United States       Office of Emergency and      9360 3-18
     Environmental Protection Remedial Response        EPA/540/R-96/042
     Agency          Washington, DC 20460       PB96-963410
                                     September 1996
Guidance on Compensation for Property
Loss in Removal Actions

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Notice
The procedures set out in this document are intended solely for the guidance of Government personne’
They are not intended, nor can they be reiied upon, to create any iights enforceable by any party in
litigation with the United States EPA officials may decide to follow the guidance provided in this
docunient or to act at variance with the guidance, based on an analysis of site circumstances The Agency
also reserves the right to change this guidance at any tune without public notice

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Contents
Pref ace iv
Introduction 5
Compensation Options 7
Restoration Considerations 8
Replacement Considerations 8
Reimbursement Considerations 9
Compensation Procedures 10
Documentation 10
Consultation 10
Regional Personnel 10
Community Relations 11
Completion 12
Restoration 12
Replacement 12
Reimbursement 13
Appendix A: Sample Agreement Form 14
Appendix B: Sample Miscellaneous
Obligating Document 15
AppendixC: References 16
Appendix D: Acronyms 17

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Preface
The National Oil and Hazardous Substances Pollution Contingency Plan (NCP) provides a
national emergency and non-emergency blueprint for responding to the release of hazardous
substances under the authority of the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (CERCLA or Superfund) as amended by the Superfund Amendments
and Reauthorization Act of 1986 (SARA), the Clean Water Act (CWA), and the Oil Pollution Act
of 1990 (OPA) Under the NCP, the U.S Environmental Protection Agency (EPA) has primary
responsibility for federal response to inland hazardous substance releases and for coordination of,
interagency support during a federal response Specifically, Section 111(a) of CERCLA grants
EPA the authority and discretion to use Superfund monies for “payment of any claim for
necessary response costs [ including compensation for property loss]. mcurred as a result of
carrying out the [ NCP] established under Section 311(c) of the Clean Water Act.” In addition,
the costs of compensating property items damaged or destroyed as part of a response action are
allowable costs according to the Office of Solid Waste and Emergency Response Directive
93 60.0-03B (the Superfiind Removal Procedures Manual issued in February 1988) and, therefore,
compensable under CERCLA.

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Introduction
When hazardous substances are released into the environment, they can threaten natural resources
and public property. In order to flulfihl its mission to protect human health and the environment,
the U S Environmental Protection Agency (EPA) in many cases will respond to these releases
Under CERCLA, On-Scene Coordinators (OSCs) act as EPA’s representative during response
actions They organize all containment, removal, and disposal efforts and coordinate federal
efforts with the local community
Hazardous substance releases can also damage private property, and contaminated property can
itself become a hazard. Property may sometimes be damaged in a response effort, or the OSC may
determine that contaminated property may need to be disposed of to protect human health and the
environment In these circumstances, EPA may consider compensating private parties for such
property
Most losses suffered by private parties should be compensated by the pai ty or pani es responsible
for contamination at the site, known as “potentially responsible parties’s (PRPs) Insurance may
also cover these losses EPA recognizes, however, that circumstances may sometimes limit the
access that private parties have to PRPs or insurance coverage Therefore, EPA may elect to take
on the responsibility of facilitating compensation for these losses, to’ the extent; they are not
otherwise covered
Each response effort is unique, and as EPA’s representative, the OSC, with assistance from the
CO and the Office of General Counsel, should consider whether compensation to a pnvate party
is an appropriate part of any given response effort In weighing this option, the OSC will consider
EPA’s paramount responsibility to protect human health and the environment and will ensure that
this responsibility is carried out in keeping with the principles of environmental justice EPA is
committed to making every effort to ensure equal access to a safe and habitable environment for
all
If EPA elects to compensate for property loss due to a hazardous substance release or the
resulting response effort, some circumstances may limit eligibility for compensation under
Superfund Superftrnd may not cover losses due to the negligence of contractors; the contractors
themselves would be responsible for such losses Also, individuals that have been found to be
PRPs at a site are generally not eligible for compensation
This guidance document outlines the general considerations and procedures for compensating
private parties for the loss of property that has been destroyed or that has been contaminated and
is a threat to human health and the environment. It applies to loss of property except in
circumstances where the title of the property would have to be transferred to the federal
government as part of the response action (see “Acquisition of Property’ on the previous page)
The OSC for a given response effort is responsible for the compensation steps and considerations
outlined in this guidance

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Compensation Options
Most losses suffered by private parties should be compensated by PR.Ps or through insurance
coverage However, EPA may elect to take on the responsibility of facilitating compensation for
these losses, to the extent they are not otherwise covered At the discretion of the OSC, EPA
may provide compensation through three methods restoring property to its original condition;
providing replacement property of similar value; and reimbursing owners in cash for the value of
lost property. In circumstances where compensation is deemed appropriate, the OSC’s primary
concern is to provide the most efficient and cost-effective compensation available that ensures the
health and welfare of the community and parties affected.
Many factors can influence the OSC’s choice of compensation method Some of them, such as
cost or the wishes of the property owner, are fairly straightforward Others can be more complex:
for example, when several property owners are affected by a single response action, a single effort
to compensate all of them may be the most equitable approach. The choice may also depend on
such factors as the restoration experience of the cleanup contractors or federal agencies involved
in the response and their availability to assist in a restoration effort. In the end, the OSC relies
heavily on his or her own experience and judgment, in consultation with Regional staff and the
affected property owner, to try to effect the most appropriate and efficient compensation plan.
A model site has been developed to help illustrate the considerations and procedures associated
with each compensation method The advantages, disadvantages, and specifics of each of the
compensation methods is outlined below

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Restoration Considerations
The object of this compensation option is to restore property, as closely as possible, t’o its origidal
condition. The Superfund Removal Procedures Manual (OSWER Directive 9360.O-03B) states
that restoration should be the first option considered usingexistiri cleinup contracts or
government agencies such as the U.S. Army Corps of Engineers (USACE) see “lAGs with
USACE” on this page) or the Bureau of Reclamation Rèstoratión can âl ó inclu le á sitüation
where property needs to be dismantled and removed during a response action, and then restored
to its original position upon completion of the response This is referred to as “s viiig and
reinstalling” property This method of compensation avoids some of the difficulties associated
with replacement or reimbursement, such as the need for appraisals or possible disputes over the
property provided as a replacement or the appropriate amount of cash for reimbursement
Replacement Considerations
In some cases, the nature or extent of the contamination, or the type of property contaminated,
makes restoration impossible. For instance, shrubs and trees damaged or destroyed during a
response action may be impossible to restore In other cases, contaminated articles may be
significantly more expensive to clean than to replace. This can be especially true of contaminated
items made of soft, permeable materials, such as sofas, carpeting, or mattresses
In such situations, the OSC may elect to supply property owners with new property of similar
. aiiie i.i çler this approach, the OSC should obtain the services of a vendor that sup property
of similar style á d value for the contaminated prQp rty o jgh exjstjng -up contracts_o
USACE, ofby smg a government credit card . The OSC tries to ensure that the replacement
items are comparable to the items lost (see “Cost vs Value” on the following page). The items are
purchased through the cleanup contractor, USACE, or a government credit card , and the cost is
hil1i i Superfund as part p L stqfthere. ponse action A Miscellaneous Obligating
Document (MOP) can also be completed by the OSC to purchase property for replacement
iIi poses . The OSC should evaluate which approach will most efficiently and cost effectively
id the circumstances at hand. There are certain circumstances that would render this option
the least expensive and most efficient
Reimbursement Considerations
If the property is too damaged or contaminated to restore and is not replaceable, the OSC may
consider a cash settlement for the value of the property. This is usually considered a last-resort
option , for several reasons One reason is that the result is the furthest from restoring the property
to its j e-response condition Another is that this approach requires more paperwork and
administrative involvement than the other two options, making it a longer process Some items,
however, such as artwork or antique furnishings, have value because they are unique and
therefore cannot be replaced If such items become-contaminated or damaged beyond repair,
reimbursement may be the only acceptable alternative
EPA usually keeps the amount of cash reimbursement to a minimum by combining this
compensation method with restoration or replacement of property whenever possible If the -
property owner and the OSC cannot reach an agreement over the amount of the reimbursern
officer_ort ghei- e iot i l gionalmanagement. The USC
—= ------—— - ___
9

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should continue to call on EPA resources to help resolve ny hngenng d spute,. b if al! avenues,,
within the Agency have been exhausted, the OSC should inform the property owner in writing of
three alternatives: -
• Making,a ç1aiip against property insurance; -
• Filing a tort claim (civil action) against the PRPs responsible for the site, or
• Filing a tort claim under Superftind

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Compensation Procedures
This section explains in some detail the steps taken to secure compensation. Theparticuiars,given
here are strjctly guid iines. The circumstances t a site often create complex response situations
that cannot be asil i ate ori±ed. Moreover, sqi e cpmpensa tion plans will’ combine aspects of alJ
three compensation methods to arrive at an appropriate ,settlem nt:’In’the’e d;’ the OSC. will re y,
heavily onhis or her own experience and judgment, in cor sultatibiiwith1 egjonal kafl and the
property owner(s), to arrive at the most appropriate and ‘most efficient compensation plan.
Documentation
As the OSC arrives at the site of a release, he or she should dâcument the condition of the site.
The written documentation, which becomes part of the Administrative Record’for the site, flulfills
four purposes:
• Documents the need for a removal action
• Identifies the removal decisions proposed,
• Details the rationale behind removal decisions
• Docuin itsthé removal actions taken
The OSC can, also use photographs or videotape to supplement the written’ record
As the4DSç makes decisions about response efforts, he or she shouldalso record,the condition of
any property hat potentially could be damaged during respdnse activities.’ This record is used as a
baseline to determine appropnate compensation after the response is complete
Consultation
In all ftznctions that he or she performs (including determining compensation), the OSC may
consult various sources, including Regional personnel, the owners of property affected, and other
coz cerned members of the community
Regional Personnel
Regional personnel that the OSC may consult include the Office of Regional Counsel, the
Regional Decision Team (RDT) assigned to the site, and the Contracting Officer (CO) With’
them, the OSC may discuss technical and legal aspects of the response. The RDT plays a role in
making removal decisions once sufficient assessment information about the site has been gathered.
The OSC may also discuss procedural options with Regional’ personnel Cleanup contractors or
government_agencies_(such asUSACE) that perform respdnse activities at the site may also
e?f i m compensation activ1tIes harEleaninior disposing o nt i ated prop ijt_y, pr
pro idin r Pl ëi ent ô i y T subcontract issues for the
I v

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response activities, and, therefore, may be able to clarify any contract options that could be used
i Imp1ement a co ensation &The CO tan also ;help to’unplement the options an OSC elects
touse. - ‘ -
—
Community Relations
Because thè’sUccess df a.response activity relies b a large extent on cooperatiq from the
affected community, it is important that the community be fully informed about the response and
compensation ptocesses. EPA assigns a, COmmunity Relations Coordinator (CRC) of ‘
spokesperson to’ each response action. This representative creates or designs aCoIiii iiunity.
Relations Plan to ensure, among other things, that there is an accep.tabl foiurn for affected
citizens to communicate their concerns and needs to EPA personnel The OSC should use the
forum designated in the plan to discuss the response options and the possible resulting damage
with the community and to ensure that community concerns are taken into account: He or’ she -
should also discuss compensation options with affected parties, explaining the compensation
process.
The OSC should attempt to come to an agreement with the affected parties on an appropriate
compensation plan, including the value of the property lost and the compensation method(s) to be
used In consultation with Regional legai $aft the OSC should draw,up apre are ’d”agreernent
that d mentsth compensation plan ançl th’è álUe ’of ’ariy damaged property (A sample
agreement form can be found in Appendix A.) The agree inent will include a statement that the
property owners understand that, upon çxecuting the agreement, they are not entitled to any
ftirthèr’compensation for the same d mage.,This claáse is in accordance with CERCLA Section
114(b), which states that, property owner who r ceive compensation under CERCLA for
damages associated with a respoijse action cannot’receive any further compensation fOr the same
damages under any other state or federal law. The agreement is supported by documentation in
the OSC’s action memo or amended action memo
The a re thent!is.placed in th site file, and other supporting documentation becomes jart of the
Administta:tive Record. ‘
Completion
Once an agreement is made with the owners of the affected property to restore, replace, or
reimbiirséthe damaged prope ty, the compensation procedure is completed in one of the
following ways.
Restoration
If the compensation plan entails restoring the property, the OSC may direct the cleanup
con-tractor; USACE or the Bureau of Reclamation to perform the restoration After it has been
cleaned or restored, the property is reinspected If the OSC determines that the property is still
contaminated, he or she should prpceed with another form of compensation

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Replacement
The OSC shoul ? the cleanup contractor or USACE to dispose of any items determined by
the OSC tôbe too contaminated to be cleaned/restored. These s must b iispose fis
hazardous waste. To replace items that are disposed of the OSC consults with Regional
personnel to identify other agencies that could assist in the process and to determine where
suitable replacement items may be purchased . The OSC may obtain the services of an independent
contracts or USACE, to estimate the value of all pro
targeted for disposal .
The OSC should then meet with the property owners, listing the items targeted for disposal and
their estimated replacement value When the OSC and the property owners come to an agreement
on specific replacement items, the OSC, after consultation with the CO, should direct the cleanup
contractor or USACE to purchase these items .
For Large-scale replacement activities, such as those dealing with several property owners, the
OSC should obtain the services of a vendor that supplies property of similar style and value to the
cont min ted property through existing cleanup contracts or the USACE. The property owner
can then select the replacement property, which will be purchased through the cleanup
contractors or USACE.
The vendor(s) will deliver the replacement property to the property owners and bill EPA through —
the cleanup contractor or USACE The cost of the replacement items becomes part of the cost of
the response action
Reimbursement
The OSC should use the cleanup contractor or USACE to dispose of any items he or she
determines to be too contaminated to be restored. To determine the replacement value of such
property, the OSC may direct the cleanup contractor or USACE to obtain the services of a
certified appraiser. After the value has been a raised a reement has been reached with
the p p rty owners, cas p y ients frc ni p rfund to property owners must be impi n
directly through an OSC, rather than through a cleanup contractor or USACE . The OSC iñü t
complete a “Miscellaneous ObLigating Document” (EPA Form 25SO- O)(see Appendix B) and
submit it to the Financial Management Office of Regional Accounting The Certifying Officer
approves and signs the payment schedule and transmits it to the U.S Treasury for processing
after the OSC ensures that the contaminated property is removed and disposed of properly The
Treasury then issues a check to the property owner.
7 __________________________________

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UM.d St.t..
Environmental Protection Agency
WuI ngton. DC 20460
MISCELLANEOUS OBLIGATiON DOCUMENT
1. OBLIGATION(S) FOR THE MONTHIPERIOD OF 19
2. PURPOSE:
3.
0 AN ORIGINAL OBLIGATION
AN INCREASE TO A PREVIOUS OBUGATION
A DECREASE TO A PREVIOUS OBUGATION
[ ]cANcE TION OF A PREVIOUS OBLIGATION
U
4. Em ic1 id Accow dng Dote
DC d,.icY, P$i. ._.Ldus C. Ui r s..... —
s ) NSI ) ) NSI
tLi L1H
/ C—
D isp fC.nS 1Mw II P 7)

5. CertificatIon
Certification of Funds Availability (Funds Certifying Official)
SIGNATURE DATE PHONE
PREPARED BY:
APPROVED BY:
(SIGNATURE)
(SIGNATURE)

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APPENDIX B: MISCELLANEOUS OBLIGATION DOCUMENT

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APPENDIX C: REFERENCES
“EPNs Final Indemnification Guidelines” (February 1994).
An overview of EPA indemnification policies.
EPA/OS WER “Superfund Removal Procedures-Action Memorandum Guidance”
(December 1990), EPA/540P-90/004
A detailed analysis of/he purposeand production of action memoranda for removal
actions.
OSWER Publication 9200 5-105, “Understanding Oil Spills and Oil Spill Response”
(October 1993), PB93 -963409
An overview of EPA ‘s oil spill response program and procedures.
OSWER Publication 9242 2-O1B, “Emergency Response Cleanup Services Contracts (ERCS)
User’s Manu ,” (October 1987), PB9O- 191966.
A summary of EPA’s ERCS contractor conventions and guidelines.
OSWER Publication 9355 5-14 FS, “EPAIUSACE Payment Process-Direct Cite/Revised
Reimbursement Methods” (May 1990)
Procedures for paying the US Army Corps of Engineers for Superfund-related
activities.
OSWER Publication 9360 0-03B, “Superfiind Removal Procedures Manual” (February 1988)
A total overview of EPA ‘s removal procedures and responsibilities.
OSWER Publication 9360 0-25, “An Overview of the Emergency Response Program”
(April 1992), PB92-963 404
An overvieii’ of EPA ’s program for emergency response to releases of oil and hazardous
substances
OSWER Publication 9360 3-05 ‘Superfund Removal Procedures-Public Participation Guidance
for On-Scene Coordinators Community Relations and the Administrative Record” July 1992),
PB92.9634 16
An overview and explanation of EPA community relations activities during removal
actions.
OSWER Publication 9360 3-06 “Superfund Removal Procedures-Removal Enforcement
Guidance for On-Scene Coordinators” (April ] 992), PB92-963 409
Superjiind removal guidance for On-Scene coordinators.
OSWER Publication 9360 6-09 ‘Superfund Emergency Response Actions” (October 1992),
PB540-R-92-02 0
A suiniiiarj. of fede , Cl/i) funded, emovaLs completed up to 1991, including a stale-by-stale

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overview.
OSWER Publicatieii 9834 6, “Policy Towards Owners of Residential Property at Superfund
Sites” (July 1991), PB91-205476
EPA ‘ S policy with regard to residential property owners at Superfund sites. -
“RAC Users’ Guide-Final Draft” (January 1995)
Guidance for purchasing and managing equipment under response action contracts.
“Section 213, Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970,
as amended by the Surface Transportation and Uniform Relocation Assistance Act of 1987”
Legislation that applies to federal agencies involved in the acquisition of private property
for federal use.

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APPENDIX D: ACRONYMS
CERCLA Comprehensive Environmental Response, Compensation and Liability Act of 1980
CO Contracting Officer
USACE United States Army Corps of Engineers
CRC Community Relations Coordinator
CWA Clean Water Act
EPA United States Environmental Protection Agency
JAG Interagency Agreement
NCP National Contingency Plan
NRT National Response Team
OPA Oil Pollution Act of 1990
ORC Office of Regional Counsel
OSC On-Scene Coordinator
OSWER Office of Solid Waste and Emergency Response
PCBs Polychionnated Biphenyis
PRP Potentially Responsible Party
RDT Regional Decision Team
SARA Superfund Amendments and Reauthonzation Act of 1986
(1

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