant number of years of
experience in conducting environmental
site assessments or all appropriate
inquiries investigations should be able
to qualify as environmental
professionals, for the purpose of
carrying out the provisions of today’s
rulemaking. In addition, we agree with
comrnenters who stated that the ability
for experienced professionals to qualify
as an environmental professional should
not be limited to those who meet the
threshold qualifications on the effective
date of the final rule. Therefore, the
proposed grandfather clause is not
included within the definition of
environmental professional in the final
rule. As explained above, in today’s
final rule, individuals with ten or more
years of full-time relevant experience in
conducting environmental site
assessments and related investigations
will qualify as environmental
professionals for the purposes of this
rulemaking.
The final rule retains the provision
recognizing as environmental
professionals those individuals who are
licensed by any tribal or state
government as a P.E. or PG., and have
three years of full-time relevant
experience in conducting all
appropriate inquiries. We continue to
contend that such individuals have
sufficient specific education, training,
and experience necessary to exercise
professional judgment to develop
opinions and conclusions regarding
conditions indicative of releases or
threatened releases on. at, in or to a
property, including the presence of
releases to the surface or subsurface of
the property, sufficient to meet the
objectives and performance factors
provided in the regulation. The rigor of
the tribal- and state-licensed P.E. and
P.C. certification processes, including
the educational and training
requirements, as well as the
examination requirements, paired with
the requirement to have three years of
relevant professional experience
conducting all appropriate inquiries
will ensure that all appropriate inquiries
are conducted under the supervision or
responsible charge of an individual well
qualified to oversee the collection and
interpretation of site-specific
information and render informed
opinions and conclusions regarding the
environmental conditions at a property,
including opinions and conclusions
regarding conditions indicative of
releases or threatened releases of
hazardous substances and other
contaminants on, at, in, or to the
property. The Agency’s decision to
recognize tribal and state-licensed P.E.s
and P.G.s reflects the fact that tribal
governments and state legislatures hold
such professionals responsible (legally
and ethically) for safeguarding public
safety, public health, and the
environment. To become a P.E. or P.C.
requires that an applicant have a
combination of accredited college
education followed by approved
professional training and experience.
Once a publicly-appointed review board
approves a candidate’s credentials, the
candidate is permitted to take a rigorous
exam. The candidate must pass the
examination to earn a license, and
perform ethically to maintain it. After a
state or tribe grants a license to an
individual, and as a condition of
maintaining the license, many states
require P.E.s and P.G.s to maintain
proficiency by participating in approved
continuing education and professional
development programs. In addition,
tribal and state licensing boards can
investigate complaints of negligence or
incompetence on the part of licensed
professionals, and may impose fines and
other disciplinary actions such as cease
and desist orders or license revocation.
Although the final rule recognizes
tribal and state-licensed P.E. and P.G.s
and other such government licensed
environmental professionals with three
years of experience to be environmental
professionals, the rule does not restrict
the definition of an environmental
professional to these licensed
individuals. The definition of an
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66080 Federal Register / Vol. 70, No. 210 / Tuesday, November 1,2005 / Rules and Regulations
environmental professional also
includes individuals who hold a
Baccalaureate or higher degree from an
accredited institution of higher
education in engineering or science and
have the equivalent of five (5) years of
full-time relevant experience in
conducting environmental site
assessments, or all appropriate
inquiries. In addition, individuals with
ten years of full-time relevant
experience in conducting environmental
site assessments, or all appropriate
inquiries qualify as environmental
professionals for the purpose of
conducting all appropriate inquiries.
Individuals with these qualifications
most likely will possess sufficient
specific education, training, and
experience necessary to exercise
professional judgment to develop
opinions and conclusions regarding
conditions indicative of releases or
threatened releases on, at, in, or to a
property, sufficient to meet the
objectives and performance factors
included in § 312.20(e) and (I).
In addition to the qualifications for
environmental professionals mentioned
above, EPA is retaining the proposed
provision to include within the
definition of an environmental
professional individuals who are
licensed to perform environmental site
assessments or all appropriate inquiries
by the Federal government (e.g., the
Bureau of Indian Affairs) or under a
state or tribal certification program.
provided that these individuals also
have three years of full-time relevant
experience. We contend that individuals
licensed by state and tribal
governments, or by any department or
agency within the federal government,
to perform all appropriate inquiries or
environmental site assessments, should
be allowed to qualify as an
environmental professional under
today’s regulation. State and tribal
agencies may best determine the
qualifications defining individuals who
“possess sufficient specific education,
training, and experience necessary to
exercise professional judgment to
develop opinions and conclusions
regarding conditions indicative of
releases or threatened releases on, at, in,
or to a property, sufficient to meet the
rule’s objectives and performance
factors” within any particular state or
tribal jurisdiction.
In response to requests from members
of independent certification
organizations that EPA recognize in the
regulation those organizations whose
certification requirements meet the
environmental professional
qualifications included in the final rule.
we point out that today’s final rule does
not reference any private party
professional certification standards.
Such an approach would require that
EPA review the certification
requirements of each organization to
determine whether or not each
organization’s certification requirements
meet or exceed the regulatory
qualifications for an environmental
professional. Given that there may be
many such organizations and given that
each organization may review and
change its certification qualifications on
a frequent or periodic basis, we
conclude that such a undertaking is not
practicable. EPA does not have the
necessary resources to review the
procedures of each private certification
organization and review and approve
each organization’s certification
qualifications. Therefore, the final rule
includes within the regulatory
definition of an environmental
professional, general performance-based
standards or qualifications for
determining who may meet the
definition of an environmental
professional for the purposes of
conducting all appropriate inquiries.
These standards include education and
experience qualifications, as
summarized below. The final rule does
not recognize, or reference, any private
organization’s certification program
within the context of the regulatory
language. However, the Agency notes
that any individual with a certification
from a private certification organization
where the organization’s certification
qualifications include the same or more
stringent education and experience
requirements as those included in
today’s final regulation will meet the
definition of an environmental
professional for the purposes of this
regulation.
Based upon the input received from
the public commenters, EPA determined
that the definition of environmental
professional included in today’s final
rule establishes a balance between the
merits of setting a high standard of
excellence for the conduct of all
appropriate inquiries through the
establishment of stringent qualifications
for environmental professionals and the
need to ensure that experienced and
highly competent individuals currently
conducting all appropriate inquiries are
not displaced.
Summary of Final Rule’s Definition of
Environmental Professional
In summary, the definition of
environmental professional included in
today’s final rule includes individuals
who possess the following
qualifications:
• Hold a current Professional
Engineer’s or Professional Geologist’s
license or registration from a state, tribe,
or U.S. territory and have the equivalent
of three (3) years of full-time relevant
experience; or
• Be licensed or certified by the
federal government, a state, tribe, or
U.S. territory to perform environmental
inquiries as defined in § 312.21 and
have the equivalent of three (3) years of
full-time relevant experience; or
• Have a Baccalaureate or higher
degree from an accredited institution of
higher education in scionce or
engineering and the equivalent of five
(5) years of’ full-time relevant
experience; or
• Have the equivalent often (10)
years of full-time relevant experience.
The definition of “relevant
experience” is “participation in the
performance of environmental site
assessments that may include
environmental analyses, investigations,
and remediation which involve the
understanding of surface and subsurface
environmental conditions and the
processes used to evaluate these
conditions and for which professional
judgment was used to develop opinions
regarding conditions indicative of
releases or threatened releases * * * to
the subject property.”
The tinal rule retains the proposed
requirement that environmental
professionals remain current in their
field by participating in continuing
education or other activities and be able
to demonstrate such efforts.
The final rule also retains the
allowance for individuals not meeting
the definition of an environmental
professional to contribute to and
participate in the all appropriate
inquiries on the condition that such
individuals are conducting inquiries
activities under the supervision or
responsible charge of an individual that
meets the regulatory definition of an
environmental professional. This
provision allows for a team of
individuals working for the same firm or
organization (e.g., individuals working
for the same government agency) to
share the workload for conducting all
appropriate inquiries for a single
property, provided that one member of
the team meets the definition of an
environmental professional and reviews
the results and conclusions of the
inquiries and signs the final report.
The final rule requires that the final
review of the all appropriate inquiries
and the conclusions that follow from the
inquiries rest with an individual who
qualifies as an environmental
professional, as defined in § 312.10. The
final rule also requires that in signing
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66081
the report, the environmental
professional must document that he or
she meets the definition of an
“environmental professional” included
in the regulations.
F. References
Proposed Rule
In the proposed rule, the Agency
reserved a reference section and stated
in the preamble that we may include
references to applicable voluntary
consensus standards developed by
standards’ developing organizations that
are not inconsistent with the final
regulatory requirements for all
appropriate inquiries or otherwise
impractical. The Agency requested
comments regarding available
commercially accepted voluntary
consensus standards that may be
applicable to and compliant with the
proposed federal standards for all
appropriate inquiries.
Section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (“NTTAA”), Public Law
104—113, section 12(d) (15 U.S.C. 272
note), directs agencies to use technical
standards that are developed or adopted
by voluntary consensus standards
bodies, unless their use would be
inconsistent with applicable law or
otherwise impractical. Voluntary
consensus standards are technical
standards (e.g., materials specifications,
test methods, sampling procedures, and
business practices) that are developed or
adopted by voluntary consensus
standards bodies. When developing the
proposed rule, EPA considered using an
existing voluntary consensus standard
developed by ASTM International as the
federal standard for all appropriate
inquiries. This standard is known as the
ASTM E1527—2000 standard (entitled
‘Standard Practice for Environmental
Site Assessments: Phase I
Environmental Site Assessment
Process”). In the preamble to the
proposed rule, we acknowledged the
prevalent use of the ASTM E1527—2000
standard and the fact that it generally is
recognized as good and customary
commercial practice. However, when
we proposed the federal standards for
all appropriate inquiries, EPA
determined that the ASTM E1527—2000
standard is inconsistent with applicable
law. As a result, EPA chose not to
reference the ASTM E1527—2000
standard because it was inconsistent
with applicable law.
Public Comments
We received relatively few comments
citing available and applicable
voluntary consensus standards for
conducting all appropriate inquiries.
Several commenters did argue that the
interim standard cited in the statute, the
ASTM E1527—97 Environmental Site
Assessments: Phase I Environmental
Site Assessment Process, or the updated
ASTM E1527—2000, is sufficient to meet
the statutory criteria. A few commenters
stated a preference for the ASTM - -
E1527—2000 standard over the
requirements included in the proposed
rule. ASTM International is a standards
development organization whose
committees develop voluntary
consensus standards for a variety of
materials, products, systems and
services. ASTM International is the only
standards development organization
that submitted a comment requesting
that the Agency consider its standard,
the ASTM E1527—2000 Standard
Practice for Environmental Site
Assessments: Phase I Environmental
Site Assessment Process, as an
equivalent standard to the federal
regulations.
Final Rule
Since publication of the proposed
rule, ASTM International and its E50
committee, the Committee responsible
for the development of the ASTM
El 527—2000 Phase I Environmental Site
Assessment Process, has reviewed and
updated the “2000” version of the
El 527 standard to address EPA’s
concerns regarding the differences
between the ASTM E1527—2000
standard and the criteria established by
Congress in the Brownfields
Amendments to CERCLA. These
activities were conducted within the
normal review and updating process
that ASTM International undertakes for
each standard over a five-year cycle.
In today’s final rule, EPA is
referencing the standards and practices
developed by ASTM International and
known as Standard E1527—05 (entitled
“Standard Practice for Environmental
Site Assessments: Phase I
Environmental Site Assessment
Process”) and recognizing the E1527—05
standard as consistent with today’s final
rule. The Agency determined that this
voluntary consensus standard is
consistent with today’s final rule and is
compliant with the statutory criteria for
all ppropriate inquiries. Persons
conducting all appropriate inquiries
may use the procedures included in the
ASTM €1527—OS standard to comply
with today’s final rule.
It is the Agency’s intent to allow for
the use of applicable and compliant
voluntary consensus standards when
possible to facilitate implementation of
the final regulations and avoid
disruption to parties using voluntary
consensus standards that are found to be
fully compliant with the federal
regulations.
G. Whet Is Included in “All Appropriate
Inquiries?”
Proposed Rule
The proposed regulations for
conducting all appropriate inquiries
outlined the standards and practices for
conducting the activities included in
each of the statutory criterion
established by Congress in the
Brownfields Amendments. These
criteria are set forth in CERCLA section
101 (35)(B)(iii) and are:
• The results of an inquiry by an
environmental professional (proposed
§ 312.21).
• Interviews with past and present
owners, operators, and occupants of the
facility for the purpose of gathering
information regarding the potential for
contamination at the facility (proposed
§ 312.23).
• Reviews of historical sources, such
as chain of title documents, aerial
photographs, building department
records, and land use records, to
determine previous uses and
occupancies of the real property since
the property was first developed
(proposed § 312.24).
• Searches for recorded
environmental cleanup liens against the
facility that are filed under Federal,
State, or local law (proposed § 312.25).
• Reviews of Federal, State, and local
government records, waste disposal
records, underground storage tank
records, and hazardous waste handling,
generation, treatment, disposal, and
spill records, concerning contamination
at or near the fecility (proposed
§ 312.26).
• Visual inspections of the facility
and of adjoining properties (proposed
§ 312.27).
• Specialized knowledge or
experience on the part of the defendant
(proposed § 312.28).
• The relationship of the purchase
price to the value of the property, if the
property was not contaminated
(proposed § 312.29).
• Commonly known or reasonably
ascertainable information about the
property (proposed § 312.30).
• The degree of obviousness of the
presence or likely presence of
contamination at the property, and the
ability to detect the contamination by
appropriate investigation (proposed
§ 312.31).
Public Comments
We received a few comments
addressing the statutory criteria and the
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66082 Federal Register / Vol. 70, No. 210/Tuesday, November 1, 2005 / Rules and Regulations
inclusion of certain particular criteria
within the scope of the proposed rule.
Some commenters requested that EPA
not include in the final rule the criterion
to consider the relationship of the
purchase price of the property to the fair
market value of the property, if the
property is not contaminated. In
addition, a few commenters stated the
final rule should not include within the
scope of the all appropriate inquiries the
specialized knowledge or experience on
the part of the prospective landowner.
The Agency notes that both criteria
that commenters requested be removed
from the scope of the all appropriate
inquiries regulations are criteria
specifically required by Congress to be
included in the regulations. In addition,
both criteria have been part of the all
appropriate inquiries provisions under
the CER LA innocent landowner
defense since 1986. The proposed rule
included no changes from the previous
statutory provisions.
Final Rule
The final rule retains provisions
addressing each of the statutory criteria
for the conduct of all appropriate
inquiries included in 1 ERCLA section
1O1(35)(B)(iii).
H Who is Responsible for Conducting
the All Appropriate Inquiries?
The Brownflelds Amendments to
CERCLA require persons claiming any
of the landowner liability protections to
conduct all appropriate inquiries into
the past uses and ownership of the
subject property. The criteria included
in the Brownfields Amendments for the
regulatory standards for all appropriate
inquiries require that the inquiries
include an inquiry by an environmental
professional. The statute does not
require that all criteria or inquiries be
conducted by an environmental
professional.
Proposed Rule
The proposed rule required that
many, but not all, of the inquiries
activities be conducted by. or under the
supervision or responsible charge of, an
individual meeting the qualifications of
the proposed definition of an
environmental professional. The
proposed rule also provided that several
of the activities included in the
inquiries could be conducted either by
the prospective landowner or grantee,
and not have to be conducted under the
supervision or responsible charge of the
environmental professional. The
proposed rule required that the results
of all activities conducted by the
prospective landowner or grantee. and
not conducted by or under the
supervision or responsible charge of the
environmental professional, be provided
to the environmental professional to
ensure that such information could be
fully considered when the
environmental professional develops an
opinion, based on the inquiry activities,
as to whether conditions at the property
are indicative of a release or threatened
release of a hazardous substance (or
other contaminant) on, at, in, or to the
property.
The proposed rule allowed for the
following activities to be the
responsibility of, or conducted by, the
prospective landowner or grantee and
not necessarily be conducted by the
environmental professional, provided
the results of such inquiries or activities
are provided to an environmental
professional overseeing the all
appropriate inquiries:
• Searches for environmental cleanup
liens against the subject property that
are filed or recorded under federal,
tribal, state, or local law, as required by
proposed § 312.25.
• Assessments of any specialized
knowledge or experience on the part of
the landowner, as required by § 312.28.
• An assessment of the relationship of
the purchase price to the fair market
value of the subject property, if the
property was not contaminated, as
required by § 312.29.
• An assessment of commonly known
or reasonably ascertainable information
about the subject property, as required
by § 312.30.
The proposed rule required that all
other required inquiries and activities,
beyond those listed above to be
conducted by, or under the supervision
or responsible charge of, an
environmental professional.
Public Comments
Several commenters asserted that the
mandatory nature of the proposed
provision requiring the prospective
landowner to provide information
regarding the four criteria listed above
to the environmental professional is
problematic. Particularly with regard to
the requirement to provide “specialized
knowledge or experience of the
defendant,” commenters pointed out
difficulties in a prospective landowner
being able to document such knowledge
and experience sufficiently. Also, with
regard to the information related to the
“relationship of the purchase price to
the fair market value of the property, if
the property was not contaminated,”
many commenters pointed out that
prospective landowners may not want
to divulge information regarding the
price paid for a property. Commenters
pointed out that the requirement to
consider “commonly known or
reasonably ascertainable information”
about a property is implicit to all
aspects of the all appropriate inquiries
requirements. In addition, commenters
stated that CERCLA liability lies solely
with the owners and ‘ perators of a
vessel or property. A decision on the
part of a prospective landowner to not
furnish an environmental professional
with certain information related to any
of the statutory criteria can only affect
the property owner’s ability to claim a
liability protection provided under the
statute. In addition, the statute does not
mandate that information deemed to be
the responsibility of the prospective
landowner and not part of the “inquiry
of the environment professional” be
provided to the environmental
professional or even be part of the
inquiry of the environmental
professional. Some of the statutory
criteria are inherently the responsibility
of the prospective landowner.
Final Rule
We agree with the commenters who
asserted that the results and information
related to the criteria identified as being
the responsibility of the prospective
landowner should not, as a matter of
law, have to be provided to the
environmental professional. The statute
does not mandate that a prospective
landowner provide all information to an
environmental professional. Given that
the burden of potential CERCLA
liability ultimately falls upon the
property owner or operator, a
prospective landowner’s decision not to
provide the results of an inquiry or
related information to an environmental
professional he or she hired to
undertake other aspects of the all
appropriate inquiries investigation can
only affect the liability of the property
owner. In addition, we believe that the
environmental professional may be able
to develop an opinion with regard to
conditions indicative of releases or
threatened releases on. at, in, or to a
property based upon the results of the
criteria identified to be part of the
“inquiry of an environmental
professional.” Any information not
furnished to the environmental
professional by the prospective
landowner that may affect the
environmental professional’s ability to
render such an opinion may be
identified by the environmental
professional as a “data gap.” The
provisions of the final rule (as did the
proposed rule) then require that the
environmental professional comment on
the significance of the data gap or
missing information on his or her ability
to render such an opinion, in light of all
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66083
other information collected and all other
data sources consulted.
As a result of our consideration of the
issues raised by commenters, today’s
final rule modifies the requirements of
§ 312.22 “additional inquiries” by
stating (in paragraph (a)) that “persons
* * may provide the information
associated with such inquiries [ i.e., the
information for which the prospective
landowner or brownflelds grantee is
responsible] to the environmental
professional * a.” The proposed rule
provided that such information “must
be provided” to the environmental
professional. Although we expect that
most prospective landowners and
grantees will furnish available
information or knowledge about a
property to an environmental
professional he or she hired when such
information could assist the
environmental professional in
ascertaining the environmental
conditions at a property, we affirm that
compliance with the statutory criteria
does not require that such information
be disclosed. Ultimately, CERCLA
liability rests with the owner or operator
of a facility or property owner and it is
the information held by the property
owner or operator that may be reviewed
in a court of law when determining an
owner or operator’s liability status,
regardless of whether all information
was disclosed to an environmental
professional during the conduct of all
appropriate inquiries.
I. When Must Al) Appropriate Inquiries
Be Conducted?
CERCLA section 101 (40)(B)(i), as
amended, requires bona flde prospective
purchasers to conduct all appropriate
inquiries into “previous ownerships and
uses of the facility.” In the case of
contiguous property owners, CERCLA
section 107(q)(1)(A)(viii) requires that a
person claiming to be a contiguous
property owner conduct all appropriate
inquiries “at the time at which the
person acquired the property.” In the
case of innocent landowners, section
1O1(35)(B)(i)(I) of CERCLA requires that
the property owner conduct all
appropriate inquiries “on or before the
date on which the defendant acquired
the facility.”
Proposed Rule
Other than to specify that all
appropriate inquiries must be
conducted on or prior to the date a
person acquires a property, the statute is
silent regarding how close to the actual
date of acquisition the inquiries must be
completed. The proposed rule required
that all appropriate inquiries be
conducted or updated within one year
prior to taking title to a property. The
proposed rule provided that prospective
landowners could use information
collected as part of previous inquiries
for the same property, if the inquiries
were completed or updated within one
year prior to the date the property is
acquired. The proposed rule required
that certain information collected as
part of a previous all appropriate
inquiries be updated if it was collected
more than 180 days prior to the date a
person purchased the property. In
addition, in the preamble to the
proposed rule, Agency defined the date
of acquisition of a property as the date
on which the prospective landowner
acquires title to the property.
Public Comments
Commenters generally agreed with the
proposed provision to define the date of
acquisition of a property as the date on
which a person acquires title to the
property. A few commenters stated that
the requirement for an all appropriate
inquiries investigation to be completed
within a year of the date of acquisition
of the property is too stringent and may
not allow sufficient time for some
property transactions to be completed.
Some commenters also asserted that the
proposed requirement to update certain
aspects of the all appropriate inquiri s
investigation, if the investigation was
conducted more than 180 days prior to
the date of the acquisition of the
property was too stringent.
Final Rule
The Agency continues to believe that
the event that most closely reflects the
Congressional intent of the date on
which the defendant acquired the
property is the date on which a person
received title to the property. As
explained in the preamble to the
proposed rule, the Agency considered
other dates, such as the date a
prospective landowner signs a purchase
or sale agreement. However, it could be
burdensome to require a prospective
landowner to have completed the all
appropriate inquiries prior to having an
agreement with a seller to complete a
sales transaction. In fact, the time period
between the date on which a sales
agreement is signed and the date on
which the title to the property is
actually transferred to the prospective
landowner may be the most convenient
time for the prospective landowner to
obtain access to the property and
undertake the all appropriate inquiries.
In addition, requiring that all
appropriate inquiries be completed on
some date prior to the date of title
transfer could result in requiring
prospective landowners to undertake all
appropriate inquiries so early in the
property acquisition process as to
require the inquiries to be completed
prior to the prospective landowner
making a final decision on whether to
actually acquire the property.
- To increase the potential that the
information collected for the all
appropriate inquiries accurately reflects
the proposed objectives and
performance factors, as well as to
increase the potential that opinions and
judgments regarding the environmental
conditions at a property that are
included in an all appropriate inquiries
report are based on current and relevant
information, the Agency is retaining the
proposed provision that all appropriate
inquiries be conducted within one year
prior to the prospective landowner
acquiring the property. Today’s final
rule includes regulatory language at
§ 312.20(a) clarifying that all
appropriate inquiries must be
conducted within one year prior to the
date on which a person acquires a
property.
All appropriate inquiries may include
information collected for previous
inquiries that were conducted or
updated within one year prior to the
acquisition date of the property. In
addition, as explained in more detail
below, the final rule retains the
requirement that several of the
components of the inquiries be updated
within 180 days prior to the date the
property is purchased. Today’s final
rule includes a definition of the “date of
acquisition,” or purchase date, of a
property (i.e., the date the landowner
obtains title to the property).
Although commenters may be correct
in their assertions that some property
transactions may take more than a year
to close, we continue to believe that it
is important for the all appropriate
inquiries investigation to be completed
within one year prior to the date the
property is acquired. We point out that
the final regulation, as did the proposed
regulation, allows for information from
an older investigation to be used in a
current investigation. However, if the
prior all appropriate inquiries
investigation was completed more than
a year prior to the property acquisition
date, all parts of the investigation must
be reviewed and updated for the all
appropriate inquiries to be complete.
We believe that a year is sufficient time
for conditions at a property to change.
In particular, in cases where there is a
release or threatened release at a
property, significant changes to the
environmental conditions of a property
could occur during the course of a year.
In addition, depending upon the uses
and ownership of a property during the
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66084 Federal Register/Vol. 70, No. 210/Tuesday, November 1, 2005/Rules and Regulations
course of a one-year time period, overall
conditions at a property could change
and new evidence of a release or
threatened release could appear.
Therefore, today’s final rule requires
that all appropriate inquiries completed
for a particular property more than one
year prior to the date of acquisition of
that property, be updated in their
entirety. As summarized below, the
final rule does allow for the use of
information contained in previous
inquiries, even when the inquiries were
completed more than a year prior to the
property acquisition date, as long as all
information was updated within a year
and includes any changes that may have
occurred during the interim.
/. Can a Prospective Landowner Use
Information Collected for Previous
inquiries Completed for the Same
Property?
Proposed Rule
The proposed rule allowed parties
conducting all appropriate inquiries to
use the results of and information from
previous inquiries completed for the
same property, under certain
conditions. First, the previous inquiries
must have been conducted in
compliance with the proposed rule and
with CERCLA sections 1Ol(35)(B),
101 (40)(B) and 107(q)(A)(viii). In
addition, the information in the
previous inquiries must have been
collected or updated within one year
prior to the date of acquisition of the
property. Certain types of information
collected more than 180 days prior to
the current date of acquisition must be
updated for the current all appropriate
inquiries. Also, the information required
under some specific criterion (e.g.,
relationship of purchase price to
property value, specialized knowledge
on part of defendant) must be collected
specifically for the current transaction.
Public Comments
A significant number of commenters
pointed out that the regulatory language
in proposed §312.20(b)(1) of the
proposed rule precludes the use of
information contained in assessments or
the results of all appropriate inquiries
conducted more than a year prior to the
date of acquisition of a property.
Commenters pointed out that since the
language in the proposed rule stated
that previously collected information
had to have been collected “in
compliance with the requirements of
* *4ocJ part31z, any
information included in all appropriate
inquiries reports completed prior to the
promulgation of the final rule could not
be used, since compliance with the
regulation could not be achieved prior
to its publication.
Final Rule
It is not the Agency’s intent to
disallow the use of information
contained in previous inquiries, if the
environmental professional and the
prospective landowner find the
previously collected information to be
accurate and valid. However. EPA
continues to believe that information
collected as part of a prior all
appropriate inquiries investigation for
the same property should be updated to
reflect current environmental conditions
at the property and to include any
specific information or specialized
knowledge held by the prospective
landowner. The regulatory language in
today’s final rule (at §312.20(c)(1))
allows for the use of information
collected as part of prior all appropriate
inquiries investigation for the same
property provided that the prior
information was collected “during the
conduct of all appropriate inquiries in
compliance with CERCLA sections
101 (35)(B). 101 (40)(B) and
1o7(q)(A)(viii).” We have deleted the
proposed language that would have
required the previously conducted
investigation to have been done in
compliance with the final regulation.
This allows for the use of information
collected as part of previous all
appropriate inquiries, as long as the
information was collected in
compliance with the statutory
provisions for all appropriate inquiries.
For property purchased on or after May
31, 1997, therefore, any information
collected as part of an assessment in
compliance with the ASTM E1527—97
standard or the ASTM El 527—2000
standard may be used as part of a
current all appropriate inquiries
investigation. For property purchased
before May 31, 1997, information from
assessments completed and in
compliance with the statutory
provisions at CERCLA section
l01(35)(B)(iv)(l) maybe used as part of
a current all appropriate inquiries
investigation. However, this prior
information may only be used if
updated in accordance with § 312.20(b)
and (c) of today’s rule.
The final rule continues to recognize
that there is value in using previously
collected information when such
information was collected In accordance
with the statutory provisions and good
customary business practices,
particularly when the use of such
previously-collected information will
reduce the need to undertake
duplicative efforts.
The final rule also retains the
requirement that certain aspects of the
all appropriate inquiries Investigation
be updated if the investigation was
completed more than 180 days prior to
the date of acquisition of the property
(or the date on which the prospective
land&wner takes title to the property) to
ensure that an all appropriate Inquiries
investigation accurately reflects the
current environmental conditions at a
property. To increase the potential that
information collected about the
conditions of a property is accurate, as
well as increase the potential that
opinions and judgments regarding the
environmental conditions at a property
that are included in an all appropriate
inquiries report are based on current
and relevant information, the final rule
requires that many of the components of
the previous inquiries be updated
within 180 days prior to the date of
acquisition of the property. The
components of the all appropriate
inquiries that must be updated within
180 days prior to the date on which the
property is acquired are:
• Interviews with past and present
owners, operators, and occupants
( 312.23);
• Searches for recorded
environmental cleanup liens ( 312.25);
• Reviews of federal, tribal, state, and
local government records ( 312.26);
• Visual inspections of the facility
and of adjoining properties ( 312.27);
and
• The declaration by the
environmental professional
( 312.21(d)).
Also, the final rule retains the
proposed requirement that in all cases
where a prospective landowner is using
previously collected information, the all
appropriate Inquiries for the current
purchase must be updated to include a
summary of any relevant changes to the
conditions of the property and any
specialized knowledge of the
prospective landowner.
In today’s final rule, we continue to
recognize that it is not sufficient to
wholly adopt previously conducted all
appropriate inquiries for the same
property without any review. Certain
aspects of the all appropriate inquiries
investigation are specific to the current
prospective landowner and the current
purchase transaction. Therefore, the
final rule requires that each all
appropriate inquiries investigation
include current information related to:
• Any relevant specialized knowledge
held by the current prospective
landowner and the environmental
professional responsible for overseeing
and signing the all appropriate inquiries
report (i.e., requirements of § 312.28);
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66085
• The relationship of the current
purchase price to the value of the
property, if the property were not
contaminated (i.e., requirements of
§ 312.29); and
• Commonly known or reasonably
ascertainable information about the
property.
K. Can All Appropriate Inquiries Be
Conducted by One Party and
Tmnsferred to Another Party?
Proposed Rule
The proposed rule allowed for all
appropriate inquiries to be conducted
by one party and transferred to another
party, provided that certain conditions
are met. Under certain circumstances,
the prospective landowner, or a grantee,
may usea report of all appropriate
inquiries conducted for the property by
or for another party, including the seller
of the property or another party For
example, there are situations where the
federal government or a state
government agency may conduct the all
appropriate inquiries on behalf of the
local government for a property being
purchased by a local government, such
as the “targeted brownfields
assessments” conducted on behalf of
local governments by EPA. This
situation also may occur when a state
government covers the cost of the all
appropriate inquiries for a property
owned by a local government or actually
conducts the all appropriate inquiries
itself when the local government does
not have access to appropriate staff or
capital resources. A local government
may conduct all appropriate inquiries
for a third party in its community, such
as a private prospective landowner. In
addition, local redevelopment agencies
may locate a contaminated property,
conduct all appropriate inquiries,
acquire the property, and then sell the
property to a private developer.
The proposed rule allowed for a
person acquiring a property, or a
grantee, to use the results of an all
appropriate inquiries report conducted
by or for another party, if the report
meets the proposed rule’s objectives and
performance factors and the person who
is seeking to use the previously-
collected information or report reviews
all information collected and updates
the contents of the report as required by
§ 312.20(c) and necessary to accurately
reflect current conditions at the
property. In addition, the proposed rule
required that the prospective
landowner, or grantee, update the
inquiries and the report to include any
commonly known and reasonably
ascertainable information, relevant
specialized knowledge held by the
prospective landowner and the
environmental professional, and the
relationship of the purchase price to the
value of the property, if it were not
contaminated.
Public Comments -
Commenters generally supported the
proposed provision allowing for all
appropriate inquiries investigations
conducted by or for one party to be used
by another party.
Final Rule
For the reasons discussed in the
preamble to the proposed rule and
summarized above, the final rule retains
the provision allowing that all
appropriate inquiries investigations may
be conducted by or for one party and
used by another party. In all cases, the
all appropriate inquiries investigation
must be updated to include commonly
known and reasonably ascertainable
information and any relevant
specialized knowledge held by the
prospective landowner and
environmental professional. In addition,
the evaluation of the relationship
between the purchase price and the fair
market value of the property must
reflect the current sale of the property.
In all other aspects of the investigation,
the all appropriate inquiries must be in
compliance with the provisions of the
final regulation.
L What Are the Objectives and
Performance Factors for the All
Appropriate Inquiries Requirements?
Proposed Rule
As explained in the preamble to the
proposed rule, when developing the
proposed standards, EPA and the
Negotiated Rulemaking Committee
structured the proposal around the
statutory criteria established by
Congress in section 101 (35)(B)(iii) of
CERCLA. As development of the
proposed rule progressed, it became
apparent that the purposes and
objectives for the individual criterion
and the types of information that must
be collected to meet the objectives of
each criterion often overlapped. For
example, in developing standards
addressing the criterion requiring a
review of historical information, a
search for recorded environmental
cleanup liens, and a review of
government records, the Committee
concluded that the objectives of each
criterion or activity were similar, which
could lead to the collection of the same
information to fulfill each of the
criterion’s objectives. For example, a
chain of title document is historic
information that may include
information on environmental cleanup
liens, as well as information on past
owners of the property indicating that
previous owners managed hazardous
substances on the property.
To avoid requiring duplicative efforts,
but to ensure that the proposed
regulations Included standards and
practices that result in a comprehensive
assessment of the environmental
conditions at a property, the proposed
all appropriate inquiries standards were
structured around a concise set of
objectives and performance factors. The
proposed objectives and performance
factors applied to the standards
comprehensively. In conducting the
inquiries collectively, the landowner
and the environmental professional
must seek to achieve the objectives and
performance factors and use the
objectives and standards as guidelines
in implementing, in total, all of the
other proposed regulatory standards and
practices.
Public Comments
Commenters overwhelmingly
supported the proposed approach of
structuring the all appropriate inquiries
standards around a definitive set of
performance factors and objectives.
Commenters stated that the
establishment of performance factors
will improve the quality of
environmental site assessments because
the performance factors allow for the
application of professional judgement
and provide flexibility.
A few commenters did not support
the proposed approach of structuring
the regulations around a set of
performance factors and objectives.
These commenters asserted that the
objectives and performance factors
made the regulation too vague and
open-ended. In addition, the
commenters stated that they want the
regulation to be centered around a
“checklist” of activities, each of which
should be required to be completed
independently and without
consideration of a comprehensive
performance approach. Commenters
who argued for a checklist approach
said that such an approach would
ensure that the environmental
professional only would have to
undertake a finite list of activities and
it would be easier (in the commenter’s
opinion) for property owners to obtain
liability protection if the list of activities
could be completed without regard to
performance goals or an overall
objective. These commenters also
expressed concern that, if the
regulations are based on performance
factors that the all appropriate inquiries
investigation would not have an
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endpoint at which prospective
landowners could stop looking for
evidence of releases or threatened
releases. The commenters believed that
under a checklist approach liability
protection would be awarded upon
completion of all activities on the
checklist.
Final Rule -
We are retaining the proposed
performance factors and objectives in
the final rule. We continue to believe, as
did many commenters, that basing the
regulations on a set of overall
performance factors and specific
objectives lends clarity and flexibility to
the standards. Such an approach also
allows for the application of
professional judgment and expertise to
account for site-specific circumstances.
The primary objective of an all
appropriate inquiries investigation is to
identify conditions indicative of
releases and threatened releases of
hazardous substances on. at, in, or to the
subject property. In the case of
recipients of brownflelds grants, the
objective may be expanded to include
petroleum and petroleum products,
pollutants, contaminants, and
controlled substances, depending upon
the scope of the grantee’s cooperative
agreement.
The performance factors are meant to
guide the individual aspects of the
investigation toward meeting both the
statutory criteria for all appropriate
inquiries and the regulatory objectives
of (1) collecting necessary information
about the uses and ownerships of a
property and (2) identifying, through the
collection of this information,
conditions indicative of releases and
threatened releases on, at, in, or to the
subject property. By establishing a
concise set of objectives and setting
some boundaries on the information
collection activities through the
establishment of performance factors,
we believe that the final rule fulfills the
statutory objectives, provides for a
comprehensive assessment of the
environmental conditions at the
property, and avoids the conduct of
duplicative investigations and data
collection efforts.
EPA disagrees with the commenters
who argued that the proposed approach
of establishing overall objectives and
performance factors for the all
appropriate inquiries standards would
result in an approach that is too vague
and open-ended. In fact, by establishing
clear objectives and setting parameters
to the investigation through a set of
performance factors that include
gathering information that is publicly
available, obtainable from its source
within reasonable time and cost
constraints, and which can practicably
be reviewed, the approach taken in the
final rule provides reasonable goals and
endpoints to the information collection
requirements. The proposed objectives
provide a discrete list of the types of
information that must be collected as
part of the all appropriate inquiries
investigation. In addition, the
performance factors set boundaries
around the efforts that must be taken
and the cost burdens that must be
incurred to obtain the required
information. The fact that the rule is
framed within a primary objective, to
“identify conditions indicative of
releases and threatened releases of
hazardous substances,” actually reduces
the open-ended nature of the
investigation and establishes an overall
goal for the inquiries.
Commenters who advocated that a
checklist approach (or an approach not
based upon overall objectives and
performance factors) is superior because
they believe that it would better provide
for a stopping point in the investigation
may have misunderstood the statutory
requirements that must be met to obtain
a defense to ERCLA liability. These
commenters may have incorrectly
assumed that the completion of the all
appropriate inquiries investigation is 1 all
that is required to obtain liability
protection. The conduct of all
appropriate inquiries is only one
requirement for obtaining relief from
CERCLA liability. Prospective
landowners must conduct all
appropriate inquiries prior to acquiring
a property to qualify for a defense to
CERCLA liability as an innocent
landowner. bona fide prospective
purchaser or contiguous landowner.
However, once a property is acquired,
the property owner must comply with
all of the other statutory criteria
necessary to qualify for the liability
protections. In particular, landowners
must undertake “reasonable steps” to
“stop any continuing releases.”
Therefore, the final rule’s objective of
identifying conditions indicative of
releases and threatened releases of
hazardous substances on, at, in, or to a
property links appropriately with the
statutory criteria requiring the
landowner to address such releases to
qualify for the liability protections.
Conducting the inquiries merely in
compliance with a checklist and
without the purpose of meeting an
overall objective could result in an
inability to recognize the value of
certain types of information or in
chasing down multiple sources of
information that may not have added
value for meeting the overall objective
of the investigation. A lack of
information or an inability to obtain
information that may affect the ability of
an environmental professional to
determine whether or not there are
conditions indicative of a release or
threatened release of a hazardous
substance (or other contaminant) on, at,
in or to a property can have significant
consequences regarding a prospective
landowner’s ultimate ability to claim
protection from CERCLA liability.
Failure to identify a release during the
conduct of all appropriate inquiries
does not relieve the property owner
from the responsibility to take
reasonable steps and address the
release. Even if the Agency agreed with
the commenters and adopted a
“checklist” approach for the regulation,
simply conducting the checklist of
activities and ending the investigation
after each activity is conducted would
not result in protection from CERCLA
liability (as commenters claimed).
The final rule also establishes that in
those cases where certain information
included in the list of regulatory
objectives ( 312.20(e)) cannot be found
or obtained within the parameters of the
performance factors, such data gaps
must be identified and the significance
of the missing information with regard
to the environmental professional’s
ability to render an opinion on the
presence of conditions indicative of
releases and threatened releases be
documented. Exhaustive and costly
efforts do not have to be made to access
all available sources of data and find
every piece of data and information
about a property. Nor does the rule
require that duplicative information be
sought from multiple sources. The
inquiries and the overall investigation
must be undertaken to meet the data
collection objectives and primarily
determine the environmental conditions
of the property. Structuring the
standards around such objectives will
render the results of the investigation
more valuable to a landowner in his or
her efforts to comply with the post
acquisition continuing obligations for
obtaining the CERCLA liability
protections than an approach framed
around a mere checklist of activities.
In retaining the proposed objectives
and performance factors, the final rule
allows that an all appropriate inquiries
investigation need not address each of
the regulatory criterion in any particular
sequence. In addition, information
relevant to more than one criterion need
not be collected twice, and a single
source of information may satisfy the
requirements of more than one criterion
and more than one objective. However,
the information required to achieve each
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66087
of the objectives and performance
factors must be obtained for the all
appropriate inquiries investigation to be
complete. Although compliance with
the all appropriate inquiries
requirements ultimately will be
determined in court, the final rule
allows the prospective landowner or
grantee and environmental professional
to determine the best process and
sequence for collecting and analyzing
all required information. The sequence
of activities and the sources of
information used to collect any required
information is left to the judgment and
expertise of the environmental
professional, provided that the overall
objectives and the performance factors
established for the final rule are met.
In performing the inquiries, including
but not limited to conducting
interviews, collecting historical data
and government records, and inspecting
the subject property and adjoining
properties. all parties undertaking all
appropriate inquiries must be attentive
to the fact that the primary objectives of
the regulation are to identify the
following types of information about the
subject property:
• Current and past property uses and
occupancies;
• Current and past uses of hazardous
substances;
• Waste management and disposal
activities that could have caused
releases or threatened releases of
hazardous substances;
• Current and past corrective actions
and response activities undertaken to
address past and on-going releases of
hazardous substances;
• Engineering controls;
• Institutional controls; and
• Properties adjoining or located
nearby the subject property that have
environmental conditions that could
have resulted in conditions indicative of
releases or threatened releases of
hazardous substances on, at, in, or to the
subject property.
EPA notes that in the case of
brownfields granlees, the scope of each
of the activities listed above may be
broader if the grant or cooperative
agreement includes within its scope the
assessment of a property for conditions
indicative of releases or threatened
releases of petroleum and petroleum
products. controlled substances, or
other contaminants.
The final performance factors for
achieving the objectives set forth above
are set forth in § 312.20(e) and require
the persons conducting the inquiries to:
(1) Cather the information that is
required for each standard and practice
that is publicly available, obtainable
from its source within reasonable time
and cost constraints, and which can
practicably be reviewed, and (2) review
and evaluate the thoroughness and
reliability of the information gathered in
complying with each standard and
practice, taking into account
information gathered in the course of
complying with the other standards and
practices of this subpart. In complying
with § 312.20(f)(2), if the environmental
professional or person conducting the
inquiries determines through such
review and evaluation that the
information is either not thorough or not
reliable, then further inquiries should be
made to ensure that the information
gathered is both thorough and reliable.
The performance factors are provided as
guidelines to be followed in conjunction
with the final objectives for the all
appropriate inquiries.
M. What Are institutional Controls’
The final rule requires the
identification of institutional controls
placed on the subject property. As
defined in § 312.10, institutional
controls are non-engineered
instruments, such as administrative and
legal controls, that among other things,
can help to minimize the potential for
human exposure to contamination, and
protect the integrity of a remedy by
limiting land or resource use. For
example, an institutional control might
prohibit the drilling of a drinking water
well in a contaminated aquifer or
disturbing contaminated soils.
Institutional controls also may be
refened to as land use controls, activity
and use limitations, etc., depending on
the program under which a response
action is conducted or a release is
addressed.
Institutional controls are typically
used whenever contamination precludes
unlimited use and unrestricted exposure
at the property. Thus, institutional
controls may be needed both before and
after completion of the remedial action
or may be employed in place of a
remedial action. Institutional controls
often must remain in place for an
indefinite duration and, therefore,
generally need to survive changes in
property ownership (i.e., run with the
land) to be legally and practically
effective. Some common examples of
institutional controls include zoning
restrictions, building or excavation
permits, well drilling prohibitions,
easements and covenants.
The importance of identifying
institutional controls during all
appropriate inquiries is twofold. First,
institutional controls are usually
necessary and important components of
a remedy. Failure to abide by an
institutional control may put people at
risk of harmful exposure to hazardous
substances. Second, an owner wishing
to maintain protections [ mm CERCLA
liability as an innocent landowner,
contiguous property owner, or bona fide
prospective purchaseriñust fulfill
ongoing obligations to: (1) Comply with
any land use restrictions established or
relied on in connection with a response
action and (2) not Impede the
effectiveness or integrity of any
institutional control employed in
connection with a response action. For
a more detailed discussion of these
requirements please see EPA, Interim
Guidance Regarding Criteria
Landowners Must Meet in Order to
Qualify for Bona Fide Prospective
Purchaser, Contiguous Property Owner,
or Innocent Landowner Limitations on
CERCLA Liability (Common Elements,
2003).
Those persons conducting all
appropriate inquiries may identify
institutional controls through several of
the standards and practices set forth in
this rule. As noted, implementation of
institutional controls may be
accomplished through the use of several
administrative and legal mechanisms,
such as zoning restrictions, building
permit requirements, easements,
covenants. etc. For example, an
easement implementing an institutional
control might be identified through the
review of chain of title documents
under § 312.24(a). Furthermore,
interviews with past and present
owners, operators, or occupants
pursuant to § 312.23; and reviews of
federal, tribal, state, and local
government records under § 312.26, may
identify an institutional control or refer
a person to the appropriate source to
find an institutional control. For
example, a review of federal Superfund
records, including Records of Decision
and Action Memoranda, as well as other
information contained in the CERCLIS
database, may indicate that zoning was
selected as an institutional control or an
interview with a current operator may
reveal an institutional control as part of
an operating permit.
The final rule requires that all
appropriate inquiries include a search
for institutional controls placed upon
the subject property as part of the
requirements for reviewing federal,
state, tribal, and local government
records. A discussion of these
requirements is provided in section IV.S
below.
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66088 Federal Register/Vol. 70, No. 210/Tuesday, November 1, 2005 /Rules and Regulations
N. How Must Data Gaps Be Addressed
in the Conduct of All Appropriate
Inquiries?
Proposed Rule
The proposed rule required
environmental professionals,
prospective landowners, and
brownfields grant recipients to identify
data gaps that affect their ability to
identify conditions indicative of
releases or threatened releases of
hazardous substances (and. in the case
of grant recipients, pollutants,
contaminants, petroleum and petroleum
products, and controlled substances).
The proposed rule also required these
persons to identity the sources of
information consulted to address, or fill,
the data gaps and then comment upon
the significance of the data gaps with
regard to the ability to identify
conditions indicative of releases or
threatened releases of hazardous
substances on, at, in or to the subject
property. The proposed rule defined a
data gap as a lack of or an inability to
obtain information required by the
standards and practices listed in the
proposed regulation. despite good faith
efforts by the environmental
professional or the prospective
landowner or grant recipient to gather
such information.
Public Comments
Some commenters raised concerns
that the proposed definition of a data
gap may result in difficulties in
determining when an all appropriate
inquiries investigation is complete.
These commenters stated that the need
to identify and comment on the
significance of data gaps may render it
difficult to complete an investigation,
that could potentially affect a property
owner’s ability to claim protection from
CERCLA liability. Other commenters
asserted that because an investigation
could be considered complete despite
the existence of a data gap, a regulatory
loophole exists (in the opinion of the
commenters) that will result in the
property owner’s being able to claim
protection from CERCLA liability even
when the all appropriate inquiries
investigation results in a failure to
identify a release or threatened release
at a property.
Some commenters stated that the
proposed requirement to identify data
gaps, or missing information, that may
affect the environmental professional’s
ability to render an opinion regarding
the environmental conditions at a
property and comment on their
significance in this regard will lend
credibility to the inquiry’s final report.
Final Rule
We are retaining the proposed
definition of data gap and the proposed
requirements for identifying and
commenting on the significance of data
gaps. For the purposes of today’s final
rule, a “data gap” is a-lack of or inability
to obtain information required by the
standards and practices listed in the
regulation, despite good faith efforts by
the environmental professional or the
prospective landowner (or grant
recipient) to gather such information
pursuant to the objectives for all
appropriate inquiries. In today’s final
rule, § 312.20(g) requires environmental
professionals, prospective landowners,
and grant recipients to identify data
gaps that affect their ability to identify
conditions indicative of releases or
threatened releases of hazardous
substances (and in the case of grant
recipients pollutants, contaminants,
petroleum and petroleum products, and
controlled substances). The final rule
requires such persons to identify the
sources of information consulted to
address the data gaps and comment
upon the significance of the data gaps
with regard to the ability to identify
conditions indicative of releases or
threatened releases. Section 312.21(c)(2)
also requires that the inquiries report
include comments regarding the I
significance of any data gaps on the
environmental professional’s ability to
provide an opinion as to whether the
inquiries have identified conditions
indicative of releases or threatened
releases.
In response to issues raised by
commenters, we point out that the final
regulation, as did the proposal, requires
that environmental professionals
document and comment on the
significance of only those data gaps that
“affect the ability of the environmental
professional to identify conditions
indicative of releases or threatened
releases of hazardous substances * * *
on, at, in, or to the subject property.” If
certain information included within the
objectives and performance factors for
the final rule cannot be found and the
lack of certain information, in light of
all other information that was collected
about the property, has no bearing on
the environmental professional’s ability
to render an opinion regarding the
environmental conditions at the
property, the final rule does not require
the lack of such information to be
documented in the final report. Given
the restriction on the type of data gaps
that must be documented, and given
that the documentation is restricted to
instances where the lack of information
hinders the ability of the environmental
professional to render an opinion
regarding the environmental conditions
at the property, we disagree with the
commenters who assert that the
requirement is overly burdensome or
will result in the inability to complete
the required investigations.
Commenters who asserted that the
requirement to document data gaps
would result in a ‘loophole” that would
allow property owners to claim
protection from CERCLA liability after
conducting an incomplete all
appropriate inquiries investigation may
have misunderstood the scope of the
rule and the statutory requirements for
obtaining the liability protections. As
explained in detail in Section II of this
preamble, the conduct of all appropriate
inquiries is only one requirement
necessary for obtaining protection from
CERCLA liability. The mere fact that a
prospective landowner conducted all
appropriate inquiries does not provide
an individual with protection from
CERCLA liability. To qualify as a bona
fide prospective purchaser, innocent
landowner or a contiguous property
owner, a person must, in addition to
conducting all appropriate inquiries
prior to acquiring a property, comply
with all of the other statutory
requirements. These criteria are
summarized in section ll.D. of this
preamble. The all appropriate inquiries
investigation may provide a prospective
landowner with necessary information
to comply with the other post..
acquisition statutory requirements for
obtaining liability protections. The
conduct of an incomplete all
appropriate inquiries investigation, or
the failure to detect a release during the
conduct of all appropriate inquiries,
does not exempt a landowner from his
or her post.acquisition continuing
obligations under other provisions of
the statute. Failure to comply with any
of the statutory requirements may be
problematic in a claim for protection
from liability.
The final rule retains the requirement
to identify data gaps, address them
when possible, and document their
significance. Prospective landowners
may wish to consider the potential
significance of any data gaps, that may
exist after conducting the pro-
acquisition all appropriate inquiries in
assessing their obligations to fulfill the
additional statutory requirements after
purchasing a property.
If a person properly conducts all
appropriate inquiries pursuant to this
rule, including the requirements
concerning data gaps at § 312.10,
312.20(g) and 312.21(c)(2), the person
may fulfill the all appropriate inquiries
requirements of GERCLA sections
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66089
107(q), 107(r), and 101 (35), even when
there are data gaps in the inquiries.
However, as explained further in this
preamble, fulfilling the all appropriate
inquiries requirements does not, by
itself, provide a person with a
protection from or defense.to CERCI.A
liability. Failure to identify a release or
threatened release during the conduct of
all appropriate inquiries does not negate
the landowner’s continuing
responsibilities under the statute,
including the requirements to take
reasonable steps to stop the release,
prevent a threatened release, and
prevent exposure to the release or
threatened release once the landowner
has acquired a property. Also, if an
existing institutional control or land use
restriction is not identified during the
conduct of all appropriate inquiries
prior to the acquisition of a property, a
landowner is not exempt from
complying with the institutional control
or land use restriction after acquiring
the property. None of the other statutory
requirements for the liability protections
is satisfied by the results of the all
appropriate inquiries.
We emphasize that the mere fact that
a prospective landowner conducted all
appropriate inquiries does not provide
an individual with a defense to or
limitation from CERCLA liability. To
qualify as a bona fide prospective
purchaser, innocent landowner or a
contiguous property owner, a person
must, in addition to conducting all
appropriate inquiries prior to acquiring
a property, comply with all of the other
statutory requirements. These criteria
are summarized in section lID, of this
preamble. The all appropriate inquiries
investigation may provide a prospective
landowner with necessary information
to comply with the other post-
acquisition statutory requirements for
obtaining liability protections. The
failure to detect a release during the
conduct of all appropriate inquiries
does not exempt a landowner from his
or her post-acquisition continuing
obligations under other provisions of
the statute.
Section 312.20(g) of the final rule
points out that one way to address data
gaps may be to conduct sampling and
analysis. The final regulation does not
require that sampling and analysis be
conducted to comply with the all
appropriate inquiries requirements. The
regulation only notes that sampling and
analysis may be conducted, where
appropriate, to obtain information to
address data gaps. The Agency notes
that sampling and analysis may be
valuable in determining the possible
presence and extent of potential
contamination at a property. Such
information may be valuable for
determining how a landowner may best
fulfill his or her post-acquisition
continuing obligations required under
the statute for obtaining protection from
CERCLA liability.
O.DoSindfl Quantities of HazüY 1ous
Substances That Do Not Pose Threats to
Human Health and the Environment
Hove To Be identified in the inquiries?
Proposed Rule
The environmental professional
should identify and evaluate all
evidence of releases or threatened
releases on, at, in or to the subject
property, in accordance with generally
accepted good commercial and
customary standards and practices.
However, the proposed rule provided
that the environmental professional
need not specifically identify, in the
written report prepared pursuant to
§ 312.21(c), extremely small quantities
or amounts of contaminants, so long as
the contaminants generally would not
pose a threat to human health or the
environment.
Public Comments
EPA received no significant comment
on the proposed provision on the
identification of extremely small
quantities of contamination.
Final Rule
The final retains the provision that
the environmental professional need not
specifically identify, in the written
report prepared pursuant to §312.21(c).
extremely small quantities or amounts
of contaminants, so long as the
contaminants generally would not pose
a threat to human health or the
environment.
P What Are the Requirements for
interviewing Past and Present Owners,
Operators, and Occupants?
Proposed Rule
CERCLA section 101 (35)(B)(iii)(ll)
requires EPA to include in the standards
and practices for all appropriate
inquiries “interviews with past and
present owners, operators, and
occupants of the facility for the purpose
of gathering information regarding the
potential for contamination at the
facility.” The Agency proposed that the
inquiry of the environmental
professional include interviews with the
current owner(s) and occupant(s) of the
subject property. In addition, the
proposed rule required that interviews
be conducted with current and past
facility managers with relevant
knowledge of the property, a& well as
past owners, occupants, or operators,
and employees of current and past
occupants of the property, as necessary,
to meet the proposed objectives and
performance factors. In the case of
abandoned properties, the Agency
proposed that the inquiry of the
environmental professional indude.
interviewing one or more owners or
occupants of neighboring or nearby
properties to obtain information on
current and past uses of the property
and other information necessary to meet
the objectives and performance factors.
Public Comments
Several commenters asserted that the
requirement to interview current and
past owners and occupants of a property
may be burdensome. Commenters gave
several reasons for asserting that
interviews may be burdensome. Some
commenters said it is difficult to locate
current and past owners and occupants.
Other commenters questioned the
accuracy of any information that would
be provided by a current or past owner
or occupant. One commenter expressed
concern that the requirement to conduct
interviews of current and past owners
and occupants of a property could result
in the environmental professional
divulging information regarding the sale
of the property against the prospective
landowner’s wishes.
In the case of the proposed interview
requirements for abandoned properties,
some commenters opposed the
requirement to interview at least one
owner or occupant of a neighboring
property. Commenters stated that the
proposed requirement was unreasonable
and that it is impractical to attempt to
find and contact neighboring property
owners and occupants. Some
commenters said that neighboring
property owners and occupants can not
be relied upon to provide accurate
information about a property.
Final Rule
The requirements for conducting
interviews of past and present owners,
operators, and occupants of the subject
property are included in § 312.23. The
final rule identifies these interviews as
being within the scope of the inquiry of
the environmental professional.
Therefore, all interviews must be
conducted by the environmental
professional or by someone under the
supervision or responsible charge of the
environmental professional. The intent
is that an individual meeting the
definition of an environmental
professional ( 312.10) must oversee the
conduct of, or review and approve the
results of, the interviews to ensure the
interviews are conducted in compliance
with the objectives and performance
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66090 Federal Register / Vol. 70, No. 210 / Tuesday, November 1, 2005 / Rules and Regulations
factors ( 312.20). This is to ensure that
the information obtained from the
interviews provides sufficient
information, in conjunction with the
results of all other inquiries, to allow
the environmental professional to
render an opinion with regard to
conditions at the property that may be
indicative of releases or threatened
releases of hazardous substances (and
pollutants, contaminants, petroleum
and petroleum products, and controlled
substances, if applicable).
The final rule requires the
environmental professional’s inquiry to
include interviewing the current owner
and occupant of the subject property. In
addition, the rule provides that the
inquiry of the environmental
professional include interviews of
additional individuals, including
current and past facility managers with
relevant knowledge of the property, past
owners, occupants. or operators of the
subject property. or employees of
current and past occupants of the
subject property, as necessary to meet
the rule’s objectives and in accordance
with the performance factors. A primary
purpose of the interviews portion of the
all appropriate inquiries is to obtain
information regarding the current and
past ownership and uses of the
property, and obtain information
regarding the potential environmental
conditions of the property. The final
rule does not prescribe particular
questions that must be asked during the
interview. The type and content of any
questions asked during interviews will
depend upon the site-specific
conditions and circumstances and the
extent of the environmental
professional’s (or other individual’s
under the supervision or responsible
charge of the environmental
professional) knowledge of the property
prior to conducting the interviews.
Therefore, the fInal rule does not
include specific questions for the
interviews, but requires that the
interviews be conducted in a manner
that achieves the objectives and
performance factors. Interviews with
current and past owners and occupants
may provide opportunities to collect
information about a property that was
not previously recorded nor well
documented and may provide valuable
perspectives on how to find or interpret
information required to complete other
aspects of the all appropriate inquiries.
Information gathered during the
interview portion of the all appropriate
inquiries may in turn provide valuable
information for the on-site visual
inspection. Persons conducting the
interviews of current and past owners
and occupants may want to spend some
time during the interviews requesting
information on the locations of
operations or units used to store or
manage hazardous substances on the
property.
In the case of properties where there
may be more than one owner or
occupant, or many owners or occupants,
the final rule requires the inquiry to
include interviews of major occupants
and those occupants that are using,
storing, treating, handling or disposing
(or are likely to have used, stored,
treated, handled or disposed) of
hazardous substances (or pollutants,
contaminants, petroleum and petroleum
products, and controlled substances, as
applicable) on the property. The rule
does not specify the number of owners
and occupants to be interviewed. The
environmental professional must
perform this function in the manner that
best fulfills the objectives and
performance factors for the inquiries in
§ 312.20(e) and (I). Environmental
professionals may use their professional
judgment to determine the specific
occupants to be interviewed and the
total number of occupants to be
interviewed in seeking to comply with
the objectives and performance factors
for the inquiries. Interviews must be
conducted with individuals most likely
to be knowledgeable about the current
and past uses of the property,
particularly with regard to current and
past uses of hazardous substances on
the property.
In response to corn menters who
asserted that the proposed interview
requirements are burdensome, we point
out that the statutory criteria in CERCLA
section 101 (35)(B)(iii) include
“interviews with past and present
owners, operators. and occupants of the
facility for the purpose of gathering
information regarding the potential for
contamination at the facility.” EPA
asserts that it was clearly congressional
intent that the all appropriate inquiries
investigation include the conduct of
interviews with current and past owners
and occupants. We also assert that
current and past owners and occupants
of a property may be excellent sources
of information regarding past and on-
going uses of the property as well as the
types of waste management activities
that were undertaken at the property.
Given that the ASTM E1527 Phase 1
Environmental Site Assessment Process,
the interim standard for the conduct of
all appropriate inquiries, includes
requirements for conducting interviews
with the current owners and occupants
of a property and provides that other
owners and occupants are good
additional sources of information about
property uses and potential
contamination at a property, we
disagree with commenters who asserted
that the proposed and final
requirements for conducting interviews
will be overly burdensome.
In the case of abandoned properties,
the final rule requires the inquiry of the
environmental professional to include
interviews with one or more owners or
occupants of neighboring or nearby
properties. In the case of abandoned
properties, it most likely wilt be
difficult to identify or interview current
or past owners and occupants of the
property. Therefore, the final rule
requires that at least one owner or
occupant of a neighboring property be
interviewed to obtain information
regarding past owners or uses of the
property in cases where the subject
property is abandoned and no current
owner is available to be interviewed.
The final rule defines an abandoned
property as a “property that can be
presumed to be deserted, or an intent to
relinquish possession or control can be
inferred from the general disrepair or
lack of activity thereon such that a
reasonable person could believe that
there was an intent on the part of the
current owner to surrender rights to the
property.” As is the case with
interviews conducted with current and
past owners and occupants of the
property, interview questions should be
developed prior to the conduct of the
interviews, and tailored to gather
information to achieve the rule’s
objectives and performance factors. The
final rule contains no specific
requirements with regard to the type or
content of questions that must be asked
during the interviews.
EPA disagrees with commenters who
stated that it will be difficult to locate
and contact neighboring property
owners and occupants. The final rule, as
did the proposed rule, requires that the
environmental professional only locate
and interview one neighboring property
owner or occupant and only in those
cases where no owner or occupant of
the subject property can be identified.
An environmental professional should
be able to locate one owner or occupant
of a neighboring property when
conducting the on-site visual inspection
of the property. If the environmental
professional cannot easily locate an
owner and occupant of a neighboring
property, he or she may enlist the
assistance of local government officials
in identifying a neighboring property
owner or occupant. As is the case with
information ascertained from any
interview, the environmental
professional must apply his or her
judgment when drawing conclusions
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66091
based on the information provided in
interviews with neighboring property
owners and occupants and should
attempt to verify any information
provided by reviewing other available
sources of information.
Q. What Are the Requirements for
Reviews of Historical Sotirt es of
Information?
Proposed Rule
Historical documents and records
may contain information regarding past
ownership and uses of a property that
may be essential to assessing the
potential for environmental conditions
indicative of releases or threatened
releases of hazardous substances to be
present at the property. Historical
documents and records, among others,
may include chain of title documents,
land use records, aerial photographs of
the property, fire insurance maps, and
records held at local historical societies.
The proposed rule required that the
inquiry of the environmental
professional Include a review of
historical documents and records for the
subject property that document the
ownership and use of the property for
a period of time as far back in the
history of the property as it can be
shown that the property contained
struCtures, or from the time the property
was first used for residential,
agricultural, commercial, industrial, or
governmental purposes.
Public Comments
Some commenters raised concerns
regarding the proposed requirements to
review historical records covering “a
period of time as far beck in the history
of the subject property as it can be
shown that the property contained
structures or from the time the property
was first used for residential,
agricultural, commercial, industrial, or
governmental purposes.” Commenters
said that the proposed historical scope
of the records search is too extensive.
Some commenters requested that in the
final rule EPA adopt the provisions for
historical records searches provided in
the ASTM E1527—2000 standard.
Several commenters requested that EPA
explicitly require as part of the review
of historical records a review of chain of
title documents. The commenters
asserted that a review of chain of title
documents is the only reliable way to
identify previous owners of a property.
Final Rule
The statutory criteria in the
Brownfields Amendments require that
reviews of historical sources of
information be conducted to “determine
previous uses and occupancies of the
real property since the property was
first developed.” The final rule requires
(as did the proposed rule) that historical
records on the subject property be
searched for information on the
property covering a time period as far
— back in history-as there is
documentation that the property
contained structures or was placed into
use of some form. This provision
follows the statutory language. In
addition, the final rule requires that
historical documents and information
be reviewed to obtain necessary
information for meeting the objectives
and performance factors in § 312.20(e)
and (f). If a search of historical sources
of information results in an inability of
the environmental professional to
document previous uses and
occupancies of the property as far back
in history as it can be shown that the
property contained structures or was
placed into use of some form, and such
information is not acquired elsewhere
during the investigation then it must be
documented as a data gap to the
inquiries. The requirements of
§ 312.20(g) and 312.21(c)(2) are
applicable to all instances in the all
appropriate inquiries that result in data
gaps.
Despite the concerns raised by some
commenters regarding the scope of the
historical records review, we assert that
the scope of the requirements in the
final rule (as did the scope of the
proposed requirements) reflects the
statutory language provided in CERCLA
section 101 (35)(B)(iii). The statutory
criterion provide that all appropriate
inquiries include reviews of historical
sources * * * to determine previous
uses and occupancies of the real
property since the property was first
developed.” We point out that the final
rule does allow the environmental
professional to exercise his or her
professional judgment “in context of the
facts available at the time of the inquiry
as to how far back in time it is necessary
to search historical records.’ We believe
that this provides sufficient flexibility to
allow for any circumstances where, due
to the availability of other information
about a property an environmental
professional may conclude that a
comprehensive search of historical
records is not necessary to meet the
objectives and performance factors.
In response to commenters that
requested that EPA adopt the provisions
of the ASTM E1527—2000 standard for
conducting searches of historical
records, we assert that the scope of the
historical records search in today’s final
rule is very similar to the scope of
ASTM £1527 standard. The ASTM
E1527 standard, at section 7.3.1,
requires that historical sources of
information be searched to identify “all
obvious uses of the property* * afrom
the present, back to the property’s
obvious first developed use, or back to
1940, whichever is earlier.” Given that
the language of both.the ASTM E1527
standard and the requirements in the
final rule for conducting historical
records searches is very similar, we
conclude that the intent is the same and
the final rule represents no change from
current good customary business
practice. In addition, the final rule
provides for sufficient flexibility both
within the application of the
performance factors to the historical
records search requirements and in
allowing the environmental professional
to apply his or her judgment “in the
context of the facts available at the time
of the inquiry.”
The final rule does not require that
any specific type of historic information
be collected. In particular, the rule does
not require that persons obtain a chain
of title document for the property. The
rule allows for the environmental
professional to use professional
judgment when determining what types
of historical documentation may
provide the most useful information
about a property’s ownership, uses, and
potential environmental conditions
when seeking to comply with the
objectives and performance factors for
the inquiries. Although we agree with
commenters that chain of title
documents may serve as an important
source of information regarding past
ownership of a property, it may not be
the only source of this information. To
the extent that chain of title documents
are otherwise obtained for other
purposes during the conduct of a
property sale or transaction, we believe
that these documents can easily be
made available to the environmental
professional by the prospective
landowner. Given that the final rule
requires that historical records be
searched for information on previous
uses and ownership of a property for as
far back in the history of property as can
be shown that the property contained
structures or was first used for
residential, agricultural, commercial,
industrial or governmental purposes, if
chain of title documents are the best and
most easily attainable source of this
information, we assume that such
documents will be obtained and used by
the environmental professional.
Given the wide variety of property
types and locations to which the final
rule could apply, any list of specific
documents could result in undue
burdens on many prospective
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landowners and grantees due to
difficulties in collecting any specific
document for any particular property or
property location. Therefore, the final
requirements for reviewing historical
documents allow the prospective
landowner or grantee and the
environmental professlonah ruse their
judgment, in accordance with generally
accepted good commercial and
customary standards and practices, in
locating the best available sources of
historical information and reviewing
such sources for information necessary
to comply with the rule’s objectives and
performance factors.
As explained in section IV.J of this
preamble, the prospective landowner,
grantee, or environmental professional
may make use of previously collected
information about a property when
conducting all appropriate inquiries.
The collection of historical information
about a property may be a particular
case where previously collected
information may be valuable, as well as
easily accessible. In addition, nothing in
the rule prohibits a person from using
secondary sources (e.g., a previously
conducted title search) when gathering
information about historical ownership
and usage of a property. As explained in
section IV.J, information must be
updated if it was last collected more
than 180 days prior to the date of
acquisition of the property.
B. What Are the Requirements for
Searching for Recorded Environmental
Cleanup Liens?
For purposes of this rule, recorded
environmental cleanup liens are
encumbrances on property for the
recovery of incurred cleanup costs on
the part of a state, tribal or federal
government agency or other third party.
Recorded environmental cleanup liens
often provide an indication that
environmental conditions either
currently exist or previously existed on
a property that may include the release
or threatened release of a hazardous
substance. The existence of an
environmental cleanup lien should be
viewed as an indicator of potential
environmental concerns and as a basis
for further investigation into the
potential existence of on-going or
continued releases or threatened
releases of hazardous substances on, at,
in, or to the subject property.
Proposed Rule
The proposed rule required that
prospective landowners and grantees, or
environmental professionals on their
behalf, search for environmental
cleanup liens that are recorded under
federal, tribal, state, or local law.
Environmental cleanup liens that are
not recorded by government entities or
agencies are not addressed by the
language of the statute (the statute
speaks only of “recorded liens”);
therefore, the proposed rule required
that only a search for recorded
environmental liens be included in the—
all appropriate inquiries investigation.
Public Comments
Some commenters asked that EPA
state more clearly that the responsibility
for searching for environmental cleanup
liens rests with the prospective
landowner and not the environmental
professional. A few commenters
requested that the Agency provide some
guidance on where to find recorded
environmental cleanup liens.
Final Rule
EPA is finalizing the proposed
requirements to search for recorded
environmental cleanup liens without
changes. The all appropriate inquiries
investigation must include a search for
recorded environmental cleanup liens.
The final rule allows that the search for
recorded environmental cleanup liens
be performed either by the prospective
landowner or grantee, or through the
inquiry of the environmental
professional. The search for such liens
may not necessarily require the I
expertise of an environmental
professional and therefore may be more
efficiently or more cost-effectively
performed by the prospective
landowner or grantee, or his or her
agent. Such liens may be included as
part of the chain of title documents or
may be recorded in some other manner
or format by state or local government
agencies. If such information is
collected by the prospective landowner
or grantee, or other agent who is not
under the supervision or responsible
charge of the environmental
professional, the final rule allows for,
but does not require, the information
that is collected by or on the behalf of
the prospective landowner or grantee to
be provided to the environmental
professional. If the information is
provided to the environmental
professional, he or she can then make
use of such information during the
conduct of the all appropriate inquiries
and when rendering conclusions or
opinions regarding the environmental
conditions of the property. If such
information is not provided to the
environmental professional and the lack
of such information affects the ability of
the environmental professional to
identify conditions indicative of
releases or threatened releases of
hazardous substances on, at, in or to the
property, the lack of information should
be noted as a data gap (per the
requirements of § 312.21(b)(2D.
Although some commenters requested
that EPA be more explicit in the final
rule in requiring that the search for
recorded environmental cleanup liens
be conducted by the prospective
landowner (or grantee), we believe that
the decision of who conducts the search
may be best left up to the judgment of
the prospective landowner or grantee
and environmental professional. The
final rule provides in § 312.22 that the
search for recorded environmental
cleanup liens can fall outside the
inquiries conducted by the
environmental professional. The search
for recorded environmental cleanup
liens is not included as part of the
requirements governing the results of an
inquiry by an environmental
professional (S 312.21). Therefore, the
search may be conducted by the
prospective landowner or grantee, his or
her attorney or agent, or the
environmental professional.
We offer one caution about the
conclusion that might be drawn if no
recorded environmental cleanup liens
are found. If EPA is conducting a
cleanup at site at the time it is
transferred or acquired, EPA is able to
record a lien post acquisition. For
example, one type of lien, often referred
to as a windfall lien, has no statute of
limitations and arises at the time EPA
first spends Superfund money. States
and localities may have similar
mechanisms. Therefore, even if a
recorded environmental cleanup lien is
not found during the conduct of the all
appropriate inquiries investigation, one
may be recorded at a later date if EPA
is undertaking a cleanup or response
action at the property.
With regard to commenters who
requested that EPA provide guidance on
where to search for environmental
cleanup liens, we advise that
prospective landowners and grantees to
seek the advice of a local realtor, real
estate attorney, title company, or other
real estate professional. Environmental
cleanup liens may be recorded as part
of the land title records or as part of
other state or local government land or
real estate records. Recorded
environmental cleanup liens may be
recorded in different places, depending
upon the particular state and particular
locality in which the property is
located.
S. What Are the Requirements for
Reviewing Federal, State, Tribal, and
Local Government Records?
Federal, tribal, state and local
government records may contain
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66093
information regarding environmental
conditions at a property. In particular,
government records, or data bases of
such information. may include
information on previously reported
releases of hazardous substances,
pollutants, contaminants, petroleum
and petroleum products and controlled
substances. Government records and
available databases can provide valuable
information on remedial actions and
emergency response activities that may
have been conducted at a particular
property. Government records also may
include information on institutional
controls related to a particular property.
For example, in the case of NPL sites,
EPA Superfund records, including
Action Memoranda and Records of
Decision, may have information on
institutional controls in place at such
properties. Government records also
may include information on activities or
property uses that could cause releases
or threatened releases to be present at a
property.
Proposed Rule
The proposed rule required that
federal, state, tribal and local
government records be searched for
information necessary to achieve the
objectives and performance factors,
including information regarding the use
and occupancy of and the
environmental conditions at the subject
property and conditions of nearby or
adjoining properties that could have a
impact upon the environmental
conditions of the subject property. The
proposed rule included requirements to
search federal, tribal, state, and local
government records for information
indicative of environmental conditions
at the subject property.
The proposed rule also included
requirements to review government
records, or data bases of information
contained in government records, for
information about nearby and adjoining
properties. Reviews of such records may
provide valuable information regarding
the potential impact to the subject
property from hazardous substances and
petroleum contamination migrating
from contiguous or nearby properties.
The proposed rule included required
minimum search distances for
government records searches of nearby
properties.
To account for property-specific and
regionally-specific conditions that can
influence the appropriateness of the
proposed search distances for any given
type of record and property, the
proposed rule allowed the
environmental professional to adjust the
applicable search distances when
searching for information about off-site
properties by applying professional
judgment. For example, appropriate
search distances for properties located
in rural settings may differ from
appropriate search distances for urban
settings. In addition, ground water flow
direction, depth to ground water, arid
weather conditions, the types of
facilities located on nearby properties,
and other factors may influence the
degree of impact to a property from off-
site sources. Therefore, the proposed
rule allowed the environmental
professional to adjust any or all of the
proposed minimum search distances for
any of the record types, based upon
professional judgment and the
consideration of site-specific conditions
or circumstances when seeking to
achieve the proposed objectives and
performance factors for the required
inquiries.
Public Comments
The Agency received a variety of
comments in which commenters
expressed concerns about the
applicability or adequacy of specific
types of government records included in
the proposed rule (e.g., CERCLIS
records, information on RCRA facilities,
ERNS). A few commenters raised
concerns about the availability of tribal
records. Several commenters raised
concerns regarding the availability ?
government records on institutional
controls. Commenters also pointed out
that, given the lack of available
databases and other Information on
institutional controls, it may be
particularly difficult to search for
institutional controls associated with
adjoining and nearby properties.
Final Rule
We are finalizing the requirements for
reviewing federal, state, tribal, and local
government data bases as proposed,
with one exception. The final rule
requires that government records and
available lists for institutional and
engineering controls be searched only
for information on such controls at the
subject property. All appropriate
inquiries investigations do not have to
include searches for institutional and
engineering controls in place at nearby
and adjoining properties. We made this
change because we agree with
commenters who pointed out that
information on institutional and
engineering controls may be difficult to
find as there are no available national
sources of this information. Only a few
states have available lists of institutional
controls. In addition, the information
that may be inferred from knowledge of
institutional and engineering controls
that are in place at adjoining and nearby
properties, i.e., that there was a
response action, a remedial action, or
corrective action taken at the site, can be
Inferred from information obtained from
other sources (e.g., CERCLIS, RCRIS,
state records of response actions).
It is important that prospective
landowners obtain information on
institutional and engineering controls in
place at the property being acquired. It
also may be important to locate
information on such controls in place at
nearby properties. To obtain the liability
protections afforded under CERCLA
(i.e., innocent landowner, contiguous
property owner, bona fide prospective
purchaser), the statute requires, as part
of the “continuing obligations,” that the
property owner comply with all land
use restrictions and not impede the
effectiveness of institutional controls.
Therefore, it is important that
information on institutional and
engineering controls be obtained by
prospective iandowners, even though
information about such controls may
not have been routinely obtained as part
of due diligence practices prior to
.today’s final rule (we note that the
current interim standard does include
provisions for searching for “activity
and use limitations”).
Routine “chain of title” reports may
not always contain information labeled
as institutional or engineering controls.
However, title companies may include,
as part of the chain of title reports
“restrictions of record on title” when
such restrictions are recorded because of
underlying environmental conditions at
a property. Therefore, when requesting
information on “institutional controls”
or “engineering controls” about a
property, prospective landowners,
grantees, and environmental
professionals may want to request
information on “restrictions of record
on title” as well, in case any available
information on institutional or
engineering controls is so labeled in the
chain of title records. In addition to
chain of title records, information on
institutional controls and engineering
controls may be recorded in local land
records. Also, some states are beginning
to create registries to track information
on institutional and engineering
controls. Therefore, prospective
landowners and grantees should
consider consulting these other sources
of information in addition to chain of
title records for information on
institutional and engineering controls.
In response to the commenters who
pointed out particular shortcomings
with specific sources of information
(e.g., CERCUS. RCRIS, ERNS) we point
out that the requirement to review
government records explicitly provides
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that the reviews be conducted in
compliance with the objectives and
performance standards. If a particular
source of information cannot be
accessed within a reasonable time frame
or within reasonable costs, then the
information should be sought from other
sources. In addition, if a particular
source of information will only provide
information that can more easily or
readily be found elsewhere, the
particular source does not have to be
obtained or consulted. If application of
the objectives and performance
standards to the requirement to review
government records results in an
inability to provide necessary
information (or information identified
as necessary in the objectives for the
final rule), then the lack of information
should be documented as a data gap in
the final report. In addition, the
environment professional should
comment on the significance the lack of
any information has on his or her ability
to identify conditions at the property
that are indicative of releases or
threatened releases of hazardous
substances (in compliance with
§ 312.21(c)(2)).
In response to commenters who
pointed out that it may be difficult to
obtain or gain access to tribal
government records, we point out that
such records need only be searched for
and reviewed in those instances where
the subject property is located on or
near tribal-owned lands. In these cases,
it is important to attempt, within the
scope of the rule’s objectives and
performance factors, to review such
records. When such records are not
available, necessary information should
be sought from other sources. When no
information is available and the
objectives and performance factors of
the final rule cannot be met and the
result is a lack of information that may
affect the environmental professional’s
ability to render an opinion regarding
the environmental conditions of a
property, the lack of information must
be documented as a data gap in
compliance with §312.21(c)(2).
The final rule requires that the
following types of government records
or data bases of government records be
reviewed to obtain information on the
subject property and nearby properties
necessary to meet the rule’s objectives
and performance standards:
1. Government records of reported
releases or threatened releases at the
subject property. including previously
conducted site investigation reports.
2. Government records of activities,
conditions, or incidents likely to cause
or contribute to releases or threatened
releases, including records documenting
regulatory permits that were issued to
current or previous owners or operators
at the property for waste management
activities and government records that
identify the subject pitiperty as the
location of landfills, storage tanks, or as
the location for generating and.handling
activities for hazardous substances,.
pollutants, contaminants, petroleum
and petroleum products, or controlled
substances.
3. CERCLIS records —EPA’s
Comprehensive Environmental
Response, Compensation, and Liability
Information System (CERCLIS) database
contains general information on sites
across the nation and in the U.S.
territories that have been assessed by
EPA, including sites listed on the
National Priorities List (NPL). ERCL1S
includes information on facility
location, status, contaminants,
institutional controls, and actions taken
at particular sites. CERCLIS also
contains information on sites being
assessed under the Superfund Program,
hazardous waste sites and potential
hazardous waste sites.
4. Government-maintained records of
public risks—the all appropriate
inquiries government records search
should include a search for available
records documenting public health
threats or concerns caused by, or related
to, activities currently or previously
conducted at the site.
5. Emergency Response Notification
System (ERNS) records—ERNS is EPA’s
data base of oil and hazardous substance
spill reports. The data base can be
searched for information on reported
spills of oil and hazardous substances
by state.
6. Government registries, or publicly
available lists of engineering controls,
institutional controls, and land use
restrictions. The all appropriate
inquiries government records search
must include a search for registries or
publicly available lists of recorded
engineering and institutional controls
and recorded land use restrictions. Such
records may be useful in identifying
past releases on, at, in, or to the subject
property or identifying continuing
environmental conditions at the
property.
The final rule requires that
government records be searched to
identify information relative to the
objectives and in accordance with the
performance factors on: (1) Adjoining
and nearby properties for which there
are governmental records of reported
releases or threatened releases (e.g.,
properties currently listed on the
National Priorities List (NPL), properties
subject to corrective action orders under
the Resource Conservation and
Recovery Act (RCRA), properties with
reported releases from leaking
underground storage tanks); (2)
adjoining and nearby properties
previously identified or regulated by a
government entity due to environmental
conditions at a site (e.g., properties
previously listed on the NPL, former
CERCL IS sites with notices of no further
response actions planned (NFRAP)); and
(3) adjoining and nearby properties that
have government-issued permits to
conduct waste management activities
(e.g., facilities permitted to manage
RCRA hazardous wastes).
In the case of government records
searches for nearby properties, the final
rule includes minimum search distances
(e.g., properties located either within
one mile or one-half mile of the subject
property) for obtaining and reviewing
records or data bases concerning
activities and facilities located on
nearby properties. The search distances
are based upon our best judgment
regarding the potential impacts that
incidents or circumstances at an
adjoining property may have on the
subject property. With the exception of
the required searches for institutional
and engineering controls, the search
distances finalized in today’s rule are
the search distances that were proposed
in the proposed rule. For example,
government records identifying
properties listed on the NPL must be
searched to obtain information on NPL
sites located within one mile of the
subject property. NPL sites located
beyond one mile of a property most
likely will have little or no impact on
the environmental conditions at the
subject property. In the case of two
types of records, records of hazardous
waste handler and generator records and
permits, records of registered storage
tanks, the final requirements specify
that such records only be searched for
information specific to the subject
property and adjoining properties (the
rule contains no requirement to search
for these two types of government
records for other nearby properties). The
final rule requires that available lists of
institutional controls and engineering
controls only be searched for
information on the subject property.
In the case of all the government
records listed above and in the final rule
in § 312.26, the requirements of this
criterion may be met by searching data
bases containing the same government
records mentioned in the list above that
are accessible and available through
government entities or private sources.
The review of actual records is not
necessary, provided that the same
information contained in the
government records and required to
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66095
meet the requirements of this criterion
and achieve the objectives and
performance factors for these
regulations is attainable by searching
available data bases.
The final rule allows the
environmental professional to adjust the
search distances for reviewing
-government records of nearby properties
based upon his or her professional
judgment. Environmental professionals
may consider one or more of the
following factors when determining an
alternative appropriate search distance:
• The nature and extent of a release;
• Geologic, hydrogeologic, or
topographic conditions of the subject
property and surrounding environment;
• Land use or development densities;
• The property type;
• Existing or past uses of surrounding
properties;
• Potential migration pathways (e.g.,
groundwater flow direction, prevalent
wind direction); or
• Other relevant factors.
The final rule requires environmental
professionals to document the rationale
for making any modifications to the
required minimum search distances
included in § 312.26 of the regulation.
T. What Are the Requirements for
Visual Inspections of the Subject
Property and Adjoining Properties?
Proposed Rule
The proposed rule required that an
on-site visual inspection of the subject
property be conducted as part of the all
appropriate inquiries investigations,
with one limited exception. The
proposed on-site visual inspection
requirements included requirements to
inspect any facilities and improvements
on the property as well as all areas
where hazardous substances are or may
have been used, stored, treated,
handled, or disposed. In addition, the
proposed rule included requirements to
visually inspect adjoining properties.
The proposal required that inspections
of adjoining properties be condlicted
from the property line, public right-of-
way, or other vantage point.
The proposed rule included a limited
exception from the requirement to
conduct the visual inspection “on-site.”
The proposed exception provided that
in unusual circumstances where an on-
site visual inspection cannot be
performed because of physical
limitations, remote and inaccessible
location, or another inability to obtain
access to the property, provided good
faith efforts are taken to obtain such
access and access to the property could
not be obtained, a visual inspection
could be conducted from an off-site
vantage point (e.g., property-line,
airplane, public right-of-way). To
qualify for the exception from the
requirement to conduct the inspection
on site, the proposed rule required that
the environmental professional
document the good faith efforts
undertaken to gain access to the
property and explain why such efforts
wore unsuccessful. The proposed rule
also required that the environmental
professional document what other
sources of information were consulted
to obtain information regarding the
potential envii’onmental conditions at
the property and the significance of the
failure to conduct the inspection on site
on his or her ability to identify
conditions indicative of releases or
threatened releases of hazardous
substances on, at, in, or to the subject
property.
In the preamble to the proposed rule,
EPA recommended that an
environmental professional conduct the
on-site visual inspection.
Public Comments
A few commenters stated that EPA
should not recommend, as we did in the
preamble to the proposed rule, that an
individual meeting the definition of
environmental professional conduct the
on-site visual inspection. These
commenters stated that anyone under
the responsible charge or supervision of
an environmental professional should
be able to conduct the on-site visual
inspection. Commenters stated, that by
recommending in the preamble that the
environmental professional conduct the
on-site visual inspection, the Agency
was effectively requiring an
environmental professional to conduct
the visual inspection. Other commenters
expressed support for the Agency’s
recommendation.
A few other commenters thought the
proposed exception from the
requirement to conduct the visual
inspection on site was “broad” and
“would increase the likelihood of
inspections not being performed and
contamination not being detected.”
These commenters expressed a concern
that any exception from the requirement
to conduct an on-site visual inspection
could open the door to abuse and result
in properties being transferred without
being inspected. Commentors raised
concerns that owners of uninspected
properties could obtain liability
protection by claiming to have fulfilled
the requirements of all appropriate
inquiries without knowledge of on-
going releases at a property.
Final Rule
The final rule, at § 312.27, retains the
proposed requirement that a visual on-
site inspection be conducted of the
subject property. The final visual on-site
inspection requirements include
requiremetits to inspect the facilities
and any improvements on the property,
as well as visually inspect areas on the
property where hazardous substances
may currently be or in the past may
have been used, stored, treated,
handled, or disposed of. We continue to
assert that, and commenters agreed, that
every all appropriate inquiries
investigation must include an on-site
visual inspection of the property. The
on-site inspection of a property most
likely will be an excellent source of
information regarding indications of
environmental conditions on a property.
The final rule requires that a visual on-
site inspection of the subject property be
conducted in all but a few very limited
cases. In addition, the final rule retains
the proposed requirement that in those
cases where physical limitations restrict
the portions of the property that may be
visually inspected, that the physical
limitations encountered during the
visual on-site inspection (e.g., weather
conditions, physical obstructions) must
be documented.
We note that persons conducting all
appropriate inquiries with monies
provided in a grant awarded under
CERCLA section 104(k)(2)(B) must,
depending on the terms and conditions
of the grant or cooperative agreement,
include within the scope of the on-site
visual inspection an inspection of the
facilities, improvements, and other areas
of the property where pollutants,
contaminants, petroleum and petroleum
products, or controlled substances may
currently be or in the past may have
been used, stored, treated, handled, or
disposed.
The visual on-site inspection of a
property during the conduct of all
appropriate inquiries may be the most
important aspect of the inquiries and
the primary source of information
regarding the environmental conditions
on the property. In all cases, every effort
must be made to conduct an on-site
visual inspection of a property when
conducting all appropriate inquiries.
We understand that a prospective
landowner, grantee, or environmental
professional, in some limited
circumstances, may not be able to obtain
on-site access to a property. Extreme
and prolonged weather conditions and
remote locations can impede access to a
property. A prospective landowner,
grantee or environmental professional
also could be unable to gain on-site
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66096 Federal Register! Vol. 70, No. 210/Tuesday, November 1, 2005/ Rules and Regulations
access to a property if the owner refuses
to provide access to the party. even after
the party exercises all good faith efforts
to gain access to the property (e.g.,
seeking assistance from state
government officials). Such
circumstances may arise in cases where
a local government becomes a last resort
purchaser of a potentially-contaminated
property that has little economic value.
The unique nature of such transactions
may result in a local government facing
an uncooperative or recalcitrant
property owner. Unlike commercial
property transactions between private
parties, where the parties’ economic and
legal liability interests and the ability to
abandon the transaction can work in
favor of the purchasing party’s ability to
gain access to a property prior to
acquisition. property transactions
between a private party and a local
government may not afford the local
government the same leverage, even if it
is in the public interest to attain
ownership of the property. This
situation may occur when the local
government seeks to assess, clean up,
and revitalize an area, but the owner of
the property is unreachable,
unavailable, or otherwise unwilling to
provide access to the property. In such
limited circumstances, the public
benefit attained from a government
entity gaining ownership of a property
may outweigh the need to gain on-site
access to the property prior to the
transfer of ownership.
The final rule requires, in unusual
circumstances, that the prospective
landowner or grantee make good faith
efforts to gain access to the property.
However, the mere refusal of a property
owner to allow the prospective property
owner or grantee to have access to the
property does not constitute an unusual
circumstance, absent the making of good
faith efforts to otherwise gain access.
The final rule, at § 312.10, defines “good
faith” as “the absence of any intention
to seek an unfair advantage or to
defraud another party; an honest and
sincere intention to fulfill one’s
obligations in the conduct or transaction
concerned.”
In those unusual circumstances where
a prospective landowner, a grantee, or
an environmental professional, after
undertaking good faith efforts, cannot
gain access to a property and therefore
cannot conduct an on-site visual
inspection, the final rule requires that
the property be visually inspected, or
observed, by another method, such as
through the use of aerial photography,
or be inspected, or observed, from the
nearest accessible vantage point, such as
the property line or a public road that
runs through or along the property. In
addition, the rule requires that the all
appropriate inquiries report include
documentation of efforts undertaken by
the prospective landowner, grantee, or
the environmental professional to obtain
on-site access to the subject property
and include an explanation of why good
faith efforts to gain access to subject
property were unsuccessful. The all
appropriate inquiries report must
include documentation of other sources
of information that were consulted to
obtain information necessary to achieve
the objectives and performance factors.
This documentation should include
comments, from the environmental
professional who signs the report,
regarding any significant limitations on
the ability of the environmental
professional to identit ’ conditions
indicative of releases or threatened
releases on, at, in, or to the subject
property, that may arise due to the
Inability of the prospective landowner,
grantee, or environmental professional
to obtain on-site access to the property.
In those limited cases where an on-
site visual inspection cannot be
conducted prior to the date a property
is acquired, we remind prospective
landowners that protection from
cERCLA liability depends upon the
prospective landowner complying with
all of the post-acquisition continuing
obligations provided in the statute.
Therefore, to ensure that adequate
information is attained about a property
to ensure that the property owner can
fulfill these obligations, we recommend
that once a property is purchased, the
property owner conduct an on-site
visual inspection of the property once
the property is acquired, if it could not
be conducted prior to acquisition. Such
an inspection may provide important
information necessary for the property
owner to fully comply with the other
statutory provisions, including on-going
obligations, governing the CERCLA
liability protections.
We disagree with the commenters
who argued that the exception from the
requirement to conduct the visual
inspection on-site is “broad.” We point
out that the exception is limited to the
requirement that the visual inspection
be conducted on-site. In all cases where
the exception applies, the visual
inspection must still be conducted from
another vantage point. In addition, the
exception is limited to only those
circumstances where all good faith
efforts are made to gain access the
property. The final rule requires that all
good faith efforts to gain access be
documented and requires that the
environmental professional comment on
the consequences that the inability to
gain access to the property may have on
his or her ability to render an opinion
on property conditions that may be
indicative of releases or threatened
releases on, at, in, or to the property.
The exception is very limited in scope
and the documentation requirements
should limit the use of the exception as
well as provide the prospective
landowner with useful information for
determining the potential need for
further investigations of the property
after acquisition.
The final rule also requires that the all
appropriate inquiries investigation
include visual inspections of properties
that adjoin the subject property. Visual
inspections of adjoining properties may
provide excellent information on the
potential for the subject property to be
affected by contamination migrating
from adjoining properties. Visual
inspections of adjoining properties may
be conducted from the subject
property’s property line, one or more
public rights-of-way, or other vantage
point (e.g., via aerial photography).
Where practicable, a visual on-site
inspection is recommended and may
provide greater specificity of
information. The visual inspections of
adjoining properties must include
observing areas where hazardous
substances currently may be, or
previously may have been, stored,
treated, handled, or disposed. Visual
inspections of adjoining properties
otherwise also must be conducted to
achieve the objectives and performance
goals for all the appropriate inquiries.
Physical limitations to the visual
inspections of adjoining properties
should be noted.
As explained in the preamble to the
proposed rule, EPA and the Negotiated
Rulemaking Committee considered,
when developing the proposed rule,
requiring that all activities in the all
appropriate inquiries investigation to be
conducted by persons meeting the
proposed definition of an environmental
professional. Requiring that an
environmental professional conduct all
activities could ensure that all data
collection and investigations are
conducted in a manner and to a degree
of specificity that allows the
environmental professional to make best
use of all information in forming
opinions and conclusions regarding the
environmental conditions at a property.
However, after careful review of the
specific activities included in the
statutory criteria and conducting an
assessment of the costs and burdens of
such a requirement, EPA and the
Committee concluded that it is not
necessary for each and every regulatory
requirement to be conducted by an
environmental professional. As outlined
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66097
in section IV.H of this preamble, today’s
final rule, as did the proposed rule,
allows for certain aspects of the
inquiries to be conducted solely by the
prospective landowner or grantee, while
providing that all other aspects be
conducted under the supervision or
responsible charge of the environmental
professional. Among the activities
required to be conducted under the
supervision or responsible charge of an
environmental professional is the on-
site visual inspection.
It continues to be EPA’s
recommendation that visual inspections
of the subject property and adjoining
properties be conducted by an
individual who meets the regulatory
definition of an environmental
professional. Although many other
aspects of the all appropriate inquiries
may be conducted sufficiently and
accurately by individuals other than an
environmental professional (e.g., a
research associate or librarian may be
well qualified to search government
records, an attorney may be well
qualified to conduct a search for an
environmental lien), EPA believes that
an environmental professional is best
qualified to conduct a visual inspection
and locate and interpret information
regarding the physical and geological
characteristics of the property as well as
information on the location and
condition of equipment and other
resources located on the property. EPA
recognizes that other individuals who
do not meet the regulatory definition of
an environmental professional,
particularly when these individuals are
conducting such activities under the
supervision or responsible charge of an
environmental professional, may have
the required skills and knowledge to
conduct an adequate on-site visual
inspection. However, EPA believes that
the professional judgment of an
individual meeting the definition of an
environmental professional is important
to ensuring that all circumstances at the
property that are indicative of
environmental conditions and potential
releases or threatened releases are
properly identified and analyzed. An
environmental professional is best
qualified for identifying such situations
and conditions and rendering a
judgment or opinion regarding the
potential existence of conditions
indicative of environmental concerns.
Although some commenters stated
that EPA should not recommend that
the visual inspection be conducted by a
person meeting the definition of
environmental professional, we point
out that other commenters stated their
support for our recommendation and
some even stated that EPA should
require in the regulation that the
Inspection be conducted by an
environmental professional. We remain
convinced that the on-site visual
inspection of the property can be the
single most important source of
information regarding the -
environmental conditions of a property
and that an individual meeting the
regulatory definition of environmental
professional is best able to interpret
such observations of a property and
ascertain the probability of conditions
indicative of releases or threatened
releases of hazardous substances being
present at the property. In addition, we
point out that the definition of
environmental professional included in
the final rule is less stringent than the
proposed definition. Therefore,
commenter concerns regarding any
significant cost burdens associated with
the environmental professional
conducting the on-site visual inspection
may be alleviated. We emphasize that
EPA is recommending that the on-site
visual inspection be conducted by an
individual who meets the definition of
environmental professional included in
the final rule; it is not a requirement
that the inspection be conducted by an
environmental professional. The rule
requires only that the inspection be
conducted by an individual who is
under the supervision or responsible
charge of an individual meeting the
definition of environmental
professional. EPA agrees that if the final
rule required that the on-site visual
inspection be conducted by an
individual meeting the definition of an
environmental professional. the
requirement could impose undue
burdens in certain circumstances. In
addition, there may be circumstances
that in the best professional judgment of
an environmental professional, another
person under the responsible charge of
the environmental professional may be
more qualified to conduct the on-site
inspection. To allow for flexibility and
the application of professional judgment
to specific circumstances, EPA
continues to recommend that an
environmental professional conduct the
on-site inspection, but the Agency is not
requiring that the inspection be
conducted by an environmental
professional.
U. What Are the Requirements for the
Inclusion of Specialized Knowledge or
Experience on the Part of the
“Defendant ?”
Because the conduct of all appropriate
inquiries is one element of a legal
defense to CERCLA liability, the statute
refers to the prospective landowner, or
the user of the all appropriate inquiries
investigation, as the “defendant.” This
ensures that any information or special
knowledge held by the prospective
landowner with regard to a property and
its conditions be included in the pre-
acquisition inquiries and be considered,
along with all information collected
during the conduct of all appropriate
inquiries, when an environmental
professional renders a judgment or
opinion regarding conditions indicative
of environmental conditions indicative
of releases or potential releases of
hazardous substances on, at, in, or to the
subject property. It is recommended that
this information be revealed to the
parties conducting the all appropriate
inquiries so that any specialized
knowledge may be taken into account
during the conduct of the required
aspects of the all appropriate inquiries.
Congress first added the innocent
landowner defense to ERCLA In the
Superfund Amendments and
Reauthorization Act (SARA) of 1986.
The Brownflelds Amendments amended
the innocent landowner defense and
added to CERCLA the bona fide
prospective purchaser and the
contiguous property owner liability
protections to ERCLA liability. The
1986 SARA amendments to CERCLA
established that among other elements
necessary for a defendant to
successfully assert the Innocent
landowner defense, a defendant must
demonstrate that he or she had, on or
before the date of acquisition of the
property in question, made all
appropriate inquiries into previous
ownership and uses of the property.
Congress directed courts evaluating a
defendant’s showing of all appropriate
inquiries to take into account, among
other things, “any specialized
knowledge or experience on the part of
the defendant.” Nothing in today’s rule
changes the nature or intent of this
requirement as it has existed in the
statute since 1986.
Proposed Rule
The proposed rule retained, as part of
the federal all appropriate inquiries
requirements, the consideration of any
specialized knowledge or experience of
the prospective landowner (or grantee if
the grantee is or will be the property
owner). The proposed rule did not
extend this requirement beyond what
already was required under CERCLA
and established through case law. The
proposed rule required that all
appropriate inquiries include the
consideration of specialized knowledge
held by the prospective landowner or
grantee with regard to the subject
property, the area surrounding the
subject property, the conditions of
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66098 Federal Register / Vol. 70, No. 210 / Tuesday, November 1 !_ 2 L U1eS and Regulations
adjoining properties, as well as other
experience relative to the inquiries that
may be applicable to identifying
conditions indicative of releases or
threatened releases at the subject
property. The proposed rule also
required. that ihe-results.of thainquiries.
take Into account any specialized
knowledge related to the property,
surrounding areas, and adjoining
properties held by the persons
responsible for undertaking the
inquiries, including any specialized
knowledge on the part of the
environmental professional.
Public Comments
EPA did not receive significant
comment on the proposed requirements
for considering the specialized
knowledge or experience on the part of
the defendant. A few commenters
mentioned that the proposed
requirements would result in the all
appropriate inquiries investigations
having to include interviews with all
previous owners and occupants of the
property. These commenters may have
mistakenly interpreted the proposed
provisions as requiring that the
specialized knowledge of all current
owners and occupants be considered as
part of the all appropriate inquiries
investigation. We clarify that only the
specialized knowledge of the
prospective landowner or grantee, and
the environmental professional
overseeing the conduct of the inquiries
need be considered.
Final Rule
The final rule retains the proposed
provisions governing the consideration
of specialized knowledge or experience
on the part of the prospective
landowner (or grantee) and the
environmental professional conducting
the all appropriate inquiries
investigation on the part of the
prospective landowner or grantee.
As provided in the preamble to the
proposed rule, existing case law related
to the innocent landowner defense
shows that courts appear to have
interpreted the “specialized knowledge”
factor to mean that the professional or
personal experience of the defendant
may be taken into account when
analyzing whether the defendant made
all appropriate inquiries. For example.
in Foster v. United States, 922 F. Supp.
642 (D. D.C. 1996). the owner of a
property formerly owned by the General
Services Administration and
contaminated by, among other things,
lead, mercury and PCBs, brought an
action against the United States and
District of Columbia, prior owners or
operators of the site. The plaintiff was
a principal in Long & Foster companies
and purchased the property through a
general partnership, and received it by
quitclaim deed. The innocent
landowner defense requires a property
owner to demonstrate that when he or
she purchased a-propefty; he-or slfo did
not know and had no reason to know of
contamination at, on, in, or to the--
property. The court rejected the
plaintiff’s claim to the innocent
landowner defense based in part on the
plaintiff’s specialized knowledge. The
court found that his specialized
knowledge included his position at
Long & Foster, which did hundreds of
millions of dollars of commercial real
estate transactions, and his position as
a partner in at least 15 commercial real
estate partnerships. The partnership was
involved as an investor in a number of
real estate transactions, some of which
involved industrial or commercial or
mixed-use property. The court ruled
that “it cannot be said that [ the
partnership] is a group
unknowledgeable or inexperienced in
commercial real estate transactions.”
Foster, 922 F. Supp. at 656.
In American National Bank and mist
Co. of Chicago v. Harcros Chemicals,
inc., 1997 WL 281295 (N.D. Ill. 1997),
the plaintiff was a company “involved
in bmwnfields development, purchasing
environmentally distressed properties at
a discount, cleaning them up, and
selling them for a profit.” American
National Bank,1997 WL 281295 at ‘4.
As a counter-claim defendant, the
company asserted It was an innocent
landowner and therefore not liable
pursuant to CERCLA. The court found
that among other reasons the defense
failed because the company possessed
specialized knowledge. The court ruled
that the company was an expert
environmental firm and possessed
knowledge that should have alerted it to
the potential problems at the site.
The final rule requires that the
specialized knowledge of prospective
landowners and the persons responsible
for undertaking the all appropriate
inquiries, including grantees, be taken
into account when conducting the all
appropriate inquiries for the purposes of
identifying conditions indicative of
releases or threatened releases at a
property. However, as evidenced by the
case law cited above, the determination
of whether or not the all appropriate
inquiries standard is met with regard to
specialized knowledge (as well as in
regard to all the criteria) remains within
the discretion of the courts.
V. What Are the Requirements for the
Relationship of the Purchase Price to
the Value of the Property, if the Property
Was Not Contaminated?
Congress included in the statutory
criteria for all appropriate inquiries a
requirement to consider the relationship
of the purchase price of a property to
the value of the property. if the property
was not contaminated. The criteria was
retained In the criteria included in the
Brownfields Amendments from the all
appropriate inquiries provisions of the
innocent landowner defense established
by Congress in the 1986 amendments to
CERCLA.
Proposed Rule
The proposed rule required that the
prospective landowner or grantee
consider whether or not the purchase
price of the property reflects the fair
market value of the property, assuming
that the property is not contaminated.
The proposed rule required that the
prospective landowner or grantee
consider whether any differential
between the purchase price and the
value of the property is due to the
presence of releases or threatened
releases of hazardous substances at the
property. There may be many reasons
that the price paid for a particular
property is not an accurate reflection of
the fair market value. The all
appropriate inquiries investigation need
only include a consideration of whether
a significant difference between the
price paid for a property and the fair
market value of a property. if the
property were not contaminated, is an
indication that the property may be
contaminated.
Public Comments
Many commenters asserted that an
environmental professional should not
be required to consider the relationship
of the purchase price to the value of the
property as part of the all appropriate
inquiries investigation. Concerns raised
by commenters include whether
environmental professionals are
qualified to assess the fair market value
of a property. Some commenters
thought that a requirement that
prospective landowners or
environmental professionals consider
the relationship of the purchase price of
property to the value of the property
could violate federal or state laws
governing property appraisals. Some
commenters argued that the all
appropriate inquiries investigation
should not include the requirement to
consider the relationship of the
purchase price to the value of the
property because the fair market value
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66099
is not always easily ascertainable. Other
comnienters requested that the preamble
to the final rule include a
recommendation that an appraisal be
performed to determine a property’s fair
market value. In addition, commenters
yeqlleit?A.thRtjn wj r e p ___
appraisal is conducted to determine the
fair market value of a property, the rule
should require that it meet the Uniform
Standards of Professional Appraisal
Practice. Still other commenters
supported including the requirement in
the final rule, but asked the Agency to
require prospective landowners to
obtain a property appraisal conducted
by a trained or certified real estate
appraiser. Some commenters stated that
prospective landowners should not be
required to divulge information on the
price paid for a property to the
environmental professional or other
third party.
Final Rule
The final rule retains the requirement
to consider the relationship of the
purchase price to the fair market value
of the property, if the property were not
contaminated. The requirement is part
of the statutory criteria established by
Congress and has been part of the
statutory provisions governing all
appropriate inquiries, within the
innocent landowner defense, since
1986. Today’s rule does not change the
previously existing provision. As did
the proposed rule, today’s final rule
allows for this criterion to be conducted
by the prospective landowner or the
grantee or undertaken as part of the
inquiry by an environmental
professional. If an environmental
professional is not qualified to consider
the relationship of the purchase price to
the value of the property, the
prospective landowner or grantee may
undertake the task or hire another third
party to make the comparison of price
and fair market value and consider
whether any differential is due to
potential environmental contamination.
If the relationship of the purchase
price to the fair market value of the
property, assuming the property is not
contaminated, is determined by the
prospective landowner or grantee, or
other agent who is not under the
supervision or responsible charge of the
environmental professional, the final
rule allows for, but does not require, the
information that is collected and the
determination made by or on the behalf
of the prospective landowner to be
provided to the environmental
professional. if the information is
provided to the environmental
professional, he or she can then make
use of such information during the
conduct of the all appropriate inquiries
and when rendering conclusions or
opinions regarding the environmental
conditions of the property. If the
information is not provided to the
environmental professional and the
environmental professional determines
that the lack of such information affects
his or her ability to identify conditions
indicative of releases or threatened
releases of hazardous substances on, at,
in, or to the property, then the
environmental professional should
identify the lack of information as a data
gap and comment on its significance in
the written report for the all appropriate
inquiries investigation.
The rule does not require that a real
estate appraisal be conducted to achieve
compliance with this criterion.
Although some commenters requested
that the final rule require that a formal
appraisal be conducted and we
acknowledge that there may be potential
value in conducting an appraisal, we
determined that a formal appraisal is
not necessary for the prospective
landowner or grantee to make a general
determination of whether the price paid
for a property reflects its fair market
value. In the case of many property
transactions, a formal appraisal may be
conducted for other purposes (e.g., to
establish the value of the property bc
the purposes of establishing the
conditions of a mortgage or to provide
information of relevance where a
windfall lien may be filed). in cases
where the results of a formal property
appraisal are available, the appraisal
results may serve as an excellent source
of information on the fair market value
of the property.
In cases where the results of a formal
appraisal are not available, the
determination of fair market value may
be made by comparing the price paid for
a particular property to prices paid for
similar properties located in the same
vicinity as the subject property, or by
consulting a real estate expert familiar
with properties in the general locality
and who may be able to provide a
comparability analysis. The objective is
not to ascertain the exact value of the
property, but to determine whether or
not the purchase price paid for the
property generally is reflective of its fair
market value. Significant differences in
the purchase price and fair market value
of a property should be noted and the
reasons for any differences also should
be noted.
Although some commenters requested
that EPA be more explicit in the final
rule in requiring that the comparison of
the purchase price to the fair market
value of the property be conducted by
the prospective landowner or grantee
(and not the environmental
professional), we believe that the
decision of who conducts the
comparison may be best left up to the
judgment of the individual prospective
landowner (or grantee) and
environmental professional. The final
rule provides in § 312.22 that the
comparison of the purchase price to the
fair market value of the property, if it
were not contaminated, can fall outside
the inquiries conducted by the
environmental professional. The criteria
to consider the relationship of the
purchase price to the fair market value
of the property, if it was not
contaminated is not included as part of
the requirements governing the “results
of an inquiry by an environmental
professional” ( 312.21). Therefore, the
requirement may be conducted by the
prospective landowner or grantee, his or
her attorney or agent, or the
environmental professional. Given that
a prospective landowner or grantee can
conduct the comparison of the purchase
price and the fair market value of the
property or hire another agent other
than the environmental professional to
conduct this task, we conclude that
commenter concerns regarding the
prospective landowner (or grantee)
having to divulge the price paid for a
property to the environmental
professional are unfounded.
W What Are the Requirements for
Commonly Known or Reasonably
Ascertainable Information About the
Property?
Commonly known or reasonably
ascertainable information includes
information about a property that
generally is known to the public within
the community where the property is
located and can be easily sought and
found from individuals familiar with
the property or from easily attainable
public sources of information. As
mentioned above, the Brownfields
Amendments to ERCLA amended the
innocent landowner defense previously
added to CERCLA in 1986. In addition,
the Brownfields Amendments added to
CERCLA the bona fide prospective
purchaser and the contiguous property
owner liability protections. The 1986
amendments to ERCLA established,
that among other elements necessary for
a defendant to successfully assert the
innocent landowner defense, a
defendant must take into account
commonly known or reasonably
ascertainable information about the
property. Congress retained this
criterion as part of the all appropriate
inquiries requirements included in the
Brownfields Amendments. Today’s rule
does not change the nature or intent of
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66100 Federal Register/Vol. 70, No. 210/Tuesday, November 1, 2005/Rules and Regulations
this requirement as it has existed in the
statute since 1986.
Proposed Rule
The proposed rule required that all
appropriate inquiries include the
collection and consideration oL
commonly known information about the
potential environmental conditions at a
property. The proposed rule required
both the prospective landowner or
grantee and the environmental
professional obtain and consider
commonly known or reasonably
ascertainable information during the
conduct of the all appropriate inquiries
investigation. The proposed rule also
provided a list of potential sources of
such information.
Public Comments
A few commenters expressed concern
that the requirement to consider
commonly known or reasonably
ascertainable information about a
property renders the all appropriate
inquiries requirements too vague and
open-ended. Commenters stated that the
requirement is broad and may result in
the need to interview a large number of
people and consult a wide variety of
sources of information. One commenter
expressed a preference that the federal
standards include only a checklist of
specific sources of information that
must be consulted. A few commenters
thought the list of potential sources of
commonly known information included
in the proposed rule was too broad.
Final Rule
The final rule retains the proposed
provisions requiring that prospective
landowners and environmental
professionals consider commonly
known or reasonably ascertainable
information about a property when
conducting all appropriate inquiries.
This information may be ascertained
from the owner or occupant of a
property, members of the local
community, including owners or
occupants of neighboring properties to
the subject property, local or state
government officials, local media
sources, and local libraries and
historical societies. In many cases, this
information may be incidental to other
information collected during the
inquiries, and separate or distinct efforts
to collect the information may not be
necessary. Information about a property,
including its ownership and uses, that
is commonly known or reasonably
ascertainable within the community or
neighborhood in which a property is
located may be valuable to identifying
conditions indicative of releases or
threatened releases at the subject
property. Such information, if not
collected during the course of collecting
other information necessary to complete
the all appropriate inquiries
investigation, may be obtained by
interviewing community officials and
other- residents of the .locality. Fort - -
example, neighboring property owners
and local community members may
have information regarding
undocumented uses of a property
during periods when the property was
idle or abandoned. Local community
sources may be good (i.e., reasonably
ascertainable) sources of commonly
known information on uses of a
property and activities conducted at a
property, particularly in the case of
abandoned properties.
The collection and use of commonly
known information about a property
may be done in connection with the
collection of all other required
information for the purposes of
achieving the objectives and
performance factors contained in
§ 312.20. Persons undertaking the all
appropriate inquiries may collect
commonly known or reasonably
ascertainable information on the subject
property from a variety of sources,
including sources located in the
community in which the property is
located. The opinion provided by an
environmental professional regarding
the environmental conditions of a
property and included in the all
appropriate inquiries report should be
based upon a balance of all information
collected, including commonly known
or reasonably ascertainable information
about the property. The potential
sources of commonly known or
reasonably ascertainable information
provided in the proposed rule and
retained in the final rule are provided as
suggestions for where such information
may be found and the list provided is
not meant as an exhaustive list of
sources that must be consulted.
Commonly known information may be
collected from other sources and may be
most easily collected during the conduct
of other aspects of the all appropriate
inquiries investigation (e.g.. interviews,
reviews of historIcal sources of
information, reviews of governmental
records). The requirement is not meant
to require exhaustive data collection
efforts, as some commenters asserted.
The intent of the requirement is to
establish that a prospective landowner
or grantee and an environmental
professional conducting all appropriate
inquiries on his or her behalf must make
efforts to collect and consider
information about a property that is
commonly known within the local
community or that can be reasonably
ascertained.
There is some case law, related to the
innocent landowner defense, that
provides guidance on how a court may
rule with regard to the need to consider
commonly known-or reasonably
asceflainabl information about the
property. For example, In Wickland Oil
Terminals v. Asarco, Inc., 1988 WL
167247 (N.D. Cal. 1988), the court noted
that Wickland was aware of potential
water quality problems at the subject
property due to large piles of mining
slag stored at the property, even though
Wickland argued that previous owners
withheld such information, because the
information was available from other
sources consulted by Wickland prior to
purchasing the property, including the
Regional Water Quality Control Board
and a consulting firm hired by
Wickland. Such information was
commonly known by local sources and
therefore should have been considered
by Wickland during its conduct of all
appropriate inquiries.
In Hemingway Transport Inc. v. Kahn.
174 FR 148 (Bankr. D. Mass. 1994), the
court ruled against an innocent
landowner claim because it found “that
had (the defendants] exerted a modicum
of effort they may easily have
discovered information that at a
minimum would have compelled them
to inspect the property further * A A the
(defendants] could have taken a few
significant steps, literally, to minimize
their liability and discover information
about the property * A A” court
noted that one action the defendants
should have taken to collect available
information about the property included
phone calls to city officials to inquire
about conditions at the property.
X. What Are the Eequirements for “The
Degree of Obviousness of the Presence
or Likely Presence of Contamination at
the Property, and the Ability to Detect
the Contamination by Appropriate
Investigation?”
Proposed Rule
The proposed rule required that the
inquiries conducted by a prospective
landowner (or grantee) and
environmental professional take Into
account all the Information collected
during the conduct of the all
appropriate inquiries in considering the
degree of obviousness of and ability to
detect the presence of a release or
threatened release of hazardous
substances at, in, on. or to a property.
In addition, the proposed rule required
the environmental professional to
provide an opinion regarding additional
appropriate investigation, if any may be
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66101
necessary in his or her opinion to
determine the environmental conditions
of the property.
Public Comments
A few cominenters asserted that the
proposed requirei entsregar4ing the
egree of obviousness ot the presence or
likely presence of contamination at the
property, and the ability to detect the
contamination by appropriate inquiry
were too open-ended. Also, a few
commenters suggested that the final rule
should include requirements to conduct
sampling and analysis to meet the
“ability to detect contamination by
appropriate investigation” portion of the
statutory criteria. However, commenters
overwhelmingly agreed that the
standards for all appropriate inquiries
should not require sampling and
analysis.
Final Rule
The final rule requires that persons
conducting all appropriate inquiries
consider all the information collected
during the conduct of the inquiries in
totality to ascertain the potential
presence of a release or threatened
release at the property. Persons
conducting all appropriate inquiries,
following the collection of all required
information, must assess whether or not
an obvious conclusion may be drawn
that there are conditions indicative of a
release or threatened release of
hazardous substances (or other
pollutants, contaminants, petroleum or
petroleum products, and controlled
substances) on, at, in, or to the property.
In addition, the rule requires parties to
consider whether or not the totality of
information collected prior to acquiring
the property indicates that the parties
should be able to detect a release or
threatened release on, at, in, or to the
property. The final rule also retains the
proposed requirement that the
environmental professional include as
part of the results of his or her inquiry
an opinion regarding additional
appropriate investigation, if any may be
necessary.
We interpret the statutory criterion to
require consideration of information
already obtained during the conduct of
all appropriate inquiries investigation
and not as a requirement to collect
additional information. We do not agree
with commenters who asserted that the
criterion is open-ended. In fact, we see
this criterion as providing direction on
how all of the information collected
while carrying out the other criteria and
regulatory requirements must be viewed
comprehensively. After collecting and
considering all the information required
to comply with the rule’s objectives and
performance standards, all the
information should be considered in
total to determine whether or not there
are indications of releases or threatened
releases of hazardous substances on, at,
in, or to the property. En addition, the
environmental professional should
provide an opinion regarding whether
or not additional investigation is
necessary to detect potential
contamination at the site, if in his or her
opinion there are conditions indicative
of releases or threatened releases of
hazardous substances.
The previous innocent landowner
defense (added to CERCLA in 1986)
required a court to consider the degree
of obviousness of the presence or likely
presence of contamination at a property,
and the ability of the defendant (i.e., the
landowner) to detect the contamination
by appropriate investigation. Nothing in
today’s rule changes the nature or intent
of this requirement as it has existed in
the statute since 1986.
Case law relevant to this criterion
indicates that defendants may not be
able to claim an innocent landowner
defense if a preponderance of evidence
available to a prospective landowner
prior to acquiring the property indicates
that the defendant should have
concluded that there is a high likelihood
of contamination at the site. In some
cases (e.g., Hemingway Tmnsport Inc. v.
Kahn, 174 F.R. 148 (Bankr. D. Mass.
1994), and Fosterv. United States, 922
F. Supp. 642 (D.D.C. 1996), courts have
ruled that if a defendant had done a bit
more visual inspection or further
investigation, based upon information
available to the defendant prior to
acquiring the property, it would have
been obvious that the property was
contaminated. In Foster v. United
States, the court determined that the
innocent landowner defense was not
available based in part on the fact that
the partnership presumed the site was
free of contamination based upon
cursory visual inspections despite
evidence in the record that, at the time
of the sale, the soil was visibly stained
by PCB-contaminated oil. In addition,
although the property was located in a
run-down industrial area, the defendant
did no investigation into the
environmental conditions at the site
prior to acquiring the property.
EPA also notes that in U.S. v.
Domenic Lombardi Realty, Inc., 290 F.
Supp. 2d 198,211 (D.R.I. 2003), the
court held that the defendant did not
qualify for the innocent landowner
defense. The defendant could not show
he had “no reason to know” of
contamination at the property or that he
had performed all appropriate inquiries
in accordance with “good commercial
or customary practices.” The court also
found that the defendant had not
performed even a minimal
environmental assessment of the site
despite having learned that the property
had been used as an automobile
scrapyard. The court noted the ._...._. -
distinction between Phase I and Phase
Ii environmental assessments and
credited the testimony of the United
States’ expert who concluded that,
under the circumstances of this case, the
defendant should have conducted a
Phase 11 assessment. Id. at 203—04.
With regard to the conduct of
sampling and analysis, today’s final rule
does not require sampling and analysis
as part of the all appropriate inquiries
investigation. However, sampling and
analysis may be valuable in determining
the possible presence and extent of
potential contamination at a property. In
addition, the fact that the all appropriate
inquiry standards do not require
sampling and analysis does not prevent
a court from concluding that. under the
circumstances of a particular case,
sampling and analysis should have been
conducted to meet “the degree of
obviousness of the presence or likely
presence of contamination at the
property, and the ability to detect the
contamination by appropriate
investigation” criterion and obtain
protection from CERCLA liability.
Prospective landowners should keep in
mind that the conduct of all appropriate
inquiries prior to acquiring a property is
only one requirement that he or she
must comply with to assert protection
from CERCLA liability. The statute
requires that persons, after acquiring a
property, comply with continuing
obligations to take reasonable steps to
stop on-going releases at the property,
prevent any threatened future releases.
and prevent or limit any human,
environmental, or natural resource
exposure to any previously released
hazardous substances (these criteria are
summarized in detail in section ll.D. of
this preamble). In certain instances,
depending upon site-specific
circumstances and the totality of the
information collected during the all
appropriate inquiries prior to the
property acquisition, it may be
necessary to conduct sampling and
analysis, either pre-or post-acquisition.
to fully understand the conditions at a
property, and fully comply with the
statutory requirements for the CERCLA
liability protections. In addition,
sampling and analysis may help explain
existing data gaps. Prospective
landowners should be mindful of all the
statutory requirements for obtaining the
CERCLA liability protections when
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66102 Federal Register / Vol. 70, No. 210/Tuesday, November 1, 2005 / Rules and Regulations
considering whether or not to conduct
sampling and analysis prior to or after
acquiring a property. Today’s final
regulation does not require that
sampling and analysis be conducted as
part of the all appropriate inquiries
investigation.
V. Statutory and Executive Order
Reviews - -
A. Executive Order 12866: Regulatory
Planning and Review
Under Executive Order 12866 (58 FR
5 1735), the Agency must determine
whether this regulatory action is
“significant” and therefore subject to
formal review by the Office of
Management and Budget (0MB) and to
the requirements of the Executive Order.
The Executive Order defines
“significant regulatory action” as one
that is likely to result in a rule that may:
(1) Have an annual effect on the
economy of $100 million or more or
adversely affect in a material way the
economy, a sector of the economy.
productivity, competition, jobs, the
environment, public health or safety, or
state, local, or tribal governments or
communities; (2) create a serious
inconsistency or otherwise interfere
with an action taken or planned by
another agency; (3) materially alter the
budgetaiy impact of entitlements,
grants, user fees, or loan programs or the
rights and obligations of recipients
thereof; or (4) raise novel legal or policy
issues arising out of legal mandates, the
President’s priorities, or the principles
set forth in the Executive Order.
Pursuant to the terms of Executive
Order 12866, it has been determined
that today’s final rule is a “significant
regulatory action” because this rule
contains novel policy issues, although it
is not economically significant. As such,
this action was submitted to 0MB for
review. Changes made in response to
0MB suggestions or recommendations
are documented in the docket for
today’s rule.
To estimate the economic effects of
today’s final rule, we conducted an
evaluation of the potential effects of this
rule on the universe of prospective
landowners who may chose to comply
with the provisions of today’s final rule
to obtain protection from CERCLA
liability for potential releases and
threatened releases of hazardous
substances that may exist at properties
they intend to purchase. The results of
this analysis are included in the
document titled “Economic Impact
Analysis fbr the Final All Appropriate
Inquiries Regulation,” which is
included in the docket for today’s final
rule. Based upon the results of the
Economic Impact Analysis (EIA), EPA
has determined that this final rule will
have an annual effect on the economy
of less than $100 million. The
annualized benefits associated with the
final rule have not been monetized but
are identified and summarized in the.
EIA for the all appropriate inquiries -
rule.2 -
1. Methodology
The value of any regulatory action is
traditionally measured by the net
change in social welfare that it
generates. The EIA conducted in
support of today’s rule examines both
costs and qualitative benefits in an effort
to assess the overall net change in social
welfare. The primary focus of the EIA
document is on compliance costs and
economic impacts. Below, EPA
summarizes the analytical methodology
and findings for the all appropriate
inquiries rule. The information
presented is derived from the EIA.
The all appropriate inquiries
regulation potentially will apply to most
commercial property transactions. The
requirements will be applicable to any
public or private party, who may
potentially claim protection from
CERCLA liability as an innocent
landowner, a bona fide prospective
purchaser, or a contiguous property
owner. However, the conduct of all
appropriate inquiries, also known as
environmental due diligence or Phase I
Environmental Site Assessment, is not
new to the commercial property market.
Prior to the Brownfields Amendments to
CERCLA, commercial property
transactions often included an
assessment of the environmental
conditions at properties prior to the
closing of any real estate transaction
whereby ownership was transferred for
the purposes of confirming the
conditions at the property or to establish
an innocent landowner defense should
environmental contamination be
discovered after the property was
acquired. The process most prevalently
used for conducting all appropriate
inquiries, or environmental site
assessments, is the process developed
by ASTM International (formerly known
as the American Society for Testing and
Materials) and entitled “El 527,
Standard Practice for Environmental
Site Assessments: Phase I
Environmental Site Assessment
Process.” In addition, some properties,
2 Tbe document titled “The Economic impact
Analysis for the Final All Appropriate Inquiries
Regulation” includes (1) the EtA conducted for the
proposed rulemaking and (2) the Addendum to the
EIA The cost estimates presented in the Addendum
are the estimated costs of the final all appropnate
inquines regulation
particularly in cases where the subject
property is assumed not to be
contaminated or was never used for
industrial or commercial purposes. were
assessed using a less rigorous process
developed by ASTM International,
sometimes referred to as a “transaction
screen” and entitled “E1528, Standard -
Practice for Environmental Site
Assessments: Transaction Screen
Process.”
Our first step in assessing the
economic impacts of the rule was to
establish a baseline to represent the
relevant aspects to the commercial real
estate market in the absence of any
changes in regulations. Because undBr
existing conditions almost all
commercial property transactions are
accompanied by either an
environmental site assessment (ESA)
conducted in accordance with ASTM
E1527—2000 or a transaction screen as
specified in ASTM E1528, it was
assumed these practices would continue
even in the absence of the all
appropriate inquiries regulation. The
numbers of each type of assessment
were estimated on the basis of industry
data for recent years, with recent growth
rates in transactions assumed to
continue for the 10-year period covered
by the EIA. An adjustment in the
relative numbers of ESAs and
transaction screens was made to account
for the fact that, under the rule, an ESA
will provide more certain protection
from liability. This adjustment was
made by comparing shifts between the
two procedures that occurred when the
Brownfields Amendments established
the ASTM El 527—2000 standard as the
interim standard for all appropriate
inquiries, and thus as one requirement
for qualifying as an innocent landowner,
bona fide prospective purchaser, or
contiguous property owner.
We then considered the requirements
included in the final rule and compared
them to the requirements for
environmental site assessments
conducted under the ASTM E1527—
2000 and ASTM E1528 standards.
When compared to the ASTM El 527—
2000 standard (i.e., the baseline
standard), today’s final rule is expected
to result in a reduced burden for the
conduct of interviews in those cases
where the subject property is
abandoned; increased burden in those
cases where past owners or occupants
need to be interviewed; increased
burden associated with documenting
recorded environmental cleanup liens;
increased burden for documenting the
reasons for the price and fair market
value of a property in those cases where
the purchase price paid for the subject
property is significantly below the fair
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66103
market value of the property; and
increased burden for recording
information about the degree of
obviousness of contamination at a
property.
To estimate the changes in costs
resulting from the rule, we developed a
costing model. This model estimates the
total costs of conducting site
assessments as the product of costs per
assessment, numbers of assessments per
year, and the number of years in the
analysis. The costs per assessment, in
turn, are calculated by dividing each
assessment into individual labor
activities, estimating the labor time
associated with each, and assigning a
per.hour labor cost to each activity on
the basis of the labor category most
appropriate to that activity. Labor times
and categories are assumed to depend
on the size and type of property being
assessed, with the nationwide
distribution of properties based on data
from industry on environmental sites
assessments and brownfield sites. The
estimates and assignments of categories
are made based on the experience of
professionals who have been involved
in large numbers of Site assessments,
and who are therefore skilled in cost
estimation for the relevant activities.
Other costs, such as reproduction and
the purchase of data, arc added to the
labor costs to form the estimates of total
costs per assessment. These total costs,
stratified by size and type of property,
are then multiplied by estimated
numbers of assessments of each size and
type to generate our estimates of total
annual costs. The model was tested by
comparing its results to industry-wide
estimates of average price of conducting
assessments under baseline conditions,
and generally found to agree. The
difference between the estimated cost to
comply with the final rule and the
estimated cost in the baseline
constitutes our estimate of the
incremental regulatory costs.
The ELA pmvides a qualitative
assessment of the benefits of the all
appropriate inquiries rule. The benefits
discussed are those that may be
attributed to an increased level of
certainty with regard to CERCLA
liability provided to prospective
purchasers of potentially contaminated
properties, including brownfields, who
comply with the provisions of the rule
and the other statutory provisions
associated with the liability protections.
The basic premise for associating certain
benefits to the rule is the expectation
The distribution of abandoned properties end
properties with known owners, modeled as a ran 5e.
is bused on an estimate of vacant lands in urban
areas and an estimate of abandoned Superfund
Sites
that the level of certainty provided by
the Liability protections may result in
increased brownfields property
transactions. However, it is difficult to
predict how many additional
transactions may occur that involve
brownflelds properties in direct
response to the increased certainty of
the liability protections. It also is
difficult to obtain data on changes in
behaviors and practices of prospective
landowners in response to the liability
protections. Therefore, EPA made no
attempt to quantify potential benefits or
compare the benefits to estimated
incremental costs.
The Agency believes that increasing
property transactions involving
brownflelds and other contaminated
and potentially contaminaLed properties
and Improving Information about
environmental conditions at these
properties may provide additional
indirect benefits such as increased
numbers of cleanups, reduced use of
greenfields, potential increases in
property values, and potential increases
in quality of life measures (e.g.
decreases in urban blight, reductions in
traffic, congestion, and reduced
pollution due to mobile source
emissions). However, as stated above,
the benefits of the rule are considered
only qualitatively, due to the difficulty
of predibting how many additional
brownfields and contaminated property
transactions may occur in response to
the increased certainty of liability
protections provided by the rule, as well
as the difficulty in getting data on
changes in behaviors and practices in
response to the availability of the
liability protections. EPA is confident
that the new liability protections
afforded to prospective landowners, if
they comply with the all appropriate
inquiries provisions, will result in
increased benefits. EPA is not able to
quantify, with any significant level of
confidence, the exact proportion of the
benefits attributed only to the
availability of the liability protections
and the all appropriate inquiries
regulations. For these reasons, the costs
and benefits could not be directly
compared.
2. Summary of Regulatory Costs in
Proposed Rule
For a given property. the costs of
compliance with the all appropriate
inquiries rule relative to the baseline
depend on whether that property would
have been assessed, in absence of the all
appropriate inquiries regulation. with
an ASTM E1527—2000 assessment
process or with the simpler ASTM
El 528 transaction screen. EPA
estimated the average incremental cost
of the proposed rule relative to
conducting an ASTM E1527—2000 to be
between $41 and $47. For the small
percentage of cases for which a
transaction screen would have been
preferred to the ASTM E1527—2000 in
the baseline, but which would, as a
result of the proposed rule, require an
assessment in compliance with the all
appropriate inquiries rule, the average
incremental cost was estimated to be
between $1,448 and $1,454. We
estimated that approximately 97 percent
of property transactions will bear only
the incremental cost of the rule relative
to the ASTM E1527—2000 process.
Therefore, the weighted average
incremental cost of the proposed rule,
per transaction, was estimated to be
fairly low, between $84 and $89.
3. Public Comments on EIA for
Proposed Rule
EPA received a number of public
comments on the EtA conducted to
assess the potential costs and impacts of
the proposed rule. We summarized the
public comments received related to the
cost and economic impacts in the
document titled “Addendum to
Economic Impact Analysis for the Final
All Appropriate Inquiries Regulation”
(Addendum to the EIA). This document
is included in the docket for today’s
final rule. The Addendum to the ELA
also summarizes EPA s responses to the
comments received that addressed the
estimated costs and economic impacts.
Many commenters generally agreed
with EPA’s conclusion that the average
incremental cost increase per
transaction associated with the
requirements of the proposed rule
would be minimal. Some commenters
mentioned that the EIA conducted for
the proposed rule underestimated the
incremental costs associated with the
proposed rule. However, only a few
commenters provided an explanation as
to why they thought our cost estimates
were low or provided information
regarding which particular activities
would result in an incremental increase
in the activities and costs associated
with conducting an environmental site
assessment, if conducted in compliance
with the requirements of the proposed
rule. Most commenters did not provide
specific reasons for their claims of cost
increases over the ASTM E1527—2000
standard. A few commenters suggested
that the EIA for the proposed rule
underestimated the level of effort
necessary for locating and interviewing
past owners or occupants, with one
commenter providing an estimated level
of effort of one to three hours for this
task.
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66104 Federal Register/Vol. 70, No. 210/Tuesday, November 1, 2005 / Rules and Regulations
4. Estimate of Costs Associated With the
Final Rule
EPA made one revision to the analysis
of cost impacts associated with the
requirements of the proposed and final
rule in response to specific issues raised
by commonters. EPA agrees with the
commenters who asserted that locating
past owners or occupants of a property
may be more time consuming than
locating the current owners or
occupants, as was assumed in the
analysis of costs conducted for the
proposed rule. Locating past owners or
occupants could require as little as one
5-minute phone call (e.g., if the current
owner has the contact information for
the past owner) or it could require
multiple phone calls that could take in
excess of one hour. For the purpose of
estimating the cost under the final rule,
EPA estimates the incremental burden
for locating past owners or occupants to
be, on average, 0.5 hours per interview
regardless of the property type or size.
EPA did not account for this
incremental burden in our analysis of
the costs associated with the proposed
rule. EPA also recognizes that in some
cases the environmental professional
will need to complete the full interview
with the current owner before
determining that it is necessary to
interview a past owner. In other words,
the environmental professional may
need to complete the interview with the
current owner, and then perform a more
focused interview of a past owner to fill
data gaps. EPA estimates that the
incremental burden for interviewing
past owners or occupants will be 0.5
hours for undeveloped and residential
properties, one hour for commercial and
industrial properties (of all sizes except
large industrial), and 1.5 hours for large
industrial properties. Therefore, EPA
estimates that the total incremental level
of effort for locating and interviewing
past property owners or occupants will
range from one hour to two hours
depending on the property type or size.
The additional incremental hour
burden, however, will not be incurred
in the case of every site assessment. EPA
expects that the interview with past
owners or occupants will be conducted
only for properties with a higher than
average owner or occupant turnover
rate. To derive the number of potentially
affected properties, we assume that the
environmental professional will
interview only the current property
owner if the owner was in the
possession of the subject property for
more than two years. We assume that
after two years of owning a property, the
current property owner should have a
reasonably good knowledge of its
condition. EPA estimates that 19
percent of Phase I ESAs conducted in a
given year are conducted on properties
that were sold at least once in the
previous two years (for a detailed
explanation on the derivation of this
estimate, see the Addendum to the ELA).
Using the assumption that 15 percent of
all properties are abandoned properties
(see Section 5.6.5.2 of ELA) which
would not be affected by the
requirement to interview past owners or
occupants, we revised our original cost
estimate to account for non-abandoned
properties that were sold over the past
two years. Therefore, for the purpose of
our revised cost analysis, we estimate
that 16 percent of properties will require
an additional interview with past
owners or occupants.
Except for the increase in the level of
effort for the interview task for non-
abandoned properties, all other
parameters used in modeling our cost
estimates are the same as presented in
the EIA conducted for the proposed
rule. To derive the incremental average
cost per transaction and the total annual
cost of the final rule, we employed the
methodology explained in detailed in
Chapters 7 and B of the EIA conducted
for the proposed rule. Based on our
analysis, the cost of a Phase I ESA under
the final regulation will increase, on
average, between $52 and $58. The
estimated average cost for a Phase I ESA
thus will range between $2,185 and
$2,190.
Using our revised incremental cost
estimate for conducting interviews of
past owners or occupants, we revised
our estimated total annual cost of the
final rule and our incremental total
annual cost estimate. Our revised total
annual cost estimate for all activities
included in the all appropriate inquiries
investigations conducted under the final
rule is between $693.5 and $695.3
million (calculated using a discount rate
of three percent). Our revised estimate
of the incremental total annual cost of
the final rule is between $29.7 million
and $31.4 million. A more detailed
explanation of our revised cost
estimates, including an additional
sensitivity analysis performed in
response to the public comments, is
included in the document titled
“Addendum to the Economic Impact
Analysis for the Final All Appropriate
Inquiries Regulation.” This document is
We assumed that the environmental
professionals will need to complete the full
interview with the current owner before conducting
an interview with the past owners or occupants To
the extent that this may not always be the case, the
average incremental cost (and by extension, the
average cost for an AAI Phase I ESA) is
overestimated
in the public docket for today’s final
rule.
B. Paperwork Reduction Act
The information collection
requirements contained in this final rule
were submitted for approval to the
Office of Management and Budget under
the Paperwork Reduction Act, 44 U.S.C.
3501 et seq. The information collection
requirements are not enforceable until
0MB approves them. The Information
Collection Request (KR) document
prepared by EPA has been assigned EPA
ICR Number 2144.02.
Under the PRA, EPA is required to
estimate the notification, reporting and
recordkeeping costs and burdens
associated with the requirements
specified in today’s rule. Today’s rule
will require persons wanting to assert
one of the liability protections under
CERCLA to conduct some activities that
go beyond current customary and usual
business practices (i.e., beyond ASTM
E1527—2000) and therefore will impose
an information collection burden under
the provisions of the Paperwork
Reduction Act. The information
collection activities are associated with
the activities mandated in section 101
(35)(B) of CERCLA for those persons
wanting to claim protection from
CERCLA liability. None of the
information collection burdens
associated with the provisions of today’s
rule include requirements to submit the
collected information to EPA or any
other government agency. Information
collected by persons affected by today’s
rule may be useful to such persons If
their potential liability under CERCLA
for the release or threatened release of
a hazardous substance is challenged in
a Court.
The activities associated with today’s
rule that go beyond current customary
and usual business practices include
interviews with neighboring property
owners and/or occupants in those cases
where the subject property is
abandoned, documentation of all
environmental cleanup liens in the
Phase I Environmental Site Assessment
report, discussion of the relationship of
purchase price to value of the property
in the report, and consideration and
discussion of whether additional
environmental investigation is
warranted. Paperwork burdens are
estimated to be 546,179 hours annually,
with a total cost of $29,583,206
annually. The estimated average burden
hours per response is estimated to be
approximately one hour (or 25 hours per
response, assuming a transition from a
transaction screen). The estimated
average cost burden per response is
estimated to be either $67 or $1,479,
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66105
depending on whether, under baseline
conditions, an ASTM E1527—2000
process or a transaction screen (ASTM
E1528) would have been used.
Under the Paperwork Reduction Act,
‘burden’ means the total time, effort, or
financial resources expended by persons
to generate, maintain, retain, or disclose
or provide information to or for a
Federal agency. This includes the time
needed to review instructions; develop,
acquire. Install, and utilize technology
and systems for the purposes of
collecting, validating, and verifying
information, processing and
maintaining information, and disclosing
and providing information; adjust the
existing ways to comply with any
previously applicable instructions and
requirements; train personnel to be able
to respond to a collection of
information; search data sources;
complete and review the collection of
information; and transmit or otherwise
disclose the information.
An agency may not conduct or
sponsor, and a person is not required to
respond to a collection of information
unless it displays a currently valid 0MB
control number. The 0MB control
numbers for EPA’s regulations in 41)
CFR are listed in 40 CFR part 9. This
ICR is approved by 0MB, and the
Agency will publish a technical
amendment to 40 CFR part 9 in the
Federal Register to display the 0MB
control number for the approved
information collection requirements
contained in this final rule.
C. Re ulatoiy Flexibility Act
The Regulatory Flexibility Act (RFA),
as amended by the Small Business
Regulatory Enforcement Fairness Act of
1996 (SBREFA), 5 U.S.C. 601 et. seq..
generally requires an agency to prepare
a regulatory flexibility analysis of any
rule subject to notice and comment
rulemaking requirements under the
Administrative Procedure Act or any
other statute, unless the agency certifies
that the rule will not have a significant
economic impact on a substantial
number of small entities. Small entities
include small businesses, small
organizations, and small governmental
jurisdictions.
For the purposes of assessing the
impacts of today’s rule on small entities,
small entity is defined as: (1) A small
business that is defined by the Small
Business Administration by category of
business using the North American
Industrial Classification System
(NAICS) and codified at 13 CFR
121.201; (2) a small governmental
jurisdiction that is a government of a
city. county, town, school district or
special district with a population of less
than 50,000; and (3) a small
organization that is any not-for-profit
enterprise which is independently
owned and operated and is not
dominant in its field.
Since all non-residential property
transactions could be affected by today’s
rule, if it is promulgated, large numbers
of small entities could be affected to
some degree. However, we estimate that
the effects, on the whole, will not be
significant for small entities. We
estimate that, for the majority of small
entities, the average incremental cost of
today’s rule relative to conducting an
ASTM E1527—2000 Phase I
Environmental Site Assessment will be
between $52 and $58. When we
annualize the incremental cost of $58
per property transaction over ten years
at a seven percent discount rate, we
estimate that the average annual cost
increase per establishment per property
transaction will be $8. Thus, the cost
impact to small entities is estimated to
not be significant. A more detailed
summary of our analysis of the potential
impacts of today’s rule to small entities
is included in “Economic Impacts
Analysis of the Final All Appropriate
Inquiries Regulation.” This document is
included in the docket for today’s rule.
After considering the economic
impacts of today’s final rule on small 1
entities, I certify that this action will not
have a significant economic impact on
a substantial number of small entities.
We estimate that, on average, 266,000
small entities may purchase commercial
real estate in any given year and
therefore could potentially be impacted
by today’s final rule. Though large
numbers of small entities could be
affected to some degree. we estimated
that the effects, on the whole, would not
be significant for small entities. We
estimate that, for the majority of small
entities, the average incremental cost of
today’s rule relative to conducting an
ASTM E1527—2000 will be between $52
and $58. For the small percentage of
cases for which a transaction screen
would have been preferred to the ASTM
El 527—2000 in the baseline, but which
now will require an assessment in
compliance with the rule, the average
incremental cost of conducting an
environmental site assessment will be
between $1,459 and $1,465. When we
annualize the incremental cost per
property transaction over ten years at a
seven percent discount rate, we estimate
that for the majority of small entities the
average annual cost increase per
establishment per property transaction
will be approximately $8. For the small
percentage of entities transition ing from
transaction screens to the all
appropriate inquiries requirements of
the final rule, the average annual cost
increase per establishment per property
transaction will be $209.5
D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA), Public
Law 104—4, establishes requirements for
federal agencies to assess the effects of
their regulatory actions on State, local,
and tribal governments and the private
sector. Under section 202 of the UMRA,
EPA must prepare a written statement,
including a cost-benefit analysis, for
proposed and final rules with “Federal
mandates” that may result in
expenditures to State, local, and tribal
governments, in the aggregate, or to the
private sector, of $100 million or more
in any one year. Before promulgating an
EPA rule for which a written statement
is needed, section 205 of the UMRA
generally requires EPA to identify and
consider a reasonable number of
regulatory alternatives and adopt the
least costly, most cost-effective, or least
burdensome alternative that achieves
the objectives of the rule. The
provisions of section 205 do not apply
when they are inconsistent with
applicable law. Moreover, section 205
allows EPA to adopt an alternative other
than the least costly, most cost-effective
or least burdensome alternative if the
Administrator publishes with the final
rule an explanation of why that
alternative was not adopted.
Before EPA establishes any regulatory
requirements that may significantly or
uniquely affect small governments,
including tribal governments, it must
have developed under section 203 of the
UMRA, a small government agency
plan. The plan must provide for
notifying potentially affected small
governments, enabling officials to have
meaningful and timely input in the
development of regulatory proposals
with significant federal
intergovernmental mandates, and
informing, educating, and advising
small governments on compliance with
the regulatory requirements.
Today’s rule contains no federal
mandates (under the regulatory
provisions of Title II of the UMRA) for
5 For a very small percentage of entities
transitmnizig from transection screens to the all
appropnate inquines requirements. the maximum
increase per establishment per property transaction
is estimated to be approximately 32.845 When we
annualize this incremental cost per property
transaction over ten years at a seven percent
discount rate, we estimate that the maximum
annual cost increase per establishment per property
transaction will be $405 We estimate (list
approximately one fifth of one percent of the
properties transitionin8 from a transaction screen to
a Phase I ESA will have en impact of this
magnitude each year
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66106 Federal Register / Vol. 70, No. 210 / Tuesday, November 1, 2005 / Rules and Regulations
state, local, or tribal governments or the
private sector. The rule imposes no
enforceable duty on any state, local, or
tribal governments. EPA also
determined that today’s rule contains no
regulatory requirements that might
significantly or uniquely affect small -
governments. In addition, as discussed
above, the private sector is not expected
to incur costs of $100 million or more
as a result of today’s rule. Therefore.
today’s rule is not subject to the
requirements of Sections 202 and 205 of
UMRA.
E. Executive Order 13132: Federalism
Executive Order 13132, entitled
“Federalism” (64 FR 43255, August 10,
1999), requires EPA to develop an
accountable process to ensure
“meaningful and timely input by State
and local officials in the development of
regulatory policies that have federalism
iniplications.”Policies that have
federalism implications” is defined in
the Executive Order to include
regulations that have “substantial direct
effects on the states, on the relationship
between the national government and
the states, or on the distribution of
power and responsibilities among the
various levels of government.”
Today’s rule does not have federalism
implications. It will not have substantial
direct effects on the states, on the
relationship between the national
government and the states, or on the
distribution of power and
responsibilities among the various
levels of government, as specified in
Executive Order 13132. No state and
local government bodies will incur
compliance costs as a result of today’s
rulemaking. Therefore, Executive Order
13132 does not apply to this rule.
F. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
Executive Order 13175, entitled
“Consultation and Coordination with
Indian Tribal Governments” (65 FR
67249, November 9, 2000), requires EPA
to develop an accountable process to
ensure “meaningful and timely input by
tribal officials in the development of
regulatory policies that have tribal
implications.” Today’s rule does not
have tribal implications, as specified in
Executive Order 13175. Today’s rule
does not significantly or uniquely affect
the communities of Indian tribal
governments, nor would it impose
direct compliance costs on them. Thus,
Executive Order 13175 does not apply
to this rule.
G. Executive Order 13045: Protection of
Children Pram Environmental Risks and
Safety Risks
Executive Order 13045, entitled
“Protection of Children from
Environmental Health Risks and Safety
Risks (61 FR 19885, April 23, 1997)
applies to any rule that: (1) Is
determined to be “economicall
significant” as defined under Executive
Order 12866. and (2) concerns an
environmental health or safety risk that
EPA has reason to believe may have a
disproportionate effect on children, If
the regulatory action meets both criteria,
the Agency must evaluate the
environmental health or safety effects of
the planned rule on children; and
explain why the planned regulation is
preferable to other potentially effective
and reasonably feasible alternatives
considered by the Agency.
Today’s rule is not subject to the
Executive Order because it is not
economically significant as defined in
Executive Order 12866.
H. Executive Order 13211: Actions That
Signijicantly Affect Energy Supply,
Distribution or Use
Today’s final rule is not a “significant
energy action” as defined in Executive
Order 13211 • “Actions Concerning
Regulations That Significantly Affect
Energy Supply, Distribution, or Use” (66
FR 28355, May 22, 2001) because it is
not likely to have a significantly adverse
effect on the supply, distribution, or use
of energy. Further, we have concluded
that this rule is not likely to have any
adverse energy effects.
I. National Technology Transfer and
Advancement Act
Section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (“NT’FAA”), Public Law
104—113, section 12(d) (15 U.S.C. 272
note), directs EPA to use voluntary
consensus standards in its regulatory
activities, unless to do so would be
inconsistent with applicable law or
otherwise impractical. Voluntary
consensus standards are technical
standards (e.g., materials specifications,
test methods, sampling procedures, and
business practices) that are developed or
adopted by voluntary consensus
standards bodies. The NTTAA directs
EPA to provide Congress, through 0MB.
explanations when the Agency decides
not to use available and applicable
voluntary consensus standards. Today’s
rule involves technical standards.
Therefore, the requirements of section
12(d) of the National Technology
Transfer and Advancement Act of 1995
(15 U.S.C. 272) apply.
Today’s final rule is based upon a
proposed rule that was developed with
the assistance of a regulatory negotiation
committee comprised of various affected
stakeholder groups and modified
slightly, based upon public comments
received in response to the proposed
rule. When developing the proposed
-rule, EPA considered using the existing
standard developed by ASTM
International as the federal standard for
all appropriate inquiries. This standard
is known as the AS’FM E1527—2000
standard (“Standard Practice fur
Environmental Site Assessment: Phase I
Environmental Site Assessment
Process”). However, when we proposed
the federal standards for all appropriate
inquiries, EPA determined that the
ASTM E1527—2000 standard Is
inconsistent with applicable law.
In CERCLA section 1O1(35)(B),
Congress included ten specific criteria
to be used in promulgating the all
appropriate inquiries rule. The 2000
version of the ASTM Phase I
Environmental Site Assessment Process
does not address all of the required
criteria. For example, the ASTM
International standard does not provide
for interviews of past owners, operators,
and occupants of a facility. The statute,
however, states that the federally
promulgated standard “shall include
* * * interviews with past and present
owners, operators, and occupants of the
facility for the purpose of gathering
information regarding the potential for
contamination at the fadlity.” CERCLA
section 101 (35)(B)(iii)(U). In addition, as
outlined in the preamble to the
proposed rule (69 FR 52541) the ASTM
E1527—2000 standard also does not meet
other statutory requirements. As a
result, use of the ASTM E1527—2000
standard would be inconsistent with
applicable law.
In today’s final rule, EPA is
referencing the updated standards and
practices developed by ASTM
International and known as Standard
E1527—05 (entitled “Standard Practice
for Environmental Site Assessments:
Phase I Environmental Site Assessment
Process”). The Agency has determined
that this voluntary consensus standard
is consistent with today’s final rule and
is compliant with the statutory criteria
for all appropriate inquiries. Persons
conducting all appropriate inquiries
may use the procedures included in the
ASTM Cl 527—05 standard to comply
with today’s final rule.
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66107
I. Executive Order 12898: Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
Executive Order 12898, “Federal
Actions to Address Environmental
Justice in Minority Populations and
Low-Income Populations” (February 11,
1994). is designed to address the
environmental and human health
conditions of minority and low-income
populations. EPA is committed to
addressing environmental justice
concerns and has assumed a leadership
role in environmental justice initiatives
to enhance environmental quality for all
citizens of the United States. The
Agency’s goals are to ensure that no
segment of the population, regardless of
race, color, national origin, income, or
net worth bears disproportionately high
and adverse human health and
environmental impacts as a result of
EPA’s policies, programs, and activities.
Our goal Is to ensure that all citizens
live in clean and sustainable
communities. In response to Executive
Order 12898, and to concerns voiced by
many groups outside the Agency, EPA’s
Office of Solid Waste and Emergency
Response (OSWER) formed an
Environmental Justice Task Force to
analyze the array of environmental
justice issues specific to waste programs
and to develop an overall strategy to
idontify and address these issues
(OSWER Directive No. 9200.3—17).
EPA’s brownfields program has a
particular emphasis on addressing
concerns specific to environmental
justices communities. Many of the
communities and neighborhoods that
are most significantly Impacted by
brownfields are environmental justice
communities. EPA’s brownfields
program targets such communities for
assessment, cleanup, and revitalization.
The brownfields program has a long
history of working with environmental
justice communities and advocates
through our technical assistance and
grant programs. In addition to the
monies awarded to such communities in
the form of assessment and cleanup
grants. the brownfields program also
works with environmental justice
communities through our job training
grants program. The job training grants
provide money to government entities to
facilitate the training of persons living
in or near brownfields communities to
attain skills for conducting site
assessments and cleanups.
Given that environmental justice
communities are significantly impacted
by brownfields, and the federal
standards for all appropriate inquiries
may play a primary role in encouraging
the assessment and cleanup of
brownfields sites, EPA made it a priority
to obtain input from representatives of
environmental justice interest groups
during the development of today’s
rulemaking. The Negotiated Rulemaking
Committee tasked with developing the
all appropriate inquiries proposed rule
included three representatives from
environmental justice advocacy groups.
Each representative played a significant
role in the negotiations and in the
development of the proposed rule.
Today’s final rule includes no
significant changes to the proposed rule
and in particular, includes no changes
that will significantly or
disproportionately impact
environmental justice communities.
K. Congressional Review Act
The Congressional Review Act, 5
U.S.C. 801 et seq., as added by the Small
Business Regulatory Enforcement
Fairness Act of 1996, generally provides
that before a rule may take effect, the
agency promulgating the rule must
submit a rule report, which includes a
copy of the rule, to each House of the
Congress and to the Comptroller General
of the United States. EPA will submit a
report containing this rule and other
required information to the U.S. Senate,
the U.S. House of Representatives, and
the Comptroller General of the United
States prior to publication of the rule in
the Federal Register. A major rule
cannot take effect until 60 days after it
is published in the Federal Register.
This action is not a “major rule” as
defined by 5 U.S.C. 804(2). This rule
will be effective November 1, 2006.
List of Subjects in 40 CFR Part 312
Environmental protection,
Administrative practice and procedure,
Hazardous substances,
Intergovernmental relations, Reporting
and recordkeeping requirements.
Dated. October 21, 2005
Stephen L. Johnson.
Administrator.
• For reasons set out in the preamble,
title 40, chapter 1 of the Code of Federal
Regulations is amended by revising part
312 as follows:
PART 312—INNOCENT
LANDOWNERS, STANDARDS FOR
CONDUCTING ALL APPROPRIATE
INQUIRIES
Subpart A—Introduction
Sec.
312.1 Purpose. applicability, scope, and
disclosure obligations
Subpart B—DefinItions and References
312.10 Definitions
312 11 References.
Subpart C—Standards end Practices
312.20 All appropriate inquiries.
312.21 Results of inquiry by an
environmental professional.
312.22 Additional Inquiries.
312.23 interviews with past and-prbsent
owners, operators, and occupants.
312.24 Reviews of historical sources of
information.
312.25 Searches for recorded environmental
cleanup liens.
312.26 Reviews of federal, state, tribal and
local government records
312.27 Visuallnspectionsofthe facility and
of adjoining properties.
312.28 Specialized knowledge or
expenence on the part of the defendant
312.29 The relationship of the purchase
pnce to the value of the property, if the
property was not contammated.
312.30 Commonly known or reasonably
ascertainable information about the
property.
312.31 The degree of obviousness of the
presence or likely presence of
contamination at the property, and the
ability to detect the contamination by
appropnate investigation.
Authority: Section 101 (35)(B) of CERCLA.
as amended, 42 U.s c 9601(35)(B)
PART 312—INNOCENT
LANDOWNERS, STANDARDS FOR
CONDUCTING ALL APPROPRIATE
INQUIRIES
Subpart A—Introduction
§31 2.1 Purpose, applIcabIlIty, scope and
disclosure oblIgations.
(a) Purpose. The purpose of this
section is to provide standards and
practices for “all appropriate inquiries”
for the purposes of CERCLA sections
101 (35)(B)(i)(l) and 101(35)(B)(ii) and
(iii).
(b) Applicability. The requirements of
this part are applicable to:
(1) Persons seeking to establish:
(ii The innocent landowner defense
pursuant to CERCLA sections 101 (35)
and 107(b)(3);
(ii) The bona fide prospective
purchaser liability protection pursuant
to CERCLA sections 101(40) and 107(r);
(iii) The contiguous property owner
liability protection pursuant to CERCLA
section 107(q); and
(2) persons conducting site
characterization and assessments with
the use of a grant awarded under
CERCLA section 104(k)(2)(B).
(c) Scope. (1) Persons seeking to
establish one of the liability protections
under paragraph (b)(1) of this section
must conduct investigations as required
in this part, including an inquiry by an
environmental professional, as required
under § 312.21, and the additional
inquiries defined in § 312.22, to identify
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66108 Federal Register / Vol. 70, No. 210/Tuesday, November 1, 2005 / Rules and Regulations
conditions indicative of releases or
threatened releases, as defined in
CERCLA section 101(22), of hazardous
substances, as defined in CERCLA
section 101(14).
(2) Persons identified in paragraph
-(b)(2) of this section must conduct
investigations required in this part,
including an inquiry by an
environmental professional, as required
under § 312.21, and the additional
inquiries defined in § 312.22, to identify
conditions indicative of releases and
threatened releases of hazardous
substances, as defined in CERCLA
section 101(22), and as applicable per
the terms and conditions of the grant or
cooperative agreement, releases and
threatened releases of:
(i) Pollutants and contaminants, as
defined in CERCLA section 101(33);
(ii) Petroleum or petroleum products
excluded from the definition of
“hazardous substance” as defined in
CERCLA section 101(14); and
(iii) Controlled substances, as defined
in 21 U.S.C. 802.
(d) Disclosure obligations. None of the
requirements of this part limits or
expands disclosure obligations under
any federal, state, tribal, or local law,
including the requirements under
CERCLA sections 101(40)(c) and
107(q)(1)(A)(vii) requiring persons,
including environmental professionals,
to provide all legally required notices
with respect to the discovery of releases
of hazardous substances. It is the
obligation of each person, including
environmental professionals.
conducting the inquiry to determine his
or her respective disclosure obligations
under federal, state, tribal, and local law
and to comply with such disclosure
requirements.
Subpart B—Definitions and References
§312.10 DefinItions.
(a) Terms used in this part and not
defined below, but defined in either
CERCLA or 40 CFR part 300 (the
National Oil and Hazardous Substances
Pollution Contingency Plan) shall have
the definitions provided in CERCLA or
40 CFR part 300.
(b) When used in this part, the
following terms have the meanings
provided as follows:
Abandoned property means: property
that can be presumed to be deserted, or
an intent to relinquish possession or
control can be inferred from the general
disrepair or lack of activity thereon such
that a reasonable person could believe
that there was an intent on the part of
the current owner to surrender rights to
the property.
Adjoining properties means: any real
property or properties the border of
which is (are) shared in part or in whole
with that of the subject property, or that
would be shared in part or in whole
with that of the subject property but for
a street, road, or other public
thoroughfare separating the properties.
Data gap-means: a lack of oi inability
to obtain information required by the
standards and practices listed in subpart
C of this part despite good faith efforts
by the environmental professional or
persons identified under §312.1(b), as
appropriate, to gather such information
pursuant to § 312.20(e)(1)and
312.20(e)(2).
Date of acquisition or purchase date
means: the date on which a person
acquires title to the property.
Environmental Professional means:
(1) a person who possesses sufficient
specific education, training, and
experience necessary to exercise
professional judgment to develop
opinions and conclusions regarding
conditions indicative of releases or
threatened releases (see § 312.1(c)) on,
at, in, or to a property, sufficient to meet
the objectives and performance factors
in § 312.20(e) and (I).
(2) Such a person must:
(i) Hold a current Professional
Engineer’s or Professional Geologist’
license or registration from a state, tribe,
or U.S. territory (or the Commonwealth
of Puerto Rico) and have the equivalent
of three (3) years of full-time relevant
experience; or
(ii) Be licensed or certified by the
federal government, a state, tribe, or
U.S. territory (or the Commonwealth of
Puerto Rico) to perform environmental
inquiries as defined in § 312.21 and
have the equivalent of three (3) years of
full-time relevant experience; or
(iii) Have a Baccalaureate or higher
degree from an accredited institution of
higher education in a discipline of
engineering or science and the
equivalent of five (5) years of full-time
relevant experience; or
(iv) Have the equivalent of ten (10)
years of full-time relevant experience.
(3) An environmental professional
should remain current in his or her field
through participation in continuing
education or other activities.
(4) The definition of environmental
professional provided above does not
preempt state professional licensing or
registration requirements such as those
for a professional geologist, engineer, or
site remediation professional. Before
commencing work, a person should
determine the applicability of state
professional licensing or registration
laws to the activities to be undertaken
as part of the inquiry identified in
§312.21(b).
(5) A person who does not qualify as
an environmental professional under
the foregoing definition may assist in
the conduct of all appropriate inquiries
in accordance with this part if such
person is under the supervision or
responsible charge of a person meeting
the definition of an environmental
professional provided above when
conducting such activities.
Relevant experience, as used in the
definition of environmental professional
in this section, means: participation in
the performance of all appropriate
inquiries investigations, environmental
site assessments, or other site
investigations that may include
environmental analyses, investigations,
and remediation which involve the
understanding of surface and subsurface
environmental conditions and the
processes used to evaluate these
conditions and for which professional
judgment was used to develop opinions
regarding conditions indicative of
releases or threatened releases (see
§ 312.1(c)) to the subject property.
Good faith means: the absence of any
intention to seek an unfair advantage or
to defraud another party; an honest and
sincere intention to fulfill one’s
obligations in the conduct or transaction
concerned.
Institutional controls means: non-
engineered instruments, such as
administrative and/or legal controls,
that help to minimize the potential for
human exposure to contamination and/
or protect the integrity of a remedy.
§ 312.11 References.
The following industry standards may
be used to comply with the
requirements set forth in §g312.23
through 312.31:
(a) The procedures of ASTM
International Standard E1527—05
entitled “Standard Practice for
Environmental Site Assessments: Phase
I Environmental Site Assessment
Process.”
(b) [ Reservedl
Subpart C—Standards and Practices
§ 312.20 All appropriate InquIries.
(a) “All appropriate inquiries”
pursuant to CERCLA section 101(35)(B)
must be conducted within one year
prior to the date of acquisition of the
subject property and must include:
(1) An inquiry by an environmental
professional (as defined in § 312.10), as
provided in § 312.21;
(2) The collection of information
pursuant to § 312.22 by persons
identified under § 312.1(b); and
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66109
(3) Searches for recorded
environmental cleanup liens, as
required in § 312.25.
(b) Notwithstanding paragraph (a) of
this section, the following components
of the all appropriate inquiries must be
conductpd or updated within 180 days
of and prior to the date of acquisition of
the subject property:
(1) Interviews with past and present
owners, operators, and occupants (see
§ 312.23);
(2) Searches for recorded
environmental cleanup liens (see
§ 312.25);
(3) Reviews of federal, tribal, state,
and local government records (see
§ 312.26);
(4) Visual inspections of the facility
and of adjoining properties (see
§ 312.27); and
(5) The declaration by the
environmental professional (see
§ 312.21(d)).
(c) All appropriate inquiries may
include the results of and information
contained in an inquiry previously
conducted by, or on the behalf of,
persons identified under § 31 2.1(b) and
who are responsible for the inquiries for
the subject property, provided:
(1) Such information was collected
during the conduct of all appropriate
inquiries in compliance with the
requirements of CERCLA sections
101(35)(B), 101(40)(B) and
107(q)(A)(viii);
(2) Such information was collected or
updated within one year prior to the
date of acquisition of the subject
property;
(3) Notwithstanding paragraph (b)(2)
of this section, the following
components of the inquiries were
conducted or updated within 180 days
of and prior to the date of acquisition of
the subject property:
(i) interviews with past and present
owners, operators, and occupants (see
§ 312.23);
(ii) Searches for recorded
environmental cleanup liens (see
§ 312.25);
(iii) Reviews of federal, tribal, state.
and local government records (see
§ 312.26);
(iv) Visual inspections of the facility
and of adjoining properties (see
§ 312.27); and
(v) The declaration by the
environmental professional (see
§ 312.21(d)).
(4) Previously collected information is
updated to include relevant changes in
the conditions of the property and
specialized knowledge. as outlined in
§ 312.28, of the persons conducting the
all appropriate inquiries for the subject
property, including persons identified
in §312.1(b) and the environmental
professional, defined in § 312.10.
(d) All appropriate inquiries can
include the results of report(s) specified
in § 312.21(c), that have been prepared
by or for other persons, provided that:
(1) The report(s) meets the objectives
and performance f ctors of this
regulation, as specified in paragraphs (e)
and (I) of this section; and
(2) The person specified in § 312.1(b)
and seeking to use the previously
collected information reviews the
information and conducts the additional
inquiries pursuant to § 312.28, 312.29
and 312.30 and the all appropriate
inquiries are updated in paragraph (b)(3)
of this section, as necessary.
(e) Objectives. The standards and
practices set forth in this part for All
Appropriate Inquiries are intended to
result in the identification of conditions
indicative of releases and threatened
releases of hazardous substances on, at,
in. or to the subject property.
(1) In performing the all appropriate
inquiries, as defined in this section and
provided in the standards and practices
set forth this subpart, the persons
identified under § 312.1(b)(1) and the
environmental professional, as defined
in § 312.10, must seek to identify
through the conduct of the standards
and practices set forth in this subpart 1
the following types of information about
the subject property:
(1) Current and past property uses and
occupancies;
(ii) Current and past uses of
hazardous substances;
(iii) Waste management and disposal
activities that could have caused
releases or threatened releases of
hazardous substances;
(iv) Current and past corrective
actions and response activities
undertaken to address past and on-going
releases of hazardous substances;
(v) Engineering controls;
(vi) institutional controls; and
(vii) Properties adjoining or located
nearby the subject property that have
environmental conditions that could
have resulted in conditions indicative of
releases or threatened releases of
hazardous substances to the subject
property.
(2) tn the case of persons identified in
§ 312.1(b)(2), the standards and
practices for All Appropriate Inquiries
set forth in this part are intended to
result in the identification of conditions
indicative of releases and threatened
releases of hazardous substances,
pollutants, contaminants, petroleum
and petroleum products, and controlled
substances (as defined in 21 U.S.C. 802)
on, at, in, or to the subject property. In
performing the all appropriate inquiries,
as defined in this section and provided
in the standards and practices set forth
in this subpart, the persons identified
under § 31 2.1(b) and the environmental
professional, as defined in §312.10,
must seek to identify through the
conduct of the standards and practices
set forth in this subpart, the following
types of information about the subject
property:
(i) Current and past property uses and
occupancies;
(ii) Current and past uses of
hazardous substances, pollutants.
contaminants, petroleum and petroleum
products. and controlled substances (as
defined in 21 U.S.C. 802);
(iii) Waste management and disposal
activities;
(iv) Current and past corrective
actions and response activities
undertaken to address past and on-going
releases of hazardous substances
pollutants, contaminants, petroleum
and petroleum products, and controlled
substances (as defined in 21 U.S.C. 802);
(v) Engineering controls;
(vi) Institutional controls; and
(vii) Properties adjoining or located
nearby the subject property that have
environmental conditions that could
have resulted in conditions indicative of
releases or threatened releases of
hazardous substances, pollutants,
contaminants, petroleum and petroleum
products, and controlled substances (as
defined in 21 U.S.C. 802) to the subject
property.
(1) Performance factors. In performing
each of the standards and practices set
forth in this subpart and to meet the
objectives stated in paragraph (e) of this
section, the persons identified under
§ 312.1(b) or the environmental
professional as defined in § 312.10 (as
appropriate to the particular standard
and practice) must seek to:
(1) Gather the information that is
required for each standard and practice
listed in this subpart that is publicly
available, obtainable from its source
within reasonable time and cost
constraints, and which can practicably
be reviewed; and
(2) Review and evaluate the
thoroughness and reliability of the
information gathered in complying with
each standard and practice listed in this
subpart taking into account information
gathered in the course of complying
with the other standards and practices
of this subpart.
(g) To the extent there are data gaps
(as defined in § 312.10) in the
information developed as part of the
inquiries in paragraph (e) of this section
that affect the ability of persons
(including the environmental
professional) conducting the all
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66110 Federal Register/Vol. 70, No. 210/Tuesday, November 1, 2005/Rules and Regulations
appropriate inquiries to identify
conditions indicative of releases or
threatened releases in each area of
inquiry under each standard and
practice such persons should identify
such data gaps, identify the sources of
_ ationconsulteo..ath lms&snch
data gaps, and comment upon the
significance of such data gaps with
regard to the ability to identify
conditions indicative of releases or
threatened releases of hazardous
substances [ and in the case of persons
identified in § 312.l(b)(2), hazardous
substances, pollutants, contaminants,
petroleum and petroleum products, and
controlled substances (as defined in 21
U.S.C. 802)] on, at, in, or to the subject
property. Sampling and analysis may be
conducted to develop information to
address data gaps.
(h) Releases and threatened releases
identified as part of the all appropriate
inquiries should be noted in the report
of the inquiries. These standards and
practices however are not intended to
require the identification in the written
report prepared pursuant to § 312.21(c)
of quantities or amounts, either
individually or in the aggregate, of
hazardous substances pollutants,
contaminants, petroleum and petroleum
products, and controlled substances (as
defined in 21 U.S.C. 802) that because
of said quantities and amounts,
generally would not pose a threat to
human health or the environment.
§312.21 Results of Inquiry by an
environmental professional.
(a) Persons identified under § 312.1(b)
must undertake an inquiry, as defined
in paragraph (b) of this section. by an
environmental professional, or
conducted under the supervision or
responsible charge of, an environmental
professional, as defined in § 312.10.
Such inquiry is hereafter referred to as
“the inquiry of the environmental
professional.”
(b) The inquiry of the environmental
professional must include the
requirements set forth in § 312.23
(interviews with past and present
owners * * A), 312.24 (reviews of
historical sources * * *), 312.26
(reviews of government records), 312.27
(visual inspections), 312.30 (commonly
known or reasonably ascertainable
information), and 312.31 (degree of
obviousness of the presence * * * and
the ability to detect the contamination
* * *)• In addition, the inquiry should
take into account information provided
to the environmental professional as a
result of the additional inquiries
conducted by persons identified in
§ 312.1(b) and in accordance with the
requirements of 312.22.
(c) The results of the inquiry by an
environmental professional must be
documented in a written report that, at
a minimum, includes the following:
(1) An opinion as to whether the
inquiry has identified conditions
“ (I, Wel declare that, to the best of (my,
ourl professional knowledge and belief, [ I,
wel meet the defliution of Environmental
Professional as defined in § 312 10 of this
part”
‘II We] have the specific qualifications
based on education, training, and experience
to assess a property of the nature, history,
and setting of the subject property (I, We]
have developed and performed the all
appropriate inquiries in conformance with
the standards and practices set forth in 40
CFR Part 312.”
§ 312.22 Additional inquiries.
(a) Persons identified under § 312.1(b)
must conduct the inquiries listed in
paragraphs (a)(1) through (a)(4) below
and may provide the Information
associated with such inquiries to the
environmental professional responsible
for conducting the activities listed in
§ 312.21:
11Aareauiredby 312.25and If not
(4) As required by § 312.30, and if not
otherwise obtained by the
environmental professional. commonly
known or reasonably ascertainable
information about the subject property.
§312.23 intervIews with past and present
owners, operators, and occupants.
(a) Interviews with owners, operators.
and occupants of the subject property
must be conducted for the purposes of
achieving the objectives and
performance factors of § 312.20(e) and
(0.
(b) The inquiry of the environmental
professional must include interviewing
the current owner and occupant of the
subject property. If the property has
multiple occupants, the inquiry of the
environmental professional shall
include interviewing major occupants,
as well as those occupants likely to use,
store, treat, handle or dispose of
hazardous substances [ and in the case of
inquiries conducted for persons
identified in §312.1(b)(2) pollutants,
contaminants, petroleum and petroleum
products, and controlled substances (as
defined in 21 U.s.c. 802)], or those who
have likely done so in the past.
(c) The inquiry of the environmental
professional also must include, to the
extent necessary to achieve the
objectives and performance factors of
§ 312.20(e) and (I ), interviewing one or
more of the following persons:
(1) Current and past facility managers
with relevant knowledge of uses and
physical characteristics of the property;
(2) Past owners, occupants, or
operators of the subject property; or
(3) Employees of current and past
occupants of the subject property.
(d) In the case of inquiries conducted
at “abandoned properties.” as defined
in § 312.10. where there is evidence of
potential unauthorized uses of the
subject property or evidence of
releases of hazardous substances [ and in otherwise obtained by the
the case of inquiries conducted for environmental professional,
persons identified in § 312.1(b)(2) environmental cleanup liens against the
conditions indicative of releases and subject property that are filed or
threatened releases of pollutants, recorded under federal, tribal, state, or
contaminants, petroleum and petroleum local law;
products, and controlled substances (as (2) As required by § 312.28,
defined in 21 U.S.C. 802)] on, at, in. or. specialized knowledge or experience of
to the subject property; the person identified in § 312.1(b);
(2) An identification of data gaps (as (3] As required by § 312.29, the
defined in § 312.10) in the information relationship of the purchase price to the
developed as part of the inquiry that fair market value of the subject property,
affect the ability of the environmental if the property was not contaminated;
professional to identify conditions and
indicative of releases or threatened
releases of hazardous substances land in
the case of inquiries conducted for
persons identified in § 312.1(b)(2)
conditions indicative of releases and
threatened releases of pollutants,
contaminants, petroleum and petroleum
products, and controlled substances (as
defined in 21 U.S.C. 802)] on, at, in, or
to the subject property and comments
regarding the significance of such data
gaps on the environmental
professional’s ability to provide an
opinion as to whether the inquiry has
identified conditions indicative of
releases or threatened releases on, at, in,
or to the subject property. If there are
data gaps such that the environmental
professional cannot reach an opinion
regarding the identification of
conditions indicative of releases and
threatened releases, such data gaps must
be noted in the environmental
professional’s opinion in paragraph
(c)(1) of this section; and
(3) The qualifications of the
environmental professional(s).
(d) The environmental professional
must place the following statements in
the written document identified in
paragraph (C) of this section and sign the
document:
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66111
uncontrolled access to the subject
property. the environmental
professional’s inquiry must include
interviewing one or more (as necessary)
owners or occupants of neighboring or
nearby properties from which it appears
possible-to have observed uses of, or -
releases at, such abandoned properties
for the purpose of gathering information
necessary to achieve the objectives and
performance factors of § 312.20(e) and
(f).
§ 312.24 RevIews of historical sources of
Information.
(a) Historical documents and records
must be reviewed for the purposes of
achieving the objectives and
performance factors of § 312.20(e) and
(1). Historical documents and records
may include, but are not limited to,
aerial photographs, fire insurance maps,
building department records, chain of
title documents, and land use records.
(b) Historical documents and records
reviewed must cover a period of time as
far back in the history of the subject
property as it can be shown that the
property contained structures or from
the time the property was first used for
residential, agricultural, commercial,
industrial, or governmental purposes.
For the purpose of achieving the
objectives and performance factors of
§ 312.20(e) and (f), the environmental
professional may exercise professional
judgment in context of the facts
available at the time of the inquiry as to
how far back in time ills necessary to
search historical records.
§ 312.25 Searches for recorded
environmental cleanup liens.
(a) All appropriate inquiries must
include a search for the existence of
environmental cleanup liens against the
subject property that are filed or
recorded under federal, tribal, state, or
local law.
(b) All information collected
regarding the existence of such
environmental cleanup liens associated
with the subject property by persons to
whom this part is applicable per
§ 312.1(b) and not by an environmental
professional. may be provided to the
environmental professional or retained
by the applicable party.
§ 312.26 Reviews of Federal, State, Tribal,
and local government records.
(a) Federal, tribal, state, and local
government records or data bases of
government records of the subject
property and adjoining properties must
be reviewed for the purposes of
achieving the objectives and
performance factors of § 312.20(e) and
(0.
(b) With regard to the subject
property. the review of federal, tribal,
and state government records or data
bases of such government records and
local government records and data bases
of such records should include:
(1) Records of.reported- releases or
threatened releases, including site
investigation reports for the subject
property;
(2) Records of activities, conditions,
or incidents likely to cause or contribute
to releases or threatened releases as
defined in § 312.1(c), including landfill
and other disposal unit location records
and permits, storage tank records and
permits, hazardous waste handler and
generator records and permits, federal,
tribal and state government listings of
sites identified as priority cleanup sites,
and spill reporting records;
(3) ERCL1S records;
(4) Public health records;
(5) Emergency Response Notification
System records;
(6) Registries or publicly available
lists of engineering controls; and
(7) Registries or publicly available
lists of institutional controls, including
environmental land use restrictions,
applicable to the subject property.
(c) With regard to nearby or adjoining
properties, the review of federal, tribal,
state, and local government records
databases of government records should
include the identification of the
following:
(1) Properties for which there are
government records of reported releases
or threatened releases. Such records or
databases containing such records and
the associated distances from the subject
property for which such information
should be searched include the
following:
(i) Records of NPL sites or tribal- and
state-equivalent sites (one mile);
(ii) RCRA facilities subject to
corrective action (one mile);
(iii) Records of federally-registered, or
state-permitted or registered, hazardous
waste sites identified for investigation
or remediation, such as sites enrolled in
state and tribal voluntary cleanup
programs and tribal- and state-listed
brownfields sites (one-half mile);
(iv) Records of leaking underground
storage tanks (one-half mile); and
(2) Properties that previously were
identified or regulated by a government
entity due to environmental concerns at
the property. Such records or databases
containing such records and the
associated distances from the subject
property for which such information
should be searched include the
following:
(i) Records of delisted NPL sites (one-
half mile);
(ii) Registries or publicly available
lists of engineering controls (one-half
mile); and
(iii) Records of former CERCLIS sites
with no further remedial action notices
(one-half mile).
- (3) Properties for which there are
records of federally-permitted, tribal-
permitted or registered, or state- - - -
permitted or registered waste
management activities. Such records or
data bases that may contain such
records include the following:
(i) Records of RCRA small quantity
and large quantity generators (adjoining
properties);
(ii) Records of federally-permitted,
tribal-permitted, or state-permitted (or
registered) landfills and solid waste
management facilities (one-half mile);
and
(iii) Records of registered storage
tanks (adjoining property).
(4) A review of additional government
records with regard to sites identified
under paragraphs (c)(1) through (c)(3) of
this section may be necessary in the
judgment of the environmental
professional for the purpose of
achieving the objectives and
performance factors of § 312.20(e) and
(f).
(d) The search distance from the
subject property boundary for reviewing
government records or databases of
government records listed in paragraph
(C) of this section may be modified
based upon the professional judgment of
the environmental professional. The
rationale for such modifications must be
documented by the environmental
professional. The environmental
professional may consider one or more
of the following factors in determining
an alternate appropriate search distance:
(1) The nature and extent of a release;
(2) Geologic, hydrogeologic, or
topographic conditions of the subject
property and surrounding environment;
(3) Land use or development
densities;
(4) The property type;
(5) Existing or past uses of
surrounding properties;
(6) Potential migration pathways (e.g.,
groundwater flow direction, prevalent
wind direction); or
(7) Other relevant factors.
§ 312.27 Visual inspections of the facility
and of adjoining properties.
(a) For the purpose of achieving the
objectives and performance factors of
§ 312.20(e) and (fl, the inquiry of the
environmental professional must
include:
(1) A visual on-site inspection of the
subject property and facilities and
improvements on the subject property,
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66112 Federal Register / Vol. 70, No. 210/Tuesday, November 1, 2005 / Rules and Regulations
including a visual inspection of the
areas where hazardous substances may
be or may have been used, stored.
treated, handled, or disposed. Physical
limitations to the visual inspection must
he noted.
(2) A visual inspection of adjoining
properties, from the subject property
line, public rights-of-way, or other
vantage point (e.g., aerial photography),
including a visual inspection of areas
where hazardous substances may be or
may have been stored, treated, handled
or disposed. Physical limitations to the
inspection of adjacent properties must
be noted.
(b) Persons conducting site
characterization and assessments using
a grant awarded under CERCLA section
104(k)(2)(B) must include in the
inquiries referenced in § 312.27(a)
visual inspections of areas where
hazardous substances, and may include,
as applicable per the terms and
conditions of the grant or cooperative
agreement, pollutants and
contaminants, petroleum and petroleum
products, and controlled substances as
defined in 21 U.s.c. 802 may be or may
have been used, stored, treated, handled
or disposed at the subject property and
adjoining properties.
(c) Except as noted in this subsection,
a visual on-site inspection of the subject
property must be conducted. In the
unusual circumstance where an on-site
visual inspection of the subject property
cannot be performed because of
physical limitations, remote and
inaccessible location, or other inability
to obtain access to the property,
provided good faith (as defined in
§ 312.10) efforts have been taken to
obtain such access, an on-site inspection
will not be required. The mere refusal
of a voluntary seller to provide access to
the subject property does not constitute
an unusual circumstance. In such
unusual circumstances, the inquiry of
the environmental professional must
include:
(1) Visually inspecting the subject
property via another method (such as
aerial imagery for large properties), or
visually inspecting the subject property
from the nearest accessible vantage
point (such as the property line or
public road for small properties);
(2) Documentation of efforts
undertaken to obtain access and an
explanation of why such efforts were
unsuccessful; and
(3) Documentation of other sources of
information regarding releases or
threatened releases at the subject
property that were consulted in
accordance with § 312.20(e). Such
documentation should include
comments by the environmental
professional on the significance of the
failure to conduct a visual on-site
inspection of the subject property with
regard to the ability to identify
conditions indicative of releases or
threatened releases on, at, in, or to the
subjeci property, if any. - -
§ 312.28 SpecIalized knowledge or
experience on the part of the defendant.
(a) Persons to whom this part is
applicable per § 312.1(b) must take into
account, their specialized knowledge of
the subject property. the area
surrounding the subject property, the
conditions of adjoining properties, and
any other experience relevant to the
inquiry, for the purpose of identifying
conditions indicative of releases or
threatened releases at the subject
property, as defined in § 312.1(c).
(b) All appropriate inquiries, as
outlined in § 312.20, are not complete
unless the results of the inquiries take
into account the relevant and applicable
specialized knowledge and experience
of the persons responsible for
undertaking the inquiry (as described in
§ 312.1(b)).
§ 312.29 The relationship of the purchase
price to the value of the property, if the
property was not contaminated.
(a) Persons to whom this part is
applicable per § 312.1(b) must consider
whether the purchase price of the
subject property reasonably reflects the
fair market value of the property, if the
property were not contaminated.
(b) Persons who conclude that the
purchase price of the subject property
does not reasonably reflect the fair
market value of that property, if the
property were not contaminated, must
consider whether or not the differential
in purchase price and fair market value
is due to the presence of releases or
threatened releases of hazardous
substances.
(c) Persons conducting site
characterization and assessments with
the use of a grant awarded under
CERCLA section 104(k)(2)(S) and who
know that the purchase price of the
subject property does not reasonably
reflect the fair market value of that
property, if the property were not
contaminated, must consider whether or
not the differential in purchase price
and fair market value is due to the
presence of releases or threatened
releases of hazardous substances,
pollutants, contaminants, petroleum
and petroleum products, ot controlled
substances as defined in 21 U.S.C. 802.
§31 2.30 Commonly known or reasonably
ascertainable Information about the
property.
(a) Throughout the inquiries, persons
to whom this part is applicable per
§ 312.1(b) and environmental
professionals conducting the Inquiry
must take into account commonly
known or reasonably ascertainable
information within the local community
about the subject property and consider
such information when seeking to
identify conditions indicative of
releases or threatened releases, as set
forth in § 3 12.1(c), at the subject
property.
(b) commonly known information
may include information obtained by
the person to whom this part applies in
§ 312.1(b) or by the environmental
professional about releases or
threatened releases at the subject
property that is incidental to the
information obtained during the inquiry
of the environmental professional.
(c) To the extent necessary to achieve
the objectives and performance factors
of 312.20(e) and (f), persons to whom
this part is applicable per § 312.1(b) and
the environmental professional must
gather information from varied sources
whose input either individually or taken
together niay provide commonly known
or reasonably ascertainable information
about the subject property; the
environmental professional may refer to
one or more of the following sources of
information:
(1) Current owners or occupants of
neighboring properties or properties
adjacent to the subject property;
(2) Local and state government
officials who may have knowledge of, or
information related to, the subject
property;
(3) Others with knowledge of the
subject property; and
(4) Other sources of information (e.g.,
newspapers, Web sites, community
organizations, local libraries and
historical societies).
§312.31 The degree of obviousness of the
presence or likely presence of
contamination at the property, and the
ability to detect the contamination by
appropriate Investigation.
(a) Persons to whom this part is
applicable per § 312.1(b) and
environmental professionals conducting
an inquiry of a property on behalf of
such persons must take into account the
information collected under § 312.23
through 312.30 in considering the
degree of obviousness of the presence of
releases or threatened releases at the
subject property.
(b) Persons to whom this part is
applicable per § 312.1(b) and
-------
Federal Register/Vol. 70, No. 210/Tuesday, November 1, 2005/Rules and Regulations
66113
environmental professionals conducting
an inquiry of a property on behalf of
such persons must take into account the
information collected under § 312.23
through 312.30 in considering the
ability to detect contamination by
appropriate investigation. The Inquiry
of the environmental professional
should include an opinion regarding
additional appropriate investigation, if
any.
IFR Doc. 05—21455 Filed 10—31—05; 8:45 amI
DIWNO CODE 6560-65-P
-------
CERCLA Enforcement Policies on the Internet
The address below lists all of EPA’s CERCLA Enforcement policies.
http://www.epa.gov/compliance/resources/policies/cleanup/superfund
All CERCLA Enforcement policies from 1983 on are listed by name. To get into more specific
policies that involve landowner liability issues, one can click on “landowner liability” to find
those specific policies.
Helen Keplinger, Attorney-Advisor
OECAJOSREIRSD
PHONE 301-229-5526
FAX 301-229-3954
VOICE MAIL 202-564-4221
-------
NOTES
-------
MultiDex
GtkAek,i,ce ktSrsteo,
-------
PRP Search Issues
at Mercury Release Sites
-------
WILDA WATSON COBB
Wilda Watson Cobb is an Associate Regional Counsel for the U.S. EPA Region 4 in the
Environmental Accountability Division office of CERCLA/Water Legal Support. In her capacity
as an attorney with Region 4 Ms. Cobb provides advice and assistance on legal matters including
enforcement and policy matters Her particular areas of expertise in the CERCLA Office are
emergency response and removal issues and issues involving the National Contingency Plan
(NCP). Most recently Ms. Cobb has been working on the hurricane response and the revisions to
the NCP.
Ms. Cobb has been involved in writing the recently published guidance document “Determinations
Regarding Which Sites are “Eligible Response Sites” under CERCLA Section 101(41(C) (I), as
added By the Small Business Liability Relief and Brownfields Revitalization Act.” Ms Cobb has
spoken on issues dealing with the new Brownfields Act and has lectured on the National
Contingency Plan.
Ms. Cobb has received several bronze metals over the past 14 years for her work at EPA In
2002, she received a National Notable Achievement Award for her work on the 300 million gallon
release of coal slurry into the waters of Martin County, Kentucky. She earned her J.D. in 1991
from the University Of South Carolina School of Law and her B.A. Summa cum laude, in 1986
from Wofford College. She is member of the Georgia Bar.
-------
MERCURY RELEASES
(IN RESIDENCES AND PUBLIC BUILDINGS)
Wilda Cobb
Region 4
Mercury-specific Laws
• Mercury-Containing end Rechargeable Battery
Management Act of 1996
• Clean Air Act
• Clean Water Act
• RCRA
• Safe Drinking Water Act
Three forms of Mercury
• Elemental Mercury
• Inorganic Mercury
• Organic Mercury
I
-------
SPECIFIC ISSUES
• Use of federal dollars to cleanup and restore
private property—(especially when the property
owner is a PRP)
• Under what circumstance should EPA pursue
cost recoveiy from education institutions and
home owners.
• These are generally releases that are indoor.
• The cleanup may include disposal of personal
property.
• Cleanups may require relocation of residents
• Medical issues concerning residents
WHERE IS THIS MERCURY
• People keep jars of mercuiy in their homes
• Blood Pressure devices and other medical
instruments,
• Barometers and manometers
• Has been found at industrial sites
• Dental offices
• Schools labs
• Antique Grandfather clock
Cont’d
• Use in folk medicine and religious
purposes
• Power Companies and other industries
that use mercury switches, etc.
2
-------
WHERE ARE THESE RELEASES
OCCURRING
• Hosp4tals
• Doctor and dental offices
• Non-profit clinics
• Schools and school buses
• Private Residences and cars
WHY WORRY ABOUT SUCH A
SMALL RELEASE
• Relatively small amounts can result in
dangerous levels of mercury vapor.
• Exposure to mercury vapor can affect
brain and central nervous system
• Low levels of mercury exposure have
been associated with learning problems in
children.
• Mercury can be absorbed through the skin
and accumulate in the kidneys.
3
-------
PRPs
• Owners of the property that is subject to
the cleanup
• Owner of the mercurylor generator
• Who caused the release
LIABILITY
• Strict liability v. Negligence
• Enforcement discretion
Insurance
• Ask for all insurance polices
• There may be may be more than one
policy
• Mortgage Insurance
• Get Assignments signed
4
-------
ABILITY TO PAY
• Along with Insurance policies you will need
to get all the financial information.
QUESTIONS
• Where did the mercury come from?
• How did the release occur?
• Were responsible actions taken to contain the
release?
• Was an adult (over 18 years old) involved in the
acquisition, ownership, storage, or release of the
mercury?
EDUCATIONAL INSTITUTIONS
• Did the mercury come from the school?
• Howwas it stored?
• Why did the School have the mercury?
5
-------
REPLACEMENT & RELOCATION
COSTS
Temporary relocation of the residents may
be required during the cleanup for their
health/safety.
In some cases permanent relocations are
required.
Private/personal property may be
contaminated and need to be disposed of
6
-------
NOTES
-------
MultiDex TM
WckRe/ ,p c 8 hT x$rJMTT
-------
Corporate Business
Practices & Liability
-------
LEO J. MULLIN
Mr. Muffin is a cost recovery expert for the United States Environmental Protection Agency, Region
ifi. He joined EPA as a civil investigator in October 1989. Mr. Mullin’s responsibilities include
conducting and/or overseeing PRP searches; working with the Office of Regional Counsel and
Department of Justice on Cost Recovery complaints; making determinations associated with corporate
veil piercing, corporate successor liability; ability to pay and financial assurance. Mr. Mullin also assists
in responding to questions concerning potential liability from the purchase of contaminated property.
Mr. Mullin has testified as an expert witness on matters such as ability to pay, financial analysis and
property valuation. He has also submitted testimony regarding issues such as corporate veil piercing,
corporate successor liability, and the costs of site cleanups. From 1982 to 1989 Mr. Muffin was
employed as a Revenue Officer by the Internal Revenue Service and prior to 1982, Mr. Mullin worked
for an urban redevelopment consultant. Mr. Mullin received a B.A. in Politics from St. Joseph’s
University in 1982.
-------
JOSEPH TIEGER
Joseph Tieger is a senior environmental protection specialist and team leader in the Office of Site
Remediation Enforcement, Regional Support Division, U.S. Environmental Protection Agency,
Washington, D.C. He began his career with the federal government as a biologist with the San
Francisco District, Army Corps of Engineers, Regulatory Program. He then worked for the U.S. Fish
and Wildlife Service in California, Missouri and Washington, D.C Joe has been with the EPA
CERCLA program since 1989. He has focused on enforcement issues relating to the cleanup of
hardrock mine sites and the associated processing and smelting facilities. Joe is considered to be the
enforcement program’s expert on mine sites, divided estates, and the application of CERCLA liability
at public/private sites. Joe has a B.A. and MA. in Biology, from San Francisco State University, an
M.A. Public Administration, and a Juris Doctor, from George Washington University. He is a member
of the Maryland Bar.
-------
Corp Wars
A series of case examples
that discusses
common business practices
EPISODE 1
Car Wars
FORD
DODGE
Henry Ford v. John F. Dodge
In 1916, the Ford Motor Company earned
surpluses In excess of $100,000,000.
The companys president and majority stockholder, Henry Ford,
sought to stop declaring dividends for investors,
and cut prices below the price for which
they could actually sell cars,
while at the same time increasing the number of
persons employed by his company.
Ford said that he wanted to increase the number of people
who could afford to buy his cars.
I
-------
Henry Ford
E
My ambition is to employ still more men, to spread the benefits of
this indoePlal system to the greatest poesbie numbar, to he them
build up the lives and their homes. To do this we are putting the
greatest share of our prefits back In the business.
Henry Ford
John F. Dodge and others filed an action to cxxnpel the
declaration of dividends.
Show me the moneyll!
b) - John F. Dodge
DODGE v. FORD MOTOR CO.
SUPREME COURT OF MICHIGAN
204 Mlcii. 4S9; 170 N.W. 11$; 1919 MIch. LEXIS 720; 3 A.LR. 413
The Court held that a business corporation is organized
primarily for the profit of the stockholders.
The discretion of the directors is to be exercised
in the choice of means to attaki that end.
and does n extend to the reduction of profits
or the nondistribution of profits among stockholders
in order to benefit the public,
The court upheld the order of the trial court requiring that
directors declare an extra dividend of $19 miflion.
DODGE v. FORD MOTOR CO.
Lessons Learned
Corporations exist for Profit
Other benefits by the company are
incidental.
This is nothing personal it is just business.
2
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Episode 2- ASARCO
Amencan Smelting and Refining Company
a New Jersey corporation organized in 1899
one of the world’s leading producers of
nonferrous metals, principally copper, lead,
zinc, silver and molybdenum,
from its own nines
and through its 54.0% interest in
Southern Peru Copper Corporation (SPCC).
(Sowce 1995 SEC Fing)
ASARCO
Financial Statements 1995
Earnings
Assets $4.3b Revenue $3.2b
.iabeu t , s e Expenses $2.7b
Equity $1.Th Net lname $ 500m
Current Assets $i.2b
Plant Property & Equipment $2.ib
Other Sib
Total Assets $4.3
1995 Copper prices averaged a record $1.35 per pounc
ASARCO ASSETS
Assets?
Or
Liabilities?
3
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ASARCO ASSETS
Also included investments in other companies
Investment Assets: usually creates a concern in terms
of value of the asset and in the ability to sell the asset
ASARCO ASSETS
Why are investments
easier to move?
3
Selling the Plant
Moving
the
stock
ASARCO
What happened?
In 1995
when copper was $1.35
4
-------
ASARCO
In 1999 Coppersold for
$0.67
1999
ASARCO
Shareholder Response
Response from some investors
Grupo Mexico, a non-US Entity
acquires ASARCO’s stock SELL!!!
Grupo as the parent of ASARCO NOW!!!
Proposes to buy the stock
in ASARCO’s subsidiary
Southern Peru Copper Co. (SPCC) Buy!!!
ASARCO
Why should I care if
they sell to the parent?
High level of existing
Environmental Liabilities!!!
US based assets have minimal value
Investment In subsidiary is recorded at
costs, not fair market value.
Asset was being sold at less than
fair market value to an insider.
f.ds ds Is on o d res A
Federal Pfloflhiee A
SPCC was the buried Treasure
5
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ASARCO
What dèd we do?
US Intervenes
S
2003 Settlement
$1 0Dm in 8 promissory notes
3 year enforcement hiatus
ASARCO
Lessons Learned
- Make sure the Financial Assurance is, and remains, valid
(Quid and dNly - large PRPs have bond ratings)
- If we have outstanding costs -file liens.
-Promptly enforce the terms of the CD, AOC, UAO
including the FA
- Watch out for asset sales, mergers, and reorganizations.
- Communicate! Many PRPs are multi-regional PRPs.
The Monsanto Solution
Episode 3
Monsanto Company
In 1901 incorporated in Missouri as
Monsanto Chemical Works
In 1933 incorporated in Delaware as
the Monsanto Company
Monsanto Company identified itself in SEC Filings
as the successor to
Monsanto Chemical Works.
6
-------
The Monsanto Solution
By 1996 Monsanto listed its businesses as
Agncultural, Pharmaceutical and Chemical
Agncultural 1996 1995 1994
Sales $3b $2.4b $2.2b
Net Income $540m $516m $477m
Pharmaceuticals 1995 1994 1993
Sales $2b $1.7b $1.5b
Net Income $76m $131m $54m
Chemicals 1995 1994 1993
Sales $3b $3.7b $3.65b
Net Income $67m $286m $282m
The Monsanto Solution
Earning Trends
Agricultural
Pharmaceutical
Chemical : .
The Monsanto Solution
Status Quo: One Profit Maker
One up and coming star
One has been
Options
Stay the Course
Shut it down
Sell
-------
The Monsanto Solution
The Solution was???
Solutia
Incorporated in Apnl 1997
in Delaware for the purpose of holding
the Monsanto Chemical Business
Solutia became an Independent Company
in September 1997
The Monsanto Solution
The Pnce of Freedom
Dividend issued to all Monsanto Shareholder
Of I common share of Solutia and
I preferred share purchase nght for Solutia
For every five shares of Monsanto
Solutia acquires the Chemicals Business
Solutia agrees to indemnify Monsanto
For ALL liabilities associated with the
Chemicals Business
The Monsanto Solution
After the Sale
Monsanto took steps to make Its worldwide operations
more focused, productive and cost-effective. The effect of
these actions benefited EBTT (Earnings Before Income Tax)
by more than $400 million in 1998 (SEC Flings)
1999 Absent the Chemicals Business
Monsanto merges with Pharmacia & Upjohn. Inc..
The Survivor to the merger is known as Pharmacia
8
-------
The Monsanto Solution
After the merger
Pharmacla creates a new subsidiary
that Is now known as
Monsanto Company
The Board of Directors of Pharmacia then issue a
dividend to Pharmada shareholders for stock in
Monsanto Company. Monsanto is then
Before the new Monsanto is spun off
it agrees to indemnify Pharmacia
for the iiabiiities of the
Chemicals Business
The Monsanto Solution
Subsequent to the Monsanto spin-off
Pharmacia is acquired by
Pfixer
Pharmacia currently remains as a
subsidiary of Pfizer
The Monsanto Solution
But what happened to Soiutia?
Saies ,JJ,
Earnings
December 13, 2003 Solutia files for
Chapter 11 Bankruptcy Protection
9
-------
The Monsanto Solution
Why is this important?
Basic Liability Theory
A person is liable
A person can minimize its liability
by having another person,
indemnify the liability.
As long as Solutia paid the bills,
EPA was not hurt by the Solutia spinoff
The Monsanto Solution
Without Solutia what happens?
The current Monsanto did not create the liability
but it has agreed to indemnify the liable party.
Like Solutia, the new Monsanto may also
not have the money for the cleanup.
Lethng the new Monsanto step in may like be
switching one bankrupt PRP for another.
Pharmacia is the entity that created the liability.
In order to minimize its liability, Pharmacia obtained
two indemnification agreements.
This minimizes Pharmacia’s liability.
It does not eliminate it
The Monsanto Solution
EPA must not forget the Past!!!
lndemniflcations are useful business tools.
Indemnification can minimize liability
Indemnifications do not eliminate liability
107(e) (1)CERCLA
It is okay to allow an indemnifying party
take over the work
10
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The Monsanto Solution
Remem ber! t ’
Jedi mind tncks frRha iJ
Work only ;
On weak minds!!!
But never lose the true identity of the liable party.
Do not accept the answer that the old company
does not exist without verifying this yourself.
For Help
Read about this issue by going to
PRP Search Manual Section 3.6
Or Contact
Joe Tieger Leo Muflin
202 564-4276 215 814-3172
tieger.joe@epa.gov MulIin.Ieo@eoa.oov
Conclusion
. It is the nature
., of a corporation
toeam profit
Do not expect the corporation to be your friend.
Learn the corporate games.
Beame aware of the tools that we have
to address the actions of a business.
11
-------
NOTES
-------
MultjDex
& *kRcfr,n, x Jw
-------
Title Searches
-------
STEPHEN B. HESS
Mr. Hess is an attorney-advisor in the Finance and Operations Law Office, Office of General
Counsel, U. S. EPA, Washington, DC. He is the Office of General Counsel contact for real estate
issues, including property acquisitions, institutional controls, relocations under the Uniform
Relocation Act and takings issues.
Previously, he was an attorney at the firm of McGuire, Woods, Battle and Boothe in Richmond,
Virginia, where he represented developers, lenders, businesses and local governments in a variety
of real estate and corporate transactions.
He received his J.D. from George Mason University School of Law and his B.B.A. from James
Madison University.
-------
LANCE VLCEK
Mr. Vicek is a senior investigator in Region S’s Enforcement Investigations and Search Section,
Superfiind Division. Mr. Vicek has ten years with the EPA. Prior to joining EPA, Mr. Vicek worked
as a Contract Auditor and Criminal and Civil Investigator. He has worked for the US Department of
Energy, Defense Contract Audit Agency, Immigration and Naturalization Service, and the US
Consumer Product Safety Commission. Mr. Vicek also has some 30 years with the U.S. Army
(Active and Reserve Duty) as a Criminal Investigator and Intelligence Officer. He has worked on
numerous groundwater sites in Region V.
-------
-
House in Middle of Road
— I
Title Search
By:
Lance Vicek, Invesfigator
Region 5
I
-------
Topic Overview
What is a Title Search
Why do we do a title search
Who conducts the title search
I
Topics Overview
What Is a title examiner
Title abstraction
.Title searcher
How to start your title search
II r 1i _ : i 7 _____
Introduction
Purpose of the title search
• identify, present and past site owners
•Construct a chain of title
• AND
2
-------
I - - .
I ___________ ? i
INTRODUCTiON
• Develop PRP Leads
• Develop a Potential Site History
• Can lead way to why other Contaminants
where found on the site
I ______
Introduction
PurDose of the title searyh
Identify present and past operators
Identify abutters
i.Indlcate knowledgeable persons
- - -
1._ __.
The Title Search
A title search is a process whereby someone
“searches the public records of the county in nhlch
records of real property are located.
The searcher ilIl look through the GRANTOR (seller
of the property) and GRANTEE (buyer of the
property) indexes and examine each docunient
recorded concerning that particular parcel of land.
Eu
3
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Why Do We Do A Title Search
A full title search Involves mapping a chain of title by
examining all of the recorded deeds concerning the
property. are used to transfer property from
owner to owner. A Chain of flue is established by
determining that the present owner received valid title
from the prior owner, and that prior owner received
valid title from that prior owner, etc. The passing from
one owner directly to the next Is called a link, and each
link forms the Chain of 7 1 1k.
J r’
Who Conducts A Title Search
Attorileys
Parak sts
Reai ExIat e lisle Abstrastor, __________
This Esamluers
Thu Searcber ,
I r : -
L _ _‘ —
What Is A Title Abstractor
Abstractors summarize pertinent legal or
Insurance details, sections of statutes or case law
from reference books for examination, proof of
ready reference. They also search Out titles to
determine if the title deed is correct.
4
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What Is A Title Examiner
Tltle examiners search public records and examine
titles to determine a property title’s legal condition.
They usually copy or ummnrlze recorded documents
affecting title to property, such as mortgages, trust
deeds and Contract. They may also prepare and issue
policies that guarantee title’s legality.
- - .. L. ‘
I ______1
What Is A Title Searcher
Searchers investigate real estate records, examine lilies
or summarize pertinent legal or insurance details for a
variety of purposes. They may also compile lists of
mortgages, contracts and other title related documents
by searching public and private records on behalf of
law firms, real estate agencies, or title Insurance
companies.
Ii n
Startin2 Your Title Search
I1 you decide to have a contractor so do the search
you should consider getting assistance in locating a
firm affiliated iith a national or state affiliated
“Land Title Association.”
5
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I _____________ -
Starting Your Title Search
To locate a national list of organizations log onto
htto:IIwww. sita.ore
Currently 33 sates have land title associations
which can provide assIstance in locating a firm
and special Issues unique to that state.
- r - - -- - -
i : _ -
Scoping A Title Search
.Now ubat you found a (Inn to do your tItle teareb
you need to scope It. Here ire a few ezamples:
O,tnenhIna.d Eee.mtwincrn RouseS
A report ldeuttfytog the cUrrent owner of the
subjeet property. The report lndud vesting
deed. lie., mort e and judgment Information.
as well as amenned value. tax file number and tax
paymeut ata*us.
L
Deed Search
A report that identifies the present and previous
owner(s), It provIdes recording Information, ______________
legal description of the property and a copy of
the actual vesting deed.
6
-------
) __ &
Mortgage And Assignment Search
A report that identifies any outstanding mortgages,
deed of trust secured by the subject property. This
report pro ides all assignment Information related
to any open mortgages.
— -- -.- -- —-- ---—— -.
Tax Search
A report identifying the subject properly by a tax
identification number. The report usually includes
the assessed value of the subject properly,
exemptions (homestead andlor widow or any other
exemptions) and tax payment status.
________ i_ , ,.
Length And Breadth Of The Search
Time frames: from when_to when_
7
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Warranty
Deeds
Foreclosures
PartitIon
Proceedlups
Secudt Deed
P1st Maps
Prapert Tia
Records
Trusts
Aerial
PboIo rsph,
Quick auim
Deed
Bankruptcies
CondemnatIon,
Sanboro
Mapo
Mosigagen
Judgments
StcurIty
Agreements
Notices or
Pending Action
Decedent,
Mineral
Leusts
CertIficatIons
Deeds
Easements
Uem
Real Estatt
Contracts
Deeds or Trust
• r -
S - ____
-------
:
Land Survey
at
¶ Ai
What Is A Land Survey
A Laud Survey lo conducted to locate and mark
property corners and to determine tbe location of
monuments whlcb mark a property fine, boundary
or corner of a parcel of land.
When Is A Surveyor Needed
When a line or corner location Is In dispute
Before conveying a lot from a longer tract and the
lot has not been surveyed
Determine site boundaries
Determine operable units within a site
9
-------
How Much Will My Survey Cost
Factors to Consider :
- Purpose .1 the Survey
Esisteace of Feoces
Terral. & Ve et.tIo.s
S.a005
How Much Will My Survey Cost
Factors to Consider
Deed Research
Number of Acres
Uab4U
[ 1
What Can The Survey Do For Me
Examine deeds and idjolners
Search for evidence on the ground
See If there are any problems
10
-------
I - . --
u
What Can The Survey Do For Me
. Find and mark corner properly
— Make contour maps and show the elevations
II
1 -—- --- ‘. -,
I _________
What Can The Survey Do For Me
, Locate: oil/gas sells, buildings, aNd fences
— Determine right-of-way, encroachments, other
possession evidence _____________
• Appear (Surveyor) In hearings as an espert witness
•1 t- ’ —-- ----
____________— L
What Does The Surveyor Need From Me
• The purpose of the survey
— Copies of any deeds on the books
— Copies of any pints
— Information on property corners and lines
11
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I I
What Does The Surveyor Need From Me
- Brief history of ownership
- Name anti address of adjolners
• Information on property disputes
- ; -,
________I _
What Does The Surveyor Need From Me
• The purpose of the surve
- Copies of any deeds on the books
— Copies of any plats
- Information on property corners and lines
- -
i
What Should I Receive From The Surveyors
— Work done In accordance lth stale laws
• Plat(s) shun lug all necessary information for
recording
— A survey description that can be used in a deed
- Certified survey map
12
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--
_______ -
How Can I ObtaiN The Service Of A
Licensed Land Surveyor
Ask the registry/recorder of deeds
:. American Society of Ci ii Engineers
National Society of Profes3ionai Surveyors
[ ‘. - - -- - - -q
I I _________
Property Evaluations And Assessments
The Nature of Appraisal, the act of estimating
the values of property
I ______t ._L _— - -
Property Evaluations and Assessments
Key Aonralsai l)eflnitions and C.nceots .
Appraisal Iheor depends on certain key principle and
definitions
13
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I - -- - - - -
L._______
Property Evaluations and Assessments
KevConcent s :
Market Value
. Market Price
Highest and Best Use
Use Value
I -
— £
_______ - -
Property Evaluations and Assessments
Mirirt Vikie :
Market Value I, not the same us p 1*. but, if the market Is
reasonably competitive, prtcea and be strong e ideace of
Market Value
‘ The purpose or most upprtiaais is to determine
Market Vetoes ____________
I - - - -. - --• --.- -,
I
Property Evaluations and Assessments
Market Price :
Market Price Is determined by the Intersection
of supply and demand curves
14
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I -
Property Evaluations and Assessments
Hiehett and $efl Use ;
Demand For property depends on potential utility
rather than utility in current use. In a eii Functioning
market, buyers and sellers are a tare or the various uses
to which a property could be put, and the market value
Is based on its most profitable legal usc.
r .
Property Evaluations and Assessments
Use Value :
Use Value is the value of a property for a specific use
. Sales Comparison Approach
- The Coot Approach
• The Income Approach
Property Evaluations and Assessments
Who Ccnduct 11w A nrakaUEvalwitlon ?
A slate certified Appralser!Auessor
To find one for sour state 00tlct:
The Isleroilioul Aoscrlatloa of
Assessin 5 Officers. 130 Faoi Randolph
S.,cei. Chicago. IllinoIs 60601
15
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I r r’ iL” —
I-. • ‘- .—_ : ,r•, .;. —.
Property Evaluations and Assessments
Who Condocto the AauithaUL aluatlcn ?
A elate cardfled Approlur!Azscmor
The lntenmtlo ,at Appraiser, Guild
2655 Weit 39 A eiue
Dcnvcr.Co. 80211
. America. Socictyor Appraisers
555 llemdon Parlcway Suite 125
Ilerudon, VA 20170
[ r
Properly Evaluations and Assessments
Sin Ie Pronerty Anoraisal :
Single properly appraisal Is the valuation of a
particular property as of a given date
__1__ _
Property Evaluations and Assessments
Mass Aunraltal
Mass appraisal is the valuation of many properties as of
a given date
16
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TABLE I
RECENT DOCUMENTS RELATED TO TARGET PROPERTY
C.J. RECYCLING SITE
DES PLAINES, ILLINOIS
DOCUMENT TYPE
PARTIES
DATE
RECORDE
D
DOCUME
NT
NUMBER
REFERENC
ENUMBER
Claim for Lien
Claimant: Advance Thermal Corp.
Owner: Rockland Mineral Processing Inc.
04/20/92
92254051
1
Notice of Foreclosure
Plaintiff: Midwest Bank and Trust Company
Defendants: Rockland Mineral Processing, Inc.
CJR Processing, Inc., and others.
10/19/90
90512452
2
Notice of Lease and Option
Lessor: Rockland Mineral Processing. Inc.
CJR Processing, Inc.
02/08/90
90066429
3
Trustee’s Deed
Grantor: Midwest Bank and Trust Company
Grantee: Rockland Mineral Processig, Inc.
10/02/87
87537160
4
Title Search Report
C. J. Recycling Site
April 5, 2006
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Table 4
Deed Records Summary
Draft Title Search Report
Dayton Industrial Site
Instrument
Type
Grantor
Grantee
Execution
Date
Transferred
Date
Recording
Date
Book/Page
Parcel
No.
Comments
Deed
Oswald Cammann, Jr.
Paul D. Lammers
and John F.
O’Brien
10/29/1961
11/13/1961
11/13/1961
Book 2063
page 637
79416
Part of a resurveyed
28.051 acre tract
Warranty
Deed
Paul D. Lammers and
John F. O’Brien
Frank Hill Smith,
Inc., a New York
Corporation
11/19/1 962
12/1 2/1 962
2/12/1 962
Book 2119
page 606
79416
A 0.194-acre portion
Warranty
Deed
Frank Hill Smith, Inc.
Paul D. Lammers
and John F.
O’Brien
11/30/1962
12/04/1 962
12104/1 962
Book 2119
page 609
79416
Frank Hill Smith,
President and F.M.
Leiter, Secretary
Warranty
Deed
Paul D. Lammers and
John F. O’Brien
Lammers Barrel
Corp.
05/28/1963
06/03/1963
06/03/1963
Book 2143
page 727
79416
Entire 5.235-acre
parcel
Warranty
Deed
Lammers Barrel Corp.
Paul D. Lammers
and Virginia R.
Lammers
01/103/1966
01/28/1966
01/28/1966
Book 2294
page 365
79416
Paul D. Lammers,
President, and Hugh
E. Wall, Jr., Secretary
May 4, 2006
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Title
Search
FIGURE 12
CHAIN-OF-TITLE
PARCEL 16C-007A, 16C-007B
EVERGREEN MANOR, ROSCOE, ILLINOIS
T
George A. & Helen R. Palmer
Warranty Deed, 06/08/78
Doc. 78150984, Ref. 47
‘A interest
Northbrook Evanagelical Covenant Church
Warranty Deeds, 12/21/77
Doc. 77350273-274, Refs. 48-49
Y2 interest
Rodney K. Jolson
Warranty Deed, 12/21/77
Doc. 77350272, Ref. 50
1/4 interest
A
C.S. Pierce lndu ries, Inc.
Warranty Deed, 11/25/74
Doc. 74220773, Ref. 69
It.
Evanston Trust & Savings Bank, Trust No. 714
Report
Evergreen Manor - volume I
Dayle D. & Mary A. Seymour
Corp. Warranty Deed, 09/12/85
Doc. 85221529, Ref. 42
I 6C-007A
+
Troy W. Greenberg
Warranty Deed, 12/30/92
Doc. 92820574, Ref. 41
Loves Park Savings & Loan Association
Sheriff’s Deed, 04/28/83
Doc. 83082046, Ref. 43
1 6C-007A
Dayle D. & Mary A. Seymour
Trustee’s Deed, 01/22/82
Doc. U201 1974, Ref.44
1 6C-007B
I
T
First National Bank & Trust Co., Trust No. 43-4569
Quit Claim Deed, 12/07/78
Doc. 78341037, Ref. 45
I 6C-007A & 1 6C-007B
. 1.
Milburn H. Johnson
Warranty Deed, 06/25/78
Doc. 78170324, Ref. 46
/2 interest
Grant D. rickson
Warranty Deed, 12/21/77
Dcc. 77350271, Ref. 51
14 interest
January 8, 1999
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CERCLA Enforcement Support Services. Region 5
Contract No. 68-W4-0015
CHAIN-OF-TITLE
OAK STREET SITE
Vernell, Gregory, & Ronald Korowin I
South 236 feet
Lots 429/430
Retained ownership
Lots 429/430
1/29/79
Draft Title Search Report
North 136 feet
Lot 429/430
Vernell, Gregory & Ronald Korowin
1/3/83
Vernell Korowin
6/29/82
1/29/79
Multi-Site PRP Searches
Work Assignment No. C05008
Oak Street Site, Wyandotte, Michigan
Alan Spigiel
4! 28/94
Alan & Theresa Spigiel
L
r
1/29/79
South 110 feet
Lot 430
Michael & Jacob J Korowin
North 262 feet
Lot 430
7/6171
Sophie Sokoloff
Michael & Jacob J Korowin
Michael &
Virginia Korowin
? /??/
Lot 429
South 110 feet
Lot 429
Jacob & Eva Korowin
1/24/56
]
]
Clyde & Violet Ludwig
??/??I??
Auditor General
??/??/??
State of Michigan
8/17/44
Jacob J. & VemeIl Korowin
Michael &
Virginia Sophie Sokoloff
Korowin
Jacob &
Vernell Korowin
8/5/60
430
1943 Survey
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Conduct Title Searches
The Contractor shall conduct title searches and analyze title and other related documents.
The Contractor shall identify and obtain copies of relevant title documents from federal, state,
township, county, and city offices, or other recognized sources. Title searches shall identify the
current and past owners of properties identified as hazardous waste sites or properties located
near and or adjacent to hazardous waste sites which fall within the jurisdiction of the EPA. Title
searches must cover the entire time period in which hazardous substances were disposed of at the
site from the initiation of commercial activity, if known, to the present. This time frame may be
modified and established by the EPA TOM at the initiation of the work order. After receiving
from EPA a description of the property(s) for which a title search is requested, as well as the
time frame the search will cover, the contractor shall:
(a) Review and obtain all relevant title documents pertinent to the hazardous waste
site. Relevant documents include transfer, sale, lease(s), liens (satisfied or
unsatisfied), deeds, mortgages (satisfied and unsatisfied) , right-of-way easements,
property tax records, filed affidavits, decedents, foreclosures, bankruptcies,
judgements, trusts, transfers, special assessments, mineral leases, certificates of
sale, deed restrictions, restrictive covenants, real estate contracts, partition
proceedings, condemnations , and any other documents which establish an
ownership interest in the property or show any changes in the property
boundaries. If requested by the EPA TOM the contractor shall locate and obtain
tax records for inclusion and summarization in the title search report. The
contractor shall locate hazardous waste sites on county parcel maps, aerials or plat
maps as well as reviewing land and mortgage surveys to determine whether a
parcel is part of a site. Negative reporting is also required. The contractor shall
develop a check list for inclusion in each title search report which shall list all
public offices visited, the record searched for and the results of the search.
(b) Analyze the documents located for information which will aid the EPA in
identifying and issuing notice to present and former owners and operators, as
defined in CERCLA Section 107(a);
(c) Provide copies of relevant title documents, either certified true copies or regular
photocopies, as requested by the EPA TOM;
(d) Analyze title records and develop a chain of title, as directed by the EPA TOM;
(e) Develop a graphic, for use in presenting the chain of title;
(f) Provide preliminary title reports establishing current ownership within the period
specified by the EPA TOM;
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(g) If requested by the EPA TOM, locate and obtain copies of aenal photographs
pertaining to the site and prepare site parcel overlays and other infonnation as
designated by the EPA TOM on the aerial photography(s).
(h) If requested by the EPA TOM, locate and obtain copies of Sanbom Insurance
maps pertaining to the site.
(i) Conduct lessee/operator searches and obtain all relevant documents. Negative
reporting is also required.
(j) If requested by the EPA TOM, develop updated plat maps or other graphic
representation(s) of the site which will include the true north symbol and the land
(parcel(s) in question measured out in either metes or bounds; in feet; or by GIS
or GPS measurements.
(k) If requested by the EPA TOM the contractor shall plot hazardous waste sites
on County parcel maps, as well review various surveys (and other maps as
available) to determine whether a parcel is part of a site.
(1) If requested by th EPA Tom the contractor shall obtain the latest aerial
photograph of the site and overlay it with the most recent plat map, or other
information as directed by the EPA TOM.
(m) If requested by the EPA TOM the contractor shall conduct a Secretary of State
Search for all companies identified on Deeds or other documents obtained. This
search will be conducted using free and fee based research services. A copy of
the Secretary of State Record shall be incorporated into the final title search report
and a Summary of the Secretary of State report shall be made and a reference will
be made as to which document generated the Secretary of State search.
(n) If requested by the EPA TOM the contractor shall SECURE a Dun and Bradstreet
Financial or other Designated report (example “Moody’s) for each firm located in
the Title search. This report shall be included with the title search report, be
summarized and Identified with the document(s) that generated it.
(o) If requested by the EPA TOM the contractor shall conduct a search of city,
county, and township records for building permits, blueprints, construction
permits, demolition permits, reports of inspections (health &, safety) for all
structures located on the site area identified and time frames set by the EPA TOM.
(p) If requested by the EPA TOM the Contractor shall conduct a Land Survey on
property(s) identified by the TOM. The survey at a minimum shall have new plat
maps developed showing the properties surveyed, its boundaries, and their
relationship to surrounding tracts of land.
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(q) If requested by the EPA TOM the contractor shall consolidate previously
completed title search reports; merge previously conducted title search reports;
compile additional information to complete or enhance previously completed title
search reports and marge/consolidate previously conducted title search reports
with newly conducted title search reports. The contractor shall alsG identi1 ’ any
inconsistencies, gaps of information, or other issues found in conducting the title
search.
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GENERAL REAL ESTATE TERMS
Preface
Hopefully you will find this Vocabulary helpful for utiderstanding words and terms used in Real Estate
Transactions. There are, however, some factors that may affect these definitions. Terms are defined
as they are commonly understood in the mortgage and real estate industry. These terms may have
different meanings in other contexts. The definitions are intentionally general and non-technical.
They do not encompass all possible meanings and nuances that a term may acquire in legal use.
State laws, as well as custom and use in various States or Regions of the Country, may modify or
completely change the meanings of certain terms defined.
A
Agreement of Sale
Known by various names, such as contract of purchase agreement, or sales agreement according to
location and jurisdiction. A contract in which the seller agrees to sell and a buyer agrees to buy, under
specific terms and conditions spelled out in writing and signed by both parties.
Appraisal
Appraisal, the act of estimating the value of property. Modem appraisal theory views market value
(probable sales price) as determined by the interaction of the forces of supply and demand. Prices
determined in actual market transactions can provide sound evidence of the market value of similar
property.
Assumption of Mortgage
An “Assumption of Mortgage” is often confused with “purchasing subject to a mortgage.” When one
purchases subject to a mortgage, the purchaser agrees to make the monthly mortgage payments on an
existing mortgage, but the original mortgagorremains personally liable if the purchaser fails to make
the monthly payments. Since the original mortgagor remains liable in the event of default, the
mortgagee consent is not required to a sale subject to a mortgage.
Both “Assumption of Mortgage” and “Purchasing Subject to a Mortgage” are used to finance the sale
of property. They may also be used when a mortgagor is in financial difficulty and desires to sell the
property to avoid foreclosure.
B
Binder or “Offer to Purchase ”
A preliminary agreement, secured by the payment of earnest money, between a buyer and seller as an
offer to purchase real estate. A binder secures the right to purchase real estate upon agreed terms for a
Page 1 of 7
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limited period of time. If the buyer changes his mind or is unable to purchase, the earnest money is
forfeited unless the binder expressly provides that it is to be refunded. (See real estate broker)
Broker
A person that ‘epresents another for a fee in real estate transactions. Real Estate brokers help
consumers locate suitable real estate and are paid a fee for their services.
Building Line or Setback
Distances from the ends and! or sides of the lot beyond which construction may not extend. The
building line may be established by a filed plat of subdivision, by restrictive covenants in deeds or
leases, by building codes, or by zoning ordinances.
C
Certificate of Title
A certificate issued by a title company or a written opinion rendered by an attorney that the seller has
good marketable and insurable title to the property which he is offering for sale. A certificate of title
offers no protection against any hidden defects in the title which an examination of the records could
not reveal. The issuer of a certificate of title is liable only for damages due to negligence. The
protection offered a homeowner under a certificate of title is not as great as that offered in a title
insurance policy.
Closing Costs
The numerous expenses which buyers and sellers normally incur o complete a transaction in the
transfer of ownership of real estate. These costs are in addition to price of the property and are items
prepaid at the closing day.
Closing Day
The day on which the formalities of a real estate sale are concluded. The certificate of title, abstract,
and deed are generally prepared for the closing by an attorney and this cost charged to the buyer. The
buyer signs the mortgage, and closing costs are paid. The final closing merely confirms the original
agreement reached in the agreement of sale.
Cloud on Title
An outstanding claim or encumbrance which adversely affects the marketability of title.
Commercial Property
Property intended for use by all types of retail and wholesale stores, office buildings, hotels and
service establishments.
Commission
Money paid to a real estate agent or broker by the seller as compensation for finding a buyer and
completing the sale. Usually it is a percentage of the sale price. Six to seven percent on houses, 10
percent on land.
Page 2 of 7
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Condemnation
The taking of private property for public use by a government unit, against the will of the owner, but
with payment of just compensation under the government’s power of eminent domain. Condemnation
may also be a determination by a governmental agency that a particular building is unsafe or unfit for
use.
Condominium
A structure of two or more units, the interior space of which are individually owned.
Contract of Purchase
An agreement between parties for the sale of real estate. in some states it is synonymous with
Purchase Agreement. (See agreement of sale)
Contractor
In the construction industry, a contractor is one who contracts to erect buildings or portions of them.
There are also contractors for each phase of construction: heating, electrical, plumbing, air
conditioning, road building, bridge and dam erection, and others.
Construction
in the construction industry, a contractor is one who contracts to erect buildings or portions of them.
There are also contractors for each phase of construction: heating, electrical, plumbing, air
conditioning, road building, bridge and dam erection, and others.
Conventional Mort2age
A mortgage loan not insured by HUD or guaranteed by the Veterans’ Administration. It is subject to
conditions established by the lending institution and State statutes. The mortgage rates may vary with
different institutions and between States. (States have various interest limits.)
D
Deed
A formal written instrument by which title to real property is transferred from one owner to another.
The deed should contain an accurate description of the property being conveyed, should be signed and
witnessed according to the laws of the State where the property is located, and should be delivered to
the purchaser at closing day. There are two parties to a deed: the grantor and the grantee. (See also
deed of trust, general warranty deed, quitclaim deed, and special warranty deed.)
Deed of Trust
Like a mortgage, a security instrument whereby real property is given as security for a debt. However,
in a deed of trust there are three parties to the instrument: the borrower, the trustee, and the lender, (or
beneficiary). In such a transaction, the borrower transfers the legal title for the property to the trustee
who holds the property in trust as security for the payment of the debt to the lender or beneficiary. If
the borrower pays the debt as agreed, the deed of trust becomes void. If, however, he defaults in the
payment of the debt, the trustee may sell the property at a public sale, under the terms of the deed of
trust. In most jurisdictions where the deed of trust is in force, the borrower is subject to having his
Page 3 of 7
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property sold without benefit of legal proceedings. A few States have begun in recent years to treat the
deed of trust like a mortgage.
Deed of Trust Rider
The document required by the lender to be recorded along with the security instrument for an ARM.
Defective Title
Title to real property which lacks some of the elements necessary to transfer good title. Title to a
negotiable instrument obtained by fraud.
Default
Failure to make mortgage payments as agreed to in a commitment based on the terms and at the
designated time set forth in the mortgage or deed of trust. It is the mortgagor’s responsibility to
remember the due date and send the payment prior to the due date, not after. Generally, thirty days
after the due date if payment is not received, the mortgage is in default. In the event of default, the
mortgage may give the lender the right to accelerate payments, take possession and receive rents, and
start foreclosure. Defaults may also come about by the failure to observe other conditions in the
mortgage or deed of trust.
E
Easement Rights
A right-of-way granted to a person or company authorizing access to or over the owner’s land. An
electric company obtaining a right-of-way across private property is a common example.
Encroachment
An obstruction, building, or part of a building that intrudes beyond a legal boundary onto neighboring
private or public land, or a building extending beyond the building line.
Encumbrance
A legal right or interest in land that affects a good or clear title, and diminishes the land’s value. It can
take numerous forms such as zoning ordinances, easement rights, claims, mortgages, liens, charges, a
pending legal action, unpaid taxes, or restrictive covenants. An encumbrance does not legally prevent
transfer of the property to another. A title search is all that is usually done to reveal the existence of
such encumbrances, and it is up to the buyer to determine whether he wants to purchase with the
encumbrance, or what can be done to remove it.
F
Foreclosure
A legal term applied to any of the various methods of enforcing payment of the debt secured by a
mortgage, or deed of trust, by taking and selling the mortgaged property, and depriving the mortgagor
of possession.
Page 4 of 7
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G
General Lien
A lien such as a tax lien or judgment lien, which attaches to all property of the debtor rather the lien of,
for example, a trust deed, which attaches only to a specific property.
General Warranty Deed
A deed which conveys not only all the grantor’s interests in and title to the property to the grantee, but
also warrants that if the title is defective or has a “cloud” on it (such as mortgage claims, tax liens, title
claims, judgments, or mechanic’s liens against it) the grantee may hold the grantor liable.
Grantee
That party in the deed who is the buyer or recipient.
Grantor
That party in the deed who is the seller or giver.
L
Land
in a legal sense, the solid part of the surface of the earth, as distinguished from water; any ground, soil
or earth whatsoever regarded a the subject of ownership and everything annexed to it, whether by
nature, e.g., trees and everything in or on it, such as minerals and running water, or annexed to it by
man; e.g., buildings, fences, etc. In an economic sense, land consists of all those elements in the
wealth of a nation which is supposed to be furnished by nature as distinguished from those
improvements which owe their value to the labor and organizing power of man.
Lien
A claim by one person on the property of another as security for money owed. Such claims may
include obligations not met or satisfied, judgments, unpaid taxes, materials, or labor. (See also special
lien.)
M
Marketable Title
A title that is free and clear of objectionable liens, clouds, or other title defects. A title which enables
an owner to sell his property freely to others and which others will accept without objection.
Mortgage
A lien or claim against real property given by the buyer to the lender as security for money borrowed.
Mortgage Note
A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof of an
indebtedness, and states the manner in which it shall be paid. The note states the actual amount of the
debt that the mortgage secures and renders the mortgagor personally responsible for repayment.
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Mortgage ( Open-End )
A mortgage with a provision that permits borrowing additional money in the future without
refinancing the loan or paying additional financing charges. Open- end provisions often limit such
borrowing to no more than would raise the balance to the original ioan figure.
Mortgagee
The lender in a mortgage agreement.
Mortgage
The borrower in a mortgage agreement.
P
Plat
A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines,
buildings, improvements on the land, and easements.
Purchase Agreement
See agreement of sale.
Q
Ouitclaim
A deed which transfers whatever interest the maker of the deed may have in the particular parcel of
land. A quitclaim deed is often given to clear the title when the grantor’s interest in a property is
questionable. By accepting such a deed the buyer assumes all the risks. Such a deed makes no
warranties as to the title, but simply transfers to the buyer whatever interest the grantor has. (See
deed.)
S
Survey
A map or plat made by a licensed surveyor showing the results of measuring the land with its
elevations, improvements, boundaries, and its relationship to surrounding tracts of land. A survey is
often required by the lender to assure him that a building is actually sited on the land according to its
legal description.
T
Tax
As applied to real estate, an enforced charge imposed on persons, property or income, to be used to
support the State. The governing body in turn utilizes the funds in the best interest of the general
public.
Page 6 of 7
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Title
As generally used, the rights of ownership and possession of particular property. In real estate usage,
title may refer to the instruments or documents by which a right of ownership is established (title
documents), or it may refer to the ownership interest one has in the real estate.
Title Insurance
A title opinion is a legal examination of the abstract. The opinion outlines the necessary requirements
in order to obtain a clear title. Further, it cautions the buyer/refinancer of all current restrictions to the
property.
Title Search or Examination
A check of the title records, generally at the local courthouse, to make sure the buyer is purchasing a
house from the legal owner and there are no liens, overdue special assessments, or other claims or
outstanding restrictive covenants filed in the record, which would adversely affect the marketability or
value of title.
The title search may include: examination of county records for the property’s title history by a title
company, an abstractor, attorney or escrow officer to determine the “Chain of Title” and the current
status of title, including owner, legal description, easements, property taxes due, encumbrances
(mortgages or deeds of trust), long term leases.
Trust
A party who is given legal responsibility to hold property in the best interest of or “for the benefit of’
another. The trustee is one placed in a position of responsibility for another, a responsibility
enforceable in a court of law. (See deed of trust.)
z
Zoning Ordinances
The acts of an authorized local government establishing building codes, and setting forth regulations
for property land usage.
Page 7 of 7
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NOTES
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Mu ltiDex
Ou’c Inde, Sy,,en,
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Superfund Liens
& Windfall Liens
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KATHLEEN ( KAD WEST
Kat West is an Associate Regional Counsel in the CERCLA/Air Section at the United States
Environmental Protection Agency, Region 4 in Atlanta, GA. She practices environmental law
with an emphasis on Superflind, the Clean Air Act, and the Clean Water Act wetlands
enforcement. Ms. West is the Region 4 expert on Prospective Purchaser Agreements (PPM) and
the Brownfields Amendments sections relating to Bona Fide Prospective Purchasers (BFPPs) and
Windfall Liens. She has worked extensively on developing enforcement policy in these areas and
serves as a member of several EPA national workgroups writing guidance on the Brownfields
Amendments.
Ms. West has been a speaker at numerous conferences on the topic of PPM and the Brownfields
Amendments. She is the recipient of the 2002 Region 4 Superfiind Attorney of the Year award
for her enforcement case success and her policy work on the BrownfIelds Amendments.
She earned her J.D. and Certificate in Environmental and Natural Resources Law in 1997 from
Lewis and Clark Law School in Portland, OR, and her B.A. from the University of Florida. Ms.
West is admitted to the Florida Bar.
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WILLIAM KEENER
William Keener is Assistant Regional Counsel for the U.S. Environmental Protection Agency’s Region 9
office in San Francisco.
For the past 19 years, Mr. Keener has provided legal counsel to the EPA for federal environmental
laws, particularly Superfiind, the Resource Conservation & Recovery Act and the Oil Pollution Act.
He has handled a wide variety of environmental enforcement cases, ranging from the emergency
removal of hazardous materials to multi-party settlements at complex area-wide groundwater sites His
areas of expertise include brownfields and the liability of purchasers of contaminated real property.
Mr. Keener graduated with distinction from the University of California at Berkeley, and received his
J.D. from Hastings College of the Law.
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The Hitchhiker’s Guide
Why File a Lien?
• Liensserveasnoticethattheprcpertyispartof
a Superfund site
• Liens give EPAaheadsup when thepropertyis
being sold
• Liens give EPA valuable leverage with the PRP
owner
• Liens serve an important cost recovery tool
• Liens can prevent unfair profit from accruing to
a PRP or a bona fide prospective purchaser
I
-------
I want to
buy your
Superfund
2
-------
Superfund Liens — 107(1)
• Authorized in 1980 by Superfiind statute
• Lien for all costs for which a person is
liable shall be upon (1) property the liable
person owns and (2) is subject to the
removal or remedial action
• Durstion - SOL for cost recovery actions
apply to (I) lien (removal 3 years, remedial
6 years)
Superfund Lien Guidance
Supplemental Guidance on Superfund Liens-- July 29, 199]
Supplemental to guidance onginally issued in 1987
http://www.epa.gov/compliancelresourceslpolicies/c leanup/
superfund/guide-Iiens-rpipdf
Guidance on Federal Superfund Liens— Sept 22, 1987
The usc of federal liens to enhanas Superfiind cast recovery
under CERCLA section 107( 1)
httpi/www.epagov/compliancelresources4o licies/c leanup/
superfünd/fed-sflien-mem.pdf
Windfall Liens — 107(r)
• If a BFPP, then not liable under CERCLA 107,
however EPA has authority to perfect a lien
• Windf ll Lien — CERCLA 107(r)
• For increase in FMV attributable to response
action
• Up to amount of EPA’s unrecovered costs
3
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Windfall Liens
• 107 (l)(3)’s notice I validity requirements apply
• No SOL — EPA to wait until BFPP sells or
disposes of the property
Windfall Liens
Windfisll lien settlements (resolutions) are now
being negotiated:
• Haifa dozen have been finalized
(in Regions 4,7, 8,9)
• Some in exchange for S. others for cleanup
work
Windfall Liens
Windfhll liens are being filed, but sparingly:
• Liens have been filed in Regions 2 & 8
• EPA can issue comfort letters stating whether
EPA does or does not intend to file a windf ll
lien
• BFPP’s non-liability means that filing 107(i) liens
is more Important than ever!
4
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Windfall Lien Gwdance
• Windfhll Lien Guidance issued July 16, 2003 by
EPA and DOJ
• includes model Lien Resolution document
• includes model comfort/discomfort letter
• Available on OECA webpage:
httpi/www.epa.gov/comp lianceiresouroes/policies/
deanun/sunerftindlintenm-windfall-Iienndf
Windfall Lien Guidance
‘This “Enforcement Discretion Policy” covers:
• Factors for & against perfecting a lien
• Agency’s approach to lien valuation
• It does not cover:
• Windfiill Lien filmg procedures / hearings
• Timing of when EPA can enforce the lien
Windfall Lien Guidance
flo Perfect, or Not to Perfect
6 Situations Where EPA Generally Won’t :
I. Post-Cleanup Acquisitions
2. Previous Full Resolution of Potential Windfhll
3. Specific T es of EPA Expenditures (PA/SI)
4. Specific Property Uses (homes, parks)
5. Full Cost Recovery from PRPs
6 Applicability of Enforcement Discretion Polici
5
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Calculating the Windfall
• Amount the lesser of unrecovered
response costs or increase in FMV
attributable to response action
• Default calculation : FMV of property after
cleanup minus purchase price
In order to perform calculation you need to
know: (I) what BFPP paid for or will pay
for property, and (2) appraisal of property
“as if clean”
Example
(1) BFPP purchase Site for $500k(as is)
(2) Appraisal “as clean” is Si million
(3) EPA spends $2,000,000 cleaning Site which
increases FMVof Site to $1,000,000
Default Calculation : FMV of property after
cleanup (as clean) minus purchase price
$1,000,000 - $500,000 = $500,000 windfall amt
Negotiate based on factors in 1/10/01 PPA
guidance — compromise for approp. incentive
- . :
*
6
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Mechanics of Filing for both Liens
• Proper Notice & Opportunity to Be Heard
I) Evaluate perfection value to EPA
2) Create & maintain a Record of Decision to File
(lien file)
3) provide PRP written notice of intent to file &
offer opportunity for lien hearing, or in
exceptional circumstances, perfect lien and then
provide PRP with post-perfection written notice
of filing & offer opportunity for lien hearing
4) Perfect lien in proper venue
Lien Hearings
• Neutral EPA official
• Scope of heanng
— reasonable basis that statutory elements satisfied
• (Notice of Intent & Opportunity to be Heard)
• Property owned by PRP or BFPPS
• Property is or was subject to cleanup action
• US has incurred outstanding costs
• For windfall liens -- increase in FMV
attributable to EPA cleanup
Foreclosing on Liens
• Superflind liens 107(l) — US must first file
an action in rem on the property and then
can foreclose according to state law
• Windfhll lien 107(r) — Unclear, US can
probably foreclose according to state law
7
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Practitioner Tips
I WANT TO
BELIEVE
Superfund liens 107(1)
• file ASAP on every Superfund site where appropriate
Windfall liens 107(r)
• offer certainty and a chance to clear title — BFPP can
pay in certain before purchase (using default
calcolation in guidance)
• compromise lien amount in settlement as an incentive
to satisfy lien up front
• otherwise, file lien
Question & Answer Discussion
8
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Extra Credit:
A BFPP’s Literary Perspective
The Windlati Lien
Ithink Ml I have never soon
A tiling US lovely nsa lien
A lien that cannot lake my gold
As long as I retain my hold
On pioperty whIch sits atop
A dhly plume that slit not stop
And S decrees and AOCs
(moo payoffs by lb PRPs.
Let EPA recoup tIe costs
The rest Is gravy. and my sauce
9
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Fifth National Conference on PRP Search Enhancement
St. Louis, MO
May 2006
EPA Lien Authorities under Superfund: Tools for Enforcement and Reuse
Kat West, Associate Regional Counsel
EPA Region 4
EPA has two lien authorities under the Superfund statute, the CERCLA 107(1) Superfund
lien and the CERCLA 107(r) windfall lien. Used appropriately, these liens are important tools.
If a proper balance is struck, they can accomplish both enforcement and encourage revitalization
of a Superfund site (removal and remedial sites).
Purpose : The purpose of any lien is to secure property as collateral for a debt. EPA’s liens,
once properly perfected or filed in the county records, place a claim on the available equity in the
real property affected by a removal or remedial action.
Priority : Under state law all liens are subject to a priority scheme’. This means, according to
state law, that liens perfected (actually recorded in the chain of title) upon real property will get
satisfied (j aid) or extinguished in a foreclosure action according to their relative status 2 .
Technically, the lien exists in favor of the United States prior to the filing of the notice of the
lien, but to establish priority, EPA must file the lien to give “notice to the world”, and so the lien
will appear in a title report. When a lien is filed it “encumbers,” or “puts a cloud” on the title of
the subject property. In a foreclosure action, tax liens normally receive a super-priority which
means that they get satisfied or paid off first. Any other liens normally get paid off according to
the order in which they were legally recorded on the property - - first perfected, first paid out of
auction proceeds.
For example, on the Acme Superfund Site there is a mortgage for $50,000 which was filed in
1980, unpaid tax liens for $10,000 filed in 1990, an EPA Superfund lien (to recoup SI million in
Agency costs) filed in 2000, and a mechanic’s lien for $500 filed in 2002. If the bank forecloses
on the property and the property sells for $200,000 at auction - the tax liens would be paid in full
first, the bank would get paid in full second, EPA would receive $140,000 as third in line and the
mechanic would receive nothing. All the liens would be extinguished and the property would
transfer to the highest bidder freely, unencumbered by any liens.
Differences Between the Two Liens : One way to conceptualize the difference between the two
‘The issue of whether state law can extinguish a federal Superfund lien is under research.
2 Lien priority has no legal bearing in a voluntary sale, but may be taken into account by
EPA when negotiating a lien settlement because a lien’s practical value is only as good as the
available equity in a property.
-------
liens is imagine the sale of a Superfiind site from a potentially responsible party (“PR?”) to a
bona fide prospective purchaser (“BFPP”). The traditional Superfund lien (or (1) lien) generally
is used to recover cleanup costs from a liable party and applies to the time before the sale. The
windfall lien (or (r) lien) is generally used to recover unfair profits, attributable to EPA’s cleanup
expenditures, from a non-liable party who has achieved BFPP status, and therefore usually
applies to the time after the sale. In a nutshell, the Superfund lien looks backwards to recoup
past response costs and the windfall lien looks forward to recoup future indfall costs.
Superfund Liens - Section 107(fl : Superfund liens were authorized in 1980 when CERCLA
was enacted. The purpose of the Superfiind lien is to secure equity in property that is subject to a
removal or remedial action (not other land or property owned by the PR?) for EPA’s
unrecovered past costs up to the time of satisfaction or foreclosure. Therefore, if a property
owner has a defense to Superfund liability, then EPA does not have the authority to perfect a
Superfund lien on the owner’s property. Superfund (I) liens are subject to the statute of
limitations (“SOL”) expiration date of the unrecovered response costs (3 years for a removal; 6
years for remedial actions). The Superfund lien is unenforceable for unrecovered costs once the
SOL runs on those costs. If appropriate, EPA may enforce the Superfund lien before the SOL
has run, by filing an “in rem” action in federal court — essentially suing the PR? to force a sale or
foreclosure of the property.
Advantages of Perfecting a Superfund lien : (1) aids EPA in recovering response costs from
PRPs, (2) gives notice to prospective purchasers that the property is a Superfund site, and (3)
gives notice to EPA that a Superfiind site is being sold when the lien is satisfied.
Superfund liens are designed to recover costs during a voluntai y sale or foreclosure and prevent a
liable party from selling the property and unfairly pocketing the profit without settling with EPA.
It is important to note that ability to pay (ATP) settlements should include the available equity of
site property. The Superfund lien is often used as a bargaining chip to encourage settlement by
the PR? owner. Frequently, the Superfund lien value greatly exceeds the value of the facility
property; therefore, Region 4 takes into account the practical value of its lien, and in an effort to
facilitate revitalization, will compromise the face value of the Superftind lien and release it for a
reduced amount (available equity minus sale costs or incentive to sell) when appropriate.
Windfall Liens - Section 1O7(r : Windfall liens were authorized in the 2002 Brownfield
Amendments to CERCLA. The purpose of the windfall lien is to recover any unfair windfall
(increase in the fair market value of the property that is attributable solely to EPA’s response
action) that may accrue to a BFPP during the BFPP’s ownership. Windfall liens may recoup the
lesser of: (1) EPA’s unrecovered response costs or (2) the increase in fair market value of the
property that is attributable to EPA’s response action.
Generally, EPA only files windfall liens on property owned by a BFPP. Unlike a Superfund lien,
the windfall lien is not subject to an SOL expiration date and EPA’s enforcement authorities are
different. Unlike the 107(1) lien, EPA may have to wait until the BFPP-owner sells or otherwise
“disposes” of the property to recoup the windfall amount, unless the BFPP chooses to settle the
windfall lien up front. For that reason, it is a good idea to encourage BFPPs to settle the windfall
2
-------
either before or immediately after they acquire the property. Most prospective purchasers will
want to know their total acquisition costs before purchasing the site property. This means that
prospective purchasers will want to know the total value of the windfall amount and the
settlement amount offered by the Region so they can make a timely business decision whether to
purchase the property and whether to settle the windfall lien up front or not. By entering into a
“windfall lien settlement agreement” with EPA, the BFPP can avoid having the title encumbered
by a lien.
The default calculation for valuing the windfall is:
appraised “as clean” value
- purchaser price
= full windfall lien value
Region 4 will offer to appropriately compromise the windfall lien value (according to the January
10, 2001 PPA guidance factors) if the BFPP will settle the lien up front. Otherwise Region 4
will perfect the lien on the title and will only release the lien upon payment of the full lien
amount, plus some type of interest/present value of money calculation, prior to a subsequent sale.
Many BFPPs buy sites that either have ongoing cleanups or have contamination left in place
under an institutional control -- compromising the windfall lien up front adds an incentive to
encourage the purchase of the site property by the BFPP rather than having the BFPP develop a
greenfield.
Relevant Guidance:
Interim Enforcement Discretion Policy Concerning Windfall Liens Under Section 107(r) of CERCLA -
(7/16/03)
This memorandum discusses EPA and DOJ interim policy implementation of the new CERCLA 107(r)
windfall lien provision contained in the 2002 Brownfields Amendments.
www.epa.gov/compliance/resources/policies/cleanup/superfund/interim-windfall-lien.pdf
Windfall Lien Guidance: Frequently Asked Ouestions - (7/16/03)
FAQs sheet containing questions and answers to the interim windfall liens guidance
www.epa.gov/compliance/resources/policies/cleanup/superftind/interim-windfal l-lien-faq.pdf
Support of Regional Efforts to Negotiate Prospective Purchaser Agreements (PPAs) at
Superfund Sites and Clarification of PPA Guidance - (1/10/01)
Memorandum addresses settlements at Superfund sites that can be returned to productive reuse.
www.epa.gov/compliance/resources/policies/cleanup/superfundlneg-ppasuper-mem.pdf
3
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EPA
9WER OSWER OSWER
DiRECTIVE DIRECTIVE Dl
U.t4 t1ISS
Eiwwo lmsnIaI P’oi. ,.o
Offic, of
Solid Wash avid
£metgsviev g 0 0 n 55
DIRECTIVE NUMBER:
TITLE:
983 12
Guidance on !ederal Super fund Liens
22, 1987
22, 1987
APPROVAL DATE:• September
EFFECTIVE DATE: September
ORIGINATING OFFICE: OECM
o FINAL
DRAFT
LEVEL OF DRAFT
A — Signed by AA or DAA
o 8 — Signed by Office Director
o c — Review & Comment
REFERENCE (other documents):
Received
bECO 2 1999
& Cotnptlancs Do
& Information C mtar
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
“ ‘t i.øfl.G’
SEP 22 1987
O’;ir, o,
I11 0I IMFW? £110
COMPts*J,11 MOUflOMI’.G
MEMORANDUM
SUBJECT: Guidance on Federal Superfund Liens
FROM: Thomas L. Adams, Jr.
Assistant Administrator
TO: Regional Administrators, Regions Z-X
Negional Counsels, Regions l X
Directors, Waste Management Division,
Regions I-X
The purpose of this memorandum is to establish guidance on
the use of federal liens to enhance Superfund cost, recovery.
Section 107(f) of the Superfund Amendments and Reauthorization
Act of 1986 (“SARA’), adds a new Section 107(1) to CERCLA, which
provides for the establishment of a federal lien in favor of the
United States upon property which is the subject of a removal or
remedial action.
This ’’guidan ’provides: (1,) analysis of statutory issues
regarding the naturç and scope of the lien, (2) policy on filing
a federil, 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 guTa ’ance 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 a lien in 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 Mouse Judiciary Committee Report on the lien
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,•,... _, 4 .s
—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 thus 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 R.R. 2817, p. 140,
indicating that one of Congress’ primary purposes in enacting
the lien provision was to prevent unjust enrichment.
B. Duration and Effect of Lien
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 may send out two different types of notice letters to PRPs.
The first, a general notice letter, will, be sent early in the
process notifying the recipient that he or she has been identified
as a party who may be responsible for cleanup of the site or for
the costs of cleanup. In addition, the Agency may send a sub-
sequent “special” notice which will invoke and commence the
settlement procedures in Section 122 of SARA. The first of those
letters will satisfy the notice of potential liability required
for the federal lien to arise, assuming that it dces give the PRP
notice of potential liability for cleanup of costs, and is for-
warded by certified or registered mail.
It is EPA’s position that the lien provision applies to costs
incurred prior to and after passage of SARA. The lien also applies
to all future coats 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.” (5107(l)(2))
C. Priority of Federal Lien In Relation to Other Property
Liens
The federal lien is “subject to the rights of any purchaser,
hlder of a security interest, or judgment lien creditor whose
Interest is perfected under applicable State law before notice of
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9832,1 2
—3—
the federal lien has beenfiled [ by EPAIS” ( iO7(l)(3)) Thus, the
unf Lied 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 M.R. 2005 Is. 51) which provided for
constructive notice of an EPA lien. Under that provision, if EPA
failed. to file its notice of lien in a timelyfashion, 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. Environment and Public
Works Report on S. 51, p. 45. Thus, since this provision was
ultimately deleted from the 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 df 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 constitutes first
priority lien upon the real property of a hazardous waste dis-
charger. Several other States provide that expenditures from the
hazardous waste fund will constitute a lien in favor of the State,
although not a first-priority lien. -
II. POLICY ON FILING FEDERAL LIENS IN COST-RECOVERY ACTIONS
EPA his the authority to file notice of a lien on any real
property where Superfund expenditures have been aade. 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 Sècsion 107. Filing of notice of the
federal lien will be particulirly beneficial 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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832.12
(3) there is a likelihood that the defendant owner
may file for bankruptcy. See Revised Hazardous
Waste Bankruptcy Guidance,öTf ice of Enforcement
and Compliance Monitoring, May 23, 1986;
(4) the value of the property will 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 ecisttng 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. Supp. 573 ( Md.
1986) . In such cases, EPA shouldfile a lien as to the foreclosing
party after foreclosure and after other acts creating liability
have taken place.
Pursuant to Section 545(2) of the Bankruptcy Code, a lien
unperfected as cf the time of filing of the bankruptcy petition
will be invalidated .by the bankruptcy trustee. Thus, where there
is a likelihooa 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. 1 ’
III. PROCEDURES FOR FILING LIENS
Notice of the federal lien should be filed at the time that
the owner is provided notice of potential liability. By this time,
the lien will have arisen since EPA wil.l have incurred costs,
1/ Courts have rejected claims that owners are entitled to notice
and hearing prior to filing of the lien. In S ielman Fon4,,
Inc . v. Hanson’s Inc. , 379 F. Supp. 997 (D. Ariz.) judge court),
i iimarily aff’d , 411 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,
B & P Development v. Walker , 420 F. Supp. 704 (W.D. Pa. IVT6).
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9832.12
—5—
in conducting a PRP search. The government’s priority will, relate
back to the date that the notice of the lien was filed. See
Uniform Commercial Code, 19 -312(5)(a). Unlike some State perfund
lien provisions, Section 107 does not establish a deadline by which
notice must be filed.
A. Preparing the Notice
Regional enforcement personnel should refer, to State
requirements for filing notice of the lien. We encourage the
Regions to work with State Attorney General Offices to assure
that the Regions accurately Interpret State law, and to consult
with OECM and DOJ in determining whether to file notice of the
lien. .
Notice should generally include: (1) the name of the property
owner, (2) ‘a precise legal description of the property on which the
lien willarise, (3) an explanation by’the. ’Regional official of the
basis for the lien, (4) the address of the Kegional. 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
O7(l) 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 ’Tgeneral post office or
street address. We have attached an example of a.notice’of a
federal lien.
Under the recent SARA delegation, the’Regional Administrator
has been delegated authority to sign the notice of filed lien.
The Regional Admini8trator may .redelegate this authority at his/her
discretion.
B. Where to Pile
To establish its priority among other secured parties and
creditors, EPA must file notice of the lien “inthe.appropriate.
office within the State (or county’ or other governmental sub-
division), as designated by State law, in which the real property
subject to the lien is located.” (S107(l)(3))
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9632.12
—6—
Where the State has designated an office, such as a County
recording office, the lien should be filed in that office. This
will likely be the same office where State Superfund liens are
filed or where general rca]. property liens, !..!Z• mechanic’s liens-
are filed. “If the State has not by law desI iiated 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.” (1107(l)(3))
Where there is any doubt as to the designated State office.
the lien should be filed both in the office of the clerk of the
United States district court for the district in which the real
property is located and in the 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 RECOVERING COSTS CONSTITUTING THE LIEN
Under Section 1O7(l)(4), “ [ t)he costs constituting the lien
may be recovered in an action in rem in the United States district
court for the district in whicWtE removal or remedial action is
occurring or has occurred.” An action is an action against
the property of the PRP. In order to institute a proceeding iii rem,
the property must “be actually or constructively within the reac
of the court.” 36 Am. Jur. Zd Forfeitures and Penalties Sib (1968).
By contrast, the typical cost recovery action is an in personam
action against the PR?.
In rem actions should be considered where the litigation team
believesEEat an action to recover costs covered by the lien will
enhance its efforts to recover all costs incurred in a response
action. Such actions will be particularly useful where the pro-
perty constitutes a significant asset of the PRP, and where the
government is having difficulty reaching an expeditious cost
recovery settlement. The in rem action, which will seek an order
directing sale of the property. / ehould generally be combined with
an in personam action for costs. Before bringing an in rem action,
the regional office should consider the amount of the claT , the
2/ An rem action may be delayed by an automatic stay, obtained
in a bi ruptcy proceeding, which serves to stay “any act to
create, perfect, or enforce any lien against property of the
estate.” (Emphasis added) 11 U.S.C. 5362(a)(4). The automatic
stay also prohibits perfection of a lien, through filing notice
of the lien, against a bankruptcy debtor.
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—. 1 -. -
- d —
condition of thesite afte the response action and thelikely
marketability of the site. Note that an rem action will require
the same elements of proof as any cost recovery action.
Section 107(l)(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 costs 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 anyother liable par ty 3 /
DISCLAIMER
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 by the. Agency and may not be relied upon to create a
right, or a benefit, substantive är 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.
At t a chmen t
3/ Moreover, after EPA obtains a judgment, it should consider
— using state judgment lien provisions, which may cover a].l real
property of the debtor.
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C i -,
I C.. . . . c
ICTICE OF F DERA1. 11th
tioTiCt IS H EBY CIVEZI by the Unted States of M erica that it t ølds a lien on
the Lands and presises described belaa situated in the State of Washington,
as provided by Section 107(f) o the Sup rfund k nd ents and Reauthorization
Act of 19b6 (SMA), Public L ’ No. 99-499, esending the Cazzprth ensive virormenca1 1
Res nse 1 C ersation, andLiability Act of 1980 (CD(CLA), 42 U.S.C. 1960i et
s . • to seaare the pay enc to the United States of a.U costs and desages cd red
by that Section for kILth Wastern Processing Caipany, Inc. and Garmt 3. Nieu thuis
(and the marital cam zity cxiposed of hiansetf and his vife) are Liable to the
United States z der Section 107(a) of CLA as ended. The lien for t ich this
instzts ent gives rotice exists in favor of the United States u n all real property
and riØws to such property ith belong to said persons and are, have been, or wil.1
be. st.bjecc to. or affected by, r vaL and renedtal actions as defined by federal
law, at or near 7215 South 196th in the City of Kent, County of ICing, State of
Washington, including the foll .iing described I.& :
That rticn of the Southeast Quarter (S,E. 1/4) of the
Nort?west Quarter (N.y. 1/4) of Section Gie (1), T nship
Tt ty-1 o (22) North, Range Four (4) East. Wifl tte
P ridien, lying Westerly of the Pugec Sound Electric
ri ts.of-way less than North Thirty (30) feet of ainage
Ditch No. ie (1), contathing 12.9 acres more or less.
This statutory lien exists and continues un it the liability for such costs
and daz ages (or for ar decree or judgere t against st h persons arising out of
such liability) Is satisfied or bec tes unenforceable throu i the eration of the
statute of 1ii itations as prwided by Section 113 of Public Lai 9 ’.499.
IN WI1N S• &3 EOF, the United States has caused this Lnstn. t to be exeoated
through the (p .’ted’. r 1 a es F2 vi rcmenta]. Protection Agency, and tS attorney, in has
of ficia] .• papacity as Re acnal Counsel of the United States awirori anta1 Protection
AgenEg Ot ,1D.
‘r ‘
Dated àt Sef 5 e.’ 4aG.h 1 r€ oh , this I&T.f day of Ii i,t4.#Md , 19 C 7. .
. 1 • !..
•,: . UNITED SThT CF AJERICA and
.0. \ •N-” UNITED SV Tt DNIRO*TN’rhL
.\ PROTECEICN A NCY
/
• ,•• j -
i..•’j .-‘ ,• .‘.‘ j , / • ! i’ L i,aj
United States Of- rica) •. By: / .1 r (’ “ “.,
State of Washington )ss / eses • re
C xty of King ) ¶ egLonal C zase1
.S. ‘A Region 10
day of Nh A I’ , 19. L, there appeared personally
;igned Notary, es • re, Iä i to me to be the Regional
ted States iviror eital Protection Agency, kegion 10, and he
he sIgned the foregoing NoTICt CF I DU AL Uk in a represencatave
ee and icluntaty act and deed of the United States and its aaid
es and pixposes therein mentioned. GIVEN under my hand and official
year first stated above.’\ ____
/ / - f L)TARY PU&,I and or
My C ission pires : / j 7/ 9e.. . of Washington residing at Seattle
If
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E ---! 9’ - L y
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
JuL 29 1993
MEMORANDUM
SUBJECT: Supplemental Gui ance on Federal Superfund Liens
FROM: WiuiamtA. Whit -
Enforcement Counsel
Off ice df Enforcement erfund
Bruce M. Diamon
D irector
Office of Waste Programs Enforcement.
TO: Regional Counsels, Regions I—X
Directors, Waste Management Divisions,
Region I—X
The purpose of this guidance document is to supplement the
“Guidance on Feder l Superfund Liens” issued on Septemberd22,
1987, by memoranduit signed by Thomas L. Adams, Jr., Assistant
Administrator of th e Office of Enforcement and Compliance
Monitoring (now Of f’ice of Enforcement). This Supplement is in
addition to, and d4s not supersede the 1987 document, which
provided criteria f?r the decision to file liens under Section
107(1) of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (CERCLA), 42 U.S.C. S 9607(1). This
Supplement outlines procedures for Regional staff to follow to
provide notice and opportunity to be heard to potentially
responsible parties Ion whose property liens are to be perfected.
I. SUMMARY
The Agency shou Ld provide notice to property owners who are
potentially responsi 1e parties (“PRPs”) under CERCLA that the
Agency intends to perfect a lien on their property prior to
filing papers to perfect. The Agency wil1 give such property
owners 1 the opportunity to be heard through their submission of
documentation or thrc ugh appearing before a neutral EPA official,
or both. In exceptional circumstances, EPA may perfect a lien
1 For purposes bf this guidance, owner means persons
possessing title to r al property or rights to such real
property, as set forth in Section 107(1) (1) of CERCLA, 42 U.S.C.
§ 9607(1).
MAR - 2 ;ggg
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2
prior to giving notice to a property owner of EPA’s intention to
perfect the lien, but the Agency should concurrently notify the
owner and offer an opportunity to be heard at the earliest
practicable time .1
The Agency ou1d send a letter by certified mail notifying
property owners of the Agency’s intention to perfect a lien, or,
if appropriate, immediately upon perfection. The letter should
summarize the factual basis for EPA’s reason to believe that the
statutory criteri for perfecting a lien are satisfied. The
letter should inform the recipient property owner of his or her
opportunity to beiheard, either by submitting documentation or by
obtaining a meeting conducted by a neutral official. The meeting
will consist of ai infotinal proceeding in which the property
owner may provide EPA with information as to why EPA’s
assumptions require reconsideration.
II. PROCEDURES
Record of Decision to File
After consul ing the 1987 Guidance on Federal Superfund
Liens to determin whether the perfection of a Superfund lien is
of value, staff de ignated by the Region should assemble a Lien
Filing Record, bringing together in one place all the documents
relating to the debision to perfect.
Provisions for maintenance of the Lien Filing Record are at
the discretion of the Region, and it may choose to maintain the
record in the same inanner that it maintains other Superfund
records. At a minimum, ?iowever, the Region should ensure that
certain personnel re designated to add relevant documents,
maintain the integrity of the record, and make the record
reasonably available, upon request, to the property owner. The
Region may wish to have the Regional Hearing Clerk maintain the
Lien Filing Record, once a property owner requests a meeting.
The following categories of documents should be assembled:
1. Documentation that the potentially responsible party is
the owner 1 of the property, e.g. , the file contains a
deed, legal description from a survey or tax record, a
title search, etc.
2. Documents( showing that EPA has actually incurred costs
at the site (a summary report of costs is sufficient
for this purpose; underlying documentation is not
necessary).
3. Documents showing that the property owner was provided
(by certified mail) written notice of potential
liability, pursuant to CERCL Section 107QJ.
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4. Documen s describing the property showing that the
property or that part of a property is contaminated and
showing that the property has been subject to or
affected by a removal or remedial action. Examples
jnclude action memoranda, removal response reports,
Prelimii ary Assessment or Site Inspection forms, or
National. Priorities List listing documents. (The
Region ay choose to include a declaration by the On—
Scene C 9 ordinator or Remedial Project Manager (“RPM”)
incorporating these elements.)
5. Where a plicable, any documents describing exceptional
circumstances which support EPA’s decision to perfect a
lien pri or to offering an opportunity to be heard.
Such cir 1 cumstances include instances in which the
property 1 owner is about to take some action that would
render t e property unavailable to satisfy a judgment
for clean-up costs or where EPA’S interest in the
propertyl would be impaired. Examples include, but are
not limi ed to, imminent bankruptcy of the property
owner, inuninent transfer of all or part of the
property , or imminent perfection of a secured interest
which wojild have priority under applicable state law,
or indications that these events are about to take
place. here the Regional staff are depending on
factual 4nforxnation that is not a matter of public
record, t hey should include in the file a supporting
statement (a) from someone with first hand knowledge of
the fact , or (b) indicating the factual basis on which
the Agency proposes to act, and the source of the
Agency’ s tinfori%ation.
The Region shduld continue to add relevant documents to the
Lien Filing Record,j such as the following:
1. EPA’s notlice of intent to file a lien (see below) sent
to the pr perty owner, with proof of receipt (or proof
of mailing to the last known address).
2. Any documentation submitted by the property owner to
show thatt EPA did not satisfy the statutory criteria
for perfection of a lien or that EPA was in error when
it concluded that the criteria were satisfied. This
documentation may include correspondence, or documents
submitted tat or after any meeting request by the
property owner.
3. Any respor ses by the Region to the property owner’s
submissions.
4. Any correspondence between the Region and the property
owner relating to the filing of a lien.
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5. Any form of record of a meeting held regarding the
perfect ion of the lien.
The Region should maintain the Lien Filing Record and, upon
request made to t e Regional Attorney, make it reasonably
available to the property owner.
he Notice 0* Intent to Perfect a SuDerfund Lien
This guidanc includes a model notice letter (See Attachment
1) to inform the property owner of the Region’s intention to file
and perfect a noti ce of lien. A notice letter should be mailed
to the owner by c rtified mail, return receipt requested. The
letter should stat e that EPA intends to perfect its lien after a
set number of cale ndar days, e.g. , 14 days, from mailing. In the
letter, the Region should also notify the property owner of the
location and avail 1 ability for review and copying of the Lien
Filing Record.
The notice ofi intent to perfect should contain the following
elements:
1. A statement that land records of the appropriate state
or count j indicate that the recipient is the owner of
the subject property, with a citation to those records.
2. A precise identification of the property, using the
street address and a deed, or reference to a deed or
other 1ec al description in land records.
3. Statemen s that: EPA has a reasonable basis to perfect
its lien;l the property is a facility as defined in
CERCLA Section 101(9,; the Agency has reason to believe
that the owner “owns” the facility and that the owner
is a 1iab e person pursuant to CERCLA Section 107(a);
the property is subject to or affected by a removal or
remedial pction; and costs have been incurred by the
United St tes with respect to a response action at the
property.
4. In satisfaction of CERCLA Section 3.07(23 (2) (B),
reference to previous written notice of potential
liability furnished to the property owner, or notice
via this letter, if notice has not already been
furnished.
5. Notice that the lien shall remain in effect until
liability for the costs is satisfied or the lien
becomes unenforceable through operation of the statute
of limitat 1 ions in CERCLA Section 113.
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6. A statement that the property owner may submit any
docuinent s or information relevant to the issues raised
by the l ien in writing to the Regional attorney
assigned to the site prior to the expiration of the
time pex iod stated in the notice.
7. An invitation for the recipient to request, prior to
the expiration of the time period stated in the notice,
an opportunity to be heard before a neutral EPA
official This request should be in writing and
addressed to the named Regional attorney.
8. A statement that the.subject of any requested meeting
shall belwhether EPA has (or had) a reasonable basis to
perfect lien upon the property based upon the
statutor elements.
9. A statem nt that neither EPA nor the property owner
waives or 1 is prohibited from asserting any claii s or
defenses ‘by the submission of information, a request
for and participation in a meeting, or a recommended
decision by the neutral official whether or not EPA has
a reasona 1e basis to perfect a lien.
10. Where EPA has perfected its lien prior to sending this
notice of intent, a statement de cribing the
circumstaiices that led the Agency to perfect the lien
in order to protect EPA’S interest in the property and
how those interests were about to be impaired. The
statement should further indicate that the property
owner may stilT make a timely request for a meeting to
demonstrate that the EPA had no reasonable basis to
perfect i€s lien.
Perfection of Lien Prior to a Meeting
The Agency may, in exceptional circumstances, perfect a lien
prior to offering or providing a property owner with a meeting.
Thus, even where the Region has notified a property owner that he
or she has an opport inity to request a meeting, under certain
exceptional circumstances, the Region may perfect a lien prior to
provid .ng that meeti g. The Region shall send notice to the
property owner, return receipt requested, immediately upon
perfection. A model letter for post-perfection notification is
included as Attachment 2. Exceptional circumstances for this
course of action include, but are not limited to, instances in
which EPA’s interest un the property could be impaired, such as
imminent bankruptcy of the property owndr, imminent transfer of
all or a portion of t he property, imminent perfection of a
secured interest whi h would have priority under applicable state
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6
law, or indicatithis that these events are about to take place.
As noted in the s ction on the Lien Filing Record, Regional staff
should document any such circumstances i 1 n the Lien Filing Record.
While the pr?cedures and standards to be followed for a
post-perfection 1n eting are similar to those for a pre—perfection
meeting, the Region should expedite to the extent possible the
holding of a post4perfection meeting, if one is requested.
PropertvOwner’ s _ Response
• Failure of Pxjoperty Owner TO Timely Respond
If a propert owner does not respond within the period set
for response, the Region may proceed to perfect the lien. At the
time of perfectionl, the Region should send a letter notifying the
owner of the date the lien was perfected.
• Timely response: Written Response and No Request for Meeting
If a property owner presents written documentation in a
timely manner purportin to show that the lien should not be
perfected,’ but doe not request a meeting, the Regional site
attorney should review the documentation furnished. If the
Region agrees that the property owner has produced facts to alter
EPA’s determination that it has a reasonable basis to file the
lien, EPA should sd notify the property owner.
If the Regiona 1. attorney determines that EPA still has a
reasonable basis to perfect its lien, theRegion should select a
neutral official in acc6 dance with the process described below
to review the documentation furnished. At the conclusion of the
neutral official’s eview, he or she should provide the property
owner and Regional staff with a brief written recommended
decision on whether EPA has a reasonable basis to perfect a lien.
The document should set out the informational basis upon which
the recommended decision is made, and should be placed in the
Lien Filing Record, twith a copy forwarded to the official in the
Region delegated with the authority to sign liens for action.
• Timely Respons : Request for Meeting
If a property owner requests a meeting, the Region shall
select a neutral off .cial in accordance with the process
described below to c nduct the meeting. The neutral official
shall set up the time and location of the meeting, or offer the
property owner a meeting via teleconference.
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Meeting Procedures
• Selection of Neutral Official
The neutral official selected by the Region should be an
attorney who is a permanent or temporary employee of the Agency
and who may perfo iu other duties within the Agency. The person
selected should nbt have performed any prosecutorial,
investigative, or supervisory functions in connection with the
case or site involved.
Regions may l iave judicial or presiding officers already
appointed pursuant to other EPA programs who possess the
qualifications ou lined above. Where the Regions do not wish to
select separate neutral officials to hear lien matters on a case-
by-case basis, thdv may allow these hearing officers to conduct
lien meetings.
Upon selection of the neutral official, the designated
keeper of the Lien Filing Record should provide the official with
a copy of the Lien Filing Record, which includes any written
response by the pr9perty owner and any subsequent supporting
documentation submitted by the property owner.
. Factors to Re iew
The neutral EPA official should consider all facts relating
to whether EPA has ta reasonable basis to believe that the
statutory elements ‘have been satisfied for the perfection of a
lien. In particular, the neutral official should consider
whether:
• . The propekty owner was sent notice of potential
liability by certified mall.
• The property is owned by a person who is potentially
liable under CERCLA.
• The property is subject to or affected by a removal or
remedial a’ction.
• The United States has Incurred costs with respect to a
response action under CERCLA.
• The record contains any other information which is
sufficientito show that the lien notice should not be
filed.
The property owner may present information or submit
documents purporting to establish that EPA has erred in believing
that it has a reasonable basis to perfect a lien based on the
above factors, or has made a material error with respect to the
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8
above factors. I making his or her decision, the neutral EPA
official should c 9 nsider all facts in the Lien Filing Record
established for the perfection of a lien and all presentations
mide at the meetir g, which will be made part of the Lien Filing
Record.
• Nature of the Meeting
The persons a the meeting normally should include the
property owner (and/or an attorney, at the property owner’s
option); Regional nforcement staff (RPM and Regional attorney
and any other appropriate Region officials); and the neutral
official.
The meeting oi dinarily should be held at the EPA Regional
office. As stated above, the neutral official may offer to
conduct the meeting by telephone for the convenience of the
property owner. The neutral official should also ensure that a
record of the meeti ng is made. If a summary of the meeting is
prepared as a recor d, it should indicate who was in attendance,
what information was presented, and what issues were discussed.
Arty such suinznary should be provided to the property owner. The
record of the meeting, and any comments submitted by the property
owner on the suinmar ’ should be included as part of the Lien
Filing Record.
The neutral of icial should conduct the meeting as an
informal exchange of information, not bound by judicial or
administrative rules of evidence. Because of the informal nature
of these proceedings , EPA will not apply the Administrative
Procedure Act provisions f or formal ad judication.
The neutral off icial should begin the meeting by making an
opening statement, cbntaining the following elements:
1. The proceeding is informal, and not bound by rules of
evidence nor provisions of the Administrative Procedure
Act.
2. Neither EPA nor the property owner waives any claims or
defenses b the conduct of the meeting or the outcome.
3. The sole i sue at the leeting is whether EPA has (or
had, in the case of a post-filing meeting) a reasonable
basis to b&.ieve that the statutory elements for
perfecting lien were satisfied. The meeting will not
be concerned with issues not relating to the proposed
perfection of the lien, including, but not limited to,
EPA’s selection of a remedy or contents of remedy
selection documents, such as records of decision or
action memoranda.
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4. The neu€ral official will make a recommended decision,
based or the Lien Filing Record and any new information
presented at the meeting, whether EPA has (or had) a
reasonak le basis to perfect the lien.
5. The recdminended decision is not admissible as evidence
- in any f.iture proceeding.
The neutral dfficial should conduct an orderly and fair
meeting. Regionali staff may present EPA’S reason to believe that
a lien may be perfected upon the property. The property owner or
his or her counse] shall have a reasonable bpportunity to address
relevant issues and present his or her views. The neutral
official may also allow discussions and interchanges between the
parties, including responses to questions to the extent deemed
appropriate. It us not the Agency’s intent to provide EPA or the
property owner an Iopporttmnity to engage in direct examination or
cross—examination 1 of witnesses. The neutral official may address
questions to the roperty owner or his or her counsel or to EPA’s
representatives during the meeting.
While the neutral official should place no limitations other
than reasonableness on the type or volume of information
presented or issu s discussed, he or she may caution that only
information and issues which are relevant or material to EPA’s
decision as to wh ther it has a reasonable 1 basis to perfect the
lien will be ultimately considered.
Recommended I ecision
In a timely n anner,the neutral official should issue a
written recommended decision. The recommended decision should
state whether the property owner has established any issue of
fact or law to althr EPA’S decision to file a notice of lien and
the informational asis3 1pon which the decision is based. The
recommended decision should contain a statement that neither EPA
nor the property 4ner is barred from any claims or defenses by
the recommended decision. The recommended decision should be
placed in the Lien Filing Record, with a copy forwarded to the
official in the Re ien delegated with the authority to sign liens
for action, and a copy sent to the property owner.
Because of th preliminary and informal nature of the
proceedings under this guidance, and the fact that the neutral
officer’s recommended decision is limited to whether EPA has a
reasonable basis t , perfect the lien, the neutral official’s
recommended decision is not a binding determination of ultimate
liability or non-liability. No preclusive effect attaches to any
decisions made in the course of any proceeding pursuant to the
guidance, nor shall any such decisions be given deference or
otherwise constitute evidence in any subsequent proceeding.
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The Agency m y subsequently provide notice of intent to
perfect a lien wi h an opportunity to be heard with respect to
the same property lunder these procedures if new information
indicates that a previous decision not to file is in error.
Except as prcvided by CERCLA Section 113(h), property owners
may not obtain judicial review or reconsideration of the Agency’s
decision that it has a reasonable basis to perfect a lien.
III. DISCLAIMER -
This memorandum and any internal procedures adopted for its
implementation ard intended solely as guidance for employees of
the U.S. Environm ntal Protection Agency. They do not constitute
a rulemaking by the Agency and may not be relied upon to create a
specific right or a benefit,. substantive or procedural,
enforceable at law or in equity,.byany person. The Agency may
taice action at va iance with this memorandum or its internal
implementing proc dures.
IV. FURThER IIJPOBXATION
For further i!nf.ormation concerning this policy, please
contact Patricia Mott in the Office of Enforcement at (202) 260—
3733 or Gary Worthman in the Office of Waste Programs Enforcement
at (703) 603—8951,’
Attachments (2)
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Supplemental Guidance on Federal Supcrfund Liens
Attachments (2)
ATTACHMENT
ATTACHMENT 1
MODEL: PRE-PERFECTION NOTICE
[ REGIONAL LETTERHEAD]
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION [
[ ADDRESS]
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
(Date]
[ Name and address of owner of property]
RE: (Name and location of the site]
Dear (Name of property owner]:
This letter informs you that the United States Environmental
Protection Agency (“EPA”) intends to perfect a lien upon property
located at [ Street address], the exact legal description of which
is contained in Attachment 1 to this letter. The Property is
part of the [ J Superfund Site. EPA has determined that you
are the owner of this property (the “Property”). The lien which
EPA intends to perfect against the Property arises under Section
107(1) of the Comprehensive Environmental Response, Compensation,
and Liability Act (“CERCLA”), commonly known as the “Superfund,”
42 U.S.C. Section 9607(1). The lien is intended to secure
payment to the United States of costs and damages for which you,
as the owner of the Property, would be liable to the United
States under Section 107(a) of CERCLA, 42 U.S.C. Section 9607(a).
Under CERCLA Sections 107(a) and 101(9), 42 U.S.C. Sections
9607(a) and 9701(9), liable persons include persons who own any
“facility,” including a site or area where a hazardous substance
has been deposited, stored, disposed of, or placed, or otherwise
come to be located. EPA has determined that a release or threat
of release of hazardous substances pursuant to CERCLA Section
101(22) has occurred at or from the Property. The Property is
part of the ( ] Superfund Site, at which [ hazardous substances]
came to be lobated, and is subject to or affected by a removal or
remedial action. As the owner of a facility, you are a person
1 able for all costs of removal or remedial action at the site.
Costs and damages include the costs incurred by the United States
in responding to a release or threat of release at the
Superfund Site.
The lien arising in favor of the United States on the
Property continues until the liability for the costs is satisfied
or until the liability for the costs becomes unenforceable
through operation of the statute of limitations in CERCLA Section
113 .
On (date], EPA notified you by certified or registered mail
of your potential liability under CERCLA [ or EPA hereby furnishes
notice, if notice has not already been furnished.] You may avoid
the perfection of a lien upon your property by paying all costs
and damages for which you are liable.
9o113 ‘(fl)3 14 l \1
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Supplemental Guidance on Federal Supeifund Liens
EPA has assembled a Lien Filing Record consisting of
documents relating to its decision to perfect the lien. This
record is kept at the following address, and may be reviewed and
copied at reasonable times by arrangement with:
(Regional Attorney]
[ Address and Telephone Number]
EPA has reviewed the information in the Lien Filing Record
and believes that the Agency has a reasonable basis to believe
that the statutory elements for perfecting a lien are satisfied.
After (14 calendar days or other period, set by the Region) from
the date of this letter, EPA intends to transmit a notice of lien
to (the appropriate office within the state (or county or other
governmental subdivision), as designated by State law, where the
real property is located, or with the District Court of the
United States for the district in which the real property is
located]. The effect of this filing is to perfect the lien upon
your property.
You may notify EPA within (14 calendar days or other per. od,
set by the Region) from the date of mailing of this letter in
writing if you believe EPA’s information or determination is in
error. You may also request to appear before a neutral EPA
official to present any information that you have indicating that
EPA does not have a reasonable b asis to perfect a lien. You
should describe in your letter or written request your reasons
for believing that EPA does not have a reasonable basis to
perfect its lien, because EPA may, as described below, agree with
your reasons and reconsider its intention to perfect a lien
without further review or a meeting. Any written submissions or
requests for a meeting should reference the Superfund .Site, be
addressed to the above referenced Regional Attorney, and may
include documents or information which support your contentions.
If EPA receives a written submission or a request for a
meeting from you within [ 14 calendar d ys or other period, set by
the Region] from the date of mailing of this letter, Agency staff
will review your submission or request for a meeting. If, after
review and consultation, EPA agrees that the Agency does not have
a reasonable basis upon which to perfect a lien, EPA will not
perfect its lien, and will so notify you. If EPA disagrees, the
written submission or request will be referred to a neutral EPA
official selected for the purpose of reviewing the submission or
for conducting the meeting, along with the Lien Filing Record.
If you have requested an opportunity to appear, a meeting
will be scheduled. You may choose to attend this meeting via
teleconference. The Agency will be represented by its
enforcement staff, including a representative from the Office of
Regional Counsel. You may be represented by counsel at this
meeting.
The meeting will be an informal hearing in which you may
provide EPA with information as to why the Agency’s assumptions
require reconsideration. The meeting will not be conducted using
rules of evidence or formal administrative or judicial
prnr dux Th _s. oi e 1 s
has a reasonable basis to perfect a lien based upon CERCLA
Section 107(1).
After reviewing your written submissions, or conducting a
meeting, if one is requested, the neutral EPA official will issue
a recommended decision based on the Lien Filing Record. The
recommended decision will state whether EPA has a reasonable
lOol 13 3/22/003 l4 L
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Supplemental Guidance on Federal Superfund Liens
basis to perfect the lien and will be forwarded to the Agency
official delegated to execute liens for action. You will be
notified of the Agency’s action (whether perfection or the
decision not to perfect) and furnished a copy of the recommended
decision.
Neither you nor EPA waives or is prohibited from asserting
any claims or defenses in any subsequent legal or administrative
proceeding by the submission of information, a request for and
participation at a meeting, or recommended decision by the
neutral EPA official that EPA has a reasonable basis to perfect a
lien.
If you have any questions pertaining to this letter, pLease
contact [ ORC attorney) at 1
Sincerely,
Waste Management Division Director/Regional Counsel/Regional
Administrator
ATTACHMENT
ATTACHMENT 2
MODEL: POST-PERFECTION NOTICE
[ REGIONAL LETTERHEAD]
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION (
[ ADDRESS]
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
[ Date]
[ Name and address of owner of propertyl
RE: (Name and location of the site]
Dear (Name of property owner]
This letter informs you that the United States Envirorunental
Protection Agency (“EPA”) has perfected a lien upon property
located at (street address), the exact legal description of which
is contained in Attachment 1 to this letter. The Property is
part of the [ ] Superfund Site. EPA has determined that you
are the owner of this property (the “Property”). The lien which
EPA has perfected against the Property arises under Section
107(1) of the Comprehensive Environmental Response, Compensation,
and Liability Act (“CERCLA”), commonly known as the “Superfund,”
42 U.S.C. Section 9607(1). The lien is intended to secure
payment to the United States of costs and damages for which you,
as the owner of the Property, would be liable to the United
S t.e s .zmdex e-i i nn l.L.oi ,BCLA. Section 9 60 (a) .
Under ERCLA Sections 107(a) and 101(9), 42 U.S.C. Sections
9607(a) and 9701(9), liable persons include persons who own any
“facility,” including a site or area where a hazardous substance
has been deposited, stored, dispcsed of, or placed, or otherwise
come to be located. EPA has determined that a release or threat
of release of hazardous substances pursuant to CERCLA Section
II ol 13 3/22,01)3 14 PM
-------
Supplemental Guidance on Federal Superfiind Liens
101(22) has occurred at or from the Property. The Property is
part of the [ ] Superfurtd Site, at which [ hazardous substances]
came to be located, and is subject to or affected by a removal or
remedial action. As the owner of a facility, you are a person
liable for all costs of removal or remedial action at the site.
Costs and damages include the costs incurred by the United States
in responding to a release or threat of release at the [
Superfund Site.
The lien arising in favor of the United States on the
Property continues until the liability for the Costs is satisfied
or until the liability for the costs becomes unenforceable
through operation of the statute of limitations in CERCLA Section
113.
On [ date], EPA notified you by certified mail of your
potential liability under CERCLA. You may satisfy the lien
placed upon your property by paying all costs and damages for
which you are liable.
EPA has assembled a Lien Filing Record consisting of
documents relating to its decision to perfect the lien. This
record is kept at the following address, and may be reviewed and
copied at reasonable times by arrangement with:
(Regional Attorney]
[ Address and Telephone Number]
EPA has reviewed the information in the Lien Filing Record
and believes that the Agency has a reasonable basis to believe
that the statutory elements for perfecting a lien are satisfied.
EPA has perfected its lien by filing a notice of lien with [ the
appropriate office within the state (or count y or other
governmental subdivision), as designated by State law, where the
real property is located, or with the District Court of the
United States for the district ir. which the real property is
located). EPA perfected its lien prior to notifying you of its
intention because
You may notify EPA within [ 14 calendar days or other period,
set by the Region] from the date of mailing of this letter in
writing if you believe EPA’s information or determination is in
error. You may also request to appear before a neutral EPA
official to present any information that you have indicating that
EPA did not have a reasonable basis to perfect a lien. You
should describe in your letter or written request your reasons
for believing that EPA did not have a reasonable basis to perfect
its lien, because EPA may, as described below, agree with your
reasons and release its lien without further review or a meeting.
Any written submissions or requests for a meeting should
reference the Superfund Site, be addressed to the above
referenced Regional Attorney, and may include documents or
information which support your contentions.
If EPA receives a written submission or a request for a
meeting from you within (14 calendar days or other period, set by
the Region] from the date of mailing of this letter, Agency staff
J , _ yiew_your submission or request for a meeting. If, after
review and consultation, EPA agrees TE €ffñc Td61 i
a reasonable basis upon which to perfect a lien, EPA will release
its lien, and will so notify you. If EPA disagrees, the written
submission or request will be referred to a neutral EPA official
selected for the purpose of reviewing the submission or for
conducting the meeting, along with the Lien Filing Record.
12of 13 31221003 I4PM
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Supplcmenial Guidance on Federal Superhind Liens
If you have requested an opportunity to appear, a meeting
will be scheduled. You may choose to attend this meeting via
teleconference. The Agency will be represented by its
enforcement staff, including a representative from the Office of
Regional Counsel. You may be represented by counsel at this
meeting.
The meeting will be an informal hearing in which you may
provide EPA with information as to why the Agency’s assumptions
require reconsideration. The meeting will not be conducted using
rules of evidence or formal administrative or judicial
procedures. The sole issue at the meeting would be whether EPA
had a reasonable basis to perfect its lien based upon CERCLA
Section 107(1).
After reviewing your written submissions, or conducting a
meeting, if one is requested, the neutral EPA official will issue
a recommended decision based on the Lien Filing Record. The
recommended decision will state whether EPA had a reasonable
basis to perfect the lien and will be forwarded to the Agency
official delegated to execute liens for action. You will be
notified of the Agency’s action (whether the lien will stay in
place or be released) and furnished a copy of the recommended
decision.
Neither you nor EPA waives or is prohibited from asserting
any claims or defenses in any subsequent legal or administrative
proceeding by the submission of information, a reouest for and
participation at a meeting, or recommended decision by the
neutral EPA official that EPA has a reasonable basis to file a
lien.
If you have any questions pertaining td this letter, please
contact [ ORC attorney) at [ ].
Sincerely,
Waste Management Division Director/Regional Counsel/Regional
Administrator
13o1 13 322003 14 PM
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, Q
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
____ WASHINGTON, D.C. 20460
L PRO
January 10, 2001
OFFICE OF
ENFORCEMENT AND
COMPLIANCE ASSURANCE
MEMORANDUM
SUBJECT: Support of Regional Efforts to Negotiate Prospective Purchaser Agreements
(PPAs) at Superfund Sites and Clarification of PPA Guidance
FROM: Barry Breen, Director Is!
Office of Site Remediation Enforcement
Bruce Gelber, Chief/si
Environmental Enforcement Section
Environment and Natural Resources Division
United States Department of Justice
TO: Superfund Senior Policy Managers (Regions I-X)
Regional Counsels (Regions I-X)
Assistant Chiefs, Environmental Enforcement Section, United States
Department of Justice
Introduction
The Office of Site Remediation Enforcement (OSRE) and the United States Department
of Justice (DOJ) strongly encourage and support ongoing regional efforts to clean up and resolve
liability at Superflind sites that can then, in appropriate circumstances, be available for
productive reuse. After completion of a federal cleanup under the EPA Superfund program, many
Superfund sites have been returned to beneficial use. Historically, sites often remained
underutilized or abandoned due to concerns of lenders, developers, and the general public about
potential liability or residual contamination. As part of its overall effort to reform the Superfund
program, the Agency has made a concerted effort to address this issue. Additionally, EPA works
with other federal agencies and state and local governments that have made “Brownfields”
redevelopment a major goal.’
The safe redevelopment of sites often occurs in the wake of a cleanup under EPA ’s
‘EPA defines “Brownfields” as abandoned, idled, or under-used industrial or commercial
facilities where expansion or redevelopment is complicated by real or perceived environmental
contamination.
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Superfund program. Redevelopment benefits communities by ensuring a protective future
property use and by replacing empty lots and abandoned facilities with new businesses, often
bringing jobs and an increased tax base. Additionally, redevelopment efforts may provide other
public benefits like parks, nature preserves, or playing fields for a community. Reutilization of
formerly contaminated sites also furthers the Agency’s commitment to “Brownfields” by
encouraging property reuse, potentially preserving new undeveloped “Greenfields”.
This document is part of a continuing EPA Region, OSRE, and DOJ effort to support and
build on EPA’s current successes in cleaning up contaminated sites so they can be returned to
productive uses. One vehicle for facilitating the safe reuse of sites is Prospective Purchaser
Agreements (PPAs). This Memorandum is intended primarily for regional attorneys and
program staff involved in evaluating and negotiating PPAs, and for DOJ staff involved. It
should also serve to expedite settlements by providing a common framework of analysis for
EPA, DOJ, and prospective purchasers. 2 It must be read in conjunction with EPA’s “Guidance
on Agreements with Prospective Purchasers of Contaminated Property”, dated May 24, 1995,
(the “1995 PPA Guidance”) and the October 1, 1999, memorandum from OSRE titled
“Expediting Requests for Prospective Purchaser Agreements”, both of which remain in effect. 3
Background
In an effort to promote the negotiation of PPAs, EPA issued the 1995 PPA Guidance,
which partially superceded the previous 1989 policy titled “Guidance on Landowner Liability
under Section 1 07(a)( 1) of CERCLA, j Minimis Settlements }mder Section 1 22(g)( 1 )(B) of
CERCLA, and Settlements with Prospective Purchasers of Contaminated Property”. The 1995
PPA Guidance expanded the circumstances in which EPA will enter into a PPA and has proven
to be successful. Prior to its publication, EPA had entered into only 20 PPAs; between 1995 and
December of 2000, EPA entered into more than 120 additional agreements.
In October 1999, OSRE issued a memorandum building on the success of the 1995 PPA
Guidance by providing the Regions with a revised model PPA agreement and a sample cover
letter and information request. The memo also announced the incorporation of a new PPA
tracking system into the CERCLIS/WasteLAN database to ensure the Agency could evaluate its
responsiveness to PPA requests. Additionally, it established a PPA expediter at both EPA and
2 PPAs are entered into under the authority of the Attorney General of the United States to
compromise and settle claims of the United States. Thus, PPAs can only be entered with the
express concurrence of the Assistant Attorney General.
The 1995 PPA Guidance, and the 1999 memorandum can be found on OSRE’s Web
page at htln://es.ena.gov/oecalosre/DDa.html .
2
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DOJ to ensure PPA issues are identified and resolved quickly. 4
In the five years since the 1995 PPA Guidance, the Agency has gained considerable
experience in developing new approaches to resolving common issues that affect PPAs.
Recently, the Agency established a workgroup of experienced staff, who in consultation with
DOJ, developed this Memorandum to address these common issues by clarifying the 1995 PPA
Guidance in two significant ways.
I. Clarification of Threshold Criteria For Entering Into PPAs
Section ifi of the 1995 PPA Guidance identified five fundamental criteria for evaluating
whether EPA should enter into negotiations for a PPA with a prospective purchaser. These five
criteria are threshold issues that must be analyzed in order to determine if the Agency should
expend its resources negotiating a PPA. Based on EPA’s greater level of experience with PPAs,
this document clarifies the first two of these threshold criteria and explains how they should be
used in making the initial determination of whether EPA will enter into PPA negotiations.
Clarification of Criterion I - Federal Involvement or EPA Action at the Facility
The first threshold criterion discussed in Section ifi of the 1995 PPA Guidance states that
“ [ t]he Agency may consider entering into a PPA at sites listed or proposed for listing on the NPL,
or sites where EPA has undertaken, is undertaking, or plans to conduct a response action.” In
most instances, a PPA is not necessary for sites that do not require significant federal
involvement. For example, at many Brownfields sites a PPA is not necessary because concerns
of prospective buyers regarding contamination or liability can be successfully addressed through
other mechanisms, such as environmental audits, private insurance, an indemnification
agreement, an EPA Comfort/Status Letter, 5 or available state protections. However, in limited
circumstances, the level of federal involvement at certain Brownfields sites may warrant the
negotiation of a PPA. These sites may include those where assessments have been done pursuant
to EPA’s “Targeted Brownfields Assessment” grants program, EPA’s “Brownfields Pilot
Assessment” program, as well as sites where an assessment has been performed and the site is
participating in EPA’s Brownfields Cleanup Revolving Loan Fund. 6 Generally, Regions should
consider PPA requests for these types of sites only if other devices such as Comfort/Status
Presently, EPA’s PPA expediter is Jack Winder at (202) 564-4292, and DOJ’s expediter
is Alan Tenenbaum at (202) 514-5409.
EPA’s Superfünd Comfort/Status Letter Policy can be found at
http:lles.epa.aov/oeca/osre by clicking on Policy and Guidance Documents and then on Liability
under CERCLA enforcement documents.
6 Documents describing these programs and assessments can be found at the Brownfields
Web site address at http://www.epa.gov/swerosps/bf7html-doc .
3
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Letters will not suffice and if sufficient information is known about the site to allow EPA to
apply the 1995 PPA Guidance and this Memorandum. It is in the Region’s discretion to
determine if EPA’s actions at these sites constitute “federal involvement” sufficient to warrant
negotiating a PPA.
Clarification of Criterion 2 - “Direct and Indirect Benefits ”
The second threshold criterion in Section ifi of the 1995 PPA Guidance states that “ [ t]he
Agency should receive a substantial benefit either in the form of a direct benefit for cleanup, or
as an indirect public benefit in combination with a reduced direct benefit to EPA.” However, the
definition and use of the terms “direct and indirect benefits” in the 1995 PPA Guidance is
potentially confusing on two points involving the application of this threshold criterion.
First, the definition of the term “indirect benefits” in the 1995 PPA Guidance included
examples of benefits that should be considered “direct benefits” to EPA. Thus, this
Memorandum includes the following new definitions of the two terms. The new definitions
should be substituted wherever the terms are used in the 1995 PPA Guidance.
“ Direct Benefits ”
In using the term “direct benefits” EPA refers to all the ways a PPA will further
CERCLA’s mandate of protecting human health and the environment. “Direct benefits”
obviously include cleanup work and cost recovery payn ents. However, they also include
any other activities that advance EPA’s CERCLA objectives. Actions such as guaranteed
site access for regulatory personnel and cleanup contractors, controlling or limiting public
access and exposure to the site, institutional controls, and any actions that help facilitate
or maintain a remedy, such as demolishing unsafe structures, may be considered “direct
benefits”. Additional examples include actions that may streamline the cleanup or reduce
the cost of the remedy, restore, preserve, or mitigate damages to natural resources, or in
any way further reduce the current or future risks posed by the site.
“ Indirect Benefits ”
In using the term “indirect benefits” EPA means additional ways a PPA may benefit the
public or a community that are outside EPA’s statutory CERCLA mandate to protect
human health and the environment by responding to a release, or a substantial threat of a
release, into the environment. Examples are the creation or retention of jobs, increasing
the tax base, or the building of a park, library, or a community center. 1
However, if the park, library, or community center was constructed in a manner that
actually reduced future risks at a site, for example a parking lot substituted for part of a remedy
as an effective soil cap, the activity should be considered a “direct benefit” to the extent it
reduces the cost of the remedy.
4
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Second, the 1995 PPA Guidance may be read to suggest that an analysis of a potential
PPA’s “indirect benefits” is applied to both the threshold question of whether EPA should
expend its resources to negotiate a PPA, and also to the determination of what is adequate
consideration for entering into a PPA. This Memorandum clarifies that “indirect benefits”, as
redefined above, should be evaluated only as part of the initial threshold analysis under the
second criterion of Section ifi of the 1995 PPA Guidance regarding whether the Agency should
expend resources negotiating a PPA and not as part of the consideration analysis for PPAs. 8
II. Clarification of the Consideration Analysis
In evaluating adequate consideration for entering into a PPA, EPA recognizes that a
prospective purchaser of a Superfund site is not a liable party under CERCLA except as a result
of its purchasing the property. However, the Agency also recognizes that entering into a
PPA affects EPA’s ability to enforce its CERCLA Section 107(1) lien and may impair its ability
to recover its response costs. 9 This part of the Memorandum is intended to assist Regions in
balancing these points. The goal is to structure the PPA so that neither the buyer or seller of the
property receives an unfair windfall at taxpayer expense)°
Section IV of the 1995 PPA Guidance included a brief discussion of some factors that
may be analyzed in determining appropriate consideration. Based on the Agency’s experience in
implementing that Guidance, this Memorandum provides a new expanded list of factors below
and provides the following general framework for assessing them.
8 ”Indirect benefits”, as redefined above, are not taken into account when analyzing the
amount of consideration EPA requires for a PPA because such benefits may not accrue to the
Agency.
lien provision is designed to facilitate the United States’ recovery of response costs
and prevent windfall. The legislative history states that the lien provision was added to “enable
the United States to recover its response costs through an in rem action against the real property
that is the subject of the response action. Such protection for the United States will also enable it
to recover the increase in land value resulting from the response action, thus preventing unjust
enrichment of the owner.” S. Rep. No.99-Il, at 45 (1985); H.R. Rep. No. 99-253, at 17
(1985) (“Response actions may cause substantial increases in the value of the land on which
these actions are taken. Thus, the purpose of these liens is to ensure that the owners of the
property where a cleanup has occurred will not receive a windfall profit as a result of the
cleanup.”)
case team should generally ensure that the seller does not receive significant
proceeds from the sale which it could disburse or shelter, preventing the Agency from recovering
the funds. Likewise, as set forth in this Memorandum, the case team should also ensure that the
consideration received by EPA for the PPA prevents the buyer from receiving an unfair windfall.
5
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First, obtain a reliable estimate of what the market value of the property would be if the
cleanup were complete. In most cases this estimate should be based on a real estate appraisal by
a trained professional. However, there may be circumstances where other mechanisms such as a
tax appraisal or sufficient information from professional real estate brokers involved in an “arms-
length” transaction may suffice. The appraisal should take into account the costs a purchaser will
incur to maintain the protectiveness of the remedy or to bring the property into compliance with
federal, state or local health and safety requirements. Whether the property will have a limited
future use or reduced productivity as a result of the anticipated final cleanup should also be
factored into the appraisal.
Second, determine whether the property is encumbered with liens that have a superior
status to EPA’s CERCLA Section 107(1) lien. Care should be taken to ensure that previously
filed private party liens are legally valid. For the purposes of determining consideration, EPA’s
final fair market estimate of what the property is worth should generally take into account the
amount necessary to pay off validly held superior liens.
Finally, using the estimated value of the property derived above as a starting point,
analyze the other consideration factors listed below that may be appropriate to the site. As
every site and every potential PPA is unique, not every listed factor may warrant consideration.
In explicit recognition of the flexibility necessary to ensure that each PPA is fairly negotiated, the
factors are not weighted in any prescribed manner. It is left to the assigned case team to
determine how best to balance the various factors to determine what is fair and appropriate
consideration for a PPA. It is anticipated that the basic framework set forth above will provide
structure for an analysis of these factors. Consideration factors may include:
Market Conditions
• what is the nature of the property and the local market;
• is there likely to be more than one prospective future buyer;
• if EPA does not enter into the PPA what is the likelihood there will be another
buyer that will make a substantially better offer before EPA’s lien is extinguished;
• is there sufficient incentive for the parties to go forward with the transaction given
EPA’s consideration request;
if the consideration offer for the PPA is accepted by EPA, will either the seller or buyer
Section IV of the 1995 Guidance specifically mentioned “coupling” an analysis of the
consideration factors with “an examination of any indirect benefits that the Agency may receive”.
Also, Section V of the 1995 Guidance starts with the clause “In light of EPA’s new policy of
accepting indirect benefits as partial consideration...”. As discussed above “indirect benefits”
may not accrue to EPA and should be considered as a threshold criterion and not as a
consideration factor.
6
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receive a significant unfair windfall at taxpayers expense’ 2 ;
• does the continuing cleanup or remedy impede the use of the property in the short
term so that its current value is likely to be less than its final clean value;
• are there greater transaction costs or burdens facing the buyer that it would not
have if it purchased another property such as a “Greenfield”;
Cost Analysis and Consideration of Enforcement Options
• the amount of past and anticipated future costs in cleaning the site;
• whether there are other viable responsible parties whose anticipated contribution
to the cleanup work or response costs should be taken into account;
• the legal risks, if any, associated with enforcing the CERCLA Section 107(1) lien
in an “in rem” legal action;
• the EPA resources necessary to enforce the lien or to reach a different PPA
settlement with another buyer;
Reduced Risks to Public Health and the Environment
• the benefit of any “direct benefits” (as redefined above) associated with the PPA;
• any benefits associated with ensuring the safe reuse of the property where the
threat to human health or the environment could be aggravated by its
abandonment.
Again, not every listed factor is relevant to a particular consideration analysis, and the
list, while based on EPA’s experience with PPAs over the years, is also not necessarily
comprehensive. Regions may consider other site specific factors as appropriate.
in addition, because the overall benefits of a PPA to EPA and a local community can be
substantial, Regions should ensure that analysis of the consideration factors is done in a timely
fashion and that PPAs do not become delayed over minor amounts or issues’ 3 .
12 There may be limited instances where a buyer intends to use the property for less than
its highest possible use. For example, where a non-profit organization or municipality purchases
the property for permanent preservation purposes the buyer may not be receiving a significant
unfair windfall. However, even though EPA should therefore not determine consideration based
on an unfair windfall in such circumstances, EPA must still consider other relevant factors set
forth in the Memorandum in determining appropriate consideration. Thus, EPA still needs to
consider, among other things, the market value of the property and the likelihood of being able to
recover that value from another buyer.
13 There is a Government Performance Results Act (GPRA) requirement that Regions
evaluate PPA requests and complete negotiations in a timely fashion.
7
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Ill. EPA’s new PPA Web Page
Finally, OSRE is pleased to announce the completion of a new Web page that includes
examples of finalized PPAs. The site can be found at httplles.epa.gov/oeca/osre/ppa.html. The
page provides regional staff and the public with ready access to examples of recent PPAs.
* This Memorandum and any internal procedures adopted as a result of its
implementation are intended solely as guidance for employees of the EPA and creates no
substantive rights for any persons. Case specific inquires should be directed to Helen Keplinger
in OSRE’s Regional Support Division at (202) 564-4221. General questions regarding the policy
should be directed to Greg Madden in the Policy and Guidance Branch at (202) 564-4229.
cc: Susan Bromm (OSRE)
Paul Connor (OSRE/PPED)
Sandra Connors (OSRE/RSD)
Lori Boughton (OSRE/PPED)
Jack Winder (OSRE/RSD)
Bruce Kulpan (OSREIRSD)
Earl Salo (OGC)
Steve Luftig (OSWER)
Elaine Davies (OSWER)
Larry Reed (OSWER)
Linda Garczynski (OSWERJOSPS)
Alan Tenenbaum (EESIENRDIDOJ)
PPA Workgroup
8
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NOTES
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MulliDex
Qu ckRefeccpce odex System
‘ l l
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Enforcement of Access
Orders & the PRP Search
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STEPHEN B. HESS
Mr. Hess is an attorney-advisor in the Finance and Operations Law Office, Office of General Counsel,
U.S. EPA, Washington, DC. He is the Office of General Counsel contact for real estate issues,
including property acquisitions, institutional controls, relocations under the Uniform Relocation Act and
takings issues.
Previously, he was an attorney at the firm of McGuire, Woods, Battle and Boothe in Richmond,
Virginia, where he represented developers, lenders, businesses and local governments in a variety of
real estate and corporate transactions.
He received his J.D. from George Mason University School of Law and his B.B.A. from James
Madison University.
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I
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Entry Under CERCLA § 104(e)(3)
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landowners, EPA. contrethors. perfomirng PRPs
•Make .ure purposes of entry are pernutted by CERCLA §
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3
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Getting Access - Issues
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4
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PRPs Obtaining Access
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United States Constitution:
Amendment IV
lhe flght of the people to be secure in their
persons, houses, papers and effeclo. against
unreasonable searches and seizures, shall not be
violated, and no WarTant shall Issue, but upon
probable cause.. and particularly describing the
place to be searched, and the persons or things to
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5
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a. — — • — -
a .S 1 •
a.——
I fl —
— —— ———
Issuing Compliance Orders Under
CERCLA § I 04(e)(5)(A)
Who May Issue? PaCidiri
When May Order, Be C wiawe h na gnasø cp sea w
• — ? old d l m. r moor) il 5md dç .ly
aqofli Ia flanld wVp. a
Additional ‘ —
Requirenients?
— a. wina
aSofudid tou.rd. sod pmoidssdla
twi, that nit d i uNit lDWi li
Compliance Actions Under
CERCLA § I 04(e)(5)(B)
-President may ask Momey Gerard to commence civil action to
compel compliance with requwit for, or order requiring, entry.
information, or inspection/sampling
•For ertryrmspection cases, where Cow) finds reasonable besa to
believe there may be a release or threat of release of a he /p lc,
the Court she) enprsn interference or direct compliance with
orders to pmhibit interference with entryfutspectmn unless tIle
demand for entry/uispection is arbitrary end capricious, an abuse
of disoretmn. or otherwise not in accordance with law
•Court may ssess civil pena y of up to S25,00Wday for each day
of non-compliance with request/order
6
-------
(Article III) Court Order
Adventages/Disadvantagec
• T.m III bi nwrw wsd
• Par . .nd s JdhIga ti u r )t v
- wlu, r7 S w.rd blyald JT u I (DOJ. Caul)
• T.n flu mdDyii .d
- ably . 1YwaTE Miss dIlIlgIubh ssiw
How To Secure
• 11.0
• c_ Ilsd
• M0bl iI (19 M0it.cblTa1
• M blo p.0M (sg. &rvv.Iybisp.sis)
• TI b l
• V . 5.1
• P.5 bbl( NW 1...1Mi P 5SI .l )
Warrant
Adritage&D 1 .advantagea
• Mlyb . wand vs1.twly qil . 5y
• T.ma sub. iiuvwU sd
• cwwdcest ( ad g l piniIl w (a wd ( a ç lgs deIpt(a
- Oily. pXiMi. Foan .yaaa, . . 5 ., anis (l J Ma twa)
- d blfl •Sàus ill iOuI li
• N.y 1.1 swat. ilwt. ..t
• Nip w,wnn. Mu. 1 1Ni 9 5 .V i u.n
How To Secure
• Danywl dslMdwmsfi
• RiM lb Oipstirwl dMlM lbndPç
• US Ntwny .pylnt.wawg
• 5. pill hwVOilb 11.91551.
• Ww 5Ib iq .d
• Sun wand
• R51u,. W .,sr9 11.5
7
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NOTES
-------
MultiDex
Quick Aslernuce Index System
-------
Institutional Controls, the
Model Environmental Easement,
and theNational IC Strategy
-------
GREGORY SULLiVAN
Gregory Sullivan is an attorney in EPA’s Office of Site Remediation Enforcement. His primary areas of
responsibility include institutional controls, post-construction completion, and the reuse of contaminated
properties. Prior to joining EPA, Gregory worked on cleanup and long-term stewardship issues in the
Office of Environmental Management, U.S. Department of Energy. Gregory holds a B.A. from the
Western Washington University, in Bellingham, Washington. He earned his law degree from the
American University, Washington College of Law, in Washington, D.C.
-------
SHERI BIANCH]N
Sheri Bianchin is a Remedial Project Manager and IC Coordinator for Region 5 Superfiind. She
has worked at U.S. EPA for 22 years in RCRA Enforcement, Air Compliance, And Safe Drinking
Water Program.
Sheri received a B.S. in Environmental Engineering from the N.M. Institute of Mining and
Technology. She received her J.D. from IIT- Chicago Kent College of Law in the Environment
and Energy Law Program
-------
EPA’s National Institutional
Control Strategy
National PRP Search Conference
St. Louis, MO
May 2006
Guess the Site?
Prior to the deltvery of this idstrumert of conveyance, the gisnat.
hsrehi has been advised by the grantor that Uie premise. adove
de .c,thal have be e n ._, hi ubofe or hi pal. to the prseait
— isvai thviof watt waste — — from the
maw*cal*ig of chemJca i s by at. grantor at Its phint hi at. CIty
of________ ass pl of the consideration this conveyance and
as a condition thereof, no claim sut action or demand cit any nature
whatsoever si*i ever be made by the grantee, its successors or
assigns. sgsiist the grantor, is & eeeors or aseigns iijity to a
person or persons, i’ ,cludlng death resuling ther*om . or ides of or
damage to property caused by, io connection with or by reason of the
presence of said industrial wastes. It Is further agreed ass condition
hereof that each subsequent conveyance of the aforesaid lands
shed be made subject to the foregoing provisions aid conditions.
Love Canal
Hooker used a good cap
Tried to control future use
with deed notice
• Cap breached within 4
months of sale by School
Board, later by city sewer
department
• Architect and contractor
unaware of conditions
• Lesson: Institutional
controls faded with
respect to land use control
I
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Institutional Controls (ICs) Defined
• Non-engineered administrative or legal controls that help
to minimize the potential for human exposure to
contamination and/or protect the Integnty of a remedy
- LmWngland re5ouJteuSe
- Proeding mbmatan to modify betmv,or
• Four gen&ni categaies of ICe
- Govenvn lai Contiole
• Z lç. &Iie Peii GW LS
- Proprietary CCnIrOie
• Eauvee . eseesy ee
- Enfecement end Pennt Tools with IC Carponenta
- ir ifom atbnal Devices
• ouieex atv y
Key IC Challenges
• CERCLA Section 104(j) AuthorIty
• State Assurances Reqwement
• Real Property Common Law - UECA
• Reel Property Practice - Recordation requirements.
chain of title (priority Issues). Mapping (parcels vs.
containinantlcap locations)
• Role of Local Governments - land use deosions. permit.
zoning and ordinance systems, maIntain key records
(e g.. recorder of deeds, survey plate)
• Enforcement - ICs typically enforced by parties other
than EPA ___________
GAO Study on Institutional Controls ___________
Improved Effectiveness of Controls at Sites Could
Better Protect the Public (1/05)
- Charge: study the effectiveness of land use ___________
restrictions and other institutional controls at
contaminated sites that have been cleaned up under
federal and state programs
- Confirmed internal EPA studies
- Iac l iof lCmfwnatan. ___________
- m pfenentetion. effecineness end enforceabihty questions.
and
- iCe needed at deleted sifes
2
-------
T ’ I ‘ ‘T ’
EPA Strategy to Ensure Institutional
Controls at Superfund Sites (Sept ‘04)
• Joint OSRE/OSRTllRegionaI etbi to evaluate IC inpiemeritatlon at
co ucilon mpIete hiss over next 5 years
— Over 70% at the 970CC itlss have sawdi . that Widuds ICs
• I ey aspects of the Sitasegy:
- Cspsdty buiIdU g(ICTS, va i tW ig. MAGIC)
- ICs at priority and live )W rev, (FYR) sites
- Priority sites include sites where: ICa were not reQuired i i
remedy btA needed, required by remedy bid not implemented,
of proprietary conitois, or site with
• Of 157 priorIty sites -94 need action taken to implement Cs
(e.g., proprietary co tois, new decision doa,nents)
• Of FYR sites - R.gione reviewed spprox. 250 sites in FY05,
moat twve an IC component
tilts of Strategy Review of I
Pnority and Five Year
- — —
Itutional Controls
eviews
11 1 I
or iorer . une .i :
• pe xly oovets. e .
• welaç i o un.iwis ( . .. aid was)
• dr e Itsrs ICe
• ie a PRPs d S*smet•, , e S IC
e __ _
Results of Strategy Review of Institutional Controls
Priority and Five Year Reviews 5
AS 51.* by R.gIom (759)
3
-------
Results of Strategy Review of Institutional Controls
Pñoiity and Five Year Reviews
Fu i. d P.isab W..tI..d by s.. (S?O 1.1.1 sew.)
Future Workload & Challenges:
Regions
New Decision Documents:
• 3*eady sIgned, 25-30 more needed r priority and FYR
• Poterfllsi for many more
Potential Issues Identified by Regional Reviews
• Role of Consent Decrees and Prospective Purchaser
A eements in regard to remedy selection
• ICe on non-source property not owned by PRP ebest efforts.
lend owner itability protections)
• Multi-parcel sites (title searches, goverriniental con o )
Resource Implications
• Prioritizing IC work can be difficuk depending on remedial
construction projects, sep. new starts and mega-sites, and
management
4
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Future Workload & Challenges:
Nationally
• Developing Real Property Expertise (real property law
and practice, use of title evidence, training, resources)
• Coordination and Outreach to EPA and Partners
• Plans to inorease training cifarings and elbts
• Poasdily ruquast an ASTSWMO sub nm 5tea
• Local go%wTvnerd roles
• lmorovmg onordination within EPA (OS WER. FFEO. etc)
• Working in concert with the PCC Strategy and the LTS
Task Force (and OSRTIIOSWER reuse measures)
• Information Management (ICTS update, integration)
• Refining MAG 1Cs role for the coming years
Additional IC Projects and
Documents
• Key FlnaVDraft Policy/Guidance
- EPA moss program guidance for tC lifecycie (evaluating.
selectitig, knpieoenung. montorbtg, and enforcing)
- Enforcement Fret for ICe - March 2006
- P Party Benellciaiy Rights In Ploixiatary Cordrob - Aorll 2004
Development of Policy/Guidance — In progress
- EeadngLtaC deCc a ts
- implinnantatinn and Assurance Plans
- Ensuring Ratable and Efleodve IC. at RCRA Facihites
- Modilv enfacemeni documents to enorova monitoring and
oversight (a g the model RDIRA CD)
• Gathenng Quantitative and Qualitative Date — ICTS and
ICEM for documents at Enforcement-Lead Sites
Communicauon!Education — IC Roundtabte, BF
Conference. NARPM
5
-------
Regional IC Effort
By Shen Bianchin
Region 5 Superfund
IC Coordinator
1 ’run with the land”
• Why, land is the only
thing in the world worth
workin’ for, worth fightin’
for, worth dyin’ for,
because it s the only
thing that lasts.”
• Gerald O’Hara in Gone
With The Wind(1939)
Institutional Controls that
I
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IC Strategy
FYRs
• Approach
— Collecting the Appropriate Information
— Reviewing and Analyzing the Data
— Assessing the Protectiveness of the Remedy
and Making the Protectiveness Determination
- Recommending Follow-Up Actions
• Protectiveness Determinations
• Evaluation of Institutional Controls during
the Five-Year Review
• Other Sites- As Required
A Few Key ICs Issues
• Are ICs in place?
• Are established lCs preventing exposure?
• Is land use consistent with that assumed
by the selected remedy?
• If no Cs have been selected for the site,
what ICs should be considered?
• Are additional ICs needed?
2
-------
IC Evaluations
• Approximately 9— 12 months prior to due date
initiate review process
• Review Site”, Required Remedy. Required ICs
• Evaluate Legal Documents (CDIUAO) for
authority to require PRP work
Review and Analysis of the Data:
General Questions About lCs
• Have problems with ICs resulted in any
exposure?
• Are objectives for ICs clear and comprehensive
and related to RAOs for the site?
• Have ICe been implemented for the site?
• Does the IC descilbe the area and restrictions in
detail?
• How are the ICs monitored and enforced? Is EPA
notified of monitoring results, breaches of ICs,
and enforcement actions?
• Has the sale lease, or subdivision of the property
affected the ICs?
Collecting the Data:
Documents Relevant to ICs
• IC Instruments: Enforcement documents
- AOCs, UAOs, COs
• IC Instruments: Governmental controls
- O,tiinances, permits
• IC Instruments: Proprietary controls
— Easements, covenants
• IC Instruments: Informational Controls
- Advisories, registries, deed notices(co Inued)
3
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Review and Analysis of the Data:
Legal Questions About Cs
• Have controls been executed in a legally
enforceable manner?
• What steps can be taken to ensure that a
proprietary control “runs with the land?”
• Is there a grantee or prior owner that “holds” the
proprietary control?
• Are there prior-in-time encumbrances that may
negatively impact a proprietary control?
• Is EPA a third-party beneficiary for the IC if
allowable under state law?
PRP Involvement —
Monitoring of Institutional
Controls
PRP letter requesting IC
Investigation/Study
IC Data and Official Documents
Title Commitment
Evaluation of Title and Effectiveness
Recommendations
4
-------
• Place the burden of collecting relevant
documents on the PRPs
• EPA, not the PRPs, should determine the
role of lCs in the protectiveness
determination
• Send out PRP Letter requiring their
participation in study! implementation of
Cs
• Follow-up?
Entorcement Documents:
Authority to request IC Study from
PRPs
• Site specific provisions of CD/UAO or
Statement of Work
• “periodic review” provision
• additional work/modification of work
• Operation and Maintenance Plan -
Maintain the effectiveness of the
remedial action
5
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Proprietary Controls — What Are
They?
• Propnetary Controls
- EPA’s generic term to collectively refer to institutional
controls that are based in the law of real property
- EPA’s regulations refer to Deed Restrictions - this Is
not a property law term
• Property Law
- Traditional Common Law
• Eeesmen t s
• Covenants
- Red vsnsntS - edor ab4e at law
- Equitable .eMtuclas - enforceable E equity
- Statutory Law
• Indiana Reetrl ive Covenant
• Deed Recording Statute
Proprietary Controls
I -
Bundle of Sticks Concept
• Buyer takes property subject to superior rights Buyer
rarely starts with a full bundle of property rights sticks
(e.g.. mortgage, utility easements are superior)
• Grantor.Grantee M owner (grantor) can give sticks
away to others (grantee); (e.g. owner may give the right
to build or not build a daycare to an association - the
daycare stick has been transferred to another)
• Declaration by Owner may not run with the land
Sticks cannot simply evaporate just because the owner
says so — owner cannot simply declare that lhis
property shall never be used for a daycare facility.
Doctrine of merger
• ReservatIon of right by Owner In Deed Owner retains
6
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Review of Proprietary
Controls - The Six
Step Process
Review of Proprietary Controls
1. Identify Area that need restrictions (Parcel
Map)
2. Obtain Title Commitment Report for
Parcels that require proprietary controls
3. Final IC Map (Parcels, restricted areas,
existing ICs, Site Features, property
Interests)
4. Review Title Commitment Report
5. IC Evaluation
Title Insurance Title Commitments
Why? Because title commitments:
1. Replicate the title search performed dunng the
typical land transaction.
2. Provide title review in a standard format.
3. Provide comprehensive and reliable title
evidence.
a. Conducted under underwriting guidelines.
b. Tort liability for faulty searches.
7
-------
Step I — Identify Restricted Area
Example
RESTRICTED
AREA
INSTITUTIONAL CONTROL
OBJECTIVE/PERFORMANCE
STANDARD
Soil area remediated
to standards based
on commercial
industrial
Prohibit residential use of the
area
RCRA landfill cap
over former lagoon
Prohibit interference with
surface and subsurface
Step I
• Identify areas that require restrictions based on
current information (maps)
- Remedy Components
- Areas wtth Umitations on Land Use
Step 1(cont.)
Identify and Obtain Best Available
Information on Resthcted Areas
• RODs
• Prior FYRs
• CDs, UAOs, AOCs
• Current Monitoring Information
• As Built Drawings
• Legal Description
8
-------
i
I a ’. E
l x* p ibt1I i
Legal Description — check map
Areas Where ICs are Required
W h l
Step I - Obtain Parcel Maps Overlay of
Affected Properties
In Order to Search Title, Title Firms
Generally Require Two of the Following
Four Items ( ir! th fnllnwinn nri1 r nf
priority)
—Assessor s Parcel Number (APN)
-Address
— Current Owner
9
-------
Using GIS
• Oveilay Site
Map &
Parcel Map
• Rectify Site
Map to
Precisely
Match
Parcel
Step I (cont.)
Identify IC-Affected Properties
Verity Identified
Parcels Prior to
Ordering Title
Sea4.
Step I (cont.)
Identify IC-Affected Properties
Even When
Prior
Efforts Have
Identified Site
Parcels, the IC
Tide Search
Should
Verify Site
Step I (cont.)
Identify IC-Affected Properties
10
-------
Step 2
Ordering Title Commitments
Whether to Order a Title Commitment?
Do Site Raczrds Suggest there it a nesd
a p opde ry ntro1 ? Perform this Qusiy
fe rlacMC
YES ?
Coa h e
Title Commitment — Current
Ownership
=-. - q - . — C. -
— - .— —
— .
Schedule B — existing property
interests
— — —
______ — — —
- --.
-. - -
11
-------
Step 3— Final Map
• Area that needs to be restricted
• Area covered by existing proprietary
controls
• Area impacted by other existing interests
• Site boundaries
• Assessors parcel numbers
Step 4— Title Evaluation
Information
Source: PRPs or Contractor
• Title Company provides Title Commitment
Report for Each Site Parcel
• Copy of all documents referenced in the
title commitment
• Final Map
12
-------
Step 5
Evaluate IC Effectiveness
a.Do recorded ICs
exist for every • RPM (or similar staff)
parcel on the site resPonsible of
which should have Identlf)’lng each
recorded ICs? parCel which sh tjld
have a recorded IC.
ORC responsible for
concluding whether
IC actually exists in
and records .
Step 5
Evaluate IC Effectiveness
2. Does the existing IC •Review of ROD and
implement the IC Risk Assessment to
objectives and ensure that the
rf obje ves are
pa o ance accomplished by the
standards? proprietary control
(e.g., no consumption
of gw no excavation
of soils below 36)
Step 5 Evaluate IC Effectiveness
c. Whether A Future
—=-_
Purchaser Would ——
Receive
Constructive
Notice of the IC.
If the title commitment
lists the IC within
Schedule B, then EPA _____
may conclude that a
future purchaser would
13
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Step 5 Evaluate IC Effectiveness
d. Are ICs Enforceable
a. WhetherlWho is the
Grantee/Covenantee or Otherwise
Possesses the Authority to Enforce the
IC
b.Does the IC Operate as Notice Only.
c. WhetherlWho is the 3rd Party
Benefidary
> Not neceseary but an added layer of
protection
d.Whether/Which Competing
ORC E Ev uate
ctlCfora-e
Step 5
Evaluate IC Effectiveness
4. Whether other
property interests,
especially
affirmative
easements, cover
the same area as
that covered by the
IC.
This is a mapping
exercise (see step 4).
Step 5
Evaluate IC Effectiveness
5. Whether EPA’s
property interest (if
applicable) has been
properly transferred
pursuant to CERCLA
§104(j).
Subsequent
document recorded in
the land records
demonstrating the
transfer of the interest
to another entity (e.g.
the state)
14
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Step 6-IC Plan
Deed Notice Only
Sent Request to Owner to reserve restiictlve
covenant when transfers the property —
included sample deed in request (date)
Title Commitment
Prior In Time Encumbrances
Sent Request to Owner for copies and map
of encumbrances and subrogation
agreements (date)
General Rule
• When land use restrictions are required,
U.S. EPA prefers propnetary controls
(e.g., restrictive covenants).
— Proprietary Controls require that use
restrictions “rUn with the land,” thereby
protecting the remedy subsequent to the sale
of that land.
• Multiple Non-Source
Contamination
15
-------
Concern
Governmental Controls (e.g.,
zoning and ordinances)
• Restrict land across a broad geographic
area.
• Promote enforcement that is more
balanced amongst Federal, State, Local
authorities.
• Promotes efficient communication
between government authorities.
• However, CERCLA sites (e.g., landfifls)
often produce hazardous substance
plumes that contaminate the groundwater
of multiple properties surrounding the
source site.
• Often impractical to require every land
owner to record proprietary controls.
Concern (Cant.)
• Also, when dealing with recalcitrant
owners:
— CERCLA does not permit injunctive relief.
— Unilateral Administrative Orders (UAOs),
requinng proprietary controls, may bring
costly and time consuming claims (e.g., Fifth
Amendment “takings claims).
16
-------
Governmental Controls (Cont.)
When dealing with recalcitrant owners:
- UAOs requiring governmental controls are
less susceptible to costly and time consuming
claims (e.g., Fifth Amendment “takings”
claims).
-
Questions to Ask
• Do existing governmental controls go “far
enough” to address the Superfund
Restrictions?
• Are other governmental agencies aware of
the Superfund issues?
Questions to Ask
• Are there any pre-existing uses that are
incompatible w/ restrictions needed for
protectiveness of the off-property areas?
• Is there a comprehensive plan for land use
and zoning that covers the area
surrounding the site?
17
-------
Questions to Ask
• How do existing governmental entities
enforce the restrictions?
• Do issues such as lack of resources
impact enforcement of restrictions?
• Do we need to enter into a memorandum
of agreement or draft a communication
plan between governmental agencies?
Questions to Ask
• Are there governmental controls available which
are needed to protect the public?
• What are the terms?
• What is the process?
• Who enforces?
IC Options
For sites w/ a fluctuating plume or
uncertainty in the extent of contamination,
it is best to include areas of uncertainty
and dates on maps and to consider these
factors when selecting ICs
• Layering of various ICs or use of a number
of property restrictions may be best when
off-property contamination covers multiple
.
18
-------
IC Options
• Ordinances I Regulations can be used for
the purpose of notifying the public about
contaminated properties and the restricted
uses. It is best when these are specific
and well-written.
• Procedures are available and prescribed
including enforcement.
Other Considerations
• As owners of land that has off-property
contamination are unlikely to be PRPs,
EPA (or the lead Federal Agency at
Federal Facilities) should consider
conducting a “takings” analysis.
• Notice of responsibilities regarding use
restrictions should be given to off-property
owners before any enforcement action is
•EXAM PLES-
19
-------
M/ J-’I-iN(i I t4 (I I KJIRL I U
UNDERSTAND LARGE AREAS
OF CONTAMINATION
:/ J4/\
‘I /—• A)
NL T Ccep 8 .rPtmd ,
ci.sn Up Zonis
1 j
20
-------
21
-------
_____
- I =-
________________ I
-V -—
22
-------
Model Documents??
• There are no true model IC documents
• Documents for state programs and various versions of
UECA documents have added to the need for careful
analysis when reviewing or drafting IC documents.
• The tile of the document can be misleading.
• All IC documents must be tailored to fit the cleanup site.
Variables Include: Property Description, Slte.speclfic
Restrictions. State Law, and the Parties to the
Transaction.
Drafting requires the input of technical and legal
information.
Examples
• Environmental Protection Easement and
Declaration of Restrictive Covenants: from 1998
IC provisions in Model Consent Decree.
• Deed Notice: One party document (the owner),
which does pt run with the land• Indudes
notice to successors.
• S.C. Declaration of Restrictive Covenants:
Based on state regulatory power, not traditionel
real estate rights.
I
-------
ENVIRONMENTAL PROTECTION EASEMENT
AND
DECLARATION OF RESTRICTIVE COVENANTS
1. This Environmental Protection Easement and Declaration of Restrictive
Covenants is made this ____ day of , I 9_, by and between
______________________________________________ (“Grantor”), having an address of
_______________________________________________ and, ______________
_______________________(“Grantee”), having an address of____________________
WITNESSETH:
2. WHEREAS, Grantor is the owner of a parcel of land located in the county of
_______________ State of , more particularly described on Exhibit A attached
hereto and made a part hereof (the “Property”); and
3. WHEREAS, the Property is part of the _________________ Superfund Site
(“Site”), which the U.S. Environmental Protection Agency (“EPA”), pursuant to Section 105 of
the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42
U.S.C. § 9605, placed on the National Priorities List, set forth at 40 C.F.R. Part 300, Appendix
B, by publication in the Federal Register on _________, 1 9_; and
4. WHEREAS, in a Record of Decision dated _________, 19_ (the “ROD”), the
EPA Region — Regional Administrator selected a “remedial action” for the Site, which provides,
in part, for the following actions:
5. WHEREAS, with the exception of_____________________________________
—, the remedial action has been implemented at the Site; and
6. WHEREAS, the parties hereto have agreed 1) to grant a permanent right of
access over the Property to the Grantee for purposes of implementing, facilitating and monitoring
the remedial action; and 2) to impose on the Property use restrictions as covenants that will run
with the land for the purpose of protecting human health and the environment; and
-------
7. WHEREAS, Grantor wishes to cooperate fully with the Grantee in the
implementation of all response actions at the Site;
NOW, THEREFORE:
8. Grant : Grantor, on behalf of itself, its successors and assigns, in consideration of
[ the terms of the Consent Decree in the case of____ v. ____, etc.], does hereby covenant and
declare that the Property shall be subject to the restrictions on use set forth below, and does give,
grant and convey to the Grantee, and its assigns, with general warranties of title, 1) the
perpetual right to enforce said use restrictions, and 2) an environmental protection easement of
the nature and character, and for the purposes hereinafter set forth, with respect to the Property.
9. Purpose : It is the purpose of this instrument to convey to the Grantee real
property rights, which will run with the land, to facilitate the remediation of past environmental
contamination and to protect human health and the environment by reducing the risk of exposure
to contaminants.
10. Restrictions on use : The following covenants, conditions, and restrictions apply
to the use of the Property, run with the land and are binding on the Grantor:
11. Modification of restrictions : The above restrictions may be modified, or
terminated in whole or in part, in writing, by the Grantee. If requested by the Grantor, such
writing will be executed by Grantee in recordable form.
12. Environmental Protection Easement : Grantor hereby grants to the Grantee an
irrevocable, permanent and continuing right of access at all reasonable times to the
Property for purposes of:
a) Implementing the response actions in the ROD, including but not limited to
b) Verifying any data or information submitted to EPA.
c) Verifying that no action is being taken on the Property in violation of the
terms of this instrument or of any federal or state environmental laws or
regulations;
-------
d) Monitoring response actions on the Site and conducting investigations
relating to contamination on or near the Site, including, without limitation,
sampling of air, water, sediments, soils, and specifically, without limitation,
obtaining split or duplicate samples;
e) Conducting periodic reviews of the remedial action, including but not limited
to, reviews required by applicable statutes and/or regulations; and
f) Implementing additional or new response actions if the Grantee, in its sole
discretion, determines i) that such actions are necessary to protect the
environment because either the original remedial action has proven to be
ineffective or because new technology has been developed which will
accomplish the purposes of the remedial action in a significantly more
efficient or cost effective manner; and, ii) that the additional or new response
actions will not impose any significantly greater burden on the Property or
unduly interfere with the then existing uses of the Property.
13. Reserved rights of Grantor : Grantor hereby reserves unto itself, its successors,
and assigns, all rights and privileges in and to the use of the Property which are not
incompatible with the restrictions, rights and easements granted herein.
14. Nothing in this document shall limit or otherwise affect EPA’s rights of entry
and access or EPA’S authority to take response actions under CERCLA, the NCP, or other federal
law.
15. No Public Access and Use : No right of access or use by the general public to any
portion of the Property is conveyed by this instrument.
16. Notice requirement : Grantor agrees to include in any instrument conveying
any interest in any portion of the Property, including but not limited to deeds, leases and
mortgages, a notice which is in substantially the following form:
NOTICE: THE INTEREST CONVEYED HEREBY IS
SUBJECT TO AN ENVIRONMENTAL PROTECTION
EASEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS, DATED _________, 1 9_, RECORDED
IN THE PUBLIC LAND RECORDS ON ____________
19_, IN BOOK _______, PAGE _____, IN FAVOR OF,
AND ENFORCEABLE BY, THE UNITED STATES OF
AMERICA.
-------
Within thirty (30) days of the date any such instrument of conveyance is executed, Grantor
must provide Grantee with a certified true copy of said instrument and 1 if it has been
recorded in the public land records, its recording reference.
17. Administrative lurisdiction : The federal agency having administrative
jurisdiction over the interests acquired by the United States by this instrument is the EPA.
18. Enforcement : The Grantee shall be entitled to enforce the terms of this
instrument by resort to specific performance or legal process. All remedies available
hereunder shall be in addition to any and all other remedies at law or in equity, including
CERCLA. Enforcement of the terms of this instrument shall be at the discretion of the
Grantee, and any forbearance, delay or omission to exercise its rights under this instrument
in the event of a breach of any term of this instrument shall not be deemed to be a waiver by
the Grantee of such term or of any subsequent breach of the same or any other term, or of
any of the rights of the Grantee under this instrument.
19. Damages : Grantee shall be entitled to recover damages for violations of the
terms of this instrument, or for any injury to the remedial action, to the public or to the
environment protected by this instrument.
20. Waiver of certain defenses : Grantor hereby waives any defense of laches,
estoppel, or prescription.
21. Covenants : Grantor hereby covenants to and with the United States and its
assigns, that the Grantor is lawfully seized in fee simple of the Property, that the Grantor has
a good and lawful right and power to sell and convey it or any interest therein, that the
Property is free and clear of encumbrances, except those noted on Exhibit D attached
hereto, and that the Grantor will forever warrant and defend the title thereto and the
quiet possession thereof.
22. Notices : ny notice, demand, request, consent, approval, or communication
that either party desires or is required to give to the other shall be in writing and shall
either be served personally or sent by first class mail, postage prepaid, addressed as follows:
23. General provisions
a) Controlling law : The interpretation and performance of this
instrument shall be governed by the laws of the United States or, if there are no applicable
federal laws, by the law of the state where the Property is located.
-------
b) Liberal construction Any general rule of construction to the
contrary notwithstanding, this instrument shall be liberally construed in favor of the
grant to effect the purpose of this instrument and the policy and purpose of CERcLA. If any
provision of this instrument is found to be ambiguous, an interpretation consistent with the
purpose of this instrument that would render the provision valid shall be favored over any
interpretation that would render it invalid.
c) Severability If any provision of this instrument, or the application of it
to any person or circumstance, is found to be invalid, the remainder of the provisions of this
instrument, or the application of such provisions to persons or circumstances other than
those to which it is found to be invalid, as the case may be, shall not be affected thereby.
d) Entire Acreement : This instrument sets forth the entire agreement of
the parties with respect to rights and restrictions created hereby, and supersedes all prior
discussions, negotiations, understandings, or agreements relating thereto, all of which are
merged herein.
e) No Forfeiture : Nothing contained herein will result in a forfeiture or
reversion of Grantor’s title in any respect.
f) Joint Obligation : If there are two or more parties identified as Grantor
herein, the obligations imposed by this instrument upon them shall’be joint and several.
g) Successors The covenants, terms, conditions, and restrictions of this
instrument shall be binding upon, and inure to the benefit of, the parties hereto and their
respective personal representatives, heirs, successors, and assigns and shall continue as a
servitude running in perpetuity with the Property. The term Grantor”, wherever used herein,
and any pronouns used in place thereof, shall include the persons and/or entities named at
the beginning of this document, identified as Grantor” and their personal representatives,
heirs, successors, and assigns. The term Grantee”, wherever used herein, and any pronouns
used in place thereof, shall include the persons and/or entities named at the beginning of
this document, identified as “Grantee and their personal representatives, heirs, successors,
and assigns. The rights of the Grantee and Grantor under this instrument are freely
assignable, subject to the notice provisions hereof.
h) Termination of Rights and Obligations : A party’s rights and obligations
under this instrument terminate upon transfer of the party’s interest in the Easement or
Property, except that liability for acts or omissions occurring prior to transfer shall survive
transfer.
j) Captions The captions in this instrument have been inserted solely for
convenience of reference and are not a part of this instrument and shall have no effect upon
construction or interpretation.
-------
j) Counterparts The parties may execute this instrument in two or more
counterparts, which shall, in the aggregate, be signed by both parties; each counterpart shall
be deemed an original instrument as against any party who has signed it. In the event of any
disparity between the counterparts produced, the recorded counterpart shall be
controlling. -
TO HAVE AND TO HOLD unto the United States and its assigns forever.
IN WITNESS WHEREOF, Grantor has caused this Agreement to be signed in its name.
Executed this ______ day of ___________, 19.
______ duly commissioned and sworn, personally appeared __________________, known to be the
______________ of _________________, the corporation that executed the foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of said
corporation, for the uses and purposes therein mentioned, and on oath stated that they are
authorized to execute said instrument.
Witness my hand and official seal hereto affixed the day and year written above.
By: ______________________
Its: __________________________
STATE OF ___________
ss
COUNTY OP ________
On this — day of _____, 19_, before me, the undersigned, a Notary Public in and for the
State of __________________________
Notary Public in and for the
State of
My Commission Expires:
This easement is accepted this — day of __________ , 19_.
-------
UNITED STATES OF AI4ERICA
the persons and/or entities named at the beginning of this document, identified as Grantor
and their personal representatives 1 heirs, successors, and assigns.
U.S. ENVIRONMENTAL PROTEC’IION AGENCY
By: _________________________
Attachments: Exhibit A - legal description of the Property
Exhibit B - identification of proposed uses and construction
plans, for the Property
Exhibit C - identification of existing uses of the Property
Exhibit D - list of permitted title encumbrances
-------
DEED NOTICE
This Deed Notice is made this _____ day of_____ 19, by TECNO, INC. (“Owners”),
having an address of , Pennsylvania
I. RECITALS
WHEREAS, Owners are the owner and operator of the former property
(“Property”), a parcel of land and buildings located at County,
Pennsylvania, and legally described in Exhibit 1 to the Agreement and Covenant not to Sue
(“Agreement”); and
WHEREAS, a portion of the Property is included in the Superfund Site (“Site”), which
the United States Environmental Protection Agency placed on the National Priorities List, 40
C.F.R. Part 300, Appendix B, pursuant to Section 105 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, (“CERCLA”), 42 U.S.C. §
9605. The Site is roughly depicted in Exhibit 2 to the Agreement; and
WHEREAS, the Environmental Protection Agency, Region III (“EPA”) issued a Record
of Decision, in which it selected a remedy of the Site; and
WHEREAS, on , EPA issued a for Remedial Design and Remedial Action, which
requires to implement the remedy selected in the ROD by performing certain actions (“Response
Actions”). A copy of the ROD may be obtained by contacting:
1
-------
U.S. EPA, Region III
1650 Arch Street
Philadelphia, PA 19103
Attn: Docket Clerk (3RCOO); and
WHEREAS, a purpose of the ROD is to protect the public health and welfare and the
environment from any imminent and substantial endangerment at or from the Site and to
remediate hazardous conditions at or from the Site which may be presented by any release or
threatened release of hazardous substances at the Site; and
WHEREAS, the Response Actions have yet to be completed at the Site and under Section
121(c) of CERCLA periodic reviews will be conducted at the Site; and
WHEREAS, EPA and Owners have entered into an Agreement and Covenant not to Sue.
and, which releases Owners from liability under Section 107(a) of CERCLA after certain
conditions are fulfilled; and
WHEREAS, in the Agreement, Owners have agreed to ‘(a) authorize access to the Site to
EPA and its authorized officers, employees, representatives and all other persons performing
Response Actions under EPA oversight, for all purposes associated with the Response Actions
and CERCLA requirements and (b) to impose use restrictions on the Property; and
WHEREAS, Owners wish to cooperate fully with EPA
in the implementation of the Response Actions at the Site.
II. RESTRICTIONS AND RESERVATIONS
Tthe Owners file this notice that use of the Property is subject to the advisory set forth
below.
2
-------
1. Purpose : It is the purpose of this instrument to assure that the Property will be used only
for purposes which are compatible with the Response Actions and to ensure that the Property
will not be used in a manner that will pose a threat to human health or the environment.
2. Restrictions on use : The following advisory applies to the use of the Property:
Ground water located at or beneath the Property should not be used
until EPA determines in writing that this water is safe for use as
drinking water.
In addition, see Section County Health Department Regulations.
3. Reserved Rights of Owners : Owners hereby reserve unto themselves, their successors, and
assigns, all rights and privileges in and to the use of the Property which are not incompatible
with the advisory and rights granted herein.
4. Right of Entry provided by Law or Regulation : Nothing in this document shall limit or
otherwise affect EPA’s rights of entry and access provided by law or regulation.
5. No Public Access and Use : This instrument does not grant any right of access or use to
any portion of the Property to the general public.
6. Notice requirements : Owners agree to include in any instrument conveying any interest in
any portion of the Site including, but not limited to, deeds, leases and mortgages, a Disclosure
which is in substantially the following form:
THE INTEREST CONVEYED HEREBY IS SUBJECT TO A DEED
NOTICE AND THE TERMS, CONDITIONS AND RESTRICTIONS
CONTAINED THEREIN, DATED ________. THE DEED NOTICE
WAS RECORDED ON ______ IN THE OFFICE OF THE RECORDER OF
DEEDS FOR COUNTY, PENNSYLVANIA IN BOOK —, PAGE —.
3
-------
Within thirty (30) days of the date any such instrument of conveyance is executed, Owners shall
provide EPA with a certified true copy of said instrument and, if it has been recorded in the
public land records, its recording reference.
8. Notice to Parties : Any notice, demand, request, consent, approval, or communication that
either EPA or Owners desires or is required to give to the other shall be in writing and shall
either be served personally or sent by first class prepaid, addressed as follows:
IN WITNESS WHEREOF, Owner has caused this Notice to be signed in its name.
Executed this ______ day of ___________, 19_.
______ duly conunissioned and sworn, personally appeared __________________, known to be the
______________ of _________________, the corporation that executed the foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of said
corporation, for the uses and purposes therein mentioned, and on oath stated that they are
authorized to execute said instrument.
Witness my hand and official seal hereto affixed the day and year written above.
By:
Its:
STATE OF ___________
ss
COUNTY OF _________
4
-------
On this — day of _____, 19_, before me, the undersigned, a Notary Public in and for the
State of _____________________________
Notary Public in and for the
State of __________
My Commission Expires: _____
This easement is accepted this — day of __________ , 19_.
5
-------
EXAMPLE OF STATUTORY ENFORCEMENT AUTHORITY
[ No Real Estate Rights Transferred]
STATE OF SOUTH CAROLINA )
) DECLARATION OF COVENANTS
COUNTY OF [ NAME OF COUNTY] ) AND RESTRICTIONS
THIS DECLARATION OF COVENANTS AND RESTRICTIONS
(Declaration) is made and entered into this F 1 day of [ Month] 20_, by
[ ABC Corp. 1 [ type of party, i.e., a South Carolina
corporation,” etc.] (hereinafter referred to as U [ Owner] Party”).
RECITALS
WHEREAS, [ Name of Party] is the owner of certain real property in
[ Name of County], South Carolina, more particularly described in Exhibit A
attached hereto and incorporated herein by reference ( uprope,.tyr); and
WHEREAS, contaminants in excess of allowable concentrations for
unrestricted use remain at the Property; and
WHEREAS, the Property is the subject of Voluntary Cleanup Contract
[ VCC-number] (VCC) entered into to by the South Carolina Department of Health
and Environmental Control and [ Company name], pursuant to the
BrownfieldsNoluntary Cleanup Program, S.C. Code Ann. § 44-56-710, et seq.
(2005), the Comprehensive Environmental Response Compensation and Liability
Act (CERCLA), 42 U.S.C. § 9601, et seq., and the South Carolina Hazardous
Waste Management Act (HWMA), S.C. Code Ann. § 44-56-200. [ or other
appropriate statutory authority]
WHEREAS, the Property may be used for certain purposes without further
remediation in accordance with the conditions of the VCC and requires that
certain restrictions are placed on development and use of the Property; and
WHEREAS, [ Name of Party] has agreed to impose restrictions on the
manner in which the Property may be developed (said restrictions to run with the
land and inure to the benefit of and be enforceable by the Department and its
successor agencies); and
-------
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS that [ Name of
Party OWNER hereby declares and covenants on behalf of itself, its heirs,
successors, and assigns that the Property described in Exhibit A shall be held,
mortgaged, transferred, sold, conveyed, leased, occupied, and used subject to
VCC IVCC-number] dated, [ date], to include the following restrictions,
which shall touch and concern and run with the title to the Property.
1. [ Name of Party] hereby covenants for itself, its heirs, successors
and assigns that the Property shall not be used for the following
purposes: residential, agricultural, recreational, child day care
facilities, schools, or elderly care facilities.
2. [ Name of Party] covenants for itself, its heirs, successors and assigns
that [ groundwater beneath the Property may not be used for drinking or
irrigation purposes] without prior approval from the Department or its
successor agency.
3. [ Name of Party] covenants for itself, its heirs, successors and assigns
that [ note any other necessary restrictions here] shall not be
[ used/disturbed] without prior approval from the Department or its
successor agency. (List examples — such as disruption of the cap...)
4. [ Name of Party] covenants for itself, its heirs, successors and assigns
that the Department or its successor agency, and all other parties
performing response actions under the Department’s oversight shall be
provided reasonable access to inspect the property, to oversee the
activities conducted on the property, or to take samples as may be
necessary to enforce this Declaration.
5. The covenants and restrictions set forth herein shall run with the
title to the Property and shall be binding upon [ Name of Party], its
heirs, successors and assigns. [ Name of Party] and its heirs,
successors, and assigns shall include the following notice on all
deeds, mortgages, plats, or any legal instruments used to convey
any interest in the Property (failure to comply with this paragraph
does not impair the validity or enforceability of these covenants):
NOTICE: This Property Subject to Declaration of Covenants
and Restrictions and any subsequent Amendments
Recorded at __________________________
6. [ [ Name of Party], its heirs, successors and assigns shall submit to the
Department a statement of maintenance of the covenants and
restrictions as set forth above annually on May 31 st of every year.
-------
7. This Declaration shall remain in place until such time as the
Department has made a written determination that the covenants and
restrictions set forth herein are no longer necessary. This Declaration
shall not be amended without the written consent of the Department or
its successor agency. -
-------
NOTES
I.
-------
MultjDex
Qu,c Rote /ante lode, S ol ’
-------
Alternative Sites
-------
THOMAS C. MARKS
Mr. Thomas Marks served in a variety of positions in Region 5 of the U. S. Environmental
Protection Agency. Currently, Mr. Marks is Chief of the Remedial Enforcement Services Section
in the Superftrnd Division where his supervises a staff of investigators and enforcement specialists
who support enforcement efforts including locating and determining the liability and viability of
parties responsible for the hazardous materials at superfund sites. Mr. Marks has served in this
position since 1991.
Mr. Marks served as the Enforcement Coordinator for the Region’s Superfiind Division. In this
position he managed the remedial and removal enforcement programs for the Division.
He also was Chief of Remedial Response Section 5 of the Superfiind Division. He supervised a
staff of Remedial Project Managers (RPMs) and toxicologists. The RPMs managed remedial
projects through the entire remedial process from site discovery through long term remedial
actions. The toxicologists functioned as experts in risk assessments. They managed contractors
in preparing risk assessments arid reviewed PRP prepared risk assessments.
Prior to becoming Chief of the Remedial Enforcement Support Section, Mr. Marks was Chief of
the Financial Systems Unit in the Water Division. In this position he supervised a staff of financial
analysts and the Regional Economist engaged in the review and approval of municipal waste
water treatment revenue systems, economic attainability determinations, assessment of the
financial capability of grantees. The sta.ff also evaluated the financial capability of municipalities
and businesses in support of enforcement cases for Water Division programs. He also served as
the Regional Coordinator for the Municipal Wastewater Treatment Facility Needs Survey.
Mr. Marks was also a financial analyst with the construction grant program in Region 5 of the U.
S. Environmental Protection Agency. As a financial analyst, he reviewed and approved municipal
waste water treatment revenue systems and assessed the financial capability of the grant
applicants. He also served as the Region 5 Deputy Coordinator for the Municipal Wastewater
Treatment Facility Needs Survey. He served in these last two positions for over ten years.
He has a Masters Degree in Public Administration from illinois Institute of Technology and a
Bachelor of Arts Decree in Economics from Benedictine University.
-------
SUPERFUND ALTERNATIVE
SITES
SUPERFUND ALTERANTIVE PROCESS
WHAT IS A SUPERFUND
ALTERANTIVE SITE
1
-------
SASITE IS:
• NPL CALIBER
(>28.5 KRS)
• LIABLE, VIALBE PRPs
(WILL DO RESPONSE UNDER CD OR AOC)
• NEEDS LONG-TERM RESPONSE
(REMEDIAL ACTION) ___________
SA SITES COME THROUGH
SITE ASSESSMENT I
OBJECTIVE IS TO ENSURE
SITES ARE ADDRESSED _______
SOMEHOW
2
-------
WORK WITH STATES TO FIND
AND
ADDRESS SITES LINGERING IN
THE PROCESS
• PLACE THESE SITES SOMEWHERE IN
THE PROCESS
• START THEM MOVING AGAIN
SITES ARE ADDRESSED BY:
• LISTING ON NPL
• SUPERFUND ALTERANTIVE PROCESS
• A REMOVAL ACTION
• NFRAP
• STATE VOLUNTARY PROGRAM
STATE INVOVLEMENT IS
CRITICAL
3
-------
STATE INVOLVEMENT
• WORK WITH STATES TO SELECT SA
SITES
• OBTAIN GOVERNOR’S LETTER
AUTHORIZING NPL LISTING
• SAME STATE PATICIPATION IN RIIFS
PROCESS AS NPL SITE
• WHEN PROCEED AS SA SITE WITHOUT
STATE ARGEEMENT MUST ADVISE HO
STATE AND REGION SELECT
SITES WITH POTENTIAL TO
MEET CRITERIA
• NPL CALIBER (>285 HRS)
• PRPs ARE LIABLE AND VIABLE
• RPM DETERMINES SITE NEEDS RA
REGION 5 PROCESS TO
IDENTIFY SA SITES
• POTENTIAL TO MEET CRITERIA
• RPM REVIEW TO DETERMINE RA IS
APROPRIATE
• ENFORCEMENT SPECIALIST LOOKS
FOR PRPs
4
-------
—
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/ •_ - -• fl .1
( E.’—L -- )‘
ENFORCEMENT SPECIALIST
REVIEWS FILE TO ENSURE THE
SITE HAS PRPs
• ENSURE SITE HAS PRPs
• PRELIMINARY CHECK ON LIABILITY
AND VIABILITY
• IDENTILY THE NEEDED PRP SEARCH
TASKS
5
-------
RPM DETERMINES LONG-TERM
RESPONSE IS NEEDED
RPM AND ENFORCEMENT
SPECIALIST AGREE SITE IS SA
• ENFORCEMENT SPECIALIST STARTS
PRP SEARCH
• RPM INITIATES WORK TO PREPARE
FOR RI/FA
RPM WORK TO PREPARE FOR
RI/FS
• PLAN ANY FUNDS NEEDED (ovERsIGHT
AND CONTRACTOR)
• ARRANGE CONTRACTOR SUPPORT
• CONTACT STATE TO ADVISE OF
SCHEDULE AND OPPORTUNITIES FOR
REVIEW/ASSISTANCE.
6
-------
RPM AND ENFORCEMENT
SPECIALIST DECIDE SITE IS NOT
SA
• NO PRPs, BUT LONG-TERM RESPONSE
IS NEEDED — LIST ON NPL
• NO LONG-TERM RESPONSE NEEDED -
REMOVALNOLUNTARY PROGRAM!
NFRAP
• NO PRPs OR LONG-TERM RESPONSE
NEEDED — RETURN TO STATE
SA ENFORCEMENT
NPL ENFORCEMENT
• TITLE SEARCH
• IR LETTERS
• CI WORK
• TOB _________
• OTHER SEARCH TASKS
TRACKING = DRTS
DRTS = DEVELOP READY TO
TARGET SITES _________
7
-------
DRTS - CHARGE/PURPOSE —
• SPONSOR — REMEDIAL BRANCH CHIEF —
RESPONSIBLE FOR REMEDY
SELECTION —
• MOST SITES TRACKED ARE SA
• ENSURE SITES ARE ADDRESSED —
DRTS TASK FORCE —
• MODELED AFTER COST RECOVERY —
TASK FORCE
• COST RECOVERY TASK FORCE IS A —
SUCCESSFUL MODEL
DRTS COMPOSITION —
• REMEDIAL RESPONSE SECTION —
CHIEFS —
• SITE ASSESSMENT STAFF
• ORC SECTION CHIEF —
• REMEDIAL ENFORCEMENT SECTION
CHIEF - CHAIRS —
8
-------
-
—
I I
PML
IQA
.i
———S
—
— —U —
-.U—fl
! PA U
p.— . ——
.rn
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AU-
p lb
—
% . NP
—-t
— —
“U—’
—S
—
(—
—- ‘
—
‘. ‘ . — — ‘,
-I
NEGOTIATIONS FAIL
•
UST ON NPL
•
RETURN TO STATE FOR FURTHER
ACTION
9
V rn
‘—
-
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—
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.-
—I ’ N
—
—U ”
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—
— —
I d LiI
—-
—S
.i ,. rrrn
— “ —
——
—-—a
—S
‘ c i ——
TRACKING SA COSTS
‘
SAME AS OTHER SITES
•
TRACKED IN IFMS
-------
COST RECOVERY
• SAME AS NPL SITES
• ATTORNEYS SAY THEY EXPECT LITTLE
DIFFERENCE
GUIDANCE
• REGIONAL — NOVEMBER 3, 2003
• NATIONAL — JUNE 24, 2002
• NATIONAL — DECEMBER 17, 2003
GUIDANCE ON RI/FS
NEGOTIATIONS FOR
ALTERNATIVE SITES
NOVEMBER 3, 2003
10
-------
RESPONSE SELECTION AND
ENFORCEMENT FOR
SUPERFUND ALTERNATIVE
SITES
JUNE 24, 2002
REVISED RESPONSE
SELECTION AND
ENFORCEMENT FOR
SUPERFUND ALTERNATIVE
SITES
DECEMBER 17, 2003
ALTERNATIVE SITES
(END)
11
-------
NOTES
-------
MultjJ jex
Owc Re/ ;ppcc oeA SVS ( IP
-------
Developing National
Repositories for the Sharing
of Corporate Information
-------
scorr NIGHTINGALE
Mr. Nightingale is an environmental scientist with the Kansas Department of Health and
Environment, Bureau of Environmental Remediation. He joined KDHE in 1989 and has served as
a project manager at CERCLA, RCRA Subtitle C, UST, and solid waste sites. Mr. Nightingale
presently coordinates and leads the efforts of KDHE to identify PRPs for contaminated sites.
-------
Retaining and Sharing
Company PRP Information
Presented by Scott Nightingale
Kansas Dept. of Health & Environment
St. Louis -- May 18, 2006
KDHE PRP Search Effort
• lV Positions
• Saves Multiple Programs
- ERCLA
- N ed R D.
- Bankruptcies _______ -.
— L king Underground Storage Tanks
• Research is peifomted internally, not by contiactors.
• 20-30 Searches Completed Annually
Two Types of PRP Information
Site-Specific Infonnation
- Facility Historical
Operatiots
— Facility Ownership
• Company information
— Current Coiporate Status
— Successor/Merger
Information
- Finaacial Viability
1
-------
Saving Company PRP Information
• What information do we save?
• Where do we keep the PRP information,
and who does that?
• How do we keep track of the PRP
information?
Company PRP Information
Worth Saving
• Save All Factual Information
— Annual Reports to Investors, Shipping
Manifests. Government Documents,
etc.
• Save All Anecdotal Information
— Newspaper Articles, Neighbors’
Complaints. etc.
• Save EVERYTHING!!
PRP Information Repository
• One Central Location for All
PRP Information
— Company Information
— PRP Search Resources
— Copies of PRP Search Memos
• One Person Responsible for
the Repository
2
-------
Managing Company PRP
Information
Organization Options
- By Environmenwi Progriun
- By lnduslzy Group (Ex, - Metal lndusny, Chemical
Manufacturing)
— By Type of Information (Ex Books. Government
Documents Corponuta Publications)
— Other
• Index of Information
• Digitization of Records
EPA and States Sharing
Company PRY Information
Will the state environmental
programs be allowed access to
EPA’s national repository of \7’ I
company information? ___________
• Does EPA want state programs
to add information to the EPA ___________
repository?
Questions??
Scott Nightingale
Environmental Scientisi
KDHE _________
785.296.1666
sniahtin( kdhe.s t ate.ks.us
3
-------
STEVEN ARBAUGIL
Mr. Steven Arbaugh is currently employed at the EPA Region 9 office in San Francisco, CA, as a
civil investigator in the Superftind Division. Mr. Arbaugh has performed civil investigator duties
with the remedial case development team since April, 2001. Starting in July, 1998,.Mr. Arbaugh
was employed as an enforcement officer with the EPA Region 9 Pesticide Program Prior to
working for the EPA at the Region 9 office, Mr. Arbaugh was employed by the Utah Department
of Environmental Quality, Air Division. He was employed as an air quality planner and air quality
enforcement specialist for 9 years
-------
j
Enforcement Support Tracking
System (ESTS) Database
Presented by Steven Arbaugh
Address Verification Research (AVR) Report
- Compiles ccapor e research
Identifies liable companies
Examines viability of each company
Identifies appropriate mailing address
-------
Limitations of the
Address Verification Research (AVR) Report
The corporate information is dated and may require
additional research to update the report
identical company names may appear causing
confusion Careful review of the records should be
made to ascertain that it is the correct company
9.
Address Verification Research (AVR) Report
Information Resources
information resources have changed over time
Development of the world wide web (wWW ) has
contributed greatly to additional resources of information
such as Google and company websites
> information resources change over time and at the
direction of the enforcement coordinator in order to save
money
Current AVR Resources — Full Report
C pctete Data
I- F afl,ous Bus.ness Name F,lmgs
(FBN)
Stale Board of EquabzrEso. (SBE)
Unif aim Comme,cietCoc (UCC)
I. &nknqecy
I Tax Ljens
Reel PW ,pefly Recnids
I. Parade FinderiMsels Seaith
EPA RCM Date
Hoove,s Oelu,e DunE &ndstreel
Dwi&Bn,dst,eet
t. Cainpany Website
l Goo te Sewch Engine
• nJnni - . 59 5 1 ResIde
pee ottawa nines. adeesses
end pssicorr [ any names e tc
Yellow Pages
• Supe,Pages
• Svatohboe,d
( w. n h d. nnn d
0
I ’—
2
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Current AVR Resources — Full Report (cont)
White Pages
• rswatwlriteoaoescom
Black Book Online
• esnwmineli,rocorrdenfire.tem
Other sources - htmJ?w*w nec.oes/edoar/neacclredoar/weiomors.htm
• Secretary of Stale eubeites allow access to book corporate recoarla online
• U.S. Postal Seneca to corlin, the validity of an add-ens ( esw.oses.oost
and can inctrtde the crarnty designation
• &tvi -oFacts Mutlisyslenn and E r ’rvi,oData Ctoarstghoose databases to
ktentty companies eithin EPA ’s system and to tacate facility tmnmes and
ad&esses
Abbreviated AVR Report
> Corporate Data
> Fictitious Business Name Filings (FBN)
> Internet Directory
• SuperPages ( http://superpaaes.coml
• Switchboard ( .switchboard.coml
> Google Search Engine
• w.archive.orti - might provide past officers names, addresses
and past company names, etc.
ESTS Instructions
Mutti-Sito Search Instructions
Webslte Address: bIte /Pwrnesao-oaklan&corn(ostofeoindanim m.asox
Firewall Login
1. lype in yore assnined User Name
2. Type in yore ESTS Passeord
-:
3
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ESTS Instructions (Coot)
Logging fr ito ESTS
3 Type n yto 000yted OPTS (Jeer ID
4 Type in ye, ESTS Poeccord
H
ESTS Instructions (Coot)
Searching for an LC APR Report
5 CtoI i the GbbaI Seo,ch her
0
I1
ESTS Instructions (Cont)
Searching for an LC A PR Report
S Select the lahece pee toeS In ,eaeh er orient a0 dalabeses In condecto
teanchol atana ble databases
P Enter a oeanCb lermer ease raider Pleasa ele, a search shingand doS tile
•Seorch boSon
__ ;J -—
. 5 1
lerol Je
4
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ESTS Instructions (Cont.)
Searching for an LC AVR Report
9. Click on the AVR Reporr
lab at the topol the summary
ç ge to vow the AVR mepart
on that LC
ESTS Instructions (Cont.)
Searching for an LC A tR Report
8. Click on an IC Name to niewa sumnnmry mecard
= = I
_
: (‘
I..
ESTS Instructions (Cont.)
Searching for an LC A W9 Report
50. If store th o r, one Ahlt report is available, a List will be provided- u ljck on the
date of the t re rnion you wish to vram
I . ‘ .r 2 ra.
______________ -.
tir r:kJ: H
2 --’
5
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AVR Report (Cant.)
6
AVR Report
H — ” 4 _4.
1. To relmn to the begin ng meraa. chck on the Cancer b Uon On eoch smeen until
the beginning Inane pose up
12. To log out of the sgstem, clrck the Exir button
P aoe d o tany questIons 00 searching the oyetern to Catherine Soudnnn-
Mohanpoco at Science Apphcotiore lntennahnnol Cnnpoootmn (SAIC), telephone
// 510-ahtt.0835 , entenmon 181.
AVR Report (Cant.)
— ntht 5 n n n —
—
-
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AVR Report (Cont.)
AVR Report (Cont.)
AVR Report (Cant.)
- .
• . .
•
.. .
• •
7
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AVR Report (Cont.)
8
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NOTES
I.
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MultjJ jex
Quick Reference index Syste m
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Katrina & Rita:
Our Role in Responding
to Natural Disasters
-------
HERB MILLER
Herb Miller is a civil investigator with the U.S. EPA Region 4 with 20 years experience in
Superflind enforcement and PRP Search activities.
As a member of the National PRP Search Enhancement Team, Mr. Miller contributed to
development of the 2003 PRP Search Manual.
Mr. Miller has received two bronze metals from EPA and a Commendation from the Department
of Justice for his work on Cost Recovery Cases in Region 4.
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,1 urricanes Katrina I Rita
Unprecedented Disasters
Superfund Enforcement
in areas hit by natural disasters.
o PRP Searches
o Cost Recovery
o Assisting responders
o Other
KATRINA/RITA
EPAs Rule in N 0 . . au
EPA’s Role in Natural Disasters
• Herb Miller — Reg 4
• Pam Travis — Reg 6
• Norma Tharp — Reg 7
• Gretchen Schmidt - Reg 10
1
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¶
2
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:
1
3
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I Herb Miller — Reg 4
POST KATRINA I RITA
PRP SEARCHES
(CASE STUDIES)
I Two Mercury Release
Sites in Gulf Coast MS
• Hancock Co Hg Site — $ 250,000
September 2003
• Bay St Louis Hg Site -— $ 14,000
ci September 2003
U
• On August 29, 2005, the eye of Humcane
Katrina slammed into Hancock County,
Mississippi devastating the small coastal
community with storm surge up to thirty feet
deep. Thousands of homes and close to 1000
businesses were either damaged or
destroyed Five months later, almost half of
the 3800 students in Hancock County’s
schools were still homeless or displaced.
4
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5
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I Hancock County Mercury
Site
• Occurred in Sept 2003
• 4 students played with mercury on school
bus and spread to 3 schools and 2 other
buses.
• The source of the Mercury was not known.
• EPA ’s response cost was approximately
$250,000.
I ’
6
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I PRPs
• Students (Operators)
o Parents responsible?
• The School System (Owner)
• Source of Mercury (Generator)
I PRP SEARCH /ENFORCEMENT
• Interviews
• Information Requests
• Financial Assessments
• Demand Letters
r
I INTERVIEWS
• Source of Mercury was a deceased great
grandfather
• His source of Mercury not determined
• Families heavily impacted by Katrina
• Schools heavily impacted by Katrina
7
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I FINANCIAL ASSESSMENTS
• Expedfted Financial Assessment
o Tax assessor values for real property
o Photographs of real property
8
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Murphy Elementary School
E u
P K ne — Kancock County. Man4ss ocs.
I Student Residence
I __
I Student Residence
17
9
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I Post — Katrina Enforcement
Hancock Co Site
u PRPs identified:
o Owner- School System
a Operator - Students ( Parents responsible?)
o Generator — Student’s Great Grandfather
o Generator — Grandfather’s Source ? —
Not identified
U
a
I Post — Katrina
Hancock Co Site
F ntnrr ’ m3nt
• Operators — Students
Relied on expedited Financial Assessments
to determine Students’ families lacked ability
to pay for dean up, without requesting tax
returns or financial statements.
7
I Post — Katrina Enforcement
Hancock Co Site
• Owner - School system
a Considered as innocent Landowner.
a Also limited ability to pay considering Katrina
impact
a Financial Statements not requested
10
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I Post — Katrina Enforcement
Hancock Co Site
a Generators
a Student’s Great-Grandfather deceased
a Great-Grandfather’s source not identified
I Post — Katrina Enforcement
Hancock Co Site
a Site Costs written off due to
o Owner — Innocent landowner
a Generators — Deceased I not identified
a Operators’ inability to pay.
o No Demand or Information request letters
sent
I Bay St Louis Mercury ________
o Occurred in Sept 2003
o A student admitted to spreading Mercury
around the high school.
a The source of the Mercury was not known.
EPA’s response cost was approximately
$14, 000
11
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I PRPs
• The Student (Operator)
Parents responsible?
• The School (Owner)
• Source of Mercury (Generator)
I PRP Search I Enforcement
• Small $$ Site — Usual Practice
a Information Request Letters
• Source of Mercury
• Finanoal viability
o Demand Letters
a
I Post Katrina Enforcement
Bay St. Louis Site
• Small Dollar Site — limit expense of
resources
• Wrote off costs wlo financial assessments,
information requests, or demand letters.
•1
12
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PAMELA J. TRAVIS
Pamela J. Travis is currently the Practice Group Leader for Superfiind Litigation in the Office of
Regional Counsel, U.S. EPA Region 6, Dallas, Texas. Aftcrjoining the Agency in 1988, she
initially represented EPA in administrative and judicial enforcement actions under the Clean Air
Act, Toxic Substances Control Act, the Resource Conservation and Recovery Act, and the
Federal Insecticide, Fungicide, and Rodenticide Act. Since 1991, her practice has focused
primarily on Superfiind enforcement to secure response costs and injunctive relief from
responsible parties, with occasional forays into assignments in Clean Air Act counseling,
interagency agreements, Brownfields and redevelopment of contaminated properties, state
program review and oversight, Oil Pollution Act issues, and most recently, disaster response
under the Stafford Act. She serves as lead counsel for EPA in case-specific matters with counsel
for the regulated community, the Department of Justice, state Attorneys General, counsel for
other federal agencies interacting with EPA in response work. She also advises program staff and
Regional management on CERCLA issues and mentors junior attorneys on all aspects of
Superfiind work. Ms. Travis is a member of the Environmental Law Sections of the State Bar of
Texas and the Dallas Bar Association.
-------
__ __ A
Murphy Oil Spill Response
Murphy Oil Refinery USA, Inc.
Meraux, Louisiana
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2
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L g
3
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4
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5
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Exhibit B - Ths Courts D,S lgnalsd Class Beunday
I,’:’ / .
.:
‘
Index
D 0
-1.
• 2. 0 5 06
• S. 0 5V4 0 5
• 4. 0 l05
• 5.
• a.
• 1. 0 50 5 06
• 0 50 506
• 9. 0 1I 6
• 10
• 11. 1G 06
• 1 1 026 106
• ia ivi os
• 14 1006
• 15 1211006
• 1$ 01 124/06
• 11 01 /31 106
• 18 04/2506
C06 P s
T* 290-2 (csas) b eases 4/ rs ..
sw sail *om s Pasz . iisa Mu Ci Ru wl7
Visa raTh fran ii s P1r90 Or. d rsuidr auc
01.4 n1 wieod id eases
T* 260-2
09.4
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Vsaejm Pu en ei.des
Renv4 4/as fran asci.
Seem Øuc d run, ruU clii c. . 4.
CU ilu*ig ai .I4 4/iou.. aid fan..
0l. isd .4145 aid hem..
Misphy Cl U9& Sic e dsUn ig ii. es
EPA/LDE0n d iu Ii. es 4/ jasvfr (viiid).
0d.iirsu. Ii ru.db Losabidsa Lalidan CAP.
— — by east ii d is its u. ferdsos l
6
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NORMA TRARP
Ms. Tharp is a paralegal specialist in EPA Region Vii’s Office of Regional Counsel. Ms. Tharp
joined EPA in the Kansas City office in 1997. She works primarily on PRP searches, legal
research, and ability to pay investigations. Prior to joining EPA, Ms. Tharp worked at the FDIC,
IRS, and for a private attorney. Ms. Tharp received her A.A.S.degree in Paralegal Studies from
Penn Valley in Kansas City and her B.A. degree in English from the University of Missouri,
Kansas City.
-------
TAKE A TIP FROM THE
SCOUTS
BE PREPARED FOR PRP SEARCHES
-.._J IN THE EVENT OF A DISASTER OR
NATIONAL EMERGENCY
By Norma
Region VII ,
U
Tharp, Paralegal Specialist,
US EPA
j
Standard Operating Procedures (SOP)
• Calls to the office from On-Scene
Coordinators/Remedial Project Managers
(OSCs and RPMs) in the field
• Provide contact information for a person or
company — access issues
I
-------
Research tools
HURRICANE KATR1NA
• Calls from OSC in Plaquemines Parish in
Southern Louisiana
• Great research tools - Lexis, Googie search
on Internet, www.swltchboard.com . telephone
work. Reference USA
• Standard operating procedures (SOP)
Disaster or National Emergency
•SOPgoesAWOL
• Waste, mold, and (
-------
FiND A PROPERTY
a Find a public property, approximately ten
acres, flat, with good highway access, near or
south of Port Sulphur
• Property needed to store recovered
hazardous waste
NOT A SIMPLE TASK
• No Parish information on line
• Public property not assessed and not
available on any database
• A golf course?
. Google
YOU MAKE THE CALL
a Public officials, levels of cooperaton
• Alternative to public property
-J
3
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PRIVATE PROPERTY?
• Called realtors
• Assessor’s office
a Show me the money
• Eureka!
WHERE DID THIS COME FROM?
a Find owners of abandoned totes and tanks
TELL ME WHAT YOU HAVE
• Minimal information on totes and tanks
• Only a name
• Need to contact owner
e
4
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GOOGLE
• Usually a name and Louisiana search
resulted in information
• Successor search
• Paste and e-mail
OSC/RPM TOOLS
• Computer and cells phones essential
• Remote access that utilizes a security badge.
Security code changes every 30 seconds
(bounces off a satellite) — allows entry to
EPA’s LAN
OSCs TAKE THE INITIATiVE
• Different procedures in emergencies
• Normal procedures disrupted
• Dealing with people they don’t normally work
with from other regions and federal, state,
and local officials
5
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IMPROVEMENT?
• OSCs would like to see attorneys deployed in
a legal capacity to deal with legal issues
HOW TO HELP
I -
• Be prepared to be accessible and provide
timely assistance from the office
• Think outside the box
6
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GRECHEN F. SCHMIDT
Grechen Schmidt is an investigator with Region 10. Grechen started with EPA in 1988 as Community
Involvement Coordinator. She worked on the Bunker Hill Superfund site helping the community
understand the various aspects of the complex investigation underway. Grechen has served as a liaison
between the affected community and the regulatory agencies during the investigation and cleanup of the
Exxon Valdez oil spill, Commencement Bay Superftmd site and the 22 federal facilities Superfund sites
within the region. She helped develop national community involvement guidance for Federal Facilities
and has conducted training for EPA and the Department of Defense on effective community
involvement
Grechen designed and coordinated the implementation procedures for the Superfiind Technical
Assistance Grant program (TAG) in Region 10. She served as EPA’s technical expert on the
Superfiind and TAG programs in a criminal trial, resulting in a fraud conviction, with the defendant
serving a maximum jail sentence.
From 1995 to 1997, Grechen worked as a Compliance Officer in the Drinking Water program
focusing on water systems in Washington state. In addition, she served as the regional contact with
OECA and brought a 20-year old enforcement case close to resolution by combining resources of two
neighboring (and failing) water systems.
Grechen took an IPA to Anchorage to work with the Alaska Department of Environmental
Conservation’s (ADEC) Contaminated Sites program as a community involvement coordinator from
1997 to 1999. ADEC was in the process of re-writing their regulations to include community
involvement. Grechen developed guidance and trained ADEC staff to effectively work with the
community.
Upon returning to EPA Region 10, after a short stay the in community involvement unit, she became an
investigator in Office of Environmental Assessment in 2000. Grechen is the only investigator for Region
providing investigative support the Superfiind program along with all other EPA programs and sister
agencies, including ATSDR, state Department of Labor and Industries, State Patrol, etc.
-------
Grechen Schmidt
• ReglO.
Hurricane Rita
— Hit September 23, 2005
- Category 3 Humcane
— Top Winds 120 mph
—20 foot storm surge
— Made landfall along Texas and Louisiana
border
CAMERON PARISH
• Largest Parish in Louisiana
• Over 284,000 acres of marsh lands
• Population around 10,000
• No incorporated communities
• Communities of Cameron, Hackberry,
Holly Beach and Creole significantly
damaged or destroyed
• Sabine National Wildlife Refuge, along
with several state refuges
I
-------
WHAT IS LEFT OF CAMERON
No One is left
• Most everyone was evacuated
• Cameron Parish authorized parish wide
access to EPA to conduct cleanup
actMties
• Court house was packed up and
evacuated in September; structure flooded
• Court house reopened in February
• 2/3 of structures in county destroyed
HHW and Marsh Operations
• Arrived in September
• HHW pickup started Nov. 1
• Marsh Operations started Jan 1
—Tanks, drums, equipment
— Storm surge
2
-------
Access and Becoming a PRP
• DEQ representative knew everyone!
When we found landowners, we asked for
access
• Crossing Oil pipelines required special
assistance from companies
• Failure to assist resulting in becoming a
PRP for everything on the property.
-------
NOTES
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MultiDex
kAe en cj Swem
-------
Acronyms & Abbreviations
-------
Acronyms and Abbreviations
A
AA Assistant Administrator
MG Assistant Attorney General
AAI All Appropriate Inquiries
ACL Alternate Concentration Limit
ADR Alternative Dispute Resolution
AM Action Memorandum
AO Administrative Order
AOA Advice of Allowance
AOC Administrative Order on Consent
AOC Area of Contamination
AR Administrative Record
ARARs Applicable or Relevant and Appropriate Requirements
ARCS Alternative Remedial Contracts Strategy
ASTSWMO Association of State and Tribal Solid Waste Management Organizations
AlP Ability to Pay
B
BFPP Bona Fide Prospective Purchaser
BIA Bureau of Indian Affairs
BLM Bureau of Land Management
BPA Blanket Purchase Agreement
BRAC Base Realignment and Closure
BUREC Bureau of Reclamation
C
CA Cooperative Agreement
CM Clean Air Act
CAG Community Advisory Group
CBI Confidential Business Information
CD Consent Decree
CD ROM Compact Disk Read-Only Memory
CEC CERCLA Education Center (OSWER)
CERCLA Comprehensive Environmental Response, Compensation and Liability Act of 1980
CERCLIS CERCLA Information System
CFR Code of Federal Regulations
CI Civil Investigator
CIC Community Involvement Coordinator
CLP Contract Laboratory Program
CO Contracting Officer
COl Conflict of Interest
COR Contracting Officer’s Representative
CR Community Relations
CR Cost Recovery
CRC Community Relations Coordinator
CRC Cost Recovery Coordinator
CRP Community Relations Plan
CWA Clean Water Act
-------
D
DA Deputy Administrator
DAA Deputy Assistant Administrator
D&B Dunn and Bradstreet
DCN Document Control Number
DD Division Director
DFO Designated Federal Official
DOD Deputy Office Director
DOD Department of Defense
DOE Department of Energy
001 Department of Interior
DOJ Department of Justice
DOT Department of Transportation
DPO Deputy Project Officer
DQO Data Quality Objective
E
EDGAR Electronic Data Gathering, Analysis, and Retrieval
EE/CA Engineering Evaluation/Cost Analysis
EJ Environmental Justice
EMSL Environmental Monitoring and Systems Laboratory
ENRD Environment and Natural Resources Division (DOJ)
EPA Environmental Protection Agency
EPAAR EPA Acquisition Regulation (Manual)
EPCRA Emergency Planning and Community Right-to-Know Act
EPIC Environmental Photographic and Investigation Center
EPM Enforcement Project Manager
EPS Environmental Protection Specialist
ERCS Emergency Response Cleanup Services
ERNS Emergency Response Notification System
ERS Environmental Response Services
ERT Environmental Response Team
ESAT Emergency Services Assistance Team
ESD Environmental Services Division
ESD Explanation of Significant Difference
ESI Expanded Site Investigation
ESS Enforcement Support Services
F
FACA Federal Advisory Committee Act
FAR Federal Acquisition Regulation
FEMA Federal Emergency Management Agency
FFA Federal Facility Agreement
FFEO Federal Facilities Enforcement Office (OECA)
FIFRA Federal Insecticide, Fungicide, and Rodenticide Act
FINDS Facility Index System
FMD Financial Management Division
FOIA Freedom of Information Act
FR Federal Register
FRC Federal Records Center
FS Feasibility Study
FSAP Field Sampling and Analysis Plan
FTE Full-Time Equivalent
-------
FUDS Formerly Used Defense Sites
FWPCA Federal Water Pollution Control Act
FY Fiscal Year
G
GAAPs Generally Accepted Accounting Principles
GAAS Generally Accepted Accounting Standard
GAO General Accounting Office
GFO Good Faith Offer
GIS Geographic Information System
GNL General Notice Letter
GPRA Government Performance and Results Act
GSA General Services Administration
H
HASP Health and Safety Plan
HAZWOPER Hazardous Waste Operations and Emergency Response
HQ Headquarters
HRS Hazard Ranking System
HSWA Hazardous and Solid Waste Amendments (RCRA)
I
lAG Interagency Agreement
Cs Institutional Controls
IFMS Integrated Financial Management System
lG Inspector General
IGCE Independent Government Cost Estimate
IMC Information Management Coordinator
L
LAN Local Area Network
LDR Land Disposal Restrictions
LOE Level of Effort
LSI Listing Site Inspection
LTRA Long-Term Response Action
LUST Leaking Underground Storage Tank
M
MARS Management and Accounting Reporting System
MCL Maximum Contaminant Level
MCLG Maximum Contaminant Level Goal
MOA Memorandum of Agreement
MOU Memorandum of Understanding
MSDSs Material Safety Data Sheets
MSCA Multi-Site Cooperative Agreement
MSW Municipal Solid Waste
MUNIS Municipalities
-------
N
NAAG National Association of Attorneys General
NARPM National Association of Remedial Project Managers
NBAR Non-Binding (Preliminary) Allocation of Responsibility
NCLP National Contract Laboratory Program
NCP National Contingency Plan
NEIC National Enforcement Investigations Center
NEJAC National Environmental Justice Advisory Council
NEPA National Environmental Policy Act
NESHAPS National Emissions Standards for Hazardous Air Pollutants
NETI National Enforcement Training Institute (OECA)
NFRAP No Further Remedial Action Planned
NOAA National Oceanic and Atmospheric Administration
NOSC National Association of OSC5
NOV Notice of Violation
NPDES National Pollution Discharge Elimination System
NPL National Priorities List
NRC National Response Center
NRC Nuclear Regulatory Commission
NRD Natural Resource Damages
NRT National Response Team
NTC Non-Time-Critical (Removal)
NTIS National Technical Information Service
0
O&F Operational and Functional
O&M Operation and Maintenance
OAM Office of Acquisition Management
CARM Office of Administration and Resources Management
CD Office Director
ODCs Other Direct Costs
OECA Office of Enforcement and Compliance Assurance
OEJ Office of Environmental Justice
OERR Office of Emergency and Remedial Response (now known as OSRTI)
0CC Office of General Counsel
OIA Office of International Activities
OIG Office of the Inspector General
0MB Office of Management and Budget
OPA Oil Pollution Act of 1990
ORC Office of Regional Counsel
ORD Office of Research and Development
OSC On-Scene Coordinator
OSHA Occupational Safety and Health Administration
OSRE Office of Site Remediation Enforcement (OECA)
OSRTI Office of Superfund Remediation and Technology Innovation (formerly known as OERR)
OSW Office of Solid Waste (OSWER)
OSWER Office of Solid Waste and Emergency Response
OTIS On-Line Targeting Information System
OU Operable Unit
-------
P
PA Preliminary Assessment
PNSI Preliminary Assessment/Site Investigation
PCB Polychlorinated Biphenyl
PCOR Preliminary Close-Out Report
PNRS Preliminary Natural Resources Survey
P0 Project Officer
POLREP Pollution Report
P01W Publicly-Owned Treatment Works
PPA Prospective Purchaser Agreement
PPB Parts per Billion
PPED Policy and Program Evaluation Division (OSRE)
PPM Parts per Million
PR Procurement Request
PRP Potentially Responsible Party
PRSC Post-Removal Site Control
Q
QA Quality Assurance
QA/QC Quality Assurance/Quality Control
QAPP Quality Assurance Project Plan
QC Quality Control
R
R&D Research and Development
RA Remedial Action
RA Regional Administrator
RAC Response Action Contractor
RACS Response Action Contracting Strategy
RCMS Removal Cost Management System
RCRA Resource Conservation and Recovery Act
RCRAInfo Resource Conservation and Recovery Act Information
RD Remedial Design
RD/RA Remedial Design/Remedial Action
RDT Regional Decision Team
RI Remedial Investigation
RIIFS Remedial Investigation/Feasibility Study
ROD Record of Decision
RODS Record of Decision System
RP Responsible Party
RPM Remedial Project Manager
RPO Regional Project Officer
RQ Reportable Quantity
RRT Regional Response Team
RSD Regional Support Division (OSRE)
RSE Removal Site Evaluation
RSI Removal Site Inspection
RTP Research Triangle Park, North Carolina
-------
S
SACM Superfund Accelerated Cleanup Model
SAM Site Assessment Manager
SAP Sampling and Analysis Plan
SARA Superfund Amendments and Reauthorization Act of 1986
SAS Special Analytical Services
SAS Superfund Alternative Site
SBA Small Business Administration
SBLR&BRA Small Business Liability Relief and Brownfields Revitalization Act (commonly referred to
as the ‘Brownfuelds Amendments”)
SBREFA Small Business Regulatory Enforcement Flexibility Act
SCA State Cooperative Agreement
SCAP Superfund Comprehensive Accomplishments Plan
SCORE$ Superfund Cost Organization and Recovery Enhancement System
SDWA Safe Drinking Water Act
SEE Senior Environmental Employee
SEPs Supplemental Environmental Projects
SESS Superfund Enforcement Support Service
SETS Superfund Enforcement Tracking System
SF Superfund
SI Site Inspection
SMOA State Memorandum of Agreement
SNL Special Notice Letter
SOL Statute of Limitations
SOP Standard Operating Procedure
SOW Scope of Work
SOW Statement of Work
SREA Superfund Recycling Equity Act
SSC Superfund State Contract
SSI Screening Site Investigation
STARS Strategic Targeting Activities Reporting System
START Superfund Technical Assessment and Response Team
SWDA Solid Waste Disposal Act
T
TAG Technical Assistance Grant
TAT Technical Assistance Team
TBC To Be Considered (Material)
TBD To Be Determined
TC Time-Critical (Removal)
TCLP Toxicity Characteristic Leaching Procedure
TDD Technical Directive Document
TDD Telecommunications Device for the Deaf
TDM Technical Direction Memorandum
110 Technology Innovation Office (OSWER) (now known as TIP)
TIP Technology Innovation Program (OSWER) (formerly know as TlO)
TRI Toxic Release Inventory
TSCA Toxic Substances Control Act
TSDF Treatment, Storage and Disposal Facility
-------
U
UAO Unilateral Administrative Order
UCC Uniform Commercial Code
USACE U.S. Army Corps of Engineers
USC U.S. Code
USCG U.S. Coast Guard
USDA U.S. Department of Agriculture
USFWS U.S. Fish and Wildlife Service
USGS U.S. Geological Survey
UST Underground Storage Tank
w
WA Work Assignment
WACR Work Assignment Completion Report
WAF Work Assignment Form
WAM Work Assignment Manager
WasteLAN Waste Local Area Network
-------
MultjJ jex
lade System
-------
Glossary
-------
Glossary
Administrative Order on Consent (AOC): A legal agreement signed by EPA and an individual,
business, or other entity through which the entity agrees to take an action, refrain from an activity,
or pay certain costs. It describes the actions to be taken, may be subject to a public comment period,
applies to civil actions, and can be enforced in court. AOCs are most commonly used for removal
actions and RIIFSs, but may be used for de minimis and cost recovery settlements.
Administrative Record (AR): The body of documents that “forms the basis” for the selection of
a particular response at a site. For example, the AR for remedy selection includes all documents that
were “considered or relied upon” to select the response action. An AR must be available at or near
every site to permit interested individuals to review the documents and to allow meaningful public
participation in the remedy selection process. This requirement does not apply to other ARs, such
as those for deletion.
Administrative Subpoena: A command issued by EPA requiring testimony and, if necessary, the
production of documents deemed necessary to the administrative investigation of a site. CERCLA
section 1 22(e)(3)(B) authorizes the issuance of administrative subpoenas as is “necessary and
appropriate” to gather information to perform a non-binding preliminary allocation of responsibility
or “for otherwise implementing CERCLA section 122.” No legal mandate prohibits the use of an
administrative subpoena as an initial information gathering tool; however, the Agency prefers using
104(e) requests before issuing administrative subpoenas.
All Appropriate Inquiries: The inquiries that a landowner must make into the previous ownership
and uses of a facility in order to claim the innocent landowner, contiguous landowner, or bona fide
prospective purchaser defense to CERCLA liability. Standards and practices for conducting all
appropriate inquiries were published in the Federal Register (70 Fed. Reg. 66069-66113) on
November 5, 2005 as 40 CFR Part 312. These standards and practices also apply to persons
conducting site characterization and assessments with the use of grants awarded under CERCLA
section 1 04(k)(2)(B).
Alternative Dispute Resolution (ADR): A process that allows parties to resolve their disputes
without litigating them in court. ADR involves the use of neutral third parties to aid in the resolution
of disputes through methods that include arbitration, mediation, mini-trials, and fact finding.
Arbitrary and Capricious: Characterization of a decision or action taken by an administrative
agency or inferior court meaning willful and unreasonable action without consideration or in
disregard of facts or without determining principle. Under CERCLA section 1 30(j)(2), a court ruling
on a challenge to a response action decision will apply the arbitrary and capricious standard of
review.
Arbitration: An alternative dispute resolution technique that involves the use of a neutral third
party to hear stipulated issues pursuant to procedures specified by the parties. Depending upon the
agreement of the parties and any legal constraints against entering into binding arbitration, the
decision of the arbitrator may or may not be binding.
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Brownfields: CERCLA section 101(39), as amended by the Small Business Liability Relief and
Brownfields Revitalization Act, defines “brownfield site” in general as “real property, the expansion,
redevelopment, or reuse of which may be complicated by the presence or potential presence of a
hazardous substance, pollutant, or contaminant.” The term does not include:
a facility that is the subject of a planned or ongoing removal action under CERCLA;
a facility that is listed or proposed for listing on the National Priorities List (NPL);
a facility that is the subject of a unilateral administrative order, a court order, an order of
consent orjudicial consent decree that has been issued to or entered into by the parties under
CERCLA, the Solid Waste Disposal Act (SWDA), the Federal Water Pollution Control Act
(FWPCA), the Toxic Substances Control Act (TSCA), or the Safe Drinking Water Act
(SDWA);
a facility that is subject to corrective action under SWDA section 3004(u) or 3008(h), and to
which a corrective action permit or order has been issued or modified to require the
implementation of corrective measures;
a facility that is a land disposal unit with respect to which a closure notification under Subtitle
C of the SWDA has been submitted, and closure requirements have been specified in a closure
plan or permit;
a facility that is subject to the jurisdiction, custody, or control of a department, agency, or
instrumentality of the United States for an Indian tribe;
a portion of a facility at which there has been a release of polychiorinated biphenyls (PCBs),
and that is subject to remediation under the TSCA; or
a portion of a facility, for which portion, assistance for response activity has been obtained
under Subtitle I of SWDA from the Leaking Underground Storage Tank Trust Fund
established under section 9508 of the Internal Revenue Code of 1986.
Cash Out: A settlement that requires PRPs to provide up-front financing for a portion of the
response action, rather than performing the work themselves. There are several types of cash-out
settlement. A mixed-funding cash-out settlement requires the settling PRP to provide a substantial
portion of the total response costs whereas a de minimis cash-out settlement requires a minor portion
of the response costs to be paid by the settling PRPs.
CERCLA 106(b) Reimbursement Petition: Petition by an entity, which has complied with a
unilateral administrative order, requesting reimbursement from EPA for reasonable costs plus
interest of conducting a response action. A person may be entitled to reimbursement if the person
can establish that he or she is not liable for response costs under CERCLA section 107(a) or if the
person can demonstrate that the Agency’s selection of the response action was arbitrary and
capricious or was otherwise not in accordance with law.
CERCLIS: The acronym for the Comprehensive Enforcement Response, Compensation, and
Liability Information System; a national information management system for the CERCLA program.
CERCLIS inventories and tracks releases, accomplishments, expenditures, and planned actions at
potential and actual Superflind sites.
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Cleanup Activities: Actions taken to deal with a release or threatened release of a hazardous
substance that could affect humans or the environment. The term “cleanup” is sometimes used
interchangeably with the terms remedial action, removal action, response, or corrective action.
Comment Period: Period provided for public to review and comment on a proposed EPA action,
rulemaking, or settlement. -
Community Relations (Involvement): EPA’s program to inform and encourage public
participation in the Superfund process and to respond to community concerns and incorporate them
into the Agency decision-making process.
Community Relations (Involvement) Coordinator (CRC or CIC): Lead Agency staff who works
to involve and inform the public about the Superfund process and cleanup actions.
Community Relations Plan (CRP): A document that identifies techniques used by EPA to
communicate effectively with the public during the Superfi.ind cleanup process at a specific site.
This plan describes the site history, the nature and history of community involvement, and concerns
expressed during community interviews. Additionally, the plan outlines methodologies and timing
for continued interaction between the Agency and the public at the site.
Consent Decree (CD): A legal document, approved by a judge, that formalizes an agreement
reached between EPA and one or more potentially responsible parties (PRPs) outlining the terms
under which that PRP(s) will conduct all or part of a response action, pay past costs, cease or correct
actions or processes that are polluting the environment, or comply with regulations where failure to
comply caused EPA to initiate regulatory enforcement actions. The CD describes the actions PRPs
will take, is subject to a public comment period prior to its approval by a judge, and is enforceable
as a final judgment by a court.
Contribution: A legal principle according to which an entity can seek to recover some of the
response costs for which it has already resolved liability with the United States. For example, when
several PRPs are liable for a hazardous substance release, EPA is not required to pursue all of the
PRPs. If EPA settles with or wins its case against a subset of PRPs, then the right of contribution
enables the PRPs (i.e., the settling PRPs or those against whom a judgment is rendered) to seek
recovery of a proportional share from other PRPs who were not named as defendants in EPA’s suit
or settlement, but who nonetheless contributed to the release.
Contribution Protection: A statutory provision that provides that any PRP who resolved its
liability to the United States in an administrative or judicially approved settlement is not liable to
other PRPs for claims of contribution regarding matters addressed in the settlement.
Cooperative Agreement (CA): Mechanism used by EPA to provide Fund money to States,
political subdivisions, or Indian tribes to conduct or support the conduct of response activities.
Subpart 0 of the NCP, 40 CAR Part 35, outlines specific response actions that may be conducted
using CA funds.
Cost Recovery: A process by which the U.S. government seeks to recover money previously
expended in performing any response action from parties liable under CERCLA section 107(a).
Recoverable response costs include both direct and indirect costs.
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Covenants Not to Sue: A contractual agreement, such as those authorized by CERCLA section
122(f) and embodied in a consent decree or administrative order on consent, in which the Agency
agrees not to sue settling PRPs for matters addressed in the settlement. EPA’S covenant not to sue
is given in exchange for the PRPs’ agreement to perform the response action or to pay for cleanup
by the Agency, and does not take effect until PRPs have completed all actions required by the
consent decree and administrative order on consent.
Covenants not to sue are generally given in either consent decrees or administrative orders. Under
CERCLA, the use of covenants not to sue is discretionary. In effect, the Agency is authorized to
agree to such a release of future liability only if the terms of the covenant include “reopeners.”
Declaratory Judgment: A binding adjudication of rights and status of litigants. Within the context
of CERCLA, the United States may file a claim seeking declaratory judgment on liability for past
and future response costs at the site. lfdeclaratory judgment on liability is granted, the United States
does not have to prove liability in any future action with the defendant.
Defendant: A person against whom a claim or charge is brought in a court of law.
Demand Letter: A written demand for recovery of costs incurred under CERCLA. The primary
purposes of written demands are to formalize the demand for payment of incurred costs plus future
expenditures, inform potential defendants of the dollar amount of those costs, and establish that
interest begins to accrue on expenditures. A demand letter may be incorporated into the special
notice letter.
De Micromis Exemption: CERCLA section 107(o), as amended by the Small Business Liability
Relief and Brownfields Revitalization Act, provides that in general, a party shall not be liable under
CERCLA section 107 if it can demonstrate that the total amount of the material containing
hazardous substances that it generated and arranged for disposal at, or accepted for transport to, an
NPL site was less than 110 gallons of liquid materials or less than 200 pounds of solid materials,
unless those substances contributed significantly to the cost of the response action or natural resource
restoration with respect to the facility; or the party has been uncooperative with EPA’s response
actions at the site; or the party has been convicted of a criminal violation for the conduct to which
the exemption would apply.
De Minimis Contributor: PRPs who are deemed by the settlement agreement to be responsible for
only a minor portion of the response costs at a particular facility. A determination of a PRP’s
responsibility is made based on the volume, toxicity, or other hazardous effects in comparison with
other wastes at the facility. CERCLA section 1 22(g)( I )(A) expressly defines de minimis
contributor.
De Minimis Landowner: PRPs who are deemed by the settlement agreement to be past or present
owners of the real property at which the facility is located who did not conduct or permit the
generation, transportation, storage, treatment or disposal of any hazardous substance at the facility,
did not contribute to the release or threat of release of a hazardous substance at the facility through
any act or omission, and had no actual or constructive knowledge that the property was used for the
generation, transportation, storage, treatment, or disposal of any hazardous substance at the time of
purchase. CERCLA section 1 22(g)( 1 )(B) expressly defines de minimis landowner.
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De Minimis Settlement: An agreement, either administrative or judicial, authorized by CERCLA
section 122(g), between EPA and PRPs for a minor portion of response costs.
De Novo: Generally, a new hearing or a hearing for the second time. At a de novo hearing, the
court hears the case as the court of original and not appellate jurisdiction. Under CERCLA, for
example, a judge may hear a case de novo if the administrative record is found to be incomplete or
inaccurate. Such a hearing would allow judicial review that is not limited to the administrative
record. A potential result of a de novo trial could be the court selecting the remedy.
Discovery: A pre-trial procedure that enables parties to learn the relevant facts about the case. The
Federal Rules of Evidence provide for extremely broad discovery. The basic tools of discovery are
depositions, interrogatories, and requests for production of documents. One of the few limitations
on the scope of discovery is that the material sought must be relevant to the subject matter of the
pending suit, or likely to lead to the production of relevant material.
Easement: A right afforded to an entity to make limited use of another’s real property. An easement
is one form of institutional control that may be required at a Superfund site if all the hazardous
substances cannot be removed from the site. Easements may include limiting access or control of
surface activities.
Eminent Domain: The power to take private property for public use. Under the U.S. Constitution,
there must be just compensation paid to the owners of this property. EPA exercises its power of
eminent domain through the process of condemnation.
Enforcement Actions: EPA, state, or local legal actions to obtain compliance with environmental
laws, rules, regulations, or agreements, or to obtain penalties or criminal sanctions for violations.
Environmental Justice (EJ): The fair treatment of people of all races, incomes, and cultures with
respect to the development, implementation, and enforcement of environmental laws, regulations,
and policies. Fair treatment implies that no person or group should shoulder a disproportionate share
of negative environmental impacts resulting from the execution of environmental programs.
Explanation of Significant Difference (ESD): A document regarding a significant change to the
record of decision when new information is discovered about a site or difficulties are encountered
during the remedial design/remedial action phase of cleanup. An ESD is appended to the
administrative record to inform the public of any significant changes that are being made to the
selected remedy.
Extraordinary Circumstances: Situations that justify the deletion of a standard reopener in a
consent decree. This release is granted infrequently and is given in response to unusual conditions
related to liability, viability, or physical circumstances.
Federal Lien: A lien in favor of the United States authorized by CERCLA section 107(1) that may
be imposed upon a PRP’s property subject to a response action. The lien arises when the PRP
receives written notice of its potential liability for response costs under CERCLA, or the Agency
actually incurs response costs at a particular site. The lien continues until the PRP’s liability is fully
satisfied or the claim becomes unenforceable by operation of the statue of limitations.
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Federal Register: A federal government publication that includes pmposed regulations, responses
to public comments received regarding proposed regulations, and final regulations. The Federal
Register is published every working day by the Office of Federal Register, National Archives and
Records Administration, Washington, DC 20408. The Federal Register publishes regulations and
legal notices issued by federal agencies. These include presidential proclamations and executive
orders, federal agency documents required by Congress to be published, and other federal agency
documents of public interest. The Federal Register is available to the public through public libraries
that are federal depositories, law libraries, and large university libraries.
Force Majeure: A clause common to construction contracts which protects the parties in the event
that a portion of the contract cannot be performed due to causes that are outside of the parties’control
(i.e., problems that could not be avoided by the exercise of due care, such as an act of God). These
causes are known as force majeure events. Force majeure provisions are included in administrative
orders on consent and consent decrees. These provisions stipulate that the PRPs shall notify EPA
of any event that occurs that may delay or prevent work and that is due to force majeure. Two
examples offorce majeure may be raised as defenses to liability. CERCLA section 107(b) releases
from liability any person who can establish by a preponderance of the evidence that the release or
threat of release of a hazardous substance was caused solely by an act of God or an act of war (i.e.,
force majeure.)
Full Release: An agreement by EPA to release a PRP from any further liability for response costs.
Under CERCLA section 1 22(j)(2), natural resource trustees may grant full releases of liability for
damages to natural resources.
Fund (Hazardous Substance Superfund or Superfund Trust Fund): A fund set up under
CERCLA to help pay for cleanup of hazardous waste sites and for legal action to force cleanup
actions on those responsible for the sites. The fund is financed primarily with a tax on crude oil and
specified commercially used chemicals.
General Notice Letter (GNL): A notice to inform PRPs of their potential liability for past and
future response costs and the possible future use of CERCLA section 122(e) special notice
procedures and the subsequent moratorium and formal negotiation period.
Generator: Any person who by contract, agreement, or otherwise arranged for disposal or
treatment, or arranged with a transporter for disposal or treatment of hazardous substances owned
or possessed by such a person, by any other party or entity, at any facility or incineration vessel
owned or operated by another party or entity and containing such hazardous substances.
Good Faith Offer (GFO): A written proposal submitted by a PRP to the EPA to perform or pay
for a response action. PRPs are given 60 days from the special notice to provide EPA a written
GFO. The GFO must be specific, consistent with the ROD or proposed plan, and indicate the PRPs’
technical, financial, and management ability to implement the remedy.
Hazard Ranking System (HRS): The principal screening tool used by EPA to evaluate risks to
public health and the environment associated with abandoned or uncontrolled hazardous waste sites.
The HRS calculates a score based on the potential for hazardous substances spreading from the site
through the air, surface water, or ground water, and on other factors such as nearby population. This
score is the primary factor in deciding if the site should be on the NPL and, if so, what ranking it
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should have compared to other sites on the list. A site must score 28.5 or higher to be placed on the
NPL.
Indian Tribe: As defined by CERCLA section 101(36), any indian tribe, band, nation, or other
organized group or community, including any Alaska Native village, but not including any Alaska
Native regional or village corporation, which is recognized as eligible for the special programs and
services provided by the United States to Indians because of their status as Indians.
Information Repository: Where the administrative record, current information, technical reports,
and reference materials regarding a SuperfIind site are stored. EPA or the State establishes the
repository in the community as soon as a site is discovered. It provides the public with easily
accessible information. Repositories are established for all sites where cleanup activities are
expected to last for more than 45 days. Typical community repository locations include public
libraries and municipal offices.
Information Request Letter: Formal written requests for information, authorized by CERCLA
section 1 04(e)(2)(A) through (C), issued during an administrative investigation. EPA is authorized
to request information from any person who has or may have information relevant to any of the
following:
the kind and quantity of materials that have been or are being generated, treated, disposed of,
stored at, or transported to a vessel or facility;
the nature or extent of a release or threatened release of a hazardous substance, pollutant, or
contaminant at or from a vessel or facility; and
the ability of a person to pay for or perform a cleanup.
Failure to respond to or incomplete response to an informational request is subject to statutory
penalties.
Innocent Landowner: A person who purchased or acquired real property without actual or
constructive knowledge that the property was used for the generation, transportation, storage,
treatment, or disposal of any hazardous substances. PRPs may assert this claim as part of their
defense, but only the court may make this determination based on CERCLA sections 107(b) and
101(35).
Institutional Controls: Non-engineered instruments such as administrative or legal controls that
minimize the potential for human exposure to contamination or protect the integrity of a remedy by
limiting land or resource use or providing information that helps modif y or guide human behavior.
ICs are generally used in conjunction with rather than in lieu of engineering measures such as waste
treatment or containment. Some common examples of ICs are zoning restrictions, building or
excavation permits, well drilling prohibitions, easements and covenants.
Joint and Several Liability: A legal doctrine defining the scope of a defendant’s liability. When
more than one PRP is involved at a site and the harm is indivisible, the court may impose joint and
several liability upon all parties involved at the site. In this instance, each PRP involved at the site
may be held individually liable for the cost of the entire response action.
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Judicial Review: The court’s review of a decision rendered by a federal agency or department or
a court’s review of an appeal challenging either a finding of fact or finding of law. Under CERCLA,
for example, the court provides judicial review prior to entry of the consent decree. In addition, the
court would provide judicial review of an EPA decision if a PRP submitted a “petition to review”
to a federal court of appeals. The jurisdiction of the court and the scope of its review are defined by
CERCLA section 113(h) and the Judicial Review Act, 28 U.S.C. § 234l-235l.
Lead Agency: The agency that primarily plans and implements cleanup actions. This could be
EPA, State, or political subdivisions, other federal agencies, or Indian tribes. Other agencies may
be extensively involved in the process, but the lead agency directs and facilitates activities related
to a site, often including enforcement actions.
Mixed Funding: Settlements whereby EPA settles with fewer than all PRPs for less than 100
percent of the response costs. The settlement must provide a substantial portion, greater that 50
percent of the total response costs, and there must be viable non-settlers from which remaining
response costs may be pursued. The three types of mixed funding settlement are preauthorization,
cash-out, and mixed work.
Mixed Work: A type of mixed funding settlement whereby EPA and the PRPs agree to conduct
discrete portions of the response action. Often EPA’s portion of the work is paid for or performed
by other PRPs as a result of subsequent settlements or unilateral administrative orders.
Moratorium: The period of time after special notice letters are issued during which the Fund will
not be used to begin work at the site on the RI/FS or RA. EPA also will not seek to compel PRP
action at the site during the moratorium.
Municipal Solid Waste (MSW): CERCLA section 107(p), as amended by the Small Business
Liability Relief and Brownfields Revitalization Act, defines MSW as waste material generated by
a household; and waste material generated by a commercial, industrial, or institutional entity, to the
extent that the waste material:
is essentially the same as waste normally generated by a household;
is collected and disposed of with other MSW as part of normal MSW collection; and
‘ contains a relative quantity of hazardous substances no greater than the relative quantity of
hazardous substances contained in waste generated by a typical single family household.
National Oil and Hazardous Substances Pollution Contingency Plan (NCP): The NCP is the
major framework regulation for the federal hazardous substances response program. The NCP sets
forth procedures and standards for how EPA, other federal agencies, States, and private parties
respond under CERCLA to releases or threats of releases of hazardous substances, and under Clean
Water Act section 311, as amended by the Oil Pollution Act of 1990, to discharges of oil.
Natural Resources: Land, fish, wildlife, air, water, ground water, drinking water supplies, and
other such resources belonging to, managed by, or controlled by the United States, state or local
government, any foreign government, any Indian tribe, or any member of an Indian tribe.
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Natural Resource Damages: Damages for injury or loss of natural resources as set forth in
CERCLA sections 107(1) and 111(b) and NCP section 300.615.
Non-Binding Preliminary Allocation of Responsibility (NBAR): An allocation of the total cost
of response among PRPs at a facility. CERCLA section 122(e)(3) allows EPA to provide NBARs
to PRPs to facilitate settlement. An NBAR is not binding on the United States or the PRPs and
cannot be admitted as evidence in court.
Orphan Share: A portion of cleanup costs that cannot be assessed to a PRP as a result of either the
PRP’s insolvency or EPA’S inability to identify PRP(s).
Owner or Operator: Any person owning or operating a vessel or facility, or in the case of a
hazardous substance being accepted for transportation, the common or contract carrier. It does not
include a unit of state or local government that acquired ownership or control involuntarily through
bankruptcy, tax delinquency, or abandonment.
Performance Bond: A guarantee given by a contractor that a work assignment will be completed
according to its terms and within the agreed time.
Performance Standards: Provisions in consent decrees and administrative orders specifying
specific levels of performance that site activities must achieve; often incorporated by reference into
the record decision. The inclusion of such performance standards enables the Agency to assure
measurable levels of cleanup that provide the protection desired.
Person: An individual, firm, corporation, association, partnersh p,joint venture, commercial entity,
U.S. government, State, municipality, or any interstate body.
Plaintiff: A party who brings a legal action; the party who complains or sues in a civil action and
is so named on the record.
Potentially Responsible Party (PRP): Any individual or entity including owners, operators,
transporters, or generators who may be liable under CERCLA section 107(a).
Preauthorization: A type of mixed funding settlement whereby EPA preauthorizes a claim against
the Fund by the PRPs for a portion of costs of conducting a response action. Once the
preauthorization agreement is finalized, the PRPs conduct the response action, as outlined in
settlement agreement, petition non-settling PRPs for reimbursement, and, if necessary, seek
reimbursement from the Fund for the preauthorized amount not received from non-settling PRPs.
Premium: A sum paid or agreed to be paid by a PRP to cover risks associated with settlement. This
sum represents an amount in addition to the cost of the response action. For example, a premium
may be part of an early de minimis settlement due to potential inaccuracy of total response cost
estimates or remedy failure.
Record of Decision (ROD): The official Agency document that explains which remedial cleanup
alternatives have been considered, the selected remedy, technical background relative to the decision,
and how the decision complies with the law.
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Recalcitrant: A PRP that is persistently uninterested in or refuses to reach settlement or that fails
to comply with a settlement or order.
Recusal: The voluntary or involuntary removal of a government official from any involvement in
a specific matter. Recusal is used to preserve the ethical standards of public service. Recusal
generally occurs when there is an appearance ofa conflict between governmental responsibilities and
private interest. Once a person is removed through recusal, she cannot participate in any activity
relating to the matter; specifically, she cannot see any correspondence or participate in any meetings
or negotiations related to the issue.
Remand: A legal term used when a court sends a case back to either a lower court or an
administrative agency for further action. For example, under CERCLA, if an administrative record
is found to be incomplete or inaccurate, one option of the reviewing court is to remand the case to
EPA with instructions to compile an accurate and complete administrative record.
Remedial: CERCLA section 101(24) defines a remedial action as one that is “consistent with
permanent remedy taken instead of or in addition to removal actions in the event of a release or
threatened release of a hazardous substance into the environment.” Generally, response actions that
take longer than a non-time-critical removal and are more complex than removals.
Removal: CERCLA section 10 1(23) defines a removal as “the cleanup or removal of released
hazardous substances from the environment, such actions as may be necessary taken in the event of
the threat of release... [ and] such actions as may be necessary to monitor, assess, and evaluate the
release or threat of release of hazardous substances...” Such evaluations include RI/FS. Removals
are classified according to urgency as “emergency,” for those requiring immediate response; “time-
critical,” for those that take no more than six months; and “non-time-critical” for removals that need
up to a year or more.
Reopeners: Contractual provisions that preserve the Agency’s right to compel the PRPs to
undertake additional response actions or to pay costs for Agency response actions in addition to
those agreed to in the settlement. Reopeners to liability are triggered when previously unknown
conditions at the site are discovered, or information previously unknown to EPA is received, that
indicates the remedial action is not sufficiently protective. Reopener provisions restrict the covenant
not to sue by defining the conditions under which the settlement may be re-examined.
Remedial Investigation/Feasibility Study (RIIFS): The remedial investigation and feasibility study
are conducted at an NPL site by EPA, or a PRP acting under an administrative order on consent
(AOC) or (rarely) a unilateral administrative order (UAO), to assess site conditions and evaluate
alternatives to the extent necessary to select a remedy, described in the record of decision (ROD),
that will clean up the site in accordance with CERCLA section 121.
Remedial Design/Remedial Action (RDIRA): The remedial design and remedial action are
conducted at an NPL site by EPA or a PRP under a consent decree (CD) approved and entered by
a federal court. RD is the engineered design of the selected remedy; RA is the construction and
continuing operation and maintenance of the remedy.
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Settlement: Resolution of a claim. Settlement occurs when a federal or state agency has a written
agreement with PRPs regarding payment for and conduct of specified response actions. Settlements
may be achieved administratively through an administrative order on consent or judicially through
a consent decree.
Special Account: A sub-account of the Fund in which cash-out settlement funds may be deposited
to segregate the funds and ensure that they are readily accessible for work at the site covered by the
settlement.
Special Master: A court-appointed individual who oversees the progress of a complex case before
it goes to trial. The scope of the special master’s authority is set forth in an order of reference.
Special masters are appointed only under exceptional conditions. For example, special masters may
be appointed in cases requiring the interpretation of complicated technical data or voluminous
information.
Special Notice Letter (SNL): A written notice to a PRP providing information on potential
liability, conditions of the negotiation moratorium, future response actions, and demand for past
costs. The SNL is authorized under CERCLA section 122(e)(l) and triggers the start of the nego-
tiation moratorium.
Statute of Limitations (SOL): The statutorily defined period of time within which the United
States, on behalf of EPA, must file a claim for cost recovery. If the United States does not file a case
within the SOL, it may not be able to recover its costs from the PRPs.
Stipulated Penalties: Fixed sums of money that a defendant agrees to pay for violating the terms
of a settlement. Procedures for invoking and appealing stipulated penalties and penalty amounts are
agreed to in the administrative order on consent or the consent decrees.
Strict Liability: Legal responsibility for damages without regard to fault or diligence. The strict
liability concept in CERCLA means that the federal government can hold PRPs liable without regard
to a PRP’s fault, diligence, negligence, or motive.
Transporter: CERCLA section 107(a) defines a transporter as a person who “accepts or accepted
any hazardous substances for transport for disposal” to any site selected by such person, “from which
there is a release or threatened release which causes the incurrence of response costs, of a hazardous
substance...”
WasteLAN: The acronym for Waste Local Area Network. For historical reasons, EPA’s Regions
use it when referring to CERCLIS.
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