Guidance: Recovering Indirect Costs in Superfund Cost Recovery Actions
It plays a vital role in cleaning up the environment, preventing future contamination, and sharing the financial burden of environmental cleanup. While challenges exist, cost recovery remains a powerful tool for achieving a healthier and cleaner environment for all. If EPA does the cleanup work using Superfund money, it will try to recover those costs from responsible parties. The Agency must document all its cleanup costs, including direct expenses (e.g., salary Superfund Cost Recovery and contractual) and indirect expenses (e.g., overhead).
This fact sheet does not elevate consideration of, or establish a new role for, cost in the Superfund program. Through the publication of this fact sheet, EPA hopes to ensure that all stakeholders involved in the Superfund process fully understand the important role of cost in remedy selection under existing law, regulation and policy, and to summarize recent initiatives aimed at enhancing the cost-effectiveness of remedial actions. This fact sheet was developed pursuant to the Superfund Administrative Reforms announced on October 2, 1995 by Administrator Browner. The principal settlement agreements used by EPA to get Superfund sites cleaned up are referred to as “Work” agreements.” EPA will negotiate an agreement (in the form of an administrative settlement or judicial consent decree) with a PRP that formalizes the work that will be done at a site and other requirements that PRPs must follow, including those related to community involvement during the cleanup.
Chapter 2: Models for Cost Recovery in Environmental & Water Treatment
- These proposals are similar in scope to the Vermont and New York legislation and target entities responsible for more than 1 billion metric tons of GHG emissions from 2000 to 2018 (Massachusetts) or 2000 to 2020 (California and Maryland).
- „The Role of Cost in the Superfund Remedy Selection Process“ clarifies the current role of cost in the Superfund remedy selection process as that role is established in the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the National Contingency Plan (NCP), and current EPA guidance documents.
- The assessment would include effect on public health, natural resources, biodiversity, agriculture, economic development flood preparedness and safety, housing, and other relevant effects.
- The process begins with the Environmental Protection Agency (EPA) identifying the PRPs and investigating their role in the contamination.
EPA pursues both the costs it has accrued before settlement („past costs“) and costs it anticipates accruing after the settlement („future costs“). EPA may deposit costs recovered through settlements into „special accounts“ within the Superfund Trust Fund to pay for cleanup activities at the site for which it received the money. As a matter of policy, EPA sends a written demand letter to PRPs prior to filing a cost recovery lawsuit.
- This chapter focuses on different models employed for cost recovery in environmental and water treatment, examining their strengths and weaknesses.
- PRP then have 60-days to respond with a good faith offer to do the cleanup work or pay for it.
- These model settlement documents are available from the Cleanup Enforcement Model Language and Sample Documents database.
- The Climate Superfund Act goes into effect on July 1, 2024, and requires the Agency to submit a report detailing the feasibility of this program in 2025 and promulgate implementing regulations in 2026.
- Vermont’s recently passed S 259, dubbed the Climate Superfund Act, along with the pending New York Climate Change Superfund Act, represent a paradigm shift in environmental liability.
Negotiating Superfund Settlements
The SOW sets forth the procedures and requirements for implementing the cleanup work at the site. In 2021, EPA introduced enhanced community involvement provisions in the model Remedial Design/Remedial Action SOW. EPA developed these community involvement provisions to better address community concerns, especially those communities potentially disproportionately impacted by environmental pollution. Similar provisions are being incorporated into other cleanup enforcement model statements of work. The legislative developments in Vermont, New York, California, Massachusetts, and Maryland reflect a broader trend of state-led initiatives to target companies involved in the extraction, production, and use of fossil fuels, and to controversially shift the costs for domestic and international climate change policies onto these companies. This comes at a time when the oil and gas industry is supporting millions of jobs, providing reliable energy, and ensuring the nation’s energy security.
Steps to Determine PRP Information:
If the courts ultimately support the Climate Superfund Cost Recovery Program, how much money would come into the State in future years, how large the adaptation and resilience costs would be, and the timing of those payments and costs cannot be estimated at this time. These case studies illustrate the diverse ways cost recovery is implemented in environmental and water treatment contexts. They showcase the potential of cost recovery to hold polluters accountable, fund cleanup efforts, and provide compensation for those impacted by environmental damage. However, the effectiveness of cost recovery depends on factors like the specific legal framework, the financial capacity of PRPs, and the political will to pursue accountability. Various techniques and tools are available for cost recovery in environmental and water treatment contexts.
Cleaning Up the Mess: Cost Recovery in Environmental & Water Treatment
If Scott vetoes the legislation, the General Assembly could reconvene in mid-June to consider an override vote. Statement of work model documents are available on the SOW category in the Cleanup Enforcement Model Language and Sample Documents database. Due to aggressive automated scraping of FederalRegister.gov and eCFR.gov, programmatic access to these sites is limited to access to our extensive developer APIs.
The assessment would be completed on or before January 15, 2026 and delivered to various legislative committees. The Agency maintains a database of model administrative and judicial settlement documents that are available for download in Word format. The database provides information on supporting policy and guidance documents for each model and provides the revision history for any updates to a model after it is issued.
More information about these Superfund landowner liability protections and the tools EPA uses to address liability concerns to support cleanup and reuse is available on the Agency’s Addressing Liability Concerns to Support Cleanup and Reuse of Contaminated Lands website. Additional information on Superfund enforcement negotiation process and settlement and orders is available from the Superfund Cleanup Enforcement Policy and Guidance documents database. PRP then have 60-days to respond with a good faith offer to do the cleanup work or pay for it. After that, there can be another 60-days or more for EPA and the PRP to negotiate a settlement. If the PRP does not submit a good faith offer at the end of the initial 60 days, EPA may start the cleanup work itself or issue a unilateral administrative order (UAO), requiring the PRP to do the work. He can either sign the legislation, veto it, or take no action for five days and the bill will become law without his signature.
Guidance: Recovering Indirect Costs in Superfund Cost Recovery Actions
States are increasingly holding the fossil fuel sector liable for costs related to climate change. Our Environment, Land Use & Natural Resources Group unpacks what companies need to know about these new state “superfund” laws. A former industrial site has been contaminated with heavy metals due to the actions of several companies over the past 50 years.
Companies identified as responsible parties will face increased operational costs due to mandatory contributions to the fund. Mr. Butler, Dr. Hall, and Dr. Burton are partners in the Washington, D.C., office of the economic and management consulting firm Putnam, Hayes & Bartlett, Inc. Mr. Butler and Dr. Hall are managing directors of the firm, and Dr. Burton is a principal. Mr. Butler’s practice focuses on environmental, product liability, and insurance coverage matters. Dr. Hall, a former commissioner of the Federal Energy Regulatory Commission (FERC), focuses his practice on the economic regulation of public utilities.
