Guidance: Superfund Cost Recovery Strategy

Cleanup costs related to any work performed by contractors must indicate that the work was authorized and completed. Further, cost documentation must show that the costs were actually incurred and paid for by the government. Before any funds would be deposited into the Climate Superfund Cost Recovery Program Fund, the State is likely to face substantial legal fees. Fossil fuel producers and refiners would be expected to sue the State over its right to demand cost recovery payments from them. Any legal action could drag on for years, especially if Vermont is the first state to require such cost recovery payments.

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: Cost Recovery Actions under Superfund

While unclear exactly how the GHG emissions will be calculated for each entity, the new law also directs the Agency to promulgate rules necessary to implement the law’s requirements that should include, but are not limited to, methodologies to identify responsible parties and calculate GHG emissions allegedly caused by each responsible party. 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. Cost recovery is a crucial aspect of Superfund that ensures financial responsibility for contaminated sites.

Steps to Determine PRP Information:

• Bill SummaryThe bill would establish the Climate Superfund Cost Recovery Program to be administered by the Climate Action Office of the Agency of Natural Resources.
• B) Direct cost recovery involves the EPA directly seeking reimbursement from PRPs, while indirect cost recovery involves settlements or agreements.
• California, Maryland, and Massachusetts have all proposed legislation that would enact programs similar to the Climate Change Superfund Act in that they would require companies to pay compensation for purported GHG emissions.
• Dr. Burton focuses his practice on economic and financial analysis of both liability and damage issues arising in businesslitigation.
• Fossil fuel producers and refiners would be expected to sue the State over its right to demand cost recovery payments from them.

Choosing the most appropriate approach depends on factors like the nature of the contamination, the financial capacity of the PRPs, and the specific legal framework governing the situation. The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), better known as Superfund, grants the government the authority to undertake cleanup actions at contaminated sites and subsequently seek reimbursement from potentially responsible parties (PRPs). These PRPs could be individuals, corporations, or entities whose actions contributed to the contamination. When a Superfund site, a severely contaminated area posing significant risk to public health and the environment, needs cleanup, the responsibility for the cost doesn’t always fall solely on the shoulders of the federal government. This is where cost recovery comes into play – a legal process designed to recoup funds spent on cleanup from those responsible for the contamination. “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.

An Act to Establish a Climate Superfund Cost Recovery Program to Impose Penalties on Climate Polluters

• The law will require “compensatory” payments from entities that the Agency deems “responsible parties” under the law.
• Second, $300,000 is appropriated from the General Fund to the Office of the State Treasurer in Fiscal Year 2025 to support hiring consultants or third-party services to assist in completing the assessment of the cost to the State and its residents of the emission of covered greenhouse gases.
• Cleanup costs related to any work performed by contractors must indicate that the work was authorized and completed.
• 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.
• Similar provisions are being incorporated into other cleanup enforcement model statements of work.

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.

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The demand letter requests that the PRPs reimburse the Superfund Trust Fund for a specified amount and triggers the accrual of prejudgement interest on the costs sought by EPA. This chapter presents real-world examples of cost recovery in environmental and water treatment, illustrating different approaches and outcomes. By adhering to best practices, cost recovery programs can be implemented more effectively and equitably, ensuring accountability for contamination and promoting a cleaner environment. This chapter explores various techniques used in cost recovery, particularly focusing on their application in environmental and water treatment contexts. The bill would require the State Treasurer to complete an assessment of the cost to the State and its residents of the emission of covered greenhouse gases during the period January 1, 1995 through December 31, 2024.

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 Superfund Cost Recovery 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.

Types of Superfund Response Costs

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 and contractual) and indirect expenses (e.g., overhead).

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.

Legislature passes Climate Superfund Act

This total cost would be apportioned by the respective state environmental agency among purportedly responsible parties proportional to their GHG emissions exceeding 1 billion metric tons. The Massachusetts bill would establish a climate change superfund of $75 billion over 25 years from profits of Massachusetts’ entities, as opposed to Maryland’s $9 billion, though it is unclear how the authors reached these respective assessments. While progress on the proposals in California, Massachusetts, and Maryland has been slower than in Vermont, a week after the Vermont Climate Superfund Act passed, the New York Legislature passed the state Senate in a vote on June 8, 2024. Vermont’s S 259, which became law without the governor’s signature in 2024, is aimed at addressing the alleged financial and environmental repercussions of climate change.