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Interim Guidance on Reporting Volume of Contaminated Media Addressed and Injunctive Relief Value or Certain Types of CERCLA107 and/or 122 Cash-Out Settlements (09-28-2008)

Interim Guidance on Reporting Volume of Contaminated

Media Addressed and Injunctive Relief Value

for Certain Types of CERCLA 107 and/or 122

Cash-Out Settlements


This guidance revises and supersedes the November 2003 Case Conclusion Data Sheet Guidance on reporting Volume of Contaminated Media Addressed (VCMA) for certain CERCLA cash-out settlements in ICIS. The previous guidance precluded the reporting of VCMA for all CERCLA cash-out settlements.  This interim guidance provides for limited exceptions for which VCMA should be reported for cash-out settlements pursuant to sections 107 and/or 122 of CERCLA



For purposes of this guidance, the term “cash-out settlement” means a judicial or administrative settlement under CERCLA §107 or 122 in which a potentially responsible party (PRP) commits to pay funds to EPA in settlement of the PRP’s liability for some or all of EPA’s future costs at a site. VCMA should be reported in ICIS for those cash-out settlements where monies are placed into a CERCLA site-specific special account for the purposes of providing funding to EPA to perform a CERCLA removal or remedial response action.  However, VCMA should not be reported in ICIS with respect to any portion of the cash-out settlement proceeds that is designated for site study, remedy design or institutional controls or to pay for oversight of a PRP-conducted removal or remedial action.


Reporting Requirements for VCMA and Value of Complying Actions in ICIS


When reporting the VCMA in ICIS, Regions should only report the portion of the VCMA directly attributable to the dollar amount designated for future response actions.  Even if 100% of the settlement proceeds are placed into a special account, if the settlement or the 10- point settlement analysis designates a specific portion of the settlement proceeds as being associated with past response costs and another for future response costs, the Region should only calculate the VCMA for the monies designated for future response costs.


On March 11, 2008, EPA entered into a bankruptcy settlement with W.R. Grace which resolves the 2003 judgment (in 2003, the federal district court in Montana awarded EPA over $54 million for cleanup costs incurred by EPA through Dec. 31, 2001) as well as continuing cleanup costs EPA has incurred since Dec. 31, 2001 and will incur in the future.  EPA will place the settlement proceeds into a special account within the Superfund that will be used to finance future cleanup work at the site. 

Of the $250 million in settlement proceeds, $59 million is to cover past response costs already incurred by EPA (i.e., cost recovery).  This amount should be recorded in ICIS as Cost Recovery.  The remaining $191 million which will be placed into a site-specific special account for future response work at the Libby Montana Superfund Site should be reported as PRP-funded Response Actions Injunctive Relief (aka Value of Complying Action) in ICIS on an interim basis in FY08. 

In this case the Region would only report the VCMA associated with the $191 Million designated for future work.


In addition, if the amount placed into a special account is not expected to cover the cost of the entire future response action, the Region should only report the amount of VCMA in ICIS that is estimated to be associated with the cash-out proceeds.  For example, if the cash-out proceeds represent only 90% of the projected cost of the remedy selected in the Record of Decision (ROD), the Region should only report 90% of the total VCMA associated with the ROD remedy in ICIS.


Another example may be where the Fund has completed a portion of the removal or remedial action and EPA enters into a settlement from which the proceeds will pay of a portion of the response action.  For example, if EPA has completed 60% of a $10 million remedial action ad receives $5 million in a settlement to complete the remainder of the response action, Regions should report 40% of the total VCMA associated with the response action, $4 million in Injunctive Relief/Value of Complying Actions, and the remaining $1 million as cost recovery.


Finally, in no case should the Injunctive Relief/Value of Complying Action reported in FY08 ever exceed the total estimated future response costs. Beginning in FY09 a new reporting category will be established in order to more accurately report the “Value of the PRP-funded Response Actions.”  Once in place, Regions should correct all FY08 settlements to reflect this new reporting category.


Special Interim ICIS Reporting Requirements


Due to system business rules, ICIS does not currently allow for reporting of VCMA and Injunctive Relief (aka Value of Complying Action) for enforcement actions citing Section 107 of CERCLA as a “law section violated.”  As such, in order to support this change for FY2008 cash-out settlements that were entered into pursuant to Section 107 only, Regions should temporarily report these settlements in ICIS under CERCLA Section 122(a), which will allow Regions to report both Injunctive Relief and VCMA amounts for these settlements.  Revisions will be made to ICIS in FY 2009 to allow the reporting of VCMA for cash-out settlements entered into under CERCLA Section 107 or 122(h). In addition, in FY09, a new reporting category “Value of the PRP-funded Response Actions” will be developed to more accurately describe the value of these settlements in ICIS. Once revisions are made to provide for a new and more accurate statutory reference for these types of settlements, the Office of Compliance and the Office of Site Remediation Enforcement will work with the Regions to properly re-code the statutory requirements.


In addition, the regions should place the following notation, verbatim, in the settlement comment field:


This settlement is a CERCLA cash-out settlement pursuant to section(s) 107 and/or 122(b)(3) of CERCLA.  Due to system limitations it is currently coded as being pursuant to Section 122(a) of CERCLA to allow for reporting the Volume of Contaminated Media addressed by the settlement as well as the Value of Complying Actions in ICIS.  This data will be corrected once appropriate modifications are made to ICIS.

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