[Federal Register Volume 61, Number 208 (Friday, October 25, 1996)]
[Notices]
[Pages 55298-55302]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27156]
[[Page 55298]]
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ENVIRONMENTAL PROTECTION AGENCY
[FRL-5638-7]
Revised Guidance on Procedures for Submitting CERCLA Section
106(b) Reimbursement Petitions and on EPA Review of Those Petitions
AGENCY: Environmental Protection Agency (EPA).
ACTION: Issuance of revised guidance document.
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SUMMARY: During June 1994, EPA's Environmental Appeals Board (Board)
issued guidance regarding the procedures for submission and review of
petitions for reimbursement under section 106(b)(2) of the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 (CERCLA), 42 U.S.C. 9606(b)(2), as amended by the Superfund
Amendments and Reauthorization Act of 1986 (SARA). Section 106(b)(2)
allows any person who has complied with an administrative order issued
under section 106(a) of CERCLA to petition for reimbursement of the
reasonable costs incurred in complying with the order, plus interest.
To establish a claim for reimbursement, a petitioner must demonstrate
that it was not liable for response costs under CERCLA section 107(a),
or that EPA's selection of the ordered response action was arbitrary
and capricious or was otherwise not in accordance with law.
Based on its experience with such petitions since June 1994, the
Board issued a revised version of its procedural guidance on October 9,
1996. This notice sets forth the full text of the Board's revised
guidance for the convenience of interested members of the public.
FOR FURTHER INFORMATION CONTACT: For further information or for copies
of the revised guidance document, contact the Environmental Appeals
Board (Mail Code 1103B), 401 M Street, SW, Washington, DC 20460, (202)
501-7060.
Dated: October 10, 1996.
Edward E. Reich,
Environmental Appeals Judge.
Revised Guidance on Procedures for Submitting CERCLA Section 106(b)
Reimbursement Petitions and on EPA Review of Those Petitions
Note: This document is intended solely as guidance. It does not
establish a binding norm and is not finally determinative of the
issues addressed. This document is not intended to be a synopsis of
principles of law. The policies and procedures in this guidance do
not constitute a rulemaking by the Agency, and may not be relied on
to create a substantive or procedural right or benefit enforceable
at law by any person. The Agency may take action at variance with
this guidance.
I. Introduction
This document sets forth guidance regarding petitions for
reimbursement submitted under section 106(b)(2) of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980
(CERCLA), 42 U.S.C. 9606(b)(2), as amended by the Superfund Amendments
and Reauthorization Act of 1986 (SARA). This guidance describes the
contents of reimbursement petitions and the procedures that EPA uses in
responding to reimbursement petitions. The full text of section
106(b)(2) is set forth as an appendix to this guidance.
Section 106(b)(2) allows any person who has complied with an
administrative order issued under section 106(a) of CERCLA to petition
for reimbursement of the reasonable costs incurred in complying with
the order, plus interest. To establish a claim for reimbursement, a
petitioner must demonstrate that it was not liable for response costs
under CERCLA section 107(a), or that EPA's selection of the ordered
response action was arbitrary and capricious or was otherwise not in
accordance with law.
Section 106(b)(2) is organized in four parts, roughly as follows.
Subparagraph 106(b)(2)(A) requires that a petition be submitted to EPA
``within 60 days after completion of the required action.''
Subparagraphs 106(b)(2)(C) and 106(b)(2)(D) describe the substantive
grounds for reimbursement. Subparagraph 106(b)(2)(B) authorizes a
petitioner to pursue its claim for reimbursement in the appropriate
U.S. District Court if EPA denies the claim in whole or in part.
This guidance supersedes the Environmental Appeals Board's June 9,
1994 ``Guidance on Procedures for Submitting CERCLA Section 106(b)
Reimbursement Petitions and on EPA Review of Those Petitions,'' and is
effective immediately. The procedures described in this guidance will
be applied to all petitions submitted on or after the date of its
issuance. The Board will also apply these procedures, to the extent the
Board determines it to be practicable, to petitions that were submitted
before the date of issuance of this guidance and that have not yet been
decided by the Board.
II. Filing Procedures and Deadlines
Petitions for reimbursement should be submitted to EPA's
Environmental Appeals Board 1 by certified mail, return receipt
requested, at the following address: Clerk, Environmental Appeals Board
(Mail Code 1103B), U.S. Environmental Protection Agency, 401 M Street,
SW, Washington, DC 20460.
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\1\ The President's authority to implement CERCLA section 106(b)
was delegated to the EPA Administrator by Executive Order 12580
(January 23, 1987). The authority to receive, evaluate, and make
determinations regarding petitions for reimbursement submitted
pursuant to section 106(b) has been delegated to the Environmental
Appeals Board. See Delegation of Authority 14-27 (``Petitions for
Reimbursement'').
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Alternatively, petitions and supporting materials may be hand-
delivered to the Clerk of the Environmental Appeals Board between the
hours of 8:00 a.m. and 4:30 p.m., Monday through Friday (excluding
federal holidays), at the following address: Suite 500, 607 Fourteenth
Street, NW, Washington, DC 20005. The petitioner should also send a
copy of its petition, including attachments, to the EPA Regional
program office that issued the underlying administrative order.
Section 106(b)(2) requires that a petition be submitted to EPA
``within 60 days after completion of the required action.'' For the
purpose of determining a petitioner's compliance with the statutory 60-
day deadline, EPA will look to the postmark date if the petition is
sent to the Environmental Appeals Board by certified mail, or the date
of receipt by the Environmental Appeals Board if the petition is sent
by any other means. In other words, petitions sent to the Board by
certified mail must be postmarked not later than the 60th day after the
date of completion of the required action. Petitions sent to the Board
by any means other than certified mail must actually be received by the
Environmental Appeals Board not later than the 60th day after the date
of completion of the required action. It is recommended that petitions
be submitted to the Board only by certified mail or by hand delivery;
to minimize the risk of disputes over timeliness, filing by regular
first-class mail is discouraged. If the 60-day time period for filing
the petition with EPA expires on a Saturday, Sunday, or federal legal
holiday, the period will be extended to include the next business day.
III. Contents of the Petition
A. Background Information
A petition must include the following background information:
the petitioner's full name, title, and address;
the name, title, address, telephone number and fax number
of any agent or attorney authorized to represent the
[[Page 55299]]
petitioner (or, if the petitioner is not represented, the petitioner's
own telephone number and fax number);
the name and address of the facility at which the response
action was implemented; and
the U.S. EPA docket number for the section 106(a) order (a
complete copy of the order must also accompany the petition as an
attachment).
The petition must be signed by the petitioner or by an attorney
representing the petitioner. If the petitioner is not a natural person
(e.g., if the petitioner is a corporation), the petition must be signed
by the petitioner's attorney or by an agent or officer of the
petitioner who is qualified to act as a signatory; for purposes of this
requirement, a ``qualified'' agent or officer means one who satisfies
the definition provided in 40 C.F.R. Sec. 270.11(a). The Environmental
Appeals Board may at any time require any factual assertion contained
in a petition to be substantiated by an affidavit based on the
affiant's personal knowledge of the matter asserted.
B. Threshold Matters (Required Assertions Re: Petitioner's Eligibility
To File)
The Board's first priority, in acting on a petition for
reimbursement, is to evaluate the petitioner's eligibility to have its
claim addressed on the merits. The petition must therefore present
information concerning the following threshold eligibility matters:
(1) Compliance With the Order: The recipient of a section 106(a)
administrative order may seek reimbursement of its costs only if it
``complies'' with the order. A petition for reimbursement must
therefore include a statement indicating that the petitioner has
complied with the order, and evidence supporting that statement must
accompany the petition. If the EPA Regional office that issued the
order disputes the petitioner's assertion regarding compliance (under
the procedures described in Section IV.A, infra), the Board may
undertake to resolve that dispute before proceeding to the merits of
the petitioner's claim.
(2) Completion of the Required Action: A petitioner may only
present a reimbursement claim for consideration on the merits after
completion of the action required by the section 106(a) administrative
order. The petition must therefore include a statement indicating that
the action has been completed, and evidence supporting that statement
must accompany the petition. If the EPA Regional office that issued the
order disputes the petitioner's assertion regarding completion (under
the procedures described in Section IV.A, infra), the Board may
undertake to resolve that dispute before proceeding to the merits of
the petitioner's claim.
(3) Timeliness of the Petition: The petition must also indicate the
date on which the action required by the section 106(a) order was
completed, so that the Board can determine whether the petition is
timely. Very important information regarding compliance with the
statutory 60-day filing deadline appears supra in Section II of this
guidance, titled ``Filing Procedures and Deadlines.''
(4) Incurrence of Costs: The statute requires a demonstration that
the costs for which reimbursement is sought are ``reasonable.''
However, there is no need for a petitioner to undertake a full-scale
demonstration of the ``reasonableness'' of the costs being claimed
until and unless the Board concludes that reimbursement in some amount
is appropriate. Therefore, when initially filing a petition, the only
cost information that the petitioner must include is (1) a statement
asserting that the petitioner incurred costs in complying with EPA's
section 106(a) order, and (2) an estimate of the total costs being
claimed by the petitioner. Any dispute concerning the reasonableness of
the costs incurred will ordinarily be addressed only after the Board
decides that reimbursement of some amount should be awarded. The Board,
however, reserves the right to request cost information at an earlier
date if it deems such information useful in determining either
threshold eligibility issues or a petitioner's entitlement to
reimbursement on the merits.
C. Statement of Grounds for Reimbursement
The petition must articulate all legal arguments and all factual
contentions (including contentions, if any, regarding technical or
scientific matters) on which the petitioner relies in support of its
claim for reimbursement.2 Except as may be permitted by the Board
for good cause shown, and except as specifically provided in Sections
III.B(4) and IV.F of this guidance (describing procedures for
identifying and submitting cost-related information), no issues may be
raised by a petitioner during the petition review process that were not
identified in the petition, and no evidence or information may be
submitted during the petition review process that was not identified in
the petition, unless the petitioner demonstrates: (1) for new issues,
that such issues were not reasonably ascertainable as of the date the
petition was filed; or (2) for new evidence or information, that the
petitioner could not reasonably have known of its existence, or could
not reasonably have anticipated its relevance or materiality, as of the
date the petition was filed.
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\2\ A petitioner may seek leave of the Environmental Appeals
Board to amend a petition in order to present information, or to
identify evidence, that was not available at the time of the initial
filing. A petition must be promptly amended as appropriate to
correct or clarify any statements therein that are no longer true,
or that are determined not to have been true when made.
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The petition must explicitly state, as to each claim set forth
therein, whether the claim arises under CERCLA Sec. 106(b)(2)(C) or
under CERCLA Sec. 106(b)(2)(D).3 Both subparagraph 106(b)(2)(C)
and subparagraph 106(b)(2)(D) expressly place the burden of proof on
the petitioner.
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\3\ Any petitioner challenging EPA's decision in selecting an
ordered response action should also note that, in the event of a
successful challenge, section 106(b)(2)(D) calls for reimbursement
of ``reasonable response costs incurred by the petitioner pursuant
to the portions of the order found to be arbitrary and capricious or
otherwise not in accordance with law'' (emphasis added). Therefore,
when making a claim under section 106(b)(2)(D), the petitioner must
be specific in identifying the portions of EPA's order that it seeks
to challenge.
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D. Required Attachments
A complete copy of the administrative order on which the
petitioner's claim is based must accompany the petition as an
attachment. In addition, all other documents on which the petitioner
relies in support of its claim must also be submitted as attachments to
the petition, except for documents to be relied on solely as evidence
of the costs incurred or as evidence of their reasonableness.4
Each of the attachments must be separately identified, and the
relevance of each attachment to the petitioner's claim briefly
explained, in the body of the petition.
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\4\ Copies of such cost-related documents need only be submitted
after the Board issues an Order Granting Reimbursement. See Section
IV.F, infra.
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IV. Agency Procedures for Processing Section 106(b) Petitions
The Environmental Appeals Board will generally evaluate petitions
for reimbursement using the following procedures. The Board may,
however, exercise its discretion to stay further action on a petition
at any time. The Board may, for example, defer consideration of a
petition while related settlement discussions or judicial actions are
proceeding, or for other good cause. In addition, a petitioner may
elect to withdraw its petition, or to withdraw its own claim (e.g., for
settlement purposes) from a petition
[[Page 55300]]
submitted jointly with other petitioners. Whenever a petitioner
withdraws or voluntarily dismisses a claim for reimbursement, the
petitioner will be permitted to reinstate that claim only if the 60-day
statutory deadline (measured from the date of completion of the
required action) has not yet expired.
A. Regional Office Response to the Petition
Upon receiving a petition for reimbursement, the Environmental
Appeals Board will send a letter to the appropriate EPA Regional office
(with a copy to the petitioner) soliciting a response to the petition.
The Region must respond in one of two ways:
If the Region contends that one or more of the threshold
eligibility requirements discussed Section III.B of this guidance have
not been met--i.e., that the petitioner has failed to comply with EPA's
section 106(a) order, that the required action has not been completed,
that the petition was not timely filed, and/or that the petitioner has
not incurred any costs in complying with a section 106(a) order--the
Region must raise those contentions by submitting a limited responsive
pleading in the nature of a motion to dismiss the petition. Such a
pleading would address only the petitioner's alleged failure to meet
the threshold requirements described in Section III.B, and would be
treated by the Board as a request to reject the petition without
reaching the merits of the petitioner's claims. Because a pleading of
this nature would not include a response to the merits of the
petitioner's claims, the Region would be expected to file it
expeditiously, within thirty days after the date of the Board's letter
soliciting a response to the petition.5 The petitioner would then
be invited to respond to the Region's threshold objections. Once the
threshold eligibility issues are fully briefed, the Board will either
rule on those issues separately or defer ruling on them until the
merits have also been briefed (pursuant to a further order of the
Board). The Region would not, by initially filing a responsive pleading
in the nature of a motion to dismiss, be deemed to have waived any of
its arguments with respect to the merits of the petitioner's claims.
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\5\ The Regional office may request a limited extension of time
if necessary to verify whether a petitioner has completed the
response action.
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If the Region does not contend that one or more of the threshold
eligibility requirements discussed in Section III.B of this guidance
have not been met, the Region must submit a response addressing the
merits of the petitioner's claims. A response addressing the merits
would be due from the Region within sixty days after the date of the
Board's letter soliciting a response to the petition. The Region's
submission of a response addressing the merits of the petitioner's
claims (either on its own initiative or as directed by the Board) in no
way limits the Board's authority to reject the petition for failure to
satisfy the threshold eligibility requirements described in Section
III.B of this guidance.
When the Region submits its first responsive pleading to the Board,
addressing either the petitioner's eligibility to seek reimbursement or
the merits of the petitioner's claims, the Region must also submit a
certified index to the administrative record that the Region compiled
in connection with the issuance of the underlying CERCLA Sec. 106(a)
order. In addition, the Region must provide the Board with copies of
all documents that are relied on in the responsive pleading and that
have not already been submitted by the petitioner.
B. Additional Briefing
The Board may at any time require or invite the petitioner and/or
the Region to provide such supplemental briefing as the Board may deem
necessary for an informed resolution of the issues presented. Briefs
other than those expressly required or invited by the Board may be
submitted only with leave of the Board.
C. Evidentiary Hearings and Oral Arguments
In its sole discretion, the Board may choose to designate a hearing
officer (who shall be an EPA employee without prior involvement in the
matter under review) to conduct an evidentiary proceeding with respect
to any issue of fact that the Board may consider material to the
resolution of a reimbursement petition.6 Similarly in its sole
discretion, the Board may direct the parties to appear before it to
present oral argument with respect to one or more specified issues of
law. The Board may take either of those actions either in response to a
request by a party or on its own initiative.
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\6\ If the Board designates a hearing officer to conduct an
evidentiary hearing, he or she will be asked to issue a recommended
decision to the Board with respect to the issues addressed at the
hearing.
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If the Board determines that an evidentiary hearing or oral
argument shall take place, both the petitioner and the Region will be
notified in writing of the issues to be addressed and the hearing date
and location. Both the Region and the petitioner will be expected to
participate in such proceedings; a party's failure to participate may
cause adverse inferences or conclusions to be drawn against that party
with respect to any matter addressed at the proceedings.
D. Preliminary Decision
The Board's proposed disposition of a petition for reimbursement,
whether on the merits or otherwise, will first be issued to the parties
in the form of a ``Preliminary Decision'' on which comments will be
solicited (see Section IV.E, infra). If any materials cited in the
Preliminary Decision were not furnished by the parties themselves and
are not generally available, such materials will either be sent by the
Board to all parties along with the Preliminary Decision or be made
available for inspection by the parties at the Regional office upon
issuance of the Preliminary Decision, as the Board deems appropriate.
In addition, if an evidentiary hearing was conducted in connection with
the evaluation of a petition, the Board will provide a copy of the
hearing officer's recommended decision to the parties along with its
own Preliminary Decision.
E. Comments on the Preliminary Decision
When the Board issues its Preliminary Decision, it will also
establish a schedule providing both parties with an opportunity to
comment on the decision. The Board expects that it will generally
invite such comments according to the following sequence:
If the Preliminary Decision proposes to award reimbursement to the
petitioner, the Board will direct the Regional office to submit its
comments first. The Board will specify a later date for submission of
the petitioner's comments, which may include a response to the Region's
comments.
If, however, the Preliminary Decision proposes to deny the
petitioner's claim in full, the Board will direct the petitioner to
submit its comments first. The Board will specify a later date for
submission of the Region's comments, which may include a response to
the petitioner's comments.
The comment period following issuance of the Board's Preliminary
Decision represents the final opportunity for each party to present its
views in relation to the substance of the petitioner's claim for
reimbursement under section 106(b)(2). Comments should focus with
particularity on the analysis in the Preliminary Decision rather than
merely repeating general
[[Page 55301]]
arguments previously made. To the extent that a party wishes only to
reaffirm its reliance on arguments already made to the Board, such
arguments need not be repeated at length. Instead, comments of that
nature may be submitted in summary form referencing the commenting
party's prior submissions.
Before finalizing its determination to grant or deny reimbursement,
the Board will review and consider comments relating to any issue
previously identified by either party; but the Board will, except in
extraordinary circumstances, decline to consider any new claims or new
issues sought to be raised during the comment period. Absent
extraordinary circumstances, comments should therefore relate only to
the issues raised in the petition or in the Region's response to the
petition, or to any other matter discussed in the Preliminary Decision.
F. Further Proceedings
After reviewing comments (and responses to comments) submitted by
the parties, and making such changes as it deems appropriate in light
of those submissions, the Board will issue either an Order Granting
Reimbursement or a Final Order Denying Reimbursement. An Order Granting
Reimbursement will be issued if the Board determines that a petitioner
is entitled to reimbursement of all or any portion of the costs claimed
in the petition. A Final Order Denying Reimbursement will be issued
only if the Board determines that no portion of the costs claimed by
the petitioner will be reimbursed.
(1) Final Order Denying Reimbursement: A Final Order Denying
Reimbursement represents the Agency's final decision with respect to
the petitioner's claim. A petitioner who wishes to file an action in
Federal district court under CERCLA section 106(b)(2)(B) must do so
within thirty days of receipt of a Final Order Denying Reimbursement.
To eliminate any uncertainty as to the date of receipt, a Final Order
Denying Reimbursement will be served on the petitioner by certified
mail, return receipt requested.
(2A) Order Granting Reimbursement; Proof of Costs: An Order
Granting Reimbursement, in contrast, does not constitute the Agency's
final decision with respect to the petitioner's claim, because the
amount of reimbursement to be awarded must still be determined. When
issuing an Order Granting Reimbursement, therefore, the Board will also
direct the petitioner to furnish documentation of all costs that it
seeks to recover and that would be recoverable according to the
analysis in the Board's Order Granting Reimbursement. According to a
briefing schedule established by the Board, the Regional office will
then be afforded an opportunity to challenge particular cost items (as
unreasonable or otherwise not recoverable), and the petitioner will be
permitted to respond to those challenges.7
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\7\ Because the statute expressly limits reimbursement from the
Fund to ``reasonable'' costs (plus interest), the Board may require
a petitioner to submit not only evidence of the costs actually
incurred--which evidence would include, at a minimum, itemized
invoices and proof of their payment in full--but also evidence
demonstrating that those costs are reasonable. Proof of
``reasonableness'' of costs would become particularly important if
the Regional office, after receiving the petitioner's initial
itemization of the costs being claimed, offers specific reasons for
concluding that certain cost items are not reasonable. Although the
Board cannot anticipate all possible permutations of these issues,
factors relevant to the reasonableness of a petitioner's costs might
include: bidding procedures used for a particular project and the
number of bids received; reasons for selecting a contractor other
than the lowest bidder; cost estimates provided by prospective
contractors and the circumstances surrounding any later deviations
from those estimates; and the reasons for any unforeseen expansion
of a particular project or unforeseen delay in its completion, to
the extent that such expansion or delay resulted in additional
costs. Petitioners should take care to retain documents and other
evidence bearing on such matters, and should be prepared to submit
such evidence to the Board upon request.
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(2B) Final Order Granting Reimbursement: After the cost issues have
been briefed, the Board will issue a Final Order Granting
Reimbursement. A Final Order Granting Reimbursement represents the
Agency's final decision with respect to the petitioner's claim. A
petitioner who wishes to file an action in Federal district court under
CERCLA Sec. 106(b)(2)(B) must do so within thirty days of receipt of a
Final Order Granting Reimbursement. To eliminate any uncertainty as to
the date of receipt, a Final Order Granting Reimbursement will be
served on the petitioner by certified mail, return receipt requested.
The Board's final decisions under CERCLA Sec. 106(b)(2) are
available on a current basis on LEXIS, WESTLAW, and the World Wide Web
(http://www.epa.gov/eab). The Board's decisions are also published
periodically in a series of bound volumes titled Environmental
Administrative Decisions, available for purchase from the
Superintendent of Documents, U.S. Government Printing Office
(telephone: 202-512-1800).8 For the convenience of litigants and
the Board, the Board encourages the citation of Board decisions to the
appropriate volume of the Environmental Administrative Decisions, if
the cited decision appears therein.
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\8\ When contacting GPO regarding Volumes 1 through 4 of the
Environmental Administrative Decisions, please refer to GPO Order
No. 055-000-00538-8. When inquiring as to Volume 5, please refer to
GPO Order No. 055-000-00545-1. Volume 6 will be published during
1997.
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V. Further Information
For further information concerning the matters addressed in this
guidance, contact Stuart Cane, Environmental Appeals Board (1103B),
U.S. Environmental Protection Agency, 401 M Street, SW, Washington, DC
20460, (202) 501-7060.
Appendix
CERCLA Section 106(b)(2) provides:
(A) Any person who receives and complies with the terms of any
order issued under subsection (a) of this section may, within 60 days
after completion of the required action, petition the President for
reimbursement from the Fund for the reasonable costs of such action,
plus interest. Any interest payable under this paragraph shall accrue
on the amounts expended from the date of expenditure at the same rate
as specified for interest on investments of the Hazardous Substance
Superfund established under subchapter A of chapter 98 of Title 26.
(B) If the President refuses to grant all or part of a petition
made under this paragraph, the petitioner may within 30 days of receipt
of such refusal file an action against the President in the appropriate
United States district court seeking reimbursement from the Fund.
(C) Except as provided in subparagraph (D), to obtain
reimbursement, the petitioner shall establish by a preponderance of the
evidence that it is not liable for response costs under section 9607(a)
of this title and that costs for which it seeks reimbursement are
reasonable in light of the action required by the relevant order.
(D) A petitioner who is liable for response costs under section
9607(a) of this title may also recover its reasonable costs of response
to the extent that it can demonstrate, on the administrative record,
that the President's decision in selecting the response action ordered
was arbitrary and capricious or was otherwise not in accordance with
law. Reimbursement awarded under this subparagraph shall include all
reasonable response costs incurred by the petitioner pursuant to the
portions of the order found to be arbitrary and capricious or otherwise
not in accordance with law.
(E) Reimbursement awarded by a court under subparagraph (C) or (D)
may include appropriate costs, fees, and other expenses in accordance
with
[[Page 55302]]
subsections (a) and (d) of section 2412 of Title 28.
[FR Doc. 96-27156 Filed 10-24-96; 8:25 am]
BILLING CODE 6560-50-P